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3 Ways to Make a Social Impact With Your Startup

When I think about startups that incorporate social good, I think about businesses that are always doing the right thing – for their team, for their community, for their customers, and for the environment. Most importantly, the decisions that they make naturally consider their social impact. They don’t fake it and it is not a fad strategy – it is core to the business model. Social good isn’t about doing something to just get attention.

Case in point: After living and working in Malawi, artist (and friend) Marissa Perry Saints, founded Dsenyo in an effort to create opportunity for hard-working African women and artisans. “Social good is the reason we exist and it permeates every facet of our identity. With this approach we have buy-in from everyone…leadership, staff, suppliers and customers. Our social mission is our core,” she explained.

If you’re interested in incorporating social good into your business, here are three best practices I gleaned from my fellow Boulder- and Denver-area entrepreneur friends:

Clearly Define and Communicate Your Social Impact

Think through whether the fundamental problem your company solves is actually “social good.” If so – define how. What is the social impact of the work you’re doing? If successful, what is the social impact your company will have? Your team has to believe it in order for them to execute, and in order for them to share the impact they’re having in the community and with your customers. Is it a leap? Or is it real?

Analiese Brown, Community and Recruiting Manager for ShipCompliant, said, “Social good should become an outcome of what you’re trying to build, rather than an afterthought. What is the fundamental belief that drives your business? If you can get clear on why you do what you do at that very basic level, it becomes easier to see how you can achieve social good as an extension of your product and brand. That doesn’t mean your product has to solve a social problem explicitly (although it might), but it does challenge founders to think about how they could use their existing resources — their team, their technology, their solution — to make the world a better place.”

Make It Part of Your Company’s Culture

As an entrepreneur, you have to communicate your social impact clearly with your team early and often before you can make the case for doing it externally. It has to be ingrained in everything you do. And it must naturally connect to your business’ mission and vision.

Elizabeth Kraus, Managing Director of The Impact Angel Group, said, “To really achieve social good, startups should first start thinking about it early in the process so it can shape the company culture and be supported by the early investors and stakeholders. Startups can’t forget that they must survive in order to create social good. If used as support for customer acquisition, employee retention and other startup challenges, a social good strategy can be a competitive advantage.”

Be Authentic About Your Impact

Marc Gutman, Chief Meeting Officer and Founder of Lighthouse Conferencing, said, “My biggest piece of advice to startups looking to do this is do it for the right reasons. Do it because it is meaningful to you and your team. Do not enter into it as something that’s going to be monetized or to bring you business. If it does, that’s a bonus, but you’ll most likely be disappointed if this is your main reason for starting one of these programs.”

In other words, don’t create a social good strategy solely to generate revenue. It won’t work because people will see through it. Rather, connect the dots internally and externally on how your company can make a positive social impact throughout your business model. And if you can’t, don’t force it.

If your company’s mission isn’t to change the world, that’s okay too – there are other ways to incorporate social good into your model. For example, some employers choose to empower their employees to use paid time off to donate to the charity of their choice. Said Bill Douglas, CEO of EssentiaLink: “I chose to create a charitable time off policy from the start and encouraged employees to donate their energy on company time to the charity or school of their choosing. This bonded our teams because we all cover for each other without hesitation when its for charity. There is pride in ownership as employees boast about their chosen charity. Our stakeholders even get involved now. Its become engrained in our culture and everybody benefits.”

Integrating social impact into your business model shouldn’t be an afterthought and it shouldn’t be temporary. It should be central to achieving your vision. Otherwise, it might just be a distraction — one that your clients and employees will see through.

Sarah Schupp is the CEO and founder of UniversityParent.com, the #1 site for college parents to find everything they need to help their student succeed. Follow her on Twitter @Sarah_Schupp

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

Stitch Fix Founder Katrina Lake Has Some Advice for You

Katrina Lake’s friends used to kiddingly call her CEO/janitor. Today, her willingness to get her hands dirty is paying off.

katrina lake

Katrina Lake is passionate about helping women achieve everyday confidence. She founded Stitch Fix to help women everywhere discover and explore their style through a truly client-focused shopping experience. Prior to founding Stitch Fix, Katrina developed extensive experience at the intersection of fashion, retail, and technology. Katrina holds a B.S. in Economics from Stanford University and an M.B.A. from Harvard Business School. Follow her @kmlake.

Who is your hero?

My maternal grandmother, who moved here on her own from Japan without knowing a word of English, has always been an inspiration to me. She was unwilling to accept the status quo and pursued a vision of a better life for herself fearlessly.

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

Before I founded Stitch Fix, I was working as a consultant in the retail and restaurant industries and I traveled a lot with colleagues. The best piece of advice I could give is when hiring people, consider whether or not you could enjoy spending 12 hours traveling with them. While I don’t travel with every person who works at Stitch Fix, it’s a great barometer to make sure that everyone we hire is someone we enjoy spending time with.

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 didn’t take a step back from the business and define our shared values and vision for the company as soon as we should have. Having a shared sense of self for the company helps provide more alignment around hiring practices, more consistency in how we serve our clients, and creates a feeling of shared purpose among employees.

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

Every morning as I’m getting ready for my day I watch “Good Morning America” (guilty pleasure!). I also read WWD to get up to date on the latest retail news. I also try to squeeze in a run a few mornings a week, especially in the summer when it’s light outside.

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

Make sure to test your hypothesis/product/idea in a low-budget way before you invest more of your or another investor’s time and money. It’s tempting to pour all your money into an idea you can believe in, but it’s so important to test a concept to understand the potential traction with target customers.

When we were in the testing phases at Stitch Fix, we were purchasing inventory at retail and weren’t making any money off our clients, but we were able to validate the concept and demonstrate that women could really shop a certain way. It was helpful to show the feedback and traction from our testing as we began approaching investors for our round of seed funding. It was equally important to prove to myself that what we were doing was a worthy investment.

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

Take a vacation and unplug! Some of my best thoughts have come while I’ve been able to relax, and take some time and space away from the business.

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

It’s hard to imagine that there will be one milestone in my life that really feels like I’ve achieved the pinnacle of success. While building Stitch Fix, I’ve experienced lots of wonderful mini-milestones that I enjoyed celebrating. When Stitch Fix was first starting out, my friends used to call me CEO/janitor. Now that I’ve been able to build an amazing team, there are fewer moments where I experience the extreme part of that high/low dynamic. But perhaps success is having many fewer moments of being janitor than CEO.

There’s nothing more rewarding than building a business where you directly see the value you create for your clients and get to see your business and your team grow.

