As we pass Labor Day, it is a good day to look at the changing labor force in the US, and how that affects startups. In April, I wrote about “Virtual Workers as a Start-Up Resource” and the trends we saw then have accelerated. Independent workers make up 30% of the nation’s workforce, according to the Freelancers Union.

I spoke with Gary Swart, CEO of ODesk (#286 on the INC 500), a marketplace for online workers and companies that hire them. With over 715,000 contractors and 215,000 employers, ODesk shows an increase (up until the past quarter) (correction) of Small and Medium-sized Businesses (SMBs) utilizing contractors via their online marketplace. They report that contractor earnings were up 82% from this time last year. The average overall rates that ODesk contractors make is pretty low compared to US minimum wage – but that reflects the global nature of their business, said Swart. “Jobs like software development have a much higher average cost-per-hour, and you can see US rates in the stats [above].”

“Demand for tech skills is very active and always has been,” said Swart. “Early adopters are there, and things can be done internationally. New products like mobile development, Photoshop (with special interest around latest release), iPhone, iPad and Android development [are popular]. We’re also seeing a spike for project management – up 70% for this skill set. If I’m hiring a team of remote workers, I’d like to be in control, but have someone to manage the project. Lots of start-ups are hiring teams of developers all managed by a single resource.”

Swart also told me that Search Engine Optimization, Search Engine Marketing and Social Media Optimization are all marketing functions that small companies are outsourcing via ODesk. Additionally, many are now trying “home-shoring” instead of off-shoring. They are using talent here in the US to get jobs done. “Our growth in the US has been spectacular. We hit a low for wages in January 2009 but the average has risen about 20% since then.”

As noted in the previous article, trust is often difficult when you’re outsourcing a job, but ODesk provides feedback and reputation scores. It also lets you pay workers as complete contractors using a W9, or as employees with benefits using a W2 system. Your company pays ODesk and they handle the taxes and payments without you having to manage that. ODesk takes a percentage of the paid hourly rate, and to contractor it offers guaranteed payments. Via their team room platform, employers can see what contractors are working on at any time, via screen shots. There is significant growth in this outsourcing market – ODesk reports an increase of 2% per week in hours contractors are billing, and the company’s growth is up 500%.

At press time I received some stats from ODesk competitor ELance that confirm this growth – they note “62% of service providers stated that their income has increased in the past 12 months and 58% feel that they will find more online work in the coming 12 months.”

Has your startup used outsourced labor via ODesk or a similar site to save money or find skills you couldn’t find locally? Let us know how it went in the comments below.

http://www.inc.com/inc5000/profile/odesk

Business – oDesk – Employment – iPhone – Search Engine Optimization

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Leverage Virtual Workers for your Start-Up | Start-up

Having launched two tech companies and a consulting business in Cary, North Carolina, Glen Lang decided to take on a different kind of challenge: politics. After Lang was elected mayor of Cary, he got to work easing the city’s growing pains and tackling its infrastructure problems. But he never stopped thinking like an entrepreneur. Lang’s political career, which ended in 2003, inspired him to start Connexion Technologies, which installs private fiber-optic networks that deliver Internet, phone, and television services to housing developments and apartment complexes nationwide.

I’ve been in the tech industry since college. I worked for Sun Microsystems before starting a software development company in 1992. It had about 78 employees when I sold it for $11 million. I started two more companies: a cable modem business and a consulting firm.

When I turned 40, my wife thought it would be best if I quit starting companies and stayed home with the family. So I cut back and just did consulting.

I was home and partially retired when city workers came by to dig up our neighborhood to replace the sewer line. That was a waste of funds; only part of the line needed repair. I led my neighbors in opposing the project at city hall. That’s what got me thinking about public office.

In 1997, I was elected to town council. I became mayor of Cary in 1999. I ran on a platform of slow growth. Cary’s population, which is now close to 137,000, had been growing about 9 percent a year, but infrastructure wasn’t keeping up. As mayor, I got the city to slow approval of new home permits while we built new roads, schools, and water plants.

I also commissioned a study to see what it would cost to wire the city for broadband Internet. I used the findings to nudge Time Warner and Bell South to speed up their deployment of high-speed Internet access in Cary.

I kept thinking about this problem of how to get Internet service without having to rely on big companies. There seemed to be an opportunity for a private company.

I founded my current company in 2002, when I was still mayor. We build private fiber-optic networks and lease them to telephone and cable companies. I pitched my business plan to Jim Goodnight, the founder of SAS, which is based in Cary. He liked my idea. He said I worked hard as mayor and that anyone with my persistence would be successful. He invested a couple million dollars.

