Many of the entrepreneurs I work with dislike process. Some refuse to institute any type of process in their startup. That is usually their undoing.
My first business partner prided himself on being an “idea” guy. He would say, “Don’t bother me with the details.” One of my partners in a more recent venture loved to say, “The only thing we are dogmatic about is not being dogmatic about anything.” Neither one of those ventures turned out very well.
The devil is in the details and a certain amount of dogma is necessary in any business – especially in a startup. While process is not exactly dogma, it’s a close cousin and is also akin to culture. In fact, I would argue that the most successful entrepreneurs are dogmatic about both process and culture. A startup that does not have a fervent (almost religious) belief system, and a culture that embraces good processes, will never scale or mature into a highly profitable business.
Setting aside the nuances between process, dogma and culture, allow me to define what I mean by good process.
First of all, process for the sake of process is bad process. Bad process is often why talented professionals become disillusioned with corporate life and decide to strike out as entrepreneurs. Thus their inherent dislike of process. Bad process is also how bureaucracy creeps into an organization. Bad process is about unnecessary controls and irrelevant rules. They are often designed to benefit the few at the top of the organization at the expense of everyone else in the organization.
Conversely, a good process is:
- Simple. It is fool-proof and can be quickly learned and applied by new hires and temps.
- Efficient. It works flawlessly and it measures the right things – including when to change the process.
- Understood. It is crystal clear about the end it is designed to achieve.
- Practiced. It is religiously observed by every single person in the company.
- Self-reinforcing. The more people practice it, the easier their jobs become.
- Self-evident. Its value is not debated or questioned. When it is not practiced, it is missed.
- Consistent and Predictable. No one has to guess if or when to practice it.
A good process is documented and enables transparent decision-making. It does not depend upon interpretation, tribal knowledge or secrets. This is not to say good process is inflexible. It’s just not so flexible to cause wide deviations in how or when it is practiced by different people in the company. Most importantly, everyone knows how it is used by management to improve the company’s performance.
Over the course of my career it has often fallen to me to create and institutionalize a startup’s company-wide processes. The first thing I learned NOT to do was to try and transfer processes used at an old company into the new company. This is a common mistake of first time entrepreneurs. They leave their job at a big tech company and try to institute the processes they used there at the startup – often with disastrous results. Every startup is unique. Its processes should be considered, debated, created, tested and instituted with a fresh perspective.
In my next post, I will outline a process for doing exactly that. Stay tuned…
In business you learn quickly that there are only two types of people: buyers and sellers. It’s very easy to know who the sellers are. They make themselves obvious. They are actively trying to part buyers with their money. The hard part of doing business is knowing who the buyers are. They are not always obvious. They often don’t think of themselves as buyers and they sure as heck have no intention of parting with their money. Asking people to buy, or to even consider becoming a buyer if they are not actively in the market, is an art form that few sellers master.
The Art of the Ask is not just limited to selling a product or service. It applies to asking people to donate to a worthy cause. It applies to asking people for advice or introductions. It applies to asking people to join a club, volunteer their time, or support a Kickstarter campaign. We are all not sellers as much as we are all askers. To be successful at anything, we must learn to be good askers.
By way of background, I don’t hold myself out as a Master Asker. I am still an apprentice by most standards, but I have been in the presence of true Masters. What I have learned by observing them is that everything you do in life, every person you meet, is an opportunity to practice and refine the art of asking.
I learned the basic techniques as Rush Chairman for my college fraternity. When people show up at a rush event, they often don’t know anything about the Greek system or the fraternity they are visiting. They come to party and leave with a bid to pledge – making a lifetime commitment in the process.
After college, I went on to run a national non-profit foundation where I had to ask people for sizable gifts, including leaving a chunk of their life estate to the foundation. I ended up as an entrepreneur, where I needed to ask people for tens of millions of dollars in funding — using required investment documents that say: “If you invest in this company you will probably lose all of your money.”
All of these “asks” were tall orders, but they were all achieved by applying good asking techniques. There are true Masters far better than I to explain them to you. In any case, they can’t be explained as much as they need to be observed and practiced. With that disclaimer, allow me to share a few basic tips.
Asking is not selling. Every sale is an ask, but not every ask is a sale. Asking is way more effective than selling. You need to distinguish between the two. Being a good asker will lead you to becoming a good seller.
No one wants to be sold, but everyone wants to buy. People know when someone is trying to sell them something. No one wants to be sold. We all have a defensive, visceral reaction to being sold, as in, “They are trying to sell me a bill of goods.” We don’t want anything pushed on us, we want to make the choice to buy. A good asker will make us believe the decision to buy is ours. And more importantly, that what they are asking for is authentic.
