Growthink Blog

Bootstrap Funding: Examples & How to Get It


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Many of my newsletters and blog posts are on the topic of raising capital. I talk about how to raise angel funding. And venture capital, etc.

And don't get me wrong, I think, actually I know, that raising funding is critical. Because the #1 reason (by far) why entrepreneurs fail, is that they don't have or run out of cash.

But one thing I'd like to clarify is that you CAN start and grow a business without funding. Or with little funding.

In fact, many great businesses have been started this way. A survey of Inc 500 companies found that 48% started with $20K in financing or less, and 73% started with less than $100K in financing.

And, if you are looking for BIG funding sources, like venture capital, they will often want to see that you have bootstrapped or already raised other, smaller funding sources before they fund you.

So, if I misspoke or implied that you absolutely must raise lots of funding from the get-go forgive me. Rather, you must start by bootstrapping or raising enough funding to get you going, and then later on, many more funding sources will become available to you to help you grow your company.

Let me give you some examples of entrepreneurs who have done this. In fact, most of these entrepreneurs have started with these small amounts and then raised huge amounts of funding when they were ready for rapid growth:

  • Under Armour's Kevin Plank funded his company's launch with credit cards.

  • Brian Scudamore founded 1-800-GOT-JUNK, which now has over 200 franchised locations in the US alone, with just $700 of funding.

  • Michael Dell launched Dell Computers with only $1,000.

  • Jill Blashack Strahan launched Tastefully Simple, which offers easy-to-prepare foods and gifts with just $6,000 in savings. Her company now generates over $115 Million in annual revenues.

  • Ben & Jerry launched with $8,000 in savings and a $4,000 loan.

  • Pamela Skaist-Levy and Gela Nash-Taylor launched Juicy Couture Clothing with just $200 and a revolving line of credit. Juicy Couture was later sold for $53 million to Liz Claiborne.

  • Google's Sergey Brin and Larry Page launched the company with credit cards (and later raised angel then VC funding among others).

 

And, in addition to these and other entrepreneurs who launched their companies with little funding, there are tons of entrepreneurs who have launched their companies with non-traditional sources of funding.

Such as Kenneth Cole, who raised hundreds of thousands of dollars in funding from a shoe manufacturer (vendor funding). Or Blowfly Beer, who raised tens of thousands of dollars in funding from customers (customer financing).

The key point I want to stress here is that the vast majority of entrepreneurs have the mindset that if they can't raise money from banks, angels or VCs, that they can't launch or grow their companies. This is simply NOT true. So don't fall into this thinking. As there are 38 other sources of funding, or bootstrapping, to turn to.

 

Suggested Resource: As you just learned, most entrepreneurs fail to get funded because they chase after the WRONG sources of funding. Do you want avoid this failure? And successfully raise funding to grow 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.


Improve Your Business with The Improvement Matrix


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I hate to admit it, but I'm a bit of a dork.

You see, I did really well in school, so I guess I could have been considered a dork back then. But I was also a really good athlete, so that made me "cooler" and so I never got a dork label.

But I did something many years ago that clearly classifies me as a dork. What did I do? I had one of my articles published in Quirk's Market Research Review. Quirk's is a trade journal for market research professionals that mostly talks about new market research techniques and ways to tabulate data. Pretty exciting stuff, I know :-)

I think many of the other authors at Quirk's are like the guys from Revenge of the Nerds, complete with pocket protectors. But, when I submitted my article, I didn't care, because I had something important to share.

What I shared with Quirk's readers (this was way back in 1994 so they don't even have an archive of the article on their website), was what I call "The Improvement Matrix." I originally created these matrices for bigger businesses who paid big bucks for them.

But over the years, I realized they could be created much less expensively, and have HUGE value to entrepreneurs like you.

So what is the "The Improvement Matrix?"

It's simply a way of looking at your products and services and figuring out what you should improve and in what order.

Let me walk you through it. As an example, let's assume that I'm Sal. Sal's my landscaper. He frustrates me to no end since he's such a bad marketer [in fact he makes me think about getting into the landscaping business since I know I'd clean up....but I'll stop digressing].

OK. The first step is to identify what it is that your customers find most important.

So, as a landscaping customer, Sal should survey me and his other customers on the 8-12 attributes of his business that I find most important.

