- My NYPL
Tools and Services
- Using the Library
I am a...
- Classes & Events
- Support the Library
Plenty of entrepreneurs want an investment, and some really need it. But not many deserve it. Do you?
In my last column, we covered the questions you should ask to help determine whether a venture capital or private equity firm is a structural fit for you. The goal is to not waste your time with no-chance meetings.
Now we’re going to back up. Before you approach any potential investor, you need to take a hard look at your own situation.
This sounds basic and self-evident, but it’s not. Often, entrepreneurs have unrealistic expectations about what capital can or should do, or they haven’t accurately assessed the reality of their personality or their business.
Here’s what you need to be asking before you start talking to the money.
Will capital really fix my problems, or just hide them?
As a CEO, one phrase always made me suspicious: “We need more people.” I heard this in every department, from software development to customer support to sales. When I dove into the details, the problems generally weren’t about staffing. The majority of the time there was a process issue, or our strategy was faulty, or our go to market, revenue or business models needed modification.
This catch-all of “we need more [insert resource here]” is most common in rapid growth businesses where great entry-level workers are rapidly promoted to managers. These folks get their early successes by working harder. Rapidly growing companies, however, cannot solve problems by merely applying more effort in the same ways. As my home economics teacher said about baking, “You can’t just triple the recipe ingredients.”
For example, my company had great success with our first software product. With so many enterprise customers signing up, our customer satisfaction was going down. Our team continued to push on the front-end software they had worked on for years. The real problem, however, was our backend system integration--it was stretching from eight to 12 to 16 weeks.
We could easily have raised money at that point to just add more developers, but it wouldn’t have solved our problem. We needed to change our technology and processes to get the implementation time down. I moved people around and made the front-end enhancements a low priority. Within a year we were down to two-week installation times, and our customer satisfaction was through the roof. We re-deployed our people and didn’t have to raise money after all.
Figuring out whether capital is really the solution--or merely a stopgap--is a challenge for growth company CEOs. It’s hard to look at the product of your blood sweat and tears and say “Hey, money’s not the issue. We were wrong, or need to get better, in these areas, and we need to take the pain to fix this underlying problem.”
Do I need capital, or do I just want it really badly?
I used to see press releases blaring “Company Snags Millions from Investors,” and think two contradictory things. I would cheer “That’s awesome, someone believes in that idea so much that they’re investing millions!” But I would also cringe, because I felt like management was announcing “Hey, look at us, we can’t run this business profitably! Yay!”
The issue of need versus want is a complicated business issue (and yes, I find it a challenging topic with my kids as well). My definition for “need” is, “Without external capital my company will shut its doors within a quarter.” Every other justification is a “want.” Competition catching up, not enough sales or marketing muscle, a product in need of upgrade--these are all really good reasons for totally rational wants, but they are not needs.
In my first business I gave up majority control in my very first round. We had four newly contracted enterprise corporate customers but were five days from being out of money. I was a 28 year-old doctor $200,000 in debt with no business experience. These investors were the only ones out of more than 300 who I’d pitched over 18 months who would give me $5 million. This was the only way “right now” for me to keep the dream alive. That was a need, so I gave up a lot.
Typically, the need versus want questions are more nuanced.
Is the opportunity as big as I believe? Do I believe in it enough to sell a piece of my company so my part will be worth very little unless the company becomes huge?
Will the customers really come if I spend on sales people? Do I believe it enough to take on debt payments that will crush my company if those sales don’t materialize right away?
Do I think my team and I can execute on the opportunity? Do I believe this enough to post a personal guarantee on a bank loan that will bankrupt me if we don’t?
Most critically, do I want capital badly enough to answer to people not in the foxhole with me? Whether it’s equity or debt or friends and family, everyone will want something and think they know better, but won’t really understand. This is not a small issue. Being a CEO is risky and high-pressured enough without the burden of managing people outside the business.
Need versus want, how bad you want it, and how much you believe it, determines what you’re willing to give up. What you’re willing to give up, more than anything, will determine if and what type of capital is right for you.
Do I deserve capital?
As an entrepreneur involved in fundraising--from the garage all the way to a $50 million recapitalization--I’ve believed that my company deserved capital. Great ideas, smart people, hard work, real product for a real problem. What else is there?
Later on, having been on the other side of even more such transactions, I have become more, shall we say, balanced, in how I assess what deserves capital.
