Here It Is, The Secret To Entrepreneurial Happiness

During our childhood years, measuring success was as simple as counting gold stars and smiley face stickers. In high school and college, we relied on report cards. But how do we determine success now, as entrepreneurs?

In Southern California’s bustling startup scene, known as “Silicon Beach,” many professionals leave the comfort of a steady paycheck to pursue the American dream of starting something they can call their own. And after numerous conversations with like-minded entrepreneurs, we found that many of these entrepreneurs measured their venture’s success not in dollars, but by their own satisfaction or happiness.

It’s no secret that money can’t buy happiness. In fact, according to an oft-cited study by Stanford University economist Angus Deaton and psychologist Daniel Kahneman, once you’re pulling in a salary of $75,000, any additional dollar earned does nothing more to increase personal life satisfaction.

So if happiness cannot be bought — and yet we use it to measure our business success — what can we do to attain it? Over the last decade, researchers in Positive Psychology have discovered a number of behaviors that boost happiness. To boost your own, practice these four behaviors:

1. Create a social circle of like-minded entrepreneurs.

Two heads are better than one when it comes to problem solving. A team of entrepreneurial peers can see what escapes our own attention, point out pitfalls ahead of time, and become a sounding board for critical decisions and actions.

Commit to creating a circle of like-minded entrepreneurs in which no money is exchanged between members.

2. Give your time away.

Many entrepreneurs think that devoting every waking moment to their company will ultimately be the key to success. But when you spend time helping others instead of yourself, your sense of time expands.

Professor Cassie Mogilner, a researcher on happiness and time management atthe Wharton School, explained this recently: “The results show that giving your time to others can make you feel more ‘time affluent’ and less time-constrained than wasting your time, spending it on yourself, or even getting a windfall of free time.”

Whether it be through mentorship, volunteering, showing interest, or lending an ear to a friend, giving time to others expands your sense of time and results in greater life satisfaction.

3. Set attainable goals.

The art of goal-setting can take years to master. As entrepreneurs, we all have big goals, and to experience success we have to learn to break large goals into smaller goals that are within our daily reach.

Try creating one goal per day that you want to accomplish outside of your day-to-day emails and meeting commitments — then do everything in your power to turn this into a lasting habit.

4. Practice gratitude.

There are a variety of ways to practice gratitude that entrepreneurs can easily incorporate into their daily routine. One approach is to set aside time every week to write thank you notes, sent via snail mail or over email.

If you thank a client, that’s expected. But if you thank someone for an unexpected task, research from Professor Sonja Lyubomirsky at the University of California suggests that your mind becomes more sensitive to positive interactions — and less sensitive to negative ones.

By practicing gratitude, you will begin to cultivate a chronic state of happiness.

Happiness is the new gold standard.

The traditional gold standard for measuring professional success is money, yet entrepreneurs almost always cite happiness as the highest-priority goal for attaining success.

Do you already practice any of these four happiness-promoting behaviors? If not, try integrating them into your daily practice today.

And guess what? Happiness can also lead to better health, more energy, productivity, and yes — more money.

Dmitriy Katsel is the founder of Spring Theory, an organization that matches corporations with universities in semester-long collaborations to explore solutions to big challenges. Sara Gershfeld, behavior analyst and founder of LoveMyProvider, also contributed to this article.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Startup Tips: 9 Challenges To Partnering With A Bigger Company

Question: Are there any disadvantages to partnering with a company much bigger than yours, and how do you manage them?

Where’s the Control?

“The chief disadvantage of partnering with larger companies is loosing control over timeline and positioning. Typically, you are rate-limited in progress by how fast the larger organization can move, and you won’t be able to directly control the channel partner to do what you want. You can’t manage your partners, but what you can do is set firm expectations and legal obligations from the onset.”

– Victor Wong | CEO, PaperG

Watch the Time Sink

“Bigger companies, by their nature, move much slower than your company. Keeping things moving can be a struggle when you aren’t use to dealing with as much bureaucracy.”

– Wade Foster | Co-founder, Zapier

Beware of Bureaucracy

“When working with a large company, it is important to recognize that it may take some time to identify the appropriate contact, and that the person you’re working with may or may not have the influence or bandwidth to get things done. Consequently, these relationships are time-consuming to build and can take a lot of effort for a small team to manage effectively.”

– Garrett Neiman | Co-founder and CEO, CollegeSpring

Just Word of Mouth?

“Partnering with a larger company can be great, but when it comes down to it, you are just another word of mouth for them. You sometimes do more work for them while they just let your name “appear” with them. Do what works best for you and do ask yourself if you really need to partner with them. If not, then don’t even jump on the boat.”

– Ashley Bodi | co-founder, Business Beware

Getting Lost in the Shuffle

“A good partnership means that you have to have clear communication, which can be tough when you’re dealing with a company with multiple layers of stakeholders — each of whom may leave her position, veto a step or otherwise make the partnership more difficult to deal with. It’s not impossible to deal with, but when you have fewer personnel to shepherd a deal, it’s something you need to be aware of.”

– Thursday Bram | Consultant, Hyper Modern Consulting

Feature Creep!

“When you partner with a large company, beware the “just add one more thing” disease. Large companies are used to getting what they want and will try to push you to write more features, add more support or customize your business around their needs, sometimes to the overall detriment of your business.”

– Nathan Lustig | cofounder, Entrustet

Retention vs. Innovation

“Working with partners much bigger than you are rarely works out. Big companies are often very inflexible, slow moving, and sometimes require massive contracts that take months to negotiate and that they have no hesitation about pulling out of very quickly. The culture at many big businesses is about “job retention” rather than “innovation”, and biz dev people often keep themselves busy with meetings that go nowhere while trying to cover their behind. Despite numerous attempts, and thousands of hours, I’ve never had a partnership that made a big difference to our bottom line.”

– Matt Mickiewicz | Co-Founder, Flippa and 99designsAdjust Your Timelin

“Manage your expectations regarding timelines. Everything takes forever in larger bureaucracies. Decisions have to be reviewed and approved by three layers of management and usually one committee — the red tape can really hamper your plans if you’re not realistic about the timelines you’re working with.”

