Managing cashflow: get more bang for your startup buck

A common error for fledgling businesses is to get bogged down by branding and marketing costs, says James Caan

 

It may be difficult to see where your money would be best placed at the startup phase. 

 

Getting the finance to start your business is often seen as the biggest obstacle to starting up. But what is even more significant than accessing those initial funds is how to make your money go a long way. Sometimes it is difficult to see where your money will be best utilised, particularly at the start-up phase of any business. This is all the more important when you are invariably bootstrapping, putting some of your personal savings towards your venture to keep your business developing. So how can you get your money to make you money?

In the first six months of 2013, the UK's startup activity was up by 3.4% on 2012, with more than 90,000 new ventures. With this rate of business creation in the UK, it is inevitable that many will fail. To avoid this, you need to steer clear of making big financial mistakes, because there is nothing worse than your business losing more money than is necessary. As I have always said, if you're going to fail, you should do it quickly. Failure can be a great lesson, but it should not destabilise any future ideas from coming into fruition because the financial cut is so deep.

Today 49% of small business owners say they started up with less than £2,000, a seemingly astonishing feat. But there are clear ways you can avoid extra costs. A big one is not hiring until you are ready, employees are one of the biggest costs in any new business. That being said, there is no doubt that they will be the ones who in the future can drive your business forward, but you must be able to justify new hires, especially at the early stages of a business. Bringing on board people you do not greatly require is an expensive problem, so you may want to consider hiring part-time support or sub-contractors, depending on the demands of your startup. And although admin work can be exhausting, juggling it along with other aspects of the business can help to make you a more dynamic entrepreneur and help round your skillset.

Do not underestimate the time it takes to set up. Starting a business will always take up more time than you will have imagined, and cost more than you would like it to. For these reasons you have to be flexible, and should not drain your resources too soon. With human error, slow vendors, changes to technology and extenuating circumstances – both personal and professional – not everything will go perfectly to plan. This is why you must be more tactful and cautious with spending, so that when you have to compromise on timing, you have a cushion of support.

A common error for startups is to get bogged down in branding and marketing costs. It is unbelievable just how much you can promote your business at little cost. Social media platforms such as Twitter, Instagram and Facebook are brilliant ways to engage potential customers, and SEO is a valuable and free content-based tool to get your business noticed. Of course, the cost of your time is valuable, but spending money on expensive branding companies can harm your resources, particularly as a new venture when your direction is evolving and most susceptible to change. Wait until you have been trading for at least six months before heavily investing in the branding side of your business. You will be in a much better position if you do.

Start-Up Loan recipient Karine Bono, a young fashion designer from London, understands the difficulty of starting up on a budget. With her £5,000 loan, Karine minimised expenses by producing all her garments and designs at her home studio in Hackney. By trading her clothes on Etsy, a popular clothing site, Karine is gaining exposure without breaking the bank, not spending too much on marketing but still benefitting from an online presence.

It is undeniable that new businesses have to find a way to manage their costs if they have any chance of survival. This is why the first sale is so important, and creating a profitable business is key. At the start be frugal and push yourself so you don't have to push others. After all, taking on challenges is what being an entrepreneur is all about.

James Caan is chairman of the Start-Up Loans Company. Each fortnight he tackles a different business issue for the Guardian Small Business Network. 

How I Founded a Top Marketing Technology Startup in Less Than 6 Months

Tiffany Pham, 

Alex Gold is the co-founder of Buzzstarter, a marketing technology company in San Francisco working with the world’s largest brands like Dove, Axe, Degree, Clear, Danone Activa, and Aeropostale to drive higher return on investment for their ad campaigns.

Buzzstarter is a distribution marketplace and exchange that, on one side, connects any type of brand content (such as videos or articles) with hundreds of thousands of users who, on the other side, share the content. He uses data science to optimize the marketplace connections.

Originally from Toronto, Canada, and a lawyer by trade, Mr. Gold’s background is in the entertainment and advertising industries working with Discovery Communications , Vuguru, LLC, and DDB Canada. I sat down with him to discuss his rapidly growing company and the future of communications technology.