I have a pretty simple threshold for deserving capital: If I were on the side deciding whether to put capital into my business, would I take a meaningful amount of my parents’ money and put it into this deal?
The reason I have this threshold is because it forces me to think really hard from the perspective of the person providing the capital. When I think of my parents in that role, I am much more realistic about the risk, opportunity, deal structure, timing, and every other assumption. I frankly end up holding the deal to a higher standard than I would if I were looking at investing my own money.
For example, I deserved some capital with that first business. I had a product, I had paying customers, I had one really out-of-the-park-homerun installation. But did I deserve $5 million? Probably not. I often tell people that if 28-year-old me pitched 41-year-old me” with that same deal, I probably wouldn’t have funded it.
For example, right now I’m looking at a business that has been self-funded to $9 million in revenue and will probably do $17 million next year. It’s all recurring revenue, with 10% EBITDA. They’ve exhausted the hodge-podge of angel equity vehicles and personally guaranteed debt, their operations are way more mature and sophisticated than is typical at that size, and they have an expanding market with the wind at their backs. They’ve borne the huge risk in the early stages and proven they can run the business. It’s a real opportunity. They want (but don’t need) $5 million, and they really deserve it.
Look at your business honestly. If you deserve capital, find the right type of capital and don’t stop until you get it. If you don’t deserve capital, make a Plan B to get to a point where you do deserve it. Reduce the risk for the other side. Show that you’re pursuing the opportunity because it’s desirable and the time is right, not just because you’re in too deep on a bad bet.
These are the questions you have to ask yourself before you seek capital. In my next column, I’ll talk about the types of capital that might be appropriate and realistic for your business.
When your team starts to drop the ball, these questions will help you effectively troubleshoot and find solutions.
Is your team in a slump? Just like a major league slugger, your team's batting average can hit a rough streak. When this happens, the key is to avoid reflexively solving symptoms and instead focus on the deeper problem. Here are four types of questions you should ask to figure out what's really standing in the way of a victory.
Goals: Does your team have a clearly stated and common goal? Have the team members bought into it? Do your employees see a direct connection between their daily tasks and the team goal?
Roles: Are the team's roles defined and documented? Are expectations consistent? Is the level of authority for each role clear? Do your employees embrace their roles? Does each team member have the necessary skills to effectively perform?
Procedures: Are there clearly defined, documented and communicated processes on how the team makes decisions, shares information, coordinates hand-offs, reviews work, challenges prevailing thought, prioritizes work, and resolves conflict?
Relationships: Is there a reasonable amount of (job-related) respect amongst team members? Do team members know and appreciate the different knowledge, skills and perspectives that each brings? Do they trust each other?
Solve the Problem, Not the Symptoms
You may find that a lack of clarity in one of the top three levels (goals, roles, procedures) opens the door for misperceptions that can lead to interpersonal conflict. For example, if team members do not agree on or understand your common goal, they might start accusing each other of having personal agendas. Or if team roles are not clearly defined, one person might think another dropped the ball.
Your first reflex might be to directly address interpersonal issues, but this should come last. First, make sure you're defining clear goals, roles and procedures. This will eliminate 90+ percent of what appear to be interpersonal conflicts.
So, the next time your team is getting bogged down, ask these questions, starting at the top with goals, to assess the root cause and pull your team out of its slump.
Download free book chapters from the author's book Stick with It: Mastering the Art of Adherence for more tips on leadership and teamwork.
When things get stale, it's easier to make dumb mistakes. Don't let it happen to you.
Dear Norm, I was interested in your response to the restaurateur who had become bored with his core business right when he acquired the mastery necessary to use it as a platform to build a much larger company. As a result, he went to the “new, new thing” too soon and ran into trouble. I completely identify with him. What should we entrepreneurs do when we get bored with the successful business we’re in the midst of building?
--Michael Spraggins, owner, Spraggins Inc., Orlando
As I’ve noted, boredom is an occupational hazard for entrepreneurs. We tend to be a restless lot and need constant stimulation.
Boredom becomes problematic when it leads to bad decisions. But even then, mistakes can teach us quite a bit about who we are and what we want. That kind of self-knowledge is crucial to having a long and successful business career.
Michael Spraggins, the author of the question above, is a classic example. His company distributes and installs products such as cabinets, countertops, and flooring to homebuilders and apartment developers. He took the company over from his father about 20 years ago, when it was 10 years old and had 14 employees. Today, it has 65 employees, does $20 million in sales annually, and is growing rapidly.
