love a good business story. Place me in the middle of a room I with amazing, interesting people and I will savor every exchange as if someone has given me a gift greater than gold.
My curiosity drives me to know the details behind their personal journey, the barriers, the success points, and the insider secrets. I am like a honeybee collecting pollen so I can fly away home and turn the new information into something beautiful and valuable.
Early in life, I learned to respect the knowledge that other people have, and I figured out that if I applied their tactics in even the least bit, it would add to my own success.
I have been so blessed in my career because I have encountered rather extraordinary individuals in many unique ways. I have met past presidents and prime ministers of South Africa, New Zealand, and the UK; conversed with a mayor of Beijing and princes in Africa; sat with government ministers in India, Egypt, and Argentina; and worked with inspiring individuals who have founded their own companies in countless countries. Through those conversations I have heard fantastic stories and gained remarkable insights.
Looking back, I do not know if I would have appreciated all those experiences if I was not still completely surprised where life has taken me. After all, there was no roadmap designed for me with a big ‘success’ star at the destination. Growing up, my parents were not college educated. In fact they stretched every 1
dollar while waiting on the next paycheck. Theirs was an example of struggle not abundance. But they did do something right; they encouraged my sister and me to go to college. I went off to be a teacher because at the time it seemed the only other option for me was nursing. But while I started a career as a shy young woman teaching six-year-olds how to read and do math, by a twist of fate I moved, and when I could not get a new teaching job, I ‘fell’ into business.
My first business role was a temporary position doing data entry at an auto show and event marketing company outside Detroit, Michigan. It was not glamorous (truth be told most days involved a lot of Wite-Out, photocopies, and loud union guys) but to me it became magical as I discovered I was good at catching on quickly and building relationships. This short-term stint turned into a full-time role and for once I had a taste of a decent paycheck. After that I was on a quest to figure out how to make more money and get an office with a window. In my early career years, I worked for that company in three different states, and racked up incredible branding, marketing, operations, and new business development skills that led the way for even greater things to come. I became the perfect intrapreneur, growing companies, launching product lines, and eventually leading from the top.
I am still completely astonished that I managed to turn a temporary job into a springboard for a fantastic business journey that has connected me to clients in 90 countries and allowed me to work heels on the ground in over 30.
My story is why I believe that with the right energy and focus, all individuals who are hungry can become undeniably successful at whatever they set their mind to with the right insight and support. It is also why I believe better business 2
knowledge drives better business results, and even at this stage in my life, I am still trying to learn new business strategies every day.
In 2018, I began the Disruptive CEO Nation podcast project to combine two things I hold in high regard: 1) the personal stories of company founders and thought leaders who are driving business today and 2) global conversations that demonstrate just how small the world has become.
This book, Building Your Brand: Make Business Happen in a
Global Economy, is a culmination of my experiences and connections to truly incredible business minds who are driving disruption, innovation, and technology. Those who understand that the expectations and voice of the customer change the landscape almost daily, and that brands must be on point and transparent from the ‘front door to the back door’ of their operations. That a brand can no longer be a one-dimensional face because what happens on the inside matters just as much as the engineered marketing you want the world to see.
What I hope to provide for you is a way to structure your thinking about your business – the one you are starting, the one you are working in, or the one that you hope to launch in the future.
We know businesses commonly fail for two reasons:
The first is simple. The potential customer simply does not want what you are selling.
The second is that the leader is tripped up by a blind spot they cannot recover from.
Use this book to help you think about your brand promise, your business ecosystem, and how to cover your blind spots.
3
I hope someday we can meet, and I can learn from your own amazing business story. Please find me on LinkedIn so we can follow and support each other’s journeys.
Cheers to your success!
4
1
Entry Point
very business has a founder, but not all founders are suited E to navigate their way to success. So what separates the entrepreneurs who can move their companies forward from the ones whose companies fade away? What does it take to build an engaging and enduring brand?
This book offers a study of what success has looked like for individuals building companies across a variety of industries, from tech to manufacturing and from fashion to being entertained by drag queens. The companies featured in these pages have been developed by people who invested their savings and massive energy to achieve amazing results through incredible innovation and determination.
And you can do it too.
Building Your Brand is not filled with complex terms or statistical data. What I have poured into these pages is over 30
years of learned practical business advice matched with great business stories from people who have made their dreams happen.
My goal is that the words here will help you think ahead and develop strategy as you build your own unique brand story and navigate your way to success as you have defined it.
Business building is not for the weak 5
The reality of how you achieve business prosperity is not all that sexy. In fact, after interviewing more than 100 company founders and thought leaders through the Disruptive CEO
Nation podcast project, I am convinced that building a sustainable, profitable business anywhere in the world is a natural outcome of three things: fundamentals, focus, and follow through.
Through applying balanced business practices, exercising determination, and keeping your eye on the cashflow and desired outcomes, you will move the dial forward on the long-term health of your company. However, an amazing founder also knows when to take calculated risk and parlay it into opportunity.
Consider the story of Jillian who at 28 years old sold everything she owned and maxed out credit cards to open her first gym with a partner. She turned to clients to be angel investors, promising to pay back investments in personal training if the business went under. But confident that she had done her diligence of acquiring fitness and nutrition certifications, building a loyal customer base, and learning the business ins and out at other facilities; she jumped into the deep end of business ownership.
Looking back, Jillian has shared that it may have been a terrible idea to take on that level of debt and risk, but she had been willing to put it all on the line in pursuit of her amazing. That first business was Sky Sport and Spa. Jillian was able to apply the fundamentals of focus and follow-through to develop a powerful business ecosystem that would serve her well. This first gym was only the beginning, as she kept on with her determination and business building to become a recognized global brand in her right.
6
This is the story of Jillian Michaels, owner and co-founder of Empowered Media, LLC (USA) whose fitness methods have permeated their way into millions of homes through DVDs, best-selling books, apps, streaming services, and more. But I ask you to consider this: While it is easy to look at Jillian today and recognize all that she has achieved, she too had to start somewhere and navigate her way through hard lessons and tough financial truths. She was not an overnight success. Her business empire was built piece by piece where she made adjustments and realignments along the way with a primary goal to give her customers visible and tangible results that would earn her peer-to-peer endorsements. She once said to me,
“If you deliver on this promise, not only do you have a repeat customer, you have a ‘before and after’ - a living, breathing, walking, talking review.”
The start of amazing begins with many questions All concepts and products start off as an idea. Sometimes the idea grows softly, rolling around in a person’s mind, crossing back and forth between doubt and possibility. Sometimes the idea springs forth loudly and demands urgent attention to become a reality.
All business creators move through the same initial questions no matter their pace:
How will I get it off the ground?
What do I need to know about legal structure, taxes, and trademarks?
What will the start-up costs be?
Do I bootstrap and move slow or need investors to accelerate fast?
Where do I turn to secure the technology?
7
Who will I need to work with me, and how will I afford them?
How will I reach buyers?
How will I turn a profit?
What will people think of me if I come up short or even fail?
Building a business takes planning, patience, and perseverance.
When you get started you may not be able to see how important those first steps are, but the beginning is critical. Ben and Jerry paid $5 for a course on how to make ice cream, and with $12,000 set up a shop in a renovated gas station and opened their doors to the people of Burlington, Vermont. While what came next is the stuff of business legend, their business took small steps initially as it made its way from concept to start-up to scale-up.
Let’s look at a business today that is poised to be a legendary story making its mark in London and beyond. Meet Farah Asemi, founder and CEO at SMS ecofleet Limited (UK). She had a vision to reduce the carbon emissions of deliveries in London. However her background was in interior architecture and this was not a space she knew at all. But driven by her vision, she raised money, pitched the city of London for a government grant, worked with manufacturers to design the ecofleet cargo bike, secured warehouse space as her ‘hub’ and started her journey to build a recognizable brand on the streets of London. None of this was easy or within her existing professional experiences, but she had a clear and compelling brand vision of what she wanted to achieve for her city, her customers, her riders, and the culture of her company.
Today, you can see how Farah’s design background has supported the brand personality of ecofleet through the 8
marketing, website, warehouse space, and the bikes and electric vehicles the company operates. The highly visible ecofleet cargo bike is branded electric orange and has a box at the front that can hold the equivalent of 102 wine bottles. The company specializes in same-day delivery of food and goods, but they also have a warehouse to store customer products and gifts that can be ordered and delivered next day. The next natural extension was to white label her bikes for specific brands who wanted the same brand recognition levels on the streets that ecofleet was getting. In the short period of time since launch, ecofleet has become known as the mindful delivery system in London - and all that from an immigrant who had a vision for the city who had given her a home.
So how did Farah do it? What key principles did she follow along the way to her launch?
From questions to confidence
A company owner needs to grab hold of confidence and yet maintain a curious and open mind as they build their brand and embrace business fundamentals that will propel them to success.
Leaders actively building their businesses follow a pattern.
Perhaps they take the steps in a variety of different sequences, but the flywheel hits all the same fundamentals as it works its way around the brand promise. I call this the CPM2 Business Ecosystem methodology, and when understood, it will help provide an ongoing framework for business creators to conduct planning and operational review.
It has always been truly clear to me that better business knowledge delivers better business results.
9
As a founder, you can not afford to waste time or money; however, it is impossible for you to be an expert at every aspect of business. So, while you hold your company vision, you need to identify your blind spots and figure out how to get them covered. Failure to understand and appreciate your personal strengths and weaknesses is the fine line between profit and loss.
When I speak with company founders, I ask them about business lessons learned. While I get an array of answers, I think I received the most honest one from machine learning and natural language understanding expert Francisco Webber, co-founder and CEO of Cortical.io (Austria) who said, “Don’t believe your own bullshit.” As a founder of multiple companies, a respected speaker on the topic of big data, and a technology futurist I appreciated how blunt he was. He explained it this way: It makes things simpler when you are honest with yourself about what you do not know. He went on to say that as a leader you should not be afraid to tell your employees or even business partners how things are. Whenever you do not follow this role there is a lot of energy involved in maintaining things working out. Francisco recommends that if you are in a situation where you can unashamedly express what you mean or need, then things stay simpler and it is easier to connect with the eventual solution.
Essentially, Francisco’s advice is “be confident in what you know, but be truthful in what you do not, so the answers can make their way to you and then you can gain this competency.”
My goal is that by working your way through this book, it can help uncover those blind spots and incite intelligent thinking. I encourage you to not only read about our founders, but visit their business sites and seek them out online so you can better 10
tie their words to the products and services that they deliver.
Their experiences can offer a wealth of knowledge that you can apply to your own professional practices.
A global mindset removes limits from thinking Business today holds opportunities like no other time in history.
Once you build the framework for your organization, you may find that team members, resources and even clients come from places not on your initial business plan. You need to stretch your thinking and be open to the world of possibilities for your business.
Even if you are unsure how your organization could have global reach, consider how you would operate if you served, shipped to, and received payments from outside the borders of your country. Another part of Francisco Webber’s story that he shared was that as Coritical.io grew, they were once a team of 10 staff representing eight nationalities. That kind of diversity can dramatically enrich the way your team solves problems and carries out the business. Later in this book you will meet Elyse Petersen, founder/CEO of Tealet (USA) who discovered that with her business expansion she needed to depend on bitcoin transactions to move money more easily between countries that have difficulties with currency exchanges and banking regulations.
If your starting point is that you have no experience doing business globally that is okay, but you can begin to point yourself in this direction. Connect into networking groups, professional trade organizations, or use platforms like LinkedIn and seek out individuals who manage a similar business in different countries, as this could also provide an alternative viewpoint that makes sense and could boost your own business 11
performance. And get on airplanes and travel, experience the world, attend conferences in other countries – open your mind.
If you are not looking toward the future with a wide lens, you may miss some great opportunities and knowledge.
Success will not be based on
what we know but what we
are willing to learn.
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2
Building a Business Ecosystem Around Your Brand Promise
rom the moment you create your business, you are building F a brand with a promise to your target customer base. This brand promise will guide the development of your business plan and document the trajectory of your company’s path forward. It will provide focus for you as the founder and it will enable potential investors and lenders to understand how you are going to develop your business, take it to market, monetize it, and build a fan base.
Think about your business plan as a framework for success that is continuously evolving and leveling up as your business grows. Each part interconnected to success, and each part demanding equal time and attention. Therefore, a founder must be an expert at multi-dimensional thought when it comes to their operations. They must become an ‘ecosystem thinker’.
If drafting a business plan is overwhelming, take a deep breath and break it down to smaller pieces. Do not be hard on yourself if you are not an expert or even skilled at every aspect of a solid business strategy. Any exceptional CEO is not an expert at everything, but they are an expert at sourcing the people and information that will deliver the breakthroughs and desired results needed at the point in time they need it. Think of it like this, a CEO is a great CPS – Chief Problem Solver.
13
Discuss, develop, and benchmark using the CPM2 Business Ecosystem
Whether you are starting your business or already managing one, the leader of any organization can remain focused on the desired outcomes and end results by using the principles of CPM2 Business Ecosystem. These key areas centered around your brand offer can provide a proven framework for validating the direction and health of your company.
As a first-time founder or an entrepreneur scaling up, you can work your way through the principles on a fundamental level -
lean, simple, and with a concise purpose. As your company grows, you can cycle through the principles of CPM2 again, only this time with a little more sophistication, greater insights, and extended knowledge. Even with a mature company, a business leader can conduct an assessment as a part of product launches,
validation,
course
correction,
refocus,
and
improvements. A constant cycle through the CPM2 areas will provide an important feedback loop as you innovate for success.
Whether you are in India or Indiana, these CPM2 pillars work in tangent to expand brand appeal and construct competent delivery systems. The core CPM2 areas wrapped around your brand promise are:
Concept
Customers
People
Process
Money
Magic
The first five principles are the ones that will sustain your business, but it is the sixth, magic, that will attract your audience and catapult your success. However, without the first five being structured and efficient, there will be little sustainable value no matter how much magic you put out into the world.
14
BUILDING A BUSINESS ECOSYSTEM
This is because the construction of your ‘business house’
matters. What good is great marketing if production cannot deliver the product? When I speak and provide coaching on becoming a ‘business partner of choice’ I continually emphasize that the front and back of the house need to be aligned. That is often a hard thing to balance, but once it is achieved it will deliver glorious results. By taking your team through a CPM2
review, you can take a step forward to increased alignment.
At the Center is a Clear and Compelling Vision: The Brand Promise
A clear and compelling vision is contagious. Let me introduce you to Rita Kakati-Shah, founder of Uma (USA). Under the banner ‘Be bold. Be you. Be Uma.’ Rita has focused on her mission of bringing talented women back into the workforce, and around that mission she built an international community of aspiring candidates and partner companies. In her own words, 15
this was her journey to realize the brand promise she wanted to provide to the world:
“I started my career in the city of London at Goldman Sachs. I spent a decade there and was incredibly involved in the firm's diversity and inclusion initiatives.
I then relocated to New York City, got married, and took a career break for close to four years when I had my two children. It is amazing how time flies and I could not believe how hard it was to get back into the workforce. Nobody wanted to ask me about my fantastic experience. There was a fixation on that gap. It is amazing because you pick up so many skills as the CEO
of the household and it seems to be forgotten and looked over. There was an obvious gap in the market and I really wanted to do something to fill it.
I guess the frustration I felt motivated me because you often ignore that this issue even exists. People talk about things like ‘the penalty’ and is it real? And do companies sort of discriminate against a certain talent pool?
