7 Ways to Outsmart Your Competition


 

"Knowledge is power." This is a well known saying commonly attributed to Sir Francis Bacon, who was an English philosopher, statesman, scientist and author.

In business, knowledge certainly is power. For example, if you knew where your market was heading, you would have a massive leg up on your competition.

So, how can you gain more knowledge to outsmart your competition? Here are 7 ways.

1. Learn from your customers.
Marketing consultant Jay Abraham once said, "your customers are geniuses; they know exactly what they want."

Because your customers know what they want, speak to them. And don't just speak to your current customers, but speak to your competitors' customers too. Learn to listen deeply to your customers and to ask probing questions. And when you hear consistent feedback (and not just one customer saying something), take action.

2. Learn from your competitors.
Watch your competitors closely and learn from them. What do they seem to be doing well, and how can you better emulate them in this respect? What are they doing poorly that you can capitalize on?

Importantly, don't just copy your competitors until you know that what they are doing works. For example, if a competitor starts offering a 25% off discount for new customers, don't copy them right away. Rather, wait and see what happens. If the competitor stops offering the discount quickly, then the promotion probably didn't work. Conversely, if the competitor is still offering the discount 6 months later, it probably did work. Only copy the competitor's "winners."

Also try to figure out what competitors are saying about you. And, if criticism from a competitor gets back to you, don't become defense or dismiss it casually. Rather, engage critically with it. The criticism may prove to be quite helpful. A competitor may be aware of your weaknesses in a way a friend or customer cannot be. So don't disregard negative feedback, but rather consider it carefully, and take corrective action as appropriate. 

3. Learn from your employees.
Oftentimes your employees have a lot more information than you do. They are the ones who are interacting with customers, and they are the ones that are building your products and providing your services.

Speak to your employees and get their feedback, ideas and suggestions. As an example, nearly all new innovation at Toyota comes from front-line employees. Encourage your employees to come up with ideas and give you feedback. They may also alert you to changes in the marketplace and customer behavior that you need to understand in order to adapt.

4. Learn from your community.
This is particularly true for local businesses. Find out what is going on in your community. For example, if your community is heavily involved in recycling, or if the local high school football team just won a championship, then you need to know about it since these are things your community cares about. Importantly, leverage this information. In these two examples, you could offer a sale related to the football team's victory. Or post signs explaining how your business recycles. These actions would position you as part of the community and cause customers to flock to your business.

5. Learn from coaches and consultants.
The right coach and/or consultant will have lots of knowledge that you don't. They will have worked with other business owners and "been there, done that" - that is, they will have seen challenges and overcome them already. Because you won't have to "reinvent the wheel," these paid experts can allow you to make the right decisions, avoid mistakes, and grow more quickly. Plus, paid experts can give your business a reality check and keep you focused and accountable.

6. Learn from mentors.
The right mentor serves a similar function as a paid coach and/or consultant in that they have experience, expertise and connections that allow you to avoid mistakes and grow your business more quickly. The challenge is finding the right mentor, and setting up the appropriate structure to get ongoing feedback (this naturally happens when you pay a coach or consultant).

7. Learn from other business owners. In previous articles, I have mentioned the massive power of mastermind groups. Mastermind groups are groups of business owners who work together to grow everyone's business. Mastermind groups are incredibly powerful since other members of the group will have already overcome the challenges you face, and thus can give you the answers you need.

Likewise, in many cases, skills and knowledge that have taken other business owners months or years to learn can be transferred to you in minutes. So, you gain massive knowledge quickly, and gain a support group that all shares the common goal of building a great company.

Knowledge certainly is power. Leverage these seven ways to gain knowledge, and you will be able to outsmart and dominate your competition.

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Venture Funding Advisors: How to Find, Secure & Leverage Them


 

If you're looking for funding and/or to successfully grow your business, a little known secret is to find and leverage Advisors.    

So, who or what are Advisors? Advisors are successful people that you respect and that agree to help your company. Advisors are generally successful and/or retired executives, business owners, service providers, professors, or others that could help your business.    

Advisors generally will not cost you any money (you don't pay them), although I do recommend giving them stock options to incentivize them to contribute as much as possible.   

Getting Advisors is not a requirement for raising money, but they have multiple benefits as follows:

1. Practice: if you can't successfully pitch an advisor to invest time in your business, then you're not going to successfully pitch anyone to invest money in your business. So, practice your pitch on prospective advisors first, and use that practice to perfect it.

2. Connections to capital: as successful individuals, advisors often have the ability to invest directly in your company; and/or they tend to have large, high quality networks of individuals they can introduce you to.

