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New research looks into the real effects of flattened firms and comes up with results that will surprise you.

In the world of start-ups, flatter is generally better, and middle manager is almost a dirty word. Want examples? GitHub managed to make it to 60 employees with "no managers," while gamemaker Valve has generated huge buzz with its radical employee manual describing its leaderless organizational structure.

These may be among the more extreme embodiments of the flattening impulse, but they speak to a real fervor for flat structures as up-and-coming companies try to keep their teams cohesive, responsive, and agile.

Does this enthusiasm for flattened companies hold up to careful study, though?

That's the question asked by Julie Wulf in a new Harvard Business School working paper. Through quantitative research and more qualitative interviews and CEO time-use surveys, Wulf and her team looked into the actual effects when larger companies eliminated layers of management.

She concedes that the impulse behind this delayering sounds sensible. By pushing decisions downward, flat companies aim not only to boost accountability and morale but also "to remain competitive in the face of increased competition" and "pursue a streamlined, efficient organization that can respond more quickly to customers."

The only trouble is that things don't work out as advertised. In fact, the effect of flattening an organization is, in many ways, the opposite of these stated intentions. Wulf writes:

In line with the conventional view of flattening, we find that CEOs eliminated layers in the management ranks… But, using multiple methods of analysis, we find other evidence sharply at odds with the prevailing view of flattening. In fact, flattened firms exhibited more control and decision-making at the top. Not only did CEOs centralize more functions, such that a greater number of functional managers (e.g., CFO, Chief Human Resource Officer, CIO) reported directly to them; firms also paid lower-level division managers less when functional managers joined the top team, suggesting more decisions at the top. Furthermore, CEOs report in interviews that they flattened to “get closer to the businesses” and become more involved, not less, in internal operations. Finally, our analysis of CEO time use indicates that CEOs of flattened firms allocate more time to internal interactions.

When middle management is stripped away, then, the powers it once held don't necessarily flow down to frontline team members. Instead, these decisions often get relocated to the very top of the organization. Or, in other words, flattened firms often look less like a democracy of empowered citizen-employees and more like a monarchy, with "a more hands-on CEO at the pinnacle of the hierarchy." The findings may have come from studying large companies, but small-business owners and founders are probably not immune to these unintended effects.

If you're interested in reading more about flat organizations, several other studies have also looked into the idea and found there are often negative consequences when firms go flat.

Have you ever experienced CEO control freakery masquerading as a flat organization?

It's too easy to lose focus after reaching this all-important milestone. Stay the course postfunding with these tips.

Sometimes growth is impossible without a significant chunk of funding to fuel that growth.

But say you do manage to beat the odds and attract capital--then what?

Check out the following advice from Ashish Rangnekar, the co-founder of BenchPrep, creators of test-prep and subject-based interactive courses for computers, mobile phones, and tablets. BenchPrep raised more than $2 million in 2010 and an additional $6 million last year.

Here are Rangnekar's tips, in his own words, for what to do right away--and just as important, what not to do:

1. Don't hire anyone for the first month.

We raised $6 million. That puts a lot of pressure on you to grow, and grow fast. After all, the story you tell investors is one of growth and how money will allow you to grow. But expanding the company doesn't always mean expanding the team. Growth is not just hiring more people.

2. When you do hire, start hiring differently.

There can be a big difference in the kind of people you want to hire when you are a small, underfunded company and the kind you want to hire when you're well funded and squarely in the growth phase.

When you're smaller, you typically want people who are generalists, because you can't afford to hire specialists. Once you have money in the bank, you should hire specialists who can put their heads down and focus on one aspect of the business.

That's why you should wait before you start hiring. It will take time for your hiring practices to adapt.

Our prospective employee pipeline was filled with generalists who could do multiple jobs. Now we need to create a new pipeline of candidates.

If you hire just in the first four weeks, you might not be hiring for the next stage of your company. Use the first four weeks to start socializing, start putting the word out there, and then build a new pipeline. We started getting a lot of inbound interest from talented candidates.

Give yourself time.

3. Don't hire talented people and assume you'll figure out their job later.

It's tempting to hire good people thinking you'll figure out later how to deploy them. In a way, that does make sense, because smart people will often create opportunities for you, but you have to realize that just because you now have money in the bank doesn't mean the scale you operate on has changed.