Maybe Sal would have chosen these attributes to survey:

1. Quality of lawn mowing
2. Quality of plant trimming
3. Offers to do additional work (e.g., clean leaves from gutters)
4. Price
5. Value (fairness of price based on quality of service)
6. Ease of billing
7. Ease of communications with company
8. Professionalism of workers

For each attribute, he should ask customers, "How important are these attributes to you in your landscaping company?"

He could have used a 4 point scale as follows:

1 - Not important
2 - Somewhat Important
3 - Very Important
4 - Extremely important

The results may have looked as follows:





As you can see, Sal's customers considered "quality of lawn mowing" and "ease of billing" to be the most important attributes. Conversely, the least important attributes were "professionalism of workers" and "offers to do additional work."

The next question on Sal's survey should have been: "How do you rate my performance on these attributes?"

He could have used a 4 point scale again as follows:

1 - Poor
2 - Fair
3 - Very Good
4 - Excellent

Importantly, Sal should judge responses to this performance question against how important the attributes are. The results may have looked as follows:




As you can see from the chart, on attributes like "value," Sal's performance is in line with importance. But, on the key attribute of "ease of billing," Sal is vastly underperforming. And, on the non- or less-important attribute of "professionalism of workers" (maybe Sal has his workers dress in formal uniforms), he is over-performing.

So, what should Sal do? Well he should clearly focus on improving his "ease of billing" since this will improve customer satisfaction. Also, if he is investing too much money and time in "professionalism of workers," he should consider re-allocating those resources to improving "ease of billing."

As you can see, the beauty of the chart, based on simply 2 sets of questions asked to customers, is that it identifies the most important areas of your product or service to fix to better satisfy customers and gain competitive advantage.

Now, a final way to look at the performance chart is as a matrix, which I call the "Improvement Matrix."  You can see the matrix below.




The Improvement Matrix is simply a different way of looking at importance vs. performance data. It plots the data and classifies each attribute into 4 quadrants:

1. Underperforming (but OK): you are underperforming in this area, but customers don't care much about it, so that's ok.

2. Overperforming: you are doing well in this area; but customers don't value it. Keep doing what you're doing, or consider allocating resources away from this area into a more important area.

3. Keep it up: these are areas that your customers care about and that you are doing well in. Keep it up.

4. Improvement Quadrant: this quadrant is the key. It shows those areas that customers find important, but for which your performance is not up to speed. You MUST get better in these areas ASAP.

As you can see, the Improvement Matrix will alert you to the key areas of your product and service that you must improve. All it requires is a simple customer survey and plotting of the data. And the results can revolutionize your business. So do it!

 

Suggested Resource: Would you like to know more ways to improve your business; and turn it into one worth $10 million or more? Then check out Growthink's 8 Figure Formula. This video explains more.


Venture Capital Funding: It's MORE Than the Dollars


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Many years ago I was involved in a business targeting the shoe market. Through some connections I made, I was introduced to a potential investor. This investor was one of the original employees of L.A. Gear, a shoe company that at one point went public and was the third leading athletic shoe retailer behind Nike and Reebok.

Within 5 minutes of my conversation with him, one thing became extremely clear: this guy could give me a ton more value than just the dollars he could bring to the table.

He could tell me exactly how the industry worked. He could tell me what trade shows to attend and which to avoid. He could tell me which manufacturers to work with, and how to negotiate the best rates. He could introduce me to the best distributors to make sure my product reached as many retailers and customers as possible. And so on.

I tell you this because far too many entrepreneurs look at investors, particularly venture capitalists, solely as sources of cash. When it reality, many venture capitalists provide a ton more value than just the cash they offer. In fact, the right venture capitalist or VC is often the difference between your success or failure, or achieving minimal versus maximum success.

The three top areas where VCs often provide value include:

1. Contacts they have in their networks (these contacts can be for partners, employees, customers, distributors, vendors, etc.)

2. Advice in running your business, based on deep experience in your industry and in successfully growing and nurturing ventures

3. Contacts to additional sources of capital

Consider the following five VCs who are consistently ranked among the most respected VCs in the industry. Read their bios, and think about how their experiences and relationships could benefit your company.

Jim Breyer from Accel Partners. Jim Breyer is one of Facebook's earliest investors. He serves on the boards of Dell, Wal-Mart, and smaller ventures such as Etsy, Brightcove, ModelN, and Legendary Pictures. Jim also negotiated the sale of Marvel Entertainment to Disney for $4.3 billion and BBN Technologies to Raytheon for $350 million; and most recently closed two new venture capital funds in China.

