Category Archives: Leadership

Leadership

5 Reasons You Should Toss Your Affirmations and Start Asking Questions

I know this runs contrary to every meme and bit of self-help advice you’ve ever heard; even thinking of it makes you look at your refrigerator magnets or those framed little sayings you held so dear.

But, alas, affirmations don’t work.

Research shows that no matter how often you say, “I will be stronger when challenged,” that declaration won’t, in fact, motivate you to be stronger the next time there’s a boulder in your path.

Ditto for, “I am beautiful and empowered,” and any other positive, first-person statement that supposedly will help you conquer a belief about yourself that is less than positive.

So, you’re looking at the mountain and you keep repeating, “I will climb it, I will climb it,” but does that really help? It doesn’t.

The affirmation is more like a doorstop. It doesn’t throw your brain into high gear, trying to figure out precisely how you’re going to climb that mountain and, moreover, how you’re going to overcome the impediments and obstacles that could doom your climb to failure.

Obviously, the downside to the affirmation also applies to everyday life and how you can be more resilient and resourceful the next time life puts a boulder in your path.  Or what plan of action you should take when you pledge that you’ll improve your communication skills or learn to manage your anxiety or any other goal you might set.

But, thankfully, there’s a solution: It’s called a question.

Why questioning works

Research by Ibrahim Senay and his colleagues showed that participants trying to solve anagrams fared better when they prepped themselves by writing down “Will I succeed?” twenty times and fared worse when they prepped with the affirmation statement “I will succeed.” So why is that? Following are five reasons you must toss those affirmations and start usingquestions to gear yourself up when you need to.

  1. Asking questions puts your brain in search mode

    2. When you ask yourself “Will I succeed?” your mind begins to search for the answers to what you could do to succeed and, equally, what might stand in the way of your possible success. Unlike the affirmation which just puts a smile on your face and rose-colored glasses on the bridge of your nose, the question forces you to plan.

  2. Asking questions shakes up your status-quo thinking

    3. You’ve turned to affirmations in an effort to convince yourself that you can do something you’ve previously either had trouble with or outright failed at. Let’s say that you’ve had trouble voicing your own needs in relationships and revert to being a people-pleaser as a default setting. Telling yourself that “I will speak my mind” won’t force you into examining what precisely stops you from doing so. By comparison, asking “Will I speak my mind?” should bring up both the historical reasons why you haven’t and potentially ways that you can in the future. This is especially valuable if you’re tackling a problem that is part of a repetitive pattern in life

  3. Asking one question leads to others

    4. In my latest book, Daughter Detox: Recovering from an Unloving Mother and Reclaiming Your Life, I detail what I call “default settings,” or unconscious behaviors learned in response to an unloving mother’s treatment, many of which are maladaptive in nature. Using the format of the question, research shows, facilitates understanding. Let’s say that your goal is to be less self-critical and that one way to do that is be more self-compassionate. (This is research based.) Asking yourself “Will I be self-compassionate?” opens the door to other questions, including why it’s so hard for you to be accepting of yourself and what obstacles stand in your way. An affirmation won’t do that.

  4. Asking forces you to answer (and puzzle it out)

    5. The chances are good that you suspect that your inability to get something done—deal with relationships, stop procrastinating, lose weight, or any other goal—has to do with some flaw in your character, which it doesn’t. Asking yourself, “Will I manage my relationships better?” “Will I stop procrastinating?” “Will I lose weight” etc. gets you into a proactive stance and forces you to come to terms with the underlying reasons you haven’t been able to get whatever it is done.

  5. Questioning opens up blind spots in self-knowledge

    6. This is more of a summary point rather an additional one but it’s worth emphasizing.

    When you use affirmations, you’re essentially confirming something about yourself you wish to be true. But what if your affirmation is based on something you’re not seeing about yourself? What if you’re not reaching your goals because you’re not seeing the obstacles clearly? What if you’re having trouble losing weight because you haven’t confronted how you self-soothe with food?

    If that’s true, then managing your stress has to be step one before you can lose weight, and no affirmation about losing weight is going help. But asking, “Will I manage stress better?” will help get you on the right path.

    What if you haven’t gotten as far in your career because you haven’t tackled how you avoid failure at all costs and are unable to take any risks? Questioning that fear of failure, rather than repeating, “I will get a better job,” or “I will be promoted,” over and over, will more likely put you on the path.

The take-away?

A question yields answers; a statement doesn’t.

