Lessons From Accelerate With IBA 2019-20 Part Two

Our 2019-20 cohort just completed their Accelerate With IBA journey (for now), having pitched to a full house in Sydney.
We’re incredibly proud of every single one of them.
It’s a privilege to walk alongside great people as they change and refine their ideas for how they’ll create something remarkable.
In January we tailored the sessions based on people’s questions, whereas February was spent refining their presentations and strengthening their businesses.
Here are some of the lessons I took away from these blocks…

If You’re Not Well, Your Business Is Not Well
Personal wellbeing is often treated as trivial by motivated founders, with conversations about lack of sleep viewed as a badge of honour.
They type of person who runs themselves into the ground probably won’t be receptive to me saying “be kind to yourself and take a break”, so we’ll try a different approach:
If you are not well, your business is not well.
Your board should be pulling you up for mistreating a valuable asset (you).
Your stupidity is a threat to the business’s survival, and you can do serious damage to your physical and mental health.
It is inexcusable to mistreat yourself, no matter how “productive” you may feel.

Coaching with the GROW model
We had a guest speaker talk on the role of a coach.
She spoke about the GROW model:
·      Goals (what is the desired state?)
·      Reality (what are things like today?)
·      Options (what are our choices and tradeoffs?)
·      Way Forward (what are we committing to do next?)

I really like this terminology and structure for coaching sessions.
She also had a great quote about coaching that stuck with me:
“A coach’s job is to believe that the answers are already inside them (the other person)”.
You’re not telling them anything new, you’re showing them what’s already there.
If you want a great example of this in film, the scene with Thor and Odin from Thor Ragnarok is a great demonstration.

What we think we want, what we want and what we do are not the same
Nassim Nicholas Taleb talks about this difference when it comes to restaurants; we say we want to be able to hear our friends talk and want speedy service.
But where do we actually go for dinner?
The place with the long line, the packed dining room, knowing full well that it will be noisy and slow.
Sitting in a spacious empty restaurant is unappealing, despite it meeting our stated preference.

Patrick Lencioni talks about this in The Advantage regarding values.
Most leaders claim a set of values that are aspirational – we want them to be true (e.g. wanting to be a learning organisation).
They then live through a series of values that are accidental – we show these behaviours and preferences unconsciously (e.g. rewarding competition amongst colleagues).

This is also why we use customer interview questions that focus on past behaviours rather than future plans.
Everyone intends to donate more money to charity, but a more honest question is to ask about how much money a person donated last year.
Facts are harder to smudge than stated preferences.

Copyright doesn’t protect your idea, it protects the expression of your idea
This was an interesting phrase from our guest speakers at IP Australia.
Copyright doesn’t mean that nobody else can start a similar business to yours, but rather it means they can’t copy the exact details you’ve used.
The law is not designed to prevent competition, it’s there to prevent misrepresentation.
In other words, you can enforce copyright to prevent someone deceiving customers by pretending to be your brand, but you can’t stop them from making a better offer than yours.

Active Ingredients
The world of medicine gives us an interesting analogy about change: the active and inactive ingredient.
The active ingredient is the one that does the heavy lifting, while the inactive ingredients set the stage.
e.g. the paracetamol is responsible for the pain relief, whereas the rest of the powder ensures that it is digested at the right time and in the right way.
A customer might prefer a capsule to a pressed powder tablet, but this ultimately doesn’t matter too much so long as the active ingredient is delivered.
If you’re a service provider who wants to change a customer’s behaviour, then you need to have an opinion on what “active ingredients” are responsible for those changes.
Which parts of your product/service/advice do the heavy lifting and can’t be easily replaced?
Which parts are inactive and are just there to make the process smoother?

Prescriptions
Once you know your active ingredients and can read a patient/customer, your job becomes about making great prescriptions.
For example, there are 20-30 business books that I’d rate as 5-stars, and I often buy for other people.
I’m learning how to make more relevant prescriptions of these books – which book at which time for which person for whichever reason.
A $15 book, at the right time and with the right introduction, could solve an enormous problem, and yet be totally unhelpful for their friend or colleague.
The question is, do you have a good system for making these sorts of prescriptions?

