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Stuart Ellman, co-founder and managing partner of RRE Ventures, explains what propelled him to work with the founders of Shake, a start-up that prepares legally binding agreements right on your smartphone.
Incubating a company is one of the most interesting things that I do as a venture capitalist. It’s not only a lot of fun, it also puts me in the entrepreneur’s shoes, which gives me perspective on how to provide the right kind of support and advice for my portfolio companies.
Every few years, I see a great opportunity that no company is addressing and I help assemble a team to charge headlong into the market. This year, I incubated a company called Shake, which creates concise, plain English, legally binding agreements on your mobile phone. I learned so much from the process of incubating companies that I decided to write a short series for Business Insider about the experience in order to help potential entrepreneurs understand the events that go on inside a start-up that hopefully lead to that moment when after months of research and soul-searching, the co-founders look around the table at each other and say, “Let’s do this.”
The idea for Shake was the brainchild of Jon Steinberg, a longtime friend and the president of BuzzFeed (an RRE portfolio company) and Jared Grusd, the general counsel for Spotify and an adjunct professor at Columbia Business School, where I have taught a Venture Capital Seminar for over ten years. Jon and Jared sat in my offices and told me that they thought they had a great idea, but weren’t sure what to do with it.
Jon and Jared met at Google in the mid 2000s, where they worked on lots of negotiations together. They were frustrated that the complexity of the legal documents often got in the way of deals that had strong commercial benefits, especially when dealing with SMBs who didn’t have access to expensive legal counsel. The legal documents were simply too convoluted to get deals done without endless rounds of edits and discussions. Working together, Jon and Jared cut out all the extraneous “legalese” and found that two-page documents were more efficient, more easily understood, yet equally binding. It was just a better way of doing business.
Since working at Google, both had moved on to senior roles at great companies where they were personally and professionally satisfied. Neither had the time to start a new company in addition to their day jobs, but both of them saw a real opportunity. Start-up companies, freelancers, and most people participating in the collaborative economy needed basic legal documents like NDAs, loan agreements, consulting agreements, and bills of sale. Most of these needs are perfectly satisfied with boilerplate documents, yet lawyers still charge significant sums to customize these highly standardized agreements. Why not offer simple, legally binding documents, available over a mobile app, instantly executable and available for free? The goal was not to replace lawyers, but to provide a fast, cost-efficient supplement for less complicated, routine agreements.
Every year that I have taught at Columbia, there are one or two truly excellent students that I know I want to get involved with, either as a VC or an entrepreneur. When Jon and Jared approached me, I was finishing up another year of teaching and one of my students, Abe Geiger, really stood out to me. I just knew this guy was going to do something special. Coincidentally, Abe had been working on a legal tech idea of his own--simplifying the fund formation process for Private Equity, VC, and Hedge Funds--and was highly interested in the consumer driven enterprise (Dropbox, Evernote, Google Apps, etc.) as well as collaborative consumption trends (Airbnb, Taskrabbit, etc.).
After working on the fund formation idea for a while, he realized that impacting change in the legal industry wasn’t going to happen from the top down, and it needed to happen from the bottom up. So when I told Abe about the opportunity I was considering with Jon and Jared, he said he would be very interested in co-founding Shake with us. He also believed the industry’s raw size, extreme inefficiency and lack of transparency made for the ideal disruptive conditions. We all shared the same vision and philosophy for approaching this opportunity, something that is critical amongst a founding team.
The more we learned about the market, the more excited we became. We surveyed all of the RRE portfolio companies and saw a real need for simple documents and a better way to customize and manage them. When we looked at the competitive landscape we saw online DIY providers putting confusing legalese online without a mobile presence, and mobile signature products with no content. With a great entrepreneur, an interesting space, a big market opportunity, Shake had the makings of a great venture investment. Next, we needed to really dig into the market and the competition.
Stuart Ellman is a founding General Partner of RRE Ventures. He also serves as a board member of Shake, a mobile application that allows you to create, sign and send legally binding agreements in seconds.
Don't be blinded by early adopters. You still have a lot of work to do to overcome the power of the status quo.
Forget about the competitor who undercuts your prices and releases products more quickly. Your first, most formidable foe is the status quo, argues entrepreneur Rajesh Setty.
Status quo "is for your prospect or your target audience to do nothing or continue to do what they are doing without being touched by what you are offering," Setty, the co-founder of WittyParrot, writes on his blog. Here are three ways to move past this powerful competitor and encourage customers to get excited about what you're doing.
Don't get blinded by bias.
Your product is your creation--in a way, it's your baby. As a metaphorical parent, this bias can blind you to the truth. "You are so convinced that what you got is required by the marketplace that you simply ignore comments from those that 'don't get it,'" Setty writes. You should take a step back and separate yourself from your product and company. Will people want to change their ways to use your innovative service?
Don't confuse interest with intent.
After your friends, family, acquaintances and potential customers have vetted your prototype, you believe any smart person will want your product. But Setty calls this dangerous thinking. "Smart people are always curious and want to know what you are doing," he writes. "That in no way should be construed as they are interested in 'buying.'" Showing curiosity isn't the same as taking an action that disrupts their status quo. You still have to work for it.
Don't rely on early adopters.
