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Sure, you've heard about the sharing economy before. But this time you need to listen.
It's communism. It's an unsustainable fad. It's a seismic social and economic shift that will forever change the way people consume.
Most reactions to "the sharing economy" fall into one of these categories, and chances are decent that at least two out of three are correct. But those who dismiss collaborative consumption as a business narrative they've heard before--that is, naysayers in the first two camps--simply aren't paying attention.
It's true that the P2P networks of today--Airbnb, Kickstarter, TaskRabbit--have technological roots spanning the open-source movement of the early 1990s and the earliest P2P auction websites (yep, eBay). Still: The sharing economy of 2013 is not the Red Hat play of 1998.
This is not about achieving economies of scale on intellectual capital or challenging the definition of ownership in a digital economy. It's not even about eliminating the middleman and connecting people one-on-one to eke value from outgrown clothes and vanquished video games.
"What's actually happening is that these sharing-economy companies are going places where Adam Smith's 'invisible hand' cannot," writes Dominic Basulto (@dominicbasulto) for the Washington Post. "They are re-calibrating supply and demand, giving consumers access to otherwise unused capacity or idle assets." They're companies led by capitalists, sharing economy or not.
Now don't get us wrong. We acknowledge that today's collaborative consumption was made possible by the technological investments and social revolutions of earlier generations. So perhaps the storyline is a familiar one. But this version is different--in large part because of its heroes and heroines.
"Forty years ago, even 20 years ago, a young person's first thought, or even second or third thought, was certainly not to start a business. That was selling out--an idea that has rather tellingly disappeared from our vocabulary," writes William Deresiewicz in the New York Times. "Today's ideal social form is not the commune or the movement or even the individual creator as such; it's the small business. Every artistic or moral aspiration--music, food, good works, what have you--is expressed in those terms. Call it Generation Sell."
Despite what you may have read in Time, the Millennials are not "lazy, entitled narcissists" seeking instant celebrity. They are born entrepreneurs who've grown up watching Google and Apple innovate at terrifying speed and thinking that business-model disruption is, quite simply, business. The founders of Facebook, Airbnb, Tumblr, and FlightCar are mostly Millennials, and they are successfully creating markets where none existed 10 or even five years ago. At this point, the question is not whether collaborative consumption will catch on (it's already a way of life for a generation), but whether government regulation and taxation is powerful enough to quash it. They same question could have been asked of the first post-Industrial entrepreneurial generation as well.
Is it a coincidence the oldest Millennials were born the same year Apple launched the Macintosh with its now-iconic "1984" TV ad and just after Inc. unveiled the Inc. 500--the first-ever index of the entrepreneurial economy? Yeah, we didn't think so either. Seems like there's an equation here somewhere: sharing + business + fearlessness = what? Something sizable, we think. The sharing economy has arrived.We built this engine. Now let's see what she can do.
Your employees might have you pegged, but how well do you know yourself?
Your employees might have you pegged, but how well do you know yourself?
Your employees probably have you pegged--as a relentlessType A charger, a ponderer who can’t make decisions, a reclusive visionary, or a hothead who throws things. But how well do you know your own leadership style?
There are several widely used personality tests out there, and you may know your Myers-Briggs, Color Q, or DiSC type. Our tool--which is based on leadership styles identified by psychologist and author Daniel Goleman--isn’t intended as a substitute for other personality evaluations. But if you jump in and answer honestly (as the boss you are right now, rather than the one you aspire to be), you just might get the affirmation, reality check, or wake-up call that you need.
Thin and light laptops usually mean poor performance. Not so with these three brand new performance models.
The idea of a thin and light laptop makes sense for business trips and meetings. You slide a svelte notebook into your messenger bag and off you go.
Unfortunately, my experience using the thinnest models is that they are thin in another way: on actual processing power. You can run a Web browser and browse a few photos, but forget about Adobe Photoshop or a massive spreadsheet with detailed charts and reams of data. There just isn't enough oomph.
Recently, I tried a few "air" notebooks running Windows 8 to see if they met my needs. I tend to use Google Docs for light writing when I travel, but I'm also a power user who will load a 3D modeling app on a whim to design a part for the Makerbot. As a journalist, I also use Photoshop routinely to edit very high-resolution photos in the RAW format. Each of these systems powered through my tests with no problems. They booted in only a few seconds and performed like a desktop machine.
1. Sony VAIO Pro 11/13, $1149
The first thing you notice about the Sony VAIO Pro (which comes in a 11-inch model and a 13-inch model) is how light it is. I tested the 11-inch model and it weighs less than a food tray you'd find in the cafeteria--only 1.9 pounds. There's a high-speed SSD drive inside to speed up data transfers, and the high-end configuration I tested uses an Intel Core i7 processor. The case is made from a durable carbon-fiber material. The touchscreen was responsive in my tests. The Duo 11 lasts seven hours on a charge, but there's an optional 14-hour battery pack. The 11-inch is only .68-inches thin. If you go with the 13-inch, it's also .68-inches thin.
2. Acer S7-392, $1449
The sleek, all-white Acer S7 touch notebook uses Gorilla Glass on the top cover for extra protection and an eye-catching look. Like the Duo 11, the Acer S7 lasts about seven hours on a charge. One plus: the S7 now comes with 8GB of RAM for a performance boost. The model I tested had a Core i7 processor; the touchscreen worked flawlessly for me. Another big perk: the S7-392 has built-in Wi-Di (Wireless Display) for connecting over wireless to an HDTV. That helps with presentations, but you'll need a receiver on the HDTV like the Netgear Push2TV. The S7 measures only .51-inches thin but weighs 2.8 pounds--a bit heavier than the VAIO Pro.
3. Samsung ATIV Book 9, $1499
The ATIV Book 9 notebook from Samsung weighs 2.6 pounds and is .50-inches thin with a 13-inch non-touch display. Like the Sony and Acer thin and light models I tested, this laptop uses a fast Intel Core i7 processor. It's the shortest-lasting of the bunch at only five hours, one-third the staying power of Sony's extra battery at 14 hours. One interesting perk, though: the ATIV comes with a technology called SideSync that allows you to see the actual screen of your Samsung Galaxy phone on the laptop's screen.
Thousands of start-ups will go under for lack of Series A funding. That's a problem, all right. But not the problem you think.
Ash Rust had good reason to think his start-up would take off. He's a co-founder of SendHub, a start-up that lets companies set up corporate phone systems using their employees' smartphones. In 2012, Rust and co-founder Garrett Johnson raised $2 million in seed funding in two weeks. Their service worked well, and more than 5,000 businesses signed up. So when it came time last spring to hit up VCs for the several million dollars in Series A funding SendHub needed to keep growing, Rust expected smooth sailing.
The results caught him by surprise. "We were told we weren't far enough along," he says, "that the market was too competitive, that we just weren't the right company." By his count, he and Johnson sent thousands of emails to potential funders and went to about 100 meetings, all over the course of three months. But they came up empty-handed. In June, with only three months of funding left to stay afloat, SendHub laid off two of its 12 employees and cut expenses in half. "It was easily the most stressful period of my life," says Rust.
Rust's experience fits the template of the "Series A crunch," a story that's been roiling the start-up community for the past couple of years. It goes like this: After slogging through six months to a year of frenzied product development and user testing, seed-funded tech start-ups are fatally hitting a wall-;the million to several million dollars in VC funding they need to scale up their cool new services is nowhere to be found. The result is the cruel and needless throttling of a vast stream of promising fledgling companies down to a mere trickle of survivors.Share of seed-funded companies that won't be able to get follow-on funding: 61%Source: CB Insights
That's the story, anyway, and it has the start-up community vibrating with angst and debate. But that's not the whole picture. The Series A crunch is really just shorthand for a broader, longer-range shift in the start-up ecosystem, one that has unleashed an explosion of new companies and a revolution in the system that funds them. Yes, it's true that the situation has created far more demand for venture capital than there is supply of it, and many new companies will perish in infancy as a result.
What many entrepreneurs don't realize--or, more likely, would prefer not to admit--is that this is not a bad thing. For all the hand wringing, the Series A crunch is not a sign that the system for funding start-ups is broken. On the contrary. This is how it's supposed to work.
