Growthink Blog

You May Not Have to Quit Your Day Job


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If you haven't yet launched your new business, I have some advice for you.

It's actually not my advice. As I'm a little conflicted about it. Let me explain.

The advice is to start your new business as a project. What that means is that you don't quit your day job. You don't raise capital. You don't focus 100% of your effort on it.

Rather, you work on it as much as you can in your spare time until it either becomes something, or it doesn't.

The advice comes from Bambi Francisco, the co-founder and CEO of Vator.tv who I spoke with earlier this week. It's not only her advice having founded a company, but the advice given to her by Mark Pincus.

Pincus is the serial entrepreneur who founded Tribe in 2003 and sold it to Cisco Systems in 2007, and is now the founder and CEO of Zynga, a large social gaming company. You can watch Francisco's brief but informative interview of Pincus here.

So, the point is to start your new business as a project. Obviously, this depends on your choice of business. If it's a restaurant, there's not much of a project to be had. But if it's software, for example, you can start developing it and see if you are able to start creating features that people want.

And once you can prove that the project is developing into a viable business, you create a real company for it.

This "project" concept also reared its head when I recently spoke with Eytan Elbaz, co-founder of Oingo, the company which later would be purchased by Google and renamed as Google AdSense.

Elbaz and his co-founders were developing their novel software while still holding full-time jobs. After a little while, they were able to develop a working prototype. And then, Elbaz showed it to an angel investor (who interestingly was a client of his at his current job). It was only upon the angel investor writing them a check that they decided to leave their full-time jobs and really launch the company.

So why am I conflicted about this advice? Well, there's definitely something to be said for the entrepreneur that is so passionate about their business that they're willing to fully launch it from the get go.

To leave the comfort of their current job and take all the risk. In these cases, I like that the entrepreneur can't blame their current job for limiting their time. They fully immerse themselves in their business, and give it their best possible shot. And in many cases, this total commitment is what drives success.

The key here is probably that everyone's situation is different. The young entrepreneur might have an advantage in that it may be easier to leave their current position and jump 100% into their business. Conversely, the older entrepreneur with the family and mortgage may be less able to shoulder the risk of foregoing their current salary.

The choice is yours - take the leap fully or partially. Each can result in success.

The only choice that I truly hate is doing nothing. Too many people sit with great ideas in their heads but fail to act on them. And then, when someone else successfully executes on their idea, they say, "Hey, that was my idea."

To them I unfortunately say, "Who cares - it's the entrepreneur's willingness to commit and execute on the idea that really matters!"

Last Chance to "Get the Skinny" on Market Research for Your Business


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Have you ever heard of ZipSkinny.com?

If you go to the homepage of their site, you'll see a box that asks you to "enter your zip code to see U.S. Census data and comparisons with neighboring ZIPs."

Unless you're one of those people who gets excited about miscellaneous facts and figures, at first glance this might seem like an uneventful site.

But for those of you who provide products or services to local customers, the information available is *invaluable* in conducting market research for your business.

Once you type in your zip code and press enter, you'll see tons of great data on your local market. Such as the percentage of local residents who have graduate degrees or who are married. And, you’ll see economic indicators such as household income, and demographic information on race, age, and gender.  

As an example, I've just typed in 10549, the zip code of our office here in Mount Kisco, a suburban town  just outside of NYC. One fact that stands out to me right away is that 62.3% of residents have lived in the same home for 5+ years. Another is that the median household income is $75,761. Put these two statistics together, and you can deduce that this town is a fertile location for a business where both an affluent demographic and high customer retention are essential, such as a landscaping or cleaning business.

Whether you're looking to conduct preliminary market research before delving into a business, or examining markets into which you can expand your current venture, ZipSkinny is one of many tools that can help you with the process.

And in our recent report, "How to Quickly, Easily, & Expertly Conduct ZERO-COST Market Research For Your Business" I lay out this and several other tools to help you conduct the market research online at a level that is comparable the way it's done by experts with decades of experience.

As you might recall, I released this report at a STEEPLY discounted rate of one cent for each year of my wife's age, in honor of her birthday in March.  And that discount is about to disappear forever.  

On Thursday at midnight, the price is going up more than 100x, so as the subject of this blog post suggests, this is your last chance to get the information of market research experts for literally pennies.

If you are a Growthink University member, you can click here to grab your free copy of the report if you haven't done so already.

