Recent Business News...


  • Stand out from the crowd by leveraging events or holidays that may fall into the nontraditional category.

    Being a marketer at heart, I'm a huge fan of leveraging events or holidays that may fall into the nontraditional category. If you think about it, it's a great way to stand out.

    Everyone and their brother are engaging in e-mail marketing around common holidays, but say your company gets on board and decides to celebrate Star Wars Day. (That's May 4, if you didn't know.) I bet you'll have a bit less competition in your subscribers' e-mail boxes, and your offer will certainly be more memorable!

    Why should you consider this approach? Many of your subscribers might not even be aware such a day exists, so they may stop and think, "Huh! That's fun!" Also, their inboxes won't be full of 20 other offers with similar subject lines and promotions at the same time as yours.

    My e-mail marketing company,VerticalResponse, recently put together a guide with 50 unique examples to inspire you.

    Two of my favorite companies are pros at leveraging these nontraditional events or holidays: Virgin America and Uber.

    I've written about what you can learn from Uber's National Cat Day promotion. One of the key takeaways from that promotion was that even if your business has nothing to do with the holiday (Uber really doesn't have anything to do with cats, do they?), you can still do an effective and memorable campaign around it.

    The same can be said for e-mail I got in my inbox this week from another company I use a lot, Virgin America. They're running a promotion to coincide with Star Wars Day. The promotion, simply called, "May the Points Be with You," promotes double points on flights. It's the creative copy and imagery that reeled me in.

    The promotion has a secondary element that encourages folks to take a selfie on a Virgin America flight dressed as their favorite Star Wars character on May 4 and tag it with the hashtag #StarWarsSelfie. In keeping with the theme, winners will get "Jedi" status for a year and a Star Wars-themed swag bag.

    How can your business get inspiration from these two creative examples for your own nontraditional promotion? I'd love to hear in the comments or see it in my inbox!

    Did you enjoy this post? If so, sign up for the free VR Buzz and check out the VerticalResponse Marketing Blog.



  • The pink mustaches are coming to 24 new markets, from Jacksonville to Spokane.

    Now that ride-sharing startup Lyft has more venture capital than Uber--$333 million, to be precise--it's speeding up launches dramatically. That is to say, it's dropping a whole bunch of them all at once, today.

    Lyft, the community-driver platform known for its spunky attitude and pink mustaches on drivers' hoods, is launching in 24 different midsize American cities Thursday, from Albuquerque to Virginia Beach. Here's a list: Albuquerque, Ann Arbor, Buffalo, Colorado Springs, Corpus Christi, New Haven, Fresno, Jacksonville, Kansas City, Lexington, Lincoln, Louisville, Memphis, Modesto, North Jersey, Oklahoma City, Omaha, Raleigh Durham, Rochester, San Bernardino, Spokane, and Virginia Beach.

    That's 60 cities total for Lyft in the United States, more than any other upstart ride-hailing company. I asked Lyft co-founder John Zimmer, why go so big in one single day? He says he wants to demonstrate the simplicity of a Lyft launch in any city, because, unlike Uber's model, a launch doesn't require assembling--or parachuting in--a team of company employees there.

    "We really want to demonstrate the power of the peer-to-peer model," he says. "The community is built by the community, and drivers find new drivers. We want to have the most availability across the country, and now we do."

    There's no shortage of risk in such rapid launching. Regulators in several of the cities are already raising eyebrows at Lyft, which allows car-owners to become Lyft drivers, who connect with passengers needing an affordable ride through an app. For example, there's a cease-and-desist letter in Omaha stating companies such as Lyft and Uber can't operate unless the carrier has a "certificate of public convenience and necessity," according to local ABC affiliate KETV. And Colorado lawmakers are mulling legislation to change how technology companies that facilitate ride-hailing are regulated.

    "Just like we've done in other cities, we want to work together with local officials," Zimmer says. "We do have a decent-sized government relations team that can reach out to them and work with them."

    He adds that the company has "a safety pledge and promise to our users," and requires strict background checks, driving checks, and more driver insurance than local taxis.

    Aside from the fact that this expansion blitz nearly doubles the ground Lyft covers in the United States, what will be interesting to watch here is how Lyft functions on the ground in less-dense geographies. For instance, look at the map of Milwaukee's Lyft coverage area: It expands far beyond the city center, out into suburbs and even farmland.

    Might someday a farmer whose tractor breaks down dial a Lyft? Lyft is clearly testing the cababilites of its platform with this broad launch into a wide range of city-densities and demographics. Keep an eye out for those mustaches.



  • A good leader knows who will help boost their business. Here's how to keep them around.

    Business is like baseball in so many ways, none more so than when you set out to build a great team. You want the best players, like that insanely great sales leader, but that's not how the game is played.

    Every company, like a ball club, is out to win as many games as possible. But every company is filled from the bottom up with two distinct types of players: You've got your organizational types and your all-star types. A good leader knows the difference.

    This is not to disparage those people who get the job done day-in and day-out. This is to help you know that once-in-a-lifetime talent can take your business to the next level. As much as you want a workplace where everyone feels equal, as George Orwell wrote: "All animals are equal, but some animals are more equal."

    So, what are the characteristics of all-stars? For one thing, they're innately talented and possess leadership ability. They're also ambitious and strive to achieve. Beyond that, they're engaged, and constantly developing themselves personally and professionally.

    To help them fully harness their natural talents--because nothing is worse than talent going to waste--here are three simple, yet effective ways to keep them engaged at your company:

    Challenge them. Give them the tough assignments, urging them to aim for greatness.

    Spend time with them. Pass along your wisdom, helping them to develop big goals. Then find out not only who they long to be but when they hope to get to that point.

    Show them the money. Obviously, you need to compensate your all-stars fairly. But beyond that, you need to invest in them. Spend your training dollars on them, sending them to the best seminars and the best sessions, which will not only help them develop but also put them among their peers, which will drive them to push even harder.

    Businesses that last forever strive to keep the all-stars, and keep them happy. Their development coincides with your success, and those all-stars drive team players to push harder as well, elevating your business.

    Build a team with engaged organizational talent and a few driven all-stars and you can count one thing: a lot more wins.



  • Growth is great, but not if it gets away from you. Here's how to prep yourself for the long haul.

    Pacing is tough for any startup. Usually the problem is getting things moving quickly enough. But you can run into a different pacing problem when things move too quickly. Maybe you're hiring at a scary rate or expanding faster than you can keep track of where you have offices. Moving fast can turn deadly if you burn out resources and opportunities too soon.

    Here are six tips on how to pace things for the long run.

    Be thoughtful about the money you take.

    A hot idea can build the pressure to take more investment than you need, like an institutional investor or VC that has a minimum commitment of $5 million even though you only need $1 million. That can turn into management trouble.

    "You think of it as a nice problem to have, but it's as stressful as not having sales," said Peggy Wallace, managing partner of Golden Seeds, an early-stage investment firm that focuses on women-led companies. She recommends talking thoroughly with investors about your plans and their expectations at the start. Wallace also called early debt a "fatal area" if the company isn't mature enough to manage interest payments with a dependable cash.

    Know when to take an opportunity and when to pass.

    John Torrens, and assistant professor of entrepreneurial practice at Syracuse University, is also an entrepreneur, running an early childhood special education business. A couple of years ago a few smaller competitors were going out of business. He was tempted to get their contracts and hire their people to boost growth. But he already had a business plan with executive team buy-in and limited resources. The opportunity caused "the business equivalent of attention deficit disorder," according to Torrens.

    "It's important to decide what you'e not going to do," he said. "Sometimes the best thing to do is let the opportunities go to someone else and let them struggle." He passed. When another opportunity appeared last November, the business was in a different position and could take advantage.

    Be sure the business model will ultimately deliver.

    Rowan Gormley, CEO and founder of NakedWines.com, remembers when he worked with Virgin Group in the 1990s. He had "spectacular successes" with the Virgin Money and Virgin One Account new divisions and then had a new idea: an online wine-selling venture called Orgasmic Wine.

    "The business took off," Gormley said. Virgin took part and the name changed to Virgin Wine. They raised $30 million. The company paid for a sophisticated IT system and increased headcount. "We had ad campaigns, pool tables in the office, all the standard dot com startup stuff. And the sales didn't budge." Unlike Virgin Money and Virgin One Account, this business didn't have a new market model that could sustain the expected growth. Now Gormley's working a new approach in which subscriptions pay for vintages before they're bottled.

    Make growth smart and controlled.

    For a decade before Eugene Borukhovich helped start Color Eight and its trust-based social search application, Q!, he was an intrapraneur within a large healthcare organization. He started a European division but tried to grow too quickly. They tried to be everywhere in Western Europe "without realizing that the culture, the healthcare systems were different," Borukhovich said. The result was a lot of chaos and not much success. "It takes a strong leader to say we need to pause and bring in the right people to balance the technology organization with the channel, sales, and business development."

    Forecast and don't ramp up too late.

    One way to avoid hitting the wrong pace is to forecast smartly. But that can be harder than it sounds, as Raj Sheth, CEO and co-founder of Recruiterbox, an online service to track job applicants.

    Without venture money, he had to work on a three to six month forecasting window and estimate revenue. He might be able to either hire someone or run a marketing campaign. Sometimes revenue would be higher than originally expected. "I realize that I have made more revenue than I anticipated, but I also realized that I'm not going to be able to deliver on my product features to my customers because I have two people less than I thought I have," he said.

    Not only must you anticipate the type of people you'll need, but also how long it might take to bring them up to speed. Spending extra on someone more senior might cut some critical unproductive time help support company growth.

    Understand a qualified pipeline.

    Dr. Vincent Berk has been the founder and CEO of network security startup FlowTraq since 2008. He has to balance financial caution with the need to grow quickly enough to keep competition at bay. But forecasting can be difficult because of salespeople.

    Many entrepreneurs are technical, analytical, and put too much faith in sales forecasts, according to Berk. "Salespeople are mostly really good at selling themselves," he said. The entrepreneur might not discount the forecast appropriately to get a realistic view of the pipeline. He ultimately had to hire an experienced vice-president of business development and sales to learn how to bring forecasts down to reality.

    Moving quickly is fine. Just be sure that you don't move so fast that you find the feet of your business up in the air.



  • Chobani has been one of very few large food companies to be wholly-owned by its founder. The terms of a private-equity deal could change that.

    Hamdi Ulukaya has long belonged to the rarest breed of entrepreneurs: Those who've built multi-billion dollar companies without any outside investment. In the food industry, where Ulukaya's Greek yogurt-maker Chobani has become a giant, it's even more uncommon.

    Now, that chapter in New Berlin, New York-based Chobani's history could be coming to an end. Chobani announced on Wednesday that it has accepted a $750 million loan, with warrants attached, from private equity firm TPG. The loan comes due in six years. The warrants could give TPG up to 35 percent of the company if Chobani reaches certain milestones--including an initial public offering of its stock, which is expected as early as next year.

    Meanwhile, TPG will receive two seats on Chobani's board. The deal also stipulates that TPG has the option to start a search for a new CEO. Even if a new CEO did take the reins, Ulukaya would remain the company’s biggest shareholder and will remain chairman of the board.

    Chobani had reportedly run into a cash crunch after the opening of its $450 million plant in Twin Falls, Idaho, took longer to get up and running than anticipated.

    The Greek-yogurt market in the U.S. has become more competitive in recent years, as companies such as Danone and Yoplait have tried to capitalize on the increased popularity of the market that Chobani seeded. Chobani still has a 38 percent share of the market, with about $1.5 billion in sales expected in 2014, according to the Wall Street Journal.

    Chobani will use the $750 million for a raft of ambitious expansion projects. One of them is an organic version of its Greek yogurt, which some consumers have long called for. Chobani also wants to expand to offer other cooking ingredients. It already hosts a selection of recipes on its web site, some of which, like chicken and white bean chili, would initially seem to have nothing do with yogurt. The company also wants to sell yogurt with steel-cut oats and a line of desserts.

    Ulukaya’s ex-wife unsuccessfully sued to stop the TPG deal, saying she is owed a share of the company and that Ulukaya stole his yogurt recipe from a rival.

    Correction: An earlier version of this story mischaracterized Hamdi Ulukaya's future role with Chobani. Ulukaya is remaining CEO of Chobani, and TPG has the option to conduct a search for another CEO.



  • Chances are, your next business opportunity is already waiting for you. You're just not looking in the right place.

    I received an email this past weekend from a reader of my column that included the following:

    "I am aware that I will probably not get a response due to your busy schedule and workload, but I thought it might not hurt to try."

    It is a shame that this person's first thought is that I wouldn't think he was worth the time to warrant my response. As our connections with each other grow more "virtual," it's easy to overlook (or ignore) an email from a stranger or an introduction made by someone you know to someone new.

    But isn't that the point to sharing so much information with each other? To find new customers and make new connections?

    In fact, I submit that your next customer may have already emailed you.

    I have always looked at it this way: If someone takes the time to sit down and write me an email to ask me a question or make an introduction, I will always respond. Always.

    I am not suggesting that you respond to every sales solicitation you receive, but if you know that another person took the time to reach out to you for advice or to make a connection, my advice and experience has been that you should always follow up. In fact, some of my best business and awareness opportunities have resulted from random connections made this way.

    The biggest hurdle I hear from fellow entrepreneurs is simply remembering to follow up. Here are some tips I use to be successful:

    Use a Tickler

    It is very easy to mark an email for follow up. Almost every email system allows you to "flag" a specific message. You can then sort your inbox by that flag.

    I love the arrow that Apple Mail automatically adds to my emails once I respond. I can quickly review the past 24 hours of mail I have received and determine if there is anyone that I have missed by keying in on the reply flag.

    Establish Accountability

    I have a virtual assistant who does three things for me. She helps me manage my calendar, books my travel, and she is copied on every e-mail I receive into my public inboxes.

    By providing her with this e-mail access, she helps me keep of a list of individuals I am supposed to reach out to or might have missed. I simply BCC her on any response and she then knows that she can take them off her watch list. Once or twice a week I receive a list of individuals from her that I might have missed.

    Manage Your Contact Channels

    You should close or redirect others from any channels you are not actively using. If you don't use a channel, simply put the best way to contact you in your profile information.

    I am amazed at the number of people who don't check their LinkedIn inboxes regularly or have their LinkedIn inbox forwarded to their regular email. The primary purpose of LinkedIn is to make and foster connections with others.

    Many of the contacts I receive are through my about.me page. If that page didn't provide an easy way to get in touch with me, I would have missed out on countless opportunities to weigh in on a breaking story for a journalist with a deadline.

