Entrepreneurial key success factors

entrepreneurial success and failure and successful entrepreneurial organizations
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PatrickWood,United Kingdom,Researcher
Published Date:16-07-2017
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10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR Or How I Captured Lightning in a Bottle Twice and Created Half a Billion in Revenue BY PAT SULLIVAN CEO, RYVER 1 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 1: The Omniscient Entrepreneur The first key to being a successful entrepreneur is to know your stuff. Know your product, know your market, know your positioning, your message and what it’s going to take to get where you want to be. Benjamin Disraeli, who twice served as Prime Minister of England, once said the secret of success in life is for a person to be ready when their opportunity comes. Being prepared as an entrepreneur means knowing as much as you can. You need to become an expert in whatever it is you are attempting. How? Study everything. Learn everything. Be curious. How did we take SalesLogix from nothing to 108 MM in Seek knowledge from wherever you can. Then question just 5 years? By clearly understanding exactly where the everything you read and hear until you’re confident in your holes and opportunities were in the market, and then knowledge of what you’ve learned. It helps if you have a identifying the most effective and efficient way to get our natural love for learning, but if you don’t, you better be product to our customers (more on this in Key 4). We had disciplined enough. What you don’t know will get you every a crystal clear vision so that nothing was left to chance and time. I learned long ago I was not as smart as some, but I little happened by accident. knew I could outwork my competitors. In Stephen R. Covey’s seminal work, The 7 Habits of Highly I began my professional career as a salesman. I still am, Effective People, his second habit is “Begin With the End in but for the first 11 years I paid my bills entirely by carrying Mind.” You’ve got to know where you are going and then a bag and a quota. So, how did I go from being a computer you need a clear roadmap on how to get there. (By the salesman to becoming a co-founder and CEO of ACT? By way, if you haven’t already read Covey’s book, do yourself a teaching myself how to write code, that’s how. I had a pretty favor and read it. There’s a reason it’s sold over 25 million good idea that the computers I was selling could be used copies.) to better manage my contacts. I also knew no one had done it yet. So I became my first programmer. I learned Now, if after all your study and research, there are still enough code to build the forerunner to ACT some things you don’t know well enough, find experts 4 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUE“The secret of success is to be ready when your opportunity comes.” – BENJAMIN DISRAELI and mentors who do. I’ve been doing this for nearly three When I say “A” Players, I’m talking about the best of the decades, with more than a little bit of success, and I still very best. seek out the expertise of trusted advisors and experts. If you have to, hire them. I was fortunate to have three You probably can’t afford to pay them what their worth great mentors in my life. Now, at 60 and in my 5th venture so give them stock options. People want to be a part of backed startup, I found a fourth mentor. There is always something that is going to change the world. They also someone you can learn more from. want to be part owners. A lot of companies talk about employees “taking ownership,” but are stingy when it In my companies I always talk about only employing “A” comes to actually putting their options where their mouths Players. Now, I know everyone says that they only hire the are. Talk is cheap, and in the end, you always get what you best, and I believe most of them believe they do, but I’m pay for. If you’re serious about building something great, telling you it’s not the same thing. I’m not talking about invest in an “A” Team. The result is an agile team that does good employees or even great employees; I’m talking great work, fast. about hiring the best. There are lot of good businesses you can start and be a In every organization there’s an “A” Team, a “B” Team solopreneur, but if you are going to do something big, it and a “C” Team, with talented, valuable people on each. takes a team. Assemble the best team that you can afford. The bigger my companies got, the more they looked like The more “A” players you can attract, the better. “A” players other companies with “A,” “B” and “C“ players, but in the outperform “B” players by a factor of 2-10x, especially early days, all I have working for me is the “A” Team. Why? tech people like programmers, product designers and Because to be agile and still produce a great product in the marketing experts. It is often hard to find these type of shortest period of time, requires the very best talent you people much less hire them. But it can be done if you are can get, in every position. By the way, if you find you also good at selling See 8. have a “D” Team in your organization, it’s time for a reorg because you need to cut the “D” players loose. I have been very fortunate to work with many people that were much better at something than I could ever hope to I had an extremely talented employee working for us, but be. You have to be a pretty secure person to hire people in the end it just didn’t work out. He was so highly valued better than you in their specific expertise. You will learn that his former employer quickly rehired him, but asked, from them and add to your own experience and talent. “What happened? We’ve never found anyone better than you?” The former employee, a class act, honestly replied, It takes a certain amount of humility to work with extremely “You don’t