5 Ways to Act Like an Entrepreneur

Every financial advisor needs to act like an entrepreneur. It doesn't matter whether you are a self-employed business owner who coordinates all of your firm's moving parts yourself, or you're an employee at an organization with a huge infrastructure. Either way, you've got to manage your business wisely so that you can create long-term success.

Of course, doing so is one of the biggest challenges any advisor will face. My friend Michael Gerber, author of the bestselling book The E-Myth, recently summed it up nicely for me: People who go into business to do work they know how to do often make a fatal assumption - that because they know how to do that work, they therefore know how to build a business that does that work.

But that's simply not the case. In many instances, advisors spend so much time working in their practices - dealing with the day-to-day minutiae - that they have no time to do what great entrepreneurs must do: work on their businesses to create great enterprises with lots of value.

This is one reason why, when we conduct focus groups with advisors, they typically report these kinds of problems:

*We're working harder, but not seeing bigger results.

*We have a good revenue stream, but we're not profitable enough.

*We're not on the same page as our partners.

*We can't seem to execute as a team.

It's hardly surprising that nearly 40% of RIAs surveyed last year by my firm, CEG Worldwide, said they were not highly satisfied with their level of success.

With that in mind, here are some ideas Gerber and I came up with to unlock your inner entrepreneur and make sure you give the same level of care and consideration to your business you give to your clients.

1. CREATE OPPORTUNITIES

5 Financing Mistakes Commonly Made in a Start Up

When you start a startup company, money can be tight, and it is important that you have a plan in place from the very beginning to ensure that you remain fiscally responsible with your finance plans, particularly during the very beginning. Unfortunately, most startups that run into financial problems do so because they do not practice proper financial planning and accounting, and as a result end up making some very serious financing mistakes that can lead to the downfall of a once promising business. Five of the most common financing mistakes that are made by startups include:

Not Budgeting For Operating Costs.  

One of the most common mistakes made by startup companies is not doing enough planning for operating costs.  Many new businesses get ahead of themselves, planning their advertising costs and other more glamorous expenses while overlooking the basic operating costs that determine whether or not their business will even be viable in the long term. Make sure that, if anything, you overestimate the amount of money you will be spending on day to day operating costs, because underestimating those costs could be very detrimental to your business.

Overcharging Or Undercharging.  

Another common mistake that is made by many startup companies is pricing their services or products far too high, or far too low.  Ideally, every startup company should have done enough market research to know the perfect price for their items, but that is not always possible for a company that is working with extremely limited funding.  Setting your price too high or too low, in the very beginning will stick with those that come across your service. If you have to drastically raise your prices, they will be less likely to buy knowing that they had a better deal on the table previously. If you lower your prices drastically, consumers will likely feel like they do not know  what your service or product is truly worth.

Finding The Right Salary Amounts.

7 biggest mistakes of business startups

Your first year of running a new business will chart a steep learning curve. No matter how careful or knowledgeable you try to be, mistakes will happen. Get used to the idea.

Still, if you keep an open mind and heed voices of experience, you can dodge many of the more common missteps. Here are the seven most frequent mistakes that newbies make with business startups, and some advice about how to jump the potholes.

Mistake 1: Driving a fire engine without a route. You always hear how entrepreneurs need "passion" to succeed, the so-called fire in the belly. Well, enthusiasm can be overrated. To fan startup flames, you need more than high energy. You need a plan.

Take the time to thoroughly investigate your market and target customers, the competition and other basics, with a sound business model. Focus on answering one deceptively simple question: How will you make money?

As a case study in errors, Tim Berry, president of Palo Alto Software, points to the ubiquitous DVD and video rental store on the corner, the one we've all seen open and shutter in record time. Typically, some starry-eyed owner rents the space upfront. Now he's got fixed monthly overhead well before opening. He then spends his capital on snazzy design, forgetting about the cost of cash registers, business software and store signage.

When it's time to stock the shop, the owner is tapped out. The shop opens with trendy decor and lousy inventory. There's not one penny for marketing.

Before the year is out, the store "is picked up by a chain that knows what it's doing," says Berry.

Lesson: Don't quit your day job without a plan.