Setty says that early adopters are a special breed. They are using your product because they have a special relationship with you or a particular interest in your product. Because of that, these users are more forgiving and willing to put up with bugs and glitches. "The early adopters are usually a minority," Setty writes. "Winning over them is a good start but not everything." For most potential customers, a glitch-free status quo will trump any product with even a few bugs.
Don't let the fact that you're never at your desk hurt your company's social media management. Dave Kerpen, CEO of Likeable Local, discusses the top apps for busy entrepreneurs.
00:09 Dave Kerpen: The reality is that most entrepreneurs are way too busy to be sitting at their desk all day planning out their social media marketing. I get that, but you know what? There's good news. You don't need to use this laptop for your social media marketing because there's a great tool for you right here in your mobile phone. Mobile apps have come a long, long way, and now there's a lot of mobile apps you can use for your social media marketing.
00:36 Kerpen: The first app that comes to mind is Instagram, which is a pure mobile app. You can use Instagram to take pictures around the office, add a couple of filters, and share beautiful photos as if you are a professional photographer. For Facebook, Facebook has its own Facebook Pages app to manage your Facebook page from your mobile phone. With Twitter, there's lots of different mobile apps to use. Two of my favorites are HootSuite and Bufferapp that you can use to schedule tweets and manage your business Twitter accounts from your phone. Finally, Foursquare is a great mobile app that allows you to create specials if you have a retail location, and then consumers can also use the mobile app to check in and take advantage of those specials and get rewards.
01:22 Kerpen: Whichever mobile apps you use, remember, you don't have to worry too much about the computer in order to do social media marketing. You can do it all right from your phone.
Economists predict how a shutdown would affect GDP growth and whether it could lead to another recession.
So a government shutdown is supposed to crush the economy. Every major player has sounded alarms about the downturn that happens without a spending measure in place by Monday night. It seems to be the one item in which President Obama, House Speaker John Boehner (R-OH), Sen. Ted Cruz (R-TX) all agree.
With the odds of the government closing, economists are cranking out their estimates of the possible financial impact. Since House Republicans passed their plan--which temporarily funds the government but eliminates Obamacare--the stock market has steadily plunged, with the S&P 500 index off by 1.77 percent.
The forecasting firm Macroeconomic Advisers based its projections on a two-week government shutdown causing 36 percent of federal employees to go temporarily without a paycheck. That translates into a 0.3 percent drop in the fourth quarter gross domestic product. By way of comparison, that’s slightly better than the quarterly impact of the sequestration budget cuts, according to Congressional Budget Office projections.
But Macroeconomic Advisers assumes that the government would then get back on track and that economic output would rebound in the first quarter of 2014 by 0.3 percent.
Mark Zandi, chief economist at Moody’s Analytics, told the Senate Banking Committee this week that a three to four-week shutdown would lop 1.4 percent off his projected 2.5 percent growth this quarter.
"And this likely understates the economic fallout, as it does not fully account for the impact of such a lengthy shutdown on consumer, business and investor psychology," Zandi told lawmakers.
Scott Anderson, chief economist at the Bank of the West, pegs the impact of a weeklong shutdown at 0.2 percent of fourth quarter GDP.
"If a government shutdown were to drag on longer, say a month or so, the damage estimate increases into the 1.5 percentage point range," Anderson said in a Friday client note. "Can you say economic stagnation? Longer than a month and GDP growth likely contracts in the fourth quarter and the risks rise significantly. It’s a scenario that at best delays any economic acceleration and at worst leads us down a path toward another recession."
This article was originally published on The Fiscal Times.
I know an entrepreneur who is in business for the express purpose of hiring people, treating them superbly, paying them fairly, and bringing out their best. I mean it.
I have a friend who has an astonishingly different view of why he is in business. It is rare. And it is refreshing. He really is anchored in this view and his company is doing very well. He feels that his company is doing well because of this view he holds.
Others say, "Not so." They say his company does well because of the policies he implements, rather than his view. But then the policies he implements grow from the view he has. So we are stuck in circular reasoning. But I mean it. He is doing something remarkable. He is bringing heavy manufacturing back into the United States. And he is making money doing so.
He runs quite a sizeable organization--about $1.5 billion in revenue and a payroll of 7,000, so I'm not talking about small potatoes. Who is this man and what is the breathtakingly different perspective he has? Relax, I will tell you shortly.
Why Are You in Business?
Before I go further, think about why you are in business. I have asked hundreds of entrepreneurs this question. The most common answer is that they want to be in control of their destiny. Some say they want to make a difference in the world and by this they mean everything from affecting the lives of many, to building a large and thriving business. A relatively few want money and lots of it. Not that entrepreneurs don't want to get rich, but that is not the primary driver for most. They are most thrilled about building something that is their own creation.
So why do entrepreneurs hire people, and how do they treat them? Of course, they hire people because they're needed to get work done. Some entrepreneurs don't care at all about those they employ and ruthlessly manipulate them to extract as much value as they can. Most are well meaning and want their people to do well. But their primary focus is on the tasks that need to get done and how they can accomplish this with as little expenditure as possible.
My Friend Has a Different Vision
My friend is in business because he wants to hire people and treat them superbly, pay them fairly, and bring out the best in them. He just happens to do this by becoming a "...diversified global supplier of manufacturing technology and services across a broad spectrum of industries..." In other words he makes machinery and sells consulting services.
