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LEVERAGED CAPITAL NEWSLETTER Leveraged Capital, is a free monthly newsletter that presents growth and strategy issues effecting entrepreneurs and owners of small to medium size enterprises (SME's). Leveraged Capital is published electronically and delivered to subscribers. Your privacy is strictly respected and we do not share or sell subscriber email addresses to anyone outside of Graham Financial Corporation. If you enjoy what we present, please forward a copy of Leveraged Capital to clients and associates. They can subscribe to Leveraged Capital, by clicking on this link: http://www.GrahamFinancial.com/newsLetter.htm and filling out the quick form. =============================================================== This month we look at hiring a CEO for a start-up, how to avoid boring meetings, "Mom and Pop" Internet successes, and reveal a new economic theory that just might explain Enron. All with the intent of finding ways to keep some of that cash flow sticking to your bottom line. Ok one side bar - who didn't enjoy seeing Pelletier and Sale receiving their gold medals? Perhaps only certain Russian and French skating judges. Nice to see our American media friends rallying for us. I challenge any breathing Canadian to not get goose-bumps watching the Olympic Coke commercial He Shoots, He Scores. Too bad our Olympic hockey team hasn't given us goose-bumps yet, but it's early. Two announcements that we are proud to make: Dan Gregory, our Director of Client Strategies, made another type of gold medal this month when he received his designation as a United States C.P.A. Congratulations Dan. We are pleased to introduce, Debbie Arsenault who has been named Senior Meeting Facilitator and Wayne Arsenault who has taken on the role of Technology Support and Client Assistance for a new service being offered by Graham Financial Corporation. Debbie and Wayne join us as we roll out our Interactive Decision Support Meeting Services in March. We will keep you posted as we move closer to our start date. Happy President's Day to our friends south of our border. DPG. =============================================================== In This Months Issue: (Click on the Article Title To Go To The Full Story.)
=============================================================== Quote Of The Month: Investment Hindsight: ===============================================================
"With a good CEO, a company flies; with an average CEO, it languishes; with a poor CEO, it usually disappears." The ideal venture capital investment opportunity occurs when a great business idea is discovered by people who know what to do with it. However, for both the founding team and venture capitalists, the leadership of a strong chief executive is essential for success in the marketplace. Some venture capitalist investors will fund a company that lacks a CEO, but only if the founding team has an agreed upon plan for hiring this critical executive. What are the minimum requirements for a CEO? And how do you identify the best candidate? This paper is intended to provide some insight. Key Capabilities. I. Industry Experience - The individual hired to be CEO of a start-up company must have experience in the same industry your company is pursuing. One who has worked in the industry will understand customer needs and how to influence their purchasing decisions. He or she will understand the strategic positioning of competitors and know their strengths and weaknesses. He or she will be able to identify the most effective selling and distribution channels. In addition, a CEO with industry experience will know others in the industry who may be candidates for future management positions, and will have contacts that may be valuable when establishing corporate partnerships. II. Marketing Orientation - The CEOs which venture capitalists prefer to back know how to select the best products for development and which market segments to pursue. They know how to develop a defensible long-term business strategy. They usually come from an engineering or marketing background, and they understand that successful products are designed to economically satisfy customers' needs. III. Exceptional People Skills - An effective CEO must be able to recruit a high-powered management team. After hiring the best available, he or she must lead, manage and motivate the entire organization. CEO candidates must therefore have a track record that enables you to assess their potential as leaders. Keep in mind: venture capitalists don't like to back individuals who haven't run a company, a division or at least a department - the risk of failure is too great. IV. Ability to Identify and Solve Problems - All CEOs are continually bombarded with problems: product bugs, sales that are below forecast, manufacturing glitches, cash shortfalls, budget allocation decisions, distribution channels, etc. A good CEO is able to identify the key problems needing attention and work with the management team to select and implement optimum solutions. V. High Energy Level and a Sense of Urgency - Venture capitalists love to invest in highly motivated individuals who get many things done simultaneously. A start-up company must move quickly to stay ahead of the competition. An energetic CEO will establish a fast tempo for the company. Identifying a Good CEO. I. Define the Job - You can't really begin looking for a chief executive officer until you know what you want - you must have a template to match. The first step is to define the job. Highlight the specific skills that are required for your CEO position, using the preceding five points as a guideline. It is also important to identify business objectives to be met by the CEO over the next six months and the next three years. Start-up companies have a high rate of change - many people are hired; products are developed and introduced to the market; and manufacturing is begun. During the first