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The Case for Ending Sales Commissions

March 17, 2014 - 2:56pm

Changes in the way salespeople work and the way their performance is managed could render traditional commission plans obsolete.

The New York Times recently ran an interesting piece about companies moving their sales teams from commission to straight salary. As the article noted, “To many in the highly competitive world of sales, such a move is tantamount to blasphemy.” I’m sure they also heard some stronger language that they couldn’t print.

Most people view commissions as integral to sales. Who hasn’t heard the cliché that salespeople are coin-operated? Besides, commissions must work--why else would they be part of every comp plan from selling chewing gum to jumbo jets?

The last 20 years, though, have seen tremendous changes in how consumers buy products, how people work, how sales and marketing operations are managed, and how people sell. With all that change, perhaps commissions have become obsolete.

The Evolving Sales Landscape

One big change is that customers are showing up much later in the sales process. The Corporate Executive Board, a firm that provides advisory services to businesses and government clients, describes this phenomenon in its best-selling book, The Challenger Sale. The firm notes that buyers are 57 percent of the way done with their purchase decision before they ever call a salesperson. They’re getting more than just product information online. Prospects are talking to other customers, reading reviews, checking price and availability, and, in the case of software products, usually getting free trials and test versions. The role of the salesperson in this model is fundamentally different.

A related change in sales is the impact of social media on your company’s reputation. Your salespeople are the face of the company. Prospects who have a bad sales experience can tell hundreds of people in seconds, or post a review that will last for years and be seen by thousands. Commissions that incent people to close the deal may lead them to overpromise on what can be delivered, and then they move on to other prospects once the deal is closed. The damage to a company when this happens can be tremendous.

The Problems With Commissions

Something that hasn’t changed is the issue of fairness in commissions. The economy has cycles. In 2001 and 2008, the economy suffered tremendous contractions. Salespeople everywhere saw their incomes drop sharply, even as they were being asked to work harder than ever. From a good year to a bad year, salespeople may see their income drop by more than 50 percent. Salespeople also make less when they take new jobs or get assigned new territories. It's hard to argue that commissions are fair when so much of what people earn is so dependent on factors they cannot control.

Commissions have other problems as well. They encourage people to maximize their income, even at the expense of the greater good of the company. Many comp plans have evolved complex formulas about margins, discount rates, deal sizes, and timing in an attempt to prevent people from doing the wrong deal. There’s an industry of compensation-management and commission-calculation tools, and an army of sales-ops people to run them. It can be an expensive and messy process.

Changes are happening that make a commission-free world more likely. One is that field sales are being replaced by salespeople who stay at their desks all day. Research from cloud-based sales technology provider InsideSales.com shows that field-sales positions have been stagnant for years, while the number of people selling from their desk has been growing rapidly.

This is being driven by better Web conferencing tools, increased comfort with buying over the Web, and an increasing demand for immediacy. Buyers would rather have a conference call now than an in-person visit next week. Even remote sales workers are spending less time in face-to-face meetings and more time working from home offices. The days of the field salesperson who would check in twice a week are gone. Now salespeople are viewed more and more as part of a process that can modeled and reproduced.

The other change is that, more than ever before, managers can actually see how salespeople are working--and if they are working. Reports generated by the CRM system, activity reports, sales performance management tools, and the increased availability of meaningful performance metrics have replaced spreadsheets and notebooks. Now managers are expected to know what their people are doing, and be looking for ways to help them perform better. Tweaking the commission plan and running spiffs are being replaced by better training and support, and more active management oversight.

The ultimate question is if salespeople will actually sell if they don’t get commissions. The truth is that most people want to succeed at work, and most jobs don’t need highly leveraged variable compensation plans to get people to perform. But whether commissions should be eliminated entirely ultimately depends a lot on the company. Either way, it's something that conscientious managers should be thinking about.

Negotiating While Female: Sometimes It Does Hurt to Ask

March 17, 2014 - 1:56pm

Sheryl Sandberg may have emboldened some women to ask for better pay with her book 'Lean In,' but it can backfire.

This story first appeared in Slate.

Job-searching women have long expected to make less money than their male counterparts (which companies know, so they offer us less). We also tend to flinch from haggling with our bosses once an offer hits the table. But Sheryl Sandberg and a new generation of working feminists have inflamed our timid souls: We understand now that negotiating for a higher salary can help shrink the gender pay gap, and that when we value our time and expertise, so do our employers. Plus, what's the downside to floating a better number to the higher-ups, like a plume of smoke from the burnt offering that is our endless drudgery?

The worst they can say is no.

But, in fact, bosses can do a lot worse than say no--they can assign us fewer projects because we lack team spirit. They can label us rude and uncooperative. They can even rescind our job offers.

The blog Philosophy Smoker hosts the tale of W, a woman who says she was extended a tenure-track philosophy position at Nazareth College, a liberal arts school in Rochester, New York. She replied, she says, by emailing the selection committee:

As you know, I am very enthusiastic about the possibility of coming to Nazareth. Granting some of the following provisions would make my decision easier[:]

1) An increase of my starting salary to $65,000, which is more in line with what assistant professors in philosophy have been getting in the last few years.

2) An official semester of maternity leave.

3) A pre-tenure sabbatical at some point during the bottom half of my tenure clock.

4) No more than three new class preps per year for the first three years.

5) A start date of academic year 2015 so I can complete my postdoc.

She ended the email by writing, "I know that some of these might be easier to grant than others. Let me know what you think."

Their alleged response:

Thank you for your email. The search committee discussed your provisions. They were also reviewed by the Dean and the VPAA. It was determined that on the whole these provisions indicate an interest in teaching at a research university and not at a college, like ours, that is both teaching and student centered. Thus, the institution has decided to withdraw its offer of employment to you.

Thank you very much for your interest in Nazareth College. We wish you the best in finding a suitable position.

The abrupt turnaround from Nazareth shouldn't necessarily surprise us. While we can't know the full circumstances surrounding this alleged exchange (in an email, the college declined to comment on personnel issues), research shows that initiating negotiations while female can be dangerous business.

In a 2007 study, Linda Babcock and Hannah Riley Bowles found that men and women were less likely to want to both hire and work with women who asked for raises; the go-getting femmes were perceived as demanding and uncollegial. Raise-seeking men, on the other hand, faced no backlash at all: Not only did the study participants tend to grant them lots of (hypothetical) perks, but socially their images went untarnished.

In a follow-up paper published in 2013, the same year that Lean In hit bookshelves, Bowles and Babcock isolated some strategies--blaming another supervisor for the ask, "expressing concern for social relationships"--that helped women navigate the raise minefield by making them appear more feminine. Yet the line between aggression and gently assertive charm is thin. "Even if a woman successfully negotiates a higher wage," the researchers warn, "she could dampen her long-term earnings" by "[alienating] colleagues who might be important to her career advancement." (For more on bargaining and gender stereotypes, check out this 2009 paper from the Negotiation Journal.)

Again, the W/Nazareth situation may be more complicated than what has surfaced in the blogosphere. Still, if the hiring committee was already wavering, there are not entirely kosher reasons that W's request for "the usual deal-sweeteners" might have pushed them over the edge. "It's not that women can't negotiate, but they have to be much more careful about how," Babcock told me on the phone. "Men can use a wide variety of negotiation approaches and still be effective. But women generally need to pull off a softer style."

The reasons for this are complex, but they boil down to "what's normal, what the norms are," says Babcock. "We're used to seeing women being less aggressive, more soft. And when people don't behave the way we expect them to, there are often negative consequences: You'd see similar social penalties if a man in a business context broke down and cried."

I asked her what W could have done differently in light of the negotiation double standard. "Email is hard," she replied. "It feels very direct, cold, and assertive, and it's easy to misinterpret."

Still, based on what we know, Babcock thinks W did a lot of things right. She expressed enthusiasm and showed that she respected the hiring committee's constraints. "If a man had sent that message," Babcock says, "I suspect it might have been dismissed as a rookie mistake. Rescinding the offer rather than just refusing the requests is horrifying."

Perhaps more horrifying are the tortured conditions of the academic job market, which make this kind of alleged bait-and-switch possible. Still, as Erin Gloria Ryan wrote on Jezebel, the story has impact beyond academia. Take me, for example. I once asked for a raise. But I would never have done so if 1) I had not been inundated in Lean In-themed cheerleading, 2) I were not writing an article about it for Slate, and 3) I had any inkling that tales like W's were possible.

