Successful Startup 101 Magazine - Veteran's Issue 2014 Page 6
Use your spare moments of relief from a busy schedule as effectively as possible to help your business.
How do you use your downtime?
About the Author
Ilya Pozin is an entrepreneur, writer and investor. He is the founder of Open Me, a social greeting card company, and Ciplex, a digital marketing agency. He’s a columnist on entrepreneurship and marketing.
New Report: Entrepreneurship May Be Contagious
Knowing an entrepreneur may be a big factor for becoming one. But more research might explain what can motivate more people to take the leap.
By Lewis Schiff
A recent report from the Ewing Marion Kauffman Foundation explores whether or not instances of entrepreneurship would increase if more people had contact with more entrepreneurs.
It strikes me that would be the case, based on what I discovered about social contagion while researching my book, Business Brilliant. You're probably already familiar with social contagion theory from the colloquialism, "follow the crowd." Social contagion explains why you would have trouble quitting smoking if many of your friends still smoke. It also explains why you're more likely to try harder at something when you are surrounded by others who are also trying hard; for example, when a team practices for a big game.
Could Entrepreneurship Be Viral?
The Kauffman report considers the potential power of social contagion for entrepreneurship through a survey of 2,000 Americans. It asks the respondents how many of them know an entrepreneur. It further investigates how many upwardly-mobile entrepreneurs (those with growing businesses) the respondents have contact with. In short, about a third of survey respondents have contact with an entrepreneur and about 15 percent have contact with upwardly-mobile entrepreneurs.
The paper ponders if entrepreneurship is contagious--if exposure to entrepreneurs increases the likelihood an individual becomes an entrepreneur. If it were true, a prescription to increase new business creation would be relatively simple. But the paper does not establish a direct correlation between the two; it just shows "that a large number of U.S. residents know entrepreneurs, and that knowing an entrepreneur is possibly a significant factor in whether a person is also an entrepreneur."
Where More Social Research Should Be Done
In my view, a different area of social research might explain why new business creation calls for more than just mere exposure.
The entrepreneurial journey almost always begins with a deep valley of hardship. Most new business owners have to forego corporate salaries when they start a new venture and herein lies the problem. Studies reliably show that most people are uncomfortable in situations that necessitate their being the least-affluent member of any group. One famous experiment, repeated many times, shows that most people say they would feel happier earning $33,000 in a workplace where everyone else makes $30,000 than if they were earning $35,000 in a workplace where everyone else makes $38,000. They would be happy to sacrifice $3,000 a year in a salary just to enjoy being top dog in a lower-paying workplace. For most people, the prospect of starting at the bottom--where nearly every entrepreneur begins his journey--is so undesirable that no amount of direct social contact with successful business owners will motivate them to take a similar leap.
About The Author
LEWIS SCHIFF is the executive director of the Inc. Business Owners Council. His latest book is Business Brilliant: Surprising Lessons from the Greatest Self-Made Business Icons. In November, he will co-lead the first-ever Inc. Riders Summit, a three-day motorcycle road trip for entrepreneurs through the Nevada desert. @lewisschiff
Change Happens to You and Because of You
Personally selected by Tabitha Jean Naylor. Written by Brian Solis
I’ve come to learn that having opinions, insights, and standing for something is as taxing as it is rewarding. Like you, I am inspired by what surrounds me, by history and by the possibilities that open up as a result of my experiences. But, it is not easy. And, I suppose it’s not supposed to be.
I too feel challenged by what I should say versus what has already been said, yet also shaped by what should not be vocalized. I’ve come to learn however, that the relationship between self expression and inner monologue defines one’s character. It is what’s is said and what is not said that defines impressions and ultimately the perceptions of who we are and for what it is we stand or hope to achieve.
Satisfaction or dissatisfaction with oneself is trumped by our ability to learn and teach together.
My personal and professional struggles are often tied to emotional rigors that spin me through cycles of vision, validation, vindication, vulnerability and vanity. These 5 V’s either pull me to learn, participate and teach or push me into a realm of either complacency or uncertainty, both of which result into creative stillness. These 5 V’s however coalesce and produce different results based on the measure we apply to our own actions, reactions and inactions.
Impressions are linked to expressions and ultimately they are ours to define.
If you’re not provocative in some way, how can you possibly stand out to inspire someone else? This is a time for you to choose what it is you do with the inevitable reactions of encouragement, criticism, or resentment you will receive as you discover, share and grow. Take from each experience and move in a direction where you invest and receive value that inspires you and those around you. This is a time to be your own hero…to both inspire and be inspired.
“The impact of your work is the result of the balance you place on reacting to, learning from, and transcending teachers, critics and supporters.”
