Written by Jay Turo on Wednesday, October 8, 2014
Last week, in Las Vegas I had the opportunity to participate in a 2 - day “Mastermind-type” strategic session with a gathering of technology and Internet entrepreneurs and executives from around the globe.
It was an impressive group - leaders of companies with average sales of $8 million and competing and prospering in industries than run the gamut - from consumer products, to healthcare IT, to energy and entertainment, to mobile apps and wearable technologies, to real estate, and more.
To those who have never participated in a business mastermind, you don’t know what you’re missing! Originally conceived by legendary personal development guru Napoleon Hill, a Mastermind is a gathering of like-minded professionals that meet regularly and over time develop a productive and high-trust dynamic through which to attain breakthroughs of insight and accountability around and about strategic, tactical, and management challenges.
Mastermind groups, both generic ones as I attended in Las Vegas, and branded versions like Vistage and YPO, are where the hard, methodical work of entrepreneurial business - building and growth gets done.
The “table topic” for our meeting was best practices, as they apply to smaller companies, of data-driven decision making and business intelligence dashboards.
It is obviously a very timely one - as “BI” tools and software have matured in the last few years to become for the first time truly easy to use, effective, and affordable for smaller companies and organizations.
We talked about how the companies getting the highest “BI ROI” connect the dots between their "old" and "new" school strategic planning and thinking.
They are old school (in the absolute best, non-pejorative sense of the term) in that they recognize that strategy…
…arrived at through Mastermind get-togethers, through board and advisory board meetings, through corporate “retreats” and through any form “step back and reset” get togethers - remains fundamental in attaining and maintaining long-term business success.
And they are new school in their leveraging the very many best-of-breed business application software as services to arrive at this strategy.
Tools like CapitalIQ, Simplycast, The Resumator, Box, Grasshopper, Wufoo, Smarsh, IfByPhone, SnapEngage, Docusign, Hootsuite, Infusionsoft, and Interspire that automate traditionally laborious and repetitive business functions.
And, as they do, collect massive reams of data on much of the marketing, sales, operations, finance and management activities of a business.
And, for the first time, the technology has finally matured to where all of this collected data can be automatically organized, standardized, and consistently presented on an always-on, always-accessible, and visually appealing Online Dashboard.
I had the opportunity to present my firm’s "Old School meets New School" business intelligence philosophy, along with our dashboard offering.
And as I did, I truly felt blessed to live and work in a time when technology has created such promise and power to allow companies to run better, easier, and more in alignment with their missions than ever before.
And as they do, well…
…the best numbers on the best dashboards are starting to show increasing piles of sales and profits, too.
To Your Success,
P.S. Like to demo our dashboard offering? Then Click Here to learn more.
Written by Dave Lavinsky on Wednesday, October 1, 2014
There are eight key things angel investors will look for when considering whether or not to fund your business. No, you don't have to satisfy all of these criteria. But the more of them you do, the better the chance they will say "yes" to your funding request.
#1: They Like You
Believe it or not, this is really important. No matter how good your venture is, if the investor doesn't like you, they generally won't fund you. So, build rapport with prospective investors and give them the respect they deserve.
#2: They Feel Good About the Venture's Genre
Even if the investors likes you and even if they think your company can be a huge success, they need to like what the venture is all about. For example, someone who hates politics will generally not fund the new political website you are launching. So, find investors who have an affinity for the type of venture you're launching/running.
#3 They Feel a Void
If an individual is an ultra-successful business person who is currently running multiple operations, they are generally not going to invest in more ventures. Since, they don't have a void; they have all the excitement in their daily life that they need. Conversely, a person who feels they might be "missing out on the action" will be more motivated to invest in you.
#4 They Feel There's Good ROI Potential
This is obviously important. Even if investors like you, the type of business, and they feel a void, they generally want to believe they will get a nice return on their investment if they fund you.
There are five sub-criteria to this, which get us to our sum of eight things angel investors want.
Does your company have a strong potential to achieve significant annual revenues? In a truly scalable business, you can multiply your sales without having to greatly increase your resources. Scalable businesses grow more rapidly and can reach an exit (whereby the investor gets their return) faster.
#4b: High Barriers to Entry
Barriers to entry are those things that make it difficult for another firm to compete against you, such as patents or proprietary technology, a unique location, strategic partnerships, and long-term customer contracts.