Mistake 2: Selling way too cheap. Ask a child to choose between 12 rhinestones and one diamond and she'll go for the rhinestones every time. Startup owners are just like that. They fall for the fallacy of quantity over quality. They figure rock bottom prices will fuel skyrocketing sales and they'll become millionaires. But it doesn't work that way.

"New entrepreneurs are notorious for pricing their goods and services too low," says Linda Hollander, author of Bags to Riches, a small-business handbook for women. "This dooms them to a life of always worrying about money. Heck, even when they get orders, they aren't happy because they aren't making enough profit on their sales."
Before pricing products, do the math.

Six Sources of Startup Business Financing

Tips to Help you Find Startup Financing for your Small Business

Start-up businesses often have a difficult time finding sources of start-up business financing for their initial financing needs. It is often not possible to get bank loans because banks aren't interested in unproven businesses. Even with the best possible business plan, in the world of business and finance, you may not be able to convince a bank to loan any of their often-scarce money available for credit for start-up financing to a brand new business.

There is money available for those who are starting a business. You just have to know where to look and think strategically and creatively. Here are the six most likely sources of start-up financing for your new business. It is usually a good idea to try to use a combination of two, or even three, or these sources to get the start-up financing that you need for your new business.

Bootstrapping

As hard as it sounds, bootstrapping your start-up business really may be the best way to go. If you find a way to finance your business yourself, you don't have to answer to any investors and you have total control of your business. Bootstrapping requires serious strategic thinking and planning.

Raising funds yourself may involve pledging your own assets. Since the largest asset most people have is their home, you may find yourself in the position of taking out a home equity loan on your home. You only want to do this if you have an iron-clad business plan as pledging your home is not something that should be done casually.

Since the recession, banks are not making as many home equity loans and they are usually making them for only about 80% of your home's value, if that. You have to have a spotless personal and business credit record to qualify.

Financing with the Help of Family and Friends

The good thing about financing your startup business with the help of family and friends is that you can often get fairly lenient repayment terms. That may be important in the initial years of your new business. They may give you a low interest rate and a long time to repay them. On the other hand, they might want a stake in your firm if you are agreeable.

One problem is that in hard economic times, family and friends may not have access to the capital they could normally access.

Small Business Administration 7(a) Loans

4 Steps To Become A Happier Entrepreneur

During our childhood years, measuring success was as simple as counting gold stars and smiley face stickers. In high school and college, we relied on report cards. But how do we determine success now, as entrepreneurs?

In Southern California’s bustling startup scene, known as “Silicon Beach,” many professionals leave the comfort of a steady paycheck to pursue the American dream of starting something they can call their own.

After numerous conversations with like-minded entrepreneurs, we found that many of these entrepreneurs measured their venture’s success not in dollars, but by their own satisfaction or happiness.

It’s no secret that money can’t buy happiness. In fact, according to an oft-cited study by Stanford University economist Angus Deaton and psychologist Daniel Kahneman, once you’re pulling in a salary of $75,000, any additional dollar earned does nothing more to increase personal life satisfaction.

So if happiness cannot be bought — and yet we use it to measure our business success — what can we do to attain it? Over the last decade, researchers in Positive Psychology have discovered a number of behaviors that boost happiness.

As we begin another new year, these four behaviors can function as resolutions for all of us.

1. Create a social circle of like-minded entrepreneurs.

Two heads are better than one when it comes to problem solving. A team of entrepreneurial peers can see what escapes our own attention, point out pitfalls ahead of time, and become a sounding board for critical decisions and actions.

Commit to creating a circle of like-minded entrepreneurs in which no money is exchanged between members.

2. Give your time away.

Seven Things I’ve Learned as an Early-Stage Entrepreneur

Kendall is a former fashion editor who has written for NYmag.com, Lucky, InStyle, and NBC. She recently scrapped that glamorous life and is pursuing an MBA at MIT Sloan, in hopes of becoming an entrepreneur.

Last we spoke, I was living in Cambridge, MA working on StyleUp between my MIT Sloan classes. Now, I’m in Mountain View, CA working StyleUp full-time. It’s amazing and crazy and daunting and strange and wonderful. Recently, my co-founder and I even raised a little bit of investment capital which makes me feel like I’m just starting to make it as an entrepreneur. There is a very long road ahead, but I thought it might be useful to hear a few things I’ve learned so far.

