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Published: Wed, 07 Aug 2013 13:28:36 -0400


The 'Quantified Self' Craze: Tracking Your Own Data Can Be DangerousThe 'Quantified Self' Craze: Tracking Your Own Data Can Be Dangerous

Wed, 07 Aug 2013 13:28:36 -0400


These days, you can digitally track pretty much everything about your health. But how you interpret that data might be problematic.

With growing numbers of digital health trackers on the market (the wearable tech craze adding more fuel to the fire), it is not surprising that more and more consumers are tracking their health on their own.

An awareness of one’s health is by no means a bad thing, but according to USA Today, there may be some downfalls to this new trend of the "quantified self"-- this idea that one can use data to monitor oneself.

Dennis Nash, president of Data Speaks Health Solutions, told the outlet that the data aggregated by tracking technology can be hard--even dangerous-- to analyze without a doctor. Additionally, he said that the act of tracking can consume users.

“Once you start doing it, you can start to get addicted to collect more data,” he added, saying the stress of monitoring can actually harm a person's health. Even with those obvious dangers in mind, the outlet profiled several data-tracking-to-better-health success stories.

Dangerous or not, just how big is the "quantifiable self" movement?

A recent survey done by the Pew Research Center's Internet & American Life Project found that seven out of 10 people have regularly tracked some aspect of their health. The survey also found that 60 percent of adults track their weight diet and exercise routines, with just 33 percent of people tracking health indicators or symptoms. Tracking has influenced 46 percent of trackers’ approach to their health and it has affected how 34 percent of people tracking their health data have responded to an illness or condition.

And from sleep patterns to weight loss--even a dog's health--it looks like this need for tracking has been somewhat a boon for start-ups.

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Silicon Alley Hiring on the RiseSilicon Alley Hiring on the Rise

Wed, 07 Aug 2013 12:35:29 -0400


After four consecutive quarterly declines, hiring is creeping back up in New York tech.

Silicon Alley hiring is back in a big way.

According to the New York Internet and Digital Media Jobs Index, conducted by talent search firm Cook Associates, New York City's job market showed a 7.3 percent uptick in the second quarter of 2013, its highest point since the second quarter of 2012.

It may not sound like much, but that percentage means the NY tech scene added approximately 2,200 jobs in the second quarter alone. According to Cook, the businesses surveyed represent more than 90 percent of the Internet and digital media workers in New York.

Comparatively, last quarter’s jobs index showed 4.8 percent in growth. Looking back at 2012, when the New York tech boom was slowing, the study showed four consecutive quarterly declines, starting with 6.2 percent in the first quarter and ending with 3.4 percent growth.

"It appears that the digital media and Internet sectors in both Boston and New York are running on all cylinders right now," said John Barrett, the managing director at Cook who conducted the study.

Cook surveyed only pure-play Internet and digital media companies -- from goliaths like Google to up-and-comers like Rent the Runway -- with 10 or more employees. Nearly all companies were financed with venture capital.

The overwhelming majority of hiring is happening in the digital ad tech and consumer web sectors. Unsurprisingly, Google ranked number one among the ten companies showing the largest headcount gains, adding more than 600 jobs over the past 12 months. Amazon came in second with about 330 jobs. The rest included AppNexus, Facebook, Spotify, eBay, ZocDoc, LinkedIn, Yahoo, and TD Ameritrade.

Barrett attributed the trend to a "perfect storm" of factors: As the Internet disrupts established media, advertising, and financial services companies, a massive influx of venture capital money is fueling their companies' growth.

"Venture capital investing in NYC has been surging for the past three to four years, but now the overall economy is strong enough again to help accelerate the growth of many of those start-ups who've received venture funding," he said.

Not all of this is good news, however, as all these employees can't hack their jobs.

"New York City is inevitably headed toward a talent gap," explained Barrett, adding that the digital headcount is projected to double in the next four years. "The surge in growth that's been happening the past couple of years in unsustainable unless the city has the right talent to fill these jobs."

Most of the hiring has been for sales and marketing, with the biggest gap being in software engineers. But Barrett said the VC community should invest in tomorrow's tech leaders. "The VC investors perhaps have the most to gain from making sure there's an adequate talent pool to make the most of their investment dollars."

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The Start-up Giving Factory Workers a VoiceThe Start-up Giving Factory Workers a Voice

Wed, 07 Aug 2013 12:07:12 -0400

LaborVoices helps companies like Walmart end labor abuses in overseas factories by giving employees a safe way to speak up.Labor rights around the world are in a sorry state. So sorry, in fact, that last week, when China Labor Watch released a damning account of conditions inside the Pegatron factory where some Apple products are manufactured, the tech community all but ignored the labor issues listed. Instead, they breathlessly buzzed about the low-priced, plastic iPhone revealed in the report.The fact is, the pitiful working conditions in many of the world's factories seem to be such an insurmountable problem that when news of this sort breaks, it's typically met with a collective shrug or considered old news in the developed world. It seems to take a total catastrophe like the factory collapse that left 1,132 dead in Bangladesh this April to get people's attention.Kohl Gill is one entrepreneur who's not looking away. As founder and CEO of LaborVoices, a six employee company based in Sunnyvale, California, he wants to change factories from the inside out by arming workers with information and an anonymous way to report abuses. LaborVoices has created what Gill refers to as a "smartline," a number workers can call to get access to information about their rights as well as services that can assist them with things like transportation and childcare. LaborVoices also conducts automated surveys with the callers, asking them questions about the how they're being treated and compensated and gives them the opportunity to report any urgent issues. Each caller is given an anonymous profile so LaborVoices can track these workers over time.For this trove of data, major brands are willing to pay LaborVoices handsomely. This May, the start-up announced its first corporate partnership: a $600,000 deal to work with Walmart on cleaning up 279 of its factories in Bangladesh."These companies care about being able to provide work, and decent work, to everyone in their supply chain. They just haven't had access to real-time metrics to measure social responsibility," Gill says. "We think having a real-time view of the supply chain will give brands more control over whether those rights are being respected."The BackstoryWhen Gill was growing up, his own mother, who had come to the United States from India as a teenager, worked at a local garment factory in Sherman, Mississippi. As outsourcing became more common, however, the factory eventually shut down. "We began shifting our jobs overseas, but not our working conditions," Gill says. "It got me thinking that if we're going to outsource jobs, we need to also ship over our labor and environmental standards."In 2008, he began working in the State Department as an international labor affairs and corporate social responsibility officer. It was in that position that he traveled to Sri Lanka and Bangladesh to ensure both countries were upholding international labor rights provisions. Though the factories, themselves, had been cleaned up for his arrival, Gill says he heard story after story of employees who had spoken up about labor abuses and been subsequently blacklisted."They essentially couldn't get a job anywhere because all of the factories were sharing that list of workers," he says. "I thought, if employers are sharing information on workers, shouldn't the opposite be possible as well? At least we could try to make it a level playing field."It wasn't until 2010, when Gill's State Department fellowship ended, that he returned to the Bay Area, and thanks to the encouragement of some friends, decided to launch LaborVoices.How It WorksIn order to engender trust with workers, LaborVoices partners with non-governmental organizations on the ground to spread the word about the service. The company also informs the factory managers, themselves, that they are being monitored."The last thing we want is to surprise them," Gill says. "We want them to know we're listening."Workers can then call in to the automated line either to get assistance or rep[...]

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Why Our Worst-Selling Item Is My FavoriteWhy Our Worst-Selling Item Is My Favorite

Wed, 07 Aug 2013 12:00:41 -0400


Warby Parker sells a monocle. Which just about no one buys. But don't underestimate the value of a great brand statement.

One of my favorite products at Warby Parker also happens to be our worst-selling item: the monocle. When we launched in 2010, our debut collection featured 27 pairs of eyeglasses and one monocle--a handsome tortoiseshell model named after Colonel Mustard. Despite dismal sales and growth prospects that roughly equal zero, the monocle has remained in rotation ever since. My wife Rachel even waged a bet with my co-founder Jeff that we'd never sell out of our first order.

Her skepticism made sense. On its face, a monocle is a strange item for a 21st-century company to sell. It seems like the equivalent of Apple unveiling an iTypewriter or Schwinn manufacturing a penny-farthing bicycle (the kind with the gigantic front wheel). Or SanDisk rolling out a line of floppy disks. In general, obsolete technology is obsolete for a reason. Monocles are no exception.

But that's exactly why I love it. Nobody expects to stumble across a monocle while shopping in 2013. We have a showroom right inside our office headquarters in New York, and one of my favorite things to do is catch sight of customers discovering the monocle. A familiar behavioral arc follows: it starts with a "What the hell?" expression, proceeds to a smile, and usually ends with trying on the monocle, forcing various companions to try on the monocle, imitating a historical figure, and/or snapping a picture.

The truth is that the monocle creates a sense of surprise in customers while maintaining an intuitive connection to our core products--which is an important distinction to make. It's not a random gimmick. We could sell fly-fishing rods or bean bags and provoke an equally surprised response, but it would also be a mystified response. The goal is to surprise customers, not confuse them.

The monocle is also a succinct and quirky way to represent what Warby Parker stands for--in other words, a brand piece. It's unexpected, it starts conversations, and it's fun to share. (Where else can you buy a monocle?) And because it lives entirely outside any remotely relevant trend cycle, it's also, in its own peculiar way, sort of timeless. A handful of chefs have even told me that they use the monocle in their restaurant kitchens to read recipes; it's easy to store in a pocket and doesn't fog up as easily as glasses. I think of it as our own version of the stick of gum that used to come in packs of baseball cards--a small gesture that sets the brand apart.

My wife still owes Jeff ten dollars.

