Growthink Blog

Finding a Business Partner: Take the Quiz


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My wife came across an interesting quiz on the NY Times' website.

Called the "The Sustainable-Marriage Quiz," it poses 10 simple questions which assess the strength of your relationship with someone.

Importantly, while I think this is a valuable quiz for your personal life, there is definitely a key place for this in your business.

Mainly, you should take this quiz BEFORE taking on a business partner, investor or key employee.

The quiz was developed by Gary W. Lewandowski Jr., associate psychology professor at Monmouth University in New Jersey. You can see the quiz on the NY Times website here.

A copy of it is below:

Partner Quiz

As you can see from the questions, virtually all of the marriage partner questions apply to business partners.

Importantly, the ideal partner (business or personal), according to Lewandowski's research:

* Gives you greater awareness
* Increases your ability to accomplish new things
* Allows you to expand your own capabilities
* Has strengths that compensate for some of your own weaknesses
* Gives you better perspective on things
* Allows you to learn new things
* Increases your knowledge
* Makes you a better person

Clearly all these things can lead to a more successful business. So use this quiz in judging new business relationships you are considering...or as an impetus to get out of a bad relationship you might already be in.

As many of you know, Jay Turo and I have been partners in Growthink since we launched in 1999. I just took the quiz with Jay in mind and scored a 62 which means that it's a great partnership.

Take the quiz and let me know your thoughts on it in the Comments section below.


The Entrepreneur's Role as CEO


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A lot of entrepreneurs are excited to start their business and get a business card that lists their title as "CEO."

But what does being a CEO really mean.

According to Jack Welch:

"My main role as CEO was developing talent. The team that fields the best talent wins. That's in baseball, football, life and business. Business is a game. If you don't suit up the best team, you don't have a prayer. In the end, it's what it's all about."

Most entrepreneurs don't think this way. They think the best idea wins. However, this isn't the case. In fact, as this blog post proves, many great companies started out doing one thing and switched course when it wasn't working. And they were able to switch course because they had the right team members who spotted the issue and were able to change strategies and effectively execute on the new opportunity.

So as you are starting and/or growing your venture, spend the time to find and train the best talent. Since you will not have the luxury (you won't have the time, nor can you be an expert at everything) of doing all the functions your company needs yourself.

If you don't have extensive experience hiring and training winners, watch my Leadership video by clicking here.


Which is Worse for Entrepreneurs: Indigestion or Starvation?


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At the recent World Business Forum Event in New York City, business consultant and author Jim Collins said that "great enterprises are more likely to die of indigestion than starvation."

He further cited Packard's Law (which was named after Hewlett-Packard co-founder David Packard).  Packard's Law states the following: "No company can consistently grow revenues faster than its ability to get enough of the right people to implement that growth and still become a great company. [And] If a company consistently grows revenue faster than its ability to get enough of the right people to implement that growth, it will not simply stagnate; it will fall."

So what does this really mean? It's better to execute on a small opportunity and do it right, then go after multiple and/or larger opportunities without the appropriate resources.

I tell this to entrepreneurs all the time. If you focus just on one thing, you can do an A+ job. But if you focus on 5 things, there's no way you can do above a B+ job on all of those things. And to be a successful entrepreneur, you need to put in an A+ effort.

Now, I'm not saying not to dream big. Because I want you to. But, you need to break your big dream into small pieces that you can execute on with the resources you currently have. As you accomplish each piece, you will gain more resources, making it easier to progress. (Note that I call these smaller pieces your "risk mitigating milestones" - I explain this more in this blog post - http://www.growthink.com/content/business-plan-milestones-how-they-are-essential-your-success).

Success rarely comes all at once. Rather it comes from continuously achieving small goals that are aligned with your big goal. So, make sure you have the right resources (particularly human resources), and create action plans to accomplish smaller goals that continually bring you closer to achieving your big goal. In other words, "think big, but act small!"


Entrepreneurship Lessons from Vince Lombardi


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Last night I watched a great documentary about legendary football coach Vince Lombardi.

