The Entrepreneur Life

Category: Entrepreneurship (Page 1 of 11)

Coachability – a key to founder success

Coaching

As I interviewed a variety of founders, lawyers and venture capitalists for The Art of a Happy Exit, the term coachability kept popping up. Tim McCarthy, who’d founded a marketing agency that helped chain restaurants improve their worst outlets  was the person who first brought this up to me. 

Tim, who sold his business in an all-cash transaction for 9-times EBITA, went on to start a non-profit as well work with young entrepreneurs. As most of entrepreneurs do, he jumped into both these activities feet first.

Tim who’s directly coached hundreds of entrepreneurs, learned the hard way about coachability. In his own words, “I wasted hundreds and hundreds of hours.” By that he meant he took every person or call that he came to him before realizing that most were coming to him for money but few were really prepared to listen. So he came up with a two simple questions that he must have an answer to before he’s prepared to spend serious time with someone seeking his inputs or help.

  • Do they have listening skills? 
  • Are they determined to change?

But answering even these questions require significant time. So he devised a simple process. They need to write, yep provide written answers to a template. Tim won’t commit to anyone who won’t write. This in many ways leads to self-selection with only 10% of those seeking help willing to do the writing work. Tim has also begun gathering them in peer groups, along with other folks seeking help. As Tim wryly puts it “They quickly tire of hearing me speak!”

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Tim is one of the entrepreneurs featured in my book, The Art of A Happy Exit – How Successful Entrepreneurs Sell Their Businesses.

What your team wants may impact your happiness

Team Work

One of my pet peeves is how common the perception of a “hero entrepreneur” is. Steve Jobs or Elon Musk are amongst the two most common responses my students give when asked to name an entrepreneur. While these two men have accomplished much and altered the lives of millions, this continued veneration by much of the media (whether newspapers, television or the ocean of writing that’s out there) swamps the truth that entrepreneurship (like innovation) is a TEAM sport.

entrepreneurship (like innovation) is a TEAM sport. Click To Tweet

As anyone who’s stayed on at the end of a movie (I’m one of those chaps) to watch the entire credits roll knows, movie making involves hundreds of people at the very least. Startups and entrepreneurship is no different, a cast of thousands usually are toiling to make an enterprise successful. Of particular note amongst these are the co-founders and early employees many of whom not only buy into the vision but take what’s fuzzy and shape it into reality. In most cases, including in my own, they keep the founders honest and focused, not getting distracted by the next shiny thing all too often unacknowledged and at times at significant emotional and professional cost.

Once an individual has been exalted to hero status by the general public, there is an implicit level of responsibility we place on them, whether they want it or not. We end up projecting our loftiest ideals of character onto these people and forget that whether its Mahatma Gandhi or MLK, they were always just human beings.

Efe Otokiti

The very attributes that can make a founder successful—perseverance in the face of great odds, repeated missteps or even failures (that don’t quite kill the startup) can make them pig-headed (boy, do I know!) So the hero myth only makes it worse as they drink their Kool-Aid and believe in their own infallibility. Surprisingly many founders who ultimately exit their business find out it’s hard to be ‘happy’ despite their ‘success’ financially or otherwise, if their co-founders or employees don’t get what they want. And it is easy to imagine that this is unlikely to be the case when those employees or co-founders get a good or even great payoff.

As I learned in my own startups, while making money (or the thought of it) makes people happy (for a few minutes to months), everything from the trivial (“What do you mean I’ve got to pay taxes?”) to important (“What is my role going to be?”) all the way to the sublime (“What’s going to happen to our company culture?”) can muddy things at best or make them unhappy at worst. And of course as humans we are all to likely to succumb being happy with the $250K we made till we find out the next chappie made $255K! So what should founders do?

Here are three simple steps to begin with

  • Recognize that entrepreneurship is a team sport and acknowledge your team mates publicly and repeatedly
  • Ask and listen what their expectations beyond money are and be prepared that they might not be the same as yours
  • Factor their needs and expectations by discussing and if needed educating them in how you run and exit your business

This is one of the topics that’s covered in my book, The Art of A Happy Exit – How Successful Entrepreneurs Sell Their Businesses.

The big role luck plays in our lives

4-leaf clover

One of the topics that we don’t talk a whole lot about in entrepreneurship is the role of luck. Luck of course can mean very different things to each of us. While commonly people tend to think of luck as good fortune, something over which we have no control, others view it as a matter of being open and responsive when new opportunities present themselves.