What These Women TV Characters Can Teach You About Business

Two Women In Living Room Watching Television Eating Chocolates S

One thing that makes “Game of Thrones” so compelling (like “Girls,” “Homeland,” and the late “Breaking Bad”) is its complex, often controversial leading lady. As professional women, what lessons can we draw from Daenerys and her counterparts on other hit shows? A lot, as it turns out. Below, four of my personal favorites — and what we can glean from each:

Skylar White from “Breaking Bad”

Love her or hate her (yes, there is a whole subculture of Skylar haters), Skylar is savvy and smart. She lacks the sinister evil of her meth-cooking husband, but she definitely isn’t a pushover. Skylar successfully negotiated a bottom-dollar price for the car-wash acquisition — a move that even Walter seemed skeptical of. She’s also keen with numbers, enough to cook the books and launder drug money.

While it’s not wise to use those tactics (they will land you a visit from the IRS or your brother-in-law DEA agent), it is every business owner’s job to know their numbers. Lessons learned:

Don’t be afraid to negotiate. Everything is negotiable. Even business contracts presented by large corporations can be amended to your benefit. But you must speak up and have a leverage point; never want or need something so badly that you accept it at face value.
Know your numbers. You don’t have to do math equations in your head, but you need to know the financial status of your business at any given time. Start with your costs of goods or services and the margins on sales and go from there.
Carry on when things seem bleak. There may be days when even you don’t want to show up for work. But you must: for yourself, for your employees, and for your customers.

Daenerys Targaryen from “Game of Thrones”

As women, we often underestimate ourselves and even fall victim to the Imposter Syndrome. Dany could have easily slunk away or become the wife of another, silenced forever. But she had a burning desire to win in a man’s world. She takes up a league of her own, first by creating a trusted inner circle of advisors and then by winning over legions of loyal soldiers through compassion and empathy. By meeting their needs, she fulfilled her own. Lessons learned:

You are worthy. The only limitations we have are the ones we put there. With confidence and self-esteem, knowledge and a strong skill set, any opportunity is available to you if you seek it out.
Build a team. You can’t build a business alone. Invite people into your team who can complement your existing talents. Make sure they are supportive and results oriented as well.
Your employees are your strongest asset. Your employees help make your vision happen. Treat them well. Be fair and honest. If you do happen to have an underperforming employee who you can’t help improve, get them out! Bad employees will tarnish the good ones.

Carrie Mathison from “Homeland”

When she’s not interrogating prisoners of war or foiling bomb plots, Carrie is neurotic, unstable, and quite frankly, off her rocker. From the outset, it seems Carrie’s case is one of “how not to behave in business.”

Now look closer, and you’ll see Carrie is outshining her counterparts by acting on intuition, pushing boundaries and delivering results. Here’s the truth: great entrepreneurs, creators, and inventors are all a little neurotic. They are the ones really thinking outside the box (see: Steve Jobs). And most great business leaders all lead imbalanced work/home lives. So as we embark on the next season of “Homeland,” let us not judge. After all, isn’t there a little bit of Carrie in all of us? Lessons learned:

Business is emotional. Business involves daily interaction with many individuals. People’s livelihoods are at stake. Just like with your employees, be honest and fair. Keep your composure and treat others as you would want to be treated.
Crazy comes with the territory. Entrepreneurs are risk-takers. Our enthusiastic, out-there way of thinking is often the catalyst for new business ventures. Embrace the wild ride — and be glad that we aren’t all on the crazy train.
Push boundaries. You can’t copy your competitors. You must out-think them, outsmart them, out invent them. You sell tacos in a restaurant? Well, how about selling them in a food truck? Get creative and take your business to the next level.

Marnie from “Girls”

In HBO’s hit “Girls,” we meet a young, eager Marnie, who desperately wants the perfect life but quickly loses control. She is fired from her job, breaks up with her boyfriend, and is labeled a bad friend by her roommate, Hannah.

As entrepreneurs, we know that failure doesn’t seem quite as bad once we have a few years under our belts. If you’re not failing, you’re not trying hard enough. So dear Marnie, make mistakes while you’re still young. And for those of us that are now past our twenties, let’s try something new today. In failing, we will ultimately win. Lessons learned:

You can’t control your environment. When the unexpected happens, use your system of checks and balances to deal with the situation and move on, so you can get back to business as usual.
Don’t be too rigid. Just like in fashion and music, there are trends in business. You may suddenly have a product no one buys anymore. Pivot. Accept the challenges head on — or go out of business.
Failure leads to success. A failed new product can be devastating. But within every failure are many learning opportunities about what worked and what didn’t. Next time, you will do things differently and hopefully succeed.

Our favorite characters may not be teaching us anything new, but they remind us of the many roles we have to play. We too fret over numbers, negotiate contracts and expand our businesses — all while pregnant with our third child. And yes, our own emotions sometimes get the best of us.

Maybe that’s why there is no “The Real Women Entrepreneurs.” We’re already charting our course, somewhere between the blurred lines of business, art and reality.

Erin Meagher is the developer of Kelapo™ Extra Virgin Coconut Oil, a product manufactured and marketed by Beneficial Blends LLC, headquartered in Tampa, Florida. Kelapo™ was launched in 2009 with the goal of producing the best-quality coconut oil on the market while ensuring fair and ethical treatment of the farmers who cultivate it.

3 Tips for Outsourcing Product to a Development Shop

Designer Drawing Website Development Wireframe

With a shortage of quality development talent, many founders have turned to development shops in order to start building their product.

At Terrible Labs, we have the opportunity to chat with many founders about how to get their first web or mobile product designed, built, and launched. Unfortunately, a lot of them have unrealistic budget expectations about building their product.

If you have a limited budget and need help building your product, here are three things we recommend to reduce the overall project cost:

Wireframe your product’s user flow before you talk to a development shop.

We’ve presented and written a lot about the value of wireframing and prototyping because we feel it’s the most important step when productizing an idea. However, most prospective clients come to us with an idea that exists solely in their head.

The goal of wireframing is to get the idea out of your head and onto paper. Once you put pen to paper, you’ll learn how your product actually works and not how you think it will work.

You can consider your wireframes sufficient after you have conveyed all of the possible ways a user can flow through your app. Make sure to account for everything from how the user signs up to how they ultimately achieve your product’s value proposition. In our experience, designing well-thought-out wireframes can cut 2 to 3 weeks off your project.

Be willing to cut features that aren’t necessary.

Good wireframes act as a blueprint for product development. More importantly, exhaustive wireframes will help a development shop break your product down into user stories.