It is possible that you have encountered a similar notion before. Greyston Bakery, for example, famously states that it bakes cakes so it can hire people. The people it hires are sometimes unemployable elsewhere because of arrest records, drug use, and the like. And it teaches them basic survival skills in employment, like show up on time, keep your word, and so on.
But Greyston Bakery and others like it are on the fringes of business and classified as "do-gooders," with their own rules. Nice to have around, but not really relevant.
A Serious Business With a Serious Management Mission
My friend is different. He runs a serious business that makes serious money. And he really is on a mission. A mission to change the social contract between a company and those who work in it. He believes, really believes, that we have a crisis of leadership in the world and the principal way this reveals itself is in the number of people who are disengaged in the workplace.
He also believes that if you concentrate on creating a culture where each employee--mind you, there are no 'employees' in his company, there are associates and team members--can flourish, then they will make magic happen, and part of this magic is a veritable rain of golden shekels.
I love the tagline he uses. "We Build GREAT People Who Do EXTRAORDINARY Things."
And, let me tell you, it works. He takes companies that are bankrupt or nearly so and he turns them around. He does not fire anyone during downturns and he has seen plenty of these.
I will tell you a lot more about his philosophy and the specific methods he uses in coming columns.
This Guy Is for Real
And now I will tell you who he is. His name is Bob Chapman and he runs the privately held Barry-Wehmiller. Check out this talk, in which he outlines his philosophy.
Some feel that he is paternalistic and have been put off by this. But, trust me, he is not paternalistic in the sense of wanting to control you. He just wants to give you the opportunity to be the best you are capable of being.
What do you think of Bob Chapman's strategy? Let me know in the comments section below.
When you're running a business, it's tempting to fall for get-successful-quick schemes. Here are four so-called "success" strategies that can easily backfire.
Most of us are looking for the key to success. As I've mentioned in previous columns, I believe that the core foundation for a successful career is figuring out where your innate talents and purpose connect and creating a job strategy around that area of overlap. After that, there are countless other variables to consider. The biggest key to success is being able to weed through those variables, figure out what works for you, and ignore what doesn’t.
It's trickier than it sounds. We all have doubts about our ability to succeed. This is especially true when you are beginning to build a business. When you're stressed and vulnerable, you're susceptible to any information that comes your way. Savvy marketing ploys also play into our fears, making us believe that the key to six-figure success lies in reading a book or taking a seminar. To that end, here are some common "success strategies" that may sound like the right thing to do, but could actually lead you astray.
Myth: Get advice
We all want advice. We crave understanding and clarity, and if someone can give us something that will help unleash in us what is needed to get the job done, then we love it. The problem is that we often fail to see the difference between advice and support. Advice is what someone else would do in your shoes; support is when someone steps into your shoes and helps you make a decision based on what is best for you. Advice is what’s more commonly shared, so be wary of it. For example, your parents may warn you not to start your own business. They may not have the entrepreneurial spirit, and if they started a business it would probably fail. You, however, may be different. The bottom line: When you hear advice, listen to it. Does it make you excited? If not, then discard it. It’s not right for you.
Myth: Get an MBA
Getting an MBA is viewed in society as a ticket to a high-paid job or a lesson in how to run a business. However, most entrepreneurs will say they learned all that they know by building their business on their own. Getting an MBA may be right for some of you, but it’s not a magical solution for being successful. Some of the most successful entrepreneurs, such as Sara Blakely, Richard Branson, and Oprah Winfrey, are famous for not having business degrees. If getting an MBA excites you, then do it. Otherwise don’t.
Myth: Make six figures in the first year of business
We are impatient. That is one of the problems with listening to typical marketing slogans that are prominent in the "success" industry. Marketing can lead you to believe that it’s realistic to make lots of money fast if you hire the right person or follow the right formula. The fact is that 93 percent of small businesses have less than $250,000 in annual revenue and 57 percent have less than $25,000 in annual revenue, according to the U.S. Small Business Administration. So making six figures is not common and certainly not an achievement that should be expected to happen overnight. You need to gauge your success based on other metrics: Are you consistently growing in a positive direction? Do you love what you do? Are you continually evolving? Are you able to pay the bills? These are the types of questions you should be asking, rather than setting up unrealistic expectations that may not be sustainable for an early-stage business.
Myth: Everyone is a customer
There's a misperception that if your business serves everyone, it will be huge. Once you’re at the size of, say, Amazon, these types of goals are more realistic, but if you are a small business trying to grow, nothing is more detrimental than not having an ideal client. Being able to offer a clear solution for a certain type of audience not only increases your likelihood that someone will remember you, but also bolsters your brand. You want to be unique and offer the best solution for a certain type of person, not be everything to everybody.
Well, that was quick: The fundraising ads are already flying around now that it's legal under SEC regulations. But watch yourself--this is new territory.
Want investors? Earlier this week marked the first day that you can officially start advertising for them. Something not possible before under SEC regulations now is because of the JOBS Act, which loosened many regulations around companies going public when they make less than $1 billion a year.
If you're planning to raise capital, you might be excited about the possibility. Prepare to come down to earth. A combination of ads from high-profile celebrities and brands, other heavy competition, and the significant regulations that still remain will leave the marketing process a challenge.
Here Come the Ads
The general solicitation permission just kicked in and already the requests for money are starting to fly. Tim Ferriss, author of "The 4-Hour Workweek" and "The 4-Hour Chef," posted on his blog that people can now invest in his deals. Basically, he will build syndicates to raise money for companies in which he already has some kind of interest.