Being mayor taught me about the utilities business. With a new development, the city grants rights of way, which allow cable and telephone companies to lay new lines. We go directly to the landowner and get an easement, which lets us install our fiber networks on the property first.

We’re outfitting apartment complexes across the country. In many areas, there didn’t used to be a choice of service providers. Now, consumers get more choices and lower costs, and providers don’t have to invest $1,000 to $2,000 per unit in infrastructure to service that community.

I definitely enjoy private enterprise more than I did public service. But no matter what you do, as long as you keep learning, you evolve as an entrepreneur.

Business – Glen Lang – Cary North Carolina – Time Warner – Sun Microsystems

Read more here:
What Politics Taught Me About Business | Inc. 5000 Companies

Dear Norm,
In October, I parted ways with my former employer. I have decided to start my own business creating mobile websites and apps for businesses. The trouble is, I have no idea how to set pricing. My overhead is $7,044 a month, and it takes me about two weeks to develop each website or app. I have one client, a friend of the family, whom I charged $500 for a huge website, which I know was too little, but I’m worried about losing customers by setting my rates too high. Then again, I need to eat! What do you advise?

Kate McGinley, founder, McGinley Media
Pittsburgh

Everything has a price, as the saying goes, but a lot of people struggle with figuring out what the right price is. I get more inquiries about pricing than about any other subject. The classic mistake is the one Kate was about to make: setting a price based on what she feels she needs to earn rather than on how the market values her service. Competition generally determines the price you can charge. So the first step should always be to find out what competitors are charging. There are many ways to do that. You can call up other providers and — posing as a customer — get estimates. Local, state, or national trade associations may also provide the information you’re looking for. If all else fails, you can follow my father’s advice, which he gave me in the form of a humorous story:

A brand-new optician opens up a store and isn’t sure what to charge. On the first day, he gets his first customer, who looks at some glasses and asks how much they cost. “Uh, $20,” the optician says. “$20?” the customer responds. “That’s all?” “Well, that’s just the frames,” the optician says. “The lenses are extra.” “How much?” the customer asks. “Uh, $15,” the optician says. “Only $15?” says the customer. “Per lens,” says the optician. “Oh,” says the customer. “So that’s $50 altogether.” “Well, the case is $5 extra,” says the optician. “Hmm, $55,” says the customer. “That’s a little high, but I’ll take it.”

I’ve used this method, and it works. But whatever approach you take, the rule is the same: You don’t set the price; the market does. Your job is to determine what the market will pay. Then you can decide whether it’s enough to cover your costs and fund your lifestyle. If you do it the other way — starting with your own financial needs — you’re likely to wind up charging too much or too little. And charging too little is even more dangerous than charging too much. If you set your prices too high, you can always just reduce them. But if you undercharge, you develop the wrong kind of reputation. I told Kate, “You don’t want people saying, ‘Let’s use Kate McGinley. She’s cheap.’ It’s a lot better if they say, ‘Yes, she’s a little expensive, but her quality is worth paying for.’ “

Please send all questions to AskNorm@inc.com. Norm Brodsky is a veteran entrepreneur. His co-author is editor-at-large Bo Burlingham. Their book, The Knack, is now available in paperback under the title Street Smarts: An All-Purpose Tool Kit for Entrepreneurs.

Next Question

Business – Optician – Customer – Entrepreneur – Pricing

Original post:
Solving the Pricing Riddle | Start-up

Yelp allows the multitudes to fancy themselves restaurant critics, Twitter gives them an outlet to celebrate the perfect pizza or slam the worst Key lime pie ever, and Foursquare lets friends track one another’s every move. Now, along comes a flurry of start-ups that use social media tools to help foodies follow one another’s eating odysseys on the Web, where 600,000 or so food-blog listings are already found on Google. No one has yet figured out how to turn these businesses into moneymakers. For those who do, the payoff could be sweet.