I am proud to say Uma’s mission is two-fold. The first is to empower individuals looking to return to work after a career break. And the second is to increase the company’s bottom lines through retention strategies for talented women. We are a few years in now and we know we have hit a nerve in the market because we have seen firsthand the difference in the stock improvement of these women as they come back to the workforce after they have been through Uma Academy sessions. There is a difference in their confidence levels and how they portray themselves. And from a company 16
perspective, we’ve started to see data coming forth from some of the corporate training that we are doing, and we’re seeing the impact on the retention strategies. So that is what we are doing. It is worth it and absolutely making a difference.”
Uma has a clear mission that is unique and needed in the market. When you visit the website Beboldbeuma.com you are greeted with this brand promise:
At Uma, we challenge the status quo, we break with the mold, we work with like-minded employers to create opportunities that match your credentials and lifestyle goals.
The business you create and manage needs to define a story and promise as clearly as Uma’s. You need to focus on the one differentiating thing that is your ultimate brand promise that will serve as the center of what you want the company to be, who you will serve, and how serving them will make their lives different.
Try filling in this simple sentence to be clear on your brand: My company is
__________________________________________
and we service/stand up for
___________________________________
by delivering
__________________________________________
so that our clients can
_______________________________________.
17
At any point in time, anyone that works for you or buys from you should be able to identify what you do, how you do it, and how it benefits the customer. Remember: people buy based on the promise of results, people stay because the results are real.
Now you need to wrap it with a compelling vision, which is often referred to as your USP, your unique selling proposition.
This is how you do it better, faster, different, or at a more socially conscious level while giving your clients what they want most in the world.
Try to fill in this simple sentence to develop your compelling vision:
We are different because we
(believe/approach/harness/consider/utilize) __________________________________________
and our clients are people who want
___________________________.
Do not worry about overlap between your brand promise and your USP because as you work your way through the business-building process you may make adjustments once you see who you actually attract and sell to. Just identify a starting point and let it settle in your soul. As you begin to speak it into being you will gather feedback and refine your vision.
Your brand promise is the basis of the value of your company, and keep in mind money follows value. Consistently delivering on your brand promise develops brand trust, which means people can depend on what they are getting and they will not be disappointed.
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BUILDING A BUSINESS ECOSYSTEM
19
BUILDING YOUR BRAND
Business Lesson
MAY AL-KAROONI
Founder and CEO of Globechain (UK)
“People probably thought I was crazy, but it paid off in the end.”
May Al-Karooni is a global
citizen who has previously worked
within the investment banking and
asset
management
industry,
fundraising monies for venture
capital, property, and hedge funds.
In 2015, May founded Globechain
after seeing a demand for a new
online circular economy within the
waste management industry. Globechain has won multiple awards. In 2019 alone, more than five million kilos were diverted from landfills by being redistributed through Globechain’s 10,000 members, demonstrating the need for being Commercial with a Conscience ®.
Brand promise: Assist enterprises to reduce waste by providing a reuse marketplace
B2B * entrepreneurism * social impact * sustainability * nonprofit * ecommerce * bootstrap * VC money * the pitch female founders * minority business * growth ALLISON
Tell me about your company and the good things you are doing in the world.
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MAY
Globechain is a reuse marketplace. We connect corporate companies to charities and small businesses, to reuse and redistribute unneeded items. We generate social impact data on something called ESG data, which is environment, social, governance data to the banking world.
ALLISON
It certainly sounds interesting and on the edge of the future.
MAY
Building Globechain was quite interesting. Where the market was three years ago compared to now has been quite the journey. In marketplaces like ours, business models are quite Commented [MAK1]: This is not really relevant to the hard to get off the ground because they require a lot of traction question and diverts from the answer can we take it out?
until they get to a tipping point. What we are doing is new to industries and a new business model. It is still emerging. There is a lot of trust, understanding, and learning that goes into it.
ALLISON
This is not originally what you set out to do in life. Can you tell me how you got here?
MAY
I was born in Iraq. My parents came to the UK to study, but Commented [MAK2]: Too much personal info for security then the war happened and they decided to stay. We settled in a reasons please omit Basra.
city called Leeds, which is in the North of England. I went to school and had the incentive to work hard so I could have a good career and make money because I was first generation and my parents had different backgrounds. The word entrepreneur did not exist in those days, so I ended up working in investment banking in London.
21
It was a great experience because I was trained to talk to brokers and traders. We used to fundraise for hedge funds and property funds. Investment banking was quite an interesting foundation for me, but after doing it for a while I began feeling unsatisfied with my job. Then one day, our bank moved offices across the street. They kept the buildings but disposed of the furniture. I asked them why we were not giving the furniture away, but they told me they did not have the time.
ALLISON
And that was the turning point for you?
MAY
Sustainability was not a priority in those days, and we were just starting to talk about recycling at that point. I thought it was crazy to throw all that furniture away. I asked how much it cost for disposal and to buy new versus moving everything. In the UK it cost them 50,000 pounds per person for removal plus the cost of buying new products and we had 300 people in the building. I thought that was commercially crazy. I wondered why no one had digitized waste and created a marketplace that worked a bit like Airbnb and Uber who were just becoming Commented [MAK3]: Doesn’t make sense this: famous in the UK.
change to ‘and created a marketplace that worked a bit like
….’
The whole sharing economy was coming about, and I wondered why there was not a company that connected commercial items to people who need it.
I got started when I was still working for the bank. I had 800
pounds and I paid for a freelance web developer to develop what I thought the site would be. I sent out emails to a couple big companies. One of the largest retailers in the UK at the time emailed me and said they wanted to talk. When we met, I asked what problems they had with furniture. It turned out that 22
furniture was not the problem, it was fixtures and fittings. They were spending millions a year incinerating them.
That was how Globechain started. For a whole year, I tested to see could if we could shift these products. The way it works is a company takes a photo, uploads it, and then the item alerts are sent to members who are interested. They request it and pick it up for free. I noticed that we got rid of almost 100 percent of the items through reuse because charity and thrift stores were taking them for their shops.
ALLISON
From the outside I can see that you need to balance resources and manage the platform responsibly, and there must be more to the whole disposal and waste piece than people initially think about.
MAY
Many people think I am just connecting people with others. It is not that simple. Today we have over 10,000 members in the UK
alone. Someone requests every listing we have. In our system, we speak both languages – corporate and charity. Therefore, the company can feel safe. There is more transparency because these non-profits are not going to have to incinerate the products Commented [MAK4]: If this is a US audience maybe non if they do not have storage for them, or feel they have to say yes profits is a better substitute for charities?
to all of it.
ALLISON
And now you have expanded beyond the UK?
MAY
Yes. We have a partnership with the royal family in the UAE.
The Princess approached us and said they really love what we are doing. They were interested in the social impact space and 23
the ESG (environmental, social, governance) data we collect, and they wanted to roll this out. So we signed a contract with the ministry of climate change and the ministry of community development. We are also in Spain. We got into that country through one of our global retailers that we know well. We worked with the Spanish post office to handle undeliverable items from Amazon or other online services that end up in the warehouse. These packages sit there for a period of time and then have to be disposed of, so they were usually incinerated.
Now they’re listed on our platform. We have also done work in France and Germany and we are being pushed into Italy. In the U.S. we have worked with Invesco Perpetual in Atlanta and Commented [MAK5]: Spelling adjusted Houston, and H&M in Milwaukee.
ALLISON
Can you share with me what it was like to bootstrap the business?
MAY
When I first set up my business using my own money, I did not leave my job at the bank because I did not have the financial stability to do that. The second year, I had to leave because I was getting too busy. But clients were using it for free. I went to the venture capital companies I knew at that time and not one person gave me money. They all asked me what my market cap was, but it did not exist. Four years later, McKinsey, PwC did Commented [MAK6]: It didn’t exist.
studies and it became possible to explain. This is something called circular economy, which is now a 4.3 trillion-pound industry. It is all about sustainability and being responsible with what they produce and how they make and get rid of products.
We sit under that.
Commented [MAK7]: Convo seems to jump here to another point and misleading – we are not a non profit. I would delete.
For the first four years, I had to bootstrap because no one gave me any funding. In the beginning, it was difficult because 24
money was running out and I was very overworked. But after that first year, I was figuring out the pricing model and I realized we could charge companies a fee to list their items. It could be annual, or they could pay as they go. It would still be cheaper than the waste disposal and incineration costs. Through honest conversations with the corporate companies we had on board, they agreed to pay the prices so I could sustain myself and outsource a web development team.
Once I had that market cap, I went for VC funding and secured just under a million. I was one of very few solo female founders to raise that much. In fact, last year less than one percent of the money given out in the UK was to female founders.
Now, with climate change on the agenda, we are speeding up.
We are a team of 10 people and we aim to be 25 this year. I only hire good, talented people on the same mission with the same commercial conscience as me.
My instincts and stubbornness told me that the clients would pay and that this was working. We were working with restaurants, construction companies, retail products, and they were going in less than 24 hours on a site reservation. For example, we did NHS medical equipment that went to West Africa to rebuild hospitals in the Ebola crisis and war conflict.
There was real satisfaction knowing where those items were going.
Being an entrepreneur is 80% a mental game, 10% business, and 10% craziness. Year two was the crazy stage because we broke even. It was a little bit of money, so at least I could pay myself a very basic salary and pay my mortgage, but a coffee was very expensive for me and I had no holidays or dinners out.
I got to know which friends were happy to buy me coffee. I 25
really appreciated that support. People probably thought I was crazy, but it paid off in the end.
ALLISON
Can you expand on why female entrepreneurs fail to get funding?
MAY
I think there are two main reasons for this; however, I am going to try not to stereotype men in this because my VCs are men and they have women on their boards. A lot of unconscious bias does exist, but often as females we are not confident when we go in. I saw a lot of companies founded by men with big plans get a lot of funding on zero revenue. I was making a profit and could not even get a dime. I wanted to know why they could get the funding and I could not. It was because they were good at faking it until they made it.
In the early days, I did doubt myself. I had no one to talk to but something inside got me going. I also had many experiences when I was told I would not be able to raise half a million dollars. There were also people trying to give me very bad deals because they thought I was desperate. Sometimes I am asked harder questions as a female and very different questions than my male counterparts even though we were asking for similar amounts of money. One person even asked me when I was going to have babies. Instead of being really offended and angry, I just decided he was not the right investor.
I am a smiley approachable person and I noticed people were not taking me seriously enough. Once, I was in a bit of a bad mood and had to go pitch these investors. I thought it was a waste of time because my business did not really align with their criteria, so I went in quite miserable. I basically had the 26
attitude, “Here is my business, take it or leave it.” They offered me money and I realized perhaps I should try smiling less. From then on, every time I went in with a serious attitude, I was offered money. There are interesting things that I have heard from females. For example, they discovered if they pull their hair back, people will take them more seriously. Being a woman in this industry toughened me up to focus on how great my business was. It is not about playing the pitch game; it is about people knowing their worth and value. I do genuinely believe things are changing.
Somebody once asked me what it was like to be an ethnic minority, sole founder, and female with a business model that has never been done before. I told him I wanted a challenge. It is the same when people call me a social entrepreneur. I don’t mind being called that, but I am just an entrepreneur leading a business that will soon be the set business, like how every company today is really a tech company. In the future everyone will be a social entrepreneur because they will have to be.
ALLISON
There is a time and place to be authentic and a time and place to speak the right language for the room because it is human nature to find tribes like our own.
MAY
Culturally and behaviorally I must approach each situation differently. I am doing this like a chessboard. I write every piece slowly and surely. It is about learning the strategy and techniques. After I fundraised and got my money, my VCs were already introducing me to investors for my next round, a year and a half later down the line, to create relationships because it is like a game. The gender piece for me is not an issue anymore because I have proven the business. I just need to get people 27
over the line to show that this is a credible commercial business.
Rather than talking about the environmental impact and the social impact, I focus on showing our revenue, what we do, and how we could strategically grow. I kept it clean and clear. I think if I hadn't gone through those things and had not bootstrapped for four years, we would not be where we are now.
ALLISON
What does success look like for your company?
MAY
I believe Globechain can go global very quickly. Ultimately, if we can give back and do good through being commercial and profitable and inspire people to do the same, everybody will be in a better place. Success looks like being able to change an industry and help people at the same time. It is a new life for unwanted stuff. A thrown-away table could be the table where a family of 10 can eat dinner and feel connected. The table could be used by people setting up their own business. It can let us help them save money directly. That is most satisfying bit. We can create local and global supply chains.
To learn more about May Al-Karooni:
Website: www.globechain.com
28
BUILDING A BUSINESS ECOSYSTEM
Business Lesson
SKYLER DITCHFIELD
Founder and CEO of GeoLinks (USA)
“I don’t want to tell people how to do their job.
I want people to be intrinsically motivated, energized and really enjoy coming in here every day.”
Skyler Ditchfield is the CEO for GeoLinks, which is a three-time
Inc.
Magazine’s
Inc.
5000
Fastest Growing Companies in
America and recognized as one
of
the
Best
Entrepreneurial
Companies
in
America
by
Entrepreneur Magazine. Skyler has founded, sold and bought
companies throughout his career and has received honors such as 40 under 40 from Pacific Coast Business Times; Most Influential Leaders from San Fernando Valley Business Journal; 30 Most Inspiring Entrepreneurs from Insights Success; and Top 100 Innovator in Diversity and Inclusion -
Inc. 5000 over multiple years.
Brand promise: Advanced and affordable internet connectivity for all people.
telecom * wireless technology * fiber optic networks * hiring market penetration * debt-free * capital government regulations competing with giants * out-service the competition * culture 29
ALLISON
What is it you do and deliver to the world through your business?
SKYLER
The name of our company is GeoLinks. We originally were named California Internet. When we first started that name seemed like it had a tall ceiling, but it turned out the name was geographically limiting us. We rebranded a little over two and a half years ago to GeoLinks. We are a fixed wireless internet service provider. We are diversifying from that in next year into fiber optics and a few other things as well. We provide internet services to businesses, residents, anchor institutions, and government institutions.
ALLISON
I am extremely impressed by the hustle in your personal story.
Can you tell us about your early years?
SKYLER
I have had entrepreneurial spirit and drive since I was young. I always loved the opportunity to make money. One of the earliest things I remember doing was taking the food out of my grandparents’ cabinet, preparing it, and selling it back to them. I would sell anything I could, lemonade, hot dogs, candy, arts and crafts, and blood oranges at the farmers’ market. As I got older, I was drawn to technology and computers. I started playing with computers when I was about ten. Then, I saw opportunities to buy computers on the classifieds and resell them.
I got my first job doing spam email marketing when I was 15 or 16 years old. That was brand new at the time. I really was involved in the computer side of things. Right after high school, I had a job opportunity to work for MCI WorldCom as a 30
network engineer when things were booming in the dotcom era and Silicon Valley. When that came to an end, I took a much lower paying job at a computer repair shop. On my second day, I realized I could do the same type of business they were doing and do it better. I went to lunch and I decided that instead of driving back I was going to drive home, quit, and start my first business, a computer repair business out of my home.
I grew that business from my bedroom to a 110 square foot office that I ran to an 800 square foot office to a 3,000 square foot facility out of our little hometown. We grew that to about two and a half million of revenue in five years. Then I sold that company and moved on. I dabbled in a couple other little things in business. I had a couple of failures and a couple of bad partnerships, but those are things you learn from.
I started GeoLinks in 2011 with my cousin who is my partner and co-founder, but also with the love of my wife and daughter.
