Archives for January 2019

Exclusive: Tesla in talks with China's Lishen over Shanghai battery contract – sources

BEIJING (Reuters) – Tesla Inc (TSLA.O) has signed a preliminary agreement with China’s Tianjin Lishen to supply batteries for its new Shanghai car factory, as it aims to cut its reliance on Japan’s Panasonic (6752.T), two sources with direct knowledge of the matter said.

FILE PHOTO: Visitors are seen at the booth of Lishen Battery at a new energy expo in Beijing, China March 22, 2009. REUTERS/Stringer

The companies had yet to reach a decision on how large an order the U.S. electric car company would place, and Lishen was still working out what battery cell size Tesla would require, one of the sources said.

While Panasonic is currently Tesla’s exclusive battery cell supplier, Tesla Chief Executive Elon Musk said in November the U.S. company would manufacture all its battery modules and packs at the Shanghai factory and planned to diversify its sources.

“Cell production will be sourced locally, most likely from several companies (incl Pana), in order to meet demand in a timely manner,” Musk said in a tweet in November.

Other battery makers in the running for contracts could include Contemporary Amperex Technology Co Ltd (300750.SZ) and LG Chem Ltd (051910.KS).

Tesla broke ground on the $2 billion so-called Gigafactory, its first in China, earlier this month and plans to begin making Model 3 electric vehicles (EV) there by the end of the year.

Musk has said the factory will produce “more affordable” vehicles for the Chinese auto market, the world’s biggest, where the firm is facing mounting competition and risks from U.S.-China trade tensions.

Tesla declined to comment, while Lishen did not immediately respond to a request for comment.

Panasonic said in a statement it was studying various possibilities with regards to Tesla’s Shanghai plant, but nothing had been decided. It declined to comment on the possibility of losing exclusive-supplier status with Tesla.

The sources declined to be identified because the discussions are private.

APPLE SUPPLIER

Lishen, which says its clients range from Apple (AAPL.O) and Samsung Electronics (005930.KS) to Geely (0175.HK) and Hyundai Motor (005380.KS), has joined other battery makers in aggressively pursuing contracts with the rapidly growing EV industry.

The Chinese company started mass production of the same type of cylindrical battery made by Panasonic for Tesla’s Model 3 in 2017, in the city of Suzhou about 100 kms (60 miles) away from Shanghai.

Reuters reported on Monday that Panasonic and Toyota Motor Corp (7203.T) were set to launch a joint venture next year to produce EV batteries in an effort to compete with Chinese rivals.

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A joint venture would build on the agreement that the pair announced in late 2017 on joint development of batteries with higher energy density in a prismatic cell arrangement.

It would also help Panasonic cut its heavy reliance on Tesla, whose production delays have weighed on the Japanese company’s earnings.

Panasonic planned to shift most of its prismatic battery-related equipment and facilities in Japan and China to the joint venture, while those producing batteries for Tesla would remain under the company, a source said.

Reporting by Yilei Sun and Tom Daly in BEIJING; additional reporting by Makiko Yamazaki in TOKYO; Editing by Brenda Goh and Stephen Coates

Amazon.com starts direct sales of merchandise in Brazil after delays

SAO PAULO (Reuters) – Amazon.com Inc is launching its long-awaited in-house fulfillment and delivery network in Brazil after months of delays caused by complicated logistics and a highly complex tax system in the largest Latin American economy.

FILE PHOTO: The logo of the web service Amazon is pictured in this June 8, 2017 illustration photo. REUTERS/Carlos Jasso/Illustration/File Photo

Amazon, which some rivals had expected to kick off direct sales of items beyond books as soon as the Christmas selling season, said it will directly sell 11 categories of merchandise from over 800 suppliers from L’Oreal to Black & Decker as of Tuesday.

Its shift to stocking and delivering goods itself from acting mostly as a marketplace is expected to intensify competition for fast delivery of goods in Latin America’s largest economy as it exits a painful recession.

“We are launching (our direct sales platform) with 320,000 different products in stock, including 200,000 books… Our obsession is always to increase this catalog and to have everything Brazilian consumers seek and want to buy on the internet”, Amazon’s Brazilian country manager Alex Szapiro told Reuters.

In November, Reuters reported that Amazon’s attempt to advance with its so-called Fulfillment by Amazon program in Brazil had run into difficulties such as the nations’s tangled tax system, complicated logistics and testy relations with some prominent vendors.

