When most entrepreneurs start out and realized they need funding, they are typically presented with three options.
The first is debt financing, which is typically in the form of a loan from a bank.
The other two funding options are typically in the form of equity, and they are 1) equity from individual or "angel" investors and 2) equity from venture capitalists.
Importantly, when considering these two sources of funding it is important to understand that most venture capitalists will not invest in companies that have not achieved "proof of concept" (which generally means a working prototype and/or revenues). Also, venture capitalists generally only invest in companies that have the potential to be valued at over $100 million within five years.
These criteria make venture capital inaccessible to most entrepreneurs. Furthermore, angel funding is often a better option since it is much easier to attain.
Consider these statistics:
So while venture capitalists write much larger checks, 15 times more entrepreneurs raise funding from angels.
So why do angel investors fund entrepreneurs? The common answer is that they hope to get a solid return on their investment. Obviously, investing at the earliest stages for a company that eventually goes big can earn the investor 100X their money back or more.
However, there are three lesser known, but equally important reasons, why angel investors fund entrepreneurs:
1. They know, like and trust the entrepreneur. Like with friends and family investments, sometimes angels know and trust the entrepreneurs and want to help them succeed.
2. They feel they can add real value. Many angels have lots of relevant experience that can help the companies they fund, from experience hiring staff to connections with key potential customers or suppliers. If angels can see their involvement adding a lot of value to the company, they might be very interested in investing.
3. Sometimes the angel wants or likes the action. Simply put, angel investing is exciting. It is generally a higher risk/higher reward version of the public stock markets requiring a more entrepreneurial analysis which is highly intriguing. This is particularly the case when the angel investor is a retired entrepreneur or executive.
So, if you are an entrepreneur seeking funding, keep these motivations in mind when you identify, approach and speak with angels.
Because understanding them is often the difference between whether you will raise money or not. Finding angel investors is also easy if you know where to look.
There are three main benefits I typically derive from outsourcing:
1. Cost savings. I'm often able to pay less for jobs I outsource, particularly if I outsource them to people in lower cost-of-living states or countries.
2. Reduce overhead. Usually I outsource projects that are not full-time or that I am able to easily stop if they aren't working out as planned. This reduces my overhead (and allows me to scale down as needed) since unlike a full-time employee, the outsourced people are not a fixed expense.
3. Supplemental work at night-time hours. When you outsource overseas, it often provides great timing of workflow. For instance, in one company I ran, I would create tasks during the day, give them to my outsourced team in India, and they would be done by the time I arrived in the office the next morning.
However, for outsourcing to work, you need to find the most qualified people to which you outsource.
The key to this is to start by getting the largest pool of qualified outsourced providers to apply for the project you need accomplished. Because you want to have as many people as possible to choose from.
Even if you only hire one, you can go back and contact the same pool of talent for future projects. Consider applicants as being in your "rolodex" of people to call.
To help you do this well, here are some tips to consider when finding and judging outsourced people to complete your projects.
Choose Your Outsourcing Platform
There are many sites in which you can find outsourced providers for the tasks you need done. Among many others, these include Craigslist, ODesk.com, Guru.com, Elance.com and 99designs. Some of these sites focus on certain types of outsourced projects like technology and design, while others allow you to find people for all types of tasks.
The process of posting a project is very similar on each of these sites, but there are also minor differences to get acquainted with as you go -- worry about those later and follow these basic steps.
Create a Clear Project Title
Include the work to be done, on what, and in what industry. For example, "Help Making Ebook" could mean anything from research to writing to editing to cover design. Compare that to "Writing 10,000 Word Real Estate Ebook." The latter will be more likely to catch the eye of writers and providers with real estate knowledge.
Create a Clear Project Description
This sounds simple enough, but you should try to answer as many possible questions as you can, which means addressing certain areas, like:
Upload samples of what you need
You can write 5 paragraphs trying to explain the final product, or you can show them something similar you have done before (or someone else's to model yours after).
Most sites will allow you to upload files to show them what they'll be working with or making. You can also insert links in the project description to files, audios, or videos showing or explaining things more vividly.
Choose the time period for bidding
You might be given options like 3 days, 5 days, 7 days, 15 days, or 30 days to accept bids. I would lean towards giving a longer time period, unless the urgency of your project means that you don't have as much time to wait.
