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It's not just that shipping is expensive and labor costs are rising. The move away from 'things' is much more basic.
Is the end of traditional manufacturing in sight? Should the last person out of tonight’s late shift turn off the lights for good?
I’d say yes -- albeit somewhat sadly.
There are at least six different reasons that traditional manufacturing is declining. They aren’t the obvious ones you’ve heard so much about -- I’m not talking about labor costs, OSHA regulations, or protesters more concerned about pollution and plant life than production. My thoughts are a little more basic. I refer to them as the 6 D’s:
We lost the race for raw materials years ago, as China and other more foresighted countries scooped up vast quantities of the minerals, compounds and rare earths essential to the production of virtually everything cellular or digital.
In a world of instant gratification and rampant disposability -- where the packaging we discard costs more than the products we consume -- who really cares about making durable goods and long-lasting products? We’re sick of stuff once it’s no longer shiny, and shiny never lasts.
Soon, new 3D printing technologies will encourage the development of even more kinds of disposable products. That’s bad for our production facilities, our population, and our planet.
Frankly, we’d rather not own anything these days. Between high maintenance costs, the devastating depreciation of everything physical, and rapid obsolescence, there’s really no reason to buy anything for the long run. We’ve become users and renters, not owners. Zipcar provides “cars for people who don’t want one.” That says a lot more about our lives today than merely pointing out our transportation preferences.
Our desire for certain things morphs over time, and our appetites change as well. And bragging about your property and your possessions just isn’t cool any more. We’re becoming much less materialistic. In the world of “Mad Men,” four things defined a man: his home, his car, his wife, and his shoes. Just think about how little this formulation has to do with the way we see our lives today, and you’ll appreciate the massive changes coming down the pike.
I wrote recently that kids don’t care about cars, but things are much worse for manufacturers than that. As soon as kids reach the age where they can make their own durable goods purchases, they realize they don’t have any money. Instead of saving, they spend their time sucking down lattes from Starbucks. For Generation Y, everything is about the experience and the adventure and the trip, and not about things. Things are mainly a downer and a drag.
Digital is dictating everything. Everyone realizes that good ideas last much longer and are worth a great deal more than anything you can make with your hands. Unlike even the best physical objects, ideas and some digital goods can be easily shared. Once an idea is widely shared, it’s enhanced and expanded in its scope and its power, not diminished or lessened by broad distribution. That’s how we’ll generate growth in future. By manufacturing new ideas -- not iPads.
Small businesses face a mountain of government regulations. But there are some benefits to working with Washington, too.
Talk about a rude awakening.
In April 2011, federal agents raided several Chuy's Mesquite Broiler restaurants in Arizona and California. It was the culmination of an extensive investigation into alleged tax fraud and illegal hiring practices. The restaurants folded not long after, and the owners could face up to 80 years in prison and millions of dollars in fees.
"It was completely devastating," said Mike Dubreuil, who owns the trademark rights to the restaurant chain.
Chuy's is just one of many companies who have found themselves on the wrong side of government action. Keeping track of--and abiding by--the often mind-bogglingly vast slew of federal, state, and local laws is an everyday endeavor for business owners. It can be hard to keep up. But, the reality is: ignorance of regulations, let alone outright disobedience, can spell disaster.
According to the U.S. Office of Management and Budget, 555 new "significant" regulations--ones with a price tag of more than $100 million in a year--were enacted in 2009 and 2010 alone. In the last 90 days of President Obama's first term, the federal repository for regulation changes posted 6,120 regulations and notices--an average of 68 per day!--which include not only proposed and finalized rules but thousands of pages of jargon that small business owners must monitor, translate, and then implement correctly.
There are rules about taxes, fees, construction, and environment--not to mention everything that comes with hiring employees: health care, safety, equal opportunity, immigration and much, much more.
Recent polls show that most small-business owners rank government regulations as their top obstacle. For the millions of America's small businesses, compliance is not only stressful and time-consuming, it's also costly. According to the most recent Rocket Lawyer Small Business Index, the number one legal cost facing small business is compliance with government regulations.
So why are the companies who serve as the backbone of our economy so over-regulated and over-burdened? It's not clear, but fortunately, there is some good news.
First, the United States still ranks as one of the best countries to start and run a business. Second, statistics show that the pace of new regulations has slowed, as Washington is making strides to alleviate burdens. Having recently rolled out "hundreds of initiatives that will reduce costs, simplify the system, and eliminate redundancy and inconsistency," said Cass Sunstein, administrator of the Office of Information and Regulatory Affairs, the White House estimates these changes will save businesses $10 billion over five years. Thankfully, many of the new reforms focus on small business.
Despite the burdens, businesses can benefit from the government. In addition to the $30 billion in federal funding from the Small Business Jobs Act of 2010, the SBA guarantees $12 billion in loans per year and offers incentives such as tax credits. Grants from government agencies also play a key role in helping companies get off the ground, such as the start-up robot company Barobo, which received more than $500,000 in funding from the National Science Foundation to help develop their lab technology into a commercial product.
How does your business fit in? You probably experience a combination of both burdens and benefits from the government: You have tons of rules to know and follow and, even if you haven't taken advantage yet of government programs and incentives, you know that lots of them exist.
It's our goal with this new column on Inc.com, dubbed K & Main, to help you sort through it all. I hope to help equip you with a firmer understanding of the rules laid out by the government for small business. I also hope to open your eyes to new opportunities as they emerge, as well.
If you're going to advertise on a tablet app, fit your message to the medium.
According to industry analysts, it's only a matter of time before tablet sales exceed PC sales. Since more consumers and businesspeople are using tablets, advertisers and content providers are trying to figure out how to run ads that work well on these devices.
While I sympathize with the struggles to get it right, there are some tablet ads that are so terrible that they're unintentionally hilarious. For example, here's a video showing one of the IBM ads that run intermittently on the app for The Atlantic magazine:
What IBM has clearly done is compress an entire PowerPoint presentation onto a single page, with all the buzzwordsintact. Apparently, IBM marketing believes that somebody might actually slog through this collection of biz-blab and want to learn more.
I easily imagine the inbred, internally-focused meetings at IBM where the decision was made to run this ad. I have not the slightest doubt that the ads reflect IBM's corporate politics in a "hey, we have to be in the ad, too!" way.
To make matters worse, the timing of the display is executed poorly. While there is a "click-through" button (not really the right term for a tablet, but you know what I mean), the ad disappears after several seconds, so that in the unlikely event you were actually reading the ad, it would vanish before you got through the first paragraph.
Awful. Simply awful.
