There is a difference between an entrepreneur and small-business owner.

We have gotten a bit carried away with the “entrepreneur” label. Stop it. So many business people are now considered entrepreneurs that it is now easier to figure out who’s who if we just have the non-entrepreneurs raise their hands.

Too often, I see people confusing entrepreneurs with small-business owners. A lot more people are qualified to run a Jamba Juice than take companies from inception, through market traction, funding, growth and eventual IPO or exit.

As someone who has founded a number of startups and had successful acquisitions, I am an entrepreneur. Our characteristics have been documented, analyzed, listed endlessly, and mostly, it’s all missed the point. We need to understand the differences between the two.

These fundamental definitions and an understanding of their roles will shape the future economy with more force than we may realize.

The entrepreneurs I know…

The fruit of an entrepreneur's labor is the insatiable need for more, more and more. We can’t stop, and we’re not being hyperbolic when we say that.

Despite the purveying assumption, entrepreneurs are far from fearless. In fact, entrepreneurs are less driven by some moral authority or economic reward and more by the paralyzing fear of failure and the fear of missed opportunity. The true fear is not living up to what the entrepreneur truly believes is the maximized opportunity. This fear of perceived failure is worse than failure itself. Silicon Valley types don’t celebrate failure, because they’re full of themselves; they celebrate it because it’s too hard to look at themselves in the mirror when they fail. The concept of “failing forward” or “you aren’t pushing hard enough if you aren’t failing” are all mantras that make some entrepreneurs too happy to just continue to rinse and repeat the venture life-cycle.

Nonetheless, VC funding pours in, and the population of “entrepreneurs” continues to grow. There’s no shortage of incubators accelerators and free infrastructure (increasing at an average of 50% each year ) to support our efforts and feed our endeavors.

X  (previously Google X) says that “instead of a mere 10 percent gain, a moonshot aims for a 10x improvement over what currently exists. The combination of a huge problem, a radical solution to that problem, and the breakthrough technology that just might make that solution possible, is the essence of a moonshot.” What’s missing here is the fact that it takes an entrepreneur’s Draconian thirst to add 10x the ambition with no predefined path, a healthy amount of someone else’s money, and the ability to convince others to join them on the crazy journey.

Those are the entrepreneurs I know. And if nothing else, that description is more accurate than what we’ve been hearing for the past decade. Entrepreneurs don’t dare to be different, they are different.

You might be a small-business owner if…

Small-business owners, on the contrary, build businesses incrementally, bit by bit. They often solve smaller, localized problems with their business and are not looking to radically move the needle. They’re the broad base of employment in America for this reason -- they cover a lot of surface area, but aren’t disrupting the status quo, creating entire new fields, or accelerating an entire market forward.

Small-business owners seek lower risk -- if it’s a moonshot, it’s by accident. It all tracks back to a timeline that maps far beyond that of entrepreneurs. Small businesses are created with the goal of sustaining a living for the owners and their employees. There’s nothing special or serial about them. These are the people you should ask about work-life balance in an interview.

Furthermore, their products and services often live in the realm of known and established offerings. They live and operate in their local community first and foremost. The local automotive store down the street who’s been there for 50 years? The one who just opened up who will be there for another 50? Those are both small-business owners, tokens of their community who’s definition of winning comes down to how confident they’ll be opening their doors tomorrow. Their broken definition of winning is really about surviving and relative thriving but not truly winning.

The VCs aren’t there to back them or their 15 percent growth models, their march to profitability is a steady cadence of tactical steps in a defined direction with low risk with even lower return. While that direction may change, it’s not at the whim of the market or investor pressure. There is also little pivoting or course correction because small-business owners aren’t looking to discover a new world, but instead just happy with walking the well-established path.

Interestingly, bigger isn’t always better for them. It’s the one facet of their business that has held lasting value with customers through the years. Thinking and branding small and local has helped small businesses weather an onslaught of competition from big box stores and franchises for decade. In fact, according to the US Small Business Administration, small businesses currently make up 48 percent of US employees. They also make up 99.7 percent of US businesses.  

If entrepreneurs are our economy’s moonshots, small business owners are the gravity that keeps our system grounded.

Decoupling is the only way

While both entrepreneurs and small-business owners may have some similar entrepreneurial genes at their core, we can’t ignore the differences between the two that ultimately define their role in our economy. We shouldn’t be angry that everyone isn’t an entrepreneur, but celebrate it. The world and economy needs balance.

Entrepreneurs, at their core, are rare, transformative and risky. They are going to propel the society forward with big leaps of creative disruption. Small-business owners give us a stable base that de-risks the moonshots and protects us from the fallout of failures.

I’m not asking you to make a value judgement of one over the other, but consider this: we’ve been encouraging people to become entrepreneurs for decades and the startup failure rate has reached 90 percent.

We should want everyone to be an entrepreneur. It’s not about separating the professionals from the amateurs, either. It’s about responsible approaches to economic growth and societal change.

Let the change agents do the change -- real entrepreneurs are well-suited to shape the future. We need small-business owners to anchor our present, and too many of them are being lured away from that important work by an inauthentic, woefully misguided perception of what it means to be an entrepreneur.

We need to strike the right balance of the two, and that starts with vocabulary and perceptions. Imagine if all businesses had a 90 percent failure rate? What if no businesses made giant breakthroughs? When the balance between small business people and entrepreneurs gets out of whack, we can do remarkable harm.

 

What Is Leadership?

Leaders are people who do the right thing; managers are people who do things right.– Professor Warren G. Bennis

Leadership is the art of getting someone else to do something you want done because he wants to do it.– Dwight D. Eisenhower

The word "leadership" can bring to mind a variety of images. For example:

  • A political leader, pursuing a passionate, personal cause.
  • An explorer, cutting a path through the jungle for the rest of his group to follow.
  • An executive, developing her company's strategy to beat the competition.

Leaders help themselves and others to do the right things. They set direction, build an inspiring vision, and create something new. Leadership is about mapping out where you need to go to "win" as a team or an organization; and it is dynamic, exciting, and inspiring. 

Yet, while leaders set the direction, they must also use management skills to guide their people to the right destination, in a smooth and efficient way.

In this article, we'll focus on the process of leadership. In particular, we'll discuss the "transformational leadership" model, first proposed by James MacGregor Burns and then developed by Bernard Bass. This model highlights visionary thinking and bringing about change, instead of management processes that are designed to maintain and steadily improve current performance.

Note:

Leadership means different things to different people around the world, and different things in different situations. For example, it could relate to community leadership, religious leadership, political leadership, and leadership of campaigning groups.

This article focuses on the Western model of individual leadership, and discusses leadership in the workplace rather than in other areas.

Leadership: A Definition

According to the idea of transformational leadership , an effective leader is a person who does the following:

  1. Creates an inspiring vision of the future.
  2. Motivates and inspires people to engage with that vision.
  3. Manages delivery of the vision.
  4. Coaches and builds a team, so that it is more effective at achieving the vision.

Leadership brings together the skills needed to do these things. We'll look at each element in more detail.

1. Creating an Inspiring Vision of the Future

In business, a vision is a realistic, convincing and attractive depiction of where you want to be in the future. Vision provides direction, sets priorities, and provides a marker, so that you can tell that you've achieved what you wanted to achieve.

To create a vision, leaders focus on an organization's strengths by using tools such as Porter's Five Forces , PEST Analysis , USP Analysis , Core Competence Analysis  and SWOT Analysis  to analyze their current situation. They think about how their industry is likely to evolve, and how their competitors are likely to behave. They look at how they can innovate successfully , and shape their businesses and their strategies to succeed in future marketplaces. And they test their visions with appropriate market research, and by assessing key risks using techniques such as Scenario Analysis .

Therefore, leadership is proactive – problem solving, looking ahead, and not being satisfied with things as they are.

Once they have developed their visions, leaders must make them compelling and convincing. A compelling vision  is one that people can see, feel, understand, and embrace. Effective leaders provide a rich picture of what the future will look like when their visions have been realized. They tell inspiring stories , and explain their visions in ways that everyone can relate to.

Here, leadership combines the analytical side of vision creation with the passion of shared values, creating something that's really meaningful to the people being led.

2. Motivating and Inspiring People

A compelling vision provides the foundation for leadership. But it's leaders' ability to motivate and inspire people that helps them deliver that vision.

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For example, when you start a new project, you will probably have lots of enthusiasm for it, so it's often easy to win support for it at the beginning. However, it can be difficult to find ways to keep your vision inspiring after the initial enthusiasm fades, especially if the team or organization needs to make significant changes in the way that it does things. Leaders recognize this, and they work hard throughout the project to connect their vision with people's individual needs, goals and aspirations.

One of the key ways they do this is through Expectancy Theory . Effective leaders link together two different expectations:

  1. The expectation that hard work leads to good results.
  2. The expectation that good results lead to attractive rewards or incentives.

This motivates people to work hard to achieve success, because they expect to enjoy rewards – both intrinsic and extrinsic – as a result.

Other approaches include restating the vision in terms of the benefits it will bring to the team's customers, and taking frequent opportunities to communicate the vision in an attractive and engaging way.

What's particularly helpful here is when leaders have expert power . People admire and believe in these leaders because they are expert in what they do. They have credibility, and they've earned the right to ask people to listen to them and follow them. This makes it much easier for these leaders to motivate and inspire the people they lead.

Leaders can also motivate and influence people through their natural charisma and appeal, and through other sources of power , such as the power to pay bonuses or assign tasks to people. However, good leaders don't rely too much on these types of power to motivate and inspire others.

3. Managing Delivery of the Vision

This is the area of leadership that relates to management .

Leaders must ensure that the work needed to deliver the vision is properly managed – either by themselves, or by a dedicated manager or team of managers to whom the leader delegates this responsibility – and they need to ensure that their vision is delivered successfully.

To do this, team members need performance goals that are linked to the team's overall vision.

Leaders also need to make sure they manage change  effectively. This helps to ensure that the changes needed to deliver the vision are implemented smoothly and thoroughly, with the support and backing of the people affected.

4. Coaching and Building a Team to Achieve the Vision

Individual and team development are important activities carried out by transformational leaders. To develop a team, leaders must first understand team dynamics. Several well-established and popular models describe this, such as Belbin's Team Roles  approach, and Bruce Tuckman's Forming, Storming, Norming, and Performing theory .

A leader will then ensure that team members have the necessary skills and abilities to do their job and achieve the vision. They do this by giving and receiving feedback  regularly, and by training and coaching  people to improve individual and team performance.

Leadership also includes looking for leadership potential  in others. By developing leadership skills within your team, you create an environment where you can continue success in the long term. And that's a true measure of great leadership.

Note:

The words "leader" and "leadership" are often used incorrectly to describe people who are actually managing. These individuals may be highly skilled, good at their jobs, and valuable to their organizations – but that just makes them excellent managers, not leaders.

So, be careful how you use the terms, and don't assume that people with "leader" in their job titles, people who describe themselves as "leaders," or even groups called "leadership teams" are actually creating and delivering transformational change.

A particular danger in these situations is that people or organizations that are being managed by such an individual or group think they're being led; but they're not. There may actually be no leadership at all, with no one setting a vision and no one being inspired. This can cause serious problems in the long term.

Key Points

Leadership can be hard to define and it means different things to different people.

In the transformational leadership model, leaders set direction and help themselves and others to do the right thing to move forward. To do this they create an inspiring vision, and then motivate and inspire others to reach that vision. They also manage delivery of the vision, either directly or indirectly, and build and coach their teams to make them ever stronger.

Effective leadership is about all of this – and it's exciting to be part of this journey!

Nizar Ayadi is the founder and CEO of Application University. Application University provide education relevant to industry demand. Whenever you are looking for new career or to build your own start-up, we can help. Join our growing community today for free.

How to Write the Financial Section of a Business Plan

An outline of your company's growth strategy is essential to a business plan, but it just isn't complete without the numbers to back it up. Here's some advice on how to include things like a sales forecast, expense budget, and cash-flow statement.