But basically, the more time that providers have to find and respond to your project, the more qualified applicants you'll have to choose from.
Also, some of the best providers are also the busiest, so by giving a longer time frame to respond you are more likely to catch them when they're available.
This is not an exhaustive list, but covers the most important elements of a good project posting-one that will put you in a position of strength and cut down your odds of a bad experience. Cover these bases and you'll have more people applying than you can sort through.
Which then leads to the final phase: judging your applicants. In judging which applicant(s) to choose for your project, consider:
1) How they responded to your project request: were they articulate? Did their comments and/or questions make sense?
2) Their portfolio: do they have a website which shows their portfolio of work that you can judge? If so, take a close look.
3) Their ratings. On most of the outsourcing sites listed above, past clients will rate the outsourced person's work. I never use someone who hasn't completed at least 20 projects and has a rating of 4 stars or above.
Follow this advice and you can find the right outsourcers to help you grow your business and profits.
Suggested Resource: If you don't outsource, you can't compete. The math is simple...if your competitors are outsourcing and only pay $X to complete a task, and you pay $3X, $5X or $10X, your competitors will eat your lunch. You simply must outsource to stay competitive. Outsource the right way using Growthink's Outsourcing Formula. Learn more by clicking here.
In a recent post, I talked about what businesspeople can learn from the world of sports as to leveraging data and metrics to improve decision-making and get a leg up on the competition.
The discussion that followed piqued that age-old question always asked by Sport-Crazy Businesspeople: How much from can we really learn and put to use in our businesses the various lessons and principles from sports and games?
Usually this question is answered at the “meta” level - with somewhat clichéd bromides like the importance of hard work, of practice making perfect, and of viewing all adversities as learning moments.
For sure, these are powerful and important lessons, but I think the question more interestingly can be tackled on a Sport-by-Sport basis, as in what are the best business lessons to be gleaned from the games of soccer, or from football, or golf or tennis?
And relatedly, how do these various sports teach us different lessons?
Let's start out with what I would bucket the "Win by any Means Necessary Sports."
Drawing from personal experience and great loves for these games I would put soccer, football, basketball, and baseball into this category.
In these sports, yes all of the inspirational principles of intensity, teamwork, dedication, and relentless practice certainly apply, but are also in them rarely is a second’s hesitation given to actions that in most other domains would be considered highly unethical.
Like pleading to the umpire that you are safe when you know that you are out. Or claiming to have caught a ball you have not. Or perhaps most disturbingly to the American sentiment, “Flopping” or faking a foul as is so commonly done in basketball and soccer.
Now so let's compare this mindset with that found in games like tennis and golf.
In tournament golf, the vast majority of players would never dream of bending the game’s rules to their advantage and in the rare circumstances where a player is found to have done so, their reputation is badly tarnished.
Similarly, in tennis, it is considered a matter of honor to give one’s opponent the benefit of the doubt on close line’s calls, and players that do not do so are branded unkindly.
The point is not to claim that golfers and tennis players are ethically “superior,” but rather to note that many things considered well within the spirit of the rules in some domains are viewed in others as dastardly to the extreme.
A great example of this is the Deflategate football controversy with the New England Patriots and their star quarterback Tom Brady.
For many non-Patriots fans, it is very easy to get up on one’s High Horse and virulently condemn the Patriots' admitted philosophy of pushing the competitive envelope as absolutely far as possible.
Yes, just as easily the Patriots’ win-by-any-means necessary can be defended within the general construct of the game of football, which is that anything and everything goes, unless and until the referee, umpire or official says otherwise.
And oh yes, many times in these sports it is considered excellent strategy to break the rules, like as in with holding a wide-open receiver or fouling a streaking striker because it is the highest Expected Value Choice to do so.
In contrast, for anyone who has played golf even somewhat competitively such a "practical” mindset to purposely break the rules would be anathema.
Again, this does not mean golfers are more fundamentally ethical, only that the nature and ethos of their respective game is just...different.
And this different nature and ethos reality ports very clearly to business decision-making and competition, as well.
Yes, depending the industry/market you compete in - Real Estate, Retail, Consumer Products, Professional Services, etc. - the ground rules and the boundaries of what is and is not considered acceptable, fair and my favorite, effective - is just different.
