|Apple CEO Tim Cook: Innovation Doesn’t Mean a New Gadget May 29th 2013, 17:36
Innovation isn’t about making new products, Cook said at the D: All Things Digital Conference. You only need fresh ideas.
Apple CEO Tim Cook took the stage at the D: All Things Digital Conference Tuesday night, answering questions on the company’s cool factor and whether Apple has any plans for wearable tech.
Though he offered mostly canned responses on his vision for the company and Apple TV, Cook spoke pointedly about Apple’s mission to innovate.
Early on in the conference, All Things D reporter Walt Mossberg noted it had been a while since Apple last put out a hit. “The iPad Mini was a really good move,” he said, “but it wasn’t a game-changer the way the iPad was.”
Cook’s response was polite but assertive. “Many people define innovation as a new product,” he said. “We have some incredible plans we’ve been working on for awhile. We have some incredible ideas. The same culture and largely the same people that brought you the iPhone, the iPad mini, the iPod, and some who brought you the Mac, the same culture is there.”
In other words, Apple doesn’t need to constantly create new products to be innovative. The vision, the quality, and the people are what make it forward-moving.
“For us, winning has never been about making the most,” Cook said later on. “Arguably we make the best PC, we don’t make the most. We make the best music player, we wound up making the most. We make the best tablet, we make the most. We make the best phone, we don’t make the most phones.”
As any entrepreneur would point out, the proof is in the usage. Cook noted “satisfaction is off the charts,” and despite having formidable rivals in Samsung and Android, Apple’s continual focus on quality has served it well. “We’ve sold 85 million phones. Forty-two million iPads,” he said.
For a full transcript of last night’s event, check out The Verge’s live blog and watch the full 81-minute video below.
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|Space: The Final Frontier for 3D Printing May 29th 2013, 17:24
A real-life version of Star Trek’s replicator may soon churn out spare parts and chocolate bars on the International Space Station.
By next year, the Star Trek
will no longer be the stuff of science fiction.
A start-up called Made in Space has teamed up with NASA to send a 3D printer to the International Space Station (ISS), Space reports. The off-planet facility will be the first of its kind and is set to launch sometime in August 2014.
The intergalactic 3D printer will come with a cargo mission that the private spaceflight company SpaceX is launching to the orbiting lab for NASA.
“The 3D print experiment with NASA is a step towards the future,” said Aaron Kemmer, Made in Space’s CEO. “The ability to 3D print parts and tools on-demand greatly increases the reliability and safety of space missions, while also dropping the cost by orders of magnitude.”
The printers will also help astronauts print certain parts and tools as they need them, VentureBeat notes. Roughly 30 percent of the parts on the ISS could be manufactured via 3D printing.
The Made in Space project might focus on building spare parts, but NASA’s not overlooking more pertinent matters. According to VentureBeat, the organization has sunk $125,000 into a research project with the hopes of bringing 3D printed pizza and chocolate to the great beyond.
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|A New Breed of Manufacturers May 29th 2013, 17:00
This entrepreneur says now is a great time to be a manufacturer. The secret: Think show business.
Many people who visit my business, Rickshaw Bagworks, ask if they can take photos. They seem fascinated by what we do, because it’s something you just don’t see every day: We make things.
More specifically, we sew custom messenger bags, backpacks, and fashion totes in a small brick warehouse in Dogpatch, an old industrial neighborhood in San Francisco that is at the epicenter of the city’s maker movement.
Our 20-person cut-and-sew operation is an anachronism in today’s tech-driven economy, and our location–about 50 miles north of Silicon Valley–makes what we do even more improbable. At $10.55 an hour, San Francisco has the highest minimum wage of any city in the United States, along with onerous business taxes and skyrocketing rents. Fully burdened with insurance, taxes, and benefits, our factory labor rate is $20 an hour–20 times the current labor rate in China and 100 times that in Bangladesh.
It’s easy to forget that our city, the birthplace of Levi’s, was once home to a thriving garment manufacturing industry.
Still, I wouldn’t have it any other way. San Francisco is no place for large-scale industrial manufacturing or low-cost production of commodity goods. But it happens to be an ideal location for micromanufacturers like Rickshaw.
That’s because the things that make cities special–and expensive–are the same things that attract people who are interested in the “who, what, why, where, and how” behind the products they buy. At Rickshaw, we open our doors every day and invite anyone who’s interested to take a tour of our factory.
Here in San Francisco, you can also visit Heath Ceramics to see hand-glazed ceramic tiles emerging from huge industrial kilns and stop by Dandelion Chocolate to watch chocolate being manufactured, bean to bar. In each case, the drama of manufacturing serves as a powerful differentiator from all other brands of offshored products, and even “Made in the USA” goods that are outsourced to domestic subcontractors. We recognize that the art of making stuff is cool. This isn’t just manufacturing. This is show business.
Our country’s new breed of savvy micromanufacturers specializes in custom products, small quantities, and fast turnaround. We cannot and do not attempt to compete with high-volume low-cost manufacturers. We acknowledge that some jobs are too large and some price points too low. Instead, we focus on “high touch” opportunities that are too small and specialized for large factories.
At Rickshaw, low minimums, speed, agility, and expertise command premium prices for our bags, which retail for $50 to $100. Typical order sizes range from one to 1,000 pieces, with lead times of three to 30 days. By contrast, offshore factories generally require orders of at least 5,000 pieces, with lead times of 90 to 120 days.
We also observe the “KISS” principle: Keep It Super Simple. By making products to order, we can offer a portfolio of bags designed specifically for our own lean manufacturing process. We don’t maintain a finished-goods inventory, and our materials are delivered just in time. We keep our supply chain as short as possible, purchasing most materials from American manufacturers and working with local subcontractors who specialize in the few things we don’t do ourselves. We also focus on direct sales, as opposed to wholesale, to improve profit margins and support higher costs.
Perhaps one of the most exciting aspects of the U.S. micromanufacturing rebirth is that entrepreneurial companies no longer have to operate as mere subcontractors in the shadow of master brands. There’s never been a better time to develop your own brand name and put it on everything you make. Build a reputation for quality products and friendly service. If you do, you will command premium pricing, rather than the commodity pricing of an anonymous supplier.
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|3 Fundamental Shifts You Need To Make To Scale Your Business May 29th 2013, 16:21
Growing your business is fun — but if you stay stuck in fun, you’ll never get the scale that could make you great.
It’s one thing to grow your business (and a lovely thing it is, too)–but it’s another entirely to scale it.
Scaling–the ability to grow rapidly and at a compound rate, compared to the arithmetical, two-plus-two-equals-four rate of growth that non-scaling businesses achieve–requires new skills from the business’ owners and managers.
Many business leaders never achieve scalable growth because they fail to realize that they need to change their attitude and approach toward what they view as irritations at best and ‘growing pains’ at worst. Here are the top three areas in which I see leaders hobble their organization’s growth by failing to recognize the need for a personal change in perception:
In the early, Fun stage of growth, hiring people is typically a highly personal, intuitive, and largely enjoyable, exercise. During Fun, founders do most of the hiring themselves. And in doing so, we hire people who remind us of ourselves. We hire people who lack skills but have the right attitude, knowing we can spend the time necessary to mentor and coach them. We hire with little or no consistency in job specifications, individually negotiated compensation packages, and idiosyncratic variances in titles and responsibilities.
Then, at some point–usually when the organization hits the growth spurt I call Whitewater–hiring is no longer fun any more. The rate of hiring accelerates. We might previously have hired a few people each year, but now we’re hiring people every month. And because we’re hiring at speed, we can’t trust our judgment so much, and we don’t have the time to mentor and coach those we do hire.
Result? The quality of hire drops. The growing pains of Whitewater are exacerbated by an influx of less-than-stellar employees. The answer is not to see this shift from occasional-to-frequent hiring as an aberration. Now that your organization is scaling, and not just growing, you will always be hiring. So you better, as an organization, get good at it.
The second shift that occurs as an organization starts scaling is the need to systematize what until then has remained un-systematized: codifying and standardizing the patterns and dynamics that underlie how the organization operates from day to day.
Making this shift is typically agonizing for the visionary founder-owner. While their young, vibrant business is growing in Fun, systems and processes are anathema. If instituted too early, systems and processes slow down the organization’s growth and staunch its creativity and flexibility.
Typically, and rightly, the founding team resists the installation of processes from the outset. This intuitive reaction against systems and processes serves the company well during early growth, but stalls the organization’s ability to scale at the crucial moment in Whitewater.
How do you know if your resistance to systems and processes has become problematic for the growth of your business? Look around at your most productive people. If they have ceased being productive and are instead spending most of their time instead fighting fires, then you’ve hit Whitewater. You need to review your stance toward systems and processes.
3. Focusing on the internal customer
Remember the relative ease with which you used to serve your clients and customers? An order or an enquiry would come in, and you or someone on your team would spec it out. Someone would order whatever raw materials were needed, someone else would add value in whatever way was required, and finally you’d ship your product or deliver your service to a happy customer.
Such was the relative simplicity of growth–an almost seamless flow from initial enquiry to delivered product or service. Now that flow is a distant memory. Your team is frequently dropping the baton as the customer’s order is handed from department to department, from team to team, from individual to individual. You spend most of your time refereeing disagreements about where or why an order is stalled or inefficiently processed.
What was previously a tight, focused team now appears to be hunkering down in silos rather than working harmoniously together. The reason? Now that your business is scaling, not just growing, the supply chain from initial enquiry to happy, fulfilled customer is too complex to self-manage. And simply focusing on the needs of the external customer isn’t enough to overcome that complexity.
If the groups and teams in your organization are frequently dropping the baton as a customer or client’s order progresses from initial enquiry to completed sale, then the time has come to focus on the concept of the internal customer–not just the external customer. Your company’s functional groups need to learn how to exhibit the same respect and attention to the needs of their internal customers as they do to your external customers.
Otherwise, you’ll be stuck in mere growth mode, and the complexity of scale will beat you, every time.
Download a free chapter from Les’s WSJ best-seller, “Predictable Success: Getting Your Organization On the Growth Track – and Keeping It There” to learn more about how to move from growing a business to scaling it.
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|Warby Parker CEO: Why Empathy Matters May 29th 2013, 16:00
Neil Blumenthal, co-founder of Warby Parker, says it’s important to teach your staff to be aware of others. Here’s why.
“I want our managers to care deeply about the people who work for them.”– Neil Blumenthal
It’s so important to see things from the other person’s perspective. When I was at my nonprofit, VisionSpring, I would be in a village in rural Bangladesh, with a community of weavers. I knew they had vision problems, but not one was wearing glasses. I would say, “Raise your hand if you have trouble seeing.” No one would raise their hand.
