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How to Launch a $100 Start-up

Posted on September 20, 2011 by admin

Each day, Inc.’s reporters scour the Web for the most important and interesting news to entrepreneurs. Here’s what we found today: How much does it cost to start a business? A Babson College estimate concluded that on average, with buying equipment, inventory, and paying employee salaries, it costs $65,000. The Wall Street Journal decided that sounded a little high – and sought out examples of extreme bootstrapping . Its findings? Launching an impressive business on $100 is absolutely possible. Kael Robinson did it (she only sunk $40 into her Live Worldly Brazilian bracelet company initially). So did Jeff Swedarsky, who says with $110 he bought a domain name and registered his business with the Commonwealth of Virginia, he founded the culinary tourism company Food Tour . He hopes to clear $300,000 in sales this year. Ignorance is bliss for new entrepreneurs. That’s according to entrepreneur and VC Anthony Tijan, writing in a recent blog post for the Harvard Business Review . Tijan argues that while experience may be helpful in growing and sustaining a company, a certain amount of ignorance is necessary for generating new and novel ideas. As he puts it, “Being unencumbered by external opinions allows two critical entrepreneurial traits to thrive: creativity and conviction.” Tijan suggests that without prior knowledge of existing constraints, entrepreneurs are more apt to develop creative ideas and then maintain their conviction while making those ideas a reality. The tricky part, however, is realizing that it doesn’t pay to remain perpetually ignorant. “The key is recognizing the critical moments in a company’s trajectory when the clean-sheet approach is a net positive.” Tracking bookings, revenue, and collection . In his latest post of his weekly series called “MBA Mondays,” New York venture capitalist Fred Wilson outlines the difference between the three terms and what bookings-to-revenue ratios can tell you about your business’ financial health . Learning lean innovation. Fast Company has an infographic that provides a speedy snapshot of how efficiently different countries around the world innovate and the U.S. isn’t looking too hot . Each country is represented by a ratio of how many patents it granted and the total wad it blew on R & D. The post writes that, “even though we grant more patents than any other country in the world, we also seem to simply throw money at the problem of innovation–and in the long run, that can’t be good for our own economic competitiveness.” For that we not only need to spend our money more wisely but direct more of it to products we can export rather than pharmaceuticals and war toys that change hands domestically. Here’s how you can partner with your customers to improve your R & D . Hulu’s plans to go public Just three years since it was founded, the online TV and film site is prepping for an IPO as early as this fall. The New York Times reports that Hulu execs are already in talks with investment banks, and they estimate the company could be valued at more than $2 billion. Though the site gets most of its money from advertising dollars, and reported only $100 million in revenue last year, its recently introduced subscription services may help Hulu compete with Netflix, which also offers streaming video. Its toughest competitor, YouTube, was acquired by Google in 2006. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Follow us on Tumblr. Friend us on Facebook. YouTube – Google – Hulu – Fred Wilson – Virginia Continue reading →

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How To Refine Your Business Idea

