Secrets of the Most Productive People I Know

Posted On April 26, 2012

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The path to productivity is not a new assistant or project management software. It’s these four shared characteristics.

Like most everyone else, I worry about productivity. Since there aren’t more hours in the day, how can I get more done? That’s made me reflect on the truly productive people I’ve known or worked with throughout my career.

They all share certain characteristics:

1. They have a life.

Far from being the maniacally focused, late night or early morning types, truly creative innovators or problem solvers have a rich life outside of work. One of the finest CEOs I’ve known, Carol Vallone, founder of WebCT, coached her local softball team. She said it’s where she honed her leadership skills. It also meant she had to take her mind off work and think in different ways. No wonder academic research keeps showing that external commitments are highly correlated with high achievement.

2. They take breaks.

It’s easy to think that you’ll get more done if you never stop. But what’s clear from neuroscience is that we can easily get resource-depleted (tired) and can quickly become rigid and narrow minded (tunnel vision). In other words, we get stuck. Taking a break—just walking around for a minute—can reset and refresh your mind, allowing you to see solutions that another hour at the desk would not have revealed. It’s one reason we often have our best ideas driving home.

3. They’ve often worked in several different industries.

This means that they regularly challenge orthodoxies because they’ve seen different frameworks and approaches. They may not take so much for granted, and have the experience to see the value in re-framing problems.

4. They have great outside collaborators.

Sometimes these collaborators are formal, often not. But their sounding boards aren’t just immediate colleagues or clients. Their wide networks allow them to incorporate a wider range of thinking, contacts and information and they bring light and air into the business.

What all of these characteristics demonstrate is that truly productive people have very wide and rich peripheral vision: external commitments, time to breath, multiple perspectives, and contacts. These individuals bring far more to the table than their immediate task or job requires. They’re productive because they have such rich resources to call upon: science, music, art, literature, theatre, furniture design, pot plants—you name it. There is always much more to them than ever meets the eye. What this means is that the secret to productivity isn’t a new organizer, a piece of software, or a new app. It’s having a whole life. 

 

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If You Have An Idea But You’re Too Lazy To Start A Company, Quirky Will Pay You A Lifetime Royalty For It

Posted On April 26, 2012

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Founders And VCs Reveal 21 Books Every Entrepreneur Should Read

Posted On April 26, 2012

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We’ve polled everyone from First Round Capital’s Charlie O’Donnell to Steve Blank and Brad Feld in the past few years, and they told us what books have shaped their careers. 

From Malcolm Gladwell’s “Blink” to Robert Pirsig’s “Zen and the Art of Motorcycle Maintenance,” these books will teach you how to think — no matter if you’re a serial entrepreneur or are just starting a business.  

Let us know what books have influenced your career in the comments. 

Read more: http://www.businessinsider.com/founders-and-vcs-reveal-21-books-every-entrepreneur-should-read-2011-10#ixzz1rWPfIRwS

“The Fountainhead” by Ayn Rand

Charlie O’Donnell: “I don’t know any book that sums up the entrepreneurial passion and spirit better than The Fountainhead by Ayn Rand: ‘The question isn’t who is going to let me; it’s who is going to stop me.'”

Read more: http://www.businessinsider.com/founders-and-vcs-reveal-21-books-every-entrepreneur-should-read-2011-10#the-fountainhead-by-ayn-rand-1#ixzz1rWPmWBk0

 

 

Can You Share Too Much Online? No

Posted On April 26, 2012

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The answer to remaining relevant in today’s digital marketplace is adopting this simple philosophy: “Share everything, everywhere.”

As an Internet marketer with a specialization in professional SEO services I’m consistently asked a question that goes something like, “How do I ensure my company remains relevant in today’s ever-changing digital marketplace?” Simple, right?

