Inc.com

The Experiment Fund, NEA's seed-stage venture capital firm, set up shop on Harvard's campus to catch young, entrepreneurial talent early.

Patrick Chung, a venture capitalist and partner at NEA, one of Silicon Valley's premier investment firms, believes top-tier universities have a major problem: They're not doing enough to support student entrepreneurs.

"Thirty years ago, when Bill Gates left Harvard, there was no real concept of what it would mean to support a sophomore who wanted to start a software company that could to change the world," says Chung. "Fast-forward to 2004, and there's no excuse why a young Mark Zuckerberg would not have that level of support. But the fact is that he did not."

So out of NEA he spun out the Experiment Fund, a seed-stage venture capital firm, and set up shop on Harvard's campus. The idea is to train, mentor, and ultimately--but only once a student has graduated--invest in Harvard-spawned start-ups. Though Chung hasn't disclosed the size of the fund, it has made several seed-sized investments under $500,000 since it launched a year ago.

"For the first time in Harvard's 400-year history, Harvard is supporting a type of capability to allow students to get out of class, turn left, and end up at the doorstep of the Experiment Fund," says Chung, who graduated from Harvard College, and later received both a business and law degree there.

Chung's collaboration with Harvard highlights the firm's growing interest in its seed-stage investing practice, which was officially formed in June 2011, and which Chung co-chairs. Historically, NEA wouldn't bother with investments under $500,000, because the prevailing mentality was, essentially, 'Why bother with something so small?'

But things have changed. First, it's become radically less expensive to start a Web company, which means founders are less incentivized to take on excessive amounts of capital, which would dilute their ownership.

"We had this arbitrary rule where we only invested $500,000-and-up thinking that would be the bare minimum a company would ever need," he says. "Nowadays that's just not true."

At the same time, there's now more opportunities for entrepreneurs to sell early, which makes it difficult for venture capitalists to earn a high reward for their investments.

"It implies to us that we need to get involved as early as we can," says Chung. "If you don't get in early enough, you may never get in. And you may never be able to convince an entrepreneur to build a large, meaningful company. Those entrepreneurs are becoming increasingly rare."

What is Harvard doing to "support" the Experiment Fund? Other than office space, not much. Though the Experiment Fund is literally on Harvard's campus--it was given use of an office at 33 Oxford Street in Harvard's electrical engineering building, Maxwell Dworkin--Harvard does not employ any of the fund's advisors or team members, nor does it have any sort of financial stake in companies that receive fund investments. Also, only about 40 percent of pitches to the Experiment Fund are even from firms with founding teams who went to Harvard.

Other top-tier universities like Columbia, MIT, New York University, and Stanford encourage on-campus entrepreneurship, albeit in more financially-tangible ways. Each of those schools--either through an endowment, or a standalone investment fund--invest in companies spun out from students, graduates, or faculty who attended or teach at the respective university.

Still, the tie to the name Harvard is striking, perhaps not least because of big-name entrepreneurs like Bill Gates and Mark Zuckerberg who became hugely successful after leaving its hallowed halls.

Since the Experiment Fund launched in January 2012, interest in it has boomed. It has received 1,500 start-up proposals.

One of the first companies funded by the Experiment Fund was Tivli, a tech start-up founded by two then Harvard undergrads that takes television signals from over the air and distributes them over the campus network.

"The Experiment Fund is focused on companies like us," says Chris Thorpe, the president of Tivli. "They give us a lot of attention. They send one or two partners to our board meetings. It's great for us."

For Cherry Murray, the dean of Harvard's School of Engineering and Applied Sciences, who helped co-launch the initiative, the Experiment Fund is a welcome benefit for students, largely because of the growing interest in entrepreneurship on campus.

art of Murray's mission is to make Harvard's engineering school--a relative upstart having been founded just five years ago--into a program that rivals its neighbor, MIT. While building new facilities and luring top faculty to the program will make Harvard's engineering school more attractive to the most competitive students, Murray recognizes that offering students access to a well-heeled venture capital firm could also be a differentiating factor.

"In the last five years since the school was launched, there has been an increase by a factor of two in the number of concentrators in engineering and applied science," she says. "And I'd say about 25 percent of the concentrators [of about 700] are interested in starting their own companies or joining a start-up. It's a real interest in entrepreneurship. It's in the air. It's exciting."

From Chung's perspective, the timing of the fund's launch is essential. In 2013 and beyond, Chung forecasts the start-up community will see a company reach 10 million users without having taken a dime of venture or angel money.

He also believes the partnership may foster a longer term panacea to prevent the flood of Harvard graduates from pouring into Wall Street and investment banks.

"I think there's so much talent that gets sucked away into the investment banks and management consulting firms of this world," he says. "And if we could just unhinge one of those brilliant minds from flooding onto Wall Street--and if one of those brilliant minds founded the next Microsoft or Google or Facebook--I think society is better off."

Does power motivate successful executives, entrepreneurs, and business leaders and, if so, is that a good thing?

Every successful executive and business leader can look back and point to pivotal moments in his or her career--those times when everything seemed to change, as if all at once.

You can learn a lot by understanding what really occurs during those inflection points. It can teach you a great deal about what motivates overachievers and what makes them successful. It taught me about the true nature of power and those who seek it.

About two years into my career as an engineer, my bosses at Texas Instruments made me a manager and started dumping all sorts of projects on me. Of course, I was ecstatic. But after a while, I became concerned that I was enjoying it too much.

One day I walked into my manager's office and, after the usual project chitchat, eventually got around to what was really on my mind:

"Wil, I really appreciate the faith you have in me and all this responsibility. Actually, I'm having a great time and, you know, that's what's got me worried. Am I power hungry?"

The big Texan chewed on that for a few seconds, smiled, and said, "No, Steve, I don't think you're power hungry. I just think you're accomplishment oriented."

Needless to say, I was relieved. So relieved that I've never forgotten that conversation. Thirty years later, I can tell you that Wil was right. He hit the nail right on the head. Accomplishing things is what defines and inspires me. And I'm certainly not the only one.

The difference between lasting success and untimely failure is often a function of what motivates us to behave a certain way. I've learned that seeking to accomplish is a good thing, while seeking to control or have power over others is, more or less, the dark side.

Here are some observations on what motivates successful people and the true nature of power and those who seek it.

Most successful executives and business leaders don't seek power.

Most of the successful folks I've known were driven to achieve, like me. They liked to fix things, solve problems, make products, and ultimately beat the competition. Why? Because that's how they knew they had accomplished something. The bigger the challenge, the bigger the hurdles, the bigger the competitors, the bigger the sense of accomplishment.

Money and wealth, like market share and profits, are essentially metrics to measure our accomplishments. Why are we like that? I'm no shrink, but I suspect there are lots of different reasons. Some of us have something to prove, although to whom, we're not always sure. Maybe it just makes us feel good. It makes us happy.

Once people are successful and "powerful," some change; others don't.

Those who are relatively grounded, are reasonably self-aware, and don't take themselves too seriously, don't change, at least not in a bad way. Those are the ones with the best chance of replicating success.

Others let it go to their head. They lose their sense of perspective and objectivity. Those are the ones who tend to flame out. Those are the ones who become their own worst enemy. Unfortunately, they often take others, even entire companies, down with them.

Who are the power seekers?

Oftentimes they're people who, for whatever reason, feel powerless, weak, or scared inside. They seek control or power over others because it makes them feel safe or less fearful. Sometimes their fear is based in reality, because they're poor or physically weak, for example. Other times it's just their perception, perhaps a legacy of childhood.

One thing's for sure: It's a mistake to think that's just the other guy. We all have some of those tendencies in us, albeit to widely varying degrees, and we exhibit that sort of behavior under very different conditions.

For some, seeking power and authority is a cultural thing, a matter of where and how they were brought up. That said, not everyone who grew up with money or privilege ends up seeking power and authority. It's very much a function of upbringing and, of course, individual personality.

Not all politicians are power seekers, either. I used to know the late, great Jack Kemp. He sat on the board of a public high-tech company where I ran marketing back in the '90s. Jack was a genuine, fun-loving guy. He was a powerful advocate for small-business America and fiscal responsibility in government. Jack was not a power seeker.

It's not always obvious who the power seekers are. The appearance of benevolence or selflessness is often a disguise to get attention, lure others, and accumulate power for selfish and controlling purposes. Some are aware of their behavior, while others live in a state of denial. It's insidious and oftentimes tragic.

If you're at all concerned about what motivates you, there's a simple test.