After 5.5 months, you’ve had significant traction with some of the world’s most prominent brands? How did you get from 0 to 60 in such a short time, when most entrepreneurs need much longer to build momentum?

Great question. Two reasons: 1) addressing real pain and acute need and 2) maniacal research and planning. Brands are feeling real pain with online marketing right now. There are so many options, and target audiences are not migrating to one or two online destinations. They are splintering to hundreds of thousands. This gives brands, who are used to buying single destination advertising like television a massive headache but also a lot of fear of missing out or FOMO. So Buzzstarter comes in with a value proposition of: 1) a single destination site that will give your brand access to hundreds of thousands of channels; 2) a laser sharp and very open focus on metrics; and 3) increased ROI. People start paying attention. We back that up with an acute understanding of what specific needs are on our platform. We designed it with that in mind.

What were some of the tactics you used to launch Buzzstarter and get it off the ground fast?

We analyzed each step of the process: research, development, operations in a very methodical way. I suggest this to any entrepreneur. This may be in contrast to what you think about most startups, where one prominent entrepreneur described it as “putting on a parachute while falling down.” My Co-Founder Kenzi Wang and I spent months in customer development obtaining information on what our target users (brands and advertisers) wanted. We did not want to build a product on intuition and we shifted the focus numerous times in research. With development, we started two parallels: product engineering, which is typical, but also sales and advisory. Since we knew sales would take some time to get off the ground, we set about creating relationships on an advisory level with potential partners months ahead of time. We are lucky in a way that one of our first customers, Lou Paik, from Danone, has an incredible amount of vision and foresight in the digital space. This gave us a running start. And for operations, we carefully engaged in a trial period with many of our colleagues where they were asked to generate real value before permanent onboarding.  We have a great team as a result like our designer Zach Zorbas and our account manager, Melissa Aiello.

You work very closely with large brands. What do large brands gain from working with startups like Buzzstarter as opposed to their traditional established agencies?

Very timely and funny. Well, first, they usually get to have their dollar go further because startups offer better ROI and more efficiency in their offerings. Large brands get the benefit of the startups’ deep knowledge of up-to-the-minute innovation. Startups act as brands’ eyes and ears on the ground and in some instances form external innovation teams. Large brands can employ startups to source new trends and even partners. My brands ask me all the time what new emerging social media sites are out there as I get calls asking what Medium and Secret are (side note: sign up for Secret – it’s awesome). Dave McClure, the Founder of 500 Startups has always said, “Brands have access to customers and distribution, but like many large companies they don’t move fast and aren’t experts in tech innovation. Startups are tech-savvy and can impart and even transfer rapid innovation forward.”

Does BuzzStarter apply to just advertising? Can it apply to content creators like filmmakers or musicians who have a need to distribute their message cost-efficiently and can’t afford to do so through traditional means?

Yes, of course. We’ve never seen Buzzstarter as applied only to advertising.  We anticipate a very near future in which our plug-and-play platform assists in optimizing communications for nearly every creator of content: from an advertiser to a filmmaker to a musician to nearly any writer.  We are banking on the fact that as the number of means for communicating online increase, the amount of noise is also going to increase. What’s going to matter most is relevance and optimization.  Relevant audience targeting and optimization of message.

This is a great time to switch gears. What inspired your career move from producing creative content to leading a team of engineers and data scientists to drive efficiency in creative content  distribution through technology?

One word: the market.  Coming from the traditional entertainment side at Discovery and Vuguru, I saw that entertainment distribution windows were starting to narrow with the arrival of Netflix and Amazon.  But consumers were (and still are) moving faster than any one platform.   They are consuming content not just in one destination but in a multiplicity of applications, sites, and channels that are not limited to the social web or where you can buy exposure.  The only way to harness this — to truly harness these new market dynamics — was through data and technology.  I saw what Andreas Wigand was doing at Amazon  in regards to targeting audiences across different channels and was shocked that no plug-and-play solution existed.  If you wanted to target audiences on one blog versus another you needed to make separate deals.  On each social network, another separate deal.  That’s enough to give anyone a headache.  I knew there was a need to create a plug and play solution that allowed any content creator or advertiser the opportunity to distribute across all of these apps and social media outlets that no one else can get into.  And now we have the engineering and data science to make it work.  So, I partnered with Kenzi Wang, a growth engineer, moved to San Francisco, and started Buzzstarter.

