On this great day when we celebrate America, its freedoms and way of life, please enjoy (and as you are moved share with the hashtag #SpiritofAmerica) this list of thirty of why this is the greatest country in the history of the world:
#30. Gettysburg. Guadalcanal. Bunker Hill. Heroes lived here.
#29. Contract Rights. Judges. Juries of One’s Peers. Redress for grievances - practiced here.
#28. Yosemite. The Grand Canyon. Yellowstone. Natural Wonders - in abundance here.
#27. The Interstates. State Highways. County Parkways. The Open Road - Great to be on it here.
#26. Uber. AirBnB. Lending Club. The Economy – Shared Here.
#24. The Bill of Rights. The Supreme Court. The Rule of Law. Justice served here.
#23. The Stock Market. Home Ownership. Low Inflation. Assets built here.
#22. Driverless Cars (and Electric too!). Wearable Devices (the iWatch!). The Internet of Things. Tomorrow’s Technologies – Imagined Here.
#21. Diamandis. Kurzweil. Saffo. The future - abundant here.
#20. Hollywood. Disney. Broadway. Entertainment happens here.
#19. The World Series, The Super Bowl, The Masters. Sports are spectacle here.
#18. Jesus. Moses. Mohammed. The Buddha. Religion gets along here.
#17. Gates. Jobs. Page. Zuckerberg. BIG stuff - invented here.
#16. Murphy. Martin. Seinfeld. Rock. Life is a laugh here.
#15. Madonna. Mariah. Whitney. Elvis. Michael. Frank. Songs are sung here.
#14. Faulkner. Hemmingway. Roth. Franzen. Stories are told here.
#13. Kaiser. Pfizer. Genentech. Merck. Healing happens here.
#12. Boeing. Caterpiillar. Deere. UPS. FedEx. Stuff gets built here and gets there.
#11. Amazon. eBay. Ecommerce - transacted here.
#10. Facebook, Twitter, LinkedIn. Networks - connected here.
#9. Google. Yahoo. Bing. Information - organized and accessible here.
#8. Kleiner. Sequoia. Mayfield. Ideas - backed here.
#7. The Inc. 500. The Fast Company 50. Entrepreneurs - inspired here.
#6. Alaska. Montana. Wyoming. Space - open here.
#5. Chicago. Boston. San Francisco. NYC. Cities pulse here.
#4. Jefferson, Lincoln, and Roosevelt walked the Earth here.
#3. The first guy in charge here voluntarily gave up power, when he could easily have been named ruler for life. Character stands here.
#2. The current guy in charge was born to an immigrant father and a teenage mother who was so poor that she received government assistance in raising her only child. Possibility abounds here.
#1. The Greatest Generation was born here, fought and won there. And then they came home, put their heads down, and built a new America. Civil rights, cities, suburbs, highways, schools, and more.
So on this day especially, we say THANK YOU!
The saddest lament of entrepreneurs and owners of private companies seeking to sell and exit their companies is that they want their businesses to be valued on their future potential, and not its CURRENT profitability.
Given that the typical, offered purchase multiples for smaller businesses – as in those with less than $5 million in EBITDA – can be as low as 1 or 2 times last year’s tax return profits, this is understandable.
In fact, we often see purchase offers based on multiples of MONTHLY earnings – not exactly the “happily ever after” exit dreamed of when these businesses were founded!
Yes, getting a business valued and sold based on factors other than its earnings while by no means impossible nor uncommon, is HARD.
Yet…every month there are literally hundreds of companies that sell for very high multiples of profits, for multiples of revenue, and even companies that are in a pre-revenue stage that sell every day just on the value of their technology, their people, and their work processes.
What do they?
Well, here are six things that companies that sell for high multiples do that you can and should too.
1. They Are Technology Rich. Companies rich in proprietary technology in all its forms – patents, processes, and people – are far more likely to be valued on factors other than profitability and correspondingly attain purchase prices beyond a few times current year’s earnings.
As an example, the likelihood of a medical device company being sold or taken public is twenty times greater than that for a services - or a low-to-no proprietary technology company - doing so.
