Does Company Culture Matter?

It has been a few months now that I’ve been writing this blog for TechSandBox. As an incubator, we work closely with several new businesses, and although I’ve written on various topics related to startups, it occurred to me that I hadn’t written about company culture. It got me thinking about what exactly defines corporate culture and whether it is important to the success of a company. Entrepreneur Media’s Small Business Encyclopedia defines Corporate Culture as “A blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time.” It takes time to create the right culture, but it is imperative to start early.

As a new founder sets out to build a company of his or her dreams, the values and beliefs of the person tend to form the foundation of the corporate culture. They are the ones who found the company with a vision and then recruit like-minded employees who are able to validate their visualization of the business. I decided to devote this blog post to what some successful entrepreneurs have said about corporate culture, with the hope that this will inspire any new founder when developing their own culture of success.

Quotes from 10 Successful Entrepreneurs on Company Culture

“At Zappos, we really view culture as our No. 1 priority. We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself.” — Tony Hsieh, CEO of Zappos

“Our culture is friendly and intense, but if push comes to shove we’ll settle for intense.” — Jeff Bezos, Founder and CEO of Amazon.com
http://www.huffingtonpost.com/vala-afshar/100-tweetable-business-cu_b_3575595.html

“It can’t be all of a sudden. It has to be consistent throughout. You invest very heavily and thoughtfully in deciding what kind of company you want to be. And then you repeat it, over and over and over again.” — Jeff Weiner, CEO of LinkedIn
http://www.businessinsider.com/linkedin-ceo-jeff-weiner-on-leadership-2014-9

“We will never—and I mean never—turn our backs on our employees.” — Howard Schultz, Chairman and CEO of Starbucks
http://thehiringsite.careerbuilder.com/2011/06/03/howard-schultz-on-how-starbucks-got-its-groove-back/

“Having a clear mission and making sure you know that mission and making sure that mission comes through the company is probably the most important thing you can do for both culture and values.” — Brian Chesky, Co-Founder and CEO of Airbnb
http://www.azquotes.com/quote/1025626

“You have to be a place that’s more than a paycheck for people.” — Rick Fererico, CEO of P.F. Chang’s
http://www.quantumworkplace.com/fortune-seek-cookie-employee-engagement/

“You can build a much more wonderful company on love than you can on fear.” — Kip Tindell, Chairman and CEO of The Container Store
http://www.quantumworkplace.com/12-inspiring-quotes-workplace-culture-zappos-starbucks-google-more/

“I don’t think a lot of founders really want to hear this, but you set the tone from day one, so who you are is going to be reflected in the culture of the early team. So for us, that was a culture of being scrappy, but honest. Working hard, but also having that sense of balance and sort of respecting one’s life outside the office. Making it happen no matter what.” — Julia Hartz Co-Founder of Eventbrite
http://labs.openviewpartners.com/entrepreneurs-achieving-work-life-balance/

“Build a company with a killer culture, not a culture that kills your company.” — Matthew Corrin, Founder and CEO of Freshii
http://www.fastcompany.com/3030569/hit-the-ground-running/when-founding-a-company-with-no-experience-isnt-a-huge-mistake)

“Restore connection’ is not just for devices, it is for people too. If we cannot disconnect, we cannot lead. Creating the culture of burnout is opposite to creating a culture of sustainable creativity. This is something that needs to be taught in business schools. This mentality needs to be introduced as a leadership and performance-enhancing tool.” — Arianna Huffington, Co-Founder and Editor-in-Chief of The Huffington Post
http://www.forbes.com/sites/ekaterinawalter/2013/09/30/50-heavyweight-leadership-quotes/

To conclude, creating and preserving a strong corporate culture does play a big role in the success of a company. If you’ve built an organization where your employees take pride in what they do and where they work, then you are on the right track.  It’s cultures, behaviors, and values that truly attract people to work at startups and stay loyal to the company.  It’s never too early to have this discussion with your founding team!