1. It’s a roller-coaster – find your center. There are high highs and low lows. Your startup is a finalist in a contest! You lost the contest. You meet an angel investor who is interested in giving you lots of money–then they never email you back. You’re going to be featured in a magazine–the editors kill the story. Through it all, you have to be able to hold your control, not only to inspire your team but also to just get through the day. This past summer, anytime something went wrong with StyleUp, I would be in a funk for hours. That’s not sustainable or healthy. Nowadays, we have our fair share of negative user comments on the website. I try to understand the complaints without letting them deter our momentum. Do yoga, have a glass of wine, adopt a kitten–whatever you need to do to stay calm and stay the course, do it.

2. Your life goes from being surrounded by many, to a few, to one. At business school, I was constantly surrounded by people. In class, in the Retail Club, in study groups over the weekend, I was never lacking for socializing. Once I started StyleUp, I had way less time to linger over coffee with my friends. Now that I’m working on StyleUp full-time, I spend a lot of my time alone. Strip away the distractions, put on your blinders and just crush it. However, when you can socialize, don’t talk about work. Your friends know you work a lot; they probably do too. They care mostly about how you are, not how your business is.

3. You are only as strong as your weakest link. If you have a co-founder or employee or an intern or someone orbiting your life who isn’t pulling their weight, cut them loose. You have to. Without sounding too Godfather-inspired, it’s not personal, it’s business. Their bad energy will bring everyone else down. Don’t feel guilty about making those choices and make them sooner than later.

4. Pay it forward. While this lesson isn’t specific to entrepreneurship, its value has become incredibly clear to me as a startup founder. I’ve had several wonderfully generous executives or fellow entrepreneurs take time out of their day to coach me through big choices. In turn, you have to be gracious and generous. That mentality has shaped how I view our College Ambassador program. I will do anything for those girls to succeed and get the internships/jobs that they want. The fashion world’s a big ladder, and you have to reach down your hand for the people below you who deserve it.

5. Prepare to step away from fashion. Unexpected, right? You start a fashion/tech company, but you have a lot less fashion in your life. Don’t get me wrong, I spend just as many hours in my days scanning street style blogs as I did when I was at Lucky magazine. But in my own life, luxuries like manicures or a new Outnet purchase are G-O-N-E. Every disposable cent you have goes into your company. Buy a nail file, and embrace the unpolished look. Learn to work with what is in your closet vs. impulsively buying more–that’s what StyleUp is for after all! You just don’t have time to care about the externalities which is a bit sad and also surprisingly liberating.

6. Remember who you are serving.

From Idea to Startup

You’ve identified a problem that you feel is your calling and you’re at that juncture where you need to take the plunge.

But what do you do after that? How do you get started?

Like you, there are many aspiring entrepreneurs who have had to face this question. Like you, I have also had to figure out the answers.

I have put together these steps for you to follow to help you see your idea through to launch, so that you don’t have to ‘figure out’ for yourself like I had to.

Step #1 – Punch Yourself In The Face

This is probably the best advice that I can give you. Punch yourself in the face today. Get yourself out of the inertia. The single biggest reason why most entrepreneurs fail to start up is because of procrastination.

If you want to start up, just shut up and do it.

Most aspiring entrepreneurs just don’t manage to start their ventures because they spend endless hours mulling over the ‘idea’ or on whether the time is right!

Don’t make that mistake. Your idea is only worth as much as the piece of paper you’ve probably jotted it down on. The day you begin to execute it is the day that it turns into a potential million dollar venture.

Do yourself the favor of punching your face to wake up to endless wonderful opportunities that will come your way when you set out on the road to entrepreneurship.

Step #2 – Build A Minimum Viable Product

Thank Eric Ries for popularizing this strategy used for fast and quantitative market testing of a product or a product feature.

You want to build a product or a service that interests your customers so much that you are able to build a great business out of it. But, most often, you only get to know the market response once you’ve built the product and put it out in the market.

This implies that a product is complete the day it is shipped, which is the biggest fallacy. Successful products have evolved over a period of time through constant customer feedback.

So don’t spend all your money and time building that one perfect (in your opinion) product. Instead, build a minimum viable product or MVP.

