Growthink Blog

Biting Lemons to Get Investors to Fund Your Company


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The 4-minute video below gives an important lesson about concept versus reality and how to convince investors to fund your company.

Comments? Thoughts? Questions? Do you think I've lost my mind? Please post them below.


The Three Blind Mice & Your Business Plan


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3 blind miceWe've all hear the nursery song "Three Blind Mice."

It goes like this:

Three blind mice,
Three blind mice
See how they run,
See how they run!

They all ran after
The farmer's wife,
She cut off their tails
With a carving knife
Did you ever see
Such a sight in your life
As three blind mice?

But have you heard the "more educated" version called "A Trio of Sightless Rodents." It goes like this:

A trio of sightless rodents,
A trio of sightless rodents
Observe how they perambulate
Observe how they perambulate;

They all pursued the agriculturalist's spouse,
Who severed their caudal appendages with a carving utensil
Have you previously observed such a phenomenon in your existence
As a trio of sightless rodents?

Both versions say the same thing.

And I guess if you wanted to impress someone, you'd tell them the "more educated" version of the tale.

But, most likely, listeners would tune out the "more educated" version.

Why? Because it's much harder to follow and makes them think way too much.

Conversely, the simple "Three Blind Mice" version is easier to follow.

The point is this -- if you can't communicate simply, clearly and concisely, people won't understand what you're talking about. They are not going to invest the time and mental brainpower to figure out what you mean.

And if you are communicating to get someone to take action, be it to buy your product or invest in your company, if you lack clarity, you will virtually always lose the sale.

Most business plans lack this critical clarity. The entrepreneur makes the business far too complex. And as a result, investors don't understand what they are doing, and don't invest in the business.

Here's a test to see if you're communicating your business' value proposition properly. Give someone one minute to read the first paragraphs of your business plan. Then, a minute later, have them repeat back to you the business' value proposition (without looking at the document). If their version is good, you've done a good job concisely explaining your business. If not, then it's back to the drawing board.

Even better, have the first person state the value proposition to a second person, and then have the second person repeat it back to you. A clear, compelling message will survive this grapevine.

When I created Growthink's Ultimate Business Plan Template, I focused on making every section of the business plan simple, clear and concise. So that investors can quickly understand all the key points about your business. And so they will invest. Because certainly, investors will not invest in what they don't understand.

So, make sure all of your verbal and written communications, starting with your business plan, are simple, clear and concise so everyone "gets" it and takes the actions you desire.


Fun to Open, But Not to Eat


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Today, like I do every Monday, I bought the company lunch.

A lot of productivity experts advise against lunch meetings as participants focus too much on the food, and not enough on the discussion.

I buy that argument. But I also think that everyone appreciates it when the company springs for lunch, and we often have high-quality creative discussions.

Today we opted for Chinese food. Last time we had Chinese was about two years ago. I like to eat healthy, and I guess the others have to deal with that guideline too when it comes to Monday lunches.

And with Chinese food comes the obligatory fortune cookies.

My take on fortune cookies is this -- they are always fun and interesting to open; but I just don't think they taste very good. But, I always eat them hoping for a better experience than the last time. Today, once again, the cookie tasted decent-at-best and definitely wasn't worth eating. I guess I have trouble throwing away food though.

The one thing that is so interesting about fortune cookies is that people always read their fortune, and they always think about it for a moment.

Today, my fortune was "By listening, one will learn truths. By hearing, one will only learn half truths."

So, my personal lesson for today was to listen more. To really pay attention to those around me and the things that I experience everyday. So I can better help others and better help myself achieve my goals.

And now, by writing this down, I am confident that I will get better at this. And by improving, my life will improve and I will move closer to achieving my goals.

What is fascinating to me is that it takes a note inside a fortune cookie sometimes for people (including myself) to stop what they're doing, read something, and really think about what they have read, what it means to them, and how they can use that information to improve their lives.

So, if you don't mind, I'd like for you to stop for just one second. Take a deep breath. Imagine that you had a fortune cookie in front of you. Crack it open. And read the note inside. And I want you to imagine that the note said this "Tomorrow, you will achieve all of your goals."

Now flip the note over. And you'll see that it says, "But only if you define your goals today."

As today was the first day of August, during our lunch meeting we reviewed our July goals and our July results, and we set our goals for August. I urge you to do the same. Because without defined goals, you can't achieve the results you desire.


