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PEOPLE make start ups profitable. Period.

August 26, 2010 3 comments

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I’ve worked in 4 start ups and been successful 4 times. I define success in a start up as the company becoming profitable as well as a “going concern” business.

While my ego would like to think I can attribute these successes to my own intellectual superiority, I have become more of a realist. There have, however, been 3 constants to these successes and now consulting for numerous start ups, I’m shocked to find the minimal time and thought that goes into what I consider the initial recipe for success.

A strategic and well thought out human resource initial plan will

1. Hiring on 4 traits

Always list these 4 criteria in order of the ‘traits possessed’ for your potential hire:

Education
Motivation
Experience
Innate Intelligence

The order that will bring you a successful candidate in a start up world;

Motivation
Innate Intelligence
Experience
Education

What does this mean? It means that someone who is tenacious, ambitious, has unparalleled work ethic while also having the ability to make good decisions and think ‘outside the box’ is going to be far more valuable than the “MBA who has worked in corporate America for 5 – 10 years”. Certainly, there are roles for these folks, but not in the core of your start up executive, senior, or middle level management teams.

2. Sacrifice is KEY

Offer a very minimal base salary – regardless of the role. PAY FOR SUCCESS ONLY.

When you have team members that are confident enough in their abilities that they agree to being tied directly into accountability metrics to get paid, you have people who are ‘bought in’. Take the time to develop a monthly accountability plan. It may take you a couple hours to develop the ‘right’ plan and another hour to explain it to a colleague, but it will drive millions in revenue over time; as well as cut costs.

3. CUT THE FAT

Stop hiring people who do not have the ability to act in numerous roles. Oftentimes, I see start ups where executives can play numerous roles; they can develop and drive strategy on the marketing side, but also be an operator if needed – and most times a salesperson as well. Then when it comes to hiring senior and middle management, ‘executives’ seem to think that they should each have a vertical of employees reporting to them. Forget the vertical. Find senior and middle managers who can play multiple roles as well. YOU WANT TO HIRE MINI C.E.O.s.

For example, you don’t want just a ‘director of creative’, you want a creative designer who can design, code, has an e-commerce and technology background, can manage websites, QA the site, and has the operational background to project manage anything in your marketing department. Many start ups hire 1 “director of marketing”, 1 creative designer, another technology person. Find someone with all of these skills.

Another example; do not hire a “director of sales” or “director of marketing”…Hire a “director of revenue driving operations” or a “rain maker”. Find someone who can negotiate deals and don’t only use them on the business development side; use them on the marketing team as well – to work on marketing negotiations. If the individual is “innately intelligent” and “motivated”, they will pro-actively learn about all areas of your business (motivation) and adapt their skill sets quickly based on the knowledge (Innately intelligent). Combined with creative deal making and negotiation skills, you want your ‘revenue driver’ to also have had an operational background – who needs a sales / marketing operations person? Until you’re profitable – it’s a waste.

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Does 10,000 Hours Make the Best Businessman?

July 9, 2010 2 comments

In Malcolm Gladwell’s book, Outliers, he talks about the rule of 10,000 hours. He cites researchers agreement that “10,000 hours of practice is the optimum time needed to gain expertise”. He goes on to demonstrate in a myriad of industries that all experts in a field have a minimum of 10,000 hours working or practicing in that field. He cites The Beatles, violin players, Bill Gates and software programming, and numerous other examples.

He does not, however, tie this into any sales, marketing, or other businessmen. Does this ‘rule’ hold true when applied to business? If yes, it would certainly show that “experience” is the #1 factor in determining job hires an success rates; but we know experience is not the #1 factor. I believe that the 10,000 rule can translate to business, however past the point of 10K hours, there is likely little difference in someone who has worked 100K hours vs. 50K hours. At that point, it would be more about innate ability and ambition.

In going back to Gladwell’s book, his examples all talk about “practice”. The Beatles “played” for 10K hours, Bill Gates “coded” for 10K hours…so I’m wondering, how do we “do” 10K hours of business? Does this mean 10K hours of work in 1 area? 10K hours of work researching? I look at myself and executives tell me my ‘best’ skillset is sales. Well, I started to sell when I was 18 and had my own business in college; is that why I’m more successful now than the majority of people my age? Did I hit that 10K hour mark sooner?