The idea is to put out something that offers the core value or your product or that solves the core problem of your customers. The MVP could be a PowerPoint slide, a dialogue box, or just a landing page. This is something that you can often build it in a day or a week.

Build fast, release early, release often with the feedback you receive.

Did you know that “The first version of Gmail was literally built in a day?” Not my words, but that of the creator and lead developer of Gmail, Paul Buchheit.

Step #3 – Funding Your Idea

Once you’ve received feedback from your customers, you have to get into full-fledged development and start shipping. You will need the initial money to get you started.

But before you explore the options, assess why you need the money. Is there something that you can outsource?

If there is something that is not absolutely essential for starting up, don’t spend on it in the beginning.

There are options to raise funds for your startup: bootstrap, startup contests, friends and family, crowd funding, banks, Angel or Seed fund, and credit cards.

Don’t focus and stress too much about raising long-term capital. The most important factor in successfully starting up is to make your product available to your customers. This should be your goal, so simply secure enough funding to ship.

Step #4 – Hire An A-Team

Businesses don’t build great products, people do. To start building your product, you will need a team that can help transform your vision into reality. There are two ways to build a team – in-house or outsourced.

When building a team in-house, look for people with passion, look for people who are startup ready, and people who can multi-task and take on much more than just what they are ‘experts’  at.

If you think an in-house team is not for you to start with, outsource the development. Especially, if yours is a technology startup. Many jump up in their seats with the notion of outsourcing and advise (ill-advise) you not to. Nothing wrong, but nothing right either.

Some of the most famous products today were outsourced in their initial days – Alibaba, Fab.com, Digg, Skype. And these are only a drop in the ocean of such examples.

Your focus as a startup is to get your core product to your customers and if outsourcing to the right partners helps you to build your Beta, then so be it. Once you gain traction from the market, you will be able to afford to build an in-house team.

You can then hire the developer that worked on your product (like Digg did) or buyout the company that developed for you (like Fab.com did).

Step #5 – Get Ready To Hit The Market

Do you have the right stuff to be an entrepreneur?

For many of us the idea of being your own boss, making more money than Bill Gates, and having the leisure time to spend it is very appealing. And for many aspiring entrepreneurs, it is possible (well, maybe not making as much money as Bill Gates), but for some it is probably better to keep your day job.

At SCORE, where I work as a counselor, I see many clients, who, for a variety of reasons, want to start their own business. When we discuss the business that they want to start, I try to discover three things:

1. Do they have experience or expertise in this business?

2. Are they able to commit themselves to the business?

3. Do they have a passion for the business?

In my experience, if they do not have at least these three characteristics, it is unlikely that they will succeed. Of course, things like a good idea and start up money are also critical, but, from a personal perspective, without experience, commitment and passion it is unlikely that they have the “right stuff.”

If you have what you think is a good idea, or see a good opportunity, but do not have the experience, then I suggest you spend time to try to get it. If you are thinking about going into the restaurant business, but have never worked in a restaurant, try it to see if you can stand the hours, understand what makes a good menu, learn how to cook quickly for an endless stream of customers, how to manage perishable inventory, and get a sense for the rules and laws governing sanitation. If you have a great idea, but have never manufactured or marketed a product before, study the market, identify your strengths and weaknesses and see if you can find a partner who can compliment your strengths and overcome your weaknesses.

According to a recent study by the University of Tennessee, over 25 percent of businesses fail in the first year, and 36 percent fail by the second year. In the same study, they also identified the major causes of failure, most of which were the result of incompetence or inexperience, but do not ignore a lack of commitment and passion. One of my favorite anecdotes about commitment is a very successful Silicon Valley entrepreneur was asked, “What is the one piece of advise you would give someone who is about to start a business?”

After thinking for a moment, he responded “Be single, or get single”. That may be a little extreme, but it is true, that most businesses require much more time and energy, particularly in the start-up phase, than you can imagine.

And that relates to the last characteristic of most successful entrepreneurs. Have a passion for the business, because there will be times, often many times, when things are not going well, and, if you do not have a passion for what you are doing, it may be very difficult to overcome the emotional hurdles that these obstacles create.