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4 Smart Ways to Keep Things Cool When Tempers Flare4 Smart Ways to Keep Things Cool When Tempers Flare

Wed, 07 Aug 2013 11:30:51 -0400

A new study says: As temperatures rise, so will arguments. Here, Inc. columnists give you their suggestions for keeping your cool in business.Rising heat and extreme rainfall, both related to climate change, will also make people emotionally heated and more likely to get into fights. At least, that's the takeaway from an extensive new study from U.C. Berkeley. Three respected researchers studied the historical correlation between extreme weather and interpersonal conflict. They claim that their results point to large increases in anger, violence and unrest likely to come over the next 50 years.I suppose it's possible that, when people are uncomfortable with their physical environment, they are likely to show it in anger and frustration, especially when the cause is totally out of their control. If nothing else, the prospect of tumult is a great excuse to start making your office a happier place to work. So ramp up the pleasantries and the air conditioner before conflicts occur. Make plans for more social activity where people can lighten up and laugh a little. That way you'll keep things cool and good-humored in any kind of weather.And here's more cool-headed advice from my expert colleagues:1. Plan AheadAnyone who's been in or near New York City for the past few months is familiar with the mood-altering effects of extreme heat interspersed with torrential rain. Be aware of this dynamic and address workplace conflicts early, before they escalate. But there's a much darker side to this: a warming Earth can mean disruptions from power outages, severe storms and global unrest. What would you do if electricity, Internet, phone lines, key personnel or key supplies were temporarily unavailable? Companies that have thought out the answers ahead of time will do better than those that haven't. Minda Zetlin--Start Me UpWant to read more from Minda? Click here. 2. Build Bridges Before Troubled Waters FlowIt's not in the easy conversations that your company is truly tested--it's in how you handle conflict. Dealing with inevitable conflict is one of the most important skills you can develop as a leader and nurture in your company culture. Start by reminding everyone involved that you have the same goal: the very best outcome. Doing so unites all parties and diffuses the tension that can build up when people feel they aren't being heard. Use this common ground as a way to move the conversation forward productively. Eric Holtzclaw--Lean ForwardWant to read more from Eric? Click here3. Promote Health and SerenityFrankly, this whole theory pushes my hot button. Researchers can link violence to just about anything if they look hard enough. Why waste valuable resources to predict tragedy and upheaval instead of focusing on the evolution of technology and the human mind? Whatever the future brings, mankind will manage to thrive. Added dimensions of corporate social responsibility will help. Empower employees with programs that promote a healthy and peaceful environment. Teach advanced communication skills, educate on diversity and bulk up the benefits package to offer tools that improve stress levels and brain function, like meditation and life coaching. Marla Tabaka--The Successful SoloistWant to read more from Marla? Click here.4. Gratitude Is the Perfect RemedyWhen you're feeling angry or upset, drop everything and handwrite a thank-you note. You'll instantly feel better, as it's physiologically impossible to experience both anger and gratitude at once. You can even institute a thank-you note writing program at the office, as Likeable did last summer. We went from feeling heated to feeling appreciative and appreciated--and so can you. Dave Kerpen--Likeable LeadershipWant to read more from Dave? Click here.Like this post? If so, sign up here and never miss out on this weekly roundtable.[...]

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Let the Crowd Build Your CompanyLet the Crowd Build Your Company

Wed, 07 Aug 2013 11:15:00 -0400

Hiring a full-time employee is tricky. Lucky for you, there is power in the crowd.One day, I was on stage giving a speech, when I spotted a young woman in the back of the room with only one leg and a pair of crutches. As I was speaking, she got up to get a glass of water and fell. I was horrified.After my talk, I went into the audience to find her. It turns out she had lost her leg in a terrible auto accident and couldn't afford a prosthetic. As a result, she fell a lot, and as a single mother she struggled even more.What immediately came to mind was crowdfunding. Can the community come together to solve a problem? Of course it can, so I turned to a start-up called, for which I am an advisor. GiveForward uses crowdfunding to raise money for medical expenses so people can afford their medical care. Today she is walking and holding her child.An Untapped Resource There's lot of talk these days about crowdfunding and crowdsourcing applications. The most visible discussion centers on using the Internet to fund start-ups and other ideas such as independent films. But for all the chatter, many small business owners aren't thinking broadly enough about how to tap into this amazing resource.Before you think about hiring your next full time employee, consider the crowd. Are there people who could solve a problem for you, for less? That's the beauty of crowdsourcing. You can farm out your work to people all over the world, and often only pay the one whose work you like best. At times you can pay on a per project basis, rather than taking someone on board full-time.But that isn't all crowdsourcing can do. If you need software developed, rather than hire a full-time programmer, consider tapping the community for development work. Companies such as TopCoder have nearly 500,000 developers in the network worldwide, or ODesk, a global micro-tasking community of web developers, software designers, translators, and so on, are both good bets.If you need graphic design work or customized website or logo design, check out sites like 99 Designs, a marketplace where creative submit logos, graphic designs, website design, and more; and CrowdSpring, which is similar to 99 Designs but has over 100,000 designers in more than 200 countries.When I was CEO of and, we used CrowdSpring to get logo ideas from all over the world and discovered incredible talent at a fraction of our budget. You may still choose a traditional design agency for your marketing needs, but check out crowdsourcing as an alternative.There are companies who can outsource content development for online brands, such as, which has over 500,000 workers who create, manage, and moderate content remotely; and companies who can crowdsource your entire product development process, such as Quirky, an outsourced community of product designers who use the crowd's opinion to refine your new product designs.Make a list of what you need to do to grow your company successfully. Separate the tasks into categories like Design, Development, Content Creation, Marketing, etc., then go out and search for crowdsourcing companies in every one of those categories.You'll be amazed at what the crowd can do for you.[...]

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How a 15,000-Mile Road Trip Inspired This Cool Radio AppHow a 15,000-Mile Road Trip Inspired This Cool Radio App

Wed, 07 Aug 2013 11:01:00 -0400

A fourth-time entrepreneur set out on the road--and came back with a plan to supplant the satellite radio industry. Here's why he might succeed.In 2011, J.D. Heilprin, a serial entrepreneur, had just sold his third company--Modern Feed, a Web TV surfing tool--and set out looking for inspiration. Literally. He got in his car, which he now refers to as his "test lab," and drove nearly 15,000 miles across the United States. He started in California, spent time in Texas, stopped off in New Orleans, drove to New York--and then all the way back to California. Naturally, he spent a lot of time fumbling around with the radio, searching for programs he wanted to listen to--when the idea struck him. "I recognized that existing, traditional platforms were dinosaurs," he says. "They were linear, not targeted, and they had horrible advertising." He decided to create a solution. The IdeaBack in San Francisco, Heilprin assembled a team of about 15 engineers, raised north of $1 million in seed funding, and began working on what would eventually become AGOGO, a free iOS app--which launches today--that curates some of the best audio podcasts on the Web into an elegant, simple, personalized app. AGOGO is an example of smart editorial curation--there are literally thousands of hours of free, existing audio programming on the Web, but few portals exist to help users find or discover them. The way AGOGO works is simple: you choose from one of several categories--be it finance, news, arts, food, or politics--and AGOGO serves up the most relevant, recent, and interesting audio files on the Web. It's all personalized so that the content you're most interested in is always queued up and ready to go whenever you open the app. At the same time, it also integrates premium and paid music services like Spotify and Rdio, allowing you to toggle between news programs and music. AGOGO is also launching a dashboard for the Web--similar to Spotify or Pandora--that allows you to listen in from a desktop or laptop. Plus, everything syncs.For Heilprin, building AGOGO was a somewhat natural progression from his previous business, Modern Feed, which launched as That start-up--which was acquired by CBS--let users browse different Web TV shows, videos, and save other content into one single playlist. In that sense, both AGOGO and are based on a very similar concept: there's lots of good stuff out there on the Web, but finding it, saving it, and consuming it when you have some spare time can be tricky. The Business ModelSince AGOGO doesn't create any of its own content, you might think publishers would be turned off by it. After all, it allows users to consume its media without ever having to interact with the publisher's own brand. But Heilprin insists that publishers have responded kindly to the app so far--especially because it doesn't actually interfere with their own revenue streams. "We started out really early showing the prototype to publishers," Heilprin says. "The response was uniform. It gets people to their programming. We don't touch their advertising. Publishers loved it."In the short-term, AGOGO won't be generating any revenue--the app is free and there are no ads beyond any ads included in a publisher's original broadcast. But once the app has hit a certain level of scale and attracted enough users, Heilprin believes the service would be an attractive vehicle for brands and advertisers interested in hyper-targeted ads. After all, you could probably tell a lot about a person based on which programs they choose to listen to. The GoalUltimately, Heilprin believes AGOGO can one day supplant satellite radio as the premier destination for all-things-audio. "Twenty-five million people pay for satellite radio," says. "The market is tremendous. With AGOGO, the idea is to make it one touch, but it’s also about making the journey to discover new stories."[...]

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Hiring? Don't Underestimate the SpecialistsHiring? Don't Underestimate the Specialists

Wed, 07 Aug 2013 11:00:35 -0400

New research shows basketball coaches--and managers--have a bias for generalists to the detriment of their teams.People, according to the philosopher Isaiah Berlin’s famous essay, can be divided into either foxes, who know many things, and hedgehogs, who know one big thing.Ever since, thinkers have been arguing over the relevant value of the two approaches, but whatever the state of the debate among philosophers, it appears that here in more immediately practical realms the question has already been functionally decided -- coaches and managers, new research, reveals, favor foxes and undervalue hedgehogs.The finding comes out of the Kellogg School where a basketball-obsessed doctoral student Long Wang noticed that three-point shot experts, while immensely valuable in changing the dynamics of the game and the success of their teams, were generally relatively uncelebrated. Were coaches giving these specialists their due, he wondered?Together with his advisor he designed a series of the studies to look into whether specialists’ impact exceeds their esteem among coaches and fans. What did he find? “On average, the three-point specialists’ salaries are tied not to their three-point shooting, but to their two-point shooting--even though their three-point shooting has the bigger impact on their team’s performance. In other words, these specialists, unlike their generalist teammates, are not compensated based on the actual role they play in their teams’ success,” Kellogg insight explains.NBA fans given a fantasy basketball type challenge where they were asked to choose players for an imaginary team also preferred generalists over specialists, even when they were explicitly told the team needed the services of a three-point shooter. All of which is of great interest to basketball coaches and fans, but it turns out the findings are equally relevant to business owners. Further studies showed this pro-generalist bias isn’t confined to sports.What This Means to You"It is a tendency that extends to the workplace as well," Kellogg Insight reports. "In another study... participants posing as hiring managers overlooked the specialist better equipped to fill the job at hand in favor of a generalist with more overall experience." A further study showed job ads that asked for specialists actually also demanded applicants have skills in more than one domain more than a third of the time, again demonstrating our hesitancy to embrace the true specialist.So what’s the cure for all this hedgehog hate?Hiring managers preference for foxes is rooted in their tendency to be foxes themselves and the natural impulse to compare specialists with generalists side by side, which often results in what looks like a long-list of deficits for the hedgehog even though their one standout skill may be exactly what the team needs.The solution, according to the research team, is to try and think of yourself as a conductor, bringing together a group of players with varied skill sets to make a harmonious whole much the way an orchestra is a blended group of specialists.What else helps? “Try to keep the comparisons between generalists and specialists to a minimum,” advises Kellogg Insight. “The generalist bias can be reduced when participants are encouraged to judge specialists on their own terms, as opposed to comparing them to generalists.”Check out the complete article for a deep dive into the research.Look around your office. How many true specialists do you see? Should their be more? [...]

