Tim Ferriss: “9 Habits to Stop Now”

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In his book, The 4-Hour Workweek, Tim Ferriss spends a good amount of space talking about time management and life management skills.  A few weeks, ago I wrote a Blog Post about Tim and his book.  I had a lot of reader interest, so I thought I’d follow up with another post on Tim’s philosophy.

The section entitled “The Best of the Blog” features one of Tim’s blog entries entitled “The Not-to-Do List:  9 Habits to Stop Now.”   Here is his list with my comments in Italics:

1.  Do not answer calls from unrecognized phone numbers.  I admit I do this, especially since I get a lot of phone solicitations from people I don’t know.  If it’s important, the caller will leave you a voice mail, or try and reach you via email or other means.  The key here is that you won’t be distracted by any calls from unknown callers. 

2.  Do not email first thing in the morning or last thing at night.  Ferriss thinks the former “scrambles your priorities” for the day, and the latter causes insomnia.  While I like to batch ,my email responses as much as possible, I actually prefer to check my email first thing in the morning, as well as late at night.  I don’t seem to have any problem focusing on key priorities.

3.  Do not agree to meetings or calls with no clear agenda and time.  He also believes that no calls should take longer than 30 minutes.  This is great if you can do it.  Otherwise, I suggest setting expectations for topics and time at the very beginning of the call or meeting, and then stay on track as best as posible.

4.  Do not let people ramble.  Obvious.

5.  Do not check e-mail constantly.  “Batch” and check at set times only.  Sometimes, you are expecting emails and responses from important team members or clients so it’s necessary to stay on email continually throughout the day.  I agree that email can be a huge distraction, and a time suck, so try and do whatever you can to minimize wasted time and increase efficiency, including following this advice if it works for you.

6.  Do not over-communicate with low-profit, high-maintenance customers.  Great advice and I will go even further and suggest that you should either terminate or restructure contracts with any low-profit and/or high-maintenance customers.  A huge key to success is in having discipline in the kinds of customers you accept.  Bad customers can put you out of business!

7.  Do not work more to fix overwhelmingness – prioritize.  Tim says that “the answer to overwhelmingness is not spinning more plates – or doing more- it’s defining the few things that can really fundamentally change your business and life.”  I agre 100%.

8.  Do not carry a cell phone or Crackberry 24/7.  Tim thinks you should take one day per week off from cell phones and emails.  Nice idea in concept, but the stark reality is that most businesspeople and business owners can’t afford to be out of touch.

9.  Do not expect work to fill a void that non-work relationships and activities should.  Tim says, “Schedule life and defend iit the way you would an important business meeting.”  This is not easy for a lot of workaholics I know, but it’s important to keep this in mind if you seek true work-life equilibrium.

I don’t think there’s anything earth shattering here, plus I am sure you have heard of some or most of these ideas in one form or another over the years.  But it’s always good to think about tips like these to help you be more productive and focused.

Thanks for reading and please subscribe to my Blog via the link on my Home Page.

Featured image courtesy of timferriss licensed via creative commons.

Yanik Silver’s 34 WINNING Rules for Maverick Entrepreneurs

My friend Yanik Silver is a successful, young, internet marketing expert.  A self-made millionaire by the age of 30, Yanik exudes creativity, energy, and passion.  He’s a veritable idea factory, and I am impressed by his knowledge and wisdom at such a relatively young age.  His Twitter handle is @yaniksilver and his main Blog site is InternetLifestyle.com.

Yanik has, through reflection and analysis of his business experience and interactions with dozens of the world’s top entrepreneurs and business leaders, developed what he calls his “34 Rules “  They can also be found on one of his Blogs:  maverickbusinessinsider.com.

So here are YANIK SILVER’S 34 RULES FOR MAVERICK ENTREPRENEURS  (I added some commentary of my own in BOLD text below.)

