Five Business Tips from a Top Entrepreneur
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Financial advisors are classic entrepreneurs, typically starting a business from scratch with the goal of achieving financial security for themselves and their families. That’s why lessons from entrepreneurs with a pattern of demonstrated success – even outside the financial industry – are tremendously helpful.
For every Mark Zuckerberg, Steve Jobs or Mark Cuban, whose names get trumpeted in headlines, there are dozens of low-key entrepreneurs who have created tremendous value for their customers and their shareholders and amassed substantial wealth along the way.
In early February, I attended an IT conference in Miami Beach, where I had the opportunity to hear Terry Matthews, who is one such overlooked success story:
- In 1972, he co-founded a company that was bought in 1985 by British Telecom .
- A year later, Matthews founded Newbridge Networks, purchased in 2000 for $7 billion by Alcatel.
- Most impressive of all, Matthews has been involved with 89 tech startups, a remarkable 83 of which have been successful – and is still active in starting new ventures.
In his talk, Matthews outlined his 10-step formula for new ventures. Here are the five key elements that he looks for when getting involved in start-ups:
Step 1: Focus on solutions to big problems
In Matthews’ experience, most start-ups fail because the founders fall in love with an idea. Once launched, founders become invested in the idea, ignoring bad news and continuing on even when it’s clear that they’re on a sinking ship.
That doesn’t mean you should give up if you don’t see immediate success – patience is essential in any significant new initiative – but Matthews preached the importance of connecting with customers to dig deep and understand their big problems, what he called being solution-driven, rather than idea-driven.
In Matthews’ words: “If you’re really delivering what customers are asking for and solving their problems better than anyone else, you’ve driven most of the risk out of new ventures. When you’re tackling real problems, you can afford to be patient.”
To address big problems, you don’t need to dramatically depart from the core work you already do. I recently wrote about an advisor who saw a dramatic spike in referrals, stemming from calls last fall to retired clients suggesting that they meet to prepare a detailed monthly cash flow forecast of money coming in compared to their expenses.
Given low interest rates and uncertain equity markets, it turns out that this was a top-of-mind problem for many of his older clients. Even clients who had absolutely nothing to worry about walked away relieved to have confirmation that their situation was well in hand and that they could proceed with plans to buy a new car, go to Florida for three months, make a donation to their favorite charity or help grandchildren with education or a new home.
By addressing a big problem for retirees, this advisor created peace of mind – and also positive word-of-mouth in the network in which his older clients travel, leading to as many referrals in the three months after he initiated these meetings as he’d seen in the previous three years.
To read more details about how this advisor did this, click here.