Michael Moritz from Sequoia Capital. Michael Moritz was one of the early investors in Google, Yahoo, and PayPal. He invested in video camera maker Pure Digital (Flip Video cameras) which was later sold to Cisco for $590 million. He also invested and served on the board of Zappos. Michael has also invested in and sat on the boards of Earth Networks, Gamefly, Green Dot, Klarna, Kayak.com, LinkedIn, Sugar Inc and The Melt.

Brad Feld from Foundry Group and TechStars. You should know Brad's name as he's a frequent contributor to the Growing Your Empire newsletter. Brad's been an early stage investor and entrepreneur for over 20 years. Brad has invested in and/or sat on the boards of tons of companies including Abuzz, Anyday.com, Critical Path, Cyanea, Dante Group, DataPower, FeedBurner, Feld Group, Gist, Harmonix, NetGenesis, ServiceMagic, ServiceMetrics and Zynga. ALL of these companies have either gone public or been acquired.

Marc Andreessen from Andreessen Horowitz. Marc Andreessen co-founded Netscape, Opsware and Ning. He serves on the boards of Facebook, eBay, Skype and Hewlett-Packard.  He made seed investments in Twitter and LinkedIn, and later stage investments in Groupon, Skype and Zynga.

John Doerr from Kleiner Perkins Caufield & Byers. John Doerr has made some of the best investments ever, investing early in Amazon, Netscape, Sun Microsystems and Google, where he currently sits on the board. He's also invested in online gaming firms such as Zynga and Ngmoco and clean tech firms such as Bloom Energy and OPower.

These 5 venture capitalists are clearly at the top of their game. But there are hundreds of others that could also provide tons of value to you. Look at the BILLIONS of dollars of value that these VCs created, by investing early in companies and helping them achieve massive success. And consider the vast number of connections these folks have, from investing in now ultra-successful entrepreneurs and sitting on boards along with other highly connected superstars.

Importantly, when seeking venture capital for your venture, find the venture capitalists that have the most relevant experience and contacts in your niche, that can thus add the most value to you.

 

Suggested Resource: In Venture Capital Pitch Formula, you'll learn exactly how to find and contact venture capitalists, exactly what information to include in your presentation, and how to secure your financing. This video explains more.


The Formula for Entrepreneurial Success


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The other day I had the opportunity to interview two entrepreneurs I really respect.

The qualities of an entrepreneur I respect?

1. They've achieved significant entrepreneurial success

2. They've done it more than once, or over a prolonged period, so they clearly weren't "lucky" but rather know how to play the game

3. They're "paying it back" or using their entrepreneurial success to help others

The two entrepreneurs I interviewed clearly embody these qualities.

The first is billionaire entrepreneur Clay Mathile. Clay purchased Iams, the pet food company, in 1970. In the years that followed, Clay grew Iams from a mere $100,000 in revenues to $900 million and sold it to Procter & Gamble for $2.3 billion.

The second is serial entrepreneur Joni Fedders. With her husband, Joni owns and operates a successful decorative packaging company. And prior to that, Joni co-founded a technology services company that she grew to 100 employees and nearly $13 million in sales. Joni successfully sold that company.

Clay and Joni are "paying it back" now at Aileron, an organization that helps business owners achieve more success. Clay founded Aileron and Joni serves as President.

Now usually when I conduct an interview, I do it via telephone and have an audio file to show for it. But in this case, I'm glad Clay suggested we conduct the interview via video.

There were two reasons for this. First, video is much more engaging to watch and absorb the information (but if you want to listen to the audio on the go, feel free to download the MP3 version here).

The second reason is little different... Clay is an investor in Oovoo which is the video technology we used. For those of you seeking angel funding, that's what you want. An angel investor that can not only give you cash and know-how, but who is willing to promote your company. I must say that installing and using Oovoo was a cinch, and, as you'll see below, the video quality was great.

Ok...I'll stop blabbing. The interview I did with Clay and Joni is below. They share some incredible information. If you want to grow your business, listen to what they say, take notes, and then implement. I'd suggest you watch it twice; I'm sure you'll catch a few things the second time that'll make a big impact in your business.


Online Marketing Tips for Entrepreneurs: 5 Tips to Double Your Leads


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Two things I really like about online marketing are that 1) you can do quick and easy things that can make a real impact, and 2) there's a lot of leverage; meaning that once you find something that works, it's pretty easy to scale.

