Thought for the Day
Value is not what you get,
Value is what you give
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IN THIS ISSUE
15th Century Wisdom for today’s startups
Sometimes, a verb decides to become a noun. Voila, that alters the game permanently
Consider the word ‘Startup’. Originally a run-of-the-mill verb that meant ‘the act of setting in operation or motion’, ‘Startup’ attained celebrity status the day it came to mean ‘a fledgling business enterprise’. “The Oxford English Dictionary traces the origins of the term, used in its modern sense, back to a 1976 Forbes article” says one research study. Does this mean no startups existed till then?
An exciting new article carried in the Nov 2017 edition of Harvard Business School’s Working Knowledge offers to teach leaders about the proper ways to conduct business. Nuggets include:
- Stay out of politics
- Time lost is money down the drain
- Cultivate honour, prudence, integrity, diligence, civility, composure, and temperance
Sounds banal? Not when you discover they are from a book written in 1458 by an Italian trade merchant, Benedetto Cotrugli. The Book of the Art of Trade distills wisdom startups today would find invaluable.
Hailing from a family trading in cloth and wool, Cotrugli was a reluctant entrant into the world of business. He had to drop his studies at University of Bologna “to join a profession that he considered lacking in intellectual and moral discipline” To remedy matters Cotrugli authored a four-part handbook that covered in its magnificent sweep - origins and principles of trade, role of religion, civic duties, and some important domestic matters, including desirable qualities in a wife and ways to furnish a home to perfection
The underlying philosophy was that “You needed to be wealthy to give to others. Instead of conquering, you could achieve greatness through excellence in trade.” Having laid down those foundations for a grand overarching value system for a business, the book was replete with tips that can give a current day best-seller on startups, a run for money
Shrewdness is good, said Cortugli, deceit isn’t. “He should neither hurt others nor allow himself to be got the better of, but manage to intuit where deceit and falsity lurk” he counsels. Also emphasized is the ability to sell for cash, selling on credit and receiving payment and keeping books in a mercantile manner. The need for new businesses to master sales, maintain books and documents and manage receivables efficiently hasn’t changed in over four centuries
Sales is important. As is diversification and avoiding concentration risk. “Be careful not to take on too many or too large transactions: do not try to net every bird that passes, because many have failed for taking on too much, but no one for exposing himself too little” Cortugli advises. And he was astonishingly prescient on treating sticky receivables. After one year, cut the amount due in half and write them off entirely after two years, he suggested. For him time lost by a merchant was far more expensive than loss of money
Cortugli has a word of caution for family businesses pushing reluctant scions into leadership. He warns “… because if that son has a leaning elsewhere...he might not well prosper in that life, or would only get on with difficulty or remain stuck halfway with small profit to himself and without reaching his objective…” Mentoring was another strong need. Aspiring leaders should be “placed with a good and knowledgeable merchant so as to learn their trade, because although many want to become masters without a master, this is not possible”
Retire early, Cortugli urges, proposing 50 as the outer limit. “He wanted money: he has got it; good name: he has it; possessions: he has them …what more does he want?” he asks. That should warm the hearts of millennials leading today’s startups
You can read HBS Working Knowledge research article here
Sales lessons from a startup mindset
A startup is joined at the hip with sales success. Sales champions bring into play precisely those attributes that help a startup succeed. # Starting afresh each day and with each deal # Bootstrapping – frugality # Managing stakeholders # Thinking creatively are some of them
Here is Tom Peter’s 1992 classic list of 10 Vital Attributes Separating Startup Winners From Losers and the sales lessons we can draw from them
1.Signature: “Question No. 1 for the prospective business owner: In 25 words or less, how is my concept notably different from that of others? If you can`t succinctly explain how you`re special to the man or woman on the street, you`re headed for trouble” says Tom Peters
Sales Lesson: Do you have a compelling pitch to convince your prospect before she can step off the elevator? What’s the purpose of your offering in one word?
2.Soul: If you can inspire “Wow”, “Neat”, “Holy smokes” from your Customers, then you are there. Or in Tom Peters’ high-octane language, do you grab, startle, surprise with an amazing guarantee, stupendous service or an extraordinary product?
Sales Lesson: Does your value proposition have a soul? Can it inspire a conversion?
3.Passion: Exhilarating. Exhausting never the less. That describes the life of an entrepreneur. What keeps you going is often just your passion
Sales Lesson: Is selling your Ikigai (or purpose of your existence)? If you are passionate about sales, it shows in your numbers. Sales too is a demanding profession that has no space for those who are low on enthusiasm
4.Details: “While the overall scheme must be an attention-getter” Tom Peters reminds us “only superb execution will win the day” Sales Lesson: If a potential pipeline shouldn’t end up as a pipedream, attention to detail and execution are key
5.Culture: A Customer obsessed cultured powered by professionalism is a big differentiator. This has to be pervasive and organisation wide regardless of how big or small the company is
Sales Lesson: As found in Mercuri’s recent Sales Excellence Survey, organisations that excel at sales, have a distinctive sales culture where “everyone is in sales”
6.Community: Participating in community affairs, with time more than dollars, is good business from Day one
Sales Lesson:The question to ask is: Does your sales strategy have a higher purpose beyond quotas? Do you make relationships out of business or is it the other way around?
