Sunday, 30 June 2019

Just 6% of Small Businesses Focus on Keeping Customers

Just 6% of Small Businesses Focus on Keeping Customers

The goal of a commercial business is to increase sales, and retaining current customers is key to making this happen. But according to a new report from The Manifest, only 6% of small businesses are focused on retaining their customers. This is despite the fact their main digital marketing goal is to increase sales.

The data reveals most small businesses aren’t placing a priority in engaging existing customers. The report attributes this to a shortfall in their budget and resources to maximize their efforts. Additionally, they are relying on in-house teams to carry out these tasks.

While some businesses may have truly qualified in-house staff, it is not the case for most organizations. As Emily Clark, who wrote the report for The Manifest, says, “… small businesses do not always explore the benefits of different marketing strategies like SEO.”

Clark adds, “Small businesses realize the value of digital marketing but can improve their strategy with better resources and goals.” The report looks to give small businesses insight into choosing the best resources for their digital marketing efforts.

The data for the report comes from a survey of 529 small businesses across the U.S. about their marketing resources and annual budget. Although the participants include businesses with 1 and 500 employees, 54% only have 1 to 10 employees. So, the majority are really small businesses.

The survey respondents are male (52%) and female (48%), with millennials (29%), Generation Xers (45%), and baby boomers (27%).

Survey Findings

Businesses want to increase their sales, but there is a great disparity in how they go about doing it. If only 6% of small businesses are focusing on retaining their customers, it means 94% are not fully aware of the benefit of this effort.

Just 6% of Small Businesses Focus on Keeping Customers

The report says businesses are missing out on easier sales which come from engaging existing customers. Because compared to new customer acquisition, it is much cheaper.

The success rate of selling to a new customer is 5 to 20%. On the other hand, it is 60 to 70% for existing customers. So, the fact only 6% of small business are retaining their current customers offers huge opportunities.

As the report says, the lack of resources is one aspect. And it is not only financial, but it is also knowledge-based. While most small businesses (60%) use an in-house team to promote their digital marketing strategy, only 33% use marketing software. And because digital marketing is an essential component for retaining customers in today’s ecosystem, how it is applied plays a big role.

Just 6% of Small Businesses Focus on Keeping Customers

With marketing software employees can schedule content, organize projects, and track metrics. But it will take experts who can optimize the software and other technologies to deliver. In order to make this happen, 40% of businesses are hiring digital marketing agencies and 39% are using freelancers.

Clark says both the agencies and freelancers offer similar value. Adding they are usually more experience in a particular field of marketing than an in-house team. She goes on to say, “Hiring a noted expert in the community can ensure that businesses receive the best results on their projects.”

Marketing Budget

The marketing budget of any organization will dictate how far they can extend their reach. And for small businesses, the budget is almost always in a state of flux. But according to this survey, 36% spend less than $10K annually on digital marketing.

However, the report says the data also accounts for marketing employees’ salaries. So the 36% of businesses are paying a marketer $10,000 a year or they do not have marketing employees. And when it comes to the marketing, small businesses also have many different approaches.

Not everyone is looking to get $10K in ROI from direct sales. Some businesses create campaigns to spread the message of the company to increase interest with the goal of acquiring long-term customers.

Businesses launch campaigns for everything from brand awareness to lead generation, product launch, special promotions, sales and more. The key is to optimize today’s digital marketing solutions, talents, and opportunities to grow your business.

Clark ends the report by saying, “Small businesses realize the value of digital marketing but can improve their strategy with better resources and goals.”

You can read the full report here.

Image: Depositphotos.com

This article, "Just 6% of Small Businesses Focus on Keeping Customers" was first published on Small Business Trends



Top 5 workplace Benefits Sure to Please Your Employees

Happy employees help grow your business. Make sure you keep them happy by providing these benefits that are sure to please them.

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7 Leading Factors That Affect Business Productivity

Improving the worker productivity is the goal for all business owners. Make sure you understand the leading factors that have significant impact on it.

