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Fashion start-ups have a lousy track record on Kickstarter--the vast majority never reach their goals. Here are three instructive exceptions.
Of the 40,000 successful Kickstarter campaigns hosted on the crowdfunding platform since it came onto the scene in 2009, fashion campaigns are the least successful--only 28 percent of them meet their funding goals.
But in recent months a few breakaway campaigns in this space are worth noting for the lesson they offer any consumer product company seeking to win hearts and pocketbooks. Each company is founded on noble principles that you might think would be the key to their marketing strategies. But ultimately each says there's primarily one thing responsible for their Kickstarter fame: a high-quality product.
This two-year-old shoe company recently managed to raise more than $85,000, something most companies--in any category--struggle to do.
The idea: Use the Peruvian rainforest's natural resources to create a sustainable business, pay rubber producers fair prices, and wrap it all up in an avant-garde product fashioned by chic Parisian designers.
"We set up an economic development project with US-AID to establish fair trade prices for the rubber and to ensure that our producers got paid a fair wage," says co-founder Joshua Rudd. "The World Wildlife Fund was the team who trained them on how to cut the trees properly and in an environmentally-friendly way without killing the tree," Rudd says.
Not only does Piola now source its materials from 33 wild rubber producers and 55 organic cotton producers in Peru, but also pays them three to five times the market price for these materials.
You can see the appeal here. Not only can you tromp around in cool-looking French shoes, you also get the nice feeling that comes from supporting a company that treats workers fairly and tries to preserve the rainforest.
The 10-Year Hoodie
Flint and Tinder founder Jake Bronstein has a problem with "planned obsolescence," a tactic manufacturers use in which their goods wear out or become unusable sooner rather than later. As a result, consumers buy products more frequently.
His solution? A high-quality, American-made hoodie guaranteed to last at least a decade. If it doesn't, you can send it to Flint and Tinder for mending and the company will mail it back to you for free.
"These days when you walk into a store it almost seems like companies have lowered your expectations so far to the point where, yeah, you can buy something really cheap and that's nice, but when it falls apart on you or when it isn't what you wanted or when it comes apart at the seams quickly, you almost know better than to take it back," he says. "You assume that there's something written on the back of the receipt that says that you got what you paid for and you're not entitled to anything else."
It wasn't always this way, Bronstein says. Background props in his Kickstarter video include things like an old metal fan, a rotary phone, and a hand-crank pencil sharpener--all nostalgic triggers that elicit the idea that "they don't make 'em the way they used to." You'll also see a strategically-placed flag behind him as he speaks--a reminder that the hoodie is made in America, something Bronstein says is important to his customers.
"When my dad was young, you could take anything back to a department store. They had a reputation and valued the relationship that they had with you and they really only wanted to sell something that they felt was going to live up to the promise of both the product and the company selling it and so we kind of wanted to revisit that idea," he says.
It's a compelling concept. The 10-Year Hoodie is the most successful fashion campaign ever conducted on Kickstarter--it recently exceeded its $50,000 goal by $1 million.
Jeans makers Josh Gustin and Stephen Powell, co-founders of San-Francisco-based Gustin, did something quite different with their Kickstarter campaign. The six-year-old company offered fans the chance to change the way they buy jeans. Instead of paying as much as $205 for their high-quality American-made jeans typically sold in swanky boutiques, Gustin asked them if they'd rather buy them online in a Kickstarter-like platform of their own.
In other words, after more than 4,000 backers pledged nearly $450,000 through Kickstarter to buy its jeans, which start at $81, Gustin promised to let them keep doing it going forward. Now if you visit weargustin.com you can pledge to buy a certain pair of jeans, but Gustin won't actually start cutting and sewing material until enough backers have committed to buy a particular style. In that way, customers are actually deciding which styles get produced--a pretty genius way to get full transparency into what buyers want most.
"For us, the whole brand is about authenticity," says Gustin. "I think we're changing the way typical fashion brands engage with consumers. Fashion is typically very standoffish--creative geniuses that you'll never understand or talk to and they're just brilliant. We like how we design and our products are great but we don't need to keep our consumers at arm's length," says Gustin.
The Common Denominator: An Exceptional Product
Fair trade, preserving the rainforest, made in America, a tight relationship with customers--these are all compelling reasons to buy products like Piola shoes, Flint and Tinder hoodies, and Gustin jeans. Even so, each company says these underlying principles come as bonuses and are not the primary draw to their products.
For example, when asked if the idea of helping people in Peru and protecting the rainforest are Piola's main virtues, Rudd said, "It hasn't really affected our customers to the point where they will go out of their way to spend the extra dollar. The fashion obviously drives the market first. If they like the aesthetic of the shoe, the customer is going to buy it. A lot of the time they won't even know the story behind Piola and what we're doing until they research us."
Bronstein sings a similar tune when it comes to his long-lived sweatshirt and the draw of "made in America."
"We made the absolute best product that we could," he says. "If you ask people to buy something because of where it was made that's almost like charity, it's not really sustainable. They have to love it, and then where it was made or how it was made is a secondary plus."
As for those crowdsourced jeans, Gustin shares the insistence on creating first a beautiful or superior product. "We're trying to do super classic, super high-quality clothing," Powell says.
Want to see examples of other Kickstarter campaigns that soared past their funding goals? Check out 9 Insanely Successful Kickstarter Campaigns, which highlights companies that are nailing both form and function.
If this guy can build a thriving group on industrial water treatment (no, really), you can be master of your own niche on LinkedIn.
There are almost 2 million LinkedIn Groups, since any of the more than 200 million LinkedIn users can create one. Does that mean there's no longer an opportunity for you to create and moderate a thriving group?
It all depends on your approach.
The macro-subject group turf is already well staked out but there are still great opportunities to network, create great discussions, and increase your professional profile if you're selective about your topic.
Here's an example. I stumbled across a group called Industrial Water Treatment. Discussions included questions like, "What could happen if a filming amine is overfed in a stream system?" and "Why is the conductivity of a softener's effluent water a little different than the influent water?"
Reading the questions only served to make me feel stupid but I was still fascinated by how most of the questions generated thoughtful, in-depth responses.
So I asked James McDonald, the engineer and certified water technologist who founded the group, how he founded and continues to moderate a successful LinkedIn Group.
Here are James' tips in his own words:
Build connections first.
I had a profile on LinkedIn for years and I finally decided to see what I could do with it in October 2011. I went all out and increased my connections from 180 to 1,000 in a couple months. I'm sure that's really not what LinkedIn intends, but I wanted to see what I could do with a bigger network of connections.
Check out other groups.
Then I joined several groups while thinking about starting my own group. Since I work in industrial water treatment I knew that would be my topic, but how could my group be different? Why would people want to join?
Looking at the other groups, I noticed that 1) most were not well moderated and had lots of advertising or off-topic posts, and 2) the other groups allowed members to post whatever they wanted with no real guidance or structure.
I thought a quality group would be the opposite of what I saw, so I started a very moderated group where I ask all the questions on a daily basis and let the members respond.
I invited all my contacts to join and I also shared the link with several other groups. From there it has grown organically as more and more people connect.
Focus on quality members, not quantity.
By August 26, 2012, we had 1,000 members. As of now we have 1,788 members, and hitting 2,000 isn't that far way.
That's not the millions of followers that big names have, but for a niche group, specializing in industrial water treatment, it's a lot. The membership spans the globe as well, which is a really cool aspect.
Plus a camaraderie has developed among the members, especially when the topics get more non-technical, like years of experience or how they got into the water treatment field. Those discussions often lead to members sharing stories that inspire others to share similar experiences and connections, etc.
