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

    1. Attention, App Developers

    Dropbox has been quietly snatching up small app platforms to help the cloud storage company become more of an app platform itself. Recent acquisitions, which have happened at a rate of roughly one per month, include Loom, Zulip, and Hackpad, among others. App developers eyeing an exit strategy might want to try to get on Dropbox's radar.--Re/code

    2. A Wall in Berlin

    Doing business in Europe has been a challenge for tech companies such as Google and Facebook, who've faced scrutiny and fines in the past. The latest Bay Area company to face rebukes abroad is Uber: A Berlin court banned some of its services, saying the company didn't have approval to operate there, and threatening drivers with $13,800 fines.--The New York Times

    3. Shooting for the Moon

    Think you have a big idea? Check out Swedish company Brighter Moon, which has secured $52 million in funding to, wait for it, make the moon brighter. The startup claims it can save the world billions of dollars in electricity by placing highly reflective material on the moon's surface. Is it real or a hoax? Keep an eye on this one.--Mashable

    4. Divorcing Your Co-Founder

    For couples who have started companies together, the end of their marriage doesn't necessarily have to mean the end of the business. Here's how ex-husbands and wives can make a post-split professional relationship work.--NPR

  • Companies making a trade-off between user protections and revenue are still coming down on the wrong side of the privacy debate. And soon they'll begin to pay for it.

    Last October, Facebook drew fire for allowing teens to post publicly for the first time. Critics blasted the social network for "(monetizing) kids and teens." Newsflash: Facebook has been and will continue to monetize every living being on its platform. And that makes Facebook no different than all of its capitalist predecessors; making money is not the real issue here.

    No, what we should hold Facebook accountable for is its too-slowly-evolving stand on privacy.

    Opening up Facebook is the right thing to do, but it's also complicated because doing so means the social network (and others like it) must do a better job of educating users. They must have a clear-cut privacy product. I don't mean a shortened privacy statement, but a product that clearly and succinctly states what piece of data is being used for what.

    On a very simple level, any social network should have a 'take me private' button -- one that shuts out the world -- and another that lets only specific connections see specific things. The default setting should border on obsessive -- what's shared should be in the hands of the user, not the network. Terms of data use should address actionable choices the user has made to share information, not a way of legally covering the company in the event that something bad happens.

    This isn't to say that social networks haven't become more privacy-friendly with their settings, but we're far from a point where it's easy to shut out the world.

    The obtuse crystallization of this lack of product privacy is internet security company AVG's PrivacyFix. PrivacyFix is essentially a sophisticated Chrome plugin that tells you exactly what your Facebook, LinkedIn and Google+ pages are sharing, and what potential mistakes you're making with your privacy. While this is an excellent and easy-to-use product, it's also ludicrous that it has to exist.

    Facebook, Google, LinkedIn and other companies are leaving traffic (and money) on the table because they don't want to commit to a privacy-focused product. Their anxiety could be that the virality of content on Facebook will be stifled by easily letting people control the privacy of their platforms. Twitter, which has a borderline binary way of controlling privacy (Your tweets are private, not private, or directed at one user), still has over 240 million monthly active users, which pales in comparison to Facebook's 1.3 billion.

    However, judging by Facebook's creation of embedded posts to compete with Twitter's embedded tweets, there's a clear interest in tweets' immediate public impact.

    The truth is that if Facebook (and other networks) could solve the problem by dropping the "everything is public" mantra entirely and making it very clear what's being posted publicly or privately. Having a vague tab that says a few different things (public, friends, etc.) isn't obvious enough -- make the button say where the post is going. Instead of having the privacy button hidden at the top right in a small, non-specific icon, why not a "privacy" tab underneath "messages" -- or even under "edit profile"?

    The answer may not be as simple as greed, but the anxiety of a public company over its revenue stream. With a potential exodus of teenage users to messaging apps, and an initial worry over revenue generation via mobile (which they have now righted), Facebook could be desperate to keep making money and continue to make privacy missteps.

    We the people need to hold them accountable, and not accept vague privacy policies as an excuse for making people’s information public or private when they want it to be.

    Obfuscating privacy settings is not a trick that will work in the long run - and while Facebook may currently be the king of the social networks, it only takes a few missteps to fall. Just look at MySpace.

  • Molly Graham, who was once tasked with helping Facebook to define its company culture, talks about what she learned from the job.

    For founders, defining company culture is really an exercise in self-awareness.

    Ask yourself: What are your strengths? What makes you different from everyone else ambitious enough to start a company? What are you terrible at?

    This introspection is important because it will offer an almost exact preview of how your company will operate down the line. Founders have demonstrated time and time again that the essence of your grown-up company is going to reflect your own key traits.

    For example at Amazon, CEO Jeff Bezos' competitive nature and his tendency to move fast has extended to almost every level of the 97,000-person company. Similarly, Airbnb co-founders Brian Chesky and Joe Gebbia hail from the Rhode Island School of Design, which explains why the company has stuck tightly to its design focus over the years.

    "Eighty percent of your company's culture will be defined by its core leaders," says Molly Graham, head of business operations at word processor company Quip. Graham was previously Facebook's director of mobile, and was tasked with helping the company define its culture when she came on in 2008.

    In a recent talk at First Round Capital's CEO Summit, covered on First Round's blog, Graham spoke about how an early list of values laid down by Facebook CEO Mark Zuckerberg has guided the way the company has hired for years.

    'One of Us'

    In 2008, Facebook had 400 employees. As Graham tried to draft a company-culture description, which would help them acquire new like-minded hires, she was at a loss. She realized she was writing down the same boring and cliché descriptors--like "fast learners" and "team players"--that everyone else was using.

    Luckily, she found out that Zuckerberg had already captured a lot of what she really needed to say. When the company had first started to grow, Zuckerberg jotted down a list of what it meant to be "one of us." Deeply familiar with his own values, he was easily able to articulate the ones he wanted to see in the members of his company. Zuckerberg's list of desirable attributes:

    • A very high IQ
    • Strong sense of purpose
    • Relentless focus on success
    • Aggressive and competitive
    • High quality bar, bordering on perfectionism
    • Likes changing and disrupting things
    • New ideas on how to do things better
    • High integrity
    • Surrounds themselves with good people
    • Cares about building real value over perceived value

    Graham said she was impressed by how honest--and even controversial--the list was. But the list, written in 2006, stuck. And it has continued to shape much of the philosophy behind Facebook ever since.

  • What the entrepreneur and his team gleaned from introducing students to the lean startup model

    Our Stanford and Berkeley Lean LaunchPad classes are over for the year, and as usual we learned as much from teaching the teams as the teams did from us.

    Here are a few of the lessons learned from the two classes.

    Have each team talk to 10 customers before the class starts

    Each year, we learn how to move more of the Lean LaunchPad class logistics outside our classroom so teams have more time for in-class learning.

    A few years ago, we moved the formation of teams to before the class started, and in doing so, saved a week of what normally would have been class time. To make this happen, we held three information sessions two weeks apart before the class started. In these info sessions, we described the purpose of the class and then let students mix, meet, and form teams. During this preclass time, we shared a Google Doc in which students who had ideas could find other team members. Students without an idea could find a team that matched their skills and interests. Application and admission into the class was by interview with a fully formed team.

    Info session announcement (click to enlarge)

    The next thing we learned was to make applying to the class an integral part of the learning process. Teams applied by filling out both a business model canvas and a competitive petal slide. Having the teams do this accomplished three things. First, it forced the students to read and understand "what's a business model canvas" before they even came to class.

    Team application: business model canvas

    Second, the competitive slide enforced a modicum of due diligence on the product and market. We got tired of knowing more about a team's market by doing a Google search as the team presented--so we made it a team's job.

    Team application: competitive petal slide (click to enlarge)

    Finally, having teams spend time on the canvas and competition as part of the application process saved weeks of what would have been class time (and as a bonus gave the team a heads-up about the difficulty of the class and showed whether the team members were serious about the class or just shopping).

    This year, we learned to raise the bar once again. Could we get the teams to come into class having already talked to 10 customers? Instead of using the first class to have teams just present their business model canvas, this time the teams' first presentation was about what they learned outside the building about their value proposition. We pointed them to our tutorials on customer discovery and how to conduct customer interviews but didn't expect them to be experts in Week One.

    1st-week team title slide--11 interviews before class started (click to enlarge)

    We did an A/B test when we required our teams in one school to do this while we didn't require it for the teams in the other school. The result? Teams that had to talk to customers before the class hit the ground running. There was a substantive difference in team trajectory and velocity that continued throughout the quarter. The amount of learning between the two felt quite different. Though there may have been other factors (team selection bias, team makeup, etc.), we'll now make this an integral part of all the classes.

    Have each team put the number of mentor interactions on its weekly title slide

    The second innovation this year involved mentors. Each team was assigned a mentor as a coach. We've been trying to figure out how to make mentor engagements with their teams a regular rather an ad hoc activity. Though we have required the teams to add a summary of any mentor interaction to their LaunchPad Central narrative, we felt we didn't have sufficient high-level visibility for these essential interactions.

    (Click to enlarge)

    But this year, a seemingly minor change to the teams' weekly cover slide had an important impact. As teams presented each week, their cover slides showed the number of customers interviewed for that week (>10) along with the cumulative customers interviewed. This year, we added one more metric for their cover slides--the number of mentor interactions for that week (>1) along with the cumulative number of mentor interactions.

    This enhanced the visibility of the teams' interactions (or lack of) with their mentors and allowed us to intervene early if there wasn't sufficient interaction.

    Here are a few of the Final Presentations (see here for all of them)

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  • In its three-year lifespan, Aereo has angered all the major TV networks, major-league sports, and the government. Here's a portrait of the scrappy company--and its audacious CEO--that could change American television as we know it.

    Chet Kanojia peels the wrapper from a piece of nicotine gum and stares calmly into the middle distance. He seems unfazed by the DJ beats or the commotion. Or the fact that he's just been interviewed about his company in front of a couple hundred tech enthusiasts in an Austin bar at the South by Southwest Interactive festival, where half the audience was concerning itself with throwing back tequila, searching for the free T-shirts, or exchanging business cards. His is the still gaze of a man who has achieved much and yet has enough on the line for it to matter. Just 45 days after this event, Kanojia will have to defend Aereo, his ambitious tech startup, in front of the U.S. Supreme Court.

    From Day One, Kanojia anticipated that the fundamental idea behind his company--which streams TV-network programming to customers' computers--could rattle the establishment. He built the company anyway. As CEO, he has propelled Aereo's rapid expansion into 11 cities, attracting nearly $100 million in funding in the process. For most of Aereo's three-year lifespan, the little, 115-person company has been under legal assault by the same media titans that urged the Supreme Court to take up the case: Disney/ABC, CBS, NBC, and Fox, among others. The case is expected to yield a landmark decision not just for Aereo but also for the future of American television as we know it.

    Since it first launched in New York City in 2012, Aereo has changed the way people watch TV. Its customers can watch about 30 channels of network programming on a computer or mobile device. It's a dream for cord cutters who miss sports games or the occasional morning show, and it isn't just for real-time viewing: Aereo uses the cloud for DVR-like storage. At about $10 a month, subscribing to Aereo is a fraction of the cost of a cable package from a major provider.

    The establishment is fuming--and crying copyright foul--because Aereo doesn't pay a penny for the content it streams to customers. The crux of Aereo's legal arguments is: Why should we?

    "We're perfectly within the law," Kanojia says. "We have been accused of overengineering our system purposefully to comply with the law. What's wrong with that?"

