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Wednesday, September 26, 2012

Be known for reliability and honesty

How far out of the box are you willing to go?

With the political season in full force, you hear stories from the candidates followed the news dissecting the info and presenting the fact checker analysis.  Spin-doctors attempt to correct gaffs or redefine candidates in unique ways.  The fact checkers attempt to provide the context and factual info behind statements.  A recent political speech, analyzed by the fact checkers, apparently was true as delivered.   Parts of concepts were eliminated to allow the stated content to be accurate. However, inclusion of the omitted parts would have lessened key arguments in the speech. Sometimes the political figures do not even bother to make the statements truthful. They stretch the facts and repeat the misinformation enough that people believe the statements as pure fact. 

Sales representatives often attempt to make the product look more attractive by embellishing the stated benefits. This occurs on product labels as well.  Look at products in any health food store.  Specifically read the stated benefits.  Statements like great for your immune system or good for heart health.  What does that mean anyway?  It does not matter that there is little real data to support legitimate concrete claims.  Consumers take the advertising materials as meaningful and purchase the product. 

Entrepreneurs need to raise capital and approach investors.  They tend to put a positive-spin on the company, markets, and team.  They have a goal of getting the investment and painting the company in the most positive light.  They must generate enthusiasm around the investment opportunity and it is hard to do sometimes with the straight boring facts.  A few twists here and snips there and the story sounds much better.

Investors have become a bit more perceptive and tend to check the presented information more carefully.  At some point, they will retain specialists to help review the company and all materials.  The review must match the facts or liability is created on behalf of the company.  There is a point where the spin can become too severe and it is by all measures a flat out lie. 

All CEOs need to retain their credibility and pressing the facts to far gets them labeled as dishonest.  The investor pool tends to share their feelings with others even if they are not investing in the same deal.  Once you have received the label, it is near impossible to convince people you are truthful.  They will discount most of what you say and move on.  They are not likely to challenge you and you may never know their true feelings.  In the past, I was warned about certain people without asking.  They community was happy to volunteer the info about someone they did not trust!

You have to walk a fine line.  The company must appear exciting. Your actions must be justified to your investors from time to time.  Keep in mind that there is a line between SPIN and LIE and once you cross it, your actions are questioned forever.

Tuesday, September 25, 2012

You may never see what I see

In my last two articles (article 1 & article 2), I described that you must teach people enough that they are able to understand and agree with your vision.  Even if you teach them, they may still never see what you see or agree with your conclusions.  The data may be there right in front of them and they will just miss the conclusion or interpret it differently.

As an example, the photo above shows a picture of an animal.  The animal is large and when found in the woods is rather furry.  Everyone in this photo stopped to take their own photo of the animal and they are looking directly at it.  Can you see it?  I have described what you should look for, but I suspect many of you are missing the image.  I know I did and I took the photo.

Now look at the image again.  Start from the top and you can see the ears at a point. Coming down the wall on the right you may see back of the animal.  Keep in mind perspective is everything when you view something described to you.  The image painted by words is essential but the eye may still not see and perhaps your experiences are telling you something different.

Focus on the brightest areas in the center.  Keep in mind that everyone in this photo sees what I am describing and recognizes the animal.  The blurred visitor is moving away and on the other side.  Can you tell what the animal is yet?  One last hint is that the nose is at the top left and a little brighter than the surrounding area.

The image is a bear!  Now that I have told you what to look for and provided you with clues, I suspect many of you still do not see the bear image in this opening.  Do not feel embarrassed, it took me several minutes of someone pointing and describing before I saw the image and I was there.    

Now recall the last time you told a joke and no one laughed.  Most likely, they did not get the joke.  A worse scenario is that they got it but failed to see the humor or your delivery was all wrong.  At least you knew something was not right because of not seeing the immediate response you wanted, i.e. the laugh. 

You may never know when an investor does not get your idea or business model unless they break down and tell you.  No matter how great you are, there will always be those that miss the concepts.  If you ever learn of the confusion, you have a chance to correct it; most of the time you will never know.  Adding to the complexity, many of the people you present to will ask a friend or neighbor about their impressions of a business area.  When the response comes back negative, the investor would move on for sure.

No matter how clear your presentation or detailed your business plan, there will be some people that see something different from your vision.  You cannot convey the image to everyone the way you see it because they see something different.  Your best efforts are to learn what you can, be as clear as possible, and move on.  Maybe you will find a way to help them see the vision or convince them in the future.

