Startup metrics for customer traction

Start-ups are unique because of their ability to scale fast, and typically go through three stages – traction, transition and growth. Each of these stages requires different priorities that are reflected in different objectives, strategies, team etc.

In the early stages of your startup, you’ll have to manage so many tasks that you’ll often be overwhelmed with what needs to get done. But instead of being paralysed by what appears like an endless amount of work, know that you really only have one goal: traction.

The North Star has been used for navigation since man began sailing, and applying it as a metaphor to startups is useful to get clarity in the maelstrom of things to do. For me, your North Star is determined by answering the question:

How many people are getting authentic value from our product?

It’s a simple goal and easy to measure. I use ‘authentic value’ to avoid the ‘vanity metrics’ I’ll refer to later. The moment when a user gets authentic value means you are getting traction, and we can anticipate revenue, and when you have paying customers, you have a chance to turn your startup from an experiment into a business.

Simply, traction refers to the initial progress of a startup, seeking product-market fit, gaining market share and mind-share from its target audience.

You don’t necessarily need to be profitable to show traction, maintaining consistent growth in other metrics besides profit such as daily active users, monthly active users, monthly signups, or a decrease in churn rate are all indicators that your startup is gaining traction. Just as traction is important to you, it is important to potential investors too.

One of the first steps in generating traction is finding what the real drivers of your business growth are, which may take some time to discover, and developing processes to maximise each driver. When you have clearly defined processes, potential investors will also have a better picture of how your startup will progress in relation to the general landscape of the marketplace.

If you achieve success in the traction stage, you’ll have forward movement in the important metrics that drive your business. While being nimble allowed you to experiment during the early days of your startup – finding what moves the needle of your initial growth, testing different offerings, and nailing down your product-market fit – your aim is to maximise what makes you unique and what makes you valuable to customers.

Getting traction is hard. You’ll be working more ‘in’ your business than ‘on’ your business, and there is a dilemma: fundamentally, your focus has to be on customers, but the inclination is on product development.

What failed startups don’t have are enough customers, and it’s customers that investors are most focused on. When you’re talking to investors about your startup, it’s pretty much all about your traction, growth and velocity, and small numbers can have a big impact on their thinking. Is ‘20%’ enough for the big questions?

It’s important you’re on top of your numbers, and you can speak their language, so immerse yourself in your financial model and get as comfortable about churn, attraction, burn, runway, CAC and LTV, as you are your customer pitch. There are a lot of metrics and KPIs that startup founders are expected to have at the tips of their fingers, the vital signs that you live with day to day. These numbers show you have clear view of your key growth drivers.

In reality, the numbers should just confirm your instinct on performance and progress, but often they produce a reality check of where you are on the runway, offering a balance to the emotional ‘feel’ of what represents real progress on growth aspirations.

In my experience, startup founders can fall into the habit of innocently deceiving themselves with their own view on data, by only focusing on the KPIs and data that sounds positive and offers a positive outlook. We all have cognitive bias, tending to hone in on the metrics we know are improving over time, and ones that sound impressive without much context.

For example, I’ve seen startups ignore the hard stats of monthly active user numbers, but talk about the number of web site visits or downloads of white papers. Beware of ‘vanity metrics’ such as these, they don’t provide any meaningful indication regarding customer traction, pricing and cashflow – the metrics by which you should be making decisions. Focus on metrics and numbers that you can improve, and that inform you on your direction of travel in a meaningful, clear way.

To me, the indicators that matter most in the life of an embryonic startup are about customer development and attraction: customer acquisition, retention and conversion. If you don’t have a handle on these numbers, then you’re simply fiddling round the edges, and your actions will make far less of an impact on growth direction, velocity and scaling ambitions.

These measures, when combined, inform you about customer traction, offering data points to give a clear picture of the underlying growth: how many customers have found your product (acquisition), how long do your customers stay with your product (retention), and how many of these customers are willing to pay for the product (conversion)?

These data points define the sales funnel, starting with acquisition, a signpost indicator that there is customer value proposition in your offering. Acquisition doesn’t have to be expensive, it can be organic and relatively clunky and have some friction in the process, because at this stage it’s still about validated learning and building on your MVP.

Once you have initial users, your focus is on retention. What is the monthly churn rate – how many leave your product after the first month? If they stay a month, how much longer are they likely to stay? Your retention rate has a major impact on building your user base, and the scaling, and ultimately the width and depth of customer revenue.

If retention is low, then the work of acquiring new users will continually get more expensive in order to grow revenues as you’ll have to continually spend more and more to acquire new users. Investors want to see the opposite trend: as your customer base grows, unit cost of customer acquisition, on average, should decline.

Retaining more users obviously provides an ongoing growing population to convert to recurring annuity revenues or other monetisation strategies, and with opportunities to grow the business by broadcasting to, and engaging with, a wider audience, enabling more visibility on social media, and a range of use cases.

Once you have optimised user retention, you can start working on both ends of your sales funnel, bring more users in, and converting more of them to paying customers. But focusing on converting users, when your retention numbers are low, will yield few results, and over time, those results will diminish without strong retention numbers.

So recognising that whilst there are lots of moving parts in your startup, which you need to stay on top of, a focus on customers forms the core of a dashboard of basic metrics. Over time, new financially based metrics can be plugged-in as it’s important to put an emphasis on the numbers you need to actively improve profitability.

But that’s the key: don’t use numbers to measure a startup financially at the outset, use them to guide and drive growth ambitions and the direction of travel and development of your business model.

Equally there is a ‘lead’ and ‘lag’ orientation to metrics, some track was has happened, others can be used to look forward. Don’t start tracking things having made a change, start tracking before the change occurs. Progressions are far more important than numbers without any context: what was that number last month, compared to this month? How has it changed? What is the growth curve? Is it static? Is it dynamic?

Use your numbers to ask questions, the things you need to know to be sure that what you’re doing is having any effect at all. It is difficult to prioritise product and customer growth: Should we write a new feature? Remove a feature? Fix a bug? Redesign a user interface? Remove a step in the sign-up process? Write a blog post? Offer an e-book for a lead nurturing campaign? Change pricing? Hire a customer support person?

So having set your North Star and its associated metric, what are the key drivers to focus upon, the moving parts which will get you to where you want to be: How many people are getting authentic value from our product?

I’ve always liked the ‘startup metrics for pirates’ – AARRR metrics – developed by Dave McClure, which represent all of the behaviours of your customers which drive to your North Star:

  • Acquisition: the customer finds you
  • Activation: the user interacts with you
  • Retention: the user likes you
  • Referral: the user recommends you
  • Revenue: the user pays you

You need to break down these five metrics on your product and analyse them separately, so that you can optimise each of them. It’s important to understand AARRR, because only when you understand all the metrics, you will understand each of the moving parts in your startup, so you don’t guess and make the wrong assumptions.

The truth is that many startups make the same mistake of thinking if something doesn’t work, it must be everything, or they just guess the wrong reason why their business is not working. The truth is, any part of a customer’s experience can influence them. Here are some other metrics to consider, my own 5C Scorecard:

Customer Numbers A simple, binary index, set and measured for each period, provides visibility, clarity and simplicity of your North Star.

Conversion Rate to be a very telling KPI in that it reveals a combination of the company’s ability to sell its products to its customers and the customers’ desire for the product. It is particularly instructive to track and review Conversion Rate over time and regularly run experiments to improve.

Customer Acquisition Cost (‘CAC’) CAC is the unit cost of spend on sales and marketing, on average, to acquire a new customer. This tells us about the efficiency and effectiveness of our marketing efforts, although it’s more meaningful when combined with other metrics detailed below, and when measured over time.

Customer Retention Rate indicates the percentage of paying customers who remain paying customers during a given time period. The converse to retention rate is Churn (or Attrition), the percentage of customers you lose in a given period. When you see high retention rates over an indicative time period, you know you have a sticky product that is keeping customers happy. This is also an indicator of capital efficiency.

Customer Lifetime Value (‘CLTV’) is the measurement of the net value of an average customer over the estimated life of the relationship. Improving the ratio of CLTV/CAC is critical to building a sustainable company.

There is also one financial metric you need to keep a track on at this stage:

Cash Burn This is simply the net cashflow per month and is critical to the survival of any startup. Runway is the measure of the amount of time until have in terms of cash, expressed in terms of months.

Short Runways cause entrepreneurs to be myopic and removes the liberty to tweak and iterate when necessary. It also forces them to focus on the next fundraising round instead of on growing the business. It’s a separate discussion from this blog, but fund raising should be focused on milestones, not the runway.

I’ve ignored the usual financial metrics – revenue growth, gross and net margin, as you must not be limited to the KPIs themselves, for they are merely measurements of outcomes. You must have an understanding of what levers can be pulled towards achievement of your North Star, which is then reflected in KPIs. The focus should not be on the KPIs themselves, but the meaning behind them and knowing what impacts each one.

Once we set our direction by the North Star and check-in on the underpinning metrics on a daily and weekly basis, you give yourself a mechanism for deciding where to focus your time to move your business forward, and for me, that’s all about how many customers see authentic value in your offering.

Fail in originality rather than succeed in imitation.

Having spent three years at university living with two biochemistry students who were hell bent on teaching me all about Crick & Watson, molecular biosciences and the rudimentary principles of genetic engineering, I’ve subsequently followed their careers with interest as I’m filled with curiosity about genetics and cloning – but also originality and individuality.

Simon is now Professor of Cellular & Integrative Physiology at a highly respected US university. His enthusiasm on Skype for keeping me updated on his research programmes, investigating the pathways that control pituitary gland organogenes, and developing new diagnostic and genetic tools knows no bounds.

As a result, I can talk for a good twenty minutes on how the anterior pituitary gland secretes polypeptide hormones that are essential for human development and physiology parameters including metabolic homeostasis.

Geoff took a different route to his career, wandering around various world-class commercial labs in America, Germany and now in the UK, collecting knowledge. Currently he’s in a role as Head of Research and Director of Lab Sciences focused on the betterment of humanity, so he tells me, leading innovative new drug research and discovery programmes.

He plans to save the planet, so he can live to 150 along the way. Our last conversation was about how integration of radioactivity data with metabolite profiling is key in the characterisation of the disposition of drugs and chemicals. I’ll fetch my (white lab) coat.

Both had a passion for genetics, and we had heated debates about the ethical and scientific boundaries regarding the deliberate modification of the characteristics of an organism by manipulating its genetic material. Alas my knowledge ceiling was the Czech monk Gregor Mendel and experiments on plant hybridisation with the breeding of pea plants in his garden, and his principles of heredity and inheritance.

Simon and Geoff lauded him as the father of genetics and we once went to a Biochemistry Society fancy dress party with the three of us dressed as Mendel, although I recall we were more mad monks than abstemious monks and hit the mead heavily that evening.

It’s now over twenty years since the first adult genetic clone, a sheep called Dolly. In the summer of 1996 Karen Mycock, a cell biologist, was attending a wedding in the Scottish highlands. Returning to her hotel to change her hat, she found a fax pushed under her door. It said: She’s been born and she has a white face and furry legs. An unusual birth announcement, but it was an unusual birth.