3. Credibility: having quality advisors gives your company instant credibility in the eyes of lenders and investors.  For example, if you started a new hockey stick company, having Wayne Gretzky as an advisor would certainly give you great credibility (and connections). But even having much smaller names than Wayne Gretzky as advisors can build enormous credibility.

4. Operational success: In an interview I did with Dr. Basil Peters (a wonderfully successful entrepreneur, angel investor and VC), Dr. Peters said that mentors and advisors are an entrepreneur's "single most controllable success factor."  Having Advisors with whom you can discuss key business matters as you grow your venture will help ensure you make the right decisions, particularly if they have encountered and dealt with the same challenges already in their careers.

I have seen these four benefits first-hand for my own companies and for companies that we've helped build their own boards. Click here if you'd like to see the list and bios of Growthink's Board of Advisors.

So, how do you build your Board of Advisors?

The steps are fairly simple:

1. Create a list of people you would like to be on your Board
2. Contact and meet with them
3. Secure the best Advisors you meet with

The final step is to hold formal and informal meetings with your Board members to leverage them -- to get them to fund your company or introduce you to other funding sources; to answer key challenges that you are facing, etc.

I must admit that years ago I wasn't thrilled about investing the time to go through the steps of creating a Board of Advisors. But I can assure you; those hours spent have yielded an enormous return on investment. In fact, I should have developed my Board much sooner than I did.

So, go out there and start building your Board of Advisors today. And start reaping the enormous benefits.
   
Suggested Resource: Want advisors? Want funding for your business? Then check out our Truth About Funding program to learn how you can gain advisors and access the 41 sources of funding available to entrepreneurs like you. Click here to learn more.

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Raise Funding in 2018 with Our Proven Funding Pyramid™ Formula

If you’re struggling to raise money, it’s probably because your funding strategy is broken.

Here’s how to do it right

As I explain in this video, the key is to start at the bottom and work your way up the Funding Pyramid.

Click here to watch the video now

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How to Find Great Outsourced Help Online


 

There are three main benefits I typically derive from outsourcing:

1. Cost savings. I'm often able to pay less for jobs I outsource, particularly if I outsource them to people in lower cost-of-living states or countries.

2. Reduce overhead. Usually I outsource projects that are not full-time or that I am able to easily stop if they aren't working out as planned. This reduces my overhead (and allows me to scale down as needed) since unlike a full-time employee, the outsourced people are not a fixed expense.

3. Supplemental work at night-time hours. When you outsource overseas, it often provides great timing of workflow. For instance, in one company I ran, I would create tasks during the day, give them to my outsourced team in India, and they would be done by the time I arrived in the office the next morning.

However, for outsourcing to work, you need to find the most qualified people to which you outsource.

The key to this is to start by getting the largest pool of qualified outsourced providers to apply for the project you need accomplished. Because you want to have as many people as possible to choose from.

Even if you only hire one, you can go back and contact the same pool of talent for future projects. Consider applicants as being in your "rolodex" of people to call.

To help you do this well, here are some tips to consider when finding and judging outsourced people to complete your projects.

Choose Your Outsourcing Platform

There are many sites in which you can find outsourced providers for the tasks you need done. Among many others, these include Craigslist, ODesk.com, Guru.com, Elance.com and 99designs. Some of these sites focus on certain types of outsourced projects like technology and design, while others allow you to find people for all types of tasks.

The process of posting a project is very similar on each of these sites, but there are also minor differences to get acquainted with as you go -- worry about those later and follow these basic steps.

Create a Clear Project Title

Include the work to be done, on what, and in what industry. For example, "Help Making Ebook" could mean anything from research to writing to editing to cover design. Compare that to "Writing 10,000 Word Real Estate Ebook."  The latter will be more likely to catch the eye of writers and providers with real estate knowledge.

Create a Clear Project Description


This sounds simple enough, but you should try to answer as many possible questions as you can, which means addressing certain areas, like:
 

  • The scope of the project. In the above example, requiring a 10,000-word Ebook to be written vs. 20,000 words would be helpful information for applicants to know. This helps them estimate the time it will take to complete and therefore their bid for the project. If you are paying hourly, it will help prevent misunderstandings later.

  • Software needed. Make sure they at least have Microsoft Word and Excel, if that's what you use. Other software is industry-specific, like Adobe Photoshop among graphic designers.

    You may or may not know what software is needed for things you don't specialize in, but you will soon enough. All other things equal, choose the person who already has the best software for the job, as you'll get better results.

