100 Insider Rules for Beating the Startup Odds

startup secrets

Lessons for Entrepreneurs

Over the course of their careers, veteran venture capitalist Randy Komisar and finance executive Jantoon Reigersman continue to see startups crash and burn because they forget the timeless lessons of entrepreneurship. But, as Komisar and Reigersman show in their new book, Straight Talk for Startups: 100 Insider Rules for Beating the Odds, you can beat the odds if you quickly learn what insiders know about what it takes to build a healthy foundation for a thriving venture.

 

“Apprentices work furiously to learn the rules; journeymen proudly perfect the rules; but masters forget the rules.” -Randy Komisar

 

Randy Komisar recently shared his perspective:

 

How did this book come about? Have you been compiling these rules for years?

We wrote this book because we were distressed by the growing frequency of missteps by entrepreneurs, many of whom are notoriously splashed across business pages and websites. Jantoon Reigersman brought fresh eyes to the situation as the CFO of a Silicon Valley rocket ship gone awry. We had been having a dialogue for years about what was really going on in the Kabuki Theaters of startup boardrooms and venture capital firms. And we felt that entrepreneurs and investors, professors and students, and frankly anyone curious about the startup game could all benefit from our conversations regarding the time-proven best practices for building successful companies. I have been part of the scene since the mid-1980s, and Tom Perkins, founder of Kleiner Perkins, was one of the original Silicon Valley venture cowboys. I had been compiling and sharing these insights with entrepreneurs since I co-founded my first company. These are the insider rules that the random hero stories heralded by the press conveniently leave out. In Straight Talk for Startups we address the nuts and bolts of choosing investors, raising money, building boards, achieving liquidity, and mastering the fundamentals by distilling decades of frequently forgotten wisdom about how to beat the odds.

 

“Venture Capitalists have one of the greatest jobs in the world. They get to sit across the table from passionate strangers who hallucinate the future for them.” -Randy Komisar

 

Rule 1: Starting a venture has never been easier; succeeding has never been harder. You’ve had an extraordinary vantage point in your career, and I’d like your perspective on the why behind Rule 1. 

It’s all about capital. Privileged places like Silicon Valley are awash is excess capital. The recovery from the Great Recession has left interest rates at record lows. Investors have been looking for ways to juice their returns, and venture capital’s black swans are a siren song. Forget the low odds of winning; the size of the pot is mesmerizing. So investors have been ignoring risk and plowing money into long-shot bets.

This may seem great for entrepreneurs. And on its face it is. But there is a downside. Too much capital means that too many companies are being funded in any single market. With easy capital comes reckless spending on scaling—often times resulting in highly uneconomic growth, that is the acquisition of customers who pay less than the cost of providing the product or service and who have little loyalty to the business. This “all or nothing” mentality leads to wasted dollars, talent and effort. And when one competitor makes the leap to noneconomic growth, the rest are left with little choice but to follow.

The cornucopia of money and startups also affects the job market. Salaries are inflated. People are quick to move from perceived losers to winners. In the Bay Area, for instance, the price of housing, the suffering infrastructure and the breakdown of communities makes building businesses much harder, even if starting them is easier than ever.

 

Startup Rule: Starting a venture has never been easier; succeeding has never been harder.

What’s Your Digital Business Model?

Transform Your Business

Digital transformation. We read about it often. Organizational leaders struggle to determine the possible threats, the impending changes needed, the opportunities that are possible.

Peter Weill and Stephanie L. Woerner’s new book, What’s Your Digital Business Model?, provides a strategic framework for thinking about these issues. Peter is a Senior Research Scientist and Chair of the Center for Information Systems Research at the MIT Sloan School of Management. Stephanie is also Research Scientist at the same institution with a specialty focusing on how companies manage organizational change caused by digital disruption.

I had the opportunity to speak with them about their research and new book.

 

Rate Your Digital Readiness

How would you rate most organizations readiness for the era of digital disruption that we are in and are facing?

Most organizations we talk to and research know they have to change to stay relevant and have improved in some areas (perhaps they’ve worked on business process optimization or they’ve automated a lot of processes). However, as customer experience demands have increased, we find that many older, bigger companies have not made the improvements and changes needed to address those demands. Plus the leaders of the average large company (more than $7B in revenue) identified that 46% of their revenues are under threat over the next 5 years if they don’t change.

 

Fact: large companies predict 46 percent of revenues are threatened in the next 5 years absent change.

