What Not to Do: 5 Lessons From Failed Unicorns

The name unicorn — a burgeoning company valued at over $1 billion — turns heads in the business world, but in actuality is far from a guarantee of sustained success, or even survival.

Many companies with the requisite amount of passion, planning and smarts have fallen by the wayside due to hazards, both internal and external. When you run a business, you must constantly learn from the mistakes of others, even those outside of your industry. This is a unique time to build a business, and even though you may not be in the tech sphere like most of these companies, there are real lessons for enterprises of every stripe to learn from, and hopefully, avoid.

1. Don’t overpromise.

Lofty goals are an important thing to have, but your business can’t be based on something you’re not ready to deliver. One of the biggest stories to come out of Silicon Valley last year was the startup Theranos, which promised a quantum leap forward in blood testing technology. Their tests, Theranos claimed, could perform a number of health assessments far beyond what was already possible. People are always eager to find the next big leap in tech, and one tied to the field of healthcare carried extra attraction.

Unfortunately, the facts of the tech didn’t bear out their lofty promises, and the company is facing the ire of investors and even Congress in order to answer for their false promises. It’s not impossible to imagine that Theranos might have been a successful company if not for the blind ambition that led them to overstate what they were truly capable of. Desire is a powerful fuel for any company, but you can’t let it drive you off a cliff.

2. Value your workforce.

The public’s trust is just one of the many intangible assets of your venture whose value can’t be overstated. One slightly more tangible one would be your workforce. Whether a startup with a handful of employees, or a massive conglomerate employing thousands, the people on the payroll are the ones who keep the engine moving, and to abuse them only hurts you.

The coworking spaces run by unicorn startup WeWork (52 locations in 16 cities worldwide), a glittering lure for young businesses, were the subject of some serious labor disputes from cleaners looking to improve their working conditions. The company responded by firing everyone in one fell swoop, showing a drastic misreading of the situation that caused irreparable damage to their image. In the drive to expand, the company sadly neglected to properly value the people who helped make it great, and they continue to pay a heavy PR price.

3. Be realistic.

After receiving huge valuations, it’s understandable that many of these companies have gotten carried away with their optimism. The temptation to spend like you’re already one of the big boys can take you down if you’re not quite at that level yet. Growing realistically and incrementally gives you and your organization the strong foundation necessary to avoid toppling over as you grow. Patience is a virtue, and a lack of it can bring you to the end.

Fuhu was a fast-growing children’s tech outfit which successfully made the leap from software to hardware but went off running a bit too far when their revenue projections outstripped their accounting department’s more realistic estimates. The pressure to meet these predictions was too strong, and new products aimed at bridging the revenue gap flopped, leaving them $100 million in debt to their supplier. After declaring bankruptcy, they were bought out by Mattel at a tiny fraction of their original valuation.

4. Honesty is paramount.

Your customers and clients are the most valuable assets of your company. If you’re not honest with them, you’ll inevitably come to regret it. Just a few years ago, the daily fantasy sports companies DraftKings and FanDuel, two competitors selling a virtually identical product, blasted sports fans with advertisements featuring people who had won huge amounts of money from their services and promising that these riches were well within reach of every user.

The fact, of course, was that a small minority of obsessed players were making the big bucks, while the casual users that the ads were aimed at ended up being taken for a ride. Not only that, but employees were using internal information about playing patterns in order to win money on the competitor’s site, showing a grievous top-down failure to police company culture. Not to mention the negative attention for their pseudo-gambling practice that drew ire from multiple state attorneys general. This fundamentally dishonest business practices gave these companies some astronomical success in the short term, but their influence and reach has dwindled today, less than three years later, to nearly nothing.

5. Get ready for serious competition.

You can have a great idea, but when you’re beginning as a startup, it might not occur to you that you’ve got enormous potential competitors in your future. As you get bigger, you must be ready to confront the entrenched interests that are already in your field. Don’t be surprised when they strike back in a big way.

This lesson was learned by Evernote, famously called “the first dead unicorn” by Business Insider. Their business software products gained them heaps of attention and venture capital, but stagnant growth meant that by the time they were on most people’s radar, their products were already being undercut by new offerings from Google, Microsoft and Apple. Even in tech, where a small organization can establish themselves among the bigger players faster than most industries, name recognition goes a long way, and now Microsoft’s OneNote and Google Docs have overtaken Evernote’s product suite and left them behind.

