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7 Things You Can Do on Friday to Make Monday Awesome

Inc Small Business - Fri, 04/18/2014 - 8:00am

Instead of just waiting for the work week to end, use those last few hours and these tips to make next week start out fantastic.

Most people get excited that Friday is here, especially if the week has been hectic and packed. But often Fridays can seem like a waste (especially before holidays). Your brain, in anticipation of the time off, just says: I have had enough! Bring on the downtime. Then the afternoon just drags on and on.

You don't get a lot of help from your colleagues because the afternoon Friday lull is a commonly shared experience. Everyone's already thinking about the weekend and ready to go home, so productivity drops. But instead of giving in to the impulse to window gaze and daydream, you can use the opportunity to get next week off to an awesome start. Here are seven ways:

1. Set up some exciting contacts. Give yourself something to look forward to. Spend the afternoon emailing new prospects or perhaps mentors. Set up a lunch for next week that makes you anticipate good things to come. People may be slow to reply since it's Friday afternoon, but in the worst case you'll come back Monday to some positive responses.

2. Organize the week. Go through next week's calendar and plan out the entire week. Set reminder alarms on your computer or smartphone calendar. Include all meetings, deadlines, and "to-do" items. Lay out a specific task list with apportioned hours. You'll clear your mind of that nagging feeling that you forgot something and have a truly relaxing weekend, leaving you happier on Monday.

3. Get one thing off your desk. Fridays are the time when it's most tempting to look at projects and tasks and say, "Oh, I'll just pick it back up Monday." So choose one of your ongoing projects and commit to getting it done before you leave. The satisfaction of accomplishment may even motivate you to do more today. And next Monday, you'll have the relief of knowing that task won't be on your desk to taunt you.

4. Shake up your routine. Reflect for a few moments on your usual weekly routine. Make a list of your typical distractions, the habits and stressors that keep you from starting the workweek with a bang. This can be anything from "chatting about the weekend over coffee with officemates" to "reading the accumulated junk e-mail on my laptop" or "hiding from my annoying boss or colleague." Make a list, then write down what you will do instead. Create a new routine that's uplifting and energizing. Put it where you will see it first thing Monday morning.

5. Work on your future. If you feel you simply can't push any more paper for your company today, put on some inspiring music and spend a little time writing some thoughts about your current career and life. Are you working towards your preferred future? Do you know where you want to be in five years? Make some notes and take them with you to consider over the weekend. When you come back Monday, you may have some needed clarity that can help you decide how to spend your week--or whether it is time to start looking for new opportunities.

6. Surprise yourself. Hide some small treat in your desk drawer or file cabinet. It could be a gourmet chocolate bar, a $10 iTunes card for new music, a new scented candle, or another little indulgence you like. Put it there Friday afternoon and you'll have something delightful to look forward to on your return. The best part is when you forget all about it and make a startling, pleasant discovery during the week. It's kind of like your very own Easter egg hunt.

7. End the week on a high. Plan to show someone your appreciation. Pick someone in your office who has been extra helpful this week, done a fantastic job on a project, gone above and beyond, or been everyone's ray of sunshine. Plan a nice gesture such as a thoughtfully worded thank you e-mail, a small bunch of flowers, or a gift card to their favorite coffee place. (If there's anything to purchase make sure you do it on Sunday night so you're not running late!) Execute your gesture of gratitude after you arrive Monday morning. You'll be excited all weekend about making that person's week start out with a bang!

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Categories: Small Business News

How a Sense of Purpose Boosts Engagement

Inc Small Business - Fri, 04/18/2014 - 7:13am

Your company's purpose is important to employees, so you probably better let them know about it.

Every company, at some level, has a purpose. How well you are able to communicate yours internally could have a major effect on your employees' engagement levels.

That's one of the more striking findings from a new survey from Deloitte. To put it in terms of numbers, 73 percent of employees who say they work at a "purpose-driven" company are engaged, compared to just 23 percent of those who don't.

A purpose-driven company, as Deloitte defines it, is one that has "an important objective that creates meaningful impact for stakeholders"--those stakeholders being customers, employees, their communities, and investors.

Purpose and Awareness

The data on employee engagement is self-reported. That is, employees themselves were asked whether they consider their companies purpose-driven and themselves engaged.