    The most important reason to perfect the follow-up? The opportunity to secure your next customer, best partner, or critical business contact may very well be sitting in the emails and social media messages you have been ignoring.



  • You should bake transparency into your company culture. Here's why.



  • On the brink of bankruptcy, the sporting goods company engineered a turnaround by scrapping most of its product lines in favor of a focus on the running shoe market.

    According to Running USA, over 9 million people run more than 110 days per year. The nonprofit trade group reports a record number of marathon finishes throughout 2013, with 541,000 people crossing the finish line at one of the country's 1,100 marathons.

    Combined with the millions of runners who don't go the full 26.2 miles, that's a lot of feet. Feet that Seattle-based running specialty company Brooks Sports wants to put in its shoes.

    Backed by Warren Buffet's private equity firm Berkshire Hathaway, Brooks--which is celebrating its 100th anniversary this year--is now the leader in the multibillion-dollar specialty running shoe market, with a 29 percent share.

    It is hard to believe that Brooks, known for is brand ethos 'Run Happy,' was on the brink of bankruptcy in 2001. A white-hot brand in the '70s and '80s, Brooks made shoes and apparel for a variety of sports including basketball, tennis, and football, until 2001 when Jim Weber came on as CEO. With the company losing money on many of its product lines, Weber decided to undertake a massive strategy change.

    He narrowed Brooks's focus to running, cutting products that produced $30 million in annual revenue. The move paid off. According to Weber, in the last 13 years the Seattle-based company has grown 18 percent compound, and is expected to crack $500 million in revenue this year. Here is how Weber and Brooks took the company from near-failure to market leader.

    All about the product

    When Weber came on as CEO, Brooks was selling two high-performance, stability running shoes, the Beast and the Addiction, and several cheaper models in the athletically-styled family footwear category. These "barbecue and lawnmowing shoes,"--the term Weber uses because that's all you would do in them--made up half of Brooks's business and were losing the company money. Brooks jettisoned more than half of its shoes and other products and focused solely on running.

    "We were everything to everybody and were sixth, seventh, or eighth at everything," Weber says. "Brooks was like every other athletic footwear company, only a lot smaller. We didn't have the marketing spend. Our brand was tired and running on fumes."

    Weber knew specializing was the only way to survive when up against generalist-giants like Nike. The company built an in-house lab, brought in experts, dove into materials research, and extended its running product offerings while perfecting the fit and ride of its shoes.

    "We stopped making shoes under $80 and shifted all to run. We burned the boats and the product got better and better and better," Weber says. "The product experience is where you build a performance brand. You can't get there with advertising. Advertising is a turbocharger, but the product is where you really create authenticity and credibility."

    Building an identity

    After Brooks scrapped much of its product line, the company went dark on advertising for a year and started to build a community around the reimagined brand. During this period, the company focused on putting Brooks shoes on runners' feet, getting key influencers such as coaches and sports medicine professionals behind the Brooks brand, and building relationships with specialty running stores.

    "The relationship is really good and I would categorize it as really special from the standpoint that [Brooks's] focus in the running category allows them to do some things that certainly are more challenging for some larger brands that are multi-category," says Jeff Phillips, the CEO of specialty run franchise Fleet Feet.

    Brooks also focused its marketing efforts specifically where runners were located. Today, the company has more than 40 sales reps that work with specialty run stores, and a group of a hundred of field marketing employees known as 'gurus' who promote the Brooks brand and peddle products at retail locations, run expos, fun runs and community promotional events.

    Paying off in partnerships

    The run-only identity has opened up other doors as well. In 2009 Brooks was able to land a partnership with the Competitive Group, the company behind the Rock n' Roll marathon series, which holds 23 events in North America and six in Europe each year. And earlier this year professional middle-distance runner Nick Symmonds left the Nike-sponsored Oregon Track Club and signed a shoe and apparel contract with Brooks--a huge steal for the smaller brand.

    "I had been running with Nike for seven years and as much as I enjoyed working with them, it was always a little bit frustrating to be a small division of such a large company," says Symmonds, a former Olympian. "I could tell that Nike's focus was more on some of the other sports. I am not a professional golfer, I am not a professional basketball player--I am a professional runner. I really wanted to work with a company that got that."

    Still hurdles ahead

    As much as its focus on running has paid off, Brooks is still building and adapting to a changing industry. The surging popularity of online shopping has made it much harder for Brooks's partner stores. "We are facing a number of challenges. One is a digital-empowered consumer. I have been in the business for 30 years and have seen the balance of power shift from the manufacturer in the early days, to the retailer, and now ultimately to the consumer," Fleet Feet's Phillips laments. "They have access to a tremendous amount of information and unlimited access to product and multiple channels of distribution."

    Weber says that most runners are still buying their first pair of shoes in a store and then shifting to online retailers once they know what they want. "You can't stop a runner from getting their second or third pair on the Web, but what we can manage is that they are full price and presented as a premium product," he says, adding that Brooks no longer sells inventory on Amazon and has ended its relationships with another 50 Internet-only resellers in the last four years.

    Weber says that he doesn't believe that local run shops are on the way out, but Brooks isn't relying solely on brick-and-mortar stores. He is working to focus the company on digital and further spread the brand name. "We have a lot of opportunity to build awareness and connection with people that don't really know us," he says. "We still aren't reaching all the runners that we want to reach yet, but we will get there. We are only at mile 10."



  • Few are born confident, research shows. The self-assured learn to be that way, and you can too.

    Are you as confident as you'd like to be? Few people would answer "yes" to that question. But, according to Becky Blalock, author and former Fortune 500 executive, anyone can learn to be more confident. And it's a skill we can teach ourselves.

    Begin by forgetting the notion that confidence, leadership, and public speaking are abilities people are born with. In fact, research shows that being shy and cautious is the natural human state. "That's how people in early times lived to pass on their genes, so it's in our gene pool," she says. "You had to be cautious to survive. But the things they needed to worry about then are not the things we need to worry about today."

    How do you teach yourself to be more confident? Here's Blalock's advice:

    1. Put your thoughts in their place.

    The average human has 65,000 thoughts every day, Blalock says, and 85 to 90 percent of them are negative--things to worry about or fear. "They're warnings to yourself," Blalock says, and left over from our cave-dwelling past. It makes sense--if we stick our hand in a flame our brain wants to make sure we don't ever do that again. But this survival mechanism works against us because it causes us to focus on fears rather than hopes or dreams.

    The point is to be aware that your brain works this way, and keep that negativity in proportion. "What you have to realize is your thoughts are just thoughts," Blalock says. They don't necessarily represent objective reality.

    2. Begin at the end.

    "There are so many people that I've asked, 'What do you want to do? What do you want to be?' and they would say, 'I don't know,'" Blalock says. "Knowing what you want is the key. Everything else you do should be leading you where you want to go."

    3. Start with gratitude.

    Begin the day by thinking about some of the things you have to be grateful for, Blalock advises. "Most of the 7 billion people in the world won't have the opportunities you do," she says. "If you start out with that perspective, you'll be in the right frame of mind for the rest of the day."

    4. Take a daily step outside your comfort zone.

    There's a funny thing about comfort zones. If we step outside them on a regular basis, they expand. If we stay within them, they shrink. Avoid getting trapped inside a shrinking comfort zone by pushing yourself to do things that are outside it.

    We've all had experiences where we've done something that terrified us, and then discovered it wasn't so bad. In Blalock's case, she was visiting a military base and had gotten to the top of the parachute-training tower for a practice jump. "They had me all hooked up, and I said, 'I'm sorry, I can't do this, I have a small child at home,'" she recalls. "The guy took his foot and pushed me off the tower. When I got out there I realized it wasn't that bad."

    We won't always have someone standing by to kick us out of our comfort zones, so we have to do it for ourselves. "Just act!" Blalock says.

    5. Remember: Dogs don't chase parked cars.

    If you're running into opposition, questions, and doubts, there's probably a good reason--you're going somewhere. That doesn't mean you should ignore warning signs, but it does mean you should put those negatives in perspective. If you don't make changes, and challenge the status quo, no one will ever object to anything you do.

    6. Get ready to bounce back.

    "It's not failure that destroys our confidence, it's not getting back up," Blalock says. "Once we get back up, we've learned what doesn't work and we can give it another try." Blalock points out that the baseball players with the biggest home run records also have the biggest strikeout records. Taking more swings gets you where you want to go.

    7. Find a mentor.

    Whatever you've set out to do, there are likely others who've done it first and can offer you useful advice or at least serve as role models. Find those people and learn as much from them as you can.

    8. Choose your companions wisely.

    "Your outlook--negative or positive--will be the average of the five people you spend the most time with," Blalock says. "So be careful who you hang out with. Make sure you're hanging out with people who encourage you and lift you up."

    When she quit her C-suite job to write books, she adds, some people were aghast and predicted that no one would read them while others were quite encouraging. It didn't take her long to figure out that the encouraging friends were the ones she should gravitate toward.

    9. Do your homework.

    In almost any situation, preparation can help boost your confidence. Have to give a speech? Practice it several times, record yourself, and listen. Meeting people for the first time? Check them and their organizations out on the Web, and check their social media profiles as well. "If you're prepared you will be more confident," Blalock says. "The Internet makes it so easy."

    10. Get plenty of rest and exercise.

    There's ample evidence by now that getting enough sleep, exercise, and good nutrition profoundly affects both your mood and your effectiveness. "Just moderate exercise three times a week for 20 minutes does so much for the hippocampus and is more effective than anything else for warding off Alzheimer's and depression," Blalock says. "Yet it always falls of the list when we're prioritizing. While there are many things we can delegate, exercise isn't one of them. If there were a way to do that, I would have figured it out by now."

    11. Breathe!

    "This one is so simple," Blalock says. "If you breathe heavily, it saturates your brain with oxygen and makes you more awake and aware. It's very important in a tense situation because it will make you realize that you control your body, and not your unconscious mind. If you're not practicing breathing, you should be."

    12. Be willing to fake it.

    No, you shouldn't pretend to have qualifications or experience that you don't. But if you have most of the skills you need and can likely figure out the rest, don't hang back. One company did a study to discover why fewer of its female employees were getting promotions than men. It turned out not to be so much a matter of bias as of confidence: If a man had about half the qualifications for a posted job he'd be likely to apply for it, while a woman would be likelier to wait till she had most or all of them. Don't hold yourself back by assuming you need to have vast experience for a job or a piece of business before you go after it.

    13. Don't forget to ask for help.

    "Don't assume people know what you want," Blalock says. "You have to figure out what that is, and then educate them."

    Once people know what you want, and that you want their help, you may be surprised at how forthcoming they are. "People are really flattered when you ask for advice and support," she says. "If someone says no you can always ask someone else. But in my experience, they rarely say no."

    Like this post? Sign up here for Minda's weekly email and you'll never miss her columns. Next time: Why--and how--to unplug every day.



  • Some of the most important things you need to know about your business you can only learn by getting out of the office.

    I kicked off 2014 with a slightly unconventional objective: spend more face time with our customers.

    As OnDeck's first employee, I was the first salesperson, product developer, and marketer, and for years I had been around customers constantly. However, as our company grew from two to 50 to now 270 employees, I found myself increasingly distant from our customers in my day-to-day activities. Heading up a rapidly growing technology company, it's easy to focus on improving your company's products, systems, and operations. While incredibly important, to be successful you have to remember why and who you are improving these things for. And answers to those questions can only come from your customers.

    I needed unfiltered and candid feedback straight from our customers, which are small businesses across the country.

    My mission? Four cities. Four days. Visit as many customers as possible. I gained invaluable insights after setting out on a nationwide tour earlier this year--some expected, others that caught me by surprise. Here's what I learned:

    Your customers are always busy.

    The men and women who buy your services and products are busy. This is especially true of small business owners, who are the CEO, COO, CFO, CMO all wrapped in one for their business. One customer I met ran two hair salons in Tampa, while simultaneously managing an apprenticeship program and developing a plan for a third location, all while maintaining his own salon clientele. Time is literally money for a business owner like this, so respecting your customer's time is essential to an enduring relationship.

    What does this mean for you in concrete terms? It means think about every way in which you interact with customers--your online systems, customer service operations, etc. How can you make these processes easier for your customers? In our case, we expanded to later service hours and weekend service to help people like our hair salon customer, who clearly isn't working a Monday through Friday, 9 to 5 kind of job. The changes have been enormously well received by our customers and resulted in increased revenue.

    Practicality--not the bells and whistles--matter.

    Technology is a wonderful thing, but not at the expense of the simplicity of your product. Many of OnDeck's customers use fax machines and have email accounts they check once a week--and that's more than fine by us. Making your products accessible and easy to understand is what makes a customer want to work with you again and again. For example, the continuous scroll trend on websites is beautiful and in style right now, but do customers really want to get carpal tunnel syndrome looking for a customer service number? If you have to choose between being technologically flashy and being helpful, always choose being helpful. It's what resonates most.

    Your customers will be very generous with their time--all you have to do is ask.

    I was overwhelmed by the level of dialogue customers were willing to engage in when I visited them in their place of business. Several of the visits lasted for hours, allowing me to ask follow-up questions and gain insights that would have been impossible to get in a phone call or quick meeting. After settling in and getting comfortable with me, customers offered valuable and candid feedback on what OnDeck needs to do to improve. Take the hair salon owner, for example: He was really surprised that when he was considering taking a loan from us it was hard for him to find information about OnDeck from his local bank or accountant. Clearly, building brand awareness with local service providers is an area of opportunity for us to pursue, and he gave me some great ideas to take back to the team.

    What have you learned from your customers recently? Anything that made you change how you run your business? Please weigh in below in the comments section--I'll be tweeting the responses at @noahbreslow

    Here's more about my recent customer roadshow.



  • It's one of the fastest and easiest ways to build a better relationship with a contact or customer.

    Everyone knows that conferences, trade shows, and seminars are great places to make new business contacts, meet existing customers in person, and find new potential customers. Indeed, those are the reasons that such events exist.

    Let's suppose you're at an event and you have a great conversation with a customer. You want keep in touch and follow up to have a conversation that's more substantial, so you trade business cards, right?

