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Better Collaboration in 3 Steps

February 27, 2013 - 10:45am

Engineers use the Agile method to build software more efficiently. You can use it to run your company more efficiently.

Want to increase collaboration across your team and your company? Wish you could get your employees talking to each other and sharing ideas? Try borrowing a strategy from the world of software development.

Executives used to meet with techies to lay out requirements and await a finished product months or sometimes years later. Now more and more engineers build software using the Agile methodology, in which new versions are released every two weeks, with new features and fixes added each time. Executives meet with developers at each release. Agile turns out to be a pretty good way to run a company, too.

When Robert Holler, CEO of VersionOne, which provides software for Agile project management, decided to apply that same philosophy to his entire business, he found it was an effective way to get everyone working together and innovating more quickly.

The Agile manifesto prefers "individuals and interactions over processes and tools" and "responding to change over following a plan." And while VersionOne started out using Agile to create its products, "As we've set up the company and grown to 100 folks, we use it all the way through our infrastructure," Holler says.

The foundation of the Agile method is regular team meetings and daily check-ins, and that makes all the difference at VersionOne, Holler says. Here's how it works:

1. Create regular "touch points."

The key to agility is "well-defined, disciplined touch points" among team members, Holler says. "If you have a rhythm set up where individuals communicate daily, teams weekly or every two weeks, and the company monthly, just that simple rhythm creates a team of teams."

So at VersionOne, small teams, such as the four-person marketing department meet at the start of each day. Larger, cross-functional teams meet every time a new software "iteration" is released, which is to say every two weeks. "In that iteration review, team members associated with the product identify issues and opportunities," Holler says. After that, the entire product team gets together to discuss whether they are making progress toward company goals and whether they're on schedule.

Then, once a month, the entire company comes together for an update on performance and goals. And the executive team meets every quarter to set goals for the coming quarter.

With all those reviews, "We're forced to sync up," Holler says. "That rhythm makes us highly efficient."

2. Keep meetings short.

One reason for that efficiency is that each of these meetings has a clear agenda and a strict time limit. "They range from 5 minutes to 40 minutes and rarely do we go over that," Holler says. The daily team meetings, for instance, last only 10 to 15 minutes, and are called "stand-ups" because they're conducted while standing. The monthly business presentations total only an hour, though there's also time for lunch and a fun activity such as pool.

3. Eliminate unneeded communications.

It may sound like this quantity of meetings would take up a lot of time, but Holler says it actually saves time by eliminating unneeded communications. No need to write an email telling your teammates about a new customer when you know you'll have the chance to tell them face to face tomorrow morning. And there's little need to schedule meetings with colleagues when you know you'll be attending a meeting together anyhow within the next week or month. "Communication just flows through our organization," Holler says. Instead of saying "I'm working on this task," people say, "I'm working on this task which supports this initiative with the help of this other department in pursuit of this goal."

4. Be ready to change course quickly.

An Agile operation can respond to changing market conditions and opportunities much faster. That's what happened recently when a new visual display showing the interdependencies of elements in a project turned out to be an unexpectedly popular feature of VersionOne's product. "We weren't sure what the acceptance would be," Holler says. But when downloads rose dramatically, the company made a quick decision to highlight the new feature in its online product demonstrations.

"We didn't have that in our marketing plan," Holler says. But because the company was meeting regularly with communication flowing in all directions, everyone at VersionOne knew about the new feature's success. "We got together, understood the priority and value of this feature, so we raised those items above others in the queue and other things fell off the table. It happened without a lot of muss and fuss."

Without Agile, the company could never have changed directions so quicky, he adds. "We'd have had a change control board and they would never have understood."

4 Things That Make a Career Worth It

February 27, 2013 - 10:32am

When you look back over your career, how will you know if you chose the right path--and if it was all worth it?

Some people get up in the morning, get dressed, go to work, clock in, do their job, clock out, and go home to their family. That's the path they choose. Not so for entrepreneurs, business owners, and those who climb to the top of the corporate ladder. For better or worse, they choose a different path.

There will come a day when you'll look back and wonder if you chose the right path--if that insane rollercoaster ride you used to call work was worth it. Here's a peek at how that inevitable retrospective is going to turn out for you.

The other day I got an email from a small business CEO who got her start at a famous semiconductor company called Mostek. Mostek was one of those rare companies that spawned dozens of others. Its leaders went on to become venture capitalists, CEOs, and founders of other ventures.

Most notable of those was Mostek CEO L.J. Sevin who, after selling the company in 1979, cofounded Sevin Rosen Funds, a venture capital firm that helped to create Compaq Computer and backed dozens of successful companies including Electronic Arts, Citrix, Lotus Development, Cypress Semiconductor, Ciena, and a Dallas-based microprocessor company named Cyrix.

Cyrix slugged it out with Intel and AMD for years. I was a marketing vice president there. L.J. and another Mostek founder, Berry Cash, sat on the board until we sold the company to National Semiconductor in 1997. I stayed on for another two years before finally moving on. Without a doubt, the Cyrix experience was the high point of my career.

So, as I’m emailing back and forth with this former Mostek woman, telling each other off-color stories that I unfortunately can’t recant here, she wrote something that got me thinking. She said, “Wish I had been older in those days and really understood what was happening and how it was changing the world.”

Sure enough, when you’re young and living in an exciting time, it does seem like a rollercoaster. Everything’s a blur. So I got to thinking, when it’s all said and done and you can finally relax and look back on it, what about the experience mattered most? When you put your heart and soul into a career, what do you really get back out of it?

For me, it comes down to four things:

Making a difference. We talk a lot about employee engagement and what motivates people, but one thing I can tell you for sure: everyone at Cyrix, and I mean everyone, was there to make a difference. We got to do great things. To compete head on with one of the most powerful companies in history. And we did it with a fraction of Intel's resources. I don't care if pride is one of the seven deadly sins. I know we're all proud of what we accomplished.

The relationships. High-stakes, high-visibility competitive battles on a global scale really bring out the best--and the worst--in people. Besides just getting to know and learn from all those incredibly talented people, besides sharing the experience with them, the relationships are a gift that keeps on giving. We've been resources for each other in our subsequent careers and, fifteen years later, many of us stay in touch.

The ride itself. So, call me an adrenaline junky. For a time, I'd say that was true. But hey, I was young so, well, why not? And now it's great to have stories to tell. Stories with insightful lessons and stories that make people laugh out loud. It's all pretty great.

The journey of self-discovery. While I continued on as a senior executive for a number of years after that experience, I did so for practical reasons. I knew in my heart that that episode of my life was over. It felt good and right. It was time to find a new ride, perhaps a quieter, less harrowing one. As soon as it was feasible, that's exactly what I did.

If not for that experience, that wild ride, I'm pretty sure I never would have been able to close that door and open a new one. That's why I always tell people to take big risks and challenge themselves early in their careers. Later on, you can take a break--and tell all your stories.

Easy Secret to Making Better Decisions

February 27, 2013 - 10:30am

Handy rules of thumb can help you make even the most complex decisions more manageable. A former Bain consultant offers a great one.

Being a business owners means making tough decisions. Sometimes the stakes are high, sometimes the information is incomplete, and sometimes the environment is volatile—and sometimes all three—which means making the right choice for your company incredibly challenging and stressful.

Wouldn't be nice if there were simple tricks to take these complicated, insomnia-inducing decisions and boil them down to something more manageable?

That's just what former Bain & Company consultant Daniel Shapiro offered in a recent LinkedIn post. Drawing on his experience at Bain, Shapiro shares a handy trick that can help owners break down and tackle even the most complex issues. He writes:

If you’re faced with a choice of whether or not to do something, just ask yourself, “What would I need to believe for this to be the right decision?” This simple question is incredibly clarifying.

Here’s an example: I’m trying to decide whether or not to prioritize the development of a new product. In order for that to be a great idea, I would need to believe the following assertions:

  • We have the team capable of building the product
  • Customers will buy the product at an attractive price if we build it
  • We have the distribution to reach potential customers at a reasonable cost
  • None of our competitors can replicate this offering in the next 12 months
  • There are no higher priority development opportunities for the R&D team
  • The hardest part of the process is developing the list of assertions. If you’re having a hard time, grab a colleague – two brains are better than one. Once you have your list, begin analyzing each assertion with data. If you can’t get data to help determine whether or not an assertion is true or false, simply make an educated guess. If any of the assertions are false, it’s probably the wrong decision.

    By using this technique, Shapiro asserts, you are forced to break down a complicated situation into its constituent parts and also helps you construct enough structure that you can intelligently and productively discuss the issue with colleagues. Interested in more insights from Shapiro? You can follow him on LinkedIn.

    But Shapiro isn't the only devotee of simple rules of thumb—also known, more formally, as heuristics—as a means to help guide us through our toughest decisions. Colin Marshal has rounded up ten useful rules of thumb you can put into use in business and in life, including:

    "Can I fail at this?" It's like Raymond Chandler said: there is no success without the possibility of failure. Therefore, something I can't fail at is also something I can't succeed at. I can fail at conducting an interview, writing an essay or making a video. I can't fail at meandering around the internet in search of "neat stuff to read." In a recent tweet, I defined procrastination "the temporary displacement of tasks at which it is possible to fail with tasks at which it is not possible to fail." I suspect I'm less far off the mark than ever, especially regarding why procrastination is not a productive tendency.