From that spectrum, the correlation makes sense. After all, if an employee thinks their company has a purpose, of course they're more likely to say they're invested in their work.

In an interview with Inc., Deloitte chairman Punit Renjen agreed with that likelihood.

However, he said, what that really drives home is how essential it is for companies to make their purpose clear to their employees, and to establish systems within the organization that reflect that broader purpose.

That's because purpose on its own might not directly impact employee engagement so much as awareness of and exposure to that purpose might heighten employees' interest and commitment to their work.

It's not a layup that employees can identify with a corporate purpose. Consider the following, also found in the Deloitte study:

  • 47 percent of executives strongly agree that they can identify with their company's purpose, compared to just 30 percent of employees.
  • 44 percent of executives say leaders set an example of living that company's purpose. Only 25 percent of employees agree.
  • 41 percent of executives say the company's purpose plays a role in major business decisions, compared to 28 percent of employees.
  • 38 percent of leaders say their organization's purpose is clearly communicated, compared to 31 percent of employees.

In other words, even if you think you do a good job of bringing your company's purpose to the forefront, you might very well be wrong.

What is a purpose, anyway?

Punit says that articulating and communicating your purpose isn't as easy as it sounds. "You have to really understand the essence of why you exist," he says. In addition to crafting a mission statement, it also involves embedding the purpose into the entire organization (like through volunteer or employee development programs that reflect it) and through leadership buying in to that system as well.

But from a mission statement perspective, a couple of examples come to mind.

One involves Asana CEO Justin Rosenstein and involves one three-letter word: Why? An easy way to re-inforce your company's broader mission to employees who might be too caught up in their day-to-day to see it is to simply go up to them and ask them why they're doing whatever task they're doing. Their immediate answer might be because it's part of the project they're working on. Ask them why they're working on that project. When they give an answer, ask why again. Follow this chain long enough and you should eventually arrive at your company's mission statement.

The second example is an oft-cited but unconfirmed urban legend of employee engagement. It involves a janitor at NASA, being asked what he was doing, saying he was "helping to put a man on the moon."

Gallup has also created a seven-step plan for developing your company's mission statement, specifically for the purpose of leveraging employee engagement.

Beyond Engagement

Employee engagement isn't the only thing Deloitte found mission to impact. It also has wider-spread effect on corporate confidence.

For instance, 82 percent of leaders who say their companies have a strong sense of purpose expect to grow in 2014, compared to just 67 percent of leaders who didn't feel that sense.

Meanwhile, 91 percent of leaders at purpose-driven companies felt their companies would stengthen or maintain their brand in the next 5-10 years, compared to just 49 percent of their counterparts.

The common thread with the engagement data isn't necessarily that purpose drives performance (though that takeaway would also appear valid, based on Deloitte's data) as it is the sense of confidence generated by understanding that purpose across the entire organization--leaders and employees alike.

Categories: Small Business News

The 5 Things You Must Give Employees

Inc Small Business - Fri, 04/18/2014 - 7:00am

Odds are very high that many of your employees are disengaged, but you have the power to change that. Forget about awards and bonuses. Here are the five gifts that keep on giving.

According to research conducted by the Gallup Organization, only 30 percent of U.S. workers are engaged in their jobs--that is, they are “involved in, enthusiastic about, and committed to their work and contribute to their organization in a positive manner.” That leaves 70 percent of workers either not engaged or actively (you might even say disastrously) disengaged. According to Gallup, companies pay a heavy price for all this disengagement, to the tune of about $500 billion in lost productivity.

But all is not lost. As a leader, some of the most effective things you can do to develop and sustain motivated, energized employees cost little or nothing at all. Forget the employee-of-the-month award or the big holiday bonus; they have little lasting effect on positively motivating employees. Instead, focus on daily interactions. And be sure that you provide your employees with these five things:

1. Interesting Work

No one wants to do the same boring job over and over, day after day. Though a certain amount of routine and repetition is part of almost every job, make sure each employee finds at least part of his or her job highly interesting. As management theorist Frederick Herzberg put it, "If you want someone to do a good job, give them a good job to do." Find out which tasks your employees most enjoy and use that information when you make future assignments.