Contrast that for a minute with traditional advertising like a television commercial. Any changes to your strategy here, such as modifying your commercial or testing it on a new television station, are costly from a time and money perspective, and take a long time to see whether it worked or not.

Below are 5 quick online marketing tactics and strategies that you can implement in your business fairly quickly. And each has the ability to double your leads, revenues and profits.

1. Find out where your competitors are getting their leads and replicate them

This one is pretty straightforward. Simply find out where your competitors are getting their leads, and then do the same.

Let's start with finding and replicating the keywords on which your competitors are advertising on Google and other search engines.

Simply use a tool like Ispionage (http://www.ispionage.com/) or KeywordSpy (http://www.keywordspy.com/) and enter in the domain name of your competitor. The results will show the top keywords on which your competitors are advertising.

Importantly, you should track these keywords. For example, see what keywords your competitors are advertising on today, and take a screenshot of how their ads appear. Then, look again at each of the keywords in 30 or 60 days. If your competitors are still advertising on those keywords, they are probably profitable keywords. Likewise, see if they've modified their ad copy.

Another way to replicate where your competitors are getting their leads is to find the top websites that link to them. While there are some expensive tools that identify the "top referring websites" to your competitors, one no-cost tool is Open Site Explorer (http://www.opensiteexplorer.org). Simply enter the domain name of your competitor, and you'll see the top sites which link to them and thus give them traffic. Then, contact those sites to see if they'll link to you as well.

2. Understand what customers are doing on your site

It's one thing to drive a lot of traffic to your website. It's an entirely different thing to convert on that traffic.

Importantly, you need to know what customers do once they're on your website. And in many cases, it's not what you'd expect them to do. For example, one entrepreneur I know told me that tons of visitors were clicking on an image on his website, even though nothing happened when you clicked on it. So, he made a slight change; he made it so that when visitors clicked on the image, they were taken to a sales page. The result: his profits soared.

One great tool to see what visitors are doing on your website is ClickTale (http://www.clicktale.com/). ClickTale offers heat maps, usability and web analytics so you know exactly what visitors are doing. And then, you can improve your site based on your findings.

3. Improve your marketing funnel

To improve your results, you need to understand your funnel. For example, your online marketing funnel may look as follows: visitors click on an ad to get to your "landing page" (the first page of your website they visit); then they read the page and ideally click whether they want product A or B; then they go to a page that has more information on either product A or B; then they click a button to get to the order form; then they see the order form and hopefully buy; then they see an upsell offer to purchase an additional item.

As you can see, your online marketing funnel generally has many pieces to it. In order to improve your performance, you must:

1. Map out (on a piece of paper) your marketing funnel
2. Document all of your metrics, that is, currently what percent of people pass through each part of your funnel (e.g., out of 100% of people who get to your landing page, what % click on "product A"; and what percentage of those folks click the "buy button," etc.)

Then, you should start improving each piece of your funnel. With split testing technology, you can test new pages and see which ones improve your funnel's conversion rates.

Two no-cost tools you can use to aid in these efforts are: Google Analytics (http://www.google.com/analytics/) which will give you your conversion metrics, and Google Website Optimizer (https://www.google.com/analytics/siteopt/) which allows you to quickly and easily conduct split tests.

Note: if you want to optimize your website based on phone calls to your company, use a tool like ifbyphone (http://public.ifbyphone.com/).  [ifbyphone is a Growthink client who has raised tens of millions of dollars, so I am biased. But I've used their tool myself and it's great.]

4. Determine your winning keywords, and then leverage them


A mistake a lot of entrepreneurs make is to try to rank organically on "root" keywords too early.

What I mean by this is that a desk manufacturer or retailer will often make an effort to rank (i.e., appear at the top of the search results) on the keyword "desk." Such a "root" keyword is often extremely hard to rank on, and typically much harder than "long tail" keywords such as "corner computer desk."

Not only are "root" keywords harder to rank on, but they may not be as profitable.

Rather, what you should do is conduct pay-per-click (PPC) advertising and optimize your marketing funnel as explained above. Then, you will determine the keywords that are most valuable to you.

Then, do search engine optimization (SEO) to try to rank on those keywords organically.

To reiterate: don't blindly do SEO; rather figure out the most valuable keywords first, particularly the long-tail ones, and then optimize on them.

5. Scale geographically

Once you have optimized your PPC advertising campaigns as described above, scale geographically as appropriate.