For my 300th question of the day I asked, "How many years of industrial water treatment experience do you have? So far, members have reported a total of 1,516 years of experience with an average of 26 years. Not bad! What a brain trust we have in this group!
With the LinkedIn Search feature we can go back and search for answers on various topics. I've done that many times. It's a great technical resource.
It's important to ask questions that spark immediate discussion, but don't forget that discussions will live on and can help build a library of useful information.
Set sensible rules.
My rules are somewhat restrictive. Only I can post the original questions. Then any member can comment on those questions.
I also turned off the Promotions and Jobs settings so no one can try to post to those areas. I still have people trying to submit posts, but I go through those each morning. Most get deleted because they are mainly advertisements, but some are used as the basis for a Question of the Day. (I only get a couple of those a day, so it's not a big task.)
I decided not to allow any advertising and the group appreciates it. When I see advertising I delete it immediately and often message the member to let them know what I did and why.
I also hesitated to allow headhunters to join, but then I thought about the huge number of added connections and job opportunities they could bring to my members, so now I allow them to join. They haven't done anything to detract from the conversation so I think I made the right choice.
The key to moderating a successful group is to make it a daily habit and be consistent.
On my drive in to work I think about the next question of the day. Every morning I review the previous night's responses and approve new members, then I post the a new question.
Since water treaters are engineers, chemists, and other professionals, they behave themselves rather well. I've only had to ban one member. I really think a few of the members live for reading the next post and offering their sage advice.
Sometimes sparks fly a little, but it usually only takes a nudge from me or another member to keep things on track.
Focus on tangible and intangible goals.
I haven't gained any direct business that I know of, but that's not my driving force for doing the group. I just like to help knowledge flow in my area of interest.
But I have had colleagues within my company from across the globe that I never thought even knew my name comment on the group, and that's pretty cool. And one international member asked if I want to possibly co-author a book with him.
Will my group hit 1 million members? No. There aren't 1 million water treaters out there. But now, 1,788 of them are connected in a way they never were before.
Five healthy alternatives to energy drinks that will give you a midday boost without the caffeine crash.
Start-up life often means stressed out, 24-hour workdays. When coffee doesn't cut it, some entrepreneurs turn to energy drinks like Red Bull and Monster Energy. But these beverages not only make your energy spike and crash, but they can also take a toll on your body. Just ask my client Lynn, who owns a Web design firm. Lynn had always eaten healthy and worked out religiously, but as her company grew, she started skipping meals and relying on energy drinks to help her meet the demands of her busy day. Soon, Lynn began experiencing bouts of dizziness and fatigue. She reluctantly dragged herself to a doctor and was diagnosed with a heart arrhythmia. She was gaining weight too.
After Lynn and I reviewed everything that she was eating and drinking, she revealed she had been drinking about two energy drinks a day. The average can contains a whopping 30 grams of sugar and 180 mg of caffeine. That combo can make you feel anxious and stressed in the short term and then exhausted after the effects wear off and your blood sugar plummets. Not only that, but ingesting an extra four tablespoons of sugar ever day--the amount in just two cans--will absolutely add weight to your midsection.
There are plenty of healthy alternatives that can help you feel energized--without the negative effects of loads of caffeine and sugar. Made from natural ingredients, here are five healthy options that will help you stay focused throughout the day.
1. Protein smoothies. Blending fruit and protein powder will boost your energy in a natural and sustainable way. If you are being mindful of your weight, use berries, which are low in sugar, as your main fruit. Don't forget to add the protein powder, which will provide lasting energy and better help maintain focus and concentration. If you don't have time to make your own, head over to Jamba Juice.
2. Green drinks. These juices are a combination of vegetables (and a little fruit to make them palatable). One 16-ounce drink may provide the equivalent of four to six servings of vegetables and one or two servings of fruits. Loaded with vitamins, minerals, and enzymes, green drinks help nourish and hydrate you, which will keep you feeling focused all afternoon. You can find them at many places, including Juice Generation, BluePrint, and Organic Avenue.
3. Solixir energy drinks. Created by health fanatic and entrepreneur Scott Lerner, Solixir makes energy drinks with natural ingredients and very little sugar. Two of the company's beverages are particularly helpful for stamina and concentration--without the spikes and crashes of many energy drinks. Using natural ingredients, such as ginseng, and a small amount of caffeine, the Awake formula is great for a subtle afternoon pick-me-up. Or, for a caffeine-free concentration boost, try Think, which contains gingko biloba.
4. Water. Amazingly enough, simple tap water can have profound effects on your energy levels. Dehydration makes you feel tired, hungry, and unable to concentrate. Being dehydrated can also have a negative impact on your digestion and blood pressure. Instead of shooting for the standard eight glasses, just have a glass of water every time you feel tired or hungry.
5. Coconut water. If drinking plain water bores you, try this. It has about the same electrolyte balance as your blood does, providing the minerals you need to nourish your circulatory system in a healthy way. It is also a great source of potassium, which has been found to help keep blood pressure in check. Hydrating your body can help you feel more energized, so coconut water can be a refreshing pick-me-up in the middle of a hectic day.
The Alternative Board, a peer coaching network for business owners, surveyed 300 of its members. Here's what's keeping them awake at night.
There are a lot of ways for a fledgling company to falter in its early days. Too many unique obstacles to name, I'd wager. But at any given time, businesses also face a number of common challenges.
To find out the biggest problems facing entrepreneurs today, I went to The Alternative Board (TAB), a peer board helping thousands of business owners connect and gather insight and advice. TAB surveyed 300 of its members. Here's what they identified as the top five biggest threats to their businesses:
A whopping 57 percent of TAB business owners identified government as the No. 1 threat to small business. Owners are worried about tax regulations, the limited number of grants and loans, marketing restrictions, and other rules and regulations. Still, 60 percent of business owners said they feel economy has improved since last year.
Thirty-seven percent of entrepreneurs identified sluggish demand as the biggest threat to their start-up. It doesn't matter how many positive signs economists think they see: Without customers, businesses can't grow.
If this is one threat you're particularly worried about, spend some time improving your online marketing. Strategies such as blogging, social media outreach, and search engine optimization are all great and inexpensive ways to increase your marketing efforts, especially because you can easily track their success.
A total of 22 percent of TAB members identified lack of capital as the biggest threat to their business.
There's no easy answer to this problem, but more and more product companies are turning to crowdfunding to bridge the gap. Consider successful projects like Hand Stylus and others. In just over a month, Hand Stylus raised $313,490, far exceeding its original goal of $25,000. Consulting with an angel investor, accelerator, or venture capitalist is another option.
Twenty-two percent of TAB entrepreneurs cited increased competition as a major threat to their success. The solution to this problem? Build a better brand. Credibility often starts with a great website, a focused online marketing strategy, and media coverage. Just as important, make sure you clearly communicate why you're in business--not just what you do. Instead of "We build websites," go for something more direct and goal-oriented: "We help businesses grow."
With looming changes requiring businesses with 50 employees or more to offer healthcare coverage come next January, it's no surprise that 15 percent of TAB members are worried about footing the bill. In the coming months, you must decide if you're going to cover all of your full-time employees or yank your coverage and pay the penalty. But there may be a third option. Check out fellow Inc.com contributor Gene Marks' informative post that explains an alternative.
How can you bootstrap when you have to build an actual product? And a complicated one, at that?