Change happens to you and because of you. It is what perpetually happens next that defines your character and ultimately your legacy.
This is your time.
About the Author
Brian Solis is principal at Altimeter Group, a research firm focused on disruptive technology. A digital analyst, anthropologist, and futurist, Solis has studied and influenced the effects of emerging technology on business, marketing, and culture. Solis is also globally recognized as one of the most prominent thought leaders and published authors in new media. His new book, What's the Future of Business (WTF), explores the landscape of connected consumerism and how business and customer relationships unfold and flourish in four distinct moments of truth. His previous book, The End of Business as Usual, explores the emergence of Generation-C, a new generation of customers and employees and how businesses must adapt to reach them. Prior to End of Business, Solis released Engage, which is regarded as the industry reference guide for businesses to market, sell and service in the social web.
Fear - The Entrepreneur’s New Fuel
By Tabitha Jean Naylor
Fear...it’s something that young entrepreneurs hear plenty about.
They tell you fear isn’t real, that it’s something that people create in their minds. That it shouldn’t effect you because you, yourself, made it up. But how often has this mindset actually helped you start a small business or jumpstart your entrepreneurship development?
I’m going to take a wild guess and assume that it hasn’t. You’ve looked up and down the internet, read books, listened to speakers, heard all about other peoples’ entrepreneur success stories. The fear, however, still persists. It’s still there, slowly eating away at your morale.
The bottom line is that fear is real. It’s very real. If it wasn’t, you wouldn’t feel it.
Dealing with fear, realizing that it’s going to be a part of the journey, is the only way that you’re going to become a successful entrepreneur. You can scour the web and read every book imaginable on how to deal with your fears but until you realize that fear is going to be a part of the process you are going to struggle.
It’s all about making a decision that your comfort zone is not a place that you want to be. Understanding that fear is going to be there every step of the way and falling in love with the feeling of your stomach tightening every time you make the deci
sion to face those fears. That’s what is going to help you develop into the type of business entrepreneur you want to become.
People that work for other people are helping THOSE people achieve THEIR dreams. Whether they are a sales executive making six figures or working in a cubicle for 50k a year, they are spending their time helping other people achieve their dreams.
There is an old quote that says that 99% of people in the world can work for a company once it’s been created, but only 1% of the population can actually create those things or places that the 99% work at.
Understand that you, already, are a part of that 1%. When you’ve made that decision to make the jump to starting a business, you’ve done something that only 1% of the population has the ability to do.
So whatever you’re getting into right now - whether that be developing new business ideas, signing on with a new marketing partner or maybe still thinking about making the jump to opening a small business - realize that fear is going to be a part of the process.
Realize that uncertainty, butterflies, and a tightened stomach are going to be with you every step of the way. But also realize that beautiful things will begin to happen when you start to accept that uncertainty and move forward anyhow. Realize that your potential lies right beyond that comfort zone.
Entrepreneurship is a beautiful thing. It’s also an incredibly difficult thing. You’ve already made a decision that only 1% of the population has the ability to make. Now make the decision to put yourself at the top of that 1%.
A wise person once said, ‘By leaving behind your old self & taking a leap of faith into the unknown, you find out what you are truly capable of becoming.’
Face your fears, step out of that comfort zone, use that fear to fuel you and don’t ever look back again.
Tips from the Startup Fundraising Playbook
By Nathan Beckord
I’ve been considering raising a seed round for my startup Foundersuite. So, to get my head in the game, I’ve been chatting up various startup friends who have recently been in the market for capital.
Here are a few of the best tips for running an efficient fundraising round.
1. Mine AngelList and CrunchBase to Build a List of Investor Targets
I’m a big fan of AngelList, and whenever I need to build a dataset of target investors, it’s the first place I go. Here’s how I do it: From the homepage, navigate to the “People” tab and use the “Role” header to select the relevant type of investor (seed, angel, VC, etc.). Next, scroll to the “Markets” field and enter the appropriate industry and vertical (e.g. “SaaS,” “e-commerce,” “Digital Media” etc.). Pick out names of people you’ve heard good things about, or who clearly get the space, then add them to a spreadsheet or dedicated CRM product.
An alternative, and somewhat more aggressive, approach comes from Dan Martell in an answer on his Clarity site. To paraphrase, he states, “Find other people [on CrunchBase] who have raised money and ask them who they got it from.” The process he follows is to first create a list of all similar companies that successfully raised money. Next, cold email the CEO/Founder and ask to schedule a call with them for advice. Finally, as you develop a rapport with them, consider asking who their investors are and if they’d be willing to make an intro.