  • Programming languages. Some website projects require that the provider knows certain programming languages besides standard html, such as PHP, AJAX, etc. In these cases, it's better to post "PHP Programmer Needed to..." than just "Programmer." You'll get fewer, but more qualified responses. If you don't know what languages are needed, either ask a friend or do a Google search beforehand, or you could post in the project that you don't know what language is needed, and ask them to make suggestions.

    Ideally, you will want to hire people who can educate you, so this sets the tone right from the beginning. I know some people who post $10 projects for 30 minutes of a programmer's time just to answer their questions and learn simple tips and tricks to quickly do yourself without having to hire someone.

  • Payment amount. First, decide if you want to pay them by the hour, or for the whole project. There are pros and cons to both. If you estimate that something will take 5-8 hours, going hourly is fine. For work that will take longer than that or that has a higher likelihood of uncertainty, I would try a project-basis.

    Sometimes you can't estimate how long something will take-in this case, hire them on an hourly basis for a little while to get started and figure things out. Sometimes applicants will claim that they can't estimate how long it will take, while others can. I would go with people who are able to give you specific information as it shows they have their act together and have done something enough times to know how long it should take.

    Often after working on something for a little while, the way ahead becomes much more clear and they can better estimate the remaining hours from there. Sometimes I will hire 2-3 people on an hourly basis to do parts of the same project, and compare their performance to decide who should finish the whole project themselves.

    Also, you may not have a clue what something will cost, so make your best guess and let the range of proposed prices confirm this assumption or bring you back to reality. It may surprise you by being higher or lower, on average, than you thought.

  • Payment terms. Do not pay more than 50% up front. Rather, you can pay up to 50% up front, but then have milestone payments.

    Also, never pay someone the final amount if there is still work left to be done...you may never see it finished if they take off to chase down new work.

  • Payment methods. Many of the sites listed above will handle the payment. If they don't, choose the one that feels most comfortable for you, or whichever the providers prefer most.


Upload samples of what you need

You can write 5 paragraphs trying to explain the final product, or you can show them something similar you have done before (or someone else's to model yours after).

Most sites will allow you to upload files to show them what they'll be working with or making. You can also insert links in the project description to files, audios, or videos showing or explaining things more vividly.

Choose the time period for bidding


You might be given options like 3 days, 5 days, 7 days, 15 days, or 30 days to accept bids. I would lean towards giving a longer time period, unless the urgency of your project means that you don't have as much time to wait.

But basically, the more time that providers have to find and respond to your project, the more qualified applicants you'll have to choose from.

Also, some of the best providers are also the busiest, so by giving a longer time frame to respond you are more likely to catch them when they're available.

This is not an exhaustive list, but covers the most important elements of a good project posting-one that will put you in a position of strength and cut down your odds of a bad experience. Cover these bases and you'll have more people applying than you can sort through.

Which then leads to the final phase: judging your applicants. In judging which applicant(s) to choose for your project, consider:

1) How they responded to your project request: were they articulate? Did their comments and/or questions make sense?

2) Their portfolio: do they have a website which shows their portfolio of work that you can judge? If so, take a close look.

3) Their ratings. On most of the outsourcing sites listed above, past clients will rate the outsourced person's work. I never use someone who hasn't completed at least 20 projects and has a rating of 4 stars or above.

Follow this advice and you can find the right outsourcers to help you grow your business and profits.

 

Suggested Resource: If you don't outsource, you can't compete. The math is simple...if your competitors are outsourcing and only pay $X to complete a task, and you pay $3X, $5X or $10X, your competitors will eat your lunch. You simply must outsource to stay competitive. Outsource the right way using Growthink's Outsourcing Formula. Learn more by clicking here.

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The 5 Most Common Funding Sources


 

If you want to be successful in business, it is crucial to determine when, where, and how to obtain the funds you need. Whether you need $1,000 or $1 million to start or expand your business, if you can't raise this money, you can't build the business you want.

Before You Look For Funding

Before you look for funding, you need to create your business plan. In addition to explaining your business and your strategy for success, your plan must determine how much money you need and for what it will be used.

Also, it's very important for you to understand the timing of the funding. For example, do you need all the funding now (e.g., to build out a location), or can you receive your funding in stages or "tranches."

The amount of funding you seek will effect the source of funding you approach. For example, if you require $250,000 in funding, angel investors are more applicable then venture capitalists. If you need $5 million, the opposite is true.

While I have identified 41 sources of funding for your business, below are the 5 most common.

The 5 Most Common Types of Funding

1. Funding from Personal Savings

 
Funding from personal savings is the most common type of funding for businesses. The two issues with this type of funding are 1) how much personal savings you have and 2) how much personal savings are you willing to risk.