User stories are descriptions of pieces of your product’s feature functionality. Ultimately they serve as the guide for development. At Terrible Labs, we take the user stories generated from wireframes and put them into a project management tool like Trello or Pivotal Tracker. Our clients then work with us to determine the priority of each story and positioning, which leads to a detailed estimate breakdown.

Once you have an estimate breakdown from your development shop, you can, based on your budget, determine which features are must-haves — and which are nice-to-haves, cutting accordingly. But you need those wireframes first.

Be a proactive project manager.

Good project management is the difference between finishing a project within the terms of the engagement and spending more money for additional, unplanned time.

At Terrible Labs, we work on a time and materials basis. This means that we work with a client on their product for a set term, regardless of what gets completed. The most important reason for this approach is that we want the client to take initiative to become a very active participant in the development process. Since we test continuously and often, we need quick feedback from customers in order to make changes sooner rather than later.

Staying active is critical. Take the time to use and adopt a project management tool so you remain an active participant. This ensures you don’t just end up under budget, but with a successful project that meets your expectations, too.

So, what are you waiting for?

Don’t let a limited budget prevent you from seeing your idea become a reality. If you are truly committed to building your product, take the initiative to extensively wireframe your idea, realistically scope your product, and then proactively run it. Follow through on these three steps, and you’ll be amazed at how far your budget will go.

Cort Johnson is a co-founder of Terrible Labs, a boutique design and development shop, and TicketZen, the easiest way to pay parking tickets with your mobile phone. He also works with Flybridge Capital Partners and its general partners as an advisor to support and broaden the firm’s investment activities.

Have You Joined the Content Marketing Movement?

Businesswoman Reading Latest News

In the last few years, the words “content marketing” have become buzzwords in the corporate business, marketing, digital and media space. But what is it really? Content marketing as defined by the Content Marketing Institute (CMI):

Content marketing is a marketing technique of creating and distributing relevant and valuable content to attract, acquire and engage a clearly defined and understood target audience — with the objective of driving profitable customer action.

Content marketing is becoming the new black from both a quantity and quality standpoint for individuals throughout the world. Some have stumbled into this world. Businesses both large and small are realizing that in order to compete, they must embrace this new era of interaction and develop true content marketing programs. Content marketing is becoming a disruptive force. In the past, marketing pros relied on production, publishing and promotional amplification tools. Content is the fuel that makes all of those platforms run. However, a few blog posts or an email campaign won’t suffice anymore.

Provide Value With Content

Relevant content coming from a business through a thought leadership perspective has a considerable effect on attracting and retaining customers. It’s not hokey, it’s not a pitch and it’s not everyday sales — it truly has become an educational and informative way to deliver knowledge and content to build brand loyalty and awareness.

A study by Roper Public Affairs shows that 80 percent of business decision makers prefer to get company information in article form rather than in an advertisement. Seventy percent say content marketing makes them feel closer to a company, while 60 percent say that company content helps them make better product decisions. “Content marketing works because it delivers relevant proof of value,” says interactive content marketing strategist Mark O’Renick. Quality content marketing engages consumers to look at a business differently.

Many C-suite, advertising and marketing executives believe their company has great content to shoot out and share in the public arena, but they don’t feel they can do this quickly enough or keep it moving through a streamlined process. Spreadsheets, emails and project management systems have all been used by marketing teams in recent times to churn out content on a routine basis. This has led to a whole new industry of technology solutions that make your typical marketing editorial calendar look like a thing of the Stone Age.

Work Smarter

A Kansas City, Missouri-based startup, DivvyHQ, realized that content marketing is the present and the future of marketing. Their founders, both from the digital agency world, developed an ideation, planning and production workflow specialty tool to help businesses and online publishers embrace content marketing and collaboration, but in a manner that allows the user or users to do so in a more efficient way without all the headaches. Simply put, DivvyHQ aims to take content marketers out of spreadsheet, email, storage and organizational hell and alleviate the challenging manual and laborious process. Corporations such as Intel, Toyota, Bed Bath & Beyond, Walmart, Sprint, H & R Block, Travelocity and Adobe have all worked with DivvyHQ. PR and media giants Ogilvy, Edelman and the National Geographic Channel have also used the product to streamline their content needs.

“Despite the traditional publishing industry taking a beating over the last decade, companies can learn a lot from the day-to-day planning methods, scheduling tools and production processes that help publishers hit deadlines and crank out great content every day,” says content marketing expert Brody Dorland.

Turn to the Cloud

Companies and enterprise level organizations who handle multiple individuals and tasks are finding out they need a way to plan, divide and conquer their content marketing and editorial needs on the cloud. They have discovered they also need ways to break down the internal silos in the workplace. Some have used the old fashioned approach and tried breaking down physical walls in their office to get their employees and content producers to talk. There is an easier way. Virtual, real-time sharing and collaboration significantly improves these situations and breaks down silo walls.

Dorland believes, “Simplifying things and leveraging the cloud to help global, decentralized content teams collaborate, share assets and increase the quantity and quality of their content output is huge right now.”

The content marketing phenomenon isn’t going away. Content collaboration and team calendaring is on the upswing. The spreadsheet free editorial calendar is the new king of the castle. Companies both large and small are yearning and will continue to yearn for high-powered, specific content marketing tools to help take their business to the next level.

Content marketing is the new black.

A version of this post originally appeared here.

@JasonGrill is the founder of JGrill Media where he consults on media relations, public affairs and strategies and government relations. Under same umbrella, he works in the media as a local and national writer/contributor, radio host and television analyst/commentator. He is the co-founder of Sock 101.

5 Ways to Grow Your Business (Without Venture Capital)

Growth Hacking: Why We Can’t Have Nice Things

Not long ago, I sat patiently in my CEO’s spare bedroom while his mother removed her belongings from the family desk so I could work there for the day. We had no corporate office, no employees and no paychecks. Luckily for us, what we did have was product/market fit and a couple hundred paying customers. We did everything — literally — in order to grow the business.

