Friday, August 31, 2012

Wednesday, August 29, 2012

The Next New Thing?

Economic development agencies and nonprofits are teaming up to provide free entrepreneurial training for unemployed Americans.

I write about some of the programs, and their overall impact, in my column this week.

Overall this may be a good trend but what worries me is there's little long-term data that proves efficacy for these programs. What we do know is that about half of all businesses that start in a given year are still in business five years later; about one-third make it to their 10th anniversary.

Those numbers hold pretty steady over time. They don't necessarily mean all those businesses fail - some are acquired, sold or merged in lucrative or at least positive outcomes. But others certainly do fail, costing their owners and investors a good deal of money.

All this reminds me of when my sons were in school and there were constant introductions of new programs that were designed to "save" public education. The main problem: None of them were proven, and few even tested, to adequately demonstrate that the outlay of money, time, effort and educational shift was worth it.

We seem to constantly be looking for save-all solutions in society. We get enthusiastic about new efforts, but we lag behind on the testing and benchmarking tasks. Let's hope these new programs are successful and that we soon have data to prove that.

Monday, August 27, 2012

Our Businesses, Ourselves


When I speak to small business groups, I always emphasize how important it is for them to let their personalities shine through.

Faceless corporate brands simply cannot compete with locally owned businesses when it comes to relationship - the most important thing for all of us humans, because we are primarily social animals.

LogoGarden, a "make it now" logo company, suggests that its clients become their own cheerleaders in order to gain customers and fans. Keep yourself out front as a pillar of your own brand values and you'll establish brand loyalty over time, the company says.

Here are their questions to help you determine how you can become a solid extension of your brand:

1.)What makes you different? What sets you apart from the competition as a brand ambassador and human being? Use those skills and ideas to promote your company. Communicating your message in a consistent and intriguing way will dictate how people relate to your company.

2.)What are you most proud of in your company? Do you donate profits to charitable organizations? Do you enlist summer interns in order to help them gain valuable experience? Whatever it is, shout it from the rooftops! People want to know why they should give you their money and they want to feel good about where they are putting it.

3.) What do I want people to remember my company by? Aside from putting out a superb product, do you want to be known for old-fashion customer service? Do you want to be looked at as modern and fast? Everything you do from the way you respond to an email to the way you carry on a phone conversation will be part of your brand’s larger message.

Sunday, August 26, 2012

The Humble CEO

Do you have heart, smarts, guts or luck? Maybe you're hitting on all cylinders?

The question is posed in a new book co-authored by a fascinating guy, Richard J. Harrington, who is in large part responsible for the success of information behemoth Thomson Reuters.

I had a fun conversation with Harrington for a Q&A I wrote recently. Sometimes a man that powerful and experienced is no fun to interview, preferring to talk down, patronize and rush me off the phone if he thinks I'm asking too many questions.

(Salon republished a great piece on this kind of guy recently.)

Not so with Harrington. Like many of the best entrepreneurs, I found him authoritative and intelligent but also humble, friendly and interested in a two-way conversation, rather than delivering me a sales pitch or droning on with a lecture.

Really refreshing. It's even more refreshing to see that that attitude is the norm rather than exception for the most powerful people I interview - believe it or not.

Thursday, August 23, 2012

Young Dreamers

Last week, long lines of unauthorized immigrants formed in major cities across the country. They were waiting for applications for "deferred action," a new Obama Administration program that will put them out-of-reach of deportation and give them authorization to work - at least for two years.

This is the alternative to the Dream Act, which Obama supported but couldn't get through Congress.

Small businesses are expected to be the employers of choice for these young people once they get work cards. This week, I write about how small employers should handle the new applicants and what they should do if existing employees present authorization cards on the job.

One tip: The news that someone has gotten a card should be confined to the personnel files, not announced in the company newsletter, lest privacy concerns be violated.

Tuesday, August 21, 2012

Kicking Back

This spring, I wrote about the new crowdfunding law that will allow average people to invest in small businesses.

The fear of some experts I talked to is that it will be all-too-easy for scammers to collect money online and then vanish. The SEC, currently writing the regs governing crowdfunding, likely has this scenario in mind.

But another, more basic, caution is just how risky - and illiquid - startup business investments are, something unsophisticated investors may not fully understand.

Now, we've got some indication of what kinds of return startup companies are providing on one of the early crowdfunding platforms Kickstarter.

This new report shows that 75 percent of the funded projects are not being completed on time. And the investors are getting restless.

Here's a reality check from one of the entrepreneurs who is struggling to deliver:
“It didn’t really seem on the surface like it was going to be that challenging, but it has been extremely challenging,” he said. “A lot, lot slower than I expected. A lot, lot more money than I expected to spend.”
That scenario is typically true for all startup entrepreneurs. It's something to keep in mind for next year, when crowdfunding will actually involve equity in the company (as opposed to gifts and products, as is typical now) and will be open to a wider audience.



Friday, August 17, 2012

Giving Up Control

Many times, founders are negotiated out of their companies by outside investors. They aren't able to successfully manage growing concerns and aren't hitting their benchmarks, so they have to go.

But other times, founders themselves recognize that they can't scale up a company and they are grateful to bring in the pros.

I explore the idea in this week's column - check it out!

Thursday, August 16, 2012

Two Roads Diverged

So many times, small decisions have big repercussions.

Take this guy, who made a wacky, spur-of-the-moment decision and has used it to tell the same story for the last decade.

Or take Lynda Weinman, founder of lynda.com. She was an animator and computer artist who taught digital and web design at Art Center College of Design in Pasadena in the mid 1990s. She tried to find computer manuals for her classes but was horrified by how badly they were written: So she decided to write a textbook herself, in plain English instead of tech-speak.

Most textbooks don't hit the best-seller list, but Designing Web Graphics did. Not only was it widely accessible, but Weinman hit a sweet spot in timing in 1996, when web graphics were just starting to be understood by the general public and business community.

The book was reprinted, rewritten four times and translated into dozens of languages. Weinman and her husband, Bruce Heavin, earned several hundred thousand dollars in royalties, moved to Ojai and used $20,000 to start a company.

In 2011, lynda.com had revenues of $70 million.

A frustration with bad books, a decision to create something better, and Weinman and Heavin's lives took a turn they most definitely never expected.




Tuesday, August 14, 2012

Dealing With Debt?

I like these microsites that the FTC and USA.gov are putting up on various topics.

Short and practical, they present the top financial issues that an individual might be dealing with and don't overwhelm with too much information and complexity.

Monday, August 13, 2012

Level the Playing Field

Everybody loves small business these days. But they get shafted by the tax code, especially on charitable deductions.

Why the disparity? Large corporations can "twist the arms" of Congress (financially speaking, of course) and small companies don't have that clout.

Is it time to even the playing field? I ask that question in a recent column.

Friday, August 10, 2012

Our Dogs, Ourselves

Dogs and cats have gone from living in the barn to sleeping in our beds (not mine, but some peoples'!).

That trend fuels the introduction of fresh dog- and cat-food, says Freshpet CEO Richard Thompson. But how difficult is it to introduce a whole new product category? Check out my column today.