Tablet advertising CAN be done effectively, though, as shown by ads that run on the satirical publication The Onion. Here's the current one:
Two things to note here.
First, the ad's message is very simple: a product you might want is available; the click through gets you to a purchase page. Second, the green progress meter at the top of the ad shows exactly how long the ad will run, without forcing you to do math in your head.
Even though there's no click-through button on the Onion-run ads, they don't seem very intrusive because they only run when you first access the app. Also, the display time is quite short--as befits the brevity of the message.
With this model in mind, how could IBM make a better tablet ad? First, they'd need to winnow down their message to one idea, one sentence, and one image, so that readers can understand at a glance what it's all about.
The landing page for the click-through would then get the reader involved in some way, perhaps with a simple question that, when answered, branches the reader to appropriate details, hopefully without all the off-putting jargon.
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A new study shows that customers who interact with retailers through social media buy more than other consumers.
Customers who follow their favorite brands on Facebook don’t just vote with their likes—they also open their wallets.
Consumers who interact with a retailer through Facebook visit those stores about 5 percent more often and contribute 5.6 percent more revenue than other customers, according to a study conducted by researchers at Aalto University in Finland, Texas A&M, and University at Buffalo.
In recent years there's been plenty of advice about how to grab more customers through Facebook, Twitter, and blog platforms. But few previous studies of this ilk have provided hard numbers.
“I think we’re the first ones to say [social media] may be good, but how good is it?” said Ram Bezawada, PhD, Assistant Professor of Marketing at UB who worked on the study. “We were able to obtain collaboration from a leading retailer who was willing to help us analyze store transaction data, so we were able to connect users with purchases.”
Bezawada said that previous studies have focused mainly on social media users’ behavior without making a discernable connection to sales. He described the participating company, which remained confidential, as a regional specialty retailer in upstate New York.
The study demonstrated that retailers who’ve mastered the social media hook have positive, easy-to-use interfaces, send regular updates, and feature messages customized for specific groups of consumers.
In particular, high-end premium products introduced through Facebook content received a measurable boost in customer purchases, both online and in-store.
Bezawada believes the measurable results will prove a powerful resource for retailers attempting to strike a balance between traditional and social media marketing.
“Companies can actually plan their marketing budgets based on what kind of response they get,” said Bezawada. “If sales increase by a certain amount they can allocate more dollars to social media, and their budgets are optimized.”
Dave Kerpen, CEO of Likeable Local, explains exactly how to navigate Facebook's privacy settings.
00:11 Dave Kerpen: Oh, Facebook privacy settings, a lot has been said about how to keep safe and how to avoid disaster with Facebook privacy settings. Let's take a look at exactly how to do this right. So, in the upper right-hand corner, you can click on that privacy icon and you can see three main categories: "Who can see my stuff?", "Who can contact me?", and "How do I stop someone from bothering me?" If you click on "Who can see my stuff?" you can set up various filters for the public, or just friends, or certain lists of particular groups of friends to see your posts. You can also see your previous posts as well as how other people view your timeline.
00:56 Kerpen: If you click on "Who can contact me?" you can make it easy for people to contact you or a lot harder for people to contact you. You can allow everyone to friend request you or you can allow only certain people to friend request you. And, of course, if you click on "How do I stop someone from bothering me?" you can actually block people so that they'll never even see you exist on Facebook. I'll just block my friend, Andrew, because we just had a fight. Just kidding.
01:23 Kerpen: Now, if you click on "See more settings" you can see the entire list of all possible privacy settings and get into all the details, privacy, timeline and tagging, blocking and notifications. But I think the most important thing to look at when you're thinking about privacy settings is each of your individual posts. You can actually set privacy settings on every post.
01:49 Kerpen: So, if you're out partying, you might not want to share that post with your clients. So you might want to set a group of just friends or just close friends to see that. On the other hand, if you're sharing a link about an article that you want for your clients. "Here's an amazing article about the tax code." If you're an accountant, you might not want your friends to see that. So, you might want to set up a list for just business associates to see that so that you don't bore your friends and family with your business.
02:30 Kerpen: As long as you manage Facebook privacy settings carefully, you can do a great job of keeping in contact with both your friends and family as well as your business associates.
John Mackey, Whole Foods CEO, talks about his company's salary cap, and what that means for employee culture.
On January 1, 2014, the Affordable Care Act will require businesses with 50 or more full-time employees to offer health insurance. What if you have fewer than that?
The third anniversary of the Affordable Care Act, also known as Obamacare, came and went last week without much fanfare. But think about it: health care reform has been a reality for three years now. And it's about to become even more real for every business owner in nine months.
That's because on January 1, 2014 all individuals will be required to have health insurance. Those who don't will pay a penalty. Or fine. Or tax. Or whatever it's being called. By 2019 that penalty will be $695 or 2.5 percent of an individual's income, whichever is higher. And if you run a business with more than 50 full-time equivalent employees (a calculation based on full and part-timers) you also must either offer qualified health insurance to your full-time employees or pay a penalty. Or fine. Or tax. Or whatever that's called. That penalty is $2,000 per employee by 2019, and you can exclude the first 30 employees from the calculation.
A lot has been said about how this affects small business. And it does affect all businesses. But in reality if you have fewer than 50 full-time equivalent employees, you're exempt from the law, plus you get a tax credit (if you're eligible). So don't sweat it too much.
But what if you do the math and you find that you're one of the "lucky" people running a business with more than 50 full-time equivalent employees? Do you emigrate to Canada? Close up shop? Of course not. The Canadians have their own worries and the last thing you want to do is be associated with a country that produced Justin Bieber. And you're not going to shut down your business either. Nice try.
So what are your options? It's not as complicated as you think. In fact, you really only have three.
1. The Dude Option
You are the dude. You are laid back. You will stay the course. You will keep the same health insurance plans that you have in place now and make sure they're covering your full-time employees (those working more than 30 hours a week). Like most plans, it will likely qualify under the Affordable Care Act. It will probably be a "bronze" plan, which is the cheapest acceptable plan allowed by the law. The plan will have its own deductibles and co-insurance, cover 60 percent of the costs of health care for your employees (you won't have to make this calculation, don't worry), and come with a maximum out-of-pocket amount. You will also have to make sure that your employees are not spending more than 9.5 percent of their household income on health care. (Good luck with that. But don't worry, there are "safe harbor" rules to help you disclose this in case you don't know.)
If you're super generous you may offer a "silver," "gold," or "platinum" plan. These have the same benefits but cost your employees less (and you more). Either way, you'll likely have to help your employees who find themselves below four times the poverty level get federal assistance. You'll chill out, cross your fingers, and hope that the premiums don't rise any more than what you've experienced in the past. But it's cool. You'll go with the flow.