At Mhelpdesk, we made a conscious decision not to raise venture capital. Because of this, being small and lean was our only path to success. Despite our lean approach, we built a product that people wanted and grew at an unusual rate for bootstrapped companies. For startups looking to keep their equity in their own pockets, here are some tips for continuing to grow while staying lean:

Join an incubator. Mhelpdesk was growing. We knew that we needed to hire and that working out of our CEO’s home was no longer an option. Our team lives in northern Virginia, where we decided to join our local incubator, Fishbowl Labs. There, we received free office space and got to be around other smart, interesting entrepreneurs carving out their own startup paths. At Fishbowl, we made great friendships and business relationships with other resident companies and had access to a variety of seasoned mentors. Our presence at the office allowed us to gain exposure in the startup world. Finally, access to affordable office space was a great move to decrease our overhead.
Listen to customer feedback. At Mhelpdesk, we take customer feedback very seriously. Requests are submitted to our forum and subscribers can vote them up or down based on popularity. Through this interactive process, we are able to prioritize our product roadmap based on the highest ranked features. We also respond to tickets within a couple of minutes. In the beginning stages of our company, us founders personally dealt with requests. Doing this kept costs down and fostered loyal and repeat customers based on personalized experience.
Have hustle. A necessary trait of any bootstrapped or funded startup — hustle. This may be even more important for startups who haven’t taken on any funding. Our founders make 200 cold calls per day, cold email CEOs to explore partnership opportunities, and reach out to bloggers to see if they’d be interested in picking up a news piece on our company. We are available to our customers around the clock, which gives them confidence in our ability to take care of potential issues immediately. We even caught the eye of famed hustler Gary Vaynerchuk, who mentioned in this video that the hustle coming out of our team “is intense and huge.”
Solicit word-of-mouth recommendations. Multiple online reviews have helped quickly accelerate our growth. Many of our reviews came in voluntarily. We prompted others to leave feedback based on their experience with the software at sites such as Capterra, GetApp and Software Advice. Prior to purchasing, customers shop around for a solution to their problem. If a well-known company in their industry is using our software successfully, that is a huge incentive to do business with us.
Create a community. Building champions around our brand is a great way to create meaningful relationships with the Mhelpdesk community. Call us crazy, but we give customers our personal cell phone numbers so they can reach us around the clock. We build deep relationships with each of them. Because we care about our customers, they care about us. They are loyal and willing to work through minor hiccups. Through this strong community, we receive many referrals. I believe this sets us apart from larger companies who can’t be lean. We are able to leverage our customer relationships to acquire more customers.

The traditional path to rapid startup growth and expansion is through the influx of outside investment. We decided to grow our business on revenue generated by offering a solid, needed platform. Without bringing in cash, growth does happen a little slower. But it can be worth it. By staying lean and customer-focused, we were able to reach profitability and keep growing Mhelpdesk the way we always intended.

Ryan Shank is the COO of Mhelpdesk, a field service software company that helps small businesses manage their jobs, scheduling and invoices.

The 3 Most Important Lessons I’ve Learned from Starting Up

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I’ve been an entrepreneur for more than half my life. At 16, I founded Buzz Marketing Group, the youth marketing and influencer agency I still run today. It’s been a long road to get to where I am today, but I’ve loved every minute of this journey. Back in 1996, it was rare to be a teen entrepreneur. Now, I feel old!

But wisdom certainly comes with age and experience, and I’m happy to share with you some tips that have helped me throughout my career:

1. Always remember that everyone is important. There are no little people.

One of my biggest pet peeves is when people ignore my assistant or employees, thinking they can directly connect with me. I surround myself with people much smarter and better than me in all areas, and those people deserve respect.

Today’s assistant is tomorrow’s Vice President. How you treat people matters. In today’s world, your main contact could change positions overnight. It’s important to treat everyone with equal importance. And make sure this is authentic. I genuinely care about the people I work with, their families, their lives. It’s important to be totally vested.

2. You can always make more money, but you can never make more time. Use your time wisely.

I’m more likely to be upset by a 30-minute delay in a meeting than a 10 percent reduction to an invoice! I always tell my team we can make more money, but we can never make more time. Repeat this to yourself all day long. Focus on ways to be more efficient, delegate projects to someone who can do it quicker and better, and do not waste time. And please, please, please don’t waste time in meetings that don’t yield results.

I’m a big fan of Action Method and their process for making ideas happen. Always make sure meetings include action steps so it’s easier to pass along info to the right person to yield the right results. Make sure that everyone understands next steps and owns their next step. This saves time that can ultimately be put to use doing something else. Miscommunication and lack of clarity are big time suckers, and getting a handle on these issues will save you time and increase your bottom line.

3. If you fail to plan, you plan to fail.

This doesn’t mean that you need to script every detail of your life, but you need to have a roadmap. Even though I use the word plan, I really mean you need to have a vision. Where do you see yourself? Do you meditate on this vision? Can you see what it takes to get to that vision? Too often we get caught up in the minute details of things, and we lose focus on the big picture.

You have to give yourself time to do a daily check-in. For me, this happens first thing in the morning. I spend 15 to 30 minutes in a quiet mental space. This helps me go into my day fully focused. I also spend at least 15 minutes “free writing,” hoping to open up my creative space. I always get new ideas or think of solutions to existing problems. As entrepreneurs, if we can’t get ourselves into a place where we can innovate or problem solve, this is a problem. So always make sure you have a notebook (or smartphone) with you to take quick notes when an idea or solution comes to you. And focus on your vision.

Tina Wells, founder and CEO of Buzz Marketing Group earned her B.A. in Communication Arts graduating with honors from Hood College in 2002. She is the author of the tween series Mackenzie Blue, published by HarperCollins Childrens Books.

How Much Should You Spend On Marketing?

If you’re wondering what your marketing budget should be, you’re not alone. This is the million-dollar question: How can you be sure you’re spending the right amount of money on the right types of marketing? Many say it’s an art, not a science. Others argue that there is a clear equation that can help you to calculate exactly how much of your marketing dollars to place where. Simply figure out the equation, enter your variables, and voila.

In truth, it’s a little bit of both. With a little thought, a little math, a little data, and a little creativity, it is possible to have a good idea of how much to invest in marketing for the highest possible return. In terms of “return,” I have a strong finance view. Simply put, the role of marketing is to create leads and business opportunities. You should always return to this metric.

The key to ROI marketing is to not only determine your marketing budget, but to consistently building your company revenue. Your ROI always needs to link back to actual sales.

Return on Investment Marketing

ROI marketing is a measurement tool. It measures how much profit you make on a given marketing investment. To figure out the return on your investment, you need to identify a few figures to plug into your ROI formulas (as long as you are consistent, you can define your terms however you choose):

Cost of goods sold (COGS): The actual cost to produce your product (or provide your service)
Marketing investment: Media cost or production cost
Revenue: Your total revenue or your gross or net profit

The Components of ROI Marketing

There are six key components of ROI marketing:

Understanding lifetime customer value. Once you know this, you can begin to figure out how much you should expect to spend on new customer acquisition. To calculate the lifetime value of a customer, you need to identify the following variables: average annual revenue per customer, average gross profit margin (before any marketing expense), cost of capital, and average number of years per customer.
Estimating target acquisition cost per customer cost. Look at your company data. Take the total cost of your marketing budget and divide by the number of customers you won with this investment. This is your historic acquisition price.
Determining your marketing budget. Divide your target revenue by the average customer revenue. Then multiply this number by the target acquisition price. Once you have your ROI goal and overall annual revenue goal, calculate your targeted marketing spend.
Predicting which tactic will help you to realize your customer acquisition goals. Use the by-product of your calculations to make some informed decisions as to which marketing strategy will be most successful in helping you to achieve your goals.
Setting your marketing ROI goal. Once you have established your ROI threshold, stick to it. If a marketing initiative isn’t hitting the threshold, cut it. Put your marketing dollars where you know they will have a greater impact.
Monitoring your ROI. Measure, measure, and measure again. Use your results to continuously improve your campaigns and maximize your marketing dollars.