He announced the first deal for a company called Shyp--a package-shipping business--on Monday, September 23. Ferriss looked to raise a total of $250,000 with a minimum per-person investment of $2,500. Within an hour--according to pitch tweets that Shyp co-founder Jack Smith sent to many journalists, including to Inc.'s editor-in-chief Eric Schurenberg--the entire $250,000 had been raised. That's a really fast turnaround possible because of the 1.4 million blog readers Ferriss claims to have. It shows not only how celebrity can drive solicitation, but how its success can breed secondary attention-seeking.
Major names can certainly drown out smaller ones, as has begun to happen on Kickstarter. But that's not the only source of solicitation ad noise that could eventually make people begin to plug their virtual ears.
There will be many other companies looking for investments. For example, a company called Babelverse, which is trying to become a social network for translation services, sent out emails to direct potential investors to its AngelList page.
Some of the solicitations may be reasonable and sent by solid companies. Others will undoubtedly be sent by fly-by-night operations. And that's the problem. The more people find themselves bombarded with overuse or even misuse, the more they will turn a deaf ear to the increasing requests for money, just as they do with charitable solicitations and commercial marketing.
In addition, even while some of the requirements have loosened, many remain in place. You can talk only to only so-called accredited investors with sufficient net worth to meet federal guidelines. You must be careful about the marketing claims you make.
In short, while general solicitation is now available and may make sense for some companies, you could easily find yourself frozen out.
Popular Science just eliminated its comments section, while YouTube is making big changes to theirs. But what's the best way to handle comments?
It's been a bad week for web trolls. On Monday, Gawker Media's Nick Denton revealed changes to the site's Kinja commenting system that will allow "intelligent discussion to take place more easily," he told GigaOM. On Tuesday, YouTube announced a new strategy to promote relevant, quality comments, by connecting them to users' Google+ profiles. And that same day, Popular Science explained that it would be shutting down comments on its website completely, due to research that suggests negative responses change a reader's perception of the whole article.
Comments sections are famously terrible places, which has long inspired a debate on whether sites should moderate or eliminate comments. According to Claire Rasmussen, co-president and content strategist at The Nerdery, businesses should be thoughtful about whether to enable comments in the first place.
"It's always worthwhile for an organization to think about why they want to have comments, what the purpose is, what business goals it helps to accomplish and what value it provides to users," she says.
If you don't have the resources to properly monitor conversations, or you don't think that customers or readers will actively participate, it may not be the right choice for your company. "A mistake a lot of organizations make is saying, 'Okay, we've enabled comments. Now we're done.' There's a major pitfall if there's no participation," says Rasmussen.
You also have to consider whether "you have the staff resources to actually manage the comments and respond to positive comments," she says. If something requires a response from the company, it's important to have someone aware and available, or else it may tarnish your brand.
Rasmussen notes that similar concerns apply to e-commerce sites, as just a few negative reviews can affect product perception. In any situation where feedback or discussion is enabled, it's important to dedicate the company resources needed to monitor it and respond.
In the case of Popular Science dropping comments altogether, Rasmussen says, "Moderation might not have been affordable. I’m guessing they took into account the kind of resources they have available. You have to weigh the cost and reward."
What do you think about comment sections? Let us know ... in the comment section below, naturally.
The founder of Box, and former magician, explains how he grabs his audience's attention and builds suspense.
I was a professional magician in middle school and high school, the same time I was doing a lot of computer stuff. I could make people disappear in boxes. I could have an audience member select a card and then find it inside an orange.
In the sense that magic is an illusion, it’s not a great analogy to business. But doing magic tricks and making business presentations do have some things in common. The art of magic is about getting people engaged in some kind of story. Roughly speaking, when you see a magic trick, the magician spends 80 percent to 90 percent of the time just getting you engaged and building suspense.
Only 10 percent or 20 percent of the time is spent on showing you the truly uncanny part of the trick. It’s about capturing your audience members’ imaginations, and then letting them run wild about what’s possible in the world.
If you watch a product launch by Steve Jobs, Michael Dell, or Jack Dorsey, you’ll see a lot of those same techniques. They spend 70 percent of their time just building up the story line behind the product before giving you a glimpse of it.
At Box, I get excited about taking a complicated idea like cloud storage, making it much simpler and more elegant, and then letting people run with it. As an entrepreneur, if you’re acknowledging only facts and information and the here and now, then you’re not doing your job.
For Jennifer Walzer, founder of Backup My Info!, carving out just a few hours of personal time each week is essential to becoming happier and more successful.
Face-to-face cold calls have fallen out of fashion in today's technological age. But they still deserve a place in your sales strategy.
Emails, phone calls, social media marketing are all valid ways to make connections. But no matter how many ways technology creates for us to connect, nothing can replace face-to-face, hand-to-hand contact.
As a sales consultant, I occasionally go into the field with sales reps I'm training to show them how to make cold calls. In some cities, including Washington D.C., the security is tight and it might not be easy to gain access to companies. That said, I've made thousands of face-to-face cold calls throughout my career and have never been thrown out of an office.
