Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

How Focused Are You?

“Most people have no idea of the giant capacity we can immediately command when we focus all of our resources on mastering a single area of our lives.” Anthony Robbins

The pace of our lives is increasing on an almost daily basis. Sometimes I just don’t know where the day goes between phone calls, emails, blogging and dealing with customers. What happens though is that we tend to begin autopiloting a lot of daily tasks and instead of working towards our goals we get stuck in just maintaining the state we are in. I have seen people maintain this state for years, months or weeks on end without realizing that they are just not making any significant progress in their lives. Yet when you talk to them and ask about their schedule and business it is usually packed. I have gone through several periods like this myself and I think one of the most significant changes that I made to my daily schedule was adopting the GTD methodology. For those of you not familiar with the Getting Things Done (GTD) methodology please click on the link below to a series explaining it.

The GTD methodology has helped me tremedously in keeping my eye on bigger goals while making sure that all the mini steps that need to be completed are clearly marked out as well. Early last year I started reading Leo Babauta’s  Zen Habits blog seriously. He also follows the GTD methodology and has modified the original methodology in some places. One of the modifications that really helped me was his concept of setting the three most important things that one needs to accomplish in a day. Instead of having your usual to-do list which can often be a little overwhelming, he trimmed it down to 3 things that would have the greatest impact on your day, week, month and year. This has helped me prioritize my action items and has helped me in getting a lot more of the critical things accomplished, sooner rather than later. 

Focus is a key success factor that is found in all great individuals. Whether they be entrepreneurs, doctors, teachers or even bloggers. The ability to concentrate our energies on activities that yield the highest output will result in accomplishing our goals faster and with greater efficiency. This being the start of the new year I would highly recommend integrating the ‘3 most important things list’ to your daily schedule and see whether it makes an impact on your life. I wish you all the best of success in 2009. 

Related Posts:

5 Steps to Get Things Done

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Inspiring Entrepreneurial Story

“I’ve always learned on-the-job, in real time. A problem comes up; I research it, and try to solve it. You can’t study to be an entrepreneur; you have to develop those skills day in day out. “ Tom Szaky

I have memories of going to a video rental store over the weekend when I was around 6-8 years old. The video store was called Star Video and when they gave us the videos they were packed in a paper bag which had the logo of a restaurant called Barbeque Tonite on it. The restaurant was the final aim of the owners of this small video rental franchise that had a couple of locations. The owner’s son used to school with me  and was a friend. Eventually they opened a small restaurant that served traditional barbeque food and very wisely paid an exceptional amount of attention to detail and quality. The place could probably hold a maximum of around 50 odd people in those early days. Fast forward to today, the restaurant has witnessed an absolutely explosive level of growth. Today it probably has a capacity of at least 500+ customers spread over 4 floors. They have a limited menu but the quality has remained evenly and  exceptionally good, this has kept most of us coming back for more week after week.

Seeing the level of success of this restaurant, many have attempted to replicate it, as close to them as possible, to cash in on the spillover since there are always  huge crowds waiting to get into the place. However, none of them have succeeded in coming close. Having dinner there tonight, I was once again amazed at the level of success that they enjoy and whenever I visit their restaurant it renews my faith as an entrepreneur. The owners knew from the very beginning what they wanted. The vision to be the leading provider of local barbeque food was something that each of them were passionate about and they figured out a way to raise money for the venture. Once they had managed to do that, there was no looking back.

There are two important lessons from this story. The first is, before you start whatever you want to,  ask yourself  “Is this something that I am truly passionate about?” If the chosen line of business is something you are passionate about, the next step is the need to articulate a vision for the business you want to run. I have made the mistake of not thinking through the second aspect with enough detail on several occasions and have paid a price for it. Without a clear vision one usually spends a lot of time going round in circles not quite knowing which direction to take. This problem is overcome when you think things  through and know and visualize exactly what you want. During the course of working it out practically things will change somewhat but the fact that there is a guiding principle from the very beginning is essential for starting on the right foot.

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5 Steps to Navigate through Difficult Times

There is little difference in people, but that little difference makes a big difference. The little difference is attitude. The big difference is whether it is positive or negative. W. Clement Stone

The global economy these days is not in the best of shapes. There are endless stories circulating about how the world as we know it is about to come to an end. I was at a workshop last week and someone was talking about the alarming rate at which Chinese factories were closing down. An older gentlemen who had recently set up his first business turned to me and said “Doesn’t all of this affect you as an entrepreneur?”. I explained to him how the businesses I was involved would not be directly affected and in the end it was up to me to allow such news to affect me or not. Later on I decided to write a series about the question to articulate my thoughts on the matter. Listed below are five steps that every business owner should take to re-evaluate their business during these difficult times.

