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You learn far more from your failures than from your successes.
In a greatly underrated business book The Tao of Pooh, author Benjamin Hoff quoted a Chinese saying: "One disease, long life; no disease, short life." He goes on to explain that:
"Those who know what's wrong with them and take care of themselves accordingly will tend to live a lot longer than those who consider themselves perfectly happy and neglect their weakness."
I don't know if that's true for human health, but I know it's very true for businesses and businesspeople.
Let's start with businesses. Companies that enjoy years of success and growth--without at least a few years of serious financial trouble--almost always fall victim to their own strengths.
Microsoft is a case in point. As Steve Ballmer's retirement announcement illustrates, Microsoft has been constantly held back from developing new markets by a requirement to backfit everything to Windows.
That hesitancy to start anew at Microsoft makes perfect sense because Windows is by far the most successful software product in history. Why tamper with success? Especially with success that's unprecedented in business history?
Unless a company is willing to undergo self-induced "creative destruction," it's almost inevitable that success will create cash cows that nobody (management, investors and customers alike) are prepared to sacrifice.
Even now, it's going to be very hard for a new CEO at Microsoft to get the company to stop thinking about Windows and start thinking about something new. Unfortunately for Microsoft, in business, strengths eventually become weaknesses.
It's very different though, inside companies that have been on the brink, of financial disaster. It's easier to make a leap of faith when you've stared into the abyss.
For example, Apple's greatest success (the iPod/iTunes revolution) took place only after it became clear that the Macintosh/NeXT strategy wasn't creating growth but instead was dooming the company to insignificance.
The same thing is true of businesspeople. The best entrepreneurs are those who've failed at least once, because they've learned what doesn't work as well as what does. As a general rule, people learn more from failures than from success.
Failure teaches you to identify your weaknesses and use them to your advantage. For example, some of the most effective salespeople I've met are introverts who've learned to use their thoughtfulness to become better listeners.
Failure also teaches you to value your strengths but prevents you from letting those strengths make you muscle-bound. For example, I know a woman who's almost frighteningly charismatic, but she knows how to tone it down to increase her credibility.
There's nothing wrong about success. It's fun and wonderful and all those good things. But it's dangerous, too, especially for those who have never had the great good luck of having at least one huge failure.
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It's not an unusual move in the tech industry: You offer to generously give more people more technology--and build your customer base in the process.
Think things are jam packed on the Internet already? Facebook CEO Mark Zuckerberg wants to make it even worse. His Internet.org consortium of handset vendors, network infrastructure companies, and browser firm Opera say they have signed on to a vision of connecting the roughly two-thirds of the planet not already online.
Below, I’ll share a rough proposal for how we can connect the next 5 billion people, and a rough plan to work together as an industry to get there. We'll discuss how we can make internet access more affordable by making it more efficient to deliver data, how we can use less data by improving the efficiency of the apps we build and how we can help businesses drive internet access by developing a new model to get people online.
Sound good? Not to a great many critics. Bloomberg's editors wrote: "And, as always with Facebook, the wondrous free benefits come with a catch. Or two catches, in this case." Jillian York, a director at the Electronic Frontier Foundation, told Huffington Post, "I don't think this is Internet as a human right, I think it's Facebook as a human right."
Oddly enough, the great humanitarian impulse of Zuckerberg sounds as though it will heavily benefit Facebook in the long run. It's not that what he did was inherently wrong or unprecedented. Many tech companies have talked about making technology available to some group or other in a way that was actually an attempt to seed the market. For example, Apple has been extremely successful in the past in offering steep educational discounts. The intended effect, though, was to get matriculating students accustomed to Apple hardware, increasing the possibility that they would push for its adoption when in the workforce.
Microsoft has done the same thing for years with its software and now has begun to offer free Surface RT tablets to schools. (That wouldn't have anything to do with the massive write-off of RT hardware, as you might as well give it away if people aren't buying.); Google is offering free Internet in the cities where it builds a high-speed infrastructure. Of course, there would be all that valuable user data going right to the company.
The basic idea is old. Henry Ford did a variation in which he paid his factory workers much better than the going wage. Why? If they didn't make enough, they'd never buy his cars. There's something to be said for organically enabling people to become customers.
But too often, companies like Facebook are ham-handed about the process. It's one thing to enable people to eventually become your customers. It's another to try to spin what is essentially a business move into a humanitarian purpose. Even if your intentions are honorable, few will ever believe you.
It's a sound investment and it doesn't have to cost a fortune. Check out these easy steps to make your company more sustainable.
You probably already think you should be a more environmentally friendly business... but it sounds expensive, right?
It's a sound investment for a number of reasons. According to the EPA there is little doubt that environmental issues are going to alter the regulatory and market landscape in the near future. Energy-efficient companies will be better able to navigate these regulatory changes and be better positioned to weather negative events like energy price spikes.
Also, consumers are flocking to safe, non-toxic, green products. People are becoming more conscious of their choices and are willing to invest more in a product to participate in this movement and to protect their family.
That alone should be enough motivation. But consider also that many of the world’s top organizations are investing billions of dollars into environmental sustainability programs--a good indication that small business owners should follow suit.
The Sands Las Vegas Corporation touts some of the most beautiful and popular vacation properties and convention centers around the world. In 2010 it implemented The Sands ECO360 Global Sustainability program. Today this values-driven program is considered an integral part of the company's overall business strategy. A behind-the-scenes tour of a Sands property will reveal an enormous on-site recycling center where employees hand sort every ounce of garbage to separate recyclables. They also recycle and filter millions of gallons of water for use in decorative water features and new low-flow urinals. And, electricity consumption has already been reduced by 5 percent; not bad considering a 27 percent growth in net revenue which has increased the demand for energy.
The good news is that a green program doesn't have to cost a fortune for a small business. Try these simple steps to kick off your sustainability program.
Make green thinking a part of your company culture.
Engage your employees in your new vision. Create efficiency goals and make it fun and inclusive by celebrating your success. How can you measure your savings? How can your green mission enhance your community or better serve your customers? Get ideas and input from your employees and they will embrace your new goals.
Change light bulbs.