His boredom problem surfaced about 15 years ago. By then, he’d figured out the business and was itching for new challenges. He proceeded to open several locations and launch two businesses. After losing a lot of money and creating a lot of chaos, he realized his mistake in trying to grow too fast and do too much. Fortunately, he pulled back before the damage became irreversible. In hindsight, he realized it was boredom that had gotten him into trouble. He wanted me to suggest what he should have done differently.
That’s very hard to say, if only because Michael learned a tremendous amount about himself and the business from the experience. For example, he realized that he’s a “new thing guy,” as he calls it, who likes to innovate and launch ventures but then needs to put other people in charge. “I think of myself as kind of a strategist-coach, not really a team leader,” he says.
With that new bit of self-knowledge, he decided to hire a president to run his main business full time. When he later founded a not-for-profit that franchises clinics and hospitals in Africa, he hired a full-time executive director to run the show. Michael spends about a third of his time on the not-for-profit. “It runs really well and is growing like crazy,” he told me. He says the same about the for-profit business.
In fact, I was struck by how happy Michael seems to be. He’s married with three kids and says he has all the time and money he needs. The recession was brutal to his business, as it was to all construction-related businesses, but his company has bounced back and is well on its way to recovering.
Would Michael be in such great shape if he hadn’t gone through that period of disastrous overexpansion? I don’t think so. Some of us need to get whacked in the head before we can discover deeper truths about ourselves and make the necessary adjustments. If we’re lucky, we learn more constructive ways to deal with boredom and maybe even ways to avoid getting bored in the first place. I needed to pass through the dark night of Chapter 11 to see the light. From that perspective, I’d say Michael got off easy.
Just another day of virulent criticism for the cloud-based TV service as it announces launches in four more cities.
A stream of profane tweets directed at the CEO of cloud-based TV company Aereo Monday alleged that the company hacked a competitor's site. One, from the account of FilmOn founder Alki David, read: "What you are doing is like breaking into someone's home and smashing their shit up. Fortunately [you] lame f---, my geeks are smarter."
A day later, Chet Kanojia, the target of the tweets, seemed unfazed. At a Goldman Sachs conference in New York, he took the stage to announce that his company is opening early access to Aereo's service in four more cities: Cincinnati; Columbus, Ohio; Indianapolis; and San Antonio. Aereo service, which for a monthly fee provides TV streaming on Internet-enabled devices, is already available in seven cities, and the company has plans for hyper growth: another 22 U.S. metropolitan areas are targeted this year. Aereo has expanded its user base tenfold over the past quarter, Kanojia said, though he was vague about precise user numbers. The general expansion strategy? "Just knocking these cities out,” he said.
Aereo didn't respond to a request for a comment regarding David's allegations.
Aereo is used to defending itself from more than just angry tweets--it has been under assault from Day 1. Aereo doesn't pay for its programming; it pulls in network broadcasts through its antennas, then relays them to Aereo subscribers. The originators of the programming don't like that a bit, but Aereo won a crucial victory last April in the United States Second Circuit Court of Appeals. The court ruled that Aereo's system of broadcasting does not infringe on the broadcaster's copyrights. (It's complicated, but the crucial factor is that Aereo maintains an individual antenna for each subscriber and hence provides each subscriber a private, rather than public, broadcast.)
The accusatory tweets from earlier this week have since been deleted, but were confirmed to the Verge by David, who also explained his aggressions. Reporter Greg Sandoval writes:The acrimony comes at a time when legal analysts were expecting an alliance between FilmOn and Aereo, since they face a common foe. The country's top broadcasting companies have filed multiple copyright lawsuits against each company in different courts around the country. Aereo, the better known of the two companies, and FilmOn are said to use similar technology to capture over-the-air TV broadcasts and distribute live programming to customers through the web.
While UK-based FilmOn has a billionaire owner, in Aereo's corner is $63 million in venture backing, including investment from IAC, whose chairman is Barry Diller. We'll certainly remain tuned in as Aereo turns on in dozens of major markets across the country this year.
A professor told Wendy Kopp she was "deranged" to think she could raise $2.5 million to start Teach for America, but she went for it anyway.
A leading expert explains the most common content marketing mistakes he's observed and how to avoid them.
As content marketing continues to move past the early-adoption phase, I am noticing more and more companies start to take it seriously. But there are many common missteps.