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5 Guaranteed Ways to Get Promoted At Work

Getting promotion at work requires not only hard work, but also collaboration as well as learning and managing office politics.

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How Lone Worker Solutions Can Reduce Insurance Premiums

Lone workers face unique risks for small business owners. These solutions can help reduce insurance premium for lone workers.

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62% of Business Owners Feel Depressed Once a Week

62% of Business Owners Feel Depressed Once a Week

The health and wellbeing of small business owners is a critically important public health issue. It is especially important when it comes to mental health. After all, small businesses account for the employment of more than 54 million people in the U.S.

A new report by the Canadian Mental Health Association (CMHA) and Business Development Bank of Canada (BDC) reveals 62% of business owners feel depressed at least once a week. Granted the study was conducted in Canada, but studies carried out there are usually applied in the U.S. and vice versa.

But when it comes to the issue of depression, the numbers are probably higher in the U.S. This according to Brian Fielkow, CEO of Jetco Delivery and Dr. Andrea Goeglein, a workplace and career psychologist.

In an emailed release, Fielkow says, “I’m not shocked by this at all. Based on what I see with my clients, I expect that this rate is even higher in the United States. Business owners are so busy taking care of their employees that they forget to take care of themselves. They also hide their depressed feelings to keep up company morale.”

The Goal of the Study

Titled, “Going it Alone: the mental health and well-being of entrepreneurs in Canada,” the study looks at the mental health and well-being of entrepreneurs. According to the CMHA, the goal of the study is to better appreciate the unique pressures business owners face. At the same time, try to find ways to improve the mental health experiences of entrepreneurs.

The study looks to understand:

  • What mental health issues entrepreneurs report.
  • The impact of mental health concerns on business objectives and entrepreneurs’ personal lives.
  • What strategies and/or support entrepreneurs use to manage these issues.
  • What barriers they face in accessing services and support, including lack of access and limited awareness of support.
  • The cost of mental health services.
  • Stigma-related concerns, such as concern for reputation and discomfort discussing the issue.

The report comes from a survey of close to 500 entrepreneurs.

Key Findings

The study says generally entrepreneurs are likely to experience mental health issues frequently. On top of the 62% who say they feel depressed at least once a week, another 46% also experience low mood or feel mentally fatigued. And these mental issues interfere with their ability to work for 46% of the respondents.

Why Business Owners Feel Depressed

In the past 12 months, 28% said they experienced or were diagnosed with a mental health condition. The most common of these conditions are mood and anxiety disorders. This was 8% higher than the general population.

Other mental health-related issues include feelings of uncertainty and/or inadequacy (51%), depressed mood (50%), and mood swings (39%). But even with so many conditions, 79% say they are happy with their state of mind at least once a week. And only 20% feel the need to get mental health support and services.

Do Depressed Business Owners Seek Help?

When it comes to getting help, a number of barriers prevent entrepreneurs from actually seeking mental health support.

The number one reason (36%) is the stigma attached to mental health. People are concerned about the organizational and reputation implications of seeking help and/or taking time off work. The good news is, the report says 46% are reporting their organization is working to end mental health stigma.

Additional barriers entrepreneurs face includes the cost of mental health (34%) and lack of access to support (22%).

Who is More Likely to Experience Mental Health Issues?

In the report, female entrepreneurs say they experience some issues with far greater frequency than their male counterparts. This includes feelings of uncertainty and inadequacy, depressed mood, and feeling overwhelmed.

Entrepreneurs with businesses which are going through early growth stage also report higher incidents of mental conditions. This is perfectly understandable because of the many stresses associated with growing a business. Especially a small business without the right funding.

Recommendations

For most small businesses addressing the issue of mental health is going to be way beyond their comfort zone. But it is important to create a safe environment for employees to report their condition without any repercussions.