Senay, Ibrahim, Dolores Albarracín, and Kenji Noguchi, “Motivating Goal-Directed Behavior Through Introspective Self-Talk: The Role of the Interrogative Form of Simple Future Tense” Psychological Science (2010), vol.21(4), 499-504.

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Leadership

5 ways to get the most out of leadership coaching

Rosalind Cardinal
Guest Writer,Huffington Post

This blog was originally published by Leaders in Heels.

At some point in their careers, many leaders will opt to receive high-level coaching. Executive coaching is one of the best investments you will ever make in yourself. A good coach helps you gain clarity and provides a safe yet challenging environment for you to practice self-awareness and to learn from experience. Whether you want to learn how to be more effective at work, need guidance in navigating a transition in the workplace, want to hit the ground running in a new leadership position, or simply want to further develop certain skills, the right coaching can help you accelerate your learning curve, gain more confidence, and reap benefit after benefit.

Moving forward with an executive coach is a very big investment, not to mention an important commitment. Just as you might ‘shop around’ for other big investments, you want to do the same when it comes to a coach. Below are 5 things to keep in mind to make the most of your leadership coaching.

1. Set up a ‘discovery session’ before moving forward with a coach

A discovery session is an informal conversation that precedes a commitment to coaching. Think of it as a ‘get to know you’ conversation. This is your opportunity to speak with your potential coach, discuss your challenges and goals, and truly gauge whether or not you and your potential coach are a good fit.

Though this is a conversation, think of it also as an interview. You’re trying to find the right individual to help you achieve your goals. Don’t be afraid to ask your coach questions about their experiences, their methods, their accreditations, and so on. Most importantly, don’t feel pressured to make a commitment at the end of this conversation. If you want to think it over, you’re under no obligation to commit on the spot, and you shouldn’t feel as if your coach is pressuring you to move forward.

Though this is a conversation, think of it also as an interview.

Throughout the conversation, check in with yourself: do you feel comfortable and relaxed with this coach? Remember, you’ll be spending a great deal of time with them, so this is important.

2. Make sure you and your coach have compatible styles

Are you a very structured and time-conscious person? Then you might find it frustrating to work with a coach who is always late or reschedules appointments regularly. Are you very organized? Then a coach who doesn’t follow-up with you as promised may drive you up the wall. Maybe you’re a deep, reflective thinker who needs time to process information. If that’s the case, then a coach who talks all the time and doesn’t give you thinking space will overwhelm you rather quickly.

An expert coach will gauge your style and seamlessly adapt to you, but if you find that your coach isn’t doing this, then it’s time to move on and find someone else who’s a better match. That said, get clear on who you are as a person, as a leader, and as a thinker…and then ask yourself what qualities you need to have in a coach in order to feel as if your regular coaching sessions are spaces in which you can grow and thrive.

A coach often wears a number of hats during the coaching experience. They can be a feedback provider, reflective thinking partner, expert mentor, practice partner, accountability creator, positive reinforce, supporter, and more. Ideally, your coach will flexibly switch hats depending on your needs at the time, which is why it’s important you know what those needs are.

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3. Ask yourself if you feel confident in your coach’s expertise

One of the worst things you can do is enter into a coaching commitment with your head full of doubts

Don’t be afraid to ask for testimonials and references. An expert coach who’s worked with countless people and has helped them to achieve their goals will be more than happy to point you in the right direction when it comes to praise from past clients. The same goes for qualifications and accreditations, especially if you’re interested in working on specific skillsets or with certain diagnostics/psychometrics.

One of the worst things you can do is enter into a coaching commitment with your head full of doubts regarding your coach’s qualifications. You’ll begin to question their guidance at every turn, which will result in a waste of time, money, and energy. However, when you do feel confident in your coach’s expertise, it’ll motivate you to put their recommendations into practice and you’ll find yourself growing like never before.

4. Have a contract or coaching agreement in place.

You and your coach should both be clear about the timeframe of your coaching commitment. This is best outlined within a formal contract or agreement that both parties sign. Such an agreement will highlight the duration of the coaching as well as the cost of the investment.

In addition to regular sessions, there may also be a provision for ‘on demand’ sessions. Just as well, there should be an ‘out clause’ that allows you to discontinue coaching if you at any time don’t feel that you’re getting what was agreed upon.

5. Get clear on what you want to get out of your coaching

Finally, you and your coach should both be clear about the objectives of the coaching. What is it that you want to achieve over the course of executive coaching? How would you like to grow? What would you like to learn about yourself? What goals would you like to accomplish? What skills would you like to acquire and/or develop further?

