3 Things Failing Miserably Teaches You About Leadership

Skip the painful process of falling flat on your face, and learn these important lessons from one CEO who has stumbled badly.

You've no doubt been told countless times to stop fearing failure and accept it as a growing experience and precondition of innovation and accomplishment. It's a popular mantra, but in a world filled with corporate CYA and zealous reputation management, examples of it in practice are pretty light on the ground. But there is one standout example: meet James Altucher.

A serial entrepreneur who has started 20 companies (17 of which failed), Altucher has built a massive following by admitting in detail all the incredible ways he's screwed up. But reading Altucher's work isn't all about reveling in another's missteps. He's also a generous giver of advice on what all that failing has taught him.

Take, for example, a recent in-depth answer he wrote to the question, "What is the most important thing you have learned about leadership?" on question-and-answer site Quora. In his response he once again admits his shortcomings. "They fired me as CEO. Then they fired me as a board member," he writes. "The reason? I was a bad leader. Here are some things I didn't know about my own company: I didn't know what our product did. I didn't know any of the clients. I didn't know how much money we made. I didn't know how much we lost. And I had crushes on the secretaries and maybe two or ten other employees."

But he doesn't stop there. Altucher also goes on to share what his failure actually taught him about leadership, offering up 10 lessons he took away from these experiences. That's handy as a practical illustration that all those touting the educational value of failure might be on to something, but better yet, it offers entrepreneurs hard-won knowledge without actually having to walk Altucher's painful path. Here are a few examples:

1. Yes, and...

Saying no is easy. Far more difficult than shooting down ideas is encouraging creativity and drawing out better ones. In order to do this you need to take a page from improv comediansand learn to tame your knee-jerk, "No!" response to innovative suggestions. You need to get better at fielding ideas and improving them. You need to develop the habit of responding with "Yes, and..." Altucher lays out his bullet-pointed suggestions for a better way to give constructive criticism:

• "Yes, and"
• List what's good
• How you would improve
• Figure out the vision that is the base of the idea that you are talking about.
• Connect the "Why" of what you are suggesting to the initial vision. Does it work better than the initial idea?
• Be open to the fact that you might be wrong. ALWAYS ALWAYS you might be wrong.

2. Be the Storyteller-in-Chief

There are limits to how many people any individual human can build meaningful connections with (your 600 Facebook friends notwithstanding). Altucher calls this the 30/150 rule: below 30 people you're a tribe; from 30 to 150 you can know of everyone by reputation at least; after 150 forget about personal connections entirely. So what ties together organizations as they grow past this 150-person barrier? Stories.

"We united with each other by telling stories," Altucher writes. "If two people believe in the same story they might be thousands of miles apart and total strangers but they still have a sense they can trust each other." Leaders need to leverage this truth by telling visionary stories such as "we are delivering the best service because... We are helping people in unique ways because... A good story, like any story ever told, starts with a problem, goes through the painful process of solving the problem, and has a solution that is better than anything ever seen before."

When you're past the point of listening to and taking care of every employee individually,telling these sorts of unifying stories is essential for a leader. "Companies live and die on this," Altucher insists.

3. Lead Yourself

Altucher isn't the only leadership expert who makes the incredibly essential but all-too-frequently overlooked point: You're unfit to lead others until you're pretty good at leading yourself. So before you develop lofty aspirations of guiding others, make sure you've done the necessary work on yourself.

"Before I can lead anyone I have to lead myself. I have to read. I have to try and improve one percent a week. I have a handful of interests and I have a lot of experience. I have to get better at the things I'm interested in. I have to understand more deeply the painful experiences I've had, I have to every day practice the health: physical emotional mental spiritual, that I suggest to everyone else," he writes.

What leadership lessons have you taken away from your failures?

From Inc. Magazine

5 Phrases Highly Effective Leaders Use

As the leader of a startup, you have to deal with a never-ending series of issues. Startup CEOs must motivate the rest of the team, establish a company culture, and find a way to keep everyone together.