So I said, “Raise your hand if you have trouble threading a needle.” And everybody would raise their hand.
You have to know the right question. I’m starting a workshop for first-time managers. I’m going to lead it myself, with my co-founder, Dave Gilboa, because developing people is our most important job. I want our managers to care deeply about the people who work for them, to know a lot about each person individually and what motivates them.
When Lyndon Johnson was leader of the Senate, people used to say that he could meet somebody and immediately size the person up and frame how he would lead based on what motivated him or her. I want our managers to do that.
When you have an inexperienced team, people may not know what they want to do. It’s part of the manager’s role to help people discover what makes them happy and they are great at.
Neil Blumenthal is co-founder and co-CEO of the upstart eyeglasses seller Warby Parker, which is based in New York City.
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|30 Under 30 2013: Meet the Judges May 29th 2013, 15:59
Narrowing down our impressive list of 30 Under 30 candidates wasn’t easy. Meet the folks tasked with the tough job.
The 30 Under 30 selection process kicked-off in January, when Inc. put out a call for nominations, and received more than 600 online applications from impressive young entrepreneurs. In addition to funding information and a pitch, we asked applicants to tell us why they thought they should be on the list, whether they felt they had a social mission, and what their passions are outside of work.
Our staff reviewed and culled the applicants down to 165 companies. We were looking for start-ups that had achieved measurable success, and were predisposed toward those that disclosed revenue and other success metrics.
The companies that made the first cut were sent to our 11 judges, who halved their lists, then split them again in another round of judging. The criteria? We kept an eye out for diversity in terms of industry and geography, as well as entrepreneurial endeavors that are poised to make a big impact on their communities and the world at large.
The final 30 Under 30 are the best and the brightest young entrepreneurs in 2013. Let us introduce you to the men and women who generously volunteered their time and expertise to identify them:
Serial entrepreneur David Cohen is perhaps best known as the founder and CEO of the start-up accelerator TechStars. He was the founder and chief technology officer of Pinpoint Technologies, which was acquired by ZOLL Medical Corporation in 1999, and earFeeder.com, a music service sold to SonicSwap.com in 2006. The serial entrepreneur has also invested in over 100 companies. @davidcohen< With over 25 years of high-tech industry experience and active involvement in the venture capital community since 2002.
Cindy Padnos is the founder and managing partner of Illuminate Ventures, an early stage Micro VC firm focused on cloud computing. Padnos has deployed over $100 million in venture funding to help dozens of start-ups get off the ground, and was named one of the Most Influential Women in Technology (Fast Company) and one of the Most Influential Women in Business in the Bay Area (San Francisco Business Times). @illuminateVC
Serial entrepreneur, angel investor, public speaker, TV host, and writer Scott Gerber is the founder of the Young Entrepreneur Council, co-founder of early-stage VC firm Gen Y Capital Partners, and author of the book Never Get a “Real” Job. The YEC, in partnership with Citi, recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs grow businesses via live video chats. @askgerber
Computer programmer and entrepreneur Paul Buchheit is a partner at the venture capital firm Y Combinator, co-founder of FriendFeed, which was acquired by Facebook in 2009, and was one of the first engineers at Google. At Google, he created Gmail and implemented many of its features. He also suggested the “Don’t be evil” motto, and created the first AdSense prototype. @paultoo
Inc.’s Street Smarts columnist and senior contributing editor Norm Brodsky is a veteran entrepreneur who has founded and grown six businesses. In 2008 he sold CitiStorage, a document-archive business based in Brooklyn, New York, for $110 million. @normbrodsky
Inc. 30 Under 30 honoree Morgen Newman currently serves as the international general manager at IdeaPaint, where he is responsible for establishing a presence in more than 40 countries globally. Since joining IdeaPaint full-time in early 2007, he has played a critical role in IdeaPaint’s financing and continues to be heavily involved in company strategy. @IdeaPaintMojo
Chicago-area serial entrepreneur Genevieve Thiers is the founder of Sittercity.com, America’s first company to take caregiving services online. She also founded ContactKarma.com, a social recommendation engine for business owners and execs seeking deals on corporate products and services, and OperaModa.com, an effort to highlight American operas and bring modern operatic talent to the Chicago public.
Eric Chin, a serial entrepreneur and venture investor with over 20 years of experience under his belt, is a general partner with Crosslink Capital, where he focuses exclusively on early stage technology companies. Chin co-founded the Internet server software company WebSpective (INKT) and TelASIC Communications (MTI). @chindogger
Happy Family founder and CEO Shazi Visram is a passionate supporter of health, wellness, and sustainability. Visram started Happy Family, the leading premium brand of baby and toddler meals in the U.S., in 2003 as an alternative to store-bought baby food. The company was recently purchased by Danone for hundreds of millions of dollars. @shaziv
Susan Gregg Koger is the chief creative officer and co-founder of ModCloth, an e-tailer known for its innovative social shopping experience, vintage-inspired apparel and décor, and wide range of styles from independent designers. She is also an advisor at Market Publique, an online vintage seller based in Brooklyn. @SusanGKoger
Donna Fenn, a contributing editor at Inc. and the senior editor for Inc.com’s 30 Under 30 Coolest Entrepreneurs, has been writing about entrepreneurship for more than 20 years. She’s also the author of Alpha Dogs: How Your Small Business Can Become a Leader of the Pack, and Upstarts! How GenY Entrepreneurs are Rocking the World of Business. @donnafenn
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|Why Now’s the Time to Sell Your Business May 29th 2013, 15:41
Anyone who knows anything about business knows that you buy low and sell high. Here’s why now just may be that selling-high time.
I think it’s time to sell your business.
Just last week BizBuySell.com said “in the first three months of this year, the number of [small business] sales that closed jumped 56 percent from the same time in 2012, according to the Associated Press. Retirement was the No. 1 reason for those sales in the fourth quarter of last year and the first quarter of 2013, according to a survey by Pepperdine University and two trade groups.
So, are you going to sell your business in the next few years? It seems this is a trend very much worth considering. Here’s why.
1. Aging U.S. Population
According to the second chart on this page prepared by the Urban Institute (and my knees, back, and rapidly-deteriorating eyesight), the U.S. isn’t getting any younger. It says 16.3 percent of the population will be more than 65 years old by 2020, a 31 percent increase from 2000. And by 2040 one in five people in the U.S. will be a senior citizen. This means that, assuming the system hasn’t gone bankrupt, Angelina Jolie, Tiger Woods, Tobey Maguire, and Kate Gosselin will all be able to collect social security that year. George Clooney will be 79 years old. Now think about it. Suppose you would like to sell your business some day. Will it be easier to do in the next few years, or after 2020 when there will be many other gray-haired entrepreneurs also looking to sell out, retire, and watch re-runs of Jeopardy? Many smart business owners I know are prepping for their exit before a glut of metal shops, accounting firms, and pizza shops started in the good ol’ days come up for sale.
2. Low Interest Rates
This chart from January shows a history of long-term interest rates going back to 1790. I know it’s kind of a stretch to believe data from more than 200 years ago, but hey, global warming theorists seem to do it all the time. The author, Barry Ritholtz, is using these numbers to support his case that there has never been a better time for governments to borrow money and rebuild their infrastructure. And he’s right. But these low interest rates also indicate that there has never been a better time to sell your business too. There’s never been a better time for investors to borrow money and buy appreciable assets like your little business. How about getting a loan for next to nothing and using that money to buy a company or two that could, if managed properly, return double-digit profits? If your company falls into that category then now is a great time to offer it up to a hungry buyer looking for an opportunity.
3. Low Inflation
Here I go again with another crazy chart. But don’t worry: This time it only goes back to the 1870s. (I know, I know: Back then they weren’t even smart enough to have invented fro-yo so can we possibly rely on their calculation of interest rates? Fine, but just work with me on this.) According to the analysis, the 10-year moving average of inflation has been 2.46 percent, and the country’s most current annualized inflation rate, according to the Bureau of Labor Statistics, is 1.47 percent. Only the Phillies team batting average is lower. Rates are so low it’s almost criminal to put money into a savings account. This is why investors are desperate to find places to park their money and still get a decent rate of return. Savings and money markets aren’t going to cut it. The exuberant stock market is a refuge. But what else? Exactly. Your business. With borrowing rates so cheap and the options for making money elsewhere limited, how about investing in a nice little company? It’s a good pitch.
4. Low Taxes
This chart shows a history of taxes on capital gains going back to the early 20th century. The capital gains tax rates, as part of this year’s effort to stave off the dreaded “fiscal cliff,” were raised from 15 percent to 20 percent. But, as you can see in the chart, these rates are still significantly lower than they were between 1936 (40 percent) through the mid 1990s (28 percent). This means that if you sell your business now the tax rate on the capital gain you’ll likely realize is at a historically low level. Now, turn to C-Span and watch what’s going on in D.C. You’ll hear a lot of talk about deficits and the national debt and how in the world it will get paid back. And then there will be more rumblings about increasing taxes (like capital gains) on those dirty, rotten, wealthy people again. That’s you. With taxes at such relative low levels, what better time is it to consider selling out?
Finally, this is a photo of Honey Boo Boo. She stars in the enormously popular show called Here Comes Honey Boo Boo on TLC. The show features the seven-year-old child beauty pageant participant (her real name is Alana Thompson) and her mom, dad, and three older sisters. The show is mostly filmed in and around the family’s hometown in rural McIntyre, Georgia, which makes suburban Mumbai look like Park Avenue. According to some reports, the family is paid a salary of $50,000 per episode. So if this isn’t a clear indication that the country is absolutely going to hell, and you better sell your business and move to Canada, I don’t know what is.
OK, let’s compromise. These are 4.5 good reasons you should consider selling your business sometime in the next few years. I know you may have emotional ties holding you back. It’s your baby. You built it from scratch. You inherited it from your parents. But the smart business people I know look at their companies as nothing more than assets. I know this sounds a little cold, but it’s just the truth. And anyone who knows anything about business knows that you buy low and sell high. And now just may be that selling-high time. Look: if Honey Boo Boo’s family can make $50K an episode shouldn’t you be cashing in too?
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|5 Pitfalls to Avoid When Preparing to Sell Your Business May 29th 2013, 15:00
There’s a lot at stake when you decide to sell your company. To make sure it goes well, you’ll want to avoid these common pre-sale mistakes.
Encouraged by the pace of activity in the business-for-sale marketplace, many owners are moving forward with plans to exit their companies and are laying the groundwork for what they hope will be a smooth and profitable business sale.
