According to the StartUp Genome report, the top factor to make an Internet startup successful is:
The video game industry is – paradoxically – very traditional and resistant to change. That's odd when you consider the history of video games and its the first 100% digital industry ever – All content has always been created and consumed on a screen. Yet for years, the business has been about putting this digital content onto plastic disks and cartridges then selling them at retail stores. However these major video game publishers like EA, Sony, Nintendo, Activision, Microsoft and UbiSoft are having a tough time with the "digital transition" not wanting to upset the sacred cow of the powerful few retailers that currently move 90% of their revenues. Now the social games and app businesses roar ahead leaving traditional video game publishers scrambling to answer their moves.
This shouldn't be a suprise – they have seen this coming for over 12 years! An earlier company I founded in 1999, Gigex, was a leader in digital downloads of game demos, trailers and MMOs. We believed that the network would flatten distribution of content across the Internet. We didn't focus on transactions, just getting the content into people's hands. We tracked that distribution data and provided predictive trends that video game publishers used to predict future sales. We tried to sell them cost per click ads (before Google) but they said that was "too complicated" a model and instead wanted a flat rate. They said we had the "wrong" business model – (I guess we were a little early for that one! )
So how can a $20 billion industry built on new technical innovations and 100% digital all the way along be so slow to adapt? I think its wishful thinking that their business is like any consumer packaged goods (CPG) business. Give away the razors and sell the blades. That's been the model of the video game industry for 20 years by subsidizing game consoles and making the money on software sales. Now entrepreneurs have disregarded the "channel" and have gone directly to consumers on the web, mobile platforms and facebook /social networks. This model works differently where Average Revenue per Customer, Daily Active Users, Virality and Monetization are the core metrics. This is a real business that the traditional $20 billion games industry has first ignored then begrudgingly began to accept as a reality.
I believe now the tipping point has arrived. The big game publishers must either innovate or die a slow and humiliating death. Here are 3 things they must do now to avoid the junk heap of history. There will be case studies and books written about this industry and rise of social and mobile game models. There are billions at stake and the smart innovators will win, the slow stodgy razor blade salesmen will be toast.
There is no more important role in any company than the CEO. So much has been written about what it takes to be a leader and there are different kinds of CEOs – big company, start up, technology, services and many more. (You can see an interesting Wharton study of Founding v Professional CEO analysis here) If you are building a company, investing in a business or thinking of hiring (your) CEO replacement, what criteria should be used to see if you have the right person?
Many CEOs are very good and what they do yet many aren't sure how they stack up. According to Starbucks CEO Howard Schultz, many CEOs are in fact a bit insecure that they don't know it all. Several founding CEOs I know have said they couldn't be hired for their job if they applied for it today. That insecurity is a strength if its anchored with humility and vulnerability so they can show their human side. Being the "smartest guy" in the room and know-it-all is a turn off to employees, partners and customers. For vulnerability to work, there must be trust on the team and that is built by candor within the team. My formula for building strength by leveraging vulnerability is – Candor + trust = growing respect.
These are subjective criteria and there is no CEO Olympics. We can measure a variety of outcomes, performance, stock price, M&A success however picking a good CEO is still an art. Silicon Valley VC Andreessen Horowitz partner Ben Horowitz posted their criteria for evaluating CEOs – its a very good read and I suggest checking out the full article – the key questions he raised are:
If you are the CEO and being evaluated from the outside, what can you do to be more effective? Being open, curious and respectful of your people and incoming market information can help you insure your goals are still the best target. If there has been a big market shift, it's your call how to react. A key component in that process is being able to use your vulnerability and ask "what is it I don't know I DON'T know?" (See my earlier post on this topic)
Working with top people to discuss tough decisions is a great way to help CEOs get perspective. An outside director, business adviser or coach is a big help. I found it very useful as the cliche "its lonely at the top" was very accurate for me and other CEOs I know, especially in new technology fields where the rules are being written and rewritten all the time.
I had conversation last week with a client who considering options to solve a pressing management issue. He had spent a lot of time researching and outlined a clear SWOT analysis of the issue. After carefully considering his 2 choices, he decided on his 2nd option.
I asked, "what about option 3 – it's a blend of the 2". He looked at me and thought for a moment and said, "But I only have 2 option." "Really?" I asked. "Option 3 can solve our issue without the risks you outlined in the 2nd option." His realization forced him to reconsider the entire issue and the next day (you guessed it) he went with option 3. This was a clear example of the biggest danger: He didn't know WHAT he didn't know.
I see this often working with management teams and entrepreneurs – they think they have all the options to make a decision. Many times the true danger is what you don't know you don't know A good illustration of this is a post I read today by NY entrepreneur Ben Pieratt, CEO of Svpply, that bravely admitted, "I have no idea what I'm doing." (See his full post here). He said "I enjoy naming products and I think I have a talent for it. I have an understanding of design that extends well past the aesthetic. …But I have zero experience or expertise in building a company"
He recognized that his biggest danger was he didn't have the depth of experience beyond his comfort zone to make the best decisions for the company. Simply, he didn't know he DIDN'T know. Many of us (myself included) have these challenges. I believe a great antidote to the this "idontknow-itis" is expanding your management bench with experienced leaders who will question your assumptions, ask you questions and explore "what-if" scenarios. Clearly, Ben knows enough to build a company that's growing, has attracted outside investors and talent yet there are clearly things he has no experience solving.