When stepping into a leadership position, it's easy to become overwhelmed. To help, there are five phrases that you should repeat as often as possible. Use these phrases as a guideline in decision-making, and you'll become much more effective as a leader.

1. "I trust your judgment."

When your team members are facing hard decisions, there will be plenty of times that they come to you looking for a solution. While your natural tendency will be to tell your team what to do, it is better to let them make decisions themselves. It is your responsibility to help your team grow; if you always have the final say in everything, you prevent it from growing.

2. "I don't know."

As people step into leadership roles, there is pressure for them to act like they know everything. Many times, leaders will push an idea on their team or convince themselves that they have to know the answer to everything. This is a disastrous way to lead a company.

As a leader, you have to be the first one to admit that you do not know everything. Members of your team will feel scared that by admitting they're unsure of something they are doing something wrong. This not only prevents them from improving, but also builds a company culture that won't allow people to make mistakes. When you show that it's OK not to know the answer to everything, your team will have much better communication and trust.

3. "What did we learn from this?"

Being a leader is a roller coaster ride, especially in a startup. One day your company is booming and the next you're almost out of business. Mistakes are happening and many times your team is facing obstacles for the first time. When things go sour, it is your job to make sure your team is taking full advantages of its failures.

Instead of getting angry with team members, take a step back and ask your team what they've learned from their mistakes. Don't answer this question for them. Instead, give them time to think about what the root cause of the problem was, and how to prevent it the next time. When you do this, you not only prevent future mistakes, but you also keep your team motivated to take future risks.

4. "I'll take care of it."

The ideal situation for a leader is to recruit a team where every member is smarter than him/her. Then when faced with tough decisions, they can delegate to the best person on the team. With that said, there are times where you will be the only one on the team that can take care of a problem.

When these situations occur, you need to tell your team you'll handle the problem, and to do whatever it takes to execute. Startups are anything but stable, which is why as the leader you have to be the one person that everyone on the team can rely on. 

5. "We're all in this together."

There's a lot of advice for how leaders should overcome failures. There's not enough written about how you should also celebrate success. Being the leader of a company is a double-edged sword. When your company fails at something, fingers usually are pointing at you. Even worse, when your team succeeds, people will try to say it's because of you that your team won. This is one of worst beliefs a leader can have.

If you watch interviews of Steve Jobs, you'll notice how many times he attributes Apple's success to his team. While no one will make a movie about every employee at Apple, Jobs knew he would have never been successful without his team. When your team accomplishes something, remind them that they're the ones who got you to where you are. You win together and you fail together. That's how you build a great company.

From Business Insider

10 Pointers Every Young Entrepreneur Needs to Know

A young entrepreneur might run across a lot of articles offering advice for the new business owner. But how many articles are actually geared toward the young entrepreneur?

As a former young entrepreneur myself (now I'm 30), I’ve decided to share my insights from my past experiences -- all the types of things that I wish someone had passed on to me when I was first starting out.

1. Do what you love.

When I graduated from college I worked at a job that I didn’t like because it paid me well. I hated to go into work each day. I admit that entrepreneurs typically make the worst employees because they want to be out there growing their own enterprise. Figure out what you love and then become the best that there is at it.

Your passion for your product or service will keep you motivated and get you through the tough times. Yes, there will be challenging moments. But when you work on something that you actually care about (as opposed to just trying to make a quick buck), you'll probably be happy, have direction and fight as hard as you can to make this crazy idea of yours become a reality. 

2. Stay focused.

It’s awfully tempting to jump from project to project, especially when it seems as if a million opportunities are flying by. But don't become distracted from the big picture. Instead of working on multiple projects, stay on track and complete the task at hand. If you’re working on multiple projects, you can spread yourself too thin, which will have an effect on your performance, productivity and resources. Perfect that one thing instead of working on five so-so projects.

3. Exploit online resources.

The Internet is a gold mine of resources. For example, visit the site of the U.S. Small Business Administration for advice about writing business plans, legal considerations, loans and even local resources to help you get that startup off the ground. Other awesome online resources are the websites of SCORE, America’s Small Business Development Center, Bplans, VentureBeat and, of course, Entrepreneur.com.