Was the transition from being a creative to being a technologist challenging?

Yes, it was, although I find my creative side to be an immense asset.  Initially, it was hard getting my head wrapped around the concept of scalability at inception.  Building a technology platform requires that every function and action be scalable to a target market with minimal labor. By contrast, developing a television series or a film is iterative, customized, and often personal.  Coming into the tech world, this was a jarring difference for me but as soon as I learned the ropes, I started to jump. In fact, I use my more creative skills every day in iterative product focused problem solving and roadmapping.  I have picked that up directly from the story-editing and development process.  It allowed us to craft a user focused story faster and launch the company sooner.

Do you have any advice for aspiring entrepreneurs coming from the corporate world?

Yes. This may sound trite, but you have to be an optimist. You also have to be open to a flexible schedule. You may have heard it before, but working in a startup is backbreaking and awful. There are many times you may want to give up. This means you constantly need to be an optimist.  You always have to keep your eye on the positive aspects. Sometimes, admittedly, even blind optimism helps. The other thing you need to be open to is a flexible schedule. Coming from the corporate world, you may be used to 9-5 meetings and some weekend work but startup life is everywhere, all the time, including time you may think is off.  This may sound obvious, but I have met many a new entrepreneur who came from the corporate world only to attempt to run their startup the same way. Not my advice. Be flexible in your schedule and time. It’s the mental barrier that makes such a difference.

5 Solid Pieces Of Advice From A Startup CEO

The path to entrepreneurial success is far from paved in gold. Rather, it’s lined with bumps, turns and even dead ends. Still, entrepreneurship has hit a record high in the U.S. as more people than ever before venture down the road less traveled.

Prominent startup CEO George Bell learned far more from his entrepreneurial journey than he could have by staying on the straight and narrow. I recently chatted with Bell and he recounted the valuable business experience and insight he gained by going off the beaten path.

Bell’s rise to entrepreneurial success was less than traditional. He began his career as an acclaimed adventure documentary writer and producer, and then moved into the corporate world where he climbed the ranks at Times Mirror Magazines. Still, his passion was startups: He served as CEO for Excite, Excite@Home, UPromise, and Jumptap. He then transitioned to General Catalyst, a venture capital and growth equity firm that manages over $1.7B in assets. Having just sold Jumptap to Millennial Media for $200 million, Bell’s exciting entrepreneurial journey continues.

The many lessons Bell learned throughout his career are not only inspiring, they’re downright essential for every budding entrepreneur. Here are five lessons you can learn from him:

1. “You have to adjust on the fly.”
You have to remain resilient throughout all of the “unexpecteds” that come with this winding startup path. You must be willing to be flexible and resort to alternative plans when the situation calls for it.

When Bell began as an adventure documentary writer and producer, he would often pitch an idea or prepare for filming only to have other circumstances such as weather or budget pull the rug from underneath him. He learned early in his career that he had to be flexible and think on his feet.

2. “We all need someone to give us a chance.” 
As an entrepreneur, you must never be afraid to throw your hat in the ring and seek out opportunities that may be a bit of a stretch. Ask yourself, “Why not me?” You never know who has the ability to open the door for a whole new opportunity.

When Bell wanted to break into the corporate world, he approached Times Mirror Magazines for a job. He knew he was underqualified, but this didn’t stop him from trying. Times Mirror Magazines ultimately took a chance, giving him the break he needed. He then climbed the ranks, eventually founding the Outdoor Life Network (now NBC Sports Network).

3. “Taking risks increases your value.” 
Being an entrepreneur requires you to stretch your limits, but even in failure, the experience and connections you form along the way are the most valuable piece.

When Bell chose to leave his stable job with Times Mirror Magazines and move across the country to work for the startup Excite, it was a challenging and risky decision. If the startup failed, he knew it wouldn’t be hard to get back into a corporate job. Plus, the experience he gained would only add to his skill set.