You won’t save 10 million kWh of electricity each year like the Sands Las Vegas Corporation does, but swapping to LED lighting is definitely worth the investment. LEDs use far less energy and do not contain mercury and other toxic gases contained by incandescent and fluorescent lights. They are pricey upfront but will last about five times longer than other bulbs.
Eliminate plastic bottles.
In 2011, 32 million tons of plastic waste was generated in the U.S. alone. Sure, some of this plastic is recycled but why add to the environmental burden? Install a water filtration system in the office. Not only will the water be fresh and clean but you will save time and money by avoiding the packaged water habit.
Do business with green vendors.
The Sands Las Vegas Corporation chooses vendors like Hewlett Packard and General Electric because they too follow aggressive sustainability guidelines. Interview your vendors to find out about their sustainability efforts. If you use a printer, ask if they use recycled paper. Look for companies that use energy efficient vehicles and manufacturing plants that have practices in place to reduce their carbon footprint.
Conserve human energy.
Consider that healthy, energetic employees will be more creative and productive. Help to keep your team healthy by creating a safe, non-toxic environment. Serve sustainable brain food at meetings: nuts, organic fruits and vegetables, and even dark chocolate all play a role in maintaining mental acuity.
Host a fundraising event.
Cause-driven programs are excellent for your image and public relations; and it feels good to support something that is meaningful and far reaching. Adopt a green cause and do an annual fundraising event. There are all sorts of conservation campaigns you can participate in, from planting trees to raising funds for environmental studies scholarships. Find one that’s close to your heart and involve your online and local communities.
Recycle and reuse.
How often do you toss old papers and used glass and plastics into the trash bin? Come on, admit it! Look into your community’s recycling program and enlist the support of your team to meet recycling goals. Also, purchase recycled paper products and ink cartridges. Even certain furniture and other big ticket items contain recycled goods.
Use green cleaning products.
Do you love the smell of a nice, clean office? Guess what: Many of those familiar scents are toxic to your body and to the environment. Replace window cleaners, dish and hand soaps, and bathroom cleaners with green brands. Some of them may seem pricey but many are concentrated and will save money in the end. The benefits include improved health, increased clarity, a reduction in allergic reactions, and a healthier planet. A small price to pay.
Sustainable development cannot be achieved by a single individual or enterprise. Everyone must participate. You will demonstrate your leadership and commitment to a healthy, safe future by joining the ranks of business leaders who make sustainable choices.
Share your ideas here. What have you done to green your office?
Thanks in part to the Affordable Healthcare Act, independent contractor hiring is on the rise, according to a monthly SurePayroll survey.
Nearly one in five small business owners say they're now say they’re more likely to hire an independent contractor than a full-time employee, according to results from our August Small Business Scorecard. It’s a dramatic sea change in how small businesses operate, and perhaps a signal of how our economy will operate moving forward.
Why Go Independent?
Of those more likely to hire independent contractors, half said it’s simply easier to pay someone for a specific task than to bring on a full-time employee. They contract out services like marketing, information technology and administrative work.
Using a 1099 or independent contractor means not having to worry about payroll taxes and benefits, which saves businesses money. At the same time, they’re able to take advantage of the specialized skills these contractors offer. Thirty-six percent of small business owners said reduced tax and benefits costs was the top reason they hire independent contractors.
Health Care in Play
The other macro factor at play here is the much talked about Affordable Care Act. Of those more likely to hire independent contractors from our survey, 23 percent said they’re doing it to stay below 50 full-time employees, in response to requirements from the new health care law.
At the same time, contractors are freed up to do this type of freelance work, because the ACA will allow them to get health insurance on the open market. The government, in this regard, has incentivized this environment.
What does it mean for the long-term stability of the economy? In some ways, it’s been good for businesses. They can employ specialists when they need to and otherwise save on costs. They’re moving forward steadily in a jobless recovery, which our data supports. Optimism is high (71 percent) and the average paycheck is up (0.2 percent), so they’re paying existing employees a bit more, though hiring is slightly down (0.2 percent).
My concerns are that 1) As a worker, it’s hard to feel you’re on stable footing when you have to constantly string together contract work; and 2) What happens to the workers without these specialized skills? How do they compete in this changing marketplace?
To find the perfect fit, stop treating the hiring process like a beauty pageant and start acting like it's a date.
It's a great American tradition: people dress up in their best clothing, parade in front of a judge and answer questions, hoping to sound intelligent yet totally inoffensive. A beauty pageant? No, I'm talking about a job interview.
But it shouldn't be that way. A pageant judge never sees the contestants again, but a hiring manager has to work with the new employee every day. So stop treating the hiring process like a pageant and, instead, act like it's a date.
Yes, a date. What's the goal in dating? To find someone to spend the rest of your life with. What's the goal in an interview? To find someone to spend 40 to 60 hours a week with. Here's how you can bring the dating process into your office with fabulous (and completely platonic) results.
Don't talk (entirely) about the past.
Of course, you want to know something about a person's history. That's called the resume. But many interviews spend too much time on the past when they should be focusing on the organization's needs.
Headhunter Nick Corcodilos gives an example of how ridiculous focusing on the past can be. Imagine, he says, if you went out on a date and your date said, "So, the last three women I dated really liked me, and I bought them flowers now and then, and took them out for dinner, and listened to them tell me their problems. I'm a great guy. You can ask them. So, will you marry me?" You'd run long before the check even arrived.
So instead of saying, "Tell me about a time where...," give candidates a real task to complete or ask them to prepare a presentation. Throw them problems and see how they solve them. It will give you a better idea of what they really will bring to your organization.
Introduce the family.
When hiring, it's not uncommon for the boss to do all the interviewing and decision-making, then drop the new employee into everyone's lap. She'll announce, "Here's Bob!," then walk out and expect everyone else to love and cherish Bob the way she does.
Mimecast founder Peter Bauer learned this lesson. "During high growth phases, I'd hire lots of new people and somehow mistakenly imagine that they all knew each other as well as I got to know them during the interview process," he says. "It took me a while before realizing how important it was to help employees integrate and get to know each other in order to develop a positive team culture."
Just like you wouldn't drop your new boyfriend off to spend the weekend solo at your mom's house, when you bring someone new on board, it's your responsibility to integrate. And if you can involve your current staff in the hiring process, even better. That way, you're more likely to find an employee that benefits the whole "family."