Some of the recommendations in the report are to:

  • Develop flexible and relevant mental health support for entrepreneurs.
  • Create tools to help entrepreneurs achieve better work-life balance.
  • Include mental health in entrepreneurship education.
  • Strengthen research on entrepreneur mental health.
  • Shift the popular view of entrepreneurs and entrepreneurship.

In conclusion, the report says, “We need a more nuanced narrative that allows entrepreneurs to show their vulnerability and ask for help when they need it.”

Read the full report here (PDF)

Image: Depositphotos.com

This article, "62% of Business Owners Feel Depressed Once a Week" was first published on Small Business Trends



The 7 Biggest Mistakes You Can Make While Trying to Expand Your Small Business

7 Scaling Mistakes Companies Often Make

For most small businesses, growth is a primary objective. And while achieving growth is wonderful, it often presents issues for companies that are unprepared to scale up. When these issues aren’t dealt with swiftly and effectively, the business will eventually crumble due to scaling mistakes.

Managing the Chaos of Growth

Growth is a topic entrepreneurs love to contemplate, but it’s not one that gets studied enough. If you’re willing to learn from the past – and even your peers — you’ll discover that others have already made a litany of scaling mistakes so that you don’t have to. They’ve also enjoyed profound successes and discovered what it takes to foster authentic growth.

Think about the most successful people, nations, groups, and companies in history and consider the way in which they grew. The Roman Empire, for example, had an expanse of five-million-plus square kilometers at its height. But it didn’t grow to that size overnight. The Roman Empire lasted for well over 1,000 years and was built over hundreds and thousands of invasions, battles, and political maneuverings — one square kilometer at a time.

Consider a modern example: Facebook. When Mark Zuckerberg and his fellow Harvard College students and roommates launched the online social network, they didn’t immediately start a national or global blitz and attempt to take over MySpace (the major social networking platform of the time). Instead, they started small. In order to join, you needed a Harvard.edu email address. Then they added another college. And another. And another. Eventually, they launched to anyone with a college email address. Finally, they launched to anyone and everyone.

Learning From Facebook

The Facebook launch model was all about the phenomenon of critical mass. They knew people wouldn’t join Facebook if they didn’t have friends on it. So instead of targeting hundreds of millions of people, they started small. They believed — and rightly so — that a few dozen users would lead to a few hundred, which would lead to thousands, millions and possibly even billions of users.

The Roman Empire and Facebook are an unlikely pair, but they are just two examples showing that growth has always been a huge focal point in politics, business, and life in general. However, for every story of successful growth, there are dozens of companies that attempt to scale up and end up crashing. Generally speaking, it’s because they fail to lean on the proven advice of those who’ve gone before them and attempt to scale up prematurely or too fast. In doing so, they bring on countless problems.

Hear this: Growth is good. However, growing too fast is arguably worse than staying put a little longer than you should. Yes, under certain circumstances, temporary stagnation can be better than premature growth. That’s not something everyone will agree with, but it’s a truth that’s supported by dozens of case studies and business obituaries over the decades.

Most businesses try to grow for the sake of growth and, in doing so, forget about the importance of establishing a strong foundation that can withstand the downward pressure that’s applied when there are more resources to manage, prospects to chase down, customers to keep happy, and money to allocate. You don’t want to make these same scaling mistakes.

7 Scaling Mistakes Companies Often Make

Now that you have a big-picture overview of the importance of scaling at a slow and steady pace, let’s explore some of the top scaling mistakes companies make that prevent them from doing so (and how it affects different areas of business).

1. Unnecessary Innovation

Growth is something that needs to be managed by people who have strategic leadership qualities. While everyone can have a say in how your business grows, be wary of letting innovators take the lead.

“Innovators are an invaluable part of your team, but they’re often not the best people to put in charge of scaling,” business consultant Rhett Power mentions. “The constant search for new ways of thinking and doing requires a heavy investment of time, energy, and — eventually — money. There will come a time when it’s more practical to focus on maintaining what you’ve built rather than redesigning it or trying to dramatically improve it.”

