From Forbes: The One Thing All Successful Entrepreneurs Have In Common…And What We All Can Learn From It

When people study successful entrepreneurs—those who have started two of more companies—that always do the same thing.  They look at their behavior.

And that’s a problem.

If you only examine what Howard Schultz or Michael Dell do, you would conclude—correctly—that their behavior is idiosyncratic, No two entrepreneurs do things exactly the same way. And so you would conclude that every single entrepreneur is unique, and so there is little to be learned from studying them; you would have to be Howard Schultz to start Starbucks and Michael Dell to start Dell.

Enter our friend Saras D. Sarasvathy, professor of business administration at the University of Virginia’s Darden School of Business. Early in her work, she made a fascinating discovery, one that ran counter to the conventional wisdom. Saras studied serial entrepreneurs, people who have started two or more companies successfully. But instead of looking at their behavior of entrepreneurs—which is indeed unique—Saras focused on how they think. And there she found amazing similarities in how they reasoned, approached obstacles, and took advantage of opportunities.

Yes, of course, there were variations. But the basic approach, as she understood it, was always the same.

In the face of an unknown future, they act. More specifically they:

1. Take a small smart step forward. (What’s a smart step? It is the action you take based on the resources you have at hand, and it never involves more than you can afford to lose.)

2. Pause to see what they learned by doing so; and

3. Build that learning into what they do next.

This process of: Act; Learn; Build, as we came to think about it, repeats until they are happy with the result, or they decide that they don’t want to (or can’t afford to) continue. 

About this same time, the faculty at Babson started going down this path as well and came to many of the same conclusions.

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From Forbes: Got An Idea For App? Here are 6 Essentials Concepts To Master

You’ve got a brilliant idea for a web or mobile app, and you want to get started asap. Here’s the top 6 concepts you need to be aware of before you quit your job or spend a penny on making your idea real. I’m a three-time entrepreneur and over the last two years I’ve been working on Teamly, a SaaS product for helping people manage their priorities at work. I wasn’t new to business, but I’ve learnt a lot over the last few years specifically around product management for web software, an essential but non-obvious skill.

Startup:

A startup is not the same as a new start business. Your idea will hopefully turn into a business at some point, but it could take months or years till you discover that repeatable and scalable business model. So throw away the traditional business books and start reading up on the topics below, they’ve served many successful tech startups well that have transitioned into real businesses.

Minimum Viable Product:

Known simply as an MVP, this is the simplest implementation of your idea that enables you to get feedback on it, and therefore to start learning whether you’re on the right path. Instead of spending tens of thousands building an actual product, use a tool to mock up some screenshots, and then start showing those to potential users. Assuming they’re not just your friends and family, you’ll learn lots from this exercise quickly.

Lean startup:

Coined by entrepreneur Eric Ries, and inspired by lean manufacturing, this is about a state of mind, and is not about being cheap! Lean startups are those who are following a process of build, measure and learn, constantly testing their assumptions. Start by building your MVP, measure and learn from that. Repeat in a loop. Follow the lean startup methodology and you’ll hopefully avoid wasting time building products or features that no one wants.

Customer Development:

You’ve heard of product development, but what about Customer Development. Made famous by serial entrepreneur Steve Blank, this is where you “get out of the building” and proactively seek contact with potential customers, with the purpose not to sell, but to learn. You’re trying to figure out if your assumptions are correct, and if they’re not, what problem does the customer have that you might be able to solve. [It is not the same as market research, which is typically done in reference libraries pouring over analyst’s reports – those things that tell you that the market for blah is $100Bn].

AARRR (Metrics for startups):

Once you’re up and running, you need to be data-driven and make product decision based on hard metrics. Beware vanity metrics, which tell you what you want to hear, instead focus on AARRR, a term coined by Silicon Valley seed-stage VC, Dave McClure. It stands for acquisition, activation, retention, revenue and referral. Depending on the stage, and type of business you’re in, you’ll deal with these in a different order of importance. Probably the key thing for all startups to focus on is retention. Strong retention indicates you’re at product/market fit, which is the holy grail for startups, and the last thing on the list.