They have supported me through the entire growth of the business. I would not be here without them. In the early days, my daughter was in a car seat while my wife was driving, and we were putting flyers on homes for the first year or two setting this business up. My family was here every step of the way and I was working another job full-time while we were doing that, to support ourselves.
ALLISON
With GeoLinks you took on two big goals, to enter space already occupied by big players and establishing a mission to close the digital divide by bringing internet to the underserved.
SKYLER
Everyone told us we were crazy and going to fail going into this industry because it was dominated by giants. That motivated me 31
to succeed. I looked at the opportunities that were the low-hanging fruit. We got a foothold in rural residential areas that did not have much competition. We went after homes that were on satellite connections or had no connectivity at all.
That was about the first 18 months of our business and it took off very well. We ended up getting penetration rates upwards of 80% in those areas. We were getting about three times the average monthly revenue per user that we would get in an urban environment because they were used to paying satellite rates. I knew that I wanted to take the business much bigger and to scale it. To do that I ultimately knew we had to go head-to-head with the big guys. About two years ago we pivoted to business services in the urban marketplace. Our strategy was to identify everything that they did poorly and do it vastly better. I knew the big guys struggled in terms of customer service and technical support, but we could deliver there.
ALLISON
Can you talk about the broadband space, the products, and clear fiber?
SKYLER
Clear is what we branded our fixed wireless microwave fiber hybrid. We use fiber optic backhaul, and then we do fixed wireless for the middle mile or last mile. Sometimes we use it for the whole distance, it depends on the design and the amount of terrain that we are trying to cover. Out there, there are fiber optic networks that people hear a lot about. People do not hear a lot about cellular. They do not hear a lot about fixed wireless.
Fiber fixed wireless is one of the oldest technologies. We have been using since the 1940s. Our military uses it across the world. It feeds a lot of the backhaul of our cellular networks.
People think everyone needs fiber to their home. They do not.
32
While that's a great idea, and it happens in countries that are a lot less geographically dispersed than the U.S., it is not really realistic in the United States because we have so much geographic disbursement that we need a hybrid network that utilizes multiple technologies and picks each technology for whatever is best for that topology. That can be a combination of both. There has been so much cemented in thinking that we need one or the other that it has taken me years of trying to educate people at the state and federal level to think differently.
We need to pick what is best for the actual application so we can get something deployed. A gigabit to every home would be fantastic. If that takes until 2035, however, we have missed generations of people and kids, which would be a travesty.
ALLISON
You built your business with the goal to out-service the competition. Can you tell me how you built a culture and made sure that everybody on the team fulfills the mission?
SKYLER
I am always grappling with how we continue to maintain the culture as we grow and get bigger. Now that we are 67 people versus six, it is a lot different. I came from a mindset that people should treat their customers how they want to be treated. The same goes for my employees and staff. I worked 18 jobs before I started my first business and I found myself quitting within a week or two at all of them because I just never liked them. I did not see an opportunity to rise. I did not find them interesting, period. I have tried to create a workplace where there is a fantastic opportunity for employees to elevate themselves and try to create an entrepreneurial spirit within the company. We give the staff a lot of room to bring their ideas to the table, so we can work collaboratively, and they can influence the direction of the company. I try to make that a viable opportunity 33
for everybody and give them a lot of flexibility in the workplace. I have told everyone that comes in here that if I must be their boss, this is not the place for them. I do not want to tell people how to do their job. I want people to be intrinsically motivated, energized and to really enjoy coming in here every day. Obviously, it is still work, but we want to make it the least work-like as we possibly can.
ALLISON
Is there something that you do special in the interview and hiring process?
SKYLER
When we started to evolve from a tiny company to a little larger company, I thought I could hire some people who worked at Time Warner or AT&T and bring in a vast amount of knowledge to enhance our company. I found those people were very hardened in their ways. They did it the way those companies did it. They had been there a long time, they demanded a higher salary, and they really did not mesh with our company. They did not move at the pace we moved. We stopped looking for experience and started looking for people who were fast learners, had the right attitude, and had the right cultural fit.
After hiring them, we could teach them and train them. Our average age is just over 30 years old. Almost nobody has telecom experience outside of our company. Everyone has been taught here. Our employees do not have to unlearn bad lessons from old employers, and they are more loyal to the company.
Ultimately, I think, they value their job more because they were really brought up within the company. We have had people that have doubled their salary in two years or more. Our president, Ryan Adams, started out as the warehouse manager. Through 34
six different promotions over five years, he worked his way up to be president of the company. He will tell people that anyone can become president. We try to really promote innovation and help people think about how they can advance themselves in the business.
ALLISON
You are a big believer in people and possibilities.
SKYLER
It is why I am passionate about closing the digital divide. The internet is the greatest resource for all learning. People who grew up in a poor area or rural area did not have access to a lot of things, but internet is the equalizer. If people want and have the desire and the drive, they can learn anything online. My motto in business is if something is in their area of expertise, let us look at internet solutions and data connectivity. People must have a level of self-confidence and reliance to do that. They will be using the internet for research, but they also must go out and find people who have experience and reach out for help so they can continue learning.
ALLISON
You have also become an advocate for your industry.
SKYLER
At first, we had not gotten a lot of exposure in the political realm, and that was something I wanted to further dive into. I just started working through my network and through my connections asking for an introduction. A year later, I was lobbying in Sacramento to push forward an internet bill for about $330 million that had been defeated by the incumbents. I helped reeducate some of the legislators on that.
35
Then I continued to expand that work and I ended up being nominated for the broadband deployment advisory committee for the FCC. Now, I have a two-year appointment as a federal employee there and a voting member. Those were all things that seemed extremely out of reach to me before, but it was just taking one step after the next and not letting the door slam in my face but instead turning around and finding another door to go into.
ALLISON
What do you see as the next phase of evolution for GeoLinks?
SKYLER
The next phase is to take in institutional money for the first time. We have one angel investor who came in about four years ago, but other than that, we are debt-free which was something that we accomplished this year. We have no institutional money in the business. We are going out for an equity round to bring more capital in the business. We have built the platform now and we know it is scalable. We have really redefined the fixed wireless industry, which has been dominated by mom and pops for the most part. No one had really scaled it to a business that could get up and be a regional competitor. Our goal is to really dominate the West Coast by bringing in additional capital and making an extremely hard charged run over the next five years to really own the California, Nevada, Arizona, and Oregon marketplace.
ALLISON
Is there anything you would do differently now knowing what you do?
36
SKYLER
There are a lot of things. I would not raise the money too early.
I think that is a great idea. People should not elevate their lifestyle too early. I have had a lot of other entrepreneurs come to me over the last few years, asking for guidance, asking to be bought out, and things like that. Their biggest issue was either some of them raised money too early, sold out huge parts of their company, and they became strangled and forced in the direction of their new financial overlords, or they grew the business and started spending more for their lifestyle. They were making more money than me, but they are spending it all.
Therefore, they could not go into another growth cycle because their business is trapped, and they are trapped because they don’t want to cut back on their lifestyle expenses. I did not take any money out of the company for three years. No salary, nothing, and then I had a modest salary for several years after that. People need to keep that headroom in their business so when the opportunity to grow comes, they have the capital for it. People should live humbly for as long as they can because, ultimately, they are going to get bigger dividends down the road.
ALLISON
Where do you see yourself as an entrepreneur in five years?
SKYLER
Hopefully, we continue to scale the company. Our five-year goal is to take it to a billion-dollar valuation on the projection that we put together. We have taken down the investment round.
We have really executed on that across the board. We have provided connectivity to a lot of rural people that did not have it. Schools and libraries are a passion of mine as well, and we are working on that. Maybe we even exit, and I take life a little 37
bit slower. As my wife has said, I probably cannot sit still and retire. I do want to create a financial event for all the employees who are here today that is significant in their lives as well. It is especially important to me that I created a lot of value for them, a great work experience, and some financial liquidity that's substantial as well. It does not happen instantly.
To learn more about Skyler Ditchfield: Website: www.geolinks.com
38
3
Concept
common mistake made by individuals is they will grab Ah old of an idea they feel is so powerful they will want to immediately run with it. However, unless it has been vetted, adjusted and refined, it may not be something that has commercial value. It could be a ‘nice to have’ solution but not a
‘have to have’ concept that will earn money.
In fact, you must be aware that one of the top reasons a business fails is because the founder goes all in on a product that not enough people want or are willing to pay for.
You need a ‘have to have’ concept that 1) you fully believe in and 2) there is a marketplace for – and that may take some brain work to get to.
I appreciate the first chapter of the book That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea by Marc Randolph, co-founder and first CEO of Netflix, because it is a great example of how he and his partners went through many ideas before settling on testing the concept of rental DVDs by mail. In fact, their initial objective was to simply start a new business that could be profitable and sustainable. They never envisioned the billion-dollar, world-dominating organization that we all recognize Netflix as today. Along the way, they discarded many business concepts until they settled upon one they decided to work with. They tested it, challenged it, 39
developed it, and allowed it to evolve and change. You must be willing to do the same with your ideas.
Concept rule #1:
Embrace the problem you are trying to solve but be sure there is a customer for it
Simply re-stated, this is the customer-centric ‘what’s in it for me?’ principle.
There are many reasons businesses fail, but the most obvious one is that you are building a product you think is great, but people either 1) do not really want it or 2) are not willing to spend money on it.
Whether you are just getting underway or have a business you are trying to grow to the next level, you need to consider if you are starting with the right questions. And to be clear the right question is rarely, “How do I sell more of something?”
Often you must make a long list of questions that will lead you to the right concept to vet. The questions should always be focused on the needs, desires, and problems for your target market and not just the product you think you want to push.
Your goal should be to stretch your thinking and be open to all possible outcomes and opportunities, and then bring it back in to a laser focused brand promise and product strategy.
Drill down to the mind of your customer or potential new customers and what they desire. Be curious about what you can do to help them:
40
CONCEPT
Build health
Build wealth
Build beauty
Build happiness
Remove a barrier
Resolve a pain point
As you work on your concept you need to consider if it is a big enough problem to solve. You may be in love with the concept and yes you may think there is a market, but you must test that theory. And as you think about your market, do not place geographic boundaries on your thinking if you can extend your reach beyond local borders. Even if you have a physical location, you can sell goods and services digitally.
One thing I dislike is when people rush entrepreneurs to create a customer avatar, as if you are clear on this specific buyer with whom you will have guaranteed success. Do not be drawn too quickly into this false promise.
Before your micro-dive into the
perfect buyer avatar, you need to
take a macro-assessment of the
totality of the market you will
serve, and be able to confidently
address the questions:
So what?
Who cares?
Who will open their
wallet?
Who will be part of your loyal community?
41
I highlight ‘who will open their wallet’ because it is typically not difficult to find some group of people who may think your product or service idea is great, but would any of them give you $10, $100 or $1,000 to try it? As you tip your concept upside down and sideways, thinking about the ‘point of the wallet’ is critical.
Here are some additional discerning questions for product development:
Can you monetize the solution you offer to the problem?
Is it a great idea but one that has a narrow market potential?
Will the joy and experience of your brand be so great that people will exchange cash for your offer?
Are there data points that confirm if you start the business, it will be able to sustain itself financially with a predictable flow of revenue greater than the expenses?
This leads us to concept rule number two.
Concept rule #2:
Predict success through research and customer insights Try to detach your emotional ties to the solution you want to offer and focus on data points and consumer insights. As an early-stage company founder, you have a responsibility to own research and development for your company just as much as you own the risk of failure. Your mantra needs to be better data provides better decisions.
In a business, research and development (R&D) covers many topics such as innovation to product launch to expansion and process efficiency. What R&D needs to mean to you as a 42
founder is that it will guide what you need to do to hit the target with your buying audience as well as provide insight into how to reach them in the most cost-effective and time-efficient manner.
In this, I want you to not only think of R&D as research and development; but consider it to mean relevancy and delivery of your products and services.
As a startup there is a lot you can do to test market your concepts before exhausting energy and cash. Here are a few examples:
Pre-test relevancy by polling social channels.
Build an online survey and use low-cost targeted ad placements to drive respondents to the survey.
Rent a conference room through a workspace finder site and invite trusted friends and professionals to workshop your concepts (note, I recommend this exercise takes place outside your home so everyone, including you, understands that this is serious business).
Identify a professional market research analyst who will take on project work to secure market intelligence for you or advise you on where you can locate statistics or purchase lists.
Turn to a local incubator or entrepreneur group to kick holes in your concept or to extend its brilliance and opportunities.
Whatever you do, test fast and adjust or else you risk moving forward based only on opinions and a narrow data set which could lead to a slow and costly death.
43
Determining product viability is only part of the equation. Make sure research includes a review of similar companies in the same space.
Who is the market leader providing a similar service?
Who is chasing the niche you wish to chase?
Who is geographically close to you (if it matters)?
Who could extend and replicate what you will offer?
Make this work very visual in nature, creating one sheets or PowerPoint slides for your competition including their logos, product images, website pages, tag lines, and themes. Buy their products and go through their customer experience systems. Use this knowledge to your advantage. Maybe you want to look just like the market leader so it is comfortable for your buyer, yet you offer more favorable pricing. Maybe you simply want to be sure not to replicate what someone else is doing and add your own twist and niche.
The main point of R&D is that you should be engaged in ideas and conversations that will help you design a strategy that will be a better predictor of success. It will help you identify where to find and connect with your potential audience and understand what the competition does both wrong and right. Ultimately, the outcome of good R&D will aid in the development of strategies that will accelerate how your customers can get to know, trust, like and buy your offer.
44
CONCEPT
Concept rule #3:
Calculate commercial value
Commercial value speaks to what the target buyers will be willing to pay for the product, also known as what the market will bear.
Determining market size and the price point the market will tolerate is based on the customers’ perceived value, their ability to pay and the timing of how they will pay. Whether you are competing on price or have enhanced the value in some way, all founders have to keep their eye on the commercial value of their services compared to the operational costs to safely and securely get it to market. When you combine this with any known sales track record and pipeline potential, then you can start to see the overall business valuation.
45
BUILDING YOUR BRAND
So where will your company go and grow? You may have the best idea in the world, but if you cannot get the technology or production costs to scale, the profit margins may not be enough to sustain your business. Therefore, you must consider both the short-term and long-term commercial value of what you are trying to do. While you may have tolerance in the first year of your business to operate at a loss, how much money can you afford to burn through until you can operate at a profit? And while that first-year business plan is so important, you must still envision a one, three, and five-year plan for your company. In this future, will the market that buys from you today still be viable? Will your business growth come from expanding your customer base or expanding lines of service offerings or products?
Another point you should
consider is the calculation
for the cost of customer
acquisition (CoCA). Plan to
measure how much you will
need to invest to acquire a
new customer in marketing,
advertising, sales teams, etc.
It will always be more
efficient to invest greater
funds in a targeted approach
that has a higher conversion
rate over a low-cost method that will take longer and require more searching to hit your desired customer. But no matter the method, you cannot consider the size and breadth of your target market without considering the cost of what it will take to cast a line out and reel in the sale.
46
Then there is the customer lifetime value (CLV) of your customer. This measures the income value from the first sale through the life of the relationship. Can you predict how long a client will be likely to continue to purchase from you or how long they will need your service? Can you upsell additional products?
As you can begin to track loyalty and purchasing habits you can confidently adjust how much money you are willing to spend to acquire the customer.
Making a commercial value assessment on fair market value early on can aid in your strategy for how quickly you will want (or need) to bring in partners, attract outside investors, or obtain loans. While bootstrapping a company is admirable, you need to be sure not to impede growth once you are ready for that cash infusion to get you to the next level.
