Talking to Children About Violence

Tips for Parents and Teachers

High profile acts of violence, particularly in schools, can confuse and frighten children who may feel in danger or worry that their friends or loved-ones are at risk. They will look to adults for information and guidance on how to react. Parents and school personnel can help children feel safe by establishing a sense of normalcy and security and talking with them about their fears.

1. Reassure children that they are safe.

Emphasize that schools are very safe. Validate their feelings. Explain that all feelings are okay when a tragedy occurs. Let children talk about their feelings, help put them into perspective, and assist them in expressing these feelings appropriately.

2. Make time to talk.

Let their questions be your guide as to how much information to provide. Be patient. Children and youth do not always talk about their feelings readily. Watch for clues that they may want to talk, such as hovering around while you do the dishes or yard work. Some children prefer writing, playing music, or doing an art project as an outlet. Young children may need concrete activities (such as drawing, looking at picture books, or imaginative play) to help them identify and express their feelings.

3. Keep your explanations developmentally appropriate

  • Early elementary school children need brief, simple information that should be balanced with reassurances that their school and homes are safe and that adults are there to protect them. Give simple examples of school safety like reminding children about exterior doors being locked, child monitoring efforts on the playground, and emergency drills practiced during the school day.
  • Upper elementary and early middle school children will be more vocal in asking questions about whether they truly are safe and what is being done at their school. They may need assistance separating reality from fantasy. Discuss efforts of school and community leaders to provide safe schools.
  • Upper middle school and high school students will have strong and varying opinions about the causes of violence in schools and society. They will share concrete suggestions about how to make school safer and how to prevent tragedies in society. Emphasize the role that students have in maintaining safe schools by following school safety guidelines (e.g. not providing building access to strangers, reporting strangers on campus, reporting threats to the school safety made by students or community members, etc.), communicating any personal safety concerns to school administrators, and accessing support for emotional needs.

4. Review safety procedures. 

This should include procedures and safeguards at school and at home. Help children identify at least one adult at school and in the community to whom they go if they feel threatened or at risk.

5. Observe children’s emotional state.

6. Limit television viewing of these events.

Some children may not express their concerns verbally. Changes in behavior, appetite, and sleep patterns can indicate a child’s level of anxiety or discomfort. In most children, these symptoms will ease with reassurance and time. However, some children may be at risk for more intense reactions. Children who have had a past traumatic experience or personal loss, suffer from depression or other mental illness, or with special needs may be at greater risk for severe reactions than others. Seek the help of mental health professional if you are at all concerned.

Limit television viewing and be aware if the television is on in common areas. Developmentally inappropriate information can cause anxiety or confusion, particularly in young children. Adults also need to be mindful of the content of conversations that they have with each other in front of children, even teenagers, and limit their exposure to vengeful, hateful, and angry comments that might be misunderstood.

7. Maintain a normal routine.

Keeping to a regular schedule can be reassuring and promote physical health. Ensure that children get plenty of sleep, regular meals, and exercise. Encourage them to keep up with their schoolwork and extracurricular activities but don’t push them if they seem overwhelmed.

Suggested Points to Emphasize When Talking to Children.

School staff work with parents and public safety providers (local police and fire departments, emergency responders, hospitals, etc.) to keep you safe.

The school building is safe because … (cite specific school procedures).

Schools are safe places

• We all play a role in the school safety.

Be observant and let an adult know if you see or hear something that makes you feel uncomfortable, nervous or frightened.

• There is a difference between reporting, tattling or gossiping.

You can provide important information that may prevent harm either directly or anonymously by telling a trusted adult what you know or hear.

• Don’t dwell on the worst possibilities.

that it will affect our school.

• Senseless violence is hard for everyone to understand.

Although there is no absolute guarantee that something bad will never happen, it is important to understand the difference between the possibility of something happening and the probability

Doing things that you enjoy, sticking to your normal routine, and being with friends and family help make us feel better and keep us from worrying about the event.

• Sometimes people do bad things that hurt others.