No good ask results in a no. Most people don’t become good askers because they fear rejection. The best way to overcome this fear is to always ask in a way that the answer can never be no. Examples:
When I was extending someone a bid to pledge the fraternity, I never asked, “Will you accept our bid to join?” I always asked, “If I were to extend you a bid, what are the things that might prevent you from accepting it?”
When I was asking someone to donate to the foundation, I never asked, “Would you consider a tax deductible gift to the foundation?” I always asked, “In addition to taking care of your family, in what ways do you envision leaving your legacy?”
When I was raising money from accredited investors for one of my startups, I never asked, “Are you interested in investing in our Series A?” I always asked, “Given all the deals you see and have the opportunity to invest, what interests you most about the companies you decide to invest in?”
The answers to these questions lead to more good asks, which eventually lead to the prospective buyer asking for the terms under which they “might” buy. At that point, they become obvious and active buyers. They are choosing to buy, or are at least considering it. They never feel like they are being sold.
An ask is a give in disguise. Master Askers never think they are asking for anything. They believe in their heart-of-hearts that they are giving something valuable. The person being asked also believes that the thing they are being asked for will result in them getting equal or greater value by saying yes.
Ask twice, either or. A good ask is made more than once in the same conversation. The second ask is more subtle and is phrased differently than the first time it was asked. A good ask is never a “take it or leave it” proposition. A good ask always presents an option: If not this, than how about this?
Yes is confident, easy, painless or risk free. Even if the ultimate ask is expensive and involves a high degree of risk on the buyer’s part, a series of small, interim yeses can alleviate the objections and turn a likely no into a yes. This is why “free trials” work so well. Over the course of my career, I have often said, “Hey, if it doesn’t work out, I’ll buy it back from you for what you paid plus 10% for your trouble.”
Every ask carries gratitude and reciprocity. Lots of asks are favors. Master Askers never forget a favor and look for any opportunity to repay them — without being asked to do so. Always say, “Thank you very much, and please let me know if there is something I can do for you.”
If you master the Art of the Ask, you will truly be the master of your own destiny.
Much has been written about work-life balance. When my generation went to school and started our careers, work was Monday thru Friday, often 10-12 hours a day. Life was supposed to happen on the weekends. The boss would say, “Go home, spend some time with your family.” We lived for weekends and for vacations. We were told to work hard, pay our dues, save our money and plan for retirement – the day when we could enjoy life.
It was bad advice.
Life does not happen just on the weekends, or during vacations, or when we retire. Life happens every day, in every moment. There is no “saving” it for another time. There is practically no separation between work and life today in any case. Work is life. Many of us work from home. We are always “on,” connected to our devices and available 24/7 at the whims of bosses, clients and co-workers.
Allow me to depart some friendly advice: If you don’t take it as you go, you ain’t ever gonna get it.
This is not to say that you should not save and plan. Just don’t wait to live and enjoy all aspects of your life. John Lennon said it best, “Life is what happens when you are busy making plans.” Delayed gratification is an over-rated concept. The journey is indeed more important than the destination. This is especially true if you have more years behind you than you do ahead of you.
Here are some tips for taking it as you go:
1. When you travel for business, take an extra day or two to see the sights. Don’t be in such a rush to get home, or back to the office. If possible, have your mate fly in and join you at the end of the business part of your trip, or look up an old friend who lives near the city you are visiting.
2. Make a “no regrets” list and tick the items off every chance you get. No need to wait for the perfect time, or the right budget, to start doing the things you want to do in life. Whether it is traveling, learning a language or instrument, writing a book, or staring a business – keep a list, look at it every day, then seize every opportunity to tick them off. Measure your life by the things you have crossed off your list, not the things that remain to be done.
3. Do it alone. Probably one of the biggest mistakes people make in life, is waiting for someone else to be ready when they are. It is often difficult to sync two or more lives, you have to live your own life. If your mate, or your parents, or your kids, or your best friends are not “ready” – go do it without them. If you wait until they are ready, you might not be ready (or you might be dead).
4. Don’t just think about it — plan it and start doing it. The act of reserving a ticket, signing up for the class, listening to the Podcast, outlining the book or article to write, buying a used instrument, incorporating a company….etc., etc…has a power all its own. The act of moving towards something will magically pull you towards it.
5. Play hooky. Take a day off now and then, call in sick – go do something fun. Your work can wait, your life can not.
There is no such thing as work-life balance. Seriously, this is the best advice I could ever give you. If you want to get the most out of life, take it as you go.
Some experts predict that 40% of the companies on the Fortune 500 won’t exist in 10 years. In one lifetime, 88% of the companies on the original Fortune 500 list are gone. Experts say the extinction rate is accelerating dramatically. In their report, “The burdens of the past: Report 4 of the 2013 Shift Index series,” Deloittesays the average life expectancy of a Fortune 500 company today is less than 15 years. Wow, time is not what it used to be.
