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When Discovery started to show a profit, John Hendricks had to decide whether to go public or stay private in order to invest in a global strategy.
The secret to facing rejection is making yourself an expert in your field and understanding the advantage of being an outsider.
John Hendricks answers questions about business setbacks, finding balance and the biggest challenges for entrepreneurs.
Lewis Schiff interviews the founder of Discovery Communications about innovation, entrepreneurship and his new book, A Curious Discovery.
John Hendricks talks about the importance of internal referrals and the challenges he's faced in business.
John Hendricks talks about avoiding 'brand drift' while growing into an international, multi-channel business.
John Hendricks answers questions about monetizing content online and the possibility of applying a 'magazine strategy' to television.
Growing up, the founder of the Discovery Channel saw television as a way to connect and ultimately improve the world.
You can't just blog and pray that readers will come in droves. Here's how you should be thinking about your company's blog content.
I can't count how many times I've been told to “just create great content and website traffic will follow,” as if somehow the invisible hand of Tim Berners-Lee will take care of the rest.
Inspired by examples of home-run viral content, content marketers are developing great content only to see it stall when launched on their company blog. I refer to this strategy as “Blog and Pray,” which is the process of creating great content and then waiting (or praying) to be discovered.
This strategy might work somewhere in the land of unicorns and rainbows, but it hinders results in the ROI-driven reality of digital marketing. Successful content marketers know that great content is just the pre-requisite to success--it’s the combination of great content and trusted third-party references that consistently drive market attention for your brand.
Great content for prospects and publishers
Developing highly targeted and valuable content isn’t a new element of the Blog and Pray strategy. However, it is important to understand that great content must not only be relevant to your target audience, but also to the third-party publications where you want your content to be recognized.
Understand which topics are trending on these third-party websites. Integrate these topics into your content to make sure that it will resonate with your target audience as well as the third-party publisher.
Content discovery via trusted publishers
Where does your target audience hang out online? Which online sources are most trusted in your industry? These are the publishers you need to target when driving discovery of your content.
Relevant and authoritative online publishers are key to the success of your content marketing efforts. They are the most efficient channel for reaching your target audience while adding a natural endorsement that drives trust and authority for your brand. This authority is what "raises the ship" for your brand across a multitude relevant keywords in organic search results.
Distill the main value points from your content and develop an original article for these publishers. Remember: compelling and relevant content gets published! It also doesn't hurt to build a network of trusted publishers that love your content for subsequent projects.
Putting it all together
Great content and a targeted promotional effort is the winning combo in content marketing known as earned media marketing. Putting a ton of effort into content marketing that doesn't drive market attention is demoralizing work. Create something great and drive the market attention that your content deserves with earned media.
To learn more about how to drive attention to your content, download our free Guide to Earned Media today.
A truly great boss is both a touchstone and a role model.
Over the years, I've skimmed hundreds of corporate "mission statements."
They usually consist of vague business jargon that is meant to inspire but which really don't mean much, like "We offer superlative customer service."
In most companies, if you privately ask an average employee what he or she thinks of the corporate mission statement, you'll probably get either a blank stare or a muffled snigger.
That's because mission statements tell but don't show.
The same thing is true everywhere in every organization. Regardless of how managers tell employees to behave, they'll actually do whatever management shows them is the most advantageous way to behave.
If a boss tells employees that hard work will be rewarded but then gives the biggest raises and the best perks to butt-kissing toadies, employees will either leave or hone their butt-kissing skills.
Similarly, bosses who spend the majority of their time playing corporate politics will inevitably end up with a team of employees willing to sacrifice real achievement in order to look good.
Bosses who tell but don't show are like parents who think their kids will behave when told "do as I say, not as I do."
In other words, being a great boss means being both a touchstone and a role model. It's always what you show that really matters.
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Determination is great, but sometimes the smart move is to cut your losses. How can you learn when to bow out if quitting really isn't your style?
In the world of startups failure is cool. Quitting is not.
Fail fast may be the mantra of entrepreneurs, but the same determined young founder will be told again and again about the value of perseverance and sheer grit. It’s contradictory advice in some ways, so how can a naturally stubborn entrepreneur learn to draw the line between healthy determination and unproductive obstinance? Or to put it another way, how can you learn to quit with good timing and grace?
Economists tell us that quitting is actually often the smart move and that while humans have a natural tendency to avoid losing sunk costs (otherwise known ‘throwing good money after bad’), cutting your losses is frequently the better course of action. Freakonomics co-author Stephen Dubner explained the rationalist’s approach to quitting on NPR:
Time and effort and even stick-to-itiveness are not in infinite supply. Remember the opportunity cost: every hour, every ounce of effort you spend here cannot be spent there....
