Every startup and every big business wishes that all their employees were star performers, but wishing doesn’t make it happen. Some coaches and leaders seem to have the magic for bringing out the best in everyone. Research has shown that it isn’t magic, but a focus on engaging people in their work, so that their work triggers the same emotions as play does for you.

Some of you cynics may think that such a thing isn’t possible, but Shawn Kent Hayashi, who has worked for years with entrepreneurs, as well as Fortune 500 giants, argues otherwise. In her new book, “Conversations for Creating Star Performers,” she offers examples and ten strategies to leverage conversations into game-changing moments for team members and your company:

1. Build awareness of expectations. Conversations about what effective performance looks and sounds like are an obvious strategy, but too often found missing. No team member knows what they don’t know, so regular communication from leaders is key.
2. Understand individual motivators. Star performers are always people who have aligned their work to their values so that they are passionate about what they are doing, and the work will feel like play. Great leaders align the values of work to their team.
3. Capitalize on the strengths of each team member. When hiring or inheriting new team members, it’s important to discuss their strengths, development areas, and blind spots early. Always try to align people’s roles to their natural talents and interests.
4. Help team members develop a plan for their future. Take the time to develop individualized development plans for every team member, as a joint effort. Focus should be on current strengths, blind spots, where they want to go, and how to get there.
5. Make new skill development an ongoing priority. Survival in today’s fast-moving business world requires continuous learning and broadening of your skills. You will need to be inspiring and connect the dots to show the benefits of new abilities.
6. Get people unstuck and back on track. People don’t get back on track unless they know there is a problem. It’s up to you to give the tough feedback, without emotion, while keeping it in context. Then, with clarity, provide the next steps to get back on track.
7. Support team members in being accountable. Communicate the measurable results expected, and get a commitment for specific action steps and timeframes. Remember that you must role model and reward accountability to get it from your team.
8. Provide real feedback on their performance. Performance feedback works and is appreciated when it is done often, and in the context of specific accountable actions. Once per year discussions, only when there is a problem, don’t work.
9. Celebrate successes and even small steps. Always affirm and reward team members often, and criticize infrequently. Experts say it takes five positive interactions to dilute one negative, if we want the relationship to thrive. Create a positive emotional wake.
10. Develop future leaders early. Successful competition in the marketplace is correlated to a company’s ability to attract, retain, and develop talent. Develop a deep talent pool and it’s never too early for succession planning. This forces you to think about how team members can grow to satisfy their long-term objectives and yours.

A strong and positive business culture is instrumental in bringing out and retaining stars. Top executives and leaders set the culture, but every manager’s actions and interactions with top performers and every team member solidify and drive that culture.

During the recent recession, it was easy to conclude that you have other priorities, and team members would perform at their best to keep their jobs. But keeping a job and top performance at the job are two different things. Now, as business confidence builds, it’s time to double-check how you’re treating all your potential star performers. They will love it or leave it.

Every entrepreneur has an idea for transforming a market with innovative new technology, or transforming society with a new process. But unfortunately, most of these ideas fail at the execution level, or are not truly innovative. Entrepreneurs who have been really transformative, like Steve Jobs and Walt Disney, seemed to know how to deal with all the right elements.

Jeffrey A. Harris, in his new book “Transformative Entrepreneurs,” provides examples of key elements of transformative ideas and leadership abilities that separate the winners from the losers. I found his observations, like the following, to be inspirational for those of us chasing an entrepreneurial dream:

1. It’s all about the people. Ideas have to be implemented well to change a market, or the world. Good implementation requires a plan, and a great plan and great operational decisions come from great people. That’s why investors look for entrepreneurs who have true grit, dogged persistence, and a disdain for the status quo.
2. Seek innovation that begets invention. It doesn’t always work the other way around. According to a recent MIT study, only about 10% of patents granted in the United States have any meaningful commercial importance and less than one percent are of seminal importance. True business titans deliver both invention and innovation.
3. Find enough venturesome capital. Nearly all new businesses aspiring to reach meaningful scale require some sort of outside funding to finance a competitive growth trajectory. The objective must be to get sufficient capital, with experienced and motivated counsel, to make the venture succeed.
4. Create a formidable and durable business model. Your business model is your value proposition. “Free” sounds like a great model, but it doesn’t imply value. Look for customer-focused value creation. Make your business model your competitive differentiation, like Fred Smith with Federal Express, or Ingvar Kamprad with IKEA.
5. Grab the next-mover advantage. First-movers have an initial advantage, but this position is fraught with risk, and often comes with a high price. Herb Kelleher, who started Southwest Airlines, wasn’t the first in the airline business, but he saw the need for low-cost short hauls, with exemplary customer service, and transformed the industry.
6. Failure is an option. Building a business from a raw start is hard, risky work. That means that the process of innovation is not always pretty and rarely successful. The best entrepreneurs always regroup after a failure, learn from prior mistakes, persevere, and launch a new venture with considerably improved odds of success.
7. Government matters. Government policies, initiatives, and leadership set the stage for economic growth, and provide resources for improving living standards, and enabling technological advantage. Transformative entrepreneurs pay attention and capitalize on these cues, rather than ignore or fight them.
8. Innovate or die. In a world connected through a broadband Internet and mushrooming social networks, information flows quickly and relatively seamlessly, expediting the pace at which new innovations gain traction and speed. Standing still is tantamount to giving up. It is not an option.

These elements and the people stories in the Harris book highlight just how difficult it is to build a truly transformative business, yet at the same time illustrate that it can be done, and has been done many times, with no correlation to geographic, ethnic, age, or sexual boundaries.

In fact, I’m convinced that it needs to happen more often, with all the challenges we have in our modern world. So it’s up to each of you to assess your activities, and your potential, to be transformative. Being there has to be a lot more satisfying than most of the professional feedback I hear about today.

A common misconception I often hear in the startup world is that non-profits are easy and safe, since they don’t have to pay taxes, and they don’t have to make a profit for their shareholders. In reality, from the feedback I get from non-profit executives, exactly the opposite is true.

Technically speaking, in the United States, a non-profit corporation or association is one which has been exempted from Federal income taxes by meeting the criteria set out Section 501(c) of the Internal Revenue Code, most notably religious, educational, and charitable entities. Other countries have similar exemptions for similar organizations.

Yet even a non-profit has to make a profit on everything it sells, in order to cover operating expenses (salaries, offices, equipment, research, travel, etc.), unless it relies wholly on donations. Even then, the business and leadership efforts to solicit and manage donations cost real money, and may be more difficult than the marketing and sales jobs of most startups.

Here are the common reasons I hear that make starting and running a non-profit actually more difficult than starting and running a conventional business:

1. Creating a non-profit 501(c) business is a long and arduous process. You can start an LLC for-profit in less than a month, often for less than $100. A non-profit 501(c)(3) status requires filing IRS Form 1023. The form must be accompanied by an $850 filing fee, and may take as long as two years to complete successfully.
2. Investors are not interested in non-profits. Even non-profits usually require startup funds for facilities, people, and inventory. But because they can’t project excellent returns on investment, no investors will likely be interested. Also, they can’t sell shares on the stock exchange to raise money, even though both the NYSE and Nasdaq are non-profits. That means they need to grow organically, or find a philanthropist.
3. Reputable non-profits need to keep their operating expenses low. This usually means keeping wages low, and no fancy facilities. Thus it’s hard to attract top-notch talent, premium locations, and first-class marketing campaigns. Managing volunteers, and running any organization with these constraints is a challenge.
4. Results are always subject to public scrutiny. Most startups, as private companies, don’t have to disclose their salaries and spending habits to anyone other than the IRS. Non-profits have to answer to watchdog organizations like Charity Navigator for how much of their proceeds actually make it to the causes they proclaim to support.
5. Some laudable non-profit missions are hard to sell to supporters. A common complaint from many non-profits is that both government and private funders would rather spend their dollars on ‘sexy’ causes such as children’s charities, cancer, and heart disease, rather than long-term causes like global warming and erasing hunger in Africa.