Foodspotting
When Foodspotting launched early in 2010, it was dubbed “the Foursquare for food.” Foodies use a free iPhone app to photograph restaurant dishes, and, as with Foursquare, they earn points and badges for contributing tips that prove popular with other Foodspotting users. Photographs are searchable by restaurant, type of dish, and location. Founders Ted Grubb, Alexa Andrzejewski, and Soraya Darabi hope to make money by selling advertising within search results. Another income source could be guides sponsored by media companies that would offer prizes for, say, sampling the most items posted on Foodspotting. The San Francisco Chronicle has launched a beta guide on the site.
USERS: 140,000

Fiddme
A Twitter posting by Yosi Taguri, one of four Fiddme co-founders, on the “best mille-feuille pastry ever,” which he tasted while in Paris, led to an enthusiastic string of responses and, soon thereafter, the creation of the Fiddme site. The Israel-based start-up focuses on building foodie communities. Whenever users update their Fiddme accounts, their Twitter, Facebook, and Foursquare accounts are also updated. Friends can follow one another’s restaurant outings and browse photos and descriptions of meals their friends have posted. Fiddme also encourages cooks to post recipes and photos of their personal creations for comments.
USERS: 30,000

Eat.ly
Four friends in New York City and London figured that if they could remember what they ate, they would eat more healthfully. So, in November 2009, Sam Huleatt, Mike Singleton, Eric Friedman, and Sam Brown teamed up to created Eat.ly, a website on which users can post photos of their meals and track their eating habits by assigning the photos health rankings. Profiles can be made public, integrated with Twitter and Foursquare, or remain private for a defined group of friends or to share only with, say, a trainer or nutritionist. The founders plan to earn income by selling their software platform to people who want to create similar sites on different topics.
USERS: 3,000

Chevia
Its Foodstream app tracks local food news. Users get a news feed of local posts that might include restaurant specials or new dishes. Founder Paul Lo, a former Yahoo software developer and executive, hopes to make money from advertisers, which will be able to place their spots based on user preferences. Advertisers can target their messages to audiences based on geographic area or what sorts of foods or restaurants they indicate they enjoy. Lo also envisions businesses paying to sponsor contests that award prizes for, say, the most tacos eaten outside the U.S. or the most pizzas consumed in Chicago. The site launched recently; a beta version was well received.
USERS: 1,000 (beta version)

THE LINE: Foodspotting has amassed the largest user base, but its success depends heavily upon advertisers’ willingness to pay for preferential positioning on the site. Chevia is in a similar situation. Eat.ly has the advantage of serving two vast markets — foodies and weight watchers. But Foodspotting’s interactive guides and Chevia’s business-sponsored awards may be the fastest ways to bring in revenue.

Foodspotting – Alexa Andrzejewski – New York City – Google – San Francisco Chronicle

Excerpt from: 
Social Media for Foodies | %source%

Most of the jobs start-ups create remain as the fledgling companies age, creating a lasting effect on the economy, says a new study.

The Ewing Marion Kauffman Foundation study – titled “After Inception: How Enduring is Job Creation by Start-ups?” – found that although only a fifth of start-ups make it to their 25th birthday, employment figures stayed at 68 percent of the initial number. It suggests the number of start-ups that flourish and create jobs balances the jobs lost by companies that close.

The study is based on Business Dynamics Statistics, which is compiled by the U.S. Census Bureau and tracks the number of new businesses from 1977 to 2005. The organization defines start-ups as businesses that are less than one year old.

Although start-ups’ employment after five years is 80 percent of what it was when the companies began, many of those jobs remain long term. The study found that in the year 2000, start-ups created almost 3.1 million jobs. Only half of those firms survived to 2005, but the surviving firms maintained 78 percent, or more than 2.4 million, of the jobs that existed in 2000.

The study also analyzed entrepreneurship and employment during recessions. Companies starting up during recessions at first hired fewer employees than those started up at other times, but generally increased their hiring post-recession to catch up. But companies born during extended recessions – those lasting three years or more – created about 10 percent fewer jobs than companies that avoided a recession in their first five years. That’s about .2 percent of all jobs in the economy. (To hear the Kauffman Foundation’s take on why great companies tend to start during a recession, read this article.)

“While a recession has a negative effect on a company’s employment in its first few years, a recession does not impose lasting consequences on startups,” said Robert Litan, the study co-author, an Inc. contributing editor, and the foundation’s vice president of research and policy, in a statement.

Business – Ewing Marion Kauffman Foundation – Employment – United States – Small Business

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Study: Start-ups Create Lasting Job Growth | %source%

When Annmarie Scotto-Dinan quit her Manhattan public relations job to launch a women’s fashion label, she knew she’d need to invest a significant amount of time in learning the trade, but she didn’t know she’d also be investing a massive chunk of her savings. Dinan figured a small business loan would be key to financing her endeavor, but by the time she applied for loans in 2008, the economy was beginning its slide into recession.

Despite being unable to secure a small business loan, she went ahead with founding her label, Chloe & Reese, digging into her significant savings to do so. Her bootstrapping worked: Chloe & Reese has grown steadily through the recession, and Scotto-Dinan is coming out of the economic downturn with her dresses sold in global department stores like Saks Fifth Avenue and Neiman Marcus, as well as small boutiques all over the world.