Here's a good example of how a cold call can lead to new business: During a recent cold call to a skin care company, my client and I came through the front door of the office and introduced ourselves to the two women answering phones at the reception desk. My opening question was, "Hi Christine, I was wondering if you could help us out." Before we told her about our business and asked to see the decision maker, I asked her about the company products on display in the front office. Her face lit up as she described the skin care product line and how the company markets them.
It turns out that Christine was the manager of media operations at the company and knew a great deal about the business and the industry. She told us that the company did most of its marketing through direct response and radio ads. So I offered to connect her with another client of mine that could help her create a free platform to promote the products.
Finally, Christine asked me and my client what we did. When my client told her he provided IT services, she picked up the phone and called the head of the IT department. He came right out, gave us a quick tour of the offices and warehouse, and invited us to sit down in the conference room. The rep and the IT director realized they had grown up in the same town and connected immediately. Before we left, the director asked the rep to put together a proposal.
Not all cold calls turn out this well. But they can be an effective part of your sales strategy. On your next cold call, keep these key points in mind:
1. Never underestimate the person sitting at the front desk. They may have more knowledge or influence than you think.
2. When speaking to the person at reception, always use his or her first name in conversation. It's one of the nicest sounding words they know.
3. Start by asking the receptionist if he or she can help you out. It starts off the conversation on a casual, positive note.
4. Be aware of your surroundings, including pictures, awards, and anything that might get people talking about something they're proud of.
5. If possible, ask for a tour to gain access to other people and places in the company. You may see opportunities to add value.
6. Introduce your prospect to other clients who might use their service. In my experience, that's one of the best ways to build trust and add value.
And this isn't just a one-time exercise--these are the questions you should be asking yourself and your team constantly.
As a serial entrepreneur--I founded digital creative agency Ciplex and more recently the social greeting card company Open Me--I'm constantly striving to improve the businesses I'm leading. I do this by regularly asking myself and my team a slew of questions to fine tune what we're already doing and find ways to add value for the future.
I've narrowed it down to 11 essential questions I always want to be able to answer:
1. Is my business scalable?
The long-term advantages of building a scalable business are greater profitability and growth opportunities. You won't have to spend more money to bring in a lot more revenue.
Start by figuring out the lifetime value of your customers, or the dollar value of a customer relationship projected into the future (here's more on how to do that). This essentially tells you what a customer is worth to your business. When you factor this in with your customer acquisition costs, you can figure out whether your business can scale based on your current products and strategies.
2. What are my visitors, users, and customers worth?
These three audiences vary in terms of their identity. So let's break them down: Visitors are people who frequent your website; a user is a converted visitor that signs up for your website or downloads an app; and a customer is someone who makes a purchase from your business. (You might not necessarily have all three of these segments.)
It's important to understand how much time and resources are necessary to allocate toward each of these three audiences. Visitors, while likely greater in number, yield no revenue as compared to users and customers. Customers make up less of your total audience, but they will yield a greater income. Understanding the return on investment for each of these groups is key to making sure you're allocating time and resources appropriately.
3. Am I acquiring visitors, users, and customers for less than they're worth?
Have you considered your customer acquisition cost lately? At what point do you break even?
Some businesses, like e-commerce sites, convert visitors to customers and completely skip the user phase. Other businesses, like Instagram, transform visitors straight to users, but don't have customers.
4. What can I do to lower my acquisition cost?
It's your duty to look for ways to constantly improve what it costs to acquire users. For instance, your online marketing strategy might involve bidding on expensive, large volume keywords. Instead, consider changing your campaign to a greater number of lower volume, less competitive keywords. You may even consider other tactics like Facebook advertising. There's also retargeting. It's a great way to re-market to the visitor you paid to get there, but didn't convert to a user or customer in the process.
5. How do I increase the value of my customer?
Once you understand the value of your customer, it's important to take steps to increase it. While you aren't able to change the basics of your products or services, you can increase the value of your customer by selling more to them, retaining them longer, and lowering your own costs to serve them.
6. How can I increase conversion rates?
The main step for increasing conversions is to figure out where your users drop off in the conversion funnel--is it on your product description pages, in the check-out process, or somewhere else? Enlist the help of analytics tools like Mixpanel and ClickTale to see how your users behave once they're on your site. You may also want to try using A/B testing through Optimizely to figure out whether your assumptions are correct.
7. What other forms of marketing have you not considered?
Finding the best marketing strategy often involves a lot of trial and error, but it's a smart idea to pay attention to consumer trends.
For instance, consider your mobile marketing efforts. Fifty-six percent of Americans own smartphones. What are you doing to reach them? Make sure your website is mobile-friendly, as well as your email marketing campaigns.
8. Am I innovating?
Sure, you built your business around a solid idea and may have found success. But this doesn't mean you should stop innovating.
Take Blockbuster, for example. As the DVD business declined, Blockbuster neglected to focus on the rise of on-demand viewing. This led the company to lose its spot in the market to companies like RedBox and Netflix, which were more on trend with what customers want now. What can you do to ensure your product or service survives the constantly changing landscape of your market?
9. What are my competitors up to?
Keeping track of what your competitors are up to will keep you afloat. You can stay up to date with their moves with something as simple as creating Google Alerts for them and tracking the latest industry news.
Did a competing company just release an app for their product? It's time to consider what an app could do for yours, as well. Remember, it isn't about doing the same things as your competitors--it's about doing them better.