    Aereo's innovative (or exploitative, depending on which side you're on) solution to bringing broadcast programming to the smaller screen involves taking the antenna out of the home. The company provides a tiny, half-inch antenna for each subscriber. Broadcasters call the fact that these mini antennas are located on rooftops rented by Aereo, rather than in American homes, a "loophole" in the law that Aereo is exploiting. The broadcasters claim the startup's method of streaming content amounts to an illegal "public performance" of the material.

    Kanojia sees it differently. He and his investors--including Barry Diller, the mogul responsible for creating Fox Broadcasting--argue that simply because the ways television networks make their money have changed over the past few decades, it doesn't mean they get a "do-over" when someone builds a more efficient system. (The major networks have become increasingly dependent on fees paid by cable and satellite companies to carry their programming.)

    The first lawsuit came four weeks after Aereo launched its service. More suits followed in other states. Most judges have sided with Aereo so far, but most recently, bad news came from Utah, where a federal appeals court upheld a U.S. District Court injunction against Aereo. The service went dark in its affected markets, Denver and Salt Lake City. When the networks petitioned the Supreme Court, Aereo's reaction was: Bring it on.

    If it sounds a bit unhinged to risk the fate of the company on a single day in court, consider the alternative: litigating lawsuit after lawsuit in every new place Aereo launches. "We can't do death by a thousand cuts," says Kanojia. Now, he's in the unenviable position of pursuing the very decision that could instantly bring down his company. Remarkably, he's not outwardly rattled. "He's a steady hand on the tiller," says Aereo investor Dan Nova of Highland Capital Partners. "Very calm under pressure."

    Kanojia, who grew up in Bhopal, India, learned early that life can change in an instant. When Kanojia was 10, his father suffered a heart attack that left him unable to work for years, crippling the family's finances. Kanojia says this informed his thinking, to always have a "Plan B and Plan C. And D."

    Kanojia moved to the United States to study engineering in 1991. In 1995, around the time Netscape went public, he struck out on his own. "I had that star in my eye," says Kanojia, now a U.S. citizen. "Every punk who could write two lines of code was going to be the next Marc Andreessen or Bill Gates." His first company, Navic Networks, which developed technology that allowed cable companies to collect data on subscribers, sold to Microsoft in 2008 for a reported $250 million.

    Venture capitalist Amish Jani made one of his first investments in Navic. Now managing director at FirstMark Capital, Jani says funding Aereo was a no-brainer. "He's incredibly motivated," Jani says. "Maybe it's the immigrant effect, but there's not a lazy bone in his body."

    Kanojia and his team designed the antennas and engineered the hardware and software that make Aereo's service work. For most of Aereo's short life, it has had all the growth challenges of a typical startup: the iterating, the rapid hiring, the pressure of product launch after launch. And, well, that little litigation problem.

    Legal experts have speculated that by taking up the case, the Supreme Court is raising an eyebrow at Aereo--and might be concerned that the broadcast networks are in danger. And the networks have a powerful slate of friends: Filing supporting briefs to the court are the National Football League, Major League Baseball, the Screen Actors Guild, and even the U.S. government.

    It's natural to think that Aereo's Plan B might be an acquisition by a major cable company--or even one of the networks trying to shut it down. Sitting in a tiny conference room in Aereo's New York City office, Kanojia scoffs at the idea of accepting an acquisition offer at this point in the company's life: "I look at where we are now, and it's probably the first half of the first inning."

    He'll soon know whether there are more innings in this particular game. I mention this, but Kanojia refuses to get riled up, or to acknowledge whether he does have another plan--a Plan C or Plan D--tucked away. Instead, he cracks a smile and leans back.

    "To go from doodling on the back of a napkin three years ago to center stage in national policy and this level of consumer passion?" he says. "You couldn't write the script any better."

  • When an employee has the courage to give you negative feedback, you need to accept it as a gift.

    It's tough to receive negative feedback, but as a leader you must treat it as if it were a fine wine. Once the cork is out of the bottle, you need to identify its nuances and understand its valuable characteristics.

    Roger Schwarz, an organizational psychologist and leadership consultant, says you must be open to listening to employees when they tell you things you're doing wrong. As uncomfortable as it may be to hear it, he says, the criticism is a "not-so-nicely wrapped" gift. "Effective leaders open these gifts, regardless of the wrapping, to learn what they are doing that's negatively affecting others on their team," he writes in the Harvard Business Review.

    Schwarz, who is also the author of the book Smart Leaders, Smarter Teams: How You and Your Team Get Unstuck to Get Results, says the worst thing you can do is to dismiss the feedback or ignore it. Instead, take the opportunity to learn something valuable and improve your leadership skills. Here are his tips on how to do that.

    Realize you feel threatened.

    Schwarz says when an employee says something negative about your leadership, you'll immediately get defensive. But before you respond, recognize these feelings. "Notice when people say things that lead you to feel upset, surprised, or threatened," he writes. "When you feel this way, there is a good chance that you've just been given a gift that's poorly wrapped."

    Find the gold.

    It may not feel good, but there's a valuable lesson behind the criticism. The employee may be blunt or inelegant, but the delivery is unimportant. "When you focus on how the gift was delivered, it's easy to dismiss it as off-topic, ungrateful, or whiny," Schwarz writes. "But rejecting a gift doesn't make the underlying issue go away; it just prevents you from becoming aware of it and being able to address it. There is a Talmudic saying, 'Who is wise? He who learns from everyone.' Suspend your judgment about the wrapping, and focus on your opportunity for learning."

    Be curious.

    When it's time for you to talk, your response should elicit more explanation. Get to the root of the complaint and try to find out more. "This leads you to open the gift by saying something like, 'I thought I was fully supporting you, but it sounds like I wasn't. What was I doing--or not doing--that you thought wasn't supportive?' When you respond with curiosity and compassion, you learn things that people were previously unwilling to discuss with you," Schwarz writes. "Discussing these previously un-discussable issues enables you to solve problems that were previously unsolvable."

    Foster trust.

    If you follow these tips, you'll be giving a gift back to your employee. Accept the gift of criticism and be curious and compassionate--no one wants to work for Blake from Glengarry Glen Ross. "You are creating the trust needed to talk about things that really matter and that will lead to better results," Schwarz writes. "This type of gift is priceless."

  • Even more employees leave before the end of their first year.

    Forty percent of employees who left their jobs voluntarily in 2013 did so within six months of starting in the position, according to data recorded and processed by the work-force insights arm of credit-reporting agency Equifax.

    And another 16 percent of all employees who left on their own choosing did so within 12 months, meaning more than half of voluntary turnover happens within a year of new hires' start dates.

    Equifax Workforce Solutions director of product Kristen Lewis tells Inc. that many employees approach new jobs with the belief that "they can find something else if it's not a great fit right away."

    The rate at which employees left inside of six months was about twice as high for employees paid hourly than those who pocket a salary.

    However, Lewis says, that doesn't necessarily mean finance was a driving factor of employee movement. Only a slight majority of employees who left voluntarily did so for greater pay, with 44 percent staying even or taking a pay cut to switch positions. "It supports the concept that culture and opportunity play a big role," Lewis says.

    A cut in hours for hourly employees, meanwhile, makes a big difference in when they'll eye the door. Lewis said Equifax's data shows that for every four hours cut from an employee's schedule, there's a corresponding 5 percent jump in the likelihood he or she will take a new gig.

    The idea that fast voluntary turnover--that is, turnover after less than a year on the job--is higher for hourly employees might call to mind transient industries such as retail and restaurant work, the kind of job that's dominated by hourly work. And indeed, more than 64 percent of new hires in retail and about 66 percent of those in leisure left in that time frame.

    Likewise, the business services industry--largely composed of temporary staffing--sees 65.7 percent of new employees move on within a year.

    However, even though the numbers are lower, they still might surprise you in other, more stable industries.

    More than half of voluntary turnover in the transportation industry happened in less than a year. In the information industry, that number is about 43 percent. In financial services, 37.5 percent. In health care, nearly 37 percent.

    And across all industries, employees are more likely to leave voluntarily inside of their first six months than in months six through 12.

    Voluntary turnover in general was up 3.5 percent in 2013, according to Equifax. The Department of Labor has also seen a recent increase in the "quit" rate, according to the The Wall Street Journal.

    Voluntary turnover is generally lauded as a positive sign for the economy, indicating that enough jobs are out there to allow employees to hop around the market. And many companies embrace the idea of being net exporters of talents, as a positive sign of their ability to nurture talent.

    But even with those optimistic qualifiers, you would probably like to get at least a little bit more than a year out of your new hires.

    So you might want to check out Inc. columnist and HR expert Suzanne Lucas's pointers for keeping turnover low.

  • Leading up to oral arguments before the U.S. Supreme Court, the scrappy company that brought broadcast channels to computers through the cloud, explains itself.

    As the days tick down before Aereo presents its case to the U.S. Supreme Court, the company is going on the PR offensive.

    On Apr. 17, the New York City-based startup launched to inform users about the tech behind the company's Internet-TV streaming. It reads: "Aereo's technology provides a consumer the ability to use a remotely located individual antenna to access free-to-air broadcasts, make a personal copy of a program on a remote DVR, and play back that copy only to him or herself. Using the cloud, Aereo was able to develop a smarter, more sophisticated antenna, purpose-built for the 21st century consumer."

    High Stakes

    The case before the U.S. Supreme Court on April 22, American Broadcasting Companies, Inc. v. Aereo, Inc., is expected to yield a decision that's fateful not just for the existence of this scrappy, 115-person company but also for the future of America's broadcast airwaves--and possibly for cloud computing, too. The broadcasters argue that Aereo's act of streaming content through the cloud constitutes an act of "public performance" of copyrighted material. It's natural to wonder: What else do we access through the cloud that could be affected by this ruling?

    Not only are the stakes high leading into Tuesday's arguments and the following deliberations, but the decision is highly uncertain. As Jonathan Handel wrote Apr. 15 in The Hollywood Reporter: "The case is so complex and the copyright and communications statutes so intricate that one advocate said the decision could end up as lopsided as 7-1--in either direction."

    There was concern that the Court's decision could be locked in a 4-4 tie, because Justice Samuel Alito had recused himself from participating, possibly due to he or his family owning stock in a litigant. But this week in a surprise move, he reversed that, and his renewed participation is listed on the case's public docket as of Apr. 16.

    You can read more of Aereo's argument here.

    And here's the brief filed by the broadcast establishment, including ABC, CBS, NBC, and Fox, among others.

    Check out Scotusblog for more documents, including amici briefs, as well as the briefs of the petitioner and respondent.

    Also this week, Aereo gave TechCrunch a look at its rooftop antenna farm in Boston. It's not much to see from the outside, as the thousands of tiny antennas and their antenna boards, and the shelving units that hold them, are all encased in a 10-foot-wide beige plastic box. Yes, it's not even translucent, but the signals can travel through it.

    I spent a lot of time with Aereo CEO and founder Chet Kanojia while reporting a feature on the company that will appear in the May issue of Inc. magazine. We'll publish that piece online shortly, so stay tuned.

    Update: Here's the feature, "This Startup Is Shaking TV Networks--All the Way to the Supreme Court."

  • Here's how you can help your team sell smarter.

    If you have trouble keeping up with the latest tools and strategies your sales team should have in its arsenal, you're not alone. On behalf of software corporation SAP, Column Five created the below infographic, a roundup of the best ways you can help your inside sales team optimize its efforts.

