This morning I read Om Malik’s piece on DropBox and how they’ve become the company to achieve a billion dollar run rate in the shortest time – 9 yep, nine years!
The Internet might have hastened the pace of our world. The network has turbocharged growth and expansion. However, it looks that growing into business still indexes at human scale.
In the early naughts, when we’d meet venture capitalists, who’d ask “How will you become a billion-dollar business?” (my answer usually was we wouldn’t) and subsequently, when I heard young entrepreneurs pitch business plans, I’d often point out to them that average software product company takes 7-8 years to get to $50M in revenue. Yep 50M in run rate.
So if DropBox was able to get to 1 Billion in the same time, does that mean the clock has gotten faster? The two operative words here are unicorn and average – an even more important word might be run rate!
One way I’ve always thought about it, is despite all the advances in medicine, having a baby still takes – give or take – 9 months. A business in many ways, especially one that lasts, takes time nearer a decade to get to a significant size, on average!
Well, my email subject line actually read “Looking for advice/help.”
I’d just found out that I’ll be teaching a course on International Marketing (yay!) this coming semester. Once my initial euphoria died, I realized teaching a semester-long (14 weeks) course to a class of 21-year-olds was not something to be taken lightly. Hence the call for help to buddies of mine, who’s been molding young minds for more than two decades. The advice I got ranged from, “Oh, you’ll do great!” (fat lot of good that did) to a 90-minute primer on what teaching a course meant. As always I took profuse notes as my friends waxed.
When I went through my notes, one thing struck me – how much teaching a class well, required some of the same skills that any good leader (or startup founder) would need. So if I replaced the words “teaching” with “leadership” the advice was just as useful.
Here’s a quick summary of them.
Discover your leadership philosophy It’s important to understand and more importantly articulate both to yourself and your teams, what your leadership philosophy is. This isn’t as much what is right – Servant leadership or Leadership secrets of Attila the Hun – as much as knowing what works for you best and sharing it. If nothing else, answer for yourself, why are you a leader and how you plan to go about accomplishing this?
Understand your personal style Even leaders who share a common philosophy of leadership can have widely varying personal styles. My own personal style, regardless of the role I play in a team, is one of action – despite my oft-stated intent otherwise. I have seen folks who have a directive even aggressive style be just as successful as those who tend to ask questions and nudge. Recognizing your personal style and how it fits in with your leadership philosophy is important to help your team and yourself succeed.
State your expectations It’s important to articulate what you as a leader expect from your team. Whether what needs to get done, or how it needs to get done, stating this will save everyone a lot of grief. The more explicit and specific you are in articulating your expectations, the more likely they will be met. This is especially important when you take over as the leader of a new project, team or company.
Build on your strengths & share your experience As Peter Drucker put it “Make strength productive.” Building on your own strengths and sharing your past experience would help you be more successful and will give your team a sense of where you’ve been and lend credibility to your inputs. You need to balance sharing your experience against a tiresome telling of war stories.
Recognize people are different A team, whether it’s one you inherit or build, will likely consist of people who are widely different, in aspirations, attitudes, capabilities and working styles. If you have a large enough team, you’ll see something that approaches a Gaussian distribution – even in small teams, especially ones that you inherit, you will see a spectrum of personalities. Recognize this and keep the old adage Different Strokes for Different Folks in mind. You are less likely stumble and get frustrated.
I’d love to hear what your own experience has been both as a teacher and a leader.
Haven’t you found yourself wondering this in more than one situation? In my experience, the single most critical skill that leaders in general and startup founders in particular need is that of being a good communicator. While most of us find it easy to talk and some of us may actually listen, it doesn’t make us a good communicator.
How many of the meetings you attend seem not only interminable but often indecipherable? If this were a problem with just meetings, you could excuse yourself and read the meeting minutes. But alas meeting minutes, like many emails or other forms of written communication seem to only add to the confusion.
“What is this person trying to tell me?”
All of us are just as guilty as we dash off memos, texts, and presentations, sowing confusion at best and mayhem at worst. Here are three steps to help us communicate better. Try them and let me know how they work for you.
Single central message Whether a 3-line email or a 6-page white paper, your communication should have a SINGLE central message – what our English composition teachers tried to tell us – the theme sentence! This answers the question “What is this person trying to tell me?” So whether it’s the personal — “You need to spend less money on eating out” (that’s to my daughter), “We need to re-do the In-app Purchase (IAP) in this game (the professional)” or “We need to ensure ________ is not elected this year” (the national) or “We need a new nuclear disarmament treaty (the global) we need to communicate a single central message and no more in each of our communications.
