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Rahim Fazal

Everything I learned about startups, I learned from McDonald’s

I love McDonald’s. Besides making the most addictive fries on the planet, McDonald’s also has unmatched customer success: If you like fast food, they deliver every time. And engrained (or beaten) into every employee are the core lessons that make great entrepreneurs – testing assumptions, exceptional service and managing up. Put together, you have a pretty solid recipe for starting your first company — which is why I recommend every aspiring founder spend at least a summer working under the Golden Arches.

I did.

Here’s what I learned:

1) Treat all new products like students – test them religiously.

Ever wonder how the Big Mac made it onto the McDonald’s menu? Well it wasn’t through prayer (although, some times I do pray to have a Big Mac in my belly). Successful products happen rarely ever by chance and you definitely do not become the best selling item on a multibillion dollar restaurant menu by accident. Luckily, I got to see both successful and unsuccessful McDonalds items. I worked at a HQ location where they tested every new item to see how it would perform before putting it on the menu of every store. Remember the McPizza? (if you don’t, you missed out!). The McPizza was a hit, customers loved it and people still talk about it today when they’re reminiscing about the good old days, and it’s been off the menu for over 10 years. So why would they take down a popular, revenue producing product? It turns out that making a pizza took 11 whole minutes (that’s half an episode of Big Bang Theory). Not only did the longer cooking time go against McDonald’s branding of fast service, slower food also meant a slower turnover rate of new customers and ultimately less revenue to the bottom line. Lesson here: testing performance is the only way to validate a product, not spraying and praying. And knowing what to test for to scale your operating model, is essential.

2) Create delightful moments for your customers.

When I took orders at the register, one thing became really clear: people love free stuff, especially when they’re not expecting it. My best customers always got an extra order of fries (or an apple pie if my enemy was working the fries station that day). That kept them coming back more often, and when they came back, guess whose register they ended up lining in front of :). In a short while, my daily transactions were higher than every one of my co-workers, and more than made up for the cost of a few apples. Customer loyalty is how you build long-lasting revenue and creating delightful moments is one of the best ways to make sure your customers keep coming back.

3) Manage up. And know how you’re performing, BEFORE receiving your report card

Here I was, working extra hard and going above and beyond for my customers. I was ready to be praised! I had deserved it right? Well six weeks later, I found myself jobless and unemployable. “Wait, what?!” “How could that be, Rahim?” I was so focused on the needs of the customer that I forgot about the needs of my employer (my other customer). McDonalds wanted the fastest, most efficient workers and I was a slow, methodical employee. As a founder, we often forget that we have two kinds of customers – investors and end-consumers. And in the early beginnings, your investors are often your only paying customers. Manage up to your investors. Don’t do what I did. Understand all expectations and perform accordingly because trying to find a job after being fired from McDonalds is like trying to eat just one french fry – hopeless and damn near impossible.

There are some amazing entrepreneurial teachers out there – Seth Godin, Tony Hsieh, BJ Fogg, Ben Casnocha. But for me, right along side them is Ronald McDonald. Sure, paying for business school might teach you these lessons but a lot of people can get paid to learn. If you want to be a great entrepreneur, testing assumptions, exceptional service and managing up are critical so put on your hairnet, tuck in your uniform, smile and repeat “would you like fries with that?”

Named one of San Francisco’s 40 Under 40

I just found out that I’ve been named to the “40 Emerging Leaders Under 40″ list by the San Francisco Business Times!

Congratulations to all the recipients. If you have a chance, flip through the profiles — you’ll find some really impressive people working on big solutions for sustainable energy, national economic recovery, disease prevention, climate change, mobile security, and cloud computing.

Pitching An Idea? Take A Lesson From Taylor Swift

On my way to work the other day, I was flipping through radio stations and I heard some Taylor Swift. As expected, I was about to switch stations. Then I heard it: dubstep.