I understand that as you start your company it is hard to imagine where it may go and grow but successful founders can see a greater commercial value in what they want to build beyond just one product or service – it does not mean they need to do it all in the beginning, but they can see it and therefore future investors will be able to see it as well.
Once you arrive at the point where you believe you have a viable idea and a market it will serve, you can move from R&D
to the next step.
Concept rule #4:
Develop names, beta tests and pilot programs We are going to start this rule at a simple yet complex point: 47
naming a product or service line. Now this is an entire artform beyond the scope of the pages of this book, but you need to have an awareness around it. The names you use will infer your promise and create an affinity.
How you will name and market your business and product in our search engine optimization (SEO) cluttered world is critical and not easy. Naming a company and a product is an art form onto itself.
Often, first-time business builders want to select a name that is meaningful to them, but as nice as that seems, it needs to be a name that means something to the customer. If your customers cannot remember your business name, then they cannot conduct an online search for it later. Yes, sometimes the type of product calls out for a creative name and that is wonderful, but all too often a business name needs to tell what the product is and does, especially in the business-to-business (B2B) space. When I speak to this point, I am reminded of Vidusha Nathavitharana, founder of High Five Consultancy (Sri Lanka). When Vidusha was ready to expand his brand into the corporate training and team building arena he could have expanded under his existing company name, but he knew that would not be relevant to the market he wished to engage, so he branded under the name Luminary Learning Solutions, and his dynamic team has worked with an impressive list of corporations across diverse countries and nationalities. Finding a right name that appeals to your customers is key. If you need help, you can turn to one of numerous companies that specialize in naming brands.
At minimum, test names with target audiences. Ask people to guess what the product is based on the name alone. Explain it to a friend and then have them explain it back to you. Tell someone the name, then offer three different price points and 48
ask which price they would pay based on the name alone – the results could surprise you.
Next you must consider building prototypes of products or sample packages of service offerings. My advice here is 1) do not be shy on seeking feedback and 2) be wary of feedback from people who are not your intended buying audience.
If you are delivering a product, seek feedback at the design and prototype phase. Consider what would be the smallest investment you can make to order a production run and share (with a confidentiality agreement in place) with stakeholders whose opinions you value. Perhaps you can offer a pre-production special to a focus group in exchange for input or testimonials.
If you are selling services, do the same. Construct sample packages and garner a response from individuals who could be in your consumer demographics. Benchmark against similar products and ensure your value proposition and price point are competitive for the way you are positioning the product.
If you are not familiar with Russell Brunson, owner and co-founder of ClickFunnels (USA), then you should take time to read one of his books or watch his videos. He is a proponent of replicating success and following proven models. Russell advocates for figuring out the methods that deliver success to the competition and then replicating them to your advantage. In fact, the ‘funnel principle’ dictates that you need to be agile in the customer acquisition phase. Test different ways to attract your customer, measure results, and evaluate the data. Spend a little of your budget across a few test channels until you see one lever move better than the others, which will help you know where to increase your marketing spend in the future. And 49
Russell is not the only one who does this, there are thousands of companies on Amazon that make a great income replicating the top-selling products and marketing their own version at a slightly lower price point because the market need has already been validated.
Do not think this process has to be high tech. I know of a remarkably successful realtor who would send out multiple direct mailers to the same household just to start a conversation about listing their home. Each flier would have a completely different look, feel, and phone number; however, all the calls would come through to ‘Housing Headquarters’ no matter which mail piece was being responded to. At first, I thought this was crazy, but then I realized it was brilliant. His goal was to test his pitch and dominate a geographic area and he did it in a way that no one else was doing.
The point here is start small and validate assumptions so you may go big and bold with confidence.
Concept rule #5:
Protect interests - seek trademarks and patents Bethenny Frankel, founder and CEO of Skinnygirl (USA), is an entrepreneur and tenacious business builder who has achieved celebrity status for television appearances on The Real Housewives of New York, Shark Tank, and more. On her way to launching
phenomenally
successful
product
lines
she
experienced some very public lessons about trademarks and protecting her brand.
Bethenny learned that the two words ‘Skinny Girl’ were not proprietary, but if it was just one word, ‘Skinnygirl,’ it was.
50
Also, even though she was the founder of Skinnygirl, she did not have the sole copyright to the first logo design. As a result, she moved on to the ponytail gal that is recognizable today.
Bethenny also fought off a trademark infringement battle from Skinny Cow (it was ultimately determined a cow and a girl were not similar), and engaged in a trademark battle against Tipsy Girl, which was designed to go head-to-head with her products.
Then when she sold the Skinnygirl cocktail line to Beam Global in 2011, she was smart and retained the rights to the Skinnygirl name under other filed categories, so she was able to continue stamping Skinnygirl on fashion, food, supplements, and more products. If you ever have a chance to hear Bethenny speak, she is quite firm in her direction to entrepreneurs: get your legal house in order and secure that trademark.
The last thing that you want is to engage in a legal battle over your business rights. You need to protect your intellectual property, name, logo, and slogan. Consider this as you build out your business plan and budget: you may need to secure a patent, trademark, copyright, or some combination of these – and you have to be sure you are not infringing on existing registrations as you develop your products.
Go online and do some research. For example, in the U.S. check out information from the United States Patent and Trademark Office. They define a trademark as a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others. It also defines a service mark as a word, phrase, symbol, and/or design that identifies and distinguishes the source of a service rather than goods. Some examples include brand names, slogans, and logos. Note, the term "trademark" is often used in a general sense to refer to both trademarks and service marks.
51
BUILDING YOUR BRAND
You also must ask yourself, is it worth trademarking in other countries? The answer may very well be ‘yes’ depending on your intended growth trajectory. For example, visit sites like the European Union Intellectual Property Office or the Intellectual Property India website to learn more. Chasing these registrations may not be for you, however, once you start your expansion do not hesitate to secure proper legal registrations as needed.
You can file for these items on your own, but there are many simple online services willing to take the hassle out of the process and do it for you. Of course, if you can afford it, the best way is to work with an attorney who can offer advice and expert consultation.
Concept rule #6:
Innovate for future revenue streams
Start small but think big - your business will thank you for it.
Every business owner knows they must begin with a core product or service and provide solid delivery on the brand promise as they make the move from being in the ‘red’ to being in the ‘black’ on their profit and loss financial statement, but even in a company’s humble beginnings, innovation should be a key part of the culture. It is imperative that future stretch goals 52
and potential product lines are viewed as a relevant part of the ongoing scale up and growth strategy.
Great business leaders are thinking about brand extensions and future markets even when they are mastering the world in the present. A long-range business strategy should consider how to enhance the current lines and envision new lines. This is sometimes called generative growth, which in literal terms represents a plant producing flowers or fruits – quite a nice visual aid to meditate on as you think about your future revenue streams. Your company must remain focused on how it will diversify income streams and generate new growth over the course of the scale-up process.
Thinking about revenue streams and new possibilities should be a consistent part of business development in your organization.
In these sessions, consider questions such as:
Do my customers have other needs that are not being met?
Will my customers be willing to tell me what else they want from me?
Should I expand my customer base online or into new geographic areas?
Can I offer a new twist to refresh and improve an existing product?
What are possible add-on items to my current products?
Are there new market channels I can introduce my current line to?
Can I provide white label services for other companies?
Can I incentivize my employees to contribute to increased sales?
Do my clients have potential referrals that I am not tapping?
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If money were not an issue, what new products would I develop?
Who can I partner with to expand my footprint and exposure?
Before I expand, am I sure I have no ‘leaky buckets’ in my current income streams?
The more questions you ask, the more you may find new and even unexpected opportunities. In the amazing founder stories included in this book, Elyse Petersen provides a great example of how diligently she has built up her company Tealet (USA) under the distributed entrepreneurship model delivering high quality, traceable tea from farm to cup. But she also shares that her eye is on replicating the success across other channels of agricultural markets. It is a great example that while she is working her business today she has a clear eye on where she wants to take it tomorrow for future growth. This long-range view will certainly prove helpful if she chooses to seek another round of investor funding.
As much as you should consider growth, you need to never forget who your target market is, and you must value the loyal customer base you have developed trusting relationships with.
As we noted, health, fitness and nutrition expert Jillian Michaels has been successful because she knows the buying habits of her customers and has expanded product lines to meet her customers’ needs, but she also knows what misalignment of new products would do to her brand. While she has developed, invested in, and cross-promoted many items over the years, she knows what would be considered off-brand for her company.
An example she has shared was thinking about work with The Mirror home fitness system. It was an interesting product, but she took a pass feeling the high-tech system might not match 54
financial means of her customer base. She explained it as knowing that her customers will pay an extra 25 cents for milk that is healthier than the regular milk, but they will likely not pay $2 more. That is simply not who her audience is. While she has been amazed by the success of that product, it was not a right choice for her loyal brand audience. By contrast, she has positively moved forward into the streaming subscription space and will continue to seek out new ways to meet her customers’
needs as markets evolve and shift.
Future forward thinkers constantly study the landscape and then dream about how they may change it.
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BUILDING YOUR BRAND
Business Lesson
TOBI DECKERT
Founder and CEO of Shredrack (Germany)
“I totally advise people to go out there and talk to others about their problems.”
Tobi
Deckert
is
an
engineer,
environmentalist and extreme sports
enthusiast and a man writing his own story in business. As the founder of Shredrack GmbH, Tobi and his team
are focused on building the most
useful inflatable roof rack system in the world. Tobi is a forward thinker and Shredrack has received a green product award and stands as an
organization
that
values
employing
people
with
disabilities. Tobi is a unique business personality who has combined the mindset of an engineer with key life learnings gained as a stuntman, extreme sports athlete/model, DJ and videographer.
Brand promise: Providing the leading durable inflatable roof rack system
prototypes * patents * production * assembly * distribution project management * bank loan * learning to delegate marketing * videos * product failure * feedback loops * green ALLISON
Can you tell me about the focus of your brand and what inspired you to build it?
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TOBI
My core business right now is ShredRack. ShredRack is an inflatable car roof rack, which I invented two years ago and brought to market last year. It helps athletes and sports minded people who are traveling a lot to transport their gear on a car roof.
I was always a sport enthusiast. I like to go skiing, kite surfing, and paragliding. At the same time, I wanted to have a serious life. I was motivated for school and to study engineering. I finished my studies of industrial engineering and ran into this job which was also connected to sports.
I was a product developer for a company that developed paragliders, kites, and inflatable event tents. I enjoyed those hobbies and I brought knowledge and experience to my job.
Working there was five years of nice learning and benefits but at some point, I decided it was not enough anymore. I wanted to do something else. I wanted to grow bigger and do my own things. I had all these ideas in mind and somehow when I was traveling and had some competitions in sports stuff, the ShredRack idea came up.
ALLISON
Can you talk about your transition from the corporate world to becoming an entrepreneur?
TOBI
People cannot only have an idea and quit their jobs. They cannot just find an investor and start their project. It is a process. People need to develop the idea in their head. They need to develop the process. They need to know how they will do it and have to learn to do it. When I started, I was still working in the company. I was already thinking about doing 57
technical drawings. I would do my daily job at home for my own ideas. The most important thing is for people connect with others and talk about ideas. They need to get a prototype if possible, with a low budget base. People should not spend money until after they get some feedback.
They can get feedback from their family and friends, but they should also get feedback from people they do not know because those people will give honest feedback. That is how people know if they are on the right path or not. At this stage, they are still able to switch around to adjust their procedure. This was the way I did it. I looked for all the details of all the steps in the process.
I made mind maps and I listened to a lot of podcasts. I did online courses and educated myself after my studies. The world is so fast and complex, especially in the online world, no matter if it is a digital product or a physical product. Both are super-fast and people need to keep up with the speed otherwise they will not be successful. I am very convinced of that. At some point people must understand robots and algorithms or keep up with them, or the people are going to have problems and spend a lot of money.
ALLISON
You've made some great points about how to keep a low budget but at some point, you had the tipping point where you stepped up and went all in. Can you talk about that?
TOBI
I reduced my time working. I started working part-time. It started with taking Fridays off. Then I started taking Thursdays off. I had two days in the week for working only on my business, but I still had my income. Then, once everything was 58
developed, everything was tested on a low budget base but then I had a big invoice for the first production of the first thousand pieces. I needed a big amount of money and I needed to figure out how to get it.
That is when I started to think about how I was going to finance this. I wondered if investors were interested or if I should get a loan. I even wondered if I could get family support. It sounded so nice to be in the start-up world and to be connected but it turned out that all those guys in their penguin suits at all those connection meetings weren't helpful because there was little trust. Those investors at this early stage were willing to give me some money but the percentage of the company they wanted to have was incredible.
ALLISON
Many of the entrepreneurs I have talked have to decide how fast they want their company to grow. Some may want to be slower and retain more and others might want to move faster. I imagine it is a tough decision.
TOBI
Especially when people have a good idea, like a product, there are platforms like Kickstarter where they can easily launch things. It is not that easy in the beginning because people must prepare things and they have to have a marketing background.
People need a community to have this initial launch on those platforms. For me that was not an option. I needed to find investors or get a bank loan. This was my path, so I had a lot of meetings with my bank and accounting people. I had my prototypes in my hands. I showed it to them. I was dressed up properly and I was looking at videos of how to behave in front of a bank person because I am a sporty guy, I am always easy 59
and I never wear suits. At this point, however, I did. I totally convinced the banker and they decided to go for it.
That ended up taking four to five months because people need a lot of documentation to get a loan. Their business plan must be super clean. Even if the documentation is fine, it still takes a lot of time before the bank finishes all their calculations until they finally have the money on their bank account. Luckily, during my studies, I learned how to write a business plan, which was a big benefit. It's always helpful to get familiar with the business plan canvas because they will learn by knowing how a business is structured, how it works, where the income comes from, where the costs are, and how to plan it. This is the basic knowledge people need to dive into and the figures are especially important for the bankers. People need to be convincing and authentic.
ALLISON
Did you have your patents before you went into the bank or did you get them after?
TOBI
I had an exhibition where I had to present my product. There are many start-up exhibitions or meetings and for that, I needed to have the patent pending because at this stage the product was already published. When people publish a product and it is somewhere online, they cannot have the patent afterwards because then it is already known.
I had to be careful with that. I collaborated with a patent lawyer and she did all the urgent paperwork to get the patent pending.
In the meantime, two or three years later, I met a nice guy from Luxembourg, who had a startup called Bernstein, Bernstein.
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They secure people’s proprietary knowledge with blockchain technology.
That means people can upload their documents and ideas and then get a timestamp out of the blockchain that says they are the owner at this moment with these documents. So far, this is accepted in court. It is growing and is the future because it's much faster and much cheaper than any of those very complex patent situations.
ALLISON
After securing the patent and the loan, what came next?
TOBI
In the beginning, I had lots of friends supporting me, but at some point, everybody wants money and to live. So, that could not continue for long. It is always nice to have a good team. I support not having fixed employees because then business owners do not have tax issues or contracts to deal with. I only work with freelancers. There are many platforms out there where people can find perfectly fitting freelances in different salary stages.
People must see their company as a piece of several puzzles in several departments for financing, marketing, engineering, and sales. For each department or section, people can find experts out there who work remotely. My goal is to be independent and not fixed in one office.
I can work whenever I want and where I want, and I want to give this benefit to my employees. I think that this is the future.
