So, I know it's been more than a minute since my  last entry.  I got called out on it by a couple people over the last couple weeks.  The fact of the matter is, this failing economy is teaching more lessons about being an entrepreneur than I would like to be learning.  Once I work through these economic challenges, I will have a limitless number of blog entries to write about...assuming I don't throw myself into the Schuylkill River first (that's a joke).  

        

Ok, so I've been a slacker on this blog.  I've been spending much of my free time on the golf course.  As I mentioned before, it has become my drug of choice - can't get enough of it.  But when I thought about it, golf has taught me a very valuable lesson:  The Power of Setting Realistic, Achievable Goals.  I started this year shooting a 150 (not taking any mulligans, counting swings and misses, counting every singles HORRIBLE shot) - pretty standard score for me before this year.  That's playing once every other year. 

Well, I'm now living in Delaware, which means that there is nothing for me to do BUT play golf.  Golf was always an activity that I've wanted to improve my skills in and this was my chance.  I set as a goal for myself breaking 100 for 18 holes before the end of this year.  That would be a 50 stroke improvement from the beginning of the year.  The beauty of golf is that here are SOOOOO many ways to improve.  In setting my goal, I realized that the biggest areas which were keeping me from my goal were my putting, my wedge game, and my iron consistency.  What have I done?  I've read articles on the internet, attended clinics lessons, gone on YouTube to improve these areas of my game - and they have improved dramatically.  Last week I shot a 106 - almost there...in a few short months.

How does this apply to business?  You have to have goals.  If you have no goals,  you have no direction.  If your company's goal is to hit $2 million in revenue, you are forced to figure out a way to get there and then develop a plan to do so.  Your plan might be to get two new $500,000 clients to get the necessary revenue to reach your goal.  You are then forced to come up with a plan to obtain two new $500,000 clients.  How are you going to prospect for these clients?  Which companies are large enough to BE $500,000 clients? 

I love golf - there I said it.  I'm addicted to it and I need help with my addiction.  But golf has made me realize that power of setting realistic, achievable goals.  Without goals, there is no plan.  Without a plan, there is no progress. 

        

It's been quite some time since my last entry.  I've been indulging in my newfound drug - GOLF!  I've discovered the attraction of golf is that it appeals to my EXTREME type A personality - there are SOOOO many parts to try and perfect that it's going to keep my interest for years and years until I perfect all the parts (yeah right).

But golf is not the subject of my blog entry today.  I was going to show a documentary today to my employees to generate a discussion, and I ended up showing to a group of high school kids (in addition to my employees) taking place at The Enterprise Center (yes we do movie day every now and then at CTE).  The movie is entitled "Startup.com".  It is a documentary that follows the rise and fall of Govworks.com during the dot.com boom of the late 90's/early 2000's.  It is a fascinating movie and I highly recommend it.  The company raised about $60 million, but failed less than 2 years later.

You can have your own opinions if you watch the movie, but here are the reasons why I think the company failed:

1. Failure to have a clearly defined brand/mission/vision.  At a meeting with a VC group, the two co-founders found themselves contradicting themselves as to where they saw the future of the company.  The CEO (Khaleil) later had a discussion with his co-founder, Tom, on the topic.  His point was that they cannot give conflicting messages in an external environment - and he was 100% correct in this.  As the CEO, though, it is his responsible that the company has a clear vision. 
2. Failure to clearly defined roles.  Throughout the film, the co-founders find themselves in a power struggle over decisions.  I felt that one of the major issues was that Tom did not have a clearly defined role.  More importantly, I think the unclearly defined role that Tom was filling was poorly suited to his skill set.  He later admitted in the movie that he wasn't suited to directly the product development and that he just didn't have the experience.  Seems like a HUGE issue for such an important role for a dot.com. 
3. Growing too fast.  The company grew from 8 to 50 to 200 and back to 50 in the course of a year and a half.  That's CRAZY!  The CEO has a moment where he says "Our infrastructure is ridiculously inflated".  I think they just grew too fast which a lot of times breeds inefficiency.  Which also probably leads to the lack of clearly defined roles in point 2. 

You will have to watch the movie yourself and take away your own lessons.  It's a solid movie and there a lot of "what not to do's" for startups. 

