High-Impact Entrepreneurship

Reprinted from Ask the VC. See the original post here, by Brad Feld.

Rand Fishkin, the CEO & co-founder of SEOmoz, has an long, thorough, and incredibly detailed blog post up about The $24 Million Moz Almost Raised. Rand does an awesome job of providing extensive details while maintaining confidentiality of the participants.

The story covers the full lifecycle of the VC fundraising process, beginning with Rand and his teams’ discussion about whether or not to raise money. He documents the fundraising dance, including providing lots of juicy email correspondence to underscore his points. He lays out the numbers for his company, the terms for the deal, and his view of when he was negotiating effectively vs. stumbling around.

Ultimately he gets to a signed LOI and that’s where the fun begins (in the section titled “Then Things Got a Little Weird”). The deal ultimately falls apart and Rand does a nice postmortem where he speculates on what happened. He then wraps it up with how his team responded and what’s next for SEOMoz.

If you are an entrepreneur, go read this post now. It’s probably the best and most detailed description of the VC fundraising process that I’ve read. Well done Rand – on many levels. Even though this particular deal didn’t close, I love your statement at the end:

“What I can say is that this experience makes me and the rest of the Moz team even more inspired and motivated to build an amazing company. We can’t help but feel passion for proving doubters and naysayers wrong. The greatest revenge is to execute like hell, bootstrap all the way, and do what we said we’d do – become Seattle’s next billion-dollar startup, and make the world of marketing a better place.

I know we can do it.”

Reprinted from Quicksprout.com. See the original post here.

By Neil Patel

Do you want to get good at sales? Because if you do, there is a lot of money to be made. But before I can teach you how to sell, I need to first teach you what not to do.

If you want to make money through selling, you don’t have to be a great sales person, you just need to avoid these common mistakes:

Don’t forget to qualify

Before you can sell, you have to find someone to sell to, right? Whether it’s someone coming to you or whether you are finding someone to sell to, the first thing you have to do is qualify your potential customer.

If you forget to do the qualifying step a large percentage of your time will be wasted on potential customers who don’t really need your offering, or can’t afford it.

Every opportunity isn’t equal. Through qualifying you’ll get a better understanding of what each customer wants, when they want it by, their budget, and most importantly you’ll be able to figure out if you are talking to the person who can actually make the decision.

If you aren’t sure how to qualify people, all you have to do is ask them simple questions such as:

What are you looking for specifically?
What’s your budget?
When are you looking to start?

Don’t be a “yes” man

Do you know what the biggest sales mistake you can make? It’s not forgetting to qualify. It’s saying “yes”.

When a potential customer makes a request, you’re naturally going to want to say “yes.” And once you say yes a few times, you’ll realize that you’re walking on a slippery slope because the customer will keep on making requests and each one will not only cost you money, but it will let the customer know that they can be demanding and walk all over you.

If you can do what a customer wants and it is profitable for you, say yes. If the request is unreasonable, say no. By setting this precedent early on, you’ll have more happy customers.

When I first started selling years ago, I had a tendency to constantly say yes even when I couldn’t deliver. This caused us to have unhappy customers and it added unnecessary stress to the business. So don’t do what I did.

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Reprinted from www.under30ceo.com. See the original post here.

By Jeff Certain

Two years ago I was afforded the opportunity to work at a mid-size company as a full-time marketing manager. After ten years of as my own boss, the prospect of working with a group of intelligent marketers with actual resources, a steady salary, and a 401K was too much to turn down.

It was here, in the corporate environment, where I learned the true meaning of an intrapreneur, defined by the American Heritage Dictionary as “a person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation.”

The business landscape is changing and the recent downturn in the economy has forced companies to do more with less people. That means that employers are hiring innovative thinkers to solve age-old business problems in new ways. I asked my department head to elaborate: “An entrepreneur can bring a tremendous amount of value to a larger organization. Entrepreneurs, almost by definition, gain a variety of skills and learn to think on their feet and operate with limited resources. An entrepreneur is also someone who has developed a ritual of self reliance and accountability, and understands that to get something accomplished they will need to push the initiative.”

While my time in the corporate environment has been enjoyable, and for the most part successful, I have made a few missteps along the way. And so I humbly offer a few tips from my journey as an intrapreneur. Whether you are just entering the corporate fray or and an old entrepreneur at heart, these tips can help clear obstacles from your path. They are as follows:

1) No One is an Island

Know this: you will have to give up some independence in your transition from an entrepreneur to intrapreneur.