In many cases, entrepreneurs and business owners prefer OPM, or "other people's money." The four funding sources below are all OPM sources.

2. Debt Financing

Debt financing is a fancy way of saying "loan." In debt financing, the lender (often a bank) gives you funding that you must repay over time with interest.

You must prove to the lender that the likelihood of you paying back the loan is high, and meet any requirements they have (e.g., having collateral in some cases).  With debt financing, you do not need to give up equity. However, once again, you will have to pay back the principal and interest.

3. Friends & Family

A big source of funding for entrepreneurs is friends and family. Friends and family members can provide funding in the form of debt (you must pay it back), equity (they get shares in your company), or even a hybrid (e.g., a royalty whereby they get paid back via a percentage of your sales).

Friends and family are a great source of funding since they generally trust you and are easier to convince than strangers. However, there is the risk of losing their money. And you must consider how your relationship with them might suffer if this happens.

4. Angel Investors

Angel Investors are individuals like friends and family members; you just don't know them (yet).  At present, there are about 250,000 private angel investors in the United States that fund more than 30,000 small businesses each year.

Most of these angel investors are not members of angel groups. Rather they are business owners, executives and/or other successful individuals that have the means and ability to fund deals that are presented to them and which they find interesting.

Networking is a great way to find these angel investors.

5. Venture Capitalists (VCs)


VC funding is a suitable option for businesses that are beyond the startup period, as well as those who need a larger amount of capital for expansion and increasing market share. Venture capitalists are usually more involved with business management, and they play a significant role in setting milestones, targets, and giving advice on how to ensure greater success.

Venture capitalists invest in companies and businesses they believe are likely to go public or be sold for a massive profit in the future. Specifically, they want to fund companies that have the ability to be valued at $100 million or more within five years. They also go through an expensive and lengthy process of deciding on the best business to invest their money. Hence, the approval process usually takes several months.

Bottom Line

As you search for the best funding source for your business, you will discover that some financing options are complicated while others may offer a very small amount.

Choosing an inappropriate type of funding can lead to unfavorable outcomes such as feuds between the lender and business owner, shift of control, waste of resources and other negative consequences.

With this in mind, you should study the benefits and drawbacks of each financing option and select the ideal one that will help you meet your business goals. Because with the right source(s) of money, the sky is the limit for your business.

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Why Your Worst Enemy Can Raise More Money Than You


 

The word "crux" is an interesting word. It's a noun that can be defined as: (1) the decisive or most important point at issue, or (2) a particular point of difficulty.

In either case, the word aptly applies to raising funding for your business, because in doing so, most entrepreneurs and business owners encounter difficulties.

I believe the crux to successfully raising money for your business lies initially in understanding that investors are essentially professional risk managers.

Let me explain. Most sources of money, like banks and institutional equity investors (defined as institutions like venture capital firms, private equity firms and corporations that invest), are essentially professional risk managers. That is, they successfully invest or lend money by managing the risk that the money will be repaid or not.

So, your job as the entrepreneur seeking capital is to reduce your investor or lender's risk.

Let me give you a simple example. Let's say that both you and your worst enemy both wished to open a new restaurant.

In this scenario, which is the riskier investment?

  • You have put together a business plan for the new restaurant.

  • Your worst enemy has also put together a business plan for the restaurant...and he/she has also put together the menu, secured a deal for leasing space, received a detailed contract with a design/build firm, signed an employment agreement with the head chef, etc.


Clearly investing in your worst enemy is less risky, because they have already accomplished some of their "risk mitigating milestones."

Establishing Your Risk Mitigating Milestones


A "risk mitigating milestone" is an event that when completed, makes your company more likely to succeed. For example, for a restaurant, some of the "risk mitigating milestones" would include:

  • Finding the location
  • Getting the permits and licenses
  • Building out the restaurant
  • Hiring and training the staff
  • Opening the restaurant
  • Reaching $20,000 in monthly sales
  • Reaching $50,000 in monthly sales

 

As you can see, each time the restaurant achieves a milestone, the risk to the investor or lender decreases significantly. There are fewer things that can go wrong. And by the time the business reaches its last milestone, it has virtually no risk of failure.

Let me give you another example. For a new software company the risk mitigating milestones might be:

  • Designing a prototype
  • Getting successful beta testing results
  • Getting the product to a point where it is market-ready
  • Getting customers to purchase the product
  • Securing distribution partnerships
  • Reaching monthly revenue milestones


The key point when it comes to raising money is this: you generally do NOT raise ALL the money you need for your venture upfront. You merely raise enough money to achieve your initial milestones. Then, you raise
more money later to accomplish more milestones.

