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Sallie Krawcheck, Steve Schwarzman, and 5 other successful entrepreneurs share the No. 1 lesson they learned from failing

Sallie KrawcheckREUTERS/Keith BedfordSallie Krawcheck, former head of Bank of America’s wealth and asset management division and the current CEO and cofounder of Ellevest.

Before I wrote my first book, I went to half a dozen writers conferences trying to learn how to “land the book deal.”

Most of the advice was pretty generic, save for one person’s.

The author was no J.K. Rowling, but she had moderate success and was seen by us in the audience as the person to aspire to.

As I listened intently, she described how the most boring part of her story was actually getting the book deal — far more interesting were all the rejections she confronted along the way.

Hearing her describe her painful rejections inspired me to go ahead with my own ambitions — if she could continually persevere in the face of numerous obstacles, what was to stop me?

No doubt, we learn far more about ourselves and our potential when we face failures. In fact, some CEOs have told me that they won’t even look at senior candidates who haven’t failed at least once in their careers. Eric Ries, author of “The Lean Startup,” which has become a bible of sorts for the startup entrepreneur, describes the acumen he honed after failing several times.

So what exactly do we learn from failing? I asked several highly successful people that question for my podcast, Radiate, and here are the seven best. (Click on their names to hear them talk about it in their own words):

1. Sallie Krawcheck learned how to redefine success. When she got fired from her second big Wall Street job, Krawcheck reassessed her career path and became an entrepreneur. She’s far more fulfilled today than she ever was in banking — even though the pay admittedly was nicer before. “Do you define yourself by the amount of money you make?” she said. “Do you define yourself by whether you have a corporate jet? I define myself by impact… What impact do I want to have … earlier in my career when you’re an investment banking analyst it’s hard to have an impact.”

2. George Zimmer learned his business model didn’t work. Ten years into his company, the former Men’s Wearhouse CEO was near bankruptcy — he traversed the country looking for half a million dollars in funds. Luckily, at the very end, his mother bailed out the business, but Zimmer says he learned a very valuable lesson: His business model wasn’t working. “It was from that problem that we actually redesigned the economic model in the mid-1980s and adopted everyday low pricing,” Zimmer said. Decades later, he was generating billions in sales.

3. Steve Schwarzman learned to speak his mind. Few people are as successful as private equity billionaire Schwarzman, but at one point, he was a high school senior like the rest of us applying for college admission. That’s about where the similarities end. When Schwarzman was rejected by Harvard, he did what almost none of us would do — called the dean to tell him he made a mistake. “I thought that they had made an error, or if they hadn’t made an error, at least they weren’t satisfying my objective,” he said. Schwarzman went on to Yale, and Harvard later felt that dull pang of regret.

4. Jay Margolis learned the importance of staying true to yourself. The retail veteran behind brands like Reebok, Esprit, Tommy Hilfiger, and others learned how important it is for the corporate culture to fit you. From day one, he recalls how he didn’t feel at home at Hilfiger. “Our values were different in terms of how we saw running a business and caring about what gets done and just how you work, and there were people in the company that I just wouldn’t have hired,” he said. Sure enough, it wasn’t long before he was let go. “You have to live your values. The company has to live your values. You have to have people who live the values.”

5. Andrea Jung learned it’s not about the title but doing something you love. When Jung was initially passed over for the CEO job at Avon, she didn’t leave. Instead, she worked her butt off for her rival. “I never woke up saying, I have to be the CEO. That wasn’t my end goal,” Jung said. “I guess really my end goal was to do work that I loved, to be able to contribute at a level and do work that I’m passionate about. And so I made the decision to stay.” It turned out staying was the right decision — the CEO abruptly left and Jung ended up with the top job anyway.

6. Trevor Burgess learned the importance of thick skin. When Burgess came out in college to his fraternity brothers, one called him a “renounced sodomite.” The backlash was painful and lonely. The bank CEO says, looking back, that the ugly episode helped him learn how to deal with rejection and criticism early on. “Going through that sort of experience, it taught me a couple of things,” he said. “One, that I needed to have really thick skin if I was going to survive, in the business world especially. And number two is that I did have to be authentic. I needed to be myself completely if I was going to be successful.”