Otherwise to order now, click here. Or for more information, you can watch the brief video below:



How to Raise Capital as a First Time Entrepreneur: An Interview with Brad Feld


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Yesterday I had the opportunity to interview Brad Feld, who is considered among the elite investors in privately held companies.

For those of you who are not familiar with Brad, his background includes starting and selling his own software company, investing as an angel in 40 to 50 companies, and founding or co-founding three venture capital firms: Intensity Ventures, Mobius Venture Capital and Foundry Group, where he currently serves as Managing Director.

While there were several invaluable points for entrepreneurs seeking capital in the interview, I found the following to be most interesting:

1. Your VC firm is your partner.

Many first-time entrepreneurs view VCs simply as providers of capital. In actuality, VCs are partners. They exert control over your company. They have experience in product development or scaling companies, or both, and can provide significant value beyond the money they infuse in companies.

Because VCs are partners that exert control, you need to assess them much like you would other partners. Mainly, you need to make sure that there is a really good fit.

2. Angel investors are the friend of the first-time entrepreneur.

First time entrepreneurs should strongly consider angel investments prior to venture capital. Angel investors often have financing experience which can help entrepreneurs navigate the VC waters when they are ready (there are a ton of terms and issues involved with venture capital that most first-time entrepreneurs don't know about).

Angel investors also tend to have relationships with VCs. Also, angels often have the operational experience to help grow the entrepreneur's company. And finally, the angels' funding can help the company grow to a point where it is more suitable for venture capital.

However, when structuring angel deals, it is imperative to keep the pricing/valuation fair and the deal terms as simple as possible. If not, raising subsequent venture capital rounds becomes more challenging.

3. Don't look for investors who are not a good fit

Brad mentioned the 80/20 or even the 99/1 rule. Essentially, entrepreneurs should spend a ton of time on the 1% of investors who are a great fit. And not waste their effort on the other investors.

Two key aspects that Brad mentioned for ensuring a good fit are 1) geography (many VCs will only invest in certain geographic regions) and 2) sector (Foundry Group simply doesn't invest in Clean Tech; no matter how exciting the company looks). I would also add "stage" to this list as many VCs focus on companies at specific stages (e.g., some only want post-revenue companies, etc.)

You can listen to the full 30-minute interview by clicking the blue triangle on the audio player below:

 

Are you an entrepreneur looking to find angel investors for your deal?  Gain all the tips and advice you need with our Growthink's Angel Investor Guide.


PR Strategies for Your Business: An Interview with Richard Harris


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My recent interview with PR expert Richard Harris was enlightening. You may know that I owe a lot of Growthink's success to PR. A decade ago, I pitched the Los Angeles Times and they published a story on us. That day I received about a hundred phone calls, and at least that volume in emails. So, I focused the interview on figuring out how to replicate that success.

Richard serves as the founder and CEO of Momentum, which provides communications, strategy and placement agent services to private equity funds, investment banks, and selected early stage and non-profit companies. A 20+ year veteran of the public relations industry, Richard has not only an impressive client list (that includes The Girl Scouts of America, Polaris Venture Partners and Star Jones), but also a wealth of knowledge on this subject.

Some of the areas the Richard covered were:

  • Four ways to make your press release "newsworthy"
  • The three press release distribution sites that are worth using (and why you shouldn't use the other ones)
  • The different people you need to pitch if you are targeting websites and print publications versus television or radio media
  • The best time and day of the week to pitch journalists
  • What NOT to do if a journalist picks up your story


And many, many other critical points that every entrepreneur needs to know about if they want publicity for their businesses.

The full interview is available for members of Growthink University.

For non-members, you can listen to the first five minutes of the interview by clicking on the blue triangle on the player below. 


How to Build an Effective Sales Team: An Interview with Adam Shaivitz


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All entrepreneurs must be well-versed in sales.

We are always selling: Selling to employees as well as customers, investors as well as partners, etc. And those who excel at selling have a major competitive advantage.

To make sure that both you and I are in fact not only great at selling, but building an effective sales team, I recently interviewed sales whiz Adam Shaivitz.

If you're not familiar with Adam, Adam is the co-author of a best-selling book on selling called “Selling is Everyone's Business: What it Takes to Create a Great Salesperson.” He is also a sales consultant with Accelerate Performance who has consulted for Google, ADP, Pimco, Morgan Stanley, and many others.

