Tag Archives: street

Norm Brodsky on Keeping Your Business Concept Simple

Posted on November 15, 2011 by

The final query this month comes from Meri West, who asked about choosing a name for her home-cleaning business in the July/August issue : Dear Norm, Can I ask you a follow-up question? How many add-ons can I have before I start looking desperate and willing to do anything? For example, I’d like to offer swimming pool maintenance — balancing chemicals, scrubbing walls, cleaning skimmers, and such. And I could also do light pet care, such as walking or brushing a dog or taking pets to a vet. I could offer basic plant care as well, and light home maintenance such as cleaning lint filters, dealing with air and water filters, and replacing toilet seats. How much can I offer without appearing to be a jack-of-all-trades and master of none? Meri West, founder, A Well Kept Home Jacksonville, Florida At least Meri understands the risk she runs by offering to do too much. I shudder to think what her business card would look like if she tried to include every little thing she’s willing to do. Here’s a better idea: Meri should say simply, “I take care of your home.” Period. If people ask whether she changes filters or scrubs swimming pool walls and walks dogs, she can say, “Of course. That’s part of taking care of a home.” 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 Shopping – Home and Garden – Business – Swimming pool – Water filter Continue reading →

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Solving the Pricing Riddle

Posted on November 14, 2011 by Lauren Folino

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 Continue reading →

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The Truth About Real Estate

Posted on November 12, 2011 by Nitasha Tiku

My software company, 37signals, is nearly 11 years old. But until now, it’s never really had a place to call its own. For much of that time, we’ve been positively nomadic. Our first headquarters was in the office of one of our original partners, a Chicago-based graphic designer named Carlos Segura. Carlos’s office also housed his design firm, as well as the T26 Digital Type Foundry and Thickface Records. 37signals lived on a corner of a big desk in a room upstairs. It wasn’t glamorous, but we didn’t need much space. It kept our costs down, too. After we had been there a year, Carlos left the company, so it was time for us to move on as well. By this time, 37signals was three people — Ernest Kim, Matt Linderman, and me. We were making money and doing well and didn’t require much in the way of an office. So when some friends/clients at a company called Data Harbor invited us to sublease some of their extra space, we said, “Sure.” A year after that, Data Harbor moved, and we took over the remainder of its lease for a few months. Then we decided to finally get a place of our own. We found it across the street (we could see it from the window of the space we were still occupying). It was too big — 3,500 square feet for just three Chicago-based employees — but the location was good, the rent was fair, and the landlord was a nice guy. Still, it never really felt like home. Rather than investing in the space, we just put some cheap tables together and got DSL. We worked that way for three years. During this time, we brought on a couple more people, but they were working remotely from other cities. I suppose we were thinking about office space the way most businesses do — as a cost center. After all, between rent, furniture, technology, and the like, it adds up fast, especially for a young company. We were doing fairly well, so $2,500 a month wasn’t much of a burden. At the same time, it was $30,000 a year out the door when we could all have just worked from home, which might have explained our ambivalence. But over the course of three years in that Spartan space, we learned an important lesson: An office could make you money, not just cost you money. We had a lot of empty space. Our three desks, conference room, and personal space took up only about 25 percent of the office. Perhaps we could turn that empty space into a revenue stream. Not by subleasing it but by using it to host our own workshops and conferences. For a few years, we’d been sharing our ideas on software design, marketing, and business on our blog, Signal vs. Noise. We’d begun to build a loyal and passionate following. So why not take advantage of that and hold a workshop about the things we were writing about on the blog? We could host it in the spare space in our empty office. And charge for it. We put together a one-day agenda, charged about $300 a person, and sold about 30 seats. Suddenly, we found ourselves with $9,000 in additional revenue. Our monthly rent at the time was $2,500. In one day, we just paid more than three months’ rent. That was a light-bulb moment. An office can be free — and even a profit center — if you start thinking about your company’s byproducts. What