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The world is full of entrepreneurial upstarts that took down industry giants. It happens all the time. Here are five winning strategies.
Everyone loves a David versus Goliath story. When we see the little guy win against all odds, we know that anything is possible. When it comes to business, that's absolutely true. History is full of upstarts who slugged it out with industry giants and won.
Remember that Apple was once a little garage shop that took on IBM and software behemoth Microsoft--and ultimately came out on top.
And once upon a time, a bunch of California farmers had the audacity to think they could make wine as good as the French winemakers that had dominated the global wine trade for centuries.
Whole Foods' John Mackey, Southwest Airlines' Herb Kelleher, Virgin's Richard Branson, Fedex's Fred Smith: there are thousands of entrepreneurial Davids who took on Goliaths and won. It happens every day, but not by itself.
Certain marketing and business strategies enable Davids to slay Goliaths. Here are five.
Be a niche player. Believe it or not, starting with a niche is one of the most powerful ways to go viral and ultimately take down even the biggest giants. The trick is to determine the right niche and positioning for your product or service. Mark Zuckerberg didn't set out to get a billion users and Google wasn't trying to become an advertising giant. Social networks and search technology were all niches, initially.
Take the battle to Goliath--in the media. Who can forget Apple's 1984 Super Bowl ad that launched the Macintosh against Big Blue's IBM PC. Or how California winemakers went up against the French in the famous Paris Wine Tasting of 1976 that was portrayed in the movie Bottle Shock? How can people root for David if they don't even know there's a battle going on? The only caveat: you have to win.
Be different. No, you can't just look different, act different, or seem different. You actually have to be different. You have to create something that appeals to an audience in a way that the big guys don't or can't do. Compaq made the first commercially viable portable PC. Michael Dell made computers truly personal: custom made, one at a time, shipped direct to customers. Southwest went with regional airports and offbeat service. If you want to beat Goliath, you have to be different.
Partner to be first to market. While all the 800 pound gorillas rest on their laurels, nimble and aggressive companies can take the lead by partnering with others. Compaq actually beat IBM to market with the world's first computer powered by an Intel 386 processor. Dell would later eclipse Compaq using the same strategy--even partnering with the same company, Intel. Likewise, universities are great places to find innovators and innovative technology looking for a way to get to market.
Appear bigger than you are. The hardest thing about being a David is that customers still need to know they're getting a solid product and good support for their money. So differentiating isn't enough. Attention to detail is important. So is great customer service. Luckily, just about any company can appear far bigger than it is by outsourcing and leveraging ecommerce and social media. The internet really did level the business playing field.
Just remember one thing that trips up a lot of start-ups. It's a competitive world out there. You can have really cool technology or an exciting concept and end up going nowhere. The most important thing, hands down, is to deliver a unique customer experience that's way better than what's already out there. Pair that with one of these strategies and you may have a winner.
These five considerations can help you map out a manufacturing strategy -- and decide where that strategy should take place.
Here in Silicon Valley, we like to focus on the “coolness” of product design and the development of complex, high-tech hardware. But to really succeed in the marketplace, manufacturing is critical. After all, someone’s got to make all that cool stuff work.
After you make those first few prototypes, but before you embark on volume manufacturing, there is an important process commonly referred to as “NPI,” or new product introduction. This is where American manufacturing has an important role to play.
For many high-tech start-ups, it just does not make sense to raise the capital required to outfit a dedicated factory, which is just one of the reasons contract manufacturing has become so popular. Contract manufacturing also provides economies of scale and time-to-market that are just not possible in a dedicated factory.
Yes, I am talking about outsourcing, but, no, I am not talking about offshoring. There are plenty of specialty contract manufacturers right here at home, where your intellectual property is protected, and where you can find a wealth of expertise in highly regulated areas such as medical devices, biotech equipment, and defense.
Here are five considerations to keep in mind when mapping out your manufacturing strategy:
1. Proximity In the rush to offshore high-tech products, we’ve often overlooked the cost of flying engineers to Asia and back. Your engineers, of course, developed the product. The manufacturing team is going to adapt your design so that it can be manufactured at scale. It’s critical that these two groups of people are able to easily interact and communicate with each other. Don’t be surprised to see the development of new intellectual property during this process. You don’t want to miss out on this critical part of your product’s evolution.
2. Teamwork in the NPI process Selecting the right contract manufacturer is crucial. Look for a true partner, and make the commitment to work together. Throwing prototype #5 over the fence to manufacturing, and telling them to make 100 or 1,000 copies, is unrealistic. Not only will the teams need to be working together to get the assembly steps correct, but you’ll also need to develop test protocols to determine practical parameters for volume manufacturing. A good manufacturing partner will help the team reduce the time it takes to actually make your product, and will ensure that tests are accurate.
3. Expertise with technology and regulations For complex hardware products that combine electronics, mechanics, optics, and fluidics, experience is critical to successful manufacturing. For some stages of production, you may need a cleanroom to minimize contamination. A specialty manufacturer that understands medical devices, for example, will understand what the U.S. Food and Drug Administration will require. You want a manufacturer familiar with regulations that apply to your industry.
4. Cost A high-quality manufacturing partner will know how to knock cost out of a prototype design and will partner with your engineering team to make sure this doesn’t compromise the product performance or quality. Proximity is a factor here, too: the cost of shipping parts over an ocean has escalated to the point that going to Asia is no longer necessarily the cheap solution.
5. Roadmap A true manufacturing partner will be able to grow with you and meet the needs of your product roadmap. Your next-generation product will benefit from the lessons you learned getting the first generation out the door, and a lot of those lessons will be in manufacturing. You may even make product improvements based on feedback from your contract manufacturer.