In your role as intrapreneur, you must depend on other people and internal processes to get your job done. The sooner you accept this truth, the happier and more productive you will be. Things are going to move slower than you are used to and that’s okay. Push the initiative forward, but follow the organization’s standardized business process. There’s nothing wrong with fighting for your ideas. In fact, this is probably why they hired you in the first place. Just keep in mind you are part of a system now, so take a deep breath and remember what it was like when you couldn’t afford printer ink because your client hadn’t sent the check yet.

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Reprinted from OnStartups.com. See the original post here.

The following is a guest post by Brad Coffey, an early employee at HubSpot. You can follow Brad on twitter @BradfordCoffey

Recently HubSpot was lucky enough to be included in the Inc. 500 list of fastest growing private companies. It’s a great honor, we’re really excited (and humbled) to be listed next to so many great companies. In an adjoinging article in Inc. Magazine, our CEO Brian Halligan discusses a key part of our success. He talks about our approach to experimentation and our methodology for incubating new ideas. What Brian describes is three tiered approach to promoting and funding unconventional projects. It’s a methodology that served us well thus far and helped create an innovation pipeline that offsets our traditional disciplined focus on the core business.

The foundation of this framework is based heavily on Clay Christensen’s work in The Innovators Dilemma. We’re huge Clay Christensen fans at HubSpot (even have a conference room named after him) and have been life-long students of his work. In his work Clay asks a very straightforward question without an obvious solution – specifically: Why do well managed, successful companies repeatedly fail to create new disruptive innovations?

This framework was developed fundamentally to combat that challenge and create a lasting culture of entrepreneurial exploration.

HubSpot’s Experimentation Framework

The framework has 3 stages, each with a distinct goal and approach.

Alpha – Lowering barriers to experimentation

No bureaucracy, no red tape, full access to information. This stage is simply focused on enabling anyone with energy and an idea to try a new solution. Tests are run by everyone and anyone – but are generally done in spare time (nights and weekends) and with few resources. You don’t need to ask permission to run these tests – and by design no one ever knows all the alpha stage experiments actively being pursued. It’s open and distributed.

Beta - Determining proper funding

When an experiment reaches Beta stage the ‘founders’ are fired from their day job and work on the experiment full time. While founders determine their own goals and metrics – these leaders are encouraged to be patient for growth but impatient for profitable economics. Like many founders these people also report to a ‘board’ regularly and are subject to evaluation on future funding. At its core this stage is about providing access to funding for entreprenurial folks with new ideas and transparency/accountability into the success of those early tests.

v1 – Scaling successful experiments

v1 projects have proven economics and now are looking to scale the success. Often this requires growing the team beyond the founders, building dedicated systems and developing regular tracking of core metrics. Founders with experiments graduated to v1 are now considered ‘mini-CEO’s’ and are tasked with running their project as a start-up within HubSpot.

We established this framework in the hope of driving innovation and empowering the entrepreneurial edges of our organization to create change. It seems to be working – we’ve had several successful founders graduate from the program (Pete Caputa with VAR program, Jordyne Wu with the Services Marketplace) and we created a culture to be proud of. It’s enabled us to focus on the core business without foregoing the entreprenurial engery and creativity of our team.

Reprinted from Under30CEO.com. See the original post here.

By Dianne Durkin

With competition for talent on the rise, developing a corporate culture of employee engagement and commitment has become a foundational imperative for most organizations. Creating and maintaining a high-performing workforce is at the core of nearly every business strategy, and the rewards for doing it right include increasing employee satisfaction, reducing turnover, optimizing productivity and positioning the organization for growth.

The stakes are even higher for organizations that face immediate challenges such as a merger or acquisition, volatile market conditions, new competitive threats or any serious need to influence internal change in response to external forces.

There’s another element compounding the pressure and raising the stakes on employee commitment: Never before has there been such a diversity of generations in the workforce. Four distinct, age-based cohorts coexist in the workplace. Each has different values, attitudes, expectations, needs, and motivations, all of which can make it more challenging to manage and integrate into a corporate culture.

Currently, Generation X and Nexters make up about 45 percent of the workforce. Together, these 18-to-41-yearold individuals equal the same percentage of the workforce the Baby Boomers compose. The Veteran generation makes up the final 10 percent. To ensure long-term employee loyalty, enterprises need to learn about each of these generational groups, their needs and motivations. Although there is danger in generalizing, a quick review of each group’s typical traits reveals a glimpse of what individuals in each group might be looking for from an organization.

Veterans (1922–1944): Born before World War II, their values were shaped by the Great Depression, the New Deal, WWII and the Korean War and emphasize civic pride, loyalty, respect for authority, dedication, sacrifice, conformity, honor and discipline. This generation is driven by duty before pleasure.