The stronger and/or more barriers to entry you have, the more likely you are to succeed, and the higher expected ROI the investor has.
#4c: Worthy Management Team
Angels must believe in both the founders and the key operating personnel of your company. Because even the best idea will fail if the team isn't good enough.
#4d: Your Exit Strategy
Your "exit strategy" or method in which you will "exit" your business, is generally to sell it or go public, with the former being much more common. As such, it's good to think about your exit strategy early. Who might want to buy you in the future, and why?
Since angel investors can't realize their investment until you exit, be sure to prove to them that such an exit is viable.
#4e: The Right Price
Finally, angel investors will only invest when the price is right. If you price your equity too high, angels may not have the potential to reap significant enough returns and will not invest.
We see this on the show Shark Tank all the time. The entrepreneur says, for example, that for $400,000 they will give up 10% of their company. The sharks always laugh at percentages like this and say they will need at least 40% of the company or more for that dollar amount.
While the sharks are much more sophisticated, and shark-like, than your common angel investor, you need to price your equity fairly (give them a fair equity stake for their investment) if you want them to fund your venture.
Knowing these 8 things that angel investors want will help you identify and convince the right angels to fund your business!
For my complete game plan for raising funding from angel investors, check out our Angel Funding Formula.
Written by Jay Turo on Wednesday, October 1, 2014
Last week, I wrote about the strong ambition across the globe to have a "Silicon Valley of One's Own," and to replicate the otherworldly innovation of a region that has produced more than 75% of the World’s Unicorns - technology companies started since 2003 that now have valuations of more than $1 billion.
Then, on Monday I went deeper into the drivers of this remarkable concentration along with the macroeconomic drivers of today’s very hot IPO and M&A Markets: long-term low interest rates, the $1.5 trillion in cash held by big tech. companies and private equity firms seeking deals, and venture investor’s now almost universal realization that only via extremely large exits they obtain alpha.
All of this is well and good, but what we found out was of much greater interest was to look at the common attributes and mindsets of these unicorns and their prospective investors and then how to integrate these elements into YOUR entrepreneurial and investment approach, especially when:
• As an entrepreneur, you know that you don’t have a business with “billion dollar potential”
• As an investor, you are more frightened than excited by the “big outlier” return phenomenon
We put it all together and boiled it down to the most essential and actionable insights, and are going to share them via webinar on Thursday at 7 pm ET / 4 pm PT.
Do sign up now via this link: https://www2.gotomeeting.com/register/622073466
I look forward to your attendance and feedback!
Written by Jay Turo on Monday, September 29, 2014
Tech. Exit Trends in Today's Hot Markets
Monday, September 29th
My Wednesday column as to tech. opportunities far from Silicon Valley was well-received, but frankly left a lot of folks wanting more.
Mostly what was asked was a variant of a common theme: How can I apply the wisdoms and best practices of the Uber - successful Silicon Valley entrepreneurs and investors to my business, or to the one I advise, or are invested in.
It was almost a hope against hope, something that most unfortunately are almost too scared to dream about…
...Having / being involved with a unicorn of one’s very own.
How important is this? Well, given that last week's $25 billion Alibaba IPO was greater in size than 2014’s other 154 IPOs - combined - even slightly improving one's "Unicorn Landing" odds has enormous expected value.
So I and my research team collected and analyzed some of the best research on the topic, from the Kauffman Foundation, NVCA, PricewaterhouseCoopers,Dr. Robert Wiltbank, Harvard University, and TechCrunch’s Aileen Lee, including:
- Categorizing the common attributes among 39 companies started since 2003 that are now valued at more than $1 billion
- The relative likelihood of success of enterprise (B2B) versus consumer - facing (B2C) business models
- How the great liquidity in today's market, with some estimates showing more than $1.5 trillion in cash being held by strategic tech. buyers and private equity firms, is impacting deal modeling and valuation analysis (all the way down to the startup stage)
- How and if yesterday’s report from Harvard University that for their endowment VC return for FY 2014 was 32.4% (compared to a 15.4% return for its total portfolio and the S&P 500's 21.38%) was an outlier, a harbinger of an over-heated market, or a reasonable return expectation given the high variance and the illiquidity of the asset class?