A business plan is all conceptual until you start filling in the numbers and terms. The sections about your marketing plan and strategy are interesting to read, but they don't mean a thing if you can't justify your business with good figures on the bottom line. You do this in a distinct section of your business plan for financial forecasts and statements. The financial section of a business plan is one of the most essential components of the plan, as you will need it if you have any hope of winning over investors or obtaining a bank loan. Even if you don't need financing, you should compile a financial forecast in order to simply be successful in steering your business.

"This is what will tell you whether the business will be viable or whether you are wasting your time and/or money," says Linda Pinson, author of Automate Your Business Plan for Windows (Out of Your Mind 2008) and Anatomy of a Business Plan (Out of Your Mind 2008), who runs a publishing and software business Out of Your Mind and Into the Marketplace. "In many instances, it will tell you that you should not be going into this business."

The following will cover what the financial section of a business plan is, what it should include, and how you should use it to not only win financing but to better manage your business.

How to Write the Financial Section of a Business Plan: The Purpose of the Financial Section

Let's start by explaining what the financial section of a business plan is not. Realize that the financial section is not the same as accounting. Many people get confused about this because the financial projections that you include--profit and loss, balance sheet, and cash flow--look similar to accounting statements your business generates. But accounting looks back in time, starting today and taking a historical view. Business planning or forecasting is a forward-looking view, starting today and going into the future.

"You don't do financials in a business plan the same way you calculate the details in your accounting reports," says Tim Berry, president and founder of Palo Alto Software, who blogs at Bplans.com and is writing a book, The Plan-As-You-Go Business Plan. "It's not tax reporting. It's an elaborate educated guess."

What this means, says Berry, is that you summarize and aggregate more than you might with accounting, which deals more in detail. "You don't have to imagine all future asset purchases with hypothetical dates and hypothetical depreciation schedules to estimate future depreciation," he says. "You can just guess based on past results. And you don't spend a lot of time on minute details in a financial forecast that depends on an educated guess for sales."

The purpose of the financial section of a business plan is two-fold. You're going to need it if you are seeking investment from venture capitalists, angel investors, or even smart family members. They are going to want to see numbers that say your business will grow--and quickly--and that there is an exit strategy for them on the horizon, during which they can make a profit. Any bank or lender will also ask to see these numbers as well to make sure you can repay your loan.

But the most important reason to compile this financial forecast is for your own benefit, so you understand how you project your business will do. "This is an ongoing, living document. It should be a guide to running your business," Pinson says. "And at any particular time you feel you need funding or financing, then you are prepared to go with your documents."

If there is a rule of thumb when filling in the numbers in the financial section of your business plan, it's this: Be realistic. "There is a tremendous problem with the hockey-stick forecast" that projects growth as steady until it shoots up like the end of a hockey stick, Berry says. "They really aren't credible." Berry, who acts as an angel investor with the Willamette Angel Conference, says that while a startling growth trajectory is something that would-be investors would love to see, it's most often not a believable growth forecast. "Everyone wants to get involved in the next Google or Twitter, but every plan seems to have this hockey stick forecast," he says. "Sales are going along flat, but six months from now there is a huge turn and everything gets amazing, assuming they get the investors' money." 

The way you come up a credible financial section for your business plan is to demonstrate that it's realistic. One way, Berry says, is to break the figures into components, by sales channel or target market segment, and provide realistic estimates for sales and revenue. "It's not exactly data, because you're still guessing the future. But if you break the guess into component guesses and look at each one individually, it somehow feels better," Berry says. "Nobody wins by overly optimistic or overly pessimistic forecasts."

How to Write the Financial Section of a Business Plan: The Components of a Financial Section

A financial forecast isn't necessarily compiled in sequence. And you most likely won't present it in the final document in the same sequence you compile the figures and documents. Berry says that it's typical to start in one place and jump back and forth. For example, what you see in the cash-flow plan might mean going back to change estimates for sales and expenses.  Still, he says that it's easier to explain in sequence, as long as you understand that you don't start at step one and go to step six without looking back--a lot--in between.

 

  • Start with a sales forecast. Set up a spreadsheet projecting your sales over the course of three years. Set up different sections for different lines of sales and columns for every month for the first year and either on a monthly or quarterly basis for the second and third years. "Ideally you want to project in spreadsheet blocks that include one block for unit sales, one block for pricing, a third block that multiplies units times price to calculate sales, a fourth block that has unit costs, and a fifth that multiplies units times unit cost to calculate cost of sales (also called COGS or direct costs)," Berry says. "Why do you want cost of sales in a sales forecast? Because you want to calculate gross margin. Gross margin is sales less cost of sales, and it's a useful number for comparing with different standard industry ratios." If it's a new product or a new line of business, you have to make an educated guess. The best way to do that, Berry says, is to look at past results.
  • Create an expenses budget. You're going to need to understand how much it's going to cost you to actually make the sales you have forecast. Berry likes to differentiate between fixed costs (i.e., rent and payroll) and variable costs (i.e., most advertising and promotional expenses), because it's a good thing for a business to know. "Lower fixed costs mean less risk, which might be theoretical in business schools but are very concrete when you have rent and payroll checks to sign," Berry says. "Most of your variable costs are in those direct costs that belong in your sales forecast, but there are also some variable expenses, like ads and rebates and such." Once again, this is a forecast, not accounting, and you're going to have to estimate things like interest and taxes. Berry recommends you go with simple math. He says multiply estimated profits times your best-guess tax percentage rate to estimate taxes. And then multiply your estimated debts balance times an estimated interest rate to estimate interest.
  • Develop a cash-flow statement. This is the statement that shows physical dollars moving in and out of the business. "Cash flow is king," Pinson says. You base this partly on your sales forecasts, balance sheet items, and other assumptions. If you are operating an existing business, you should have historical documents, such as profit and loss statements and balance sheets from years past to base these forecasts on. If you are starting a new business and do not have these historical financial statements, you start by projecting a cash-flow statement broken down into 12 months. Pinson says that it's important to understand when compiling this cash-flow projection that you need to choose a realistic ratio for how many of your invoices will be paid in cash, 30 days, 60 days, 90 days and so on. You don't want to be surprised that you only collect 80 percent of your invoices in the first 30 days when you are counting on 100 percent to pay your expenses, she says. Some business planning software programs will have these formulas built in to help you make these projections.
  • Income projections. This is your pro forma profit and loss statement, detailing forecasts for your business for the coming three years. Use the numbers that you put in your sales forecast, expense projections, and cash flow statement. "Sales, lest cost of sales, is gross margin," Berry says. "Gross margin, less expenses, interest, and taxes, is net profit."
  • Deal with assets and liabilities. You also need a projected balance sheet. You have to deal with assets and liabilities that aren't in the profits and loss statement and project the net worth of your business at the end of the fiscal year. Some of those are obvious and affect you at only the beginning, like startup assets. A lot are not obvious. "Interest is in the profit and loss, but repayment of principle isn't," Berry says. "Taking out a loan, giving out a loan, and inventory show up only in assets--until you pay for them." So the way to compile this is to start with assets, and estimate what you'll have on hand, month by month for cash, accounts receivable (money owed to you), inventory if you have it, and substantial assets like land, buildings, and equipment. Then figure out what you have as liabilities--meaning debts. That's money you owe because you haven't paid bills (which is called accounts payable) and the debts you have because of outstanding loans.
  • Breakeven analysis. The breakeven point, Pinson says, is when your business's expenses match your sales or service volume. The three-year income projection will enable you to undertake this analysis. "If your business is viable, at a certain period of time your overall revenue will exceed your overall expenses, including interest." This is an important analysis for potential investors, who want to know that they are investing in a fast-growing business with an exit strategy.

How to Write the Financial Section of a Business Plan: How to Use the Financial Section

One of the biggest mistakes business people make is to look at their business plan, and particularly the financial section, only once a year. "I like to quote former President Dwight D. Eisenhower," says Berry. "'The plan is useless, but planning is essential.' What people do wrong is focus on the plan, and once the plan is done, it's forgotten. It's really a shame, because they could have used it as a tool for managing the company." In fact, Berry recommends that business executives sit down with the business plan once a month and fill in the actual numbers in the profit and loss statement and compare those numbers with projections. And then use those comparisons to revise projections in the future.

Pinson also recommends that you undertake a financial statement analysis to develop a study of relationships and compare items in your financial statements, compare financial statements over time, and even compare your statements to those of other businesses. Part of this is a ratio analysis. She recommends you do some homework and find out some of the prevailing ratios used in your industry for liquidity analysis, profitability analysis, and debt and compare those standard ratios with your own.

"This is all for your benefit," she says. "That's what financial statements are for. You should be utilizing your financial statements to measure your business against what you did in prior years or to measure your business against another business like yours." 

If you are using your business plan to attract investment or get a loan, you may also include a business financial history as part of the financial section. This is a summary of your business from its start to the present. Sometimes a bank might have a section like this on a loan application. If you are seeking a loan, you may need to add supplementary documents to the financial section, such as the owner's financial statements, listing assets and liabilities.

All of the various calculations you need to assemble the financial section of a business plan are a good reason to look for business planning software, so you can have this on your computer and make sure you get this right. Software programs also let you use some of your projections in the financial section to create pie charts or bar graphs that you can use elsewhere in your business plan to highlight your financials, your sales history, or your projected income over three years.

"It's a pretty well-known fact that if you are going to seek equity investment from venture capitalists or angel investors," Pinson says, "they do like visuals."

Nizar Ayadi is the founder and CEO of Application University. Application University provide education relevant to industry demand. Whenever you are looking for new career or to build your own start-up, we can help. Join our growing community today for free.

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5 Reasons Why You Won't Reach Your Business Goals

Many entrepreneurs desire to be successful not only in business, but also in their personal life. It takes skills, dedication, time and focus to build a successful business. Those same attributes are required to succeed in fitness, and maintain a healthy lifestyle over the long-term. Unfortunately, many discover that succeeding with their health while thriving in business isn’t as simple as picking a diet and workout routine.  Just as excelling in business requires a bias for action and a focus on the little details, accomplishing your health and fitness goals requires the same. If you’re stuck with your health and business goals right now, here are five reasons why progress isn't happening.

1. You're an information junkie.

Reading marketing tip after marketing tip isn’t going to progress your business without taking action. Reading workout book after workout book without implementation is useless. Researching diet after diet without implementing the advice is a waste. Seeking more and more information is procrastination in disguise. The odds of taking action decreases as we’re inundated with choice after choice. This is a classic example of information overload, which will lead to decision fatigue. You’ll never feel fully prepared and ready. Start where you are, and with what you know, and make adjustments as you go along your journey.

2. You allow the wrong people into your environment.

You are your environment. Your environment plays a pivotal role in determining the outcome of your goals. If you surround yourself with people, who operate in a scarce and pessimistic mindset, expect your mindset to follow suit. Surrounding yourself with these types of people addsextra layers of difficulty to your health and business goals. If you want to achieve your goals, you need to distance yourself from negative people. Only give your time to people who elevate and inspire you to become a better version of yourself.

3. You let social media seduce you into the comparison game.

Log in to Facebook, and someone is sharing rapid weight loss results, or someone is sharing their impressive income reports. Social media is both a gift and a curse of our hyper-connected world. It can be inspiring, but it can be deflating if you start to compare.

It’s tempting to compare your journey and progress with someone else’s but resist doing so. Each of our journeys is personal and have their own specific timetables.

The danger of playing the comparison game is only seeing someone’s final copy, not their rough draft. Set goals that are specific to you, and focus on your own journey.

4. You play the waiting game.

There’s one guarantee in life - we’re all going to die. We don’t know when, but it will happen.

Knowing that our life is on a clock that will expire, we need to maximize each day to the best of our abilities. Waiting for the motivation fairy to arrive is a mistake.

There isn’t a perfect moment to start. Today is the perfect day to get started toward becoming a healthier version of yourself and going after that dream business. Tomorrow isn’t promised.