    That's fine, but a business card is just, well, a piece of cardboard. Here's a better approach: Capture the essence of the connection and the moment with a selfie--one that includes you and other person. Here's how it's done:

  • Ask with enthusiasm. "This is been really fun talking to you. Hey, can I take a photo of us together?" Hold up your phone up as you ask. If the answer is "no," no problem. Most of the time, though, the answer will be "yes."
  • Get close together. Because you're both going to be in the same picture, you'll need to get closer, maybe with arms over each other's shoulder. That's a good thing, because that's what people who like each other do sometimes.
  • Get them to smile. You want to capture the positive aspects of the conversation, not an accidental scowl. You can use the old standby "Say cheese!" I use "Say Camembert!" because it makes people laugh.
  • Get their phone number. Ask "would you like me to text you a copy?" The answer will almost always be "sure," so now you've gotten the contact's personal cell number (which isn't always on the business card).
  • Enhance, crop, and send. After the meeting, when you've got some time to yourself, use the built-in functions of your phone to make the photo look as good as possible, crop it so it's just you and the contact, and text it. Chances are you'll get a "thanks" text in return. Or even a call.
  • Consider what you've accomplished. You have:

    • Gotten a "yes"
    • Made physical contact beyond handshaking
    • Created a visual reminder of the conversation
    • Gotten another "yes"
    • Obtained the contact's personal phone number
    • Made certain your contact information is stored on the contact's phone
    • Reminded the contact of the conversation
    • Opened a dialog

    That's a LOT of relationship building (and selling) crammed into 30 seconds. As a bonus, you've also captured an image of the contact's face, so YOU can more easily remember whom you talked to.

    Cool, eh?

    BTW, I learned this technique from my good friend David Rotman, a sales executive at Rotmans, which is New England's largest furniture and carpet store. He recently won a "best new idea" award from a furniture industry association for his use of selfies in retail sales.

    Want to make business simple? Sign up for the free Sales Source newsletter.



  • Entrepreneurs offer their best advice for staying afloat, even thriving, during a crisis.

    If there's one universal truth in business, it's that, someday, disaster will strike. You lose your biggest customer; a storm wipes out your data center. So how do entrepreneurs handle a crisis, while ensuring that their companies don't suffer? We asked members of the Entrepreneurs' Organization (EO) to provide their tips for weathering the storm.

    Never rely on just one client.

    "As a small business performing contract work, you [should] have a constant ebb and flow of customers, projects, and in turn, revenue. At one point, I was caught in a position where I lost two clients within two weeks of each other that collectively made up 50 percent of my business! I learned that I couldn't let one or two clients make up that much of my business. We always strive for the 'big catch' client, but in a small business, that can be your biggest weakness. I now strive to maintain a steady cycle of contracts and a mix of clientele."

    --Rishi Khanna, CEO, ISHIR; EO Dallas

    Plan for the end, even at the beginning.

    "I had to buy my partner out even though he didn't want to be bought out. This included hard assets, as well as the IP that we both created. From the beginning, we had a proper buy-sell agreement with stock certificates and necessary non-disparagement clauses with confidentiality included. I had the foresight to see possible problems and put in place a plan that would allow for the mutual termination of our relationship."

    --Jeremy Dicker, CEO, Dicker Fitzpatrick; EO Los Angeles

    Hire a mediator.

    "I hired my husband, a software engineer, to help develop some of the functionality of our website. Being a demanding boss during the day and loving wife at night put me in a 'Dr. Jekyll and Mr. Hyde' situation that tested the boundaries of our relationship and the success of the business at the same time. To alleviate some of the back and forth, I brought in a digital-experience specialist who would communicate my vision to my husband. This turned out to be a real blessing, and helped us get through some difficult times."

    --Tonya Lanthier, Founder and CEO, DentalPost; EO Atlanta

    Have everyone's personal contact information, even clients.

    "Hurricane Sandy is easily the worst crisis we have faced. The biggest obstacle was the failure of emergency power at our vendor's data center. Having alternate contact information for key people at each client proved essential. Mobile numbers and personal emails allowed our engineers to keep clients in the loop about the problems at the data center and discuss plans to get them back up and running."

    --Scott Wilson, Founder and CEO, Marathon Consulting; EO New York

    Cut overhead, even if it means changing your business.

    "Before the 'Great Recession,' our trucking company shipped construction freight and had a transportation brokerage for national loads. Then the construction loads went away as our shippers' businesses dried up. We had fixed costs whether or not we had any loads. We had to be open to looking at what was and wasn't working, so we decided to reengineer ourselves. We concluded brokerage was better because we only incurred costs when we had loads. We reinvented our company, sold assets, laid off employees and refocused."

    --Cheryl Biron, President and CEO, One Horn Transportation; EO New Jersey

    Focus on your niche.

    "When housing prices started falling, our real estate investor clients were cutting every expense they could to stay in business. As a result, we lost 60 percent of our clients within a single year. To survive, we asked ourselves, 'What is it that only we do, and what other markets could we serve with our expertise?' The answer came in shifting our focus to the home owner. They still needed to sell fast, and if investors aren't serving that need any longer, then their next best option would be to work with a real estate agent."

    --Jeremy Brandt, CEO, We Buy Houses; EO Fort Worth



  • You can still get even... but you can also get mad.

    Think about remarkably successful entrepreneurs. They're logical. They're rational. In the face of crisis or danger or even gross incompetence, they remain steely-eyed, focused, and on point.

    They don't get angry--or at the very least they don't show their anger.

    Unless, of course, they happen to be Steve Jobs. Or Jeff Bezos. Or Bill Gates. Or Larry Ellison. Or...

    Most of us were taught that the only way to lead effectively is to eliminate or at the very least swallow and hide emotions like anger and frustration. Go professional or go home, right?

    Wrong.

    According to research conducted by Henry Evans and Colm Foster, emotional intelligence experts and authors of Step Up: Lead in Six Moments That Matter, the highest performing people and highest performing teams tap into and express their entire spectrum of emotions.

    Which, when you think about it, makes sense: we all get angry (even this guy must get angry once in a while) so why not take advantage of that emotion?

    Evans and Foster say anger is actually useful when harnessed and controlled because anger fosters two useful behavioral capabilities.

    • Anger creates focus. Get mad and you tend to focus on one thing--the source of your anger. You don't get distracted. You're not tempted to multi-task. All you can see is what is in front of you. That degree of focus can be extremely powerful.
    • Anger generates confidence. Get mad and the automatic rush of adrenaline heightens your senses and reduces your inhibitions. Anger--in small doses--can be the spark that gets you started.

    But there's still one major problem with getting mad. When you're angry it's easy to do and say things you later regret. That's why the key to harnessing anger is to find a way to stay smart and in control while you're angry.

    Sound impossible? It's not. Here are two examples:

    1. Get mad about an action, not a person. Say an employee makes a mistake. Venting by saying, "How could you be so stupid?" may make you feel better--for about ten seconds--but certainly won't help.

    Saying, "You do a great job, but I'm really struggling to understand why you did that. Can we talk about it?" Directing your frustration at the action and not the employee helps reduce his or her feelings of defensiveness while still allowing you to express your frustration--which will help you both focus on solving the problem.

    2. Use anger to overcome anxiety or fear. When we're nervous or scared we often later regret what we didn't say.

    Say you're mad because a supplier didn't come through, but you're scared to say anything because you might damage a long-term business relationship. Don't hide from your fear or your anger. Accept that you're mad. Show, at least to a limited degree, that you're mad.

    When you do, the rush of adrenaline will help move you out of the fear zone and into the sweet spot where you're excited and passionate and motivated--but not unreasonable or irrational.

    Just Make Sure You Start Small

    Most people hold on to feelings of anger too long. Their feelings build and build until they can no longer control themselves and then they explode. Totally losing your cool is counterproductive at best and incredibly damaging at worst. The key is to slowly and steadily allow yourself to express lower levels of anger, working up from irritation, then to frustration, then finally to anger.

    Step one: when you feel irritated, don't swallow those feelings. Think about how you feel. Think about why you feel the way you feel. Then work with how you feel. Say what you need to say, letting a little of your irritation show through. You won't have to worry about losing your cool because, after all, you aren't angry--you're just irritated.

    Then you can move up to the next level, expressing frustration. As you do, stay focused on how you feel. Ask yourself whether you're using your frustration as a weapon or as a tool.

    Then move up to the final level, expressing anger. Again, step outside yourself as you do. Are you in charge of your anger and actions or is anger in charge of you?

    In time, as you learn to control and harness your feelings, you will be able to get well and truly pissed off and still handle yourself in an appropriate and productive way.

    Anger is Authentic--and So Are Great Leaders

    Great leaders are genuine and authentic. That's why we follow them.

    Want to be a great leader? Stop trying to hide negative emotions. (Besides, the chances you can successfully hide how you're feeling are slim. You may be angry and think you're hiding it, but you're not. Your employees know.)

    So don't pretend. Express the way you feel, but in a controlled and harnessed way.

    As we say to our clients," say Foster and Evans, "don't pretend. Be upset but be intelligent while you're upset." That way you sustain your professional relationships as you work through challenges. That way you can be your authentic self--in a higher state of being.

    Say you lose a major contract to a competitor you and your team didn't take seriously. Don't be afraid, in the months that follow, to bring your team back to that moment. If you're frustrated with your team's performance, don't be afraid to say, "Let's go back to (that day.) Remember what happened when those (jerks) took that contract. Remember how we all felt. Remember the letter they wrote us canceling our contract. Every time I read it I get mad."

    Expressing those feelings will not only help you stay focused, it helps your team stay focused. It's a powerful reminder that sometimes business cannot not be business as usual.

    Used correctly, anger can take you and your team to places you haven't been before.



  • Want to be a better salesperson? Try the bartering challenge.

    When I began teaching sales, I never expected to one day give a student an "A" for bartering her way from a 25-cent pen to a 30-pound head of the Buddha. Or to a copy of a Nobel Prize-winning article autographed by its author that sold a few days later for $500 on eBay.

    The barter assignment is the first one I make in my "Entrepreneurial Selling" course at the University of Chicago's Booth School of Business. Students are required to barter a pen for something they believe is of greater value, and then to make one new trade a week for 10 weeks. They cannot barter with someone they know. They can barter for whatever they like, but it must be something they can then trade forward. After the trade is done, they consult eBay and Craigslist to determine the value of each item.

    The purpose of the assignment is simple: it forces students to stare rejection in the face and come away stronger. Is there a better metaphor for sales? For entrepreneurship? A typical series of trades might go like this:

    Trade 1: $0.25 Chicago Booth pen for a $3 coffee mug (new)

    Trade 2: $3 coffee mug for a $5 surge protector (used)

    Trade 3: $5 surge protector for an $8 black hat (adjustable, new)

    Trade 4: $8 black hat for a $20 water filter (new, unopened)

    Trade 5: $20 water filter for a $20 Swiffer (used, but with extra wipes)

    Trade 6: $20 Swiffer for a $12 set of two Xbox games (promised $24 value, turned out to be $12)

    Trade 7: $12 set of two Xbox games for a $20 PS3 game (used)

    Trade 8: $20 PS3 game for a $30 set of books (The Art of War, The Lean Start-up, and The Sentimentalist)

    Trade 9: $30 set of books for a $50 portable DVD player (with case and two power cords)

    Trade 10: $50 portable DVD player for a $180 iPhone 4 (used)

    If you're counting, that's nearly a 72,000 percent increase in value.

    I love this assignment. My students? Not so much. But the lessons come rapid fire, whether they want them to or not. Here are three of them:

    Lesson 1: An 'ask' is a powerful thing. It is human nature to avoid uncomfortable situations. Unfortunately, the selling process is chock full of them: making an approach, starting a conversation, qualifying, proposing, asking for things. Throughout my course, students realize that they--like most people--constantly, unconsciously, avoid asking directly for what they want. They dance. They are friendly. They are easy to deal with. They talk about the wonderful features of the pen. Those are all good instincts. But they don't put food on the table. In any situation, you must be prepared to make an ask. "Jim, would you be willing to trade me that coffee mug for this pen?" Pause. "Susan, how about we trade this vacuum cleaner for that iPhone?" Pause. The thing that stops you from making a direct ask of someone is fear. And fear is normal. But the worst outcome is that the person says "No." When that happens, thank them and move on.

    Lesson 2: Tell a story. If you dive too early into your ask, you may put people off and be rejected. Engage them in a story first, and they will be much more likely to connect with you. Stories show people the context in which you do something--the why and how of what you do. That makes them more receptive to helping you make a deal. For this exercise, the students might tell stories about their journeys with the pen, their failures in trading so far, or even their funny rejections.

    Lesson 3: Create value. The barter assignment also teaches students to broaden their understanding of what constitutes value. They have to see value where others may not. The "value" they create with a pen (or a statue or a vacuum) depends on the context they create: the story they tell about its history; its utility; the cachet that comes from owning it; the services provided with it, and many other characteristics. Why call a pen a pen, when this supremely useful tool creates so many types of value? Just ask Shakespeare.

    As one student wrote to me: "The day before this assignment was due, I walked out of a building and saw a similar-looking pen to the one you gave us on the first day of class. I couldn't help but think, 'Who would be so foolish as to leave something so valuable on the ground?'"



  • Step behind the headlines and learn what true leadership means for you and your organization.

    This article is an adapted excerpt from the author's forthcoming book, Do Lead.

    Let's start with the real secret of leadership: it happens all the time, almost anywhere you look, and it's frankly not that difficult.

    Disappointed? Perhaps you were expecting something a little more...well, challenging?

    That's not surprising, because for the last, oh, three millennia--in fact, since an unknown Homo erectus first did a Banksy on a cavern wall--we've been pretty much preoccupied as a society with the idea of heroic leadership. You know, the Neanderthal who slays the sabre-toothed tiger, Odysseus, Napoleon, the little Dutch boy with his finger in the dyke, Captain Sully--all that good stuff.

    Which is fine. It makes for good reading and an endless source of uplifting quotes (great for use in motivational posters and filling all that white space left over on your team-building PowerPoint slide).

    The problem is that we've become so accustomed to leadership being defined as heroic by journalists (or historians) looking for a good story, we have lost the ability to see true leadership for what it really is: an almost always un-glorious, headline-free, mundane activity that takes place every minute of every day in uncountable different (albeit prosaic) ways.

    Compare and Contrast

    On the day I wrote this chapter, the first 'leadership' stories I encountered during my usual, fairly random, media consumption were as follows:

    -- A profile of a 46-year-old 'whizz-kid' CEO from a hip, funky, brand-name organization who has redefined the concept of leadership in his company based on, wait for it, his favorite sports coaching heroes.

    -- The CIO of a Fortune 500 company tells a leadership conference that he 'wakes up every morning filled with excitement about what [my] team of more than 1,200 employees aims to do for the day and with a drive to apply [my] knowledge to [my] best potential'.