We put it all together and boiled down the most essential and actionable points, and are going to share our findings via webinar on Monday at 2 pm ET / 11 am PT.
Do sign up now via This Link.
I do look forward to your attendance and feedback!
Written by Jay Turo on Wednesday, September 24, 2014
I had the good fortune to moderate a panel at last week's IBA Silicon Valley from Start-up to IPO / Exit Conference.
With entrepreneurs, venture capitalists, attorneys, and investment bankers from over 18 countries represented - from places as far afield as Switzerland, Singapore, and Spain (and Santa Monica and Silicon Valley!) - it was a truly international gathering.
Predictions were shared ranging from the outcome of the Scottish independence vote (incorrect) to Alibaba’s 1st day’s trading closing price (correct!), to animated discussions on the differing perspectives on Internet privacy in the U.S. and Europe.
But, the main thrust of the conference call was quite simple.
It was an inquiry, especially from the conference’s international attendees, as to how and why such an incredibly high percentage of the tech. start-ups that turn into “Unicorns” - businesses with exits via IPO or acquisition of greater than $1 Billion - emanate almost exclusively from the United States, and far more specifically from Silicon Valley.
How concentrated is this phenomenon? Well, as shared by Doug Gonsalves of Mooreland Partners, more than 70% of these Unicorns - names like Dropbox, Airbnb, Facebook, Splunk, Uber, Waze, LinkedeIn, and Palantir - were born and are headquartered in a “30 mile circle around San Francisco Airport.”
The “top down” effect of this cannot be overstated.
These huge exits and investor wins drive the fact that the Bay Area - with less than 6 million people - ingests close to 50% of all U.S. venture capital funding, which in turn is four times as much as in all of Europe.
This in turn drives an as large disparity in the number and quality of tech. startups and innovation emanating from various points on the globe.
Now, my perspective on this concentration has been mostly as an American businessman, as one that lives and works in Los Angeles (which may seem close to Silicon Valley, but to those who know both places can attest are worlds apart).
But visiting with entrepreneurs and executives from Europe, Israel, India, Singapore, and beyond brought the matter into much sharper relief.
Gil Arie of Foley Hoag shared the Israeli perspective - one where the best tech companies there as often as not are making the simple and powerful decision to move themselves (and their families) from across the globe for a Valley presence.
Sure, these companies can (and prefer) to build engineering teams in the lower cost, talent rich environs like Israel, India, Eastern Europe, etc., but for the “top of the pyramid” stuff - strategy, product design, capital formation and funding – being in the Valley feels like a necessity.
But expressed also was a strong counter-balancing sentiment, a deep desire to prove that world and industry leading technology companies can be born and grown far from Sand Hill Road.
And surely it will be so.
For this ambition - always in abundance in the world's best entrepreneurs - to build something that is theirs will eventually push back on the Valley's admirable yes, but also unnatural hegemony on global tech innovation and wealth.
And the great thing is that it will be far from a zero sum game.
Just think about it - if even a small fraction more of the world's Seven Billion People could live, work, and dream in a culture as forward and possibility - filled as Silicon Valley's…
…Anything is possible, is it not?
Written by Dave Lavinsky on Monday, September 22, 2014
When my kids were younger, I recall one night when we were eating dinner. My kids were saying "I want this" and "I want that."
And then I said something that I immediately realized I should never tell my kids, or any entrepreneur for that matter.
What I said was this: "you know, money doesn't grow on trees."
Now, you may not think saying this is so bad. So, let me explain.
The reason why I said this was to show my kids the value of money. And that we have to work to make money to spend on the things we want.
But here's the negative: saying this paints the wrong picture. It paints the picture that we can't always get what we want. Which is the exact opposite of the attitude I want my kids, and all entrepreneurs, to have.
What my kids and all entrepreneurs MUST be thinking is YES, I CAN get whatever I want. Yes, it won't just come to me, but with hard work and ingenuity, I can and I will get what I want.
Fortunately, right after I said that to my kids, I caught myself.
One of the reasons I caught myself was from the interview I did a while back with Ken Lodi, the author of "The Bamboo Principle."
In the interview, Ken explained that timber bamboo shoots grow very little for four years while their extensive root system is growing and taking hold. But once the roots are firmly in place, the bamboo can grow a shocking 80 feet in just six weeks.