In the workforce, they are stable, loyal, hard-working and employed with their company for 30 years or more. To them, work is a privilege: They respect the institutions they work for and its leaders, believing that work and sacrifice pay off in the long term. As a result Veterans seek a directive leadership style, with clearly defined goals, directions and measurements designated by the leader.

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Reprinted from Ducttapemarketing.com. See original post here.

By John Jantsch

Back in the early 1960’s the American Marketing Association coined the term the “Four ‘P’s” as a way to describe the essential elements of the marketing mix. Since that time every first year marketing student has been taught to think in terms of product, price, place and promotion as they analyze case studies of companies real and imagined.

Much has changed in the last 50 years, including what product really is, what place entails, how package plays a role and, well, pretty much everything about what promotion looks like.

In fact, the very definition of marketing has changed dramatically enough to render the original Four P’s somewhat useless as a foundational marketing and business strategy concept.

Today’s most important business and marketing directive is one of building trust. Engagement, connection and story are the new forms of promotional art. Price is a function of value and place has become bytes and ether more often than a shelf or an office.

There is a home for the Four P’s in today’s business but it’s in the very mortar of the business and the story of its people rather than in a department on an org chart.

The Four P’s are now more about how a business is experienced than what it sells. They reside in the expression of human characteristics that turn commitment into culture and culture into customer.

The following elements make up a redefinition of the Four P’s for the fully alive business and further make the case that marketing is everything you do and every business is really a marketing business.

Passion

The first element of the Four P’s in a fully alive business is the passion for living that the owner of the business brings. When the founder of a business can serve their own personal passion and purpose by growing the business, good things can evolve.

The leader of a business must have a great sense of passion for the business, but they also must be able to connect that passion with purpose in order to bring out the desire to commit in others. Leading with passion is how you put yourself out there and do what you were meant to do.

“A ship in port is safe but that’s not what ships are built for.” ~ Grace Murray Hopper

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Reprinted from www.under30ceo.com. See the original post here.

By Dianne Durkin, founder and president of Loyalty Factor LLC — a training and consulting company

What is Magnetic Leadership?

The answer to that question comes from defining what it is not.

Uninspired leadership that disengages employees is the “reverse polarity” of Magnetic Leadership.

• Think of the successful professional who may have climbed the ladder without ever learning how to play well with others.
• Think of leadership that does not connect with people because the vision and purpose are not relevant to them.
• Think of leadership that talks without listening.
• Think of leadership that promises without delivering.
• Think about the cost of unengaged employees.

According to pollster Gallup, actively disengaged employees cost the U.S. workforce more than $300 billion in lost productivity alone. How much is employee disengagement costing you?

If there is weak or non-existent leadership in an organization, it is like spraying a big can of people repellent into the air that employees breathe. It kills creativity, productivity and the spark that ignites new ideas. Those organizations risk losing top talent and cultivating people with promise.

Here’s the good news: you can create Magnetic Leadership in your organization. And you don’t have to look like a rock star or a celebrity to do it. You just have to have heart, be open to some organizational soul searching, and most importantly, you have to be R.E.A.L.:

• Take an active interest in others
• Listen to people
• Act decisively and consistently based on what you hear and do

You can transform your organization, energize your employees and boost your bottom line with Magnetic Leadership. With the R.E.A.L. acronym as your guideposts, you have the opportunity to look at yourself as a leader and ask some hard questions along the way. Each answer brings you closer to being a Magnetic Leader who inspires others in your organization.

Let me highlight some of the concepts of Leadership. (more…)

Reprinted from Ben’s Blog. See the original post here.

By Scott Weiss, general partner of Andreessen Horowitz

I had a real struggle preparing to be a public company CEO. And it had little to do with having scalable internal systems or making the quarterly numbers… I just couldn’t keep secrets from my employees.

As CEO of IronPort, I wanted to be completely transparent with my entire team but my board of seasoned industry veterans was sharply opposed… They raised several serious issues: do you want to leak critical weaknesses to your competitors? Do you want to panic your employees? Do you want to completely reconstruct your culture when you go public? It was just a bad idea. However, the more that I thought about it, the more I believed that sharing absolutely everything would create massive advantages and that we should live with whatever consequences resulted.