    "What's the hardest thing I can do?" … my hat tips to Paul Graham: "This is a good plan for life in general. If you have two choices, choose the harder. If you're trying to decide whether to go out running or sit home and watch TV, go running. Probably the reason this trick works so well is that when you have two choices and one is harder, the only reason you're even considering the other is laziness. You know in the back of your mind what's the right thing to do, and this trick merely forces you to acknowledge it."

    Meanwhile, author and heuristics enthusiast Ben Casnocha has a wiki of literally hundreds.

    What business rule of thumb do you find most valuable?

    3 Ways to Improve Your Odds of a Sale

    February 27, 2013 - 10:30am

    The way that companies make purchasing decisions has changed. Here are three ways to keep selling even after your buyers have tightened the purse strings.

    There was a time not too long ago when buying authority used to be proportioned throughout an organization based upon that company's organizational chart. Managers were authorized to make small purchase decisions and vendor selections. Directors made slightly larger decisions, and so on up the hierarchy. All this changed when companies everywhere were hit with the zombie virus outbreak known as Procurement. (At least that's how I describe it.)

    The virus has many strains-;procurement, purchasing, reverse-auction, RFPs and so on. Unfortunately it has removed the authority of middle level managers to make any individual purchase decision or vendor selections.

    So, what do you do when you're trying to sell to one of these powerless middle managers? Whenever possible, avoid them as a point of initial contact. After all, they are zombies. If that doesn't work, try one of these strategies:

    1. Become efficient at handling lots of small transactions. Amazon is a great representation of this model. By becoming the most effective processor of many small orders, you will be able to grow through the sheer volume of purchases made by the lower level managers who are still able to make these decisions.

    2. Become an expert at the competitive bidding process. Whether you are dealing with RFPs or reverse auctions, companies who become great at completing forms and operating in tightly defined parameters are in a good position to make money.

    3. Learn how to solve big problems for big people. Getting the attention of true decision-makers in a post-zombie world is hard. It helps if you are able to become an expert in their industry and know everything about the marketplace and your competitors. By offering insights into their business problems you can then lay out how you will solve those problems.

    As I look at my bookshelf at all the books on selling, I see that most were written for the pre-zombie era. It was cutting edge stuff back in the day. Unfortunately, those tools were aimed at hitting as high as you can inside of a company's middle-tier of buyers. Now that the zombies have control of the middle, you will need to aim for different buyers. One of the tecniques above may be the solution.

    How to Flunk a Job Interview

    February 27, 2013 - 10:25am

    These common mistakes will ruin your chances of getting just about any job.

    Finding reliable, loyal, and competent employees is at the top of most entrepreneurs' minds. You deal with this as a start-up founder, and it continues to plague your management team through the mid-size stage and beyond.

    Our company has recently expanded significantly, opening up a number of critical positions. That's pressed us to spend most of our time recruiting--and to learn a lot about the common mistakes that job applicants make.

    Using a salary-driven approach to selecting your first job

    Opting for a salary-driven approach to the job search--especially when you have little or no experience behind your expectations--is probably not the best long-term strategy. Those once-in-a-lifetime opportunities to gain experience in a coveted field come when you're young and fresh, and the reality is that learning jobs don't pay that well. Being aware of this fact will help you gauge the opportunity better.

    As an entry-level candidate, you want to show your prospective employer that you value the experience--and the potential opportunity for growth--more than your initial paycheck.

    Using unlikely stories to justify past slip-ups

    I frequently find myself speaking with applicants that look great on paper and turn out to be quite different during the interview. If you have unexplained breaks in employment, don't use some crazy excuse in an attempt to make yourself look better. Instead of crafting a sad tale portraying you as the martyr, try using a good old-fashioned truth: "I made some mistakes in the past. Now I realize that I didn't have my priorities properly in mind, and I'm clear on where I'd like my journey to go." It sounds better.

    Confusing your employer with a misleading resume

    If you acted as director of marketing for your previous employer, but you still haven't graduated from college, don't omit the expected graduation date from your resume. Even if it might get you more interviews, it misleads your potential employer into believing you have more experience than you actually do. This will come clear during the interview, by which time you will have changed from being an interesting prospect to a potentially shady candidate.

    Employers are looking for candidates that are capable, reliable, and willing to go the extra mile. My advice: Check your ego at the door, and write a kickass cover letter about why you would be great for the job. Explain your capabilities, and why the company interests you. Recruiters and hiring managers are looking for the next hidden treasure. That could be you.

    Sandy Lerner: Investors Aren't Friends

    February 27, 2013 - 10:20am

    After getting pushed out of the business she loved, this Cisco co-founder learned a valuable lesson about working with VCs.

    In 1984, Sandy Lerner co-founded Cisco Systems with her now-ex-husband, Leonard Bosack, to market the technology they co-developed for connecting computer networks. But after making a bad deal with an investor, Lerner found herself pushed out of the company shortly after it went public in 1990.

    After funding the company for three years by mortgaging everything we owned and putting everything on credit cards, we made an absolutely bozo no-no.

    We decided to take money from a VC, Don Valentine. He got 30-odd percent of the company for $2.6 million. Len and I were very naïve. We used Don's lawyer and agreed to a four-year vesting agreement. We would get 90 percent of the founder's stock after four years. But we didn't get an employment contract.

    When I was fired, it was devastating. I spent years crawling out from that. I did not understand an investor could be an adversary. My family had a small business. I always thought that if someone invested in your business, that meant he or she believed in it. I assumed our investor supported us, because his money was tied up in our success. I did not realize he had decoupled the success of the company from that of the founders.

    I don't believe all VCs are adversarial, but the first thing I tell everyone is: Get your own lawyer. Don't buy lines like, "You guys are busy; we'll just have someone draw up some papers, and it will be very pro forma." Yeah, right.

    My second piece of advice is to separate yourself from the company. What is good for you is not necessarily good for the company, and vice versa. At Cisco, I made every decision based on what was good for the company, and that pretty much ruined my marriage and my health. Len and I believed a company and its founder are the same. They absolutely are not.

    Previous job:Director of the computer facilities at Stanford's Graduate School of Business
    First paying customer: Ohio State University
    Cisco's current market cap: $112.3 billion

    Oops: 10 Common Mistakes on Twitter

    February 27, 2013 - 10:15am

    Even advanced users make basic mistakes on Twitter. Don't be one of them.

    Call me a glutton for punishment, I guess.

    Recently, I asked my Twitter followers to point out a few things I'm doing wrong on my own feed, and also point out common mistakes from other users.

    Usually, I'm on top of my game: retweeting articles, engaging in conversation, and scheduling posts to make sure my feed is active. But my followers politely pointed out that I've been making some common mistakes--and I bet you are, too.

    1. I singled out a follower when I didn't mean to.

    Make sure you don't make this mistake. When you reply to someone but you want everyone to see your reply, add a period before the @ symbol. So, if you are chatting with a business partner and you want everyone to see the conversation, refer to him as .@businesspartner with a period. That gives you more exposure.

    2. I didn't have a Twitter header photo.

    Social media expert Ken Herron says every Twitter user should look at their own profile and make sure they've added photos. You may already know about the background photo and profile photo, but there's also a "header" photo. This is the image that appears in your profile behind your profile photo, name, and handle. By default, it is a solid color. Just edit your profile and click Change Header, then add a new image. (I've since fixed this mistake.)

    3. My profile text could use some work.

    Herron also says to make sure you have a profile that is optimized for search engines. Your profile is where you normally list your hobbies or what you do. Make sure you've included hashtags like #writer or #entrepreneur and include any related organizations like @Inc so people can find you easily.

    4. You have two different profile photos for Twitter and Google+.

    What, did you think Twitter was the only really important social platform? Social media expert Julio Fernandez from SocialShelfspace.com says it is important to make sure your Twitter profile image matches the one you use on Google+. He says Google does an image verification with your Twitter profile to confirm your identity. Fortunately, I was not making this mistake.

    5. I auto-post to Facebook.

    When you post something on Twitter, it automatically appears on Facebook. This is a common mistake, but few people are willing to change (including yours truly at times). Social media expert Alexandra Golaszewska (alexandrago.com) says the mistake has a double-whammy effect: People who do not know about Twitter get confused by hashtags and other Twitter-specific lingo. And those who do get Twitter think you're lazy because you're not connecting directly with anyone on Facebook.

    6. I'm not using enough hashtags.

    Herron and Fernandez disagree over this tip, so you might want to try some experimentation. But it's always a good idea to include hashtags in your tweets for hot topics like, say, #smallbiz. Herron says these hashtags help search engines find you (Fernandez says the search engines will find the keywords anyway). Try it out and see if more is better for you. I'm tagging keywords as often as possible.

    7. I could stand to update my profile photo.

    Golaszewska also said a common mistake is to post any old profile photo, thinking it is not important. The image you use creates a first impression when people visit your profile, and they will associate that image with your company. A professionally produced image, sized correctly for the profile page, is a sign of a social media pro. My main problem: My photo is a bit old and needs a refresh.

    8. I should add video to my tweets.

    If you're using a tool like HootSuite or SproutSocial.com, you might not know about this feature. On your Twitter profile page, there is a box that holds photos and videos you've posted recently. As marketing expert Jasmine Bina from J.B. Communications (www.jbcomms.com) notes, it's common not to fill these slots. You can quickly add six photos or videos by adding links as part of a new post. "You're missing out on a big opportunity to immediately communicate your personal brand to new and existing followers," she says. "If your stream is empty or outdated, then, frankly, so is your brand."