Stella Adler, the great acting coach, used to say: Your choice is your talent. So choosing the right path, the right project, the right job or passion or religion -- that's where the treasure lies; that's where the value lies. So if you realize that you've made a wrong choice -- even if already you've sunk way too much cost into it -- well, I've got one word to say to you, my friend. Quit.
All of which might make perfect sense to you but it’s generally not in the character of entrepreneurs, who tend to be never-say-die types, to quit. So how can you get better at the emotional side of giving up?
That’s the subject of two interesting recent posts. One by author and time use expert Laura Vanderkam is titled "Why You Should Learn to Give Up a Goal Without Guilt." In it, she explains that while having goals is a huge help if you want to accomplish great things, too often we are slavishly loyal to targets once we set them. Usually, she writes, "the reason for letting go of a goal is that we’ve evolved away from the goal, or we thought it sounded good at the time and it no longer does."
Outgrowing goals is fine, but if you’re a high achiever who is prone to guilt when you quit on a goal, Vanderkam suggests pulling a bit of a bait and switch on yourself. "The best way to deal with that is to set a new goal--ideally related, but somewhat more in line with your new reality. You may have decided you no longer want to earn a master’s degree, but you can still take a course a year in a subject you find fascinating. You don’t want to invest the time in getting fast enough to qualify for the Boston marathon, but you could run it as a charity runner," she writes.
If swapping out one aim for another doesn’t help you shake outdated goals, then entrepreneur Alex Lawrence has another suggestion to help you quit before pig headedness leads to disaster. His idea: make a mental distinction between stopping and quitting. It’s an idea that came from him after he took a tumble and abandoned a bike race at the top of steep descent, fearing a worse crash if he tried to get down in his weakened state. He writes:
Many, many entrepreneurs like some of you are facing the same exact decision I did at the top of Mt. Baldy on Saturday. You’ve spent hours and hours preparing and working. You’ve spent lots of money (your own and maybe family, friends and investors, to). You’ve made many sacrifices to get and keep the business going. You’ve pushed yourself as hard as you can. Despite all of your efforts, sacrifices and hard work, the business just isn’t going like you’d hoped…
There is no honor in failing randomly. Failure is often (not always) a part of success, but it doesn’t mean you fail blindly. It doesn’t mean you fly down a road at 50mph when you know you’re going to crash.
So really think about it. Have you done everything you can and is your business still not where it should be? Be honest with yourself. If you take the easy answer on the way out, you are quitting. If you take the honest one, and it’s time, then you are stopping.
Stopping still sucks, he clarifies, but unlike quitting it’s smart and necessary. "The sooner you stop something dangerous, dumb or empty, the sooner you can start something awesome, smart and full of promise," he concludes.
Do you struggle to draw the line between healthy perseverance and unhealthy pigheadedness?
You want your customers to not just love your brand--but be absolute fans of your company. Here's what you need to know.
Who wouldn't want to have customers and clients that are fiercely loyal?
Sarah Robinson, business strategist, speaker, and author of Fierce Loyalty: Unlocking the DNA of Wildly Successful Communities, says that's not only possible-- she says it's vitally necessary in today's competitive landscape.
I caught up with her recently as she took a break from her busy speaking and consulting schedule to share more about Fierce Loyalty with Inc. readers:
What is "Fierce Loyalty"? Aren't you talking essentially about what happens when you give great customer service?
Great customer service is a critical element of Fierce Loyalty, but only as part of a much bigger picture. Fierce Loyalty is the unshakable commitment we give to companies that we feel are an integral part of who we are, who we can’t imagine life without - companies that become an essential part of how we define ourselves.
Developing Fierce Loyalty with customers requires a deep commitment to more than great service. You’ve got to be willing to listen for and acknowledge the specific needs your customers have, and, most importantly, you’ve got to invest in a way to meet those needs. In my experience, this means building a community for them. Think of how Zappos and Apple, for example, have done just that.
Give me a couple of examples of companies that exemplify Fierce Loyalty, and why you like them.
Harley Davidson is a great example of Fierce Loyalty. Everyone wants the kind of customer loyalty they’ve cultivated. Harley owners don't just ride the bike, they wear the t-shirt, the hat, the tattoo. They understand each other, even if they’re meeting for the first time. Being a part of the Harley community is an integral part of how they define themselves. Harley riders won’t consider replacing their motorcycle with another brand. Why? Because that would mean giving up their place in the Harley community, and that isn’t going to happen. They are just too invested.
