So many of them are prepared to suffer for their business strategies, yet so few actually take the time to learn how to strategize.

Part of the problem, I suppose, is that it has become quite fashionable to call oneself an entrepreneur without really knowing what the word means. Or what the title requires.

But, necessity is the mother of fashion. When the economy as we once knew it dropped dead in 2008, many Americans suddenly realized: taking control of one’s own destiny and going it alone was as dicey as placing said destiny in the hands of the mysterious boardroom troglodytes that run big corporations with seemingly little else but their own interests—and the interests of their shareholders—in mind. Especially when they were running so many of those businesses into the ground.

So, really, entrepreneurialism was no longer a luxury or a choice. It was the last ticket to self-preservation.

What is your vision? What do you believe?

Entrepreneurship also became something of a quasi-patriotic procession. American history was written by entrepreneurs, beginning with the “Founding Fathers,” who dreamed dreams of self-government wedded to shrewd ideas of personal portfolio management; and then by packs of “rugged individualists” who succeeded them in the decades that followed. They are those singular, sainted figures of yore who continued to dream big, really big, and then created something even bigger: U.S. Steel. Ford Motor Company. Standard Oil.

It’s a perilous reality, too. There are ineluctable dangers associated with the entrepreneurial mantle that are easily and inevitably compounded when, for example, the starter of a startup doesn’t take the time or make the effort to understand the elemental points of strategy. This is not to say that one should drop everything and matriculate in the nearest accelerated B-school program before setting out to become the next Mark Zuckerberg or Sergey Brin.

Quite the contrary. To create a successful strategy as an entrepreneur, one doesn’t need B-school; one needs a vision.

Every strategy begins with some far-reaching, far-thinking view of what can be: A horseless carriage. A trip to the moon. A just and verdant world. Anything you want, really, just so long as everybody else in your world thinks it impossible.

It is, paradoxically, the easiest and hardest question you’ll pose to yourself: What is my vision? Because, what you’re really asking is, What do I believe?

Simple to pop. Tough to answer.

Often times, we don’t know what we believe until we’re tested; and there’s no greater test in America than starting one’s own venture from scratch.

Some would argue that taking swift action before knowing exactly “why”—and “to what end”—is better than taking no action at all. There’s some truth to it: we can all stand around making up our own lines in a venture-play, in the hopes that something like “Hamlet” will emerge before the curtain goes up, and the “play” goes public. Or we could start by envisioning the creation of a poem unlimited and design a plot and develop our roles accordingly in support of a boldly, bravely imagined narrative.

I guess it all depends on what it is we’re trying to do as entrepreneurs: improvise or strategize. If the latter, there are some things to bear in mind before we tease out a vision.

Idealism vs Opportunism? (Or Opportunism as Idealism?)

You know what you don’t want: You don’t want to work for anybody else. You want your name on the door. You want to keep your own counsel and your own hours. You don’t want to ask anybody’s permission to come in late, or to leave early, or to use the restroom.

That’s all well and good, but a vision that merely negates the status quo is not really a vision. A vision is a clear, strategically imaginative idea of something that exists beyond the realm of present possibilities. As you begin to divine your vision as an entrepreneur, you should probably figure out first if you’re out to make it big in the world or for the world. Either one is, of course, a perfectly legitimate underpinning to your vision. If you prefer to make your money first, then figure out how to save the world—great. It’s the old model of the enlightened industrialist, a la Rockefeller and Carnegie; and, among the living, Gates and Buffet.

Just make sure that whatever it is you’re “entrepreneur-ing” isn’t going to destroy the very world you’re hoping to help down the road. If you see opportunism as idealism then perhaps your strategic vision begins to shape up along the lines of social entrepreneurialism: An enterprising model with a mission-driven cause—Tom’s Shoes, Ethos’ Water. Don’t confuse this with “corporate social responsibility,” where the mission exists to serve the business. It’s the other way around.

All Original Goals Melt Into Air

Nothing is certain, not even uncertainty. Our belief about this or that changes from day to day because we change from day to day. Minute to minute actually, if one is paying attention—for example, you have information now that you didn’t have at the beginning of this article; info that may or may not influence future behavior. Either way, you have acquired knowledge—opinions, if you prefer—which hopefully has triggered more thinking, which will lead to more insights, causing the scales of the mind to tilt ever so slightly. (Keep reading and they will tilt some more.) Clearly, the judged—and the judges—are not stationary. Together, they are mutable, always in motion.

What does all this mean? The goal, that shiny city on the hill that you see in your mind’s eye, is never fixed.  It changes as we change—and, often times, the closer entrepreneurs come to the goal, the more they will realize it looks nothing at all like what they imagined. That’s OK. On the road to one’s own private Damascus, the entrepreneur is faced with choices—choices in partners, choices in policies, choices in priorities. Sometimes, it’s a choice that leaves no choice but to kill one version of the dream in favor of another. The adaptable entrepreneur, the elastic entrepreneur, the one who knows that no goal is ever fixed, will claim the brass ring. The inflexible ones, who blindly and blithely pursue the vision of a goal unchanged, even in spite of their own interests, will find themselves leading the dreaded march of folly.

Think Beyond Yourself

Entrepreneurs are usually classified as type-A, single-minded, goal-oriented egoists; the free-market autuer who finds it positively inconceivable that anybody else can improve upon the manifest perfection of the vision. However, the most successful entrepreneurs understand from the get-go that self-centeredness is really a synonym for “unimaginative.”