The Crunch Is Real--But it's Misunderstood
It's true, the odds of a seed-funded start-up getting Series A funding have dropped substantially over the past few years. The exact numbers are much debated-;and also depend on how seed and Series A funding are defined. (Seed is typically a few hundred thousand to a couple million from angels and early-stage VC firms. Series A typically ranges from a few million to $15 million from VC firms.) But almost everyone agrees that a much lower percentage of very-early-stage companies is getting follow-on funding, with a typical estimate suggesting there has been a drop from perhaps 1 in 3 being funded in the past to 1 in 6 today. According to a report from research firm CB Insights, the crunch will probably strand more than 1,000 start-ups this year.
But it's not because there are fewer seed-stage companies that go on to get funded at the $5 million or so level. It's because the number of seed-stage companies has ballooned--to more than 1,700 in 2012, up 64 percent since 2011, according to CB Insights. "It's become much easier to start a company and raise seed capital," says Keith Rabois, a partner at VC firm Khosla Ventures. Rabois held key roles in the early growth of PayPal, LinkedIn, and Square and has supplied angel funding to some 70 companies. "It just hasn't become any easier to raise a Series A. The funnel is wider at the bottom and the same at the top, so there's more of a narrowing, and that's creating more disappointed entrepreneurs."
One of those disappointed entrepreneurs is Benjamin Zises, who founded RetailMLS, an online real estate listing service for retail spaces. His company raised $1.9 million in seed funding in 2011 and 2012. When those funds began to run low and Zises started contacting VCs earlier this year, he collected what would ultimately prove a long, unbroken string of rejections. "We've really had a lot of trouble," he says, adding that he has kept going by offering employees stock in place of much of their salaries.
Still, the narrowing of the funnel isn't necessarily bad news for entrepreneurs. The key to understanding why lies with looking at why so many more companies are getting seed funding and what's going on with those that don't make it to a Series A.Average amount raised per angel or seed deal in 2012: $880,000Source: PitchBook
Seed Funding Is Easier to Get...
One reason so many more companies are getting seed funding is that there are so many more investors to provide it. Until recently, seed funding was mainly the territory of angel investors, traditionally wealthy former entrepreneurs who hit it big and who can write checks for a hundred thousand dollars in exchange for a small percentage of a company. But now a variety of other players are getting into the angel game.
In particular, Silicon Valley is seeing the rise of angel syndicates and crowdfunding collectives that let smaller investors, who wouldn't otherwise have enough money to be angels, pool their resources. One of those is FundersClub, which, as of August, has pumped more than $100 million into 31 start-ups, with its numbers growing fast. Alex Mittal, the CEO of FundersClub, co-founded the organization in 2012 to "democratize" funding, after living through the time-sucking strain and hassle of raising money for his three start-ups.
Another organization, AngelList, founded in 2010, has helped reduce friction in angel rounds by matching founders and angels online. To boost its impact and free up even more angel money, AngelList founder and CEO Naval Ravikant recently unveiled a new service that allows a single angel to act as a lead investor in an angel group that invests in a single company, with that lead serving as sole signing authority in order to simplify the process. "The lead angel takes 20 percent or so of the profits, providing a huge incentive to keep working with the company," says Ravikant. "And the entrepreneur only has to deal with the person they trust in the first place." Ravikant led the first bundled investment himself, putting in $25,000 and raising $350,000 from other angels online.
Another growing source of seed-stage funding is VC firms, which have essentially been forced to become active very-early-stage investors. That's because angel funding has become so prominent in the company-building process that by the time founders start meeting VCs, they've already established close relationships with one or more angels, stealing from the influence VCs have long enjoyed in Silicon Valley and making it harder to get in with the hottest start-ups when they're ready for larger funding amounts. In the race to beat out other investors, VCs now act as angels--and they tend to be somewhat less discriminating than angels have traditionally been because they can afford to be, given that a $100,000 check is coming out of a massive fund rather than their personal savings.
...And You Need Less of It
Even as seed money has gotten looser, start-ups need less of it to get off the ground. Development tools for building a high-functioning website and the services behind it have become cheap, high powered, and easy to use. The cost of servers and other hardware has continued to drop. "Three years ago, companies could for the first time get all the way through a prototype of a service before they even raised seed money," says Ravikant. "Two years ago, they could make it through launch before raising money. Now, they can start to get traction with a user base by the time they come looking for seed money."Average amount raised per Series A round in 2012: $5.3 million Source: PitchBook
Even some of the technologically ambitious start-ups are finding they can get by with a fraction of what it used to cost to get off the ground. Patrick Riley, co-founder of Ark, which is creating a search engine for finding people, notes that several years ago, his company would have had to build its own servers to meet its needs. But now, they're inexpensive commodities. "It's been cheaper to build this company than it was to do my Ph.D. project," says Riley.
The result is that instead of needing as much as $1 million or more to get going, start-ups are often able to run with $100,000 or so for six months, which can be plenty long enough to get to a fairly polished product and a loyal user base. With companies needing less money and more cash than ever available for seed funding, it's obvious why there has been an explosion in the number of start-ups vying for Series A funding--to more than a thousand a year.
The Hurdles Forgetting Series A Funding Haven't Changed
The basic requirement for getting Series A funding is simple and hasn't changed in a decade: Have a better chance of getting to be a billion-dollar company than most of the other start-ups competing for funding. Getting a chunk of a single Facebook, Twitter, or Instagram is so phenomenally lucrative that it greatly outweighs whatever a VC firm has lost or won in all its other dozens or hundreds of bets on start-ups.
"It has nothing to do with how likely it is you'll be profitable or whether you're going to have 10 million users," says Jason Freedman, founder and CEO of commercial real estate site 42Floors, his third company. "There's no room at VCs for companies that are going to merely be very good. If you can't prove you have a chance of building a truly great company in eight years, no one will want to fund you for the next two."
That's one of the reasons VCs gave for turning down funding for RetailMLS, explains Zises. "They said we could be a $200 million business, and that wasn't enough for them to want to invest in," he says. "They have nonrealistic goals." On the other hand, search company Ark, which is gunning for a chunk of Google's market, is being wooed by VCs. "Anyone can make a Groupon for dogs and get it up quickly," says Riley. "Only a small number of people in the world can design a search engine and roll it out at scale."
Another factor in the Series A crunch equation is the fact that the amount of money available for Series A funding has barely budged in recent years, mostly because that money is determined by how much pension funds pump into VC funds--and pension fund investing tends to change little year to year. More start-ups competing for that money, and those start-ups doing more with less money, means that on paper, at least, the numbers that a start-up has to present to a VC to make the grade have all gone up-;way up. "The bar is at least twice as high on what VCs expect," says Brian Pokorny, a longtime prominent angel investor, most recently as a partner at angel investment firm SV Angel, who ran a start-up called DailyBooth. "If whatever market traction you used to have to demonstrate to get funding was X, it's now at least 2X."
That's a major reason SendHub was turned down by VCs, even though it already has tens of thousands of dollars in monthly revenue and sales are growing 25 percent a month. "Showing revenues can actually be a drawback, because it gives the VCs a clear measurement that they can find less than overwhelming compared to some other start-up," says Rust. "But if you're prerevenue, you can sell the company on dreams for its multibillion-dollar potential."
Revenue isn't the only metric VCs look at. Growth in user numbers is another big yardstick, but even low user numbers can be overlooked if there's a surge in growth or an unusually high level of engagement among users. Or if the service is starting to capture a previously untapped and potentially large bucket of users. AnyPerk, a start-up that hooks up employers with discounts for their employees, took off last year. It quickly signed up a string of top-tier customers and is clocking 40 percent monthly revenue growth. Now, the VCs are very interested. "They don't care about our pitch or who we are, the way they did in our seed round," says co-founder Taro Fukuyama. "They just want to see that we have good numbers."
All in all, most observers agree, the entrepreneurs who are making it through to Series A these days don't need to be significantly sharper--nor do their ideas need to be substantially more brilliant-;than those who did it four years ago. They just need to be able to keep up with the technology and the market in order to push their start-ups further along the path toward demonstrable potential greatness than was the case four years ago.There were 1,749 seed deals in 2012 and 692 Series A deals in 2012. Seed-funding deals increased 64% from 2011 to 2012 and Series A deals decreased 2% over that same period.Sources: CB Insights; Pitchbook
Who, then, are the expanded hordes of entrepreneurs who aren't making the grade? It's largely newbies and people who haven't yet figured out they just aren't that great at creating a business. These entrepreneurs wouldn't have made it four years ago, and they're not going to make it today--there are just more people today ready to give it a go and who are getting a chance to fail because of the increased availability of seed funding. "The Series A crunch is the great culling of lesser entrepreneurs and ideas," says Freedman.