The world rewards those who take imperfect action, not those who plan and wait for perfection.

 

5. You equate busy with productive.

When working toward a goal, we often times equate the amount of time put into the project with the expected outcome.

But achieving optimal health and building a successful business is about quality over quantity. Achieving your business and health goals requires hard work and time. But most importantly, it requires the proper strategy supplemented with intentional action.

Just doing an activity for the sake of it isn’t good enough. You need to have benchmarks and targets that you’re trying to reach. You can exercise for two hours at the gym each day and work on your business for 10 hours each day. But if you aren’t approaching your goals with the proper strategy, you're going to end up frustrated.

SADDEST story ever told in Hollywood!

This is one of the SADDEST stories ever told in Hollywood. His name is Sylvester Stallone. One of the BIGGEST and Most famous American Movie superstars. Back in the day, Stallone was a struggling actor in every definition. At some point, he got so broke that he stole his wife's jewellery and sold it. Things got so bad that he even ended up homeless. Yes, he slept at the New York bus station for 3 days. Unable to pay rent or afford food. His lowest point came when he tried to sell his dog at the liquor store to any stranger. He didn't have money to feed the dog anymore. He sold it at $25 only. He says he walked away crying.

Two weeks later, he saw a boxing match between Mohammed Ali and Chuck Wepner and that match gave him the inspiration to write the script for the famous movie, ROCKY. He wrote the script for 20 hours! He tried to sell it and got an offer for $125,000 for the script. But he had just ONE REQUEST. He wanted to STAR in the movie. He wanted to be the MAIN ACTOR. Rocky himself. But the studio said NO. They wanted a REAL STAR.

They said he "Looked funny and talked funny". He left with his script. A few weeks later,the studio offered him $250,000 for the script. He refused. They even offered $350,000. He still refused. They wanted his movie. But NOT him. He said NO. He had to be IN THAT MOVIE.

After a while,the studio agreed, gave him $35,000 for the script and let him star in it! The rest is history! The movie won Best Picture, Best Directing and Best Film Editing at the prestigious Oscar Awards. He was even nominated for BEST ACTOR! The Movie ROCKY was even inducted into the American National Film Registry as one of the greatest movies ever!

And do you know the first thing he bought with the $35,000? THE DOG HE SOLD. Yes, Stallone LOVED HIS DOG SO MUCH that he stood at the liquor store for 3 days waiting for the man he sold his dog to. And on the 3rd day, he saw the man coming with the dog. Stallone explained why he sold the dog and begged for the dog back. The man refused. Stallone offered him $100. The
man refused. He offered him $500. And the guy refused. Yes, he refused even $1000. And, Believe it or Not, Stallone had to pay $15,000 for the same,same dog he sold at $25 only! And he finally got his dog back!

And today,the same Stallone who slept in the streets and sold his dog JUST BECAUSE he couldn't even feed it anymore, is one of the GREATEST Movie Stars who ever walked the Earth!

Being broke is BAD. Really BAD. Have You ever had a dream? A wonderful dream? But You are too broke to implement it? Too tiny to do it? Too small to accomplish it? Damn! I've been there too many times!

Life is tough. Opportunities will pass you by,just because you are a
NOBODY. People will want your products but NOT YOU. Its a tough
world. If you ain't already famous, or rich or "connected", you will find it rough.

Doors will be shut on You. People will steal your glory and crush your hopes. You will push and push. And yet NOTHING WILL HAPPEN.

And then your hopes will be crushed. You will be broke. Damn broke. You will do odd jobs for survival. You will be unable to feed yourself. And Yes, you may end up sleeping in the streets.
It happens. Yes, it does.

BUT NEVER LET THEM CRUSH THAT DREAM. Whatever happens to
You, Keep Dreaming. Even when they crush your hopes, Keep Dreaming. Even when they turn you away, Keep Dreaming. Even when they shut you down, Keep Dreaming.

NO ONE KNOWS WHAT YOU ARE CAPABLE OF EXCEPT YOURSELF! People will judge You by HOW you look. And by WHAT You have. But please, Fight on! Fight for Your place in history. Fight for your glory. NEVER EVER GIVE UP!

Even if it means selling all your clothes and sleeping with the dogs, IT'S OKAY! But AS LONG AS YOU ARE STILL ALIVE, Your STORY IS NOT OVER. TRUST ME.

Keep Up the Fight. Keep your dreams and hope alive. Go great.

Like, share and comment if inspired!

Nizar Ayadi is the founder and CEO of Application University. Application University provide education relevant to industry demand. Whenever you are looking for new career or to build your own start-up, we can help. Join our growing community today for free.

Here are all the new products Facebook announced at F8

Facebook’s theme of the day on Tuesday: Alternate realities.

The social giant hosted thousands of developers in San Jose Tuesday for the first day of F8, its annual developer conference.

CEO Mark Zuckerberg headlined the company’s keynote in his signature gray t-shirt and blue jeans, and spent almost 20 minutes outlining Facebook’s new augmented reality platform, a new way for developers to build features into Facebook’s built-in camera that add digital graphics to the real world you see through the lens.

Simple versions of what Zuckerberg has in mind already exist in the real world: Face-distorting filters that Snapchat popularized are one examples, and so is the mobile game Pokémon Go.

“Think about how many of the things you use [that] don’t actually need to be physical,” Zuckerberg told Recode in an interview where he outlined his broader AR vision, which includes AR glasses. “A key part of that journey is making an open platform where any developer can create anything they want,” he added.

Facebook launched that platform Tuesday, but it wasn’t the only major update.

  • A New “Social VR” product: Facebook is beta testing a new social VR product called Spaces that lets users create an avatar, then “meet up” with other users’ avatars in a digital world. It’s an effort to turn VR, which has historically been a solo activity, into a group activity. Users can chat and gesture with their arms, draw pictures or watch a YouTube video. The challenge, as with all VR products, is scale. How do you convince people to buy a headset in order to spend time together in a virtual world? Explained Rachel Franklin, Facebook’s head of social VR, in an interview with Recode: “If we can do a good enough job of having you feel [an actual emotional connection] in VR, then the hardware purchase becomes a no-brainer.”
  • A better way to find bots: Facebook Messenger has tens of thousands of bots on its platform, but they are hard to find. So Messenger is launching a dedicated discovery tab and new QR codes that, when scanned, bring users directly into conversation with a bot. QR codes are big in messaging apps in Asia, but haven’t caught on here in the United States, including when Messenger has tried them before. “But we’re going to give this another go,” Messenger boss David Marcus said.
  • More partners for Facebook Workplace: Facebook has an enterprise version of its social network, called Workplace, that it launched last fall. Now Workplace is partnering with a bunch of enterprise partners, like Microsoft, Box, Quip and Salesforce, so that it’s easier to share and organize files. Workplace also opened up its platform so developers can make custom bots specific to their organization’s needs.

F8 continues with Day Two on Wednesday, and we expect the company will talk more about its hardware ambitions. The keynotes begin at 10 am PT and you can watch it here.

Six Points that will help you go viral on LinkedIn:

1) First step is to nail the post wording

Identify your audience and add a personal touch to it. The personal touch, I feel, is key. Pragmatic posts that really teach you an important capability together with motivational posts based on a person’s story seem to do the best. Note – this is based on observation only and not on LinkedIn data.

2) Post often. If you publish your own article - use an average of 800 words

3) Make it visual

Photo is worth a thousand words and people tend to click more on photos. Use a sincere and personal photo, it will be clicked more often than no photos or stock photos.

4) Post during work hours

I found on myself that posts I publish Monday-Wednesday mid day do best. Weekend goes almost silent.

5) Promote your post on LinkedIn and other social media

Get as many people to comment it. If not comment – get them to like it. Use other social media channels and your email list to drive traffic to your posts.

Don’t spam!

But you can ask a few advocates and even influencers to let you know what they think and if they like it – comment.

6) Respond and be personable

Reply to comments in a staggered manner. A few replies a day so you can spread your responses to more days.

The faster your post picks up views and the more engagement that happens in a short time frame, the more likely that LinkedIn will take notice of all that activity and decide to promote your post and surface it all over the platform.

Once that happens, you're about to go viral!

Don’t forget to Comment below on what worked or didn’t work for you so we can all learn from your experience.

Mentor People Who Aren’t Like You

Leaders tend to coach and mentor their “own,” and here’s the human impulse that drives it: Even those who believe that diversity improves creativity, problem solving, and decision making naturally invest in and advocate for the development of the subordinates who are most like them. They see less experienced versions of themselves in these folks, and so they’re inclined to believe in their potential — they want to nurture it. Of course, this also means that growth and advancement opportunities go disproportionately to those who belong to the demographic or social group that’s already in power. That’s what I’ve often observed in my leadership experience, and research confirms that this happens in organizations.

Telling our protégés that diversity matters won’t change a thing. We must demonstrate our commitment to it by deliberately mentoring people who aren’t like us. Otherwise, we do what’s comfortable, and we risk saying with our actions that we care about cultivating the talents of a homogeneous few. That’s the example we end up setting, the culture we end up building.

We may also overlook specific developmental needs on our teams, despite our best intentions, because it can be tough for people from minority demographic and social groups to speak up and voice their concerns. As an Army officer who has trained many diverse groups of recruits, soldiers, and staffers, I’ve always cared deeply about helping all kinds of people reach their potential. But it took me years to understand this basic dynamic: Those who look less like me might find it hard to share their concerns with me or ask for help. They might feel uncomfortable raising their hand if they aren’t sure I will identify with them. And it’s on me, as the leader, to help close that gap.

I’m reminded of one captain I recently mentored. This was a smart, high-performing officer who nonetheless felt invisible to the leaders in his organization. He thought he was being overlooked for opportunities because of his religion. Though I didn’t agree with his perception of how others viewed him, I understood why he felt that way — and talking with him made me see some of the complexities of social acceptance and integration. He had approached me for mentoring because I treated people from diverse backgrounds with respect and kindness, but he was still a bit skeptical about how much I could help him. Through many relaxed, exploratory conversations, I helped him examine his own thinking and behavior, assess the organization’s culture, and identify which jobs he could volunteer for to build the credibility and confidence he needed to succeed in that culture.

At first, he held fast to his negative assumptions about how leaders saw him. But after volunteering for some tough assignments — and receiving superior performance evaluations — he confronted his own unconscious biases, and his confidence grew. He realized he wasn’t as invisible as he had initially assumed. Leaders in senior roles took notice of his initiative and desire to develop, and now that he was communicating more freely and comfortably with them, they better understood what he had to offer and what his career ambitions were. They, in turn, coached him further on management and leadership skills. This captain went on to receive multiple prestigious assignments and continued to excel not just because of his expanded skill set, but also because several leaders in his organization were investing in him and advocating for him. They might have missed out on his talents and contributions if they hadn’t made a focused effort to mentor a promising high potential who didn’t fit the dominant social profile. And I would have missed out on an enriching relationship — one that deepened my understanding of the challenges in diverse groups.

That brings me to my last point: Mentoring across social and demographic lines is good for the mentor, as well. It has made me a more empathic, emotionally intelligent leader. I’ve become better at spotting potential outside the usual mold — and better at understanding the obstacles people face when they aren’t part of the dominant group. And that makes it a little easier for the next person to get leaders’ attention and support.

Google claims the hottest programming language

Google Go's mascot is a gopher, much like the Minnesota Golden Gophers.Hannah Foslien/Getty Images

Google Go's mascot is a gopher, much like the Minnesota Golden Gophers.Hannah Foslien/Getty Images

Google's Go was 2016's programming language of the year, says the TIOBE Index, a highly-regarded resource for ranking the popularity of programming languages.

While the TIOBE Index only catalogues the relative popularity of programming languages via search engines, not how often they're actually used in real life, it's a handy tool for figuring out what skills to learn if you're chasing a career in technology.