The right choice for manufacturing depends on the details of your business. Make sure you consider what is right for you instead of blindly following a trend. The five considerations above should give you a clearer idea of which is right for you.
When you're starting a company, you're focused on the here-and-now. But the long-view is just as crucial for success. Here's a checklist to guide you.
It can be difficult for the leader of an entrepreneurial start-up to take a long-term approach to people, product, and positioning.
Jet-fueled by what I remember as equal parts exhilaration and abject fear, newly-minted entrepreneurs are laser-focused on the here-and-now (despite what their business plans may project for the months and years to come).
So, here's a flight plan replete with a checklist of long-term, strategic tips for high-flying entrepreneurs who are new to the game. It may not assure a safe landing, but I guarantee it will help you avoid some of the turbulence you're bound to encounter right after take-off:
1. Make sure your brand promise is scalable.
I'm simultaneously advising two start-ups on a pro bono basis. The leader of one didn't care for my suggestion that he frame his message in a problem-solution style. "My customers don't have economic problems. They're proud to be enrolling their kids in our after-school science program," he said. I reminded him that, while the moms in his well-heeled hometown may have money to burn, that most surely won't be the case when he expands to other, less affluent venues.
Be sure to create a brand promise that will stay relevant as your business grows.
2. You don't always go home with the partner you bring to the dance.
When we started Peppercomm 18 years ago, my business partner and I were convinced we needed to offer equity positions to three other key players in order to attract and retain blue-chip clients. We were wrong. All three of our original partners are long gone. Two now work for large holding companies. The other has a small start-up in Texas. While each helped in the early years, not one of them proved pivotal.
Be patient. Make sure your key contributors are worthy of equity positions before handing over the keys to the kingdom.
3. Never stop listening.
The two-person PR firm we set up in my business partner's one bedroom apartment in 1995 bears no resemblance whatsoever to our integrated strategic communications agency of 2013.
That's because we always listened to our client's needs, paid close attention to what competitors were doing, and went with our gut instincts when the timing seemed right for a new product or service. As a result, we now offer events planning, licensing, Web design and, yes, Virginia, stand-up comedy training for client organizations. If you had read that list to Ed and me 18 years ago, we would have laughed out loud.
We've learned to drop products and services that don't resonate, not to launch a product or service just to stroke our ego, and to always keep evolving.
4. Ignore the siren call.
Most start-ups are anxious to land their first big-name account. We surely were. And, when we nailed a huge consulting firm's business, we thought we'd won the lottery.
I remember Ed's comment after the new client had signed off on a then-staggering budget: "Steve, this is better than sex!" And, it was for a while. And, our relationship with the one big client grew and grew. Soon, it accounted for 40 percent of our billings. Then, guess what? Our direct report was canned and his replacement fired us. We panicked, firing lots of people and desperately cold-calling every prospect in our database. We survived. But, we've never allowed any client since then to account for more than 15 percent of our billing.
Resist the siren call of the mega prospect. Trust me, it's not better than sex.
5. Stay relevant.
I recently met the principals of a research firm we were looking to acquire. As a man of a certain age, I felt comfortable asking these somewhat long-in-the-tooth Boomers how they attract--and retain--Millennial prospects and employees. They looked at each other, shrugged their shoulders, and lamented about the good old days. So much for that acquisition.
While Millennial entrepreneurs think they may be immortal, the sad fact is that, one day soon, they'll find themselves being the oldest person in a meeting.
It's crucial to stay current (and relevant) to the wants and needs of prospects. I'm particularly well-versed in counseling clients about their Twitter, LinkedIn, and Facebook strategies because I'm fully immersed in those worlds. You'd be surprised how many members of my age cohort aren't. As a result, they have little, if any, credibility with next generation decision-makers.
My first year as an entrepreneur was easily the best of my life. I loved every second of it. But, I had no one advising me about a long-term strategy. I adapted (and persevered) as events warranted. You don't have to do the same. There are countless resources that can help you make the most of today while anticipating the challenges of the long-term. So, read up and ask questions. We'll do our best to answer them on Facebook and Twitter.
The worst managers have a fundamentally broken understanding of workplace, company, and team dynamics. Don't make these mistakes.
A year ago, in 8 Core Beliefs of Extraordinary Bosses, I contrasted the great bosses with average ones. Many readers commented that what I described as an "average" boss was actually an awful boss.
Not so! Truly horrible bosses have beliefs about work and management that are so dysfunctional that they can't even be measured on that scale. Based upon my experience and observation, the absolute worst bosses believe the following:1. Management is command and control.
Horrible bosses think their job is to order employees to do things and make certain that they do them.
Smart bosses know that the job of managing is mostly helping employees be more successful and making difficult decision that employees can't make on their own.2. Employees should WANT to work long hours.
Horrible bosses are convinced that employees who don't want to work 60-hour work weeks are slackers and goldbricks.
Smart bosses know that numerous studies have shown that any attempt to consistently work more than 40 hours a week reduces productivity.3. I manage numbers rather than people.
Horrible bosses put all their energy into making certain that the numbers come up right, even if it means changing the numbers.
Smart bosses know that the only real way to get good numbers is to help your people make their numbers.4. If I really need something done, I do it myself.
Horrible bosses think of themselves as the star performer who can fix any problem by yanking back authority and responsibility.
Smart bosses realize that true leadership entails motivating people to own their own successes and failures.5. I don't decide until I have ALL the data.
Horrible bosses are so risk averse that they require mountains of information before making any important decision.
Smart bosses understand that there's a point (and it usually comes fairly quick) that additional information merely muddies the waters.6. I own the success and you own the failure.
Horrible bosses take the credit when things go well and point the finger when things go poorly.
Smart bosses know that their real job is to 1) fix the failures before they happen and 2) publicize the wins that employees achieve.7. I like to keep them guessing.