Perhaps you’ve heard the term “cash is king,” or the mantra “debt doesn’t kill a business, cash flow kills a business.” They are both correct. In the early stages of your business, cash is the most precious asset you’ve got. There are innumerable ways to burn through it and countless service providers that nibble away at it. How does a hardware entrepreneur prioritize spending and keep his or her efforts focused on the right things?
1. Milestones. Focus on key milestones that enable your business to get to the next level. “Next level” may mean secure a customer commitment, a government contract or grant, or equity financing. What is the first milestone you need to hit, and how much money do you need to get there?
2. Feasibility is nice, but prototype is better. In hardware, customers react to something they can touch and feel. A slide deck just doesn’t make the same impression. An early stage touch-and-feel prototype that shows form and fit can make a big difference, even if it doesn’t have all the functionality of your final product. Including some key functions would be even better. Make use of 3D printing services and ask yourself what it would take to show just the bare bones of the functionality you want to offer. Then assess how much money it would take to get there.
Work with outside partners. Choose partners wisely. Be very clear about what you will and will not pay for at this early juncture. Leverage reputable firms accustomed to early stage companies for custom electronics, mechanical design, software, and firmware. All this helps you move quickly. Be sure to spell out, clearly, that you own all design work in the contracts. Chances are, you’ll have to act as the program manager and coordinate everything.
4. Think virtual. Can you prototype your hardware without building up a lot of business infrastructure? The buzzwords are “virtual company” and “lean start-up.” To investors, that means their money will go toward product development rather than administrative costs. This will only take you so far, but when you’re spending those first tens of thousands of dollars, it can be a good choice.
Learning to run a capital-efficient company begins with stretching your cash far enough to get a prototype that launches you to the next level. Hopefully that discipline will never leave you--even if you do raise a lot of money later.
"A" players are rare, hard to recruit, and completely necessary to a start-up. Make sure you use them to your--and their--best advantage.
When you build your own business from the ground up, you must focus on bringing in “A” players: those who are above-grade and outstandingly talented.
How to spot an A player? They are the people who effortlessly switch from fedora to baseball cap, and perform the corresponding skill well. They constantly surprise you with innovative approaches and excellent work.
This is absolutely critical to your success. To put it bluntly, success is a matter of A players, or failure. At every stage--as you’re starting up, once you’ve expanded to a small business, and during rapid growth phases--every single person’s contribution is crucial. Good is never good enough. When you’re creating a company, it’s not about just passing the test. It’s about acing it.
Most people are not, unfortunately, A players. To be frank, you’ll encounter mostly B’s and even more C’s. C players should be managed out. B players should be evaluated: Can they rise to A level or not?
Your team needs to be optimized just like any other resource. Just because A players are excellent and exceptionally talented doesn’t mean they don’t need to be managed. Make sure that you are making the best use of their abilities by focusing their talents on projects that will be most beneficial to your growth.
For instance, I know one entrepreneur who took his A-playing employee and had her design an internal software system. It would have been less time-consuming and more cost-effective to use an off-the-shelf solution. That business ultimately went under (he has since launched another), but maybe it would have succeeded if his A players had been able to direct their talents towards helping the company achieve profitability.
Identify what each of your A-players is best at, and focus their energy and efforts on doing more of it. At Lexion Capital, we play to each person’s strengths. Instead of giving an employee a 360-degree review and having them work on the areas of weakness, we encourage them to focus on projects that utilize their best skills. By managing to strengths, you use each A player in an area where they have a natural proclivity for peak performance.
As an entrepreneur, you’re aiming for exceptional, not just good. By optimizing your staff so that each team member is performing at the peak of their talent, your business becomes a tight-knit team of experts. All aces.
When you feel your stress levels rising, fight back and relax your mind with this simple method.
Being a business owner is stressful. You can fight worry and anxiety over the long-term with smart interventions and healthy habits, but what if your problem isn't stress in general, but stress right now?
Maybe a deadline is looming or a crisis blossoming before your eyes and you can feel your stress levels rising. Your mind is racing and so is your heartbeat. You feel tense and you know you're neither your nicest self nor your most clear-thinking one. You need to relax and you need to do it now.
Can science offer a solution? Turns out, it can. Psychologists understand how to handle these emotions and offer a simple, three-part strategy for relaxing your stressed out mind.
PsyBlog outlined the process recently, explaining that the method "was actually developed by psychologists specifically for people with dementia (Paukert et al., 2013). Because of this it has a strong focus on the behavioral aspects of relaxation and less on the cognitive. That suits our purposes here as the cognitive stuff (what you are worrying about) can be quite individual, whereas the behavioral things, everyone can do." So what are the steps? The post lays out this simple ABC:
Awareness. This is the step most people skip. Why? Because it feels like we already know the answer. You probably already think you know what makes you anxious.But sometimes the situations, physical signs and emotions that accompany anxiety aren't as obvious as you might think. So try keeping a kind of 'anxiety journal', whether real or virtual. When do you feel anxious and what are the physical signs of anxiety?
Breathing. Taking conscious control of breathing sends a message back to the mind.So, when you're anxious, which is often accompanied by shallow, quick breathing, try changing it to relaxed breathing, which is usually slower and deeper. You can count slowly while breathing in and out and try putting your hand on your stomach and feeling the breath moving in and out.
Calming thoughts. It's all very well saying: "Think calming thoughts," but who can think of any calming thoughts when stressful situations are approaching and the heart is pumping?The key is to get your calming thoughts ready in advance. They could be as simple as "Calm down!" but they need to be things that you personally believe in for them to be most effective. It's about finding what form of words or thoughts is right for you.
OK, so this method isn't entirely in the moment. Noticing when you get anxious and what it feels like can ease stress over time, and you do need to prepare some simple calming thoughts in advance. But come on, you're a business owner - you know you're going to get anxious eventually, so it's probably worth getting your relaxation routine down cold so you can deploy it whenever your blood pressure starts to rise.
Need other ideas? Chewing gum and self massage (rubbing your neck and shoulders) all seem to help, as does a nice cup of tea. If stress is more of a chronic issue for you, check out the complete PsyBlog post which also discusses how being more active and changing your sleep habits can help.
What's your prefered relaxation technique?
These ten books have ten different (and powerful) approaches to accumulating personal wealth.
Previous posts have identified the best motivational business books of all time, and the best eye-opening books for the entrepreneur. Here's a list of books to help you get out of the rat race of debt and achieve the wealth that you truly deserve.10. The Richest Man In Babylon
George S. Clason's faux-biblical parables about acquiring wealth have inspired investors since the 1920s. Like most of the personal finance books that followed, The Richest Man In Babylon emphasizes saving over spending. However, the book also insists that charitable giving is equally as important, provided you don't allow those two whom you give to become dependent upon your gifts.
Best quote: "Budget thy expenses that thou mayest have coins to pay for thy necessities, to pay for thy enjoyments and to gratify thy worthwhile desires without spending more than nine-tenths of thy earnings."9. Rich Dad, Poor Dad
An eighth-grade dropout who spends less than he earns is smarter than a college professor who can't make ends meet, according to Robert Kiyosaki. Furthermore, while working for a steady paycheck can get you started, your best investment of your time and money is to buy property or a business. Or better yet, do what Kiyosaki himself did and write a best selling book.
Best quote: "The key to financial freedom and great wealth is a person's ability or skill to convert earned income into passive income and/or portfolio income."8. The Millionaire Fast Lane
Working hard, saving 10 percent, and retiring at 65 is a chump's game because 1) financial markets are simply too volatile and 2) you'll "be in a wheelchair" by the time you actually have enough to retire, according to author MJ DeMarco. A better strategy is to use the volatility of the financial markets to get rich quickly and enjoy it now.
