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Saturday, January 06, 2018

Venture Capital 2018

Oh Venture Capital, you evil mistress of every startup founder or executive. Your song is so sweet but sting can be deadly if handled without care. So the question for 2018 is where will the big boys be placing there chips in 2018? Where will the promise of being the next Unicorn be told?
Here is my take on the VC outlook in 2018 as I see it.
One thing is certain, the supply of capital is still plentiful. The record-high fundraising activity of the past 19 months has been driving the growing amount deals. One differential, and I believe it to be a good thing, is that valuation as a discipline has returned as seen in the total investments as to raised by VC's themselves. The investment thesis has shifted from “growth at all costs” to “growth with fundamentals.” 

Sunday, December 10, 2017

Leadership Behaviors Drive Continuous Innovation

  1. Avoid the assumption that current gifts will keep on giving. This is a trap of the past to be avoided at all costs. The best leaders selectively forget the past, and are constantly on the lookout for the future’s raw material of new ideas. They overtly set out to create the future as a mission distinctly separate from their performance engine of today.
  2. Be alert to “weak signals” of non-linear shifts and trends. To do this, leaders must eliminate the noise of obsolete ideas and activities, by creating protective structures, including dedicated teams focused on innovation. They need to regularly listen to a few mavericks and outsiders who routinely generate nonlinear ideas and trends.
  3. Create the future as a day-to-day business process. The future needs to be treated as today by a team and a process that is insulated from interference, but empowered to draw on necessary performance engine resources. The trick is not to sweep everything aside, but to balance relevant aspects of now while making room for what is new.
  4. Sponsor experiments and measure like new investments. Experiments on today’s revenue engine necessarily focus on short-term financial goals. Experiments on future ideas should be measured like investments, and judged on longer-term potential, allowed to iterate, and focused on learning and adapting quickly. Both are always recommended.
  5. Constantly build new skills to be resilient in the face of change. Ensure your firm’s fitness to act on new opportunities, and develop an evolving sense of where the future lies. A business that relies on static skill replacement is falling behind, and ripe for the next competitive crisis. Build a process also for divesting those who have lost their value.
  6. Invest more energy in the “horse you can control.” Most executives admit to spending huge amounts of time and energy on issues they can’t control, including the economy, regulatory changes, and competitor moves. The best leaders spend more time on their own processes, skills, and hard decisions on what to keep and what to divest.

Is Your Advisor a Critic Posing as a Mentor?

Every startup needs a couple of advisors with deep experience and connections in your business domain or financial skills to complement your technical focus. Advisors need to be mentors, looking ahead and directing you on key actions to take or avoid. Unfortunately, many prefer the role of critic, looking backward to highlight your mistakes. These people don’t help you or your startup.
The same considerations apply to every constituent inside and outside your team, including co-founders, investors, strategic partners and every team member. Here are some clues that will help you see and attract the best advisors, as well as the right team members:
  1. Is there a sense of trust and mutual respect? The most productive business relationships are built on trust and respect, where both parties have the other’s interest at heart. The results are win-win relationships. Mentors have no interest in win-lose relationships.
  2. Do advisor credentials include practical experience in the domain? Critics tend to rely on anecdotal or academic evidence to support their position, as opposed to a mentor’s insider perspective based on years of practical experience. Good mentors don’t talk in terms of right or wrong, but in terms of best practices and elements of risk.
  3. How effective are the advisor's communication skills? You need advisors that are effective and unemotional direct communicators, face to face, over the phone or via email. Beware of people who are prone to emotional outbursts, pick public forums for their discussions and hope to influence you through messages to friends and cohorts.
  4. Do advisor ethics match your own expectations and culture? You will not be well served by an advisor whose ethical rules do not match your business area or government rules. In ethics, one size does not fit all, particularly in international business roles and cultures. Questionable ethics are not a risk any entrepreneur can afford.
  5. Can you visualize a long-term relationship with this advisor? Advisors that are good mentors often lead to career-long relationships and friendships, such as the one between Bill Gates and Warren Buffett. An advisor’s value goes up over time as they better relate to both you and the business. Would you nurture a long-term relationships with your critics?
Nevertheless, you don’t always get to pick all your advisors, and we all have to anticipate some critics. Every entrepreneur needs to improve how they deal with critics to make their lives less stressful and more satisfying. Here are some recommendations that work, but all take self-discipline to implement:
  • Do not take every criticism personally. All critical comments are not meant to reflect on your personal character. If you take every criticism as a personal attack, and react defensively, even the best-intentioned advisor or mentor will stop providing you the feedback and recommendations you need to improve your skills and your business.
  • Be an equal-opportunity listener. It’s a natural human reaction to discount even good recommendations if they come from someone you don’t know well, is in a different age bracket or a non-native culture. Smart entrepreneurs learn to evaluate the content of the communication independently of the speaker.
  • Practice the pregnant pause before responding. Pushing to reply immediately prevents comprehension or even hearing any advice or feedback. Think before you respond, and always answer with a reiteration of the points of agreement, before answering any points of criticism.
  • Always respond with a smile and calm sincerity. Responding with anger and emotion leads to a confrontation. A smile projects confidence and a calm resolve to listen. The smile is contagious, and helps to put all parties at ease during serious and potentially volatile critiques. Your critic may actually see your perspective and become a supporter.

