Let your values lead the way

A few weeks ago when Boris wrote about overcoming decision paralysis, I shared a comment that I make important decisions by evaluating my choices based on how they align with my core values. For years now, I have been encouraging nearly everyone that I meet to take some time to reflect on his or her values for this exact purpose (among many others).

People often talk about the importance of leading a value-driven life or business, but what exactly are values? They are at the core of our happiness, the source of our inspiration, and foundation of our close relationships. They serve as our compass and guide our decision-making.  They shape our character both in our personal lives and at work.

The importance of values in building a company

Values don’t just help you overcome decision paralysis. Living and leading with your values, as well as being mindful of the values of others, is helpful on many levels when building a startup. For example:

  • In finding your entrepreneurial purpose.  When you live and work in the Valley, the entrepreneurial spirit is contagious. I often meet engineers who have the drive to be a founder of a company but are stumped about what exactly to build.  In these cases, I encourage them to brainstorm pain points that they have experienced as well as reflect on how solving these problems aligns with what they value.  If you are building a surface solution that doesn’t resonate deeply with or inspire your core being, you will quickly lose your passion to build your startup.

  • In building a product. Many startups today understand the importance of staying lean and creating a minimum viable product (see our list of resources, under “Lean Startup”). But how do you stay focused on the priorities amidst a long list of features you want to implement? One effective method is to think about your users’ values. Create a persona for each user type – outline their demographic information, roles, personalities, and most importantly, their motivations/values.

  • In hiring.  Yes, it’s important to find the right technical talent. But you also need to hire people who are aligned with your company’s values and passions. Otherwise, you’ll be stuck with high turnover rates and hefty recruitment costs as employees choose to leave because of lack of fit.

  • In developing people and culture.  Free meals, gym memberships, etc. are perks, not culture. Great leaders constantly communicate their vision to their team. These leaders know that shared values lead to greater ownership and accountability, and ultimately more creativity and innovation. For instance, PayPal’s president, David Marcus, was criticized last week for chastising employees in an email for refusing to download the company’s app. However, David’s intent was to cultivate PayPal’s culture by strengthening their collective purpose and passion, while encouraging those who are less engaged to “go find something that will connect with [their] heart and mind elsewhere.”

  • In sales / fundraising.  Learn what your customers and investors value and appeal to these values with good storytelling. That’s the best way to make an impact.

Identifying your values

Years ago, while doing my PhD, I was introduced to an exercise designed to identify your core values. This was such a transformative experience that to this day, I continue to recommend it in some capacity to nearly everyone I meet.

To figure out what your personal or your startup’s values are, begin with a long list of values (as an example, see the bottom of this post).  Start by selecting all that you care about, and then narrow them down to 10, then down to 5, and maybe even 3.

My personal values are compassion, continuous learning, and freedom, while my professional values are leadership, positive change and optimization.  Knowing myself in this capacity made the decision to work in venture capital an obvious and right one for fostering my development and growth.

What are your core values?  Did you learn anything new or surprising about yourself in this process?

List of Values

Accountability

Excitement

Peace

Achievement

Fame

Persistence

Adventure

Fairness

Personal Expression

Aesthetics

Family

Play

Affection

Flexibility

Pleasure

Authenticity

Forgiveness

Power

Autonomy

Freedom

Purposefulness

Balance

Friendship

Quality

Beauty

Fun

Reason

Career

Faith

Recognition

Caring

Happiness

Relationship

Challenge

Health

Religion

Change / Variety

Honesty

Resourcefulness

Collaboration

Honor

Respect

Commitment

Humor

Responsibility

Communication

Influence

Safety

Community

Inner Harmony

Security

Competency

Innovation

Self-Worth

Competition

Integrity

Sex

Connectedness

Intellectual Status

Social Justice

Contribution

Justice

Social Status

Cooperation

Knowledge

Spirituality

Courage

Leadership

Stability

Courtesy

Learning

Strength

Creativity

Leisure

Success

Dependability

Location

Support

Dignity

Love

Team

Discipline

Loyalty

Tolerance

Drive

Mental Stability

Trust

Economic Security

Order

Truth

Environment

Organization

Wealth

Excellence

Partnership

Wisdom

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Investors need to actually use their portfolio products

PayPal President David Marcus recently stirred up the hornet’s nest with a memo scolding employees for not installing and using the PayPal app. In part, the email read: “Everyone at PayPal should use our products where available. That’s the only way we can make them better, and better.” (you can read the complete text of the email here). While Marcus’ memo touches on numerous high-level debates like passion vs. paycheck, there’s one important message for start-ups, managers, employees, and investors alike: Eat your own dog food.