These objectives will help to create a structured approach in your coaching sessions. You and your coach should also discuss how you both plan on measuring your progress from session to session.

Additionally, ensure that your coach has a system in place to keep you moving forward in between sessions. This might mean following up with you with a reminder of next action steps, providing you with key notes from a previous session, and/or delivering any promised materials or readings.

These are 5 ways you can ensure that you make the most of your next commitment with an executive coach. Of course, your results aren’t dependent on your coach alone. You need to be committed to making change and be prepared to put in the time and energy. The leaders I work with who achieve the biggest outcomes are people with skin in the game. They have a very compelling reason to be coached, they are committed, responsive and reflective, and they are open to challenge. As with anything, people who are not committed to change will not get results. Ultimately, while your coach is a trusted guide, the outcome of the sessions depends on you.

Startups

Rule #1 in Angel Investing – It’s All About the Team

Note: This article is part of Angel 201, an ongoing series for Angel Investors. To learn more about developing the key skills needed to make great investments, download this free eBook today Angel 201: The 4 Critical Skills Every Angel Should Master or purchase our books at Amazon.com.
Team Huddle
Great ideas are a dime a dozen.  Living in the Boston/Cambridge area, we are surrounded by some of the most innovative researchers in the world working at institutions like MIT and Harvard. I’m pretty confident when I say, in Boston, hardly a day goes by when some graduate student or professor doesn’t invent a new product, discover a new molecule or create a cool app. Unfortunately, without a great team behind that new product, it’s doubtful that a great company will result.
There is an old saying that goes something like this… “I’d rather invest in an A team with a B plan than a B team with an A plan.” Without a doubt, we feel this is the most important point for investors to embrace. Once you understand how critical the team is to a successful outcome, the greater success you will have as an investor. As a long term serial entrepreneur and a successful angel investor, I asked Ham to tell me how he evaluates teams and differentiates the A teams from the B teams.

Q: Ham, let’s start with the person at the top. How do you evaluate startup CEOs and what are the most important characteristics you look for?

First and foremost, I look for integrity. That character trait might sound obvious and a bit trite, but I feel it’s very important to be on alert for trust issues when you are interacting with an entrepreneur. From the initial meeting with the company, during the due diligence process, and finally while negotiating the deal, I want to make sure the CEO is being honest and negotiates in a fair manner. If I sense any duplicity at this early a stage, I can be sure that things will only get worse as the company progresses through the challenges faced by all startups.
That leads me to my second character trait, tenacity. It’s not easy being a startup CEO. The pressure to succeed is enormous, and CEOs struggle every day to motivate their team. Life in a startup is a series of highs and lows not too dissimilar from riding a roller coaster. One minute life is great as you ship your first product. The next day you hear back from customers that your product is lousy. It takes resilience to handle the good and the bad that a CEO faces on a daily basis. A CEO’s tenacity allows her to continue the battle to succeed even when others would give up in despair.

Q: Okay. Those make sense, but there has to be more in the mix than that? What else do you look for?

Next on my list is a combination of IQ and EQ. In other words, a CEO needs to be smart and self aware. By “smart”, I mean the CEO has the intelligence to discover a major market opportunity, and articulate a plan that will address that opportunity. The CEO has the intelligence to develop high-level strategic plans, and the problem solving skills to deal with day-to-day tactical and execution challenges.  By “self aware”, I mean the CEO works well with a great team and is willing to take guidance from close advisors. In other words, the CEO must be coachable. A great CEO wants to hire “A” team members who are better than he is for the job being filled.
A deep market understanding is an important skill set for a CEO because it provides the North Star from which the CEO will navigate the company. Great CEOs are two steps ahead of the competition because they have an inherent understanding of where the market is heading.
The final characteristic I look for in a CEO is presence. I define presence as follows… A CEO with presence has the leadership charisma to command any audience. This type of charisma allows the CEO to take charge whether speaking with employees, customers or investors. When the CEO walks into a meeting, you know who is in charge! Furthermore, this ability to command an audience gives the CEO a unique ability to create a winning culture. Building a winning company culture takes constant care and attention from the CEO, and the best way to tend to this task is by communicating a compelling story on a regular basis to the entire company.

Q: Wait – what about experience?  What role does experience play in startup success?

This is a trick question, right? The obvious answer is that experience is critical. You should always back serial entrepreneurs with decades of market experience. Well… that’s true in some cases. If you are looking to build the next generation of product or service in a well established market, having a few grey hairs and a deep network of contacts is probably the right way to go.
But, suppose you are trying to totally disrupt a market. For example, you are Jeff Bezos and you are looking to change the way people buy stuff. When he started Amazon, online retailing was in its infancy. Lots of market experience didn’t exist. He had to make it up as time went on. So disrupting markets takes a very different type of entrepreneur. Success at Amazon had very little to do with experience and much more to do with the ability to try new things and learn as fast as possible!