I’m not sure about me; but I am sure that I would like to figure out how to go about getting 10,000 hours in each business area – so this will be my next conquest.

What Good is a Start Up Company if You Run it Like a Corporation?

June 16, 2010 8 comments

It’s not good. period. I should probably start by telling you what I think of as a corporation: 1) Sign offs 2) “strategic plans” that cannot be altered in a moment’s notice 3) High level executives who want to ‘stick with what they know’.

In my first start up, we went completely outside the box and did things that had never been done before. We didn’t listen to other people’s opinions, but like the book BLINK says, we went with our gut…and we got it right. We had belief in our product (leads), we were able to sell our product, and our CEO / COO that ran the marketing component of our business were not limited by norms. To be more precise, they went against the norms. We ended up with two things: 1) Profitability in under one year 2) A new business model for our industry. If we had been running our business trying to stick with what we knew, not changing or testing things on the ‘fly’, and not listening to the younger / less experienced folks in our organization, none of this would have occurred.

Taking “C” level executives from the corporate world and throwing them into a start up business is not a good thing unless there is balance. If you have 3 “C” level or “VP” level employees from ‘corporate’, they should be balanced by those of us who have succeeded in the ‘start up’ world. There is a reason the same people are successful in start ups again and again and again; they have great business instincts, have no fear, and are tenacious. When they try something that is “outside of the box”, they’re going to do whatever it takes to make it work. They’re out to prove their model. In many companies, they would likely be defined as “rebels” as they may be superstars, but many of their ideas are viewed as outrageous.

Start up people need freedom. They need freedom to make decisions and freedom to act on decisions within a short time frame. Not everything must be laid out in a “plan”. If something works, SCALE IT…and scale it immediately before your competitor does.

Where did this come from? Many companies I work with have solid products…not disruptive technology and neither are all business models different, but the products can certainly beat out that of their competitors. Most have high level executives who come from ‘corporate’ backgrounds; certainly brilliant and experienced in their respective areas, but ‘corporate’ nonetheless. At times, I’m hired to consult in one area that I’ve had immense success in; marketing for higher education. Under the marketing umbrella, many times I’m hired to execute on ONE aspect of that strategic marketing plan. I attempted to remain focused on that specific ‘goal’ and as I’m was executing, it becomes apparent that there are secondary strategies needed to supplement what I was doing. It’s low risk / low cost. I put it out there for the companies to evaluate. Response, “We’ll think about it”…and you could tell the companies weren’t ‘really’ going to think about it. Think about it? 1) Who thinks about anything in a start up? Think about it for 5-10 minutes maybe…and get back to me with an answer. It would be less than a $2K test. I wanted to say, “if it doesn’t work, take it off my paycheck…” but surprisingly keep my mouth shut. 2) DATA. Past data from the same exact type of campaign shows that my ‘gut’ instinct was correct. I guess I should have sat down and made a formal “business case” for what I wanted to do, but it’s a start up – who has the time?

Anyways, as a consultant – even if hired to focus on 1 area of the business…I consider it my “job” to advise on other parts as well. I don’t mind being told, “No”, if there’s a good reason…but for a cheap test, that’s 100% scalable, and historical data proves it works…I don’t want a “No” or an “I’ll think about it”. I want a “Go for it” – like a start up company with a “start up” executive team would do.

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Does Your Mentor Ever Leave You?

May 30, 2010 13 comments

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The smartest move I’ve made in my professional life was to take a salary cut.

When moving from my first “Corporate job” at 24 years old to my first “start up”, I took a pay cut. Why? I could see the value and ROI in a longer term investment. I left a company where I was the ‘best’ of about 1600 people to go back to the bottom. For what? I found my mentors. I found two businessmen who, between the two of them, encompassed everything I would ever need to be successful. What’s ironic about this is it is now about 6 years later and when I look back at those wondrous three years working with these two men, I remember what one used to say to me. He would say, “You should be paying ME for allowing you to work here because you are learning more than you would be in any MBA or Doctorate program”. Looking back now, he was right. I should have been paying him. Everything he taught me, everything I watched, the meetings that I had become a part of; he truly taught me not only how to build a business, but more importantly – how to build and successfully manage the people in that business. He was the best sales and marketing individual in my industry and I was his sponge.