Conversely, that means that many of the companies that WILL be on the Fortune 500 list in 2025 are small companies today – or perhaps have not even been started yet. Are you working for a dinosaur? Hold that question for a moment, let’s switch over to job extinction.
In the span of one lifetime, dozens of jobs – indeed entire careers – have gone extinct. In many cases, that was a good thing, even though that was the way many people made their livings. According to Salary.com, at least 12 careers are on the verge of extinction today.
Conversely, there are a growing number of jobs (careers) that did not exist 10 years ago, according to Forbes, Kiplinger and other sources. The jobs of the futureare increasingly technical and specialized. Will your job exist, or will you be qualified for the ones that will exist?
Companies and careers are inextricably linked. One strategy is to place bets on which companies will be around and start angling now to get on (or be promoted) with one of them. In fact, Fortune predicts which companies will top the Fortune 500 list in 2025. A better strategy is to continue to gain expertise and hone your skills for jobs that are perennial, regardless of the company.
Companies and jobs will go extinct, just take care to avoid being one of them.
Here is how to avoid becoming a dinosaur:
- Customer Empathy. Understanding the customer and focusing your company or career on their pain points and desires is the surest way to survive. Many companies focus more on management and shareholder expectations than they do on customers. Many employees focus more on office politics than they do on spending time with customers. That’s the fastest way to become extinct.
- Reinvention. History proves that the companies that continue to innovate and reinvent themselves are the ones that stay on the Fortune 500 list. Those that milk their franchises and reinvest little in R&D are doomed to extinction. From a career perspective, employees that continue to reinvent themselves have the longest tenure in most companies. You can be the disruptor, or you can be the distruptee, either way, disruption in every industry is inevitable.
- Diversity. The more diverse a company — the more its employees bond and associate with peoples of all genders, ethnicities and cultures — the greater the chances of survival. Homogeneous companies with no women executives, no people of color, no young or aging employees, and no global presence, will die an unceremonious death.
- Alliances. Companies and employees that are active in their respective ecosystems and who partner and cooperative, even with the competition, will stand a higher chance of survival. Looking outside of one’s own industry and marketplace is the best way to keep a pulse on the coming changes. Forging joint ventures and partnerships with startups and growing companies in other spaces keeps a company and its employees fresh.
- Big Hairy Audacious Goals (BHAG). Companies that shoot far often land short, but they still find themselves further ahead of where they would have been with incremental improvements. Big goals inspire people, motivate customers, shareholders and employees. Meeting quarterly estimates and setting 10% growth targets is an invitation for those with 10X ambitions to eat you alive. It’s true of companies. It’s true of people.
In summary, if you are working for a dinosaur, start following the companies that are likely to be thriving 10 years from now. If your job or profession is likely to become extinct, prepare now to jump into one that is needed by the future. Test yourself and your company against the five attributes outlined above to not only survive, but thrive. As Yogi Berra famously said, “The future ain’t what it used to be.”
In my last post I argued that the answer to ageism is entrepreneurship. When you find yourself out of work later in life, you will need to create your own job. Note that I said “when” and not “if,” because it is inevitable for 80% of the working population. The unemployment statistics and the law of supply and demand bear this out, as well the dynamics created by an aging population and accelerated automation in every industry. If you’re not ready to go quietly into the sunset when your time comes, you’ll need some strategies and resources for starting anew.
There are a number of proven strategies available to you. You can start a business, join a startup, buy a business (or franchise), or be the business. Before I delve into each of these, allow me to outline some very basic steps for earning a living no matter what happens with your job.
- Stay current, be relevant. It’s easy to become complacent and stale. You need to keep up with the latest best practices in your chosen field, or those of the field you might want to jump into. Watch the programs and read the publications that follow market trends and new technologies. Be a shopper, a buyer, and an early-adopter of gadgets. Your kids and grand kids should be surprised to hear that you have tried the same products and installed the same apps they are using. If you understand the modern consumer mindset and their buying motivations and habits, you will always be relevant and in demand by companies who need to tap that knowledge and experience.
- Continue to build and expand your network. It’s easy to confine yourself to the people you have met, or only connect with those in your profession. You need to not only continue to build your network – especially with those just entering your profession, but you also need to expand your network beyond your current profession and sphere of influence. This includes investors, attorneys, accountants, entrepreneurs and creatives. These are the people who know where the action is – who keep up with what is going on. Get them in your network and develop a reputation for being one of them.