2.They Have Gold at the End of their Rainbows. Businesses that sell for high multiples communicate exciting and profitable future growth.
Their managers demonstrate understanding of the big 21st century “macros” - i.e. how technology evolutions and globalization will impact positively and negatively their industry, market, customers, and competition.
Concurrently, these managers understand the micros well too, especially how their business’ human capital will adapt and grow as change happens.
All this translates into well-developed stories that if their businesses aren’t making it now, there is gold (and a lot of it!) at the end of their rainbows.
3. They Are Great Places to Work. Businesses that sell are usually characterized by that good stuff that we all seek in our professional environments.
They are culturally cohesive. If they don’t have low employee turnover, they at least have well - defined career progression paths. And their compensation policies align and pay well with desired performance.
Quite simply, they are great places to work and are reputationally strong within their industries.
4. They are Process and NOT People Dependent. Businesses that are overly dependent on charismatic owners or a few dynamic salespeople or engineers rarely sell because the majority of their value can simply walk out the door tomorrow and never come back.
Important aside: for those entrepreneurs that harbor the desire to sell but not the ambition to build a meaningfully sized, process-based organization should then focus their exit planning almost exclusively on technology and intellectual property development.
If they are unwilling / unable to do this, then they should put the idea out of their head for now and invest this energy into more meaningful pursuits.
Like my favorite - making absolutely as much money today as one possibly can.
5. They Have Good Advisors. Businesses that do everything right but have messy financial statements because of poor accounting, messy corporate records because of poor or non-existent legal counsel, and messy “future stories” because of poor exit planning and investment banking advice, simply do not sell.
Sure, they may get offers, but invariably these deals fall apart in diligence and at closing.
And as anyone that has ever been through a substantial business sale process knows, almost nothing in business is as time and energy-draining as is getting close to a business sale and not getting it done.
6. They Get Lucky. Luck remains a fundamental and often dominant factor that separates the businesses that successfully sell from those that don’t.
The best entrepreneurs and executives don’t get philosophical nor discouraged by this but rather they embrace it.
They try new things. They follow hunches. They make connections.
They start from the pre-supposition of “accepting all offers” and work backward from there.
They and their companies can be best described as “happy warriors” – modern day action heroes ready for the fight. When they get knocked down, they smile, wipe their brow, and get right back in the fray.
And you know what? Our happy warriors, living and thinking and working like this day after day channel some mystical power and draw great luck and more to themselves and their companies.
Yes, companies that sell are the good and lucky ones.
Follow the advice above and fortune just may smile on your company and those you invest in too.
“Success is not final, failure is not fatal: it is the courage to continue that counts.”
- Winston Churchill
At the very heart of entrepreneurship, small business, and investing sit risks, roadblocks, challenges, and delays.
The statistics are only debated to their degree but not their overall thrust - a small percentage of businesses ever become meaningfully profitable and a smaller percentage still are ever sold for a meaningful price.
In other words, the vast majority of businesses - by objective, financial measures - do not achieve their desired and sought after objectives..
Even worse, a lot them do so badly - never achieving even one dollar in revenue and / or go so deeply in the hole that they have significant and negative financial spillover effects.
Like business and personal bankruptcies and investors losing all of their money.
In a word, the trials and tribulations of business are and can be traumatic.
Now it is not the kind of trauma that survivors of war and natural disasters experience, but in the world of work it can be about as bad as it gets.
Yet both domestically and around the world entrepreneurs are starting and growing businesses at a greater rate than at any time in the last 15 years…3% of the U.S. adult population annually start one, and a multiple of that contemplate doing so.
And investors make more money investing in startups and small businesses than in any other asset class.
So what gives?
Well, there is the financial view, namely that the rewards of a business sale are so great and life-changing that having any probability of its occurrence make the grave financial risks of business - building more than worth taking.
But this at best only explains half of the story.
No, there is something else going on here, and research regarding of all things - Post Traumatic Stress Syndrome - points to what it is.
