The Brand New iContact.com – Oh My How Design Standards Have Changed!

In late 2002 I met my business partner Aaron Houghton at the October meeting of the Carolina Entrepreneurship Club on the UNC campus over Chic-Fil-A nuggets. At the time, Aaron ran Preation and I ran Virante. We partnered to launch IntelliContact Pro, which became IntelliContact in 2005 and then just iContact in 2007.

Today, iContact is a 205 employee company here in Durham, NC with 64,000 customers and 700,000 users. Our marketing and IT teams launched a brand new web site today on icontact.com. As a former web site designer myself, it’s been fascinating to see the site evolve as design standards have changed.

Let’s take a trip down memory lane to show how the web site has evolved over time…

Which one was the worst? Which one was the best? What do you think of the new site?

2002

2003

2004

2005

2006 2007 2008 2009 2010 http://img692.imageshack.us/img692/4256/125j.png

Raj Sisodia on Conscious Capitalism (Awesome)

Session 10, Raj Sisodia on Conscious Capitalism
EO/MIT Entrepreneurial Masters Program
Year Two, June 19, 2010

I am getting so much value from this session by Raj Sisodia on Conscious Capitalism. Wow this was awesome!

I’ve tried to go to school on this in the last year, working to redefine the iContact Culture, roll-out new company values (WOWME), launch a formal CSR program (4-1s), and work on becoming a B Corp.

Raj an annual conference on Conscious Capitalism called the International Research Conference on Concious Capitalism. The next one is coming up May 24-25, 2010. This is focused more on thought leadership than the C3- Catalyzing Conscious Capitalism in Lake Arrowhead October 19-22, 2010.

Here are my notes from the session…

Raj’s book is Firms of Endearment: How World-Class Companies Profit from Passion and Purpose with co-authors Jag Sheth and David Wolfe. I just ordered 8 copies for my senior team to read in July.

Double Bottom Line Means a Bigger Bottom Line

He has data showing companies get a better financial bottom line when you focus on getting a double bottom line (social and financial) and create an awesomely engaging work environment. Companies with humanistic profiles are outperforming the S&P by 9 to 1 over 10 years.

Example companies from the data set are: Google, Southwest, WholeFoods, Costco, CommerceBank, Amazon, Ebay, Johnson and Johnson, Timberland, UPS, Carmax, JetBlue, HarleyDavidson, CAT, Honda, Starbucks, Toyota, BMW

Good to Great companies that have suffered:

• Circuit City
• Fannie Mae (got involved in mortgage crisis)
• Phillip-Morris (this year 6 million people will die directly from tobacco and this is growing)

He says don’t define greatness only by financial performance, but by the net impact of the business on the world.

“The majority of the public believe that executives are bent on destroying the environment, cooking the books and lining their own pockets.” New York Times

There’s a collective price we pay for the cynicism and mistrust of business.

“The dogmas of the quiet past are inadequate to the stormy preset.” – Abraham Lincoln

The Case of Whole Foods

100 years ago: 16% on food and 8% on healthcare
Today: 8% on food and 18% on healthcare

Whole Foods have 1800% return to investors in 10 year period.

John Mackey, the CEO of Whole Foods, took salary down to $1 in 2006 and decided to donate future options to foundation. Signed letter ‘Much Love. Here’s the actual letter.

John Mackey wanted to build a business based on love not fear.

No one at Whole Foods gets paid more than 19x the average employee (average $40,000 highest $750,000). Typical ratio at publicly traded company in 500 to 1.

Make your employees live for the work week not just for the weekends.

You are most alive when you are in a state of flow. Create a work environment where the team can enter a state of flow.

Link your personal passion and your corporate purpose.

Get rid of people who infect an atmosphere with negativity.

At end of training at Zappos, they offer employees $2000 to quit if they don’t want to be there.

Business is more and more about caring. If you don’t care you won’t be in business.

Book Recommendations

• The Future of Management by Gary Hamel.
• Peak: How Great Companies Get Their Mojo by Chip Conley
• Delivering Happiness by Tony Hsieh
• Thank God’s It’s Monday by Roxeanne Emmerich
• It’s Not What You Sell, It’s What You Stand For, Why Every Extraordinary Business is Driven By Purpose by Roy Spence
• The Dream Manager by Matthew Kelly  (class recommendation)
• Man’s Search for Meaning by Viktor E. Frankl
• The Theory of Moral Sentiments by Adam Smith

What is a Great Business?

A great business maximizes “total value created” on a sustained basis and distributes that value in an equitable and enlightened manner among all its stakeholders.

Be  a company that is on the right side of society, that is good for the world.

Businesses create or and destroy many kinds of wealth.

• Financial
• Intellectual
• Social
• Emotional
• Spiritual
• Cultural
• Natural

What is Concious Capitalism?

It’s about a higher purpose (not just profits), stakeholder orientation (not just shareholders), conscious leadership (not command-and-control), and conscious culture (you can feel it/see it).

Be about mission and values and purpose. Why? Employee engagement.

Concious Capitalism is: relationship-driven, holistic, characterized by compassion, empathy, love, authenticity, and transparency, and reflective of more feminine energies and competencies.

Women are often better leaders. See this Atlantic piece on The End of Men.