Yes, you are always raising money to get your company to the next level. Even Fortune 100 companies do this - they raise money by issuing more stock in order to launch new initiatives. It's an ongoing process-not something you do just once.

Creating Your Milestone Chart & Funding Requirements


The key is to first create your detailed risk mitigating milestone chart. Not only is this helpful for funding, but it will serve as a great "To Do" list for you and make sure you continue to achieve goals each day, week and month that progress your business.

Shoot for listing approximately six big milestones to achieve in the next year, five milestones to achieve next year, and so on for up to 5 years (so include two milestones to achieve in year 5). And alongside the milestones, include the time (expected completion date) and the amount of funding you will need to attain them.

After you create your milestone chart, you need to prioritize. Determine the milestones that you absolutely must accomplish with the initial funding. Ideally, these milestones will get you to point where you are generating revenues (if you are not already generating revenues). This is because the ability to generate revenues significantly reduces the risk of your venture; as it proves to lenders and investors that customers want what you are offering.

By setting up your milestones, you will figure out what you can accomplish for less money. And the fact is, the less money you need to raise, the easier it generally is to raise it (mainly because the easiest to raise money sources offer lower dollar amounts).

The other good news is that if you raise less money now, you will give up less equity and incur less debt, which will eventually lead to more dollars in your pocket.

Finally, when you eventually raise more money later (in a future funding round), because you have already achieved numerous milestones, you will raise it easier and secure better terms (e.g., higher valuation, lower interest rate, etc.).

It might surprise you what you can accomplish with less money! So write up your list of risk mitigating milestones and determine which must be done now and which can wait for later, focusing first on what is most likely to generate revenues.

 

Suggested Resource: Want funding for 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.

 

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The Greatest Steal Ever


 

I grew up watching Larry Bird. My dad was a huge Boston Celtics fan (which is relatively odd considering he grew up in New York City). So, I became a huge Celtics fan too. And I was a big fan of the heart of the Celtics’ Larry Bird.
 
This guy never gave up.

In fact, if you watch this 40 second video - https://www.youtube.com/watch?v=H_RJ5XN8TK8 - you’ll see what I consider the greatest steal ever...

The Celtics were losing by 1 point with only 5 seconds left. And the other team had the ball. The game was essentially lost. But then Larry Bird intercepted the inbound pass and passed the ball to Dennis Johnson. Johnson scored the basket and they won the game.

While Larry Bird’s steal was phenomenal, if his teammate Dennis Johnson wasn’t in the right place and didn’t execute on his layup, Larry Bird’s efforts wouldn’t have resulted in a win.

As an entrepreneur, you also need great teammates. Since you can’t possibly build a great company by yourself.
 
In fact, great entrepreneurs are more like Larry Bird the coach (who “hired” and coached his players into being the best they could be) than Larry Bird the player (who performed key tasks and made his co-players better).
 
The key is this -- you need to find, hire and then train and coach the best people. Because there are TONS of bad people. I learned this very early on at Growthink. Years ago, I generally gave people the benefit of the doubt. If they said they could do something, I figured they could. And then I quickly realized that some people “have it” and some people don’t.
 
I think “having it” is the quality of people who “do what they say and say what they do” and always try to do their best. You want people who “have it” and at the same time people who are qualified and uniquely skilled at the position you need to fill. For example, while I believe I “have it,” there’s a whole bunch of positions that I’m not qualified to fulfill or which wouldn’t inspire me to do my best work.
 
So, how do you find these great people who “have it” and possess the skills you need. Here are my recommendations:
 
1. Event Networking:
great people have several common traits, one of which is their dedication to ongoing education. That’s why great people generally go to events and conferences. You also need to go to these events, where you’ll find some very talented individuals.
 
2. Being Sociable:
I’ve heard lots of stories of people meeting people at sports events, supermarkets, on a plane, etc., and striking up conversations that results in great hiring decisions. I must admit that I’m not the most sociable person outside of work; but I’m getting better at this.
 
3. LinkedIn:
LinkedIn is a great online network to find qualified people to come work for you. Join relevant LinkedIn groups to find folks with similar interests and who are looking to further their careers. And reach out to the best ones.
 
4. Recommendations & Referrals:
Oftentimes the best hires are the ones that were recommended to you by friends and colleagues. Send emails out to your network and advisors asking if they know someone with the skills you need. People generally only recommend people that they believe are competent, since their own reputations are on the line.
 