Typically, these executives or business owners are looking for some new digital marketing tactic that will ensure their success, so that they can start sleeping again. Many of them are frustrated after spending millions on failed digital marketing initiatives. Unfortunately, I can give them no silver bullet tactic. My response is a business philosophy that I believe has built many digital giants, such as Zappos and Ebay.

This philosophy is simple: “Share everything, everywhere.”

Share everything about your business, industry, staff and products or services, and share this information everywhere possible. Engage your customers both on your website and off it in blogs, forums, and social networks. Be open and honest about what makes your company great and discuss your struggles. Contribute thought leadership to your industry. I’ll go as far as to advocate taking a long hard look at closely guarded trade secrets to determine if any can be shared. Trade secrets are often extremely powerful pieces of thought leadership, and sharing them can help a company evolve beyond them. The only exception to this philosophy is sharing irrelevant information on irrelevant websites, otherwise defined as SPAM.

Sharing will ensure your company remains digitally relevant by vastly expanding your digital footprint. To determine how digitally relevant your company is, perform a Google search for your products or services. Google is the first single source that the majority of the population trusts to determine the best companies in any given industry. If your company doesn’t show up on the first page of search results, you’re not digitally relevant; and it’s very likely you’re not sharing as much information as your competitors.

Sharing works for one simple reason. Google and other search engines judge companies based upon the information available about them on the Internet. The less quality digital information associated with company, the less relevant you are on the web. Your company may have incredible products or services, but without sharing, engaging and contributing to the digital conversations about them, search engines may have no idea.

Search engines have ushered in the Information Age by cataloging the world’s information and putting it at our fingertips within seconds. Consumers are now more empowered than ever to research your company online before making a purchase. This new phenomenon has been labeled the Zero Moment of Truth where consumers search for digital information about your product or service before buying. This Zero Moment of Truth can happen at most any time—after seeing your commercial or even in the aisle with product in hand.

Sharing increases the likelihood that consumers will find compelling information about your products or services during the Zero Moment of Truth. Working with many large enterprises, I find that this philosophy of “Share everything, everywhere,” is often a hard pill to swallow. The majority of large companies are extremely protective of their brand and its easily accessible information. This risk-aversion often leads to strict, cumbersome compliance and little sharing of information. Often it is not fully understood by executives just how inherently risky this “risk-averse” stance can be.

One thing to keep in mind when sharing is to focus far more on the information you’re sharing than your branding. During the Zero Moment of Truth consumers typically shut down immediately when they find blatantly biased advertising speak and in-your-face branding.

Again, my advice to companies that want to remain relevant in the evolving digital marketplace is to share everything everywhere. I know this may sound like an overwhelming initiative, but so is the ROI from being digitally relevant.  Not only is digital relevance an incredible boon to brand awareness, but it’s also a ticket to one of the largest lead sources on the Internet, organic search engine rankings

12 Ways to Attack Any Challenge

Posted On April 26, 2012

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Stuck in a rut? Need to accomplish the impossible? Step right up. Here’s how to get started.

Whenever I’m discussing a challenge—okay, fine, whenever I’m whining about a problem—my wife eventually interrupts and says, “Yeah, yeah. I get it. So what are you going to do differently?”

Her response would be fairly frustrating if she wasn’t right. Discussing—okay, fine, whining—never helps. The only way to overcome a problem is to do something differently.

But there’s no reason to wait until you’re forced to make a bad situation better. There’s a better approach. Why not be proactive and turn average into awesome?

Especially since it’s easy: Just employ one of the Five As of Awesome. (Wait—did I just channel my inner Tony Robbins?)

All you have to do is pick one of the following things to do differently:

Accept

Be who you are. I would like to ride a motorcycle like this guy. Or climb like this guy. Or run a company like her. Or change the world like him.

I won’t.

And, for the most part, I’m okay with that, since I can always be a better me. I can ride faster or climb better than I do now, and I can make a bigger difference in the lives of my family and friends.

Think about the people you admire and pick a few of their qualities to emulate, not their accomplishments.