    9. You tweet the full url.

    Many social media dashboards like SproutSocial.com shorten links automatically, but it's amazing how many people insist on using the full URL. You might think Google won't understand the condensed link, says PR consultant Chad Hyett, but the search engine can read links from shortening services like Bit.ly just fine. Plus, you can track who clicks on the links and leave room for people to retweet and add their own comment. I use SproutSocial so, fortunately, I haven't been making this mistake.

    10. It's not just about me.

    Social marketing expert WendyFlanagan, who is president of Brand4Market (www.brand4market.com), reminded me to retweet articles by other authors and not just promote my own work. I know I should do this but lately had gotten lazy about it. Good advice! Keep me honest and see if I'm RTing more in the next few weeks--I'm @jmbrandonbb.

    Start-up Visa Could Create 1.6 Million Jobs in 10 Years: Report

    February 27, 2013 - 10:07am

    A new Kauffman report outlines the potential of job creation under a Start-up Visa.

    The introduction of a U.S. start-up visa could generate as many as 1.6 million new jobs in the next 10 years, according to a report released by the Kauffman Foundation today.

    Based on company and employment survival rates from Census data, the report calculates the number of companies and jobs that would be created under the bipartisan Start-up Visa Act 3.0 bill. The updated version of the bill, which was introduced to Congress in mid-February, would grant 75,000 start-up visas to H-1B and F-1 visa holders.

    "There's hope that 2013 finally may be the year the United States implements comprehensive immigration reform," Dane Stangler, director of research and policy at the Kauffman Foundation, said in a press statement. "However, that legislation would fall short if it fails to create a new visa for the thousands of potential foreign-born entrepreneurs who are already in the country, particularly those who are likely to start technology and engineering firms. Increasing their numbers would accelerate U.S. economic and job growth and help offset the steadily declining numbers of native entrepreneurs."

    The Start-up Visa Act was first introduced by former Senator John Kerry (D-MA) and Richard Lugar (R-IN) in 2010, and again in 2011. On February 14, Senator Mark R. Warner (D-VA), Jerry Moran (R-KS), Chris Coons (D-DE) and Roy Blunt (R-MO) introduced the Start-up Visa Act 3.0., which explicitly included the creation of an "Entrepreneur's Visa." To be qualified for the program, these entrepreneurs would be required to hire at least two full-time employees in the first year and five full-time employees in four years.

    Today's Kauffman report used three different calculation methods to project the potential of job creation under the Startup Visa 3.0 Act.

    In the first scenario, companies would meet the minimum requirements by the legislative proposal (five full-time, non-family employees after four years), therefore creating about 500,000 new jobs over ten years. In the second scenario, the report applies real job creation record of four-year firms between 2003 and 2010 (9.18 employees on average). This yields a much higher job creation estimate: about 889,000 by 2024.

    The third scenario gives the largest potential job creation number – 1.6 million jobs – under the assumption that half of the companies under the Startup Visa program will be technology and engineering firms. The assumption is based on the fact that most F-1 student visa and H-1B visa holders study STEM subjects, and immigrant-founded technology companies employ an average of 21.3 people per firm.

    The current immigration rules make it difficult for highly-skilled foreign nationals start a company in the U.S., but almost half of the start-ups have at least one foreign co-founder, according to the recent 2013 Start-up Outlook Report by Silicon Valley Bank.

    An Entrepreneur's 'Stop Doing' List

    February 27, 2013 - 9:39am

    As Jim Collins says, what you stop doing is as important as what's on your to-do list. Here's what you need to stop doing, immediately.

    It’s common for founders to feel overwhelmed, and with good reason. When I started my first company, I spent way too much time doing things that didn’t have a big payoff. But as Jim Collins says, your “stop-doing” list is just as important as your to-do list.

    If you’re doing any of these things, or thinking about it, stop, pause for a moment, and think again.

    Over-Designing Everything

    Deep down we’re all perfectionists. Everything must be in right place with the right color palette, the right font and the right everything, right?

    Wrong. This cannot be your focus, whether we’re talking about a Powerpoint presentation, your website, your Facebook page or marketing collateral. The content is what’s important: the numbers, the plain facts, the winning factors. Beautification and fine-tuning can come later, when you have the time and resources for something flashy. Just get the important stuff done, and leave the glitz for later.

    Trapped in Busy Work

    Spending hours going through bank statements or letting days pass while you relentlessly drive towards zero new messages in your inbox? This will get you in trouble.

    It is important to set aside time to take care of administrative tasks. But, it’s more important to allocate time, every day, for tasks that will drive your business forward. That’s what it takes to generate a big boost in productivity.

    Andy Maguire, founder of Internmatch.com, can’t stress this enough. “Stop focusing on small wins that give you the easy gratification. It’s most likely not going to get you any closer to your real goal,” he says. “Start each day thinking about one strategic priority that you can make progress on, and do not end that day until you've worked on that item.”

    Trying to Do it All

    Early on, the entrepreneur wears tons of hats. But this can keep your business from growing. Pia Celestino, founder of branding firm Crea7ive.com, says, “When we were starting Crea7ive.com, I was in charge of marketing, selling, accounting and delivering on the work. My team was offshore, so when something came up, there usually wasn't anybody available, or it just took too much time to get a simple thing done. It wasn’t until years later when I realized I needed to take a risk and begin recruiting local people with exceptional talent. Those people cost more, but enabled the business to finally start growing and accelerating. If I could go back, I would definitely have hired faster and delegated better!”

    It can be tempting to try to do everything yourself in order to save money. But if you’re working 16- hour days and the business isn’t growing, you need to take a risk and find somebody to whom you can delegate. Then you can focus on growth rather than just keeping the business afloat.

    Tweaking Your 5-Year Financial Projections

    When you’re out trying to raise money, it can be very tempting to revise your pro forma financials every time you solidify a detail that will impact your bottom line. While it’s important to have “accurate” pro formas to show investors, don’t waste a lot of time on them. Instead, focus on your cash plan.

    Al Charbonneau, an early stage investor, says, that accurate cash plans are what investors will want to see. For the other financials, he recommends laying out a conservative case, a best case, and lastly a most probable scenario. Three years is the maximum timeline that makes any sense.

    Investors know your profit projections are going to be wrong, so don’t worry about fine-tuning them. But you do need to know how much cash you need to get off the ground. Keeping your weekly cash plan as up-to-date and accurate as possible is a much better use of time.

    Although it can be very tempting to get things “just right,” too much fixation on details is probably just self-soothing, rather than creating any real benefit. Those lost hours could have gone toward other, more important activities, like selling and driving growth. If you catch yourself nitpicking over small details, stop, take a breath, and realize that you’ve got more important things to do.

    Make Your Slogan Ring True

    February 27, 2013 - 9:29am

    How many times have you heard a company's tagline and thought, "yeah, right!" Here's how to avoid that fate--and make a promise to your customers you can actually keep.

    How many times have you read a company's tagline and ended up shaking your head? How many times have you laughed out loud in disbelief?

    I'm constantly spotting slogans and ads that promise perfection, but which I know, as a customer, are as far from the truth as Uranus is from the sun. I'm not alone. Nielsen reported that trust in advertising messages has declined dramatically in the past two years.

    There are many examples of disingenuous brand promises. Take United Airlines. Please.

    As United was in the midst of acquiring Continental Airlines, the carrier posted ads in airports that read, "It's not who's merging that counts. It's what's about to emerge." I can tell you, first-hand, that what's emerged is really nothing to brag about. In fact, it's pretty terrible.

    New Jersey Transit is my commute of choice. That's because I have no other choice. A year or so ago, it ran a campaign with the brand promise, "Getting you there.'"

    Based upon the daily delays, I suggested it add the word "eventually" to the slogan. And, just last week, after being positively crucified on various rider websites and Twitter feeds, New Jersey Transit launched a new campaign with the brand promise: "We are listening." I chuckled silently, thinking it should add: "...We don't like what we're hearing, but we're not going to change a damn thing. Live with it."

    That said, United Airlines and New Jersey Transit have an inherent advantage over the average entrepreneur: They have far less competition (i.e. I have limited options when flying to, or from, Newark Airport and as for New Jersey Transit, aside from choosing to drive and sit in two-hour traffic delays, I have no other choice.

    Knowing that, like me, your firm has myriad competitors of all shapes and sizes, how do you ensure you don't alienate--or even outrage--your customers with a bogus brand promise?

    1. Know that benefits trump features.

    You may be thrilled about selling a computer with a third-generation Intel core processor, but what does that mean to anyone but techies? On the other hand, if your product is simplifying my life and adding a critical minute or two of extra, free time, I'll stick to you like white on rice.

    2. Tell your story through the customer's eye.

    No one cares if your product, service, or people are smarter, stronger, or faster than the competitors. They want to know that you'll somehow improve their lives. So, if you know I need a car that simply will not break down, don't tell me it takes curves better than Disney's Space Mountain ride. Put your promise in a perspective that makes sense to your customer.

    3. Kick the tires before making the claim.

    Remember how many traffic accidents occurred when Domino's Pizza guaranteed 30-minute delivery or your money back? A few multi-million dollar lawsuits changed that brand promise virtually overnight.

