Design of Business

Business, Culture & Entrepreneurship

Category: Entrepreneurship (page 1 of 10)

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 [Co] 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. 

  • 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?

7 Simple Tips for Success from an Entrepreneurial Lawyer

One of the joys of teaching is the opportunity to invite guest speakers who bring their experience and insights alive for the class. The speakers have the added advantage of being a “guest” lecturer and their message not only sounds new but resonates well. I was fortunate to have Bea Wolpert, an amazing entrepreneur, lawyer and woman leader.  Over an hour, Bea in her inimitable style—reality laced with humor and self-deprecation—shared her own experience as a lawyer and entrepreneur as well as the stories of some of her entrepreneur clients. I realized her stories and insights serve well as advice for most prospective and practicing entrepreneurs. Here they are

  • Purpose Be purpose-driven – It’s well worth figuring out what are you passionate about. Pursue that passion rather than money alone – be it dog-walking, raising Labradoodles or being a chef or lawyer (all examples she illustrated)
  • Relationships Work on building authentic relationships – these take time and will pay off in spades
  • Give forward Focus on giving something of value first – people will automatically seek more and become customers. This could be a blog, seminar or webinar, free consultation, or samples at farmers markets – make it easy to buy from you.
  • Sales Recognize your job is selling – not just being a chef, designer, lawyer and learn to become good at it.
  • Numbers Business is about numbers – so the more you learn to understand numbers – costs, profit & loss the better off you will be
  • Commitment Be all-in. Don’t expect a bank (or anyone else, except a parent possibly) to fund your company or you, if you are not willing to be all-in and
  • Plan Whether a business plan for a bank, succession plan for yourself or a marketing plan for the company, planning is both important and will help.

3 Tips to Hold Fast To Your Dreams

“How will your company become a billion-dollar company?” An analyst at a venture capitalist firm, likely a freshly minted MBA, posed this question to me. I tried to keep my temper in check and answered “Never.” You’d think I’d slapped him across the face – “Then I’m afraid there’s no point in talking to us.”

I was a still a relatively new entrepreneur. It seemed like all I heard was NO. Worse yet, people kept telling me why it wasn’t going to work. Not just venture capitalists but prospective partners, friends, and relatives.

That’s when I learned that You’ve gotta Hold Fast To Your Dreams.

Even my father, a man who loved me, inspired me and most importantly lent me a lot of money had the “Talk” with me. “Son, sometimes businesses fail. Just because your business failed doesn’t mean you have failed.

If you have a wonderful and supportive wife, you are still likely to face questions – “Honey, I want you to pursue your passions. But I hope you realize we have two young kids and no income

You’ve gotta Hold Fast To Your Dreams.

In my case, there was a happy ending – my company first survived, then it thrived – okay mildly thrived and then we got lucky and we were able to sell the company for a tidy sum. Now you might think, “Nah Sri, you are just a lucky fellah.” And I’ll tell you I’m a lucky fella – but only because I held fast to my dreams.

It was film producer Samuel Goldwyn who said: “The harder I worked the luckier I got.

Is holding on to your dreams easy? No.
There will always be naysayers. People will put you down.
You will doubt yourself. “How do you know that you are not being just plain pig-headed?” You don’t.

Here are three things I’ve learned:
Dream BIG. And write your dreams down. Ask yourself why this is your dream.
Read biographies – read other’s life stories – those who have achieved amazing things. Most importantly,
Surround yourself with people who love you and care about you. But who will speak the truth and keep you honest

And Hold on To Your Dreams.


Two weeks ago I spoke and wrote about the inspiring story of my grandfather, who epitomized what holding on to your dreams can help you achieve. You can read it here.

Hold Fast To Your Dreams

As an entrepreneur, you are likely to face any number of obstacles. Worse yet will be the naysayers around you – people who don’t believe in you or what you are trying to get done. Even friends and family – well-intentioned as they may be will doubt, question and even actively discourage you. So it’s really important to Hold Fast To Your Dreams.

I realize that the challenges I’ve faced are hardly worth boasting about. My life has been one of relative privilege. But the lessons I’ve learned from my father‘s life and that of my grandfather, his father in law are a living testament to why you should hold fast to your dreams. I’ll share one story – that of my grandfather who Held Fast To His Dreams well past his nineties.