As Babcock said on the phone, the Nazareth debacle "imposed so many costs on so many people." The department (allegedly) didn't get their candidate. W (allegedly) didn't get the job. And women everywhere can now draw the conclusion that they are better off acquiescing to the wage gap than advocating for themselves and, perhaps, winding up with nothing at all.

Read Slate's next article here.

Why the Creep Quotient Is Still High With Google Glass

March 17, 2014 - 1:46pm

You don't just wear Google Glass. You become 'the person wearing Google Glass.'

Shaped like a lopsided headband, Google Glass is an unassuming piece of technology when you're holding it in your hands. You feel as if you can almost break it, testing its flexibility. Putting it on, though, is another story.

Once you do, this Internet-connected eyewear takes on a life of its own. You become "The Person Wearing Google Glass" and all the assumptions that brings with it--about your wealth, boorishness, or curiosity. Such is the fate of early adopters of new technologies, whether it's the Sony Walkman, the first iPod with its conspicuous white earbuds, or the Segway scooter. Google calls the people who wear Glass "explorers," because the device is not yet available to the general public.

With its $1,500 price tag, the device is far from having mass appeal. At the South By Southwest Interactive tech jamboree in Austin this week, I counted fewer than a dozen people wearing it, including technology blogger Robert Scoble, who isn't shy about posting pictures of himself in the shower, red-faced, water running, wearing the device.

Google, like most successful technology companies, dreamers, and inventors, likes to take a long view on things. It calls some of its most outlandish projects "moonshots." Besides Glass, these include its driverless car, balloons that deliver Internet service to remote parts of the world, and contact lenses that monitor glucose levels in diabetics.

There's an inherent risk in moonshots, however: What if you never reach the moon? Ten years from now, we may look back at Google Glass as one of those short-lived bridges that takes us from one technological breakthrough to the next, just as pagers, MP3 players, and personal digital assistants paved the way for the era of the smartphone. Fitness bands, too, may fit into this category.

In its current, early version, Google Glass feels bulky on my face, and when I look in the mirror I see a futuristic telemarketer looking back at me. Wearing it on the subway while a homeless man shuffled through the car begging for change made me feel as if I was sporting a diamond tiara. I sank lower in my seat as he passed. If Google is aiming for mass appeal, the next versions of Glass have to be much smaller and less conspicuous.

Though no one knows for sure where wearable devices will lead us, Rodrigo Martinez, life sciences chief strategist at the Silicon Valley design firm IDEO, has some ideas. "The reason we are talking about wearables is because we are not at implantables yet," he says. "[But] I'm ready. Others are ready."

Never mind implants, I'm not sure I'm even ready for Google Glass.

Specs in place for the first time, I walked out of Google's Manhattan showroom on a recent Friday afternoon with a sense of unease. A wave of questions washed over me. Why is everyone looking at me? Should I be looking at them? Should I have chosen the orange Glass instead of charcoal?

Ideally, Google Glass lets you do many of the things we now do with our smartphones, such as taking photos, reading news headlines, or talking to our mothers on Sunday evenings--hands-free. But it comes with a bit of baggage.

Glass feels heavier when I'm out in public or in a group where I'm the only person wearing it. If I think about it long enough, my face starts burning from embarrassment. The device has been described to me as "the scarlet letter of technology" by a friend. The most frequent response I get from my husband when I try to slip Glass on in his presence is "please take that off." This is the same husband who encouraged me to buy a sweater covered in googly-eyed cats.

Instead of looking at the world through a new lens on a crowded rush-hour sidewalk, I felt as if the whole world was looking at me. That's no small feat in New York, where even celebrities are afforded a sense of privacy, and where making eye contact with strangers can amount to an entire conversation.

But that's just one side of wearing Google Glass.

The other side is exhilarating. Glass is getting some bad press lately. Some bars and coffee shops in Silicon Valley and Seattle have banned it, for example, and federal authorities in Ohio interrogated a man earlier this year after he was suspected of recording a movie with the device. Last month, Google put out a Glass etiquette guide that includes the appeal "don't be creepy or rude."

But the truth is that it's a groundbreaking device, even if it doesn't take off, even if it evolves into something completely different, even if we laugh at it 10 years from now while driving our flying cars in the skies of Manhattan.

I strolled around for a few hours with the cyborg glasses, happily snapping photos. With a mere wink, I captured snowy Lower Manhattan streetscapes and my reflection in the grimy subway-car windows.

There were some whispers. ("Did you see? Google Glass!") There were some comments as I squeezed into the subway with my fellow commuters--comparisons to the Segway scooter, and a warning that it will prove to be a huge battery drainer if I use my iPhone to connect Glass to the Internet.

For more human interaction, I walked into a small macaroon shop to buy a friend some birthday sweets. Alone but for the store clerks, I fumbled to take them off, find a place to put them on the small counter, and get my wallet out of my bag.

"Sorry. You're the first people I'm interacting with wearing these. I don't mean to be a jerk," I told the man and woman at the counter. I took off Glass for the same reason that I take out my earbuds when I am talking to people. I don't want to appear like I am not paying attention to them.

It was fine, though. The woman thought Glass was cool. The man, he might not have, but he didn't say anything.

--Associated Press

How to Hire the Perfect Person Every Time

March 17, 2014 - 1:45pm

Want to avoid the pain--and high cost--of bringing the wrong person on board? Follow this simple seven-step process.

If you've ever hired someone only to realize later that doing so was a huge mistake, you know how expensive, time-consuming, awkward, productivity-killing, and growth-hindering it is. On the flip side, bring the perfect person on board and you can get more work done, help your team jell, and catapult your company into unexpected success.

Tom Gimbel, founder, president, and CEO of the Chicago-based staffing company LaSalle Network, has some ideas on how you can find that perfect person every time.

Always be interviewing.

Ideally, you have a fantastic team and no one ever leaves. Even if that's really the case, you should proactively keep your hand in the talent pool so you can accommodate growth.

Ask yourself: If you got an influx of new business, which areas of the company would be overwhelmed? Is your delivery team knocking the cover off the ball? If so, you might need more salespeople somewhere down the line. Even if you just hired someone and you have a gut feeling it might not be a good fit, start talking to candidates right away.

"The key is to do an evaluation of your business and say, 'Where are we strong? Where are we weak?'" Gimbel says. "If you know where you're weak you should be interviewing in those places anyway. You shouldn't be waiting to fire. You don't want to start interviewing after you fire somebody. Too often I see entrepreneurs and business leaders fire somebody and then...need to replace them. That's ridiculous. I mean, I get it, and sometimes things come out of the blue, but you should always be looking."

Take your time with the interview process.

When you do identify a candidate who looks promising, have them meet a lot of people within your company.

"I think to hire somebody on one interview is crazy," Gimbel says. "You need to vet people out and gauge their interest. I also think it shows the professionalism of your company that you give them the courtesy of coming back to meet other people. You get a lot of growing companies that say 'We need you. Here's an offer right now.' And it really it throws some people off."

Fire quickly.

It might be common sense to quickly get rid of people who aren't a good fit, but firing is usually a painful process for everyone involved and--human nature being what it is--people will put off doing uncomfortable things.

"Especially in smaller, growing companies, the wrong hire is a cancer and you have to get rid of it," Gimbel says. "Especially an attitude [problem]. If you have a high-performing group that's working a ton of hours and you put in a poor performer, all you're doing is weakening the entire machine. You have to be ready to get rid of those people fast and show your other staff members that you're a leader of strength."

Make sure you like the person.

This might sound like a no-brainer but when you're faced with the opportunity to hire some kind of genius or a person with stellar technical skills it can be easy to overlook the reality that he or she might bug the heck out of you or other people on an interpersonal level.

"You need to want to spend time with the people who are on your team, especially in a fast-paced, high-growth company," Gimbel says. "If you think sitting on an airplane for four hours with this person would drive you crazy, then don't hire them."

Don't necessarily cast off the candidate who's missing one critical skill.

Imagine you're hiring for a position in which the person will need to create reports in Excel. You find someone who's seemingly perfect in many ways. She has a great attitude, a top-notch education, and great experience, but alas, she doesn't know how to create a spreadsheet.

Maybe you should shell out the $500 it might cost to get her trained in Excel.

"Now I'm not saying you can take somebody who can't turn on a computer and turn him into the best coder in the world, but I am saying sometimes you just have to think outside the box and say, 'This person really has got the attitude and the work ethic and some experiences that can really help us. How can we fast-forward them on some other areas to be what we need them to be?'" Gimbel says.

Hire according to your core values.

It sounds cliché, but if you know what attitudes and behaviors are important to you, it's easy to filter candidates accordingly.

