Although we sold software, the majority of our revenues came from services, so we determined our budget based on how many hours we might bill and projected out from there. Borrowing or raising capital never entered my mind. Oh, I remember stating early on that I wasn’t looking to be the next Microsoft, but I also remember distinctly the reason: I didn’t want to lose control. Even though our company grew to multi-millions in revenues from what I considered being scrappy, I honestly think I was afraid of too much success.

I don’t know if I’ve always been that scrappy, but looking back I realized I needed to be to get through college. I had to work 3 jobs at one time to pay for college myself (eating Ramen Noodles in the tough times) because my parents didn’t have the means at the time. But at least then, I filled out every application for a scholarship I could find and opted for all the student loans possible. So why didn’t that translate into my business years later? In my first business, I never really thought about what I could do with someone else’s money.

Over the past couple months of co-founding a nonprofit, the Path Forward Center for Innovation and Entrepreneurship (the first nonprofit for both me and co-founder Renee Lewis), I’ve been building our financial models from what I thought we could make for our efforts – teaching the ACTiVATE program at UMBC, consulting, training, speaking, and license fees for rolling out the program. How can we make this happen by being scrappy? As we’re getting things moving, I’ve been working 24/7 and pulled in a million directions as happens in any type of start-up and have honestly never worked harder in my whole life nor enjoyed something so much. I can’t NOT do it. And then it hit me.

I was stuck in bootstrap mentality.

Although we have big ideas and visions for the Center, I kept coming back to ‘how can we earn the money to fund these great ideas?’ until I got my own boot in the butt. I kept seeing the signs – from the recent Kauffman study, to the Equity Matters seminar I helped run for Springboard, to the SBA focus group I participated in. This is also where it pays to hang around people smarter than you. All these events, the people around me, and especially the continuing success of our ACTiVATE participants and alum collectively and indirectly helped me realize that what we’re doing is SO powerful and the timing is SO perfect that it can’t wait to be bootstrapped. Bootstrapping isn’t good enough. We need to raise money from the outside.

I know this is contrary to what most people are thinking in this economy. And in fact, outside capital isn’t always the right answer for every business. But when the timing IS right and the idea IS powerful and the market IS ready, waiting to bootstrap can kill an opportunity’s momentum and chances for success as a result. It is a risk, though, as raising money isn’t easy and can consume a lot of time. It is an option that should at least be weighed by entrepreneurs when they start so they can build in the right infrastructure and value to get where they want to go. Neither fear of success nor failure should be among the limiting factors.

The transformation of my thoughts and, as a result, the vision for the Center was so incredible, yet so painful (as all growth is) I realized that many of the women who come through our programs are likely stuck exactly where I was. And now that I’ve gone through it, I am better at recognizing the symptoms in others and developing strategies to address this attitude head-on. If we’re ever going to help women reach the levels of success they are fully equipped to attain, this has to be a part of it (see friend Dr. Sharon Hadary’s recent article in the Wall Street Journal as backup!). And now I know better how to get there! I’ve always believed that pain can have an upside. And I know that ACTiVATE, the Center, and the women we touch will benefit from this pain of my thought evolution as well.

What the group lacked in size (there were only about 5 of us) we made up for with enthusiasm and diversity of perspective. The experiences varied from those of us with fairly low capital needs in the past (I had a line of credit in my first company that I only tapped into two or three times) to the real estate developer whose assets include more than one multi-storied building and borrowing needs well into the millions.  Without breaching confidentiality I can only say that it was a heated, animated discussion which, at times, involved more than one 4-letter word, which really

caused me to think: how many women believe or behave as if wealth – or even money – is a four letter word? Does a woman’s relationship with money impact her business approach and, ultimately, goals?

Over the past 5+ years of teaching in the ACTiVATE program, I’ve seen my fair share of women whose motivation for starting her own business is to change the world. I would say that a good majority actually fall into this bucket at some level or another. I am quick to relay to them, however, that it is easier to change the world when you have money, meaning to get them focused on the success of their business as a means to that end. Oftentimes, my bold statement is met with a skeptical or uncomfortable expression, which tells me more about their relationship with money than anything else. They believe, whether they recognize it or not, that focusing on money and wealth are bad.