8 Key Ingredients to a Profitable Consulting Business

  1. Implement real competitive differentiation. If your business card and website come across as just another advisor, consultant, or accountant, then don’t be surprised if price is the only focus. Internally, you also need to do things differently to rise above your peers. This includes how you find leads, close clients, and minimize free work or rework.
  2. Shape your business by design, not by default. Announcing that you are a consultant, and hoping demand will set your focus, is not a good strategy. Focus on your passion and your vision of what you want to accomplish, and make that come alive in the design and delivery of everything you do. Picking a niche is another good way to focus.
  3. Proactively build relationships with target clients. Passively waiting for transactions only makes you a commodity. Clients need to see you as a trusted value add, rather than just a service provider. Use your knowledge of evolving needs and technology to add more value than competitors, and introduce clients to each other to build partnerships.
  4. Use visibility and social media to pull clients in. The days of a hardworking introvert hiding in the back room are gone. In addition to relationships, today’s clients want to see you and your expertise on videos online, industry conferences, and social media to feel the trust for differentiation. They expect reviews and testimonials from other clients.
  5. Set pricing to assure both revenue and profit. Unless you have deep pockets, you won’t survive without an adequate margin, including all the costs of running a business and staying current with technologies and market changes. Flexible business models, including value-based pricing, bundling, and custom proposals are the places to begin.
  6. Be targeted in marketing and lead generation. Just like product marketing, professional services requires a clear profile and demographics of your ideal client. To check your return on marketing investment, you need to define metrics and a formal process to evaluate progress and cost tradeoffs. Don’t forget seminars and events.
  7. Raise the conversion rate with effective follow-up. Successful professionals today know they can’t work only from memory. They use customer relationship management systems (CRM) for more effective tracking and data. They match individual customer preferences, whether it be voice, email, texting, or social media, to close deals.
  8. Maximize repeat business with existing clients. Just as with product marketing, it can cost five times as much to attract a new customer, compared to getting more business from current ones. It pays big dividends to make realistic promises and over-deliver the first time, and then follow-up to check for follow-on opportunities every three months.

7 Rules For Turning Business Conflicts Into Win-Win

  1. Know what type of conflict you are in. The first step is to assess whether the conflict is win-lose, win-win, or mixed (some competing and some shared goals). Each of the three types requires different strategies and tactics. Learning how to identify and respond to each type is central to success. Try a good business mentor to get you on the right track.
  2. Not all conflicts are bad. Most often, conflicts present us with opportunities to solve problems and bring about necessary changes, to learn more about ourselves and the business, and to innovate – to go beyond what we already know and do. Avoid the ones that are irrelevant to your startup, but don’t hesitate to engage in the others.
  3. Whenever possible, cooperate. Research has consistently shown that more collaborative approaches to resolving win-win or mixed-motive disputes (the majority of conflicts) work best. Therefore you should always approach conflicts with others as mutually shared problems to be solved together.
  4. Be flexible. Try to distinguish your position in a conflict (“I need a raise”) from your underlying needs and interests in the relationship (“I want more respect for my contribution”). Your initial position may severely limit your options. Creativity and openness to exploration are essential to constructive solutions.
  5. Do not personalize. Try to keep the problem separate from the person when in conflict (do not make them the problem). When conflicts become personal, the rules change, the stakes get higher, emotions spike, and the conflict can quickly become unmanageable.
  6. Meet face-to-face and listen carefully. Meet in a neutral location, and work hard to listen to the other side in a conflict. Accurate information is critical, and careful listening communicates respect. This alone will move the conflict in a more friendly and constructive direction. Don’t mistake sending text messages and emails as listening.
  7. Be fair, firm, and friendly. Research shows that the process of how conflicts are handled in usually more important than the outcomes of conflicts. Always attempt to be reasonable, respectful and persistent, but do not cave in. Find a way to make sure your needs are met.
Applied correctly, these methods can move most business conflicts in a positive and satisfying direction. But Coleman asserts that there are five percent that will always be “intractable.” These usually involve issues that won’t ever be resolved in the workplace, and should be avoided, like politics, religion, personal enmity, and cultural biases. Your best bet on these is not to engage.