4. Find a mentor.

Whether you turn to a local entrepreneur, a business leader or a weathered vet that you meet through LinkedIn, having a mentor is one of the best resources you can have. Not only might a mentor have experience (such as dealing with venture capitalists), he or she also could possess an extensive network and help you connect with the right people to make your startup a success.

Don’t be afraid to cold call or email a big name in the industry. Many of these big names like to help younger entrepreneurs as a way of giving back. I met my mentor when I was 12. He was the owner of a large carpet store. I was his paper boy. I delivered his paper in the perfect location every day for three months till one day I saw him. I asked him straight up, Will you be my mentor? He said yes. He’s still a mentor to me today along with many other people.

5. Take care of yourself. 

I was a young go-getter once. (At age 12 I started my first candy stand and had three at one point.) I know exactly how it is: You think that you're invincible. Here’s the breaking news: You’re not.

As an entrepreneur, you might find it easy to push aside healthy lifestyle essentials, such as getting exercise, eating a balanced diet and securing enough sleep. But what good will you be if you’re tired or your immune system if weak? Plus, exercise is a great way to relieve some stress.

Don’t forget to make time for yourself. You need to take a break from work or you might burn yourself out. I personally love to listen to books and have since I was a kid. I’m not very good at reading as I have attention deficit hyperactivity disorder so I listen to books. Find what works for you!

6. Define your market.

Failing to define the market is a common mistake of a lot of young entrepreneurs. Always remember to consider if your business plan makes sense for your market. If you're dreaming up a late-pizza delivery service, do you start it in a business district or a college town? There are a number of ways for you to try to define your market, such as by demographics or psychological factors.  

I always hear people in the fashion industry tell me that their world is a $1.2 trillion market. Technically they may be correct. But if your product is hipster pants, the market isn’t $1.2 trillion. How many hipsters are there in the world? How many of them would purchase your product on a yearly basis? 

7. Be able to explain your business at a whim.

You never know when you’ll have to explain your business. You could run into an investor in an elevator or end up making a sales pitch to a customer while out to eat. Always be ready to clearly and quickly state your mission, service and product or goals.

This is something I learned from Derek Anderson, the founder of Startup Grind, which hosts events for entrepreneurs. He took me to lunch about three years ago and asked me what I did and the business I was promoting. I really didn’t know how to answer. Since then I have refined my pitch so that when someone asks me what I do, I can tell them in five words or less. Practice your 5-second, 15-second and 1-minute pitch over and over. This will help you be able to explain your business to anyone out there in any situation.

8. Remember, you run a startup. 

Just because you secured some funding that doesn’t give you the right to act like you’re a rock star. A luxury home, an office with an actual shark tank or a really fast car are all just a big waste of money, especially in the beginning. Remember, you run a little-known startup (and you're not Richard Branson overseeing a large successful company). Be careful about managing your cash flow and make sure that you keep track of expenses. That's not being cheap. It’s being wise. You don’t want to burn through all your cash too early.

9. There are still rules.  

A major perk that comes with being an entrepreneur is that you’re the boss. You can make your own hours and develop your vision of a company. In short, you’re doing whatever you want. And it’s awesome. But there are some rules that all entrpereneurs have to follow like registering your business and paying taxes. These are just some of the not-so-much fun things you have to handle. If not, you’re going to be in just a little bit of trouble.

10. Know when to fold 'em.

Sure, I’ve had success running and selling several different companies, but do you know how many I’ve started and stopped because they weren’t taking off?  Tons. Some say 9 out of every 10 business fail within the first couple years. 

Don’t let your pride get in the way of closing your company. I learned this the hard way in college when I launched what became my first failure, Utefan. I knew that what I was doing wasn’t going to work or make money. I kept putting money into it and spending time on it. Eventually I had to give up my pride and stop. Know when to let go.