Another example is a client who assumed he needed to keep spending $100,000 each month on advertising. I challenged his belief that if he stopped advertising, sales would tank. We tried 1 month of reducing spending just 90% below the previous month's ad budget. The results were amazing – sales declined just 10%. The reworked assumptions saved this client over $1 million in ads that went straight to the bottom line.
The key issue in both these cases is humility. Having the guts and confidence to ask yourself and others for input to guide you the right decision is the hallmark of a leader who places results ahead of ego and will learn by overcoming these lurking unknown unknowns. My advice, ask yourself "what is it I don't know I don't know". The answer can help you be much more successful.
Do you want to know what makes Serial Entrepreneurs tick? See this interesting report and see how you compare http://bit.ly/gM0siC
To all my friends, clients and colleagues, I wish you happiness, health, success and a great 2011. See my message here
Black Friday – the big post-Thanksgiving shopping day defined as the day retailers turn profits , going from the red to the black, and consumer get awesome deals. I was amazed to see the statistics about this day – and to a growing extent – CyberMonday where people plan and execute shopping strategies.
If you think about "Black" being about profits then it's a bit counter intuitive that so many people are so focused on spending money. Consumerism is a major driver of the American economy yet I think we have reached a tipping point. Most of us have a lot of stuff, many of us have too much. Does buying more stuff, even at big discounts, drive our economy? Or is there a better way to get the "Black" back in our economy? The statistics state 50 million people will shop on Black Friday for an average of 4 hours. Many getting up in the wee hours to stand in line for doorbuster deals for cheap TVs, computers and the like. While that's great – (and who doesn't love a smoking deal on a new flatscreen TV?) – the flip side is that we have just blown 200 Million Hours on activities that do not help the economy long term. We have worsened our China trade deficit gorging on cheap consumer goods. I have way too much stuff, way more than I need to live a happy life of abundance. Many of us do but we still waste our most precious resource – time – planning how to buy MORE.
What if that time were spend planning to grow existing businesses, or starting a new small business or getting more efficiency out of a lagging business? What would the return of 200 million hours focused on being profitable return to you and our economy?
My New Black Friday Plan: Make EVERY Friday a Black Friday. I don't mean go out and buy more stuff. I mean create and build on a Black Friday. Create businesses, build opportunities, profits and a future for our society. We have "Follow Friday" on Twitter, why not commit to "Entrepreneurial Black Friday" every week? If we spend 4 hours a week looking to grow, build, improve, start something new, sell more stuff and build we will help us all bootstrap our economy faster. I like this as its not a government program, doesn't cost anything to do and unleashes tremendous economic energy. Let's figure out how to spread this idea and make it happen.
People are the most valuable resource for a business. Many of us who build and run companies have had bad experiences hiring wrong. Many leaders I know have 3 things that emerge often:
1) I wish I had known that person would not perform as we had expected
2) I have wasted a lot of time, money and energy on the wrong people
3) There's got to be a better way to be sure we attract and hire the right people
I work with all my clients to assess their team and be sure current and new candidates share the proper behaviors, values and talents necessary for each company. This process has saved many clients tremendous amounts of time, money and frustration.
Many entrepreneurs dream of selling their companies to a large acquirer; it’s one of the most exciting aspects of building a business from the ground up. I had previously built and sold 2 companies and was negotiating the sale of my third business to TimeWarner, the world’s largest media company. I learned a lot in the 6 month process. Several of my consulting clients have recently begun the acquisition process and it made me think of what we should do to best prepare for the journey. So I put together a top 5 list for them and for you. Looking back, here are five steps that would have made the process easier and more profitable. I hope this insight can help entrepreneurs and growth CEOs prepare for a successful exit.
1. Sell your company before it’s for sale. When it comes to acquisitions, focus is a key element that attracts buyers. When I considered how to best prepare for an exit of our VC-backed company, I adopted a focus that was clear to both our customers and the market. My company, GameDaily, created content and delivered advertisers a mainstream audience interested in video games. I huddled with my senior management team two years before the deal happened and asked, “How can we be laser-focused?” We decided to increase our commitment to the growing mainstream, while our competitors fought over the same over-served core audience. We believed we could be the leader in creating a product for people who liked games and didn't just fit the "young male gamer geek" stereotype. We focused on the audience that today is driving the social games revolution. When the Nintendo Wii became a huge success, our differentiated approach, product and customer-value proposition was a clear winner in stark contrast to our competitors. Five potential acquirers came knocking on our door because of our focus.
2. Upgrade your team. To plan early for the acquisition, we decided to top-grade our team, incenting high performers in the content, tech/programming, client management and sales. I worked with a consultant to assess my team and matched their DISC behavior strengths, values and talents to best suit top performers with optimal roles. ( I now use these assessments with most of my clients) I let go of laggards, promoted or hired the best people, and then trained them on specific skills in my business. Having a top team was a huge benefit for us in the due diligence process, and it made the overall acquisition process easier.
