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When I founded my software company so many years ago, I was fortunate to have an immediate client who actually paid me well for my time. As my company and my relationship with this client expanded, we were also able to get paid to develop our software product. In essence, our software was customer funded and required no more outside capital than a line of credit to get us over certain growth spurts. We were able to parlay revenues from our services into the areas of our business we needed to grow. We bootstrapped.
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’srecent 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.
Last week, I attended a focus group of sorts at the SBA headquarters in DC sponsored by the National Women’s Business Council (NWBC) to talk about women business owners and capital. It was an exploration of the issues as they prepare to give a summit on the topic for women business owners this Fall. Admittedly, I almost didn’t go. For me, home to downtown DC can be anywhere from a 45 minute trip when I drive and there is no traffic (and I make every green light) but is more often an hour to an hour and a half. These days, I have so much going on that I try to cut out any extraneous out-of-the-office excursions but something drew me downtown that day. I didn’t know what to expect but absolutely got more out of it than I had anticipated.
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.”
Did you know that when conflicts occur, managers spend 42% of their time helping the parties reach agreement? The average cost of defending a litigated employment claim is $130,000. Fortune 500 executives spend 20% of their time in litigation related activities. Can your business or organization afford the high costs of conflict?
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 firstname.lastname@example.org. 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.
I was talking with a friend the other day who recently started a business pursuing her passion. She was able to move into securing billable work relatively quickly through word-of-mouth and her network of contacts. As she is branching out, she is looking to develop a more formalized statement of services and marketing messages. The thought of it all, she lamented, was bumming her out. She wanted to DO the work but found herself needing to spend more time than expected to set up the business. Unfortunately, this is not at all unusual. Many people start a business to do what they love and then realize there so much involved in starting a business that its becomes hard to find time to do the “fun” stuff you started the business to do. You need more hours in a day to do both. That’s why it is crucial to find something that drives you – a passion – so it can feed your energy rather than drain it. The best book I’ve found for exploring solutions to this dilemma is The E-Myth Revisited by Michael Gerber. If you’re starting a business and haven’t read it, I highly recommend it.
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.
I know a lot of people have long predicted the death of traditional news media such as the weekend newspaper, but it remains one of my favorite Sunday morning rituals. Settling in to read news on my laptop does just have the same appeal. This morning, I was pleased to find interesting reading around two of my favorite subjects: entrepreneurship and work/life balance. First, I’ll talk about the entrepreneurship and tackle the work/life balance in my next post.
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.
“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.
My father did not believe in failure. He once relayed a story about a conversation he had with a high school teacher (a priest, for whatever it is worth). He was not doing well in the class, and his teacher asked my father how he would feel if he failed. My father’s response: “I can’t fail.” Indignant at his seemingly arrogant retort, the teacher came back “Oh, you can fail my class, boy. I can see to that.” My dad’s reply: “You can give me a failing grade, but I can’t fail if I’ve learned something.”
I’m happy to say that I’ve inherited or adopted (or a combination of both) his outlook on failure.
My nephew was bemoaning (over Facebook) his recent holiday retail fiasco. He had hoped to clean up on an entrepreneurial opportunity that didn’t quite work out. My words of wisdom (though he might have seen them as something else at the time): You can’t fail if you’ve learned a lesson, though sometimes lessons can be expensive. And that ‘expense’ doesn’t always have to be money – sometimes it is our time. When I talked to him, we discussed what he learned. Where the experience was costly from a monetary perspective, he learned some tough lessons he’s not likely to repeat. So was his foray into holiday retail a failure? Hardly.
So many people talk about ending a year by thinking back on their accomplishments, what a great year they had. This year, I’m recommending something different.
Think back on the things that didn’t work out the way you planned or didn’t produce the result you wanted or expected. What did you learn from them? What can you do differently going forward? And if you can’t recall anything, think about that too. Maybe you held back on taking a risk? The problem with being afraid of failure and not taking risks as a result is: how do you know how far you can go unless you test your limits? If you’re not experiencing at least a little failure, are you really stretching yourself to reach your full potential? Failure happens…it is how you look at it and what you do with it that makes the difference.
So what lessons have you learned this past year? How have these outcomes revealed changes you need to make or new opportunities you should pursue? Embrace these lessons, however painful, and you’ll find yourself growing as a result.
The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.”
Once a year for the past 3 years I’ve had the privilege of being on the radio show of Jim Blasingame, The Small Business Advocate. Every time I talk to Jim I have a blast and this morning’s show was no different. Jim has no problem keeping up with my ADD, taking our conversations all over the place but always someplace GOOD. I’m honored that he’s asked me to come back as a regular guest, starting with quarterly in early 2010.