2. Information

Information really is power, and your employees want to be empowered with the information they need to do their jobs better and more effectively. And, more than ever, employees want to know how they are doing in their jobs and how the company is doing in its business. Open the channels of communication so that employees are well informed, can ask questions, and can share information. Be transparent, honest, and forthright. Those qualities will have a direct impact on employees' effectiveness.

3. Involvement

As the speed of business continues to increase, the amount of time you have to make decisions continues to decrease. Involving employees in decision making, especially when the decisions affect them directly, is both respectful and practical. Those closest to the problem typically have the best insight as to what to do. Involving others will increase their commitment and speed the implementation of new ideas or changes.

4. Independence

Few employees want their every action to be closely watched and monitored, or for their every decision to be questioned or micromanaged. Most employees appreciate having the flexibility to do their jobs as they see fit and to make decisions independently. Giving people latitude increases the chance that they will bring additional initiative, ideas, and energy to their jobs.

5. Increased Visibility

Everyone appreciates getting credit when it is due. Occasions to celebrate employee successes are almost limitless, and you should never let one pass. One of the best and most highly motivating forms of recognition is to give your employees new opportunities to perform, learn, and grow in response to their recent achievements. They will always rise to the occasion, becoming even more engaged, productive, and effective.

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Categories: Small Business News

4 Things You Need to Know Today

Inc Small Business - Fri, 04/18/2014 - 3:37am

A roundup of the day's news, curated by the Inc. editorial team, to help you and your business succeed

1. Attention, App Developers

Dropbox has been quietly snatching up small app platforms to help the cloud storage company become more of an app platform itself. Recent acquisitions, which have happened at a rate of roughly one per month, include Loom, Zulip, and Hackpad, among others. App developers eyeing an exit strategy might want to try to get on Dropbox's radar.--Re/code

2. A Wall in Berlin

Doing business in Europe has been a challenge for tech companies such as Google and Facebook, which have faced scrutiny and fines in the past. The latest Bay Area company to face rebukes abroad is Uber: A Berlin court banned some of its services, saying the company didn't have approval to operate there and threatening drivers with $13,800 fines.--The New York Times

3. Shooting for the Moon

Think you have a big idea? Check out Swedish company Brighter Moon, which has secured $52 million in funding to, wait for it, make the moon brighter. The startup claims it can save the world billions of dollars in electricity by placing highly reflective material on the moon's surface. Is it real or a hoax? Keep an eye on this one.--Mashable

4. Divorcing Your Co-founder

For couples who have started companies together, the end of their marriage doesn't necessarily have to mean the end of the business. Here's how ex-husbands and wives can make a postsplit professional relationship work.--NPR

Categories: Small Business News

The Next Strategic Advantage: True Privacy Protections

Inc Small Business - Fri, 04/18/2014 - 3:00am

Companies making a trade-off between user protections and revenue are still coming down on the wrong side of the privacy debate. And soon they'll begin to pay for it.

Last October, Facebook drew fire for allowing teens to post publicly for the first time. Critics blasted the social network for monetizing kids and teens. Newsflash: Facebook has been and will continue to monetize every living being on its platform. And that makes Facebook no different than all of its capitalist predecessors; making money is not the real issue here.

No, what we should hold Facebook accountable for is its too-slowly-evolving stand on privacy.

Opening up Facebook is the right thing to do, but it's also complicated because doing so means the social network (and others like it) must do a better job of educating users. They must have a clear-cut privacy product. I don't mean a shortened privacy statement but a product that clearly and succinctly states what piece of data is being used for what.

On a very simple level, any social network should have a "take me private" button--one that shuts out the world--and another that lets only specific connections see specific things. The default setting should border on obsessive--what's shared should be in the hands of the user, not the network. Terms of data use should address actionable choices the user has made to share information, not a way of legally covering the company in the event that something bad happens.

This isn't to say that social networks haven't become more privacy-friendly with their settings, but we're far from a point where it's easy to shut out the world.

The obtuse crystallization of this lack of product privacy is Internet security company AVG's PrivacyFix. PrivacyFix is essentially a sophisticated Chrome plugin that tells you exactly what your Facebook, LinkedIn, and Google Plus pages are sharing, and what potential mistakes you're making with your privacy. While this is an excellent and easy-to-use product, it's also ludicrous that it has to exist.