  1. It’s got to be a BIG idea that you, your team and your customers can “get” in seconds.  Agree 100% that THINKING BIG is one of the most important things you can do in business.  See my Blog Post on “5 KEY LEARNINGS.”
  2. Strive to create 10x — 100x in value for any price you charge. Your rewards are always proportionate to the value you provide.
  3. You must charge a premium price so you have a large margin to provide an extraordinary value & experience.  This is right out of the Steve Jobs Playbook!
  4. Provide a ‘Reason Why’ customers should do business with you and pay you a premium.
  5. Get paid before you deliver your product or service. And when possible figure out how to create recurring revenue from transactions.  Collecting cash early allows you to finance your business, and ecurring revenue creates maximum shareholder value.
  6. You get to make the rules for your business. Don’t let industry norms dictate how you’ll work or who you’ll work with.  Another Steve Jobsism.
  7. Create your business around your life instead of settling for your life around your business.
  8. Consistently and constantly force yourself to focus on the ‘critically few’ proactive activities that produce exponential results. Don’t get caught up in minutia & bullshit.  Focus!
  9. Seek to minimize start-up risk but have maximum upside potential.
  10. Get your idea out there as fast as possible even if it’s not quite ready by setting must-hit deadlines. Let the market tell you if you have a winner or not. If not — move on and fail forward fast! If it’s got potential — then you can make it better.  The one great characteristic of internet-based businesses is that the feedback loop is shortened and rapid iteration can be done to perfect the model.
  11. Find partners and team members who are strong where you are weak and appreciate being paid on results.
  12. Your reputation always counts. Honor your obligations and agreements.  There’s nothing more important than INTEGRITY.
  13. Never, ever get paid based on hours worked.
  14. Leverage your marketing activities exponentially by using direct response methods and testing.
  15. Measure and track your marketing so you know what’s working and what’s not.
  16. Bootstrap. Having too much capital leads to incredible waste and doing things using conventional means.  I love this concept.  Bootstrapping builds a culture of resourceful and a “lean and mean” operating philosophy.
  17. Your partners and employees actions are their true core — not what they tell you.
  18. Keep asking the right questions to come up with innovative solutions. “How?”, “What?”, “Where?”, “Who Else?” & “Why?” open up possibilities.
  19. You’ll never have a perfect business and you’ll never be totally “done”. Deal with it.  Warren Buffett has said that it’s not necessary to do extraordinary things to get extraordinary results.  See my related Blog Post on Buffett.
  20. Focus most of your time on your core strengths and less time working in areas you suck at.
  21. Make it easier for customers to buy by taking away the risk of the transaction by guaranteeing what you do in a meaningful way.  If you are supremely confident in your product or service, you should have no problem guaranteeing it, and every customer loves a guarantee.
  22. Always have something else to sell (via upsell, cross-sell, follow-up offer, etc) whenever a transaction takes place. The hottest buyer in the world is one who just gave you money.
  23. Always go back to your existing customers with exceptional offers and reasons they should give you more money. It’s 5x less expensive to sell to happy customers than go find new ones.
  24. However the flip side is – fire your most annoying customers. They’ll be replaced with the right ones.  I have done this and it has worked miracles in getting my Team focused on the higher-value customers.  Figure out how to “score” or rank your customers and rationalize the lowest value ones.  You can then apply the scoring system to new business opportunities you evaluate, so that you accept the customers you want.
  25. The marketplace and competitors are always trying to beat you down to a commodity. Don’t let that happen.  I agree that getting into a commodity position is a losing proposition because someone will ALWAYS be lower in price.
  26. Develop and build your business’s personality that stands out. People want to buy from people.
  27. Create your own category so you can be first in the consumer’s mind.
  28. Go the opposite direction competitors are headed — you’ll stand out.  It’s amazing how so many of successful business leaders and investors are CONTRAIAN in their thinking.
  29. Mastermind and collaborate with other smart entrepreneurs if they have futures that are even bigger than their present.  You can’t win by yourself.  You need peers, advisors, mentors, and others who can help you.  Create a group, join a YPO or EO Forum, or a Vistage Group.  I am in a YPO Forum and the learnings and experience have been priceless.
  30. Celebrate your victories. It’s too easy to simply move on to your next goal without acknowledging and appreciating the ‘win’.  This is a good one.  Oftentimes, you see Founders relentlessly clamoring for “more, more, more!” without stopping to celebrate success.  This is super important for morale.
  31. Make your business AND doing business with you FUN!
  32. Do the unexpected before and after anything goes wrong so customers are compelled to ‘share your story’.
  33. Get a life! Business and making money are important but your life is the sum total of your experiences. Go out and create experiences & adventures so you can come back renewed and inspired for your next big thing.  Life is very short, so enjoy your moments at every opportunity.
  34. Give back! Commit to taking a % of your company’s sales and make a difference. If this becomes a habit like brushing your teeth pretty soon the big checks with lots of zeros won’t be scary to write. If you think you can’t donate a percentage of your sales simply raise your price.  The more you give, the more things come back to you. Giving is great for the community, for your company, and your teammates.  
This is a big list and, for me, I like #1, #6, and #8.  I believe in “Thinking Big.”  You’re going to be thinking anyway, so why not Think Big?  As for #6,  your business will definitely differentiate better if you follow your voice and make your own rules, as opposed to following someone else.  The great companies create their own products and solutions.  They set the trends.  Finally, I can’t say enough about FOCUS (#8), because that’s one of the TOP 5 necessities for success.  I blogged about this in my very first Blog Post, SUCCESS FORMULA.
Which one of these 34 RULES do you like best or find most relevant to your business?  
Please Comment below and Subscribe to my Blog.  Thanks!       
Featured image courtesy of Ralph Zuranski, licensed via creative commons.