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How To Make Your Startup Happen

Writing the perfect business plan won’t get your startup off the ground if you can’t take the action to make it happen. Finding the perfect customer segmentation wont get you any customers until you call the first one and sell the product to them. And, even making the perfect specification for a revolutionary product, won’t build it for you.

Building a startup is mostly about making things happen, but how do we learn to do this?

After regular discussions on this topic with my first co-founder, Gus, we came across an interesting definition which I’ve revisited in many talks with new entrepreneurs and students with entrepreneurial dreams many times since. It’s the difference between activity and action.

Activity is what we’re taught in school, hence what most of us are often good at; doing the analysis, thinking about the solution and writing up the plan. Others might called this “busy work.”

Action is a competence we’re often not taught in school. It’s the part where you call the first customer or partner to try to sell your product, make the decision to do something and act on the plan. For the sake of brevity I’ll avoid entering a discussion about how this is a fundamental flaw in our educational system, and instead just point out that just like ‘activity’, ‘action’ is also a competence you can learn and master.

Think of launching a startup as similar to publishing a book. You can do the best research in the world, write a flawless manuscript, but unless you have the courage to ask someone to read and critique it,

call a publisher to sell them your idea, then ultimately meet a publishing deadline, you’ll never complete the task of getting that book published. It takes the action not the activity to get it done.

I see a lot of startups, especially those who are part of incubators, spend an over-proportional amount of time making the perfect powerpoint presentation, including deep market analysis, competitor mapping, and (unrealistic) financial projections, to present to investors. Rarely do I meet a startup founder who has a great idea, has done a basic analysis, created a business plan, and also called 10 potential customers to get their feedback and see if someone would actually like to buy the product or service. The irony is that investors are in fact primarily looking for signs of action, or “traction” as they would put it.

As much as this subject relates to startups, I believe the balance of activity versus action is a general challenge that occurs inside larger organizations too. Far too much time is spent on thinking about what to do, and especially what not to do, rather than actually doing anything at all. For the same reason this also applies to building a team, and a company culture inside your startup. A colleague of mine at Podio and fellow startup addict, Adrian Roessler, recently wrote a great post reflecting on his experience from joining a startup and honing the skill of taking action, he writes: “if you can’t make up your mind on how to do something, it will probably never get done.”

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Oh, to Be Young and an Entrepreneur

Kids used to want to be baseball players or rock stars. Now they want to be the next Steve Jobs.

According to a Gallup Poll released in January, 43% of students in grades five-12 want to be entrepreneurs, and around the country youngsters are signing up for lessons in business savvy. Almost 60% say their school has classes on how to start a business, up from 50% in 2011. Those numbers don't even include after-school entrepreneur workshops.

The huge popularity comes at a time when the youth unemployment rate is one of the worst on record. January's unemployment rate for ages 16-24 was 17.6%. That's a far cry from the pre-recession level of 10.9% in January 2007, according to the Bureau of Labor Statistics. Many young entrepreneurs say if they don't make their own jobs, no one will.

"A lot of kids are just really hungry to work," says Youth Express enterprise director Randy Treichel, whose St. Paul-based organization's youth entrepreneurship workshops have become increasingly popular.

His solution: Youth Express runs a bike store, the Express Bike Shop, which employs workshop participants in key roles so they can learn how to run a business firsthand and try out the lessons they've learned in the workshop, such as determining competitive advantage, understanding supply and demand, calculating gross and net profit, and identifying a target market.

"We want them to learn it in the classroom setting and then be able to apply it pretty quickly in the work setting so that lesson really sets for them," he says. "It's a type of learning that a lot of young people can get really excited about."

Amy Rosen, CEO of the Network for Teaching Entrepreneurship, or NFTE, couldn't agree more. She wants entrepreneurship taught as part of "every career and technical class" in the country. If it's not, kids risk dropping out of school, she says, citing that high schoolers report only 44% engagement in the classroom, vs. 76% for elementary school students, according to recent Gallup Student Poll results. "Making the classroom relevant to life and connecting school to opportunity would make them show up," she says. "They actually start having a life plan, and they connect with the community."