They not only consider other points of view, even those that run contrary to the big idea; they use the sum of the knowledge and experience of others to imagine, fashion, and hone a shared vision, which in the end, is far, far greater and more powerful than any singly held notion.  This unites coworkers—first followers, if you’re a startup—creating solidarity through a common purpose and true belief in a common cause, which helps to lay the groundwork for something known as “culture.”

And culture devours strategy every time.

I had the privilege of interviewing some incredible entrepreneurs and investors during the conference, including: Tony Conrad, Dave McClure, Marc Ecko, and Gentry Underwood.

I learned an enormous amount from each one of them about investing, startups, building a brand, and human centered design. In the coming weeks, those full interviews will be rolling out on Technori.com.

But, as is often the case, when I’m interviewing someone for a story, sometimes it’s not the words they say that impress or teach me the most.

It’s often the set of intangibles:

• Mannerisms
• Presence
• Tone
• How thoroughly they answer questions
• How open and vulnerable they are willing to be with me
• How generous they are with their time and energy

Every single one of them gave me the best of all of the things on the list above. Here are seven of the specific lessons I learned about those intangibles—and on a top-level, about becoming an incredible starter:

1. Those “famous” entrepreneurs and investors? They are just people.

A lot of folks are star struck when they walk up to a guy like Marc Ecko. But Marc is just a normal guy who’s had the courage to live a phenomenal story. If you want to have a great conversation with a popular entrepreneur or investor, treat him or her like a regular human being. Be prepared with great questions. Soak up as much as you can. Don’t let your irrational fear about going up to someone “famous” get in the way of you running with the opportunity to connect with and learn from them.

2. You have to be yourself.

This is one of those age-old sentiments that is lost on many because the advice is given so frequently. And that’s a shame, because it’s so important. What I noticed about all of the speakers I interviewed is that they were very confident in themselves, flaws and all. They all had an exceptional level of candor, honesty, and vulnerability. You don’t need to be perfect. You don’t need to be like anyone else. You just need to be you. Do that really well, and others will be infectiously drawn to that.

3. Yeah, it’s important to hustle. But it’s also important to cultivate relationships. 

Stop going up to investors and asking for money. Honestly, don’t do that shit. If you want to tell someone passionately about your business, DO IT. ABSOLUTELY. Impress them with your passion. Impress them with your confidence and your story. But, use it as a way to get to know them so they’ll remember you when you follow up. And then, build out that relationship over time. Be valuable to that investor before you ask for money or a meeting. Because if you flat out ask for a meeting, you might get one, and it might be good or bad. But, if you get to know them and build personal rapport, when the time is right, you’ll get that meeting and the investor will be more interested, attentive, and, well, invested in what you have to say.

Relationships are everything. So yeah, go hustle and make incredible shit happen. But remember that, as with any kind of investment, you’re more likely to get someone’s time, money, energy, and respect when you’ve proven that you deserve it more than the thousands of others asking for the same things.

4. Entrepreneurship is fucking hard. 

Every single person I interviewed shared this sentiment. It’s really, really, really, really hard to build a company. If you’ve got hopes of being a successful entrepreneur, brace yourself now. There will be excruciatingly hard moments ahead. It will not always be fun. You will not always love your job every single day. You’ll deal with crises and conflicts and problems bigger than you could ever image. You’ll be told “no” more times than you ever thought possible. Do it anyway. If you’re in love with a dream, and you’ve figured out how to make that dream real at the intersection of your passion and talent, go make it happen. DO NOT STOP. Anything worth doing is fucking hard. Prepare for it.

5. You have to be okay with the potential reality that people will hate on you. 

When you put stuff out into the world, whether it’s a product, a service, an investment, a presentation—whatever—people are going to notice. And when people notice, they are going to have an opinion. Sometimes, those opinions won’t be favorable. Sometimes, they’ll be mean, unfounded, or downright untrue. You have to get used to the idea that people are going to find reasons to hate you and what you’re building. And you have to get over the focus on the 10% of things that go wrong.

The truth is, if you’re building something with all of your heart and soul, more people will love it than hate it. You will make a much bigger positive impact than you could ever imagine. Ignore the haters. Separate the external feedback from your personal sense of self and faith in your startup.

6. Don’t be an asshole. Treat people really well. 

In the process of meeting great people, you’ll inevitably come across some very cocky, arrogant, horrible ones. Don’t get caught up in it. Let it go and realize it’s their own insecurity and drama, not yours. If someone doesn’t want to give you the time of day, don’t waste much time wondering why. It’s not worth it. They’re not worth it. Spend the time instead on making sure you treat everyone else you meet exceptionally well.

No matter how busy you get, how many emails you need to answer, how long your to-do list is, you have to remember this: you’re no more or less important than everyone else on this planet. Everybody has a story to tell. Everyone is fighting a hard battle. Everyone is building something—whether it’s a company, a product, a family, a dream, etc. We have to start treating one another better. You must always keep in mind that, while your startup feels like the most important thing in the world, no one will ever care about it as much as you do (at least, no one ever should). Keep things in perspective.

It’s much, much more important to be kind than it is to be self-important. Give the people you meet—especially those who champion you in your inner circle—all of the love, energy, patience, and kindness you can muster. In the long run, it makes all the difference in the world.