        

I've mentioned Simon Sinek's name several times in previous blog entries - his talk I heard him give at a recent conference I attended made a definite impact on how I look at marketing, business, and just relationships in general.  I was both surprised and impressed that he took the time to give me a call after I had sent him an e-mail about a month back.  He called me this morning and we had nice half-hour chat about branding, his Golden Circles, why companies fail, among other things. 

One of the topics that struck me this morning was one of "discipline" - the discipline to keep your company focused on the "why" of what they do.  We talked about how a lack of this discipline can cause many companies to eventually fail.  He brought up an interesting example of a man with tremendous discipline - Craig Newmark, the founder of Craig's List.  Craig is a huge advocate of making the internet free to use for all.  I did some research and Craig's List does between $10-20 million dollars worth of business a year with 19 employees.  Using a formula used to value eBay, it has been estimated that Craig's list is worth between $1 and $2.4 billion dollars.  I saw another article that had it valued at about $5 billion dollars.  Yet, Craig Newmark refuses to sell the site as he wants to ensure that the majority of the site remains free (apparently there is a small charge for job postings in some of the larger markets).  Simon also mentioned that he met Craig Newmark at one point.  He was most impressed by the fact that Craig's cards said "Customer Service Representative AND founder" - yes, founder was second.  He also said that many customer service issues are handled by Craig himself.  

Talk about discipline - TURN DOWN A COUPLE OF BILLION DOLLARS BECAUSE OF WHAT YOU BELIEVE IN!!!!!!  That is deep - I'm pretty disciplined and I have some pretty firm beliefs, but I'm not sure I could have done something like turn down a billion dollars.  It probably is not a coincidence that Craig's List popularity continues to grow at a rate that far exceeds many of its competitors.  It's difficult to stick to your beliefs instead of chasing the almighty dollar.        

        

I took quite a bit of time off since my wedding/honeymoon.  It's taken me quite some time to get myself going again since coming back burnt to a crisp from Cancun, Mexico .  By the way, for vacations - "all-inclusive" is the way to go.  It's really the first time I really felt like I was on vacation.  There's really a relaxing feeling about getting out of bed, leaving your wallet in your room, going to breakfast, eating, and getting up and leaving.  No calculating 15-20% tip, no worrying about the bill, NOTHING!  Love it.  It was some much needed rest and relaxation after an intense period before the wedding. 

Sorry for the aside, had to get my plug in there for "all-inclusive resorts".  I was at a recent dinner event for aspiring young entrepreneurs.  An older gentleman got up to speak and he said something that really struck me.  He was talking about one of his friends that had started many companies.  He said something that has stuck with me.  He said, "My friend told me that the companies that he started for the sole purpose of making money, he lost his shirt on.  The companies that he started to help others, he got rich on."

For some reason, that statement fascinated me to no end.  But it makes a lot of sense and actually ties in well with Simon Sinek's concept of inspiration - "People don't buy your product because of what you do.  They buy your product because why you do it."  Going a step further, Simon makes the argument that there are often very little differences between product features - so ultimately, it comes down to the "why" a company does something - and "helping" people or in a marketing sense "fulfilling a need" is a heck of a reason to do something.

That comes to my second point, using the motivation of helping people or fulfilling a need keeps a company "consumer-driven" or "consumer-focused".  In other words, product development and innovation are driven by making lives better.  This means your product development dollars are spent better and smarter.  You'd be surprised by how many company aimlessly spend research and development dollars aimlessly to develop "cool" technology does not solve a problem.
 
Bottom line - start with the problem, then develop the solution.  And focus on a solution that truly changes peoples lives for the better.  And finally, don't just start a business to make money.  That's a side effect of starting a business.  The reason for starting a business has to be bigger than money.  If you are solving a problem that no one else is solving and you are solving it well, money will come (well except in an economy after a Bush administration). 

        

I'm leaving on Tuesday to head to my wedding, so I will be out of commission for a few weeks while I say "I do" and head to Cancun on my honeymoon.  I thought I would sneak one more entry in before I head out. 