Posted on August 21, 2011 by admin

You know you have a brilliant idea for a business and you are convinced people will buy your product or service. Well, guess what. Even a good business idea might not be financially viable. It’s all a matter of putting aside your ego and being willing to create a business that will not only survive, but thrive. If you have an idea for a new product or service, you can’t be afraid to rethink it and refine it, says Jim R. Sapp, national business consultant and author of Starting Your First Business . The more you set out to do before the launch, the less you’ll have to do afterwards, adds Sapp. Also, the less costly it will be trying to fix things. Adrienne Simpson initially intended to run a traditional moving company out of her home in October 2002. The idea came to her after relocating her mother from Georgia to Michigan. “I thought I’d put everything in a box, put it on a truck and send her on her way. Oh, no! Mom started walking me through her home, pointing at things saying, ‘I’ll take that, let’s sell that, and I want to give that away,’” she recalls. Simpson’s first business plan (she’s done five revisions in nine years) described the company as a packing service. But she soon realized that when the elderly move they often relocate to a smaller home, an apartment in a retirement community or an assisted living facility. “The process involves many steps and is very fragmented,” explains the certified trucker who can handle 18-wheelers. By the second year of operation, Simpson shifted gears to make her Stone Mountain, Georgia-based company, Smooth Mooove, specialize in transporting seniors—and their beloved pets—and providing such value-add services as packaging, house cleaning, room reassembly, antique appraisals, estate sales, and charity donations. Her crew does everything: put clothes in the closets, hang drapes, make the bed, fill the refrigerator. But even still business was stalling. “I knew how to run an existing company, but I didn’t know how to run a start-up,” says Simpson, who worked 20 years for Blue Cross/Blue Shield and 10 years with Cigna Healthcare. Seeking money and marketing advice, Simpson went to the U.S. Small Business Administration (SBA) office in Atlanta and was connected to SCORE (Service Corps of Retired Executives) counselor Jeff Mesquita. “When you position your company you have to think outside of the box in terms of what makes you different from the competition,” says Mesquita. “Adrienne described that what she does is move seniors from A to Z, so, when they arrive to their new home it is like walking into a hotel room.” The only thing her clients have to bring is the clothes on their back (and maybe their pet under their arm). That’s when Mesquita suggested the business name change to Smooth Mooove Senior Relocation Services. That same night, Simpson went to a networking event. When people asked ‘what do you do?’ and her response was ‘I have a senior relocation service.’ Right away people said ‘Oh, you move seniors.” The business took off from there. It goes without saying that it takes more than having the right business name to run a profitable business. So, how do you guarantee your product or service is a money-maker. Here are five ingredients to help you create a recipe for success. How To Refine Your Business Idea: Test Your Idea “The best way to test your idea is if you’re employed full-time and can sell your product or service in the marketplace on weekends,” says Sapp. If the business is already your day job, then you have to move quickly to test, verify, and tweak your model,” he adds. Try surveys, polls, and focus groups to gain insight into attitudes about your business idea. Solicit feedback on the cheap by using online survey tools available through such services as Zommerang.com , Surveymonkey.com , and Constantcontact.com . The goal is to get to know your customers intimately. What turns them on? What causes them to tune out? Are they impulse buyers or do they like to deliberate over their buying decisions? There are a lot of products that people like but don’t buy, says Sapp. The price might not be right, for example. Simpson charges $3,000 to move a two-bedroom apartment in Atlanta. That might seem pricey for someone on a fixed-income. Although seniors are Smooth Mooove’s end-users, direct clients are their Baby Boomer children. “Use social media to hone in on certain groups that can become your focus group,” says Susan Friedmann, a nichepreneur coach , in Lake Placid, New York and author of Riches in Niches: How to Make it Big in a Small Market . “Check out chat rooms, communities on social networks like Ning or Facebook, industry groups within LinkedIn,” she says. “What are people discussing? Letters to the editor or articles in trade publications are resources for finding out about challenges in that particular industry. What are people writing about? What do people want to know about?” Knowing the answers to these types of questions may help you refine your idea. Dig Deeper: How to Use Online Tools for Customer Surveys How To Refine Your Business Idea: Size Up the Competition Study your competition by visiting stores or locations where their products are offered. “Analyze the site, customers, traffic patterns, hours of operation, prices, quality of goods and services,” suggests Sapp. What if you want to open a new restaurant? For starters, create a list of restaurants in the area. Look at the menus, pricing, and additional features (e.g., valet parking or late night bar). Then check out the diners those restaurants appeal to. Are they young college students, neighbourhood employees, or families? Become a customer of the competition. Go into stealth mode by visiting their website and putting yourself on their e-mail list. Talk to their customers to ask them what they like or don’t like about your competitor’s product or service. Also, review their company literature and marketing materials, says Mosquita. Read articles written on them. Your aim is to understand what your competition is doing so you can do it better. Maybe their service is poor. Maybe their product has some flaws. Find your selling point. “You want to unearth the opportunities in the market, a niche that is not being served at all or not being served adequately,” says Friedmann. Simpson’s strategic trade mark is that her competitors move things but her company moves people. Smooth Mooove has a staff of 15, three trucks and a luxury passenger van, moving anywhere from 30 to 50 clients a month. The business, which had gross revenues were just under $500,000 in 2009, covers Alabama, Arkansas, the Carolinas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Tennessee, and Virginia. Moreover, Simpson has received 1,500 inquiries from around the world about franchising her business idea. Dig Deeper: How to Keep Tabs on the Competition How To Refine Your Business Idea: Convene With Your Suppliers This includes manufacturers, wholesalers and retailers. “Talk to vendors who service your customers. They may be willing to share market research they have done on your industry,” says Sapp. Talking to suppliers can tell you a great deal about how your industry works, which product lines are selling off the shelves, and why some companies are more successful at marketing their products than others. Attend trade shows, conventions, and local business association meetings—anywhere people in your industry gather. “The most important aspects of what is going on in any particular industry is going to be found at a trade show,” says Friedmann. “It can be through the educational sessions or from the exhibiting vendors, which will give you good sense of what’s hot and what’s not.” Dig Deeper: How to Boost Traffic at Your Trade Show Booth How To Refine Your Business Idea: Do the Math Don’t overestimate your sales and under estimate your costs, says Mosquita. Research what your optimal sales should be. “Talk to other business owners and leaders in your industry, join a trade association, do whatever it takes to get an accurate estimate of your revenues that first year in business,” suggests Mosquita. Suppliers also may be able to tell you what price potential customers would be willing to pay for the products or services you want to sell. To test how your business idea will fare, you should prepare a “break-even analysis.” This is where you project income and expenses for a year to determine whether your business will make enough sales revenue to pay for its expenses. Dig Deeper: Business Forecasting in a Crazy, Mixed-up World How To Refine Your Business Idea: Talk to the Pros Seek out counselors and talk to industry veterans. Simpson went to SCORE, the SBA and the Women’s Economic Development Agency. She also joined the National Association of Senior Move Managers. The Internet, your local library, the U.S. Census Bureau, business schools, industry associations, can be invaluable sources of information and contacts. For instance, you might approach business schools in your area to see if one of their marketing classes will take on your business as a test project. You could potentially get some valuable market research results at no cost. Dig Deeper: How to Find a Business Mentor Business – Facebook – Social network – Small business – LinkedIn Continue reading →

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Simplicity and Freemium Models "Crush It"