Accountability Mechanisms
Once you’ve made a great prescription, you’ll need to make sure your patient/customer actually takes the active ingredient.
Without an accountability mechanism, I bet that life will get in the way and the habit falls apart.
An accountability mechanism might be a call, text, email, app, follow up meeting – anything that nudges or reminds them of their task.
Whether you believe in carrots or sticks is up to you, it might change based on the customer and their needs, but doing nothing is a recipe for failure.

Most pitches could use 25% fewer facts and 25% more emotion
Founders often default to using facts and product details in their pitches.
On behalf of audiences everywhere:
We don’t find these very interesting.
We love stories, examples, case studies, emotions.
We love transformations and surprises, before and afters.
If you try to use 25% fewer facts and 25% more emotions (this could be yours, your customer’s or your beneficiary’s), you’ll be on the right track.

Buzzwords need to be followed by “such as…”
I am constantly campaigning against buzzwords and corporate jargon, despite writing about “Value Propositions” and “Strategy”.
The difference is that I always follow these up with examples;
Value Propositions are why people buy Red Bull without knowing what it tastes like, or why they buy Louis Vuitton bags– because they’re motivated by a hidden reason.
Strategy is about trade-offs, making sacrifices that lead to happiness, like Nespresso declining to manufacture their own coffee machines, or Jack Welch pulling out of any industry where his company can’t be the number 1 or 2 player.

You can use buzzwords if you immediately follow up with an example.
If you want to claim to be innovative, give an example of what’s different.
If you want to claim to be collaborative, explain the sort of partnership that’s now possible.
If you want to claim to be a efficient, tell us about how many minutes/dollars/meetings a typical customer can expect to save. 

Create some quick customer stories
I see a lot of entrepreneurs include a logo grid as an example of traction.
These look great, but what’s even better is a short example.
Try this template:
We have worked with…
what we did was…
which resulted in…

For example, instead of we worked with XYZ, try:
We worked with XYZ on their website, going from a static design to a responsive site that they knew how to update.
This led to a spike in sales, prospective customers taking them more seriously, and they can now measure their web traffic to see what changes are working for them.
In the spirit of “eating my own cooking”, I did this for myself early last year.

Please don’t use your origin story as a shield
We had an interesting moment during pitch practice, where I argued that one entrepreneur should drop the first two minutes of his presentation altogether, despite them being entertaining.
My concern was that this origin story – the leadup to how he picked what business to be in – undermined the next three minutes, making the company look like a hobby or an idea rather than a thriving organisation.
Just because your business is new doesn’t mean you have to tell everyone that it’s new.
By all means use it as a strength, but please don’t use it as a shield against questions or scepticism.
The tough and exciting outcome of this change is that you’re deciding to finally let the business stand on its own.
No more sheltering the idea, it’s finally hit maturity.
You’ll feel like a parent who child turned 18 – they still feel like your baby, but they are now seen as an adult by the rest of the world.

What’s the difference between fine and brilliant in your industry?
I’ll admit it; I probably don’t know how your industry works.
Maybe it’s just me, but I bet it’s not.
When describing or pitching your business, it’s wise to assume that there are several Isaacs in the room who can’t describe the difference between something “fine” and something “brilliant”.
It’s your job to clarify this difference, irrespective of whether you’re selling the Aldi-style “it’ll do” products or a “premium tailored creation” that no competitor could match.
If your audience can’t tell the difference, it will be hard for them to become raving fans of your business.

“Leadership is seeing the change that’s coming and preparing for it”
My colleague Olivia ran a session on leadership and reducing the dependency on the founder, and this quote stuck with me.
She said that a leader’s job is to invent the new thing, then bring others with you.
Management on the other hand is all about eliminating unwanted change, making the business reliable and stable.
This is how managers kill innovation, and why leaders get voted out of their own business – the two are not easily compatible.
It is really hard to do this on your own, the temptation will be to try and rush the change or try and change too much at once.
You’ll need someone you trust to help you and call you out, either a coach or an advisor or a board.

