The late 90s brought us nonsensical (too early, too fast) flops for its times like Boo.com, Geocities, Kozmo, Pets.com, Flooz.com, and the starts of the giants of today like Google, Amazon, eBay, and Booking Holdings.  

Before I knew it, I was starting my first Internet company that provided an internal website search tool provider for large community websites called vortals (one of those old terms of the past that are hardly heard of nowadays). 

We had a great start with that company, with a few clients piloting the technology. We were gaining traction among retail investors and gaining recognition in community website circles of the time. Then, as we turned the corner around Y2K and AOL concluded their giant merger with Time Warner in Jan 2000, we felt we were at a great place. We had investors calling us, and we were picky and selective about whom we brought on board. The plan was to hold off until we increased our MRR to the next level and then go for the next fundraising round. We had a low but growing burn rate, and many of the pilots by our clients will be turning into large-paying contracts. So 9-12 month runway felt like more than enough time. 

Then things changed so quickly and drastically. First, Microsoft stock (mainly due to an antitrust ruling) dropped, starting a significant down trajectory for Nasdaq, which was followed by back-to-back days of substantial drops in stock market indexes. Investor sentiment changed so quickly that it was hard for founders to grasp what might lie ahead. Venture Capital was no longer available, and the mindsets of everyone in the technology startup ecosystem drastically changed. 

What did that mean for us, as a technology solution provider startup in the changing landscape? 

• Investors were nowhere to be found, and we quickly realized we had to have a plan B for no funding coming in anytime soon. 
• Our clients’ investors were nowhere to be found, all our paying customers stopped paying, and none of the pilots we were expecting to go to paying contracts were going to happen.
• Our 9-12 runway, despite quick adjustments in spending, decreased to 4-5 months without existing clients paying.

What were the lessons learned for me as a founder from that experience?

• Things can change faster than you expect. Even as a small team, keeping up with changing market conditions will be challenging, so you must always be alert and ready to act. As a founder, you do not have the luxury of waiting a little longer to observe and execute change. 
• Your products and services are dispensable when your startup operates in the innovative and early adopter phase of a new market. So know and observe your beachhead very well. Do not depend on the continuation of existing revenue metrics. 
• Don’t wait to pivot. If you believe you need to pivot anything like your value proposition, business model, go to market strategy, then act quickly and move forward fast. Often pivots take longer than expected, and you need to give a buffer to your team for hitting milestones.
• Get good advice often, but make your own decisions. Having intelligent, experienced, and trustworthy advisors is always a critical success factor. However, in turbulent times, it is even more so. Therefore, make sure you have diverse sources of good advice. Smart money, early investors that have entrepreneurial experience, pays the most in these turbulent times. 
• Invest in your mental health with a combination of a personal support network (family, friends), short but frequent short “me times,” doing meditation as a part of your daily routine, and proactively trying to have a good sleep schedule. The last one is probably the hardest of all, given that you have more reasons that will keep you awake at night. However, some tips can at least improve your sleeping regimen and, in return, give you more ammunition to cope with stress. 

The current economic climate reminds me a lot of the Internet bubble burst times. Yet as founders and investors, we have the experience of the past that can help us guide better this time. Plus, startup and early-stage investment ecosystems are more robust and established. So, as a former (and always in the heart) founder, I chose to be an optimist. Afterall: 

“Nothing of any importance has ever been accomplished by a pessimist.” – Jack Welch.

The post Lessons Learned as a Founder From Surviving the Internet Crash of 2000 appeared first on Cross Ocean Ventures.

In our current state of technology the sheer volume of data is staggering and it’s easy to have your eyes glaze over from data overload. That’s why it pays to choose a few key metrics to concentrate on that will show you what’s working in your business and what isn’t.

Simply reviewing reports for the sake of looking at the numbers is pointless. You have to know how you are going to use the results of the reports to make changes to your business. And to do that, you have to know which reports are worth looking at.

Profit and loss statement

If you are not making money, you are losing money and this is the report that will tell you that right away. You can then dig deeper to see where exactly your revenue is coming from and which expenses are costing you the most and make decisions about what to spend more money on and where to cut back to save money.

Cash flow statement

Many companies don’t go out of business because they fail to make money. Rather, they fold because they run out of working capital. You can be making money and still find yourself in a situation where you don’t have any when you need it. If you ever find yourself in a situation where you don’t have any money in your accounts, you should scrutinize your cash flow statement and try to find a way to work things where you always have some money at your disposal.