5. Executive Recruiters:
while this will cost more money in the short-term, executive recruiters (also known as “headhunters”) can find you great candidates. This is what they do. Importantly, they will often find you people who aren’t actively looking for a new job. These are often the best folks. I mean, would you rather hire an unemployed person looking for any company that will take them, or someone who’s thriving at a company but sees great opportunity in helping you grow your venture?
 
Importantly, in its relative infancy, eBay used executive recruiting firm Kindred Partners to find and hire Meg Whitman. Whitman turned eBay into a multi-billion dollar company and herself into a billionaire.
 
Using one or more of these five tactics will get you qualified job candidates. But, before you hire any, I highly suggest you give them two tests as follows:
 
1. A skills test:
whenever possible, you should test the skills of the job candidate. If you are hiring someone for a research job, give them a research assignment. If you are hiring someone to be a receptionist, do mock calls with them. Etc. I realize that for some jobs, it may be harder to test, but get creative since you want to make sure they will be able to perform.
 
2. A culture test:
if someone comes highly recommended and passes a skills test, it still doesn’t mean they’re the right hire. They MUST match with your company’s culture. For instance, if they’re a stiff, and your company thrives on fun and creativity, then they’re not the right match. Your company culture is critical, so don’t ignore this key test.
 
Hiring the right players for your team is critical to your success. There are no wildly successful 1-person companies that I know of. Imagine for a moment if you had a dream team; a group of employees that were so talented your competitors would be in awe. How good would your company become? How much faster would you accomplish your goals? How great would it be to come to work every day? Think about your answers to these questions, and then start building a great team and a great company today.

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The Two P’s Behind Michael Jordan’s Success


 

Earlier this month, the Milwaukee Bucks basketball team was sold by Herb Kohl for $550 million. What’s interesting was that in 2003, Michael Jordan was interested in investing in both the Milwaukee Bucks and the Charlotte Bobcats. However, for his $50 million, neither organization would give him managerial control.
 
So, Jordan passed on the opportunity to invest in either. However, over the following seven years, the Bobcats imploded and Jordan was able to purchase the entire team for $175 million in 2010. Since then, with full managerial control, Jordan has turned around the Bobcats team (the team made the playoffs this year for just the second time in history). As a result, the value of Jordan’s investment has gone way up. In fact, it’s most likely considerably higher than the $550 million just paid for the Bucks.
 
So what is it about Michael Jordan that’s made him succeed in both sports and business?
 
My answer: Preparation and Practice
 
According to the book "How To Be Like Mike: Life Lessons About Basketball's Best," as a player, Michael Jordan's practice habits and conditioning regimen amounted to an "almost alarming harshness."
 
In fact, many experts, such as Florida State University professor K. Anders Ericsson, argue that practice continually trumps talent.
 
Prominent examples of success attributed to continuous practice besides Michael Jordan include:
 

  • Bobby Fischer: While Fischer became a chess grandmaster at the young age of 16, he had nine years of intensive study and practice beforehand.

  • Warren Buffet: Buffet is known for his extreme discipline and the significant time he devotes to analyzing the financial statements of organizations in which he considers investing.

  • Winston Churchill: Churchill is widely considered one of the 20th century's best speakers. Historians say he compulsively practiced his speeches.

  • Tiger Woods: Tiger developed rigorous practice routines from an extremely young age, and devoted hours upon hours each day to conditioning and practice in order to improve his performance.

 
As you can see, and as is pretty intuitive, preparation and practice are keys to success in sports. And in business, it’s the same.
 
Consider these examples that entrepreneurs often face:
 

  • Developing your business plan? Make sure you prepare the right information. Conduct solid market research to ensure your market opportunity and strategy are sound.

  • Giving a presentation to an investor or prospective client? Be sure to spend significant time preparing. Make sure you develop the right slides. Make sure you practice it and deliver it smoothly. Make sure you’ve anticipated the questions that might arise, and have answers for each.

  • Meeting with an employee to improve their performance? Make sure to prepare your list of items in which they are doing a good job, and a list for which they must improve. Practice delivering the information and prepare answers for questions they might ask.

  • Holding a company-wide meeting? Make certain you have a clear agenda. Prepare an outline to follow and a list of key points you need to get across. Practice delivering your presentation to get the greatest impact.

 
Importantly, for these and other business situations, think about your goals. What is the goal of developing your business plan? What is your goal of presenting to an investor or prospective customer? And so on. Having these goals clearly in mind when you prepare and practice ensures you prepare for the right outcomes.
 
Legendary football coach Vince Lombardi once said, “Practice does not make perfect. Only perfect practice makes perfect.” Perfect practice means you’ve done your preparation, for instance, learned what perfection is. And both on the sports field and in your business, doing the right preparation and practice will pay significant dividends. So, be sure to make preparation and practice a part of your daily routine.