    So, don't do what Comcast, my cable provider, promises in its advertising. Don't tell me you're "Comcastic" when you and I, both know your service is abysmal and your customer service representatives can be more threatening than a New Jersey State Trooper.

    4. Tell the truth.

    It's a radical thought, isn't it? But, if you've been experiencing product, quality, or service problems and you know that your customers know (the blogosphere always contains more negative than positive comments), you need to admit fault. At very least let customers know you're trying to address the issues.

    Loyal customers will stick with you if they think you're being honest with your brand promise. Just think back to that legendary Avis tagline: "We're only No. 2. We try harder." That campaign prompted generations of businesspeople to select Avis over its larger rival, Hertz. And, after all, isn't consideration what you want at the end of the day? Show some authenticity and--gasp--vulnerability in your messaging.

    5. Walk a mile in your customer's shoes before you put pen to paper.

    Don't tell anyone you're the best at anything before you, yourself, walk in your customer's shoes and know it's a fact. Experience how you are communicating with your customer, online and offline. Test your 800 number. Ask a trusted friend to walk into your reception area and see how she's treated. And definitely, most definitely, test how easy and intuitive the communications experience on your website may be. (Note: we've been in business 18 years, and have updated and upgraded our website numerous times. But, that didn't prevent me from recently discovering we'd been marketing a new service that isn't even mentioned on our website! Needless to say, that fix is being made as you read this column).

    To err is human, to forgive divine. Customers will stay loyal if you don't over promise and under deliver. That said, if your product or service truly stinks, it will soon go the way of all flesh sooner or later).

    You might be wondering about my firm's brand promise. It's actually both a point of view and a promise: "Listen. Engage. Repeat." We promise clients we'll listen to their audiences before creating any communications plan or strategy. We'll then help the client engage in conversations, both online and off, and meet their audiences wherever they share their hopes and dreams and, eventually, form their decisions. Finally, we'll repeat the process, again and again and again.

    That's how we go to market for Peppercomm. And it's how we suggest clients go to market (with our counsel and heavy lifting, of course).

    So, what's your brand promise? Would your customers say it rings true? If it doesn't: ask not for whom the bell tolls. It tolls for thee.

    Top 10 'How to Sell' Books of All Time

    February 27, 2013 - 9:00am

    These classic sales books should be in every business library.

    Amazon contains 340,737 book titles containing the word "sales" and 48,427 containing the word "selling." Since you're probably not going to read all 389,164 of them, I thought it might be useful to identify the ten that should be in every business library. Here they are:

    10. Selling to Big Companies

    One of the biggest mistakes in the business world is assuming that all companies are alike and therefore should be approaching in the same way. In this instant classic, Jill Konrath explains how to manage the often-Byzantine politics of large companies in order to help them make intelligent decisions.

    9. Mastering the Complex Sale

    Prior to this book, much of the business world believed that a good salesperson can "sell anything to anyone." Author Jeff Thull, however, lays out the gradual process by which a salesperson can help customers clarify their needs, understand their alternatives, and make the internal changes required to buy a solution that will change their entire business.

    8. The Psychology of Selling

    Selling is more that just strategy and politics--it's the practical application of psychology in a business context. In this seminal work, Brian Tracy lays out the inner motivations of both buyers and sellers, explaining how they interact to create opportunities for both parties. Insightful and essential.

    7. Strategic Selling

    This is the masterwork when it comes to understanding how a company's sales strategy--and the execution of that strategy--can make or break a business model. Authors Robert Miller and Stephen Heiman (along with their amanuensis Tad Tuleja) detail the best practices of successful firms, showing how and why their strategies have worked.

    6. Perfect Selling

    In this quick read, author Linda Richardson encapsulates, in a very simple and straightforward fashion, the entire sales cycle. She simplifies where other sales books complexify, making it clear that there's no reason that any reasonably intelligent person can't move a sale forward. It's perfect for entrepreneurs and professional salespeople alike.

    5. How to Master the Art of Selling

    It's difficult to overestimate the enormous influence that Tom Hopkins has had on the world of sales. He was the first to recognize that what's now considered commonplace: that selling is primarily a process of managing your own fears and focusing on what the customer needs.

    4. The Greatest Salesman in the World

    In addition to being a groundbreaking business book (See Top 10 Most Influential Business Books), Og Mandino's classic helps the reader discover the positive "why" behind selling, reframing the act of selling from something that's manipulative to the act of helping other people achieve their dreams.

    3. Secrets of Closing the Sale

    There's a reason why Zig Ziglar's death last November generated an outpouring of tributes from nearly every corner of the business world. It's been said that all successful people "stand on the shoulders of giant." For the world of sales, Zig was the ultimate giant, the pioneer who laid out the basic principles on which all sales technique and training is based.

    2. The Little Red Book of Selling

    I like to think of Jeff Gitomer as the "Seth Godin" of the sales world. Jeff has a knack for distilling complex business issues down to their essence, and then explaining exactly how to use that essence to make yourself more successful. Note: this book was tied for second place with Gitomer's other classic work, The Sales Bible.

    1. Spin Selling

    Finally, this is the book that turned selling from an art into a science. While other sales books are heavy with anecdotes and assumptions, Neil Rackham examined hard evidence of actual sales performance and codified what works--and what doesn't--in real world sales situations. A must read for everyone who sells.

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    GitHub: Turning a Nerdy Hobby Into a $750 Million Business

    February 27, 2013 - 9:00am

    One, the maker of the world's most powerful software-development tool is growing at a stunning rate. Two, your next business will be built on it.

    It's "Beer:30," and Tom Preston-Werner is standing at a lectern in the vast San Francisco loft where GitHub makes its home. Before him, arrayed on a mashed-up assortment of chairs and couches or topping up a glass of whiskey at the overstocked house bar, are maybe 40 GitHub employees; another 44 around the world are watching a live feed. Preston-Werner has the tired eyes and untended facial hair of a new father, and the low-def biceps of a software engineer. Atop his head sits a mammoth banana-yellow foam-rubber cowboy hat.

    The weekly gathering begins with Preston-Werner welcoming a few new employees. The co-founder and CEO then runs through a series of shout-outs to folks who have finished off pieces of code designed either to improve the GitHub site or to make it work better for clients. Then Preston-Werner takes a few minutes to wax philosophical. Taking a page from science writer Steven Johnson's Where Good Ideas Come From, he invokes the importance of "serendipitous interactions," the way powerful ideas can emerge from the most random collisions of people, thoughts, and artifacts. He urges his people--many of them recent hires, most of them in their early 30s, tops--to go out and cultivate new experience, to engage with the unknown. To underline his point, Preston-Werner reminds them that out of the investment the company received in July from Andreessen Horowitz, "about half of a percent" was picked up by Ron Conway, known in these parts as the godfather of Silicon Valley. Preston-Werner met Conway at a Y Combinator conference. Serendipity, indeed.

    That venture round was worth $100 million. It valued this little five-year-old company at $750 million. As Preston-Werner speaks, between pulls on a beer, his giant foam chapeau jiggles gently.

    As nerd endeavors go, GitHub is pretty much at the top of the food chain. What began as a private project with zero commercial intent has since emerged as one of the world's most--if not the most--powerful development tools for software. In just a few years, it has inserted itself at the center of the developer universe by making it easy for coders around the world to work together. If "software is eating the world," as Andreessen Horowitz co-founder Marc Andreessen put it not long ago, GitHub is where much of that software gets its teeth.

    The Andreessen Horowitz bet was the "biggest investment we've ever made," says Peter Levine, the partner who now sits on GitHub's board. It's not hard to see why the VC firm went for it: GitHub's momentum is astonishing. The company says it took 38 months to host its millionth project on the site; the five millionth came in just two months and 21 days. "I don't know a start-up that's not on GitHub," says Jay Sullivan, VP of products at Mozilla, maker of the Firefox Web browser. In other words, your next company, or parts of it, will be built here.

    GitHub started as an effort by Preston-Werner and co-founder Chris Wanstrath to solve what Preston-Werner calls a "pain-in-the-ass problem": using something called Git, a version control system developed by Linus Torvalds, the creator of Linux. A version control system is a tool that allows multiple coders to work on the same piece of software without losing track of the various changes made in each version or allowing the source code to be corrupted with lots of contradictory fixes. Torvalds built Git in reaction to the centralized structure of previous version control tools, which made it all but impossible for developers to work together independently. And though Torvalds's system "makes collaboration possible, it doesn't make it easy," says Preston-Werner. He sensed that Git could be "this superpowerful thing if only you could understand it."

    Preston-Werner grew up in Dubuque, Iowa; his mom was a special-education teacher and his stepdad an engineer. (His biological father passed away when Tom was a kid.) Preston-Werner was the classic engineer-in-training: ripping apart pieces of gear his stepdad had lying around, hacking the family TRS-80 PC, studying How Things Work books. Eventually, just as the dot-com boom was cresting, he set sail for Harvey Mudd College, east of Los Angeles. After two years, he dropped out to be part of a company run by two fellow Mudd students; then he struck out on his own, first running a digital design firm, which taught him "all of the crap it takes to run a business--taxes, all that," then creating Gravatar, the technology that allows your avatar to follow you around the Web from site to site.