They may be unable to handle their anger, under the influence of drugs or alcohol, or suffering from mental illness. Adults (parents, teachers, police officers, doctors, faith leaders) work very hard to get those people help and keep them from hurting others. It is important for all of us to know how to get help if we feel really upset or angry and to stay away from drugs and alcohol.

• Stay away from guns and other weapons.

Tell an adult if you know someone has a gun. Access to guns is one of the leading risk factors for deadly violence.

• Violence is never a solution to personal problems.

Students can be part of the positive solution by participating in anti-violence programs at school, learning conflict mediation skills, and seeking help from an adult if they or a peer is struggling with anger, depression, or other emotions they cannot control.

NASP has additional information for parents and educators on school safety, violence prevention, children’s trauma reactions, and crisis response at www.nasponline.org.

©2006, National Association of School Psychologists, 4340 East West Highway #402, Bethesda, MD 20814

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6 Simple Fixes for Wet Basement

Do you dread going into the cellar during a hard rain? You just know you’re going to see puddles on the floor or get a sneezing fit from the musty air. A wet basement – a problem that plagues about 60% of homeowners, according to the American Society of Home Inspectors – is not a situation to ignore.

Even intermittent leaks can rot your house’s structure, attract termites and carpenter ants, and
cause noxious molds to flourish. Any of those could require costly repairs or sink your property
value (you know, when people start buying houses again). But you can usually stem the tide with a
few simple fixes that don’t cost a bundle.
Start outside.

If you notice recurring dampness or puddles in a particular part of your basement, head outdoors. Walk along your house to the spot closest to where the leak is occurring. Look up. Chances are the problem is one of three things: a bent, clogged or missing gutter that’s dropping roof runoff near the foundation; a down-spout that’s releasing its load too close to the house; or an underground collection pipe that has become clogged or broken. A handyman can fix any of these problems for as little as $200 by, for example, replacing the gutter or adding an aboveground discharge pipe that extends at least three feet from the house.

Cover the windows.

Is your leak under a basement window? Blame the “well” – the exterior dugout that permits the window to sit below grade. It’s funneling rainwater against the foundation, where the water is finding a crack or seam to get in. The easiest fix is a clear plastic well cover (cost: $35 to $45 at home centers) that keeps the water out but lets the sun shine through. If you can’t find the right size or shape at the store, go to windowbubble.com.

Plug cracks and holes.

Watch for water entering through seams between concrete blocks, cracks in old concrete or holes where pipes penetrate the foundation. If you find such gaps, fill them with hydraulic cement (cost: $10 for a 10-pound container – probably more than enough – at any hardware store). Just mix water with this powder to get the consistency of toothpaste and press as much of it as you can into the opening after you brush out any loose debris. It will harden into a watertight seam.

Seal damp walls.

Sometimes water seeps right through the pores of a foundation wall or floor, leaving a telltale white powder behind when it dries. Sure, you could fix the problem by having the exterior of your foundation waterproofed, but that would mean excavating the yard – and paying $5,000 to $15,000. Treat the interior surface instead by painting on Xypex, a professional-grade brush-on sealant (cost: about $130 for enough to cover one wall). It’s not available at home stores, but you can get it by calling 800-363-2002.

Dry the air.

Even if you don’t have any leaks, high humidity is all that mold needs to take root on organic materials such as wood, wallboard and even dust. So if your basement air smells musty, pick up the largest Energy Star-rated, digitally controlled dehumidifier you can find (cost: about $300). Forget about the built-in collection bucket – there’s no way you’ll empty it every day – and instead use a plastic hose to discharge the water into a utility sink or floor drain. Some water-proofers advise setting the controls to 50% humidity, which is too dry for mold.

Bring in the big guns.