These companies are, of course, only a small sampling of the many highly-valued firms that have popped up in the past decade. The “unicorn” label doesn’t have to be an albatross for growing businesses to wear around their necks, but it does provide an unwelcome spotlight when they slip up. By not letting your revenue-based dreams interfere with smart business practices, you can ensure you’ll stay alive and relevant, unicorn or not.

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The 2 Proven Strategies to Grow Your Business

This post was originally featured on HuffingtonPost.com

As an entrepreneur, I’m always looking for ways to keep my business moving forward. You’ll hear all kinds of advice from those who came before you, some might have a bit of wisdom to them, some might not. For your business to be a true success, your personal attitude is paramount. The approach you take will determine whether you thrive or fail. To that point, there are two vital things you need to remember, the proven ways to help grow your business: be aggressive, and be proactive. If you follow these two guidelines, there’s no limit to where you’ll take yourself and your company.

Be Aggressive

Being aggressive means more than just throwing your weight around and being assertive. It’s about taking on every task before you with the passion and nerve you had when you first started. You’ve heard the old adage about genius being one percent inspiration and ninety nine percent perspiration? Business genius functions the same way. Hard work alone isn’t going to guarantee you success, but it’s the baseline that every successful entrepreneur has to start with.

Part of being aggressive is seeking out and adapting to every new development. Whatever your line of business is, there are going to be changes in the industry and if you’re able to adapt to them, you’ll be rewarded. In the real estate business, I’ve been a proponent of integrating solar technology in building projects and the growth in that sector makes me glad that I did. Staying aware of potential new progressions means you’ll always be ahead of the competition.

A great reason to be aggressive is that there’s so much information out there, you’re missing out if you’re not diving headfirst into it. Knowing what’s relevant is the key task, and once you’ve got a hold on that, you’re ready. Never forget that learning is a lifelong process. As Henry Ford, not a stranger to success in business, once said: “Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.” Staying young means always growing, and learning is a key component of keeping that process moving.

My use of the word “aggressive” might be a little off-putting to some, but hear me out. Naturally, you may be concerned about stepping on toes, especially if your business relies on your public perception. But this might not necessarily be the case if you make aggression a key aspect of your strategy. In their book Aggression and Adaptive Functioning: the Bright Side to Bad Behavior, Professors Patricia Hawley and Brian Vaughn write about their research into the study of aggression. What they found was, contrary to popular belief, aggressive behavior is often seen as positive by peers, and improves rather than damages your image. If you’re worried about your image, aggression is an asset, not a liability.

Be Proactive

My second proven strategy is the counterpart to aggression. Harnessing that aggressive energy in a productive way means taking control of your destiny. Being proactive, in a business context, means keeping in control of what’s happening to you and your company. Aggression will drive you forward, but proactivity will keep you focused. Wrangling these two complementary strategies has proven reliable in growing my business, and will work for yours, too.

A proactive company is one that prioritizes strategic planning. This will include setting objectives for yourself and your team, making long-term decisions, and honestly evaluating your strengths and weaknesses. To keep this a regular part of your schedule ensures your business is poised to attack the upcoming year. It’ll also keep everyone on the same page, so you can solve problems collectively. As Warren Buffet said: “Risk comes from not knowing what you’re doing.” You’ll reduce risk by having a clear plan of what you and the rest of your company need to accomplish.

Your strategic planning will need to accommodate future obstacles. While they’re unpredictable by nature, part of being proactive is doing your best to anticipate what’s yet to come. Look to the past, and learn from your own experiences and those of others in your industry. Of course there can be completely unforeseeable issues that you can’t plan for, but when you account for the ones you can, you’ll be able to balance your efforts and use everyone’s time efficiently.

The other side of that coin is the ability to take advantage of new opportunities. As the markets are always shifting, they can shift towards your direction if you’re tuned into new movement. As the world around you changes, don’t be afraid to stray slightly from your plan if a new stream of business looks more promising. Stay aware of things to come and you can get a head start on the competition. A proactive leader is ready to start new initiatives if they show promise.

These two strategies, when taken in tandem, will form the basis of any successful venture. There are a great deal of variables in running every kind of company, and how you react to them will determine whether your organization makes it or not. The analyses you make of your industry and your place in it are the key to continuing success. Just keep your priorities in mind, stay focused and don’t be afraid to be bold. A forward thinking approach, taken with a combination of vigor and logic, is the proven way to get ahead in any area of business and life.

It’s Not Micromanaging If You Do It Without Killing Morale

Hands-on leadership isn’t easy. But you can see your vision all the way through without discouraging your team.