7. Learn how to be 100% present. 

Wherever you are, be there. Be 100% there. As an entrepreneur, you’re likely going through a TON. You’ve got a lot on your plate. You’re working really hard. You have to make big decisions. You’re probably stressed, and overly busy, and anxious. When you walk in the door at an event, meeting, etc., leave it at the door. Let it go. Take the time to really be present with people. Give them everything you’ve got.

Let people know their stories matter to you.

And remember that every story is important—Tony Conrad‘s, Dave McClure‘s, Marc Ecko‘s, and Gentry Underwood‘s….

And yours.

Interns provide high-value, low-cost talent and fresh perspective. Accordingly, the interns’ scope of work can (and should) go beyond stereotypical coffee making. By hiring interns, you can expand capacity for new projects or find students who bring new skills, such as graphic design, to your team.  While ambitious students lack the experience of full-time employees, they genuinely want to learn and excel.

Designing an internship position

So how do you get started? First, consider the following logistics as you design the position:

• When will the internship occur? Full-time internships commonly occur during summer break, but you could also offer part-time positions during the fall or spring semesters. Make sure that a current employee has the capacity to mentor and manage the interns’ work during this period.

• What level of commitment do you expect? Describe your requirements in time (days or hours per week) or key duties, such as managing your social media or achieving sales goals.

• Is the location flexible? Traditional internships usually require face-to-face interaction, but long-distance roles provide greater flexibility to attract more students. Will there be any travel required?

• What skills are required? Before enlisting an intern, determine whether you expect specific skills from day one, or if students can receive training and learn on the job. Be clear about whether you need an iOS developer, someone with a mastery of Microsoft Excel, or both.

• What is your goal for the outcome of the internship?  Do you want to find aspiring entrepreneurs who are interested in gaining short-term experience, or candidates who are looking for full-time job opportunities?  If you’re looking for the latter, focus on hiring students who will graduate sooner.

• Will your internship be paid?  The Department of Labor provides six criteria to determine whether interns need to be paid under the Fair Labor Standards Act.  These guidelines are heavily based on the internship’s educational merit and the benefits that the company receives.  In lieu of being paid, interns might be able to receive college credit through their educational institution.

Cash-strapped students may seek paid opportunities, but interning provides invaluable experience apart from regular compensation. In the long run, students take internships to build their resumes and unlock future opportunities like recommendation letters and networking.  Startups have an important edge when competing for talent because they provide great interaction and flexibility.

How to find great intern applicants

The next step is finding applicants. Recruiting for undergraduate or MBA internships typically begins three- to five months in advance, although many students look for last-minute positions. Attracting great applicants is a lot like real estate: location, location, location. After outlining the position’s basic criteria, you can publicize your internship in a variety of ways. Here are a few effective methods:

• Submit a job posting to a college’s career center or post a message on the campus’s virtual job board. A university-branded site feels more credible than open forums like Craigslist, and helps attract high-quality talent during the recruiting cycle.

• Contact on-campus organizations, such as a consulting club or the college’s entrepreneurship center, with a description of the position and your contact information. If the location is convenient, you could offer to attend a meeting in person.

• Utilize local or national startup-focused sites such as Built in Chicago to broadcast the internship opening. While this may not reach as many eyeballs as a campus-wide ad, proactive students monitor these sites and will follow up.

• Reach out to your network, specifically contacts such as adjunct professors at local universities.  They can recommend outstanding students or share your contact information with their classes.

Recruiting provides a great way to develop on-campus brand recognition. If your startup hires full time employees, internships develop a pipeline for finding new hires. After assessing students’ skills through the internship, companies can easily extend full-time job offers to top performers. While hiring an intern takes time and effort, the benefits easily recoup the costs if you plan for an intern well.

Looking to grow your startup but missed the event? Don’t worry. Here’s a recap of four valuable lessons we learned at the Technori Growth Summit:

1. “Test early and often.” – David Petrillo

As the inventor and co-founder of the wildly successful Coffee Joulies, a coffee temperature regulator that raised over $300K on Kickstarter, Petrillo emphasized the importance of having a “test everything” mentality in growing a business. Test everything, test early, test often.

Interestingly enough, the success of Coffee Joulies did not happen overnight. It was essentially an iterative process that involved working on prototypes for 8 months, conducting tons of research and lots of testing, regularly pulling historical data from Kickstarter to identify what worked and (perhaps more importantly) what didn’t work, pitching to targeted blogs to maximize viral potential, and being relentless in listening to the customer in order to create a product that delivered real value.

The idea behind Coffee Joulies, Petrillo said, was to come up with a “simple, easy solution that I could build myself to solve a simple product that a bunch of people have.” He started on a small budget and allocated only $5K for making the product. (“Half the fun was doing everything super cheap,” Petrillo said.) From this original vision, he was able to raise funds from Kickstarter (Coffee Joulies was the third most-funded project at the time), negotiated a $150K deal with the sharks on ABC’s Shark Tank, and win another $100K from the 2011 Shopify Build-a-Business competition. In other words, Petrillo was able to grow Coffee Joulies without going the traditional angel or VC fundraising route.

“Our backers are our customers,” he said.

2. “Create content that teaches.” – Neil Patel

Co-founder of visitor tracking CrazyEgg and customer analytics platform KISSmetrics, Patel knows a thing or two about consistently increasing traffic and revenue, two of the most telling signs of any Internet company’s growth. A blogger, entrepreneur, analytics expert, and angel investor, he’s also known for guiding businesses—entrepreneurs, bloggers, marketers, and digital media publishers, in particular—on how to double, sometimes even triple, traffic in 30 days.