But selling a business is an unnerving task, even under ideal circumstances. It’s even more challenging when sale preparation is lacking, deficient or misaligned with market realities. Across all sectors and industries, effective pre-sale planning is the key to achieving your desired sale outcome. Simply put, you can’t afford to bungle the critical steps that need to happen before you enter the business-for-sale marketplace.
Common Preparation Pitfalls for Business SellersThe most successful sellers are meticulous about getting pre-sale preparation right. Here are some of the most common mistakes business sellers make during the preparation stage and some helpful tips on how you can avoid them as you move closer to the sale of your company.
1. Going SoloOne of the biggest mistakes business sellers make is trying to do everything themselves. Very few owners have the time or experience to handle selling a company alone. Business brokers, exit planners, accountants, appraisers and other sale professionals streamline the process and ensure that your company is truly ready for prospective buyers. Pulling together a talented team of advisers should be one of the first things you do after you decide that it’s time to sell.
2. Starting the Process With Misguided ExpectationsFirst-time business sellers often have unrealistic expectations. For example, many sellers believe their companies are worth more than actual market value and are then disappointed when their (over-priced) business doesn’t sell quickly…or at all.
During the preparation stage, it’s important to right-size your expectations. By evaluating the recent sales of similar businesses in your area, you can gain more realistic insights about average sale prices and how long it typically takes to sell a business like yours. Through consultations with your business broker and other experts, you can also identify the types of concessions sellers or buyers have made to close deals.
3. Getting the Timing WrongYour personal feelings aside, it may or may not be the right time to sell your business. While a strengthening economy is certainly helpful, it doesn’t necessarily mean that the business succession market is ripe for every business in every industry. Even if the market looks good, it’s possible that your position could be stronger six months or a year down the road.
Determining the best possible time to sell your business is tricky. But by consulting with your advisory team, putting yourself in a buyer’s shoes, and identifying the outcomes you want to achieve early in the process, you can uncover insights that impact the timing of your sale. In some cases, it may be better to wait until you have improved the company’s financials or until the market is more likely to deliver your desired sale outcomes.
4. Incorrectly Valuing the CompanyValuation is a tricky process. Although there is a tendency for sellers to inflate the value of their companies, it can be equally dangerous to undervalue your business. If the asking price is too low, you may leave money on the table or, worse yet, buyers may assume there is a problem and move on to other opportunities.
While your own insight and quick, easy-to-use valuation tools are a good starting point, ultimately, you need the objective valuation provided by a qualified third-party. Commercial appraisers and business brokers who offer valuation services understand the marketplace and have the expertise to provide an accurate measure of your company’s real value. Considering that your business is likely your most valuable asset, it pays to get the price right.
5. Not Spending Enough Time on PreparationMany business sellers are surprised by the amount of time and effort it takes to properly prepare a business for the marketplace. From determining value and setting the right asking price to compiling historical financials and other documents, a multitude of tasks need to be performed before you list your business.
At a minimum, you should begin the preparation process six months to a year before you intend to sell the business and, ideally, preparation starts several years in advance. In addition to allowing you to complete all of the necessary preparations, longer lead time gives you time to increase earnings or improve your company’s competitive position, making your business more appealing to qualified buyers.
There are no guarantees in selling a business and you can never be completely assured that you will achieve all of your objectives in the sale of your company. But business owners who approach exit planning systematically and methodically are more likely to maximize their business sale prices and sell on their own terms. To do it right, be sure to start preparing well in advance of actually listing your business for sale.
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|Steve Jobs and Bernie Madoff: What They Have in Common May 29th 2013, 15:00
You might not think these two have any similarities, but turns out they do.
What do Bernie Madoff and Steve Jobs have in common? More than you think.
Common GroundSteve Jobs was a legendarily persuasive marketer, known for the “reality-distortion field” that made his pitches nearly impossible to resist.
Bernie Madoff, a master of the soft sell, convinced credulous investors that he was doing them a huge favor by taking their money.
Jobs successively disrupted the computing, communication, media, and entertainment businesses.
Madoff helped build the Nasdaq exchange, where Apple shares trade to this day.
DivergenceJobs was resilient. Forced out of Apple in 1985, he later built it into one of the world’s most valuable companies.
Madoff was anything but. Rather than reveal early trading losses, he built a Ponzi scheme to conceal them.
Jobs left a legacy of beautiful, useful products, loyal customers, and frustrated competitors.
Madoff’s legacy includes vanished fortunes, shattered trust, damaged institutions, and broken lives.
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|Cheat Sheet for New Google Plus Features May 29th 2013, 14:45
Here are all of the new and classic features of Google Plus all in one cheat sheet.
Google Plus announced some big changes at the Google I/O event a couple of weeks ago, and marketers want to know how to take advantage of the platform’s new features. In fact, even seasoned social media marketers I interact with are still in the dark about many of the posting tools exclusive to the social network.
Google Plus groups your friends in Circles, allows in-app photo editing and even provides e-mail notifications. These features and more make Google Plus a useful and unique social network.
A recently published Google Plus Cheat Sheet that outlines all of its old and new posting features:
Anatomy of G+ PostsGoogle Plus updates are called Posts. If you’re new to Google Plus, the basics of posting are a great starting point for learning where the message, images, rich snippets and notifications fit into its format.
NotificationsJust like in real life, Google Plus organizes your friends into Circles. When someone adds you to a Circle, they become part of your follower base. Like Twitter–and unlike Facebook–this begins as a one-way connection.
Unlike other social networks that just “spray and pray” your updates across your friend network, Google Plus allows you to target specific Circles or even specific users. This can help you create and target groups or individuals with highly relevant content.
There are four main types of Circles:Public–This is everyone on Google Plus. As a marketer, you always want to make the majority of your posts public. An exception could be an exclusive offer to specific groups or your follower base as a whole.
Your Circles–This Circle will notify your entire follower base. Use this function sparingly, as one message isn’t usually relevant to all the people in your diverse set of Circles.
Specific Circle–This is the go-to notification feature on Google Plus. If you organize your Circles efficiently, you can share a post with a specific Circle to target a large group of people with one very relevant message.
Specific Person–It’s possible to notify an individual publicly for a more 1:1 communication.
E-mail Your Circles–This function allows you to notify up to 100 people in the selected Circles by e-mail. Overusing the e-mail functionality can quickly deteriorate your follower base, so be careful when using it.
Keyboard ShortcutsGoogle Plus’ keyboard shortcuts allow faster navigation and use of the social network. This includes shortcuts for faster scrolling, paging up and down or starting/ending a comment.
Text Styles Google Plus allows you the option to bold, italicize or strike-through all of the text to your heart’s content. Use bolding for emphasis or highlighting can’t-miss information. Use italics when adding quotes. Corrections, ironic or real, can be emphasized with a strike-through.
Rich SnippetsRich snippets are extra photos and text attached with a link. Google Plus allows you to choose from a variety of photos, and works similarly to the rich snippets on Facebook.
PhotosGoogle Plus has maximums on photo sizes. To fit inside the window with no margins (full-bleed), an image must be no taller than a 4:3 width-to-height ratio.
Google Plus also allows for photo editing capabilities like tagging people within your Circles, image rotation and adding text over the image.
HashtagsWhether social network users like it or not, the hashtag has been adopted everywhere. The latest Google Plus updates not only allow for hashtags, they also add relevant hashtags automatically. If you don’t like the automated hashtag assigned to your post, just click to delete it.
Google Plus and its features allow for efficient and targeted Internet marketing. Download or print the Google Plus Cheat Sheet for quick reference to get the most out of your Google Plus posts.
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|8 Tips to Get More From Your Investors and Board May 29th 2013, 14:21
If you don’t ask, you won’t get, says Mark Suster.
Rob Bailey is the CEO of DataSift. He wrote a post this long weekend on how he manages the board of DataSift.
You should read it.
More importantly if you don’t know DataSift but have the need to process real-time social data or historic data it’s worth checking them out. It’s valuable to any business for marketing, customer research, product development, market analysis, etc.
In his post, Rob asserts, “You get the VCs you deserve” and the corollary, “You get the performance out of your board that you deserve.”
His argument is as follows:
- Spend time building investor relationship long before you raise money.
- By spending more time educating your board on your business you get more valuable advice from them.
- Your goal should be to turn your VCs into extended members of your team to get real value from them.
- Understanding where your VC partner sits in their respective fund and where their fund is in the cycle of its investment lifecycle will help you understand your VCs behavior.
What Rob wrote in his post is right.
Rob is one of the most driven and successful CEOs I work with.
In his tenure as CEO of DataSift, we have never missed a monthly revenue figure. He has grown our US operations from one employee (him) to a global organization of 75 employees that will finish the year with 8-digit revenues (90 plus percent recurring) and more than 350 percent year-over-year growth.
Growth like this, this early in a company’s lifecycle rarely happens.
In this period (less than two years), he has brought on incredibly talented senior execs in sales, marketing, product management, client services, finance, VP engineering and more. In his spare time, he raised nearly $30 million.
But the thing I am most proud of about Rob is that he has taken a company with a uniquely talented founder and CTO–Nick Halstead–and managed to build a very tight working relationship with Nick where we drive world-class product development without having the usual founder / CEO conflicts. Oh, and did I mention–Rob is in SF and Nick is in the UK. Rob has taken more than 15 trips to England and Nick even more to the US. It is really working.
I point this out partly out of pride. Partly out of the fact that in one week I depart for England to speak at LeWeb, attend our DataSift board meeting and generally make myself available to the DataSift team to meet their customers, partners and employees.
But mostly as I read Rob’s post, I didn’t think it did justice to the superlative job he has done at managing his rather boisterous board.
It consists of a highly intelligent and opinionated founder–Nick Halstead, a wallflower–yours truly, quiet-as-a-mouse Roger Ehrenberg of IA Ventures, true-to-his-heritage Rory O’Driscoll from Scale Ventures, and then there is the one true gentleman of the bunch–Chris Smart, who is non-exec chairman. In addition to helping manage the board, Chris also helps represent the interests of the angel investors / common stock holders.
Oh, and did I mention:
Roger is in NYC. Rob and Rory are in NorCal. Nick and Chris are in London. And I am in Los Angeles. That in itself is quite a challenge.
So what are Rob’s secret hacks that he didn’t spill in his blog post?
Here is what I imagine Rob would say were his most effective tools. Sincerely, he is better at managing his board than any exec I have worked with.