You can’t be them.

The cool thing is, they can’t be you.

Let others be who they are. Your customers, your vendors, your suppliers… they aren’t going to change. Don’t expect them to.

Pick one source of frustration and decide what you will do differently, including, possibly, walking away.

When you stop focusing on negatives you may start to notice the positive qualities you missed. Rarely are people as bad as you make them out to be—and if they are, it’s up to you to make whatever changes are necessary.

They won’t.

Assist

Help an employee. Don’t wait to be asked. Pick someone who is struggling and offer to help.

But don’t just say, “Is there some way I can help you?” Be specific: Offer to help with a specific task, or to take over a task for a few days, or to work side-by-side.

A general offer is easy to brush aside. A specific offer not only shows you want to help, it shows you care.

Help a superstar. Counterintuitive? No way.

Compared to others, the best-performing people don’t need help so they rarely get it. As a result they’re often lonely, at least in a professional sense.

Offer to help with a specific task. Not only will you build a nice interpersonal bridge, some of their skills or qualities might rub off on you.

Help anyone. Few things feel better than helping a person in need. Take a quick look around; people less fortunate than you are everywhere.

For example, I conducted an interview skills seminar for prison inmates (after all, who needs to know how to deal with tough interview questions more than a convicted felon?) It only took an hour of my time and was incredibly rewarding.

Most of the prisoners were touchingly grateful that someone—that anyone—cared enough to want to help them. I got way more out of the experience than they did.

Analyze

Change measurements. Over time we all develop our own ways to measure our performance.

Maybe you focus on time to complete, or quality, or end result. Each is effective, but sticking with one or two could cause you to miss opportunities to improve.

Say you focus on meeting standards; what if you switched it up and focused on time to complete?

Measuring your performance in different ways forces you to look at what you regularly do from a new perspective.

Change benchmarks. If you develop apps it’s fun to benchmark against, say, the success of Angry Birds. Setting an incredible goal is fine—if you don’t aim high you won’t reach high—but failing to hit a lofty goal can kill your motivation.

So choose a different benchmark. Look for companies or people with similar assets, backgrounds, etc. and try to beat their results. Then, after you do, choose another target.

Aim for the heights, but include a few steps along the way. The journey will be a lot more fun.

Approach

Go opposite. If you haven’t reached a goal then what you’re currently doing isn’t working.

Instead of tweaking your approach, take an entirely different tack. Pick one goal you’re struggling to achieve and try a completely different approach.

Sometimes small adjustments eventually pay off, but occasionally you just need to blow things up and start over.

Drop one thing. We all have goals. Often we have too many goals; it’s impossible to do 10 things incredibly well.

Take a look at your goals and pick at least one that you’ll set aside, at least for now. (Don’t feel bad about it. You weren’t reaching your goals anyway, so what’s the harm in dropping a few?)

Then put the time you were spending on that goal into your highest priority. You can’t have it all, but you can have a lot—especially when you narrow your focus to one or two key goals.

Change your workday. Get up earlier. Get up later. Take care of emails an hour after you start work. Eat at your desk.

Pick one thing you do on a regular basis, preferably something you do for no better reason than that’s the way you always do it and therefore it’s comfortable, and do that one thing in a different way or at a different time.

Familiarity doesn’t always breed contempt. Sometimes familiarity breeds complacency, and complacency is a progress and improvement killer.

Adopt

Choose a new habit. Successful people are successful for a reason, and that reason is often due to the habits they create and maintain.

Take a close look at the people who are successful in your field: What do they do on a regular basis? Then adopt one of their habits and make it your own.

Never reinvent a wheel when a perfect wheel already exists.

Choose someone to mentor. I learn more when I teach than the people I’m trying to teach. (Hopefully that says more about the process of teaching than it does about my teaching abilities.)

When you mentor another person you accomplish more than just helping someone else. You build your network—and more importantly, you learn a few things about yourself.