3. Prepare for due diligence BEFORE a deal arises: Many of the items on TimeWarner’s due diligence list were things we hadn’t thought about. We didn’t have audited financials, our programming code was not as well-documented as it could have been, and some of our key operations and sales processes were not written down. We hadn't prepared a neat file of our trademarks, patents and other IP. Rushing these things to get a deal done is stressful and time-consuming. I wish I had instituted an internal due diligence process, along with hiring an experienced business consultant, law firm and CPA at least two years before I went to market. I discovered that this a critical component in substantiating your valuation and asking price.
4. Review your key client contracts: Many large firms calculate the multiples of your business based on predictable future-client contract terms. Many of our deals had “60-day-out” clauses or were month-to-month. This was a big mistake. If all our large client deals had been two-year terms or longer, we would have increased our valuation substantially. I “didn’t know what I didn’t know,” and it was a costly mistake. Looking back, I would have gladly given up a few points on price in our contract negotiations in exchange for longer-term deals, because in an acquisition, the buyer evaluates your long-term sustainable revenue streams when arriving at a valuation.
5. Think of what you want next: When I joined AOL in an executive role in leading the build-out of the GameDaily brand, I knew I’d be there for one or two years and then I’d go onto something new. However, I hadn’t counted on all the meetings I was expected to attend. Conference calls took up almost my entire day. I didn’t have the same flexibility to make quick progress and the environment was a lot more "slow pace" to get things done. After problems arose, I negotiated my role specifics with my boss. That conversation should have happened in detailed specifics before I joined. It would have been better to have clearly been clear and specific about details of my role in advance so everyone was clear from the outset.
The lifecycle of growing a business to the point of acquisition is fun, challenging and exciting. Having a plan in place and people who have done it before greatly increases the chance of success of the best possible deal for the company, its team and investors.
A lot of people ask me what it was like to be VC backed by JPMorganChase Capital Partners, at the time the world's largest VC, to invest.
They ask:
1) Should I get VC money?
2) How much should I go for?
3) What valuation is important and what should I try to retain in ownership?
4) Should I get VC, private equity, angel or other funding?
These are all important questions and when working with entrepreneurs, we spend a lot of time focusing on what the company's goals are so we can choose the best fit for the business and management's goals. I found this presentation which frames a lot of the issues succinctly, and although its a bit over the top with sex inuendos, the content is worthwhile.
I just had the opportunity last week to spend 3 days with many top entrepreneurs in Dallas, TX and the EO Texas Roundup event. It was inspiring to meet so many top notch leaders of diverse businesses. And all had the same theme – business is changing super fast.
My career in Internet media, games and sales has prepared my mind for constant turmoil of change and taught me how to adapt quickly without being "twitchy" or reactionary. This is a skill all businesses need today and the video game business has shown us what's at stake by just wishing things would stay the same. See this telling article about why game sales dropped 26% in April vs the previous month.
The point is here is a high tech and attractive business that still, despite the sexiness of its content, is run the way it was 20 years ago. It is totally reliant on retail. It has given basic lip service to the rapid pace of Internet development in social games and virtual goods. It is trying to embrace it without killing the golden retail goose. This game has been going on for the past 5 years with one eye shut although everyone knows the Internet is the IP generation and distribution platform that will reign. How can a bunch of smart folks still refuse to embrace the next stage business evolution? Please contribute your ideas – I'll have more on that next week! Have a great and profitable week.
Don't get me wrong. I'm not talking about TWSM (time wasting social media) but rather PSM (productive social media). The big must have in that category is LinkedIn. There are lots of ways to leverage your professional network and mine opportunities. I have a very large network of over 1,500 very carefully screened people. If I don't know you, then you are not on my LinkedIn. I am very strict with who qualifies to be in this close professional network and it has paid handsome dividends. When I ask my network for advice or resources, I usually get 10 or more very targeted and accurate suggestions. The list is long of great benefits of LinkedIn.
If you want some good tips, I suggest reading Guy Kawasaki's Ten Ways for Small Business to Use LinkedIn . I'm looking forward to meeting Guy this week as we are both speaking at the EO Global University in Southern California.
Remember, use PSM and dump the TWSM!
Here's a great outtake from a Harvard Business Review article on offensive and defensive strategies. Do you have what it takes to invest and grow in this market? How do you steer the ship with fear all around? Who is there to be your co-pilot? This is when a great business leader, consultant, coach really earns his keep. I suggest buying the article
"What strategies can companies use to survive
a recession so that they’ll thrive
when it ends? A yearlong study suggests
that enterprises that cut costs by focusing
on operating efficiency even as they spend
more than rivals on marketing, R&D, and assets
are likely to be postrecession winners.
Companies that only cut costs heavily
during a downturn don’t flourish after it
ends. Neither do the few businesses that
only invest more than rivals during a recession.
Even companies that were doing well
beforehand don’t retain their momentum—
85% of market leaders get dislodged
during a recession.
