Journey of a Serial Entrepreneur

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

5 Components to build Trust

“Self-trust is the first secret of success.” Ralph Waldo Emerson

This series started with a post regarding how the trust I had in PayPal was shaken when my account got compromised. In life, our trust in people and businesses will often be tested. That is life, and we have to accept it. The fact of the matter is, without trust, we would not get far in life. The trust building process comprises of several components. Each of them plays a vital role in the process, and provides us with  benchmarks to help achieve the level of trust required. 

1. Integrity: Integrity is based purely on the actions and decisions we make in life. They reflect who we are and what we stand for. Three measures to use to benchmark our own level of integrity are ; firstly, are we congruent in our thoughts, words and actions? The second one is, do we honor our promises and commitments to ourselves and others? The last one, do we possess the courage to stand up for our values and beliefs in the face of resistance? These questions can serve as a guide to learn more about personal and business integrity levels. To read more about trust and integrity please click here.

2. Competence: Competence is a pre-requisite for the process of trust building. An individual or business is deemed competent in a particular skill set when they have proved themselves adequately. However, for a new startup, without a track record, this is a challenging task. Competence needs to be communicated through actions in a younger team. Using academic credentials, talents and skill sets or references can be used to help prove a younger team’s ability and capability. To read more about trust and competence please click here.

3. Consistent Communication: We have all come across businesses where senior management says one thing, middle management says another and the customer service representative says something completely different. When there is inconsistency in communication, building trust will be an arduous task. As younger startup companies, we have to instill the importance of consistent communication, from the beginning of our operations. This includes the alignment of senior management’s agenda, marketing strategies as well as how customer service representatives are supposed to interact with clients. To read more about the importance of consistent communication and trust please click here.

4. Genuine Concern: An individual or business can have high levels of integrity, be competent and communicate with consistency, yet, a lack of genuine concern for others or your customers, will dramatically slow down the trust building process. I believe a genuine concern for your customer with honest intention is the ‘x-factor’ in the trust building process. It is important that we get a deep understanding of our clients needs and wants and craft our strategies around them. It is only when we are able to communicate the importance of this component to the rest of the team in the form of actions will we actually notice results. To read more about trust and genuine concern please click here.

5. Results: Results and past performance speak louder than any number of words. The world today benchmarks each and everyone of us to what we have achieved. Therefore, as young entrepreneurs, we must pay a great deal of attention to proving ourselves and showing tangible results. These can be in the form of academic achievements, extra curricular achievements or projects where we have documented results. It is important to become result and action oriented. When an individual has a reputation of getting the job done well, the ability to gain the trust and confidence of peers, investors and customers is enhanced. To read more about trust and results please click here.

Building and maintaining trust is a challenging task. It requires constant attention, and the slightest of slips in our behavior has severe negative impact on the level of trust. As we all know, once a vase is broken it can be put back together, but it will never be the same. The components talked about in this post are foundational elements in the trust building process. When we have the trust of a customer or friend it dramatically changes the dynamics of the relationship, to one where a lot more can be achieved. As entrepreneurs, we must strive to develop a reputation of one who can be trusted. This will have a phenomenal positive impact on the level of business as well as your life. 

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Results

“You can’t build a reputation on what you are going to do.” Henry Ford

As a young entrepreneur, some questions you hear repeatedly from prospective customers are, “Who is currently using your product/service?” or “How many users do you currently have on your system?”  These questions are asked with the aim to establish whether the prospect can trust your business to deliver what you are pitching, and whether the team has the appropriate capabilities and skill sets. Not many individuals want to be the first customer to test a brand new product/service, it is hence up to the entrepreneur to convince the customer why they should use their product/service. The question that arises is “How does an entrepreneur convince a customer to trust him to deliver on his word?”. I believe the fastest way to do this, is to reference past performance and results, and use them as benchmarks to make a convincing argument. 

