| By
Craig Winn
Craig Winn, founder of e-tail store Value America, offers some hard-won
insights on starting - and running - a business in these troubled
times.Lately you've been thinking of starting a business.
You've done your research, written your business plan and figured
out how much money you need. Unfortunately, the world seems to be
conspiring against you. First, the country is in an economic slump.
Second, in the wake of Enron, Global Crossing and other corporate
scandals, there's a lot of free-floating distrust out there. Both
of these issues lead to a really big problem: there just isn't much
venture capital to be had right now. Still, you're ready to take
the leap - so how can you overcome the obstacles and increase your
odds for success?
Well, it wouldn't hurt to take a few lessons in entrepreneurship
from someone who knows firsthand. Craig Winn - founder of the now-defunct
e-tail store Value America (once a three billion dollar darling
of Wall Street) and co-author, along with Ken Power, of the new
book In the Company of Good and Evil) is the perfect example of
such a teacher. After all, he built one of the fastest growing companies
of all time and experienced one of the single greatest calamities
in corporate history.
"Because I've been through the fire myself, I have a deep and
personal understanding of what to do and what not to do when starting
a business," he says. "My book details many of these points.
And, if there's one thing I've learned over the years it's that
the problems faced by one business are the same problems faced by
all businesses. Certain principles are universal. That's why I believe
entrepreneurs should know and learn from the Value America story-perhaps
more than ever before in today's post - trust environment."
When you're starting a new business, you must assemble a diverse
team of players: investment bankers, lawyers, auditors, corporate
partners, board members and, ultimately, managers. The companies
and individuals with whom you align yourself will determine the
fate of your fledgling company. " That's why," says Winn,
" it's imperative that entrepreneurs "get it right"
from the start. In light of this principle especially in light of
our "post-trust environment" he offers the following tips:
* Know when to ignore conventional business wisdom.
For instance, says Winn, conventional wisdom asserts that the pioneers
with the ability and passion to build value from ideas are often
the wrong people to manage day-to-day operations. This is not always
true. In fact, the beginning of the end for Value America may have
been when its founders turned the reigns over to "professional"
managers. This was a case in which conventional business wisdom
should have been ignored. The lesson for entrepreneurs: pay attention
to your gut instinct. Your company is your baby - and you know what's
best for it.
* Know when to trust - and when not to. This point
is especially germane in today's environment of skepticism. Unfortunately,
as the incidents of betrayal throughout In the Company of Good and
Evil attest, it's all too easy to be misled." The number one
way to find out whether you can trust a person or a corporate partner,"
says Winn, " is to observe what they do when the chips are
down. Do they bail on you, or do they stay and fight? True nature
is revealed during the dark times, not just integrity but ability.
And there are plenty of ‘dark times’ at the birth of
a new business."
Seek out symbiotic, mutually beneficial business relationships.
That means ensuring that your partners have "skin in the game"
- in other words, make sure they're invested in your success. Why
would someone work hard for you if they have nothing to lose or
gain? Get involved in helping your partners find solutions that
work for everyone. Treat them with the same respect you do your
customers: under-promise and over-deliver.
* Select your management team with great care. The
decisions you make about managers will profoundly impact your business.
Choose well and you leverage a wealth of valuable abilities. Choose
poorly and running your company will be like rowing up a waterfall.
Remember that success is all about funneling energy to a common
goal. Be certain that every member of your team has a strong sense
of working for the collective good and not for individual self-interest.
A few more tips from Winn:
* Choose character over experience. Choose heart over head.
People can be trained to do a job. However, you'll never instill
integrity in someone who doesn't already have it.
* Watch out for signs of insecurity. What is insecurity?
Basically, it's low self-esteem covered up by a superiority complex.
Insecure people have only one agenda: the elevation of themselves
at the expense of others. Their presence will destroy your business
like a cancer.
* Establish roles before you hire. Every senior
executive should be hired with a clear understanding of each party's
responsibilities and benefits.
* Networking is the best way to find great people. Due
to legal constraints, it's almost impossible to find out someone's
background by calling former employers. This is why the old "it's
who you know" adage is true. People you know and trust tend
to recommend people they know and trust.
* Lawyer assisted employment agreements create divergent interests.
Your company should have complete freedom to let an employee go
the minute there becomes a dichotomy between corporate interests
and personal behavior.
* Understand what motivates your partners. As an
entrepreneur, you probably want to create value. But do not assume
that everyone has the same motivation as you. Investment bankers
and lawyers are motivated by greed, says Winn. Their actions will
often stand in the way of the success of your business. Furthermore,
these types rarely have real-world business experience; their "golden
boy" status comes from making good grades in school.
"When I was building Value America, I often found myself in
a game of chicken with lawyers and auditors," says Winn. "And
in many cases, I prevailed. But that's only because I really understood
the issues at hand. As I said before, do your homework and you'll
know where the boundaries are drawn."
* Realize that board members must have a stake in your company.