Karen worked at the Roslin Institute, an animal-research centre near Edinburgh. She had passed a tiny jolt of electricity through two sheep cells in a dish. One was an egg cell which had its nucleus removed, the bit of the cell which contains almost all its genes. The other, its gene-bearing nucleus intact, was from the udder of another ewe. The electric jolt had caused the two cells to fuse, forming an embryo. The ‘nuclear transfer’ she had overseen had worked. An adult sheep had been cloned.

The egg donor was a Scottish Blackface sheep who was the surrogate mother that took the embryo to term. The other cell came from a white-faced Finn Dorset. The fax had been kept brief and cryptic because the genetic breakthrough was hush-hush. When a scientific paper was published in Nature, a right furore broke out that went far beyond the scientific world.

The fuss among scientists was due to the fact that many believed cloning animals was impossible. John Gurdon of Oxford University had cloned frogs by nuclear transfer in 1958, but his creations never developed beyond the tadpole stage. All efforts to do the same in mammals had failed.

This had led biologists to believe that although all cells in a body shared the same genetic material, they were not equally capable of the same reproductive feats. Stem cells, found in early embryos, could develop into the various sorts of specialist cells found in skin, muscle or nerves, but development was way off.

The research at the Roslin Institute showed that this need not be the case. The key advance was made by Keith Campbell, who realised the importance of synchronised cell cycles, the rhythms according to which cells grow and divide. By starving the donor cells in a way that forced them to stop dividing, Campbell matched them to the eggs’ cycle.

Dolly opened up two new possibilities. Firstly reproductive cloning, the copying of individual animals, secondly, the creation of stem cells capable of forming other cells, something which came to be known as therapeutic cloning. The media and public became obsessed with the idea that human clones were just around the corner from the Frankenstein frisson of sparks of electricity.

However, from Dolly, 277 successful nuclear transfers produced just twenty-nine normal embryos, which were implanted into thirteen surrogate mothers. Only one survived. Alas Dolly developed osteoarthritis and a lung infection at an early age, and she died prematurely. That said, four clones of Dolly herself are currently enjoying a healthy old age at the University of Nottingham.

Beyond the lab, cloning has made slow but steady progress, successfully used on more than twenty species with the technique proving particularly fruitful in cattle and dairy farming, allowing multiple copies of elite animals. In New Zealand and America it is regarded as a normal animal-breeding procedure and clones are part of the pedigree market. Meat and milk from cloned animals is routinely farmed and sold in America. In Europe, though, it is banned on grounds of animal wellbeing.

Cloning produces replicas, not originals. Originality. What does it mean to you? Originality results from the power of imagination, like Picasso and Einstein. It’s up to the individual to take advantage of that imagination and turn it into something great. Imagination leads us to accomplish our greatest achievements. When you dare to be an original, you are in essence daring to be yourself and who you really are.

It’s true. Life is too short to live it trying to be anything other than your true original self. Be who you are, and be it the best way you know how. So how do you do this? Here are some thoughts.

Listen to the voices in your head – what do you mean, you don’t hear voices inside your head, is it just me then? Whatever the voices tell you, trust them and your instinct, and go for it. Trust yourself and your intuition.

Expect a lot from yourself, believe in yourself Don’t let someone else define your agenda, you decide what is possible for you. Dare to believe you can be the best, and make it happen. Embrace challenges and setbacks as defining moments, learn from them, use them as springboards.

Don’t care about being right, care about succeeding Steve Jobs used this line in an interview after he was fired by Apple, and I think it’s a great guiding principle for anyone, as a person or business leader.

Chose your attitude Regardless of appearances, no one escapes life without enduring tough moments and cul-de-sacs. The truth is, life is messy and unpredictable. The difference between those who overcome challenges and those who succumb to them is largely one of attitude.

JRR Tolkien’s words in The Hobbit are inspiring about your choosing your attitude for personal or business growth:

The greatest adventure is what lies ahead, today and tomorrow are yet to be said, the chances, the changes are all yours to make, the mold of your life is in your hands to break.

Be Unique Our world today is full of Dollys, replicas, clones and imitations, so craft a life of novelty and innovation. Conformity to the norm will merely sentence you to mediocrity, who wants to be average, surely that’s just a blank face in the crowd of irrelevance – be your own voice.

Life’s too short to go unnoticed Be audacious, but with humility. Life is all about progression from good to great. Push yourself to be there, at the top table, but never be afraid to wash the pots too. Leaning back, or leaning forwards, which do you think is the best stance to take?

Reach beyond your expectations A Shackleton quote. Success means different things to different people, and that’s okay, but it’s not other’s opinions you should be concerned with, but your own expectations. It’s my hope your sights will shift from the modest pursuit of success to the passionate pursuit of significance.

Live at your Personal Best Following on from the above, look into the minds of Olympians such as Beamon, Owens, Lewis, Fosbury, Redgrave and Liddell. Push yourself at every moment, seize the day. Today’s laurels are tomorrow’s compost.

Be a lifelong learner Graduation isn’t the end of learning, just the start. Learning defines the person and is a lifelong endeavour of discovery, improvement and fulfilment. The minute you stop learning is the minute you cede your future and check out on the race with yourself to realise your potential.

Be mindful Be conscious of living in the moment. Pay attention to the moment, and make it happen. Fantasy of ‘what will be’ is a necessary ingredient in living, it’s a way of looking at life through the wrong end of a telescope, but don’t take life too seriously, be happy.

Stay hungry, stay foolish The closing lines from Steve Jobs’ 2005 Stanford University speech captures a sentiment that seems on the face of it somewhat flippant, however, when you reflect, it’s a statement about keeping your ambition and being adventurous, never taking yourself too seriously, keeping the zest and attitude of youth.

In addition, Jobs made three other points to the Stanford class, which are relevant to all entrepreneurs:

  • You can’t connect the dots looking forward; you can only connect them looking backwards. You have to trust that the dots will somehow connect in your future, so follow your curiosity, intuition and your heart.
  • Sometimes life hits you in the head with a brick, but keep going doing the thing you love, that is great work. If you haven’t found it, keep searching until you find it. Keeping looking don’t settle.
  • Live each day as if it is your last, because one day you will be right. Your time is limited, so don’t waste it by living someone else’s life, don’t be trapped by dogma of other people’s thinking, don’t let your own voice be drowned out by other people’s noise. Have the courage to follow your heart and intuition. Everything else is secondary

Check out Job’s inspirational speech here: https://www.youtube.com/watch?v=D1R-jKKp3NA

There is a light that never goes out from our youth, keep it alive as the years clock on. Individualism is a human thing. Don’t waste your time trying to be a copycat. Be yourself, stand out from the crowd, because those who mind don’t matter, and those who matter don’t mind. Champion novel ideas and values that go against the grain, battle conformity, and buck outdated traditions.

Don’t be a sheep in wolf’s clothing, or another sheep’s clothing. It’s better to fail in originality than succeed in imitation.

Lessons in entrepreneurship from the baristas of NYC

The first time I visited New York, I was warned about three things: to be constantly aware of personal safety, to forget about tea as they only serve coffee, and, in the interests of political correctness (and, potentially, personal safety), never offer criticism of the President.

It was 1986 and for a week I walked around hyper vigilant for muggers, making no eye contact with strangers I passed on the street. When I needed a caffeine fix, I deliberately asked for a coffee with milk. And as for politics, the most political minded I got was that I wondered at times what The Ten Commandments would have looked like if Moses had run them through Congress.

More than 30 years on, the change in a few decades is pronounced; time has made the city safer and seemingly better caffeinated. No comment on the President. From Manhattan to Brooklyn, there are hundreds of independent coffee shops. I am sitting in one, Five Leaves, a bistro-café in Greenpoint, Brooklyn, on a crisp winter’s morning. In the cool light it is bursting with vibrancy: brightly coloured eggs, salmon and, everywhere, the unmistakable green of smashed avocado.

So many features of this airy cafe are familiar to others in the city – the distressed faded, almost run-down decor, the subtle scent of vinegar-laced boiling water for poaching eggs, and its packed with customers. Then the heavily tattooed barista, who has Death before decaf etched into one of his arms. I overhead the chat: I had to learn how to make 400 coffees in a morning.

The decor is pared back, with tiny stools at tiny tables piled into a tiny space. A small kitchen sends out freshly made artisan breakfast meals that are just fascinating in design and flavours, matching the artistry on the menu boards on the wall, and in reality judging by the gusto with which they are consumed, tasty. The cafe’s vibe is warm and welcoming, with around ten staff overseeing a customer base that comes and goes with amazing frequency.

What you see here is an example of entrepreneurship at a much smaller, individual scale – forget the tech behemoths that have emerged from NYC, the wave of independent coffee shops are the playgrounds of barista entrepreneurs. The barista-entrepreneur is no different from any other person choosing to launch their business idea a startup reality. They need to do their research, learn their craft, secure funding, find premises, create and test their product and then launch it.

In small independent coffee shops, the man or woman serving your flat white is often the proprietor, having to juggle everything from serving the coffee to mastering social media to managing suppliers. They are operating in a highly competitive market, against other independents and the global chains. They will stand or fall on the quality of their product, customer service and ambiance of their venue.

My week in New York, visiting my son was a great experience. I managed to get some work done too, commuting in with him on the L train, enjoying the hustle and bustle, sight and sounds, but most of all I got into the habit of seeking out the artisan independent coffee shops mid-morning and mid-afternoon.

I watched baristas operate as true entrepreneurs. From beans to roast to brew, offering signature blends of coffee with smooth taste, providing an alternative to the international chains known for the powerful brands, but their industrial scale lacking intimacy.

The extent of personalisation provided by the baristas surprised me, earning accolades from customers in their sincere greetings and genuine thanks. There was sincere recognition and rapport between barista and customer. So much so, that in most cafes I visited, the baristas recognised the customer and what coffee they wanted before they asked – despite them having thousands of customers each day.

New York does coffee. Coffee served quickly, exactly like the customer asks for it. Coffee places like Five Leaves do it right. They know what people want. The baristas are prepared. Baristas serve two functions in this equation. Baristas make the coffee the way the customer likes the coffee, but before they do that, they listen and recognise what they customer wants. They serve the very important function of listening. This made me stop in my tracks, because I didn’t realise just how much practice it takes to listen. It’s a vital piece in the customer relationship, over and above the coffee itself.

The espresso they serve is exactingly made, very tasty, and perfectly portioned with milk that’s just hot and foamy enough. For those looking to try something new, there’s a rotating selection of boutique, in-season beans at a higher price tag. Along with cortados and lattes, you’ll find the slightly more obscure shakerato, espresso shaken over ice and served with simple syrup and an orange twist.

But, back to the practice of listening. It’s a lot like the practice of delivering great coffee. Listen to what baristas say: I have that grande decaf mocha for you, when you’re ready; Tall skim cappucinno on the bar, just for you.  A little extra touch. No matter how crowded and busy the queue, they talk to their customers, and in talking with the customers, they learn about them.

So let’s look further at the lessons to be shared between successful entrepreneurs and baristas, what are their common attributes, behaviours and qualities?

Discipline Both have discipline, entrepreneurs to ‘make the main thing, the main thing’, to focus and not deviate. For a barista, maybe the game plan is simply consistency, prepare a great cup of coffee time and time again for every customer on every visit.

All entrepreneurs have a North Star, a barista is no different. Indeed scaling a business means being consistent and delivering to every customer, time and again.