If you’re getting full-scale floods or see water entering between the wall and the floor, call a basement waterproofing company. Go to the website of the National Association of Waterproofing and Structural Repair Contractors (nawsrc.org), find a few local companies and ask for a free assessment. They will probably recommend a sump pump, an in-floor machine that removes water under your cellar and costs about $2,000 installed. (Aboveground pumps are meant for emergencies, not long-term use.) The best units have a second pump for extreme rainstorms and a battery-operated third in case of a power outage.
The company may also recommend adding an in-floor gutter (cost: $3,000 to $5,000) around the perimeter of your basement floor to collect water and deliver it to the pump. Make sure that the firm you choose provides a warranty that your basement will remain dry for the life of the building. You’ll never be afraid to head downstairs again.

The Scoop on Closing Costs

Are you a buyer preparing to close on a house? Now is a good time to refresh yourself on the most common closing costs.

There are more expenses to buying a house than just the monthly mortgage payment. More than likely you’ll need to come up with some cold, hard cash in order to finalize the deal.

Here are some common closing costs to consider:

Down Payment: Due to today’s economic climate, most buyers will need to put down at least 20 percent. This makes good financial sense. If you can’t afford to put 20 percent down then you probably can’t afford to buy this particular house.

Loan Origination: This is what the lender charges you to underwrite the loan, meaning what they charge for their time and all the paperwork they need to do.

Points: You’ll often see that different lenders have different “rates” and different “points” they charge. By paying points, you can receive a lower interest rate, but this means more cash at closing.

Credit Score: You can access your credit report for free at annualcreditreport.com, however, in order to see your credit “score” — the magic number that lenders use to determine your interest rate — you’ll need to pay a small fee.

Home Inspection: You want to be sure, no matter if the house is new or old, that you get a home inspection by a qualified inspector. You may love the house and the price, but if you find out that a big ticket item needs replaced you will be able to renegotiate the price or decide to change your tune on buying the home. A typical inspection will run you from around $300 to $500.

Private Mortgage Insurance (PMI): This is what a lender charges if you are putting less than 20 percent down on the cost of the home. It usually runs about 2 percent of the total cost of the loan and is simply a safeguard to protect the lender should you default.

Other Small Fees: Insurance escrow, property tax escrow, notary feeds, land surveys, deed recording, etc. Be sure to ask your real estate agent which will apply to your contract and what the expected costs will be.

Congratulations on the decision to buy! Owning a home can be a wonderfully fulfilling experience. Just be sure you’re ready for the closing costs coming your way!

The 4 C’s of Mortgage Underwriting

I thought today might be a good time to review the basics of what lenders look for as they decide to approve (or deny) mortgage applications. For at least 25 years, I have heard them called “The 4 C’s of Underwriting”- Capacity, Credit, Cash, and Collateral.  Guidelines and risk tolerances change, but the core criteria do not.

CAPACITY

CAPACITY is the analysis of comparing a borrower’s income to their proposed debt. It considers the borrower’s ability to repay the mortgage. Lenders look at two calculations (we call ratios). The first is your Housing Ratio. It simply is the percentage of your proposed total mortgage payment (principal & interest, real estate taxes, homeowner’s insurance and, if applicable, flood insurance and mortgage insurance – like PMI or the FHA MIP) divided by your monthly, pre-tax income. A solid Housing Ratio (often called the front end ratio) would be 28% or less; although, at times loans are approved at a significantly higher number. That’s because your front end ratio is looked at in conjunction with your back end ratio.

The back end ratio (referred to as your Debt Ratio) starts with that mortgage payment calculation from the Housing Ratio and adds to it your recurring debts that would show up on your credit report (auto loans, student loans, minimum credit card payments, etc.) without taking into consideration some other debts (phone bills, utility bills, cable TV). A good back ratio would be 40% or less. However, loans sometimes are granted with higher debt ratios. Understand that every application is different. Income can be impacted by overtime, night differential, bonuses, job history, unreimbursed expenses, commission, as well as other factors. Similarly, how your debts are considered can vary. Consult an experienced loan officer to determine how the underwriter will calculate your numbers.