“Always say Yes!” I heard Andy Billman, the former president of Worthington Cylinder say this to my class at the Ohio State University back in 2017. Since then I’ve heard him repeat, even exhort folks to say yes, when an opportunity presents itself, such as a promotion or a move to a new location.

Two weeks ago I had a guest speaker Ellen Desmarais come in to speak to my Advanced Concepts in Entrepreneurial Studies class. Ellen in recounting her professional journey recalled that in her first job at a large credit card company an opportunity arose for her to move to a new business being set up in London. She jumped at the opportunity (as though she’d heard Andy Billman’s voice encouraging voice) and found herself at a ‘startup’ with all the freedom to experiment and but with the safety of a large organization backing it. As the years passed and new opportunities, jobs and roles arose, the lessons from that era of a rapidly growing new business continue to serve her.

“It’s a great example of how luck at some point will factor in your life.”

In my own career, luck has figured in a multiplicity of ways. The common one was often of poor timing—such as when we conceived and built an Apple Watch equivalent in 2004 (battery life, interoperability were not ready for wearables), pitched a GPS-powered game scenarios in 2007 (which eventually we saw Pokemon Go make happen).

Other times we’ve had the good fortune of customers sharing with us creative ways in which they’d put our technology to use. A customer from Korea, played Desert Rose by Sting on wireless headphones they’d built around our Bluetooth technology. This was an idea my engineers had pitched repeatedly to an non-receptive me. That chance encounter in a San Jose hotel persuaded me to finally agreeing to focus our entire company on wireless stereo music the led to the eventual acquisition of our company. Of course a great deal of smart people had to put in an enormous amount of effort, yet if that chance encounter hadn’t happened or I hadn’t said Yes, as Andy would have surely told me, I wonder how many other dead ends we’d have run down.

Thank you, Ellen for sharing your journey and insights.

Here are some other interesting takes on the role luck plays in entrepreneurship.

The Secret to Good Storytelling

Each semester as the entrepreneurship class that I teach reaches about midpoint, I find myself talking about storytelling and it’s centrality to business in general and startups in particular. You’d think storytelling would be easy, given how long humanity has been at it. And all those folks on Moth Radio and stand up comedians make it look easy. Yet telling compelling and concise story is a skill that seems in much shortage. This is a topic that I’ve written about before here, here and here and still talk about constantly.

Recently, I came across TED curator Chris Anderson’s video on what they’ve learned at TED about storytelling. The eight minute video (half the length of the typical TED talk, concisely lays out four points.

  • Pick one idea We often start with one, but it gets lost as we layer more on there. Don’t just stick with one but share context, give examples and link back to it throughout your talk
  • A reason to care Give your listeners a reason to care and the best way to do this is by stirring your audience’s curiosity. Provocation is one way to do it he suggests but I’d say try challenging them.
  • Build your idea piece by piece Most of us fall into jargon while trying to explain our ideas. Chris reminds us it is critical to use metaphors or analogs to explain in the audience’s language
  • Make your idea worth sharing No surprise since this is indeed TED’s byline. By articulating who benefits, you can help the idea spread

So not only can you tell good stories but inspire others.

The Art of a Happy Exit

Yesterday my father would have turned 92. Though my father had worked for 37 years at the same firm—rising from accounting intern to the CEO of multiple group companies—he was my biggest supporter when I decided to quit my job and become an entrepreneur.

Dr. K. Kuppuswamy

As a miniscule shareholder in my first startup but a major lender of working capital, he was our first angel. While I was in high school, my father used to regale me with a variety of tales, a surprising number of which came in handy during my own entrepreneurial journey.

As I’ve continued to learn from all that he’d shared, I’ve also had the good fortune to working with some incredible people who’ve mentored, coached, supported me and kept me honest.

Art of A Happy Exit

Yesterday was also the day my first book, “The Art of a Happy Exit – How Successful Entrepreneurs Sell Their Businesses” went on pre-sale on Amazon (USA India). While I wish my dad were here to see it, hopefully some of his stories will live on and help other entrepreneurs.

I love you dad and miss you.

Lessons Shower Design Fails Teach Me

The wife and I snuck away without the kids to the temple town of Kumbakonam, in Tamil Nadu. While visiting living temples dating back the 8th to the 12th c. CE was both awe-inspiring and humbling, the shower stall in our hotel had its own lessons. I’ve written in past about baffling designs we’ve encountered here, here and here.