Keep a clear head Amidst the hullaballoo and the fury of the frantic queues in the coffee shop, baristas have to keep a clear head. In the heat of the moment, they cannot get caught up in the intensity and lose focus or the lessons learned from their training, which is an important skill to have as an entrepreneur.

Entrepreneurs have to be both mentally alert and hold bundles of mental toughness, which helps to hone their mentality. It’s what makes an entrepreneur see the opportunity when others around them can’t see the way ahead.

Resilience Boxers get punched in the face, some get knocked down. The difference between a good boxer and a great boxer is the ability to get back up. It’s the same for an entrepreneur, they have to be able to dig deep, look within themselves, and have the confidence, courage and heart to keep getting back up, no matter how many times they get knocked down.

Baristas may not get punched in the face, but sometimes when things don’t go your way, it feels like it. But if you are confident enough in yourself and your business, and you want it bad enough, no matter how many times you get knocked down, you will find the courage and heart to keep getting back up.

Build muscle memory Muscle memory is equally important in business as it is in sport, especially when times are tough. Having weathered countless storms in the past, entrepreneurs rely on my muscle memory to kick in so, despite the loss, they maintain the mindset of growth and opportunity to go again and find new customers.

For Baristas, resilience in times of peak demand is needed to keep the customer experience as fresh and stimulating as the coffee.

Patience As an entrepreneur patience is as important as an ability to move quickly. Sometimes you may want to rush out and spread the word about what you’re doing or talk to potential customers, but if you move too soon, you may not have a full understanding of the situation. It is important to make sure that when an opportunity arises, you are prepared for it, able to recognise it, and attack it with great precision.

For the artful barista, it’s the combination of the quality of the product and the experience, they don’t cut corners despite the customer perhaps being in a hurry, creating the product takes time, care and attention, whilst finding a few moments engaging with the customer personally is a vital ingredient too.

Enjoy the oxygen Top rugby players use a technique whereby they take 30-second breaks in-between agility drills, weightlifting, jump-roping and sprinting in a five-minute intense workout. During those brief seconds, they are exhorted to enjoy the oxygen. This teaches them how to breathe using their diaphragm, not their lungs, and to lower their heart rate during breaks in play when on the pitch.

So many business folks are so caught up in the heat of the moment that they don’t stop to take a deep breath, step back, and pause for reflection, or to appreciate, understand and evaluate what they’ve accomplished. Pausing to collect your thoughts, regain composure and adjust your physiology helps entrepreneurs persevere over the long-term, especially when encountering those unexpected speed bumps and disruptions.

I’ve seen the baristas do this too, spending a quiet moment to themselves to reflect on the success of their business that morning, enjoying the success of seeing returning customers, before going again.

Put accuracy before power Business is more about rhythm, technique and accuracy than simply raw power. Power is useless if it misses its target, it wastes energy. That’s a great analogy for any entrepreneur who’s chomping at the bit to launch a new product or service, and dazzle the world. The best planned product or service will fail miserably if it doesn’t solve a customer want or need, all the smart marketing muscle in the world won’t matter.

This is how the independent coffee shops win against the global chains, they do lots of little things differently, they don’t try to compete on the same basis, they make a difference by being different, and focus on that.

Keep moving forward Although entrepreneurial success is heavily dependent upon skill and the perfection of the craft, anyone can be broken physically by a relentless challenge. It’s hard to keep moving forward when you don’t see visible signs of success, it becomes as much a battle of wills and mental endurance as it does a battle of stamina, strength, and skill.

Many of the greatest successes are of those people who just kept working – James Dyson, inventor of the dual cyclone bagless vacuum cleaner, spent five years and produced over 100 prototypes of his machine before success. We never hear about the guy who quit, but the guy who persists and perseveres and keeps moving forward to their goal.

People’s desire for that perfect cup of coffee or shot of espresso creates a queue of people in a hurry, but where baristas showcased the art form of artisan beverage making, everyone was happy to wait. Much like the subway artists in NYC, the barista craft is an art form to behold, performed with purpose.

I saw tonnes of guile, grit, creativity and determination – and smiling faces – from the hard working baristas who were putting a long shift in, they knew that today was a step forward to success and may not feel like it in the moment, but a focus on their horizon and holding their vision was vital to success.

It’s tough out there and the pace is fast, but like any entrepreneur they had discipline, clarity and focus to guide their thinking and doing towards their goals.

Focus: stop kidding yourself, you can’t give 110%

During a client conversation last week, I poured some water into a glass, and it overflowed slightly. Clumsy he said, to which I replied, Not really, I always give 110%.

But I made the point because its one of my favourite bugbears: You CANNOT give 110% effort, and this chap had used the phrase five times already, trying to convince me he was going to be the next Elon Musk.

I call on the mathematically literate to join forces with me and together defeat the scourge of giving 110%. It’s a numeracy blight on the intelligence and lexicon of our country and it needs to be stopped. For non-pedants wondering why this phrasing that peppers sports vox pops and TV talent shows annoys me so much, maximum effort is 100% – 110% is beyond your capacity.

Even 101% means you are making an effort beyond your actual capacity. Some may argue it’s justified as you’re increasing your effort beyond what you thought was possible for you – you’re going the extra mile – yet that’s irrelevant as the percentage is a measure of maximum output.

You can only pour water into a glass to fill it 100%, and thus you can only spill 100%. The expectation to give or receive 110% would also mean it would have to be reasonable to expect many other things that fly in the face of logic and what is impossible according to the laws of physics. A day is 24 hours in duration so how could you expect it to magically become 26.5 hours long? Where is the 110% there? An idiomatic expression for going beyond, that’s all, but it’s meaningless.

You can still only give 100%. If your effort output has increased, you need to recalibrate, so what you before called 100% effort, should now be seen as 91% effort. If we act generously and find a way to uncap the effort limit by arguing that the percentage given relates to average not maximum effort – then in fact 110% isn’t trying that hard.

I know this is a lot of numbers, but stick with me. I recall walking into the front room one Saturday afternoon before Christmas and the dog was watching Sky Sports, when one footballer being interviewed promised to give 110% and later another promised 150%. Did this mean one was going to output more effort than the other? No, it means both of them were talking utter poppycock.

Maybe I’m too literal, maybe I’m too curmudgeonly, but you can only give 100%. I know the phrase is meant to embody the notion of doing more than what was thought to be possible, but to me it puts the emphasis on the wrong element. It’s not that you did more than you could, which is impossible, it’s that you had the wrong assumption about what was possible to begin with.

So I’m a founder member of the Quantitative Pedants 2017. Of course, percentages greater than 100 are possible, that’s how startups experience 200% growth in year-over-year revenue, to pick one example. It all depends on what your baseline is – x% of what?

Here’s actually a more serious (and more mathematically precise) way to look at this. Economist Stephen Shmanske produced a paper titled Dynamic Effort, Sustainability, Myopia, and 110% Effort that actually brings some stats and benchmarks to bear to figure this out in the right context.

For Shmanske, it’s all about defining what counts as 100% effort. Let’s say ‘100%’ is the maximum amount of effort that can be consistently sustained. With this benchmark, it’s obviously possible to give less than 100%, but it’s also possible to give more. All you have to do is put forth an effort that can only be sustained inconsistently, for short periods of time. In other words, you’re overclocking.

And in fact, based on the numbers, entrepreneurs pull >100% off relatively frequently, putting forth more effort in short bursts than they can keep up over a longer period. In giving greater than 100% can reduce your ability to subsequently and consistently give 100%. You overdraw your account, and don’t have anything left. This seem like a rough-but-reasonable analysis of what athletes and other people mean when they use the ‘110%’ language this way?

Why do we set these unrealistic expectations for ourselves? What makes me think that I am the exception that I have any more than 100% of myself to give? We can’t perform two tasks at 100% efficiency, crickey, I can hardly do one thing at 100% efficiency. Thus an elastic 100% does exist, but only temporarily, and at the cost of future performance – you borrow from the future in short-spurts of extraordinary effort.

As well-renowned basketball coach-come-philosopher John Wooden used to say to his players, if you don’t give 100% today you can’t make up for it tomorrow by giving 110%: your maximum effort is 100% of what you are capable of – period.

Every entrepreneur wishes there were more hours in a day to get their work done. These days, with all the new technology, many are convinced that multi-tasking is the answer. Yet there is more and more evidence that jumping tasks on every alert for a new email, text, or Skype call actually decreases overall productivity.

According to Rasmus Hougaard, the founder of the Potential Project, delivering mindfulness programs to Amex, Nike and Accenture, taking time for what matters, there are some basic rules that can help you manage your focus and awareness in work activities. Practicing these will ensure greater productivity, less stress, more job satisfaction, and an improved overall sense of well-being. You can only give the maximum effort (100%) and need a balance in that.

With mental health of entrepreneurs being given more attention now, to balance the machismo of I work 24/7, this is highly relevant. The guidance includes a singular focus for at least a few minutes on your current task, and limiting your distractions very strictly during this period. Don’t ever try to do two significant cognitive tasks at the same time, switching on a millisecond basis, or your attention will become fragmented and both will suffer.

Hougaard outlines eight mental strategies or habits that every entrepreneur needs to cultivate, to keep your mind clearer and calmer, and increase your overall productivity. I concur, based on my own experience in startup ventures and mentoring entrepreneurs. Examples of companies already coaching their teams on these mental strategies include Google, Starbucks, AOL, and more:

Mentally be fully present and engaged in the current task Presence is foundational for focus and mindfulness, it means always paying full attention to the people around you, making a conscious decision to intentionally be more present.

Deliver rational responses rather than impulsive reactions This requires patience, or the ability to stay calm in the face of challenging situations. Patience is more concerned with larger goals, rather than temporary quick-fix solutions. Practice by stopping and taking a few breaths to calm down, before reacting.

Choose to always give honest and constructive feedback It’s easy to give negative feedback and find the downside in a proposal made to you. However, make a conscious decision to always find the positive aspects, even if it’s a proposal that isn’t for you and you can see lots of downsides. Practice positivity in every interaction with people.

Approach every situation with a beginner’s mind Without a beginner’s mind, what you have seen and done in the past, called habitual perception, can be problematic. It means you may not actually see today’s reality. Practice by overtly rejecting any habitual perceptions, and challenging yourself to be more curious in your day-to-day activities.

Refrain from extended fighting with problems you can’t solve Accept and realise that every problem can’t be solved, and frustration won’t resolve the issue. It will just make you less effective and less happy. Practice by choosing to move on, without carrying an inner battle.

Balance your focus between instant gratification and discomfort work Consciously identify the tasks that come easy to you, versus tougher tasks, and also a balance between short-term and long-term, that inevitably have different levels of satisfaction once completed. Practicing awareness of balance will lead to a change in your level of quick distraction and long-term avoidance.

Proactively seek moments of joy throughout your day Most of us are ‘always on’, always connected and always running, all day. The key here is to anticipate at least some activities you enjoy daily. Many people find this in just sitting still for a few minutes in quiet contemplation, maybe reading or going for a walk. Whatever it is, just switch off and find some personal quiet time.

Consciously let go of heavy thoughts and distractions Letting go is a simple but powerful mental strategy to clear your mind and refocus on the task at hand. Let go of a problem stuck in your head means putting it to one side, focusing on another challenge and when you return, creating the opportunity to refocus your thoughts.