His counter part, my other mentor, had quite the opposite skill set. He was master in operations and finance (yuck). That said, “if you want to run your own business one day, you have to be able to have worked in all areas of the business that you will be running”. I did. I learned operations, I learned finance; and I even learned to like and see the value in both.

So, a year after leaving that business, there are so many lessons and conversations that run through my head daily, sometimes hourly. I feel that everything I do has their “mark” on it because they taught me to be the business person I am today. Looking back through this blog, most of my posts are things I’ve learned from them; and in my everyday life…their faces and voices run through my head constantly. To share a few of the key learnings:

1. Hold yourself accountable – don’t play blame games and don’t ever blame anyone else for something that is in your domain. If something goes wrong in your department or on your project, OWN UP TO IT. While your manager or boss may be angry, they are going to respect you more for coming to them vs. hiding it from them and trying to fix it on your own. Most importantly, take a step back and learn from your mistake; explain your learnings to your boss when owning up to your mistake.

2. Get out of your comfort zone – if you’re good at something, congrats! Now…GET OUT! If you’re comfortable in what you’re doing, you’re dead; you won’t grow anymore. Figure out ways to either scale what your doing, train what your doing, or change it in some other way. If there are no changes needed, get out and do something different. Ask yourself, “would you rather be in the minor leagues as the best player for 10 years?” or would you rather jump into the major leagues; you may not be the best in the beginning, but you will get there.

3. It is the manager’s fault if someone is terminated or quits – LOOK in the mirror every time you lose an employee. If you cannot look in the mirror and say, “I’ve done everything in my power to keep this employee”, you’re not a good manager. People don’t leave companies, they leave managers.

4. Treat everyone as if they are your most important client – this means vendors, employees, bosses, etc. Everyone deserves to be treated with respect; you will get more production out of treating people with respect than you will berating them.

5. Don’t waste your time doing something that has been done before. If you’re not innovative, you lose. Developing the same business plan and just “doing it better” is a waste of time; your competition, the company that was there first, will rise up eventually. Do something that has never been done and always have a unique value proposition. It’s all about disruptive technology.

6. Your gut is great for ideas, tests, and innovation. Data is better.

7. Test everything you can make a business case for.

I could go on and on, but that’s not the purpose of this post.

Unfortunately, as with all good things – the relationship came to an end. Since that time, I’ve worked with so many intelligent and innovative people. I take minimal and sometimes do not even charge executives that I would like to work with, simply so I can learn from them.

Interestingly enough, I have yet to find anyone that I want as a ‘mentor’. Not like “before”. Perhaps this is part of growing up? I’m not sure. There are a couple people who I want to take bits and pieces from, but no one I would work for FT to become an all around “better me”.

As with any relationship, I’m beginning to see that I’m “comparing” everyone with the best mentors I’ve ever had. I remember doing the same with boyfriends before I got married…and I remember being told by everyone NOT to do so.

Also analagous to any other relationship, I think the foot prints that were left in my heart and my head from these men will be there forever; and it’s time to move on, take my experiences with them, and build upon them.

What I’m stuck with; Am I getting too “old” to work with people I will learn from so entirely? Do I need to be in the same organization / work with them to do so? More importantly, will a day in business ever go by where I don’t think of my first two mentors?

The Recipe to Become a Sought After Consultant

May 16, 2010 9 comments

50% Track Record
50% Relationship Builder / Networker

Is it really so simple?

Under each of these areas are several bullet points / advice on how to mazimize each bullet point; but once you hear my story, I have proved this is the recipe for a thriving ‘restaurant’.

While I was working in the corporate world, I always did projects on the side; pro bono. Sometimes they were internal, sometimes helping partners I was working with (relationship building), but always seeking to build 1) my knowledge base 2) My network. I also always wanted to prove to myself that I couldn’t “only do” what was needed in my day to day jobs; I wanted ‘practice’ with other industries and the experience of working with different executives.