 

How was the research developed?

The book is based around six questions we think every executive and organization has to be able to answer in order to be competitive in the digital economy. We started this research by interviewing leaders from large, global companies, asking them to describe their most important digitally-enabled business transformation initiative. From there we developed a model, tested the preliminary findings in more than 50 workshops with senior executives, identified capabilities needed, conducted several surveys to test those capabilities and show links to financial performance, and interviewed many companies to help us understand what it takes to transform a business. The book resulted from five years of research which shows that the senior executives of top performing firms honestly answered the six questions. To help, each chapter concludes with a self-assessment on one of the six questions. The reader can then compare their self-assessment results to top financial performers to help leadership teams understand the gap they have to close.

 

Needed: Honest Conversations about the Future

Of the six parts, is there one step that more organizations get stuck in than another?

Probably the hardest question for most organizations is having an honest conversation about whether they have leadership, at all levels, who will persevere and successfully deliver the business transformation. Along the way the culture will have to change and adapt to the new digital business model and often this means changing people at the top. But it is not just the top layer of leaders that has to change. Successful transformation requires getting the whole company to behave differently – from the board to the lowest level of employees. For example, DBS Bank in Singapore, which was one the Euromoney’s most digital banks in 2016 has managed to get 14,800 of their 22,000 people involved in a digital innovation activity every week.

 

“Successful transformation requires getting the whole company to behave differently – from the board to the lowest level of employees.”

The Power of Company Culture

company culture image

The Power of Company Culture

In more posts than I can count, I have written, discussed, and interviewed authors on the importance of organizational culture. A powerful culture fuels an organization to achieve greatness. When a new book by Chris Dyer titled The Power of Company Culture: How any business can build a culture that improves productivity, performance and profits hit my desk, I was interested to see the author’s view of culture and his interpretation of the latest research. Chris didn’t disappoint. The book takes the reader on a thoughtful overview of culture and shows the practical steps to take to improve yours in record time.

I recently spoke with Chris about his work on company culture.

 

“Culture is the bedrock of business success.” -Mark Goulston

 

3 Ways to Increase Transparency

Transparency. You share some great ways to increase transparency. Is it ever possible to be too transparent?

Of course! Take any example, and a case can be made that too much of a good thing can be bad for you. Each company needs to decide how transparent they should be with employees, customers, and vendors. InThe Power of Company Culture, I present evidence that more transparency is usually better. Regulations, privacy concerns, and competitive advantages aside, transparency is really about writing—and playing by—the rules of the game.

When companies take charge and share information about their financial health, successes, failures, goals, and dreams, they then control their own narrative. As humans, we can only use the information we already have to explain something new we don’t understand. By providing more information to those impacting our companies, we help them arrive at the correct conclusions and outcomes.

Any company looking to improve their transparency should start in a few key areas. First, ask: Does everyone in the company know what goals have been set by senior management? Overall company goals, department goals, and even team goals should not be a secret.

Second: Does everyone know and understand the financial health status of the organization? For public companies, this information is available to everyone. But most companies are not public. Decide how far you are willing to go, and share the numbers that you can.

Third: Do teams, departments, and employees understand what is expected of them by senior leadership? Nine times out of ten, when a department or person is not measuring up to what is expected, there is a disconnect as to what they believe is expected.

 

“Transparency is both a business ethic and a cultural element in the workplace.” -Chris Dyer

 

Develop a Positive Culture

How do leaders develop a culture of positivity?

There are lots of ways to infuse positivity into an organization. I suggest a deep dive into the Appreciative Inquiry and Positive Leadership working models, via books and interactive workshops.

Before you do that, consider where your business falls on the positivity scale. Do your people ask, “What went right?” or, “What did we do well?” Or do they just focus on solving “problems”? Often, we forget to ask and identify what is working, and consider that the place for us to do more.

Positivity also entails identifying who does what, well. In a team, it is common for some people to excel in one area, and others somewhere else. Aligning tasks and goals around strengths, and minimizing weaknesses, is more positive than working on what’s not working.

Additionally, look at the language used by people in your company to find potential tweaks for positivity. Instead of addressing troublesome issues as “problem solving,” which is a negative concept, start calling them “opportunities to improve.”

 

“Give feedforward not feedback.” -Chris Dyer

Unleash the Power of Brand-Culture Fusion for Maximum Growth

fusion

Having read more books than I can name about leadership, branding, and culture, I am surprised at how rare it is to see one that combines the power of all of them.