- Join communities, volunteer and contribute. It’s easy to stay home and focus on family and recreation after working hours. You need downtime, but you also need to see communities as an extension of yourself and your immediate family. Staying active outside of your job will keep you in touch and engaged. It is through these associations that new opportunities arise. A true professional finds meaningful ways to contribute and give back, and in return, finds meaning and direction for their own life.
- Upgrade skills, get certifications. It’s easy to rely on one’s former educational and training credentials as a calling card. Too many people get a college degree or a professional credential and think they are done. You are never done. See number 1 above. Most education and training quickly becomes irrelevant. Even if you are doing the minimum continuing education requirements that are mandatory in your field, you should always be adding new credentials, or becoming certified to perform other services. And even though much of this can be done today online, you should make an effort to attend classes, workshops and seminars in person, to get to know the instructors and other students (see numbers 2 and 3 above).
- Set goals. It’s easy to think it is too late to start anew, or to start a business, or to do something really great later in life. This is perhaps the biggest impediment to finding meaningful work and making a good living later in life. For those that practice steps 1-4 above, this thought never enters their minds. Well-known companies like Coca-Cola, McDonalds, and Kaiser Permanente were started by founders over the age of 50. Lesser known, but very successful companies, were founded by people well into their 60’s and 70’s. If you read their biographies, they all have one thing in common. They continued to set goals for themselves and do what was necessary to fulfill them. You don’t have to set big, audacious goals (although that is a tactic that motivates many to action). You can set a series of small goals that culminate into meaningful work and a very good living.
So assuming you take some of these steps, what are the strategies and resources available to you?
Start a Business
As I said in my last post, there has never been an easier or cheaper time in the history of the world to start and fund a business. The know-how and support community is everywhere; the funding options for good products and teams plentiful. You don’t even need an idea to start. You can apply to a startup accelerator like The Founder Institute. You can attend Startup Weekend, Switch Pitch, or 1 Million Cups. You can get help from the SBA and SCORE. You can subscribe to dozens of startup news feeds (SOS is one of my favorites) and join hundreds of Meetup Groups. The tools are also cheap and plentiful…here, here, and here.
Join a Startup
The startup ecosystem in just about every community in the world is bustling these days. Entrepreneurs are like insects…they are multiplying with abandon and living in the cracks and crevices of universities, corporations, non-profits, government agencies, and every other community institution. Most of them will die a quick and relatively painless death, primarily because they do not have theright talent. You can bring that talent. You have lots of startups to choose from. You can find them on Angel List and Gust. You can follow them on dozens of different crowdfunding platforms. You can join CofoundersLab, FounderDating,Founder2be, Founder Equity Directory, or any number of other startup founder matching services. If you don’t want to join a team, there are unlimited opportunities to be a mentor or advisor – often in exchange for equity.
Buy a Business (or Franchise)
According to the Bureau of Labor Statistics and the SBA, the number of businesses being started by people over the age of 50 is soaring. Many of them are choosing to buy an existing business or franchise. This route is often less risky and easier to fund than starting a business from scratch. There are tons of articles on how to buy a business or franchise. The best bet is to work with a business broker to help you find the opportunities that suit your experience and preferences. There are also a variety of no-money-down options and funding sources for buying an already profitable business.
Be the Business
This is the most common strategy for creating your own job. You can be a sole proprietor, incorporate yourself or form an LLC under a Fictitious name. All of these options are relatively inexpensive and puts you into business right away. The act of forming a business will move you forward, forcing you to package your expertise and services, and to begin selling yourself to others. Set up shop onUpwork, SpareHire, Toptal, Elance, or any number of other freelance sites. You can set your hours, set your rates, and even pick who you want to work for.
No matter what your age, or where you are in your career, practice the steps outlined herein to vastly increase your odds of staying employed. If you’re in the later stages of your career, out-of-work, or wondering what to do next, consider the strategies outlined herein. If you do, you will always find meaningful work and never find yourself out of a job.
We live in a throwaway society and it is a sad fact that the first to be tossed in the pursuit of profit are people. And the most disposable people of all are workers over the age of 50. Unemployment figures show that workers over the age of 50 are not only the first to go, but they remain out-of-work longer than their younger peers and have a much harder time finding new work. If and when they are rehired, it is often for part time and sub-par jobs than those they previously held.
Ageism is a pervasive, equal opportunity discrimination practice. Unlike sexism, racism, creedism, and every other ‘ism, every worker on the planet eventually becomes a victim. We are all going to be there sooner or later. If you are already there (as I am), you know what I am talking about. Odds are you have felt the sting of downsizing, outsourcing, reorganization, re-engineering, and old fashioned firing. If you’re not there yet, your time is coming – and sooner than you think.