Give it up for 30 days. If you can do that, you're probably fine. It's the same with power. If you can give it up with relative ease, then you're probably not a power seeker.

Ten years ago, I gave up a successful career as a senior executive. I had other reasons for doing it, but it's a pretty good experiment, nevertheless. Do I miss the power and authority? No, not really. That's how I know Wil was right about me.

How one simple organizational move can dramatically boost your productivity

Productivity is important in any business. But many people make a big mistake and think that the trick is to pack even more in a single day. That's not true. The real foundation to productivity is getting the right things done.

That's the simple basis of what has become a famous story in time-management circles. Ivy Lee, one of the founders of public relations and a general management consultant, helped Bethlehem Steel CEO Charles Schwab become far more productive with what on the surface seems a simple trick: List what you need to do in a single day, rank the items by importance, and then work on them in that order. Don't proceed to a less important task until the more important one above it is done. So you might end up with something like this:

• 1. Finish sales quote.
• 2. Send invoices.
• 3. Review new product design.
• 4. Place ad for new administrative assistant.

It sounds simple, and it should be. The idea is to realize that you never know what will happen on a given day, so you cannot assume that you will plunge through an arbitrary list of things to do. By focusing on what is most important, you can make the time you have available count and advance what will make the most difference to your business and life.

However, things are often more complicated than you would like. When making this kind of prioritized list, you have to accurately assess what is most important versus what is most urgent. For example, you might be working on an important strategic plan when, suddenly, your phone rings. A high-maintenance customer is worried about something inconsequential. Taking that call is far less important to you than the strategic planning, but it is an urgent issue that you might need to handle to keep the customer's business.

That is why you should keep a certain amount of flexibility when working on being productive. If a disruption crops up during the day and you cannot deflect or delegate it, take a moment and plan it into your day. Give it a priority, and shift everything below it down by one.

I learned a variation of this approach from a Franklin Planner (now FranklinCovey) seminar many years ago: three-part grouping. The first group--the A group--consists of items that should be completed that day. Those items get priority listings of A1, A2, A3, and so forth. Items in the second (B) group, which would be good to finish that day but that have less urgency, are listed B1, B2, B3, and so on. The final C group is for items that you want to get done personally. As with the others, they are listed as C1, C2, C3, and the like.

Now your day might look something more like this:

• A1. Finish sales quote.
• A2. Send invoices.
• B1. Review new product design.
• B2. Place ad for new administrative assistant.
• C1. Take car in for service.
• C2. Pay bills online.

If you can make yourself habitually apply this approach, you will quickly begin to gain control over your day and, more important, focus on what is really important to your business and life. You can do it on paper, although I've long shifted to FranklinCovey software that integrates with Microsoft Outlook and lets me manage tasks (among other things) from a central place.

By the way, after trying the tip for a while, Schwab sent Lee a check for $25,000--almost $550,000 accounting for all those years of inflation. That's how valuable he found it.

The best leaders use social events as opportunities to strengthen relationships, engage with shy colleagues, and express appreciation.

How often do you find yourself at social gatherings for your company, another company, or simply a friend or acquaintance's party where you encounter a lot of colleagues or clients? You may dread these events as chores you must get through or chances to make jokes and knock back a few beers. But you'll go farther faster if you treat them as the opportunities they are to strengthen your leadership role and your key business relationships.

That advice comes from Michael Crom, chief learning officer at Dale Carnegie Training. "You can take a leadership role and take on the spirit of the occasion at the same time," he says.

Here's how the best leaders handle social events:

If you won't already know everyone present, and especially if it's at a client company or location, "treat it like a networking event," Crom advises. "Learn about the organization you'll be visiting and the industry it's in. Read up on them on the company website. Who are the key people who may be there, and who else could they introduce you to? I love using LinkedIn for that. I look at their list of contacts or their friends list on Facebook and see who they know that I might want to meet."

"Try to keep all these conversations upbeat," Crom says. You don't want to make anyone uncomfortable, so skip discussions of politics, religion, or off-color jokes, he advises. Instead, "Give honest and sincere appreciation," Crom says. "That's one of our principles, and I would especially remember it in this kind of social setting." It could be as simple as thanking each employee for his or her efforts or every customer for his or her business.

"In virtually every party situation, there are people who are introverted," Crom notes. So make a point of starting a conversation with these loners. "Ask them about themselves; urge them to talk, and be a good listener," Crom says. Look for topics you may have in common, or ask about the person's childhood or first job. "They'll have a better time," Crom says. "And you'll get to know some of the people you work with a lot better."

Start with 500 million young people aspiring to a better life. Add an improving economy and you have a ground floor worth getting in on.

In 2013, India stands at a point where the compass of its destiny is, once again, in its own hands. The needle of this compass could either point south towards the all-too-familiar path of unfunded welfare economics, intensifying the slowdown currently underway; or it could turn 180-degrees and allow entrepreneurship to take off. I believe the government will choose a mix of the two and there lies opportunity for smart entrepreneurs. Seven reasons why:

1. Where else? While the world output is expected to rise by 4% in 2013, the emerging economies are going to lead it, says IMF. Among them, the two fastest-growing will be China (8.1%) and India (5.9%), versus the US (2.5%) and the Euro area (0.8%). Of the two growth leaders, India will be easier for entrepreneurs from democracies to comprehend.

2. Government is back at the wheel: Bogged down by a severe “policy freeze,” the government soured its relationship with business in 2012. Since September, however, lawmakers have begun to show signs of life: Parliament passed the contentious Banking Laws Amendment law, which allows corporations to set up banks, making capital more readily available. The government has taken constructive action by, for example, allowing foreign companies to take ownership stakes in certain Indian retailers.

3. Inflation is beginning to moderate: The biggest cause of India’s inflation--apart from high and rising commodity prices over the past two years--is a supply side squeeze: too few goods in the system. India’s outlier status on high inflation rate throughout last year is now ending. Wholesale inflation is below 8%, and although consumer price inflation stands close to 10%, experts say this should fall to 6.5% by the next general elections in May of 2014. A falling inflation rate combined with a relatively high growth rate is the kind of environment that outside investors and entrepreneurs should relish.

4. The cost of money will come down: Fighting inflation, the Reserve Bank of India has kept interest rates high over the past few years. For most of that time, the RBI’s tight money policy hit investment harder than inflation. But if the inflation cycle has indeed played out, the next six months should see interest rates fall by 100-150 basis points, adding some spark to the economy.

5. Business-friendly laws could be enacted: Four important bills will be debated in Parliament this year. The Goods and Services Tax Bill would increase efficiency in the movement of products across India. The Direct Taxes Code Bill would clean up tax laws. But the most important (and most controversial) law will be the Land Acquisition Bill. If passed, it could provide the governing coalition political force for elections in 2014. The Companies Bill, which updates India corporate law for the 21st century, has already been cleared by the lower house and should pass the upper house in the budget session of Parliament that begins next month.

6. Workers are ready: The 500 million Indians under age 25 will continue to follow their aspirations to a better life in 2013. The median age in India is 25.1, compared to the US’s 36.9. In a free-enterprise economy this kind of population distribution has often led to a long-term economic boom, the kind begun Japan in the 1950s (median age 25.5) or China in the 1980s (median age 22.4). Further, the nature of those youthful aspirations has changed. This young population is looking beyond agriculture or daily wages. It wants to learn, which creates opportunity for entrepreneurs willing to invest in training.

7. Markets are waiting to explode: As a share of India’s GDP, consumer spending stands at just 57%, compared to 72% for the US. That suggests that there is some $1.2 trillion worth of opportunity in India’s emerging consumer sector. Current government mismanagement of finances and the resultant slowdown notwithstanding, prosperity in the medium term will increase not merely the base GDP but the share of consumer spending as well. This year and the next may see the first steps towards that trend. If you’re entering India this year, you could be getting in on the ground floor.

Mosaic, an Oakland, California-based start-up, will allow investors all over the country to fund clean-energy projects and earn interest on the energy sold to customers.

Want to invest in a clean-energy future? Forget the rhetoric. Now you can--literally.

Starting at noon ET on Monday, Mosaic becomes the first crowdfunding platform that will connect investors with clean-energy projects that need financing. For as little as $25, non-accredited investors (yep, just regular people!) in New York and California--as well as accredited investors around the country--can log on to Mosaic, review solar projects that need cash, and make direct investments in projects' developers.

The projects generate revenue by selling the electricity they produce, which then allows the investors to get paid back with interest. According to the company's co-founder, Billy Parish, the yield offered by the solar investments ranges from 4.5% to 6.38% annually, which is roughly on par with historical returns of the S&P 500.