Every year, this award goes to "the programming language that has gained the most popularity in a year." And "without hardly any competition Go has won the award for 2016," TIOBE writes. Plus, TIOBE says that among its paying customers, it's seeing more interest in Go in industrial settings.

Since 2009, Google has been overseeing the community-led development of Go — a programming language aimed at helping web developers build apps at Google's scale and Google's speed, with a focus on rock-solid performance and ease of use, rather than chasing after the latest fads in programming. 

Go has won its fair share of fans in programmer-land, not least because it provides a viable alternative to Oracle's Java, which has ruled the world of computer programming for the last two decades. Google's been using Go internally to power things like its download servers, where you grab stuff like the Chrome install files. 

Languages to watch in 2017

The runner-ups for programming language of the year, per TIOBE, were Dart (another Google-led programming language, incidentally) and Perl, a NASA-created language renowned for its reliability, if not its elegance. 

Other movers and shakers on the list include Facebook's Hack, which shot up to 51st place on the list from 67 in 2015, and Julia, a language that shot up from 73rd to 52nd place.

The TIOBE Index expects that in 2017, the favored candidates for programming language of the year will include Apple's Swift, Julia, the Microsoft'created TypeScript, and the ever-popular C++.

Incidentally, back in August 2016, the C programming language —the legendary programming language invented in 1972 and still widely used  — recorded its lowest-ever score on the TIOBE Index since its creation in 2001. It looks like C finished 2016 with a lower score still, showing signs of fading even as its offshoot C++ gains on it quickly.

8 ways to spark innovation

Creating a Culture of Innovation Eight ideas that work at Google “The story of innovation has not changed. It has always been a small team of people who have a new idea, typically not understood by people around them and their executives.” —Eric Schmidt, Chairman, Google

Some of the most frequent questions we get from CEOs and leaders of other companies are: How does Google innovate? Can innovation be planned? Can it be taught? Ultimately, we think that company culture and innovation can’t be separated. “You have to have the culture,” says Google Chairman Eric Schmidt, “and you need to get it right.” We also believe that to stay competitive, we (and every other company in the world) absolutely have to innovate. So how do you create a culture of innovation? Google doesn’t have a secret formula, though we’ve done our best to find one over the years. But we have distilled our thinking into a set of basic principles—ideas we believe can be adapted and applied at pretty much any organization, regardless of size or industry. In this Google Cloud perspective, we’ll share these eight principles of innovation and show how we apply them inside Google.

1. Think 10x The notion of “10x thinking” is at the heart of how we innovate at Google.

To put the idea simply: true innovation happens when you try to improve something by 10 times rather than by 10%. Astro Teller’s job title is Captain of Moonshots at Google X—the division of Google that focuses on producing major technological advances, like self-driving cars. Teller describes 10x thinking this way: “If you want cars to run at 50 mpg, fine, you can retool your car a little bit. But if I tell you a car has to run on a gallon of gas for 500 miles, you have to start over.” In other words, a 10x goal forces you to rethink an idea entirely. It pushes you beyond existing models and forces you to totally reimagine how to approach it. Google Glass is an example of 10x thinking in action. Rather than focus on small improvements to the mobile devices we’re all familiar with—our smartphones—we set out to entirely rethink the mobile experience, deliver hands-free information and let users “talk” with the Internet via natural-language voice commands. That led us to reimagine the form factor and tackle all sorts of design and operability issues and use cases. Google Glass is now commercially available, and we recently released a developers kit for Glassware—apps that run on Glass. We’re excited to see how the Glass ecosystem expands and what new applications are created.

There are already some really fascinating use cases underway: oilfield workers using Glass to access and view technical data as they work on drilling equipment. Doctors looking at a patient’s medical records as they deliver care. Firefighters scanning building floor plans as they battle fires. While it’s still early, the possibilities for business applications seem almost unlimited, and that’s just what we’d hoped for.

2. Launch, then keep listening The restaurant business has a smart idea called the “soft opening.”

Instead of hoping everything is perfect and inviting the entire public to arrive all at once, a new cafe will have a few days or weeks where they invite people in, learn what works, discover what customers love, and slowly grow (they hope) into a successful business that everyone is talking about. We do something a little bit like that at Google. Early in Google’s history we released some of our products as “beta launches” then made rapid iterations as users told us what they wanted more (and less) of. Today we continue to listen carefully to user feedback after each launch and revise products based on what we hear. The beauty of this approach is that you get real-world user feedback and never get too far from what the market wants. Perhaps they want the features you were planning to add next … or maybe something completely different. Android, Google’s mobile operating system, is an example of this approach. Launched in 2008, Android has been improved continuously, and today there are more than 1 billion Android users in the world. Another 1.5 million new Android devices are activated each day.

3. Share everything you can

At Google we believe that collaboration—that is, people working together in teams—is essential to innovation. And collaboration happens best when you share information openly. So as a company, we share as much as possible with employees. This doesn’t mean every last business or strategic detail, but we do strive for transparency

One practice that captures this idea well is our weekly TGIF meeting. It’s an hourlong all hands that Googlers can attend in person in Mountain View or watch on livestream from offices around the globe. Our founders, Larry and Sergey, still host the meeting as they always have. They talk about the week’s Google news, industry changes or new acquisitions. Engineering teams present their upcoming products. Leaders from across the company— from areas like People Operations, Marketing, Legal and Finance—give updates on key topics.

Googlers have a chance to stand up and ask Larry and Sergey and other leaders any question they’d like: about management decisions, product direction, market trends, you name it. The meetings are recorded and shared on video for any employee who missed them. TGIF is a blend of business and fun—there’s always food and drink, as well as music beforehand—and the spirit is much like a startup team coming together for a weekly wind down. Except that now it’s for thousands of people. We also rely on tools to share information across the company. Many of these are tools we’ve created and brought to market as products, so they’re a good example of how innovation and company culture really are intertwined. Google Drive, Docs, Sheets and Slides are all about bringing content to life and giving people access to it wherever they need it. In fact, most of our content— documents, spreadsheets, presentations, video, collateral, etc.—is stored in the cloud on Google Drive, so employees have access to the latest versions anytime and anywhere. Content owners control access and decide who can view, comment or edit the documents.

This is a huge change from the traditional corporate world where it could be impossible to find critical content fast because it was sitting in multiple versions on different servers, laptops and thumb drives all over the office (or the world). Google+ brings a social layer to all of our products. We use Google+ as our internal social network; Googlers share information, content, links, photos and videos with other Googlers. We all use it to do things like tag content, +1 and comment on posts and set up communities of interest.

4. Hire the right people

Google has grown at a rapid rate: from 2,000 Googlers a decade ago to more than 50,000 now. What we hope hasn’t changed is the kind of people who work here and the types of projects they like to work on. Ever since our very first hires, Google has worked hard to attract people who want to tackle big problems that matter and do great things for the world. To keep attracting those people tomorrow, it’s critical that we hire the right people today. So we set the bar very high. Rather than rely on the judgment of one or two people, we structure the hiring process to tap the “wisdom of the crowd” in several ways. First, we encourage Google employees to refer other qualified people they know and we reward them when those people get hired. We get 2 million new resumes every year, but referrals from current employees have proven to be a great way to bring talented new people into our company.

Second, we’ve set up a robust screening process. We look for people who are great at lots of things, love big challenges and welcome change. And when we identify a promising applicant, we engage them in a series of detailed interviews. The interview panel typically has four people, with not just the hiring manager, but three others who are asked to focus specifically on one or two areas during the interview. These interviews assess the candidate in four different areas: • Role-related knowledge (their ability to do this specific job) • Leadership (and the ability to know when to follow, too) • General cognitive ability (how they think and solve problems) • Personality (a feel for what makes each candidate tick) As a third step, the interviewers’ notes, scores and recommendations are included in a complete packet of information which goes to a hiring committee for review. Following a discussion of all the available data, the hiring committee makes the final decision. Here are some ways we use the tools we’ve developed to manage this process: • Collaborating with Google Docs, our document tool, our hiring team and interviewers can work in real time on job descriptions and interviewer roles. They also use Google Sheets, our spreadsheet tool, to instantly share an applicant’s status with all stakeholders. • Connecting through Google Hangouts, our video conferencing technology, we can conduct interviews when an applicant and interviewer can’t be in the same room. We find these video interviews to be a huge step up from phone calls, both for us, and for the candidates. • Building on the Google Cloud Platform, we’ve developed our own tool, gHire, to manage hiring workflow.

5. Use the 70/20/10 model

We’re firm believers in a concept first introduced in the early days of Google: the 70/20/10 model. Simply put, it means that: • 70% of our projects are dedicated to our core business • 20% of our projects are related to our core business • 10% of our projects are unrelated to our core business We have a few goals in mind here. One is that this model is a helpful way to allocate resources as we think about the big picture of our business each year. It keeps the focus on core needs while also encouraging a healthy stretch into new and related areas. Just as importantly, the 70/20/10 model supports a culture of “yes” rather than “no.” It promotes “what-if,” out-of-the-box thinking. This positive framework feeds our core business while also encouraging new ideas and big dreams that can become huge wins for the company—those 10x moonshots we were talking about earlier. In the long run, a few of those unrelated 10% ideas will turn into core businesses that become part of the 70%. And that’s good for business and the bottom line.

6. Look for ideas everywhere

The best ideas can’t all possibly come from any one team, one department or one company. We believe great ideas can be found anywhere, and we look for them everywhere. For instance, we now crowdsource innovation to improve the quality of Google Maps. The idea emerged when one of our engineering teams in India realized that a lack of online map data would limit the usefulness of Google Maps in India. So they thought, why not create a platform where users could provide the missing data? That led to Google Map Maker, a tool that lets anyone make changes to Google Maps. Today, thousands of citizen cartographers around the world are literally putting their communities on the map.

That’s a great example of how Google connects to external contributors. But how about inside Google? Like other large companies, Google has a lot of structured and unstructured information floating around. We’ve made it easier to connect people to that information by using tools like Google Drive, the cloud-based storage solution we talked about earlier. But what about connecting people with people, so they can share ideas and collaborate? We’ve deployed our own internal version of Google+ which more or less converts our corporate directory into a social network. Googlers create their own “circles”— grouping people they work with by common objectives, interests and so on—and easily communicate and share information with the people in those circles. Googlers also use Google+ to set up internal communities of interest on topics ranging from artificial intelligence to Italian soccer. It’s a great way for us to engage with each other on a more personal level and share information relevant to fellow employees.

7. Use data, not opinions

Data usually beats opinions. So at Google, data is a big part of every choice we make. We test and measure almost everything we do so that we have a continuous data stream to inform our decisions. We also take this data-driven approach with what we call “People Operations,” our human resources department. Relying on data helps us understand the specific dynamics of our own human interactions and management practices and allows us to make smarter choices.

Googlegeist is a perfect example of this approach. Googlegeist is an anonymous survey that goes out every year to all of our global employees. The response rate is very high: around 90% of Googlers worldwide. The survey asks employees for their views on a broad range of issues—their own well-being, the company culture, their managers, compensation, work-life balance, diversity and career opportunities. The People Ops Analytics team slices this data in all sorts of ways—by department, by manager, by tenure, by region—and shares it with everyone at Google so we can all see where people are happy and where things could be better and so we can spread best practices across the globe and drive real change. Managers at every level get the survey results for their area and are urged to consider this data carefully and act on it. Since 2009 we’ve been working on a long-term initiative called Project Oxygen. It applies that same data-driven approach to helping our managers become better managers. We carefully analyzed a wide variety of input, from feedback surveys to things like manager award nominations, looking for patterns that would help us understand just what makes a great manager. When we found things that worked, we started teaching them in our training programs. The result: we’ve seen a measurable improvement in the performance of our managers. And Project Oxygen gives us a firm foundation for training better managers in the future. We’ll keep tracking results carefully to see if we’re moving the needle in the right direction.