If you’re not familiar with the classic Kenny Rogers song “The Gambler,”then stop what you’re doing and check it out. It offers some of the best advice ever. Why? Just like any great gambler, you have to know when to fold 'em. Instead of continuing to work on a fledgling business, it’s best to walk away and reflect on what went wrong. It’s not going to be easy. But it’s inevitable. And you’ll take that lesson with on your next venture. 

From Entrepreneur

6 Simple Steps for Building Your Team's Skills

Use this framework to jump-start learning and development

You hired great people. But even the most talented, experienced employees need to develop skills so they can succeed in their current roles--and be ready to advance to the next level. The problem, of course, is that it's difficult to find time for learning and development when your company is busy focusing on "real work." In many organizations, learning falls to the bottom of the list, where it never gets addressed.

As a result, your people don't develop the skills they need to take on greater responsibilities, leaders can't delegate because "I'm the only one who knows how to do this" and everyone is frustrated.

How can you develop an approach for learning that isn't too time-consuming and doesn't break your budget? Recently I developed this framework for an organization whose leader needs to develop junior members while managing a challenging workload.

Step 1: Define skills thatyour team needs Get together with your leaders and managers (at the beginning of the year or periodically) to define needed skills in the following categories:

• Interpersonal skills (such as collaboration, listening,. . .)
• Technical skills (such as Microsoft Office, HTML, . . .)
• Professional skills (such as writing, facilitation, design, project management . . .)
• Conceptual skills (such as strategic planning, decision-making, leading a team, . . .)

Step 2: Identify skills that individual team members wantto develop (and/or that their managers think they should develop My firm does this every year as part of our performance management system. We ask employees what they want to learn, and ask their managers what they think their team members need to develop. Step 3: Organize and prioritize Once we've built our overall list (step 1) and understand employees' preferences (step 2), we decide which skills are a priority for our entire team, a function or a level. While some employees will develop their skills on an individual basis ("I'll attend a workshop to learn HTML 5 programming."), we also create a short list of learning topics we'll address as a firm. Step 4: Decide on learning methods A good learning plan goes beyond sending an employee to a class, and includes a mix of:

• Learning events (internal and external), such as: workshops, courses, conferences, seminars.
• Experiential learning, such as: work within role, special assignments, coordinated swaps, job shadowing.
• Mentoring/teaching (because teaching creates learning as well as shares knowledge), such as structured mentoring/coaching, buddies, common interest groups.
• Knowledge management, such as: best practice sharing, reference and reading materials, internal standards and documented processes.

Step 5: Develop a learning plan for six to 12 months Keep this simple--you don't want to overreach--but create a simple framework as follows:

• Methods
• Roles and responsibilities
• Timeline/calendar

Step 6: Lather, rinse, repeat Now that you've got the party started, build on your momentum by:

• Collecting periodic feedback from team members
• Revisiting your plan every quarter and adjust as needed

From Inc. Magazine

50 Tips for Starting Your Own Company

Starting your own business isn’t for the faint of heart. It’s stressful and pretty much demands your complete focus. On the plus side, it can also be a fulfilling experience professionally and personally.

Here are 50 tips on how to make your business come to life:

1. Do a self-inventory.

Not everyone has what it takes to start a company. That’s not to say that your idea is not brilliant. It just means that you may not have the personality traits to handle launching a company of your own.

Before investing any time or resources, evaluate yourself and see if you have some the typical traits of an entrepreneur. Are you motivated, able to adapt and confident? Are you resilient?  

2. Develop an idea.

Don’t just start a business because something is in vogue and you think commercializing it will make money. Develop a business concept that you're passionate about related to something that you have experience with. From there, come up with a product or service that you believe can enhance the people’s lives.

3. Test the plausibility.

Once you’ve settled on an idea, figure out how you can make it become a reality. Is the product or service something that people want or need? Can you make a profit selling it? Does the product work?  

4. Write a business plan.

A solid business plan will guide you going forward. It’s also needed for presenting your idea to potential investors. Your business plan should include a mission statement, a company summary, an executive summary, a service or product offerings, a description of a target market, financial projections and the cost of the operation. Learn about how to write a business plan at SBA.gov.