– Brent Beshore | Owner/CEO, AdVentures

Don’t Be Bullied

“A bigger company can sometimes bully you around since you are the smaller partner. You can easily manage the relationship by being very clear with expectations and and terms of the relationship.”

– John Hall | CEO, Influence & Co.

Now check out: Learn to pitch BEFORE you raise capital.

Why The Perfect Startup Pitch Isn’t A Pitch At All

Everyone loves a good story. Some of our favorite stories are from movies we watched as children. They all have the same ending: “…and they lived happily ever after.”

We know the ending before the movie even begins, so why do we watch them? We watch to see the journey. The journey that started with a struggle or a problem is finally resolved as the prince and princess ride off into the sunset.

So why, then, do most investment pitches start with, “And my company is the next Apple or Facebook”? I mean, that’s the fairytale ending, isn’t it? That our startup is the next multibillion-dollar company?

Apple and Facebook didn’t start out as multibillion-dollar companies. Steve Jobs and Steve Wozniak built their first product, the Apple I, on the mere vision that computers would be used by consumers — at a time when computers were exclusively used by businesses. Through innovation after innovation, Apple evolved into the company we know today, but the journey was not done without its struggles. (If you want to get the full picture of all the company’s struggles, read the nearly 600-page biography of Steve Jobs written by Walter Isaacson.)

Besides, as an early-stage startup, there are no great revenue numbers to put on a slide – only predictions. You may have a business plan, but it could completely change tomorrow.

What you do have is a story. You have experienced a problem or seen a need. Now you are actively working to provide a solution to that problem, or fill that need. Not only that, there have been bumps in the road thus far and there will be even more in the future — so your determination and passion to get the job done needs to show.

For example, my company provides expiration date management software to the grocery industry, but my investment pitch never starts out with, “I made Date Check Pro, and it will make millions!”

Instead, I start out by describing how I used to work in a grocery store. I checked far too many expiration dates on far too many cereal boxes, and realized there had to be a better way.

The goal of starting with the story is to show that you are personally connected to the problem you are looking to solve, and that you are the right person for the job.

Knowing this, investors are more likely to connect with you, the entrepreneur. One of our investors — Peter Layton, a former partner at Goldman Sachs turned serial entrepreneur and angel investor – told me recently, “I invest in people first and the idea second. I want to hear the entrepreneur’s experience with the problem they are looking to solve, their passion to solve it, and how they plan to do so. If the story is good, I am more likely to invest since I know there is a good founder behind the idea.”

So before your next pitch, remember these key tips:

Share your story instead of pitching your company.
Keep it short — six minutes or less.
You’re running an early-stage startup. You don’t have perfect financial projections or a fireproof business plan. Include your plan to grow the company into your story, but be open to suggestions.
Practice, practice, practice. Yes it’s a cliché, but you don’t write your story in one sitting. How could you tell it perfectly on the first try?
Remember: You’re not “pitching,” just telling a story. Relax!

Andrew Hoeft is the founder of Pinpoint Software, Inc. His company has created Date Check Pro, expiration date management software that allows for proactive management of inventory and will be launching a second product late 2013. He is a co-founder of StartupMKE, a founding member of StartupWI, and a senior at the University of Wisconsin-Whitewater studying entrepreneurship. In addition, his company is a member of the Gener8tor accelerator program which provides numerous resources to start-up technology companies.

Now read: Why bootstrapping might be the smartest choice you make

3 Reasons Women Should Pitch Their Startups More Often

Women entrepreneurs don’t pitch as often as their male peers. I encourage women to step up to the plate, whether it’s asking for capital to fund their startup, or asking for a raise at work.

In 2012, only 16 percent of startups pitching to angels in the U.S. were women-led, according to the Center for Venture Research at the University of New Hampshire. Out of that 16 percent, 25 percent secured funding.

3 benefits of pitching your startup:

Feedback

Pitching your startup is a way that you can receive advice and suggestions from potential investors that can help your business model get closer to meeting market needs.

Connections

Don’t view pitching as a zero-sum game, where you either get funding or you don’t. Instead, view pitching as an opportunity for you to meet key influencers. While a potential investor may not be interested in investing in your startup, she/he may know someone who might want to learn more and, by pitching, you increase your network, as well as you chances of securing a relevant introduction.

And yes, capital.

One of my favorite sayings is, “If you want money, ask for feedback” (and we come full circle…). Pitching is an opportunity for you to share your startup, engage people, and secure funding. Whether someone wants to invest on the spot, or you receive a referral to a potential investor, remember that putting yourself out there can get you closer to raising capital.

Need a pep talk before venturing out to pitch? Check out the Pipeline Fellowship Blog, which features candid interviews with members of our community, as well as an Entrepreneur Prep section.

Article originally posted at Ideas Lab.

Natalia (aka Ms. Oberti Noguera) is Founder and CEO of the Pipeline Fellowship, an angel investing bootcamp for women philanthropists. Natalia holds a BA in Comparative Literature & Economics from Yale. Women’s eNews recognized her as one of 21 Leaders for the 21st Century for 2012 and Business Insider included her on its 2013 list “The 30 Most Important Women in Tech under 30.” You can find Natalia on Twitter (@nakisnakis).

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

A programmer’s guide to getting hired by a startup

Why Bootstrapping Might Be The Smartest Choice You Make

One of the earliest and most critical decisions an entrepreneur must make is whether to self-fund a startup by bootstrapping, or raise outside funding through venture capital. The implications of each decision are significant.

How you fund your company will help determine its chances of success, its scale, its long-term prospects, and ultimately, your relationship with it.