10. How's my team doing?
If your team isn't thriving, chances are your start-up isn't doing too well either. Make sure they're engaged, motivated, autonomous, and on track with your goals. If they're not, what can you do to remove the obstacles in their way? I've had great success with breaking down company hierarchy and removing set hours so that employees have more freedom to work when they want to.
11. How can I be a better leader?
Your leadership habits directly affect your entire business. It's important to stop to question yourself often. Are you micromanaging? What about struggling to communicate with your team? Self-evaluate and ask partners and employees for regular feedback. Nip these problems in the bud early or you may have bigger problems in the future.
What kinds of questions do you ask yourself and your team?
Advice from corporate communications expert Tom Johnson on hitting it big on the small screen.
Tips on acing a television interview from Tom Johnson, president of corporate communications firm Abernathy MacGregor Group.
1. Plan What You Won’t Say. In addition to preparing your main talking points, decide what is off limits ahead of time. “Don’t feel trapped into giving an answer to a question you didn’t anticipate,” Johnson says.
If you get a question you’re not expecting, find a way to transition back to topics you want to discuss. Use phrases such as “Let’s take a step back for a minute” or “First, let me offer some context” to switch the focus without seeming evasive or rude.
2. Be Concise. Most TV interviews last only two or three minutes, so brevity is key. Boil your messages into compact and memorable sound bites and rehearse them beforehand. It’s a bonus if they are witty, but, above all, they should be clear. “Answers should last the duration of an elevator ride,” Johnson says, “and be memorable enough that people can repeat your key messages once the doors open.”
3. Smile. Chances are you’ll be nervous. “A lot of times, people get frozen because they’re staring into the camera, picturing the thousands of people watching them,” Johnson says. A simple smile can help relax your posture, lower your stress level, and help you engage with the interviewer.
Lee J. Colan explains why it's essential to build your B.E.S.T. team: a group of honest friends ready to critique your leadership moves.
Evernote's Phil Libin began playing piano at age 41. Now, his company is more harmonious, too.
A new intern here recently asked me, "What's the one item that you can't work without?"
Can't is too strong a word, but I did get something a few months ago that is helping my work more than I expected: an acoustic grand piano with a robot crammed into it, the Yamaha Disklavier E3.
Am I a musician? No. Do I know how to play the piano? Not exactly. Do I use the Disklavier at the office? No way. So how does it help me work? Well, here's the thing: It's an acoustic grand piano. With a robot crammed into it.
I spend about an hour a day sitting in front of the piano, teaching myself music theory and trying to play the sad theme from the end of the Incredible Hulk '80s TV series. Trying to learn a big new skill, at the age of 41, is exhausting. And astonishingly brain stretching.
The Disklavier presents a completely new axis of learning. You can play, see your mistakes played back, download lessons and videos, play again. You can feel synapses firing and new connections being made. The best part is being completely stymied by a particular segment, giving up in frustration, and then coming back the next day and playing it through on the first try.
When you learn a new skill, you learn new patterns. And then you start seeing these patterns interwoven into the familiar world. The impenetrable becomes less so. Things you always knew, you now know better.
For instance, many musical pieces follow a common structure: a short preamble to set the stage, followed by a tonal phrase or "tonic," then elaboration of a theme, and finally a return to the tonic at the very end. That return makes the piece feel psychologically complete. It provides a satisfying finish.
I never really grokked this until I started fiddling around on the piano. Now I see it everywhere: in speeches, in magazine articles, in successful software design, in compelling presentations, in a well-planned dinner menu. And now that I see it, I can make use of it. A small increase in my musical ability--from nonexistent to imperceptible--has given me a bigger lever with which to try to move the world.
Plus, I feel the effects at the office. I'm smarter than I was a few months ago, with new ways of seeing things, a new mental vocabulary, and greater cognitive dexterity. I feel more creative than ever, and I get more done every day.
For example, one of our products uses audio tones to send information to nearby mobile phones. We thought, If our software is going to make sound, why shouldn't it be musically correct? So, one day, a bunch of Evernote employees sat around the piano to shape the tones into a pleasing melody. It's a tiny improvement, but we wouldn't have thought of it before. And your life's work is built up one tiny improvement at a time.
My parents are both classical musicians, and my father has been tuning and repairing pianos for the past 30 years, so I grew up completely surrounded by pianos (well, mostly piano parts) and music but never learned to play. My parents tried to teach me but gave up when I was 4. They claim it was because I was surprisingly stern and persuasive about how much I hated piano lessons, even at that age. I claim that they shouldn't have been daunted by a 4-year-old. We digress.
I think everyone can benefit from having something simple and elegant and beautiful occasionally lift the mind out of daily routine, massage and stretch it a little, and then put it back. It could be a favorite pen or a nice view or a crossword puzzle or a well-worn set of juggling clubs.
Or an acoustic grand piano. With a robot crammed into it.
Companies, brands and leaders should stay away from making political commentary whenever possible--especially when not necessary.
There are three topics that should always be avoided in a business setting: politics, sex and religion. When a public official or company leader starts talking about any one of the three, it usually ends badly. Case in point:
Barilla’s Chairman Guido Barilla, the great-grandson of the pasta company's founder, recently made statements on a radio show regarding gay marriage and adoption by gay couples.
Barilla’s statements were translated from his native Italian by Thomson Reuters as:
"I would never do (a commercial) with a homosexual family, not for lack of respect but because we don't agree with them."