  • The rock legend's PonoPlayer portable music device raised $6.2 million, becoming one of the most successful campaigns ever on the crowdfunding website.

    Neil Young is on a mission to rescue the art of recorded sound, and thanks to his recent Kickstarter effort, he might pull it off. His widely publicized campaign for the Pono music player, a portable device that aims to deliver sound as rich as your grandfather's vinyl, generated $6.2 million in pledges on the crowdfunding site--no small feat for a startup helmed by a guy known far better for his songwriting ability than his business prowess.

    But there it is, plain as the Guardian headline that announced the news Wednesday: Neil Young's Pono is the third most-successful Kickstarter campaign ever in terms of money raised, trumped only by the Pebble smartwatch ($10.3 million) and the Ouya game console ($8.6 million).

    How did the startup, which PonoMusic CEO John Hamm once dubbed one of the "worst-kept secrets in the world," thanks to a reveal on David Letterman's Late Show, take Kickstarter by storm? With star power, obviously. But more than that, it took an entrepreneurial mindset.

    The Startup That Wasn't

    The story goes that Young heard his songs on a CD for the first time in 1982, around the time the discs were first coming to market. He was disappointed at how bad they sounded; he didn't hear the plainspoken folk songs he'd played, but something much flatter and more condensed. The sound lacked the soul of his music.

    As he told Mashable, he grew even more disheartened as the industry shifted to MP3 downloads and streaming music and the fidelity worsened. Meanwhile, Apple's iPhone was quickly becoming the go-to music-listening device and no one seemed to notice the problem.

    "People started buying their music through their devices, and the fact that you could get so many songs on the device had a blinding effect on consumers. They realized, 'Whoa, I can get all these songs; it's so great.'" Young told Inc. in an interview earlier this month. "After a while, it dawned on them that the music was slightly compromised. Some of the depth was lost."

    By the early 2000s, Young believed there was a business opportunity to restoring quality sound. He began to tinker with the project that would eventually become the three-sided PonoPlayer (pono means "righteous" in Hawaiian) and gathered a board of advisers to help. Young even met with Steve Jobs, but says he found the late Apple founder more interested in his iPod than with recreating authentic sound.

    A couple of CEOs came and went on the project without fanfare. Then in October 2012, Young's fledgling Santa Monica startup, then called Ivanhoe, raised $500,000 from an undisclosed investing group, solidifying PonoPlayer's potential as a hardware disrupter. Young also put his extensive Rolodex to use, tapping friends such as John Tyson of Tyson Foods for angel investments. Soon Ayre Acoustics was on board to help manufacture the device, and Pono began to truly take shape.

    The company "got a lot done on that money; we built a prototype player and got our music label contracts done," Hamm told Inc. in a recent interview. But in many respects, the company was at the point "where Neil needed to make something of it." Hamm joined the company after becoming acquainted with Young through a board member. But it would take time--and many failed prototypes--before either Hamm or Young felt satisfied.

    At one point, Hamm says, "we had to stop and start the player design," as well as adjust plans for Pono's online marketplace, which will function much like iTunes but with a broader array of studio master-quality recordings. (It's set to launch sometime this year.) "We wasted a little bit of engineering time, rewrote the firmware," Hamm continues. But overall, "we kept evolving, figuring out ways to make it better."

    Today, Pono is a full-fledged business with a product, a vision, and as Young puts it, soul. The device has 128 gigabytes of memory (good for storing from 1,000 to 2,000 digital albums), comes in black or mustard color, and retails for $399. And of course, as listeners attest, it sounds really good.

    A Star-Studded Kickstarter

    "That's the best sound I've ever heard in a car ever in my life; as a matter of fact, it might be some of the best sound I've ever heard," David Crosby says in the Kickstarter video as he exits Young's boat-size Cadillac Eldorado. "It's starting to sound like an amazing, warm, dynamic analog recording," says a beaming Chris Robinson, the Black Crowes's frontman, at a concert. "It's vinyl quality," says a young music fan. Chimes in another: "Yeah, it's a lot different than, like, a regular iPod. It sounds like I'm actually there."

    On March 15, Young began taking discounted preorders for the music player on Kickstarter. Within a day, it reached its $800,000 funding goal, powered by the celebrity-filled video. The wow factor the artists project when describing the PonoPlayer's sound also proved effective--so many of them seem so astonished by what they've just heard that you can't help yearning for that feeling.

    Perhaps the best testimonial of all comes from Dave Grohl of the Foo Fighters, who hops in Young's car for a listening session. On rotation: Aretha Franklin's "Respect." The car windows rattle and the bass is insistent, turning the vehicle into a concert on wheels. "You could definitely hear that it's not as compressed so that music can open up a little bit wider," Grohl says later while lounging in his tour trailer. He stretches his arms to convey what what he means: This sound is really huge.

    "There are a lot of people who miss music," Young said of the Kickstarter success. "They miss hearing it and feeling it. There's a magic in music that's missing when you take away 95 percent of the data. That's what an MP3 is."

    Vickie Nauman, the North American president of 7digital, a digital music distributor, offered a different take. "First and foremost, Neil Young is very authentic, and people respond well to authenticity," Nauman says. "It's rare these days. Second, the Pono story of 'hearing music as the artists intended it to be heard' brings the artist back into the dialogue, and fans care about the artist. And finally, the message about higher-quality audio is also timely--music fans are demanding better-sounding audio."

    The third point may be what sets Pono apart from other music startups, even those like Beats that use sound quality as a selling point. "Beats is basically an earphone with a bass boost in it," Young says. "It gives you that fat sound, and it's a good sound. But you can plug into Pono through a Beats set of headphones. You can play Pono through anything. Pono is music that you buy. Beats is a pair of headphones and a streaming service."

    Not that Young is averse to a little competition: "We will [make] whatever set of headphones you want to see," he says. "The better the headphone, the better the Pono is going to sound."

    Whether delivering superior sound will attract a critical mass of customers remains an open question. "Convenience trumps quality," James McQuivey, VP and principal analyst with Forrester Research, tells Mashable. "It's why MP3 works. It's why streaming works." At nearly $400 for the hardware (song and album prices have yet to be determined), Pono may remain a niche business that caters mainly to die-hard music fans. But it could still be a very lucrative one.

  • An expert weighs in on the elements that separate a great brand emblem from a forgettable one.

    Every day consumers are confronted with countless logos but remain mostly unaware of how these icons are constantly transmitting a slew of messages aimed at the subconscious.

    "A company's logo is its shorthand, a visual cue that tells a story of the brand's culture, behavior, and values," said Su Mathews Hale, a senior partner at the New York brand-strategy and design firm Lippincott. Because a logo may only have a second to tell this story, creating one "can sometimes be the most difficult aspect of branding," she says.

    We had her guide us through some of her favorite projects she's worked on, as well as some of the corporate logos she most admires.

    Walmart Stores

    In 2005, Wal-Mart, as the company then styled itself, recruited Lippincott to reimagine its brand. It wanted to shed its image as a big corporate outlet for cheap products and become seen as a place where people could wisely save money and buy premium groceries. The corporation debuted its new logo in 2008.

    Mathews Hale and her team felt that the old logo's all-caps, dark blue letters screamed "corporation" and had become inextricably linked to the popular view of critics who saw Wal-Mart as a malevolent giant crushing small businesses across the country. They deemed the star that served as a hyphen in its logo generic and forgettable. They also believed that businesses with hyphenated "mart" names conjured up images of corner stores and cheap outlets, hence the new styling, Walmart.

    They decided to keep the color blue, which Mathews Hale calls the world's favorite color, but to go for a brighter hue they believe evokes modernity and trustworthiness. They replaced the sharp angles of the original letters with "a more humanistic font." Finally, they decided on an asterisk-like symbol that looks like "a light bulb going off in your head," a metaphor for Walmart shoppers being smart for taking advantage of affordable, quality products. They chose a hue of yellow that appears hopeful but didn't make it too bright because "bright yellow is associated with low-cost items in retail," says Mathews Hale. She was happy to find that focus groups also interpreted the spark as a sun or flower, both positive associations.


    In 2012, eBay basically had the inverse problem from Walmart: It wanted to finally grow up, and its playful logo was getting in the way of its ambition. Mathews Hale says that when Internet companies have electric, jumbled logos, they conjure up memories of the companies that died when the dot-com bubble burst. So for eBay, she and her team stuck close to the original design but refined the typography, toned down the colors, and put the letters on the same baseline. The resulting logo is "more grounded" and better suited for a company that takes business seriously, Mathews Hale says.

    Hyatt Place

    Hyatt Hotels Corporation bought AmeriSuites in 2004, and Lippincott was responsible for rebranding the chain as Hyatt Place, which launched in 2006. Hyatt and the designers believed that AmeriSuite's affordable business-suite market was beginning to be seen as a boring, cheap alternative to upscale hotels. The way to turn that perception around, the company believed, was to make the suites seem like a good option for younger business travelers who may not be very wealthy but who still appreciate luxury.

    A fundamental component of the relaunch was to give every Hyatt Place an attractive, engaging lobby. The final logo combined two different shapes: In design, says Mathews Hale, "a circle tends to be seen as modern and approachable" and "a square tends to be steadfast and disciplined." The design team chose vibrant colors for seven of the circles and picked black for two. When Hyatt Place signs are illuminated at night, the colored circles create an "H" for "Hyatt," which Mathews Hale finds to be a fun, extra dimension of the logo.


    Over the past several years, Starbucks has grown into a global powerhouse and has been heavily promoting its non-coffee products, such as pastries, sandwiches, and teas. In 2011, it decided it wanted a simpler logo not tied to the word "coffee." Mathews Hale wasn't involved in the project, but her Lippincott colleagues were.

    The redesign started with a basic premise. When focus groups were asked what color Starbucks' logo was, explains Mathews Hale, participants almost universally said "green." But the thing is, only the ring around the former logo was green--the siren character was outlined in black. Mathews Hale says the designers freed the siren from her constraints and imbued her with the color with which customers were already associating the brand. They nixed the word "coffee" and brought the text outside of the circle, since the siren had become iconic enough to stand on her own.

    "It's a great example of how a logo can evolve," says Mathews Hale.


    Lippincott hasn't worked with NBC, but Mathews Hale says the NBC peacock is one of her favorite logos. She thinks the logo has improved and grown simpler over time, and that even though the peacock's colors originally celebrated the advent of color television, the array still transmits feelings of joy and energy.


    FedEx's logo is another one of Mathews Hale's favorites. As shown by her work with the Hyatt Place logo, she likes images that have surprises in them, and the arrow formed by the "E" and "x" in FedEx is one of the best-known examples. She also appreciates the timeless nature of the logo. "It could have been designed in 1970 or it could have been designed yesterday," she says.

    It was actually created in 1994 by Lindon Leader, and it has won more than 40 design awards, partially for the reasons Mathews Hale mentions.


    Mathews Hale thinks Apple's emblem is a perfect example of how a logo needs to adapt to the changing direction of the company it represents. One of Apple's co-founders, Ronald Wayne, designed the first Apple logo, a weird, detailed etching of Sir Isaac Newton that was supposed to represent Apple as an ambitious outsider. That same year, Steve Jobs hired Rob Janoff to replace that image with something more modern. Janoff came up with the now iconic image of an apple with a bite out of it, and Jobs decided Apple's unique approach to computers would be represented by making the apple rainbow-colored.

    It became monochrome in 1998 to fit into the clean, simplistic designs that the company decided to pursue.