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Why Innovation Requires SalespeopleWhy Innovation Requires Salespeople

Wed, 07 Aug 2013 10:50:22 -0400


Innovation dies on the vine unless somebody make a human-to-human connection.

Last week's New Yorker magazine includes an article by Atul Gawande describing how innovation spreads. While we are accustomed to think of technology as "changing the world," those changes only take place because of, well, salespeople.

As Gawande explains:

"In the era of the iPhone, Facebook, and Twitter...we want frictionless, "turnkey" solutions to the major difficulties of the world--hunger, disease, poverty. We prefer instructional videos to teachers, drones to troops, incentives to institutions."

This concept that technology changes the world is fundamentally flawed, however.

"People follow the lead of other people they know and trust when they decide whether to take it up. Every change takes effort, and the decision to make that effort is a social process." (Emphasis mine.)

In other words, innovation spreads from person-to-person, even when people are made aware of that innovation through mass media. That's why advertising a crummy product is always a waste of money.

Think about it! The iPhone became popular not because Steve Jobs said it was insanely great (he said the same thing about Apple TV, after all) but because early adopters recommended it to their friends, who recommended to their friends, and so forth.

Which leads us to salespeople.

While some innovations may go viral (i.e. spreading from person to person), most innovations require a salesperson to help customers go through the often-difficult process of changing how they behave.

Gawande points out that this kind of handholding requires building a relationship first, and only then, after there's a relationship, are customers willing to consider changing they way they do things.

Gawande tells the story of asking a pharmaceutical sales rep "how he persuaded doctors--who are notoriously stubborn--to adopt a new medicine." The rep told him that "Evidence is not remotely enough...however strong a case you may have."

This, incidentally, is why the entire "relationship selling is dead so wow the customer with your brilliant insights" concept (see "The Challenger Sale") is so ridiculously inept. Truth: if you can't build a relationship, you won't sell anything to anybody.

Gawande's pharmaceutical rep was a believer in the old sales theory of "the rule of seven touches," where you have to "touch" the customer seven times, so that they know you, might trust you, and trusting you, might try (or buy) something different...from you.

So there you have it. It's people who make innovation spread, not technology. And with the exception of very simple offerings (like smartphones), it's not just's the salespeople who change the world.

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

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How Much Will You Walk Away With?How Much Will You Walk Away With?

Wed, 07 Aug 2013 10:45:01 -0400


By the time most entrepreneurs think about so-called founder economics, it's much too late.

Writing as The Deal Professor for The New York Times, Steven Davidoff has been examining the many cases in which a venture backed company is “successfully” sold, yet the entrepreneurs who built it receive very little. The headline-grabbing case, three months ago, was the sale of Bloodhound Technologies. The five members of the founding team, all of whom had left the company in 2000, received a total of $36,000 on a $82.5 million sale. One founder actually received a check for $99. Most venture-backed exits don’t receive that amount of attention, yet there’s suspicion that many are similarly disadvantageous to founders. After years as founders, angel investors, venture capitalists, and even participants in shareholder lawsuits, my partner and I can say with certainty that the time to address so-called founder economics--that’s how much you, the founder, are going to get when you leave your company--is when the first money is raised. Founder economics need to be addressed again at every subsequent round of funding. If you wait until the exit or liquidation is upon you, you’ll have very little leverage. Re-negotiating the capital structure during each round of financing helps to avoid an ever-increasing stack of liquidation preferences, cumulative dividends and other preferred terms. And it enables the entrepreneurial team to benefit from the increase in shareholder value that they’ve created. Yes, venture capital is governed by the golden rule: If you have the gold, you make the rules. But there are still plenty of opportunities for entrepreneurial teams to negotiate, protect and strengthen their stakes. The best situation is the one is which you and your team have clearly created economic value for your shareholders. Generally, this means you’re raising money at a higher valuation than your last round (an “up round”) and that valuation is confirmed by qualified outside investors. In this situation, you want your team to be moving forward on terms that are roughly equal to those of your existing investors. To do that, you’ve probably got to eliminate or water down many of the provisions of the preferred stock. One way to do this without sending your investors into a fit is called tapering. As your company hits various milestones - raises more money, reaches a particular valuation, or achieves operational or revenue goals - the features of the preferred stock are gradually and automatically phased out. This makes a potential renegotiation of deal terms easier for venture capitalists to accept. If you’re in the unfortunate situation of raising a down round, you can expect that your stake, and those of the other shareholders, is going to be diluted dramatically. In this case, the company may very well be distressed, and looking for an acquirer. But you and your team may still have some leverage. The investors want the highest price for the company. You and your management team may not have much incentive to go after that higher price, because between dilution and any liquidation preferences, a higher price will barely affect you. So in many cases, the board of directors will agree to a carve-out of the sale proceeds (above an agreed-upon target amount) for the founding team or for senior management. They want the highest price for your company, and they may not be able to get it without you.

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Take a Summer Vacation Yet? Here's Why You MustTake a Summer Vacation Yet? Here's Why You Must

Wed, 07 Aug 2013 10:15:00 -0400


And we're not just talking about a Friday here and there. There's no substitute for disconnecting from work for a solid chunk of time.

It seems like every account of a successful start-up features the same description: working endless hours. Weekends! Late nights! Leaving the entrepreneur's family, not to mention his or her health, neglected. Never taking any time off.

You could easily come to believe this is the best way to run a start-up. It's not. Taking vacations is not only essential for your health, but also for the health of your relationships. Your business needs you to do it as well. There's ample evidence to show that you'll work better, smarter, more productively, and more creatively if you make sure to take a break on a regular basis, says Dale Carnegie CEO Peter Handal.

"The question shouldn't be whether you'll take a vacation, but how and when," he says. "From a business owner's point of view, it should be something you consider important, just as it's important to achieve your top-line goals."

And, he advises:

1. Take time off at least once a year.

Can't find a good time to get out of the office? How about the week between Christmas and New Year's? "For a retail business, the week between Christmas and New Year's can be really busy, but for many other types of businesses, it's an ideal time," Handal says.

2. Take a whole week--at least.

"At Dale Carnegie, we frown on people taking X amount of Fridays off," he says. "That's not the same as a full solid period of time when they're totally relaxing and getting away from work."

3. Try not to check your email.

"Vacations turn into a horror show when I don't put an out-of-office message out, and I'm constantly checking things and calling the office," Handal says. "The best way is to really try to disconnect."

Admittedly, if you're the owner and there's a crisis in the office or a big transaction you need to see completed, it may not be possible to completely turn your work life off. "But that's not the best way to have a vacation," he says.

4. Spend the time doing something you love.

OK, so what is the best way to have a vacation? The answer is different for everyone, Handal says. "Each person is different. My wife's idea of an ideal vacation is reading some great books she has loaded on her iPad. My ideal vacation is hiking or running. Some people like to be by the beach." Whatever you do, make sure to immerse yourself in something you consider enjoyable, he says.

5. Make sure your employees take time off too.

Just like you, your staff will be more productive if you make sure they all take time off. At Dale Carnegie, Handal says, vacation time can't be carried from one year to the next for just this reason.

Dale Carnegie research shows clearly that the more engaged employees are, the more productive and creative they are, he says. And that employees who take vacations have greater engagement. "Machines can run 24 hours a day, but people aren't like that," he says. "They really need to have time off--and it's not optional in terms of how efficient they can be."

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What's Your Sustainability Tolerance?What's Your Sustainability Tolerance?

Wed, 07 Aug 2013 10:00:00 -0400


A California company asked its workers this question and their answer prompted a green investment that's paying both financial and cultural dividends.

Sure, you could call them hippies. The 120 bakers, buyers, and executives who run Alvarado Street Bakery -- one of an estimated 300 worker cooperatives in the U.S.--are proud stewards of the environment. For 34 years, the bakery has produced organic whole grain breads using methods that practically scream "green."

But the greenest of Alvarado folks, when considering sustainability initiatives, understood that even the most earth-friendly strategy would fail if it drained company coffers. That's why the co-op's early interest in solar-energy projects went nowhere, explains CEO Joseph Tuck. Solar power was "neither affordable nor cost effective" even 10 years ago.

"Our commitment to sustainability and not exploiting workers or the environment is our mission, so it was not a hard leap for us to investigate solar again," Tuck tells The Build Network. "The question was really how much we, as workers, would be willing to sacrifice--in terms of our wages--to implement solar. We were willing to sacrifice to a point; it was a question of our limit."

After a series of meetings, conversations, and straw votes, Tuck determined that employees were willing to forgo roughly $1,000 per year in compensation to make solar panels a reality. ("In our system, costs impact compensation directly, as the workers are the owners," he explains.) If the company could stay within employees' financial comfort zone while demonstrating its commitment to sustainable energy, it would score big cultural--and environmental--gains.

With that in mind, the co-op conducted an ROI study and subsequently voted to use cash (and a 30 percent government subsidy) to finance the $1.8 million installation of 1,722 solar roof panels in 2010. Today, 40 percent of the company's energy--some 2,000 kilowatt hours a day--comes from this clean, renewable source.

What's more, the solar initiative puts $200 a year in each worker's pocket. "Future savings now depend on how fast energy prices rise in relationship to inflation," Tuck says.

As if that weren't motivating enough, the company also keeps a running tally of its CO2 impact online: It would take 33,631 mature trees one year to reduce the total amount of C02 avoided. The total amount of C02 avoided is equal to 5,710,590 miles driven in a family sedan. The total amount of energy generated would power 1,311 houses for one month.

Though less quantifiable, the cultural and marketing impact cannot be ignored. "This makes all of us feel that much better about being part of the business," Tuck says. "Plus, 'bread baked by the sun' has a really nice ring to it."

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What's Happening With Tech Start-up M&As in 2013What's Happening With Tech Start-up M&As in 2013

Wed, 07 Aug 2013 09:40:00 -0400


The M&A market continues its recovery from the slowdown during the Great Recession--but that's not the whole story.

An entrepreneur always has to keep an eye on potential exit strategies. They help you understand greater industry strategies, gain competitive intelligence, and better undertake strategic planning.

According to M&A analyst firm Mergermarket, deals in technology, media, and telecommunications, which it calls TMT, are well up year over year. The year seems to have gotten off to a resoundingly good start. TMT deals during the period from January 1 through July 29--so just over half a year--amounted to $232.5 billion globally, representing nearly 22 percent of all M&A deals. That was up from 13 percent of deals in the same period of 2012. The first half of the year, so through June 30, the total was $166.2 billion. It's the largest first half since 2008, which you could also see as good news.