Horrible bosses play their cards close to the chest and never let employees into the decision-making process.
Smart bosses know that decisions are more successful when those tasked with the implementation of them are involved from the start.8. The salary review is the perfect time to coach.
Horrible bosses sandbag their complaints, criticisms, and advice until the employee's performance review.
Smart bosses realize that employees panic when they're bushwhacked and can only change behavior when they're coached gradually and regularly.9. I'm so important I don't have to be polite.
Horrible bosses are so puffed up with grandiosity that they can't be bothered to control themselves.
Smart bosses know that corporate bullies eventually get what they deserve--a staff of lickspittles whose lack of talent destroys the company.
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How effective is your mobile ad campaign? Google has a new tool that may help you figure out the numbers.
Worldwide mobile advertising revenue is expected to reach $11.4 billion in 2013, but small businesses have few tools to fully understand the value of mobile advertising.
Google announced yesterday the launch of Full Value of Mobile Calculator, a free tool that measures how much money mobile advertising actually brings in.
Here's how it works. Businesses upload data from Google’s AdWords or from their mobile websites and input them into the step-by-step calculator. The tool goes through five potential outcomes of a mobile advertising campaign: in-store sales, phone calls, app downloads, cross-device purchases, and sales on mobile site. It takes about 30 minutes to complete the calculation, according to Google.
For instance, to calculate the value of in-store sales started on mobile, a user enters the number of clicks, the percentage of visits out of total clicks, the percentage of purchases out of total visits, and the average value of an in-store purchase. (If you do not know the exact data, the calculator provides a list of estimates based on different industries.)
After you input all the data, the tool will automatically calculate two benchmarks: the mobile site value and the value of all mobile advertising conversions.
Google’s launch of the Full Value of Mobile Calculator came on the same day when Yelp announced a new feature, which was based on a Boston Consulting Group study, to quantify the site’s value to small businesses.
Silicon Valley's most well-known incubator graduated another round of start-ups. Here are five to keep your eye on.
It's D-day in Mountain View, California. Demo day, that is.
This graduating class is smaller than some of its predecessors--comprising only 47 start-ups compared to the fall class of 75--due to more rigorous vetting on the part of YC administrators, says founder Paul Graham.
"Hardly any start-ups in this batch are bad," he announced at the event.
The 500 or so investors in attendance seemed to take the tongue-in-cheek recommendation to heart, milling around the second story of the museum during presentation breaks to question founders, collect cards, and shake hands--presumably making a few informal deals in the process.
Here are four start-ups--and one non-profit--Inc. spotted from Y Combinator's spring class that you may want to keep your eye on.
Thalmic Labs is a hardware company based in Kitchner-Waterloo, Canada. Its claim to Y Combinator fame? Myo, a wearable arm band that detects muscle movement and lets you use gestures to control your computing devices. Imagine playing video games and flipping through presentations with just a flip of the arm.
According to co-founder Stephen Lake, Myo is the next generation of computer hardware. Unlike other gesture-control technology, such as Microsoft's Kinect, Myo doesn't require cameras to work. "And we've patented the heck out of it," he adds. The device sells for $149 and will start shipping in late 2013.
Inc. recently featured this so-called "Kickstarter for science," in a round-up of niche crowdfunding sites. Co-founders Cindy Wu and Denny Luan came up with the idea for Microryza when the pair, both 19 years old at the time, developed a treatment for Anthrax--but couldn't get access to funding to pursue their research.
The current research funding model only applies to tenured professors and mid-life professionals, Wu says. To Microryza's founders, this didn't seemed fair. The company, named for a symbiotic fungi that stabilizes plant soil and fends off pathogens, exists to make the research funding process easier. According to Wu, the platform has helped to fund over a dozen independent science research projects since its launch last April. Like Kickstarter, the crowdfunding platform makes its money by taking a small cut of the total amount raised by each funded project. But, as Wu puts it, both she and the project backers "do it for science."
Watsi doesn't fit Y Combinator's typical alumni profile--mainly because it's not out to make a profit. Watsi is the incubator's first ever non-profit, and it functions as a crowdfunding platform for low-cost medical care in developing countries. Donors can go on the site and fund an individuals' treatment. Watsi sends email updates about the outcome of the person's care. Separate donations fund the site's operational costs.
Graham explained the unusual presence of a non-profit in Y Combinator's midst with his opening comments: "We have one non-profit--one intentional non-profit, I mean--that is looking for donations [instead of funding]."
Co-founder Chase Adams says of Watsi's journey: "Up until today, it's been pretty much the same as a start-up."
"Biometrics are the future," says Umang Patel, co-founder of PayTango, which links users' fingerprints with their credit card information. The company uses a biometric scanner and its back-end software system to process payments, and makes money through merchant partnerships. The system has been rolled out to the Carnegie Mellon campus and surrounding merchants.
But Patel is dreaming big. Imagine the possibilities of a more secure identification system, he says. Patel thinks that fingerprint recognition could revolutionize your entire wallet. Everything from credit cards and IDs to bus passes and airplane tickets could be literally at your fingertips, he says. PayTango wants to raise seed round funding and make its devices more widely available. College campuses are an obvious focus, says co-founder Brian Groudan, as are gyms and "places where you carry your life on a card."
You know those Harry & David's pears you send to your in-laws each year? Well, Goldybely thinks you can do better. CEO Joe Ariel wants to give food delivery an upgrade by shipping gourmet eats from anywhere to anywhere--in the United States, at least.
Craving a sandwich from Katz Deli in New York, but stuck in Portland, Oregon? Goldbely will pack it so it doesn't spoil and ship it to your door, says Ariel, who cut his teeth in the food delivery business as CEO of Delivery.com. Delivery can take anywhere from 24 hours to a few days to arrive.