understand, everyone there is in an entirely talented people. You have to realize you don’t and won’t different league. I couldn’t keep up.” have all the answers. You have to be willing and able to 5 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUEbe wrong. Some arrogant leaders think if an idea does not originate from them then it can’t be good. Or they “If you and I always agree then often take credit for one of their people’s ideas. That really sucks and is huge mistake. People need to know they are one of us is no longer needed– valued for their experience and talent. They need to know you are expecting them to contribute with original and and I am not going anywhere.” often contrarian ideas. They need to know you have great respect for them. And if you don’t have great respect for them, you hired the wrong people. At ACT, it was my partner Mike Muhney who thought of the name. For months we tried but could not come up with a To succeed in a big way it takes a team. A great team. Trust great name. It was so frustrating He got on a plane to NY me, you simply cannot do it on your own and said to himself “by the time I land, I am going to have a name.” When he got back home and told me the name and I am known for having very strong opinions, but I learned how he had arrived at it, I knew he had discovered the right a long time ago that my opinion is not always right. I have name. ACT. An acronym for Activity Control Technology. I been wrong many times. I go out of my way to demonstrate added the exclamation point. ACT to my team that I know I am not always right and I expect to be challenged. I can state my opinion very forcefully but At Ryver we wrestled for a very long time about our then say with sincerity that I may well be wrong and want positioning (see 4). We thought we had built a new and everyone else’s view. People who work with me learn that innovative CRM system. But it became very clear that I expect them to make their opinions known forcefully. was not what we had built at all. Everyone we showed it Heated discussions can be very valuable as long as to said they loved it but “it’s not CRM” We would ask “well everyone knows it’s just a discussion. It’s not a war then, what is it?” They replied, “I have no idea.” We wore out every possible position we could think of. We’d settle Whenever I sense that someone else is holding back I on something for about two days and then we’d all hate it. usually say, “If you and I always agree then one of us is This went on for months as we were working to finish the no longer needed–and I am not going anywhere.” I love product. to hire strong people. If I can intimidate someone, they ought to be intimidated. If they are not strong and secure Finally one of the co-founders walked into my office said enough in themselves, they probably don’t fit and need he had figured it out. He then made the case for “Team to go. Communication.” When he was about halfway through, I KNEW he had nailed it. I was thrilled Once we adopted this I go out of my way to get consensus on a significant position, it resonated with everyone inside and outside the decision. There are times when I KNOW the right thing to company. We had spent two years reimagining email and do but I’ll still discuss it as long as it takes to get everyone the answer was Team Communication. I was thrilled that on the same page. I want it to be OUR decision, not my SOMEBODY had figured it out. I would have liked to have decision. People need to know they have been heard if been the one to do it, but it did not have to be me. they are going to get on board even though they may think a different decision is the right one. I almost never make I recently said to someone that while I get much of the arbitrary decisions. There are times when an unpopular credit for ACT, SalesLogix and now Ryver, “the great thing decision has to be made but that should be very rare. is that I know no one person can take credit for any of them.” It took a team. I love it when someone on my team comes up with something brilliant. I am quick to make a big deal of the The bottom line is, when it comes to entrepreneurial fact that it is brilliant. I’m also relieved that a problem has success, knowledge is power. Get it where you can, when been solved no matter who it is that solved it. you can, from whomever you can. 6 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 2: Always Have A Bias Toward Action Okay, now that you know everything, know this: you can’t know everything. But that’s no excuse for not acting. Being a leader means making decisions and taking action. They should, of course, be informed decisions (see Key “ There is no more miserable human 1). If for some reason you’re in the habit of making uninformed decisions, please stop reading and close this being than one in whom nothing is e-book now. Nothing I write here can help you succeed habitual but indecision.” if you don’t know what you’re doing. It seems obvious enough, but it’s shocking how many people fail to really – WILLIAM JAMES know their business. Which is why it’s less shocking that so many of their businesses fail. But, if you put in the time, work and effort, then you should trust yourself to make the And it’s not just staffing issues. tough calls. A year into Ryver, my current company, we realized the It’s what I call, “being comfortable with ambiguity.” It underlying technology and the user experience just wasn’t would be nice if everything was black and white, but real good enough. It was too slow. More importantly, we simply leadership lies with what we do in the grey area. And let me couldn’t see how we could get where we needed to go with tell ya’, there’s A LOT of grey area the staff and platform we had. The bottom line is you can’t let problems fester. We could either do the easy thing and continue doing what we were doing and hope for a different outcome Say you have an employee, even a