Saturday, March 19, 2016

Beneficence: Looking Out for The Welfare of Your Customer

One should render positive assistance to others (and abstain from harm) 
by helping them to further their important and legitimate interests. 

I heard Max Levchin, the 40 year-old entrepreneur famous for his roles in Affirm, Glow, Slide, Yelp, Yahoo, and Paypal, say, "You can conduct yourself as a business ACTIVELY DOING GOOD for your customer."  

We live in a refreshing time in the world of business.   As technology has made the world smaller and connected us, people are beginning to care about each other and what we do to live in this world.  The internet has us doing commerce with people who are not local.  We need to trust people we may never meet when we buy and sell things online or live in other people's homes via Airbnb.  

In business, ethics go beyond doing what is contractually right.  In today's business economy, being emotionally intelligent and having relationally mature people-skills is a trend that has replaced the "buyer-beware" horse trader doing harm mentality of previous generations.  

Doing good to our neighbor, once viewed as a liability in business, is now a competitive advantage for those who are truly good people with motives to help their customers.  Let's face it.  People are tired of playing "Got ya" games in business.  Ethical principles in the new world of business are:

  • Actively do good to your customers (internal and external) so that work matters and is making a positive difference in the world. 
  • Business focus is on people, products, and purpose--not just profit.  
  • Company loyalty comes from work being a family that supports its employees families.  
  • A work environment needs to value those who create its value.  An unpleasant work environment is not tolerated today.
  • Be accountable

Are you an early adopter or laggard in the new business world? How you answer this question has a lot to do with where you are on the continuum of success.  

Monday, March 7, 2016

When I Start a Business How Do I Pay People Without Money?

Business Incubator and Activator Series 1.1

Last year my son and I pondered launching a consulting business together.  As always, startup capital and which of us would get paid as partners (and how) were on the table.  He had left his day job and I had not.  So that was question was easy!  

At the time, we were working as consultants with John Gavigan and 43 North, the wildly successful Buffalo, NY incubator and activator at the heart of the Buffalo business renaissance.  In new ventures, a common question by the entrepreneur is: "I really need a partner for startup capital, but we have not gone to revenue yet.  Got any ideas?"  As a matter of fact, yes, I do.

I can’t pay them…

Who says you need to? You can get people to work with/for you by providing many different forms of compensation besides monetary. Sounds far fetched and I really doubted this at first, my initial impressions was that people would only work with you if they have a deep stake and feel like they’re part of the founding team. WRONG.
Here are some alternative ways of compensating people who can help you build your startup:
  • Equity – yes, you can give equity without making someone a co-founder. Just make sure it’s vested.
  • Revenue sharing – and agreement to split the equity generated from a specific project/product. You can add clauses that limit duration and determine the portion of the split.
  • Strategic partnership – working alongside partners to provide them value with your product/service in exchange for them helping you build it up.
For help getting past constraints and roadblocks as you build your business, email me anytime!  --Kevin