Cutting costs while making investments
isn’t easy. CEOs must be disciplined about
costs and learn to spot investment opportunities
that offer reliable returns in reasonable
payback periods. If they get the mix
right, it helps them tackle short-run problems
and create a successful medium-term
strategy."
I read a very cool article from Inc Magazine about how overcommunication can waste time and productivity This idea runs counter to the the conventional wisdom from "collaborative" businesses, especially start ups and tech businesses.
From my experience at AOL, I was scheduled on so many calls where everyone wanted each person to feel involved and part of the process that work didn't get done. it felt like elementary school when people were busy web surfing, IMing, checking their stocks etc. You could tell when people unmuted and felt lost when they were asked a question. Finally I told my boss that I REFUSED to participate in this silliness that was meant to make the lower level people feel important.
This was a summary of our conversation:
MF: "You bought my company to grow AOL's business, right?
AOL Boss: "Yes, you guys are key to our success in the growing games and entertainment ad market."
MF: "Great. I am very committed to deliver maximum value to the company and it's hard for me to any productive work when I'm on calls about a host of topics not relevant to us growing our business"
AOL Boss: "OK, what do you suggest?"
MF: "I will be on our weekly report call and the call with your boss. If ever you need me, just ping me on AIM (AOLs instant messenger that the whole company was always on) and I'll hop on the call. Does that sound like a good solution?
AOL Boss: "Yes, sounds good?"
Bottom line, I was able to focus on building our business that was important for GameDaily's position in AOL and our legacy.
Cross-functional or Dysfunctional? On every project, one person should be in charge of the flow of communication. You want the decision-making process to look like Figure A — not Figure B.
It was my first seminar presentation talk of 2010. I was curious. What would be the mood and perspective of 60 CEOs in the room following the economic brutality of 2009? My seminar “Breakthrough: Taking Your Business to the Major Leagues” is a hands on goal setting and business building seminar focused on increasing company performance to major league levels.
As we began our first exercise of reviewing the CEOs’ top goals, I prepared myself for brutality assuming there would be lots of downsizing, layoffs, closures and general doom and gloom. I was totally wrong.
Here were some of their goals:
1) Increasing sales 200%
2) Starting a new tech business spun out from a major company
3) Building a new division with new staff
4) Ramping revenues and profits 300% from an acquisition
5) Trying to find enough talented staff to grow fast enough
6) Taking a staid professional services firm into a new business model and taking on the big guys with a 50% revenue growth target.
It was amazing – the optimism, the eagerness to engage and take the beachhead unabashed by the general media doom and gloom. There was no mention of government bailouts, subsidies or stimulus to make their businesses run. They supercharged with the passion of building something great that made sense.
One CEO, realizing his current business was increasingly commoditized and unfulfilling, had created a new product in a new category and went from idea to shipped product in 6 months. He had a transition plan to ditch the old loser model and ramp up the new one. Another CEO had a banner year in a tech business was looking for ways to manage the hyper growth effectively. A third CEO was growing his professional services business while his large national competitors were downsizing.
What was going on here? As the evening progressed, we focused on uncovering strengths of many of the businesses. We reviewed strategies and tactics how to boost their sales by adopting a different perspective to their market and their clients. We dug deep into their hidden content strengths, unlocking additional opportunities leveraging the Internet as their engine of growth. When the presentation was over, about 30% of the room huddled around tables discussing their passion, swapping take aways, tips and helpful input for each other. The entrepreneurs’ engines had been refueled and at 9pm they were hard at work building, creating, planning to breakthrough bigger and badder in 2010.
I relished in the post seminar discussion, as they pondered improved approaches to what they could do to build their success. They were in control. They didn’t get the doom and gloom memo from Washington, DC. They were busy planning to execute and build faster, more efficient and better. I heard the Commerce Secretary Locke at the Inc500 conference in Washington last year announce a new government office of “Entrepreneurship and Innovation.” I haven’t seen anything this Orwellian-named bureaucracy has done for any of the people I met last night. Instead, Washington can do more now – like waiving payroll taxes for every new employee hired in the next 6 months. That would show they get it and support the unique American entrepreneur growth engine.
The power of growth is in the hands of the entrepreneur who lives for achieving what matters to him or her. This is the power that will drive the business cycle upswing. So please support an entrepreneur as they build again and we will all see the benefits. I hope YOU have a great 2010!