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

Monday, September 24, 2012

Investor meetings will not happen if they do not believe what you send

You only get one time to make a great first impression

I have reviewed countless technologies over the years from the company side and the investor side.  In addition, I have presented or attended many meetings with investors in efforts to get companies funded.  It is clear that the investors understand the technology and business or they do not.  What is sometimes not clear is whether their understanding relates to what you are presenting.  This means you can walk out of a presentation believing the investors understood and agreed with everything you said, and they depart the meeting in a fog!  Making the process worse, you may have lost them on the review of preliminary info sent to seek a meeting.

Understanding is critical to the investment process.  Investors will not give you money if they do not get it.  One factor that to consider is if they understand do they believe; i.e. did you pass the sniff test.  When investors do not believe what you are telling them, more often than not they do not even take a meeting.  This leaves you with the loss of a chance to make a positive impression because the info you sent leaves them thinking your technology is flawed.

This occurs more than you might think.  In a review of a technology recently, I sent the info to several people to gauge their responses.  The technology was simple but the underlying science was a more complex.  Convincing someone the product may work required his or her belief in the underlying science.  Even though there was a summary of the science, none of the people that received the info got the message.  Several phone calls later, it became obvious the company was not getting the reception they desired because they did not pass the sniff test. This was a true tragedy since the product seemed to be very exciting and of significant value. 

It is critical that investors understand your technology.  They may need to understand the background leading to the technology as well.  Failure to present the business opportunity in a manner that leaves the investor comfortable will result in a negative response.  It is hard enough to have people fully understand every aspect and have them give you money.  Complicating the process by presenting the business and having misunderstandings makes obtaining investments near impossible.

One trick you might try before you swamp the investment community with your marketing materials is to test drive the materials with several third parties that review the info FRESH!  It took this process for me to understand why the company had not received a great reception from a number of investment firms.  Changing the approach and materials may help, but it now requires a re-education of all those that passed the first time around.  I have stated this before, but you only get one time to make a great first impression.  After that, the work gets much harder.  Test-drive your marketing materials and be confident your message passes the sniff test before your show the materials to investors.  Make a good first impression and increase your odds of success.

Wednesday, September 19, 2012

3 Main startup traits attract money and talent

Everyone has their own set of biases and requirements when it comes to evaluating business opportunities.  I have mine and often state them publically when meeting with companies I am considering a future interaction.  My criteria for engagement are the same whether my participation is as an investor, Director, advisor, or operating member.  I believe that everyone uses the same criteria.  People may state them or weight them differently, but all diligence and evaluative processes examine the company relative to these 3 key characteristics; 1) exciting technology, 2) great people, and 3) potential for future payoff.  All of my evaluative processes follow these 3 characteristics in this exact order.

Future employees, investors, or potential business partners may describe my factors in different terms.  They all will have some means of evaluating you and your company relative to them.  The better you can relate your business to the traits, the better the odds they may decide to interact with your company.


I have reached a stage of loving technology and finding excitement in new and novel inventions.  It is exciting to review a technology and learn a new field.  The technology must be original and novel and never copycat or me too.   I must see plans toward monetizing the technology and converting products into a sustainable business.  I also love to see products that improve people’s lives in some unique way.  With this bias, my common statement is my first priority is “I have to LOVE the technology.” 


I often joke that my resume states I will not work with NASTY personalities.  Actually, I say that in a more vulgar manner, but you get the message.  Working with people on a day-to-day basis and having close contact with frequent idea exchanges or instructions can be stressful.  Working with individuals that will not listen or behave like jerks reduces the enjoyment factor of working with a great technology.  Why waste my time working with people that are incompetent, opinionated, obnoxious, and/or will not listen? My stated objective is very clear with every company; “This Company must be successful and I will do everything I can to help.”


This brings me to the final factor that is the last on my list, but it may be first on many others’ lists.  I expect to see a payday some place down the road.  I do not mean a paycheck, but a real big payday.  Working with early stage companies usually means working for some period at RISK; this means not getting a paycheck.  The reward must be worth the effort and include compensating me for the risk component plus the lost income component.  I expect to have an ultimate reward being a large appreciation in my equity coupled with a liquidity event that takes place in my lifetime!  After all, “I am not in this business for religious reasons.”

Monday, September 17, 2012

Selling and closing are essential to the success of business

Money:  You got it and we want it!
One of the best lines I ever heard came from a CFO during a meeting with potential investors.   The investors asked what we wanted.  The CFO responded, “Money, you got it and we want it!”  If this concept is foreign or uncomfortable to you, consider retiring rather than starting a company or small business.  Any entrepreneur focuses on this key goal even if they are altruistic by nature.  There is an absolute requirement for money to start, build, run or even close a business.  That said, there are differences in the type of selling that is required and many customers require extra effort to close the transaction.