Adam conveyed tons of great information. Two points that I especially liked were the following:

1. Make sure that you are properly motivating and solving the problems of your buyers.


The best salespeople are problem solvers who are able to sell the benefits of their offerings tailored to one or more of the six basic fundamentals that all of us as humans want:

  • Desire for gain
  • Fear of loss
  • Security and protection
  • Comfort and convenience
  • Pride of ownership
  • Satisfaction of some emotion like love or hate or ego


Great sales people understand which of these six motivators are most important to their prospects, and sell into them.

2. Spending time with your best sales performers.

Adam told us that too many business owners neglect their top sales performers. Rather, they tend to focus on improving their lowest performers.

There are two problems with this approach. First, working with and improving the performance of your best sales performers by only 10% may be easier and more beneficial than improving the performance of your lower sales performers by 25%. Secondly, your top sales performers are the ones that will be targeted by headhunters and other firms, and you can't afford to lose them.

A few of the other areas we covered were:

  • The keys to building a successful sales team
  • Adam's favorite ways to motivate a sales team
  • At what point can the entrepreneur or founder still run the sales organization and at what point should they bring in a dedicated sales manager
  • How to provide feedback, motivation, and inspiration for team members
  • How to transfer the skills of top performers to everyone else in the organization
  • How to create an environment that encourages improvement and performance

The full interview is available for members of Growthink University

To listen to the first few minutes of the interview, please click the blue triangle in the player below.


Building Your Management Team Might Be Easier Than You Think


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Yesterday I had the privilege of interviewing Matt Ocken, one of the founders of Kindred Partners.

Kindred Partners might be the best at recruiting executives for high-growth technology companies. In fact, some of the top venture capital firms continuously use Kindred to find executives for the companies they fund.

If that’s not enough, consider that Kindred was responsible for placing CEO Meg Whitman at eBay as well as key executives at Google, Amazon and Facebook.

So, Matt was obviously uniquely qualified to answer my questions about how to expertly build your company’s management team.

Matt started by going through the four tactics for building a great management team. Surprisingly, the first tactic was pretty simple and should be used by virtually all entrepreneurs.

The tactic? Figuring out who you already know that could be a good addition to your team. As Matt pointed out, there is a proven correlation between success and a team having worked together in the past. So, if you have successfully worked with someone in the past, your chances of successfully working together again are high. And investors know this and are keen to fund companies led by teams with history of successfully working together.

So, a first step is for the entrepreneur to do an audit of who they have worked with successfully in the past. You could have worked with them in school, at a job or at an organization. Create this list and then narrow it down to include the individuals you truly respect and would like to work with again in the future. Then, contact these individuals to see if they are interested in joining your team.

Note, Jay Turo, Growthink’s other co-founder, and I met at business school. We worked together successfully on a couple of projects during school and were friends. So, Jay was the first person I approached after I had the idea for Growthink. We’ve now run Growthink together for 10 years, so I can personally vouch to Matt’s approach!

Click here to download the interview as an MP3 file and the PDF transcript.

And here is a preview of the first few minutes of the interview (click the blue triangle to play):

 


How to Find Grants - The ONE Website You Need to Know About


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The sky is falling. The sky is falling. While that's the news the media is telling us everyday, it's not necessarily all true.

While the economy is clearly not doing so well, there is still tons of money available to organizations via loans, investments and grants.

In fact, with regards to grants, last year more than 75,000 U.S. foundations gave $45.6 billion to organizations and individuals, according to Foundation Growth and Giving Estimates: Current Outlook (2009 Edition). That's $45.6 BILLION!

Do you want a piece of that money? Well, if you do, there is one site that you MUST visit: FoundationCenter.org.  Right on FoundationCenter.org's homepage you can start searching thousands of foundations that provide grants. You can even search by factors such as your zip code and market sector to zero in on the most appropriate grants for you.

But, before you rush to give FoundationCenter.org a try, you need to know the one key fact about private grants that no one seems to tell you. Foundation grants are only for non-profit organizations.

So, if you are a non-profit organization, you should definitely stop what you're doing and go to FoundationCenter.org to see what grants might be available to you.

I know what you may be thinking right now...How does this help me? I'm running or starting a for-profit business.

I gotcha.  And fortunately, there are also billions of grant dollars available for you too. However, getting these dollars is a bit more tricky. Your business needs to be in certain sectors. You need to know where to look. You need to know how to apply and the secrets to making sure your application succeeds.

To answer these questions and make winning grants for your business a whole lot easier, my team and I just completed Growthink's "Step-by-Step Guide to Raising Capital for Your Business from Grants."