Best quote: "Show me a 22-year-old who got rich investing in mutual funds. Show me the man who earned millions in three years by maximizing his 401k. Show me the young twenty-something who got rich clipping coupons. Where are these people? They don't exist."7. Your Money or Your Life
Contrary to popular belief, living more frugally increases (rather than decreases) your quality of life. Author Vicki Robin's cites many examples, such as the practice of working at a job that brings in less than the amount you pay out for childcare and "time saving" trips to McDonalds.
Best quote: "Conditions have changed, but we are still operating financially by the rules established during the Industrial Revolution--rules based on creating more material possessions. But our high standard of living has not led to a high quality of life--for us or for the planet."6. The Science of Getting Rich
Even though it contains nothing that even vaguely resembles "science," this 1910 book provided the intellectual framework for thousands of personal wealth-building seminars. Author Wallace Wattle believed that your ability to accumulate wealth is directly dependent upon how you think about it. In other words, if you believe that money is the root of all evil, you'll never be wealthy.
Best quote: "No man can rise to his greatest possible height in talent of soul development unless he has plenty of money."5. The Millionaire Next Door
Through research into U.S. households with a net worth of $1 million or more, authors Thomas J. Stanley and William D. Danko identifies most individuals as Under Accumulators of Wealth (UAW) who have a low net wealth compared to their income. They then provide advice (like take skimpy vacations) to help people achieve a higher net worth compared to their income.
Best quote: People whom we define as being wealthy get much more pleasure from owning substantial amounts of appreciable assets than from displaying a high-consumption lifestyle.4. Total Money Makeover
Anyone who's listened to Dave Ramsey's radio show knows that he's all about common sense: avoid buying on credit, pay cash for everything possible, get yourself out of debt and build an emergency fund. Rather than airy-fairy promises and feel-good anecdotes, he offers solid basic advice for the everyman and everywoman.
Best quote: "What I have done is packaged the time-honored information into a process that is doable and has inspired millions to act on it."3. The Money Book for the Young, Fabulous & Broke
Most personal finance books seem to be written with the about-to-retire set in mind. In this sprightly offering, TV star Suze Orman helps millennials navigate the basics of the financial world, like coping with huge student loans and a job market that, for young people, is nearly as dismal as the Great Depression.
Best quote: "You picked up this book because you are broke. Keep reading and you will discover what you need to know--and do--so you will not be broke forever."2. Secrets of the Millionaire Mind
If you're poor, it's because you think like a poor person and if you're rich, it's because you think rich, according to author (and multi-millionaire) T. Harv Eker. To make matters worse, poor people essentially program their children to be poor, by providing them with a worldview that makes wealth accumulation impossible. Not to worry, though. If you start thinking like a mogul, you can be one, too.
Best quote: "The vast majority of people simply do not have the internal capacity to create and hold on to large amounts of money and the increased challenges that go with more money and success."1. Think and Grow Rich
Way back in the 1930s, author Napoleon Hill interviewed a series of millionaires and philanthropists, starting with the steel magnate Andrew Carnegie. The result was a perennially best-selling work of self-development that encourages the notion that "greed is good"--as long as you're willing to share your wealth.
Best quote: "If you truly desire money so keenly that your desire is an obsession, you will have no difficulty in convincing yourself that you will acquire it. The object is to want money, and to be so determined to have it that you convince yourself that you will have it."
What other books should have been on this list. Leave a comment!
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Berkshire Hathaway's chairman has a reputation for eloquence in his annual shareholder letters. Here are five gems from over the years.
For decades, the unflappable chairman of Berkshire Hathaway has addressed shareholders in an annual letter that is part economics manual, part philosophical musing, and part conversation between friends.
Warren Buffett's reports on Berkshire’s earnings and losses over the years have transitioned smoothly between lessons in basic accounting, anecdotes from his personal life, and metaphors equating Woody Allen’s sex life to a clever investment strategy.
In April, editor Max Olson published a complete anthology of Buffett’s letters, billing it as a "lesson plan" covering the Omaha businessman’s views on business and investing. There are no guarantees these five lessons will help you replicate the Oracle of Omaha’s exact path to success, but they can't hurt.
Be optimistic about the challenges you face...
Buffett’s optimism, like that of many entrepreneurs, was tested in 2008 following the onset of the financial crisis. Berkshire Hathaway’s net worth decreased by nearly $12 billion that year, yet the chairman offered up this reassurance:“Amid this bad news, never forget that our country has faced far worse travails in the past. In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation in 1980; and the Great Depression of the 1930s. America has had no shortage of challenges. Without fail, however, we’ve overcome them.”
...And realistic about your successes.
Buffett acknowledges dumb luck as much as he discourages blind panic.
“This was a year in which any fool could make a bundle in the stock market,” wrote Buffett in 1995. “And we did. To paraphrase President Kennedy, a rising tide lifts all yachts.”
Similarly, in 2006, Buffett credited the weather for a $16.9 billion gain. The lack of natural disasters boosted insurance payments--a business in which Berkshire is heavily invested.
“Mother Nature, bless her heart, went on vacation. After hammering us with hurricanes… she just vanished,” he wrote, “Last year the red ink from this [insurance] activity turned black--very black.”
Thank those who feed your success.
Buffett may be the third richest man in the United States, but he knows when to thank the little people--and the not so little people. Buffett’s praises of his support team and business superstars might just deserve a book of their own.
In 2006, Buffett praised GEICO's then-CEO Tony Nicely for his “staggering” productivity the year before. “Last year I told you that if you had a new son or grandson to be sure to name him Tony,” Buffett wrote. “But Don Keough, a Berkshire director, recently had a better idea. He wrote me, ‘Forget births. Tell the shareholders to immediately change the names of their present children to Tony or Antoinette.’ Don signed his letter ‘Tony.’”
Be cautious of the advice you buy.
Buffett advised his shareholders to question the wisdom of large institutions when it comes to investing--even his own. Paraphrasing a story told by economist Ben Graham, Buffett illustrated how established leaders can get caught up in their own hype.
In Buffett’s story, an oil prospector about to enter heaven is met by St. Peter and told that he is qualified for residence--but the compound for oil men is already packed. The prospector thinks for a moment and then asks if he can say just four words to the current occupants. St. Peter agrees, so the man cups his hands and shouts, “Oil discovered in Hell!” Immediately the compound empties in a flurry of prospectors racing to the underworld. Impressed, St. Peter invites the man in. “No,” says the man, “I think I’ll go along with the rest of the boys. There might be some truth to that rumor after all.”
But be patient with those who dispense it.
In 2000, Buffett addressed the subject of his own fallibility--and mortality--with characteristic poise.
“There is a negative that recurs annually,” he wrote, ”My partner [Charlie Munger] and I are a year older than when we last reported to you.”
The solution to such a problem, Buffett explained, was to appoint young talent to key positions within Berkshire’s interests. “Mitigating this adverse development is the indisputable fact that the age of your top managers is increasing at a considerably lower rate… than is the case at almost all other major corporations,” he wrote.
During Wired's Business Conference on Tuesday, the Yahoo CEO explained why she's a sure-shot when it comes to recruiting great talent.
Marissa Mayer rarely speaks in public, but when she does, she doesn't hold back. In particular, the Yahoo CEO had plenty to say about the company's culture and her knack for recruiting--and keeping--great talent during Wired's Business Conference Tuesday.