For example, you can't hire an online marketing expert and expect him or her to perform well if you haven't built the infrastructure for his or her role and his or her talents.

That's another reason to wait at least a month; that gives you time to shift your perspective, think about your organization, and figure out how you need to change to take on talented people so they can truly benefit your company.

Plus, when you hire talented people and assume they'll create work for themselves, that can lead to another issue...

4. Help the team maintain a true sense of goal and vision.

Raising money is an overwhelming task. A massive amount of activity, prefunding, is focused on achieving that milestone.

Once you do raise capital, there can be a vacuum of direction. It was a very exciting time, everyone was working really hard, the product was doing really well, we landed a number of new customers, and then there was this big feeling of validation because the investment community believed in us.

That's exciting--and that can create confusion as to what is next.

For the first four weeks, we had team meetings every Tuesday, recommunicating the implications of raising money, talking about immediate next steps, discussing how we would use the funds. It's important to enjoy the influx of capital, but it's equally important to bring it back into context and keep the vision straight.

5. Don't forget your investors.

During prefunding, you spend a lot of time talking to investors. Once you close, it's tempting to want to get back to work and focus on customers and building products, etc.

Although you have been talking to them for months, the conversations were more about long-term positioning and midterm execution. You rarely talk about the next three months and the next decision. Essentially you talk numbers, you talk vision, you talk about where you want to go.

Make your investors part of your tactical decision-making process. We scheduled the first official meeting four months after closing. That was too late. In those four months, we lost at least two months of valuable time where they could have helped make decisions and make a positive impact. Call an all-hands, follow-on in one room, within the first four weeks.

6. Hire an accountant.

Don't mess around with one-off spreadsheets or financial models you've created on your own. It's time to hire an accountant.

One, now you have real money and the obligations of managing financials, cash flow, etc. Two, now you have investors who want to know financial performance in various ways.

One may want a cash-flow analysis, another an income statement, another the tax implications of a new product. For a company that is not finance driven, those analyses may be distracting. Not doing them is not an option, and doing them on your own is not efficient. Once you're funded, the value a professional accountant provides is very, very high.

7. Create open dashboards.

Pick four or five key indicators of business performance and start sharing them with investors and employees.

In our case, with our subscription model, three key metrics are how many courses a single user takes, how long a user takes a course, and the rate of conversion from free trials to paid subscriptions. We look at revenue, marketing spending, etc., but those are numbers that make or break our company.

We looked at a lot of great tech companies, and the common theme for all was that their customers love their products. That's our goal, and our open dashboards tell everyone in the company exactly how we're doing.

All the greats know one thing: Nothing prepares future business leaders better than learning to survive and thrive under adverse conditions.

We tend to think of stress, competition, and adversity in a negative way. If you have no aspirations or happen to live in Utopia, you might get away with that. But if you want to go places in the real world, you'd better learn to embrace those concepts.

It's often said that successful executives and entrepreneurs thrive in highly competitive and high-stress environments. Indeed, they do. But they're successful because they learned to survive and thrive under adverse conditions, not the other way around. Nothing, and I mean nothing, will prepare you better to lead.

I was just reading an article that points out this interesting dichotomy. Working at technology companies like Apple, Amazon, and Intel can be highly demanding and stressful, but employees seem to thrive there.

In fact, many of those same companies are sited as great places to work. Young up-and-comers flock to them. Why? Because they know they're breeding grounds for the entrepreneurs and executives of tomorrow.

The cause and effect relationship between adversity and leadership doesn't start at work. Leaders often attribute their success to their upbringing or conditions where they grew up. New York City, for example, has spawned far more than its fair share of success stories.

Of 23 secondary schools that produced two or more Nobel laureates, nine are in the Big Apple. My high school in Brooklyn alone accounts for three Nobel Prize winners, not to mention dozens of famous executives, scientists, engineers, athletes, musicians, actors, and politicians.

Why? The ultracompetitive environment. Everybody was a character. We were always fighting for positions on sports teams, to stand out, or just to fit in. Also, we didn't grow up with much. If you wanted more out of life, you knew what you had to do. You really had to be tough. You had to be a winner.