This post was originally featured on Entrepreneur.com

When we use the phrase “micromanaging” we’re usually visualizing a leader who should have their eyes on the big picture, but is fussing over small details. The term carries a highly negative connotation of ineffective leadership, more concerned with obsessing restlessly over details than what’s going on in the big picture.

While this may be true in some cases, some of the most effective leaders are ones who have their fingers on the pulse of what’s happening in their work organization. That means really knowing their people and getting into the operations of the company at their essence.

Make sure you are aware of what’s happening.

While of course you have trust in your employees, as the person in charge it’s better to be plugged into what’s happening beneath you than not. This is especially the case for those at the very top, who have a lot staked in the success of the business.

If you’re not completely invested in how things work out by paying attention to what’s happening at all levels, you’re neglecting your job and putting yourself at risk, plain and simple.

Employees need to know you trust them.

Micromanaging, when done correctly, is not a matter of wielding control. Managers who lose the trust of their employees by paying close attention do so because they are communicating that they do not think the employee is capable of doing their job without someone to look over their shoulder. Worse, these employees could even interpret the attention as a feeble need to wield authority.

You are not there to nitpick.

This is why communication and demonstration of your intentions is key. If your employees understand that you’re not there to nitpick what they’re doing, but simply ensuring that things are going smoothly, you’ll be keeping tabs on things without killing morale.

Being open about your intentions for them and for the company at large will leave no doubt that what you’re after is growth, not a nitpicking of their behavior.

Benefits of micromanaging.

The benefits of a smart micromanaging approach are many. Keeping your hand on the pulse of your business means that you can count on the necessary work getting done while your workers won’t feel you breathing down their necks. When the time comes to try new ventures, you’ll have a picture of where things will fit into your employees’ existing workload.

Your face around the office will be a constant reminder that no matter how high up the ladder you might be, you’re keenly aware of the company’s comings and goings. This means knowing the work to be done and how it’s happening, not whether every employee is using the right amount of paper clips.

Time management.

Task-management software is a great asset to this end. By assigning and completing work using these tools, you can be kept aware that things are progressing smoothly without having to check in on each employee several times a day.

This less-intrusive method has quickly become an essential tool for managing a team, and is something you should be checking multiple times a day as the person in charge.

Every organization needs to communicate to their employees the importance of a common goal. It’s the only way that all personnel can maximize their time and efforts towards making the company a well-run machine. When someone in a position of authority can point to every person on the team and identify exactly what they’re doing and their importance to those goals, it’s clear to all that the company is in good hands.

Only by getting into the daily nitty-gritty can you develop the operational knowledge to keep your team pointed in the right direction. If you’re the one in charge, you shouldn’t have to ask an assistant what’s going on.

Fix problems before they becomes too big.

Another way that conscientious micromanaging benefits you and your team is that with your knowledge of daily operations and results, potential problems can be taken care of before they grow into something unmanageable.

Yes, your closest advisors and lieutenants should be able to do the same thing, but your own set of eyes is most valuable since you’re the one who’s trusting their instincts, with a vision to guide the entire group. The last thing you want as a business owner is to be caught off guard. The possibility of unforeseen problems can be greatly diminished when you’re plugged into the details.

As a boss who gets into the minutiae, you’ll be better appraised of what your personnel are like than most other leaders. An understanding of every worker’s methods, habits and tendencies can be valuable knowledge for the person in charge.

For one thing, you’ll be able to assign tasks and duties to the person you feel is best suited for them. Not only that, but when you develop these relationships the team members who are on an upward tangent will make their presence clearer to you.

When openings arise, internal promotion can be a great motivating tool and will save you time and money with onboarding procedures. When you know all your employees’ strengths and weaknesses well, it’ll be an easier task to identify those best suited for a rise in the ranks and promote them accordingly.

Leave out petty business concerns.

As with every method of operating your business, there are potential pitfalls to be avoided. Besides the obvious need to not overcrowd your employees with petty concerns, there are a few other ways you can avoid being one of those leaders who gives micromanaging a bad name.

The ability to step in when a project or endeavor is going poorly is one of the great advantages of this approach. However, constantly putting yourself in front of employees when something goes bad can foster poor mental associations.

When an intervention or disciplinary action is necessary, it can sometimes best to delegate those delicate tasks. This is a matter of avoiding negative attitudes about the company as a whole, which is a quick morale killer. As the face of the company, you don’t want your workforce fearing you or thinking of you as a source of negativity.