Short as possible but long as needed This is one I’m yet to master and often undermines my own communication effectiveness. Even when I have a single central message if I wrap it with too many words, my message is lost. This could be emotional content (especially with my daughters), or excess justification (social or business context) or plain verbosity. Yet, in a corporate context, major changes require context setting, such as environmental factors at play, why this course of action and options considered – alternates considered and discarded and potential outcomes of actions taken or not. So the 3-sentence email one of my friends insists on writing may not always do the job, but ask yourself, does your presentation require 48 pages or can you say it any shorter?
Choose your medium carefully Sure writing email is easy – heck texting someone is even easier. But just as most folks agree, breaking up with your girlfriend (or significant other) over text is not cool, there is such a thing as an appropriate medium for any given communication. I’d say easier a missive is to send, the more likely it’s to sow confusion. Sure there are exceptions, but in general, it’s a good idea, to take a moment, before you send that text or email, to ask yourself, is this the best medium to communicate this message. I find often after having written a draft email, that picking up the phone or walking down the corridor to talk to the person a much more effective way to communicate. Similarly, even when presenting to a group of folks, few words on a slide or a graph to accompany your verbal communication or a handout might be more effective.
In summary, these 3 steps will help us take the first steps to being better communicators
What is my single central message?
Am I saying it as concisely as possible with adequate context?
What is the best medium to communicate this in?
An earlier draft of this article appeared in LinkedIn
“Why don’t you tell me what you know about placement in EDA?”
The questions started easily enough. My interviewer, Brent Gregory was this lanky gentleman with a very easy air about him. His soft voice and pleasant manner belied the incisiveness with which the questions came. Within five minutes, maybe sooner, he’d established the limits of my knowledge on the subject of electronic design automation. More importantly, he’d made me truly aware of what things I had clarity on and what I merely knew of.
The next fifty-five minutes were spent in educating me, on what it is his team was attempting to build and answering questions that I had. Here I was, having worked for over twelve years at that time in two countries – in a billion-dollar tech firm and in two startups– selling to other tech businesses across Europe, Israel, Japan and the US. Yet Brent Gregory in under five minutes had established the limits of what I knew – certainly as it pertained to his company’s business and focused on getting me to understand the problem they were trying to solve and why their approach was likely the better one.
Measure first before you cut This old tailor’s maxim can’t be stated too often. Brent Gregory taught me this lesson that first day I met him. He seemed to come into the interview with few assumptions – took the time to get to know what I did know (about EDA that day) rather than spending a lot of time asking me either needless form questions or trying to show me how much smarter he was than me (he still is!) As entrepreneurs we like to think we are action-oriented but how often do we plan (measure) before we act (cut)? By no means have I mastered this lesson, but I’m getting better at it.
Value your team Brent was unique as a leader – while he led a research group – practically every member of the group or so it seemed, was in a different country. He did have a couple of other folks in the same building, but he had an engineer in Goa, India – one in Spain (or maybe the south of France). While distributed teams were not unheard of, a single team with its members scattered around the globe had its share of challenges. However, Brent always made sure that the appropriate member of his team got the credit and recognition they deserved and held himself accountable even while protecting his team’s freedom to work from wherever they were. This in a company that would have preferred everyone being in the same building. Unlike many other scientists and researchers, Brent was also immensely appreciative of the marketing team and the value they brought and always prepared to listen and learn why we proposed some of what we did – even while his boss, our CTO, many times voiced his opinion that “our innovative products would sell themselves.”
Simplify The sign of good engineer for me is one who can explain what he does in simple words that mere mortals can understand. Brent in that regard has few peers to take a complex matter – such as our placement algorithm – and explain not just what it did, but why it did it that way and how it was not just different but better than other methods. This allowed not only the applications engineering team but the marketing team to better communicate, position and support customers with conviction. Simplifying without trivializing – is not an easy thing to do – as folks trying to explain the reasons to stay within the EU (against the Brexit) have recently discovered.
Seventeen years after I first met Brent Gregory, I continue to admire him for his understated and measured manner of working. Thank you, Brent, for teaching me a whole lot and being such a good listener.
