Journey of a Serial Entrepreneur

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

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 Better Startup Leadership

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There is a school of thought which believes that leaders are born, not made. Others believe the same applies to entrepreneurs. I have yet to see any conclusive evidence to support these claims. I am a firm believer that, with enough passion, hard work and ambition, anyone can achieve what they set out to do. Wanting to become a great leader is undoubtedly a most challenging task. Volumes have been written about leadership skills and how to develop them. However, inspiration and understanding concepts from books will only get you so far. If you really want to test your abilities and believe that you have what it takes to be a leader, you must stand up and take responsibility. It is all about being action oriented and wanting to bring out the best in the people who work with you. 

Over the course of the week I have written about five areas I believe younger startup leaders need to become more effective in. I have seen the positive impact on a team’s productivity, motivation and drive when a leader has focused on the following segments:

1. Vision Development: As a leader, it is your initial responsibility to create a vision with your team, one which is strongly rooted in SMART goals. The team must feel and think that the vision is achievable, and know what action steps need to be taken to reach it. It is only when a vision statement becomes more than a piece of paper, will we actually see a boost in productivity of the overall team. To read more about the importance of creating a vision please click here.

2.  Leaders Attitude: A leader’s attitude is usually the defining difference between a good team and a great team. With the right attitude, we assist the team break down mental barriers which may be holding them back, take away the fear of making mistakes and generally help them push themselves further. Pay closer attention to attitude, it should result in a team having higher productivity,and being more motivated and driven to reach their goals. To read more about the importance of a leader’s attitude please click here.

3. Culture of Candor: The ability to express one’s thoughts, opinions and concerns, free from discrimination is something I believe needs to be infused into every team. As a leader, there must be a focus on breaking down psychological barriers which may be holding certain team members back. Being candid allows the team to work more effectively, brings more ideas to the tables as well as issues which may be disrupting the team internally, to the forefront. To learn more about the importance of candor please click here.

4. Resource Allocation: During your startup journey, you will need to make several key decisions regarding resource allocation. A startup without proper allocation of resources, ends up in difficult situations, which may result in layoffs, discontinuing product/services, drop in quality, overburdening of some assets and may even require shutting the business down as a whole. As a leader, it is your responsibility to put systems into place to allocate resources optimally through a structured and rigorous processes, while keeping in mind the larger picture. To learn more about the importance of resource allocation please click here.

5. Team Management: This segment involves more than just making sure everyone on the team is happy or motivated. It requires the leader to take responsibility to develop structured processes to handle recruitment, evaluations, firing and conflict management. As a leader we have to be constantly in touch with our team and the challenges they face, to ensure we do whatever it takes to help them reach their potential. To learn more about the importance of team management please click here.

Undoubtedly the startup leader is in for a lot of surprises. The aim of this series was to equip new startup leaders with some broad guidelines of areas they should be focusing on. I strongly believe that when enough hard work is put into the development of the segments outlined above, they will definitely have a positive impact on the team and the business as a whole. It is important that you enjoy your journey both as an entrepreneur and a leader. I wish you the best of luck in your future entrepreneurial ventures.

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Managing the Team

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We hear it all the time “People are our most important strategic asset”, it is like a mantra of the business world today, repeated by CEO’s of Fortune 500 companies and new startups alike. However, if  you get down to gauge what leaders and managers are actually doing, to develop and nurture these assets, the standard response includes; our focus is on training and development, creating a conducive work environment or, helping the team achieve a work/life balance. After which there is usually a change of subject, and the topic switches to more ‘exciting’ matters, such as, their latest technology innovation. This has been my personal experience with many leaders and managers. I feel they are missing critical components of what it takes to develop and grow a team. 

I believe the reason too much attention is not spent on the function of ‘HR’, is due to the fact that it’s results are intangible in the short term. What is the ROI of $X on training & development in a year? How does a more rigorous performance management system impact productivity? These are difficult questions to answer. However, trends are now becoming clearly apparent that senior management across the world are beginning to understand the importance of management of this asset. In the coming years, I expect to see radical transformations in this field. So, how does all of this impact a leader of a startup organization? 

