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What's worse: A disease with 90% survival or one with 10% mortality? (Even doctors get that wrong.) The Nobel winner on how "framing" fools everyone.
New players are piling into the e-book subscription biz. But wait--don't libraries already lend e-books for free?
For $8.99 per month, Scribd subscribers get unlimited access to a catalog of what the company calls "millions" of books and other documents, all available on iPhone, iPad, Android devices and Web browsers. HarperCollins has signed on to the program, making much of its backlist available, and other publishers include Kensington, Sourcebooks and Workman. While many frontlist titles won't be included in the subscription, they will be available for purchase through Scribd.
Scribd's announcement follows on the heels of Oyster, which launched as an iPhone-only app in early September. With Oyster, currently available on an invitation basis, subscribers pay $9.95 per month for access to more than 100,000 e-books from HarperCollins and other, smaller publishers. Also in the space are eReatah, a book-club style subscription service with tiered plans ranging from $14.99 to $29.99, and Amazon's Kindle Lending Library, a program provided to all Amazon Prime members.
Though movie and music subscription sites like Netflix and Spotify have been paving the way for years, it seems like the time has finally come for readers. "Subscription is a great new model to get a new type of reader paying for your books," says Scribd co-founder Trip Adler. "When people have a subscription, they end up reading more."
According Adler, their goal is to make Scribd's service "as simple as possible on the reader side--like being in the world's largest library."
Speaking of Libraries ...
OMG, seriously, people, they already have a "Netflix for books." It's called a LIBRARY. And it's free. #headdesk-; Heather C Hart (@heatherchart) October 1, 2013
According to the American Library Association, 76 percent of U.S. libraries offered access to e-books in 2012, up nearly 10 percent from 2011. So why would start-ups be trying to sell a service that already comes free?
The short answer is that library e-book programs aren't consistent or simple. First off, availability depends on where in the country you are: the ALA reports that while 92 percent of urban libraries offer the option to patrons, just 65 percent of rural libraries do.
Even where it's offered, many people don't know about it. According to the ALA, "58 percent of all library card holders said they did not know whether their library provides e-book lending services." Just 12 percent of e-book readers they surveyed had checked one out from the library in the past year.
Then there's the problem of complexity: borrowing e-books from the library can be time-consuming and frustrating. K.T. Bradford at DigitalTrends.com explains:
Borrowing an e-book involves a ridiculous number of steps: You must create a free Adobe account, download Adobe software onto your computer, start an account with your local library, connect up those two accounts, and finally sideload the books onto the e-reader via USB.
But What About the Selection?
With only one of the "Big 5" publishers currently signed on to both Scribd and Oyster, book availability seems like one area that libraries lead on, at least for now. It's hard to see how a service that provides no access to Penguin Random House books, for example, could be as tempting to serious readers, given how much content would be unavailable.
But, while libraries do have access to a wider range of books, those aren't always available to readers immediately, thanks in part to complex and long-standing arguments over pricing, which differ by publisher.
Jo Budler, Kansas's state librarian, recently explained to NPR that, while an e-book might cost $10 for a consumer, some publishers might charge libraries up to $85. "We have some publishers who say, you could buy a book, but it only belongs to you for a year," she said. "And then there are other ones who say, you can have a title but after 26 checkouts, it's gone."
As a paid subscription model, Scribd is able to offer publishers what seems like a more appealing deal: they use a formula to determine a publisher's cut per read, based on what percentage of the book is actually read.
"We started the company to help publishers of all kinds distribute and monetize books," says Adler. He believes that their model "ultimately gives more return revenue to publishers." If publishers agree, more may decide to start signing on to this or similar programs, improving the selection.
Despite the providing-unlimited-books-to-readers similarity, Adler thinks any comparison to library lending is offbase. "We love libraries," he says. "We're very spiritually aligned with libraries and trying to accomplish the same thing of getting more books to more people. But we're doing something completely different: creating a whole new experience around books, discovering them and reading them on any device you'd like."
For Adler, the real competition is other media sources like movies and music. "At the end of the day, people have pretty limited time," he says. "By providing a better experience, we can ultimately get people reading more books."
Ellen Stang, CEO of ProgenyHealth, thinks that healthcare reform will create opportunities for new collaborations and clients.
00:10 Ellen Stang: With Obamacare, I think it's going to create a lot of opportunities in healthcare. For us, with more people having coverage now in the US, there's going to be a higher percentage of families that may have pre-term babies that now have insurance. And I think for us there's gonna be a lot of opportunities with the expansion of Medicaid for us to really impact those communities and those families and help support them through that. I think with some of the reform in healthcare, with the advent of a lot of companies becoming part of the ACO models, I think there's going to be a lot of opportunities for us to have different clients. Right now, we're focused on working with insurers. I think that's going to expand our possibilities to really collaborate directly with providers and hospitals, and we look forward to that. We're actually in some conversations regarding that right now. So I think that'll create more opportunities to expand our program and services.