A variety of people — colleagues, friends, managers and mentors have taught me many lessons that have helped me grow. This article is one in a series sharing what I’ve learned and my gratitude for the lessons they’ve taught me. You can jump to any of the specific posts in my gratitude series below.
My friend was in the process of hiring a private banker to help find a buyer for his business.
“I thought it went really well. He liked what we’ve done so far and felt that there’s some interest in the market. However, he feels it’s really important to improve our EBITDA before we can get a good deal.”
I almost fell out of my chair hearing this. No, not because buyers would like a good EBITDA but that my friend actually said this. The previous two years – we’ve known each other for 20 years now and he’s been in business longer – I’d struggled to get him to clearly state what his gross margins were and what was preventing him from having consistent profitability.My friend by no means is alone. Of course, younger entrepreneurs – many of whom come from technology backgrounds don’t have much exposure to matters of finance (or accounting). Yet having rudimentary financial literacy is critical for I’d argue all of us, entrepreneurs or not. But particularly for entrepreneurs, especially those NOT bootstrapping their businesses should understand the basic concepts and some key terms. As I’ve argued elsewhere, you should then be able to write out each of these, at any time, on a blank piece of paper – so that you have your important numbers at your fingertips. So here goes – with the warning, that these definitions are intended not for compliance to accounting as much to have a realistic image of where your business ACTUALLY is.
Of course, younger entrepreneurs – many of whom come from technology backgrounds don’t have much exposure to matters of finance (or accounting). Yet having rudimentary financial literacy is critical, I’d argue, for all of us, entrepreneurs or not. Entrepreneurs, especially those NOT bootstrapping their businesses should understand the basic concepts and key terms. As I’ve argued elsewhere, you should then be able to write out each of these, at any time, on a blank piece of paper – so that you have your important numbers at your fingertips. So here goes – with the caveat, that these definitions are intended to provide you with a realistic image of where your business ACTUALLY is, rather than for compliance with accounting standards.
Revenue – this is the money customers pay you. The simplest case is when you sell a product (an app, a book or a sandwich) for $0.99, $1.99 or $4.99 that’s your revenue. If you sold 1000 apps a month, your revenue that month would be $990 (1000*0.99) and for 1000 sandwiches it would be $4990. (Let us not in case worry that when you sell sandwiches you seem to make more money. Conceivably you could send millions or even billions of copies of your app – a little harder to do with sandwiches (or not if you are in India :). This is commonly referred to Gross Revenues for clarity.
Net Revenue In the case of selling sandwiches (directly), the entire $4.99 comes into your pocket. However in the case of the app, only 70% of the $0.99 makes it to you (after the app store aka your distributor, takes its 30% off the top). So the reality is that those 1000 apps you sell make you $693 (70%*$0.99*1000). This is a significant difference to keep in mind – for when we plan with revenue in mind, and not gross revenue, that 30% difference (or $300 in this example) is likely to come and bite us in the ass. This is even more important, in the case of marketplaces or services, where your business is essentially acting as a distributor – in which case you get to keep the 30% (or 15% or worse yet 7%) of the revenue and pay your principal the 70% (or 85% or 93%) of the revenues. Given the recent “hot” status of food-delivery companies (can anyone explain what’s tech about these) or any of the e-commerce companies, it’s important to not confuse gross revenues (or GMV – gross merchandise value as they call it) with net revenues. Before we all switch to selling sandwiches, it is important to keep in mind, that software or e-books have practically no incremental costs whether you sell 100, 1000 or millions of units. However, for each sandwich, we incur the costs of those slices of bread (or wraps) and all that you put in between them. This is termed as the cost of goods. So in conventional businesses Gross Revenues – Cost of Goods (- Channel Costs too if they are non-zero) is termed Net Revenue.
Gross Margins (or profit) Gross Margins are essentially the difference between (Gross) Revenues and Net Revenue – often expressed as a percentage. This is a particularly critical measure as the profits of your business are constrained by this value. And yes Dorothy, profits are why you are in business. The higher your gross margins, the higher profit potential your business has. Often gross margins tend to operate in bands for specific industries or businesses and this is a good thing, for you to be able to measure where you are relative to others. In the above examples, for the app business, your grossmargins are 70% and in the case of the sandwich business, assuming the cost of goods for your fancy sandwich are $2.00, then your gross margin is 60%($4.999-$2.00)/($4.99). In these examples, if you sell your apps directly to users – on your website – your margins can increase to say 90% or use cheaper ingredients in your sandwiches (or leave out the cheese) you can increase margins. Such gross margin increases often translate directly to your bottom line. Again keep in mind, we make money in dollars and not in % dollars – so knowing both gross marginsin % terms and absolute dollars is important. Do you know what your gross margins are and how you can increase them? Can you increase your gross margins to be so high that it can hurt your business? Yes, you can but that’s for another day.