Q: So you hear the CEO give her pitch and then you spend an hour or two digging into the company to learn more. How are you able to really get to know the CEO and figure out whether she has the key characteristics you are looking for?

The first step that most investors take to learn more about the CEO is to reach out and perform reference checks. Some of the references will be from contacts that the CEO provides to you. Other contacts will be people in your network that know the CEO. This type of background information is useful if you ask the right questions. At Launchpad, we have a well defined set of questions we use to guide these interviews. It helps us uncover red flag issues that we need to keep an eye out for, and it helps us apply resources to help the CEO be successful.
Personally, I find the reference checks to be useful but not sufficient in helping me get to know the CEO. I like to take things one step further. In addition to typical due diligence meetings, I arrange for time with the CEO in a non-business setting. For example, I like spending an evening with the CEO at dinner or a sporting event. Hopefully, our conversation flows smoothly with most of the discussion focused on personal topics. This way I get to know the CEO in a different context.

Q: Moving beyond the CEO, what skills do you look for in a startup company team?

There are four skills that I look for in a startup team. Given the small size of an early stage company, sometimes these skills are part of the CEO’s repertoire, but I like to see them incorporated in the skill set of the other founding members.
  • First, I look for selling skills. Whether talking to prospects, investors or future employees, the management team has to be able to sell. If you ain’t sellin’, nobody’s buyin’!
  • Second, I look for technical skills. I invest in tech companies and so I expect the company will have a great product that will build some competitive barriers to entry.
  • Third, I look for a deep market awareness. As I discussed in one of the above questions, this market awareness is critical for developing the company’s strategy.
  • Fourth, I look for product management skills. This is closely related to market awareness, because it requires the ability to listen to customers and understand the competitive environment. It also requires the ability to translate market needs into a plan that engineering can actually deliver in a timely fashion given limited company resources. Product Management is an often under appreciated skill set. A greater number of tech companies would succeed if they invested more in this critical resource.

Q: What’s the right size for a startup company founding team?

It’s not as though there is any magic number here, but I tend to like founding teams with 2 or 3 people. Here’s my thinking on why that’s the right size. To start with, we won’t invest in a company that has only one person involved. If a founder can’t convince a co-founder to join him in this crazy startup, why would the founder think he can convince investors to put money into the business?? With 2 co-founders, the company is moving in the right direction (read more on Key Founder Issues). Hopefully, the team has complementary skills that help round out the need for the key skills I discussed in the previous question. And, if 2 people can’t pull that off, then 3 team members usually can.
Once you move up to founding teams of 4 or more you run into a lot of issues with coat-tail riders, founder dilution, outgrowing the co-founders who aren’t producing, etc.  Another issue to be aware of in this context is that founders always obsess about negotiating valuation and they can become overly focused on issues relating to dilution. That makes little sense when you consider the deadweight college buddy / co-founder who owns 25% of the company.  Fussing about dilution by bringing in great investors and capital while having no-ops on the team, is like locking the front door but leaving the back screen door swinging in the breeze!
Want to learn more about building an angel portfolio and developing the key skills needed to make great investments? Download Angel 101: A Primer for Angel Investors and Angel 201: The 4 Critical Skills Every Angel Should Master for free, or purchase our books at Amazon.com.
Marketing

6 Easy Ways to Incorporate Emotional Appeals Into Your Website’s Call to Actions

6 Easy Ways to Incorporate Emotional Appeals Into Your Website's Call to Actions

ALEX BASHINSKY
CONTRIBUTOR
Co-founder of Picreel
Image credit: Shutterstock

Your website’s calls to action (CTAs) are some of the most vital parts of the entire site. They aren’t just meaningless sentences; they’re the hands that guide traffic to leads, sales or your other ultimate goals. And while you can brand your calls to action and place them in a central location, how can you really make sure they’re irresistible?

A recent study by Hubspot of more than 40,000 websites shows that using plain language like “Submit” or “Download” makes the CTA much less effective than most people realize. Instead, you’ve got to spice it up, and make it appealing.

To do so, a great call to action needs more than just good design and placement — it requires an emotionally charged message. By tapping into an emotional appeal, you’re actually inspiring your reader to take action beyond the logical value of your CTA’s text.