The story of how Alejandro Vlez and Nikhil Arora, founders of Back to the Roots, are bringing their grow-at-home mushroom and produce kits to Whole Foods, Petco, Nordstrom, and beyond.
For the Cisco co-founder, Steve Case, and Gary Vaynerchuk, it was business-as-usual today. But concern went to startups seeking SBA funding, and furloughed employees.For many entrepreneurs, it's business-as-usual, as they get back to work following the shutdown of the federal government Monday night. This is especially true for owners who lead consumer products or business services companies, and don't depend on government contracts for revenue. For now, those parts of the economy seems stable. For some perspective, Inc. reached out to a dozen well-known entrepreneurs. Most did not make themselves available to comment. Their lack of response stands in marked contrast to entrepreneurs of smaller, lesser-known companies, many of whom deal directly with the government, who were eager to talk about--and disparage--the shutdown earlier this week. Here's what they had to say. Gary Vaynerchuk: People Go on Defense--I Go on Offense "I never pay attention to them," oenophile and media entrepreneur Gary Vaynerchuk said via Twitter, referring to financial crises, including the federal government shutdown and the impending threat of default. "My best business years have been in worst 'global business years'," Vaynerchuk wrote, adding such periods are a great time to go on the offensive, rather than retrench. Steve Case: Politicians Are in the Way AOL founder and current Revolution chief executive and chairman Steve Case said it was necessary for politicians to rebuild a political center, and to negotiate. "Don't like it," Case said hours before the shutdown on Monday, during a sit-down meeting at Inc.'s New York offices. "There is a difference between policy and politics, and politicians have gotten in the way of good policy." What's needed is quiet diplomacy, rather than the shrillness of the current debate. And the fault is not only with politicians. "As citizens, we are to blame too," Case added. Sandy Lerner: What's Going on in Washington is a Disgrace Serial entrepreneur Sandy Lerner, a Cisco co-founder, founder of cosmetics line Urban Decay, and owner of organic meat farm Ayreshire Farm, said she was most concerned for the furloughed government employees and other consumers who are unwitting recipients of the economic blowback caused by the shutdown. "I don't think the shutdown does anything except jerk the lowest-level government employees around, the people who really need the money," Lerner wrote in an email. "It's disgraceful. I propose that the legislatures lose 10 percent of their annual salary for every day the government is shut down, including weekends." If that doesn't work, Lerner says the penalty should be increased to 20 percent. Howard Tullman: The Shutdown Will Hit Startups Hardest Serial entrepreneur Howard Tullman, who is currently chairman of Chicago's Tribeca Flashpoint Media Arts Academy and managing partner of High Tech Investment Partners, said the shutdown would be felt most intensely by startups. Tullman says on Wednesday morning he met with a startup coffee roaster in the middle of a growth spurt. The company owner was expecting a Small Business Administration loan of about $150,000, which he intended to use to buy more equipment. But the coffee entrepreneur discovered today that loan has been put on hold due the government closure, which also shuttered the SBA. "Our economy depends on growth and innovation and entrepreneurship," Tullman said. What's necessary, Tullman says, is for both Democrats and Republicans to come to the table and split the difference. "But," he added, "Obama is so fixated on [the Affordable Care Act] as the only thing he's accomplished, he is not willing to move.
The health insurance exchanges finally made their big debut. Small-business shoppers are not impressed.
So it turns out that lots of people were eager to shop--or at least window-shop--in the new healthcare marketplaces, which opened yesterday. The Department of Health and Human Services reported that 4.7 million people visited the federal portal HealthCare.gov in the first 24 hours and that 190,000 people rang government call centers.
And so it was that government officials learned what many a startup has discovered: tons of traffic on opening day is a decidedly mixed bag.
All that traffic was a bit overwhelming for the newly created systems. Throughout the day, the chat board of the Certified Employee Benefits Specialists lit up with reports of glitches, slowdowns, and temporary shutdowns in many states. A broker in the New York tri-state area described the day as, “a disaster. With the solid four hours delay on the Connecticut, New York, and federal sites, we had significant technological difficulties getting access to any of the exchange information. Hopefully tomorrow will be better.” Only Colorado and California’s exchanges seemed to be working well.
“This is one of the least surprising things I’ve seen in a while,” says Paul Ashley, a benefits advisor in Indianapolis. “A lot of people with no intention of buying plans are checking in to see what it’s all about. It’s like rubbernecking on the highway, and it will get worse before it gets better.”
Meanwhile, for those who managed to get through, the experience was less than encouraging. Small-business owners shopping at Healthcare.gov--the default portal for customers in the 36 states that are letting the federal government manage their exchanges--initially were met with an error message. Later in the day, that was replaced by a table of unsorted data with no instructions for using it.
That seems to be fixed now--and the searchable database, with instructions, works nicely, allowing you to sort through plans by state, county, plan level, carrier, and premiums. You will not be able to actually enroll online until November 1--but you can do so by mail or fax now.