    Regarding trends and presentation

    When tackling a branding project, Mathews Hale differentiates between the "true and new." She says a logo needs to be "true," in the sense that it should not be fundamentally tied to a trend, or the "new." The trendiness is more appropriate in supporting elements of branding, like store experiences or website interfaces. That said, a logo should be fundamentally sound but also be adaptable to the ways it will be presented.

    "Logos used to have to be recognizable down to the size that they would be represented on a business card. Now they have to work at much smaller sizes, because they'll be seen on mobile screens," Mathews Hale says. That's actually the reason why so many logos have become "flatter," in the sense that they've been stripped of techniques such as shadowing that add a dimension of depth or movement.

    Here's an example of how Google went flat last year:

    "I personally like more simple designs," says Mathews Hale. "Gradients are my worst nightmare."

  • Kids make mistakes. Parents won't let go. Everyone suffers.

    "What's wrong with family business? The family."

    So says New Hampshire attorney John Hughes, who frequently counsels clients on succession planning. John tells me he has seen "way more failures" than successes when it comes to bringing children into a business. Paul Karofsky, a family business consultant, puts it even more bluntly. A dysfunctional family enterprise, he cautions, "is like no other hell on earth."

    Given the poor odds of a successful transition to the younger generation, why would any company owner consider it? Well, most entrepreneurs spend their lives nurturing two things: their companies and their kids. So it's natural to want to pass one down to the other. On the practical side, family companies are ideal vehicles for transferring knowledge and experience to offspring. They provide welcome employment and leadership opportunities and can act like domestic magnets, pulling family members together. And, of course, there's great pride in perpetuating a family brand.

    For most families, the process of transitioning to the younger generation is a mixed bag. Gloria and Dave Sharrar founded Richmond, Virginia-based CityParking in 2004. Two years ago the Sharrars' son (who shares his father's name but goes by David), took over as CEO, and Dave transitioned to chairman. David's sister, Katie, also works in the business. Together, the siblings own 40 percent of the company, with plans for their shares to increase.

    Gloria, who is retired from CityParking, says that Dave "has evolved from CEO to Guardian--of his kids and of the business he founded." Dave tries not to meddle in operations, Gloria says, but "sometimes he'll just walk in on the kids, and ask how they're handling this or that. The kids will say, 'Dad, you don't need to be engaged in this.' But it's hard for Dave to let go."

    And for good reason. The "kids" are unseasoned and still make mistakes. "Your children will do nothing but reassure you that they're ready and can do the job," Gloria says. But certain things at CityParking fell through the cracks, and some critical client relationships became strained. Gloria takes the long view and reminds Dave that mistakes are opportunities to learn. But she blames both her husband and herself for overestimating their children's readiness to take the helm when they did.

    And no wonder. Business demands something not normally required of parents: an objective assessment of their kids' strengths and weaknesses. Family succession only works when offspring are competent leaders who are passionate about their work. Consultant Karofsky says entrepreneurs must make a decision: Does the family serve the business or does the business serve the family? If parents take the attitude that blood is thicker than ability when choosing a successor, chances are the business won't be around long enough to serve anybody.

    Luckily for the Sharrar family, this isn't the case. The next generation may be making its share of mistakes, but Gloria says that overall they're doing a good job of steering the growing company. Both kids now have healthy incomes for their families and are proud to be recognized in the community as good business leaders.

    For Gloria's part, she's glad to be out of the company. "My conversations with my kids are more personal now," she tells me. "Being in business with your children adds a layer of tension and decision making that can diffuse the fundamental love and caring of the parent-child relationship. Over a long period of time, it creates an undercurrent that can become an undertow."

    Anyone with a family business should hire an attorney to help with estate planning and recruit an outsider who can mediate and advise--as well as make clear-headed evaluations of the capabilities of the next generation. That's a role Gloria no longer feels comfortable playing. "I just want to be a Mom and a grandmother," she says. "I don't want to have to assess my own children."

  • No matter how you define rich, this is the only way to get there.

    Want to be remarkably successful? Want to get really rich? (While there are many ways to feel "rich," in this case we're talking about monetary wealth.) Then check out this little gem of an investment opportunity.

    It's a simple investment. You only have to invest almost all of your money. On the upside, after a year you might earn 3 percent more. The downside? Any day you could lose it all, for reasons usually outside your control and that you will almost never see coming.

    Would you make that investment? Of course not.

    Yet millions of people do--every day they go to work for someone else.

    Of course the analogy isn't perfect. Until you're laid off or fired you do earn a salary. But when you work for someone else, your upside is always capped--sure, you might occasionally get a raise, but in most cases 3 to 4 percent is the best you can expect.

    Yet your downside is always unlimited because getting fired or laid off can make your income disappear overnight--and with it the considerable investments you've made in time, effort, dedication, and sacrifice.

    Extremely limited upside. Unlimited downside.

    That's a terrible investment.

    Rich in Wealth

    So if you hope to get really rich, working for someone else will never get you there. But don't just take my word for it, the government agrees.

    The IRS Statistics of Income Division, a place where fun surely goes to die, has published "400 Individual Tax Returns Reporting the Largest Adjusted Gross Incomes Each Year, 1992-2009," or in non government-speak, "400 People Who Earned a Freaking Boatload of Money."

    In 2009, it took $77.4 million in adjusted gross income to crack the top 400. (That just barely got you in; the average income of everyone on the list was $202.4 million.)

    Where it gets interesting is how the top 400 made their money:

    • Wages and salaries: 8.6 percent
    • Interest: 6.6 percent
    • Dividends: 13 percent
    • Partnerships and corporations: 19.9 percent
    • Capital gains: 45.8 percent

    A few conclusions are obvious:

    • Working for a salary won't make you really rich.
    • Making only safe "income" investments won't make you really rich.
    • Investing only in stock of large companies won't make you really rich.
    • Owning a business or businesses could not only build a solid foundation of wealth but could someday...
    • Generate a huge financial windfall--and make you really rich.

    Don't trust the IRS? Fine. Check out the top 10 on the Forbes billionaires list. Gates. Buffett. Ellison. Koch. Walton. Adelson. All entrepreneurs. (I worked my way down into the 200s and still couldn't find an employee, so I got bored and stopped looking.)

    Clearly getting really rich in financial terms is the result of investing in yourself and others, of taking risks, of doing hundreds of small things right...and then doing one or two big things really right.

    But what if you don't get one or two big things really right? There's another way to get really rich.

    Rich in Life

    I've spoken to hundreds of entrepreneurs, and each and every one does the same thing. When we talk about the financial side of being an entrepreneur--exit strategies, revenues, IPOs, cashing out--they're interested but far from animated.

    But when we talk about the life of an entrepreneur, about how it feels to be an entrepreneur, they all light up. They start to gush about the challenges, the responsibility, the sense of mission, the sense of purpose, the sense of fulfillment and excitement of working with and for a real team, the amazing feelings of empowerment and the control over their own destinies....

    It happens every time.

    The bootstrappers with infinite dreams and negligible revenues light up.

    The successful entrepreneurs such as Joel Gascoigne, who helped expand Buffer from a personal project into a business with a talented team with real revenues, light up.

    The hugely successful entrepreneurs such as Scott Dorsey, who helped steer ExactTarget out of a garage, into an IPO, and then into an acquisition by, light up.

    Every entrepreneur lights up when we talk about being an entrepreneur because they feel alive: free to chart their own courses, to make their own decisions, to make their own mistakes--to let the sky be the limit not just financially but also (and almost always more importantly) personally, too.

    And in that way, regardless of financial return, they feel really rich. And they are really rich -- regardless of income or wealth.

    Really, Really Rich

    That's why the only way to become really rich financially and really rich personally--in other words really, really rich--is to start your own business. Even if it's just on the side. Even if it's just a slightly stepped-up hobby.

    There's no reason not to. You don't have to quit your job right away; in fact, you probably shouldn't. (One of the best ways to minimize your risk is to keep your full-time job while you build your foundation for success.) Plus the basics of starting a business are easy; you can do it in one day.

    Here's the deal. In return for less freedom, less control, and less fulfillment, every day you go to work for someone else your upside is always capped and your downside is always unlimited.

    The downside for entrepreneurs is also unlimited--but in return, they enjoy the possibility of an unlimited financial upside and an unlimited personal upside.

    Take a chance on yourself. Try to get really, really rich. Maybe you'll only become really rich.

    One out of two is still awesome--and you will have achieved it on your terms.

    If your friends and family think you were crazy for starting a business, show them this article. If you've been thinking about starting a business and people say you're being foolish, show them this article.

    If the people around you don't understand how personally fulfilling taking a chance on yourself can be, have them check this out.

    And then get started on your entrepreneurial journey, even in the smallest and safest way. Every step you take will bring you closer to becoming at the very least really rich--and maybe, just maybe, really, really rich--and will let you join a group of people who live their lives their way, on their own terms.

    Who are those people?

    Entrepreneurs. Be one.

    It's the best investment you can make--because it means you're investing in yourself.

  • True innovation has nothing to do with your company's size or industry. It's a way of thinking. Here are three ways to make sure you're on the right track.

    You might think that the business world is split between two camps: companies that innovate and those that don't. And you'd probably be right. However, is the divide between the successful behemoths and the barbarian entrepreneurs pounding at the gates? Not at all.

    Successful innovation is a matter of attitude and practice, not of size. There is nothing sacred about being an entrepreneur--many will fumble around without hitting a spark of genius. Large companies? Some manage to keep churning out new products and technologies on a regular basis.

    Eric Ries, author of The Lean Startup, has an interesting view. In an interview with McKinsey & Company, he explains how tech startups successfully challenge incumbents. Though some of the mechanics apply specifically to that industry, the places where incumbents fall down are a matter of attitude. They also aren't a simple matter of size.

    In other words, there's a chance that you're leading a dinosaur. A little baby dinosaur, to be sure, but one as doomed to extinction as its brethren. Here are the basic problems exhibited by companies that will ultimately lose, no matter their size.

    Are You Relying on the Old Answers?

    In high tech, it's now possible for a "kid with a credit card--with a $1,000 budget"--to create something that, to a consumer's eye, looks like the polished mature product of large competitors, notes Ries. That's an industry dynamic, to be sure, but it doesn't mean other industries escape the fate.

    Everything is running on computers. You can model problems and solve them on computers. Computers can run inbound sales and make a company look big and sophisticated. In addition, service providers run on computers. Want someone to provide fulfillment for your products? Amazon has it down pat, all riding on computation that helps make things affordable. Need to manage a more complicated sales process? There's Salesforce.

    So, large technology companies not only face direct competition, but those in areas other than high tech might find competitors using sophisticated simulation, automation, and communications to grind down the barriers to competition.

    Now, realize that none of this is restricted to a large versus small view of the world. Ries said, "And so you're not dealing with one potential competitor but with thousands or millions." But the same is true for a small company. Are you up to the level of innovation necessary when everyone in the world is out to eat your lunch?

    Are Your Failures Productive?

    Businesspeople, whether entrepreneurs or the heads of legacy corporations, don't like to fail. That's a shame, because you don't get anywhere without failure. Failing is the reconciling force in this great laboratory of life. You try something, it doesn't work, and you go on to something else.

    Only, as the great Samuel Beckett once wrote: "All of old. Nothing else ever. Ever tried. Ever failed. No matter. Try again. Fail again. Fail better."

    Failure is scary, but it's necessary because without it you can't progress. Just make sure you--and the people who work for you--learn from all those mistakes. Your company's culture must welcome failure, even though it can be enormously scary. If a big company slips up, no one may notice it. If you lose a big gamble, it could be the end of your company.