This story made me realize that money does in fact grow on trees. The key is to work on the tree's roots. To build such a strong foundation that generating money becomes easy.
Every great company has a strong foundation. They create a brand name, sales systems, delivery systems, etc. And then, they can generate cash and profits each and every day.
So, focus on building an extremely strong foundation. Think through your business model. Learn the best practices for each of the key business disciplines - marketing, HR, finance, sales, etc. And then, put your thinking into a strategic plan.
Your strategic plan is your roadmap to success. It is the tool that turns your ideas into reality. For example, the great marketing idea in your head isn't going to become reality unless it's documented in your plan and a team member(s) knows to execute on it. Likewise, your new products and services won't be built or fulfilled unless they are documented and your team knows what to do. Get your ideas in your strategic plan and then you build the tree from which money does grow.
So, never let anyone tell you that "money doesn't grow on trees" or that you can't have everything you want. Because money does grow on firmly-rooted trees and you CAN achieve and get everything you want out of life if you resolve to do so. They key is to build your plan -- your foundation -- and then grow systematically from there.
Written by Dave Lavinsky on Wednesday, September 17, 2014
Raising funding is hard. This is actually a good thing. Because if it were easy, everyone would raise money and start a business, and competition would be ferocious. Better yet, since most entrepreneurs won't take the time to read this essay, you'll know this insider information and have a huge leg-up on them in raising capital.
So, here are 7 things you must know to raise money today.
1. Understand That Funding Doesn't Take Place All At Once
No matter how great your company or idea is, you are probably not going to get a $10 million check right away. Rather, you will typically raise several "rounds" of capital.
You start with a smaller round or amount of funding. Then, as your business grows, you are eligible for larger rounds of funding. This is because your business proves itself over time (eliminating some risk to investors) and your valuation rises as you grow (enabling you to raise larger sums of money).
2. Choose the Proper Source(s) of Funding
Choosing the right source of funding is the key to the Growthink Funding Pyramid™. Some forms of funding are much easier to raise than others. And based on your stage of development, different forms of funding are more relevant.
For example, the funding sources available to a pre-revenue startup are very different than the sources available to a 3-year old company generating $1 million in annual revenues. Case in point: Google initially failed when it tried to raise money from venture capitalists. The key is to go after the right sources of funding at the right time.
3. Build Relationships Early
According to Fred Wilson of Union Square Ventures, "The perfect entrepreneur/VC relationship is one where each has established respect and trust with the other well before an investment transaction is broached."
The key is to build these relationships early. So, even if you don't qualify for a $5 million round of venture capital today, start meeting with venture capitalists so they know you when you do qualify a year from now.
4. Keep Your Business Plan Current
One of the most important things to show in your business plan is what you've accomplished in your business to date. And ideally, every month you are accomplishing more. So, be sure to update your plan with this progress.
Importantly, when you meet a lender or investor, you want to be able to give them your business plan in a timely manner. So finish your plan now, and keep it up-to-date, so you can send it off at a moment's notice.
5. Always be a Marketer
In raising money, the best company doesn't always win. Rather, the best marketer wins. That is, the entrepreneurs that are best able to market their companies to lenders and investors are the ones who raise the money.
Marketing is the process of finding the right investor, convincing them to meet with you, and then convincing them to invest in your business. Yes, this is very similar to how you market a product or service. So make sure to use your marketing skills.
6. Have "Thick Skin"
When raising funding, be prepared for a lot of "no's." Going back to the Google example, even when Google was ready for venture capital, the majority of venture capitalist said "no."
When an investor says "no," it doesn't necessarily mean that your venture is not a good one. It simply means that the venture is not a good investment fit for them. You must have "thick skin" and be able to bounce back from lots of "no's" and persevere.
When failing over and over again to create the light bulb, Thomas Edison famously said, "I have not failed. I've just found 10,000 ways that won't work." Have the same mentality with investors. That is, think, "I have not failed. I've just found 100 investors that aren't a good fit."
7. Adapt as Needed
While you must have "thick skin," that doesn't mean to be foolishly stubborn. What I mean by this is that if you hear the same feedback from investors over and over again, you shouldn't ignore it. Rather, you should adapt.
For example, if several prospective investors tell you they want to see a sample of your product or service before considering funding you, create it for them. Don't just plow forward with contacting more and more investors in this case.