Related: Crafting a Persuasive “Call to Action” on Your Site

Here are six emotion appeal strategies you can use to get results.

1. Fear

There are many different ways you can (tactfully) use fear in your call to action. Just remember, you’re not trying to scare a customer away — you’re trying to remind them of a fear they already have, and how your company help.

It can be fear of failure, being left out or change. Regardless, it must tie directly to what you’re offering. The sample below shows how QuickSprout taps into your fear of failure. Are you doing your SEO wrong? QuickSprout will tell you, and then they’ll help.

 You know that feeling of wanting to be included? Of wanting to be a part of the tribe? To feel united with others over a common goal?

That can be a very powerful feeling to use in your call to action. Your audience may already feel like they’re a part of your special tribe, but you can take things a step further. Below is an example of how Hubspot uses this emotion in a friendly, encouraging call to action to “join your peers.”

3. Anger

It might seem unlikely, but anger can actually be an effective motivator. Sparking anger or irritation in your user can lead them to take action on your CTA.

This example, shared by Copyblogger, shows us that when the CreateDebate website encouraged viewers to “Argue Now,” they experienced a 45 percent boost in account starts.

Related: 5 Elements of an Irresistible Call to Action

If you’re reader is hooked and cares, don’t you want they’d want to join in on the argument?

4. Love

Want to encourage that wonderful feeling of love? Take a look at how eHarmony does it in order to activate the emotion of love its visitors are so desperate to find.

The CTA pictured below is clear and simple — and it gets people ready to register quickly by offering a fill-in-the-blank form. While the images (and entire site) contribute to creating a feeling of love, the specific language used in the call-to-action form contributes to the feeling that, just by signing up, you’re starting your journey to find your next soul mate.

The call to action suggests you can start communication now with your next partner. It is soft and subtle and works well. Using “Let’s go” helps to bring back some sense of adventure and romance into the online-dating world (just as the company itself has done). With this particular CTA, it’s clear that you’re not committing to your next marriage; you’re just starting a fun and lovely journey in the dating world.

5. Freedom

The decision for WeightWatchers.com to use freedom as an emotion is a very clever one, as it would be easy — and perhaps too obvious — to incite a feeling of guilt or sexiness in order to pitch a weight loss product.

If you’re trying to lose weight, chances are you don’t feel sexy — but you don’t want to feel any more guilt either. You’re already carrying around a bag of negative emotions. Instead, you want to feel empowered that you can and will be healthier — that you have the freedom and ability to change. This CTA below makes you feel like you can lose weight with Weight Watchers help.

That’s what makes this CTA successful: It’s capturing that feeling of freedom and self-empowerment. As the website says, you have nothing to lose by looking at its offerings — and getting started is only one click away.

6. Curiosity

The wonderful and lively global brand Virgin has always excelled at creating great content campaigns that feel fun and exciting. It’s simply a core part of who they are as a company.

As a result, it’s no surprise that, when launching the Virgin Hotel brand, Virgin.com used the message below to play off of the emotion of curiosity. The message is simple: You’ve heard about the new hotels. You may have even seen them. Now, why don’t you get a peek inside for yourself and “book now?”

It’s a very intriguing and very simple call to action, but it’s made even more effective by being paired with the value of a 20 percent discount for guests that book now. Don’t you want to see what’s behind the sign too?

Certainly, these are just a few of the different emotional CTAs you could create. I’d love to hear more about how you’re using them in your marketing campaigns.

Related 3 Critical Principles of Effective Calls to Action

Marketing

The Online Marketing Myth That Hooks Every New Entrepreneur

 

JAYSON DEMERS
CONTRIBUTOR
Founder and CEO, AudienceBloom

Marketing is a practical necessity for all businesses — big, small, new or old. But, unlike other business needs that are fairly cut-and-dried (think accounting), marketing is a bit more qualitative in its approach.

Related: 5 Online Marketing Basics Every Entrepreneur Needs to Know

In fact, there are dozens, if not hundreds, of different strategies to choose from, and conflicting information can sometimes be an issue in trying to make sense of them.

As a result of this somewhat imprecise and less-than-predictable nature of marketing, there are several myths about it that persist in the entrepreneurial community. There are big myths — like the idea that marketing is only a tool to increase sales — and small myths, like the one that says paid advertising is the only way to get seen on social media.

But there’s one myth that stands out among the others, because almost every new entrepreneur falls for it: the myth that somewhere out there, there’s a guaranteed formula for success.