CREDIT

CREDIT is the statistical prediction of a borrower’s future payment likelihood. By reviewing the past factors (payment history, total debt compared to total available debt, the types of monies: revolving credit vs. installment debt outstanding) a credit score is assigned each borrower which reflects the anticipated repayment. The higher your score, the lower the risk to the lender which usually results in better loan terms for the borrower. Your loan officer will look to run your credit early on to see what challenges may (or may not) present themselves.

CASH

CASH is a review of your asset picture after you close. There are really two components – cash in the deal and cash in reserves. Simply put, the bigger your down payment (the more of your own money at risk) the stronger the loan application. At the same time, the more money you have in reserve after closing the less likely you are to default. Two borrowers with the same profile as far as income ratios and credit scores have different risk levels if one has $50,000 in the bank after closing and the other has $50. There is logic here. The source of your assets will be examined. Is it savings? Was it a gift? Was it a one-time settlement/lottery victory/bonus? Discuss how much money you have and its origins with your loan officer.

COLLATERAL

COLLATERAL refers to the appraisal of your home. It considers many factors – sales of comparable homes, location of the home, size of the home, condition of the home, cost to rebuild the home, and even rental income options. Understand the lender does not want to foreclose (they aren’t in the real estate business), but they do need to have something to secure the loan against, in case of default. In today’s market, appraisers tend to be conservative in their evaluations. Appraisals are really the only one of the 4 C’s that can’t be determined ahead of time in most cases.

Now, each of the 4 C’s are important, but it’s really the combination of them that is key. Strong income ratios and a large down payment with strong reserves can offset some credit issues. Similarly, long and strong credit histories help higher ratios….and good credit and income can overcome lesser down payments. Talk openly and freely with your loan officer. They are on your side, advocating for you and looking to structure your file as favorably as possible.

It’s Not What’s In the Plan — It’s What You Do With It!

It’s Not What’s In the Plan — It’s What You Do With It!

The mistake usually starts with, “I’m not interested in meeting investors now. We’ll raise funding next quarter; I’ll meet them then.” Here’s the problem: Business plans are neither written nor shopped in a vacuum. There’s certainly a balance between soliciting valuable input and prematurely disclosing your secrets. That said, developing your plan in “splendid isolation,” as the late Warren Zevon sang, is a mistake.

In advising founders, I try to make three points clear: (1) Shop the plan before it exists. (2) Timing is critical. (3) Shopping a plan is a team sport. At the end of this post, I’ll share an example of how one startup, KeatonRow.com, successfully managed this process.

1. Pre-shop: Shopping your plan without a warm introduction is tantamount to not shopping it all. So how does a founder who doesn’t know investors get to know them? Developing a vibrant social-media presence is a necessary prerequisite. Savvy use of social media enables you to track, engage and grow your network.

You also need to spend plenty of time doing networking the old-fashioned way: in person. Your networking efforts cannot come too early. Networking is best accomplished when you don’t have an agenda other than building relationships with people you respect, knowing that those relationships may later prove useful. Don’t waste time trying to develop relationships with people you neither like nor respect…those end up being low yield for all involved. So if there are folks who’ve impressed you, make the effort to get to know them before you write your plan, but don’t only focus on the most senior people. Junior people at funds can be enormously helpful (and are often really good people, too).

Grow your network early because you want your target audience to know and think favorably of you — and because you want to know and to have developed informed opinions of them. The venture community operates under the premise that cash is fungible, but investment capital is not – there must be some chemistry in the relationship between angel or venture investor and entrepreneur because these relationships hinge upon trust, rapport and a set of shared expectations and goals. It takes time to assess whether you feel someone will be a good and productive partner. As one founder I’ve backed put it, “I’m starting to fundraise, but I only want to meet people I already know!”

2. Timing: For the reasons outlined in my prior WSJ post regarding the Series A Funding Cliff, I think we’re heading into a period in which fewer companies will raise next round funding and deals, so get a running start!

3. Team sport: Elenor Mak and Cheryl Han, co-founders of Keaton Row, provide an excellent example of how shopping your plan is a team sport.