Posted on August 19, 2011 by admin

“How is ‘not giving a crap about your customer’ giving you good Return on Investment?” shouts Gary Vaynerchuk , the over-the-top host of WineLibrary.tv . He’s talking about whether Social Media has good ROI, and the crowd is applauding for him. Gary has famously made Conan O’Brian eat dirt on TV to understand the soil notes in wine, and shared drinks on his show with Wayne Gretzky and Jim Cramer. Vaynerchuk “brings the thunder” to his thousands of online video fans every week. His famous energy was in full force at Internet Week New York’s stage yesterday for a discussion of new business models, and he was as outspoken as usual. Vaynerchuck had solid business trends advice for discussion with his audience. (The entire presentation is available as a video .) His 2008 book, Gary Vaynerchuk’s 101 Wines: Guaranteed to Inspire, Delight, and Bring Thunder to Your World is still number 17 on Amazon’s wine collecting list, and Crush It! Why NOW Is the Time to Cash In on Your Passion) was an Inc. recommendation for Best Books for Business Owners in 2009 . Gary’s not just an Internet guy. The author, speaker, and investor was raised in retail, and grew his family wine store from a $4 million dollar a year operation to $45 million a year in 5 years. When we spoke yesterday after his appearance, he emphasized the fact that his experience online and as an angel investor and social media advisor to companies is solidly based on his retail and business experience. Vaynerchuk’s advice to companies thinking about starting up today includes three key ideas. First he covered the “freemium” business model and the “App Store” small payment model. Freemium is when a customer can try a basic version of a product or service for free, but additional services, capacity or functionality (premium) require a subscription or payment. Customers get hooked, many stay for free, but the paying customers pay for the whole service. (Inc. writer Jason Fried’s 37 Signals products were one of Gary’s examples.) The app store model shows that customers are fine with paying a small price for some small functionality, as we see in the Apple and other mobile application stores. The things they love, they share with their friends. Call it the new “frugality.” People are buying new things more often at a lower cost, so Vaynerchuk advised businesses to think about how they can use these models. He suggested creating some things to sell at small prices, and premium up sells to generate regular income streams. “If I started my WineLibrary.Tv show today, I’d do 2 shows a week for free, and charge for the others.” His second piece of advice was to think about simplicity and limiting choice, like Groupon , GiltGroup and Woot.com . These businesses are known for offering different, limited products or deals every day until they run out. Gary decided to test this in his retail store. Where he once had an alcove near the front with 10 bargain wines, he now has only one wine on display. How has lack of choice affected this high traffic area of the store? “We’re crushing it – we’re selling these bottles at a staggering rate, one that trumps residual loss of not selling many products in that space.” This lead to the launch of CinderallaWine.com , which sells only one type of wine for a few hours, each day. It’s both a deal, and a limitation of choice. “People are overwhelmed these days, so limiting options is very successful. Simple decisions are exploding in value.” Finally, he’s excited about location-based mobile services like FourSquare and GoWalla . “Anyone in marketing who doesn’t understand that this lets consumers have the ability to be rewarded at the point of purchase or for going to a specific location is missing out.” You can use these services to reward people and move them to locations. “Expiring inventory like seats at a concert, food going bad, inventory in marketing that brands sponsor, how much is that number on a daily basis? The number is F***ing huge with enormous value and the best platform to move it is geolocation based mobile platforms.” When friends don’t understand why they’d use these “check-in services” he asks “Don’t you want a free beer for going to a restaurant?” Finally, I had a chance to ask Vaynerchuk the investor what he looks for in new business pitches. “The person, first and foremost, and how they explain the way the business will make money. 95% of people can’t answer that simple question. The idea is a close second.” What’s he looking at for investment these days? “Apps and freemium based businesses, of course, and also Tea. Tea is going to be big in this country. We’re eating more Asian style. Similar to wine culture, people collect tea, learn about it, sample it, compare it. There’s also a health factor – people are discovering how good tea is for them and that matches with the general health trend. I’m going to China and India to learn more about it.” Given his energy and drive, it’s likely Vaynerchuk will “crush it” with tea the way he has with wine. How do these business trends impact your business? Let us know in the comments below. Gary Vaynerchuk – Apple – Crush It!: Why NOW Is the Time to Cash In on Your Passion – Wayne Gretzky – Business Continue reading →

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New York Entrepreneurs See Silver Lining in the Pink Slip