In the remaining states and the District of Columbia, which are running their own exchanges, the online shopping experience for employers was, well, weird--a far cry from the fluid search-select-click-buy dynamic we’ve all grown accustomed to. Many exchanges are not even functioning as online entities. Hawaii Health Connector, for example, you can file an application to determine if your business is eligible to use the insurance marketplace. Then, according to the site, “The Connector will contact you in the coming weeks…to inform you of your eligibility and plan options.”
Covered California promises that “everything an employer needs to compare plans is available online, by phone or from a Covered California Certified Insurance Agent.” Yet I could find no apparent way to see what small-business plans were available. A PDF link for the “Small Business Plan Section” told me that there is an “update coming soon.” On Connecticut’s exchange--tagline: “Change Is Here”--you could find applications in PDF format, with directions to speak to “your broker or accountant” to learn more. (The search function for individuals, on the other hand, worked impressively well.) Cover Oregon’s site directs employers to find an agent, via a provided link, to look at rates and start an application.
Other state-run sites just make you jump through some hoops before you can actually see anything. In Colorado, Massachusetts, Kentucky, and D.C., you must create an account, complete with business address, tax ID numbers, security questions, and--in the case of DC, a ridiculously complicated password--just to browse. Tony Hsieh would not be pleased.
It’s not all bleak: New York’s small-business exchange is working beautifully today, offering a preview of available rates and a link to register with more details to get actual quotes. Elsewhere, for now, it may make the most sense to find a real person to help walk you through the process. You can check for local advisers here: https://localhelp.healthcare.gov.
The government shutdown shows leaders exactly how they should not behave when faced with doubters.There are lessons to be learned from dysfunctional families. Comparing our representatives to a dysfunctional family may be a bit flattering to Congress, but nonetheless there are some leadership lessons to be learned from their dysfunction. In the final analysis, leadership is about moving agendas ahead. That is what we expect from our legislators. We expect some pragmatic political competence. Obviously, this Congress is politically incompetent, but within its incompetence there are some leadership lessons to be learned. 1. Don’t stay with your base too long You may have a great idea and your best friends may think it’s a great idea as well. These are your close allies and they may well be the base that will give you the traction to move ahead. However, if you over-emphasize your base and put all your energy into making sure your base is cohesive and thinking the same way you are, then you may miss the point. Putting too much emphasis on your base may convert them into a cult or a cabal, rather than a tactical coalition. Know when to roll out of your base. This is a lesson yet to be learned by the Republican Party. 2. Make only token gestures to your exact opposites In all settings, you will face stone-walling naysayers who don’t support your agenda. These critics, for some deep-rooted ideological or personal reason, will always find you or your ideas totally objectionable. Even though the probability of converting them to your position is unlikely, they can’t be totally ignored. The trick is to make some token investment in these extreme opponents, without overplaying the resources and effort you’re willing to commit. Don’t spend too much time with those you don’t have a chance of winning over. 3. Try to win the middle In any organization, there is a core of individuals who understand that pragmatic adjustments and a one-step-at-a-time approach may be the best way to push an agenda. They are neither traditionalists nor revolutionaries. They play the middle. They are concerned with making tinkering improvements and coming to incremental agreements. Without this core you will never move an agenda. It is this core that both sides of the aisle seem to forget. Don’t forget the pragmatists in the middle. 4. Know when not to negotiate Not all situations are solved through negotiations. Sometimes there is simply nothing to negotiate about. This may be a positive lesson learned from the current events. When parties can’t even agree on the issues to be discussed, when everything is defined as a zero-sum game, it may be to one’s benefit to sit on the sideline until the game is redefined. 5. Don’t confuse short-term vs. long-term accountability In the short-term, any leader, just like the members of Congress, feels most comfortable with those that think like they do. But at the end of the day, you're not accountable to the people who already agree with you. You're accountable to everyone in the organization. In Congress, leaders are accountable to the entire country. In business, you need to understand not just what your R&D department wants or what your supporters are clamoring for, but the long-term market dynamics. This is an essential lesson if you are going to survive and grow your position. Unfortunately, this lesson is yet to be learned by some members of Congress. 6. Keep your ego out of the game It’s not really about you--it’s about the agenda. Pragmatic leaders understand how to differentiate their personal need for victory from the practical need to achieve results. A leader focused on his or her ego not only becomes obstinate, but actually perverts the reality in which they work. Good or bad, these are some of the lessons from our current Congress. Unfortunately, with the government shut down and the debt ceiling looming, there will be more lessons coming.
A smart business strategy requires planning, honest debate, and experimentation--not meaningless graphs and jargon.
Too many companies rely on colorful graphs, pie charts, and over-used words like "synergy" to get their message across.
That's why "many strategic plans end up as shelf decorations or hard-to-find files in crowded hard drives," write Ron Ashkenas and Logan Chandler, partners at Schaffer Consulting, in the Harvard Business Review. For many companies, "the activity has devolved into either an over-explained budget or just bad amateur theater--lots of costumes in the form of analysis, charts, and presentations--but with very little meaningful substance that can be translated into action."
