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Wednesday, February 29, 2012

Putting Lipstick On The PIG

You may have heard someone say “Let’s Put Lipstick on the Pig”, or maybe they use language like “Perfuming the Pig.”  The phrase conveys trying to sell or promote something that may be less than popular by making it look more attractive.  For example, a company has a technology that is not in its primary core activity.  The technology may be a candidate to sell off.  It may even be in your primary area but your primary business has not gotten traction.  The goal would be to make it look more appealing to someone in order to gain a financing or have the business purchased.

The fact that the concept is so common that the language reflects dressing up something prior to promoting it for sale or financing, should tell you something.  It happens a lot!  Your startup goals are always to create the best business that is possible.  This includes the technology, staff, leadership, products and structures.  Failing in any key area can result in a business that is suboptimal and attracts less attention.  Your only way out could be a sale of the pig.

You should always strive to improve the business.  Those steps that generate real change and an improved business do not fit with the phase above.  Use of the phrase occurs when you cannot improve the business and your primary efforts are trying to make it look better via a cosmetic approach.  The underlying business may still be suboptimal, yet by changing how it is presented, or by cleaning up just enough to hide flaws, the business starts to look better.   A very simple example might be in a corporate presentation.  The underlying data is the same as is everything else about the slide show.  Yet, your hope is that by changing the slide show it will sell better.

The approach cuts two ways.  In a previous article, “Got a Great Pitch, GET IN LINE” described the fact that buyers and sellers have pitches and it is important to see the facts in addition to the hype.  It is hard to tell how the business has changes unless you have seen it before.  Most interestingly, may on the financial hunt for funding will revise their slide deck and present it to financial investors.  An interesting point is that the sophisticated investors keep the OLD SLIDES.  Trying to convince them with NO NEW DATA is a hard sell unless their investment philosophy has changed.  In fact, I have had some say, “So nothing has changed since I saw you last?”  Those that are not so direct might say, “What is NEW since you were here last.”  You would be surprised how many entrepreneurs keep presenting the same old stuff hoping for a different response from an investor.

The company should strive every day to make progress.  Adding new data and company enhancements greatly improves the pitch for funding, sale, or partnering.  It often takes several visits to consummate a transaction beneficial to your company.  The gradual improvement in the pitch showing the NEW stuff really helps provide confidence to the listener.  The ability to make that sale to the listener based on real data is one of the reasons that the entrepreneur must keep the company on track even in difficult times.  It is so much easier to make the sale based on solid and real data rather than old tired data or product that is dressed up.

There may come a time when your business has decided to stop all work on a technology or product but want to recover some of the costs by selling it off.  In that case, you just may want to “PUT LIPSTICK ON THAT PIG” to sell it off.  Just keep in mind that for your core holdings, try to show continual strength and progress.  Try to keep the lipstick for the things you can afford to keep any more.

Thursday, February 23, 2012


I just returned from a full day of discussions and a seminar at a prominent university in Philadelphia, PA.  The day consisted of meeting faculty with inventions and entrepreneurial leanings.  Then I gave a seminar on how to create a startup company.  The standing room only audience consisted group of faculty and graduate students from different schools at the university.  A few weeks before I met with some local startups to discuss issues they were having.  I usually like to provide ideas on ways the businesses can advance with fewer funds or to help them overcome current issues they may be facing.

One common pattern often shows when discussing alternative ideas, the listeners sometimes show that light in their eye that says “I Get It.”  They then say, “That is a great idea.”  The interesting part is that the idea is not that novel but it is novel to them. The experiences I typically relay have come from ranges of activities and interactions in the past.  The prior experiences help in formulating alternative solutions for those needing help.  Recall, I continually encourage entrepreneurs to get mentors and advisors for just this reason.  However, this is not the key point of this article.  You will have to wait until the end to find out the point I am making.