Maybe your company doesn't care if somebody shows up for work unshaven, wearing jeans, and with messy hair but prioritizes manners and respectful behavior.

"If [a candidate] is in a conference room, I'll have somebody go in there 'accidentally,' shake their hand, and see how the person interacts with someone who's not part of the interview," Gimbel says.

Be a skeptic.

If you need whomever you hire to lead a difficult software conversion or drive massive growth, it's easy to go into an interview and use leading questions that may tempt people to overstate their experience.

"You should go in skeptical, and that person should prove you wrong," Gimbel says. "Most people go into interviews wanting to like the person and have them be the perfect fit. You should go in planning on being disappointed, and hopefully be pleasantly surprised."

How to Vet Ideas: Take a Lesson From Motown

March 17, 2014 - 1:42pm

Article after article has extolled what businesses can learn from Pixar's methods. But long before Pixar was a hit-making machine, there was Motown.

I have a pet peeve about Pixar. Yes, you and your company can learn plenty from Pixar's methods. Yes, Pixar's artistic reputation is well deserved, and all the more impressive since it has not come at the expense of box office success.

Nonetheless, my pet peeve is that sometimes--in casual conversations and in the business media--everyone seems to act like Pixar invented the wheel (or at least the idea of simultaneously pleasing both aesthetes and investors).

I take nothing away from Pixar. All I assert here is that Motown, the record company founded by Berry Gordy in 1959, had mastered the skill of artistic hit-making long before Pixar existed. Between 1961 and 1971, Motown charted 110 top 10 hits. More than half of them sold one million copies, notes The Guardian.

And as it turns out, there are lessons you and your company can take from Motown's methods. Here are two of them:

1. As a leader, make a regular display of the fact that you are not above criticism or negative feedback. Gordy did this at Motown's "quality control" meetings, which took place every Monday at 9am. According to legendary singer-songwriter Smokey Robinson in a recent issue of Uncut, "Everyone would get critiqued, no one was immune. Right down to Berry Gordy, who was still writing and producing."

The purpose of the meetings was to assess the previous week's work: all of the music Motown artists and producers had recorded. The goal was to create a hit record by suggesting how the best of the week's work could be improved. "We'd suggest a new rhyme scheme, or a pay-off, or another chord change, or a melody, or a different arrangement," recalls Robinson.

For Gordy, the key was making his employees feel immune to repercussions, no matter how harshly they criticized someone else's music, no matter whose music it was--Robinson's, Stevie Wonder's or Marvin Gaye's. In a video on Oprah.com, Berry says his aim was to create an "atmosphere of safety of ideas and thoughts."

In the meetings, Gordy took pains to show he was on equal footing with all of the other creators. What mattered most to him was creating a hit for Motown--not gratifying the egos of the various songwriters and producers.

2. Ask yourself--in painstaking terms--if you're providing value to your customers. Even if the creators at Motown's Monday meetings agreed on what their best work of the week was, they did not always release a record.

The reason? Gordy still needed to be convinced that consumers would buy the record, with what little disposable income they had.

"I’d say, 'This record won here, but if you had one dollar, and you were hungry, would you buy this record, or a hot dog?'" Gordy recalls.

On top of the hot dog test, Gordy wanted to simulate how the music would sound to his potential customers. It was one thing to hear a record on Motown's professional equipment. But how that record would sound when played on the radio--or on the less sophisticated record players of consumers--was another matter.

According to former Motown publicist Al Abrams, Gordy intentionally played records "on a cheap machine with a poor sound. The idea was to simulate radio sound. If it sounded good even on the cheap phonograph, it would sound good on the radio."

That level of scrutiny might seem infeasible, in today's atmosphere of getting "minimum viable products" out the door as soon as possible.

But sometimes, that's what it takes to create a hit product--or a company that will forever be remembered for its creative mastery of the hit-making process.

5 Ways to Boost Your Confidence Now

March 17, 2014 - 1:00pm

The life of an entrepreneur means constant challenges--and not always knowing the right solution. When you feel out of your depth, try these strategies.

You aren't the only entrepreneur to second-guess yourself. You're not the only one who feels confused about the next steps or concerned about how to handle a challenge. No, you aren't the only entrepreneur to question your own ability and wish you were smarter, more capable, and more confident.

So many business owners are on a quest to become one of those steadily confident, outgoing people who are at the top of their game 100 percent of the time. But the sad fact is that they're wasting their time and reaching for the impossible. They don't know that even those who seem to have the perfect mindset question their confidence as well. The only difference between those who don't exude confidence and those who do is that the latter see their occasional psychological dips for what they are: an opportunity for growth.

The self-questioning that goes on inside your head is perfectly natural. Think about it. How often must you step into an entirely new arena, like firing an employee or expanding into a new market? How often are you forced to do something that isn't at the top of your list of core competencies? The life of an entrepreneur involves always confronting new challenges.

Accepting this fact is key to increasing your confidence. If you recognize your discomfort as an opportunity for growth, rather than an obstacle, you will reduce your emotional pain and increase your profits. Here are a few confidence-building strategies for when you feel out of your depth:

Get out of your own way

When faced with something new, accept that you don't know what you don't know. Leaders aren't people who know it all; they're people who are willing to admit that they don't know it all. Stop lamenting over your lack of knowledge and create an action plan. Evaluate when and where you need help and what your resources are. Get out of your head and make a mind map or a list of next steps, then create a timeline and get to work.

Differentiate between confidence and aptitude

Do you avoid public speaking? What about sales calls? Identify areas of procrastination and differentiate between those where you definitely lack the aptitude and those you avoid mostly because they feel uncomfortable to you.

For instance, you may not have the aptitude to do your bookkeeping because your creative brain doesn't wrap itself around numbers. Or you might just be fearful of bookkeeping because you would prefer to stay in the dark about your numbers.

What you don't know won't hurt you, right? Wrong. If you're avoiding something out of fear, find the means of support and accountability that will help you to conquer these fears. When you stop avoiding things you deem unpleasant, your confidence will grow and solutions will surface.

Understand your value

You will be faced with challenges and opportunities that simply don't reflect your strengths and never will. We all have core personality styles and areas of strengths and weaknesses. This is a good thing--who wants to live in a world where everyone is the same? Embrace and play to your strengths and turn to others to complete the picture.

Watch out for the waves

Many business owners just ride the wave when things are going well. Just as many get flooded by it when things aren't going so well. On both sides of the spectrum, it's important to stretch and explore your next opportunities for growth. Don't get caught on or in the wave; find your middle ground and continue to grow and learn. Read books and online authors, attend conferences, and work with coaches and mentors who can help with both professional and personal growth.

Stop worrying about what others think

Of course you want to make a good impression, but when you become overly engrossed in what others think you increase the odds of putting your foot in your mouth. Most people, those worth knowing anyway, will forgive a simple mistake because they've made a few themselves. Don't verbally bash yourself if your first attempts aren't perfect. Instead, celebrate your growth and learn from your missteps. People will admire your courage if you embrace it yourself.

What are your favorite confidence-building techniques and resources? Please share!

Should You Let Your Employees Stream March Madness?

March 17, 2014 - 12:33pm

Maybe it's a big ol' distraction, but IT departments are loosening up.

The NCAA Basketball Tournament will boil down to a couple of high-profile, prime time national championship games on April 7th (for the men's tournament) and April 8th (for the women's).

However, most basketball fans will tell you that the most exciting part of the tournament falls in its first couple of days, when the 64 teams competing for the crown are all playing in the same two-day span and TV coverage jumps from game to game. These early days of the tournament are really where the "Madness" moniker derives from.

The problem? These exciting early days fall on Thursday and Friday this week, starting at noon Eastern Time.

That scheduling begs the question: Should you let your hoops-happy employees stream the games at work?

There's no definitive answer. It's going to depend on the industry you're in, the sort of culture you're looking to foster, deadlines your company is facing, the type of work at hand, and maybe even whether the employees in question have earned the right. And even with deserving employees, some companies might prefer asking them to work from home for a couple of days rather than setting the precedent of using office time to stream their programming of choice.

But it is worth noting results of a new survey of IT professionals, showing a push toward more lax policies when it comes to streaming non-work-related content in the office.

The survey was conducted by IT staffing company Modis Staffing and showed that IT workers at less than half of companies--about 48 percent--"blocked, throttled, or banned" streaming content in 2013, down from 65 percent in 2012. The number is expected to hold about steady in 2014.

Mobile devices, the survey suggests, might play a role in this. It becomes less of a burden on a company's systems if their employees are streaming content through a 3G or 4G network on a screen separate from where they're doing their work.