8. Focus on users, not the competition

We believe that if we focus on users, everything else will follow. If you can build a robust and loyal base of people who love what you do, you’ll have something rare and valuable. For us, that always starts with the desire to improve the lives of users. When we introduced Gmail back in 2004, lots of people thought it was a mistake. There were plenty of well-established email products on the market. Did the world need another one? Was Google getting distracted from search? But we had a different idea of what cloud-based email should be. We thought the existing products weren’t intuitive enough and had too many limitations. We thought 2-4 megabytes of storage wasn’t enough, so we offered a full gigabyte. (Some of you may not remember the days when you had to clear out room every few hundred emails.) We believed we could provide a better experience for users, and so we gave it our very best shot. Ten years later, Gmail is the world’s #1 web-based email service, with more than 425 million active users. We take that success as a humbling sign that any product, our own included, can be improved if you simply focus on how you can make life even better for users. Looking ahead Those are eight ideas that have helped us create a culture of innovation at Google. The list is by no means complete; every company’s situation is unique. We’ll continue to study the data and learn from our own experience and the experiences of others.

Of course, no one knows for certain what the next great innovations will be or where they’ll come from. But one thing we do know for certain is that innovation and disruption are happening faster and faster as we move further into the new digital age. For any company that wants to keep innovating, the first step is to get the culture right. Google Cloud brings the best of Google technology to companies and employees around the world.

We begin with Google’s popular consumer products and add the enterprise-level security, performance and extra features that ambitious businesses need to build, innovate and thrive. Looking to innovate? Call us at (855) 778-5079. We’d love to partner with you to see what’s possible.

Why Failure is Not the End of the World for Entrepreneurs

 I mention how important it is to embrace struggle. The same can be said about failure. Most entrepreneurs and successful people have failed at least once or more. In fact, odds are stacked against Entrepreneurs. Only 10% succeed. The significance does not correlate to frequency of failure but what can be learned as a result. Any wise person will take the time to assess what went wrong and be sure it doesn't happen the same way more than once. They would admit that it has greatly improved the rate of success.

Aaron Schildkrout, Cofounder and Co-CEO of howaboutwe.com shared in Fast Company, that "The odds were against us resoundingly. But the idea of creating something out of nothing, something millions of people could use to find love, was worth facing failure for. So we learned to fail more quickly, pushing through bad ideas to arrive at great ideas. That’s ultimately what propelled us forward (and continues to do so): learning and failing quickly, and never making the same mistake twice."

Common struggles that may lead to failure are when business and personal intersect. Whether flaws are present in product design, execution, or personality of leadership, all effect the rate of success for an organization and the individual.

Top Reasons Why Start-ups Fail

  • Poor management
  • No demand
  • Lack of funding
  • Inability to compete
  • Pricing Issues

When referring to management, flaws are personal or attitudinal.

Common Struggles for Entrepreneurs Include the Following Mental Blocks

  • Pessimism - fear of failure or they are afraid to make the journey due to false beliefs or feelings that arise from the core personality.
  • Loss of focus - having too much freedom can lead to a lack of discipline. Most entrepreneurs enjoy being their own boss and not having a set schedule, but another loss of focus is getting caught up in the lifestyle and losing motivation on building the business.
  • Pursuing desire - there's nothing wrong with reaping the prosperity of hard work, but as humans, we want things now! Money and time are spent frivolously, chasing material possessions or social status has replaced focus.
  • Lack of priorities - Learning how to say "no" is a gift. Time management is a skill. As entrepreneurs, we want to serve and help many people improve through products and services. We also need to convert new leads into clients and not miss out which leads to difficulty setting boundaries. Time management is the key to establishing predominance.

What Does it Mean to Have Flaws?

The solution to these problems and other mental blocks is to clean your lenses because they are dirty. It is imperative to dissolve these false beliefs about ourselves. Lenses include the way we view the external and internal. Our perceptions about the world around us and internal thoughts lead to assumptions which often take the form of false beliefs.

 

Take Action

  • I'd encourage everyone reading this to take an inventory, and list 3 mental blocks that are holding you back.
  • Identify any struggles in your life that are sapping your productivity and creativity which are directly affecting your performance as a leader.
  • Take advantage of the resources available.

Thanks for reading!!

 

ClearTax investor Sumon Sadhu is looking for the next Alibaba

A handful of awesome startups in the UK, France, Germany, Switzerland, Canada, and India have raised capital on AngelList, including ClearTax, a digital tax filing startup that is building financial products for the Indian market.

In this interview with angel investor and entrepreneur Sumon Sadhu, we go inside his investment in ClearTax to learn:

  • How he took the lead in one of the most competitive deals out of Y Combinator with a strategy of benevolence
  • How AngelList put him on the map with Silicon Valley super-angels
  • Why he thinks the future of tech is outside the US

Julie Ruvolo: You’ve been angel investing since 2013, with 15 investments (five through AngelList) and two exits. How do you approach your investments?

Regarding investment theses, I’m investing in the amplification of human intelligence and the expansion of the human lifespan; in companies which make economies more efficient; and in national empires, like finding the next Alibaba.

I'm not doing a lot of deals, but when I do, I like to take between $250-$500K in allocation. So I’m very focused on ownership and core concentration in a few deals, and mostly taking the super angel slot. AngelList has helped me create that platform for myself.

As for my approach, I am a Y Combinator alumni [fifth batch, with a company called Snaptalent] and I’ve been advising YC companies since then. The core fabric of YC is to help other founders, and the reason for Y Combinator’s ascendance as a prominent seed investor is because of this concept of benevolence towards other YC founders.

That's the reason I was in YC in the first place, because Paul Graham sent me an email when I was in England in the summer of 2007. He said, “You should come pitch me, because I hear that you've been building impressive things.” That email changed my life.

Tell me about ClearTax.

ClearTax’s goal is to build simple products to simplify the financial lives of businesses and consumers in India. They started with a self-serve personal tax product, and have recently launched business-facing tax products used by more than 10,000 accountancy firms. The business-to-business segment brings in 60% of the revenue. There are more financial products to be revealed.

ClearTax raised $3.5M in seed financing in 2014 in one of the most competitive deals to come out of Y Combinator. How did you get into the seed round?

I met Archit from ClearTax at the Y Combinator Alumni Demo Day in 2014. It’s where YC founders practice their pitches in front of their peers, two days before the official demo day for all investors. When I met Archit after his pitch, I said to him, "You realize how important your company is going to be to the future of India's economy."

I looked at it quite simply: Tax transactions are part of the system of record of an economy's transactions. It starts with individual tax transactions, and then it goes to commercial tax transactions. Once you start generating that system of record, you have digitization of transactions in an economy.

What happens in twenty years time if you succeed, and what happens when you digitize and organize all of the transactions in the Indian economy? What you can do with that data and network of users?

Archit got it on an intuitive level, but no one had articulated it to him. He said, "Look, I'm busy pitching some other investors. Do you mind if we just keep talking? Maybe we can work together on this.”

ClearTax is the first startup focused on the Indian market that raised money from YC (or that raised money on AngelList). Archit said it was almost inconceivablethat a Silicon Valley accelerator would want to fund a company focused on an Indian problem a couple of years ago.

The investors Archit was speaking with at the time had never been to India, much less understood that most tax related transactions before ClearTax were done in a sort of underhanded fashion, as most people in India don't pay taxes. The recent focus on demonetization is going to change this as more money goes from being “black money” to being on the record.

There wasn't this type of digitization when I invested. But we recognized it as being an important force going forward as the economy matures. Most US investors probably looked at it and said, “We have Intuit. Why is this even special?”

Today in the US, we still do taxes in a terminal fashion [retroactively, every April]. They don’t update as we transact. And the systems ClearTax is bringing into place will allow for real-time taxation to exist as a product. It can work in a way that better reflects actual human behavior.

Not only can you integrate paying taxes, but what do you do with the savings that you generate from those taxes? Taxes are the bridge to organize all sorts of other digital transactions, whether it's for individuals or businesses. For example, the ClearTax Startup Program will help startups become operational in three weeks by providing advisory services, including incorporation, legal agreements and tax registration.

So I didn't see it as just a tax product; I saw it as something fundamental to all transactions by all participants in the economy as it digitizes. That’s the thing that people most misunderstand about leapfrog innovation: You can start with something that looks comparable, but you can reinvent the system.

So that was your first conversation with Archit. How did the seed round come together?

Sequoia India had approached him, and they were meeting in two days. A meeting like that is quite important, and you can’t just waltz in there. I asked if he had a deck that reflected the level of opportunity we were talking about. So the first order of business was to sort out his deck and help him articulate a big story.

The second thing was giving him some perspective as to how to sequence the investor interest. Rather than take those checks, I told him to hold off a few days and build a bit of intrigue. So he postponed his meetings, and we took four days to work on the deck and sequence the participants he needed to meet in a very tactical sort of fashion.

There's an order of operations to generate heat for a round, which I've done previously for a number of companies. I was directing traffic: “Talk to these guys, you should not talk to these guys, you should talk to these guys later, save them for later, play these guys off against these guys.” Ultimately, it got the right result.

At the same time, I had to convince Archit to let me into the deal. The way—again, if you operate through benevolence—you just do a lot of work for an entrepreneur, and naturally, they'll be grateful.

How did your allocation come into the conversation?

I originally had a $1M allocation. I wanted to go as aggressively as possible. I was trying to do it as a syndicate on AngelList, on top of my personal angel investment in the company.

We ended up doing $250K, which was the third largest ticket in the seed round, after investors Sequoia India and Founders Fund. Archit was trying to keep the round as secret as possible, and that was a problem with AngelList syndicates at the time.

Whereas now all of the deals on AngelList are private by default; Syndicate leads choose which backers to invite into deals, and most deals have less than 20 backers.

Even trying to be discreet, as soon as it went online on AngelList, within 35 minutes, $750K of the $250K allocation was accounted for. If I’d held a million dollar position in the company, I could have filled it with the demand. I had messages on Facebook and email from people trying to get into the deal, like, “Can you let me into the syndicate?”

Did you stop at $250K, or did you end up upping your allocation?

I would have loved to, but we stopped at $250K. It was a very curated sort of round. We only let eight backers in, including Elad GilKamal RavikantBill Lee, who invested in SpaceX and Tesla, and Othman LarakiMaiden Lane was also part of the syndicate.

What were the considerations to decide who you let in, for what was going to be a small amount of money at the end of the day?

They were all chosen for their strategic value to the deal, whether it was for future fundraising or brand value. I think the consideration is always, How do you maximize the value per dollar, and how do you treat the syndicate as a recruiting exercise? Who would you recruit to maximize future value?

We also let some angels into the deal alongside the AngelList syndicate to help tell the story: Max LevchinCyan and Scott BannisterNeeraj Arora at WhatsApp, Ryan Petersen at Flexport…. Then the rest of the round was for institutional investors.

That deal put me on the map. For existing super angels, they were like, “Who the hell is this guy? Why has he been able to do this deal?” And it’s all because of the syndicate platform.

Beating the known super angel funds and other VCs in that deal was something that I'm proud of. It was difficult because I didn't have committed capital; I was an individual angel. I leveraged the AngelList syndicate for that purpose: If you're an angel who adds a lot of value to a deal, then you should have an equivalent allocation to that level of value.

All in, ClearTax raised $3.5M in the seed round, from Sequoia India, Founders Fund, your AngelList syndicate, and the other angels you and Archit let into the deal. Then, in 2015, Ravi Adusumalli at SAIF Partners led a $12M Series A, which is one of the largest Series A rounds an Indian company has raised. What happened to your pro-rata?

No one was allowed to do pro-rata. We tried, but it was all taken by the Series A investor. I tried to invest again in subsequent rounds, but ClearTax stock is in high demand.

What’s been your relationship with Archit since then?

I am a strategic advisor. We did the same sort of process leading into the Series A: We re-did the deck, organized the participants, helped him architect and close the transaction. I'm involved in inflection points with ClearTax, and the goal is to support him in building an Alibaba-sized incumbent out of India.