Replicability comes from being able to “sell” the people on your team
If you are the only person you trust within your business, then you won’t be able to grow or replicate beyond a team of 5-8 people.
There’s a good chance that the founder is (initially) the best person to do each task, but this also makes them the bottleneck in the business.
You’ll need a team that you can trust to do a good job, but then you’ll need to learn how to “sell” them to clients.
The great thing is that this is a learnable skill, and one that you should be comfortable with; I mean, you did hire them for a reason...?
Replicability takes serious effort, but it reduces your chances of burnout, shares the load across the team and lets you achieve more of your desired impact.
This means accepting that your team won’t always do things the way you hoped, so you can either accept this in advance or be really specific about what is/isn’t up for negotiation.
I certainly learned this the hard way when we first started The Difference Incubator; I ran into trouble both when doing things differently to the founders, or trying to do them the same way as the founders instead of learning from mistakes.

Margin Maths
Let’s say you sell hand-made earrings for $80 per pair.
Once you tally up all your costs (variable and overheads), you calculate that you make $15 in margin per pair.
What happens if you raise the price to $95?
More specifically:
A) What impact does this have on your margins?
B) What impact does this have on the perception of your brand?
C) How many fewer pairs could you sell and still be ahead?
D) If sales decreased, what else would you do with this regained time?
E) If sales didn’t decrease, what would you do with the extra profits?

Pricing is a topic that most of us find confronting, but not because of the maths.
The maths is really compelling – small changes to your prices have huge impacts on your margins, but it’s the stories we tell ourselves that hold us back.
Fear of rejection, fear of being called out, fear of feeling shame.
I get where this comes from, so my question is: can you test it?
Could we design a test that gathered real market feedback, rather than the fake news produced by your brain?

Utilisation is a perpetual challenge for freelancers
The awkward reality for freelancers is that their utilisation will almost never feel “just right”.
When the next wave of projects aren’t visible on the horizon, we feel anxious.
When the next wave of projects looms large, we also feel anxious.
Tough one.
Since this is unlikely to ever be “fixed”, we instead get to prepare for either scenario.
For quiet times, do you have ways of generating more work?
Do you have a list of valuable tasks to go on with?
For busy times, do you have trusted contractors who can handle the excess work?
Can you set these relationships up during the quieter times?
In both cases, do you have a cashflow system that prevents a feast and famine cycle?

Do you want to be a sophisticated sole trader, a boutique agency, or a franchise?
One of my favourite conversations of the whole program was with one entrepreneur about the many options in front of them.
We realised that they had three paths ahead:
1. Becoming a more sophisticated sole trader
2. Setting up a boutique agency, with 5-15 employees
3. Setting up a scalable business with multiple offices

Each of these presents their own pros and cons, but what’s particularly interesting is that the three paths don’t naturally link up.
e.g. becoming a great sole trader doesn’t help you become a great boutique agency – all the habits that help you thrive on your own are terrible for running a team.
Perhaps there’s a fourth option that is a blend of all three, but it’s worth acknowledging the trade-offs behind this decision.
There’s not a right or wrong model, it all depends on your goals and your work style, but this decision drastically changes the businesses and leaders you use as your inspiration.

Different paths have different milestones
If you decide to walk a different path to your peers, you’re likely to hit a different series of milestones to your peers.
Therefore, to compare your peers’ milestones to yours is a recipe for misery.
They say “comparison is the thief of joy”, and LinkedIn is a classic example.
People in traditional careers will go past traditional milestones – promotions, awards, panels at conferences, study tours at Harvard.
You’re going to miss out on these.
Are you ok with that?

This is why David Ogilvy said “Strategy is sacrifice” – you gave up these tokens of achievement when you decided to pursue a more remarkable career.
It’s hard to override your natural tendency to compare yourself to your peers, but since the milestones don’t translate, this can become a source of inadequacy and self-doubt.
My suggestion is to consciously decide to celebrate with your peers, but keep sight of your own weird equivalent milestones.
These might be hitting $100k turnover, hiring your first employee, hitting 3 months’ worth of cash reserves – not exactly prime photo opportunities, but meaningful nonetheless.

One of the highlights of Accelerate With IBA is the way we get to pull alumni back in to the program as guest speakers, and we can’t wait to bring these incredible changemakers back in to teach the next cohorts.
I look forward to our ongoing coaching calls and catchups – it’s an honour to walk with good people as they build their businesses.