Clothing entrepreneur Gary Jiang, 20, says he was a quiet kid who "would always sit in the back of the class and not say anything" before he got bitten by the entrepreneur bug at an NFTE summer program in high school. Now he runs four small businesses: the clothing brand he founded at age 15, called MuffinMilk, a high-end sustainable clothing company called The Hight Club, a customizable watch start-up called Snake's Tail, and an online retailer, Superego Clothiers. Hight Club and Snake's Tail are "works in progress"; Superego is launching in April.

"I'm in a much more stable position as an entrepreneur than I would be just trying to find a job," says Jiang, a junior at Babson College.

Critics say entrepreneurship can't be taught in class. Get out of the classroom and work with local entrepreneurs and business incubators to pick up skills and experience, advises Dale Stephens, 21-year-old founder of UnCollege, an organization offering workshops and educational resources to young entrepreneurs who favor self-education over school. Stephens himself was entirely self-taught through high school.

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7 Changes For Your 'Startup Life'

There have been many thousands of pages dedicated to successful entrepreneurship, but rarely a word spoken about leading a successful entrepreneurial life until the release of “Startup Life.” In what I consider to be the first must-read book of the year, Amy Batchelor and Brad Feld artfully tackle the subject with an astonishing level of transparency and authenticity. No subject is off-limits, including emotional struggles, sexual intimacy, financial decision-making, and family planning.

The best part of the book is the practicality. They discuss irrational meltdowns and how each handles the situation. They describe the frustrations of a constantly tethered digital life and advocate for rest days, quarterly unplugged vacations, and “life dinners.” They explain the difference between “sleep at night” money and “f$%& you” money, why the distinction is important, and how to set financial boundaries.

“Startup Life” sparked me to examine my own desires, actions, responsibilities, and purpose. Here are a few of my takeaways:

1. Priorities: Our lives are an accumulation of decisions that seem small, but have major ramifications. When it comes to family, health, God, philanthropic endeavors, and the business, what’s the priority, and why? Priorities are easy to set without specificity and consequence, but life doesn’t happen in theory.

2. Motives: Brad and Amy discuss extrinsic versus intrinsic motivation, as well as extroverts versus introverts. Are you more motivated by recognition or achievement? Are you energized or drained by interactions with others? Understanding what drives your actions – and why – will allow you to be far more effective and fulfilled.

3. Friendship: A recurring theme in the book is the value of real friendships (not Facebook friends). Real friends truly care, give generously, provide transparent feedback, and are the anchors of life. When entrepreneurs get focused, it can be easy to let friendships slide (I certainly did). Make friendship a top priority, regardless of age, stage, or business goals.

4. Habits: The brain loves habit because it provides a quick response to what would normally require lots of thought. What we do, and in what order, is largely preprogrammed. This can either work for you or against you. Think strategically about what habits you want, establish systems to ensure they get formed, and before long, you won’t even have to think about them.

5. Philanthropy: I love the quote “Getting will make you a living, but giving will make you a life.” Amy and Brad talk in detail about the joy they derive from philanthropy, and how to properly establish your own philosophy of giving back. As I look back over the past five years, most of my highlights have surrounded helping others. If you’re not used to giving back, I’d highly encourage you to try it out.

6. Money:

8 Ways Entrepreneurs Can Master the Creative Mind

Synopsis
The most creative entrepreneurs create more value and wealth, not only in physical products and services, but also in their intangible assets such as their brand, reputation, network and intellectual property.

An entrepreneur is literally “one who creates a new business.” The best new businesses are ones that have never been done before, so mastering creativity and recognizing creativity are key skills and mind-sets. But how does one recognize and nurture creativity in a person or team?

Recently, I was reviewing a new book by Bryan Mattimore, “Idea Stormers: How to Lead and Inspire Creative Breakthroughs,” which outlines well eight attributes of the most creative people, which seem to match the mind-sets of some of the best entrepreneurs I know. Investors look for these in the people they fund, and you should be looking for them in yourself:

    Forever curious. Endless curiosity is the number one indication of the creative mind-set. It allows entrepreneurs to challenge what is already “known” to extrapolate that to an original idea. Curiosity infuses you with the determination needed to figure out or learn how to turn an original or innovative idea into a reality.
 