Winning with Tim Ferriss’ The 4-Hour Workweek

When Tim Ferriss‘ book The 4-Four Hour Workweek originally hit the airport bookstores in 2007, I must admit I scoffed at the ridiculous title and thought the author and content would also be ridiculous. I was not alone in my opinion, as his methods and advice have been controversial.

After hearing so much about the book, I did finally buy and read it, and I was pleasantly surprised!  I just read it again on a recent trip to Rio (they do practice the 4 hour workweek in Brazil!) and thought I’d write a couple of Blog posts on the subject.  While there are a lot of contrarian and unusual ideas in the book, Ferriss DOES render some excellent advice on a variety of matters including how to create or design a lifestyle.  He does it in a very motivating “I did it so you can do it too” manner.

His basic themes are:

1.  You CAN enjoy the lifestyle you want, and you can do it now

2.  Simpify to create space and create attention (attention is more important than time because time without attention is useless) to apply to other things

3.  Focus on what’s important in your life and that which makes you happy and fulfilled.

4.  His 4-step “DEAL” formula: Defininition, Eliminate, Automate, and Liberate

Tim Ferris’ DEAL:

Definition – Define the life you want and how much it will cost for you to achieve it (in short, define your Goals)

Elimination – Eliminate stuff that’s not critical to your achieving your goals.  Practice the 80/20 rule and focus on what will get you closer to your ideal lifestyle.

Automation – Outsource noncritical and basic functions.  Find and build a business which generates maximum revenue with minimal time/attention.  The key is to minimize your own personal involvement to free yourself up to do the things YOU WANT.

Liberation – Free yourself from a particular geographic location.  The idea is to be able to travel, or work from anywhere.  Mobility is a hallmark of what Ferris refers to as the “NR,” or “New Rich.”

Tim’s “Muse,” an income machine:  Ferriss urges the reader to find his or her “muse” (a calling or business), and then go for it. Ferriss lays out a blueprint for starting your own business which can essentially run on autopilot.  Apparently, he had done this himself and built a business that generated cash flow to pay the living expenses, while requiring a fraction of the time and effort.  While I believe him, he makes it all sound too easy.

The Top 13 New Rich Mistakes

1.  Losing sight of dreams and falling into work for work’s sake (W4W)

2.  Micromanaging and e-mailing to fill time

3.  Handling problems your outsourcers or-co-workers can handle

4.  Helping outsourcers or co-workers with the same problem more than once, or with noncrisis problems

5.  Chasing customers, particularly unqualified or international prospects, when you have sufficient cash flow to finance your nonfinancial pursuits

6.  Answering e-mail that will not result in a sale or that can be answered by a FAQ or auto-responder

7.  Working where you live, sleep, or should relax

8.  Not performing a thorough 80/20 analysis every two to four weeks for your business and personal life

9.  Striving for endless perfection rather than great or simply good enough, whether in your personal or professional life

10.  Blowing minutiae and small problems out of proportion as an excuse to work

11.  Making non-time-sensitive issues urgent in order to justify work

12.  Viewing one product, job, or prospect as the end-all and be-all of your existence

13.  Ignoring the social rewards of life

In summary, I believe this is a book worth reading, as it contains a lot of useful and highly applicable tips and advice, while proffering some proven scenarios whereby you can unchain yourself from a job or mundane lifestyle, in order to design and pursue immediately a life of your dreams.

Featured image courtesy of benjyfeen licensed via creative commons.

5 KEY LEARNINGS – National Capital Region Entrepreneur’s Club

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Recently, I had the honor of speaking at the September, 2011 luncheon of the National Capital Region Entrepreneur’s Club.  It’s a group of terrific business leaders from the DMV region.

Our host, Ingar Grev, asked me to tell my story, talk about some successes, some failures, and key learnings.  Ingar is a US Naval Academy grad with MS and MBA degrees from Maryland.  As fit today as he was 25 years ago when he was a star D-lineman for NAVY, Ingar is an entrepreneur, technology expert, connector, and CEO/executive coach known as The Growth Coach.