Let opposites attract.
The ideal employee loves your business the way you do, so naturally the person most likely to do that is one who is just like you. Right? Unfortunatelly, that doesn't work in your business's best interests. EZ-PR founder Ed Zitron started out looking for employees who could do exactly what he could do. "I thought I needed to clone myself. I thought I needed to just do more of what I do, getting results to make up for less-than-passionate press releases or slowly-delivered blogs."
When he finally realized that he needed assistants who had strengths where he had weaknesses, he got results. Perfect ones, actually, because these hires had skills that Zitron didn't have. When you stop looking for mini-me and instead look for someone who completes you (or your department), you'll get a perfect match.
How to walk the line between creative difference and destructive annoyance with an employee that irks you.
First off, why should you bother?
It’s your company. Why not just hire people you like or, should one unpleasant person slip through the net, simply fire them? If someone is truly obnoxious -- a real, certifiable jerk -- then that is probably the best strategy. But if one of your team members isn’t really a bad person but simply somehow rubs you the wrong way, there are good reasons to find ways to make it work.
Despite all the chatter around cultural fit, working with people that are different from and challenge you pays dividends. As Margaret Heffernan has written here on Inc.com: "The company in which there is no conflict is the one where there's no debate and precious little thinking. The reason you need people not like you is because they will spark argument and dissent."
But even if hiring people who wouldn’t invite over for a beer in a million years makes abstract sense, the day to day of generating creative conflict without generating misery is a fine balance. So how can you get along with an employee you simply don’t like? That’s the question Amy Gallo took up on the HBR Blog Network recently. The in-depth post offers case studies and lots of details and is well worth a read in full, but Gallo’s advice boils down to this five-step plan of action:
Don't assume it's a bad thing. "From a performance standpoint, liking the people you manage too much is a bigger problem than liking them too little," says [management professor Bob] Sutton. The employees you gravitate toward are probably the ones who act nice, don't deliver bad news, and flatter you.
Focus on you. Rather than thinking about how irritating the person is, focus on why you are reacting the way you are. "They didn't create the button, they're just pushing it," says [Organizational psychologist Ben] Dattner… "You don't have to go into therapy to figure it out but be honest with yourself about what situations or attributes make you most irritated," Dattner says. Once you've pinpointed the triggers that might be complicating your feelings, you may be able to soften or alter your reaction.
Put on a good face. Whatever your feelings for your employee, he will be highly attuned to your attitude and will presume that any disapproval or distaste has to do with his performance. The onus is on you to remain fair, impartial, and composed.
Keep your bias out of reviews. When someone irks you, you need to be especially vigilant about keeping your bias out of the evaluation and compensation process. Dattner recommends asking yourself: "Am I using the same standards that I use for other people?"
Spend more time together. This might sound like the last thing you want to hear, but it might help to give yourself more exposure to the problem employee. Sometimes strong medicine is the most effective cure.
Check out the complete post for much more on each of these points. If all of this sounds like a lot of work, first remember that the perks of business ownership also come with some burdens, including working nicely with a wide range of people. Then, perhaps management consultant Peter Bregman’s words might offer some comfort.
Thinking about why you dislike people (see step two above) can be incredibly character building, he asserts. “Chances are, the reason you can't stand that person in the first place, is that they remind you of what you can't stand about yourself. Suddenly, working with people you don't like becomes a lot more interesting. Because getting to know them better, and accepting the parts of them you don't like, is actually getting to know yourself better and accepting the parts of yourself you don't like,” Bregman has written. So at least you'll end up a better person if you approach it right.
What are your best tricks for managing folks you just don’t like very much?
The company is using its recent $60 million funding round to snap up international competitors and extend its reach.
Eventbrite hit another milestone this year, announcing its first acquisitions.
The online ticketing company announced Tuesday that it has acquired London-based event data company Lanyrd and Argentinean-based ticketing company Eventioz. According to the announcement, the move is part of the company's expansion plans that came after raising a $60 million funding round from Tiger Global Management and T. Rowe Price in April.
The company said the acquisitions would help it accomplish the goals of "accelerating international expansion; mobile growth and development; [and] event discovery."
Co-founder and CEO Kevin Hartz added: "These two acquisitions perfectly align with the strategic focus for the company, while adding significant assets and technical power to our platform."
The team behind Lanyrd, founded in 2010, will reportedly relocate to Eventbrite headquarters in San Francisco, while it looks like the Eventioz will continue operating from Argentina. The terms of the deals weren't disclosed.
Randy Befumo, Eventbrite's VP of Strategy, explained to Inc. via email the significance of the international buys:
"We believe that Latin America is a very compelling region with a good combination of economic growth, urban populations and access to technology. We are buying Eventioz specifically to get an experienced team in this region that has already been successful growing a business very much like our own. We already have Eventbrite UK headquarted in London...while London is very important to us, and is our third largest city in the world, the Lanyrd deal is not about geography but about the team and the product they have crated."
Eventbrite, which has 250 employees, announced earlier this year that it has processed over 100 million in global ticket sales--around $1.5 billion in gross sales. Also in August, the company announced an exclusive partnership to handle ticketing at Tough Mudder, another start-up darling.
But Eventbrite's history hasn't always been so rosy: The company was founded in 2006 and struggled to get off the ground during the recession.
As the market goes global, American developers are losing ground, finds a surprising new study.
American app developers are losing their grip on the global market.
As of June 2013, only 36 percent of the total number of apps worldwide were created in the U.S., down from 45 percent in both 2012 and 2011, according to data collected by Flurry.
In terms of engagement, American apps reign supreme, securing 70 percent of the total number of users and engagement this year. Still, that number is rapidly declining, as it was 75 percent in 2011.
In terms of local app use, U.S. users spend most of their time with apps developed in their country, while only 41 percent of the time are they engaging with apps from abroad.
However, that story is changing in China. There, U.S. apps only account for 16 percent of total engagement time, while the majority (64 percent) of their time is spent with apps that were made in users' country.
Perhaps the biggest issue facing U.S. developers going forward is how well they will translate and adapt their products to an increasingly global audience. In recent years, American developers have shied away from doing so, but China's size and rapid growth indicate the U.S. faces tough competition.