For example, among a private group of investors in October, Mosaic raised $40,000 from 51 investors for a five-year, 6.38% loan to finance a solar project on the roof of a job-training center in Oakland.

"I looked at what the biggest constraints to the growth of clean energy were, and the biggest one was financing," says Parish. "There isn't enough money going into financing these projects. There are a couple of banks that are the primary sources of capital for these projects, and because there are so few players, the cost of capital is too high. I thought, We can bring down the cost of capital, bring a new, potentially major source of capital into the space, and build a constituency to get the policies we need to support the growth of the industry."

So far, the model appears to be working. Since the company privately launched in early 2011, it has deployed $1.1 million from more than 400 investors to fund a total of 11 projects.

Despite its apparent success, the process hasn't been simple. Parish says the company has worked tirelessly with the Securities and Exchange Commission, as well as state governments, to create a secure platform where investors are apprised of all the risk affiliated with making solar investments. Though the company has yet to achieve an official approval from the SEC, through Mosaic's working with state officials, both New York and California have allowed residents to begin making investments directly on the site.

"Every project comes with a prospectus that comes with the risk of the project," Parish says. "We look at multiple factors: equipment, the contracts associated, the developers, the installers. If we like the project, then we'll negotiate a loan."

Mosaic's business model is similar to that of a bank: It charges an origination fee up front to the developer and takes a 1% "skim" on top of the loan. (For example, if Mosaic makes a loan offer to a developer at 7%, it'll offer that as investment on the platform at 6%, keeping the 1% difference.)

"Happily, all of the projects so far have made on-time payments to our investors," Parish says. "No defaults, no problem so far."

Investors have high hopes for the start-up. The 14-person company has raised a total of $3.4 million in seed and Series A financing, as well as received a $2 million grant from the Department of Energy's SunShot Incubator Program, which funds up to $12 million in grant money to small businesses and entrepreneurs working on both hardware and software technology that makes solar more accessible for Americans.

"The market we're going after is the clean-energy market," Parish says. "The energy industry is the largest industry in the world. We are seeing a shift away from fossil fuels, and we're building a platform for people to participate in and benefit from the clean-energy revolution. The opportunity is enormous. We're aiming to be the leading investment platform for the clean-energy economy."

Zipcar founder Robin Chase discusses the Avis acquisition, the next big thing in car-sharing, and her latest venture, Veniam.

Last week, when Avis announced its intention to acquire Zipcar for $500 million, founder Robin Chase wasn't too surprised.

When Chase started Zipcar in Cambridge, Massachusetts in 2000 with Antje Danielson, the duo re-envisioned the way people use cars in urban areas. Instead of lengthy waits at rental car counters, Zipcar pioneered the use of technology that allowed customers to reserve cars online, using membership cards to unlock vehicles at specific locations.

It quickly found a niche with a mostly young, hip customer base who instantly grasped how grabbing a car for an hour or two from a nearby spot could fit into their busy lives.

Zipcar has since gone from being an interesting idea to the leader in car sharing, with about 760,000 members, a public offering in 2011, and $300 million in annual revenues. But competitors abound, both scrappy startups and big car rental players.

Chase spoke with Inc. staff writer Jeremy Quittner about her reasons for leaving Zipcar in 2003, her other startup ventures, and the latest big ideas capturing her attention. Following is an edited version of their conversation.

What do you think about the sale of Zipcar to Avis?

I used to joke when I was in the first years at Zipcar, when the press would ask me where do you see the company in 10 years I would say in an anti-trust suit because we will be a dominant player across the states.

So I always had very high expectations for us. I could picture a kind of Godfather scene where I would be lying in my bed and the car rental guys would be at me with their Uzis. I always knew we were cutting into the car rental business model. I also knew it was the future and it is about to become even more so the future as we go forward. As we move towards a more urban world with 50% or so living in cities today and 70% by 2030, there is no question we cannot and don’t want as individuals to have one car per adult or adult household.

Will Zipcar lose its street "cred" as an Avis subsidiary?

Avis has had 12 years to watch us and they have been watching really closely over those years, and one likes to imagine that they could pull it off. The challenge they are facing is the same one faced by any big company acquiring a small innovative one.

What lessons do big companies have to learn?

I think that all companies today can and should be really recognizing the fact that we are in an innovative, co-creating new economy with what was formerly known as "the consumer." That relationship has transformed and I think everybody needs to figure this out. You are looking at 30 different sources of information and jumping between these and commenting and tweeting and interacting and this is the way we want to interact with all sorts of services in our lives, we are part of that creation. No matter what we are consuming, we feel the need to be co-creators.

When I founded Zipcar we were very community focused, we had lot of parties where we provided the transportation and they provided the potluck picnics or the destination, and whenever I needed cars or parking locations or new employees or surveys of what cars to buy, I went to my customers, all the time they were front and center and part of building that company.

Why did you leave Zipcar? Some reports say you were forced out.

I was not fired. I had just raised $7 million in a very, very hard environment and I will say I had family issues. My father died within a couple months of that and my daughter, Cameron Russell, went on to become a very famous supermodel at a young age, so I really needed some time.

I had a really hard time raising the last round of money and it was exhausting. The company was doing fabulously well, it was the most successful it had been since we launched it, and customers loved it and it had grown really well month over month.

The fall of 2002 was a nuclear winter for venture capital. It was constant push, push, push, and I was flying around working hard and the company was running out of money, so it was very stressful. There was a huge psychological toll to being CEO, and it takes a lot of your time raising money when what you really want to be doing is running your company.

I still have my founding shares and I've added some shares, but there's been a lot of dilution.

You started Buzzcar in 2011. How is it different from Zipcar?

Traditional car sharing will only place cars where it can get a return on investment, such as dense urban areas or in university towns where you can guarantee that. Buzzcar shares cars in any environment, in any destination. If your car [has] excess capacity, you can sell that and if someone rents it once a year that's great, it is all upside. You can rent cars anywhere. In France we have 1,800 cars across the country and many rentals in places where you would never see traditional car rental or car sharing.

The thing about transportation is it's in a continuum. Buzzcar is complementary to car sharing and car sharing is complementary to car rental.

What else have you done?

I have done a lot of policy work in the last few years on a national and international level. I am very tied into the wireless and Internet and innovation communities and my expertise is much deeper than had I remained CEO of Zipcar.

The connected car is now widely seen as an open platform on which you put many things and I want to take a lot of credit for the way this is being played out, with millions of dollars of investment dollars because of the work I have laid out. The U.S. government has done a lot policy and emergency services [work] on Mesh networking, of which I have been a huge champion for years, and I have done a lot of work in Washington pushing that forward.

Mesh networking is where your device, whether laptop, cell phone, or box in your car is not just receiver of information, but a router, it is like a mini cell tower. The device itself can create a mini-infrastructure without needing anyone else. It is something I have been pushing in transportation for a long time. I've co-founded a company in Portugal that is doing this, called Veniam. We are building the largest wireless Mesh nework in the world, and it is very exciting.

It's an Internet of devices rather than an Internet of networks. Mesh networking lets local communication and data stay local and hop over each other so it is a multi-HOP situation. Instead of my phone call going to a cell tower, it stays local. That will transform machine-to-machine communication as well as vehicle-to-vehicle communication as well as the cost of our communications in general. We will each be leveraging each other's excess capacity of wireless infrastructure, and we can transform and provide a whole new economic engine, and we are right now at the cusp of that.

Anything else about Zipcar?

I laugh, because when you are out raising capital, people ask what is the exit strategy. I always laugh at that question, because there are only two answers, either you're going to have an IPO or someone is going to buy it. And I'm laughing now because Zipcar did both.

Your iPhone may soon be able to detect the smells around you thanks to Adamant Technologies.

Can taste and smell be digitized? At least one start-up is trying just that.

Meet Adamant Technologies, a small start-up based in San Francisco. The company claims it has developed a microchip loaded with 2,000 sensors (the human nose has just 400), which pick out chemicals in the air and digitize scent and taste. In the case of scent, the chip does more than simply recognize a smell. It also determines its cause.

"Halitosis, or bad breath tracking, is something we're really interested in," said Sam Khamis, founder and CEO in a recent interview with Business Insider.

But more than bad breath, Khamis eventually wants users to be able to detect the presence of virtually any chemical using their iPhone. For example, users could measure calories burned, monitor the blood of diabetes patients, or determine blood alcohol level as part of a Breathalyzer app.