He was also nice enough to write about my presentation in his Washington Business Journal blog post.  At the conclusion of my remarks, I listed 5 things I had learned in my experience as an entrepreneur, CEO and investor.  Here are the 5 Key Learnings I shared with the group:

1.  Do the right thing always.  It can be expensive to take the high road, and it takes courage, but at the end of the day, your reputation is all you really have.  High integrity is impossible to fake, and integrity is a real magnet for other Winners and for success in general.

2.  Build relationships.  You can’t win without great partners, clients, and teammates. Success is all about creating, building, and nurturing relationships.  I am not talking about quantity, but rather QUALITY of relationships.  People want to do business with people they know, like, and trust.  The old adage about “It’s not what you know, it’s WHO you know” is true.

3.  Never, ever, ever, ever, ever give up. The great football coach Vince Lombardi once said, “The Green Bay Packers never lost a football game.  They just ran out of time.” Luckily in business, there is no time clock!  Winning in business is about having staying power (capital, stamina, confidence, persistence)   In my case, my company CyberRep lost our largest client twice and faced extreme business challenges both times.   If we didn’t have confidence and persistence, we would have never replaced the lost business and grown our company.  We never gave up, and would up with a great outcome.

4. Think BIG.  Over the years, we set grand plans for ourselves and somehow managed to hit quite a few of them.  My philosophy is that if you’re going to think, you may as well think big.  Set your goals realistically but high.  Stretch yourself.  I know many people, including my partners and me, who have surprised themselves with what they were able to accomplish.  Your organizations will rally around and get excited by big plans and big goals, so go ahead and shoot for the moon.  If you fall short, you still will have made good progress.

5.  Greatness is defined by Consistency.  Great performers are able to produce day in and day out on a consistent basis.  Great companies deliver for their clients and customers consistently.  The challenge is figuring out how to get your organizations to do fantastic work over and over again.  If you can do it, then congratulations, your company is on its way to being “great.”

I hope you enjoyed this Post.  Thanks for reading, and please sign up for my Blog!

Featured image courtesy of woodleywonderworks licensed via creative commons.

More Business Advice from Warren Buffett

Two weeks ago, I had the good fortune of having my Blog post on Warren Buffett featured on WordPress.com’s home page.  Out of over 400,000 blog posts per day, WordPress features only 10 in its Freshly Pressed section.  I have no idea how my post was selected, but I bet it had to do with Mr Buffett’s popularity, especially in light of the recent turbulence in the stock market.

Needless to say, my Blog site was visited by thousands of Warren Buffett fans, so I thought I’d do another post on the Oracle of Omaha’s advice.  I found a nice article on about.com by Joshua Kennon, a private investor who authored The Complete Idiot’s Guide to Personal Investing, 3rd Edition.  The piece summarized some of Mr. Buffett’s best investment advice.  I chose seven of these nuggets, which I thought could also be very applicable to running and growing a business.

1.  Risk can be greatly reduced by concentrating on only a few holdings.  Business application: FOCUS!  Every company has limited human and capital resources, so concentrate your efforts on a few key areas rather than trying to “boil the ocean.”

2.  Stop trying to predict the direction of the stock market, the economy, interest rates, or elections.  Business application:  STAY THE COURSE.  Once you have made a business decision to go in a particular direction, stay focused on that direction and tune out the inappropriate noise.  If you are sure in your decision and it has been made rationally with good information, then eventually it will pay off.

3.  Be fearful when others are greedy and greedy only when others are fearful. Business application:  BE CONTRARIAN.  More money can be made in business by NOT following the “conventional wisdom.”  Trends move from one end of the pendulum to the other, so when the crowds are strongly of one opinion, then it could be time to make money by taking the opposing view.  For example, just 5 years ago, the “experts” thought the datacenter industry was stagnant.  There was a glut in capacity, and pessimism all around.  The smart contrarian entrepreneur who could see the tidal wave of virtualization and cloud computing was coming, made money by investing heavily in datacenters.

4.  The ability to say “no” is a tremendous advantage for an investor. Business application:  Concentrate, focus, and don’t get distracted.  The ability to say “no” is also a tremendous advantage for a business person.  Steve Jobs, for one, has always prided himself on saying “no” to things that did not fit his vision for Apple.  It is natural for opportunistic business people and entrepreneurs to want to look at EVERY opportunity, but by saying yes to too many projects, you dilute your resources and your company’s energy.

5.  An investor should act as though he had a lifetime decision card with just twenty punches on it.  Business application: BE SUPER SELECTIVE!  Imagine running your business knowing that you will only have 20 truly awesome ideas to bet on in your career!  That’s only one every two years.  Applying this advice means you must do your homework, be very diligent, and choose your projects very judiciously.