    He sold Gravatar to Matt Mullenweg, the founder of WordPress, then paid off his credit card debt and enjoyed the first bit of breathing room he had known in several years. That's when he met Wanstrath, who is still only 27, six years younger than Preston-Werner. ("I started GitHub when I was really young, so I don't have a bio or anything," says Wanstrath, who looks like Gregg Allman run through a reverse aging machine. "My life story's pretty short.") The two were part of the growing crew of developers working in Ruby on Rails, a Web development framework that has itself become a major force. "One of the things we talked about in the Ruby community was Git," Wanstrath recalls, "at the time a very esoteric version control system." In October 2007, they set about improving Git, partly for fun and partly to make it more useful in their professional lives. They stayed in their day jobs and noodled at GitHub primarily at bars and coffee shops around the SoMa neighborhood. During this period, they picked up two other co-founders, PJ Hyett and Scott Chacon.

    GitHub went live in February 2008, and soon Geoffrey Grosenbach, founder of PeepCode, essentially demanded to pay for the service. Suddenly, a dork pastime was a business, and by July, Preston-Werner was confident enough in it that he passed up the offer of a $300,000 bonus and stock options from Microsoft, which had acquired Powerset, the company he worked for at the time.

    Today, a programmer in Dubai can drop a chunk of code in a "repository" on GitHub's site, post a description of his project and what kind of help he's looking for, and then watch as coders around the world dig in and contribute. If the software is open source (that is, free for the taking by anyone who wants it, with minimal restrictions), the "repo" is visible to all three million developers who work on GitHub.com. Depending on how interesting the idea is--it might be a simple feature for a website or an entire operating system--hundreds or even thousands of people might "fork," or copy, the code and start working to improve it. When a developer thinks he has cracked whatever problem or portion of the problem he was working on, he can make a "pull request" to the "maintainer" of the repository to review his suggested fixes. The maintainer integrates some or all of the new code as he sees fit.

    GitHub is in some ways like Wikipedia--highly social, tapping into the human desire to contribute to a common goal. When so many brains are engaged at once, the process of development, refinement, and deployment is radically accelerated. Each revision should, in theory, make the code more powerful, get it closer to the point where it can be shipped as an element in a larger software product, whether open source or commercial. "If the barrier to collaboration is too high, then you're not gonna do it," Preston-Werner says. "But once you get that barrier low enough, once you pass a certain threshold, everybody's contributing." GitHub is adding users at the rate of 10,000 per weekday.

    Unlike Wikipedia, however, GitHub has a business model. Essentially, GitHub offers programmers and companies a choice: They can use the collaborative platform for free as a place to build open-source software, or they can pay to use it behind a wall, where they can develop proprietary software that forms part of a commercial product or service. In the first case, your willingness to make your code available to everyone earns you the right to exploit the web of open-source coders working on the GitHub site. In the second, your company's developers work in private, using the collaborative features GitHub has built but not its distributed global network of talent.

    "If you have code on GitHub but the whole world can't see it, then you're paying for it," says Preston-Werner. There are three payment tracks. One is a personal plan that costs as little as $7 a month. (The price is based on the number of repositories you have.) Then there is an organization plan, which has features for more sophisticated team management and starts at $25. The big-money option is the enterprise plan, which involves clients downloading a version of GitHub to live locally on their servers. It can cost millions of dollars a year. Enterprise clients include Lockheed Martin, Microsoft, LivingSocial, VMware, and Walmart. GitHub doesn't talk about how much these companies, specifically, are paying, but it has hundreds of thousands of paying customers between the website and the enterprise client base.

    Levine, the Andreessen Horowitz partner, says his firm was first drawn to GitHub because it was "a growing enterprise with 300 percent year-over-year annualized growth--in a market that has been unchanged for a very long time." Sounding amazed even several months on, he marvels that the co-founders had gotten to "really interesting levels of profitability and revenue without a dime of outside funding and without even building out a sales organization--they're all engineers!"

    A grown-up sales operation, Levine says, is just a first "tactical" step. He and the lads have big plans.

    For survivors of Web 1.0, GitHub's offices bring the memories--or night sweats--flooding back. The 14,000-square-foot loft is rigged out with air hockey, Ping-Pong, a pool table, and an Xbox 360 (hooked up to side-by-side flat screens). There's a catered Thursday lunch (families are invited), a fridge full of microbrew, and a handmade wooden kegerator with an inlaid Octocat, GitHub's fantastical mutant mascot. Numerous side rooms house the many other toys designed to "optimize for happiness" for GitHub's 145 employees, who work whenever and wherever they like: electric guitars, an amp, and a full matched set of harmonicas in the jam room; a Skype chamber; a womb room with low lighting, a shag rug, and four egg chairs. There's a ladies' lounge with a pink, plasticized fainting couch, and the executive lounge, complete with faux-antique globe (which conceals a 16-year-old bottle of Lagavulin) and lots of manly leather. Actually, the whole office smells of leather--and revenue, which is what makes it so not like 1999.

    If the term open-source software triggers some sort of narcolepsy neurotransmitter in you, you are not alone. It certainly did in me, to the extent that I thought about it at all. But the further I wandered in this world, the more wondrous I found it to be. Those of us who don't write code tend to be oblivious to the sheer labor involved in creating thousands or even millions of lines of the stuff, all of which have to function perfectly if a piece of software is to run bug free. A single project on GitHub can entail months or years of work and countless strings of dialogue among maintainers and coders hoping to contribute.

    It's hypergranular work and has to be, not least because open-source software has become the bedrock of almost every company on earth. From Apple to Microsoft to the tiniest start-up, open source is part of the software stack--and many companies are built mostly from open source. And that, of course, is the point: Open source means a new business doesn't have to start from zero; it can pull down prefab pieces of software infrastructure for free, building only the bits it needs to bring its product to life. John Pettitt is founder and CEO of Repost.us, a service that allows news articles to be embedded as easily as video, and to carry their advertising and analytics along with them; earlier, he was the founder of Software.net, which became Beyond.com, and CyberSource, a credit card fraud detection company bought by Visa for $2 billion in 2010. Back in 1994, when Pettitt was starting Software.net, he says, "there was no e-commerce software, there was no e-commerce platform; I had to write my own credit card processing, I had to write my own storefront. Everything we had to do, we had to do from scratch, because there were none of the building blocks there." Pettitt built much of his new company on GitHub. "Today, you can sort of Lego things together in a way you never could before," he says. "And the corpus of information and tools is growing at a huge rate."

    Those Legos form the skeletal system of almost every new company; the profitmaking intellectual-property layer is skin thin, sitting on top. "It's no different than having two-by-fours and electricity," Preston-Werner says. "If you have a ready-made Web server and Web framework, for example, that represents hundreds of thousands or millions of man-hours of work that you don't have to put into creating a product."

    That is exactly why GitHub is formidable: It is at once a lumberyard and a workspace. Entrepreneurs on the site can find, or help develop, almost all of the open-source raw materials they need and set up their own closed place to integrate those materials with their IP. What's more, by simplifying Git, GitHub has turned a tool even serious coders found arcane into something useful to the "casual forker," in Wanstrath's term. "We want to enable people who don't know each other to collaborate on the same thing, toward the same goal," says Wanstrath. "This is all I want to do--forever."

    There has been considerable rumbling lately that the Web is turning into a Monopoly board or mall, with a few big anchor stores and a bunch of rabble scrambling either to build on top of them or to find a survivable place in their shadows. "The openness that drove the Web and its richness are definitely under attack," says Tim O'Reilly, founder and CEO of O'Reilly Media, the producer of industry-leading programming manuals, tech magazines, and conferences. "This happens again and again when something new comes on the scene. There's usually a huge sharing economy, with lots of innovation and lots of openness, and then some animals become 'more equal than others,' in Orwell's wonderful phrase, and then it tends to start to stagnate. But that impulse to create goes and bursts out somewhere else."

    That somewhere, at least right now, would seem to be GitHub. In fact, it's possible to see GitHub as a new killer app for the Internet--a "mini Web," as Preston-Werner describes it, a place where networked minds actually build things together.

    "The network effect is awesome," Preston-Werner says, sitting in the situation room, another ironically themed chamber (this one has a red Batphone to nowhere, a massive table in burled veneer, Big Boy Executive Chairs, and LED signs with the time zones of various GitHub outposts). "There are standards now based on GitHub, so everybody can come in to a new project and immediately know how to get the code, how to contribute code, how to review the code, how to submit issues to the code base.... The more people do that, the stronger the effects and the gains from having a uniform, well-known, standardized system. And that's happening really, really rapidly."

    That network effect gets reinforced in numerous ways. For example, a developer on GitHub acquires a social reputation, and that reputation becomes a way to find new, paying work; the network's role as a placement service helps it to grow still larger. The truly badass potential of GitHub, though, is that it isn't only a force multiplier for producing code but also for the generation of ideas--and for the products created from those ideas. As Preston-Werner says, projects hosted on GitHub will increasingly be "not just code, but anything that involves working on files on a computer: books, hardware projects, schematics for circuit boards, legal documents--anything that ends up in a digital format." This is already happening on the site, including projects for books (several coding manuals, for example, are being written on GitHub--including one about GitHub), hardware (OpenRov has the hardware design, software, and circuit schematics for its underwater robots on GitHub), and government (the U.S. and U.K. governments both work on the site).