The goal is to make "legendary" local good available in any locale. "We're here for the mom-and-pop shops that don't know how to market online," says Ariel, who adds that Goldbely has no intention of going head-to-head with mail-order giants like Omaha Steaks or Harry and David's.
Goldbely plans to make money through merchant partnerships. According to CTO Trevor Stow, the company relies on customer and staff recommendations to bring iconic eateries on board--and they're open to suggestions.
The company wrapped up its pitch with a self-catered buffet featuring sweet treats from a few of its clients, including Jeni's Splendid Ice Creams, an artisan ice cream parlor in Columbus, Ohio. Maybe the way to a VC's heart really is through his stomach?
John Mackey, Whole Foods CEO and founder, talks about why he champions capitalism.
Chinedu Echeruo talks about stepping down as HopStop CEO in 2009, four years after he founded the city transit directions app.
The Passover Seder has much to teach us about the functioning of a healthy team.
Last night our family participated in a Passover Seder with a number of friend and colleagues. Our group was a mix of academicians, school teachers, entrepreneurs, and business leaders. The conversation took a somewhat unexpected direction, as we started discussing the lessons that can be learned from the Seder experience in terms of how we behave in groups and how we should think about leading teams.
For those who are unfamiliar with it, the Passover Seder is a ritual meal involving the retelling of the story of the liberation of the Israelites from slavery in Egypt. Families, friends, and acquaintances, and strangers gather around the table to retell the story and engage in discussion.
What has always struck me is how the very nature of the Seder draws people together to focus on the universal theme of freedom. On this night, it was particularly apparent that the table was host to some wonderful team dynamics -- 25 people engaged in debate, discussion, and disagreement, all while maintaining a sense of cohesion.
What are the team leadership lessons?
1. Talk on the same level Everyone speaks as an equal at the Seder meal. Your age, background or status matters little. The atmosphere is such that all ideas are welcomed and listened to.
2. Remember what you all have in common The story of the Exodus is told as a common experience and as an expression of common core value of freedom. To the participants, it serves as a reminder of what they share.
3. Do not let the strongest dominate Part of the Seder ritual involves the asking of questions. The strongest questions sometimes come from the youngest and the most naive participants. Hierarchy of knowledge and experience is not necessarily seen as validation of a superb question. Everyone is encouraged to think outside the box.
4. Do not rush The Seder is rarely a short gathering. The telling of the story may take three to four hours. Dinner is leisurely, and the discussion is continuous. The length of the ritual allows for openness and the development of a shared group experience.
5. Welcome everyone One of the strengths of the Seder ritual is the notion of the open door. It is an inclusive event where all are welcome. Indeed, it is considered an obligation to include all, not just those who are close to you.
Sometimes we tend to look far away for leadership lessons, and tend to think that what goes on in our world of business and entrepreneurship is totally unique. I suppose one of the lessons of last night’s experience is how much we can learn from our rituals and our histories, and how we can use them to enrich our own leadership capacity.
As one person reflected after last night’s experience: “If I ran my company the way this evening was run, I may have had fewer headaches, I would have gotten more out of people, and I would have enjoyed it just a bit more.”
Ready to take the leap into entrepreneurship? Make sure you master this checklist first.
It's spring (at least on the calendar), and here at LegalZoom, March means it's what we call National Start-Your-Business Month.
Whether you're a current business owner or are still deciding whether to take the plunge and start a company, it's important to step back and make sure you take all the proper legal steps to ensure your dream is realized with the protection of a legal business entity--such as an LLC or corporation. Stay with us--this isn't as hard as it sounds.
Many entrepreneurs dread dealing with the legal aspects of starting and managing a business--mainly because many don't know where to start. But ignoring legal issues can lead to costly consequences down the road. To help mitigate the risk of legal headaches, here are some top tips for getting your business up and running. (Psst: They will also help you manage hurdles along the way).
1. Think through the legal aspects of your business early.
While adrenaline and excitement may be pushing you to launch your business as soon as you can, you need to take time to contemplate legal necessities from the get-go. This prevents pitfalls and ensures a timely response should legal problems arise. Common legal issues for entrepreneurs include: choice of entity, business licenses, supply and service contracts, and employee matters. It can be difficult, but try to look six to nine months ahead and identify legal issues you will need to address for your business.
2. Don't wear your heart on your sleeve.
Don't take lawsuits and threats against your business personally; make the right decision for the business--not your ego. Sometimes, even if you feel like you are right, fighting and winning a legal battle costs more than avoiding it--not only in money, but also in your time and energy. If you can't separate your emotions, turn to an advisor for objective help to see the right cost-benefit analysis.
3. Befriend someone familiar with the law.
Establish a relationship early-on with someone you can reach out to when you need help figuring out whether a legal problem is worth the time and money. This doesn't mean paying for an attorney each time you need some friendly advice; however, a good lawyer will want to build and nurture a relationship with new prospects and not charge for every call.
Also, you should consider looking into a legal plan that deals with businesses, where you can typically get a lawyer on the phone to triage issues for a flat monthly fee. A good legal plan will provide a year of valuable service for less than some attorneys cost for an hour!
4. Don't use your personal bank account.
While there are numerous reasons to keep your personal and business finances separated, many business owners make the mistake of using their personal bank account for their business. Managing two banks accounts might seem overwhelming and inconvenient at times, but using your personal account for business impacts your legal liability. This should not be something you "get around to later"--it should be one of the first steps taken when opening your doors.