2. The Mr. Burns Example
You are a ruthless, vindictive, petty, selfish scoundrel (like the boss on The Simpsons) who cares nothing for his employees and chooses instead to hole yourself up in your castle of a home except when you emerge to fire someone eating donuts instead of working. You choose the nuclear option: you get rid of your health insurance plans altogether and feed your employees to the state health "exchanges," where they must buy their own insurance. You do not care about offering competitive compensation packages. You are purely bottom-line profit driven.
Sounds harsh. But boy is it enticing. The savings could be substantial. Say you have 60 full-time people working more than 30 hours a week. I bet your current insurance plan is probably costing you somewhere around $400,000 to $500,000 per year, based on the studies I've seen. If you take the Mr. Burns approach and decide to just pay the penalties, your annual cost by 2019 would be reduced to $60,000 (that's 60 employees less the 30 employee exemption times $2,000 per employee). No, I am not kidding. Wow. There will be more than a few business owners that will go this route and pocket the difference. Pretty attractive isn't it? Smithers, where are you?
3. The Godfather Move
As Emilio Barzini once said: "...after all, we are not communists." Yes. We are businessmen. And this is business. And many companies I know, both big and small, are choosing a more business approach to deal with the Affordable Care Act.
Consider this: if you're the guy running that 60 person company and you choose not to offer health insurance then you pay the $60,000 penalty. And then (at least for now) the government doesn't really care what you do. So instead of throwing your employees out in the street to buy insurance on their own, you offer them an allowance to help them pay for their health insurance. An extra few bucks in their paycheck. Call it a bonus if you want and offer that allowance to whomever you want. The government (at least for now) won't care about that either.
The Godfather option is truly an offer they can't refuse. If you do the math right then the allowance your people receives should result in them not paying any more for health insurance than they were before (make sure you consider taxes too, because this is extra income to them). And maybe, just maybe, when you combine the cost of these allowances with the penalties you're paying, your final expense is no different than it was before either. Aside from the paperwork that will always be required, you've essentially removed yourself from dealing with the legislation. Your employees theoretically have more choices with the health exchanges. Your internal administrative time dealing with your benefit plans goes away.
It's not personal; it's strictly business. I've talked to many benefits consultants and no one could come up with a reason why this allowance approach wouldn't work. It would take some calculating. And, like any form of compensation, you have to come up with a policy for how you offer and administer it. Companies like Sears and Darden Restaurants are reportedly considering "defined contribution" plans to accomplish something very similar. But I'm not convinced that a small business needs to formally set up a defined contribution plan. (Can't this just be done through a bump in salary, or a bonus?) Talk to your benefits consultant. Just make sure he's not like Fredo.
Are you the Dude, Mr. Burns, or Godfather? Take your pick. You only have these three options. But choose now. Because you can't make your decision in December. Your employees need to know. And smart business people, whether stoners, cartoon characters, or mafia dons, are always thinking ahead.
The most successful businesses define what sets them apart--almost to the point of obsession.
I wrote a few weeks ago about a banner above our lunchroom. It doesn’t have anything to do with lunch, but it does describe our “special sauce.”
The sign says “Quality Engineered Quick.”
It's a little shorthand phrase I came up with to communicate to everyone--our employees, our clients--the traits that make us unique. You should have one, too. Every company has to figure out the niche they should be exploiting, the belief, attitude, or trait that sets the business apart from its competition.
In our case, “QEQ” encapsulated our task when we jumped a decade ago from making bagel baskets, a commodity product, to more sophisticated wire and sheet metal containers to carry parts for aerospace, automotive and other precision industries. We even trademarked the phrase. But it was more than a marketing pitch. It was important as an internal reminder for our team: Your focus has to be relentlessly on that differentiator.
When McDonald’s popularized the term “special sauce” for its Big Mac some 40 years ago, the hamburger chain didn’t reveal what was in the sauce. No matter. That bit of lore--it wasn’t ketchup and mustard, like everyone else--helped differentiate their offer.
Similarly, the companies that regularly top the “most admired” lists often aren’t inventors of a business category. Instead, they invented a better way of doing their category: Starbucks, Southwest Airlines, FedEx, Whole Foods, Caterpillar, Toyota, the list goes on. For Steve Jobs and Apple, the design ethic became that differentiation; the products were more intuitive and better designed.
Many companies simply try to be the lowest priced. But I contend that that’s not enough--that companies still need a “special sauce.” What are they going to offer their client that blows away everyone else? They should put all their energy into improving what that something is.
Look to Cupcakes
Once you figure it out, your focus has to be relentless on those things you say you are. You must define what makes you stand out from your competitors. It can’t just be a slogan. It must be your singular devotion. Invest all your resources to exploit whatever that is. Cheaper and cheaper is not the route to a profitable company.
Take an example, which is far from my usual world of metal manufacturing. About an hour drive from our factory, people line up down the block at a bake shop called Georgetown Cupcake--to spend three dollars for a cupcake. When people are willing to line up for 20 minutes to pay three dollars for a cupcake, you know that the company has successfully defined what makes them different, and also must be delivering on that promise.
They reinvented cupcakes. We invented steel wire baskets. Go reinvent something.
Here are three simple steps to see if there is a market for your new product or service.
So you've come up with the next big idea--in this case, an eco-friendly rubber chicken. Before you walk into your boss's office and tell him or her what they can do with this job, you'll want to be sure there is a market for your chicken. Can you competitively price your premier poultry? How will you position your bird to be the head hen, so to speak?
Here are three simple steps for every aspiring entrepreneur to quickly ascertain whether your chickens will come home to roost.1. Google AdWords
You want to find out if there is a market for your product. Look no further than a simple search on Google. By searching for keywords (i.e., words that you would use to locate your goods or services online) you can instantly be informed as to whether or not potential competitors are paying to have their ads appear in Google's sponsored results.
Why is this relevant? Because it instantly tells you whether there is a market for the product you are researching. In short, if someone is paying money to have an ad on Google for a product you know right away there is a market for it. How big is the market? Well, that is another question. But generally speaking the more ads that show up for a given keyword placed by different competitors the larger the market is.
This does not mean that if no one is bidding on the keywords you select there is not a market for your product. Perhaps your invention has never been conceptualized or is unknown to the general public. If this is the case, other research may need to be used.2. Price Points
The next market research you must consider are the price points at which your potential competitors are offering their goods or services. Only by understanding what they charge can you determine whether you will be able to be competitive in the industry in which you seek to gain entry. Again, Google is a great place to start.
