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Should Funded Entrepreneurs be paid a “Living Wage”?

August 4, 2015 Comments off

So, you’ve reached seed funding or even Series “A”.  Have you built in any compensation for yourself?  Should there be? If not, why not?

Do investors demand no salary of the founders as they perceive this as a sign of commitment by the entrepreneurs? Would they still fund it if you proposed your own salary?  Does salary or no salary make the difference in an early stage company?  Sure, there’s items such as dilution (because you are burning more investor cash), and other considerations, but I would like to focus primarily on the salary idea…

Tlwagehis thought rambled through my mind recently.  The national press frequently posts on minimum wage and how or if it is important to pay people to “live” at a certain standard.  There’s now a significant movement at the city level to move minimum wage higher absent of activity at the national level.

I’d like to ask this question of the entrepreneurial and investor community, and extend this as a challenge to those who study entrepreneurship.  Does paying founders at the early stage make a positive or negative difference on the outcome of the enterprise?  Does it help or hurt the disposition of the founding team?  Does it accelerate or hinder timing to a milestone event?

It’s interesting. There’s a lot of postings on what the “average” CEO and founding team gets paid in certain rounds of funding, but does not posit any reasoning or research supporting this.  Just what to expect, on average, using historical data.

Many questions, but not much data.  Should founders get some sort of income after seed rounds just to help pay the bills? Should it be a “standard rate”?  What’s your impression?

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Categories: Uncategorized

Inclusive Management, Messaging and Trust

February 8, 2013 Comments off

slide-39-638I recently found a great report – a global study called the Edelman Trust Barometer.  There’s a lot to learn from this report, but the key take aways for me are the following:

  1. A trusting culture requires a dynamic, not “top down” management – here they call it Inclusive Management – and it just doesn’t mean getting people’s opinions.
  2. “Credentialed Experts” are far and away more trusted than CEO’s as communicators.
  3. People (customers and employees) need to hear a message 3 to 5 times from various sources to change behavior or influence their opinion.
  4. CEO’s and Government Officials – Hit the bottom for worldwide trustworthiness in delivering a message

There’s much more to this report and a lot of learning.  Perhaps its time to have your “expert” on staff start delivering your message 3 to 5 times across multiple communication channels to ensure you have a trustworthy image that you can live up to.  In our world of increased transparency, you may not have any option but to have integrity.

2013 Habits – Do With Discipline

January 12, 2013 Comments off

megaphoneRecently, I was working with a start-up on developing a reporting template to update their investors and Board to ensure their stakeholders were well informed.  It is so important to ensure the communication channel is open to any stakeholder in your business.  It is surprising how many businesses start with the greatest of intentions, have a great opening salvo of communication and then drift off into only communicating when you have to – Annual Meetings, needing money, etc.

It is almost as if business leaders think their stakeholders absorb their business activity by osmosis.  Then, when they do need something, they are frustrated to learn their audience is far from ready to take action because they are struggling to absorb what has happened since the last update.

Stakeholder communication is critical, but not required – until you need something.  Think about making it a habit to communicate and solicit feedback on your progress, on a regular basis.  I guarantee it will help when you need help.

Be Thankful for your 2012/2013 Challenges!

November 20, 2012 Comments off

Lift-off of the Dnepr launch vehicle

It’s Thanksgiving week.  In addition to faith, friends, family, and health, I am grateful I started this blog habit.  I have been introduced to a variety of interesting people and I am thankful for my regular readers and creative exchanges that have resulted.

Today, Dr. Michael Joyner posted his case for optimism about the future.  In it he lists the following challenges from 1968/1969 that, at the time we thought were “unsolvable”

  • The Berlin Wall.
  • The Soviet Union invaded Czechoslovakia to suppress a movement calling for minimal levels of free expression.
  • George Wallace, an avowed racist, ran for President and got 13.5% percent of the vote.
  • Career choices available to women were extremely limited, and opportunities for women and girls to participate in things like competitive sports were minimal.
  • Rivers like the Cuyahoga near Cleveland were so polluted they sometimes caught on fire.
  • China and India were economic basket cases.
  • North Vietnam invaded South Vietnam during Tet.
  • Places like Tucson (where I grew up) were surrounded by intercontinental ballistic missile silos.  Air raid sirens were tested at regular intervals in case we needed to be warned of an impending nuclear attack.
  • The Red Sox had still not won the World Series after trading Babe Ruth to the Yankees in 1918 – the so-called Curse of the Bambino.