Business activity reports

This is actually a category of reports and which ones are the important ones for your business will depend on that business.

If you have an online business, these could be your:

• website activity,
• paid traffic,
• search engine organic traffic,
• return visitors,
• time spent on the site,
• conversion rate, and
• shopping cart abandonment rate.

Basically, these include any report that helps you ascertain how well your business is making revenue. If you’re running an online business, Google Analytics is your friend.

For brick and mortar retailers, business activity reports could be more along the lines of customer interactions by your salespeople, demos given, walk-in traffic, results of customer satisfaction surveys, time-of-day activity or day-of-week activity.

Look at what you do, and the steps involved in turning a lead into a sale. Then choose the critical steps that will be success drivers of your sales and profitability and monitor those. It’s tempting to look at a whole bunch of different numbers, but don’t. Pick a few key metrics and monitor those.

Sales reports

Tracking your sales is a double edged sword. They are what drive your business, but because of this, they can also overshadow the rest of the reports that you should be monitoring. For monitoring sales, do it on a weekly, monthly, year-to-date and year-over-year basis. This is how you determine which promotions work best and your high and low periods throughout the year.

Use your history.

Once your business is around long enough to accrue some, historical data can be used as a measuring stick to determine how well you’re doing from one year to the next.

If you want to see how you did last month, don’t just compare your numbers to the previous month because the previous month could have been during a high or low season for you. Compare it to the same month from last year and ask yourself if there were more weekend days because that can sometimes make a difference.

Let’s say you only cater to other businesses and therefore only do business on weekdays. There is a difference between a month that has 22 weekdays (a typical March) versus a month with only 20 weekdays (a typical February). There is a 10 percent difference in the amount of time available to do business and that could mean a 10 percent difference in sales between the two months, all else being equal.

Comparing different seasons and dates is also highly useful when looking at contracting and expanding your business.

With all the numbers flying at new business owners, it pays to have just a tiny bit of tunnel vision and look at only a few key indicators. Later, when you get more used to processing the endless streams of data, you can slowly introduce other metrics into your evaluations to give yourself a larger overall picture of your business.

The post Instead of Drowning in Data, Do This to Track Business Growth appeared first on Cross Ocean Ventures.

Just like a jigsaw puzzle, sometimes taking small pieces and putting them together to form something larger and coherent works with entrepreneurship, too.

Don’t take it from me, though. Take it from a man who is responsible for creating three different Fortune 500 companies that you’ve probably heard of: Waste Management, Blockbuster Video, and AutoNation.

His name isn’t quite as famous as some other legendary entrepreneurs, but Wayne Huizenga built multiple business empires by piecing together existing businesses.

Let’s see what we can learn from this master puzzle solver:

1. Inefficiency can be an entrepreneur’s best friend.

Huizenga started a trash collection company in Pompano Beach, Florida in 1962. Trash hauling struck Huizenga as the perfect business to start: relatively low overhead, a simple business model, and guaranteed repeat customers.

Over the years, Huizenga noted the trash hauling industry was highly fragmented. It was full of tiny, undercapitalized players that each had their own inefficiencies, from administration to truck purchasing. He exploited these inefficiencies by aggressively purchasing these small businesses and amalgamating them into one corporation that he took public in 1971: Waste Management Inc.

Rather than accruing debt, Huizenga performed his acquisitions via public company stock. Most of the former owners stayed on as managers, which helped create a robust infrastructure within the company, which he also diversified by investing in market trends that promised growth, like solid and hazardous waste, street cleaning, and international trash disposal.

Like a jigsaw puzzle, Huizenga pieced together hundreds of tiny entities into one giant business, which eventually earned $13 billion in revenue and more than $23 billion in market cap in 2015.

Although every business (theoretically) strives for efficiency, there can be massive inefficiency in an industry that has many unconsolidated players. Spot an industry like this and you could have yourself a nice little puzzle to put together for huge gain.

2. Forget your preconceived notions about an industry.

A colleague turned Huizenga onto a small video chain just getting started in Dallas in 1987 by the name of Blockbuster. At first, the business mogul balked at the thought of getting into the video rental business because he associated renting videos with seedy pornography shops. Once he saw the family friendly atmosphere and the dozens of people with cash in hand in the shops, he quickly changed his mind.