Indeed, the survey also showed that while 67 percent of companies said they had to make changes or preparations for their systems ahead of the 2012 tournament, that number dipped all the way to 37 percent in 2013.

As IT policies grow more relaxed about employees watching the games, so too do corporate policies about March Madness pools among employees. More than 80 percent of companies say they don't regulate employees' participation in office pools, up from 67 percent in 2010. And many employers even stress the team building and engagement capacities the tournament represents.

Is Your NCAA Bracket Legal?

March 17, 2014 - 12:09pm

Go ahead and get in on Buffett's $1 billion offer. Just make sure you stay on the right side of the law.

The National Collegiate Athletic Association basketball tournament--a.k.a. “March Madness”--kicks off this week, and millions will likely participate now that Warren Buffett has offered $1 billion to anyone who completes their bracket flawlessly.

But while $1 billion sounds tempting, chances are you'll become the next office champion and perhaps start a pool yourself. But wait, isn’t that gambling?

Don’t worry, office pools for bragging rights only are perfectly legal. It’s when you start playing for money that the line starts to blur. To keep things in check, make sure your office pool follows company policy and remains on the right side of the law.

Check if your company prohibits office pools

All companies are different, as are the policies that govern them, so make sure you check the most current version of your employee handbook to ensure office pools are allowed. When in doubt, ask your manager.

Ask if “social gambling” is allowed

More than half of the states have an exception for “social gambling,” or playing for money in a social context. For that context to be considered "social," however, no one involved can earn anything; they can only play the game. Games with that require any form of payment may put your pool in jeopardy.

State laws are not uniform, so you need to do some research to see what applies to you. For instance, California allows contests of skill where money is legally involved so long as you follow the state’s rules for operation. And in Iowa, you have to be socially acquainted with the person you are gambling with and no participant can win or lose more than $50 in a day.

If you don’t feel like browsing the laws of your state, it's best to leave money out of it.

Here are some other guidelines to follow if you still very much want an office pool:

  • Do not allow the administrator to take a cut. All money collected must be paid out according to the rules.
  • Make sure everyone is of legal age--over 21 is the safest bet.
  • Everyone’s chances of winning or losing must be the same and based only on skill. If it isn’t fair, it probably isn’t legal.
  • Limit office pools to co-workers only.
  • Don't put it online. Anything placed on the Internet, even for a short period of time, can be classified as online betting. Professionals know this, which is why all companies that organize online pools tell you they can’t be used for gambling.
  • Have winners report gambling winnings on their taxes.
  • Remember, the more you gamble, the more likely you are to draw unwanted attention. Try to keep the number of pools you organize each year to a minimum.

A little research, fairness, and moderation will be your best allies. Don’t get greedy, as too much money, too many participants, and too many pools will increase your risk of legal trouble.

Why You Have to Be Your Team's Top Cheerleader

March 17, 2014 - 12:00pm

Are appreciation and gratitude a part of your management style? Maybe they should be.

I recently wrote about managing expectations and how it's such an underutilized skill.

I've been thinking about that a lot as my email-marketing company, VerticalResponse, marches toward an important launch. As we've gotten closer and closer to the big day, and more and more things have been checked off our punch list, I've been keeping the team informed with real-time emails to make sure everyone knows exactly where we are and what's happening day to day, since we're all moving so fast.

An important function of these emails is to make sure all the teams and individuals that have been killing it for months on end are acknowledged and appreciated. It's so easy to get caught up in the onslaught of timelines and deadlines and forget to say a simple, "Thanks!"

If you've neglected to be your team's biggest cheerleader, I'm here to give you two simple reasons why it might be time to bust out your pom-poms and give 'em a great big RAH!

Please and Thank You

Ever since we were little kids, our parents and teachers drilled it into us to say "please" and "thank you."

And with good reason. Everyone enjoys a little appreciation and gratitude from time to time. But say you're the kind of manager or boss who doesn't believe in that fluffy stuff. You might find your team becoming a bit disgruntled and feeling less than satisfied. The last thing you want on your hands is a mutiny when you can avoid it by merely showing some simple gratitude.

I once knew an employee who didn't care for praise. She coined the phrase, "strokes walk, money talks," but she was rare. What I've found in more than 13 years at the helm is that "thank" and "you" are two of the most powerful and motivating words out there.

Praise Multiplies

The funny thing about praise is once you start doing it, it breeds...and in a good way. When you lead by example and set a culture of gratitude, others in your company catch the wave and ride it with you.

A retail-store manager I know started managing an underperforming store with a pretty disgruntled staff. On her first day she created a "thank you" board and hung it in the back room of the store. She told the staff that is was a place they could openly share their appreciation for anyone on the team.

In just a few days, the board was filled with gratitude statements for things big and small. And guess what? As the culture started to shift to a more positive one, customers started to have better experiences because employees were happier and providing better service. That store shot from being at the bottom of the barrel to winning a regional holiday sales contest in just two quarters.

Look around your company. Got a bunch of grumpy cats? Shake up some real, genuine gratitude and watch it take hold.

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Why You Need to Be a Software Company

March 17, 2014 - 11:30am

Even if you're not in the business of software

No matter what you make, no matter what you provide, if you want to succeed, you also need to be a software company. Here's another in my series of interviews in which I pick a topic and connect with someone a lot smarter than me. This time I talked to Joel Basgall, co-founder and CEO of Geneca, a Chicago-based custom software development firm and six-time Inc. 5000 honoree.

I've heard you say, "The only successful companies will be software companies." My friends in manufacturing would take exception.

As industries, the economy, and the world evolve, there's only so much you can do in the field you're born into: manufacturing widgets, providing a service, selling DVDs, whatever it is you do. The only thing that does not have limits is software. With software, the only limit is the imagination of the people who develop the ideas. That means you can pile software on top of every industry. Software will make or break your organization. Do it well and you can win your market. Don't do it well and you will lose.

And to take it a step further: Anyone thinking about starting a company should make sure software is a part of the go-to-market strategy. Don't wait until it's too late.

Most organizations will say, "Wait. That's not my core competency."

That's what they should say.

But. Say I'm a manufacturer. Here's my problem. Someone else will eventually catch me on speed. Someone else will eventually catch me on price. I have to find a true differentiator, and that differentiator is software: allowing customers to use widgets, giving customers design tools, providing easy customization...

The only way to stay ahead is to innovate, and how much innovation is possible in the real world where the rules of physics apply to everyone? You need a differentiator that doesn't have to follow rules, and that differentiator is software.

So I still do what I do, but I change my operating perspective.

Say you're a service company. The people you bring to the table are your product. Unfortunately, that model is expensive for your customers and expensive for you, because it's difficult to leverage. But if you use software to create new services, enable greater efficiency, enable self-service--then it's cheaper for the customer and ultimately for you, especially as you grow.

It's infinitely easier to deploy software than it is to deploy people. Software lets you bake your intellectual property in and then scale it.

But what is groundbreaking to customers today is ho-hum tomorrow.

Absolutely. That's why you use your people to deal with exceptions, to deal with the unusual, and to work on what you'll provide next.

Generally speaking, a competitive advantage only lasts about 18 months. The top of the pyramid quickly moves to the middle, then the bottom, so you constantly have to keep moving up. That's where the skills and talent and ideas of your people really come into play--innovating so you can continue to differentiate.

So what about my budget? Most companies have an IT budget, but that money tends to be spent on infrastructure and support, not "new."

The average company sees IT and software kind of like maintenance. It's a cost. Smart companies view software as a way to generate revenue. They see it as investment, one with a measurable return.

When you think of software as a way to generate revenue, suddenly it becomes a "cost" you want to increase, because it's a way to increase sales, increase margins, and create greater differentiation. Suddenly, software is a way to be proactive, to harness ideas, to lead the market--not a burden or a distraction.

But what if I didn't go into business hoping to be a software company?

Entrepreneurs start a business because they love what they do, but as they get bigger they spend less time doing what they love and more time running the company. Leveraging software actually lets you get back to doing more of what you love, because not only does it streamline and automate your processes, it streamlines and automates processes for your customers--and frees you up to think of creative ways that doing what you love can better serve your customers.

Check out other articles in this series:

The Best Way to Improve How You Think

March 17, 2014 - 11:25am

When was the last time you took an hour to really mull over a business problem? Exactly. Here's the daily habit you need to change that.

I set out to be an entrepreneur and then an investor. I became a writer almost by accident. Now, I can't imagine not writing--it's something I do daily. It's how I problem solve. And it's crucial to my continued learning and growth.