"Again, the number one requirement is that each board
member has a personal stake in the game," says Winn. "It
has become increasingly popular to pay board members for serving.
I think this is a mistake. The truth is that board members work
much more effectively when they have money invested in your company
and therefore want it to succeed over the long term. And hold them
accountable for the decisions they make. Board appointments have
the potential for creating immensely valuable strategic partners
- or, as I learned in my experience with Value America, they can
bring down a promising company."
* Get the big guys to fight over you. Remember
this truth about human nature, advises Winn: A big fish won't do
much to catch a little fish, but he'll swim to the ends of the earth
to keep another big fish from catching the little fish. In other
words, it pays to set up a sense of competition between such players
as investment bankers and accounting firms. Find out who the industry
leaders are and, with supreme confidence, let them know you're "shopping
around." (It's the same principle that makes a romantic partner
more interested when he or she knows someone else is also interested.)
During these dealings, always be scrupulously honest about your
background, even if it involves some failures. Most people will
respect the fact that your experiences and lessons are valuable,
because they teach you what not to do in the future . . . which
is usually just as important as what you should do.
*When negotiating, be bold and firm. It's very
important that you negotiate from a position of strength. Firmly
state the deal you want up front. Always remember that it's hard
to negotiate backwards. Don't even try.
* No matter who you are negotiating with - bankers, lawyers,
auditors, vendors - do your homework. (They will certainly
have done their homework on you.) You need to know what they can
and can't do so you'll know when it's appropriate to push and when
to back down. For example, all auditors will negotiate a fixed rate
for multiple years for tax filing and SEC work. They don't like
it - they prefer an hourly rate - but they will do it.
*Understand that accrual accounting involves what Winn likes to
call "fuzzy math." It is outcome-based and everything
else is no more than opinion. This provides lots of room for negotiation.
Ultimately, says Winn, if you have a dream you totally believe in,
you should pursue it - regardless of the fact that our current business
environment is less than ideal.
"Before we made the errors in judgment that ended up bringing
down Value America, we were building a great company," he says.
"I believe it was a wonderful idea and was founded by some
wonderful people. So, despite all that happened, I do not regret
any of it. You can choose to look at our post-trust environment
as an opportunity - an opportunity to break the bonds of cynicism
and fear that so many people are held captive by right now.
"Entrepreneurs can still work selflessly toward a larger goal
and succeed," adds Winn. "In fact, we must. It's the only
way to save corporate America."
 By
Dick Biggs
"To fix your messengers, fix your message."
Harry Beckwith, Selling The InvisibleThe combination of Marketing
and selling is like a good marriage. While there are differences
between husband and wife, they form a formidable team when they
work together. Likewise, for a business to succeed, marketing and
selling must complement each other, even though there are major
differences between the two concepts. For example:
Marketing is about the message. Selling is about the messengers
who represent the products and services proclaimed by the message.
Marketing is what you do to keep your products and services in front
of prospects and clients so they think of you when they're ready
to buy. Selling is the exchange of money for a product or service.
Marketing isn't about who you know; it's about who knows you! Selling
isn't about pressure; it's about problem-solving.
The "magic" of marketing is in the mix of ways you keep
your products and services in the mind's eye of the public. The
"secret" of selling is in the search for how your products
and services will provide successful solutions to the problems of
the marketplace.
Marketing costs you money and usually takes a lot of time. Selling
should make you money and often occurs in a brief time span.
Marketing establishes your brand, or who you are in the marketplace.
Selling extols the benefits of how your products and services will
solve problems for your clientele.
For instance, my brand is The A-Line-Ment Specialist (TM) because
I help employers boost bottom line profits and better the top line--people
and their productivity. My benefits are the specific ways our keynotes,
seminars and resources help employees develop professionally (bottom
line topics) and grow personally (top line topics).
Obviously, any successful organization must be good at marketing
and selling. The two concepts are a skillful blend of company identity
with the identification of markets that will benefit from your products
and services.
What are your markets? How are you marketing your products and services?
Are your salespeople spending too much time selling the features
of your products and services? Or are your salespeople stressing
the benefits of what these products and services can do for your
prospects and clients?
Indeed, there's no substitute for skillful selling, but it all begins
with masterful marketing. And when successful selling produces results,
the best marketing is the way you serve your clients after the sale.
If you do a splendid job of marrying these two concepts into an
integrated business plan, your chances for success are bright.
Biggs Optimal Living Dynamics (BOLD!), a division of D. Biggs Corporation
established in l982, is a company offering keynotes, seminars and
resources in the areas of professional development and personal
growth.
Our purpose is to help your people strike a better balance between
the work they need and the lives they lead.
After several intense months of interviews, you’ve finally
settled on your new Vice President of Marketing. You call up the
winning candidate and give her the good news. She accepts your offer.
Finally, you can breathe a sigh of relief! Okay, so there is the
matter of the three "losing" candidates. You really do
dread telling them they’re out of the running. Perhaps I’ll
just avoid them, you find yourself thinking. They’ll get the
hint if I don’t call. Or perhaps you genuinely mean to call
them, but forget because you’re too busy to make it a priority.