    But there is no other approach that can work. Make productive failure part of your corporate culture, even making its smart existence one of the ways you judge employees (and yourself).

    Are You Keeping Your Head Above Ground?

    When it comes to competition and innovation, the absolutely worst thing to do is to bury your head in the sand. You might not want to hear about all the dangers, or consider the amount of hard work success will take, but it's the only way.

    Be ready to face reality, and make sure your employees understand that it's the only thing you want to hear. Any size company can be willfully blind. Make sure it doesn't happen to you.

  • Listen carefully: Sometimes the best opportunities knock softly at your door.

    Opportunity has a way of making a soft tap-tap on your door. Smart entrepreneurs listen for these signals--they have ears specifically attuned to the sound.

    A recent book called Opportunity Knocking: Lessons From Business Leaders, by CNBC senior talent producer Lori Ann LaRocco, focuses on the sound of these opportunities--from how to take advantage of a burgeoning industry to how to take on a challenge that's bigger than just one company. I recently caught up with LaRocco, and she explained four ways to make the most of any opportunity.

    1. Ride the wave of a challenger.

    One of the most interesting points LaRocco makes is that many small companies ride on the coattails of other companies as a way to grow quickly. She says one of her favorite examples is from Anthony Wood, the founder of Roku.

    "Roku continues to blaze a trail with its legion of consumers and is laying the groundwork to becoming an operating system for television," she says. "For six years, they have been competing with Apple TV, and they continue to grow despite Apple's constant versions of their system." Wood told her that Roku sales doubled when Apple TV launched.

    2. Turn big setbacks into big wins.

    Another favorite example, she told me, has to do with Uber, the popular ride-sharing service. Anyone following the peer-to-peer car-sharing service knows there have been constant legal challenges, especially from taxicab unions. LaRocco says Uber learned how to turn a setback into a win. When the D.C. Taxicab Commission added a snow emergency fee of $15, Uber didn't raise its rates in response--it might have seemed like an opportunity to increase revenue. Instead, the company pounced on the opportunity and kept rates the same to attract new customers away from its legal challenger. "If the taxi unions want to be competitive, they have to think like a business providing service rather than a cartel holding consumers hostage," says LaRocco.

    3. Turn down opportunities that don't match your strengths.

    There's a reason Apple became so successful early on--the company focused on engineering prowess and marketing savvy. However, Apple didn't take on IBM and Microsoft in the realm of business process or enterprise software. LaRocco says successful companies need to do the same thing today. Growth happens when a company emphasizes a strength and skips opportunities that exploit a weakness.

    "Not all opportunities are created equal," she says. "You have to run each opportunity against your checklist of what your mission statement is, and assess the lay of the land and see what you can do differently."

    4. Always weigh the risks.

    Every opportunity has an associated risk--it might stretch your staff or your financial resources--but any new partnership, product, or even a big sales opportunity can cause stress on operations and your customer service. LaRocco says one example of how to weigh the risks comes from Ford Motor Company's CEO Alan Mulally. There's a chapter in her book dedicated to how Mulally met the challenge (and risk) of financial insecurity during the 2008 economic meltdown. Mulally knew the risks were great in going to Washington during that time and taking on Congress. He was advocating for an entire industry, not just for his company. Yet, the eventual outcome--not taking any bailout money--meant Ford came out of the meltdown relatively unscathed. "When you are at the crossroads of deciding on an opportunity, you have to weigh the risks," says LaRocco.­ "If the risk of not doing it outweighs the risk of doing it, you have your answer."

  • How to keep your choices under your control.

    President Obama only wears blue or gray suits.

    As he tells Vanity Fair, it's a way of managing his willpower.

    "I'm trying to pare down decisions," he says. "I don't want to make decisions about what I'm eating or wearing. Because I have too many other decisions to make."

    Obama's focus on routine is backed up by research. Social psychologist Roy Baumeister has found that willpower is like a muscle--it can be strengthened or fatigued with use.

    It's a crucial insight, given that a 2011 study of 1 million people around the world found that people think that lack of self-control is their biggest weakness or character failure.

    As Baumeister details in his book Willpower: The Greatest Human Strength and a New York Times Magazine cover story, willpower and decision making are interconnected. The house you grew up in, the number of decisions you made today, and what your friends are doing, all affect your decisions in weird ways. Here's a look at how.

    Make your most important decisions in the morning, before you experience "ego depletion."

    "Freud speculated that the self, or ego, depended on mental activities involving the transfer of energy," the New York Times reports. "[His] experiments demonstrated that there is a finite store of mental energy for exerting self-control."

    As the day wears on, your energy reserves are further depleted.

    Your brain needs glucose in order to make good decisions.

    "Even the wisest people won't make good choices when they're not rested and their glucose is low," Baumeister tells the Times. "That's why the truly wise don't restructure the company at 4 p.m. They don't make major commitments during the cocktail hour. And if a decision must be made late in the day, they know not to do it on an empty stomach."

    Grocery retailers discovered this decades ago. Researchers found that, "just when shoppers are depleted after all their decisions in the aisles--with their willpower reduced, they're more likely to yield to any kind of temptation, but they're especially vulnerable to candy and soda and anything else offering a quick hit of sugar."

    Our finite supply of "decision making power" means that making a series of decisions can be exhausting.

    Which would explain why shopping is so tiring.

    Researchers found that shoppers who "had already made the most decisions in the stores gave up the quickest" on a math test.

    Once you're mentally depleted, you're more likely to make bad decisions.

    "To compromise is a complex human ability and therefore one of the first to decline when willpower is depleted," reports the Times.

    At the end of the day, when we're more physically and mentally fatigued, we're more likely to skip the gym after work or drink more during happy hour.

    Developing routines helps you eliminate stress and conserve energy for important decisions.

    "The most successful people, Baumeister and his colleagues have found, don’t use their willpower as a last-ditch defense to stop themselves from disaster," the Times reports.

    "Rather, they conserve willpower by developing effective habits and routines in school and at work so that they reduce the amount of stress in their lives. They use their self-control not to get through crises but to avoid them. They give themselves enough time to finish a project; they take the car to the shop before it breaks down."

    If you want more willpower, get better sleep.

    Studies equate sleep deprivation--getting less than six hours a night--with being drunk. As Stanford health psychologist Kelly McGonigal says, sleep deprivation messes with the prefrontal cortex, a region of the brain associated with decision making.

    When you're sleep deprived, "the prefrontal cortex is especially hard hit and it loses control over the regions of the brain that create cravings and the stress response," she says. "Unchecked, the brain overreacts to ordinary, everyday stress and temptation."

    Your unconscious plays a key role in helping you make good decisions.

    President Obama's decision to "sleep on it"--with "it" being whether or not to raid Osama Bin Laden's compound--aligns with psychologists' recommendations for complex decision making.

    "Because your conscious attention is limited, you should enlist the help of your unconscious," according to the Harvard Business Review.

    Even if you don't have the option to delay your decision for long, engaging in another activity will take your mind off your dilemma and allow your unconscious to surface.

    Your decisions are shaped by your friends and family.

    Breakthroughs in network science--the study of social groups--have revealed how many things we tend to think of as being individual, like whether you get fat or stop smoking, are actually collective.

    As James Fowler of the University of California, San Diego, and Nick Christakis of Harvard Medical School have found, our behaviors are contagious. If your best friend becomes obese, you have a 57 percent greater chance of growing obese too. If a close colleague quits smoking, you have a 34 percent greater change of quitting smoking, too.

    Sometimes, it's best to run your ideas by others.

    Network science has insights into productivity, too.

    When researchers tracked the successes of individuals at an aerospace company, including patents and products those individuals brought to market, they found that who a given engineer knew was tremendously important.

    After experience, the relationships that an individual had were the greatest predictor of success. The people who had relationships up and down hierarchy and across departments were the most likely to succeed by the company's metrics.

    Why? Because when you have quality relationships with people, you can combine ideas, gather feedback, and earn buy-in for your projects--another reason that generous people succeed.

    It can be valuable to cave in and say "yes" to the "wrong choices" once in a while.

    Occasionally giving in to your desires can reinvigorate you, so you don't feel completely deprived all the time, according to the Times. It helps you stay on track for the long-term.

    There's a reason why people celebrate Mardi Gras before the Lenten season.

    If you make an obligation to someone, the decision gets easier.

    Are there decisions you don't have to make right now, or you can have someone else make for you?

    "Instead of deciding every morning whether or not to force themselves to exercise, [smart people] set up regular appointments to work out with a friend," reports the Times.

    If you prepare for your moments of weakness, you'll be better able to make good decisions.

    "Good decision making is not a trait of the person, in the sense that it’s always there," Baumeister says. "It’s a state that fluctuates," the Times reports:

    His studies show that people with the best self-control are the ones who structure their lives so as to conserve willpower. They don’t schedule endless back-to-back meetings. They avoid temptations like all-you-can-eat buffets, and they establish habits that eliminate the mental effort of making choices.... Instead of counting on willpower to remain robust all day, they conserve it so that it’s available for emergencies and important decisions.

    "The best decision makers are the ones," he says, "who know when not to trust themselves."

    If you can exercise your willpower, studies suggest you're more likely to succeed.

    In the famous 1972 Stanford marshmallow experiment, school children were asked to sit at a table with a marshmallow in front of them and not eat it--for an excruciating 15 minutes. They got a sweet pay off if they made it: a second marshmallow.

    As has been widely reported, the students that could wait for the second treat had higher SAT scores and lower levels of substance abuse than their more impulsive friends.

    But the waiting game might not be the whole story...

    But sometimes what looks like weak willpower could be quality decision making.

    If it looks like the opportunity to act might disappear, it can be better not to wait.

    In 2012, University of Rochester researcher Celeste Kidd published a study that challenged that marshmallow experiment. When she was younger, Kidd spent time working for homeless shelters--she remembers wondering how growing up in such an unstable situation would affect decision making.

    Those kids, she thought, would eat the marshmallow right away.

    But not because they didn't have enough willpower. Rather, they grew up in situations where you they couldn't trust adults to follow through on their promises.

    "Our results definitely temper the popular perception that marshmallow-like tasks are very powerful diagnostics for self-control capacity," Kidd said. "Delaying gratification is only the rational choice if the child believes a second marshmallow is likely to be delivered after a reasonably short delay."

    In Kidd’s study, children were primed to think that researchers were either reliable or unreliable. In one part of the study, the experimenter gave the kids a piece of paper and crayons, giving each child the choice of using those art supplies or waiting for better ones. Then came the twist: for one group of students, the experimenter brought back markers and more crayons; for the other, the experimenter came back and apologized, saying there weren’t any nicer art supplies.

    Then came the marshmallow test. Nine of the 14 kids from the "reliable" set were able to wait 15 minutes for the second marshmallow, but just one of the 14 who were disappointed waited it out.

    The lesson: What looks like willpower might also be trust.

  • Almost every position in every company requires some kind of selling. Here are the essentials you need to know to do it well.

    There are thousands of "how to sell" books and training courses available everywhere around the world. However, everything you need to know about selling really boils down to the following simple rules:

    1. Specialize in selling one thing.

    The notion that a great salesperson can sell anything to anybody is as stupid as the idea that a virtuoso musician can play any instrument. The more you specialize in terms of product, service, and industry, the more likely you are to sell successfully.