    Wanstrath, who handed the CEO title over to Preston-Werner in June and is an absolute geyser of GitHub zeal, agrees that as more people pile into the service, a shift is taking place: "Now we are finding that it's not just about the code; it's about, 'Hey, I want to work on this with you.' That's really eye-opening to us and gets everyone here superexcited. Working with someone else is just an awesome part of being alive. Creating art, creating tools, creating documents, doing homework, anything--it's not limited to programming. I don't see why musicians wouldn't want to work this way, for example."

    In other words, as GitHub gets bigger, its power becomes less about the platform itself than about the people on it. One day in the GitHub offices, I ran into David ten Have, a New Zealander (and an Inc. cover subject in 2009). Ten Have is founder and CEO of Ponoko, a company focused on developing "the tools to enable digital fabrication." That means a system that could, one day, given a disassembled MP3 player, spec out each component, relay those specs to a 3-D printer, and have the printer produce all the pieces required for assembly by a nearby robot. Ten Have says, "GitHub makes this easier and faster, because it has a platform that enables the collaboration and, most important, the social norms to encourage people to look at the world collaboratively. That is fundamentally why GitHub is important beyond software: Ethos and attitude are transferable--into lawmaking, product design, manufacturing, biology, chemistry, dance, music, moviemaking, books, cooking... The list goes on."

    And on. Which suggests that GitHub has only begun to grow--as a business, as a tool for business, and as a cultural force. "It's this huge ricochet effect," Wanstrath says, nearly manic with optimism. "We are this thing that people can step on, like an elevator, and then go shooting into space."

    Want Happier Employees? Feed Them

    February 27, 2013 - 8:35am

    Sometimes making your employees happy can be as simple as arranging for bagels in the morning or sandwiches at lunch.

    You can do a lot of really complicated and/or expensive things to boost morale... or you can just buy your employees lunch. Really.

    Seamless, a company which, admittedly, specializes in making it possible for your company to order lunch, has a new survey out that demonstrates that the way to an employee's heart is through the stomach.

    While 78 percent of employees reported providing food for meetings with clients, companies aren't providing that same level of service for their internal meetings. And while it's extremely important to keep clients, it's also important to keep (and attract) good employees.

    • 60 percent of the 1100 people surveyed said that having food at the office would make them feel more "valued and appreciated."
    • 45 percent said that the availability of free lunch would strongly influence their decision to accept a job offer.
    • 60 percent felt that company offered meals would encourage them to eat with their colleagues, which could mean you'll actually get more work out of your employees, since business can be discussed over work. (And as a little legal reminder, if business is being discussed over work, it counts as working time for your non-exempt employees and you have to pay them.)
    • 41 percent felt that the best corporate gift was food.
    • 40 percent said that having food in the office would reduce stress.

    Here are some additional fun facts from Seamless about eating in the workplace:

    • Who orders the most Chinese? = Law /Accounting
    • Who orders the most deli? = Finance
    • Who orders from diners the most? = Agencies
    • Who orders the most Sushi/Japanese? = Law /Accounting
    • Who orders the most Mexican? = Media
    • Who orders the most Pizza? = Agencies
    • Who orders the most Bar Food/ Burgers? = Media
    • Who orders the most Thai / Vietnamese? = Media
    • Who orders the most vegetarian? = Tech/Media

    Who eats the healthiest?

    • Across the board, Boston creative agencies are the healthiest industry in the nation, with 98 percent of all orders being healthier options.
    • Chicago's creative agencies order the least healthy options in the creative industry with 43 percent, making them the unhealthiest creatives in the nation.
    • D.C. techies are the healthiest within the tech industry across the nation, ordering 56% healthy food options compared to Chicago techies with 55 percent, New York techies with 44 percent, Boston techies with 42 percent and San Francisco techies with 30 percent and L.A. techies with 15 percent.
    • Boston, New York and Chicago consulting firms are the healthiest in their industry with nearly 50 percent of their total orders as healthy options (49 percent, 46 percent and 45 percent respectively).
    • Boston and New York financial companies are the healthiest in their industry with more than half of their food orders as healthy options.
    • Lawyers in Boston lead the way for the law industry with 61 percent healthy orders, followed by New York with 48 percent, San Francisco with 44 percent, D.C. with 32 percent, Chicago with 20 percent and L.A. with 24 percent.

    Entrepreneurs Who Keep the Iditarod Mushing

    February 27, 2013 - 6:17am

    This month, more than 50 teams are set to compete in the Iditarod Trail Sled Dog Race, a 1,000-mile trek across Alaska.

    New Anti-Piracy Rules: What You Need to Know

    February 27, 2013 - 6:00am

    The so-called "six strikes" anti-piracy rules aim to punish Web users for copyright violations. But Internet activists are up in arms--should you be worried too?

    Six strikes, and you're out! In a nutshell, those are the news rules behind a new effort to crack down on Internet piracy.

    On Monday, the Copyright Alert System--a joint effort between the nonprofit Center for Copyright Information [CCI] and Internet service providers to punish Internet pirates--took effect. At first glance, the new system sounds like an idea entrepreneurs and intellectual property holders can get behind.

    Basically, it works like this: The Center of Copyright Information's partners--companies that own and develop music, movies, and other copyrighted material--join peer-to-peer networks (like, say, Dropbox) to find copyrighted material they own. Then they identify the publicly available IP address of any computers making the files available. These IP addresses are associated with specific service providers, so the owners of the copyrighted content alert the ISPs to any observed infringement, and service providers in turn alert users.

    Users receive two or three--depending on the service provider--gentle warnings geared toward educating them on copyright policy and instructing them to avoid violations the future. However, if the piracy continues a user will then be subjected to temporary--but frustrating--punishments. AT&T has stated that users will be blocked from accessing popular websites, while Verizon will kick Internet speeds back to the days of dial-up.

    In other words, the pirates will be given a friendly, parental reminder to respect others' intellectual property. Not such a bad idea, right?

    Here's where it gets thorny. The service providers' approach has digital rights advocates feeling skeptical, voicing worries about privacy infringement and a lack of due process. Businesses may have reason to be wary, as well.

    As Matt Peckham of TIME points out, small businesses that provide Wi-Fi access to customers could face accusations of copyright infringement on behalf of their file-sharing patrons.

    Similarly, larger businesses with their own company networks may get blamed for illegal file-sharing done by employees using company IP addresses. Finally, as tech site GigaOM points out, the new Copyright Alert System does not account for the fact that not every user downloading or sharing material is breaking the law; they could be using the content under legal fair-use principles.

    "There's a transparency issue here," Peckham writes. "If [the Center of Copyright Information] really wants this to work as claimed--to educate users--then it needs to work with ISPs to lay out the parameters beforehand, addressing scenarios like the one I've described."

    These tattle-tale measures aren't the way to solve the piracy problem, say GigaOM writers Mathew Ingram and Jeff Roberts. Instead of relying on rules like these to enforce fairness, content companies should work toward creating a "market and digital ecosystem that fosters the creation, sale, and distribution of content in a way that works with the Web instead of against it."

    Um, Hollywood, are you listening?

    One Kings Lane CEO: We're on the Same Trajectory as Amazon and Zappos

    February 26, 2013 - 10:48pm

    Doug Mack explains how his site thrived as flash sales dwindled, and why selling home decor online is unlike anything else.

    In 2012, online home décor retailer One Kings Lane doubled revenue, to $200 million. This year, after raising a massive $50 million, Series D round of venture capital, the company expects sales to surpass $300 million, with at least a quarter of purchases coming from mobile phones. Inc. senior writer Burt Helm recently spoke with Doug Mack, the chief executive of the three year-old company, about the latest round of funding, the fate of flash sale sites--and why typical discounting doesn't work for home goods.

    You recently announced One Kings Lane received $50 million in new venture funding. How do you plan to use it?
    There were two key things about the investment: We wanted to raise a large round of capital to fund our business plan through to profitability, and we wanted to bring the right investors in.

    You probably saw that Scripps Networks was a strategic investor in the company. They're the parent company of Home & Garden Television, and DIY, Do It Yourself. From our point of view, there's an increasingly tight tie between broadcasting and the web. When we've done promotions on broadcast TV, it's pretty unbelievable how quickly consumers take action on their phone or tablet. Scripps will be a partner in experimenting in future convergence scenarios.

    Tell me more about 'funding your business plan to profitability.'
    There have been a handful of meaningful e-commerce businesses built so far: Amazon, Zappos, Netflix. What you see is these companies invest really aggressively to grow the business for the first five years, and then they flip and begin to focus on profitability. When i started I set that as a mental milestone, and we're about three years into that.

    In the short term, we'll invest in marketing, merchandising, and technology. We've started to do television commercials, and we invest significantly in internet marketing. We built out our tech team to 60 or 70 people, and its on the way to 100 people. We're not planning any particular exit strategy. If we build a company that lasts for the long-term, we'll have plenty of options.

    What's changing about merchandising on your site?
    In the beginning, flash sales were all about finding excess inventory from vendors that they needed to liquidate. But there's an opportunity to bring better, unique, harder-to-find products--the types of things interior designers get in antique markets and boutiques--to customers who don't want to get the same cookie-cutter stuff from places like Crate & Barrel, but can't afford to hire a designer.

    We've launched a model called tag sales. For example, Michael Smith is the interior decorator for the Obamas. He'll pick 200 items from his private collection, and he'll make them available on One Kings Lane. We probably do five-to-seven tag sales like this a week. We also do contextual marketing, where we marry inspiration and advice with sales--like here are five ways to use an ottoman in your home. Last but not least is our vintage designer place. We created a marketplace where third parties can submit product for sale on One Kings Lane and it works like a traditional marketplace and everyday vintage art and antiques show up for sale.