To better understand what not to do, I spoke to Joe Pulizzi, founder of Inc. 500 company the Content Marketing Institute and the author of the new book Epic Content Marketing. Joe literally wrote the book on content marketing.
Here are the most common mistakes Joe told me marketers make when they do content marketing--and how to steer clear of them:
1. They have no subscription strategy.
Joe told me about the CMO of a large company, who described to him an online content program it was advertising and posting throughout social media. Though the company is producing a lot of content every quarter or so, it isn't simultaneously including a way to get readers to subscribe to it.
Sure, the content has gotten millions of people to come to the company's web site--and, yes, that now has more fans than the company's Facebook page. But it has zero subscribers. Just think about the hundreds of thousands of "content fans" it could have recruited if it had enabled those people to subscribe? If it had, the company could have, say, started to recognize what distinguishes subscribers from nonsubscribers. (Do they buy more? Are they prospects or customers? Are they stay as customers longer?)
2. They fail to inspire brand evangelists.
Joe told me about John Adams, who has been pounding a drum at the Cleveland Indians' home games since 1973, making him, perhaps, the greatest Cleveland Indians fan around. The Cleveland Indians marketing department has been working with John for years to help him publicize his story. Not only do they produce content about John on the team's website on a regular basis, they take him along on radio show interviews and help him get featured in Cleveland's newspaper, The Plain Dealer. John Adams is an inspiration to other Indians fans--and the Indians like foster his loyalty and influence.
But it would be even more powerful if the Indians invited other fans to also submit their own articles, videos, and infographics, and otherwise tell their own stories in support of the team?
3. They still keep their content creators in silos.
Public relations, email marketing, search engine optimization, social media--every one of these groups in an organization, even a small one, has someone in charge of putting the content plan together. Unfortunately in many cases, these people aren't communicating with each other. The result? Stories that don't make sense to customers, and a lot of duplicated efforts.
Joe says that SAS, the largest private tech company in North America, had a similar problem. So each of its teams designated a "content ambassador" to be accountable for that group's efforts. The ambassadors meet on a weekly basis to review its content marketing mission, and work together more productively.
4. They place traditional marketers in content roles.
Content marketing is, in most cases, better suited to the skill sets of traditional publishers than traditional marketers because publishers more fully understand how to develop engaging content and make sure it meets revenue objectives. In media companies, if content isn't driving sales, it's failing to do its job. Joe acknowledges that traditional marketers don't recognize this about content marketing.
5. They overlook internal marketing goals.
In every one of his 13 books to date, Don Schultz, the father of integrated marketing, writes about the importance of putting internal--rather than external--marketing first. But, in what may be the single greatest content marketing sin companies commit, many such programs are still launched without any knowledge or input from the sales team (or other employees).
Before your next launch, gather input from all your employees, and make sure that they are as involved as possible in your content creation program from the outset. As an example, Kelly Services, a human resources outsourcing firm, asked sales execs to submit ongoing content through their own LinkedIn accounts.
6. They miss out on opportunities to partner with traditional media.
There has never been a time where traditional media companies have been more open to content partnerships with brands than right now. This goes beyond native advertising programs, and into co-creation projects as well. If you're not talking to the leading media outlets in your niche about ways you can help each other, you are missing out on clever chances to cooperatively reach, interact with, and build relationships with interested consumers.
All these content marketing mistakes can be avoided, and you can build an effective content marketing program for your business, whatever the size to drive leads, build buzz--and generate revenue.
Now it's your turn. What kind of content marketing are you doing for your company?
The 11-year-old discovery engine is betting its video strategy on Canadian start-up, 5by.
5by, founded in 2012, bills itself as "curated, free and awesome." Its service is designed to suggest videos you'll like based on previous choices and reactions, somewhat like the thumbs up or down options in Pandora.
StumbleUpon CEO Mark Bartels explained the deal to TechCrunch as “a directional bet on mobile and video" as the future of both advertising and web content consumption. The entire six-person team will continue to develop 5by as a standalone product, though they'll now be working from StumbleUpon's San Francisco office rather than their current location in Montreal.
StumbleUpon, which was founded in 2001, announced last week that it expects to grow revenue between $35 and 40 million this year. This is the company's first acquisition.
Private-company revenue is shrinking, but company owners are operating more efficiently, says a new report.