co-founder, who just (the definition of insanity), or we could assemble a new doesn’t seem to be the right fit. It’s seldom an easy thing team and start all over on a platform that actually could to let someone go, but delaying the inevitable doesn’t help get us where we needed to go. We chose to start over, and them, and it definitely doesn’t help the company. Be slow to thank God we did Despite the success of both ACT and hire, but fast to fire. Like I said, NEVER let problems fester. SalesLogix, I believe Ryver may prove my greatest success Bad fits at a company have a ripple effect on employee and accomplishment, but it wouldn’t have been possible morale, company confidence and performance. If you if we didn’t have the courage to make the hard decision. notice the problem, you can be sure that others do, too. Regarding poor performers I always say, “The CEO is usually In Good to Great, Jim Collins wrote, “Greatness is not a the last one to know.” Dealing with staffing problems not function of circumstance. Greatness, it turns out, is largely only builds your team’s confidence in you as a leader, it a matter of conscious choice, and discipline.” In the world also builds their self-confidence as valued employees who of entrepreneurship, indecision is death. To succeed you are still part of a great team. have to have the discipline to make the tough calls. 7 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 3: Solve For An Existing Problem When I look out over the landscape of new product offerings, what I tend to see is a lot of more-of-the-same, or a bunch of pseudo-innovative solutions looking for a problem. Maybe that works for some, but I have my doubts. For me, success in product development has always come from solving for one of my own existing needs. When I look out over the landscape of new product realized I could probably use the very product I was selling offerings, what I tend to see is a lot of more-of-the-same, to better manage my contacts. So I taught myself how to or a bunch of pseudo-innovative solutions looking for a write code. When co-workers began wanting to use it, I problem. Maybe that works for some, but I have my doubts. knew I had something. That prototype would eventually For me, success in product development has always come become ACT (which fortunately did turn out to become from solving for one of my own existing needs. the world’s best-selling contact manager, despite its humble beginnings). It was the case with ACT, SalesLogix, Jigsaw Health, and my current company, Ryver. Let’s take a quick look at each. The point is, our problems are almost never our own. When I solved for the problem of managing my own contacts, ACT was never the result of my desire to build the world’s I was also solving for the same problem experienced by best-selling contact manager. It was born out of my desire salespeople everywhere. On average, people found their to be a better salesman. I was selling computers, and number of contacts went from 50 to 500 after just six 8 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUEmonths of using ACT. That’s why six million salespeople paid for ACT – a 395 price tag in the late 1980s – out of their own pockets. SalesLogix was created to fill the need for a real mid-market CRM product. I’ll go into more detail about the specifics of SalesLogix in Success Key 4, but for now it’s enough to know there was an obvious hole in the market. SalesLogix was created to fill that specific need and 18 months later we were the 1 Mid Market CRM in the world. Jigsaw Health, my premium dietary supplements company, along with my book, Wellness Piece by Piece, were both the result of my personal 30-year struggle to solve the puzzle of my own recurring chronic health issues. More than 125 because buried inside our Inboxes is our most important million Americans suffer with chronic illness. I’m one of Team Communication. When you get 200+ emails a day, it them. My search for the supplements that worked best is hard to find the 50 that are really important When you for me led me to co-found Jigsaw Health, where we now get those out of email and into Ryver you always KNOW produce the most effective and bioavailable magnesium everything in Ryver is important. Things left in my email supplement in the world. are important too, just less important It’s the only email actually built and designed for how I communicate and Ryver is for the nearly 1 billion of us who spend a third of collaborate today with all my most important teammates. our work week trying to force email into unnatural acts it We built Ryver because it’s the way I want to communicate was never designed for. We live in email. I always say that with everyone important to me. email is the real CRM because it’s where salespeople spend most of their time. The problem is, email didn’t keep up with Necessity will always be the mother of invention, and all the changes in how we communicate and collaborate solving for an existing problem will always be preferable today. Other technology has made dramatic leaps forward to creating a “solution in search of a problem” if for over the past 20 years, but email looks and acts almost no other reason than the obvious – it solves for MY exactly the same. So we created Team Communications existing problem. 