“As in every negotiation, you take a seat at a table and you want to agree on the best possible terms”, said Szapiro when asked on the tone of conversations with suppliers, without entering in details.

Amazon entered Brazil quietly in 2012, selling e-readers, books and then streaming movies in the fast-growing Brazilian market. The company made its first big move into merchandise in October 2017, when it began offering the use of its Brazilian website to third-party merchants to sell electronics.

The company does not reveal the number of sellers in its marketplace, which it has slowly expanded over the past year, adding new categories while laying the ground for a direct sales platform.

As part of the fulfillment program, Amazon leased a 47,000 square-meter (505,904-square-foot) warehouse just outside of Sao Paulo, as first reported by Reuters almost a year ago.

Szapiro, who previously worked as Brazil country manager for Apple Inc, declined to say how much the company is spending on the new distribution center or how many people it is hiring, but said Amazon employs directly and indirectly over 1,400 people in Brazil.

In a report published on Monday, analysts at investment bank BTG Pactual said the expected direct sales launch signaled the company was ready “to strengthen investments, potentially via more partnerships with fulfillment operators and last-mile carriers.”

Even though the bank predicted Amazon would take a “gradual approach” and was likely to vye for a “low double-digit market share,” shares of Brazilian retailers reacted negatively to BTG’s report, with B2W, Magazine Luiza e Lojas Americanas among the biggest losers in Monday’s session.

Reporting by Gabriela Mello; Editing by Sandra Maler

Apple, Amazon called out for 'incorrect' Taiwan, Hong Kong references

TAIPEI/SHANGHAI (Reuters) – One of China’s top government-linked think tanks has called out Apple Inc, Amazon.com Inc and other foreign companies for not referring to Hong Kong and Taiwan as part of China in a report that provoked a stern reaction from Taipei.

FILE PHOTO: An electronic screen displays the Apple Inc. logo on the exterior of the Nasdaq Market Site following the close of the day’s trading session in New York City, New York, U.S., August 2, 2018. REUTERS/Mike Segar/File Photo

The Chinese Academy of Social Sciences (CASS) said in a report this month that 66 of the world’s 500 largest companies had used “incorrect labels” for Taiwan and 53 had errors in the way they referred to Hong Kong, according to China’s Legal Daily newspaper. It said 45 had referred to both territories incorrectly.

Beijing considers self-ruled Taiwan a wayward province of China and the former British colony of Hong Kong returned to Chinese rule in 1997 and operates as a semi-autonomous territory.

China last year ramped up pressure on foreign companies including Marriott International and Qantas for referring to Taiwan and Hong Kong as separate from China in drop down menus or other material.

The report was co-written by CASS and the Internet Development Research Institution of Peking University. An official at the Internet Development Research Institution told Reuters that it had not yet been published to the public and declined to provide a copy.

A spokesman for Taiwan President Tsai Ing-wen said Taiwan would not bow to Chinese pressure.

“As for China’s related out-of-control actions, we need to remind the international community to face this squarely and to unite efforts to reduce and contain these actions,” Alex Huang told reporters in Taipei.

Beijing has stepped up pressure on Taiwan since Tsai, from the pro-independence ruling party, took office in 2016.

That has included rising Chinese scrutiny over how companies from airlines, such as Air Canada, to retailers, such as Gap, refer to the democratic island in recent months.

Nike Inc, Siemens AG, ABB, Subaru and others were also on the list. Apple, Amazon, ABB, Siemens, Subaru and Nike did not immediately respond to Reuters’ requests for comment.

Reporting By Yimou Lee, Jess Macy Yu, Josh Horwitz; Additional Reporting by Shanghai Newsroom, Gao Liangping, Cate Cadell, Pei Li, Brenda Goh and Naomi Tajitsu in TOKYO; Editing by Paul Tait and Nick Macfie

Bracing for a Hazy Robo-Future, Ford and VW Join Forces

Sensor partnerships. Subsidiary acquisitions. Software collaborations. The autonomous driving world is about as incestous a place as Caligula’s palace, and it got a little more so today, when Ford and Volkswagen announced a formal and long-anticipated alliance.