So, as we look at next year in building our strategic plans or think about the world our children will live in the future, we might want to put our challenges in perspective of human progress.  It might be time to express gratitude and next week, let’s find something big to solve!

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Three Steps to Know you are Pointed Toward a Successful Initiative

November 12, 2012 Comments off
Steps

Steps (Photo credit: susanvg)

In the last post, I spoke about Passionate Certainty, how do you know your passion and direction align.  Further, how do you take steps to develop an initiative personally or professionally?  To select an initiative, it takes thought and planning to ensure you are pointing your team in the right direction.  There are many layers below these steps, but they are, by nature simple.

  1. Assess – review as much information as possible.  In the start-up world its called market validation.  Who’s in the business, why, is this idea/initiative solving a real problem that people are willing to pay money for?  Does this initiative align with your company’s vision/mission (or your own?).  If you moved forward, what would you consider to be a success metric(s)?
  2. Analyze – drill your assessment into measurable metrics.  It could be features/benefits of the product, customer or expert reviews, or other quantitative or qualitative measures. The important part is to go through the exercise.  Write it up and report it to your team or a reliable peer or expert.  See if it makes sense when you say it out loud and you truly have an initiative that creates value in the mind of your audience.
  3. Act – Go out into the market.  See other products/services in action.  Talk to experts, ask questions.  If you have a demonstration item to present, have them look at it.  If not see if you can assess what your initiative can do to improve productivity or profits.  Do it on a small scale, measure it and determine if you can scale it.

One you “act” make sure it is on a very small scale, measure your success and go back to #1 before you decide to scale the idea.  Did it achieve your objectives, profitably (in your personal world, did it satisfy you and align with your beliefs system?).  If so, we are ready to move to Diligent Pursuit.  If not, a failure at this level is a success. Few resources were spent, and either a pivot strategy was developed, or you agreed to abandon the initiative in pursuit of a more attractive opportunity.

In completing a business development strategy, following these steps ensured our message aligned with our customers.  We assessed the market and its perceptions, analyzed our target customers and acted through interviews to ensure we it our target.  It works with concepts like marketing and products that serve customer needs.

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Happiest and Unhappiest Jobs – Top 10 List

August 14, 2012 Comments off

I am a big fan of keeping employees happy.  Keeping people focused, motivated and happy gives organizations the extra horsepower to grow, long term.  I recently wrote a post asking if your employees are part of the 70% that are unhappy according to the Gallup poll.  Now, we have results in a different way, perhaps not as scientific, as well if you study their methodology and know they are a job seeker website.

CareerBliss recently posted its list of the happiest and unhappiest jobs in America, 2012.  The Happy 10 and Unhappy 10 are as follows.  The results surprised me, as many revenue critical jobs made it to the bottom 10 list.  If so, you might consider asking your employees who have the job titles in the bottom 10, “are you happy?”  The motivation might not just involve money, but that will be the subject of another post.

Happiest Jobs – Top 10

  1. Software Quality Assurance Engineer
  2. Executive Chef
  3. Property Manager
  4. Teller
  5. Warehouse Manager
  6. Administrative Assistant
  7. Customer Service Representative
  8. Accountant
  9. Systems Engineer
  10. Construction Manager

Unhappiest Jobs – Top 10

  1. Security Officer
  2. Registered Nurse
  3. Teacher
  4. Sales Engineer
  5. Product Manager
  6. Program Manager
  7. Marketing Manager
  8. Director of Sales
  9. Marketing Director
  10. Maintenance Supervisor
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Is High Technology Necessary Everywhere?

August 11, 2012 Comments off

Are we using good judgement on how we apply our technology?  It might make a difference in execution.  Instead of searching or using the latest high technology tool, perhaps we should simply make another sale, add another line to the spreadsheet, or keep our current CRM until we demand technology to MAKE us more efficient.

This lesson was reinforced to me this week when reading Michael Joyner’s Human Limits blog on Herb Elliott.  Briefly, in his words, here’s the story:

No world record for the 1500m has been set at the Olympics since 1960 when the great Australian Herb Elliot did it with a 3:35:6.  Elliott, who was from Perth, Western Australia, never lost a race as an adult and unlike many of his competitors he focused on what might be called naturalistic training vs. the intensive interval training that was popular at the time….Some would argue that Elliott was so talented the type of training he did probably did not matter as long as he did enough of something.  I would argue that the real message is that we might all benefit from his “no-tech” approach.   This is true not only in our exercise and training programs but for life in general.

So, before chasing the next tablet app, we might want to ask, will is truly make is faster at our own game?

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