Elenor was careful to check in with her Harvard Business School classmate Dan Scholnick, a general partner at Trinity Ventures, even though he did not fund her business. Dan supplied advice and made several introductions, including to me. In turn, I suggested that Keaton Row apply to First Growth Venture Network (which I chair and which doesn’t charge). Through FirstGrowthVN, Elenor and Cheryl refined their business plan and expanded their network. They leveraged those relationships, as well as many others, to meet and develop a rapport with numerous investors and advisers. They also maintained warm relationships with people who have known them long enough to serve as compelling references, including Scholnick. (In the interest of disclosure, I’m an investor in Trinity’s most recent fund).

As I saw the progress they made, as well as how they responded to testing they’d done, I asked them if they’d let me invest and suggested I could make introductions to friends. At that point, I had not reviewed a final business plan, but had spent dozens of hours with them and with others who knew them. Through several different means (including FirstGrowth) they met Rho Capital, and Rho decided to invest as well.

Elenor and Cheryl had marshaled their resources incredibly effectively so that they had an investor base of experienced angels who were a combination of friends, former bosses (it’s a great stamp of approval to have your former boss write a check to back your business!) and friends-of-friends. They carefully, and on a shoestring budget, orchestrated a closing dinner in NYC’s Chinatownto which they invited all of their new investors, team members and an alpha customer. They suggested we go around the table and explain why we were excited about Keaton Row. They’d written a killer business plan, but nobody mentioned it: Instead, strikingly, those present commented on the founders, the progress they’d made, the vision, the way they had communicated over the months with each of us. And what did Dan Scholnick get? He paid it forward, enhanced his reputation and relationships and, in the long run, venture is a field in which, all other things being equal, nice guys should finish ahead!

If the Series A Funding Cliff gets steeper, entrepreneurs like Elenor and Cheryl will be fine – they may have to run harder and be more patient, but there will always capital for founders like them. So for me, the question is not how thoroughly you’ve researched the growth rate of the addressable market, it’s how effectively you can build a team of people who want to help and back you because they believe in you and your vision.

‘Don’t Need No Stinking’ Business Plan

Business plans? Entrepreneurs don’t need no stinking business plans…

In the past, business plans were a big deal. They set the vision for your company and included all sorts of projects about growth and earnings. Unfortunately they completely missed the mark of making sure there were customers willing to buy your product. Business plans are like the outdated waterfall development model, which basically doesn’t encourage you to get customer feedback until the product is already built. This model doesn’t work in the startup world and can cause founders to lose their shirts by sinking in massive amounts of time, money and resources into features no one is willing to pay for.

Today, ask any successful investor, adviser or entrepreneur in the Valley, they will tell you that you don’t need a business plan. Launching a company today is much easier than 15years ago when thick stacks of paper fresh off your HP laser printer were cool. Today it’s about building fast, building lean and learning the whole time by including your customers in the process from day one. Steve Blank is a big advocate of collecting customer development as you build your startup. I recently attended a new program here in San Francisco that helps founders learn how to build lean, scrappy companies. It’s called Next and is run by Startup Weekend and Steve Blank was a mentor over the five-week program. The first night, they put us out on the street and told us we had to earn as much money as we could in 45 minutes. This caused us to think about what we could sell. Many of our ideas were around entertainment and creating content (sing a song, draw a picture). On average, we earned one dollar for one minute of “performance art.” It was very humbling and we quickly learned what worked and what didn’t through this exercise. One thing Steve always says is in order to learn, you have to leave the building. I wonder how many entrepreneurs would benefit from this real world experience if forced to leave the safety of their desks.

But wait, let’s clarify the target audience here. For the sake of this article I’m referencing early stage founders of technology startups. If you’re launching a small business such as new brick and mortar store selling custom pottery or coffee and bagels, get outta here and start reading the WSJ Small Business Guide. I suggest you look up SCORE, a national organization with really great mentors. They will help you solidify your ideas and probably help you write a safe, low risk business plan. This article is for founders who are willing to risk it all, live lean and learn fast to build a billion dollar empire from their vision.