So, after board meetings, we would assemble the company and go through every board slide… How much cash in the bank? What’s our burn rate? What are the biggest problems we are facing? Did we decide to build, buy or acquire a critical component? The first couple of go rounds, there was dead silence. No questions—just head nodding and a couple of blank stares. After some probing, we realized that people needed to feel comfortable speaking up, that it didn’t just come naturally. We brainstormed a bunch of different ways to get over this hurdle and here were some experiments that ultimately worked:

- We amped up the frequency of communication to all employees. Different members of the leadership team would send out weekly emails to all about customer trips, conferences attended, schedules slips and customer issues. These were written very off-the-cuff, informal and in the voice of the different leaders. I suppose we’d be all be tweeting or blogging today…

- When an employee would reply to an email with a comment or question, we treated it like it came from a customer who deserved an immediate, detailed and thoughtful response.

- After the weekly staff meetings, we’d send out a summary of the decisions and issues to all of the directors/managers who would then share it with their teams.

- We emphasized “speaking up” as a core value at every opportunity. Our employee orientation, performance reviews and leadership training all emphasized everyone having an obligation to dissent…

- We would leave 30 minutes for questions after every all-hands meeting and then press, often uncomfortably, for no fewer than five questions from the group.

Over time, the benefits of transparency coupled with an emerging cultural norm of speaking up became more apparent:

I thought we would surface creative answers faster. When everyone had a clear understanding of the hard problems, their collective brains were on the table for parallel processing. The best information rarely sat with the senior executives but with the employees that were closest to the product and closest to the customers. And the best answers would often come from the most unlikely of places. For example, some of our most innovative features came from customer support reps identifying customers trying to use the product in ways it wasn’t intended.

Initially, it worked better than we expected. IronPort experienced zero voluntary turnover for the first three years. Because we let everyone’s head under the tent, we implicitly trusted them and it worked both ways. For instance, it wasn’t a shocker when we stopped hiring as we were raising money. Everyone knew exactly what was going on: we were running low on cash and had no idea how long the process would last.

Lastly, nobody was confused about what was important and people would point out any inconsistencies and solve them in the background. I remember standing up at a company meeting talking about how excited I was that IronPort anti-spam was working and we’d finally be able to drop our partner Brightmail. After the meeting, the accounts receivable clerk knocked on my door and said, “I thought you should know that two customers are withholding payment because IronPort anti-spam isn’t performing.” Oh crap. But much better to know about it and fix it than go on believing there wasn’t a problem.

As we were preparing to file our S-1, we hired a CFO with public company experience that insisted that we start “practicing” as a public company. Hmm—I knew that our level of transparency would have to change but what did that mean exactly? “You can’t tell everyone how we did this quarter at midnight quarter-end” and “You can’t go through all the board slides like that—too much sensitive information.” So, we started editing, putting shrouds on issues because we were afraid that the information would leak. I remember our first all-hands during the “practice” time. I felt muzzled and cautious, trying to strike a balance between our wonderful transparent culture and an intricate set of Sarbanes-Oxley rules. As it turned out, the practice was critical in working out the kinks. Here are a few things we did:

- Our CFO and I listened to dozens of public company earnings calls to get a sense for the dynamic and what information was typically shared. The best duos had the CFO as the play-by-play man and the CEO as the color commentator.

- We then staged mock earnings calls with the employees as the analysts asking the questions. This proved to be a very useful format for reining in my over-sharing and was instructive to the employees as they saw us struggle with what we could and couldn’t reveal.

- We prepared a mock earnings press release a few weeks after the quarter closed. This helped us practice keeping the numbers quiet, which was difficult because everyone wanted to know how we did at quarter-end.

Although we eventually opted for an acquisition by Cisco versus an IPO, I came to believe that our type of total transparency was a competitive weapon that applied primarily to private companies. In the end, my board members were right—we did have to limit what we shared with employees on the way to going public. That said, I believe it was much healthier to set the default to full disclosure while we were private. When you prepare for an IPO, it’s definitely a high-class problem to have to work backwards with concrete reasons to withhold information from the employees. And when that time comes, they totally understand.

Reprinted from CompanyFounder.com. See original post here.

By Paul Morin

This list of seven traits is not all-inclusive, nor is it in order of importance. These are simply seven traits that I see all the time, which undermine the ability of leaders to help their organizations and themselves achieve all that they can.

I also want to point out that not all the following characteristics are intrinsically “bad”. There are certain situations that call for some or all of them.  In “everyday” leadership scenarios and organizations not in crisis though, the following seven leader traits are not likely to result in an optimal outcome.

Common Ineffective Leader Trait #1: Micro-Managing

Wait, are we talking about leadership or management? Sometimes the line becomes blurred. My favorite metaphor illustrating the difference between management and leadership is from Stephen Covey’s story of a logging crew working in the forest. The crew is working hard and someone yells from atop a nearby mountain (paraphrasing), “Hey, you down there” … “What? We’re busy making progress, don’t interrupt us” … response: “You’re in the wrong forest”!