5. Get it in writing.
It's extremely important to put almost everything in writing. Whether you're negotiating a salary or redesigning your office space. Defining and memorializing important aspects of your business relationship will be the proverbial ounce of prevention worth a pound of cure! Agreements should be well-defined and signed by all parties involved. If you are starting your business with co-founders, get written confirmation between yourself and your partners--everyone should know their role (and ownership) in the company. While it's great to be trusting, clear contracts simplify work relationships. Ambiguous agreements (or no agreements) make for messy business arguments and can lead to future legal disputes.
If you follow these tips, you will spend less time on legal problems and more time on what you do best--running your business.
When it comes to how money is made, the middle-class and the self-made live in different worlds. When it comes to how they approach failure, the self-made millionaire lives by a different code.
Steve Jobs did. So has David Neeleman, the founder of Jet Blue. In fact, you couldn't find a successful self-made business icon who hasn't experienced multiple crushing business failures. In today's video segment, we explore an unseen barrier that stops most people from achieving their greatest successes.
Seth Godin, himself a veteran of multiple failures, tells us that failing to persevere through adveristy prevents us from achieving real expertise in anything important because we quit just before we really learn what it takes to succeed. Even after you master all the other elements of the Business Brilliant, it won't matter unless you are ready to confront the very real and likely aspect that multiple failures stand in the way of great success.
This video was shot at Maison 140 in Beverly Hills.
What happens when an employee makes a conflict public?
Would you fire someone for an off-color joke?
A public firing, brought about by the Internet, is in the news again. Well, two public firings. The first was a man, sitting in a PyCon technology convention, who made a sexually-charged comment to a woman.
The second was the woman who heard the joke, got highly offended, and blogged about it, complete with a picture of the "offenders."
If either one of these people were your employees, should you terminate them?
Personally, I hate crude language. I avoid it. I wouldn't tolerate it from a coworker, nor a friend. If there's an Inc.com prude contest, I am the guaranteed winner. But, if I were sitting in an audience and overhead someone joking about "dongles," I would ignore it.
(As an aside, I'm rather ticked off that there are women out there who are so wimpy and sensitive. Why not turn around and say, "I'm sorry, but that's inappropriate. Could you please keep it down?" Nope. Instead we ask an authority figure to come down and tell the bad men to be quiet.)
If I received a complaint that one of my employees had made a crude joke at a convention and was overheard by someone who wasn't an employee, I'd say, "Be careful when you are at company-paid events. You represent the company, and you never know who is listening."
As for the person who tweeted and blogged about the event, and published the picture: You certainly have the right to do that. But, why would you? No one was harmed. It wasn't threatening. You could have made your point about the terrible sexists that dominate IT without posting the picture. In fact, the picture did nothing to help your story at all. The only reason to do it was because you want to get someone in trouble.
I don't want someone like that on my staff. Neither did the boss of Adria Richards, the complaining woman. He employer, SendGrid, explained, "Effective immediately, SendGrid has terminated the employment of Adria Richards. While we generally are sensitive and confidential with respect to employee matters, the situation has taken on a public nature. We have taken action that we believe is in the overall best interests of SendGrid, its employees, and our customers."
The CEO later released a statement that made it clear that she wasn't fired for complaining about sexual harassment, but rather how she handled it.
I agree with this. If you feel you are being sexually (or racially, or due to disability) harassed, please report it. Report it to your boss or the HR department. But don't tweet it. Don't blog it. Don't publish pictures of the offenders.
Now, there is some concern that Adria Richards could sue--and win--claiming that her firing was due to retaliation. That is, she was fired for reporting sexual harassment. Employment lawyer Eric B. Meyer says that this is definitely a possibility.
On the other hand, employment lawyer Jon Hyman points out that these men, sitting behind Richards, had no relationship to her employer, therefore, there is no case against the employer. He writes:
What could Richards' employer have done? It couldn't conduct an investigation. It couldn't discipline the alleged perpetrators. All it could do is alert the conference of the issue and suggest that Ms. Richards distance herself from the situation.
Ms. Richards did not complain about illegal discrimination. She complained about boorish behavior by two individuals completely outside of her employer's sphere of control.
So, would I have fired the man who made the offending comment? Absolutely not. (Although, his company used the word "investigation," which may indicate that they actually looked into this and found that this was typical of his behavior in the office. In which case, firing may or may not be appropriate.) Would I remind him of the sexual harassment policy? You bet.
And even though I'm pretty annoyed by Richards' behavior, I'd be unlikely to fire her either. Counsel her about tweeting on company time and giving her a nice lesson on time and place. But fire her? No.
What would you do?
One psychologist recently made the case that real leaders take criticism out from behind closed doors.
No one likes receiving negative feedback. And they likes it even less when their peers are witness to such a criticism.
However, it might be exactly what your team needs, says organization psychologist Roger Schwarz. Schwarz recently wrote that criticizing in private undermines team members' accountability to each other.
"You send the message that team members are accountable only to you, not to the team. You also send the entire team the message that they don't need to hold each other accountable — you'll do it for them," he says.
By addressing problems as a team, Schwartz says you ensure that your employees are accountable to each other for working together and eliminate the possibility of one employee blaming the team's failure on the other behind the closed door. Not only will you be able to determine what went wrong faster, but as a team you will be able to effectively determine how such problems can be avoided in the future.
Of course, kissing the "praise in public and criticize in private" adage goodbye will require you to get out of your comfort zone.
"Leadership isn't about being comfortable; it's about being effective, even when you're uncomfortable. Smart leaders address ineffective team member behavior in the team setting when it occurs, or when the behavior affects the team. In the team: that's where the information, solution, and accountability are," explains Schwarz.
Lessons from how founder and CEO Jim McCann scaled $330 million (market cap) 1-800-Flowers.com.
