What is the most important ingredient in a startup?
This question is asked of me constantly and my answer always is “culture.” Its a very amorphous attribute, yet it trumps, in my opinion, other attributes such as rock star employees, product portfolio and even capital.
To me, in our type of company (fast-paced software products company), team culture is about 1) the quality of the team as a whole (not just quality of a few rock stars), 2) the interdependence of the team and 3) their individual and team accountability.
With a great team culture, one can create a good portfolio of products, but without the correct culture, creating products will be strained and may even fail altogether. In a fast-paced technology market, good products today have limited shelf-life and new products must be continually created. With the correct culture, it is possible to create endless stream of new products.
How to Create the Right Culture
First, it is important to be true to everyone. Employees quickly see through double-talk and bureaucratic veil. Transparency is an oft-used word, but it is about being true to the written and unwritten agreements with employees. If there is a gray area, the employer should always take the high road.
Second, it is important to be compassionate yet business-minded. In our company, the company pays 100% of the health insurance–not 5 or 10% matching contribution. Looking simply at economics, it is very easy to offer less, especially when health insurance costs are growing double digits each year, but satisfied employees contribute a lot more. Equally, it pays well to be accommodative to each employee’s situation–for that reason, having a very flexible working environment, including unlimited vacation policy does wonders. It might seem unlimited vacation can ruin a team, but, in reality, the opposite is true; due to interdependence of the team, individual team member does not free-load to the detriment of the entire team.
Third, it is important to be fair with each employee, but also across employees. Accountability is part of this ethos–I have a saying for team members: “You do good work, its easily recognized; you mess up, that is also visible to everyone.” Each person’s achievement, attitude as well as the team’s overall achievement should determine important aspects like individual & team perks like parking spaces, but also overall compensation. As long as one is fair and consistent, you’ll get paid pack in a very productive and agile team that will go to bat for you in the marketplace.
When you are running a startup, which opportunities to pursue can be a difficult task. Even though, one may want to take on all opportunities, it would be very unwise to pursue them all. Since the resources are limited a structured qualification process that is easy to understand by all, yet quick to execute goes a long way.
Over the years, I’ve developed what I call the “3 Rs” and I share it with others in my company as well as others in the entrepreneurship community.
Here’s what they stand for, and the blended output is subjective, yet very helpful in the qualification of a prospect.
Revenue: Cash is king, especially in a B2B business, so a customer bringing in revenue matters.
Reference: Depending on the stage of the business, the quality of the customer reference is very advantageous.
Resourced: The product the prospect wants is already built, which means incremental cost is zero or very low. Or do you need to go out and build it?
The ideal of course is a very good quality customer wants to give you lots of cash for something you have already built. That’s an easy case.
The harder cases are:
- What if a high quality prospect (good Reference for future business) wants to give you little or nothing in cash (low Revenue). This is where, if the reference is really good and you already have it sitting on the shelf, you may want to do the deal.
- What if a high quality prospect will give you a lot of Revenue, but you have yet to build it (not yet Resourced)? This is where you need to decide if the product to be built can be resold many times (e.g. licensed software) or is it a “work-for-hire” custom product just meant for the larger entity (i.e. one-time revenue potential)
In a software business, in a B2B environment, if the use-case or application is right down the middle of the Resourced product, the other two will help you decide whether to take on the opportunity or not.
Not all comers are your future customers, choosing wisely can be the difference between a thriving and dying business.
[This blog first appeared on American Express OPEN Forum on May 23, 2011]
In today’s “always-connected” world, it’s increasingly true that referrals are better than cold-calling. Businesses that engage customers and allow them to scream from the social media rooftops will be pleasantly surprised. Listen to what your customers are saying online, and you will see measurable sales uplift.
So how can a small business owner reach out to always-connected customers and keep them engaged?
Understand their world
There are 303 million mobile devices in the United States (close to 96 percent penetration), according to CTIA. Twenty-seven percent of thosemobile devices are smart phones capable of browsing the Web, going on social media sites, tweeting and so on. New devices like the iPhone, iPad and Android products will escalate the always-connected culture. Your prospects and customers are always online at work, at home and on the go. They inquire, search and interact—blind to your company’s “operating hours.”
Use systems/tools for help
Fortunately, there are many systems and tools that you can use to make it easier to manage so that you don’t have to actually be available 24/7. Short, pithy and clear product videos on YouTube can direct people to self-help. Informational blogs and a FAQ or resource page on your website can also answer many customer questions. If your customer community is large and active, create a online user forum. Also, you can tweet messages about your product or service—but don’t forget to also highlight news and information on related topics in your industry. Increasingly, businesses have a corporate LinkedIn account and active Facebook pages. If your business relies on 24/7 services rendered by various servers, then so do your customers. There are many software-as-a-service tools that can send you e-mail, SMS or mobile app alerts. Some systems even provide you a dashboard of your various systems and severity of automated alerts.
Mobilize your team
Engaging customers and prospects is not just the senior management’s or customer service representatives’ role. It is the entire team’s role, so the entire team must be empowered to act. After training, stress three words: Use common sense. Then, watch how well an empowered and results-oriented team operates. In an always-connected world, there may not always be a “map” or instructions from management. Dynamic teams solve problems on the ground, and you must give them space and trust to do so.
Measure and respond
Today, there are many free and paid tools that allow you to measure anything. At the very least, you should use Google Analytics to measure traffic to your website. Sophisticated tools can even tell where on your website customers are clicking, so you can eliminate sections of the website that people don’t care for. Create “listening posts” around the Internet that direct users to your website—content on YouTube, Facebook, Twitter, blogs and referring links from stories on media sites or partner sites. The larger the number of links, the higher your organic ranking in the eyes of search engines like Google, Yahoo and Bing. If you want to give the organic ranking paid help, you can buy AdWords, sponsored links and banner ads. Whatever you use, make sure you can measure its efficacy.
Show that you care
With customers, always listen, listen some more and respond—online, in Twitterland, on Facebook and even via e-mails and letters. Even if the response is, “We are aware of the problem and working on it,” please respond. The speed at which you respond will speak volumes about your proactive stance. And speak with authenticity. Everything is amplified by the Internet, so promote, but don’t cross the line. Ask for forgiveness if needed, but be proactive and authentic.
Establish referrals as a new sales channel
If people trust you, they’ll recommend you to their social media friends and retweet or share your tweets or blog posts. When it all works, it’s like magic. Referral and repeat business keeps coming and the amplification of the Internet makes it a virtuous circle.