5. Identify your market.

Even though you may have detected some interest in your business, you need to do more homework. Assess the market, targeting the customers most likely to make a purchase. Perform a competitive assessment. 

6. Determine the costs.

Do additional research and find out the standard cost factors within this industry. Not only will this help you manage your business more effectively, investors will want to know this. 

7. Establish a budget.

Once you determine how much money you’ll have to work with, figure out how much it will take to develop your product or service and create a marketing plan.

8. Find the right investors.

You’re going to need some sort of funding to start off, whether from your savings, credit cards, loans, grants or venture capitalists. Find an investor who shares your passion, someone you believe you can work with.

9. Listen to investors.

Whether you like it, investors do have a say in your company. And you need to listen to their advice or suggestion. But that doesn’t mean you have to do what they tell you.

10. Set up a great support system.

You’re going to be investing a lot of time and resources into your new business venture. Be certain that your family is on board. They must be aware that this process will be challenging financially and emotionally.

11. Determine the legal structure.

Settle on which form of ownership is best for you: a sole proprietorship, a partnership, a limited liability company, a corporation, an S corporation, a nonprofit or a cooperative. Find out more at SBA.gov.

12. Select a business name.

Decide on a name that best suits your business. Then check to see if the domain name is available online, as well as if it’s free to use in your county, state and in the country. 

13. Register your business name.

If your proposed business name is available, register it with the county clerk, have it trademarked at the state and federal levels and secure a domain name.

14. Take advantage of free resources.

Numerous free resources can offer advice, training and assistance. SBA.gov is a great place to look at to find local resources.

15. Determine tax obligations.

Now it’s time to wrestle with the tax obligations. In the United States, four basic types of business taxes arise: income, self-employment, taxes for employees and excise taxes.

16. Secure permits and licenses.

According to NOLO, you’ll have to pick up a federal employment identification number (unless the company is a sole proprietorship or a limited liability company without employees.) Apply for state licenses. Pick up a local tax registration certificate. File for local permits, if required, such as a conditional use permit or zoning variance.

17. Buy insurance.

Make sure that you arrange for the proper insurance for your business. This will vary according to the type of business. If you’re working from home be sure that your homeowner’s insurance covers theft or damage to business assets, as well as liability for any business-related injuries.  

18. Set up the books.

Figure out if you’re using a cash or accrual system, determine the fiscal year for the business and set up a recordkeeping system.

19. Choose a business location.

Select a location that best fits the needs of your business, one that offers an opportunity for growth, the right level of competition and proximity to suppliers. It should also be accessible to customers.

20. Don’t worry about an office.

If you’re not making any revenue, then don't concern yourself with an office or warehouse ust yet.

21. A patent can wait.

Patents can cost thousands of dollars. Wait to pursue this route until you have a few customers paying the bills. A patent is less useful if you can't enforce it or have the money to see it through. 

22. Be flexible.

Chances are that your original idea will have to be modified. Being able to pivot and adapt to create what customers want will determine if your business will fail or succeed.

23. Share your ideas with friends and family.

Your nearest and dearest will most likely be the most honest with you about your business. Don’t hesitate to seek their advice and suggestions.

24. Ignore the naysayers.

At the same time, there’s a difference between constructive criticism and someone's quick jab projecting that your business will fail. Follow the example of French Internet mogul Xavier Niel and ignore them.

25. Don’t become angry.

If your idea is rejected by customers or investors, don't just succumb to anger. Find out what they didn’t like, make adjustments and go back to them when you’ve made the changes. There's the possibility that the timing was wrong as well.

26. Deliver the product or service fast.

Your business is a work in progress and if you launch your product or service quickly, you will be able to build a community of customers who can provide valuable feedback that can help you improve the offerings. In the words of LinkedIn founder Reid Hoffman, "If you're not embarrassed by your first product release, you've released too late

27. Offer new products or services.

If you already have customers, be sure to hold on to them by providing new products or services.