There is no stopping Ageism, even in an enlightened society, because it is the most insidious form of discrimination. Sure, there are laws on the books to protect aging workers, but there are so many subtle ways to subvert the laws that enforcing them is practically impossible. The number of complaints filed with the U.S. Equal Employment Opportunity Commission has skyrocketed, but aside from a concerted effort to correct the stereotypes and misconceptions about aging workers, nothing much can be or ever will be done about it. Why?
Because Ageism is also powered by the laws of supply and demand. Anyone who knows anything about economics knows that this is an indisputable law. There are simply too many people who need to be or want to be in the workforce, than there are corporate jobs that pay a living wage. Technology and self-serve automation are eliminating those jobs at a faster pace than ever. If you think your employer is going to spare you, or the government is going to protect you, you are deluding yourself. Today’s brilliant programmers, designers and sales stars are tomorrow’s has-beens.
There is only one solution to Ageism and that is entrepreneurship.Fortunately, we are living in the age of entrepreneurship. Never in the history of the world has it been easier or cheaper to start and fund a business. The know-how is everywhere – universities, accelerators, incubators, online courses and blogs; federal, state and government agencies – all plying startup know-how. Most businesses today have a world-wide audience by default, including your local tee-shirt shop. There is no limit to the number of customers, vendors, partners and team members. They can live anywhere…work anywhere…buy anywhere. If you understand the concept of a business without boundaries, you can always create a job and make a living for yourself.
Obviously, many people have already figured this out. According to Kauffman, Gallup, and other organizations, the biggest increase in new business starts is by people over the age of 50. In fact, people over 50 are twice as likely to start a business as those under the age of 30. When I ran the first Startup Quest program in South Florida, the average age of the participants was 53 and all of them had a master’s or doctorate degree. Much has been written about the 1099 economy. 35% of people in the U.S. now work for themselves and that number is expected to grow to 50% by 2020. Think about that…. two of every four workers will no longer be W2 employees (working for the man) in a few short years.
Yes, the numbers and the facts bear it out. Entrepreneurship is the only answer to the vexing problem of Ageism. In my next post, I will outline some strategies and provide some resources for people over 50 to transition from the corporate workforce into a startup or self-employment. Stay tuned…
Last night I had the opportunity to facilitate an Ideation Bootcamp for the newFort Lauderdale-Boca Chapter of the Founder Institute. I am proud to be a graduate of the Seattle chapter and led the effort to organize a chapter in Tampa-St. Pete in 2012 (with moderate success). The highlight of the workshop is listening to prospective founders pitch their ideas. Almost all of them were awful.
To be fair, some of the ideas were not bad in and of themselves. They were just half-baked, which is to be expected. The first test of a good idea is how clearly it can be expressed in less than 30 seconds. No founder does this well without feedback, refinement and lots of practice. But let’s back up to the methodology that is required to determine whether an idea is any good, before it is pitched to an audience.
The first step is to brainstorm everything possible about your idea. Why do you love it? What are its core features and benefits? What emotions does it elicit? Is the gem of the idea driven by your passion, curiosity, anger, or unique insight? Is it just a possible money-maker…a quick flip, or something you would be willing to devote the next 20 years of your life to build? Clarifying the “core driver” of the idea will help you understand its potential from a commercialization perspective.
The second step is to evaluate how it is different or better than the current way of doing things in the space in which it will live. Is it an improvement in an existing product or service, or is it exploiting an under served market or niche? Is it an entirely new product or application, capable of creating an entirely new market? Who has succeeded and failed in this space and why? Is the idea really needed? Is it a must-have or a nice-to-have? How you evaluate what it can be will have significant ramifications on how you will develop it and what it will take in terms of time, money and talent.
The third step is to research the market need and customer appetite. You should survey potential customers, hold informal focus groups and test keyword ads on Facebook, Linkedin and Google to see how people respond. You should buy and use every competing product. You must assess the core value proposition in the eyes of the prospective customers. It is easy to fall in love with a bad idea. This step will force you to pivot or kill the idea.
If the idea still has merit after completing the first three steps, discuss it with ANYONE and EVERYONE who will listen. And you must do this with complete objectivity, as if you were a scientist observing the results of someone else’s experiment. You can not sell the idea in 30 seconds. You simply present it, and then you LISTEN.
That was one thing that few of the participants in last night’s ideation boot camp did. The goal is to get as much feedback as possible, not interrupt people and try to overcome their objections. Pitch it and then SHUT UP. Listen to what they are saying. They may love it or they may hate it, but more than likely, they won’t fullyunderstand it because you are not expressing it clearly enough.
This is always the hardest part of the ideation process. You must be willing to let go of a bad idea, or at least go back to the drawing board knowing it is only half-baked. It is human nature not to kill your creation. But before you max out your credit cards and devote the next several (very precious) years of your life to an idea, you might be better off to kill it and look for another.