From the Book ‘It’s Not What You Sell, It’s What You Stand For’ by Roy Spence

• Purpose is a definitive statement about the difference you’re trying to make in the world.
• It drives everything you do
• It matters to all stakeholders
• It is your reason for being that goes beyond making money
• Yet… it almost always results in making more money than you ever thought possible

Examples of Companies with Purpose

• Johnson & Johnson – Alleviate pain and suffering
• Southwest Airlines – Give people freedom to fly
• Whole Foods – Make people, the food system, and the planet more healthy
• Google – Organize the world’s information and make it accessible
• REI – Reconnect people with nature (kids spend 55 hrs per week in front of a screen and 1 hour per week out in nature)

Four Company Purpose Archetypes

• The Good – Service to other ethical evolved
• The True – Based on science, analytics
• The Beautiful – Excellence and perfection, aesthetics, delight
• The Heroic – Changing and improving the world

The Purpose Motive: Compensated engagement is going down, uncompensated effort going up, volunteer work is nourishing people in a way that paid work simply is not. Need to shift the focus from profit maximization to purpose maximization.

Be about doing something meaningful in the world.

The Search for Meaning

From ‘Man’s Search for Meaning’ by Viktor E. Frankl

“Happiness is the outcome of living a life that has meaning and purpose.

“Happiness cannot be pursued; it ensues from living a life of meaning and purpose.” – Viktor E. Frankl

Meaning comes from:

1. Doing work that matters
2. Selfless love
3. Finding meaning in suffering

The formula: Despair = Suffering – Meaning

Conscious Leaders

• “Leading by intimidation, by rank, or even by charisma alone is insufficiency because those who are supposed to follow are becoming self actualized and they won’t accept this outmoded style of leadership any more.
• The more self-actualized people become, the more we’ll need seal-realized leaders who demonstrate mastery at serving some higher purpose and choose the right action.

To Build a Conscious Culture

Make it tactile (visible and touchable). Transparency, authenticity, caring, trust, integrity, learning, empowerment.

Paraphrasing a video from Gary Hamel shown by Raj: The management model from the industrial age is outdated. Create an environment the preserves passion. This will drive value creation in the creative economy. The question is how to reinvent management to enable team members to bring passion to work. Create companies where employees can bring all of themselves to work. Build companies that are fit for human beings.

“You can’t command imagination, creativity, or passion!” – Gary Hamel

Stakeholder Acronym: SPICEE = Society, Partners, Investors, Customers, Employees, Environment

In our world, we are all in the same boat.

In the future, you will have to operate with all stakeholders in mind to be successful.

A Historical Look

1776 – Same year Wealth of Nations and Declaration of Independence published. For the first time in human history man was in charge of their own destiny within a world of law. Age of Empowerment.

1850 – Age of Industrialization

1900 – Technology breakthroughs. Einstein, electricity, Marconi, telephone, radio, television. The birth of modern marketing. Age of Knowledge.

1989 – Berlin Wall collapses, Tienanmen square, Exxon-Valdez spill, Fatwah against Salman Rusdie. Fukayama’s essay “The End of History” The debate was what type of free market, what type of democracy. A new cultural age has emerged in which the consuming focus on materialistic gain that marked the Age of Knowledge is ebbing. Now we are in the Age of Transcendence.

The Zeitgest is Shifting

The zeitgeist is shifting from the strong self-indulgent me orientation of the 20th century society toward a stronger sense of interdependence with others.

In USA, there are now more adults over 40 than under 40. The Internet was invested by Tim Berners-Lee in 1990, which has shifted balance of power and making the world more transparent.

We are moving up Maslow’s hierarchy from survival, to success, to meaning.

Why New Balance is growing faster than Nike. Nike appeals to self-centered masculine-dominated youth. New Balance appeals to self-actualized older more feminine oriented individuals.

Human beings are not a resource. Coal is a resource. Turned on, a human being is like the sun. A source of regenerating energy.

“I would not give a fig for simplicity on this side of complexity, but I would give my life for the simplicity on the other side of complexity.” – Oliver Wendell Holmes, Jr. US Supreme Court Justice.

Humanity is one spirit. Natural resources are finite. Our inner resources are infinite.

Brette Simon on Legal Issues for VC Backed Firms

Session 5, Brette Simon on Legal Issues for VC Backed Firms
EO/MIT Entrepreneurial Masters Program
Year Two, June 18, 2010

Brette Simon of Jones Day is talking about legal issues for VC backed firms. She did a great job and this was a really good refresher. Here are my notes from the session…

Part I – Dos and Don’t for VC Backed Companies
(or Companies that want to be Venture Backed)

Not having these things buttoned up can cause investors to not want to invest or provide lower valuations.

