Tuesday, May 29, 2007

Lesson #24 - Build a Reputation

"You can't build a reputation on what you are going to do."

- Henry Ford

An Entrepreneur is only as good as his or her reputation. In the business of startups, maintaining a solid reputation is difficult. A reputation is built on consistency - and living in an ever-changing environment of a startup makes it very hard to demonstrate consistent behavior, action and attitude.

The first thing I learned about building a reputation is that is has nothing to do with success and failure. Entrepreneurs fail. Entrepreneurs succeed. The reputation is built on how the entrepreneur handles success and failure.

Here are some keys to building a reputation:

1. Action not words. I have learned a reputation lives and breathes on action. Nothing is more empowering to a reputation than telling someone you will do something, and then actually doing it. There is always doubt in the minds of people when you promise action, and unless you prove to them you act on your word - the doubt will be confirmed.

2. Accept responsibility. With actions comes responsibility. When you take action, you are making a decision to own the result. Whether the result is good or bad, you must take responsibility. Failure is not a weakness - it defines your character. The words "I take full responsibility" are the words of a leader, not of a loser.

3. Do what is right. As an entrepreneur, you are faced with a lot of difficult decisions. You are constantly torn between what is best for the company and what is best for the founders, investors or even employees. Many times "conflict of interest" is in the forefront of major decisions and there is no way to avoid or remove it. Obviously it is important to have full disclosure, and to maintain an open and honest dialogue - but above all else - you must do what is right.

4. Be Blunt. In order to build a reputation with someone you first need to earn their respect. As you have conversations with co-workers, investors or partners - it is important to be honest even though the truth is damaging to your agenda. When someone asks a "Yes/No" question, answer with Yes or No. Be honest, and be blunt with your answer. A colleague of mine who worked in sales and business development for many years told me "Any answer other then the word 'yes' is 'no'". If someone asks you if you have experience raising capital - and you begin a long diatribe about how you have experience in investment banking, and worked for a VC funded company once....etc...etc - the answer they will hear is "No"... so just say "No". Don't be embarrassed or ashamed to answer "No". Its good answer.

5. Be Yourself. Sometimes in life in order to be accepted or "fit in" you need to behave differently and downplay your personality. Sometimes you need to sacrifice your values, beliefs and potentially your morals just to avoid feeling alienated. Big mistake. Building a reputation is only possible is you consistently be yourself and convey your own values, beliefs and morals to others.

6. Be Humble. Success speaks for itself. One of the values of having a good reputation, is that you don't have to "sell your credibility" to everyone you meet. Letting your actions speak for your character is the best way to communicate who you are. Be humble, and let other people speak highly of your achievements.

7. Build your Brand. Reputations are powerful, but typically limited to your local business community and your extended network. If you are like most entrepreneurs, you want to grow your network and reputation beyond where you live. One of the most effective ways to build a "personal brand" is to have a strong online presence. There are many tools that allow you to grow your network including social networking, forums and blogs. There is a fine line between self-promotion and stroking your ego - but the exercise of online networking and publishing can be a very effective way to meet new people, express your ideas and create an 'online' reputation.

8. Keep in touch. If you are like most people - keeping in touch with colleagues, friends and even family can be very tough - especially when you are focused on a new venture. Make it a point to prioritize your network and gather information about your business connections that make it habit to connect frequently. Even if your current daily activities don't ever cross, it is important to reach out to past relationships and to maintain the friendships.

9. Get Social Proof. One of the most powerful ways to build credibility and a relationship is to have social proof. Social proof is when credible 3rd parties validate you. A good example would be if you served on the board of a local charity, or if you were a speaker at a convention. The idea is that you were "approved" by known parties that have an existing reputation. In order to get social proof, you need to donate your time to good causes and organizations.

10. Create Passion. You can do everything right that I outline above, and build a large network of people who know your accomplishments and think highly of your reputation - but if you lack passion - no one will care. Passion is contagious. In order for a reputation to flourish, it needs to spread beyond your close network of friends. Just like a bad reputation can spread due to a few passionate people, a good reputation will spread faster if you create passion. Have passion for your work, your life and your family and friends - and your reputation will blossom.

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