The Bad News

Now for some major caveats. There have been a couple of huge deals that had an outsized influence on the results. For example, the first half of the year includes the announced and troubled intention for Dell to go private in an originally planned $24.4 billion buyout, which has since gone grown to about $25 billion. For some reason, Mergermarket valued the deal at $20.2 billion. ) Take out Liberty Media's acquisition of Virgin Media early in the year and the total loses another $16 billion out.

Similarly, looking at deals through July includes the announced enormous merger between ad agencies Omnicom Group and Publicis Groupe, valued at around $35 billion. Remove that from the 7-month total and things look less impressive.

It's not that large deals don't count. Far from it. But removing the outliers gives you a better sense of what is happening in the bulk of M&A. The number of deals in the U.S. so far is 358, down from 467 deals in the same period of 2012, though the amount of money involved nearly doubled. When you compare the number of deals in the U.S. since 2004 and remember that 2013 is far from over, it looks as though M&A activity continues to move out of the 2009/2010 slump it saw during the major recession, as the Megamerger graph shows below.

According to the firm, tech companies were the most frequently targeted, as there were 687 deals in that sector. But deal values so far are down 2.4 percent and volume is down more than 23 percent. So even with the number of acquisitions that Apple, Google, and Yahoo have been cranking out this year, shopping the company might be more difficult.

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Lead With Enthusiasm: 4 TipsLead With Enthusiasm: 4 Tips

Wed, 07 Aug 2013 09:13:27 -0400

Enthusiasm is one of the most powerful motivational tools in a business leader's arsenal. Indulge.One of my fondest childhood memories is from my first year in tee ball.For those of you not familiar with it, tee ball is often the very first baseball league for young players. Instead of having a ball pitched to them, hitters stand and try to hit a ball that sits upon a tee. Often, a player will swing ungracefully several times before making solid contact with the ball ... at which time all hell breaks loose as every member of the defensive team madly rushes to snare the ball in play. Imagine throwing a piece of meat into a cage with nine hungry feral cats.While I remember very little from my time in tee ball, I remember one particular play quite vividly. It came in the middle of a game as I was playing somewhere in right field. A batter from the opposing team hit the ball from the tee, in the air, directly toward me. I vaguely remember seeing the ball being hit, and I am fairly certain I made no attempt to move in any direction. I simply held up my oversized glove, closed my eyes tight ... and caught the ball.In tee ball, catching a fly ball is akin to parting the sea.Of course, at the time, I could not have told you the implications of that catch or how improbable it was. What made the play memorable was the reaction of our coach, Coach Kelly. Coach Kelly charged out of the dugout, ran across the field toward me with arms outstretched and a huge smile, lifted me up in the air ... and hugged me.At that moment, I knew exactly how important that catch was.That play, and my entire first year in baseball, could have slipped away into the cloudy abyss of my childhood memories forever had it not been for that demonstration of enthusiasm by Coach Kelly. From that moment on, I was hooked on the game of baseball.Clearly, enthusiasm is valuable in more than organized sports. Business leaders can and should leverage enthusiasm to motivate teams and entire organizations to overcome challenges and reach improbable goals. Used improperly, however, enthusiasm can become a detriment. Here are four tips to channel your inner Coach Kelly.Be authentic. Fake enthusiasm stinks like a politician's stump speech, and your team will see right through your artificiality. Be true to the cause and to yourself. Of course, some individuals are simply not as excitable as others, but that is what makes demonstrations of enthusiasm so powerful and awesome. If you aren't particularly demonstrative, try giving in to the inclination to get excited about a project or task at work, and then sit back and watch how contagious it can be.Be spontaneous. Your team will learn to tune out your enthusiasm if you run through the office high-fiving people every day. Learn to keep your enthusiasm in check and know the best times to really let lose. Sometimes, a random "attaboy" or a morning donut run will be the spark that gets a team excited for the rest of the week.Be unconventional. Enthusiasm is about making an impression. Learn to be enthusiastic in new ways. Throw an office party, organize a team-building event, bring a karaoke machine (and sing) for an impromptu staff meeting. Like many other things, enthusiasm is best in moderation, so do not get so carried away that you end up losing face in the process.Be unselfish The focus of your enthusiasm should be on others. A good leader is great at impressing upon a team the importance of a task and making team members feel important and valuable. An enthusiastic leader is good at showing it.I remember very little from my childhood. But Coach Kelly, sprinting from the dugout and hugging me in the outfield after that catch, still lingers in my psyche. That single pl[...]

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Five Dumb Things Investors Want You To Stop DoingFive Dumb Things Investors Want You To Stop Doing

Wed, 07 Aug 2013 08:57:34 -0400

Any of these mistakes will kill a deal. And they're easy to avoid.According to the Kauffman Foundation, women-founded businesses account for four to nine percent of venture capital investments. Guys get the rest.The gender gap is startling, but there’s actually quite a lot we can do about it. I sat in on Jeanne Sullivan’s “How to the Wallets Out of Investor’s Pockets” salon discussion at this year’s We Own It Summit in London. Sullivan is a founder and partner at StarVest Partners and serves on the Astia Board of Trustees with me. She also chairs Astia’s NYC Advisory Board. Sullivan gives some of the best pragmatic, life-changing advice of any business expert out there, so I was expecting big things. She and her panelists, Sam Horn, President of The Intrigue Agency, and Adam Quinton, Founder and CEO of Lucas Point Ventures, a Founding Astia Angel, and Astia Global Advisory Board Member, did not disappoint.All pumped up from the session, I asked Sullivan what an entrepreneur would need to in order for her to take her own wallet out of her pocketbook. Sullivan replied, “Start by avoiding the top five dumb mistakes I see way too often.” Whether you are just beginning your fundraising marathon or you are in the midst, use these five mistakes as your personal checklist.Mistake #1: Your answer to a financial question is a blank stareUnderstanding and living by the financials of business are not a nice-to-have, it’s a must-have. If hearing this makes you want to run for the hills, don’t worry. Sullivan truly believes that anyone can learn this stuff. Until you are financially fluent, meaning that you have sharpened your thinking, analysis and ability to articulate the numbers, have someone at your side to support the financial discussion. Remember, you are asking people to invest a lot of money. They have to feel confident that their bet has a shot of paying off.Mistake #2: No prior thinking or articulation about your go-to-market strategyWhile it’s great that your product or service is wonderful and everyone needs it, you have to articulate how you are going to get your offering into the hands of customers. Sullivan says, “Start with how your offering fits into the marketplace to set the stage for your go-to-market strategy.” Don’t stop there. Have definitive metrics on-hand about your customer acquisition and top-line growth goals, and what channel strategies you will use to get there. Mistake #3: You're blinded by product love“’Let me show you a demo’ is the marker that a CEO is in love with the product and not with the business of the business,” says Sullivan. An investor is putting money into you and your business. Whereas a customer cares about how your product or service makes his or her life better, an investor is looking at you and deciding if YOU are the next big thing. Can you lead the company to outperform the competition in all aspects of the business? The product is only one part of that investment consideration.Stupid Mistake #4: You packed everything including the kitchen sink into presentation, but you forgot about the packaging.A “lack of ability to package the product or service” creates all sorts of red flags for an investor. A great pitch includes a short description of your offering’s unfair competitive advantage. “Include your plans for hiring the team and describe the next steps to execute that will enable you to achieve revenue traction,” says Sullivan.Stupid Mistake #5: Your only assets are a team, a dream, a PowerPoint and a dogIt’s your job to find the right investor fo[...]

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6 Entrepreneurs Who Purchased a Paper6 Entrepreneurs Who Purchased a Paper

Tue, 06 Aug 2013 16:00:13 -0400

Jeff Bezos wasn't the first mogul to buy a print paper. Here's a look at five other magnates who did the same thing.Yesterday, Jeff Bezos, CEO of Amazon, bought The Washington Post Co. from the Graham family -- who owned the paper for 80 years -- for $250 million in cash. He isn't first entrepreneur to pull such a move. Bezos, who is worth of $25.2 billion, is only of many. Here's a look at the entprereneurs in his company: John Henry, The Boston Globe Just days before Bezos purchased The Post, John Henry bought The Boston Globe from The New York Times Co. for a cool $70 million. Henry, who's worth $1.5 billion, is also the proud owner of the New England Sports Network, a NASCAR racing team, and a Liverpool soccer club. (Image: Getty)Warren Buffett, The Press of Atlantic City Warren Buffett's Berkshire Hathaway bought The Press of Atlantic City from Abarta, a Pittsburg-based, family-owned holding company, for an undisclosed amount in July. Buying The Press wasn't anything new for Berkshire, which has 31 dailies to its name. In fact, Buffett admits his strategy is to gobble up as many community newspapers as he can because they generate profits through ads and the classifieds. Though Buffett told CNBC that he doesn't expect the dailies to "move the needle" at Berkshire, he believes they can bring an annual return of 10 percent. (Image: Wikimedia)Carlos Slim, The New York Times Co. Helú was once the richest man in the world with $53.5 billion to his name. In 2009, he bought a 7 percent stake in The New York Times Co. for $250 million. Two years later, he bought additional shares, bringing his ownership stake to just over 7 percent. Slim and his family hold a warrant to buy nearly 16 million shares, but they must do so before 2015. (Image: itupictures / Zell, The Tribune Co. Zell purchased The Tribune Co. back in 2007 for $8.2 billion, but things didn't go so well. Its eight newspapers, including The Chicago Tribune and The Los Angeles Times, as well as 23 local television stations, were hampered by debt and massive cuts to ad revenue. Zell thought he could turn things around by taking the company private and selling off pieces to turn a profit. But months after the deal, the Great Recession hit, and less than a year later, Tribune Co. filed for Chapter 11. Soon it was the biggest bankruptcy case in the American media industry, with $13 billion in debt. Before leaving the company to senior debt holders in 2010, Zell told The Wall Street Journal: "What precipitated the filing was a huge erosion in revenue and a total lack of visibility going forward. That's a tsunami you can't swim up against." (Image: AP)Alan Smolinisky, the Palisadian-PostAlan Smolinisky, 33, fulfilled his life-long dream of owning a newspaper in 2012 when he purchased his local Californian weekly, the Palisadian-Post. Smolinisky, who grew up in the Pacific Palisades, said he hasn't caught on to the web, never used social media platforms like Facebook and Twitter, and reads five papers cover to cover every morning. Buying the paper wasn't a power move so much as a personal one, told The L.A. Times: "I have a moral obligation to make sure this newspaper arrives every Thursday for as long as I live." (Image: LA Times)Brian Tierney, The Philadelphia EnquirerBrian Tierney, a former PR mogul known to fight with reporters, formed Philadelphia Media Holdings with investors. He bought The Philadelphia Inquirer, Philadelphia Daily News, and for $515 million in 2006. Shortly after the deal, he became publisher of The Inquirer. After seeing a 10 percent decline in ad revenue and accumulating debt worth $350 million, Philadelphia Med[...]