Some countries with smaller populations where the local language is not among the world's dominant have been aware of this problem for years and were forced to create globalized and culturally appropriate apps out of necessity. Perhaps the most famous are Finland's Angry Birds, Russia's Cut the Rope, and Australia's Fruit Ninja--all popular at home and abroad.
On another note, Flurry noted that even as advertising apps continues to get more expensive, app distribution itself has gone global. There are three reasons for this: Apple's App store and Google Play have removed software distribution costs; the number of active mobile devices around the world continues to grow; and the total cost of development is still inexpensive compared to packaged PC software.
Flurry completed its study in June by tracking 1.15 billion monthly active mobile devices, a number that grows every month.
Sometimes cool technology doesn't take off until another company comes up with an innovative twist on it.
You know that driverless car Google has been working on? That curious diversion of money and time that at least got some press attention for the search giant? It's just become a real business.
Mobile transportation company Uber, which has $307 million in funding, will buy 2,500 of those driverless cars. This is a reported $375 million purchase--even more than the total money the company has brought in.
The move makes sense. A company that matches people who need rides with limousine and cab services now has a way to dispatch autos to pick up customers without having to settle for a cut of the total fee. But more importantly, this is an example of an important type of partnership: one company that has something new and another that has a way to bring it to market.
It's actually fairly common for innovations from one company to languish until another develops a twist to make them popular. Credit cards, for example, were common in the early 20th century. Stores issued them to their customers, but the use was limited. Both Diners Club and American Express were products of the 1950s and helped expand consumer recognition of credit cards because they created cards that could be used across large networks of supporting vendors. It took Bank of America to broadly introduce revolving credit to turn the charge card into the credit card. People snapped them up because they had access to borrowing money on demand.
Television is another example. It has existed in various forms since the 1920s, not counting earlier precursors. For decades it was a curiosity whose practical expanse was curtailed by World War II and the diversion of materials and manufacturing to military use. What made it take off after the war? Texaco moved its popular radio program into the new medium and eventually settled on comedian Milton Berle as the host. A heavy use of slapstick and low comedy made the show highly visual, a must for success in the new medium. Add major guest stars and relatively strong production values, and, as The Museum of Broadcast Communications notes, the result helped drive television ownership from 500,000 sets in 1948 to 30 million in 1956.
PCs had been around for a number of years as curiosities. What started the broad march of sales was the appearance of applications that let people bypass the need to program and offer capabilities that consumers didn't know they needed, but recognized they wanted them when they saw them. A more recent example would be the smartphone. Cell phones had been around for decades and shrunk in size over time. The BlackBerry had a large following because of the email and messaging capabilities. But it took Apple and a slick touch interface combined with the ability to download apps that could harness raw computing power to create the iPhone, a device that changed what people expected from a mobile phone. Other vendors saw the possibilities and jumped aboard.
In each case, the concept of a product wasn't new. It takes time, energy, and a different type of innovation to take technology and realize what the native possibilities are. Someone has to recognize the potential and then package it in a way that makes this clear to consumers.
That's what Uber hopes to do with Google's driverless car. People might be hesitant to purchase one for their own use, but to have a vehicle show up when you need it and take you where you want to go? That could be enough for people to give the vehicles a shot. Uber shows that entrepreneurial start-ups don't necessarily have to invent the killer product if they can find the twist that helps the market recognize useful innovation for what it is.
The Y Combinator co-founder addresses the controversy surrounding his recent comments in an Inc interview. about why founders with foreign accents are less successful.
My interview with Y Combinator co-founder Paul Graham in Inc.'s September issue caused quite the stir in tech media this week. The cause of the commotion: Graham's assertion that founders with "strong foreign accents" have been less successful after graduating from Y Combinator.
Not surprisingly, the comment outraged people who believe, and with good reason, that Silicon Valley has become too homogenous for its own good. New York City entrepreneur Anil Dash's sarcastic response via Twitter is below:
"The problem is not the cultural signal accents send, but the practical difficulty of getting a startup off the ground when people can't understand you," he writes.
"We have a lot of empirical evidence that there's a threshold beyond which the difficulty of understanding the CEO harms a company's prospects."
Graham goes on to say that in his own office hours with Y Combinator founders, the language barrier can impede communication. "Often when I feel it happening, I warn the founders, because most of the people they encounter are not going to work as hard to understand them as I do."
Here's more from Graham's post:
"A startup founder is alway selling. Not just literally to customers, but to current and potential employees, partners, investors, and the press as well. Since the best startup ideas are by their nature perilously close to bad ideas, there is little room for misunderstanding. And yet a lot of the people you encounter as a founder will initially be indifferent, if not skeptical. They don't know yet that you're going to be huge. You're just one person they're meeting that day. They're not going to work to understand you. So you can't make it be work to understand you."
Graham concludes his post by saying that his goal in discussing founder accents to begin with was to help founders. "I don't mind people beating on me so long as I can get that message through to founders who want to come to Silicon Valley from other countries," he writes. "It's fine to have an accent, but you must be able to make yourself understood."
During our interview, it was clear to me that this was the point Graham was making all along. To be able to communicate clearly--whether it's in a different language or simply to an audience who's unfamiliar with your product--is undoubtedly an advantage as an entrepreneur. But Graham and the rest of his Silicon Valley cohorts would be well-served to remember that, as much as we celebrate entrepreneurs for their personal role in building successful companies, often it's what they've created--and not how smooth their pitches are--that's most important.
Smart entrepreneurs know that valuable lessons can be picked up in any setting, even a music video awards show.
I bet some of you are giving me the side-eye for the title of this article. I ain’t mad at you. But I’m going to go out on a limb and say that I’m not the only one out there "shame watching" mindless TV on occasion. And since I’m a multitasking entrepreneur, I gleaned a few business lessons last weekend when I caught some of the MTV Music Video Awards.
Here are some of the folks who reinforced some valuable business truisms:
Miley Cyrus: Stay on Brand
Who hasn’t heard about Twerkapalooza by now? Small business owners, it’s okay to push the envelope when it makes sense and is true to your soul. And we all know that innovators are not always well-loved ... until a business idea has already succeeded through the roof, that is! But when you see your consumers actually recoil -- whether through a sudden drop in sales, social media backlash or low attendance at events -- pause long enough to ensure that you’re on mission. If you’ve accidentally veered, humbly get back into alignment.