Patel’s advice? “Create content that teaches.” This is something that he himself has focused on. Having blogged since 2006, Patel generates impressive amounts of traffic and revenue from quality, informative content. “You can’t give up,” he said. “You need to be consistently awesome.”

His blogging hustle and hard work have certainly paid off. With KISSmetrics, 70 percent of leads come from the blog; his current Quick Sprout blog, meanwhile, produces over $1 million in annual revenues. He has also written for or been featured on Inc. Magazine, Forbes, GigaOM, TechCrunch, Mashable, and Entrepreneur Magazine.

Patel also advised creating the kind of content that is targeted to a specific niche. “Our [niche-targeted content] converted visitors into customers,” he said. “The broader [blog] posts did not convert as much.” Like Petrillo, he recognized early on the importance of having a product or site that delivered value—that customers, in other words, were willing to pay for.

3. “The more incentive you give people to share, the more likely they are to share.” – Emerson Spartz

Spartz stood before the summit attendees as a leading authority in driving a special, very modern-day type of growth: Internet virality. Now a New York Times best-selling author and the CEO of Chicago-based digital company Spartz Media, he was the original founder of the Harry Potter fan site MuggleNet, which he created when he was 12.

His successes—which include sites like OMG Facts, GivesMeHope, SmartphOWNED, Six Billion Secrets, and, of course, MuggleNet—don’t necessarily reveal how he always seems to be able to create sites that generate an incredible amount of word-of-mouth buzz (plus about 160 million total monthly pageviews). In fact, his personal upbringing reveals more: at age 12, growing up as a “weird kid” in Indiana (in his words), Spartz convinced his parents to let him drop out and home school himself. In college, he read one non-fiction book a day. He usually read about business, politics, technology, and economics, but a lot of the books were about neuroscience.

It’s safe to say that from this daily reading habit, Spartz learned a great deal about how the human mind works: valuable information that serves him well not only in persuading and convincing consumers, but also in getting them talking.

Sharing growth and virality tips to summit attendees, Spartz said that identity—specifically, how identity is affirmed online—plays an important role in determining the viral success of a project, campaign, or product. “People always ask themselves, ‘Will sharing this make me look cool?’ The more incentive you give people to share, the more likely they are to share.”

4. “The most important factor to succeed at growth is company culture.” – Aaron Ginn

Having led the growth of businesses that range from early-stage startups to large corporations, Ginn got his start in consumer healthcare with medical wallet service Simplee. He was also a former growth hacker for Mitt Romney for America, and is now the Head of Growth at StumbleUpon, a mentor/organizer for Growthathon, and the author of the TechCrunch series, “Defining a Growth Hacker.”

At the summit, Ginn discussed the multiple challenges faced by companies looking to grow. “Everyone wants to grow,” he said. “(But) growth is really hard. Product is really hard. Recruiting is really hard. Doing anything worthwhile is hard.”

Ginn said that the key is to dedicate resources to help achieve an organization’s growth goals: “This prevents excuses for failure.” And it all starts with company culture—with a specialized team of people recognizing what they value, what the focus is, how others are held accountable, and how problems can be solved.

Ginn also emphasized the roles of the product manager, engineers, data scientist, and designers in growing a company. “Everybody loves building the next shiny thing,” he said, “but growth requires banging your head against the wall. Common culture problems can inhibit growth, so [you have to] focus a company on what is really important.”

That sentiment came from Erik Severinghaus, founder of SimpleRelevance, at the April 25th Evening With An Expert event hosted by the Chicago chapter of the American Marketing Association at the 1871 tech incubator.

Math may not be the inspiration for marketers, but now it’s become a necessity. There’s simply too much valuable information buried in big data for them to ignore it any longer. Severinghaus was part of a discussion on how marketers are using big data. He was joined by Doug Laney of Gartner and Dan Neely of Networked Insights in an evening that would leave Don Draper sprinting for the cocktail bar.

From an evening full of great takeaways, here are the four concepts that stood out:

1. “The Mad Men are giving way to The Math Men”

That’s a quote from Severinghaus, but it could have been the title of the evening’s program.

“Too much marketing is intuition, or based on dated data,” Neely said. “That’s why it fails.”

There’s so much data available today, and so many great companies analyzing it to find its incremental value, that there’s no excuse for the level of guesswork advertisers are accustomed to.

Severinghaus, whose company specializes in automated email personalization, sited the “batch and blast” email technique used by so many Fortune 500 companies. He argues that these companies are losing millions of dollars in the form of degraded email lists because they’re sending people information they don’t want, and/or at times they don’t want to see it.

“We know that women purchase more often over lunch hour and men purchase after work,” he said. “Why don’t we use that?”

2. Don’t be afraid

Data is created constantly.

Companies are racing to find the best way to use this information trail we’re leaving behind everywhere we go in the digital world—our website visits, our check-ins, our social conversations, our eye-tracking.

To many of us, this is a scary notion. A couple of years ago, I clicked on a link for Clarks desert boots. Soon, ads for the boots were popping up on every site I visited. I thought I had stumbled into the early roll of a fashion wave– until I realized it was a personal wave created for me based on the user trail I left behind.