So the firm advice for those executives that wish to maximize their chance of victory is to yes remember of course that Fundamental Values no matter the field of endeavor always apply, but…
…to also take into firm account the competitive ethos of one's particular industry and market condition and structure, and to yes then strive to win by Any Means Necessary within it.
And as you do this maybe someday your organization will win Four Super Bowls, or a Closetful of Green Jackets, but highly unlikely will you do both.
If you were raising funding 25 years ago, you probably called prospective investors on the phone and sent them your business plan via fax or overnight delivery.
As you can imagine, things are very different today. And email is the number one way to communicate with prospective investors, particularly professional investors like venture capitalist.
The challenge, as you can imagine, is getting their attention. As most venture capitalists receive tons and tons of unsolicited email each day. So, the key is having a great subject line on your email to get them to open it.
Before giving you some subject lines that do work, let me tell you ones that don't. Subject lines such as "Unique Investment Opportunity," "Please Invest in our company," and "Great Investment Opportunity" don't catch investors' attention and turn them off.
So, don't use these. Here are some you can use:
1. Your Involvement in XYZ Company
Where XYZ company is a company that the investor has funded and which is in your general space. You would start the email with something such as "based on your investment in XYZ company, I think you will be interested in what we are doing..."
2. New in the "XYZ Space"
Where XYZ is the "space" in which you are operating in (e.g., the financial software space). The first line would tie the subject line to what you are doing.
3. Referred by XYZ
Where XYZ is a referral source that knows both you and the investor. This works extremely well, but clearly you must first get the referral.
Because referrals are so powerful, go on LinkedIn and/or other networks to see if you already have someone in your network that can refer you to the investor.
4. Comment on Your Post About XYZ
Where XYZ is a blog post that the investor recently wrote about a subject. In your opening line you explain what you agree with in their post and then tie it to your company.
Importantly, after your subject line and introductory line that ties your company with the subject line, you should NOT tell the investor everything about your company.
Rather, this first email should be a "teaser" email. A "teaser" email is an email that "teases" the investor by giving them a bite-sized amount of compelling information about your company.
The goal of the email is to see if they are interested. If they are, you will follow up with more information (maybe your Executive Summary and/or full business plan) with the goal of getting a face-to-face meeting with the investor.
There are two reasons you shouldn't send your business plan in your initial email. First, you don't want to "over-shop" your deal. Over-shopping is letting too many investors know about your company. If too many investors know about you, the law of numbers states that many investors will pass on investing in you (remember, most investors passed on the opportunity to invest in Google years ago).
So, if an investor isn't even interested in your market space or teaser email, they certainly won't invest in your company. And here's what can happen -- an interested investor asks this investor (the one who isn't interested in your space) if they've heard of your company. That investor says "yes" (since you unwittingly sent them your plan) and that they weren't interested. And then their disinterest dissuades the once interest investor from investing in you.
The second reason you don't want to send out your business plan in your initial email is for confidentiality reasons. You just don't want your business plan out there for everyone to see. Rather, wait until the investor shows that they are at least somewhat interested in your venture before sending it.
So, now that you know that you should start by sending investors a "teaser" email, the question is what to include in the teaser.
Here's the answer: the teaser email should include 5 to 6 bullets about your company and should be very short (200 words or less). The goal, once again is simply to create a general interest in your venture so the investor commits time and energy to learning more about it (by requesting additional documents or setting up a meeting).
Your bullets should describe what space your company is in and credentials that make you uniquely qualified to succeed (e.g., credentials of management team, customers serving already or showing interest, etc.).
To summarize, send investors a teaser email instead of your business plan to start. And realizing that they receive hundreds of emails every day asking for funding, make sure your subject line stands out and seems like you're offering them value.
Last week, I wrote about how to fight through the natural slowdown of the pre-Labor Day period (compounded by the Recent Market Gyrations) and Get Business Done.
With Labor Day behind us, we should now all be in full flight in getting our most important projects and initiatives Fast-Tracked and on course to be completed by the end of the year.
These could include:
• Starting a New Business.
• Pursuing a New Business Initiative within an existing business.
• Developing a Work Plan and Budget for that business initiative and getting that budget funded (either internally or by an outside investor).