Choose and commit to an idea only after you are able to express it clearly and concisely — and it elicits a positive, consistent response. Upon expressing it, people should “get it” immediately, not have to think about it or ask you 20 questions to clarify it. Your solution should be compelling. There should be no question who will buy it and why. Then proceed to build, test, observe, improve, re-build, rinse-and-repeat.
And remember the most important thing about all great ideas: they are realized by great execution, and always turn out to be something different than what was originally envisioned.
Every year about 43 million Americans move and spend more than $20B. Chances are you have moved and know what a hassle it can be. Unlike most industries that have been made more efficient and accountable to consumers because of the internet and mobile devices, the moving and storage industry has not changed one iota. It’s still an old-school process and a downright awful experience. Why?
My father recently moved from Valdosta, GA to SW Florida. The experience was a nightmare. After loading the truck they presented him with a bill for 3X the “binding” quote. They held all his worldly belongings hostage and would not tell him where they were stored. When he refused to pay the ransom for a delivery date they would not guarantee or put in writing, they informed him they were auctioning all his stuff. Only after involving the Federal Motor Carrier Safety Administration (FMCSA), the State Attorney General, the Better Business Bureau (BBB), the County Sheriff, and various senior advocacy groups, was he able to recover his belongings.
You might think this is the extreme, but it is quite common. He used a duly-licensed carrier that supposedly had good reviews (turns out the reviews were all faked). The FMCSA processes more than 3,000 complaints each year and the BBB processes more than 10,000 complaints. Check out any consumer reviews site (except those owned by the moving companies) and you will be hard pressed to find any moving company with more than 3 stars. There is only one thing consumers hate more than moving – and that’s moving and storage companies. That is a huge opportunity for disruption.
The industry is dominated by small businesses and day laborers that could benefit from some technological know-how. It’s an easy business to get into and most of it is local – 84% of all moves are in-state. 50% of moving and storage companies employ fewer than 5 people. Only about 9% of companies employ more than 100 people. The bill for their services is predominantly footed by an employer: 35% of people move themselves, 39% are moved by their company, 24% by the military and the rest by the government. The dynamics are ripe for disruption by giving the legit moving and storage companies — and their customers — an Uberesque platform.
Here are some of the disruptive features I want in my next move:
1. I use my mobile phone or digital camera to take pictures of every room in my house containing the objects to be moved. I upload those pictures to MoveMe.domain. The MoveMe platform will determine the dimensions of each object to be moved, compare it against a database of common objects, and estimate the weight and space required for the move. This generates the initial cost estimate range. After seeing the size/weight estimate for my objects, I can make non-binding adjustments.
2. I enter the move-from and move- to addresses, preferred pick-up and delivery dates, and extra services desired (like packing and temp storage). I ask the platform to supply bids from bonded and licensed movers that have been trained and pre-qualified by the platform.
3. I receive the bids, check out their user reviews and qualifications. I select my mover based on their availability, binding guarantees and other personal preferences. I then make the deposit. The money is held in escrow by the platform.
4. On the day of the move the movers use their mobile phone or tablet to account for every object to be moved BEFORE touching them, make adjustments to the size/weight requirements and generate a new binding bill. (I may have missed some objects in step 1, or perhaps got rid of some objects that no longer need to be moved). This will also include boxes I have packed and did not account for in step 1.
5. Any broken, chipped, or scarred items are noted BEFORE touching them and I sign off on those flaws. A copy of the inventory (every object) with these notes is emailed to me immediately.
6. I agree on the final bill and the movers pack it and load it. (If I don’t agree with the bill, there is a 1-800 number for an ombudsman that can help mediate and resolve the dispute on the spot. If we can’t agree on the final bill, I can cancel the job and my deposit is instantly refunded.)
7. A Bill of Lading and insurance binder are generated and emailed to me. A GPS beacon is placed in the shipment so that I know exactly where it is at all times and can track its progress. I receive regular email updates as to the estimated delivery dates and times, considering weather delays, break-down delays, etc.
8. My belongings arrive and are unloaded. I note any discrepancies between the condition of the objects upon packing/loading and the condition upon unpacking/unloading. I note any missing items. If items are missing or broken, the insurance I purchased covers it, or an adjustment is made on the final bill. There is a 1-800 number for an ombudsman that can help mediate and resolve any disputes regarding the condition of my belongings.
9. I pay the movers the balance using my mobile phone, including the tip. I give them a rating and add comments/pictures on the experience. We all have beer and pizza.
There are all kinds of other innovations that can be deployed on the mover-side of this equation. More efficient ways of packing, loading and unloading; accommodating multiple customer loads in the same truck, etc. The platform’s job is to make the process more efficient, transparent and cost-effective for the consumer, while helping the (good) movers optimize their time and profits.