    2. Winnow down your sales leads.

    When you're selling, the last thing you want or need is a huge list of sales leads. You only want to spend time on prospects who will probably buy. Therefore, the tighter your target list, the more likely you'll find someone who's actually interested.

    3. Do your research first.

    Never, never, never contact a prospect before you've checked out the person's LinkedIn profile, researched his or her company and industry, and found at least one good reason why the prospect should to talk with you, today.

    4. Get into a conversation.

    Your initial goal is not to sell but to get into a conversation to find out if it the prospect is a potential customer. Therefore, a sales pitch--whether spoken, written, videoed, or whatever--is not just a waste of time; it's actually preventing a sale from ever happening.

    5. Be a person, not a salesperson.

    There's absolutely nothing wrong with selling for a living or having to sell in order to make yourself or your firm successful. However, most people dislike any behavior that smacks of the showroom. Be yourself, not a clone of Ron Popeil.

    6. Qualify the prospect quickly.

    When you do get into that conversation, your goal is to find out whether that prospect has a need for what you're offering and the money to buy it. If not, eliminate that prospect from your list. Don't waste your time or the prospect's.

    7. Focus on the customer's customer.

    When you're assessing needs, what's most important is always what your prospect's customers need from your prospect to be successful. Your job is to help the prospect meet those needs. Your own needs, of course, are utterly irrelevant.

    8. Adapt to the buying process.

    Selling is not something that you do to a customer. It's something that you do for a customer. This means understanding how the customer buys the sort of thing you're selling and providing assistance as needed to make the purchase happen.

    9. To sell you must close.

    When you've got what you hope is a bona fide potential customer, it's hard to risk hearing a no that smashes your dream of a big sale. Nevertheless, if you don't ask for the business, or wait too long to ask for it, you're going to lose the sale anyway.

    10. Build long-term relationships.

    The only way to make selling easier is to build up your Rolodex, not just of contacts but of people whom you've personally helped become more successful. Eventually, you won't need to sell any longer because your friends will do your selling for you.

    Readers: Is there something in this list that's missing. Leave a comment!

    Like this post? If so, sign up for the free Sales Source newsletter.

  • If you think coffee gets you kickstarted, just wait until you try gratitude.

    Everyone has a unique way of starting their day off on the proverbial right foot. What do successful entrepreneurs do every morning to ensure they are über-effective at getting things done? We asked members of the Entrepreneurs' Organization to provide their tips and tricks for maximum productivity.

    Say thank you.

    "Every morning, before I even put one foot on the floor, I think of one thing for which I am thankful. Starting with a positive thought and reminding myself of the good things I have in life gives me perspective for the day, should any unpleasantness unfold."

    --Michael Zwick, EO Detroit

    President, Assets International

    Work on the business, not in it.

    "I keep a recurring one-hour meeting for myself called 'Working on the Business.' This is a time to think about those higher-level issues that are so important and too often trumped by other meetings and 'urgent' emails. Though this meeting lasts an hour every day, it makes all the difference. Why wouldn't you spend at least five hours a week working on your business?"

    --Kevin Menzie, EO Colorado

    CEO, Slice of Lime


    "In order to have a productive day, I start out every morning writing down my top three MITs, or most important tasks, that I need to focus on for that day. I write them down at home before I leave for work, prioritize them, and then make sure I schedule time on my calendar early in the morning for each one of them. This process only takes a few seconds and ensures that every day is productive."

    --Jay Feitlinger, EO Arizona

    CEO, StringCan Interactive


    "I made a promise to work out at least 45 minutes every morning before doing anything else. This has made a huge difference for both myself and my business. Through exercise, I start the day refreshed and ready to take on the many challenges of startup life. I'm more able to approach challenges with an open mind, remain healthy to work long hours, and keep a positive outlook when met with roadblocks."

    --Amy Balliett, EO Seattle

    President, co-CEO, chairman of the board, Killer Infographics

    Start earlier.

    "One day, I had to get to my office at 6 a.m. to be on a conference call with a London-based client. The call only lasted about 20 minutes, and I was left with two and a half hours before my employees started to arrive. I accomplished more in that time of solitude than I ever had in a standard eight-hour day with a fully staffed office. As more and more staff arrive, my productivity tends to decline dramatically. I now regularly work from 6:30 a.m. to 4:30 p.m."

    --Jeff Cooper, EO Philadelphia

    President and CEO, Expo Logic

    Meditate for five minutes.

    "I start every day with a five-minute meditation and relaxation breathing exercise. This gives me the focus and peace to tackle my hectic day as an entrepreneur. I used to check my phone first and get stressed out, but now this short exercise gives me the balance I need."

    --Nick Friedman, EO Central Florida

    President, College Hunks Hauling Junk

    Podcast with the kids.

    "Once I hit the office, there is very little time to explore new trends and topics in my industry. I start each morning with a curated list of podcasts. First, I listen to two of my shows (10 minutes each), but I also listen to a podcast with my 5-year-old and 3-year-old. Everyone's happy, I'm up to date on my industry, and the commute goes quick!"

    --Nicholas Holland, EO Nashville

    President, CentreSource

  • Having problems with your superstars leaving rather than moving up? Out-of-date promotion practices may be part of the problem.

    For those who lead companies, how difficult do you make it to promote someone? Is all the effort worth it to your managers, supervisors, and the person themself? Or are you practically posting an Exit sign for your most ambitious, talented workers, who will inevitably seek jobs elsewhere?

    Here are a couple of promotion practices that may be out of date and hindering your efforts to keep employees engaged, contributing, and moving up the ladder.

    Promotions happen only once a year.

    In corporate America, there's a long-standing practice of doling out promotions once a year at annual review time. Though this may have worked well once upon a time, it seems old, outdated, and just plain antiquated at this point.

    Nowadays, we move fast. People change, jobs change, and organizations change.

    An employee might be ready for a promotion in February. Do you really wait until the end of December to promote her--if she even sticks around that long? In this competitive hiring environment, your best employees may get scooped right out from under you if you fail to promote them when they deserve it.

    True, many of us are still using this once-a-year promotion schedule because we're tied to it with budgets, approvals, and so on. But I think we can be more creative. Though some companies pooh-pooh off-cycle promotions because it "looks bad," I'd argue that it's actually really motivating for employees to see deserving folks getting promoted and proving there's a viable career path in the organization.

    Job descriptions and skills are not defined.

    In many organizations, it's unclear how to even get promoted. Job descriptions aren't published, and skill sets that are needed for each job aren't clearly defined. Distinguishing an associate from a manager from a director gets muddied up. An employee asks his or her manager the million-dollar question: "How do I get promoted to the next level?" And the manager is placed in the precarious position of trying to make sense of something that's undefined.

    This leaves a lot of room for inconsistent practices and could result in some very unsatisfied employees who may choose to explore opportunities elsewhere instead of trying to figure out what they need to do to move up the ladder in your organization.

    If your job descriptions and required skill sets aren't clear and shared within your organization, work with your human-resources team and supervisors to outline clear roles and responsibilities, and also what differentiates one job (or title) from another. These subtleties are what your employees and supervisors need and want, to be able to clearly articulate what each level does and the skills and abilities an employee will need to get there.

    If you enjoyed this post, sign up for the free VR Buzz and check out the VerticalResponse Marketing Blog.

  • Author and Duarte Design CEO Nancy Duarte on the right way to use slides, how to cure stage fright, and taking lessons from 'Star Wars' for your next presentation.

    No matter how frustrated you are with your presentation--no matter how bad your slides currently seem--chances are that Duarte Design has seen worse. The 90-person company has worked on hundreds of thousands of presentations, for clients including Twitter, ESPN, and the Food Network.

    Duarte is probably best-known for its work with Al Gore and the environmental documentary An Inconvenient Truth, transforming Gore’s passion and mounds of research into Oscar-winning storytelling. Inc. editor-at-large Kimberly Weisul spoke with author and Duarte Design CEO Nancy Duarte about presentation mistakes, investor pitches, and why speakers should think of themselves as Yoda.

    Your company, Duarte Design, has worked on literally hundreds of thousands of presentations. What mistakes do you see over and over?

    The biggest thing is that people don’t have enough empathy.

    When you have an opportunity to present, you tend to start to processing information from your own perspective. Usually, it’s all about the information you want to give, instead of being about the information the audience wants to receive. You need to spend an enormous amount of time thinking about what the audience wants to receive. You need to really think through who you’re talking to, and how to make a deep connection with them. Then you need to create content that supports that.

    Think: How do I want the audience to change? If they spend an hour with me, how do I want them transformed? Then everything you create needs to support that transformation in them.

    How does a great presenter use slides? Most people know they shouldn’t read the slides, but what should you do with them instead?

    There are two ways to use slides.

    You can use slides as cinematic visual aids. The slides should be breathtaking and easy to process. They should pass what I call the glance test. It should take no more than three seconds to process a slide.

    Or you can use slides to create your documents. I call these slide docs. That’s when you have your whole presentation--almost like a script--in your slides.

    If your PowerPoint makes sense on its own, without anyone presenting the slides, you’ve created a slide doc.

    Sometimes sending a slide doc ahead as a pre-read and then doing a glorious presentation is the way to go.

    How do you handle a pitch to an investor? Is that a "real" presentation, or are you writing a slide doc?

    If an investor is interested, he’s going to ask you to send five slides. In that case, you’re asking your slides to be your emissary--the emissary that opens the door. Pack as much information as you can on those slides.

    Then when you get in the door and get asked in for a meeting, instead of preparing 30 minutes of content, you need to do 10 minutes or 15 minutes, tops. Then let the investor take over. To do a 10 or 15 minute talk well takes an enormous amount of time.

    You can put your entire script in the "notes" view in PowerPoint. You can do a nice big layout and make it almost like a brochure. Then it can travel without you. That goes along with the slides you’ll show the VCs, but it's not projected. Print it out. When you present to the VC, hand out the "notes" section right away. Say "Here’s a handout where we can dig into the numbers." Then do your presentation, and use the handout for the question and answer part.

    Are there times when you should just ditch the slides entirely?

    Sheryl Sandberg did a great talk at TED Women, but she had no slides.

    She didn’t need slides. The subject matter was very personal to her. She had plenty of stories. The words that came out of her mouth were visual. She’s beautiful, and that helps. She’s articulate. She’s riveting. It’s not like she had to display a piece of data. It made it feel like you were sitting in her living room having a conversation with her.

    One of my favorite lines from your TED talk is, "You’re not Luke Skywalker, you’re Yoda." Could you explain that a bit?

    Think about movies and myths. There’s often a likeable hero who encounters obstacles and, in overcoming them, is transformed. That’s Luke Skywalker. When you're presenting, that's not you.

    People go up on stage and set themselves up as if they’re the hero. The attitude is, "I'm going to give you this information and it’s going to help you." Or, "I’m going to give you this information and you're going to admire me." That’s an arrogant stance.

    In movies and myths, there’s also often the mentor, who comes alongside the hero to help them get unstuck or give them a magical tool. That’s Yoda. When you're presenting, that’s you. If you look at it that way, suddenly you’re more humble.

    The presenter's success is completely dependent on the audience adopting the idea. The presenter is not the protagonist. You need to take that and respect that. The audience has the power to take your idea and spread it far and wide. Or it can die.

    Do you get nervous when you go on stage?

    I do when I’m doing new material that I only feel kind of rehearsed for. And I get nervous if the audience astounds me. I had Deepak Chopra and James Cameron in an audience at the same time. That’s kind of intimidating. They were very kind.

    How do you handle your nerves?