Uber, the on-demand car service, is rapidly building Fierce Loyalty. They deliver an exemplary product in a spot-on way: their customer service is unparalleled (just check out how they handle complaints on Twitter), and their innovation just never quits (they deliver “on-demand roses” on Valentine’s Day and “on-demand ice cream trucks” in the summer.) And, most importantly, they create conversations among members of their rabid followers-- which makes a real difference when, as often happens, they have to fight state and local agencies for the right to operate. Think of the impact when their Fiercely Loyal community (including drivers) takes to social media to fight for them in cities they're looking to expand in.
What happens when you generate Fierce Loyalty--what's the benefit to a business owner?
As I show in my book, there are here many benefits in creating Fierce Loyalty. Here are five of my favorites:
1. Empowered Evangelists. Empowered, rabid, Fiercely Loyal brand evangelists are the Holy Grail in today’s loud, crowded marketplace.
2. A Grassroots Research and Development Team. Want to know if the product or service idea you’re working on is going to hit the mark? Test it out with your most Fiercely Loyal community members and pay attention to their feedback.
3. A Hungry Customer Base. By involving your customers in product development and product testing, you give them a stake in the product’s success. They will be waiting on the edge of their seats to buy the product they helped design.
4. Reduced Customer Attrition. We all know that it is far easier and far cheaper to keep the customers you have than to go out and beat the bushes for new ones month after month. A Fiercely Loyal community of brand advocates who feel deeply connected to your business aren't going to leave you at the drop of a hat.
5. Happier Customers. This is probably my favorite. According to all of the happiness research out there, building the right community for your customers will make them happier. I do better work with happy customers, and I bet you do, too. Happy customers complain less, buy more, and pay their bills on time. What’s not to love?
How does the owner of a small business start building Fierce Loyalty?
Start by knowing what you want-- very clearly. The clearer you are about your goals, the easier it will be to see how to get there.
When I first sit down with a client, before I pull out the Fierce Loyalty model to begin work, I ask them to spend time thinking about their answer to one question: “Why do you want a community?” The answer to this question determines every choice and every action you will take as we move through building your community.
If you’re a small business owner and you like the idea of having Fiercely Loyal customers, spend some time with this question. Come up with several possible answers. Discuss it with people who are vital to your business. It’s the single most important thing you can do to begin the Fierce Loyalty process.
For some reason, young entrepreneurs in particular are unwilling to do this. Huge mistake.
One of the hardest things to learn in sales is to leave well enough alone. The trick, once you actually make a sale, is to shut up and leave. Don’t keep talking; don’t overstay your welcome; don’t get greedy; and don’t try to gild the lily. Get the goods and get out.
But there are two basic tools in sales that are even harder to master, especially for young entrepreneurs.
First, you’ve got to learn how to directly ask for the order. That means asking for the order every time you get the chance. Without embarrassment. Without hesitation. Without apologies. And without blaming it on someone else. “My boss makes me do this” does not cut it. Every time you try, you get better. Practice actually does make a difference. You want to always be closing the sale.
If you're apologetic or reluctant or only half-convinced yourself that the customer needs to act now and sign the dotted line, or if you’re sitting back in the weeds waiting for people to call you, then you might just as well save your breath and shut your doors. Success really starts when you just start doing the heavy lifting of getting the job done.
I see plenty of instances where the people who should be focused on closing deals are instead making excuses for their clients and justifying their inactivity. The economy sucks--so what? Someone is still selling things--just not your folks. The recovery is really slow. Big deal. People still need someone’s products and services. It ought to be yours.
Nothing happens without salespeople who want to sell your product. My best-ever sales manager had a simple (and admittedly crass) analysis that has always stuck with me. His view of the sales world all came down to: “Somebody’s gotta sell this shit.” Feeling sorry for your customers doesn’t get anything done. If your sales folks are not in the game, you can bet that someone else will be taking up the slack and making the sales.
One of the worst excuses of all is being told that the timing just isn't or wasn't right. You’ll learn soon enough that it's always too early until it's too late. There's never a perfect time for the customer to buy because most of them would just as soon not. It's the sales person's job to control the clients’ calendars; to always be in their faces; and to be there whenever the customers are ready to buy. It’s all about “at-bats” and always asking for the order. Lots of important things are lost for lack of asking.