The company is just beginning to mass-produce the olfactory chip in an Austin, Texas plant and expects to be selling iPhone-specific apps and their hardware within two years. Adamant reportedly raised $2.5 million over the summer from venture capitalist Vinod Khosla and will be conducting another round of funding later this year.

Khamis previously co-founded Nanosense, Inc., where he led research and development efforts on bio-inspired carbon nanotube devices (the technology behind the newly-developed chip). He received his PhD in physics at the University of Pennsylvania in 2009.

What special mix of ingredients separates the best business-builders from the rest of the pack? Entrepreneurs from Brightbox share their perspective.

We recently wrote about a start-up named Brightbox, which developed a phone charging station that hangs on the wall at hospitality venues such as hotels, restaurants and bars, event spaces, gyms, and malls. During our interviews with Billy Gridley, CEO, and Steve Palladino, EVP of sales and business development, we also talked about their backgrounds and what led them to become entrepreneurs.

Steve and Billy discussed four key characteristics that entrepreneurs possess:

• Ambition and self-confidence
• Willingness to take a leap of faith
• Ability to learn from mistakes
• Trust in and respect for the team

Billy defined entrepreneurialism as having "a terminal case of ambition." This really resonated with us. In our experience, entrepreneurs are intellectually active, see problems all around that need fixing, and are generally impatient about those problems. This mental state never seems to go away; it really is terminal.

But it is not enough to just see the problems. An entrepreneur must also have a burning ambition to fix them and the self-confidence to believe he or she is uniquely positioned to save the day. Not everyone has that ambition and self-confidence, much less a terminal case of it. We celebrate entrepreneurs when they succeed against all odds and through enormous challenges. What keeps them going? Often, a unique mix of ambition, self-confidence, and simple mule-headedness enables them to power through the dark times and find the light at the end of the tunnel.

Billy and Steve both mentioned the leap of faith they made when they moved to Brightbox. Billy had spent 25 years on Wall Street and was ready to lead a start-up. What made Brightbox attractive to him was his belief that the problem (how to recharge mobile devices while away from home) was worth solving.

Believing that a problem is worth solving and that you can do it better/faster/cheaper is an enormous leap of faith! Ambition and self-confidence will only get you so far; you also have to passionately believe in the idea.

We have yet to meet entrepreneurs that haven't made a boatload of mistakes and unwise-in-retrospect decisions. "We made all the mistakes we could have, and learned a lot from them," Steve told us. On a daily basis, entrepreneurs make dozens of decisions, large and small, about their business, knowing all the while that some of those decisions will backfire.

Without believing in themselves and their vision for Brightbox, Billy and Steve might not have persevered, but that is not enough. The key, as Steve noted, is learning from the setbacks. The best entrepreneurs set up their businesses as learning laboratories. They deliberately run tests and experiments on their products and customers. They have a disciplined process to evaluate those tests and reorient the business around what they learned.

Steve also explained how the mutual trust and respect among the senior team at Brightbox enables them to feed off each other's strengths. This really resonated with us as well. The team members at Avondale have very different strengths and weaknesses; we deliberately hire for this diversity. Without mutual trust, respect, and partnership, we would quickly spiral out of control as an organization. We continually challenge each other to deliver more value and raise our game. Businesses that don't operate from a base of trust, respect, and partnership are miserable places to work--we know this all too well from past experience. A great idea can be the spark that brings people together, but mutual trust and respect keep them together.

Our thanks to the Brightbox team for sharing their thoughts on these four key ingredients of entrepreneurialism.

What are other key ingredients of the successful entrepreneur? Share your thoughts with us at karlandbill@avondalestrategicpartners.com.

These companies can help take the mystery out of SEO and get your site on its way to ranking higher in Google.

When it comes to marketing, search engine optimization, or SEO, is probably the most mysterious undertaking of them all. And yet, it's one of the most important things you need to get online visibility.

The challenge with SEO is that search engines--like the almighty Google--make adjustments to their algorithms all the time. A shining example is the Penguin update late last year, which had marketing folks everywhere clutching their pearls. These algorithms determine how high you rank naturally on a search engine results page, or SERP, when someone types in a search term. They're based on lots of constantly changing factors that are more heavily guarded than the crown jewels.

Big companies hire big agencies to make sure their sites are fully optimized, but if you're a small business, the last thing you need to do is learn the ins and outs of SEO. And it can get pretty expensive to hire someone, especially if you post content on a regular basis. (Tip: Creating useful, original content is one of the few tried-and-true strategies for SEO.)

But have no fear, cool tools are here! Check out these three optimization-software companies that help take the mystery out of SEO and get your site on its way to ranking higher in Google.

BoostSuite is an awesome tool designed specifically for small businesses. It takes data from your website and turns it into a list of easy SEO to-dos. It even has a cool revenue tracker that shows you how much more money you could be raking in (in terms of qualified leads and eventually customers) if you make the suggested changes. Cost: Starts at free

Brought to us by the awesome folks at Copyblogger, Scribe lets you optimize your content, social and search, with one tool. It tells you which topics are the most interesting and searched that are related to your industry, so you can create content that resonates. Layer on top of that tips to tweak your content for search and to increase social-media sharing, and you've got a pretty powerful tool. Cost: Starts at $97 a month

SEOmoz is like the granddaddy of SEO best practices. The pro version helps you manage your SEO, analyzes your site regularly, and provides recommendations. You can also download a free toolbar that shows you SEO metrics of various sites as you surf online. But what I really love are the guides (like this beginner's guide to SEO) and help forum. Cost: Pro version starts at $99 a month

One last note on SEO: Don't cheat, such as using link schemes, stuffing your content with keywords, hiding text or links, or employing any other below-the-board tactics. You could get punished hard, and once you're on Google's crap list, it won't be easy getting off.

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The CEO of Zendesk explains how developing great customer service resembles keeping that New Year's resolution to start a daily running habit.

Recently here on Inc.com online clothing retailer ModCloth explained how they faced down their chaotic customer service situation with a handful of tech tools. Among the gadgets they used to bring order to their interactions with customers was cloud-based software called Zendesk.

Zendesk, it turns out, doesn't only help other companies achieve customer service greatness, it also strives to set an example in the area, focusing heavily on keeping customers happy itself, CEO Mikkel Svane explained recently to the American Express OPEN Forum blog.

In the course of the interesting interview, Svane lays out Zendesk's own customer service philosophy and challenges, and shares some of the wisdom the company has gathered talking to other firms about their customer service issues.

Amongst these insights: if your company-related resolution for 2013 is to finally nail kick butt customer service, be prepared for a tougher road than you might imagine – and more profound satisfaction if you succeed. Svane compares the effort to building up a fitness habit:

Most of our customers have realized that customer service is really, really hard. It’s hard to put together relationships when customers are in a lot of different regions and countries and time zones. You have treat each of them respectfully and try to make the best out of any situation. It’s not something you can go out and learn like studying for an exam.

I like to compare it to starting running. For most people, it’s not super pleasant getting up at 6 a.m. in the rain and running for 10 kilometers. But once you get into the rhythm and start enjoying it, you kind of get addicted to it and it becomes part of your DNA.

What's the utility of the comparison between working out and pleasing customers for small business owners?

Expectations can be powerful.

If you foresee that your customer service improvement effort is going to be a breeze, than your resolve is more likely to crumble in the face of unexpected difficulties. But if you start out with the understanding that establishing great relationships with your customers is going to be a long and occasionally exhausting process, you're more likely to be in the head space you need to succeed in your efforts.

Check out more of Svane's insights in the complete interview.

Do you find Svane's comparison apt?

The vast majority of New Year's resolutions end in failure. Here's an easier, more effective approach to making awesome changes.

How are you doing with those New Year's resolutions? Not very well?

That's no surprise. Working to make those big changes--to your business, to your workday, to your health... to anything--is really hard. And it's really stressful.

And it's really easy to get frustrated and give up.

Setting big resolutions is great, but all too often those big resolutions are also too fuzzy. Here's one many people set: "This year, I want to get in better shape."

What exactly does that mean? "Better shape" can mean anything from "able to walk up two flights of stairs without feeling like I'm going to pass out," to "running a marathon in under three hours." So when you start going to the gym and "eating a little better" it feels purposeless.

Here's a better approach.

Success is never overnight. Success is the result of a series of small, incremental, repeated steps. So pick one thing, one small thing, and do it every day. In time it will become a habit--and in time you'll make tremendous changes in your life.