“The alliance we are now building, starting from first formal agreement, will boost both partners’ competitiveness in an era of rapid change,” Herbert Diess, the CEO of Volkswagen, said on a call with reporters. He and Ford CEO Jim Hackett said the partnership—which is not a merger—will begin with the companies jointly developing and building medium-sized pickups and commercial vans, to debut as early as 2022. The automakers said the arrangement should “yield improved annual pre-tax operating results” by 2023. So hopefully, this makes everyone richer.

After that, well, the companies have signed a “memorandum of understanding” to collaborate on electric vehicles, autonomous vehicles, and mobility services. The shape and details of those partnerships are yet to be determined.

Diess is right about that “rapid change” bit. The automotive industry has shifted remarkably in the last decade, with new vehicle and vehicle-adjacent tech players—Tesla, Waymo, Aurora, Argo AI—injecting fresh blood (and panic) into the business of building cars. Ford and VW seem to believe that banding together will help them not only survive, but thrive.

The companies will need to do that in a world where, eventually, someday, the human driver is obsolete. The path to self-driving domination is not yet clear. What services will automotive manufacturers manage for themselves? Which technologies will they build and own? Ford and VW have spent the last few years toying with different answers to these questions, and by joining forces, each has diversified its AV portfolio. It might be evidence, as automotive writer Pete Bigelow points out, that the companies are making smart, strategic decisions about how to spend their R & D dollars in this confusing, in-between time. Or that they’re flailing. Maybe both.

Both VW and Ford already have (quasi) in-house automated vehicle software teams. VW has built up a 150-person “Autonomous Intelligent Driving” unit as part of its Audi brand, which is building a full AV software stack. (Audi itself has pledged to spend $16 billion on electric and self-driving vehicles through 2023.) And the German automaker is working on self-driving with the AV developer Aurora, which is headed up by self-driving tech veterans.

Ford has a large stake in Pittsburgh-based AV software company Argo AI, whose work is a key element of the automaker’s pledge to have a fully automated robotaxi in operation by 2021. And it has spent time and money boning up on “mobility” tech, purchasing companies like transit software-maker TransLoc, transportation cloud platform Autonomic, (recently killed) shuttle service Chariot, and scooter-share company Spin. It’s trying to figure out how best to connect customers to transportation, and what they’d like to see out of a transportation service, anyway.

It’s not clear yet how these various minglings will affect Ford and VW’s work. Argo AI is involved in the discussions between the companies, but specifics are scarce. “We’re not going to speculate on the details of the advanced discussions that are ongoing,” says Alan Hall, a spokesperson for Ford.

Khobi Brooklyn, a spokesperson for Aurora, did not say what role the company might play in the alliance. “As we continue to build relationships across the transportation ecosystem with providers of vehicles, transportation networks and fleet management operations, we are confident that we will be able to deliver the benefits of self-driving technology safely, quickly, and broadly,” she wrote in a statement. Aurora has said that it has not ruled out working with other automotive manufacturers on self-driving cars; it also has partnerships with Hyundai and EV startup Byton.

Another element of this “diversification” that should benefit both companies: They get easier access to the others’ regional strengths—and regulatory environments. VW has invested serious money in South America, Africa, and China. But despite a new plan to establish a plant in Tennessee, the German carmaker is weaker in the US, Ford’s home turf. “From Volkswagen’s perspective, it would make a lot of sense to cooperate with an American player given that the regulatory conditions for preparing the breakthrough of autonomous driving are more advanced in the US than they are in Europe,” Diess told reporters. Break out those German-English dictionaries.


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Exclusive: Facebook brings stricter ads rules to countries with big 2019 votes

SAN FRANCISCO (Reuters) – Facebook Inc told Reuters on Tuesday that it would extend some of its political advertising rules and tools for curbing election interference to India, Nigeria, Ukraine and the European Union before significant votes in the next few months.

FILE PHOTO: Silhouettes of mobile users are seen next to a screen projection of Facebook logo in this picture illustration taken March 28, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

As the largest social media service in nearly every big country, Facebook since 2016 has become a means for politicians and their adversaries to distribute fake news and other propaganda.

Buying Facebook ads can widen the audience for such material, but some of those influence efforts may violate election rules and the company’s policies.

Under pressure from authorities around the world, Facebook last year introduced several initiatives to increase oversight of political ads.