The new decade is here – what is it you want to achieve for your business and yourself? As I discuss in my seminars, it's all about being clear on your top 3 goals and your mission. Getting ready to play in the major leagues. Of the tens of thousands of players who play elite university/colleage baseball, only 5,200 make it to the minor league system and only 750 of them make it to the Major Leagues. The difference is so small at this level of play – a minor leaguer can hit an 85 MPH fastball consistently but a major leaguer can handle the 90+MPH pitches. What does it take for YOU to play in the Major Leagues of your business? Many of my clients have felt tired, burnt out or uninspired after 2009 which was a brutal year for many people. However the downturn gave us an opportunity to cleanse ourselves of baggage, waste, fat and excuses and focus on what we really want for ourselves and our businesses. I enjoyed this Business Week article titled "Why Victims Can't Invent Anything" by Michael Maddock – the point is that when the going gets tough, the tough kick some ass and get creative. Bottom line, according to Maddock, is that if you complain about anything, you are playing the victim. Forget the complaints – look forward and map the vision of your dreams that will translate into actionable goals. I agree and I have seen with my clients (and even with myself) how fear can be a paralysis of the spirit of innovation. I am not suggesting you just charge ahead, damn the torpedos style, ignore risk and plunge head first. That would be reckless. Rather consider why it is you are doing what you are doing. Where does the passion meet the execution of your work? This Hedgehog (Jim Collins) , BHAG (Verne Harnish) or your "Why" (Simon Sinek) . I have worked with many entrepreneurs helping them set their top 3 goals. It's a fun process that clarifies the steps we need to take to execute on the bigger goals (I call these the "1 Foot Hurdles"). However when combined with the clear sense of purpose that the goals are propelling you towards the fulfillment of your business and/or personal fulfillment, this process takes on a deeper, more rewarding role in defining where we you want to end up and for what reasons. The outcome is greater commitment to achieving your goals. I wish you success in your endeavors to achieve your goals in 2010 and beyond!
I was speaking with a CEO today who is considering merging or selling his business. I spent some time asking him why he wanted to sell and what he wanted his life to look like on the other side of the deal. It was an interesting conversation. I told him about my experience selling GameDaily to Time Warner /AOL and the 3 near death make that 4 near death experiences we had getting the deal done.
I met Norm Brodsky at the Inc500 conference in DC this past September and he had a bunch of stories to tell. He’s the “Street Smarts” columnist for Inc Magazine and he has put together a succinct story about the bumps of an acquisition in this article about The Rule of 3.
My experience doing a deal with the world’s largest media company Time Warner, was at the same time exciting, heart stopping, frustrating, challenging and an awesome learning experience. We had hired a hot shot New York investment bank to help us on a previous deal (which, by the way, they botched and we dismissed them) and I had promised myself that if I ever were going to sell my business, I’d do it alone or not at all. The good thing about our fired banker was he gave me the story of the “3 near death experiences” that every deal goes through.
At the outset, I did not believe him but as we went through due diligence, further digging, questions, answers, haggling about silly details I saw that if the deal ONLY had 3 near death experiences then it would be quite expeditious. He assured me that no matter what, I shouldn’t loose my cool or take any of the process personally. (At the end, he didn’t follow his own rules)
A year later when the AOL deal started happening I planned to do the deal with my controller and my lawyer. We didn’t realize we’d face Time Warner biz dev and finance teams, AOL biz dev and finance teams, internal and external counsel (that means lots of legal bills for you, the seller), tech teams, pages of tech, finance and operational due diligence, org charts, integration plans, PRDs, migration plans, functional maps, matrix planning…. well, you get my point.
Any one of a number of things could have derailed our deal. We had disagreements about whether we’d keep our offices or move into AOL’s San Francisco offices (it took an audit of our lease, discussion with their facilities team in VA, and countless emails to figure that out), who would stay and who would go, if and when they would get offers and what would the terms, titles and comp look like.
Some person on the tech due diligence team (who we never met or heard from again) claimed our company’s product of 5 years earlier had been on a “Spyware blacklist” – we had used Microsoft’s ActiveX back then – like most companies – and EVERYONE who used it was on that list! A gunslinger with happy key fingers (these days nicely known as a blogger) kept the deal held up and forced us to restructure our legal deal to give more “protection” against the (non-existent) issue of a Spyware laden past. Cost of this exercise in stupidity? An extra $50,000 in legal fees.
I could write an entire book about this deal. In fact our deal docs were as big as the Manhattan Yellow Pages and I guess if you spend $300,000 on legal to get a deal done, you pay by the pound – I’d rather have blocks of gold for that money but so is the process.
These answers are vital to planning your deal properly, executing the proper plan to get you, your employees and shareholders across the finish line to somewhere you all want to be. I’ll probably do a follow up on this either as a newsletter post or webinar in December.
At the end of the “6 month colonoscopy” that was our sale process, we closed the deal. We did it without bankers, without providing audited financials, without alot of excess internal baggage (just a huge legal bill). Bottom line is we got a huge deal done – we were just one of 4 acquisitions for 2006 and given the time, effort, teams and resources TWX put in the deal its easy to understand why so few acquisitions actually make it over the finish line and happen
I ask my clients and people who come to my talks to ask themselves;
Wife of entrepreneur Stonyfield Farm’s Gary Hirshberg chimes in on the “Bond girl” with whom she must compete for attention. How did it go? How far would she let the “other woman” invade? Funny yet scary. My wife got a laugh out of it yet recognized many of the same traits with my Blackberry usage. I’m working on curing that addiction! See the article here
Many of my clients have asked me for resources and ideas of how to (quickly and cheaply) create their own custom products to sell. For a while, it’s been a tricky process with widely varying results. Now there are at least 15 companies that do a good job helping you create and sell your custom product. Check out the list here.