 

10 Ways Successful Entrepreneurs Beat The Odds

Posted On April 26, 2012

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Did you ever wonder why some entrepreneurs always seem to have all the luck and success, while others never seem to catch a break? As an Angel investor, I quickly learned that luck has very little to do with it, and I now look for some personal characteristics and leadership styles that separate the potential winners from the losers.

These differences are the reason that investors say that they invest in people, rather than ideas. As I was reminded recently in a new book by Dennis Perkins, “Leading at the Edge,” this isn’t a new concept. He illustrates this by comparing the acts of numerous teams which faced the edge of life and death as early Antarctic explorers in the 1800s.

He was able to identify ten strategies that were the common threads to survival in the winning explorer teams, which I believe apply equally well to the survival and success of business startup teams today:

  1. Never lose sight of long-term goals, but focus real energy on short-term objectives. Don’t be afraid to pivot, and commit to new objectives with as much passion and energy as the original. Andy Grove of Intel fame started making memory chips, but switched to microprocessors with a vengeance when Japan totally undercut his pricing.
  2. Set a personal example with visible, memorable symbols and behavior. Under the stresses of a startup, visible leadership cues can make the difference between success and failure. When McDonald’s was still a small company, Ray Kroc, the CEO, had a penchant for asking a store manager to help him clean up trash in their parking lot.
  3. Instill optimism and self-confidence, but stay grounded in reality. That means you must first find optimism in yourself. Then it extends to the hiring process. Herb Kelleher, while CEO of fledgling Southwest Airlines, said he only wanted people with positive attitudes. He also famously said,” We don’t do strategic planning. It’s a waste of time.”
  4. Take care of yourself: Maintain your stamina and let go of guilt. Evidence shows that effective entrepreneurs have high levels of energy, and handle stress well. But no one is superhuman. I once worked for a CEO of a startup company who insisted on working 20 hours a day, until a health crisis almost killed her, and did kill her company.
  5. Reinforce the team message constantly: “We are one – we live or die together.” Teamwork is the hallmark of high-performing startups. Establishing a shared identity is the first step to creating unity. The Google team stayed tight as they developed the technology, first working out of Larry Page’s dorm room at Stanford, then a garage
  6. Minimize status differences and insist on courtesy and mutual respect. CEOs who talk, and really listen, to everyone in the organization gain the highest reputation. Amazingly, Tim Cook, current CEO of Apple, has surpassed Steve Jobs score, and was recently ranked by the Glassdoor Survey the #1 respected CEO as voted by employees.
  7. Master conflict – engage dissidents, and avoid needless power struggles. Some entrepreneurs go to great lengths to avoid interpersonal friction, or engage the wrong way. Those of you who viewed the movie The Social Network, saw some examples of entrepreneurs dealing with conflict poorly, almost leading to the demise of Facebook.
  8. Find something to celebrate and something to laugh about. Especially under the constant pressures of a startup, the ability to lighten up, celebrate, and laugh can make all the difference. Herb Kelleher, mentioned earlier, is one leader who also understood the power of humor in business, with his own antics, and focus on “fun ware.”
  9. Be willing to take the Big Risk. Risk aversion does not always result in disaster, but neither does it create change. Risk takers make things happen. Think of the risk taken by CEO Todd Davis of LifeLock when he posted his Social Security number online, to assure customers the he could protect them from identity theft. It worked.
  10. Never give up – there’s always another move. Rather than expecting things to go right, entrepreneurs have to assume things will go wrong, and solutions are elusive. Colonel Sanders started at a late age to build his chicken recipe into KFC (Kentucky Fried Chicken). It took two years of persistence to get the money. The rest is history.

Investors (and team members and partners) find that it’s more effective to assess an entrepreneur’s fit to these personal characteristics than it is to assess the real potential of an idea, or the probability of good luck. We listen to you and judge how many of these are practiced by you. When it’s time for due diligence, we will talk to your team. Their perception is the only reality. What do you think they will say?