In the late 1980s, I started my first company, Feld Technologies, which wrote custom software for companies. This was back when personal computers were becoming popular in a business context. But they were complex. Computer salesmen hawked them speaking a language you didn't understand, in a style that could have worked equally well on a used-car lot.

Our clients wanted to understand what they were buying. They didn't care about RAM or CONFIG.SYS settings. So I started writing memos about how the computers and the software they were buying would solve their business problems.

I moved my writing online in the mid-1990s and eventually to my own blog, Feld Thoughts. I had become an angel investor using some of the money I'd made from the sale of Feld Technologies, and those experiences provided plenty of blog fodder. My partner Jason Mendelson and I even churned out a series on venture capital financing. This was during a time when venture funding was in the dumps, and the process was opaque. In about 30 posts, we demystified it. Finally, after almost 20 years of writing, the light bulb went on for me.

I write to think.

Forcing myself to sit down and work through these ideas in a logical sequence for an audience of readers required me to refine my thinking on how I invest in startups. How could I make the financing process more efficient? What's the best way to structure a deal? I learned a lot, both from my writing and my readers' responses.

As a result, my approach to VC deals changed after those posts. I simplified my deal terms. I stopped negotiating over nonsense. I had no patience for long arguments over things that didn't matter.

My thoughts really began to crystallize when I started writing books. In 2010, I co-wrote Do More Faster: Techstars Lessons to Accelerate Your Startup, with Techstars CEO and co-founder David Cohen. During this process, David and I nailed down many of the startup strategies that had been rolling around in our heads. I don't think it's a coincidence that Techstars's growth accelerated, as did the growth of the companies we worked with, after publishing that book.

This is not to say that everyone should write books. But some form of regular writing is one of the best ways to give yourself time for reflection and analysis. It could be any kind of writing. Consider Jeff Bezos's approach to meetings. Whoever runs the meeting writes a memo no longer than six pages about the issue at hand. Then, for the first 15 to 30 minutes of the meeting, the group reads it. The rest of the meeting is spent discussing it. No PowerPoint allowed. Brilliant. (I've long felt that PowerPoint is a terrible substitute for critical thinking.)

As helpful as I find writing daily to be, it doesn't always come easily. I often go through long, dry stretches where my writing is uninspired. I stare at the screen, pecking out a few words hesitantly. This used to frustrate me, but now I realize it's just part of the process. Part of the trick is figuring out your most productive writing conditions; for me, it's early in the morning or late at night, preferably with Pink Floyd, electronic music, or classical piano blaring.

Many people might find a blank screen with its blinking cursor terrifying. Where do I even begin? you might ask. These days, I much prefer staring at that screen to standing up in front of a crowd. I think better, and I learn much more.

Brad Feld is an entrepreneur and the managing director of VC firm Foundry Group in Boulder, Colorado. He co-authored, with Mahendra Ramsinghani, Startup Boards: Getting the Most Out of Your Board of Directors.

5 Things Super Lucky People Do

March 17, 2014 - 11:00am

Do you feel lucky? Here's a clear-cut approach for improving your luck today.

"The Luck of the Irish" is an American phrase that comes from the days of the gold rush in the 1800s. Intolerant Americans figured the Irish people weren't smart enough to find gold, and blamed their success on being lucky rather than skilled. In reality, America's early immigrants have time and again proven themselves to be hardworking and smart enough to generate their own good fortune consistently.

So often I have witnessed people excuse their own inadequacies by crediting the success of others to luck. Salespeople I know disparage their more successful competitors as lucky. If those salespeople would make as many calls or work as many hours as their competitors, they would realize that their probability of closing is fairly equal. The competitors are simply swinging the bat more often.

The truth is that seemingly lucky people are opportunists. They do the things that allow them to take advantage of the world around them. For them, it's not about being in the way of good luck or bad. It's the actions they take to get what Jim Collins refers to as a high return on luck whichever way the pendulum swings. Follow these five tips and you can be as lucky as anyone, no four-leaf clover or rabbit's foot required.

1. Play to your strengths. So much time and energy is wasted trying to do things you probably don't do very well. Author and Inc. columnist Lewis Schiff learned from his survey of incredibly wealthy people that they got that way by focusing only on what they do best. Everything else you can delegate, or you could find a partner to compensate for your weaknesses. That way, you will shine where you excel and attract opportunity. Good things come to those who emanate success.

2. Prepare in advance. Unlucky people often get that way because they're reactive and unprepared for whatever comes. People who have stored food and water in their basements aren't lucky to find themselves prepared when disaster strikes, they used forethought to make sure they had what they might need just in case. I personally scoff at this horrible recent trend of disparaging business plans because things change constantly. The point of a business plan isn't to follow it no matter what, it's to establish a structure for smart decision making that allows you to succeed no matter what the future might bring.

3. Start early. Some people seem to have more hours in the day. I myself don't need more than six hours of sleep and am constantly finding ways to be more efficient. I use that extra time to start my projects well in advance. My rewards aren't dependent upon the time of day that I take action. (This column is being written at 3 a.m.) But it does matter that I'm beginning to explore projects I expect to complete months or years from now. So many people only want to put their energy into things that provide immediate gratification. The most fortunate people I know are the ones who planted seeds early and now reap that harvest of happiness.

4. Connect with as many people as possible. The key to success is access to opportunity. Access comes from influence. If you're influential, people will come and bring opportunities to you. The bigger your following, the more powerful your influence. The only way to build a big following is to provide value to many people. You have to provide the sort of value that will cause people to spread your thoughts far and wide, attributing credit to you when they do. Are you creating that kind of value? If not, figure how you can.

5. Follow up. Opportunities often come and go because people don't respond in a timely manner. I'm always amazed when people ask me for something and I respond only to never hear from them again. Three months ago, a young woman asked me if I hire interns or assistants. I replied immediately saying I'm always willing to consider hiring people who bring value to my work. I asked her how she thought she could enhance what I could do. I never heard from her again. Perhaps she now considers herself unlucky that opportunity doesn't come her way. I believe that following up is often more powerful and impressive than the act of initiating.

May you be so lucky to have people in your life that follow up.

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In the U.S., the Commercial Drone Industry Can't Get Off the Ground

March 17, 2014 - 10:54am

Other countries have been using small unmanned aircraft to make deliveries and spray crops for years, but the U.S. is still debating safety regulations.

The commercial drone market appears ready to take off, but the benefits may not be seen in the U.S. anytime soon.

According to Fairfax, Virginia-based aerospace-research company Teal Group, worldwide sales of military and civilian drones will reach an estimated $89 billion over the next decade, the Associated Press reports.

FAA officials say Congress-approved rules need to be in place to mitigate the safety challenges of unmanned aircraft sharing the same skies as manned aircraft, according to the AP. The bad news for businesses ready to implement the technology is that the agency is still years away from issuing final rules for "small drones"--defined as those weighing 55 pounds or less.

But the rest of the world isn't waiting for the U.S. According to the AP, Japan's Yamaha Motor Company has been using drones to spray crops for the past 20 years; Germany's DHL is testing its "Paketkopter," a drone for delivering urgent packages; Australia implemented the flying technology to capture cricket matches last year; and the United Arab Emirates is working on a project to use drones to deliver driver's licenses and other government permits.

U.S. companies that want in on the action are looking abroad for opportunities. Facebook is currently in talks to buy Moriarty, New Mexico-based Titan Aerospace, a manufacturer of solar-powered drone-like satellites, for a project aimed at providing Internet access to the unconnected corners of the world.

Andreas Raptopoulous, CEO of California-based drone company Matternet, told the AP that impoverished countries will start using drones sooner than the U.S. Raptopoulous says his company sees a market for drones to deliver critical goods, food, and medicine to the 1 billion people around the world who don't have access to developed roads. Matternet will start selling its drones and landing pads to governments and aid organizations later this year, the AP reports.

Paul McDuffee, the vice president of Bingen, Washington-based Boeing subsidiary and drone-maker Insitu, told the AP that businesses in the U.S. cannot afford to be the last country to reap the benefits of the drone economy.

"We don't have the luxury of waiting another 20 years," McDuffee says. "This industry is exploding. It's getting to the point where it may end up happening with or without the FAA's blessing."

GitHub Employee's Allegations Highlight the Importance of a Healthy Work Environment

March 17, 2014 - 10:30am

News of a female engineer's departure from the startup shows how vital it is for human-resources departments to implement a safe and open workplace for employees.

The news of Julie Ann Horvath's departure from software-development network GitHub sheds light on two very important topics in the technology and startup world. First, the struggles that women still face in the workplace, and second, how important it is that companies--no matter how small--have well-established human resources department protocols.