1. Shareholder Agreement – Have a shareholders agreement (buy/sell agreement)
2. Corporate Records - Maintain corporate records (make sure you keep Board meeting records, Board approvals, a copy of stock certificates)
3. Board Minutes - If you hold a Board meeting, take minutes, put the minutes in the record book
4. Shareholder Loans - If you loan money to shareholders, paper them (interest rate, amount, maturity date)
5. Buy-back rights - Make sure the company has the right to buy back options or restricted stock if they leave the company (repurchase right).
6. Series of Shares - Minimize the number of series of shares (Series A-H might scare investors)
7. Types of Options – There are Incentive Stock Options and Non-Qualified Stock Options. Each has different tax treatment.
8. Phantom Stock – Consider using Phantom Stock – gives economic value without giving away voting rights (no exercise price and can be better than options as easier to exercise prior to liquidity event)
9. Intellectual Property Protection – use proprietary information and assignment of inventions agreement to ensure the company owns everything employees created. Without it being signed, original investor can come back and claim right to royalties to assets of the company. Have each employee sign when they start.
10. Personal Expenses - Do not run your personal expenses through the business. It’s not good for investors to see. You don’t want things coming out of due diligence that don’t look right. Can allow the IRS or a creditor to pierce the corporate veil and go after shareholders individually if you co-mingle personal and business because you didn’t honor and respect the corporate entity. Travel & Entertainment line item is getting attention from IRS right now.
11. Staff Classifications – Proper classification of overtime and 1099 contractors vs. employees. If you’re controlling what time folks show up and they’re working 40 hrs/week, likely need to be treated as employees.
12. Employee Handbook - Have an employee manual and handbook that sets forth the rules and regulations and protocols, and have it signed by each employee. Have each new hire verify in writing they have not taken any IP from their former employer.
13. Termination Release – When employees leave/quit/are fired have them sign a release. You have to give consideration for the release (some severance).
14. Employment Contracts – Avoid long term employment contracts (use at-will employment letter)
15. Insurance – Get EPLI insurance (employment practice liability insurance), difference from Errors and Omissions (E&O) and Director & Officers (D&O) insurance. EPLI protects against sexual harassment claims and wrongful termination.
16. Long-Term Contracts - avoid long term contracts without ability to terminate relatively quickly. Negotiate in 60 day termination clauses into 12 month contracts.
17. Rights of First Refusal (ROFR) - Make sure people don’t have the right of first refusal to buy your company as this can block the sale of a business even if they are minority.
18. Integration & Merger Clause – make sure in all your agreements. Says anything we talked about before this final agreement (oral agreements, etc.) is gone and all that matters is what is in this document.
19. Attorney Fees – In contracts have attorney fee provision that says loser pays attorney fees in any litigation.
20. Arbitration vs. Litigation - Benefit of arbitration is all private. Everything in a court is public. Litigation is more expensive. Arbitrators tend to split the baby and meet in the middle. ‘Mediation’ can be good to put in document prior to binding arbitration, which is non-binding and less expensive.
21. Financial Reporting Systems – critical for investors. A good controller or CFOs is worth their weight in gold. Investors what to know revenue and profit data broken out as much as possible (by product, region, SKU, etc.). You need to close your books once per year and give monthly data. Clean up your old bad receivables.
22. Audits – Investors preferred audited financials once the company reaches any scale (>$1M/yr in revenue). Can cost around $15k-$30k. If you don’t have audited financials, need really solid CFO. Without these investors will look for things that are wrong and give a haircut to the price. Minimize reasons investors can haircut valuation.
23. SAS 115 letter – Make sure the auditor gives you this after audit if you do one to tell you about your financial controls (aka management letter)
24. Management Team & Succession Planning – The company needs to be able to succeed without you. Make yourself irrelevant over time. Don’t have ‘founderitis’ where it is all you that has the operational control or critical sales relationships. Try leaving for 3 weeks and see what happens.
25. Customer Concentration – Make sure your largest customer is no more than 20% of your total revenue to reduce investor concern. Particularly of concern to a financial buyer who raises debt to buy your business. They lever the acquisition using debt capital. Not as concerned to a strategic buyer.

Part II – Raising Capital

1. Friends and family round – often sell common stock to instead of preferred stock. Likely the only money you can get pre-prototype when you’re just getting started. If you can self-finance through this stage, do it.
2. Angel/seed round – Between $25k and $500k. Invest at early stage.
3. VCs – Invest sometimes pre-revenue but usually when firm is generating $500k-$50M of annual revenue.
4. Private Equity – Investing in companies at a later stage when they have positive EBITDA. Looking for $2M+ annual EBITDA. PE firms use debt. In an Leveraged Buy Out (LBO), put in as little equity as possible and as much debt as possible.
5. Types of stock – Common stock and preferred stock. Investors get preferred stock usually.

Key VC Terms

Work to get multiple term sheets at the same time so you have much more leverage in the negotiation. Run a disciplined process with a target timeline for each stage and give investors who express interest a target date for receiving term sheets so you get them close to the same time (same day ideally and definitely same week) and can negotiate.