Why the myth hooks so many entrepreneurs

It should be fairly obvious why the myth is appealing. If there’s a guaranteed strategy out there to earn you more visibility and sales, it gives credence to your marketing efforts and reduces any perceived risk of investing in it.

If, sooner or later, you stumble on the “right” marketing strategy, you’ll make money no matter what. The reality, that marketing is often unpredictable and rarely works the same for any two different businesses, is scary and intimidating.

Sources of the myth

There are a few reasons the myth persists today. Part of it is its raw appeal, assuming it were true. If there isn’t a guaranteed method for success, that makes marketing scary and unpredictable, so some entrepreneurs hold on to this myth out of necessity. The myth also persists due to the sheer number of marketing agencies that have peddled their services under the false pretense that they have the “magic formula” for results.

Some agencies guarantee their results; and although this isn’t inherently bad or deceptive, it can be misleading to a new entrepreneur. For example, an agency might use different strategies, adjusted carefully and frequently along the way, to get those promised results for every client.

Related: The 10 Traits of Successful Online Marketers

This is also a dangerous myth to spread by word of mouth. When a new entrepreneur hears from a more experienced entrepreneur about a successful marketing strategy, he or she may assume the strategy works for everyone. Similarly, if a new entrepreneur finds a specific strategy to be successful, he or she may genuinely believe it will be successful for everyone.

Why the ‘myth’ is a myth

So, having established that there is no guaranteed formula for marketing, let’s tap into the reasons why this belief is a myth:

  • Different companies have different needs. You know, for example, that the sales cycles for B2B and B2C businesses are extremely different. Brands, industries, structures, demographics, competitive environments, technologies and geographic locations are just a handful of the factors that can influence which marketing strategies “work” — and those are different for every business.
  • Consumer behavior is unpredictable. First, let me clarify that market research is valuable (and, I would argue, necessary). The more you know about your customers’ demographics, the better you’ll be able to communicate with them. That being said, nothing is set in stone, and consumer behaviors will often defy your expectations: Even a simple change of fonts or colors can have a significant impact on your bottom line.
  • Technology and trends change constantly. Had there been a single marketing strategy that could guarantee success in 2005, there’s no way it would still be relevant today. In the digital age, consumer trends and available technologies change so fast it’s almost impossible to keep up — and that means that the roster of effective marketing strategies is always evolving as well.
  • Experiments are what drive results. Ask any successful marketer how he or she achieved results, and you’ll hear back something about experimentation. All successful marketers are unsure of themselves at first, but they experiment, run tests and make adjustments until they see the results they want.
  • If there really were a magic formula, more people would be using it. It’s a simple statement, but an important one. If there really were a strategy that worked for everyone, the secret wouldn’t be kept for long, and every business in the world would soon be using it.

Key takeaways for new entrepreneurs

If you’re new to the world of entrepreneurship, your biggest takeaway should be obvious: Don’t fall for the myth that there’s a specific marketing strategy (or set of strategies) that works 100 percent correctly in 100 percent of situations. Every business, brand and entrepreneur has different needs. And even if they didn’t, consumer behaviors, trends and technologies would still be too difficult to concretely predict.

The only way to be successful in marketing is to learn from others, take your best shot, then experiment and tinker with your approach until you come up with something that works for you.

Don’t let any false promises of “guaranteed” or “magic” formulas get in the way of that process for you.

Related: 11 Marketing Tools Worth Trying in 2016

Leadership

10 Financial Mistakes Rich People Never Make

10 Financial Mistakes Rich People Never Make

DANIEL ALLY
CONTRIBUTOR
Self-Made Millionaire & Business Expert
Image credit: Shutterstock

I hear people giving financial advice all the time. Most of them aren’t rich.

Those who are rich would disagree with what many charlatans preach. The other day, I came across an article proclaiming, “Skip your lunch, don’t buy expensive coffee, cut your hair less often.” This is a horrendous way to live your life and it promotes poverty. It’s smart to be thrifty, but you don’t want to be cheap. You should never do anything that will deprive you from your joy.

I promote prosperity–and taking away these simple pleasures will not make you rich. It will drive you to be more frustrated from these unrealistic disciplines. Most of these hypocrites who profess these antics haven’t even made it financially. They just sit at a keyboard in a delusional manner, waiting for a payday that often never happens.

Financial advice is freely given by most people, but most of it is horrible. Conversely, the words you are currently reading are written by someone who is a self-made millionaire. Therefore, watch whom you learn from, for it is in your best interest (pun intended).