months, a high percentage of the problems occur in product development. Then the emphasis usually shifts to marketing and sales, and next, manufacturing becomes more important. The person you hire must have skills that will enable him or her to direct the company's transition from a start-up to a mature organization. II. Solicit and Screen Resumés - Try to identify at least five suitable candidates from your own network of business contacts and, if needed, an executive search firm. Search their resumés for clues indicating that these individuals have the necessary job skills, the proper functional experience (marketing, engineering, operations, finance) and the needed industry background. A key decision is whether a candidate comes from a big company or small company. Many venture capitalists prefer CEOs who've worked for both types. Large companies often train people. Small companies may prepare them for the ever-evolving nature of a start-up. In addition, small companies provide experience working with limited resources; executives who have worked in this environment know they can't build a large staff or spend lavishly. Importantly, candidates who've worked for successful companies usually have had experiences that enable them to create a mental model of how the startup should look in five years. This helps them position the company for success. III. Interview Those Who Meet the Specifications - Before a chief executive candidate arrives for an interview, it is helpful to prepare a list of questions about his or her specific background. An individual's past performance is the only good predictor of future performance, so ask questions that give information about a candidate's past behavior. Good questions for eliciting such information begin with interrogatives such as what, how, when, why, who and where, or imperatives such as "Give examples..." or "Tell me about..." Avoid questions that begin with would, should, will and do, because these queries will elicit hypothetical answers. The candidate will try to second-guess what you want to hear. At least three people should interview each candidate and write summaries of the interviews. The use of multiple interviewers will help overcome biases, and the written records will help later, when you evaluate each candidate. IV. Check References - After the interviews, you probably will have narrowed the field to one or two finalists. Before making a job offer, it is imperative that you check references. These should include former employers, peers and people who have worked for your candidate. In addition to verifying facts and impressions, reference checks enable you to gather information about your candidate's strengths and weaknesses as judged by people who've seen him or her perform. Call references given to you by the candidates. Also try to get additional names from those you call. You may find that these new references are critical to ascertaining whether you truly have a CEO prospect who can satisfy your long-term business needs. VI. Hire the Best, Only if He or She is Good Enough - After all candidates have been interviewed, compare the evaluations made by each interviewer. It often helps to have the selection committee rate each candidate on all skills. Summary notes made during the interviews will help the interviewers recall specific examples of each individual's past performance. Hiring a good chief executive officer requires much effort. Take your time. Be sure of your choice. This is undoubtedly the most important decision any company will make. De Novo Ventures ©2001 De Novo Management De Novo Ventures is a lead venture capital investor focusing on the early stage financings (the seed, start-up and first round) of medical companies in the western U.S., particularly in California. Fred Dotzler has 15 years of successful venture capital investing and 12 years of operating experience. Fred has been Managing General Partner of Medicus Venture Partners since he founded the partnership in 1989. Medicus was an early stage investor in public companies such as Biosite Diagnostics (symbol: BSTE) , Inhale Therapeutic Systems (symbol: INHL), and Tularik (symbol: TLRK). Private companies in the portfolio include Microvention, Omnicell.com, Point Biomedical, SenoRx, and SmartTalk.com. Fred is a member of the Advisory Board of the Journal of Private Equity, the National Venture Capital Association (NVCA), and the Western Association of Venture Capitalists (WAVC). He earned an MBA from the University of Chicago, a Masters equivalent in Economics from the University of Louvain, Belgium and a BS in Engineering from Iowa State University, where he recently received the 2000 Professional Achievement Citation in Engineering award. ===============================================================
Meetings are a large part of business life. In fact, meetings can define your corporate culture, develop group dynamics, and should be a means by which your company is continually developing ideas and teams to move forward toward sustainable wealth. Yet so often we dread attending meetings because, within many companies that we have consulted with, meetings are viewed as an unproductive waste of time for attendees with calendars already bursting. Ask yourself how many times have you heard these comments (or said them yourself):