Read more: http://blog.startupprofessionals.com/2012/04/10-ways-successful-entrepreneurs-beat.html#ixzz1rWPKV4da

 

4 Ways to Create Brand Content People Actually Care About

Posted On April 26, 2012

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We sing the praises of brands that appear to effortlessly lead the social conversation–Tom’s Shoes, Virgin America, Chipotle–while simultaneously hitting “refresh” on our Facebook likes, completely missing the point.  

The numbers game (fans, followers, traffic, sign-ups, sales) will always fail as long as we fail to connect to what the customer cares about: footwear that makes a difference, a travel experience that makes flying fun, fresh food and great music. Marketing strategies will maintain their mediocre successes as long as we keep expecting engagement and loyalty from our customers without giving them the same consideration. However, by investing time and resources to develop great gobs of gorgeous content with compelling, interesting messages worth sharing, the scales will tip, the pendulum will swing. 

Whether your goal is to galvanize public awareness around an important social issue or showcase new spring denim colors, aim to deliver relevant, sharable content for your customer across multiple touch points that connect to their life moments.

Here are some considerations when introducing strategic content strategy into the mix:  

Start with what you already have. Content development and process begins with the organization. Perform a communication audit of existing collateral, creative assets, and positioning from the perspective of the customer. There are likely many existing content resources that with a bit of shine can be revitalized into powerful content marketing pieces–just take a look at the amazing photography that the New York Times incorporated into its Facebook timeline. However, be a fierce editor, ruthless about sending things to the cutting room floor. Ask yourself honestly, “Is this any good?” “Do these images make me feel the right kind of something?” “Is this worth sharing?” In addition to reviewing existing materials, gather opinions about content opportunities and upcoming milestones from staff members. Involve your entire organization in a creative brainstorm to uncover the compelling stories that are already happening, ripe for the telling. 

Let the social conversation l ead. Some of the best advice I’ve heard about writing is to “listen to your audience and they’ll write your copy for you.” The social web is a goldmine for business intelligence. Make a point to listen and learn from what people are saying about you, your competitors, and the world at large. When you find out what is inspiring, challenging, or cracking up your customer, you’ve hit the jackpot. Take a look through trending topics on Twitter, top videos on YouTube, and your own social feeds for inspiration.

Abide by your customer’s to-do list. As the editor in chief of your organization, develop an editorial calendar that takes into account key dates not only in your industry, but those that matter to your customer. Your annual sales meeting or tradeshow booth might be a big deal to you, but what about it is interesting to your customer? How can you bring them into the fold? Maybe it’s a series of quick “nice to meet you” videos for your Facebook community with the C-suite, or a Twitter contest to crowd source the name of this season’s new laptop bag, then announced via live-feed during a special customer Q&A. For clothing brand Free People, the music festival Coachella was an important enough event to warrant a how-to video on DIY body paint for on-trend festival decoration.

Make transmedia your best friend.  Get the most value out of investing in content by including multiple platforms and varied content around singular campaigns. During the planning phase, consider the different ways to connect to your audience and decide ahead of time to develop and integrate several of these platforms into your approach. Behind-the-scenes still shots at a video shoot can be published to Instagram, and money-saver tips used as website copy can be turned into a series of illustrated JPEGs and posted to Pinterest. Of course, it’s not necessary to always use every platform, but it is necessary to consider each platform.

Now is the time to augment the traditional marketing conversion funnel with a strategic content strategy. Whether you imagine your brand storytelling like the great American novel, celebrity blog, or must-see television comedy, know that sales are a natural outcome of placing value, connecting your brand to the broader issues and ideas that interest your customer.