4. “Go after what gets you excited.”
You should never make the mistake of letting money drive your career choices. Entrepreneurship is about chasing your passion, not a paycheck.

Based on his own journey, Bell stresses that you should seek out opportunities foremost because of passion, conviction, and excitement. If your main concern is money, you will never outlast the ups and downs of entrepreneurship.

5. “The best entrepreneurs are both optimists and realists.”
It takes a double mindset to be a successful entrepreneur. You have to set your expectations overly high to be inspired to push further. Still, you must be realistic about money and finances. Bell advises that entrepreneurs should be optimistic with their ability to reach their goals, but realistic with expenses.

Entrepreneurship is not for the timid or uncertain. The lessons George Bell learned through his less-than-traditional career should help cast a light on this unbeaten path and guide you along your own entrepreneurial journey.

Skiddy von Stade

 
Bio:  Skiddy von Stade is the founder and CEO of OneWire, the leading career site for finance professionals. Skiddy is also the host of Open Door – an exclusive interview series with influential leaders across the financial services sector and beyond.

Using 'remarkable' source of data, startup builds rich customer profiles

Ivor Tossell

If there’s one thing that retailers want, other than the sound of ringing tills, it’s information about their customers: Where do they come from? What do they do? And how can we better encourage them to exchange cash for goods?

This has spawned all manner of labour-intensive efforts over the years, from customer surveys to cashiers who earnestly solicit your postal code at the Old Navy checkout to Air Miles or Optimum customer loyalty programs that diligently catalogue your purchases.

But what if there was a way to generate customer profiles without interacting with the customers at all?

RetailGenius, a product from a Toronto startup called Viasense, promises to algorithmically generate customer profiles based on a remarkable source of data: Anonymous location data that’s collected by big mobile carriers, from the passive pings that every single cellphone sends out as it goes through the day.

The data that RetailGenius uses is anonymized – it doesn’t have any way of knowing whose cellphone belongs to who; it simply has a gigantic plot of where thousands of cellphones were at any given time.

“We create a unique identifier between those signals, and we can see those signals move throughout the city,” says Mossab Basir, RetailGenius’ founder. “We can see those changes in your location but we never really know who it is.”

What the product does next is intriguing: Based on some 50 million pieces of location data a day, RetailGenius crunches the numbers to make inferences from where each cellphone spends its time, and generates customer profiles by the thousands.

For instance, if a given cellphone spends the hours between 7 p.m. and 6 a.m. in a single area, it’s a good bet that its owner lives there. If that cellphone spends its working hours downtown five days a week, its owner is probably a daily commuter. And if it visits a given retail store once a week, a picture of its owner’s habits living and shopping habits starts to emerge.

By lumping these inferred profiles together, RetailGenius can give retailers a picture of who walks through their doors. For instance: What are the top 50 postal codes that are represented in their customers? What kind of volumes of customers are arriving at the store? How long do they stay?

Of course, the key to this product is getting the data in the first place. Every cellphone stays in touch with the cell towers around it, even when you’re not using it – that’s how it always has a signal ready to use when you wake it up. These towers are arranged in a grid pattern that resembles cells (thus, cell-phones) and they’re always paying attention to how strong your signal strength is.

When your phone starts leaving the range of one cell tower, your call (or data) gets cleverly handed-off to the next-best tower. By triangulating these signals and factoring in signal strength, cellphone carriers can get a reasonable idea of where your phone is, even without features like GPS.

Basir says Viasense gets its data from social networks as well as major carriers, who are cautiously entering the “bulk data” marketplace, selling anonymized data for analysis. You’ll be hard-pressed to find reference to this on cell carrier websites; however, a Rogers spokesperson confirmed that the company has “a small number of customers who use aggregate, anonymous locator information to predict traffic patterns.”

Basir, who started his career in corporate branding before moving into startups and technology-focused marketing, says Viasense has raised a half-million dollars in angel funding. The 50 million location events a day his firm is processing – covering much of the GTA, at present – is just the start, he says. “The amount of data that’s out there from a big data perspective – that’s what really excites us.”

Is It Ever OK for Founders to Sell Off Their Company Shares?

