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Archive for June, 2013

If the Shoe Fits: Cashing Out

Friday, June 28th, 2013

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mWho should make money when you finally cash out?

Most commentary I see talks about what investors and founders walk away with, but what about the rest of the team?

In an interview, Steve Blank addresses this in terms of the impact on valuation and cashing out after a large investment and how it affects what founders receive, but not its effect on the team.

If the founders walk away with a few million each after the investors take their 3-5X return, what will be left for your people?

Those are the people who made the company successful enough to be bought in the first place.

Most of you will agree that the great majority of startups will not have exits similar to Facebook or Google.

Knowing that, it is your responsibility to honor the social contract you made with your employees, when they traded their compensation for equity in your startup.

Therefore, it is of paramount importance for founders to never lose sight of the numbers; the more investment you take the lower your team’s return when the company is acquired.

Image credit: HikingArtist

Entrepreneurs: More On Viral

Thursday, June 27th, 2013

Going viral is every marketer’s goal, especially entrepreneurs with a new product/service/experience that needs to rise above the noise in order to be noticed.

Going viral requires some luck, as do most successes, even if it’s the serendipitous kind (right time/right place), but it’s mostly method, as discussed previously.

Research by Thales S. Teixeira, an assistant professor in marketing at HBS, identified “four key steps: attracting viewers’ attention, retaining that attention, getting viewers to share the ad with others, and persuading viewers.”

“The challenge lies in getting the best mix of all four ingredients and baking them into your ad.”

Read the article if you’re planning any kind of video/social media campaign; Teixeira’s insights and explanations will give you a much better shot at that success.

One of the problems is that entrepreneurs are so enamored with their products that they want to tell the world about it, so the world will love it, too.

But in a time of instant information availability and short attention spans, the world doesn’t care much about your product—it wants first and foremost to be entertained.

The research shows that if sharing an ad will somehow benefit the sender as much as it helps the advertiser, then the ad might go viral.

Things that tickle your funny-bone or touch your heart are always shared faster and longer than product facts.

YouTube video credit: EvianBabies


Wednesday, June 26th, 2013

self-improvement-to-self-acceptanceThe other day I was asked the same question by two different managers, one Gen X and the other a leading edge Gen Y.

The subject was improving and strengthening weaknesses.

They both wanted to know if/when enough is enough.

That’s a question I found an answer to a long time ago, so I shared it, with the caveat that just because it worked for me didn’t mean it was right for them.

The short version I shared is that I stop a specific self-improvement effort when the ROI is too low for the energy (mental, physical, psychical) expended; in other words, there is no viable payoff.

Of course, “viable payoff” is strictly subjective, but any self-improvement effort includes certain expectations (your own, not other people’s) that should include a minimum.

Minimum not met means no viable payoff.

That isn’t to say that I fall back on the tired “that’s the way I am;” instead, I always found ways to off-set whatever action or attitude I’d spent energy changing as far as made sense.

Part of this comes from measuring ROI, but it also comes from intelligent prioritizing, which requires the recognition that time is finite and one needs to pick one’s battles.

Perhaps that’s what life, both personally and at work, is really all about—much like the saying that the journey is the best part.

In fact, I hope that when I’m gone those who knew me will say, “From self improvement to self acceptance. A good trip.”

Image credit: JJChandler.com

Ducks in a Row: No Surprise Management (NSM)

Tuesday, June 25th, 2013

http://www.flickr.com/photos/michalogiorgakis/8649534648/Way back when I started this blog I wrote about the importance of creating a culture of no surprises, so it was with great interest that I read HBS’ Jim Heskett’s thoughts regarding the importance of a No Surprise Management (NSM), either. (Heskett’s previous discussion about servant leadership formed the basis of another recent post.)

Bosses don’t like surprises from their direct reports. But “no surprise management” works just as well when bosses don’t surprise those lower in the organization, says Jim Heskett.

Heskett is worth following, because he doesn’t lecture, let alone pontificate; rather posits a brief scenario, asks ‘what do you think, and draws his many readers into adding their thoughts creating a far richer level of information.

NSM should be a no-brainer for bosses at all levels, not just senior management.

As Larry Slate, Organ Preservation Supervisor, Gift of Life Michigan, so aptly puts it in comments,

Employees are expected to “dedicated, professional, accurate and ethical”. As employees we expect the same from management.

Or, as one manager recently said to me about his boss, “I give what I get.”

I think that pretty well sums up people’s feelings on NSM, as well as most other workplace topics.

Flickr image credit: Giorgos Michalogiorgakis

Three Categories of People

Monday, June 24th, 2013

all-knowing-leaderPeople have longed for an all-knowing leader who they can mindlessly follow and abdicate their decision-making, since time began.