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2 Things That Make for a Promising Business Strategy [VIDEO]2 Things That Make for a Promising Business Strategy [VIDEO]

Tue, 06 Aug 2013 15:52:09 -0400


The recently returned CEO of Procter & Gamble describes how to effectively bring creative ideas to market.

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'Follow the Money' and Other Lessons From Jeff Bezos'Follow the Money' and Other Lessons From Jeff Bezos

Tue, 06 Aug 2013 13:30:00 -0400

Sixteen years ago, Jeff Bezos told Inc. magazine why brands matter. Here's what that interview (and a few other sources) tell us about his plans for The Washington Post.My first reaction to the news that Amazon founder Jeff Bezos had bought The Washington Post was stunned silence. My second reaction was laughter after reading a tweet about what Bezos's personal Amazon page might be telling him today. Overall, however, my reaction is one of optimism. I have a deep affinity for The Post. I was inspired as a middle schooler to get into journalism after reading a dog-eared copy of All the President's Men, and much later, I had the great experience of working with Bob Woodward and reporting for the paper from Iraq.After thinking it through, here are five big takeaways on leadership from Jeff Bezos's decision to shell out $250 million for one of the country's most important news organizations.Brands matter.In 1997, Bezos told Inc. magazine that he wasn't particularly concerned someone else might copy his idea for, in part because of his head start in building a brand."There's nothing about our model that can't be copied over time. But you know, McDonald's got copied. And it still built a huge, multibillion-dollar company. A lot of it comes down to the brand name. Brand names are more important online than they are in the physical world."Sixteen years later, Amazon is one of the most recognizable brands on the planet.For $250 million, Bezos could have created a heck of a news organization from scratch (and one that would not start out with decades of pensions payments, brick-and-mortar buildings, and the like). And yet he chose The Post. There might be many other reasons as well, but one of them has to the paper's reputation and history -- in other words, its brand.You Can't Go It Alone.The story of howThe Post broke Watergate is an excellent example of entrepreneurship, despite having little to do with building a business. If you read the history, it's clear that not one of the major players at the paper -- for example, then-publisher Katharine Graham, then-editor Ben Bradlee, and then-reporters Woodward and Carl Bernstein -- could have accomplished much without the others.The same is true today. No true news organization can do much without great people. Based on Bezos's first communication withThe Post's staff, he gets that. His introductory remarks, in the form of an open memo, hit notes of "believable optimism," as the media blog put it:"Bezos promises to honor the values of the Washington Post, to own up to mistakes, to 'slow down' in order to get it right, to be courageous in the pursuit of truth ..."He does not say everyone will keep their jobs. But then, no one has promised that at The Post for a long time. What Bezos demonstrates is that an empty promise of continued employment does not create optimism--but a genuine promise to commit to important journalism can."You Must Do It Alone.That said, there's a good reason why most journalists seem to be optimistic about this development, and it's not the strength of a memo. It's the fact that Bezos has a track record of identifying game-changing ideas, and then making them actually happen.In our book, Breakthrough Entrepreneurship, my co-author Jon Burgstone and I examined why the best leaders of innovative organizations act differently from most leaders of more established organizations. In short, innovation generally requires a kind of enlightened despotism:"As an assertive-leader entrepreneur, you need to [be] obsessive when it comes to your vision, your focus, and your drive. You need to nee[...]

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3 Things That Could Make or Break Bezos' Newspaper Buy3 Things That Could Make or Break Bezos' Newspaper Buy

Tue, 06 Aug 2013 13:23:40 -0400

Amazon's founder picked up the Washington Post for $250 million--almost pocket change for him. But does he know what to do with it?Amid the media world's shock over Amazon founder and CEO Jeff Bezo's Washington Post purchase, there's plenty of speculation. Why did he do it? What will happen to the paper? Is this good or bad for journalism?As the opinions fly faster than the facts, it's worth looking at another aspect: Are entrepreneurs making smart moves when they buy mature businesses? Although many assume that a big success is proof of a golden touch, there are many examples of start-up royalty who turned long-established businesses into dross. For example, when AOL founder Steve Case was in charge of the company, he led it into what became a legendarily disastrous purchase of Time Warner. Here are some of the issues that come up when entrepreneurs dabble in takeover madness.Company Culture ClashesWhen you've started your own successful business, chances are that you have strong opinions as to what works and what doesn't. An established company also has strong opinions that have been baked into its culture over years, if not decades. And that can lead to problems.The entrepreneur who buys the established business might decide what is necessary for growth or for the company to meet the new owner's needs. However, the established culture has enormous inertia. You can kick, scream, and hammer away, but chances are often good that you'll never be able to divert the train into the direction you want it to go.It takes a lot of time and patience to rework an established culture. You may eventually be able to move it where you'd like it to go, but that will take many small corrections, not a handful of large ones. Bezos could have the perfect answer for the Post to ultimately regain the financial ground it has lost over the years, but it doesn't mean he knows how to make the company go where it should any more than previous managers have.Misunderstanding the BusinessIt helps to thoroughly understand the type of business you're about to take over. Not to say that an outside view can't be helpful. Far from it. Companies have often gained great value from recruiting insight from another industry. When it was in a slump, IBM benefited greatly from recruiting Lou Gerstner after his experience at American Express and RJR Nabisco.And yet, outside expertise can be a danger. Just ask Apple what happened when Pepsi executive John Sculley took control. It was ultimately an unqualified disaster until Steve Jobs returned. An executive must be able both to rely on sound principles of business and the ability to see the unique ways they must work in a given context. Gerstner had experience in vastly different industries and had developed that conceptual shift. An entrepreneur must remember that what seems to work at one company and in one context might not in a significantly different type of company, where sales models, customers, and other dynamics may be unfamiliar.Speaking of Steve Jobs, when he took over at Pixar, he tried using a sales model he had developed for the hardware business at Apple and NeXT. Ultimately, though, Pixar wasn't successful until Jobs realized that its future was in developing movies, not in delivering tools to animators.Radical Change Can Be Good--or BadBusinesspeople like to put their personal stamps on what they do. Who can blame them? Doing an impersonation of someone else would seem a dull task. Entrepreneurs, being used to blazing a trail and doing things their way, can walk into a new situation and want to undertake a major [...]

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You Need a Digital Detox (Trust Me)You Need a Digital Detox (Trust Me)

Tue, 06 Aug 2013 12:50:43 -0400

Check your phone before going to bed and again first thing in the morning? You might be an addict--and it might be hurting your business.Here's how obsessed people are with their mobile phones: According to Time, 68 percent of users take their devices to bed with them, 20 percent check their phones every 10 minutes, and one third report feeling anxious when briefly separated from their beloved gadget."I still feel twitchy," my friend Kristel Wills told me when she returned from a two-week retreat without her smartphone--and all the tweets, feeds and streams that went along with it.As the social media manager at expense-management company Concur, Wills knows what it's like to go to bed with her smartphone. Until a few weeks ago, she admits she checked her email before bed and then first thing when she woke up at 5 a.m."I couldn't put my stupid phone down."She's not alone.The rates of addiction show no signs of abating. A majority of Americans own a smartphone and these numbers have increased each year. Though the stats may say we're more "connected" now than ever before, the question we should also consider is: at what cost?Overcoming Digital AddictionRecent studies show that the mere sight of a smartphone limits how humans interact--impeding the development of "interpersonal closeness and trust" and leading people to feel less "empathy and understanding from their partners."Then there's what happens when someone's actually using a phone. "There's a smart-phone gait: the slow sidewalk weave that comes from being lost in conversation rather than looking where you're going," writes Time's Nancy Gibbs. "Thumbs are stronger, attention shorter, temptation everywhere: we can always be, mentally, digitally, someplace other than where we are."Wills told me that after working with social media for the past six years, her brain started feeling really full and scattered. These feelings, and those of her peers, have prompted a growing call for a nationwide detox.Lexi Felix has heeded the call. After years spent tethered to his technology, the 28 year-old launched Digital Detox, a company that hosts retreats in Northern California that require guests to surrender their smart phones and immerse themselves in yoga and healthy cooking. The start-up slave turned digital evangelist now spends his days helping others develop mindful relationships with their devices and their surroundings.Whatever you want to call it--turning off, checking out, detoxing--ignoring your devices isn't easy. But it's crucial to our well-being, says Benjamin Robbins, co-founder of Palador, an enterprise mobility consulting firm based in Seattle."Call it mobile blasphemy, but I have no problem ditching the device and unapologetically spending dinner and weekends with kids and family, much to the chagrin of some of my mobile cohorts," Robbins says.Still not convinced? Here, Robbins makes the case for kicking the smartphone habit:Why Employees Should DisconnectMany employees have created for themselves an unfounded sense of anxiety around disconnecting. "The world isn't going to end, you're not going to screw up a business deal, you don't need to be that responsive, people get it," Robbins says.Quite the opposite, disconnecting affords us time for the rest and relaxation necessary to restore the energy we put into our professional lives. Phone users rely so much on their devices to make decisions and to provide instant access to information, that they've lost the ability to plan ahead, their memories have suffered, and their creativity is stunted.Wills repo[...]