People are no longer working nine to five. The people are diversified into several projects with their expertise. This is an area they perform well in and have fun with. Having fun is 61
important because it is an important factor for motivation. For my team and myself, it is always important that we have fun with the stuff we are doing. No matter if it is photographing video or Excel sheet filling or calculations.
ALLISON
Are your virtual team and the freelancers nearby or spread out?
TOBI
They are absolutely not geographically close to me. it is totally spread out. Some of them have a lot of control, it depends on the kind of person they are. Some people need guidelines, structure, and a plan they must work on. For these employees, we use a platform called Asana. It is a project management platform, and it is well known. It is organized differently in several stages. We have scrum meetings and scrum boards of tasks, but we also fixed processes of several things. Sometimes it is good to have a guideline. Sometimes, it is good to be totally free and creative. Business owners need to find their mix. They cannot just say that their employees can do whatever they want.
ALLISON
How are you going to market to get the word out about your product?
TOBI
This was one of my biggest pain points because in the beginning when I had the bank loan, I thought I was going to make a big push into the market. I invested in Facebook, Instagram, and Google. I put a lot of money in there. I had nice sales but after this big investment and peak, the sales went down. This was a critical moment for the company. That was the moment I realized there was too much workload for me as a product developer and engineer, so I had partners do my 62
website and marketing stuff. The goal was to build the company organically. We did a lot of block writing.
That is why we have a sub brand to target specifically to differentiate target groups and do the advertisement precisely.
When people market the old school way, like printing and putting banners somewhere, they might reach a lot of people, but those people are not interested. Nowadays people are overwhelmed with all the marketing offers from all those sites.
When we get targeted specific advertisements, at least we are not bored with the products. Sometimes there is some interesting stuff because it is connected to our interests. That is where we are focusing now. We switched to marketing through more videos and blogs. We collaborated with some friends and people who delivered us some content and they get some benefits from us. So, the marketing was much slower but much deeper. Right now, we are constantly growing with less money paid which is important.
ALLISON
Are you talking about YouTube channels or micro videos on Instagram?
TOBI
People must be really careful about the videos they make because there are different styles for different target groups with different cutting speed, music, pictures, and colors. We realized when making these videos and putting them online, it does not matter if the medium is YouTube or an advertisement. Some adverts are going through like bombs and reach a lot of people and some do not.
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For example, I like video cutting and I liked filming the videos of the products by myself. When I am with my friends, we are out there and having fun. We do this anyway. We produced the image clip which took a lot of effort and a lot of time. All the different places where the product can be used, the cutting, and the music selection took a week. In the end, we launched this video and it reached one thousand to two thousand people organically.
Then I made a simple video with my phone while I was walking outside. I talked about some emotions behind the scenes. This video was produced in 10 minutes but facebook decided it was interesting for their viewers and in one day it reached 10,000
people. This is something people really need to test. There is no formula, but people can do testing on a low budget base and experience for themselves which way works and which way doesn’t. We test the videos and then try to expand the marketing strategy with a funnel and create more videos connected to the product. If the viewer is interested, the seller can really get them into this.
ALLISON
Is there a time that you wish things had gone differently?
TOBI
It is not easy. People face issues during their journey as an entrepreneur. We had some trouble with the production because we had some issues with tools the customers needed to complete the steps. It is hard to find a solution for that. We always think that testing in advance helps to prevent problems but in the end, some problems cannot be avoided. This was an uncomfortable time for me because people were calling saying that the product was not working. Then we had to reproduce some stuff and it cost a lot of money and time. People need to 64
keep a clear head and not be frustrated by this stuff. We did some scenario planning, and we were living the worst-case scenario.
People must motivate themselves from the inside and they need to find a way to do that. For me I used sports to clear my head and then I started listening to podcasts and stories from other entrepreneurs. I would listen to them talk about how they failed because I felt like I was in the same boat. That gave me some motivation to continue. When I started again, I realized I had not been going out and visiting friends. Then I started going out and talking to people who could give me a helpful tip or a contact who can solve these problems.
This pattern solves so many issues for our future products and ideas. I totally advise people to go out there and talk to others about their problems.
ALLISON
Where do your see yourself and your company in five years?
TOBI
I am dreaming of telling you that we have a lot of nice sales and a lot of capital left over to put into nonprofit organizations which have some natural impact. When I am outdoors doing sports, whether I am in the ocean or in the mountains, I can clearly see glaciers going back. The oceans are getting more and more polluted and there are so many nice ideas out there.
Startups who are fighting with those issues. Those fights always cost a lot of money and people need to have this money to have an impact. In five years, I want the business to be running so well that I will have extra funds to go into such projects.
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We are ready to be super ecological in terms of the materials we choose but in the end it is always a compromise because the materials that do not have such a big impact are much more expensive. It is really hard to produce locally here in Germany.
Currently we work with disabled people who do the final assembly, but the price in the end is so high that people are likely to not pay this price. People are used to these big businesses on Amazon that sell cheap products made in China.
Starting a green company is difficult. People must go step-by-step and already have the mindset to start a green company. To put these things in real life can be a hard journey, but that is the journey I want to take in the next five years.
To learn more about Tobi Deckert:
Website: www.shredrack.com
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CONCEPT
Business Lesson
DAVID BROOMHEAD
Co-founder and CEO of Trade Hounds (USA)
“I am probably the least tech savvy person, now I am CEO of a technology company.”
David Broomhead is the co-founder and CEO of Trade Hounds, a mobile app and social network for America’s 13 million construction and trade
workers, providing them an online
forum to share their work and life experiences. Broomhead was at Babson
College earning his MBA, when he began engaging in conversations, research and development with both workers and employers to deliver what the market was missing.
Brand promise: Connecting tradespeople to a community and work opportunities while streamlining the sourcing of qualified labor for employers
mobile application development * union * construction community engagement * startup team * VC investors growth marketing * revenue strategy
ALLISON
You are Australian, but you founded your company in the U.S.
Tell me about its focus.
DAVID
Trade Hounds is a mobile application that is trying to bring 67
together tradespeople of America. If people are wearing a hardhat on a job site in America, we are trying to bring them together as a community. We want to help them communicate better, network better, and find jobs. We are building a digital community and a digital home for the professional construction worker of America.
ALLISON
I understand there is a very personal ‘why’ behind your mission.
DAVID
I believe that tradespeople are probably some of the hardest working professionals in the world. They work in harsh conditions for long hours on their feet. They are not in an air-conditioned room sitting in front of a computer. They are outside facing extreme conditions while lifting heavy gear and they are being underserved in their communities. I come from a family of tradespeople in Australia and I grew up on job sites, working with my uncles and my cousins doing odd jobs on the weekends and on college holidays. I learned the value of a dollar and the values of a hard day's work. I learned about what goes on at the job site and the comradery that occurs there.
I love getting my hands dirty, but my parents wanted me to get a college degree and sent me to college. They thought having a college degree was the only way to get ahead in life. I enjoyed college, but I disagreed with my parents’ end goal, which is why I am back in the trades now. Five years ago, I was helping my uncles’ business painting a house on the weekend and I saw how my uncles were trying to source work. They were talking to their buddies. Their business was run by word of mouth. I suggested that my uncle get on LinkedIn, but he did not know what it was. At the time, I was naïve, and I told him that it was a professional network for everyone. I was totally wrong.
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I went home and looked at LinkedIn, but there were no pages for any trade. In fact, there was not a professional network or community on LinkedIn that we could use, and I wondered why no one had built something like it for our industry. There is a lot of turnover of work and scheduling in construction and sometimes it is very difficult to match up a work schedule with the future projects. It made sense that there should be a LinkedIn for this world of trades, but no one had built it.
After doing a lot of research I discovered some people had tried to do what I was doing but they were all resume based platforms or websites that didn’t work because many people in this demographic don’t use resumes. The work they do is completed with their hands, and it’s very hard to portray the quality of that work in a resume. These men and women communicate and share their work through photos. So, we knew if we were going to build something, we needed to include image recognition and components like that. Tradespeople don’t carry around laptops, they carry around their tools, which made me realize I should build a mobile application.
Smartphones have become a utility for tradespeople, so I built a mobile app that was a community for tradespeople because they use such a niche language. They are craftsmen and artists who create and show off their work. People outside of their universe do not understand this community and why people are so passionate about it. In this community, other tradespeople in that trade will show appreciation. If someone is an apprentice, he can post for help and advice on the app so experts in the trade can help him.
The experts can show off their work and people can appreciate it or get feedback or advice from it. The community we built is 69
a large amount of people coming together and sharing, collaborating, getting advice, and eventually getting jobs.
ALLISON
How did you make the leap from Australia to the States?
DAVID
I quit my job, broke up with my girlfriend, and went to a college outside of Boston called Babson. I did a one-year MBA where I dived in to tackle the problem head-on. While I was out, I learned a lot. I had never started a business before. I have a financial background; I know nothing about technology. I am probably the least tech savvy person, now I am CEO of a technology company. I have learned a lot of things the hard way through failure. I came to America by myself with no money and no network.
ALLISON
Yet you came to the United States with this in mind?
DAVID
Yes, in the beginning I got my hands dirty asking users and customers what they wanted. I asked them how they currently worked, and if there were pain points or problems with it. I asked them if they would use an app like this if they had one. I had the current product all sketched up on a 10-page slide deck five years ago. One morning I was interviewing a contractor to get feedback. He resonated with the problem of not having a community because he was growing his business and there was no digital platform for him to use. This was Ron Fein Construction and they wanted to give me $1 million to develop it.
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That was a validating moment for me and that was when I knew this was going to happen. If things did not go well, I would have to go back to Australia and get another corporate job. That motivated me to work hard to get what I wanted. I did not take his money because back then I had no team. The product was a 10-page slide deck and idea, but I ended up setting up with some of my own money and some money from my parents.
That is how I went out by myself and started my business.
ALLISON
I am always impressed by how people take the first step when they bootstrap.
DAVID
Starting out in business by oneself can be hard, especially when it is a technical business, and it does not have a technical co-founder. Network and money are very important. I didn't have a network, so it was very hard to connect with people to hire them, to connect with investors, and to get clients. I built a product. I had a poor website that people could use. I launched it in New England with about a thousand construction workers and 50 construction companies on the app.
At first, I made about $40,000 in revenue and had this cool little business going. I got a lot of noise and traction from that.
Carhartt called me to advertise. Other big companies were calling me to hire them off this platform. I realized there was something there. At the time this was a small business, but I wanted to figure out how to capture the whole construction workforce in America.
I really learned a lot in those early days about the customer, how to grow a business, what to do, and what not to do. During that journey I found my current team. I found a phenomenal 71
CTO who has built technology his whole life. I found a phenomenal CII, who built businesses before, so he could help with the operational financial side. I also got a great marketing and growth person who would get the users.
The four of us built this new product and together we have raised $5 million in VC funding and we have grown to over 150,000 users on the platform. We are gaining in strength and momentum and the next year is going to be huge for us and we plan to achieve a lot.
ALLISON
How are you marketing and growing the platform today?
DAVID
We are on both iOS and Android. We use online advertising through Facebook and other social media channels. We use hardhat stickers. The hardhat is a safety provision people must wear on job sites. A lot of workers like putting stickers on hardhats. It tells a story of where they have been and what their brand is.
When people sign up, they put information into their profile the way they do with unions, the location, the trade, et cetera. Then we send them 10 stickers. They may put one on the truck and then give the rest out on the job site. That strategy went well because this demographic is very hardworking and trusting. We found those two strategies have been the best for us to grow the community side of the platform.
ALLISON
Where are you with your goal of expansion?
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DAVID
When we launched, we targeted our efforts on Texas, which is the biggest construction market, and New England because we are based in Boston. Now, we have spread everywhere but we are most densely populated in Texas and Florida. They are the biggest construction growth markets by volume. We are also popular in the rust belt of the Midwest and then in the Northeast.
ALLISON
How does Trade Hounds generate revenue?
DAVID
It is currently free for tradespeople people and we plan to keep it that way. We think this can add a lot of benefit to their lives.
Part of our strategy has been to build the community first without jobs or advertising. We built the community app to help grow that database and network with the intention that when we introduced jobs, companies would come on and pay us a fee to find workers.
One of the biggest failing points in my previous iterations was I had all these job boards for the trades, but I did not have any workers on there. We have now been able to capture the workers through content that they like to consume and share with people close to them.
We must captivate an audience that we can introduce jobs to.
Our value proposition is that workers can find jobs closer to home and earn more money. For the contractors we can get more bodies in front of them. Contractors want people to meet and to interview to try and get them onto the job site. We are offering liquidity to both sides. That is the end goal for us. We want to be the LinkedIn for tradespeople.
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ALLISON
What was the value of obtaining an MBA before you founded your company?
DAVID
People will ask me if getting their MBA is worth it or if studying business is worth it. I always tell them it is best to go and start something and learn the hard way. I wish I could go and do my MBA now because I have so many things that I would love to learn about. It really depends on their journey, where they are, and if they are ready to start a business. When I was in finance, I was unhappy and wanted to start something.
I think an MBA was a great transition for me. I learned a lot from it, but if people are going to start a business as an entrepreneur, the best thing they can do is start it. People will learn very quickly if it is for them or not. My biggest attribute is just my drive and passion. I think that is what helped me attract great talent around me and attract investors. People know that I am going to execute things correctly. They know that if something hard comes up, I am not going to walk away. They know that I am going to walk through brick walls and go to battle for them. If people are like that or have those characteristics, they can be very successful at this game. If they have a great team around them, the team will see the missing gaps, making the others more self-aware of what their strengths are. Then they should fill those positions of weaknesses with great people who use vision and passion to meet the end goal.
ALLISON
What is the vision for Trade Hounds in the next three to five years?
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DAVID
I hope we have millions of tradesmen and women across America earning more money, getting home safely, and their businesses running safely on schedule. The vision is to really improve the industry as a whole. I want to improve the lives of this demographic of these hardworking Americans and even Australians. Eventually, we would like to be a global company.
Tradespeople are in an underserved community and we want to help them get more money and more jobs with a piece of technology. It is win-win for everyone as we will grow our business out of this as well.
To learn more about David Broomhead: Website: www.tradehounds.com
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4
Customers
ne of the more interesting business builders I have met is ODa ve Munson, founder and CEO of Saddleback Leather (USA). In his words, they produce “the longest lasting, most durable leather bags in the world. We use the highest quality of everything we source and put it together to last. We have a 100-year warranty, and our slogan is They'll fight over it when you're dead. ”
Saddleback leather is a confident brand because they strive and deliver what Dave refers to as ‘excessive quality’. He is very upfront that they have expensive things and are not for everybody. But with that commitment, Saddleback has tapped into its customer fan base on such a deep level that when they ship their products, they include business cards for customers to hand out on their behalf when someone offers compliments on the bag. Not unique you say? What about those customers calling and asking for Saddleback to send more cards because they have run out?
As CEO, Dave has fully embraced videos as his secret weapon.
He captures the customer imagination with product reviews at place like Stonehenge and the banks of the Nile, and demonstrates quality through humorous videos. Examples include one that has the bag take on an alligator, and another that offers instructions on ‘How to Knock Off a Saddleback Leather Co. Briefcase’. And living up to the dead aspect of his tagline, he even has a video featuring him with a leather coffin.
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While Dave and the team have fun, the brand promise is real and like none other. If you carry a Saddleback bag, you know who you are and you know you are part of a distinct community.
This chapter asks you to think further about your customer, the experiences you will deliver and how you will fight the battle for time, attention, and brand loyalty.