1. Reality Check: A reality check comprises of taking into account the performance of each one of your businesses major components. These include, sales & marketing, operations, human resources and finances. Each division needs be re-evaluated and adjustments need to be made to cater for the changed external environment. Adjustments can include adjusting your pricing models, laying off staff who are not performing, cutting back on unnecessary perks for executives etc. The primary objective of this exercise is to break each division down and build it back up to cater to the changes. To read the adjustments that need to be made to each division in detail please click here.

2. Communication Channels: Without clear channels of communication a business is in a constant state of flux. During turbulent times communication between management, employees and investors needs to be done at regular intervals. This is vital to diffuse the anxiety, frustration and stress that everyone may be feeling due to the current state of affairs. Mechanisms need to be developed to allow management to talk regularly to their star performers, group sessions need to carried out to get everyone on the same page and most importantly, senior management needs to continuously update the team. To learn more on improving your communication channels please click here.

3. Getting an Outsider’s Perspective: When things are difficult and we are busy putting off all the small fires in the business we tend to forget the bigger picture. An outsider in the form of a mentor or a business coach can assist in making sense of things when everything is in a mess. By leveraging on their experience and rolodex, a business has the capability to dodge pitfalls and possibly make some large sales. Also, having someone from the outside affirm the direction that has been selected and the tactics  being used can greatly enhance the confidence level of a team. To learn more about the benefits of an outsider’s opinion please click here.

4. Focus: As a small business we have to realize from the very beginning that we cannot provide every service under the sun. We need to find a niche where we can develop a competitive advantage that will differentiate us from the rest. During difficult times it is paramount that we focus our resources on our core product/services to achieve optimal results. During these times we cannot afford to experiment and lose sight of our regular clients. All efforts need to be geared to ensure that we provide as much value as possible to our existing clientele. To read more about the importance of focus please click here.

5. Positive Outlook: Our attitude towards the changes taking place externally or internally will decide how we navigate our way through these difficult times. We have a choice of either allowing the negativity to get to us and plague the workplace, or to put a positive spin on things. It is critical that the leader’s attitude be one of positivity and optimism. His/Her attitude is very important to the business as a whole and is used as a gauge by everyone else. To read more about the importance of having a positive outlook please click here.

The primary objective of the steps outlined above is to get everyone to think about their business and how the changes in the external or internal environment are going to affect them. I have relied heavily on these steps to help me navigate through difficult times. On the surface they appear to be relatively straightforward, however, I find that when we are down, our thought processes do not function optimally. Negativity seems to penetrate our thoughts and obvious answers elude us. I hope these steps will help you get started on your journey through the tough times ahead. I look forward to your comments and feedback.

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Positive Outlook

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. Winston Churchill

When I selected this step I thought to myself, it is such a ‘cliche’ to tell people to remain positive during tough times. It is something which is repeated day in and day out and is, common sense. When things look bad hope for the best and things should get better. Sure, now tell that to someone who lost a fortune in the recent stock market crash or someone who was forced to shut his/her business down. When someone is hit with such a harsh blow and someone comes up to them and tells them everything is going to be alright, one can understand the frustration that he/she may feel with such a comment. Due to this reason I think it is necessary to provide enough space and time to digest what has happened. It is only through reflection that we can understand what went wrong and what we should avoid in the future. At this moment though, we have a choice to make. We could either remain depressed and frustrated or pick ourselves up and get back into the ring.

Along this journey, as entrepreneurs we are bound to fall many times. Some falls will hurt a lot more than others. However we need to learn to pick ourselves up and keep going. When you start your own business there is no longer just yourself to worry about. There will be partners, employees and possibly investors. Our attitude, whether we are the leader or someone who works at the business is very important. As a leader everyone looks up to you to determine how things are going. If we have a negative outlook our attitude would be a direct reflection of our mental state. This will in turn spread negativity through the organization and essentially bring it to a standstill. Therefore, it is essential that correct vibes are dessimated from the top down. It is also equally important to talk to your partners and employees during this difficult period and see if there is any way you could help them out if needed.