I spend a lot of time on the speaking circuit, presenting lessons I've learned building Priceline.com, developing the marketplace for uBid.com, and mentoring entrepreneurs around the world through my current consultancy, ColorJar. But one lesson I learned from another speaker stayed with me forever.
I was on the agenda at a business conference to talk about innovation. Also on the line-up, to cover operations, was the founder of 1-800-Flowers.com.
He said it's critical in small and growing companies to ensure that every activity taking place at your company is focused on achieving a specific, targeted goal. Jim's company had a simple objective: to sell more flowers. And Jim did something at his company that I challenge all of you to try, too.
Simple Way to Grow Your Company
Walk down the hall, pick any random employee, and ask him exactly what he is doing right now. Then ask him how that helps "sell more flowers." If that person can't answer that question right away, tell him to put down what he is doing, and go do something that helps sell more flowers. Today, 1-800-Flowers.com is one of the world's largest florists.
The first step in achieving this level of operational efficiency is to define your specific goals and document them clearly. Make sure you have goals that are quantifiable, and therefore, measurable. Everyone on your team needs to know where he stands.
Ever seen one of those United Way thermometer charts in an office before? It tracks progress against a fundraising goal by using a red line that rises like the temperature as progress is made. Anyone walking by can instantly see where the company stands, and what still needs to be done.
Define Quarterly Goals
Once you set your goals for the year, break them down into 90-day chunks. A year is too long to wait to feel like you've achieved something. A month is too short. Quarterly objectives work best.
Then, post your goals everywhere. Hang them on posters on the wall. Create some kind of thermometer even. Make sure the goals are communicated to everyone. Call a company-wide meeting and get everyone's buy-in. Employees are more motivated and more fulfilled when they can see that they are gradually approaching your goals. A football team playing in the championship game always knows what the score is. Your team should too.
Now take each specific objective and make a list of the tasks required to achieve that goal. It's very important that you define the relationships between the tasks people are doing and the goal or objective that those tasks support. I call it "linkage." Linking the daily workload of your employees to those numbers posted on the wall helps make employees feel productive and valued.
Take the Flowers Test
Once you've defined your goals, communicated them to your employees (everywhere), and linked specific operational tasks to the longterm goals they support, you're ready to take the flowers test.
Jim can walk down the halls of his company and ask people how the work they are doing at that moment helps sell more flowers. After all, that's why his company exists. Try it at your own company. And keep doing it until every time you ask an employee what she is doing and how it helps sell more flowers, she can answer you quickly and clearly. That's when the company will be ready to scale efficiently.
While you're at it, maybe send some fresh spring flowers to the employee whose work contributes the most.
You measure employee performance and sales. But you're forgetting to measure what matters most to overall success: ethical behavior.
As quality guru W. Edwards Deming reportedly said, "You can expect what you inspect." Or put slightly differently, in business, you get what you inspect, not what you expect.
When Jan Carlson, the former CEO of SAS Airlines, wanted to improve on-time performance, he ensured that managers would see up-to-the-minute on-time performance regularly on their computer monitors. Similarly, Ford Motor's quality improvements in the early 1980s began by plotting defect rates on charts that were visible to everyone in the factories. This precept about the importance of measurement is as true for ethical behavior as it is for quality, performance, or anything else.
Why It Works
Measures work for several reasons. First, they focus attention on what is being measured, making those dimensions of the work more salient and focal. Second, they signal the firm's priorities. Companies have numerous objectives--sales, profits, quality and defect rates, customer and employee retention, and so forth. Companies do not measure (or measure as frequently and precisely) everything they claim to value. Employees therefore use what gets measured as a signal of what the company actually cares about. Third, measures, once collected, often get used in performance evaluations and compensation settings, so the measures come to have real consequences for people's careers.
Business strategy and values are often not aligned with actual employee behavior. Some years ago, the balanced scorecard movement, promulgated by Harvard Business School professor Robert Kaplan and David Norton, recognized the importance of measurement for this alignment process, arguing that if leaders wanted their organizations to pay attention to aspects of performance beyond the short-term financial measures invariably collected--important objectives such as innovating for the future, for instance--they needed to include such measures in their management control system. For example, some companies measure the percentage of total sales accounted for by products or services less than one or two years old, as an indicator of the extent to which they are innovating in their business.
How to Do It
So how might companies assess ethical behavior to increase its likelihood? First, by figuring out what are the components of ethical behavior and then developing measures of each component. Fortunately, many companies have attempted the first task and we can bootstrap off these efforts.
Pharmaceutical manufacturers are as ethically challenged as any industry. According to one study, the companies in the industry paid some $19.8 billion in penalties in the past 20 years, with 75 percent of the penalties being paid in the five years between 2006-2010. Pfizer has been one of the worst offenders, but there is much to be learned from its 53-page "Blue Book" of business conduct. Pfizer and its competitors have thought deeply about the components of ethical conduct, even if they have not bothered to implement their insights.
First, no one can practice ethical conduct if they do not know the company's standards and applicable regulations. One way a company can measure that knowledge is by giving its employees tests to determine if they have the necessary information. Better yet, make learning fun by creating teams of employees to compete with each other in a game-show format to see which best knows the ethical values and standards.
Next, people need to feel empowered to ask questions and raise concerns if they observe problems. One of Deming's first principles was to drive fear out of the organization. Many employee surveys routinely include a "safe to say" question that asks to what extent people feel free to raise concerns and objections without fear of retaliation. So measure how safe people feel by a question of this sort, and maybe also include one that assesses how fearful they are. And it is not particularly expensive to appoint someone to be (as part of their other job roles) an ethics compliance ombudsman, someone that any employee can feel free to raise concerns with in a confidential manner.