9 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 4: Positioning Somehow “positioning” logically fell into position 4, but know that for me it may be the single most important key. You can easily argue that having a clear and simple statement that describes the one thing that separates my company from everyone else’s has played a huge role in my repeated successes. And it almost always begins with getting rid of “and.” pages. I just didn’t know how to apply it specifically to ACT. Most entrepreneurs believe it’s better for everyone to know So I called Jack Trout and few weeks later we were in New everything their product or service does and provides, but York to meet with Jack and Al. they’re wrong. Trust me, I know, because at the start of ACT I was no exception. In the early days you would hear In Positioning it says, “The easiest way to get into a person’s us try to describe ACT as a “contact database and a word mind is to be first.” It goes on to say that in advertising it is processor and a calendar, and a report writer, and an “best to have the best product in your particular field. But expense manager, and it dials the phone and automatically it’s even better to be first.” Fortunately for ACT, we were addresses your letters and faxes, and, and, and… would both first and best. We were the first contact manager you like to buy one please” It was a great product that because we were creating a new category, but I still really did do everything, so why wasn’t it selling as fast as didn’t know how to turn that into a powerful positioning we thought it should? statement. Fortunately for ACT, Al did. “You are the best- selling contact manager.” I told Al I wasn’t comfortable Remember in Key 1 when I wrote that if you don’t know saying “the best-selling” because we had only sold a few something, find someone who does. Well, that’s what I did, hundred copies of ACT at that point.” and when it comes to positioning, Al Ries and Jack Trout wrote the book. Literally. The first book to really deal in depth with the problem of how to be heard in an already overcrowded marketplace, Positioning: The Battle For Your And it almost always begins with Mind, was all about how to position your product in the getting rid of “and.” mind of the customer. I’d read Positioning (you should read it too), and felt the solution to our problem was in its 10 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUECherchez le creneau. Look for the hole. “Does anyone else call their software a contact manager?” usually because you haven’t answered a big question. This Al asked. is never truer than with positioning. At ACT there weren’t a lot of questions because everyone was on the same page. “No,” I said. We were ACT, The Best-Selling Contact Manager. People could now answer many of their own questions simply “Well, that makes you the best-selling” knowing what we were. And suddenly ACT was no longer simply ACT. From that By the time we started SalesLogix we knew a lot more moment on, everyone in the company was taught to about positioning. In Positioning, it talks a lot about the always say, “ACT, The Best Selling Contact Manager.” We French marketing expression, “cherchez le creneau.” It said it because it was true. And the more we said it, the means, “look for the hole.” So we went looking for a creneau truer it got and found a huge, gaping creneau so big you could drive a truck through it. By turning “and” into “the” we stopped having to describe every single thing we did. We were simply the best. Then we built a truck. ACT eventually owned 90% market share at retail and has sold over eight million copies to date. We created In the mid 1990s the low end of CRM was dominated by ACT, the Contact Management category. Jack and Al also had which was sold at retail. At the high-end were companies us change the name of our company from Conductor like Siebel, Scopus and Vantive. The high-end consisted of Software to Contact Software. That way all of our future enterprise level products that were “sold by suits.” competitors would have to use OUR name, Contact, to describe THEIR products. The creneau was in the mid-market, but we knew the key was in building a product a VAR (value-added reseller) could What are you the first at? In what way are you the only, rapidly sell, customize and profit from. Everything we did the leader, the best? If you’re not the “first” or the “leader,” was with that in mind. That clear vision told us what to do, where do you excel? What differentiates you from the and what not to do. We didn’t have to worry about retail or competition? In short, how are you going to position packaging. We didn’t have to worry about hiring the sales yourself in the mind of your consumer? teams or support elements necessary for enterprise. Answer the big question and you’ll answer a thousand little Before the product shipped we had already recruited and questions. Whether it’s about positioning or something trained 50 VARs, so the day it launched all 50 were fully- else, if your people keep coming to you with questions, it’s trained and ready to take the leads. 11 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUE At SalesLogix we became a marketing, training and selling machine. We woke up everyday with the goal to recruit, You have one chance to train and make productive 50 new VARs a quarter. It’s a goal we never missed. Good execution. Good people. own a position in the mind Great product. VARS were lining up to the point that “recruiting” simply became “choosing” which 50 VARs we of the market. wanted to take that quarter. In 18 months we were the 1 Mid Market CRM in the After hearing that for the twentieth time, we had to World, and in just five years we grew from nothing to admit everyone else was right. In an attempt to improve 108 million. CRM, what we had actually done was solve for the larger deficiencies and inefficiencies of email, the application The key was positioning and starting with a very clear vision. where we actually spent most of our time. Sometimes positioning means repositioning. I’m a The Rip Van Winkle of technology, email was seemingly competitive guy and I always strive to be the best. With asleep for 20 years while the rest of the world around it Jigsaw Health it was no different, but it became clear very changed. The choice for Ryver was to realign the product early on that we had neither the money, time, nor resources with our original goal of making a better CRM, or go to unseat the giants in the supplement industry. But that down the