Crosby Noricks is director of social media at Red Door Interactive and founder of PR Couture. With offices in San Diego, Carlsbad and Denver, Red Door Interactive, Inc., is a strategic partner dedicated to ensuring businesses acquire, convert, retain and engage their customers wherever they are. The firm holds more than a decade of expertise in successfully developing and executing communications initiatives across all touch points to deliver real, measurable results. Clients include Cricket Communications, CND (Shellac), Smith+Noble, Rubio’s Restaurants, and Charlotte Russe. Crosby can be reached at cnoricks@reddoor.biz or @PR_Couture.

 

4 Secrets of Great Critical Thinkers

Posted On April 26, 2012

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The best problem solvers see a complex problem through multiple lenses. Here’s how to become a better strategic thinker and leader yourself.

 

In 2009, J D Wetherspoon, a chain of more than 800 pubs in the UK, was facing declining sales. Demand for beer had been down for five years. In addition, pricing pressure from super market chains was intense, and higher alcohol taxes further squeezed his already tight margins.

What would you say is the company’s real business problem?

Most people see it as a sales problem and recommend better marketing and promotion. But this reflex may be wrong. In Wetherspoon’s case, the company examined the problem more deeply, looked at data, and framed the situation from multiple angles. In the end, they found the real problem: A subtle but profound shift in consumer preferences.  As a result, the chain responded with much bolder actions, transforming all its pubs into family friendly cafes during day hours. 

The strategy worked. Wetherspoon saw its earnings per share jump by 7.1 percent in the first year. Two years after this frame shift (2011), it has maintained its earnings per share and, with the investment in this new strategy, its free cash flow is up 12.9 percent. Exploring multiple problem framings, by zooming out rather than in, gets you to the root of issues and more creative solutions. 

If you fail to do this, you risk solving the wrong problem.

Ironically, the more experience you have, the harder it will to break from conventional mindsets. Leading companies often get stuck in old business models. Kodak engineers develop an early version of the digital camera, while the rest of the company remained focused on chemical film processing. Microsoft executives doubted the value of online search as a revenue model. Barnes and Noble seemed convinced that people will always want a physical book in their hand.

In his book Thinking, Fast and Slow, Nobel laureate Daniel Kahneman attributes shallow framing to people substituting easy questions for hard ones. We often miss the crux of the issue by drawing imaginary connections between what we see and what we expect to see. As our own book Winning Decisions explains, the essence of critical thinking is to slow down this process, learn how to reframe problems, see beyond the familiar and focus on what is unique in any important decision situation. Here are four ways to hone these critical thinking skills:

1. Slow down.  Insist on multiple problem definitions before moving towards a choice. This need not be to be a time consuming process – just ask yourself or the group “how else might we define this problem – what’s the core issue here?” This should become a standard part of every project scoping conversation you have, especially when the issue is new or complex.

2. Break from the pack. Actively work to buck conventional wisdom when facing new challenges or slowly deteriorating situations. Don’t settle for incremental thinking. Design ways to test deep held assumptions about your market. Of course, different is not always better so seek to understand the wisdom inherent in conventional wisdom as well as its blind spots.

3. Encourage disagreement. Debate can foster insight, provided the conflict is among ideas and not among people.  Increasingly we live in a world where people can choose to interact only with those who agree with them, through Facebook friends, favorite news sources, or our social cliques. To escape from these cocoons and echo chambers, approach alternative views with an open mind. Don’t become a prisoner of your own myopic mental model.

4. Engage with mavericks. Find credible mavericks, those lonely voices in the wilderness who many dismiss, and then engage with them. It is not enough to simply be comfortable with disagreement when it happens to occur.  Critical thinkers seek out those who truly see the world differently and try hard to understand why. Often you will still disagree with these contrarions, but at times they will reframe your own thinking for the better.

 

 

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The Dirty Little Secret Of Overnight Successes

Posted On April 26, 2012

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BY Expert Blogger Josh Linkner | 04-03-2012 | 11:30 AM

This blog is written by a member of our expert blogging community and expresses that expert’s views alone.