As an entrepreneur who has invested significantly in my own company, I believe that bootstrapping is the best option. It’s never easy, and it’s not always glamorous, but bootstrapping will force you to become a better, stronger entrepreneur with a more vibrant business. Here’s why:

Creative Freedom: The creative and executive freedom that entrepreneurs have at the beginning of their projects is priceless. Bootstrapping a company with your own funds protects that freedom without the (often stifling) accountability to an outside voice protecting its investment. When you bootstrap, you are that voice — and you’re the creator too. Even if you supplement with outside funding down the road, bootstrapping gives you far more control over your own business in those critical early days.
Smaller = Scrappier: With less capital to work with, you will be forced to start small, test your assumptions carefully, and then scale up. Along the way, you will learn about your products, markets and customers more intimately. And if you make mistakes — as all entrepreneurs do — they will almost certainly be smaller in scale and impact. Meanwhile, you will learn to become a scrappier, more vigilant founder.
Better Products: Another advantage of a limited budget is a greater focus on your products and services. The pressure of a shorter runway will force you to get your products right. When every last dollar matters, you need to pay attention to your customers and their needs by building a superior offering. That insight and dedication will increase the likelihood of generating revenue and building a brand more quickly.
High Stakes (But Higher Rewards): As a bootstrapper and founder, you are your company’s original (and only) shareholder. As a result, you will retain control and equity. Bootstrapping also aligns your incentives with the success of the company: If it fails, so do you; if it succeeds, you succeed too — and at higher multiples. This also keeps ownership clear and manageable; no other investors will claim parts of the company or impede the important, rapid decisions you have to make in a startup’s early days.
Smarter Decisions: You will rarely be as cautious with other people’s money as you are with your own. Bootstrapping will almost certainly make you a better manager and incentivize you to intelligently grow your business. Learning how to do more with less is one of the most important skills of an entrepreneur — and a key principle of 21^st-century business.
Better Profit Margins: Bootstrapping a business is one of the best ways to stay lean, which will do wonders for your profitability and valuation. Plus, companies running with low overhead, often enjoy a much larger profit margin. If they succeed and begin to consider exit opportunities, a low-cost margin can have a dramatic impact on earnings, which is a common basis for valuation. One of the most compelling ways to increase your exit multiple is to cut costs — a skill that bootstrapping entrepreneurs understand well.
Faster Progress: Bootstrapping usually keeps a company’s runway short — with less cash, there is less time to get a company off the ground. This is one of the greatest motivators to quickly build a product and get it to market. Rapidly testing and iterating on your offering is an efficient and cost-effective way to develop a product. It will also dramatically increase your chances of success. Outside investment often reduces that pressure, creating a cushion that can add months or even years to your timeline.
Less Outside Influence: Raising outside investment often attracts a great deal of attention, particularly when the investors are high profile or the deal is widely publicized. While glamorous and exciting, it also raises your profile significantly. In contrast, entrepreneurs who bootstrap have a major advantage: They can operate in relative secrecy for a period of time, staying off the radar as they fund their own operations. And that can make all the difference in maneuvering around competitors and building a great product .

Every entrepreneurial venture is different, of course. The one constant, however, is that success depends on an entrepreneur’s ability to execute effectively. And my years of experience as an entrepreneur have taught me that bootstrapping is a powerful, fulfilling, intelligent way to execute.

Jay leads Innovation at Best Drug Rehabilitation. In his startup experience, he has built a digital marketing agency, a content network, and an e-commerce store. Jay speaks in the Bay area about social media marketing, SEO, and current trends in the internet-startup industry.

Now check out 5 tips to succeeding in an emerging industry.

3 Components Of An Indispensable Product

At Shop It To Me, we believe companies can disrupt a market and have long-term loyalty not just by building a great or insanely fun product, but by building an indispensable product.

Look at some of the services today with the most avid users — Google Search, Apple’s iPhone (when it first came out), Twitter, Etsy, eBay, Pinterest — all have one thing in common: they have built a product that is indispensable for certain audiences.

What is indispensable?

So, what exactly is an indispensable product? I believe you can divide it into three different components:

1. An indispensable product solves an important or meaningful problem.

Every indispensable product out there solves important problems for its users. VCs often refer to this as as the “aspirin” vs “vitamin” scenario (whenever you have a headache or pain, aspirin is a must-have; vitamins are a nice-to-have).

There’s a reason Google Search is so popular — it is indispensable in two ways. Users of Google search trust it to give them answers to the most important questions. For advertisers, Google SEM and SEO has traditionally been the best place to find customers with active intent to buy their service. Selling your amazing new tax software for businesses? Get to be at the top of the search results for “business tax software” and you’ll have the huge number of highly targeted leads you need to crush your quarterly goals.

2. An indispensable product has no good substitutes.

To gain real traction, an indispensable product not only needs to solve an important need; it must lack good substitutes when it first comes out. Your product won’t be indispensable if users can easily find an alternative.

When the Apple iPhone first came out, there were no other products remotely like it. It was terrible as an actual phone, but it was the only phone out there for consumers that would let you actually search and view real web pages (as opposed to just mobile versions), or see your emails in a visually appealing and simple way.

If you want to build an indispensable product, you need to make your product unique for the customers you are going after — you can’t just be a slightly better version of a popular product and expect people to switch.

3. An indispensable product is ideally something you need on a frequent basis.

The third point is not a true requirement of indispensability, but an important attribute if you want to build a habit and get frequent usage. If people find your product indispensable but only need it once every 5 years (or once at all), you may have a great product, but you won’t be building a habit for when competitors enter the space. On the other hand, if people need your product frequently, you have the ability to train them to be accustomed to your service. This will keep users coming back long after other competitors make similar products (think of the millions of people still using MyYahoo! 10 years later).

A quick test for indispensability

So you think your product has all three of the criteria for an indispensable product. How do you know for sure that it’s indispensable? Here’s one easy test: take it away from your users and see how they react. If people start screaming that the service you provide is gone, there’s a pretty decent chance you have an indispensable product.

Think about the products that are indispensable to you. Smartphones, webmail and Twitter are all indispensable to certain people. Think of how people tense up when their phone goes missing for 15 minutes, or how a reporter would feel if they could not access their Twitter feed and had to wait until news appeared on a website.