Employees need ownership of their own work.

Another possible danger of micromanagement is a failure to give employees ownership of their work. While you are certainly the person behind the whole business, they’ll need to feel pride in their work. Being closely keyed into the company means that you’re keeping things on the right track, not that you’re giving every employee their inviolable marching orders.

The quickest way to kill motivation is to make your employees feel that they have no control in their work. Micromanage to keep tabs on the company, but don’t use it as an excuse to strip your employees of the ability to think for themselves.

You can’t delegate all tasks.

The modern entrepreneur simply cannot afford to sit in their c-suite office and delegate all tasks. In a dynamic market, a leader who fails to assess their company at every possible opportunity is one who will be rapidly left behind.

Micromanagement, far from being the scourge that it’s imagined to be, can be the difference between an aimless workforce and a focused one if done properly.

A New Yorker’s Guide to Using Solar In Your Business

The energy source no longer is the wave of the future — it’s good for commerce today.

This post was originally featured on Entrepreneur.com

With a constant increase in demand for electric power and surging oil prices, it surprises me that more business owners aren’t excited about solar energy.

Solar power offers reduced operating costs and a higher return on investment than many other energy sources. Plus, it’s largely maintenance-free, super-reliable and good for the environment. What’s not to love? If you’re planning to integrate solar energy in your business this year, make sure you’re prepared to make the switch.

Financing options.

Putting up a solar project is a long-term investment — a truth I learned during my Atelier experience. I also honestly can say it’s been 100 percent worth it. The initial expense can be relatively high, which is why leasing would have been more favorable in the past. Setup costs have gone down significantly in the past few years, however, making solar far more affordable to the average homeowner or small-business owner.

Single-family homes account for most of New York City’s solar projects. It costs $20,000 to $50,000 to install a residential system, but a combination of city and state public programs can pick up as much as half the bill. Then there’s this: Solar-powered homes reportedly have cut monthly bills by up to 85 percent, compared to previous monthly bills. If that’s not reason enough to front the startup costs, estimates reveal solar energy’s ROI beats the stock market in more 25 states, including New York.

Installation timeline.

Ideally, the entire process shouldn’t take more than eight weeks from start to finish. However, many factors at play could delay the timeline.

A few years ago, the permit-approval process alone could take up to two years. Today, there’s better coordination among government, installers, owners and utilities. New York City’s Department of Buildings now can issue permits in a matter of a few days. It’s a welcome change from the weeks (at best) that earlier applicants waited for a decision.

Signing the paperwork officially gives your installation team the go-ahead. It’s an easy step that should take 24 hours at most — if you have the capital in hand. If you need to secure an improvement loan from a bank or other lender, you’ll wait longer.

Next, your team’s engineers gather site-specific data and create a design for your system upgrade. By now, you’re firmly into week three. Simple designs might take just a week, but owners would be wise to budget roughly three weeks for complex or large solar arrays.

Once you approve the design, you’ll need to submit a permit and wait for the Department of Buildings to greenlight your application. Things move quickly after you get the thumbs-up: You’re now clear to schedule the installation and then await inspection from the utilities department — typically a week or two after installation. The utility company changes the meter, and you’re good to go.

NYC’s permitting process.

Before you install solar panels, you’ll have to go through the City of New York’s permitting process, which begins when you file a permit. You can file this request under a New Building or Alteration permit. You also have the option to file separately as an Alteration Type-2 at borough offices or The HUB itself. The Department of Buildings will inspect the premises and use that information to help make a determination about your application’s future.

Local and state incentives.

Through NY-Sun, the State of New York offers a range of incentives to build a more affordable and sustainable solar industry in New York City. The program offers loan financing for residential, small-commercial and commercial projects. The terms vary depending on the type of borrower. Residential and small-commercial customers can finance up to $25,000 with a repayment period as long as 15 years. Commercial borrowers may finance up to 100 percent of any-sized solar projects and secure an interest rate in the range of 4 percent to 6.5 percent. As an added motivation to participate, NY-Sun also extends reduced installation costs to borrowers across all three categories.

Net-energy metering.

Net energy is the difference between the energy produced and the energy consumed. Many households use less than solar panels produce. Excess energy is pushed back into the grid. The net-metering structure credits the owner for this power returned to the overall system. As an owner, you can use the offset to cover future bills, though you’ll still need to pay the monthly connection charge for the service of using the utility’s grid.