Angry Birds, the incredibly popular game, was software maker Rovio’s 52nd attempt. They spent eight years and nearly went bankrupt before finally creating their massive hit.

Pinterest is one of the fastest-growing websites in history, but struggled for a long time. Pinterest’s CEO recently said that it had “catastrophically small numbers” in its first year after launch and that if he had listened to popular startup advice he probably would have quit.

James Dyson failed in 5,126 prototypes before perfecting his revolutionary vacuum cleaner. Groupon was put on life support and nearly shut down at one point in its meteoric rise.

When looking at the most successful people and organizations, we often imagine geniuses with a smooth journey straight to the promised land. But when you really examine nearly every success story, they are filled with crushing defeats, near-death experiences, and countless setbacks.

We often celebrate companies and individuals once they’ve achieved undeniable success, but shun their disruptive thinking before reaching such a pinnacle. Before Oprah was Oprah, before Jobs was Jobs, they were labeled as misguided dreamers rather than future captains of industry.

In your life, you’ve probably had a setback or two. When you stumble, it’s tempting the throw in the towel and accept defeat. There’s always an attractive excuse waiting eagerly, hoping you’ll take the easy way out. But the most successful people forge ahead. They realize that mistakes are simply data, providing new information to adjust your approach going forward.

The ubiquitous WD-40 lubricant got its name because the first 39 experiments failed. WD-40 literally stands for “Water Displacement–40th Attempt.” If they gave up early on like most of us do, we’d sure have a lot more squeaky hinges in the world. 

You have a mission to accomplish and an enormous impact to make. You will inevitably endure some “failures” along your journey, but you must realize that persistence and determination have always been primary ingredients in accomplishment. 

Don’t cave to your mistakes, embrace them. In fact, mistakes are simply to the portals of discovery. There’s an old saying that “every bull’s-eye is the result of a hundred misses.” So the next time you feel the sting of failure, just realize you’re likely one shot closer to hitting your target.

And who knows? Maybe after a few dozen failures and months or years of hard work, you might just be that next “overnight” success.

For more insight on creativity and innovation, visit joshlinkner.com.

Very Encouraging article, Persistence is the key to success. While working on your idea there will be things and people who will slow you down , maybe make you rethink on continuing but at the end of the day you will have to get over all external factors that pull you away from success. What helps is focusing on the idea and not the end result.

 

ery very inspiring! i specially like this “They realize that mistakes are simply data, providing new information to adjust your approach going forward.” it shows how nothing is final, its like a rally paper, and every outcome is a tip that gets you towards the next clue, till you find your final quest.
Cheers! 

Totally appreciating the positivity from this post after a day feeling completely unproductive! Yet, when I looked at my work flow calendar I was right on track. Just goes to show how you have to ignore that not-so-little voice in your head that says “you suck”!

The Business Model for Disruption

Posted On April 26, 2012

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How do you plan for a disruptive business that doesn’t make money until later? What’s the business model?

One of the most interesting, exciting and potentially lucrative things you can do as an entrepreneur is disrupt a big market. One of the smartest people I know puts it very simply: If you manage to disrupt a big market, business will follow. Blow things up and you’ll make money. 

But sometimes there’s a catch: In today’s business environment, it’s difficult to disrupt and monetize at the same time. Monetize, by the way, is the new high-tech buzzword for making money. 

Facebook is the shining example of this new kind of business. We all watched (if we believe the movie version as told in The Social Network) Mark Zuckerberg ignore revenue as he dedicated himself feverishly to gaining traffic. He sneered at revenue because it would slow traffic.

Now, Facebook is talking about going public at a valuation of $80 billion or more. Although the number isn’t public knowledge, I did a web search and found that credible sources have estimated Facebook’s revenue last year at $4 billion. So, if you define business model as a way to make immediate money, Facebook didn’t have one until it figured out advertising several years after it started. 