When you conduct your keyword research through Google's sponsored listings dig deeper into your results. Go to the websites of those who are offering similar goods or services and see what their price points are. Can you compete at these prices? Can you beat these prices? Although price point is only one consideration in a consumer's decision to purchase goods or services, it is one of the most important factors.3. Distinguishing Your Goods or Services
Finally, now that you are two-steps into your simple market research, always consider one final thought: Now that you know your competitors and their price points how will you win the battle for business? What feature, function, or characteristic of your goods or services will attract customers over and beyond similar offerings by others?
Perhaps you will compete on price by offering consumers a new low-cost alternative to that which is already on the market. Perhaps you will compete by offering superior customer service or a better product. Whatever the point of distinction, you must have one to enter any marketplace so that you can easily distinguish your goods and services apart from your prospective competitors. Otherwise your business, and your product, is just another face in the crowd.
Sure, you're the boss, but who's the best boss ever? The results of our March Madness Best Bosses Brackets.If You Had to Work For Someone, Who Would It Be?
Who’s the absolute best boss you could have – if, for some crazy reason, you couldn’t work for yourself?
Richard Branson. By just three votes.
To win your vote as best boss, Branson had to defeat not just billionaire investor Warren Buffett, but one of the most notable entrepreneurs of our time: Steve Jobs. And Jobs certainly would have much to teach even the most accomplished investor. Let’s not forget that Jobs not only co-founded Apple, but in 1985, was summarily booted out of the company. He went on to co-found Pixar Animation Studios, before being called back to Apple and engineering one of the greatest turnarounds in corporate history.
Working for Richard Branson, though, would have to be a lot more fun. You wouldn’t have to worry about being fired if you ran into your boss in an elevator, for one thing. Branson’s also the guy with a private island, several records in powerboat racing, and a talent for publicity stunts. Not to mention about 400 different brands under the Virgin umbrella, with a combined market cap of more than $13 billion.A lot of Inc.com voters made that call, as it turned out. But only two made enough other right calls along the way to build up the total winning score of 54 points. Congratulations, winners. We’ll be getting in touch to send you your complimentary tickets the Inc. Leadership Forum in June..
Login or Signup to complete your bracket!Meet the Bosses Mom She is your mother. Dad He is your father. Jack Welch CEO, GE. He's not called Neutron Jack for nothing. But plenty of talented leadership came out of GE under his watch. Warren Buffett Investor. The Oracle of Omaha's down-home, folksy demeanor contrasts nicely with Berkshire Hathaway's $155,000 stock price and $256 billion market capitalization. Meg Whitman CEO, Hewlett Packard. Whitman led eBay to glory, ran for governor of California, and is now trying to save the embattled HP. Martha Stewart Founder, Martha Stewart Living Omnimedia. Housekeeping was boring before Stewart came along. Then it became a glamorous, upscale $273 million enterprise. Jeff Bezos Founder, Amazon.com. From a simple start selling books online, Bezos is getting ever closer to living up to his promise to bring us the world. Tony Hsieh Founder, Zappos. Yes, Hsieh continues to sell lots of shoes under the Amazon umbrella, but the company is really known for its heroic customer service. Howard Schultz Co-founder, Starbucks. Built a $40 billion enterprise based largely on the premise that it's okay to spend $3 for a cup of coffee. Hillary Clinton Former Secretary of State. Clinton's been described repeatedly as an 'enlightened' boss, but we can't think of anyone who works harder. Russell Simmons Founder, Def Jam. Simmons has expanded his business from music to clothing, and is now thought to be the third-richest figure in hip-hop. Oprah Winfrey Founder, CEO, chair, Harpo Productions. This media personality has been ranked both as the richest African American and the most influential woman in the world. Bobbi Brown Founder, Bobbi Brown. A stylist who couldn't find the makeup she wanted to wear, she launched her own line. It's now in nearly 1,000 stores and more than 50 countries. Tim Cook CEO, Apple. Tim Cook is a management guy, not an entrepreneur. On the other hand, his employees probably don't have to worry about getting fired in the elevator. Richard Branson Founder, Virgin Group. Remember when Virgin was only a music company? We don't either. There are now more than 400 brands under the Virgin umbrella. Bill Gates Co-founder, Microsoft. He changed the nature of information and collaboration. Then, as a philanthropist, he took that game-changing thinking to a different sphere. Mark Zuckerberg Co-founder, Facebook. Facebook, at first only open to college students, has almost become an alternative Web in itself. Its IPO could be the largest U.S. offering ever. Sheryl Sandberg COO, Facebook. Sandberg brings management cred to Zuckerberg's geek-driven empire. Her new book, Lean In, exhorts women to, essentially, work harder. John Mackey Co-founder and CEO, Whole Foods. Aside from his entrepreneurial success, the Whole Foods co-founder and CEO is known for his outspoken manner-in his advocacy of both free markets and organic food. Herb Kelleher Founder, Southwest Airlines. Kelleher made flying fun again, and continues to give it his best shot, with cheap fares and unassigned seats. Barack Obama President. Work for our 44th President, and you'd get a front-row view of history and peerless networking opportunities. The flip side: Never a day off. Abraham Lincoln Widely regarded as our greatest President -after all, how many of our leaders got us through a civil war, freed the slaves, and went on to win an Oscar? Katharine Graham Publisher, Washington Post. Graham ran her family's newspaper for two decades, including the Watergate era. Her own memoir, Personal History, won a Pulitzer Prize. Kathryn Bigelow Film director. The director of Hurt Locker and Zero Dark Thirty has been breaking new ground in Hollywood with her distinctive documentary style. Albus Dumbledore Headmaster, Hogwarts School of Witchcraft and Wizardry. Notable not only for his efforts to defeat Lord Voldemort, but also for his unflinching defense of his employees, even at his own personal expense Caterina Fake Co-founder, flickr and Hunch. Fake is known for her off-the-cuff work and management style. Steve Jobs Co-founder and CEO, Apple and Pixar. The charismatic Jobs was widely regarded as brilliant, visionary -- and very, very prickly. Capt. "Sully" Sullenberger Nothing says leadership like landing an airplane in the Hudson river. Except, of course, doing it with no loss of life. Marissa Mayer CEO, Yahoo. First, she was Google's It Girl. At Yahoo, she's the CEO, the eradicator of work-from-home days and, generally, the haver-of-it-all. And Yahoo stock is up. Magic Johnson Point guard, forward, AIDS activist, and entrepreneur. As an entrepreneur, he's probably best known for his ongoing efforts to reinvigorate Harlem. Arianna Huffington Founder, Huffington Post. Huffington brought a new business model to online news and content generation, and is regularly cited on "most influential" lists. Elon Musk Co-founder, PayPal. Arguably best known for starting PayPal, Musk is also the entrepreneur behind Tesla Motors and SpaceX.To fill out Inc's Best Bosses brackets and potentially win valuable prizes, follow the link to Inc's Best Bosses Tournament homepage. Register with your name and email, and fill out the brackets just as you did your basketball brackets at the office, advancing the more impressive boss in each matchup to the next round. The voter whose picks most closely match the consensus picks of fellow gamers will win two free tickets to Inc's Leadership Conference on June 10th through the 12th in Carlsbad, Calif.