Research done by among others Dr. Richard Tedeschi of the University of North Carolina shows that strong, negative experiences like war and natural disasters are NOT as scarring as once thought.
In fact, the opposite is true.
Statistically, most survivors of traumatic experiences - like prisoners-of-war and victims of natural disasters - come out of them stronger and on most measures, out-perform those in their peer groups unaffected by the awful events.
Now everyday all of us should count our blessings dozens of times as “there but for fortune go I’ and offer nothing but great compassion and empathy for those suffering trauma, especially when it comes through no fault of their own.
But we also should take significant solace and inspiration from the rest of the story.
Life, as it does, goes on.
And according to the latest research, the old adage is true of that which does not kill you REALLY does make you stronger.
Now it would not be proper to equate a business failure with the physical and emotional traumas experienced by survivors of war and disaster, but entrepreneurs and executives can and should draw important wisdom from them.
Such as if you “fail” at this particular business, you won’t be broken and scarred forever.
And that professional and entrepreneurial growth is a participatory sport – learned only by doing and trying and striving and not by watching and fretting and waiting.
And then there are the related ideas of diversification and iteration.
Such as, in business, it is almost always far better to have two business “failures” and ONE success than it is to go zero for zero.
For the entrepreneur this does not necessarily mean running multiple businesses concurrently, but it does mean that the business strategy should be iterative and testing based.
Successful Internet companies get this intuitively - see Amazon and eBay and thousands of others - and you should too.
As for investors, they should take advantage of the incredible opportunity that the modern financial system offers to back multiple entrepreneurial companies, and not just one or a handful.
With the average return of the startup company asset class being 2.5X in a mean time of about four years, the odds are strongly in your favor if you both invest right and diversify properly.
So entrepreneurs and investors get in the game!
Failure is no way near as bad as advertised and if approached with the right spirit and strategy, it can truly be the ultimate blessing in disguise.
To Your Success,
The power of business intelligence tools and technologies (BI) to provide managers and leaders accurate, real time visibility to the performance of all aspects of their companies - marketing, sales, operational financial - along with "automated" insight as to how to improve them has made BI one of the highest ROI arenas of business management in the world today.
This is evidenced by both the huge sums of money companies are investing in BI (forecast by IDC to grow to over $52B in 2016) and by the research that show "BI Best in Class" companies enjoy double the revenue growth and triple the profit growth relative to their “BI Average” competitors (Gartner Group).
Yet…for the executive looking to put the power of BI to work in their companies it can be a very noisy and confusing (see terms like predictive analytics, Internet of Things, Hadoop, Executive Management Platforms, etc.) buying marketplace to navigate.
So here is a short-hand primer on how to start putting BI to work in any company in just a few short days…I call it being BI H.A.P.P.Y and it goes like this:
High ROI is Everything. When it comes to BI, the first place to look is at it should be - cutting through all the noise and clutter and asking any BI provider a simple question: Show me how your tools will generate high ROI and make my business money right away.
This should of course be the first question asked for any business investment, but especially so in a burgeoning arena like BI, where a lot of the providers are new companies themselves and when you cut through their marketing veneers don’t really have documented proof for their stated value propositions.
Press them on it, and if they just keep coming back with platitudes versus ROI proof then move on.
Agnostic is Best. A key distinction when it comes to BI tools and approaches is whether they are agnostic / open-source or closed / focused on a specific business process / industry application.
My strong recommendation is at this early BI juncture is to take the agnostic / open-source approach, because no matter what BI tool one chooses, in just a few months there will be a next generation option that will be cleaner (i.e. less riddled with bugs), probably less expensive, and more naturally business intuitive than the current crop.
This does not mean that one should wait to get started until these next generation tools arrive, only that the systems and platforms that one commits to now should be easy to upgrade / port over to / connect with the next generation systems as they become available.
As importantly, agnostic / open-source BI systems also allow for a standardized, company-wide “Manage by Data” look and feel unavailable in industry / process specific systems.