The effective leader is not the one that goes around “getting into everyone’s business”. Rather, the effective leader makes sure the organization and everyone in it is in the “right forest,” then let’s them get their jobs done.

Common Ineffective Leader Trait #2: Unclear Objectives

Many, if not most, organizations do not have clear objectives for where they are trying to go. The leadership of the organization has not taken the time to define where the organization is trying to go or what it is trying to achieve. In other cases, the objectives have been clearly defined, but they have not been effectively communicated to the members of the organization. Following on the forest metaphor above, the organization may even actually be in the “right forest,” but due to poor communication, the team may not know whether they’re supposed to be cutting it down or planting more trees.

Common Ineffective Leader Trait #3: Frequent Direction Changes

There aren’t too many things more demoralizing to someone working hard toward an objective, than having it change, constantly. We’ve all seen, and some of us have had the displeasure to work in, organizations where the direction and objectives seem to change with the capriciousness of the wind. We all start “rowing in the same direction” only to be informed, or worst yet, find out second-hand, that the objectives have changed and we’re supposed to be rowing in an entirely different direction. If you want to be an effective leader, don’t do this to your team on a frequent basis, and if it’s absolutely necessary at some point, explain it well. Your team will hold it against you a lot less if you communicate with them as openly and honestly as possible regarding why all the work they just expended “was for nothing”.

Common Ineffective Leader Trait #4: No Culture Of Accountability

Once you have clear goals in place and have communicated them effectively to your team, it’s critical to develop a “culture of accountability”. Your team must understand that they have their part to do, in order to help the organization achieve its goals. This “part” must be well-defined, with milestones and target dates for completion. Progress toward the milestones and overall completion must be tracked and reviewed on a regular basis. Variances or deviations from plan should be explained and if necessary, course correction must be facilitated and monitored. Without a “culture of accountability,” it’s too easy for members of the team to get sidetracked “putting out fires” and to never quite complete their “part”. If this happens systemically, the organization will never reach its goals and the leadership will have failed.

Common Ineffective Leader Trait #5: Don’t Walk Their Talk

There are some leaders who are tremendous talkers. They can “wax eloquently” on most any subject and they inspire confidence with their bold pronouncements. The issue arises when all the hyperbole does not coincide with reality and specifically, when the leader displays behavior that is inconsistent with what he or she is “preaching”. Leaders, as persons who are supposed to inspire confidence, like it or not, are held to a higher standard.  If you aspire to be a “great leader,” it’s important that you “walk your talk”. Don’t make eloquent pronouncements, then contradict them with your behavior. That will be the quickest route to lose the respect and confidence of your team and other relevant constituencies.

Common Ineffective Leader Trait #6: Run People Over

Ineffective leaders, frequently unable to persuade with logic or emotional appeals that make sense to their team, often just “run people over”. That usually takes the form of “you’ll do it because I said so”. This approach can be necessary in certain situations, particularly where a team member does not want to listen to reason, or simply cannot be given enough information to fully grasp the rationale for a particular mandate. However, if this approach is used as a matter of routine, then it is likely to alienate many members of the team. This point is highly related to the point above regarding effective communication.  If you communicate effectively as a leader and you have selected good members to your team, you typically will not have the need to “run people over”. That would be ideal, because when intelligent people get run over, they typically find a way to use their formal or informal power within the organization to make you “pay the price”. They undermine you every chance they get, even if just in a passive aggressive way.

Common Ineffective Leader Trait #7: Take Credit For Everything

If something works well in your organization, give credit to your team. Why? Well first, it’s the right thing to do. If you are playing a leadership role, while you may have put everyone in the “right forest,” it’s highly likely that the remainder of your organization did the execution necessary to “make it happen”. Second, you will look and feel a lot better if you “give credit where credit is due”. Even if the reward is not monetary, pretty much everyone appreciates a pat on the back for a job well done. Remember the adage, “praise in public and criticize in private”. Don’t be shy about highlighting the tremendous performance of your team and certain individuals with your team. While some underperformers may get jealous, the achievers will appreciate the recognition and are likely to continue performing at a high level, for you and for the organization.

So there you have “7 Common Traits of Ineffective Leaders” and some ideas on how you can avoid those traits and continue on your path to becoming an effective leader.  As I said at the outset, I realize that this is not an all-inclusive list and I realize that in some situations, these “bad” traits may be necessary.