Here are their tips for improvement:
Your strategy will require "hypotheses that certain outcomes will result from a given set of initiatives," Ashkenas and Chandler write. But if your company relies on assumptions, your strategy could fail. "To overcome this inertia, ask managers to include specific, short-term experiments, whose results will communicate what works and what does not."
Do away with the jargon.
Avoid empty and over-used terms like "synergy," warn the authors. "Language like this can signal that a team doesn't have a clear idea of what they need to succeed." One CEO they encountered outright banned those words at her company.
Ask the hard questions.
Strategic planning should spark a debate and draw "unscripted answers" from your employees. "A few that we've heard include: 'What are the top two or three things that must go right for this strategy to work?'" say the authors. "'If we pursue this strategy, what are we deciding not to do?' and 'What specific capabilities will we need to develop in order for this plan to succeed?'" All of these are worthwhile to ask.
Entrepreneurs run our economy now, McGee observes. They have liquidity and they're ready to take risks.
The economy remains a concern for small business owners like me. Growth is slow, unemployment is stubbornly high, deficits and our national debt are at historic levels. This week's fiscal drama, and the enormously complicated Affordable Care Act, are causing all kinds of uncertainty.
None of it fazes Liam McGee, Chairman, President, and CEO of The Hartford. At least not for the long-term. The American economy is "coiled like a spring that could really pop--in a good way. Particularly if we had more clarity and certainty from D.C," McGee says. The Hartford, which deals in property and casualty insurance, group benefits, and mutual funds, just released its third annual Small Business Success Study of 2,000+ small business owners nationwide. (Full disclosure: The Hartford is a client; I'm analyzing the study's findings for their blog.)
If it's not already clear, McGee's an optimist. He's known for helping turn around the company from its low point after the last banking crisis, and putting it back on track for profitability and growth. But interestingly, as an optimist, he thinks the small business owners surveyed reflect the psychological uptick over the economy. From my perspective, they're a minority--48 percent are optimistic that the national economy will strengthen this year. But from his, it's an improvement because that number has swelled from 33 percent a year ago.
Why? What do small business owners really think?
I'm a pessimist, so I'm not sure why people are so positive, if they really are. I root for better times. And I hope McGee is right. But my company's been slow for at least five years. We've been profitable, but we haven't been growing. Demand has been soft. My clients are concerned with their own growth, higher taxes, regulations affecting their industries, and a generally negative business environment in Washington.
Like many others, I haven't hired more staff. We're battling harder for fewer opportunities. Every day is a struggle to find new work and squeeze out a few more dollars. So is McGee just pitching his pipe dream to the rest of us?
It's true that the economy has shown a few bright signs lately. Real estate is recovering. GDP has nudged up. And interest and inflation remain at historic lows. But is that enough, and does it really reflect the big picture?
Read between the lines: pessimism outweighs optimism.
I looked closely at The Hartford's study, and I can easily make the case that people are still overwhelmingly pessimistic about the economy:
- While 48 percent of small businesses are optimistic about the economy strengthening next year, 52 percent are not. For the former, how much "strengthening" is enough? We need more than a little.
- It's true that 69 percent surveyed admit that the number of risks they're taking has remained the same over the past six months. But growth requires risk. It appears that most companies are not willing to take risks in this environment. I'm one of them. I'm sitting on my cash.
- Growth remains our biggest concern: 59 percent of small business owners cite lack of demand (followed by taxes, healthcare costs, and uncertainty about federal regulations) among the top risks to our businesses. These risks have declined, but they're still extremely high.
- The Affordable Care Act continues to loom heavy on small businesses; 42 percent predict that it will force them to reduce employee hours and 38 percent plan to halt future hiring.
McGee doesn't deny any of this. "When I started my banking career in the late seventues and early eighties, the prime rate was close to 20 percent," he recalls not-so-fondly. "There was uncertainty then! The cost of money was too high to achieve any reasonable rate of return. But even as challenging as those times were, I think there's even more conservatism and caution today. Capital is less available from banks because of the recent problems in the banking sector. There's not a clear view for prospects for growth. Most entrepreneurs have seen their taxes go up and are concerned about medical costs. Many are saying: I'm not taking any risk until these things get solved.""
Perhaps the big picture really is the big picture.
McGee believes that our entrepreneurial environment is different now than in the past, and believes that changes things: "In the last 20 years, you've seen an historically unprecedented level of small business creation and success. You have an economy now that's driven by entrepreneurs. There's a tremendous amount of liquidity that could be potentially available. There's a pent-up urge to do something. And there's no better place in the world than this country to succeed."
Sometimes it helps to step back.
"Just connect the dots in the survey," McGee advised. "To me, the message is very clear. Small businesses are saying: I got burned during the financial crisis and there's a lot of dysfunction around me. But just give me some clarity and I'm ready to take some risks. And that's why I think this economy could be ready to pop. It might take another six months or a year. But it will happen."