Results and past performance speak louder than any number of words. The world today benchmarks each and everyone of us to what we have achieved. For example, take an individual with high levels of integrity, extremely competent, communicates consistently and has a genuine concern for what he/she is doing. However, if this individual does not have a track record of delivering when given a task, chances are that they are not going to be given a chance to step up to the plate. Therefore, as entrepreneurs, we have to constantly look for ways to prove to customers, stakeholders, investors, employees and the media that we have what it takes to succeed. We cannot wait around for things to happen or wait for the ‘right’ opportunity. Action needs to be taken, and positive results need to follow. Will we always get the results we want? Unfortunately not. However, if we persevere and pursue what we want to achieve relentlessly results will follow.

Some areas where younger entrepreneurs can display results they have achieved are:

1. Academics: This works well when you are raising early stage angel or venture funding. If one has achieved success in the form of honor rolls, awards or other recognition for academic pursuits, they should be included in some way in your pitch. From a customer’s point of view, having someone with deep theoretical knowledge about your product/service adds great value.

2. Extra Curricular: Including any information about areas such as sports, debate societies, student unions or charitable efforts one has been part of, also adds value.  A personal example is,  when I co-founded an entrepreneurship society at university, which has since grown from 10 members in Singapore, to over 2500 spread across all of Asia today. It was through this platform that I gained a valuable network, and built trust with many of my mentors today. Other examples could be contributions to charitable organizations and events, and funds you may have raised for them.

3. Projects & Initiatives: Results can only be achieved when you take initiatives and actions. Highlight areas where you took an initiative, such as, starting a blog, a website, a store on ebay, freelance projects or any other example where you have documented results. Such projects go to show that you are willing to go the extra mile to reach you goals. 

Once the business has established customers, continue to track results through all business processes. Take responsibility for all the results you get, be they positive or negative. I have found that the learning process is specially instructive when we do not get the results we want. I have repeated this many a time, there is no failure, only feedback. Once you have established a solid track record, and have been identified as a result oriented team member, the level of trust your peers will have in you, will sky rocket. 

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5 stories relating life to business

“You never have an idea of what you might accomplish. All that you do is you pursue a question. And see where it leads.” Jonas Salk

Life is a fascinating journey and every morning I get up and look forward to the new challenges that I will have to face and learn from through the course of the day. You need to keep that perspective to live life fully. Over the course of this week I have talked about 5 recent personal incidents. They were instrumental in giving a different perspective to my usual business approach.

1. Sales & Relationships: An encounter with a street merchant helped me understand the importance of building a deep relationship with key clients . It enhances and improves the selling process when the person you are selling to, trusts you. To read the entire story please click here.

2. Squash & Strategy: This story is another affirmation of why the tortoise won the race. When embarking on a new journey take time out to study what you are getting yourself into. You should have a clear idea about goals and time frames and should build your strategy around this foundation to maximize your true potential. To read the entire story please click here.

3. The Gym: This story talks about the value of partners in our life and the instrumental role they play in helping us reach our true potential. By selecting your partners carefully you increase your chances of achieving your goals. To read the entire story please click here.

4. Different Perspectives: This story is about two individuals in the same setting and their completely different perspectives on how to go about life. It talks about flexibility and viewing life from multiple perspectives to get a better understanding. To read the story please click here.

5. Crossing the Rubicon: This story talks about crossing the point of no return.This applies to setting up a business, deciding on a career path or even selecting a life partner. We have to ensure that we make these decisions after careful thought and for the right reasons. To read the story please click here.

This week I have thoroughly enjoyed writing this segment on life and business. I may just make this a regular feature to keep things an open perspective on matters. I hope all of you enjoyed this series too, I look forward to your comments and feedback.

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Crossing the Rubicon

The Rubicon, is a river in northern Italy which Julius Caeser crossed in 49BC from which point it was not possible to go back. Crossing the Rubicon hence refers to passing through that point from where return is no longer possible. This may be due to a host of factors, such as, it being physically impossible to turn back, too expensive to go back or that the path is too dangerous. Working with startup companies I find it a most exciting part of the journey when that point of no return is crossed . However, please make sure that before crossing your Rubicon you are doing so for the right reasons.