Pitching It Perfectly

A pitch deck for your startup should be on point and informative. It needs to be crisp, tell a good story and flow well. Articulating your plan through an effective elevator pitch and a sharp presentation can propel your idea and give you the break you are looking for with your audience. So how do you go about developing your perfect pitch?

Know your audience

One size does not fit all. Depending on who your audience is, you will need to deliver a perfectly tailored pitch for your startup. Therefore, you must be prepared with a short 30 second elevator pitch, a succinct 2-3 minute version, and a 20 minute detailed presentation. When founders use a cookie-cutter template to pitch their startup, they often fail to make the desired impact. Even the greatest startup ideas can fail to gain traction with an investor because of a weak pitch. It is important to focus on who you are pitching to and then customize your pitch to the specific audience. If you are trying to impress an investor, you will need to demonstrate how your business will fit in with the rest of their portfolio. Find their sweet spot and tailor your approach to tell a compelling story.

Formulate your message

The goal of your pitch should be to fuel the interest of your audience, and not to discuss every aspect of your startup. Be sure to explain your business and idea clearly so that your listeners can understand what you are bringing to the table. Present the problem you are trying to address and communicate why your offering is the perfect solution. You will get more interest if you are able to show proof of concept rather than just an idea so you can demonstrate its feasibility. Make sure to be on point and convey your value proposition clearly.

Back up with data

Once you have been able to capture the interest of your audience, you may need to delve into more important details of your business. If you have researched the market, you will know who your competitors are and you should be prepared to review your competitive advantage. If there is a similar concept in existence, you will need to demonstrate why your idea is better than the competition’s. Explain your launch plans and milestones and your strategy behind it. Introduce your management team and key players. Most importantly, outline your business model and how you are planning to make money with your offering. Financial projections and key metrics are things investors are most interested in. Showing any pre-sales commitments that you might have is a promising way to get your foot in the door with a potential investor.

The 10 slide PowerPoint

Whether you are pitching your startup to raise funding, recruit a co-founder, make a sale or form a partnership, you will need to develop a top-notch presentation. According to Guy Kawasaki, successful entrepreneur, publisher and author of The Art of Social Media, The Art of the Start, and many other books, all you need are 10 slides to make your perfect pitch. His proven and tested presentation rule is to summarize key information for your pitch using the “10/20/30 rule”—10 slides, 20 minutes and no font smaller than 30 point.   If you’ve addressed the potential questions that investors will have in your 10 slides, your pitch deck will get the attention it deserves.

In conclusion, it is best to develop your own unique pitch and tell your own compelling story. Although, you can review some of the best startup pitches of successful companies as you look for guidance with developing your pitch deck. TechSandBox will be hosting our Annual Pitch Fest Competition on December 10^th, 2015. If you’re interested, you can come practice your pitch beforehand and get feedback from the experts on November 5^th, 2015 6:00 p.m. – 8:30 p.m.

As We Head Towards An Internet of Everything

The old Internet ran on computers for business. It was a complicated system used only by engineers, scientists, and the like. It was certainly not as friendly as it is today. With a change in behaviors and technology, we evolved from an Internet used by just technologists to one for computers used by consumers and businesses and are now heading towards a new Internet – the Internet of Everything!

The Internet of Things (IoT), as it is labeled, is a network of “things” that are embedded with electronics, software, sensors, and network connectivity, which allows these objects to collect and exchange data. We are rapidly moving from an era of just connected devices like the personal computer, phones and televisions to one involving smart homes, smart offices, smart cities, and in essence: a smart world. Nowadays, everything seems to be connected and smart cars and refrigerators that monitor expiration dates of its contents are no longer things that you just see in a science fiction movie.

New types of connected devices are cropping up everyday, and even tomatoes are now IoT! Wireless sensors are being used to control and improve the soilless production of organic tomatoes. As we reap the benefits of conveniences brought about by smart technologies, there is one big disadvantage – that of cyber security. The threat to data and personal security is real, and it will only sky rocket with the emergence of newer technologies. With every device or sensor in the IoT being subject to potential risks, how can a business protect the vulnerability of its assets?