Without these initiatives to balance your effort and get a clear focus, most people will find their ability to focus declining, yet still live with the rhetoric of 110% effort. We all face overload, increased pressure to move fast, and a highly distracted work reality. Our attention is continuously under siege, with more things and stuff to do causing distractions.

So, instead of simply keeping going, trying to squeeze more out, continuing to deny yourself and the great mathematicians in the sky, instead look at Dave Brailsford’s Marginal Gains Strategy. Brailsford’s approach is to take a holistic view on what you do and determine how to achieve 1% improvement in everything. His premise is that the aggregation of small gains across the board adds up.

And he is right. The maths here is compelling, which is nice. If you do something better by 1% a day for a whole year, the aggregated gain is surprisingly significant: 1.01365 =37.78. The compound effect of a daily 1% improvement yields a multiplier of nearly 38 times your original performance output.

So, stop pushing yourself relentlessly and instead ask yourself: Where can I achieve an additional 1%? Look at where you can make a step-up, and create a focus on continuous improvement, not the end result. Brailsford did this with the Omnium team, were the World Record was 4.00 minutes. His challenge was: how do we achieve a performance time of 3.56 minutes? And they did just that.

Gamblers trust to luck, entrepreneurs trust in their own hard work. Maybe now with the focus on mental health and stress, simply looking inwards at the success you are achieving, it may be the time to increase your focus and accept no last minute rushes to ‘go the extra mile’ will make up for the times when you were not giving of your best. It just doesn’t work. Periods of extraordinary effort borrow from the future, until it all catches up on you.

In his fine article regarding nominal and ordinal bivariate statistics, Buchanan (1974) provided several criteria for a good statistic, and concluded: The percentage is the most useful statistic ever invented.

I’m not sure about that, but Thomas Edison captured it well, with his words: Genius is 1% inspiration and 99% perspiration. Maximum effort is the minimum requirement for sure, but 100% is all there is to give and that’s that. 100% means the whole thing. Everything. All of it. Your whole self. Nothing left. Nothing more.

Entrepreneurial learning journey: voices on the NYC subway

We’re all familiar with the Post-It Note, a small piece of paper with a strip of glue on its back, made for temporarily attaching notes to documents and other surfaces. Although 3M’s patent ran out in 1997, ‘Post-It’ and the original notes’ distinctive yellow colour remain registered 3M trademarks.

Originally small yellow squares – the original notes’ yellow colour was chosen by accident, as the lab next-door to the Post-It team had only yellow scrap paper to use – Post-It Notes are now available in an array of colours.

In 1968, a scientist at 3M, Dr. Spencer Silver was attempting to develop a super-strong adhesive. Instead he accidentally created a ‘low-tack’, reusable, pressure sensitive adhesive. For five years, Silver promoted his ‘solution without a problem’, within 3M but failed to gain acceptance.

In 1974 a colleague, Art Fry, came up with the idea of using the adhesive to anchor his bookmark in his hymnbook. Fry then utilized 3M’s officially sanctioned ‘permitted bootlegging’ policy to develop the idea. 3M launched the product as ‘Press ‘n Peel’ in 1977, and sold as ‘Post-Its’ in 1979.

So we’re all familiar with the product, but on my recent visit to New York I witnessed a remarkable use of Post-It Notes, with 5,000+ on the walls of Union Square subway, left as public statements after the presidential election result, when a majority of New Yorkers voted against President-elect Trump.

Project organiser Matthew ‘Levee’ Chavez called it the ‘Subway Therapy’ project that allowed New Yorkers to express their feelings. The creation will be preserved at the New-York Historical Society as potent artefacts of everyday life.

After the election, Chavez set up a table and chair to listen to the voice and feelings of the commuting public. He brought a stack of sticky notes to the 14th Street station and started the installation in the underground passageway that connects the 1 train to the L train, handing out the notes and letting people vent their emotions onto the subway wall.

The sticky notes expressed a range of emotions and feelings, from hope and optimism to the crude and rude. They captured the feeling of the city immediately after the election. The project attracted the attention of City Governor Cuomo, who visited the station to leave his own note that included the Emma Lazarus poem on the Statue of Liberty’s tablet.

I found the notes to be a powerful symbol of the community voice. They made compelling reading. It was a piece of public realm art that helped people to think about new ways of connection with each other and expressing themselves. It took me a minute and a half to walk from one end to the other. I stood reading for 30 minutes.

The New-York Historical Society will remove the notes from the walls and store them on mylar sheets in archive boxes to be digitised. The project is not done yet, they will be there to Inauguration Day on January 20 as people continue to add their thoughts.

In a city of 8 million people, it’s hard to share your opinion, but this worked. You will not divide us. Love is everything. Another says It doesn’t end today. Michelle Obama’s now famous declaration, If they go low, we go high, is on there. Another sticky note offers soothing words: Everything will be alright. But a few feet over, another person wasn’t so sure: What do we do now? There was an answer amid the sea of impromptu messages: We’ve been through worse (meaning 9/11) and the city will unite, the light pink sticky note said. We will get through this together because love trumps hate.

It was hard to move in the 14th Street-Union Square subway. Weeks after the election result, crowds of people still stop to look at the vibrant rainbow of Post-It Notes curling against the blanketed walls, interrupting the flow of the normal New York hustle and bustle.

Subway Therapy was a spontaneous project encouraging people to share their feelings. The first notes went up in the tunnel linking the 1/2/3 and F train platforms at 14th Street in Manhattan, and soon spread to Union Square and other subway stations in the city and beyond, including Boston and San Francisco, as copycat walls sprung up in other New York stations.

We might look at Post-it Notes as incredibly quaint, but this method of communication really captured the spirit of 2016 and the needs of New Yorkers at that particular moment, with the notes expressing frustration, solidarity, sympathy and other emotional messages.

From a business perspective, even if someone doesn’t believe their voice is important, the Subway Therapy project shows the importance of providing a platform to communicate with and listening to your customers, even if their message isn’t something you want to hear.

You may hear what they have to say, but do you really listen? For me, hearing means registering the information but not doing much about it. Listening, on the other hand, means understanding and reacting in a meaningful manner.

I realised the power of listening when working with startups developing their early protoypes and seeking feedback from their early adopters. I learned that they had the answers to the challenges we faced – all we had to do was to listen. Listening is a fascinating art and, when done correctly, it can deliver tremendous and surprising outcomes.

What does listening to your customers say to them? It says that you care, you are serious about your business and you are open minded, looking to learn and understand their perspective. After all, you started your business to win customers, so make sure you make them feel valuable. By listening, you are more likely to gain customer loyalty, and thus win more business.

Today’s customers are empowered and expect companies to give them what they want, when they want it, and this has had a significant impact on how businesses approach listening – both challenges and opportunities. With this in mind, monitoring and analysis of customer sentiment is a crucial part of growing your business. Whether positive or negative, if you listen to what your customers are saying then you’ll be in the best possible position to learn and to engage effectively.

Listening and analysing customer feedback can also contribute to product development and marketing strategies which reflect more of what your customers want, thus providing a platform for customer centric growth strategies. Listening to your customers’ voice doesn’t have to be difficult. Living in your customers’ world, walking in their shoes enables you to get better customer insights to fuel better decisions, being ‘personal’ will create opportunities to strengthen relationships and understanding, capturing customer’s expectations, preferences and aversions.

Starbucks – as a global brand – is the antithesis of local, and yet they tapped in to the importance of being valued in a unique way through the Can I have your name? approach. At first disruptive and peculiar, it is now hard for other brands to copy that is the name that appears on the cup. It is human and therefore wonderfully imperfect, and in many ways more effective than communication based on algorithms.

However, the biggest communication challenge is then we often do not listen to understand, we listen to reply, so what are the habits of a good listener? How do people with good listening skills tune in? Good listening is much more than being silent when the other person talks. Good listening includes interactions that build a person’s self-esteem, creating a collaborative conversations. A good listener will listen not only to what is being said, but also to what is left unsaid or only partially said.

So let’s look at good listening techniques:

Stop Talking If we were supposed to talk more than we listen, we would have two tongues and one ear – Mark Twain. Don’t talk, listen. When somebody else is talking listen to what they are saying, do not interrupt, talk over them or finish their sentences for them. Stop, just listen.

Prepare yourself to listen Focus on the speaker, put other things out of mind. The human mind is easily distracted by other thoughts – what’s for lunch, what time is my train, is it going to rain – put other thoughts out of mind and concentrate on the messages that are being communicated.

Be fully in the moment – be an active listener Focus on what is being said. Don’t doodle, shuffle papers, gaze out the windows or similar. Avoid unnecessary interruptions. These behaviours disrupt the listening process and send messages to the speaker that you are bored or distracted.

Sit their side of the table Empathise, try to understand the other person’s point of view. Look at issues from their perspective. Let go of your preconceived ideas. By having an open mind we can more fully empathise with the speaker, which they will recognise.

Listen to the tone Volume and tone both add to what someone is saying. Everyone will use pitch, tone and volume of voice in certain situations – let these help you to understand the emphasis of what is being said.

Be curious listen for ideas – not just words You need to get the whole picture, not just isolated bits and pieces. One of the most difficult aspects of listening is the ability to link together pieces of information to reveal the ideas of others. Be curious, and create the full picture.

Watch for non-verbal communication Gestures, facial expressions, and eye-movements can all be important. We don’t just listen with our ears but also with our eyes – watch and pick up the additional information being transmitted via non-verbal communication.

Show you’ve picked up on the key points After a period in the conversation, show that you’ve been listening by replaying back a few key points raised so far, and ask them to clarify anything that you did not understand. This gives the speaker confidence that you are taking the conversation seriously.

So good listening techniques. But back to the Post-It Note collection on the NYC subway. It’s unlikely that Trump is bothered about the Subway Therapy installation, he’s unlikely to listen. As Woodrow Wilson said, the ear of the leader must ring with the voices of the people. Then again, big egos have little ears.

The twelve days of Christmas for a tech startup entrepreneur

It’s a great time to be an entrepreneur. If you can get into a position where you sit at the intersection of a sizeable market, build a high-performing team and create a great product, this is your time. This is the age of the startup, the leverage afforded to startup founders today is immeasurably greater than that previous generations due to the internet.

Startups can be global from the outset, addressable markets have multiplied through the reach of direct-to-consumer distribution channels  of app stores and cloud platforms, superceding physical borders and boundaries of time.

Those startups with global ambitions combine scalable, pre-built components from public cloud vendors, API services and the open source community, and deploy them on open platforms. Platform openness means fewer barriers between a startup and its customers and fewer technical dependencies, and thus scaling can be reached earlier – Uber and Airbnb show this.

A rising new generation of global tech firms are now officially the most valuable companies in the world: Apple, Alphabet/Google, Microsoft, Amazon, Facebook. We’re living a staggering rotation of economic value, out with the incumbent companies in financial services, industrial, and consumer products, replaced by companies centered around software, data and technology-enabled services.

Whilst these firms were all Silicon Valley startups, don’t blink, because coming over the horizon from the East are a set of equally formidable tech giants in Tencent, Alibaba, and China Mobile, each of which reached the global top twenty ranks this year. These companies are fast adopting and inventing new bases of value that support lucrative scale, from networks, data, and the interconnection of communities, consumers and businesses.