Investors, really? Should an investor really be expected to use the 10, 15, or 20 products in his or her portfolio? I say absolutely. After all, a great product is the basis for a successful company and an investor who doesn’t understand, know, or use the product is most likely a sub-optimal sparring partner and advisor.

A PayPal spokesperson further clarified the message of the memo: “We really want to be driving the best customer experiences that are possible. And part of that is having every employee be the customer and utilize our services wherever you can, and if you see a problem, highlight it and tell people to get it fixed.”

As an investor, using a portfolio company is easier when dealing with consumer apps and companies. For example, I’m a regular, sometimes heavy, user of Frank & Oak, Indiegogo, Indochino, Escapio, Clarity, Smore, tindie, and Twenty20. My wife uses Julep and Chloe & Isabel.

It’s naturally tougher to be a user for business apps, particularly vertically-focused apps. For example, Figure 1 is a photo-sharing app for medical professionals and Clio offers practice management software for lawyers. And I’m neither a doctor nor a lawyer.

In these cases, the investor should at least sign up for the service to get a high level impression of the workflow and user experience. As a start-up founder, you should make it a priority to include product presentations in board meetings or schedule separate sessions to go through the product demos.

At the end of the day, the more hands that touch your product, the greater the opportunity to improve the user experience. And you don’t necessarily want to trust the opinion of advisors who have never used or tried your product.

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Marketing has never been harder than it is today

There are more start-ups being launched than ever before, while at the same time there are more ways to reach an audience. As a result, consumers and companies alike are being bombarded with marketing messages…whether it’s in a social media newsfeed, in an email inbox, or through content marketing. Cutting through that noise has become really difficult.

At the same time, the marketing strategies have become more complicated to excel at, particularly for small start-ups with minimal resources. There’s always been an inherent tension in marketing: on one side, the creative, free-thinking, “sudden genius” that builds a brand over time, balanced by the data-driven approach that relies on metrics like conversion rates and methodical a/b testing. Like the Yin and Yang, one cannot exist without the other. But both camps have dramatically changed over the years – which makes today’s marketing so complicated.

First, on the creative side…

Consumers today expect to have a different relationship with brands and businesses than in decades before. Social media essentially gives consumers a megaphone and they expect a two-way dialogue. Perhaps more importantly, consumers are looking to connect with the human side of a business, and only want authentic stories and messages from their brands. All of this requires a new tool set: marketers need to dig deep to become authentic storytellers.

On the data-driven side…

Just a few years ago, metrics folks mainly focused on search engine marketing (including both paid and organic) – with the single mission of appearing higher in rankings and getting noticed in a search engine’s results. Today, there’s a whole new landscape. With social media, there’s an explosion of micro-targeting opportunities. For example, marketers can hone in on new moms of a certain age or married men who drink coffee and own a dog. Likewise, mobile has introduced a completely new distribution platform with a very different set of rules than traditional search engine marketing.

The bottom line

It’s difficult to find the right talent to fill both the creative and data-driven roles, much less to find the Yin and Yang in the same person. Few CMOs in large companies would consider themselves to be strong in both disciplines.

As story-telling and hard-core data-driven marketing become more important and more complicated, we are looking for founders that are great in both disciplines, or at least recognize that both camps are necessary to gain attention and relevance with today’s audience.

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A good story is the key to any pitch

When it comes to putting together your pitch deck and preparing for an investor meeting, there are countless articles and advice you can refer to. For example, we have a list of articles on our Resources page (see under “Pitching”). And one of my favourite blog posts is Tomasz Tunguz’ “7 questions a startup should answer in their fund raising pitch.”

These types of articles do a great job of telling you what to cover, but they don’t necessarily dig into how to deliver your message. And let’s face it. Bullet points alone rarely inspire; it’s the way your pitch flows and how you unveil information that gets your investors and customers excited.

Each day we connect with multiple entrepreneurs. Without a doubt, the ones who stand out are the ones who share a great story. We are more engaged when we hear a narrative of events as opposed to a list of facts, because we immediately decode the words into something meaningful to us.

If storytelling can make or break a conversation, pitch, or demo, how do you make sure you are telling your story in the most compelling way possible? Here are a few tips:

1. Tell your organic story

Fifty start-ups may have a relatively similar business model, so what makes you and your team unique? As investors, we want to hear the back-story: how is it that you came to the idea for your product and startup? For example, were you looking to solve a pain point that you experienced firsthand? That’s a great validation of both the need for your product, as well as your understanding of the space.

