Why Saying “Thank You” Is Good Business

IRSAmericans are the most generous people on the planet. Arthur Brooks, a public administration Professor at Syracuse University and author of, Who Really Cares: America’s Charity Divide, cites the following facts: “Americans per capita individually give about three and a half times more money per year, than the French per capita. Seven times more than the Germans and 14 times more than the Italians. The fact is that Americans give more than the citizens of any other country.”

Several factors account for Americans’ generosity, including its citizens’ spirituality and their belief that individuals, not governments should assist those in need. Another significant, yet non-altruistic factor is America’s tax system, which incentivizes charitable giving.

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Create An Industry Alliance: Entrepreneurs Need Friends On The Startup Playground

HippolyteIn early December of 1818, Jose de la Guerra devised a brilliant plan to thwart the French pirate Hippolyte de Bouchard who was lurking off the coast of Santa Barbara, contemplating an attack. Even though the Santa Barbara garrison was outmanned nearly six to one, Commandant de la Guerra tricked de Bouchard into believing that his force was formidable by repeatedly marching his small cavalry over a ridge that could be readily seen from the pirate’s ship.

Each time the men crossed the hill and descended out of view, they changed clothing, mounted different horses and then paraded again before the pirates. This ruse caused the pirates to assume that each corps of horsemen was a different contingent of soldiers streaming into the Presidio. Believing he was outnumbered, Hippolyte aborted his plan to sack Santa Barbara and proceeded south where he subsequently pillaged San Juan Capistrano.

Entrepreneurs can emulate de la Guerra’s strategy and make their adVenture appear far larger than reality and thus increasing its influence and market reach while discouraging competitive threats by creating an industry alliance.

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Jedi Mind Tricks That Can Drive Sales At Your Startup

Obi Wan KenobiIn the first Star Wars film, released in 1977, the seemingly humble Ben Kenobi is confronted by a squad of Imperial Storm Troopers. With a slight hand gesture and a confident stare, he convinces the Storm Troopers that there is no reason to search his vehicle and to leave his droids unmolested. The audience later learns that “Ben” is actually Jedi Master Obi Wan Kenobi and the persuasion technique he deployed is called the “Force.”

Unfortunately, non-fictional entrepreneurs cannot draw upon the Force. However, there are Jedi mind tricks that really do work – words, techniques and patterns of behavior that cause people to act in a highly predictable manner. Just like the Storm Troopers, victims of these mind tricks are usually unaware of the degree to which they have been manipulated.

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Free Advice, Worth Half The Price – Properly Compensating Entrepreneurial AddVisors

CiceroAdvice is judged by results, not by intentions.”
Marcus Tullius Cicero, Roman Lawyer and Statesman, 106 BC43 BC

With slight modification, Cicero’s astute quote aptly applies to the entrepreneurial world:
Startup advice should be judged by results, not by intentions.”

One way to accomplish this goal is to compensate your addVisors with equity and clearly specify the tasks that they must perform in order to earn their remuneration. If their advice proves sage and the company’s value increases, then they will be duly rewarded. If the company fails, their advice is free, as it should be.

The key covenants to consider when crafting your addVisory agreements include:

  • Equity Only – ensures the addVisor’s and Company’s interests are aligned
  • Specificity – clearly state the tasks to be performed and the minimum time requirement
  • Restricted Stock – ideal form of equity, with no detrimental impact on your adVenture
  • Cashless Loan – allows the addVisor to have beneficial ownership of stock, with no cash outlay
  • Vesting – reduces your risk of parting with equity and not receiving requisite value
  • Out Clause – motivates both parties to keep each other happy and allows either party to quickly terminate an ill-fated relationship
  • Short Term – reflects the relatively brief duration of most addVisor relationships

Each of these issues is discussed in greater depth in the following section.

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Old Gray Advice

old GrayDuring the early part of the 20th century, New York City’s Tin Pan Alley district was the epicenter of American popular music. During its heyday, Tin Pan Alley musicians devised an inexpensive yet effective method to obtain free, expert advice – they played new songs to elderly doormen and solicited their opinions. If the doormen could hum or whistle the tune after hearing it once or twice, then it was deemed suitably catchy for publication.

Ultimately, this simple marketing litmus test became known by the derisive term, the “Old Gray Whistle Test” (OGWT), as many of the doormen and other pro bono musical advisors used by Tin Pan Alley musicians had gray hair.

The OGWT is an interesting historical anecdote, but what can modern-day entrepreneurs learn from elderly doormen and hackneyed musicians from nearly one hundred years ago?

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