6.  Always invest for the long term.  Business application:  Your goal is to create long term shareholder value, so plan and operate your business in a way to achieve this goal. Note that Mr. Buffett uses the word “always,” which is a very strong word.  For me this is real wisdom.  I see far too many business leaders make short term and medium term decisions which appear to make sense, but really do not.  I agree with Mr. Buffett because, ultimately, all that really matters is the value created in the long term.

7.  It is not necessary to do extraordinary things to get extraordinary results. Business application:  You don’t always have to be the best.  You can win big even if you are a little better than your competition.  This is an excellent concept.  Too many companies spend too much time and money trying to be perfect, when all they really need is to stand above their competitors.  CyberRep operated in an industry with “C” players, and I always told our team that we would be successful if we were merely “B+” players.  It worked.

Thanks for reading.  Please comment below and let me know which concept resonates with you…and please sign up for my Blog too.  You can find the signup box in the right column of my Blog’s Home Page.

Featured image courtesy of trackrecord licensed via creative commons.

12 Most Critical Questions for Raising Capital for Your Startup – 12most.com Guest Post

Stack of 100s at 12most.com

This was my August 16, 2011 Guest Post on 12most.com.

Right now – RIGHT now – is the BEST TIME to start a business, and there’s never been a better time to start raising capital. I firmly believe this. Why?  Because tough economic times cause tremendous dislocation in almost every market. Established companies are playing defense, trying to figure out where the economy is heading, laying off people, cutting costs, and trying to protect their turf. Fear is in the air.

Fear spells opportunity for new startups that can compete because they are small, nimble and agile.  Using creativity and resourcefulness, entrepreneurial startups can improve the way things have been done in the past, or attack brand new markets with new technology.  Startups are not encumbered by the baggage of their larger competitors.

However, raising money in tough economic times is, well, tough!  Angels and VCs seek to cherry pick the very best ideas, those that are most likely to succeed.  Money is still available for the best ideas and teams, but you have to be tuned in to what these investors need in order to make an investment in your startup.

Based on my experience as an entrepreneur, mentor, angel, VC fund LP, and board member, here are the 12 most important questions you need to answer when raising capital for your startup:

1. Money

How much do you need and what is the use of funds?

Investors want to know that you have thought through your capital requirements and where the money will be put to use.  Is it for product development, marketing, building out your sales team, etc.?  You must be ready to justify this request, and talk about how this gets you to the next stage in your startup’s development, as well as how much more money you may need in the future.  Know what kind of deal structure (preferred stock, convertible debenture, common stock, etc.) and valuation you are proposing to your investors.

2. Pain – What pain are you fixing?

Your product or solution must fix somebody’s pain, whether it’s making life easier, saving money, or making a customer more efficient.  Talk about the severity of the pain you are addressing, as well as how much money your customer will pay for it.  Show some basic market research, ROI analyses, and, ideally some 3rd party customers who are already happily using your product or service.

3. Raising Capital for Your Solution: What is it, exactly?

Exactly what product or service are you offering and how does it work?  Too many times, I have seen wishy washy descriptions of the solution because the idea is being matured, or in Alpha mode.  I have seen many super smart engineers with grand plans that are completely unfocused trying to be everything to everybody. Few have been funded.   Investors want to see certainty and simplicity in your proposed solution to the above-mentioned pain.

4. Customers – Who, exactly, is your customer?

You need to know WHO will be buying from you.  Are you selling B2B, B2C, B2G, all of the above?  Are your targets Fortune 500 companies, SMBs, NGOs, the Federal government, etc.  At what level are you selling (CEO, CFO, VP of Marketing, etc.)?  What kinds of situations will they need to be in to absolutely must buy from you?  The more precise the better.  And bring some testimonials or anecdotal evidence from these targets.

5. Execution Plan – What’s your plan for selling and delivering?

One of the biggest questions and concerns investors have is HOW you plan to win customers.  What’s your strategy, who’s leading the sales effort, and so on. Be prepared to discuss not only your marketing & sales plans and customer acquisition strategy, but also your customer retention strategy.

The Angel on Your Shoulder

6. Raising Capital, as a Team – Who are the players and what are their backgrounds?

Angel investors are not only investing in an idea or a market space.  We are investing in a team of people with, preferably, a strong and experienced founder.  Talk about your key executives and your advisors too (lawyers, accountants, Advisory Board members), anyone who is adding considerable value to your venture.

7. Culture – What kind of culture are you building?

Culture is the DNA of every organization, and good culture is a requirement for success.  Culture can even be a differentiator against your competition.  The best investors know this.  Talk about your culture, your approach and philosophy towards business operations, leadership development, hiring, customer care, product development, and other key parts of your business.