    We're not going to pound our chest too much, but we definitely think sales will be north of $300 million [this year].

    How much revenue comes from these tag sales now? And where do you see sales coming from as you evolve?
    Seventy-five percent of what we do is working with brands and presenting either standalone brands or events around a theme: contextual retail. Twenty-five percent of what we sell is around designers, celebrities, and the vintage marketplace. That's been a pretty big evolution; 25% of the business is new stuff that didn't exist two years ago.

    Why is that happening? Why is it necessary to do all this additional marketing to show consumers how they can use your products, or associate them with big names?
    Home is a unique market. There was never a place you go to learn how to decorate, or how to entertain.

    Meanwhile there aren't the kind of well-known, aspirational brands that exist for shoes or handbags.
    You've actually nailed it. In the apparel market or the automotive market, people say 'I want a Mercedes,' or 'I want a Gucci handbag,' or 'I want to own a Macbook, I don't want to own a Lenovo.' In this market it's so much more subjective and personal and it's about my taste and style. But there's no brand that can help them achieve that. We educate people on what's there, help them find the pieces that create a home they want to walk into after a hard day of work.

    When the flash sale model was first introduced, people found it incredibly novel. As it has become more familiar--are there types of things that continue to work, and things that don't? How do you see this ecosystem developing?
    When we first started we had a very good business in candles and stationery and decorative accessories and things I'd call reasonably safe purchases. Over our three-year evolution, we've seen customers get comfortable buying big-ticket items: furniture is the biggest category by revenue. We've sold things for as much as $20,000 and have had an order for as much as $50,000. These aren't just one-off situations, they're happening more and more routinely.

    The other thing that's happening is mobility. Twenty-five percent of our revenue comes from mobile. In the original flash-sale model it was all about logging on to the website at 11 AM eastern to see the new stuff for sale today. We're now, because of mobility, seeing much more extended engagement. Mobility is definitely going to create the winners and losers as much as anything in e-commerce to date.

    How do you see this industry shaking out? Will there be one massive Amazon-like seller of limited time offers--a T.J. Maxx online--or maybe a handful of smaller ones?
    I think we're there already. The vertical players have won, and are only going to win more. Early on companies tried the department store model of selling women's and men's and kid's clothing, and home, travel, and food, and none have achieved particular success.

    What about Gilt Groupe? That company follows the department store model, and it says it turned profitable in the fourth quarter of 2012.
    If they are truly, genuinely, sustainbly proftiable, then I'd count that as a success. I'm not privy to their financial statement. We'll have to wait and see. But anybody who has crossed over to sustainable profit is a winner.

    Other companies, like Gilt Groupe, have said they expect a 20 percent to 40 percent growth rate going forward. Is that what you see for One Kings Lane as well?
    For us, frankly, that would be a dramatic drop-off. I'd be disappointed with that. If we grew 100 percent year-over-year, you should certainly remain above 50 percent growth. If we went to a 20 percent after being 100 percent, that would be super disappointing. We're not going to pound our chest too much, but we definitely think sales will be north of $300 million.

    Why Banks Still Aren't Lending to You

    February 26, 2013 - 2:20pm

    New data says commercial lending is booming, and interest rates are at record lows. So why aren't small businesses getting loans?

    It's official: Banks are lending to businesses again in a big way--unless you're a small business. According to FDIC data released today, U.S. commercial & industrial loans totaled $1.5 trillion as of December 31, 2012, a 12 percent increase from the year before, surpassing the high-water mark set in the second quarter of 2008. Meanwhile, small business lending continues to plod along: Loans with initial balances under $1 million increased just 0.4 percent, to $284 billion, 17 percent below the pre-recession peak.

    "There really hasn't been much of any recovery" for small businesses, says Scott Shane, a professor of economics at Case Western Reserve University. "You could make a case it's no longer declining…[but] it's all far below where it was before the recession."

    Overall, total commercial loans rose for the 10th straight quarter. With interest rates so low, large companies are increasingly borrowing money to buy inventory and acquire smaller competitors, says Richard Bove, a banking analyst at Rafferty Capital Markets. Meanwhile, as beleaguered European lenders have retrenched from U.S. shores, large American banks are picking up the slack, driving the numbers up further.

    But most banks haven't warmed to small businesses the way they have to their larger counterparts. Only nine percent of senior loan officers said they increased credit limits or eased covenants for small businesses, according to a January survey by the Federal Reserve, compared to 19 percent who said they'd done so for mid-sized and large companies. Smaller loans are still considered riskier and costlier, says Glenn Goldman, chief executive of Capital Access Network, which helps small businesses find credit. "It's much more efficient to devote time to a single $1 million transaction than to twenty $20,000 transactions," Goldman says.

    Entrepreneurs themselves remain skittish. Only six percent of owners believe the next three months will be a good time to expand, according to National Federation of Independent Business Owners February 2013 Small Business Economic Trends report, and the majority of respondents believed business conditions would be worse in six months.

    "People who have credit available are not using it," says Marc Bernstein, head of the small business segment at Wells Fargo. In 2012 the San Francisco-based bank increased lending commitments to businesses with less than $20 million in revenue by $16 billion, or 30 percent. The actual amount of debt utilized in these kinds of smaller credit lines remained flat in the fourth quarter. "Small businesses started from a point of more fragility," says Bernstein. "We're just starting to see small businesses say they're expanding."

    "[Small business owners] are very optimistic about their own ability, but concerned about what they don't have control over," says Robb Hilson, an executive at Bank of America's small business group who used to oversee middle-market loans for the Charlotte, North Carolina-based bank. Over the past 24 months, Bank of America has hired 1,000 bankers to specialize in small business. New loans to businesses with less than $20 million in revenue increased 28 percent in 2012, says Hilson. Overall, the bank has extended small business loans totaling $19 billion, according to the latest FDIC data, up 15 percent from a year ago. The economic picture is still far from rosy—and small businesses have less tolerance for risk than larger, better-capitalized businesses. "Clients are feeling better today than they were a couple of years ago, there's no question," says Hilson. "They're just cautious about buying that next piece of equipment."

    Youngstown: Mecca of 3-D Printing? Not Yet

    February 26, 2013 - 1:45pm

    When President Obama touted a Youngstown, Ohio-based institute as a "state-of-the-art lab where new workers are mastering 3D printing," he spoke too soon. Here's the true story.

    Looming above downtown Youngstown, Ohio, the painted sign on the brick wall speaks of a hopeful long-ago time--the early 20th century--when money flowed like water in what was once one of America’s greatest steel towns. “REICHART,” the fading white print reads, celebrating a proud retailer. "Youngstown’s greater store for women. Everything ready to wear. Liberal credit."

    In the 70s, as the U.S. steel industry was in its last sputtering death throes, the old Reichart building had a more ignominious purpose. It was a warehouse for Furnitureland, a low-end purveyor of plaid couches and EZ Boys. For three decades after that, it was vacant, as were many of the abandoned houses in the poverty-stricken streets nearby.

    Then last August the old Reichart building welcomed a new enterprise so promising that it got a shout-out from President Barack Obama in his 2013 State of the Union speech. "Last year," the president said, "we created our first manufacturing innovation institute in Youngstown, Ohio. A once-shuttered warehouse is now a state-of-the art lab where new workers are mastering the 3D printing that has the potential to revolutionize the way we make almost everything."

    The Pinocchio Scale

    The president's language--"lab," "new workers"--conjured to mind images of space-age assembly-line laborers, imbued with the blue-collar work ethic of their steel milling forebears, invoking 21st century high-tech wizardry to create sleek, novel products. Unfortunately, it seems that the president exaggerated a bit, or maybe failed to do his homework. No real magic is happening in the old Reichart building yet, even though the National Additive Manufacturing Innovation Institute (NAMII) is a decidedly hopeful addition to the beleaguered and beloved Midwestern city celebrated in Inc.'s 2010 story, "Semper Youngstown."

    Currently, NAMII has just two staffers. It is a fledgling business incubator aimed at kickstarting the nascent additive manufacturing (AM) industry, which relies on quarter-million-dollar 3D "printers" that can deposit thin layers of metals, plastics, ceramics and the like as digitally directed. The additive industry could in time afford a wide array of manufacturers an economical way to produce small batches of customized goods--replacement knees, for instance, or fighter jet parts. For now, though, the industry and the program is still largely a gamble--and one that has the Department of Defense crossing its fingers. The DOD has kicked in the lion’s share of the $30 million that NAMII, a nonprofit, has received in government funding. Private entities--among them, Northrop Grumman, the defense contractor, and 3D Systems Corporation, a giant in the 3D printing industry--have contributed an additional undisclosed amount, inducing the two guys on NAMII's payroll, directors Ralph Resnick and Ed Morris, to get busy.