Some seek this all-knowing leader in religion; others look to politics, while still others believe that business is a better source.

Their time would be better spent accepting the reality that no such thing exists anywhere in any walk of life.

Then there are the people who aspire to be that all-knowing leader.

To that end they amass thousands of friends and followers, network their way well beyond what’s needed to be a LinkedIn Lion and work ceaselessly to raise their Klout score.

Finally, there are those who know without doubt that all-knowing leaders are in the same category as the tooth fairy, Easter Bunny and Santa Clause and they aren’t them.

Which are you?

Flickr image credit: Warning Sign Generator

If the Shoe Fits: When Bad Stuff Happens

Friday, June 21st, 2013

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mA few days ago I was asked if it was OK to warn a startup team by email that it was doubtful funding would happen before the money ran out.

My response was ‘absolutely not!’

The final word from a variety of experts is that it is not OK to fire, lay-off, break up, ask for a divorce, ground kids or any similar action by email, text or even by phone.

These are all subjects that must be done face-to-face for a variety of reasons, but all falling under one of the falling categories,

  • Respect
  • Trust
  • Authenticity
  • Transparency
  • Fairness

The list goes on, but I’m sure you get it.

That said, I thought I’d repost a slightly edited how-to for dealing with bad news that is as applicable today as it was when hard-copy memos, wires, carrier pigeons and smoke signals were the normal modes of communication.

Bosses know when they’re in trouble (duh), but they still seem to think that their people don’t know the facts (double duh).

Too many bosses, from startups through Fortune 100 and everything in-between, clamp down, say nothing, run scared, freeze, bluster, or some combination thereof and do it by email and/or text.

The result is management by rumor, which once started never ends.

The way to deal with bad news is directly, openly and honestly.

Even when the subject is no funding or lay-offs this axiom applies; in fact, it’s the only approach that gives your company or your reputation a chance of emerging intact.

Here are six basics to keep uppermost in your mind—whether they are comfortable or not.

  1. Bad news must be communicated in person—just like good news.
  2. Employees aren’t dumb—they know something bad is happening—and if they’re not explicitly told what it is, rumors will make any difficulty a catastrophe and a catastrophe a death knell.
  3. Management must be explicit about the ultimate potential consequences. In a situation that’s unfolding, such as a funding or economic crisis, when no one knows the ultimate outcome or can predict when it will change, frequent updates are effective.
  4. Everyone hates uncertainty, which is all you may have to offer, so analyzing and then explaining the worst case outcome as well as what you’re doing to counter it and how your people can contribute goes a long way to stabilizing the team and gaining their buy-in to your plans.
  5. Successful plans are dependent on how well they are communicated, which is what determines employee buy-in; if you choose the delusional approach of minimizing the situation then you should expect minimal results and maximum disruption.
  6. Share the outcome of your thinking, whatever it is—layoffs, plant closures, project cancellations, etc. If you don’t trust your people with the information your problems are far more serious than you realize.

Any solution to a crisis must be seen as fair, reasonable, and businesslike. If management’s reaction is illogical, petty, slipshod, unrealistic, draconian or any combination of these, then it’s likely employees will conclude the ship is about to sink and leap off.

People understand that difficult situations demand difficult remedies, and they appreciate that management must at times step up to harsh challenges. But if solutions are irrationally or whimsically applied, they become a demoralizing factor, increasing the difficulties that people encounter in trying to do their jobs.

Finally, you should always attempt to find a positive note to leave with employees. Everyone already knows that things are bad; it’s your job to find a potentially favorable course of action.

Just remember, you hired your people for their brains, so don’t expect them to suddenly go dumb. Employees easily spot propaganda masquerading as a solution.

Predicting an impossibly favorable outcome not only demeans your reputation, but also could affect your future entrepreneurial efforts.

Image credit: HikingArtist

Entrepreneurs: The Fundraising Process

Thursday, June 20th, 2013

kg_charles-harrisI’ve always understood that fundraising is a grueling experience, but even though I’ve done it several times, it is like childbirth—one forgets the pain shortly after and does it again…

The difficulty lies within a few areas for those of us who weren’t fortunate enough to join Google or Facebook when they were less than 50 employees resulting in a strong network of people with lots of cash that are happy to invest in their friends and acquaintances.

When raising Seed funding or Series A financing the right contact network is alpha and omega.  But how can we develop one without having been in the aforementioned or similar environments?

First, even though it is intimidating, seek to develop a contact network that has the above characteristics.  This is not a trivial exercise for most people.  Wealthy people are not the norm in most social circles and how to find them and get them to meet with us face-to-face often seems like a mystery, but networking your way to solving that mystery is a must.