Wearable technology for fitness, eye ware, smart pills, and medical devices come with the hope of improving health of people by collecting relevant personal information. They aim to deliver early interventions to improve future wellbeing. But how do we deal with the invasion of privacy issue with the looming security concerns that accompany technology? Buyers are starting to expect more from businesses to protect their personal information. Without the precise privacy controls in place however, exposing details about an individual’s life could jeopardize the use of data collected in ways never imagined.

The Internet is getting friendlier than ever before, and you can no longer expect to be a stranger to people that you’ve never even met! Social media has enabled people to connect with others, thereby making the world a much smaller place. Using smart technologies such as facial recognition software from FacialNetwork.com for example, “a user can simply glance at someone nearby and instantly see that person’s name, occupation and even visit their Facebook, Instagram or Twitter profiles in real-time,” according to the company.

So where are we headed with this Internet of Everything? The Internet of Things already has manufacturers of ordinary everyday things converting into first-time software vendors. Gartner forecasts that, “an estimated 25 billion connected things will be in use by 2020”. Smart technology that gives us instant access to information and individuals has made a permeating entry into our lives. Coupled with this, smart devices are now making so many of our decisions for us that it feels like we are actually becoming dumber, and not smarter, as we slowly increase our dependence on them. With much more to come, it’s certainly going to be an interesting future!

Why You Should Find Yourself a Mentor

Building a startup is not an easy task, especially for a new entrepreneur. There is no magic formula that guarantees success. Whether you are in the early phases of your startup or further along, it is always good to have a strong mentor to inspire you, as they have been where you are. According to the findings reported by the Startup Genome Project, “Founders that learn are more successful. Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.” A seasoned entrepreneur can be instrumental in the success of a startup.

Aspiring entrepreneurs face tough decisions every day, whether it is navigating funding, structuring the company, defining product strategy or building the brand. According to William Mougayar, a venture advisor & serial entrepreneur, “A good mentor is probably thinking 2 or 3 steps ahead of you in a given situation, because of their experience. They can walk you through their thinking process, and cut to the chase.” Developing effective relationships with qualified mentors and learning from their success can help founders take their business to the next level.

A good mentor is a trusted adviser who can correctly guide a new company. Well networked and influential entrepreneurs may seem out of your reach, but if that’s who you are seeking, you can still try to get on their radar. Mark Zuckerberg was able to find an inspiring mentor in Steve Jobs. The two developed a relationship based on mutual respect and when Jobs passed away, Zuckerberg posted this on his Facebook page, “Steve, thank you for being a mentor and a friend. Thanks for showing that what you build can change the world. I will miss you.” A mentor does not necessarily have to be a big name C-level executive. It may be someone who has achieved success in your industry or is an expert in an area that you need help with. Most importantly, it must be one who believes in you and your vision, and makes time for you.

Mentors are available everywhere, however, it is important to find the right one for you. It is easier than ever to connect with people as it is a smaller world now with social media such as LinkedIn and other online resources. Conferences and startup events also provide a platform to meet the right mentor who could end up being your friend, philosopher and guide. TiEcon is one such conference hosted by The Indus Entrepreneurs (TiE), a global organization that fosters entrepreneurship and offers plenty of opportunities to network. Through its MentorConnect program, founders can connect with experienced entrepreneurs and learn from their entrepreneurial journey. Learning from the experience of someone who’s “been there, done that” can help you steer clear of pitfalls as you maneuver your company to success.

For a budding entrepreneur, incubators are also a great place to cultivate a mentor relationship. Techsandbox, for example, accelerates innovation and success by delivering the resources, expertise and community to entrepreneurs in the Metrowest. The Experts On Site™ offers access to experts on topics like intellectual property, business formation, benefits, taxes, marketing, sales, funding, product design and technology commercialization. Sharing co-working space provides the opportunity to brainstorm and network with like-minded individuals and casual conversations in the coffee room are a real plus.

If you’re an entrepreneur interested in finding a mentor, register for Mentor Link on October 15, 2015, 6 p.m. – 8 p.m. at Techsandbox. It is our version of the best of crowdsourcing, LinkedIn, Meetup and more! You will have the opportunity to pitch to potential mentors that will be in attendance at the event.