Okay hackers, go forth and build. They will come!
Symmetry is a beautiful thing. Things that are symmetrical exist in perfect harmony. Each part is proportional, equal and inseparable. No part is greater or better than the other parts. Such perfect balance exists in nature, but is difficult to replicate within man-made organizations led by ego-driven human beings with a need for power and control. This is one reason why upstarts can topple the mightiest of companies.
Some of the best companies were started and built as a result of good team symmetry: Annheuser – Busch, Hewlett – Packard, Microsoft (Gates – Allen), Apple (Jobs – Wozniak), Google (Page – Brin), Mattel (Matson – Handler)…and the list goes on. In most cases, team symmetry was probably a fortuitous accident at the start, but building and succeeding was more likely by design. A startup’s first key hires will likely make or break a company: Microsoft (Ballmer), Apple (Markkula), Amazon (Kaphan), Google (Silverstein), Uber (Graves)…and the list goes on.
What does ideal startup team symmetry look like?
Not many studies have been done on startup team development. I am certainly not an organizational expert, but in my humble view, ideal startup team symmetry is a hexagon – it has six sides. Like a honeycomb, it has the smallest total perimeter. It has no gaps. It wastes no time or energy, and it produces the maximum amount of “honey.” A company may start with one founder (circle), two founders (semi-circle), or three founders (triangle), but it must eventually evolve into a six-sided symmetrical entity in order to maximize its chances for survival and success.
We can argue about what titles to give each side. Titles are not all that important, but defined roles and responsibilities are essential to startup success. I will argue the six essential roles are vision/leadership, finance, product (tech),operations, marketing, and sales.
Most startups try to lump finance and operations together into one role. They almost always try to lump marketing and sales together into one role. This is a mistake in my view. That structure creates a four-sided organization…a square. Squares are symmetrical and easier to create. Some may argue they are even more efficient than hexagons. The problem with squares is that they tend to become rectangles, with two sides becoming longer (more important) than the other two sides. This is how empire-building and team dysfunction happen.
I tend to think the bees figured it out and offer the best model for startup organizations. I think the ideal startup is a hexagon and fulfills six equally-important roles:
Chief Executive Officer (CEO) – you are the keeper of the vision and creator of the culture. You can clearly articulate the big vision and what it will take to achieve it. You are the leader, the face and voice of the company. You are in charge of everything and you hold yourself and everyone else accountable. You keep everyone aligned and moving towards the same vision. You attract and incentivize the leaders of the other five sides of the honeycomb. You prevent empire-building and team dysfunction. You attract the investors, key partnerships and other external resources needed to grow and succeed. You have the courage to make the tough decisions; change direction and people if it’s necessary for survival or growth. You never let the company get off mission or lose the will to fight.
Chief Financial Officer (CFO) – you are the keeper of the honey, where it is coming from and where it is going. You make sure that not even an ounce is wasted. You know the company revenue model better than the back of your hand. You institute good financial systems and controls. You make the other five sides of the honeycomb justify and defend their budgets. You regulate inventories and anticipate future financial needs. You take corrective action the instant things don’t look right…the minute the company is off plan. You have creative ways of stretching a dollar and extracting the best terms from vendors. You make sure the CEO and other four C’s know exactly where the company stands at all times.
Chief Technology (or Product) Officer (CTO) – you are the master of the magic, the reason the company exists. You work closely with the CMO and CSO to stay on top of customer requirements and expectations. You are ruthless about the product development and release schedule. You avoid feature creep and insist that what ships “just works” and scales across the entire platform. You are a student of UX/UI design, product management and quality assurance. You embrace and appreciate their roles in the product development process. You use the product every day and continually test it against competitive products. You understand everything about how every product in the category works.
Chief Operating Officer (COO) – you are an organizational and logistical genius. You are the consummate “inside” guy or gal; “Execution” is your middle name. You keep all the moving pieces operating like a fine Swiss watch: the facilities, the equipment and tools, HR and team support systems. The other five C’s are your customers. You see to it that they have everything they need to do their jobs. You are often a mentor/coach/confidant to the other C’s and key hires. You are the CEO when the CEO is away from the office. You execute strategies, you are the change agent when change is needed, and you are an exceptional communicator both up and down within the organization.
Chief Marketing Officer (CMO) – you are the channeler and the voice of the customer. You know the customer better than they know themselves. You live with them, understand their wants, needs, fears, habits and motivations. You know exactly how your company’s products appeal to them. You know what they read, watch and listen to – who and what influences their decisions. You reach them there and tease them; entice them to consider your company’s products. You are a master story-teller. Customers and influencers fall in love with your company and products because the stories that you craft around them are so engaging. The CSO is your biggest fan because you make his or her job so easy.