Just pick one thing to do--one tangible, measurable, goal-oriented thing that in and of itself helps achieve a purpose--and resolve to do it every day. Commit to do it. Put it on your to-do list or calendar and do it.

Here are some examples:

1. You want to lose weight.

Every day, eat one meal differently. Just one.

Have oatmeal and fruit for breakfast. Or replace your afternoon cookies with a meal replacement bar. Or pack tuna and a small salad for lunch instead of eating out.

Making sweeping changes to your diet is incredibly depressing. It's a lot easier to commit to changing one meal.

Over time you'll lose a little weight, you'll feel a little better, and you'll be motivated by your success to make other incremental changes.

2. You want to build a better network.

Commit to spending ten minutes a day making connections.

Pick a person on LinkedIn to connect with, and then maintain that connection. Or send a note to someone in your community recognizing their success or congratulating them for an achievement. Or call a supplier and compliment the service you received.

Just make sure your ten minutes a day is focused entirely on giving, not receiving. Do that every day and you'll make real, lasting connections.

3. You want to be more productive.

Make one change to a daily habit. For example, quit being Pavlov's dog when your inbox tone sounds and commit to only looking at your inbox three times: Say at 8, noon, and 5. You'll be surprised by how non-urgent most emails really are, and you won't get stuck in the reply-quickly-just-to-be-friendly-and-seem-responsive cycle that wastes so much time.

Or pick one task a day to see through to the end instead of multitasking. Or, before you start your day, add one "not to do" item to your to-do list.

Pick one change, and do it every day. You'll instantly be more productive... and you'll start looking for other things to change.

4. You want to get smarter.

Studies show exercise does more to bolster thinking power than actual thinking: People who walked for just 40 minutes three days a week built new brain cells and improved their memory functions.

And while multitasking is usually inefficient, in this case feel free to take a walk with your significant other--the time you spend together, away from distractions and interruptions, will definitely benefit your relationship, too.

5. You want to do more good.

Pick one cause. Just one. Then write a check. Or call to see how you can help with one event or initiative. Or ask if there's something your business can do to support that cause.

While the world is full of people who need help, if we all do just one thing to help someone else... think what a difference that would make.

6. You want to get fitter.

The easiest way to improve something is to measure it. We all tend to perform better when we're observed, even if we're just observing ourselves.

So if you want to be more active, commit to using a fitness tracker to monitor your physical activity. (You can use this or this or this or even something as simple as this.) Start using one and you can track how many steps you take throughout the day, how many calories you burn... pretty soon you'll find yourself taking the stairs and going for a walk at lunch just to up your totals.

(Believe it or not, it's actually kind of fun.)

7. You want to learn a skill.

Most of us wish we were born with a gift. In fact we were: We all have the ability to practice in a focused, goal-oriented, effective way.

Say you want to learn to play guitar. Cool: Commit to spending some amount of time every day practicing. But don't just go through the motions. Say you're playing scales: Try to be perfect. Then play at half speed and try to be perfect. Then play at double speed and try to be perfect.

The whole time you practice focus on some measurable result. The immediate feedback you receive from mistakes will help you modify your technique... and the immediate feedback you receive from success will boost your motivation and make you want to challenge yourself even more.

Challenge yourself, apply yourself, and adapt to the immediate feedback you'll receive when you practice in a focused way. Fifteen minutes a day spent engaged in that kind of practice beats hours of mindless "effort."

8. You want to start a business.

The thought of going from zero to thriving enterprise is daunting. So take one step. Call one potential supplier. Visit one potential location. Scout one similar business. Have lunch with one successful entrepreneur.

Blast out one draft of your business plan.

If you really want to start a business, doing one thing will make you really excited about doing another thing... and soon you'll be chugging along like a runaway entrepreneurial train.

Of course those are just examples. Whatever it is that you want to accomplish, no matter how impossible it seems to accomplish... just pick one thing and start doing it every day.

That's a resolution you can keep--and a resolution that brings you a lot closer to whatever big goal you want to accomplish. And because you can keep that kind of resolution, it's one that will make you feel a lot better about yourself.

We can all use a little more of that.

You can maintain your entrepreneurial culture--long after you raise funding, and start making money. Here's how.

Early in my entrepreneurial career, American Express acquired my first start-up, a company called Competitive Technologies. I remember wondering why a company with seemingly infinite resources would buy my much smaller one. And executives there told me why: there are some aspects of the way start-ups operate that even the world's most established companies can benefit from.

Here's a few ways long-standing and even large companies can behave more like start-ups:

1. Stand for Something

People you know who work for bigger companies are sometimes envious of the sense of belonging that start-up counterparts have. The sense of mission, the excitement. So put it back. Find a cause and rally all your employees around it. Give them a unifying sense of purpose, something they can share and feel part of. After all, if a winning sports team can unify an entire city, then surely you can energize your own employees around winning your Super Bowl in whatever market you're in. Draw that Super Bowl goal on the board, and hold a pep rally to get everyone excited about winning together. When's the last time you held a pep rally at work?

2. Collaborate

Start-ups are "scrappy." But being scrappy doesn't mean doing everything yourself. It means getting things done efficiently; sometimes that means bringing in a partner. Established companies often think they already know everything. Yet Google recently called us at ColorJar to conceptualize, design, and develop new prototypes based on Google technology. Why would a big company like Google, with nearly unlimited brainpower and resources, choose to partner with a small company rather than do the work in-house? Because there's value to bringing in outsiders with fresh ideas, people who won't get bogged down by everything else the organization is doing. If Google can do it, why can't you? Invite a local start-up to work on a project with you. Then stand back and be amazed at your combined power.

3. Stay On The Pulse Of 'What's Next'

You can't do this from inside your conference room. Leave your office and connect with your customers on their turf. Forget everything you know and listen and observe like a child exploring a new planet. But instead of going back and just telling your findings to your co-workers, present what you've learned to an outsider, someone not already molded in the way your company operates. I often get asked by companies to listen to their new ideas precisely because I don't know how their company does things today. An independent observer can often see what you're missing. You wouldn't proofread your own work.

4. Reward Risk

Not all ideas are good ones. They won't all work. But start-ups are the source of so many breakthroughs and disruptions across industries because their employees are not afraid to try ideas out. Think about the culture at your established company. Are people hesitant to make radical new suggestions? Are managers more worried about upsetting you than taking chances that could catapult the company ahead in the market? Do you reward risk, or just punish failure? You can't have one without the other.

5. Have Fun

In the early Priceline days, I put a sign on my door that said "It is OK to have fun here." Some big companies think that if you're laughing and having a good time at work, you must not be working hard enough. Quite the contrary. Look in the dugout of the baseball team in first place, the one winning all its games. That's where you'll see the pranks and the fun. Humor eases the tension, and employees that love being at work do a much better job. When's the last time you went down the hall and played a little practical joke on an employee? Try it sometime, and watch the smiles and laughter turn into energy and increased production. Start-ups are fun because they're designed that way. Your company can be, too.

Zulily co-founder Darrell Cavens on how technology, and speed, have helped his company break new ground in retail.

Darrell Cavens co-founded Zulily in 2009, and just three years later, the company had achieved a billion dollar valuation. As part of a series on start-ups that have achieved this milestone, Inc's Jeremy Quittner spoke to Cavens about investors, e-mail, and grass stains on his son's clothes.

As dads of young kids, [co-founder] Mark Vadon and I knew first-hand what it was like trying to buy kids' clothes. When I dropped off my daughter at daycare, she had the same character on her t-shirt as some of the other kids. The shirt just was not special. I could go to a boutique store, and spend $50 for a pair of pants for my son, but an hour and a half later there would be grass stains and holes all over them. So we saw a white space between the big box and the boutique stores.

That was the fall of 2009. We launched the site on January 27, 2010.

It has been an interesting three years. We are in our fifth office space, and every time we move, I walk into each space and say, "It is so big. Do we really need a place so big? It seems crazy." And now, as I look around, I see that each time it was the right decision. We have about 600 employees now.

We've had to change a lot: how we work, how we hire and how we manage, and we've had to think anew about the types of folks we are recruiting.

But a lot has stayed the same. Since the beginning, we have had a weekly company meeting. I tried to cancel them and there was an uproar. Now we're at a scale where we record and videocast them. But there's still a sensibility that being a startup is who we are.

I believe a start-up is a state of mind. You can be a bureaucratic, difficult painful company to work with at 15 people, or nimble, fast moving company with 4,000. I have always tried to keep things moving fast, and to keep people comfortable with failure. I have spent a lot of time trying to keep the culture this way, and trying not to let mediocrity set in.