I don't think society in general has become a lot more gracious and polite lately, but for some reason, young people today are reluctant to push or to appear to be pushy. Some otherwise tough and smart entrepreneurs I know would rather die than die of embarrassment. They don’t think it’s cool to let people see you sweat. They don’t understand that it’s a good thing--not a bad one--to show everyone exactly how much you want something and what you’re willing to do to get it. Sometimes I even think that they themselves doubt their products and services, and that this also makes it hard for them to throw themselves into the game full-force with body and soul.
Entrepreneurs aren’t used to being told “no,” and they don’t like it. So they avoid it by not putting themselves on the firing line often enough, and that slows down their growth. It also sets a lousy example for the rest of the sales team.
I’ve got a simple mantra that can save the day. All you need to do is train everyone in your business--yourself included--to repeat this phrase a couple of times a day. It’ll be much more helpful than all your pep talks, sticks and stones, sugary sweets and other threats and incentives combined. What’s the phrase that I use to keep bouncing back up and taking the next step and the next shot and asking for the sale every day?
I say to myself and my team: “It’s only a “no” for now.” Almost every “no” is exactly that: it’s a “no” until it’s a “yes,” and it’ll only be a “yes” if you keep asking.
How Eventbrite went from happy mediocrity to happier excellence.
“Congratulations! You’ve created the happiest, most mediocre company in the world.”
That’s what an investor told Julia Hartz, Eventbrite cofounder and president. Well, sort of. No investor actually told her this. This was in a nightmare Hartz had during a period in which the online event-planning company was receiving accolades for its vibrant culture but was falling behind on its performance goals. She shared the experience at a conference hosted by the Next Web in May.
Boasting low attrition rates and national recognition for its vibrant culture, Hartz (@juliahartz) faced this question. She didn’t want to offset the good mojo happening at Eventbrite, but she knew that the company needed to see an upswing in performance. Even as a dream, the investor’s point hit her hard.
So, Eventbrite’s senior team began having tough conversations and setting clearer expectations with employees. “I wanted to elegantly and subtly introduce this notion of performance to a really, really happy culture,” Hartz says. “And it seems like a reverse problem -; most people have a high-performing company but a bad culture.”
In the short term, this did affect the company’s culture: The attrition rate went up. But as a result of the tough talks, Eventbrite also saw a sevenfold increase in new feature rollouts in 2012 (compared with 2011), Hartz says. The increased performance ultimately yielded a positive cultural effect on the team members who stuck around. “People actually did become more satisfied and happier,” Hartz says.
It may depend on if your personal stock is going up or down
Microsoft announced Tuesday that it’s buying Nokia’s mobile phone business for $7.2 billion. Back in 2000, when the Finnish company was the top mobile phone maker in the world, its market value peaked at about $300 billion.
Around that same time - before launching the iPhone - Apple was worth less than $10 billion. Now its stock is valued at about $450 billion.
That’s quite a reversal of fortunes for both companies, wouldn’t you say?
Competitive markets are just like that. One day you’re fighting bankruptcy and the next, you’re sitting on $120 billion in cash. On the flip side, I’m not sure any position is more tenuous than when you’re on top of the heap: every competitor has a bulls-eye painted on your logo and the only way to go is down.
It’s the same with careers. Whether you have one or multiple peaks, nearly all of us eventually decline. Few get to exit while they’re on top. Yes, I know that sounds like a morbid topic. Why even go there? Because you’re probably not aware of which side of the slope you’re on and it’s very, very important to know.
Let’s say, for example, that you’re a mid-level manager trying to break into the executive ranks. If you’re still on your way up, you can invest in your future. You can take relatively big financial and career risks without fear of getting caught with your pants down.
But what if your career star has risen about as high as it can go? What if you’ve already peaked? Then you’re going to have to manage your career and your finances very differently. You’re going to have to be far more conservative and risk averse.
The same is true of wealthy, successful executives and business leaders who continue to live high on the hog long after their sun has begun to set. They’re either unaware or in denial of their actual situation. Next thing they know, it’s margin call and they don’t have the cash.
That can happen to anyone. It actually does, all the time. To avoid that fate, here are a few things to keep in mind. At a minimum, it’s good, sound advice. But if it feels like I threw a brick at your head, that’s a sign that you should really pay attention and listen up before it’s too late.
There’s no standard model for this sort of thing. Trust your internal compass.
Some peak in their 30s; others continue to go strong well into their 60s and beyond. Look at Betty White. I think she’s like 91 and still costarring in a sitcom, Hot in Cleveland.
If a realtor says you should buy a house based on your future income, you may want to corroborate that advice with your own internal compass. Speaking of which, that compass should have both logical and emotional components. In other words, use cold hard reasoning but also trust your instincts. If they conflict, I’d go with your gut.