Posted on August 18, 2011 by admin

There are two ways to approach being laid off: it can be an obstacle or an opportunity. The latter was the subject of last night’s Seeing the Silver Lining in the Pink Slip event at New York University. More than 50 attendees filed into the Stern School of Business to find out how the event’s five panelists managed to create their own companies after they were fired. The panel was organized and hosted by Jocelyn Chia, a self-proclaimed entrepreneur in the making, who was laid off from her position as an associate at Weil, Gotshal & Manges law firm last year. Instead of searching frantically for another job, Chia said she spent some quality time on her couch with pint upon pint of soy ice cream, before buckling down and brainstorming ideas for her own company. The purpose of the event, Chia said, was to help other people transition, like she has, from being “pink slippers” to entrepreneurs. Panelist Ann Fry , who became a life coach and author after leaving the corporate world, aptly summed up the unanimous feeling in the room last night, saying, “You’re ripping off the world if you’re not being who you’re meant to be.” According to the panelists, including Suparna Bhasin, who lost her job in 2001, the first thing any person who’s been laid off must do is get over those feelings of rejection and loss of identity. Bhasin is now founder and CEO of her third post pink-slip business, a women’s empowerment organization called She Creates Change , and she attributes her success to never looking back. “I remember walking around the city and people were like, ‘I’m so sorry you were laid off.’ I was like, ‘You know what? Congratulate me, because I’m off to my next adventure,’” she said. “It really empowered me.” Panelist Gail Davis stressed the importance of surrounding yourself with supportive people when you make the change. Davis lost her job at NBC and co-founded a consulting firm called The Goldwaters Group with a business partner based in London. “You have to make sure that whatever you start to do when you get laid off, you have the right people in your life,” she said. “When you first start your business, determine the type of qualities you want in a partner.” All of the panelists admitted that failure is inevitable, but the most you can do is try your best to plan in advance. Joseph Varghese, whose Peer Success Circles business helps entrepreneurs network with one another, said he asked himself a few crucial questions after he left his job as a chemical engineer: “How much money do you have in your account? How long can you go forward and survive? Do you have a budget for yourself and do you have an idea what you want to do?” No matter how many ideas people have, however, panelist Kristina Leonardi, founder of the non-profit organization The Women’s Mosaic , said that being an entrepreneur definitely isn’t for everybody. “It sounds great, but it’s a completely different approach to life,” she said. “If you’re working nine to five, and you don’t want to work nine to five anymore, maybe you just weren’t in the right job. People think you have all this time, because you’re making your own hours, but really, you’re working 24/7.” For those who, like Chia, are ready to take the plunge, though, Leonardi advised, “Do what you love. The money will follow.” Business – Entrepreneur – Coaching – New York University – London Continue reading →

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Start-Up Looks to Match Mac Lovers

Posted on August 14, 2011 by admin

For Mel Sampat, Apple’s 600,000 orders for its latest iPhone represent a huge business opportunity. Sampat is the founder of Cupidtino , a newly launched dating website for Apple fanboys and girls – and one that denies registration to anyone who doesn’t visit the site via Safari on an Apple device. This isn’t just to keep out the PC hoi polloi – it’s to keep the demographics pure for advertising. (Cupidtino, for the record, is a mashup of Cupid and Cupertino, the northern California city in which Apple is based.) The idea for the site came to Sampat, a former Microsoft employee, during an argument with his girlfriend about whether he should use his iPad during dinner. He told her that if they ever split up he’d date a fellow Apple aficionado. (His girlfriend had a Zune when they met; his first present to her was an iPod.) Then he thought about how to connect with Miss Mac. “The more I thought about it, the more I realized people that are true Apple fans might actually have a lot more in common than they realize,” Sampat told the Associated Press . And so Cupidtino – which describes itself as “a beautiful new dating site” – was born, linking people who share “personalities, creative professions, a similar sense of style and aesthetics, taste, and of course a love for technology,” plus an affection for Coldplay and Starbucks. (Yes, the site actually lists those last two.) Think perhaps Sampat has been staring lovingly at his iPad for a little too long? Apparently he’s not the only one. The site generated 12,000 sign-ups after its first two days of being live (and in beta) in May. On Wednesday, the site began charging $4.95 per month – or in the words of the site, which clearly knows its audience: “Our membership costs the same as a [Starbucks] venti Mocha but lasts longer than 20 oz.” The site doesn’t ask members compatibility questions about religion (presumably because the answer is Apple) or desire for kids. Instead it focuses on the size of your iTunes playlist or what’s in your Netflix queue. According to a not-exhaustive count from datingsitereviews.com, there are some 50 microniche dating websites (think veggiedate.com), but Sampat, for one, has no illusions about competing with giants like Match.com. “It will likely be more casual and our demographic might be a little younger as well,” he told the Wall Street Journal . The site has received “tens of thousands of dollars” in private funding, he said, plus an offer via e-mail from the San Francisco Apple store’s business development team to help with “any technology needs.” (The e-mail noted that the offer was not an official endorsement.) That bodes well for Sampat’s dream of Cupidtino events at Apple stores or product discounts. (To read how one online dating entrepreneur hit the big time, click here .) Will Cupidtino feel the love from customers? Let the arrow-watch begin. Apple – Microsoft – IPhone – IPad – Wall Street Journal Continue reading →

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How to Open a Business in Brooklyn