None of the new tech giants endured gruelling hundred-year-company-building efforts. The median age of the new guard is closer to 15–20 years, versus 75–100 years for the incumbents who ruled the decades before. Joining these ranks just doesn’t require the sort of multi-generational company building we’ve seen before – the internet has created their markets.

The internet creates new opportunities for value creation. With a focus on disciplined and sustainable growth from clear business model leverage, this means thinking early and often about how to architect product and distribution together as a single, efficient offering. ‘Product’ is no longer just the bits of software, it’s also how the software is sold, supported and made successful with future revenue goals and product roadmaps in mind. Currently, the focus is around data-centricity, artificial intelligence, machine learning and intelligent workflow.

Against the backdrop of the march and ubiquity of tech sector growth and its reach into our everyday lives, we have the stark contrast of the humanity and traditions of Christmas. It’s almost a throwback experience to where time has stood still. For me, it’s about mince pies and mulled wine, time spent with family and friends, when people matter more than devices, and social connection means real face-to-face conversation replacing the screen for social media exchanges.

Indeed, throughout December, I’ve heard The Twelve Days of Christmas everywhere from radio commercials and shopping centres, but especially in carol services where it’s live music performance, not digital downloads. Everywhere you go, you can hear about Three French Hens, Seven Swans-a-Swimming and Eleven Pipers Piping. But what does any of this mean? What does a song about doves, hens and geese have to do with Christmas, and relevance to today’s tech driven economy?

The carol has its origins in C18th England, as a memory-and-forfeit game sung by children, whereby children had to remember all of the previous verses and add a new verse at the end. Those unable to remember a verse paid a forfeit, in the form of a kiss or a piece of candy to the others. Today, these verses are what we associate with the days from December 25 to the Epiphany on January 6, as the day when the manifestation of Christ’s glory was realised.

However, my thoughts are that you can enjoy the traditions of Christmas as a tech entrepreneur by using the twelve days of Christmas in a relaxed but constructive way, taking advantage of the holiday to take reflection in a quiet, calm moment to yourself, have a time out for some clear thinking when out for an early morning walk and thoughtful review of your business journey over the previous twelve months without the fear of those unanswered emails lurking in your inbox.

So here are my actions for the ‘Twelve Business Days of Christmas’

Day One: Reframe First and foremost, simply bemoaning your luck for mot achieving what you set out to achieve at the start of the year by complaining about your competition or lack of customers won’t help. Today’s laurels are tomorrow’s compost, you need to reboot and look forward. What are you aiming for? What does success looks like in 12 months time? What are you going to do differently this time that will create a different set of outcomes? There’s no point in feeling sorry for yourself, get a grip, reframe your own future.

Day Two: Restart Forget about how you’ve done business in the past, it was good enough then but it won’t give you the results you want in the future. The new order of tech companies show how the balance shifts dramatically is short time frames. In order to become the best business you can be, start with a clean sheet of paper. Who is my ideal customer? What is their persona? Why should customers buy from you and not others?  Don’t get stuck in a rut, press the restart button and don’t be afraid, take a new bold, fresh approach. The same actions as last year will get you the same results – if you’re lucky.

Day Three: Rebalance The end result of your entrepreneurial risk taking should be freedom and fulfilment, not continuous hard work and a feeling of déjà vu. Dedicate time to rebalance your monthly, weekly, daily activities. If it’s all the business of today, who is steering towards the business of tomorrow? Specify what you should be doing, working ‘on’ the business, and not simply ‘in’, and rebalance your priorities. What is your North Star for the next twelve months?

Day Four: Revisit How can you succeed against a myriad of low-cost competitors? Offering the same thing as every competitor provides no advantage, and short-term pricing campaigns offer no sustainable long-term plan, so revisit your business strategy and business model to ensure they are viable and will build a winning business. Identify what markets and products will work in the next 12 months, and develop your value proposition accordingly.

Day Five: Revitalise Is the new year the time to revitalise your product offering in terms of features, benefits and customer experience? Could you layer on new capabilities to enhance stable underlying core processes to improve customer engagement? Analytics are another common area of focus – introducing cognitive techniques to better meet descriptive reporting needs and introduce predictive and prescriptive capabilities could take you forward. Talk to your customers and prospects, have a conversation, don’t sell – what are their unmet needs?

Day Six: Refinance The best businesses are also the best financed. Now is the time to take a hard look at your financial strategy, planning, management and systems, and your cash requirements. Prepare a 12-month cashflow, and use this information for strategy, investment and pricing decisions based around serving customer needs. This will give you a clear focus. Money from customers is the applause, but without adequate working capital, you won’t be able to get in front of them.

Day Seven: Restructure Most businesses use the same organisation chart for years without changing it, but over time, the old structure becomes outdated as customer demands change. Perhaps it’s time to restructure and take a look at job roles, skills needed, and responsibilities. Start with a blank piece of paper, what does the structure need to be to deliver the success desired? What are the key roles you don’t currently have? Where re the skills and people gaps for the next 12 months.

Day Eight: Refocus What do you offer or do differently to attract customers? How do you gather new fans of your product? Have you changed your target market or delivery systems to expand your customer base? Is it time to refocus your customer strategy and look for new customers in new markets? We often develop a myopic, inward facing view on our business, spending too much time focused on product not customer, and ignore our marketing and messaging. What does your brand stand for?

Day Nine: Replace: Introduce new solutions for parts of the internal core that have been unchanged for many years. This may mean adopting new processes – have you considered the benefits of a cloud infrastructure? You should ideally use these pivots to revisit the business’s needs to service its customers better, building new capabilities that reflect how work should get done, not simply replicating how work used to get done on the old systems. Today it’s about the customer experience, engagement and providing convenience – do your systems make you easy to do business with, or are your customer facing systems clunky?

Day Ten: Revamp What business routines do you call over and over? Have you called any new plays lately? Your management style must be agile, what new ideas and innovations have you introduced to refresh the business and keep heads up. Think inside out, think like a customer.

Day Eleven: Replatform Upgrade platforms through technical upgrades, updates to software, and migration to modern operating environments (virtualised environments, cloud platforms). Unfortunately, these efforts are rarely ‘lift and shift’ and require thinking, analysis and tailored handling of each specific workload, but now is the time start with the thinking time available.

Day Twelve: Relive Are you living your dream with your business? Why not? Never forget your dream. Write down what you want your business to do for you personally in the next three to five years. Next decide what you must do to turn your vision into reality. Make it personal, so your business enables you to work to live, not live to work. Do you work for your business, or does your business work for you?

I’ve based My ‘Twelve Business Days of Christmas’ on reflective thinking, seeking to learn from experience, making judgements on what has happened, and develop a questioning attitude and new perspectives. We need to identify areas for change and improvement, respond effectively to new challenges, and apply what we have learned to ensure results improve.

The reflective learning cycle is iterative, it doesn’t stop after one rotation, you apply what you learn, then continue to reflect and develop further. Reflecting, evaluating and analysing your own experience of what you did and how you did it over the past twelve months develops your insight.

There is often no right answer, and some things may remain difficult to interpret. How did your actions affect the situation and how did the situation affect you? How do your observations today fit with the benefit of hindsight? Developing your reflective insights means stepping back and taking an honest critique of your own actions, behaviours and attitudes to consider what might be the results of doing things differently.

So enjoy ‘The Twelve Business Days of Christmas’ – but don’t over think the past twelve months, you can’t change the past but you can shape the future. Words make you think, music makes you feel, a song make you feel a thought. It is after all, a great Christmas carol.

Crossing the Atlantic to live and work in New York

Crossing the Atlantic to live and work in New York. Wow, what a sense of entrepreneurial adventure those ten words create! Grasping an opportunity like this, in pursuit of personal development and new professional experience is just as entrepreneurial as seeking to colonise Mars. The entrepreneurial spirit is the spirit of enterprise, an ambition to succeed, initiative in taking action, alertness to opportunity.

So my son, James, 25, a chip off the old block with the same attitude, spark and finely chiselled features as myself embarks on his own adventure, transplanting himself from Cake Solutions software development team in Manchester to the growing team in Union Square, mid-Manhattan.

There are many definitions of entrepreneurship, but I define it as essentially the act of having the ability to recognise an opportunity, shape a goal, and energise your ambition to make it happen. James has grasped an amazing opportunity to shape and write his own entrepreneurial story in New York.

New York’s skyline. Just the shapes, and the thought that made them, the will of man made visible. New York is a wellspring of inspiration, with action, romance, and fascinating strangers lurking around every corner. Ok, he may start wearing sneakers rather than trainers, develop an appetite for potato chips, and takeouts rather than takeaways and crisps, and talk about garbage instead of rubbish, but living in hipsterville Brooklyn is a great place to be right now. A life without dreaming is a life without meaning.

New York, the hustle bustle of the crowds and the traffic, a metaphor for the wrestling of humanity in all its dimensions, a place as tough, noisy and romantic as his home town of Rawtenstall. The Bowery, the High Line, Dominique Ansel’s Cronuts – a croissant and donut hybrid. Oh, but he’s gone there to work and learn too, on some of the coolest, most advanced software and technology you can have today.

Life is what you make it, and the entrepreneurial spirit is vital if you are to step up from the ordinary. The entrepreneurial mindset, taking responsibility for yourself, dealing with the hot-and-the-cold, the nice-to-have and the have-not moments, in harsh (not virtual) reality.

Entrepreneurs know that opportunity is not a game, it’s a race, a test. Taking full responsibility in action. You have to accept responsibility for whatever happens, and you have to make it happen. As every investment prospectus says, past performance is no guarantee of future returns.

The entrepreneurial spirit of leading a startup – or the startup of me – living on your own wits as a solo artist or striking out like James, is the spirit of individualism, the entrepreneurial self, full ownership and initiator of our own goals and actions. We speak of the ‘entrepreneurial spirit’ as a set of character traits possessed by those who perform and live with a clear vision and purpose for themselves. In that sense, the entrepreneurial spirit is something that all of us can and should aspire to, pertaining to the pursuit of goals, self-ownership, and commitment to realising personal ambition.

Those folks holding an entrepreneurial outlook on life are aware that they must not only produce something of uniqueness and value, they also accept, that it carries risk and there is no safety net. Entrepreneurs are aware that economic change and its attendant risks are a fact of life. No one can entirely eliminate risk, but it can mitigated it by continually investing in your own knowledge and skills, making yourself relevant and rooted in the emergent future.

A key element to the entrepreneurial mindset is the need to build and maintain self-esteem, the emotional evaluation of your own worth, a judgment of oneself as well as an attitude toward the self. Self-esteem is made up primarily of two things: respecting yourself and feeling capable. Every adjustment to these states of mind shouldn’t be viewed as a crisis, conscious learning doesn’t require the willingness to see it as suffering self-harm and reducing one’s self-esteem.

Reflection is a way to balance out the emotion. To overcome this self-doubt, you should define and measure your success in your own terms, because measuring success using quantitative measures is one dimensional and provides no insight in future worth or the value of investment put in to date.

At some point, you are probably fully invested – emotion, energy, time – into yourself, and so the concept of quitting, even during the toughest and most frustrating of times, is unthinkable but filling your head like an animated box of frogs. But quitting is not a remote possibility. During this stage of self-doubt, expect your determination to be renewed. Your entrepreneurial self is part of your personal identity now, and your commitment to it as a measure of your personal success is a high driver.