7.Meticulous books: Good accounting brings credibility to numbers and earns the respect of stakeholders. It also promotes cost consciousness and revenue sensitivity across all activities
Sales Lesson: Cheerful submission to the grunt work of filling in call reports, CRM data sheets and activity logs is often fundamental to sales excellence
8.A pal: “Whether a business partner or spouse, you desperately need someone to offer counsel-someone you trust and who supports you but is not a flatterer” suggests Tom Peters
Sales Lesson: If you are a sales leader, are you a coach to your team? Do you manage by fear or by support? Companies topping sales charts are seen to invest generous amounts of time in sales force training, coaching and reviews
9.Perseverance: Swimming isn’t learnt from a book. Nor is entrepreneurial success. It is all about trying, failing, learning and persevering till you eventually succeed. Learning, Tom Peters says, is mostly done the hard way
Sales Lesson: Sales is not for the faint hearted. Winners in sales keep keeping on
10.Good luck: “Believe me, it helps!” declares Tom Peters. Was he smiling when he wrote that?
Sales Lesson: Veteran salespersons will tell you that luck writes a blank cheque for those work hard on their sales efforts
You can read Tom Peters’ recipe for startup success here
Innovation is the seed from which startups germinate. R. Gopalakrishnan, author, advisor, speaker, former ED of Tata Sons and currently distinguished Professor of IIT Kharagpur and as Executive-in-residence at SP Jain Institute of Management & Research, explores how concepts turn into ideas, which then become prototypes, models and products. Defining thought as the ancestor of innovation, as without thought, there could be no innovation, his new book A Biography of Innovations: From Birth to Maturity explores the impending questions—what happens next? How can you take on challenges and keep your ideas relevant? A Biography of Innovations is the definitive book on the life cycle of new ideas and transformations. True to its title, the book looks at the life of ideas and innovations through eight life stages:
- Conception of a concept and its growth into an idea – Pre-natal
- Articulation of the idea through words and pictures – Birth/delivery
- Development into demonstration prototype – Infancy
- Refinement of prototype into a working model – Childhood
- Product and business model presentation – Adolescence
- Competing in the market – Adult
- Achievement of potential – Maturity
- Renewal to stay relevant to competition – Ageing
Armed with this framework, it is possible to see the startup itself as an innovation as it transforms from a toddler to a giant, retaining and nurturing the primal entrepreneurial mindset which created it. There are stories drawn from a smorgasbord of disciplines and avocations illustrating the challenges to survival and nutrients for growth in each stage
“Humans should learn to innovate naturally, just like fish swim and flowers bloom naturally. For the large part, such things have to be internalized and self-taught – good life, health, happiness, positivity, creativity, human relationships, not to forget parenthood and marital relations. Just like how there is still so much to learn about the disciplined practice of breathing even though it comes naturally to humans, in the same way, there is so much to learn about the disciplined practice of innovation even though innovation is natural to human beings”
Isn’t that true of sales as well?
I have a Startup Mindset, Dad
Sure thing, my son
I know you have it in you, Hold on a bit though
Have you asked these questions to yourself?
Can I rise and fall and rise and fall and rise..
Can I Thrive like the velvety moss springing out from cracks in the earth
Can I Take tough decisions with little information
Can I Inspire support for my ideas
Can I be the humble ant, lugging huge loads, resolutely
And the Honey bee-spirited and industrious
Can I shed tears and wipe them with equanimity
Can I build a team like the wild geese in a V formation
Can I intuit like the ancient druids
Can I Challenge the status quo
Can I bring joy at work, like lambs that gambol in spring
Dad, give it to me in a nutshell ,please
Son…. It all begins with Active Optimism
Will you always act in a way that increases the likelihood that things will indeed turn out well?
Got it Dad, Yes I Can….. on a wing and a prayer!
- Making steel may be compared to making a chappati. To make a good chappati, even a golden pin will not work unless the dough is good - J R D Tata
- What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed - Dave Thomas, founder of Wendy's
- I skate to where the puck is going to be, not where it has been – Wayne Gretzy, Hockey Star
- You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible ― Paul Graham
- Sales are contingent upon the attitude of the salesman. Not the attitude of the prospect – W. Clement Stone
- Without a customer, you don’t have a business -- all you have is a hobby - Don Peppers
- To be most effective in sales today, it's imperative to drop your 'sales' mentality and start working with your prospects as if they've already hired you - Jill Konrath
- Don't let the fear of losing be greater than the excitement of winning - Robert Kiyosaki
- The brave do not live forever, but the cautious do not live at all – Richard Branson
- One finds limits by pushing them – Herbert Simon
The Best Startup Funding is Initial Sales
(From Tim Berry’s blog post)
We all forget too easily: the best startup funding is sales. Sure, angel investment, friends and family, SBA loans, all of those options are necessary for most startups. But sales is better.
If you can, find the early customers. Give them a deal, make them important, work with them to optimize their needs; but make a sale.
Even if you need to go out and find investment — and I speak now as an actual angel investor — there’s almost nothing as convincing as actual sales. People are spending money. It makes a new business proposal far more credible.
True, not all businesses can do that. But a lot of them can. And, as we write about business plans and seeking investment and all, we forget the real sweet spot: finance growth by making the sales
(Tim Berry is chairman and founder of Palo Alto Software and Bplans.com, who describes himself as the “Founder or co-founder of several others, ranging from successful to failure and in-between, who can be found on Wikipedia too) Click here to read Tim Berry’s blog and other resources
Mercuri Mail is a thoughtful compilation of meaningful articles drawn from Mercuri India archives, and from timeless management literature. Edited by Jaishankar Balasubramaniam & Sridhar Srinivasan of Mercuri Goldmann (India) Pvt. Ltd. This publication is for private circulation only.
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