2. Aim for the Double Opt-In Intro
This is a tip I recently learned from my friend Richard Goodrum, COO of RaceYourself. The best intros come from warm referrals, but instead of asking your referrer to simply make an intro, suggest they first ask the target if she or he would like to take it. For example, send a personalized email to your connector asking for an intro to Ben Horowitz, and instead of making a direct intro, your connector first forwards your note to Ben, asking him if he’d like to take the opportunity.
Generally speaking, people dislike intros being “forced” on them; it creates awkward social pressure if they’re really not interested. Further, if they do say they’d like to take the intro, they’ve already said “yes” once and may be more predisposed to liking the deal. It’s a subtle difference – but an effective one.
3. Create Time Pressure
This tip came from startup wunderkind and Y Combinator alumni Shehzad Daredia, who recently closed a round for his startup bop.fm: “A tactic that’s worked for me when fundraising is to create the perception of time pressure so investors have a forcing function. A high-risk, high-reward way to take that one step further is to very politely and diplomatically acknowledge that the VC is probably not well-equipped to make a decision fast enough to meet your timeline.
For example, stating, ‘I know you guys must have a process to go through, so I understand if you can’t make our timeline.’ Issuing such a subtle, playful challenge to one VC resulted in them literally running after us in the parking lot shortly after our first meeting and saying, ‘We’re in for $2 million – is that fast enough for you?’”
About the Author
Nathan Beckord is co-founder and CEO of Foundersuite, a San Francisco-based developer of of software tools for entrepreneurs, including an Investor CRM for managing the fundraising process.”
* This article originally appeared on TechCrunch.
5 Ways for Bootstrapped Startups to Get Through the First Year
By Zach Cutler
In the eyes of an investor, a bootstrapped startup that has proven stable and successful within the first year is powerful. It not only raises confidence in the product and the leadership behind it, but also indicates that any invested money will likely not be thrown away.
Ultimately, when it comes to working with investors, it’s important to prove that a startup and the people behind it not only know how to spend money, but know how to bring in additional money.
To successfully bootstrap a company in its first year, it’s important to consider a few things:
1. Cut the nonessentials and focus on immediate needs. There is nothing more important to startup success than the talent that makes it all possible. Avoid any unnecessary expenses, such as office overhead or “frills,” to free up money to invest in better talent.
Virtual offices will allow team members to work together from anywhere in the world and are extremely cost-effective. Ultimately, cutting costs wherever possible will more likely enable worthwhile investment in a larger team, which will be the catalyst to growth for the company.
2. Focus on two types of talent: engineering and marketing. An innovative and savvy engineer knows the ins and outs of mobile apps and understands what users truly want and need. An intelligent and driven marketing professional understands the market and how to reach the desired target audience.
With these two power talents working side by side, any product has a good chance to be successful.
3. Don’t cut corners. Investors need to know the business and its leadership are stable and legit, so do everything by the book. Once they get involved, investors will want to see paperwork, as well as profits and losses and balance sheet reports right off the bat. This should be a priority from day one.
Find an accountant and purchase good accounting software to ensure that records are clear and corners are not cut. This will also allow for extra time to tend to other important matters within the startup.
4. Cover the legalities before it’s too late. It’s critical to ensure the product or app is covered and that there are no loopholes that would allow someone to steal its name or intellectual property once it takes off.
During the planning phases, when speaking to potential investors, partners, or developers, it’s also wise to use a confidentiality agreement to ensure everything stays within the four walls. Additionally, copyright any sketches, mockups or documentation of the product during development stages.
5. Utilize freelance consultants. Skilled freelance consultants offer additional niche talent only when it’s needed. Build and keep a solid list of trusted and intelligent freelancers who can be utilized when the time is right. With the extra cash fl
ow freelancers provide, startups have more ability to hire the best full-time staff needed for success.
It’s no secret that the first year for a bootstrapped startup will have many highs and lows. Despite the uncertainty and exhilaration that comes with those highs and lows, it’s important to stay focused on what’s needed to get to the next step.
Eventually, those steps will likely lead to talking with investors to get the startup to the next level. Cutting no corners from the very first day, bringing on the best talent and preparing for failure and success will prove to an investor that the product and those behind it have what it takes to succeed.
About the Author
Zach Cutler is an entrepreneur and founder and CEO of Cutler, a tech PR agency in New York and Tel Aviv. An avid tech enthusiast and angel investor, Cutler specializes in crafting social and traditional PR campaigns to help tech startups thrive. He can be reached at zach@cutlergrp.com.
* This article originally appeared on Entrepreneur.
How to Close a Sale: The Only Thing You Need to Know
By Jill Konrath