Archit’s on his way, with 1.5 million Indians using ClearTax to file their taxes electronically last year. Worth noting as well that about a third of ClearTax users are mobile. Which is perhaps not so surprising given that 60% of ClearTax users are millennials.

India has a younger population. If you capture the millennials, then they eventually become the most important financial demographic, and you have an opportunity beyond tax to build financial products for them.

A lot of us have a relationship with TurboTax, for example, that spans ten years or longer. These are the kinds of products where the lifetime value of a customer is not a few months, but more like the order of magnitude of decades, if you get it right.

Archit said there is no iOS app yet, because India is on Android. In that sense, India has something in common with emerging markets like Latin America: About half the population is still offline, and everyone is coming online into an Android world. Any thoughts more broadly on emerging markets and where this is all headed?

First of all, only 50% of unicorns in the world are in Silicon Valley, and the biggest opportunity for investors is to find them outside. Outside companies will have a disproportionate likelihood of creating that type of value because operational costs are much lower outside the US. You can have more leverage with your headcount, and those companies are going to be more competitive per dollar.

The second thing is the global market opportunity: The US is only 8.4% of the global Internet market in terms of audience, while the non-US opportunity is much, much bigger.

And the level of ambition and originality that non-US founders have at scale is much larger than US founders because they're not operating in environments where everyone is doing a startup. The Xiaomi’s or Alibaba’s or ClearTaxes or Paytm’s of the world think on a much grander scale than US-focus entrepreneurs. I believe that the future is firmly investing in non-US companies.

This post is part of an ongoing series of interviews with investors and entrepreneurs behind some of the most high-profile, invite-only deals on AngelList. Get more of Sumon Sadhu’s thoughts on investing in startups in his podcast on AngelList Radio.

Elon Musk has launched a company that hopes to link your brain to a computer

Elon Musk has launched a company dedicated to linking human brains with computers, The Wall Street Journal's Rolfe Winkler reported Monday.

Internal sources told The Journal that the company, called Neuralink, was developing "neural lace" technology that would allow people to communicate directly with machines without going through a physical interface. Neuralink was registered as a medical-research company in California in July.

Neural lace involves implanting electrodes in the brain so people could upload or download their thoughts to or from a computer, according to the report. The product could allow humans to achieve higher levels of cognitive function.

Musk said on Twitter that more details about Neuralink will be released in a week.

Elon Musk @elonmusk

Musk has expressed his interest in neural lace technology before. Musk first described the potential product at Vox Media's Code Conference in 2016, saying it would allow humans to achieve symbiosis with machines.

He said neural lace could prevent a person from becoming a "house cat" to artificial intelligence.

"The solution that seems maybe the best is to have an AI layer," Musk said at the Vox Code Conference. "A third, digital layer that could work symbiotically."

Musk said on Twitter in January that he was preparing for an announcement regarding neural lace.

Facebook is also exploring similar technology through Building 8, its secretive hardware division. The group is developing noninvasive brain-computer interface technology that would allow people to communicate with external hardware devices.

Musk is attempting to set up safety standards for artificial intelligence through his nonprofit, OpenAI, which he founded with Y Combinator's Sam Altman in 2015. OpenAI's mission is to "advance digital intelligence in the way that is most likely to benefit humanity as a whole."

But Neuralink's first products could involve using implants to treat disorders like epilepsy or major depression, according to The Journal.

Researchers at universities like the University of California and Duke are also developing brain-computer interface technology that would allow people with paraplegia to walk again.

Musk also plans to launch the Boring Company, a venture dedicated to building an underground network of tunnels to reduce traffic.

Read the full Wall Street Journal report

The smartphone is eventually going to die, and then things are going to get really crazy

Apple CEO Tim Cook

Apple CEO Tim Cook

One day, not too soon — but still sooner than you think — the smartphone will all but vanish, the way beepers and fax machines did before it.

Make no mistake: We're still probably at least a decade away from any kind of meaningful shift away from the smartphone. (Andif we're all cyborgs by 2027, I'll happily eat my words. Assuming we're still eating at all, I guess.)

Yet, piece by piece, the groundwork for the eventual demise of the smartphone is being laid by Elon Musk, Microsoft, Facebook, Amazon, and a countless number of startups that still have a part to play.

And, let me tell you: If and when the smartphone does die, that's when things are going to get really weird for everybody. Not just in terms of individual products but in terms of how we actually live our everyday lives and maybe our humanity itself.

Here's a brief look at the slow, ceaseless march toward the death of the smartphone — and what the post-smartphone world is shaping up to look like.

The short term

People think of the iPhone and the smartphones it inspired as revolutionary devices — small enough to carry everywhere, hefty enough to handle an increasingly large number of daily tasks, and packed full of the right mix of cameras and GPS sensors to make apps like Snapchat and Uber uniquely possible.

But consider the smartphone from another perspective. The desktop PC and the laptop are made up of some combination of a mouse, keyboard, and monitor. The smartphone just took that model, shrank it, and made the input virtual and touch-based.

So take, for example, the Samsung Galaxy S8, unveiled this week. It's gorgeous with an amazing bezel-less screen and some real power under the hood. It's impressive, but it's more refinement than revolution.

Tellingly, though, the Galaxy S8 ships with Bixby, a new virtual assistant that Samsung promises will one day let you control every single feature and app with just your voice. It will also ship with a new version of the Gear VR virtual reality headset, developed in conjunction with Facebook's Oculus.

The next iPhone, too, is said to be shipping with upgrades to the Siri assistant, along with features aimed at bringing augmented reality into the mainstream.

And as devices like the Amazon Echo, the Sony PlayStation VR, and the Apple Watch continue to enjoy limited but substantial success, expect to see a lot more tech companies large and small taking more gambles and making more experiments on the next big wave in computing interfaces.

The medium term

In the medium term, all of these various experimental and first-stage technologies will start to congeal into something familiar but bizarre.

Microsoft, Facebook, Google, and the Google-backed Magic Leap are all working to build standalone augmented-reality headsets, which project detailed 3D images straight into your eyes. Even Apple is rumored to be working on this.

Microsoft's Alex Kipman recently told Business Insider that augmented reality could flat-out replace the smartphone, the TV, and anything else with a screen. There's not much use for a separate device sitting in your pocket or on your entertainment center if all your calls, chats, movies, and games are beamed into your eyes and overlaid on the world around you.

Apple's AirPods keep the Siri virtual assistant in your ears. Hollis Johnson/Business Insider

At the same time, gadgetry like the Amazon Echo or Apple's own AirPods become more and more important in this world. As artificial-intelligence systems like Apple's Siri, Amazon's Alexa, Samsung's Bixby, and Microsoft's Cortana get smarter, there will be a rise not just in talking to computers but in having them talk back.

In other words, computers will hijack your senses, more so than they already do, with your sight and your hearing intermediated by technology. It's a little scary. Think of what Facebook glitches could mean in a world where it doesn't just control what you read on your phone but in what you see in the world around you.

The promise, though, is a world where real life and technology blend more seamlessly. The major tech companies promise that this future means a world of fewer technological distractions and more balance, as the physical and digital world become the same thing. You decide how you feel about that.

The really crazy future

Still, all those decade-plus investments in the future still rely on gadgetry that you have to wear, even if it's only a pair of glasses. Some of the craziest, most forward-looking, most unpredictable advancements go even further — provided you're willing to wait a few extra decades, that is.

This week, we got our first look at Neuralink, a new company cofounded by Musk with a goal of building computers into our brains by way of "neural lace," a very early-stage technology that lays on your brain and bridges it to a computer. It's the next step beyond even that blending of the digital and physical worlds, as human and machine become one.

Assuming the science works — and lots of smart people believe that it will — this is the logical endpoint of the road that smartphones started us on. If smartphones gave us access to information and augmented reality puts that information in front of us when we need it, then putting neural lace in our brains just closes the gap.

Futurist Ray Kurzweil has been predicting our cyborg futures for a long time now. Tech Insider

Musk has said this is because the rise of artificial intelligence — which underpins a lot of the other technologies, including voice assistants and virtual reality — means humans will have to augment themselves just to keep up with the machines. If you're really curious about this idea, futurist Ray Kurzweil is the leading voice on the topic.

The idea of human/machine fusion is a terrifying one, with science-fiction writers, technologists, and philosophers alike having very good cause to ask what even makes us human in the first place. At the same time, the idea is so new that nobody really knows what this world would look like in practice.

So if and when the smartphone dies, it'll actually be the end of an era in more ways than one. It'll be the end of machines that we carry with us passively and the beginning of something that bridges our bodies straight into the ebb and flow of digital information. It's going to get weird.

And yet, lots of technologists already say that smartphones give us superpowers with access to knowledge, wisdom, and abilities beyond anything nature gave us. In some ways, augmenting the human mind would be the ultimate superpower. Then again, maybe I'm just an optimist.

How to Manage Innovation

 

Greg Satell ,  CONTRIBUTOR Opinions expressed are his own.

Innovation has become management’s new imperative.  Everybody wants to be the next Apple AAPL -0.14%Google GOOG +0.01% or Netflix NFLX +1.09%, nobody wants to be Kodak, Blockbuster or US Steel X +3.33%.

Go to any conference these days and some whip-smart technogeek will declare that you must, “innovate or die,” and then dazzle you a wide array of case studies to illustrate the point.  You’ll feel inspired, then scared and then have a few beers and go about your business.

What’s missing is a clear set of principles for action.  What good is Steve Job’s unfailing design sense when I can’t even get my outfits to match?  How can Google’s technological supremacy be relevant to me when I can’t even figure out my TV remote?  In other words, we need to take innovation down from the presentation screen and into working life.  Here’s how to do that.

 

What is Innovation?

 

Unfortunately, innovation is often conflated with strategy.  Strategy, after all is a coherent and substantiated logic for making choices, while innovation is a messy business which creates novel solutions to important problems.  Put simply, strategy is about achieving objectives, while innovation is about discovery, we never know exactly where we’re going until we get there.

In other words, while strategy creates a clear path to a goal, innovation is often confused, as Richard Feynman explains in this video clip:

 

You can see the conflict.  If Feynman, widely hailed as one of the greatest minds of the 20th century, feels like a stupid ape trying to put two sticks together when working on a new problem, then there must be something missing in all of those slick conference presentations.

Clearly, we need to develop frameworks for innovation that are separate from, although compatible strategy.

The Three Pillars of Innovation

Finding novel solutions to important problems is not only hard, but complex.  There are, after all, a myriad of important problems at any given time and countless potential approaches to each one of them.  Innovation seems like too small a word.

Nevertheless, I think we can move the ball further by breaking it down into three discrete areas of activity.:

Competency:  Every organization has its own history and set of capabilities which determine its innovation competency.  An old-line industrial firm can’t just wake up one day and decide to operate like a hot Silicon Valley tech startup overnight, nor should they try.  However, every enterprise can improve.

Tim Kastelle, who researches innovation, has built a powerful framework based on competence and commitment that will help you climb the ladder from laggard to world-class innovator.

Strategy:  As an manager knows, resource allocation is critical to strategy and therefore needs to be an integral part of aligning innovation to strategic objectives.

Again, professor Kastelle provides valuable guidance with his version of the three horizons model which suggests a 70/20/10 split between improving existing products and processes, searching out adjacencies and exploring completely new markets.

Management:  Even the most competent firm which deploys resources wisely still needs to manage innovation effectively.  This is my primary focus.

Two Crucial Questions

Defining a managerial approach to innovation starts with developing a better understanding of the problem you need to solve.  I’ve found that two basic questions help clarify the path forward:

How well is the problem defined?:  When Steve Jobs set out to build the iPod, he defined the problem as “1000 songs in my pocket.”  He was a master at defining a clear product vision.

Unfortunately, some problems aren’t so easy to frame, like how to create a viable alternative to fossil fuels.  So determining how well the problem is defined is a key part of developing an actionable strategy.

Who is best placed to solve it?:  Once Jobs defined the iPod problem, it was clear that he needed to find a disk drive manufacturer who could meet his needs and, once he did, he built one of the most successful products in history.  Yet, again, sometimes the proper domain to solve a problem isn’t so cut and dried.