Unfortunately, misuse scenarios, like the lavish lifestyles of leaders and scams, have given the non-profit environment a bad name, making things even tougher. Even reputable organizations, supporting veterans, the police, firefighters or children, often raise eyebrows, with alarming real data like these from the 10 Inefficient Fundraisers report from the Charity Navigator website:

• Cancer Survivors’ Fund – 91% of donations spent on fundraising
• The Committee for Missing Children – 89% spent on fundraising
• Firefighters Charitable Foundation – 87% spent on fundraising
• Children’s Charity Fund, Inc. – 86% spent on fundraising
• Disabled Police Officers Counseling Center – 86% spent on fundraising

These numbers vividly show that non-profits with good causes can fail to achieve satisfying results, in the same way that for-profit startups often fail, even with good products. Despite these challenges, my advice is still to follow your heart and your passion when starting a business.

You shouldn’t choose a non-profit, or a for-profit, because one seems easier, or one can make more money. Do it because you love the cause, the service, or the product, and the challenges will get lost in the satisfaction and results you achieve along the way.

Many writers have outlined the critical success factors for product companies, like sell every unit at a profit, patent the design, and continuous product improvement. But recently I was asked about success factors for services startups, and I quickly realized that there is very little published to help the thousands of startups that fall in this category.

The distinction between product companies and services companies is easy to see. Products are tangible and can be consumed now or later, while services are intangible and have no shelf life. A product business can usually be scaled with minimal people, which can lead to enormous profits and “making money while you sleep.” Scaling services means cloning yourself.

Obviously we can find many critical success factors, like finding and retaining high-value customers, which apply to companies that are product centric or services centric. Here are a few which I believe are at least most relevant and important to the services arena:

1. Do what you know and what you love. If your business offers a service, like marketing or management consulting, you are the product. If you or any of your partners really don’t have the credentials, the commitment or the interest, you won’t succeed. Customers don’t like people who don’t show their passion and love for the job.
2. Make sure your service is innovative. Being the low-cost commodity level service provider is not a recipe for success. It’s hard to make up for a low margin by increasing your volume of work. You need to demonstrate innovative approaches, more knowledge, more productivity and superior results to get the references you need.
3. Networking and relationships. No expert or consultant can know everything they need to know. That’s why it is just as important that you can fill in the gaps by having the right relationship with people to back you up. Networking is the way to stay current yourself and nurture those relationships.
4. Clearly communicate the vision, mission, and values. It’s hard to “touch and feel” services ahead of time, to see if you are buying what you expected. Thus it’s up to you to communicate effectively what you are about, to customers as well as your own team.
5. Attract and retain the highly skilled and motivated people. Services people need to hit the ground running. Customers don’t like to see you learning on the job or outsourcing. Every partner and employee can kill your success potential in a heartbeat, so don’t take shortcuts on your hiring and training practices.
6. Define and document the service process you sell. You can’t measure, scale, or patent a service process that is not clearly documented. Even if your service is artisan based, like commercial photography or interior design, the principles, vision, and style need to be clearly communicated to your team as well as your customers.
7. Create and maintain the highest level of customer satisfaction. Customer satisfaction is very important for all companies, but it is everything for a services company. You don’t have tangible product items which can be compared for quality and cost in the value proposition.

In reality, every company has a services business component, if nothing more than customer service. Thus these are the critical success factors that apply to every company, rather than the ones you typically see for product companies. In addition, the statistics show that over half of new startups, perhaps as high as 75%, provide services only (no product).

Another reality is that angel investors and venture capital groups almost never invest in a services-only company. Their perspective is that these entrepreneurs need only to sell themselves, but shouldn’t need capital up front for product development or manufacturing.