Your goal in filling out the brackets in Inc.'s Best Bosses of All Tournament is to anticipate the voting of all participants in the contest and to map your choices to that. To paraphrase John Maynard Keynes' famous comment about the stock market, your job is not necessarily to pick the best boss but the one you think most judges will think is the greatest. Inc. will announce winners for each round. Note that you can continue to enter your brackets after that, although you won’t get credit for winners already announced. (Because the scoring is weighted to later entries, it’s possible, but not easy, to win even with a late entry.) If more than one entrant matches the consensus, the winner will be selected by lottery. The winner will be announced on April 8th, and we’ll notify you by email if it's you. (If you don't hear from us, you didn't win.) Good luck and enter early for the best chance to win!
How'd Richard Branson, Bill Gates, and Warren Buffett do so well? They lived according to these seven strategic, wealth-building principles.
My new book Business Brilliant is based on survey research that found seven key principles of work and wealth-building that super-successful people practice but ordinary people avoid.
Here are stories of seven of the most successful--and wealthiest--people in the world to illustrate each of those seven principles.
1. Guy Laliberte, Cirque du Soleil Founder: Do What You Love, But Follow the Money
Guy Laliberte was a high-school-educated circus clown from Quebec when he led a collective of performers to start Cirque du Soleil. Despite government subsidies, indulgent sponsors, and Laliberte's hard work, the circus barely survived for years while evolving its distinctive style. Laliberte's master stroke was to switch Cirque's status from non-profit to for-profit (with himself as one-third owner). Today he's worth $1.8 billion. Even clowning can be a smart career move, as long you're the owner.
2. Suze Orman, Financial Advisor: Save Less, Earn More
Suze Orman has made a fortune telling people to grow their wealth through frugality, despite having no personal experience in the matter. When Suze was in her mid-30s, she lived high, but was mired in debt. She didn't cut back on luxuries; instead she worked her way out. She did what she loved, followed financial opportunity, and today she is in a situation to spend $300,000 a year traveling the world on private jets. In the end, your time is much better spent seizing opportunities than pinching pennies.
3. Bill Gates, Microsoft Founder: Imitate, Don't Innovate
Bill Gates built one of the world's largest fortunes--$67 billion, according to Forbes--by licensing operating system software to IBM. In actuality, that software was wholly adapted from someone else's code. Gates' Microsoft lacked the innovative capacity to write it from scratch, so it dressed up some code from another company's software, which Microsoft had bought for $25,000. When Gates delivered the second-hand software to IBM, it was on time, but it was so buggy that IBM engineers had to rewrite it completely. Thirty-three years later, no one remembers or cares. Innovation is seldom as important as timely execution of an adequate imitation.
4. Warren Buffett, Investor: Know-How Is Good, Know-Who Is Better
Warren Buffett arrived at his savvy investment philosophy when he was very young, but his know-how was nearly worthless because he personally lacked enough capital to make large market moves. Buffett didn't get rich until he overcame his shyness, recruited members for his investment partnerships, and led those partners in squeezing stock performance out of corporate managers. Case in point: No one gets rich alone.
5. Adam McKay, Hollywood Producer/Director: Win-Win Is a Sure Way to Lose
Adam McKay is one of the most successful producer/directors in Hollywood. He's teamed up with Will Ferrell on Talledega Nights, Step Brothers, The Other Guys, and Anchorman. But his movie-making career might never have happened if he hadn't negotiated a sweetheart deal to produce film shorts while on the writing staff at Saturday Night Live. The secret to landing the deal? He didn't try to play a so-called win-win negotiating game. Instead, he told SNL's top dog Lorne Michaels that having his own film crew was his price for staying with the show, and he was ready to walk away without it. Michaels paid happily.
6. Richard Branson, Virgin Founder: Spread the Work, Spread the Wealth
Sir Richard Branson suffers from severe dyslexia, but he's come to regard it as his greatest strength. Branson runs his Virgin Group as a venture capital fund that places bets on entrepreneurs with bright ideas that fit the Virgin brand strategy. He's never tempted to micro-manage any of the dozens of Virgin companies because he can't. "If I could read a balance sheet," he once said, "I wouldn't have done anything in life." In sum, work your strengths and get others to work theirs.
7. Steve Jobs, Apple Founder: Nothing Succeeds Like Failure
Steve Jobs had a vision, back in the 1980s, for a three-dimensional imaging computer that would revolutionize the defense, oil, and medical industries. He was wrong about it, and he lost millions of his own dollars before shutting down production of the $125,000 Pixar Imaging Computer in 1991. At the time, Pixar's only profitable unit was a tiny team of animators using Pixar software to make computer-generated TV commercials--a team that would later form the Pixar movie studio that made Toy Story. And when Jobs died in 2011, more than 70 percent of his $8.3 billion fortune came from his stake in Pixar Studios, in an industry he never had any intention of entering.
Maximize your online conversions by using your traffic profile as a strategic guide.
Putting the right call-to-action (CTA) in the right place can make all the difference in website conversions. The problem is that many digital marketers choose web CTAs based upon internal needs, industry standards, or other reasons that are largely irrelevant to optimizing for web conversions. When optimizing for online conversions, it is best to maximize what you have to work with rather than use a strategy that is based on other needs. Organizations that work with what they are given will almost always maximize web conversions.Your Traffic Profile
Your organization's web traffic profile is the mix of sources that send visitors to your website. Common sources include:
- Search Engines
- Earned Media
- Social Media
- Paid Advertising
Any digital marketing team worth their salt knows the exact mix and percentages of the online sources that make up their traffic profile. Many marketing teams optimize for this mix, but many others fall into the trap of pleasing management, following competitors, or adhering to industry trends.Traffic Profile Strategies
Organizations should prioritize CTAs based on the unique mix of traffic sources. Here are a few ways that your organization can optimize for top traffic sources.1. Search Engines
Search traffic can be very general or specific depending on the keyword mix that is sending traffic.