Product / Market fit:

Entrepreneur turned venture capitalist Marc Andreessen believes product/market fit is “the only thing that matters in a startup”. Product/market fit means being in a good market with a product that can satisfy that market. It’s a magical moment! But it’s not the norm for a startup, the search for product/market fit can take years, if you ever get there: “You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.” Lean startup, customer development and AARRR metrics are the key tools to get to the holy grail, P/M fit!

From Forbes: Startup Success: Throw Away Your Business Books

For my first post as a Forbes contributor I wanted to start by highlighting something I’ve learned first-hand while building my new venture: that a startup is not the same as a starting a new business.  Teamlyis my third entrepreneurial outing and it’s been the most challenging, the most risky and the most uncertain of the three. Why? Because it’s pure startup. My first two ventures, although technology based, were far more businesses than they were startup.

So what is a “startup“? Wikipedia says it’s a company in search of a repeatable and scalable business model, and adds that the phrase is most often associated with high growth, technology oriented companies. Eric Ries, author of the book, “Lean Startup” defines a startup as a human institution designed to deliver a new product or service under conditions of extreme uncertainty.

To underline the point – and to really understand what a startup is – it helps to understand what it lacks compared to a traditional business. It lacks a repeatable and scalable business model and lacks certainty. It lacks these things because it’s delivering some new product or service, and no matter how much you think you can research in advance, you can never know how the market will react when you launch. In comparison, if you launch a “new start” business which tens of thousands of people have already done before, it can’t fall under the definitions above of what makes a startup. In this case the business has been proven many times before, and you can take advantage of that information, research and learning which has been perfected, potentially over hundreds of years. That doesn’t mean you can’t improve on what’s gone before – Virgin have said all it takes is being 10% better than their competition to win – but if you’re not fundamentally doing something new or different it’s not a startup.

As your level of understanding increases about the market, you gain insights from customers, and start validating your hypothesis and even earning some revenue from paying customers, the amount of “startup” reduces and the proportion of “business” increases; at the same time the risk decreases. It’s not a black and white thing either, you might start with 10% unknown and 90% known, or 90% unknown and 10% known.

The problem with building a startup outside of Silicon Valley is that the further away from startup culture, the less this is understood, by founders, investors, or any other stakeholder. Probably 99% of books written about business are addressing the issues of scaling, managing, and building an established business. As well as that, education and business support services are generally skewed towards that understanding of traditional businesses. The problem is that applying the tools of traditional business too early will kill the chance of your startup ever becoming a business. That’s not to say you can’t use skills or education learnt in a traditional business in your startup, but none of that will help you get to “product-market fit”: being in a good market with a product that can satisfy that market.

Finally, to illustrate the point, a student recently told me how he had a great idea and a great plan for a startup. It’s possible and entirely sensible to plan a traditional business before you launch it, but with a startup you can’t. You don’t know what you don’t know, and you don’t know what the market wants until you build something and show it to them. Consequently, it might take you a few months or a few years before you get to a scalable and repeatable business model. So if you’re thinking about starting a new venture, don’t do a startup if you don’t like uncertainty, and lots of it!

From Forbes: How Listening Builds a Global Business

Building relationships is key to building a thriving business. The right relationships can help you:

• enter new markets
• expand product offerings
• source suppliers and employees
• spot challenges
• grow the business

For one woman entrepreneur, listening has been fundamental to building the relationships that helped grow her business.

Cristina Mariani-May, Co-CEO of Banfi Vintners, a family winery, credits her success to her ability to build relationships by listening. As Mariani-May says, listening is a powerful advantage for her nearly 500 employee, international, family-run wine company.

What is a “good listener?” It’s an attentive one, someone who pays attention not to just what is said but how it said and takes into account nonverbal communication as well. Body language provides cues to what is really being said.

Mariani-May has applied her listening skills so well that Banfi now distributes wine in 90 countries. If you want to unlock the opportunities of the global economy, talk to its people, she says. Of course, she prefers to do this over a meal accompanied by a glass of wine.

Such conversations are not just about learning local regulations for importing alcohol. You need to understand what motivates people culturally and individually. Developing trusted relationships has other benefits, including referrals and a shorter path to reliable vendors and employees.