That’s another reason that your services business is all about you, and what you bring to the table for skills, resources, and customers. In essence, you are the ultimate critical success factor for your business. Make it happen.

Everyone can recognize a great manager a mile away, so why is it so hard to find one? We all remember a few that are “legends in their own mind”, but that doesn’t do it. In fact, the clue here is that the view in your mind is the only one that matters, rather than the other way around.

Almost every one of us in business can remember that one special manager in their career who exemplifies the norm, who commanded our respect, and treated us like a friend, even in the toughest of personal or business crises.

I’ve asked many peers for the traits or attributes they saw in that person, and most will list the following positive functional traits of a good manager:

1. Leadership. Shows outstanding skills in guiding team members towards attainment of the organization’s goals and the right decisions at the right point of time. As Drucker said, “management is doing things right; leadership is doing the right things.”
2. Plan and delegate. Possesses foresight and skills to understand the relevant capabilities of team members, and then scheduling tasks and delegating to the right people to get tasks done within deadlines. You are a guide, not a commander.
3. Domain expert. Demonstrates complete knowledge of his field and confident about that knowledge, with the common sense to make quick productive decisions, and ability to think outside the box.
4. Set clear expectations. Employees should always know what is expected of them. One of the easiest ways to do this is to set deliverable milestones for each employee over a set period of time. Then review the performance vs. the roadmap or deliverable at least six months prior to a performance review and discuss ways to improve.
5. Positive recognition. Immediately recognize team members, publicly or privately, when they complete something successfully or show initiative. Congratulate them on a job well done. Most employees are not motivated by money alone. Good managers know that employees want regular recognition that their job is being done well.

In my view, these are all “necessary” attributes, but are not “sufficient” to put you in that ‘great’ category. Most people recognize that it takes more to be ‘great,’ but the attributes are a bit more esoteric, and harder to quantify. Here are a few:

6. Active listener. Shows traits such as listening with feedback, optimistic attitude, motivating ability, and a concern for people. Listening to what is said as well as what is not said is of the utmost importance. It is demoralizing to an employee to be speaking to a supervisor and be interrupted for a phone call. All interruptions should be avoided.
7. Shows empathy. This refers to the ability to “walk in another person’s shoes”, and to have insight into the thoughts, and the emotional reactions of individuals faced with change. Empathy requires that you suspend judgment of another’s actions or reactions, while you try to understand them, and treat them with sensitivity, respect, and kindness.
8. Always honest. Simply put, today’s managers live in glass houses. Everything that a manager does is seen by his employees. If a manager says one thing and does another, employees see it. Managers must be straightforward in all words and actions. A manager must “walk the talk.” That also means recognizing weaknesses, and admitting mistakes.
9. Sense of humor. People of all ages and cultures respond to humor. The majority of people are able to be amused at something funny, and see an irony. One of the most frequently cited attractions in great personal relationships is a sense of humor.
10. Keep your cool. A great manager is an effective communicator and a composed individual, with a proven tolerance for ambiguity. He/she never loses their cool, and is able to correct the team members without emotional body language or statements.

Whole books are written on this subject, but hopefully you get the picture. Great managers must do the technical job well – and they also must do the people job very well. Now that you understand these things, I’m not sure why it is so hard to find a great manager. I guess an even harder question I should ask is why is it so hard to be one?

The buzz from startup executives, especially high-tech ones, has long been that startups are no place for Baby-Boomers (1946-1964) – you must have the high energy and crazy determination to work 20-hour days to succeed. Only the under-35 age group need apply.

I will argue that times have changed, and you better take another look. First of all, the Boomer demographic is currently the single largest, mainstream pool of experienced talent in the market today (76 million people strong). They have worked with high technology and computers for at least 20 years, are highly educated, and highly motivated. Last year about 40% of the total workforce was Boomers.

Most surprisingly, according to a report from the Kauffman Foundation, the highest rate of entrepreneurship in America has already shifted to the 55–64 age group, with people over 55 almost twice as likely to found successful companies than those between 20 and 34.