Operating Expenses Simply put, all the expenses you incur, regardless of whether you make a dollar of revenue or not, are your operating expenses. And should you be lucky enough to make revenues, these are only likely to grow. So the cost of paying your engineers or employees, your rent and utilities, the cost of maintaining a website (and that fancy domain name you bought), advertising and trade show expenses are all operating expenses. In an ideal world, you’d try to keep your operating expenses low – but not so low that you are not able to ship product or deliver services that generate the revenue. And depending on the nature of your business, for instance, if you do drug discovery or build semiconductors, your operating expenses are likely to be high – even without R&D costs. Operating expenses too, like gross margins tend to operate in bands for specific industries, so you can benchmark yourself – allowing for where you are in the life cycle of your business (early, steady-state etc.). By nature operating expenses have some non-negotiables such as salary, rent, and utilities – you can decrease them only so much or not at all and others such as market or R&D expenses that are more amenable to adjusting.
Operating Margins This is your Net Revenue minus the Operating Expenses. This like the gross margin is a critical metric of the health of your business.When businesses talk about reaching operating profit, they are essentially saying that their operating margins are higher than zero. In your app business, if you are spending $4000 a month and bringing in $4500 in net revenues (70%*$6500 in gross revenues) then you have achieved operating profit. Operating profit does not imply that your business is profitable (yet) but is capable of being so. For instance, in the example cited, this doesn’t take into account the 1 year and $50,000 you spent already to get to develop your product and this run rate.
This operating margin is what the some bean counters love EBITDA – Earnings (profits) before Interest (on your loans), Taxes (yep those exists and you may have to pay them if you actually make a profit) and Depreciation and Amortization (lets not even go there). It’s a somewhat independent measure the ability to your business to make profits.
Net Margins In plain English this determines whether your business actually makes a profit – money you can put in the bank, or pay dividends with or better yet flow back into your business. So even though you may make real operating profits, if the interest on capital you’ve borrowed for instance is high, you may not have any net margins. This is why the cost of money or borrowing costs can make or break businesses that have high amounts of debt. Similarly, if you have to pay taxes (and you do if you make profits) this can drive your net margins down. At the end of the day, this is the ONE metric that will keep you alive and fund your growth. However, maximizing this requires you to manage every one of the above – increasing gross revenues and gross margins allows more money to flow into the company. Decreasing or managing operating costs and financial costs ensures you maximize profit and can fund growth.
The table below summarizes the terms discussed for a variety of different businesses
Can businesses run without making operating profit or positive EBIDTA? Did not Amazon do this for years and Flipkart and others doing this even as we read this? Sure – all that means is someone (investors, founders, in rare instance public markets) is pouring capital and investment into the business – usually with the reasoning that you are capturing market share or leadership and therefore spending more than you are making. They are also operating under the assumption, that one of these days you will make a profit and enough of it to justify the investment.
Meanwhile, for the rest of us 99%, knowing and keeping a good eye on these numbers would go a long way to ensuring you stay alive and thrive.
Marketing is probably one of the most misunderstood of functions – particularly in startups. Product development or even sales seem easy enough to understand but the average entrepreneur struggles with marketing. One of the reasons for this is our common confusion of activities (what does marketing do) and outcomes (what should marketing accomplish). The emergence of the internet, mobile and social media has only muddied the waters further. Popular media, particularly television and to a lesser degree the movies haven’t helped, painting a picture of marketers as either slick Madison Avenue types or slimy snake oil salesmen.
Theodore Levitt, the American economist, said “marketing … view(s) the entire business process as consisting of a tightly integrated effort to discover, create, arouse and satisfy customer needs.” Whilst I certainly agree with Levitt’s definition in his book “The Marketing Imagination” I’d simplify it to the following assertion:
For startups, at any stage, marketing has to achieve only one goal or outcome – profitable growth!