The guide is focused on teaching for-profit businesses how to raise capital via grants.  Growthink University members have already been sent their copy of this special report. Others can learn more and download it today by clicking here.


Grants for Your Business: An Exciting Truth Amongst Lies & Misinformation


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As you may have figured by now, I'm on a quest to help all business owners and entrepreneurs get funding for their businesses.

I believe that all entrepreneurs who are willing to invest their time and their lives into starting a new or growing an existing venture should be given the opportunity to do so. Clearly, their business concept must be viable, their business plan must lay out a pathway to success, and they must invest the resources in learning how to raise capital. But once these conditions are satisfied, I find it very saddening when entrepreneurs put in a solid effort but are still unable to raise the capital they need.

In my quest to solve the eternal funding issue, my team and I have been working on really figuring out an elusive form of capital: grants.

Grants, as you may know, are given to thousands upon thousands of companies each year totaling billions of dollars. Furthermore, they don't need to be paid back. So, on the surface, grants are a really interesting funding source for businesses. As you can imagine, when we started putting together our report entitled the "Step-by-Step Guide to Raising Capital for Your Business from Grants," we were really excited.

But, the excitement faded a bit when we learned about all the lies and misinformation there is out there regarding grants. Let me tell you the two that frustrated me the most.

Myth 1: Grants are offered to businesses owned by women, minorities and the disabled. This statement is 100% FALSE. In fact, NO grants are set aside specifically for small businesses run by women, minorities and the disabled; all grants from the federal government are open to a multitude of groups which include these businesses.

There ARE loans and government contracts reserved for women, minorities and the disabled, but NOT grants.

Myth 2: Grants for businesses are available from both the government (federal, state and local) and private and public foundations.

This too is false. The truth is that with few exceptions, grants offered by private or public foundations are NOT available to for-profit businesses. They are exclusively reserved for non-profits.

There is a silver lining here however. While we have found all the misinformation discouraging, we have uncovered that billions of dollars ARE given to small businesses each year via federal, state and local government grants, and more importantly, we've uncovered the formula that entrepreneurs and business owners can use to gain these dollars.

My team and I have been hard at work finishing the "Step-by-Step Guide to Raising Capital for Your Business from Grants." The report is now available, and you can download it here.

5 Tools to Improve Your Productivity, Creativity & Efficiency


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We could all use tools to increase our productivity, creativity and efficiency. Below are five tools that I have either been using for years, or just adopted, that have helped me, as I'm sure they can help you too.

1. 99designs.com

99designs is a site that I was recently turned onto and it's really cool. If you need a great logo designed for your business, this is the way to go. Before I tell you how it works, let me tell you about the old way of getting a new logo. The old way was to first look at several designers' portfolios to see which one had created logos that you liked. Then you would hire one designer. Next you would write down and give them your design specifications. Then, you would hope that they came back to you with a solid design, or one that was good enough that with a few tweaks could be improved.

Needless to say, the process took a long time, and more times than not (I say this from lots of experience) produced less than optimal designs.

Now, let me tell you how 99designs.com does it. First, you post a design brief, which is easy to do since the site leads you through some questions.

Next, you set your budget (amounts generally range from $100 to $600). Then, designers from around the world submit design concepts to compete for your business. During this process, you can rate the designs and provide feedback to help the designers deliver what you want. In the final step, you choose the winning design and pay the designer the amount you set, and the designer sends you their completed design (along with copyright to the original art work).

So the key points are 1) you don't have to spend hours finding designers and judging portfolios, 2) you don't pay anything (except the $39 fee to 99designs.com) until AFTER you see the design you want, 3) you get lots of designs to choose from, at least one of which is usually great (the higher your budget the more designs you get; for $300 you can get up to 100 submissions usually).

2. PDF995


PDF995, located at pdf995.com allows you to transform any document (e.g., Word file, Excel file, web page, etc.) into a PDF document. Best of all, there's no cost to download it. I used to use the official program from Adobe, but it's expensive and constantly crashed my computer.

I often use PDF995 to convert Word files to PDF files. This usually makes the file size smaller and ensures compatibility for whoever wants to view the file. It is also good for copyright protection (makes it harder for others to copy your work). I also use PDF995 a lot for converting web pages into PDF files. A lot of times I come across web pages that I want to reference later. Sometimes I bookmark them, but oftentimes the page may change. So, I PDF the page and file it away so I can access it whenever I want in the future.