On a related note, product innovation is only one aspect of differentiation. As you grow, you’ll discover that it’s often more cost-effective and less resource-intensive to innovate customer service, customer experience, shipping/logistics, etc.

2. Poor Hiring

In terms of hiring and managing human resources, two things happen to startups as they grow:

  • First off, people leave for new opportunities. Either they realize they can’t handle the uncertainty of startup life and want the predictability of another job, or they choose to go off on their own and start a new business.
  • Secondly — even if nobody from the original team leaves — you find yourself in a position where you have to add positions in order to account for growth.

Whatever the underlying cause for hiring new employees is based upon, growing businesses frequently make the mistake of hiring the wrong people. While they may consider a candidate’s resume or technical skillset, they don’t take nearly enough time to evaluate whether they’re a good “fit.”

When hiring employees, ask yourself questions like: Do they possess an attitude that meshes well with our mission? Are they willing to sacrifice short-term gains for long-term results? Do they understand the vision of the company?

3. Disorganized Accounting

When your business is small, it’s fairly easy to keep track of finances. But as your company grows, you’ll find that it takes a much more purposeful approach to keep accounting in line. One of the biggest scaling mistakes growing companies make is losing track of accounting and drowning in disorganization. Not only is this frustrating, but it can have serious tax repercussions and legal consequences. Here are some suggestions to avoid a similar fate:

  • Hire a full-time CPA or outsource it to someone who is responsible for staying on top of financials. This is no longer something you, the business owner, can handle in addition to your other responsibilities.
  • Get your accounts receivable under control. Simplify your invoicing process and don’t let anything slip through the cracks. A failure to collect timely payment can hurt cash flow and limit your flexibility.
  • Reconcile all accounts at the end of each month. If you wait until the end of the quarter, you’ll find that it’s far more time-consuming and difficult to uncover what went wrong, where it went wrong, and how it can be fixed.

Accounting isn’t sexy, but it provides significant peace of mind. When you have your finances under control, you’re freed up to focus on other areas of the business.

4. Too Much Debt

Debt is a strategic tool for growth, but it’s not something to become overly reliant on. Many well-intended founders have relied so heavily on debt to grow that they unwittingly handcuffed themselves and eliminated future flexibility.

Whenever possible, try bartering instead of taking on more debt. If you’re in the B2B world, this is especially useful. You can offer your services to a company in return for theirs. By building out this network, you lower your overhead expenses and prevent the need for excessive debt. Obviously this can’t be done with everything, but it is a valuable strategy in many situations.

5. Too Much Focus on Sales and Marketing

When growth is the primary focus of everything you do, you’re inclined to spend all of your time and resources on sales and marketing. After all, that’s how you get new customers! But this may actually be a mistake.

When all of your attention goes to sales and marketing, you neglect creating value for your customers. Innovation goes by the wayside, customer service takes a backseat, and the errors and kinks in your product fail to get worked out in a timely manner. The result is a sub-par customer experience that negates any progress you make on the sales and marketing front.

6. Failure to Listen to Early Adopters

Another problem with constantly marketing and selling is that you don’t take the time to listen to your customers. Your early adopters, in particular, will let you know what they like, don’t like, or want to see. If you’re the only one doing the talking, you’ll miss the chance to implement simple improvements before scaling up your customer base.

7. Failure to Develop a Culture

“If you’re scaling successfully, you’ve probably got great people working for you. Losing them at this stage is very easy if you’re not paying attention,” entrepreneur Matt Doyle writes. “Sometimes it’s just that responsibilities grow too fast, but I’ve also seen teams fail because the earlier members didn’t get along with all the new people who came aboard and didn’t understand/couldn’t maintain the culture that got you here.”

Culture is something you have to focus on from the very start. While it can evolve over time, it’s hard to go back and create an entirely new culture from scratch. Decide on what’s important and really instill these values in every existing employee and new hire.