We’ve all had those quiet moments when we doubt ourselves, there are no shortage of black swans, those unknown unknowns.  But let the chips fall on the floor as they may, and do the hard stuff. As long as you’re honest with yourself and deal with it head-on, there’s nothing to fear from self-doubt. Never be bullied into silence. Never allow yourself to be made a victim. Accept no one’s definition of your entrepreneurial life, but define yourself. Build and hold your self-esteem.

The Six Pillars Of Self-Esteem by Nathaniel Branden demonstrates compellingly why self-esteem is basic to entrepreneurial well-being regarding psychological health, achievement, personal happiness, and positive relationships. It was the culmination of a lifetime of clinical practice research and study, and is hailed as the most definitive work on the topic.

Branden introduces the six pillars as six action-based practices for daily living that provide the foundation for self-esteem, and explores the central importance of self-esteem in five areas: the workplace, parenting, education, psychotherapy, and the culture at large.

From a workplace ‘startup of me’ and entrepreneurship perspective, it’s an opportunity for self-reflection – but don’t over analyse. It forms a useful ‘conversation with myself’ structure. One thing that is important to grasp is that self-esteem is an indirect result of what you do. Branden breaks this down into the six practices highlighted below:

Live consciously This requires us to be fully in the present moment. This takes a bit of practice, because many of us are conditioned to disown the here and now, to survive what we have thought that we cannot handle. It’s about being comfortable with yourself, your persona, what you’ve achieved and what you stand for. Respect yourself at all times, what you’ve achieved and where you’re going.

Accept yourself We all have flaws and attributes, but you also have the opportunity to enhance who you are, by accepting everything about yourself. In fact, the only way to enhance who you are is to accept yourself. Don’t try to live in someone else’s skin or adopt their personality, simply be yourself for what you are. Measure your success by your own standards, not others.

Take responsibility for your experiences There’s a piece in the book which says: I have learned to be in conversations where I say to myself, “It comes down to ‘this is where you end, and I begin”. Giving yourself such an affirmation helps you to say what I will and will not experience, and this is quite liberating and fulfilling. Again it’s about asserting yourself to yourself – if you don’t respect you, no one else will. 

Assert who you are Like what you think, feel, believe, need, want and value is genuine, and don’t doubt yourself against some alter-ego or artificial model of what you want to be. Be comfortable with yourself.

Live purposefully Make an agreement with yourself to reach your highest potential, while you maintain balance in your life. You only get one chance, make it happen and realise your potential. Again, don’t covert or envy. Don’t look at the progress others are making, simply focus on your own model, execution and growth.

Maintain your integrity Know exactly what your principles and values are, and stick to them, no matter what others think or do. You started with a clear purpose in mind, don’t lose sight of it – it’s the ‘why I am doing this’ which is a vital reminder when you do hit the brick wall and doubt yourself.

The most beneficial effect of reflecting upon these six pillars of self-esteem is to make you more aware of what is important to you, and to keep honest with yourself. There is nothing irresponsible in choosing another pattern of life that works better. That’s the entrepreneurial spirit. The sense of self-ownership manifests itself in the kind of total autonomy, which involves a sense that the only person one answers to, ultimately, is oneself, to create our own sense of fulfilment and happiness.

In speaking of happiness, I do not mean momentary commercial and monetary success that gives a warm glow of physical pleasure. I mean the kind of satisfaction that comes from achieving the things we value across the whole course of our life. That kind of happiness is not the product of acting by whim or impulse.

I’m sure most of us want to move forward, but by definition, paying attention to the present keeps us where we are. Here’s the key: entrepreneurs spend time building and betting on their future even when there are more important things to do in the present. In other words, and this is the hard part, if you want to be productive in the future, you need to spend time doing things that have no payback in the present.

It’s up to you to go for it and make up your own mind. No one else can think for us, it is our responsibility to choose our own direction by first-hand thought independently. It is only these virtues that can help us navigate through the rolling waters of personal and business life. The entrepreneurial way of life is the human way.  The entrepreneurial spirit is a gift that inspires you to become the best you can be, the best version of yourself.

It’s all about knowing yourself, your capabilities and stretching yourself, being unreasonable with aspirations to achieve, competing against yourself, a trait you see in all entrepreneurs, the restless, relentless pursuit of achievement, stepping outside the comfort zone into the learning zone. I’m minded by Daniel Pink’s book Drive, and the role of intrinsic motivation, the kind that comes from within yourself, and the three elements of the motivation formula he identifies – autonomy, mastery, and purpose.

Autonomy Our self-direction is a natural inclination. Pink asserts we’re all built with inner drive, some folks are just in a higher gear than others. James has never been passive and inert, he’s always gone hell-for-leather and go the extra mile as standard. Apparently this is because he has what Pink calls ‘autonomy driven motivation’. He’s curious about what he can achieve as a challenge to himself.

Mastery We want to get better at doing things. It’s why learning a language, new sporting technique or a musical instrument can be so frustrating at first. Mastery is the desire to get better at something that matters. Firstly, it is a mindset, in that we believe we can get better. Second, mastery is a pain, in that it involves not only working harder but working longer at the same thing. Finally, mastery is an asymptote, or a straight line that you may come close to but never reach. Learning is lifelong.

Purpose People who find purpose in their life unlock the highest level of the motivation game. Pink says that it’s connecting to a cause larger than yourself that drives the deepest motivation. Purpose is what gets you out of bed in the morning and into work without groaning and grumbling — something that you just can’t fake.

So, as I look some 3,300 miles to the west, I’m minded by the words of Michael Stipe: It’s easier to leave then to be left behind. James, you’re doing it for yourself, so make it matter where it matters most, inside.

Entrepreneurial learning journey: equal parts flour, eggs, butter, sugar & perspiration

The Great British Bake Off ended last week with a nail-biting final that proved a triumph for Candice Brown. Mel Giedroyc brought the last bake to a halt by announcing: You can do no more ! You’ve finished! However, the climactic Showstopper Challenge failed to feature the one dessert I craved, namely, a custard pie. Being slammed in Paul Hollywood’s face. What a tart.

The GBBO shows all the traits of any great entrepreneurial endeavour – stepping outside of your comfort zone, being tested time and time again, and having to make spontaneous decisions in a challenging environment. Whilst it’s reality television, the situation created in the bake-off tent reveals many parallels to startup life.

There were three challenges: the Signature Challenge was to make a family-sized meringue crown; the Technical Challenge was to make a Victoria Sandwich, which seemed elementary, and the Showstopper Challenge was a picnic hamper consisting of forty-nine items – sausage rolls, quiche, scones, fruit tarts, and a chocolate cake.

The final was close, with all three bakers in contention as they approached the Showstopper. Andrew Smyth was the boyish aerospace engineer from Ireland with ambitious ideas and ambitious shorts; Jane Beedle was the maternal, traditional contestant, a garden designer with two kids and an interesting haystack hairdo, with which I readily identified.

Finally, Candice Brown, famous/notorious for sending more time fixing her appearance than fixing her ingredients, and as Mary Berry put it, ‘liking to do things over the top.’

The bakers had a mammoth five hours to make twelve puff pastry sausage rolls, twelve mini quiches, twelve savoury scones, twelve fruit and custard tarts, and one plain chocolate cake. Mel and Sue shouted Bake! for one last time. Andrew is so nervous he drops his bowl, but it didn’t shatter.

In the Signature Challenge, Jane made three tiers of meringue – a Pavlova with strawberry and raspberry compote, blueberry compote, and white flesh nectarines. Candice went a little further and made two different meringues. The three layers contain Prosecco-soaked strawberries, mango curd, gold-dusted physalis and glittered pistachios. Then there was a fourth tier inspired by the tiny crown of Queen Victoria.

Andrew somehow managed to stick his pecan praline to the wrong side of the baking paper where it became glued solid. His victory in the Technical Challenge meant he was back in the game, but his Signature Challenge did not turn out well thanks to that cursed pecan praline.

Candice’s Queen Victoria Meringue Crown on the other hand was remarkable. Paul bestows upon her the highest accolade: the Hollywood handshake. Candice squeals in the manner of a teenage girl at a Justin Bieber concert. Andrew is like the only kid at Christmas not to get a cracker.

The edginess around the Victoria Sandwich was palpable. A Victoria is all about having exactly the same amount of the ingredients – I should know, my wife bakes World Class Victorias every week – but the contestants were given no measurements. Equal parts flour, butter, sugar, eggs and tears today.

It’s 259 grams of everything asserted Jane. Quite precise. For the jam, her ratio of sugar to raspberries is 50-50. Andrew has only half the quantity of sugar and is following his grandma’s recipe from memory. Candice’s ratio was 350 grams to 150. Who knew jam could be so controversial?

Candice over-cooks her sponge cake, which the judges frown is too dark on the top. Her jam hasn’t set and is really a jelly not a jam and the buttercream is quite grainy. Fussy. Apart from that it’s fine.

The Showstopper is a picnic fit for her Majesty. To produce such an (absurd) array of different food Andrew has a spreadsheet detailing what he should be doing in every five-minute block of the whole five hours. The amount of multi-tasking going on here is mind-blowing, remarks Andrew. If I didn’t have a plan I’d be flapping.

As time passes, Andrew starts flapping, skipping round frantically in his alarming shorts and boyish cheeks getting redder and redder. But Candice nails it. I loved her little piglets, her sausage rolls filled with black pudding, which have peppercorn eyes and a curly tail made of crackling. Aside from that, her bravery by putting rhubarb into her custard tarts is the ball-in-the-back-of-the-net moment for Mary and Candice’s ambitious bakes.

Candice could bake, but raised the stakes with a combination of her technical skills, her artistic flair and her strawberries soaked in Prosecco. In the second week, she wowed with a cake model of her parents’ north London pub. It was authentic in every detail, right down to the sticky (gingerbread) carpet. Over the three-months of competition, cockney Candice became the Eliza Doolittle of the GBBO tent, cheeky and spirited, determined and passionate, showing undoubted entrepreneurial flair.

This was the winning spectacle of ordinary people surprising themselves by doing extraordinary things, with a dash of eccentricity thrown into the mix. It was a humdinger of a Showstopper. I’m reliving memories of all the TV cooking shows I watched, from Fanny Craddock to the Galloping Gourmet to Delia, Rick Stein and James Martin.

For me, to win GBBO you have to be resilient and brave. There’s something inspirational about seeing the level of contestants’ effort and passion laid bare and vulnerable. Each contestant struggles with the constant presence of the challenge to their ability and confidence, triggering anxiety.

Under pressure, the dignity of someone utterly wholeheartedly committed to his or her craft is incredible to watch. This is competitive cooking that is hard to imagine, and they produce unbelievable dishes. The effort really gets to me, by committing to their goal, they truly expose themselves. By trying so hard, they leave no room for comfort should they fail.

As always, there are several lessons we can take into our startup business thinking from observing entrepreneurial endeavour in a non-business environment:

Be clear about your vision, the big picture and the end product Contestants visualise the process and their end product. The same applies to business outcomes. We need to use our imagination to create our vision and visualise our goal, to see it, taste it, feel it, smell it and keep it in our heads at all times through the ‘cooking’ process. The Lean Startup advocates holding the vision but pivoting on the detail, which is a good approach to crafting a forty-nine-piece picnic!