do I mean by byproducts? Just like the lumber industry can sell its sawdust (a byproduct of milling trees), we discovered that we could sell our knowledge (a byproduct of running a business). And we could sell it in our spare space. Eventually, we packaged this knowledge in book form. All told, the combination of the book and the workshops has brought in revenue of more than $1 million. But back to our real estate saga. When our lease was up, we decided not to renew. But instead of getting another space of our own, we hooked up with another friendly company we knew: Coudal Partners. I knew Jim Coudal, owner of the advertising and design firm, through a mutual friend. Jim had some extra space, I mentioned that we were looking, and he offered it at a fair price. This was in 2003. For the past seven years, we’ve been working out of that office. It’s been a wonderful experience. The folks at Coudal Partners are wildly creative. We’ve hired them to shoot and produce some video for us, and we even started a side company together called The Deck, a targeted ad network that helps companies reach graphic designers, Web designers, and other creative professionals. However, since we’re sharing the space, it’s not ours to do whatever we want with. Holding workshops there has been a logistical challenge, because those events mean that the people at Coudal Partners can’t work at their own office for a day. That doesn’t scale well. We’d like to be able to do a workshop every six weeks. Or maybe host a spontaneous gathering of all our nearby customers. We needed more flexibility. What’s more, since we’ve expanded from just a few people to 20 (nine of whom are in Chicago), we’ve outgrown the six desks we had been renting. Privacy is another thing you don’t have much of when you share an office with another company. It wasn’t an issue early on, but it is now. Our friends at Coudal Partners have been fair and accommodating, but we decided it was time to move on. So last year, we began looking for a place of our own. From the outset, we decided to recall what we had learned years before: We weren’t just going to spend money on the space; we were actually going to make money on it. That requirement became the driving force for finding the right space. We looked at a bunch of places — houses, lofts, offices that already had been built out, raw traditional office spaces. We almost had a lease done on a large factory that had been turned into a six-bedroom residence (we’d use the bedrooms for private offices). But the deal fell through because of zoning and parking issues. Eventually, we found a beautiful raw space just six blocks from our current office. It’s a corner space with two enormous walls of windows. Natural light pours in. We hired architects to review the space and draw up plans. We negotiated the lease, paid the lawyers, paid the lawyers some more, and signed the papers. The design process took a few months, and the build-out took about four months. We finally moved in July. True to our vision, about a third of the 10,000 square feet is dedicated to teaching. We built a theater-style classroom, with 37 seats, in which we can give presentations, hold workshops, and offer training and support classes for our customers. We plan on holding the first of many regular workshops this fall. For the past few years, we’ve rented out different venues for our workshops. It cost us a few grand for the space, another few grand for the overpriced catering (we had to use each facility’s sanctioned caterer), and another few grand for audio-visual requirements and other logistical considerations. Though we were able to charge about $750 per seat for a one-day event and sell about 50 seats per workshop, renting still took a good chunk of profit out of the equation. With our own space, we’ll not only save money on the costs side; we can make more money on the profit side. We also believe we’ll be able to charge closer to $1,000 a seat. At 37 seats, that’s $37,000 in revenue. All we’ll have to pay for is catering. All the AV requirements and Internet connectivity are built into the space. And it’s much more attractive than the venues we were renting out before. Just a few of these workshops will cover our rent for the year. The lesson here is less about real estate than it is about business itself. Whenever you make something, you make something else. Your byproducts may not be as obvious as sawdust, but they’re there. Maybe it’s the knowledge you’ve acquired by running a business. Maybe it’s a piece of software you wound up making when you made another piece of software. It’s there; you just have to look for it. You may even find a business you never knew you had. Jason Fried is co-founder of 37signals, a Chicago-based software firm, and co-author of the book Rework. Coudal Partners – Business – 37signals – Real estate – Technology Continue reading →

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What Does a CEO Really Do, Anyway?