Loads of successful executives and entrepreneurs started with nothing--except perhaps adversity. Starbucks founder and chief executive Howard Schultz grew up not far from where I did. So did Goldman Sachs CEO Lloyd Blankenfein's. His dad was a postal worker. So was mine.

Steve Jobs and Oracle founder and CEO Larry Ellison were both adopted by working class families. Former Verizon CEO Ivan Seidenberg started as a cable splicer's assistant right out of high school. AT&T CEO Randall Stephenson's first job out of school was working in Southwestern Bell's Oklahoma IT department.

And this isn't just an American phenomenon, either. Masayoshi Son, the founder and CEO of Softbank and Japan's second richest man, grew up in an illegal shack in southwest Japan. His Korean parents used a Japanese surname to hide their heritage and avoid discrimination.

Don't get me wrong. I'm not saying that, to be successful in this world, you have to have grown up dirt poor. I'm sure that plenty of top executives didn't have to fight for table scraps. But if you had spent as much time in boardrooms and start-up companies as I have, you would know how competitive and stressful it is. It's just one crazy problem after another. You're always making tough decisions under pressure and with too little information.

The truth of the matter is this. If you want to succeed in that environment, if you want to become a successful executive, entrepreneur, or business leader, then you need to embrace or at least learn to deal with stress, adversity, and competition. One thing's for sure. Avoiding it won't get you there. If you're looking for a stress-free work life, as they say in New York, fugetaboutit.

Before they even start to negotiate, entrepreneurs and investors often start off on the wrong track. How to better understand the person across the table.

What, exactly, is a 90-Day Wonder? It's a special kind of deal. The kind where, 90 days after you sign the papers, you wonder why you ever did the transaction in the first place.

For many investors, each new deal and each new entrepreneur is a distinct set of experiences - some good, some not so much - and it's an ongoing education for both sides. It can be very instructive and also very painful. Education is expensive, no matter how you get it.

If you want to avoid the 90-Day Wonder, it helps greatly if investors and entrepreneurs have a little insight into the way the other works. In this column we'll look at the biases that can trip you up before you get to the term sheet. In the next column, we'll look at what happens when you get down to brass tacks.

At the outset:

Don't Starve the Baby

Building a business may take less money than it used to, but it still takes some basic amount of capital. In negotiating an initial deal, both sides are perversely incented to starve the business. The entrepreneur wants to conserve equity to avoid early dilution at a low valuation. The investor wants to put as little capital at risk as possible. The upshot: A very real chance that the business is undercapitalized from the outset and never has the resources necessary to get a serious start.

Go Beyond the Boy Wonder

The investor, not the entrepreneur, has to make sure that the final deal provides for the entire management team and for players who will be named at a later date.

Many entrepreneurs see their business as a mission and a sacred crusade. He or she would basically work for free. This isn't usually the case for most of the other senior people, especially if they were lateral later additions rather than co-founders or early members of the team.

Because entrepreneurs are so intensely committed themselves, they very often fail to appreciate the differing levels of commitment that exist among the rest of the members of their team. They almost always fail to adequately provide for the rest of their team when they are dealing with the investors. It's very rarely an issue of selfishness. Usually, it's just the fact that they're so focused that they're oblivious.

Ask the Hard Questions

Making an investment is very often a time-constrained process. In a typical business deal, everyone's in a hurry. Because everyone wants to get to a deal, bad and ultimately unworkable agreements get made on a frighteningly frequent basis. Here are some of the things to watch out for:

• Hard and time-consuming issues get papered over or buried to be resolved "later" by someone else (often through litigation) because no one wants to be the "bad" in someone else's day.

• Otherwise smart and prudent people ignore their attorneys' advice on certain risks and with regard to undocumented or researched concerns. Instead, they focus only on the upside prospects of the deal.

• In the interests of smooth sailing, even seasoned veterans will accept superficial assurances and smiles instead of concrete answers, and will then go on to confuse good manners, pleasantries, and bad jokes with real agreement.

• The negotiators push the problems forward and delude themselves into believing that the details will all be settled during the implementation phase. It just doesn't work that way. In complex deals, you can bet that the easier the deal is to get done, the harder it will be to implement. And deals rarely, if ever, get better during implementation. Problems don't work themselves out or disappear - they fester and persist until someone takes responsibility for them and gets them resolved.