Beginning on Wednesday in Nigeria, only advertisers located in the country will be able to run electoral ads, mirroring a policy unveiled during an Irish referendum last May, Katie Harbath, Facebook’s director of global politics and outreach, said in an interview.

The same policy will take effect in Ukraine in February. Nigeria holds a presidential election on Feb. 16, while Ukraine will follow on March 31.

In India, which votes for parliament this spring, Facebook will place electoral ads in a searchable online library starting from next month, said Rob Leathern, a director of product management at the company.

“We’re learning from every country,” Leathern said. “We know we’re not going to be perfect, but our goal is continuing, ongoing improvement.”

Facebook believes that holding the ads in a library for seven years is a key part of fighting intereference, he added.

The library will resemble archives brought to the United States, Brazil and Britain last year.

The newfound transparency drew some applause from elected officials and campaign accountability groups, but they also criticized Facebook for allowing advertisers in the United States to obfuscate their identities.

The Indian archive will contain contact information for some ad buyers or their official regulatory certificates. For individuals buying political ads, Facebook said it would ensure their listed name matches government-issued documents.

The European Union would get a version of that authorization and transparency system ahead of the bloc’s parliamentary elections in May, Leathern said.

The ad hoc approach, with varying policies and transparency depending on the region, reflects local laws and conversations with governments and civil society groups, Harbath said.

That means extra steps to verify identities and locations of political ad buyers in the United States and India will not be introduced in every big election this year, Leathern said.

In addition, ad libraries in some countries will not include what the company calls “issue” ads, Leathern said.

Facebook’s U.S. archive includes ads about much-debated issues such as climate change and immigration policy even though they may not directly relate to a ballot measure.

Australia, Indonesia, Israel and the Philippines are among nations holding key votes this year for which Facebook said it is still weighing policies.

Leathern and Harbath said they hoped to have a set of tools that applies to advertisers globally by the end of June. They declined to elaborate, saying lessons from the next couple of months would help shape the worldwide product.

FILE PHOTO: The logo of Facebook is pictured during the Viva Tech start-up and technology summit in Paris, France, May 25, 2018. REUTERS/Charles Platiau/File Photo

“Our goal was to get to a global solution,” Harbath said. “And so, until we can get to that in June, we had to look at the different elections and what we think we can do.”

Other Facebook teams remain focused on identifying problematic political behavior unrelated to ads.

Last month, researchers working for a U.S. Senate committee concluded that the Russian government’s Internet Research Agency used social media ads and regular posts on inauthentic accounts to promote then presidential candidate Donald Trump to millions of Americans. Russia has denied the accusation.

Reporting by Paresh Dave; Editing by Clarence Fernandez

HSBC settles forex deals worth $250 billion on blockchain in last year

FILE PHOTO: HSBC’s building in Canary Wharf is seen behind a City of London sign outside Billingsgate Market in London, Britain, August 8, 2018. REUTERS/Hannah McKay

LONDON (Reuters) – HSBC (HSBA.L) has settled $250 billion worth of forex trades using blockchain in the last year, it said on Monday, suggesting the heavily hyped technology is gaining traction in a sector until now hesitant to embrace it.

The bank has settled over three million forex trades and made over 150,000 payments since February using blockchain, it said in a statement. HSBC would not give data on forex trades settled by traditional processes, saying only that those settled by blockchain represented a “small” proportion.

Still, the data marks a significant milestone in the use of blockchain by mainstream finance, which has until now been reluctant to start using the technology at any scale.

Blockchain is a shared database that can process and settle transactions in minutes. Originally conceived to underpin the cryptocurrency bitcoin, the technology does not require third-parties for checks and its entries cannot be changed, making it highly secure.

Banks and other financial firms have invested hundreds of millions of dollars in the technology, hoping it will simplify and slash costs in processes from settlements to payments.

But few banks moved from testing to implementation of blockchain in large-scale projects. Many are worried about high costs, uncertainty over regulation and the risk of disruption to existing systems.

HSBC said its blockchain technology has automated manual processes and reduced its reliance on external technology.

Blockchain has also lowered the risks of errors and delays, cut costs, and helped the bank to better optimize its balance sheet, it said.

Richard Bibbey, the bank’s acting head of forex and commodities, said in a statement the bank was looking at how the technology could help multinational clients better manage forex flows.