Sorry to pick on realtors, but the same is true of financial advisors, coaches, anyone who might benefit from the advice they’re giving you. I’d take it with a big old grain of salt. Instead, listen to the advice of people you trust, but always make the final call yourself.
Hope is a lousy strategy. Get real.
People who are so self-aware, so grounded in reality that they know exactly where they are on their career curve are few and far between. Trust me on that. Besides, there is such a thing as luck and some things are simply beyond your control. Don’t hang your plan on hope. It’s a bad idea.
I know they say “hope for the best and plan for the worst.” I’m actually not a big fan of that model. Instead, I would prefer you get as close to reality as you can. Sure, you can have hopes and dreams until the day they pry that MacBook out of your cold dead hands. Just don’t assume your dreams will come true.
And, in spite of what I said above - that you can’t count on age as a guage - the later in the game, the more important it is to know the truth about where you stand. In other words, you probably can and should take more and bigger risks when you’re young. Further down the line, you might want to take an internal career audit a little more seriously.
How do you get customers to come in on slow nights? Creative restaurants and bars came up with this idea.
The hospitality industry is always on the front lines of difficulty. When the economy is sluggish and people generally don't have extra money to spend, they don't go out, which directly affects the income of bars and restaurants. Even when things are decent, the spending gets concentrated on the weekends, meaning that other days of the week can be highly unprofitable, because the fixed costs of labor and operations don't go away.
New promotions are always important. And a slew of restaurants and bars have hatched some interesting ones lately involving art--as in, making it, not displaying it. Establishments across the country are hopping aboard national programs that bring amateur (and sometimes not-so-amateur) artists out at times when the places might normally be slow.
One example is Dr. Sketchy's Anti-Art School. As the site explains the concept: "From illegal flashmobs to the Museum of Modern Art, Dr. Sketchy's has brought artists a rule-breaking cocktail of dames, drinking and drawing."
More practically, Dr. Sketchy's is an attempt started in 2005 by New York artist Molly Crabapple to break staid academic associations with drawing sessions, particularly life drawing in which a nude model would pose and artists would spend a few hours honing their skills of observation and realistic drawing.
A licensed Dr. Sketchy's evening (there are more than 100 branches) typically involves going to a bar, drinking, and drawing models and burlesque performers with a variety of attire and props. During the session, the bar makes money on drinks and snacks. Patrons pay a cover charge and there are often prizes given out.
Paint Nite, which started last year in Boston and uses the tag line "drink creatively," has a slightly different approach. Instead of building on the life drawing experience that is common to many artists, this group runs a two-hour session in which no one needs to have experience. Operating more like a central company that creates the events, Paint Nite charges money in advance, provides supplies and a local artist-teacher, and promises "your own unique masterpiece" on a 16-by-20-inch by the end of the evening. Again, customers buy food and drink directly from the hosting establishment.
Riding on the coattails of art may seem like an unlikely marketing approach for someone in the hospitality industry, but the growth of these events are proof of their potential usefulness.
Seen any creative promotions lately?
It's not something anyone really likes to do, but struggling is one of your best opportunities for growth.
Struggling sucks… but struggling can also be an incredible opportunity for growth.
Here's another in my series where I pick a topic and connect with someone a lot smarter than me. (There’s a list of some previous installments at the end of this article.)
This time I talked to Steven Snyder, the founder of the organizational development firm Snyder Leadership Group and author of "Leadership and the Art of Struggle," about the benefits of unintentional--and intentional --adversity.
Let’s get this out of the way: Yours is an unpopular stance.
Societally we think struggle is a negative. There’s a cultural stigma attached to it.
Real leaders know that it’s not all smiley faces. Struggle and leadership go hand in hand, but we don’t talk about it enough. Leadership books are not written from the vantage point of struggle--even though leadership is based on the art of struggle. We look for success stories but unfortunately we draw the wrong conclusions.
For one, we have this myth that this perfect leader exists. The myth of the perfect leader stands in our way.
When we realize we all have foibles--even the Gates and Jobs of the world have them--we start to ease up on ourselves a lot. When times get tough we’re a lot less likely to quit because we expect times to get tough. We know that times get tough for everyone.
Every entrepreneur definitely faces challenges and struggles but that doesn’t mean every entrepreneur is cut out to be a great leader.
I believe we all have innate talents. I also realize different people have very different talents. What we must do is tap into the talents that are innately inside us but also recognize we are incredible learning machines.