Posted on November 4, 2011 by Inc. Staff

Each day, Inc.’s reporters scour the Web for the most important and interesting news to entrepreneurs. Here’s what we found today: Three essential CEO skills. Early on in his career as a VC, when one of Fred Wilson’s portfolio companies was having a hard time and he was on the hunt for a new CEO when he realized he didn’t have a clear or concise picture of what a CEO does. One of the company’s board members replied: “A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.” And everything else you delegate. Do you think there are other essential skills for a CEO to have? Let us know in the comments. Reviving New Orleans, one entrepreneur at a time. Five years after Hurricane Katrina flooded nearly 80 percent of the city, a new wave of entrepreneurs are hard at work helping to return the Crescent City back to its former glory. As Portfolio reports, the rate of entrepreneurs starting businesses in New Orleans is now higher than the national average, with 450 per 100,000 people starting businesses. Those new businesses have also helped to raise wages, which have grown 14 percent over the last five years, putting them on par with the national averages for the first time since the 1980′s. The article details the struggles of a handful of entrepreneurs who learned to adapt and adjust to keep their businesses going post-Katrina. As the owner of a construction firm explained, “It was a totally new environment, so we were a totally new company, even though we’re still the same name. We had to rethink everything.” Who’s not using location-aware services? Almost everybody, the New York Times reports . Just 4 percent of Americans have ever tried a location-based service, such as Foursquare, Shopkick, or Facebook Places, which let people report and broadcast their physical location to friends – or everyone – online. Just 1 percent use them weekly – and that’s mostly young men in urban pockets. Why are we so location-shy? For a lot of people interviewed, privacy can be a concern. Who has no fear? “The magic age is people born after 1981,” said Sam Altman, chief executive of Loopt. “That’s the cut-off for us where we see a big change in privacy settings and user acceptance.” Advice of an entrepreneurial father. In his latest blog post, serial entrepreneur Steve Blank shares the advice he’s given his college-aged daughters on how to survive and succeed in what is still often a male-driven business world. Some of his main points: “There are implicit rules of competition and collaboration in companies,” and “In most companies men set these rules … They don’t have to explain the rules to other men so it never occurs to them to explain the rules to women.” And if they prefer collaboration to straight-out competition, “they need to understand what their career choices are,” Blank writes. “There are plenty of other ways to be a productive member of society other than a position on a corporate org chart.” Realistic or pessimistic? Innovation is for everyone, right? Not so, contends Business Week’s Pat Lencioni . He writes that only a limited number of people in “leadership” roles should bear the burden of innovation. Everyone else should focus on being “dutiful, enthusiastic, and consistent” about their jobs. By telling all of their employees to innovate, executives also run the risk of confusing workers and even stifling company success by creating chaos. Instead, Lencioni advocates a practice dubbed “creatonomy.” A company with “creatonomy” has employees who do their jobs and satisfy customers in the most effective way possible, and don’t necessarily contribute to how to run the business. The end result cultivates brand loyalty, employee charisma, and customer appreciation. The name game. Sometimes, naming a business can come with hidden pitfalls – especially if done hastily. It might seem appealing to go with your first hunch, or first great website name, but experts say several major considerations should go into the moniker-making process. First, you’ll want to be unique: a similarly named business could always slap you with a trademark-infringement lawsuit. Kori Stanton estimates she lost $11,000 in wasted marketing materials and incorporation fees after being sued and changing her cookie-company name. And what if your name is confusing to customers? The Wall Street Journal explores an array of potential pitfalls . Want to avoid them? Check out our guide on how to choose the best name for your business. More from Inc. magazine: Get this delivered to your inbox. Follow us on Twitter. Follow us on Tumblr. Like us on Facebook. Hurricane Katrina – New Orleans – Business – Wall Street Journal – Fred Wilson Continue reading →

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Is "Don’t Be Evil" Over?