You get the picture. Most likely, you can make your own very extensive list with more graphic detail. Now imagine a room full of busy professionals talking and being heard all at the same time, sharing and grasping ideas simultaneously. Consider the impact on your company of unleashing these valuable resources. Then, visualize even further this same group of busy professionals working together, as a team, interacting, making decisions and having fun. This is a meeting where communication is made in it's most effective and purest form and creates positive, quantifiable results through the use of some of the most powerful meeting software available today. The technology is sometimes referred to as "meeting-ware". Graham Financial Corporation calls it "Decision Support Technology". Decision Support Technology can be found in strategic planning, executive retreats, focus groups, employee surveys, compensation reviews and HR training and development. Graham Financial Corporation is developing some new formats to serve merger and acquisition needs for acquirers of companies. The flexibility of the technology allows us to create a meeting format to your specific and unique needs. Decision Support Technology allows you to elevate the level of your communication and decision-making at any meeting. The President of Graham Financial Corporation, Paul Graham, recently attended a meeting in which he and 20 senior executives were preparing the basis for a strategic plan for a newly formed association. What he witnessed was a blend of meeting facilitation and technology that kept 21 business egos focused on the task at hand. "Within the first 20 minutes, the number of ideas that were tabled was simply staggering. I was so impressed by the results gained from the use of this technology as a tool, that I immediately knew that our clients had to have access to it", said Paul. Starting in March of this year, clients of Graham Financial Corporation will be able to benefit from Decision Support Technology to conduct meetings from 4 to 250 people. We call the service "Interactive Decision Support Meetings". What is An Interactive Decision Support Meeting? Each person in the meeting is assigned a laptop computer that is networked with the meeting facilitator. Each person is prompted to input ideas, information and content into the computer. These ideas are presented anonymously and projected to the entire group on a large screen. Throughout the meeting, the facilitator assists and prompts the group to organize, prioritize, make decisions about the content, seek consensus, and then create action plans. Preliminary results can be distributed immediately and in less than 24 hours a full report of the discussions, consensus, and decisions can be delivered to management to act on. Why Use Interactive Support Technology? Perhaps the best way to grasp the power of Interactive Support Technology is to compare a conventional meeting with an Interactive Decision Support Meeting facilitated by Graham Financial Corporation. When a company decides to pull some of its top executives or employees out of their already hectic schedule to plan for the future or resolve issues, the costs are tremendous. Not just to plan and host the event, but also in time and salaries for high priced individuals to attend. Compare an Interactive Decision Support Meeting with a conventional conference.
Sharing Ideas and Opinions.
Consensus Building.
Reporting and Action. Even the reporting system using our Decision Support Technology is interactive. As quickly as the ideas and plans are generated, so too are the hard copy reports to back them up. The reports are generated from all the participants' very own words, opinions and decisions complete with supporting graphs and charts. The wait for flip chart translations is over. Graham Financial Corporation is committed to seeking out new avenues to blend technology with sound business planning and review needs. Interactive Decision Support Meetings are an effective, efficient way to save you time, and money and to generate new ideas to increase your competitive edge. Expect to see more information about Interactive Decision Support Meetings over the coming weeks. Debbie Arsenault is the Senior Meeting Facilitator of Interactive Decision Support Meetings. Debbie has 18 years experience with IBM conducting interactive meetings. Wayne Arsenault heads up Technology Support and Client Assistance for Interactive Decision Support Meetings. Wayne has over 20 years experience with IBM in technical and marketing roles. Together, Debbie and Wayne have facilitated over 1,000 interactive meetings across various industries. They can be reached by email at decisions@grahamfinancial.com or by telephone at Graham Financial Corporation (416) 368 - 0088. Call us today for a demonstration of the power of an Interactive Decision Support Meeting. ===============================================================
This issue, I would like to share some personal insights with you that I believe will really help you to move forward in your online business goals. The spark of inspiration for this editorial came when I was reviewing the interviews we have conducted for our new private site, http://dynamic.secretstotheirsuccess.com/t.cgi/648009 where each month we interview two real people who have had extraordinary success on the Internet. Each interview tells a real-life story of hard work and dedication, but there are also messages that are not so obvious at first glance. It is these underlying "common threads" that really interested me. I wondered, "What are the common traits shared by these one and two-person Internet business owners that have allowed them to build web sites that generate incomes of $100,000 to $600,000 each and every year?" Since they sell everything from body building programs to designer soaps to courses on day trading, "what" they are selling is important, but it is NOT the key factor in their success. Their ages, formal education, or prior knowledge of the Internet did not appear to be relevant to the ability of these men and women to make money online either. The closer I read, the more it became obvious that besides all of the strategies and techniques these people reveal as part of their "success formula," there are actually three common traits shared by ALL of their success stories that have allowed them to grow their businesses to generate such extraordinary incomes... TRAIT #1: THEY JUST PLAIN GOT STARTED. Most of the people we interviewed had little or no prior knowledge of the Internet. Typically, this was their first