8. Competitors – Who are they and how will you compete?

Competition is one of the most important questions to answer.  I have met with countless entrepreneurs who claim that they have “no competition.”  This is a particular pet peeve of mine, because every company has competitors, and all customers have choice.  Believing that you don’t have competitors is not only naive, it is a recipe for disaster.  So talk about all your competitors, both direct and indirect, and show how you are better and how you will beat them.

9. “Moats” – How are you special and what are your differentiators?

Warren Buffett likes to invest in companies with high barriers to entry, or “moats,” as he calls them.  Startups are risky enough for investors, and they want to invest in ventures which have a higher probability of success.  Moats include IP, patents, unique skills or knowledge, proprietary methods, unique brands, unique culture, etc.

10. Raising Capital for Pivotability – What will you do if your Plan “A” fails?

One thing is absolutely certain in a startup: your original plan will not happen the way you initially envisioned it.  Investors want a team that’s resourceful, agile, and creative enough to pivot, if necessary.  A sailboat in a regatta does not go from Point A to Point B in a straight line.  It gets there by “tacking, ” or making a series of rapid and opportunistic turns in order to maximize the wind in its sails.  Startups have to do the same thing, and investors want to see that you have thought through your contingency plans.

11. Commitment – How much money did you personally invest? Is this a full time job for you?

The best investors take a “partner” approach to investing, and they want to invest alongside their entrepreneurs.  I’m not so much looking for huge sums of cash invested, but rather whether the amount invested is a “significant” percentage of the entrepreneur’s net worth.  If a founder has put a good chuck of her net worth into the company, or taken out a second mortgage on her home, the investor will feel more comfortable about the founder’s putting her money where her mouth is.  As for working “full time,” this is essential.  I have never seen a startup succeed that didn’t have full time (80 hours a week) commitment from its founding team.  Be ready to field questions about how much your team is willing to sacrifice in order to win.

12. Exit – How are you going to make your investors money?

Investors are not looking to put their money in forever.  You have to paint the picture of how they will get their money and profits out within their expected timeframe (generally 4-7 years).  Be ready to talk about how you’re going to exit (for example via IPO, sale, recap, or refi).  How is the market for your proposed exit options?  Talk about recent deals in your space and get some data from the experts (M&A specialists, deal lawyers, etc.).

I hope this helps you as you think through your approach to pitching angels and VCs.  If you believe in your startup, then be persistent. Don’t give up!  If you can’t get funded initially, then prove out your business model by getting traction, i.e. happy customers, and figuring out other creative ways to raise the capital you need, whether it’s by getting equipment leases, vendor financing, customer deposits, or even money from “FF&F” (friends, family and fools).

Good luck out there!  It’s a great time to pursue your dreams!

Photo courtesy of amagill. Some rights reserved; used under creative commons license.

The Winning Habit of “Sharpening the Saw”

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Stephen Covey talks about “Sharpening the Saw” as the 7th Habit in his classic book The 7 Habits of Highly Effective People.  For Covey, this applies to individuals.  However, this Habit can easily be adopted by companies and organizations.

One of the best habits my Team and I have acquired over the past 3 years has been a continual improvement, or “saw sharpening” habit honed via my involvement and participation in a Forum of CEO peers.

After each of our monthly Forum meetings, we go around the table and share feedback by answering the following 4 questions:

1.  Did we use our time wisely?

2.  What worked?

3.  What didn’t work?

4.  How could I have been a better participant?

The idea behind asking and answering these questions is that we improve the experience of each Member, as well as to improve the performance of our Forum group as a whole.

We have applied this at Lore Systems by making it a HABIT to ask and answer these 4 questions after EVERY meeting (standing meetings, staff meetings, sales calls, etc.), conference call and customer interaction.

The results have been phenomenal in terms of elevating the trust and collaboration of an already high-performing team.

Try it, and let me know how it works!

Featured image courtesy of mrsdkrebs licensed via creative commons.

Scaling a Hypergrowth Enterprise – Part 3 (Scalable Customers)

This is the third in a series of Posts on scaling a hypergrowth enterprise.  I was the co-founder and CEO of CyberRep, a CRM and call center company which grew revenues nearly 160x (16,000%) to over $80 million over a 9 year period.  In Part 1 of this series, I talked about People as the first of 5 key elements for scaling a hypergrowth company, the other four being Culture, Scalable Customers, Process, and Capital.  I examined Culture in Part 2 of this series, and today we will discuss the 3rd element, Scalable Customers.