Startups Must Make Security A Priority

We live in the digital age. Everything around us seems to be IoT enabled and we find more and more that apps are running our lives. With this dependence comes the expected risk of hacking and concerns around privacy as new cybersecurity threats surface.

Security and data breaches are no longer problems faced only by banks or financial institutions. The threat is the same for large tech giants and startups alike. Not having appropriate security measures in place can result in hacked applications and invasion of private data, thereby putting customers and businesses at risk. Even for a new tech startup, it is critical that developers keep up with the latest application security flaws and be equipped to create secure applications right from the start. The Open Web Application Security Project OWASP Top 10 identifies the most critical web application security threats and is a good place to start as you begin to adopt a culture of secure development within your company.

Most often, when resources are lean at startups, security is not a priority. The focus is on product development and revenue generation and developers are not always thinking about security when coding an application. Training developers on coding securely is crucial and will help lower risks and save on costly fixes in the future. Besides, developing secure applications can prove to be an important competitive differentiator and value-add for a startup.

An effective way to ensure application security is to conduct penetration tests and secure code reviews. Penetration testing is a kind of “ethical hacking” and is used to test the external perimeter security of a network. A code review is a systematic examination of computer source code. Both these methods provide quality assurance and peace of mind by identifying security flaws. It is wise for a startup to budget for such services and put good safety measures in place.

In addition to making its applications secure, it is also important for a company to protect itself from data breaches by training its employees. According to IBM’s 2014 Cyber Security Intelligence Index, 95% of data breaches are caused by human error. Empowering employees with information on things like password security, email security and phishing awareness will help companies safeguard sensitive data.

The take-away here is simple: startups cannot overlook security and must have a comprehensive security plan in place. Hackers are only getting smarter. Educating developers and employees on potential security threats and relevant risks is the first step. Paying close attention to security in the early stages of the product life cycle will have benefits in the long run.

Here at TechSandBox, we have “Privacy and Security in the Age of IoT” on our calendar for September 24^th. We are fortunate to have Steve Duplessie, Senior Analyst at ESG, as our speaker. Steve is an internationally recognized expert in IT infrastructure technologies and markets, and a much sought-after speaker at conferences and industry events worldwide.  We hope you will attend this informative and thought-provoking program. Click here to register.

Running a Startup by the Numbers

If you don’t measure it, how do you know if you succeeded? Source: Running a Startup by the Numbers

Source: Running a Startup by the Numbers

Have You Blogged Yet?

The transformation of a startup stemming from an idea to a product can be challenging. It can take years of research and development to develop a solution and then demonstrate the validity of your offering to address a pressing market need. Along the way, you will have to attract investors, secure funding and build a dedicated team that will take your startup to the next level.   Gaining traction in the marketplace and promoting a business is crucial, as that will help attract customers, thereby aiding the growth of your startup. But with the limited marketing resources available to most startups, how can you gain the kind of publicity that will keep the focus on your startup? Marketing can be expensive and you need to make your dollars stretch by spending your budget wisely.

So why should you blog? Blogging is an effective and inexpensive way to market your startup. It does not matter what stage your startup is at – blogging keeps you in front of your customers. In fact, here are some interesting blogging statistics from HubSpot:

• Marketers who have prioritized blogging are 13x more likely to enjoy positive ROI (HubSpot State of Inbound, 2014)
• 82% of markets who blog daily acquired a customer using their blog, as opposed to 57% of marketers who blog monthly –which, by itself itself, is still an impressive result. (HubSpot State of Inbound, 2013)
• Nearly 40% of US companies use blogs for marketing purposes (eMarketer, August 2010)
• 79% of companies that have a blog report a positive ROI for inbound marketing in 2013 (HubSpot State of Inbound, 2013)

Whether you want to reach customers, communicate your knowledge, or take part in an exchange of ideas, blogging will do it for you. So, before you start to blog, you must first decide what your goal is and who your target audience is. For example, in the early days of your startup, you might want to consider blogging about your industry. If you have a unique product offering which is relatively new in your industry, blogging can position you as a thought leader. Brainstorming on topics and planning out a blogging strategy will ensure that you have a balanced stream of things to write about. You can convey customer successes through your posts or encourage employees at your startup to contribute articles to the blog. You could perhaps write about something relevant that just made the news. You can differentiate yourself by writing about future trends in your industry. The key is to develop steady content and consistently push out quality blog posts that speak to your understanding and expertise in your space.