One thing I like about these questions is that they clarify the issues quickly.  Either there is a simple answer or there isn’t.  Once you start asking them, you are well on your way to defining a viable approach.

The Innovation Management Matrix

To follow up on the innovation questions, I developed the Innovation Management Matrix, determining problem and domain definition allows us to build a simple 2x2 matrix encompassing four basic types of innovation:

 

Basic Research:  When you’re aim is to discover something truly new, neither the problem nor the domain is well defined.  While some organizations are willing to invest in large-scale research divisions, others try to keep on top of cutting edge discoveries through research grants and academic affiliations.  Often, the three approaches are combined into a comprehensive program.

Breakthrough Innovation:  Sometimes, although the problem is well defined, organizations (or even entire fields of endeavor) can get stuck.  For instance, the need to find the structure of DNA was a very well defined problem, but the answer eluded even Linus Pauling, the most talented chemist of the day.

Usually, these types of problems are solved through synthesizing across domains.  For instance, Watson and Crick solved the DNA problem by combining insights from chemistry, biology and X-ray crystallography.  In a similar vein, many companies are learning to embrace open innovation in order to pull in diverse resources.

Sustaining Innovation:  Whatever you do, you always want to get better at it.  Every year, our cameras produce more pixels, our computers get more powerful and our household products become “new and improved.”  Large organizations tend to be very good at this type of innovation, because conventional R&D labs and outsourcing are well suited for it.

Disruptive Innovation:  The most troublesome area is disruptive innovation, because its value isn’t always immediately apparent.  Notably, Yahoo and Blockbuster had the opportunity to invest in Google and Netflix early on, but missed the opportunity because they didn’t see the potential.

Disruptive innovations generally target light or non-consumers of a category so require a new business model and therefore have high failure rates.  Venture capital firms who focus on disruptive investments expect to that most will fail.  One growing trend is for companies to establish innovation labs, where they can test and learn without excessive risk.

World Class Performers

One thing that is especially confusing about innovation is that great innovators tend to be quite diverse and different from each other.  Anybody seeking to define best practices by talking to successful companies would find much of the advice contradictory.

The Innovation Management Matrix can help here as well, because upon a little reflection it becomes clear that successful innovators tend to focus on one area of the matrix.

 

Basic Research:  While most basic research happens in academic institutions, some businesses can excel at it as well.  IBM research is one that truly focuses on pushing the boundaries of science.  In 1993, for example, they accomplished the first quantum teleportation; a technology that isn’t likely to result in a product until after 2020.  They continue to lead in patents.

Xerox’s PARC division, on the other hand, shows both the potential and the pitfalls of basic research.  Major innovations such as the ethernet, the graphical user interface and the mouse were developed there, but Xerox failed to commercialize them.  They have since spun off the division, which now operates as a high-end research outsourcing contractor.

Breakthrough Innovation:  There are those rare souls who are capable of making breakthroughs, but usually only earlier in their career.  However waiting for a maverick genius to come along isn’t a viable business model.

That’s why many firms are turning to open innovation platforms such as Innocentive, which allow outsiders to solve problems that organizations are stuck on.  Procter and Gamble has built its own Connect + Develop platform which allows them to benefit from expertise in a variety of domains across the world.

Sustaining Innovation:  While everybody agrees that Apple is a superior innovator, the truth is that they rarely produce anything truly new.  They didn’t invent the digital music player, the smartphone or even the tablet computer.  However, they improve on earlier versions to such an extent that they seem like they’re something completely new.

In a similar vein, Toyota makes cars just like any others, except better.  What both companies have in common is that they are masters at adapting breakthrough innovations for existing markets (it was, after all, Steve Jobs who most benefited from PARC’s work).  In essence, great sustaining innovators are great marketers.  They see a need where no one else does.

Disruptive Innovation: While every new Apple product turns heads, when Google comes out with something most people won’t even understand what it is much less how they’ll make money on it.  From Google Maps to autonomous cars, they manage to fill needs we didn’t even know we had.

3M, the company that pioneered scotch tape and post-it notes, derives up to 30% of its revenue from products launched in the past 5 years.  Both companies use a version of the 15% / 20% rule, where employees are required to devote a fixed portion of their time to projects unrelated to their jobs.

While that’s not a viable solution for most companies, many firms are trying to achieve the same effect on a smaller scale with innovations days, hackathons and innovation labs, where employees are encouraged to think beyond existing lines of business.

Building An Innovation Portfolio

While focus is important, no company should limit itself to just one quadrant.  Apple, for instance, is mainly a sustaining innovator, but iTunes was certainly an important disruptive innovation.  While Google might be the greatest disruptive innovator on the planet, they spend considerable resources to improve existing products.

So it’s important to develop an effective innovation portfolio that has one primary area of focus, but also pursues other quadrants of the matrix as well and builds synergies between varied approaches.  Innovation is, above all, about combination.

In the final analysis, innovation has little to do with flashy conference presentations or exciting case studies.  Much like any other business process, effective management entails being able to infuse core principles into everyday operations.

Greg Satell is a popular speaker and consultant. His first book, Mapping Innovation, is coming out in 2017. Follow his blog at Digital Tonto or on Twitter @DigitalTonto.

What It Takes To Get Funded By A Tier #1 VC Firm In The Valley. ( Don't walk through that door until you read this)

The purpose of this post is to help entrepreneurs, advisors and angel investors who are in the process of raising capital, get a better understanding from the inside of what it really takes to get funded at the highest level in Silicon Valley. This post might also be of help in telling your story to VC's and explaining why your startup is the right fit for their portfolio and the most important question, why now? I'm going to include a few links below from other authors that do an incredible job of hitting these points right on the head and from friends whom I work closely with!

Here's what I do:

As an active angel investor, I personally approach the investment decision from multiple perspectives before committing, unlike when I'm running a fund and have a larger pool of capital and longer time horizon. Most importantly, when using my own money, I start with the questions of, the return of capital and return on capital and is this company capable of becoming a billion dollar business and is it going to change the world for the better? Then I ask myself these questions below.

a) What is the probability of getting my money back?

b) When I get my original investment back, what will most likely be the return?

c) Who will be funding the Series A round ( What VC firm's - what partners) and what are the hurdles we will need to clear to get funded? R&D, Tech, Sales, Revenue, DAU, MAU or sequential quarterly growth?

d) Then I begin to inspect what I expect and make the calls to those VC firms first and get an indication of interest and the hurdles needed to not only get the meeting months from now, but also a solid yes they are writing the check if we meet those targets!

e) I stay in touch with the VC's updating them on a regular basis about significant events or traction we receive. I'm also very transparent and share with them the failures and what actions we took to correct the situation. I share everything with my financial partners and take responsibility when we fall short and let them know when we are crushing it.

f) We have a clear use of proceeds for the capital we will be deploying, how it will accelerate the growth and sales of the company and what the ROI looks like, based on past performance numbers. We don't try and guess.

g) When we are finally ready, we schedule the meeting and do a deep dive with the VC partners and are able to make far more progress in a short period of time because we have developed so much rich history. It's almost like old friends catching up, instead of the typical hardcore interview process at some venture firms. We generally bs about what worked, what failed and what it took to get here and where we are going from here. We will usually do between 3-5 meetings that day on Sandhill and I will already have most of the deal syndication work complete, and then dovetail that into closing the round.

h) Pro Tip- I try to start meetings with the VC and venture firm that is the best fit and capable of taking the largest position of the round and then fill in the remaining capital until it is generally oversubscribed. This strategy has worked well about 39 of the 43 times we have done this.

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I have a couple of friends who are grandmasters at raising capital, one in particular, Randy Adams. I have backed Randy on a few startups via as a limited partner through Sequoia. (Below is a link to his website)

Randy has extensive experience as a CTO and CEO of eight venture-backed technology companies including three software-publishing companies, two Internet technology companies, an e-commerce company and two celebrity-based digital media companies and published more than 30 consumer software applications that collectively have sold more than 20 million copies worldwide. He has raised more than $250 million in venture capital and returned more than $28 billion to investors. He has held C-Level positions at Adobe, Yahoo and the Home Shopping Network.  http://randycadams.com/

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Randy is already proven and extremely well connected, although he still uses a simple but very effective style of communicating with investors that I admire and have adopted even if he has never met that investor. Here is his strategy with cold emails and warm introductions, they are both one and the same. Instead of sending a page long email with a pitch deck attached, he instead boils the conversation down to usually a maximum of three sentences. I have seen this work for him hundreds of times. This is an actual email intro below, that I was copied on.

Example;

Marc, I am advising a company that has Nanotech that can save 2 million people a year from dying - we should discuss. Would you like an introduction?

That is it, that is all he says, it does not get any more simple than this! He explains his role, what sector the company is in and what solution they provide. He doesn't waste time going into how big a market it is, why they are better, whom they are already speaking with or any financials or any hard data yet. He simply asks the question, would you like an introduction? Randy is sharp, has a hustle and work ethic second to none and I strongly recommend him, if you need an intro just ask?

Here is a recent article I came across the other day that speaks volumes about the one simple equation every VC knows. I do not know Michael Dempsey personally but really like this article. Why your startup idea isn’t big enough for some VCs

"Venture Capital functions with a power law where the majority of a fund’s returns come from a small percentage of investments. Because of this, VCs need to know if a single investment can return the entire fund. As Bill Gurley famously said “Venture capital is not even a home run business. It’s a grand slam business.” This is where the Return The Fund (RTF) analysis comes into play."

Definitely worth the read: https://medium.com/@mhdempsey/why-your-startup-idea-isnt-big-enough-for-some-vcs-2440b61f6d36#.nm260c7ik

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Power Laws in Venture

Here is another publication by Jerry Neumann that is a great short read;

At a given alpha, the more investments you make, the better, because your mean return multiple increases with the number of investments, as does the likeliest highest multiple. Dave McClure makes this case:

Most VC funds are far too concentrated in a small number (<20–40) of companies. The industry would be better served by doubling or tripling the average # of investments in a portfolio, particularly for early-stage investors where startup attrition is even greater. If unicorns happen only 1–2% of the time, it logically follows that portfolio size should include a minimum of 50–100+ companies in order to have a reasonable shot at capturing these elusive and mythical creatures.

Peter Thiel flatly contradicts this:

Given a big power law distribution, you want to be fairly concentrated. If you invest in 100 companies to try and cover your bases through volume, there’s probably sloppy thinking somewhere. There just aren’t that many businesses that you can have the requisite high degree of conviction about.

McClure believes he can find hundreds of companies with high enough growth to maintain his requisite alpha. Thiel thinks this is not possible. Venture capitalists have always faced this tension: the average growth rate of all small businesses in the US is closer to 7.5% than 30%. The pool of companies that can grow fast enough is limited. How many companies can you find that will grow fast enough, knowing that when you’re wrong about the growth rate, you’re probably wildly wrong?

http://reactionwheel.net/2015/06/power-laws-in-venture.html

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All investors want to find the "next big thing, " and we read tons of emails everyday, it would help greatly if you could narrow the facts to 3 sentences or a short paragraph.

There is a tremendous amount of info in the articles above, take advantage of these and use these tools in your next meeting. The final suggestion is to listen to Angel List radio and hear the great interviews of Jason Calacanis, Parker Thompson, Jenny Rooke and Kirill Makharinsky and of course a podcast by Marc Andreessen ( Tim Ferriss did). There is a ton of info here that I find very valuable. Suggestion, start with the Calacanis or Andreessen podcast first!

 

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https://angel.co/radio

 

Good Luck to everyone! It is important to note that I have been or am currently a limited partner in several of the tier #1 VC funds in the valley and some smaller VC funds to show and help support my friends along their Venture Capital journey. I believe that this also demonstrates my commitment to their fund and an understanding of their culture, values and future success. Please make sure you click on the links and open the articles here; they are excellent and worth a read. I do not want my personal story to overshadow any of these other posts. Write me if you need me or need help with anything. I really believe the more people I help, the more it helps me!