1. Send email updates frequently.
Rob is an over communicator. When it comes to your board this is something to emulate. If you have investors or board members that have wide relationships, you can get significantly more value out of them by keeping them informed.
Investors and board members who know your strategic objectives can advocate on your behalf when they have chance encounters with your partners, customers or potential future investors. The more they know your strategic objectives the more laterally they can act on your behalf in key situations.
Investors and board members who know your key talking points (simplified marketing messages) will help you penetrate the consciousness of even the most hard to reach individuals. I am on a board that does business with Yahoo! One key board member knows Marissa. So naturally, we’re pushing for him to drop critical information when their paths cross organically.
Trust me — that kind of encounter can mean the difference between securing a contract, protecting yourself from getting turfed or getting acquired one day.
Equally each of your board members are probably on 5 to 10 boards. Each of your angels or seed investors may have 20 to 30 investments.
When they meet Marissa — you want them talking about you more than the others.
And as Rob points out — if you email members with short updates more frequently they are more up to speed when you do need them to weigh in.
How much is too much?
I guess you’ll have to ask them but I’d err on the side of more and let them tell you to dial it back. I’d err on the side of shorter updates versus longer ones. Key point — if your emails are as long as my blog posts you’re forked. Board members will file them rather than read them. Remember — they have 10 other boards.
Make your emails actionable. If you want somebody to take action, make it clear what you want them to do.
2. Send text messages for rapid responses
Any CEO worth his or her salt knows that her investors get an insane amount of emails and often spend eight plus hours a day in meetings (board meetings, pitches, partner meetings, LP meetings, corporate relationship meetings) so often email is done on the run on one’s iPhone or in the early morning / late evening.
It is common for an investor to read the email but not immediately reply. After all — she is just trying to get through 99 unread emails.
I always encourage people to send the email anyways with the full description of what you want but if the email requires an action then send a follow-up text 24 hours later. It should simply say, “I wanted to call your attention to the email I sent yesterday — it has one action for you.” Or, “I sent u an email. Can you please call Stacy to ask about our BD deal? Hoping to hear back tmrw.”
I know it sounds obvious. Trust me — most people don’t do it. Rob does it. On steroids. Sometimes three times a week. He did it yesterday, “Mark, I’m going to write a blog post following on from your VC’s aren’t dumb. k?” and this morning, “Mark, I sent intro to [redacted], she is in LA. Please meet her while she’s there.”
Here’s the thing people don’t quite get.
VCs crave the ability to help portfolio companies. We’re all secretly paranoid we’re not helping enough and want to know how to be more helpful. When a company gives you a discrete action to carry out — it’s gold dust. I promise you. If board members start joking amongst themselves (as we at DataSift do) that you “got another Rob assignment,” you know you’re on the right track.
Rob jokes about it. He makes fun of himself for always asking. He is very pleasant when he calls and writes. And by now we all consider him a friend. If anything we feel indebted to him for his hard work. So if all I need to do is make some customer calls, interview potential employees or help with his fund-raising decks — hallelujah.
3. Ask for short conference calls.
I would say the norm for many early-stage companies is somewhere between 6 to 10 in-person meetings per year. The earlier stage the more likely it is 10 meetings and the later stage the more likely it is 6.
In either case, it is very helpful to have a series of 30 to 45 minute calls in between. Don’t have calls for calls sake. Have topics.
“We’re trying to figure out how to best get a deal with Google. Here are our key contacts. I’d like to schedule a 45-minute call to agree our strategy and understand who your key contacts are.”
Sure — you could do this via email. But by doing quick calls, you feel more connected. More information comes out. You start to act cohesively as a group.
And you can often throw in a separate action like approving stock-option grants, getting approval for CAPEX spend, discussing fund raising timing — whatever.
4. Always seek input.
You may have an opinion on your market-entry strategy for Europe. You may know how much to pay in cash or equity for your new VP Engineering. You may have the best planning for your on-stage appearance at All Things D.
But asking your board will keep them engaged. It will also often yield unexpected results. For starters, your board may have a different perspective than you. That role as sparring partner can be useful if for nothing else than to test your resolve.
I have seen these kinds of discussions change the strategic moves of a company or yield relationships that we didn’t know a board member had to help drive forward an initiative.
If nothing else, you will create board cohesion and board education by engaging your board.
5. Assigns tasks.
Already covered. But seriously. Assign away. Ask for help reviewing your press release. Ask your VC to send a critical email to a contact. Ask them for a meeting to review your pricing strategy with you. Ask for intros. Ask them to mention you to the press, speak about you on stage when they do public events, whatever.
Ask. After all, if you don’t ask, you don’t get.
6. Fight hard, yield when appropriate and always be willing to take feedback.
In Rob’s spare time he always seems to be going to a boxing class or some other competitive, physical activity. It’s a good metaphor for his board style. He fights hard for what he believes in. In some cases, we disagree with him but decide to trust him if his resolve is firm and his logic is sound.
When it’s me who disagrees, I usually formalize it by saying, “OK, Rob. I see it slightly differently, but you live in this business every day so I’ll yield to your judgment. Let’s just revisit in six months and see if you still feel the same way.”
It’s particularly easy to give in to Rob because he is willing to back down when he either perceives that the board is unified on a different perspective than his own or when he realizes that his logic on an issue wasn’t as sound as his sparring partner.
Sometimes we fight. It sort of feels like fighting with my brothers. One of us usually calls back a couple of hours later to say they were sorry. Or they now see the other person’s perspective.
I respect Rob a lot and the fact that he is willing to take feedback when warranted gives his great credibility.
When we recommended that Rob get a CEO coach, he not only embraced it but craved it and thanked us for suggesting it. Rob is driven to learn. And improve.
7. Manages board meeting expectations — before and after.
We’ve had some good board meetings and some bad ones.
One thing Rob is consistent about is feedback. He calls us all before the board meeting to tell us what he plans to cover and see if we have other agenda items.
Equally important he calls us all after the board meeting.
“How did it go? Where could we improve? What worked for you? Where did we fall short?”
He also gives us feedback on our performance. Usually, it is reminding us to be a bit nicer.
8. Be results and measurement oriented.
Rob is goal driven and therefore measurement driven. He sets clear goals for what he wants to achieve. He doesn’t just set revenue goals. He sets “quality of revenue” goals.
He sets goals for MRR (monthly recurring revenue) to differentiate from one-time revenue, license revenue, services revenue and other.
He sets goals for revenue diversification (can’t get all revenue from few customers or few partners).
By being so metrics driven, we can have a lot more quantifiable and objective discussions at board meetings and at mid-point reviews.
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|3 Ways to Start Every Day Better May 29th 2013, 14:20
Great athletes put the odds in their favor by having a routine that helps them start each day right. Why don’t you? Here are three tips to do just that.
Most top athletes go through a preparation routine before every game which starts long before they get on the field. The best ones usually start the moment they awake. They follow this pattern with a fierce devotion because it activates all sorts of subconscious and autonomic systems that put that athlete “in the zone.” “In the zone” describes a condition of readiness and awareness that helps prepare that person for success.
If you eliminate the quirky, (Tiger Woods makes his hotel bed for instance), the obsessive, (Michael Phelps’ ritualistic warm-ups), and the bizarre, (Rocky Balboa’s dozen raw eggs for breakfast), and you just look at patterns, putting yourself in the zone to have a great day is a solid idea.
As a business owner and leader, you set the pace for the rest of your organization. Your company, even if it has just a few employees, is a reflection of you. Sharpen your company by first sharpening yourself at the dawn of each day.
Start with awakening. Let’s take the first 30 minutes to get you in the zone.
1. Body–Coming out of bed, your body needs three things for certain–water, protein and movement. Without being indelicate, your systems were all working through the night and they need to complete their cycles. Starting with 16 ounces of water gets you started on the eight glasses you already know you need to get anyway and begins the benefits that moving fluids through your body starts.
You need protein in your first food of the day, even if you are going for a run or a workout. A protein shake will do. The rest of the food pyramid is open, but even if you are a very light breakfast eater, protein is important.
Movement gets blood moving, clears the mind and releases energy. Workouts with weights or cardio are great–but sometimes ten minutes of stretching is all you have time or space for. Regardless, don’t let the first 30 minutes of the day get started without moving.
2. Mind–Your mind needs focus or you will waste time and energy in your morning and in your day. The most effective business owners and CEOs that I know actually focus on very few things. Those that receive their focus, receive all of their focus. A billionaire I interviewed told me one of his keys to success–he tries to accomplish only one thing per day. A very big thing, of course, but from the moment he woke up until he finished his day, he threw every available effort at that one thing. Most of us measure our days in volume, not in scale. How many checks on our list, not how important one big check might be. Pick the one BIG thing to accomplish and let your morning open up with that as the focus for your first thoughts.
3. Spirit–Part of putting yourself in the zone is achieving alignment of your core energy and your positive emotions. A proven way to do this is through a simple reflection of gratitude. Being grateful, aware of all you have, is a centering action. It starts your day with energy and calm. When you greet your employees, clients, and suppliers throughout the day knowing that you included them in your reflections, they will feel that in your interaction and it will make for a better exchange regardless of the circumstances.
The top performers in most fields put the odds in their favor by putting themselves in the zone. Figure out your Body/Mind/Spirit routine and follow it for a better day every day.
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|Troubles Managing Hiring? Software That Can Help May 29th 2013, 14:20
Most small business owners don’t interview often, so sometimes a bit of technology can help you make better hiring decisions.
It would surprise many job seekers, but if you’ve ever hired someone, you know that most hiring managers dislike the interview process almost as much as candidates do.
In 30 minutes to an hour, a manager is supposed to be able to figure out not only if this person can do the job, but if the candidate will fit the culture, work hard, and be worth the offered salary. Often, in order to get different perspectives, multiple people will conduct interviews. It’s time consuming and complicated and add to that, most hiring managers don’t conduct interviews all that often, so they don’t know what questions to ask.
Two relatively new companies are on the scene, aiming to help managers make better hiring decisions using the benefits of technology and information sharing. Here’s how they stack up.
The first, Sparcin, started with the recognition that there are all sorts of high tech resume tracking systems, but people were asking either questions they thought up on the spot or working off a list that a predecessor wrote in 1995 that has little relevance to the job at hand. So, Sparcin created a system that can not only help you track your applicants, but can help you with the questions.
The company offers a database of questions for various job types, and you can add your own. Indeed, one of the key interesting features is the option to crowdsource questions. You can even rate the effectiveness of a particular question. You also have a record of what was asked and if you have multiple people conducting interviews, you can divide the questions, allowing you to learn more information about the candidate as well as not forcing the candidate to answer the same three questions five times. Interviewers can record the answers the candidates give, which makes sharing easy.