Valuation is Validation

From day one, Mark and I had a vision of building a great consumer retail brand. A fundraising event is just that: a fundraising event. For our employees and teams, the valuation means we can bring money in that looks forward and lets us scale bigger and faster than we have. Our vision is to be known as a great Northwestern retailer over the long-term. The [valuation] allows us to keep that go-big mentality.

The valuation is validation for what we've built. We have a grand vision for how we get this company to the $10 billion number. At the end of the fundraising, there was an element of, "Gee, this is great--extra capital that will help us drive to the next place, but this is not the destination." It helps validate us externally. When we recruit and talk to candidates, it gets a lot of attention.

We launched in Europe in April of this year. It was a big endeavor, with 30 people in London. You have to have the capital to invest ahead and to go after this, because it is not profitable out of the gate.

Technology is an enabler for this business. We have over 10 million people signed up for our e-mail and our goal is to deliver 10 million e-mails in 15 minutes in the morning. When we talked to the top e-mail providers, they said we can't do this. We don’t think it can be done. But we have done it, and when you do this, a lot of people come to the site very rapidly. When we open the doors it is like Black Friday every day.

We spent a lot of time talking to investors about what we are trying to do and making sure they are on board with this vision. Most venture investors have a seven to 10 year time horizon, and our company is three years old. Most investors are very excited about this and our momentum and vision of what this business can be. Some of the feedback I get from them is to make sure, as we grow, that we can continue the success we have had in great customer experience, and stay obsessively focused there. Investors are pushing for growth and making sure we do this well and build a sustainable long-term business.

What drives these valuations is a forward-looking view of the potential of what these businesses can be. Five to 20 years out, what do these businesses look like? Much of that is driven by growth.

Our company is about delivering freshness and newness every single day, and moving at a pace that others in retail have not seen. In traditional retail models, you work today on product that will be in the store 18 moths from now. We are adopting about 1,500 styles of product every day and 5,000 SKUs. As I give retailers tours and explain this, they look at me like I don't know the number. That's more than they do in a season, and we do it every day.

Take control of your work experience and notice how much more gets done.

The New York Times recently ran an article about how email can make people less productive. However, misuse of email is only the tip of the proverbial iceberg. Here are 10 actions that you can take today that can make you at least twice as productive as your colleagues.

Meetings can only be productive if people know why they're meeting in the first place. An agenda provides focus and purpose. The lack of an agenda guarantees meandering conversations that dive into rat holes. They're a waste of your (and everyone else's) time.

Unless you're working in telesales or product support, there's no reason why you should ever take a call from somebody you don't know. After all, when was the last time you took an unexpected call that was truly important? Days? Weeks? Months?

A voice-mail message consumes minutes of your time (more if you have to replay) to communicate information you could absorb from an email in seconds. Explain in your outgoing message that you don't use voice mail, and instead provide your email address.

It takes time and energy to change gear to sort through (and respond to) a long list of disconnected messages. Most email programs allow you to route different types of messages into folders, where you can review and respond en masse rather than piecemeal.

When you must do creative work or absorb complex information, the last thing you need is your computer and phone chirping and beeping for your attention. Whatever it is, it can wait until you've finished the task at hand. Trust me.

For some people, a day at work means an endless coffee klatch. They wander the halls searching for somebody, ostensibly to discuss business but really just to chat. Don't let these time leeches hobble your success. Just say no. If necessary, get rude.

What you eat determines your energy level, and your energy level determines how much you can get accomplished. Sugary treats provide a quick energy boost but then create an even deeper dip. Heavy foods take energy to digest, leaving you with less to use.

The human body is not designed to sit for hours at a stretch. Attempting to do so inevitably creates aches and pains that leech your energy as your body tries to compensate and heal them. So get up and move! Use a timer if you have to.

Most people waste an extraordinary amount of time obsessing about (and second-guessing) their decision making. However, you're always better off making a good-enough decision quickly than waiting for an imaginary best decision.

If you stop pretending to be productive when you're eating and sleeping, you'll be far more productive when you're actually working. Being always available is an unfailing recipe for stress, illness, and bad decision making. Give it rest.

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Many online companies are disappointed with the FTC's recent ruling on Google's search results. But some of Google's direct competitors are surprisingly supportive of the decision.

Yesterday, Google emerged largely victorious from the Federal Trade Commission's investigation into whether its business practices violate antitrust laws. Some businesses argue that the FTC's decision allows Google to promote its own Web properties over competitors in search results.

The FTC investigated allegations by rival companies that Google modified its search algorithms to bump down competitors' listings, or eliminate them altogether. In particular, competitors singled out "Universal Search," which prioritizes Google's own services, such as Google Shopping and Google+ Local, when users search for topics in certain categories. Yesterday, however, the FTC ruled that Google's method of search rankings was not necessarily harmful to consumers. Google voluntarily agreed to change its practices on two separate matters relating to its mobile-phone patents and its ad platform.

The decision was met with disappointment from FairSearch.org, a coalition of companies including Microsoft and travel search engine Kayak. The coalition argues that because of Google's dominance in search, the fact that it favors certain sites unfairly obscures other alternatives, which ultimately harms innovation on the Web. The FTC's ruling grants Google free license to block companies from its pages, then launch competing services of its own, says Colin Pape, the CEO of ShopCity.com, a site that provides tools for local businesses to create online storefronts. "From our perspective, what Google is doing is taking advantage of its dominant position," Pape says. "It's harmful to consumer choice."

In fact, Pape alleges that exact scenario happened to ShopCity.com. In 2009, the site dropped dramatically in Google's search results, according to Pape. When he contacted Google, he says, he was told to improve his site's quality. Months later, Google launched Places for Business, a service similar to ShopCity that helps local businesses establish an online presence. Eventually, Pape says, after ShopCity joined FairSearch.org's FTC complaint, the company's listing rose in Google's search results.

Shouldn't companies expect that Google would promote its services above those of competitors? Perhaps, Pape says. But, he adds, the search giant lacks a transparent process for addressing why it chooses to block certain sites in search results. "The problem is that Google has a blank check now," he says. "It should need to prove how its services are better for consumers, to have some type of mechanism where it's held in check."

Google's most direct competitors--other search engines--don't agree with that argument. "Just because you got free traffic from Google yesterday doesn't mean you have the right to get it today," says Rich Skrenta, the CEO of Blekko, a search engine whose results are partly curated by users. "It's not appropriate for lawmakers to decide how a company's algorithm should function."

Indeed, several newer search engines trumpet the fact that they prioritize certain results over others. Blekko's About page states, "A search engine is an editorial product. The algorithms that determine search results are created by humans and contain an editorial bias." And DuckDuckGo, a metasearch engine, earmarks a group of trusted sites to power its Goodies feature, which displays answers to certain queries at the top of search results.

As long as search engines are transparent about how they prioritize results, says Gabriel Weinberg, DuckDuckGo's CEO and founder, that bias shouldn't matter. "That is a choice search engines should be allowed to make," he says.

Probably nothing good--the FTC barely slapped Google on the wrist. Now, small businesses have to learn to live with it.

After years of complaints about search results on Google, the Federal Trade Commission finally investigated and ultimately, took no formal steps against the company. The result must have sent Larry Page and his management team dancing in the company's headquarters and driven Steve Ballmer, CEO of Microsoft, which had lobbied for strong action, looking for a bottle of aspirin.

For small businesses, life will be go on pretty much as it has been. Don't expect any sudden lift in your search results or a massive Google reprisal, although you may want to revisit some strategic marketing decisions you have taken.

A major finding of anticompetitive behavior was always going to be tough to achieve:

• Google's search market share has been big, but traditionally courts have looked for a two-thirds share as the starting point of monopoly. Google has been hovering just below that.
• Legally, market dominance generally means the ability to significantly raise prices over time. When it comes to dollars, only advertisers are paying, and the rats are set by auction. In that way, Google has no control over how much companies will pay for advertising.
• Google has a number of popular services, which helps explain why its offerings tend to do well in searches on its engine. But they aren't always the first offering. For example, a search today for "maps" brought Google Maps to the top, but a search for "directions" had MapQuest as the first listing.

The basic requirements of an anticompetitive finding were not strongly in place, if they were there at all. Although the FTC claimed that Google would change its business practices, this seemed largely a face-saving headline. The major concession was about making some fundamental patents, which it gained through the Motorola acquisition, available to other handset manufacturers, including Apple.