Twitter and Pinterest are two other good examples. Press reports earlier this year had Twitter valued at $9.8 billion. That’s not for the revenue it generates now; that’s for the power it has in traffic, influence and future revenue. Twitter is struggling to come up with a business model, groping with ads and positioning in exchange for real money. As for the new upstart Pinterest, it just builds traffic and trusts the future. Twitter disrupted blogging and email. Pinterest disrupted photo sharing. 

The Business Model for Disruption

 

BY Tim Berry | 11 hours ago|

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How do you plan for a disruptive business that doesn’t make money until later? What’s the business model?

One of the most interesting, exciting and potentially lucrative things you can do as an entrepreneur is disrupt a big market. One of the smartest people I know puts it very simply: If you manage to disrupt a big market, business will follow. Blow things up and you’ll make money. 

But sometimes there’s a catch: In today’s business environment, it’s difficult to disrupt and monetize at the same time. Monetize, by the way, is the new high-tech buzzword for making money. 

Facebook is the shining example of this new kind of business. We all watched (if we believe the movie version as told in The Social Network) Mark Zuckerberg ignore revenue as he dedicated himself feverishly to gaining traffic. He sneered at revenue because it would slow traffic.

Related: The 10 Things Facebook Got Right Pre-IPO

Now, Facebook is talking about going public at a valuation of $80 billion or more. Although the number isn’t public knowledge, I did a web search and found that credible sources have estimated Facebook’s revenue last year at $4 billion. So, if you define business model as a way to make immediate money, Facebook didn’t have one until it figured out advertising several years after it started. 

Twitter and Pinterest are two other good examples. Press reports earlier this year had Twitter valued at $9.8 billion. That’s not for the revenue it generates now; that’s for the power it has in traffic, influence and future revenue. Twitter is struggling to come up with a business model, groping with ads and positioning in exchange for real money. As for the new upstart Pinterest, it just builds traffic and trusts the future. Twitter disrupted blogging and email. Pinterest disrupted photo sharing. 

Related: The Myth of the Business Plan

How do you develop a business plan for that? I can suggest two fundamentals to go by:

1. In terms of money flow, disruptive entrepreneurs spend investors’ funds until they get big enough to figure out how to generate revenue on their own. 

Say I’m building a new and exciting website or mobile app, then I want traffic now to stimulate buzz and excitement. Charging users will slow traffic growth, so I give my creation away at no charge. 

To raise money from investors, I start out with a seed round of a few hundred thousand dollars. That covers expenses for a few months as I build the prototype and prove the concept works. Next, I get a round of venture capital, maybe a million or more dollars, so I can hire some workers and keep going. Before that funding runs out, I manage to increase traffic and go back to venture capitalists for a much bigger pile of money. That sustains me a while longer, and I still don’t have to charge my users.

For a recent example of this kind of business plan, think of Klout, the influence measurement standard, at Klout.com. Founder Joe Fernandez raised $1.5 million in early 2010, then spent it building the algorithm, the site and the team to run the business. All of that went well. Klout did come up with its revenue-generating Perks program, but it isn’t enough money to support itself. So in late 2011, Klout raised another $30 million, enough to keep going until sometime in the future when it hopes to be worth a lot more money.
And so it goes.

2. The business planning for this kind of disruptive business is all about “burn rate” and “runway.” You fill the coffers with funds, spend them, and return to the well to raise more. Burn rate is the monthly spending amount, and runway is how long you have, at that burn rate, before your investment treasure chest is empty.

This is, in fact, a lot like what was going on in the late 1990s before the dot-com boom. What happened to get people playing this game again was Facebook’s huge success. And Twitter, although its business model is still murky, is also well-positioned to make some early investors big piles of money. 

It’s all sort of like prospecting. Every person who strikes it rich inspires a hundred more to buy picks and shovels and load up a burro.  

Related: 7 Ways to Transform Your Business Model

 

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