If you’re naturally a hard worker with a great career and have been diligent in all your affairs, you can have prosperity now. However, you might be asking, “Why haven’t I made it yet?” The answer to this question is in the way you think, feel, and act toward your money. Making better choices with your money can turn your life around.

There are certain financial mistakes that rich people never make. The journey in becoming rich will require you to make a few mental changes in your behaviors. Once you make these adjustments, you will begin to see the progress as your create more positive results in your life. Acquiring wealth is a great goal, but who you become in the process is even more worthwhile.

Here are 10 financial mistakes rich people never make:

1. Not Investing in Yourself

America’s first millionaire, Benjamin Franklin, was known for saying, “An investment in yourself pays the best interest.” Often, people depend on their employers to buy them books, send them to seminars, or provide them with coaching. However, you must take your education into your own hands if you want to prosper. Invest in yourself.

Related: 7 Networking Tips From a Real Millionaire

2. Over-Entertainment

Yesterday,I popped into a local Dave and Buster’s to see the grand opening. It was crowded with hundreds of young adults (ages 21-35) who were wasting precious time and money. Most people spend 30-50 percent of their paychecks on entertainment, while they temporarily escape the realities of life. Instead, rich people use that time and money to fund their dreams.

3. Buying on Credit

Many people purchase objects they can’t afford with money they don’t have to impress people they don’t like. This tragedy decimates many people, leaving them with a hopeless feeling when they repay their high-interest loans. If a person hopes to become rich, they will use their credit cards for growing and promoting their business, not funding personal expenditures.

4. Hiding From Your Spouse

Millions of married couples don’t talk about money. It makes them uncomfortable, which sometimes leads to arguments. However, you cannot get rich unless you disclose your financial precepts with your spouse. Money is only multiplied when love is in the mix and both members of the household have a clear understanding about their finances.

5. Mortgaging a Home

Some “rich” people mortgage their homes, but they aren’t really rich. Mortgaging your home leads to an endless battle of re-financing, bill-paying, and inflation. When you mortgage a home, you’re likely to pay twice as much asthe original price! Rich people rent until they can buy their house with straight cash, like I did.

6. Traditional Retirements

Our retirement system is a joke that must be evaded by those who want to become rich. If you’re depending on mutual funds, 401(k), and certain life-insurance policies, you’ll do better boarding the Titanic. Plus, if you’re saving money to enjoy it for your sixties, that’s like saving up sex for retirement! Instead, build your fortune while you are young.

Related: 10 Questions Every Aspiring Millionaire Should Ask

7. Buying Inferior Goods

Price shoppers and coupon clippers will hate this, but when you buy shoddy goods, you get shoddy results. If you live by the price, you die by the price. Instead of buying what is “cheap,” buy the best goods that are available. Rich people know that buying a $40 shirt which will last for four years is better than buying a $10 shirt that must be replaced every year.

8. Lack of Enjoyment

Consumerism is funny. During 50 weeks at work, people think about vacations and when they finally get their two weeks, they only think about work. The truth about becoming rich is that you must enjoy the money that you already have, whether it’s $10 or $100. Your money will only expand if you appreciate it and think about how you can enjoy it more. You’ll always get more of what you enjoy.

9. Not Saving

Most people blow their money on miscellaneous goods. When they see ‘X’ amount in their bank account, they automatically think of what they “need” and purchase it immediately. However, this impulsive behavior must be eliminated. Rich people save at least 10 percent of what they earn and rarely take out personal loans for themselves, even if they think they need it. Save.

10. Working For Money

The majority of people in this world work for money, but rich people let money work for them. They know that their money will be a byproduct of the service that they render to the marketplace. Rich people also acknowledge the fact that their material wealth is the sum total of their entire contribution to society. That’s why they never work for money.

Making these mental shifts can dramatically alter your life. When you start changing your financial habits and avoiding these mistakes, you will be on your path to be rich. Remember, it’s not what you acquire that makes you rich, but who you become in the journey. And of course, I hope to be your neighbor one day; maybe I’ll invite you to my home!

Related: 7 Tips to Becoming a Millionaire

Startups

Money isn’t the only valuable thing a VC can give a startup

Ken Yeung
A visitor views the electronic sculpture '$' by Tim Noble and Sue Webster at Sotheby's auction house in London June 8, 2015.

Above: A visitor views the electronic sculpture ‘$’ by Tim Noble and Sue Webster at Sotheby’s auction house in London June 8, 2015.