Reporting by Tom Wilson, Editing by William Maclean

The Final Season of 'Game of Thrones' Has a Launch Date

Happy Monday, and welcome to another installment of The Monitor, WIRED’s roundup of the latest in the world of culture. In today’s news, HBO has finally coughed up a release date for the final season of Game of Thrones, Netflix is facing a lawsuit, and it looks like the Super Bowl won’t be marooned without a halftime show act.

Finally, a Date to Watch the Thrones

Always one to keep fans waiting in anticipation, HBO waited until three months out before to announce the launch date for Season 8 of Game of Thrones. Sunday night, just before the season premiere of True Detective, the network aired a teaser revealing that the epic fantasy’s final run will begin on April 14. What will the show look like when it does return? Snowy, as the Stark children—Arya, Sansa, Jon Snow—are about to confront some family demons at Winterfell. Or, at least, that’s what it seems like if the show’s new vague-as-hell-trailer is to be believed. Don’t worry, we’re sure plenty of third cousins you don’t remember will show up as well. And maybe Ed Sheeran.

If You Want to Sue Netflix, Turn to Page Petty-Seven

In “Huh, didn’t see that coming!” news—there’s a lot of that these days, admittedly—Chooseco, the publisher behind the Choose Your Own Adventure books, is suing Netflix over its interactive Black Mirror episode, Bandersnatch. In the interactive episode, a young videogame programmer designs a game based on a “choose your own adventure” book, and the episode itself lets viewers make choices about what the characters will do in the story. Chooseco’s suit claims it has the trademark to the phrase “choose your own adventure” and that Netflix doesn’t have a license to use it. The company is seeking at least $25 million in damages, though it’s also possible that if the judge doesn’t like the way the arguments proceed, she’ll just bang her gavel and restart things from an earlier point.

Hold Up, Is That Adam Levine?!

After Rihanna, Adele, Jay-Z, and others reportedly passed on the gig, the NFL announced Sunday that Maroon 5 will be playing the halftime show at this year’s Super Bowl. The band—along with Big Boi and Travis Scott, who are joining them in hopes of stemming a mass Puppy Bowl exodus—will bring their Jagger-like moves to Atlanta’s Mercedes-Benz Stadium in Atlanta on February 3. And while he’s not part of the proceedings, we can only hope A$AP Ferg is nearby, his long quest at an end.


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The 1 Big Lesson that this AI Startup Learned

My 2018 wrapped with a fulfilling finish after mentoring entrepreneurs in the Techstars Montreal AI Accelerator. The selected startups were an eager, smart group of founders focused on the development and application of artificial intelligence across all industries and markets.

Through the Techstars program, they gained traction through deep mentor engagement, rapid iteration cycles, and fundraising preparation. It was an immersive and busy three months, but at the end of the accelerator, the companies had leveraged their mentors and learned to balance vision with execution.

As many entrepreneurs and investors can attest, the balance of staying true to your company’s vision while building with customer-centered needs is a tricky one.

Stay too fixated on your vision, and fail at market-fit and execution of the idea.

Swing too far into the customer-needs camp and risk-taking orders from a customer’s perceived problem, and missing the solution for the customer’s real problem.

To achieve this balance, take a page from the Techstars program curriculum and mentor-focused network: build your business with intentional balance.

Find and listen to mentors that challenge your assumptions.

Identify mentors that will challenge you, share insights, and ask the right questions to help identify the right problem and market fit.

One participating startup, Crescendo, learned first-hand how mentorship can help drive a vision beyond strategy, into execution.

Crescendo strives to create inclusive workplaces by helping employees develop empathy. Their technology delivers bite-sized content to employees on a weekly basis, using machine learning to create unique learning paths for each individual.

At the start of the Techstars program, Crescendo planned to solve the problem of toxic workplaces by creating a system that would analyze workplace communication to create a learning profile for each employee, then recommend how they could change their behavior.

Through different mentor sessions, the mentors questioned whether the solution was something customers would buy. While it may fit the founders’ vision, would an HR executive buy a solution that created a polarized work environment where employees felt policed?

The team listened and worked to challenge their own assumptions by talking with more of their potential customers. Initially, their feedback was that they loved the idea of improving workplace diversity and inclusion. But through more interviews, Crescendo learned that the product they were building wasn’t something they would buy.