Many books on entrepreneurship will tell you that starting a business purely to make money without following your passion is a recipe for lackluster or at least short-term performance or early burnout. The lucky folks are those whose passion actually leads them to a way to make money, which is exactly where we focus our ACTiVATE participants.  But we’ve found that unless they challenge their relationship with money and wealth beyond just a desire for nice material things and into a way to build value, they’ll never be able to cross that chasm so many businesses fail to get across: real, sustainable, profitable growth that can take them a long way to really making some lasting impact.

As I was musing over this phenomenon, seemingly from afar, I realized I had my own mind-shift that needed to happen. To learn more about that, look for my next blog on “Bootstrap Mindset.”

The one thing I’ve recently noticed is where his brilliant ideas consistently originate. He almost always comes up with his break-through ideas when he’s NOT working on a case. It is either something unrelated that someone else says, does or he sees. It is while his problem-solving thoughts are in incubation – while he is NOT thinking about the case, that his ideas flow. This is also called the Shower Moment.

I actually came up with the organization of my book while I was in the shower and it was from that moment that the writing really began to flow.  It is a well-known fact in innovation practice that a period of not thinking about a problem can help new ideas bubble to the top.

One of the problems with the pace of busy business and entrepreneurial people, though, is that we rarely get the luxury of time away from our problems to think. I also found that in the extreme stress of the last few months of transition out of my first company, I lost my creativity. It was GONE. It may have been stress or maybe it was because I had lost the passion for what I was doing.  Whatever the reason, I didn’t even realize it was absent until about 2 months later when it came screaming back. The block I had but didn’t know I had was suddenly gone and it was like a dam of ideas opened up.

So if you’re looking for a new idea, try not thinking about it. If that doesn’t work, take a look at reducing the stress in your life. If you’re still at a loss for ideas, check your passions.

What do you think: if you’re caught up working in something that for which you have no passion, no energy, can you still be creative? Have you had a similar experience?

If you are busy trying to work out a dispute with an employee or a vendor you are not available to focus on long term strategic goals.  In all of these instances you are losing money even though it may not be reflected in your balance sheet.

While direct costs of conflict include legal fees and opportunity costs, indirect costs include diminished productivity, poor morale, higher employee replacement costs and shorter employee tenure.

Conflicts inevitably arise between and among individuals or teams within an organization.  It is part of our everyday life.  However, it doesn’t have to cause damage to your company or your bottom line.  Increased productivity, improved morale, reduced absenteeism are clear benefits of systematic conflict management.

So what can you do about the inevitable existence of conflict?  First of all, plan for it.  Put a conflict management system into place.  This helps ensure that disputes are handled early and at the lowest level in an organization.   As part of this system, review your existing policies.  Develop a corporate culture of early conflict resolution.  Don’t handle conflict like an ostrich…it only leads to trouble.

Second, put appropriate dispute resolution language in all of your contracts as well as your employee manual .  Oftentimes contracts include mandatory binding arbitration language.  But arbitration is often not the best approach, or at least should not be the first approach to handling conflict.

Finally, get to know some local conflict resolution professionals so that you can call someone in to help if needed quickly.   A good source of dispute resolution professionals can be found at www.mediate.com or ask your local bar association.   Additionally, most state courts have mediation programs and a roster of mediators is maintained by the clerk’s office or the alternative dispute resolution office.

For more information feel free to email Ellen at ek@alternativeresolutions.net.  Contact her for a free FAQ on dispute resolution options.

Alternative Resolutions, a woman owned business that just celebrated ten years in business, provides conflict resolution services, training and meeting facilitation.  Visit us at www.alternativeresolutions.net.

Part of this may depend on your entrepreneurial tendency and your sense of personal control. As an entrepreneur, I feel a strong sense of ownership of my efforts and ideas. It’s not about money for me, though. It’s about making sure the fruits of my labor and my creative ventures are being put to good use – that they’re helping change lives. It’s about ensuring my ideas and efforts move forward according to my personal mission. I’m curious – does that matter so much for folks who don’t consider themselves entrepreneurial?

For employees for whom the level of purpose described above is also a key motivator, it is your responsibility to align your job choices with your values. Unfortunately that is not always possible given the current job-market challenges, but ultimately, it is a worthy goal.

Companies that have benefited the most from employee-driven innovation exert effort to make sure their employees are engaged in the process. Whether it is through monetary reward or non-financial recognition, they find ways to motivate folks to contribute their creative ideas to forward the company’s mission. For an enlightening view on what motivates people (and it isn’t always what you think!) check out this great TED Talks video featuring Dan Pink.