The Best BI is Prescriptive AND Predictive. BI at its best should be both Prescriptive - interpreting for us the meaning and importance of historical results and how to improve them and Predictive –performing the regression analyses for us as to what the future is mostly like to hold.
Is the technology to do this fully there yet? No, but it is getting close, and the smart executive recognizes the value of building these prescriptive and predictive BI muscles now because when the technology does gets there, the companies that can’t run this “analytics race” will be lapped by those that can.
DFY. A fundamental BI dimension is the Done-For-You (DFY) to Do-It-Yourself (DIY) spectrum.
While it is important to develop strong DIY BI competencies, we also should recognize that because BI tools and technologies are so new and because so much of the value of them is found "On the Margin," that working with a BI skills-specific service provider is almost always a necessary best practice.
A skilled BI service provider helps us:
• Decide which BI analytics and dashboard tools and technologies are most appropriate for our business
• Finds the data in our organizations - on our desktops, in our spreadsheets, and through the various SaaS programs and platforms on which our companies run
• Visualize and parse the data in ways that work for us as managers and leaders
• Interpret what the data means and what to do about it
• Make sure that all of the above doesn't “break” and that the “BI muscles” within our organization are built and remain strong
H is for High ROI
A is for Agnostic / Open-Sourced
P is for Prescriptive
P is for Predictive
Y is for DFY (Done-for-You)
Follow this simple meme and watch the results from your BI Investments and for your company soar.
Last month, data management and dashboard start up Domo announced it had raised an additional $200 million in growth capital, bringing its total haul over the past four years to a truly remarkable $450 million.
Now given that the company has yet to even come close to breaking even, this can be viewed as either a great validation of Domo's business model, or as more evidence of the “Bubble Mania” of the current technology financing landscape and a screaming signal to get out while you still can.
For those in the bubble camp, Domo is a “Tech Unicorn,” a recent start-up worth, either through a financing, an acquisition or IPO, more than $1 billion usually without any meaningful profits to speak of and thus instead valued via reasonings and justifications far outside of the pale of traditional finance and accounting.
On the other hand, while financings for companies at Domo's stage of development have never been as large and audacious as they are now, do remember that valuing technology companies on a combination of their future earnings promise, the intonations of their charismatic founders, and just the out and out coolness of their technology is nothing new, and that much more money has been earned than lost on these kinds of bets.
From this perspective, Domo is just another in a long line of American software companies - like Uber, Palantir, Airbnb, Dropbox, and Slack - with the ability and promise to transform and disrupt “Business as Usual” for core life and work processes across markets and industries.
And investors just can't enough of them.
On a macro level, this has a lot to do with simple supply and demand. Globally, most investors only feel comfortable putting money to work in places with stable political systems, stable currencies, liquid exit markets, and ones that have protections against expropriations of wealth once earned. So both crossed off are domains where 80%+ of the world’s population’s live and work, and characteristics that the U.S. in general and California in particular have in unique abundance.
On a micro level, most investors prefer to deploy capital without taking Technology Risk (as would be typical in say - a biotech start up).
So easy to understand and believe in are Software-as-Services Models like Domo's, with business models often boiling down to a simple cost of customer acquisition cost divided by lifetime customer value metric (in Domo's case, over $50,000 per customer!).
And most importantly, investors have and will always love to back Disruptive Technologies - which, to be clear, is different from Technology Risk.
This has been true from the days of Rockefeller with Oil, to Ellison, Gates, and Jobs with the computer and software, through Zuckerberg with social media to Kalanick and Chesky with Uber and Airbnb and The Sharing Economy.
And so it is potentially true with Domo and its promise: The better organization, visualization, and analysis of data, toward the end of changing the world of business done by gut and hand to one done by statistics and evidence.
And because this value when delivered to customers is so potentially significant - making their enterprises more efficient and predictably profitable - Domo's ability to both charge a lot for its services and have customers stay with them for a very long time is again...
...easy to understand and believe in.
And that's why that $2 billion valuation may not be so high after all.
There were some great responses to my post last week as to the poor returns experienced by venture capital fund investors.