From inadvertent tests, we know our Shop It To Me emails can be indispensable. Every once in a while our emails get delayed. When that happens, we often hear about it not only from our data but from our support box — users email us demanding (occasionally with profanity) why their salemail has not yet arrived. And with our new product, Shop It To Me Threads, we occasionally test the waters of indispensability by asking user-testers how they would feel if we removed certain features. We’ve had a number of features that users say are “really great” that we removed from our system because they didn’t notice when they were gone.

So for all of you working on the next big thing: as you build out your product, and start prioritizing features, figure out what parts are needed to make your product more indispensable. Focus your energies on that. You’ll build a stronger product and have a much larger chance of turning your idea into a wild success.

This post originally appeared on the author’s blog.

Charlie Graham is the founder and CEO of Shop It To Me, an intuitive personal shopping assistant that knows what you want and delivers it on sale in your size.

Are today’s “world changing” startups, really world changing?

Startup Tips: 5 Simple Ways To Collect Customer Feedback

Steve Jobs is famous for downplaying the importance of customer input, claiming customers don’t know what they want until they’ve seen it. While that philosophy has so far worked phenomenally well for Apple, most products can’t be developed in a bubble.

Even before we built our first product prototype, we spent countless hours speaking to would-be customers to gather suggestions, feedback and input. While most founders see the value in conducting market research in one way or another at the start of the development process, all too often they fail to continue this interaction. Companies should make a point of gathering feedback from customers throughout the entire development cycle — basically as long as you’re in business.

Here are five easy ways to get feedback on your product:

1. Customer Surveys

The most efficient way to garner feedback from customers is through surveys. To ensure the highest response rate possible (usually a typical rate of response is around 5 percent, and 10 percent or higher is exceptional), we recommend keeping the survey to a maximum of 15 questions. Include questions that relate to the overall industry your product fits into and whether or not customers would like to participate in any future product testing or marketing events. We use Google Forms for short questionnaires and SurveyMonkey for more in-depth surveys.

We used information from our latest survey to not only improve our product, but to ask for product reviews, case studies, more in depth feedback calls and of course to gain a larger picture of the space we play in — Google Apps.

2. Support Forums

Support forums aren’t a revolutionary idea, but the most successful forums are highly interactive. Customers should be able to give their input, comment on others’ ideas and see that you and your support team are taking active roles by responding to every single request. We use Zendesk for our forum, as well as ticketing and overall product support.

We’ve already added 15 of the most popular customer suggestions left in the forum to our product and have another 15 slated for development in the coming months. Could we have thought of those 30 ideas on our own? Probably. But ideas are generated a lot faster when you can ask a customer base of 12,000 companies what they’d like to see. Plus, you never have to worry if you’re adding features people will actually use.

3. Let Customers Provide Feedback Inside the Product

To make sure you’re gathering input from customers on an ongoing basis, include an easy way to leave feedback directly within your product. While some companies choose to pop up a review or feedback form on the third or fourth login, we chose to add a feedback window users can view or hide as they please. The widget is set up to track the exact page users leave feedback for, giving us an even better understanding of issues, suggestions and engagement on different facets of the product.

4. Wireframe Reviews

In the earliest stages of product development, we showed wireframes — the bare bones of the product UI — to “trusted testers” using Protoshare and GoToMeeting. Our user experience designer actually gave control of his mouse and keyboard to the tester, giving them a task to accomplish within the application and closely watching how they went about accomplishing said task. Feedback from these initial reviews surfaced several early problems with the product layout, including a very unpopular “edit” icon.

Today, we continue to create wireframes and set up UX and creative reviews for every new feature we develop. Everything from colors, layout and copy are up for criticism.

No matter what your product is, if you’re solving a real problem, there are people out there who want to see it solved too. Comb through user groups and forums to find your first trusted testers. These people should be experts on the area your product addresses and have real experience working with competitive products or their own self-made workarounds. Keep in mind that if you can’t find at least a handful of people willing to help with wireframe reviews, it may be time to take your idea back to the drawing board.

After you’ve released your product and have actual customers walking through wireframes, find a few unhappy customers who aren’t afraid to voice their concerns. Don’t take criticism personally — it only helps to move your product further along.

5. Feature Contests

Feedback has been so abundant that we decided to launch a feature contest. During the month of the contest, 59 feature requests, 155 votes, 87 comments and over 2,500 views were counted. We incentivized our customers to participate by ensuring the winning feature would actually be built into our product before the end of the year.

Participation was so high that we decided to choose not one, but two winners and shared the results with our entire customer base via the company blog, social media outlets, an email newsletter and even through a Google Hangout On Air.

If you make an ongoing effort to gather customer feedback throughout the product development process, at the end of the day, you’re left with better ideas, a more robust product — and a loyal customer base who knows you actually care about their opinions.

David Politis is the founder and CEO of BetterCloud, the maker of FlashPanel, the number one cloud management tool for Google Apps, and the Google Apps resource site, AsktheGooru.com. Follow him @DavePolitis.

Where do you go offline to connect with other entrepreneurs and startups?

Founder Spotlight: Steph Beer, Co-Founder NSight2 Day

Using our consumer-facing platform, 4MeNU, nsight2day helps individuals and organizations truly engage with one another. Using innovative tags, users can share information with their network in context. We call these messages Gems. Follow her @stephbeer.

Who is your hero?

My grandfather, who is Swiss (this makes sense if you know me).

What’s the single best piece of business advice that helped shape who you are as an entrepreneur today, and why?

Don’t be low-end. This means low margin, but it also means don’t behave badly. The other piece of advice I love is don’t “trade up” when it comes to who you spend your time with. Your friends matter more than ever when you’re starting a business, and just because you meet flashy people doesn’t mean that the originals aren’t worth their weight in gold for you as a person and an entrepreneur.

What’s the biggest mistake you ever made in your business, and what did you learn from it that others can learn from too?

We were a B2B team that tried to build a B2C platform. Stick to your strengths. Also, build a few similar offerings for several different types of client/customer groups and then see how hard it is to sell to each. There are big differences between selling to an individual, a university, and a Fortune 500 company. Each is a unique challenge; you may be better or, um, less well-positioned to sell to them.