7. Alan Patricof learned that the world is a bigger place than New York City. Patricof is a legend in the venture capital world, but even he makes mistakes. One particularly painful one is his decision to turn down investing in Starbucks. “I said, ‘Are you crazy? I mean, we’ve got coffee shops in New York. We’ve got two in every single block. They just call them luncheonettes or coffee shops. Why in the world do we need another coffee shop?'” Patricof said. “I didn’t understand the culture and what Starbucks was really about. It wasn’t a coffee shop. It was really a way of life … we suffer from thinking that since we have it in New York or it won’t work in New York that it won’t work some other place. That’s a discipline we keep trying to improve.”

Read the original article on Inc.. Copyright 2016. Follow Inc. on Twitter.

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Herjavec GroupArticle cover image
Robert Herjavec

Robert HerjavecInfluencer

Shark on ABC’s Shark Tank, Founder of Herjavec Group, Bestselling Author, Race Car Driver

My Top Ten Tips for Entrepreneurs

In this series of posts, Influencers and members share their advice for entrepreneurs. Read all the posts here and write your own (use the hashtag #mystartupstory in the body of your post), or upload a SlideShare.

In honor of small business Saturday I wanted to share my top 10 tips for budding entrepreneurs. This list was first published by CBC News and I often refer back to it when I’m meeting with new ventures or training our sales team at Herjavec Group. I hope it helps jump start your weekend—and put you on the right path to your own entrepreneurial success…

1. Believe in the business — and yourself

There are so many people that will say, ‘No — bad idea, it’s never going to work’. You have to have a senseless belief in your idea and yourself – almost to the point of being delusional. Remember that everyone has advice but no one knows what you have to go through to start, grow and scale a business until they live it! Talk is cheap, but action speaks volumes.

I often tell the story of the ancient general who took his troops to battle and when they got to the foreign shore, he burned all the ships so there would be no option of retreating. That is the kind of belief you need. There’s no going back.

2. Test before you jump in

Don’t ask your mom, your wife, your friends, your barber what they think — those are opinions (and often biased one’s at that!). Test the idea with the only people who really matter: the ones who are going to cut you a cheque for it. Call on some potential clients and see if they will buy whatever it is you’re selling.

3. Everyone lies

Some people will lie to you because they mean to. Others will do it to tell you what you want to hear. Either way, test everything you are told. If someone tells you they are going to invest, get a date. And if the date passes, make sure your spider senses are tingling. If a client tells you he is giving you the order, ask him if it is in procurement yet; if not, ask him if he minds if you call the purchaser yourself. Test what people tell you. They don’t always mean to lie to you, but they do lie.

4. Bring a compass

“It’s awkward when you have to eat your friends.”

That’s a cute saying I saw a long time ago, but it’s very true. When you’re starting out, you have to realize that it is going to be hard and then it will get worse…far worse than you think. Be prepared to survive the worst situation you can think of — and then assume that things will still get even worse than that.

Be prepared — it’s much better to have a compass to get out of the woods (just in case) than to have to eat your friends to survive.

5. If they can’t catch you, they can’t overtake you

Go fast — really fast. The elephant can’t catch a running mouse, but he sure can crush him when the mouse is standing still! When you’re small, you’ve got to be faster than the competition. Be nimble, be agile, be responsive. Learn from your customers. As you grow be prepared for the new entrants that want to take you down and ask yourself how you can maintain the sense of agility that led to your initial success.

6. Train for a marathon

This is where I completely contradict myself, because diligence is so important. Once you find a good opportunity, go slow and check and double-check everything. Business is a sprint until you find an opportunity, then it requires the patience of a marathon runner. I know this is hard and trust me, I am not a marathoner — but I have run two of them just to reinforce this point to myself.