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17 People Making Way More Money After Leaving Finance for Start-Ups17 People Making Way More Money After Leaving Finance for Start-Ups

Tue, 06 Aug 2013 12:49:04 -0400

These entrepreneurs are proving that sometimes Wall Street is the wrong place to make bank.If you want to make a lot of money, you get a job on Wall Street. If you want to make even more money, you might dump that Wall Street job for a start-up. It isn't a career path that works out for everyone. But for the founders of Wikipedia and Amazon, for example, ditching finance for tech was a smart choice. -- Alyson Shontell This article originally appeared on Business Insider.Joshua Kushner graduated from Harvard and worked for Goldman Sachs. After a short stint there he left to pursue a career in venture capital. His firm, Thrive Capital, has invested in startups such as NastyGal, Kickstarter, Instagram, and Makerbot. He also recently gathered $40 million to start a new health insurance company, Oscar.Alexa von Tobel began her career at Morgan Stanley where she rose up the ranks to become a trader. She quit to attend Harvard Business School, then dropped out to found LearnVest. LearnVest has raised more than $40 million to tackle an important issue: there should be financial planners and advisors available for the middle class, especially with such a high percentage of the population in debt. Whether LearnVest will succeed or not remains to be seen, but von Tobel looks well positioned to clean up as a tech founder.Scott Belsky is now an angel investor in companies like Pinterest with his own, very big start-up success. Last year he sold a portfolio site for designers, Behance, to Adobe for $150 million. Prior to founding Behance, Belsky worked for Goldman Sachs. He told Business Insider about his decision to leave Wall Street for a start-up. "I figured I might just become a middle manager living a great life, but not doing something extraordinary. I came to believe that doing something extraordinary is never achieved through ordinary means. I remember that moment at Goldman where I was thinking I should leave and start something. I shared that with colleagues and they thought I was crazy. I gained confidence from being doubted."Chris Altcheck left Goldman Sachs to found PolicyMic in 2011. He's gone on to raise more than $1.5 million and his team of one dozen is pulling in more than 6 million monthly unique visitors. PolicyMic is written largely by unpaid contributors who write analytical stories about pressing issues, politics ,and entertainment.Amy Jain and Daniella Yacobovsky worked for the same investment bank, then later attended Harvard Business School together. There, they came up with the idea to be an online destination for beautiful, affordable jewelry, the way Sephora is for makeup. But it wasn't an easy decision to give up finance for BaubleBar. "We were at this crossroad," Yacobovsky tells Inc. "We could take this very secure road we had planned, or we could become entrepreneurs and turn this project into a real business. We chose to dive into the start-up world."Before he founded CustomInk, an online apparel retailer that generates more than $70 million in annual sales, Marc Katz was a financial analyst on Wall Street. The profitable business employs more than 250 people from its McLean, Virginia headquarters. One of Katz's first investors was his father, a 3-time entrepreneur, who didn't think his son had a great idea. "I told him I thought it was a terrible idea," Steve Katz tells Forbes. "Selling T-shirts on the Web, I just didn't see how you distinguish yourself, so it would be a race to the bottom in terms of price. ... It's amazing what you can do with a mediocre idea ex[...]

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Don't Make This Mistake the Next Time You Interview [VIDEO]Don't Make This Mistake the Next Time You Interview [VIDEO]

Tue, 06 Aug 2013 11:55:53 -0400


Tom Gimbel, the founder and CEO of the LaSalle Network, a recruiting firm, explains what not to do the next time you meet a potential new hire.

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Findery's Caterina Fake: How to Balance Creativity and ProductivityFindery's Caterina Fake: How to Balance Creativity and Productivity

Tue, 06 Aug 2013 11:36:00 -0400


The founder of Flickr and Findery talks about making time, paying attention, and mastering change in an industry that's constantly in flux.

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Scaling Too Fast Can Tank Your BusinessScaling Too Fast Can Tank Your Business

Tue, 06 Aug 2013 11:35:00 -0400


Too many growth businesses try to scale before they are ready. You're better off creating enormous value for a few customers first.

As you are building a business, it's natural to think about how to make it really, really big. But scaling a business too soon is a surefire way to tank it.

Every business, no matter how big its ambitions, needs to start by thinking like a small business aimed at serving a few customers, and serving them extremely well. Once the business has mastered its craft with a few customers, the leadership team can then think about how to build a larger business serving a high volume of customers. This more disciplined approach to growth involves trade-offs, but the business will be able to understand the impact and value of those tradeoffs given its experience at a small scale.

A CEO with high growth ambitions recently reached out to us with the following question:

I'm trying to build a startup of hydroponic farming. I understand that I will gain success by building a brand and pushing the product with a strong marketing strategy. Which methods would you use to communicate your value proposition? In your opinion, what are the best marketing tools? -Ricardo Silvestrini

Ricardo, we're sorry to say that there are no marketing tools that we know of that will take a startup and turn it into a large company. The first step in building your business is creating a viable product that a customer is willing to buy. Focus your marketing strategy, and by that we mean the 4 Ps--product, pricing, promotion, and place (distribution), on a single customer or small group of customers. In your case, you may find a specific food market or restaurant that you can uniquely serve. Or, you may find a specific product that you can produce better than food produced with traditional farming methods.

Once you have proven the business model with a few customers, you can think about new ways to promote your business. This might be through "push" methods such as advertising, where you are trying to reach new potential customers with your message. These methods may reach the largest number of potential customers, but you may be more effective with targeted "pull" methods aimed at specific customers. The easiest "pull" approach is a referral from existing customers. Can you ask your delighted customers to refer your business to their friends? The beauty of emerging social media marketing is that it is based on these "pull" techniques, and can be both impactful and cost effective.

Once you've built a solid small business with a set of core customers, you can think about the next step in scaling your business, and the next set of trade-offs. Will you lose some aspect of product quality or customer service? Those elements can be measured once you understand the value of your core customers. Without this core base, any scaling strategy is likely to fail.

How do you think about building a customer base from a core group of customers? Send us your questions at

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What Makes a Truly Great Leader?What Makes a Truly Great Leader?

Tue, 06 Aug 2013 11:26:46 -0400

In the technology industry--characterized by brutal competition and relentless change--this profile of a standout leader will surprise you.If you spend your career in the high-tech industry, you'll probably get to work with all sorts of brilliant and highly accomplished leaders. CEOs, entrepreneurs, VCs, executives, super-talented technogeeks--they're everywhere. That's just the way it is around here.You can pick up a lot of useful insights from these amazing and eccentric characters: How to manage, how not to manage, how to motivate employees, what risks to take, even how to crash and burn and take a whole company down with you. All sorts of cool stuff.I certainly learned a lot from the hundreds of extraordinary leaders I've known over the years, but one stands out. His name is Jason. Jason and I worked together at a midsized public company. He was the CFO; I ran marketing.As peers, we had a great relationship characterized by mutual respect and support. I always knew he had my back.One evening, on a flight back from a long trip to Florida with our CEO, we got stuck on a grounded airplane for hours. We all had a little too much to drink and the boss and I got into a heated argument. Jason jumped in and mediated, keeping me from shooting myself in the foot. That's just the way he was.Personally, we had absolutely nothing in common, but somehow, we complimented each other perfectly. I'm sort of outspoken and over-the-top. Jason, on the other hand, was more introverted and reserved. Still, I found his dry sense of humor to be hilarious in an unexpected way.Finally, after a long series of strategic missteps that nearly bankrupted the company, our CEO got the boot and Jason took over as acting chief executive. I couldn't have been happier. He had all the requisite skills and attributes of a great manager, but that wasn't what made him unique. What stood out about Jason was his balance.The guy just had a sense of equilibrium that was unflappable, even in the face of remarkably tough challenges. He was confident, but never overconfident. The risks he took were calculated. His decisions were logical and smart. He listened to the experts but knew the final decision was always his to make because the buck stopped with him.Jason worked long hours, but his time was eerily well-organized; he somehow managed to get to everything. And this may sound sort of odd, but in an industry characterized by brutal competition and rapid change, I don't recall him ever seeming out of sorts or out of control. That was quite a contrast from the high-tech norm, that's for sure.While he didn't know everything there was to know about running a complex technology company, he had a great supporting cast and knew how to work with us, how to motivate us, how to lead us. We were a far more effective management team under him than our founding CEO.Unfortunately, that situation didn't last. Lacking the scale to compete on our own, we ultimately merged with a larger company. While that didn't exactly turn out as planned, it did make sense at the time. The missteps that doomed the post-merger company were made after Jason was long gone.Now, here's where the story takes a bit of a left turn. While he did take on another interim turnaround role, Jason left the high-tech industry and never held another chief executive role. Instead, he opted to remain a CFO, and a successful one, to this day.Personally, I think that's [...]

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Findery's Caterina Fake: You Must Both Invent and Execute [VIDEO]Findery's Caterina Fake: You Must Both Invent and Execute [VIDEO]

Tue, 06 Aug 2013 11:25:59 -0400


Being an entrepreneur means always thinking about new ideas ... and figuring out how to turn them into reality.

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Findery's Caterina Fake on How to Make More Time [VIDEO]Findery's Caterina Fake on How to Make More Time [VIDEO]

Tue, 06 Aug 2013 11:25:50 -0400


Changing the way you interact with the people around you will help make the most of your working hours.

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Findery's Caterina Fake on Where Good Ideas Happen [VIDEO]Findery's Caterina Fake on Where Good Ideas Happen [VIDEO]

Tue, 06 Aug 2013 11:25:22 -0400


You shouldn't have to sneak around to be creative--there are better ways to find time for thinking about new ideas.

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Findery's Caterina Fake on the Importance of 'PB&J' [VIDEO]Findery's Caterina Fake on the Importance of 'PB&J' [VIDEO]

Tue, 06 Aug 2013 11:25:01 -0400


To keep up in the turbulent digital landscape, you have to understand the necessity of both peanut butter and jelly.

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Findery's Caterina Fake: Don't Chop Up Your Day [VIDEO]Findery's Caterina Fake: Don't Chop Up Your Day [VIDEO]

Tue, 06 Aug 2013 11:25:01 -0400


Caterina Fake answers questions about growing a business, excelling at social media and getting customers to spread the word for you.

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The Real Reason Rich Guys Buy NewspapersThe Real Reason Rich Guys Buy Newspapers

Tue, 06 Aug 2013 11:16:37 -0400

With his purchase of the Washington Post, Jeff Bezos is in pursuit of much more--and less--than a quick return on investment.As they scrambled yesterday to explain why Jeff Bezos would buy The Washington Post for $250 million, journalists’ first reactions were hopeful. This almost never happens with journalists. New York Times reporter Christine Haughney quoted Alan Mutter, a consultant who writes the blog Reflections of a Newsosaur, who regards the deal as the best thing that could have happened to the Post, if not the entire news industry. The purchase, he writes, “finally puts a true digital native at the helm of a newspaper company.” Over at, Roona Faroohar chimed in that Bezos was not “just another rich guy buying a newspaper.” Instead, she pointed out, he is “one of the visionary technology business leaders of our age.”It’s easy to see why journalists should invest such hope in Bezos. The man who created e-commerce is a creative juggernaut who rolls from one business victory to another. Any journalist--this writer included--would love to have him wave a digital wand over print publishing and return the industry to the monopoly profits the printing press once conferred.But let’s face it: There is no such wand. Other entrepreneurs from outside publishing have bought legendary news organizations, and the results so far have been less than transformational. Michael Bloomberg and the Canadian Thomson family, both of whom built fortunes in financial data, bought BusinessWeek and Reuters, respectively. Audio hardware entrepreneur Sidney Harmon bought Newsweek (from the Washington Post, in fact), and Facebook co-founder Chris Hughes bought The New Republic. In most cases the influx of cash and energy made for better and more digitally savvy publications. But news remains a tough, tough business. Professional news gathering of the kind the Post practices is expensive, and it is getting increasingly tough to convince either advertisers or readers to cover the costs.Bezos is certainly aware of those headwinds--he himself noted the consumer resistance to paying for news in an interview. And while many commentators noted that $250 million is only 1% of Bezos’ estimated net worth--well, $250 million buys you a lot of social media startups with much more promising growth outlooks. It’s probably no accident that Bezos bought the paper under his own aegis, thus avoiding having to convince his board or Wall Street that buying an old-media property that lost $53 million last year would be a good deal for Amazon’s shareholders.So, presumably Bezos has something other than a quick return on investment in mind. In fact, that’s exactly the impression you get from reading his letter to the Post’s employees and the terms of the deal. “Journalism plays a critical role in a free society, and The Washington Post--as the hometown paper of the capital city of the United States--is especially important,” his letter read. “The values of The Post do not need changing. The paper's duty will remain to its readers and not to the private interests of its owners.” Those are not indications of a man bent on tearing the old system out [...]