What do you do during the first hour of your business day and why?

Yoga. Setting your mind straight can make or break your morning.

What’s your best financial or cash-flow related tip for entrepreneurs just getting started?

Always try to pay based on performance and limit all your fixed costs. Try not to sign a lease (that goes for yourself and for your business).

Quick: What’s ONE thing you recommend ALL aspiring or current entrepreneurs do right now to take their biz to the next level?

Stop going to tech meetups (unless you’re recruiting) and start talking to more senior people who have decades of business experience. More pointedly, stop listening to people who have launched successful businesses by “asking my friends from my financial services days to invest.”

There are a lot of people who are professionally/socially well-positioned to win in the startup environment, and their stories aren’t that interesting or helpful to most entrepreneurs. Actually, just avoid the whole “founders cult” to the greatest extent possible (this gets back to staying close with old friends).

What’s your definition of success? How will you know when you’ve finally “succeeded” in your business?

When we have consistent revenue that covers our costs and lets our original investor make his money back (and returns that are greater than or equal to the returns he would have gotten had he put his money into an index fund) — that’s it.

How To Avoid Hiring The Wrong Person For Your Startup

“He sounded so capable in the interview!”

“I just don’t know what happened. It seemed like she had exactly the right experience we were looking for!”

“The whole team loved him, so we just went with it.”

Perhaps you’ve uttered these words yourself, or heard them from a hiring manager who is experiencing frustration and buyer’s remorse when a new hire turns out to be a dud. Hiring someone who fails to meet expectations is a huge headache, especially when it was your job to vet them in the first place.

But there are ways of making sure that you don’t get snowed by someone who is good at making a first impression, but bad at delivering results. Here are the key things to do when hiring that’ll guarantee you never hire a dud again:

1. Make them show, not tell.

After your initial screen of incoming candidates, you should have everyone that you are seriously considering do a trial task that is representative of the work that they’ll be doing if hired. The point here isn’t to get free work done from candidates, it’s to see what they will actually do when presented with certain goals and constraints.

Choose something that takes two to three hours, requires a familiarity with relevant skills, networks, or industry knowledge, and will force them to draw upon resources that they’ll have at their disposal while working for you. Simulate a mini version of their work as closely as possible.

If I were hiring a director of development, I may ask them to a) identify a likely funder of my organization, and b) outline a proposal to see how they organized their approach. If I were hiring a manager of partnerships, I would have them a) identify three new organizations that they think would make good partners for me, and b) ask them to show me how they’d make first contact with these organizations.

Tell the candidates they can ask you questions as they are working on the trial. Good people will nail the project, but great people will hit it out of the park after clarifying a few things with you and asking for guidance on key points.

Have all of the candidates do the same task, so that you’re comparing apples to apples. You’ll find that only the most motivated candidates do the task, and you’ll immediately see who is more thorough and puts time into it. You’ll also see whose judgment is most aligned with your actual work. You can teach skills, but judgment is hard. Design the task to show how good their judgment is.

2. Be painfully thorough.

Everyone likes to ask things like, “What would you do in this situation?” or “How do you think we should face this challenge?” These questions show insight into how a candidate thinks and reacts to your organization’s realities.

Far less popular are the simple, boring, background questions—the grungy details of their past work—that actually illustrate what they’ve been able to accomplish. By the time someone is a finalist under consideration, you should be able to answer each of the following questions for, at the very least, their last three jobs:

What were they hired to do?
What resources were they given to work with?
What challenges did they face?
What outcomes did they create, or what accomplishments did they achieve?
Why did they leave that role?

If you ask these questions to your top two or three finalists, you will get a much better sense of which of them has actually accomplished more relevant things.

Yes, this takes time. Yes, it can get boring. But until you have a clear sense of these things, you don’t really know what you’re dealing with in their history. It’s easy to assume things about someone’s past; it’s harder to take the time to uncover those details. This is critical information.

3. Be consistent.

Whatever your interview process, make sure it is consistent across all incoming candidates. Choose your interview questions wisely, and seek help on this if you aren’t sure what to ask. Once you have the questions, you should develop a basic rubric—even if it is qualitative—so that scores are at least mostly consistent across interviewers and across candidates.

When you are narrowing in on finalists, you should have them interview with your entire team (if it’s small enough), or at least everyone they will be working with closely. Make sure you give your team members specific, unique questions and rubrics to use, otherwise they’ll likely ask repetitive questions and re-run the same conversations with the candidate over and over—which limits your ability to get new insights and further evaluate how good of a fit that candidate would be.

4. Resist optimism.

The biggest mistake the hiring managers make is being optimistic, hoping that this candidate is “the one” and not objectively trying to determine if they really have the skills and background required to do the job. Making idle small talk, using favorite “oddball” questions (e.g. “If you were a kitchen appliance, which one would you be?”), and spending too much time selling them on the opportunity are all unhelpful things that hiring managers do when they are clouded by optimism and eagerness to hire.

And the opposite isn’t smart, either. Using hardball questions, intimidation tactics, and giving trick questions or tests are equally unhelpful.

The best approach is to be calm, measured, balanced, and consistent. Your gut reaction to people is relevant, but is not substitute for measured due diligence. Take your time and be thorough—you’ll thank yourself later!

Nathaniel Koloc is co-founder and CEO at ReWork, a Colorado-based start-up that connectes talented professionals to hiring managers at for-impact companies. Nathaniel is an 2011 Unreasonable Fellow and a member of the YEC.

This huge startup conference is all about startups everywhere else, do you have your early bird tickets?

image: YEC

Meet The Man Behind NY Dress Startup BlueGala

Josh Weiss is the Founder and President of Bluegala, an online retailer of prom dresses, evening, party, and cocktail dresses. Previously, he worked for Lehman Brothers as a High Yield Credit Research Analyst. Josh graduated from the University of Virginia with a B.S. in Commerce with a concentration in Finance. Follow him @bluegala.