McGee has a point. Admittedly, there are more startups, more startup communities, and more resources for startups than I've seen in the past. There are more sources of capital than ever before--from community banks to angel investors, venture capitalists, and crowd-funders.
There are also inexpensive technologies that enable entire companies to connect their people from anywhere around the world and to collaborate on projects. There are new forms of web-based communications, powered by social media and inexpensive mobile devices that allow us to find and service customers wherever they are and whenever they need. We can take payments online and with our phones.
We have new resources of oil and natural gas, and have made enormous advances in alternative energies. We've figured out 3D printing. Wearable technologies will create new ways to increase productivity and profits.
Alright, so from a macro perspective, we have created ways to make our economy more resilient. I can give him that.
There's a reason people aren't buying your product or service. Now innovate your business to reach them.
As obvious as it sounds, most people aren't your customers, which can be a barrier to your success.
How can you turn these non-believers into your customers?
Alessandro Di Fiore, CEO of the European Centre for Strategic Innovation, writes in the Harvard Business Review that companies must shift their focus from their customers to their non-customers.
"Unfortunately, a focus on known customers and share of the existing market is ingrained in the processes and metrics of companies," he writes. "You can improve the odds on succeeding through innovation if you fix this data problem by treating non-customers as a segmentation problem and apply some of the discipline of marketing research."
In other words, put your non-customers into categories addressing their reasons for non-involvement. Di Fiore offers six:
Economic: Your product is unaffordable.
Functional: Your product doesn't help in the way that they want.
Educational: They don't understand how to use it.
Access: Geography or the lack of a web store prevents people from buying.
Social: Your product doesn't conform to certain religious, social, or political principles.
Emotional: People simply don't like it.
Once you've outlined the categories, analyze the barriers and how to get past them, whether by creating a new product or a new marketing scheme.
Arena, a global swimwear company tried this very method. It found two segments--functional and social--were restricting its sales: Most non-customers couldn't swim or they lacked a proper breathing technique. To address the latter issue, Arena developed the Freestyle Breather, a pair of plastic fins that attach to goggles and create an air pocket. As for the social aspect--devout Muslim women wished to cover their body--Arena designed a bodysuit just for them.
"Of course, you won't capture all your potential market space through this exercise," Di Fiore says. But "sorting non-customers into the categories described here and analyzing barriers blocking potential demand gets you a very long way."
Some of the greatest start-ups found success only after surviving a near-death moment. You can too. Here's how to get through it.
Everyone loves a good story about a successful tech start-up and that particularly tenacious entrepreneur who perseveres and makes good in an extremely competitive space. However, a great deal of these success stories come only after the entrepreneurs make it through at least one threat of utter collapse.
Recently I had a chance to chat with early-stage tech start-up founders and entrepreneurs around Boston about their growing pains and challenges. They’re companies operating in hot technology spaces and who have all made decent progress building their business, but they’re running short on cash.
It’s a common thread amongst start-ups of all types, across sectors, and if that sounds like you, or a business you know, consider these four tips as you ponder what to do next.
1. Embrace your discomfort.
Necessity is the mother of invention. The stress in finding your company on the brink of collapse may be the catalyst for a much-needed “Aha!” moment, allowing you to tweak your products and business model to be more successful. Smooth sailing can breed complacency; it's rarely the best environment for innovation.
Call me extra lucky, but my own start-up, WordStream, has been on the brink of collapse not once, but twice! For example, in my first year of operation, I lost a major customer who accounted for the lion’s share of our company revenue. With just enough cash on hand to survive two months, we had to close a round of investor financing fast, or die.
Was it stressful? Of course. In fact, I did have to consider cutting losses and walking away. Yet it pushed us to make changes in our strategy to meet our goals. This year, WordStream ranked #184 on the Inc. 5000 list of fastest growing companies. I can’t help but think what a relief it was that we pushed through and kept going.
2. Be (somewhat) delusional.
The tech start-up, venture capital, angel investing game is one in which you basically need to entice people to invest in your company, based on a vision for a company that doesn’t yet exist. Even those who’ve played the game before can find the funding process a bit manic.
Savvy entrepreneurs can get multi-million dollar valuations in Series A venture capital rounds, despite very little revenue and a half-baked product. Those investments are absolutely necessary to bring that vision to reality, yet entrepreneurs under extreme financial duress may fall down at self-promotion and selling the idea.
Always allow yourself to express the passion for your product as it would be if you exceeded all expectations. If you can’t get crazy about your idea, why would an investor?
3. Keep your doubts to yourself.
I was recently chatting with a struggling company founder when he began dreaming out loud of landing a software engineering job with Google. I get where he was coming from, but to say it was off-putting would be an understatement.
These moments of weakness are par for the course. In fact, if you have no doubts at all, I might worry that you’re missing some key information about your market and company.