Great ideas are everywhere. As I said in previous posts, true results flow from execution. If your ideas are great and you fail to execute then you have wasted time and effort. Here are some fairly basic (my term I coined here) “1 foot hurdles” you can copy and execute Good luck! Mark
Focus, focus, focus. How many times have you heard that mantra? Well if you are a CEO, its mission critical to your success. As an entrepreneur who has built 3 businesses and been an executive in 2 large corporations I have seen what LACK of focus brings – utter chaos, missed goals and often failure.
What do President Barack Obama to CEOs of Pfizer, ConAgra and GE in common? They hone their agendas to keep on message. This is a great article from the Harvard Business Review
I have advised several of my CEO clients that REDUCING things you do will sharpen your focus. Find the top 3 goals, write them down then make a plan to stay accountable. (Hint: that’s where the coach is very valuable) I am happy to work on that with you – that is if you can just put down the iPhone or Blackberry first!
I get asked a lot if there is a secret of how to hire great people. The answer is YES and there are many secrets that need to work together. Here is my short list.
1) Have a clear vision of who YOUR company is. Suprisingly many CEOs don’t have or articulate a clear vision and purpose. Make sure your “Why” you do what you do is crystal clear and is reflected in your culture.
2) Define what YOU want – what specifically will this person do? “He’s our new biz dev guy” doesn’t cut it. Write it down – make a SHORT job spec. What are the TOP 3 things you want? Don’t clutter with all sorts of details that fills 2 pages. If you can’t laser focus on the top 3, your new hire won’t either!
3) Outline a hiring process you will follow religiously – outbound (looking yourself or with a recruiter), drive inbound leads – targeted ads, LinkedIn posts, professional networks, refining candidate leads, managing your interview process to a consistent, repeatable process. Whatever you do, make it 100% standard for both candidate comparison and liability protection. I recommend checking out Bradford Smart’s Top Grading Hiring tips
3) Be very specific of the outcomes and results you want. Make an objective list of what you want and by when. A top person will do the rest and make the plan to get you there.
4) Test, Assess and evaluate. I am a HUGE fan of DISC and values assessments to understand what makes the person tick. I have used them in my businesses and they deliver great insights on who the person really is and what makes them tick. I offer them to all my clients and I urge you to make this a mandatory part of your process. You can Contact me if you want to offer them as part of your hiring process.
5) Never hire because “you like them” – Here’s a great post from Seth Godin about killing the initial hour interview for just a 5 minute interview You will see a lot more people and then can take the top folks and go the next stage.
6) Have a clear consulting or employment agreement that you refer to in your offer letter. Review it in person and make sure your new hire signs BEFORE they start doing any work for you. MAKE SURE you have a “winner prevails” clause in case of litigation so if you ever get sued for weak grounds, the loser pays both sides’ legal fees. This is an effective deterrent to frivolous lawsuits.
7) Have your new hire’s desk, cards, phone and everything else ready for their first day. Throw a “welcome to the team” party for them. I always offered to have them have a celebration dinner on me – invite your friend, spouse, housemate or whoever and bring me the bill.
Have fun, celebrate the wins and hold your new person accountable to your initial top 3 goals.
With all the clutter on Internet marketing, SEO, SEM, CPA, CPL, optimization, ad serving, ad networks, ad exchanges – where is a CEO to start?
I was focused on growing our business at GameDaily by driving inbound traffic, page depth and engagement. The end results was simple – Focus on your Internet marketing RESULTS and understand click streams
As entrepreneurs and business people, we constantly are looking for faster, more effective ways to do things we need done – quickly. A big “thank you” to my friend Ron Merrill (Follow him on Twitter @ronmerrill) for showing me these 2 great free tools (premium versions are available for a small cost).
Most business people I know want to put up a good website quickly and without involving designers and programmers. Hey, that’s why my site is on WordPress (though I used a great designer Jen Hartford for my look and identity) Check out Moonfruit – SUPER easy to use and great results from my non-techy friends. This the drag and drop tool we’ve been promised since FrontPage that actually works!
Everyone wants a cool presentation. Most of us are sick to death of Powerpoints and wish we could do cool video trailers to make our points. Now you can with Animoto – super slick, easy to use.
Both these tools will help you get stuff done, fast and cheap!