ROI Marketing: More Than a Measurement

How you choose to track your marketing spend and calculate your ROI marketing can differ from company to company. It’s important that you make the effort to add some rigor to your marketing activities. Even if your calculations aren’t exact, they can still show you clear trends of which marketing activities are getting real results and which aren’t. And again, results means actual sales.

With a small business, you can’t afford to waste your funds on marketing with low ROI. But calculating the best marketing spend isn’t just about managing your costs; it’s also about making sure that you are using your limited money to get the best ROI. You don’t want to miss any opportunities to help your business to acquire customers and earn revenue.

Ultimately, ROI marketing is more than a measure, it’s also a philosophy. But you can’t implement ROI marketing without making a larger organizational change. This is no small task.

Some early-stage startups with limited funding might view marketing as a low priority; an unnecessary cost. In fact, marketing is not just an outlay of capital. It’s an investment back into your company — not a drain on it. ROI marketing helps you to justify your investments, supporting the old adage that you need money to make money.

A version of this post originally appeared on the author’s blog.

David Ehrenberg is the founder and CEO of Early Growth Financial Services, an outsourced financial services firm that provides early-stage companies with day-to-day transactional accounting, CFO service, tax, and valuation services and support. He’s a financial expert and startup mentor whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.

Should You Do A Crowdfunding Campaign?

Running a crowdfunding campaign is like living one year of a startup on steroids. You need to create a concise story for why folks should support you. Your team must execute a video (not an easy task). And most importantly, you have to hustle every day to get in front of new audiences; unfortunately, people won’t just show up, no matter how amazing your product is.

After going through the experience myself, I am starting to believe that all entrepreneurs should do a campaign as well. Whether you use a major site like Indiegogo or Kickstarter, or even some of the awesome up-and-comers like Teespring and Crowdtilt, executing a crowdfunding campaign will put your team and business through the fire and back.

Here’s why we decided to bite the bullet — and some advice for other entrepreneurs who might be considering a campaign of their own.

Our Story

Modify Watches just launched our first-ever Kickstarter campaign in February to produce something we have titled “Mod-to-Order.” At 4-year-old Modify, we design interchangeable wristwatches, and our vision has always been to allow people to wear their passion on their wrist. If you want a photo of your kid or an image that represents your wedding or a gift for your employees, we want to provide it to you. But to date, it’s been too costly to offer.

After a few years of crowdsourcing products from our fans — “Which of these 10 designs should we produce?” — we’re now using crowdfunding to validate that fans actually want to produce genuine, one-off custom products. We’ve been ignoring Steve Blank’s mantra to get outside of the building, so we figured we would go all-in and choose a make-or-break path; we’ll only be able to offer this IF our Kickstarter campaign is successful.

Why Crowdfunding?

I truly believe that there is no better way to validate that you have a market than by releasing your product and saying “buy now.”

In crowdfunding, you are telling folks, “We want this thing to exist, but it can only happen if you fund our vision.” If early adopters won’t fund you, either your idea isn’t all the way there, or you’re not ready to execute.

One week into our own campaign, and we’re 30 percent of the way to our goal. Our team is staying up late every night to do all of the “real” work we have after spending the 9-to-5 emailing everyone we know asking them to share our campaign.

Kickstarter or Indiegogo?

If you’re going to use one of the big-name crowdfunding sites, there are some definite pros and cons to consider.

Kickstarter has an incredibly strong brand name; even folks who don’t know what crowd-funding is have heard of Kickstarter. Oh, and they just funded their one billionth dollar. We chose the platform because of its historical strength in consumer goods.

In retrospect, Indiegogo would have been an amazing choice too. That platform has an incredibly strong name for artists, is growing in product and has a strong customer service bent. Most relevant, they have many fewer restrictions, which means that you can tailor your campaign more to your company’s specific needs. Indiegogo also has a new tool called Outpost, which allows you to embed your campaign on your site.

The Video

The most important part of your campaign is your video. It’s also one of the more time-consuming aspects of running a campaign like this.

To produce our video, we worked with the awesome team from Six Finger Films. We story-boarded, collected assets, engaged our fans to help tell our story, and shot the film over two days.

If you can’t do the video in-house, I strongly recommend that you find a partner that believes in you and cares about your vision and story.

What We Would Change Next Time

We’ve already learned a few lessons that could benefit other entrepreneurs. Next time, we’d do these things differently:

Contact press a few weeks in advance of launch, instead of on the day. It takes a while to explain your value, and reporters and bloggers are busy! Invest in them like you would in any partner.
Shorten our video. Our video is about 4 minutes long. It’s an incredible marketing tool — but we don’t get to the point of the campaign until 90 seconds in. By that point, you want to have already inspired the viewer to take action.
Simplify our reward tiers. Backers need to take time to understand what they get. That’s a major no-no. If they’re ready to give you support, make it easy with a clear value proposition.

Is It Really All-Consuming?

Yes. The key to crowdfunding success is that you engage your own network. That means personal emails appealing to all of your friends (and even acquaintances).

What I conveniently forgot was that we still had plenty of work to do for the ongoing Modify business – launching our new website, getting ready for Opening Day with our Major League Baseball watches and delivering great service to all of our current customers.

My adviser Bhavin from the Magoosh team always says that fundraising is a full-time job, so a co-founder should “quit” other parts of the business during the funding cycle. Personally, I have found this campaign to require even more work than raising our first round.

Nevertheless, while crowdfunding may seem daunting — it certainly does to me, only halfway through our campaign! – it’s still been an amazing experience. You get to interact with folks on a daily basis and your team has to come together for a very distinct shared goal. Most importantly, if you’re successful, you get to see your vision come to life with the support of fans who care.

Editor’s note: The author is pictured on the far right in the photo above, along with some other members of the Modify team. Check out their Kickstarter campaign here.

Aaron Schwartz is Founder and CEO at Modify Industries, Inc., which designs interchangeable custom watches known as Modify Watches. He loves working on startup ideas and has spent innumerable (happy) hours advising friends and former students on how to grow their ideas.