In addition, tell us why you and your team will be the ones to solve the problem and transform the industry. Why are you passionate about this space? What do you know that others don’t? And what have you and your team learned along the way of building your startup?

2. Know your audience

Entrepreneurs often tell me that, “Every VC wants us to modify our deck and see different metrics.” That’s true: every investor will have their own focus and interests and a good storyteller knows how to cater the story to their audience.

Do some homework on each investor beforehand to see what makes them tick. I personally like data and one can easily find that out after spending a few minutes on Google or LinkedIn. If you can’t find any details on the investor ahead of time, start the meeting by letting the VC tell you about him or herself. Then, use your improv skills to describe your product in a way that s/he can personally relate with it.  Don’t make the mistake of assuming that the investor has experience with the pain point you are trying to solve.

3. Why, how, and what

There are 3 elements to your story…why, how, and what. “Why” is your motivation and vision. “How” is your plan to achieve the vision (aka, your roadmap). And “What” is the product itself. Great storytellers touch upon all 3 parts. It’s the “Why” part of the story that will inspire investors, teammates, and users, while the “What” grounds us to the reality of the goals at hand.

4. Find the balance between features and pipe dreams

Imagine an idea spectrum where on one end, the story is too small and on the other end, it is too big. You don’t want to paint too narrow of a picture where you’ll be perceived as a collection of features and specs instead of a company. On the other hand, good investors won’t take you seriously if you offer a naïve pipedream instead of a realistic goal.

A good storyteller can strike a balance by illustrating that their current product is an MVP with many opportunities to grow into the overarching vision.

5. Nail your one-sentence pitch

Conciseness is important. By the end of the pitch, investors should be able to describe your business in one sentence. You can accomplish this by crafting one sentence, key message, or tagline and weaving it throughout the presentation.

Be as original as possible. You don’t just want to be the stoppers that plug the holes of a leaky bucket. You want to be a new bucket. In addition, be cautious of using the “We are X for Y/This for That” taglines (i.e. “AirBnB for Boats”), since it’s hard for us to get excited about these comparisons. If you haven’t already read it, check out Fred Wilson’s recent blog post about this.

6. Open and close strong

As all good stories go, a pitch needs a strong opening to capture the audience’s attention right out of the gate. Come out with a lot of energy in the first few seconds. Most importantly, you’ll want a strong closing to bring everything around full circle. So much of investing is rooted in intuition. Think carefully about what you want the investor to feel as he or she leaves the meeting. Then, be sure your closing point does everything it can to foster this feeling.

Final thoughts

The perfect pitch doesn’t come naturally to anyone; it’s planned, practiced, and tweaked. Practice telling your story several times in front of different friends and colleagues. See which aspects resonate and where you start to lose their attention. When it comes to adjusting your pitch, use your best judgment: you want to be flexible and open to feedback, without straying too far from your vision.

 

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How to overcome decision paralysis

It happens to the best of us. Faced with a major decision (be it business, financial, life), we’re unsure of which way to go. Worried about making the wrong decision, we wait, do more research, seek more input…basically do anything besides make the decision and act on it. In many cases, the more choices we have, the more likely we are to freeze.

As an entrepreneur or investor, you can’t afford to freeze. I generally pride myself on being able to make very quick decisions based on both data and gut, but sometimes there’s just no conclusive evidence or gut feeling to guide the way.

Here are four techniques that I have used in order to get past this paralysis:

1. Let the decision sit for awhile: Sometimes you just need some extra time for an idea to percolate, and after a few days or weeks, the right path will become more clear.

2. Talk to somebody: a small comment or bit of advice from someone else can often solve the puzzle in your head. In other cases, just the act of talking about the situation out loud provides an instant revelation of what to do.

3. Pro-con list: I’ll admit that this is probably the least effective method for me, as a decision is often not just a simple list of reasons for and against. But for some, the process of writing out the pros and cons helps distill their thinking.

4. Minimize your regrets: Here’s the principle that I’ve really started to embrace. Ask yourself the following: If you look back at this decision 10 years from now, which path will you most regret not having taken?  For example, think about the decision to stay on a safe career path vs. starting a company that has a huge potential upside but also very high risks. Rather than just focusing on minimizing risk, I like to take the approach of minimizing potential regrets when faced with a hard decision.

What do you do to overcome decision paralysis?

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