This specter of the corporate Big Brother, powered by big data, is hard to shake. Neely acknowledged those fears, but argued that this omnipresent data farming produces far more good than evil.

“Some of it’s bad, but most of it is good,” he said. “My life is much easier because of the amount of information Delta Airlines knows about me. I like that they re-book my flight for me because they know I’m not going to make my connection. I like not having to wait in line.”

Personally, I’m not all in. I don’t want to be a member of the choir (see Eli Pariser’s great Ted Talk on Filter Bubbles), but for the marketer or the entrepreneur, there’s no excuse for waiting.

Oh, and in case you were wondering: though I don’t like being sold to, I did buy those Clarks boots. And I love them.

3. Get used to this phrase: “Pre-informed”

“Pre-informed” is a term Neely used, as he bemoaned the inefficiencies of the campaign creation process. ”It is not an efficient process to do marketing,” he said. “It’s a very inefficient thing. When you think of the rigor that goes into planning a campaign, does all of it really need to happen?”

Traditionally marketing has been 80 percent hunches and 20 percent testing. Neely predicts that smart data use can flip this equation. ”That’s pre-informing your decisions,” he said. “We’re going to get more efficient at what we do, and better at spending the money we have.”

4. Experiment more

Wait, doesn’t experimentation contradict the idea of being pre-informed?

Not really. We still need to follow some hunches and take some risks. That’s how we flip this data on its head and create new, incredibly valuable insights (Matthew Hartman touched on this just the other day.)

“Too many companies,” Laney said, “are scared of experimentation. Instead, they stick to their silos.” Laney pointed to Google, a company that runs thousands of experiments each year, and is famous for giving employees “20% time” solely to experiment with new ideas. Google isn’t afraid to fail with new service launches if it’s in the name of innovation.

“We encourage organizations to experiment constantly,” Laney said. “We look to other industries for great ideas to use big data. After all, if someone in your industry is already doing something, do you really want to be the second one in line?”

When an entrepreneur goes for funding, he or she needs to present a financing package to potential investors and understand all the details and assumptions behind the numbers.  The financial model is the key tool entrepreneurs can use to share their perspectives with investors.  The VCs will have their own smarty pants accounting analysts prepare their own models, but that’s equivalent to catalog-level modeling, versus your runway experience.  Therefore, your experience in the field should inform your financial modeling assumptions and make them more compelling.

The VCs will create a funding structure element to their model, which will assist them in evaluating the funding terms.  Startup management teams should see how a VC’s ROI compares to their modeling scenarios and inquire what assumptions were made so they can compare against what they already have input.

Preparing your financial model

To prepare a financial model for a funding round, you need to have these core elements:

• Assumptions
• P&L statement
• Balance sheet
• Statement of cash flow
• Forecasts
• Key metrics

If you have accurate bookkeeping, then the P&L, balance sheet, and statement of cash flow should be easy to generate straight from your general ledger system.

Make sure you cover these in your VC presentation

The presentation to potential investors requires due diligence on the following:

• Market size
• Growth
• Unmet needs
• Value proposition
• Competition
• Strengths and weaknesses
• Business model (which will have many assumptions)
• Scalability
• Key metrics
• Multi-year financial model
• Historical and future timeline of the business
• Investment rounds, returns, risks, and exit strategies
• Introduction to team

Investors have the mindset “actions speak louder than words,” so do not have too much narrative or fluff in the presentation to attract funding.  Show the investors a detailed financial model with the ability to test assumptions and sensitivity, and show how this startup is going to make them money.

Startup assumptions

Assumptions are key for forecasting the future position of the business.  Use historical data or benchmarking of similar businesses to ensure your assumptions are believable.  Assumptions vary based on your business model, but some metric examples would be:

• Number of future users
• Percentage of users you will retain
• How much money will you generate per user
• New revenue streams
• Burn rate of expenses

The future of your company

These assumptions are then plugged into the current reporting to generate multi-year financials to show what the future of the company will look like financially.  It is important to create a model that allows you to play with the assumptions based on feedback received, or new data that will impact the whole model. Key metrics to keep in mind are:

• ROE (return on equity)
• ROI (return on investment)
• Net profit margin ratio
• Accounts receivable turnover ratio
• Gross profit margin ratio
• Debt to Equity ratio
• Working capital

Once you have your assumptions, key metrics, and financials prepared, it is important that you have short-term and long-term cash flow strategies in place for the existing business, and for the potential capital funding raised.  Managing cash flow is an essential function of sustaining a business.  Effective cash flow strategies assure that enough cash is on hand to meet financial obligations (e.g. payroll, suppliers, customers, credit, loans, inventory, or any capital expenditures), while maximizing financial returns from excess cash.

The importance of the business and financial models does not end once the financing is complete.  You and your management team should continue to work with, improve, and update it.  As the business develops, the quality of the forecasting will become apparent.   It is likely that you and your management team will be judged on performance according to your forecasts—so achieving the milestones identified in the modeling will be an important factor in your relationship with your VCs going forward.  This will become a living document and part of the management toolbox for your business.

So when going to a VC, make sure your presentation looks good, but can also be backed up.

From the entrepreneur’s perspective, pay to play might at first look like an intra-investor issue, and indeed, the attitudes of the various investors towards pay to play frequently diverge for a variety of mostly investor-centric reasons.  However, in my view, entrepreneurs make a serious mistake when they assume that pay to play is something the investors should work out among themselves.  Instead, pay to play is something that the entrepreneur should drive at the term sheet stage–to the point of suggesting that it be added to a term sheet an investor has advanced that does not include it.