path of bringing email into the way we work in didn’t mean we couldn’t still be the best at something. So the 21st century. We chose the latter. The result is Ryver rather than pick a fight with a giant we couldn’t slay, we Team Communication, all your most important team found one we could. Magnesium. communication in one place available on every device We weren’t the first or the biggest in the supplement The new position was not only more accurate to the field, but you won’t find a better magnesium supplement. product we were actually building, it also widened our By combining a premium supplement with a focus on potential target market by around 900 million. Not a bad sustained release technology to allow the body to absorb place to be. Everyone in business who uses email has a the active ingredients over time, rather than all at once, we team of people they communicate with. That is their found a creneau that 9 years and over 100,000 customers most important communication. Ryver allows you to pull later has made us “the magnesium company.” More than all of that communication into one place where you can 80% of our orders come from repeat customers. No one best deal with it. It’s awesome. I can’t imagine building a ever thought you could make magnesium sexy, but we did. company without a product like Ryver It’s a superior product that has given us a superior position. In Positioning, Ries and Trout tell us positioning is not As I wrote in the previous section, Ryver began as a something you do to your product, but rather something desire to improve CRM. Like most people, we hated you do in the mind of your prospect. “That is, you position working in CRM to the point where most of us didn’t. We the product in the mind of the prospect.” The market will worked in email then put data and numbers into CRM as only grant a product a single position. A product can’t be needed. Our answer was “Simple. Sophisticated. CRM.” the best “something” AND the best something else. You Truth be told, it wasn’t a bad position. We had a clear have one chance to own a position in the mind of the message and target market. Unfortunately what we market. It is critical you figure out what position you can didn’t have was a CRM product. Don’t get me wrong, we own that no one else does. I share it with you again here thought we did, but every time we demonstrated Ryver, because I believe nothing has been more responsible for the response was universally the same: “We love it. We my success.  want it. But it’s not CRM.” 12 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 5: Obsess Over The Details Details are often the difference between success and failure. There are a lot of details in life I really don’t care that much about. Just give me the overview. But when it comes to my product, my messaging, my positioning, how we sell and market etc., I obsess over nearly every detail. I love it I want everything that I have some control over to not just be good. I want it to be GREAT I have always been that way. In eighth grade I did a Details make the difference between good and great. ACT science project that won the top prize in the Illinois State was a great product. Today, 27 years later, it’s still a viable competition. I figured out how to study what amino acids product being sold in the market. The thing that made were destroyed when you made oats into Cheerios, rice it great were the details. I recently was asked “what was into Rice Krispies and corn into Corn Flakes. I had my own the essence of ACT?” I answered, “Anticipation.” ACT had lab in the basement. I also had chemicals that my mom a way of anticipating exactly what you either wanted to feared would blow up the house (and some of them do next or ought to do next. It was uncanny. People still could have). I was obsessed with the idea. I got help from rave to me about how ACT changed their business lives. It experts and I learned everything I could (see 1). When the was all because my co-founder, Mike Muhney and I totally judges quizzed me there was nothing I could not answer. obsessed over every single detail. We would argue about Maybe this is a quality that just comes naturally to me, but little things that probably didn’t really matter, but out of that it’s definitely learnable and a quality every entrepreneur came a product that created a new category of software. It needs to develop. just worked the way it ought to. 13 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUEThink about other products that you just go “Ahhh” over. The iPhone. A Tesla. A great piece of clothing. A great Steve Jobs had it right. “Insanely movie or piece of music. Something about it simply makes it great. I love to listen to the Beatles music. I am still in awe Great” is the goal. of how tight they were. Every note, word and harmony just right. It set them apart and no one has ever come close in terms of number one Rock and Roll hits. a field? What would someone want to do from here? After There is a term that is popular in the software business here? And I have attracted people who work with me who today. MVP – Minimally Viable Product. It is important to do the same thing. We also have to have people who don’t get something in front of prospects and customers and do this so we can actually get something done We totally get feedback early. But what is more important is to ship a scrapped one version and started over after a year of work. “whole” product. MVWP – Minimally Viable Whole Product. Then we got right to the finish line when someone figured It does not mean it has every feature that it will eventually out how to make things about 50% simpler. So we took an have. Software is never done. But you have one chance extra few weeks to do it right the first time. We have done to make a great first impression. Your product or service dozens of hard technical things to make Ryver wicked ought to be great in every way you