When I setup this blog on the 1st of January 08 I crossed a point of no return. I let all my readers know that I was going to spend the next year updating this blog on a daily basis with advice and insights on entrepreneurship and life. I did so because I felt that I had a little experience which could help others who are in the process of setting up a company or working at a startup for the first time. From that day onward I had a responsibility to everyone who was reading this blog to make sure that at the end of every week I gave some advice which could be potentially helpful. It doesn’t make a difference if I have one reader or a million, my responsibility remains the same. Eleven weeks later writing my blog has become one of the most fulfilling part of my week.

If you are on the verge of starting your own business, deciding on a certain career path or even getting married, the one thing which you keep in mind before making these big decisions is “do it for the right reasons”. You shouldn’t let anyone force you into such decisions Look at them from all perspectives, align them with your value and belief systems and when you make up your mind ,cross your Rubicon without a whisper of a doubt.

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Different Perspectives

“Humans have the ability to shift perspective. We can experience the world through our senses. Or we can remove ourselves from our senses and experience the world even less directly. We can think about our life, rather than thinking in our life.” John J. Emerick

I meet a fair number of people daily, for business or on a personal basis . I find it most interesting that all of us have uniquely different ways of looking at the same thing. Over the last week I have had some interesting experiences showcasing how two people in the same boat can be looking at the picture in totally different ways.

I was coaching a team whose performance had been lagging in the last couple of quarters. During our one-on-one feedback sessions, one of the team members was constantly blaming external circumstances being the primary reason for his not operating at an optimum level. He blamed the organization for not providing an environment in which creativity and performance was fostered. He had hence decided, that he would stop giving his 100% and was just ‘making do’ in his current role. Another team member however, realized that even though the environment was not the best, he would not let it affect him negatively, instead he took on the responsibility to be the change he wanted to see in this environment. He started with his own team and department. Jim Collins refers to these as “pockets of greatness” (Audio).

There is no doubt this is an uphill task when one person is up against 9 others who share a different perspective. However he took up the challenge and after our coaching was completed he became a role model for the team and productivity and morale soared. Management began to take notice and some structural changes were made.

The lesson I learned was, each one of us has a unique perspective on life according to our inbuilt value and belief systems . Sometimes these systems are so strong that they cloud our judgement and refuse to let us look any other way. Being part of a startup or a multi national it is your responsibility to remain open and flexible about the view points of others. Don’t judge them, nor deliberately criticize them or blindly embrace them. Take time out to look at it from their perspective, what you see, may just pleasantly surprise you.

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The Gym

I recently started going back to a gym after a long break. Why is it that some of us get these spurts of energy to go to the gym which wears off soon enough after that initial boost of energy and enthusiasm? This is not an unusual trend for the gym, you set yourself enthusiastic new year resolutions to get into shape and 3 months down the road you quit for some reason or other. I did some research on this and found the following statistics:

  • “50 percent of all new health club members quit within the first six months of signing up, according to the International Health, Racquet & Sportsclub Association.” Source: Wayback Machine Archived Webpage
  • 1 in 5 club members use their club at least twice per week. 40% of those who join health clubs stop going soon afterwards. Source: Health and Fitness Website
  • In the article Time Management Facts and Figures by Dr. Donald E. Wetmore, it says that 90% of those who join health and fitness clubs will stop going within the first 90 days.
  • The first quarter of the calendar remains the key period in the year for new member acquisition for the club industry. Link

There is a lot of evidence supporting those claims. I then looked back at all the times I have joined a gym or a health club and actively used their services regularly for at least an year. The one common denominator for when I had gone regularly, was with a gym partner. It is strange but true how the dynamics change when you have someone to spot you, talk to and even benchmark yourself to.