As mentioned in the first post of this series, our attitude towards the challenge will decide how we deal with it. Without a positive outlook our problems appear bigger than they are, things move a lot slower and people generally are a lot of less productive. Therefore it is critical that we ensure that our organization deals with the challenge in a healthy manner by talking things through, evaluating their current standing and then selecting the path to reach end goals.

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Communicating Effectively

“The difference between a smart man and a wise man is that a smart man knows what to say, a wise man knows whether or not to say it.” Frank M. Garafola

Will the business survive this downturn? Will I be able to hang on to my job?  Common questions on the mind of all business owners and employees alike in these difficult times. It is only natural to have an heightened level of anxiety during stressful periods. However, if we were to hold all of that stress within ourselves and not have an outlet to release it, things could become ugly very fast. People begin to talk, rumors about layoffs begin to circulate, productivity levels fall, anxiety increases and just about any call from senior management begins to imply that you are about to be fired. All of this can be dealt with reasonably through effective communication. Senior management needs to provide all stakeholders with a clear and candid message about the health of the business and where it is headed. If a culture of candor has not been created in the organization this can lead to uncomfortable and awkward situations. Such an environment needs to be created.

Listed below are some ways to communicate effectively during such periods:

1. One on one sessions: Ensure that you have individual sessions with key players on the team, assess their current needs and answer any concerns they may have. I have found this to be a most effective strategy as it gives the person concerned a platform and ability to speak his mind, at the same time enjoy privacy about his concerns.

2. Group information sessions: Individuals who are responsible for broader functions like operations, marketing, finance and human resources should give talks on how the current situation is likely to impact the business and strategies that can be used to get through this period. Once again this provides the ability for individuals to get an idea of the company from different angles and provides valuable feedback.

3. Layoffs: Firing people is never easy and is something I really do not like doing at all (I don’t think anyone really enjoys it). However, when it needs to be done it should be done swiftly and as soon as possible. Delaying the inevitable is not a smart strategy and only compounds the problem.

4. Updates from senior management: I usually send companies I am involved with updates after every quarter. When times get tough I increase the updates to a monthly or even bi-weekly schedule depending on the situation. This keeps everyone focused on what is important and on the same page.

Depending on the structure of your business I recommend doing whatever is necessary to ensure that everyone is able to bring their concerns forward. Whether it is through group meetings, online forums or one on one sessions. Mechanisms need to be in place so that communication is made feasible as easily as possible. Failure to do so will further deteriorate the business and one could end up losing a lot of key players.

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Focus

One reason so few of us achieve what we truly want is that we never direct our focus; we never concentrate our power. Most people dabble their way through life, never deciding to master anything in particular. Anthony Robbins

During boom periods we tend to spread ourselves thinly over too many projects. This places a great strain on the business and dilutes the focus away from core business units. When times get tough I like to sit down with the team and map out priorities. What has been working? What has not been working? What do we want to achieve? When do we want to achieve it by? and, How will we achieve it? These are some questions I use to start up discussions and get everyone involved in the future direction of the business. As a small business we have to realize from the very get go that we cannot be everything to everyone. We have to pick our spots wisely and make sure we can cater to that one segment really well.

In the past I have made the mistake of drifting away from core business units one to many a time. It may be due to the fact that settling into a routine is something I do not like particularly. I need something different or exciting to be happening. Well after a couple of years as an entrepreneur I can attest to the fact if you keep changing the color of your business whenever you get ‘bored’ very little progress is going to be made. When you look at small businesses which succeed there is always a laser like focus on doing something much better than anyone else doing it. Also there is constant improvement on the product/service. One service which comes to mind is 37signals. They have a bunch of productivity apps which I highly recommend such as Highrise and Basecamp. 37signals has developed for itself a highly profitable niche. It keeps its products as simple as possible and has managed to amass a legion of fans.

Whether a business is experiencing a huge upturn or is stuck in a downward spiral, it is essential they maintain focus on what they set out to do. Select your niche carefully, build a product or deliver a service that brings value to your customers and do not lose sight of your end goals. The future of your business could depend on it.

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5 Steps to Better Negotiations

“Any business arrangement that is not profitable to the other person will in the end prove unprofitable for you. The bargain that yields mutual satisfaction is the only one that is apt to be repeated.” B. C. Forbes

Most of us take part in some form of negotiation everyday. In life, skilled negotiators are able to close better deals, and reach mutually acceptable agreements faster. Ever since I undertook this entrepreneurial journey, negotiations seem to have become common place. I have come a long way from my early negotiations, at that time, very often I did not get the best deal possible . Experience however is a great teacher, and although I have made many mistakes in the past, I have also learnt much, which has honed my negotiation skills . Listed below are some key steps to be undertaken during negotiations, to ensure that a mutually acceptable agreement is reached quickly, fairly and efficiently.