"For each of the executive hires I've made--and every hire I've made--I've gotten the exact person I wanted," she told Wired writer Steven Levy. "It's been surprisingly easy to assemble what I think is the best and brightest team."
The company, she suggested, sells itself. Mayer said she was personally drawn to Yahoo not only because she "felt the love" and "could see the usefulness of the products" but because her team of savvy engineers, content creators, and curators share her compulsion to get them to market. In fact, Mayer prides herself on how quickly she's released many of them, including Yahoo! Weather, a Flickr-driven iOS /Android app, which launched in April. "We've been releasing things a few times a week," she told the crowd at the New York Historical Society. And the company plans to do more.
Mobile remains a key focal point for Yahoo, as consumers' consumption habits continue to evolve and the company tries to stay relevant. "We call it the daily habit," Mayer said, reiterating Yahoo's new mission statement to be at the center of users' lives: "mail, stock quotes, search, games, sharing on Flickr, group communication." Summarizing the news will also become a "cornerstone" as the company rolls out apps like Summly Tech, its rebooted Android version of news app Summly, which it acquired in March for a reported $30 million.
One thing not on Mayer's agenda: tweaking Yahoo's DNA. "My goal was to basically take the really great things and amplify them, and turn off the few things that are getting in the way," she said. "I'm not trying to inject new mutant DNA." Of course, the number of start-ups she's acquired in her nine months since joining Yahoo--seven to date, including to-do app Astrid May 1--makes that point debatable.
Still, Mayer contends she's getting the "right people into the right roles" and responding swiftly to consumer demand, especially on mobile. Though she declined to give specific stats on Yahoo! Weather, Mayer did mention the app, with its sleek design and geo-tagged photos, was a "runaway success" that hit user goals in only four days.
Mayer attributes that success to how well her media, sales, and tech teams work in concert with one another. "There's a geeky vibe and a love of pop culture... and a real respect for creators," she said. And it's unlike the other big tech companies in Silicon Valley. "It's different than Google, or Facebook, or Twitter," she stressed. Very different, indeed.
Considering a crowdfunding site to raise money? You might get one of these things instead.
You know crowdfunding, that new type of fundraising in which you can ask a large community of people to donate small sums of money to launch your new project or business idea? Turns out, it's not only about the money.
"Think of crowdfunding as an ecosystem," suggested Jeremy Andrews, founder and CEO of Smart Money Entrepreneurs, a crowdfunding site.
At a panel for aspiring entrepreneurs today at Baruch College, Andrews told an audience of 30 students, the crowdfunding ecosystem can help you meet the right people, and test out market interest in your idea.
Andrews was joined on the panel by two other crowdfunding site founders--Alejandro Cremades, CEO of Rock the Post, and Sang Lee, CEO of Return on Change--who, of course, also recommend you crowdfund (and not just for the money).
1. Crowdfunding democratizes the financing process.
Venture capitalists are not the only ones who know a good idea when they see it. Why should they be the only ones to judge the fate of your idea, anyway? With crowdfunding, consumers can validate your idea.
"Sometimes [traditional] investors, with all due respect, they act like dinosaurs and they don't even know what you are doing and probably they don't even really care," said Cremades.
"Now, the actual users are telling the public what companies they want to exist," he said.
2. It eliminates some of the emotional trauma of closing your first round of financing.
Trying to raise money on a crowdfunding site is no sure bet, nor is it free of its own hassles and complications.
But it may give you more time to focus on building your product or service, than a formal VC roadshow would.
"Crowdfunding helps [entrepreneurs] avoid the distractions of having to do the roadshow of closing the first round of financing, which normally takes on average eight months," said Cremades. "Being able to do so from home or the office in 90 days, it really helps to concentrate on what is important, which is building the team, executing well on the vision, and to continue to move on."
3. You get feedback that will help you improve your idea.
Start-up founders who crowdfund are often able to pivot their products using input they get from the market.
Cremades recommends you intentionally launch a project that's incomplete.
"All that time that you spend building that perfect product is the time that you are not going to have that product in the market and that you are not going to have customer feedback," he said.
If you launch before you've totally polished your idea, you might find potential investors do not give you money, "but they will tell you why--and that's what makes a difference," he said.
Beyond Meat CEO Ethan Brown wants to completely rearrange the protein scene--without rocking the cultural boat. Here's his strategy.
The average American eats 270 pounds of meat a year.
"We have something called OCD: obsessive chicken disorder," Ethan Brown, the fonder and CEO of Beyond Meat, told the audience at the Wired Business Conference Tuesday.
While Beyond Meat's general mission--replacing animal protein with plant protein and creating tasty meat-like products--may not seem especially groundbreaking, Brown doesn't adhere to the mindset of turning away from the experience of eating meat. Rather, he is working within what he calls "the cultural norm around meat consumption."
"I don't think people crave a plain piece of chicken--they crave chicken in their favorite dishes," Brown explained. "So we've taken that flavor medium and focused on the texture, not the flavor itself."
Brown sees meat consumption in the U.S. as a cultural force too tremendous to ignore. In other words, squishy tofu just won't cut it as a healtful and sustainable substitute. He argues that working within the meat-loving cultural framework makes business sense for his line of products, which is sold in Whole Foods and other markets around the country. After all, if more customers will eat your product, presumably more will buy it.
Beyond Meat's technical challenge here is trying to replicate the fibrous structure of meat. To do this, it extracts proteins directly from plants and realigns them in an attempt to mimic the animal proteins that give meat its structure--and texture. The focus is on creating a virtually indistinguishable product places the focus on eating protein.
"It shouldn't really matter if your chicken McNugget comes from formed and processed chicken or directly from plants," he said.
Brown says the ultimate aim is to offer consumers an entire suite of plant-based protein. In other words, the grocery store may someday have a protein section in place of the meat counter.
"Fifty years from now, my hope is that beef and chicken will no longer have a relationship to the animal they came from," he said. "It will be based on plant-based inputs."
Every country has its own place-specific challenges, as last week's tragedy at a Bangladesh factory showed. Here's how to protect your company.
Last week’s factory collapse in Bangladesh was a terrible reminder of what can go wrong in life and in business. If your company needs to produce or purchase goods from a country other than your own, it is important to find out all you can about the culture, context, and craft in the country where you've decided to do business. Here's how.
Culture is king. As an American, if someone tells me something is “difficult," I take that to mean it may require a lot of elbow grease and time, but it can be done. However, “difficult” can mean something altogether to non-Americans. For them, “difficult” might mean "impossible" and they won't attempt to do it.
I learned this the hard way when I naively waited for the “difficult” thing to be worked on, only to find out the project had never been started and I'd wasted valuable time. This kind of cultural understanding goes beyond reading the sections at the front of tourist guidebooks. It is acquired, unfortunately, by trial and error, and with meaningful advance research.
To understand the culture you're working with, ask other entrepreneurs doing business in the region to tell you about their experience. Ask them to share three things they think are important to doing business successfully in their home country. But don’t stop there. Read everything--novels, non-fiction, magazine articles, whitepapers from chambers of commerce, even warnings on government websites--about the places you want to work with. Share this local intelligence with your entire team, so they know how to navigate the cultural divides.
Context is everything. We produce most of our products in South Korea because quality is our number one priority and the Korean factories we work with share a commitment to making great products. However, they have a frightening neighbor to the North, who likes to remind the international community from time to time he is a threat. This is not just a problem for the factories I work with, but a possible problem for my company, whose supply chain could get caught in the crossfire.