The man's track record speaks for itself. The year before he became head coach of the Green Bay Packers, the team had just one win. In the subsequent 8 seasons, Lombardi coached Green Bay to 5 NFL championships.

In the documentary, there was footage of him saying he regretted coming up with phrase "winning isn't everything, it's the only thing."  He said that as long as every player on his team gave 100% of themselves during every game, that he would accept a loss. I like that leadership lesson -- you can't criticize team members who didn't win if they truly gave it their all.

Some other great lessons from Lombardi (all of which can be applied to business):

1. Model the best: Before going to Green Bay, Lombardi accepted an assistant's job at the U.S. Military Academy at West Point. In that position, he worked under legendary head coach Colonel Red Blaik (who had just coached Army to two national championships before Lombardi arrived).  At West Point, Lombardi learned from the best.

2. Love What You Do: Lombardi had incredible passion for coaching football. You could see that he truly loved his job. And that's why he was so successful. As an entrepreneur, you have to be passionate about your business and what you're trying to achieve if you're going to be successful.

3. Focus on Goals: Lombardi had incredible focus on specific goals he set. When he was an assistant coach, he focused on his dream of becoming a head coach. When he became a head coach, he focused exhaustively on his dream of winning an NFL championship. Once he won his first NFL championship, he focused exclusively on winning a second NFL championship. And once he won his second NFL championship, he focused on becoming the first coach to ever win three consecutive NFL championships (which he did).

4. Nurture employees. Lombardi was incredibly tough on his team. He put them through extremely rigorous drills and calisthenics. However, he truly cared about his team. And he felt it was his responsibility to not only make them winners on the field, but winners off the field. He believed it was his responsibility to build the character of his team members so they became "fine men." Because he cared so deeply for his players, they cared deeply for him. And they gave it their all on the field not only to win, but to please the coach who they truly admired.

5. The final lesson from Lombardi may be a lesson he didn't want to teach. This lesson is that with success there are trade-offs.  Lombardi was neither a good husband nor a good father to his two children. In fact, his family couldn't even speak to him on Mondays, Tuesdays or Wednesdays during the football season (because Lombardi was preparing for the next game). And Lombardi worked extremely long hours too.

Importantly, not all successful people work ridiculous hours nor neglect their families. But you need to figure out the trade-offs you're willing to make. I believe a lot of these trade-offs have to do with the type of venture you are starting/running. For example, some ventures may require you to go to events, trade shows, etc., and thus a lot of traveling. This may be too big a trade-off for some folks. If so, that's fine...just choose a venture that requires less travel.


Vince Lombardi was the son of a butcher. And he was passed up on an important coaching job once because "his last name ended with a vowel" (meaning that they were prejudiced against the fact that he was Italian). So, nothing was handed to Lombardi. He went out there and took it! Which is what we all need to do too!

Final note: I hope you learn these lessons from Vince Lombardi. I also hope his story inspires you. Finally, I want you to realize that if he can do it, so can you. Reading and watching biographies of successful people allows you to see that they really didn't have anything that you don't. They are just ordinary people like you and I. But they had powerful dreams and weren't afraid to go after them.

Final, final note: Want to be like Vince? Want to run a company where not only do you have the best employees, but they give it their 100% all every day? If so, watch my Leadership video by clicking here to learn how to build this type of organization (FYI, the US Army bought several copies of this program to train their top people -- nice validation that this program is that good!).


Being an Entrepreneur During the Holidays


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I just read an interesting story about a very successful entrepreneur.

When he was 7 years old, he sold his Christmas presents to his brothers to make money.

By the time he was 8, he got smarter....he rented his Christmas presents to his brothers for a month. He made the same amount of money and got to keep his presents.

Pretty clever.


Is Anyone Listening to You?


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Very interesting article in Monday's NY Times entitled "E-Mail Gets an Instant Makeover."

Since it peaked in November 2009, the use of email at major sites like Yahoo and Hotmail has declined 6% according to comScore.

And among 12- to 17-year-olds, email usage dropped 18%.

Are folks communicating less?