Google AdWords and Facebook ads both allow for extremely customized geographic expansion and targeting. You can target new customers by zip code, county, state and even country. With regards to countries, consider, as appropriate, expanding to other English  speaking countries and territories like England, Ireland, Australia, Singapore, New Zealand, etc. (or expand based on your native language).

Each of these five tactics will enable you to grow your business fairly quickly and easily. So start employing them today.

 

Suggested Resource: Want to learn my entire online marketing system to methodically maximize traffic, leads, sales and profits? Then check out my Ultimate Internet Marketing System to learn how you can build the ultimate online lead generation machine. Click here to learn more.


10 Incredible Mobile Marketing Statistics Every Entrepreneur Must Know


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I have to admit, I'm not a pioneer by any stretch when it comes to most new technologies.

I was the last of my friends to get a cell phone. I held off on joining Twitter and Facebook until my employees told me I had to do it. And for years I refused to keep an online calendar, and rather opted to continue using my physical appointment book (several of which I kept and it's pretty interesting to look back a few years ago and see what I had scheduled on a daily basis).

And it wasn't until last week that I downloaded the QR code reader app on my iPhone (and now I'm like a little kid scanning every QR code I see).

But for some technologies and/or new services, I have been more of a pioneer. I was one of the first users of Google's AdWords program. And I was one of the early adapters of Voice Over IP.

I tell you this since there's a new type of marketing that's available to marketers everywhere. And while I've only dabbled in using it to date, I am going to be making much more use of it in the near future. And I urge you to do the same.

This new type of marketing is Mobile Marketing. And the statistics proving why you can't ignore it are staggering. Consider the following:

GROWTH

1. According to Nielsen, the iPhone's growth was 10 times faster than the growth of America Online.

MARKET SIZE

2. According to Mobile Marketing Association Asia, more people on planet Earth own a mobile phone (5.1 billion) than own a toothbrush (4.2 billion) {gross but true}.

3. According to the CTIA Wireless Association, 250+ million Americans carry mobile phones; representing over 80% of the nation's population.

ACCESSIBILITY

4. According to Morgan Stanley, 91% of all U.S. citizens have their cell phone or mobile device within reach 24/7.

5. According to Facebook, there are more than 350 million active users [44 percent] currently accessing Facebook through their mobile devices. And people that use Facebook on their mobile devices are twice as active on Facebook as non-mobile users.

SPEED & ACTION

6. According to the CTIA Wireless Association, while it takes 90 minutes for the average person to respond to an email, it takes just 90 seconds for someone on average to respond to a text message.

7. According to Mobile Marketer, 70% of all mobile searches result in action within 1 hour.

REVENUES & RESULTS

8. According to Borrell Associates, mobile coupons get 10 times the redemption rate of traditional coupons.

9. According to Yankee Group, global mobile payments (called m-payments) currently total approximately $240 billion and are expected to exceed $1 trillion by 2015.

10. According to IDC, mobile app downloads will reach 76.9 billion in 2014 and will generate $35 billion in sales.

So what does this mean to you?

Well to me, it means that mobile marketing should be a key part to the marketing plan of virtually any company. Mobile marketing allows you to reach customers quickly. Customers will get more and more used to paying you and other companies via their mobile device. And mobile applications will continue to explode, and are not only a way for you to stay in front of customers, but they could be a huge revenue source for your company.

So, don't ignore this key marketing trend. Rather, seize the opportunity to become the mobile marketing leader in your niche.


Hiring Employees for Your Small Business: How to Find Winners


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"I've got a theory that if you give 100 percent all of the time, somehow things will work out in the end." ~ Larry Bird

I just love this quote from Larry Bird (who was a professional basketball player, and later coach, for those of you who don't know him). Yes, things always tend to work out, and you always tend to achieve success when you give it your all.

The best is when people look at successful athletes and entrepreneurs and say "look how lucky they are." Well if you call working all hours of the day and maintaining a laser-like focus on your goals "lucky," then I guess they're right. But you and I know better.

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. And he nearly always hit the clutch shots.

(If you have 52 seconds and can tolerate terrible video quality, you need to watch this incredible steal by Larry Bird on YouTube. I clearly remember watching this live with my dad in 1987: http://www.youtube.com/watch?v=M0vwJlvB-Po)

But as great as Larry Bird was, he would not have won so many NBA Championships (he won three), if he didn't have great teammates (same with Michael Jordan).

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 "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. So, follow these steps so you can build a great team and a great company.