Branded keywords: These users already know about your brand. This means that you can place CTAs that are in the middle of the funnel (MOFU), which is more specific about your brand's offer and company.
Non-branded keywords: These users are most likely to be new to your brand, or are considering your company among other choices. Place CTAs that are closer to the top of the funnel (TOFU), as these offers are more general about your industry. You can't expect to win using bottom of the funnel (BOFU) CTAs like free analysis or buy-now offers with users that don't already know about your brand.2. Referral Traffic
It depends on the source, but referrals are typically MOFU offers since referrals for most organizations come from partner or industry websites. Partner referrals come with a high level of trust and these visitors are most likely already familiar with your brand. Therefore, MOFU offers should be considered.3. Earned Media
Robust earned media campaigns send referral traffic from trusted industry news websites, social media and search. These include visitors that click on links in news articles, social media, or the blogosphere. Even though these visitors are familiar with your industry, it is best to keep a TOFU focus on offers until these visitors spend more time on your website learning about your brand. However, earned media placements on partner websites could be well served by MOFU offers since these visitors are more familiar with your brand and come with a high level of trust.4. Social Media
It depends on the source, but typically social media visitors have already been introduced to your brand. Visitors from 'owned' social media properties, like your brand's Twitter account, definitely deserve MOFU content. However, visitors from other social media accounts not owned by your brand may not know about your brand. Therefore, this traffic should be approached with TOFU content.5. E-mail
Email offers should have their own CTAs optimized for each user relative to their lead score, so it is pretty much impossible to assign a broad strategy here. If you found this last sentence as confusing as a Chinese newspaper, then you are probably using an antiquated email marketing strategy that blasts your entire email list with the same offer. If that is the case, then I suggest you adopt a marketing automation strategy immediately.6. Paid Advertising
Considering the high cost and low margins from paid ads, most organizations only pay for keywords or ads that convert directly to sales. Therefore, it is absolutely crucial to use BOFU offers with most paid ads. Using TOFU or MOFU content here would undermine the ability to provide a quick sale from paid advertising.Putting It All Together
This strategy is not a site-wide effort. At least the top 10 performing pages on your website, as well as all landing pages, should have a specific strategy based on the relative amounts of each traffic source that is unique to that page. It is also important to note that the strategies above are simply starting points. Any great conversion strategy constantly tests and measures various offers. By measuring your traffic profile and prioritizing CTAs, your organization can get a head start on increasing website conversions.
Hundreds of thousands of gay couples could soon hear wedding bells. Here are five ways for entrepreneurs to capitalize on them.
Before long, given the cases before the U.S. Supreme Court, we'll likely have legal gay marriage across the entire United States. Besides gay people who want to tie the knot, who will win as a result?
First, a 60-second legal lesson. There are two cases before the U.S. Supreme Court. The first is a challenge to Proposition 8 in California; the second challenges the federal Defense of Marriage Act (DOMA), which defines marriage as being only between one man and one woman.
As we saw in the Obamacare decision last year, it can be dangerous to try to predict the court's moves. But suffice it to say (lawyers love to say that), it's a pretty safe bet that the court will at least say that states can recognize gay marriage, and might well say that they have to. (A lot of it is likely to come down to Justice Anthony Kennedy.)
A sudden shift in the cultural context like this--and make no mistake, this will be huge--always brings with it new opportunities. Here are five of them. The Supreme Court will likely rule in June, so it's time to start planning.
(By the way, I'm sure there are a lot of others I haven't thought of. Let me know if you think I've missed some big ideas.)
1. The Wedding Industry.
Is it okay for me to say that gay people throw amazing parties? Even so, I was surprised to find such a gigantic estimate of the overall effect of gay marriage on the wedding industry: $9.5 billion!
As it happens, I'm in the market for a lot of wedding-related services myself these days, and I can tell you firsthand that the moneymaking opportunities here are endless. From engagement rings to wedding cakes, from invitations to bands and DJs (and don't forget the gifts!), there are few days for which people will open their wallets like a wedding day.
U.S. laws on adoption by gay couples are not consistent, but if the Supreme Court acts on gay marriage, it's likely to have a significant legal impact on laws banning gay men and women from adopting children as well. Even without further legal changes, more married couples likely means more couples who want children.
Given that historically some organizations providing adoption services have exited the business once they were no longer allowed to exclude gay parents, the opportunities for new players in the field might be even greater. For that matter, it likely would mean more opportunities for surrogacy and artificial insemination.
Good news for lawyers! Sadly, where there are marriages, there are likely to be divorces. Even the couple who sued Massachusetts successfully for the right to be married eventually split up.
Currently, divorce can be a complicated mess for gay couples, depending on where they live, and that can be a boon for lawyers who specialize in these kinds of complex cases. But soon, there are likely to be a lot more comparatively less-complicated divorces. As one of my old law school professors once said, "When somebody else's marriage ends, an [entrepreneurial] opportunity begins."
4. Government spending.
More marriage means more tax revenue, and when there is more tax revenue, there is almost certain to be more government spending. Let's focus on just one kind of tax increase to make the point: the federal income tax marriage penalty, in which a married couple pays more income tax together than they would on the same income divided equally if they were not married.
Numbers vary here, but the best estimates I can find put the average marriage penalty around $2,000. Let's suppose that half of same-sex couples who are living together get married, since that's what happened in Massachusetts when same-sex marriage was legalized there. That would mean 300,000 more married couples, and thus at least a $6 billion marriage penalty tax boom.
5. Socially conservative direct marketing.
Polls suggest that support for gay marriage has become overwhelming, but the opposing minority in the United States can be very vocal. There's money to be made there. Subscribe to one conservative email list, and you might soon find that you're subscribed to quite a few, urging the like-minded to contribute just a few more dollars each week to defend against the liberal horde.
Take this guy, for example, a former Navy chaplain who made headlines a few years ago for his protests against a military religious policy. These days, he sends "blast faxes" opposing gay marriage to political leaders for his readers, at between $19 and $159 a batch. Now that's an entrepreneur!
What are the biggest resume red flags? Whether you're applying or hiring, avoid these three things.
Most resumes are not terrible-- but they’re nothing special either. Here are three resume faux pas to avoid (whether you're applying or hiring).
1. No results. Jobseekers are often diligent about explaining their responsibilities in great detail, says Rajat Taneja, executive vice president and chief technology officer at Electronic Art, in a recent LinkedIn post, but resumes should highlight results.
The more quantitative, the easier for a screener or hiring manager to understand and select them for the next discussion. Numbers and metrics speak louder than words. Vague generalities are the kryptonite of a resume.