Through CTE Healthcare Communications, I pulled together a Entrepreneurial Boot Camp in conjunction with Urbanphilly.com a few weeks ago.  We had about 80 aspiring and new entrepreneurs attend a 2 day workshop.  I was one of the panelist for a section I entitled "Growing Your Business" and I covered the topic of branding.  One of the questions that I got was "How can you create credibility for your company?"  There are a lot of ways, but operationally, there a couple very simple ways to create credibility.  One of the SIMPLEST and one of my pet peeves is register a domain name.  You don't know how many entrepreneurs I've met that hand me business cards with the following:  XYZbusinessname@yahoo.com.  You can register a domain name at Godaddy.com for $10?????  For $10, you get a FREE 100 mb e-mail address with that.  Seriously, can you really not spend $10 for a domain name?  Unless I have developed a rapport with their yahoo-emailing azz, I REFUSE to take them seriously.

As small business owners, one of our biggest challenges is to balance the advantages of being a small business (lack of bureaucracy, low overhead, no shareholders to try to constantly please) without APPEARING to be a small business. We work with the pharmaceutical industry.  We are dealing with Fortune 500 companies.  It is important to make them feel comfortable about giving us a significant contract.  Keep in mind, THEIR job is on the line when they are giving you a contract.  They want to be sure that they can trust that you have the capacity to complete the contract and make THEM look good.  The thought of one guy sitting in his living room with his boxers on answering his kitchen phone (pretty close to how I started) doesn't necessarily breed confidence.  What did I do, I invested (yes, I said invested) in subletting office space from a company in downtown Philadelphia, a PBX phone system from Packet8, and a website.  Our phone system had very professional sounding automated attendant with voicemail, hold, and transfer capabilities.  Between these investments, many people have indicated that they thought we were much bigger than we are.  And that's exactly what we want. 

When I started my coffee drive-thru business with my partner, we have very different philosophies of starting businesses.  He wanted to be a cheap as possible on as much as possible.  Once we "generated enough revenue", then we could start to spend money on "more expensive" things.  I, on the other hand, wanted to "start as strong as possible".  I wanted to invest in a "point-of-sales" (POS) system that had a touch-screen to make entering transactions as efficient as possible.  I wanted to invest in our branding by getting a professionally designed logo, etc.  We battled over these decisions.  My argument for the POS system was this - if we were selling the convenience of a coffee drive-thru, we would KILL ourselves if we opened and we were slow. 

From a branding standpoint, it is not easy to "undo" a customer's perception of your business.  Who can think of Joey from Friends as anyone other than "Joey from Friends"?  No, those images stick and can't be forgotten easily.  Matt LeBlanc can only get roles that are similar to his role on Friends.  Same goes for branding - if you start up your business as a shit hole - it's going to be VERY difficult to convince customers that you are no longer a shit-hole if you happen to later decide to renovate your place.  A GREAT example is Friendster.  Friendster beat Myspace to market as a social networking site.  However, Friendster's membership grew SOOO quickly that their servers ended up crashing.  Well, that opened the doors for Myspace.  How many of us have Friendster accounts vs. Myspace accounts?  All because Friendster didn't INVEST in their servers up front.  Perhaps they said, "Well we can upgrade our servers as we need them."  How much is Myspace worth?  Wow, that decision cost them BIG TIME! 

Here's the bottom line.  Invest in you company UPFRONT.  If that means getting outside financing to do it, SO BE IT.  YOU HAVE TO SPEND MONEY TO MAKE MONEY!  First impressions are lasting.  Don't hurt your chances for success by being cheap. 

        

After my last entry on Focus and branding, I felt that this entry was an appropriate follow up.  I will try to refer back to previous entries as much as possible to show that these entries are very much interrelated. 

Monday and Tuesday of last week, I attended a Diversity for Life Sciences Conference.  A long two days, but VERY valuable from a business development standpoint.  However, the keynote speaker, a man by the name of Simon Sinek, made by far the biggest impact of the event for me.  Many of his ideas fit in with some of my already formulated ideas surrounding branding, but he had a very unique way of organizing the "branding" process.

He called his process The Golden Circles.  Visit his blog, entitled "Re: Focus" for more information on The Golden Circles.  In a nutshell, Simon talks about how many companies and people focus on "what" and "how" they do things.  For example, many companies focus on what the features of their product are or many people focus on what their job is.  His argument, however, is that true inspiration and brand equity come from the "why".  "People don't buy your products because of what you do, they buy them because why you do them," was what he repeated over and over again.  He used Apple's mission to oppose the status quo and Southwest Airlines' mission to become the common man's airline as keys to those companies LONG-TERM success.  Companies that tried to emulate the iPod and low-cost airlines failed because they failed to effectively communicate WHY they were creating it. 