Many entrepreneurs say, “I’m just not a leader.” That’s unfortunate, because leadership is for the most part learned.
If you open yourself up to the notion that leadership is primarily a learned skill, then you can reach our own potential as a leader. But that requires challenging yourself, and struggling along the way, so you can grow and learn.
You also see struggle as just another form of feedback.
The classic view of an entrepreneur is a person with incredible dreams. That’s a wonderful attribute--but you also have to be connected with the real world. That’s where entrepreneurs very often fail.
A former director of my company said an entrepreneur has to be schizophrenic: see all the positives but also be capable of seeing the world as it really is. The key is to accept the world but also yearn to change the world.
Struggle helps keep you grounded, especially if you see struggle as a learning opportunity. That way, when you get feedback you won’t reject it. You won’t see criticism or critique as a threat.
Entrepreneurs often reject the feedback they get, but every piece of feedback is a connection with the real world. When you dismiss feedback as irrelevant, you miss out on an opportunity.
Successful entrepreneurs know how to take feedback and blend it with their vision to create an even better product, service, etc.
We also have this archetype of the entrepreneur who stuck to his guns, but I’m not sure that ever tells the whole story.
Staying true to your beliefs and vision is important, but that makes it easy to develop blind spots.
One is the experience blind spot, where past success actually blinds us to a current reality. A great example is Ron Johnson when he went from Apple to JC Penney. Indiscriminately transporting strategies that worked well in the past into your current situation without seeing the nuance differences can be a recipe for disaster. When he was asked, “Why don’t you test your pricing strategy before rolling it out to 1,000 stores?” he said, “We didn’t test at Apple.”
The feedback he got was, “Maybe this isn’t a good idea. Maybe this isn’t Apple.” That feedback could have been valuable because it might have opened up a pathway. Maybe he could have tested his pricing strategy--and maybe five others--to determine which was best. He closed himself to the feedback because of an experience blind spot.
But we all make decisions based on experience.
True. Just make sure you understand two basic patterns: The automatic pattern-matching mind and the reflective mind.
The automatic mind sees similarities, reaches the conclusion that those similarities are what is most important, and makes us extremely confident in our decisions. But we have to step back and see the differences as well, and that’s where the reflective mind comes in. The reflective mind can see differences and, importantly, provides a dose of humility.
When you reflect, all sorts of wonderful things happen. You aren’t threatened by feedback. It’s easy to respond defensively to feedback, and even to be a little afraid of feedback. (“Hey, maybe they’re right and I’m wrong.”) If you can get past the defensiveness and fear open yourself up to new reflections and new possibilities. You open yourself up to reinvention.
Take Bill Gates when he reinvented his model of leadership. For a long time Microsoft had a functional organization where generally speaking every software engineer reported to a more capable software engineer. A decade later Bill realized that organizational model, no matter how successful early on, would not be successful going forward. He realized what had worked in the past was not the best model for the future. He got out of an experience blind spot and changed change his model of what successful leadership is all about.
Entrepreneurs need to continually reinvent themselves so they can rise up to the challenges they face. Reinvention starts with embracing struggle and learning from challenge and adversity.
A colleague of mine says he reserves the right to wake up smarter every day. Embrace struggle and you definitely will.
Check out other articles in this series:
- How to build your own talent pool
- Inside a completely transparent company
- Why 'going green' won't be optional in the future
- Is it better to train or hire great talent?
- The keys to maximizing your return on sponsoring events
- The ins and outs of franchising with Noodles CEO Kevin Reddy
- How Ashley Madison's founder built a business everyone loves to hate
- Julia Allison on building a great personal brand
- Eric Ripert on how to build a classic brand
Forget about the tech talent crunch in Silicon Valley. One start-up is in need of fashion-savvy employees--stat.
Today, San Francisco-based fashion start-up Everlane announced a new hiring promotion: "Go West."
The ploy--arguably a gimmick--is meant to draw fashionable New Yorkers out from their shoebox apartments across the country to San Francisco, where Michael Preysman, Everlane's founder and CEO, will give these potential job candidates a personal tour of the office. It's like the start-up version of Manifest Destiny. If the candidate is selected, Preysman will pay for the recruit's relocation expenses as well as a first-class ticket to San Francisco. He may even pay their first month's rent.
So why exactly is he going after New Yorkers in particular?
"We found, in this odd way, that this company has a New York state of mind," Preysman tells me. "We said, 'Hey, where are a lot of our employees from?' And we realized five of the 25 current employees came from New York directly to work here, and 70 percent lived in New York at one time. A lot of New Yorkers are itching to leave."