Selling something requires showing the person that the product is what they really want and need; i.e. creating that desire for the person to have the product.  This may be a real tangible item sold wholesale or retail like software, drugs, diagnostics, or electronics.  The item must appeal to the individual enough that they are willing to hand over their hard-earned money to pay the full value of the product.

The desire to own something also applies to investments.  Investors seek to earn money by investing and holding their ownership in a business until they can exit making a profit.  Showing the investor how the investment will make money and how your plan will protect the down side is a critical part of the selling process. The investor needs to understand the retail product(s) and share in the vision that retail customers will want the item or service.  Showing the investor how they can earn a multiple on their investment in a limited time is critical to the selling process.

The products may be different but investors and retail customers are just buying a different output from the company.  They each require being shown the benefits of what they intend to purchase.  The investor buys part ownership in the company; the retail customer buys the output from the company.  Selling is so fundamental to the overall process of building a business that being successful requires development of the ability to convince people the product is what they must have. 

Showing people what to buy is part of the cycle.  Getting them to CLOSE is the other part.  Many people have a very hard time giving up their money.  This is the same for investors and for retail customers.  Getting them to realize the value of what they intend to purchase requires lots of handholding and demonstration.  Eventually there comes a time when it is important to press them to close the transaction and handover the money!  This can be a tense moment where all the time spent selling was wasted if the person fails to purchase.  However, some people need that extra push to close.  For example, after months of rounding up investors, informing them of the need to put their funds in escrow or that they will be left out may help bring the financing to a close (one way or another). Even then, it may require constant pressure on the process until the financing is complete.

Selling and closing the transactions are two skills that must be developed.  Applying to heavy of a hand on either selling or closing may result in loss of the sale.  Likewise, not enough may result in the same negative result.  Make sure you work on these skills and your company will benefit and grow.

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

Monday, September 10, 2012

Bring something to the party when working with others

We certainly hope to get something good out of this!
You want to develop a business relationship with a potential partner, investor, or strategic interest.  The initial approach of sending background materials, slide show, and confidentiality agreements is completed.  Both parties are reviewing the calendar to identify possible meeting dates.  You identified key company objectives and you discussed the benefits with your team.  After selecting a meeting date, you are ready to take next steps.

Let me digress for a minute.  You host a party where everyone is to bring a dish but certain guests never bring anything.  Maybe you went to dinner with a longtime friend that never picks up a check and you always pay.  Business associates approach you for advice all the time, but when you need help, they fail to deliver.  Your previous boss demanded exceptional work from you, but never recognized your contributions.  I hope that you are seeing a pattern and get the point.  Businesses need a mutually beneficial relationship to make interactions worth the time and effort.

Coming back to the topic, you must review your objectives and determine what you plan to do for your partner or business associate, not just what you want from the relationship.  Part of your discussions must be how you both mutually benefit. 

This topic came up recently in a discussion with a friend.  The company was discussing a potential relationship with another. The other side wanted to be purchased and defined the price.  The friend was considering the acquisition and the price was fine.  The definition of price was a key factor, but the nature of the benefits of the acquisition to both sides was never discussed.  On asking the acquirer what benefits both parties gained, there was a deafening silence.  It took a few calls to define what the company expected and whether the financial advantages were enough to make the acquisition worthwhile.  Secondly, it took added time to determine what was important for the company on the other side of the transaction and determine the interest level of the other party to remain and help grow the combined company.

In a different situation, a prospective partner asked a company for a term sheet for a deal.  The deal was to take place after a study was completed.  The sides had not defined the costs contributed by each side, for the product development.  Likewise, there was no discussion of the timing of the execution of the deal, scope of the deal, or other such parameters.  Failure to engage and fully understand each side of the business would result in creating a deals structure that would not be meaningful to one or both parties.  A extended discussion was warranted to identify all the key parameters leading into development of a meaningful deal.  This included what each side was to contribute and how they might work together in the future!

It is normal to have a desire to interact with others on business.  You will certainly encounter potential business partners that want everything from you and desire to return nothing back to you.  This is part of a negotiation; i.e. “you got it, we want it.”  In the end, negotiations must have reasonable benefits to both parties or, the resulting business relations will break down. 