But that’s just what my friend Denise Lee Yohn did in her exceptional new book, FUSION: How Integrating Brand and Culture Powers the World’s Great Companies.

As one of the world’s leading authorities on brand-building, Denise tackles one of the most important and overlooked aspects of a strong brand: company culture.

It’s the FUSION of brand and culture that creates organizational power.

After reading the book, which I also proudly endorsed, I followed up with Denise to talk about her research into brand and culture.

 

The Importance of Culture

Denise, you are well known for your work on branding. This book takes a different turn as it is as much, if not more, about organizational culture. Tell us about why you decided to address culture.

FUSION actually came out of my work with clients on strengthening and/or repositioning their brands.  I found that our efforts were sometimes held back from making as much of an impact as they could have because of cultural issues inside the organization. If the culture of the organization wasn’t aligned with the brand, some leaders wouldn’t want to include culture as part of brand-building, or they didn’t appreciate the need to align and integrate their brand and culture — to create brand-culture fusion — and that prevented them from realizing the full potential of their organization and their brand.

 

“Great brands are built from the inside out.” -Denise Lee Yohn

 

You say that a key leadership responsibility is the integration of culture and brand. Has this always been true? What are the best ways to accomplish this?

Brand-culture fusion has always required strong leadership from the top of the organization, but it has become more important in recent years, given the corporate culture crisis that has arisen. Leaders can no longer assume their organizations will have a healthy culture if they’re nice and decent people — it takes deliberate effort to cultivate a unique, valuable, sustainable culture.

 

“You must accept the challenge to lead your organization to greatness.” -Denise Lee Yohn

 

Drop Your Mission Statement

Turn Millennials into Your Biggest Asset

Millennials Matter

Many business leaders are beginning to worry about how few Millennials have the leadership and sales acumen to fuel their growth and transition into senior leadership roles.

Danita Bye passionately believes that Millennials could be the new “greatest generation.” She is a leadership expert on the Forbes Coaches Council and is the founder of Sales Growth Specialists. I recently spoke with her about her love of Millennials and how to equip the next generation.

 

Millennials Matter: Proven Strategies for Building Your Next-Gen Leader is the title of your new book. Share some statistics with us about why that is.

The star performers responsible for the growth of our businesses will, in a few short years, primarily be Millennials. Mentoring young leaders needs to be a top priority of every company’s business growth strategy. We need to actively recruit and train them to replace the nearly 10,000 baby boomers retiring each day. Starting in the early 2020s, Millennials are going to drive our economy. Since that is the case, Millennial leaders will be key assets to accelerating business growth, tapping new markets and launching innovative products and services.

In our recent Millennials Matter Survey of over 270 business leaders, 60 percent voiced their concerns with Millennial leaders in three areas: character, confidence, and collaboration. Even experienced leaders are seeking proven strategies to deal with these and other mentoring and coaching challenges. Doing so will help them maximize their business opportunities while realizing their leadership legacy.

 

Why Millennials Get a Bad Rap

In my opinion, Millennials often get labeled unfairly. Why is that?

Millennials do indeed get a bad rap in the media where the focus is often on the group of Millennials who are entitled, narcissistic, and still living in their parent’s basement. However, that’s not my experience. I work with many emerging leaders who are highly talented people of rock-solid character and firmly grounded confidence. They exhibit the ability to connect and collaborate in a wide range of challenging communication scenarios with a broad range of people.

 

91% of Millennials see themselves as leaders.

 

We also have to admit that Millennial leaders are different from previous generations.  Based on current media, technology and culture, they view leadership from a unique angle. For example, 91% of Millennials see themselves as leaders. This is shocking to many who worked hard to climb the ladder and become “leaders.”  Plus, they crave leaders who interact in a non-conventional way – they don’t want a boss. They want a mentor or a coach to help them grow in their leadership capacity and influence. Some leaders perceive this “different” as a negative, expressing concern. However, when we are able to look, stop complaining and start coaching, we can harness the incredible potential that Millennials bring to our businesses. It’s these fresh insights and perspectives that hold the seeds to dealing more effectively with the competitive pressures of today’s crazy sales and business environment.

 

“Millennial leaders don’t want a boss. They want a mentor or a coach to help them grow in their leadership capacity and influence.” -Danita Bye