A more minor concession, though, might have some implications for small businesses:

Under a separate commitment, Google has agreed to remove restrictions on the use of its online search advertising platform, AdWords, that may make it more difficult for advertisers to coordinate online advertising campaigns across multiple platforms.

Advertisers who wish to use a search advertising platform spend considerable time, effort, and resources preparing extensive bids, including keywords, price information, and targeting information. Once an advertiser has entered the information necessary to create a search advertising campaign, the advertising platform sends critical data back to the advertisers that they need to evaluate the effectiveness of, and to further manage, their campaign. Advertising platforms use application programming interfaces, known as APIs, to give advertisers direct access to these advertising platforms so they can develop their own software programs to automatically manage and optimize their advertising campaigns.

Some FTC Commissioners were concerned that Google's contractual conditions governing the use of its API made it more difficult for an advertiser to simultaneously manage a campaign on AdWords and on competing ad platforms, and that these restrictions might impair competition in search advertising.

What does all of that mean for you? You can expect software and services to emerge that will let you more easily manage an online advertising campaign across multiple ad platforms.

In addition, Google will allow websites to opt out of vertical search offerings--the specialized categories like blogs, books, and shopping--while still appearing in overall organic search results. This has to do with Google allegedly pulling in such content as user reviews from other sites to improve Google Local and Google Shopping. While that will be important for some sites like Yelp, which develop and collection proprietary content, it has far less impact on smaller businesses, except that the other sites may become more important marketing venues because consumers will have to go to them for the review content.

As far as search bias goes, the FTC decided that if it existed, it could be "plausibly justified" under U.S. law.

In other words, most small businesses will be entirely unaffected by the agreement between the FTC and Google.

In her new memoir--and this Q&A--entrepreneur Ping Fu describes her journey from communist China to co-found Geomagic, a 3D imaging and design company.

Ping Fu's American Dream emerged from nightmare.

Raised in Shanghai by a loving aunt and uncle she believed to be her natural parents, Fu was 8 years old when the Cultural Revolution raged through China, decimating affluent, educated families like her own. Forcibly relocated to a dormitory in Nanjing, Fu survived for years in a single, squalid room, struggling to protect her younger sister and preserve some semblance of personal identity. Her stories are excruciating: beatings, gang rape, humiliation, starvation, incarceration, and endless self-denunciations meant to break her will and make her believe "I am nothing."

Expelled from China at 25 because of her research into forced abortions, Fu fetched up in Albuquerque with no money and no English. The next phase of her life is an immigrant epic that took her from menial labor to Bell Labs to the National Center for Superconducting Applications, where she supervised Marc Andreessen during development of the Mosaic browser. In 1997, Fu co-founded Geomagic, a company based in North Carolina's Research Triangle that makes software that captures "point cloud" images of 3D objects that allows them to be physically reproduced. (Most famously, the company scanned the Statue of Liberty in 2002.)

On the strength of her personal struggle and technological achievement, Inc. named Fu Entrepreneur of the Year in 2005. Fu's new memoir, "Bend, Not Break," (Portfolio/Penguin, January) is a full recounting of her harrowing, inspirational tale. Fu spoke recently with Inc. editor-at-large Leigh Buchanan.

Early experiences influence who you become in later life. Are you successful because of those horrific years in China, or in spite of them?

I hope that is not a reason behind my success, because nobody should live that kind of life. Nietzsche has a saying: "What doesn't break you makes you stronger." I think there's truth to that. But let me define "stronger" with a little more granularity. I would say my background has made me more tolerant with difficult situations. I don't give an extreme response when bad things happen. And in some ways it made me more optimistic.

Optimistic in what way?

Not in the sense that everything is good, but in the sense that I know things will work out, one way or the other. They always have in my life. For example, every successful company has had a near-death experience. In 2000 everybody told me that Geomagic was going to die. I remember being in line at an airport and I met someone from the area and he said, "Oh, Geomagic still exists?" But I never thought it would die. Maybe because I never died. I should have died many times, but I didn't. I always thought that somewhere around the corner was another road, and I would find it. It's just that right now there's a big mountain in front of me and I can't see it.

When you were hungry and hopeless in Nanjing, everything you loved stripped from you, how did you gird yourself psychologically to survive?

Partly, I think it's genetic. When I did Myers-Briggs I happen to be more a thinker than a feeler, which helped. Having a very loving family when I was young also gave me a good base. And I had my little sister. I had to survive to take care of her. She was my responsibility.

The other part I think is my uncle--my Shanghai papa--instilled in me some of his strength and values before things fell on my head. My Shanghai parents taught me to look at the lights in darkness, to look at beauty when there are things around you that are ugly, to show kindness when others are cruel to you. So I applied some of those principles when I had to be on my own in that horrible place.

Where did you find beauty in that situation?

After I was removed from my Shanghai parents and sent to Nanjing, the Red Guards brought me to a dormitory for people who had been relocated. They took me to Room 202, a filthy place with not even a bed in it. The second floor of the dormitory was dark, but at the end of the hallway there was one light. It still worked but the fixture was broken so it was hanging on the side, like a person tilting his head. And I remember staring at that light and thinking it was beautiful and making paintings with it in my imagination, while everything around me was so scary and chaotic and dark and bloody.

In China, you grew up believing lies force-fed you by the government and society. Even members of your family voiced the party line out of fear. Has that made you more distrustful or cynical?

Growing up in the Communist system I was very young, and of course I was brainwashed. To this day I can't get rid of it entirely. Some of the Communist concepts that I have held onto aren't bad--like you always do things for others. That's why I'm attracted to servant leadership. But I struggle with things, like the message that money is bad and things should be equal. I still feel uncomfortable if I think I have it better than others. Not necessarily money. If other people are working and I am on vacation, I feel uncomfortable even though I take very little vacation.

Growing up in this country you choose what to believe. You believe what makes sense to you. So that becomes your anchor. Over there things did not make sense. Communist propaganda was trying to fill our heads and because there was not much schooling and no parents there was no one else to fill them. So my thoughts were just running around as though on vacant land. When I was old enough to reject the propaganda and do my own free thinking I became much more independent. Still, there are times when I talk to myself in my head and I don't know which voice is the right one. Because I grew up without that belief system to anchor me.

For years you were told that you were nobody, and you believed it. How did you grapple with that inculcated sense of inferiority as you became a leader?

"When I started the company I didn't think of myself as a leader. I thought of myself more as a mother."

I have always been a leader, although I did not always recognize it. Because I led myself and my sister through a very hard time. I led my mother when she returned and lived with us in Room 202. She couldn't manage money, and so from a very young age I had to make all the decisions. I ensured that there would be tranquility and harmony among us, otherwise there would have been a lot of conflict. So maybe there is a bit of natural-born leader in me. But I have also had a lot of practice most children don't have.

When I started the company I didn't think of myself as a leader. I thought of myself more as a mother. The maternal instinct is strong in me.

How did growing up in Mao's China influence the way you think about power?

I certainly have an allergy to power. I think and behave more like an anarchist than like someone who can follow rules. I have to watch that a little bit. My natural tendency is to break everything and to question authority. At the same time I believe my leadership at first--it wasn't quite developed--had a little bit of dictatorship to it. Because that's all I knew. I made all the decisions, I gave all the directions. In the start-up phase it worked. Now I need to loosen that. I need to trust people, let other people do things, even if they do it different from me. I have to unlearn the psychological habits I grew up with.

How did your childhood affect your perception of risk?

Growing up, danger was everywhere. And after I came to the United States, with most of the things I did, I still felt that way. So I think I'm not much of a risk taker. I am more of a risk mitigator. It's not like the strongest survive in a bad situation. It's the best prepared.

In the book you describe keeping a journal, which you wrote on the backs of flyers inscribed with Communist teachings. If the Red Guard had found it then that could have been the end for you. That strikes me as pretty risky.

Well my diary was my friend. It was my confidante. The page was like another person that I could talk to in this insane environment. You don't just get rid of a friend. That overcame my sense of risk. And also I was very young. I understood the danger but maybe I didn't fully understand it. And when I was young, death didn't scare me because life was so horrific. From time to time I would want to die. But I knew I couldn't because I had my little sister and I was responsible for her. But I wasn't fearful of death.

Your first book, published in China in 1994, was a rant against money-grubbing entrepreneurship. At that point you'd been living in this country for 10 years. Why did you still feel that way?