In fact, almost everyone interviewed for this article agreed that, for all the difficulties it creates, the Series A crunch isn't causing any truly promising companies to bite the dust. The founders being turned down probably shouldn't be trying to raise a Series A round, many argue. They got a shot and ended up proving that their idea doesn't make for a great business. When they get a no from the VCs, they're getting the right answer.
The Series A Crunch Is Good for Entrepreneurs
Many insist that this culling of start-ups is in the end good for all entrepreneurs and for several reasons. For starters, those entrepreneurs whose companies are destined to fail are much better off being shut down eight months into the journey rather than years later, after they've sweated a lot more blood and have dozens of employees who are dependent on them. "The crunch is only going to stop those who wouldn't have succeeded anyway," says Jessica Mah, co-founder and CEO of inDinero, maker of a money-management tool of the same name. Mah raised $1.2 million in seed funding for inDinero, and at 23, she is on her second company. "If you're actually good at this, then you'll learn from the experience and be much better the next time around," says Mah. "If you're not good at this, you want to find out as soon as possible."
That's not to say there isn't a dark side to the crunch. There is, and it can be measured in the pain and disappointment most entrepreneurs experience when they can't keep their companies afloat after a year of frenetic activity, high hopes, and, toward the end, increasing desperation. "It's the equivalent of throwing someone into the pool to teach them to swim," says Khosla's Rabois. "Some people do really well with that sort of struggle--it makes them grow faster and become stronger because of it. Others sink and feel thrashed and destroyed, and end up becoming emotionally fragile in a way that's hard to recover from." The result is that some people who might have made successful entrepreneurs if they had gone through a gentler, more supportive system are driven out of the field by the race-into-the-brick-wall trauma of the crunch.
Rabois's advice for dodging this trauma: Don't bank on getting VC funding unless you're obsessed. "The only people who end up making successful founders are those who just can't stop themselves from pursuing their idea," he says. "They can't sleep because they're thinking about it all night, they can't stop talking about it, they can't focus on their relationships. Those people have no choice but to take that leap of faith, and they might actually have a good shot at it if they have the right skill set. Everyone else isn't cut out to start a company in this environment. They should join someone else's company."
Indeed, adds Rabois, the funneling of failed entrepreneurs into employment is another of the great benefits of the crunch. The fact that so many people want to start companies has created a serious dearth of affordable talent for great start-ups that find themselves competing for software engineers with the likes of Google. If it weren't for the crunch kicking so many gifted technology and marketing people out of the company-founding game and into employment, even some of the best start-ups would be foundering for lack of people to hire. "The limiting resource on tech start-ups is not funding; it's talented people," says Rabois. "If the talent pool gets too fragmented among too many start-ups, most of them won't be able to reach the critical mass of talent needed to succeed." Of course, that's easy for him to say.
But even if your company runs out of funding and fails, that doesn't make you a failure, argues Matt Brezina, an angel investor who is co-founder and CEO of Sincerely, a company that produces a number of gift-giving apps; his first company, Xobni, sold to Yahoo in June. Brezina contends that starting a business--even one that eventually flops--is one of the most effective management education and training programs in the world. As far as investors are concerned, there's no stigma attached to launching a company that fails to take off. In fact, you will have a much better chance of attracting funding the next time around. "Going through that process is the best training experience ever," says Brezina. "When you've gone through it, investors know you can hire, you can raise money, you can execute on a business idea. Investors want to see that experience behind you."
There's A Way to Beat The Series A Crunch
Entrepreneurs can do an end run around the Series A crunch. For starters, groups such as AngelList and Funders-Club, which have mostly aimed at seed funding, are moving aggressively into bigger rounds. Outbox, a start-up that digitizes postal mail, was turned down by a number of VCs, but it pulled together a $5 million Series A in June largely based on bundled funding from some 70 investors put together via AngelList. That option won't be available to every company that can't impress the VCs, but it can help some.
And there's another way to beat the crunch: Focus on building profits early. That strategy tends to be a poor one for scoring big rounds of VC funding, because early profitability usually requires focusing on small niche markets and then reducing the customer base even further by charging handsomely for your service. Most VCs want little to do with start-ups willing to settle for a tiny and less-than-fast-growing market, even if they're making good money at it. That's why VC-funded companies tend to ignore profits and concentrate on churning big user numbers any way they can. But as long as you're making money, you can keep going and growing and thumb your noses at the VCs--as well as at all your funding-starved fellow entrepreneurs--while you're doing it.
One start-up that's going this route is PlanGrid, whose iPad app provides an elegant way of handling design blueprints. After a $1.5 million seed round last year, the company has already hit profitability, and it has no immediate intention of raising any more money. "My bigger problem is convincing our seed investors that we don't need a Series A," says co-founder Ryan Sutton-Gee. Eduardo deCastro also decided against raising money. He's a co-founder of HashFast, a start-up that sells specialized hardware for the computing-intensive tasks that support the bitcoin virtual-currency market. DeCastro didn't like the terms VCs were offering-;and ended up not needing the cash after customers forked over a combined $6 million in orders for the company'sfirst product.
Brezina's company, Sincerely, looks as if it may turn out to be a slow-growing, profitable, VC-less company, and he says he's fine with that. "We're not taking off in the market," he says, "but this might be exactly the right way to build the company." The Series A crunch, as painful as it may be for founders who get far enough to feel its squeeze, clearly isn't preventing the good companies from moving ahead. That's what SendHub's Rust ultimately decided. He finally raised $2.8 million in Series A funding, after all the initial rejections led him to focus on groups such as FundersClub and AngelList. "This has been a serious test for me and the team," he says. "But what it's made me realize more than anything else is that I love doing this and wouldn't want to be doing anything else."
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."
Research professor Bren Brown explains the ways uncertainty, risk, and emotional exposure are essential to a successful entrepreneur journey.
When it comes to giving feedback, delegating responsibilities, or encouraging innovation, all the good stuff happens when you're vulnerable.
Here's how, as a leader, you can harness uncertainty.
Why vulnerability is the first thing you look for in other people, but the last thing you want to reveal in yourself.
Indeed, research professor Bren Brown says you can't innovate without vulnerability.
A new partnership between Intuit and Square could help streamline your bookkeeping.
Later this fall, small businesses that use Square's mobile credit card readers might have an easier time managing their bookkeeping. Intuit has announced that it is launching a new service on November 19 that will synch Square with Quickbooks.
Though many details about the partnership still remain unclear, an Intuit spokesperson noted that Square Register, Square's point-of-sale software, will be offered as an option to current QuickBooks users. And Square Register users will be able to easily transfer their sales data into QuickBooks.
Intuit already has its own mobile credit card processing device, GoPayment, which automatically synchs with Quickbooks, but, until now, Square's 2 million-plus users were out of luck.
"With the Square integration, a local retailer or restaurant may choose Square, while an invoice or service business--like a travel agent or accountant--may select one of Intuit’s payment solutions, such as GoPayment or QuickBooks Point of Sale," says Dan Wernikoff, senior president and general manager of Intuit Small Business Financial Solutions.
Intuit has yet to release pricing information for the new service. For now, the company will continue to offer GoPayment, whose most popular plan costs $12.95 per month.
One entrepreneur explains how biking directly benefits his daily business life.
You've heard about how poorly the motorcycle manufacturers are doing these days. Sales and profits are down, some plants are in danger of closing, and now dealers with multiple dealerships in one city are being asked to consolidate into one location. They say it's because 'discretionary spending' is down. But I have a question: When did owning a motorcycle become discretionary?
I believe that owning a motorcycle is as American as entrepreneurship--and vital to a founder's long-term business success. I learned many years ago that the skills and techniques necessary to be a successful biker directly transfer to my daily business life.
1. Running a business is one long road trip.
The first thing bikers learn is how to get from here to there safely and successfully. Bikers know how to select the right destination, plot out the right course to get there, and prepare for the unexpected. Bikers know how to overcome adversity along the way, whether it's bad weather (the economy), poor road conditions (market fluctuations), or crazy cagers (competitors). Both biking and business are nothing more than vehicles designed to take you where you want to go: one physically, the other economically.