The bottom line for employers: it is crucial that you keep in mind that different people are driven by different things and value different types of rewards. Just because something drives you, don’t assume it motivates others.

So can work-for-hire stifle innovation? Only if you let it…

Interestingly enough, the “Apple IPad” was originally a not-so-flattering skit that MadTV put on years ago. Just search for iPad on YouTube and you’ll find it.

The biggest question I (and many others have): didn’t someone do their RESEARCH before launching this product? Were there any women on the team? And if so, were they not comfortable enough to speak up? HOW could this have gotten past any level of market testing and scrutiny?

This is a perfect case for why you need diversity on your teams charged with innovation. You need to consider different points of view based on gender, ethnicity, culture, language, and psycho-graphics of whoever constitutes your target demographic. And it would be nice to make sure you’re not offending or isolating an entire population of people. Just PLEASE, Apple, don’t release the new iPad in red….

The E-Myth Revisited

We were talking about her business – a service many people could use – but I was (in my normal boot-in-the-butt form), asking who her target market was. Had she chosen a niche? What was her marketing strategy? The blank but overwhelmed stare told me what I suspected: she didn’t know. Now this is a really smart lady, but she was visibly frustrated by not having answers to questions that apparently nagged at her as well. What she had discovered is a trap many entrepreneurs fall into: shoot first, ask questions later.

I see it all the time. I have an idea/skill/talent/product. I think it is cool, that people need it. My friends and family see the need or the value, but that’s as far as I’ve gone to validate my idea or my fine tune my approach to the market. And when the capital requirements tend to be low, it is tempting to just quickly hang out a shingle and call it a business without doing any serious primary market research. In my experience, this can be deadly.

So my friend is commenting on how hard it is to get things set up while also delivering, and that she doesn’t have time to do any market research. The best advice I could think to give her: just listen. Talk to everyone you know about what you’re doing and then – and here’s the part many entrepreneurs miss – actually listen to the feedback you receive. Now I’m not suggesting you pay attention to the naysayers who tell you that you’re crazy (we all get that at some point). Ignore that, unless those naysayers are also your target customers. Actually going out and sharing your concept/product/service with potential buyers who have no reason to tell you they love it is the best way to get real feedback. You have to be open to what they say and fight the urge to defend or sell something, at least until you’ve fully explored their objective thoughts about it.

Even better than hearing from potential customers is to talk to existing or past customers. I’ve been surprised a number of times when I asked the question “Why did you buy from us?” and didn’t get the exact answer I was expecting. Where do you think the “Boot in the Butt” came from or how I came up with my title Chief Muse? Both originated from my clients and my students.
So many times, your customers can be the ones to provide you with better marketing copy than you could ever come up with because they talk about what they value. You see yourself through their lens, highlighting what is important to them. Their comments are likely to be about the benefits they receive, not the features you’re offering, which can be and often are different.

The more you hear your customers and adapt your products and services to match their needs, the you will come to actually meeting their needs. And if what you offer already provides that benefit they’re looking for, you might find an opportunity to tweak your message so that it is in their words, not yours, giving you insight future customers can relate to.

In today’s Washington Post Magazine, there was a great article on Kevin Plank and Under Armour.  Under Armour in addition to being close to home physically (I live near Baltimore), carries a personal connection. My nephew Kevin Kirk was recruited by CEO Kevin Plank to be an intern. After reading this article, I understand why Mr. Plank took such a shining to my college-age nephew: I think he sees in him the same entrepreneurial spirit he has always exhibited. Based on the article, it seems both Kevins (Plank and Kirk) spent a good deal of their teenage years finding different ways to make some money. For Plank, in college, it was selling flowers. For my nephew (who is still in college) it has been selling girls’ accessories like head bands, pashmina shawls, flip flops, purses – whatever he can get in cheap supply and sell at girls’ and women’s sports tournaments.

One of the things that stood out to me is how Under Armour has engaged in an intense battle to overtake their competition: Nike and Reebok. Sort of a David and Goliath story with multiple Goliaths. What Under Armour has accomplished so far is amazing and I’m sure if you asked someone today about starting up in an industry with such large, established competition they would tell you that you’re nuts. If anyone had told Kevin that, he certainly wasn’t listening. With smart marketing, sheer determination, and maniacal focus, Kevin Plank has beaten the odds and turned the company he started right out of college into a force to be reckoned with approaching $1B in revenues. Impressive indeed.