    -- An academic who has taken a sabbatical to study the challenges of leadership in modern society reports that he has identified them to be 'Technology and Information', 'Resilience', 'Well-Being', 'Disruptive Innovation' and something he calls 'Environmental Scanning'.

    Notice how all of these stories follow the same narrative arc: the assumption that leadership must somehow be, however vaguely, connected to wisdom, or bravery, or celebrity, or scale, or great achievement--something, anything, that adds a heroic tinge. It's hard to feel that any of these well-reported stories have any real relevance to how most of us spend our time, day to day, in the real world.

    Now let me share with you the first few actual acts of leadership I encountered on the same day:

    -- Our team had to head out at 8.30am for a client meeting. My wife rose before dawn to get her gym visit in early, so our shared car would be available for my team to use on time.

    -- During a coaching call, a client made a commitment to me that for one week she would not interrupt others during her team's discussions and would allow her colleagues to fully finish their thoughts before expressing her own opinion.

    -- During a meeting at a local coffee shop, I watched as a barista stopped cleaning table tops and jumped in to assist a colleague when the line became lengthy.

    Notice a difference between the media-reported stories and the real-world acts of leadership?

    Storytelling requires a narrative arc, and reporting on leadership is no different--there needs to be a hero, or a villain, or a winner, or a loser (or a video of a cute cat, at the very least). Fair enough, magazines and newspapers need to sell copies, websites need visitors, and none of them will garner much interest with stories like 'Woman Returns Car to Husband at 8.15am'.

    Don't get me wrong. I have nothing against heroic leadership. In fact, because of my job coaching senior executives I get to see more of it than most people, and watching leaders do incredible things under stress or navigate themselves and others through difficult situations regularly reduces me to a blubbering mess.

    But that doesn't mean we should take the 'hero-as-leader' template as our only, or even our main, model of leadership.

    Real-world leadership is most typically understated--often to the point of going unseen by most people. Real-world leadership is most often prosaic, mundane, unspectacular. In fact, if you glanced casually through the examples of real-world leadership I gave earlier, you probably wrinkled your brow and wondered how they could be defined as acts of leadership at all.

    What on earth elevates the making of coffee for a waiting line of customers to the level of leadership--isn't that just someone doing their job? Bringing a car back on time for someone else to use it? Isn't that just a common act of courtesy? And the executive who decided to try buttoning her lip and let others speak for a change--she's surely just trying to be less of a jerk, no?

    What Leadership Is

    Well, it depends, of course, on how we define 'leadership'. If 'heroic' leadership is a valid concept, but gives us the wrong (i.e. too narrow) perspective on what 'everyday' leadership is, what then should our definition of leadership be?

    Here's my take--one which I've honed from 35 years of working with leaders (heroic and otherwise), and from engaging in occasional acts of leadership myself--which we'll use as a working definition for the rest of this book:

    Leadership is helping any group of two or more people achieve their common goals.

    Not very complicated, I admit, but it's a robust definition that has served me and the people and organizations I work with well over the years.

    Want to dive deeper into the nature of leadership and how you can develop it within your organization? Download a free chapter from the author's book, "Do Lead: Share your vision. Inspire others. Work towards a common goal." to learn the secrets behind true leadership and the mindset, tools and techniques necessary to cultivate it in yourself and others.



  • Are you a true entrepreneur at heart? This short definition will help you make the choice.

    There's a definition of entrepreneurship that changed how I think about the way people chose their paths in life. It helped me to grow a thriving business and find all kinds of great new experiences. Heck, it even helped me to meet my wife.

    I believe it can have the same kind of positive impact for you, if you're willing to try to put it into practice:

    Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.

    That's the 12-word definition of entrepreneurship that they teach at Harvard Business School. I first read it while researching my 2010 book, The Intelligent Entrepreneur. I remember staring at it on the page and feeling like a boy noticing girls for the first time: There's something really interesting here, but I know there's a lot more to it than I currently understand.

    I'd like to break the definition down for you, because it not only gives insight into why people like you are so drawn to the idea of starting and building something, but it will also improve the likelihood that you'll be successful. (As a quick aside, seeing that definition in another of my books is what originally led me to meet Inc.'s editor-in-chief, Eric Schurenberg. A column he wrote about it became the most-read article in the history of Inc.com at that time.)

    1. "Entrepreneurship..."

    Let's start with the word itself: Entrepreneurship. It's an unusual word--a noun with few true synonyms. (Believe me, as someone who writes about entrepreneurship all the time, that lack of real synonyms can be a real pain in the neck.) It's not simply a matter of being a boss or a leader or owning a business. In fact, as we'll see, there's nothing intrinsic at all in this definition about business, or risk, or even making money. It's something different--a way of looking at the world.

    2. "...is the pursuit of opportunity..."

    There are two key words here: pursuit and opportunity.

    "Pursuit" means there has to be action involved (hence, my reader-inspired decision this year to change the name of my column to Action Required). You have to have impact; you have try to change something. Simply thinking about an idea doesn't cut it, and neither does coasting along doing what you've always done.

    Similarly, a true entrepreneur is always pursuing "opportunity." That means something new, bigger, nicer, better, smarter, more useful. Moreover, it often also means pursuing the most amazing, appealing, enticing opportunities you can find.

    Here's where we really start to differentiate true entrepreneurs from everyone else. There are a lot of good people out there running very nice businesses. However, if they're not chasing new opportunities--if if they're coasting along, doing what they've always done--then maybe they've given up the mantle of true entrepreneurship.

    3. "...without regard to resources currently controlled."

    This might just be my most favorite phrase in the world. I suppose if Harvard Business School had wanted to make the definition more accessible, they could have said, "regardless of," instead of "without regard to," but no matter.

    "Without regard to resources currently controlled" means it doesn't matter how little you have at the start. It doesn't matter that you don't have money, or that you don't have all the required skills, or that you don't have a team to help you. At the very beginning especially, reach for the stars. Don't let the opportunities you pursue be limited by the assets you currently have. Instead, let the attractiveness of the opportunity serve as your guide.

    There are so many implications of this part of the definition. For one thing, while capital is a necessary ingredient, the truth is that all of those would-be entrepreneurs out there who blame a lack of money for their inability to get started are playing the wrong game. In fact, there's an advantage to not having money at the start, because that scarcity forces you to be more resourceful. It means you have to sell your ideas to others--a possibly painful exercise, but one that pays huge dividends in the long run.

    Here's the bottom line: For just about any decision you have to make in life, there are two ways to make choices.

    Most people choose the first method of decision-making. They look at the array of options that seem reasonably attainable, and then pick the best one. They choose a career because it's what their parents advised, or because there are jobs available. They live somewhere because it's what they're familiar with. They surround themselves with people because they're the kinds of people they've always known.

    The true entrepreneur, however, sees things differently. Instead of choosing the best available option, he or she thinks big, and tries to identify the best possible solution, regardless of whether it seems completely implausible and unattainable. Then, he or she gets to work, trying to make that impossible dream a reality.

    If you choose the first path, you might save yourself a lot of heartache, and a lot of ups and downs on the roller coaster of life. However, you also run a greater risk of achieving your goals only to find you didn't push yourself enough. Which path will you choose?

    Want to read more, make suggestions, or even be featured in a future column? Contact me and sign up for my weekly email.



  • One small business owner argues paying employees more will actually level the playing field.

    Like everyone else under the sun, entrepreneurs are inclined to look out for their own self interest, which is why you wouldn’t be surprised if many of them were skeptical of hiking the minimum wage. They’re going to have to reach into their less than bottom-less pockets to find the extra cash, after all.

    But not every small business owner who runs the sums on a minimum wage rise comes to the conclusion that bigger paychecks for low-wage workers make it harder to compete in an already cut-throat marketplace. In fact, on Slate recently, restaurateur Jay Porter makes the exact opposite argument: raising the minimum wage will actually make it easier for small businesses to compete with the big guys.

    Subsidizing the Big Guys

    His complete article is well worth a read in full, but the gist of his argument is that the rock bottom minimum wage across most of the country makes it easier for big companies with their economies of scale and ability to scour the globe for cost-cutting opportunities to lure customers with insanely low prices, resetting expectations in a way that’s bad for small business. How? Bigger competitors start by passing off costs to the government, i.e. the taxpayers, i.e. you and me.

    "Subtly, a nonlivable minimum wage-and in most areas minimum wage is well below a livable wage-is also a kind of passing off of costs by the big guys. Though their employees work a full-time job, they can’t afford health care, education, quality food, or a healthy routine. That leads to a situation where 52 percent of the families of fast-food workers are enrolled in a public assistance program and the average Walmart employee costs taxpayers $5,815 in subsidies," Porter writes.

    Can small business owners offer nonlivable wages too? Sure, but they can’t really decide to ship production to some remote corner of the globe, muscle suppliers into dropping prices, or employee small armies of accountants to come up with complicated schemes to avoid paying the tax bill that underwrites the public benefits payouts that result.

    What’s a Burger Really Worth?

    The combined power of these advantages allow the big guys to offer rock bottom prices, which in turn train customers to expect something for next to nothing, making it harder for those without a leg up to compete.

    "For example, the reason it’s hard to sell a really good, locally produced burger in many markets isn’t because the product isn’t worth it; even $10 or $12 for a handcrafted product that includes 6 ounces of grass-fed beef is a steal compared with what you can buy at Applebee’s or Olive Garden for that price,” writes Porter. "The reason it’s hard to market a high-quality burger is that so many companies sell burgers so cheaply-;regardless of how bad they are-;that we think a burger ‘should’ cost only $5 or $6."

    Raise the cost of labor, Porter feels, and you won’t make the playing field as level as a regulation pool table, but you will give small business owners a fairer shot at competing.

    Skeptics might note that, assuming small and big businesses often pay the same wages now and will pay the same wages after an increase with no changes to the other advantages of being big (and that labor accounts for a similar percentage of total costs), it’s hard to see how a higher minimum wage won’t just result in prices of restaurant meals and consumer goods going up across the board -- a fast food burger, for instance, might rise to $7 and a artisanal one to $15.

    Porter concedes that "everyone will have to raise prices" but feels that "the prices the big guys charge for their products will be closer to their true costs." That's already a reality for small businesses who have less ability to manipulate their costs, he belives. Put everyone in the same boat and Porter is hopeful.

    "Like many small business owners, I know that if the big guys have only some advantages over my team, we can make up the difference in quality, service, and heart," he concludes.

    What do you make of his argument?





  • Lots of entrepreneurs face the same dilemma: Should you spend more on the business or sell it? Here's how to work through what is never an easy decision.

    If you build it, will they come? Kevin Costner knew the answer to the question--he built the ball field in "Field of Dreams" and, sure enough, ghosts of baseball past soon arrived. But what if you, as a business owner, are faced with a decision to either commit to a large capital expenditure, or sell your business? Should you go ahead and build it? Will the buyers still come?

    In my 30-plus years of experience as an investment banker selling middle-market companies, I have been asked the question many times: "Should I spend the money or leave it for the buyer?" Here is a guide that can help you with your decision to sell or stay. Your answer will be different based on your priorities.

    The Invest or Sell Decision-Tree

    Most capital investment decisions are based on a rigorous cost-benefit analysis, often in the form of discounting future cash flows to arrive at an internal rate of return (IRR) for the project. If the IRR is greater than the company’s cost of capital, the project would create value and theoretically should be completed. The opposite would be true if the return on capital is less than the cost of capital. But the equation changes when a business owner is also planning to sell the company. The risks of the new investment are extremely important, because if the projected cash flows don’t materialize then the investment capital was not well spent, and selling the company may become much more difficult, if not impossible.

    Consider this example: A food manufacturer needed more production capacity to grow. The owner wanted to build a new plant to alleviate the bottlenecks, but he also was thinking about selling his company. As with many middle-market operations, the owner was going to be heavily involved in the planning, construction and start-up of the new facility. He simply didn’t have the personal capacity to both sell his company and build the new plant. What should he do?

    In this case, the answer was straightforward: build it. The new plant was essential to the continued growth of the company and its ability to serve a major new customer. There was no technology risk with the facility, as it would be almost identical to another facility the company owned. The new plant would actually support future company growth, and would increase the attractiveness and value of the company. Quick pay-back projects that don’t hurt the company’s bottom line in the near term, and make for a more compelling growth story in the future when the owner does decide to bring his company to market, are always good ideas.

    Here’s another example: The owner of an environmental services company was considering a capital spending program to position the company to enter a new market. At the same time, the company was being sold by its parent company. The implementation risk was relatively low, as the new facilities were of a modular nature that could be scaled up in the future. However, in this case the answer was, "Don’t build it."

    Why not? In the second example, the company’s capital spending was linked to a new strategy, still unproven. The financial models certainly looked good, but how long would it take the company to obtain new customers? Could they successfully build the new business while also engaged in a sales transaction; or, would the sales transaction take too much of the management team’s time? Indeed, would buyers even be interested in buying the company when the financial outcome of the capital spending program was unknown? We concluded, in this case, that the commitment to a new strategy was better left to the new owners. We subsequently sold the company to a private equity group who wanted the management to focus on their core business.

    Those two examples demonstrate that real life isn’t always like the movies. If you build it, the buyers may come, or they may not. If the capital spending is tied to the core business, and is essential to achieve the company’s forecasted growth, then build. If, however, the capital expenditures involve risks such as incorporating new technology, or are intended to serve new, rather than existing, customers or markets, you may be better off letting the new owners decide before committing the dollars.



  • When your brand no longer defines you, consider a makeover.

    Building a brand into a household name can take years and all the requisite blood, sweat and tears. So changing course midstream might seem like a surprising move--but one that's a lot more common than you think.

    While the cost of a renaming effort, which often requires rebranding too, can range anywhere from $100,000 to $1 million, depending on a firm's size, companies do it all the time. Just look at FedEx’s Kinko’s brand, which became FedEx Office in 2008, or Sprint’s name change from United Telecom back in 1992.

    Giant brands aren't the only ones looking to change their stripes. Even smaller companies that have been around for years and watched their sales diminish as the world changed around them, rebranding can be a matter of survival.

    Consider the example of CallCopy. The Columbus, Ohio-based company first launched as a call recording software provider in 2004. But in recent years, the company began offering a complete suite of “workforce optimization” tools that still included call recording software but also incorporated programs for managing employees, analyzing speech and measuring on-the-job performance.