Note: I've also used Craigslist to find people. I have found good people on Craigslist, but I've also found some really bad ones. But it's possibly worth trying as long as you do the two tests before hiring them.


Suggested Resource:  To become the ultimate leader, you need to do a lot of things, like hire the right people, create the right culture, establish accountability structures, etc.

If you haven't led a highly successful company before, there are a lot of mistakes you will make. However, I've put together a program that allows you to skip the mistakes and get it right the first time.

In my program, I'll teach you everything you need to do to find, recruit and train the right people, and build an amazing organization that allows you to thrive. Click here to access it now.


Successful Entrepreneurs Think This Way


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"Never interrupt someone doing what you said couldn't be done."

This quote from Amelia Earhart is one of my favorites.

And I think it is especially applicable to entrepreneurs. Since most entrepreneurial achievements are ones that seemingly couldn't be done.

Take Google. Would you have thought that this startup, which initially faced heavy competition from other search engines like Yahoo!, Alta Vista, Lycos, and others would eventually dominate the industry?

Or take Apple. Would you have bet in 2004 that Apple would develop sensational products and become the world's largest company based on market capitalization? And that from 2004 to 2011, the company's revenues would grow EIGHT times?

Both of these feats, and virtually every other feat achieved by entrepreneurs and entrepreneurial companies have seemingly been impossible. But, they were achieved.

Which leads to the question of "why?" Why were these entrepreneurs able to achieve these amazing feats while most other fail?

From my work helping entrepreneurs start and grow their businesses for over a decade, and from reading countless books on success, I have identified 5 key reasons why entrepreneurs achieve success.

And I expect that Amelia Earhart thought and did these things as well on her way to becoming a legend.

1. Surround yourself with winners

Success coach Jim Rohn said, "You are the average of the 5 people you hang around with most." It's true. If you hang out with losers, unfortunately you'll be a loser. But if you hang out with winners, you'll become a winner. Because winners have a different way of thinking. And winners (particularly other successful entrepreneurs with whom you should be spending time) have often already encountered and overcome the challenges you face in your business.

How do you surround yourself with winners? Meet them at networking events. Seek them out (e.g., successful local business owners and executives). Etc.

Amelia Earhart also surrounded herself with winners. She was mentored and taught by famous air racer Frank Hawks and pioneering aviation teacher Anita Snook. She also spent significant amounts of time with ultra successful entrepreneur and book publisher George P. Putnam.

2. Identify your limiting beliefs and then overcome them

Limiting beliefs are beliefs that we hold either consciously or subconsciously that serve as obstacles to achieving and attracting what we want.

For example, each year many schoolchildren are told by teachers that they "aren't smart" or "won't amount to much." As a result, these children often carry, throughout their lives, this extremely negative and limiting belief. They incorrectly believe, at either conscious and/or subconscious levels, that they can't achieve success, and as a result they don't.

This holds very true in business, and, as such, it is imperative that you both identify and overcome your limiting beliefs.

For example, do you hold any of the following limiting beliefs?

  • I don't have enough time to become a successful entrepreneur

  • I can't start or grow my business since I don't have enough money

  • Failure is shameful, and if my venture fails I will be shamed

  • I can't be a successful entrepreneur because I'm lacking certain educational degrees

  • I can't change or improve; I do things my way and that's who I am


These false beliefs and "excuses" prevent many entrepreneurs from achieving greatness. So identify these beliefs and force yourself to expose of them.

3. Accept the idea of failure

While you shouldn't dwell on the possibility of failure, you must accept it. If you don't, you may be striving in your business to prevent failure, rather than striving to achieve success. The latter will always help you achieve better results.

It turns out that actual failure is never as bad as we think it will be. Specifically, research shows that when people fear the worst and it happens, it's not as bad as they thought it would be, and they recover quickly.

MANY entrepreneurs have failed before achieving success. Milton Hershey, P.T. Barnum, Henry Ford, Walt Disney, Donald Trump -- all of these super successful entrepreneurs failed big at one point in their careers and had to claim bankruptcy.

That's why I love this quote from Phil Knight, the co-founder and chairman of Nike, Inc. - "people only remember your last success." So, even if you've failed before, or fail again, as long as you end up on top, that's all people will remember.

4. Dream positive

What you think about in your mind often comes true. So you need to stay positive. For example, rather than thinking about what to do to prevent customers from leaving you, think about ways to better satisfy your customers and get them to tell all of their colleagues about you.

At the end of the day both of these thoughts are similar, but framing it in a positive light is proven to increase your chances of success.