Robin Thicke: Consider the Company You Keep
Just by performing with Miley Cyrus, Thicke received more than a few raised eyebrows. "Blurred Lines" indeed! The wrong associations can put you in the hot seat when a business partner’s unsavory behavior casts shade on your hard-earned reputation. It’s tough enough to ignore judgment when it's unwarranted, so why keep company that legitimately prompts people to question your decision-making? Entrepreneurs, watch the company you keep.
Justin Timberlake and *NSYNC: Keep Your Fans Happy
Seems that most people enjoyed JT’s performance but were left wanting more of that *NSYNC reunion. It was sweet to see *NSYNC fans grooving in their seats, which reminded me just how important it is to remember the people who helped you get to where you are! On the flipside, it’s also essential to keep your magnetism and leave your fans wanting more.
Will Smith and Family: Be Authentic
Anyone else catch that hilarious picture of Will Smith’s family seemingly looking appalled at whatever was on stage? Originally, folks thought this was a reaction to Miley Cyrus, but it turns out they were watching Lady Gaga’s performance. Regardless, the public ate the photo up! It underscored that consumers will often shock you by how positively they react to your authentic responses. Ever apologize to an angry customer via social media only to have them become one of your biggest fans? Or shared a horror story in a news article and had an overwhelming number of supportive comments? Being consistently authentic exudes a confidence that can boost your bottom line.
Lil’ Kim: Watch How You Pivot
Ahh, Lil’ Kim. I can’t see her without fondly remembering how much fun we had jamming to her hits during my last years of college. But the "Queen Bee" of today is shockingly different from the rapper I was introduced to all those years ago. Seeing her on the red carpet served as an instant reality check: if you move too far away from your original products, persona or mission, you may be surprised at how deeply fans loved the old version. We all have the right to innovate, grow and change. But when you launch new initiatives, you should also make sure to retain a healthy dose of "If it ain't broke, don't fix it."
Katy Perry: Stay Classy
When the media questioned Katy Perry about her alleged beef with Lady Gaga, she did the classy thing and shared her admiration for Gaga’s work. Even if you actually have tensions with a business contact, rarely does anything good come from sharing that information with others. Beware of anyone who seems overly interested in dishing on issues, and as your mom likely warned you, "If you don’t have anything nice to say, don’t say anything at all!"
The VMAs certainly aren’t the Harvard Business Review, but if you’re going to watch mindless TV, you might as well find a way to actually feed your mind. Did the VMAs unexpectedly give you any business insights?
In an excerpt from his forthcoming book, Without Their Permission, Alexis Ohanian explains how to bring in those first few dollars.
Unless you get incredibly lucky (remember, there are already many factors going against you), you'll need to have at least built something people want before you can get your first round of funding. The application process varies, but most accelerators follow Y Combinator's lead and start with a written application (submitted online, of course) followed by offers for in-person interviews. I'm biased, but not only did Y Combinator create the blueprint, they also set the standard. So at least for as long as they're doing that, let's use them as a benchmark.
If you get in to Y Combinator, you'll trade some equity (typically between 2 percent and 10 percent, but usually between 6 percent and 7 percent) for somewhere around eighteen thousand dollars (on average) in funding and their three-month program. If you can't ship something in that period, you've got to hard reset.
What if you don't? Or don't want to? Well, you're not alone, as most of the successes in our Internet industry never went through an accelerator.
The cost of starting a company falls every day as the costs of hosting your website fall. When we started reddit, we ordered our servers online, as parts, and assembled them in our living room before schlepping them down to the co-location facility (a big room full of servers where you can rent space to put in your own). Just a few years later, Amazon launched a brilliant cloud computing service that did away with our need to ever see our servers-;all it takes is a credit card, and your site can be up and running for a pittance (a price that heads down every month). Hosting a website is now essentially a utility.
When you're not dealing with inventory, or a retail location, the barriers to entry plummet, and businesses can start from dorm rooms and coffee-shop tables. As long as you can cover rent and keep food in your belly (this is what Paul Graham means when he says that all startups aspire to be "ramen profitable"--that is, profitable enough to keep the founders living in their frugal, college-like lifestyle, with a roof over their heads and ramen in their bellies), you can keep your business going-;and growing-;long enough to get that next round of funding.
This funding may come from friends and family, or it may come from wealthy individuals known as angel investors. The phrase is rather generous; I prefer to think of them as wearing monocles and top hats.
The breadpig above captures exactly what I look like at the moment I'm deciding whether or not to invest in a startup. In fact, all investors look exactly like this. No halos or wings, just monocles and top hats.
But the idea is that these investors are willing to take a big chance on a very early-stage company in the hope that they'll get in on the ground floor of something huge. I've done more than sixty of these early-stage investments since selling reddit. For many of us, investing in an early-stage company is a risky investment strategy, but it's something we do because we were entrepreneurs ourselves once. We think of it as startup karma-;a way to give back to the community and honor all the folks who took a chance on us.
Additionally, young founders are challenged by a lack of connections and the appearance of youth, which in many industries, unfortunately, correlates with a lack of legitimacy. Adam Goldstein at hipmunk, then twenty-two, overcame these hurdles through sheer determination. Many other founders do their business development over the phone first, where one is only judged by one's voice and one's choice of words. Then when it comes time for an in-person interview, one's youth becomes an asset, as the executives who would've once been skeptical are now impressed.
Unless you've got a rich and generous uncle, you're going to have to be resourceful. Actually, even with a rich and generous uncle, you'd still better be relentlessly resourceful, because in this industry, if you're not making something people want, you're hosed.
Excerpted from WITHOUT THEIR PERMISSION: How The 21st Century Will Be Made, Not Managed, by Alexis Ohanian. Copyright 2013. Reprinted by permission of the publisher, Business Plus. All rights reserved.
Kathryn Minshew, founder of The Muse, gives practical tips for managing young interns who are new to the workforce.