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When It's Time to Stop Thinking--and Start DoingWhen It's Time to Stop Thinking--and Start Doing

Tue, 06 Aug 2013 11:00:04 -0400

Sure, you need to spend time thinking through your decisions. But too many entrepreneurs get trapped in their own heads.If you run a start-up--whether it’s for profit or a social enterprise--one of the big questions that you face very day is whether to spend more time thinking about your venture’s problems or just make a decision and take action.If you’re anything like me, you’ve been through an educational process that puts a tremendous emphasis on getting you to think hard before acting and record your thinking in exhaustive detail.Many of America’s greatest entrepreneurs, from Bill Gates to Jeff Bezos, have been through that kind of cerebrally-intensive education at Harvard and Princeton, respectively. To be sure, both institutions have evolved more to encourage their students to get real-world experience than they did when Gates and Bezos were attending them.But over-thinking a problem can be disastrous for a start-up. In technology-based start-ups, engineers left to their own devices will keep refining their product to impress other engineers and never think it is ready to be put in front of a customer. That’s why such start-ups usually burn through their investors’ money before getting any revenues.As a teacher of strategy and entrepreneurship at Babson College--U.S. News & World Report has ranked its undergraduate entrepreneurship program tops in the U.S. every year for the last 20--I have concluded that aspiring entrepreneurs must know when to stop thinking and start acting.So, You're Ready to Take ActionHow to teach them this became a real problem for me this spring when Babson asked me to create a new course to be called Foundations of Entrepreneurial Management (FEM).FEM is based on one of Babson’s best ideas: that aspiring business leaders should both think and act entrepreneurially. And in my mind, Babson’s approach, dubbed Entrepreneurial Thought & Action (ET&A), emphasizes the importance of both thinking and doing, as described in 2011’s The New Entrepreneurial Leader co-authored by Danna Greenberg, Kate McKone-Sweet and H. James Wilson.In a sense, ET&A springs from the motto of MIT, the alma mater of the college founder, Roger Babson. MIT’s seal includes the Latin words--mens et manus--which translates as Mind and Hand. I interpret MIT’s philosophy to be that students should analyze a problem, think of a solution, build and test a prototype, see how well it solves the problem, learn from the experiment, and apply that learning to the next iteration of the prototype.What does this mean for you as an entrepreneur? You should build your company by pairing up two logics -- creative -- where you come up with a business idea, try it, and see what happens; and predictive -- set a long-term goal and develop a clear progression of steps to achieve the goal.How It WorksFor example, if you were engaged in resource planning for your venture, the predictive mindset would make you ask yourself: “How much capital do we need? Who do we know? and How do we pitch to get them interested?” whereas the creative one would lead you to say “Let’s start with the means at hand, What do we h[...]

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The Danger of Mentor/Investor WhiplashThe Danger of Mentor/Investor Whiplash

Tue, 06 Aug 2013 10:55:33 -0400

Venture capitalist Fred Wilson says you can't always listen to investors--himself included.Editor's note: This article first appeared on Fred Wilson's blog.I've been doing a tour of the summer accelerator programs and a question I get a lot is about the feedback the teams get from the investors and mentors they meet with. They ask me how much should they react to the feedback they are getting advising them to do things differently, pivot, change the product, change the strategy, etc.I call this constant advising/mentoring of early stage startups "mentor/investor whiplash" and I think it is a big problem. Not just with the accelerator programs but across the early stage/seed startup landscape.You cannot meet with a potential investor (me included) or mentor/advisor without getting a lot of feedback about your business. If you take many of those meetings a week, then you are going to get pushed and pulled in lots of different directions and it will cause confusion, wasted time and energy, and even a loss of confidence in what you set out to do.You cannot let that happen to you. You are the domain expert on your business. You have spent way more time and energy thinking about your business than someone who takes a 30 minute meeting with you, having never thought about it for one iota, and then gives you a ton of advice that you are doing everything wrong. You have to learn to hear that feedback but not react to it.Here is what I recommend:1) Create a spreadsheet and list each meeting and the feedback you got in it. List who gave it to you and what they said. If you can categorize the feedback easily, do that. A column for each category of feedback might be good. Over time you should look at the totality of the feedback and see if there are things that a large percentage of people are giving you. If that is the case, you may want to pay more attention to that.2) Apply the "investor discount" to feedback you get from investors. Advisors/mentors who have no agenda are a purer form of advice. Investors have their own agenda. They want to invest in "bigger ideas" and "larger outcomes". When they tell you that your idea is too small, they may be talking to themselves, not you. Do not make their problems your problems. This is your business, not theirs.3) Listen to customers, users, and the market. Advisors, mentors, and investors are not the market for your product. Get your product out into the market and get feedback from real users and customers who you will serve as you grow your business. If they like what you are doing and investors do not, do more of what you are doing. The investors will come around when you are scaling into your market.With those three rules in the frontal lobe of your brain, take as many meetings as you can get. Solicit feedback. Listen to it. Write it down. But do not act on it immediately. It is advice not direction. You are the boss of your company. Do what you think makes the most sense. And get your product in front of users and customers as early as possible and listen to them even more. Because the market will tell you what to do if you listen carefully enough. And Mr Market is the best advisor you can have.[...]

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Kickstarter Comes to CanadaKickstarter Comes to Canada

Tue, 06 Aug 2013 10:49:19 -0400


Just bursting to launch the next Cirque du Soleil or RIM? The wait is over. Kickstarter opens to Canadian projects on September 9.

If you've been eagerly awaiting the official start day for Kickstarter in Canada, the long wait is up. The crowdfunding platform announced today that Canadia-based projects could be launched starting September 9, with page-building features going live immediately.

Here's what you need to know:

  • There won't be a separate "Kickstarter Canada"--Canadian projects will be listed along with all others.
  • Backers from anywhere in the world can contribute, but should note that these projects will be listed in Canadian dollars, so a $100 US pledge would be $103.78 CAD at today's exchange rate.
  • Payments will be processed directly through Kickstarter, rather than through Amazon Payments.
  • Fees for creators are the same: Kickstarter charges 5% for funded projects, nothing for those that go unfunded.

Will Kickstarter, which launched in the UK last fall, be moving into other countries soon? According to Mashable, a company spokesperson said that "expanding into other territories is priority," but named no specific locations.

Meanwhile, for entrepreneurs in Canada, the question now becomes: is crowdfunding on Kickstarter a good idea, or a bad one?

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4 Dirty Negotiating Tricks (and How to Counter Them)4 Dirty Negotiating Tricks (and How to Counter Them)

Tue, 06 Aug 2013 10:46:00 -0400

Don't let your customer manipulate you into making unnecessary concessions to close the deal.Even if you're hoping to reach a win-win agreement with your customer, there's always a chance that the customer will try to pull a fast one. Here are four common negotiating tricks and exactly how to counter them.1. Pretending to have cold feet.Scenario: You've already reached verbal agreement, but as you're negotiating the final terms, the prospect questions the wisdom of the deal, saying something like "we're not really sure that this is the right thing for us to do at this time."What the prospect is hoping that you'll offer additional concessions rather than lose the sale. Rather than jumping to concessions, however, your best strategy is probe further to see whether there's a real problem or whether you're just being yanked around.Wrong:Prospect: We're not sure this is the right time to do this.You: What do I have to do to make certain this happens?Prospect: If you throw in 6 months of free support, I can get everything approved.Right:Prospect: We're not sure this is the right time to do this.You: What is making you question our agreement?Prospect: Uhhh... we're thinking maybe it costs too much.You: Let's go over the ROI figures that we both agreed upon.2. Surfacing an unreasonable requirement.Scenario: You're working with a prospect to craft a deal and suddenly the customer demands something that makes no business sense, like: "We'll need you to stop doing business with our competitors if you're doing business with us."What's going on here is that the prospect is planning to concede the unreasonable request as a bargaining chip to extract more realistic concessions. Your best strategy is to call the customer's bluff.Wrong:Prospect: We need you to supply our entire management team with new cars.You: What? That would completely destroy our profit margins! I can't do that!Prospect: Oh. Well, if you can't do that, how about a 15% discount.You (relieved): Yes, I can probably make that happen.Right:Prospect: We need you to supply our entire management team with new cars.You: Since that's not going to happen, it sounds like you're not really interested in buying. Is that the case?Prospect: Well... Hey, it never hurts to ask!3. Requesting a last minute discount.Scenario: You're at the point of signing the contracts, with an agreed-upon price, when the prospect demands a steep discount of the deal is off. Example: "My boss says that if don't drop the price 25 percent, the deal is off."What's really going on here is that the prospect is checking to confirm that you've given them the best deal. The worst thing you can do at this point is to give the discount, because then you've told the prospect you can't be trusted to offer the best deal.Wrong:Prospect: The deal is off unless I get a 10% discount.You: Okay, I'll make that change.Prospect (thinks): This bozo was trying to overcharge me!Right:Prospect: The deal is off unless I get a 10% discount.You: I don't play the games that some of my competitors play. You will always get the best price from me the first time around. If we need to remove something from the quote t[...]

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Entrepreneurs Up on the Economy, But Not Their Own BusinessesEntrepreneurs Up on the Economy, But Not Their Own Businesses

Tue, 06 Aug 2013 10:44:35 -0400


Entrepreneurs are more optimistic about the economy than they have been in years, a new survey reports. Their own businesses? Not so much.

Entrepreneurs are known for their exceptional optimism--and their hopes for the U.S. economy prove no exception. According to a National Small Business Association (NSBA) report out today, small business owners are increasingly confident that the national economy has improved in the past year. More surprising, however, were business owner's hopes for their own businesses.

Small business owners' confidence in the national economy is growing at a faster rate than confidence in their own businesses, the report shows.

Earlier this summer, the NSBA polled over 1,000 small business owners--including the association's members--on their economic sentiments. Surveyors found that as of July, nearly 35 percent of small business owners believed the national economy to be "better off" than it was one year ago, compared to 23 percent who felt the same way in December of last year.