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Kickstarter Surpasses $1 Billion in Funding


 

On March 3rd, Crowdfunding platform Kickstarter announced that is surpassed $1 BILLION in funding pledges. That’s $1,000,000,000 in funding for entrepreneurs.

Very interestingly, Kickstarter included lots of interesting statistics on these crowdfundings as follows:

  • 5.7 million people funded these projects (versus less than 1,000 active venture capital firms worldwide)
  •  
  • More than half of the $1 billion was pledged in the last 12 months alone
  •  
  • The 5,708,578 people who have backed a Kickstarter project represent 224 countries and territories, and all seven continents
  •  
  • These are the top Countries & Territories by dollars raised: 
    •  United States: $663,316,496
    • United Kingdom: $54,427,475
    • Canada: $44,913,678
    • Australia: $31,776,566
    • Germany: $21,607,047
    • France: $10,131,159
    • Sweden: $7,150,257
    • Japan: $7,139,419
    • Netherlands: $7,033,026
    • Singapore: $6,710,981
  • 1,689,979 people have backed/funded MORE than one project
  •  
  • 15,932 people have backed/funded more than 50 projects
  •  
  • $619 million has been pledged by returning backers


Those are some very impressive numbers. And they ONLY represent one Crowdfunding platform. If we start adding other platforms, like IndieGogo, RocketHub, etc., the amount of Crowdfunding dollars raised and the number of backers skyrockets further.

And, perhaps most importantly, the trend for entrepreneurs is extremely positive as Crowdfunding is growing rapidly. Recall what I wrote above -- “more than half of the $1 billion was pledged in the last 12 months alone.” Now consider that Kickstarter launched on April 28, 2009.

That means that from April 28, 2009 to March 2, 2013, a nearly 4 year period, a half-billion dollars was raised on Kickstarter. They then raised the same amount in just the last year.

The fact remains that Crowdfunding is here, is here to stay, and is only growing. This is truly a blessing for entrepreneurs and is probably making right now the best time in history to raise money for any company. So, if you need funding, what are you waiting for?

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How To Raise Money Like a Billionaire


 

Even billionaires need to raise money. Take Donald Trump. Each time he launches a new real estate project, he raises outside money for it. Why? Because why should he only invest his own money? Rather, Trump and other billionaires understand the importance of leveraging other people’s money.

So, what do billionaires like Donald Trump do to raise money? Below are five key tactics billionaires use, and perhaps more importantly, that you can too.

1. Leverage Relationships


Billionaires have lots of relationships that they leverage when seeking capital. They access their networks by telling them about their latest project and their funding needs.

You too have relationships. You have current and/or former bosses, co-workers, counsel (e.g., accountants, lawyers, etc.), family friends and so on. Leverage these relationships when seeking funding. Even if none of your current relationships can invest directly, some certainly know and can introduce you to others who can.

2. Get Creative on Deal Terms


A great investment makes sense for both the investor/lender and the entrepreneur. Oftentimes, in ensuring the investment works, you need to get creative on the deal terms.

For example, maybe you give the investor a small equity percentage in your business, monthly repayment of some of their investment, AND a small percentage of your venture’s future sales. While most investments only include one of these funding options (e.g., debt/loan, equity, or royalty payments), there’s no rule that you can’t get creative and combine deal terms. And when you do, you often make your deal/company more appealing to investors.

3. Sell Investors on the Opportunity


Regardless of how good your company or investment opportunity is, you need to “sell” it to investors and lenders. Billionaires like Donald Trump must also do this. For instance, Trump constantly convinces investors why his newest venture will be a huge success.

Marketing yourself and your company to investors is a crucial part of raising capital. You must prove to investors why your company will be successful and that they will get a solid return on their investment. Importantly, when “selling” investors, get specific. For example, don’t just say you will succeed because you have the best management team. Rather, explain the precise credentials of your team that make you the best.

4. Don’t Take Rejection Personally


Billionaires like Donald Trump have been rejected hundreds of times in their money-raising careers. The fact is that your investment is never right for everyone.

You must accept that you will get more “no’s” than “yes's” when raising money. Importantly, don’t let the “no’s” get to you. Remember that you only need one “yes.” So, even after 10 “no’s” or 25 “no’s” or even 50 or 100 “no’s” you need to keep going and persevere.

If you truly believe you have a great company or opportunity, and that it can provide a solid return to your investors/lenders, then never back down.