While you consider your potential buyer and the intersections of market research, sales strategies and customer engagement, recognize that on an amazingly simple level it all still comes down to what information will an individual need to know, like, and trust to get to the decision ‘YES’ to buy from you?
And what will make them do it repeatedly?
With any customer strategy you choose you cannot ignore the realities of today’s buyer that will immediately drive dollars away if not done right:
The power of the ‘elevated consumer’: The ability of the customer to have a strong public voice has changed the game for all businesses. Ensure your strategies allow for and even harness these digital crossroads and conversations.
The scrutiny of the ‘on-demand consumer’: The fickle patience level of consumers who want real-time conversations, support, and delivery. Be sure your systems can address this fast-paced need.
The awareness of the ‘conscientious consumer’: A consumer who will align with companies that have a strong sense of purpose, intention, and credible ways to 78
bring products to the market. Give them a reason to love you, but be sure it is authentic and aligned with your brand.
The swift to judge ‘digital snob’: The group that will give your online platform only a five to eight second glance and decide before they ‘swipe left’ as a big NO.
Be sure to watch these metrics and know how your digital presence is performing.
The impact of ‘native advertising’: Technology has brought forward a precision in marketing to customers based on their online preferences. Make sure you place your marketing dollars in the right place at the right time to optimize the return on investment (ROI) for the spend to attract customers.
The above list represents only a few examples because consumer attitudes and expectations are rapidly changing with each new digital and societal influence that enters our modern world.
As you work through the customer rules consider how you may 1) reduce barriers to gain the attention of your intended buyer and 2) speak in the appropriate voice for them. This is critical because we will always be fighting to be close to the ‘point of the wallet’ or else we will not have a sustainable business.
Customer rule #1:
Know your ideal customer and what will motivate them to buy
The future of business will be centered around like-minded 79
thinkers and values-based communities. Buyers want to feel they are privy to insider secrets or using state-of-the-art technology. Referral networks and micro-influencers will reign supreme.
Great brands will let us solve problems from where we sit on our couch, or
cause us to get off the couch and do something.
For the new founder, thinking about the customer may be a challenge because they may be so in love with their product they can see everyone buying it. But unless you are selling a generic product, you should have a unique brand position. With limited financial resources and needing quick lift-off, focus will be important not only on your perfect customer but equally on what services, skills, competencies, strategies, pricing, promises and joy you will need to demonstrate to close the deal.
Business scholars have written three-inch-thick books addressing the behavioral psychology behind the mind of a customer, but all fundamentals begin with some basic questions:
Who is your ideal customer?
What are the critical needs and desires of your customer?
Where is your customer’s ‘native’ place to be found?
When will your ideal customer likely buy?
Why will you be the company to fulfill their need?
How will you satisfy the customer at each point of their journey with you?
Who else does your customer buy from and what are their strategies?
If you can drill down in detailed clarity on these items, you can begin to draft on-point customer journey maps and sales 80
acquisition channels that will align your product and service to the result you wish to help your client achieve.
Do you still need it broken down in a simpler way?
Consider this model of the consumer need states as represented by Thinkwithgoogle.com (a site for marketing insights, ideas, and inspirations) and how you may play off them in your customer acquisition process:
1. Surprise me
4. Educate me
2. Help me
5. Impress me
3. Reassure me
6. Thrill me
And as you think about this ideal customer, do not limit the geography of your thinking. Your ideal customer may be a world away from you. One of the benefits of the marketplace we operate in today is the ability to sell across a digital field to extend your reach to your niche audience. Your best customers may very well be waiting to meet you in surprising places.
Which brings us to the next rule…
Customer rule #2:
Identify the intersection of the customer journey and the point of sale
Your initial business plan should have a draft of your customer journey. The customer journey is often a visual documentation of the likely path taken to know who you are and how they will engage with you. Your journey map may include points such as customer:
Awareness
Attraction
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BUILDING YOUR BRAND
Consideration/Investigation
Pitch/Proposition
Point of sale
Delivery
Engagement
Retention/Upsell
Loyalty/Referral
There is no one singular customer journey map that represents perfection, but perfection will be your business having a map and living by it. A simple way to better understand this concept is to enter ‘customer journey map’ into your browser and search for images. Exploring what others have done will assist you.
An interesting exercise to get your mind moving is to make three circles and, in the center circle, write in one of your ideal customer profiles. Then, consider where you believe the greatest space exists to connect with your ideal customers in 1) the human space and 2) the digital space. For example, if you are targeting 50-something males who have expendable income and a desire to show the world they are still active and edgy, where could you connect with them in a live, face-to-face experience, what are their online behaviors, and where could you insert your brand into their stream of content consumption? In the first pass 82
CUSTOMERS
of this exercise, do not worry about the cost or means to reach the customer, just write the idea down.
Working with the first circle, you are going to think about aspects of your ideal customer’s human space – their offline native playground. In the second circle, start to write out assumptions about their personal lives, families, homes, cars, habits and how they live and spend money. Around the circle consider who else talks to that customer, what companies sell to them, what business channels connect to them, and so on. What is it that the customer sees daily and what problems and stresses might they have? It does not matter if what you write will provide a viable sales entry point, what matters is that you are thinking about that customer and how you can build a journey map that would appeal to their time and attention capabilities.
In the last circle you will think about where that ideal customer may be found in the digital space or their online native playground. This would be comprised of social media, websites, special interest groups, news channels, gaming platforms, podcasts, and so on. Think of the type of information they seek out in online searches. Understand where they may consume digital content that you can slip into their digital streams.
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What you are starting to construct is your ideal customer’s native ecosystem. What you want to rise to the top are potential strategies, that if employed would place that new customer on the first step of the journey map. This would place your business in the right place at the right time and with the right conversation. It is not as simple anymore as sending a flier or making a call, it is analytics and human understanding that will move you forward.
Through this exercise you may begin to find that what you thought was the obvious way to reach your customer may not be the smartest way at all. It may also help you consider how you can bring in innovation and differentiation, or adjust product offerings. This exercise does something else for you. It helps you construct your content for your audience by bringing through a voice and a brand promise that the customer can identify with. This is the key to why micro-influencers now reign supreme. They connect in an authentic way with their audience in their native habitats.
In business today, one must think of the finite behaviors of the customers we wish to attract to build assumptions about their native positions both online and offline and then test those assumptions. This will help dictate how sales and marketing dollars are spent (digital, print, media, PR, etc.) and where you focus time as a business owner, whether it be in writing content, joining non-profit boards, slipping into the speaker circuit, or being an expert on special interest groups or social media boards. No one has time to be all things to everyone. Choices will have to be made. Remember, when possible, conduct mini-trial tests and then place your money where results seem to best reside.
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Customer rule #3:
Experience drives market demand
Consider what you will need to do in your business to have your customers say to their friends, “This is awesome, you have to try it!”
A success point of many of the amazing, disruptive founders I have worked with is they understand the need to continuously improve the customer experience. Personalized service is the future: curate my products, my experiences, and customer support to fit my needs. If you can crack the code on this, then you may be able to build loyal influencers who will send you referrals.
A great example of a business built on a unique customer experience is Impish Lee. In 2018, I met Kali Taylor Ventresca.
She and her sister, Noelle Lee Ventresca, founded Impish Lee, Custom Intimate Apparel (USA) with a mission of giving their client base the power to easily create unique, contemporary, and exquisitely comfortable undergarments. Clients select the design, fabric and finishes and the garments are made to size.
And it is truly to size, as they offer up to a clothing size of 30
and a bra size up to 44J. Now the price point matches the service, but the customization is their differentiator.
Impish Lee’s other differentiator is the dedicated community following they have attracted. Their website has a section titled
‘some love from the ladies’ which features videos of their customers modeling the product and other testimonials. They know their market and the need they serve. Their fan base has grown tremendously over the years. Impish Lee is a great example of whatever you choose to do, do it for the person 85
who needs you the most. Find your market, be true to it, and include the customer in the experience.
The great thing about a positive brand experience is the waves it produces. A relevant brand needs to not only encourage ‘social amplification’ or sharing of this experience, it also needs to reward it. Recently, I made my first purchase of Chicago Vodka. This purchase combined two things I really like, the city where I was born and the ability to make a great drink. I put on my Chicago scarf and snapped a pic with my tall and beautiful bottle of Chicago Vodka, whose label displayed the four red stars and two blue stripes from the city of Chicago flag. Not only did the brand like my picture, but they also left a comment and shared it on their feeds with a nice note about me. What did I do? Bought more bottles of Chicago Vodka to give to friends.
While this was such a small and trivial interaction the experience was powerful.
Humans are designed by nature to desire experiences. How will you meet this point of need?
Customer rule #4:
Technology can make or break the relationship
The other half of the customer-centric equation is ease of interaction with the brand and your teams - and in today’s environment this is usually centered around your technology.
For years now I have gathered and kept track of technology tools that business professionals should know, but rapid change makes maintaining that list difficult. While once you merely had to navigate databases, websites and apps, the shifts to mobile, gaming, chat bots, machine automation, artificial 86
CUSTOMERS
intelligence, and other intelligent tech offerings are only indicators of what is yet to come. And in this Amazon trained culture, the customer psyche lacks patience. The stakes are high because every business operator knows that how you respond to a customer will end up on review sites with good ratings or negative comments from a faceless person who can dent your brand.
But there is no avoiding it, your customer experience will directly
be tied to technology and the
perfect function of the technology
represents significant pressure for
an owner today.
My advice to you is this: gather
advice and research tech options before you need them, and know that the cheapest technology may not always be the best long-term solution. You may start with a simple basic website or route your business through an open platform (think Etsy, Amazon, eBay, Facebook, Airbnb Experiences, etc.), but as you make strides toward success and company growth, you will need to vet and consider how you will evolve to the next level with an all-in-one Customer Relationship Management (CRM) platform or a more comprehensive Digital Experience Platform (DXP) that will support your business needs.
The good news is the ease of management and the price point on many platforms are now more within reach of the start-up budget. The bad news is the risks around data privacy and security are higher than ever, so you must choose your platform wisely. According to Karolyn Hart, who is a champion for small businesses and the founder and President of InspireHUB
(Canada), young companies are at great risk for security 87
breaches. Statistics document that for small businesses that have a data breach, 60% will close down within six months of the incident. This is one of the driving forces behind why Karolyn has built a turnkey small business tech platform and user community to both provide needed solutions and protect the small business owner from a challenge that is likely not an area of their expertise or priority.
The company founder has to seek out and develop a network of other entrepreneurs and business owners who have gone before them and who will be able to provide the advice they need when it comes to technology.
Customer rule #5:
Recognize shifts, update goals, and realign approaches
This rule can also be simply called the pivot pillar.
When I was positioned in my first director level role, the team was required to read Who Moved My Cheese? ® An A-Mazing Way to Deal with Change, by Spencer Johnson, M.D. (USA) I despised this little business analogy about two mice named Sniff and Scurry and two Littlepeople named Hem and Haw working their way through a maze only to find their cheese had been moved. “How silly,” I thought as I read it. Well, damn those little mice and their story, as it has stuck with me all these years in business. Absolutely, markets shift and business leaders need to be at the ready to adapt to change.
In my book Connect to Influence, I discuss what I call
‘periscope vision’. It is a combination of connecting to people who can see the world as you cannot see it on your own. You must make it your business to lift your head, watch trends, 88
follow futurists, receive customer feedback and mind your data, and you must make sure you seek out connections with individuals in your market space from other countries. In all things you must hold a global mindset. This will help you anticipate shifts and not be caught off guard. It will also help you consider new approaches and developing markets. Change is not always a bad thing as it can hold opportunity for those who stand on the edge and lean forward.
In my years working in non-profits and association management, we were constantly launching new products and campaigns to respond to market needs. This is where I learned a term that business leaders need to be willing to embrace: sunrise and sunset. Sunrise new products and offerings, but be equally diligent about reviewing current products and consider when and how you may need to sunset them. Always have a sunrise idea list that you can be working and validating through the CPM2 principle of Concept, but also set an appointment to review products and services that just may not be worth the return on investment of time and resources.
Time and energy spent on an outdated concept or product (or bad programs and clients) reduce the opportunities for future success.
How we respond to change is how we succeed.
Before I leave this section, I must offer my sincerest respect to Dr. Spencer Johnson and not be too hard on him for teaching me business principles through mice. After all, he has sold over 50 million books in 47 languages, so he does know a thing or two. If you are not familiar with his work, know he is a respected business authority. Among his works, he co-authored The One Minute Manager, a book you may want to pick up if 89
you have never read it, as it will offer great insights as we take on the CPM2 principle of People.
Customer rule #6:
Be the ‘I belong here’ community
We live in an era where brand impressions mean more than ever before. People believe they have more choices and ownership over their buying decisions, so when they do align to a product, they equally want that product to be aligned to them. Modern buyers have higher expectations for brands. If they are a fan, they want to engage in unique and interesting ways that connect them to other brand users. They want the brand to be welcoming, informative, and offer inclusion.
A great brand will make the customer feel, ‘I belong here.
This is essential to my life and success.’
I know you are thinking this is obvious for the B2C (business-to-consumer) markets but even if you serve the B2B (business-to-business) space you need to bring forward your brand personality and embrace your community of customers.
Technology companies are great at this as they often form user groups. But if you operate in the service industry, you need to consider what your ‘affinity group’ would look like.
Dean Grey is a tech visionary and founder and Chairman of Skylab Apps (USA). His company specializes in helping organizations develop tribe-building platforms. Not only does his team focus on providing customers a private and safe place to converge, but it is also designed to turn fans and customers into micro-influencers using science. Here is some insight he has to offer on community engagement:
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“The science of engagement basically means you are trying to drive, shape or reward behaviors to help people step into what they want to become or achieve. It is a combination of what researchers have found out in game theory with all the video games that people play combined with what they have learned in social media.
That if you take an action, even a mundane action on Instagram, and then suddenly you get 55 likes right away, even if you do not mean to have this happening, you are getting such a reinforcement tactic to take an acute selfie that you find yourself doing these selfies unconsciously just because you love the dopamine drip that hits you. And so, I would like to say that unfortunately all of us are getting gamified by default versus by design. And before you know it, you are getting addicted because of all these different behaviors that someone else has set up.
When you really want to learn to shift that around beyond gamification, it is called value reinforcement systems (VRS) where you take the steering wheel and you decide to use the same tactics, but to get your audience to do the things that really matter. For example, when you are going to build a movement or a community of likeminded people around a cause, you are going to need to be able to talk to those people in real time using the technology advances available to you. That means you need to talk beyond email because no one opens emails anymore. And you need a way for people to hop into your community and take a few actions to become the thing that you are teaching to do, where they can track little micro actions, or feel good about their connection to your organization.”
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Mike Morris, founder and CEO of Topcoder (USA), built a different kind of community. Topcoder’s mission has been to provide organizations with a global on-demand workforce comprised of the top talent in the coding and tech space to build new software products, solve complicated algorithms, develop apps, and more. In Mike’s words:
“The whole idea of Topcoder since inception was to create an aggregate, a global community of technology experts. People that are really good at skill sets, like software development coding, complicated data science algorithms, and even designing front ends for new experiences. While that was the initial goal of the company, we were like, ‘Hey, can we find this talent base? Can we grow it? Can we cultivate it? Can we make Topcoder a place where they come every morning and that they come to every night? And then eventually as a place where they get to work from?’ And where we have evolved to over the 17 years is we now have a global community of over 1.5 million people. We are in every single country around the globe and it grows by about 50,000 people per quarter virally.”