What My 1-Year-Old Taught Me About Marketing

ABC

My wife, Erin, and I celebrated our daughter Violet’s first birthday recently. We joked that the celebration was really for us surviving a whole year with an infant. If you have kids, then you know exactly what I mean. That first year wasn’t pretty, but boy was it worth it!

In 365 days, Violet transformed from what I endearingly call her helpless, alien-looking newborn days, to a walking, babbling, playful, and extraordinarily cute baby girl (see proof below).

Violet's First Birthday

Looking back on 2013, I find there are many similarities between raising a 1-year-old and launching new marketing campaigns. Both require a significant time investment. Both require realistic expectations about results to avoid frustration. And there’s no question both are well worth the investment.

Recognizing these similarities will ensure you create a more realistic marketing plan and should help you push through the inevitable rough patches in 2014.

Invest the Time Required

Everyone knows babies need a LOT of attention. And even when they sleep, most new parents find it hard to relax. Then, as the infant grows, she starts to sleep through the night, hold her own bottle, and even play by herself. I found the first three months were the most stressful and required the most investment of time, but each subsequent month became easier and easier.

The same is true when launching a new marketing campaign. Let’s use Google AdWords as an example. When you set up a new AdWords campaign, you need to realize the first few months are going to be the most stressful and time consuming. There’s going to be a lot of trial and error to figure out what works for your particular “baby.” Sure, there are commonalities among top-performing ad campaigns across different industries and offers — just like every infant needs sleep, clean diapers and food. But you won’t figure out the specifics, like the best time of the day to run your ads or the best ad copy and bid for a particular keyword, until you and your baby have spent some quality time together.

You need to realize that the first three months of a new marketing campaign are going to be tough. This is true whether you’re implementing in-house or outsourcing to a marketing company. It’s going to be stressful and you need to commit the time required to learn what works in your particular market.

As a result, you also need to be realistic about how many new campaigns you can launch in a year. I can’t imagine having another newborn right now. I’m simply not ready for the time commitment. With that in mind, take a look at your 2014 marketing plan and make sure you’re not spreading yourself too thin by launching too many campaigns. It’s always better to get one campaign working before moving on to a second one. Otherwise, you could just end up babysitting a bunch of failed campaigns.

Set Realistic Expectations

I believe the biggest cause of frustration with online marketing comes from unrealistic expectations. We now live in a world where we all want instant gratification. I frequently hear stories about businesses that unsuccessfully tried Google AdWords, search engine optimization (SEO), social media, email marketing, or some other tactic. When I pry, I learn that the business “tried” for a month or two. That’s the equivalent of getting upset because your baby is not walking at 6 months old!

To be clear, I’m not saying you should continue to invest in a losing marketing campaign. However, as a general rule of thumb, I find that most businesses give up too quickly because they don’t have realistic expectations about how long it will take to see significant results.

For example, last month we sold 85 seats to our Google Analytics training by sending a couple emails to our in-house email list. Clearly, email marketing works. I could go on and on about all the benefits of email marketing, but I don’t need to. The sales speak for themselves. However, we worked very hard over the past three years to build our email database, form a strong relationship and continuously provide value to our subscribers. There’s no way we could have sold 85 seats if we had just started using email marketing in the past 6–12 months. That’s about as realistic as Violet reading one of her books tonight.

Be more realistic with your sales projections from online marketing. SEO, social media, and email marketing are all long-term marketing tactics. AdWords advertising can generate sales within hours, but it will typically take months to dial in your advertising so that you’re consistently generating a positive return. The most successful businesses use a long-term portfolio approach to marketing, similar to savvy investors.

Focus on Incremental Improvements

Up to this point, I realize I haven’t painted a very rosy picture. Maybe I’m a little cranky from so many sleepless nights with Violet this past year.

But seriously, I do believe businesses need to hear this if they are going to succeed in 2014. Competition is fierce, and I’m sorry to say that the days of “set-it-and-forget-it” online marketing campaigns are over. The businesses that take a long-term approach and implement pig-headed discipline will come out on top.

I’ll never forget the day in Central Park when Violet started walking on her own for the first time. It took almost a year to go from rolling over, to crawling, to walking. Every day she improved just a little bit more, until finally it all clicked, and she toddled away from me while uncontrollably laughing.

That’s the approach we all need to take with our marketing. Don’t expect overnight miracles. Focus on incremental improvements in your online marketing campaigns throughout the year.

A version of this post originally appeared on the author’s blog.

Phil Frost is a Co-Founder and Managing Partner of Main Street ROI in New York, NY. Main Street ROI teaches internet marketing strategies that actually work for small businesses. Click here to get the Ultimate SEO Checklist to help you rank higher in Google.

Are You Really the Best Person to Lead Your Startup?

Are you doing your job as a leader, or are you hampering your employees’ abilities through misdirected delegation? Should you step down in order for the company to step up? Are you aware of your individual impact on the bigger picture?

You may have started out as the strong, inspirational skipper of a smooth-running ship, but everyone and anyone can potentially burn out – even founders lose interest and the ability to inspire others. Companies pivot all the time, and whether you’re a CEO, manager, or employee the same principles apply to your role as a leader.

Too Many Cooks Spoil the Broth

If you’re a leader of a team, and asking how you should lead or follow, you may have already failed. “Lead” and “follow” are not actually mutually exclusive. Leading is more complex, sublime and decisive, but it also entails a bit of following.

Entrepreneur Mark Suster speaks of a time when his company was trying to produce too many products at the same time. One of his managers pulled him aside and advised that the company should narrow their focus. After a company-wide discussion he cut down the number of items in production from four to just one — the one that would ultimately turn out to be an industry-leading product.

Everyone remembers what happened when Steve Jobs resumed leadership over Apple. Double-down focus — minimize in order to maximize. Sound familiar? In Suster’s case, he effectively followed his employee in order to lead, and the company benefited greatly as a result.

On the other hand, when every team member is trying to tell everyone else what to do, and simultaneously listening to no one, it is no longer leading. That’s just (dis)organized chaos, and an effective leader knows how to cut through the noise.

What It Means to Lead

A leader’s job is to ensure the success of the organization — no matter who reports to whom in any given group. At every moment she should be examining, scrutinizing, and constantly asking, “Is what I’m doing helping all of us to succeed?”

Or, in the words of entrepreneur and author Jason Baptiste, ”If that means taking out the trash and picking up low fat, low carb, organic pizza for the team so they can work straight through, then so be it.” You can’t be too proud. Do what needs to be done to help your business thrive.

