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Key Take-Aways from Howard Schultz: Turning Starbucks Around

I listened to the “How I Built This” podcast with Guy Raz interviewing Starbucks two-time (and now former) CEO Howard Schultz (from September 28).
They discussed how Schultz really took the brand which was a local coffee bean shop into a massive, global brand that we all now know. Then, he talked about his return to Starbucks as CEO when the company started heading into its lowest point – in 2008. This part of the podcast really intrigued me.
Below are some notes I took from his interview starting at 37:40.

Schultz refers to Starbucks difficult years (2008, mainly, like most other companies during that time) as the “years of hubris”. He mentioned how “growth and success began to cover up a lot of mistakes.”Two chief mistakes Schultz realizes that contributed to Starbucks nadir: 1) “too many stores cannibalizing other stores”; and 2) “financial controls and discipline that were in place were not being leveraged – Wall Street and the stock price became an albatross on the company’s neck.…

Taking Gretchen Ruben’s Four Tendencies Test

As I mentioned in my post last week in asking the question, “who do you envy?”, I was listening to a Rich Roll podcast with Gretchen Ruben, author of The Happiness Project (podcast link here). She spoke with Rich about her latest project and book regarding the “Four Tendencies”.
The Four Tendencies help identify how people respond to expectations – both outer and inner (extrinsic vs. intrinsic). She wanted to understand why people were able to sustain motivation or stick to goals. In effect, she created another personality test to help people connect and navigate relationships.
The Four Tendencies: Upholder: “I do what others expect of me—and what I expect from myself.”Questioner: “I do what I think is best, according to my judgment. If it doesn’t make sense, I won’t do it.”Obliger: “I do what I have to do. I don’t want to let others down, but I may let myself down.”Rebel: “I do what I want, in my own way. If you try to make me do something—even if I try to make myself do something—I’…

Changing the Established Norm

There’s a story that goes – A group of scientists placed five monkeys in a cage, and in the middle, a ladder with bananas on top. Every time a monkey went up the ladder, the scientists soaked the rest of the monkeys with cold water.  After a while, every time a monkey would start up the ladder, the others would pull it down and beat it up.  After a time, no monkey would dare try climbing the ladder, no matter how great the temptation.  The scientists then decided to replace one of the monkeys. The first thing this new monkey did was start to climb the ladder. Immediately, the others pulled him down and beat him up.  After several beatings, the new monkey learned never to go up the ladder, even though there was no evident reason not to, aside from the beatings.  The second monkey was substituted and the same occurred. The first monkey participated in the beating of the second monkey. A third monkey was changed and the same was repeated. The fourth monkey was changed, resulting in the …

Who Do You Envy?

I recently listened to the Rich Roll podcast featuring Gretchen Rubin, author of The Happiness Project (link to podcast).
Early in the interview she posed a question that really piqued my interest – “Who do you envy?”
The question proposed by Gretchen points to what the person who is envied is, does, or has over the person envying. Oftentimes, we ask questions about regrets or what we want only for folks (myself included) to say we have no regrets or we don’t really want anything more than what we have (beyond the usual dreams). Personally, I can say there are a fair number of things I want. However, the thought of who I envy really draws out a deeper perspective. I ask why.
Thinking about this, I envy: Elon Musk, James Dyson, JK Rowling, David Beckham, Jack Ma. I envy them for their remarkable success. Success that was achieved by overcoming incredible failures and adversity. They stayed true to their beliefs and emerged victorious.My older brother and my best bud for raising beautif…

Money Buys Anything

I’ve been thinking of how powerful money can be, and how businesses capture consumer surplus.
According to Investopedia: Consumer surplus is an economic measure of consumer benefit, which is calculated by analyzing the difference between what consumers are willing and able to pay for a good or service relative to its market price, or what they actually do spend on the good or service. A consumer surplus occurs when the consumer is willing to pay more for a given product than the current market price. However, maybe it’s also this notion of consumer surplus that drives how businesses, government, etc. enable those who “have” versus those who “have not”. Consider for a moment how advantageous technologies and tools can be for startups, for example. Some tools enable these companies to flat out survive and build something meaningful. However, due to lack of resources (normally cash), startups are unable to leverage them (think legal, marketing automation, etc.).
Or, think how fliers today…

New Launch! Mmm Donut

Check it out – I’ve started a new site called Mmm Donut (www.mmmdonut.com). With my interest in donuts, I’ve decided to start Mmm Donut to write donut reviews.
Unlike my previous blogs and sites such as 100 Strangers, 100 Days or even this Entrepreneurial Ninja blog, I will not have a set rhythm and cadence for Mmm Donut. Instead, I will try out different donuts and simply write about them – grading each on 7 Donutal Dimensions. SDQ – sprinkle density quotientD2 – dough densityFro – frosting factorFru – fruitinessCho – chocoholicismUni – uniqueness In addition, I’ll have special tags for donuts including:
Gluten-freeVeganFilling I hope to maintain this site for fun without too much burden with regular cadences of posting. Check it out. It’s just for fun. www.mmmdonut.com