Disciplined Scaling, Not Growth Hacking

This article isn’t meant to scare you away from growing, but it should give you pause and make you think twice before you pursue growth for the sole objective of getting bigger.

It seems that the biggest problem among today’s entrepreneurs and young business leaders is the belief that growth can be hacked. There’s even a buzzword for it: growth hacking. It’s the idea that you can implement a couple of shortcuts or find a few loopholes and grow your business in weeks or months, rather than years. Unfortunately, the notion of growth hacking has permeated the modern entrepreneurial mindset and led people to believe that they can do things that really aren’t possible or healthy in the long run.

Your primary objective should not be growth hacking. Instead, try focusing on what we’ll call disciplined scaling. You want to grow at a pace that’s purposeful, strategic, and steady. Sometimes this growth will happen fast, but more than likely, it’ll follow the gradual path of other successful groups, nations, and companies. And if this means avoiding a premature collapse, then by all means, slow and steady is a good thing.

Image: Depositphotos.com

This article, "The 7 Biggest Mistakes You Can Make While Trying to Expand Your Small Business" was first published on Small Business Trends



Cozycozy is an accommodation search service that works with hotels and Airbnb

French startup Cozycozy.com wants to make it easier to search for accommodation across a wide range of services. This isn’t the first aggregator in the space and probably not the last one. But this time, it isn’t just about hotels.

When you plan a trip with multiple stops, chances are you end up with a dozen tabs of different services — on Airbnb to look at listings, on a hotel review platform and on a hotel booking platform. Each service displays different prices and has a different inventory.

While there are a ton of services out there, most of them belong to just three companies: Booking Holdings (Booking.com, Priceline, Kayak, Agoda…), Expedia Group (Expedia, Hotels.com, HomeAway, Trivago…) and TripAdvisor (TripAdvisor, HouseTrip, Oyster…). They all operate many different services in order to address as many markets and as many segments as possible.

Cozycozy.com wants to simplify that process by aggregating a ton of services in a single interface — you can find hotels, Airbnb listings, campsites, hostels, boats, home-exchanging apartments… You can filter your results by price or you can exclude some accommodation styles.

The company doesn’t work with hotels and doesn’t handle bookings directly. Instead, the service searches across all the usual suspects. When you want to book, you get redirected to the original listing on Airbnb, Booking.com, Hostelworld, etc.

The startup recently raised a $4.5 million funding round (€4 million) from Daphni, CapDecisif, Raise and many different business angels, such as Xavier Niel, Thibaud Elzière and Eduardo Ronzano.

Cozycozy.com co-founder and chairman Pierre Bonelli also previously founded Liligo.com. It is one of the most popular flight comparison website in France. It was acquired by SNCF in 2010 and then eDreams ODIGEO in 2013.

cozycozy com page de resultats



What Help Do You Need to Improve Online Presence

Establishing online presence for small business requires careful planning and excellent execution. What help should you look for in this effort?

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Saturday, 29 June 2019

The IPO’d learn investing at First Round’s Angel Track

Startups depend on the angel lifecycle. A few flush post-exit individuals put the first cash into a fresh venture. With some skill and plenty of luck, the early team grows the company into a big success. It sells or goes public and those team members earn a fortune. They then pay it forward by investing in the next generation of startups.

If they hoard their spoils they starve the early-stage ecosystem or leave founders stuck with dumb money from non-strategic financiers. If they redistribute their winnings, they can influence startup culture by deciding what, and more importantly, who gets funding.

But how does a co-founder or VP learn to be a mini-VC? That’s the goal of First Round Capital’s Angel Track, a free three-month workshop series in San Francisco and New York for learning how to source, vet, close, and support angel investments.

Angel Track Class 1

A scene from Angel Track’s first cohort

Every two weeks, an expert on some part of the investing process like finding deals or interviewing founders talks to the class, does Q&A, and then leaves the group to openly discuss what they learned and how to use it. Angel Track sessions have been tought by some of the smartest people in the valley like growth master Elad Gil, #ANGELS founding partner and former Twitter VP of corp dev Jessica Verrilli, and Precursor Ventures managing partner Charles Hudson.