Next time you plan for a meeting with a prospective business associate, consider discussions designed to identify how to obtain optimal advantages for both sides.  Evaluate the other side to see if they are the type to collaborate in a mutually friendly way, or if they are more like your friend that never picks up a check when you go out to eat.  You may decide to do a deal anyway, but at least you know what each side will contribute or NOT contribute.  With luck, your expectations will become the crude reality of a failed relationship.

Wednesday, September 5, 2012

Let your light shine on others

Let your light shine on others by paying it forward
If you are very lucky, encounters with standout mentors have made significant positive changes in your life.  You would likely be much different had it not been for these few elite individuals that shared extensive time and ideas with no thought of reward other than helping others.  It seems hard to believe with so much gain that we often do not realize the gifts received until far too late to thank them.

You may have received the gift of an entrepreneurial spirit from your parents working to provide and encouraging your progression.  They may have insisted you advance your knowledge by going to school beyond levels you considered sufficient.  Maybe they left you with the drive to believe you can accomplish anything you want if you only try.

During your education time, there may have been those professors that spent countless hours debating concepts eventually published as manuscripts.  These professors were each different in skills and personality, but they shared in their gift of giving time and skill to the development of others.  None ever wished for anything in return.

Working on the job you may have had bosses that believed in your ability to manage and worked with you to sharpen those skills.  They may have taught you how to analyze data or to manage major personnel problems.  They believed in you so much that when they were asked to report to you once you became their boss.  Yet they always shared and gave assistance any time asked.

Then there were those that trusted you in business.  They believed in what you were doing and helped secure investment in your company.  When times were bad, they helped you get over the hump.  When they were good, they were excited by your success and the fact that the investors they found made money.  After the companies were sold, they remain friends willing to share and provide advice and guidance when asked.

These wonderful people “paid it forward.”  They made you more successful than you might have been otherwise.  They did so with no arrogance, ego, or desire to do anything but help.  These are they type of people that you want to seek as your mentors.  They are the ones you want to reward for all of their guidance.  They are the ones you should try to mimic in coaching your team.  You get to win twice when you do.  Once by having a successful company and the second time by seeing the success of those you mentor.

Become the light of someone else’s life by “paying it forward.”  Let your knowledge and skill live on through others.  You can be proud of them and pass along the gifts that were given to you by others. 

By the way, should you ever get the chance before it is too late, let those mentors that help you know you appreciated all they did!

Tuesday, September 4, 2012

Primal egos among professional

Listen to me. I am bigger and better than you!

Everyone has an ego, but some people have a much stronger sense of self-worth than others do.  The number of self-defined experts increases every day.  It seems hard to know those that have skills matching their sense of self-worth from those that may be overwhelmed with their own importance in life.  Knowing the difference of the skills of the experts may help in determining the advice you need to follow, but learning to adapt the advice to your situation is a much more important skill and is where you need to focus your efforts.
Companies have a wide array of personalities.  Perhaps you have been in team meetings where the chest thumping and primal discourse of “mine is better than yours” has taken place.  It becomes difficult for those with lesser egos to tolerate and it becomes a challenge to those with greater egos.  Most likely, you have experienced this situation. 
A higher level of education sometimes brings out an increased sense of importance.  This becomes enhanced when accomplishments mount and the individual has not had a failure under their belt.  A combination of successes and failures has a tendency to even out egos, or maybe it is maturing process that takes place.  Sometimes, the maturation never happens and ones ego remains unduly high. The highly educated, levelheaded, experts that have become more parental in their desire to help are among the best to help bring teams together and provide advice. 
Issues with large egos has nothing to do with you or your startup if you never interact with people that feel they are so superior their advice must be followed.  Maybe you have learned to manage these superior individuals, but your team has not.   Obtaining great advice from inside and outside your organization is necessary.  Advice from some people comes with discourse as others in the company feel they are working with unpleasant people.  Resolution of the problems comes from your ability to filter and translate the information.  You can adjust the advice and directions to match your business.  Your team will better act on the directions you set before them if they have confidence in you.
Not everyone is going to find advice provided from others as positive as you might.   Some may feel the advice is wrong.  Others may be intimidated and feel their jobs are threatened.  Others hate having the arrogant person you interact with around the company.  Again, this is why your choice of personalities around you makes you the best person to filter and relay any information. 
These comments come from years of interactions with people.  A few of them could disrupt all business activities simply by the mention of their names!  You must learn to translate negative energy to positive energy and buffer your team.  The team must feel comfortable contributing as equal partners.  Your job as a leader of your business is bringing out the best of all those in your company and taking the company to the great levels you strive to attain.  TAME THOSE EGOS AND KEEP YOUR COMPANY MOVING IN A POSITIVE DIRECTION!