I’d argue there are only one of three ways to achieve this.
shorten the selling cycle
optimize the selling price
maximize profit in absolute terms
A little math before we jump into each of these. Regardless of whether a business offers products or services, profits boil down to
Profits (P) = Revenues (R) – Costs (C)
This would imply that anything that improves revenues or decreases costs, is likely to increase profits. So ideally marketing will increase R and decrease C thereby maximizing P. As our Chairman was fond of saying, there’s the minor matter of managing cash – it’s better for money to come in today rather than tomorrow – in other words we could be profitable on paper but still fail as a business because we ran out of money.
So what should marketing do? Marketing needs to be doing whatever is required to achieve one or more of these objectives which will result in the desired outcome – profitable growth (in case you missed it the first time).
Shorten selling cycles If your customers buy whatever you are selling sooner (than they would if you didn’t do any marketing) then you are doing something right. So if the brand value (or recall) will help shorten selling cycles you’d do that. If educating the customer (inbound marketing) or free trials (freemium), partnerships or Google ads shorten the selling cycle you’d do those. Alternately, any of those if they have no impact on shortening selling cycles, you’d abandon them. In other words, rather than doing what you did in your previous job, or what your competitors are doing, or what TechCrunch or HBR say is the hottest marketing trend, let the results drive what you do. You may use some or all the previous methods, but measure and keep only those that shorten your selling cycles. So any time your marketing team proposes a campaign or a strategy, you’d want to know will this shorten my selling cycle. Shortening selling cycles is the knob that you likely have the most influence over.
Optimise Selling Price One way to shorten selling cycles is to drop your price – it’s also a good way to go out of business or rush to the bottom at least. If you make a loss on each unit, no amount of sales volume is going to make it up. And dropping price alone does not make selling (or revenues) easier. Ask all those mobile app developers trying to sell a $0.99 app. And if that is hard, making a $2,500 course or $60,000 service, you’ll discover takes even longer. Selling at the highest possible price, that the customer is willing to pay or market can bear (real estate anyone?) is one way to maximise revenue. However, this may affect the number of units you may move and the time it takes to make the sale. The market for 5 million-dollar homes is finite – say you make one a year. Then again you’d have to sell fifty (50) $100,000 homes to make the same $5 million revenue, which may mean one a week!. So marketing has to make two critical determination – who’s our customer and what are they prepared to pay and how do I get them to pay me the best price? Again brand perception, may command a high price ($120 white T-shirts) or positioning – can you afford to risk your family’s safety (Volvo) – the cost of alternates or non-purchase (insurance) are all things marketers may do – with the optimising selling price. Different segments (homeowners vs farmers) may consume the same product (insecticide) in different volumes (frequency of use), form factors (storage constraints), and therefore price. The higher unit sales, at lower price (but high margins) of homebuyers may underwrite the lower price (and margins) at high volumes of farmers (which drives unit cost of production down). So segmenting, positioning and pricing are strongly correlated.
Maximize absolute profit “We make 200% (or even infinite) margin on each unit we ship,” would be a true statement for products such as software – where incremental unit costs are negligible or even for a sandwich or burger. But such unit margin is illusional if you take the cost of all the software engineers or cooks (and the rent to house them). Unit (or gross) margins are important, but high or at least positive net margins are nicer. Even if you make a profit on each sale, funding new product development or growing your revenue requires more money – in which case profit (gross or net) cannot be a matter of only measured in percentage terms but in absolute dollar terms. Almost for any business (there are exceptions) this means growing revenues while maintaining or even growing margins, so that you can at least keep up with inflation that leads to increasing salaries or other input costs, even if you don’t wish to innovate or grow. Marketing can help achieve this by bringing growth – be it demand creation (new markets), greater market share (revenue growth) that will not just increase revenues but profits.
Everything else, you’ve learned or heard about marketing whether the four Ps (product, price, positioning, promotion) or four Cs (consumer, cost, communication, convenience), inbound or content marketing, paid or earned media or any other flavor-of-the-week are all mere methods or tools to achieve these objectives.
This last week, Brad Feld, a managing director at Foundry Group in Boulder, Colorado – shared a video (below) he’s made for an upcoming event about Entrepreneurship & Mental Health. Brad as an entrepreneur who went on to become a VC belongs to the small group of VCs (including Fred Wilson, Mark Suster) who are both prolific and compelling writers – demystifying the venture world, entrepreneurship and often taking a very pro-entrepreneur stand. I’d thought of Brad alway as different given his location in the Rockies (Colorado) rather than either of the coasts (Silicon Valley, Boston or New York) where most of the well-known VCs are based.