What makes pay to play important in the context of the investor syndicate–that the various investors want to make sure that they are all committed to the deal for the long haul, even if the long haul includes a down round detour–makes it even more important to the entrepreneur.  Investors may have a variety of internal fund reasons for not participating in a down round– most obviously, that they don’t have sufficient capital reserves to pony up. Nonetheless, from the entrepreneur’s perspective, if the business needs capital the investor’s problems are just that: the investor’s problems.  The entrepreneur, in every down round case I can think of, should want every current investor to have every good reason to pony up.  You may not always need negotiating leverage vis-a-vis your investors, but having it is never a bad thing.

As for the various flavors of pay to play, the two bookends are as follows:

The most severe form asserts that if an investor doesn’t play in a down round, his or her preferred stock is immediately converted to common stock at the pre-round (i.e. without any anti-dilution protection for the round that he or she is passing on) conversion price.  Ouch.

At the other end of the spectrum is a pay to play provision which asserts that an investor who doesn’t play in a given down round does not get anti-dilution protection in that round, but retains all rights, including anti-dilution protection, going forward.  Smart readers can no doubt see room for a wide variety of pay to play provisions falling between the two extremes.

My take is that the entrepreneur should always want the most severe form of pay to play provision he or she can get—the idea being that you can always, at the time of a down round (and with the cooperation of the participating investors in the round) back off enforcing the full force of the provision on the investors that choose not to play.  On the other hand, you can’t up the ante on the pay to play after the fact. In other words, you can’t, come the future down round, increase the severity of the pay to play provision already in place.

A few concluding thoughts:

First, while pay to play is something entrepreneurs should make sure is on the table, ultimately it is in most cases an important negotiating point, but not (in my experience) something to bust an otherwise solid deal over.

Second, whatever the ultimate outcome of the pay to play discussion, having the conversation will typically smoke out any prospective investors who may have serious internal constraints on participating in any downstream financing rounds.  The only worse thing then having an investor who doesn’t have any dry powder available for a future round, down or otherwise, is having such an investor and not knowing that going in.

These people can be hard to spot in advance, but when you have one working for you, you know it right away. At ReWork, we’ve found that these indispensable employees tend to share eight common traits. Here they are, along with some advice on how you can uncover them.

1. Resourcefulness

The ability to (quickly) find, unlock, and mobilize resources (i.e. money, expertise, skills, support) in order to plan, pivot, evaluate, execute, or scale a project.

The information age has been upon us for sometime now. Anything we could ever hope to know is at our fingertips, including best practices, trouble-shooting guides, top-10 lists, and the Twitter handles of people who are far more experienced than we are. But not everyone can access this information equally.  Most are still overwhelmed in this sea of knowledge.

If I asked you to conduct a feasibility study on effective conservation techniques to protect the rare aquatic pygmy sloths of Panama, how quickly could you find a template for such a study? How long before you would be in touch with a niche conservation biologist who studies those animals to help advise you?

If your answer is anything over 2 hours, you’ve got room for improvement (seriously).

How to uncover it:

• Ask for specific examples of times that they found critical information or resources quickly. This includes fundraising and coalition building, as well as smaller stuff (like “How-To” lists) that helped a project move forward faster.
• Tell them you want to do an obscure project and need help. Ask them to conduct a feasibility study on something like the pygmy sloths examples above. See how quickly they can find a template for such a study, or the contact information for the niche biologist who studies those animals and may be able to serve as an advisor.

2. Resiliency

The ability to work well under uncertainty, and to continue after (substantial) setbacks.

Most organizations are now experiencing increased instability and uncertainty, and thus, using shorter planning horizons. Teams in all functional areas are seeing more tumultuous work streams with changing goals and deadlines. Some people have a strong tendency to mentally lock-up under those conditions. The results aren’t good: decreased performance, irritability, fear, and tensions with other team members. Resiliency is the ability to maintain smooth sailing through those situations.

How to uncover it:

• Ask for evidence of grit. This could be times they narrowly averted disaster, took a huge risk and had it pay off, or came back from a stunning defeat to achieve victory in the end.

3. Confidence

A healthy esteem for one’s abilities and approach to life; an innate knowledge that “I can handle it.”

The line between confidence and arrogance is fine, as we all know. Nobody wants to work with people who think they are always right. But there is no substitute for someone who truly, with good reason, believes in his or her ability to handle any situation and figure it out.

How to uncover it:

• See if the person is willing to say “I don’t know.” Ask a question (perhaps about your organization) that: A.) has a right and wrong answer, and B.) is highly unlikely that this person knows the answer. See if they admit not knowing, or if they dodge or BS an answer, or try to guess. If they do any of those things, beware. That is not cool.
• Listen to how they speak. Confident people tend to speak more slowly, take pauses before answering, and don’t backpedal their answers.

4. Coachability

The trait of not only being able to accept constructive criticism, but of actively seeking out consistent feedback and mentorship; the trait of intentionally cultivating a beginner’s mind; the essence of a learner.

Especially for those early in their careers, this is key. Nobody knows everything, and there are lots of people who’ve been there and done that, with failure and success. Having a genuine interest in learning from them–even when it’s hard–is incredibly useful.

How to uncover it:

• Ask for examples of times when they pursued or engaged in mentorship opportunities, and how their mentors helped improve their professional abilities over time or when it mattered most.