2. An unexplained gap. If a resume doesn't explain a three-year absence from the workforce or multiple career paths, consider it a red flag.
“Candidates should put on the hiring manager’s hat and look at their own resumes with this filter and then proactively address any of these issues in a clear and unambiguous way,” Taneja wrote.
3. Sloppy formatting. With all of today’s tools to artfully arrange a document, not to mention spellcheck, a resume should be thoughtfully constructed and meticulously scrubbed for errors.
"It's clear that some people can’t—or won’t—proofread,” wrote Leslie Ayres, aka The Job Search Guru, in a recent blog post. “Others tell me they can’t remember the rules, and some must be in a heck of a hurry to miss that glaring typo in the first line. Whatever the reason, the result’s the same: they lose out on the interview."
The young Corcoran never thought she could succeed running her own business. Then her ex-husband uttered a life-changing taunt.
Two very different retailers grabbed headlines by asking customers to pay just to look around. Would this work for you?
Two retailers made headlines this week because they started charging consumers a fee for browsing, reported Salon.com.
The first example: Australian gluten-free producer Celiac Supplies charges 5 Australian dollars for browsing, deducted at the time of purchase. And in China, a recently-opened Vera Wang bridal boutique charges 3,000 yuan ($482 USD) for 90-minute browsing appointments that must be booked several weeks in advance.
So should American retailers expect this strategy to come stateside?
“I don’t think this is something we’re going to see in a meaningful way, domestically,” said Alison Jatlow Levy, a retail strategist at consulting firm Kurt Salmon. “At the end of the day, the customer is the center of the retail universe. You can’t risk losing a customer because once you do, you won’t be able to get them back.”
As for the two examples outlined in the Salon story, Levy said one works, and one does not.
The Australian food retailer--more of a mom-and-pop type shop-- experienced a big consumer backlash, thanks to social media. (In fact, the Salon item was prompted by a pretty brutal Reddit thread.) “Unfortunately it’s probably smaller mom-and-pop or boutique businesses that feel the pressure, and they’re going to start feeling distrust from the customer," added Levy.
Conversely, Vera Wang’s decision to introduce the pay-to-browse strategy in China, a market where luxury goods are a huge commodity and counterfeiting a major challenge, is an example of the strategy's best case scenario, according to Levy. She said it exploits exisiting supply and demand—a set number of appointments, a finite amount of store space, high demand for Wang's designs—and is not uncommon among service-oriented, experience-focused retailers.
What do you think?
Entrepreneurs have different risk profiles than everyone else -- and that's especially true when it comes to investing.
As an entrepreneur, your brain is hardwired to take risks. To start your own business is to defy logic: You step out of the stability and security of a corporate environment, complete with established accounts, office support, an HR team, and many other resources, to take on the responsibility of wearing all of these hats, all at once. This is not for the faint-hearted, and requires you to take a huge amount of risk.
It also affects how you should be investing, both in the short and the long term. And most entrepreneurs fail to take into account the very unstable nature of their work when looking at their asset allocation. Even though they think they’re looking at their asset allocation holistically, they’re only looking at their bank and brokerage accounts. And they should be looking equally closely at their source of income.
Think of it this way: Even if your business is stable and seems to be growing nicely, on a very real level, you never quite know what’s going to happen next. Being an entrepreneur is analogous to owning a concentrated position in one stock - an inherently risky move.
Contrast your situation to that of a tenured professor, who has long-term job security that’s as stable as they come. Or a government employee, who has a guaranteed future income stream in the form of pension. These jobs are analogous to bonds, the “sleep easy asset class,” because they have an embedded income stream of stability, and thus carry far less career risk.
Someone with a great deal of job and income security can afford to take on greater investment risk. Entrepreneurs may want to offset some of their risk - especially in the early years of launching a company-- by placing their assets in less volatile holdings, such as fixed income.
Why? If both your entrepreneurial endeavors and your portfolio tilt toward risk, overall, you’re unbalanced. The ideal asset allocation should incorporate a holistic perspective of you as an individual--your career included. In planning your portfolio, you should always seek balance: A healthy portfolio is a well-diversified portfolio. When your very job is concentrated risk, this must factor into your overall investment strategy.
You also want to make sure you don’t double down on risk by investing in your own industry. I know a mortgage trader who invested in real estate and mortgage bonds, and leveraged his personal wealth into buying a home-;just before the bubble burst. This trader was hit hard in terms of his career, his assets, and his portfolio, all at the same time. For entrepreneurs who already invest in higher-risk asset classes, this all-too-common practice unbalances your portfolio even further. Having your holdings and your career centered in one area increases your exposure to concentrated risk.
Familiarity doesn’t give you an edge in selecting more profitable stocks-;one often winds up with too much concentrated risk and no real reward. Across your asset allocation--portfolio and career--you should always shoot for a balanced distribution of risk. Ask yourself, are you a stock or a bond? And invest with that in mind.
Most advice for aspiring business owners on whether they're cut out for entrepreneurship is nonsense, claims one founder, who offers alternative guidance.
Just about everyone dreams of being an entrepreneur at some point, and why not? The attractions are obvious – the independence, flexibility, passion and pride of starting your own business sound great.
But, of course, not everyone is cut out for entrepreneurship. Some lack the dedication, others the work ethic, still others the tolerance for risk or financial insecurity.
So if you have entrepreneurial dreams but are unsure about whether you should pursue them, how should you go about deciding whether to take the leap?
It's 2012, so probably your first stop would be Google, and lo and behold, the internet certainly as always has plenty of advice to offer (including, of course, from here at Inc.). But, be warned, it's mostly crap, according to founder R.C. Thornton, who recently took to his blog Decoding Startups to argue that most on the guidance out there on how to decide whether to start your own business is nonsense.
Most advice on the topic, he writes, amounts to general questions about your interests and character. Things like:
Are you “unfazed” by risk?Are you a “decision maker”?
Is it your “dream business” and your “passion”?
Unfortunately, answering yes to these questions is a pretty poor guide to whether you should actually take the plunge, according to Thornton.
"I’m pretty sure literally everybody is 'passionate' about starting their 'dream business'…but why is it that only some small fraction of people are actually able to do so successfully?" he asks. "In my more excitable, pre-entrepreneurship days, I would have answered an emphatic 'YES!' to all of the questions mentioned above. Little did I know that my answer there had zero impact in my ability to succeed–or fail–in entrepreneurship."