• Finally, instead of acknowledging and accepting that there are remaining open items and uncertainties, and instead of working together to construct metrics and contingency plans, the parties engage in mutual fantasies and shake hands on deals which are full of holes and more porous than Swiss cheese.

Data is changing business as you know it. Check out this excerpt from the forthcoming book, Too Big to Ignore: The Business Case for Big Data.

The following is excerpted from Too Big to Ignore: The Business Case for Big Data. John Wiley & Sons will be publishing this in early March 2013.

Much like the baseball revolution pioneered by Billy Beane, car insurance today is undergoing a fundamental transformation. Just ask Joseph Tucci. As the CEO at data storage behemoth EMC Corporation, he knows a thing or 30 about data. On October 3, 2012, Tucci spoke with Cory Johnson of Bloomberg Television at an Intel Capital event in Huntington Beach, California. Tucci talked about the state of technology, specifically the impact of Big Data and cloud computing on his company--and others. At one point during the interview, Tucci talked about advances in GPS, mapping, mobile technologies, and telemetry, the net result of which is revolutionizing many businesses, including car insurance. No longer are rates based upon a small, primitive set of independent variables. Car insurance companies can now get much more granular in their pricing. Advances in technology are letting them answer previously unknown questions like these:

• Which drivers routinely exceed the speed limit and run red lights?
• Which drivers routinely drive dangerously slow?
• Which drivers are becoming less safe--even if they have received no tickets or citations? That is, who used to generally obey traffic signals but don't anymore?
• Which drivers send text messages while driving? (This is a big no-no. In fact, texting while driving [TWD] is actually considerably more dangerous than DUI. As of this writing, 14 states have banned it.)
• Who's driving in a safer manner than six months ago?
• Does a man with two cars (a sports car and a station wagon) drive each differently?
• Which drivers and cars swerve at night? (This could be a manifestation of drunk driving.)
• Which drivers checked into a bar using FourSquare or Facebook and drove their own cars home (as opposed to taking a cab or riding with a designated driver)?

Thanks to these new and improved technologies and the data they generate, insurers are effectively retiring their decades-old, five-variable underwriting models. In their place, they are implementing more contemporary, accurate, dynamic, and data-driven pricing models. For instance, in 2011, Progressive rolled out Snapshot, its Pay As You Drive (PAYD) program. PAYD allows customers to voluntarily install a tracking device in their cars that transmits data to Progressive and possibly qualifies them for rate discounts. From the company's site:

How often you make hard brakes, how many miles you drive each day, and how often you drive between midnight and 4 a.m. can all impact your potential savings. You'll get a Snapshot device in the mail. Just plug it into your car and drive like you normally do. You can go online to see your latest driving details and projected discount.

Is Progressive the only, well, progressive insurance company? Not at all. Others are recognizing the power of new technologies and Big Data. As Liane Yvkoff writes on CNET, "State Farm subscribers self-report mileage and GMAC uses OnStar vehicle diagnostics reports. Allstate's Drive Wise goes one step further and uses a similar device to track mileage, braking, and speeds over 80 mph, but only in Illinois."

So what does this mean to the average driver? Consider two fictional people, both of whom hold car insurance policies with Progressive and opt in to PAYD:

• Steve, a 21-year-old New Jersey resident who drives a 2012, tricked-out, cherry red Corvette
• Betty, a 49-year-old grandmother in Lincoln, Nebraska, who drives a used Volvo station wagon

All else being equal, which driver pays the higher car insurance premium? In 1994, the answer was obvious: Steve. In the near future, however, the answer will be much less certain: it will depend on the data. That is, vastly different driver profiles and demographic information will mean less and less to car insurance companies.

Traditional levers like those will be increasingly supplemented with data on drivers' individual patterns. What if Steve's flashy Corvette belies the fact that he always obeys traffic signals, yields to pedestrians, and never speeds? He is the embodiment of safety. Conversely, despite her stereotypical profile, Betty drives like a maniac while texting like a teenager.

In this new world, what happens at rate renewal time for each driver? Based upon the preceding information, Progressive happily discounts Steve's previous insurance by 60 percent but triples Betty's renewal rate. In each case, the new rate reflects new--and far superior--data that Progressive has collected on each driver.