• Re-invigorating an existing business' Organization Chart and Design via the development of new job descriptions, reporting structures, new employees and contractors.
• Deciding upon, green lighting, and “Spinning Up” new technologies and SaaS platforms that make our businesses run leaner, faster, and through and on Better Data and Intelligence.
• Buying a competitive or complementary business.
• Selling and exiting from your business (and if this is something you want to get done in 2015, it is time to get going now).
So what do the most Effective Executives do to shake off the summer rust and make more and better things happen than the competition?
They Decide, They Act, and They Course Correct.
They Decide. Now more than ever, the ability to make rapid business decisions and then execute on the project action items and to-dos that flow from them is a fundamental success factor for any modern executive.
Why? Because never before has the information to make great business decisions been as quickly and completely available as it is right now. And if you don't have fast and good enough access to the information you need to make these decisions, then find and invest in one of the amazing array of Business Intelligence Software platforms that will do it for you.
They Act. In Ken Burns' great PBS series "The Roosevelts: An Intimate History," there is a segment on Teddy Roosevelt's (one of the great doers in American history) favorite expressions, "Get Action."
Roosevelt, who wrote more than 150,000 letters in his lifetime (do the math, that is more than 10 per day), was above all else a leader of great decisiveness and action, and it was this quality above all else that made him one of the greatest leaders in American history.
This Will to Act - to make that call, to put out that beta, to find the reasons to do the deal and fight through and fix the reasons not to - is a business muscle that all the greatest leaders and executives have and is one that can only be developed through consistent, vigorous and exhaustive application. Yes, in the great words of Thomas Jefferson if you want to know who you are “Don't ask. Act! Action will delineate and define you.”
They Course Correct. Because of technology never has it been easier to decide, to act, and then rapidly course correct as needed. In this respect, the most effective executives I know have the healthy egos to decide and act, but also the discipline, detachment, and humility to rigorously measure which of their decisions and actions are not working…
...and then rapidly adjust and/or abandon them as the data dictates.
Decide. Act. Course Correct. Rinse and Repeat.
Follow this simple but powerful formula and 2015 can still be the best year of all of our business lives.
If you want to be successful in business, it is crucial to determine when, where, and how to obtain the funds you need. Whether you need $1,000 or $1 million to start or expand your business, if you can't raise this money, you can't build the business you want.
Before You Look For Funding
Before you look for funding, you need to create your business plan. In addition to explaining your business and your strategy for success, your plan must determine how much money you need and for what it will be used.
Also, it's very important for you to understand the timing of the funding. For example, do you need all the funding now (e.g., to build out a location), or can you receive your funding in stages or "tranches."
The amount of funding you seek will effect the source of funding you approach. For example, if you require $250,000 in funding, angel investors are more applicable then venture capitalists. If you need $5 million, the opposite is true.
While I have identified 41 sources of funding for your business, below are the 5 most common.
The 5 Most Common Types of Funding
1. Funding from Personal Savings
Funding from personal savings is the most common type of funding for businesses. The two issues with this type of funding are 1) how much personal savings you have and 2) how much personal savings are you willing to risk.
In many cases, entrepreneurs and business owners prefer OPM, or "other people's money." The four funding sources below are all OPM sources.
2. Debt Financing
Debt financing is a fancy way of saying "loan." In debt financing, the lender (often a bank) gives you funding that you must repay over time with interest.
You must prove to the lender that the likelihood of you paying back the loan is high, and meet any requirements they have (e.g., having collateral in some cases). With debt financing, you do not need to give up equity. However, once again, you will have to pay back the principal and interest.
3. Friends & Family
A big source of funding for entrepreneurs is friends and family. Friends and family members can provide funding in the form of debt (you must pay it back), equity (they get shares in your company), or even a hybrid (e.g., a royalty whereby they get paid back via a percentage of your sales).
Friends and family are a great source of funding since they generally trust you and are easier to convince than strangers. However, there is the risk of losing their money. And you must consider how your relationship with them might suffer if this happens.
4. Angel Investors
Angel Investors are individuals like friends and family members; you just don't know them (yet). At present, there are about 250,000 private angel investors in the United States that fund more than 30,000 small businesses each year.