Small businesses are often the canaries in the coalmine, serving as a bellwether for larger economic trends. So brace yourselves for a gloomy report. The most recent data released by Sageworks on Monday shows that while small business sales are still growing, they are growing at a dramatically lower rate than last year.
"Companies haven't been eager to take on new employees and extra overhead, even when they were seeing double digit sales growth," Brian Hamilton, chairman of Sageworks, said in a statement. He added that the news is especially troubling because the recovery is also approaching the end of the average length of U.S. expansion, which usually lasts between three and four years.
Sales Rose, But Less Than Before
For all private companies, revenue grew at a rate of 3.8 percent in the eight months leading up to and including August 31, 2013, compared to 9.4 percent for the same period a year ago, and 9.9 percent for the period in 2011.
It's also taking longer for private companies to get paid, with payment cycles increasing by nearly a week to net 46 days this year, compared to the prior two years.
Immediately after the recession, in late 2009, private companies profited from pent-up demand, which drove sales growth. That growth perhaps seemed stronger than it was because it was compared to a smaller baseline, Libby Bierman, an analyst with Sageworks said in an email.
The Hardest-Hit Industries
The sectors hardest hit were manufacturing, wholesale, and retail. Sales for manufacturers increased 2.3 percent in the eight-month period, a decrease of more than 10 percentage points from the same timeframe a year ago, and down nearly 13 points compared to the same eight months in 2011.
Similarly, sales for wholesalers were nearly sliced in half to 4 percent, compared to the same eight months a year ago, and down more than nine percentage points for the period in 2011.
Retailers fared worse, eking out revenue increases of less than 1 percent, a decrease of more than six percentage points from the year earlier period, and down nine percentage points in 2011.
By comparison, construction fared better. Sales fell nearly six percentage points to 7.7 percent year over year, and they were down only about 2 percentage points from 2011.
Sales Growth Declines, But Cost Cuts Improve Net Margins
Over the past three to four years, companies have improved their operational efficiencies. Small firms show a net margin--a good indicator of non-production costs--of 9.1 percent for the current period. That's nearly double what it was in 2011, and up nearly three percentage points compared to the same eight months a year ago.
"The momentum in growth has started to subside, as private companies are focusing on improving their net margins," Bierman says.
Sageworks, a provider of private company information, analyzes the financial statements of more than 1,000 private companies every day. Its current quarterly report, which was released yesterday, examines data for the eight months leading up to and including August 31, 2013. Sageworks recently reformulated its monthly small business survey to be released during each of the four quarters.
Resumes are all but pointless, says the Virgin Group founder who hires for cultural fit.
Sir Richard Branson, billionaire and founder of The Virgin Group, doesn't hire people for their skills and qualifications. He hires them for cultural fit with one of his 400 companies.
Branson suggests leaders draw out a candidate's personality during an interview, and look for someone who's not only a good fit with the company but versatile.
"Find people with transferable skills--you need team players who can pitch in and try their hand at all sorts of different jobs," he writes on LinkedIn. "While specialists are sometimes necessary, versatility should not be underestimated."
Of course, a candidate's qualifications and experience should not blind employers to a toxic personality. "If you hire the wrong person at the top of a company, they can destroy it in no time at all," Branson warns.
For more advice from the legend himself, check out Inc.'s video series, Sir Richard Up Close.
Smule, the company behind such hit apps as I Am T-Pain and Ocarina, shares some tips for building a lasting relationship with users.
“We’re making music creation more accessible for people who haven’t spent five years at Juilliard,” says Jeff Smith, co-founder and CEO of Smule, a mobile-app maker that lets people create and share music with others via their smartphones. Ocarina, one of Smule’s most popular apps, allows users to play a smartphone like a flute by blowing into the microphone. It has been downloaded more than 10.2 million times.
I Am T-Pain, an app that Auto-Tunes a user’s voice in the style of the eponymous rapper, has more than seven million downloads. Smith started San Francisco-based Smule in 2008 with Ge Wang, his music professor at Stanford University. With a three-year growth rate of 645 percent and $10.9 million in revenue in 2012, Smule earned the No. 708 spot on the 2013 Inc. 5000. Below, Smith shares his tips for keeping customers coming back, even in a market in which users are always on the lookout for the Next Big Thing.
1. Invest in Community
Smule users come for the apps, but they stay for the community the company has fostered. Half of Smule’s research and development budget goes to building a social network in which its core users can interact. A user of Smule’s guitar app in India, for example, can accompany a Smule karaoke singer in the U.S. “The apps are a conduit onto the network,” says Smith. “Once users connect to the network, they really experience the whole Smule.”