Image credit: Illustration © Jakob Hinrichs

One of the strangest things about being a startup founder is that I'm running a multimillion-dollar company but earning a salary far below my market value. My company may be worth a lot, but the vast majority of my personal net worth is tied up in an illiquid asset (company stock), which is no help to me as a mom with two small kids, a mortgage, medical bills and day-to-day expenses.

Five years in and easily $500,000 below what should have been my accumulated earnings since 2009, I'm left scratching my head. I hear murmurings that some founders sell personal shares long before an exit. Should I do the same? Should you if you're in this boat?

A quick survey of other startup founders revealed that they believe it's OK to sell a tiny percentage of stock (in the single digits) once a company's valuation reaches $10 million.

The Valuation Game

Figuring out how much your company is worth is an art and a science.

The art: The story you pitch to investors matters. Spend time researching and crafting a pitch that represents the company's long-term greatest revenue or exit potential, not its current situation.

The science: While not an exact calculation, look at the valuations of comparable companies based on income and market presence. If you're an early-stage startup with no profits, base your valuation on traction metrics such as how many new customers you have, how many come back and conversion ratios, then apply them to a total future market opportunity.

What you want to avoid is the obvious cash grab. People grimaced when Foursquare founders Dennis Crowley and Naveen Selvadurai took home $4.6 million--23 percent--of their $20 million Series B funding in 2010.

Most of the founders I spoke with agree that you should try to sell to inside investors first. "It gives you a cleaner cap table, and you can tell a better story around it; i.e., the insiders wanted to help you stay focused on the long term," says Jon Crawford of e-commerce platform Storenvy. He points out that if the people closest to you are pushing for a bigger slice of your stock holdings, it's a testament to just how valuable they think your company is.

Karl Jacob, startup founder and angel investor since the 1990s, has witnessed CEOs sleeping in their cars because they can't make their rent. "That's not good for anyone, including the investors, who need a CEO working long hours in top mental and physical form," he says. To ensure that you don't end up in this scenario, Jacob advises startup founders to pay close attention to their stockholder agreements upfront to make sure they can sell a small percentage without restriction.

I'm not sure if I'll take the plunge and sell some of my stock to ease my cash crunch, but it's nice to know that it's not necessarily viewed as a bad move.

Amanda Steinberg

Amanda Steinberg is CEO of DailyWorth, the professional woman's guide to business and money.

5 Principles of Convergence: How To Work Better At The Intersection Of Tech, Creativity, And Media

Convergence is both buzzword and marketing reality. Razorfish CEO Bob Lord outlines 5 ways creative companies can adapt to a converging world and create better brand experiences. 

The word convergence has been picking up steam in the marketing world. It may even be the “big data” term of 2013. Yet, the word means different things to different people. At Razorfish, we use convergence to describe the coming together of three irresistible forces--media, technology, and creativity--to create experiences that enrich the consumer’s relationship with the brand.

Convergence is a constant process, not an end point. Technology, creativity, and media are constantly evolving, and so is the converged company. It is a never-ending challenge to adapt a customer experience that, in our digital age, will always be in flux. Too often, businesses are far behind consumers in embracing technological change, a problem that has everything to do with how the organization is set up. My new book, coauthored with Razorfish Global CTO Ray Velez, Converge: Transforming Business at the Intersection of Marketing and Technology, describes in detail how enterprises and teams must adapt for an age of disruption.

Here are five key principles: 

Put the Customer at the Center.

Being ready for convergence isn’t about building an innovations lab, spending marketing budget on Facebook and Twitter ads or about hiring a social media “guru” to respond to online complaints. It’s about embracing a customer-centric mind-set and making your entire organization responsive to the customer journey. This isn’t as easy as it sounds, especially for larger, well-established companies where scale has mandated the creation of a complicated organizational chart.

Strategies need to be based on data from actual consumer activity, not abstract gut feeling. That data should dictate not only what experiences you serve consumers but where, when, and how. Brand communications must engage the consumer in social platforms and ecosystems and open APIs. And the retail experience must be made omni-channel, giving shoppers the same experience whether they’re in-store, online, or on the phone. 