Most of these angel investors are not members of angel groups. Rather they are business owners, executives and/or other successful individuals that have the means and ability to fund deals that are presented to them and which they find interesting.
Networking is a great way to find these angel investors.
5. Venture Capitalists (VCs)
VC funding is a suitable option for businesses that are beyond the startup period, as well as those who need a larger amount of capital for expansion and increasing market share. Venture capitalists are usually more involved with business management, and they play a significant role in setting milestones, targets, and giving advice on how to ensure greater success.
Venture capitalists invest in companies and businesses they believe are likely to go public or be sold for a massive profit in the future. Specifically, they want to fund companies that have the ability to be valued at $100 million or more within five years. They also go through an expensive and lengthy process of deciding on the best business to invest their money. Hence, the approval process usually takes several months.
As you search for the best funding source for your business, you will discover that some financing options are complicated while others may offer a very small amount.
Choosing an inappropriate type of funding can lead to unfavorable outcomes such as feuds between the lender and business owner, shift of control, waste of resources and other negative consequences.
With this in mind, you should study the benefits and drawbacks of each financing option and select the ideal one that will help you meet your business goals. Because with the right source(s) of money, the sky is the limit for your business.
For many businesses, in these pre-Labor Day workdays and the unofficial “End of Summer” things slow painfully down.
Projects and deals take twice as long and sometimes feel twice as hard.
This year, compounding the challenge has been the rollicking Market Gyrations of these past few weeks, amplified by "The Sky is Falling" financial and political media blaring forebodings of doom and demise.
So how does our ambitious and goal-oriented executive block out the negative noise and focus on the Mission Critical Business Tasks and Projects at hand?
How does he or she be cognizant of / sensitive to current events, while remaining ever undistracted and undeterred by them?
Well, the most Effective Executives I know do this: They reframe everything as an opportunity, and everything as a positive.
Markets going up? These are boom times so let’s get on the bus and go for the ride.
Markets going down? What a buying opportunity! If I liked it at 50, I love it at 30!
Summer doldrums: As a buyer, a great time to press sellers for discounts. As a seller, with my competition loafing on the beach, I make hay.
Now, this can’t just be Hot Air / Pollyanna Self-Talk.
No, it has to be real and serious and buttressed by what famed Indiana basketball coach Bobby Knight calls in his best-selling book The Power of Negative Thinking.
In it, Coach Knight makes the simple but powerful point that in any competitive pursuit, everyone wants to win, so just thinking positively about it rarely yields competitive advantage.
Far more relevant is the willingness to sacrifice to Prepare to Win: to learn how to stop making the mistakes that losers make in abundance and that winners have trained themselves through hard work to avoid.
For athletes, this means practice, practice, practice to stop Missing Free Throws, or Three Foot Putts, or Second Serves, or The Cutoff Man.
For business people, this means the daily discipline to prepare for meetings, to start critical projects far before their due date, and consistently doing the Quantitative and Data Analysis to determine what is actually working in our business versus going by gut and feel.
Combine these two philosophies, the Power of Positive Thinking and of everyone and everything no matter what being good and an opportunity...
...With the Power of Negative Thinking and the daily, weekly, monthly, yearly, on a career basis of making of the sacrifices and of taking the time to do things right.
Of such combined mindsets and disciplines are legends and fortunes made.
The word "crux" is an interesting word. It's a noun that can be defined as: (1) the decisive or most important point at issue, or (2) a particular point of difficulty.
In either case, the word aptly applies to raising funding for your business, because in doing so, most entrepreneurs and business owners encounter difficulties.
I believe the crux to successfully raising money for your business lies initially in understanding that investors are essentially professional risk managers.
Let me explain. Most sources of money, like banks and institutional equity investors (defined as institutions like venture capital firms, private equity firms and corporations that invest), are essentially professional risk managers. That is, they successfully invest or lend money by managing the risk that the money will be repaid or not.
So, your job as the entrepreneur seeking capital is to reduce your investor or lender's risk.
Let me give you a simple example. Let's say that both you and your worst enemy both wished to open a new restaurant.
In this scenario, which is the riskier investment?
Clearly investing in your worst enemy is less risky, because they have already accomplished some of their "risk mitigating milestones."