Surprised by his good fortune, Steve happily renews with Progressive, but Betty is irate. She calls the company's 1-800 number and lets loose. When the Progressive rep stands her ground, Betty decides to take her business elsewhere. Unfortunately for Betty, she is in for a rude awakening. Allstate, GEICO, and other insurance companies have access to the same information as Progressive. All companies strongly suspect that Betty is actually a high-risk driver; her age and Volvo only tell part of her story--and not the most relevant part. As such, Allstate and GEICO quote her a policy similar to Progressive's.

Now, Betty isn't happy about having to pay more for her car insurance. However, Betty should in fact pay more than safer drivers like Steve. In other words, simple, five-variable pricing models no longer represent the best that car that car insurance companies can do. They now possess the data to make better business decisions.

Big Data is changing car insurance and, as we'll see throughout this book, other industries as well. The revolution is just getting started.

To order the book on Amazon, click here.

By every meaningful metric, LinkedIn is kicking Facebook's butt.

Last week, LinkedIn reported results so positive that The New York Times credited the company (in part) with lifting up the entire stock market. Meanwhile archrival Facebook has suffered a string of negative stories, including studies revealing that most users go inactive on a regular basis, and that 50 million of its accounts are duplicates.

How awful is Facebook doing compared to LinkedIn? To find out, compare the two companies' year to year growth. As the following graph illustrates, LinkedIn is far surpassing Facebook on nearly every significant metric:

Source: Facebook's 2012 10K, LinkedIn 4Q12 Press Release

Regular readers of Sales Source might remember that I predicted back in April of 2012 that LinkedIn was a better long term bet than Facebook (which I believe will eventually go the way of Myspace.) Looks like, in the short term at least, my prediction is coming true.

To be fair, some of Facebook's 2012 drop in profitability was connected to the company's purchase of Instagram, which is an investment that still might pay off. Even so, Facebook's underperformance in revenue and user growth is pretty hard to ignore.

Why is LinkedIn doing so much better? In my humble opinion, it comes down to business fundamentals. LinkedIn has a better business model, is less vulnerable to competition, and has better (i.e. smarter and more mature) management.

It's really that simple.

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How do you know when it's time to go? Check out these five instances in which you may want to question yourself.

The simple reality is that sometimes what your venture needs to get to the next level is not what you want to do nor is it what you’re good at.

But it is extremely difficult to accept the idea that you should walk away. Nevertheless founders volunteer to give up the CEO job and many of them stick around after their successor comes in.

So how do you know when it’s time for you to quit? Here are five tip-offs.

1. Can’t get customers.

You started your company because you saw an unsolved problem and you designed a product that you thought was the solution. You got some capital from your friends and family and you’re still working on getting your product right before you put in the hands of customers.

In the meantime, you are burning through your venture’s cash. And when people ask you what you’re doing to get customers, you tell them that once you get the product right, those customers will beat a path to your door and the cash flow problem will evaporate.

If this sounds like you, it may be time to hire a CEO who understands the technology and the market and also knows how to get customers to pay for a product that they find valuable. You can still be of great value to the company by thinking about the venture’s future product direction -- but only if you are willing to let go and give the new CEO a chance to run the company.

Otherwise, your investment in the venture will be better off without you there anymore.

2. Can’t raise outside capital.

If you started your venture, built its first product, and convinced customers to use it, you have performed a valuable service. But unless those customers have the prospect of paying for your product, then your venture is likely to run out of cash.

You can see clearly that your product has great potential. But when you try to convince investors, they ask questions that you don’t want to answer:

• How big is the market that you are targeting with your product?
• Why will customers buy your product?
• What market share do you think you can take and by when?
• How will that market share translate into profits?
• How much capital do you need in order to turn those projections into real numbers?
• How long before you can pay back that investment?

If you don’t feel like it’s worth your time to seek out potential investors, meet with them, and answer these questions, then you might be able to hire a chief financial officer who does.

3. Can’t attract and motivate top talent.

Let’s say that your venture has not only been able to get customers but it’s succeeded in raising capital as well. At this point, you might be thinking that you have what it takes to bring your company to the promised land--an initial public offering or a sale to a big company like Google.