can afford to make it. fast. Speed is a feature. Most web apps are painfully slow. Unacceptable. Details like speed totally matter I often find myself simply staring at a screen in Ryver and asking myself, “what could be better?” What could we take Don’t get me wrong, there are times when enough is out to make it simpler? Is everything I can do from here enough. Finished is better than perfect, but you should obvious? How can we make something one click instead obsess over every detail that you can afford to to make of two? How can Ryver accurately and automatically fill in just right. Steve Jobs had it right. “Insanely Great” is the goal. 14 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 6: Transparency When it comes to running my businesses, honesty isn’t just the best policy–it’s the only policy. And if you want to succeed as an entrepreneur, what they see had better be what they get. In the same way everyone says they only hire “A” Players, effectively do their jobs without everyone knowing what’s companies also love to talk a lot about transparency. The actually going on. Lack of transparency is like giving your problem is, most fail to actually achieve it. Sadly, the only people an incomplete roadmap and expecting them to thing really transparent in most companies today is their successfully navigate unknown and treacherous terrain. utter lack of it. I’ve even heard people say things like, “For the most part, our company is pretty transparent,” but A good example of transparency comes from the later “pretty transparent” is like being “a little pregnant.” You years at SalesLogix when we were trying to make a web either are or you’re not. And regardless of what you say, product. It was a good idea, but frankly, very bad execution. your investors, employees and customers can sense when Really bad. The kind of bad Charles Barkley calls “turrible.” they’re not being told everything. Simple rule of thumb, Around 20 million worth of “turrible,” to be exact. Luckily unless it’s a birthday party or an engagement ring, most we were more than big enough at that point to deal people don’t like surprises. with that costly of a mistake. And we could have easily whitewashed everything by simply not talking about it and At Jigsaw Health, my premium supplement company, moving on. we hold an open-book, company-wide monthly ops meeting. Everyone in the company is in attendance and “Pretty transparent” is like being we go over all the numbers – profit, loss, balance sheet, cash flow, analysis of key metrics – everything. Why? “a little pregnant.” You either Because informed people can make informed decisions. Entrepreneurship requires being agile, the ability to move are or you’re not. quickly, but you can’t expect, much less require people to 15 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUE But people would have wondered, whether they talked about it or not, because a lack of transparency, clarity or Transparency translates to trust closure breeds a lack of confidence. So we owned it. We very publicly acknowledged the failure, and guess what? and respect, and in the end, Everyone simply stopped talking about it and went back to work. happier employees. My meetings with my Board of Directors always start exactly the same. Two slides. Highlights and Lowlights. The good the bad and the ugly. I never hide anything. you hide things, paint a rosier picture than is accurate, or And then I tell them what I am doing about the bad, or you set expectations that can’t be realized, your people begin a discussion about what we ought to do. will become insecure and you will only be setting them Entrepreneurs ask me about dealing with investors, up for disappointment and failure. In time, everything you especially about dealing with venture capitalists. I say, “if you say will become little more than pie-in-the-sky prattle, and try to hide ugly from them they will want to fire you.” They a Pavlovian bell cuing people to your lack of leadership. know there are always things that go wrong in startups. You can only cry wolf so many times before people are no They expect it. All they really want to know is how you are longer willing to follow you. going to fix the problems. They want you to acknowledge and own the problems. Justice Louis Brandeis once said that sunlight is the best disinfectant. He was right. When it comes to transparency Transparency translates to trust and respect, and in the and your business, it’s always best to throw open the end, happier employees. The opposite is also true. When shutters and let the sunshine in. 16 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 7: Put Your Feet Up That is to say, be yourself. A woman who has worked for me several times likes to him, but that wouldn’t have been true to who I am. Why tell a story that happened back in the SalesLogix days. A is that important? Because when you’re an entrepreneur, partner came in upset and making demands. She says that people need to trust in who you are and what you’ll do. It’s I leaned back, put my feet on my desk and let the partner about authenticity and consistency. Partners, employees, vent. When they were done, I looked across the desk and customers and investors need to see leadership they can said, “I’m sorry you’re upset, but I’m not going to do any trust and depend on. The partner didn’t respond negatively of the things you just asked me to do.” The partner was to my response just because he trusted my judgment, but apparently stunned, and then we had a good conversation because he trusted me. about what we could do to make him happier. At the end of the meeting, everyone left satisfied. When I speak to entrepreneurs, I often talk about the importance of persistence, perseverance and tenacity– I don’t actually remember the incident, but it sounds like three things that have served me well. Why? Because at the me. If you’re in my office talking, odds are good