Take for example a group of IT professionals starting a company.  A few of the companies are preparing for a product launch and need to raise capital for marketing.  No telling how long it will take to get the funds and there is no real data to show their ability to capture market yet; does this sound familiar?  The suggestion was to provide the product for a year free to a handful of high volume users.  These special users get to use the product free as long as they write articles on the use and allow the companies to advertise on their site.  In addition, the users would receive an extension of free use if they help recruit a certain number of additional high volume users that pay for the service.  Those paying users might get some type of discount for a fixed number of referrals. 

With no funds, the company could use the concept to start a trial launch and trouble-shoot any issues that arise on the limited scale.  As momentum picked up, they would be on top of the platform and ensure the end users have minimal issues and have a great experience.  Finally, by collecting data and testimonials from users the company would be able to use the info to approach investors with real sales and experiences from end users.  You will have to wait to see if the approach works, a few of the companies are trying it now.

As I stated earlier, the issue is not that the idea is new but new to the companies.  The point of this article is not to get mentors and advisors but I strongly recommend it.  It relates to how you think of the problem and whether you insist on sticking to a hard and fast traditional approach or think of alternatives. 

In Summary, the REAL POINT IS TO:

Monday, February 20, 2012

Are You Over Your Capabilities?

I wrote an article titled “The One Word Entrepreneurs Do Not Say.”  The word is Can’t just in case you have not read it.  It is true that real entrepreneurs do not use this word and their primary mode of action is to seek ways to solve problems; go around them, over them, under them, or through them.  The never give up attitude is critical to success.  However, there is a cautious warning that sometimes there will be situations or businesses that you cannot fix or build.  In fact, it may be beyond your skills or those of anyone.  This is difficult to imagine, but it does happen.

I was reminded of this issue due a persistent Blue Bird!  Yes, you read this correctly, a Blue Bird.  Not just any old blue bird but the one pictured here:

This bird is a true entrepreneur in every sense of the word.  He does not have the word Can’t in his vocabulary.  He has nested in the small house for the last few years.  Now, he has his eyes on a much larger home, MINE!  For months now, he comes to the windows and continues to seek a way to move in.  He flies up and bangs into windows or doors producing a thud sound trying to get in.  I would have thought he would have sustained injuries but he is fine.  He will not be deterred nor can he be convinced to stop and he continues to show that amazing entrepreneurial spirit that comes in every startup. There is only one problem, he is over his skill set and is not getting in here!

This inability to complete a task happens in startups too and can results in failed businesses.  All of the properly conducted background work may be great; i.e. the markets exits and the business proposition are great.  Suppose the founder or management team cannot execute properly because of lack of experience or skills.  Remember, it takes a great management team to seek alternative ways of resolving problems.  The team survives on these skills.  When the background training and lack of advisory support are missing, there is greater room for failure.  This is why I have covered the area of finding great mentors and advisors as a topic in prior articles.  Great mentors and advisors can increase your chances of solving problems by bringing their prior experiences to help seek solutions.

I firmly believe there is a solution to every problem.  Sometimes the solutions are not so easily visible.  It is important that you not keep hitting the windows or doors like the blue bird.  The repetitive attempt to solve the problems with the same solution repeatedly just does not work.  Find as many alternatives as you can and keep trying.  Call on mentors and advisors and make use of their skills.  Your goal is not to do it alone, but to DO IT.  Who cares if a cast of thousands helps you?  Just find a solution that works and stop repeating those that do not.  Don’t be like the blue bird, be a more skillful version and keep up your entrepreneurial spirit.

Friday, February 17, 2012

Got a Great Pitch, GET IN LINE

Entrepreneurs learn that an important part of building a startup is to develop a great pitch.  They practice the pitch and via “trial by fire” give the pitch to other parties.  They are always refining the story in an effort to improve it and gain investments or partners.  This is all a normal part of developing and growing a startup.