Mariani-May uses the same listening approach when seeking brands to import into the U.S. Again, it’s about listening and understanding what motivates people, understanding how they do business, and determining if you are a fit for each other.

Mariani-May is the self-proclaimed mother hen of the family. Several years ago, she heard squabbling between family members who worked in the business and those who didn’t. She was concerned, Only about 30 percent of family businesses survive into the second generation, and just 12 percent make it to a third, according to the Family Business Institute.

Mariani-May brought everyone together with the help of outside experts — Family Business Consulting Group. The family learned that it was going through a normal transition for a third-generation family business. They also learned that there are tried and true practices for working things through.

In addition to networking through her college alumni networks (Columbia and Georgetown universities), Mariani-May has other ways she listens. She recently added a board of advisors. They’re not necessarily from the industry, but they all share a passion for wine. They provide objective advice and insights into the marketplace.They have expertise in finance, marketing, and other strategic areas important to the Banfi business.

If listening is your strength, use it to your advantage. If it’s not, perhaps it time to cultivate the skill. It is learnable.

 

From Forbes: 4 Steps to Building the Team You Need

The toughest part about starting a business is never with the product and always finding the people. The only way to truly be successful is to use other team members’ skills and leverage them to build a profitable company.

This is no easy task. Common complaints from business owners include:

“I just can’t find ‘good’ people.”

“I always have a high turn over of staff.”

“Employees don’t work as hard as I do.”

“Can I run a business where I do not need employees?”

The “Golden Rule” for hiring the right person is to realize that people work hard when their personal goals match those of the companies. Once they deviate, people move on to other opportunities. Here are four steps to building the team that you need:

1. Slow to hire. Identify employees that have skills that are complementary to yours. Rather than using a recruiting website, try to get referrals from other employees or people you know. Give hiring incentives to make this happen. Include a line in your email signature stating the employees you are looking for. When hiring, don’t let your ego get in the way. Hire only the best available at the price that you can afford. Talk about compensation early in the process. Ask them to give specific examples of the work experience that is needed in this job, then shut up and listen. If you have to choose, hire for attitude over skill.
2. Do training. This step is many times skipped and the results can be catastrophic. When training, teach the systems and processes within the company. Most employees want to know the bigger picture. Ask for frequent feedback from the new employee and their co-workers. Skills competency tests, if appropriate, can measure progress.
3. Actively manage.  Remember that people respect what you inspect. Ensure there are clear management reporting lines with no back channels. This is especially important in smaller companies. Implement formal or informal quarterly performance reviews. Valuable feedback can be given just by “walking around”. As Ken Blanchard states, “Catch someone doing something right!” http://www.ideasandtraining.com/Ken-Blanchard-Quotations.html A mix of qualitative and quantitative incentives always work best.
4. Quick to fire. If trained properly after 30 to 90 days, it is easy to identify the valuable employees. In fact, everyone in the company knows who they are. Fire the employees that are not contributing quickly since they are sucking productivity and profits out of your company.

How have you effectively hired and retained your best team?

From Forbes: Nokia: Four Steps to Brand Revival

Nokia is in a pickle. Its share value is down 80%, it left the Top 100 Most Valuable brands; the hearts and wallets of millions of customers are evidently open to Apple, Samsung and Google. According to Tom Long of BMO Capital Markets, its brand is worthless: “We see little hope for a turnaround from here even with a refined strategy.”

When more than 60% of the phones on the planet are Nokia-branded and you account for more than 30% of smartphones currently sold and you’re still flailing, you need a bigger cause than, “our entire focus is on creating and selling really cool phones.” That doesn’t cut it.

Most of us know “what” Nokia is, but we’ve forgotten “who” Nokia is. In a smartphone industry dominated by lifestyle brands like Apple, Nokia lost its connection with its brand purpose, “Connecting People,” and ultimately the customer, by failing to recognize (in our transmedia world) that brand is not marketing – it’s more about defining “who” you are. That requires (re)building the four cornerstones of successful brands.