5. Believe in yourself

The biggest barrier to your success is often believing that it is possible.

Consider this story as told by marketing consultant Dan Kennedy:

    "One man I know, who made over $100 million in his business in its first three years from scratch, had gone broke in business several times before. After the three years of remarkable success, he said, "Making $100 million is about the easiest thing I've ever done. Believing it could happen to me was the hard part that took 20 years."



You must believe in yourself if you want to succeed. You CAN do it. Simply stating that you can do it in front of a mirror every morning for 30 days will improve your belief in yourself. Maybe that sounds "hokey" to you, but it works, and if you really want to become a super-successful entrepreneur, it's worth doing.

 


Angel Investors, Venture Capital, Which Should You Chose?


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As some of you may know, I started my career with The NPD Group, which is one of the world's largest market research firms.

One of the things I learned there was that statistics can be easily manipulated. That's not to say market researchers purposefully falsify their research. Rather, what I'm talking about is how statistics can easily be manipulated during interpretation.

For example, I can say that 93% of pet owners prefer brand X. But, if I didn't mention that my sample only included pet owners in the highest income zip codes, my results clearly wouldn't be telling.

But sometimes market research is as clear as daylight. And such was the case when I read the latest statistics from the National Venture Capital Association (NVCA).

The seemingly good news from the NVCA was that the amount of venture capital funding grew 22% from 2010 to 2011.

However, when I dug deeper, I found some deeply disturbing news. Specifically I found that the lion's share of this funding went to later stage companies (companies who have already raise previous rounds of venture capital, have revenues, and are looking to grow further before being acquired or going public).

In fact, the NVCA's numbers showed that in 2011, venture capital investments in seed companies or startups declined 48% versus 2010. Down forty-eight percent. That's huge. And that's terrible. Since it means that venture capitalists are now less willing to bet on higher risk, earlier stage companies.

What it also means is that if you want to raise equity capital, you need to rely more heavily on individual or "angel" investors. While angel investors have always been a huge source of early stage equity funding, they are now more important than ever. Since venture capitalists want to see that you have raised this funding and progressed your business before they'll fund your future growth.

So, how should you decide if angel funding is right for you? Answer these questions:

1. Can you make significant progress with your business for less than $1 million?

While I've seen companies raise more than $1 million from angel investors, the average angel investment in a company is only $338,400 according to the Center for Venture Research.

So, think about your business and figure out if you could accomplish significant milestones for this amount of money. Specifically, you need to accomplish enough milestones to make your company cash flow positive, or enough that shows investors you can execute and that it's less risky for them to write you a larger check.

2. Are you willing to give up equity in your business?

There are still many entrepreneurs and business owners who are concerned about giving up too much equity and/or losing control of their company.

Let me start by saying that capital is the MOST important thing to your business. In fact, running out of capital is the reason why most businesses fail. And with capital, your business gains massive competitive advantages such as the ability to hire better personnel, buy better equipment and technology, etc.

Now, in terms of giving up equity to investors, consider this important yet simple mathematical fact: 100% of nothing is nothing. And without the capital, your company may be worth nothing. As such, it is my experience that a small piece of a big company is better than a large piece of a small company. For example, a 10% piece of a successful company (perhaps a $10 million company) is twice as great as 100% piece of a small company, perhaps a $500,000 business.

Importantly, equity investors want YOU to maintain the lion's share of your company's equity, since they know it will give you the motivation you need to work really hard and make the company a huge success. In general, you should expect angel investors to want 10% to 35% of the equity of your company.

3. Are you willing to kiss a lot of frogs?

The process of raising angel funding (which you can learn to do here) includes a lot of frog-kissing. That is, you need to speak with a lot of individuals in order to find the few that will write you checks.

It can clearly be done, as tens of thousands of entrepreneurs raise angel funding each year, but you will need to invest time and meet a lot of people in order to raise the funding.

Few things are more exciting than building a company from nothing to a thriving enterprise. Doing so nearly always requires a significant cash investment. Unfortunately venture capital firms are no longer making nearly the number of such investments as they once did. But angel investors are. And if you're an entrepreneur seeking funding, you should start speaking with these angels now.


Entrepreneurs & Leadership: The Key is Not to Improve Weaknesses


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When I was a kid I played ping pong quite a bit. We had a ping pong table in my basement and I would play a lot with my dad, my brother and my friends.