Why Entrepreneurs Need to Drink More Beer


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Last night I went to a party at a bar in New York City.

The party was organized by a successful businessman that I recently met. He was visiting New York, and put together the event so he could catch up with a lot of his old friends.

I didn't really know anyone at the event which was a little awkward at first. But everyone was real nice, and I soon got to speaking with several of the guests.

And what I learned from speaking to person after person was this -- the quality of the people in the room was incredible. Lots of extremely successful people in all fields such as business, medicine, law, etc.

So, why am I telling you this?

Because you need to be attending events like these.

Why? Because virtually all of the attendees could have been investors in your company. And many of the attendees had significant rolodexes and could introduce you to other potential investors, partners, employees, etc.

The fact is that successful people generally hang out with other successful people. So, you must find at least one successful person and hang out with them as much as possible. Not only will they introduce you to other successful people, but their success will rub off on you. I truly believe in the saying "you will become the average of the five people you hang around with most," so make sure those five people are successful.

I know what many of you are thinking right now as you read this. Sure Dave, it's easy for you to hang out with successful people, but how can I do that; I don't know any really successful people.

My answer is to get Advisors. Find successful people, perhaps local business owners, executives and industry "celebrities." And invite them for a 15-minute conversation over coffee where you get their advice about your company. Many folks are very receptive to these invitations because it strokes their egos.

And if you develop good rapport during the conversation, ask the person to become an Advisor to your company. And once you get them as an Advisor, you have your successful person. They can then spend time with you and introduce you to other successful people.

I'm currently finishing up a new guide teaching entrepreneurs the best ways to raise money. In the guide I spend a whole chapter on how to get Advisors since it's that important.

And finally, I want to comment on the title of this blog post. I say that entrepreneurs need to drink more beer in that they must get out there and hang out with successful people in social settings. If you want to drink wine (or soft drinks) in these settings, that's fine. I just happen to enjoy beer more (and for other beer enthusiasts, last night I drank Sixpoint Sweet Action which I highly recommend (pretty good reviews on Beer Advocate)).

Comments? Thoughts? Do you have similar stories about meeting successful people in social settings? Post your comments below -- I look forward to reading them!

 

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Crowdfunding Sees More Growth, More Creativity


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CrowdAs we might have expected, entrepreneurial creativity has already started to take Crowdfunding to the next level. More entrepreneurs are raising money from Crowdfunding. And they are using more creative techniques to get folks to learn about them and donate.

Let's start with the latter. I just came across this press release in MCV, a trade news and community site for professionals in the international video games market. The release, put out by Sorcery Games, explains how the company is using the Crowdfunding platform Kickstarter to fund the creation of its next video game.

As you can imagine, the press release has a link to the Kickstarter page to donate to Sorcery Games. This I'm sure will get them a bunch of donors that they wouldn't have gotten otherwise. So, definitely add press releases to your arsenal of marketing tactics to get more people to know about and donate to your business via Crowdfunding.

And I just learned that 3-time Academy Award nominated Director David Lynch is getting involved with Crowdfunding. Specifically, he is using Crowdfunding to fund his newest documentary project.

And the list of new Crowdfunding success stories continues to grow.

LugNuts, which roast small batches of organic nuts as an on-the-go healthy snack, raised an even $5,000 from 48 donors.

Through the Looking Glass, a shop specializing in tea, tea accessories, and gifts raised $4,050 from 75 donors.

And just a few days ago, Mystery Brewing Company of Durham, NC completed its Crowdfunding raise of $44,259 from 243 donors.

Yes, Crowdfunding is thriving. And it will continue to thrive for a LONG time. If you haven't yet learned how to raise money for your business from Crowdfunding, watch this Crowdfunding presentation now.


Are You Thinking The Right Way?


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Stop SignI have two simple questions to ask you.

1. What color and shape is a STOP sign?

2. What color and shape is a YIELD sign?

Pretty much everyone gets the first question right. Yes, a STOP sign is octagonal and red.

But most people get the second question wrong. They incorrectly think that a YIELD sign is triangular and yellow. Now the triangular part is correct.

But yield signs are red on the outside and white in the middle (with the word "YIELD" written in red).

In fact, while yield signs were originally yellow when they were introduced in the United States in 1954, they were changed to red over 30 years ago.