First, Nokia needs to power up the brand strategy, “Connecting People,” that’s perfect for the lower-end smartphones market. It can also act as a lens helping Nokia see choices through the smoke, be able to review business options, including partnerships, and act as a decision-making tool, for example, in innovation, a key area where Nokia struggled to produce the right goods at the right time. This has been compounded by Nokia’s marketing myopia and inability to handle multiple tactics from a single brand strategy, for example, retail.

Second, Nokia needs the leadership to demonstrate (not assert) that it can turn the hard into the possible. Given the chronic debilitation of brand value, Nokia’s leadership is perceived as groveling in a frivolous pit laden with debt. “Elop is cutting costs and hoping for a miracle, but it looks like Nokia is staying on death row,” said John Strand, founder of Danish industry consultancy Strand Consult. Therefore, Stephen Elop needs to allay people’s fears, especially partners and employees, while pursuing opportunities to fund growth by cutting costs to focus on lower-end smartphones and a Windows ecosystem.

This new focus requires senior management at Nokia to rally not just with cost reduction, but to align themselves and all partners and agencies around the strategy – leaving their egos and business cards at the door. This third cornerstone is exceptionally difficult when you have a brand deracinated by a business in free fall, eagerly watched by media in a frenzy that smells blood and a customer base that doesn’t “emotionally” hold your brand in high esteem when considering what phone to buy. Nokia urgently needs a cheap killer product – the upmarket Lumia phones won some good reviews, but not many customers.

Nokia knows word of mouth is the No. 1 influencer of purchase. To get customers engaged Nokia needs to inspire an authentic community who like Nokia and rapidly mobilize a colossal resurgence of its customer base. Elop could make it happen, but he’s the CEO, not the consumer, and it is a very large ship to turn; ratings agency Fitch said on Friday that Nokia had little time left to turn itself around. Some say cash flow is the problem right now and the writing is on the wall, but Nokia has saved themselves seven times in 147 years, and it has Microsoft in its wallet.

Nokia can be fashionable again. A reputation for solid manufacturing infrastructure and excellent risk management and supply-chain principles worked in the past to increase customer satisfaction and revenues, but they need the power of brand to save them now. “Connecting People” is one of the best brand ideas you can get, and Elop needs to empower the brand with that halo to support the new business plan (with Microsoft). For it to succeed Nokia needs a new, more revolutionary idea to whip up support from the media, inspire their customer base and spur growth. Many people retain a soft spot for Nokia and “shareability” is the new ROI – “Connecting People” would be the optimum place to start.

From Forbes: Becoming an Emerging Leader in the New Frontier: 12 Key Differentiating Factors

People are often confused between the roles of a manager and those of a leader.

In my book Healing the Corporate World, I offer the simple concept that a leader is truly here to be of service to their business community and those running it.  Additionally the role of a good leader is to put the greater good of all above their own personal needs. They must engender trust, encourage collaboration and be the catalyst for great, big, new ideas.  Even the smallest tweak to a business can snowball into a massive idea that changes the business. The leader’s main function is to communicate their vision, and inspire and motivate others towards that vision.

But what is the difference between a leader and a manager?

A manager is logistically focused. Managers are part of the organization, which acts as the control or administrative arm focused on a specific function. For example, the Marketing Manager controls and administrates the needs of the marketing arm of the business. Their greatest strengths are to plan, organize and coordinate projects.

In his 1989 book On Becoming a Leader, Warren Bennis composed a concise list of the differences:

1. The manager administers; the leader innovates.
2. The manager is a copy; the leader is an original.
3. The manager maintains; the leader develops.
4. The manager focuses on systems and structure; the leader focuses on people.
5. The manager relies on control; the leader inspires trust.
6. The manager has a short-range view; the leader has a long-range perspective.
7. The manager asks how and when; the leader asks what and why.
8. The manager has his or her eye always on the bottom line; the leader’s eye is on the horizon.
9. The manager imitates; the leader originates.
10. The manager accepts the status quo; the leader challenges it.
11. The manager is the classic good soldier; the leader is his or her own person.
12. The manager does things right; the leader does the right thing.

Every organization needs both leaders and managers

Often times there is a challenge raised that not every organization should compress both into the same role. However, during these challenging times in the new frontier of business today, individuals are often executing both roles simultaneously. It may not necessarily be a negative to do so.