Horvath, formerly an engineer at the company, took to Twitter on Friday to allege that during her two years there, she was a victim of gender-based harassment. Here are a few of her tweets:

I'm incredibly happy to moving on to join a more healthy work environment, with a team who doesn't tolerate harassment of their peers.

--Julie Ann Horvath (@nrrrdcore), March 14, 2014

I've been harassed by 'leadership' at GitHub for two years. And I am the first developer to quit.

--Julie Ann Horvath (@nrrrdcore), March 14, 2014

Tech companies need to think less about 'being on good behavior' publicly and more about providing healthy work environments for workers.

--Julie Ann Horvath (@nrrrdcore) March 14, 2014

In an interview with TechCrunch, Horvath outlined the problems she had with GitHub's culture, negative interactions with her fellow employees, and in particular her experience with one of the company's founders. Additionally, she shared an inappropriate interaction with the wife of that cofounder. She implied in the interview that the company's HR department did not help her situation.

Chris Wanstrath, GitHub's CEO and cofounder, wrote a statement on the company's blog on Sunday in response to the news surrounding Horvath's departure:

This weekend, GitHub employee Julie Horvath spoke publicly about negative experiences she had at GitHub that contributed to her resignation. I am deeply saddened by these developments and want to comment on what GitHub is doing to address them.

We know we have to take action and have begun a full investigation. While that’s ongoing, and effective immediately, the relevant founder has been put on leave, as has the referenced GitHub engineer. The founder’s wife discussed in the media reports has never had hiring or firing power at GitHub and will no longer be permitted in the office.

GitHub has grown incredibly fast over the past two years, bringing a new set of challenges. Nearly a year ago we began a search for an experienced HR Lead and that person came on board in January 2014. We still have work to do. We know that. However, making sure GitHub employees are getting the right feedback and have a safe way to voice their concerns is a primary focus of the company.

The openness of Wanstrath's statement was surprising. It is rare to find a CEO who in the midst of a scandal would make a statement that not only makes direct reference to some of the employees involved, but also that could be taken as an admission of wrongdoing.

This, however, is not the only time that GitHub has been ensnared in controversy. It has previously been reported that programmers have added racial, sexist, and homophobic slurs into code. The company, however, has made adamant statements about working to change that culture, Re/code reported.

These events should remind you of the importance of creating a healthy, safe environment for your employees. Company culture isn't something that should be taken lightly, and thus it is crucial that companies have strong HR policies in place in the event that problems do arise. Indeed, Horvath stressed the importance of this.

To companies looking to not make the same mistakes, make both hiring an HR lead and diversifying your team early-on high priorities.

--Julie Ann Horvath (@nrrrdcore) March 15, 2014

The Annual Pay Raise Is Dead. Here's Why I'm Not Mourning

March 17, 2014 - 10:30am

Let's say good riddance to the annual pay bump. Raises and bonuses shouldn't be just a means to placate employees.

Pay is a crucial part of every company's employee motivation and retention. And the reality is, how we structure compensation is as important as how much we pay--if not more so.

Here are some basic principles I have learned along the way that have helped me garner the maximum amount of staff engagement, while also managing employee expectations in a clear manner.

Wages must be based only on productivity.

Every position at every company has a specific value. This value is composed of what the position does for a company in and of itself (regardless of who occupies the position) and also what the person hired for that job brings to it. Seniority, cost of living, or social constraints should never be a part of the equation. Output is what matters.

Before I hire, I determine what each position is worth in terms of its importance to the success of my company. Setting this guideline helps to insure that all compensation is fair. Tying changes in compensation to contributions above and beyond the job description then becomes easy--both for employees to accept and for management to enact.

Commission guarantees investment.

Every member of my staff has a commission component to her salary. For account executives, the commission is simple and comes directly from the sales made. For other positions, this "commission" can relate to a bonus paid on the number of orders shipped, a quarterly distribution tied to the company's overall growth, or even a rolling reward based on positive feedback or perfect rates of task completion.

Choosing to base a portion of an employee's salary on performance is paramount to getting employees invested in the company's mission. Including a commission component in compensation also gives the company a cushion to help mitigate missed financial objectives or goals, whereas a straight salary system does not.

Long-term rewards alone don't work.

Employees need to be able to feel on a continual basis that their efforts are being noticed and appreciated. A single year-end bonus is a carrot dangled so far in the distance that it creates little attraction--even for top-flight employees--to remain engaged.

I have found that a mix of both long-term and short-term rewards motivates employees to stretch beyond a comfort zone, but also to understand the real value of their contributions on every paycheck. If an employee has the ability to self-monitor her progress on a continual rather than a punctual basis, on-target performance is evident, and shortcomings become clear early on as well.

Short- and long-term benchmarks also mitigate the risk for misunderstandings, because there's no longer a surprise (good or bad) when it comes time for reviews, but a traceable performance history instead.

Compensation changes should be possible at any time.

All employees need to feel valued. As a business owner, it's imperative that I be aware of the efforts of my staff, so that I can reward them as soon as there's reason to do so.

Waiting for an annual review, or until an employee asks for additional compensation, is not only frustrating and de-motivating for the employee but also dangerous for the employer, because it gives the employee time to think that her contributions are going unnoticed or that she might be better treated elsewhere.

The time to change compensation is immediately after an employee does something great--not months later because the calendar says that's the time. Building in both the mechanism to monitor employee contributions and the financial possibility to compensate them when appropriate is integral to employee retention.

Compensation is not only the greatest motivator, but also the most appropriate measure in the relationship between an employer and an employee. Setting compensation correctly should never be about placating, but rather about establishing a balance between output and earnings.

The Completely Nonstrategic Networking Strategy That Works Every Time

March 17, 2014 - 10:00am

Strategy is powerful, but not as powerful as generosity. Call it the altruist's advantage.

Last year, despite the gloom of a continuing U.S. economic crisis, ongoing political crises, and hideous weather events, was my best business year ever. A number of friends and colleagues said the same. We were all mildly amazed, deeply relieved--and puzzled. Being analytical, strategic types, we fell to discussing why.

What had we done that had worked? Could we do more of it?

We could identify nothing we'd done that had changed: There was no particular sector, no commonality across customers. But when we started to analyze the routes by which new business had come to us, one thing stuck out: Referrals and recommendations had all come via fairly junior contacts.

The Altrust's Advantage

This struck a chord with me, because I know, looking back across my career, that all my best opportunities came to me this way. Had I been a focused, strategic networker, this might never have happened. But I've always taken the position that I'll help anyone I can, without question, without regard for whether the person could ever help me in return. I start from the premise that everyone has talent, promise, and potential. And I've rarely been disappointed.

My colleague, it turned out, had done the same thing. "I think I treat everyone as important and serious," she said. "I don't calibrate. I just help if I can."

Adam Grant's dazzling book Give and Take bears this out. Givers, he argues convincingly, do better than takers. That doesn't mean they're blind, insane altruists. They have a weather-eye on takers and won't be endlessly taken. But their default position is to give wherever they can.

Give and Take was my favorite business book last year, not least because it stood out as a healthy antidote to the kill-to-get-ahead books. In a business climate increasingly driven by extreme competitiveness, Grant argued that generosity is more effective, more creative, and more sustainable than dog-eat-dog behaviors. Calculating your way to the top doesn't work--in part because nobody can see far enough ahead but also because such calculation shows and doesn't attract givers, followers, or supporters.

Neither my colleague nor I had been generous to young, rising executives because this was the strategic thing to do. We work as we do because that's who we are. But it was encouraging to see how powerful it can be to give in to your inner generosity.

Why You Need to Improve Your Interview Process

March 17, 2014 - 10:00am

If you want candidates to feel passionate about your brand, the interview should be an exciting, positive experience.

4 Things You Need to Know Today

March 17, 2014 - 9:50am

Today's business news, curated by the Inc. editorial team to help you and your venture succeed.

1. Satoshi Spectacle

Dorian Satoshi Nakamoto, the man identified by Newsweek as the creator of Bitcoin, has issued a formal statement denying any involvement with the crypto-currency, saying "I have no knowledge of nor have I ever worked on cryptography, peer-to-peer systems, or alternative currencies."--TechCrunch

2. Moral Imperatives

Silicon Valley VC Marc Andreessen took to Twitter over the weekend to address a problem he sees brewing in the startup community--the development of social sites that encourage anonymous voyeurism and negative behavior. "I think as designers, investors, commentators, we need to seriously ask ourselves whether some of these systems are legitimate and worthy…from an ethical and moral point of view."--Re/Code

3. EU Sanctions

The European Union will freeze the assets of and impose travel bans on 21 officials from Russia and Ukraine--a response to Crimea's declaration of independence and application to join Russia following a referendum vote there this weekend. --Reuters

4. Bracket Buzz

With Selection Sunday over, the NCAA Tournament bracket is now set--and patiently awaiting your employees' attention this week. Let the March Madness distractions commence!--ESPN

Great Bosses Aren't Bossy

March 17, 2014 - 9:30am

Facebook COO Sheryl Sandberg wants to ban the word 'bossy' in the workplace. It's a good first step--but the real problem isn't the word.