By adapting to the needs of investors, particularly when you hear the same feedback multiple times, you can make the requisite changes to raise the money you need.
Understanding these seven funding truths will help you raise the funding you need to grow your business. For additional assistance, this "truth about funding" presentation will prove quite helpful.
Written by Jay Turo on Wednesday, September 17, 2014
The typical wisdom regarding the appropriate financing course for a new company goes as follows:
1. An entrepreneur starts a company in classic "bootstrap" fashion - with a combination of sweat equity and their own financial resources. This usually consists of personal savings, credit cards, and small loans from relatives (Mom, Dad, Uncle Bob, etc.).
2. Through connections, or through a chance meeting at a networking or social event, an angel investor hears the entrepreneur's story, likes them and their technology, and on the spot, writes a check to provide the company with its first outside financing.
The angel then introduces the entrepreneur to his or her wealthy friends and business connections who, based on the good reputation of the referring angel, also invest.
3. With this seed capital – more often than not totaling between $100,000 and $1,000,000 - the company accomplishes a number of key technical milestones, gets a beta customer or two, and then goes on a "road show" to venture capitalists around the country for capital to “scale” the business.
This venture capital financing - usually between $3 and $10 million - is the first of a number of rounds of outside investment over a period of three to five years. With this capital, the company propels itself to $50 million+ in revenues, and to either a sale to a strategic acquirer or to an initial public offering.
4. With the exit, the entrepreneur and the original angel investors become fantastically rich and are lauded far and wide.
5. The cycle is then repeated - with the original angel investors now joined in their investing by the once impoverished but now wealthy entrepreneur.
6. All live happily ever after.
It all sounds wonderful and it is. The only problem is that it almost always a fairy tale.
What really happens is more like the following:
A. The entrepreneur pours their lives, their fortunes, and their sacred honor into their company- at great personal sacrifice to them, their families, and everyone connected to the enterprise.
B. A "black swan" investor appears out of the blue and backs the company - less impressed by the technology than by the talent, desire, and grit of the entrepreneur.
Technical progress and market traction are much slower and cost a lot more than anticipated. There are a lot of dark, hard days.
C. There is considerable internal debate around whether or not to solicit and/or accept outside venture capital. For most companies, it is simply a non-starter. Management has the wrong pedigree, is geographically undesirable, competes in the wrong industry, and/or has a business model that lacks "scalability credibility" with the venture community.
D. Usually unbeknownst to all, the decision around pursuing or accepting a venture capital round will be the most important factor in determining the investment return for the founder and the original angel investors in the company.
But here is the key – contrary to popular wisdom it is negatively correlated.
Yes, you heard me right – multiple research studies, including from the Kauffman Foundation, have shown that when you remove a follow-on venture capital round from a founder or angel investor-funded company, that expected returns skyrocket.
This is very counter-intuitive but critical insight for emerging company entrepreneurs and those that back them to grasp. It is driven by the following:
• The Best Metric for the Health of a Company is Cash Flow. By definition, companies that receive venture capital cannot fund their businesses from operations, and thus need to seek outside capital.
This leads to a lot of negative selection with venture capital - backed companies – whereby the sample of companies that need venture monies are by definition weaker companies.
• Venture capitalists Have Very Different Objectives than Angel Investors. Venture capital funds are usually 7 - 10 year partnerships whereby the general partners - the “VC” - manage the capital of the limited partners, usually institutions (endowments, pension funds, etc.).
At the end of the period, all profits and proceeds are distributed to the various partners on a pre-determined split. These splits are normally such that the VC needs to obtain a “highwater” return for their limited partners before they, as the general partners, see any return.
In practice, this creates a significant incentive for the general partners to hold on for an extremely large investment return, and to be reasonably indifferent regarding smaller (less than 3x returns).
As a result, the VC will often block a portfolio company from harvesting a very attractive, but not home run, return.
• Venture capitalists Cut Tough Deals. Venture capitalists for the most part are very nice guys and passionate about entrepreneurship, but they are not shrinking violets. And they hire very aggressive securities attorneys to represent their interests.
This combo all too often leads to various forms of deal unpleasantness, like cram-down rounds, liquidation preferences, and change of control provisions, which in turn, often lead to unhappy founders and angel investors even in somewhat successful exits.