2. Trust Your Gut
Smith is an advocate of using data analysis to understand user behavior-;the company tracks more than two billion data points a month across all its products--but he says that sometimes you just have to
trust your instincts-;especially when launching products. “If you concede up front that you don’t know it all, it opens up a whole world of possibilities, because you can try anything,” he says. “Who knew that Ocarina or I Am T-Pain would be a hit? Those concepts were unprecedented.”
3. Make it cool
With roughly 900,000 apps in Apple’s App Store alone, the competition for an app buyer’s
attention is fierce. Smith credits word of mouth for Smule’s ability to attract new users. A big key to that has been the company’s knack for creating fun products that people are eager to show to their friends. “Ocarina is still selling well after five years on the market because it’s a fantastic demo,” he says. “It’s one of those products that is accessible right out of the gate.”
4. Don’t overcommit
To avoid spreading its resources too thin, Smule now introduces only one or two new apps a year. That has allowed the company to focus on expanding its existing offerings to the Android operating system and building international sales. Smith has also learned the importance of killing products that aren’t generating good growth. One example, a virtual-firecracker app called Sonic Boom that Smith describes as “one of our more spectacular failures,” was pulled off the market six months after launch.
Coming up with new ideas is easy. Getting them implemented is the hard part.
There is one truism in organizational life: inertia dominates. Your ideas, no matter how brilliant, will always face a certain amount of resistance. That’s not an evaluative statement. That’s a fact. If you want to be a champion for innovation, you have to develop specific skills that will help you overcome inevitable organizational opposition. Yes, even if that opposition comes exclusively from people you yourself have hired.
You have to learn how to be politically competent (yes, political!) and learn how and when to champion an idea.
As a leader or entrepreneur, it’s no easy task to champion ideas. There will be plenty of pushback, silo’d thinking, and obstacles in your way. Here are the micro-political skills you need to be a champion of new, innovative ideas.
1. Develop a sense of timing
Selecting the timing for publically backing a new idea is important. Once you make a formal announcement or offer the slightest hint of endorsement, there is no backing down. You can’t hold up your hands in the face of resistance and say you were joking. That’s not good leadership.
You must make sure you don’t bring your ideas to the table until they are cooked, especially if you’re not sure whether your idea is something you’re going to pursue all the way. A surefire way to ruin your credibility is to be labeled as someone who doesn’t follow through.
Perfectionism is one of your chief enemies here. This is especially true in areas such as product development. While you’re working to perfect your prototype, your competitor may be preparing to go to market. Think your idea through fully, be certain that you are ready to launch your campaign, but don’t keep waiting for the ideal time. There may never be one.
2. Know your allies and resistors
In organizations, as in politics, having a small group of committed supporters is essential. Your challenge is to find this key group, expand it, and supply it with limited time and resources. While allies are core supporters who love your new idea, there is no guarantee they’ll stay on board. Resistors may fight your new proposal, but with the right trade-offs they may turn into your strongest supporters. An innovation champion conducts a daily poll as to who is in their corner and works persistently to maintain and preserve their coalition.
3. Establish your credibility
The depressing reality is that a lot of fine ideas get squashed in organizations because the person pitching the ideas lacks the credibility to be a successful sponsor. As a pragmatic leader, you have to be credible. Others have to believe that you can get the job done. You just can’t say, “Hey, I’m the guy for the job.”
You have to be smart and establish your expertise, show that there is an opportunity for action, lean on your positional authority, and demonstrate your integrity. If you fire on these four cylinders, others will believe you can deliver.
4. Know the arguments against your idea
Aristotle once said, “Criticism is something we can avoid easily by saying nothing, doing nothing, and being nothing.” Without disrespect to Aristotle, avoiding action isn’t necessarily a guard against criticism. In fact, you likely will be criticized for not taking action. Criticism is one of the realities of leadership, and there is nothing to do but accept it. Instead of letting critics take you by surprise, learn to anticipate what they are going to say, and respond to criticism without losing your head.
Before pitching an idea think of all the possible arguments of resistance and prepare rebuttals, even for arguments you think are outlandish. You have to be prepared.
5. Justify your idea
You have your idea and you know there is a need for action. You have to get others to go along with you to make your idea a reality. How do you sell your idea? How do you frame your idea in a way that makes people want to come on board?
