Celebrate the Small Wins

One of my mentors once told me that the highs and lows in early stage ventures can be tremendous.  The mentor I speak of experienced startups from the level of CEO of an operational company with significant backing.  Just imagine his perspective if his experience would have been with an earlier stage venture.  Of course, he left the stability of an executive level position at a large hotel company to pursue a startup back in the late 90’s.  Regardless, his perspective and his point are worth considering.

In my fifteen years of experience in the world of early stage companies, I have learned that celebration of even the smallest successes can help overcome the lows mentioned by my mentor.  So much of what we do on a daily basis may not lead to any meaningful result.  For example, only a small percentage of the people we as entrepreneurs talk to on a daily basis may be able to bring us money.  At a conference recently, an entrepreneur who has launched many successful consumer products mentioned that he had to talk to 800 people to get 20 or more to invest in his latest venture.  In the early stages of a company, your learning curve is incredibly steep and your opportunities are quite volatile.  The deal you thought would save your company this month may disappear overnight.  The partner who was going to help you triple your revenue in six months may stop returning your calls.  To someone who is used to solid, trackable progress, this instability could be devastating.

It has been my experience that readjusting your concept of success is necessary in order to stay positive and survive in an early stage venture.  Celebrating the smallest wins, such as connecting with a key decision maker on LinkedIn or getting an email returned from an executive at a large potential client, will help you stay positive, happy and healthy.  I go through weeks where a single returned phone call could be a reason to jump around my office in excitement.  Again, a considerable percentage of time, that phone call may not lead me to the deal I was seeking.  However, having 10 connections with people like the person who returned my call could lead to much bigger success.  The key is to get excited and stay excited.

In a small company, everyone’s excitement and enthusiasm matters.  In a company with 5 people, each person has 20% impact on the success of the company.  You could argue that some people have a bigger impact than others, but that argument may lead you to underestimate the impact of one negative person on the success of your company.  Getting your team to celebrate every small win could help everyone to feel and stay excited.  You and your team will need this energy to overcome the many hurdles you will experience on your entrepreneurial journey.

Now, some people may say they have no time to celebrate every win.  My idea of celebrating is not stopping all productive activities and throwing a party.  Save those celebrations for the big moments.  My version of celebration is more like sitting back in your chair for a few minutes, smiling, and enjoying the feeling of just having accomplished something.  When I say celebrate, I am talking about embracing the powerful, positive feelings you receive from success, even if only for a few minutes.

Often times as entrepreneurs we are chasing big dreams.  The goals we look to accomplish may not have been attained before.  All entrepreneurs experience roadblocks and setbacks.  Don’t let Hollywood make you think otherwise.  In my experience, those teams that find ways to keep celebrating stay happier and healthier than those that focus only on celebrating major successes.  Staying in the game is the best way to be successful as an entrepreneur.  Staying happy and healthy is the best way to stay in the game.

Celebrate next time you get through to someone you have been pursuing.  Celebrate every time you get a sale.  Celebrate when you reach a critical technical milestone.  Create an environment of success, and success will find you!

Without Balance Even The Strongest Will Fall

Will running my last company, I came up with the quote "Without balance even the strongest will fall".  My intent was to articulate the delicate dance we must maintain as entrepreneurs between our work life and our personal life in order to stay motivated, happy and productive.  Too often I hear people talk about the process of starting your own company requiring 15 hour days 7 days a week for several years.  Tails of sleeping at the office or not taking a vacation for years are all too common among entrepreneurs.  It would appear that to successfully start and run a company, you need to forget your family, friends, hobbies and social life for several years.

In real life, we need our support network of friends, family and fun in order to tackle the seemingly impassable mountain we are about to climb.  Starting a company absolutely takes focus, passion and energy, but not at the expense of your mental health.  Further, we need connections with friends and family in order to be successful.  We will need to rely heavily on friends, family and fun to keep us motivated.

In my 15 years of entrepreneurship, I have found the highs and lows to absolutely magnificent.  Although the highs can be quite amazing, the lows may be more devastating than any you have experienced in your life.  If you are stressed, overworked with little or no connection to family and friends, these lows could be insurmountable.  On the other hand, a strong base of family, friends, hobbies or other outlets will allow you to move through these lows with minimal long term impact.  Personally, I have found a strong base to allow me to turn many seemingly low points in my entrepreneurial journey into life changing successes.  Having other outlets in my life allowed me to step back and reflect on the situation and gain the clarity I needed to move forward in a more positive direction.