When I left my most recent company (about 5 months ago), I was going to take a few month “break”, as I’ve been working 80 hour weeks for about 8 years now, but didn’t have the chance. As soon as “word got out” that I had left a company, my phone was ringing; my email was flowing. Companies that I had ‘partnered’ with in the past, prior colleagues, they all had projects for me. I certainly wasn’t going to say “no”, but I did need to learn the consultancy market in about 3 days…which of course, I did. I was truthful with the people I called and asked how they ‘normally’ pay consultants. The same 4 or 5 options were out there, so I adopted each to diffferent projects and was on my way. Here is where and how I’ve found success and clientelle – with no direct response or branding marketing. As sad as this is…I haven’t even had time to put together a website. Go figure.

Part One: Track Record

Under this category lies several things that companies love to see.

1. Obviously the successes in each of your positions or endeavors. While this is important to put on your resume or linkedin page, what I’ve found is that my track record of MISTAKES (when speaking to companies) has worked equally as well in my favor. My explanation – “I succeeded in ‘X’, but would not have done so had I not made these mistakes…which I learned from and constantly adopt in my new endeavors”.

2. TYPES of companies worked for:

one suggestion I have for anyone who is entrepreneurial, ambitious in business, and wanting to really learn how to build a company is to work for a start up company. This shows executives at companies several things (dependent on your role and in what type of company). Just to be sure we’re on the same page; when I say, “start up company”, I am referring to a company that is IN THE RED with minimal employees.

First, it shows that you are willing to take RISK. Important for someone hiring a consultant for 2 reasons: 1) The company will not be ‘afraid’ to give you something as a project 2) The company and consultant can create different deal types that puts the onus on the consultant to get work done. It’s allows the consultant to take on a ‘pay per performance’ model, which companies love.

Second, it shows that you have likely worked in an environment where you have had to wear a myriad of professional ‘hats’. For example: while you may have held a “biz dev” role, the likelihood is you also probably had to learn the ‘sales operations’, developed the sales process, the documents, even the ‘creative’ to send out to clients. That is three other skillsets other than biz dev: Operations, BPI, and marketing / creative development.

Third, it shows you are tenacious with a phenomenal work ethic.

Fourth, The “best” type of start up you can work at…one that is “doing something that has never been done before”. If you can work for that company in a managerial role and move up to an executive role while there; AND be there while the company is successful, going from the “red” to a “black” going concern…you’re a golden child.

Another great type of company to work for is one that offers continuing professional and management development courses. While there are some “large” Fortune 100 companies that put you in a position, teach you about that position, and ‘call it a day’; there are others that invest heavily into bettering their employees. You’re looking for a company that seeks promotion from within as well as one that values the education of their employees.

A third company that will help what others view in your ‘track record’ is one that may not be a start up, BUT is constantly building out new smaller businesses, departments, concepts, products, etc. If you can become part of that “new” team, fantastic experience as well.

Start up businesses seem to be the place where most consultants are sought out, so let’s talk about the type of person you have to be to not only enjoy this role, but be successful in it. This takes a particular type of individual, so before you jump on that, let me explain attributes needed. Start ups are NOT for everyone.

1. The vision to identify the “right” start up. Don’t kid yourself; this is a gift and a skill set. As 95% of start up companies fail, you need to learn how to identify the ones that “have a high chance of success based on the market, product or service, and executive team. If any one of these components are not at 100%, your business will fail.

2. The “NO FEAR” attitude. You are going to be placed outside your comfort zone 75% of the time. That’s the FUN of the start up! You cannot be scared to do something you’ve never done before, you cannot be scared to share your opinions even if everyone else is countering it, you cannot be scared to work 100 hours / week, and you certainly cannot be ‘scared’ of success or failure.

3. Passion; you must be passionate about the mission of the company. If you are a person who is typically not ’emotional’ or does not get “attached” to their job or feel loyalty for their product, service, or team members; this may be a tough transition for you.

To Be Continued This Eve

10 Days in Europe: No “Work”, But Much To Learn – Any Suggestions?

April 29, 2010 7 comments

I leave today for Europe for 10 days. No sales, no marketing, no business. Ok, who am I kidding? I will definitely be on the computer a couple times the first few days I’m in Barcelona and on the 11 hour flight, but WILL NOT be on during the Mediterranean cruise.