As a startup leader, one has to play multiple roles. One of the key roles is to focus on being responsible for the management of your team to the best of your abilities. Until you can afford a good HR resource, this is a responsibility that falls in your scope of work. A couple of key areas where a startup leader should spend time during the early stages of the organization are:

1. Hiring: This component encompasses adding new people to the team, evaluating prospective partners and even vendor selection. In the beginning, adding an additional resource to say a team of 4, is a substantial percentage increase in head count. This resource will have a deep impact on the rest of the team and requires careful selection. As a leader, you are responsible for coming up with basic job descriptions, required competencies and the preferred type of personality needed for the role. Learn to trust your gut instincts as they are usually right. Develop a structured process for the hiring and evaluation stage to streamline future requirements when the team is growing at a faster pace.

2. Evaluation: When we think performance reviews, many imagine complicated forms which take forever to complete, and have no real impact on the individual. This is very true of a lot of performance review processes found in many organizations. I like to keep things simple, a couple of questions relating to past performance, areas where development is required, issues brought up by other team members is all that is needed. I think it is important to have metrics in place which can tell your team members how they are doing and where they need to develop. Develop a short evaluation form and conduct them candidly every quarter if possible.

3. Firing: This is a tough one. I am not comfortable with the firing process yet, it is however an important aspect of being a leader. When a team member, whether a partner or an employee, in spite of repeated reminders and warnings regarding performance or behavior, does not change, a difficult decision needs to be made. This process becomes easier if you have a culture of candor present in your team. One needs to communicate the basis of the decision clearly and be firm. One bad team member is all it takes to drastically reduce productivity and team spirit. The sooner these situations are handled the better.

As a leader it is your responsibility to be in touch with your team constantly. This helps to understand where they need assistance, what their concerns are, as well as be a source of inspiration and guidance. If  all we do is keep paying lip service to ‘developing our most strategic asset’, the team will not be able to reach its potential and we would not have fulfilled our duties as a leader. 

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Optimizing Resource Allocation

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Resource allocation is an area I believe many startups pay inadequate attention to. It does not matter if you are bootstrapping or have just received a massive cash injection, planning resource allocation is a critical function. A startup without proper allocation of resources, ends up in difficult situations, which may result in layoffs, discontinuing product/services, drop in quality, overburdening of some assets and may even require shutting the business down as a whole. I have personally witnessed repercussions of misallocation of resources, this has made me realize even more, the vital importance of this function. 

During your startup journey, you will need to make several key decisions regarding resource allocation. Some key ones are hiring, purchasing of equipment,  investment in new products/services, upgrading of office premises, expansion, marketing and staff development. Apart from this, there will be a constant flow of new proposals and investment opportunities, these will make the allocation process even more challenging. As a leader, it will be your responsibility to manage the expectations of the business, stakeholders and your team, to reach an allocation mix, aimed at satisfying each one of them. In my experience, aiming for a perfect equilibrium is a great challenge, difficult sacrifices will need to be made and not everyone will be completely satisfied.

I like to keep things as simple as possible, here are a few basic steps I take when thinking about resource allocation:

1. Planning: If you are at an early stage in your business, use the business plan to give you a holistic picture of goals, and a time frame for achieving them. Use that as your guide plan for resource allocation to various segments. If you are already well into your business, take a look at the historic performances of your products/services, evaluate your cash flow positions for the coming year and allocate resources appropriately. It is important to be in a position to see the bigger picture before any resource allocation is done. 

2. Analysis: During the planning stage, there will undoubtedly be several options for resource allocation. It is important that all the opportunities are carefully evaluated. Conduct feasibility studies and market research before making any substantial investment. It is important to look at future requirements the investment will have as well. Overlooking future implications of current investments, can result in massive cash flow problems which can literally bring business to a halt. Where necessary, use a ranking matrix to evaluate your decisions.

3. Consensus: It is important to get feedback and have open discussions during the resource allocation exercise. Wherever possible, use experts in their respective areas to help guide and educate the rest of the team. The last thing you want to do as a leader is to appear to make key decisions such as resource allocation autonomously. As a leader, it is your responsibility to present all available options and give your point of view for the optimal course. 