He put up $18 million for voting control of the young business, which had just finished building a $6 million distribution center to enable Blockbusters to pop up anywhere in little time. When Huizenga bought into Blockbuster, the company owned eight stores and 11 franchises. The next year, Blockbuster was the largest video rental chain in the world. In less than five years, the store count reached over 1,700 (including the United Kingdom and Canada).

You should never think you know an industry and what it’s all about. Having preconceived notions about an industry could lead you to miss a big opportunity. Always be open minded. And even if your preconceived notions are proven to be accurate, remember that that means you have an opportunity to disrupt that industry with something different.

3. Success is repeatable.

After escaping from Blockbuster, Huizenga went back to his original tactic of buying up tiny players in a fragmented market to form his third Fortune 500 company. This time it was the retail automotive industry. Using the same method as he did with Waste Management, he built a nationwide network of new and used car dealerships and rental car companies.

By 1999, AutoNation Inc. owned about 400 new-car dealerships, 40 used-card stores, and was operating nearly 4,000 rental car locations worldwide, making it the world’s number one auto retailer and one of the largest car rental service providers.

It was a different picture, but the puzzle pieces were pretty much the same as the first time. Even though, as an entrepreneur, you are likely drawn to trying new things, know when to stick to a winning formula.

Market inefficiencies can be the most lucrative opportunity you’ll ever come across as an entrepreneur. Like Huizenga, you just need to recognize the puzzle pieces and arrange them into a coherent picture of success.

The post How You Can Use Inefficiency to Build a Business Empire appeared first on Cross Ocean Ventures.

Firing someone never gets easier (unless you’re getting paid big bucks to yell “You’re fired!” at people). Even if you’re happy to see someone go, you know that by firing them you are putting them and possibly their family in a precarious position and that can be tough to swallow. Research done by the Journal of Vocational Behavior says unemployed people are twice as likely to suffer from psychological problems as employed people, so the danger is real.

Of course, the best time to fire someone is before you hire them, which means you should have a thorough process for recruiting and interviewing candidates so you only hire people who you don’t need to worry about firing later.

However, that is easier said than done. People who seem right for the job during the interview might turn out to be woefully inadequate once put to the test. Always dedicate time for hiring, and always be proactive, and remember the best time to fix your roof is when it is not raining.

If you find that you do need to fire someone because of a performance issue, a personality issue or an honesty issue, here are some ways you can put yourself into the right frame of mind for it.

This person deserves to move onto the next chapter of their life as quickly as possible.

If you have decided to fire someone, don’t put off doing it for any amount of time. Chances are that person isn’t going to have some kind of miraculous turnaround and make you change your mind. You are likely just postponing the inevitable. Most people don’t fire someone the first time they draw negative attention to themselves (unless it’s something truly egregious). You’ve likely already given this person a second or maybe even third chance. If things haven’t improved and there is no chance of this person getting promoted within your organization, then you should let that person get a head start on the next chapter of their life. The quicker they get started on their next job search, the better it will be for them.

As a leader, you have to look out for your company and your team before an individual.

The health of the organization comes before the career aspirations of any individual, even you. With that in mind, it should be much easier to let someone go if they’re not contributing to the health of the company. If you leave cancer in the body, it grows, and if you leave a problematic employee in your organization, the problems they create will grow.

It will help you demonstrate a culture of accountability.

If you have established yourself as a fair leader, your team will know that you did not make this decision lightly and your decision will emphasize the importance of accountability in the workplace.

Even those who disagree with your decision will respect your intentions of holding people accountable for their actions and performance at work.

According to a Workplace Accountability Study, 91 percent of respondents indicated that “improving the ability to hold others accountable in an effective way” was one of the top leadership development needs in their organizations. Firing someone is the most drastic way of holding someone accountable, but if it’s necessary and it does improve the organization (including people’s perception of the organization), then it is worth it.

You will be positively shaping the culture of your organization.

Your decision to go through with the firing will strengthen both honesty and performance in the workplace. It shows that consequences are real and that you don’t just put up with the status quo in your workplace if it goes against your corporate culture.