my feet will end of the day, what all three share is a pit bull doggedness be on my desk. I’m a feet on the desk kind of guy. And that’s and refusal to give up, and that’s never more important the point of my story. Be yourself. than when it comes to being yourself. Never cease to be you. There’s a million “thems” out there, and they all work Benjamin Franklin said, “There are three things extremely for someone else. hard: steel, a diamond, and to know one’s self.” In Hamlet, Shakespeare wrote, “To thine own self be true, and it must If you are truly prepared, have the courage of your follow, as the night the day, thou canst not then be false to convictions and be yourself. Never forget that you are any man.” your single most important asset. Trust your instincts, be yourself and own who you are. Always. I don’t know if everyone could get away with responding to the partner the way I did, but I don’t know any other way to Never cease to be you. There’s be. I’ve made a career out of being direct, no-nonsense and to-the-point. That is to say, being me. As I understand it, a million “others” out there, and the partner’s demands were unreasonable and the things he was complaining about were not of our making. Still, I they all work for someone else. guess I could have just as easily acquiesced and appeased 17 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 8: Salespeople Wanted Like I said earlier, I began my career carrying a quota and a bag. My experience as a salesman has proven invaluable at every stage of my career. If you know you truly can’t sell, partner up with someone Everyone Sells.” Everyone really does sell. Mostly they sell who can. Being a successful entrepreneur means themselves. you are almost always selling something to someone. Whether it’s selling an idea to potential investors, hiring One of the hardest things we had to overcome with ACT a great employee, or your product or service to potential was getting distributors and big retailers to carry and sell customers, if you can’t sell, you are doomed. I can count our product. It was a classic chicken and egg. They didn’t the actual number of products that “sold themselves” on want to carry the product unless it sold a lot. But we one hand. It’s a myth. Even the greatest products were couldn’t sell a lot unless they carried it. So when we got an positioned and pitched by someone who could sell the opportunity to prove ACT could sell at retail we jumped all idea. Your product or service is no different. over it. A good entrepreneur friend of mine always says, “you have to egg the chicken” Can selling be taught or is it just an innate trait? Some are “born salespeople,” and you may be a better salesperson I had befriended a guy who managed to get Egghead, the than you think. Maybe you can be a better salesperson leading retailer for computer software in the late 80’s and than you think. Just because you have never officially been 90’s, to let him put a Kiosk in every store that would feature in sales does not mean you can’t sell. If you are married, 5 new products every month. When he called me to ask you sold your spouse You have friends, you sold them on if I wanted to be included I jumped at the chance even wanting to be your friend. You have a job, you sold (and though we couldn’t really afford the cost of the program at continue to sell) your talents. The code name for ACT the time. New companies would typically put the product before we arrived at the name was YES. It stood for “Yes in the Kiosk and “hope” the product would sell. Not us. 18 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUEWe had about 10 people in the company at the time. There were about 120 Egghead stores spread out over ...lots of people can sell, even the country. We taught every person in the company how to sell and demo ACT and then mapped out all the ones you might not expect. stores nationwide and bought plane tickets. All 10 of us, including our programmers, went on the road and visited every Egghead store not once, but twice in that month. We talked with and demoed almost every salesperson and The other thing we accomplished with our “blitz” of the manager in each store. Egghead stores is that it made us LOOK like a big successful company. I call it “optics.” We put the very best optics on Egghead sold about 400 copies of ACT and was stunned the opportunity as we possibly could. because it was one of the top sellers of all the software they sold. They immediately stocked the product and So there are two messages here. One, lots of people can also demanded that their two main distributors carry the sell, even ones you might not expect. Second, when you product as well. It was our big break. Our programmers get an opportunity to sell your product, put everything in especially LOVED being out talking about the product it you possibly can. Leave as little to chance as possible. they had built. They knew the key points to make and also We’ll never know if ACT would have sold enough to get followed a very tight demo script we had taught them. Egghead’s attention but I suspect it probably wouldn’t have. 19 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 9: Never Say Die, Unless It’s Obviously Dying I believe you can’t succeed without persistence, perseverance, tenacity and a never-say-die attitude. They’re the personality traits you’ll need to get you through the difficult times. Persistence is a lot like pestering. My mom used to call me obnoxious because I would pester her for things I wanted. Perseverance is the ability to keep going when things are severe. Tenacity is needed when you face rejection. A person you hoped would invest says no but 90 days later you go back to them anyway because you have made a lot of progress and you just know they ought to reconsider. That said, the fact is there will be times that, despite your the opposite – an adhesive that didn’t stick well at all. The