Month: December 2018

Entrepreneurship: Be the Boss You Wish You Had

As we go through our entrepreneurship journey, we are so focused on our day to day tasks, that next funding round, and the next milestone. When reflecting on the big picture about making a difference, we often forget how much we as people factor into each other’s lives. On average, people spend 35–40% of their entire lives at work; that is 90,000 hours. When we go back to reflect on the people we have worked for and how it influenced us in a positive and negative way, it does show up when we dive into entrepreneurship and become leaders and bosses ourselves. Because we have the ability to make great impact on those partners, employees, and colleagues we spend so much time with, we should be strongly considering being the boss we always wish we had.

Everyone’s revelations about this topic would be different. For me, I had a series of great corporate supervisors who were supportive and knowledgeable. However, it was my experience at a small consulting firm that impacted what kind of leader I wanted to be or not. Here is what I learned from my former bosses.

Bosses VS Leaders

1. Do Not Oversell a Solution to Clients And Make Your Team to Under Perform

As a new CEO who is starting out, there is a lot of pressure to sell in order to pay the bills. However, if you sell 20 hours worth of work for only 11 hours because you are a terrible negotiator, then read this article about not giving into discounts: https://medium.com/@VenturX_team/why-startups-should-never-give-discounts-8c291ad93167 and find better clients. If your team works on a billable time basis, and you train your team to work the 20 hours, then 20 hours will still be billed and get mixed up in the finance department. The clients would file complaints against the employee or the company. The other scenario that happened is that you force some of your employees to be assigned to the bad clients and your employees are overworked and force to under-bill the clients. Your startup company would then be making less money and your employees would be constantly frustrated because they will never reach their target. They say that entrepreneurs have to learn at warp speed to succeed in business. This is a prime example as to the notable effects of an entrepreneur’s lack of negotiation and prospecting skills.

Oversell and Under Deliver

2. After the Job Offer, Do Not Propose a Lowered Salary

After accepting the job, a got a call from my future employer who suggested to go on a lower salary with an unlikely bonus system. As an employee it was my first time seeing red flags of mistrust from any employer. He did that after I turned down my other job offers in order to take this job. Entrepreneurs should never do that because it breaks trust and you get off on the wrong foot.

I have come to learn how important trust is in your team and when you get off on the wrong foot, you already tainted your own reputation.

Trust

3. Signing an Awkward Contract

When I was young and working for this firm, I did not know I could question contracts. To this day, I am not sure it was 100% legal in Quebec to make someone go on a 50% salary cut for a probation period and force them to disclose all their personal activities such as volunteering, health and wellness problems, religious activities, etc.. This was stated in our contract that I was afraid to question when signing.

What I do now, is allow all levels of employees to ask questions and even follow up if I have not heard from them. My goal is to train someone for the duration of their contract and ensure they are fulfilled and happy. I respect their personal life and I do not make them disclose details because I do not want to make them feel as uncomfortable as I felt with this previous employment. I did have one intern who requested for us to know each other more so we made it happen; Otherwise, I respect their privacy rights. I cannot guess what will make them happy, I just have to ask. I learned another great lesson that I shared on Jeremy Ryan Slate’s podcast which covers “Grown ups don’t know everything.” You can listen to it here: https://www.jeremyryanslate.com/450-growth-secrets-networking-secrets-intentional-founder-sydney-wong/

Contract

4. Do Not Change the Work Expense Policy After the Trip

On my first trip to Boston, it was clearly written that the meals for the day was $75 CAD daily. After I came back from the trip and spent a little under $75, the CFO co-founder pulled me aside to say that the change was that the meals would be now broken down to $25 per meal for a total of $75. I did not misread because that was not written in the policy they gave before the trip. Overall, this employee lost money in order to go to a mandatory work trip (to generate billable hours for this company).

What I would have done is to absorb that one time expense since the employee followed policy meticulously. Changing an important policy like that would have been announced publicly instead of being pulled aside to be shaken-down by a cofounder of the starting company.

Employer

5. Changing the Year End Bonus Structure

When the bonus structure changes as employees are getting close to the achievement mark, it is very demotivating. The original one was based on billable hours and the new one was imposed near the year end, making all my past achievements obsolete and disregarded. There was no point in starting from scratch. It seemed that the new one was put in place in order to not pay out any bonuses that year.

Today, new entrepreneurs are taught to underpromise and over deliver. When it comes to employees, it should remain the same. This rule of thumb is another element that makes or breaks trust between the parties.

6. Don’t Point Out How You Wish You Didn’t Pay Salaries to Your Employees

At the end of the year, the CFO presented our overall revenue and expenses. The awkward thing that happened was he point out the revenue was higher than he expected so “it makes [him] happy.” He also pointed out the expenses (mostly salaries) were also higher than he expected so “it makes [him] less happy and this should be lowered.” If it sounds like this cofounder is implying people should get fired, then you are right…

One good part of that presentation was that they did show the revenue for the year which makes employees feel that they were contributing to a bigger picture. It was a good graphical way to show it. Overall, I cannot see how a founder can put a chart on the big screen and tell a room of people who were overworked that he feels he has overpaid would be motivating.