How startups win

If you don’t know where you’re going, how will you know when you get there?

I was having a second coffee with an ex-student, now the head of a marketing inside a rapidly growing startup. His company had marched through customer discovery, learning about the customer problem, validated solutions and was now scaling sales and marketing. All good news.

But he was getting uneasy that as his headcount was growing, the productivity of his marketing department seemed to be rapidly declining.

I wasn’t surprised. When organizations are small (startups, small teams in companies and government agencies) early employees share a mission (why they come to work, what they need to do while they are at work, and how they will know they have succeeded). But as these organizations grow large, what was once a shared mission and intent gets buried under HR process and Key Performance Indicators.

I told him that I had learned long ago that to keep that from happening, you need to on-board/train your team about mission and intent.
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Why Do You Work Here?
I had taken the job of VP of Marketing in a company emerging from bankruptcy. We’d managed to secure another infusion of cash, but it wasn’t going to last long.

During my first week on the job, I asked each of my department heads what they did for marketing and the company. When I asked our trade show manager, she looked surprised and said, “Steve, don’t you know that my job is to take our booth to trade shows and set it up?” The other departments gave the same type of logistical answers; the product-marketing department, for example, said their job was to get the product specs from engineering and write data sheets. But my favorite was when the public relations manager told me, “We’re here to summarize the data sheets and put them in press releases and then answer the phone in case the press calls.”

If these sound like reasonable answers to you, and you are in a startup, update your resume.

Titles Are Not Your Job
When I pressed my staff to explain why marketing did trade shows or wrote press releases or penned data sheets, the best response I could get was, “Why that’s our job.” In their heads their titles were a link back to a Human Resources job spec that came from a 10,000-person company (ie. listing duties and responsibilities, skills and competencies, reporting relationships…)

It dawned on me that we had a department full of people with titles describing process-centric execution while we were in environment that required relentless agility and speed with urgency. While their titles might be what their business cards said, titles were not their job – and being a slave to process lost the sight of the forest for the trees. This was the last thing we needed in a company where every day could be our last.

Titles in a startup are not the same as what your job is. This is a big idea.

Department Mission Statements – What am I Supposed to Do Today?
It wasn’t that I had somehow inherited dumb employees. What I was hearing was a failure of management.

No one had on-boarded these people. No one had differentiated a startup job description from a large company job. They were all doing what they thought they were supposed to.

But most importantly, no one had sat the marketing department down and defined our department Mission (with a capital “M”).

Most startups put together a corporate mission statement because the CEO remembered seeing one at his last job or the investors said they needed one. Most companies spend an inordinate amount of time crafting a finely honed corporate mission statement for external consumption and then do nothing internally to make it happen. What I’m about to describe here is quite different.

What our marketing department was missing was anything that gave the marketing staff daily guidance about what they should be doing. The first reaction from my CEO was, “That’s why you’re running the department.” And yes, we could have built a top-down, command-and-control hierarchy. But what I wanted was an agile marketing team capable of operating independently without day-to-day direction.

We needed to craft a Departmental Mission statement that told everyone why they came to work, what they needed to do while they were at work, and how they would know they had succeeded. And it was going to mention the two words that marketing needed to live and breathe: revenue and profit.

Five Easy Pieces – The Marketing Mission
After a few months of talking to customers and working with sales, we defined the marketing Mission (our job) as:

Help Sales deliver $25 million in sales with a 45% gross margin. To do that we will create end-user demand and drive it into the sales channel, educate the channel and customers about why our products are superior, and help Engineering understand customer needs and desires. We will accomplish this through demand-creation activities (advertising, PR, tradeshows, seminars, web sites, etc.), competitive analyses, channel and customer collateral (white papers, data sheets, product reviews), customer surveys, and customer discovery findings.

This year, marketing needs to provide sales with 40,000 active and accepted leads, company and product name recognition over 65% in our target market, and five positive product reviews per quarter. We will reach 35% market share in year one of sales with a headcount of twenty people, spending less than $4,000,000.

  • Generate end-user demand (to match our revenue goals)
  • Drive that demand into our sales channels
  • Value price our products to achieve our revenue and margin goals (create high-value)
  • Educate our sales channel(s)
  • Help Engineering understand customer needs

That was it. Two paragraphs, Five bullets. It didn’t take more.

Building a Mission-focused Team
Having the mission in place meant that our team could see that what mattered wasn’t what was on their business card, but how much closer their work moved our department to completing the mission. Period.

It wasn’t an easy concept for everyone to understand.

My new Director of Marketing Communications turned the Marcom departments into a mission-focused organization. Her new tradeshow manager quickly came to understand that his job was not to set up booths. We hired union laborers to do that. A trade show was where our company went to create awareness and/or leads. And if you ran the tradeshow department, you owned the responsibility for awareness and leads. The booth was incidental. I couldn’t care less if we had a booth or not if we could generate the same amount of leads and awareness by skydiving naked into a coffee cup.

The same was true for PR. My new head of Public Relations quickly learned that my admin could answer calls from the press. The job of Public Relations wasn’t a passive “write a press release and wait for something to happen” activity. It wasn’t measured by how busy you were, it was measured by results. And the results weren’t the traditional PR metrics of number of articles or inches of ink. I couldn’t care less about those. I wanted our PR department to map the sales process, figure out where getting awareness and interest could be done with PR, then get close and personal with the press and use it to generate end-user demand and then drive that demand into our sales channel. We were constantly doing internal and external audits and creating metrics to see the effects of different PR messages, channels and audiences on customer awareness, purchase intent and end-user sales.

The same was true for the Product Marketing group. I hired a Director of Product Marketing who in his last company had ran its marketing and then went out into the field and became its national sales director. He got the job when I asked him how much of his own marketing material his sales team actually used in the field. When he said, “about ten percent,” I knew by the embarrassed look on his face I had found the right guy. And our Director of Technical Marketing was superb at understanding customer needs and communicating them to Engineering.

Mission Intent – What’s Really Important
With a great team in place, the next step was recognizing that our Mission statement might change on the fly. “Hey, we just all bought into this Mission idea and now you’re telling us it can change?!” (The mission might change if we pivot, competitors might announce new products, we might learn something new about our customers, etc.)

So we introduced the notion of Mission Intent. Intent answered the question, “What is the company thinking and goal behind the mission?” In our case, the mission of the company was to sell $25 million of product with 45% gross margin. The idea of teaching intention is that if employees understand what we intended behind the mission, they can work collaboratively to achieve it.

We recognized that there would be a time marketing would screw up or something out of our control would happen, making the marketing mission obsolete (i.e. we might fail to deliver 40,000 leads.) Think of intention as the answer to the adage, “When you are up to your neck in alligators it’s hard to remember you were supposed to drain the swamp.” For example, our mission intent said that the reason why marketing needed to deliver 40,000 leads and 35% market share, etc., was so that Sales could sell $25 million of products at 45% gross margin.

What we taught everyone is that the intention is more enduring than the mission. (“Let’s see, the company is trying to sell $25 million in product with 45% gross margin. If marketing can’t deliver the 40,000 leads, what else can we do for sales to still achieve our revenue and profitability?”) The mission was our goal, but based on circumstances, it might change. However, the Intent was immovable.

When faced with the time pressures of a startup, too many demands and too few people, we began to teach our staff to refer back to the five Mission goals and the Intent of the department. When stuff started piling up on their desks, they learned to ask themselves, “Is what I’m working on furthering these goals? If so, which one? If not, why am I doing it?”

They understood the mission intent was our corporate revenue and profit goals.

Why Do It
By the end of the first year, our team had jelled. (Over time, we added the No Excuses culture to solve accountability.) It was a department willing to exercise initiative, with the judgment to act wisely and an eagerness to accept responsibility.

I remember at the end of a hard week my direct reports came into my office just to talk about the week’s little victories. And there was a moment as they shared their stories when they all began to realize that our company (one that had just come off of life support) was beginning to kick the rear of our better-funded and bigger competitors. We all marveled in the moment.

Lessons Learned

  • Push independent execution of tasks down to the lowest possible level
  • Give everyone a shared Mission Statement: why they come to work, what they need to do, and how they will know they have succeeded.
  • Share Mission Intent for the big picture for the Mission Statement
  • Build a team comfortable with independent Mission execution
  • Add a No Excuses Culture
  • Agree on Core Values to define your culture

Jared Kushner is going to run a new White House office to bring business ideas to government

U.S. President Donald Trump gives a thumbs-up as he and White House Senior Advisor Jared Kushner depart the White House in Washington, U.S., March 15, 2017. REUTERS/Kevin Lamarque

U.S. President Donald Trump gives a thumbs-up as he and White House Senior Advisor Jared Kushner depart the White House in Washington, U.S., March 15, 2017. REUTERS/Kevin Lamarque

WASHINGTON (AP) — President Donald Trump is set to announce a new White House office run by his son-in-law that will seek to overhaul government functions using ideas from the business sector.

A senior administration official said Trump on Monday will announce the White House Office of American Innovation. The official sought anonymity to discuss the office in advance of the formal rollout.

The plans for the office were first reported by The Washington Post.

The innovation office will be led by Jared Kushner, a senior adviser to Trump, and will report directly to the president.

Among those working on the effort are National Economic Council director Gary Cohn, Dina Powell, senior counselor to the president for economic initiatives and deputy national security adviser, Chris Liddell, assistant to the president for strategic initiatives and Reed Cordish, assistant to the president for intragovernmental and technology initiatives. All have extensive business experience.

 

Trump is readying to announce the new office at a low point in his young administration, days after the Republican bill to repeal and replace the Affordable Care Act, also known as "Obamacare." imploded in the House of Representatives, revealing deep divides within GOP and fraying tensions at the White House.

This effort has been developing since shortly after the inauguration, the official said. The group has been meeting since then and started talking to CEOs from various sectors about ways to make changes to federal programs. Areas they hope to tackle include overhauling Veterans' Affairs, improving workforce development and targeting opioid addiction.

Trump's daughter Ivanka, who is married to Kushner and has a West Wing office but no official job, will get involved on issues she is focused on, such as workforce development.

How to Read People Instantly by Asking 1 Simple Question

CREDIT: Getty Images

CREDIT: Getty Images

You're in the break room with a new coworker you don't know very well, and that person strikes up a conversation. You're a little guarded, and on top of that, you're an introvert. Is this someone you can trust enough to want to build a connection? How can you tell?

As it turns out, science has got your back. You can find out plenty about a person with one magic question with the power of a Vulcan mind meld. But before I give it to you, here's some quick background on the research.

How positively a person you're getting to know sees other people has been linked to how happy, kind-hearted and emotionally stable that person is. This is according to 2010 research by Wake Forest University psychology professor Dustin Wood.

"Your perceptions of others reveal so much about your own personality. Seeing others positively reveals our own positive traits," says Dr. Wood, lead author of the study.

The study also found that how positively you see other people shows how satisfied you are with your own life, and how much you are liked by others. Now I'm itching to give you the magic question for that new coworker in the break room you're not sure about, but bear with me.

On the flip side, if someone's tendency is to speak and describe others in negative terms (even if the person being described does have negative traits), it's a bigger tip off that the person you're speaking with will have higher levels of narcissism and antisocial behavior.

Red alert!

Here's Dr. Wood: "A huge suite of negative personality traits are associated with viewing others negatively. The simple tendency to see people negatively indicates a greater likelihood of depression and various personality disorders."

The Magic Question

Here's where it gets really interesting. Asking that new coworker in the break room you're not sure about what he or she thinks about someone else... reveals much about his or her own personality. The reason? People tend to see more of their own qualities in others.

Now that you've got your secret weapon, lets get back to the break room scene with that new coworker. Your question should sound something like this: "So tell me, how are you liking it here so far?" Followed by, "How do you like working with [coworker/boss name]?"

You'll find the study published in the Journal of Personality and Social Psychology, 2010.