    “What we found over time is that people associated us with that call recording piece and we didn’t want to be locked into that tiny box knowing that we had more breadth,” says Keith Kress, director of marketing communications at the newly transformed Uptivity (formerly, CallCopy).

    Miller Insurance Group of Jacksonville, Florida also launched a recent (if reluctant) rebranding effort after expansion plans landed it in the crosshairs of a similarly named business. As the 11-year-old company fished around for new markets it noticed that another insurance firm--Millers Mutual--was already present in the Northeast, with a trademarked name. That discovery, coupled with the desire to franchise its business model and to find a name useful in all 50 states, led Miller Insurance to test new brand concepts.

    The effort wasn't without its hiccups, however. “Every name that makes sense has already been trademarked,” says David Miller, the company’s founder and CEO.

    Since he wanted an “all-American name,” Miller rejected any suggestions that might have been derived from Latin or Greek, or sounded like a drug company, including Prostina and Viser. “They didn’t sound warm and accepting,” Miller notes. The last name standing? Certainly nothing that sounds like a pill you’d pop: Brightway Insurance.

    No matter the reason, renaming and a company's requisite rebranding efforts require patience and oftentimes some guidance.

    Here are three tips from the company formerly known as CallCopy:

    1. Revamp your tchotchkes.
    CallCopy's process included some obvious changes: creating new business cards and employee shirts as well as a different site branded with “formerly CallCopy” for at least three months. They'd eventually lose the "formerly" rubric.

    2. Test the waters.
    Surveys also had to be conducted on what customers--as well as others from within the industry--thought of the company and its new name.

    3. Transition seamlessly.
    Finally, once the company decided on Uptivity, it launched two parallel sites for each of the company’s names. Those ran for a few months in order optimize search engine results and make the transition smoother.

    In the end, it cost a lot more than CallCopy wanted to pay both in terms of man-hours and dollars. All told, it took nine months, and “a very large investment,” says Kress, who wouldn’t disclose the exact sum. “It would have been easier to stay CallCopy, but we would have been limited by the name,” he adds.



  • Repetitive, time-consuming tasks are the biggest "tax" on your business. Get more of them off your desk.

    In order to make the millions, you have to scale the un-scalable: time.

    Your time is the most valuable resource you have at your disposal. The time you spend at work is an investment in the future of your company. Like any investment, it should be working for you: structured to maximize efficiency and yield the greatest possible return.

    We all have the same fixed supply of hours (if only we could invent a way to squeeze out more than those precious twenty-four!), but spending more of your time working is not necessarily the answer. The problem is a matter of distribution, not volume. Chances are, a good portion of what floods your inbox and comes across your desk in a given day are "high-tax tasks" -- things that are costly in terms of the attention and time they consume, yet are consistent, repetitive.

    To work smarter, not harder, you need to hack into scalable productivity. Here are the three steps to put in practice, today.

    1. Track the time-sink.

    To eliminate waste and maximize the hours you have, you first need to get a sense of the big picture. Make a "To Do" list for the week. As you work your way through it, track the time it takes to complete each task as you check items off the list. Use this information to identify problem patterns. Once you find the patterns, you can create routines to patch those leaks of time.

    My approach is always client-first. Those matters take precedence and priority, so my day is day inbox-driven to an extent. But inbox-driven does not mean interruption-driven. As a general metric, when a non-urgent task comes up in your day that you can tackle and complete within two minutes, do so. You will quickly gain a sense of which interruptions are both time-consuming and recur regularly. These are the untapped oil well of your day (after all, your time is no less precious a resource!).

    2. Automate.

    Everything that can be automated should be. That goes for everything from bill pay to periodic task reminders. Set it, and forget it. This will free up time day-to-day, reduce the number of steps that are sensitive to a potential error, and lead to faster responses in time-sensitive situations.

    First, step back and take a snapshot of a month’s worth of recurring tasks. Chances are, most of these are ripe for automation. Set that up. You spend the time to do it once, and it will save you precious time every week going forward.

    Next, look at your organizational procedures. Most likely, you can introduce a few tweaks that will allow you to turn these into automated processes, too. Think lean: Pare down as much as possible, and make continuous adjustments to hone your processes over time. Group and pre-schedule similar tasks so they can be accomplished efficiently but with minimum attention. All of a sudden, where you once had five individual weekly follow-up tasks that each cause you to divert and then re-focus, you now have a single two-hour block of time slated for weekly follow-ups.

    Make templates for every recurring event you can think of. You’ll spend less time approving outgoing items if they follow a pre-approved template, and regular tasks are less likely to fall through the cracks when everything happens on a schedule.

    3. Learn to love errors.

    Look at errors as an opportunity. Once an error is made, you have just identified a hole you can fill forever. How does this save you time, to boot? Simple: efficient systems. Mistakes raise red flags that you should read as red alerts. They highlight specific points of weakness in your current system (or indicate a lack of a system where there should be one). You can’t ask for a more direct symbol: here is where the process in place isn’t clear, isn’t feasible, or is too vulnerable to (inevitable) human error. The time you spend monitoring for, catching, and fixing such errors when you treat them as singular events can be reduced in one fell swoop. When the problem is systematic, the solution is, too.

    Institute a policy of Quality Control checks done by at least two different employees. This provides a self-monitoring system of checks and balances to reduce error, it will help maintain consistency in writing style and formality, and it keeps members of the team in the same loop. Though it involves an investment of time on the front end, it creates a streamlined (read: time-saving) process that is ultimately a time-saver (and a headache-reducer) for you on the back end.

    Think of it this way: when you’re bogged down in the daily details, you’re on a treadmill - running but getting nowhere new. Redistributing your time for maximum efficiency will make you bigger, better, faster, and stronger. With more time comes more energy and focus, so you can run the race with enhanced attention on your productivity, your profit, and your customer service - the three things that are really the most important for your business.



  • A roundup of the day's news--curated by the Inc. editorial team--to help you and your business succeed.

    1. Most Audacious Companies

    Inc. released its annual list of the top 25 companies changing the world. Check out the full list, plus maverick-in-chief Mark Cuban on what it takes to be an audacious entrepreneur.--Inc.com

    2. Social Semantics

    Enough with the term "social media" already, says Twitter co-founder Ev Williams. "Just because it's on the Internet or created by a single person doesn't make it social." But here's what does: if you know your audience, care about them, and they care about you just as much, then you're social. Something to keep in mind, marketers.--Medium

    3. Trust Us

    Has the "sharing economy" shaped us into a more trusting society? Certainly people are engaging in behaviors that would have been deemed crazy five years ago, from jumping into a stranger's car (Lyft) to handing over their house keys (Airbnb). But that "trust?" It rests on a complex set of digital tools and algorithms built by small companies.--Wired

    4. Native Clicks

    Native advertising is a relatively new experiment for brands, so how are they doing so far? Well, the latest numbers show that 70 percent of Internet users are receptive, saying they want to learn about products through content rather than through traditional advertising. Additionally, more than half of consumers who click on native ads do so with the intention of purchasing something, compared with just 34 percent who click on banner ads.--Inc.com

    5. CFO Shake-Up

    Facebook may have beat earnings expectations on Wednesday, but it lost its chief financial officer David Ebersman the same day. Ebersman said he's stepping down to move back to the health care industry.--Marketwatch

    6. Alan Mulally's Legacy

    Amidst widespread reports that Ford will soon announce COO Mark Fields as the successor to CEO Alan Mulally, the time is right to consider what you might learn from Mulally's legacy. Consider this leadership nugget from a November 2013 interview with McKinsey: Hold yourself and your teams accountable for answering these questions: "What business are we in? What is the deep consumer need we are uniquely positioned to satisfy?"--McKinsey

    7. Put a Ring on It?

    According to a recent study, marital status may play a big role in a CEO's investment decisions. The study found that bachelors and bachelorettes tend to be more aggressive in their behavior, while those who have a ball-and-chain are more often cautious.--Knowledge@Wharton



  • The well-known gadfly says big companies rule the roost, but they don't have to.

    Want to upend inequality and quash corporate cronyism for good? Unsurprisingly, Ralph Nader has some ideas.

    We have more in common with each other than we know. And despite all the division--religious, political, and otherwise--we're going to have to work with each other if we want to change things in the U.S.

    That was the message from consumer activist and presidential nominee Ralph Nader, who spoke this week in New York City at a crowded and policed event in Union Square for his new book Unstoppable.

    Many of Nader's themes small, fast-growth companies might find interesting, since they deal with anger about business regulations, the nanny state with its big giveaways to large companies, and the untapped rage of the Occupy Wall Street and Tea Party movements, which Nader says have more similarities than differences.

    "What the corporations have done is destroyed the principles of simple capitalism, that if you own something you have some control over it," Nader said in a hulking, stentorian voice, belied by his now-stooped shoulders and 80 years. "Managers control the process and define their own mergers and acquisitions and corporate strategy without any shareholder rights, as well as how much they pay themselves."

    Only by putting aside our bitter anger and acrimony that forces us to take sides can we break the corporate stranglehold over government and the economy, Nader said.

    'In Nader's World'

    In Nader's world, Republican conservatives, whom he calls "corporatists", are responsible for much that's wrong with the U.S. economic system. These corporatists bear almost no resemblance to classic fiscal conservatives such as the 18th century economist Adam Smith, and Friedrich Hayek, a member of the Austrian School of economics. Nader said he read both of their work, along with numerous other conservatives stretching back 200 years, in order to write his current book.

    "You see complete contradictions in the way they are distorted now in editorials of The Wall Street Journal, and through conservative ideology and electioneering," Nader said.

    For example, Smith was against amalgamations of corporations working together, which he feared would allow them to twist regulations to give them more power. Instead, he favored giving workers a living wage and spoke about the importance of public works and involving people in government processes. Similarly, Hayek objected to Medicare, not because it represented a socialist overreach of the state, but because it only covered one segment of society.

    Even conservatives from not that long ago--including former President Richard Nixon and Senator Robert Taft--had more compassion toward the masses, Nader said. Nixon attempted to push through guaranteed annual income legislation, but failed. Taft attempted to water down aspects of the anti-union Taft-Hartley Act because he thought it was too tough on unions.

    Nader also reserved some of his criticism for congressional Democrats, who he claims failed on health care not because they were unable to enact universal coverage but for laziness. They "decided in 2008 and 2009 that it was too much trouble taking on the health insurance giants and the drug companies," Nader said.

    A Way Forward

    Ultimately, Nader said he's looking to opposing organizations outside Congress to give legislators a push. One example is the Tea Party and Occupy Wall Street, which have met in recent months to discuss ways they can work together. Another is think-tanks, such as The Heritage Foundation, the Cato Organization, on the right, and the Progressive Policy Institute and the Economic Policy Institute, on the left, which have both put out reports condemning corporate handouts, bailouts and giveaways.

    "This is not going to happen unless we drop our animosity on the left and on the right in those areas where we really disagree, and say families don’t agree on everything, but they coexist," Nader said.



  • Are startups burning through their early funding rounds faster? Or just raising less than it seems?

    A lack of early-stage funding may not be today's startups' biggest problem after all.

    Now that worry about the Series A crunch has been partly eclipsed by handwringing over an alleged Series B crunch, research firm CB Insights decided to do some math and see how bad things really are. In the process, they came upon an interesting phenomenon: Startups seem to be blowing through their Series A money faster than ever.

    In its research blog, CB Insights has a sanguine take on this, noting that startups are “getting to Series B” faster. But often, “getting to Series B” doesn’t mean that a startup has accomplished specific milestones that automatically merit a B round. It means that they’ve run out of the money they raised in their Series A, and they’ve either got to raise more or pack it up and go home.

    Behind the Numbers

    First, the data on the possible Series B crunch. CB Insights looked at the number of Series A rounds and B rounds completed in every year from 2008 to 2013. You would expect there to be more A rounds than B rounds. That’s because some percentage of companies will stall out, fail, or just not need additional funding after an A round.

    In 2008, there appeared to be about 575 A rounds and about 400 B rounds. Those numbers, and the gap between them, have grown pretty steadily since then. In 2013, there were about 940 A rounds and about 500 B rounds.

    If you look at the trend lines, it’s hard to characterize this as a crunch, even though it must certainly feel that way to anyone trying to raise a B round. The real problem is that between super-angels and micro-VCs, there seems to be lots more Series A dealmaking--about two-thirds more--while the number of Series B deals is up by "only" about 25 percent.

    Some more data, which is less dramatic but still doesn’t support the idea of a horrible crunch: In 2008, 55 percent of companies that raised an A round successfully raised a B round. In 2011, that number was 50 percent. So yes, fewer companies have been able to raise their B rounds recently but the decrease is hardly precipitous.

    Then there’s the amount of time between a company’s Series A and its Series B. There's no doubt that has fallen. CB Insights looked at A round deals from 2008 to 2011, and then looked at how long it took those same companies to raise their B rounds. (They didn’t look at A rounds that were funded in 2012 or later, since those companies might not be ready for another round of financing quite yet.)

    Here we see a big difference: In 2008, it took, on average, 20 months for a company to go from raising its A round to raising its B round. That number has declined each year since, so that, in 2011, it took just 15.1 months for a company to go from A round to B round.

    The Upshot

    It could be that companies are making progress more quickly. It could also simply be that their burn rates are higher. Those two things are not mutually exclusive, of course. A company that has not yet hit profitability could be going like gangbusters, and that costs money. The company could also be spending carelessly or spending on the wrong things, as we saw in the infamous dot-com bubble.

    One interesting twist can be gleaned from data provided by PricewaterhouseCoopers and the National Venture Capital Association. The PwC/NVCA data is not exactly comparable to that of CB Insights. Instead of tracking investments by round, they characterize each deal as "seed," "early," and so on.

    Still, if we look at the average size of a seed-stage deal, we see that it has changed dramatically over the past few years. In 2009, the average seed-stage investment was about $4.6 million. In 2010, the average seed-stage deal was $4.1 million. Get this: In 2011, the average venture-backed company got only $2.4 million at its first round.

    That flies in the face of everything we hear about monster rounds for unproven companies. Instead, it shows just how much of an outlier those investments and companies are. Overall, what we’ve got at seed stage is more stinginess, not less.

    There may be good reason for that: It doesn't cost as much to start a company as it once did, thanks to readily available cloud services, the ability to hire remotely, and a host of other familiar factors. But those smaller seed-stage rounds--not more progress or profligate spending--could be the reason venture-backed companies need to go back to the well so much sooner.



  • Data journalist Nate Silver recently ranked the country's earliest and latest arriving employees.