Either way, you don’t need them anymore. So it’s okay
if you forget. Right?
Absolutely wrong, says Lawrence Stuenkel, Senior Partner of outplacement
firm Lawrence & Allen, Inc. and author of From Here To There:
A Self-Paced Program for Transition in Employment.
How you treat the "unsuccessful" candidates in your recruiting
campaign is just as important as how you treat the winning one.
First of all, treating these men and women with respect is simply
the right thing to do. Second, how you handle their "rejection"
will reflect on your corporation’s good will and professionalism
(or lack thereof). Third, the economy is picking up, which means
recruiting will also be on the upswing——which means
you could possibly need these candidates in the future.
"Corporations have always knocked themselves out with recruiting
efforts, dinners, and house hunting trips, etc., in an attempt to
win the favor of talented applicants," says Stuenkel. "So
why do they so often drop the ball in the ‘end game’
as it pertains to applicants who are not selected? After all, job
hunting is very stressful and rejection even more so. Treating these
people as ‘rejects’ truly tramples on their emotions.
At stake is the loss of professional face and the good will that
comes from treating people as ‘human assets.’
To illustrate the callousness (or at least the carelessness) of
some companies, he shares the following story:
"A client of my outplacement firm——I’ll call
him Bob——had just completed his ninth one-on-one interview,
which was conducted over a period of three weeks," Stuenkel
relates. ""The company indicated that Bob was the only
person being considered for the position, and would he please call
back the following Friday morning as the company was discussing
where to best slot him. He called back on Friday only to be told
by the President that he had another call on the line and would
return his call in approximately ten minutes."
"So, what happened next?" he continues. "Well, Bob
waited by the phone all day. He made another return phone call to
the President late in the afternoon with no success. No call Saturday,
no call Sunday. By the following Monday with no official communication,
Bob initiated another call with the same result: nothing. His calls
were left unanswered. The sad part is, this scenario is not unusual.
Early attention to the candidates is great, attention to the candidates
at the end is poor at best."
When a candidate is treated in this way, he does not leave with
a favorable impression of the company that rejected him. It is simply
unprofessional to give people the run-around and worse, to break
promises you made to them. If you are guilty of this type of behavior——also
known as "burning bridges"——be aware that
candidates will remember. And they will talk. 
While rejecting someone is never easy, it can and should be done
as courteously and professionally as possible. According to Stuenkel,
the three principles for a successful recruitment "end game"
are:
• Return all calls when promised. Don’t hide behind
electronic voice mail.
• Don’t be afraid to say, "no, thank you"
to the unsuccessful candidates promptly. They are adults and can
take bad news. Plus, it gives them a sense of closure and frees
them up to move on in their job search. No communication is much
worse. People who are engaged in corporate recruiting are paid
the dollars to communicate this unfortunate news when appropriate,
so why don’t they? Make breaking bad news to unsuccessful
candidates a part of your job——not an optional feature.
• Don’t expect search firms to do follow-up and express
regrets to candidates –– they won’t! It is the
corporation’s responsibility to complete this task. Follow
up on the status of a candidate who has interviewed with line
managers or the HR Department. Where was the interview left? Who
has the next step and when? And was this communicated to the individual
in question?
"The last few months have seen a mild recession but it is
not going to continue," asserts Stuenkel. "Those people
who are in the recruiting battle for top talent are going to find
their skill sets are not rusty but are truly corroded. Like elephants,
candidates have long memories, and there are more elephants than
elephant hunters. Treat all of them well——not just
the one you offer the job——and you’ll go a long
way toward ensuring that your company is one the most talented,
qualified elephants will want to work for."
***
About The Company: In 1977, Lawrence A. Stuenkel founded the
firm of Lawrence & Allen, Inc. to provide consulting services
to corporations regarding the handling, separation, and assistance
to employees that are affected by downsizing, restructuring, layoffs,
or terminations. The firm now provides consulting services to a
wide spectrum of clients that range from multibillion-dollar international
corporations to smaller, high growth oriented proprietorships. Stuenkel
travels extensively talking with corporate clients as well as working
with individuals who have been affected by plant closures and downsizing.
He is often a guest speaker on nationally syndicated talk shows.
Stuenkel has worked with such clients as Chicago Faucet, Miller
Brewing, Agfa, Briggs & Stratton, Navistar, GTE, Brunswick,
Motorola, Phillips Consumer Electronics, Johnson Controls, Sunbeam,
Rockwell, Borg-Warner, Budget Rent-A-Car, FMC Corporation, SC Johnson,
UOP, CNH, and WR Grace.
About the Book:
From Here To There: A Self-Paced Program for Transition in Employment
is a comprehensive new book that is packed with helpful hints and
creative approaches to finding the position that’s right for
you. The book also serves as a resource to provide to separated
employees. It is available at bookstores nationwide, major online
bookstores, or direct from Facts on Demand Press at (800) 929-3811.
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