There are four approaches you can take:
- Use analytics, numbers, and projections to back your arguments.
- Say that your competitors are adopting ideas like yours, and that your company needs to stay ahead of the curve.
- Argue that people expect it of you or your team.
- Indicate that regulations or future protocols will demand the acceptance of your idea.
Even as an entrepreneur or CEO, you can't simply introduce an idea and expect people to buy in right away. You might convince your employees, but then they'll need some good arguments to get your clients to go along. Use these five steps as a springboard to help get the most out of innovative ideas.
For years, app developers have assumed that building for Apple first was a smart strategy. But maybe that's not the case after all.
Until recently, mobile app developers have generally thought that if you wanted to make money, you'd bring your product to the iPhone and iPad on Apple's operating system. That's where the money was, according to Steve Jobs and then Tim Cook, who would talk about the billions paid to app developers. After all, when's the last time you heard Eric Schmidt or Larry Page brag about the amount of money they paid to Android developers?
But even a few years ago there were signs that a default to Apple might not be the best choice for all developers. Today, there are increasing signs that software entrepreneurs might be wise to rethink their strategies, as developer Will Whitney writes. According to Whitney, there are some significant reasons why a developer might start to focus more on Android than on iOS.
Punitive Development Cycle
Apple has always been controlling of its app ecosystem since it first started, but the grip has become tighter to the detriment of many developers. Creating and releasing any iOS app means going through Apple's bureaucracy, because you can only provide apps through the Apple App Store. Rather than be able to use the modern process of incrementally improving software through multiple releases, developers are effectively forced to create a fairly complete version of an app before learning whether they're even doing something that the public will find of interest, let alone how user demands will influence the software's design. The contrast is Google's Android, in which developers can quickly bring software to market, see what needs to be changed, and then fix it.
Android Is a More Needy Market
There are hundreds of thousands of apps on mobile platforms--enough to create app overload. The number of new apps is so large that few people have the time to wade through them, especially as they already have their favorites. Although the number of apps grows, the amount of time that people spend with them apparently doesn't, the New York Times recently reported. To get anywhere, you have to get attention. Whitney argues that standing out is much easier on Android because they are "starved for beautiful apps." Provide good design with great functionality and chances are better that you can get attention from the press and users.
iPhone No Longer Has an Advantage
The smartphone market--or about 80 percent of it globally--belongs to Android devices. The days of Apple having the bulk of users are gone. The basic capabilities of both platforms are roughly equivalent, and some people are arguing that Android has become the superior one.
Is the Real Answer Neither?
But the bigger question is whether entrepreneurs can make money on mobile apps. Apple has reportedly been better at passing dollars on to app developers, and yet, on the average, an app will gross just under $18,000, not including any costs. That's average. Look at how heavily downloads are weighted toward a relative handful of apps and the amount that most apps really make is fairly insignificant. Maybe the question isn't so much about iOS versus Android, but how difficult it will be to build a business on making and selling mobile apps.
Esther Dyson talks about retiring on Mars and the problems that come with an excess of start-ups.
Esther Dyson discusses her current investments in the health technology industry and what she sees for the future.
The angel investor talks to Inc.'s Christine Lagorio-Chafkin about her investment decisions and why she can't stand redundancy.
Esther Dyson answers questions about her investments, the power of technology, redundancy and competition, and the evolution of start-ups.
The inefficiencies she saw in Russia and Eastern Europe helped inspire Esther Dyson to start investing.
Esther Dyson predicts that individuals tracking health data will ultimately change consumer and corporate behavior.
A number of changes are making Mexican companies more attractive to U.S. investors.
Most U.S. investors analyze and research companies located in the U.S., the Far East, and Europe. However, the nation just across the southern border is the rising star of mergers and acquisitions. The Mexican economy is growing, and investors worldwide are beginning to pay attention.
A front-page headline in the August 13th edition of The Wall Street Journal announced that Mexico is overhauling its oil industry and would end the country’s 75-year monopoly on oil and gas production. This would open up one some of the world’s largest untapped oil reserves to private companies, setting the stage for a Mexican energy boom.
Eighty-nine of the world’s top 100 auto parts makers are already in Mexico. From appliance manufacturers to high-tech start-ups, Mexican business is booming. When business is booming, mergers and acquisitions aren’t far behind.