Posted on September 2, 2011 by

Each day, Inc.’s reporters scour the Web for the most important and interesting news to entrepreneurs. Here’s what we found today: Google founders fret over privacy . Is “Don’t Be Evil” falling by the wayside? The Wall Street Journal uncovers an internal memo from 2008 that suggests “soul-searching” at Google, as founders Larry Page and Sergey Brin resisted efforts by other executives to be more aggressive about using information about customer behavior. Among the ideas suggested in the memo: Using more data from Gmail accounts, creating an exchange for the buying and selling of data, and letting people pay to opt out of advertisements. The Journal says that Google fell behind competitors, who have aggressively exploited private data, but that the company is now trying to catch up. “[F]or years it resisted using any method to track people online without their knowledge at the fierce insistence of Sergey Brin and [Larry] Page,” the Journal writes. “But the two men have gradually decided they can begin exploiting the data their company controls, without exploiting consumers.” The bad boss backlash. If you ever needed a reason not to flirt with your assistant, this would be it. Meet Jenny . She just quit her job in a series of dry erase board messages, which she then photographed and sent around to her entire office, about 20 employees total. Oh and they made it onto the Internet, of course. In addition to telling her boss, that “being your assistant’s been a special hell,” Jenny also calls attention to his bad breath, says she heard him call her a “hot piece of ass” over the phone and exposes the number of hours a week he spends playing FarmVille (19.7, if you’re wondering). Jenny doesn’t have a job lined up yet, but, she writes, “Something tells me I’ll be just fine.” And to think: this is only the second most dramatic resignation of the week. Are salespeople overpaid? That’s the question Jay Goltz ponders in a New York Times’s blog post. He tells a story of a boss (and his wife) touring his top salesperson’s lavish new home, which was nicer, his wife noted, than the boss’s own. Bitterness, and harsh words, ensued. But Goltz says that if a solid commission structure is in place for a sales team, it can work, even when the numbers soar. The moral of the story? When your salespeople make money, you make money. “The fact is, though, that great salespeople are not easy to find, and they deserve to be paid more money than sometimes seems reasonable. They earn that money.” The anti-Facebook. Christopher Poole thinks 4chan, the site he created at age 15, is it. The two sites make for an interesting study in contrasts. 4chan, the sprawling online message-board community, is largely anonymous, highly amorphous, and usually disorganized. But with more than 1 million posts per day, and 730 million page views a month (that’s similar what the New York Times attracts), the 4chan community proves that undirected self-organization works, the Washington Post reports . Users of the site have successfully pranked large organizations like Google and the Church of Scientology . Poole, now 22, recently raised $625,000 in funding from the likes of Netscape founder Marc Andreessen and former AOL executive Kenneth Lerer, to create a new online community. Steve Nash, point guard and…venture capitalist? Two years ago, Steve Nash, the two-time MVP point guard, took an unpaid internship at the ad agency Deutsch. Now, Nash is co-founding a venture capital firm with Mike Duda, one of the partners at the agency (via GigaOM ). Nash hopes to raise a $20 million fund that will invest in “e-commerce, sports, durables and performance categories” with a focus on early stage companies. If you’re thinking of pitching Nash or another VC, you should check out the advice of an entrepreneur who went over to venture capital . How not to handle a product recall. In the 1980s, Johnson & Johnson was faced with a crisis. Seven people died from Tylenol capsules that were laced with cyanide. But the company’s swift response to the recall allowed Tylenol to regain more than 80 percent of its previous market share within just a year. The most recent Tylenol recall is quite a different story, the Chicago Tribune reports. As one expert sums it up, “This has been a much slower response. There’s been a lack of commitment, transparency or empathy, and who owns this crisis isn’t completely clear.” Major retailers are capitalizing on the recall by promoting their store brand drugs as safe alternatives. For tips on how to handle a product recall the right way, check out our guide . Who’s getting VC money these days? CB Insights has just published the second part of its study on the demographics of the entrepreneurs who received venture capital funding in the first half of this year. The first part (via Huffington Post ) looked at race, age, and experience. The new study finds that 87 percent of founders are white, but that Asian founding teams tend to raise the largest rounds. And, in case you needed further proof of gender imbalance in Silicon Valley, 92 percent of VC-backed founders are men. 5 emerging Web design trends. Mashable lists some tricks to help you convert browsers into buyers. The post suggests paying for unique, custom photography rather than relying on stock images, getting creative with bold typography, and incorporating some sort of call to action. If you’re hungry for more advice on putting together a stellar website, Inc. has more tips from the pros . More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Follow us on Tumblr. Like us on Facebook. Google – Facebook – Venture capital – Netscape – Larry Page Continue reading →

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Yelp Co-founder Ducks Out

Posted on August 16, 2011 by Lauren Folino

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. More from Inc. Magazine: Get this delivered to your inbox. Or get it on the Kindle. Follow us on Twitter or Tumblr . Friend us on Facebook. Apply now for the 2010 Inc. 500|5000 . Business – New York Times – Yelp – Jeremy Stoppelman – Small business 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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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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Vying for the No. 1 Spot