There are 4 categories to consider:

• Pure Managers – Managers who execute the process and plans
• Dual Players – Leaders who often also take on manager roles or vice versa
• Emerging Leader – Leaders who are also managing a process but are in training to move into the stand-alone leader role
• Pure Leaders – Leaders who create vision and a movement to get there

If you are a person who wants to move into the leadership role in your business then it’s time to move from your “pure manager” role into a “dual player”.  From there, the more leadership skills and input you bring to the table will position you as someone “emerging” for the “pure leader” role down the line.

To prepare someone to advance, there is a methodology that I’ve witnessed, tried and executed many times —give the person you want to advance the opportunity to wear the shoes of the role they wish to be in before they have it. Slowly but surely give them opportunity to acquire the skills and insight needed over time to execute the new role effectively. When the opening appears to advance that person, they will be ready to stand comfortably in those new shoes and jump into their new role much easier. This makes the transition for the individual and the surrounding team much easier.

 

From Forbes:Ingredients for a Successful Startup

We all love stories about entrepreneurs’  ”aha!” moments, but most startups don’t unfold in such cinematic ways. More typically, I’ve noticed, an idea will start simmering slowly in the back of someone’s mind until circumstances, like a job loss, makes the would-be visionary get to work on it.

Serial entrepreneur Fred Burke grew the profitable Guardian Pharmacy, founded in 2004, from $15 million in sales to more than $250 million in revenue, so I was curious about what he thinks is the more crucial ingredient in getting a startup off the ground: Strategy or execution?

I was hoping he’d come down in favor of one or the other, if only to validate my hunch that the “executors” have an edge in today’s productivity-driven economy. But he didn’t think this was an “either/or” question. As a former McKinsey & Co. consultant, he told me that he learned early on that “an A-plus strategy, poorly executed, will result in a C performance. And a B-minus strategy, outstandingly executed, will yield an A performance.”

Technology may have made it marginally easier to bring a business “to scale” than a decade or two ago, but, he says, “it still takes people, talent, vision, an organization to make it happen.”

“An entrepreneurial venture is highly dependent on a successful strategy,” he added. And that strategy has to be executed by people, he says. In his view, motivating and focusing them requires team building. And that starts with vision.

So, like a lot of other things in life that are worth doing, starting a successful business isn’t so simple. It’s a momentum game, and you’ve got to get a lot of moving parts heading in the right direction. Figuring out how to do that is the secret to getting to where entrepreneurs like Fred Burke are.

 

From Forbes: 5 Lessons from an Unconventional Entrepreneur Who Raised Millions

Crowdfunding may be changing the rules of the financing game–witness the nearly $8 million plus that the Pebble smart watch raised on the site Kickstarter — but many entrepreneurs still want to raise venture capital.

And though seed money is flowing, as you’ll see in Forbes’ Midas List, it isn’t as easy as some news reports would make you think to raise equity capital. There’s a small universe of businesses that actually raise this form of financing. According to CB Insights, venture capitalists only invested in 785 companies in the first quarter. While that’s the second highest number in nine quarters, it obviously represents just a handful of all of the startups that are out there.

So how do you get your hands on some much-needed investment capital? You may get some ideas from Amanda Steinberg, founder and CEO of DailyWorth, an online community to help women build their net worth that now generates “multimillion” dollar revenue through advertising deals with companies such as ING Direct and OppenheimerFunds.

Launched in January 2009, the 14-employee site–which sends out free emails on finance in a model similar to DailyCandy’s–has raised $3 million in equity capital from investors such as Dave McClure‘s 500 Startups and Google executive chair Eric Schmidt‘s Tomorrow Ventures. While $3 million is not a record-breaking figure, plenty of entrepreneurs would be happy with that amount of cash to grow their business.

Here are five strategies you can steal from Steinberg—a Philadelphia-based serial entrepreneur who previously ran web engineering companies—to grow your own business.