That may be true, but only if you can attract and motivate top talent. However, if you are only able to hire B players and you have to do that by luring them in with higher salaries, then you have a class A problem. And if you are able to attract top talent, but those A players leave after six months, the problem may be with your leadership skills.

You could get help fixing your venture’s culture, or it might be time to leave and let someone else attract the talent that you are driving away.

4. Can’t let go of product design.

It’s not unusual for me to talk with company founders who stick with their ventures after a new CEO has come in. And most of those founders are excited to be around their venture and happy that they have brought in a CEO with the skills that these co-founders lack in performing tasks that they do not find interesting in the least.

You might be like these venture founders. They loved working on the design of the product. And as the company grew, they were always tinkering with the designs that their engineers were developing. And in the process, the founders were throwing wrenches into the carefully constructed time lines that their product managers had developed.

These founders had no interest in supporting the efforts of their product managers. They wanted to build the new generation of products themselves, not manage other people who were doing that. One of these company founders gladly took a new role training new hires to be valuable contributors.

And with a new CEO in place, he can help the company he co-founded in ways that he finds stimulating while letting someone else take primary responsibility for boosting the value of his venture’s equity.

5. Can’t adapt to change.

If you have developed a product that has taken hundreds of customers by storm, you might conclude that you are the greatest entrepreneur who ever lived.

But if your venture is losing ground because you are a one-trick pony, do yourself and your shareholders a favor and step aside.

Stepping away from your start-up is tough, but if you fit in one of these five categories, not doing it is sure to be more painful.

Here's how you can get your website found--even if you're not an expert in SEO.

A friend recently asked me to write about the difficulties that start-up owners go through to optimize their website and get found.

Without optimization, your website will be a tiny speck of salt in a vast--and rapidly expanding--cyber universe. Chances are, your market is probably packed with competitors, and any SEO consultant is going to ask for thousands of dollars a month just for the basic package.

Aside from dedicating every waking moment to understanding how SEO works, what new tactics are trending, and what Google really dislikes this year (coming in the form of Penguin and Panda updates), it's going to be quite hard to start receiving significant sales in the first months--or year--after you go live.

Here are a few things you can do to get started:

Optimizing Your Page Titles

Adding meta titles to your pages is the first and simplest thing you will need to do to let search engines know, "Hey, I'm out here, and I'm relevant for this keyword".

Every SEO expert will tell you that prior to beginning, they will need to find what the relevant keywords for your site are. Truth be told, this is something you can also do yourself. If your industry is particular (or specific), you probably know it better than any consultant.

Do some research, and find out what the most relevant keywords for your site are. Look at your competitor's page titles, for example. Aside from this, I would focus on "long-tail" keywords, which involve phrase-like words and are more specific to a particular topic (3 or 4 words). Long tail keywords convert better, and are easier to rank for.

"Natural" Link Building

Everyone that has a website has heard about link building, which essentially entails getting other websites to link back to your site. How to do this, however, has changed dramatically in the past few years, and doing it incorrectly can actually hurt you.

Recently, Google's algorithms were created in a way to detect "unnatural" links like certain paid links, overdone anchor texts, etc. This can get complicated for a freshman SEO strategist, but the bottom line is, links should not be forced. They should happen organically, and the way to solicit them and be successful at getting good links has a lot to do with the content you create.

Great ideas for natural link building involve writing guest posts on interesting blogs, successful social media activity (and building followers), and associating yourself with other bloggers with relative interests. A high-traffic blog is only as good as its content, otherwise readers wouldn't visit it often. If your cause is interesting--and related to a topic fellow bloggers care about--chances are, they will want to talk about you.

Fascinate With Content

Aside from writing content on other blogs, you also need to write interesting content on your website. In the old days, writing content on your website could include a bunch of gibberish and bad grammar. As long as the targeted keywords were jammed in there somehow, you would have good rankings on search engines. Those days are gone. Nowadays, creating fascinating content is the one distinguishing factor that can be unique to you.