Effective Coaching Habits: Building On Gong.io

On Tuesday, I talked about the importance of coaching – Coaches, Coaching, Coach. Today, I want to build on that with sales call coaching. It’s on my mind as we, as a company, start to leverage a new tool to get better visibility and analytics of our calls. I start with Gong.io’s 9 Data-Driven Call Coaching Habits of Effective Sales Leaders.
First, here are the nine habits: Coaching by “using” your teamInvest in the “middle of the pack”Don’t water the garden with a firehoseEstablish a coaching cadenceMeet for a team coaching session every Tuesday at 2PMRecorded calls > live shadowingPositive reinforcementTheme du jourLeverage technology
Of these, I want to point out habits 1, 3, 5, 6, and 8. Coaching by “using” your team. Your team is your best asset to act and react for coaching. Using the team creates a collaborative environment. It enables the team members to coach each other. This creates a sustainable environment where the team acts as just that – a team.Don’t water the garden …

Coaches, Coaching, Coach

My startup’s product gives companies automatic visibility –no added work or key entry from anyone— into their business relationships – everyone involved, the ongoing discussions, meetings occurred and upcoming, and more. We’re built on the premise that transparency yields greater sales results. This shouldn’t be too much of a shock when you consider how teams (sales teams, sports teams, etc.) frequently put communication as the cornerstone of team strategies.
Of course, visibility gives leaders and managers capacity to coach team members. Coaches review game film with players for coaching – pre-game or post. For our customers, it’s enlightening when leadership tout the coaching aspect of our product. For many, it’s a key one benefit they hadn’t thought of, but rises as just as powerful as their original buying intent.
I’ve always been a fan of coaching. Coaching is how players (in any role) get better (+ practice). It’s how C players become B players, B players to A players, and so …

What Should You Stop to be Successful?

I’m reading Marshall Goldsmith’s What Got You’re Here Won’t Get Your There, and early on, Marshall talks about the importance of what gets stopped. We often hear of the successes of others. As Marshall points out, though, there are many reasons why successful people succeed. What is oftentimes just as important (if not more so) and is not talked about is what successful people STOP doing.
What entrepreneurs may stop, for example, is down a path that would not yield successful outcomes. Successful startups are known for their successes; rarely for their failures or what they do to shift their focus.
Marshall writes how people try to change habits and create great processes. This can be challenging, however, with several steps required. Instead, folks could be better off by focusing on small things to STOP doing. Oftentimes, this is just enough to create noticeable, positive results.
When I read all of this, I think about self-awareness, being comfortable with the uncomfortable, and …

Finance of Startups for Dummies: Cap Table

The capitalization table (cap table) is referred to the agreement of shares and ownership of a company. It sits at the intersection of shareholder, number of shares, and company valuation. I realized that I’ve never touched on this in previous Finance of Startups posts, so I’ll cover that ground here.
A few examples of cap tables…
Lois and Clark want to cofound a venture to provide virtual tours into the unknown – called The Great Digital Explore. Lois will be the CEO while Clark will be the CTO. Given their differing skill sets and being friends, they’ve decided to split ownership in half – 50-50. They’ve also decided to set aside 20% of the company for future employees. They value the company initially at $20,000. Par value is $0.002 as they “create” an initial pool of 10,00,000 shares (pretty standard).
The cap table for The Great Digital Explore would look like this:
Shareholder Equity Position Number of Shares Price per Share Value Lois 40% 4,000,000 $0.002 $8,000 Clark 40% 4,000,00…

Practice Empathy: Hitting Home and Leaving Isolation

Empathy. It’s been on my mind a lot recently, and I’m trying to understand why. Then, it hit me – too often we lack it, and this leaves others (most everyone) feeling isolated.
Merriam-Webster’s dictionary defines empathy as: The ability to understand and share the feelings of another. I’ve decided to dedicate today’s post to this singular word because it’s highly important for not just everyday citizens of our communities, but also as entrepreneurs. If you can’t be empathetic to your customers’ problems, you’ll likely fail to build a product/ service that resonates and is sustainable.
First, sympathy and empathy are not the same. It’s important to know the difference because they’re oftentimes interchanged improperly. Sympathy is defined as feelings of pity and sorrow for someone else's misfortune, or understanding between people; common feeling. Empathy goes deeper than sympathy in being able to share/ experience emotions of another.
In a recent enlightenment of empathy and …

Negative Churn: Opportunities to Continue Selling

Last week, I shared a post about negative churn – when revenue from existing customers is greater than revenue lost from customers churning (see article). The relevant question, then, is how do companies achieve negative churn? Here are a few options: Additional licenses – This one is common in today’s SaaS companies – selling based on licenses or “seats”. As a team grows, more seats may be required to gain access to a product/ service.Cross-sell – This type of sale captures cross-functionally opportunities within an organization. For example, a CRM may first be sold to a sales team to manage pipeline. Then, marketing may buy access to the CRM to understand lead and prospect-flow. And so on…Up-sell – Many products and services have tiered business models (packages). Tiered packages allow for companies to address a market’s consumer surplus – sell packages that capitalize on differing price considerations, typically. Think: silver, gold, platinum packages with options that are locked f…