    A Bit of Smoke, A Few Mirrors

    When I phoned Resnick and Morris last week, they were both traveling, in the reasonable hope of drumming up enthusiasm for NAMII amid the myriad engineering geeks who've embraced AM at companies like General Electric and research outfits like the Ohio Aerospace Institute. The Institute’s 12,000-square-foot office was empty, awaiting entrepreneurs willing to pay at least $15,000 per annum for use of the 10 state-of-the-art 3D printers in NAMII’s charismatic brick-walled laboratory. I spoke to Scott Deutsch, NAMII’s part-time communication specialist, who was working remotely as he endeavored to backpedal from the presidential fib. "While it's great to get all this attention," Deutsch said gamely, "we need to be truthful: We're in the very early stages of this. There's a lot of work to be done. We need to know what ceramics and plastics can do in an AM environment. We need to figure out the industrial processes, and we need to know what happens when you put AM products in a jet airplane or helicopter or a tank."

    Deutsch’s full-time gig is with the National Center for Defense Manufacturing and Machining, a Blairsville, Pennsylvania non-profit, which secured federal funding for NAMII by beating out several other applicants in a nationwide contest juried by the Air Force Research Laboratory. His group chose to locate NAMII in Youngstown because, he told me, "It's right in the middle of the tech belt running between Cleveland and Pittsburgh, and it has excellent infrastructure for high-tech."

    "While it's great to get all this attention," Deutsch said gamely, "we need to be truthful: We're in the very early stages of this."

    The Youngstown Business Incubator, the focus of Inc.'s 2010 Youngstown story, has launched myriad success stories--among them, Turning Technologies, the developer of audience feedback hardware and software that placed on the Inc. 5000 list for five consecutive years between 2007 and 2011--and it has in the process helped turn a hopeless Rust Belt backwater into a hipster Mecca, a sort of Brooklyn of the heartland. Another company, V&M Star, just completed a $1.1 million renovation of its plant where it will produce seamless steel pipes for use in the natural gas production industry. Aside from that, most of the successes are in high tech. Via680, whose software product, Ving, enables faster, simpler transmission of spreadsheets and movie and photo attachments.

    Pilot Program in a Nascent Industry

    NAMII's first gesture, last November, was to offer award money to entrepreneurs and researchers who could help it to develop a baseline understanding of AM processes. Deutsch explains, "A company might win funding if it said, ‘We're making parts using a particular type of stainless steel but we're seeing a lot of variation from part to part. Now let’s figure out what’s happening to materials in the printing process--and let’s ask, 'How can we regularize the process?' They won’t be doing any mass production, but they will be perfecting the procedures of AM."

    NAMII has not yet decided how many applicants will share the award money, or even how much it will give out. What’s clear is that soon, probably this spring, the old Reichart building will start thrumming as NAMII endeavors to turn Obama’s dream into reality. "Entrepreneurs will come here and share ideas," Deutsch said. "They’ll use our printers and our lab and they’ll have meetings up in open loft on the third floor. We’re going to put Youngstown on the industrial map again."

    Deutsch paused for a moment, and in the awkward silence he seemed to check his exuberance. "But that will be a long time coming," he added finally. "We’ve got a long way to go."

    6 Ways to Be More Compelling

    February 26, 2013 - 1:00pm

    Everyone has to sell something, most often themselves. Most pitches fall flat or offend. Here are six ways to make your offering compelling.

    Selling something? Teaching something? Applying for a job? Trying to motivate people? If you are attempting any of these tasks, you better be compelling or you are simply wasting other people's time and your own energy. What's worse is you might be blowing great opportunities that may never come around again.

    Time and attention is precious in today's information overloaded environment, so it's important to make the most of anytime you might get someone to consider your offering. I didn't want to waste this opportunity with your attention so I teamed up with positioning and branding expert, Mark Levy, who puts the "compel" in compelling.

    Levy makes his living behind the scenes helping companies and experts like Marshall Goldmith, David Meerman Scott, and Simon Sinek position their concepts for maximum attraction. Together Levy and I created this 6-tip insider's guide that will help you compel people to action.

    1. Find Your Contribution

    Levy accurately points out that wanting to be compelling for the sake of being compelling is megalomania. Being compelling needs to be in service of a greater good. How is what you're doing a legitimate contribution to people's lives? When you're clear about why people indisputably need what you offer, the compelling part often takes care of itself. Oh and just because you think people need your offering, doesn't mean they really do need it, or believe they do. Your job is to communicate the need in a way they'll understand and ultimately respond.

    2. Tell the Truth

    Too many people try to cover up lack of substance with abstract language or sexy props like infographics. Just saying you're different, doesn't actually make you different, and lipstick on a pig still presents as a pig. Levy queries his clients on their current promotional material to get at the compelling core of their offering. "What would I see that's truly different?" He asks. "What have clients said that proves it?" Levy and I agree that being truthful is critical to long term success. As Levy says: "Your offering must be based, not on head-spun concepts or wishful thinking, but on real facts and the five senses." People can sense exaggeration and will become cynical and defensive. Besides, as Levy suggests, genuine benefit is always more compelling than fancy packaging.

    3. Surprise and Entertain

    Few offerings are short and simple these days. There is real value in offering complex solutions. But long explanations can quickly grow tiresome and boring. The surest way to get people's attention is with surprise. Provide an Aha! moment, an insight that makes your audience see something familiar, but with fresh eyes. A story they haven't yet heard. A fact they hadn't expected but changes their perspective and adds to your argument. Once you have their attention, make it fun, different, and intriguing. Levy starts by asking: "What do you know that most people don't?" The answer needn't be huge and life changing, just something they don't normally hear or read. People love to learn and will follow those who teach them something valuable. Levy's book Accidental Genius is a great tool for getting those amazing lessons out of your head and into theirs.

    4. Be Intentional

    Compelling communication is naturally strategic. Levy suggests you should decide the purpose of each statement, asking yourself; what do you want your audience to think, feel and do at each line of your pitch? His free e-book on making lists helps you organize your thoughts so you can determine what's important to communicate and how. Once you figure out what to say and how, you must edit, edit, edit. There should be nothing in your pitch that leads the audience away from the desired goal. This will be difficult for those of you who believe that every fact is important and moving. Be brutal and deliberate in your cuts.

    5. Communicate Appropriately

    Thanks to social media, tons of data is now available to learn about your audience. That means the responsibility to speak to them in an appropriate way is now on you. As Levy points out: "Context is key." The expectations of the audience need to be surpassed perhaps even with shock value, but not in a way that offends them, tarnishes your image, and kills your credibility. Study your audience and listen to your own pitch with their perspective in mind.

    6. Rehearse

    Being compelling doesn't just have to do with what you say. It's also in how you say it. Once Levy helps clients position their pitch, he makes them rehearse it aloud dozens of times. If they're confident about what they do and how people benefit from it, that confidence should come through in their voice, and the image they project, as well as in their written materials.

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    Be a Customer Service Hero on Social Media

    February 26, 2013 - 12:45pm

    You don't need a call center or a team of agents to provide the best customer service to your customers. All you need is a Twitter account and a cell phone.

    I have a new hero, and her name is Erin.

    Here's some background first. Our company, Wild Creations, always has business deals under consideration. Because we have partners all over the country and the world, I often rely on SignNow.com to circulate and obtain signatures for important documents. It has been a bastion of reliability over the past few weeks as we moved toward a particular closing this past Friday. As I was circulating a few final documents toward the end of the day, however, I started receiving an error message from SignNow.

    "Error. Can't Save Now. Try again later."

    The problem was, there was no "later." These documents had to be executed by close of business that day. I tried time and time again, much like one looks in the same place over and over again for a lost set of keys, hoping that "this time would be different." Alas, to no avail. So I did what any normal, levelheaded business manager does in a situation like this.

    I panicked and took to Twitter.

    I blasted a tweet to @SignNow expressing my exasperation and frustration. While I attempted to circulate papers for signing the "the old fashioned way" (you remember: fax, print, sign), I started planning the scathing email I was going to send next. Before I could get around to it, however, an amazing thing happened.

    I immediately received a tweet and an email response.

    A SignNow representative, "Erin," had seen my Twitter post and responded right away. This wasn't, however, the ordinary "form email" I would typically expect, but a personal message that brimmed with empathy. A few instructions were bounced back and forth, and unlike most technology issues I have, it turned out this wasn't user error. In a short time, Erin had made everything right, and all the documents were circulated and completed on time.

    Erin was my hero for the day.

    This got me thinking about how Erin had managed to elevate herself to hero status instead of becoming the villain of the situation, as my disgruntled mood would ordinarily have demanded. Her formula was actually very simple:

    • She responded immediately to the problem. By immediate, I mean in just a few minutes.
    • She was personal in her response, demonstrating empathy and a real desire to find a resolution.
    • She found a resolution fast and efficiently, like a 911 operator allocating and dispatching resources.

    It sounds simple, right? That's because it is. What made this experience utterly unique, however, was that it required almost no effort on my part to get to a resolution. No long, detailed emails. No complicated online form letters. No maneuvering through frustrating, automated phone systems.

    Just a tweet.

    Indeed, in an age of social media and instant gratification, customer service has also become incredibly time sensitive. These days, however, it's not challenging for a small business to provide this level of service. It doesn't require a phone center with customer service representatives that are available 24-7. All it takes is a Twitter account and a cell phone.

    Like it or hate it, it is what it is, and the reality is that if you don't provide this level of service to your customers, someone else will.

    So the next time you are thinking about turning on the "Do Not Disturb" setting before you doze off to sleep, remember that the next tweet you might receive may be a plea for help from a valued customer. Technology provides you the cap and tights, so use them and be a hero for your customers.

    Have you had a similar experience? Please share it below. And if you enjoyed the story, please share with the links on the side!

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