Brad’s open discussion of mental health issues, including his own depression, that he’s written about (here) and spoken about (here) makes him a very special person. In India, we’ve seen folks such as Indian actress Deepika Padukone recently talk about her battle with depression (video) and young entrepreneurs such as Richa Singh, who founded YourDost, and Shipra Dawar who started ePsyClinic try to help young people address mental health issues. Last October at the demo day of the Brandery, I saw Jordan Axani present his startup Bounde, which is “Tackling mental health through technology.”
In India, as many folks have commented two big challenges lie in the way of people getting the mental health support they need
Social stigma – both ignorance and the stigma (or fear of being branded) mentally unstable
Access to good counselors/psychologists and psychiatrists
In the US while neither of these issues is fortunately as big a hurdle, as Brad points out in his video – entrepreneurs in the US (and in India) suffer from the social pressure (real or perceived) of having to be strong leaders, without too muchany self-doubt or exhibiting weakness. Also in both countries, certainly in the entrepreneurial ecosystem, there is little or no talk of mental health issues – which is a big shame. With folks such as Brad talking about it openly and with young entrepreneurs who’ve faced mental health issues themselves or seen in around them, we’ve taken the first step.
Entrepreneurship is hard enough without physical, emotional or mental health issues. But addressing these is critical for both individual entrepreneurs and the ecosystem. And talking about it is the first step. So break the silence and talk about it. Doing so gives others both permission and encouragement to do so. What are you waiting for?
The entire company, probably little over 50 people, was in the room. It was the 9th of December 2005 and we’d gathered to discuss the news that we were seriously considering an offer to buy the company. Nearly twenty people in the room had been with us more than five years – through two major pay cuts and one minor layoff – another 20 with us over the last two years, when it was certain we were no longer going to die. So the topic of the meeting and its consequences were not merely financial or professional but deeply emotional. If we chose to be acquired, our success largely lay in the hands of the folks in that room, in their willing participation and agreement to the decision to sell. Early in the meeting, we posed the question what would be your biggest fear or concern, should we sell the company.
As you can easily imagine when you pose such a question, to a large group of people, none of whom were at a startup because they were shy or retiring, things could easily degenerate into a free-for-all. Also while we had planned to take half a day for the meeting, there was a lot of ground to cover. So the challenge we were posed with was, how do we get the team to not only have their say, but to get them to converge on a few important things, such that the biggest concerns not only get aired, but acknowledged and ideally even addressed in the meeting.
Amazingly the 50+ people were able to converge on their three primary concerns and were unanimous with their first concern – “What would happen to our culture, if we are acquired?” thanks to a technique called Nominal Group Technique. And were able to do it within 15 minutes. This is a technique that I’ve had the opportunity to use repeatedly in groups, as small as 8 people to as big as 55, – to get rapid convergence – often from a standing start – of even what the key problems were that we needed to solve and what are the top 3 or 5 things to do to solve them. The technique requires that I write a whole another blog post dedicated to it to explain the manner in which we’ve used it, adapting it for different groups not just across countries but across age groups, and different socio-economic backgrounds. This morning I read about the a technique called Indaba, that was used at the recent climate conference (COP21) to get nearly 200 nations to sign-off to a binding agreement.
Negotiations are difficult by nature. Managing negotiations between 195 countries in order to arrive at a legally binding agreement, on the other hand, is nearly impossible. This was the problem that United Nations officials faced over two weeks at this month’s climate-change summit in Paris. To solve it, they brought in a unique management strategy.
The trick to getting through an over-complicated negotiation comes from the Zulu and Xhosa people of southern Africa. It’s called an “indaba” (pronounced IN-DAR-BAH), and is used to simplify discussions between many parties. Read the full article here.
If you reckoned negotiating with one party was hard, be it with an employee wanting to leave or customer or partner wanting more for less, negotiating with more than one party is incredibly more complicated. Luckily there are proven techniques that can help you do so successfully. It would be good to get acquainted with them, well before you’ll actually need to use them. Better yet, try ’em out today!
I’ve written about negotiating before here and conflict resolution here.
As the father of two teens, there are many moments when my children ask, even implore, me to “Just tell me what to do!”
As a parent, it’s hard not to TELL your kids what to do. Of course there are far more times when they don’t want to hear the things I’d like to share with them. Mentoring entrepreneurs in many ways not that different from raising teens – you’ve gotta resist the urge to tell them “the answer” even when they ask for it and you’d better get used to your advice not being adhered to or at times even heard.