Sometimes, we all forget that our startup is not the only business that has developed a pitch.  ALL of the prospective investors, business partners, contractors, sales people, and service providers have their own pitch.  It is hard to be in sales or service without having some story to present to clients and develop a skill of closing a transaction.  It is in the development of your startup that you must realize that the people you speak with are also pitching YOU!  This means you have to evaluate them with some of the same scrutiny as they are evaluating you.

You must protect the resources in your startup.  Every sales pitch you hear may cost you money, time, or other resources, even if it is nothing but trying to evaluate the other side.  Take for example, your approach to an investment-banking group.  Every one of these firms has one real goal that is that they want to make money. Your startup is a potential product for them so present to investors and if they are successful, they make money because you get funds from the investor.  They represent you, but their real customers are the investors they go to with all their other companies that need cash.  The companies they hawk are the inventory they sell.  It was no surprise when a friend once told me that investment-bankers were “all whores, the only difference it the price of their suit.”  The phrase was to relay the fact that the firms tell you what they think you want to hear.  In the end, the deal gets done or it does not.  Investor-relation firms fall in a similar frame.  They know how to present your company to help you gain recognition.  They know how to sell!  Get the picture.  They also know how to sell to you.

Your prospective partners or service providers want your business.  They have developed skills to present why you should be working with them.  They will have slides, handouts, great sales people, demonstrations, dinners, and other benefits.  The companies have become viable because they honed the skills required to get business.  Maybe your business.

A much bigger issue is your ability to assess who you believe is REAL and who is NOT.  The companies, partners, or investors may also be terrific (or not).  The ones you pick should be selected because your diligence suggests they provide you with the greatest chances for success.  They should be people you trust and want to work with.  In essence, you need to do due diligence on them, just like they will need to evaluate you.

The need for knowing and trusting your possible partners also goes for trust in your investors.  You will need money.  Are you evaluating how the investor will affect your business?  Many of the investors will want to be on the board or have some other part in the business.  Companies sometimes end up with boards of investors that just kill the company.  I know of a few of these situations and believe me when I say the situations are terrible to deal with.

The whole point of this article is that you are not the only one pitching your wares!  You have to listen to others and will need to learn to evaluate what is said as well as the ability of the other party to deliver.  In the end, you are the CEO & Manager.  You must “PLAY YOUR CARDS, AND TAKE YOUR CHANCES.” At least make sure you have built the strongest hand to play!

Wednesday, February 15, 2012

Clarity NOT Charity

Communication is one of the most important skills an executive or an entrepreneur needs, especially when it comes to running a startup with a highly focused and skilled team.  The spoken words must convey the clarity and specificity needed to get what you want done completed.  Clarity is especially needed in making the value proposition for your startup.  In an effort to not offend others, words are used in less than clear terms. The explanations being something like “I was being politically correct.   To that, I say:

“Guess what, I did not understand what you wanted or why it needed to be done. Your sense of urgency was completely lost on me. Now, I am off doing something that I thought you said you wanted and we just lost time and money.  Oh yes, and guess what, the problems you had are not solved because I was not working on them.”

I have become a strong believer of being more direct.  This may not be taken as a pleasing experience when communicating with others, but hopefully they will understand what is being said.  Even with being direct, the meaning and instructions can get lost.  This is one of the most difficult issues a manager can face when trying to lay out strategy, correct personnel issues, communicate the value proposition to an investor, and many other situations.

There are a few things that may help to ensure the message is relayed properly and the other side gets it.  Here are just a few:

·        Follow up with a written description of what you want.  Sometimes a person seeing it written down will take the meaning a bit different than hearing a verbal description.  They may also remember it better.

·        Have the person repeat back to what they think you wanted.  When the person repeats what was expected and it is clear, you have a better idea that you communicated your point.  It may still be a good idea to have a written follow up to ensure memory of what was expected.

·        Spend time explaining why you made the request.  If appropriate, having a rationale stated to the other side can help put the issues in perspective.  Bringing the other side to a level of understanding the problem may get you two things; 1) they may have other ideas on the way to resolve the issues, and 2) they may better be able to address your concerns and accomplish what you really want.