Now I ask you, what do you think it takes to build a community of 1.5 million people? While they started with an idea to replicate some of the university experiences and competitions and bring talent initially into Topcoder after graduation, the organization today has professionals at all levels who fully embrace being a community of expert gig workers transforming business on their own terms. On their website you can find call-outs like ‘Join brilliant minds from Brussels to Bangalore’ and
‘We are a community built and designed by our community for our community’. While the front of the mission was to build an on-demand workforce, it is the behind-the-scenes strength of the 92
CUSTOMERS
community that is the foundation for the organization. From professional development courses to Topcoder Nation to special groups such as for working moms to the elite Topcoder MVP
Program representing the best of the best. Topcoder ensures all members can find a place to call home in addition to the opportunity to earn a living.
I recognize that developing and maintaining a custom community may not be within your reach as you start out, but it should be a goal. Figure out where your community will live and how you will make it vibrant. Most business owners have customer newsletters or create groups on social media without much success and engagement, but you can crack this code.
While you may start off small, realize that engagement is driven by a series of many personal interactions such as an invitation to share stories, customer challenges, and contests. Provide a safe space to celebrate your customer’s name in lights.
More than anything, building
an ‘I belong here community’
means showing an abundance
of love your customers so they
say:
This is me
This is what I need
This is where I belong
In appreciation, your customer will become a brand ambassador and a referral machine.
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BUILDING YOUR BRAND
Business Lesson
ELYSE PETERSEN
Founder and CEO of Tealet
“If people do not have the fast growth, especially in a business like mine, they need to recognize it is more of a patience game.”
Elyse Petersen is an advocate for transparency in the global
food system and currently works
with tea farmers to improve the
quality of their products and
access market opportunities. As
the Founder of Tealet, she has
made direct trade available to small-scale farmers, businesses, and consumers around the world. She is a food scientist and returned Peace Corps volunteer that is committed to building a sustainable future for agriculture and communities. She has a B.S. in Food Science and Technology from Cal Poly Pomona and a Japanese-MBA from the Shidler College of Business, University of Hawaii.
Brand promise: Quality wholesale tea with transparent farm to cup traceability
agriculture * distributed entrepreneurship * food tracing * pitch supply chain * creating market demand accelerators * bitcoin VC funding * white labeling * burnout * determination ALLISON
Can you tell me what you’re doing in the business world today?
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ELYSE
Tealet is a B2B marketplace for farmers around the world to distribute their products to small and medium-sized food businesses. Right now, we are focused on tea, which is the camellia sinensis crop. Just like Amazon started with selling books and now Amazon sells everything, we are using the same concept here. We are tackling the tea industry first, which is one single crop, while building up the technology and the infrastructure. Eventually, we will be diversifying into other agricultural commodities.
ALLISON
Why tea?
ELYSE
I did not grow up with a tea culture. It was new to me; however, I have always loved food and I became a food scientist. But the path to tea was unexpected. I had worked in the food industry in Southern California for several years and I became quite jaded on where the industry was headed because the focus was not preparing food for people and sharing food for sustenance. The industry was based on a sale and profit margin game where my job was essentially finding loopholes in government regulation so I could put more preservatives in the food and extend the shelf life. For me, that was no longer food.
ALLISON
You must look back and shudder. So, when did it change for you?
ELYSE
A friend convinced me to join the Peace Corps. I worked in Niger, West Africa for two years with rural farmers. It was the first time in my life I worked as an enthusiast of food and a 95
scholar of food. I was finally in the soil and with the people that created food. There is a major disconnect in the academic world of food and actual agriculture. I was really inspired by the work and found the people I was living and working with had a unique happiness that I had never seen before, even though they faced so much adversity. I concluded they were so happy because life was simple and they were very connected with the things they needed – their family, their community, and their food.
The people only consumed what they produced. They were very intimately connected with every grain they ate and every bite that they had. Then I realized that was missing in the Western world where food is a convenience. If people ask a child where food comes from, the child thinks it comes from the store. There is something troubling about that. As a ‘woke’ food professional, I came back to the U.S. and the first job I took as a food scientist was with a green tea manufacturer which was the largest tea manufacturer in the world. They had a factory in Hawaii where I was living, and I was their foods safety supervisor. I managed quality control and really fell in love with tea.
For the first time in the industry, I did not feel like I was poisoning people. It was a healthy product. The more we sold the healthier people got. I became very enthusiastic about tea, even though I did not know anything about tea yet. I started building the traceability program for the company. When a food company gets a call from a supplier saying there is salmonella in this lot number of products, it is the manufacturer's responsibility to recall all the infected product from the shelf. I was building this program, but there was no coding system for any of the raw ingredients coming in. I asked if I could build this coding system and they told me it was not my work which 96
was frustrating. Now this was a Japanese company, and I could not speak Japanese, but I ended up getting a Japanese MBA so I could learn the language and come back and be able to do this.
ALLISON
That is determination for sure. Where did it take you next?
ELYSE
While completing my MBA, I was hired by the University and the State of Hawaii to do a market feasibility study on Hawaiian-grown tea. I dove in deep into the industry and learned about the struggles and why there was no coding system on these teas coming into the manufacturer. It is a highly commodified product that is just aggregations of raw materials that are being purchased from all over the place, blended, and then shipped around the world. Traceability is not even possible.
As I was working with these farmers in Hawaii, I started working with tea farmers in Japan, India, and Taiwan. A lot of this networking was done through Facebook. It is amazing how useful social media can be. I did my final semester of my MBA in Japan and ended up on a tea farm in Kyoto where I helped found a nonprofit called the International Tea Farms Alliance.
Our mission was to create a bridge between tea growers and tea lovers, which aligned with my values I had rebuilt. The connection between what we produce and what we consume was there, so we could be more conscious of how we consume.
To raise awareness, we started networking with farmers around the world and we hosted a tea festival in Japan. This was right after the tsunami and the Japanese government was funding projects to promote the Japanese brand and build hope among 97
the community, and so we used some of those funds to produce the festival.
At the end of my internship, the farmers I was working with told me they knew I was doing good work for them, but as a nonprofit, there was no funding to continue and their businesses did not have any financial bandwidth to support this. These farmers believed theirs was the best tea in the world and they wanted to take it to market, but their channels were not particularly good. So, they encouraged me to create a for-profit partnership to delivery on this same mission. The whole business idea was not even my idea. It was their idea. Of course, I have been the one to put the work into it and keep it flowing.
Working with the farmers, I came to believe that not one organization or one person should own everything. The magic really happens when everybody comes together, the ideas are shared, and the communication is between everybody. When each farm and individual is treated autonomously, that is when people are motivated to put in the good work and create a better goal for everybody. That was it. I had no entrepreneurship experience.
ALLISON
How did you put the idea into action, as that is where most first-time entrepreneurs stumble.
ELYSE
My first weekend back in Hawaii after the six months in Japan I went to a startup weekend. A friend recommended I check it out. It was cool place to go and see the scene. I ended up pitching and making a team and we took second place. One of the judges at that startup weekend was a venture partner at one of the most prominent early stage VC funds in Silicon Valley.
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That is how I was swept up into this tech startup world, which I am grateful for. I have learned a lot.
ALLISON
When you say tea, I do not think of tech, but you are modernizing tea distribution in many ways.
ELYSE
Yes, for example, Tealet is one of the leading companies using Bitcoin in the world due to our partnership with Align Commerce. I am their golden child customer. We have spent a lot of time working directly with them and opening them up to new markets and letting them know where the most pain for B2B payments are in Nepal and Malawi. Today, we send payments to every farmer we work with through Bitcoin.
ALLISON
Can you talk about your business model and how you bridge the gap between growers and businesses?
ELYSE
The type of tea we are bringing in - single origin and very high quality – does not fit into the conventional tea market already here in the U.S. Prior to me working in tea, people bought tea bags in the grocery store. Those teas were all typically lower-grade and lower-price teas that were marketed as a higher quality. The tea that we are bringing in costs more, but the value is greater. This value is not understood by the mass markets so the buyers we work with tend to be newer businesses that are introducing this new product. They are an enthusiast of it and want to be ambassadors of it.
We are seeking ambassadors who want to get into the business themselves because we need local owners to empower 99
consumers to explore the tea and to drive market demand. This plays back into the idea of distributed entrepreneurship. Rather than me building up a sales team, going around, doing tea tastings, and selling our tea, I would much rather it be an autonomous small business in a local community that has local ties and influence. Rather than selling directly for me, I try to empower the local owner to build their own brands and build their own story because ultimately their customers are going to trust them. My brand would have some value and trust to it, but I am not the purveyor of the shop who is there every day to pour people a cup of tea. The local owner is the person who should be the brand that sells the product. On the seeking ambassadors page on our website, we have a little slogan that says, “Get into the business to fund your own habit.” It is not like we are convincing people they are going to become multimillionaires and get rich quick with getting into this business. I think that is a problem with a lot of the multi-level marketing schemes out there. We are trying to give people the honest truth. This business is slow, it takes patience. For now, they should see it as a way of exploring their own interest in tea, sharing that exploration with others around them, and make a little money to support that. I am a big fan of that type of entrepreneurship. It may seem small, but it is relevant. What we are trying to build here can move and change things.
ALLISON
Tell me more about your farmers and the distribution network.
ELYSE
Right now, we are actively selling for 18 different farmers.
These are all vetted. We already know their buyers and we know the sales cycle for their products. There are hundreds more in our network that we do not actively sell for. Many of these farmers do not have a product that is ready for the market.
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They are still developing quality. We are motivated to help with development and to help them with their quality control. We help them learn new skills and techniques with the goal that when their product is ready, they will be using our platform for doing their marketing and their distribution.
Our network can actively distribute all over the world. Tea is very lightweight, and the tea is high enough quality and value that it absorbs shipping costs. Our biggest economies of scale are in the U.S. My warehouse is in Las Vegas, and we can bring in container loads of tea on a boat and bring it here, sort and distribute. We have focused most of our growth here because I am based here. The market opportunity for high quality tea is the strongest in the U.S because we have not had a set tea culture like other countries.
ALLISON
Why do you believe the market is ready now?
ELYSE
As people are traveling around the world, like college students and digital nomads, they are going to China, to Taiwan, and to Japan and they are learning about good tea. Then they come back to the U.S. and want to share that. Those are exactly the folks I connect with. I tell them if they start a business, I will provide the tea. Again, as we do not have an established tea culture here, people are very open-minded about accepting someone else's culture around tea. In the UK, where we think of having the strongest tea culture, it is hard to introduce good tea.
In the U.S., we have this millennial experiential absorbing population now. It is all young people who are driving this market and they want to have the entire tea set. They want the Chinese tea, they want the Japanese tea, they want the Korean 101
tea. They want to collect all types of tea, which for businesses like mine is great. The market is ripe for us to be in, but that does not discount the European market or the South American market for us. We do some work there and over time in this distributed entrepreneurship goal that I have. Rather than Tealet owning all of those distribution points and building them up ourselves, I would rather empower one of our buyers to step up their game and act as an agent and get their fair exchange of value in that transaction. We can grow and scale quickly without having to do it internally ourselves by using our network
ALLISON
What advice would you give to others starting out?
ELYSE
The main advice I share with all entrepreneurs is they should not all be in such a rush to collect money and then measure success as how much money we raise. In my case, I did raise money early on and I was groomed by one of the top VC funds in Silicon Valley to raise as much money as possible. That was the model. If people failed, they would be put into a highly risky situation. The raised money could seem like monopoly money and people may not be responsible in how they spend it.
For example, they hire employees and sign a lease for an expensive office space. Then a year flies by quickly and even $5
million can be gone fast.
If people do not have the fast growth, especially in a business like mine, they need to recognize it is more of a patience game.
We are trying to organically build this. I did not have the metrics that the investors were excited to see so it was hard for me to raise money again after the first round. I had to go through a painful point of maintaining a side hustling to keep 102
things going. I was not in such a hard situation where my burn rate was so high, but I have a lot of friends and peers who had to shut down their companies purely because they could not raise more money and their burn rate was too high. The business was growing; however, it just was not growing as quickly as the investors wanted.
That is the biggest thing to keep in mind when people accept money. They are going to have to be accountable for it. Unless they are ready to bootstrap it themselves after a certain burn cycle. They are signing away freedom knowing that there is only a 2% success rate when they are building something they are so passionate about. I am on my life goal. I would not want to put what I am building at risk. We are at a profitable point now. We are making money, and we are starting to scale on our own without outside capital.
I know a lot of new entrepreneurs romanticize how things will be. There is even this competitive environment, especially in the accelerators. I did an accelerator. I feel like that was the culture it was. They wanted to know how many millions I closed last night and last week. I think that is toxic for entrepreneurs who are doing real work. It takes away from the focus of building their business and building their sales versus always having to fundraise.
ALLISON
You said your company is in the black now and moving forward. Where do you see yourself and your business in five years?
ELYSE
Within a few years I no longer want to be just a tea company. I think by then some of the other verticals we have started to 103
expand into will be mature. We just got into herbs, things like turmeric, ginger, and tulsi. Cacau is popular and craft chocolate makers are making a bean-to-bar chocolate. Maybe we will even potentially be into industrial hemp, which I am really excited about. The government is allowing agriculture to proceed in exploring that arena, not just for CBD, but also for sustainable building materials and other uses. Hemp is technically a cannabis crop, which a lot of people could be afraid of, but it is not a drug, it is something that can be sustainable and rewarding to our community. Hopefully, I can help the hemp industry and help empower the farmers because right now that is our biggest pain point. The career of farming is not profitable. Developing land as homes or as other things is much more profitable than agriculture work. A lot of our agriculture work is being sent to places where labor is cheaper and machines can do things, which further disconnects us from that connection that I am trying to build.
I think the key right now is to make farmers legitimate businesspeople and respected businesspeople that we all appreciate and value.
To learn more about Elyse Petersen:
Website: www.tealet.com
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5
People
he long range of durability of a company is directly Td ependent on the quality of the leader and the engagement of the team toward the goals and objectives. As the saying goes,
“If everyone is moving forward together, then success takes care of itself.”
You will often hear people remark that business is easy, it is the people that are hard. This ‘truth’ is why there are volumes of books written on leadership, communication, personality profiles, and so on. For most individuals, there is nothing simple about leading. Ask anyone how they fared in their first management role and they will tell you about the battle scars earned.
You cannot make great strides alone in the business world, you must be able to ‘collect people’ and take them with you. It is critical that as a leader, you must invest in nurturing relationship capital with the individuals who are critical to the stability and future growth of the business – both inside and outside the company. While most startups feel the pressure to achieve fast growth and leverage extreme productivity out of every resource, that is not a model that is sustainable for the long term. You cannot overuse people and expect them to still be by your side down the road.
As we get underway talking about people, I want to introduce you to Wildbit to help broaden your view of how putting people 105
first may be a business practice you want to employ at all times.
Founded and managed by Chris and Natalie Nagele, Wildbit (USA) is the team behind Postmark, Beanstalk, DMARC
Digests, and People-First Jobs. As a self-funded business from inception, the Nageles have demonstrated that profits can co-exist with prioritizing team members. This philosophy has changed the entire trajectory of what they strive for. Holding the belief that it is the people that build the business, the Nageles have designed their structure to focus on team happiness and the ability to live a healthy life. They want to grow and be profitable, but they make decisions based on the question, “Is this better for the team?” With this method, they allow growth at a rate that is sustainable for their team. For example, Wildbit combines working virtually with a four-day/32-hour work week. The outcome? Natalie said they have found that the quality of their software releases has been much improved because people have an extra day off and it helps enhance innovative thinking in product development.