    If you are a night owl living in New York City, San Francisco or Boston, then you're in the right place. In each of these cities, the median work arrival time is later than the national median.

    This is according to results from FiveThirtyEight journalist Nate Silver. He recently analyzed data from the US Census Bureau in order to determine where in the country people are rising early or sleeping in.

    Silver said that as someone who's averse to early mornings, he's happy to be based in the Big Apple now. But when he was traveling frequently for a consulting position 10 years ago, things weren't so easy. "Sometimes I’d travel to cities such as St. Louis and Omaha, Neb., to visit clients. Meetings as early as 6 or 7 a.m. were not uncommon," Silver wrote.

    While most Americans think of the typical work day as taking place from 9 to 5, these results show otherwise. Even in New York, where employees arrive at work about a half hour later than the national median, the median start time is still 8:24 am.

    Silver noted two important things about the results. First, it's not really your location that determines what time you'll have to get up in the morning. It's the type of work you do. For example, in Hinesville, Georgia, the median start time is 7:01 a.m. But take into consideration that a large portion of the city's workforce is in the military. Second, the information doesn't represent the increasing number of employees who work from home, Silver said.

    Here's a summary of the results:

    Where Night Owls Dwell

    The median start time for the U.S. as a whole is 7:55 a.m. Employees in New York City, Atlantic City, New Jersey, and San Jose, California arrive to work significantly later with median start times of 8:24 a.m., 8:23 a.m. and 8:21 a.m., respectively. Interestingly, though, one quarter of Atlantic City's workforce doesn't show up until at least 11:26 a.m., as much of the city's economy involves tourism-related jobs.

    The early bird gets the worm

    You'll find America's top three earliest rising cities down south. They include: Hinesville, Georgia -- with a median work arrival time of 7:01 a.m. -- Pascagoula, Mississippi -- 7:06 a.m. -- and Jacksonville, North Carolina -- 7:14 a.m. Interesting Honolulu makes the list with a median start time of 7:29 a.m. Silver suggests that's because many employees try to use the early morning hours to coordinate with the U.S. mainland.



  • A 90 percent success rate also means a 10 percent failure rate that can cause major ripples.

    Even the very best recruiters are going to make a mistake from time to time. And even a razor-thin margin of error can have a big effect on making sure your company is identifying top talent. Here's the math to prove it.

    This logic problem comes from the forthcoming book from Harvard Business Review Press, written by executive search expert Claudio Fernández-Aráoz, It's Not the How or the What but the Who. It goes a little something like this...

    Imagine you are able to correctly gauge talent 90 percent of the time. Fernández-Aráoz writes that this would basically be impossible--even the best interviewers and recruiters hit about 70 percent of the time--but for the sake of argument, let's say you are just spectacular.

    And let's say you're interviewing 100 people for a position. You probably don't have the time for that, but again: sake of argument.

    So what percentage of those candidates will you correctly identify as top talent?

    "I've done this exercise hundreds of times, all over the world, with thousands of students, professionals, and executives," Fernández-Aráoz writes. "The responses I typically get from a large crowd usually range from 9 percent to 90 percent. Very few people give the right answer intuitively, and not many more can calculate it.

    "The answer is 50 percent."

    Wait, what?

    Stick with me. If you're interviewing 100 people, 10 of those people will necessarily represent the top 10 percent of talent in that larger pool. Of those 10, you will choose nine to pass on to the next round, and wrongly dismiss one.

    You will then have 90 other candidates who are not top talent. You will rightly dismiss both of them. However, since you are only right 90 percent of the time, that 10 percent margin of error will lead you to incorrectly pass 10 percent of that group on to the next round.

    So in the end, you'll have nine people who are top performers and nine lesser candidates moving on to the second round of interviews. That's a sobering showing to come from your 90 percent rate.

    (Did I mention, Fernández-Aráoz is also a former industrial engineer?)

    Okay, now that you're adequately shocked, here's the good news. Just because the numbers work out this way, it doesn't mean you'll be hiring all those people and wind up with nine less-than-ideal hires. (Unless, I guess, if you have 18 spots open for people with similar qualifications and experiences and don't plan on doing any further vetting.)

    Instead, the numbers really drill down the importance of the second and third interview process, and making sure your colleagues conducting those are also strong judges of talent. This kind of "filtering" process, as Fernández-Aráoz puts it, should ultimately widdle things down to the right candidate.

    If you, a second interviewer, and a third interviewer are all very skilled at gauging talent, by the end, there's only a 1 percent chance that you'll wind up with a low performer in the pool when it's time to make a decision, Fernández-Aráoz writes. That suddenly doesn't look so scary.



  • You know the overt benefits of crowdfunding (cash, gauging customer interest). A recent article by Marty Lariviere, a professor at Northwestern's Kellogg School of Management, explores two less obvious benefits: inventory management and operational flexibility.

    Crowdfunding is called crowdfunding for a reason: You're getting money from the masses, because they believe in your business or perhaps even because they just owe you a favor. Put your company or a product on a crowdfunding site and, if you're fortunate, you'll come away with cash and a sense of consumer demand.

    According to a recent article by Marty Lariviere, a professor at Northwestern's Kellogg School of Management, there may also be some hidden benefits to crowdfunding: inventory management and operational flexibility.

    Crowdfunding and Gustin Jeans

    When it comes to inventory management for short-lived products (such as fashion goods), Lariviere points out that product variability is costly. "Having to commit resources before knowing what will sell means risk," he writes. "But that risk also suggests an opportunity: If one can find a way to reverse the order of things and commit resources only after knowing what will be demanded, then an otherwise unprofitable business can be a profitable one."

    That's where crowdfunding comes in. If a company can use a crowdfunding platform to learn which products customers demand, then it can offset the risk that comes with product variability. In other words: If you have a precise sense for the quantities of customer demand, then you'll do a a better job of stocking and turning over your inventory. You won't have to commit resources to buying or making products, before you know which ones will sell.

    As an example, Lariviere cites Gustin, a maker of high-end jeans. He writes:

    It initially sold its jeans through boutiques, which bought jeans at a wholesale price near $80 but then marked them up to around $200. Gustin had to front all the cost of production and then wait for stuff to sell. Now, they have reversed the order of things and take orders directly from customers ahead of production.

    That's the inventory management piece of it. Another benefit for Gustin is operational flexibility--specifically, the ability to offer more variety. The reason? Gustin no longer has to take risks buying one type of fabric or another before knowing what customers want. This gives them the flexibility to source based on what they know will sell. They're no longer hemmed in by risky sourcing choices made in advance of gauging customer orders.

    The Bigger Picture

    All of the above is clearly working for Gustin, but as Lariviere mentions, there are reasons clothing companies have traditionally relied on wholesale-retail distribution. "An established brand that has built a broad distribution network could be doing quite well in that model and may be at a scale that cannot be easily reached with Gustin's model," he writes.

    Plus there's the whole try-them-on-before-you-buy-them thing with jeans--a category of clothing where finding a perfect fit isn't easy--or any piece of clothing for that matter. "If customers find testing the fit of jeans important, being in stores is helpful and may point to a limit to how much Gustin can grow," he concludes.

    For some context, I reached out to Nudie Jeans, a global brand based in Gothenburg, Sweden, to get their take on Gustin's model, as described by Lariviere. Public Relations & Marketing Manager Ruari Mahon emphasized that the inventory management benefits Gustin gains through crowdfunding are feasible in wholesale-retail arrangements, too. "Orders are placed ahead of the assigned season, before production gets underway," she says. "The 'selling season' usually closes at least 4-5 months before the product would become available in stores."

    She adds that there are potential retail benefits above and beyond the initial trying on of the product. For example, repairs: Nudie happens to run 17 standalone locations which not only sell the brand, but also offer to fix your holes. "This promotes creating less waste to the end consumer, but in a tangible and original way."

    Interestingly, Gustin touts the waste-free attributes of the crowdfunding model. "We use crowdsourcing to line up supply and demand for every product we make. This creates zero waste cycle and we return the savings to you," notes the company web site.

    The silver lining, of course, is that both companies are respecting consumer concerns about life cycles and wastefulness.



  • If you're satisfied just to keep pace with your competitors, eventually they're going to pass you by permanently.

    This isn’t the first time I’ve written about an awesome innovation from Amazon. I would stop if they would stop.

    While the company’s new streaming media box, Amazon Fire TV, received a greater share of recent headlines, it was the Amazon Dash that grabbed my attention. The Dash is a wand-like wireless device that includes a microphone and a barcode scanner, enabling users to add items to an AmazonFresh shopping list by scanning a product’s bar code or speaking its name. Need apples? Say, “apples” into the microphone and apples will arrive the next day, touts the Dash launch video.

    There are plenty of massive retailers that are still trying to figure out how to migrate their bread-and-butter brick-and-mortar business to an e-commerce model, which brings up a new set of challenges in fulfillment and customer service. Meanwhile, Amazon is installing a checkout lane in the kitchen.

    I know much of this technology lives inside the smartphones we all carry today. Still, Amazon should be applauded for taking a calculated risk on building a device dedicated to making shopping easier for the things you need every day.

    I’ve never used Dash. It could find its way into American homes and quickly settle in that seldom-pulled drawer that acts as a graveyard for remote controls. (For now, the device is available only on a trial basis to Amazon customers in San Francisco and Los Angeles who pay for Amazon’s new Prime Fresh membership, which includes grocery delivery.)

    But I believe it’s a glimpse at a whole new era of businesses inventing technologies aimed at making the customer experience frictionless, fully informed, and easy to fix. No matter if you’re selling motorcycles or health care, there exists a better way to provide goods and services to your customers. For instance, consider custom suit maker Arden Reed, which will send a "Tailor Truck" equipped with cutting-edge 3-D body scanning technology to your door. The scanner takes more than 1.5 million body points to create a perfect-fitting suit. Or Hointer, which provides retailers with technologies such as robots that deliver items to an in-store pickup area or a fitting room within 30 seconds.

    I see a lot of companies that are constantly playing catch-up. Maybe they’re just now rolling out social media for customer service, or they’re finally getting around to optimizing their website for mobile.

    With today’s lightning-quick pace of innovation, a failure to keep pace can turn into a big problem quickly. Businesses become overwhelmed with keeping up with their peers instead of devoting attention to the initiatives that will wow customers and keep them close.

    Can you imagine that meeting at Amazon where Dash was hatched? Someone probably said, “What if you could just say ‘apples’ out loud and apples appeared on your doorstep?” Then they made that idea a reality.

    I know, I know, Amazon has an army of engineers and the resources to create amazing inventions. But that’s not the point.

    The point is that instead of playing catch-up, Amazon built something that customers didn’t even know to ask for. And everyone concerned with creating happy customers has that opportunity.



  • Here are a few topics the executive should be prepared to cover.

    It has been a huge quarter for Facebook. In the last three (fiscal) months the company has bought messaging app WhatsApp for $19 billion and virtual reality headset maker Oculus VR for $2 billion. It has opened the door for video advertisers, and begun carving out its messaging business into a separate app, Messenger. Lastly, the company has begun rolling out an off-Facebook advertising network.

    At the same time, Zuckerberg has begun to outline his vision for the future of Facebook, "unbundling the big blue app."

    But high drama isn't the same as good business, and Zuckerberg ought to answer these questions on his call with Wall Street tonight:

    1. How much cash do you have left?

    There have been two big deals totaling a value of $21 billion since the last call. But there was only $3.3 billion in cash on the balance sheet at the end of last year. The cash portion of the WhatsApp and Oculus deals totals a possible $4.7 billion. Facebook almost certainly doesn't have a liquidity problem, but nonetheless, the spending has been dramatic and investors need to see the cash management plan. Will it restrict Facebook's use of cash in the future?

    2. How much is WhatsApp going to cost before it starts generating revenue?

    Zuckerberg has been a hands-off acquirer, in the sense that he prefers to let acquisitions grow their user bases and perfect their products before they need to generate sales. WhatsApp has no intention of selling advertising in the next several years, its CEO has said. But that luxury won't last forever. Some guidance on whether WhatsApp--and its 500 million users--will be profitable or a sinkhole is appropriate.

    3. Why have we not seen any video ads yet?

    Autoplay video in the Facebook news feed is potentially one of the biggest needle-movers for Facebook revenue. Yet their launch has been delayed for nearly a whole year. What the heck, Facebook?

    4. Do you actually know what you are doing with Oculus?

    Until recently, Facebook's acquisitions had all been obvious fits with the existing company. When it acquired social location app Glancee, for instance, it turned into Nearby Friends, a newly launched location feature. Oculus, however, is a hardware product not a software product. It's a gaming device not a social device. And it's on a platform that does not link with Facebook. Of course, it's an impressive product that blows away anyone who experiences it. But being a good manager of a social network is not the same thing as being a good manager of a virtual reality platform. What's the plan for Oculus, and does it make sense?

    5. How successful are the ads on Instagram?

    Instagram hit 200 million users and is threatening to eclipse Twitter any day now. But we hardly see any ads on Instagram. That's great for users but lousy for EPS. Does this product show any signs of financial life?

    6. Does the Messenger plan make any sense at all?

    As far as we can tell, the Messenger app competes head to head with WhatsApp. If Messenger is successful, it might cannibalize WhatsApp. Currently, Facebook is forcing users to use Messenger by ending the message feature inside Facebook if they have the Messenger app. The ultimate goal is to make Messenger a standalone message platform outside Facebook. This sounds duplicative of WhatsApp at best, and competitive at worst. We need reassurance here.

    7. How much is Internet.org going to cost?

    Zuckerberg has said that to get the users Facebook needs to grow in the future, Facebook and its wireless carriers must connect the world, free of charge. This won't be cheap. It would be nice to see some numbers applied to the pipe dreams about drones, lasers and satellites.



  • It's a classic tale: A hot startup is acquired by a larger company, the startup falls apart, and everyone asks what happened.

    For decades large companies have gone shopping in Silicon Valley for startups. Lately, the pressure of continuous disruption has forced them to step up the pace.

    More often than not the results of these acquisitions are disappointing.

    What can companies learn from others' failed efforts to integrate startups into large companies? There are two types of integration strategies, and they depend on where the startup is in its lifecycle.

    The Innovation Portfolio

    Most large companies manage three types of innovation: process innovation (making existing products incrementally better), continuous innovation (building on the strength of the company's current business model but creating new elements), and disruptive innovation (creating products or services that did not exist before.)

    Companies manage these three types of innovation with an innovation portfolio--they build innovation internally, they buy it or they partner with resources outside their company.