There's also a more obvious answer. San Francisco, well, isn't really known for its fashion sense--and Everlane needs more employees who are fashion-savvy.
Preysman laughs when I ask him about the city's sense of syle. "Or you mean lack thereof," he says. "Our current head of design is in New York. It's hard. Designers don't generally want to leave New York."
Everlane, which launched in 2010, is an upscale fashion brand for hipsters (the company has been described as an online-only American Apparel) with downmarket prices. By adopting an online-only, direct-to-consumer business model, the company can keep the retail prices of its products low and still take a healthy margin. (Sweaters cost about $60, for instance.) Everlane has found a loyal base in New York--Preysman says 25 to 30 percent of their sales go directly to New York.
In April 2011, the company raised a $1.1 million seed round from a coterie of well-known VCs (Kleiner Perkins, Lerer Ventures, SV Angel) but Preysman says Everlane operates with a steady cash flow. He says the company plans to hire 10 more employees in the short term, and by next year expand the office to a headcount of 60.
The "Go West" campaign is banking on the idea that it can appeal directly to New Yorkers who are tired of the pace of that city. Preysman, who lived in New York after college, says he loved the city, but it's not always the best life.
"It's an awesome place," he says. "But it's a hard place to live. We found that there are a lot of people in New York who are creative, who are into fashion, but who want to change their lifestyle."
Eventually, Preysman says he plans to work with a recruiter, but for now, the company promotes its job openings pretty much exclusively through social media.
"If you have a great service, you attract people and they want to be part of it," he says. "Your biggest brand evangelists also should be your employees. Because it's almost like they're no longer working for a company and doing a job, they're almost working for something they believe and a part of every day."
The dynamics of an auction are different than those of other sales. Here's how that can work for you.
Going… Going… Gone!
We have all heard this phrase at an auction. And have you ever paid more for an item at an auction than you could have paid for the same item in a store?
You can buy everything from old farm equipment to fine art at auctions. Even cruise ships have capitalized on auctions by selling artwork to a captive audience in the mood to spend money.
However, most business owners do not realize that a silent auction can be the best way to maximize the value of your company when you sell. Experienced investment bankers know how to tap into the potential of an auction-style sale to boost a company’s price and secure better terms. They know how to get prospective buyers tuned up, turned on and excited about the opportunity to acquire the business. Then the acquirer is motivated by the opportunity for gain, and approaches the auction with a “What’s in it for me?” attitude.
When the auction begins the buyer realizes right away that there are other buyers at the table. Typically, he doesn’t like to see others bidding on the company. However, it confirms his belief that the company is a real opportunity. Now, the dynamics of the sale shift. The buyer’s mindset goes from “opportunity to gain” to “fear of loss.” This drives buyers to raise their bids. The buyers are convinced that the opportunity for gain is real. Yet, fear of loss drives them to increase their bids to try to keep the company out of competitors' hands.
Five factors are at work during an auction. Together, I like to call them the auction effect.
In today’s business world, nobody likes to lose. Everyone wants to win! A lone buyer looking to buy a company does not feel any competitive pressure. They are the only game in town. They can offer whatever they feel the company is worth, and the seller has nothing with which to compare the offer.
However, when you have multiple potential buyers, all of whom want the same company, they feel the competition. The seller has other offers to consider. The price goes up! Auctions provide built-in competition for your company.
Enhanced Buyer Perception
The true value of a company is not always determined by the assets of the company or by its performance. The true value of a company is what a buyer is willing to pay based upon their perceived value of the company. This has been proven over and over as billions have been spent on internet companies that have yet to make a profit. The buyer’s perceived value defied normal business rules.
A single buyer values a company based upon the value they see. During an auction, multiple buyers are looking at the company, and each has a different perceived value. A strategic/corporate buyer may see the company as the perfect strategic fit. A financial/private equity buyer may see the same company as less attractive, because its potential ROI is not ideal, but still very attractive.
When you multiply the number of buyers, the perceived value is enhanced. Each suitor sees the company in a different light, yet must compete with others to win. The perceived value increases.
There are no time constraints on a company being sold without an auction. No deadlines, no pressure. If you only have one potential buyer, they don’t feel any pressure to increase their offer or to negotiate. They can just wait around until you accept their offer.
An auction is different. It can have a definite ending. Bidders know they are competing for your company and if they want to win, they have to present timely offers. They never know when the company owner may agree to accept another offer, and they don’t want to miss the opportunity. Bids go up - values go up!