Who is your hero?

Steve Jobs.

What’s the single best piece of business advice that helped shape who you are as an entrepreneur today, and why?

Match and exceed. Always keep a close watch on your competitors and make sure to match and exceed them in everything they do.

What’s the biggest mistake you ever made in your business, and what did you learn from it that others can learn from too?

When we first launched Bluegala, we placed a large order for lower-priced dresses before doing any research to see if we could actually compete in the market selling them. In hindsight, we should have placed a smaller order and tested the waters with a small PPC campaign. The lesson learned is to walk before you run and test everything.

What do you do during the first hour of your business day and why?

Check orders from overnight and go through the previous day in Google Analytics. I do this to keep a handle on what’s selling and if there are any issues. Google Analytics helps me to constantly get a sense of where our traffic/sales are coming from and if there are any red flags causing consumers to bounce off the site.

What’s your best financial/cash-flow related tip for entrepreneurs just getting started?

Bootstrap your business for as long as you can and try to scale it from there. If you eventually need money, you want the business to be as profitable as possible to get the best valuation, and you want to hold onto the most equity you can.

Quick: What’s ONE thing you recommend ALL aspiring or current entrepreneurs do right now to take their biz to the next level?

Dive into your analytics. If you don’t know what to look for, there are tons of books and blogs that can point you in the right direction.

What’s your definition of success? How will you know when you’ve finally “succeeded” in your business?

I define success as being one of the dominant players (if not the most dominant) within a certain industry or niche. Success is accomplishing what others were unable to accomplish and thriving where others have failed.

I will know my business has succeeded when Bluegala is the go-to resource for social occasion gowns. We have had a lot of growth since our founding in 2009, but there is still a long way to go before we establish dominance in the sector. Each year that passes allows us to learn more and more about what it will take to establish dominance and I am confident we will get there eventually.

How To Measure The Potential Of Your Startup Idea

You have a business idea that you feel has tremendous potential. You probably got the insight by solving a problem that you had. Brilliant. Most successful companies today were created because of this very insight.

To give you an example, YouTube was founded by Chad Hurley, Steve Chen, and Jawed Karim, who were all early employees of PayPal. According to an oft-cited story, Hurley and Chen developed the idea for YouTube during the early months of 2005, after they had experienced difficulty sharing videos that had been shot at a dinner party.

When you’re solving your own problem or one that you feel is the pain point of a certain target audience, how do you know whether there is a large enough pool of people that face the same problems or challenges that you are trying to solve? If you’re just selling a product, you’re better off creating it and getting it to the market. But if you want to build a business out of it, you need to have a sizeable market for scalability.

So the question is, how do you determine the market demand for your startup idea? Read on for several ways to get the answers you need.

Google

Yes, it can be as simple as looking it up on Google. Haven’t you heard that Google is God? It has most of the answers that you are looking for. So how do you get Google to help you? Use the Google Adwords keyword tool to look for the number of people seeking out what you’re trying to do.

Put the keyword(s) in the search box, select the target country or countries and Google will show you the number of average local and global monthly searches. This is a good indicator of demand.

Minimum Viable Product

“Market research and business planning are overrated. The best market research is putting a product out and seeing if people will buy it. The best business plan is to create something great and sell it fast,” says Guy Kawasaki.

Writing a business plan with projections through market research is a sure-shot way to a startup doomsday. Nothing beats an actual customer using your product or service. So how do you get to the customer when you’re at the idea stage and don’t want to spend a huge sum building something they might not want?

Build a minimum viable product or a prototype. The idea is to put out something that offers the core value or your startup or that solves the core problem of your customers.

The MVP could be a PowerPoint slide, a dialogue box or just a landing page. This is something that you can often build it in a day or a week. A prototype can be an actual functioning product with the core features offered.

Share this with your network and see the response. Are people excited to use it? Do they actually feel their needs or problems are resolved by using your product? Is it easy to use?

Landing Page

You don’t have a product yet but still want to get customer buy-ins? Then landing pages are your best friend. Create a teaser or promotional landing page, which highlights the core proposition of your startup.

Ask for their email addresses in return for an offer or simply to be updated about when the startup is launched. Here’s a great example of a landing page that does just that. The number of email subscribers will determine how many people are interested in your startup. Try using Launchrock to create your landing page. Or use KickoffLabs.

To increase traffic, one method is to create a Google Adwords and a Facebook marketing campaign. Point the adverts to this landing page to drive traffic. Use Google Search and Network Partners to spread the campaign among a huge number of people.

You would much rather spend a little money to be sure than spend fortunes building a product that customers don’t want.

Crowdfunding

Crowdfunding is an excellent means to get actual buy-in for your product. This concept has increasingly becoming popular with the likes of Kickstarter, RocketHub, Indiegogo launching their platforms on the Internet that bring together startups looking for funding and individuals who are interested in contributing towards an idea or a product.

Apart from securing funding for your startup, you also get to know how many people are actually interested in your product or service. Interested enough to pledge their money. Here’s a list that showcases the most funded projects.

Whatever be your path, make sure you build on something that your customers want. As Kawasaki puts it, “This isn’t rocket science. It’s mostly hard work and luck.”

This post originally appeared on the author’s blog.

Rahul Varshneya is a startup coach and the co-founder of Arkenea, an enterprise mobility and cloud solutions provider. He writes on starting up and mobile strategy at http://rahulvarshneya.com/blog.

When it comes to communications, startups need the whole package.

idea image: earlmcadoo.com

Founder Spotlight: Brittany Hodak CoFounder ‘ZinePak

Brittany Hodak, alongside Kim Kaupe, is co-founder of ‘ZinePak, a company that creates custom publications for entertainers, brands, and celebrities. The ‘ZinePak configuration combines a small-format magazine with one or more CDs and exclusive merchandise items together into one engaging, exclusive package. Follow her @zinepak.

Who is your hero?

My heroes are all the men and women who enlist in the Armed Forces. People tell me all the time that it takes courage to start a business; while that is probably true on some level, it doesn’t even begin to compare to the courage it takes to fight for one’s country.