1. Participating preferred – Double-dipping for investors and very anti-entrepreneur. Investors get all their money back first then participate equally in the upside. Avoid in term sheets if possible and look for ’straight preferred’ (aka ‘vanilla preferred’). If you have to do participating preferred, say OK but cap it at 3x or 4x return and leave the rest to the common.
2. Liquidation preferences – Also avoid liquidation preferences above 1x.
3. Dividends – Sometimes there are dividends (~8%) in preferred stock that compound and accrue. Avoid this if possible.
4. Anti-dilution protection – Comes into play when in a down round. Better to have a weighted average than a full-ratchet anti-dilution protection. Full-ratchet would give investor shares at the new lower price instead of something in the middle. Broadbased weighted average better than the narrow base for the entrepreneur.
5. Mandatory Redemption – Forces company to buy-out investors shares at some point in the future.
6. Right of First Refusal – If you are trying to sell your shares to someone else, the investor has the first right to buy those shares.
7. Right of First Offer – If you issue new shares in a future round, the original investor has the right to buy in pro-rata to maintain their ownership percentage. You can put in a play-to-play position to flip on head and require investor to invest pro-rate or they may lose rights (like convert their shares to common).
8. Investor Rights Agreement - Says that investors can force an IPO
9. Board Composition - Usually investors will have seat on Board. Initially shoot for 3 person board with 2 internally members (founders or CEO/CFO) and investor. If have to go to 5 person board with 2 internal, 2 investors, and 1 independent nominated by common shareholders.
10. Drag Along Rights – Helps investors get out if they are the majority shareholder. Investors have an end-game. In 3-5 years they usually want to be out. This is a right that enables majority shareholder to force minority shareholder to allow the sale of the company.
11. Reverse Vesting – Investors can unvest shares you already own and force you to vest shares over additional years. A customary term, be aware of it.

Stages of raising capital (4-6 months)

Adding this in from my own experience. Brette only mentioned this timeline lightly. This is for running a competitive process and getting multiple term sheets, which is ideal but not always possible.

1. Decide whether to hire an investment banker or not to help raise the funds (usually costs 4-5% of the funds raised). Usually best to do yourself if early stage. Investors prefer non-ibanked deals. Investment banks can help a lot if later stage (post $25M in annual revenue) or if raising large round of more than $20M.
2. Create executive summary (3-4 pages) and teaser deck (~25 slides)
3. Determine firms who would be good investors
4. Reach outs with teaser/exec summary
5. Schedule calls with investors who are interested
6. Schedule meetings (at their office usually or on-site at your office for later stage firms)
7. Ask for indications of interest
8. Execute NDAs/Confidentiality Agreements if later stage. Make sure you can assign/transfer NDAs to any buyer of your business. Early stage investors often won’t sign NDAs.
9. Allow access to data room of initial diligence materials if there is one
10. Set date target for receiving term sheets with interested parties
11. Receive term sheets. Get them to be as detailed as possible.
12. Negotiate term sheets
13. Sign term sheet with investor you select, go exclusive with them
14. Complete final diligence items (30-45 days ideally)
15. Sign final documents
16. Get funds wired

Recommendation reading on investing is book Growth Company Guide 4.0 by Clinton Richardson. Remember the specific person who will be joining your board is just as important as the firm itself.

M&A

If you’re considering selling the company, recommended to hire an investment banker to help you focus on running the business and making sure the results come in. They know what market terms on. They do it for a living. They help create an auction process. You’ll usually pay between 2%-5% of the sale price to the banker. Get a lawyer involved to help.

Questions?

• Restricted Stock Units (RSUs) vs. Options
• 83(b) elections
• When you exercise Incentive Stock Options (ISOs), when do you pay cap gains and when do you pay ordinary income tax?
• When is Alternative Minimum Tax (AMT) triggered?

Don Hutson on High Performance Selling

Session 2, Don Hutson, High Performance Selling
EO/MIT Entrepreneurial Masters Program
Year Two, June 17, 2010

Don Hutson is now talking about how to increase performance in a sales organization. Here are the notes…

The Evolution of the Process Selling Over Time

1. The Product Pitch (Snake Oil in the 18 Century)
   not recommended, for historical perspective only
2. The Hard Sell (1960s)
   Doesn’t work today. Today selling relationships have to be built on trust. Not recommended, for historical perspective only
3. Relationship Selling (1970s)
   A high level of trust is enjoyed by both partners
   Relationship stress is kept at a minimum
   Strive to sell the customer as they like to be sold
4. Needs Analysis Selling (1980s)
   Listen before you talk. Never give a sales presentation before doing a needs analysis assessment. Information gathering is the cornerstone. Customer’s agenda is ever present. Constant monitoring for pertinent changes.
5. Symbiotic Selling (Created by Don)
   Importance is attached to the relationship. Client and salesperson are both energized to work together by common goals. Unique benefits are enjoyed by both.

Don’t be devoid of integrity. No one buys more than one time from a snake oil salesman. Don’t ask people to buy until there is trust.

Trust Based Selling

Don’t ask people to buy until there is trust. Speed up trust with referrals from existing customers and trust symbols. Make trust high and stress low to drive conversion up and sales cycle down.

Great sales professionals believe in themselves and their product. Few things are more contagious than an enthusiastic personality.

“The most remarkable discovery of our time is that we can alter our results by altering out attitude of mind.” Dr James Allen

Attitude in Sales

Attitude definition: The demeanor and spirit we choose to adopt and display from a given stimulus. Most people are just about as happy as they decide to be. Great sales people get over rejection quickly and are resilient. The attitude is the key.

If you’re doing great, notify your face. Smile on the outside. This displays confidence, optimism, and pleasant demeanor.

Motivation in Sales & Fire in the Belly

Motivation definition: “The pull of anticipation and the push of discipline.” Henry David Thoreau

All other things being equal, make more calls. If you have a sales person whose having a slump, their call count is likely deficient. And when the call happens, don’t throw up product info on the customer, do a needs analysis!