There’s no denying the decision to switch to a solar system can be tough. Even with government support, the one-time setup fee might be too steep for some. But solar undoubtedly is taking over. New York City experienced a surge in installations during 2016. That’s on top of the substantial increase over the preceding years, when residential and commercial installationsdoubled between 2014 and 2016.

The earlier you get on board with solar, the greater benefits you’ll enjoy over the long term.

 

This One Habit Makes You a Most Productive Entrepreneur

This post was originally featured on Entrepreneur.com

What I love about the real estate business is that each new property presents unique challenges to learn and grow. This is especially true in New York, where every building has its own way to inspire.

Sometimes it’s just marveling at a beautiful piece of architecture. Other times, it’s digging up the history and understanding how the builders overcame the special challenges within the building. Often it’s pragmatic — figuring out how to creatively modernize a new condominium. No matter what the situation, there’s always an opportunity to learn.

Self-education is the one habit you need to cultivate, because it drives your productivity, pushes you to new heights and lights a fire underneath your feet as you carve your own path. That commitment to continuous learning leads you to everything else.

Here are five tangible ways self-education gives you the golden ticket to success as an entrepreneur:

1. It saves you time and money.

Twenty-four hours is never enough for an entrepreneur. A commitment to self-education could potentially save you weeks of time — and your bank account.

Case in point: Alibaba founder Jack Ma rode his bike 45 minutes everyday to an American hotel just to improve his fluency in English by talking to English-speaking foreigners. Ma did this for nine years starting at the ripe old age of 12. He ended up speaking English so well, he became an English teacher at his local school in China. His eagerness for self-education is no doubt the reason Ma is now worth approximately $35.7 billion.

For the entrepreneur building the next billion-dollar app, this means gaining a basic knowledge of coding and user interface design beforestarting a project. While it may take a little time and investment up front, it will ultimately save hours and thousands of dollars because you have a basic understanding of these worlds.

The smart entrepreneur understands that his or her investment in education will reward them with both short-term and long-term benefits.

2. It builds confidence.

Being an entrepreneur is one of the most challenging jobs, especially if you want to stand out in New York. There are constant hurdles, and you’re never short of opportunities to throw in the towel. On top of that, it’s easy to fall victim to your own doubts.

Learning a new skill and using it to push through a challenge can give entrepreneurs a massive boost in confidence. It’s been shown that there is a strong link between education and confidence. It gives you the motivation you need to push through the humps that come with being an entrepreneur.

3. It opens new opportunities.

One of the projects that challenged, but inspired, me the most was installing solar panels on the Atelier Condos. It forced me to learn everything I could about solar and renewable energy. On top of that, I got involved on the design side as we went through revisions trying to perfect and refine the use of the panels to add an efficient, yet modern element to the building.

By undertaking that project and learning about the future of solar, it opened so many new doors for me personally and professionally. And though the idea-to-implementation period was longer than I would’ve liked, it is by far one of the most rewarding projects I’ve tackled. In fact, I’m planning to install solar panels in other River 2 River properties.

I’m now able to talk fluently about solar technology and renewables, which has afforded me the opportunity to speak and write about sustainability and the non-profit space.

As an entrepreneur, you simply cannot predict what new business and personal opportunities you could unleash by learning something outside your comfort zone. Through it all, Atelier stands as a beautiful step forward for integrating alternative energy and modern aesthetics in New York City.

4. You’ll be sharper and happier.

I love real estate, particularly New York real estate, because it changes so fast. I have to stay abreast of current events, market shifts, etc., because the environment, neighborhoods and tastes of my clients evolve constantly. If I stop learning or if I stop reading, my business will suffer because there are people out there waiting to “eat my lunch.” I’m telling you, NYC real estate is not for the faint of heart.

Investing in your self-education keeps your skills, your brain and your outlook sharp so you have the ability to adapt. And the bonus is that constant learning also makes you a happier human being. Even amoebas get bored and unhappy when they keep getting hit with the same stimuli over and over again.

Not to mention, keeping your skills sharp will ward off things like Alzheimer’s. In other words, an active brain makes for a happier brain.

5. Your gray matter makes you better at business.

There is something to the old saying that “variety is the spice of life.” Entrepreneurship can be a grind. It’s easy to lose yourself in the constant responsibility and busywork. That’s when you start to get complacent. You develop blind spots and become vulnerable to your competition.

That’s why self-education is so important. Discovering new ideas that are unrelated to your business can release your creativity and give you perspective on your business that you would otherwise miss. Trust me, this can be the difference between life and death for your passion project.