5. Strategically Incorporate Investor Feedback


When investors say “no,” use the opportunity to gain feedback. Specifically, ask them why they didn’t want to invest. Sometimes it has to do with your deal terms. Other times it has to do with concerns about your business or business model.

It is important for you to strategically assess this feedback. Don’t blindly follow the feedback or advice, as it may or may not be correct. But particularly if you hear the same feedback from multiple investors, you must strongly consider what they are saying. If multiple investors, for example, say your management team isn’t strong enough, then it’s generally time to agree with them and immediately start to bolster your team.

Similarly, when billionaires like Donald Trump have trouble raising funding, they modify their project and/or deal terms to better adhere to the needs of investors and/or lenders.

Summary


In summary, raising capital is essentially a partnership between you the entrepreneur and the sources of funding you seek.

The larger your network, the more potential funders or referrals to funders you have. After that, it’s about creating and selling an opportunity that funders can’t resist. Never give up, but also, don’t be stubborn -- realize that feedback from those who say “no” can often be invaluable to your ultimate success!

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The Rapid Rise of Crowdfunding


 

Every year I make predictions. I predict who will win the Super Bowl. I predict who will win this election or that. And so on. Like most people, sometimes I’m right. And often I’m wrong.
 
However, I rarely if ever make predictions publicly. Unless, that is, I am extremely confident my prediction will come true. Maybe this is a psychological flaw; that I don’t want to feel publicly humiliated by making a wrong prediction. If it is, so be it; the fact is that I only make public predictions when I’m close to certain they’re right.
 
In fact, my last public predictions came nearly 4 years ago today. On that day, in an email to over 80,000 entrepreneurs, I predicted that Crowdfunding (which had just begun) was going to be huge. It turns out, I was right.
 
1) The Growth of Crowdfunding


 
When I predicted the success of Crowdfunding in 2010, it wasn’t even an industry yet, so there are no formal statistics on it. But as you can see in the chart above, $1.5 Billion was raised with Crowdfunding in 2011. This amount increased by 80% in 2012 to $2.7 billion. And then from 2012 to 2013, Crowdfunding increased by 89% to $5.1 billion.
 
2) Why Crowdfunding Has Taken Off

There are several reasons why Crowdfunding has succeeded.
 
One reason might be that we are becoming more and more of a consumer society; which is defined as a society in which the buying and selling of goods and services is the most important social and economic activity. People simply like to buy things, and investing in a company is a type of buying.
 
Another reason is probably that people want to belong and be part of something. By investing in a nascent company, you essentially become part of it. If it succeeds, you were there from the beginning. That’s exciting!
 
Another reason is that we more and more live in an entrepreneurial culture. Entrepreneur success stories, like Mark Zuckerberg and Facebook, are now mainstream media. Top entrepreneurs have gained the public status formerly only occupied by actors, musicians and athletes. Likewise, television shows like Shark Tank have positively shined light on entrepreneurship.
 
3. Will the Growth of Crowdfunding Continue?

 
Yes, I am 100% confident that Crowdfunding will continue to rapidly grow. Here’s why. While the JOBS was signed in April 2012, it did not allow for equity-based Crowdfunding until the SEC approved certain regulations. Some of those regulations have since been approved. For example, "accredited investors" can now make equity-based Crowdfunding investments. But non-accredited investors still cannot. When this changes (which is expected later this year), and the general public can invest, the Crowdfunding market should grow like wildfire.
 
4) How Can You Take Advantage of the Rapid Rise of Crowdfunding?

 
To raise Crowdfunding, do the following:

1. Follow the 14 Step Formula

Below are the 14 steps I teach in my Crowdfunding Formula course that are critical to successfully raising donation or rewards-based Crowdfunding.

1. Choose your Crowdfunding platform
2. Create an account
3. Create your funding project
4. Categorize your project
5. Create your project tagline
6. Create your project teaser text
7. Create your full text project summary
8. Determine the right fundraising amount
9. Determine the right donation time
10. Develop your list of rewards
11. Create your project visuals
12. Create your project video
13. Promote your project to your network
14. Maintain and update your project

2) Become a Great Marketer

No matter how good your idea is, you will need to market it to others to get them to invest in it. A good analogy is this: every day thousands of people release videos hoping and thinking they will go viral, but they don’t. Even if their video is great, they need to get it in front of a bunch of people who watch it, like it, then spread the word.
 
In 2010 I called Crowdfunding the most exciting thing that’s happened in the entrepreneurial space since the first venture capital investment was made in the 1950s. Crowdfunding is helping entrepreneurs raise money and gain customers, and more and more Crowdfunding success stories will be featured in the media in the coming days. Hopefully it’s you they’ll feature!

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