As a final point, I want to tell a story about my days as a rower at Cornell.  In rowing, there are no superstars.  I rowed in a boat with eight other rowers and one coxswain.  It took all of us working in harmony to make the boat move fast.  I was in a position of leadership within the boat.  I never realized my impact until one day the rower in front of me turned to me and said “Tyler, when you have a bad day, the boat has a bad day.”  His comment hit me like a ton of bricks.  Until that moment I never realized the full impact of my leadership within the boat.  From that day forward, even when I was suffering, I had a positive attitude.  To my delight, we went on to win the championship that year.

The same is true for us as entrepreneurs.  When we are out of balance, our team is out of balance.  As leaders of our teams, we must stay in balance so that we and our team can address the seemingly insurmountable challenges we will face.

Creating Your Own Rules

I was at the grocery store this morning.  When I went to go pay in the self pay line, there was $40 in cash sitting in the money return slot.  Should I take it?  Should I give it to the cashier just in case someone came back for the money?  For me, $40 is a lot of money.

After ten years of running companies, where my only real direct report was my customers, I have learned I like the idea of creating a culture where I want to work.  I enjoy creating a culture I can believe in.  I like knowing that I can treat customers the way I want to be treated as a customer.  It feels good to know that I can make decisions I believe in regarding how to treat my employees, customers, shareholders and other stakeholders.

As entrepreneurs, we have no rule book.  No one is going to tell us what to do.  Some may think this allows complete freedom for us to operate how we choose.  To a large extend, this is correct.  However, people fail to realize that the stakes are far greater for every decision we make.  Although treating an employee, or worse a customer, poorly will not get us fired, it could lead to significant legal implications or a loss of our business entirely.  As entrepreneurs we have to realize that we are the leaders of our organization.  It is not only important, it is essential that we create a culture where employees enjoy working.  Our customers must know that we will treat them fairly.

My point here is not that we must take care of everyone on our team.  It is not that we must work to make every customer happy.  More often than not we will leave situations with either party feeling a bit uncomfortable with the results.  Letting an employee go for under performing is the right thing to do.  Neither you nor the employee are benefiting from the situation.  Agreeing to discontinue working with a customer that is draining your resources is the right thing to do, even if you have to repay money on a contract to make things right.  The important thing is that we know in our gut that we made the right decision.  Even more important, it is critical that those around us understand our decision.  We must be predictable and reliable.

Once I asked my trusted counsel over many years who has worked as a partner at some of the top law firms in Atlanta how the most successful people he knows act.  He said to me, the most successful people actually never raise their voice.  He continued to say that these people know once you raise your voice you no longer have control of the situation.

If you plan to start a company or you have already taken the plunge, realize that it is now up to you to create a culture you can believe in.  Take time to assess your decisions and your behaviors.  Realize that as the leader, only you are to blame when things go poorly.  On the other hand, we as leaders must swallow our own ego and pass along praise to those below us when things go well.  Read books and seek professional guidance regarding how to be a good leader.  Some of my favorite books are:

• Energy Leadership: Transforming Your Workplace and Your Life from the Core by Bruce D. Schneider
• Decent People, Decent Company: How to Lead With Character at Work and in Life by Robert L. Turknett
• The 21 Irrefutable Laws of Leadership: Follow Them and People Will Follow You by John C. Maxwell

My moral compass pushed me to return the forty dollars to the cashier.  There was no nagging angel sitting on my shoulder begging me to do the right thing.  It just felt like the right decision.

How Expectations Can Undermine Employees Incentives

My business partner in the first company I lead once said, “Employees don’t care about incentives.  Even further, a bonus or gift can upset them if they had expected more.”  Although, I learned many things from him, he had the absolute wrong attitude on this issue.  As leaders of our organizations, we must incentivize our employees. Incentives are a critical component to keeping people motivated.  However, I have found that placing an expectation on the emotional response from an employee once an incentive is provided can be a recipe for disappointment.  Of course, we must do our best to match an employees incentive with their performance to the best of our ability.  However, expecting that everyone will be happy with our choices will place unnecessary strain on the relationship between us and the employee.

I have found over the years that giving without expectation of someone’s response allows employees the freedom to express their own personal response.  Further, it releases me from managing their expectations, and it opens me up to being much more supportive to whatever their response may be.  Let’s say I give an employee a $1,000 bonus for helping on a $1 million deal.  The employee's initial response may be frustration that the magnitude of the reward was not proportional to the deal.  I could respond by being offended and upset with the employee's lack of appreciation, but this response will both shut down communication with the employee.  Once communication between us is shut down, I will have little chance of getting the employee to understand the reason for my decision.

