After reading “Entrepreneurs and the retirement trap” by Rick Rodgers on VentureBeat, I was all set to write a post about the perils of forgetting to include some of big business’ “perks” into your planning… and then I read “The Forgotten Challenges of an Entrepreneur” by one of my favorite entrepreneurial bloggers, Martin Zwilling and realized that, as usual, he hit the nail on the head (which meant I didn’t have to).

One of the things that many entrepreneurs enjoy about their own business is freedom from the constraints of life in a large enterprise environment. The downside, of course, is that the way large enterprise environments lure in eager, talented employees year after year, is because they make sure to offer incentives that hold more than a little bit of appeal.

I wrote about this last week, in the discussion about intrinsic vs. extrinsic motivators. For an entrepreneur getting a new venture off the ground — even before you try to piece together a “package” to offer prospective employees — you need to consider what you need for yourself. Because if you can’t stay motivated and productive, you certainly can’t expect that of employees (present or future ones).

In addition to the warning on VentureBeat about not ignoring retirement planning (vital advice, if ever there was any: no entrepreneur wants to spend years building a business, only to spend their “retirement” as a greeter in Walmart), Martin — in response to a D&B Small Business blog post — adds a few other nuggets worth keeping in mind as well.

Long-term daily job grind
Robert Kiyosaki refers to this, in his “Cashflow Quadrant” model, as being “self-employed” versus being a “business owner.” At it’s core, self-employment is a trap that many would-be entrepreneurs find themselves in, en route to their business ownership goals. The self-employed trap looks like the employment trap, only with all of the hassels of business overhead and far less stability.

Formal training courses
My favorite thing about my corporate job was the training. I had internal training resources at my disposal with our in-house “university” program, and I had access to high quality training by external firms, as long as I got my boss’ approval.

And, unlike some people, it wasn’t a paid opportunity to play hookie: it was some of the best learning I’ve had in years, because it blended the value of a classroom setting with the motivation of hands-on, readily applicable subject matter (which I never experienced in school).

Personal wealth management
Starting a new business can be a crash course in financial management — even for those of us who’ve spend years ducking and weaving to avoid the subject as much as possible. However, there is a difference between tightening your belts (even to the point of cutting yourself in half) when things are lean, versus proactively planning for your financial future.

A new business is a great excuse to not have the “time” to take this problem on. But, conversely, it’s also the best excuse, because money is often just as scarce as time — so you might as well take the opportunity to figure out how to manage it, before you find it managing you.

Business must be more than the money
Again, this is critical. If you are going to spend day in, and day out on something, there needs to be a reason to do it beyond getting paid — because, as far as extrinsic motivators go, for most of us, it’s a pretty weak option as time marches on. (And, if you are in the minority, for whom this is enough reason, then more power to you.)

Passion is a key theme among entrepreneurs, and there is a reason: when things are hard, you have no money, your family is mad at you, your friends have stopped trying to invite you out because you’ve turned them down so frequently, and even your dog has moved on to get her daily dose of TLC from the neighbor, if you are not passionate about your venture, the easiest thing to do will be to give up.

The last item Martin includes on his list is an interesting one, but I’m not sure I agree with its importance. Martin writes:

How society perceives you. As a young entrepreneur, everyone looks up to you for running your own business. But later you find that you may be perceived by many as a person without job security, unlike your classmates or ex-colleagues, who are sought after or being placed in well-known large company or multinational positions. Even worse, you find that your business domain has developed a negative stigma through no fault of your own, as has happened to investment banks, mortgage brokers, and many nightlife businesses. It’s no fun to hide your business role rather than proudly proclaim it.

While I understand his point, I’m honestly not at all convinced that this point is really any worse for an entrepreneur than it would be for an employee — and, in fact, I imagine that if you were an employee in one of these fields, it would actually be worse.

As an entrepreneur, you’ve had to hone your other skills — ranging across the spectrum of disciplines: staffing, financial management, marketing, product development, customer service, etc. — in order to run your business. If you are an employee who is working in a suddenly tarnished sector, odds are greater that you are a one-trick pony with limited options.

What would you think is better? To be an entrepreneur whose business was a major supplier for Enron? Or to be a Director-level employee at Enron?

Personally, I think the entrepreneur is better off when it comes to personal branding and re-marketing themselves to prospects. I think the poor employee is going to spend most interviews trying to compensate.