Most importantly, assess what happens, and what your employees believe happens, when people violate ethical standards. One of the most troubling aspects of the ongoing financial shenanigans is that many of the worst offenders still have their jobs, or, at worst, left with barely a slap on the wrist and most of their money. You can readily measure your ethical culture by asking people questions such as what they believe it takes to get ahead in your company, how important they think ethical standards are, and what they believe about the ethical culture of your company.
Surveys are not that difficult. While it was once difficult and costly to design and execute surveys, companies such as Survey Monkey and Qualtrics make the design, implementation, and even analysis of surveys both easy and inexpensive--certainly much less expensive than litigation or regulatory problems.
Companies that are serious about their ethical culture define and then measure the components of such culture. Maybe if the big pharma companies spent less time on their handbooks and more time on measuring whether or not anyone takes them seriously, they would not be paying such massive fines.
Facebook's CEO and other tech execs want a Washington lobby group. But the needs of small tech start-ups may not be on their agenda.
Facebook head Mark Zuckerberg is reportedly spearheading a new multi-million dollar Super PAC. The group--which includes such high-profile Silicon Valley names as Yahoo CEO Marissa Mayer, eBay CEO John Donahoe, and storied Keiner Perkins VC John Doerr--wants to push Washington on some industry hot-button issues, including education, immigration reform, and long-term economic improvement.
Is there a hidden agenda? Hard to know, but the group is supposedly working with both Republican- and Democrat-affiliated lobbyist firms, which would indicate an unusually pragmatic approach to addressing problems. Getting anything done by the federal government in the near future will require buy-in from both parties.
In other words, this could be more than the typical picture of tech executives hosting parties for Democratic candidates. The structure sounds like the group is more focused on success than one side or another. Certainly the tech industry has clamored for immigration reform for a while, with an eye on greater availability of visas for expert scientists and engineers from other countries. Education? The industry sees it as a potential feeder system, to train future employees. And who would argue for a worse general economy.
Big Tech's Agenda
But high tech is not an industry with a single set of players and a unified collection of goals. Is the good for Facebook the good for all? Unlikely. Look at immigration reform, for one. Facebook and some other tech giants want easier access to highly trained workers from overseas. But the program for bringing highly trained workers to the U.S. from other countries has been criticized as actually unnecessary and a mechanism for depressing the wages of domestic workers, which could mean an effective subsidy for large corporations at the expense of small companies that must compete for the same workers but without the extensive legal and operational staff to make the system work for them.
Zuckerberg and his company have been willing to push the bounds of privacy with users, for example. He's managed to make many consumers, and regulators, wary. Continued pressure on that front, even with campaign donations, won't necessarily coax politicians to bend on topics that could become radioactive if used by opponents during campaigns. If this new group tries to change regulation in the interest of Facebook, it has the potential of tarring other companies around it. Or it just might be successful in ways that lower a privacy burden to boost the advantage that access to personal information can provide--an advantage of having large amounts of information unavailable to most start-ups.
Other Issues to Watch
How else could government action favor one part of Silicon Valley at the expense of others? Further changing protection of intellectual property in ways that favor large companies over small, for one. Or perhaps Facebook might work to keep and expand the type of opportunities for lowering corporate taxes that are generally available to larger, not smaller, companies.
Any time someone with a penchant for ignoring criticism and forging ahead in its own practices--as has been true of Zuckerberg and his company--spearheads an attempt to affect public policy, it is time to be wary. Even if some of the benefits of change might spill over to entrepreneurs, it is more likely that large tech companies will reap the biggest rewards.
An entrepreneur talks about tough choices, saying no, and embracing change.
When I look back at who I was just seven years ago, I am amazed at how much I've changed. For better or worse, I've become a different person.
For many, owning a business means getting a PhD in "the school of life." And it changes you. Distant is the innocence and purity of the dream itself, as getting to the top means being ready to get in the trenches. Business owners live the ups and downs of their business, its operations, its financial standing, and its trends. The results of your efforts define you. Inevitably, tough decisions need to be made.
Here are a few things I've learned about tough decisions:
Saying "no" to people is tough. It is one of the hardest things to do, yet one of the most important. It involves setting boundaries, staying strong in your priorities for the company, or fighting for what's right. Saying "no" means being the bad cop at times, but it also means understanding that running a business is not about being liked.
Tough choices are tough because often, each of your options will have some negative effects. How do you determine which course is better in the long run?
Maybe you think you should let a long-time employee go. He or she may feel like family, but may no longer be the best fit for your company. Or you might need to part ways with a consultants who can no longer help you as your company's needs change. How you handle these choices determines how you become the best leader for your company.
Coping with Change
How you cope with change, and how you inspire others to move forward, is key to growing your business. Calculating risk is part of growing, and risk involves change as well.
It's not always fun to be the one in charge. Sometimes it's tough to be the "decider." Knowing that you are guided by your goals, and your company's priorities, helps build the strength to make those tough choices. Keep at it. We're all in there.
Working a room and shaking dozens of hands? Forget it. Re-think your networking to make lasting connections.
I used to dread attending networking events and crowded conferences. I'm a bit of an introvert and it always felt awkward walking up to a stranger and trying make small talk.
It wasn't until I realized that some of my greatest opportunities have come because of a chance connection made at a conference or networking event that I started appreciating that dreaded networking. I realized I needed to think of networking differently to make it work for me.
With the Spring networking season entering full swing, it's a good time to think about how you approach networking, so you can get the most out of your time spent.
The World is Flat
Some networkers I know move through a networking event to collect as many business cards as possible. They tend to put people they meet into two broad categories: prospects or non-prospects. They quickly discard the non-prospects as a waste of time.
That's a mistake. A non-prospect may be just as important to your future needs as a prospect because they may connect you with someone or something you need.