Strategise before filling the pans The contestants have to think through each and every small activity from the ingredients they require, to the time allocated and presentation. Little time is given but it has to be quick, effective decision making. Having a clear and agile strategy is also key to a startup founder.

Processes deliver productivity Cooking to a recipe is very much following a process with instructions. In a startup, ambiguity or inaccuracy can lead to wildly varied quality and results. The importance of including detail and clarity in a process so that the same results can be delivered every single time is a key element to successful scaling a business.

Customers have different personalities Mary is kind, wants them to succeed but is firm and professional. Paul is sometimes sarcastic and quick to criticise, but had plenty of heart too. Occasionally lessons come at you in a loud, angry voice, others supportive but still critical. You can focus on the anger or you can hear the lesson.

Keeping it simple can be the best option Sometimes the contestants tried to take it too far, using a particular ingredient just to be different. Occasionally it works, but it’s a risk and the competitor with the simple, well-prepared dish rarely goes home. Experimentation and testing are good startup business principles, but so is the discipline of an MVP.

Have a Plan A and Plan B After strategy, to obtain the desired culinary result, a good plan is needed. Kitchen malfunctions highlight the need for agility, to be able to respond quickly and have a contingency, unplanned events having adverse impact occur. The ability to recognise these risks and to respond with a back-up plan to pivot in an agile way is vital.

Stay cool when the heat is on What happens when the dish doesn’t turn out as expected? Yes, you have a Plan B, but Plan B is now under pressure and there isn’t time to deliver fully. You have to stay calm and present what is completed with conviction, even if failure is on the back of your mind, go with what you have. The build-measure-learn principles of Lean Startup apply here.

Be goal-oriented and time-aware As the saying goes, If you can’t take the heat get out of the kitchen. In each GBBO episode the challenges have clear goals, but a ridiculously short amount of time to complete. The contestants are motivated to win, but it’s remarkable how much pressure the contestants put themselves under to achieve success.

Leave yourself enough time to test the final product Contestants are often asked Have you tasted it? and often their response is No. Sometimes such trust in their own ability pays off, sometimes it doesn’t. It’s a big risk to take in business. Leave yourself enough time to not only put the final product together (plate it up) and make sure it works, but to also test it.

GBBO is a good example of stepping out of your comfort zone as entrepreneurs do everyday. It’s important to push the boundaries. But what is the ‘comfort zone’ exactly? Simply, your comfort zone is a behavioural space where your activities and behaviours fit a routine and pattern that minimise stress and risk. It provides a state of mental security.

The idea goes back to an experiment in 1908, psychologists Robert Yerkes and John Dodson explained that a state of relative comfort created a steady level of performance. In order to maximise performance, however, we need a state of relative anxiety, a space where our stress levels are slightly higher than normal but not such that they are destructive.

This space is called Optimal Anxiety, and it’s just outside our comfort zone. Too much anxiety and we’re too stressed to be productive and our performance drops off sharply. The idea of Optimal Anxiety is familiar to the GBBO competitors and anyone who’s pushed themselves to get to the next level to accomplish something. I call this the learning zone.

We all know that when you really challenge yourself, you step up and can deliver amazing results. However, pushing too hard can cause a negative result. I call this the panic zone, where you are unable to think logically with any structure, the box of frogs has opened in your head, your thoughts are jumping everywhere. After this, is the blind panic zone, where you really are uncomfortable, there is no semblance of order, simply a stream of unhelpful random consciousness.

As an entrepreneur, you should operate with optimal anxiety in the learning zone, that place where your mental productivity and performance reach their peak.

So ask yourself:

  • Have you identified what the next level of startup success looks like?
  • How often do you review how you’re performing, examining what’s working and not working? Too often we focus on what is being done as opposed to how it’s being done.
  • When is the next opportunity to learn some new skills?
  • When do you envisage you’ll next get out of your comfort zone to embrace a challenge?
  • Why not create a crisis in your startup to create a learning moment?
  • Are you curious, constantly looking to learn about your customers?

Startup life does occasionally throw eggs at us. We have to be ready with our oil and seasoning, and then hey, the world is our omelette.

Whether you love or loathe GBBO, the tension and the temperamental chaffing of the competitors, there are great personal and business lessons to be gleaned from cooking under pressure in terms of pushing the boundaries of your comfort zone.

Stepping out and becoming comfortable with the unfamiliar and the unknown, pushing and stretching yourself provides new perspectives by taking risks and making yourself a little scared. I’ll push myself time and again to learn and experience new things. Optimal Anxiety is the only place to be.

Startup founder lessons from the Brownlee brothers

The picture of Alistair Brownlee giving up his own chance to win the Triathlon World series in Mexico, and helping his brother Jonny over the line, evoked strong emotions of two brothers in arms.

With the 1500m swim and 40km bike completed, Jonny and Alistair were out on the road on the run in front, battling for gold and silver. Then Jonny uttered one word to his brother – ‘relax’ – and Alistair, who interpreted it as a sign of weakness, attacked to retain his title. Jonny kicked on, and surged back into the lead.

One moment Jonny was striding to victory, the next his legs buckled beneath him as extraordinary effort took its toll. Just as Jonny stumbled like a drunk off the track, elder brother Alistair swooped to the rescue, hooking his arm around his shoulder and helping him to cross the line in second place. Jonny then slumps to the floor, spent from dehydration.

It was a natural human reaction to help his brother, but even so, the display of loyalty was incredible. It was a vital intervention. Jonny’s condition was serious enough for him to be taken to hospital, missing the podium presentation.

In their autobiography, Swim Bike Run, the Brownlee boys are humble on their fantastic achievements in the world of Triathlon. The Triathlon seems an exercise in torture to me. A 1500m swim, a 40km bike ride and a 10km run, all taken without a break. To achieve this at any level is a fearsome task.

Swimming and running in competition as early as nine with cycling vast distances a hobby, their competitive instincts and sibling rivalry were established. Despite this, they raced as a team versus the rest. The detailed account of their drive for success in Swim Bike Run, is extensive and meticulous, describing their development from schoolboys to standing on the Olympic podium. The sacrifices, hard work, intrusions on personal life are all here. It reminds me of the tenacity shown by startup founders.

The Brownlee brothers are incredibly driven, and very smart, particularly in terms of the emotional side of their relationship, and how to think positively in challenging situations. Working collaboratively despite competing with each other, they epitomise the old saying, ‘two heads are better than one’, pushing each other in training and racing.

This collaborative style holds true for those wanting to found a startup – a recent study showed that 80% of all successful startups have more than one founder. Even if you think you can reach your goals on your own, the truth is that you’ll have a much better chance of success with at least one co-founder to help build your business.

Research shows start-ups with co-founders are four times likely to be successful than those going solo – quite a strong case for forming a double act. From Larry Page and Sergey Brin (co-founders of Google, 1998), Steve Jobs and Steve Wozniak (Apple, 1976, and Bill Hewlett and Dave Packard who came together in 1939, these founding duos clicked because they had similar personality types with an insatiable curiosity, and strengths that complimented each other.

It is the shared mind-set and skill-set that captures the essence of what makes entrepreneurial duos work. For example, Francis Jehl was Thomas Edison’s lab assistant, starting work at the Menlo Park research facility as an eighteen year old straight from school. After the completion of Jehl’s first assignment, Edison noticed Jehl’s work ethic and was so impressed that he started to work collaboratively, so much so that Jehl worked on the electric light during the lab stage of development.

During the next two years, Edison regarded him as a partner, entrusting him to take his electric light innovation to Europe and exploit it commercially. Jehl kept a personal diary, detailing some of the exceptional things that he worked on with Edison, captured in his book, Reminiscences of Menlo Park, published fifty years afterwards.

Whilst Edison regarded Jehl as a co-founder, not all entrepreneurs need an ally, but as seen, many successful startups are built by multiple leaders with productive relationships. What made their combined skill-sets a successful collaboration? There is a common trend: the most well-rounded co-founders recognised their individual limitations and respect what the other brings to a partnership. Here are the traits of what makes these co-founder relationships tick.

Focus on what you’re good at Dividing workload based on complimentary yet different skills gives focus and productivity, a focus of effort based on mutual strengths means you’re able to progress the day-to-day work while continuing to evolve many aspects of the business. A co-founder can help complement your skills and fill in the skills gaps in a way you’ll never be able to do on your own.

Double your odds While having a business partner is second best to having a carbon copy of yourself running around, it doubles your odds of being in the right place at the right time. Having someone you can trust with the same level of integrity and passion as yourself is a huge advantage and enables a ‘I’ll work on whatever you’re not working on’ philosophy to getting two things done at once. It simply doubles the bandwidth.

Provide you with a sounding board and companion on the start-up journey Starting a business means a bumpy road may appear on the horizon at any point, and it can be a lot easier to handle those bumps with a co-founder. Advisors and mentors are valuable, but there is nothing like being able to talk to someone who is sharing the experience, facing the same risk, the same problems, and the same potential upside.

Serve as a backstop when you have an off day We all have days when we are just not at the races, having a co-founder provides a backstop for those times, even for the simplest of matters. Sharing both the physical and mental workload with someone you can trust, and is just as invested as you, makes the journey slightly less frantic.

Gain new insights Two heads are better than one, most likely your co-founder will have a different set of experiences and competencies from you. You should be open-minded to share and utilise these experiences for the benefit of the business. It is always advantageous to view your startup from the filter of another because we are often limited by our own perspectives.

Also, by having another perspective we are not blinded by our innate biases. In the kaleidoscopic melee of day-to-day, it’s easy to overlook potentially important details or tasks because our judgment has been clouded by our own worldview, fears or when we give in to complacency.

Spread the risk and improve contingencies Most ‘solopreneurs’ start out with the mindset that they can achieve their goals – until reality sets in and they find themselves stuck in a spiral of masses of work to be done. Having a co-founder allows for discussion of priorities, a change in direction or a new approach, feedback which opens up possibilities in times of turbulence and an extra set of skills to push the enterprise past its limitations of a single decision maker.

Make better decisions Whilst recognising the upsides of a co-founder, there won’t be consensus all the time. In fact, it’s better when you don’t. A certain level of discord and tension means that you’re both championing opposing views. This creates an opportunity to discuss the merits of each viewpoint and ultimately decide which direction is better.

Balance the extremes and point out the blindspots Entrepreneurs just want to get things done, often in a hurry and always moving forward, but it helps to have a balance to caution this enthusiasm at times. We all have blind spots, and having a co-founder that can point out these blind spots so you can improve, opening your eyes to things you might not see, is undoubtedly beneficial.

So having identified the benefits of working with a co-founder, what are the criteria for selecting a partner? There are some fundamental aspects that make this relationship work, and should be clearly shared openly as part of the dialogue when discussing a joining-up of minds.

Collision on vision You wouldn’t marry someone you’d just met, so you should date first to check in on fundamentals that will form the bedrock of the relationship and the business – What is our vision and purpose, what are our personal goals for the startup? 

Though these may change over time, its helpful to get a sense of what each co-founder seeks as success outset, where there is common ground and you are aligned and synchronised, and where there is difference. You need to connect at a values, ambition, trust and philosophy perspectives – chose a co-founder like you would a spouse.