A recent study by two freelancers compared the two sites.In the crowdfunding world, it appears Kickstarter is king-- at least according to a recent study. Two freelancers compiled crowdfunding data from the two sites and found that Kickstarter had nearly six times as much funding as Indiegogo. The researchers, Jonathan Lau and Edward Junprung, used Kickstarter’s public data and scraped Indiegogo’s website for data to compare the success of the two different platforms. Lau and Junprung included their methodology in their findings:We built a bot that scraped IGG’s projects section, which supposedly contains all campaigns ever launched. On August 17th when we ran our bot, Indiegogo had about 4900 pages of campaigns. The bot navigated through each page and grabbed the campaign page URL, amount raised, percentage of goal raised, category and time remaining on the campaign. We then threw the numbers into Excel and replicated Kickstarter’s stats table using IGG’s numbers. Lau and Junprung found that Kickstarter has raised $612 million for successful campaigns and Indiegogo had apparently raised only $98 million. Kickstarter and Indiegogo are reported to have raised comparable amounts for unsuccessful projects--$83 million and $70 million, respectively. The study found that Kickstarter has an average success rate of 44 percent, with Indiegogo’s success rate coming in around 34 percent. Additionally, it appears that Kickstarter has had over twice as many campaigns than Indiegogo. But could these numbers be right? One issue: Indiegogo delists campaigns that raise less than $500, whereas Kickstarter does not. Not to mention, Indiegogo claims these numbers are just plain wrong. An Indiegogo spokesperson told Venture Beat that "each alleged Indiegogo statistic in the post that you refer to is inaccurate." But when asked to provide corrections and other data, the spokesperson said it was against the company's policy A quick search of Kickstarter found that the Kickstarter campaign with the greatest funding to date has been the Pebble watch with $10,266,845 pledged. Indiegogo’s campaign with the greatest funding to date was the Ubuntu Edge with $12,814,196, which was unsuccessful--though Indiegogo allows projects that don’t meet their funding goals to keep their pledged funding for a higher fee. An email to Indiegogo's press office was not returned before press time.
How do you encourage a sense of play and risk-taking in your organization? The founder of Atari suggests you take one annual gamble.
Nolan Bushnell, legendary founder of Atari and Chuck E. Cheese, recently came out with his first book, Finding the Next Steve Jobs: How to Find, Hire, Keep, and Nurture Creative Talent.
In an interview posted by leadership speaker Skip Prichard, Bushnell--who hired a young Jobs at Atari in 1974--shared some pearls of wisdom about creativity and leadership with his publisher, Tim Sanders. Here's a sampling:
Sanders: I know it's your strong belief that leaders at companies need to foster a creative culture. If you were going to give leaders one piece of advice on how to think differently about a creative culture, what would that piece of advice be?
Bushnell: I would encourage them to say "yes" to at least one crazy idea a year.
Sanders: Give me an example of some of the crazy ideas you heard when you were in Atari.
Bushnell: Among the many that were pitched to me, one that stands out was this notion of making pretty pictures when music happened. It seemed ridiculous at the time. The product ultimately turned into Midi.
Sanders: Midi, of course, is the standard that still exists to this day for connecting music devices to each other and synchronizing them.
Bushnell: I think we built 20,000 of them, and I think we sold six at full-price. (Laughs.) But it did become a force within the industry, for sure.
Introvert? Extrovert? Doesn't matter. The good news is, neither personality type really matters when it comes to managing people.
I've learned a lot about leadership lately. Back in my heyday as a middle manager in corporate America, and before that as a manager for a small start-up, I found my introverted personality worked against me most of the time.
Back then, I'd rather sit and read a book in a coffeeshop than kick back with employees after work. I shunned the spotlight and chose introspection instead.
Introversion as the Enemy
I once had a pivotal meeting with an employee. She was a project manager on my team (I had somehow worked up to a director position). Long story short: she told me I was the worst boss ever and she hated my guts. She asked how I ever got into this role. She wanted to quit, but I talked her off the ledge--mostly by apologizing to her.
At the time, I viewed this exchange as mostly my fault. I was just not social enough; I didn't check in with her often enough to see how things were going. Sure, I had budgets to manage and meetings to attend. But my introverted personality got the best of me.
I'm not alone. After writing my story about carving out a management career as an introvert, I received dozens and dozens of supportive messages. It was in influx of people who have felt my pain. In most cases, the message was--"I'm also an introvert who struggles with managing people."
The good news is, your personality may not dictate how well you manage people as much as you think. Both extroverts and introverts can do it. The skills can be learned, adjusted, tweaked, and augmented.
A Learned Skill
This study is a useful tool for understanding how your specific personality can help you lead in a small business, and that leadership is a skill, not a talent. To get a summary, I spoke with Jim Kouzes, the co-author of the report. Kouzes and Barry Posner wrote "The Leadership Challenge" book and conduct the Leadership Practices Inventory.
"Leadership is a set of skills and abilities that are learnable by anyone who has the desire to improve and the willingness to practice," Kouzes says. "That's true for extroverts and introverts alike. They each have particular preferences for how they energize themselves, take in information, make decisions, and organize themselves, but both are equally capable of providing exemplary leadership."
Kouzes told me every personality type has to lead by example. This hit home for me: I used to think I had to be big and blustery with team members when talking about my vision. In reality, I could have accomplished the same goal in my own way. I didn't need to try and be animated or social--I needed to improve my skills. The reason that employee thought I was a terrible boss was mostly due to my lack of communication, which didn't have to be blustery at all--it just had to be consistent.
"Extroverts tend to express their passion about principles with great vigor, while introverts would be more likely to engage in quiet conversation about expectations," explained Kouzes. For me, that would have meant more in-person mentoring with employees, learning about their needs and desires--something I've become very good at subsequently as a journalist over the past 12 years interviewing people.
Interestingly, I was exceptionally good at "visioneering" in the workplace. When I started in one corporate job with three people, it grew to almost 50 in only five years. We took on projects in every part of the organization, and I was good at selling our services. Many of these meetings involved one-on-ones with higher-level executives.
Kouzes says any personality type can learn the skill of communicating vision.
"Extroverts tend to demonstrate this practice by brainstorming opportunities or directly appealing to the desires of others," he says. "Introverts, on the other hand, are more inclined to imagine what could be in their minds or exchanging ideas in one-on-one conversations. Extroverts have to work a bit harder at giving space to others to share their hopes, dreams and aspirations, while introverts are very mindful of the need to be inclusive," he says.