2. Both business and biking require you to assume reasonable risk.
And if not done properly, they can both cause severe damage to you. Staying upright requires awareness, timing, and a keen ability to sift through the background noise and B.S. that surrounds you. So the lesson from both is not about overcoming fear, but instead understanding and embracing it. Because riding scared is a fast ticket to the hospital--or business failure.
3. I like hanging out with real people.
Bikers and entrepreneurs are a similar and bold lot. Both groups are independent, adventurous, strong-willed, and utterly intolerant of fences. Go to any biker hangout and you'll see business leaders and professionals sitting next to mechanics, carpenters, and full-time bikers. They come together to celebrate the culture of riding, to exercise their passions. And they come together to have the type of real-life, frank conversations that can only happen between two people with nothing to gain but an honest point of view. When's the last time that's happened to you at a chamber of commerce meeting?
4. Passion is the fuel of desire.
When that desire is properly channeled, you achieve excellence. On a bike, it's about feeling the crisp air while navigating the winding road. In business, it's putting yourself out there on the winding roads of the marketplace. With both, happiness comes when you turn our passion into performance.
5. Biking is a total attitude adjustment.
Ask any entrepreneur who rides and he'll say the same thing: I ride to get away from it all for a while. I do some of my best thinking in the saddle because my synapses are popping right along with that V-twin. Riding an open road seems to charge my brain impulses with an even hotter spark as the sights, sounds, and smells combine to rev up all my senses.
I'd definitely rather be riding my motorcycle thinking about my business than sitting in an office thinking about my motorcycle.
But this is just my opinion. I could be wrong. So, if you disagree or simply want to comment, please do so in the section below. I look forward to your point of view.
In November, Dwain M. DeVille will co-host and co-lead the first-ever Inc. Riders Summit, a three-day motorcycle road trip through the Nevada desert for entrepreneurs. For more information about the ride, the entrepreneur-led business sessions, or the networking, click here.
Senator Cruz got plenty of attention for his marathon speech decrying the Affordable Care Act. But is he actually leading?
If pragmatic leadership connotes a capacity to move agendas ahead by appreciating the subtitles of winning people over, then zealot leadership--the type of leadership recently displayed by Senator Ted Cruz--is the exact opposite.
Zealot leadership is not simply ideologically committed leadership. It is not simply a strong adherence to a particular goal or idea, but rather a personally uncompromising sense of calling, is based on an entrenched pursuit of an idea that you believe is indisputable.
Adherence to a particular goal or outcome is a wonderful leadership trait, but in the hands of a zealot leader this virtue becomes a handicap. Zealot leaders forget that the key to leadership is essentially getting results by moving agendas ahead.
As a zealot leader, Senator Cruz has forgotten that leaders need to:
1. Get beyond their base to move agendas ahead Zealots often spend time talking to their fellow believers and reaffirming their ideological base as if this reaffirmation will energize their agenda.
Pragmatic leaders, on the other hand, appreciate that if the base is the only focus, then the base can quickly become a cult. Pragmatic leaders, no matter how committed they are to their core believes, understand that they must get beyond their base and avoid alienating those with whom they may not totally agree with, but have much in common with.
2. Never present commitment as self-righteousness Pragmatic leaders understand that conveying a strong sense of commitment and a deep sense of appreciation is a way of empowering others. The more they share their passion and belief in their agenda, the more they’re likely to spark an interest in others.
In the hands of zealot, commitment and passion often sound like self-righteousness. When commitment and passion become self-righteousness, even your closest allies may become a bit weary, fearing a level of inflexibility that in the long run may not be appropriate given the complexity of any situation. When self-righteousness replaces passion there is a sense that the subtlety of truth is often forgotten.
In such an instance even those that are closest are likely to be cautious of your leadership.
3. Realize that repetition is not persuasion All pragmatic leaders know they have to sell their ideas, but to succeed they have to do it subtly. They have to do it consistently and tactically. They cannot hope to bully the message across by the sheer force of repetition. Exhausting your opponent is not winning your opponent over.
Taking the microphone, grandstanding, and repeating the message over and over will always be seen as an attempt to celebrate yourself rather than an earnest attempt to convince others through the art of dialogue and conversation.
No matter how accurate your message, repetition makes the messenger the issue, thereby delegitimizing the message and engendering frustration from even the most sympathetic of listeners.
Zealot leaders can be left, right, or center; they can be complete revolutionaries or staunch traditionalists. It doesn’t matter. In its drama, zealot leadership will always have its share of short-term benefits. It gives people pause so that they can reflect, it brings a tension to an agenda, and it creates a sense of urgency.
You can give credit to Senator Cruz for doing all that. But when zealot leaders go over the top, when they forget that leadership is the art of winning people over, when they forget the need for coalitions, when they engage in self-righteousness as truth, and use repetition as tactical tool--then they forget that leadership, in the end, is about getting results.
Anyone can become a better leader--anytime, anyplace. Here are 5 ways to immediately strengthen your leadership by focusing on your employees.
As a leader, you have the opportunity to directly and positively influence the success of not just your organization, but also the people who work for you. One of the hallmarks of successful leaders is that they are genuinely concerned about their people's personal growth and success. Think carefully about changes you can make in these five areas, and you'll see fast results in how your employees respond to your leadership:
1. Accept the Challenge
Outstanding leaders embrace the challenge of leadership. They understand it is a way of life, not a box to check off on the way to the top, and they sincerely want to work with people and help their organizations succeed. This may sound simple enough, but it is not always so easy. To work with people, you must constantly put into practice superior interpersonal and social skills--your job is to motivate, support and remove obstacles so employees can do their jobs.
2. Skip Fixes That Don't Stick
Effective leaders do not rely on gimmicks or quick fixes to overcome challenges to their organizations--they consider themselves life-long learners, and they constantly put into practice methods intended to facilitate productivity. They are always looking for ways to help employees improve their productivity and ability to get results. Instead of relying on tips and tricks, be a life-long learner. The key is to keep learning and evolving. Expose yourself to new ideas and discover what works for you as a leader by putting these ideas into practice.
3. Partner With Your Employees
Successful leaders continually cultivate partnerships with their employees, working alongside their people to simultaneously meet objectives and help the employees grow. Build a successful partnership with your employees with good two-way communication and a sound understanding of goals. When possible, offer employees more responsibility in the partnership. Communicate with your employees, provide them with the support they need for success and work with them to make great things happen.
4. Establish Two-Way Trust
Build and maintain open and honest communication with your employees. Encourage employees to communicate constructively among themselves and with management. This promotes two-way trust and an environment in which people feel empowered to speak out when challenged or frustrated. Without the fear of reprimand, employees can celebrate as a group when things are going well and feel confident to seek out solutions when challenged.
5. Be Open to New Ideas
Once trust is firmly established, it's likely that your employees will communicate ideas for improvement. It's a natural outcome of a productive environment: When people feel valued and trusted, they create and innovate. Take the time to listen to them, as someone may discover a solution to a long-standing issue or challenge a long-standing assumption. Today's business environment often requires entrepreneurs and executives to do more with less. Tighter budgets, fewer employees and demands for quick returns on investments are challenges to most organizations. Use technology and tools creatively and efficiently, but don't overlook the potential of one of your greatest assets: your employees. Be open to their ideas and implement them when it makes sense.
You can be a better leader--starting today. What are you waiting for?
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"PR isnt about hits and it isnt about placement," says Brooke Hammerling, who's worked with Oracle, Charity: Water, and Wordpress. "You are your message, and your message is everything."
"I can't tell you how many times we've met with early-stage companies, and they start by telling us their big vision. They say, 'This is what we're about and what we want to change.' But when we ask them what they actually do, they can’t tell us. If you can’t answer that question, don’t do anything else until you can. Nothing else matters."
Today her roster includes Wordpress, Charity:Water, Wealthfront, Oracle and About.me--all known for bold, creative communications strategies. She also happened to make the cover of The New York Times’ Sunday business section a few years ago as the poster woman for doing tech PR differently.
When it comes to whether start-ups need help in this area, she has a somewhat subversive opinion: They don’t. At Brew, she’s helped hash out PR plans for a number of entrepreneurs who can't afford full-time agencies or in-house support. And she’s got a playbook of tactics for those who want to do it themselves.
When to go it alone
No matter how many PR agencies or freelance consultants say otherwise, a small start-up can pull off a solid media relations strategy without shelling out for help, Hammerling says. In fact, there are only three reasons an early-stage company should consider retaining the services of a firm:
- It’s entering a crowded market. “They need to be able to show why they’re better, why they’re above the fray."