·        Make sure the words you use relay what you really need. You may be asking someone to help resolve an issue.  The description of the issue may relate to a different set of problems than the one you want resolved, resulting in a person trying to solve a different but real problem rather than the one you sent them to deal with.

·        Ask if there are any questions.  This at least allows the other side to recognize the instructions can be questioned and clarified if they were not understood.

·        Monitor the progress.  If you walk away and do not monitor, the other side will proceed and you may not catch the error in communication until far too late.  Monitoring progress regularly will help you set things on the correct path more quickly and save time and frustration.

Friday, February 10, 2012

Unintended Consequences

One day someone will tell you to watch out for the law of “Unintended Consequences.”  You will certainly run into this law as you perform your entrepreneurial activities.  I mentioned a few examples in the last article titled “If It Ain’t Broke, Don’t Fix It.”

Planning for your business is a time consuming activity.  Strategic planning is essential in order to accomplish the goals in the business plan.  You will always be looking at activities on a daily basis and seeking ways to improve the company performance and delivery.  Predicting your milestone timings and then hitting the timings presented to potential investors is maddening and stressful.  You will be a hero if you are successful and a goat if you miss or fail.

The scope of duties expected of the CEO or manager includes improving or changing the business or organization as needed.  Review of all activities along with your creativity may provide clues on improvement steps. Keep in mind, there are always the unintended consequences you can never predict.   These unexpected events can be good or bad.  They do not occur in every scenario, but when they do, you should be prepared to deal with them.

Take for example litigation against Company A.  The litigation was in progress for about 3 years with no court date set.  There were many trips to the judge and lots of name-calling occurred.  While the litigation took its own path, the suing company continued to develop contacts and identify potential partnerships.  One day a director of the suing company gets a call from a possible partner.  The call resulted in a meeting between the CEO and Company B.  It was a strange meeting.  The CEO walked in and said “if you want to talk, I want x of funds in my account before the end of the month. Otherwise, go away!  Guess what, the deal closed in less than three weeks.  The litigation with Company A settled in the following few months.  This is the short version of a good outcome and ability to act quickly to an unexpected event.

The case of the two employees mentioned in the last article is a case of a bad outcome.  Two stellar individuals both able to perform at the highest levels were hired.  One was a contractor while the other was an in-house employee.  The fact that the two personalities conflicted was greatly unexpected.  The characterization of the two being like “Gasoline and a Match” was even more unexpected.  Eventually one of them was asked to leave.  This was sad. Both individuals were terrific.  The devastation left behind from their interactions was not expected. It took a long time to clean up after one of them left.

The take home message is that you must be aware that unexpected events happen.  They come after thoughtful and well-planned activities or actions, and they occur by accident.  You MUST be vigilant and take advantage of the good ones, and rapidly correct the bad.

Taffy Williams is the author of:  Think Agile:  How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon

Wednesday, February 8, 2012

If It Ain't Broke, Don't Fix It!

 Are you the kind of person that likes to tinker with things to optimize performance?  I am!  It is hard for me to see devices without trying to improve the performance.  Sometimes, this activity overlaps into managing a business.  People look at how well something is performing and they want to improve it.

This happened recently at a local restaurant.  While the owner decided to sell the business, the new owner took over and revised the total menu on day one.  The new menu was enough different that those people that frequented the location, seem to be greatly reduced in number.  The changes may have worked well if done over a longer period.  Perhaps customers would have adjusted better, but the immediate adjustment seems to be a problem; at least for the short term.

Once I hired an outside program manager to run research studies for a business.  Extensive reference checks and analysis of prior performances showed the individual to be a stellar find.  A key program was handed to the individual to manage and performance was excellent as expected.  I wanted to fine tune the program and bring control in house!  I retained a search firm to hire an in house program manager.  The search firm brought a fantastic candidate, which we immediately hired at a great salary plus options.  The new hire was tasked with management of the overall program including external projects and people.  The result was a bit like having “Gasoline and a Match.”  The whole thing blew up due to personality differences between the two great people.  Fine-tuning did not deliver the anticipated results.