Why are Mexican companies attractive to U.S. investors? There are seven reasons Mexico may be the next mergers and acquisitions hot spot.
1. Market availability and size
Mexico has free trade agreements with 44 countries. That is more than the U.S. and China combined. The North American Free Trade Agreement provides Mexico easy access to the world’s largest market, the U.S. and Canada.
According to FDI Markets, in 2012 Mexico attracted 21.84% of foreign direct investments in Latin America and the Caribbean, with 244 projects. The only country to attract more, as in 2011, was Brazil, which attracted 38.68% of foreign direct investment.
In addition to an ideal worldwide market, Mexico is the second largest Latin American economy after Brazil, with a population 118 million. Mexican companies have the markets needed to drive sales.
2. Fewer rules and regulations
According to the World Bank, Mexico ranks 36th in ease of starting a business. While rules and regulations are important, they cannot stifle innovation and growth. Mexico encourages entrepreneurs to create new companies and makes it easier for those companies to excel and grow. The overwhelming regulations businesses face in the U.S. make investing in Mexican companies very attractive.
Everyone believes China is the least expensive country for manufacturing. Yet China’s manufacturing labor costs overtook Mexico’s last year because of China’s high rates of wage inflation and its significantly higher energy costs. Labor costs in Mexico are very attractive when compared to others worldwide.
Projected future labor costs are just one reason U.S. investors are looking at Mexican companies for potential purchase or investment. Investors want a high-quality labor force, at the lowest possible cost, to maximize profits. The quality of Mexican manufacturers has made huge strides in recent years, evidenced by the number of major American companies moving manufacturing facilities to Mexico.
The key to any successful business has always been location, location, location! With the largest market in the free world located just across the border, Mexican companies have a distinct advantage over companies located in the Far East or Europe. Mexico also has easy access to growing markets in South America and can easily ship to Europe or Eastern markets.
5. Lower energy costs
Another critical factor is the cost of energy. The cost of energy in Mexico is equal to or less than the cost in the U.S. China pays 50 percent to 170 percent more for natural gas than Mexican companies. While electricity in the U.S. is less expensive than it is in Mexico, electricity in Mexico is still less expensive than it is in China and significantly less than other countries.
Should the Mexican government open up the national oil and gas fields to allow international development, the investment in Mexican-based energy companies will soar, and energy costs could decrease as supplies increase.
Building solid, successful companies requires access to well-educated, skilled talent. Mexico has some of the best universities in Latin America, and their manufacturing and production talent is gaining worldwide recognition for being proficient and affordable. Mexican institutions of higher education serve over 2.5 million students, which is about 30% of the university-age population, and the government hopes to expand this to 50% by 2020.
With well-educated leaders and skilled employees, Mexican companies, across many industries, are attractive acquisition targets for U.S. investors.
The Mexican economy has been slowly improving over the last five years, while many other economies have stagnated. According to the World Bank, Mexico has huge potential for accelerating economic growth. The country maintained strong economic growth of 3.9% during 2012. This has been supported by both external and internal demand, with a firmer expansion in services. Gross domestic product is expected to grow 3.5% during 2013 with even stronger growth predicted for 2014.
This steady growth has attracted worldwide interest in Mexico on the part of investors. Both domestic and international investments are increasing in Mexican companies.
Mexico is well-known for its beautiful beaches, exotic resorts and tourism. Thanks to its business advantages, Mexico is rapidly becoming a place where investors look for opportunities beyond pretty sunsets.
Top entrepreneurs on what to ask and why.
1. What’s the biggest misperception people have of you? -Tony Hsieh, Zappos
Why I ask it: “It’s interesting to see how self-aware candidates are.”
2. How do you unplug? -Arianna Huffington, The Huffington Post
Why I ask it: “People are eager to show employers how they’ll work themselves to the bone. That’s not
good for them or the company.”
3. What’s most important to you in your work? -Evan Williams, Twitter
Why I ask it: “It gets to the point of what I want to know, beyond skills and experience.”
4. Why wouldn’t I hire you? -Bobbi Brown, Bobbi Brown Cosmetics
Why I ask it: “You get the most honest answers--because it’s not a question people anticipate being asked.”
5. Describe a recent project and how you could have done it 10 times better. -Aaron Levie, Box
Why I ask it: “We want people who can always think bigger.”
6. What have your parents taught you? -Jason Goldberg, Fab
Why I ask it: “It gets to the core of people and what makes them tick.”