Facebook, Google, LinkedIn, and other companies are leaving traffic (and money) on the table because they don't want to commit to a privacy-focused product. Their anxiety could be that the virality of content on Facebook will be stifled by easily letting people control the privacy of their platforms. Twitter, which has a borderline binary way of controlling privacy (your tweets are private, not private, or directed at one user), still has over 240 million monthly active users, which pales in comparison to Facebook's 1.3 billion.

However, judging by Facebook's creation of embedded posts to compete with Twitter's embedded tweets, there's a clear interest in tweets' immediate public impact.

The truth is that Facebook (and other networks) could solve the problem by dropping the "everything is public" mantra entirely and making it very clear what's being posted publicly or privately. Having a vague tab that says a few different things (public, friends, etc.) isn't obvious enough--make the button say where the post is going. Instead of having the privacy button hidden at the top right in a small, non-specific icon, why not a "privacy" tab underneath "messages"--or even under "edit profile"?

So why aren't they already doing this? The answer may not be simple greed but the anxiety of a public company over its revenue stream. With a potential exodus of teenage users to messaging apps, and an initial worry over revenue generation via mobile (which they have now righted), Facebook could be desperate to keep making money and so they continue to make privacy missteps.

We the people need to hold them accountable, and not accept vague privacy policies as an excuse for making people’s information public when they don't want it to be.

Obfuscating privacy settings is not a trick that will work in the long run--and while Facebook may currently be the king of the social networks, it only takes a few missteps to fall. Just look at MySpace.

Categories: Small Business News

How a Company Takes on Its Founder's Personality

Inc Small Business - Thu, 04/17/2014 - 1:08pm

Molly Graham, who was once tasked with helping Facebook to define its company culture, talks about what she learned from the job.

For founders, defining company culture is really an exercise in self-awareness.

Ask yourself: What are your strengths? What makes you different from everyone else ambitious enough to start a company? What are you terrible at?

This introspection is important because it will offer an almost exact preview of how your company will operate down the line. Founders have demonstrated time and time again that the essence of your grown-up company is going to reflect your own key traits.

For example at Amazon, CEO Jeff Bezos' competitive nature and his tendency to move fast has extended to almost every level of the 97,000-person company. Similarly, Airbnb co-founders Brian Chesky and Joe Gebbia hail from the Rhode Island School of Design, which explains why the company has stuck tightly to its design focus over the years.

"Eighty percent of your company's culture will be defined by its core leaders," says Molly Graham, head of business operations at word processor company Quip. Graham was previously Facebook's director of mobile, and was tasked with helping the company define its culture when she came on in 2008.

In a recent talk at First Round Capital's CEO Summit, covered on First Round's blog, Graham spoke about how an early list of values laid down by Facebook CEO Mark Zuckerberg has guided the way the company has hired for years.

'One of Us'

In 2008, Facebook had 400 employees. As Graham tried to draft a company-culture description, which would help them acquire new like-minded hires, she was at a loss. She realized she was writing down the same boring and cliché descriptors--like "fast learners" and "team players"--that everyone else was using.

Luckily, she found out that Zuckerberg had already captured a lot of what she really needed to say. When the company had first started to grow, Zuckerberg jotted down a list of what it meant to be "one of us." Deeply familiar with his own values, he was easily able to articulate the ones he wanted to see in the members of his company. Zuckerberg's list of desirable attributes:

  • A very high IQ
  • Strong sense of purpose
  • Relentless focus on success
  • Aggressive and competitive
  • High quality bar, bordering on perfectionism
  • Likes changing and disrupting things
  • New ideas on how to do things better
  • High integrity
  • Surrounds themselves with good people
  • Cares about building real value over perceived value

Graham said she was impressed by how honest--and even controversial--the list was. But the list, written in 2006, stuck. And it has continued to shape much of the philosophy behind Facebook ever since.

Categories: Small Business News

Steve Blank: New Lessons Learned From Berkeley and Stanford Lean LaunchPad Classes

Inc Small Business - Thu, 04/17/2014 - 11:55am

What the entrepreneur and his team gleaned from introducing students to the lean startup model

Our Stanford and Berkeley Lean LaunchPad classes are over for the year, and as usual we learned as much from teaching the teams as the teams did from us.