These companies that do have long-term success do so for a number of reasons:

1. They effectively communicate the "WHY".
2. Their customers buy their products because the "WHY" of the company fits in with their own belief systems.
3. These companies hire people whose belief systems mesh with the "WHY" of the company.
4. They stay true to the "WHY" in each and everything that they do (and how they do it). 

First of all, I want to preface that I'm sure I'm not doing his teachings any justice so visit his site to learn more.  But #3 on this list brings me to my second point - the importance of a clear and concise mission statement.  When I first started my company, I didn't have a mission statement.  I always thought they were a little hokey.  But one of my employees, the most junior one by the way, really pushed us to write a mission statement AS A COMPANY.  I want to make a point here - our newest employee made a VERY important contribution to the company when she made us write our mission statement together.  NEVER underestimate each person's contribution to the company. 

Now why is a mission statement important?  It is important because it keeps the "WHY" at the forefront of every employees mind.  We keep our mission statement posted in our office so that everyone can view it.  You want the essence of the companies mission to be in EVERY DECISION that they make.  You cannot be there to watch over every decision that your employees make.  However, if you provide the framework (the mission statement) for where your company wants to be, employees can make decisions that fit in with the framework of the companies belief system.   


Because the mission statement is, in a sense, the framework for decision making of all of your employees, I think it's also very important to keep the mission statement VERY simple.  Narrow the keys to your companies success to two or three points MAXIMUM.  If you try to put too much meat into the mission statement, its very easy to lose focus.  However, if you only have 2-3 points, it is so much easier for your employees to "test" to see if each decision that he or she is making benefits the overall mission of the company.  If their decision does not help the company achieve the overall mission, then they should rethink their decision.     

Here is CTE's mission statement:

Our mission at CTE Healthcare Communications is to provide engaging and interactive educational resources for both people living with various medical conditions and for caregivers. We understand that education is vital in order to reach treatment goals and we work to empower patients and caregivers to take a more active and informed role in their treatment. Our unbranded initiatives provide pharmaceutical, biotech, and medical device companies a vehicle through which they can develop long-term, meaningful relationships with patients, caregivers, and advocacy groups.

What are the key points here?  We want to create engaging patient education.  We want to empower patients and their caregivers.  We see patient education as a tool for the pharma industry to develop meaningful relationships with their consumers and stakeholders.   Is there more to our business than this...ABSOLUTELY.  However, if we stay true to these three core values, then the rest will take care of themselves.  For instance, a lot of what we do involves seeting up educational meetings for advocacy organizations.  If we focus on the fact that these educational meetings are about developing relationships, we understand that the little details of each meeting are important factors in developing these relationships - making sure food and AV are delivered on time, that our customer service when we deal with advocacy organizations are top notch...these are VITAL.  Does our mission talk about making sure food is delivered on time?  No.  It doesn't have to be.  It doesn't have to be because we understand the relationship aspect of what we do.  The rest takes care of what we do.   

It's been a long day and now I'm losing focus.  But here are a few final thoughts - understand WHY you are doing what you do.  If YOU don't know, then how can you expect your consumers or your employees to know.  Write a clear and concise mission statement that incorporates this why.  Use the KISS method - KEEP IT SIMPLE STUPID!  Visit Simon's blog.  He is a AMAZING speaker. 

        

Yes, it is 9:00 AM on a Saturday and I am writing a blog entry and yes I'm a nerd.  But I get these random thoughts at odd hours and I like to write them down as I get them...wanna hear it?  Hear it go:

For those that don't know, the first company I started was X-Marketing.  I originally started this company to provide branding strategy and marketing plan implementation to small businesses.  I was warned by a marketing professor at Villanova not to do that - "Small businesses don't have money but they need a lot of help" he said...BOY was he right!!!!!  For three years, we struggled to find viable small business clients that could be profitable to work with.  "We'll grow as they grow" was the plan.  We worked basically for free with companies that a lot of promise but would not spend money.  Again, I stress - you have to spend money to make money!

Throughout this period, we were providing patient education services to one of the biggest pharmaceutical companies in the world.  These patient education services that we provided were always "the other thing" that we did...LOL.  Imagine 110% of your revenue coming from the "red-headed step child" - no offense to red-headed step children. 