Posted on August 13, 2011 by admin

For Alexis Miesen , Atlantic Avenue had all the makings of the quintessential Brooklyn thoroughfare that combines the charm of a small town with the pace of city life. With its colorful boutique storefronts, diverse dining options, smattering of coffee shops, and antique stores, she expected to see happy families strolling along the street sharing ice cream cones. There was one problem: There was no ice cream anywhere around. “It’s filled with all these fantastic bars and restaurants and shops and it just has this really great kind of energy. They have all these great amenities to the community but no great ice cream shop,” she said. “This is a gap in what other people are offering.” Less than three years later, Miesen and her partner Jennie Dundas had opened not only an ice cream shop on Atlantic Avenue, but also had rapidly expanded the franchise to two other Brooklyn locations, feeding summertime crowds that often form lines winding out the door. Blue Marble’s organic, grass-fed dairy-based ice cream has been praised on The Martha Stewart Show, CNN, and in a bevy of New York City publications. Brooklyn has become as much a brand these days as a location. Slap the word “Brooklyn” on a piece of clothing and it’s instantly edgy, and quite likely to sell. New York City’s most populous borough remains a popular place to start a business, and Miesen and Dundas are emblematic of the grassroots, DIY entrepreneurs across the borough who’ve found a niche, and a loyal fan base that helps spread their brand along the way. (Check out Inc.com’s slideshow on Brooklyn’s Best Entrepreneurs .) The surge of creative energy, young artists and recent graduates is putting Brooklyn on the map not just for its booming music scene but also as competition with San Francisco to see who will lead the next Internet revolution. Business owners say starting a venture in Brooklyn requires creativity, a careful study of neighborhoods, and a good deal of Web 2.0 savvy. We talked with several successful companies about why the county of Kings is a bubbling cauldron of entrepreneurship, and how to get in on the action. Opening a Business in Brooklyn: Why Brooklyn? While Brooklyn was once considered a sparse hinterland outside the bustling hub of Manhattan, now it’s seen as the roomier, cheaper, less chaotic alternative, with a more stable population, and a reputation for creativity that draws artists, developers, and investors from across the world. “It’s a community actually that appreciates a lot of handmade goods, ethnic foods,” said Catalina Castano, director of the Brooklyn Small Business Development Center. “It’s not only ethnically diverse but it’s also culturally diverse. People have really open minds.” For those looking to tap into the excitement of New York City without getting tapped dry on cash, Brooklyn can be the savior. The average rent for prime commercial corridors in Brooklyn such as Court Street, Fifth Avenue in Park Slope, and Bedford Avenue in Williamsburg is between $35 and $100 per square foot, according to a 2010 retail report produced by CPEX Real Estate. Compare that to $125 to $2,000 per square foot in most of Manhattan’s commercial areas. “It is a bit closer to the real world,” said Taylor Mork, owner of Crop To Cup, a family-farm centric coffee importer based near downtown Brooklyn. ”It’s not as fast-paced. I think people are willing to wait a little longer on their investment in you.” With 2.7 million residents, the demand for goods and services is multitudinous and diverse. The first step, experts say, is figuring out where you need to put your business to best serve your clientele. Dig Deeper: The View From Brooklyn Opening a Business in Brooklyn: Location, Location, Location Brooklyn’s neighborhoods all have unique flavors and demographics, so Castano and others said the initial question any new business should ask is: Who are my customers? If you’re a family retailer like the boutique Area Kids, the answer is Park Slope, and the busy pedestrian and commercial thoroughfares of 7th and 5th Avenues. “What I look for with kids stores is people pushing strollers,” said owner Loretta Gendville, who runs seven stores and spas in Brooklyn and two in Manhattan. “I want a high density with parents, moms. I like people that are at home, people that are with their kids during the day.” That means opening a space alongside kids hair salons, yoga studios and tea shops on those Park Slope streets. Trying for a bar? The influx of artists, a vibrant music scene and a surge in condo construction make Williamsburg a hot spot for bar hopping. If large-scale production is your game, the old manufacturing warehouse buildings on the north Brooklyn waterfront are considered prime real estate. When Rob Ferraroni was looking for a new location for his Ferra Designs metal fabrication shop 12 years ago, relocating to the Brooklyn Navy Yard seemed like a bold move. Now, people are clamoring to get into the property, and the ground-level, 10,000-sqare foot space in a former World War II building trades shop is coveted. A lot of his work is for clients in Manhattan, which is a quick hop across the bridge. “You need to be able to execute these ambitious projects, so you need room,” Ferraroni said. People also doubted Doug Steiner when he started building Steiner Studios on in the Navy Yard in 1999. But Steiner saw the potential for major growth, and the opportunity to fill a hole in the movie and television production market in New York City. Now Steiner Studios is the largest studio complex outside of Hollywood with aims of growing to a 50-acre campus, and New York City has helped roll out the welcome mat for the film industry in Brooklyn. “Everyone under 30 in the business now lives in Brooklyn. Manhattan’s gotten homogenized and nullified,” he said. “The light and the air and the view and the waterfront make this a really special place to come to.” In the tech community, the neighborhood of DUMBO (whose acronym stands for Down Under the Manhattan Bridge Overpass) is the hot trending ‘hood. For instance, drop.io, a private file-sharing service, moved to the area in 2008 to grow its business alongside a rising district of art galleries, performance spaces and a newly expanded Brooklyn Bridge Park. Another perk: an incredible view of the Manhattan skyline. “If you did it in Manhattan or Midtown or something, you’d basically have to get an office the size of a conference room,” said Steve Greenwood, drop.io’s head of applications. Instead, the company got a cheaper, spacious headquarters with exposed brick ceilings and enough space to use for both work and after-hours social and networking events. “The culture of DUMBO is very complimentary to starting up business,” he said. “This is a very creative, imaginative place.” Dig Deeper: How to Pick a Site for Your Business Opening a Business in Brooklyn: Finding and Understanding Your Customers If there’s one thing people say is almost unanimous across Brooklyn it’s that borough residents tend to be fiercely loyal and supportive of their local businesses. But how can you earn that loyalty? Business owners said Brooklyn is ripe with ways to discover and cultivate a customer base, even before you decide on a permanent location. Mork spent months pitching his Crop to Cup coffee all over Manhattan only to be met with blank stares. In 2008, he decided to set up a $100-a-day booth at the first outing of the Brooklyn Flea, now a wildly popular market-style showcase of local artisans and antique dealers held in the Fort Greene neighborhood. There, his company’s credo of farmer-centric coffee found an eager audience. Within a few years, his coffee was on the shelves at several nearby businesses, and he recently opened a Crop To Cup caf Continue reading →