From info graphics to video blogs to inspirational stories, you have to put yourself out there. Say something bold. Write about things that people care about. Put out an inspirational image. Make your audience laugh, cry... make your readers identify with your experience. This is my strongest suggestion for any aspiring ecommerce start-up: start with a daily blog, build your followers, and then blend in your ecommerce shopping cart onto your site. If you apply the analogy of the chicken and the egg, content is definitely the egg, which comes first in my book.

Once you get these three points down, you should start seeing an increase in traffic, a deeper interest in your products, and eventually, it should transfer into sales. As soon as your sales start growing, reinvest your earnings on expanding your traffic-building strategies. From PPC campaigns, to affiliate marketing, to an SEO consulting firm, they're all options I recommend--once you have an initial following.

I still look back at the early years of doing business and think that the grassroots strategies we came up with back then--in the guest bedroom of my old condo--were far more brilliant and exciting than what we do now. It's hard, but doable! After all, what that's worth it, isn't?

The co-founder of Gilt Groupe on what it took to launch a luxury brand online when many partners didn't understand the basics of e-commerce.

The co-founder of Gilt Groupe on the evolution of retail and the harsh reality of "showrooming."

The co-founder of Gilt Groupe explains how she learned the hard way how to build a team that would last.

Your company's best advocates may be hiding in the nearest cubicle.

Your company's best advocates are not your PR team (no offense). Well, not just your PR team anyway.

According to the Edelman Trust Barometer, 50 percent of consumers said they trust "regular employees" to give them the low-down on a company's goods and services. Sixty-five percent put their trust in "people like myself" and 64 percent said they trust "technical experts" in a relevant field. In case you were wondering: Only 38 percent said they trusted the company CEO.

Before you wring your hands and perform backflips to win back consumer trust, consider this: Employees now represent more than half of your company's trust equity. Why not use it to your advantage?

Let Loose the Experts

One way to do it is to get your employees on social media--but that doesn't mean simply asking them to say nice things about your brand online. Let them use and broadcast their expertise.

Let them tweet about industry events, answer questions on Facebook, and blog about what they know.

HootSuite, an online platform that helps businesses manage their social media interactions, has this to say on the subject:

"Enterprises strengthen their brands enormously by activating these internal thought leaders on social media. Employee blogs and social media profiles allow workers to build personal brands online and form public records of expertise that also reflect well on their employer," the company wrote in a recent white paper report.

But Can You Trust Them?

Of course, enlisting your employees to speak on behalf of your brand shouldn't be undertaken lightly. Surely you've witnessed good tweets gone bad. (Remember those horrifically timed #Aurora tags? Or the recent live-tweeted lay-offs at the British entertainment retail company HMV?)

Before you encourage your employees to broadcast their inner experts, consider what kind of engagement you see from them on a day-to-day basis. "Don't treat every opinion the same," says Cy Wakeman, founder of the management consulting firm Bulletproof Talent, in a recent editorial. "Listen to what your top performers tell you. They've proved their value and earned their credibility, so go ahead: play favorites."

Allowing employees greater responsibility--then holding them accountable for the results--is the best way to empower your workforce, she says. According to Wakeman, employee empowerment is the new employee engagement--and may lead to greater company productivity and genuine employee investment in a brand or product.

They'll Fight for You--if You Let Them

Empowered employees, when you think about it, might make your best sales people.

"In social media, there is nothing more powerful than someone advocating for your brand," writes Matt Foulger, HootSuite's Enterprise Marketing Coordinator, in a company blog post. "Advocates give their friends, families and colleagues trusted advice that is far more credible than any source of advertising. They defend a business against negative messaging in the countless small interactions that determine a brand’s health. They volunteer ideas for product and service improvements. And they do it all for free."

So go ahead and trust employees to represent your brand. They might surprise you.

The co-founder of Gilt Groupe says the difference between male entrepreneurs and female ones comes down to something men get that women don't.

The co-founder of Gilt Groupe on the value of scarcity and the imperative to keep things fresh.

How Gilt Groupe uses every and all social media platforms to build the Gilt brand.

The co-founder of Gilt Groupe on her greatest lessons, biggest inspirations, and most painful mistakes

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The co-founder of Gilt Groupe reflects on how the company maintains an intimate customer experience even as the company grows.

Abraham Lincoln was an early master of public relations. On the anniversary of his birthday, here's what you can learn.