Aligned motives If one founder wants to build a cool product that makes a difference, and the other one wants to make money and be famous as their motive, it won’t work. Pay close attention and unearth true motivations, which are unrevealed, not declared.

If you have one co-founder that wants to build a sustainable business that is spinning off cash and run it forever, and another one wants to shoot for high growth and an exit, it’s better to get that out in the open early and talk it through.

Play a couple rounds of monopoly together, just to see how you both react to opportunity and adversity – and if there is humour in the relationship. There are of course other such ways to gauge this but don’t co-habit without dancing together socially first, doing something outside of work with your potential future partner may be eye-opening.

Intelligence, energy, and integrity It’s not the smart kid you knew at school, it’s not the person you like the most, it’s not the hacker most willing to work for free. It’s someone of high intelligence, energy and integrity you want. You’ll need all three yourself to evaluate your co-founder.

If it doesn’t feel right, keep looking, don’t compromise, keep looking. The founders set a company’s DNA, and its culture is an extension of the founders’ personalities. Make sure there is a tight fit.

One builds, one sells The best builders can prototype and even deliver the entire product, end-to-end. The best sellers can sell to customers, partners, investors, and employees. Looking at the successful duos earlier in the blog, this seems to be the ideal co-founder mix.

The seller doesn’t have to be a salesman, they can be technical, but able to influence. Bill Gates and Steve Jobs aren’t salesmen, but sellers of vision, passion and innovation.

Future skills matter more than present skills It’s impossible to judge the potential skills of a person on day one. So instead, while we don’t predict future skills, avoid giving too much importance to current skills. Startups demand different sets of competencies at various stages in their journey – being a CEO of a startup means being the Chief Everything Officer initially – co-founders need to be fast learners in order to acquire new in-demand skills.

Get personal The underlying question here is Can the founders work closely together for an extended period without killing each other? If one or more of the founders has some ‘tic’ the others don’t like or if there’s some odd feelings there, it might be overlooked in the rush to include people on the team who have a particular skill. Basically, can you spend 24/7 time together and have trust, tolerance, space and stretch when needed?

What it’s like to share the highs and lows, the successes and the failures, and the feeling of having someone alongside you, shoulder-to-shoulder all the while confident they think the same way? That’s what the Brownlee brothers have created with their special bond. Whilst startup founders aren’t racing against each other, they have to be supportive, just like Alastair and Jonny.

Alistair Brownlee’s heroic gesture of giving up the chance to win the World Series Triathlon event in Mexico to help younger brother Jonny over the line was a fantastic piece of teamwork in a very much solo sport. It captures the essence of camaraderie needed between startup founders.

By implicit mutual personal support and rapport, merging their disparate talents and idiosyncrasies, effective co-founders sync when it comes to the course they co-charted. That kind of strategic cohesion is the secret sauce behind many successful startups, so try to create that serendipity in your own startup enterprise with your co-founder.

As a startup, think ‘win-win’ as your negotiation strategy

Detective Constable Endeavour Morse, Scotland Yard’s chief negotiator, picks up the phone. He has established contact with the kidnapper who has barricaded himself and two hostages inside The Old Bookbinder’s Ale House, Oxford.

Morse’s task is simple but challenging: extract the hostages without losing any lives. After a couple of tense phone calls, he knows the protagonist, his motive and his demands. Morse plays it calmly, using a combination of containment, empathy and hostage negotiation tactics.

In face-to-face dialogue over the next two days, Morse articulates to the hostage taker his purpose. He seeks to build rapport and adapts his conversation to the hostage taker’s vocabulary. He’s supportive and encouraging, disarming the hostage taker, He listens, trades concessions, working towards a deadline.

After three intense days of back-and-to negotiations, Morse achieves successful resolution, convincing the hostage taker to come out on his own with as much dignity preserved as possible, hostages unharmed. Crisis over.

You might not think startups have much to learn from Morse and his situation, but there are valuable insights. The stakes are clearly different in startups than in hostage situations, but the techniques researched from the best hostage negotiators will help startups overcome one of their most challenging hurdles – none more so than closing the deal with your first customer.

The negotiation itself is a careful exploration of your position and the other person’s position with the goal of finding a mutually acceptable compromise that gives you both as much of what you want as possible.

Of course, in hostage situations this is often not the case and a standoff arises, whereby one side must give way and compromise if there is to be a resolution. The scale of this can often be regarded as a climb down and a defeat, and the negotiation becomes a confrontation with no goodwill, a battle of attrition often leading to an unpleasant outcome on both sides.

This needn’t be the case In business, a ‘win-win’ position should be sought where ultimately both sides feel comfortable with a solution acceptable to both parties, leaving both feeling that they’ve taken away something positive from the discussion.

So let’s look at three practices from classic hostage negotiations that offer insights and learning for startups – preparation, style & structure, and use of silence.

Preparation

As with any aspect of business, preparation is always appropriate as it strengthens your position by thinking through the key points before you start negotiating:

Set goals – but see the situation from all angles What do you want out of the negotiation, what do you think the other person wants? Prior to the discussion, make sure you are clear on what you want as well as your ‘walk-away’ point – the minimum outcome you’re willing to accept. Try to understand where the other person is coming from and their objectives.

Set your limits before the negotiation begins. You need to prioritise what items are most critical and what you absolutely need to have to make a deal. Avoid playing split-the-difference on the spot.

Consequences & alternatives If you don’t reach agreement, what alternatives do both parties have? How much does it matter if you do not reach agreement? Does failure to reach agreement cut you out of future opportunities? What are the consequences for both parties? Based on all of the considerations, what possible compromises might there be?

Ask for what you want, but what will you trade? Don’t be afraid to explain your objectives and what you’d like as an outcome, but do so in a non-confrontational tone of voice. What do you and the other person have that you can trade? What are you each comfortable giving away?

Plan ahead to ask the right questions Perhaps most importantly when preparing to negotiate in a hostage situation is asking ‘What do I not know?’ and this applies to business. Effective negotiations are rarely spontaneous. Taking time to analyse the situation, and to think through your strategy is critical to negotiating success.

Ask yourself what you’re most worried about. For example ‘What is the question I really hope they don’t ask?’ and start preparing your potential response.

Think win/win, and remember that there is always tomorrow Don’t have a mindset that one must walk away a winner and the other a loser, be open minded to working together to determine ways to meet the needs of both parties. Envisage what this outcome looks like, and see the discussion from the other side of the table. This is key in getting into a dialogue with a hostage taker.

If the discussion heads in a wrong direction and you get to a cul-de-sac, it’s OK to recommend picking up the discussion on another day, after everyone has an opportunity to take a step back, reflect and rethink. Don’t think you need to force an outcome at the first meeting.

Style & Structure

Your strategy of how you intend to conduct the negotiation process is important, to ensure you have both a style of communication and also a structure to progress towards the outcome you seek.

State your purpose It’s crucial to make the other person feel like you’re working with them, not against them. This is hard to pull off in normal hostage negotiations.

Start the discussion by stating an ideal outcome that you consider to be in both parties’ interests, showing immediately you’re striving for a win-win deal – it’s a transparent opening statement of your thinking.

Be honest, but direct Playing with the truth can quickly backfire. From a practical standpoint, if the hostage-taker feels he’s being patronised or manipulated from the outset, he’s not going to cooperate. Speak with respect, directness, authenticity and integrity.

You should be transparent about compromises you’re offering. Concessions often go unappreciated and unreciprocated, so highlight their value. On the flip side, don’t pretend an easy-to-make compromise will be hard, as it will stop being believable if you make every concession seem huge.

Also, don’t misrepresent your terms or oversell your product. The prospect could easily uncover your lies with a little digging.

Build genuine rapport Creating rapport is essential, after all a prospect is far likelier to become a client if they feel a connection with. You’re going to have a much easier time negotiating with someone who respects and trusts you.

Build rapport the way hostage negotiators do by matching the other person’s way of speaking. That means using the same words and phrases, talking at a similar pace, and echoing their style to create a genuine connection.

Be an active listener You may think good negotiators spend most of the conversation talking, but it’s the opposite, they spend the majority asking questions and listening. Learn to listen. Ask probing questions to reach deeper understanding of the other person’s position. The real art of negotiation is to build trust and rapport, listening means you’re gathering information. Spend more time listening than talking to understand intent.

Be prepared to ask for what you want, but then reciprocate You have to be willing to make the ask for what you want. You have to be first to place value on yourself. You have to go in with your goal, and know where your fall back is going to be and what your alternative strategies might be.

Honesty is how to negotiate everything. It is important to lead with honesty so you can start to figure out what that person wants. Be transparent about what success looks like for you, but then follow this up immediately with a reciprocation that balances with what you see as a positive outcome for the other party. Make them feel comfortable so that they know you are clear in looking out for both parties’ interests.

Develop relationships, not conquests Win-win is the key to longevity of a business relationship. Long-term positive outcomes are achieved when everyone is fully committed to implementing a negotiated agreement so ensure the other party knows two things – firstly, you care about their interests – just as you care about your own, and secondly, you respect them.

Stay calm Hostage takers are usually unstable emotionally, but the negotiator must stay completely calm. Reacting only pushes a hostage-taker further over the edge. The more emotional you become, the more clouded your own thinking will be, and whenever you show emotion, you tell your prospect they’ve struck a nerve.

The person who stays calm and composed usually gets the upper hand, so controlling your physiology is key. If breaking for five minutes to ‘get some air’ isn’t possible, then shift the focus. For instance, if you’re getting frustrated haggling over a specific item, move to a different point and offer to return to it later in the conversation.

Embrace conflict quickly. Often in our discomfort with conflict, we procrastinate talking about divisive issues. In the meantime emotions escalate, making it inevitable that when we finally open up the dialogue it will degenerate into negotiating games rather than collaborative problem solving. You can minimise unnecessary escalation by engaging sooner rather than later.

Using Silence

Perfecting the art of silence in negotiations can give a serious advantage if used wisely. We live in a world of noise where silence has almost ceased to exist to an extent that silence becomes awkward. We also live in a world of growing impatience. We do not pause enough.

Silence is uncomfortable for many people. They expect words from you more than silence. Most people cannot actually resist silence, and so in negotiations it can be a way of putting the other person off their stride.

In some instances, silence pushes the other person to fill in the void, share more information and show their position in greater detail than planned. Against this, silence empowers you, Be silent or let the words be worth more than silence as Pythagoras said. People talking too much may give the impression of justifying themselves. The less you talk, the deeper you look.

Silence gives attention to your words and creates impact, it is important to have pauses to follow your sentences. Silence between sentences gives more clarity to your speech. Silence can also help gain or regain more attention when someone is monopolising the conversation. As Mark Twain once said The right word may be effective, but no word was ever as effective as a rightly timed pause.

Master the art of silence and play this subtle game. Speaking too much and not at the right time can weaken your position. Silence helps you to keep control. In hostage negotiation situations, silence can unnerve the other side such they lose the focus on their strategy.

For me, the bigger picture for a startup negotiating its first customer contract is about building, nurturing and forging valuable relationships. This first opportunity may be right to close, it may not be. Opportunities come and go, so It’s about reaching bona-fide, transparent agreement, finding solutions to tough problems, and learning to get what you want and need for yourself whilst creating value and success for your prospect. Being an effective negotiator helps you find and keep balance – and isn’t that what we all want to be happier and healthier at work?