1. Stay way ahead of the trends. Noticing that more women were earning six figure salaries and becoming breadwinners—yet few financial publications were paying attention to their unique challenges—Steinberg didn’t wait around for someone else to help them. The now 34-year-old entrepreneur formed her own digital publishing venture to do so herself. “The number of women who are $100,000-plus earners is growing at a rate of about 7% a year,” she notes.
2. Find a unique focus. Realizing that many publications focus on teaching female readers how to save money, Steinberg aimed to fill another niche: “Our mission is to support women in becoming investors and building net worth,” she says. “We’re really gearing to differentiate ourselves from all the other financial media out there that focus on frugality.
3. Look within to find ways to connect with your customers. Steinberg is fascinated by the social stigma against very ambitious females, being one herself. “There were times I felt like a freak because I had such big goals as a woman,” she says. Rather than let herself get derailed by that, she realized that there were other women who felt the same way—and tapped her personal insights to make Daily Worth more authentic.
4. Play the game your own way. While Steinberg is ambitious about growing her business, she also wants to have time to enjoy being with her children, ages 3 and 5. Result: She organized the business so she has a flexible schedule. “There are many days when I have to stop work at 4 pm,” she says. “It doesn’t mean I don’t start again at 9 pm.”
   Though she travels once a month, she’s arranged for her vice president of sales to handle more of the trips to meet with clients than she does. Steinberg makes it worthwhile for her colleague to handle this responsibility by providing a nice chunk of equity in the business. “I can’t be looking at my kids 10 years from now and saying, `So sorry I never saw you in your childhood,’” she says.
   Of course, with outside investors betting on her, she makes sure to deliver results. “They don’t pressure me a lot,” she says. “We’re making our numbers, so they don’t have reason.”
5. Wing it when you have to. There are times every CEO gets caught unprepared. How well you think on your feet in these situations will play a large role in the success of your business. Realizing she’d gotten mixed up about the time of akeynote speech she had to deliver, Steinberg lacked childcare and had to improvise. “I had my daughter on my hip as I talked to 200 male bankers,” she recalls. “I was feeding her Froot Loops.” No one said a word about the tot she brought to the podium– “Who knows what they were really thinking?” she asks–and apparently, whatever impression she made did not slow her down. As she’s discovered, a little resourcefulness can go a long way.

 

From Forbes: 10 Rules From the Trenches to Help Build Your Business

So now you’re cash flow positive for your first year and the sky is the limit for your business, congratulations!  Here are some tips, most learned the hard way, to help you navigate the shark-infested waters of turning a profitable micro business into a sustainable long term business.

I wanted to hit last week’sStartup Month topic, “Turning an Idea into a Business” and this week’s “Building the Team, Building the Business” in this posting of 10 rules for entrepreneurs.  These are rules that I’ve heard, learned, or adapted over the years as I’ve started various  companies, and they are definitely aimed at the owner/founder of a small to mid-sized company.  If you’ve grown your company into a Fortune 1000 behemoth, very well done, but you might find these less applicable to your daily challenges.