- It’s a very disruptive company. “If it’s really going to change huge things, like health care, then they need to get out there ahead fast.”
- There’s a legacy CEO involved who has history with the press. “Even if the company isn’t ready for primetime, there will be a lot of attention.”
If none of these are true, then relax. "Everybody else should focus that budget on development of the product and building a team internally."
You are your message, and your message is everything.
When Hammerling takes on a new client, the first thing she does is separate the key members of the team, including the investors. Then she fires questions at them about the product: “What are you? Why are you? Who are you? What problem are you solving and how are you solving it? Why should people care right now?” The idea is to hear what all of them say, where are the differences? Where are the overlaps? What do the people who care most about the company’s success think it is? This is how a narrative is born.
This was Hammerling’s approach with GroupMe, the mobile messaging startup bought by Skype in 2011.
“It’s a great example because they were entering a very crowded space, but it wasn’t chat and it wasn’t just texting--we didn’t even want to call it an app,” she says. “Instead, we called it a ‘messaging service’ and talked about it in the context of a story: the frustration everyone feels when they can’t communicate with a whole group of friends at a music festival or a party. We were able to really differentiate them as a new way for friends to talk to each other.”
A start-up can use this strategy without a communications team. “You can come up with your own ideas and compare notes, and develop it together. You might end up somewhere you didn’t predict.” She highlights Uber, not a Brew client, as an expert example of intentional branding. “They offer themselves as a technology company--not a car service. That’s a very specific message that tells you something about who they are and what they do.”
“PR isn’t about hits and it isn’t about placement. It’s about focusing your voice. It’s about finding your place in the market.”
The good thing about separating stakeholders is that everyone will give correct answers to the questions being asked--their delivery will just be different. “It’s not like there’s one perfect answer. Everyone will be right. This just gives you the opportunity to say, 'Oh, I like how this one person said that or how so-and-so explained this concept.' You can see who phrased things succinctly and who has a better grasp of the longer narrative. Then you can combine the best.”
The next step is to build what she calls a messaging document, starting with your most succinct, resonant messaging at the top--maybe just a sentence with "what you want to say at cocktail parties,” she says. Below that, you can dive a little deeper with the three key messages you’d want to share with reporters about the specific problem your company is solving. Under that, you can get more detailed. Then make sure everyone has a copy.
“PR isn’t about hits, it isn’t about placement--it isn’t, ‘You pay us and we’ll get you a clip here or a mention on that blog.’ And it isn’t about a first-day bump that gets no traction,” Hammerling says. “It’s about focusing your voice. It’s about finding your place in the market.”
Developing messaging that resonates can be especially hard for complex technical and enterprise companies. As one of the first PR people working with NetSuite in 2003, Hammerling knows better than most. “We were talking about data systems and software as a service before the cloud was a thing, and no one understood,” she says. “We had to simplify it down and not tell the whole story. NetSuite does a lot of things, but I needed to tell just that one main thing.”
Some tough love was required. “They had this very very long-winded messaging on what they were doing by explaining the SaaS model of the financial data of ERP and blah, blah, blah--and I just told them, the mainstream business press doesn’t know this world yet, and they don’t care,” she says. “We filtered it down to this: ‘The future is software as a service: a business that will enable companies to manage the data that is important to them online and share it across platforms with many people.’ We had to get people to understand how and why it would relate to them. All it took was taking out the jargon and simplifying it so that people could imagine themselves using it.”
Drawing analogies is a rookie crutch. Saying “It’s like Twitter, only for dog-sitters” can be instructive, but also takes away from your brand. The better thing to do is to boil your message down to its core, and then layer in other dimensions and functionality little by little. “You may do 25 things, and that’s amazing, but what’s that key thing you do? You have to make sure that’s crystal clear. Tell the story around that then layer in the rest later. If you try to pack it all into one announcement or a press release, you’ll lose your audience.”
Hammerling points to WealthFront--a Brew client--as one start-up doing a good job of turning a complex concept into a single idea. “It’s taking technology and using it for financial planning--a function that you normally go to humans for. They really had to hone in on a message so that all kinds of people would feel good using it.” You can see it in everything down to their tagline, “We manage your investments for you.” It’s not about technology or business. It’s about the personal ‘we’ taking care of something for ‘you.’
This is a hard pill for some founders to swallow. Here they’ve spent all this time building a multi-faceted product and they want to talk about all of its capabilities. But this is almost always a mistake, she says. “It’s hard to tell founders this kind of thing--it’s like telling them their child isn’t ready for an honors class yet. They want to fast-forward.” But she’s seen it end badly too many times.
Hammerling cites photo sharing app Color as a prime example. It burst onto the scene in 2011, having raised a whopping $41 million in its first round of funding. Its shocking success seemed clear as the company made the rounds with the media--but the app’s actual functionality was not. “Nobody knew what the app did or what to expect once they downloaded it. Because of the money, people were expecting something great, and it just wasn’t there.” Color’s demise was slow and quiet.
If she had been the one handling the company’s PR, Hammerling says she wouldn’t have let the money dictate the strategy. “Of course they couldn’t keep the funding quiet--too many people were involved and it was an absurd amount. But I wouldn’t have tried to do a full court press around the product at the same time,” she says.
Prepping for launch
Needless to say, Hammerling has seen a lot of missteps like this and more. She’s had start-ups come to her three days before their scheduled launch asking for a turnkey media strategy. Of course, there’s no such thing, she says. A solid media plan needs a runway of three to six months. “Even if you have a couple weeks and marketing material, that’s not enough. It’s not going to be effective and it’s going to look fake.” When a company does this--and plenty still do--Hammerling says nine times out of ten, a launch will get botched, and they never get another shot at it.
Like creating messaging, preparing for an effective launch starts with a list of questions--all designed to suss out your real motivations for doing PR:
- Do you just want a lot of attention early on?
- Is the goal to attract a ton of users? Customers?
- Is the announcement more about recruiting top talent?
- Do you want to raise more capital or VC interest?
The answers to these questions will shape your approach and your story. For the most part, different goals mean you go after different outlets. If you’re trying to hire great engineers, you want to get on Reddit, Hacker News, or the blogs engineers you want are reading. If you’re trying to get in front of investors, figure out what they read, and pitch those publications. Also, the more transparent you are about your goals, the more likely you are to achieve them, Hammerling says. “Stick with your one basic, overarching message; you just need to tweak it a little bit for each audience.”
Avoid timing your launch with a funding announcement.
“If you need to announce funding, try to separate it as much as you can from your product. Absolutely don’t lead with it.” A large round raises expectations, a small one lowers them. The amount of money can all too easily convince people what they should expect from your company and how likely it is to succeed. The product should have a chance to stand on its own.
On top of this, a surprising number of companies choose to launch before their product is ready at all. “It’s a head scratcher, but I’ve seen so many startups determined to stick to their timelines that they’ll unveil something before it works. Then all of the bad press and feedback sets them back six months or more,” Hammerling says. “You have to be patient. If you have to pull a plug, pull the marketing plug. Nobody’s setting those deadlines but you.”
Getting on the Media’s Radar
Once you have your plan, it’s all about placement. How do you get attention in the deafening echo chamber of today’s technology news cycle? As Hammerling puts it--unsurprisingly--it’s all about relationships. And you don’t need to be a communications pro to make them. The obvious rules apply: be smart, pay attention, and don’t be rude. But there’s a bevy of other hacks for getting noticed.
“Figure out who’s covering your industry--whether it’s the broader tech industry, Internet of things, consumer internet, mobile, whatever,” Hammerling says. “Then there will be those few reporters who cover that specific area you’re in. Make sure you read everything they write. And don’t just look forward, go back in time. Get a sense of their writing style and personality, what topics interest them.” Following reporters on Twitter can also give you a better sense of their life outside of work and what they’re really passionate about. All of this can be used to craft personalized communications.
While there is no set number of reporters an entrepreneur should work with, there’s value in forging meaningful relationships with a good handful in your area and broader industry, Hammerling says. When she first got her start, the tech media was less built out, and she made it a point getting to know 15 of the most influential reporters in the sector. “Now they’re running their own publications, their own bureaus, their own blogs,” she says. “If you’re a young entrepreneur, get to know the younger guys too --that’s just as important because these are people who share your mindset. They are entrepreneurial too, and they’re going to be the big guys down the road.”