Here are a few of the lessons learned from the two classes.

Have each team talk to 10 customers before the class starts

Each year, we learn how to move more of the Lean LaunchPad class logistics outside our classroom so teams have more time for in-class learning.

A few years ago, we moved the formation of teams to before the class started, and in doing so, saved a week of what normally would have been class time. To make this happen, we held three information sessions two weeks apart before the class started. In these info sessions, we described the purpose of the class and then let students mix, meet, and form teams. During this preclass time, we shared a Google Doc in which students who had ideas could find other team members. Students without an idea could find a team that matched their skills and interests. Application and admission into the class was by interview with a fully formed team.

Info session announcement (click to enlarge)

The next thing we learned was to make applying to the class an integral part of the learning process. Teams applied by filling out both a business model canvas and a competitive petal slide. Having the teams do this accomplished three things. First, it forced the students to read and understand "what's a business model canvas" before they even came to class.

Team application: business model canvas

Second, the competitive slide enforced a modicum of due diligence on the product and market. We got tired of knowing more about a team's market by doing a Google search as the team presented--so we made it a team's job.

Team application: competitive petal slide (click to enlarge)

Finally, having teams spend time on the canvas and competition as part of the application process saved weeks of what would have been class time (and as a bonus gave the team a heads-up about the difficulty of the class and showed whether the team members were serious about the class or just shopping).

This year, we learned to raise the bar once again. Could we get the teams to come into class having already talked to 10 customers? Instead of using the first class to have teams just present their business model canvas, this time the teams' first presentation was about what they learned outside the building about their value proposition. We pointed them to our tutorials on customer discovery and how to conduct customer interviews but didn't expect them to be experts in Week One.

1st-week team title slide--11 interviews before class started (click to enlarge)

We did an A/B test when we required our teams in one school to do this while we didn't require it for the teams in the other school. The result? Teams that had to talk to customers before the class hit the ground running. There was a substantive difference in team trajectory and velocity that continued throughout the quarter. The amount of learning between the two felt quite different. Though there may have been other factors (team selection bias, team makeup, etc.), we'll now make this an integral part of all the classes.

Have each team put the number of mentor interactions on its weekly title slide

The second innovation this year involved mentors. Each team was assigned a mentor as a coach. We've been trying to figure out how to make mentor engagements with their teams a regular rather an ad hoc activity. Though we have required the teams to add a summary of any mentor interaction to their LaunchPad Central narrative, we felt we didn't have sufficient high-level visibility for these essential interactions.

(Click to enlarge)

But this year, a seemingly minor change to the teams' weekly cover slide had an important impact. As teams presented each week, their cover slides showed the number of customers interviewed for that week (>10) along with the cumulative customers interviewed. This year, we added one more metric for their cover slides--the number of mentor interactions for that week (>1) along with the cumulative number of mentor interactions.

This enhanced the visibility of the teams' interactions (or lack of) with their mentors and allowed us to intervene early if there wasn't sufficient interaction.

Here are a few of the Final Presentations (see here for all of them)

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Categories: Small Business News

This Startup Is Shaking TV Networks--All the Way to the Supreme Court

Inc Small Business - Thu, 04/17/2014 - 11:42am

In its three-year lifespan, Aereo has angered all the major TV networks, major-league sports, and the government. Here's a portrait of the scrappy company--and its audacious CEO--that could change American television as we know it.

Chet Kanojia peels the wrapper from a piece of nicotine gum and stares calmly into the middle distance. He seems unfazed by the DJ beats or the commotion. Or the fact that he's just been interviewed about his company in front of a couple hundred tech enthusiasts in an Austin bar at the South by Southwest Interactive festival, where half the audience was concerning itself with throwing back tequila, searching for the free T-shirts, or exchanging business cards. His is the still gaze of a man who has achieved much and yet has enough on the line for it to matter. Just 45 days after this event, Kanojia will have to defend Aereo, his ambitious tech startup, in front of the U.S. Supreme Court.