We finally got a break one day and we landed a commercial cleaning company as a client.  They were a sizeable company with over $15 million in revenue.  They were looking to rebrand themselves and hired us to develop the strategy.  For the next 6-8 months, we underwent a MAJOR market research project to understand the commercial cleaning market, the trends, and the consumers.  We developed what I consider a couple innovative branding strategies that we thought could really take them to the next level. 

Probably one of the best books on branding that I have ever read was The 22 Immutable Laws of Branding by Laura and Al Ries.  The most important concept in the book is that more focused the brand, the more powerful the brand.  As we worked on this project for the commercial cleaning company, we looked at our own brand.  We created a couple branding options that had a clear and narrow focus.  We, on the other hand, provided ALL sorts of marketing services:  market research, branding strategy, graphic design, web design, advertising...the list went on.  We offered to companies in any industry that we could get our hands on.  We offered to companies of all sizes.  The branding strategy company NEEDED TO EXAMINE ITS OWN BRAND! 

Then we looked at what we provided to the pharmaceutical company.  It was a service that relatively few companies offered, it fit in well with current trends in healthcare, and we had instant credibility from the work we had done with our current client.  WHY WAS PATIENT EDUCATION "THE OTHER" SERVICE THAT WE PROVIDED THAT WE RARELY TALKED ABOUT?  This doesn't make sense we said to ourselves...yes, I said we.  We met as a team on this.  Read Power of the People to see why I believe this part is so important.

Then we looked at our current brand, X-Marketing, and realized that this brand did not fit in with patient education.  Thus, CTE Heathcare Communications was born.  CTE stands for "Caring Through Education".  CTE now ONLY focuses on providing patient and caregiver educational resources in partnership with the pharmaceutical and biotech industries.  The brand is only about 8  months old, but the new brand has already opened quite a few doors that would not have been open to us as X-Marketing.  The rebranding effort was a BEAR!  Changing e-mails, voicemails, websites, mission statements...but it was a change that I think saved the business.  Our goal for 2008 was to earn $2 million for the first time, and I think there is a good chance that we will hit that goal...check back with me in January of 2009.  But if we do hit that number, I can say this with almost 100% certainty - WE WOULD NOT HAVE HIT THIS NUMBER AS X-MARKETING.  

The new focus of the brand has changed EVERYTHING.  I know EXACTLY who I am looking to sell to right down to the position in the company.  I know EXACTLY what I am selling - I don't have 15 services to try and sell.  My employees have renewed optimism because they see a direction now - which we did not have before.  We pulled this rebranding effort took about 6 months to complete.  I just filed the paperwork to disolve the X-Marketing name and that is the last remnance of our old identity.  

I can't say for sure if or how successful we will be - I'll say I'm trying my hardest to have CTE make an impact both financially and socially.  You are coming into the story on the ground floor - so this blog will be like a reality show over the next few months.  Stay tuned to see who gets voted off!  

READ The 22 Immutable Laws of Branding!!!!!  I cannot stress that enough.  It has had a big part in shaping how I look at business strategy and marketing in general.  It is time for me to go - so until next time!

 

        

"I'm dying to hear about Mudd Coffee."  This seems to be the topic that my small group of readers have been asking me.  I've been delaying writing about this topic, because months and months later...it STILL makes be bitter. 

Partnerships are tough...no matter how you cut it.  Finding the right business partner is as difficult as finding the right person to marry.  In fact, business partnerships are very much like marriages...WITHOUT the sex.  That's not very attractive is it?

To be perfectly honest, I'm not sure I would go into business with a partner again.  I'm 100% sure I would never enter a 50/50 partnership again.  I'm not saying that partnerships can't work.  I'm sure they can just like a marriage can work.  However, you need to find the right person and you have to plan for the POSSIBILITY of failure.

So what happened, you say?  Well, I had a business partner that came to me with this phenomenal concept of the drive-thru coffee kiosk at a time when I was a relatively new entrepreneur and I was "blinded by the bling" as Dr. Boyce Watkins would say.  When he asked me if I wanted to partner with him, I said yes before he even finished his sentence and before I truly thought through the ramifications of that decision.  For those that know me, I make A LOT of my decisions in a similar manner...for better or worse.  The thought of "what if this kiosk concept doesn't work?" didn't even cross my mind...and if it did, it was countered by the thought, "if it doesn't work, I'll figure my way out of it!".  To be quite honest, I need to be a LITTLE more cautious with some of my business decisions while maintaining my "dive right in" attitude that enables me to do the things I do. 