Leadership is also about empowering, and 31 percent of employees leave if they don’t feel they’re empowered to do their job properly. Are you empowering your employees? If not, it’s time to move out of the way and let someone else take the lead. There still may be many important jobs to do.

Do You Project Great Leadership?

There is more to leading a team of employees than simply telling them what to do. Are you perceived as more than just a manager? Do they respect you as such? Ask your employees. They will tell you.

It’s also okay if you’re not the Leader (capital L intended). Oftentimes, there’s only room for one visionary. However, equally if not more importantly so, the company and organization needs a strong Executor. The one that can see the steps to actualizing the big idea.

The doer. The hands-on manager. The person who dots i’s and crosses t’s. Every “shaper” needs a “finisher” – someone to complete the picture. Nothing is accomplished single-handedly. Just because you might not sit in the CEO seat, doesn’t mean your leadership is somehow less valid or valued. People tend to respect the ones they engage the most with and everyone on the team has the opportunity to lead, even if it sometimes looks like following.

Team Building Is Hard

Leaders are powerless without their teams. They can’t possibly do everything themselves. Finding and keeping the right people is absolutely essential.

Create small teams led by people with a wide range of skills and be generous with your knowledge. That way, if you do have to hand over the reins, you already have someone ready to take over (or at least keep the company running while you search for a successor).

As a startup, we look for ambitious (entrepreneurial-minded), flexible and adaptable people to bring into 15Five. Hiring a new employee on a 90-day mutual trial period is nothing new. What we do is put them into a position, show them what we know and then ask them to find a better way of doing it. By the end of three months, we want them to have grown into a position where they could essentially hire themselves out of the job we originally brought them on board for. And if they’re culturally a great fit, then we know we’ve found a gem.

An Outside Perspective

It takes some fortitude and fearlessness to step outside your role and look objectively at your involvement in an organization. Try putting yourself in the shoes of a stakeholder who is not wrapped up in the day-to-day work, like an investor or advisor. Would they determine that you’re the best fit for your current job description?

The best person for the job should be the one doing the job, and if it means that someone else needs to be the leader of your company, then step aside. It doesn’t mean you have to banish yourself and voluntarily walk out the door with your tail between your legs. It means you’re operating in the best interest of your company. Besides, there may be a capacity that is a better fit for you and ultimately you might just end up more happy, productive, and fulfilled.

Anybody know of a story where a founder or employee successfully handed over the reins or stepped into another position in the best interests of the company at large? Would love to hear from you!

David Hassell is a serial entrepreneur and presently Founder & CEO of 15Five, a SaaS company focused on helping individuals and organizations reach their highest potential. Hailed by Fast Company as the “15 Most Important Minutes of Your Work Week,” 15Five creates an internal communication process that enables the most important information to flow seamlessly throughout an organization.

3 Key Strategies for Pricing Your Product

When we first launched Ministry of Supply, we sold our Apollo shirt for a whopping $128. Our price for the shirt then moved down to $88, back up to $108 and finally landed on $98.

During all of these changes, we talked to our customers a lot about pricing. We watched conversion rate, listened to what our customers said, asked them what else was in their closet, and thought about the value our shirts give our customers: no more dry cleaning, lots of durability and a shirt for every occasion. Mostly, we debated about how all these factors should influence how we priced our clothing.

We get a lot of questions on pricing from fellow entrepreneurs. How’d we decide to sell our Apollo shirt for $98? What’d we do to test what prices are right? And, how should costs play into pricing analysis?

Given that my co-founder Aman and I were students at MIT Sloan when we launched Ministry of Supply, pricing was a topic that we talked to our professors a lot about. In the end, there were three main things we kept in mind when figuring out pricing:

Understand your customer’s willingness to pay. In pricing class, we learned that 80 percent of managers know how much it cost to produce their product, but only 23 percent know their customers’ willingness to pay. As a customer-centric company, we wanted to understand everything about our customers, including how much they value our products, and what prices made our customers happiest. To do this, we tested pricing a lot, and, analyzed quantitative data such as conversion rate (given different prices), as well as qualitative data, such as their sentiment after we followed up with them for feedback.
Think of the 3 C’s in tandem: cost, customer, competition. None of these individually should cause you to dictate price, but rather, they should form a comprehensive view that allows you to triangulate the price. We viewed our pricing strategy through these three lenses as we adjusted our pricing: we knew what our costs were, we developed an understanding of who our customer was (what does he usually pay for a shirt? Is he price-sensitive?), and we understood our competition’s pricing. However, rather than letting one of these factors dictate our price, we used all three to inform our final decision.
Don’t set prices based purely on cost. As any startup knows, costs depend on sales volume. Sales volume depend on prices. Because your costs will change as you scale, pricing based on cost alone is a dangerous practice. But pricing based on cost also ignores something important, which is the value you create for customers. Think about it: had Pet Rock been priced on cost alone, a lot of money would have been left on the table.

In short, pricing takes a lot of understanding — and a lot of testing. At MoS, we tested prices constantly before settling on the price that was best for us.

Remember: if people are complaining that prices are too high, that tells you something. Conversely, if nobody is complaining about your price, then it’s likely too low.

As for why all of of our prices end with an ’8′? Because it’s a lucky number and looks nice. Hey, not everything is a science – even if you are a business school student.

Kit Hickey is the co-founder of Ministry of Supply, a brand which is inventing the future of men’s professional wear. The company has been featured in NYT, TechCrunch, Inc., Forbes and Elle Magazine. In addition, Kit is a lover of mountain sports and has half an MBA from MIT. Follow her: @kit_hickey

9 Simple Tips to Actually Meet The Right People at SXSW

Learn Who’s Attending Ahead of Time

“Check in with people you want to catch up with to see when they’ll be onsite, and get on their calendars in advance. Once the event starts, send them a quick text or email to remind them about your meeting. Large conferences are too chaotic to ensure that you’ll just casually run into people. You have to make a concerted effort to ensure that the most innocuous of gatherings actually happen.”

Alexandra Levit, Inspiration at Work

Don’t Listen to the Talks

“Most speakers are covering material that can be found all over the Internet. If you want to meet people, hang out in the lobby and the hallways. Strategically position yourself in places that everybody has to walk through, which maximizes your likelihood of bumping into the right people. If you have friends attending, ask them for help with intros to the right kind of people.”

Emerson Spartz, Spartz

Leave Room for Serendipity

“You’ll want to line up some meetings ahead of time, but don’t forget to leave room in your schedule for grabbing lunch with the people you just met or sitting down for an impromptu talk. The benefit of being in the same place as a bunch of interesting people is that you can get very lucky and meet someone without any planning.”