Don’t be afraid to reach out.
“The reporters covering tech want to hear your story. They’re actively looking to build relationships with entrepreneurs. If you live in the same city, try to set up some time to talk. If you don’t, then drop them a note a few weeks before you pass through their area and say you’d love to grab coffee. Not everyone will say yes, but a lot will,” Hammerling advises.
Of course, don’t do this until you have your message down, know it backwards and forwards, and can clearly explain your value proposition to the market. She also advises against talking to reporters directly too far in advance of launch. There’s risk that you’ll tip your hand before your company’s ready. Once your product’s out in the open, that’s the time to focus on maintaining connections.
The importance of social media is a testament to how much the media relations game has evolved. In the past, it was a common tactic to offer an outlet an exclusive to get their attention--but this isn’t a good hand to play when there are hundreds of influential blogs out there. It’s one thing if you have a massive story that The Wall Street Journal or The New York Times might want to print, but this is hardly the case at the early-stage level.“I’m against the exclusive around a product launch--I think those days are over.”
That said, exclusives can be useful for damage control. The more bloggers and editors out there, the more people actively uncovering news. It’s not unlikely that a reporter will get a hold of your story or a piece of it before it’s ready for showtime.
“In my experience, if a reporter does get your information, you can work with them and build an even better relationship,” Hammerling says. “You can say, ‘You know what, we’re actually not ready for that to go live. We need another week, but we’ll give you everything you need.’ That’s when you give them the exclusive. They uncovered it, they earned it.” In this situation, it’s important to be grateful and show respect, but it’s not something to put into common practice.
“Giving exclusives will end up hurting your ability to build relationships in the long run,” she explains. “You’re just creating bad blood with all the other journalists who didn’t get the story. In the tech blog world, if someone posted something 30 seconds earlier, it’s perceived as an exclusive, even if it’s the exact same story. So you have to be very careful.”
Once you have their attention ...
If you’ve put in the time cultivating your media network, it’s time to invest even more in learning how to talk to them. And if there’s one person you should pay, it’s a media trainer. “There are experts out there that are exquisitely good at teaching people how to speak to the media,” Hammerling says. “Talking to reporters is a whole different beast, a whole different art entirely. And you can work with a trainer without retaining an agency. You can just hire them to come in and spend half a day session finessing your message and getting you comfortable with answering questions.”
Hammerling personally recommends Joe Dolce, a communications expert Brew has been working a lot with as of late. As a former journalist and editor for big titles like Details, and as a public relations executive, he’s been on both sides of the process and knows what effective answers sound like.
Some founders may need this boost more than others, and it’s important to recognize which type you are. “Technical founders may have a more difficult time because they aren’t comfortable shortening their ideas or statements to be more catchy. They get their point across in minutes when they need to be doing it in seconds,” she says.
But what if you can’t afford a professional? That doesn’t mean you have to stay quiet. “You can get some of the same lessons from watching videos of successful entrepreneurs who are really really good at telling their stories.” Hammerling lists Salesforce’s Marc Benioff and Oracle’s Larry Ellison as her top two examples. “They’re just really great at presenting, talking in front of an audience, having a sense of humor. They speak with a twinkle in their eye even when they’re being really serious. Most importantly, they look like they’re having fun. You don’t want to be this glum robotic voice reciting key messages. If you’re passionate and having fun, the media will be enthralled.”
Another example, a little closer to home for the early-stage crowd, is Box founder and CEO Aaron Levie. “Leaders like Aaron are clever and very quick in how they connect to their audience while they’re speaking. You can tell he’s enjoying it and that he really cares about what he’s saying. It’s rare to see someone his age be this fluid. He doesn’t mince words. He says things that are forward-looking and ahead of the times, and he’s very knowledgeable about the other companies in the space,” she says.
After all, knowing your competition is vital to being a credible and compelling voice. “When you know your competitive space so well, better than anyone else, you can be a real resource to the media--and the media is constantly looking for good resources. Being able to speak about your company is one thing, but being able to speak about the industry at large makes you multi-dimensional and worth talking to.”“People have a tendency to think today's news is just tomorrow’s trash, but not now. The internet is forever and people have long memories.”
Keep in mind, being an area expert is different than trash-talking your competitors, and that can be a finer line than many entrepreneurs think. Especially as areas like cloud storage or e-commerce become more crowded, reporters love asking about how companies plan to differentiate themselves or crush their opponents. This is a big red flag. “Negativity never wins,” Hammerling says. “If you’re a huge company, sure you might be able to pull off being snarky or sassy, but as a start-up, all you should be is respectful of your competition. If you have to, talk about it like you’re all part of the same community and then bring it back to you.”
If pressed and you’re forced to cite a competitor, she advises going big. “Don’t talk about the companies you’re asked about specifically, bring up someone who’s related and done it right. Like if you’re in the communications space, talk about Skype or other big players. Suddenly, you’re connecting your startup with the success of these giants. That’s much better than talking about the various start-ups you’re positioned against--that just pigeonholes you.”
Remember, every time you interact with the media matters. You need to constantly check yourself to be proactive but not obnoxious, informative but not aggressive. Don’t be that one founder who keeps asking if the story will run--if a reporter says it will, it probably will, Hammerling assures. And never attack someone personally based on what they’ve written on social media or otherwise--even if they’ve gotten a key detail about your company wrong. “Writers take things personally and they remember who they don’t like talking to,” she says. “I remember asking a few reporters what they thought of a particular founder, and they collectively gave the same eye roll. ‘He’s terrible,’ they all said. People have a tendency to think today’s news is just tomorrow’s trash, but not now. The internet is forever and people have long memories.”
At the same time, being too good at working your relationships, and getting too chummy with the media can have consequences too. “When you think you’re purely friends with a journalist, 90 percent of the time you’ll end up really unhappy with how a story about you or your company turns out. It’s one thing to be friends, and it’s another thing to work on a story together. You can get blinded and forget to really focus on the specifics and your message. You might give them too much runway or tiptoe around things you shouldn’t. I see it all the time, people with close relationships who are unable to manifest that into great stories because they aren’t thinking with their PR hat on.”
But this doesn’t mean it’s impossible or ill-advised to forge warm, friendly relationships with media. You just have to make sure they’re clearly defined--and that the terms you use around each other are equally defined. “Some people say you can’t genuinely be friends with reporters, but I think that’s garbage. You just have to be clear. I always tell entrepreneurs know what off the record and what on background mean--and know when to say them. If you’re talking to someone, you can’t give them all this intelligence and then afterwards say, ‘Oh by the way, that was all off the record.’ That’s not how it works.”
Another thing to realize is that with comment threads and social media, readers have become a concrete part of the media experience. “Younger CEOs take comments less seriously than older ones, and that’s a good thing. The only way to handle it is to learn. You can’t make it personal and go off on someone, because that’ll just blow up into something bigger,” Hammerling says. She’s seen her share of CEOs stay up at night reading blog comments about their product. It’s hard to dissuade them, but at the very least she encourages them to identify takeaways.
“You may see someone commenting on how they love an aspect of your product. Then you know that’s something that’s really resonating that you can start honing your message around. Inversely, if people are responding negatively to something, then you can very dynamically change your messaging around that, make it more clear or consider changing that aspect of the product.”
The irreplaceable voice of the founder“The vast majority of the time, the founders are the voice and heart of the company.”
It’s telling that founders are the ones up at night, obsessively reading comments, thinking about how they could do better next time. They care the most about the company’s success -; and that devotion is like energy in a bottle. “It’s a particular type of energy that inspires people, makes for good stories, and can’t be substituted.” Hammerling believes this so deeply that she refuses to work with clients if a founder is not willing to be actively involved in media relations.
This is why, when it comes to announcements, there’s an increasingly strong preference for a founder’s blog post over a press release. While you might see some PR teams or companies compiling literature for media--everything from headshots to packets of pre-vetted executive quotes and market position data--this comes off as disingenuous.
“When a founder decides to take a backseat, and put a marketing person out there, it negatively impacts the team, the organization, and the trust reporters have in them,” she says. The press really wants that connection with the founder and their story.” This should never change, no matter what stage you’re at, even if you have an agency or a big in-house comms team.
In fact, there’s no better argument for early-stage startups’ ability to navigate the media field on their own--at least at first. When a product, message and strategy align with a founder who can deliver it all clearly and persuasively, there’s no telling how powerful that can be.