7. Hunt for your dinner

No matter how full and fat you get, don’t stop looking for opportunities. You can never be satisfied as an entrepreneur, and the basis of any successful, growing business is new clients. Make sure your company always has the attitude of going out and hunting for its dinner. We don’t pay our salespeople for renewals at Herjavec Group, that’s a customer service job and not a sales job. Sales people should be hunters.

8. There is no work/life balance

Your business is a living, breathing thing, and it has to be fed and grow to survive. There is no balance in your life when your business is in trouble. If you are under the illusion that you can start a business and run it at your life’s schedule, you are mistaken. The business is like a starving puppy — when it needs to eat, then it needs to eat regardless of what you have going on personally.

9. Being committed to business is hard

The reason so few companies and people make it: It’s not easy.

Be honest with yourself. What price are you willing to pay to make the business work and be successful? Would you sacrifice your time, your family, your friends, your golf game, your entire social life? I am not advocating that you should, but you have to ask yourself if you are prepared to.

10. It’s all about the approach

Work hard…have fun…be nice…play fair…dream big.

We only get one chance at this life. If you’re going to play this game, play it to win.

To your success,

Robert

Robert Herjavec (@robertherjavec) is the Founder and CEO of Herjavec Group and a Shark on ABC’s Shark Tank.

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Successful Entrepreneurs Do One Thing Really Well

dick costolo twitter

Eric Gaillard/Reuters

Twitter, Instagram, and shopping site Polyvore all have one important quality in common. They do one thing extremely well.

Zeroing in on one idea and executing it exceptionally is the key to entrepreneurial success, argues Daniel Roberts in “Zoom: Surprising Ways to Supercharge Your Career.” You don’t need a complex, multifaceted idea to succeed in today’s market, Roberts argues. Just pick one thing, and do it better than everyone else.

“These days many of the buzziest startups are brilliantly basic in concept,” he writes. “Whether you’ve come up with a completely revolutionary idea or you’re building upon a preexisting one, if it’s clear and addictive it will take off with users.”

Here’s a look at how the founders of Twitter, Instagram, and Polyvore found their one thing and made it work:

Make the business easy to understand.

The initial idea for Twitter was incredibly simple: create a way for people to share brief “status” updates about what they happened to be doing. When the company’s founders first rolled out the service internally, employees loved it. “It was fun, simple, and friendly,” Roberts writes. “And it took only a moment to understand how it worked.” He argues that Twitter has succeeded in large part because it never lost sight of that simple starting principle, even as it began to monetize its services and add new features. “If an idea is clever enough — simple, clean, and addictive, like Twitter — it can weather other problems that would normally bring a company down,” Roberts writes.

Strip the bells and whistles.

Before it was called Instagram, the founders had named it Burbn. Back then, it was supposed to be a location-based photo sharing app (a “mashup” of Foursquare and Flickr, as Roberts puts it). That idea garnered some interest from backers but failed to catch on after its initial release. So co-founders Kevin Systrom and Mike Krieger decided to strip the app of all but one part — photo sharing. “Burbn had too many different features,” writes Roberts. “What would be a hit, they knew, was something simple that did one thing.” Sure enough, the night the app relaunched as Instagram in October 2010 the servers crashed within two hours from the flood of traffic.

Focus on what you do best.

When Jessica Lee first became CEO of Polyvore, the popular online shopping site, she decided that the company needed some serious streamlining. She began to cut extraneous features, minimize projects, and sent out a company-wide note asking staff to “identify what is most impactful to the company. Then figure out what to cut.” Simplicity was Lee’s obsession, Roberts writes. She wanted to create a smooth, simple customer experience. “We really try to focus,” she told Roberts, “because at the end of the day you’re going to be remembered for one thing.”

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Ben Horowitz warns startups: You’re worth less today, and you need to be OK with that

Andreessen Horowitz Partner Ben Horowitz says the fundraising environment for startups is particularly tough today. He says investors are increasingly pushing for more equity for less capital, and founders need to be OK with that.Andreessen Horowitz Partner Ben Horowitz says the fundraising environment for startups is particularly tough today. He says investors are increasingly pushing for more equity for less capital, and founders need to be OK with that.