However, verbalizing these doubts can be an absolute confidence killer in your company. Cash-strapped entrepreneurs need the unwavering support of investors, staff, and strategic partners alike. Transparency is a very good thing, yet you can communicate your funding issues without instilling fear that you may be having second thoughts or losing faith. In almost all cases, doubts are better kept to yourself.
4. Know when to call the game--and what that actually means.
Does anything suck as much as having to acknowledge defeat? There’s a special sort of crushing pain in having to close the doors on an idea to which you’ve literally committed your time and savings for some period of time.
Yet continuing on a broken path has been the downfall of many an entrepreneur; there is wisdom in knowing when to pull the chute and save yourself. If all of your efforts were for naught and you’re unable to continue the business, cut it loose, but don’t think of this as a failure.
Many uber-successful companies were founded on the backs of a series of failed business ideas by resilient entrepreneurs. Prior to WordStream, I had my own string of failures, like a peer-to-peer file sharing software application that lived a short life and died a horrible death 10 years ago. After admitting defeat, I could have wallowed a while in the bitter sting of having lost all of my money and feeling as though I’d wasted my time.
The great thing about losing everything is that you can’t afford not to keep going. If you have that creativity and drive inherent to start-up founders, you’ll learn to see the failure of one company as the learning ground for the next. Many VCs understand this and see a valuable asset in seasoned entrepreneurs willing to dust themselves off and try again.
Author Malcolm Gladwell says that our desire to be among the elite can sometimes thwart our own ambition.
“Never be the smartest person in the room,” many have said. Michael Dell once suggested that if you are, invite some smarter people in. But is a room that is brimming with brainpower detrimental to your own achievement?
For his latest book, journalist Malcolm Gladwell makes the case that it might be. In the book, entitled David and Goliath: Underdogs, Misfits, and the Art of Battling Giants which hit shelves Tuesday, Gladwell looked at some numbers relating to higher education that challenges conventional notions about adversity and obstacles.
He describes the theory of relative deprivation as it relates to individuals’ perceptions of their abilities.
“Relative deprivation is an idea that says that when we make judgments about ourselves, we judge ourselves next to our immediate peers -- people like us in the same room as us -- not to the world at large,” Gladwell said in a recent interview with author Daniel H. Pink.
In the classroom setting, students assess their level of competence based on the competence of those around them. So a student in the bottom half of his class at Harvard University might be less confident in his abilities than a student in the top half of his class at a less prestigious institution.
Gladwell specifically looked at class rank among students graduating with math and science degrees from two different universities. Few students from the bottom half of their class at Harvard pursued an education in science or math. At some point, those students had given up and moved into another academic fields.
However at a less competitive school, Hartwick College, many in the top third of their class earned math and science degrees and went on to successfully pursue careers in those fields.
“Going to elite schools in other words has a cost,” Gladwell said. “If you’re not going to be in the top half of the class, you’re going to run the risk of mistakenly thinking that you are not a good student, of coming to a conclusion about your own abilities that’s at odds with reality.”
Throughout the book, Gladwell closely examines and attempts to debunk commonly held beliefs about what it really takes to meet challenges and rise to the top. It is, after all, a story about David and Goliath.
There's a lot you can control in life, but how you handle random events will determine your success--and your happiness.
October's a big month around here.
It was 25 years ago that I met my wife. She'd decided to dump my roommate--who she'd been dating--and wanted to drop off some of the loser's stuff when she knew he wouldn't be there. Luckily, I was. We'd never met until then. We almost never did.
Our first date was on Halloween. She was dressed as a flapper--the 1920s version of a party girl. I was a nerd, sort of a "Revenge of the Nerds" type. Not very attractive. She took one look at me and wondered if she'd made a mistake. She almost didn't stick around.
We were married a year later, also in October. We didn't really think it through. One day we just boogied down to the county courthouse and tied the knot. We didn't tell a soul until afterwards. Sounds like a fairy tale, doesn't it? Trust me, it wasn't, not by a long shot. The first few years were pretty rocky but we somehow managed to get through it.
Funny thing is, the best thing that ever happened to me was the result of a complete string of random, low-probability events. Had one of us given the slightest thought to what the heck we were doing at any point along the way, things never would have turned out the way they did.
I don't know about you, but after more than half a century on this planet and thirty-something years in the business world, I can honestly say that all the pivotal events in my life happened just like that. In business as in life, the best advice I can give anyone is to embrace the chaos. Take risks. Big ones.
Now, don't get me wrong. I'm not saying that taking chances is all there is to success and happiness. You also have to follow through and get things done. You have to be willing to compete and fight to win. You have to take responsibility for your actions. And you have to face your fears and learn from your mistakes.
Indeed, there's a lot to the business of life that is in your control, but in my experience, the major make-or-break events always involve letting go. Giving up the illusion of control and embracing the chaos. Any successful entrepreneur will tell you that's true.