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The Start-Up Economy

Posted on August 5, 2011 by admin

Early this year, an op-ed column by Thomas L. Friedman in The New York Times caught our eye. Titled “More (Steve) Jobs, Jobs, Jobs, Jobs,” it was a call to action. Barack Obama, Friedman wrote, “should make the centerpiece of his presidency mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge.” We couldn’t agree more. For 30 years, Inc. has been covering how entrepreneurs form companies, how they operate them, and what separates the most successful of them from the rest. In every issue, we publish stories that speak to the interests of our readers, the founders and principals of entrepreneurial companies. Friedman’s column struck us as an opportunity to step out of our usual way of doing things and report on the importance of entrepreneurship from a larger economic perspective. Companies create jobs; more companies create more jobs; and recently formed, fast-growing companies create the most jobs. Here’s a little exercise we did as we produced this issue: We added up all the jobs created by the 99 companies mentioned in it. We counted about 22,000. More new companies is exactly what this country needs. President Obama is a busy man, so we thought we would tap the intelligence and expertise of the Inc. staff; put two really good reporters on the case; talk to some very smart people; and, taking up Friedman’s challenge, come up with a blueprint for creating a more entrepreneurial America. Over the course of several months, we discovered successful programs that should be adopted nationally; legislation that could help spur innovation; and incentives that would launch more young people, women, disadvantaged people, and people from other countries into the ranks of company owners. Some of these initiatives are government-dependent, others come from the nonprofit world, still others have boiled up from private enterprise. All would help our nation prosper economically. There’s yet another aspect of entrepreneurship that we could use more of these days, and that’s the optimism, excitement, energy, and sense of adventure that come with the territory. Month after month, we editors and writers and producers of Inc. are inspired by the passion and purpose behind entrepreneurial enterprises. A million new companies would help move our national mood toward something closer to positive. What’s not to like? janeb@inc.com Barack Obama – New York Times – United States – Thomas Friedman – President of the United States Continue reading →

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Revitalizing the American Dream