So, my business partner was a salesman, and a good one in many ways.  He sold me not only on the concept, but he sold me on his merits to be my business partner.  He told me about all the businesses he had started and sold successfully.  I was so eager to start this new business that I didn't take the time to check out any of the things that he had done.  I should have...  As we started the business, there were some basic things that he had no clue how to do or even that we SHOULD do them...such as forming an entity.  My intuition told me that something was not right.  Why would this man who had started so many businesses not know how to START A BUSINESS?  "Someone else always took care of the paperwork for me".  Ok, that makes sense.

We formed our partnership - but in doing so we failed to do 2 things:  we failed to put down IN WRITING how we were going to make decisions and we failed to talk about what we would do in the event of the failure of our business.  Well, the next few months turned into a battleground.  Most of these arguments were over money...we were on the OPPOSITE end of the spectrum - I'm a firm believer that you have to spend money to make money and he was of the opinion that we should spend as little money as possible until we were profitable.  I'm not going to get into a discussion on why my philosophy was right .  The point is that we had no way to solve these disputes - it was mostly a matter of who had the stronger will which is no way to make business decisions.  This was the beginning of our downfall. 

The second step was money itself.  We were a 50/50 partnership which meant we should have been contributing capital equally.  Well, I learned early on that there are A LOT of excuses why a person doesn't have money available - a person who had bragged to me that they had a net worth well into the millions.  But because I can't stand to see things done half ass, I paid for a lot of our initial costs.  We got to the point where it was probably about a 33/67 split (and yes, I was the 67 percent).  It was at this point in the partnership that I started to learn troubling things.  I learned that some of the businesses he had started were NOT as he made them out to me.  The jazz club he told me he started - well it turns he was one of 10 silent partners in the deal and he had NOTHING to do with the operations of the club.  I'm not going to get into details, but during the time when he said he didn't have any money to put into the business, he was doing things like putting a pool and an addition at his house.  WOW!!!!!

Now this would have been all right if the business had been doing well.  After our grand opening, we thought we had a winner.  We had 90 cars come through in 2 hours and we made $435 our first day in business - which works out to well over $100,000 in revenue a year.  Well, turns out that's about all we made our entire time in business...no seriously, it wasn't that bad but it was BAD.  We went from break even to losing money to HEMORRHAGING MONEY.  I will go into more details why I think we failed in a later entry, but ultimately, it came down to our location.  Our grand opening experience made me believe that our marketing and our concept were solid but our location was less than ideal.  When you are selling convenience, an inconvenient location KILLS your business. 

Anyway, I put myself in a precarious situation.  How could I get myself out of the situation?  I didn't have a lot of options available to me, especially given that I was in a 50/50 partnership with someone that I DID NOT TRUST.  I did the only thing that I felt that I could do - I bought out his half of the business.  I did a seller financed deal so that I spread out my payments over 5 years which limited the amount of money that I had to come out of pocket for.  As soon as we signed the paperwork for the buyout, I contacted a business broker.  Without going into details, I was able to sell the business within a few months. 

Believe me, I lost enough to pay for an MBA degree at a top university when it was all said and done.  And that's how I look at the situation - I received an MBA in the University of Experience.  I don't regret anything, as painful as the situation was for me.  I learned an INCREDIBLE amount of information from this experience and it has made me a smarter entrepreneur.  Although, I'm not sure if I will ever do a partnership again...but if I do, I'll be a LOT smarter in regards to who I choose to partner with.  I'm going to be a LITTLE smarter before I jump into some of these new ventures (and I stress a LITTLE LOL).  But I learned invaluable lessons about the retail side of business.  Going through the process of selling a business was fascinating to me and I think it will only make me better in future ventures.  I'm most proud of the way I handled "failure" and how I actually did "figure my way out of things".  I took a huge hit and I'm still alive and not THAT much worse for wear.  It gives me confidence in my abilities.  It also taught me to plan a lot better to AVOID failure, but also plan better for the POSSIBILITY of failure.  I'm sure that I will write more about this experience, but that is the jist of "what happened to Mudd Coffee".  If you're interested, the owner kept the site that we designed for the Mudd Coffee. 