When I was younger, I liked to tinker with an old car I drove.  I always was trying to make it run smoother or faster.  My mechanical knowledge is minimal so tinkering was exactly what I was doing.  When I would take it to my mechanic, he would have to fix what I had messed up much of the time.  Finally out of frustration he turned to me and said, “if it ain’t broke, don’t  fix it!”  (Remember I am from the SOUTH.)

The saying stuck with me all these years.  Fact is it fits with business and most situations.  When you have something running smoothly, you always stand the chance of screwing it up by tinkering with it.  You are always better off by real analysis of the situation and determination of exactly what you intend to accomplish.  You will likely not always get the outcome you thought you would obtain.  So be cautions that when fixing something that is not broken, you don’t do more harm than good.

Tuesday, February 7, 2012

“Popeye Syndrome”

Invariably everyone has a time in their life when things seem to create too much emotion and they just want to do something about the situation.  Actions that take place at this time can cover a wide range of responses.  Sometimes, the actions are planned and at other times, the actions are spontaneous.  The breaking point is what a friend of mine once called the “Popeye Syndrome.”

For those people that do not know who Popeye was, you missed the cartoons on Saturday morning when growing up.  Popeye was a sailor that had a girl friend named Olive Oyl and a friend named Wimpy and a rival named Bluto.  In many episodes, Popeye got into a fight with Bluto, a much bigger and stronger looking sailor.  Bluto would always over power Popeye until Popeye ate his spinach, which turned him into an ultra-strong person.  Then he would win the day by defeating Bluto.  It is the point when in the fight that Popeye realized he cannot take any more abuse and he says “ I had all I can stands and can’t stands no more”; what my friend referred to as the ”Popeye Syndrome.”

It is important to recognize that this point in your business will come.  The events may be widely different.  They may be during intense negotiations or debate.  You realize that you are working far too hard for the quantity of business coming in the door.  A competitor has taken much of your business away.  An employee created significant problems, which will take you days or weeks to correct.

Hopefully, you will realize the timings and situation but you most likely will not feel like taking the step back that you really need in order to develop a plan to solve the issue.  Your stress level is usually too high and you just want the issue OVER. Secondly, you are prone to not considering the issues carefully, and you will feel less like speaking with a person you trust to help develop a solution.  The potential that you act too quickly and with little planning can result in situations that are even worse.

It is important that you learn to recognize the “Popeye Syndrome” in you when it occurs.  It is even more important that you train yourself to act in a manner that is not so spontaneous and that you consult with others.  Planning can help reduce the possibility that your intentions to relieve your stress will just make the issue worse.

In short, when you “had all you can stands and can’t stands no more”, take a break. Maybe go to the Gym and work it off or take a walk.  Wait a few days if time permits.  Think about solutions and discuss them with a close confidant.  Always try to execute a plan that will improve your stress and the situation.

Oh, and as far as Wimpy goes, my favorite line from him was “I will gladly pay you Tuesday, for a hamburger today.”  You may recognize similar lines from people you work with that seem to want things from you free.  Try to control those situations or you will eventually just get upset with your friends or work associates.

Taffy Williams is the author of:  Think Agile:  How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon

Thursday, February 2, 2012

Have A Great Idea? Hold that Though!

Interacting with many entrepreneurs and inventors is rather interesting.  You learn a lot, but you also have to clean up many missteps.  One of the more common issues occurs with inventors.  Inventors often get excited about new ideas and they want to share their enthusiasm and have others be excited as well.  The timings of the discussions with others and the information relayed can lead to problems.  It does not matter whether the transmitted information comes from the entrepreneur, CEO, employee, or the institutional scientist.