Revenues and Expenses

Overall, there is a difference between bosses and leaders. Everyone makes mistakes. We can learn from the mistakes of our former bosses and try to impact others in a more positive way. As entrepreneurs, we are our own brand and we have to learn the optimal ways of conducting our businesses, ourselves, and our team as fast as possible.

Warren Buffet
 

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About VenturX

VenturX is a web platform that helps entrepreneurs through their journey from idea to launch and beyond. VenturX uses data-driven analytics to score and connect startups and investors at Seed and Series A financing.

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Why Startups Should Never Give Discounts

Why Startups Should Never Give Discounts

When your business is starting out, it is common to want to sell right away, rack a huge number of clients and build credibility in your industry. Building all of that takes time. What startups tend to talk about these days revolve around motivation, grinding and how well to treat to your customers. What they leave out is how not every client is good for your business, how “doing whatever it takes” may harm you in the short and long run, and how all this may affect your credibility overall.

From working with 300 startup clients, I have had the chance to see that our market is very dynamic from one client to the next. Normally, our clients are not known to have deep pockets so that is where I learned the unique lessons about discounts. A couple of key learnings have come out of that over the years that I wanted to share…

1. 80/20 Rule

20% of the people take up 80% of your time. This is a tried and true statement among many psychological situations. In business, this would be true of your clients. In a startup’s early days, it may seem like you are supposed to give discounts in order to make those initial sales and gain your credibility. However, we have seen a huge difference in those clients who will and won’t see your value. (Check out our previous article: Am I Being Paid What Am I Worth?)

For example, we had a standard fee for writing business plans as an extra add on for those looking for funding. We had a client in the past who tried to negotiate during the 11th hour when I was almost finished the business plan to demand a discount. The request was to do 3 weeks worth of work in just a few days and they did not finish preparing their research either. Because of the situation the client put us in and the hard deadline, we spent 40% of the time negotiating and 50% of the time working on the business plan (and about 10% of the time sleeping). It was a prime example of how a client took 80% of our time and it was a hard lesson to learn.

80–20 Rule

What can you do about it?

A) Walk away…

In hindsight, we did not need their business. It would not have affected our brand and our core business of helping startups get investor funding. This business plan writing was a side service that was offered.

B) Flip your 80/20 rule to benefit your business!

Applying the 80/20 Rule to Your Business

2) Beware of Acquaintances Who Try to Squeeze Your Business

As your business grows and people start to see value in what you, some people will migrate back in your life and ask for discounts to gain the benefits. One example that happened was an acquaintance of mine who needed marketing consultation because he was part of a “Co-CEO” team but neither of them was the marketing/business person. This acquaintance is someone who I haven’t seen in about 10 years and only met through school friends a couple of times. I did not know he moved back to the city a few years ago. So after agreeing on the rate and services to be provided, this acquaintance messaged me back a day later and aggressively wrote this:

“Good morning,

I’ve just checked the contract and want to point out one thing

Are you really charging me the fees the same as you charge to strangers ?”

I was not sure what this aggressive greeting was about. I eventually saw that it was his way to “ask for a friend’s discount.” I was really confused that this happened after everything was agreed upon and written up in a contract that he then refused to sign. His partner and I sorted it out later and we commenced the work. It was done in bad faith after all because the 6 month contract…got cut into a 3 month contract…got cut into a 3 week contract…

Back Stab

Back Stab

Back Stab

What can you do about it?

There are a lot of support systems in your community or even online like a Facebook group full of entrepreneurs who will give great advice based on your specific situations. I went on a Facebook live chat full of entrepreneurs because I was new to this situation and was starting out this branch of the business at the time. I went on a live video to talk to people who have walked this path. They explained that I should not consider these people to be “friends.” Also, I should go back to them and ask for more. That is what I did during the second negotiation. They only hired for 3 weeks (but it was possible that is what they intended in the first place when negotiation a 6 month contract).

Another solution is to hire a sales coach if you are new to these negotiations. If you need recommendations for sales coaches or facebook support groups, send me a message!

If startups bow down to giving discounts every time they are asked, they will only be attracted discounted clients. These small clients will take up 80% of your time. You will be spending less time doing what you love — which is providing the solution or product. Even if your product or service is superior on the market, if you act like you are worth less, than that’s how the world will treat you.

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About VenturX

VenturX is a web platform that helps entrepreneurs through their journey from idea to launch and beyond. VenturX uses data-driven analytics to score and connect startups and investors at Seed and Series A financing.

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