So, why do many of us still think yield signs are yellow?  There are a few reasons I think. To begin, some of us still remember back to the 1970s when they were yellow. And in some towns, the old yellow signs weren't replaced until the 1980s or 1990s. And many "clip arts" of yield signs still use the yellow color.

But the fact is, if you see a yield sign on the road today, it will be red on the outside and white in the middle.

The reason why we think it's yellow is because we often see things as they used to be.

And seeing things this way represents a problem.

The problem is this -- my guess is that right now, you are a regular entrepreneur. But, you wish to become an ultra successful entrepreneur.

But, if you see things as they used to be, you will see yourself as a regular entrepreneur.

And, to become successful, you need to see yourself as an ultra successful entrepreneur right NOW.

That's right, if you can't envision yourself being successful, you won't become successful. The power of your mind is that strong.

By reading this blog post, it tells me that you are feeding your mind with education about becoming a successful entrepreneur. I genuinely commend that. But I want to make sure you're taking it to the next level, and really committing your mind to believing that you can accomplish your dreams.

It's a lot like the little red engine that could.  If you continue to think you can do something, you will be able to do it.

So, in addition to feeding your mind with business education, spend time visualizing success in your mind. Think about what your life will look like when you have achieved the success you desire. Where will you be living? What car will you be driving? What will you wear to work? What will you be doing at work each day? And so on.

And as much as possible, don't just think about these things, but start achieving them. Dress NOW like you expect to dress when you have achieved success. Do the things at work each day that you see yourself doing as an ultra successful entrepreneur.

Earl Nightingale said, "The strangest secret is that we become what we think about most of the time."

Ralph Waldo Emerson once stated, "a man is what he thinks about all day long."

I think they were both right. So, make sure you think about what success looks like for you. And then keep thinking about it.


Entrepreneurs Can Avoid the Monday Morning Curse


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Happy Monday!

Or should I say "be careful folks, it's Monday."Monday Morning Stress

Why would I say that?

Because statistics show that most heart attacks occur on Monday mornings.

And, migraines in children are most likely to occur on Monday mornings too.

What is this Monday morning curse?

Well, it's most likely the fear and pain of having to do something you don't want to do. Especially after enjoying a weekend where you were free to do what you wanted, having to face a week on the job or a week at school can be miserable.

That is if you don't like your job, or you don't like school.

Recently I watched the movie "The Invention of Lying" and one part that struck me was a woman in a business suit standing outside of her office building. To everyone who passed she said "I don't want to go in there today. I just don't. You know?" (the premise of the movie was that everyone told the complete truth).

If that's you -- if you don't love what you do everyday -- than you MUST CHANGE what you do. Most people have tons of excuses why they don't change, but that's all they are - excuses. Sure, change requires lots of courage, and it doesn't always work out, but change is the first step to progress. And it's the hallmark of successful entrepreneurs.

Now, if you come to work everyday excited like I do, I don't want you to pat yourself on the back quite so soon.

Are your co-workers equally excited? Are your employees and/or subordinates excited?

Part of your job as an entrepreneur is to make sure that everyone around you is excited and inspired everyday. That they don't dread coming to work. But are excited to work with you and the team to accomplish meaningful goals.

Very few great companies have just one person. Typically they start with the one entrepreneur who leaves their job because they are dissatisfied and want to achieve more. And then they recruit their team. And importantly, they infect the team with the same inspiration, and work with them to ensure that everyone comes to work everyday motivated and ready to achieve real results.

What are you doing to inspire your team?

I do lots of little things. Bagels on Monday morning. Brief team meetings each day to discuss goals. Company lunches once a week. Monthly goal setting meetings. Occasional moments of insanity (ranging from a funny joke to a funny video, etc.). Giving public acknowledgements for good work. Etc.

I hope your list of things is bigger than mine, because an inspired team will lead to more funding dollars (yes, investors love funding high performing teams), more customers, and more profits!


Want Media Exposure?


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Most business owners crave media exposure.

Why wouldn't they?

If they get written up in the newspaper or magazine, or get featured on TV, they're sure to get a flood of new customers.

But what many entrepreneurs don't realize is that 1) you can get media exposure BEFORE you actually launch your company and 2) media exposure can help with raising money too.

Reporters are constantly doing stories and interviewing experts. If you have expertise that you will be using to start your company, you could be interviewed.

And in your interview, you can talk about your venture.

And while the interview may not get you a flood of new customers (if you're not yet selling a product or service), you may get lots of interest from investors, partners, distributors and prospective future customers.