For startup founders, think of the business plan as a document to keep you accountable with a three to five year strategy. It’s not a living document. It’s on paper so that’s your first clue. This will show your potential investors and employees that you are prepared to build, grow and run a successful company with a long-term vision in mind. Founders often go wrong when it comes to listening. Whether they’re unwilling to explore a new business model or stubbornly ignore advice from mentors, sometimes it takes a some headbanging for them to come around. If you’re at the idea stage with no product and haven’t talked with any potential customers, this is the worst time to work on a business plan, as you have no baseline or data to work from. You’re working in a vacuum and you’re doing it wrong. Hopefully you will realize this before you have to cash in your IRA and spend those shiny silver dollars Grandma sent you for the holidays.

Maybe you’re further along. You have a product, you have a small team of people who share your vision and customers are giving feedback that would require you to adjust your targeted user base plus increase your marketing budget. Do you listen to them? Who do they think they are anyway? Conflict and decisions are the spices of startup life.

The fantastic thing about being lean is you can set up small but measurable tests. Listen to your customers, collect their feedback and allocate time over a weekend or a few days to build out a rough prototype of their ideas. Now leverage other customers to test your hypothesis. And flip it around the other way. Within two weeks you should have collected enough data to confirm the need for a bigger login button, the ability to sync user data wirelessly or change the interface to be more intuitive. Now the feedback is justified with data and everyone can move on with their day.

Speaking of user feedback, now is a great time to make it easy for your users to contact you for support and give this very valuable feedback. Tools like Zendesk, GetSatisfaction and SnapEngage make it easy to instantly add a helpdesk, forums and live chat to your application without much in the way of cost, implementation or developer resources. Your customers now have an outlet to communicate with you, build community around your product and get real time support.

Business plans are like having a Blackberry — they’re going out of style fast and it’s hard to remember why you even began using them in the first place.

Startups are about endless cycles of small changes, but that doesn’t mean you shouldn’t be as prepared as if you’re driving somewhere with no destination.

Drop the bulky business plan and embrace the one-sheet executive summary. Many startups are finding success using this simple, straightforward document to attract investors, advisers and the developer talent needed to make their product a reality.  What is the one sheet you ask? It’s an executive summary boiled down to the bare essentials. Pair this with a solid pitch deck and a working demo of your MVP (Minimally Viable Product) and like a freshly glazed Krispy Kreme doughnut paired with a cold glass of milk, you’re all set. OK, maybe that’s too many carbohydrates for most of you low carb paleo entrepreneurs. I’ve seen founders make presentations to angel investment groups and raise millions of dollars with this trio — executive summary, pitch deck and an MVP demo.  Silicon Valley is fast paced and no one has time to read through your eighty page business proposal.

Earlier this year I had the opportunity to meet with Gretchen DeKnikker, co-founder ofSocialPandas, who closed a $1.5 million seed round with this formula. SocialPandas is a solution that will help millions of companies using CRM tools like Salesforce convert sales through social media and track those sales. After launching their MVP into alpha, Gretchen and her two co-founders, Mark and Jason, created a one sheet executive summary and pitch deck outlining the company’s vision, why they were the right founders to execute on this vision, and the market opportunity for their product.

Investors want to see that you have done your homework and are presenting them with the things they care about when they look over all the pitches from startups just like yours . Can you build this company?  Do you have the domain expertise in this vertical? Does your product have traction? How will you set yourself apart in this market?

Of course it certainly helps to build your network so don’t forget to get out there and meet new people. Charles Hudson shared great story on a panel hosted recently by Andreessen Horowitz about how someone who worked as an intern under Charles at a previous job actually helped land Charles his role at Google as New Business Development Manager in 2006. That’s a lesson; be respectful, humble and nice to everyone you meet. You never know when someone you’ve met will show up again just when you need them.

Founders, the point is don’t waste time, listen to your customers and have a long-term plan to compliment your vision…but keep it short!