Establishing Your Risk Mitigating Milestones
A "risk mitigating milestone" is an event that when completed, makes your company more likely to succeed. For example, for a restaurant, some of the "risk mitigating milestones" would include:
As you can see, each time the restaurant achieves a milestone, the risk to the investor or lender decreases significantly. There are fewer things that can go wrong. And by the time the business reaches its last milestone, it has virtually no risk of failure.
Let me give you another example. For a new software company the risk mitigating milestones might be:
The key point when it comes to raising money is this: you generally do NOT raise ALL the money you need for your venture upfront. You merely raise enough money to achieve your initial milestones. Then, you raise
more money later to accomplish more milestones.
Yes, you are always raising money to get your company to the next level. Even Fortune 100 companies do this - they raise money by issuing more stock in order to launch new initiatives. It's an ongoing process-not something you do just once.
Creating Your Milestone Chart & Funding Requirements
The key is to first create your detailed risk mitigating milestone chart. Not only is this helpful for funding, but it will serve as a great "To Do" list for you and make sure you continue to achieve goals each day, week and month that progress your business.
Shoot for listing approximately six big milestones to achieve in the next year, five milestones to achieve next year, and so on for up to 5 years (so include two milestones to achieve in year 5). And alongside the milestones, include the time (expected completion date) and the amount of funding you will need to attain them.
After you create your milestone chart, you need to prioritize. Determine the milestones that you absolutely must accomplish with the initial funding. Ideally, these milestones will get you to point where you are generating revenues (if you are not already generating revenues). This is because the ability to generate revenues significantly reduces the risk of your venture; as it proves to lenders and investors that customers want what you are offering.
By setting up your milestones, you will figure out what you can accomplish for less money. And the fact is, the less money you need to raise, the easier it generally is to raise it (mainly because the easiest to raise money sources offer lower dollar amounts).
The other good news is that if you raise less money now, you will give up less equity and incur less debt, which will eventually lead to more dollars in your pocket.
Finally, when you eventually raise more money later (in a future funding round), because you have already achieved numerous milestones, you will raise it easier and secure better terms (e.g., higher valuation, lower interest rate, etc.).
It might surprise you what you can accomplish with less money! So write up your list of risk mitigating milestones and determine which must be done now and which can wait for later, focusing first on what is most likely to generate revenues.
Suggested Resource: Want funding for your business? Then check out our Truth About Funding program to learn how you can access the 41 sources of funding available to entrepreneurs like you. Click here to learn more.
Last week, I wrote about all of the amazing lessons of the world and science of Sports Metrics has to offer business.
Well, with the 2016 Presidential Campaign heating up, let's talk how just as in sports the use of metrics in politics has jumped a full generation ahead of business.
First, a little history and how perhaps the most famous use of metrics in politics is the one where the experts clearly got it wrong.
The 1948 Presidential Election was famous for many reasons - for being the last pre-television election, for being the last election contested between candidates born in the 19th century, for President Harry “give ‘em hell!” Truman's whistle-stop campaign against the “Do-Nothing” 80th Republican Congress, and…
…for the Chicago Tribune's famous headline proclaiming "Dewey Beats Truman" the morning after the election when in fact New York governor Thomas Dewey had handily lost the race.
The problem was that way back then poorer Americans – the heart of Truman’s constituency – didn’t have telephones, thus greatly skewing the polling data to predict an overwhelming Dewey win.
Obviously, since 1948, political polling has come a long way, highlighted by famed “Big Data Nerd” Nate Silver and his “FiveThirtyEight” mathematical model correctly calling 50 out of 50 states in the 2012 Presidential Election (after correctly predicting 49 out of 50 states in the 2008 election!).
Because of the power of predictive models like these, politicians across the ideological spectrum now more than ever rely on polling to shape messaging while campaigning, and once elected governing priorities and principles.
Now I know many of you at that last sentence are saying “Wait a Second!”
Isn't this the whole problem with politics?
How pols rely on polling to measure what voters think, want, and fear, and then either work (or pretend to!) to give them, both convictions and what is good for The Nation be darned?
Golly, they say, did Thomas Jefferson and John Adams take polls before they signed the Declaration of Independence?
To which I say, give it a rest. Please.