You heard me right — Taylor Swift’s newest single “I Knew You Were Trouble” features a nice dubstep interlude.

At first, I had the same reaction as you probably would: “You’ve got to be kidding me.” But then I started to think about it more. And more. And (let’s be honest), I didn’t end up changing the station.

That’s how you catch someone’s attention. There’s a reason Swift’s newest album Red became the fastest-selling album in over a decade — it’s fun, it’s risky, and it’s unique.

Over the past ten years, I’ve sat in rooms from San Francisco to Cairo listening to entrepreneurs of all kinds pitch me their businesses. Some pitches you get immediately, and there’s so obviously an opportunity there that all you want to do is roll up your sleeves and do whatever you need to help the business grow faster.

Most times, however, the pitches are so bad your mind starts wandering, and you begin thinking about what you’ll be having for lunch (beef ribblets…mmm).

Bad pitches can most simply be broken down to two types. A) Bad pitches of bad businesses, and B) Bad pitches of good (or great) businesses. There is no worse tragedy than a really great business that goes down the tubes because it failed to build momentum.

Listen, we entrepreneurs only get one chance to make an impression, so when you have it, you need to bring the pain.

Here are some things to know about pitching an idea — and how to make it count.

How to Do It

It doesn’t necessarily take dubstep to get someone’s attention (did you see Microsoft’s ad for Internet Explorer 9). What it takes is enthusiasm — let’s call it the energy of a dubstep.

You need to captivate your audience from the very beginning. There are a few ways you could go about doing this:

• Stories are best, (or at least I think so). When a story is easily told and relatable, you’ve almost instantly caught your audience’s attention. This creates connection on an emotional level.
• Stay simple: “The following ___ things will be covered in the next ___ minutes.” Keep it quick and to the point.
• Do something crazy. Taylor did it with dubstep, and I once saw a team sing its presentation. Find something that suits you, but isn’t too far out of your comfort zone. And, of course, there are limits — make your “crazy” applicable to the situation.

After your catchy opening, actively make yourself memorable:

• Be prepared. Know your material.
• Take people’s time seriously. Include only the most integral ideas.
• Use facts and statistics — people want evidence that your ideas work.
• Demonstrate that the business is going to grow and prosper whether the investor puts money in or not.
• Smile and have fun.
• Make it tangible: bring hands-on prototypes, or at least have great images.

End with the same strength (or greater than) what you started with. Remember:

• Reinforce key messages.
• Recap and summarize everything into one or two salient points.
• Be proactive: Ask for the next meeting.

How Not to Do It

Everyone has seen a painful pitch. Here are a few things not to do:

• Don’t make assumptions: People don’t care as much as you do about your product (yet). People may or may not know your market (so educate accordingly). Don’t assume the audience members have a long attention span. In short, assume nothing.
• Don’t ignore obvious risks and/or competition.
• Don’t make easy mistakes. If you act nervous and unprepared, people will notice.
• Don’t mismanage your slides: Don’t read from them, don’t let them get messy, and don’t allow too many in your presentation.

Most of these are obvious, yet they occur all too often anyway. You can be memorable in part simply by being better than all the rest.

Take a Lesson From Taylor Swift

I never thought I’d be saying this, but Taylor Swift did it perfectly. She caught America’s attention and they invested in her newest product.

Capture your audience from the second you open your mouth to the second you close it. Maybe it won’t make you the next country-star-turned-electronic artist, but it can help you get the next meeting.

Helping Inspire The Next Generation of Entrepreneurs in the Middle East

Last week, my family and I were invited by the United States Agency for International Development to participate in the third annual Global Entrepreneurship Summit in Dubai.

The summit was established three years ago by President Barack Obama at the American University in Cairo to “deepen ties between business leaders, foundations and social entrepreneurs in the United States and Muslim communities around the world.”
You can watch President Obama’s “New Beginning” speech here.