As Hammerling puts it, an agency putting out a press release says “agenda,” a passionate founder going straight to the press says, “Hey, look at this, it’s going to be cool.”
This post originally appeared on FirstRound.com.
EBay is laying down $800 million to acquire a payment platform popular with fast-growth start-ups, Braintree. It'll give PayPal more oomph, but is this a tipping point for eBay?
Braintree, a payment-platform company that powers transactions for growing companies such as Uber and Airbnb, has reportedly been in the market for a buyer for more than a month now. After negotiations with Google went south earlier this month, the company has found a new parent: eBay's PayPal.
The pending all-cash deal of about $800 million is less than the company was reportedly seeking, but eBay is promising to let Braintree operate at least semi-autonomously under PayPal.
Before the acquisition, Braintree was armed with $69 million in outside funding from venture capital firms Accel, NEA, RRE, and Greycroft, among others. The company didn't take funding until 2011, four years after its founding by Bryan Johnson, who bootstrapped the company out of Chicago. Johnson is a serial entrepreneur who had previously founded two endeavors. Both--a cell-phone sales plan and a real-estate venture--failed. He told the site Technori:My first venture when I was 21 was just short sighted. We didn’t understand what we were getting into. With the second in real estate, we made some misguided assumptions about others. But when I got into the credit card processing, I finally felt that I had complete control over determining whether it succeeded or failed. It was the first time in my entrepreneurship career where my effort directly controlled the outcome. It felt really good.
Johnson, though, was replaced as CEO in 2011 by Bill Ready, an executive with a history of leading companies through acquisitions. Earlier this week, Ready wrote on YCombinator's Hacker News to defend acquisition rumors: "I'm no babe in the woods. I've been through multiple acquisitions in the past as well as multiple funding rounds."
Braintree claims to processes $12 billion in payments annually, of which $4 billion is processed for mobile devices. A lot of those are payments from other fast-growing start-up companies--Fab, GitHub, and OpenTable, to name a few--a lucrative B2B niche.
"I think that the Braintree acquisition makes a lot of sense ... It was rapidly becoming a potential threat to PayPal," Daniel Kurnos, an analyst at the Benchmark Company, told Reuters.
Braintree has 4,000 merchant-clients and 180 employees. It also has Venmo, a start-up that allows individuals to send money to one another for free. Braintree's 2012 acquisition of Venmo seems to have been one of the most significant attractions for eBay and PayPal.
Ready said in a statement Thursday: "The alignment with PayPal means Braintree can continue to push the boundaries of innovation while expanding into new markets with increased speed and confidence. Our current customers and developer community can expect the same level of support and partnership they’ve always enjoyed, coupled with more resources."
The acquisition seems to be just another step for eBay--a massive, $60 billion company--in nurturing its mobile-payments talents. Is Stripe next on the auction block? That would be a sure sign that eBay sees its future less as a marketplace and more as the go-to for payments.
Facebook boasts the largest and richest demographic, Twitter has a surprisingly young user network, and 68 percent of Instagram's users are women.
Each social media platform has cultivated a unique identity thanks to the demographics of the people who participate in the network. Some platforms are preferred by young adults, who are most active in the evening, others by high-income professionals, who are posting throughout the workday.
We explained in a recent report why many brands and businesses need platform-focused social media strategies, rather than a diluted strategy that aims to be everywhere at once.
In a new report from BI Intelligence, we break down the demographics of each major social media platform to help brands and businesses decide which networks they should prioritize. Being able to identify the demographics of social media audiences at a granular level is the basis for all targeted marketing and messaging. The report also spotlights the opportunities that lie ahead for each social network, how demographics affect usage patterns, and why some platforms are better for brands than others.
Here are some of our surprising findings:
Facebook still skews young, but the 45- to 54-year-old age bracket has seen 45% growth since year-end 2012. Among U.S. Internet users, 73% with incomes above $75,000 are on Facebook (compared to 17% who are on Twitter). Eight-six percent of Facebook's users are outside the U.S.
Instagram: Sixty-eight percent of Instagram's users are women.
Twitter has a surprisingly young user population for a large social network -- 27% of 18 to 29-year-olds in the U.S. use Twitter, compared to only 16% of people in their thirties and forties.
LinkedIn is international and skews toward male users.
Google+ is the most male-oriented of the major social networks. It's 70% male.
Pinterest is dominated by tablet users. And, according to Nielsen data, 84% of U.S. Pinterest users are women.
Tumblr is strong with teens and young adults interested in self-expression, but only 8% of U.S. Internet users with incomes above $75,000 use Tumblr.
This article originally appeared on Business Insider.
Marketing doesn't have to be hard or expensive. Sometimes the simplest ideas are the most effective.
As a small business, you may think it's impossible to get the word out about what you do. That's no excuse. And you don't need fads or gimmicks. Follow the proven, timeless tips and techniques of these entrepreneurs to help get the word out about your business and watch it grow.
1. Give Your Stuff Away
Ari Fleischer and Aly Moler of Frozen Pints have grown their craft beer ice cream business by leaps and bounds by attending craft beer shows and farmers markets to do one thing--give their product away. Once customers taste this unexpected combination (which happens to be delicious) for free, they line up at their local store to buy it or even request that the store carry it.
2. Attend Networking Events...
Desiree Scales of Bella Web Design is a master networker. She attends and presents at almost every event in town. Her contribution to the overall community makes her one of the first people that come to mind when anyone looks for an expert in her area of concentration: small business websites and drip marketing.
3. ...Or, Create Your Own Event
If you don't like the events you are attending, invent your own! Darrah Brustein has created one of the most successful networking events in Atlanta: Atlanta Under 40. The event, which Darrah created to connect with other young entrepreneurs in her city, is now being franchised to other cities.
4. Volunteer to Lead an Organization
The secret to getting the most out of a group or organization is not just to attend but to lead. Take Lisa Calhoun of Write2Market. She served as the president of Entrepreneurs' Organization, allowing her to rub elbows and connect with the brightest minds of the fastest growing companies in the Atlanta market.
5. Start a Podcast
Todd Schnick of Dreamland Interactive is the first person I saw create his own podcast--he interviews other business owners. People love to tell their story, and by highlighting them on a podcast you make an instant and meaningful connection. It's also a great way to get an education on a topic you are interested in.
6. Be Helpful
Most small business owners struggle to get their finances in line, especially when they move from an Excel spreadsheet to something as sophisticated as QuickBooks. Cathy Iconis of Iconis Group hosts a Quickbook Chat on Twitter every Thursday night at 7:00 EST to answer small business owners' questions--and potentially find some clients.
7. Send a Weekly E-mail
If you want to stay in relationship with your customers, there is nothing simpler than creating a weekly e-mail that provides something of value. Rick Houcek of Soar With Eagles sends one out every Monday that he calls the 2-Minute Monday Motivator. I look forward to getting it every week and often forward his advice to others.
8. Support a Cause
Mary Hester of LAN Systems throws an annual cookout with purpose every Earth Day. Party-goers are encouraged to bring their "e-waste"--old computer monitors and CPUs. At their most recent event they collected more than two tons of IT equipment, keeping it out of the landfills and creating goodwill with their customers, current and potential.
9. Sponsor an Organization
Many local organizations are not that expensive to sponsor for a year if you consider the so-called per meeting cost. If your product or service is a good fit with their audience, you will get exposure every time the organization sends out an e-mail and a mention every time they meet. Attendees always remember and appreciate companies who sponsor their favorite organizations.
10. Create a Cool Giveaway
When thinking through what your company will give away make sure it's something they won't want to throw away or easily lose in their desk or bag (think pen).
IDEO founders David and Tom Kelley on building a creative culture.
Everyone is born creative, but schools and jobs and the hegemony of the conventionally minded steamroller it out of us. So argue David and Tom Kelley, who as leaders of iconic innovation firm IDEO have unparalleled cred on this subject. In their new book, Creative Confidence: Unleashing the Creative Potential Within Us All, the brothers urge a universal uncorseting of our creative selves. Editor-at-large Leigh Buchanan spoke with the Kelley brothers about how companies can tap this undeveloped human resource.
Define “creative confidence.”
Tom: Creative confidence is the natural human ability to come up with breakthrough ideas combined with the courage to act on them. The courage turns out to be a really important part. Because lots of people have these ideas in passing but are too timid to put them into action.
David: Or afraid of the reactions they will get from the people when they do.