How’d she do it?

“It’s not just making a design that’s great – it’s figuring out wholesale margins, adding in the cost of packaging, shipping, taxes, tariffs, and making sure your profit margin will keep your business running,” Scotto-Dinan said. “Like many designers, I’m so much more creative than analytical. But you have to focus on the numbers to make your business actually work.”

In other words, breaking into fashion requires a lot more than just a degree in design and a talent dreaming up runway styles. We’ve interviewed emerging designers who have built their businesses from scratch, as well as legal experts who filled in the finer points of financial and legal sustainability to guide you through the fashion start-up process.

Breaking Into Fashion: Pin Down Your Dreams

Whether you create handcrafted vegan footwear or custom ball-gowns, before you take your product to market, experts suggest you ask yourself why, precisely, you want to do so. What’s your goal?

George Nemphos, the chair of the corporate practice group at Duane Morris, a law firm in New York City that works with a lot of emerging and established fashion designers, says he asks all of his clients what their goals are for the business they’re setting up.

“People in the apparel industry are very creative, and some of the legal aspects can escape them,” Nemphos said. “It’s part of the business that goes unseen. It’s not what they’re thinking about when designing, or are out there with the buyers.”

Nemphos suggests before even enlisting an accountant or attorney to help set up the business, that an emerging designer solidifies plans for what kind of company they want to have, and what kind of life they’d like in coming years. How big they want to be, and where they’d like to sell their designs, will determine a lot of how a company should be set up – and help guide legal issues going forward.

Scotto-Dinan agrees that entrepreneurs in fashion and design should ask themselves: “Do you want something nice and easy, something that brings you joy and a bit of income without much stress? Or do you want to be a fashion empire? I really do think that goal speaks to how you’re going to work.”

For designer Jiminie Hayward, starting her business small – and keeping it small – is right in line with her goals. She graduated from Boston’s School of Fashion Design in 2007 and began scoping out a target audience for her custom-made formal dresses. Her dream: to sew and sell custom-fitted hand-made dresses at an affordable price. Mass-producing was not an option.

So, Hayward designed 10 dresses and launched her brand softly, selling it online through an Etsy shop, MyBlackDress. She says she started with about $500 in fabric and supplies, and now orders from individuals account for $2,000 to $4,000 of income monthly.

“I get lots of requests for wholesale from boutiques and online stores. I will look into that in the future, but I can’t handle it right now. I really like doing custom work for now,” she said. The number of orders coming in online keeps her at the sewing machine from 8:30 a.m. until evening.

For Sonali Singh, who met her business partner and husband, Jeet, while they were students at New York’s Fashion Institute of Technology, the greatest bulk of preparation in starting their label, San & Soni, went into market research.

“We had to do a lot of market research, as far as price points, what brands we wanted to sit in with,” she said. The pair’s label doesn’t offer basics, such as a simple white blouse. Instead, it’s centered on inventive construction. “We spent a lot of time on theme and inspiration, and that’s how we came into the contemporary market – and we’re in the higher end of contemporary.”

Dig Deeper: Fashion Entrepreneurs Capitalize on High-End Rentals

Breaking Into Fashion: Get the Financials Straight

Considering that manufacturing, importing, distribution, and sales are in your future, unless you’re particularly numbers-savvy, you’ll mostly likely want to enlist an accountant and a legal counsel to help advise on business incorporation and how to set up your financial accountability.

Nemphos suggests that too many independent clothing and accessory designers don’t work with advisors, and instead end up simply setting themselves up as a sole proprietor of their company without exploring other incorporation options.

“As a sole proprietor, you are on the hook for everything – so we advise them to not do that necessarily. Setting oneself up as an S-Corporation could also affect them if they are possibly going to seek financing in the future,” he said.

Creating an LLC might seem more complex from the start and for tax purposes, but doing so can give business owners organizational flexibility – and doing so ensures there is a corporate entity comfortably wedged between your business and your personal liabilities. It also allows some flexibility in terms of changing your form of business incorporation later without harsh tax penalties.

Scotto-Dinan said her top advice to a bootstrapping fashion entrepreneur would be to invest in a good accountant and a good attorney. “Definitely speaking to a good accountant about your goals so that you can set your business up, and to be careful about how you set it up, because while at the moment it might not feel like a crucial decision, it absolutely is a wise investment.”

If you decide to keep accounting in your own hands and file for incorporation yourself, which Hayward successfully did, you might want to consider educating yourself first. And, no, Googling isn’t sufficient.