Then the challenge is to gain their trust.  What does this mean?  Well, you have to be able to communicate a vision of a technology and market that they likely know very little about in such a way they believe not only that it’s a good market, but also that you are able to create something to that will successfully enter it.

Gaining trust involves a variety of skills such as learning the language of the group you want to communicate with, understanding presentation formats, being able to take criticism and return (after having been rejected) with something better.  Showing resilience is always valued, although no one likes to be unduly bothered.

Once having gained their trust, meaning that you have promulgated a credible message around what you are doing and shown that you have the skills to achieve the vision, it will still be a challenge to get them to part with their money.

At this time they will be listening to you and interacting seriously, but actively seeking a reason to NOT invest.  It is always easier for an investor to avoid investing than making an investment – there are a lot of potential investments and knowledge that only very few will be successful.  As a consequence, it’s almost always easier to not invest.

This avoidance is aggravated by the fact that if you are outside of the investor’s circle of acquaintances, there is a lower level of personal affiliation and higher perceived risk.

In short, what you are attempting to accomplish as an entrepreneur in this phase of your venture is extremely difficult and most fail.

So, in fact, this is the first real test of your innovativeness, tenacity and mettle.

Ultimately, if you are innovative and have tenacity and mettle, you will succeed.

As in sales or dating, it’s a numbers game.  With time you will find the right investor and with that a completely new set of challenges.

Good luck!

KG Charles-Harris is CEO of Emanio and a special contributor to MAPping Company Success.

The Value of Thinking

Wednesday, June 19th, 2013

http://www.flickr.com/photos/alyssafilmmaker/3286298849/What do you think?

Do you think?

Or perhaps the question is ‘how do you think’ around the clutter and the noise.

“Nobody can think anymore because they’re constantly interrupted,” said Leslie Perlow, a Harvard Business School professor and author of “Sleeping With Your Smartphone.” “Technology has enabled this expectation that we always be on.” Workers fear the repercussions that could result if they are unavailable, she said.

Of course, there is the alternative of ‘why bother thinking’ when one can just ask and receive crowdsourced thoughts on any subject imaginable; from where/what to eat to raising your kids to how/when to die.

But what happens to the crowd when everybody stops bothering to think?

At that point the old saying, everyone has a right to be stupid, but some just abuse the privilege, kicks in with a vengeance.

Rather than joining the crowd, take time to think; you may be one of the few left who do.

Flickr image credit: Alyssa L. Miller

Ducks in a Row: Beating Isolation

Tuesday, June 18th, 2013

http://www.flickr.com/photos/glenbowman/208097410/Isolation is the best way to create a culture that doesn’t work, whether the isolation is directed or benign.

It can be group isolation or individual, but the result is the same—silos.

I discussed some of this a few years ago when I talked about smashing silos, but the need to remind people keeps popping up.

If you believe your culture is enough to prevent isolation because you have talked about it and said it was bad then I guarantee your reality check, assuming you do one, will bounce higher than a kite.

Talking isn’t enough; it’s akin to telling your cat/dog to stay off the sofa while you’re at work.

Beating isolation in all its evil forms requires constant and active vigilance.

Flickr image credit: Glen Bowman

Shrinking Interactions

Monday, June 17th, 2013

http://www.flickr.com/photos/zeno77/2446183097I had just finished unloading my cart at Home Depot the other day when a woman pulled up with her two young sons; when I offered her my cart she shook her head and kept walking.

There was a time when she might have offered to take the cart, but those times seem a part of the past.

Instead, she kept walking, talked to her sons and answered her cell phone.

Is the world really shrinking or is it just a narrowing of interactions and less interest in what’s around us in real-time?

The more distracted we become, and the more emphasis we place on speed at the expense of depth, the less likely and able we are to care.

Everyone wants his parent’s, or friend’s, or partner’s undivided attention — even if many of us, especially children, are getting used to far less. Simone Weil wrote, “Attention is the rarest and purest form of generosity.”

Each step “forward” has made it easier, just a little, to avoid the emotional work of being present, to convey information rather than humanity.

As usual, I am out of step.

I take back the carts, function beautifully sans cell/smartphone, pay attention to the humans in my orbit and love real-world interactions.

Digging in the dirt, conversation and reading (mostly cozy mystery fiction) are my favorite “time wasters;” no Facebook, Twitter or Candy Crush (my sister’s addiction).

I prefer to be connected to a few in the real world than connected to dozens (hundreds?) in the cyber world.

In short, I want to continue to pay attention and be present for whatever time I have left on this planet, whether decades or days.

Flickr image credit: Zeno_

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