So now you have a blog and are writing a blog post every week. Now what? A blog is only effective if you can market it strategically to increase viewership. Here are some ways to promote your blog:

• Link your blog to your company web site
• Have it in your email signature
• Promote it through social media such as LinkedIn, Twitter, Facebook
• Get your employees to share it on social media
• Spread the word through family, friends and contacts
• Set up an RSS feed to allow people to receive updates to your blog automatically in their feed reader
• Comment on other blogs and link back to your blog

As you build your readership and get more blog views, you will begin to see results. There are various inbound marketing tools you can use to reach your customer. Social media, search engine optimization, email marketing, and analytics are surefire ways to keep you in the limelight. It is the age of digital marketing and there are many ways to find customers; however, blogging is definitely an inexpensive and efficient way to help potential customers find you!

Running a Startup by the Numbers

If you’ve just started a new company, it is likely that you have the confidence, knowledge, and determination to achieve your business plan. You focus on building your product and doing market research to find the right market. You’re on a roll.

As you get caught up in those crazy startup days, it is always important to take a step back and look at your numbers to make sure that your financial house is in order. Often, running out of money does not cause a startup to fail but rather it is an indication of a much bigger issue. The cash tends to dry up quickly when other symptoms of failure have been overlooked. Therefore, it is imperative for a new company to have a thorough understanding of the numbers that drive the business, because if you fail to plan, you are planning to fail!

Let’s consider a hypothetical company with sales increasing at the rate of 15 to 20 percent every month. Although profitable, the company always seems to be cash deficient. It would be a mistake for the company to focus simply on the revenue growth in this instance, and ignore other numbers, as ultimately, it would lead to failure if the business were stifled for lack of cash.

On the other hand, if an entrepreneur has a solid grip on his company’s financials, he will be able to recognize that if sales dropped and accounts receivable stepped up, there can still be a miraculously upsurge in cash flow. The funds can then be used to pay suppliers and get working capital back to the correct levels.

So what numbers do you need to track to run a successful business? Here are a few things you can look at to get started:

• Working capital: It is calculated as current assets less current liabilities, and is used to pay for short-term obligations such as accounts payable and inventory. A good rule of thumb is to have $2 of current assets for every $1 of current liabilities.
• Revenue: Monitoring your sales on a periodic basis allows you to know how close you are to reaching your goals. When sales are low, tracking metrics such as number of sales calls, number of proposals submitted, close rate and average price per sale further help you determine if you are on track.
• Gross profit: This is how much money you have left after subtracting the direct cost of producing your product from your revenues. The higher your gross profit the better, as you need to have enough remaining to pay other overhead expenses and still make money.
• Profit margin: Subtracting your total general and administrative expenses from gross profit divided by sales gives you your profit margin. It is important to remember that when operating expenses increase, so should the gross profit margin.
• Marketing expenses: It is important to compare marketing expenses and sales to know the effectiveness of your marketing strategy. For example, if an increase in advertising expenses don’t translate to a spike in sales, maybe its time to revisit your marketing strategy.
• Research & development: A savvy entrepreneur will set an R&D budget based on estimated costs needed to achieve a certain goal. Although R&D is critical for continuous product innovation for a new company, it must balance other forces in the marketplace and align with the overall business strategy and planning to make the investment pay off.
• Operating Cash Flow: This is how much real cash a company generates from its main business after all the goods sold, expenses and inventory purchase. In the early stages of a business, negative operating cash flows are common. Once the company reaches a growth stage, it will start to build revenue, and positive cash flows will follow. Tracking a cash flow statement will help business owners to ensure that the company is moving from a startup phase to a growth stage.
• Return on Capital Employed: This indicates how efficiently a company is able to use capital and is calculated as Operating profit divided by Capital Employed. A Return on Capital Employed of over 15% signals a strong business.