Motivation is also known as fire in the belly. Fire in the belly is “Passion for Results.” Therefore motivation is “passion for results.”

Current & Future Self-Image

The source of fire in the belly is the deviation between present and projected self-images. We are inspired when we see people with goals (who have a deviation between their projected self-image and the current self-image).

Narrow the gap between your team’s actual performance and potential performance by enabling them to improve their projected self-image and understand what it will take to get there. Most people haven’t scratched the surface of their own potential.

Ask for the MAB (minimum acceptable bottom) for sales unit expectations instead of what reps are hoping for. Get them to commit to themselves their own MAB each month.

The greatest salespeople today are analytical.

Great sales people ask great questions, are great listeners, and they learn from what they hear.

Coaching is “getting your people to develop the habit of doing the things which must be done to Succeed.”

Behavioral Interviewing

“The best recruiters and interviews are those who utilize a structured interviewing process in which they ask questions, the answers to which reveal some predictability about the applicant’s probability of success.”
- Dr Paul Green, Industrial Psychologist

Enhancing Customer Loyalty

“Helping a customer should always take priority over any other task!” Shep Hyken

Four ways to increase business:

1. Increase customer count
2. Increase average sale
3. Improve customer retention
4. Increase customer quality

It is six times more expensive to get a new customer than to keep an existing one.

The Loyalty Ladder (more loyal as goes down)

1. Suspects
2. Prospects
3. Customers (anyone whose purchased anything from you one time)
4. Clients (people that used to be just customers who buy from you multiple times and see your salespeople as a resource who provides solutions)
5. Advocates (people who used to be clients that  refer you to others unsolicited)
6. Confidants (people who buy from your company you know something personally about where trust is maximized. Can’t do for all but can do for 5-10)

The job of the sales person is to move individuals through this process and go from suspects to customers to client to advocate.

High performance sales people have an innate ability to compress more achievement in the same amount of time—because they have the ability to develop relationships better than low performance sales people. These high performance sales reps spend most of their time in relations with confidants, advocates, and clients–where the ROI of time invested in communicating with people is much higher.

Never ever violate the rules of integrity to move suspects into confidants.

Market share must be preceded by mindshare. It’s OK to over communicate but not OK to under communicate.

Four Step Formula for Success With the Loyalty Ladder

1. Make a List of 100 leads
2. Categorize each entry by labeling each
3. Place an asterisk next to each name that represents the greatest potential
4. Move asterisked entry to the next level on the loyalty ladder (by asking the right questions, building trust)

Needs-Analysis Selling

“Prescription before diagnosis is malpractice!” – Jim Cathcart

Personally perform period miracles for your customers. Make your customers say Wow!

You only need a good heart and a keen eye to perform customer service miracles. A miracle is anything that gets a customer to say wow.

Find congruent goals (overlapping needs).

Need analysis is an information gathering process. You use it every time you talk to the customer as needs change.

Needs analysis gives your prospects some authorship over what you ultimately present to them. Authorship is when you give another person the respectful right to be heard. Their opportunity to influence outcomes will greatly enhance their buy-in and eagerness to gain the desired results. Give your prospects a presentation in which your prospect helped design.

How to do a needs analysis with a prospect or customer

1. Be sure to talk to the key decision influencers as well as the key decision makers (they often have veto power)
2. Be consciousness in your approach
3. Impress them with the quality of your questions
4. Always take notes (and store them)
5. Ask probing questions
6. Clarify all substantive points; related not only to their needs but to their goals and objectives
7. Seek clear understanding

Great sales people are great at needs analysis.

Sales Negotiations

A negotiation is the (often ongoing) process through which two or more parties who positions are not consistent work in an effort to reach an agreement. – From The One Minute Negotiator

“Negotiaphobia is a fear of negotiating based on limited experience, discomfort with uncertainty and a lack of skill.”

Many people see negotiations as combat or conflict and they would rather just go along and get along.

Only ‘meet in the middle’ when it’s late in the negotiation and the spread is narrow and when you can tie it to a resolution to get the deal done.

Collaboration is the best type of negotiation as it is most conducive to the ongoing relationship and allows you to cook a better pie.

Going to Market

Make gathering competitive intelligence a constant project. Identify what competitors are doing that is giving them an edge. Differentiate value through the eyes of your customer. To sell value, make discovery a core competency personally and organizationally. Anytime someone wants to talk price, talk value.

Train your sales people to be value builders not price cutters.

Commodity – products w/o discernible difference that are available from multiple outlets.

7 Types of Differentiation

1. Product
2. Experiential
3. Relationship
4. Process (how you do what you do)
5. Technological
6. Marketing
7. Price (go last if you go there at all, unless you’re focused on volume)

Your value proposition is the complete, compelling value your offering is perceived as having to a prospective buyer.

Random Q&A:

It is best to have a compensation structure that has a mix between base salary and variable comp.

A draw on commission (paid in advance) is better than straight commission for the first year.

Presenter Bio
Don Hutson´s careers in speaking, management and sales have brought him many honors. He successfully worked his way through the University of Memphis, graduating with a degree in Sales. After becoming the #1 salesperson in a national training organization, he established his own training firm and shortly thereafter was in demand as a professional speaker.