It's still a journey for me.
What's your story? Post in the comments if you've been able to figure out your own successes and failures, and how your personality type hindered or helped.
The costs may be hidden, but they are still there. That alone should motivate you to treat your staff well.
You'll hear people talk about the high cost of turnover, but when you try to press for the actual costs they don't really know. It seems like a mysterious thing that people talk about.
And it's true--the costs are largely hidden. It doesn't hit your profit and loss statement. It's not something in the budget. There are some hard costs, like the cost to post a position on a job board, or for specialized positions, the cost of a headhunter. But, even if you recruit strictly through word of mouth and employee referrals, there are costs to losing an employee. Here are the things you're paying for.
Lowered productivity. The person who left was doing something, right? And who is doing that job now that the position is vacant? No one? That's lost productivity right there. What if you just farm out the tasks to other people? Chances are, the most important tasks will get done, but other things will fall by the wayside.
Overworked remaining staff. Can you measure this in dollars? If your employees are exempt, their paychecks remain the same, so how is this a cost? Well, as they get stretched thin, their quality of work goes down as does their satisfaction and engagement. Which means that they are more and more likely to start looking for a new job and leave. And the longer they stay in their overworked roles, the harder it will be for you to regain their goodwill even after you've filled the vacancy.
Lost knowledge. A ton of people can do what your former employee did, but they don't have the specific knowledge she had. It's not just about putting numbers in a spreadsheet, writing code, or selling a product. It's about knowing the people, the traditions, the location of relevant information, what the boss likes and a million other things that come from working for a company for a long period of time. All that goes away when someone quits. And sometimes it's more than just general company knowledge. How many of your employees have their jobs documented well enough that someone could figure it out with their documentation? Do you have people cross trained? Does one person have control of the passwords?
Training costs. Paid training costs are obvious. If you have to pay $5,000 for a seminar to teach your new employee your complex internal computer systems, that's a cost noted on a spreadsheet. But, when there are no training classes to attend, there are still costs. Someone has to sit there and show him what to do. Someone has to double check work until the employee has proven himself. And that all takes the "trainer" away from her regular job. Which means you're paying two people to do one job. Costly.
Interviewing costs. If you have to pay travel expenses, that's costly. But if all your candidates are local, you still have to take the time to go through resumes, talk with numerous people, do formal interviews (which take an inordinate amount of time), talk with colleagues, and figure out who is the best employee.
Recruiters. I'm not talking headhunter fees (which are absolutely worth it for some positions), but rather the employee who has to find the candidates. In some business, you have dedicated HR or recruiting staff that takes care of this. They all get paid. And for smaller businesses, this task usually falls directly on the shoulders of the hiring manager--you know the one who is extra busy because he's down one person? That costs too.
What do all these costs add up to? Well how much? Estimates run as high as 150 percent of annual salary. Much less for lower level positions, but still significant enough to make retention a high priority for your business.
This doesn't mean you shouldn't fire problem employees. You should--because they aren't being productive and they encourage your good employees to quit. But, you should first try to counsel and coach and correct. And you should consider your pay scales for your good employees and give raises and bonuses when appropriate because it will cost you more to lose that good employee than the $5,000 raise you refused to give.
Turnover is expensive. Sometimes it cannot be avoided, but when it can, you should avoid it by doing the right things for your employees.
Fifty-two percent of small businesses still don't have a website. Don't be one of them. Check out these tools that will get your brand online--today.
There is no excuse for this one.
Recently, a survey by a marketing company called Yodel found that 52 percent of small businesses still do not have a website. (They interviewed a sample size of about 300 companies.) On top of that, 56 percent of businesses surveyed also do not use any means to measure online success.
C'mon, people. In the past, the only way to start a new site was to pay a design agency a few thousand dollars and hire a programmer. That's ancient history now. Several sites offer a quick and painless approach where you can plug in your own company graphics, type in some text, and have an amazing site with full SEO and social media integration by supper. Here are four.
One of the my recent finds, Webflow is smarter, savvier, and better-looking than some of the older build-your-own tools like Weebly or Webs. The interface is intuitive and the templates are amazingly good, but the main draw is that it is a full Web editor. You can use CSS3 style sheets that dictate the format and allow easier changes. There are alignment grids, custom form options, and even versioning to help you track your site design.
2. Jimdo for Mobile
Jimdo is a powerful template-driven tool for creating a website. I wrote about it last fall in the magazine. Now, there's a mobile version. You might wonder: do you really need to the ability to create a website from your phone? The mobile version allows you to snap photos and integrate them right into your site. As you might expect, it's great for designing a mobile website. And, you can start a site on the Web and make the finishing touches on your phone or tablet.
I also wrote about Sidengo for the magazine last fall, but it's still a favorite of mine for a quick, easy site with a trendy look. There are two main advantages. One is that Sidengo automatically re-formats the site for Web or mobile. And, you can create multiple sites with one account--e.g., one for each new product or marketing campaign.
Okay, maybe you don't have time to plug in graphics and text for a full site with navigational links. Smore is another favorite site builder of mine and it's intended for people who are pressed for time. At the very least, you can plug in a few details about your company and create an online brochure, one that has your contact info and mailing address. And, the finished sites look really professional.
Location data is money. Foursquare's got plenty of it, plus a new product that promises to make it profitable. Is the start-up finally having its moment?
In January 2013, PrivCo, the research firm, said Foursquare would fail by the end of the year.
Granted, the year isn't over--but it's pretty clear PrivCo was wrong.
On Thursday, Bloomberg reported that Foursquare was "in talks with multiple large technology companies about a potential strategic investment." According to the report, Foursquare is now back on track to beat sales expectations by the end of the year, and the business development team has been successful in attracting several new advertisers to their "post-check-in product."
What is their "post-check-in product," you ask?
As TechCrunch explains, the new Foursquare "will ping phones with personalized recommendations based on a user's targeted physical location, without needing them to check in at all."
In a recent interview with Fast Company, co-founder and CEO Dennis Crowley explained this product is basically the holy grail of local discovery, and one that has the potential to turn Foursquare from a fun, though niche social check-in site, into a massive local data company.