In addition to being startup founders, there are several other key roles that I see Boomers taking more often these days to drive successful startups:

1. Advisory Board. How can you beat finding someone who has been there and done that, able to mentor Gen-Y, has lots of connections to people in your industry, and is often willing to work for equity alone? Most actually have the time and inclination to help you, rather than compete with you.
2. Angel Investor. Almost all angel investors are “high net worth” individuals who made their money running a successful business in your domain, and they will mentor your team as well as demand the discipline you need to make your business work. Boomer angels won’t squeeze you for every dollar; they want to see your joy in success.
3. Interim Executive. Startups can rarely afford or even attract the young superstar C-level executives they covet – these people want big salaries, big staffs, and big budgets – who are also known to push founders out of the way. What you need is an experienced executive, who is willing to work for equity, and will happily step aside in a couple of years when your revenues exceed $20M.
4. Customer Service. Who better to run your customer service than an experienced professional with a little gray hair, who is firm but calm, soft-spoken, and credible around your customers? They know how to arbitrate immature tantrums, and lead by example.
5. Executive Assistant (aka Secretary). Here you want someone who knows the ropes, never gets ruffled, always shows up on time (no kids to drop off at school), and knows that their retirement depends on doing this job well. They have the maturity and sophistication to deal with your demanding executives and partners.

Of course, there are other positions were Boomers are sometimes not the best fit:

• Leading-edge technology architects, designers, consultants, and engineers.
• High-travel sales and buyer positions.
• Retail sales to Gen-X and Gen-Y.
• Construction and heavy labor jobs.

With the current difficult economic times, when companies fold, merge or cut back, more workers of all ages find themselves in search of new jobs. While everyone around you is snapping up the younger workers, my recommendation is that you think carefully about the job requirements in your startup before you follow the crowd.

In my view, there is an obvious opportunity here for a win-win situation by bringing together the best of Boomers with the high energy and crazy determination of the under-35 crowd. The crowd of Boomers won’t be going away any time soon, and more and more of them are finding that taking another bite of the apple is a healthy step for them. Join them today.

Most startups dream of attracting a celebrity endorsement, and assume that it will take their startup to the stars. There have been some “famous” recent successes in this regard, such as Charlie Sheen using Twitter to promote Internships.com, as well as some failures, including MyFavorites.com using celebrities to promote the books they are reading.

Startups using celebrities is such a hot topic these days that Gary Vaynerchuck, noted author and entrepreneur, has coined a new term “star-ups” for the phenomenon. New books are popping up on the subject of how and when to seek celebrity endorsements, including one I just finished, “Will Work for Shoes,” by Susan J. Ashbrook, who has courted celebrities for twenty years.

She helps you decide if celebrity endorsement is a viable and reasonable alternative for your business, and how do you go about selecting and approaching the right celebrity. Following is a summary of the challenges that Susan and other “experts” have outlined:

1. Finding a match between your offering and a celebrity.That means finding the perfect person for your brand. Their values need to match your brand image, including the perception of quality, educational value, as well as recognition by your target demographic. Be sure the celebrity really believes in your product.If you are selling to young consumers, Miley Cyrus or Justin Bieber may be high on your list. For technology products, even well-recognized investors, such as John Doerr or Ron Conway, are seen as celebrities, and startups supported by these players are automatically elevated to a new level of credibility.
2. Funding the relationship.Celebrity endorsements don’t come cheap. Does your marketing budget allow you to roll out the red carpet to meet celebrity lifestyles, including the investment in appearances, videos, and perks? Big fat advance checks and long-term royalties are often the norm.On the other hand, maybe you can emulate Priceline.com, whose official spokesperson, William Shatner, agreed to do the spots for free in exchange for stock in the company. The arrangement turned out to be quite profitable for Shatner, who has since made approximately $600 million from Priceline.com, despite the dot.com bust.
3. How to find and connect with the celebrity you want. As with all aspects of business relationships, funding, and partners, nothing beats a pre-existing relationship, or at least a warm introduction. Beyond that, the place to start is with publicists, agents, and other handlers. Major groups include Rogers & Cowan, Baker/Winokur/Ryder, and 42West.One of the inside secrets of finding and meeting the right people is working with charities. Celebrities have a passion for giving, and they respect people and companies who share their passion.
4. Potential for celebrities funding you. More and more celebrities are jumping on the entrepreneurship wagon. For example, Ashton Kutcher not only has the most Twitter followers of any “entrepreneur” (8 million), but he has actively invested in several startups. For example, he has helped Foursquare raise over $21 million to date.
5. Make the endorsement part of a bigger campaign. Building a brand and a successful company is a lot bigger than just getting a celebrity endorsement. The endorsement relies on a major marketing campaign to get the message out and setting the context for a successful delivery on the promises implied.
6. Prepare to handle endorsement success. Customers are a fickle bunch. You must be ready with the right array of retail partners, manufacturing, and distribution arrangements before the demand hits. Marketing momentum fades fast in the face of disgruntled potential customers and long waits in line.

Many entrepreneurs and investors assume that the fascination with celebrities is a passing fad, and not worth the effort. But the evidence is just the contrary. With the advent of the high-speed Internet for videos, real-time messaging via Twitter, and everything going mobile via smartphones, I don’t see things changing any time soon. The world now has an insatiable appetite for anything and everything celebrity. Be there if you dare.

The popular view of a real entrepreneur is someone with a big vision, and a stubborn determination to charge straight ahead through any obstacle and make it happen. The vision part is fine, but successful entrepreneurs have found that the extreme uncertainty of a new product or service usually requires many course corrections, or “pivots” to find a successful formula.

This reality has fostered a popular new startup approach which dramatically improves the efficiency and speed of these corrections, pioneered by Silicon Valley entrepreneur and author Eric Ries. His new book on this subject, “The Lean Startup,” lays out how today’s entrepreneurs use continuous innovation to create radically successful businesses.

Eric espouses designing products with the smallest set of features to please a customer base, and moving products into the marketplace quickly to test reaction, then iterating. He does a great job in the book of making the case for management systems, rather than gut-level reactions, to make required course corrections (pivots), to dramatically improve the odds for success.

Pivots come in many different flavors, each designed to test the viability of a different hypothesis about the product, business model, and engine of growth. I agree with Eric’s summary of the top ten types of pivots to consider:

1. Zoom-in pivot. In this case, what previously was considered a single feature in a product becomes the whole product. This highlights the value of “focus” and “minimum viable product” (MVP), delivered quickly and efficiently.
2. Zoom-out pivot. In the reverse situation, sometimes a single feature is insufficient to support a customer set. In this type of pivot, what was considered the whole product becomes a single feature of a much larger product.
3. Customer segment pivot. Your product may attract real customers, but not the ones in the original vision. In other words, it solves a real problem, but needs to be positioned for a more appreciative segment, and optimized for that segment.
4. Customer need pivot. Early customer feedback indicates that the problem solved is not very important, or money isn’t available to buy. This requires repositioning, or a completely new product, to find a problem worth solving.
5. Platform pivot. This refers to a change from an application to a platform, or vice versa. Many founders envision their solution as a platform for future products, but don’t have a single killer application just yet. Most customers buy solutions, not platforms.
6. Business architecture pivot. Geoffrey Moore, many years ago, observed that there are two major business architectures: high margin, low volume (complex systems model), or low margin, high volume (volume operations model). You can’t do both at the same time.
7. Value capture pivot. This refers to the monetization or revenue model. Changes to the way a startup captures value can have far-reaching consequences for business, product, and marketing strategies. The “free” model doesn’t capture much value.
8. Engine of growth pivot. Most startups these days use one of three primary growth engines: the viral, sticky, and paid growth models. Picking the right model can dramatically affect the speed and profitability of growth.
9. Channel pivot. In sales terminology, the mechanism by which a company delivers it product to customers is called the sales channel or distribution channel. Channel pivots usually require unique pricing, feature, and competitive positioning adjustments.
10. Technology pivot. Sometimes a startup discovers a way to achieve the same solution by using a completely different technology. This is most relevant if the new technology can provide superior price and/or performance to improve competitive posture.