Don has addressed over two-thirds of the Fortune 500 Companies and is featured in over 80 training films. Today he is Chairman & CEO of U.S. Learning, Inc. [Full Bio]

Dr. Gerry Bell on Leadership, Listening, Happiness and Peak Performance

Session 1, Dr. Gerry Bell
EO/MIT Entrepreneurial Masters Program
Year Two, June 17, 2010

I’m in Boston for a few days attending year two of the EO/MIT Entrepreneur Masters Program. Our first presenter this morning is Dr. Gerry Bell of my hometown Chapel Hill, NC from the Bell Leadership Institute. Here are the notes from the session.

The 6 Laws of listening:

1. You can’t listen and work at the same time.
2. You can’t listen and think at the same time.
3. There is no such thing as multitasking.
4. Everyone knows exactly when you stopped listening.
5. You can’t fake listening. You can’t pretend to listen. You can’t fool people.
6. People only tell you the truth when they think you’re capable of hearing it.

You can’t afford to live your life on the surface. Listen and you will go deeper.

When you’re listening, ask questions to clarify what people are saying and elicit additional information.

If you find you’re uninterested and eyes are glazing over, ask a clarifying question.

A good tool to get people to open up a bit is to say, “Can you tell me more about that?”

There’s a thousand pieces to the puzzle of most meaningful conversations. A lot of times the real meaning to why someone is saying what they are to you cannot be determined in level I.

Class comment: Active listening is foreplay for a woman.

Playback what people are saying to you when talking about deep or important issues.

Never say, “well I disagree with you.”It just throws down the gauntlet and won’t lead to positive results. (’Yes and’ them instead of ‘No, but’ them)

Listening is the essential skill to build an understanding of people.

You can learn to listen better.

Living With Authenticity

There is no other way to live than living with authenticity.

You live longer when you’re authentic and you’re profoundly happier.

We experience stress when we behave differently than we are.

People say “I’m going to start being myself when this happens.” Don’t miss life while you’re living it.

As yourself if you’re going to listen to this person, or not. Make a black or white decision. Don’t half listen. Either 100% listen or delay the conversation.

Say, “I’d love to see you, I’ve got a deadline. Let’s discuss this at XX time.” Be pleasant, look at them, smile, and move on and then come back to it when you can focus.

Whenever you go to talk to someone, ask them if this is a good time.

Live authentic, open, and clear.

Emails/texts should only be used for surface level communications (level 1). The more personal it is, the more important it is to talk in person or at least by phone.

You have to guard your time as much as your money.

Skills Needed to Make Money

• Technical Skills/Specialty Skills
• Commitment: Ability to commit yourself with deep 100% focus on what you’re doing
• Interpersonal & Leadership Skills

Commitment is built by loving the work you do and being able to enter flow. The worst thing that could happen to you is to wake up and not love going to work. Make sure you’re doing things you love to do for your profession. Make sure you wake up and are so excited you can’t stand it.

Your personality dictates how you lead. You better be great in people skills to build a successful organization. Invest in yourself to build yourself. The smartest decision in someone’s life is to build themselves. Work on your people skills before you have kids as your kids will inherit your personality weaknesses. Your childrens life will be better if you invest in yourself. Your business will do better if people like you. People do business with people they like.

Warren Buffet has made $50B and his conclusion was ‘invest in yourself.’ He said ‘take communication courses.’

The best leaders are outstanding with people. The worst leaders are not good with people.

Living a Great Life

Boredom will make you crazy. You should never never never never retire. If you retire to go play you are likely to have the most unhappy period of your life. A lot of people sell their business to recover their happiness. Don’t do that, change your business. To have a great life you have to be exhilarated about getting up.

You have to create your life so every day you wake up you love life. Don’t ‘make a lot of money so that you can have your life back later.’ You can actually make more money by focusing on doing what you love to do, because you’ll be passionate about it.

Dr. Bell studies peak performance in a complex life. It is possible and is looking at examples of how to do it to stay at prime.

Don’t overwork as then you’ll burn out and want to quit.

Peak Performance

When were you most engaged? What caused this?

When were you least engaged? What caused this?

You cannot produce better than when you are in prime. Performance comes on a bell curve. You are best at 100mph, not 200mph.

You have a significant increase of illness when you work too hard. Hiatal hernia, heart disease. You have significant increase of destroying your relationships with spouse, kids, parents. You become flat and you dislike what you do. You’re unhappy. The happiest time is when you’re at prime. You can’t have more fun and have a greater impact on humanity when you’re at prime.

If you’re going 115mph you become grumpy, irritable, impatient, and don’t sleep well. You die early.

It’s hard to contribute to humankind if you’re dead.

If you love it, working long hours is not bad. If you don’t love it and your strained, it is bad.

Don’t work like a dog until you’re 50 and then wake up and have no health, no spouse, no family.

Every day you wake up your goal should be to have the best day you’ve ever lived.

Do great work every day.

We’re in the 21st century of understanding science and in the 1st century of understanding people. The secret to make the world a better place is to have great leaders who build businesses who provide jobs who are worthy of human life and someone can go home and buy food for their children, and have shelter, and educate them.

When you go through the slums of Sao Paolo or Somalia, the only solution will be if people who are entrepreneurs build businesses so people can have jobs.