Thursday Bram, Hyper Modern Consulting

Partner With Connectors

“The best way to meet interesting people is through a warm introduction. There are two ways to find introductions at events: through individuals or through brands. Figure out how to add value to an individual so he or she will take the time to make introductions. Similarly, you can volunteer to help a brand at the event so you will be around when others contact them. “

Aaron Schwartz, Modify Watches

Get Exponential Introductions

“My strategy is to always meet a few awesome people early and ask them for the best one to two people they know that I need to know. Meet new people, then repeat this process as often as possible. With the right seed connectors, this can last through the whole event.”

Neil Thanedor, LabDoor

Book All Your Essential Meetings Ahead of Time

“When we send employees to a conference, we often have up to 25 meetings set in advance for them, along with specifically tailored agendas for each contact. By doing an aggressive email campaign before the conference, you can often confirm meetings well in advance so all you have to do once you’re there is go from appointment to appointment.”

Michael Costigan, Youth Leadership Specialist

Go Without a Schedule

“I have settled on the opposite of strategy — I just go and see what happens. If you go with a plan, you’ll struggle at SXSW because there’s no way you’ll stick to it. There’s no point in setting goals you can’t meet. SXSW is a week of serendipity. Who are the right people? You don’t know yet. Random meetings turn into meeting the right people.”

Andrew Angus, Switch Video

Be a Good Date

“There is a preparation process every time you’re about to go on a date: time, place, outfit and even a prospective conversation plan! That’s true of conferences as well. See what events are happening and who will likely attend in order to plan your agenda for a big industry conference. Select a couple of key events, meet some out-of-town business prospects and let the conversations start!”

Lauren Perkins, Perks Consulting

Forget Going to the Conference

“If you are seriously interested in only meeting people, forget the $600 conference badge — just go for the weekend to hang out. You don’t meet many people sitting and listening to talks, but if you know how to work the room over cocktails or know someone to get you into the right parties, then you will have accomplished your mission.”

Matt Wilson, Under30Experiences

Thankfully, the best startup conference is currently only $150, but time’s running out on early adopter tickets. Join us and some great speakers and investors on April 30-May 2. Head over to eetennessee.com to get yours now!

8 Tips You Should Read Before Raising A Seed Round

Minutes before the first meeting of my startup’s seed round, a wise advisor pulled me aside. “This is going to be wild,” he warned, with a knowing smile. “Brace yourself.”

Several months later, after raising $850,000 for my startup, ReelGenie, the ride has stopped (for now). I hopped off the fundraising roller coaster with memories of unexpected thrills, a few bruises, and many lessons for the future.

Here are eight things that I know now that I wish I’d known then:

Network like there’s no tomorrow. You never know where you’ll meet a future investor. ReelGenie’s investors include professors of mine from years ago, former co-workers, and individuals who I met at an event and loved spending time with. Put yourself out there. Unless you’re already rich and/or famous — and if you’re reading this article, that’s probably not the case —investors won’t just flock to you.
Cast a wide net, smartly. Most people you talk to will say no. So play the numbers game. The more potential investors you speak with, the higher your chances of success. But I say that with two caveats. First, do some homework so you’re targeting people who are likely to love your deal, rather than wasting time with those who won’t. Second, stay organized. Keep track of every communication you make. If you can’t convince an investor that you’re equipped to handle fundraising, good luck convincing them you can run a company.
Seek out points of validation. If I never hear the phrase herd mentality again, I’ll be a very happy man. But the reality is that’s how fundraising works. Investors don’t want to be alone if the ship sinks. Lock down a few smart investors early. Get early adopters and evangelists for your funding, just like you do for your product or service. And find a lead investor. He or she doesn’t have to put in the most money, but a respected investor running the process will give others more confidence in your deal and help speed things up.
Find investors who can do more than just write a check. Chances are you’re relatively inexperienced and going up against competitors with deeper pockets. So how do you tip the scales in your favor? Use the fundraising process to find helpful advisors. The best investors are those who can give you strategic guidance, make introductions, and write a big check (today and in your future rounds). Not all investors are good for your company. This is especially true in the current environment of the Series A crunch. Plan a few steps ahead. Your fundraising goal should be to find long-term partners, not a short-term cash infusion.
Valuation is what the market will bear. Just because your friend raised $5 million at a $15 million pre-money valuation doesn’t mean that you should too. Investors are willing to pay what they think the company’s worth, so don’t set yourself up for disappointment. Securing ample funding for your company should be a higher priority than your dilution. With that said, shop around. Don’t accept the first offer. The earlier you start fundraising and the less desperate you seem, the better your chances of getting multiple bids — and a valuation you’ll be excited about.
Don’t let fundraising take over your business (or your life). As the CEO of a company, your first priority is running the company. It’s not rocket science, but it’s hard to keep that perspective when fundraising season rolls around. The emotional strain is inevitable. One day you’re riding high off a great meeting, the next day you‘re sadly marveling at how many different ways someone can tell you no. It’s important to put your blinders on. Set aside time for fundraising each day. If you do, you will get things done. Finding customers and motivating your employees will come more easily. As your metrics improve, so will your odds of raising money and your valuation.
You can raise money outside of Silicon Valley. Most of our investors are on the opposite side of the country, in Washington, D.C. Listening to entrepreneurs, you’d think raising capital is harder than getting a bill through Congress. It’s not. As Tech Cocktail recently reported, the D.C. angel scene is alive and well. And there’s money to be found in your city, too. You don’t need to move to the Valley. But you do need to be tenacious in networking (see #1) and understand what investors in your area are looking for. Tailor your pitch to your environment. And if that doesn’t work, hop on a train or a bus to meet with investors in other cities. Now more than ever, capital is mobile. You should be too.
Say “Thank you.” A lot. One of my favorite books is Robert Fulghum’s All I Really Need to Know I Learned in Kindergarten. Twenty-five years (and two degrees) after I graduated kindergarten, it’s amazing how the simple lessons of life haven’t changed. Remember, investors are deciding whether to give you money. A great business plan is worth less if you’re a jerk. So be thoughtful. Say thank you when someone makes an introduction or takes a meeting. Follow up. Be a giver, not a taker (and read Adam Grant’s fascinating new book to learn what that means). Put a personal touch on every call or email. By simply being polite and respectful, you’ll give yourself a leg up in fundraising, if not in all aspects of your business.

David Adelman is the Founder and CEO of ReelGenie, an online platform that revolutionizes the way stories are told and shared. David is also Founder and CEO of Reel Tributes, the premier producer of high-end documentary films. Reel Tributes’ films preserve timeless stories and memories for families and family-owned businesses.