Remember six degrees of separation? With the introduction and widespread use of social media and other technologies, a study from 2012 shows that these days, it's more like four degrees. The more people you know--really know--the more likely you are to make that important connection you need to take your career, company, or venture to the next level.
Stop Working the Room
The number one rule is to stop thinking about networking as "networking." Networking should not be about meeting as many people as possible in as short amount of time. There is no glory in returning to your office with a handful of business cards if nothing comes from your efforts, and there is no need to continually add to your LinkedIn connections unless you can establish a meaningful relationship with these new connections.
I work hard to figure out what I can do for someone else when I meet them. Who can I connect them to? What can I do for them (outside of selling them my stuff)? What resource or information can I share that will help them out? True connection is a two-way street.
I attend one event a week. If I pick a new event, and it's not right for me, I don't go back. If it ends up being a good use of my time, where I meet quality people who are interesting and interested, then it makes it onto my list of events to attend in the future.
One such event in Atlanta, started by Darrah Brustein, is the Atlanta Under 40 event. Darrah's event attracts almost 200 people a month. There is an unspoken rule that people don't sell to each other at Atlanta Under 40--it's about getting to know someone new. Her event has been so successful that she recently unveiled an Atlanta Over 40 to give everyone a place to make new connections.
Focus on Only a Few
One of my colleagues makes it a point to only meet one person at any given event and spends his time really getting to know that one person. He relies on that deep connection to potentially connect him with the rest of their network.
I am not as hyper-focused, but try to have a meaningful conversation with only about five people at every event I attend or for each day of a conference. This results in enough contacts to plan one day of meetings and get to know each of them more deeply within a couple of weeks of the initial introduction. I have found that seeking to establish a quality relationship with a few people provides the greatest payoff for my efforts.
It's About the Follow Up
Quinetha Frasier of First Born Group follows a philosophy that I have always found to be true, but didn't put it into words as precisely as she has. She believes that if you don't follow-up with someone within 10 days after meeting them it was never meant to happen.
She goes so far as to say that if you don't MEET in 10 days, then it wasn't meant to be. This is her way of determining those that are really serious about establishing a relationship and those just connecting for the sake of connecting.
Success can come at any age. And for this bunch, it came early and it came with an awesome payday. Check out a few of the richest teen entrepreneurs out there.
Success can come at any age. And for this bunch, it came early and it came with a pretty awesome payday. Check out a few of the richest teen entrepreneurs out there.
DAloisio, 17, made headlines this week for selling his mobile news app Summly to Yahoo for a reported $30 million. The programming guru still has a year and a half left of high school, but has said he will make arrangements to test out of his classes so that he can work from Yahoos London office, in part to follow the companys new policy that prohibits working from home.
Wong founded Kiip, a rewards platform that lets brands and companies give real-world rewards for in-game achievements, at age 19. To date, the company has reportedly raised $15.4 million in funding and landed Wong on the Dow Jones FASTech50 list in 2011.
Mark Bao, 18, is currently a founding partner of 10 technology start-ups. In 2011, he sold his vanity app ThreeWords.me (which garnered over 17 million pageviews in a matter of a few months) to dot-com mogul Kevin Ham, whose portfolio includes around $300 million worth of domain names, for an undisclosed amount. But the amount was "very pleasing to both Bao and his parents."
Brindak launched her tween social networking site Miss O and Friends (an Inc. Coolest College Start-Up in 2011) when she was only 16. The site generated 10 million monthly visits, a 20-fold traffic increase since the site launched in 2005. Procter & Gamble, an early investor, valued the company at $15 million in 2008.
At the ripe old age of 14, Belnick created bizchair.com, an online furniture retailer with an initial investment of $500. In 2004, he moved the operation out of his bedroom and into his first warehouse, and by 2009, had more than 702,000 square feet of warehouse space. The company reportedly had sales of more than $58 million in 2010.
Not every teen 'trep takes the money: In 2004, at age 14, Qualls launched the site WhateverLife.com, a site that offered web graphics and layouts for MySpace users. She clocked revenue of $70,000 per month with 7 million monthly visitors and was reportedly offered $1.5 million for the business in 2006 from an undisclosed buyer--but turned it down.
The end of the first quarter is the perfect time to evaluate where your business stands. Here's why it might pay to take a page out of the government's playbook.
It's the end of the first quarter. How did you do? Are your revenues, profits and cash flow what you predicted? What about your spending? How about the sales pipeline?
The U.S government is on a forced diet of about $85 billion in annual spend as of March 1, 2013. Skip the politics of the issue for the moment and focus on the basics of what the sequester is—a triggering event that created a forced adjustment in spending.
Could your business benefit from a sequester? The end of your first quarter gives you an opportunity to re-calibrate your plan for the year.
Let's see where you stand on your business practices. Answer these few questions, Yes or No.
- My company has a clear course-correction plan for what we do if we exceed or fall-short of our revenue plans for each quarter.
- My company has a clear course-correction plan for what we do if we exceed or fall-short of our cost budget for each quarter.
- My company has a clear course-correction plan for what we do if we exceed or fall-short of our profit plan for each quarter.
If you answered "No" to more than one of the above, it is my recommendation that you establish a plan. Too often I see companies that make decisions based upon the latest set of data without considering a long-term plan. This kneejerk reaction wears out your people and diminishes their confidence since it appears that you are reacting to the world rather than following a path. (By the way, the same is true for your bankers, suppliers, and potentially your customers.) It is better to have a model that clearly lays out which triggering levels of performance will cause you to change course rather than making every budget-evaluation period a surprise party that sets everybody scrambling.
What to do:
Products run hot and we scramble. Sales go cold and we scramble. I see many companies who have become world-class scramblers. Become a world-class planner and you will scramble a lot less often.