Why hasn’t companies’ obsession with innovation and risk-taking translated into greater creative confidence among employees?
Tom: Culturally we’re trained-;in business schools at least-;to trust the analytical side and to trust the things you measure. And most companies are measured on this short-term stuff. To do the breakthrough innovations, sometimes you have to defer gratification. You’ve got to take a leap that may not pay off today or this month but that builds your brand and builds your company for the future.
If playfulness and experimentation are important to creativity, should managers think differently about scheduling and deadlines?
Tom: When people get creative confidence they focus more on iterations, doing experiments. Thomas Edison said that one of the greatest measures of your ability is how many experiments you can do within 24 hours. There was a leader from a financial services firm who went to the d.school. [Stanford’s institute of design, founded by David Kelley.] He said, when we launch a new product it takes six months for planning, two months for visual representation of the framework of web pages, and two months for productizing a new online service offering. When he went back to his day job he said, starting next week I’m going to give them a day to do the whole thing. Then I’m going to give them an extension of a few more days. We will still make our deadline. But I can be on the twentieth iteration instead of the first iteration. And it will be better.
David: You can have a deadline and have a first not-that-great idea and get it done. The trick is to get as many iterations in and as many generations in as possible before the deadline. Deadlines are kind of arbitrary anyway. I can spend the rest of my life designing a wastebasket and just keep making it better. You run out of time and budget. In our world it’s just how many iterations can you get done given that they call time? In the Launchpad class at Stanford [where Kelley is a professor] students have five weeks to get a product live in the world. It’s amazing what students can get done in that time.
David: Once you have that kind of design bias, everything you do is with intent. You wrap a present for somebody’s birthday or how you decide to get somewhere. It’s all design. If you look around, everywhere there has been some decisions made about that object or about that experience. We notice that people do things with intent. They decided to do it this way as opposed to letting it happen to them.
Does virtually every conscious choice a person makes to change something involve design on some level?
David: Once you have that kind of design bias, everything you do is with intent. How you wrap a present for somebody’s birthday or how you decide to get somewhere. It’s about being mindful of process. It’s not that you have to go to the creative well and become more creative. But as you become more mindful of the process you just get better and better at it.
You advise getting out into the field, observing potential users or customers. Who in the organization should do that? Just product designers? And how often do you have to observe a particular behavior before you consider it pervasive enough to address in your design?
Tom: In response to who does it, the answer is everyone in the organization. In response to how many: just to be clear, we’re not sizing a market. We’re not saying 82% of people do it this way or need this. You are looking for inspiration. And for inspiration, one person can be enough. In the book we talk about the team from a non-profit called Embrace going out in rural India with the prototype of an infant warmer for premature babies. They find this one woman who tells them that in her village they think Western medicine can be too potent. The product is supposed to be set to warm the baby to 37 degrees centigrade. She will only go to 31 or 32 degrees, just to be “safe.” They changed the design based on a sample of one. Because lives were at stake.
How do you make intuition coachable?
Tom: It’s not so much coachable as practice. I think the great danger for people as they progress through their careers is they rely on intuition informed by old data. It’s important to constantly refresh-;to hold up the worldview you have in your head against the actual world out there in 2013. Also, your intuition is really the sum of your experiences. So the way that we say to improve your intuition is to have a lot more experiences and a variety of experiences.
People are excited by big data because it suggests you can arrive at the right answer by throwing lots of numbers at the question. Is there a tension there with creativity?
Tom: We embrace big data because it helps the client be more confident. But big data is inherently about the past. It’s not going to get you all the way to the future. At one point you could have done big data and discovered all books ever written were done on a typewriter or with a quill pen. That would tell you people want typewriters. Well they don’t. People want ways to get ideas from their head onto the paper or the screen. So we’ve been working with this idea called hybrid insights. It’s informed by big data but still human. So you distill all the data but put it in human form.
David: It’s messy to go out there and get involved with customers and users and find out what’s really going on. But that’s where we get all our big ideas. Talking to them and understanding them or reframing the problem because they are surprisingly interested in something we didn’t know they were interested in. Big data is the inspiration. But you still have to build the empathy with people.
How does technology fit into this? In one sense it allows anybody to create at least virtual versions of anything, and those versions can look pretty great. But is it a substitute for the more visceral, immediate challenge of sketching ideas or building prototypes by hand?
David: This is basically about storytelling, right? So I can tell you the story verbally and then I can show it to you on a computer simulation and that tells you more. And I can mock it up physically. And at each of those levels, different stuff comes up. You say, my gosh, look at how close this is to this. This won’t work for me for cleaning or maintenance. When you move from visualizing something to experiencing it you discover things hiding down in the details that result in either problems or innovations.
Tom: A few years ago we did a full-size mockup with Marriott: what a whole lobby would be, what a room in a long-term-stay place would be. You could test out the interactions. What is it really going to be like in this little kitchen with multiple guests trying to get a the toaster? It’s really hard to predict that with just the model.
If you were launching a company and had the option to structure-;or not structure-;the innovation “function” any way you wanted, what would you do?
Tom: This is a luxury. Most of our clients don’t get to start things from scratch. And so they do this much harder thing, which is to change a not-very-innovative culture into an innovative culture. It’s great if we’re talking to startups. It’s just a matter of caring. It’s in the way you hire. It’s in the way you do reviews. It’s in your space. You structure every step of your process around creativity and innovativeness. So you are not saying I want to hire someone just like me. You are saying I want to hire the most creative person I can. The questions that you ask in the interview, the part of the resume you look at. More than anything, it’s a question of deciding that you’re going to build that into the company from scratch.
David: It’s a cultural thing more than a structural thing. How do you convince everybody that their job is a creative job? How do you convince accounts payable to do their job in an extraordinary way? Whatever structure you put together, the trick is to get everyone to do their job with intent, to see that they can do their job in a creative way. And to value that. That involves not judging people and rewarding people for trying new things and for being tolerant of failure.
Tom: One way is from day one to use a kind of crowdsourcing, open-innovation approach. You establish a social contract with your team from the beginning that ideas are going to come from them, too. I may be the founder, but that doesn’t mean I have to have all the ideas. It’s almost a prerequisite that you are going to bring ideas to me all the time. Every day people are going to have ideas.
I know you are not a fan of benchmarking. But if companies were going to adopt one single practice from IDEO to juice their innovation, what should it be?
David: The empathy part. It’s about getting out there in the field and viscerally feeling what’s going on. That’s where the big ideas come from. That’s where we reframe problems. People think creativity is about problem-solving. It’s a lot about need finding. About making sure that you have a problem that’s worth working on in the first place. So all of this human-centered stuff is what other companies miss the most and what they would benefit from.
In the book, you say an innovation culture is like karaoke. Explain.
Tom: I go to Japan a lot. I started encountering karaoke about 25 years ago. And I’m thinking, why are people braver in this environment than they are back in the office? Liquid courage is part of the formula. But it’s not the whole thing.
Think of that karaoke room as a metaphor for your company. There are a lot of special things going on. I am going to get up there and sing a cappella in front of my friends. I’m willing to take this big risk because you’re going to get up and sing next! We’re all in this together. The other part is that people have turned down critical judgment, temporarily, to go into the karaoke room. The big fear holding people back from creative confidence is the fear of being judged. In the karaoke room, a colossal failure is at least as much fun as something that is really good.
I love the fact that you have a floor-to-ceiling community idea chalkboard in one of your bathrooms at IDEO.
Tom: It started in this one particular bathroom in the San Francisco office. It’s the most popular one because everyone wants to see what’s the latest on the chalkboard. If you had big data I’m positive you would be able to say that that is the most used bathroom. The other bathrooms just have toilets in them. But this one has the chalkboard!
The "10 Circles" Creativity Exercise
Creative Confidence includes 10 exercises to work your team's innovation muscles. Here's one that's designed to kick off a brainstorming session:
1. Hand each team member a sheet of paper with 30 identical circles drawn on it.
2. Give everyone three minutes to turn as many circles as possible into recognizable objects.
3. Compare results. Did people finish? Did they produce distinctive ideas or just variations on a theme (different kinds of balls, for example)? Did anyone break the rules by combining two or more circles?
"Besides being a great warm-up exercise," write the Kelley brothers, "30 circles offers a quick lesson about ideation...It's easier to have a great idea if you have many to choose from. But if you have a lot of ideas that are just variations on a theme, you might really only have one idea."