Think of Your Brand as a Service and Experience.
You’re no longer in the business of selling stuff; you’re filling consumers’ needs. As a marketer, you’re creating new products and apps and always-on ecosystems, not just a series of campaigns based around a calendar of product launches. Nike is the classic example, with its ecosystem of fitness apparel, gadgets like FuelBand and services like Nike+ that immerse the user in the company’s innovation and create an end-to-end fitness solution. Special K, one of our clients, is still in the cereal game and it sells a ton of it. But it’s also in the health, fitness, and weight-loss games. It took its Special K challenge and turned it into a digital weight-loss platform.

To create and maintain this ecosystem, you’ll be investing in marketing operations, not just working media, and bringing in more designers and developers. In the past, marketing ops were largely limited to the maintenance of an internal marketing team and hiring and firing agencies that produced the creative work. People were accountable for spending the dollars, not how effectively they were spent. In a converged world, it will be about those activities, and also about investing in people and systems to ensure that the marketing spending is optimized. 

Reject Silos.
Media, technology, and creativity are no longer discrete problems. Let’s take the most fundamental example of this: the creation of an ad. A few years back, a new ad campaign was simply a creative challenge that was solved by coming up with a new flight of TV spots. These days, a new ad will likely involve some technological and media challenges. Are you tapping into the API of a hot new social media platform? How are you getting your brilliant campaign in front of a demographic that’s no longer watching TV?

The traditional, silo-based organization is ill-equipped to answer these questions. So what you need to achieve is better collaboration between marketing and IT. To get there, your C-suite might have senior roles like chief digital officer and chief marketing technologists, filled by experts in both functions catalyzing innovation throughout the organization and fostering collaboration. Or you might try bottom-up solutions like internal account management. In this structure, marketing folks have counterparts in IT and vice versa. 

Act Like a Startup.
There’s a set of common misconceptions about how established enterprises should learn from startups. It’s not about moving into flashy new digs or setting up Ping-Pong tables or having free sushi for lunch.

Like customer-centricity, the startup mentality requires much deeper and more meaningful change. It requires uprooting many old assumptions and habits, especially those around tech infrastructure, and doing things the way a newer, leaner company might.

Acting like a startup in this sense means the following:

--Your enterprise deploys--or at least experiments with--cheap, fast, and flexible tools like cloud computing, social media platforms, and open APIs.

--You employ product managers who are accountable for particular aspects of the consumer experience, just like Facebook has tasked someone with oversight of the newsfeed. As one of our clients describes it, product managers have to understand the customer and constantly prioritize and re-prioritize what’s best for the customer.

--You employ Agile methodology and rapid prototyping.
And look, no Ping-Pong.

Embrace Diversity
Every organization needs specialists and experts, but in the place of environments where everyone fills one role and thinks about nothing besides that role, there needs to be cross-fertilization, a coming together of various fields, disciplines, personalities, and cultures.

In practice, it’s important to get a wide variety of expertise and perspectives around the table—marketing and technology, of course, but also HR, legal, and finance. We call this building a big boat, and it’s vital to building a convergence-ready organization.

But there’s more to it than just getting all the right people around the table. You also have to incentivize collaboration, getting multiple functions to rally around a shared set of objectives and a shared method of measuring process--that’s a big change and it has to be tracked cleanly and carefully. This entails getting your systems to feed a dashboard that tracks a manageable set of metrics. Then you have to get the team to check in regularly, or at least pay attention to the readouts they’re receiving.

Adapting your organization for convergence is never over. It’s a constant cycle of testing, learning, building, and destroying. All the more reason you should start now. The winners of this era will be the companies whose main focus is constantly improving on the customer journey. If you follow your customer, you can’t go wrong.

By:  Bob Lord, Global CEO of Razorfish.

7 Slightly Crazy Ways To Build A Happy, Productive, And Transparent Company

By: Leo Widrich

Building a “normal” startup was never something that excited us much at Buffer. After all, if you go ahead and start your own company, you finally have the chance to put all your ideas for how to build a great company into practice.

A few months back, we finally put the first ideas for the Buffer culture into words: You can see what we came up with in the above slideshow.