An alternate translation, with an important difference in emphasis by towlerod.com, was:
“I would never do an advert with a homosexual family… if the gays don’t like it they can go an eat another brand...”
Both sources agree that he went on to say, "I have no respect for adoption by gay families because this concerns a person who is not able to choose."
In response, gay rights group Equality Italia, in combination with an aggressive social media backlash, has called for a boycott of the Barilla brand. Barilla is one of the best-known pasta brands around the world and one of Italy's number one advertisers.
Guido Barilla chose Facebook as the place to release an apology, and the post has so far received almost 4,000 comments:
With reference to my statements yesterday to the press, I apologize if my words have offended some people.
For clarity I would like to point out that I have the deepest respect for all people, without distinction of any kind.
I have the utmost respect for homosexuals and freedom of expression. I also said, and repeat, that I have respect for marriages between people of the same sex.
Barilla in its advertising has always chosen to represent the family because this is the symbol of hospitality and love for everyone.
Although I wrote a recent article about how companies shouldn’t apologize to their customers, this is not one of those occasions. This situation calls for a public apology--and possibly one of a greater magnitude than a just a Facebook post. However, it is admirable that Barilla made the apology on a forum that would allow customers to openly vent and respond.
Does the Statement Serve the Brand?
Consumers assign the words and actions of those that represent a company, whether it's the founder, CEO or other top executive, to the whole of the company. This fact is especially true when those words come from a person like Barilla whose company bears his name. Company leaders must always consider this fact and be careful when taking a public stance.
The real misstep here is that company leaders shouldn’t be taking stances on political issues at all, unless they somehow impact their company or their bottom line.
For example, Starbucks’ Chairman Howard Schultz recently made a statement asking handgun owners to leave their handguns at home. He was reacting to concerns from customers who were uncomfortable by the presence of armed patrons. This issue has a real likelihood to impact the revenues of Starbucks' stores, so a statement is justified in this situation.
In the case of Barilla, what he said only served to detract from the pasta maker’s brand and enrage their customers. His statements were in no way helpful to the company's position--it certainly didn’t bolster their brand--and they weren’t in reaction to a potential threat caused by a political decision. Better to have withheld an opinion or sidestepped a question that would only offend potential customers and provide no upside.
The good news is that consumers will forgive, but Barilla needs to take some aggressive steps towards correcting this public perception. The course of correction will require an open dialogue and actions from Barilla that reinforce the message of the apology. And it might potentially mean investing in some advertising that represents a different kind of family.
Facing an unpleasant confrontation with a client or co-worker? Here's how to make it constructive rather than destructive.
I'm sure it's happened to you. You walk into a room, answer the phone, or open an email, and you're ambushed by someone who's angry about a real or perceived grievance. It could be a client, a co-worker, a boss, or even a family member.
What do you do?
For most of us, that moment triggers a deep-rooted fight-or-flight instinct. If you're like me--someone who can't easily handle open confrontation--your tendency might be to hang up the phone or get up and walk away. That response, I can tell you, doesn't work great. In my case it led to years of misunderstanding with my sister.
The other instinct--to lash back and defend yourself with equal anger, may be even worse. "What I've done then is to hand the keys of the conversation to the person most likely to run it into a ditch," explains Geoffrey Tumlin, a communications consultant and author of "Stop Talking, Start Communicating." In most conversations, basic human instinct is to mimic or match the other person's communication style and tenor, he says. "So what happens when someone comes at us at an agitation level of 8, 9, or 10--in the danger zone? These forces encourage us to match with our own 8, 9, or 10. We could inflict serious, sometimes fatal, damage to the underlying relationship."
Don't give in to the natural urge to match the other person's aggression with defensiveness or anger of your own, he advises. Here's what to do instead:
1. Use the "neutralizing two-step."
That's Tumlin's term for a bit of conversational aikido that will quickly deflect the other person's hostility. The first step is to apologize for the fact that the other person feels this way. "I'm sorry that this upset you." "I'm sorry we had this misunderstanding." My personal favorite is: "I apologize--I must not have made myself clear." Whatever--the point is that you're sorry about the trouble and that you never intended for the other person to feel unhappy or slighted.
The second step is to engage the other person in finding a solution. "Let's figure out what went wrong and how to set it right." At that point, with everyone slightly calmer, you can dig into the problem and find an explanation. Perhaps someone sent you an email that you never received, or there was a miscommunication of some sort. Once you've defused at least part of the anger, figuring out what to do next should be relatively straightforward.
2. Apologize--but only if appropriate.
Should you offer a real apology and accept blame? Maybe. Apologize only if you've actually done something wrong (or someone who reports to you has), Tumlin says. But this will only work the first or second time a mistake is made. "You can't be a serial apologizer," he says.
You should also apologize if, despite your better judgment, you've said or done something that you wish to take back. If so, do it quickly. "There's a brief period of amnesty after you say or do something stupid," Tumlin says. "At some point that will go away, but people are generally willing to accept timely apologies."
Don't fake apologize, he adds. "We should never apologize for something we didn't do. Let's say the error was all on someone else. I don't recommend apologizing and saying it was your fault."
3. Don't put up with bullying.
The above tactics are appropriate when someone who's normally pleasant is upset over something they think you've done, Tumlin says. They don't make sense with someone who repeatedly berates you.