Friday, December 01, 2017

BitCoin, Bubbles & Wisdom

I have been through two bubbles: 2000 and 2008. The first one knocked me down. The second; knocked me out. With decades of knowledge accumulated I finally found the true meaning of wisdom while curled in the fetal position on the floor after after the government took over AIG and diluted the stock to $2 from $30 the previous close. I had everything in AIG because the Chairman of the Board and Bill Gates came out saying the company was fiscally sound and after all it was the biggest Insurance company in the world. What could possibly happen? I did my due diligence, macro environment analysis and technical chart studies, but like life one sometimes needs to peel the onion a little more. I found that knowledge alone is not always enough. There is something profoundly mystical about the intelligence learned from experience. Hence:
Knowledge + Experience = Wisdom
So, here we are in 2017. I see the charts and believe me I can dissect charts like you wouldn't believe. I hear the rumblings. I see the FOMO (Fear Of Missing Out).
Different vehicle, different time, but same road.
Having gone through two bubble times, and we are in one I assure you, I see the similarities and the uncertain "X" factor that makes "this" time unique. Same as the "X" factor during the Internet Bubble, Financial crisis, heck the Mississippi Company in 1719. "X" made "those" times unique. This "X" factor is what drives bubbles. The exciting uncertainty of something so new, so revolutionary no one could begin to understand "its" impact on the world forever.
Sound familiar? The Internet, Mortgage Backed Securities and Collateralized Debt Obligations, or a 'New World' monopoly trading company. These things were new, revolutionary and certainly did change the world forever. But whether technology or complex financial instruments, there will still be a massive emotional surge near the end (FOMO) of the bubble before markets consolidate, years later normalized, people are able to get in at respectable valuations and finally about 10yrs later all will be forgotten and the new "X" will take hold.
Today we still have the Internet and it has changed the world forever. Today we have those financial instruments with different names that changed financing, regulations and so many lives. Today we have the opportunity of two recent Boom times to look back upon. Today we have the ability to choose wisdom based on those recent past experiences and our knowledge of the changing world around us.
The reason why I haven't called Bitcoin itself a bubble as so many have is I believe there is value in alternatives to fiat currencies that are being incessantly debased. We are in emergency times. Global debt is up nearly $100 trillion since 2007 and there are scores of new bubbles everywhere now. But like all times, only one name gets called to attention and becomes the Brand name for this time in the future.
History shows us nothing in the market goes up straight forever. History has also shown that the dangerous thinking in these times is "this time is different." "X" is "X" no matter what time period and one's belief will not change that. So I urge people to use not only knowledge of what the future can bring but also the lessons of the past to navigate these VERY easy money making times because it won't last forever and it will consolidate at some point. No one knows when but one thing I learned is that emotions were my worst enemies at times like these. Who doesn't love seeing the $'s grow and grow without having to do anything. It's human nature. It's beyond exhilarating. Believe me I know. Just take my and other's experience and apply it to what you know and have hopefully gained monetarily to come out ahead when we return to normal. I'm rooting for everyone and not just for the person but some many macro economic reasons too. No one likes to see the pain of others but unfortunately their will be one's in pain when the dust settles back into normalcy.

Tuesday, November 21, 2017

8 Insights For Millennials To Excel As Entrepreneurs


Monday, November 20, 2017

8 Keys To Providing Consulting Services To Startups

    8 Keys To Providing Consulting Services To Startups


    Friday, March 19, 2010

    New Site, WWW.MikeWagnerOnline.com

    Title pretty much tells the story. Although I haven't been blogging much, I'll likely be focusing my attention to www.mikewagneronline.com where you can find more bio & contact info on me.

    Saturday, June 27, 2009

    Social Media Marketing Poll

    I created a limited LinkedIn poll. What alone is the most effective Social Media Marketing tool poll?

    Pleas take a second and share your thought.