    The best tip I have comes from [speaking coach and author] Nick Morgan. When you’re about to go on stage, sometimes your fight or flight reaction kicks in. You think you’re being threatened. What you need to do is flip the chemistry back. So when you’re backstage, think about someone you love that you haven’t seen for a long, long, time, and convince yourself you’re going to see that person when you go out onstage.

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

    1. Unwearables

    Hardware founders take note: Naveen Selvadurai, the co-founder of Foursquare, isn't convinced the future of tech is all wearable. "What if we didn't have to/weren't meant to carry our technology with us as we moved around town? What if the technology was actually already in the room when we got there? Maybe that's the kind of Internet-of-things that will be more sustainable and will win long-term." Selvadurai has a name for this tech, by the way: "there-ables."

    2. Bonus Behavior

    Maybe it's time to ditch the sales bonuses. Deirdre Connelly, president of North America Pharmaceuticals at GlaxoSmithKline, says bonuses should incentivize more than selling. "Ultimately every leader knows that you get the behavior you reward," Connelly writes. If you create a business that incentivizes people to do good and make customers happy, you'll create more value.--HBR

    3. The Digital Divide

    Moleskine's dive into digital is a lesson in what can happen when a decidedly offline brand tries to go online. Known for its trendy (or pretentious, depending on who you ask) notebooks, Moleskine has tried to branch out online, with moderate success. The luxury brand is still selling its analog notebooks, but its fans aren't all that interested in connecting online. Go figure.--The New Yorker

    4. Clean Slate

    If your smartphone is a mobile trove of your most valuable personal and professional data, take comfort in knowing that by 2015, all new phones will come with a "kill switch." Apple, Google, Samsung, and Microsoft have agreed to equip phones with a system that will allow them to be wiped remotely.--CNN

    5. The Honest Selfie

    Do you spend your time online wisely? If you really want to know, check out the Surfkoll tool, which will tell you just how much time you spend where.--Fast Company

  • Your comfort zone feels great, but it isn't where you need to be. To push your company forward, you have to take risks.

    As entrepreneurs, we crave a challenge. It's a critical component of peak performance because it provides stimulation. Without it, when we get too comfortable, we are bored, which can be the death of motivation and creativity for an ambitious business owner. Pushing yourself out of your comfort zone is key. If you don't, you risk stagnation.

    Remaining challenged and staying out of your comfort zone, however, is not easy. When you step too far out in business, you risk making costly mistakes; not out of it at all, and you are bored and underutilized. For example, say you are a CEO running a business that you love, but you are constantly reacting to your work versus being proactive. You don't have time to stop and think if you are really challenging yourself in a way that maximizes results to achieve your long-term goals.

    Busyness can get in the way of optimizing your talent, and before you know it, you are spending all your time in your comfort zone. If that is happening, you are probably feeling less inspired, more tired, and unsure of how work that you used to love is now more taxing.

    To avoid the comfort-zone blahs or the risks associated with going too far out, review the list below. These 10 indications can help ensure that you are staying in the sweet spot of challenge and remaining a healthy distance from your dreaded comfort zone.

    1. Your activity is linked to your overall mission. It's clear that working on this challenge will get you a step further in your company's path forward.

    2. You are the originator of the challenge. You are not doing this because someone else has dictated it. Someone else could have a fantastic idea, of course, but you want to avoid getting into a situation in which you feel out of control or as if you have no autonomy within the challenge. This can be tricky, especially if you are answering to a board of directors or investors. You may think you are in control of your work, but overbearing board members could be thwarting your ability to challenge yourself in the way that you want.

    3. The challenge leverages your unique genius or natural talents. If not, then rethink the ownership if this particular challenge--and find a better fit within your company or your job responsibilities.

    4. You enjoy the challenge. Being mentally switched on is the best way to succeed.

    5. You're excited to push your abilities to overcome this challenge. It's not an easy challenge, but the thought of conquering it is energizing. It's a comfortable uneasiness because you don't know how you are going to succeed, but you know figuring it out will be a blast. And you know if you fail, it's OK.

    6. You don't let this challenge take over your life. You are able to focus on it, step away, and then come back without it affecting your ability to sleep, socialize, or have some downtime.

    7. Your stress levels are manageable, despite the challenge. You are not feeling overly anxious about the process or the outcome of the challenge--which, in turn, makes success more likely.

    8. Others respond to your energy for this challenge and show interest and support. Your team, partners, or colleagues are motivated by your enthusiasm. You can tell because they share that with you or offer to help you succeed with what you are doing.

    9. You make positive and incremental progress with the challenge. You see regular indications of progress in spite of the disappointments. Which means you are making a difference and are engaged in the process of actualizing this goal.

    10. You have moments in which you are super-energized, to the point where you feel like you are buzzing. We all have those moments when we are so aligned with our work that we feel like we are on a high. These are what a challenge junkie lives for, and if you are experiencing these, then you know you are pushing the limits of possibility--and are on the right track.

  • Retailer The Brooklyn Circus has an award-winning social media strategy, despite having only two people dedicated to it.

    Last week a group of media moguls, business leaders and entertainment stars named the best and the brightest on social media at the Shorty Awards in New York City. The award ceremony included a wide range of categories in social media excellence, from the Best Comedian to the Best Video Campaign to the Best Use of Vine.

    It is definitely worth checking out the entire list of Shorty Award winners--after all, these are the individuals and companies you should be emulating on social--but one important honoree to note in particular is The Brooklyn Circus. The retail and design company (based, of course, in Brooklyn, New York) won the Shorty Award for Best Small Business on social media--even without a staggering number of tweets or social media followers.

    The Brooklyn Circus didn't even have the most followers among the finalists in the small business category (She's the First, a sponsor of girls' education in developing nations, and a finalist in the category had more). So how did the company, which has a social media team of just two people, bring home the Shorty? Inc. spoke with BKc founder and creative director of Ouigi Theodore about the brand's social media strategy. Here are some of the major takeaways:

    Find your voice and be consistent

    Theodore stresses the importance of developing a specific voice on social media that creates a unique mood. He says that you won't find BKc chiming in on what is happening in politics or around the world. "We always make sure that the voice [on social media] is the brand's voice and not Ouigi's voice or anyone else's," the founder says.

    Once you find that voice, he adds, it "has to be consistent--whether it is on Instagram, Flickr, Facebook, or Tumblr, and so on and so forth. That voice has to be pretty much what we are saying offline."

    Approach each platform with a strategy

    It is important to understand that being consistent doesn't mean that you copy and paste a tweet to your Facebook page. BKc uses individual platforms differently. "Of course they all have to link, but every one of the platforms needs a separate strategy," Theodore says.

    The BKc team's main focus is Instagram, on which it uses imagery to illustrate its brand and products. The company uses Twitter to quickly interact with customers, and views Facebook as a place to communicate with the business's older customers.

    Don't focus on numbers

    BKc currently has more than 23,100 Instagram followers, more than 12,600 Twitter followers, and more than 9,400 likes on its Facebook page--not a bad following, but to Theodore, these numbers are meaningless. He stresses that social media isn't a numbers game; what matters to him is how many people are actually listening to what BKc has to say.

    "I know in social media, people tend to count how many, but for us it's about how many of these people are actually interested in what we are saying, will actually do what we tell them to do, and how many of them actually get the message," he says. "It is really about our ability to move a crowd."

    Don't become a victim

    Theodore adds that although it is important to be accessible to customers on social media, there is a line you shouldn't cross. "At the end of the day, we have to run a business. We are operating a brand. That is very important and it shouldn't take a backseat to all the people asking you questions online," he says. "We don't allow ourselves to become too available. If [a customer] asks a question, we will be more than happy to answer it, but there are some questions you just can't answer."

  • Seth Meyers might have a leg up on most business leaders when it comes to social media recruiting.

    Okay, you probably don't need to hire a comedy writer. (Though maybe the tone of your daily email slog would benefit from doing so.)

    But there's still an important, if simple, recruiting message in this Vulture article about Bryan Donaldson, an IT professional from Illinois whose Twitter comedy act landed him a gig writing for Late Night With Seth Meyers.

    That lesson: Social media is, indeed, a recruiting tool. And that doesn't just mean LinkedIn, the network most people associate with recruiting.

    Twitter and writing gigs might be well aligned from a recruiting perspective, as seen in Donaldson's example. The social network serves as a ripe opportunity for potential recruits to show off their sense of humor or wordsmithing abilities. But it can also serve as a great opportunity to find people who are passionate about an industry, and who aren't afraid to contribute to the conversation around it.

    Facebook, however, might be more broadly applicable. Stephane Le Viet, the CEO of Work4, a company that helps businesses use social media to manage talent, says Facebook is an underrated place to look for talent. While LinkedIn offers a strong user base of career-minded people, Facebook, with its billion-plus members, "inherently has skin in the recruiting game," he says.

    Facebook's recent innovations, like graph search, make it possible to search for people by education and the industry they work in. Meanwhile, new ad targeting options allow companies to post job listings as advertisements and make sure they wind up in the right hands.

    What's more, Le Viet says, is that studies have shown that 81 percent of Facebook users want to see jobs posted there.

    A story like Donaldson's looks at first glance like a fun story from the goofy entertainment industry, walled off from everyday business.

    But when it comes to having a social recruiting strategy, the rest of the business world might be the butt of the joke; only 7 percent of companies boast a formal social recruiting strategy.

  • SQL injection attacks are among the most common security threats businesses face, and they're on the rise.

    You may not have the slightest idea what an SQL injection attack is, but that's okay, you're in good company.

    It turns out that SQL injection attacks are one of the most common hack attacks businesses of all sizes face, but a lot of small business owners don't really know what they are.

    And like your peers, you're probably woefully unprepared to meet to the challenge SQL attacks represent, according to Ponemon Institute, the information, privacy and security researchers, which released a report about the gravity of the threat on Wednesday.

    Ponemon surveyed 595 IT professionals at businesses of all sizes, ranging from less than 1,000 employees to more than 75,000 people. Twenty percent of the survey sample had fewer than 1,000 employees.

    It turns out 65 percent of businesses had experienced at least one SQL attack in the previous 12 months, according to the report, and half of all businesses identified such attacks as a significant threat.

    "Organizations believe they struggle with SQL injection vulnerabilities," Larry Ponemon, founder and chairman of Ponemon Institute, said in a press release, but their issues are complex.

    Defining an SQL Attack

    SQL is shorthand for "structured query language," a computer program that lets you search relational databases, typically used by any business with structured employee records, financial information, or information relevant to manufacturing.

    An SQL attack typically occurs through a consumer facing software application, where hackers exploit coding holes and then insert malicious code inside the database itself. Intruders can then use that code to query the database, to find valuable information.

    A Growing Problem

    SQL attacks are on the rise. Forty percent of respondents said SQL attacks were increasing, yet nearly two thirds said they either had no knowledge at all or were not familiar with the techniques criminals use to launch the attacks, which is to bypass firewall protections that Web applications have built into them.

    Despite the escalating problems, about a third of respondents say their IT personnel lack the knowledge and expertise to quickly detect and rid themselves of such an attack. More than a third said they also lacked necessary tools and technology to quickly detect an SQL injection attack.

    While forty-four percent of respondents said they use outside professionals to test their Web applications for security threats, only 35 percent said they tested for SQL injection threats. Meanwhile, about half of all companies either don't check for such threats at all, or only on an irregular basis.