Great leaders build great companies. Average leaders build average companies. Poor leaders destroy companies.

The 7 Causes of Happiness or Unhappiness

1. Yourself
   Do you like yourself or not? You have to like yourself to be happy. If you don’t like yourself, money is irrelevant. Invest in yourself and helping your children become effective, achieving, happy people.
2. Loving Relationships
   You don’t have to be married, but you have to have the ability to love. If you can’t love you’re missing one of the joys of life. This is a genetic need of human species.
3. Health
   The biggest single mistake people make is to throw away their health and abuse themselves. Be as good at mastering your health as your business. You can’t make the world a better place if you’re not here. The average human body is designed to live to 100. 70% of life expectancy is lifestyle, not genetics. Do you love being alive? If you do, you should set a goal to be alive as long as you can. Don’t throw away your health and then at 60 try to start over. Set a goal to live to 100. Do you want to see your grandkids? We are thoroughbreds in the Kentucky Derby and we need to train to be able to perform.
4. Work
   Can be the greatest joy or greatest pain. Make sure you’re working on what you love doing.
5. Money
   It’s not how much you have, it’s how you see it. Do not make your childrens’ lives easy with your money. Rather teach them skills to solve their own problems. Make sure your child has a job by age 11. Work ethic is ingrained by age 12. We got to be successful because we learned to work early.
6. Spirituality and Community
   Feeling of giving back and contributing to the world. When you leave the world leaving it better off than when you.
7. Fun
   You should have as much fun as humanly possible without destroying your work, family, marriage. You normally drink as much as you don’t like yourself. Drinking dulls your senses.

Develop Your Six Core Compentencies on Being a Great Leader

1. The Entrepreneur
   Initiator, developer, seeks and finds opportunities, seeks success and achievements, positive can-do attitude, high goal setter
2. The Competitor
   Assertive, honest, faces problems squarely, raises the bar, rises to the challenge, makes the tough decisions well
3. The Producer
   Focus on getting things done, organized, takes leadership, does it now and gets it done, a finisher, streamlines work, maintains focus and priorities, highly disciplined
4. The Stabilizer
   Recovers quickly from mistakes and failures, has confidence, cool under pressure, calm, balances priorities and time, paces self, careful
5. The Team Builder
   Good listener, giving, supportive, builds teamwork, gives love and affective easily, mixes easily with others
6. The Creator
   Innovative, flexible, fun, good sense of humor, strategic thinker, adapts easily to change

Manage Around and Reduce Your Six Extreme Personality Pattens

1. The Performer
   Overly ambitious, takes too many risks, prpmises more than can delivery, manipulates people for own success, over extends self and others
2. The Attacker
   Too critical, fault finding, disrespectful, too aggressive, argumentative, rude and abrupt, destroys teams, destroys relationships, makes people afraid of you
3. The Commander
   Domineering, rigid, controlling, inflexible, overly analytical, micromanager
4. The Avoider
   Too cautious, avoids risks, does not take initiative, is afraid to fail, too detail oriented
5. The Pleaser
   Too nice, allows others to take advantage, smooths over conflicts, backs down from competition, too agreeable, won’t fire anyone
6. The Drifter
   Disorganized, messy, impulsive, starts things and doesn’t finish, short attention span. If this is you, build your ‘Producer’

Make your goal to be every person you see, when you’re done seeing them, they feel better. Be open and caring toward people. Everyone you see and talk to wants to be talked to. Don’t be cold, critical, or hostile.

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Presenter Bio:
Dr. Gerald D. Bell, founder and CEO of Bell Leadership Institute, is a leading consultant to major business organizations throughout the world. He is also an award-winning professor, rated by Forbes Magazine as a “Don’t Miss,” at the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill. Dr. Bell’s cross-industry experience and in-depth expertise have earned him a reputation as one of the most sought-after keynote speakers and effective resources on leadership in the United States and abroad. [Full Bio]

iContact, Nourish, and Life Update

I’ve been super focused the last six weeks on iContact and Nourish since making it back from Skoll World Forum and the Icelandic volcano.

iContact Update

The baby that Aaron and I started way back in 2003 is now 7 years old (see our company picture below).

We’ve hired 45 new team members so far in 2010. iContact has now passed 200 employees and 63,000 customers and are at a $37M annualized revenue run-rate. Here we come $100M.

We’re working to build a ‘great global company, based here in North Carolina, for our customers, employees, and community.’ Our 2020 mission is to be the largest global provider of email marketing software and services to the Small Business and Mid-Sized Business market.

Recently iContact has come out with and announced:

• iContact for the iPhone
• iContact for Salesforce
• iContactPlus
• A preview of our new MessageBuilder
• iContact’s new blog – ‘The Official Email Blog’
• BusinessFuel – our small business resource center
• iContactTV – Our YouTube Channel

Here we are smiling out front of our Durham, NC office last month.

We’ll be moving to our new corporate headquarters in Morrisville, NC just a few miles down I-40 in October. Here’s what’s the building looks like…

iContact’s Social Responsibility

In May, Matt Kopac  joined iContact, helping us with our social and environmental responsibility work. Matt is helping iContact become a B Corporation (for-benefit corporation), create a system to quantify our social and environmental impact, and prepare for writing our 2010 Corporate Social Responsibility (CSR) Report. Matt is comes to us from Yale University where he finished in MBA in 2009. Matt has worked in the Peace Corps in Benin and for VisionSpring in El Salvidor.