For this reason, I pay careful attention to the region's political context and have sought out back-up suppliers in other areas, should the need to call on them arise. This is an extreme example, but even small things like the weather can be important. Monsoon season may seem like an exotic weather woe, but if you are doing business in the Asian basin, it can significantly impact production. In Thailand, for instance, it inundated and delayed production for a good two months in one factory we work with--they lost machines and workspace to high waters. Thankfully our vendor had a well-run facility and its workers were able to remain safe during and after the floods.
Craft is crucial. Just as the definition of "factory" differs from country to country, so too does the craftsmanship of their products. Whereas in Korea a factory implies machines and automated processes as we know them in the West, in China, a factory implies a human workforce, using tools to perform the necessary tasks. The output of each type of production is different--the former is precise and exact, while the other is approximate but rapid. There are uses for both in the world of manufacturing, but you have to know which to use when.
If you have a sample of something you've already prototyped, China may be the right place to do your production run. If, on the other hand, you have a sketch or a digital illustration of a potential product, Korea should be your country of choice. Why? Because my past experiences taught me Chinese factories are generally good at executing, but not so gifted at imagining. They can break something down and work backwards, but can’t create accurately from an idea or photo. These are the kinds of nuances in construction you have to consider when you are choosing who to entrust with your production.
Asking the right questions and understanding the way things are done locally is the key to determining whether a particular country or a potential vendor is the right choice for your company’s needs--or a problem you should steer clear of.
Google Glass isn't even in the hands of mass consumers yet and already businesses are starting to ban the device. Here's why.
The Google Glass-wearing cyborgs are coming.
And if they're anything like this "Saturday Night Live" parody, you're going to see some very awkward situations in public very soon.
The glasses, which have popped up on morning talk shows and even in the shower of a well-known tech pundit, allow the user to see a display for text messages, photos, and even two-way video conversations--all right in front of her eyes.
But for businesses, Google Glass introduces a much more serious question than mere awkwardness--it could be a big privacy issue. When someone walks into your retail shop and starts recording the premises and your interactions with customers, do you have the right to ask him to stop?
Is This Thing On?
One of the most critical facts to know is that many states--including California, Nevada, and Florida--have two-party consent laws. Aaron Messing, a privacy attorney at OlenderFeldman, says these states have laws that govern how you can record in public places. If both parties have not consented, the recording could be illegal.
And, contrary to some early understandings, there isn't a red light that shines when someone is recording with Glass. That means, no one will know who is on camera and who isn't, and no one will know how the video could be used (or abused).
There's also a question about how Google Glass maintains privacy even for those who have consented to a recording. Georgia Tech contextual computing director Thad Starner, a Google Glass advocate who has advised Google, told me the product cannot automatically detect someone's face in public or track their location using GPS. But Google has not exactly elaborated on all of the features and the functionality of the device.
Bans Already in Force
Already several small businesses have decided to ban Google Glass. The 5 Point Cafe in Seattle won't tolerate the device. According to a New York Times report, Las Vegas will impose a ban (which perhaps isn't surprising, given that town's unofficial motto of "what happens in Vegas stays in Vegas"). The Huffington Post cites another slew of bars, strip clubs, and casinos that will ban Glass.
"Businesses are more likely to impose Glass restrictions than municipalities," says Carl Howe, a vice president for Research and Data Sciences at Yankee Group. "For example, many secure manufacturing facilities prohibit cell phones with cameras; such facilities would likely also prohibit use of Glass devices."
Most experts with whom I spoke said that, for now, the number of people who actually have Google Glass is a small blip. But that could change in the next few years, and businesses should be ready for the onslaught of public use. (Google declined to comment specifically about privacy but did mention there are at least 20 reporters who have them now, having signed up and paid a fee for the privilege at the Google I/O conference.)
New Era for Privacy?
To be sure, Google Glass is only the latest of a number of tech developments raising increasing concerns about the erosion of privacy. Smartphone cameras, Facebook, and Twitter, among other tools, have all contributed to the idea that personal privacy has become more of a gray area.
"No one I know ever voted for or opted into living in a 24×7 surveillance state," says Howe. "I believe most people would be shocked to discover that they are constantly being watched in most large cities and buildings. It isn't any easier to accept when the people doing the surveillance are your neighbors instead of the police. The private surveillance is worse, because it can occur in private spaces that public officials don't have access to."
My view: Google Glass will indeed lead to some early awkwardness in public. You have to speak commands, which is going to seem strange to both the wearer and passers-by. As more people start using the device, we'll probably get more comfortable with recording and taking photos. But privacy issues will arise: Businesses in particular won't know how the device is being used, and I predict we'll see more of them start to cry foul.
A winning business plan is nothing if employees aren't behind it. Here's how to get them on board.
Ever craft an annual business plan only to watch it gather dust in a binder? When taking a business from zero to maturity, it's easy to get caught up in the day-to-day grind. But getting everyone on board with your mission will get you there faster. Here are six ways to get your strategic plan out of your head and into the minds of employees.
Put it on paper.
Lengthy business plans and spreadsheets will only make your mission more confusing to non-executives. Boil it down to one page with the following: Your goals, mission, core values, key aspects of your target audience, positioning, three-to five-year strategic moves, and current year priorities. Don't forget these: strengths, weaknesses, opportunities, threats, and key performance indicators.
Make it visible.
Employees tend to forget how their work ties into the company's big picture, so hand out paper copies of your plan to keep at their desks. Do ask them to keep it confidential, as you don't want competitors seeing it.
Involve your new hires.
Many new hires haven't been exposed to business plans in the past and clearly don't know the fundamentals of yours. Make time to personally walk them through, explaining how their role and decisions tie in with your goals. If you do this in a group setting, everyone can engage in an active discussion.
Dust off your plan.
Strategic plans can go stale if they aren't updated continuously. Meet with your management team quarterly to revise your plan as needed based on new opportunities, threats, or weaknesses. Be sure to keep the company posted on changes during quarterly company meetings and pass out the revised one-pager.
Solicit meaningful feedback.
All too often, business plans can feel disconnected from workers who help make them happen. Hold brainstorming sessions so everyone can offer input on how to move the company forward.
Delegate goals and track progress accordingly.
Each annual strategic priority should have a clear owner who rallies the team to get it done. Hold these leaders accountable through frequent updates both to you and the workforce in monthly meetings. If you have plenty of plans with distributed teams, track your progress via a Google spreadsheet.
Getting everyone aligned with your vision requires a team effort. Start by making your business plan accessible and you'll reap major benefits.
Employees don't leave jobs; they leave bad bosses--and even mediocre ones. Don't be that kind of boss.
I remember all of my bosses. Some were bad. Most were good.
But only one was truly memorable--in the best possible way.
Memorable bosses possess qualities that may not always show up on paper but do always show up where it matters most: in the hearts and minds of the people they lead.
Here are eight qualities of truly memorable bosses:
They believe the unbelievable.
Most people try to achieve the achievable; that’s why most goals and targets are incremental rather than inconceivable.
Memorable bosses expect more--from themselves and from others. Then they show you how to get there. And they bring you along for what turns out to be an unbelievable ride.
They see opportunity in instability and uncertainty.
Unexpected problems, unforeseen roadblocks, major crises... most bosses take down the sails, batten the hatches, and hope to wait out the storm.
A few see a crisis as an opportunity. They know it’s extremely difficult to make major changes, even necessary ones, when things are going relatively smoothly.
They know reorganizing an entire sales team is accepted more easily when a major customer goes under. They know creating new sales channels is a lot easier when a major competitor enters the market. They know reorganizing manufacturing operations is a lot easier when the flow of supplies and components gets disrupted.
