Bootstrapping or taking venture capital money – that is the question!

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Ron Rudzin self-financed his online mattress company, Saatva. Credit Bryan Anselm for The New York Times

 

Is it possible to grow to a mega-sized company without venture capital or angel funding? Is it possible to grow organically over time, be self-funded and eventually become a mega company?

There are no rights and wrongs, just the risks that start-up company founders have to weigh very carefully before taking any type of investment from a third party, or going it alone with no outside funding.

This article in the NY Times Entrepreneurship column a few weeks ago focused on start-up companies that have taken the road less traveled and did not seek or receive venture capital, but have achieved mega company size.

I encourage you to read the entire article, and let me know if you know of any company in the last twenty years that arrived at an IPO without venture capital or debt financing!

Read full article here

We are living in a mobile world and you have to keep up!

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An employee stacks items to be shipped at the Amazon.com Inc. fulfillment center in Phoenix, Arizona, U.S. on, Sunday, Dec. 1, 2013. More than 131 million consumers are expected to shop Cyber Monday events, up from 129 million last year, according to the National Retail Federation. Photographer: David Paul Morris/Bloomberg via Getty Images

Photographer: David Paul Morris/Bloomberg via Getty Images

It continues to amaze me as to how rapidly our buying habits are changing! Just yesterday, instead of going to the store, I bought my new Fitbit on EBay with one click, paid for it with my PayPal account with one more click, and within seconds I made my purchase at the price I wanted to pay!  No store to visit, no salesperson to talk to, no wasted time, and all done on my phone, and while walking down the street!! Don’t worry, it was not while I was crossing the street 🙂

Cybershopping has accelerated so fast that retailers are scrambling even faster just to keep up. We are now making 51% of our purchases online according to a survey published by United Parcel Service Inc.

We all know that millennials are born to purchase everything on line, and 54% are currently doing that. But older folks like me and you are actually making our purchases on line at a faster adoption rate than our younger counterparts!

Of course, the 800-pound gorilla in the room is Amazon and they accounted for about 60% of total U.S. online sales growth last year. More importantly, they have turned the shipping paradigm upside down. Everyone now expects free or at the very least low cost shipping and fast and even faster delivery.

If you are a business owner, and you depend on doing business on line, you have no choice – you must fully optimize your website for mobile capability if you want to have any chance to increase your web traffic and your sales.

 

Read the full article here 

You’ve just graduated, but oh my, you don’t have a passion yet that will drive you for the rest of your life!

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Every year around May and June there is a great deal made about new graduates and how they must find their passion, and all the commencement speeches given by people whom we respect and admire and whom we look towards for inspiration. In fact, I was delighted that Michelle Obama gave the commencement speech at my alma mater, City College just the other week.

However, I must admit I have always been slightly embarrassed that it took me a very long time to find my passion. In fact, it took me 18 years after I graduated college to gather up the courage and wherewithal to start my own company.

And so, it was with some bemusement and relief that I happened to read an article by Angela Duckworth in the NY Times Preoccupations Column this past Sunday that actually advised young graduates not to follow their passion, but to foster it, which is exactly what I needed to do before I found my own passion which was to build a company unlike any one that I had ever worked for and that would inspire people and be a unique place to work and grow.

Ms. Duckworth  suggests that one should move toward what interests them, seek a purpose, and finish strong. I was enheartened to learn that she too had several jobs before she found her passion, and eventually she garnered the knowledge and skills that she uses in her current position. I know for myself, that without the many positions I’ve had in my career, I would not be as well prepared as I am today to help business owners become CEO’s.

My advice to new graduates is to be patient, and when you do find your passion, make a commitment to yourself to take the bold steps that are required.

 

Read the full article here

What, you haven’t met the mythical millennial yet? Where have you been?

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Last week, being an avid reader of the NY Times, Personal Tech column, I was intrigued by Farhad Manjoo’s column about millennials, and thought I might share this column and my thoughts with all of you.

So, in case you haven’t noticed, I’m a baby boomer, and of course, that means that I am lumped together with all the other baby boomers, just as my daughter, and her friends are lumped together as millennials.Needless to say, I don’t like being lumped, and I don’t think my daughter or her friends like that either.

So why is it important to be designated as a millennial, or a baby boomer? Does it really help to better understand an individual if we include them in a particular demographic or age group? Yes, sometimes it does, but a good portion of the time, we all know that generalizations go just so far!

As a business consultant, I work with both millennials and baby boomers separately and together in teams. There are certainly similarities and also differences. Although they are classified as being in one group or another, they are still first and foremost, individuals who must coexist with one another to achieve common goals for their employers and their own companies.

I encourage you to read the full article, and let me know what you think. Exchanging our views of what it is like to work with Baby Boomers, Gen X’s, Gen Y’s, and Millennials can only enable us to work better and more productively with one another.

Read the full article here

It’s a mobile world from the moment you wake up!

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It’s hard to believe, or maybe not, but it seems that most mobile users look at their email on the phone or glance at Facebook posts within 29 minutes of rolling out of bed and reaching to turn off the alarm!

Sitecore, a customer experience management company recently published the results of a  survey of 4,500 global consumers and 450 brands analyzing behavior, purchase patterns and reasons for using mobile applications.

Although almost three fifths of the consumers in this survey say they have a mobile device within reach for eight to 10 hours each day, and they believe that convenience, security and speed are the key elements of a good mobile experience, only half of the brands surveyed personalize content for mobile web customers and have a mobile-optimized Web site in place.

In addition, while almost 100% of brands in the survey believe a good mobile experience impacts customer loyalty, a significant number still do not have a mobile strategy in place. In fact, the majority of brands in the survey are unprepared when it comes to implementing a mobile strategy and do not allocate sufficient resources to maintain, adapt, and improve the experience that customers expect.