Hundreds of startup execs apply for the 15 spots on each coast. After two classes in SF and one in NYC, today First Round unveiled its recently-graduated third cohort from programs in both cities. Those include Lucy Zhang who sold Facebook her chat startup Beluga that became the foundation of Messenger, and Mented Cosmetics co-founder and CEO KJ Miller. By the end of the program they’re taking joint pitch meetings from startups, showing each other the best questions to ask.

As with Y Combinator, it’s as much about the fellowship between new investors as the education. “It’s both a community and a masterclass” says First Round general partner Hayley Barna who oversees the NYC Angel Track. “It’s about bringing a talented group of emerging angels together to build a productive cohort of collaborators.”

She says diversity and inclusion is a big goal of the program, and it features 50% women and 20% underrepresented minorities. Being rich is not a pre-requisite. Barna declares “We’re not pulling in the bankers and the traders doing angel investing as a side-hustle.”

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LOS ANGELES, CA – MARCH 29: Confetti falls as Lyft CEO Logan Green (C) rings the Nasdaq opening bell celebrating the company’s initial public offering (IPO) on March 29, 2019 in Los Angeles, California. The ride hailing app company’s shares were initially priced at $72. (Photo by Mario Tama/Getty Images)

After a slew of big 2019 IPOs from Uber, Lyft, Pinterest, Slack, and Zoom, there are plenty of newly-minted potential angels for First Round to teach. The venture firm benefits by building a cadre of co-investors or alternative backers for deals it vets, and through added visibility into the next top fundraises. Unlike some VC scout programs, there’s no formal obligation to send opportunities to First Round or pledge funding alongside it. That keeps it appealing to future investors that innovation hubs need to keep the circle of life flowing.

First Round Logo“A lot of angel investors that got their start in the mid-to late 2000s, they’re almost all fund managers now. They went from angels or super angels to venture investors” First Round partner Brett Berson tells me. “There haven’t been a lot of people who’ve come in and filled that gap”, which could stunt the ecosystem’s growth. Graduates ramp up their angel investing while often staying in their operating roles, though some like former Pinterest head of culture Cat Lee who became a partner at Maveron turn investing into their day job.

First Round partner Ben Cmelja who helped launch the program explains that “Some people are doing it for the financial return. Some people want access to new ideas and are curious. Some people have a specific type of community they want to support with their investments.”

What Investors Learn From Angel Track

Becoming a successful angel means a lot more than evaluating term sheets. Just like how ideas are a dime a dozen and it’s about who can execute, fundraises are frequent but getting into the right ones takes hard work. First Round focuses on many of the soft skills required to win. Participants receive mentorship on how to:

  • Develop an area of expertise and personal brand
  • Mine their network for deals and post-investment assistance
  • Assess market opportunities rigorously
  • Judge an unproven startup’s team and product
  • Convince a founder to let them into a round and negotiate terms
  • Support their portfolio companies without being annoying

How to approach the delicate power balance of meetings with entrepreneurs can be especially tricky, so I spoke at length with First Round’s Phin Barnes about the session he teaches on founder interviews. I wanted to get a taste for what it’d be like in the classroom, despite First Round declining to let me attend the real thing. Turns out having a journalist in the room can disrupt a safe learning environment for budding angels.

PhinBarnes 1 600x600

First Round partner Phin Barnes

“Investing is a sell-side product” Barnes stresses. “Capital is a commodity, especially in this market. What you’re saying with a term sheet is that you think the founder’s equity is worth more than your dollars.” That means investors have to close the value gap with sweat.