Of course, culture is much more than just a slideshow. Since we first started working on Buffer two years ago, we have been searching for the best process to make working every day as enjoyable and impactful as possible.

Here are the 7 top things we’ve been experimenting with and implementing: 

Free Jawbone UP for everyone
 What we’ve recently started is to give everyone that starts out at Buffer a Jawbone UP wristband. The band allows you to seamlessly track your sleep, your daily steps, nutrition and much more. Here is a screenshot of the Buffer team’s sleep habits: 

Why try this? 
One of our key values at Buffer is to work smarter, not harder. Together with an immense focus on personal improvement, giving everyone a chance to improve their sleep patterns seemed like a no-brainer. A few weeks in, this has already had an incredible effect. Browsing through everyone’s sleep patterns and discussing how to get more deep sleep over our virtual water coolers has an amazing effect on productivity. 

Open Salaries 

Something that was definitely very scary for us to do was to make all salaries public within the company. We created a formula to calculate everybody’s salaries and then went ahead to add it to our wiki page for everyone to see. 

Why try this? 
There are two key reasons we did this. The first and foremost is to truly commit to our value of transparency. Here is what Joel sent to everyone in the team in the announcement email:

“I truly believe that transparency breeds trust, that's one of the key reasons for this adjustment.”

The second element was that it made hiring new people for our team a lot easier and yes, you guessed it, more transparent. In fact, we could tell people how much they would earn, before we got into any details. We just ran through the formula and came up with the number.

The goal here is to eventually make all salaries and the formula publicly available. 

Free Kindle books for all 
Everyone on the Buffer team can grab any Kindle book they want, for free, at any time. There are no questions asked, you just drop the link to Amazon into a form field and you will get it on your Kindle device minutes later. Here are a few books I snatched up recently: 

Why try this? 
If you browse through the above slideshow, you will see that another one of our core values is “Have a focus on self improvement." And what could suit this better than reading books? So far dozens of books have been grabbed by our team. This is a great way to encourage learning for the team and quickly upped my daily reading amount. 

Open Equity 
It is one thing to have salaries made completely public throughout the company. Going the extra step to make equity completely open to everyone in the company was next. We created another formula that determines how much equity each new person on the team will get and why everyone on the team received what they did. This was definitely also nerve-racking, and yet, today it feels like one of the best decisions we’ve made. 

Why try this? 
I’m not exactly sure why, but making equity public felt like going beyond salaries in terms of transparency. Combining both salary and equity really made us put all our cards on the table. I believe this creates an amazing bond for the team. And as we plan on making all equity completely public, we hope to truly make the step towards an “open company.” 

The daily personal improvement 
At Buffer, we are using an amazing productivity app called IDoneThis, where everyone logs what they've accomplished and how they are working to improve. Glancing over recent examples for improvements, these stick out:

- “4th day streak of 6am rising.”

- “Back to 10 minutes of daily meditation consistently.”

- “Need to do some Pilates. Walking all the steps but still missing planned exercise.” 

Why try this? 
A daily log is a widely used tool in many companies. The element of “what am I working on to improve myself" is something that has always been a core part of what we do at Buffer. Because all improvements are shared company-wide, it is a great way to get encouragement and find a habit. On top of this, it’s an awesome opportunity to learn new skills. For example, I've picked up coding, in part because of this daily log. 

Great support for a free product 
This is something a lot of people called us crazy for doing. We are doing our best to provide amazing support for a product that is free for 98% of users. In fact, out of our 10-person team, about a third of us do full-time customer support work.

Why try this? 
Giving great customer support for something that’s free is great, precisely because it is crazy. No one else does it, and it allows you to truly create a “wow” effect. No one expects to get a response, so whenever people do get one, they are over the moon and spread the word as far as they can. Customer support is the new marketing department. 

Managing a remote team: The daily pair call 
The last idea that we’ve implemented recently is the daily pair call. Most startups use a daily standup to sync up on everything in the morning or evening. With a lot of our employees being in different time zones, that quickly became impossible. Instead, for each week, two people on our staff are paired up and have their own one-on-one calls. In these calls the two paired-up people talk about challenges, daily improvements, and what we are working on.

Why try this? 
The pairings are completely random and involve each team member. People that might not talk that often with each other get a chance to do so. An engineer, say, may get paired up with a support person. It’s also a great way to get daily face time in, which we couldn’t do otherwise.

Those are some of the ideas that are the key at Buffer for creating and maintaining our culture. The feedback so far has been amazing. I’d love to hear any thoughts you have on the above ideas, and what's worked well inside your own company.

The #1 Mistake Entrepreneurs Make

I'll be writing about how to be a successful founder and more. Follow me at 

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Posted by:

Michael Lazerow

I’ve started 4 companies and have invested in 25 more. And I can say, with supreme confidence, that I have made or seen almost every mistake possible.

I’ve hired the wrong people. And fired the wrong people.

I’ve raised too much money (yes, it’s possible). And too little.

I’ve launched products that not one person used and have pivoted so many times I’m still dizzy.

None of these are fun to live through, I assure you. But they are not nearly as fatal to a young company as the #1 mistake entrepreneurs make – FOCUSING ON THE WRONG THINGS.

Successful entrepreneurs focus exclusively on efforts that matter and are able to tune out the rest. People who focus succeed. It’s that simple.

A critical difference between a startup and a large company is resources. Specifically, time and money. And having little of both is oftentimes a godsend and leads to some of our best work. Just look at your favorite indie movie!

Google can give its employees 20 percent of their time to pursue their crazy ideas. If Buddy Media had done that, we would have been out of business.

Focusing is not a natural exercise for many entrepreneurs. More ideas pop into my brain during my morning shower than many people get in a month.

So in order to focus, you need to build your “focus” muscle and train your brain to focus and stay focused.

Volumes have been written about how to do just this. One of my favorites is “Organize Your Mind, Organize Your Life: Train Your Brain to Get More Done in Less Time” by Dr. Paul Hammerness, a Harvard Medical School psychiatrist and Margaret Moore, an executive wellness coach and codirector of the Institute of Coaching.

But you don’t need to read books to bring focus to your entrepreneurial life. Here is an exercise I use with entrepreneurs I have invested in to make sure they are truly focusing on the right things.

I ask a very simple question: What are the top 3 things you need to accomplish in the next 6-12 months to give the company the best chance of long-term success?

I push them to be specific. And rank the responses in order of importance.

Is creating the best product most important? How about locking down distribution? Are those both more important than monetization? How about hiring the right people? How about raising money? Is business development important to the business this year?

Most entrepreneurs I speak to can’t name their priorities right away. And if they can, they aren’t written down anywhere and they haven’t been communicated to the rest of their organization.

If an entrepreneur can’t name their top 3 priorities without hesitation, how will the rest of the company know? It’s bad enough for an founder to work on the wrong projects. But if the entire company is not focusing in the right areas, game over!

Without focus, young companies can FEEL like they are accomplishing a lot while in reality accomplishing nothing. They solve problems that never existed in the first place. And launch products with no market.

With the right focus, entrepreneurs can change the world. I’ve seen it so many times, upclose and personal.

If Mark Zuckerberg had not focused on the photo-tagging feature years ago, Facebook would not be the world-changing company it is. If Twitter had not focused on 140 character messaging, it would never have survived. Where would Apple be if it decided to focus on watches instead of phones? Or if it focused on selling the most number of units rather than designing the best products and profitability? You get the idea.

The single most focused entrepreneur I have ever met is Marc Benioff, CEO of Salesforce. He has an epic and well-documented process and tool called the V2Mom that has helped him build Salesforce into Forbes’ most innovative company in the world (two years in a row!).

In one of my first meetings with Marc, he told me that everything he has written down over the past 14 years has come true. Does he have a secret genie granting him wishes? No. But he has been able to get his entire company focused on core priorities over and over again.

I encourage all leaders (of companies, of divisions and of small teams) to write down the top 3 areas of focus somewhere visible in the organization and communicate them to the entire team.

By doing so, you are not only able to focus on what is most important, but you are also able to eliminate distractions, which is the biggest gift you can give as a leader.