My suggestions for the investors seeking emerging companies to back?
First, look for "one and done" financings - companies that need just one round of outside capital to propel them to positive cash flow.
Second, look for companies that have short and realistic liquidity (exit, IPO) timelines.
And third, don’t get star-struck by big venture capital interest in a deal. It is often a double-edged and very sharp sword.
Written by Jay Turo on Wednesday, September 10, 2014
On the cover of this week’s Fortune Magazine is PayPal founder and famed technology investor Peter Thiel. Within is an awesome 4,000+ word opus on Thiel’s views on technology, investing, education and innovation.
Thiel’s career and successes span almost the entirety of the Internet Age - in 1998 he co-founded PayPal, sold to eBay in 2002 for $1.5 billion.
More impressively, the managers and engineers that Thiel attracted to PayPal went on to become some of the most famous entrepreneurs of our era – including at least seven that went on to build companies valued at more than $1 billion: Tesla and SpaceX (Elon Musk), LinkedIn, (Reid Hoffman), YouTube (Steve Chen, Chad Hurley, and Jawed Karim), Yelp (Jeremy Stoppelman and Russel Simmons), Yammer (David O. Sacks), and the data-mining company Palantir (co-founded by Thiel himself).
This recognition for entrepreneurial talent has also made Thiel one of the greatest investors of all time.
His prescience is of course best highlighted by his most famous investment, when in 2004 he gave the 20-year-old Mark Zuckerberg, a Harvard sophomore at the time who had never held a steady job, $500,000 in exchange for 10.2% of the company then called “Thefacebook.”
That investment has so far netted Thiel more than $1 billion in cash, and is the highest profile of a string of amazingly lucrative stock picks, a list that includes the aforementioned LinkedIn and SpaceX, but also tech high-flyers like Spotify and Airbnb.
While lately Thiel has become somewhat infamous for his controversial views on anti-aging (Sens Institute), Libertarianism (Seasteading Institute), and education (20 under 20), let this not distract from the fact that we can all learn a lot from his astoundingly successful approach to investing, technology and entrepreneurship.
A few of my favorites are:
1. Run With the Right Crowd. Starting with the PayPal Mafia, with his teaching of a famed Stanford Computer Science course, and his ongoing writing, speaking, and networking in Silicon Valley and beyond, Thiel travels in the rarefied air of next generation technology ideas and technologies. And because of this, he meets great technologists and entrepreneurs and sees deals. Many are duds of course, but a few are world-beaters like the list above.
2. Think AND Act. As PayPal, Facebook, LinkedIn, Airbnb and so many others so aptly demonstrate, Thiel “gets” key technology and investing precepts like scalability, switching costs, double feedback loops, customer acquisition costs, minimum viable paid options, lifetime value, and many more.
And he acts on what he thinks – through founding and investing in companies with these concepts inherent to their business models.
3. Get Lucky. In so many ways, Peter Thiel’s successes are emblematic of the business religion of our technology age: LUCK.
Books like Outliers, the Black Swan, Fooled by Randomness, and the Age of the Unthinkable profess on it. Successful technocratics like the PayPal mafia toast to it. Aspiring entrepreneurs who seek their name in lights pray to it.
And the average man unwilling to step outside of his box gets none of it.
Peter Thiel, from his earliest days, has stepped out of the box and has thought for himself and challenged others do the same.
He has acted on those thoughts and beliefs through founding and investing in companies that in retrospect might look like easy calls, but at the time were shrouded in considerable doubt and passed over by almost everyone else.
With this way of thinking and doing, Peter Thiel has channeled the Romans and their famous ode to luck - "Fortes Fortuna Adiuvat", "Fortune Favors the Bold."
The question, of course, is will you?
P.S. Looking for Opportunities Now? Each year, Growthink reviews hundreds of emerging company opportunities and selects those with the best management teams, market opportunities, and financial prospects.
To learn more about opportunities we are following now, Click Here.
Written by Dave Lavinsky on Monday, September 8, 2014
Modeling a business strategy after someone else's prior success is typically a great idea.
Interestingly, these models of success can come from rather unexpected sources. While most people will turn to other businesses when looking for new ideas, the world of popular music can teach us quite a lot about business growth and sustainability.