“It’s really important to take some tax classes,” she said. “That’s the least fun part about running your business, doing your taxes. But the city often offers bookkeeping classes, and they can teach you how to create monthly income statements. Absolutely do those, then it makes it a lot easier at the end of the year.”

From the start, you’ll also want to protect your label from trademark infringement. “If you have a service mark or trade name, you’re going to want to file with the patent and trademark logo. Once you have done that, you can use that on a label, for events, and on your website,” Nemphos said. He also warns that brands should be proactive about promoting their brand online, because simply getting your name out, and attaching it to products, protects your use of it. He suggests registering URLs with your brand name right away, and using the brand name prominently on products and labels. Doing so doesn’t hurt marketing, either. “Brand development comes from just being out there and known, and that you take the steps to show off your product and your concept.”

Once you have a legal counsel and accountant in place, remember that they likely have a great deal of expertise in the industry – and can serve as valuable advisors to your business. Don’t be afraid to ask questions – doing so can open your eyes to everything from money-saving options to marketing trends.

Dig Deeper: How to Incorporate

Breaking Into Fashion: Build Your Production Model

Today, in the era of super-simplified online sales via eBay, Etsy, and a host of other online storefront options, it’s easy to start small. You can learn how to set up an Etsy store. Inc.com also has guides on setting up shop on eBay and how to use your local market as a business incubator.

Hayward could be considered model of how to make a sustainable, and truly profitable, business that exists solely through an online storefront. But she’s planning big: she’d like her own boutique, complete with sewing lab – as well as to use the space to offer educational courses in designing and sewing. She’s anticipating hiring her first employee soon: another seamstress.

“You can start small – you can do custom wedding dresses or bridesmaid dresses. Start small with a very focused audience,” she said. “But I’m getting to the point where I’m working late evenings, and I’d like to create every dress myself, but I’m going to have to expand production.”

Scotto-Dinan, on the other hand, knew from the beginning she’d need a production facility. She read Womens Wear Daily to learn about the industry, and found advertisements for a variety of New York factories in its pages. Once she found a handful that seemed aligned with her goals, she interviewed them, and found one “that was a good match for what I was planning. I aligned myself with one local facility – and to this day I’m with them.”

Scotto-Dinan, who is based in New York, knew that she wanted to work with a local producer. However, sourcing a product abroad is a popular – and often money-saving – choice, though doing so creates myriad shipping, customs, and quality control issues.

When you’re ready to sign on with a production house, mind the contract, attorneys caution. “The cutting houses and factories will throw a contract at you. There’s a standard contract that they give you, but some of them come back and say, once you’re working with them, that they own the patterns. You can’t let that happen,” Nemphos said.

One way to preempt disputes is to have a legal confidentiality agreement and a development agreement ready. Also, if you’re using unique patterns or fabric designs, you might want to consider trademarking them. Yes, that’s right: patterns are considered intellectual property and fit into the trademark purview rather than being considered patentable.

Then again, if you’re developing a new fabric, or chemical compound that creates a fabric, you should consider patenting that process, Nemphos says. “There’s a great deal of change in the materials that are used in apparel. A lot of it is specially designed and created – and that material has to find its way into contracts, because you have a trade secret on your hands,” he said. “That can, and should, be patented.”

Nanette Heide, a corporate partner in the New York office of Duane Morris, added: “You really have to be careful who you give access to information on how your product is made. That’s handled through confidentiality agreements. You have to make sure your stuff is kept secret.”

Before establishing your brand, search out others who might be using the same, or similar, names. Don’t enter the same retail space as a direct competitor with the same, or a similar, mark. That said, Heide advised that throughout your brand’s lifetime: “You want to keep a watchful eye on whether someone out there is using a similar mark or name. If someone is, at that point, you’d need to send a cease and desist letter.” In other words: call your lawyer.

Dig Deeper: Creating a New Online Fashion-Buying Experience

Breaking Into Fashion: Ramp up Sales, Think Big, and Address Market Desires

The legal issues involved in establishing a brand only expand as your business grows. So do sales and marketing demands. At this level, both innovation and sales are your keys to success, Scotto-Dinan advises.

“If you know your market, and it’s department stores, call the fashion director at Bloomingdales. You can find these people. You have to sell your product, and if you know it’s good, just do it,” she said. “Send them your look book and don’t look back.”

Another part of succeeding as a designer in this economy is being innovative. But also being mindful of your audience helps. If your brand is selling well in a few boutiques, listen to their buyers, Singh said. If they’re not talking, actively solicit their advice on your last line, including what they liked, what didn’t sell well, and what they’d like to see in the future.