All in all, Martin makes an exceptional point, though: a new venture must be approached as a long-haul. Big exits in a couple of years are great fantasies, but if you are approaching your business with that expectation, then not only are you likely to be making unwise business decisions (see Jason Cohen‘s story of how building a business for him to keep made it valuable enough for someone else to want to buy), but you’re also probably not bracing yourself for the long-term reality of your work.

If you approach your business as a sprint, you may get out of the gate quickly, but odds are you’ll be sitting on the grass when all the marathon runners pass you by. Pace yourself. It’s a long trip.

Alora Chistiakoff is an entrepreneur, blogger, strategist and project manager who has been developing online business and technology for startups for more than a decade.  She co-owns The Indigo Heron Group, Inc., a web strategy firm in Austin, Texas

How do you know when to hire for experience versus when to hire for raw talent? This is an interesting question that I’ve heard come up several times in the past week, and then again as part of an article on VentureBeat called, “Just getting started? Focus on this to get to the next level.”

Author Pamela Springer advises that growing a business — particularly in the earliest stages — is best fostered by focusing on your people, your strategy and your capital. In that order.

She then goes on to discuss cultivating your team in the ways best suited to evolving your business. And while she warns that on-the-job training is expensive, she also points out that skills aren’t always everything.

I see new startups struggle with this question daily. Serial entrepreneurs with a good network that includes lots of other serial entrepreneurs tend to gravitate towards experience born of the excessive scar tissue left behind by a track record of startups.

Or they immediately jump to the other extreme and go with fresh talent, right out of school with almost no experience whatsoever. As with anything, there are pros and cons to each.

Experience Pros
The #1 advantage to experience, of course, is using hindsight to help navigate the dangerous waters of the startup world. Someone with the right experience can help predict, dodge and mitigate the landmines that someone who has not been through the perils of this world cannot possibly foresee.

Experience Cons
The biggest disadvantage I’ve seen to experience is an unspoken assumption that what worked before will work now. This is one of the most dangerous ones, and often the hardest to combat, because someone who has been successful with a particular approach in the past is usually inclined towards using it again in the future.

The second biggest disadvantage I’ve seen to a track record of experience is ego. A few successful turns in some great roles at some companies with flashy brands (or really big exits) can sometimes inflate an ego beyond reason — making the experienced person in question not only hard to work with, but also potentially inclined to take credit for past successes that they really didn’t have anything to do with.

Tactically speaking, the biggest obstacle that small businesses and startups often face trying to hire this demographic is very simple: money. Experience tends to command expensive rates, which is often beyond the reach of a new venture.

Talent Pros
The biggest pro of fresh talent is that, if you help develop it, not only will you build great loyalty, but you’ll also reap untold surprises in areas you can’t ever entirely imagine. My favorite part of working with fresh, young talent is that they are often fearless, curious and a constant source of pleasant surprises.

Talent Cons
This is a bit less of an issue since the economy collapsed than it was before, but the biggest con I typically encouter when it comes to young talent is boredom. There are plenty of things about routine, daily operations that can be tedious and boring, and if that’s all you have for your young talent to do, then be prepared for them to exit about as quickly as they arrived.

All in all, there are reasons to consider going either direction, depending on the role. But also keep in mind that, especially in small and privately owned businesses, the personality of the founder/owner has to be factored in.

There are a lot of qualities that Millenials poses, which are not always as effortless for Gen X and older. Things like collaboration, a dependency on technology, and a craving for work-life balance are all bigger factors for them than for some of us who are older. So if you’ve got a CEO who calls the shots without a lot of input or debate, then an older demographic might be better about rolling with those punches.

On the other hand, if you have a more democratic organization that likes to do a lot of brainstorming and hashing through ideas, then — speaking as one of those “older” demographics — it’s often something that Gen X and older find frustrating, and an abstacle to quick execution.

I think the important thing to remember is that building a good organization really requires pulling from both pools of resources. If you stick to only one or the other, then you run the risk of building a lot of blindspots into your business without having the 360 degree vision to recover. So pick and choose.

Personally, I will usually start by defining my needs and expectations of the role, and then break apart the list and assess if most of the qualities I am looking for require experience to be successful (e.g. auditing, project management and maintaining client relationships), or if they are more inate (like strong communciation skills) or readily teachable (most standard business technology, meeting facilitation, etc.).

Of course, the real trick is, when you find raw talent — even if you don’t have a role to be able to hire them right away — don’t let them go. Find another way to build a relationship with them. Whether you can mentor them, find an internship for them, or connect them to other people who can offer them employment, your long-term best interest is in becoming a magnet for great talent — even if it hasn’t had the chance to prove itself yet.