What’s the single best piece of business advice that helped shape who you are as an entrepreneur today?

“It’s easier to get forgiveness than permission.” This is something my dad said to me for the first time when I was about 13. I remember thinking how profound it was, and how it could work as a “free pass” for just about anything. More than 15 years later, I still live by this mantra every day.

When you’re an entrepreneur, it often means writing your own rules and getting creative in the ways you go about getting things done. Sometimes this means ignoring a chain of command, moving forward on a project without formal sign-off, or any number of other “violations” of the training of otherwise well-meaning soldiers of Corporate America. When given the choice between trying to get something approved the “right” way (e.g. submitting a formal proposal and spending six weeks pitching the same idea to successively senior team members) or the “wrong” way (e.g. happening to bump into the CEO at Starbucks and pitching her the idea over a latte), we always choose the latter.

There is very little that can’t be smoothed over with a heartfelt “oops” email or a nice Edible Arrangement when someone’s corporate feathers have been ruffled!

What’s the biggest mistake you ever made in your business? What did you learn from it that others can learn from too?

One of the biggest mistakes Kim and I made with ‘ZinePak was not hiring enough staff quickly enough to support the company’s growth. In a startup where there isn’t a huge amount of funding, founders are often faced with “the chicken or the egg” scenario of when to expand the full-time employee count. Is it better to hire help in anticipation of new work materializing, or secure the business first and then worry about the man (or woman!) power?

For our first big experience with growth, we chose the latter. The decision led us to experience several weeks in a row where everyone was working 18-hour days just to keep our heads above the water.

Luckily, we were able to learn from the experience. We made the strategic decision to take about eight weeks off from actively working on projects and hire two more full-time team members. This break gave us plenty of time to find amazing support staff and get them totally up to speed before the next wave of projects began.

What do you do during the first hour of your business day?

As an entrepreneur, every day is different and often unpredictable. I try to spend the first hour of each day catching up on entertainment trades and news and sending quick notes to anyone whose names come up during that reading. For example, I’ve found that early mornings are a great time to send someone a quick note congratulating them on a recent promotion or campaign that’s been covered in the press. I also try to drink at least 16 ounces of water in the first hour of the day, because if I don’t set the pace early I won’t stay hydrated throughout the day.

What’s your best financial/cash-flow related tip for entrepreneurs just getting started?

Hire an accountant right away! We tried to manage our own books online when we started ‘ZinePak, and we quickly got in over our heads. There are so many things to worry about when starting a business, from product development to lead generation to sales to marking to contracts, etc. — the list goes on and on. Time is a very precious commodity, and it is wise to spend your time on things can’t be easily outsourced to someone else.

Even if you have an accounting background, take the time to find a great CPA or bookkeeper to help you keep tabs on your business. He or she can offer strategic advice about cash flow, growth, and spending, and, most importantly, free up your time to work on closing deals instead of itemizing credit card statements.

Quick: What’s ONE thing you recommend ALL aspiring or current entrepreneurs do right now to take their biz to the next level?

Email three interesting people from your past who you haven’t seen in at least two years and ask them to get together for lunch or coffee dates. Some of the best business connections can come from the sources you least expect. Plus, reconnecting with old acquaintances is almost always a good time.

What’s your definition of success? How will you know when you’ve finally “succeeded” in your business?

My definition of success is being happy, confident, and secure in my own venture. When Kim and I started ‘ZinePak, our paramount goal was to not have to report in to bosses who treated us poorly. We set a definition of success as, “let’s quit our jobs, start a company, and try not to make significantly less money this year than we would if we kept our jobs.”

Two years later, we’ve passed the $3 million revenue mark and sold almost $15 million of product in the United States and 17 other countries. The feeling of success comes from knowing that we’ve built an awesome company and no longer have to answer to anyone other than ourselves.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Bad ass startup chick Denver Hutt reminds us we’re entrepreneurs not super heroes.

Startups: How Youth Can Be Your Biggest Asset Of All

Being a young entrepreneur in business today is exciting. Youth is your biggest asset; you should rock it to your advantage. But how do you overcome the preconceived notions that come with being a younger contender — like assumptions that you’re inexperienced, naive and in for a rude awakening by the industry?

The answer is simple — you turn them into strengths. Everyone always talks about how retaining youthful characteristics like curiosity and optimism is a great way to succeed. Why can’t those who truly embody those characteristics also reap the rewards?

Why Your Age Is Actually an Asset

As a twenty-something Canadian entrepreneur with a funded startup and past experience at a well-known social news company — who was literally thrown into a pit of extremely successful American entrepreneurs — I’ve had my share of challenges and benefits as the new (and incredibly young-looking) kid on the block. People sometimes view the fact that I’m “too young” or “don’t know enough about life” as a flaw, but I actually believe it’s helped me succeed. When you have no knowledge of the boundaries that exist, you’re able to think bigger; you’re able to be truly and genuinely audacious. That kind of bold, optimistic creativity doesn’t come from being jaded or experienced; it comes from being completely unaware of what lies ahead of you.

Even more so, young people have the fresh ability to learn new skills quickly and retain a ton of information at a time. You can learn a language in a month while you’re younger, but when you’re older, it’s much harder to pick these things up. I try to take full advantage of that, and I’ve seen it happen right in front of me in the tech space. Young people are changing the world through their combination of youth and entrepreneurship. They’re able to establish multi-billion dollar companies because they just don’t see any boundaries, and they can adapt to an evolving landscape quickly.

Young entrepreneurs sometimes tell themselves, “I’m young. No one is going to take me seriously. I don’t have enough money. No one is going to let me do this. I don’t have enough knowledge.” You can solve all those things yourself, without doing anything absurd or fake, like growing facial hair, putting on more makeup or trying to “sound older.” No one ever gets very far by pretending to be something or someone they’re not. The older folks in the room will see right through that, and that’s far worse than being young. Here are three ways to get others to take you seriously — despite your age — while still staying true to yourself:

1. Trust your instincts

Entrepreneurship is inherently instinctual – you’re devoting your life to something unknown and ambiguous. Your decisions and “strategy” are most often a culmination of your basic instincts and parallel, but not directly relevant, data. It’s a very subtle feeling that can be mistaken for many other things – but once you can focus on it, you’ll find your decisions not only for the best, but consistent and wired to your thinking. That intuition, in turn, shapes the vision and culture of the organization you are trying to build. Deviating from your instincts brings unrest not only for you, but among your stakeholders as well.