Runaway product successes are never planned. You can't predict which websites, apps, or TV shows will go viral. And dozens of venture capitalists will tell you you're crazy before one sees the real potential of your disruptive technology or concept and writes you a check.
How do you know which risks to take, which chaotic rides to jump on, which random events to see through? If it feels right, do it. If it works out, if you accomplish something good, it'll boost your self-confidence. If it doesn't work out and you learn from it, that'll give you strength. And through it all you'll gain experience, insight, and perspective.
These days, it seems that everyone who wants to get ahead is some sort of information junkie. Everyone wants to be more productive, effective, optimized. That's okay for a little fine-tuning, but don't lose sight of the big picture. In this world, control is an illusion. How you respond to random events is far more important.
After threatening not to return until an equity clause was removed from contestants' contracts, Mark Cuban finally got his way.
According to the clause, all contestants were required to give Finnmax, Shark Tank's production company, either 2 percent of their profits or 5 percent equity in their company. This rule applied regardless of the deal struck with investors, and all contestants since Season One were obliged to agree to it.
"FYI, there is no additional equity or percentage of anything taken any longer. That was removed retroactively," he told a group of former contestants. "I told them I wouldn't come back this season if it wasn't." ABC and Sony Pictures Television declined to comment.
Cuban also wrote that if the clause stayed in place, the "quality of the companies and entrepreneurs would decline." The reason: Savvy entrepreneurs aren't willing to trade an automatic stake in their company for appearing on a show without a deal, says Ami Kassar, a New York Times financial columnist. Here, he explains the pitfalls of that arrangement (emphasis ours):
"Remember that when you're giving away equity, you're getting married to your investors. Make sure that your value and ideas are in synch. And keep in mind that if your company ever wants to borrow money in the future, it's likely that any investor who owns 20 percent or more of the company will have to guarantee the loan personally. Will your investor be willing to do that? And if your investor is promising expertise and help the way the sharks do, make sure they spell out precisely what they mean before you sign."
Cuban said the clause was removed retroactively, meaning every contestant who's appeared on the show since Season One will be relieved of the commitment. However, how that will work out logistically remains unclear.
Make something you love and get ready to work around the clock, says the Buffy the Vampire Slayer star.
Actress Felicia Day, best known as "Vi" on Buffy the Vampire Slayer, has also created a successful web video series without any help from Hollywood.
In 2007, she wrote, produced, and stared in her own series, The Guild, which follows a group of online gamers. After posting the content to YouTube, she received a number of studio offers, but decided it would be better to crowdfund ten additional episodes. After landing a coveted deal with Microsoft, six more seasons of The Guild appearead on Xbox’s Independent Video channel, as well as Hulu, Netflix, iTunes, YouTube, and Amazon.
In a recent interview, Day explained how entrepreneurs can launch a successful online video business for the leadership blog, Knowledge@Wharton. Here are five tips from that conversation.
Own your content.
"Creative property is all about IP [intellectual property]," says Day. "When you're creating worldscapes with scripted content, or even non-scripted content, the potential revenue is extremely high if you're able to take it to another platform, like TV or movies. To not be in control of that is not as good a business decision."
Churn out the content.
"The expectation for a native YouTube user is constant, constant content. [The YouTube audience] isn't as event driven; they're comfort driven. It's the equivalent of a morning show," Day says.
Create for more than one platform.
"I think it's a mistake to let the platform train you to make content only for that platform," says the actress. "We might not get four million hits on every single episode, but we're making something that can continue into a movie or TV."
Think big on a small budget.
You don't need a big budget to be successful. Online video is up to 90 percent cheaper to produce than TV and film. "Sometimes it will surprise you," says Day. "The thing you put the least effort into will be the most popular, and the thing you put all your effort into will not be popular."
Make something you love.
"If you're going to do it yourself, you're getting into the business of audience management," says Day. "Know that you have to be on 24/7. And make sure you're doing something you love enough that it doesn't become work to maintain your audience--something that you're passionate about, that would drive you every single day to get up and be excited to interact with people around. That's really the key to YouTube and online content in general."
We'd never counsel financial irresponsibility. But every now and then...
"A custom adventure with Visionary Air. You charter a plane and log hours of flight training on the way to your dream destination. I'd fly to Jackson Hole for backcountry snowboarding with my best friends."
"A flying car by Terrafugia. When I was little, I wanted the hoverboard from Back to the Future. Terrafugia feels like the adult version of that."
"A plot of land in New York or Vermont. I would love to create a sleepaway camp for special-needs children."
"A personal chef. I don't have time to cook. Eating well is hard enough, and our office is stuffed with snacks like peanut butter-filled pretzels."
"A Hyperloop operated by Elon Musk, so I can go 4,000 miles per hour without getting carsick."
Greg Shove, founder of SocialChorus, talks about how to reward and inspire your best customers.
You can better fight the sabotaging voices in your head if you get to know them and give them a name.
Most of us have encountered a nagging little voice inside our head that second guesses our judgements, criticizes our best efforts or worries about things we know we shouldn’t stress about. And that includes author, coach and Stanford lecturer Shirzad Chamine.