Although Abraham Lincoln is often remembered as one of our greatest Presidents, few people have taken the time to study his complete mastery of the then-unknown art of what we today call public relations.

As a serious Civil War buff and quasi-PR expert (hey, I run a public relations firm, but I don't claim to have all the answers!), I've listed six sure-fire tips pioneered by Honest Abe that will help enhance the image and reputation of any entrepreneur:

1. Nurture the brand of you.

Abe Lincoln was an absolute master at currying favor with the White House press corps, sharing tips and quotes with many leading, pro-Republican reporters, and actually composing many speeches right in their newsrooms as reporters watched in fascination.

Tip: Establish relationships with the trade and regional press that cover your industry. If you begin sharing the types of tips and trends that Abe did, you'll soon find the media calling you for quotes, columns, and case studies.

2. Share the wealth.

As Doris Kearns Goodwin chronicled in A Team of Rivals, Lincoln populated his Cabinet with the very people he defeated for the presidency. They were the best and brightest thinkers in the land. Lincoln not only sought their counsel but made sure the media knew they were involved in key decisions.

Tip: One of the biggest challenges entrepreneurs face is scaling their business and persuading prospects to trust the owner's managers and employees and not him alone. The sooner you establish a strong team and publicize its abilities and points of view, the sooner you'll stop being perceived as a one-man band.

3. Embrace new technology.

In his superb book, Mr. Lincoln's T-Mails, Tom Wheeler describes our 16th President's complete mastery of an emerging technology called the telegraph. Like Twitter, the telegraph forced a writer to be concise. In one classic exchange with General Grant near the end of the war, Grant telegraphed Lincoln, stating: "If the thing is pressed I think that Lee will surrender." Lincoln's Twitter-like response? "Then, press the thing."

Tip: Take advantage of Twitter, blogging, LinkedIn, and other emerging technologies to heighten your own awareness and thought leadership (while demonstrating to Millennial employees and prospects alike that you're just as conversant with what's new as they are).

4. Use comedy to defuse a crisis.

When Secretary of War Edwin M. Stanton rushed into the Oval Office waving a report that the hugely successful General Grant had once again fallen off the wagon and had been drinking heavily, Lincoln leaned back in his chair and said with a sigh, "Tell me what brand of whiskey that Grant drinks. I would like to send a barrel of it to my other generals." Conversely, when bedeviled by weak commanders, Lincoln attempted to use humor to motivate them. Exasperated by General George McClellan's unwillingness to engage in battle with Robert E. Lee, Lincoln sent a telegram that read: "If General McClellan isn't going to use his army, I'd like to borrow it for a time."

Tip: Comedy can be a huge strategic advantage as well as a differentiator for any entrepreneur who, like Lincoln, knows exactly how and when to use it.

5. Allow yourself to be vulnerable.

Lincoln was never afraid to be photographed at times of great despair. Nor was he afraid to share his grief with the nation when his son, Willie, died of tuberculosis in 1862. Lincoln also pardoned so many soldiers for so many crimes they had committed that Attorney General Edward Bates had to intervene and ensure that only the most deserving cases came to Lincoln's attention (otherwise, Bates feared, Lincoln's empathy would undermine the Army's discipline).

Tip: To err is human; to forgive, divine. I'm a big believer in allowing people to fail (as long as they learn from their failures). I'm also the first to share one of my failures with staff. I believe vulnerability is key to any entrepreneur's leadership.

6. Timing is everything.

Lincoln knew that by freeing the slaves, he would elevate the Civil War from a battle between the states to a righteous, moral struggle. But he first needed a major Union victory to reinforce the hopelessness of the Lost Cause. Unfortunately, Confederate Generals Lee, Stonewall Jackson, and James Longstreet consistently beat their Union counterparts throughout 1861 and '62. It wasn't until after the Battle of Antietam, which, although a stalemate, checked Lee's first invasion of the North, that Lincoln felt he had a positive enough outcome to announce the end of slavery. He issued the Emancipation Proclamation a few months later.

Tip: Most entrepreneurs are adrenaline junkies who believe every move they make belongs on the cover of Inc. Let's just face the fact that (most likely!) it doesn't. Lincoln waited for just the right time and circumstances to announce real news, and so should you.