"If it's a pattern, we're going to have the lunch money conversation: The dude is taking my lunch money and I need my lunch money." These are the only situations where confrontation is a more effective tactic, he says.
In that case, have a one-on-one conversation with this person and call him or her on the behavior. "In the meeting, when you said I was stupid, that hurt my feelings and it's not acceptable. Don't ever do it again," Tumlin says.
The bully may respond with bluster or may just let it go. Either way, he or she will be on notice that the next time the line is crossed, there will be consequences. For instance you may start a confrontation right there in the meeting.
Most of the time, Tumlin notes, you're likely not dealing with a bully, and you should do what you can to stop the conflict from boiling over and doing permanent harm. "Relationships should only end when something is actually wrong and unfixable," he says. "Words should never end relationships--but they do all the time."
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How do you get job candidates to ditch their canned answers and reveal a bit of the real person underneath? Two CEOs offer ideas.
As Jon Steinberg, the President of Buzzfeed recently put it, the interview is really as good as it gets.
"If you are interviewing or negotiating with a new hire, and you like them more and more, you are making a good hire," he writes. "If you are having a difficult hiring process but think it will be great ‘when they person gets on board and this hiring is behind us’ let me assure you: It never gets better. How it is, is how it will be."
Which is something we all understand intuitively. Just like you pick your socks up off the bathroom floor before your date comes over, you make sure you put your best foot forward (whatever you understand that to be) at an interview. Which means, as Steinberg pointed out, that if someone grates during the hiring process, he is really going to really drive you insane as a colleague.
But what if you’re facing the other problem. What if a candidate is too polished? You can tell the person sitting in front of you is an ace interviewer (a good thing, no doubt) because of his or her flawless performance, but you get the distinct impression that this isn’t the whole story. Lurking underneath that highly polished surface, must be a complex, imperfect human who, just like the rest of us, has quirks and weaknesses. You just can’t see them.
It’s one of the trickiest parts of interviewing, and one Adam Bryant, author of the New York Times’ "Corner Office" feature, recently delved into on LinkedIn. In the post he shares advice from some of the CEOs he has interviewed for overcoming this challenge without resorting to questions that are downright bizarre. The first suggestions come from Zappos.com boss Tony Hsieh, who recommends two interview questions:
On a scale of 1 to 10, how weird are you? If you’re a 1, you’re probably a little bit too strait-laced for us. If you’re a 10, you might be too psychotic for us. It’s not so much the number; it’s more seeing how candidates react to a question. Because our whole belief is that everyone is a little weird somehow, so it’s really more just a fun way of saying that we really recognize and celebrate each person’s individuality, and we want their true personalities to shine in the workplace environment, whether it’s with co-workers or when talking with customers.
If you had to name something, what would you say is the biggest misperception that people have of you? Then the follow-up question I usually ask is, 'What’s the difference between misperception and perception?' After all, perception is perception. It's a combination of how self-aware people are and how honest they are. I think if someone is self-aware, then they can always continue to grow. If they're not self-aware, I think it's harder for them to evolve or adapt beyond who they already are.
The third is from Wendy Lea of Get Satisfaction, who shares this favorite interview question:
Let’s assume we’ve worked together now for six months. There’s something that I’m going to observe of you that I have no idea about right now. What would that be? And it could be good or bad. I’ll let them decide. It forces them to clean out their closet a little bit. The human condition is so complex. I’m not a zipped-up girl. I have moods. I have emotion. I need people to show me their own complexity, because if they don’t have any, they may freak out with me. I might hear, 'Well, you might notice I get overwhelmed.' And I’ll say, 'What would be the circumstances that would put you in that state?' This is not a formula, but it does help me understand how self-aware they are.
Intrigued? Check out the complete post which also offers an alternative to the much loathed ‘what are your greatest weaknesses?’ question.
How do you nudge candidates out of their comfort zone?
Consumers, not tech companies, are paving the way for new products, says Eric von Hippel.
Eric von Hippel, founder of the Entrepreneurship Program at MIT, says companies owe their customers a debt of gratitude.
The reason,he said in an interview with the MIT Sloan Management Review, is that "surprisingly often, ideas for new or improved products come first from users who develop improvised versions to serve their own needs. Manufacturers then may discover, polish, and capitalize on user innovations--particularly if those innovations begin to catch on."
Here are three more of his insights on user innovation and why it's integral to businesses' growth:
Users 'hack' for practical reasons.
"Users who need a new product often take pieces of things they have around and put the pieces together to do what they want," says the professor, noting the smart companies are the ones who recognize this behavior and sell products that can be easily tweaked. One good example is Apple's App Store, which has been successful at selling consumer-made apps.
True innovation takes three steps.
Von Hippel says there are three stages to the the "New Innovation Paradigm." In Phase 1, users innovate to create the products they want. In Phase 2, or the adoption phase, other users "either reject or validate the initial innovation." Phase 3 only occurs if users validate the new product, but if they do, "companies, which refine and commercialize the innovation for sale," will find a new base of users.
Companies should encourage innovation.
Companies should think of "ways to attract designs to you, via toolkits or via interfaces," says von Hippel. Threadless, the T-Shirt company whose designs are designed, submitted, and voted on by customers, does this exceptionally well. The company makes millions in revenue and they haven't produced an item they didn't sell.