best intentions, great positioning and a apparent good rest is, as they say, history. product, success is just not going to be in the cards. There could be a million factors and reasons why, many not Sometimes it’s just not meant to be, or at the very least, your fault, but in the end it’s important to be able to know not meant to be the way you planned. At this point you when to say “when.” At the very least, you may need to have two choices. It’s either the Charles Darwin School of find a different “what.” One of the best examples of finding Entrepreneurs where you adapt to survive, or you simply another “what” comes from my days at 3M. cut your losses and live to fight another day. I went to work for 3M in 1980, the same year they Knowing when to say, “when” is ® introduced the Post-it Note. The Post-it’s 12-year journey from failed-attempt-at-developing-a-super-strong- not the same as crying, “uncle.” adhesive, to becoming the omnipresent yellow sticky note is well documented. In trying to create one thing, a super- Sometimes it’s just time to move on. adhesive, 3M scientists had actually succeeded in creating 20 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUEJohn Lennon wrote, “Life is what happens to you while the most powerful marketing tactic there is. Just plugging you’re busy making other plans,” and it’s no different when away at something day after day with some limited success it comes to entrepreneurial endeavors. There’s nothing is often the key difference between success and failure. heroic about losing a home, a marriage or your life savings Many products or services reach a place in time where over something that has no chance of success, no matter they begin to take off. You arrive at an inflection point how noble the idea. Knowing when to say, “when” is not the when the critical mass you need arrives. same as crying, “uncle.” Sometimes it’s just time to move on. But I have seen situations where you just haven’t had It’s often hard to tell when something should live or die. I enough time to allow the product to catch on. Sometimes think that is one of the benefits of having a good outside you just have to keep on trying. If there is evidence you really Board of Directors or even a Board of Advisors who can do have something people want, often tenacity will pay off. objectively evaluate a company. A few times I have been a part of a decision end a company’s life. Emotionally it’s About 2 years after our launch of ACT people started a hard call but objectively it usually is pretty obvious to saying to us, “you guys were an overnight success” “You outsiders who aren’t as emotionally attached. came out of nowhere.” I said to myself, “where were you 2 years ago when we were pushing this boulder up the At the end of the day your instinct is probably right whether hill?” We weren’t an overnight success. But “time” often is you should stop or keep going. 21 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUESUCCESS KEY 10: “Be The Ball, Danny.” What does the number one ranked player on the PGA tour have in common with the 220th ranked player? They both hit the tee box Thursday believing they’re going to be putting for the championship on Sunday afternoon. At that level of competition, regardless of conditioning, skill and natural talent, everyone has the ability to win any “Listen, here’s the thing. If you can’t given tournament. That’s why the last round on Sunday is all about the mental game. It’s the same for tennis, chess spot the sucker in your first half hour or starting your own business – you’ve always got to have at the table, then you are the sucker.” your head in the game if you expect to have any chance at coming out on top. What does that mean, “have your head – MATT DAMON IN ROUNDERS in the game?” For me it’s a combination of confidence, drive and a dual focus that keeps one eye on your goal and the other on your competition. This is never truer than in professional poker. That’s why few things are more frustrating to a pro than playing with an inexperienced amateur. Why? Because A morality play performed on a felt-lined stage, poker is amateurs are unpredictable, specifically because they are the ultimate in mental gamesmanship. Think about all inexperienced and don’t know the right thing to do. Luckily, that goes on in the playing of a single hand. Every player just like in business, you can spot the amateurs a mile away. has to size up their own hand, calculate the odds and possibilities of ending up with the winning hand, then The bottom line is, it’s simply not enough to know what doing the same for every other player at the table. It’s not you’re doing. You also have to know what the competition enough to have the intelligence, experience and talent to is doing, anticipate what they’re about to do and then figure out what cards the other players are holding based turn it in your favor. You need to know all your pathways solely on their betting, behavior and the cards on the to success and still have the mental toughness to come table. You then have to get them to bet and behave the back when things don’t go the way you planned. The way you want, while not revealing any hint of your hand mental game is as much about mental toughness as it is or strategy. intelligence, focus and ability. And you’ll do the same thing again and again with each Entrepreneurship can be as brutal as it can be exhilarating, new hand. as scary as it is fun, and it is definitely not for the weak of heart – which is exactly why we do it. But if you want to Whether it’s math, strategy or mind games, poker at the keep doing it, and keep doing it successfully, you absolutely highest level is a master class in mental gamesmanship. have to keep your head in the game. 22 10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING IN A BOTTLE TWICE AND CREATED HALF A BILLION IN REVENUE

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