SCALABE CUSTOMERS

All customers are NOT equal.  Some are much better fits for your company than others, in terms of how they treat you, their level of dependency on your services, and the degree of difficulty in servicing them. You want to serve customers who are growing fast and who will have more and more needs as they themselves grow.  A “scalable customer” is one which grows and takes you along for the ride.

Partner Mentality – The best kinds of customers take a partnership approach to your relationship (as opposed to a vendor-vendee mentality).  They rely on you for true “value add” solutions that go beyond just providing the bare minimum of what they need.  They rely on you and have a high degree of dependency.  These kinds of customers will continue expanding their scope of business with you, as they grow.  Note:  An added benefit of a customer with a partner mentality is that when things get rocky (and they inevitably will from time to time), they will be more apt to work through the issues with you, since you are a valued “partner” and not just another vendor.

Customers who grow fast – Try and find customers who are in hypergrowth mode themselves.  Whether they are in hot market segments or expanding via acquisition, these customers need you the most because they have challenges supporting their growth.  For example, my company supported Nextel and Microsoft (MSN) in the early 2000s when both companies’ user bases were exploding.  The more customers they added, the more customer service they needed, and the better we performed, the more business they gave us. They expanded astronomically with us.

Know when to say “No” to revenue – It hurts to turn away revenue, BUT it’s required if you want to build a hypergrowth company.  Saying “no” is really tough.  It is tempting to want to do any kind of work and take on more than you can handle, or to take on a client that is not “scalable,” but you have to stay disciplined in your business acceptance.  By pursuing the revenue YOU want, and focusing only on clients who will grow with your company, you can marshal your scarce delivery and other resources on becoming an expert at your craft and improving your service offerings with these scalable customers.

Thanks very much for reading.  I’d love your feedback and thoughts, so please Comment below…and please sign up for my Blog too!  (See the Signup box on the sidebar of my Home Page)

Scaling a Hypergrowth Enterprise – Part 2 (Culture)

This Post is the second of a series of posts on the topic of scaling a hypergrowth enterprise. My former company, CyberRep, grew from $550,000 to over $80 million in annual revenue over a 9 year span.  In Part 1 of this series, I talked about People as the first of 5 key elements for scaling a hypergrowth company, the other four being Culture, Scalable Customers, Process, and Capital.  Today, let’s examine Culture.

CULTURE

Culture is the company’s DNA.  It’s the genetic code which governs how the business is built, how customers are acquired and services, how employees are managed and developed, what core values matter, etc.  We sought to build a culture of hypergrowth, opportunism, speed, and flexibility. This was integrated into our “Top Ten” corporate core value set and our “Four Pillars of Success” which I will discuss in future posts.

When should a Culture be established? – Whether you’re starting a new business, a division, group, or team, it’s critical that Culture be established at the very beginning. Why? Because, it’s always easier for new hires to fit into an existing culture, than to change a group’s culture once they are operating.  People hate or fear change.  It’s for this reason that so many M&A deals fail.  Buyers are unable to impose their new culture on the legacy team, so integration is never fully realized and dysfunction sets in, but that’s a topic for another day.

Hypergrowth – It may seem tautological that scaling a hypergrowth enterprise requires a culture of hypergrowth.  Well, that’s right.  Our culture was focused on our “Four Pillars of Success”:  Client Satisfaction, Profitability, Revenue Growth, and Associate Satisfaction. These pillars were interdependent, and our leadership team evangelized the focus on these objectives, including REVENUE GROWTH, on a 24/7 basis.  Our objective was to grow via new customer acquisition, but more importantly, via  our existing client base by expanding current offerings, cross-selling new services, and thrilling the heck out of our them.  Our sales team, client service team, and operations teams formally reported in on their progress on a weekly basis.  We held everyone accountable. By sending a clear, consistent and constant message of hypergrowth, the focus on revenue became a daily responsibility of EVERY associate, and it was was incorporated into our company’s DNA.

Opportunism – In order for a company to get into hypergrowth mode, it MUST be able to identify or create new opportunities. Opportunism is a highly entrepreneurial trait.  A company needs to nurture and support creativity and risk taking in order to establish an opportunistic culture.  While it is very important to focus on key objectives, you have to also keep your eyes open for those windows of opportunity that may open.  This could be something a client needs which you do not currently offer, or perhaps a great acquisition, or even a new line of business.  Keeping a pulse on client requirements, and the market as a whole is crucial.  But the key thing here for hypergrowth enterprises is to keep fostering that culture of opportunism, creativity and risk taking, and letting your smart people come up with great ideas on which you can then capitalize.