For the first 10 years here I was just like any poor immigrant. I was trying to learn about life in the United States, but it was life in the gutter. I'm scrubbing toilets, working in restaurants, trying to put myself and my sister through school. I am living and working with poor immigrants in Chinatown and from Mexico and African-Americans, all of whom have a very tough life. I had no idea about money: it was just what I needed to survive from day to day. And even though I was living in the United States, I was still under the brainwashing I experienced in China. Of course I eventually ended up at Bell Labs. But when I wrote that book I hadn't been living the middle-class life, American Dream very long.

I want to ask about a couple of sayings cited in your new book and how you've applied them in business. The first is "Who can say what is good or bad?"

"Who can say what is good or bad" is very much of a Buddhist concept. It's about accepting instead of judging. Long-term thinking instead of short-term thinking. A lot of times when you encounter something and only look at it from the perspective of the present, it is bad. But seen over the long-term it turns out to be good. So, for example, at one point in 2001 I signed a contract with a customer, Align Technologies, that if you just looked at it on its face you would say was a bad contract for us. But if I hadn't accepted those terms, Geomagic would have died. So it was a good decision to take a bad contract. I had to step back and look at the totality of the situation. And, of course, big success and big failure go hand in hand. It's usual that a big failure generates an idea for a big success.

The other saying I found interesting is "The number-one strategy is retreat."

I originally thought this was from the "Art of War," but I did some research and found it comes from the "Thirty-Six Stratagems," which is a collection of military and political strategies from ancient China. It is a very famous statement that everybody in China knows. It means the first strategy should not be confrontation. The goal is not to win but to get where you want to go. Another meaning is: when you are stuck, back off. I like William Ury's books about negotiation, and the way he puts it is "Go to the balcony." Because if you take one step back, then the sky is bigger and the ocean is wider.

"The goal is not to win but to get where you want to go."

Geomagic got sued by two big international companies that claimed we had violated non-disclosure agreements while in discussions with them. Everybody said fight it. My corporate attorney said fight. My board said fight. But we didn't have money for a lawsuit, and if we lost then the company would die. So I had to put my ego aside even though I knew we didn't do anything wrong, really. If winning is losing then it's not about winning. I needed to retreat and get to where I wanted to be. That meant I had to get rid of this lawsuit. So at a meeting with these companies I asked them not to bring a lawyer into the room. And I started out by apologizing. I told them that if they continued with the lawsuit they would kill my company, and I was sure that was not their intention. So could we settle this? Ury says you have to understand the needs of the people you are negotiating with, and as we talked I realized they wanted some of our patents. Generally people would say, why did you hand them your patent just because they wanted it? That doesn't mean they deserve it. But the patents were not in my main market. And it's not about fairness. It's about achieving the desired result.

Thanks to advances in 3D printing and the maker movement custom manufacturing is no longer just a technology--it's a business model. How is Geomagic making the most of this new world?

I'm struggling with that. On the one hand, I am so thrilled and excited that people are catching up to something I have been talking about for the last 15 years. On the other hand, we were pioneers, so we had to work out all the kinks and difficulties ourselves and that was very hard and expensive. It's a very different business model now that things are becoming democratized, when many more people are doing it. So we have to figure out how to transform our business model for this new world without destroying our existing revenue stream. We don't have the luxury of a big company that can just set aside a team to work on that.

Specifically, what has to change?

We need to change from building software to building platforms. We need to change from serving very high-end companies to serving professionals--by which I mean craftsmen--and consumers. It's the same market. It just gets pushed down. We recently acquired a company called SensAble Technologies that allows us to move toward design software. So, for example, if a toy maker wanted to modify a Hot Wheels car from the past we can both create the digital image and also do the design on it. It provides a much broader product portfolio.

After all your success, you say you still feel like an outsider in the gonzo world of tech entrepreneurship. Have there been moments in which you feel truly at home?

There are many times I feel truly at home. When I was named Inc. Entrepreneur of the Year and spoke at your conference was one of them. To stand on a stage with Bill Clinton and Thomas Friedman…I flashed back to the last time I stood on a stage in front of a large group of strangers. I was a child in China. They forced us to publicly denounce ourselves and our families and hit us if we were not convincing. I had to say that I was nobody, that I did not deserve to live. The people watching me jeered and denounced me.

At the Inc. conference they gave me a standing ovation. That was a feeling of being home, that I had arrived.

How much do you know about the relationship between your health and your productivity? Here's how to find out.

The sluggish pull of our usual routine is often the death knell of even the most modest New Year’s resolution. Old habits are just too cozy, familiar, and tempting to shake off.

But what if you could turn the daily office drudge into your greatest ally? Auto analytics, as researcher H. James Wilson recently explained, can help you do just that. It's a growing--somewhat informal--field of behavioral evaluation that helps users gather and process information about how they spend their time. This can include anything from using a heart monitor to gauge stress levels throughout the day to strapping on an accelerometer to see how much you move.

Once you have this data, the theory goes, a new level of self-awareness will unearth more productive people and, ultimately, a more efficient workplace.

“Entrepreneurs are seeing the potential of this before anyone else, because they are always looking to fine tune their self awareness,” Wilson explained. And there is great potential for employees at small companies to use auto analytics, he said, to get a better handle on how they spend their day.

Auto analytics directs attention to three principal areas: thoughts, physical health, and emotional well being. And there is a plethora of tools—iPhone apps, computer programs and electronic gadgets—to help you get started.

Electronic auto analytics gadgets are categorized as trackers or “nudgers,” though they are sometimes both. The former document routines and reveal patterns, while the latter process data and recommend a course of action. Many work in conjunction with apps, which crunch the data gathered by an electronic device and recommend a course of action.

Check out these three:

1. PACO—or Personal Analytics Companion. Designed and tested in an organizational surrounding, PACO is an open-source app that enables you to set up your own experiments. Say, for instance, you're a programmer who is easily sucked into endless hours in front of a computer screen, but you'd prefer to be making more phone calls to potential clients. With PACO you can set up reminders on your Android phone (the developer is currently working on an iPhone version) or computer that "ping" to let you know when you've been doing one activity for a specified amount of time.

2. Nike Fuelband. This gadget uses an accelerometer to monitor your movement throughout the day. The band works in conjunction with the NikeFuel iPhone app (free on iTunes) and displays your progress via an LED display. When you start work in the morning, the light glows red. As you move throughout the day and come closer to your specified goal, the lights shifts to green. The device records every step and calorie burned, and displays the time of day.

3. Withings Wifi Bodyscale. This scale monitors and tracks your weight, breaking it down into fat and lean mass. The scale connects to a web dashboard that displays your BMI and relates your data to a healthy reference range for your profile. You can then share the information on Facebook and Twitter, or pass it along to your healthcare provider.

Entrepreneurs who have affairs within the workplace, or even outside it, are likely to see their companies suffer.

Think your extra-marital affair or secret workplace relationship has no bearing on your company's success? You're wrong. Even if you aren't General David Petraeus, a hidden affair can do irreparable harm to your business, according to David Gebler, attorney and founder of the Skout Group, a consultancy that helps businesses avoid corporate scandals. He's also author of The Three Power Values.

These days when the line between work life and home life is increasingly blurry, you can't put up a firewall between the two and expect them to stay separate. "Your personal life may not seem like anybody's business--but it is, so get over it," Gebler says.

How exactly can an affair hurt your business? Here are five different ways:

Even if your affair is with someone unconnected to your company, if employees find out about it--and they will--they will get the message you believe rules don't apply to you. The culture of a company reflects its leader's values, so they may begin thinking that they too should break the rules.

"You're asking people to trust in your decisions," Gebler says. "There's this expectation that as a leader, you're a pristine role model." If it looks like you've screwed up your personal life, both your employees and your board may wonder if the decisions you're making for the business are the right ones.

"Conflict of interest creeps in," Gebler says. "Most leaders I've seen get into trouble because they start doing things like hiding expense reports, or justifying trips, or other decisions in order to spend time with the other person." Your affair will make it hard for you to focus, he says. And you might actually start making bad decisions.

If you're having a relationship with someone within the workplace, you almost inevitably will be accused of favoritism. "Let's say a senior leader is having a relationship with a high-performing superstar," Gebler says. "That person will always be tainted. People will say, 'That's the boss's lover--of course she got the promotion. In tough economic times when you need your team to be 100% focused on the job at hand, this kind of office soap opera creates a distraction."

In his experience, Gebler says, executives who feel certain their lover would never file a harassment suit are often proved wrong. It's one more piece of self-deception to think that because your affair is going so smoothly right now, you and your lover will part on friendly terms when the time comes. It may not work out that way, Gebler says. "If the relationship ends badly, the angered subordinate will often bring a harassment suit."