Now the old way of getting press and getting interviewed was a lot of work. Mainly sending out media kits and press releases to tons of media sources.

But today, there's a much easier way to get PR by simply joining Reporter Connection.

You can join for free by clicking this link.

Reporter Connection works like this: every day, you'll receive a brief email with media opportunities ranging from interview requests from top magazines, newspapers and websites, to interviews on radio and TV shows.

If your expertise fits one of the requests, you simply fill out a brief form, and it gets sent to the reporter doing the story.

So join Reporter Connection today to start getting PR for your venture, and use it to gain funding and more current/prospective customers.

Finally, two other similar free PR services for you to check out are Help A Reporter, and PitchRate.


Acting Like a Hoodlum & Gaining Customer Intelligence


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Both my parents were schoolteachers, and when I was born, my mother temporarily stopped working to take care of my brother (2 years older than me) and I.

So, to earn some extra income, my father got a second job selling vacuums at a local department store.

One day, my father noticed a sketchy-looking guy in the store. The guy was dressed strangely and was walking around and touching a lot of the merchandise.

So, my father called the security guard over. The guard came over and my father pointed out the strange man. "You should keep an eye on that guy; he looks like a real hoodlum," my father said.

"That hoodlum's my boss," replied the security guard.

Clearly my father was pretty surprised to find that out.

It turns out that the head security guard would occasionally dress up like a hoodlum and roam through the stores. Because he looked non-threatening to "real" hoodlums, he was better able to catch those hoodlums shoplifting items.

What the head security guard was really doing was putting himself in his customers' shoes. In his case, the customers were bad guys trying to steal.

For most of us, our customers are folks that we want to buy our products or services. Or folks that we want to invest in our businesses.

The key to our success is to put ourselves in our customers' shoes and/or to essentially spy on them like the security guard did.

We need to do this to learn critical customer intelligence: What are their hot buttons? What drives their decision-making? What have they bought or invested in previously? What are their goals and how do they hope that we can help achieve them?

Particularly when searching for investors, many entrepreneurs fail to see things from their customers' perspective. They think too much about what's in it for them.  The key is always to find the win-win; the solution that allows your customers to win while you win too.

So, always spend time amongst your customers. And ideally, like the head security guard, you can blend in; so customers don't feel threatened, don't put up a guard, and give you the genuine answers you need to know.


The Single Worst Thing You Can Do As An Entrepreneur


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Recently, my wife and I were reminiscing about the TV shows we watched when we were kids.

We started talking about shows like Laverne & Shirley, The Monkees, and Happy Days.

We thought it would be fun to watch these shows with our kids, so we went on Netflix and rented the first season of each of them.

The shows brought back a lot of great memories. Particularly Happy Days...as The Fonz is one of the great TV characters of all time.

One of the Fonz's lines really struck me. As you may remember, the Fonz used the phrase "Sit on it" to essentially tell others to "buzz off."

It's a pretty funny phrase when you think about it -- sit on it -- as it's not really that derogatory.

But, it turns out that in entrepreneurship, it is one of the most derogatory phrases you can possibly use.

Let me give you an example. The other day, I spoke to an entrepreneur (let's call him Joe) with a neat idea. But there's no possible way Joe's going to be successful.

Why?

Because I met someone with the same idea two years ago at an angel network meeting. And that entrepreneur raised money for the idea and has been working on it and improving it every day since then.

So, even if Joe is the better product developer, marketer, leader, etc. he can't succeed. Since his competitor now has a 2-year advantage over him.

The WORST thing you can do as an entrepreneur is to "sit on it" or sit on your ideas. Rather, you must act on them. If not, someone else will. There are simply too many other entrepreneurs out there.

The saying "the richest place in the world is the graveyard" is really applicable here. Why is it the graveyard? Because that's where the billions of ideas go that were in the heads of entrepreneurs who never acted on them.

If you have an idea for a new business, you must take the first step. Or you really can't call yourself an entrepreneur -- you're just a "dreamer." Sorry to be so blunt about this; but it's the truth.

So take the first step.

I believe the first step is to develop your business plan. The business planning process forces you to really think through your idea, prove it's viable (or not), and create an action plan for transforming your idea into reality starting now (not later).

So, if you've been sitting on an idea, STOP. Take action now. Don't let Fonzie say "sit on it" to you.


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