Some suggested that the blame for this lied more with the very difficult market and deal conditions of the past decade than with the VC investment model itself.
Typical was this comment submitted by a San Diego VC: "I agree that the VC fund industry is guilty as charged when it comes to being opaque as to real returns data, but I challenge you to revisit your analysis in 24 to 36 months, when we all will have had time to benefit from today’s strong M&A and IPO markets."
One reader reference Gust Founder David Rose’s new book - “Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups” and to Rose’s main contention that to access the 25% IRR potential of the asset class one must hold positions in not less than 20 companies.
He asked, “Is this practical advice? I mean - who really has the time to find, diligence, and invest in dozens of companies? And for those that don’t, are there really any “Warren Buffet-types” to back in this asset class?”
This is the billion dollar question, is it not?
And while of course anyone will be very hard-pressed to even approach Warren Buffett’s other-worldly track record, there are some powerful forces right now driving the timeliness of venture investing via the “Berkshire Model.”
These forces fall into three main categories – Improved Liquidity, Investment Flexibility, and what let’s call “Labor Arbitrage.”
Improved Liquidity. Illiquidity is a huge elephant in the room when it comes to startup and emerging company investing. Most startups and early stage companies that seek outside investors are years away from investor liquidity – either via sale to a strategic or financial acquirer, or far more rarely via a Public Offering of the Company’s stock.
Now Berkshire Model companies, as entities with fundamentally investment vs. operating mindsets more naturally position, language, and network their businesses in finance contexts.
While doing so by no means assures successful outcomes, it does create the far more likely possibility of secondary market liquidity alternatives for investors that “want out” in the interim before the final exit.
Investment Flexibility. Investment companies in the Berkshire mold have great flexibility to structure investments of various types: traditional straight cash-for-equity, warrants, contingent warrants, revenue certificates, convertibles, in exchange for professional services, on project-by project bases, and more.
This flexibility is a game changer, as when done right it can provide managed, diversified exposure to a portfolio of deals and opportunities inaccessible via more “traditional” means.
Labor Arbitrage. A wise man once said that all businesses fundamentally do is “bridge the gap” between markets for labor and those for products and services.
Relatedly, one of the best advantages of the Berkshire model is the ability it affords to "Mark Up" the labor involved in effecting deals and transactions.
Let’s explain this by example.
Say a finance or advisory services professional is paid a salary of $80,000 per year, plus bonuses and incentives based on deals, transaction closings, and successful exits (not atypical terms).
Let’s then utilize a 20% load factor and assume that this worker’s fully loaded cost is $100,000 per year. Let’s then assume a 2,000 hour work year (we hope they work harder than this, as this is such an opportunity filled industry!).
Then, on a hourly basis, this professional’s fixed cost is approximately $50 per hour.
Now it is neither unusual nor unreasonable for even midlevel management consultants and investment bankers to bill out at $250 an hour and more on a cash basis, and much more than this on a cash equivalent basis when services are performed in exchange for contingent and / or equity compensation pay structures.
The critical point here is that when services are performed in exchange for equity compensation , even with average deal “picking” there is a natural Deal Arbitrage Effect that can easily create positive expected value on each and every deal.
A massive advantage.
Like everything associated with startup and emerging company investing, a lot of hard and smart work is needed to do it right.
But when done so, the payoffs can be enormous.
Just ask any Early Berkshire investor for confirmation.
To Your Success,
P.S. Like to learn how to apply these principles to your portfolio? Then attend my webinar this Thursday, “What the Super Angels Know about Investing and What You Should Too.”
Click Here to learn more.
Years ago I served on a funding panel with Tom Clancy. At the time, Tom was a partner at Enterprise Partners Venture Capital in San Diego.
At the time (around 2003), many venture capital firms were licking their wounds. They had funded a ton of companies during the tech bubble phase, and most of them had failed.
This led Clancy to make an important decision. He said that going forward, Enterprise Partners would wait at least six months before funding any new company they met.