When it comes time to drop the ax (or do the deed if you prefer something less murderous), keep these guidelines in mind:

• Be firm and confident in your decision
• Be polite
• Don’t argue with the person
• Don’t patronize the person
• Stick to the facts about performance or honesty
• Know what you are going to say in advance
• Be prepared to deal with a potentially negative reaction

The decision to fire someone is usually not easy and the act of firing someone is even less easy, but by being prepared and looking at the good it will do for the organization and even the individual being fired, you will be able to put yourself in the proper mindset when it comes time to let someone go.

The post How to Mentally Prepare to Fire Your First Employee appeared first on Cross Ocean Ventures.

It should go without saying that giving back is a good thing. Every member of society benefits from the health of the community, and as members of a corporation, we should always be conscious of the power we have to bring about good in the world. Giving to the less fortunate is an admirable act.

However, like a lot of good deeds, corporate philanthropy doesn’t just benefit the recipients. It also benefits those who are giving. Make corporate giving a foundation of your business, and you’ll find that it can improve the morale of your employees and the health of your company.

The benefits of a giving lifestyle

We’ve already discussed the most obvious benefit: helping out those who need it most. However, there are other factors to consider when it comes to corporate giving:

• Your employees: Keeping your employees engaged in their work and passionate about what they do can sometimes be a challenge. Give employees a chance to be involved with charity work, and they will feel proud of their company and of themselves. This, in turn, can reinvigorate an employee in other areas of his or her work.
• Your brand: While your reputation is not the reason you give, it does matter to your audience. They want to do business with a company that cares about the broader community. A 2013 study by Cone Communications and Echo Global found that 91 percent of global consumers were likely to switch to a brand that supported a good cause, given similar price and quality. If you align your business goals with support for a cause, your customers will realize that you and your staff are about more than just selling.

How to incorporate it into your business

While the benefits of corporate giving may be clear, it might not be easy to see where it fits into the day-to-day duties of work life. But with a few simple guidelines, you should find it easy to fit charity into your business model and into the lives of your employees.

• Schedule a specific day and time when community-related items can be discussed. This way, it’s clearly defined as an integral part of your business, and it has the opportunity to become routine.
• When scheduling events, do so well in advance of the date, trying for off-hours or days when the workload is lighter than normal. Employees want to be involved, but they also don’t want to feel as if they’re sacrificing productive hours to do so. Carving out blocks of time dedicated to philanthropy means employees don’t have to feel conflicted about participating.
• Involve your staff directly. Getting your employees involved is crucial to boosting morale. There are a number of ways to do this. At our company, we divide employees into teams and let them choose an organization they think would be a worthy recipient. This gets employees involved on the ground floor and helps ensure that they care about the cause.

Put the money in the right place

There’s one more challenge facing companies when it comes to doing philanthropy right: choosing the right charities. Here are a few things to keep in mind when deciding on the right cause for your business:

• Keep it in line with your core values. Try to relate your charity work to what your business does. For instance, our company provides drug testing products and services; therefore, we focus our giving on causes that promote a drug-free lifestyle. Not only does this make it more likely for our employees to care about our cause, but it also helps our brand image in our target area.
• Talk to your team. It’s possible that you have employees with personal stories about how they were affected by misfortune. Give to causes that your employees have a personal connection with. They will be more passionate about helping others and will be proud to work for a company that cares about the same things they do.
• Think local. Improve your local community, and you’ll improve the lives of your employees. It also helps to bolster your image with the people who surround you.
• Support schools. It’s always good to look toward the future, and the people in school now are the innovators and business leaders of tomorrow. Supporting schools is supporting the future.
• Get the family involved. Group activities, like food drives, can be good ways to get employees’ families involved in charity work. This can increase the personal bond employees have with their work, and it enables everyone to get to know each other better.

Charity is always a good idea, but when it comes to corporate giving, it can also provide a way to improve your company’s bottom line. As long as you keep your employees engaged and pick the right causes, you can help your business and your community in one fell swoop.

Originally from Turkey, Zeynep Ilgaz and her husband immigrated to the United States with nothing but two suitcases, a love for each other, and a desire for entrepreneurship. They co-founded Confirm Biosciences, where Ilgaz serves as president. As the global leader in the field of lab and instant testing for drugs of abuse and health, Confirm Biosciences is committed to being on the cutting edge of offering new, service-oriented drug testing technologies.

The post How to Make Corporate Giving a Foundation That Strengthens Your Business appeared first on Cross Ocean Ventures.