A rough start
My grandfather was born in 1902. His father died of tuberculosis barely two months before he was born. His widowed mother, then barely 19, moved back to her father’s home in a village in south-western India, another mouth to be fed. Then at age 2 my grandpa contracts polio. His left leg is permanently shortened. When it’s time to go to school, his grandfather says, “What’s this crippled boy going to do with school?” I’m sure he was not a cruel man, but those were the times they lived in.

My grandfather even at that age never gave up on his dream to making something of his life. One day the schoolmaster showed up at his grandfather’s house. “Why have you come?” he was asked. “Your child has been showing up in school, so I’ve come to collect the fees.”

More Deserving Candidates
When my grandfather graduated from high school, he had to come to the city for college. When he appeared for an interview, the head of the department told him, “You are a cripple. Why do you want to study science? You’ll not be able to stand up and do all the laboratory work. I can give the seat to a more “deserving” candidate.” My grandfather was not happy, but he did not give up his dream. He enrolled in English and tutored other kids to pay his way through school, even as he lived in a “Mission” home for poor boys.

By the time he graduated with a Master’s in English, my grandpa had been teaching & tutoring for several years. So rather than work for someone, he turned into a tutoring entrepreneur and eventually started his own private college – whose motto was “Under the Minerva roof, you are failure proof.”

Dream Achieved?
It looked like grandfather’s dream of making something of himself, and liberating his mother from poverty and dependency on others had come true. He was a renowned Shakespeare scholar – his Minerva notes were sold across the Commonwealth from Kenya in Africa to Australia in Oceania. He’d also gotten married and over time fathered ten kids – yep 10! Five girls, the fourth of whom was my mom and 5 boys.

Setbacks again
Just as it looked like all was going well, his wife died in childbirth leaving behind twelve kids, ten of his own and two grandkids. But as he was fond of saying “Ambition is made of sterner stuff.” He had his daughters and sons put through college and most of them married – more grandchildren were on the way, and it looked like normalcy was back. But a year after I was born, my grandfather was in a car accident, and he lost the use of his other leg and his right hand. Now at age 62, he was confined to a wheelchair and 100% dependent on others.

I think you can safely guess he still had things he wanted to do and he held fast to his dreams. He did not give up his dreams.

  • He studied classical Indian dance and became an expert who every dancer of repute consulted on their latest projects.
  • He built a house in which a wheel-chair bound person could live by themselves – this was in the early 70s.
  • He became an educator for nurses who worked with the “handicapped” as they were called then.

By the time my grandpa passed in 1995, chess grandmasters, dance divas, Sanskrit scholars and hundreds of others’ lives had been touched by him. And the thousands who’d been through his college eulogized his memory.

I can’t think of a better example of what “Holding fast to your dreams” can achieve.

 

Dreams

Hold fast to dreams
For if dreams die
Life is a broken-winged bird
That cannot fly.

Hold fast to dreams
For when dreams go
Life is a barren field
Frozen with snow

Langston Hughes

Building a business is still on human scale

This morning I read Om Malik’s piece on DropBox and how they’ve become the company to achieve a billion dollar run rate in the shortest time –  9 yep, nine years!

The Internet might have hastened the pace of our world. The network has turbocharged growth and expansion. However, it looks that growing into business still indexes at human scale.

In the early naughts, when we’d meet venture capitalists, who’d ask “How will you become a billion-dollar business?” (my answer usually was we wouldn’t) and subsequently, when I heard young entrepreneurs pitch business plans, I’d often point out to them that average software product company takes 7-8 years to get to $50M in revenue. Yep 50M in run rate.

So if DropBox was able to get to 1 Billion in the same time, does that mean the clock has gotten faster? The two operative words here are unicorn and average – an even more important word might be run rate!

One way I’ve always thought about it, is despite all the advances in medicine, having a baby still takes – give or take – 9 months. A business in many ways, especially one that lasts, takes time nearer a decade to get to a significant size, on average!

Forgiveness – a virtue in founders

7-flipside-turtleneck“I want to take them to Chennai. And Goa!”