I was privileged to join several fantastic entrepreneurs in a lively discussion on youth entrepreneurship moderated by Special Advisor Zeenat Rahman from the US State Department of Global Youth Affairs.

Three AHA Moments I’ll never forget

This week, I spoke at the capstone event for Startup Canada in Vancouver, which was a cross-country tour helping local startups get ready for the major leagues. The organizers did it big — 400 people at the new Waterfront Convention Center built for the 2010 Olympics.

They also did things a little differently; rather than have people come up and pitch their companies, 20 founders were chosen to share personal stories about the time in their life when they *knew* they were going to be an entrepreneur (including one person I’d mentored at Startup Weekend Alexandria last year who’s now raised money and moved to Canada). My most favorite came from a guy who shared his painful journey battling a life-crippling addiction to… pay-checks.

In my keynote, I decided to share a few AHA moments of my own. Here’s a short summary:

1. When I realized I was going to be an entrepreneur: June 14th, 2000. I’ll never forget this day. In the middle of writing my Senior Year final exams, my friend and I sold our web-hosting business, and I gained the confidence to join the world on my own terms. All my life up to that moment, everyone around me, my parents, my family, my teachers, my counsellors, etc. was telling me what to do with my life. They all had an opinion (expressed more lovingly by some (ie. my folks) than others (you know who you are! :-)). For me, taking a small idea from a hobby and growing it into a real business serving tens of thousands of customers was all that mattered at the time. I was having the time of my life making something out of nothing. I count myself really lucky because it was the sale of the business that made it possible to defer college and take entrepreneurship seriously (if we’d failed, my life would have taken a very different direction, one that may not have pushed me as hard).

2. When I realized I wasn’t the smartest person in the room. The easy part was getting into business school. The hard part was surviving (and then thriving). All my life I had been at the top of my class (whether it was the G&T program in seventh grade or the IB program in high-school), but all of a sudden, I found myself struggling not to finish last in every assignment from Operations to Management Science (the hardest set of classes I’ve ever taken). The only way out of it was asking for help. Something I’d never done before. Asking for help = something in my mind that most closely resembled failure. Running out of options and excuses, I admitted I just didn’t get the material (to a small group at first, and then more openly with professors).

Surprisingly, I wasn’t chastised (well, a little), and the real pain came in all the extra homework and readings, which cut heavily into my sleep (but thankfully not the partying). With a little bit of luck, and A LOT of help, I graduated with an A- average. In the end, I learned that the only way to get help is to be vulnerable (not something that entrepreneurs like to do! See my quote in Forbes).

3. When I realized the best days are ahead. Starting a company in Silicon Valley was a dream I’d chased since I was a teenager. After bschool, I moved down to Palo Alto to find three things: an idea, some money, and a co-founder. It took me nine months, and we were off building Involver. In a few years, the team grew from 7 to 70, which meant I had fresh college grades who were senior executives, including a guy with a beard running around the office with a blanket (he recently defended this dress by reminding me how cold it was in the building: B-Y-O-Blanket right?).

All of a sudden I had an organization to manage: lots of people with different personalities (sometimes conflicting) and priorities and wants and needs. As a leader, I knew we had to operate at breakneck speed, but I was over-analyzing. Everytime I made a decision, I’d go back and revisit it. I would replay situations over and over like a movie, and make mental notes of all the things that went wrong, and what I could do better next time. I was destroying myself.

Then one day, I read a blog post by Ben Horowitz where he talked about why it’s so hard to be CEO:

1) “Everybody learns to be a CEO by being a CEO.” There is no school for this stuff.

2) “Focus on where you are going rather than on what you hope to avoid. When they train racecar drivers, one of the first lessons is when you are going around a curve at 200 MPH, do not focus on the wall; focus on the road. If you focus on the wall, you will drive right into it. If you focus on the road, you will follow the road.”