Personalized recommendations may seem like a marginal step forward--a decent iteration on an otherwise underwhelming product--but I'm inclinded to believe there's a bigger story here. As writer Austin Carr put it, "If Google has built a $294 billion business based on your explicit searches, Foursquare's bet is that the data behind your implicit intent are just as lucrative."
If the new product is a hit, big tech companies will be champing at the bit. Plenty of firms have attempted to become the "local layer" of the Web, but no one's really succeeded. (Perhaps Yelp has come the closest, but the recommendation site is continually bogged down with allegations that users are manipulating reviews.) The new product may--finally--put Foursquare in a good position for a big exit.
The question becomes: Who could be the highest bidder?
Perhaps the obvious answer is Apple. Over the last several years, Apple has been building out its own local programs. Its most recent acquisition, Locationary, is basically a local data broker--a nice complement to the company's new iOs map (which it's surely trying to improve).
Foursquare could potentially turn Apple Maps into a more social product, one that would likely boost user engagement and be an attractive selling point to advertisers. As Romain Dillet says on TechCrunch:
Foursquare could replace everything related to Yelp in iOS. At the same time, Apple released Find My Friends a year ago. It has very few active users and bad ratings in the App Store. Apple could safely forget about Find My Friends if Foursquare becomes an Apple app...It remains to be seen whether Apple could be tempted by its talented team of 150 people in order to develop the product further. Foursquare data becomes even more valuable for the users as people check in and add other users as friends.
The other obvious answer is Google. Like Apple, Google has poured a ton of time and resources into developing its local products. Buying Foursquare's data could be a huge play for Google, especially if the company's data can translate into higher ad-revenue from local businesses that already advertise on Google.
Say you live in New York City and you like bowling. Google probably already knows this about you, based on various search indexes associated with your account. Right now, when you log in, you're likely going to see ads for bowling alleys in New York. The only problem is that when you're on your computer, you probably don't have plans to bowl. But with Foursquare's location data, Google would be able to sell your location data to its existing local bowling advertisers at a premium price, giving them access to you when you're on-the-go. That gives advertisers the chance to hit you with an ad at the right time--and place.
Also, let's not forget that Google recently purchased Waze for $1.1 billion, reaffirming the company's willigness to shell out large amounts of cash to boost its local division.
Marissa Mayer and Dennis Crowley are old buddies. Back in 2005, when Mayer was still at Google, she was in charge of the acquisition of Dodgeball, Crowley's first start-up.
Since taking the helm of Yahoo in 2012, Mayer has been almost exceedingly vocal about the company's need to make serious acquisitions to boost its mobille and local products, and align itself with a younger generation. Enter Foursquare.
In June, Kara Swisher of AllThingsD reported on comments made by Yahoo CFO Ken Goldman:
Goldman added that Yahoo would continue to do acquisitions, "to help basically accelerate our progress… and continue to see the velocity of products in the mobile space."
Of most interest is "localization of the space," especially in providing search and content to consumers.
Hey, Dennis Crowley of Foursquare, that sounds like you!
It also fits the rubric of a standard, Mayer-approved Yahoo acquisition. As Quartz put it:
Like Tumblr’s rabid fan base, Foursquare has something going for it that makes it uniquely valuable. That’s its location data, which it shares with companies like Instagram and sells to various advertisers. While Yahoo’s approach to making Tumblr pay for itself is to load the site up with ads, the approach would probably be different with Foursquare, which only has 33 million users. Yahoo could use Foursquare’s technology and data to beef up its web search, by offering people search results based on where they are. Or maybe Yahoo could just make Foursquare profitable through ads, since Yahoo, being bigger, can more easily negotiate deals with advertisers.
A Credit Card Company?
Foursquare has a long-standing relationship with American Express, a partnership forged in 2011 that gave discounts to card members that checked in at various stores.
Some see Foursquare's location data as valuable to advertisers and local retailers, but it coud also be just as lucrative to credit card companies, who collect transaction fees on each and every purchase that's made. As the VC Hunter Walk explains:
Your credit card company has a tremendous amount of data on where you, and the world, shops. Not purchases at the SKU level--they largely don’t know what you bought at West Elm or Cheesecake Factory--but they do know that you spend $350 at a furniture store and $75 at a casual food chain. Now extrapolate this over millions of customers. Using covisitation data they could recommend to me other establishments visited by folks with similar spending patterns. “Hunter, because you enjoy West Elm you might also like SF Modern Design located at 1000 State St.” This would be especially helpful when traveling.
But none of these credit card companies are (a) skilled at building consumer facing applications, (b) upstream of purchase decisions and (c) have place level data for retail establishments. Oh but wait, Foursquare has all of those. By combining with Foursquare, the credit card companies could finally justify and preserve their transaction fees (in the face of competition from other payment options) but working to drive demand to the local retailers. Today they do this in very non-scalable ways such as one-off marketing programs such as AmEx Small Business week.
[Update: Microsoft is rumored to have its eye on the company too. A Foursquare partnership would give Microsoft a strong foothold in the social and mobile sphere's, especially as it develops its own set of tablets and smartphones.]
This is the dark horse option--the bizarre scenario in which Foursquare's future involves an IPO or bankrupcy. Both are equally unlikely, but considering the company's raised north of $100 million, Crowley may not find any acquisition offer under $1 billion palatable for himself or investors.
What is certain, however, is that a company that was once perceived to be the next "highly-funded casualty" is very much alive.
London calling ... New York technology companies. Submissions for the GREAT Tech Awards are due September 6.
If your start-up has been itching to open a London office -- or at least to get a British phone booth photo op -- now may be your chance to score a free plane ticket over, courtesy of the Queen. The UK goverment is sponsoring the GREAT Tech Awards to bring 5 New York-based technology companies to London for a week-long visit.
In addition to a "premium economy" plane ticket, winners will get a variety of introductions, a two-day business development program, limited legal services and company registration, and other benefits.
They'll be selecting a winner in each of five categories: hardware, education, lifestyle, finance and media. If you're interested in applying, you must be headquartered in the United States with a New York presence, have "a verifiable international client base and be ready to grow internationally," focus on technology, and have between three and 100 employees. Also, companies with a current UK presence are not eligible.
Applications are free and must be submitted by 11:55 pm EST on September 6. Winners will be announced on October 2 at the GREAT Tech Awards Gala in New York City.