No. Rather, and particularly in the younger age sets, people are relying more on online chatting and text messages.

According to the CTIA, the wireless industry association, text messaging in the US is exploding. In June 2005, Americans sent 7.2 Billion text messages. By June 2010, Americans were sending 173.2 Billion text messages per month.

So, what does this mean for you?

Well, particularly if you are serving a young audience, you shouldn't be relying solely on email. Because the email medium will not reach many of them.

But this lesson also applies to businesses serving customers of all ages. Not everyone reads their emails. So you should be thinking about other ways to communicate with your customers and prospective customers. Can you use Twitter? Can you create a following on your blog? Can you use text messaging? Can you spend more time getting publicity? Can you use internet advertising? Direct mail? Etc.

The key is that there are a host of ways to communicate with your customers and prospective customers. And the other key is that because we are living in an age of communication clutter, getting your message heard is of paramount importance. Consider Apple Computers and its ipod/ipad products. Apple has done an amazing job getting through the clutter and getting people to hear about its products. Clearly the company is helped by the fact that it is making "cool" products with lots of PR-appeal and word-of-mouth potential (and its huge budgets for TV ads doesn't hurt either). But smaller, resource constrained companies can do this too.

So, really think about who your customers are. Think about what they really care about (and note that they're not walking around thinking about buying your product/service (although they may be walking around thinking about solving a need that your product/service solves)).

And then think through the many ways in which you can reach these customers. In doing this, one good exercise I use is putting myself in my customers' shoes. What television shows are they watching? What newspapers and newsletters are they reading? What websites are they visiting? Etc.

Write these answers down, and then use these mediums to convey your information to them.


Do What Young VCs Are Doing


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This recent article in Fortune magazine introduces an interesting new trend: young venture capitalists leaving their VC jobs and becoming entrepreneurs.

The article cites Bartek Ringwelski, a former associate at Canaan Partners who recently launched SkillSlate, a site where you can rate and find individual service providers such as handymen, massage therapists and tutors.

It also mentions Dan Gellert, a former analyst at Time Warner Investments who launched GateGuru, which helps you "locate the best food, shopping and service options within any airport at the touch of a button."

So why should you care?

Well, to begin, I think it's interesting that neither of these business ideas are overly compelling; and they're certainly not any better than the business ideas I hear from entrepreneurs on a daily business (yet SkillSlate has raised over $1.1 million already.)

But, the business idea is only one part of whether these folks will be successful. And that's where the key lesson lies.

These VCs-turned-entrepreneurs have a lot of connections. From working at VC firms, they are friendly with other VCs and successful entrepreneurs they have met and/or funded.

This network gives them much more access to capital than the average entrepreneur. This network also gives them access to advice and connections (e.g., recommendations and introductions to vendors, partners, distributors, employees, etc.).

In addition, by sitting on the boards of portfolio companies, VCs get first hand knowledge of how to successfully grow companies.

So, what's my advice for those of you who don't have the luxury of becoming a VC before launching your entrepreneurial career?

Well, try to get the same experience these VCs did. Hang around with startups and investors. Go to startup events and meet other successful entrepreneurs. Learn from them. Start a mastermind group with them. Volunteer at a startup to get more exposure. Get involved with and/or serve on the board of a non-profit to meet other successful individuals.

To reiterate, the more you can surround yourself with successful entrepreneurs, the greater your chance of success. So do it!

Questions/comments? -- post them below.


Survey Shows Venture Capitalists Optimistic About 2011


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Pepperdine University's Center for Applied Research came out with an interesting report last week about the future of venture capital.

The report was the result of surveys of 213 venture capitalists and found the following:

* Venture capitalists expect to offer their investors (i.e., limited partners) an average return of 15% over the next 12 months, compared with only 5% for the past 12 months. This is due to an expected increase in acquisitions of VCs' portfolio companies.

* Over 40% of VCs are currently raising more money or expect to raise more money to fund entrepreneurs within the next 1-2 years.

* 43% of venture capitalists expect general business confidence to improve in the next 12 months.

So what does this all mean for entrepreneurs? Venture capitalists are raising more money and will be funding more entrepreneurs.