    Always open to new things. Thinking this way can be viewed as quieting the opinions of the judgmental mind long enough to allow the creative mind the time and space it needs to generate interesting insights, associations, and connections. This opens creative possibilities, rather than categorizing new things into self-limited dead-ends.

    Embrace ambiguity. This is the capacity to entertain contradictory or incomplete information without discomfort and anxiety. To the creative mind-set, contradictions are an invitation to more focused creative thought, to resolve the paradox, and derive a new un-ambiguous potentially great idea.

    Finding and transferring principles. There are two parts to this mind-set. First is the mental habit or discipline of continually identifying the creative principles inherent in an idea in a given context. The second part is adapting the principle to another context to create a new idea. It’s the ability to work from the specific to the general.

    Searching for integrity. This is the desire to discover, and the belief that there exists, an insight or connection that will unite seemingly disparate elements into a single integrated whole. When it happens, it’s exciting and magical, and it feels absolutely, positively, and completely right. Integrity doesn’t need to explain itself.

    Knowing you can solve the problem. This is the confidence that you can tackle the difficult, even seemingly impossible challenges, with inevitable dead-ends, to make a creative breakthrough. As with a success mentality, knowingness is the persistence to make creativity a self-fulfilling prophecy.

    Able to visualize other worlds.

5 things you need to know before working at a startup

A recent study by my company HireArt, a Y-Combinator-backed recruiting business, showed that startup employees often get fired or quit because they are not a good fit for the company. Part of the reason why that is the case is that working for a startup can be a bit different than working for larger companies.

Here are five things people should know before trying to work for a startup:

1. Working for a startup means having ownership over your work and doing something that you really believe in, but it also means doing whatever is needed of you.

Be aware that working at a startup also involves “grunt work,” well below what you might do at a larger corporation. Expect to do whatever is needed of you. Sometimes this will mean building a revolutionary feature to your product and sometimes it’ll mean making phone calls, signing for deliveries, or other tasks you may think are outside of your job description.

2. We all hope for a big exit a la Instagram. However, you should understand the risks and be aware of how rare startup success really is.

A recent Harvard study notes that 75 percent of startups fail. Will your next employer be a success or a failure? Even if everyone is working extremely hard at building a life-changing product, the reality is that it doesn’t always work out and many startups go out of business within a year. Understand what that would mean for your career progression — having too many “short stints” on your resume is a big no-no.

3. While getting equity is a big plus and many startups have yummy snacks and fun perks, expect a lower salary and fewer benefits.

Startups are usually more strapped for cash than other companies. This means that many of them may not be able to offer comparable salaries or benefits to other opportunities you might have. We recently had candidates for marketing positions asking for $150,000 –- note that while this might be doable at a large company, startups, in our experience, pay about 70 percent of what you might get at a larger organization.

4. You’ll have lots of exposure to founders at a small startup, but you may get less mentoring than you need.

The team atmosphere of startups is what makes it irresistible to many of us — working in a small group to achieve a big goal is energizing and feels like you’re back in college. But your managers are busy and often don’t give you the kind of formal mentorship you might get elsewhere. Don’t forget that your managers are often less experienced than you are in a given field, so it’s up to you to learn on your own. If you’re the only marketing hire at a start-up, you’ll get much less mentorship than if you worked at, let’s say Proctor and Gamble, where people with tons of years of marketing experience can teach you the tricks of the trade.

5. Finally, and perhaps most importantly, while startups are a lot of fun, the pressure can be much higher than at other types of companies.

10 R’s of Motivation Every Entrepreneur Should Know

One of the keys to maximizing the productivity of your team, as well as yourself, is motivation. It has been estimated that the average team member at any given time works at less than 50% of his capacity. Thus mastering the art of employee motivation could double your chances of success over the average competitor.

While there are many books written on this subject, most entrepreneurs I know simply assume that their own vision, motivation, and drive will be adopted and maintained by partners and employees, based on a one-hour inspirational talk by the founder or business leader, supplemented a reasonable salary, and a dose of fear for good measure.

Unfortunately, it’s not that easy. Motivation has to be a constant priority and tone, focused more on the positive emotional and internal needs of a person, rather than their opportunity to simply make more money. My review of the research indicates that many experts have settled on four R’s for motivation, but I have found ten, and you can probably add a couple more:

Respect. Every professional expects to be treated with respect. We all watch our leaders body language, facial expressions, as well as their words, for indications of respect and disrespect. Show by your words and actions that you value their role.