His shows contain a lot of great (free!) content so after listening in to our chat via the link below, check out some of his other interviews! You’re bound to learn a lot…
Following is a guest post provided by Anne Barber and Lynne Waymon. I’ve seen Lynne speak and not only is she engaging and fun, but her advice is immediately actionable and valuable!
Taking a scattershot approach when networking to find clients is the biggest mistake we see people make. Joining all the area Chambers of Commerce and an alphabet soup of civic and service clubs and then attending once, just doesn’t work! Only strategic networking can bring in the business. Use these tactics to help you become more focused and strategic.
Profile Your Prospects
What kind of people, exactly, do you want to work with? Write a client description. One private bank determined that women over 60 were their targets – but women with a certain level of assets. What would these women be interested in? Perhaps antiques. Their marketing included a very posh “cream tea” at an elegant hotel with a speaker from Southby’s and a free antiques appraisal. Current clients were invited to bring their friends – and did.
Know What Networking Is
Think of networking as teaching people (who might become clients or refer clients) who you are and what to come to you for. The first question that comes up in any conversation with a new contact is, “What do you do.” Most people give their industry (I’m in financial services.), their company (I’m with Principal.), their occupation (I’m an insurance agent.), or their title (I’m a Wealth Management Advisor with TIAA-CREF.) If you’ve been saying one of those things, you’re getting the conversation off on the wrong foot. Instead, say one sentence that tells one specific thing you want people to remember. If you wear many hats, take them all off but one. Then say a second sentence that gives a short example of you solving the problem, serving the client, or saving the day. A CPA says, “I’m a CPA who negotiates with the IRS. I just convinced the IRS that my client’s horse farm is a business, not a hobby.” This 2-sentence model guarantees you’ll give people something to talk with you about, rather than just responding, “Oh, nice.” when you give your title.
Teach People To Trust You
You’ve heard it before: “People want to do business with people they trust.” Before people will come to you, they want to be assured of your character and competence. Everything you say and do reveals your character and competence. Most people wn’t be there when you have your shining moments, so it’s only through conversation that people find out what you’re good at, what to send your way, and what to count on you for.
Pursue Your Passion
Target potential clients based on common interests. One former pro baseball player targets professional athletes for is financial advisory business. Instant credibility and rapport. One young lawyer, who had competed in ballroom dancing, found clients when he attended tea dances on Sunday afternoons. The senior members of his firm sat up and took notice as his dancing partners began to show up on his client list.
Take your networking to the next level. Be strategic.
These past several weeks have been absolutely crazy for me. I’ve been working almost non-stop and, honestly, I have loved every minute of it.
When working with current and aspiring entrepreneurs, I talk a lot about finding your passion. I used to say that you know you’ve found your passion when you’re engaged in a task and time passes quickly.
I don’t believe that anymore. After all, time passes quickly when I drive the repetitive 40-mile route home from teaching 2 nights a week. More than once I have arrived home somewhat surprised that I didn’t remember the drive. Has that happened to anyone else? Sure. But does that mean we’re passionate about driving? Not necessarily.
Likewise on occasion I’ve had to dig into getting my office organized or my financial records in order. I can get to a place where I’m so focused I don’t even realize I’m hungry or that so much time has passed. Does that mean I’m passionate about those activities? Hardly.
Time can pass when you’re NOT having fun. Time passes when you’re focused. So how can you identify the difference between being able to focus on a task and being passionate about it? It’s about the energy.
Last night, I gave a workshop at UMBC on Finding Value in Ideas. Following our 3-phase model for entrepreneurial innovation, Get Sparked, Get Real, and Get Results, I talked for over an hour about a topic I am passionate about. Sure, the time passed, but there was something different about this time passing and my commutes home.
My energy was MULTIPLIED, not drained.
It struck me as I was driving home that I was PUMPED. Even though I expended a great deal of energy to be “on” for the group, I actually felt MORE energetic than when the session had begun. I started thinking about past occasions when I felt that way. Teaching an ACTiVATE class. Empowering a group of women. Giving an individual a much-needed empowerment “Boot in the Butt”.
Although these tasks often require considerable energy to conduct, I am left feeling more powerful, more energized, than I did before I started. THAT, I realized, is what passion does.
Passion for what I do has allowed me to function with less sleep, to get excited about the future, and to realize, day after day, that I am exactly where I’m supposed to be. Sure, there are aspects of my “work” that I don’t get excited about (like finances) but because I’m able to focus on the goal – the path forward – those less-than-fun tasks are now inconsequential. It’s magic.
So how do you find out what you’re passionate about? Notice the next time you get that sudden surge of energy, of power. Stop and take a moment to think about the cause. It could be a particular task or the meaning behind it. I guarantee you if you pay more attention, the answers will become clear.