Furthermore, naysayers--or those who believed the economy was "worse off" than one year prior--had dropped by a margin of 13 percent.

By comparison, entrepreneurs demonstrated only a lukewarm increase in confidence regarding their own business prospects--on the order of three or four percentage points. Entrepreneurs appear to have more faith in their businesses in general--over 60 percent claimed to feel confident about their companies--but the baseline has not shifted much.

One possible explanation for this, according to NSBA President Todd McCracken:

"A likely cause for this discrepancy is the fact that media reports signaling massive economic failures, such as the debt ceiling and sequestration, have been fewer in recent months, and despite Congress’ continuing inability to get much done--the focus of their failures has not necessarily been economic in nature. Despite the lower prevalence of negative economic news, the fact remains that times are still very difficult for small businesses and there is growing hesitation by small businesses, even those who have a better economic outlook than six months ago, to take on the risk of growth or hiring."

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5 Surefire Ways to Tank a Pitch5 Surefire Ways to Tank a Pitch

Tue, 06 Aug 2013 10:30:00 -0400

What not to do: Your helpful guide to losing interest and alienating venture capitalists.In any given month, my venture capital firm receives more than 100 pitches from hopeful entrepreneurs looking for our funding. This is a pretty typical volume for a VC firm.What might surprise you: The percentage of start-ups that actually land a venture firm's check is in the low single digits. It's obviously not for lack of trying, but the vast majority of entrepreneurs miss the boat.When you're in the fundraising process, keep these five pitfalls in mind: if you're exemplifying any of them, there's a strong chance I will not be signing on the dotted line.1. Your idea is too small. I have nothing against lifestyle businesses: Restaurants are great, I love a good cup of coffee, and a personal touch at a clothing store is always appreciated. However, these businesses aren't venture-backable, due to their small size and general lack of scale-ability.Instead… In order to earn every dollar, these companies must exert manpower (time and cost). Venture funds are looking for business that can scale, ramping up their earnings without more manual effort, through technology and systemization. You haven't innovated. Nobody needs a "me-too player" as a customer, so why would I be excited to invest in one? Show me something that truly challenges assumptions, dares to be different, and looks to the future-- exemplifying how we will live and how your solution makes our lives better.2. You don't have a concrete execution plan. I'm so glad you're going to take over Groupon's market share, but how exactly do you plan to get there? If you don't know--or it won't work--you won't get me to open my wallet.Instead…A detailed plan of attack, from all fronts, will be the proof to me that you're thinking about your business in the right way. Who needs to be on board? What customers will you target first, and why? What key technology are you focused upon over the next six months? If you can't demonstrate the proof points for statements you're making, I'm simply going to assume that you're flying by the seat of your pants.3. You don't understand your own financial model. This should be obvious, and yet when faced with our analysts, entrepreneurs flounder as if they'd been tossed from a life raft into the ocean. Metrics are the lifeblood of your business once it's operational, so if you're not tracking your potential business the same way, it's a red flag. Instead…What are your unit economics? How do you make money in various channels? How much will it cost year over year, month by month? For every download, what's your margin? How does that change two years from now? Know and memorize all of these metrics. Spreadsheets aren't just there for show--they're designed to guide you as a leader and function in flux with your journey through the ups and downs.4. You don't seem like a good person. I don't mean to be crass, but if you're pompous, showy, vague, and self-absorbed, I wouldn't want to marry you, hire you, or give you hundreds of thousands of dollars.Instead…As a V[...]

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When Do I Have to Start Paying My Hourly Employees?When Do I Have to Start Paying My Hourly Employees?

Tue, 06 Aug 2013 10:20:35 -0400

Trying to save a few bucks by skimping on paychecks is not a good move.Dear Evil HR Lady,When does a company have to start paying their hourly employees if there's a period of time before they can clock in? These employees are located away from the head office and the head office does not have any kind of access to records proving when they arrived at their job site--like security badge scans.Right now, employees have to arrive on site and log onto their computers before they can "clock in." Sometimes this can take up to 20 minutes (depending on their computer, how busy the network is, etc), but they aren't doing any actual work while waiting for the computer to boot up. Do we have to pay them for this time? This question just screams two things: 1) Management is stingy as all get out, and 2) There are serious trust issues at this company. Both are extremely serious problems and both can easily get the company into some really hot water.The first problem is likely to lead to legal trouble, according to Employment Attorney and author of Stand Up For Yourself Without Getting Fired, Donna Ballman. She said:This issue arose recently in a case where Hilton Reservations Worldwide, LLC ended up paying out over $715,000 as a result of failing to pay employees for time worked before clocking in, including booting up computers. TD Bank was sued recently for similar violations. Farmers Insurance was hit with over $1.5 million in back wages for failing to pay for pre-shift and post-shift activities.Managers that try to nickle and dime their staffs to death would be wise to read that paragraph above multiple times. "Saving" money now can result in larger payouts later on. Not only do these companies have to pay out these large judgments, but the legal costs involved can be tremendous. This method not only doesn't save money, but it ends up costing more.The Department of Labor issued a fact sheet about call center employees, but the guidance doesn't apply just to call center employees. It applies to any employee in a similar situation, including yours. The DOL states that employers have to pay for any time an employee must be on duty, and specifically states "starting the computer" is a work task. In other words, you require them to do this task, so you must pay them for it.Attorney Ballman offers further counsel for companies trying to cheat their hourly workforce out of a few bucks:Here, since the boot-up time is 20 minutes, this employer will have a hard time arguing that the time spent is de minimis. We're talking an extra hour or two a week. That's significant. If the employee is required to boot up the computer, then the time spent booting up should be paid. If the employer wants to avoid paying this, then they should arrange to have all the computers booted up before employees arrive. Otherwise, this employer must keep accurate time records of the time employees work, including boot-up time, and must pay for that time worked.Which brings us to the other problem with this the scenario: Management doesn't trust the employees. You don't [...]

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Top 10 Underrated Leadership TraitsTop 10 Underrated Leadership Traits

Tue, 06 Aug 2013 10:20:00 -0400

Every boss has room for improvement. Get started by analyzing which of these traits you might lack."Control is not leadership; management is not leadership; leadership is leadership." --Dee Hock, founder and former CEO of VisaJust because you're a manager, doesn't mean you're a leader. Management skills are something you you develop out of necessity; leadership skills are entirely different.One way to learn about the way you lead--and where you need to improve--is to look at your team. Is there a general sense of trust for each other? Do they regularly recognize each other's accomplishments? In all likelihood, what your team lacks is likely what you lack. Here are a few key traits you might be missing:1. Empathy. This is one emotional skill that doesn't come naturally to everyone. But if you're unable to connect with others, you're probably not going to accomplish much as a leader. You need empathy to gain trust, fuel relationships, and understand reactions. If this is something you lack, try listening more to your employees (individually and in teams), tuning in to nonverbal communication, and taking a genuine interest in your colleagues.2. Recognition. Praise pays off when it comes to boosting productivity and engagement. You may feel like you're too busy to give your employees a pat on the back for every little accomplishment, but recognition serves a function: It will make employees want to continue impressing you. Consider creating a reward system that's specific to your company and using it to recognize a variety of both small and large accomplishments.3. Trust. All leader-employee relationships require trust, but it takes two to make it happen. You've got to take a few risks as a leader and your employees need to show you they can be trusted. Focus on developing this trait by regularly delegating with a no-questions-asked policy. Allow your employees to take care of the majority of the decision-making without your immediate approval.4. Sense of humor. Laughter isn't just the best medicine, it's also the secret ingredient to better leadership. Humor eases the intimidation factor that comes with managing others. It also can make bad news easier to swallow, and it's great for team building.5. Commitment. If you're struggling to motivate a team that's disengaged, it's time to take a look in the mirror. Lead by example and find new ways to prove your commitment. Instead of ducking out early to play a round of golf on your slower days, spend some time with your team and lend a helping hand when and where it's necessary.6. Intuition. Uncertainty and leadership often go hand in hand. When was the last time you trusted your natural intuition when making a tough decision? Instead of relying solely on others to help you make a decision, learn to find the answers within yourself. Try trusting your gut and gathering insight from past experiences.7. Positivity. Simply put, negativity is contagious. So if your goal is to boost employees' energy and keep them motivated, start with your own attitude.8. Decisivene[...]

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Why Wiki-Work is the FutureWhy Wiki-Work is the Future

Tue, 06 Aug 2013 10:04:59 -0400

The U.S. already has plenty of workers with plenty of skills. But do we have the guts to shed our antiquated ideas about health insurance, education, and work?I’m convinced that if, we suddenly had freely-transferable, truly portable, and reasonably-priced insurance coverage for everyone who was gainfully employed, we would instantly see two amazing occurrences: (1) a gigantic movement to new jobs, new start-ups and other new opportunities by millions of people who are presently trapped in useless and unproductive jobs because they are prisoners of their existing insurance coverage (2) an equally enormous boost in growth and productivity as the talents, energies and skills of these insurance hostages were suddenly freed up and applied to valuable, innovative new ventures. There’s a great deal of conversation about why productivity gains and better technology are no longer resulting in improved median income levels. Instead, a precious few people keep getting richer. Until very recently, even the best economists were misled by the coincidental parallel movements of productivity improvements, job growth and increases in median income. In reality, the three aren’t necessarily connected. Life still isn’t fair, or as that old William Gibson saying goes, “The future is already here. It’s just not very evenly distributed.” We also hear a lot about skills gaps and the need to retrain zillions of workers to equip them for 21st century jobs. But what we really need to do is overcome the horrible resource displacement that prevents the changes that could make quick and comprehensive contributions to our overall economy and to the economic well-being of millions. Antiquated ideas about insurance play their part, of course. But consider also that the entire world can access educational videos anywhere, anytime, except in one place--our school classrooms. There, state restrictions driven by lobbyists for the teachers unions prevent even forward-looking teachers from using these resources in their classrooms to provide their students with best-of-breed instruction. As hard as this is to believe, in Illinois, “virtual” instruction has to be delivered by an Illinois state-certified instructor. We’ve got plenty of talent, plenty of skills and plenty of people in this country right now. But we’ve got huge numbers of workers who are in the wrong places doing the wrong jobs, all because we haven’t figured out two crucial things: how to increase their mobility so they can move to better-paying jobs (portable insurance, for a starter) and, in the case of the millions of place-bound and otherwise location-challenged workers, how to bring the jobs to them. I call this wiki-work: web-distributed, massive scale, collaborative work executed in bits and pieces. The models and examples are there. The solutions are fairly obvious and not costly. There are entrepreneurs just waiting in the wings all over the world to jump on these [...]

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