28. Be patient.

Always keep in mind that success won’t happen overnight. It’s going to take some time before you make a profit.

29. Overdeliver at first.

Once you land a new client, be sure to go above and beyond the call of duty for at least the first month. You’ll have this customer hooked from then on.

30. Blog all the time.

Don’t be ashamed to share both your triumphs and struggles. Customers will enjoy your honesty.

31. Avoid fights with partners

If you have disagreements with partners, then sever ties as soon as possible. In-house bickering will prevent you from focusing on growing the business.

32. Don’t worry about dilution.

So an investor has required a stake in the company. Recognize the fact that eventually at one point or another you'll have to give up some control of the business. Accept it and move on.

33. Hire a copywriter.

Unless you’re an excellent writer, hire a copywriter to compose emails for highly targeted customers. A copywriter will also prove handy for press releases and other pieces to spread brand awareness or provide business updates.

34. Prepare for meetings.

When preparing for a meeting with a client, read up on everything that’s available, steeping yourself in information about the industry, that firm's employees and its competition.

35. Don’t fear the competition.

Don’t bad-mouth the competition when talking to investors or customers. There’s no need to become an object of pity. In fact, talking in this manner might even point customers to a competitor who may offer a product or service that you don’t. Remember, when competition exists, there’s a market for your business. Use that knowledge as inspiration to outperform a rival.

36. Benefit from word-of-mouth.

Nothing beats some good old-fashioned word-of-mouth marketing. Let friends, family members and influencers in your field spread the word about your product or service.

37. Network.

Don’t be afraid to get out there and show your face to the public, whether at a conference or just being out and about with friend on a Friday night. But try to stay local because travel can dwindle your budget.

38. Provide outstanding customer service.

Interacting with people is a big part of the job. Your business may gain new customers because you made them feel important. For example, Zappos wasn’t the first online store to sell shoes, but the company perfected its customer-service department and won over shoppers.

39. Be sure your website functions.

Potential customers want to know as much about your business as possible and they should be able to quickly access that kind of information on your website.

40. Don’t be overly concerned by the economy.

Some of the best businesses have launched during a recession. In fact, half of the Fortune 500 companies listed in 2009 were founded during such times, according to the Ewing Marion Kauffman Foundation.

41. Make sure clients pay their bills.

Always be certain to receive payment for your products or services. Instead of being taken advantage of of, establish a time frame for payment. It also wouldn’t hurt to accept credit cards and have an online payment system set up.

42. Find the right employees.

Hire the right people for the job. Even though it's your business, you won't be skilled at every task, which is why you need qualified people to complete the work.

43. Assign responsibilities.

Eelegate attainable tasks to employees. This is all about effective management.

44. Know that honesty is the best policy.

If any issues with employees emerge, be sure that they are addressed. No one enjoys being talked about behind their back.

45. Remember that opposites attract.

Hire people with skills and personalities that are the opposite to yours. They’ll challenge you and will bring different skills and talents to the business that you don't.

46. Say goodbye to your social life.

You’re going to spend a lot of time devoted to the business. Even if you plan a night out, you may leave early because a lightbulb just went off. Hopefully those closest in your life will understand.

47. Recognize that you'll be the final person to be paid.

As the CEO, you’re the last to collect a check. That’s just how it works until there’s adequate revenue.

48. Arrive at a useful definition of success.

Just because your business hasn’t made you a millionaire (yet) doesn’t mean that your enterprise is a failure. If you’re able to make some sort of profit doing something that you’re passionate about, isn’t that a success story?

49. Realize when it's time to move on.

Failure is inevitable. If things aren’t working out and you’ve done all you can, then put aside your pride and close up shop. Something like this is not easy to accept. But it’s for the best.

50. Don’t just rely on the advice of others.

Despite my offering up all of these tips for you, perhaps the most important piece of advice is something learned the hard way: While many people may offer a startup assiistance, recognize that in the end you’re the person running the show and the one responsible for the company's success and failure. If you understand what worked and what didn’t, you’ll burnish the skills and knowledge to run your business. 

From Entrepreneur