    Five types of innovation to buy

    If they decide to buy, large companies can:

  • License/acquire intellectual property
  • Acquire startups for their teams (and discard the product)
  • Buy out another company's product line for the product
  • Acquire a company for the product and its installed base of users
  • Buy out an entire company for its revenue and profits.
  • Silicon Valley: a corporate innovation candy store

    Corporate business development and strategic partner executives are flocking to Silicon Valley to find these five types of innovation. In response, venture capital firms--like Sequoia and Andreessen/Horowitz--are hiring new partners just to work with their portfolio companies and match them to corporations. They are actively organizing annual and quarterly activities to bring their portfolio companies and Fortune 500 decision makers together--both large events and one-on-one visits. The goal is to get a corporate investment or an outright acquisition of their startups.

    VCs like acquisitions as much as IPOs because the acquiring companies often can rationalize paying large multiples over the current valuation of the startup. For acquirers, this math makes sense since they can factor in the potential impact the startup has when combined with their existing business. These nosebleed valuations, however, make it even more important that the acquired company becomes integrated correctly. The common mistake acquirers make is treating all acquisitions the same.

    Is the Potential Acquisition Searching or Executing?

    Not all new ventures are at the same stage of maturity. Remember, the definition of a startup is a temporary organization designed to search for a repeatable and scalable business model. A business model is all the parts of a strategy necessary to deliver a product to a customer and make money from it. These include the product itself, the customer, the distribution channel, revenue model, how to get, keep and grow customers, resources and activities needed to build the business and costs.

    Startups are companies that are still in the process of searching for a business model. Ventures that are further along and executing their business models are no longer startups, they are early-stage companies. Large corporations come to the valley looking to acquire both startups searching for a business model and early-stage companies executing business models.

    Companies that acquire startups for their intellectual property, teams or product lines are acquiring startups that are searching for a business model. If they acquire later stage companies who already have users/customers and/or a predictable revenue stream, they are acquiring companies that are executing.

    What gets lost when a large company looks at the rationale for an acquisition (IP, team, product, users) is that startups are run by founders searching for a business model. The founding team is testing for the right combination of product, market, revenue, costs, etc. They do it with a continual customer discovery process and while iterating, pivoting and building incremental MVP's.

    This phase of a new venture is chaotic and unpredictable with very few processes, procedures or formal hierarchy. At this stage the paramount goal of the startup management team is to find product/market fit and a business model that can scale before they run out of cash. This search phase is driven by a startup culture that encourages individual initiative and autonomy, and creates a shared esprit de corps that results in the passionate and relentless pursuit of opportunity. This is the antithesis of the process, procedures and rules that make up large companies.

    In contrast, early stage companies that have found product/market fit are now in execution mode, scaling their organization and customer base. While they still may share the same passion as a startup, the goal is now scale. Since scale and execution require repeatable processes and procedures, these companies have begun to replace their chaotic early days with org charts, HR manuals, revenue plans, budgets, key performance indicators and other tools that allow measurement and control of a growing business. And as part of their transition to predictable processes, their founders may or may not still be at the helm. Often they have brought in an operating executive as the new CEO.

    Predicting Success or Failure of an Acquisition

    So what? Who cares whether a potential acquisition is searching or executing?

    Ironically, the business development and strategic partner executives who find the startup and negotiate the deal are not the executives who manage the integration or the acquisition. Usually it's up to the CTO or the operating executive who wanted the innovative technology (and at times with a formal HR integration process) to decide the fate of the startup inside the acquiring company.

    It turns out the success of the acquisition depends on whether the acquiring company intends to keep the new venture as a standalone division or integrate and assimilate it into the corporation.

    Actually there is a simple heuristic to guide this decision.

    If the startup is being acquired for its intellectual property and/or team, the right strategy is to integrate and assimilate the startup quickly. The rest is just overhead surrounding what is the core value to the acquiring company.

    However, if the startup is still in search mode, and you want the product line and users to grow at its current pace or faster--keep the startup as an independent division and appoint the existing CEO as the division head. Given startups in this stage are chaotic, and the speed of innovation depends on preserving a culture that is driven by autonomy and initiative, insulate the acquisition as much as possible from the corporate overhead. Unless you want to stop innovation in your new acquisition dead in its tracks, do not pile on the corporate KPI's, processes and procedures. Provide the existing CEO with a politically savvy "corporate concierge" to access the acquiring company's resources to further accelerate growth. It helps if the acquirer has incentives for its existing employees that tie the new acquisition's success to those that help them. The key insight here is that for a startup still searching for a business model, corporate processes and policies will kill innovation and drive the employees responsible for innovation out of the acquiring company before the startup's optimal value can be realized.

    If the acquisition is in execution mode, the right model is to integrate and assimilate it. Combine its emerging corporate KPI's, processes and procedures with those of the acquiring company. Unless it's the rare founder who secretly loves processes and procedures--transition the existing CEO to a corporate innovation group or an exit.

    Lessons Learned

    • Corporate acquirers need to know what they're buying - is their acquisition searching or executing
    • If the startup is acquired for its IP, talent or revenue, it should be rapidly integrated into the acquirer
    • If the startup is acquired for its products and/or users, preserve its startup culture by keeping it an independent unit
      • Appoint a "corporate concierge" to access the acquiring company's resources
      • Incentive programs need to tie together the new acquisition's continued success and the rest of the company
    • Acquirers need a formal integration and on-boarding process


  • If work life seems blah and the team is bored, you need to make it fun! Here Inc. columnists share how to put fun in any workplace.

    For some people work is an exciting opportunity to use their talents and skills to achieve great things. But sadly, for many people work is considered an act of drudgery that's the price you pay for getting a living wage. I personally don't see why nearly any work environment can't be purposefully fun and entertaining. I was inspired this week by sales guru Jack Daly's new book. In the book, Daly insists you have to put the F-word back into business. Forget simple Band-Aid fixes like birthday parties or a foosball table in the middle of the office. Opt instead for integrating fun into your culture.

    When I ran my Inc. 500 finance company, I found that the fun factor had a direct correlation to hiring the right people. People who were passionate about our work and the growth of the company were able to find fun in nearly everything we did. Sure combing through hundreds of pages of financial documents sounds like a snorer to many people. So I looked to hire people who liked business and finance and had natural curiosity. Then I would give them enough context to learn the details of how people spent money and lived their lives. That's when each file became a wonderful storybook that was both fascinating and entertaining. Simply put, you can't create fun where there's no interest in the first place. Find people who love what you do and give them the opportunity to make the most of the opportunity creatively.

    Here are additional insights from my Inc. colleagues.

    1. Make it a game.

    One common thread we all share is the desire to play games. Turning the work into a game is a great way to keep everyone motivated and engaged. For example, I turned an outdated training program into a "choose your own adventure" version of The Game of Life. The group was broken up into teams and they competed against each other to see who would make the right choices and come out on top. Instead of a dreaded four hour lecture with boring slides, the group saw it as a bonding experience, and the next group was eager to sign-up and attend. Eric Holtzclaw--Lean Forward

    Want to read more from Eric? Click here.


    2. Let 'em rock!

    We believe in fun so much, we recently added "Our work is fun" as a core value at Likeable Local. We like to make noise--a large gong in the middle of the sales pit rings each time we add a new customer, and at 5:00 pm each day, we celebrate our successes with a "Moment of Rock." Fun is hard to systematize, but through emphasizing its importance in our core values, culture, and talent, you can ensure that a fun office prevails. Dave Kerpen--Likeable Leadership

    Want to read more from Dave? Click here.


    3. Let the people decide.

    While research indicates that employees who have fun at work are generally happier and more productive, be careful: recent studies also show that fun activities imposed by management can actually decrease performance. Long story short, the best fun activities in the workplace are those developed and implemented by employees themselves--not by their bosses. In my first 9-to-5 job after graduating from college, my team made work fun in a variety of different ways, including giving out an award for the employee who processed the most purchase orders in a week, along with an award for the weirdest item purchased. (I once won that award for purchasing a pool cover for the President's vacation retreat at Camp David.) When it comes to fun, let your people take the lead, and support them when they ask for it. Peter Economy--The Management Guy

    Want to read more from Peter? Click here.


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  • What is getting in the way of you getting things done?

    One of my long-standing clients, National Motor Club, is a provider of roadside assistance and other safety and security benefits for its members. Soon after Matt Krzysiak was promoted to CEO, he showed leadership courage by rolling out an initiative called “the dumb things we do.”

    It was a lighthearted, nonthreatening way to uncover goofy policies and inefficient processes that chipped away at customer loyalty, profit margins, and employee engagement. Over the course of a week, employees submitted short descriptions of any activities they felt did not add value and should be stopped or changed. All the feedback was compiled into a single list.

    Krzysiak shared the list with the entire company--with an open mind, no judgment, and lots of laughs--to reinforce his team’s courage in revealing these issues. Then he involved the employees in fixing or stopping the “dumb things we do.”

    My clients’ stop doing lists tend to cluster into three main areas: email, reports, and meetings. Here is a list of the most common things they choose to stop:

    1. Stop continuing email strings of more than three replies by picking up the phone or walking down the hall to talk to the other party.

    2. Stop audible email alerts to prevent from constantly reacting to incoming emails.

    3. Stop using “Reply All” with email.

    4. Stop asking for reports that I do not use to make decisions and improvements.

    5. Stop requesting reports that I do not review or do not use to make decisions/changes.

    6. Stop allowing upward delegation by asking “What do you recommend?”

    7. Stop holding “meetings after the meetings.”

    8. Stop leaving most important items for last.

    9. Stop scheduling meetings back-to-back each hour and instead schedule them for 45 minutes.

    Stop these nine activities today and start winning tomorrow.

    For more practical tips to elevate your leadership, register for the author’s FREE newsletter.



  • Most new products fail. Here are three ways to you can capture customers' hearts--and wallets.

    An estimated 75 percent of new products earn less than $7.5 million in their first year. How can you make sure yours is not in this woeful heap?

    Information Resources, Inc. (IRI) recently analyzed 190,000 CPGs introduced in 2013 to identify the clear winners, and found that each had its innovation origins inspired by "understanding the deep context of consumer attitudes, usage and shopping habits." Across the broad spectrum of CPG categories--food and beverage, household health and beauty, and convenience items--three factors emerged as key. In order to inspire early adopters to become repeat customers and spread the word to family and friends, new products must meet critical expectations that using them gives consumers results that are fun, fast, and functional.

    Here are some tips to make your product a must-have for consumers.

    1. Make your product fun.

    Who would have thought a healthy product like yogurt could spawn billionaires (think Chobani)? It all comes down to the success of marketing your product as fun and as the “it” product of the moment.

    Take Müller Yogurt efforts. Pepsico/Quaker Oats introduced the product to the US market in 2012-2013 and made nearly $100 million in first-year sales by combining the traditional function of yogurt as a healthful fast food with a concept of fun. Its quirky European spelling is the first element of fun, and Müller’s innovative compartmentalized packaging gives consumers of choice of whimsical mix-ins such as crispy crunch and choco balls. Müller literally turned the yogurt package upside down with its additional offering of FrütUp flavors--yogurt cups with mousse-like fruit right on top, where consumers can smell and taste it right away.

    So when you look at your product line and how to market, think of how to apply the fun factor to get an added sales boost.

    2. Make your product easy to use.

    According to IRI, consumers embrace household products that save time and money with innovative packaging: "a strong majority of 2013 home care innovation winners, 82 percent, make it easier to get household chores done. Fifty-five percent of winners make home care more convenient."

    Far and away the most successful trend in this category has been the introduction of pre-measured cleansing agents for the laundry and the kitchen. Tide, ARM & HAMMER, and Purex all offered a version of a toss-in dose of detergent that eliminates the need for measuring and the mess of dripping laundry liquid. The same pod technology has taken the dishwasher detergent market by storm. This new technology also racked up some $325 million in sales for Proctor & Gamble’s Tide Pods.

    Same product, different packaging. That should be a no brainer when you look across your product line and think of ways to make customers experience easier.

    3. Make your product multi-purpose.

    Last year's successful products delivered on their promises to consumers. The most successful ones delivered on multiple promises. In the huge (14 percent) market segment of health and beauty products, consumers look for items that save them time and money by giving them professional results from in-home preparations that condense multi-step procedures into one.

    One such family of products, Proctor & Gamble's Pantene Age Defy hair treatments, had Good Housekeeping testers singing its praises: "We were certainly impressed--Age Defy shampoo/conditioner or shampoo/deep conditioner gave some of the best results we've ever seen." Evidently consumers agree. Reports Procter & Gamble: "Pantene Expert Collection Age Defy Advanced Thickening Treatment launched in North America in January 2013 at a premium price and is already the #1 treatment in the Salon Inspired segment of the Hair Care category."

    Why was P&G so successful? It was able to convince consumers its product was doing double duty. Think of your roster of products, and see if any can be used in unique ways that the one you are currently pitching.

    You don’t have to radically alter your product line to get great sales--take a look at your current line-up and see how a more fun marketing approach, ease of use and multi-purpose approach can change the way you sell the product to customers. Sales are sure to follow.



  • Automattic founder Matt Mullenweg was always reluctant to grow his staff, even as more and more people were using his WordPress.com software. Here's what changed his mind.



  • At a recent conference, Stanford's Bob Sutton explained what he thinks are the most important ways a team can achieve balance.

    When it comes to your outlook on your long-term business success, is it better to be an optimist or a pessimist? Researchers have long studied this question.

    "The answer is sort of 'yes,'" Bob Sutton, a Stanford University professor of management and science engineering, said. He spoke Tuesday at Office Optional, a San Francisco-based event focused on remote working strategies that drew about 500 attendees.

    "People who are good at scaling and long-term planning in general have a really weird combination of optimism and pessimism," Sutton said. Take Steve Jobs who had a grand vision for the way that Apple products would change millions of lives. Yet Jobs fretted on a daily basis over how to get the smallest product details right.

    "The best kinds of people -- and it's very important for scaling and anything that you're doing -- are what I would call 'happy worriers,'" Sutton said.

    Granted, not everyone naturally maintains such a balanced disposition. That's why Sutton advised assembling a well-balanced team. If you have an employee who is unreasonably worried about everything, make sure he's paired up with someone who's impossibly optimistic.

    Happy Warriors

    Toward the end of his talk, Sutton fielded questions from viewers watching the livestream and using a chat tool to send in questions. One person wanted Sutton to clarify if he had said "happy worriers" or "happy warriors."

    "I said 'happy worriers,' but 'happy warriors' are good, too. So let's talk about happy warriors," Sutton said. "When it comes to creative work, one of the most important things you can do is learn how to fight."