Memorable bosses see instability and uncertainty not as a barrier but as an enabler. They reorganize, reshape, and re-engineer to reassure, motivate, and inspire--and in the process make the organization much stronger.
They wear their emotions on their sleeves.
Good bosses are professional.
Memorable bosses are highly professional and yet also openly human. They show sincere excitement when things go well. They show sincere appreciation for hard work and extra effort. They show sincere disappointment--not in others, but in themselves. They celebrate, they empathize, they worry.
In short, they’re people. And, unlike many bosses, they act as if they know it.
Professional is admirable. Professional--with a healthy blend of humanity--is inspiring.
They protect others from the bus.
Terrible bosses throw employees under the bus.
Good bosses never throw employees under the bus.
Memorable bosses see the bus coming and pull their employees out of the way often without the employee knowing until much, much later (if ever--because memorable bosses never seek to take credit).
They’ve been there, done that, and still do that.
Dues aren't paid, past tense. Dues get paid each and every day. The only real measure of value is the tangible contribution a person makes on a daily basis.
That’s why no matter what they’ve accomplished in the past, memorable bosses are never too good to roll up their sleeves, get dirty, and do the “grunt” work. No job is ever too menial, no task ever too unskilled or boring.
Memorable bosses never feel entitled, which means no one feels entitled--except to the fruits of their labor.
They lead by permission, not authority.
Every boss has a title. That title gives them the right to direct others, to make decisions, to organize and instruct and discipline.
Memorable bosses lead because their employees want them to lead. They’re motivated and inspired by the person, not the title.
Through their words and actions they cause employees feel they work with, not for, a boss. Many bosses don’t even recognize there’s a difference, but memorable bosses do.
They embrace a larger purpose.
A good boss works to achieve company goals.
A memorable boss also works to achieve company goals--and achieves more than other bosses--but also works to serve a larger purpose: to advance the careers of employees, to make a real difference in the community, to rescue struggling employees, to instill a sense of pride and self-worth in others. They aren’t just remembered for nuts and bolts achievements but for helping others on a more personal or individual level.
Memorable bosses embrace a larger purpose because they know business truly is personal.
They take real risks, not fake risks.
Many bosses--like many people--try to stand out in some superficial way. Maybe it’s their clothes, or their interests, or their public displays of support for popular initiatives. They do stand out, but for reasons of sizzle, not steak.
Memorable bosses stand out because they’re willing to take an unpopular stand, to take an unpopular step, to accept the discomfort of not following the status quo, to take the risk of sailing uncharted waters.
They take real risks not for the sake of risk but for the sake of the reward they believe is possible. And by their example they inspire others to take a risk in order to achieve what they believe is possible.
Memorable bosses inspire others to achieve their dreams: by words, by actions, and most importantly, by example.
You can make convincing points if you're logical, rational, and data-driven. The first in a seven-part series on leadership communication styles.
There are a million pieces that all work together to propel leaders forward but, ultimately, it's about how you connect with others; no matter if you're setting a vision, being creative, or pushing results, it comes down to communication. And the more people you lead, the more critical communication is.
Harvard Business School Professor Boris Groysberg says in his book Talk Inc., "The higher you go in an organization, the more you must engage other people in conversations, rather than trying to shout them into submission."
How Leaders Communicate
Through my work, I've pinpointed four thinking factors--analytical, structural, social, and conceptual--and three behavioral factors--expressiveness, assertiveness, and flexibility--that every person and every leader possesses.
The way each person uses these thinking and behavioral factors is unique. As a leader, you need to speak these seven different languages to ensure your message gets traction. Although this column and my next six will cover just one of each of these factors, keep in mind every person has them all. Also, a person's tendencies for a certain way of thinking or behaving do not dictate his or her abilities to do so.
Why You Should Communicate Analytically
Analytical thinking is logical, data-driven, and rational. It's the objective, factual part of the brain that immediately asks, "Why?"
Take a look at this profile my company produced for a leader who has a huge preference for analytical thinking (shown in blue). That means, data and information will inform everything he says, and does. And he'll expect the same kind of analysis and rigor from his workforce. I heard a highly analytical thinker say the following in a workshop: "In God we trust...all others must bring data."
As part of your communication, you need to be sure you're speaking to the analytical section of your audience (those people who are highly analytical, and the analytical part of the brain of those who are not). In order to best convey your message, you must show your analytical side, by showcasing the facts and proof that will earn you trust and credibility.
My research has shown that 67 percent of the population has at least a preference for analytical thinking (usually mixed with other types of thinking). If analytical thinking drives an employee, they're typically skeptical, and have a sound and deductive thought and reasoning process.
As a leader, communication is a two-way street and intake is just as important as output. Strong analytical thinkers will latch onto information intake, so ensure that you give them the right kind of data. Analytical employees will also respond well to questions that ask them to prove a point and show evidence, so don't be afraid to be upfront and ask for it. This will help you gain respect and build trust.
Ways to Communicate Analytically
Here's how you can be sure you speak and interact analytically to draw out your analytical-thinking employees, and position yourself as someone who desires and values an analytical kind of approach:
1. Encourage open-endedness.
Push for investigation and examine all areas of a problem.
2. Ask for research.
Make sure your people are getting what they need to give you the data you need.
3. Highlight important information.
You need to show the big picture, not just the details.
4. Provide a case study.
Analyze past successes to allow your team to develop new ideas.
5. Provide an overview as well as objectives.
Clarity about your needs is critical.
6. Use analytical phrases.
- What is the cost/benefit of this project?
- I need more information. This doesn't make rational sense to me.
- Let's get to the point.
- Let's explore this in more depth.
- What's the bottom line?
- What does the research say?
- There are many layers to consider.
- I value your investigation of the facts.
- I've been analyzing the situation.
- Can we quantify this?
Now you have tools to think and communicate like an analytical leader because, whether analytical thinking is your preference or not, you've assuredly got people on staff whose brains work analytically. You need them engaged, and believing you understand them--and the way they think.
In my next column about leadership communication, I'll write about how best to communicate in a structural, detailed way.
The co-founder of Twitter and Medium, perhaps best known as @Ev, explains the power of conviction when starting a company through tales of his ups and downs with Blogger and Odeo.
Evan Williams, co-founder of Twitter and creator of the blogging tool Medium, spoke at the Wired Business Conference Tuesday about the most important judgment call an entrepreneur ever has to make. He also explained the role he believes his latest project plays online, and the joy of posting cat pictures.
Here are a few highlights:
"If you don't die, you win sometimes."
As an entrepreneur, how do you know when it's time to throw in the towel? What about when it's right to stay the course?
"I don't know any way to do it other than really listening to your gut," Williams said. When Odeo, a podcasting network that was something of a precursor to Twitter, hit the skids a few years ago, Williams said he realized his team was no longer passionate about the project.
But, in contrast, "Blogger was in more dire straits when I still kept going with it, but at that time I was completely convinced it needed to exist in the world," he said. So, he kept Blogger going.
There are, he went on to say, more sophisticated ways of gauging the question of course--testing the market or examining your numbers, for instance. But in the end, whether a given project sinks or swims, hanging around in the same industry might just pay off. "There's something about just hanging around when it comes to success on the Internet," Williams said.
"I just had this idea we should let people post their cat pictures."
To bet on a new idea, you have to have faith, Williams said. Don't overanalyze it.
"When we were doing Twitter, even inside of Odeo, we were excited about Twitter but realized we couldn't turn all 14 people to Twitter because it was this little spark of an idea," he said.