I have found that those that are usually crying loudest about “principles and convictions" in politics are those that when they or their chosen candidate run for office, just get right on doing that most Un-American thing of all.
Sure, they give nice and flowery concession speeches where they drone on about virtue and about how they lost with “dignity ”and “honor” and ya-di-ya-di-ya.
A loss is a loss.
Now, the really nice thing about business when compared to politics is that there is general agreement on overall goals and values. Nicely, there isn't a “Left versus Right” divide with the majority of business people – i.e. most of us are striving for the same thing: More, more, and more.
More sales, more profits, more company value.
In business, these are the “elections” we seek to win, the “policies” to pass.
And just like in politics, we can strive to do so via standing high on our horses and saying silly things like “If the customer doesn't appreciate what a better product I to offer than my competitor, well shame on them."
Or as good, "If that great employee left my company to work someplace else, I don't need or want them anyway."
Sure, statements and testaments like these sound good and noble, but really when you reflect on it (and not wanting to be too harsh) is just Loser Talk.
No, the winners in business, like those in politics, are truly “In the Arena.”
And, in this Internet of Things, SaaS, and Big Data World of Ours, being “In the Business Arena” means above all else being elbow deep in the numbers and in the conversion metrics in all of their intricacy, subtlety, detail and glory.
And just like politicians win by measuring what the people really want and giving it to them, so do business people win by measuring what the market is really saying and what customers really want.
And figuring it out above all else through our data and through our metrics.
Yes, as Harry Truman would say, The Buck Does Stops Here, with and in the numbers.
The lessons and inspirations of sports and the sporting life have always had a deep hold on the business psyche.
Some of my favorites here include the joy of competition, the virtues of teamwork, and of reaching Peak Performance through overcoming adversity and then sharing our “Best Stuff” with the world.
And these days the “Hot Lesson” that sports has to offer business is the power of measurement and data - driven decision making.
Some of this is obviously not new. Sports like running, swimming, and lifting has always been fundamentally defined and accomplished via tracking data - by how fast we go, how much weight we lift - and then from these data points developing specific training and improvement plans.
What is new is how data has come to permeate and dominate the world of team sports - baseball, basketball, soccer, et al. - and how now the most successful teams are managed not by pep talks and gut but by and through data and metrics.
FIFA. Germany's 2014 National Soccer Team found that one of the highest correlated data points with wins and losses was how much the players on the field ran and moved per minute of game time.
So they placed chips in all of the player’s shoes to measure and maximize this number. The German Team averaged so much more movement than any of their World Cup competitors that it ended up being equivalent to one half an extra player on the field. And to the country’s fourth World Cup.
The NBA. In professional basketball, the explosion of readily available digital video has allowed for detailed tracking of how every player in the league fares against every other player, on a play-by-play "Plus/Minus" basis.
Teams like the San Antonio Spurs that most effectively harvest and use this data are able to both identify under-valued players (critical in a Salary Cap league) and empower their coaching staffs with key insights as to the best game lineups and player substitution patterns.
Building on this long-term attention to detail and metrics, last year the Spurs became the winningest team in NBA history (to go along with their five league championships in 16 years).
Major League Baseball. Baseball, with its extended season and its fundamental “One-on-One Matchups” game structure has long been the most advanced team sport when it comes to metrics driving player values, roster composition, and in-game tactics and strategies.
While its most famous proponent - Billy Beane - is rightly lauded for making his Oakland A's team a consistent contender in spite of having a player’s salary budget sometimes only one quarter that of big market competitors like the Yankees and the Dodgers, in recent years “Sabermetrics” has leaped to a whole new level of intricacy and sophistication.
Key competitive innovations run from metrics like Fielding Shifts on a pitch-by-pitch basis, lineup changes based on time of day (and even time zone!), and the statistical value of "good outs."
Now, this is where some folks say "enough is enough" and that they long for baseball as it was played and managed in the good old days, by the Tommy Lasordas and Casey Stengels of the world.
Yes – a harkening back to a simple and more “human” time.
This is a noble, but naïve, sentiment.
Because being able to work with great people and on great teams and at great places, well all of that wonderful and simpler time stuff in this year 2015 of ours can only be had via leading and managing by data…
Because doing so gets us that one magical thing that in both sports and business makes everything else possible: