Tag Archives: Entrepreneurship

The Seven P’s of Raising Money from Investors

The Seven P's of Raising Money from Investors

GUEST POST from Arlen Meyers, M.D.

Budding sickcare entrepreneurs inevitably want to know, “How do I raise money for my idea?” Most of the time, they are not ready for fundraising prime time and they have not taken the necessary steps to begin to do so or understand when and if it is the prudent thing or right time to do.

Here are the 7 P’s of raising money from investors:

1. Preparation

You should prepare to raise money by 1) derisking your idea as much as possible and 2) understanding what it will take to raise money i.e. technical, clinical and commercial (traction) validation.

When you have an exciting new idea, it’s easy to focus on all its benefits and jump to action. But doing so can lead to failure. Your limited perspective may mean you’re not seeing potential hurdles — and you may be leaving other promising options unexplored.

If you want the best ideas to flourish, you need to open your mind to different people from people beyond your team, whom you don’t usually talk to — and ask open-ended questions. After presenting your idea, ask: What stands out to you, and what’s missing? What would our critics say? Consider the failure of your idea: What would your premortem reveal? Consider other people outside the room and ask: What would someone on the frontlines say? Finally, put yourself in your competitors’ shoes. What flaws or weaknesses in your idea would they celebrate if you were successful?

  1. Do you understand the regulatory requirements and rules for raising private money?
  2. Do you know how much money you should raise and in what form: debt, diluting funds or non-diluting funds, like grants, contracts or some proof of concept awards?
  3. Have you validated the underlying hypotheses of your business model and demonstrated product-market fit? Do you have traction? What is the evidence? But, is product-market fit really enough?
  4. Do you have a reimbursement or revenue plan?
  5. Do you have a plan to create and protect your intellectual property?
  6. Do you have a regulatory approval or compliance plan?
  7. Have you created the appropriate corporate entity and corporate governance documents?
  8. Are you prepared to bootstrap your startup and dedicate the time, effort and capital required to be successful?
  9. Have you created the necessary fundraising and marketing collateral like a website, executive summary, social media channels to create awareness, engagement and buzz about your company?
  10. Can you answer these three questions: Is the market for the problem you want to solve big enough to make your journey worth it? How many customers want it and are willing and able to pay for it or get someone else to pay for it? Can you win at it give market competitors?

2. Plan/Strategy

After answering these questions, assuming you decide to proceed, you will need a capital raising plan and strategy. A capital raising strategy is essentially a roadmap for how your organization will pursue and obtain the funds it needs to fuel its growth. The capital raising process can take a long time and it’s a serious undertaking. However, while you may stay up late at night searching for new investors, writing pitch decks, and pouring over financial spreadsheets, building your strategy is the simplest part of the entire process. Here are the parts to the plan.

3. Pitch deck

Your pitch deck should tell your story. Who are the villains? Who are the heros? How did they win? There are many resources available to help you craft and polish your short, medium and long pitches, depending on the circumstances and the audience. Here is something to start:

4. Platform

You will need a CRM or tracking platform to keep track of the people who have contacted and how you intend to convert them as leads to investors. Crowdfunding platforms are another resource.

5. People

Do you have the right people on your startup team who can raise money? Are the founders the right people to do it? Do you have robust enough networks and contacts? Do you need a fractional of full-time accountant, controller or chief financial officer?

6. Process

The process should describe how and who will execute your fundraising plan, whether you are starting a company or scaling one. Since what you are doing is selling and marketing your idea and your team, what is your marketing, sales operations and sales enablement process?

7. Performance indicators

Performance indicators help you measure your progress and inform your strategy and execution adjustments moving forward. Here are some fundraising metrics for non-profits.

Raising money from investors is a lot like renovating your kitchen. It will take much longer than you thought it would, the costs in time, money and effort will be much bigger than you assumed and, when you see the final results, you will wish you had done some things differently.

Good luck and be sure to follow the right rainbow.

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How to Balance a Culture of Conformity with Creativity in Medicine

How to Balance a Culture of Conformity with Creativity in Medicine

GUEST POST from Arlen Meyers, M.D.

Medicine, by its nature, is a culture of conformity. We are trained to do no harm, be risk averse, and conform to the standard of care. We follow “best practices” i.e. what everyone else is doing, and are encouraged to follow evidence based guidelines. Medical students are chosen by their ability to score highly on standardized tests and check off the requisite boxes in their application. They know what to say in interviews…over and over again. Physicians have to pass standardized tests to get a license and be board certified to practice and maintain certification.

Now that medicine has become corporatized and more and more doctors in grey flannel suits are working for the man, things have worsened.

Successful innovation and entrepreneurship, on the other hand, encourages a culture of creativity. Now that students, trainees and clinicians are getting more and more interested in physician entrepreneurship and the business of medicine, how do we encourage and balance the two cultures?

  1. Encourage cognitive diversity, not just demographic diversity, in decision making
  2. Don’t penalize failure. Showcase it instead.
  3. Create ambidextrous organizational departments and units that can plan for not just the now, but the next and new as well.
  4. Use evidence based techniques for ideation and creative problem solving. Here are 3 to get you started.
  5. Recruit, hire, develop and promote for creativity
  6. Create psychologically safe spaces to say things
  7. Forget brainstorming
  8. Hire leaderpreneurs who can drive cultural change
  9. Know the difference between good rebels and bad rebels
  10. Don’t confuse disruptive doctors with disruptive doctors
  11. Learn to resolve the conflict between the ethics of medicine and the ethics of business

Sometimes thinking outside of the box will get you in trouble. Other times, not doing so will box you in. You decide.

Image credit: Pixabay

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The Dreaded Perfect Entrepreneur

The Dreaded Perfect Entrepreneur

GUEST POST from Arlen Meyers

“Perfect is the enemy of good” is a quote usually attributed to Voltaire. He actually wrote that the “best is the enemy of the good” (il meglio è nemico del bene) and cited it as an old Italian proverb in 1770, but the phrase was translated into English as “perfect” and made its way into common parlance in that form.

Perfectionism is a problem. Here are some reasons why.

  1. It drives other people you interact with, who are not perfectionists, crazy
  2. We live in a volatile, uncertain, complex and ambiguous world where there is no definition of perfect. There are only solutions we test until we find out whether they work or not and then change if they don’t.
  3. Defining something as perfect is a value judgement, not an absolute, Perfection is a pipe dream. As Psychology Today explained, “‘perfect’ may exist as a concept,” but it’s not a reality. After all, its definition is entirely subjective. “Achieving perfection” is entirely a judgment call, depending on who’s trying to achieve it and who’s watching.
  4. It could be a symptom of a more serious psychiatric problem like obsessive-compulsive disorder which is a personality disorder characterized by excessive orderliness, perfectionism, attention to details, and a need for control in relating to others. It is one of many entrepreneurial syndromes that are characterized by entrepreneurial psychopathologies
  5. Meeting the expectations of others to be perfect is bad for your mental health. It will make you unhappy.
  6. There is reason why the Golden Mean has been around for several thousand years
  7. Innovation starts with mindset Being a perfectionist is not consistent with revising the “good” with evidence based business idea testing results
  8. There are reasons why we say doctors, actors, athletes, lawyers, entrepreneurs and other service providers practice their craft. You never get it perfect, even if someone gives you a 10, or a Facebook like or an Oscar for your performance. There is always room for improvement, but almost never perfection. Failure is part of the drill and inevitable. What’s on your failure resume? That’s why, when it comes tapping into a source of entrepreneurial internal motivation, you should make it personal, but don’t take it personally.
  9. The goal of making something perfect or doing something perfectly will get in the way of starting something, like:
  • Business Idea: Instead of waiting until you have a complete airtight business plan, simply start your business.
  • Software: Instead of ironing out every last bug, release your beta.
  • Products: Instead of adding every conceivable improvement and feature, ship your product. Release improvements later.
  • Health: Instead of finding the right gym, selecting the right outfit and picking the right workout, just go for a walk.
  • Website: Instead of finding the best server, CMS, theme, appearance and font, just get a landing page up and start selling.
  • Email: Instead of trying to create a well-written and grammatically impeccable email, just get the message out and click “send.”
  • Value proposition and business model canvas: Define your underlying assumptions and validate them with evidence. It’s called minimal viable product, not perfect product, for a reason.

10. Underbidding everyone by making something “good enough for government work” and then submitting endless add-ons leading to cost overruns is a tried and true profitable business model and there is little or no chance you will go to jail or get fired doing it.

If you want to know how to get to Carnegie Hall, it’s just easier to practice, practice, practice and focus on the journey, not the destination.

Image credit: Pixabay

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Should the Government Encourage Innovation?

Should the Government Encourage Innovation?“We need to out-innovate, outeducate, and outbuild the rest of the world”

– United States President Barack Obama

In the quote above the American President implies that it is somehow the role of the government to drive innovation? But can they? And should they?

Governments and leaders around the world spend a great deal of time talking about innovation and its importance to their economies, but nearly all political leaders and governments have no idea about how to actually foster innovation.

There is a model for how governments can encourage innovation, and boost the performance of their economy as a result, and it is really quite simple. I call it the ICE Model of Innovation, and it’s focused on three key areas where the government can focus its investments of time and money, and both facilitate and fund efforts to advance the public involvement and education deeper into these three areas of ICE:

  1. Invention
  2. Collaboration
  3. Entrepreneurship

1. Invention

Innovation is Invention Collaboration EntrepreneurshipInnovation in any country, especially in the short term, is not achieved by pumping huge sums of money into government-sponsored research and development efforts. Yes, many successful innovations have resulted from government research investments, but we need to take a more strategic approach to these efforts.

The Internet itself may be one of the most successful government research and development efforts, and it has served as a platform for an enormous amount of other innovations to build upon. This type of platform innovation is where governments should target their investment dollars. We need more of these types of platform innovation investments, not just spending on basic research. Governments need to think strategically and fund those research efforts that could serve as platform innovations to power a whole new wave of innovative business ideas and job-creating companies in their country.

At the same time governments need to take another look at what they are teaching the children in their country. Let’s face facts. Today’s schools are designed to mass-produce trivia experts and basic competency in reading, writing, and arithmetic (and maybe some history, science, and other important subjects).

But, to succeed in the innovation economy, the next generation is going to need to be proficient in at least these ten things:

  1. Creativity
  2. Lateral Thinking
  3. Problem Solving
  4. Innovation (of course!)
  5. Interpersonal Skills
  6. Collaboration
  7. Negotiation
  8. Partnerships
  9. Entrepreneurship
  10. And much, much more…

And parents can either pray that the government will revise the curriculum and start focusing more energy on teaching some of these things, or band together and create supplemental learning opportunities for their kids. Seth Godin and I spoke about education and other topics in this interview from 2010:

Some of the work that Dean Kamen is doing with FIRST is a great example of how individuals and non-profits can supplement the educational work of the government to give kids the invention skills and inspiration that they’ll need to help invent a better future.

2. Collaboration

Another important component of innovation is collaboration. People learn more when they connect and share, idea fragments have the opportunity to collect and connect into potentially viable innovation ideas, and are made stronger from additional perspectives and new inputs. In every economy the government has a role to play in helping to encourage collaboration.

Every potential innovation always needs additional human and financial resources to thrive. When done well, the government can help to foster collaboration directly or indirectly. One of my favorite examples of this is the work that NESTA does in the United Kingdom (UK). If you’re not familiar with the organization, it is a charity that was funded by the UK government and NESTA stands for National Endowment for Science Technology and the Arts, and their mission is to help people and organizations bring great ideas to life.

What does Nesta do? Watch the video:

They host a series of innovation, entrepreneurship, science and technology events for citizens of the United Kingdom, produce a collection of complimentary research publications, and are quite active in the social sharing of information (including their own popular blog).

In the United States, the government encourages collaboration through events hosted by the Small Business Administration (SBA) and its public universities around the country to connect scientists, businesspeople and entrepreneurs for collaboration purposes.

And several countries’ efforts to encourage university-business research collaboration is referenced in this report.

3. Entrepreneurship

Everywhere you go cities, states, countries, universities, and private companies are setting up incubators or startup accelerators to encourage entrepreneurship and innovation. This is important, but the importance of entrepreneurship is not limited only to the entrepreneur. At the same time, we must not forget the importance of intrapreneurship to the continuing health of our organizations.

In some ways, intrapreneurship is MORE important to the innovation success of a country than entrepreneurship because collaborative, creative intrapreneurship is the flavor of entrepreneurship that keeps a country’s great companies alive (through this innovation intersection of course).

Entrepreneurs and intrapreneurs are both important and we must consciously try to grow both in a successful society, and while intrapreneurs may not have the same tolerance for risk as an entrepreneur, they also need to understand how to make a business case and other core tenets of entrepreneurship.

There are many government sponsored efforts all around the world to encourage entrepreneurship, including SCORE (Service Corp of Retired Executives), which while technically a charity and not a government entity, received a great deal of support from the SBA in getting started as a national organization and the two entities continue to partner together to encourage, guide, and help entrepreneurs in the United States.

But, the best government programs in the world will still fail to encourage entrepreneurship unless you work to remove the social stigma of failure and examine the penalties for bankruptcy in your country. In countries like the United States and the United Kingdom where bankruptcy penalties are much lower, the level of entrepreneurship is higher. Coincidence?

Conclusion

I hope by now you see that it is possible (but difficult) for governments to encourage innovation IF they focus on increasing the support and skill bases around – invention, collaboration and entrepreneurship. Which countries will have the courage to completely revamp their educational systems to focus on teaching the skills that drive these behaviors? Which countries will create the policies, organizations, events and connections that accelerate these ICE capabilities?

Sources:

Transcript and video of the 2011 State of the Union address

Wikipedia entry on SCORE

Happy innovating!


Build a common language of innovation on your team

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Key to Innovation Success Revealed!

Key to Innovation Success Revealed!Achieving innovation success is not easy. Sustaining innovation success is even harder. The list of innovative companies that no longer exist is long, and some of the biggest enemies of innovation are ultimately complacency and resistance to change.

So what is the key to innovation success?

What lies beneath the artifacts of innovation success that we could point to in individuals or companies that we hold up as innovation heroes?

Well, as I tell the audiences of my keynotes, workshops and masterclasses around the world, innovation success rises up from the intersection of invention (which includes creativity), collaboration, and entrepreneurship. This is why you see these topics covered so much here on Human-Centered Change & Innovation.

Innovation is Invention Collaboration Entrepreneurship

Invention

Invention and creativity are incredibly important to innovation, but invention is not innovation and creativity is not innovation. Invention and creativity are but one component to creating successful innovation. And so yes, teaching your employees new creativity tools like SCAMPER or SIT, engaging in brainstorming activities after teaching people how to brainstorm properly, or providing your employees the space and time in their work lives to innovate will help you achieve greater innovation success, but they are not the secret. They are but one part.

Collaboration

There are a number of people traveling through the world of business and innovation literature spreading the myth that people are either innovative or they or not, that people either possess the innovator’s DNA or they don’t. To that I say “hogwash” (or sometimes something a little bit stronger). Innovation is a team sport and we all have a role to play. It is because of this belief that I created the Nine Innovation Roles and this framework for team-based innovation has resonated well with people all around the world. As a result, the Nine Innovation Roles from my book Stoking Your Innovation Bonfire have already been translated into Spanish, French, and Swedish, with Dutch and Chinese translations on the way soon. If you’re not familiar with the Nine Innovation Roles, they are:

  1. Revolutionary
  2. Artist
  3. Connector
  4. Magic Maker
  5. Customer Champion
  6. Judge
  7. Troubleshooter
  8. Conscript
  9. Evangelist

But understanding which of the Nine Innovation Roles you play on effective innovation teams is just the beginning. At the same time, we must begin to train our employees in the basic principles that power collaboration and teach them how to become effective collaborators. But collaboration is also only one component.

Entrepreneurship

Other than leadership, no other topic probably occupies a greater percentage of the space for business books in an American book store than entrepreneurship. This topic captivates the minds of people in the United States and in many other countries, and everywhere you go cities, states, countries, universities, and private companies are setting up incubators or startup accelerators to encourage entrepreneurship and innovation. This is important, but the importance of entrepreneurship is not limited only to the entrepreneur. At the same time, we must not forget the importance of intrapreneurship to the continuing health of our organizations. In some ways, intrapreneurship is MORE important to the innovation success of a country than entrepreneurship because collaborative, creative intrapreneurship is the flavor of entrepreneurship that keeps a country’s great companies alive (through this innovation intersection of course). Entrepreneurs and intrapreneurs are both important and we must consciously try to grow both in a successful society, and while intrapreneurs may not have the same tolerance for risk as an entrepreneur, they also need to understand how to make a business case and other core tenets of entrepreneurship.

Build a Common Language of Innovation

The Need to Integrate and Educate

I can state in no uncertain terms the importance for companies that are serious about innovation, and yes even countries or states or cities that are serious about innovation, to educate their people in the core knowledge, skills and abilities that relate to invention, collaboration and entrepreneurship. Companies need to educate their employees. Governments AND parents need to collaborate to teach their children. If you do this, your employees or your future citizens will have a much better chance of helping you achieve innovation success for your company or for your society. But even actively encouraging the intersection of invention, collaboration and entrepreneurship knowledge, skills, abilities and practice are not enough. The reason is because the power of this intersection does not represent the secret of innovation success. This intersection is central to sustained innovation success, but the secret lies elsewhere.

So what is the key to innovation success?

In one word?

The answer is…

CURIOSITY

Importance of Curiosity to InnovationDictionary.com defines curiosity as “the desire to learn or know about anything; inquisitiveness.”

Merriam-Webster defines curiosity as “Desire to know… Inquisitive interest in others’ concerns…Interest leading to inquiry

The reason that curiosity is the secret to innovation success is that the absence of curiosity leads to acceptance and comfort in the status quo. The absence of curiosity leads to complacency (one of the enemies of innovation) and when organizations (or societies) become complacent or comfortable, they usually get run over from behind. When organizations or societies lack curiosity, they struggle to innovate. Curiosity causes people to ask ‘Why’ questions and ‘What if’ questions. Curiosity leads to inspiration. Inspiration leads to insight. Insights lead to ideas. And in a company or society where invention, collaboration and entrepreneurship knowledge, skills, abilities and practice are encouraged, ideas lead to action.

So, if you want to have innovation success in your company or in your society, you must work to create a culture that encourages curiosity instead of crushing it. Unfortunately technology and the educational system in the United States and the rallying cry of “More STEM!” are having the unintended consequence of crushing creativity and creating a generation of trivia experts and linear thinkers for our society. We as parents and educators and managers must as a result seek to undo some of this damage. If you haven’t already read it, I encourage you to check out my article ‘Stop Praying for Education Reform‘.

Key to Innovation Success Revealed!We must find ways to reawaken the curiosity of our employees, to keep them curious, and to keep the curiosity of our children alive. We must find a way to fight against the tyranny of linear thinking and the ‘right’ answer, and instead inspire our children to continue asking ‘why’ – despite the fact that sometimes it can be annoying. 😉

To close I will leave you with a bastardized quote from the most interesting man in the world:

“Stay curious my friend.”

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Innovation Quotes of the Day – May 11, 2012


“Framing and reframing the right problem is perhaps the most important attribute of success. No pain (problem), no gain (solution).?”

– Sanjiv Karani


“You must find a way to create resource flexibility. Organizations that want to continue to grow and thrive must staff the organization in a way that allows managers to invest a portion of their employees’ time into promising innovation projects.”

– Braden Kelley


“Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.”

– Peter Drucker


What are some of your favorite innovation quotes?

Add one or more to the comments, listing the quote and who said it, and I’ll share the best of the submissions as future innovation quotes of the day!

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