You can also use the system when working with a recruiter or headhunter in order to ensure that they are screening according to the questions you want asked.
Pros: Having and easily sharing questions and answers makes interviewing a lot easier, especially for people who don’t do it often. The cost is small, starting at $50 month.
Cons: You don’t really need a system to come up with great interview questions nor to share answers with your fellow decision makers.
Overall recommendation: If you don’t find interviewing enjoyable or you’ve made hiring mistakes in the past, it’s worth the small price. Additionally, if you regularly have multiple people interview the same candidates, keeping track of what has been asked can be well worth the money.
The second, RecruityBy, is for hiring managers who are busy. Coordinating schedules between candidates and your team can be complex–especially if the candidate is currently employed. RecruitBy conducts a virtual interview. You record yourself asking the questions. Then, you email the job candidate and the candidates make videos in response. As long as they have a webcam and microphone they can record their answers. You can send out the same questions to multiple candidates and then compare the answers to each question side by side.
Pros: This is a great screening tool, especially when you are looking at out of area candidates. Your whole team can see what you see and you can help make decisions. Seeing how seriously someone takes this interview can also give you insight into a candidate.
Cons: Job candidates can record and re-record their answers until they have it just right, which may make their answers not entirely reflective of their true knowledge and personality. Additionally, because it’s as easy to send the questions to one candidate as it is 100, you may be tempted to interview far too many candidates, giving you data overload. And in order to make the final decision, I would recommend still bringing in the candidates for face to face meetings.
Overall recommendation: For out of area candidates it is a huge cost savings. (The standard cost is around $520–prices are listed in euros.) Additionally, it has the potential to be a big time saver. In these situations, it’s worth the money. For people without scheduling problems, who are local, I’d probably forgo the software and stick to face to face screenings.
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|When Experience Betrays You May 29th 2013, 14:01
Why traditional values may be our biggest stumbling blocks to innovation and global success.
We’ve been told, practically from birth, that success comes from being a good listener and following directions. Consistency is another highly regarded and very traditional virtue, as is learning from experience. But what if, in a world driven and dominated by fast-changing technology, all of this conventional wisdom is wrong?
What if past experience isn’t your best friend? What if it’s your worst enemy, because it’s no longer predictive of anything, and because it’s an impediment to the disruptive change and innovation that we need?
What if being consistent isn’t the smart thing to do, but is actually fairly stupid? It could mean that, in the time since you made your plan and started executing, you haven’t learned anything that required changes, updates, or dropping unproductive or unprofitable business. As Emerson said, “A foolish consistency is the hobgoblin of little minds.”
Over the past few years, the flows of critical information, assets and resources have reversed directions. In virtually every commercial exchange, the information equation has been reversed because of the improved access that buyers have to group intelligence, shared opinion and pricing data. These were formerly controlled solely by sellers. To capitalize on this, we’re going to need some very smart people and a good compass–rather than historical road maps–to help us find our way.
We’re entering a world where we’ll pull information and intelligence from the cloud when needed, and where we’re in control of the information equation. Contrast this with the push model, where we’re simply passive consumers. There’s just too much information coming at us for anyone to effectively process the data and make wise choices.
But that very same information overload provides opportunities for companies that can help us decide what makes sense for each of us. Companies that can help us find just what we’re looking for will set the standards for search, because “knowing” is going to be an insurmountable task. Instead, it will be about knowing where to look for answers.
Medicine offers two great examples. First, in the old days, we picked a doctor (usually through family connections or other word-of-mouth). If necessary, the doctor told us which hospital he or she was affiliated with. That’s where we went for our surgery or other procedures. There was no choice, no shopping around, no arguing. In the near future, that order will be completely reversed. We will pick or be assigned a health services organization, and that company will specify and dictate our hospital, our doctor, and to a very large extent, our course of treatment.
Then think about how drug advertising has changed the relationship between doctors and patients. It used to be that if we were sick, we saw our doctor, and he or she prescribed any necessary medications. That ability – to write scripts – was the defining legal characteristic of being a doctor. Today, thanks to television and the web, we go into the doctor’s office and announce that we need the “purple pill” or a Z-pack. We saw it on TV, and now we’re experts. Doctors spend their time arguing with us about ads we’ve seen rather than telling us what we need and what we don’t. If we don’t like our doctor’s answer, increasingly, we can go to see a nurse practitioner or clerk at our neighborhood drug store and get our fix right there.
As the information around us expands and implodes at the same time, and we are all swamped in the unceasing flow of data, we’re looking at another major inflection point, or, as Yogi Berra would say, another fork in the road. It’s not very clear what lies on the path ahead, yet it’s obvious that if we don’t make some hard choices and just stand still, we’ll be run over. Where you head is less important than the fact that you keep moving and head somewhere. When you get to the fork in the road, take it.
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|Entrepreneur or Con Man? How to Tell May 29th 2013, 14:00
Entrepreneurs and con men may share formative experiences. The difference is how they react.
Mr. Smith (not his real name) seemed like a respected, successful entrepreneur. In reality, he ran a network of sham companies whose sole purpose was to obscure the parent organization, a family business that he used to siphon more than a billion dollars from financial institutions. (I can’t share more details because the investigation is ongoing.)
I’m a specialist in the psychology of fraud who also advises legitimate business leaders on the complex drivers of human motivation and performance. Although I have no trouble distinguishing the fraudsters I investigate from the executives I advise, I can’t help noticing a few similarities.
I helped build a psychological profile of Mr. Smith to assist the fraud investigators working to recover the money that he stole. I quickly learned that he was intelligent, creative, and fiercely competitive. But then, so were Allen Stanford, the jailed ex-CEO of Stanford International Bank, and Russell Wasendorf Sr., the deposed head of Peregrine Financial Group. Both were smart, driven men who cultivated reputations as pillars of their communities.
Beneath Mr. Smith’s polished surface, darker forces were at work. Top con artists tend to share critical disturbances in formative relationships, morbid dread of humiliation, and deep feelings of insecurity and inferiority. They try to negate these internal realities by achieving power and wealth. Yet they draw on old reflexes to lie, avoid, and hide.
Some of today’s top entrepreneurs have dealt with psychological challenges. Think of Richard Branson’s dyslexia or Oprah Winfrey’s abuse as a child. Of course, Branson and Winfrey channeled emotional turmoil into productive ventures. By contrast, con artists like Mr. Smith trade in malice and betrayal.
Yet even fraudsters have businesses to run and a familiar palette of management problems to deal with. As my colleagues and I pored over the case documents, we learned about Mr. Smith’s informal management style, his bouts of irrational optimism, his tendency to reward mistakes with second chances, and his love of senseless risk taking. As we traced the org chart of his conglomerate, we found rivalry between Mr. Smith’s chief operating officer, the only nonrelative on his senior executive team, and the senior vice president, Mr. Smith’s firstborn and heir apparent.
It was a familiar family business dynamic: The COO was a seasoned executive who resented having to report to the SVP, a callow youth who owed his job mainly to his place on the Smith family tree. Had this been a legitimate company, a consultant like me might have used these data points to design an effective chain of command and a viable succession plan. In Mr. Smith’s case, they helped us bring his crimes to light.
Mr. Smith’s son and heir was ultimately decapitated in a suspicious helicopter accident. Another child took over the business but proved incompetent. Mr. Smith had been thoroughly disgraced and vilified by the time cancer carried him off. In the end, the fears that drove him proved all too real.
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|8 Business Lessons From Game of Thrones May 29th 2013, 13:46
Sure, it’s an unlikely source for entrepreneurial wisdom–but no less relevant. Here’s what to steal from the HBO series and apply to your own company.
Game of Thrones, the fantasy series on HBO, is all about loyalty and conflict resolution. Sound familiar? The dramatic twists in the Seven Kingdoms can help guide you through the throes of your own intense battles–no pillaging of neighboring villages required.
1. Pay your debts quickly.
One of the phrases that pops up in the series is “a Lannister always pays his debts”–which refers to the richest kingdom’s credo. In business, debt reduction is not just a part of your financial statement, says Heather Taylor, the Social Media Manager at MyCorporation.com. She says dry spells will come, and debt destroys any flexibility.
2. Let your competitors destroy themselves.
Plenty of start-ups enter a market that’s already inhabited by others. That can be a good thing, says Chris Healey, the Web director of marketing at Inspyder Software. As the dwarf-prince Tyrion Lannister says, your enemies hate each other as much as they hate you. Letting your “combatants” fight each other through feature wars and marketing campaigns gives you a chance to build up your own storehouses–and attract more customers.
3. Freedom begets loyalty.
In Game of Thrones, allegiance is nothing short of sacred. But it’s also portrayed as a privilege and, well, a little less than optional. Maree Jones, an account coordinator at KC Projects, says the best management style is one that gives employees options–treat them as allies, not slaves. “In a recent episode, the Khaleesi have purchased a number of slave warriors called the Unsullied. They are trained to do as they are told no matter what it is. She purchases these troops, and gives them a new sense of freedom and self worth,” she says. “In turn, they seem to be even more loyal to her–by choice–rather than by force.”
4. Be kind.
Sure, there are scenes in the HBO series that are graphic and violent–not too much to learn there. In between, there are also moments of kindness and sacrifice. Ivan Weinreb, a business consultant, says it might seem unnecessary to show kindness to a customer or business partner, but it will pay long-term dividends. As a queen tells her son in the series, “The occasional kindness will spare you all sorts of trouble down the road.”
5. Cultivate your influence over time.
A spymaster-to-the-king named Varys once explained how he was a beggar but, through cunning and manipulation, rose to prominence. (Sounds a bit like my own Twitter feed.) Andrew Aversa, the co-founder and lead developer at Impact Soundworks, says that’s precisely how social networking works: You build an audience one person at a time. “Each connection you make, each new client, each review, interview, or press release, contributes to your business’ profile and your own personal influence and network,” he says.
6. Unity builds power.
Robert Baratheon, also known as the King of the Seven Kingdoms, once explained how the power of an army can work. He held up five fingers, and then held up one finger. Then, he asked the queen which number is greater. She guessed wrong: Power comes in one unified approach. As Nick Dujnic, the multimedia marketing manager at display ad company LiveIntent explained, a united team is more powerful than a group of zealous individuals working independently. “Choose people that are passionate and focused on a singular goal–your goal,” he says. “The worst thing you can do is to surround yourself with a team that, no matter how smart or talented, does not believe in your product. A united force, one that truly believes in what you are doing and wants to see it through to the end, will do what is necessary to find success.”