As you may already know, Facebook COO Sheryl Sandberg is trying to ban the word bossy and "other b words in the workplace."

Though there's no doubt that women in management are held to different standards than men, the problem isn't in the words people use to describe a boss's behavior. The problem is the behaviors that such words describe.

Yes, when male managers are overbearing and obnoxious, people use other words to describe them, words that may not carry the exact same sting. (I'd argue that the usually-applied-only-to-males term assh*le is worse than the b words.)

But regardless of what gender-specific words employees might use to describe a boss's behavior, as a general rule, bosses only get called nasty names when they give arbitrary orders, throw tantrums, backstab their employees, fail to listen, and so forth.

By contrast, great bosses listen to their employees, explain their decisions, keep their tempers, and coach their employees to become more successful.

Employees love great bosses and will move mountains to make them happy. Employees don't call a great boss nasty names; they follow wherever that boss leads them.

Therefore, if employees are using insulting words to describe you, you should be worrying about your behavior rather than the words themselves.

Preorder my new book and get an exclusive bonus chapter plus a signed bookplate. (Note: Once the book's published, both will be unavailable forever.)

America's Coolest College Startups 2014

March 17, 2014 - 9:00am

For the sixth year running, Inc. spotlights the nation's top startups taking campuses by storm.

Not long ago, people would call college "kids" who started businesses quaint. Now they call them the boss.

Helped in part by low-cost technologies and an increased prevalence of entrepreneurship training at the university level, college students--and indeed those even younger--are making solid strides at founding companies. And they're not just launching local pizza shops and fashion boutiques. They’re starting up businesses that could scale into much bigger companies and may already cater to a national audience.

Here, we give you proof: Inc.’s 2014 top college startups. Picked from a list of nearly 100 college startups across the country, these 16 companies are the cream of the college entrepreneurship crop. Their ideas span a variety of industries, from mobile applications to subscription boxes and cosmetic-product makers.

Their founders may be young, but the companies are already making significant strides--from earning revenue and seed funding from the likes of Y Combinator and Mark Cuban to cultivating celebrity clients. Additionally, these 16 winners were chosen on the basis of factors including originality, pitch (which we left mostly intact below), and growth potential.

In alphabetical order, here is Inc.'s 2014 list of the 16 coolest college startups:

1. Applits

The Pitch: "Applits is working to increase the accessibility of the complex mobile application industry to everyday people with brilliant app ideas, in the form of a monthly app idea competition. Each month, people from around the world submit their app ideas to Applits during our submission phase. During the last week of the month, we hold public Voting Week. This is when the entire community comes together to vote on their favorite ideas that were submitted that month, and tell us what app they want us to create next. A single winning app idea is identified, and the submitter of that winning idea is awarded 15 percent of the profits that the app brings in after we develop and release it (free of charge, of course, for the submitter)."

Traction: Applits has successfully launched nine mobile apps resulting from the platform, and has 11 more under development. Its new website will allow Applits members to give feedback and ideas in all stages of app creation, including feature refinement, naming, icon design, and more--virtually every decision along the way.

2. AthleteTrax

The Pitch: "AthleteTrax aims to make scheduling, communicating, and fundraising a cinch for team sports. The cloud-based tool is initially targeting the large and growing collegiate club and high school competitive market. We have more than 100 teams and more than 2,000 users, representing more than 30 schools and 16 sports on our platform. We are now focused on rapidly expanding our base of teams.

"Our business model is freemium with a focus on two transactional revenue sources: purchasing of team goods and services through national partnerships and collecting dues payments or other expenses via credit card with a small service fee. The team consists of former high school, collegiate, and professional athletes, creating the perfect combination to lead this sports technology company."

Traction: AthleteTrax, which declines to disclose revenue, came in second place out of 144 teams in George Washington University's business plan competition. The company won $21,000, and went on to raise $185,000 from angel investors and an accelerator, AlphaLab, to build out the product and acquire its first paying customers. It is raising a seed round of $500,000, with $100,000 committed primarily for sales and marketing to help the company achieve its next milestone of serving 1,900 teams in the seven million U.S. team-management market by the end of 2014.

3. Beatmerch

The Pitch: "We synchronize the merchandise needs of internationally touring electronic music artists and events. We provide a full-circle merchandise solution, including tour and festival merchandise stores, e-commerce solutions, licensing, and promotional product distribution."

Traction: Beatmerch, which has grown over the past nine months to be one of the largest merchandising companies in the electronic music space, represents renowned DJs including Hardwell, Nicky Romero, Paul van Dyk, DJ Snake, Don Diablo, and DOCO. The company earned $126,000 in sales last year.

4. Cavebox

The Pitch: "We serve men ages 18 to 30 with a convenient and cost-effective hygiene solution. Men, or women shopping for men (think parents), come to TheCavebox.com and customize a one- to two-month supply of hygiene for as little as $25."

Traction: In the first week, Cavebox sold five Caveboxes and obtained more than 50 signups for its spring-break Cavebag (travel-size hygiene essentials for the man on the go). The company anticipates sales of $10,000 in its first year.

Additionally, the idea for Cavebox will be featured as a case study in Spine Sweat, a nationally recognized entrepreneurship course at Indiana University. Spine Sweat aims to put ambitious student entrepreneurs in front of investors for seed and angel financing opportunities.

5. FiscalNote

The Pitch: "FiscalNote's mission is to unlock government data and make it useful. Whether legislation, regulations, or court cases, all this information is in the form of unstructured data and we aim to clean it up. We aggregate government data across all 50 states, D.C., and Congress. We run advanced machine learning and natural language processing algorithms to find useful trends relating to the government data and present it to our clients through beautiful visualizations.

"Additionally, using our proprietary machine learning and algorithms as well as advanced statistical analysis on all past legislative data, we are able to predict whether new bills will pass into law after they are proposed with roughly 90 percent accuracy."

Traction: In 2014, FiscalNote, which declines to disclose annual revenue, raised a seed round of $1.2 million from Mark Cuban, New Enterprise Associates, First Round Capital Dorm Room Fund, and Yahoo co-founder Jerry Yang's AME Cloud Ventures. Advisers include Y.S. Chi, chairman of Elsevier; John Suh, CEO of LegalZoom; Sheel Tyle, NEA associate; and Alec Ross, the former senior adviser for innovation to former Secretary of State Hillary Clinton.

6. Golden Gear

The Pitch: "When I was 11 years old, I threw my first jab, cross, hook combo and instantly fell in love with combat sports. But constant injury kept me out of the game. In 2009, working with world-renowned fighters and trainers and consulting with an orthopedic hand surgeon, we developed a full range of protective combat equipment that is now used by hundreds of pro fighters and several world champion fighters.

"Even fighters who have paid sponsorships by other leading brands still choose to use our gear over their paid sponsors', because they love our products. One glove at a time, we will help fighters train safer, smarter, and better! By 2020, we will be the leader in the combat sports industry by helping fighters train safely and maximize their performance."

Traction: The company, which touts world-renowned ultimate fighters as customers, has more than doubled its sales, to $110,000, in the past year. It has outfitted Ultimate Fighting Championship fighter Ryan LaFlare, among others.

7. Keen Home

The Pitch: "Keen Home builds proactive hardware devices that aim to enhance the core functions of the home, so your home can start to take care of you. For our first product, we are focusing on a home's heating and cooling system.

"The average U.S. household spends 50 percent of its energy bill on heating or cooling, or about $2,000 per year. This same household has an average of two to four rooms that are overheated or overcooled at various times throughout the day. To solve this problem, we have developed the Keen Home Smart Vent.

"The Smart Vent is a wirelessly networked air vent that intelligently opens and closes to redirect airflow throughout the home. This not only increases comfort on a room-by-room level, but also reduces the run time of heating and cooling systems by up to 30 percent, resulting in a potential payback period of one year."