So, bottom line, if you’re a brand that hasn’t yet woken up to the new reality the mobile world has wrought, you better wake up because if you continue to snooze, you will definitely lose sooner than later.

Read the full article here

Should I or Shouldn’t I?

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As I was reading this blog by Dave Girouard in First Round Review (Read the full article here), it brought to mind how important making decisions and making them quickly are to growing your business. All too often I meet business owners who just can’t seem to make a decision for fear that whatever decision they make, it will just not be the absolutely perfect or right decision to make. What they miss according to Mr. Girouard and I wholeheartedly agree with him, is that speed can be the ultimate weapon in business for beating one’s competition, whether you are delivering a product to market, or promoting the value proposition of your services.

As usual, these articles are long, and are worth reading. However, if your time is limited, here are some take-aways worth considering:

  • Deciding on when a decision will be made from the start is a profound, powerful change that will speed everything up.
  • To keep things moving, ask a lot of hard time related questions very quickly.
  • Speed, like exercise and eating healthy, can be habitual.
  • A good plan executed now is better than a perfect plan later.
  • You can either set the pace of the market or be the one to react. Whoever is fastest out of the gate is the one everyone else has to react to.
  • Always challenge why something takes a certain amount of time. Is your company or team working as smartly as it can?
  • Too many people believe that speed is the enemy of quality. On the other hand, if you use it appropriately, it can be your most important competitive advantage.

Dealing with the Troublemakers

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In previous posts, I’ve talked about scaling one’s company, and developing a company culture, but what happens when certain people, let’s call them your “troublemakers”, get in the way of your ideas, or the way you want to do things.
In her most recent post in First Round Review (Full article here) Bethanye McKinney Blount having spent twenty years in leadership positions in the tech industry has identified four types of “troublemakers” and how to deal with them.
I’m sure you’ve seen these types of people in your organizations: the HERMIT who works independently and won’t let anyone see his work while it’s in progress; the NOSTALGIA JUNKIE who harkens back to the good old days and talks of “the way” we’ve always done it; the TREND CHASER who is always ready to flick to the newest and greatest thought or gadget without seeing the entire picture; and the SMARTEST IN THE ROOM who always has to be the smartest person in the room without considering anyone else’s thoughts or feelings.
So how should you deal with these folks when you meet these types of people in your organization, because you know they are always there! Ms. Blount suggests you subscribe to the premise that most troublemaking is done unknowingly, and you as the leader or the manager must do your best to win them over in the long term. Of course, if you’ve really tried over time and been pushed long enough that you’ve stopped rooting for a person on your team, it may be better to find another alternative which could very well include termination. In the end, it is your commitment to the company culture you want to create that determines who stays and who leaves.

 

Full article here

Numbers (and the magic of measuring the right thing)

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Recently I’ve been enjoying some blog posts by Seth Godin and this one got me really thinking (Read the full article here).
As business consultants, Voice of Reason Consulting advises our clients to make every effort to understand what specific numbers and metrics truly drive their business. We call these metrics Key Performance Indicators or KPI’s. These KPI’s are the drivers that propel the business to scale up to the next level. Based on our own experience, we believe that a business owner on the path to becoming a CEO needs to review their Company’s KPI’s regularly and continuously. Examples of KPI’s might include: how many prospects are in one’s sales pipeline; what is the probability of business to be closed based on a forecasting legend with specific criteria; what are the utilization percentages of technician or lawyer hours over the course of a week or month? The business does not need many KPI’s, just the right ones – and of course finding the few good right ones is indeed the challenge! However, we also know that when we find the right KPI’s, good things happen!!

 
(Read the full article here)

Are We Really Just a Brand?

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As you all know by now, I am an information junkie. I read many different blogs and articles on a regular basis, and more often than not, I get to thinking that I need to share what I read. This piece written by Seth Godin (Full article here) really got me thinking.

Are we really just a brand? Do we always have to market ourselves? Why do we always have to sell ourselves?  What really sets us apart from all the same businesses or people we compete with? How do we stay true to ourselves, but continue to market/sell our services?

I think I can make it simple, but not easy. I do my best to do business with people I like. I love the challenge of working with smart, and even arrogant business owners. But, if I don’t feel a connection, I will end the engagement before they do!

In the end, I may be a brand, but as Seth says, I am a first and foremost a person, and I need to make a personal connection to do the work I do!

How Start-Ups Last

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Last week, I wrote about the importance of establishing a company’s culture very early on. To continue the conversation once again, I am recapping a recent article from the Harvard Business Review on the other factors that help start-ups last.  So many start-ups that seem to have it all  – customers, cash, and promising opportunities somehow are incapable of sustaining long-term growth and scale.

Start-ups, more often than not, are not well organized, and in the beginning everyone does everything. And yet the need to scale demands professionals and organization on all fronts. Successfully scaling companies that seek growth require the following four critical activities to get to the level of sustainable growth:

  1. Hire functional experts. This allows specialists to work more efficiently and implement best practices in their field.
  2. Add management structure. Just a few people at the top cannot monitor everyone’s increasingly growing day-to-day work. Adding leadership and management keeps employees more engaged and focused.
  3. Build planning and forecasting capabilities and a framework of plans and goals to guide the company’s growth.
  4. Spell out and reinforce the company’s culture. Culture may very well be the most critical element in attracting talented people to join a start-up and stay with it as it achieves sustainable growth.

Scaling and growing a company does not necessarily mean the company should lose all of its start-up mentality, but as my experience has taught me, adhering to the principles noted by the authors of this HBR article are critical for any start-up to achieve scale and sustain long-term growth.

 

Read the full article here