The customers appreciated Crescendo’s vision but felt only a small portion of their company’s employees would feel comfortable using it, and that it wasn’t worth the data privacy risks. In short, they wouldn’t buy it.

As Crescendo co-founder Daniel Tuba D’Souza shared with me, “The best advice we got from a mentor: don’t build anything until you sell it.”

The mentors helped the founders to get beyond their vision and think about business viability and customer needs.

Rally around the problem statement.

Crescendo went back to their vision and evaluated what solution would be a market fit. The founders believed their vision was on target, but the product didn’t fit the customer’s needs.

As a team, they did a post-it note session to articulate a clear and concise problem statement, outlining the issue they wanted to solve. They wanted to identify what their solution could do to change workplace bias behaviors. This centered the team, giving them a place to validate ideas and a vision of what the world would look like if they solved the problem.

The founders wanted to ensure that with every pivot the company made, they stayed grounded to their ultimate vision.

The team went back to mentors and customers and conducted 360 degrees of feedback. Some of the feedback helped to shape the product and others were considered and disregarded when it didn’t fit the vision and customer’s needs.

“Advice came in from all directions. One thoughtful mentor suggested we focus just on the technology and build a one-time assessment tool. It was a cool idea, but it didn’t help us solve the problem we want to solve,” D’Souza shared.

Ultimately, the team landed on a solution that balances vision and customer needs. Crescendo built a solution integrating bite-sized diversity and inclusion education within a company’s slack community, building empathy and creating change in behaviors.

The tension of staying true to your north star while attuned to the customer-centered needs is a tricky one. Engaging with mentors for feedback, and grounding in the right problem statement will help you guide your team and product toward success.

In reflecting over coffee on the first cohort in the Montreal program, Managing Director of Techstars Montreal, Bruno Morency shared that successful entrepreneurs will surround themselves with people that question the vision of the company.

“For an entrepreneur, find mentors that will ask the right questions, and help you to turn a vision into execution.”

Feeling like your startup would be a fit for Techstars? They are opening applications in late February for the second class in Fall 2019!

Why Building a Business Today Is More About Selling Skills Than Selling Products

Most of you who start new ventures don’t think of yourselves as sales experts. In fact, you may feel on the opposite end of the spectrum, more focused on delivering the perfect solution and managing the finances to grow the business.

Yet in today’s competitive and rapidly changing world, top notch sales and marketing skills are critical to the success of every business.

As an advisor to technical entrepreneurs, the most common mistake I see is the “If we build it, they will come” approach with no sales plan, under the assumption that the technology is so spectacular that customers will buy the product.

In todays’ rapidly changing world, there are over 30,000 new products introduced every year, so it’s easy to slip into that unseen majority and fail.

Thus, in my view, it’s never too early to brush up on your selling and marketing skills. Here are the key steps I have found to work from my own experience in large companies, as well as startups:

1. Practice showing some passion in every conversation.

Being positive and excited about what you offer should not be reserved for stand-up pitches and closing large deals.

Everyone inside your company, as well as potential customers, needs to be inspired by your message before they believe it. Stand tall – keep your fears and doubts to yourself.

It always helps to ask questions first, and keying off an element of passion in the other person’s perspective. For example, if they show a passion for fitness and life balance, highlight how your solution shortens the time and pain of solving their business problems.

2. Work hard on perfecting your value proposition.

The value of your solution may be self-evident to you, but everyone has a different perspective.

Make sure you engage fully and often with your ideal customer, to understand what will appeal most to their heart, mind, and pocketbook. Then craft an irresistible pitch, and iterate often to keep tuning it.

Effective value propositions are quantified and personalized for each customer or target segment. For example, “reduces your cost per application by 30 percent” is far better than “easier and faster to apply.” Eliminate the fuzzy hype words from your message.

3. Hone in and capitalize on your best assets.

Your strongest asset may be your personality, expertise, location, or your solution. Highlight what you do best, unique benefits to your customers, and an honest statement of why you do what you do.

Make it real for your customers with professionally prepared collateral based on these assets.

Dale Carnegie, for example, was recently ranked as one of the ten greatest salespeople of all time, by virtue of his presence and conviction, even though his courses on public speaking contained no great innovations or breakthroughs. He was the asset he sold.

4. Build real relationships with people who can help.

Starting and growing a business is not a solo operation. You need all the help you can get, and people will help you if they know and trust you.