Alora Chistiakoff is an entrepreneur, blogger, strategist and project manager who has been developing online business and technology for startups for more than a decade.  She co-owns The Indigo Heron Group, Inc., a web strategy firm in Austin, Texas

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There is an article on FreelanceSwitch that raises an interesting point. It’s called, “Keeping Yourself Motivated” and it discusses intrinsic versus extrinsic motivation.

Intrinsic motivation are your own internal motivators — a need for success, a desire to make an impact, your own craving for perfection, contribution or collaborative connection with other talented people.

Extrinsic motivation are the outside motivators — money, praise, recognition, bonuses, perks, etc.

There is a statement in the article, however, that gives me pause:

“Extrinsic motivation (namely money) is often the primary basis for our motivation. Everyone needs money, and wants as much of it as possible. That’s no secret.”

Now, if the audience of FreelanceSwitch were all cubical dwellers who hated their jobs and worshiped at the alter of Office Space, then I might be more inclined to concede some validity to that statement. But given that FreelanceSwitch’s reader-base consists of freelancers and solopreneurs, I actually disagree. I also think it’s a dangerous assumption to make.

Yes, of course we all need money. And yes, even the least material of us probably want more of it than just the bare bones basics we need to survive. But is money really the primary external motivator for most people?

I don’t actually think so.

Most people who quit a job, quit because of their direct boss. This isn’t a money reason, this is an interpersonal reason. Feelings of being unappreciated, disrespected or ignored are all extremely damaging to employee morale, and are frequently at the heart of what someone dislikes about their boss — and ultimately their job.

Conversely, how many people have ever taken a paycut because they either wanted to work for themselves (most of us who strike out on our own start off with a significant financial dip, before we ever stand a chance of recovering and making more money), or they were offered an opportunity that offered some other type of benefit that money couldn’t beat? It happens all the time.

Most importantly, though, I think for entrepreneurs, there is danger in assuming that money really is the biggest extrinsic motivator for potential staff. I think it limits your thinking and boxes you into a set of dangerous and unhelpful assumptions.

Back in November, I wrote about a local entrepreneurial event I attended. One of the most memorable moments of the night was when a young entrepreneur asked the panel of seasoned veterans, “How do I convince my successful friends to give up their $150k/year salary to join me in my startup?”

The answer he got from the panel was unanimous: “If you have to convince them, then they are not the right people.” This answer is dead-on — even if it wasn’t the one the poor guy wanted to hear.

When I think back to the different bosses I had over the years, one thing is clear: the great ones were the ones who quickly (and intuitively) understood my extrinsic motivators and then understood how to keep me motivated by giving me what I was looking for. The bosses with whom I never developed any kind of important or meaningful relationship could never figure it out.

I have a newsflash, though, my extrinsic motivator is not money. I had a six-figure job that made me so miserable that I quit with nothing else lined up; and I’ve worked 80-hours a week at another job that was paying me barely enough to live above the poverty line.  In each case, aside from my own intrinsic motivators, the extrinsic motivators of the situation were omnipresent and impossible to ignore — and they made all the difference between when I was happy to compromise versus when I was unwilling to put up with a situation that I disliked.

Entrepreneurs need to remember that there are other ways to motivate. Sure, for some people, money matters more than it does for others. And, when that’s the case, then that certainly isn’t the right person to bring onboard for your business — especially if you are just getting things started. So keep looking.

For some people extrinsic motivators could be a title, a new area of responsibility, the chance to travel, or getting to say they were part of a founding team that was doing something entirely new.

Do you want to know a secret, though? Most often, the thing that study after study says is a truly important and valuable extrinsic motivator for most of us, isn’t a title or perk, either. It’s recognition. Having our contribution respected, appreciated and then directly noted is the thing that makes the biggest difference to most of us. Sometimes that can be a public event, but more often than not, it’s private.

So if you own a business and are worried that your staff is burned out or losing motivation, ask yourself, “When was the last time I let them know how much I respect their talent and appreciate their contribution?” And then, go do it.

Alora Chistiakoff is an entrepreneur, blogger, strategist and project manager who has been developing online business and technology for startups for more than a decade.  She co-owns The Indigo Heron Group, Inc., a web strategy firm in Austin, Texas

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VentureBeat’s Entrepreneur Corner currently has a video posted called, “Entrepreneurs have no rules.” In the video, Accuray‘s John Adler talks about why he was relieved when his son, Trip, decided to launch Scribd: because he was a “free spirit.”