Madonna, for example, has long been the undisputed queen of popular music. Whether you love or hate her music (or her), Madonna has proven to be more than a singer and dancer. She has a savvy business mind that's supported a successful career spanning more than 30 years and an empire of music sales and merchandizing valued at $500 Million. You have to admit, the Material Girl has had a good run.
Here are 3 powerful lessons we can learn from Madonna and use to create success in our own businesses:
1. Constant Reinvention
Madonna is well known for constantly reinventing herself and each album she releases has been different from the last. Reinvention has actually been one of the greatest signatures of her career and has allowed her to stay relevant in a constantly changing market.
As the industry matured, Madonna's music and image have also changed in an effort to constantly bring her fans what they want.
The lesson: Staying relevant is extremely important for businesses of any size. Markets are always changing and a business that allows itself to lose its relevancy has been left behind. Stay in touch with your customers/audience and market evolutions.
2. Pushing the Boundaries
If Madonna is known for one thing it is pushing boundaries. She has been creating controversy throughout her career and much of this stems from her willingness to challenge commonly accepted notions. She created sexier songs with racier lyrics and began challenging what society saw as acceptable entertainment.
In fact, in 1990, when her music video Justify My Love was banned by MTV she packaged it as a single and sold it. This had never been done with a music video before. This innovative, bold, in-your-face move earned her millions in revenue when the video sold like hotcakes.
The lesson: Knowing how and when to push boundaries is an important skill for any business. Challenging accepted notions is often what leads to innovation. Those companies who have come to dominate their markets through innovation were always willing to push things a little further, to do what no other company had yet done.
Pushing boundaries can be a worrisome concept because innovation is almost always met with resistance but without risk there can be no reward.
3. Leverage Platforms & Distribution
Madonna is an impressive businesswoman and she has always understood the importance of leveraging existing platforms and distribution channels. In fact, part of the reason she rose to prominence so quickly is because she made highly effective use of the very young MTV platform. Here was a chance for her to access a vast consumer market in a unique and novel way. Her focus on high quality videos, filled with great music and alluring imagery, set her apart from the other musicians of the time.
The lesson: Madonna was far from being the first successful popular musician but she was one of the first to harness the new and highly effective market of music video television. Think of the iPad. While similar tablet technology came years before it, Apple was the first to package it in a unique style with functionality that appealed to consumers.
Business owners need to be vigilant in looking for new and emerging markets and platforms and then be assertive in establishing themselves in each one. As the market/platform grows in popularity, the prominence of the company also rises.
Like a Virgin
Madonna's career can be a great example from which to draw a number of useful concepts. Her unique voice and readily identifiable fashion sense helped to establish her as a brand early in her career but she was never afraid to reinvent herself to remain relevant. The great impact she has had on the world of popular music comes from her desire to continually push boundaries, to challenge accepted notions and create something new and desirable.
Businesses can never stagnate; they must remain dynamic and able to change to meet the demands of a growing market. Schedule an hour of quiet time this week. You can do this alone, with your advisor, or your core leadership team. Consider these questions:
- What have I been afraid to do in my business for fear or "rocking the boat" or being "too edgy?"
- What new technologies, markets, product innovations, or unique services can I offer? How can I go beyond what currently is and create an appetite for a new product or solution?
- Where can my company get head of others? What ideas do I have that I can validate and get to market before my competitors? What client needs can I solve before anyone else?
- What established platforms or distribution channels are my target customers already using or buying from? How can I leverage them to get my product or service in front of these customers?
The answers can be powerful and open doors to opportunities. Remember, brainstorming and documenting ideas is great, but profit and growth only come from action.
Just like Madonna, be willing to take proactive, out-of-box, bold action.
If you want to raise capital,
then you need a professional
business plan. This video
shows you how to finish your
business plan in 1 day.
to watch the video.
"The TRUTH About
Most entrepreneurs fail to raise
venture capital because they
make a really BIG mistake when
approaching investors. And on
the other hand, the entrepreneurs
who get funding all have one thing
in common. What makes the difference?
to watch the video.
The Internet has created great
opportunities for entrepreneurs.
Most recently, a new online funding
phenomenon allows you to quickly
raise money to start your business.
to watch the video.
"Barking orders" and other forms of
intimidating followers to get things
done just doesn't work any more.
So how do you lead your company
to success in the 21st century?
to watch the video.