That of course never stopped me as an entrepreneur, mentor or parent from sharing, lessons and insights that I never cease to learn. Even while urging kids or entrepreneurs to focus on impact and the journey, rather than “success” – the question of how does one get to be successful comes up all the time. Luckily better men than me have grappled with this issue and here’s a short (3.5 minute) video that answers this very question. For those that prefer to read over watching a video, however short, I have provided a short summary at the end.
The eight secrets are
Passion – be passionate about what you do (& the money will follow as Marsha Sinetar put it)
Work – work hard but have fun. As Richard St. John puts it, be a workafrolic and not a workaholic!
Focus – focus – on one thing is critical to being successful
Persist – persistence is an attribute that comes up consistently
Ideas – be creative and constantly come up with new ways to think & do
Good – practice, practice, practice – so that you get good at what you do
Push – you have to push yourself, past doubts & doubters, obstacles to be successful
Serve – be of service, whether with your business or product or in life
One of the joys of being around entrepreneurs and academicians is that you get pulled in to interview folks – in person, on the phone or Skype, and sometimes as part of a panel. This last weekend, I was part of one such interview panel – where nearly six senior candidates who’d been shortlisted were interviewed. Three things struck me about the experience
How vastly different approaches the various candidates brought to the interview process
Even the senior candidates made some of the same rookie mistakes that you expect only younger ones to make
How we, as the interview panel, could have done things better (that’s a whole another post)
Ask questions – In this particular panel, the thing that stood out the most for me, was how few questions the interviewees had for us as a panel. Sure they’d spoken to the hiring manager over the phone prior to the interview, but given the panel had veto power (did they know that?) it would have been better for them to ask more questions. While this is true even for 1:1 interviews, with a panel it’s important to understand what different people in the panel expect both of the role that you’re interviewing for and of the interview process itself. This will make sure you are neither blind-sided nor leave something unaddressed. Even more importantly your questions often will say a lot more about your than your answers.
Be specific A panel, with the very fact there are more than three people (ours had five), can easily get bogged down when it comes to decision-making. So it’s very important for you to be very specific with both your answers to their questions and even with your own questions. This allows you to stand out as a candidate. This requires you to avoid generalities – such as “I have strong networks in the community” and you’d be better of with specifics such as “I was able to recruit six mentors from the community in my first three months on the job. And these folks served with us on average for two years.” Balance the desire to be specific with the need to be concise – not always easy, but with practice can be done.
Be concise If you are like me (poor you!) the temptation is great to jump right in, when a question is posed. All too often, I get excited about the topic – which is usually why I’m there – and begin talking or responding. Two tips to being concise – clarify what is being sought and validate whether you’ve answered their question. We make assumptions that may just not be correct – it is better to clarify before attempting to answer. In our specific job search, we wanted the candidate to make his organization, financially independent at some point. One candidate anxious that this was important to us focused on becoming self-sufficient within two years – which meant she recommended doing a lot of things, not central to the business, just to generate revenues. Clarifying the timeline over which the panel expected the organization to be self-sufficient could have easily avoided this.
Demonstrate Interest Many interview candidates assume that they are demonstrating interest by showing up. Why else would they be there? However, while showing up is necessary it is definitely not enough to show your interest in the job. The most attractive candidate – going by their resume and phone screen – turned out to be lowest ranked in our panel, due to the utter lack of energy and interest demonstrated by his body language and cadence during the panel interview. Most organizations are looking to hire people with energy and a good deal of motivation to make things happen. Sure they want to know and prefer you’ve done it before but are you willing and ready to do it and more, again? So it’s important to demonstrate interest – which of course asking questions, clarifying and engaging will all help you.
Not surprisingly most of these tips are useful for 1:1 interviews. However, it’s both easier to develop rapport in 1:1 interviews as well as recover from mistakes, with a little honesty and self-deprecation. Even the best of candidates can be undone with a panel, if there’s either non-alignment on the other side of the table or you don’t address the primary careabouts for the key decision makers on a panel. Share your own experiences interviewing with panels and what’s worked for you. Good luck!
Over the last several years, I have written about startups, entrepreneurship and business in general in the Hindu BizLine and Wall St. Journal. I have compiled these for easy access in the column below.
You must be logged in to post a comment.