Speed and Flexibility – Speed kills.  And so does flexibility.  The big advantage of small organizations is that they are more nimble and responsive that the big guys, and therefore they can grab more market share by doing things that larger and more inflexible competitors can’t do.  And, believe me, customers do appreciate this!  It can be tempting to fall into the trap of wanting to “cookie cut” a product or service offering, and then resist customizing it to a particular client’s specifications.  If you want to create a hypergrowth business, don’t fall into this trap.  For service companies, especially, not being flexible is risky for a bunch of reasons:  client dissatisfaction, revenue loss, lost opportunities, etc.  In our experience, by jumping through hoops for clients and delivering faster and better than our larger competitors, we grew astronomically, not just with these clients, but with others who had similar needs.  Again, it’s up to leadership to create and evangelize this culture of speed and flexibility through any means possible.  So many successful and FLEXIBLE hypergrowth companies have pivoted and morphed their business models into hypergrowth mode successfully, Facebook, Apple, and even Groupon and Living Social, being examples.

Business is Darwinian, and Charles Darwin himself said that it is the “adaptable,” not the strongest or smartest, who will survive:

It is not the strongest of the species that survies, nor the most intelligent that survives.  It is the one that is most adaptable to change.” – Charles Darwin

Part 3 of this series will address “Scalable Customers” as the thrid essential ingredient in scaling a hypergrowth enterprise.

Thank you for reading.  I’d love your thoughts, so please Comment below…and please sign up for my Blog too!  (See the Signup box on the sidebar of my Home Page)

Scaling a Hypergrowth Enterprise – Part 1 (People)

Each January for the past 5 years, I have had the privilege of presenting on “Scaling a Fast Growth Enterprise” to a group of MBA students who attend a 3-day “Start Up Bootcamp” run by John May of New Vantage Group and Tim Meyers of Capital Trust Ventures.  Students come from all over the country including UVA Darden, UMD Smith, U Michigan, Duke Fuqua, and others.

This Post is the first of a series of posts on the topic of scaling a hypergrowth company.  At CyberRep, we were able to grow our top line revenue from $550,000 to $22.5 million in 5 years. We then grew from $22.5 million to over $80 million in the subsequent 4 years. In retrospect, there were FIVE KEY ELEMENTS that contributed to our ability to grow so rapidly while maintaining high degrees of both client satisfaction and retention, as well as employee morale and retention.

These 5 elements are:  PeopleCultureScalable CustomersProcess, and Capital.  In these next few posts, I will explain in more detail my thoughts on each of these key elements to scaling a hypergrowth enterprise.

PEOPLE

Everything starts with people, no matter what kind of business you are in. Success begins and ends with getting the right people on Jim Collins’ proverbial bus.

Hiring – We look for 4 key characteristics in our people:  Integrity, Passion, Energy, and Execution capability.  In short, we want players who have high integrity, love their work (because passion is authentic and infectious), have huge reserves of energy (because all hypergrowth organizations require personal and group energy), and folks who can get the job done (critical for thrilling clients).

2 more important traits – flexibilty and resourcefulness.  We need staff who are flexible because plans change in a highly dynamic environment.  Further, since capital and human resources tend to be scarce in organizations which are stretched thin to support rapid growth, we need people who are resourceful and can do more with less.

Staff for the present but keep the future in mind – Every small and growing organization wants to hire the big guns, the heavy hitters whom you may not need right now, but whom you will surely need down the road.  However, you need to focus on the present tasks at hand, so it’s more important to get the best people for the job NOW, than it is to hire for that “future” position prematurely.  Predicting growth is very difficult, so staffing plans are seldom at an “optimal” level.  You will always be overstaffed or understaffed, depending on where your company is in its growth curve.  The key is to make sure you take care of today’s business while keeping in mind the future potential for personal growth of your new hires.  Not everyone will keep growing as the company grows, but that does not mean these folks can’t make important contributions.

Can your people adapt as the company grows?  Every team consists of diverse groups of generalists as well as specialists.  In early stage companies, there is a greater need for utility players, a.k.a. Generalists.  As companies grow, they start to need Specialists to fill specific roles.  The faster they grow, the greater the need for specialty positions.  Can your generalists make the transition?  Do they have the personality, ego sublimation, people skills, and technical expertise to transition, if necessary?  These are key questions which leaders face when hiring and developing their talent in hypergrowth companies.  In my experience, most generalists can’t make this difficult transition and are often left behind as a company grows.  I think it’s important for top leaders of hypergrowth companies to be cognizant of this transition risk and try to mitigate it by providing training and development opportunities to their A Players.

In the coming days, I will talk about the other 4 elements in scaling a hypergrowth enterprise:  Culture, Scalable Customers, Process and Capital.