    How to Prepare

    Fortunately, there are some things you can do:

    • Run security tests on any third party software you use, especially if it is Web-facing.
    • Consider installing behavioral analysis tools that examine all database queries for irregularities that stand out from the normal operation of your business.
    • If you don't have an IT professional on staff, bring one in from outside to test your network for vulnerabilities.

  • With Microsoft, Google, and Amazon slashing service fees, it may no longer be worthwhile to build your own computing systems.

    As prices for cloud services drop, you may want to rethink your efforts to build your own computing and data storage systems.

    According to the The Wall Street Journal, Amazon, Google, and Microsoft have started a price war to lure customers to their cloud services (Amazon Web Services, Microsoft Azure, and Google Compute Engine, respectively). Last month, the three tech companies slashed their prices by as much as 85 percent within days of each other.

    Research firm Gartner predicts companies will spend $13.3 billion this year on renting computing power from other providers, a 45 percent increase since 2013, the Journal reports. Although that number is still a fraction of the $140 billion companies spend a year to build their own systems, the price competition is making it harder to justify continuing to do so.

    Technology-consulting firm SADA Systems estimates that a medium-sized website that gets 50 million monthly page views could spend at least $1,200 a month to buy servers and other necessary equipment, the Journal reports. If that same company were to rent its computing system from Amazon, Google, or Microsoft, the bill could range from $270 to $530 a month.

    In a survey by consulting firm RightScale, 87 percent of tech executives said their companies outsource computing power for at least one task, WSJ reports.

    Michael Simonsen, CEO of real-estate startup Altos Research, tells WSJ that his company uses Amazon Web Services to "crunch data on about 100 million U.S. home listings." Thanks to the warring cloud factions, his bill was cut almost in half last month.

    "Nobody ever gives you a 40 percent price break overnight," Simonsen tells the paper. "Our direct benefit is the opportunity to create more products, faster."

  • Fits of anger can be be set off by temporary drops in blood glucose levels, according to recent research.

    Employees' low blood sugar levels might be bad news when it comes to workplace harmony, suggests new research. According to several studies, a temporary drop in blood glucose might cause individuals to fall victim to angry and aggressive spells. In other words, they become "hangry" versions of their usual selves.

    Many -- particularly those who own an "I'm Sorry For What I Said When I Was Hungry" T-shit -- will tell you it's a real phenomenon. But it's only recently that a growing body of research is making that case, according to Vox.

    One study found that married couples displayed greater levels of both anger and aggression toward their spouses when they had low blood glucose levels. The researchers, who monitored 107 couples over 21 days, measured this by asking participants to stick needles into voodoo dolls representing their husbands and wives. Participants were also given the opportunity to blast their partner with loud noises like fingernails on a chalkboard and dentist drills.

    "As expected, the lower the level of glucose in the blood, the greater number of pins participants stuck into the voodoo doll, and the higher intensity and longer duration of noise participants set for their spouse," the study's authors wrote.

    So why does hunger cause some people to act unpleasantly toward others? Voluntary behaviors, like self-control, literally require large amounts of energy. The brain, which accepts glucose for fuel, performs less than optimally when it is glucose deficient. And this leaves you with less energy to control your actions.

    In a separate study, researchers also looked at the effect that the likely fix -- i.e. sugar -- had on individuals. Again, participants were given the opportunity to blast other participants with loud noise. But this time the researchers found that those who had consumed lemonade were more compassionate and blasted other participants with softer noises than those who had drank the placebo.

  • Likeable Media founders Dave and Carrie Kerpen talk to Executive Editor Laura Lorber and answer viewer-submitted questions about social media, rapid business growth, and more.

  • Although Google+ has fewer users than other platforms, it's essential for search purposes.

  • Keep an eye on erasable media like SnapChat, visual platforms like Instagram, changing Facebook demographics, and LinkedIn content dominance.

  • For Carrie Kerpen, staffing for a rapidly growing company was a major challenge--but having great employees is the payoff.

  • For small business owners, the first step for using social media should be connecting with your existing customers.

  • Dave and Carrie Kerpen were so successful in getting sponsors for their wedding that they decided to go into business together.

  • Dave Kerpen talks about the principles behind his new book, Likeable Leadership.

  • Get your leadership team into a different environment to clear heads and figure out the next steps.

  • If you want your company to grow quickly, you need to focus on delivering great results and hire the right people.

  • A recent study finds that children and adults have a comparable ability to assess people's trustworthiness and competence based on their appearance.

    If you've hired a lot of people, you may think you've developed a knack for sizing people up just by looking at them. The truth is, you're no better at it than a toddler.

    During the hiring process, if you rely on your time-honed skill or innate ability to judge a candidate's trustworthiness, competence, and dominance by reading their faces, you're giving yourself credit for an ability you don't possess. All you're doing is judging a book by its cover.

    A recent study published in the research journal Psychological Science, "Inferring Character from Faces: A Developmental Study," found that discerning character traits by judging a stranger's face is not a skill developed over time, experience, or some genetic gift. In fact, the study found that children's ability to judge trustworthiness based on appearance is comparable to that of adults (it did not draw conclusion about the accuracy of the judgments).

    So, the next time you judge if a candidate is competent based on a first impression, remember you might get a similar conclusion from a 3-year-old.

  • Find out the steps you must take to prevent your employees from unwittingly exposing confidential information.

    When the Heartbleed security bug was revealed last week, IT departments across almost every industry scurried to secure their infrastructure. Frighteningly, the bug, which potentially exposed customer data for more than two years, is undetectable.

    Heartbleed and cyberattacks like Target have made businesses more aware of the necessity of having sufficient defenses in place to protect trade secrets, customer information, and financial data. Still, says Heather Bearfield, a cybersecurity and risk management consultant at professional services firm Marcum, companies still have a long way to go.

    "When we speak with CEOs, CFOs, and CIOs, we see a huge investment, tens of thousands of dollars, to make sure their financial statements are in place. But with IT, they think they aren't a target, their infrastructure is sufficient, and they don't need to invest in security," Bearfield says. "Those are the organizations that will get hit hard. As we've seen, a breach can bring an company to its knees. You're going to see a huge shift as companies realize how important it is to support their IT department."

    Below, read Bearfield's tips to prevent a data breach and save your company a lot of money in the long term.

    Educate your employees.

    Believe it or not, your employees are the weakest link in your digital defenses. "Human error is the highest risk to your company. Clicking bad links, stolen laptops, lost thumb drives and company phones--there are so many ways company data can be breached," Bearfield says. "Just raising employee awareness can do a lot to better protect your company."

    During company consultations, Bearfield will simulate phishing attacks to show how easily your network can be compromised. A recent Verizon report finds there's a 100 percent chance that at least one out of 10 people who are sent a malicious email will click a link in it (a phenomenon it calls the "inevitable click"). She also warns that hackers are leveraging current events to entice clicks--everything from the Olympics this past winter to the Malaysian airlines search. Make sure your employees know the danger one click can cause.

    Don't be stubborn about passwords.

    Bearfield says many companies refuse what should be an simple security tactic to implement. "We still see so much pushback from the C-suite and sales teams on the necessity to change all passwords every 90 days. They feel like they can't remember new passwords, can't come up with a new secure one with frequency, and think the process will trip them up in their workflow," she says. "It sounds so easy, but this is actually a big issue--password security is the first layer of defense but people feel like it's impossible for them. We also suggest case-sensitive, special characters, and lockout after a certain number of attempts."

    Encrypt before you ship.

    Encrypting your email messages is another easy way to shore up sensitive information. "For some reason, people often see this as a negative thing [that implies their network isn't secure]. To encrypt an email, all you need to do is enter a username and password, which is maybe five to 10 seconds of your time," she says. "We have automatic encryption software that will encrypt a message if you write a string of numbers [in the body], write the word 'secure,' or other keywords." During one consultation, Bearfield says she showed a CEO how easy it was to access his email by asking him how his daughter enjoyed life after getting her braces off. "All it takes is one message before you realize how important encryption is," she says.

    Dedicate more resources to IT.

    IT spending is one of the most forward-thinking investments you can make in your business. "Many organizations do not dedicate resources to their IT departments. Without proper investment, these IT departments are constantly putting out fires and don't have the time or ability to address other important concerns," Bearfield says. "They can't keep up with patching, which can leave vulnerabilities exposed for weeks, or months, if not longer."

  • 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.

  • Because sometimes the best reason is no reason at all

    The first thing the old man said to me was, "The cows don't come by here anymore."

    A few years ago, I liked to ride my bike on the roads that snake along a local mountain range. The views were beautiful, and there were plenty of hills to climb. It was friendly and country (in the best sense of the word), and the people sitting on their front porches always waved.

    One old man was almost always sitting alone, and I made a point of waving to him.

    Then one day, caught in a driving rain, I glanced sideways and saw him waving me off the road and onto his porch. I leaned my bike on the rail and clomped up the steps as he pulled a dusty wooden chair from behind an old coal box for me to sit on.

    And then he started talking.

    He told me the cows used to slowly drift by every day as they grazed the fencerow across the road. (His favorite was an older cow that always pushed her head through the fence as if to see whether the grass really was greener on the other side.) Why they no longer came by was a puzzle he had yet to solve.

    He told me his mail was delivered every day at about the same time. He could tell how his carrier's day was going by the size of her smile. He told me he knew the lack of rain had hurt local farmers because lately they hadn't been hauling nearly as many hay rolls. He told me the girl up the road had just gotten her driver's license. Whenever he saw her go by, he tried to watch for her to come home because he worried about young drivers.

    He also talked about me.

    "Some days you ride that thing a little like that cancer fella I used to see on TV, but most of the time you look like somebody stuck me on there," he said. Then he smiled, taking any sting out.

    As he spoke, I thought he seemed lonely, almost desperately so. Then I realized he wasn't lonely, at least not in the way I assumed. Though he had met very few of the people he watched go by, his porch still gave him a very real connection to his community.

    He could tell when neighbors were getting company and was happy they had friends who wanted to visit. He enjoyed watching families drive by on their way to church, even though Sundays were bittersweet because the mail didn't come and he didn't get to wave to his carrier. He even worried about me, until that day a stranger, because he thought it was dangerous for people to ride bicycles near cars.

    He watched and wondered, but not in a nosy or critical way. He seemed to only see the good in the people he saw from his porch.

    And that was why, on a couple of cloudless days, I would stop and visit instead of waving and riding by. I wouldn't bring food or a token gift, even though that's what people like me tend to do in return for kindness or courtesy. Instead I just stopped to find out what was new.

    Maybe he would tell me the local farmers' crops were doing better. Maybe he'd tell me the young girl up the road was still safe. Maybe he would have puzzled out why the cows didn't come by anymore.

    It didn't matter. He just wanted to talk. I could tell. He always left my chair out.

    And then one day my chair was gone.

    So was his chair. So were the tools scattered around the yard, the old Buick in the driveway, the worn curtains in the windows.

    And so was he.

    How often had I stopped? How often had I sat and listened? How often had I taken time away from work and fitness and personal goals and striving for success to be a friend to someone who clearly needed a friend?

    Not often enough. Not nearly often enough.

    We all have people in our lives that leave a chair out for us, only to die a little inside when that chair sits empty.

    Once in a while--before it's too late for you, or for them, or for your relationship--take the time to stop and sit and visit for no good reason...

    ... which, when you think about it, is the best reason of all.

    More in my "The Power Of..." series:


N.S Machine Tools

We, NS Machine Tools, incepted in 2013, are well-known manufacturers, supplier and exporter of a ...

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Mark Verge, WestsideRentals

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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 | 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.