The objective of this post is to emphasize the importance of proper resource allocation. The steps outlined should help in developing a basic framework to help you during this process. I intend to do a more detailed post regarding various resource allocation strategies soon for specific types of businesses. 

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How Participative is Your Team?

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I was introduced to the importance of candor in the work place in Jack Welch’s book Winning. Candor is essentially, the ability to express one’s thoughts, opinions and concerns free from discrimination or dishonesty. However, it has been noted by several psychologists, that the reason most of us do not integrate more candor into our daily lives, is because it goes against societal norms. It is essentially because we are constantly protecting our self interest, that we do not share our opinions candidly in sensitive matters, and do our best to ‘stay out of trouble’. We may survive without brutal candor in our normal daily lives, however, the absence of an environment of candor in a startup or business entity, will lead to missing out on many lost opportunities. 

It is the leader’s responsibility to integrate candor into the team. I believe that leading by example is the best way to fast track the integration of candor into a team. I remember the first couple of performance reviews I had with members of a team I had recently begun working with. Initially, when I asked questions relating to productivity levels of other team members or their last quarter’s performance, there was  a palpable  sense of discomfort. When I raised concerns regarding the performance of the business and asked the team to share their concerns, I was initially met with much silence. Eventually however, these psychological barriers will break down with adequate effort put into the process. As a leader, it is vital to help others feel comfortable in expressing their concerns and desist from becoming defensive or abrasive if they do not like what they hear. 

A couple of ways to introduce the concept of candor into your team is by:

1. Rewarding: During discussions and meetings, individuals who bring up viewpoints other’s have ben tip toeing around, should be rewarded through a pre-formulated mechanism. I incorporated this into a team I was working with, we kept a tally of who was adding the most constructive thoughts, ideas and suggestions. Keeping score, is in my experience, a great way to get people to participate.

2. Feedback: Institute monthly or quarterly feedback session among employees and yourself. If possible use a tool such as a 360 degree questionnaire to help get the process started. Everyone should provide their assessor and participant with a score on how helpful the session was. This helps get people talking and brings issues which may be bothering them, to the surface.

A word of caution,  integration of candor into your team environment may be met with initial skepticism. However, if the aim is to remain committed to making this a part of your team’s culture, it will most certainly give rise to more productive meetings, better ideas, faster approvals and eventually, lead to higher overall  productivity. 

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It is all about Your Attitude

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Startups usually comprise of small, tight knit teams. As the leader of this group, your energy level and mood is a compass for the rest of team. It is the leader’s responsibility to ensure that he/she does whatever is required to keep the team motivational level and outlook positive. I have found this to be very tricky sometimes. There are times when , a lack of sleep, or not feeling too well, leads to not having the required positive attitude at work. This is clearly visible to the rest of the team and has a viral affect on the rest of the team members and productivity does suffer. By the same token, if there is a member of the team who always seems to have a negative outlook, the leader has to combat these views with positive ones to bring a level of overall equilibrium. 

There will always be times when the economy is bad, the competition released a superior product, the team lost a critical member, or a host of other situations which bring the team morale down. I have experienced several of these situations and have learnt that my response to the situation will go a long way in deciding its eventual outcome. If I choose to give up, get depressed or blame others because of a particular situation, it has a domino effect on both the business, as well as the team. As a leader, we have to be aware of changing dynamics both within the team, and externally, and adapt to them seamlessly.

Listed below are a couple of ways to keep your attitude and energy in constant check:

1. At the end of every week/month ask for feedback from your team regarding your attitude during the time period, on a scale of 1 – 10. If you get a score of 6, ask about specific areas which you can work on to bring it to say 8 next week. This may seem forced and uncomfortable at first. However if there is a culture of candor present at your startup, this will be a breeze.

2. Document all the incidents you feel caused your attitude or energy levels to drop drastically. Were the changes directed to any one person? What caused them? What were the repercussions? Once we have some patterns regarding when and what is causing attitude and energy levels to drop, we can take specific steps to stop them from doing so in the future.

A leader’s attitude is usually the defining difference between a good team and a great team. With the right attitude, we assist the team break down mental barriers which may be holding them back, take away the fear of making mistakes and generally help them push themselves further. Pay closer attention to attitude, it should result in a team having higher productivity,and being more motivated and driven to reach their goals.