Traction: Keen Home is pre-revenue, as it's still in the design and early manufacturing stages. But the Techstars accelerator member plans to begin overseas production this summer, with product ready to ship and be on store shelves in September or October. Keen received a $15,000 grant from New York University to test its Smart Vent in a few of the student residences this spring. Keen also ran a successful crowdfunding campaign on Indiegogo, where it surpassed its funding goal of $40,000. The company has recently signed distribution agreements with giant companies such as Lowe's, ADT, and SmartThings.

8. Notefuly

The Pitch: "The three-man team behind the TapFactory set out to create a mobile application experience that would be as fun and easy to use as the paper sticky note. Enter Notefuly, a mobile application and cloud service that bridges the gap between the traditional, physical sticky note and the digital world."

Traction: Notefuly (formerly Sticky Notes) has been downloaded more than four million times, and has generated more than $450,000 in sales. It also just took home the top prize at this year's SXSW startup competition.

9. ProfilePasser

The Pitch: "As a collegiate athlete, I (founder Samantha Weber) know firsthand how much sports can help prepare a person for a successful career. Student-athletes learn about hard work, time management, and leadership all from playing a game they love. Unfortunately, the college athletic recruiting process is broken, and thousands of talented athletes are being completely overlooked by college coaches.

"ProfilePasser hopes to solve this problem with its athletic recruiting app that connects high school athletes and college coaches on the field. Last semester, ProfilePasser was one of nine startups accepted into Pittsburgh's leading accelerator, AlphaLab, and I completed the program while taking a full academic schedule and playing my final varsity soccer season."

Traction: Though still pre-revenue, ProfilePasser has raised more than $25,000 and is in the process of raising a seed round of funding. The company launched its app in September and now has more than 600 users. In addition, ProfilePasser has a partnership with the Club Champions League in Maryland and Virginia. In February 2014, the first soccer player was recruited after using the app at a showcase tournament. Finally, ProfilePasser has a star group of advisers, including Weber's sister, Alexa Andrzejewski, who is the founder and CEO of Foodspotting, which sold to OpenTable for $10 million last year.

10. Pufferfish Software

The Pitch: "Our apps are designed to bring the conveniences and advantages of iPads and personal technology to the lives of those on the autism spectrum. They assist in applied behavior analysis therapy and teach autistic children in a measurable, replicable way. The goal is to aid their growth and relation with the outside world, modeling traditional ABA therapy techniques with the design and quality of modern-day apps and software.

"We believe in creating software that gives individuals with autism spectrum disorder and their caregivers the most fulfilling experience with the outside world using mobile technology and software. Additionally, we sponsor iPad giveaways and scholarships for autistic children, as well as provide information on how to acquire an iPad to parents of autistic children.

"The founder started Pufferfish when she was just 15 years old by hiring a contractor on the Internet; they worked together to produce the apps out on the App Store. She now goes to OSU, but the team is still working together on oDesk.com every day to bring these apps to reality. Our mission is to remain a small, virtual company that can interact with anyone around the world, as we have been doing since Day One."

Traction: Pufferfish reports just $8,000 in annual revenue, but the apps have received renown. The company received support from organizations such as the Autism Society of Ohio, Apps for Children With Special Needs, and GRASP.org, a national partnership for Asperger's.

11. Revita Ink

The Pitch: "Revita Ink is a unique skin care line designed specifically to help prevent fading and loss of color in tattoos and permanent makeup. We are first movers in the anti-aging/beauty market for tattoos. All products are approved by a board-certified and award-winning dermatologist in Los Angeles. We are partnered with a tattoo modeling agency to boost traffic and have daily sales across the U.S. and around the world--most notably in London, New Zealand, Australia, Italy, Japan, Canada, and the Philippines. Remember to revitalize your ink with Revita Ink!"

Traction: The five-person company rang up just $10,000 in its first year of business. But of those customers, the company reports a 20 percent repurchase rate. Plus, Major League Baseball players and recent world champions Jonny Gomes and Mike Napoli of the Boston Red Sox are fans.

12. Scholly

The Pitch: "College is expensive, forcing students to take out thousands of dollars in student loans in order to foot the bill. As a result, many students are drowning in student debt. This has made many students and parents turn to scholarships and grants to pay for college education. The only problem with these scholarships, however, is that they are notoriously hard to find. Students are either forced to scour the Web or use websites that give them a list of thousands of scholarships they may not even qualify for.

"Created by students, including Christopher Gray, who won $1.3 million in scholarships, Scholly is a mobile app for iPhone and Android devices that gives students a fast and simple way to find scholarships for college. Scholly uses eight specific parameters--such as state, race, GPA, or major--to instantly filter listings into a comprehensive directory of scholarships for which the prospective applicant is eligible. Users can quickly sift through the tailored results, save a list of scholarships, and export it to themselves via email in order to apply online."

Traction: In addition to the app, which has netted the company $50,000 in annual revenue, the company allows schools and businesses to bulk purchase Scholly for students. Recently, Drexel University made a bulk purchase for its students.

13. Strados

The Pitch: "Strados is an app that helps people understand what their car is saying. Using the Translator, a Bluetooth-enabled, low-energy device that plugs into a car’s diagnostics port, Strados translates a car’s data into emotions, colors, and text to describe its health and how it is doing. If something goes wrong, Strados analyzes the issue and comes up with solutions along with cost estimates and severity ratings to make sure a driver is armed with the proper knowledge when getting the car fixed.

"Over time, Strados learns more about your car and preemptively warns the driver before systems are about to fail on a car. Because it works with any car made after 1996, Strados is helping bring the connected car platform to a wider audience in a very friendly, relatable, and human way."

Traction: Strados is brand new, but it plans to release its limited beta app onto Google Play at the end of the month. It plans to ship beta versions of the product in late March or early April. And it's already in the process of developing a second version of its hardware (the Translator LE). On the first day of the Chicago Auto Show, however, the company says it broke even on preorder sales and signups.

14. Suneris

The Pitch: "Suneris prides itself in utilizing scientific ingenuity to solve complex problems with hopes to better society. Using the body's natural hemostatic mechanisms (the process through which bleeding stops), Suneris is able to mimick the extracellular matrix to initiate the cascading effects that go along with hemostasis.

"The product, called Veti-Gel, is a plant-based polymer gel applying the techniques listed above to initiate hemostasis more rapidly than the products of competitors. Hemostatic agents found in today’s market take up to five minutes to stop bleeding. Veti-Gel accomplishes this in just a few seconds.

"The company looks to market Veti-Gel to veterinarians starting in the summer of 2014. Leading up to the summer, Suneris is attending veterinary conferences while also finalizing further research to assist in the U.S. Food and Drug Administration's approval process. Suneris plans to enter the military market beginning in 2015, and hopes to one day have its Veti-Gel product on the belt of every soldier."

Traction: Suneris has opened a manufacturing lab in Brooklyn, New York, and is now looking to start commercializing its Veti-Gel product.

15. Try the World

The Pitch: "Try the World sources the best gourmet products from around the globe. Members subscribe and receive a box from a different country every two months at home. The global journey starts with the essence of enchanting Paris, lures you through the silhouettes of pagodas, and captivates you with Rio’s samba beats--all through mouthwatering gourmet products matched with local music, film, and culture tips.

"With many an undiscovered location waiting within your mailbox, there’s no telling where you might find yourself next. When money and time don’t permit travel, Try the World brings travel to your doorstep. Boxes cost $45, with free shipping and the option to cancel anytime."

Traction: The company anticipates reeling in $400,000 in revenue in its first year of operations--without spending a dime on marketing. It's also in the process of raising a seed-financing round.

16. Wink Natural Cosmetics

The Pitch: "Wink is dedicated to solving women's toughest beauty problems with real science and natural ingredients. By working with your natural lash and brow growth cycle to stimulate growth in dormant follicles, Wink aims to help strengthen the lashes and brows you already have.

"In testing trials, Wink was shown to increase eyelash fullness by up to 20 percent (60 lashes) in 100 percent of participants. Additionally, eyelashes increased up to 20 percent in length, owing to Wink’s conditioning effects. Wink was also shown to regrow eyebrows in patches where brows had previously stopped growing because of overplucking. Wink is hypoallergenic, minimally processed, and free of parabens, prostaglandins, hormones, phthalates, sulfates, GMOs, synthetic fragrances, and synthetic dyes."

Traction: After ringing up $80,000 in its first seven months of business, Wink expects to launch its second product (a brightening and anti-aging cream) this fall. The company was also featured in the December 2013 edition of Glossybox and GlossyMag.

-Special thanks to the following entrepreneurship groups: The College Entrepreneurs' Organization, Empact, and the Young Entrepreneur Council.

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