    Sutton said past research has shown that the best creative teams are skilled at fighting productively. They know which conflicts are worth battling over, and they know when to stop fighting in order to join hands and get something done.

    Intel is perhaps the company best-known for cultivating this skill in its employees. There, workers are actually trained in "constructive confrontation," Sutton said.

    "Having taught at Stanford now for 30 years … one of the things I think that we're failing even in our elite education -- and we're failing at Stanford although we're trying -- is teaching people to fight constructively," Sutton said. "And to me it's really an important thing."



  • Twitter is beginning to look a lot like Pinterest. See how the site's new look can help you raise your brand's profile.

    The new Twitter profiles are finally here--and boy, do they look a lot like Pinterest. They retained a bit of the old Twitter flavor, but look admittedly splashier with all those big photos and media embeds. Here's a quick primer for the uninitiated, or those, who like me, rarely visit their profile page unless they're changing their photo. As an aside, anyone can switch to the new design as of April 22.

    A New You

    Want your brand to be larger than life? You got it. The new profile makes everything big, from the profile picture to the full-width header to the tweets themselves. Tweets get larger the more users engage with them, so don't be surprised if you're squinting to read some of the tweets that never gained traction. Most notably, the profile picture appears at the top left, along with other pertinent info such as your handle, bio, and when you signed up. Much in the way Facebook flaunts the date you joined, Twitter wants users to build up a habit that goes beyond the here and now, or just musing on news.

    The Big Picture

    Pictures are everything on the new profile page, which means you'll have more than one opportunity to showcase your brand. (It also means you may want to do a little spring cleaning and delete anything you don't want your customers to see.) Photos appear right underneath your profile info, while a menu bar under your header allows visitors to peruse your following, followers, favorites, and lists, if they're public. Use the full header to show off your brand's logo or what you stand for.

    Self-Promotion

    Perhaps the most exciting addition to the roster of features is the ability to pin a tweet. Click on the little more menu in every tweet (a.k.a. those three dots), and select "Pin to your profile page" to make it happen. Everyone will see that tweet first when they come to your page, although you may want to keep this one updated, lest it go stale.



  • Here's why marketers have come to value native ads.

    In light of some recent promising figures, marketers have increasingly invested in native advertising. More than half of consumers who click on native ads do so with the intention of purchasing something, compared with just 34 percent who click on banner ads. MDG Advertising created the infographic below to provide a snap shot of the state of native advertising today -- and where it's headed.



  • By the time you try to give them raises, they're already out the door. If you want to retain your best people, you need to start much sooner.

    If you're in a war for talent, you've probably read more than you can stand about hiring so-called "Rockstars." About finding the best-of-the-best. About not settling, and all that. And indeed, in my experience as a two-time successful founder/CEO, the No. 1 most important thing you can do is put together a great team. It is absolutely true.

    But the No. 2 most important thing you can do is retain your employees. Today, frictional unemployment for experienced tech engineers, salespeople, marketing stars, and other leads is basically negative, near as I can tell. The country is in a very bifurcated mode, where unemployment in general remains stubborn, but there is unlimited demand for almost all key roles in high-growth companies.

    So when you actually land great employees, especially senior hires, you have to do whatever it takes to retain them.

    I did many things wrong as a CEO in both my startups. But one thing at least quantitatively I did well was retain the team. I tried to copy my old boss, whose motto was Zero Voluntary Attrition. In my first startup, not a single person left. In my second, I only lost one person that I really wanted to keep. You will lose some pure startup people once things scale up. But after that, I lost no one that we needed to keep but one.

    Now I'm not saying it was all roses. Some of my employees could barely stand me at times. Others needed to find a way to change or modify their roles. And--importantly--a number of the best folks on my teams almost left. They came very close. But they didn't leave.

    So, how did I keep them? Here are my key learnings:

    1. By the time you give them a raise, it's too late. They're already out the door.

    You have to get compensation right, as best you can, all the time. These days, anyone good is going to get a raise to move--and maybe a signing bonus on top of that.

    The thing is--you can't counter. It's too late by that point. Once they tell you they have another offer they're already out the door. A raise won't do it at this point, at least not for the good ones.

    2. Always pay market or above as soon as you can afford it. At least for the great ones.

    The other night I was at an event with a number of other CEO founders. One CEO told me the story of how he lost a top up-and-coming engineer, who was making a five-figure salary, to a real boring company that doubled her salary. That boring company had to. How else can a boring company steal a star engineer from a hot startup? The answer is: lots of money.

    My point here is this seasoned engineer should not have had a five-figure salary, even if it made sense in a historical context (she had joined as a very junior person, consistent with prior salary). Pay market, or above, as soon as you can. It's a sign of respect. And most of the best ones won't ask. They'll just eventually get frustrated and leave.

    3. It's probably not too late when they interview. So be paranoid--and intervene.

    There are some very tell-tell signs of someone interviewing. They may be out of the office at weird hours. They may be talking on their mobile phone on the sidewalk or in the parking garage and move away from you if you approach them to say hello. You can also see signs of frustration in their posts on Twitter, or in new connections on LinkedIn.

    Now by the time they take another job, it's too late. Even if a raise would work then, which it won't, the relationship is damaged at that point anyway.

    But it isn't necessarily too late when they start to interview. It may be, in its own way, a plea of exasperation as much as anything else. If you can fix whatever is at issue, you can usually keep him or her.

    4. Find a growth path for everyone, especially the great ones.

    You have to find a growth path for the great ones. The great ones will join your company to grow, to learn, to do new things. If they can't grow, they die a little every day. It's your job to understand the career path for all your key employees. And do whatever you can, within the boundaries of reality, to help them achieve it.

    5. Talk to people. Get real feedback at least once a quarter.

    Formal, annual reviews don't work, at least not to combat turnover. You need to meet one-on-one, in an unstructured way, with all your best people--at least once a quarter. Quietly. And ask them what's frustrating them about their job. What they want to be doing--but aren't getting to do. Be friendly--but blunt. You need to learn. Get it out of them.

    You may think if you have drinks together, or socialize together, that you'll know if they're happy. But you won't. Even if people complain in those contexts, it will be general complaints. You won't learn, or know, what your top people need to find their growth path at your company. Where they feel stalled out and frustrated. You have to ask.

    These are just some ideas that have worked well for me, at my companies.

    Because there's absolutely, positively, nothing worse when you're trying to grow quickly than losing a rockstar employee that you could have kept. It just kills you. Later, when you have hundreds of employees, and tens of millions of dollars in revenues, well, you sort of can swap people out, at some level. Including maybe even yourself. Everyone should be redundant at that scale or you've failed as CEO. But until then, every key player is critical.

    If nothing else, treat retaining your top troops at least as seriously as you do recruiting them. And whatever you do, don't ignore the ones that don't complain.



  • America Online co-founder Steve Case answers questions about startups, impact investing, and all those free AOL CDs.

    Reddit’s Ask-Me-Anything with AOL co-founder Steve Case got off to an interesting start, when a questioner said that, at age 15, he had become the target of a federal investigation after he hacked into Steve Case’s online accounts in an attempt to impersonate him. The questioner then took the opportunity to apologize to Case.

    "Yikes!" replied Case. "Well, I'm glad you got this off your chest! :)" Case went on to say that when he first met Mark Zuckerberg, Zuckerberg told him he had learned how to program by hacking AOL's instant messenger service, AIM. "Thankfully," said Case, "rather than focusing on bring[ing] AOL down, he shifted to build Facebook up!"

    The rest of the AMA was wide-ranging, with Case giving relentlessly positive answers to a variety of questions and quite possibly blowing through his entire monthly quota of exclamation points. A number of entrepreneurs asked how to get the attention of Case as an investor, but Case seemed to prefer questions related to his mission with UP Global, a non-profit that aims to empower startup community leaders and entrepreneurs. Here are some of the highlights:

    Advice for entrepreneurs looking to build "100 year" companies: Case compared companies "built to last" with companies "built to flip," saying, "I hope over time more entrepreneurs will … focus on revolutionizing learning or health care or energy or transportation. These are big challenges--and frankly harder challenges--that will require more patience and more partnerships and often more engagements with governments--but ultimately have the potential to have a broader impact on society … So swing for the fences!"

    On the Internet’s role in politics: "We need to use the Internet to rebuild a sensible center in politics. About 30 percent of people say they are Democrats and another 30 percent say they are Republicans. The other 40 percent are independent and want less noise and more compromise. But their voices don’t get heard. We need this "silent majority" to rise up, and the Internet can play a role."

    Advice for recent graduates: "It is going to be more common to jump sectors--maybe starting in business, then going to a nonprofit, or vice versa. So the key is to remain curious, always be learning, and meeting new people. By exposing yourself to people and ideas you maximize the likelihood of bumping into an idea or an opportunity that can change your life--and perhaps also change the world!"

    On the minimum wage: "I lean toward supporting an increase in the minimum wage but I think it is even more important that we take steps to rebuild the idea of the American dream which includes giving people the tools to create better lives."

    On B Corps and investing for social impact: "I'm a fan of B Corps. I think a growing generation of entrepreneurs and investors want to think out of the box and rather than just be focused on profit [or purpose] they'll want to pursue hybrid models. … We believe impact investing is at a tipping point…. Just as we saw startups and venture capital develop over the past fifty years, we think we'll see social enterprises and impact investing develop over the next fifty years."

    "Those discs AOL would send in the mail were so damn annoying:" "Yeah, I know, they were annoying to some, maybe for many. But we also provided a lot of people with a lot of free discs to use for other purposes! And we did help get America online, which was the idea."

    Click for the entire text of the Ask-Me-Anything with Steve Case.



  • What's Trending's Shira Lazar talks to Ben Huh, CEO of the Cheezburger Network, about how his company has evolved with web's demographic trends.



  • You had a great year. Profits are up. But where's the cash to pay the tax bill?

    "I don't get it. You tell me I owe more taxes because I made more last year. So where's my cash?"

    I hear this from my clients all the time. And apparently, it's not just my clients who have this issue.

    A recent Spark Business OmniPulse Survey conducted by Research Now found that only 41 percent of small business owners feel confident that they are maximizing their tax benefits this year. So this is part of the problem. But there are other explanations for why you don't have as much cash to pay your taxes as you thought you did. And no, it's not President Obama's fault. It's not (entirely) due to rising taxes rates, less available deductions and sales taxes.

    So why do you owe taxes when there's no money in the bank? Here are seven all-too-familiar reasons.

    1. You took money out of the business.

    Oh yes you did. Remember? You took a distribution early in the year to pay for that new kitchen upgrade in your home. You took another distribution in the fall to take care of your kid's college bill. And during the year you sneaked out a few bucks through petty cash for "walking around money." None of this is illegal. We all do it. But know that the cash you took was not recorded as an expense on your income statement. It was just a distribution. So your income stayed up, but cash went down.

    2. You bought capital items.

    During the year you bought a few pieces of equipment on sale. You got new computers and tablets for the sales people. You put on a new roof. It's all good and necessary. Except these aren't expenses. They're capital items. The payments went on your balance sheet, not your income statement. You get to take depreciation, of course. But that's spread over a few years, so you're only showing a fraction of the payment you made as a deduction. Even so, the money went out.

    3. You have too much inventory.

    You bought lots of stuff this year. And you intend to sell it. But you haven't yet. It's still sitting there. Not only on your warehouse floor. But on your balance sheet too. So while you wait for the sales to come, the inventory you purchased (and paid for) is a non-deductible expense until it ships.

    4. You have too many receivables and too few payables.

    You know that you're not going to collect that invoice from the firm in Florida who promised payment months ago. You're pretty sure that there are a few other open invoices that are questionable because there were quality problems with the shipment to one customer and another customer had concerns about the service. This happens. And whether you're right or wrong, you're still owed the money. Meanwhile, you're paying your bills, right? You make it a practice to meet your obligations in under 30 days so that you've got a good relationship with your suppliers. And that's a good way to be. But not if you're trying to conserve cash.

    5. You have debt.

    You own your building. That's good. You got it for a great price last year, and now you're paying rent to yourself. But now you've noticed something: Rent is deductible. Mortgage and other debt payments are not. Interest expense is showing up on your income statement. But your principal payment is not. So your cash is going down each time you make that payment. The real estate market might be giving you some benefit. But the IRS isn't.

    6. You're not putting money away for retirement.

    You can take significant deductions if you just make payments into a retirement plan, like an SEP (Single Employer Pension), 4019k) or even an IRA. But you're not doing that. You're concerned that once you make this payment you can't get access to the money until you retire. (That's not entirely true. You can withdraw the money if you're willing to pay a hefty penalty. You may be able to borrow against it too). Making a pension payment not only reduces your income (and your tax bill), but is also akin to paying yourself. You're just moving money from one account to (albeit a more restricted) another account. You need to do more of this in 2014.

    7. You mismanaged your estimated tax payments.

    Last year your accountant told you the minimum quarterly payments to be made during the year, and you did what she said. But these aren't deductible. You, like most business owners, probably file an S-Corp return, which means you had to withdraw cash from the business (like a distribution to yourself) and then personally pay in your estimates. The cash came out. But your current year's earnings did not go down.

    Now what if you did not pay enough in, even if you made your estimates on time? You failed to meet with your accountant during the middle of the year to see if your estimates should be adjusted. You paid a couple of your estimates late, incurring penalties. And your files are mess. You may be one of the 22 percent from the previously mentioned survey who filed for an extension because you needed more time to get everything together. Underpayment, late payments, disorganization ... it all results in more cash outlays than you planned.

    See? You did have a good year last year. You showed profits. But showing profits doesn't always mean you've got the cash left over to pay your taxes. And this past year you were short on the money.

    Now that you have this explanation don't you feel better? Yeah, me neither.

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    Mark Verge will be speaking at Santa Anita Race Track; this will be our first monthly

    meeting with different speakers each month to help inspire your entrepreneur spirit.

     June 2, 2012

    Santa Anita Race Track | 285 W Huntington Drive, Arcadia CA 91007

    2PM - 4PM

    $10.00 per person | Please RSVP (limited seating available)

    E-mail RSVP | info@perfectbusiness.com or call 310-255-7940

    Perfect Business is founded by serial entrepreneur Mark Verge, whose vision is to share his business knowledge with entrepreneurs who may be just starting out, as well as seasoned business owners who may be struggling in today’s challenging economy. As part of the Perfect Business mission, Mark actively volunteers his time performing speaking engagements for high school and university students.