Every entrepreneur faces the challenge in developing a product of deciding when to pivot and when to persevere. Ask most entrepreneurs who have decided to pivot and they will tell you that they wish they had made the decision sooner. In fact, a startup’s runway is really not money, but the number of pivots they can still make. What are you doing to get to the required pivots faster?

In previous articles, I have occasionally mentioned “red flags” which every potential investor unconsciously listens for. Other writers, like Guy Kawasaki, have irreverently called some of these “entrepreneur lies,” but I prefer to think of them as innocent over-enthusiasm or over-confidence that can kill your deal.

At any rate, here is my summary of the top ten from my experience with hundreds of elevator pitches, business plans, and executive presentations:

1. “Our product is truly disruptive technology.” If your product really represents a paradigm shift, you probably haven’t figured out yet what problem it solves. At best we can count on it taking many years to catch on, just like other disruptive technologies before you. No investor wants to wait that long for his return, or fund the years of waiting.
2. “Gartner says our market will be $50 billion in 2015.” It always amazes me how an entrepreneur can define his market opportunity so broadly, then assess his competition so narrowly in the next breath. You won’t impress investors by claiming that everyone in China needs one, and nobody else has exactly the same features to compete with you.
3. “All we have to do is get 1% of the market.” This red flag is the flip side of “the market will be $50 billion.” There are two problems with this assertion. First, no investor is interested in a company that is only looking to get 1% of a market. Second, that first 1% is the toughest of any market, so you look naïve implying it’s easy to get.
4. “We don’t believe there are any competitors.” This is a terrible statement because there are only two logical conclusions. A first conclusion is that there must not be a market. Or worse yet, the entrepreneur is so arrogant that he hasn’t even used Google to figure out he has competition just down the street.
5. “Microsoft is too big/slow to be a threat.” Usually the reason the big companies are no threat is that the market is too small. Competing with IBM, Microsoft, and other large companies is a very difficult task. Entrepreneurs who utter this line are kidding themselves. They may think it’s bravado, but investors think it’s stupidity.
6. “We have the first-mover advantage.” That’s probably the soft way of saying, we don’t have a patent or any “secret sauce” for a competitive advantage. Unfortunately, a startup with no brand name and no intellectual property is a sitting duck for the big slow company, as soon as they see you gaining a bit of traction. Sleeping giants do wake up.
7. “Our projections are conservative.” A startup’s projections should never be conservative. Plus I have never seen a startup achieve even their most conservative projections. We all know that financial projections are a confidence test on how committed you are to the project, so don’t try to minimize them.
8. “We have a proven management team.” If the entrepreneur and team were that proven, they probably would be funding others rather than asking for money. Truly proven in an investor’s eye is a team that has both failed and succeeded at least once, with success meaning 10x or more return to investors.
9. “A world-class CEO will be joining us after the funding event.” It’s easy to get your executive friends to express interest in the huge opportunity you describe, but don’t assume they will actually take the big leap down from their high-paying job to the meager salary you can offer. Rest assured the investor will ask for names, and place some calls. Hedges here by your candidates will definitely kill the deal.
10. “We have strong interest from a major customer.” The mention of unsigned contracts normally takes away more credibility than it adds. You can counter this position by bringing the interested party to the meeting for support, or at least showing a Letter of Intent (LOI). Otherwise talk about paying customers only.

I highly recommend that you screen your business plan and your executive presentation carefully for variations on any of these statements, and remove them. Your integrity and honesty are you best assets, so don’t jeopardize them with common over-statements, even if your intent is virtuous.