2. Use your youth

Being young isn’t all about age. It’s about curiosity, capacity, and ultimately, your limits. Test them. There might never be a time in your life where you can stretch your mind and your physical capabilities to their maximum without consequence. As a result, you can leapfrog your success, build amazing products, and live life to its fullest while bringing others along with you.

People often ask me, “How has your youth prevented you from achieving certain things?” I almost always view my youth as an enabler rather than a barrier. Many will assume the latter simply because business/experience/age has gone hand in hand in the last decade. But with the Internet, we are no longer operating on a linear curve of growth of knowledge and numerical age. We are now living in the era of exponential knowledge.

In fact, the younger you are, the more likely you will be viewed as innovative. Don’t conceal or hide your ideas – let them flow and mingle with others, especially during the conception stage. Being young is finally a good thing in the consumer web space. Let’s all make sure that we continue to honor the stage that has been set for us, and continue to innovate incessantly.

3. Generate serendipity

If you create your own luck, there is no sense of reliance. I really, truly, believe in people who understand how to build the right relationships, thrive in the right environments, and believe in their own capacity and propensity to create. The last few years of my life contain a string of events that came from taking a few extra forks along the path of my life — forks where I could have chosen to simply stay still. The doors that open for you may be just the serendipity you need.

For me, being a young entrepreneur is all about asking how I can make things happen by actually executing on my word. Many young entrepreneurs like to talk. I like talking too, but I’d rather show and prove my abilities. The challenges really aren’t challenges at all unless you view them as such. It’s all about perspective.

Brian Wong is the CEO and co-founder of kiip (pronounced “keep”), a category-creating mobile rewards network backed by Relay Ventures, Interpublic Group, Hummer Winblad and others. Kiip has raised over $15.4 million in funding to date and was named one of the world’s 50 Most Innovative Companies by Fast Company in 2013.

5 Tips For Succeeding In An Emerging Industry

Wouldn’t it be great if someone would hand you a road map when you decide to launch your own business in an emerging or unproven industry? Of course, that doesn’t happen, but I have found, as many entrepreneurs have, that with a lot of hard work and determination, an emerging industry can become a profitable one. Here are five keys to success I’ve learned along the way while building my digital agency, The1stMovement, in the emerging digital marketing/advertising industry and having the honor of leading it to become one of Inc. 500 “fastest growing companies in America”:

“Fish where the fish are.” Focus on meeting an existing demand instead of creating one. This is one of the most important lessons I learned from going through the dot-com bust while working in Silicon Valley in the early 2000s. It’s far better to address an existing need in the marketplace than it is to create a product or service that you think people need and then try to generate demand for it. I started at a time when I felt like the advertising industry was “craving” technology excellence. So my decision to move from Silicon Valley, with my “geeky” technical background, to Los Angeles, known for its creativity but not so much for technical execution, proved to be a perfect springboard for me to start my business.
Improvise and innovate. Find new ways of doing the same old things. Instead of trying to reinvent our competitors’ products and services, we believe in observing their successes and mistakes, then come up with innovative new ways do it better and more efficiently. In a time when Los Angeles advertising agencies were competing for the attention of big Hollywood Studios by pitching their best “ideas,” we focused our efforts on getting the attention of well-funded Fortune 50 clients like Adobe and Cisco with our technical expertise and track record for getting things done. That “sales pitch” proved to work and we continue to lead with technology, but complement it with ROI-driven strategies and sexy creative for all of our clients.
Adopt the mindset of a bootstrapper. Even if you have millions in funding from outside investors, run your business as though every dime is coming from your own pocket. You’ll quickly find that you’ll be forced to be more creative and innovative in your decision making. Not only will you avoid wasteful spending (another dot-com lesson), but your funds will go much, much further toward meeting your business objectives. Challenges will arise, as they have for us. Right before the recession, we were forced to let go of some staff because I opted not to go for investment. It was one of the most painful professional experiences I’ve ever had to personally go through, but it forced us to re-look at our structure and be nimble and flexible in a tough, unknown economy.
Never forget that execution is everything. Even the best idea in the world is worthless if it just stays on the drawing board. As Thomas Edison once said, “The value of an idea lies in the using of it.” Yes, putting an idea into action takes a lot of hard work, research and testing, and there are obvious risks. But if you execute your ideas with a “bootstrapper” mindset, you will be able to minimize your risks and the payoff could be significantly larger in the long run.
Keep moving forward. Indecision is far worse than making the wrong decision. Fear of failure can be a paralyzing influence when it comes to making business decisions. Yet an entrepreneur and a strong leader can never move a business forward by being indecisive. I have made my fair share of mistakes in my business decision making, but keeping my business nimble, flexible, and most importantly, independent, has allowed us to correct our mistakes quickly and move on.

Entrepreneurs who are starting a business in an emerging industry are like pioneers who are navigating a new landscape where not many people or firms know what they’re doing. But the good news is that the greatest rewards will go to those who are willing to work the hardest, take calculated risks, and believe in their ability to succeed. As the Zen saying states, “Leap and the net will appear.”

This post originally appeared on the author’s blog.

As CEO of The1stMovement, Ming Chan was named as one of the “Top 10 Asian Entrepreneurs in America” by Inc. Magazine and has led the agency to numerous accolades including 3-time Inc. 500 “Fastest Growing Private Companies in America”, 3-time “Best Places to work” in Los Angeles, “Top 20 agencies” in LA & Denver, and 5000% growth in 5 years with his passion for innovation and company culture.

We’re using Chicago startup Centup here’s why.