Once I realized that entrepreneurship is a marathon not a sprint, life got much better. I began to focus on the next meeting not the previous one. Nowadays, I don’t worry about making mistakes; I focus only on doing the very best job I can at this very moment.

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Startup Canada was amazing. Thank you to all the people who shared their tweets and emails. And thank you to the volunteers, BCIC, and everyone else that made this tour possible.

Want to launch a new product? Take baby steps.

One of my favorite thinkers, BJ Fogg from Stanford University’s Persuasive Technology Lab, held a unique conference on campus last week entitled Mobile Health 2012. Several hundred executives and researchers from large health care oriented enterprises were invited to learn how to create significant change in their businesses using baby steps. The three key areas of focus were behavioral change, collaboration and product development.

Here’s something cool: While this was a forum for the healthcare industry, most of the speakers were from the startup tech companies! I never really thought about using startup best practices for larger more mature businesses – but after leaving Mobile Health I’m a believer: (a) many small changes are better than a few big ones, and (b) this is a universal truth for all-sized companies.

My panel was helping business and technical users launch new products (thanks to my fellow panelists: Vinay Gidwaney from DailyFeats (a company I am proud to advise)), Cristina Cordova from Pulse and Manu Kumar from K9 Ventures).

My 3 key points were:

1. Create an onramp to your product that removes every single objection or roadblock to adoption (ie. make it self-serve and easy to discover, focus on user experience, use training, ie. video tutorials, etc.).

2. Build demand generation by co-creating your product with savvy “customers” whose needs represent those of the market majority.

3. Land and expand. There’s no need to attempt extracting full wallet or mind share on the first day. Start by establishing a billing relationship (or engagement), demonstrate value, and grow.

Thanks to BJ Fogg, Tanna Drapkin and the rest of the Mobile Health team for breaking away from traditional frameworks and creating a forum for sharing real practical tools on creating change, one step at a time.

How Enterprise Software is becoming more like Facebook at TieCon 2012

Yesterday, I sat on a lively Cloud panel at TieCon in Santa Clara with executives from Salesforce, Yammer, Box.net and Drobo.

The topic was a timely one – how enterprise software like Involver is increasingly looking and selling alot more like consumer products such as Facebook. Someone asked us at the end what market areas entrepreneurs should focus on, and Anshu Sharma who heads up all product at Salesforce, said CMOs are becoming the new economic powerhouse in the organization. That’s a big deal. Build products that solve problems for the marketing department. I couldn’t agree more :-).

Obama signs the JOBS Act in the Rose Garden (and I’m there!)

What a day! Today, President Obama signed the hallmark Jumpstart Our Business Startups (JOBS) Act into law at The White House. I can’t tell you how lucky I was to be there (infact, I somehow managed to get picked up on the CNN cameras during the live broadcast).

The ceremony itself took place outside The White House in the Rose Garden, which, when the weather cooperates, is a favorite place for the President to welcome foreign leaders and address the nation. Today was perfect – sunny and blue skies. There were some incredible entrepreneurs, CEOs, investors and political leaders in attendance, and the energy was overwhelming.

The JOBS Act is a bipartisan initiative meant to help small businesses raise money and ultimately stimulate job creation. The law focuses on two key areas:

1. Making it easier for small businesses to harness crowd-sourcing by reducing the barriers for raising small sums of money from many “investors” (think how Obama raised money for his campaign but now letting a small business to do the same for a business financing).

2. Allowing larger high-growth companies to go public with less onerous compliance (ie. gentler SOX requirements).

As you can imagine, the President signing the JOBS Act is a big deal for me personally, and more so for the millions of other entrepreneurs who are now going to have an easier time raising capital. Major congratulations to my friends Slava Rubin from indiegogo and Naval Ravikant from angellist for their impressive contributions in getting this bill across the finish line.

indiegogo

angellist

About Me

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Entrepreneur and Speaker Rahim Fazal a successful businessman,an MBA graduate, and a frequent and popular speaker. Link Arrow

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