This comment reminded of Jonathan Fields’ article from a few weeks ago, “The Delusions of Entrepreneurs,” in which he explored what made so many of the trappings of entrepreneurship a bit more myth than reality — including notion of freedom, control, money and passion.

Jonathan’s points were all valid: starting your own business can put just as many shackles on you (or even more) as working for someone else, they are just different. And I think this is the point that really matters, and which the senior Adler was making about his son: if you are not good at following rules, then it’s very hard to get ahead in someone else’s business.

Now, to be fair, there is a certain amount of rule following that we all need to do to be successful in life: if I make a habit of driving on the left side of the road (in the US), odds are good that my professional success is going to be hampered by turning myself into road pizza before I can launch my product.

However, if my aversion to rules is more subtle — take, for instance, a compulsive need to be more direct and honest than politically correct (which happens to be true) — then it’s easy to see how having my own business probably has better odds of success than me trying to work for someone else. There will always be people who consider my directness to be uncomfortable or impolite, but if they are clients or colleagues rather than a boss, then we can go our separate ways agreeing to disagree, instead of miserably trying to stay in a professional marriage that doesn’t meet our needs.

Another reason that I think John Adler’s point is valid — and one of the things I think Jonathan Fields missed in his reasoning — is that when you have your own business, you get to determine what “success” means to you. If you are working in someone else’s business (especially a large enterprise), what constitutes success is often prescribed by someone who came before you. If you have your own business, then you get to draw the map. Sure, you could find yourself stranded on a ledge somewhere, but that’s equally true when you work for someone else.

• Is your definition of success making a ridiculously large income?
• Is your definition of success being able to sleep in until 10:00 a.m. every day?
• Is your definition of success being able to sell your company and retire?
• Is your definition of success having 50 employees? 100? None?
• Is your definition of success revolutionizing your industry?
• Is your definition of success being a leader in your community?
• Is your definition of success having the time to do volunteer work?
• Is your definition of success being location independent?
• Is your definition of success being able to take your dog to work?
• Is your definition of success getting to work with your family/friends?
• Is your definition of success having the flexibility to go to your kids’ school events in the middle of the day?

We all define success differently, because we are all motivated by different things. Owning your own business gives you the change to attach what motivates you to how you are going to define success, and the drive your business towards those goals. When you join someone else’s business, you are agreeing to their destination.

And, if like Trip Adler, you’re too much of a ‘free spirit’ for someone else’s rules, then starting your own business may just be the only rational choice you could make.

Alora Chistiakoff is an entrepreneur, blogger, strategist and project manager who has been developing online business and technology for startups for more than a decade.  She co-owns The Indigo Heron Group, Inc., a web strategy firm in Austin, Texas

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Answers OnStartups has an article posted on VentureBeat which is a subject of eternal debate in my life: how many hours per week is it reasonable to ask of your team?

Admittedly, this is a challenge in my life: I am, at my core, a workaholic. I am a product of an entrepreneurial family with a career in tech startups, where working 60+ hours per week (at least) was a badge of honor; I am compulsive enough by nature that it plays directly into both my work style and my ego; and I am a volunteer junkie who is the first in line to take on difficult new challenges that no one knows how to accomplish.

My husband and business partner is the opposite. While he can and has worked insane hours during various points of his professional life, it is not what he enjoys and it is not what he wants. And, for him, my over-and-above hours of work detract from our time together, which is not the trade-off he signed up for.

The VentureBeat article, titled “You work 60-hour weeks. Should your employees?” is probably made even more noteworthy by the comments left by readers. As is often the case, comments fall heavily into two camps:

The What Kind of Slacker Only Works 60 Hour Weeks? Camp — which is the modern equivelant to your grandfather’s old saying, “Back in my days, we had to walk to school a mile in the snow both ways…” It’s a sign of geek and/or entrepreneurial bravado to be the Michael Jordan of work hours, and demonstrate that you can push yourself longer and harder than those around you.

The Work Is Never Going to Love You Back Camp — who are the advocates of “work-life balance” and who are acutely aware of the fact that no one lies on their deathbed saying, “I wish I’d had just one more meeting…” It’s a sign of idiocy to this group that one would ever do anything as foolish as risk their health or personal relationships by refusing simply turn off the computer and leave work at a decent hour.

The thing that is most interesting, though, is that — as always happens in this debate — people over-look a simple, basic fact: different people need different things for different reasons.