10 rules for entrepreneurs

1. Do what you love, Life is Short.  This is so obvious as to be trite, correct?  Not so much.  How many people do you know who really dislike their job and dream of being a zoologist, entrepreneur, bakery owner, etc. but “can’t” do it because of cash flow, lack of spousal support, kids, etc?  You have chosen to be an entrepreneur, do something that you enjoy doing.  If you own a restaurant but can’t stand the employee turnover and dream of running an IT company, do it!  I met a guy while scuba diving in Mexico who told me that he despised his job and lived for the 3 weeks of vacation he had per year to go scuba diving.  He said he made too much money to switch jobs or careers.  48 weeks a year of misery is not worth any amount of money, particularly when you’re planning to do it the rest of your life.
2. Know what makes people “tick” and allow them to do it within your company. What people are good at is not necessarily what they aspire to do or want to do.  Take the time to know your employees and train your managers to understand what your employees want, and, assuming it’s compatible and practicable within your business goals, help them do it.  They’ll be happier, more motivated and loyal to a fault.  If you take the attitude that your employees “are lucky to have jobs”….watch out.  You’ll attract people that truly are lucky to have jobs, rather than valuable team members.
3. Never make a bad hire and never fire anyone too late. The “never” in this rule is definitely a reach goal.  I have made this mistake a number of times, and it’s cost me time and money every time, distracting myself and the management team from the real work of building and growing the business.  Keeping sub par performers on the team brings down the morale of your best people as well.  I have had several senior people I have kept on because of misplaced loyalty on my part or because a client loved them, and they were such negative influences on the team that other good people quit because of them.
4. Associate with other entrepreneurs. In my last blog I talked about an associate who tried to deter me from starting my own company.  Don’t associate with folks who will continually tell you that you can’t be successful as an entrepreneur because they can never understand what it is to be one.  Join and frequent associations where you can meet other entrepreneurs.  You’ll be amazed at the similar personality traits, across industries, that entrepreneurs have and will likely make many new friends and find mentors.  There are national groups like Vistage, and most metropolitan areas have smaller groups as well.  In San Diegothere is a group called the San DiegoBoardroom, formed by entrepreneurs to have a group of like-minded people with whom to meet and discuss the issues they don’t want to bring up with their Board of Directors or business partners. 
5. Find and cultivate good mentors. Mentors are key to success as an entrepreneur.  You became an entrepreneur because you wanted to make it on your own, but that doesn’t mean you don’t need advice.  If it’s your first business, you’re learning something new every day.  Having someone who has been there before and can tell you the mistakes they made is critical.  It can be as informal as a friend you meet for lunch once a month, or an advisory board you compensate with cash or equity – you decide how much advice you need and when.  Entrepreneurs want to help other entrepreneurs, more often than not. American Express OPEN and the San Diego Contracting Opportunities Center held a fantastic session for entrepreneurs to allow them to meet others like them as well as potential mentors.
6. Know your weaknesses and hire great people to compensate for them. An old adage is that “A players hire A players, B players hire C players, C players hire D players….” you get the picture.  Hire people smarter than you, particularly in the areas in which you are weak.  If you are a technical guru on your company’s software product but turn into a stuttering mess in a sales call, hire a good sales person.  If you can sell snow to Eskimos but can’t balance your checkbook, hire (internally or externally) a great and trustworthy bookkeeper.  Be honest about your weaknesses, don’t put up a front of being Salesperson Supreme when your close ratio is 3%.  At the end of the day if your business thrives you’ll have all the ego bolstering that you need.
7. Be prepared to go deep into issues when required.  Ask questions to a “vacuum”. There will be many issues along the way that you will not be the expert on, including litigation, trademarking, technical issues, accounting issues, export compliance, etc.  You’re a smart person or you wouldn’t have started your business, so ask smart questions until you can’t think of more questions if an issue is going to be important for your company.  Be humble. Pretending to be knowledgeable about an issue when you are not will open you up to making a wrong decision or allow others to take advantage of your ignorance.
8. Know your cash flow.  Sign your own checks.  This one came from Oprah, I believe.  You should know how much money comes into your business and goes out, every month if not every week.  This is the lifeblood of your business and if you lose track of it you risk losing the entire business.  Sign every check so you can see where the money is
9. Make someone a partner in the business when you cannot achieve your business goals without them, otherwise make them an employee. Particularly early on in your business you will have the opportunity to work with friends and acquaintances.  Early in the business many folks will want to come in as “equal partners”, even though they don’t bring anything to the table to qualify them as such. (I’m defining “partner” in this rule as somebody that would own 10% or more of a business).  Friendship alone doesn’t qualify someone as a business partner, unless you feel it’s your role to provide a lifestyle for everyone that you know.  If you cannot achieve your business goals without that person, consider providing them significant equity if they require it.  If they are very good but you can achieve your goals without them, they should be a well compensated employee, with or without some lesser amount of equity depending upon how you structure your compensation packages.
10. Every day there’s a choice between the ethical high road and low road.  Stay on the high road, it goes to a better place. Again, this one sounds trite, but it’s not. Or maybe it is but it’s true either way. Every day you’ll have the opportunity to make more money by doing the wrong thing (consistently underpaying employees because they don’t complain about it, hiding cash revenues, not providing work you promised to business partners, etc.).  Do the right thing, every time.  If you do the wrong thing, admit and correct it. There’s no point in getting to the end goal if you had to screw over a lot of people to do it.  Take that high road and you’ll get there anyway, You’ll be able to hold your head high and be known for being a “stand up” guy or gal.