If you put too many people around a flickering idea, he explained, you risk blowing it out. A wiser strategy is to "let that thrive, and if that starts burning brighter, send more people over to pay attention."
"It's not a social network."
Williams said this of Medium. It's "more than 140 characters, not just for your friends." Williams said. There are numerous places to publish online. But what makes Medium unique, Williams explained, is the platform's ability to tap into the power of the Internet. "What the Internet is great at is building networks," he said.
"We didn't get that when we built Blogger," he added. "We were doing nothing to make the whole greater than the sum of the parts."
With new Internet sales tax rules on the horizon, it's clear that tax laws are so complex that you may be unknowingly breaking all sorts of them.
So you heard the news: Congress is considering letting states charge sales tax on Internet purchases for the first time. Right? Well, not exactly. The fact is, most states already charge tax; it's just that they don't have any effective way to collect it.
So, the bill in Congress, which has passed the Senate but is more controversial in the House, would shift the burden for collecting and paying state sales tax from Internet buyers to Internet sellers. Thus, it could easily become a huge headache for your business. (That's in part why eBay has been pushing its sellers to lobby against the proposed law.)
Right now, for example, someone in California who buys something from a private seller in Connecticut--say, a 1:720-scale model of the U.S.S. Roosevelt aircraft carrier on eBay--is supposed to pay sales tax on it. You heard that right: The buyer is technically supposed to keep track and pay those sales taxes with their state tax return. But almost nobody complies, and a lot of people probably aren't even aware of the law.
When state tax authorities catch up, however, the ramifications can be enormous. Just ask former Tyco CEO Dennis Kozlowski, who went to prison after an investigation that began with his failure to pay New York State sales tax on expensive artwork.
That got me thinking: laws can be complex. Sometimes the government even changes the rules in the middle of the game. And even when the laws stay static, it's easy for even well-meaning entrepreneurs to break them without even meaning to. (Case in point: As I was writing this column, former Fugees singer Lauryn Hill was sentenced to three months in prison for failing to pay taxes on time, although she ultimately paid every dime.
Here are a few other examples of where it's easy to go wrong.
Failing to turn over payroll taxes.
If you have employees, you have an obligation to withhold their federal income taxes and turn those taxes over to the federal government. Unfortunately, sloppy bookkeeping, bad luck, or other circumstances often lead small business owners to fail to do so, even with good intentions.
Every year, thousands of business owners hold back the taxes they owe in favor of paying other expenses. Facing what they hope will be temporary crises, they use the cash thy owe the governmetn to pay rent, or vendors, or other critical expenses. They hope that this way, they'll at least have a fighting chance to stay in business--and they'll make things right with the tax authorities later.
It's a dangerous game, though. If a company that failed to pay taxes goes under, the the IRS can and does go after principals and others it deems "responsible persons" individually. In other words, the tax debt doesn't necessarily die with the company.
Deducting personal expenses as business expenses.
This one is pretty obvious, but it's an easy pitfall, especially for entrepreneurs and "solopreneurs." A lot of expenses are useful for both business and personal purposes, and that can become awfully tricky to report correctly.
Of course, there are a lot of excellent, creative, and perfectly legal business expenses you can legitimately deduct. The most important rule seems to be, keep good records!
Collecting Internet sales taxes.
Wait, you might say--I thought we established at the start of this article that the law currently doesn't require you to collect sales tax for Internet purchases, and that instead it's the buyer's responsibility to file and pay.
Like just about everything in this field, there are exceptions and then exceptions to the exceptions.
The most relevant exception here is that if you have a physical presence in the state where your buyer is located, generally you're going to be expected to collect and pay sales taxes. Thus, a seller in San Diego who ships an Internet-purchased product to a buyer in Sacramento is likely to be on the line for state sales taxes. Again, though--there are often complex "exceptions to the exceptions."
All of which leads to two points: First, our tax system is complex, confusing, and often counterproductive, and second, if you want to be an entrepreneur, I hope you've got a good accountant you can trust!
All great leaders use this tool. You should too.
One thing consistently sets great leaders apart from the merely good: They have a pervasive sense of groundedness.
Discussions with truly great leaders are rarely unhinged forays into the unknown, and their day-to-day activities are seldom isolated events, unmoored from everything else. Quite the contrary. With great leaders, there is a palpable underlying sense of linkage, a connectedness in their thoughts, words and actions that, taken together, weaves whole cloth.
Listen to and watch a great leader over time, and you'll see that each individual move builds on the others, like a well-played chess game, ultimately delivering a focused, planned outcome.
At the heart of this sense of groundedness--this ability to connect the dots in each discussion and in every action--is something I've come to recognize repeatedly in great leaders. I call it the Single Pre-eminent Goal (SPG).
Great leaders know what their SPG is. It sits front and foremost in their minds. They focus on it when they start their day; it provides the glue that links together everything they do and say during the day; and at the end of the day, they reflect on how much closer they are to achieving it.
Of course, for some great leaders this all happens at a subliminal level. They may not use this (or any) vocabulary to describe the process, and they may not even be overtly conscious of its workings. But it still happens.
For the rest of us, it helps to make the process conscious and planned. Here's how to set your very own Single Pre-eminent Goal:
1. You can only have one at a time. By the nature of a Single Pre-eminent Goal, you can only have one at a time. While it will certainly change over time (usually over months or perhaps years, but not weeks), two SPG's cannot co-exist.
2. The SPG sits below your overall mission, vision and values, but above individual strategies. Your SPG should be the single largest transformational challenge you currently face in achieving your overall mission.
My current Single Pre-eminent Goal, for example, is to switch my business model away from the one-man-band I've operated as for the last 15 years to develop a company that someone else can eventually own and manage. That SPG sits below my overall mission (to generate lifestyle-supporting income while maintaining a high degree of freedom and autonomy), but above the individual strategies and tactics I'm implementing (speaking, coaching, even writing this article).
Leaders I've worked with recently have had SPG's as varied as changing their entire product line from wood to aluminum, finding a business partner or competitor to merge with, switching funding sources from grant support to supporter donations, and designing and launching an e-commerce arm to their bricks-and-mortar retail business. All these SPG's are subservient to their respective leader's overall mission, and all dictate major strategy and tactical shifts.
3. Your daily activities flow from it. Unlike an overall mission, your Single Pre-eminent Goal should be specific and concrete enough to enable the prioritization of your daily activities.
Ask yourself: In what way is this meeting (or other activity) helping you get closer to your SPG? If it isn't, then should you really be here? How does your SPG color the data you read, the people you speak with, the conversations you're having, the decisions you're making?
That's not to say there won't be other, non-SPG related activities you'll have to engage in each day--leadership involves a fair amount of maintenance as well as forward motion. But with a Single Pre-eminent Goal now clearly defined, you'll be more acutely aware of the opportunity cost of those activities, and you may well begin to find creative ways to reduce their impact on your limited resources.
4. By default, it should be shared. Unless there are acute diplomatic reasons not to do so (if your SPG is to move your entire production overseas, for example), it's best to share your Single Pre-eminent Goal with others, for two reasons: (1) Transparency is always good, and builds your character and reputation as a leader; and (2) SPG's are (usually) motivational in nature, so why lose that juice with your team?
Take a little time to reflect on what your Single Pre-eminent Goal is right now, then take it out for a spin. You may be surprised at the impact it has.
Download a free chapter from the author's book, "The Synergist: How to Lead Your Team to Predictable Success" which provides a comprehensive model for developing yourself or others as an exceptional, world class leader.