“One thing I would share with any emerging designer is you have to be open to things your buyers are saying,” she said. “It’s true that designers can be like babies, and be very attached to what they design. But being open to what buyers have to say can really help you make a collection they want to buy.”

And that can tune you into what consumers want. For instance, when Scotto-Dinan began receiving a bulk of calls requesting dresses for bridal parties, she knew the bridesmaid dress market was ripe for the picking.

“We launched this January a second collection, the Ardour Collection, in bridal stores last year, to fit that demand,” she said. Now the Ardour Collection is in 25 bridal stores.

Scotto-Dinan has also built on the shapewear trend, which has been firmly established with the popularity of Spanxs, by creating a line of shapewear-lined dresses called SLEEK NYC, which will be launching this year at department stores. She has a fourth label, a private label for Anthropologie stores, called Annabelle, this year.

“What I love is the big question mark, how you don’t know what will happen, but that you can strive to build it. Even if it doesn’t grow to that huge point, you know you’re building it,” she said.

Dig Deeper: Revamp Your Fashion Marketing Plan

Business – Design – New York City – Fashion – Fashion design

The rest is here:
How to Break Into the Fashion Industry | Start-up

Yelp co-founder leaving company. A little less than six years after launching review site Yelp with his former PayPal co-worker Jeremy Stoppelman, CTO Russel Simmons is leaving Yelp, TechCrunch is reporting. “Simmons will be transitioning to an advisor role and take some time off to travel,” Robin Wauters writes. It’s already been a tumultuous year for Yelp, which walked away from a huge takeover deal with Google and later became the target of class-action lawsuit. While the site has reached 31 million monthly unique visitors, there’s still a love-hate relationship between small businesses and Yelp, as we told reported in our February cover story.

R.I.P. to the king of the breakfast sausage. A fond farewell this morning goes out to country singer, TV host, and sausage entrepreneur, Jimmy Dean, who died yesterday at the age of 81. An earlier generation may remember Dean best for his 1961 Grammy-winning song “Big Bad John,” but of late he was more acclaimed for his Jimmy Dean brand of breakfast sausages. Born in 1928 and raised in poverty in Plainview, Texas, Dean dropped out of high school in ninth grade before eventually getting into the entertainment business. As the Washington Post reports, Dean got into the sausage business in the late 1960s, using the experience he gained from butchering hogs while growing up. The Jimmy Dean Meat Co. was profitable after six months and was ultimately sold to Sara Lee in 1984. In addition to being remembered as a popular entertainer and successful businessman, Dean’s legacy unfortunately also includes the notoriously stomach-turning creation, blueberry pancake and sausage on a stick.

Has the recession actually been good for entrepreneurship? The New York Times ran a piece a couple of weeks ago arguing that “last year was a fabulous one for entrepreneurs,” but Small Business Trends has a different take on the numbers. The Kauffman index, which the Times quotes in the piece, reported a 13.3 percent increase in the number of people who became self-employed from 2007 to 2009, but the post at Small Biz Trends points out that the BLS shows a 5.9 percent drop for the same period. Still, “what’s not measured by either source is the number of people who quit self-employment in a particular month,” the post’s author writes. He points to additional statistics that indicate the self-employment failure rate has become “so large that the number of people working for themselves has dropped, despite a sizeable increase in the number of people becoming self-employed.”

I can has Internet empire? The New York Times gets inside the mind of Ben Huh, the man behind quirky blogs like Fail Blog. According to the story, Huh stumbled upon I Can Has Cheezburger, a website full of kitty photos and misspelled captions just three years ago. He posted a link of it to his own blog, which quickly broke down due to the influx of Web traffic. He bought the site with investments and $10,000 of his own savings, and tells the Times that the business, which has grown to include 53 sites, has been profitable since the get go, with most of the money coming from advertising, licensing and merchandise sales. According to Kiki Kane, who works on site development, the Cheezburger Network has grown because of the staff’s commitment to keeping their fingers on the pulse of Internet trends. “We’re constantly monitoring the Web for new memes,” she told the Times. “Those bits of cultural shorthand, inside jokes that you get right away just by seeing a visual image.”

How Diapers.com became a $180 million phenomenon. Robots! That’s according to Singularity Hub, which says that the Inc. 500 company was able to quickly fill lots of orders by using robots made by Kiva Systems. We’re not sure if we believe that’s the only reason; fans of the Singularity love robots, after all, but we do think that Kiva’s robots, which allow warehouse workers to stay in one place as the orders come to them, are really darn cool. As the blog says, they are “a great example of how man and machine working together can maximize the efficiency of each.” The company behind Diapers.com, Quidsi, is set to launch a new store, Soap.com, which will try to break into the drugstore business. With the help of robots, naturally.

