Lately, I’ve been devoting most of my Next Avenue posts to advice for women in their 50s and 60s who are small business owners or want to be. So, in the spirit of New Year’s, how’s this for a resolution for women entrepreneurs? Think Bigger.
That’s the title of a recent book by Michael W. Sonnenfeldt, an accomplished serial entrepreneur and founder and chairman of Tiger 21, a community of more than 500 entrepreneurs and investors who collectively manage $50 billion in personal assets. Actually, the full title is Think Bigger: And 39 Other Winning Strategies from Successful Entrepreneurs.
I found the book extremely helpful for anyone launching a small business or eager to do so. After reading it, I interviewed Sonnenfeldt to hear more, as well as one of the entrepreneurs featured in the book, Linda Abraham, 55, who co-founded two companies after starting her career at Procter & Gamble. She is now an angel investor and board member at a number of start-ups, including vice chair of Upskill, an augmented reality software company.
But the book could be especially useful for women because, according to Sonnenfeldt, female entrepreneurs have one obstacle that men don’t. “It’s tough for anyone to build a company out of nothing more than an idea, but I have found that all too frequently the female entrepreneurs I know have been underestimated in such a pathological way that the only word that can accurately describe it is sexism,” he wrote.
Sonnenfeldt also thought women entrepreneurs have an advantage over men, though. “There is evidence that, on average, the kind of entrepreneurial activities that really require team building and environments that are particularly well-run and sensitive to the dynamics between the members, are where some women have the competitive advantage — particularly women who are now older and have many years of experience to bring to the table,” he told me. “Many entrepreneurial successes depend on an exquisite form of human understanding and organizational leadership that women have the edge on.”
Here are eight of my favorite “winning strategies” from Think Bigger and my conversations with Sonnenfeldt and Abraham:
1. Seek out mentors. “What saved me, time and time again, wasn’t my education, but the wisdom of other people who had already been through something I was wrestling with for the first time and their perspectives gained over decades of experiences,” Sonnenfeldt wrote.
2. It’s okay to wear rose-colored glasses at times.“The best entrepreneurs do display certain psychological and character traits that are common to success stories in other fields — like self-discipline, grit and tolerance for risk — I would bet that the most successful among us tend to have even higher levels of those trails, supercharged by an optimism that psychologists would label delusional,” Sonnenfeldt wrote. “To overcome the skeptics and naysayers, nearly all entrepreneurs need grit and a level of optimism that can seem delusional.”
3. Don’t go it alone. Sonnenfeldt is a firm believer that the best entrepreneurs get help from others. “What are your blind spots?,” he asks. “If you don’t have an answer (or believe you have none) you need to assemble your own personal board of directors to help you evaluate how well you’re managing your business, your money and your personal life.”
4. Curiosity is another secret ingredient to a winning strategy. “Yes, entrepreneurs need an idea, they need passion, and they need self-confidence and grit to keep their business afloat,” Sonnenfeldt wrote. “But to grow a company and stay out in front of the competition, to catch the eye of a buyer, and certainly to start a second business or more as so many Tiger 21 entrepreneurs have done, you have to show some imagination in figuring out how to better serve your clients and create new customers and new products and even new product categories and business models.”
Sonnenfeldt recommends you start by “asking yourself some tough questions about your business, its future and your customers. What do they need that you’re not offering? How do you boost your business to the next level? Do you need to change your business model? Do you need to bring in someone to help you?”
Abraham told me that when she’s considering backing a start-up, she looks for a sharp understanding of the market for the person’s product or service. “There is often a certain naiveté about the demand in the marketplace for their idea, Abraham said. “You have to have a vision about where you are going in a big picture, but you must know how you are going to get there right now.”
5. Live below your means. “Many entrepreneurs I know would argue that frugality played as large a role in their success as their ideas or business skills, ensuring that they had the critical capital they needed at just the right moments to expand their businesses and fund investment ideas,” Sonnenfeldt wrote. “Most would say during their wealth-building years — through their twenties and thirties, and often through their forties and fifties — they consumed less than 50% of their income, either saving or reinvesting the balance in their businesses.”
6. When you need to raise money, turn to pros rather than friends and family. When I asked Abraham to name the biggest hurdle for boomer female entrepreneurs, she replied: “Raising capital. I am sorry to say that, but it’s true.”
Sonnenfeldt’s tip: “One piece of advice that I would have for people in their 50s to 60s years old is really try to get professional capital, because if you have a good idea that is going to do well in the marketplace, the professionals will validate it and put a proper price on it,” he told me.
When looking for financing to start a business, he added, “don’t use the low bar of friends and family, but use the high bar of professional investors. You might not get as high a validation, but you will be getting a piece of market validation about the potential of your new venture that will give you some very early feedback that you would avoid getting until it was too late otherwise.”
7. Be involved in all segments of your start-up. Pay attention to all aspects of business — even the ones that don’t interest you, Abraham said. “Don’t delegate until you really know how to do something yourself,” she added.
8. Don’t ignore skills you’ve developed in other aspects of your life. If you’re a woman starting a business in your fifties or older and have been a parent, many of your parenting skills can translate into managing employees to help them succeed, Abraham said. Each staffer has individual challenges and you need to bring out the best in each one, she noted, so they can “punch above their weight.”