Entrepreneurs often start companies with the technology originating from a university or government facility.  The institutional scientists creating the technology have goals that are not aligned with the newly formed company.  These scientists usually have to publish their work, speak at conferences, obtain grants, and/or interact with vendors.  This is how they are recognized and evaluated by their institution and their colleagues.

Scientists are enthusiastic by nature when it comes to their work or inventions.  They want to engage in discussions that may help them refine their ideas.  They also want to present the work of their research to others in a variety of ways.  In a few situations, this can be an issue, for example: 

·        Presenting information before filing patents, copyrights or other IP, may prevent the ability to protect the inventions or ideas.

·        Presenting to the wrong company may allow them to capture the ideas and claim it as their own. 

·        Finally, if the ideas are not to be patented, the relay of information eliminates the moat around your business that would be created by internal know-how.

There are correct ways to engage others and still attempt to protect your intellectual property.  It is extremely important that entrepreneurs learn these and relay the info to their scientists as soon as possible.  Otherwise, cleaning up the missteps will take very much of someone’s time.

A few ideas how to protect information:

·        Do not talk! – The best is keeping the idea quiet.  What others do not know will not hurt the company. 

·        Confidential Agreements – Develop confidential agreements and have them in place before speaking with those outside the company.  Hopefully, all the company staff and management have the confidentiality clauses in their contracts.

·        File IP before interacting – There are filings and invention disclosures your counsel can do prior to that special conference, meeting or other event.  Invention disclosures lead to Provisional Patents that will help protect the inventions.  

·        Identify other alternatives by speaking with your counsel.

In short, when you get that great idea, keep it to yourself until you figure how to protect it. 

Wednesday, February 1, 2012

Did You Forget Something?

Why is it that smart people sometimes forget to do smart things?  I am always amazed at how stories from others match my experiences and confirm failures of people trying to make contact.  Negotiations, networking, searching for jobs, seeking funding, and many other activities are common events.  A person reaches out to another and desires to discuss obtaining something.  In approaching others, why do some people not take time to learn about those they plan to approach?  This is not smart!  If you sending a resume to a person you never met, at least take the time to send a cover letter!

Just last week I received a call from someone I know well.  The person had placed an advertisement in Linkedin in order to recruit a new employee into a business.  More than 100 resumes were received with only 4 people taking the time to add a cover letter.  When applying for a job, it makes a bad impression when you do not attempt to learn about the recipient of your resume or demonstrate knowledge of the business!  Sending a cover letter gives a great way to summarize why you should be considered.  Not attaching a letter is just not smart and gives a bad impression!

When attending an interview or networking visit, it is always a good practice to know something about the people you plan to meet.   The knowledge helps you plan and carry on a better discussion.  I network a lot and I get requests to help others.  What kind of impression do you think it gives when asked how much do you know about me?  As an example, I received a call from someone trying to raise capital for a company.  The person had spent a year trying to help the company develop as an advisor.  When he approached me via an introduction, the call seemed rather odd.  He could not answer any questions about the technology, Intellectual Property, and he seemed to be unable to answer key questions about the technology. When I asked what he knew about me, he had not learned anything.  I then took time to review my background.  I really wanted to ask, “Why did you call me do I have sucker stamped on my head?”

The same thing happens with people wanting to raise capital.  I get emails from unknown individuals describing they are seeking money and have nothing describing their technology.  To top it off, they have spent no time in learning who I am or what I do.  If I called you asking for money with that type of introductions, how inclined would you be to give me money;  NOT LIKELY! 

As an entrepreneur, you are smart and driven for success.  I hope that you want to display a professionalism that will place you with a great first impression.  This is critical with every contact you make.  It is true whether you send an email, make a cold call, or seek funding from VCs.  You really need to learn all you can about the people you approach and/or businesses.  Take the time to do things the right way and be smart about all your interactions.  Do not come across as someone that has no manners or no interest in others.  It is a bad way to start a relationship.

In short:  Do your homework and make smart approaches to everyone you desire to speak with or meet!