Resources. A team that doesn’t have the resources to do their job will lose their motivation rapidly. In a startup, key resources include funding, facilities and tools, and the time to get the job done. The most important resource may be your help and support.

Relationships. Positive social interactions with fellow team members leads to improved job satisfaction and motivation. Inversely, people who are negative and bring negative interpersonal attitudes to the workplace will destroy the motivation of others.

Responsibility. New responsibilities, when done with respect and moderation, prevent stagnation and challenges people to perform at even higher levels. Most people will rise to the occasion, see their progress, and become even more motivated.

Recognition. When you recognize and celebrate individual achievements, large and small, in front of peers, people feel wonderful about themselves. They feel more competent and eager to repeat the success or take on additional responsibility.

Rewards. People need rewards to maintain their motivation, or they will start to feel that the recognition is all “show,” with no substance behind it. Cash incentives are a good start, but even intangible rewards, like lunch with the boss, can be powerful motivators.

Reserves. In the military, an important mission is always backed up by reserve forces. Having backup gives a team confidence, motivation, and a sense of value. In startups, when people are clearly willing to back up each other, everyone’s motivation increases.

Reasons.

12 Essential Questions You Need To Ask Before Launching A Big New Idea

Whether you’re launching a new product or service from within an existing enterprise, or you’re an entrepreneur noodling a new startup idea, I find that the same fundamental set of screening questions can help you shape your idea.

I’ve assembled these questions into a 12-point framework I call the Launch Lens.

As you screen new-business ideas, the Launch Lens gives you a quick way to focus your thinking and flesh out the concept.  First-pass, do your answers to the questions make you feel more excited about your business idea?  Or does the Lens uncover red flags that might give you pause about moving forward?  And if your idea passes a first-order screen and you decide to dive deeper, the framework gives you guidance as to where to focus your research and analysis as you develop your plan.

Let’s zoom in on each ‘focal point’ of the Launch Lens:

1.       Who are your customers?

What I mean here is to generically describe the types of customers (not to list your specific customers).

That is, what are the categories of consumers, businesses or other entities that will purchase and use your product or service?

If you have a consumer product, is your target market Hispanic pre-teen girls in Southern California… or Baby Boomer men and women throughout North America… or music lovers over 30 with disposable income of $35,000 or higher… or whom?  Be as clear as possible.

If you have a business-to-business product, is your target market warehouse operators of a certain size… small independent retail establishments…. software developers…. financial institutions… or whom?

2.       What is your customers’ unmet need?

To state this question another way, what is the customers’ “pain” that your product or service – you’ll be describing that in question #5 – is designed to ameliorate or address?  This could be a true and dramatic unmet need – for instance, for the inventors of the pacemaker, the customers’ unmet need was that their hearts were beating slowly or unpredictably, thereby endangering their lives.  On the other hand, for some businesses, the unmet need might be a less of a need than a want – for instance, for the founders of LoveThoseHotShoes.com, the “unmet need” might be the frustration of style-conscious women in their inability to learn about up-and-coming designers before they make it big, and to easily purchase those designers’ shoes at competitive prices.

3.       How are your customers addressing this need today, however poorly?

Even if your company has a novel new way of addressing a customer need, remember that those customers were addressing that need in some other fashion before you came along.  Say you had developed the first automatic dishwasher: your customers would have been addressing their need by hand-washing dishes.  Before the advent of the cell phone, individuals got along with a combination of landlines at home, in their offices, and in phone booths.  Before SMS texting, people got by with email.  Before email, people made due with phone calls and postal mail.

4.       To what extent are your customers hurt by not being able to meet this need effectively?

If they’re business customers, does their inability to address their need optimally (i.e., using your company’s new solution) cause poorer product quality for them?  Does the pain delay their product launch by several weeks, thereby postponing profits?  Does the absence of your solution lead to more clinical errors?

If you’re targeting consumers, does the pain cause them to look unstylish at school, thereby causing loss of social status?  Fail to connect with friends due to the lack of your social networking app?

5.       What is your proposed solution (product, service, or combination)?