Image Credit: REUTERS/Toby Melville – RTX1FMQP

Entrepreneurs know it can be difficult selecting the right investors to fund their startup. But instead of choosing firms based on which has a celebrity partner or offers the most money, Norwest Venture Partners‘ Sergio Monsalve counsels startups to select venture capitalists who will be there for the long term.

In fact, he offers several points a company must consider before taking money from an investor: Are they proficient in your space? Has the firm demonstrated that they are dependable in good times and bad? Are they aligned with your vision?

Norwest Venture Partners (NVP) may not be as well-recognized as the likes of Andreessen Horowitz, Kleiner Perkins Caufield & Byers, Greylock Partners, and Google Ventures, but for over 50 years, the firm has been positioning itself as more than just an investment provider. “Early on we realized that we needed to be catering to the needs of entrepreneurs and had to look at [them] before [the need] arises,” Monsalve told VentureBeat in an interview.

He further explained what it means to be service-oriented: “Being a multi-stage firm with a large fund, [entrepreneurs] get the best of both worlds (capital and resources). You work tightly with a few partners that can help you throughout your company’s life cycle. How do you start a company from scratch, establishing product fit, scaling, IPO, creating a reputable company model?”

All venture capitalists aren’t created equal

When a startup decides to accept funds, Monsalve believes it’s important to consider what else investors are bringing to the table. NVP, for example, touts its entrepreneurial roots (many of its partners were founders themselves) and a database of knowledge around different market conditions, trends, and other insights gleaned over the past 53 years.

He cautioned that many venture capitalists are unwilling to extend themselves beyond the initial outlay of money. “A lot of people that are investing today just want to write a check and pray,” Monsalve said. “That’s not a strategy that works — that’s called betting. [NVP] wants to invest and partner with startups and work with them.” He added that NVP sees its role as essentially entrepreneurial, in that the company has “skin in the game” and is willing to do what it takes to help the business succeed.

Monsalve explained that entrepreneurs need partners who aren’t afraid to dive into the trenches when things go bad. For NVP, that includes more than what they put in financially; its partners are willing to put in the work to help out in whatever way it can: “You can call someone at 5 a.m. or ask for help on the weekends — this doesn’t happen if you just pick someone off the street and give them a few shares.”

Wallpaper along a building in London, England near the Grand Union Canal.

Above: Wallpaper along a building in London, England near the Grand Union Canal.

Image Credit: Edward Simpson/Flickr

How to pick an investor

Monsalve believes it’s important for a startup to look for firms that share its ideals. Be clear about what the investor sees for your startup as it grows from early stage to potentially being acquired or going public; otherwise things could end badly for everyone. “You can’t do shotgun weddings,” he said.

He counseled that the only way to be sure you see eye to eye with prospective investors is to have detailed conversations. Are they thinking about major issues the same way you are? What are their thoughts about contingency plans, such as pivoting, in case things go awry?

Beyond finding like-minded investors, founders also need to determine if the firm has proven competency in their particular space. This is perhaps the most obvious concern, but for Monsalve, it’s not enough just to have knowledge — one must also be constantly curious about the changing landscape. A smart investor will be knowledgeable about recruiting, establishing company culture, dealing with ways to grow the company, and dozens of other issues that a startup will have to address.

What if you’re gearing up for a potential exit, either via acquisition or public offering? That’s something a partner should prepare you for, Monsalve said. This is a perk that NVP offers through its annual investment summit, which introduces investment bankers, portfolio managers, and analysts to companies thinking about going public soon. This opportunity gives startups a chance to learn the ins and outs of the process before preparing for their own IPO.

Last, but certainly not least, is whether a firm has proven itself to be a “good actor,” not only in the best of times, but also when a company is under duress — have they demonstrated grit, resilience, and a willingness to stick it out? Monsalve brought up the example of Lending Club, a peer-to-peer lending company that was on the verge of being shut down by the Securities and Exchange Commission (SEC) in 2008. As an investor, NVP counseled Lending Club to work with the SEC to address its issues and provided enough funds to keep the startup operational. Not only did Lending Club remain afloat, it settled with regulators and even went public.

NEW YORK, NY – DECEMBER 11: LendingClub Corporation led by Founder and CEO Renaud Laplanche and members of the company’s management team ring the opening bell at the New York Stock Exchange on December 11, 2014 in New York City. (Photo by Ben Hider/NYSE)

Above: NEW YORK, NY – DECEMBER 11: Lending Club Corporation, led by founder and CEO Renaud Laplanche and members of the company’s management team, ring the opening bell at the New York Stock Exchange on December 11, 2014 in New York City. (Photo by Ben Hider/NYSE)

Image Credit: Lending Club