I’ve never ceased to be surprised by the constant “innovation” faucet makers insist on foisting on us. Somehow hotels seem particularly vulnerable to the siren call of such innovations. On more than one occasion I’ve had to dash into the bathroom, when a hapless friend or spouse screamed from the shower. For Psycho fans, it was never a man with a knife, but invariably hot (or cold) water suddenly spewing on their head or their feet, when they expected nothing of the kind. Invariably turning, pulling, pushing, yanking up/down, seemed to do utterly different things in these showers. If this was not confusing enough, in the hotel in Kumbakonam, I encountered this faucet.

Fearful of getting cold water dumped on my head, I gingerly began turning knobs. This [Faucet] [Left] [Middle][Right] arrangement had me wondering if Left = Hot? and Right = Cold? and Middle = Shower? Or L=H, M=C, R=S? Did the fact that the Faucet was in the left rather than between the knobs less confusing or more? I don’t know about you, but figuring this out, at 5AM, without of a stitch of clothing on is not exactly fun. Of course none of the knobs had any markings, nor did they provide any affordance whether they’d turn 90 or 180 degrees.

It turned out that the left most knob—the one closest to the faucet—switches from faucet to shower. It of course turns 180 deg, so you can never tell, whether it is set to shower or faucet, till you turn the water on! The middle knob is HOT and the right most is COLD, maintaining the common left/right protocol for hot & cold.

Any shower design that requires your spouse to experiment and explain how to work it is a #fail in my opinion.

This was clearly a case of a product designer trying too hard to differentiate with little regard for a poor, naked, shivering customer’s plight. What would you have done differently?

Culture eats Strategy for Breakfast

Both in startups and large companies—heck in any company—culture is critical to success. This is something that I’ve been waxing about for close to 20 years now. And the criticality of storytelling in businesses is another favorite and recurring topic in this blog. So I was tickled this morning, to come across an interview of Paul Teshima, CEO of Nudge (and formerly of Eloqua) being quoted saying

culture eats strategy for breakfast, and business culture can be built through storytelling.

Paul teshimA

What was particularly gratifying about this was his assertion was made in the context of marketing and sales. Sales folks have always understood that relationships are critical to their success. However their challenge has been to quickly identify and nurture the most promising ones, as they balance their need to deliver on results on finite timelines with the lead times of building meaningful relationships. Good marketers recognize that their job is to help sales shorten their selling cycles, by getting qualified leads to them consistently. Storytelling is a powerful to achieve this and a culture that promotes such consistent storytelling to customers and serving sales’ needs will always will the long game.

Hear Paul tell it in his own words here.

Paul Teshima of Nudge.ai on Sales Pipeline Radio

Pitch Deck Advice from 2 VCs I Admire

Yesterday when I wrote about what can make your pitch deck sizzle, I alluded to the fact that there are excellent pitch decks out there. Rather than have you search for them, I’ve compiled two actual decks from AirBnB and Home61 here as well as templates recommended by two venture capitalists that I admire. Hope you find them useful.

Mark Suster is one of my favorite writers who delves deep in all matters entrepreneurs and VCs. His How to Create a Pitch Deck that VCs will Love is on the longish side but is where I’d start.

Brad Feld, another of my favorite writers/venture capitalists also provides a counterpoint, namely focusing on the pre-deck face-to-face pitch. In his words:

Feld often prefers more of a free-flowing conversation. So how do you spark an investor’s interest in that conversation? “The pitch should be very clear about what you are doing, why you are doing it and why I should care,” said Feld. “If you can cover those things quickly and precisely, it’s easy for me to decide whether I want to spend more time with you or not.”

How to Create a Killer Start-Up Pitc

Now here are two pitches AirBnB (2008) and Home61 (2018)


And if that’s not enough, here’s a whole slew of them from Forbes and Konsus (50 decks). Have at it.