How do you know if your idea will work? Short answer: do your homework and ask for feedback. When Saverio Mancina thought he might be laid off from his job of five years, he started e-mailing more than two dozen executives to find out whether their companies would hire him for projects if he launched his own PR firm. After that, Mancina used LinkedIn to query industry insiders on his business model. When he got the pink slip, he felt confident starting his own company, which now has 10 steady clients. It might be tempting to jump in and hope for the best, but the the Wall Street Journal recommends doing your research first. Solicit feedback from potential buyers to see if they’d be interest in your product and what they’d consider paying for it. For putting together affordable online surveys, try SurveyMonkey or Zoomerang.

Seven ways to generate buzz. Small businesses need to get more creative than big corporations when it comes to marketing themselves because they don’t have the seven-figure budgets to blow on pricey ad campaigns. However, SMBs do have the advantage of being able to give their marketing outreach a more personal touch. WebWorkerDaily has seven ideas for entrepreneurs to generate buzz for their small businesses. Some, such as conducting an interview series on your podcast or blog, seem solid, but others, such as organizing a “one-day book club,” might just not be for everyone.

In business, how do you measure “inventiveness?” The Daily Beast says that’s simple: just tally how many patents a given company has. To compile a list of the 50 Most Inventive Companies, the site added a twist. It took the number of approved U.S. patents in the past five years and divided it by number of employees, to “measure which companies are inventive in their DNA, versus their bulk size.” Which companies fared best? Within the top 10, most companies make semiconductors or cellular technology. At #3 is Altera, a semiconductor maker that’s filed 1,064 patents over the past five years. Ranking second is another semiconductor industry player, LSA Corporations, which was lauded in 2006 for improving digital video encoding and decoding for Blu-ray and high-def DVD players. No. 1? that’s InterDigital Communications, a comparatively smaller company that’s been a player in evolving cellphone technology since the 1960s.

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Business – New York Times – Yelp – Jeremy Stoppelman – Small business

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Yelp Co-founder Ducks Out | Start-up

Many start-ups use their Social Network contacts to find additional workers. Why not? Someone’s friend of a friend is probably that chef, programmer or administrative assistant you need, and they’re looking for work. (In fact, Inc. has a great guide to Using Social Media as a Recruiting Tool.)

But beware how you use that Social Network data you find. It could lead to discriminatory hiring practices. Most start-ups don’t have an HR department to tell them that different restrictions take effect when you have 4 employees, 15 employees and as you grow past 20 and 50. The Federal Equal Employment Laws prohibit employment discrimination against qualified individuals with disabilities, and prohibit bias based on race, color, religion, sex, or national origin, age, as well as other considerations. State and Local laws may impose even stricter rules depending on where your business operates.

This data (a candidates race, national origin, pregnancy status, etc.) is considered “protected information” and you can’t ask it in an interview. If it is revealed to you, it is often best to keep it to yourself and not pass it along to other hiring managers.

But what happens when the candidate reveals protected information via their social profiles? A Facebook basic profile almost matches the list of things you can’t ask in an interview – race, religion, sexual orientation, relationship status – are all part of the standard questions many people fill in on their pages.

“Social Media is an issue in HR and Employment and Compliance law – the protected information on people’s profiles is free, easy and voluntary. It’s not as if the employer is asking “are you pregnant” in an interview,” said lawyer Nancy Schess, a partner at Klein Zelman Rothermel, a labor and employment boutique firm that represents management. “The questions to ask are is a)it legal and b) is it a best practice to go and look for this information in the context of your hiring practice.”

Schess continues “Yes, If you go on a search engine and you can find it, you are allowed to look at it. But once you have the information, legally, what can you do with it?”

Take the case of a start-up owner who needs new assistant. He asks his network or his HR person to get candidates. He interviews an outstanding woman candidate and practically offers her the position during the interview. Then he finds out via her Facebook status after the interview that she’s 3 months pregnant. The owner knows that 6 months from now when she’s out giving birth, it will be the busy season, when he can’t afford to be without help. Legally he can’t act on this information.

I asked Schess, “How do you “un-know” this in your decision making process?” She replied “You can state you didn’t take it into account, but if you are sued for discrimination you have to prove that it wasn’t part of the decision making process. Now you’re in a risk area with a large liability.”