Given the sports/competition mentality of this company and having been to their offices a couple times, I’m certain the unifying mission to take on the giants in their industry is a powerful motivator and could be the catalyst for the innovation they’re going to need to overcome such formidable opponents. They have a young, smart workforce so I’m anxious to see what they come up with, but to materialize the kind of  innovation needed requires more than just an idea or two. You have to uncover and recognize the right opportunities (yes, there is a difference between IDEA and OPPORTUNITY) and then execute flawlessly. Kevin and UA have done this before, but will what got them here get them where they want to go next? Time will tell.

When I see their most recent approaches and new products, they seem to be taking a head-to-head approach with the Big Guys. They appear to be asking “How can we do that, too?” I wonder if they might be asking the wrong questions.  Hmmm. Maybe I’ll drop them a line and see if they could use a Muse. I just might know one.

ACTiVATE(R) Class of 2009

incredible women from the ACTiVATE® at UMBC’s Class of 2009. I am sad because we have spent every Monday night of the last year together (OK – we took the summer off!). As with classes before, it’s been a great experience. I felt privileged to witness incredible growth in already strong, accomplished women. Just goes to show – we all have room to grow no matter WHAT stage we’re at!

Dr. Kimberly Brown, ACTiVATE® @ UMBC Class of 2007, did an excellent job at delivering the keynote speech. She talked about what motivates people to make the leap into entrepreneurship – to move from the finite realm of job descriptions to the infinite possibilities entrepreneurship brings. ACTiVATE®, she said, made a difference for her by making the impossible indeed VERY possible. When she joined the program, she was negotiating to buy a business but at a standstill. Some simple advice she received at her interview provided her with the information she needed to move the talks along and purchased a government contract just 2 days into the class. Her company, Amethyst Technologies was born. What started as a 2 person company with 1 client has now grown 20 people with 9 clients, purely through word-of-mouth marketing. Incredible.Getting to know Kimberly through the program and outside of it, I am confident Amethyst is posed for even greater growth and impact under her leadership. Her opportunities are infinite.

Among the benefits Kim talked about receiving from the program, one that stood out in my mind as hard to find elsewhere was the support of and connections with other women like her. ACTiVATE® provided not only a community of smart, successful women focused on the same goal (starting a company), but we were able to provide her with numerous role models and connections to inspire, motivate, and assist her on her path. Emlyn Stancill, one of our current graduates, reiterated Kim’s sentiment at the end of the night. She said she’s so busy with

motherhood and work that she never has the opportunity to meet other women who so ‘get’ what

she’s trying to do. Through the other women in the ACTiVATE® program who get and support her, she’s found her people. And we SO get her because we are just like her!

As with the 4 years prior, another group of women are added to the impressive list of ACTiVATE® graduates. I recommend that you watch out for them…you’ll be seeing their businesses making headlines in no time!

“Last year was a tough one for many organizations, with smaller workforces required to do more with less. The new year looks to be more of the same. How can leaders of such organizations motivate their people as they head into 2010?”

Besides this being somewhat pessimistic about what the year holds in store for us, I found it a pretty broad question with varied answers from the team of business executives chosen to respond. The reply that got my attention came from Beth Brooke with Ernst & Young. She’s also a fellow Corporate Ambassador with Vital Voices. Her answer can be best summed up in her own words: “If cost-cutting wrapped up the last decade, this decade should be launched by innovation stimulated by the friction of diversity.”

She goes on to clarify that she’s about talking diversity not just along the traditional lines of

race and gender, but diversity of thought and experience. And I especially like her use of the word friction because it sounds better than conflict and tends to indicate less hostility. So many thought leaders in management have pointed out (and I learned the hard way) that a team without friction is not likely to be a very innovative team. Why? Because either everyone is thinking alike (not good) or folks are afraid to speak their minds (even worse). Good ideas don’t evolve out of those types of environments.

Instead, out of a confluence of different ideas emerges the next GREAT opportunity when the exchange is handled right. By handled right I mean the different ideas and opinions are productively managed and focused on a positive outcome. Productive conflict.

So the next time you’re in a meeting or talking with a colleague and disagree, remember that it’s a good thing. Diversity of thought can lead to incredible opportunities for innovation.