This got me thinking of the posts I have written about teams and partnering, and how essential that aspect is, not only from a business point of view but overall in life. This applies to whether you are choosing a life partner, a gym buddy or a mentor to help you along the way. Through partnering we can achieve extraordinary goals and greatly impact productivity and morale. All you have to do is choose your partners carefully.

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Squash and strategy

“All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” Sun Tzu

I started playing squash around a year ago with a lot of enthusiasm. Like all sports, on the surface it looked like a simple game. Four walls, two players one ball; first person to miss the ball loses the point and the game is played up to 11. I was like, how hard can this game actually be. So I started off with a coach who taught me the basic rules, how to hold the racket and basic squash etiquette. That took around 3-4 lessons and by the end of the 4th session I was like “Bring it on”. However, he told me at this point that there was a lot more to learn regarding the game and it would take at least another 3-4 months till I got some basic strategy pat down such as serving, placement, running and steps.

That didn’t sit well with me so I told him that I would learn along the way and we should just start playing games and he could monitor my progress. He told me this wasn’t advisable but in the end agreed and we started playing. I noticed another guy who had started at the same time as me and who was getting regular coaching . I made a mental note that I would play him in a couple of months to test how well our two different routes had turned out. Fast forward to 3 months later, my coach told me that I had made good progress and was getting better. So I asked him to set up a match with the other regular. It was setup shortly thereafter and we decided to play a best of three. I sort of crushed him in the first game 11-5 and remember thinking this was going to be a cinch. Sadly I ran out of gas in the middle of the second game and lost the remaining two matches.

With my ego fairly bruised I spoke to my coach and he pin pointed the areas where I was handicapped. My opponent had learnt his steps correctly which directly impacted stamina as you use less energy to move around the court correctly, he had also learnt how to use less power in his shots to get the same impact I was getting, using the greater force I was generating. It was apparent I had a lot of catching up to do and a year into training I am still unlearning all the bad habits that I picked up earlier on.

This holds a very clear analogy to startup businesses. We start off thinking we have got the next best idea after google and begin to pursue it without getting the groundwork settled. We start with a vague or no business plan and without a clear short term or long term strategy. We face competition in our sphere very soon and others appear to be moving faster, more effectively and efficiently as compared to us and we wonder why. Its all about strategizing and getting those foundation blocks right. Don’t just push yourself to get into the game as fast as you can, take a step back and get a better idea of where you want to go and how. Plan diligently and follow it with perseverance. There is no short cut to success.

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5 steps to follow when doing business with family or friends

It is an immutable law in business that words are words, explanations are explanations, promises are promises but only performance is reality. Harold S. Geneen

Getting into business is like all other major decisions you have to make in life. Like all complicated decisions there are factors which tend to have a more pronounced impact on the decision. Going into business with friends and family is one of those factors. In my experience these tend to be a lot trickier than standard business agreements because they come with their own baggage. Over the years I have been adviced and have learned how to deal effectively with the issues that arise when you go into such a business venture. I hope this will be of some help to you if you are planning on getting into business as well. If there are any other factors which you think should be included in this list please let me know.

  • Business Plan Development: Never fall into the trap of getting started with ‘just’ a business idea. Sure you have a greater level of trust with your business partner but that does not mean you would exclude putting down on paper what it is that you plan on achieving through this business. The process of putting down on paper what your idea is, clarifies it, identifies key areas which you need to work on and possible pitfalls you may face. This is a step which needs to be taken before you start any venture. To read more about business plan development please click here.
  • Commitment Levels: With a business plan in place you will now be able to judge with greater certainty how much money, time and effort is going to be required by the business. You need to put down clear parameters at this stage as to what each partner is supposed to do. This level of commitment needs to be clarified from the start or you will have an unbalanced partnership which leads to a multitude of problems further down the line. To read more about how to set commitment levels please click here.
  • Candor: Establish a culture where candour needs to be an integral part of the venture. The worst thing you can do for yourself and your business would be to keep all the things you want to say to yourself. This will lead to frustration, under performance and morale issues which can jeopardize the success of the business. A culture where you can be open, state your opinions and be comfortable will help you form a considerable competitive advantage and will enable your company to make difficult decisions with a lot more ease. To read more about candor please click here.
  • Noise Levels: When you set to do business with friends/family you need to keep external noise levels under strict controls. Noise levels refers to the interference in the business by members of your family or friends. When we divulge too much information outside the core group it ultimately comes back to the core group in a completely changed form. This could lead to several problems between partners, frustrate the team and affect the overall morale. To learn more about how to keep noise levels at your company please click here.
  • Equity Splits: This is an issue which is at the core of most problems which are faced by all companies but more so in businesses where friends and family are involved. We tend to be a lot more generous just because a business partner is a cousin, friend or relative. You need to correctly assess what the partners contribution will be and then use a simple model to figure out how much the partners stake is actually worth. To read more about the formula to calculate a fair equity split please click here.