50% of execs surveye think its wierd to “friend” a direct report or a boss. See the numbers here
The downturn is tough, no doubt. Certain sectors, such as tech, are doing better than others and the innovations in efficiency from Internet-based services, technology and good management are great building blocks to build your company’s success while most everyone else is on defense. Click here for a few ideas
I saw this nice resource in Inc.com and thought it might be helpful for you http://www.inc.com/ss/10-free-or-cheap-tools-start-ups
I got this (uneditted) email from an ATT employee who was selling his IPhone to get a Blackberry Bold. My Blackberry Curve died so I wanted to get one or the other. This is one man’s opinion for what it’s worth. You decide what’s best for you. I’ll let you guess what my decision was…
“Well debating on getting on iphone over blackberry bold is a difficult decision im not going to lie. The iphone is a great device for media, as far as music, games, and all the applications that it has…If your looking more for using the phone for business then the blackberry bold is definatley the way too go. If you have already had the experience of sending and receiving mail through push services on your curve then you will understand why blackberry in general has the best emailing capabilities. The blackberry bold now has added the abilities to see the whole email rather then just the text of the email. So any background images or javascipts in your emails can now be viewed. I personally found it difficult to switching to a touch screen keyboard. I have a ton of typos and I used to be able to send a text message or send out my email in a matter of minutes on my Bold. With my iphone it takes twice the amount of time. Also the fact that you cannot send or receive picture messages or video messaging on the iphone is a huge downfall. That is a big capability that is required on most my customers phones. Also battery life stinks on the iphone. On my bold i got about a day and a half on battery and on my iphne i start the day with a full charge and i am already putting the phone on charge again later on in the day. Basically the BB bold does everything the iphone can do plus a few more features that the iphone lacks. I gauruntee if your anything like me if u get the iphone you will miss your blackberry terribly”
So didn’t they learn when they redesigned Tropicana and sales tanked by 20%? According to the Wall Street Journal they did it again with Gatorade, messing with atop brand that is cranking along like a supertanker. Its hard to create a brand, even harder a good brand and very tough to create a super brand. What’s wrong with these CEOs – do they not count their blessing every day for having superstars in their line ups? They should leave it alone and not bet the farm – Pepsi has done this atwice and sales tanked. If I were on the board, I’d be asking for the SVP Marketing and CEOs heads.
Below is a start up cautionary tale and a reality check. I received this message today from a start up I had advised on a few ocassions over the past 4 years. I shared input, contacts and was an “advisor” in exchange for some common stock. We only met a few times and I spoke with them last summer as they had redone their focus one more time. (NOTE: I have edited the email and removed all names, references and firms to make this a generic message to protect the principals’ privacy and confidentiality)
I am posting it here to illustrate a few things:
1) These guys had a clear vision, were smart and seasoned
2) They picked a hot, growth industry at the a time of expansion in the business
3) They worked tirelessly to improve the product while working land clients and close venture financing.
Was it the product, timing, management, general economic fear in the market? Who knows. I do know these are smart, dedicated guys who gave it their all for over 4 years. Reinvented, reorganized, tried new stuff yet finally, without traction, they pulled the plug with large personal losses.
Failure makes us stronger, teaches us and makes us aware. My coaching clients are CEOs who have made mistakes and we use our collective wisdom and experiences to temper our next mistakes, make them as benign as possible and help us avoid a cascade of small failures that ultimately end in the big one like you see below.
The path to success is often long and twisty with precipices as steep as a twisty mountain road. Being an entrepreneur is not for the faint of heart. Good luck to you guys A*** and J*** – I wish you well on whatever comes next.
Dear Mark,
We hope that your company has been successful, and is keeping you busy.
After the last couple years of heart-breaking, near-misses with some great authors and corporations, we have decided to close our company. While we still believe in the eventual success of video game technology based solutions in corporations, we overestimated the decision power and risk tolerance of our chosen target market. By the time we changed our strategy early last year, it was already difficult to raise funds for an off-the-shelf product, which we believed was one of the keys to fully open the corporate door.
Despite the personal financial impact, we did very much enjoy the innovative experience, and gained some scars which will enrich our future.
At this time, J**** has taken a senior position at a management consultancy that is both moving to assist clients with strategic business issues.
A**** is turning out the lights at our company, and is in pursuit of his next adventure that could land him anywhere from green/clean/solar tech startups, to management consulting, even to a stable position at a traditional firm.
Mark, we want to thank you for all your help throughout the years; your thoughts, guidance and introductions enriched our work and prospects for success. We especially thank you for the early introductions which helped us to formulate our initial plans. If there is anyway we could help you in the future, please do not hesitate to ask.
All the best!
A**** and J****
Sick of working at your job, want to join a start up? Want to start your own?
Here are some good questions Guy Kawasaki asks you to consider before taking the jump. Please READ THIS!
This NY Times blog is a good lesson for entrepreneurs to pay attention to the details of their businesses, don’t get deluded by how things appear and never let your business pull you under. This is a sad story however I’m sure there are many more like it. This is a great example of why it pays to have a coach to help you “keep it real” and avoid the pitfalls of not watching the business since you have been too busy working in the business and not on it.
A Big Leadership Lesson from Lance -
Team Astana puts in an amazing performance at the Tour de France stage 4, riding a perfect team time trial, beating the world’s best riders to win the stage. Not bad for a 37 year old, dad of 3 doing a comeback. They won because the team all worked together. A great metaphor for all our businesses! See this
More Info and Links To Help You Grow Your Bottom Line in 60 Days:
What Are Your Top 3 Goals This Year? – Without clear goals, its hard to achieve as you don’t know where you are headed. There are many ways to get there. I like writing your top 3. Research shows if you DON’T write them down, odds of achieving them drops 80%. Write them down NOW!
Tool #1 - Sell more! Here are some good resources
How to sell more during the meltdown
Tips to Sell more online
More online tips, how Customers Help You Sell More
Tool #2 – Open New Relationships – Who could really benefit from your product or service? Write down 10 possible relationships that can directly be a customer or indirectly bring you customers.