These may be partners who can complement your skills, mentors who can show you what you need, or customers who can be your best sales people.

Even the most successful business executives have mentoring relationships with helpful peers. Bill Gates has a long-standing mentor relationship with Warren Buffett, and Mark Zuckerberg openly acknowledges that he was mentored in the early days by Steve Jobs.

5. Don’t forget to ask for the close, with confidence.

You can’t win if you don’t ask, and confidently asking a customer for their decision shows leadership on your part.

The best sales people look for ways to inspire a customer’s emotional involvement, create the urgency to take ownership, and then ask for the decision. Don’t be shy on this point.

Five basic rules for closing include treating closing as a process, setting a closing objective, waiting for the right moment, wrapping a conversation around it, and then celebrating every victory. If you can’t close deals, you don’t have a business, no matter how great the product.

I’m not suggesting that you as the business founder has to do all the selling, but you do have to be the role model that the rest of team follows. You also have to deeply understand what sells to your customers, or you can’t properly lead the other key business areas of development, finance, and operations.

In reality, leadership requires first selling yourself, so these same steps apply.

Before You Quit Your Day Job for a Startup, Make Sure You Can Answer These 7 Questions

I’ve heard pitches from more than 20,000 entrepreneurs over the last two decades.  The top question I’m asked (other than “Will you invest in me?”) is, “Is my idea any good?”

Wantreprneuers from far and wide track me down to get my blessing before they quit their well-paying job to start a startup. Over the decades and in conjunction with other angel investors and venture capitalists, I’ve developed a seven-question list that potential founders should ask themselves before coming to ask me.

If your answer to all seven of these questions is “yes,” your idea is probably excellent. If not, you have some work to do.

1. Are you obsessed with the industry, customers, or problem?

Successful founders love what they do. They would learn about the industry, customer segment or problem even if they weren’t being paid. To be successful, you must be obsessive about your startup opportunity.

The difference between obsessive and caring is quite large. Caring is a given, and it’s not enough. Being obsessive means that you think about something dozens a time a day. If you aren’t obsessive, you won’t be able to accumulate the insights needed to garner strategic advantage–insights that only come from focusing on something for thousands of hours. 

2. Can you build the solution? 

Ideas are worthless until combined with relentless execution. You must be able to execute both your idea and your product. At the very least, you need to be able to create a prototype or minimum viable product, something you can get into the hands of early adopters and generate early proof of concept traction.

3. How elastic is demand?

Pain killer or vitamin? Cost saver or revenue generator? The best opportunities solve unmet market needs where demand is inelastic. This yields better margins in the long run and quicker traction in the short run.

Your opportunity must satisfy a need, not a want. A need is something you can’t live without. Air, water, and food are the classic examples. A want is something you can live without, like fancy shoes or expensive cars.

As the price of wants go up, demand for them peters out. Startups that satisfy needs will always have easier times attracting early adopters and generating revenue. 

4. Is the market large and growing?

Today, the market for anti-hacker security is hot. The market for thoroughbred horseshoes is not. Why focus on a small win? You’re investing your blood, sweat, and tears. Make sure the win is worth it.

By the way, the risk is actually much greater when you focus on a niche. Since you have less pool to swim in, you have less chance to learn through iteration. Always focus on bringing your solution into a market that is large and growing. It’s OK to start with a niche, but there must be lots of room to grow.

5. Are you exponentially better?

If you’re entering an extant market, you’re automatically at a disadvantage with sunk costs and less brand recognition than your competitors. To overcome that, you must be ten times faster, cheaper, stronger, and lighter than every other company in your industry to get people to switch from incumbent products.

Netflix killed Blockbuster by offering ten times the quantity of content at one-tenth the cost. Your solution must be exponentially better than any alternatives.

6. Are you ready to go all in? 

Design thinking and the Lean Startup method allow you to start most businesses as a side hustle. Your long-term goal still needs to be full time, all the time, all in. No one has ever changed the world with half measures.

7. Do you have frictionless access to early adopters?

Early adopters are customers who have the problem you solve, and are currently trying to solve that problem with a radically less efficient method. Before spell-check software, we used third party proofreaders, which were ten times more expensive and time consuming.

To be successful, you need a clear and low cost to get early adopters and turn them into your beachhead. Make sure you’re able to get your product directly to customers.


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