3 Questions to Address that Will Make Your Pitch Deck Sizzle

Once again as I begin meeting with young (two high school sophomores) and not so young (their kids are in high school), the issue of making a short, yet compelling pitch to investors arises. Though a wide variety of folks have created excellent posts on what an ideal pitch deck should look like, I reckoned it is worth reminding folks of two things:

  • What is it that venture capitalists or for that matter any institutional investor (including some angel investors) are looking for
  • How best to address their needs but also attain greater clarity for yourself

Following a recent NY Times article and Jason Calacanis’ sarcastic response to it, Jason Fried wrote a nice post, about what it is that drives venture capitalists. In order to increase their probability of delivering double-digit returns year after year, amongst numerous other criteria, there are three critical things investors are looking for. These are:

  • HUGE market If the market is large enough, the probability that high and rapid growth is feasible increases
  • Proven team If the team has demonstrated success, the risk that they will NOT deliver is decreased
  • Unique competitive advantage The product/service/company brings something to the game that sets them way apart, giving customers a reason to buy – sometimes this is demonstrated by customer traction

While there are any number of other things are good to have such as customer traction, rapid sales growth potential, advisors and other investors, having two of the top 3 is critical. If you have a proven team and key competitive advantage and are NOT serving a large market, the investors can help direct you to the large market. Similarly if you are targeting a huge market and have a proven team, you can seek out a unique competitive advantage. If you have only one of the three, it can be an uphill sell to investors.

With the above as context, your pitch had better address upfront four questions

  • What is the problem or need you address? And who is your target customer whose need or problem you are solving?
  • How BIG is this need (or market) – units, numbers or revenue potential
  • How is it being addressed (or not) now and what makes your solution different? In other words why would customers buy from you?

These usually should be your first 3 or 4 foils. And they address two of the top 3 concerns for your investors – market size and unique competitive advantage.

You’d follow this with what you’ve actually accomplished. The trials you have run, ideally the customers you’ve already signed up or paid for your product or service, the feedback you are getting, the growth or traction you are seeing. In other words, you are real business with growth potential. And what are your next steps or milestones for the next 18 months broken down by quarters and what is your ask, “We are looking to raise a $2M (or $20M) round and how you plan to deploy the money you raise.

Depending on the audience you address, you can open with the team — “We’ve spent the last 30 years buying advertising and therefore know the problems advertisers face” to segue into the problem. My own preference is close the presentation with what makes your team the right one for this. By this time you’ve shown—not just through your presentation, your responses to their questions and your overall energy level rather than merely telling why you are the right folks to do this. Never hurts to be explicit though!

It’s worth keeping in mind, that your pitch is a living document. As you learn from each meeting you have, try to incorporate those insights. You don’t have to react to every single input, but when more than two or three people have the same question or input, it’s worth looking at what it is in your pitch that’s either not addressing it or possibly has it wrong. And don’t forget to share you pitch with your own team—you might be surprised both by how much of it is news to them, as well as the discerning feedback you might get from them. Get out there and break a leg!

4 Ways to Make Your Executives Fail

Last week, I shared some of the insights that Bea Wolper, entrepreneur and lawyer focused on family businesses, shared with my class. An area of special interest for Bea is how succession happens well (or not) in family businesses. She shared the four critical steps for succession (which is rarely seamless) to happen well. Upon discussing this with some of my students, it dawned on me, that this is just as applicable to startups and non-family businesses as well. And not just in a founder or CEO transition, but for any major role in a business – such as HR, Marketing or Sales heads. 

Checklist
Photo by Glenn Carstens-Peters on Unsplash
  • Ownership In a family business this is usually a controlling interest. In a startup or other enterprises, this is equity with the potential for significant upside. As Bea pointed out this is the easiest to “do” – you sign a piece of paper and it’s done. This is however only a necessary condition and not sufficient. If you do this alone, it is almost always going to result in failure.
  • Knowledge Change is never easy. Having a new person in charge without equipping them with everything that your organization and you know is dooming them to fail. This ranges from how things are done, who does them, how they are done and why they are done (or not) the way they are. I have walked into marketing positions, with nary an introduction to existing customers, current prospects and can tell you it’s not fun. Successful organizations, debrief and even put together a “Bluebook” of everything the person leaving the position knows for their successor. Ideally, you have a team, including the person presently playing the role do an ongoing knowledge transfer for the successor.
  • Relationships The old cliché “business is all about relationships” is true. So formally introducing the new person to key employees, key customers and of course key business partners—starting with bankers, component suppliers, channel partners is vital for success.
  • Authority This is where the rubber meets the road and even well run companies stumble. When you promote someone or hire someone new, but other employees still come to you or their old boss or colleague, you’ve not handed authority. Most times the founder/entrepreneur is the problem (or “Dad” in the family business) when he is not willing to relinquish his authority. So the new person while having the title has little or no actual authority – or what he has is undermined by others.

As you can see any one of these, even when you’ve done the other three well can cause your executives to fail. I’ve been guilty of violating every one of these, at one point or the other. Which ones have you not been giving adequate attention to?

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