1. Motivations & Interests: At the heart of every negotiation, each side has a set of motivations and interests which enable them to take  certain positions on issues. Before beginning the negotiations, identify  your personal motivations and interests for resolving the issue at hand. Internal clarity helps greatly to communicate your message. Next, we need to understand the other side’s position, as also why they have taken it. What are their motivations and interests on the particular issue? The initial round or rounds of negotiation need to include candid discussion to ensure as clear a picture as possible. To read specific examples please click here.

2. Focus on the Problem: The entire objective of negotiating is to find a mutually acceptable consensus. To ensure that this objective is achieved, we need to keep the process as simple as possible. This requires us to understand each other’s perceptions to ensure that we are on the same page. It also requires us to keep emotional baggage off the table. Lastly, we need to ensure that during the negotiation process both parties communicate clearly, and listen attentively. At the same time, we need to be aware of non verbal communications as well. Being focused on the issue and not deviating ,greatly improves the speed at which to reach an agreement. To read more specific examples please click here.

3. Develop Options: The objective of the option development phase is to arrive at a set of mutually viable and beneficial options. To reach this objective much collaborative work is required. We need to have several candid sessions whose sole purpose is to chart out maximum number of options. Each side has to ensure that its position’s and interests are clearly communicated, with the entire focus on how to maximize expectations by working together on a macro level. To read more specific examples of developing options please click here.

4. Alternatives: These are options which form our backup options if negotiations break down and agreement cannot be reached. Before the negotiation process, one should clearly list down all the available alternatives related to the issue at hand. Then list down possible alternatives that the other side may have. This gives a better understanding of how much room there is to negotiate. Alternatives are vital negotiation tools and need to be used tactfully to ensure that a fair agreement is reached. To read more specific examples of alternatives please click here.

5. Objective Criterion: These are benchmarks which provide a fair assessment to rate particular options against. Negotiations which use objective criterion’s usually result in fairer agreements. Therefore it is important that before one begins negotiations, criterions are researched and decided upon. Whether it is for purchasing a business or negotiating a salary increase, one needs to identify quantifiable metrics which can help make the decision making process easier and fairer.To read more specific examples please click here.

Negotiations are usually not very straight forward. Much of the time, emotions get in the way which complicates matters dramatically and frankly confuses both sides on procedural matters. To say that we need to keep all emotion out of the picture is not possible. What we need to do is to exercise a great deal of self control, and constantly put ourselves in the shoes of the other side. Only once we begin to see negotiations as a two-sided process will we be able to progress to becoming a more skilled negotiator. I wish you the best of luck in all your future negotiations.

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Objective Criterions

“Here’s the rule for bargains: ”Do other men, for they would do you.” That’s the true business precept.” Charles Dickens

Most of us have at some time, played the high-lowball game during negotiations. For example, a while ago I was attempting to buy a domain I wanted. The seller had a listed price of $500, I put in a lowball offer of a $100 dollars straight off the bat. The $100 I offered, had no actual basis and was nearer to the $200 or so I wanted to actually pay for the domain. The seller and I had a number of correspondences back and forth, and a deal was struck around $230. Did I get a good price? Was my reservation price, one that had a logic basis? Unfortunately I could not answer any of these questions.

It therefore got me thinking, that having objective criterions are necessary to ensure that both sides get an optimal deal. In the case of the above example, companies such as Sedo are able to calculate the true worth of a domain through several established criterions that include, estimate of the domain name’s value, list of recent comparable sales, search engine friendliness, branding potential, legal situation and even, possible buyers. This estimation establishes the true worth of a domain. If the had seller relied and gone with such a report from a trusted authority, stating the domain estimate at $500, I would have had very little room to negotiate a price which was substantially lower. We can therefore see, that by adding objective criterion’s to negotiations, we can optimize the value created on the whole.

It is therefore recommended, that whenever you enter into a negotiation, be it changing terms of payments with your supplier, a salary increase for your staff or the sale of your business to a private equity firm, do research regarding the metrics that can be used fairly, to add objectivity to the negotiations. It is important that the criterions proposed are acceptable to both sides. A key characteristic of skilled negotiators is, they are always prepared. They know their underlying interests, the options available,  available alternatives, and a list of objective criterions to reach an optimal agreement for both sides.