3. Firefox Plugins

For those who have not yet tried the Firefox browser, I highly recommend it. Not only is it very fast and stable, but there are tons of plugins that make it more productive. A few plugins that I use are MeasureIt (allows you to quickly measure the dimensions of anything on the web page you are visiting), ColorZilla (allows you to click on any pixel on the web page to see its precise color) and FireShot (allows you to quickly take a screen shot and manipulate it (e.g., crop out sections; add comments; save file).

These are just the tip of the iceberg. Here is a full directory of Firefox plugins: https://addons.mozilla.org/en-US/firefox/

4. Bubbl.us

A mind map is a visual diagram used to represent words, ideas, tasks, or other items linked to and arranged radially around a central key word or idea. Creating mind maps are great for mapping out new projects or ideas, particularly if they are not linear. For example, if you want to create a new ebook, you may start with the word ebook in the center. Then you may draw a line to "creation" which will then have sub-sections for research, writing, etc. Another sub-section of the word ebook would be marketing, which would then have its own sub-sections. Etc.

My frustration with mind mapping is that, while easily done using pen and paper, I prefer a digital copy so that I can distribute it to my colleagues and/or modify it over time. And traditionally, creating mind maps with programs such as PowerPoint, took forever.

Enter Bubbl.us, a new online tool that allows you to create, save and modify mind maps REALLY easily. Give it a try. You'll be amazed at how easily it works and it's totally intuitive to use. And currently there are no fees.

5. Springwise.com


The final tool I'd like to tell you about today is Springwise.com. Springwise has created a network of 8,000 "spotters" from around the world who "scan the globe for smart new business ideas, delivering instant inspiration to entrepreneurial minds." On the site, you'll learn about businesses like Wonderpizza, a pizza vending machine developed in Italy, and Dogtree (dogtree.com.au), an Australian social network that helps dog owners find playmates and walking friends for their dogs.

Springwise is great for inspiration and brainstorming. It gives you unique concepts and ideas that can really get your creative juices flowing.

I hope you can use these tools and ideas to help you and your business. If you have any comments or questions, or want to post your own tips to help your fellow entrepreneurs, please add them in the comment section below.

Naming Your New Company or Product


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I recently read a great blog post, from a company called The Name Inspector, about how to name your company or product. Whether your goal is to raise capital or gain the interest of partners or customers, the names of your company and products are critical.

In fact, when we first launched Growthink a decade ago, we started with the name BestBizPlan since we initially focused just on developing business plans. Realizing that we would expand beyond business planning, we changed the name to Growthink to reflect our desire and skill sets in helping entrepreneurs and business owners in growing their businesses via planning, capital raising, marketing, strategy and more.

The Growthink name has a better connotation and helps client, prospective clients, partners and employees better understand and relate to our mission. While I cannot attribute our company's success solely to our name, it certainly has helped us.

So, here are the ten ways for you to create great company (and/or product) names as suggested by The Name Inspector:

1. Use Real Words: These are names that are simply repurposed words. (e.g., Adobe, Amazon, Fox, Yelp)

This category also includes misspelled words (e.g., Digg (dig), flickr (flicker)) and foreign words (e.g., Vox (Latin 'voice').

2. Use Compounds: These names consist of two words put together (e.g., Firefox, Facebook).

3. Phrases: These names follow normal rules for combining words (but are not compounds) (e.g., MySpace, StumbleUpon).

4. Use Blends: Blended names have two parts, at least one of which can be recognized as a part of a real word (e.g., Netscape (net + landscape); Wikipedia (wiki + encyclopedia)).

5. Use Tweaked Words: Tweaked word names are derived from words that have been slightly changed in pronunciation and spelling - commonly derived from adding or replacing a letter (e.g., ebay, iTunes).

6. Use Affixed Words: These are unique names that result from taking a real word and adding a suffix or prefix (e.g., Friendster, Omnidrive).

7. Use Made Up or Obscure Origin Words: These names are generally short names that are either completely made up, or, since their origins are so obscure, they may as well have been made up (e.g., Bebo, Plaxo).

8. Use Puns: Puns are names that modify words/phrases to suggest a different meaning (e.g., Farecast (forecast, fore -> fare), Writely (rightly, right -> write))

9. Use People's Names: using a general name or the name from a personal connection (e.g., Ning (a Chinese name), Wendy's (founder Dave Thomas' daughter's nickname)).

10. Use Initials and Acronyms: names derived from the first letter of each word in the longer, more official name (e.g., AOL (America Online), FIM (Fox Interactive Media)).


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