Often buyers need to know that others see the potential value of a company before they will make a serious offer. An auction provides ongoing external validation that the company being sold is attractive and that the offers are realistic, based upon the market.
Fear of Loss
Potential buyers have a vested interest in the company they want to purchase. They have done their homework. They have determined that this is the best company of its type for sale at this time. Otherwise, they would simply wait and buy the next one.
During an auction, buyers may fear that if they lose the auction, they may not get another chance to purchase a company like this one. This fear drives buyers to increase their offers or negotiate better terms.
Not only does an auction help to enhance company value, it also provides the seller with more negotiating power. The seller can work with potential buyers to craft the perfect offer that more closely meets both their financial and personal goals.
Before your company is going-going-gone, make sure you investigate an auction-styled sale. It can ensure you get the best deal before the gavel drops.
It's almost impossible to figure out your company's style and positioning without first examining your own.
It’s fairly easy to get caught up in the fantasy of the idea of your business--before the reality of the challenge hits you.
As the leader of your business, you establish the voice of the company. You are often the face of the business, and you drive the energy that will represent the gestalt of the business.
So it’s no surprise that you will be up days and nights and days planning the important strategic issues about the company--the business model, the launch strategy, the funding, the board, the people, the culture. And somehow, you have to be building your business, and hopefully generating revenue, at the same time.
But few entrepreneurs take that same active, strategic approach to defining and cultivating their leadership voice. As a result, they stumble blindly into some version of leadership because it seems easy.
Challenge yourself to develop an effective leadership voice, and I guarantee it will have an impact on your success. Here’s how to get started:
Ask yourself: What is my leadership voice?
This question is not trite or facetious. It is the entrepreneur’s version of “What do you want to be when you grow up?”
Have you actually ever methodically put together a profile of your leadership style? For women leaders in particular, the stereotypes and the bad examples get a lot of airtime. Consider the leadership styles of women you have met and worked with, and which traits you applaud and which are to be deplored.
Identify people whose styles you admire across fields
Observe them intently. Have conversations with the people you have access to. For those whom you do not have access to, watch their public appearances and read their writing. Find them wherever they are: in business, politics, sports, TV, your neighborhood, on vacation.
I try to integrate my father’s intellect and humor, my PR guru’s relationship-building techniques, the grace of Meredith Vieira, and the intensity of Derek Jeter.
I am fascinated by the delicate balance of professionalism, intelligence and accessibility of a Brian Williams, the ability to recreate of a Madonna, and the “aw shucks” demeanor of a Eli Manning.
I didn’t say this was easy. And you can see how personal this gets depending on who you admire.
Write down the characteristics that appeal to you
It’s not enough just to admire someone. Figure out what is about them, specifically, that draws you in. Note their confidence, their ability to build relationships, their network, their charisma, their intense knowledge of a particular area. Identify what intrigues you. No need to reinvent the wheel.
All of my roads lead to Oprah, and I am not ashamed to say so. I admire her personal struggle and success, her ability to reign as queen and immediately switch to girl- next-door, the public declaration of her goals and the pursuit of them, the ability to build excitement and relationships. And she makes it look so easy. I am sure it isn’t, but in my opinion her seeming ease makes her more magnetic.
Identify the natural strengths in your own style
Be honest with yourself about the characteristics you might be better off without. What qualities have worked for you in the past? In what situations were you most successful? Why? Let’s face it--if you are a wallflower, it is unlikely that you will become the court jester of your company. You can be an improved version of you, but you can never be a fake, or a recreation.
I am not Oprah, nor will I ever be. But I can take my skills in terms of marketing, strategy and communications and figure out how I can use those. I have to be cognizant that my unrelenting directness works better in some circumstances than in others. You need to develop your inventory of assets and challenges.
Test your “leadership voice” hypotheses out in low-risk environments
That doesn’t mean trying to talk in different accents or changing your hairstyle. It means trying different approaches to managing people and getting decisions made.
Try to make a decision with consensus, then in an authoritative tone and then one in the middle. It will be immediately clear what “fits” you. You don’t have to do this in a high-risk client situation or in front of venture capitalists who will determine your funding future. Try making a plan with friends, getting your children to do what you need them to do, or sitting on a non-profit committee. Practice with your spouse, your friends, or your network.
Just like building a business, this is a process. The earlier you are in your career, the more latitude you have to experiment. If you are already in the public eye with an established approach, it is much harder to make big changes.
You might not get it right in the first year, in the first business, the first financing, the first launch or maybe even the second or third. But awareness is the first step. Now go forth and lead.