Berkonomics

Careful about equity and options in early stage businesses

Berkonomics

Close. This post is longer than usual. For those negotiating equity allocations it covers some of the most complex issues to address in the process. I just couldn’t reduce it to far fewer words… Dave.

Class 22

Can your lawyer destroy a good business deal?

Berkonomics

Over the years in business and as a member of over forty boards, I have received good advice from corporate attorneys and on occasion bad advice as well. There is a line that should be drawn in a relationship between corporate attorney and CEO or board.

Does your business need money? Read this!

Berkonomics

The subject of raising money is critical to many businesses and a passing option to others, depending upon the capital efficiency of the enterprise.

eBook 21

After 20 years: Updating the Berkus Method of valuation

Berkonomics

Well, it had to happen.

The lion and the ant: A managerial lesson

Berkonomics

This story has been making the rounds lately, and I confess that our research cannot find the source. So, with thanks to whomever created this great little parable, here it is: “Every day, a small Ant arrived at work early and started work immediately, she produced a lot and she was happy.

Work–life balance is now a cliché

Berkonomics

Dave’s Note: Our special guest author this week is Kelly Graham from Decision Toolbox, Inc. You’ll enjoy her take on one of the basic issues of our business-personal lives… By Kelly Graham. Finding work–life balance is one of the most abused clichés in business today.

Entrepreneurs: Take the time to celebrate your exit.

Berkonomics

We come to the end of this cycle of insights with a thought about how you might view your successful exit from the company you have spent so much effort to build.

Money motivates.

Berkonomics

What a title. Of course money motivates. But there is more to it then this. Salaries or hourly wages must be within reasonable limits set by the industry and matched by the competition, both regionally and for the same job classification.

Are you or your business “time bankrupt?”

Berkonomics

Time bankruptcy results from the deliberate over-commitment of core resources. Close. You’d know the symptoms, if not the name.

Boy! If I had only learned this before spending a million!

Berkonomics

Know your market and competition, or don’t spend a dime on anything else. I love absolutes – statements with no wiggle room for gray-area responses. Well, here is one of those, and it deals with market research first and foremost. Close. Let me tell you a short story at my own expense.

Work on your three levels of leadership

Berkonomics

Another leadership development bit? But if you have no time or are impatient, here are the three levels: visionary, strategic and tactical. Skip or stay, but think about your balance in leadership either way.

The seven attributes of a highly successful start–up CEO

Berkonomics

Dave’s note: This week we welcome guest author, David Friedman, to tell us about his favorite startup CEO, and his take after interviewing her – asking for her list of attributes for startup success. . By David Friedman.

Ideas 20

Hire for talent. Rent for experience.

Berkonomics

Want the best way to create your core competency quickly and inexpensively? Think like a startup, with little resources, a limited window of time, and few dollars to spend on expensive experts.

The best advice startups will never follow

Berkonomics

Let me tell you a few short hair-raising stories of entrepreneurs who have raised money and regretted it later. Here are some rules that entrepreneurs almost always ignore to their future peril.

Don’t go on a phishing trip!

Berkonomics

Dave’s note: Our guest author this week is Kevin McDonald, Executive Vice President and Chief Information Security Officer at Alvaka Networks, a network services and security firm in Irvine, California.

Premature scaling kills businesses.

Berkonomics

Venture capitalists sometimes make an error in directing their portfolio company CEOs to push resources to the limit and scale the business to immense size quickly, all to seize market share.

The “drop dead” question for a customer survey

Berkonomics

Sean Ellis, the marketing guru behind DropBox and other successes, advises clients that “The most important question on a survey is, ‘How would you feel if you could no longer use this product?’” He goes on to quantify the response.

You are watched more closely than you think.

Berkonomics

Ever had a manager above you who said one thing and did another? At least once? Or in a pattern of repeats? Well, you’re not alone. Did you think less of that person for it? Would you follow that manager to the ends of the earth?

Fire yourself. Rehire a new you.

Berkonomics

When a new CEO or manager is hired into a company, for a while lots of energy flows from the top and new ideas seem to be generated daily.

Ideas 21

Nail it; then scale it.

Berkonomics

So your business has begun to take off. You’ve figured out your channels of distribution, pricing model and how to support your growing list of customers. Don’t be alarmed by this next statement. That’s relatively easy.

Class 21

Double down!

Berkonomics

This piece of wisdom came from Jeff Bezos, founder & CEO of Amazon, during a board meeting for one of the companies where he sits as board member. Jeff asked the question “Is there anything big or small, which is working better than you expected? Is there anywhere we could double down?”.

Big data: Information is NOT knowledge

Berkonomics

Say that you have a log file of every contact to your website. Or that you are a cell phone company with a multi–billion record log file of every call made from every location to every number dialed using your network. You can accurately state that you have big data at your fingertips.

Tool 18

Drive your recurring revenues.

Berkonomics

This week, our guest post is by David Steakley, a past President of the Houston Angel Network, and a reformed management consultant. David is an active angel investor, and manages several angel funds in Texas. . I have a positive fetish for recurring revenue.

How to avoid “death by meeting.”

Berkonomics

Imagine yourself with a calendar requiring you to be in six meetings in a day. Day after day. How long would it take to induce you to rethink your use of time – and that of the others sitting (or standing) beside you?

Email 15

Why cash is only one measure of employee happiness

Berkonomics

Close. In 1981, Herb Cohen wrote and published “ You Can Negotiate Anything ”, an excellent guide to great negotiating. I’ve read and reread the book a number of times and find myself using the techniques often in many areas of my life.

Guide 10

It’s what you ask, not what you know.

Berkonomics

A friend recently told me a story that had nothing to do with business, but unintentionally had a great lesson for all of us. He had asked his arborist if he could move a mature tree from one part of his property to another – to make room for an addition to his home. “Yes,”

14

Reward success and failure. Punish only inaction.

Berkonomics

Reward failure? That may be a difficult concept for an executive. And there are limits of course. We wouldn’t reward a failure to follow laws, or protect lives, or deliberate endangerment of the company or its people.

Eye of the needle? Why worry over your bottlenecks.

Berkonomics

Think for a minute whether there is any process or person that could be classed as the eye of the needle in your organization. Is there anything, process or person, that stalls the flow of work from start to finish?

Three things you need to have when raising money.

Berkonomics

Here’s more advice from professional investors for aspiring entrepreneurs. Each of us has a list of things we look for early on when identifying whether we want to go to the next step in analyzing a plan. Come to think of it, these are good for challenging any business plan.

A simple test: “Are we managing like jerks?”

Berkonomics

Are we who issue orders to associates or employees ever acting as jerks? We’d never like to think so, or we wouldn’t do it in the first place. If someone is saying “This is confusing to me” when you’ve given an instruction or order, there are a number of ways to respond.

Hugh opportunities do NOT command amazing pre-money valuations.

Berkonomics

Dave’s note: Popular Bill Payne returns this week with a thoughtful take on valuations. By Bill Payne.

How do you focus your team for action?

Berkonomics

How do you get your team to focus and move forward effectively? A fellow CEO recently told me of her method of assuring positive movement within her team.

Take only “smart money” investments

Berkonomics

Close. This statement could be considered controversial. We have previously made the case that professional investors demand more in the form of restrictive covenants and lower valuations. Now we explore the other side of that coin.