I’ve realized over the past several months that it’s not only “work” or “driving revenue” that I love, but more so, it’s learning. Learning different ways to work with people, different ways to make money, creative / outside of the box / innovative ways to market on the internet that has not been done before.

I take this zest for learning and bring it with me to Europe. I’m certainly interested in the history, the sites, and the cultures. While I’ve been before, that was 8 years ago and I’m guessing my view will be a bit different now.

I look forward to immersing myself in the culture to really ‘see’ how the global marketplace responds to different types of online advertising. I’m interested to hear how many folks in different areas are using social networks. I’m looking forward to bringing back new / different ideas that I pick up that have not yet been executed on in the United States.

I’ll be in Madrid, Barcelona, Sorrento / Naples, Rome, FLorence, Nice, Cannes, and Monte Carlo.

If anyone has suggestions for sights, I’m all ears…if anyone has suggestions for areas I can learn about the culture and possibly the global economy, I’m all ears. Please feel free to comment or shoot me an email.

Treat Everyone As If They’re Your Most Important Client

April 28, 2010 2 comments

First rule of business, or specifically – business relationships is; “treat everyone as if they’re your most important client”. I believe it was my old COO who gave me that advice and he had taken it from one of the classic business books, Dale Carnegie’sHow to Win Friends and Influence People“. If you are in business and have not read that; you should.

If you are managing people, relationships, sales and marketing managers, anything that may cause you human interaction at some point; if you follow the principles laid out in this book, you can’t go wrong.

Some people may read this and roll their eyes and say, “BUT I’m the client. They should be kissing my ….”. So let’s look at a couple of simple scenarios.

1. You’re a marketing manager and you’re purchasing ad space on a website. You are on the phone with this site’s biz dev. executive and you love the price as well as the site. The one ‘glitch’ is that because the site is “newer”, there are no real time stats; hence, you are unable to tweak creative or even pull the ad if need be. There are several potential longer term solutions to this, but in the ‘short term’, what do you do? Do you A) Not work with the company B) Tell the Biz Dev exec you “cannot work with them unless you have real time stats” or C) Explain to the biz dev exec. that “you are in a ‘partnership’ together and in order for this to be a “win/win” for both of you; you are accustomed to being able to see your stats and make changes real time.” You then ask, “How are other companies dealing with this” and / or “Do you have any suggestions as to how we can work together to combat this?”.

Most of us will read the line above and say, ‘option C’. However, in the ‘real world’, ads are pulled all the time for lack of reporting. Those selling ad space get yelled at all the time for not giving stats. Is this a business relationship that will continue in a positive manner in the future if we go with option A or B? Definitely not.

2. You are a manager. One of your team members comes to you because they have an issue with another member of the team. What they are ‘complaining’ about, you’ve heard 100 times before. In your head, you’re immediate reaction is: “I don’t have time for this crap”. However, this is one of your top employees. Best way to handle this? Ask questions and find out the root issue. Is this individual complaining because he / she is insecure? Are they in need of some attentions / positive reinforcement? Have they just had a bad day? Take the extra 5 minutes to listen (as you would your most important client). Sometimes all people need to do is ‘vent’. That extra 5 minutes could be a ‘make it / break it’ for that employee.

So, how do you treat everyone as if their your most important client? Well, first you have to ensure you treat your clients well; or that your outlook on how to treat clients is correct. We can boil it down to a two key tactics: 1) Respect 2) Empathy.

In management, the best managers ‘treat people as they would like to be treated’. Cliche? Yes; but also true.

More importantly; be empathetic. Whether it be a vendor, an employee, a colleague, or even your boss coming to you with an issue, don’t snap back a response. Take a step back and put yourself in their shoes for a moment. Try and see the situation as they do before you respond.

If we all just took 10 seconds before responding and we put ourself in another’s shoes; we are empathetic, more likely to be respectful – and this will probably treat the individual as if they’re you’re most important client.

Boredom; and what to do with it

April 22, 2010 8 comments

I’m bored. Most people’s response would be, “you work, you make good money, you can work whenever you’d like, you have the life!”…but not for me. I’ve gone from 7 years of working 80 + hours / week to working maybe 20 hours / week. While I understand this is ‘supposed’ to be something I’m appreciative of; the “American Dream”, right? Making more than enough money while doing what you love WHEN YOU want to do it. BUT, something is missing.