Doing business is tough, especially when it involves family and friends. These couple of steps should provide a basis for a solid framework which would help you work through problems in a structured and fair manner. These steps should be taken as a frame of reference and can be adjusted for your actual scenario. If you require any advice or feedback please let me know and I will do my best to see if I could be of any assistance.

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Equity Splits

“Lets all split it equally”. There are many people who agree with this and quite a few who don’t. I am with the latter group. I have been part and am still part of ventures where equity has been split equally from the word go. If there is one reason why this is done so widely it is, ‘lets not ruffle any feathers’. The other train of thought is that since the company is only an idea right , lets see how it develops. I used to think that way too, until some of the companies I was with got reasonably big or some partners became way too complacent. Thats when I realized this doesn’t work.

Since we are creating a culture of being candid I think it should start from the word go. When looking at splitting equity there are a couple of factors to consider when doing the split:

1. Money to be invested

2. Time to be invested

3. Experience of the partner

So lets take an example:

Three partners are setting up a consultancy. The business requires substantial experience and industry knowledge as well as a large amount of time commitment. Looking at all the factors, they come to the conclusion that each factor should get a certain weightage; Money (18%) Time (48%) Experience (34%). All partners decide that they should split the investment money equally. Time wise the split would be 50/30/20 and experience wise it would be 55/25/20.

Thus you would get:

Partner A ( 6% + 24% + 18.8%) = 48.6%

Partner B ( 6% +14.5% + 8.5%) = 29%

Partner C ( 6% + 9.6% + 6.8%) = 22.4%

Allocating weightage to each of the factors can be mutually decided by all partners to be set equally or using a range of values. I feel this brings more fairness into an equity split and puts pressure on those individuals with greater shares, to deliver more to the team.

There are many permutations which could be added to bring a greater level of equality among the shareholding when time is being spent equally by the partners.

This model should provide a starting point to bring more objectivity into the equity splitting process. If you have any questions please let me know.

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Noise Levels

“Go placidly amid the noise and haste, and remember what peace there may be in silence. As far as possible, without surrender, be on good terms with all persons.” Max Erhman

When I refer to noise I am referring to the level of direct or indirect involvement of people from outside the core team. In my experience noise level reach unacceptable levels especially in family/friend businesses, when you share information regarding progress, performance and difficulties you are facing with your immediate circle. It starts with you sharing with your wife, girl friend, mother, father or other, how person X is just not pulling their weight in the team thereby causing problems. This then turns into the game, telephone , the next person who hears about it will get a distorted version and it continues to become worse. The problem now is, that if it is a family business or close friends, this news is going to get around and things then tend to get ugly between you and partner X.

The same also holds true if you are going through a dry patch and facing some cyclical difficulties with your business. Over the years I have incorporated a much higher level of candor in the organizations I work with, to keep the level of noise to the bare minimum. This factor needs to be controlled very tightly to insure the livelihood of the team as a whole. All partners especially if they are closely related should keep strict controls on what is to be shared outside of the core group. It is has dramatically relieved stressed levels and has made everyone more comfortable with talking things out among each other.

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