5. Versatility

The ability to bring one’s full range of skills and strengths to bear in different and new situations, including both on teams and in individual settings.

This is pretty straightforward. Managers need to know that they can re-shuffle and re-allocate people as needed. Sometimes, that means logistical changes and deadlines shifts. Other times, it means entirely new workflow compared to the status quo. The more adaptable the person, the wider a range of settings he or she can be sent into.

How to uncover it it:

• Ask for evidence that they’ve excelled in wildly different work settings, and ask about their process for handling the transitions.

6. Industriousness

The ability to work your ass off; good old fashioned hard work.

Similar to confidence, there is nothing like a dose of serious hard work. Can they crank for 8 hours straight when push comes to shove? Can they pull an all-nighter if they have to? Do they complain when mind-numbing tasks are required, or do they just do them, and do them well?

How to uncover it:

• Ask them to explain what it means to hustle, in their own words. You’ll know right away whether they like that word–their eyes will light up, they’ll smile, and they’ll fondly recount tales of intense times. Everyone has that spark that let’s them rise to the occasion. Give them the chance to let their spark shine a bit.

7. Loyalty

The ability and willingness to develop a long-term relationship with a team, organization, or cause.

As careers fragment further and further (current college grads will, on average, work for 14 different employers before they retire), the days of long-term work relationships seem to be fading fast. And truthfully, they probably are. But that doesn’t mean people like to work with others who’ll take off at the first sign of trouble or greener pastures.

How to uncover it:

• Ask for examples of times when they chose loyalty over opportunity.
• Ask them what they are committed to in their life, and see if there is overlap in their answer and the mission of your company.

Note: Be careful with this one. Just because someone left a job (or jobs) in short time periods doesn’t mean they don’t have loyalty–it just means those places weren’t able to command their loyalty.

8. Principle

A sense of what is right and what is wrong, and choosing to act in accordance with what is right.

This one is another fine line situation. Being principled is relatively rare–but being judgmental is quite common. Principled doesn’t mean casting judgments left and right; it means being willing to speak up when something wrong is about to happen. Human beings have an instinctual urge to follow those who show a strong sense of ethical concern, and every manager can sleep better at night knowing they can trust their team with sensitive information, delicate situations, and brand equity. Hire people who live their values, and you’ll develop a fantastic company culture.

How to uncover it:

• This one is tough. It’s impossible to ask about this directly in any useful way. Keep your eyes open for someone speaking up about something they don’t agree with. You can ask about times that they’ve witnessed injustice and intervened, but that can be a difficult question to put someone on the spot with.

Find these eight traits in the talent you bring on, and your organization will be thanking you for years to come.

I launched my business as a “solopreneur.”  I did not intend to partner with anyone or hire any employees, so I did not give much thought—if any—to the best practices for building a team for my business.  While I developed detailed plans for business operations, extensive substantive training materials, and growth ideas out two years into the future, I set forth no criteria for interviewing, evaluating, or hiring anyone.  It turns out I had overlooked a critical component, not only for business success but business wellness.

And here’s what happened because of it:  In the spring of last year, I hired someone to design and develop a new website for the portion of my business that focuses on entrepreneurs and small business owners.  We signed a contract and he (let’s call him “J”) got to work.  Over the course of our working relationship, it became clear to me that J was in over his head.  He did not appear equipped to build the kind of website we contracted for.  He seemed overcommitted, too, and I was not impressed with his time management.  The launch of my site–and consequently, the launch of my business—was untimely and did not go as planned.

When the site was nearly complete, J informed me for the first time that he had somehow exceeded the maximum contract amount by 250%.  And he would not release my website, despite the fact that I had paid every invoice in full up to that point, until I made up the difference.  This was a difference of $7,000 (over and above the agreed-upon contract amount).  For weeks, I was in a panic as he held my website hostage, and I finally had to get lawyers involved to enforce our contract and gain access to my website.  This was costly and incredibly stressful.

Now, J’s attempt to breach our contract and force me to pay him thousands of dollars in exchange for my site was not cool, and I’m sure he’ll be hearing from the business karma gods because of it.  But hiring him in the first place was a mistake–and one that could have easily been avoided.

Over the course of the last two years, I’ve learned that every business—no matter how complex or simplistic, and no matter the size or number of participants—will require help.  A lot of it.  And it is important to have comprehensive systems in place from the beginning to ensure you are compiling the right team of people to support you as you execute your business vision.  Without these systems, you are likely hiring on a need-basis (and likely when the need is urgent or pressing), so you are not in the best position to think clearly about who you are letting into your sacred business space.  And without these systems, you run the risk of unnecessary stress, diversion of resources, and, in a worst-case scenario, becoming generally disillusioned with the idea of running your own business in the first place.

No matter where you are in the life cycle of your business, and whether you have hired no one or work with a staff of 40 people, now is a good time to check in and make sure you have systems in place to select, manage, and interface with the best teams for your business.  If you do not yet have help, seriously consider getting some–your business will only be better for it.  If other adjustments need to be made to your staff or team, go ahead and make those adjustments so that you can get back to running your business in an optimal way.