Posted on May 24, 2011 by Inc. Staff

As applications for this year’s 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. Robert Moog is credited with inventing the Moog synthesizer, a sophisticated, versatile instrument that has revolutionized how music has been played and recorded in the last 50 years. When it debuted at the Audio Engineering Society Convention in 1964, he took orders on the spot. “Bob used to say that he got into business by slipping backwards on a banana peel,” says Mike Adams, who joined the company in 2002 and now serves as the company’s CEO. In 2005, at the age of 71, Robert Moog died from cancer. Now, with 45 employees and distribution in nearly 50 countries worldwide, Moog Music is on the rise. Last year, the company made over $7 million in revenue, and Adams anticipates growth of up to 40 percent for this year. Denise Wilson is an anomaly in the flying community. She is one of the nearly 38,000 active female pilots in the United States, just six percent of all active pilots in the country. What makes her even more rare is that she’s also the founder and president of an aviation company, Desert Jet, which she launched in 2007. The company acts as brokers for corporations who own their own planes, thereby affording those corporations the opportunity to offset their expenses by chartering out their planes when they are not in use. This arrangement allows Desert Jet to have full operation of the aircraft without the debt and liabilities associated with actual ownership. Today, the company has annual revenues of $2.1 million, representing 1,300 percent growth over the past three years. Rick and Jeff Platt, a father and son entrepreneurial duo from Los Angeles, were really excited about the idea of creating a new professional sport that would use trampoline courts as its playing field. But after receiving $2.5 million in investments, building the court (called Sky Zone), and training athletes, the Platt’s could not get the new sport to catch on. One thing that did catch on was the neighborhood kids begging to play on the trampolines. So in June of 2004, Sky Zone, the sport, morphed into Sky Zone Indoor Trampoline Park. In 2010, the company reported $3 million in revenue, up from $500,000 in 2007, amounting to 500 percent growth over that period. Jeff projects total revenue for 2011 will reach nearly $12 million. If you’ve taken your pet to the vet recently, you know how expensive your little pup’s pills can be. But what if there was a generic alternative? That’s where Putney comes in, a pharmaceutical company specializing in the development of high quality drugs for pets. Part businesswoman, part animal lover, Putney’s CEO Jean Hoffman founded Putney in 2006. One afternoon, while taking her adopted cat Dude to the vet, Hoffman had a couple of realizations. First, pet medications were prohibitively high for many people. And second, this created a niche market for a business that sold generic pet medications. The company, which launched its first product in 2007, has enjoyed a 58 percent compound annual growth rate over the last year, with $9.5 million in revenue in 2010. Imagine if a pilot knew how to fly a plane before ever stepping into a cockpit, if a doctor knew how to perform a complicated surgery before ever cutting a patient, or if a soldier knew how to use his equipment before ever holding it in his hands. What might sound like science fiction is now a reality, thanks to Heartwood Studios. Heartwood’s custom-designed 3D virtual training applications provides customers like Raytheon, Honeywell, and the U.S. Army with a modern alternative to a PowerPoint presentation or training manuals. After earning $2 million in revenue in 2010, the company expects 100 percent growth for the next two years. Last year, Military Training Technology magazine named Heartwood as one of the year’s Top Simulation and Training Companies. Kim Overton’s “aha” moment led to a multi-million dollar business that makes small personal item (SPI) belts for working out and travel. Overton can be classified as a serial entrepreneur. In the mid-90s she co-founded a tech company with her friend. After that she helped The Lord Group advertising agency develop its interactive division. And most recently, she invented the SPIbelt in 2006. “I was out on a run and I had my key tucked into my bra top and I thought ‘man, this is uncomfortable. I just need a simple belt.’ After that run I went and bought the stuff to make the very first belt,” Overton says. Soon she quit her job so she could devote all of her attention to her new company. Since its launch, SPIbelt has added 10 employees and revenue has grown from $150,000 in 2007 to $7 million in 2010. After graduating from Columbia University, brothers Courtney and Carter Reum took jobs at Goldman Sachs. But in 2007, right before the financial crisis upended Wall Street, they’d had enough. The money was good—but they craved something more exciting. “I always wanted to be an entrepreneur,” says Courtney. He adds, “It just kind of struck me that the main categories of spirits out there—vodka, gin, rum—have been around for centuries. There’s been very little innovation in the true sense of the word.” So the brothers quit their jobs to launch VeeV, a spirit containing the antioxidant-rich a Continue reading →