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Contributing writer- Silicon Valley Business Journal

Legendary venture capitalist Ben Horowitz (who makes up the second half of Andreessen Horowitz) has a particularly bleak message for entrepreneurs raising money in the Valley right now: You’re probably worth less to investors today than you were the last time you raised money.

“If you are burning cash and running out of money, you are going to have to swallow your pride, face reality and raise money even if it hurts,” Horowitz wrote in a blog entry Tuesday. “Hoping that the fundraising climate will change before you die is a bad strategy because a dwindling cash balance will make it even more difficult to raise money than it already is, so even in a steady climate, your prospects will dim. You need to figure out how to stop the bleeding, as it is too late to prevent it from starting. Eating s— is horrible, but is far better than suicide.”

He’s partly talking to founders raising an A or B round—entrepreneurs who’ve been to the table at least once before, and raised earlier rounds at a particularly high valuation. The fundraising climate is tougher now, he says. Investors have more leverage and they’re increasingly pushing founders to accept “down rounds,” defined as funding that values their company for less than they were worth in a previous round.

“After, God willing, you successfully raise your round and it’s a down round or a disappointing round, you will need to explain things to your company,” Horowitz writes. “The best thing to do is to tell the truth. Yes, we did a down round. Yes, that kind of sucks. But no, it’s not the end of the world.”

Horowitz knows the feeling.

Twelve years ago, he and Marc Andreessen were entrepreneurs themselves, running a red-hot startup called Loudcloud. In June 2000, they raised $120 million from investors, at an $820 million valuation. By the end of the year, the dot-com bubble was popping fast, and they couldn’t raise another round. To stay afloat, they were forced to take the company public in 2001, at a $560 million valuation.

Describing that experience, Horowitz writes, “In some sense, you are like the captain of the Titanic. Had he not had the experience of being a ship captain for 25 years and never hit an iceberg, he would have seen the iceberg. Had you not had the experience of raising your last round so easily, you might have seen this round coming. But now is not the time to worry about that. Now is the time to make sure that your lifeboats are in order.”

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During the dot-com bust, as the online advertising market dried up and the Web companies that had been buying most of the ad space went bankrupt, the people who start and fund companies in Silicon Valley began questioning whether Web sites could survive on advertising alone.

That moment of doubt didn’t last. The ad market revived and free Web services blossomed. But now, as advertising shrinks once again, entrepreneurs and venture capitalists are desperately seeking new sources of revenue.

Does this mean the advertising model is no longer a viable one for new Web start-ups?

Advertising requires an audience, and that takes a few years to build. Web start-ups struggle with the question of whether to sacrifice revenue for several years, build a huge audience and then sell them ads, as YouTube did, or find an alternative revenue stream that will bring in money from Day One.

The venture capitalists that back those start-ups have different philosophies, but as a group they have grown much more cautious about backing companies that have no immediate way to bring in some revenue.

Roger Lee, a general partner at Battery Ventures, said he looks for Web companies with multiple revenue streams. Even if some of a site’s services are free, most of the start-ups in his portfolio also have subscription products, premium services or an e-commerce element.

Read the full article here

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Here is a interesting article from GigaOm.

“Entrepreneurs often focus so much on running their companies that they don’t have time to worry about events in the outside world. Normally, this is how it should be, but the credit crisis slamming Wall Street right now is an exception, and it has deep implications for any startup.”

Click here to read full article

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Many members of the Web 2.0 generation of internet companies have so far produced little in the way of revenue, despite bringing about some significant changes in online behaviour, according to some of the entrepreneurs and financiers behind the movement.

The shortage of revenue among social networks, blogs and other “social media” sites that put user-generated content and communications at their core has persisted despite more than four years of experimentation aimed at turning such sites into money-makers. Together with the US economic downturn and a shortage of initial public offerings, the failure has damped the mood in internet start-up circles.

Read more here.

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