Is this kind of worrying really relevant to hard driving, fast-decision-making startups? “It’s my opinion in working with students and startups that they typically don’t care about this kind of information. They want qualified candidates,” says Dan Cohen, a Lecturer in Human Resource Studies at my alma mater, Cornell University’s School of Industrial and Labor Relations. Cohen was a 15-year entrepreneur who sold his own business and earned a PhD. in Management. He’s also the Entrepreneur-in-Residence at Cornell’s Student Agency’s eLab Incubator. “When start-ups need specialized talent they want the people that can do the job. The need for that talent is often blind to other personal characteristics.”

Schess cautions “If you’re going to use Social Media, and it is an appropriate approach, there’s a way to do it that protects you. Separate the information gathering, so the person who does the online search isn’t part of the hiring chain. Perhaps a screening agency, or a different employee. You have that person look at a candidate’s online profile for legitimate business issues, then ask them to brief you about their educational background and business experience. Make sure they don’t tell you about their protected information.”

Do you recruit candidates using Social Media? What’s been your experience?

Note: You should consult your own attorney before relying on these procedures – employment law varies by state and locality.

Law – Human resources – Social Media – Employment – Labour law

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Is It Legal To Use Social Network Data When Hiring? | %source%

As applications for the 2010 Inc. 500 | 5000 arrive, we thought it would be worthwhile to shine a spotlight on some of the companies that are vying to appear on our ranking of the fastest-growing private companies in the U.S. (For more information and to apply, go to http://www.inc.com/inc5000apply/2010/.) One that caught our eye was Chicago-based IguanaMed.IguanaMed makes scrubs, shirts and trousers or gowns worn by nurses, surgeons, and other hospital personnel, but not just any scrubs. The company combines different sporty, creative designs with high-performance, comfortable fabrics, that make flexible movement easier. “We’re not the first company to infuse style creatively into scrubs, but I think we’re doing it aggressively,” says president and CEO Gregory Lilien. “We want to continue to expand fabrics, and keep appearing bold, unique and exciting.”Lilien and his team of seven employees used to market IguanaMed’s scrubs as the “Nike or Puma of medical apparel,” but now, he says, his company is focusing on building the IguanaMed brand, rather than comparing their brand to others. IguanaMed offers several collections and styles of their medical scrubs, but their Med Flex fabrics – namely, their revolutionary Med Flex II, which is a tri-blend with spandex for easy movement – are what make their products especially appealing, he says.While the company was founded in 2005 as a subsidiary of Walrus Brands, another manufacturer of medical scrubs and other niche products, IguanaMed now operates independently from its former parent company. After the split, IguanaMed went on to earn a place on the Inc. 5000 from 2007 through 2009. The company was able to grow its distribution across all 50 states, as well as 11 countries worldwide, including Italy, Saudi Arabia and Brazil. “We’ve learned a lot over the past couple years,” Lilien says. “I think we’re also in a product category that’s not shaken up a lot. It’s fun to be in an older industry and breathe some life into it.”

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Inc. 5000 Applicant of the Week: IguanaMed |

As applications for the 2010 Inc. 500 | 5000 arrive, we thought it would be worthwhile to shine a spotlight on some of the companies that are vying to appear on our ranking of the fastest-growing private companies in the U.S. (For more information and to apply, go to http://www.inc.com/inc5000apply/2010/.) One that caught our eye was Butler, Pennsylvania-based Turbie Twist.In 2005, new college graduate Angela Carr and her slightly younger sister Christina Cummings found themselves buying the rights for a small, super-absorbent hair towel from Pittsburgh Plastics, a company that the sisters felt was vastly underutilizing the product. The women renamed the hair towel the Turbie Twist and set out to reconceptualize the marketing of the product.  The original model, while functional, seriously lacked a customer base, explains Carr, but once they realized that the target audience were girls about her age, brainstorming improvements became much easier.”We began asking ourselves, ‘What would I like? What would I want to buy? What do I think is cool?’” she says.The duo also upgraded the product material to plush micro-fibers, increased its environmental friendliness, and offered new colors and prints. Carr says her company landed their first big break in 2006 with the television shopping network QVC, which placed the first large order with the new company. Today, the co-owners own and operate the sole manufacturer of the Turbie Twist hair towel, with its signature elastic loop, which allows for its specially-designed shape to fit securely on heads of all sizes. The company, which now has eight full-time employees, continues to add clients, selling their product at huge retailers such as Ross Stores and Sally Beauty Supply, as well as online retailers such as Cosmeticmall.com and Cachebeauty.com.Carr says she expects the company to continue to grow: “Wet hair, dry hair, children or adults – if you have hair, you can use this product,” she says.

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Inc. 5000 Applicant of the Week: Turbie Twist |

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