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Spicing Up That Sales Pitch

Posted on May 23, 2011 by

Can laughs make the sale? Plus, the new deal-site ecosystem, loving the Like button, and the rest of the day’s news for entrepreneurs. Each day, Inc.’s reporters scour the Web for the most important and interesting news to entrepreneurs. Here’s what we found today. Using laughs to land the deal. Is your sales pitch too stale? Try using humor, says Burt Teplitzky, an author, stand-up comedian, and corporate trainer based in Los Angeles. According to Teplitzky, incorporating humor into one’s sales pitch releases tension, establishes a rapport with customers, and increases the “likeability factor.” In an interview with The Wall Street Journal , Teplitzky explains how punchy, relevant jokes are more engaging and impressive to an audience than a straightforward presentation. “Your main job is to create an environment where the customer wants to buy from you,” Teplitzky says. “Humor helps to open lines of communication because you are both comfortable with each other.” The new deal-site ecosystem. With Groupon adding 150 employees a month, and LivingSocial’s third office space already bursting at the seams, the Associated Press reports that deal sites are becoming so popular that their office are starting to look as crowded as their subscribers’ inboxes. Exponential growth of these sites—including hundreds of clone or niche deal sites—might look like a bubble. But analysts interviewed say it’s actually an emerging category of commerce that’s dramatically changing how retail and service industries price and sell their goods. With Groupon, the top daily deal site, racking up 85 million subscribers in about two years, and LivingSocial gained 28 million. On the other hand, Joshua Gans in the Harvard Business Review offers a cogent argument that perhaps the daily deals space is becoming too crowded for the biggest names to continue rocketship-pace growth. he writes, “right now, there is one issue on which every economist I know of actually agrees,” that Groupon should have accepted a $6 billion bid from Google, that Google was insane to have offered it, and that Groupon is doomed. Which story do you believe? What Facebook’s Like button can do for you. The stats compiled here by Search Engine Land’s ed-in-chief Danny Sullivan come straight from Facebook, but none the less shed light on how Facebook’s so-called social users can super charge web site referrals, page views, and—even—revenue. Glenn Beck, e-commerce entrepreneur. That’s right. The infamous TV personality’s production company, Mercury Radio Arts, announced this morning the launch of a new e-commerce discount website called Markdown.com, Business Insider reports. What will the site sell? So far, Beck’s production company says deals will be on everything from credit-score monitoring services to chocolate. Considering Beck’s Oprah-like reach, the new venture could prove profitable. Markdown will offer one to two deals a week at first, but has plans to expand. Should CEOs hate surprises? Barry Salzberg, who will rise to global chief executive of Deloitte Touche Tohmatsu, offers some thoughtful leadership advice in a Q & A with The New York Times. On leadership, Salzberg notes “I don’t like surprises. I don’t like good surprises. I don’t like bad surprises. Obviously it’s better to have good surprises, but the idea is to be transparent and straight and tell it like it is all the time and to make sure that you are involving others along the way.” When it comes to hiring, Salzberg says a “good marriage” is the most important aspect of finding the right person. We’re “looking for these intangibles, because at the end of the day, what we’ve found is, people join you for the firm and what they think they are going to do, and they leave because of the people and the environment they work in,” he says. Iams’s top dog to help business’s smaller pups. After making billions selling premium dog food, former Iams owner Clayton Mathile now is helping small businesses see at least a fraction of his mammoth success. According to CNN Money, the 70-year-old billionaire’s nonprofit, Aileron, has helped more than 20,000 small business owners grow and develop since he poured $130 million into the organization three years ago. Aileron was named after an airplane wing part that helps lift the airplane during flight to symbolize how the nonprofit uplifts their clients, mostly entrepreneurs who have $1 million to $30 million in sales and 10 to 100 employees. With classes, counseling and funding, these entrepreneurs develop leadership and managing tools to apply in their start-ups. “Entrepreneurs can solve almost all the problems we have in this country, in this world,” says Mathile. “It’s just that they have to be allowed and afforded the opportunity.” More from Inc. magazine: Get this delivered to your inbox. Follow us on Twitter . Follow us on Tumblr . Like us on Facebook. Continue reading →

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