Although the temptation to rely on accountants is strong, savvy business owners who make sure that their financial house is in order have a huge advantage, as understanding their numbers can result in long-term success. After all, isn’t it more important to have a successful exit than just a favorable entry?

Running a business by the numbers is a program that we have on our calendar this month at TechSandBox. From cash flow to expense tracking to margins, fees and tools, our program will cover what numbers need to be tracked for a young business and how to do this efficiently. Be sure to register here for this very informative workshop.

What Exactly is Clean Technology and Why Does It Matter?

Today, using clean technology is all the rage. Or, should be!  If you always feel a little left behind and confused when new trends take over, then this post is for you! Simply put, clean technology is the reduction of environmental waste and negative impact through environmentally positive technology products and services.

The drive behind creating clean technology is the fear of running out of the necessary resources for life!

Sustainable living aims to reduce the carbon footprint of a human.  Some ways to reduce this carbon footprint are to improve transportation, understand and make choices — such as food — based on how it is grown and where it is sourced, and to use renewable resources. Clean tech aims to minimize everyday waste by developing new and improved products. In the press are, of course, battery powered cars (rechargeable without particulate emissions) and solar panels.

Clean tech is constantly targeting different environmental solutions, but a big problem that is currently a focus is on water use and consumption.  With the current drought in California, reducing water consumption has quickly worked itself to the top issue.  The use of timers when watering gardens or taking showers has become is an example of using technology to help.  Reservoirs in California have seriously begun drying out, which has alerted some serious change throughout the country including more effective desalinization processes.

Even using less paper for our work — digitizing books to documents to photographs is a form of clean tech.  There are efforts to capture wind power and water power, to grow crops locally and to create efficiencies in how energy is used.

These are only a fraction of the developments in the clean tech industry.  If these are of interest or if you want to learn more, come join the Clean Tech and Energy Special Interest Group. Programs are held on the 3rd Tuesday of every month.  Also see MassCEC calendar. As always, we here at TechSandBox wish you a happy and sustainable day!

How to Impress Angel Investors

It has been said that an idea is worthless unless you use it.  Often in reality, an idea is difficult to execute without some form of funding.  At this point, some of us would be counting on a miracle.  This miracle sometimes turns out to be an angel investor.

An angel investor is a successful (or wealthy) businessperson looking to invest their own money into a business plan, product or an idea. This is juxtaposed to a professional investor (VC or bank) where it is other people’s money (OPM). Meeting an angel investor is particularly advantageous for small businesses.  Angel investors operate on their own terms.  When looking for loans or other types of investors, there  are usually onerous requirements or a long wait period of uncertainty .  Angel investors invest their own money, so if they believe in you and/or your company, you have a good chance of winning their support.

There are professional angel groups and there are the ‘hidden’ investors who have the funds but may be less formal.  Angel investors are not always experienced venture capitalists, as they often depend on their own opinions and interests when investing their money.  To impress an angel investor, do some research on their interests.  Find out what they support, what they dislike, and maybe even some companies they may have invested in before.  Then, evaluate whether or not you believe that your own company would fit within the investor’s investment profile.  If the answer is yes, then approach the angel and target what you believe is a commonality between your company and the investor’s opinions.

The best way to approach them is to find someone to help refer you. This is where an active network is imperative. Also, go to where other entrepreneurs and investors ‘hang out’ and make connections.

If the the thought of approaching an angel investor is of interest, consider visiting here or here to find some investors online.  Angel investors exist in order to help small businesses like yours.  As always, TechSandBox is here to help you; we have programs where there are angels on panels or in the audience.  We have also held events like Piranha Pond in the past where entrepreneurs had the opportunity to pitch to venture capitalists and angel investors.  Keep an eye on our calendar for future events.  We wish you the very best of luck on your journey to success!