So, if venture capital could help take your company to the next level, take action and go out there and get it.

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 presentations, and how to secure your financing. This video explains more.


Fiverr.com: Inspiration for Other Entrepreneurs


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5-dollarsSome colleagues of mine recently told me about the new website Fiverr.com.

I think you should know about this site because 1) you may be able to use it and 2) it offers some good lessons to copy.

So to begin, what is Fiverr?

Fiverr's tagline is "The place for people to share things they're willing to do for $5." So, as you might expect, sellers can offer services for $5. And buyers can buy these services (or post other services they need/want) for $5.

So how might entrepreneurs like you be able to use Fiverr?

Well, entrepreneurs have used Fiverr and paid only $5 for things such as the following:
* Getting their logo modified
* Driving traffic to their websites
* Having someone write their brochure
* Getting their products reviewed on Amazon.com
* Having articles written for them
* Getting catchy headlines written for their website
* Creating/producing videos
* Having someone write a press release

So get creative. I'm sure there are tons of ways you can use this cheap labor to progress your company. (Do remember that you generally get what you pay for; so don't expect to get a big project completed for $5; but you can get tons of smaller projects completed for this small amount).

The second key point I want to make is the entrepreneurial lessons we should all take away from Fiverr... which I view as being highly successful considering that it launched less than 12 months ago and is now in the top 600 most popular website in the United States.

These lessons include:

* Simplicity. This is a pretty simple concept and the site works very simply. I'm sure that the founders have thousands of ideas to make the site better (e.g., adding things that people will do for $25, etc.), but they started simply with the minimal viable product). Now, with success, they are adding more features (based on what customers are saying they want!). This is the formula for success.

* The entrepreneurs behind Fiverr took action. I mean, this idea has to be the type where a couple of friends were sitting at a bar and one of them said "wouldn't it be great if...."  These conversations happen all the time. But these specific entrepreneurs took their idea seriously and TOOK ACTION.

So figure out how your venture could use Fiverr.com and model their success!


Edison DID NOT Invent the Light Bulb


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Did you know that Thomas Edison DID NOT invent the light bulb.

Why do I tell you this?

Because every single day at least one entrepreneur contacts me with some fear about someone stealing their idea.

And their fear is unjustified.

Successful entrepreneurs don't focus on the fear of someone stealing their idea. Rather, they focus on executing on the opportunity by bringing their idea to market.

Which is what the 22 inventors of the incandescent light bulb before Thomas Edison FAILED TO DO.

That's right. Twenty-two inventors had the idea before Edison (not only did they have the idea, but 22 people actually invented incandescent electric lamps before Edison did).

And Edison didn't steal their idea. Rather, Edison improved on their idea by first understanding the market. He realized that a more commercially viable and longer lasting light bulb was needed if light bulbs were to go mainstream.

So, he and his team created this product and the rest is history.

The moral is that he who has the idea first generally doesn't win. In fact, if your idea is so good, usually others have thought of it before you or at the same time. The winner is the one who takes is to market first, tweaks it based on customer feedback, and scales the business.

Most people don't have what it takes to go from an idea to a commercially viable product to taking it to market. That's why spending tons of time and energy protecting your idea is often a waste of time. Since the people you're protecting your idea from can't execute anyway. And those that can (i.e., successful entrepreneurs) generally have a ton of their own ideas to focus on. So you should be spending your time on execution.

(Likewise most ideas change dramatically once you start getting customer feedback; and you NEVER get that feedback if you keep your ideas to yourself!)

Importantly, the world is littered with quality ideas which never materialize. From motivational speaker Les Brown:

The wealthiest place in the world is a cemetery. Now one would ask, "For what justifiable reason is the wealthiest place in the world a cemetery?"

Simply put, in a cemetery, you will find that there are books that were never written. There are songs that were never sung. There are ideas that were never acted upon-dreams that were long forgotten. If one were to die today, then what ideas and what aspirations would die with him or her?


So, please stop focusing so much on protecting your ideas, and start acting on them!


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