Chief Sales (or Revenue) Officer (CSO) – you are a natural born closer. You live for the deal. You are the engine of the company. No engine, i.e., sales and revenue, no company. You love this pressure, it drives you. You understand marketing – probably held the title Director or VP of Sales & Marketing before, but you know there are important differences between these two roles. You would prefer to let marketing create prospects for your product, while you focus on turning those prospects into long-term satisfied customers. You believe your best source of revenue are existing customers, so you focus as much on enhancing those relationships as you do on establishing new ones.
Naturally, each of these leaders should know how to hire their teams, build out and manage the part of the organization they are responsible for. In summary, the quicker you evolve beyond the simple symmetry of yourself and/or your co-founder(s) to a stronger and more efficient symmetrical structure, the better your chances of survival and success!
This is the last article in the series….I promise! If you were gracious enough to follow along, we covered the five dimensions most startups are evaluated on by investors:
To wrap it up, I wanted to touch on Alignment and Timing – two variables that influence whether or not a startup has a decent shot at getting funded after the five dimensions are evaluated by investors. And if funded, a reasonable chance of being successful.
After completing their due diligence, how the five dimensions are aligned (or not) in the eyes of investors will largely determine if they will be interested in investing. The underlining criteria in each of the five dimensions are evaluated differently by different types of investors. How those investors rate and assess the criteria and their alignment with each other (in their system of evaluation), will determine if they extend a term sheet.
You probably surmised by now that Five Star Startups are a rarity – very few come along each year. Every startup has flaws. Most flaws, however, are not fatal. Savvy investors know most things are fixable – and some have made a killing by helping to shore up the weaknesses and align their portfolio companies for success.
- The product can always be improved.
- A company can pivot to a more lucrative, underserved market.
- Exceptional people can be added to the team.
- Brilliant strategies can be devised, tested and executed.
- The revenue model can be perfected and the financing terms negotiated for a win-win by investors and the team.
But just because these things are fixable does not mean the company is fundable. It depends on what dimensions are out of alignment and what it will take in time/money/talent to align them for success.
Consider these three scenarios:
The IDEAL (very rare) Deal
If the underlining criteria in each of the five dimensions ranks high after due diligence, the startup is a great bet and will attract investors like bees to honey. The stars are fairly well aligned. The deal will be oversubscribed, the founders can pick and choose their investors. The risks to investors are manageable. These deals are rare.
The Fundable (more common) Deal
If the underlining criteria in product and strategy are sub-par following due diligence, the deal is still fundable as long as the market opportunity and team rank high. A good team can fix product. Smart investors can help fix strategy. And, of course, if the economics are strong, there will be enough investors willing to take the risk. These are the most common types of deals invested in by both VC’s and angels.
The UNFUNDABLE (typically rejected) Deal
If the underlining criteria in market and economics are sub-par following due diligence, the deal has almost zero chance of getting funded. This is especially true if the team is average (usually young and inexperienced) and the economics don’t make sense. Every investor (including myself) see these types of deals EVERYDAY. The product is usually awesome, but there is no defined market for it and/or no clear idea of how the company will make money. The risks are too high for most investors to want to help fix these problems – there are better deals to chase.
Upon concluding due diligence and assessing the rating and alignment of the five dimensions, smart investors will give serious consideration to TIMING. It’s a super hard variable to evaluate, but plays a critical role in a startup’s likelihood of success. As Victor Hugo famously said, “Nothing is more powerful than an idea whose time has come.”
If you get the timing right – and the five dimensions can be brought into alignment with a moderate degree of risk – you are golden. Bill Gross fromIdeaLab recently gave a great TED Talk: The Single Biggest Reason Why Startups Succeed
You guessed it, his findings found that TIMING was the biggest reason. In my humble experience, having founded seven companies and been involved as an investor or advisor in dozens of others, I agree wholeheartedly with his conclusion. In my small world as a startup founder/investor/advisor, being early and scaling prematurely has been the single biggest cause of failure. In hindsight, the task at hand was practically insurmountable, no matter how much money and talent we threw at it… no matter how passionate, how committed, or how hard the team worked.
That’s a critically important (and expensive) lesson for all startup founders and investors! It begs the need for more posts on the subject of startup timing: how to recognize it, and what to do if you are too early or a tad too late. I’ll try to take up this subject in future posts and would love the benefit of your insights and examples. You can send me your thoughts at email@example.com.
Thanks a bunch for staying with me through this series and to those of you who contributed your thoughts. Whether you are an entrepreneur, investor, or member of a startup team, I hope you found this series useful. For all of their challenges and risks, startups are still the best source of new innovations, new jobs, and new wealth. May more of your startups be FIVE STAR. Cheers!
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