Bonus Tip:

If you are running a new startup and are unsure of where to begin with building your team, start by making a list of all of the tasks you do for your business on a daily basis.  Group similar tasks together and give those tasks a name.  For example, if your daily tasks include posting status updates on your Facebook business page, tweeting tips to your Twitter followers, and chatting with people in a business specific LinkedIn group, categorize those tasks under a “Social Media” heading.  Once you have a clear idea of the universe of tasks you do on a regular basis, identify groups of tasks you do not enjoy or that you do not excel at, and consider whether these tasks can be outsourced to someone else. Even a lean starter can use resources like Fiverr and oDesk to get hourly short term and long term help at incredibly affordable rates.

But I was stunned to find that there were so many facets of each of these businesses that were still uncertain—even as basic as revenue stream and business model. As a young entrepreneur, this relieved me because it disproved my previous conviction that I needed to know every little component of my business forward and backward to reach any level of success.

I have learned that companies usually don’t have everything figured out, and that’s okay. They figure it out along the way, and the best entrepreneurs are those who are malleable enough to adapt to each situation and change quickly.

George Kembel, entrepreneur and co-founder of the Stanford d.school, is a design-thinking guru. His lessons are designed to help entrepreneurs move quickly, and adapt so that they can deal with situations intelligently as they come. We have traveled to seven countries so far, and Unreasonable at Sea has put on many workshops designed to teach these entrepreneurial university students a strong design-thinking methodology.

Are you ready to learn how to do it? I promise, it’s easy (only 5 steps) and will help you become a faster, more flexible entrepreneur.

Step 1: Empathy.

To get a feel for how you can fix a problem or make an impact, you have to put yourself in the user’s shoes. It’s not about what you think the problem is; it’s about going to the end user and understanding his or her experience in regards to the problem your product or service is trying to solve. Empathy is not easy. It often requires many different interviews and constantly rephrasing questions so that you can extract the most information out of each question. Good empathy requires you to dig deeper into user experience testing.

Step 2: Define.

There are three things in particular that need to be defined when it comes to problem solving: the user, the need, and the insight gained from the empathy work. When defining the user, try to get as specific (and emotional) as possible. Who is the one user that will benefit THE MOST from your product or service? I find this to be the hardest part, and yet, most important. Knowing this will help you solidify your revenue stream(s).

The need refers to the problem you are trying to solve. This goes hand in hand with the insight gathered from your empathy-driven research. Accurately defining the need based on the interviews conducted with different users is the basis for your business—because if you try to solve the wrong problem for your user, he or she probably won’t buy it.

The insight is simply the critical feedback gathered during empathy work that explains why the need (as previously stated) exists. The more empathy work you do, the more obvious the insight you gain will become.

Putting them together makes up a define statement that looks like this:

___________ (user) needs a way to _____________ (need) because ______________(insight).

Here’s an example:

The young, frustrated Bostonian daily commuter  (user) needs a way to  beat the traffic in a comfortable, cost effective way (need), because  the traffic is considered unbearable by 86% of daily commuters in Boston, who would rather spend time at home or at work, but don’t have too much disposable income for a better solution (insight).

 Step 3: Ideate.

According to Kembel, ideation is simply generating many unexpected ways to solve a problem you’ve defined. When you ideate, try to get as many people as possible to contribute. And there are several rules which lead to the best ideas:

1. Defer judgment. Any idea is a good idea; even if it is crazy, it might lead to some amazing ideas. In fact, the best ideas always lie close to the wildest ideas. So, go crazy and don’t underestimate wild ideas.
2. Be visual. Sometimes the mere misinterpretations of drawings can lead to strikes of genius. Build on ideas. Don’t be afraid to “steal” ideas and make them better.
3. Finally, come up with lots and lots of ideas. Afterall, “The best way to get a good idea is to get a lot of ideas.” (Linus Pauling, Nobel Prize Chemist).

So get the sticky notes. Ready, set, go!

Step 4: Prototype.

A prototype is a low-resolution experiment to test an idea with the goal of learning as quickly as possible. The reasoning behind learning quickly is that the further you are along the project timeline, the higher the cost of an error. So if you fail and learn early on, the cost associated from making the mistake is rather low.

So to set up an effective prototype, you need to create an experience that best resembles the end product or service for the end user. The more times you test your prototype, the more understanding you will gain and the more validity your insights will obviously have.

But it’s easier said than done. So here is an example to help establish a better understanding for what a good prototype might look like:

Let’s say you want to start a bike rental company in your city. The people are active, the weather is always nice, and the daily commuters don’t have a good way to get around. You think a bike rental company would be the perfect solution. Before spending $50,000 to make this happen, all you have to do is spend $50 to put up posters around town to advertise your business as if it already existed.

And finally,

Step 5: Test.

Put your prototype to work. Watch, take notes, be open to new ideas, and be ready to adapt your prototype. Be confident and change your business based off of what you see working (and not working).

To test the bike rental prototype, see how many people call or how many tabs are pulled off at the bottom of the page. This is a cheap, quick way to learn if people are as interested in a bike rental service as you assume they would be. If you are overwhelmed with phone calls, that might give you the confidence to drop everything else and get started.  If you see that they are not interested, the cost of error is low, and you saved yourself $50k.

The entrepreneurs that have been selected to be a part of a sailing accelerator to take their businesses to new frontiers do not have everything figured out. This observation was huge for me. I realize that I might never have things completely figured out because change in business is constant. And so, the best trait I could have as an entrepreneur is the power to change. Adapt. Be flexible. And finally, understand and trust in the power of design thinking.

It’ll change your business forever.