The rationale was solid. During the six months, he would see what the entrepreneur was able to accomplish. If the entrepreneur accomplished the milestones set forth in their business plan, than they were deemed worthy and would receive funding. If not, they would not.
So what is the entrepreneur to do during the six months in order to get the investor to write them a check?
Obviously they need to achieve milestones... But what else?
Before I give you an answer, I want you to know how crucially important this is, not only in raising capital, but in securing key partnership and gaining key customers.
Let me give you an example of an entrepreneur who successfully used this technique in order to get a key partner. This entrepreneur’s name was Chet Holmes. And one of the key reasons that Mr. Holmes achieved success was through his partnership with marketing guru Jay Abraham.
How did Holmes get the partnership with Abraham? Like many people, he tried to reach him by phone, fax and mail. But Holmes did it every other week...
...FOR TWO YEARS!!!
Then, he finally got a call from Abraham's business manager for a lunch appointment, flew to Los Angeles for lunch, and established a very profitable partnership.
So, what's the answer to the question of how to woo investors, customers, partners, advisors, key hires, and more over six months?
Effective and persistent communications. In other words...
You must consistently, over a period of time, hammer home your message to investors, key customers and others.
What exactly does this mean? For investors, once you meet them, you should follow-up with them at least twice per month to update them on your progress. For prospective customers, you should contact them on an ongoing basis to continually give them value and convince them of the benefits of working with you. And of course, don't forget to follow-up with your existing customers.
And a key here is that this follow-up should NEVER END unless or until the costs of the follow-up clearly outweigh the benefits.
Remember that people invest in, buy from, and partner with other people. So, who would you rather work with? Someone who has been contacting you for two years with quality messages regarding why you should partner with them, buy their product or invest in them? Or someone who you just met yesterday and tells you how great they are?
The answer is clear.
Don't stop at the first contact. Choose the appropriate frequency (i.e., you don't want to be perceived as too obnoxious or pushy to potential investors), craft quality messages, achieve your milestones, and convince investors and others to work with you over time.
A joy of my work is that I get to connect often with smart, “out-of-the box” businesspeople that can be best described as "Investor – Entrepreneurs.”
The most talented of these fine folks evaluate opportunities through the complementary perspectives of the two mindsets.
As investors, they do so dispassionately - with the lenses of risk and reward, and of expected value.
As entrepreneurs, they are more operational, more tactical.
They know that numbers on financial statements are byproducts of collective, human effort - of sales, marketing, and operational strategies and project plans, all underpinned by cultural commitments to excellence and to winning.
Now, when things get dicey is when these Investor - Entrepreneurs don't properly distinguish in their otherwise able minds where investing and entrepreneurship do NOT intersect.
The problem reveals itself in a number of ways.
For the entrepreneur, it is a Cognitive Dissonance, a denial of the simple fact that an incredibly large percentage of their net worth and earnings power is often concentrated in a single, and very high risk asset - i.e. their own business.
For the investor, it is the dark and dangerous side of that usually, admirable human quality of Commitment and Consistency.
This is the tendency we all have to stick to decisions that we have made in the past even if and when the original evidence that underpinned those decisions has changed dramatically.
The classic example of this is basing an investment decision on the original purchase price of an asset, its sunk cost, even though the faulty logic of doing so is almost self-evident.
Yet, following this truism, because of our emotional human wiring, is always far harder to do in practice than in theory.
So, how should - let’s call them “Entrepreneur Mind” and “Investor Mind” - properly work together?
Here are three ideas:
1. For Investors, view with an extremely jaundiced eye records and claims of past performance.
Let's be clear, doing so is extremely hard.
Both because of the aforementioned “human wiring” matter, and because the brokerage and insurance industries have a massive, vested interest in manipulating and exploiting this wiring to prevent us from doing so.
To best resist this manipulation, invest like an entrepreneur - pointed toward the future and leaving the past where it rightfully belongs, in the past.
2. For Entrepreneurs, just for a few moments, step in the space of not believing one’s own “propaganda.”
This too, is hard as of what makes entrepreneurs who they are is their unshakeable and often irrational self-belief, in spite of often much evidence to the contrary.