Making iContact a  Triple Bottom Line (TBL) Company

A triple bottom line company is a company that focuses on its financial results, social results, and environmental results. This three-pronged measurement system also goes by the moniker of “Profit, People, Planet.” iContact already measures and report on our financial results religiously.

We are now setting up a system to measure our social results and our environmental results. My hope is that iContact can become a global example of a socially responsible triple-bottom line venture-backed technology company. My strong belief is that by measuring and focusing on social impact and environmental impact, financial results are actually improved and not the other way around. We are just at the beginning of this process.

Here is a description of our 4-1s CSR Program that we launched officially in January.

In January we rolled out our new values–WOWME…which stand for Wow the Customer, Operate with Urgency, Without Mediocrity, Make a Positive Wake, and Engage as an Owner.

We’ve got even more exciting things to share that we will announce by the end of July including our first acquisition and something so wonderful I can’t even allude to it…

Nourish Updates

Besides a few days in May at the DC Summit Series and trying to write articles and posts when I can, I’ve been very focused on two things professionally–iContact and Nourish International. I’m the Board Chair this year for Nourish so I was part of a committee to select Nourish’s next Executive Director Ryan Richards, who started on the job last week here in Chapel Hill.

Ryan comes to Nourish from NYU’s Wagner School and has worked with ReadingVillage, StartingBloc, Ashoka, and Asturias Academy previously. Ryan is taking the role from James Dillard, who as ED grew the organization from 8 to 22 college chapters.

Nourish is focused on training US college students to become global citizens. Nourish teaches entrepreneurial skills to college students who then run small businesses and ventures on their campuses, make a profit, and then invest those profits in community-based organizations in the developing world (thirteen countries so far including in  India, Bolivia, Mexico, and Uganda) who work to implement community-led sustainable economic development projects.

Nourish’s Board of Directors now includes…

• Pallavi Garg, UT- Austin
• Jud Bowman, CEO of PocketGear
• Neil Bagchi, Bagchi Law
• Buck Goldstein, UNC Entrepreneur-in-Residence
• Jim Kitchen, TUI Travel
• Lee Buck, LaunchBox Digital
• Joel Thomas, UNC-Kenan Flagler
• Chris Bingham, RileyLife Industries
• Marcia Angle, Intrahealth
• Ryan Allis, iContact
• Ryan Richards, Executive Director

If you’d like to learn more about Nourish International, make a financial contribution, or get involved you can visit the Nourish web site or contact Exec. Director Ryan Richards at ryan[at]nourishinternational.org.

Life Update

The past few months I’ve been living in Chapel Hill and traveling a lot for work to wonderful places like San Francisco, Boston, Chicago, D.C., and New York. Our ‘house of entrepreneurs and social entrepreneurs’ has grown. We have welcomed Zach and Ryan to our house recently and are up to 6 roommates (Phil, Ryan, Ryan, Joe, Zach, Andy) with Riley the Dog running around. Somehow we keep a good system going.

I’ve not had time to host an Entrepreneur & Social Entrepreneur Meetup for a few months but hope to bring them back in the Fall. I’m hoping to be able to head to Kampala to visit Roey with VillageEnergy in October as well as see Kigali and Zanzibar for the first time.

My girlfriend Jess has graduated from UNC with a degree in Peace, War, and Defense and is now working on both finding a job in the socially responsible investing or international relations field as well as writing a business plan for a new venture called Borderless Books and volunteering for Jim Thomas’ AfricaRising.

If you know of anyone looking for a brilliant UNC grad and social entrepreneur who’s worked in Tanzania, Guatemala, and Uganda to work for their non-profit organization or company, email Jess at jess.shorland[at]gmail.com!

My parents Pauline and Park moved back to Bradenton, Florida in December. They have now sold their house in Carrboro, NC and this weekend will be the big family furniture move to my house.

Off to do a reference check call…

Ryan

iContact's Social Responsibility 

In May, Matt Kopac has joined iContact as a 20 hour per week consultant, helping iContact on our social and environmental responsibility work. Matt will help iContact become a B Corporation (for-benefit corporation), create a system to quantify our social and environmental impact, and prepare for writing our 2010 Corporate Social Responsibility (CSR) Report for the Board of Directors. Matt is comes to us from Yale University where he finished in MBA in 2009. Matt has worked in the Peace Corps in Benin and for VisionSpring in El Salvidor. He works in a cube outside Cindy Hays' office. Say hi to Matt (picture below) when you see him! 

What Does a Triple Bottom Line (TBL) Mean? 

A triple bottom line company is a company that focuses on its financial results, social results, and environmental results. This three-pronged measurement system also goes by the moniker of "Profit, People, Planet." We already measure and report on our financial results religiously. Part of the work Matt will be doing is setting up a system to measure our social results and our environmental results. My hope is that iContact can become a global example of a socially responsible triple-bottom line venture-backed technology company. My strong belief is that by measuring and focusing on social impact and environmental impact, financial results are actually improved and not the other way around. We are just at the beginning of this process.