So assuming Thornton's right and the Cosmopolitan personality quiz approach to figuring our whether entrepreneurship is a good fit for you is unlikely to yield much in the way of real insight, what approach should we use instead? He suggests a more hands-on decision-making process:
1. Try entrepreneurship on a small scale instead of just speculating about it. Just start on a small scale: get some alone time in between classes or during lunch and brainstorm some business ideas and set a plan to get business idea feedback. Give yourself a few weeks to solicit feedback and refine your idea. After you’re done… did you like doing that? Going up and talking to people? Validating business ideas? Constructing business models? I imagine you’ll not only learn more about yourself in your three weeks of doing this than you learned in the last year.
2. Go figure out what entrepreneurs in your field of interest actually do, and see if you like doing those things (and if you can do those things). Let’s say your business of choice is web development. Go out and talk to some freelance web developers. Ask, “what do you do?”…”how do you make money (get clients)?” The goal here is to see not only what the specific craft needed is (in this case, web development), but also how the business is built (where do the customers come from?).
3. Make a decision based on your research. So, for example, you interview a few web developers, and you conclude that they do a lot of programming (duh) (this is the part you like)…but they also have to attend a lot of courses on web development (you like this), they have to do a lot of sales (you don’t like this) and presentations (you loathe presentations), and they have to be good at customer support (you aren’t very good at this). Now that you essentially know what’s involved in this entrepreneurial venture, what are you going to do?
Check out the complete post for much more detail on each of these steps. Or, if you're looking for more voices backing up Thornton's point, how about this pithy recent blog post from marketing guru Seth Godin that argues, "studying entrepreneurship without doing it is like studying the appreciation of music without listening to it."
Do you agree that the only way to know if you're really cut out for entrepreneurship is to actually give it a try?
An online knife retailer is fighting Google AdWords over their banned ads--while big-box retailers seem to get off scott free.
When Google AdWords informed Knife Depot that it would be terminating their account in November of last year, the internet knife shop did not back away from the fight. In fact, they recently took it to their blog, The Cutting Edge.
"Google told us they would be terminating our AdWords account unless we removed all of our 'assisted opening knives,' which are legal, hugely popular across the U.S, and not prohibited in Google’s policy," wrote Daniel Lawton, a Knife Depot blogger.
Yesterday, the Knife Depot blog post made it onto Hacker News, where it ignited a firestorm of David vs. Goliath-style rants. Knife Depot is an online knives retailer based out of Prairieville, Lousiana and accoridng to Lawton, the company's AdWords ads were responsible for a "good slice of its revenue."
The current Google AdWords policy states that "Google doesn't allow the promotion of knives, such as butterfly knives (balisongs) and switchblades, in addition to disguised knives, such as air gauge, belt buckle, lipstick case and writing pen knives,"--no mention of assisted opening knives.
But here's the kicker: What especially upset Knife Depot and its supporters about this termination was that other retailers--big-box retailers--are still allowed to utilize their Google AdWords accounts to advertise the very same knives that resulted in Knife Depot's account being shut down.
A quick Google search for "assisted opening knives" earlier this morning confirmed claims made in Lawton's blog post: "Save on Kershaw knives assisted opening," read an ad by Amazon.com. A sponsored bar on top of the search results encouraged the reader to "shop for assisted opening knives on Google," listing various options from five retailers such as Galls, Bass Pro Shop, and Walmart.
According to the Knife Depot post, the Google employee who was handling their complaint about this "blatant favoritism" acknowledged that other companies were still selling and advertising the assisted opening knives. That Google employee reportedly told Knife Depot that he has alerted his superiors about those seven companies and requested that Google "state the clear differences that allows these competitors to serve and Knife Depot to be suspended."
When reached for comment, Google spokesperson said, "Our AdWords policies do not allow ads for assisted opening knives. This policy applies to all AdWords customers. As soon as we become aware of ads that violate our policy, we work to remove them."
Knife Depot did not return calls for comment.
The world is full of entrepreneurial upstarts that took down industry giants. It happens all the time. Here are five winning strategies.
Everyone loves a David versus Goliath story. When we see the little guy win against all odds, we know that anything is possible. When it comes to business, that's absolutely true. History is full of upstarts who slugged it out with industry giants and won.
Remember that Apple was once a little garage shop that took on IBM and software behemoth Microsoft--and ultimately came out on top.
And once upon a time, a bunch of California farmers had the audacity to think they could make wine as good as the French winemakers that had dominated the global wine trade for centuries.
Whole Foods' John Mackey, Southwest Airlines' Herb Kelleher, Virgin's Richard Branson, Fedex's Fred Smith: there are thousands of entrepreneurial Davids who took on Goliaths and won. It happens every day, but not by itself.
Certain marketing and business strategies enable Davids to slay Goliaths. Here are five.
Be a niche player. Believe it or not, starting with a niche is one of the most powerful ways to go viral and ultimately take down even the biggest giants. The trick is to determine the right niche and positioning for your product or service. Mark Zuckerberg didn't set out to get a billion users and Google wasn't trying to become an advertising giant. Social networks and search technology were all niches, initially.
Take the battle to Goliath--in the media. Who can forget Apple's 1984 Super Bowl ad that launched the Macintosh against Big Blue's IBM PC. Or how California winemakers went up against the French in the famous Paris Wine Tasting of 1976 that was portrayed in the movie Bottle Shock? How can people root for David if they don't even know there's a battle going on? The only caveat: you have to win.
Be different. No, you can't just look different, act different, or seem different. You actually have to be different. You have to create something that appeals to an audience in a way that the big guys don't or can't do. Compaq made the first commercially viable portable PC. Michael Dell made computers truly personal: custom made, one at a time, shipped direct to customers. Southwest went with regional airports and offbeat service. If you want to beat Goliath, you have to be different.
Partner to be first to market. While all the 800 pound gorillas rest on their laurels, nimble and aggressive companies can take the lead by partnering with others. Compaq actually beat IBM to market with the world's first computer powered by an Intel 386 processor. Dell would later eclipse Compaq using the same strategy--even partnering with the same company, Intel. Likewise, universities are great places to find innovators and innovative technology looking for a way to get to market.
Appear bigger than you are. The hardest thing about being a David is that customers still need to know they're getting a solid product and good support for their money. So differentiating isn't enough. Attention to detail is important. So is great customer service. Luckily, just about any company can appear far bigger than it is by outsourcing and leveraging ecommerce and social media. The internet really did level the business playing field.
Just remember one thing that trips up a lot of start-ups. It's a competitive world out there. You can have really cool technology or an exciting concept and end up going nowhere. The most important thing, hands down, is to deliver a unique customer experience that's way better than what's already out there. Pair that with one of these strategies and you may have a winner.