I don’t know if I’m missing structure; if I’m missing the “buzz” of hundreds of sales reps and marketing managers; the ‘team’ or social aspect of work; or it may even be the stimulation of being surrounded by highly intelligent people, but I’m bored. I’ve read books, read blogs all day (which has been a fantastic way to learn / broaden my horizons, etc), I start my Six Sigma course next week, but….I think I need to get something going. I need more of a long term goal.

So, I’ve defined my professional goals as follows:

1. Sign 6 month contract / consulting retainer with lead gen marketing company
2. Broker 2 new deals per month
3. Complete Six Sigma Course
4. Seek out new mentor

My personal goals:

1. Continue to work out daily, overall be healthy
2. Travel once / month
3. Seriously talk about getting PG
4. Make Mark happy

Ok, so I thought I would lay out these goals and it would give me something to do…NOPE. Any suggestions?

Consultants; Why Some Make it…and some CRASH

April 19, 2010 10 comments

When I stopped working FT a few months ago, I wasn’t sure what direction I was going. Three schools of thought: 1) Start my own company. 2) Be a consultant 3) Get another job.

I knew I didn’t want another FT job (at least not right away) as I’m a ‘start up ‘ junkie. I like to build businesses, departments, strategies, and ideas…and then take from conception to “LIVE”; and make them profitable. So that left me with either my own business or consulting. I realized, the two did not need be mutually exclusive. So, while building a business plan, I’ve been consulting and contracting. As higher education, specifically online higher education, is an incestuous industry; as soon as word got out, the phone calls and requests came in. It seemed that this would be easier than I thought – at first.

I quickly realized that to be successful in consulting, to be referred, and to work with numerous clients, it would take a lot more than a great past track record. It would take patience (something I don’t have much of), discipline to NOT take every job offered, and more so, this was yet another great experience where I was learning to ‘check my ego at the door’. In return, and the reason I love consulting, I was learning just as much from clients as they were learning from me. I quickly took the revenue driving sales and marketing strategies I had employed in higher ed and took them across numerous verticals.

So, why do some consultants make it? Why are there some of us that get repeat business while others may spend weeks or months marketing themselves and get nothing? Very simple answer: PAY PER PERFORMANCE CONSULTING.

So how does that work? Well, it depends on what you’re consulting on. However – there is one thing we can agree on: companies would rather YOU take the risk than them. We can also agree that if a consultant came to me and said, “I’m so confident in the strategy I lay out for you that you only have to pay me if I execute on it and execute well enough to hit the revenue goals you have set forth”. Why would a company EVER say NO? I know I wouldn’t. There are, however, many of us, that do need that “month to month” paycheck. You can look at this in 2 ways: 1) You can map out your beginning projects as if you are in a start up company. So, you map out your consulting KNOWING you will be “in the red” for 3 months; or until your projects start ‘making you money’. Who better to make an investment in than yourself? 2) You can charge a ‘small’ up front fee…maybe “min. wage” per hour…and get most of your money on the back end while still having money to live on the front end. Every project or consulting assignment is different, however by being paid on performance, you are not only showing your confidence, you are also ensuring yourself you will not take on anything you cannot handle OR if you do choose to take on something you cannot handle, you will make certain that you partner up with one of the best in the industry to learn.

It’s very simple in sales / marketing to set goals and only be paid if the goals are obtained, but what about other industries that have a large number of consultants or companies vying for the same business. Broken down below are 5 areas where I see a lot of consulting and how you can structure your pay on a performance basis.

1. Web Design / Development
– May be held accountable for a) web stats b) number of sales on site c) stickiness of site

2. Free lance copyrighting
– May be held accountable for a) Amount of time user spends on page b) Drop off rate c) CTR

3. Career Coaching
– May be held accountable to getting someone the job they can succeed and prosper in

4. SEO mapping / content development
– May be held accountable to page rank in “x” amount of time

I know there are many more, but these are ones I see the most often on the networks that I am on. As with anything else; if you need work, you need to take some risk. If you’re good, you’ll be rewarded. Consulting models such as this are good ol’ capitalism at its finest.

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