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Providing Vision and Focus

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I believe an important first step that needs to be taken by a startup leader, is providing a vision for the business as a whole. I am not referring to something formulated at a resort at a weekend retreat or some other offsite activity. Formulation of a solid vision requires detailed analysis about why your organization exists, the strategies you plan to use to reach your goals, and the underlying values which will help you get there. This needs to be a collaborative effort and should involve the entire team. In some of my earlier ventures, I disregarded vision as being a fruitless exercise, which involves just talking about goals and objectives without any solid foundations. A vision was something that needed to be put on the website to communicate a message like “We aim to revolutionize the creative designing industry by using state of the art technology and delivering maximum return on investment to our customers.” 

When new members joined the team they probably read the vision statement because it was framed and hung in the office entrance. They probably never noticed it after that. What then begins to happen (this process is accelerated at startups) is that team members begin to lose focus, and attention is diverted from the intended goal to something completely opposite. The business eventually starts to lose its footing, and struggles to find direction. The team becomes frustrated with the lack of progress, and motivation takes a nose dive. While all of this is happening, the leaders blame bad market conditions and increased competition for the loss of business. This is when they all need a reality check.

As a leader, it is your initial responsibility to create a vision with your team, one which is strongly rooted in SMART goals. The team must feel and think that the vision is achievable, and know what action steps need to be taken to reach it. Next, the leader has to infuse every member of the team with the spirit of this vision. It will get repetitive, as also really irritating at times to go on and on about something, but this is a vital and important responsibility. It is only when a vision statement becomes more than a piece of paper, will we actually see a boost in productivity of the overall team. One begins to see an increased level of focus and a tangible feeling of direction. If you are in-charge of a startup team or, any other team, start with creating a vision, and aggressively infusing your team with it!

 

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5 steps to get better strategic partners

“If we are together nothing is impossible. If we are divided all will fail.” Winston Churchill

Strategic partnerships have been an integral part of all the business ventures I have been, and am part of. They can be made with suppliers, customers or distribution networks. What is essential when selecting them is to ensure that you put effort into the evaluation and selection process. Partnerships are very easy to get into but very sticky to get out of. The following 5 steps will allow you to minimize the number of unsuccessful partnerships considerably;

1. Value Creation: All partnerships begin with the premise that together they can create greater value for their clients, partners or suppliers. The impact of the value has a magnified effect which makes the companies involved stronger and more competitive in todays cut throat market place. To learn more about how to identify ways in value creation please click here.

2. Common Vision: Identifying a common vision requires you to answer three questions, “Why are we wanting to embark on this partnership?”, “What do we hope to achieve through the partnership?” and “What changes need to be made to the current business models to execute this venture?” Once you have got detailed answers to these question you can construct a concise and specific vision statement. To learn the answers to these questions please click here.

3. Common Trust: To grow, any partnership requires you to establish a strong level of trust between those involved. This requires you to be honest, open and reliable when dealing with your partners. Trust needs to be earned and once you have, it can be leveraged to become a very strong competitive advantage. To learn more please click here.

4. Common Value Systems: These are integral in creating long term partnerships. They provide a common thread which both sides can relate to and work towards. Finding out about a partners value system requires you to dedicate time and resources towards researching it diligently , this effort is worth every cent. To learn more about value systems please click here.

5. Clear Contracts: Contracts are a critical component in any business deal. It is the document which binds two or more parties to an agreement they have reached. these contracts have to be written clearly, concisely and in an unambiguous manner. To learn more about writing effective contracts please click here.

True partnership is a two sided relationship where both companies strive to create value rather than making a quick buck. It is a strategy which has a long term impact on the bottom line rather than a quick fix. To make them work requires hard work and a mind set which is very different from the traditional “what can I get out of this partnership?” view. Choose your partners carefully and build visions together on how you are going to help each other reach your goals.

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Common Vision

“You need to surround yourself with quality human beings that are intelligent and have a vision.” Vince McMahon

When two companies come together to bring about greater value they need to be guided with a purpose. This purpose outlines exactly why it is that they are going into this partnership, what they hope to achieve through it and what changes will have to be made to their current business model if they were to embark on this venture. A common vision embodies all these factors.