A more appropriate response would be to embrace the employee's concern.  Let them know that you agree that $1,000 seems ridiculous when the employee helped bring in $1 million.  Then, leverage that place of understanding to explain your reasoning.  If your reasoning is truly fouled, this approach will give you a chance to change the situation for the better of both parties.  If you still feel your decision is sound, then stick with your decision.  However, continue to embrace the employees point of view.  This may sound like, "Given your view of the situation, I can see how you are frustrate.  I have made a decision I believe is in the best interest of both parties.  It is probably best that we agree to disagree on this issue.  I hope we can find a way to move forward from this disagreement."

It is important to make sound decisions regarding incentives, believe in those decisions, and leave room for others to disagree.  I have found this approach to create positive productive outcomes where all parties feel heard and appreciated.

Embrace Your Story!

Everyone has a story.  No matter what you do or what field you are in, we all have a story as to why we are where we are.  For those of us who pursue entrepreneurship, our story is more important than we often realize.  For every entrepreneur, there is a point where he/she saw an opportunity to make magic happen.  We looked upon a road full of pot holes, dead ends, and plenty of steep ascents, and we saw our own promise land.

During our initial push to start our company, we leverage that vision to rally our family, friends, customers and coworkers.  This vision for the creation of our company was a tool that inspired others to help us create our dream.

Years later we entrepreneurs have buried that story in features, benefits, and facts about our company or our technology.  We go out and pitch our stakeholders on what our company does or our technology is.  What gets lost is exactly what people really want to hear.  The story of that unforgettable, inspirational moment when you went down the path you are now on is forgotten.

People want to hear your story.  People will buy your story.  People will remember your story.  Embrace your story and wrap it into everything you do.  Stop pitching features and benefits and let people embrace the moment when you decided to create what you now have.

If you don’t believe me, just realize how much we pay to see a movie next time you go.  Think about the stories that inspire us, such as: Jerry McGuire (http://www.imdb.com/title/tt0116695/) or The Pursuit of Happiness (http://www.imdb.com/title/tt0454921/).  We love to see people around us overcome adversity and take on insurmountable odds that we personally may never overcome.

Embrace your story and figure out how to weave it into the culture of your company.  Leverage it to inspire others.  Most of all, let it inspire you!

Technology solves CUSTOMERS' PROBLEMS!

I was recently reviewing an executive summary for a company.  The summary did a good job of articulating a large market, a team to address this market and details on the technology the company intended to use to solve the problem.  The company also addressed how their technology was protected and patented, which is important.  However, something was missing.  When I got done reading the summary, I had no idea who would buy their solution and why.

As entrepreneurs in the technology field, we often focus too much on telling people details about our widget or device.  For example, our sensor can detect up to 9 chemicals within 10 microseconds.  These technical details seem important to us given the we have spent large amounts of time getting our technology to work.  As we talk to people and present our technology, we fail to realize why no one understands the value of these details.  We fail to realize that every detail we mention needs to be positioned in terms of solving a customer's problem.

Now, let's go back and review how we could improve that executive summary.  Having a large market, a good team and technology is important.  However, we need to fill in the gaps with details as to why someone would buy our technology and how many people have the problem we solve.  We must start with a customer or potential customer who has a PAIN.  Our executive summary should include little to no stats or information on the details of the product or technology.  It should focus on outlining the customer's problem and how they view your solution as solving this problem.  Similarly, the market section should emphasize how many people have this problem, and how much is cost them to avoid solving this problem.  The team section should highlight to capabilities of your team that are going to help you address your market opportunity.  Everything should focus on explaining who has the burning problem you want to solve, and how you are well positioned to solve this problem.

Let me stop for a second an emphasize that your biggest competition may be that the customer decides to do nothing.  Your potential customer can always chose to do nothing.  Even if it cost them millions or billions of dollars, they can chose to do nothing.  In all of the business plans and executive summaries I have read and created, I have found this by far to be the most under articulated competition.  Realistically articulating how your customer's ability to do nothing impacts your ability to address your market will go a long way towards building credibility with your audience.

If I were investing in a technology company, I would want to know as much as possible about the individual characteristics of the customers you intend to have.  I would want to know that their is a small targeted group of people who need your solution.  When I say "need your solution", I mean that they are losing significant amounts of money without your technology or that they could make tons of money by implementing your solution.  Connecting your solution to a customer's problem/pain will go a long way towards helping people understand that you have a valid business opportunity.