        

I know in one of my earlier entries, I said that failure was an entrepreneur's best friend.  Well, I really should have said failure's a good wing man because an entrepreneur's best friend is networking.  I know, I know, my blog's first contradiction.  Anyway, back to networking.  Networking is probably the most important skill for an entrepreneur to have - it is a way to develop strategic partnerships, prospect for clients, and to find new business opportunities.  No matter how you spin it, business is about relationships.  People like to do business with people that they know, like, and trust (that's a nugget I have to attribute to Sulaiman Rahman who founded Urbanphilly.com).  The better you are at building MEANINGFUL relationships, the higher the likelihood of your success as an entrepreneur.

In my 4 years, I've done a fair amount of networking.  And I have to say, it's tiring for me.  What's most tiring is an endless line of aspiring entrepreneurs that pretend to be something much more than they truly are - in other words, they like to waste people's time by talking big and lacking any substance.  These are the same people that follow the "Myspace" approach to networking:  they figure if they can get as many business cards as possible, they are successfully networking.  Me?  I'd rather have 5 connections that are really STRONG connections.  What's a strong connection?  One that will answer your calls and knows who you are as a person not just what your e-mail and cell phone number are, one that will do what they say they will do, and finally, someone that knows a lot of other strong connections.  I often call them connectors...that's a term from the book The Tipping Point by Malcolm Gladwell.  These are people that have the ability to bring people together for the purposes of accomplishing something bigger than the sum of the two parts.  I want a Rolodex of ALL connectors as they are the gateway to MORE connectors.  "Myspace networkers" are dead ends. 

"Myspace networkers" are dead ends because they approach everyone they meet from the prospective of "how can I benefit from this person"?  What they don't understand is the hierarchical nature of most relationships.  I believe that very few relationships are between "equals".  Most relationships have one dominant and one submissive participant - in other words, one party is control of more power than the other.  If you are a relatively young entrepreneur and you are looking to meet connectors, you most likely are sitting in the submissive chair (sorry)!  That means that you have to approach networking from the perspective of "what value can I provide this connector?".  As the submissive, not only do you have to deliver additional value to the connector, but more importantly, you have to establish a reputation with that connector that you are someone that will DO WHAT YOU SAY YOU WILL DO.  In other words, you have to prove that you are reliable.  This may mean that if a connector invites you to one of their fundraisers, you go even if it means you have to fork out $150 bucks.  Or if there's someone that you know that the connector wants to meet, YOU arrange the meeting.  Little things like that help to build trust and what I like to call "relationship equity".  This type of equity takes a LONG time to build.  You cannot build it overnight. 

I've been building relationship equity with some of my best contacts for 3-4 years.  However, this investment of time and sweat has JUST started to pay off.  Now, many of them are starting to come to me and bring them into their closest circles.  Some of the events I've been invited to recently are like "connector candy stores".  A mistake a lot of people make is that they wait until they need someone before they start to build a relationship.  That's too late.  You could easily be 3-4 years away from benefiting from that relationship. 

I know the types of projects I want to get involved in over the next 5-10 years:  private equity, educational speaking to entrepreneurs, and real estate.  When I meet someone, I don't always know exactly how, but I can usually tell if that person has knowledge that I can truly benefit and learn from.  But even if I see them benefitting me, I spend very little time at the very beginning of the relationship telling that person about what I want because I know I'm the submissive in the relationship (that just sounds dirty).  I ask A LOT of questions about the other person and understand their challenges both on a business level and on a personal level.  Then I look at my Blackberry and my contacts list and see if there's someone I can put this person in touch with that will help them.  You don't want to ask for anything or you'll be spending relationship equity that you haven't built up yet...and we all know about the subprime crisis and how that's going...

This was a long one for me so let me end it here.  But let me end with some final thoughts: plant your seeds now.  Don't wait until you need a contact to try and foster a relationship.  It will be too late.  Building relationship equity takes a lot of time, money, and effort to do it correctly.  Approach it in a genuine way.  And if you have the choice between having a lot of superficial contacts and a few choice meaningful contacts...choose quality over quantity ANY day of the week.