The Nageles run their business under what Jeffrey Hayzlett, Chairman and CEO of C-Suite Network (USA) refers to as The Hero Factor lesson one: value people and profits equally.
Jeffrey proposes that businesses today need to operate under the principles of the hero culture and strive to run a hero company.
Jeffrey’s experience serving as a Fortune 100 CMO and buying and selling over 200 companies has demonstrated that the hero companies (those companies that have high values) outsell, outperform, have happier employees, have more loyal customers, and have more vendors than any other businesses out there. You can check out The Hero Factor: How Great Leaders Transform Organizations and Create Winning Cultures for more insights, but the simple takeaway here is that you cannot build a great company without great relationships.
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People rule #1:
Achieve success as a team of one before a team of some
The founder holds the vision of the company, and this is vision with a capital ‘V’. People may join you because they believe in your vision, are excited about being part of the journey, or see the financial benefit, but no partner, employee, or contractor will stay long if you lack the right focus, habits, and delivery.
No one wants to follow a disorganized leader.
Consider these management points:
Carve out focused time in your diary to think
Hold yourself accountable before you ask the same of others
Recognize that time management is your greatest friend
Know when to spend time on executive work versus delivery work
Say what you mean – make what you say matter
Delegate with clear direction and deadlines
Acknowledge there is a time for leadership, a time to give orders, and a time to listen
And, if you cannot represent excellence in all things, find complementary skills in a crack partner/assistant/
team member
Recognize that you set the bar for the team. If your bar is low, the results of your team may be low. It comes with the territory of leading. If you are late for meetings, it signals the team that they may be late for meetings; if you make excuses for deadlines, it tells the team that deadlines are not that critical; and so on. You must lead by example because the eyes of the team are on you. When I was in my twenties, I worked for a division vice president who every morning went through the office and checked the thermostats. We would snicker as he 107
made his rounds and question why he was not doing better things with his time, and yet we knew he had a handle on everything that happened in that office. What I did not know then, but know now, is that the small details matter for the impression you leave on people who report to you. Of course, I am not speaking to the point of micromanaging all things (and maybe the thermostat could have been left alone), but to the point that it is known to the team that excellence needs to apply to all processes. Today, I know I may be the one that seems crazy to my staff when I ask too many questions on the launch of a new campaign or the preparation of a boardroom, but I do want my team to be clear that the bar must be high for everything they do.
Another critical trait of a respected leader is the ability to harness self-control. One of the greatest assets you can develop is knowing how to remain ‘in neutral’ much of the time. Your staff and your partners want to count on a level of predictability and balance from you. Drama has no place in business. The ability to remain calm and collected under pressure is valued and a trait which investors look for. Be very aware of how you use extreme joy and extreme frustration.
Keep these words from Napoleon Hill in mind:
"Think twice before you speak
because your words and influence
will plant the seed of either success or failure in the mind of another."
As a business leader, know your strengths but be self-aware of your weaknesses and shore them up. Prioritize your focus, consider your healthy habits, and stand ready to deliver on promises made. However, even once you elevate your personal 108
game recognize that even as a leader, the 20-60-20 rule likely will apply: 20% of people will be with you, 60% will be in the middle, and 20% will be working against you or oppose you.
You cannot please 100% of the people 100% of the time. In fact, this rule tells us to expect some unhappiness and judgment in the ranks. It simply comes with the territory.
Leadership is always a work in progress.
People rule #2:
Scale structures for today and tomorrow Your mantra for as long as possible should be, ‘How can I build this business with a framework of other people’s knowledge and resources?’ As you network with entrepreneurs, do not be shy to ask for advice on how they scale staff and who they outsource to - this should be a constant question for you.
When it comes to scaling, the good news is that today’s business environment provides more options for entrepreneurs than there were even a decade ago. It should be your priority to build up a network of service agencies and look to sources for gig workers to carry the momentum until you are ready for direct staff. Also, do not discount how many companies will provide ‘white label’ services for you and your production, or would be willing to sublet a corner of an office or warehouse, or even ‘rent’ their labor services. If you can clearly define your needs and work your network for advice you will be amazed at how solutions may present themselves.
As you build this extended virtual team, it will be imperative to identify a team productivity/management software system to keep everyone aligned and organized. The platform will need to 109
facilitate smooth communications and project management. I would like to list some here for you, but due to constantly evolving technology you will have to do that investigation independently. However, do not overlook how you can harness free or low-cost resources such as Google Drive and Microsoft Teams as you begin the journey.
Moving your business from a network of virtual assistants, freelancers, contractors, and vendors to hiring direct personnel is a significant leap not only in cost but in time management and in understanding ever-changing labor laws. Plan and be ready for it. When you are poised to hire your first employee, seek advice and support from a professional employer organization (PEO) that may offer full or a la carte human resources services based on your need. And have your bookkeeper assist with paychecks until you are ready to move to a payroll processing system. Do what you need to expand yet keep your overhead costs down.
When it comes to scaling, be conscientious that the people who help build the foundation of your business may no longer be the right fit as you scale up. This is a common quandary of many founders. They start off with a hustling team of generalists, but as they grow, they need subject matter experts (SME’s) who know how to approach more complex problems. Be kind to the people who began with you but recognize when it may be time for a change or to insert a new layer of talent. This may include placing people next to you or even over you who make more money than you. A CEO focused on profit sets their ego aside and makes decisions that build the best business team to get the job done.
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People rule #3:
Live and die by project work plans
People need clarity in instruction and expectations. That is why project work plans can be a business owner’s most skillful tool.
Gordon Tredgold, CEO and Managing Consultant of Leadership Principles (Germany, or wherever he chooses to hang his business hat as you read this) is a leadership and operations efficiency expert. He is a best-selling author, frequent guest writer in leading publications and a top keynote speaker on the topic of focus and workplace productivity. I once interviewed him on the role of the leader and efficiency, and he said:
“People do not know what success looks like. There is a lack of accountability. People are not clear about what their role is or don’t have the tools to be able to do that job. There is a lack of simplicity. We have a world class ability to overcomplicate and then there is always a lack of transparency. If you have started or are running a business, you must become an expert at project work plans because when there is a lack of clarity, people will make up their own rules and this will cost you time and money.”
Any successful business leader understands the need for organized and efficient output, but I agree with Gordon that often leaders rush and fail to provide clear explanations, or they overcomplicate the communications leaving the employee confused.
The thought process behind project work plans is simple. Let us start with this extremely basic training that I provide to my 111
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junior team members when a specific work request is assigned to them. I tell them they have permission to ask the five questions of work clarification:
1. What do you need from me?
2. What do you need it to look like?
3. What are you going to do with it when I give it to you?
4. How much time do you want me to spend on it?
5. When do you need it by?
Now translate that thinking to a larger project where you would apply these criteria to each milestone on a more robust work plan. Can you see how there will be efficiencies when the path of work is made clear?
You can manage project work in many ways. You can maintain a joint spreadsheet on a free platform like Google Drive or you can find a price-friendly platform solution. But you can keep it simple as you begin. If you choose to track on a spreadsheet, these are columns you may wish to have for each project:
Deliverable/item
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Department
L1 - lead one name
L2 - lead two name
Contributor name(s)
Deadline date
Percent complete
Hours allowed
Hours completed
Open notes
I would like to introduce you to another concept and that is who
‘holds the pen’. This is about who is the ultimate approver. You need to be clear if the lead on each point in the process is also serving as the approver, or is there another individual who
‘holds the pen’, such as you? As you design the project, workplan roles should be defined to clarify who fits in each of these categories:
1. Accountable
2. Responsible
3. Consulted, and
4. Informed
Understand the structure for approach to work will help define the ways team members can be collaborative compared to the high-stake areas that you as the business leader must own.
Short-sightedness and failures in this area will negatively affect the product quality and customer experience which can weaken the position of your brand. Think of how fast customer loyalty can be won or lost on social media due to production process failures. Shore up your team’s focus on project management to maintain excellence in delivery systems.
People rule #4:
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Craft a collaborative culture
What does it take to ignite your team and create alignment?
I find that under People rule #4, I have to honor my son with a leadership quote from Vince Lombardi, “Teamwork is what the Green Bay Packers were all about. They didn't do it for individual glory. They did it because they loved one another.”
There is something different and invigorating about an organization that has a heart - and crafting a collaborative culture takes a hell of a lot of heart to both achieve and maintain. But this is essential in the future of work. People want to be valued and they want to maintain flexibility to carry out their work within a known framework.
Collaborative leaders are enterprise minded when it comes to everyone, no matter the role, and seek inclusion. They…
Genuinely want to take people with them
Value and promote diversity
Connect team member work to the goals
Provide feedback and praise
Share the success credit
Build trust
Upskill team members to the next level However, collaborative does not mean automatic consensus. A great leader sets ground rules for flexibility, ideas, innovations, and levels of authority. Make it clear where and when you need to hold the authority. Ensure that your staff knows who ‘holds the pen’ and the instances when they are empowered to make decisions or do what is right for the customer. Whether it is you or another member of leadership, knowing the framework as 114
well as the level of authority and review will help inject structure into the collaborative environment.
A collaborative culture is just as much dependent on the team members as the leader, so ‘dig deep’ when you hire. Try to uncover not only desired skills, but also seek to understand the personality traits and how they will align with and complement the existing team, or add a diverse aspect with knowledge and perspectives that you currently are missing. Once you hire, there are many team assessments you can utilize to help you figure this out, such as Myers-Briggs Type Indicator® or DiSC®
personal assessment tool. The one I prefer to identify both personality traits and work position is Belbin® Team Roles. But no matter which tool you use, it is important to understand the effect personal position has on relationships and communication styles and then use this to both reduce conflicts and provide motivation for your team’s success.
A collaborative culture also seeks to embrace unique and varied backgrounds of team members. As you build, be cautious not to develop a one-dimensional team of too many like minds.
Diversity and inclusivity initiatives will help you extend the way you approach problems, view your customer base, and discuss trends that you may not be able to see from your position of world view. Your customers need to see themselves when they survey who works at your firm. Do not let bias stop you from embracing the skills and talents of what could be a valued team member, but also do not let ‘subtle acts of exclusion’ creep into your culture.
If you need some more wisdom and inspiration in this area, head over to TMI Consulting (USA) and get to know the work of Dr. Tiffany Jana. She is an expert in diversity and inclusion, using metrics to gauge organizational equity and unconscious 115
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bias, and author of authoritative books in the space. Another great resource is Max Masure and the team at Argo Collective (USA). Under a mission to make the world a safer, more equitable place for people of all underrepresented genders and identities, Argo offers numerous resources for business owners who want to foster inclusion principles not only with teams but throughout the product development and business process. You may find that building diversity needs to be incorporated into your business strategies.
When you read through the amazing founder business lessons contained in this book, think about their business structure and approach to teams, hiring, and cultures. Take time to really consider their wisdom and experience. Crafting a collaborative culture within diverse teams separated by distance requires a special focus by the leader and you will likely find it both draining and invigorating.
People rule #5:
Recognize the behaviors you want to encourage
Before I started in business, I was trained to be a professional 116
educator. This was a great foundation for being a manager of people because in the academic world teachers are trained to positively move students from point A to point B to point C and so on. Teachers are also trained in the finer points of praise and recognition techniques that fully carry over to the modern workplace and this is for one simple reason - every human being has a desire to be seen and recognized.
As a leader, it is your job to be the reason people unlock their potential, but you must first acknowledge that each individual stands in a slightly different position of what motivates them. So, while you want to recognize the behaviors you want to have repeated, how you conduct recognition and how it is received by each employee may vary. When speaking about this topic, my friend Jim Adams, motivation expert and Founder of Performance Strategies Inc. (USA), introduced me to the book Driven: How Human Nature Shapes Our Choices by Paul Lawrence and Nitin Nohria. In it, they identify four major motivations behind what people want:
Drive to acquire
Drive to bond
Drive to learn
Drive to defend (what they have earned or obtained) Spending some time thinking about these drivers and the people that work for you may help you understand how you can target interactions and recognition strategies. Now, I am a big proponent of incentive programs and employee rewards, but this is about something much more finite. Recognizing people in the moment is about how you, in the ever-so-smallest ways and smallest voice, comment on a job well done when it occurs or follow up with a written personal note. It is about thanking a team member in front of their peers or saying a positive word 117
when you are with a client. It is your honest gratitude for the people helping you build your business.
As you grow and expand you will want to turn to a more formal program strategy to boost team performance, increase sales, and enhance the safety and productivity of the work environment.
But never underestimate the pure power of using kindness to motivate. I once asked InspireHUB founder Karolyn Hart, ‘Who do you want to be in business?’ Without hesitation she responded:
“I want to be Fred Rogers. He comes in and through kindness and integrity and goodness, he literally transforms the world. He changed the way people engaged with each other and how we looked at children.
He did all these amazing things. He was such a good, good man. And I would love to be sitting on a stage where we are talking about how kindness wins, and I want to say I am like him.”
Your people directly reflect your brand essence. Harness your personal power of kindness to recognize the great performance of your team and the business will come out ahead.
People rule #6:
Be decisive - correct or remove
The flip side of recognizing the good behaviors is acknowledging the not-so-good actions and habits that employees and contractors possess. You must be able to assess team performance and sort out weakness.
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I once asked an attorney what she had observed as the primary reason an executive would lose their job and her response was that the executive often failed to remove the people who needed to go. I knew this was a true statement. Prior to my first general manager role, I worked under a GM who would say that the GM
seat was the closest to the door. This was because the full weight of the performance and results of the company was on him and this is the way it is for you as the owner. If you have not become expert at managing performance issues and ending relationships, you will very soon after you hire your first employees or sign your first outsourced service contract.
When you run a lean organization you simply cannot afford to have people around who are not stepping up to the fullest. At the fundamental core, at any level, you will be paying people to serve, think, do, and solve. If they are not delivering in all four areas, then there is a problem.
Once you have a new employee on board pay careful attention to that initial groove they fall into. You may even want to consider instituting a strategy like Zappos’ ‘The Offer’ policy.
Under this program, new employees who complete an initial work period would be made an offer to continue the journey with the company or choose to quit, and if they chose to leave, they would be paid to go. This would help both the organization and employee reduce an unwanted entanglement and provide a positive way out for the employee.
If you find that a situation is not working, ask yourself these questions as you evaluate the next move:
Have I given this person an impossible job? Does it take more man hours than they can do alone?
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Am I paying the right wage for the skill level and output that I am receiving? Did I under hire or over hire?
Is the individual getting the right direction and clarity on objectives?
Do they need assistance with time management or technical skills training?
If I invested time coaching the individual, do I believe they will understand, learn, and step up?
Is this person an energy-drain on my time and the time of others? Can that be changed?
Is it possible to restructure tasks so I keep the best of this individual’s abilities, and move those they are not good at to someone else? Will this still be enough for the wage I am paying?
I find that many early-career businesspeople or first-time business owners do not know how to manage team member performance. Leaders can be too harsh or too evasive, but they honestly need to remove emotion and determine how to approach the situation fairly, legally, and productively.
Consider this advice for how a leader might approach an individual not meeting standards:
First occurrence. Consider it the company mistake.
Start off assuming the expectations need to be communicated more clearly. Make a file note, but it is not yet a formal document for the employee.
Second occurrence. Let the team member know it is their mistake. Have a white board session to review the work that is falling short and ask the individual to write the actions on the board that will correct the situation. It is critical that the individual participate in authoring the plan and expectations. Then, follow up in writing.
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