Barnes gives me what he calls the ‘chocolate soufflĂ© or brownies’ scenario. “The danger of being a smart, talented executive or entrepreneur is that when a founder talks to you about sugar and flour and butter, you start imagining a molten lava soufflĂ© cake you’d build with the ingredients. You invest, and then the founder comes back with a tray of brownies. ‘That’s not what I thought I invested in!'”

The mistake comes in envisioning what you’d do rather than really listening to the founder — the one who’s cooking. Instead of trying to hijack the roadmap or being disappointed by the direction, angels need to help make those brownies as tasty as possible. That means entering into interviews with an open mind.

“You should be positively inclined to invest and have some critical questions. If you don’t think you should invest, you shouldn’t have the meeting in the first place” Barnes explains. “You want to hold that perspective loosely and as new information comes to light, you want to check ‘Am I still interested?’ By the end you want to know what you don’t know, and the open questions you need to answer to validate your hypothesis.”

The four main areas of evaluation are:

The market — Why does this category of product need to exist? What would the world look like if they dominate the category? Can they clearly explain to a five-year old the problem they’re trying to solve? What’s their contrarian thinking? And what motivation will keep them persevering to address the problem despite setbacks and opportunity cost?

The product — Is addressing this specific customer problem unique and defensible? It’s less about if the product is good or bad, or should the button be red or blue. It’s more about how the founder took the inputs and made the decision and how they process information. Have them walk you through the go-to-market plan and see how they shift between high-level strategy and ground-level tactics.

The team — Do they have on-paper talent like PhDs or experience? Can they iterate quickly? You have to weed out victims and look for people who are learners that evolve when faced with adversity. Do your homework on who they are before so you can dig deeper into how they tick. Ask how they show trust in their team and how they get their team to trust them. Have them tell you about the most important thing that happened at the company in the last week to understand their priorities and emotional connection to the process.

The relationship with the founder — Investors need to ask what the best way to work with them is, and what founders are looking for in support from an investor. Do they want a hands-off investor who only chimes in when summoned, or do they expect frequent co-building sessions? Do they need more help accessing a bigger network for hiring and partnerships, or industry-specific expertise to navigate complex decisions?

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“We have two roles. We interview and then we coach” Barnes says, providing tips for both. “The very best questions are open-ended. They start with a how/what/why and end with a question mark. Double-barreled questions are terrible. Ask them what would you do, and stop. Get comfortable with silence. They’ll usually fill the silence with something off-script that reveals a deeper truth.” Only once has a founder asked Barnes ‘are you ok?’ in response to his inquisitive stare.

Being able to summarize what you’ve learned lets you quickly cross-check your assumptions with the founder and get helpful corrections. That helps you figure out what questions you still need to ask and keep a diligent list of what you’ll need to research after.

When it comes to giving an answer on whether you’ll invest, “Second best to a quick yes is a quick no with a strong point of view and information for the entrepreneur. The worst is ghosting people. 90% of people operate that way but that’s not the way to do it” Barnes emphasizes. “If you walk out without a yes, no, or what to learn more about in specific detail, you’ve failed as an investor and wasted the time of the entrepreneur.”

The antidote to dumb money

“It was like the perfect mix of your favorite college seminar and a super practical apprenticeship” says Ariana Poursartip, the VP of product for fintech startup Petal who was in the first NYC Angel Track class. “I came away with a better sense of my personal investing approach, and a community of fellow angel investors who I’ll continue to learn from for years.”‘

Fostering better educated angels is crucial for enabling founders. “Dumb money” from investors without expertise in a relevant space, connections they’ll leverage to help, or an understanding of what startups need can be dangerous. It can lead founders to raise more but inefficient capital and make slower progress that puts them at risk of a future down-round that can trigger a startup death spiral.

First Round Angel Track Cohort 3

First Round’s Angel Track cohort 3

First Round is far from the only one trying to fill the angel gap. “Initiatives like Spearhead, YC’s Startup Investor School, and scout programs help lower the barrier to entry for many people who will be terrific and helpful investors for startups” says Cmejla. Sequoia, General Catalyst, Village Global and more run their own scout networks. There are some questionable programs out there too, though, like Venture University which charges from $4,000 to $65,000 for its programs that require students to source deals in exchange for a hazy profit-sharing agreement.