Chamine shared his own personal struggle with what he calls his inner “saboteur” with Stanford Re:Think recently, recalling how he was told he came across as highly judgmental during a graduate school exercise. Upset by the harsh feedback, Chamine engaged in much soul-searching, as the Stanford Graduate School of Business newsletter explains:
Chamine came to think of this judge as what he calls a “Saboteur,” one of several figurative villains that he says can reside in normal human minds. “Your mind is your best friend, but it is also your very worst enemy,” he says… The Saboteurs -; which, besides the Judge, include such instantly recognizable types as the Victim, the Avoider, the Hyper-Achiever, and six others -; undermine you by triggering anger, anxiety, shame, regret, and other negative emotions. “Pretty much all your suffering in life is self-generated by your Saboteurs,” Chamine says.
The story of Chamine’s personal struggle is well worth a read in full and the article also includes some psychological research backing up his ideas about inner saboteurs. But if his efforts to understand and tame his inner critic sounds distressingly familiar and you’re wondering if you might be harboring any of these saboteurs in your own head, then a post by Chamine laying out the full cast of villainous characters on jobs site Monster.com might be just what you need. It includes this table describing each kind of inner saboteur and the key lie they keep whispering in your ear:
Focus on negative in self, others, or circumstances
Unless I constantly point to what's wrong, nothing will improve
Need to always control and dominate
Controlling always ensures best outcome
Need for order and perfection taken too far
Perfectionism is always the preferred way
Avoid difficult or unpleasant tasks and conflicts. Procrastinate
I am just being positive. No good comes out of dealing with conflict
Constant need for busyness. Rarely at peace with current activity
This is the way to accomplish and experience the most
Constantly helping, pleasing, or rescuing others, hoping to be liked
I do this to help and expect nothing in return
Continuous focus on painful and deflating emotions
This is my best way to attract attention and affection
Over-application of the rational function in dealing with people
Emotions are useless distractions. Greatest leader strength is logic
Continuous intense anxiety about dangers and what could go wrong
Best way to protect self and others is through hyper-vigilance
Narrow focus on achievement to the detriment of relationships, balance and perspective
Greatest success comes from achievement-at-all-cost
Recognize any of these baddies? Most likely one or the other of them sometimes chimes in unhelpfully in your head. So how can you defeat them? The first stage is to recognize and name the negative voices. The second is to consciously argue yourself into a more positive frame of mind. The Stanford article gives a flavor of how to do this using practical exercises, though Chamine’s book no doubt offers much more detail.
Are any of these villains lurking in your head?
The 1-800-Flowers founder explains what he did when sales suddenly plunged during the financial crisis.
Corporate tag lines are becoming like product jingles: corny, retro and ultimately ineffective.
When startups and SMBs turn their attention to branding, there's one expense that they can safely forego: the tag line. Tag lines are going the way of the jingle--a once-powerful branding tool that's now become ineffective.
There's no question that in the past tag lines have been successful branding tools. Some tag lines, like Avis's "We Try Harder" or American Express's "Don't Leave Home Without It" went viral back before anybody knew what "viral" meant.
Today, however, an increasing number of companies, especially in high tech, have either explicitly dropped their tag line (like Microsoft), have a mission statement instead (like Facebook) or flirted with a tagline but no longer seem to use it (like Google.)
To understand what's happening with corporate tag lines, it helps to consider the parallel case of the jingle, a specially-written song intended to make a brand name stick in the mind.
Jingles started in the early days of commercial radio and continued to be popular as a branding technique through first decades of commercial television. Jingle-writing was big business; pop star Barry Manilow famously got his start as a jingle-smith.
Today, though, jingles have almost disappeared. That's partly because broadcast ads, which used to be 60 seconds long are now much shorter (often 15 seconds or even 5 seconds long) leaving less time for a jingle.
But there's another, more cogent reason for the disappearance of the jingle: they don't work any more. At best, they sound like bad imitations of popular songs; at worst, they sound corny and retro.
The same thing is happening with the corporate tag line. Such tag lines are intended to encapsulate and clarify the essence of a brand proposition as with Apple's "Think Different" or NBC's "Must See TV."
The problem with tag lines, though, is that they tend to sound like generic corporate speak. For example, Sony's recently launched "Make.Believe" tag line is supposed to inspirational, but could describe any company.
More importantly, it's unclear whether tag lines are worth the investment that it takes to establish them. Branding is hard enough in a business environment that's chockablock with brand names, according to branding expert Nandini Hirianniah.
"Brand recall is a great challenge and consuming, now imagine adding a tagline to it and trying to push the whole branding. Its too much to ask!" she writes. "The reality for today is that taglines are redundant [and] nothing but noise."
So if you're working on a branding campaign, you're probably wasting time and money if you're worrying about a tag line. If you don't have one, you're okay. And you've got one, you might want to drop it.
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