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What are your Alternatives?

“The hardest thing to learn in life is which bridge to cross and which to burn.” ~David Russell

How does one assess whether one is really getting a good deal or not? To answer this question one needs to have a deeper understanding of the alternatives available. Lets say for example, we are negotiating a salary increase with our employer. We want an increase from $50k to $60k. We bring up the topic with our employer, who immediately refuses the suggestion blaming the current economic climate. We could be an extremely valuable resource for the company, but without any available alternative we have very little leverage in this negotiation. However if we do some research about market rates for our profession and may even float our resume around to get an idea what our market worth is we could arrive at a figure which gives us a better understanding of our market worth. With this figure we now have a foot to stand on during negotiation.

Alternatives however are rarely as straight forward in complicated deals where one is negotiating the sale of a business or better terms of payment from suppliers. They do however give us an important edge to see how far we can actually push during negotiations. Lets say for example I am selling my car and my reserve price is $20k I meet a seller whose maximum limit is $30k. In this case any price above my $20k reservation price will be a positive outcome for myself and likewise any price below $30k will be a positive outcome for the seller. This brings out the objective of negotiations which is to achieve a better deal than not negotiating at all. Revealing your alternatives during negotiation is usually not a good strategy unless it strengthens your position at the negotiation table. It is important to remember that alternatives should not be used to apply pressure or force the other side into a particular decision. They are markers to help us make an optimal choice.

Before the negotiation process, one should clearly list down all the available choices related to the issue at hand. I then list down possible alternatives that the other side may have. This gives a better understanding of how much room there is to negotiate. It is important to not use ones alternatives to apply pressure tactics to induce the other side to give in. Such tactics may work in the short term, however repeated use of such strategies will hurt your future chances of getting a better deal. One needs to be fair and ensure that each side is benefiting from the agreement to ensure better long term results.

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Options Development

Everything is something you decide to do, and there is nothing you have to do.” Denis Waitley

Often in negotiations, each side promotes their optimal outcome without taking into account mutually beneficial options. We often only concentrate on how we can get the most out of a particular predicament, rather than creatively coming up with alternatives for mutual gain. Other common problems leading to stalemates, is when each side looks for a single answer to resolve the issue, or views the pie as fixed, and looks for ways to increase their own share. These road blocks lead to slow negotiations, and can be frustrating for both sides. Below are a couple of ways I follow for option development:

1. Separate Brainstorming & Decision Making: The option development phase is an important one, and needs to be handled independently. If we mix the option development phase, with the decision making one, it could potentially lead to premature judgments. This phase needs to focus on the creativity of both sides, to develop options which cater to the bigger picture. At this stage there is no option which is too crazy, and both sides must feel comfortable in expressing their point of views and opinions. The end result of these sessions should be a developed list of potential options which cater to both sides and are mutually beneficial.

2. Cater to Interests: As mentioned in earlier posts it is important to focus on interests rather than positions during the negotiation process. This has great significance in the option development phase. For example, if we negotiate a larger equity stake in the business with one of the founders, it is important to let the partners know why you want 10% instead of the 6% offered. Is it because the 10% signifies the actual opportunity cost that you are foregoing to join the business? Explore the reason of the founders interests  and why they had offered 6%. Without this, the discussion is polarized to very hard positions, its either 10%, or I will not be joining. Such an attitude is not conducive to developing viable options.

3. Focus on Increasing the Pie: On a micro level when you look at an issue there are a couple of possible options available. For instance, if you are negotiating terms of payment with a vendor there are a limited number of options available to reach an agreement. However, if we take a 3 dimensional view of the issue at hand and take into account macro level factors to improve the situation, a number of options will become available. In the same negotiation with the vendor, if we zoom out and brainstorm new ways to increase the volume of business with the vendor through shared activities, maybe the vendor would be more inclined to negotiate more favorable terms. Broadening the scope of the issue is an essential trait of the skilled negotiator.

The objective of the option development phase is to arrive at a set of mutually viable and beneficial options. To reach this objective much collaborative work is required. Many individuals shy away from talking through options and stating their interests, only because they fear they may be giving too much away and may appear vulnerable. Such a stance will most likely lead to a limited set of options, most of which do not cater to the interests of the involved sides.  We must therefore introduce candor into our negotiation process to yield optimal results.

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