In all the politically correct talk about “work-life balance,” there is something important that is often missed: some of us need to work long hours for reasons that have little or nothing to do with anything or anyone else. And, when we find ourselves in a work environment that does not place that demand on us, we will find a way to create it. Consider this:

Work People

• Get their energy from work.
• Derive their motivation from work-based accomplishment.
• Experience their strongest social connections to other people through work.
• Use the inertia of long hours to build momentum for accomplishing their goals.
• Find an intellectual stimulation and satisfaction in work that they don’t find anywhere else.

Life People

• Get their energy from social or personal activities.
• Derive their motivation from hobbies and social interactions.
• Seek social connections that are based on non-work interests, often as part of the respite from work.
• Require the break from work in order to recharge and return productively.
• Experience a wider array of sources that can lead to satisfying intellectual, emotional or psychological stimulation.

And while debates can wage about which side of the coin is “healthier,” it really doesn’t change the fact that my husband is unlikely to ever be an 80-hour-per-week-maniac and I am unlikely to ever be happy trying to keep my work week limited to 40 hours. We’ll each do what we need to do as circumstances demand, but what is native to each of us is different and meaningful for our own reasons.

The VentureBeat article recommends focusing on great results, not the means by which specific individuals arrive at those results. I’d agree with this approach, but take it a step further: it’s not enough to have this expectation of your staff. You have to find staff who want and thrive with high expectations.  Only hire people who like that kind of pressure and motivation.

A “life person” who is asked to work 60+ hours per week by their boss may technically put in the hours, but they are likely to trading in quantity at the expense of quality. For people who need off-hours to recharge their batteries, the point of diminishing returns comes sooner, and time put in working after that threshold is always less productive (sometimes to a costly degree).

Yes, there are always going to be times when the realities of a business require additional time and work, but I think the focus of a boss should be on finding staff whose workstyles fit what you need, rather than trying to turn who you have into someone they are not. In the end, that approach is just asking for trouble, because not only will you always be frustrated — frustrated at having to ask, frustrated by feelings of disappointment and frustrated by the results you get out of people — but you’ll also be setting your team up for failure by creating a situation that runs counter to their individual needs.

Ultimately, you can’t change a person. And asking someone to behave in a way that is fundamentally counter to their nature is never a long-term solution. So my advice is to focus on the fit first. Jim Collins refers to this as ‘getting the right people on the bus.’ If you are a workaholic who likes achieving the impossible at the drop of a hat, then an employee who rolls into the office at 10:00 and rolls out right at 6:00 is probably going to drive you crazy — no matter how much amazing work he gets accomplished in that eight hours.

Alora Chistiakoff is an entrepreneur, blogger, strategist and project manager who has been developing online business and technology for startups for more than a decade.  She co-owns The Indigo Heron Group, Inc., a web strategy firm in Austin, Texas

We recently launched our Tell Your Friends About WorkingPoint contest and we have had a great response. Thanks for telling your friends: we hope they all sign up so you can be one of the winners!

If you haven’t spread the word and entered for your chance to win, it’s not too late. In fact, we just made it even easier to tell your friends about WorkingPoint. Many of you told us you would prefer to tweet your friends or use blog postings or Facebook to tell them about us instead of email them (thanks for the suggestion). Now you can.

Here’s How To Participate:

1. Log in to your WorkingPoint account and click the “Tell Your Friends About WorkingPoint” button on your home page.
2. Then, share it your way:
   • Copy the URL provided and paste it into your favorite twitter app, blog or Facebook feed. This link ensures you get credit when people click it and sign up.
   • Tell your small business friends via email by entering their email addresses and sending them a message recommending WorkingPoint (we’ll automatically include the URL in the email).

And Here’s What You Could Win:

The top 3 WorkingPoint subscribers who earn the most credits by inspiring friends to sign-up will receive a high-value promotion package from WorkingPoint designed to help you promote your business and gain customers, including:

1. Home Page Placement –  The home page is a coveted space on any website and we’ll promote your business on WorkingPoint.com for a whole month!
2. Company Featured on the WorkingPoint Blog – Our blog is read by thousands of readers every day, and we’ll help you reach a new audience by featuring you and your company.
3. Company Featured in the WorkingPoint Newsletter – Our newsletters reach thousands of businesses each month, and we’ll prominently feature your company in a March newsletter.
4. You’ll Earn a Community Builder Badge– Community builders are key members of our community. We’ll single you out from the crowd with our Community Builder badge and feature your business in our Company Directory, an online listing of WorkingPoint Company Profiles.

WorkingPoint will announce the three contest winners at the end of February, and these winners will receive their promotional reward packages during the month of March. (more…)