This self-belief serves them well as leaders and as creators, but as shareholders not so much.
And as shareholders, the irrefutable principles of diversification, of long-term and global planning, and of the overriding importance of small differences in return, multiplied over time, so fundamentally apply.
3. And finally, as Investors - Entrepreneurs, to recognize good professional guidance as a success requirement, for the simple reason that our most dynamic competitors are getting it.
And if you are not, then you are wanting.
And in both investing and entrepreneurship, this wanting, this disadvantage, even if small, multiplied over time is usually the difference between failure and success.
What does this look like in practice?
Well, for one, a best-functioning team of professional advisors should include a great strategy and exit planning advisor, a great accountability coach, and a great wealth manager.
And they should all work together, especially and effectively toward that most natural and glorious and appropriate goal of all entrepreneurs and of all investors.
Which, of course, is asset building and earning power.
Built both slowly and methodically over time as an investor and in sudden, large green and creative shoots as an entrepreneur.
One of the great joys of my work is the unique opportunity it affords to meet and to learn from talented, committed, and effective executives - working hard and long on their entrepreneurial journeys.
Men and women like Mike Kovaleski and Carrie Kessel of Mahar Tool, a Michigan-based, mid-sized automotive technology distributor that is reinventing how vendor partnerships are structured and maintained in the global, high-tech, and oh-so competitive modern car business.
And as they do, they are creating both good jobs and an inspiring culture that's reflected in both the great longevity of their company (68 years young and counting!) and in the average tenure of their executive team (12+ years and increasing daily!).
Leaders like Dr. Ezat Parnia - President of Pacific Oaks - a small and fast growing Pasadena-based college that under his leadership is merging traditional offline educational values with the promise and power of online learning.
And as he does so, everyday demonstrating his fierce commitment to his students, mostly adults going back to school mid-life to earn training and degrees in early childhood education…
…who armed with their Pacific Oaks’ educations go out into the world and effect the school’s mission of seeing every child - no matter race, gender, or economic circumstance - be treated as a unique, special, and able learner.
And leaders like Good Samaritan Hospital’s CEO Andy Leeka, with his so articulate commitment to seeing his 1,400 employee strong, inner city Los Angeles Hospital become both a leader in care giving and a place that shows that even budget and regulatory-strained hospitals can be places of high staff camaraderie, great patient care, and dare we say, even a little fun, too.
What do these executives all have in common?
Well, first of all, in spite of them all leading very different organizations, with different reasons for being, competing in very different marketplaces, with very different sets of challenges and opportunities, they all think and act fundamentally the same.
Recognizing that even though they lead organizations that are on average more than 80 years old, that their fundamental business reality today is constant, unrelenting, everlasting, and fundamental change.
And that their job as leaders is to respond, pivot, profit, and win in the midst of all of it.
Second, they all "get" strategy.
Not as some academic or consultant’s exercise, but strategy as at the core of why their organizations exist and what their mandates are to lead them.
Strategies that are big, as in where do they want their organizations to be 5, 10, 20 years hence? (And how to best utilize data and Business Intelligence to get there).
And strategies that are “small,” as in grappling with what is the best CRM, the best eCommerce platform, the best project management software for their organizations.
And yes, they are all definitely contenders.
They just don't talk about reaching for the brass ring, they sacrifice every day to actually do so.
They plan their work.
And then they work their plans.
They (and everyone around them) know that it is not about them. Their glory, their rewards.
They’re in it for the mission.
Because they are blessed to be given the opportunity, and now by golly they are going to strive and strain with every fiber of their being to make the most of it.
To contenders like them, I have only one thing to say: Thank You.
For making all of our lives healthier, smarter, richer, and all in all just better.
Oh, and maybe a quick word of advice for these business and organizational heroes: Every now and again do come up for air and give yourself a pat on the back.
Because you've earned it and more.
I grew up watching Larry Bird. My dad was a huge Boston Celtics fan (which is relatively odd considering he grew up in New York City). So, I became a huge Celtics fan too. And I was a big fan of the heart of the Celtics’ Larry Bird.