Tool #3 – Reduce Costs, NOW! This list of 51 Cost Cutting tips is 15 years old yet still very relevant.
Tool #4 – Increase your marketing budget – How much should you spend? Here are some examples and ratios
I’m a bit biased towards the Internet given my background however I think there are huge opportunities to use social media to profile yourself, company and solutions to the market for free.
1) Check out Twitter. If you don’t know about it see this get started NYT article Once you’re on board you may want a tool to manage your activities. TweetSum is good as is Tweetdeck
Check out this SlideShare Presentation:
2) Grow your social media database and network
3) Repurpose your aticles, info and opinions. Here’s how to do it.
Tool #5 – Get FREE publicity. Why? It makes you an expert, gives you and your product credibility, gets you leverage to speak at trade events (see Tool #6), oh yeh, and its FREE!! Here are some examples of how a simple product – a family guide for video games – got 2 primetime TV spots on NBC.
What does free publicity look like? Check these out:
NBC11 San Francisco Bay Area Morning Show Interview With Laura Garcia Cannon
Interview with Silicon Valley Business’ Brian Banmiller
Tool #6 – Attend an industry conference or trade show. Go find one now. Enough said.
Tool #7 - Upsell Your Customers and see what KISS’ Gene Simmons says about a being a rockstar and an entrepreneur
Tool #8 - Offer free tips, how to’s and newsletters to your audience. It can make money. A client built his entire lead generation business on this free education guide and its bringing in customers at an amazing pace. At GameDaily, we offered a free survey of gamers’ habits as an abstract and our partner, a polling company, sold the complete survey. It was a win-win for both of us, got us attention, credibility and a non-sales item for our sales team to discuss with clients.
Tool #9 - How do you get great sales people? You grow and train them. Everyone needs training and coaching – even Tiger Woods does – and he has 3 coaches! . Your team WILL benefit.
I like these guys:
1) Jack Daly – frequent EO speaker
2) Hutwaithe – the folks behind Spin Selling
3) Our SF EO colleague Tom Batchelder’s firm Perficency
4) Jim Collins – The man behind “Good to Great.” One of the top management gurus. This is a good diagnostics tool that’s free to print out.
5) Marcus Buckingham – I really like Discover Your Strengths. We did that program while I was at AOL and it was great.
Tool #10 - Get Healthy! Big take away, diet matters. The wrong stuff gets you sick, the right stuff makes you clear, focused and healthy. A great health, diet and information resource in one place I personally like Dr Mark Hyman’s books especially UltraMetabolism and the companion cookbook.
Family time is a HUGE benefit for you and your loved ones. TURN OFF the Blackberry, close the laptop and BECOME Present. If you haven’t read it, I strongly suggest The Power of Now. It helps us all, especially entrepreneurs, get some perspective and literally smell the roses.
It’s no secret that times are tough and the economy’s problems are impacting many industries. We have been blessed to be part of the high growth games industry and specifically the online games industry that has seen explosive growth. But if things are so good in our industry, why are studios closing, publishers losing money and people getting laid off? What can you do to make sure your company makes it? The climate has changed, things are tougher and now more than ever there are opportunities for you to win big.
Its tough out there and you can do it. Here are some reflections on the changing business climate and a few ideas and steps you can implement at your company today to help you succeed.
In conclusion, sure the climate has changed. That gives us more opportunities to be creative. We’ll need to be better, faster and more valuable to our customers. We are part of an innovative fun industry with unlimited growth potential. If we stay focused on our passion and think about why we love inventing new things, pushing the envelope and creating new ways to entertain the world we can deal even with the biggest challenges. That passion combined with a realistic plan should help us weather the new climate and position ourselves to level up to meet the coming challenges.
Mark has founded and sold 3 companies including VCast (to Verizon Wireless), GameDaily (to AOL) and Sweden’s first chain of cookie stores. He is a partner in Worlds and Games LLC and is coaching CEOs and top executives on growing successful businesses. He is a frequently invited speaker and panelist on entertainment, games and business topics at industry events including AdTech, OMMA, CES, E3, IMedia, Digital Hollywood, Digital Media Wire, EMA, MI6, Tech Council of So Cal, Game Supply Academy and other events. He lives with his wife and 2 boys in the Bay Area and can be reached at markfriedler@gmail.com
By far, the best 4 hours I have spent on my business this year - Ron Merrill, C&M Moving, EO Houston
The experiences you’ve shared and introductions you’ve made are making a positive difference in our growing business. You’re helping me build credibility with the people most critical to the success of our business. -David Beerman, CEO Mobywrap, Inc.
In our coaching meetings, Mark was able to break through my ‘entrepreneurial overload’ and provide much needed direction, perspective, and a clear action plan. I highly recommend Mark to anyone looking for a business coach. – Erik Huber, 613 Capital Management
Mark’s experience, and the advice he has given have been invaluable to our business. He helps keep me focused and accountable which has made a big difference!
- Michael Levine, CEO PlanetCazmo.com
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