To reach this common vision requires each of the partners to answer the three questions outlined above. Firstly “why are we wanting to embark on this partnership?”. If both sides have done their preliminary research and believe that they could add substantial value together, that becomes a strong case as to why they should partner. At this stage you need to put in some serious thought about common value systems and how integration would have an impact on operations in the future. Once both sides have agreed that there is value in them partnering they can move onto the next question.

This is ,”What do they hope to achieve through this partnership?”. This is the stage where both sides have to develop key performance indicators which would measure the effectiveness of this partnership. For example by partnering they would be able to reduce their cost of market by 10% annually which could be re-invested into R&D. In other situations one partner could leverage off the others distribution network to reduce inventory by 2x. The important aspect when developing such a proposition will be to see that the value created is not channeled to one beneficiary only. It needs to be mutually beneficial to foster trust and future growth. Once this question is answered you can move to the last question.

This is, “What changes need to be made to their current business models to execute this venture?”. At this stage we need to balance the cost of this partnership and weigh it against the benefits. This is a tricky aspect since with partnerships there are a host of intangible factors such as staff integration, communication barriers or even different value systems which may affect the partnership. Either way the two partners must do their best to evaluate the costs so as to arrive at a realistic figure.

Once we have all the key factors, a common vision for the partnership can be developed. This will help guide the partnership and provide it with KPI’s and costs which can be constantly measured and kept track of. Partnering is a commitment and one must ensure to only make those commitments which are maintainable .

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Great team…but lousy results?

“Don’t lower your expectations to meet your performance. Raise your level of performance to meet your expectations. Expect the best of yourself and then do what is necessary to make it a reality.” Ralph Martson

You have got things going pretty smoothly by now. You have found the right people and you have begun work on your concept. A very important aspect which should be talked about in the first critical meeting that teams have is about setting objectives, goals and time-lines. If these are not put into stone at this stage what will happen most of the the time is predictable. You will start off by feeling great about the project, 2-3 months will go by and you will be still stuck where you started. This has happened to me quite a few times and believe me its not fun. There will be a lot of confusion as to why this is happening, people will begin to doubt themselves and the business and most importantly productivity takes a plunge. So make sure you have clearly outlined objectives, goals and times lines for everyone on the team before starting.

By following the identification step you will effectively give everyone a responsibility which they have made a commitment to reach. Milestones are great motivators for teams as well. For example, the team sets a broad target to get their company website up in 2 weeks. Person A is allocated collecting the text for the website, Person B is going to focus on the design and Person C is the developer who will compile it all in and make sure that it is user friendly and has stuff which will get people to remember your website. If I were a part of this team and say Person A is also the designated leader of the group (leadership is a whole other topic which I will talk about in the coming weeks) it is his responsibility to set performance updates from all team members every 3 days to ensure that they are all on course to make the deadline.

If you find during the first or second performance review meeting that Person B complains that he hasn’t really started, you can take measures straight away to talk to him as to why it is so and to work through the problems. Without these regular performance appraisals you will find yourself 3 days before the deadline with no design concept as Person B says that he didn’t have enough motivation or something which stopped him from delivering. You will now be in a fix and product launch will get delayed which will affect the team spirit as well as the teams attitude towards Person B and Person B’s own morale. You have to get into the habit of conducting performance review cycles through appraisals, 360 degree feedback or simple meetings on a regular basis.

Performance reviews are also able to identify those individuals in your team who understand the job vs responsibility concept. Say Person C is in charge of the technical aspect. During the first 2 performance reviews he says that he is waiting for the material from A & B before he starts. Is he taking responsibility for his role? No. His argument is perfectly logical, however if during the first two meetings he shows us our competitions websites and plugin’s he is working on to make our website stand out, here is a guy who is motivating the team to push itself further and increasing overall productivity.

So next time you are wondering why your team is not performing to its potential go through this checklist:

1. Are the objectives and vision for the team clear?

2. Does your team have to achieve a result and time specific goals?

3. When was the last time you did a performance appraisal for your team?

This should identify key pain points for your team and will be a first step in getting productivity back on track.

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