Posted on August 3, 2011 by admin

We need more start-ups. A lot more of them. New companies mean new ideas, new approaches, new products and services, and new jobs. What’s more, in the wake of the Wall Street meltdown and the catastrophic oil spill in the Gulf of Mexico, a wave of start-ups could spark a new sense of optimism about what businesses can actually accomplish — something else this country sorely needs. We are not just talking about the fast-growing “gazelle” companies that expand at double-digit rates — though we could certainly use more of them. Nor is this solely about sparking, say, a green business boom or the creation of more tech companies or a bunch of cool new iPhone apps — though we like all of those, too. Instead, what we are seeking is a kind of rebooting of the entrepreneurial ideal — the notion that starting a company is a viable option for all Americans, regardless of where they come from. This country has long been a haven for entrepreneurs. Ten years into the 21st century, it’s time to rethink exactly what that means. Given our anemic and largely jobless economic recovery, this is more important than ever. Young companies — those younger than six years old — provide the bulk of new jobs; in 2007, they accounted for 64 percent of them, according to a 2009 survey by the Kauffman Foundation that looked at start-up formation since the 1970s. John Haltiwanger, an economist at the University of Maryland, came to a similar conclusion in a more recent study: His research found that start-ups account for only 3 percent of total U.S. employment but almost 20 percent of gross job creation. Unfortunately, creating new companies is easier said than done. The rate of business creation has remained stubbornly constant over the years. Since the early 1990s, the number of start-ups has hovered at about 500,000 a year, according to a survey by the Kauffman Foundation. This has been the case during booms and busts, whether taxes were rising or falling, and whether venture capitalists were irrationally exuberant or largely recalcitrant. Clearly, some new thinking is required. That’s what Inc. aims to provide in the pages that follow. We spent months talking to economists, entrepreneurs, academics, politicians, and policymakers about what can be done to spark a renaissance of American entrepreneurship. What we ended up with was a game plan to help revitalize the American economy. This is not just a matter for elected officials. Sure, issues such as immigration and tax policy need to be addressed. But we also need action by schools, corporations, nonprofits, investors, and entrepreneurs themselves. The good news is that you don’t have to look too hard to find approaches that work. Indeed, we discovered an entire infrastructure of programs, policies, and ideas designed to stimulate business formation. These programs need to be studied, emulated, fine-tuned, and scaled. And their leaders need to be acknowledged and brought into the national conversation about the economy. Step 1: Take Entrepreneurship Out of the Business Schools Arts and humanities and science students need entrepreneurship education every bit as much as b-schoolers. Universities as diverse as MIT and the University of Miami have created model programs for training students in the fundamentals of business formation. More programs like these should be created. Read more Step 2: Tap the Best and the Brightest Wherever They May Be Entrepreneurs from all over the world want to start companies in the United States. Our immigration policy should reflect that, by offering short-term visas to would-be entrepreneurs who are in the country on H-1B or student visas. If those visa holders create companies that create jobs, then we should offer them green cards. Read more Step 3: Our Education System Should Foster Entrepreneurship Among the Young Putting ideas into action may be the biggest challenge for entrepreneurs. Teaching youngster–especially middle-school students–how to start businesses is one of the best investments we can make. Programs such as the National Foundation for Teaching Entrepreneurship offer a good model; educators should also take small steps such as adding the biographies of great entrepreneurs to the standard curriculum. Read more Step 4: Speed the Start-up Process Most start-ups don’t need much money to get started. But that doesn’t mean they don’t need help. That’s where incubators and seed accelerators such as Y Combinator in San Francisco and TechStars in Boulder, Colorado, come into play. Investors, entrepreneurs, and city officials across the country should jump on the bandwagon. Read more Step 5: Give Manufacturers the Tools They Need to Get Started Plenty of Americans have the desire to make actual stuff, not just software. What they often lack are the tools to get their ideas off the ground. Shared manufacturing spaces such as TechShop in Menlo Park, California, can provide aspiring manufacturers with access to sophisticated prototyping equipment. We need more of these facilities. Read more Step 6: Cut College Graduates Some Slack The rising level of student-loan debt among recent college graduates may well inhibit them from starting businesses, driving grads into stable corporate jobs that will allow them to pay down their loans. The government should find a way to let college graduates who start businesses postpone loan payments for a few years while they get their ventures off the ground. Read more Step 7: Give Angel Investors a Tax Break A number of states including Wisconsin, Minnesota, and Ohio, offer angel investors a tax credit for backing early-stage ventures. More states should follow their lead, and so should the federal government. As Stephen Spinelli, co-founder of Jiiffy Lube, observes: “If I get an immediate tax credit, I get an immediate return. I know I would increase my investing if there was a tax credit.” Read more Step 8: Reward Innovation Through Business-Plan Competitions A revved-up contest economy will harness the competitive spirit to launch a wave of businesses. Programs such as New York City’s NYCApps and the nonprofit X prize should be expanded and encouraged. Read more Step 9: Cut the Incorporation Red Tape In New Zealand, an entrepreneur can register a business with one filing and be legal and legit in one day; in the U.S., it takes about six steps and six days. We need to make it easier for founders to register their start-ups. Hawaii’s approach, which involves an online step-by-step guide to registering a new business, should be adopted across the country. Read more Step 10: Pass an Energy Bill, Already Markets–and investors and entrepreneurs–abhor uncertainty. So let’s get serious about the emerging energy economy by creating an actual energy policy. Only then will companies be able to make informed investment decisions. Read more Step 11: Revamp the SBIR The Small Business Innovaton Research Program is a good idea that unfortunately supports a small number of companies that seem to excel only at getting SBIR grant money. The government should revamp the agency’s mission so that it provides seed capital and contracting opportunities to younger companies, and not just small companies. While we’re at it, let’s rename it the New Business Innovation Research Program. Read more Step 12: Grow Local Investment Communities at the State Level It’s foolish to try to duplicate Silicon Valley, but smart governments can do a lot to lure investors to their states. Since 1993, for example, New Mexico has committed funds to venture-capital firms with the requirement that they open an office in New Mexico and pledge that investments equaling the amount provided by the state were made in state. The results have been encouraging, and suggest that other states should nurture local VCs. Read more Step 13: Bring Government into the 21st Century Government entities have more resources–generally in the form of data–than officials realize. They need to follow San Francisco mayor Gavin Newsom’s lead and hand that raw material over to entrepreneurs. Read more Step 14: Fund Big Science As a percentage of gross domestic product, funding for scientific research has dropped from 2003 levels. What’s more, the federal contribution to R&D is now below 1 percent of GDP, a commonly accepted minimum goal for economically developed countries. Meanwhile, our global economic competitors are seizing the opportunity. We should reverse course, and fast. Read more Step 15: Stop Enforcing Noncompetes Midcareer executives are a rich source of entrepreneurial talent. But studies indicate that in states and in industries where noncompete agreements are commonly enforced, workers are forced to make career detours, finding their next positions outside the industry in which they had expertise. Noncompetes make it hard for people to start companies, and hard for start-ups to attract seasoned talent. Let’s follow California’s lead and stop enforcing noncompetes nationwide. Read more Step 16: Bank the Unbankable With Microfinancing Over the past few years, many mainstream banks have beefed up loan requirements or significantly cut back on small-business lending. Nonprofit microfinance lenders have come to play an ever more important role in bridging the funding gap. Cities and states should embrace these kinds of programs. Businesses that seem unbankable are often anything but–if you know what to look for. Read more It’s difficult, if not impossible, to say how many new companies Inc.’s 16-point plan would help create. We went over our proposals and performed some back-of-the-envelope calculations and estimate that implementing these ideas would spur the formation of at least 300,000 additional start-ups over the next decade or so. The number, we admit, is speculative. But blue-sky thinking is fine with us. The point is that the old models are no longer working. We need bold thinking about how a new wave of entrepreneurship can transform the American economy, spark innovation, and provide new jobs, new vibrancy, and new opportunities. That’s where you come in. What do you think of our plan? Is there anything missing? What do you think needs to happen to make this country more start-up friendly? We want to hear from you. Please post a comment below. United States – Business – Venture capital – Entrepreneur – Education Continue reading →

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Connecting Your E-mail and Social Marketing