Internet business. Some had never even turned on a computer! And that is the first point I want you to know. It doesn't matter what your knowledge level is when you start -- the important point is you need to begin. You don't have to do everything well. In fact, you don't have to do anything well when you start! But you have to START. Take the first steps (no matter how small) to move your web site dream into reality. You don't need to wait until you know "everything." These successful netrepreneurs did not wait until their web sites were "perfect" or until they knew everything there was to know about selling on the Internet before they got started; they're living proof that you don't need to be an Internet marketing guru to start making money online. I am sure you, too, have a great idea that has been percolating in your brain. You just need to start. TRAIT #2: THEY FOCUSED ON ONE THING AND DID IT WELL. The second common thread I want you to know about is that each one of these people focused on just one marketing strategy at a time, did it well, maximized profits, and then moved on to the next one. That's why they also said that they know there is so much more they can do. There are many ways you can promote your web site:
That's the good news. You don't have to put a lot of pressure on yourself believing that you have to do it all or know it all. To follow their lead, focus on just one marketing strategy such as submitting your site to the search engines, publishing your own newsletter, or learning about how to write effective sales copy... and then really master it. Learn all you can and apply the knowledge as you learn it. This is how you can generate $100,000+ from your online business -- by focusing on one marketing strategy at a time. Start by choosing the theme of your web site and then strive to become the dominant site serving your niche market. Next, make a list of all the different ways to increase the sales to your web site and then decide which one will make you the most money and start with that one. Leave the rest on your "to-do" list until you have squeezed every dollar out of the traffic generation technique, sales strategy, or design element you are working on. There will always be loads of other ideas just waiting for you to use to earn even more profits. TRAIT #3: THEY WISH THEY HAD MODELED SUCCESS SOONER. These successful candidates confess to having made mistakes -- costly, frustrating, and time wasting mistakes that could have been easily avoided. This is the hard way to learn. After all, you don't have to be the one who makes the mistake to learn from it! It is much easier to learn from other people's mistakes. They all said that they could have been earning a MUCH bigger income MUCH faster if they had only started their Internet education earlier and modeled the success of others. And that leads us to the third common thread I want to share with you which is... all of these people have committed to educating themselves in the most profitable marketing strategies and techniques. You don't need to personally conduct your own "trial and error" experiments to discover what software to use, which online resources are the most helpful, or which overall web site designs are producing the best results in today's competitive Internet environment. Others have already cut a path through the Internet jungle for you. Just get on the right trail and apply the strategies and techniques as you learn about them. Great ideas are transferable. What works for others can be adapted for your site, too. FINAL THOUGHTS: Building a successful online business is more of a journey than a destination. What works today may or may not work tomorrow. That's why the learning process never stops. The fact that the Internet continuously changes is the NUMBER ONE ADVANTAGE YOU HAVE over your competition if you stay ahead of the learning curve and they don't. Make a commitment to continuous learning. Study top sites like the ones on http://dynamic.secretstotheirsuccess.com/t.cgi/648009 and model your web site after them. These successful netrepreneurs are regular people who did not start out with multi-million dollar advertising budgets, huge staffs, or advanced technical knowledge. In fact, most of them started out with almost no budget, by themselves, and with little prior knowledge of marketing on the Internet. Your site does not have to be perfect to make money, but you can't make money until you start! Corey Rudl is the owner of four highly successful online businesses that attract more than 6 million visitors and generate over $5.2 million each year. He is also the author of the #1 best-selling Internet Marketing course online. To check out his site that's JAM-PACKED WITH THE EXACT INFORMATION YOU NEED to start, build, and grow your very own profitable Internet business, I highly recommend visiting http://www.marketingtips.com/t.cgi/648009 . ===============================================================
There are 5 well-established major socio/economic systems and one new one - they are described here in simple terms to make them easy to understand: Feudalism. Fascism. Communism. Totalitarianism. Capitalism. Enron Venture Capitalism. =============================================================== To Advertise in Leveraged Capital: If you are interested in advertising in Leveraged Capital, email us at: ads@GrahamFinancial.com and we will contact you. Feel free to forward a copy of Leveraged Capital to clients and associates. It is free to subscribe by clicking on this link: Click Here For Your Free Subscription To Leveraged Capital. =============================================================== To Unsubscribe from Leveraged Capital: If you wish to removed from our mailing list, send an email to us at: ezine@GrahamFinancial.com with the word "Unsubscribe" in the subject field. © 2002 Graham Financial Corporation, All Rights Reserved. |
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