 

Burn Your Business Plan – Before It Burns You

Burn Your Business Plan – Before It Burns You

Founders go wrong when they start to believe their business plan will materialize as written. I advise entrepreneurs to burn their business plan — it’s simply too dangerous to the health of your business. Believing in them is illusional, because, to quote Steve Blank (fellow WSJ Accelerator ): “No business plan survives first contact with customers.”

As any seasoned entrepreneur and investor will tell you, however hard you think about your venture, the reality of the market will always be different. In fact, countless winners of business plan competitions learned that truth the hard way when their prized plans succumbed to market forces.

Hence, we need to have a more dynamic methodology for entrepreneurship than static business plans. A learning approach that stress tests your business ideas with real market forces and iterates through plan A, plan B, plan C, and so on — quickly and cheaply – until you’ve nailed it.

You’ve burned your business plan – now what?The good news is that we’ve now figured out how to replace business plan writing with a more reliable process that produces better results. It’s a process that supports you in your search for a scalable and profitable business model by combining three different methods in a powerful cocktail: Business model design with the Business Model Canvas tool; Business model testing with theCustomer Development methodology); Rapid prototyping with the Lean Start-up methodology. Steve Blank calls this the start-up stack.

Entrepreneurs around the globe are already practicing this method mix with great success from Silicon Valley to Switzerland, Colombia to Kenya, Singapore to Shanghai. These entrepreneurs avoid three common pitfalls:

1 – Falling in love with your first idea, without exploring alternatives

The same products, services or technologies can fail or succeed depending on the business model you choose. Exploring the possibilities is critical to finding a successful business model. Settling on first ideas risks the possibility of missing potential that can only be discovered by prototyping and testing different alternatives.

When Nespresso, a corporate start-up by food giant Nestlé, launched their revolutionary single portioned espresso machines they almost went bankrupt. Only after the introduction of a new business model did they grow to a 3 billion USD business.

When Xerox launched the first photocopier they couldn’t sell their technology until they found a business model that spread the machine through leasing and earned profits from small amounts of a large amount of photocopies. Entrepreneurs who understand business model design explore extremely different alternatives, rather than falling in love with their first idea.

2 – Not listening to customers hard enough

Constantly talking to real potential customers from the very inception of your ideas all the way to their execution is a prerequisite for any serious founder. Great entrepreneurs are often great listeners and they can spot patterns and pick up on small details in customer stories.

For example, good listeners try to get beyond what customers ”want”, towards understanding the jobs customers are trying to get done and the pains and gains they encounter related to them. Clayton Christensen, one of my favorite academics, often quotes legendary Harvard professor Theodore Levitt to illustrate this: ”People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” As an entrepreneur you want to figure out what the pains and gains related to getting that quarter inch hole are. That’s where you will create value for customers.

3 – Not testing hard enough

Once you have an idea of those customer jobs, pains, and gains you don’t want to rest until you’ve tested if what you’ve learned from talking to customers is actually real. Actions speak louder than words. There is a big difference between what people say and what they do. People might tell you they are excited about your new product, but when they are in a buying situation their behaviour might be totally different.

Get potential customers to perform real actions. This could be, for example, something as small as getting them to sign up with their email for the launch date of your upcoming product. Or, market a so-called minimum viable product (MVP) – a product or service prototype with a minimal feature set – to early adopters. What you will learn will be invaluable.

Do it the right way!

Many founders come to me for advice. They show me their Business Model Canvas and ask me what I think. My response is always the same: “Have you tested it?” The Business Model Canvas is an excellent tool to help you design better and more profitable business models. Yet, without combining it with business model testing it’s just as static as a business plan. The market might reject even the smartest business model design if it’s not stress tested.

Today we know how it works. Make the hypotheses underlying your business model canvas explicit, test the most important ones with customers and partners and integrate the learning into a new business model design. Repeat until you’ve nailed it. The tools and processes that replace business plan writing are there. Use them.