As an attempt to understand how to articulate the customer's problem, I recommend the following exercise.  Spend some time with your team building a case study that articulates the details of a potential customer's problem that you can solve.  Think about what they are doing now to solve this problem (i.e. ignoring it).  Think about how much their current solution to this problem is costing them.  Think about how much time, money, and energy they will spend implementing your solution.  Think about what other options exist to solve this problem besides yours.  Spend some time understanding what would have to change in their organization, both technically and operationally, to implement your solution.  Would they have to reorganize in order to use your solution?  Would they have to buy all new equipment?  Can they even use the output of your solution?  Does a $10M per year company care about saving $10K?  Push your self to think about the reasons why this customer would pay you to solve their problem (i.e. what is their return on investment).

Once you have a chance to put together this case study, use this as a basis to figure out how many people have similar problems to the customer you outlined.  Use this to help define the true market opportunity.  If there are large and small companies in your market, who would be the most likely to adopt your technology first and why.  Again, this process may help you focus on who your customers really are, what problems they have that you solve and how you are going to solve those problems.

I have written and read many executive summaries that read like the one I mentioned.  My goal is to help you understand and avoid the mistakes I have learned from my experiences.  As technology entrepreneurs we tend to want people to see us for our technology or our product.  The reality is that customers only care about their problems and how to solve those problems.  Sometimes you may even have to help them understand that they have problems.  Further, you have to help them understand that the cost of your solution is significantly less than the cost of ignoring the problem.

Hacking Through the Jungle with a Machete

As entrepreneurs in America, we are often surrounded by comfort.  If we feel the need for coffee, our favorite coffee shop is nearby.  For breakfast, lunch and dinner, our options are many.  When we go home, we enjoy all the creature comforts available to us in America, such as cable TV, movies, or a warm shower.  We drive reasonably nice cars, and our offices are typically nice, clean and pleasant.  All these comforts lead the entrepreneur to believe that he/she is living in a safe, comfortable environment.

The reality of the life of an entrepreneur could not be further from this illusion of comfort and safety.  Our day-to-day reality is more analogous to an adventurer trekking through the Amazon with a machete, than it is to the person down the street who has a steady paycheck working for a large company, a government agency, or some other stable institution.  We often have no safety net to catch us if we fall.  It is rare, especially in the early stages, that we have a cushion of cash to support us through a slow period.  We must careful weigh decisions, build our team, and manage our cash, because every team member and every resource counts.

The popular phrase, TGIF or “Thank God It’s Friday”, doesn't seem to work for me.  My version of this phrase is more like “Oh God It’s Friday”, what did I not get done this week.  Every day I look at my to-do list and wonder if I have done enough to earn the money I need to pay the bills over the coming months.  No one is around to tell me what constitutes a good job other than my customers and my creditors.  If both are happy, then I am doing is good.  But even they can be hard to read at times.

Now, just like any adventurer, living the life of an entrepreneur can be full of extremely rewarding and fun experiences.  My point in this blog is not to say that it is all doom and gloom.  My goal is simply to help illuminate the experience for what it is: an adventure.  I believe it is hard for us to understand our experiences as trail blazers when we are surrounded by comforts.  We are risking our professional lives daily in pursuit of our adventure, but the comfort of our environment fails to let us see this reality.

It is my belief that this dichotomy has lead many entrepreneurs to experience high degrees of stress and frustration.  We expect our experiences to align with our surroundings.  We live with spouses, friends and kids that have relatively normal lives.  Our friends seem to cringe when we tell them our latest struggles with customers, bills or employees.  To them, our adventure seems way too risky.  We start to believe they are right, and we lose sight of what we need to do to survive in this environment.  We get frustrated when we compare our lives to theirs.  This leads to a misalignment between our reality and our perception of our reality.  This discrepancy has derailed many an entrepreneur.

The best cure for lowering your stomach acid as an entrepreneur is to appreciate your situation.  Make sure you are properly accounting for the challenges and risk you are taking.  Realize that most people who are doing what you are doing are going to fail.  Realize that you need to protect yourself, your friends, your family, and yourself from these failures.  Build a network of others around you who understand your experiences, and who can counsel you through challenging times.  Leverage other peoples’ money where you can, because you are going to need more than you think.  Realize that the time it takes to get to each milestone will always be longer than you predicted.  Appreciate that you are walking a less traveled path.  Finally, remember that most, if not all, the other people at Starbucks will have absolutely no understanding of your day-to-day reality as an entrepreneur.