My daughter was all excited, in that way that only teens could be. She was making plans to bring her friends to Bangalore – next summer. And even before that she was keen to take them to not just Chennai and Goa but Benaras – as she calls it – and “Oh. But how can we not take them to Kerala.” If there’s one lesson that I’ve learned from my daughter, it’s to let her speak uninterrupted. At least till she pauses to catch her breath. Or if I can do it, wait till she asks, “Well. What do you think?”

The amazing and scary thing for me with this entire episode was how much of a chip off the old block my daughter is. I was exactly like she is today. Keen, maybe even overanxious, that my friends experience the things about India or my family that I had and that they ENJOY them. It’s surprising that I had any friends left. The truly scary part is why it was not evident sooner.

In many ways doing a startup is a journey of self-discovery.

As a founder, you are going to learn a whole lot about yourself that may not just surprise you but make you doubt yourself. All that stuff you’ve read about Steve Jobs or other self-confident (err arrogant) founders may make it sound successful founders make decisions and move on without much self-doubt. Reality is that any founder, worth their salt and with a pulse, will discover each day – many times a moment too late – that there are things that they could do way better. A lot of this is programming that’s happened before we became even remotely self-aware – our desire to please, or unwillingness to confront, avoidance or procrastination.

In many ways doing a startup is a journey of self-discovery. How costly or expensive this is depends on how fast you learn about yourself and most how soon you accept and forgive yourself.

In my own case, having a great team of folks around me helped me gain the self-awareness. But as they say, you can only bring the horse to the water. So it’s not enough to make or drink the kool-aid. As a founder you’ve got to be prepared to stare at the image that’s reflected in it!

One of the advantages of growing older (and startups can sometimes help you do that fast!) a certain degree of self-awareness grows (or is foisted on you by your team). So rather than berate myself I’ve learned to recognize that is who I am and to recognize the need, in most cases, to change.

My daughters don’t hesitate to tell me if it’s not for the better.

4 Things That Families Can Do to Help Entrepreneurs

“Yellow car!” Usually, this declaration is accompanied by a playful swat from my daughter. Once we got playing this game, of who can spot a yellow car first, I began noticing a lot more yellow cars out there. I’m sure they were there all along but just that I never paid attention. Much like that – once I met Richa Singh – founder of yourdost.com, a company that helps young people such as students find the help they need, typically counseling or other support for their mental well-being, I’ve been more aware of issues surrounding mental health.

A little while ago, I’d written about Brad Feld, well-known venture capitalist, and blogger who’s brought the discussion around mental health and entrepreneurs center stage. As I continued to explore some of the resources Brad spoke about, I ran across this fascinating video by Dr. Lloyd Sederer, Medical Director of the New York State Office of Mental Health. What struck me about this particular video, was how the four things he recommends for a family on how to deal with mental health is directly applicable to entrepreneurship itself.  Here are the four key points that he makes.

  • Don’t go it alone “Why me or why us?” Is a question that both entrepreneurs and families raise. Worse yet if there’s fear, shame or stigma – we try to handle it alone. Don’t. Whether doctors or counselors for mental health or mentors and other entrepreneurs for startups – seek help, talk to them and don’t go it alone. It will make the journey a lot easier.
  • Don’t get into fights “Don’t be like your brother. Get a good job” – this is an actual quote an entrepreneur reported his family telling his sister. This is just as true within companies and partners as it with families. Little good is likely to come out of it. As Dr. Sederer puts it, listening and leverage are alternatives to fighting
  • Learn the rules & bend them While this is particularly relevant to dealing with the US medical – mental health – system, it’s true to any bureaucracy that you deal with – as people and as entrepreneurs. Getting frustrated or being ignorant is only likely cause further unhappiness & stress.
  • Prepare for a marathon, not a sprint While most entrepreneurs tend to be optimists, often youth or inexperience leaves them unprepared for the length of the journey. Not only do most firms struggle or outright fail, even success takes time. The average software product company takes 7-8 years to get to $50M in revenue – so prepare psychologically and emotionally for the long haul.

Check out the video and share. I’d love to hear your thoughts.

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