I was always a good athlete, and have pretty good hand-eye coordination. So that, combined with a lot of practice, made me pretty good. In fact, I actually won a bunch of local ping pong tournaments at my school and the town recreation center.

And then one day when I was watching TV, I saw the professionals playing ping pong. Most notably, the Chinese national team was playing.

And quickly, any thoughts I ever had of being a great ping pong player faded. I mean, these guys were just awesome. They played at a completely different level; hitting the ball faster than I ever thought imaginable.

So, what made these Chinese ping pong players so great?

They clearly became great from hours and hours of practice. And they clearly became great because of focus and emulation. What I mean by this latter point is that many US kids become great athletes by constantly watching and emulating their favorite basketball, baseball and football players. They buy their jerseys, have their posters on their walls, etc. Which constantly inspires them and serves as a reminder of what they'd like to achieve. That's why the US has the best basketball, football and baseball players in the world. On the other hand, in China, many of the kids emulate the great Chinese ping pong players and thus excel in that sport.

But the Chinese ping pong players achieved greatness and dominance in the sport for another reason. This reason is summed up beautifully in Donald O. Clifton and Paula Nelson's book "Soar with Your Strengths" in which they wrote the following:

    The Chinese have long held the Olympic gold medal in Ping-Pong. At the 1984 Olympics, when they again captured the gold, the coach of the Chinese team was asked by a reporter, "Tell me about your team's daily training regimen."

    "We practice eight hours a day perfecting our strengths."

    "Could you be a little more specific?"

    "Here is our philosophy: If you develop your strengths to the maximum, the strength becomes so great it overwhelms the weakness. Our winning player, you see, plays only his forehand. Even though he cannot play backhand and his competition knows he cannot play backhand, his forehand is so invincible that it cannot be beaten."



Importantly, what the Chinese coach said is a proven leadership theory known as "Strengths-Based Leadership Theory."

Strengths-Based Leadership is a way of improving a company's success by developing the organization's strengths. The key to this proven philosophy is that people have a significantly higher ability to further improve on their strengths versus fixing their weaknesses.

Makes sense doesn't it. Yet most entrepreneurs and leaders do the opposite; they focus on improving their and their employees' weaknesses. This leads to frustration and lack of high performance. Rather, you should be constantly improving your strengths, so, as the Chinese ping pong coach stated, your strengths are "so invincible that you cannot be beaten."

So, how do you implement this in your organization:

1. List your organization's strengths

A strength is defined as the ability to exhibit near-perfect performance consistently in a given activity.

Create a list of the strengths that you and your employees have.

2. Rank your organization's most important strengths

With your list of strengths, figure out which ones are core to the success of your organization. For example, strengths that allow you to produce a better product or service for your customers would be key as it can give you sustainable competitive advantage.

Rank your key strengths.

3. Invest in further developing your employees' strengths

Invest time, energy, and money (via training, education, etc.) in further developing your employees' top-ranked strengths so they get even better and you can dominate competition.

Remember, just having a strength isn't good enough. Consider professional athletes. They all have great strengths. But the world's best professional athletes are the ones that constantly practice and improve on their strengths.

4. Outsource your weaknesses

To operate, every company needs to perform many tasks that may fall outside of their strengths. For example, a company who is incredible at making the best wines needs to do many other things. Such as answering incoming phone calls, shipping the wines (to distributors, retailers and customers), creating and maintaining a website, etc.

Importantly, if their wine is that superior, than these other functions are far less important and do not require the company to have competitive advantage.

So, such a firm should outsource these tasks to another firm who focuses on these functionalities (e.g., a web design firm, a trucking company, etc.). They could also consider hiring people who have strengths in these areas. However, in this case, they may also need to hire an operations manager to manage these hires so that they company head can continue to focus on their strength of creating the best wine.

In summary, great leaders do not create companies that are great at everything. Rather, they figure out their key organizational strengths and further develop the most important ones. This gives them lasting competitive advantage. I urge you to do the same.

 

 

 

If you're a sports fan, you probably have a favorite coach. And it's probably not the coach of the Chinese national ping-pong team.

For me, I greatly admire both John Wooden and Vince Lombardi, although both coached before my time. More recently, my favorite coaches include Joe Torre, Mike Krzyzewski, Phil Jackson, Bill Parcells and Jimmy Johnson.

Each of these coaches do/did a great job of finding the right players and developing their strengths. As a result, each of them achieved massive success.

You can too if you follow my proven formula to becoming a better leader. Click here to learn the formula.


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