Cmejla insists “It isn’t about providing the capital, a short crash course, or a path to becoming a full-time VC, but about building a durable community that members can lean on and lean into as they level up.” Instead, First Round scores a way to connect founders it funds with relevant angels from its classes. That incentivizes the firm to teach savvy etiquette. Barna warns “You want to be thorough, but if you’re putting in a small check, you can’t ask founders to jump through too many hoops . . . and spend five hours just to get that dinky paycheck.”

Past Angel Track participants like Poursartip and Instacart VP of growth Bengaly Kaba tell me they wish the program got them spending more time together both during and after the class, which could spur deeper alliances. “Currently the program ends and there is no formal programming to keep the alumni cohorts engaged and connected” Kaba notes. Many already back startups brought to the class by their peers. Still, Square Cash app product lead Ayo Omojola wanted a stronger structure like perhaps a syndicate so cohort-mates could do more investing together. 

What they all cited was the massive value of learning to codify what they’re looking for and what they bring to the table. Kaba highlighted how he enjoyed “Hearing how Elad Gil, [Floodgate co-founding partner] Ann Muira-Ko, Charles Hudson and other guest speakers defined their investment theses around macro trends, industry specific insights, and founder traits.”

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When the lock-ups expire on recent IPOs and employees start getting liquidity, “you’re going to see a whole new generation of investors get going over the next couple of years” says Berson.

Not every company spawns the same quality of investor, though. Companies like Uber that empower less-senior team members as the ride sharing company does with regional general managers tend to develop talent with the self-direction and conviction to be great angels. Looking back, you similarly see more angels and founders emerging from more decentralized Google than top-down Apple.

As software eats the world, unicorns proliferate, and the proceeds of tech’s winning streak are spread wide, more and more people will be ready to write angel checks. “It will most likely materially accelerate over the next 12-24 months” Berson concludes. Those without the skills could squander what they’ve earned. Angels who know what makes them special and can evaluate startups without getting swept up in the hype will crown the queens of tomorrow.



For a Crucial Key to Small Business Success, You Won’t Want to Miss this Event

Digital technology has improved virtually every aspect of business operations. This includes the customer side.

Being able to listen and respond to what customers say about your company is an invaluable edge. When used properly, the information can provide great insights into improving the products and services you offer.

In today’s business and information technology environment, the Voice of the Customer (VOC) is an in-depth process of capturing what customers expect, prefer and dislike.

“Listening to the Voice of the Customer” is a workshop by Applied Marketing Science (AMS) which will teach you how to listen to your customers. The workshop will be held from October 16-17, 2019 at the University Club of Chicago.

The workshop is a two-day event which will cover ways you can use customer information. This includes identifying customers for interviews and asking the right questions.

It also teaches how to analyze the information you have gathered about your customers to determine what they are most concerned about. This will be achieved with machine learning and journey mapping techniques, which will be explored in the workshop.

You can download the course overview here (PDF).

Get $100 off the course registration price by entering Discount Code SMALLBIZ.

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Featured Events, Contests and Awards

Listening to the Voice of the Customer Listening to the Voice of the Customer
October 16, 2019, Chicago, Ill.

Led by veteran product development and market research experts, this course will introduce Voice of the Customer (VOC) market research and teach you to use it to accelerate innovation in business-to-business markets. The workshop uses a lively, interactive format with numerous hands-on activities and practice exercises to build skills and will also expose you to the latest applications of these techniques in areas such as machine learning and journey mapping.
Discount Code
SMALLBIZ ($100 Off)


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You can see a full list of events, contest and award listings or post your own events by visiting the Small Business Events Calendar.

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This article, "For a Crucial Key to Small Business Success, You Won’t Want to Miss this Event" was first published on Small Business Trends