7. Plan your strategy… or else.
House Stark, who rule in the northern lands of the Seven Kingdoms, has a lesson that’s easy to forget for any start-up: Winter is coming. This theme is a major plot-point in the series, and the opening of the latest season shows the remnants of a wintery battleground. “Strategic planning for the long term and being ready for any disasters which may come in the future are important traits for successful small business leaders,” says Daniel Saynt, the chief creative director and founder of blogging network Socialyte Collective. “While entrepreneurs may feel reinvesting back into the company is the best use of profits, those who save a reserve as a rainy day fund find that their companies navigate bad times better.”
8. Know who to trust.
Knowing who to trust is critical, especially when a company first launches. Elizabeth Zelman, a marketing associate at bid management company Privia, says a common theme on the show is knowing the difference between friends and enemies. “Eddard Stark chooses to trust Littlefinger and gets his head chopped off for his efforts,” she says. “If he had trusted Renly instead, things would have turned out differently.” Sound a little dramatic? Sure–but a good lesson for anyone trying to build a company.
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|Bootstrapping a Services Business: 3 Steps May 29th 2013, 13:21
My self-funded company was named one of the fastest-growing in the San Francisco Bay Area. And bootstrapping is even easier now.
Sixteen years ago, I bootstrapped a services company with a partner who lived 3,000 miles away. We both worked from home. We had pre-owned Macs and fax machines, existing software applications, and cheap office furniture. We spent less than $10,000, including legal fees, to draw up our articles of incorporation. In our first year we made $400,000. The next year, sales doubled.
Bootstrapping a service business isn’t what it used to be. It’s far easier. Here’s how to get going:
Start by researching your idea online. Find out what the competition looks like and determine how your offerings will be different. Grill potential customers to find out what they really want and how much they’ll pay. To see who’s investing in your space, think about what your Google keywords would be, and then see who’s buying them on Adwords.
Where will you get the money to launch your business and support the inevitable lean ramp-up? Do you need office space? What equipment and software will be required? How many people will you hire? To get a handle on these questions, you might try the Small Business Administration’s free SCORE program, which can help match you with a mentor. SCORE also offers free online workshops on topics such as Developing a Business Plan.
After you’ve completed the initial legwork done, it’s time to get going. Here are some areas just about every entrepreneur needs to tackle.
Legal. Figure out which form of incorporation will be best for you: sole proprietorship, LLC, S corporation or C corporation? Some entrepreneurs use online legal forms such as those from LegalZoom.com or Nolo Press, then hire an attorney to check their work. You may also need a business license to set up shop in your city, and you should also look into business insurance.
Accounting. You don’t want to mix personal and business funds. Set up a business bank account and credit card. Then look at accounting software, but trust me: Software can’t replace great accountants and tax experts who truly understand your business. But you can certainly get going with affordable accounting software options like QuickBooks and FreshBooks. Sole proprietors might use the free Mint.com.
Sales and marketing. Your website is an online brochure and portfolio, so start there. Wix and WordPress are two popular and inexpensive options. It’s hard to be objective with your own marketing, so consider a part- or full-time consultant who understands your audience and can help you get traction fast.
Partnering. Are there other small businesses you can partner with to make your service even more attractive? For example, a solo website designer might partner with an independent copywriter. Can you trade services or refer clients to each other? Just be sure to put details of your collaboration in writing so there is no confusion or nastiness later.
After the start-up high fades, how will you keep your business strong? Remember, that as a service business, your online footprint is your storefront. Blogging, posting to social networks, sending opt-in email newsletters, and offering special promotions are critical to maintaining high visibility.
Prioritize and delegate every day. Otherwise, it’s easy to get distracted and overwhelmed. If you’re the Big Idea person, you need to outsource tasks to others who can do it better and cheaper than you. College students are always looking for solid work experience, so hire them as interns.
Once you’ve been in business a while, you’ll see patterns. Some months are slow – and then suddenly your hair’s on fire. That’s just one reason to consider a flexible workforce. You also need to build sales and marketing programs that can scale with your ebbs and flows.
My company was named one of the fastest growing in the San Francisco Bay area, and it’s been the adventure of a lifetime.
Work hard, stay passionate, and pay your taxes.
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|8 New Tech Companies to Watch May 29th 2013, 13:15
These start-ups offer innovation in many forms: better data visualization, a hardware solution for better security, and more.
The following companies offer something new and novel. Thanks to these innovative entrepreneurs behind them, you can now use a Bluetooth headset for better security, easily visualize tons of data on your iPad, and more.
I’m impressed a company can pull off such a unique security trick. I’m even more surprised no one has thought of this before. CloudVaults uses a Bluetooth headset as a security device. You can unlock a smartphone only when the headset is present. (The service also lets you use other Bluetooth devices, including your car stereo.) This authentication helps if you lose your phone or forget your password.
I’m planning to use this service the next time I fly on business. Unlike the plethora of travel apps available, including Kayak and Google Flight Search, this app lets you search based on more detailed criteria, like whether the seats are wide enough or if the plane is newer. The rating system is not just about quality, but overall contentment.
This video-chat portal, a bit like Chatroulette with a deeper feature set, allows you to chat with anyone, share a music stream or video, or even just watch another group of people interact. The circular interface, with hints of Google+ and Skype, is persistent in that you can have it up and running at all times and invite others to join.
You might say this company intends to change the well-known mantra about how “information wants to be free” to “information wants to be visual.” Using an iPad app and culling data from services like Salesforce.com and Twitter, you can pinch, zoom, and swipe through reams of data and see the details up close.
This start-up knows its audience. The Lively device, which you install in the home of an elderly parent, uses a sensor to track movements around the house. You can install multiple sensors to see if the person has visited the kitchen, the living room, or left the house. The hub connects over a cellular network and does not require a wireless router. Adult children receive alerts by text or email. And, they can bridge the tech gap by communicating via a LivelyGram, which are printed messages and photos delivered by mail.
This systems management software company started in August of last year after creating an open-source version called Salt. (As you might guess, the company is based in Salt Lake City.) Most systems management tools from companies like IBM are expensive. Salt is free, and SaltStack is the commercial, fully supported variant. The 15-person firm already has big-name customers like HP Cloud, LinkedIn, and Cars.com on its roster.
Based in the UK, this start-up offers call-center software to customers including Virgin Atlantic Airways, Aviva Insurance, and Sky Broadcasting. When someone calls in to place an order, the software lets that person type a credit card number into the phone keypad. But, for added security, the button presses are encrypted and the tones all sound the same. During the call, the agent can stay on the line and assist as needed.
The pay-as-you-go rewards company Mplifyr started in an unusual way. The four founders locked themselves in a 9×9 room for five weeks to create the unique Universal Points loyalty system. Now in an official launch after a closed beta last fall, the points earn customers rewards like a meal voucher or a free DVD player. The system is aggregated from multiple businesses as opposed to being a closed reward portal like My Starbucks. So, if customers shop at a bagel store and a bike store, they might earn a free bagel.
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|The Device That Could Change the Way We Use Computers May 29th 2013, 13:00
Here’s how Leap Motion developed its disruptive technology–from a math formula to the shelves of Best Buy.
Michael Buckwald and David Holz, a pair of unassuming twentysomethings from Florida, arrived in San Francisco in 2010 with two 30-pound backpacks slung over their shoulders.
In the bags was the earliest prototype of what would become the Leap Motion controller, a computer accessory that uses tiny embedded cameras and LEDs to track a user’s hand movements. The device, which is expected to ship to customers this summer, is a bit like the Xbox Kinect, only about 200 times more accurate: Leap’s sensors track finger movement within 10 microns. (The width of an average strand of human hair is about 100 microns.)
The Leap Motion controller may very well be a game changer in computing. The company, which began taking pre-orders for the $80 device last year, has already tallied hundreds of thousands of orders. To keep up with the manufacturing demand, Buckwald and Holz raised $30 million from venture capitalists, bringing the company’s total funding to about $45 million.
Here’s how Buckwald and Holz took the Leap Motion controller from a complex math equation to the shelves of Best Buy.
2010: “It was time to start a company.” Buckwald and Holz have been friends since middle school. They stayed in touch throughout college, but Buckwald, who had an interest in entrepreneurship, never imagined he and Holz would eventually go into business together.
Buckwald: In college, I started a company called Zazuba, which I sold to Yellow Pages. I was looking for the next thing that I wanted to work on. David was getting his math Ph.D. and came to visit me.
Holz: I was doing applied mathematics in graduate school, working for NASA on the side, and building what would become the first versions of Leap. My thinking was, instead of solving one problem, I’d rather make it easier for people to solve multiple problems.
Buckwald: Even though a 5-year-old can build a clay cup in minutes, it would take a professional modeler hours to do the same thing on a computer. That’s not because computers aren’t powerful; it’s that there are barriers between humans and the computer. David’s technology would break down those barriers. We decided it was time to start a company.
2011: The crude prototypeAfter cobbling together a prototype out of parts from Radio Shack, the friends moved to San Francisco and began pitching their idea to venture capital firms.
Buckwald: Our goal was to raise money and hire some great people to help us create a useful product. Our first prototype had to be carried around in two backpacks. It weighed a lot and took a long time to set up. It was basically a Logitech webcam and a bunch of LEDs in plastic Radio Shack cases, duct-taped together and connected to a laptop.
It could track only one finger. Still, we were talking to investors and selling a vision that we wanted to fundamentally change how humans interact with computers. People were skeptical.
The turning point of investor meetings was when they got past the look of the device and put their fingers in front of it to control something. We’d let them play games, like Fruit Ninja. It was crude, but our prototype was still orders of magnitude faster and more accurate than existing gesturing devices. It was a very powerful experience to feel connected to a computer like that. Even the skeptics were blown away by how fast it was.
2012: A dozen versions later…Buckwald and Holz raised about $15 million and hired about 50 employees to help them refine their design. When the company began taking preorders in early 2012, demand was so high that Buckwald and Holz hit up investors for another $30 million to step up production.
Holz: We went through major revisions of the components many times in order to make the Leap smaller and smaller.
Buckwald: Getting the size down was important, because we wanted to be able to embed this technology in other devices. We probably talked to more than 30 lens manufacturers to find lenses small enough that had a wide-field view. People said it was impossible. But we didn’t take no for an answer.
We had to convince suppliers that this product would be disruptive and would create new opportunities for them. Our devices would have been twice as tall if we had used lenses that existed off the shelf at the time that we started making Leap.
Holz: We also wanted it to feel sturdy. Originally, we were going to go with plastic, but we went with aluminum. It wasn’t 10 times more expensive, but there’s a cost for quality.