Posted on August 2, 2011 by admin

Your business has accumulated an e-mail list, but you have no idea how to connect those e-mail subscribers to your Facebook page, your Twitter followers and other social networks. You’re looking for a relationship with those customers, maybe something more than responses to your marketing e-mails. Enter Flowtown.com . Co-Founder Ethan Bloch started his first business at 13, using IRC (Internet Relay Chat – the grandfather of Twitter and Instant Messaging) to directly market the products from his electronics ecommerce site. Ethan offered Playstation and Dreamcast accessories during the summer of 1999, and was successful competing on price for 6 months. Then suddenly, he lost all his customers because someone had created a similar website with better prices. Bloch learned at that moment about the value of creating customer relationships. Fast-forward 10 years, and Bloch, formerly the host of the Internet video show WSYK (What Should You Know) and his cofounder Dan Martel, a Canadian long-time entrepreneur, launched the company. Flowtown is simple tool that allows you to run a list of e-mails and obtain the connected accounts on Facebook , Twitter , StumbleUpon , LinkedIn and more than 40 other networks. You can then communicate with the people from your list on those networks as well. Additionally, you can learn your list’s demographics, geographic characteristics, and the subscribers’ influence ranking. “We reached out to these influencers directly via Facebook,” said Meaghan Edelstein, Social Media Director of Smashyn.com . “We said ‘We see you’re a customer who has purchased before and we’d love to hear what you think, and we’d encourage you to like and link to our customer’s page on your own page.’ Everyone that we reached out to did this – quickly.” Another feature Flowtown enables is parsing your incoming e-mail subscribers, to see if they meet certain criteria, and flagging them. (Flowtown can be integrated with e-mail services iContact , MailChimp and Campaign Monitor as well as form creator Wufoo .). So if a person with a million Twitter followers joins your list, you will find out about it when it happens. “We push these demographic stories into these mail tools – so they can help you create segmented lists based on gender, age, location and social network.” How would you start such a communication without making your customers feel like you were spamming them on Social Networks? Edelstein told me that her firm used Flowtown for their client Natural Skin Shop . “With our first outreach, the client increased the “Likes” on their Facebook Page by over 50%. Further, we sent out a campaign to all the customers who were on Facebook asking them to post on the Fan Page wall why they love Natural Skin Shop. In less than 24 hours around 200 posts from customers showed up on the wall. Twitter followers increased as well but not by as much. However, the number of people who purchase products from natural Skin Shop via Twitter has increased significantly.” What kind of return on investment did they achieve? Flowtown can cost a few dollars a month plus about 4.5 cents to import each user. Bloch says “If you can get one influential person to blog about you, it should generate more marketing attention than the $450 you would spend on Flowtown for importing 10,000 users.” Bloch emphasizes that “Connecting with customers on Social Networks shouldn’t replace your e-mail marketing efforts – rather it should compliment them. If you’re a bakery in the MidWest, you might send e-mail news once a month. What Flowtown will do is help you understand what you should be saying, and to whom, since now you know a lot more about your subscribers.” Additionally, if you analyze your list and see you have a lot of Facebook users but few are on Twitter, you know where to concentrate your social outreach efforts. The way small businesses connect to customers is changing, and Flowtown seems like a useful tool in a marketer’s up-to-date arsenal. What are you using to find and connect with customers? Share your tips below. Flowtown – Social network – Facebook – Business – MailChimp Continue reading →

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Sarah Prevette, Founder of Sprouter

Posted on August 2, 2011 by admin

Feeling isolated in your start-up venture? Have questions but have no one to turn to for answers? Sarah Prevette knows the feeling. When she started upinion.com, a pop culture website for teens and tweens back in 2007, Prevette could only get feedback from colleagues, friends, and family. “While they were entirely supportive, they didn’t identify with the same issues,” she says. To get the answers she needed, she picked up the phone and started cold calling people who had started similar ventures. Her success was limited. “I would hit these entrepreneurs with 10 questions about how’d you do this, how’d you get the visibility and things,” Prevette says. “And then I’d be sort of shocked and bothered when they wouldn’t call me back.” In response, she started an online community of entrepreneurs to help her, and it was that group that led to her new venture, Sprouter, which launched online last November. Using a Twitter-like format, Sprouter is a place online where entrepreneurs can socialize, share tips, and ask questions in a rapid-fire, short-attention-span fashion. Users leverage the site for a variety of needs, from getting peer feedback on their product ideas to learning the best practices for developing metrics for sales teams, to gleaning insight from other founders on pitching specific investors, and requesting introductions to media, potential corporate partners or investors. “Users support one another, motivate each other and help with day-to-day questions or concerns,” Prevette says. Fifteen thousands users had registered on the site as of February, the last time the company disclosed numbers, and two angel investors in Canada have invested in the business. Prevette plans to make money by selling ad space in its e-newsletter, Sprouter Weekly, and by making introductions between investors and start-ups. (The site will always be free for entrepreneurs, Prevette promises.) Since Sprouter’s goal is to the tap the expertise of entrepreneurs, it makes sense that the site solicits ongoing feedback from members via a “Get Satisfaction” widget on every page. Users can request features, inquire about functionality or simply leave general comments. And Prevette also emails member to get suggestions for the site. “Their ongoing feedback allows us to evolve our product in direct alignment with their needs and their referrals help us grow our membership.” For instance, the site will soon roll out a new feature where a network of seasoned Sprouter veterans will be available to answer questions from users. The experts will receive questions via text message on their cell phones and can then respond. Reflecting back on those cold-calling days when mentors weren’t just a text message away, Prevette recalls a time she finally got an entrepreneur on the phone with whom she had been dying to connect: “He told me that the only advice I’d get from someone is if they were invested in my business and that was the only way I was going to get what I needed.” She adds, “Hopefully he’s checking out Sprouter today and realizing that’s not the case.” Sarah Prevette – Get Satisfaction – Twitter – Sprouter – Business Continue reading →

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