This guy never gave up.
In fact, if you watch this 40 second video - https://www.youtube.com/watch?v=H_RJ5XN8TK8 - you’ll see what I consider the greatest steal ever...
The Celtics were losing by 1 point with only 5 seconds left. And the other team had the ball. The game was essentially lost. But then Larry Bird intercepted the inbound pass and passed the ball to Dennis Johnson. Johnson scored the basket and they won the game.
While Larry Bird’s steal was phenomenal, if his teammate Dennis Johnson wasn’t in the right place and didn’t execute on his layup, Larry Bird’s efforts wouldn’t have resulted in a win.
As an entrepreneur, you also need great teammates. Since you can’t possibly build a great company by yourself.
In fact, great entrepreneurs are more like Larry Bird the coach (who “hired” and coached his players into being the best they could be) than Larry Bird the player (who performed key tasks and made his co-players better).
The key is this -- you need to find, hire and then train and coach the best people. Because there are TONS of bad people. I learned this very early on at Growthink. Years ago, I generally gave people the benefit of the doubt. If they said they could do something, I figured they could. And then I quickly realized that some people “have it” and some people don’t.
I think “having it” is the quality of people who “do what they say and say what they do” and always try to do their best. You want people who “have it” and at the same time people who are qualified and uniquely skilled at the position you need to fill. For example, while I believe I “have it,” there’s a whole bunch of positions that I’m not qualified to fulfill or which wouldn’t inspire me to do my best work.
So, how do you find these great people who “have it” and possess the skills you need. Here are my recommendations:
1. Event Networking: great people have several common traits, one of which is their dedication to ongoing education. That’s why great people generally go to events and conferences. You also need to go to these events, where you’ll find some very talented individuals.
2. Being Sociable: I’ve heard lots of stories of people meeting people at sports events, supermarkets, on a plane, etc., and striking up conversations that results in great hiring decisions. I must admit that I’m not the most sociable person outside of work; but I’m getting better at this.
3. LinkedIn: LinkedIn is a great online network to find qualified people to come work for you. Join relevant LinkedIn groups to find folks with similar interests and who are looking to further their careers. And reach out to the best ones.
4. Recommendations & Referrals: Oftentimes the best hires are the ones that were recommended to you by friends and colleagues. Send emails out to your network and advisors asking if they know someone with the skills you need. People generally only recommend people that they believe are competent, since their own reputations are on the line.
5. Executive Recruiters: while this will cost more money in the short-term, executive recruiters (also known as “headhunters”) can find you great candidates. This is what they do. Importantly, they will often find you people who aren’t actively looking for a new job. These are often the best folks. I mean, would you rather hire an unemployed person looking for any company that will take them, or someone who’s thriving at a company but sees great opportunity in helping you grow your venture?
Importantly, in its relative infancy, eBay used executive recruiting firm Kindred Partners to find and hire Meg Whitman. Whitman turned eBay into a multi-billion dollar company and herself into a billionaire.
Using one or more of these five tactics will get you qualified job candidates. But, before you hire any, I highly suggest you give them two tests as follows:
1. A skills test: whenever possible, you should test the skills of the job candidate. If you are hiring someone for a research job, give them a research assignment. If you are hiring someone to be a receptionist, do mock calls with them. Etc. I realize that for some jobs, it may be harder to test, but get creative since you want to make sure they will be able to perform.
2. A culture test: if someone comes highly recommended and passes a skills test, it still doesn’t mean they’re the right hire. They MUST match with your company’s culture. For instance, if they’re a stiff, and your company thrives on fun and creativity, then they’re not the right match. Your company culture is critical, so don’t ignore this key test.
Hiring the right players for your team is critical to your success. There are no wildly successful 1-person companies that I know of. Imagine for a moment if you had a dream team; a group of employees that were so talented your competitors would be in awe. How good would your company become? How much faster would you accomplish your goals? How great would it be to come to work every day? Think about your answers to these questions, and then start building a great team and a great company today.