2013: Ramping up for launch The co-founders announced deals with Best Buy (to carry the Leap Motion controller in its stores) and HP (to embed Leap’s technology into its products). Leap produced more than 600,000 devices, but owing to software issues, the founders pushed back the launch date from May to July.
Buckwald: We have only one opportunity to launch. Just one opportunity to prove to the world that this type of control–with the accuracy Leap Motion has-;is a better way of interacting with computers. To do that, we have to take a little bit of a delay and spend a little extra time and energy on polish.
One of the greatest opportunities for this technology is to let regular people do things they just can’t do today with computers. Our approach has never been used before in academia or in industry-;it’s built on top of advances in pure math. The biggest advantage we have is that the company was not created to make products that make money. It was built by David to solve this very specific problem.
We’re in the office 12 to 15 hours a day, six or seven days a week, but it doesn’t feel like work. It’s been a lot of fun, and it continues to be a lot of fun.
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|Top 10 Inspirational Business Books May 29th 2013, 12:00
These classic books have helped millions discover and achieve their dreams.
A while back, I posted the Top 10 Motivational Books of All Time. Today, I’m posting books that are inspirational rather than motivational. Here’s the difference: motivational books get you up and running; inspirational books help you know where you want to go.
Note: I’ve specifically avoided books that serve as scripture for the great religions, like the Bible and the Koran. I’ve also not included any “How I Achieved Greatness” books by CEO authors, which I (frankly) find annoying rather than inspirational.
The list below consists of books that have, IMHO, historically had a broad appeal throughout the business world:
10. Feel the Fear and Do It Anyway
In this book, Susan Jeffers shows you how to stop being afraid of, well, being afraid. Instead, you can use your fear to your advantage–an ability that has never been more important in a world where “job security” is a disappearing dream. When the world is changing at light speed, it’s normal to be afraid, but you must still make decisions and take action, despite your fear. All it takes is courage.
Best quote: “By reeducating the mind, you can accept fear as simply a fact of life rather than a barrier to success.”
9. The Alchemist
The best way to learn something profound is usually through a story. In this sometimes sentimental novel, Brazilian author Paul Coelho illuminates the pathway through which a young boy, through the help of mentor, finds his role in life and the meaning to the work he must do. The lesson is that you must follow your dreams but also that there truly are others who can and will help you on your way, even as your dreams change as you grow.
Best quote: “When you really want something, the whole universe conspires in helping you to achieve it.”
8. The Element
There’s more to success than having a dream and getting motivated to achieve it. You must also have talent, and put yourself into an environment that fosters and develops that talent. Much of the battle, according to Ken Robinson and Lou Aronica, is discovering the latent talents that you possess as an individual. These talents are the signpost that lead to your own, individual, personal success.
Best quote: “We are all born with extraordinary powers of imagination, intelligence, feeling, intuition, spirituality, and of physical and sensory awareness. For the most part, we use only a fraction of these powers, and some not at all.
7. Magic of Thinking Big
Most people have little goals that provide little inspiration. By contrast, it’s always the people who think big who end up accomplishing the most. In this classic, David Schwartz counsels readers to dream big–financially, personally, and in every other way–and then take the practical steps necessary to turn those big dreams into an even bigger reality.
Best quote: “Success doesn’t demand a price. Every step forward pays a dividend.”
6. The Last Lecture
If you vanished tomorrow, what would be your legacy? It was a poignant question for professor Randy Pautsch, since it was asked of him right after he was diagnosed with terminal cancer. His
on achieving childhood dreams is one of the most-widely viewed videos on YouTube, but I prefer the book version, because reading gives you the time to truly ponder the incredibly important points that Pautsch makes.
Best quote: “My uniqueness, I realized, came in the specifics of all the dreams–from incredibly meaningful to decidedly quirky–that define my forty-six years of life. Sitting there, I knew that despite the cancer, I truly believed I was a lucky man because I had lived out these dreams.”
5. Don’t Sweat the Small Stuff
This book is what you might call “reverse inspiration.” It explains why the uninspiring and stress-inspiring elements of your life aren’t important and can safely be, if not ignored, at least handled without much effort. By laying out a way to deal with the trivialities of life, Richard Carlson has probably set more inspiration free than any author who’s addressed the subject matter directly.
Best quote: “When you learn the habit of responding to life with more ease, problems that seemed ‘insurmoutable’ will begin to seem more manageable.”
4. The Secret
Rhonda Byrne believes that “like attracts like” and that therefore the results that you get in life are simply a reflection of the quality of your thinking. If you have positive thoughts, wonderful things happen, but negative thought propel your life down the metaphorical toilet. To be honest, this particular book is a trifle “new age” for my taste, but so many people suggested it to me, I felt that I had to include it.
Best quote: “The truth is that the universe has been answering you all of your life, but you cannot receive the answers unless you are awake.”
3. The Power of Full Engagement
Sport metaphors are common in business (e.g. “let’s hit a home run, people”) but this book is something different: a method to manage your energy rather than your time. Jim Loehr and Tony Schwartz take the most recent methods of successful sports coaching and explain how you can “train” to be more successful by learning how to get into the zone where every decision tends to be the right one.
Best quote: “The performance demands that most people face in their everyday work environments dwarf those of any professional athletes we have ever trained.”
2. As a Man Thinketh
My first mentor gave me a portable copy of this book not long after I set out to be an independent writer. He was concerned that, after years of corporate life, I might have “absorbed” the sense of helplessness that comes from being a cog in a huge machine. In this book, James Allen forces you to confront the beliefs and thoughts that are either making you miserable or happy.
Best quote: “As the plant springs from, and could not be without, the seed, so every act of man springs from the hidden seeds of thought, and could not have appeared without them.”
1. Your favorite here.
Since inspiration is, by its nature, highly personal, the No. 1 inspirational book is always the book that really inspired YOU. If I haven’t included your favorite in this list, leave a comment with the title and, if you’ve got time, why you found that book so inspirational.
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|Nobel Prize Winner: Your Business Should Help Others May 28th 2013, 20:49
To end world hunger, don’t give away money. Just start a business, says Muhammad Yunus.
There’s an old adage that goes, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”
It’s a principle that can also be applied to solving unemployment, said Muhammad Yunus, a Nobel Peace Prize winner and banker.
Speaking at the London School of Economics, Yunus explained how giving money to the poor might help in the short-term, but is not the best way to solve poverty because it can only be used once. By creating social businesses, however, entrepreneurs can create jobs for others, providing them with the means to support themselves.
“Capitalism is about options, so shouldn’t people have the option to start a social business or a profit-maximizing business or both? You have to use your creative power to make it happen,” he said. “Nothing is beyond the capacity of human beings. Every time I see a problem I think, how do I create a business to solve the problem?”
The same thinking applies to recent graduates as well. Rather than complain about a shortage of jobs, he said they should just start a business to make them.
“If you change the mindset of enough people around the world, it could mean the end of poverty, unemployment, and the need for welfare globally,” Yunus said.
Yunus has founded about 60 social businesses to help the world’s poor as well as Gamreen Bank, which currently has 8.5 million customers in Bangladesh and 12,000 in New York City.
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|So You Think You Have ADD… May 28th 2013, 20:45
Can’t focus and missing deadlines left and right? Here’s how to take back control.
I hear it all the time: An entrepreneur says she gets nothing done because of her ADD.
But only a physician can diagnose ADD. Most entrepreneurs suffer from chronic procrastination.
“Procrastination is a weakness in the Executive Function of the brain associated with the pre-frontal cortex,” says learning disabilities expert Laura Reiff. “The pre-frontal cortex is the part of the brain that affects self-regulating behavior when we take in new information. This is where the planning and generating of strategies originates.”
According to Reiff, this weakness can create a lifetime of deeply ingrained destructive behavior, and fixing it doesn’t come easy.
How Procrastination Takes a Toll
Procrastination creates a gap between what you intend to do and what actually happens–or not. Ideally, you’ll achieve your goals, but in actuality you’ll fall short. Experts use the comparison between the Ideal Self and Actual Self to demonstrate the gap.
When we get excited about a new project, we create big goals we hope to achieve. This is your Ideal Self planning what it wants to accomplish. But when the excitement fades away and the work kicks in, the Actual Self takes over and avoidance comes into play.
The problem is this “feel good now, pay later” cycle of behavior only deepens those feelings of failure.
Procrastination versus ADD
Procrastination is often confused with ADD because they seem similar. Disorganization, poor impulse control and planning are all part of the problem.
But according to Reiff, those who suffer from ADD don’t store information on what they should be doing whereas a person who procrastinates does, but chooses to not follow through.
How to Conquer Procrastination
Begin by admitting that you have a problem. Then find someone who will hold you accountable as you implement change. As you work through these strategies, remember you have been living with these deep fears for a long time and that they are real. Be gentle with yourself. Since the fears may be deep-rooted, you may want to seek professional help to address them.
Take a Step-By-Step Approach to Goal Setting
First, make your goals smaller and take them one at a time. Allow yourself to experience the feeling of success as you work on your bite-sized goals day after day. You may find the idea of smaller goals frustrating, but consider where your current strategy has gotten you.
Display your monthly schedule and daily to-do lists so that you know exactly what you need to do on an ongoing basis. This will remove the task of figuring out what’s next and increase your productivity immensely. You’ll also notice a reduction in stress and a feeling of accomplishment as you cross each item off your to-do list.
Track Your Progress
Recognize what triggers you to stray off task by keeping a journal of your daily thoughts and actions. Do you daydream? Allow a continual flow of interruption? Getting really honest can help you learn how to transition between tasks or shift activities without falling into old patterns.
Manage Your Space
- Minimize clutter
- Consider different workspaces for different activities
- Create an easy color coded filing system
- Use post-its as constant reminders for the smallest of tasks
Find a Mentor
This is vital to keeping yourself. You have lived this way for a long time and will need the added support to establish new patterns of behavior that will ensure your success.
Procrastination is a huge issue many entrepreneurs face. The good news is it can be corrected. With hard work, determination, and support, you’ll find yourself accomplishing your goals.
For more information on procrastination, check out my interview with Laura Reiff on Million Dollar Mindset radio.
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|VCs See Uptick In 10-Year Returns May 28th 2013, 20:40
If the 2012 trend continues through 2013, venture capitalists will have something to smile about.
When it comes to returns on 10-year old investments, 2012 has sure been kind to VCs, claims a performance benchmark report by Cambridge Associates and the National Venture Capital Association (NVCA).
According to the report, VC performance for the 10-year horizon has continued an upward climb for 11 consecutive quarters. Average returns for the fourth qarter, ending on December 31, 2012, reached 6.9 percent, more than doubling in the past year. At this time in 2011, the same rate of pooled end-to-end returns, net fees, expenses and carried interest, was 3.3 percent.
This climb is good news, said Peter Mooradian, managing director and VC research consultant at Cambridge Associates. “A more reasonable supply of capital pursuing deals should translate to further improvement, but the exit markets will need to cooperate more broadly as well,” he said.
“It is interesting to note that 2012 is the first post-bubble year in which venture funds collectively distributed more cash to limited partners than they brough in,” added Mark Heesen, president of NVCA.
This last observation isn’t particularly new, as it echoes the findings of NVCA’s first quarter of 2013 report released earlier in April. While VCs raised $4.1 billion that quarter, quite a bit more than the $3.3 billion in funds raised during the fourth quarter of 2012, the number of funds themselves dropped from 44 to 35, the lowest number of funds raised in a quarter since Spring 2003.
Reflecting on the lower IPO and acquisition volumes in the first half of 2013, Hessen added that VCs are “counting on a more robust exit market beginning in the third quarter to continue along” the constructive path of VC performance.
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|What the Sequestration Means for Small Business May 28th 2013, 20:32
Over-reliance on government contracts can crush your start-up, says Rocket Lawyer’s Charley Moore.
After Win Construction secured its first federal contracts in 2004, business was good–for a time.
Between 2004 and 2011, the company received some $2.6 million in government contracts, allowing it to grow and expand its workforce.
But then came the budget battles of 2011 and 2012, leading to fewer contracts and ultimately this year’s massive across-the-board cuts, known as the Sequestration. The construction company has since been forced to cut back its payroll.
“Nobody has said, ‘Because of the sequester we’re not going to do as much work as we have been doing,'” said Win Construction’s Willone Eubanks. “But effectively, that’s exactly what’s happening.”
The Sequestration is a child of The Budget Control Act of 2011, passed to end the 2011 U.S. Debt-Ceiling Crisis, which threatened to push the country into sovereign default. The statute introduced the creation of the Congressional Joint Select Committee on Deficit Reduction, options for a balanced budget amendment and automatic budget sequestration.
After months of partisan bickering failed to produce a budget compromise, on March 1 the Sequestration began the much-dreaded process of slashing federal spending by $85 million in the remainder of the 2013 fiscal year and cutting some $1.1 trillion over the next decade. The spending cuts primarily hit education, defense, and social programs.
According to a study by Dr. Stephen Fuller of George Mason University, if the cuts are fully implemented, more than 2 million jobs could be lost–nearly half of them coming from small businesses.
“Many small businesses are subcontractors, suppliers and vendors to larger scale businesses that are the prime federal contractors that have little recourse when their contracts with their primes are scaled back or terminated,” Fuller said. “In fact the suppliers and vendors may not even know that their business is linked to a federal contract that could be canceled due to something called sequestration.”
Say what you will about Uncle Sam’s sticky fingers, but many firms rely on his hefty pocket book to survive, if not thrive. Each year, the federal government spends more than $500 billion on private-sector contractors and in 2011 small firms received some $91 billion in federal contracts.
Tapping into the federal government’s considerable coffers might be great while the going is good, but it comes at a price: unpredictability. While most business relationships are based on logical arrangements, when Washington gets involved, all bets are off.
A successful business depends on forecasts, or being able to gather and interpret all available data and arrive at actionable conclusions. Granted, the ebbs and flows of business and consumer demand can be difficult enough to follow–how can businesses make plans to anticipate the fickle folks on Capitol Hill?
Despite its deadlock, the government will continue to be a major revenue source for many small businesses. How can firms balance the business opportunities of federal contracts with their inherent unpredictability?
The answer is simple: diversify.
Take defense contractors, who are already experiencing extensive cuts from U.S. troop withdrawals in Afghanistan. High-tech company Beacon told the AP it receives 90 percent of its revenue supplying information management software to the Navy, but anticipating the Sequestration last year, decided to diversify and begin selling to manufacturers and other companies.
More than two months after the Sequestration began, nobody still seems to know what its ultimate effect will be on the economy. For entrepreneurs and small business owners alike, it is a stark reminder not to rely too heavily on government contracts for predictable long-term growth.
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|Facebook Can’t Fix Papa John’s Butt-Dialing Snafu May 28th 2013, 20:20
Papa John’s did its best to handle the situation, but relying on a post was like fighting fire with a water pistol.
Two pizza delivery employees at Papa John’s learned you never know when you’ll accidentally dial a customer–and leave a racist voicemail that gets you fired.
And Papa John’s learned something, too: Responding to an ugly incident with a Facebook apology will only get you so far.
Two drivers for a Papa John’s store in Sanford, Fla. delivered a pizza to an African-American home. After dropping off the order and driving away, one of them accidentally dialed the customer’s phone. The two left a lengthy voicemail filled with racial slurs set to music from Gioachino Rossini’s opera, The Barber of Seville.
They claimed the customer hadn’t tipped, although his track record suggested otherwise. But that wasn’t the worst of it: The customer was so angry he posted the charge slip with the message online.
“The only thing I’ve been authorized to say is that as soon as I found out about it, we looked into it right away,” Keith Cooper, manager of the Sanford Papa John’s store, told Inc.. “We moved very quickly to separate those team members from their employment. We don’t tolerate that kind of behavior.”
Papa John’s tried to combat the incident with a lengthy apology on Facebook from CEO John Schnatter. However, reader reactions were mixed, suggesting it will take significantly more to satisfy the public.
“Friends, I am extremely concerned to learn about the reprehensible language used by two former employees in one of our restaurants. Their thinking and actions defy both my personal and the company’s values, and everything for which this company stands. The employees responsible for this absolutely unacceptable behavior were immediately terminated.
“My heartfelt apology goes out to the customer involved, his family, and our community at large. I am very sorry that anyone would be exposed to these hurtful and painful words by any person involved in any way with our company.
“Thank you for your important comments. I have personally reached out to our customer to share my own thoughts and offer my deepest apology.”
Although there were some supportive comments, the post got many negative responses. Here’s one from Facebook user Susan P. Zealley:
“Now you call us ‘friends’ it wasn’t long ago that you were going to pass on any increase over healthcare to us ‘friends’ so that your shareholders wouldn’t have to suffer … 11 cents per pizza as I recall … Your company continues to be a joke.”
And here’s another from Nathan Davis:
“Keep your apology and your nasty pizza! These employees got caught because they are idiots, but they had to feel some comfort in their thinking and language that your corporate culture tolerates, if not endorses.”
The company is clearly not out of hot water, and repairing its reputation could take considerably more effort.
Experts in corporate apologies generally say words alone are usually insufficient. The company must take strong action to ensure the situation does not happen again.
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|Recovery Motors On for Small Business May 28th 2013, 20:05
More good economic news from small businesses, data suggests.
Small businesses continue to point the way toward recovery, according to a monthly survey of private companies by Sageworks.
A combination of increasing net profit margins and decreasing likelihood of default are positive signs that businesses are likely to either borrow or use cash reserves to fuel things such as acquisitions, investment in equipment, and hiring.
The latest monthly data from Sageworks analyzes 1,000 financial statements gathered from private companies every day. The companies range in size from less than $10 million in revenues to more than $1 billion. The current data is for the six months ended April 30. The new data comes amid a rush of positive news for the overall economy, including recent stock market gains and major strides in housing prices.
“The recession taught many companies to be very cautious and conservative, but their bigger [cash] cushion and improved probability of default will lead to a higher confidence to do things like hiring and expanding, and both of these things are good for the economy,” says Libby Bierman, an analyst for Sageworks.
Net profit margins rose 6.8 percent, flat from the previous month, but up more than two percentage points from the same period a year earlier. Sales increased 10.1 percent. The rate of growth was essentially flat from April of 2012.
The steady improvements follow data from March, which showed increasing strength across sectors, more specifically in construction. Sales increases in construction last month increased to 13.2 percent from 10.4 percent a year ago. Net profit margins more than doubled to 4.5 percent.
The average probability for loan defaults fell a full percentage point to 4.1 percent for all companies, while debt to cash flow decreased nearly half a percentage point in April to 6.6 percent.
Private companies are “in a better place to ask for loans from banks or less traditional forms of credit,” Bierman says, and lenders are more likely to respond positively if they see strong balance sheets.
One potentially worrisome sign, however, is that gross profit margins decreased nearly 2.5 percentage points to 54.2 percent compared to the year earlier period, continuing a year-long trend. That suggests private companies are under pressure from things like increasing rent, taxes or other overhead that they have not passed on to consumers.
“Rather than risk losing their customers’ business, they are finding other places in the company to cut back,” Bierman says.
One category of businesses that’s bucking some trends is privately owned gas stations. Sales growth for the last 12 months was 2.1 percent, down more than 15 percentage points from the same period a year earlier.
The continuing high cost of gasoline likely drove the sales growth decline, Bierman says, although profit margins for private gas stations have continued to grow along with the rest of the retail sector, which experienced a net profit increase of 3.2 percent, up from 2.2 percent a year ago.
“It’s such a volume-business, a change of just a few cents could change their top line revenue significantly, hence the large swings,” Bierman says.
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|Richard Branson: It Doesn’t Cost Much to Start a Great Business May 28th 2013, 19:28
Short on cash? That’s still no reason to hang up your entrepreneurial dreams, says the Virgin Group founder.
Think you need buckets of cash to launch a business?
Think again, says serial entrepreneur and Virgin Group founder Richard Branson. “A business can be started with very little money.”
The entrepreneurial bug first bit Branson in the mid 1960s, when he tried to grow and sell Christmas trees and budgerigars, a type of parakeet. Both endeavors tanked, leaving him with no money to launch the magazine for teens he so desperately wanted to publish.
Branson had wanted to give young people a way to speak out against the Vietnam War, but with no funds, he wasn’t sure where to start.
As luck would have it, Branson’s mother stumbled upon an expensive necklace one day, which she turned over to the police. When no one claimed the necklace, she decided to retrieve and sell it and gave her son a small cut of the profits. Branson put the measly funds toward advertising and Student magazine was born in 1968.
The publisher followed Student with a business selling mail-order records in the early 1970s, which evolved into Virgin records. Virgin Atlantic Airways took flight in 1984, and Branson has been dabbling in business ever since.
“I think because I have great difficulty saying the word ‘no,’ almost every day’s a different adventure,” he’s said.
Perhaps not needing money helped too.
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