From Day One, Kanojia anticipated that the fundamental idea behind his company--which streams TV-network programming to customers' computers--could rattle the establishment. He built the company anyway. As CEO, he has propelled Aereo's rapid expansion into 11 cities, attracting nearly $100 million in funding in the process. For most of Aereo's three-year lifespan, the little, 115-person company has been under legal assault by the same media titans that urged the Supreme Court to take up the case: Disney/ABC, CBS, NBC, and Fox, among others. The case is expected to yield a landmark decision not just for Aereo but also for the future of American television as we know it.

Since it first launched in New York City in 2012, Aereo has changed the way people watch TV. Its customers can watch about 30 channels of network programming on a computer or mobile device. It's a dream for cord cutters who miss sports games or the occasional morning show, and it isn't just for real-time viewing: Aereo uses the cloud for DVR-like storage. At about $10 a month, subscribing to Aereo is a fraction of the cost of a cable package from a major provider.

The establishment is fuming--and crying copyright foul--because Aereo doesn't pay a penny for the content it streams to customers. The crux of Aereo's legal arguments is: Why should we?

"We're perfectly within the law," Kanojia says. "We have been accused of overengineering our system purposefully to comply with the law. What's wrong with that?"

Aereo's innovative (or exploitative, depending on which side you're on) solution to bringing broadcast programming to the smaller screen involves taking the antenna out of the home. The company provides a tiny, half-inch antenna for each subscriber. Broadcasters call the fact that these mini antennas are located on rooftops rented by Aereo, rather than in American homes, a "loophole" in the law that Aereo is exploiting. The broadcasters claim the startup's method of streaming content amounts to an illegal "public performance" of the material.

Kanojia sees it differently. He and his investors--including Barry Diller, the mogul responsible for creating Fox Broadcasting--argue that simply because the ways television networks make their money have changed over the past few decades, it doesn't mean they get a "do-over" when someone builds a more efficient system. (The major networks have become increasingly dependent on fees paid by cable and satellite companies to carry their programming.)

The first lawsuit came four weeks after Aereo launched its service. More suits followed in other states. Most judges have sided with Aereo so far, but most recently, bad news came from Utah, where a federal appeals court upheld a U.S. District Court injunction against Aereo. The service went dark in its affected markets, Denver and Salt Lake City. When the networks petitioned the Supreme Court, Aereo's reaction was: Bring it on.

If it sounds a bit unhinged to risk the fate of the company on a single day in court, consider the alternative: litigating lawsuit after lawsuit in every new place Aereo launches. "We can't do death by a thousand cuts," says Kanojia. Now, he's in the unenviable position of pursuing the very decision that could instantly bring down his company. Remarkably, he's not outwardly rattled. "He's a steady hand on the tiller," says Aereo investor Dan Nova of Highland Capital Partners. "Very calm under pressure."

Kanojia, who grew up in Bhopal, India, learned early that life can change in an instant. When Kanojia was 10, his father suffered a heart attack that left him unable to work for years, crippling the family's finances. Kanojia says this informed his thinking, to always have a "Plan B and Plan C. And D."

Kanojia moved to the United States to study engineering in 1991. In 1995, around the time Netscape went public, he struck out on his own. "I had that star in my eye," says Kanojia, now a U.S. citizen. "Every punk who could write two lines of code was going to be the next Marc Andreessen or Bill Gates." His first company, Navic Networks, which developed technology that allowed cable companies to collect data on subscribers, sold to Microsoft in 2008 for a reported $250 million.

Venture capitalist Amish Jani made one of his first investments in Navic. Now managing director at FirstMark Capital, Jani says funding Aereo was a no-brainer. "He's incredibly motivated," Jani says. "Maybe it's the immigrant effect, but there's not a lazy bone in his body."

Kanojia and his team designed the antennas and engineered the hardware and software that make Aereo's service work. For most of Aereo's short life, it has had all the growth challenges of a typical startup: the iterating, the rapid hiring, the pressure of product launch after launch. And, well, that little litigation problem.

Legal experts have speculated that by taking up the case, the Supreme Court is raising an eyebrow at Aereo--and might be concerned that the broadcast networks are in danger. And the networks have a powerful slate of friends: Filing supporting briefs to the court are the National Football League, Major League Baseball, the Screen Actors Guild, and even the U.S. government.

It's natural to think that Aereo's Plan B might be an acquisition by a major cable company--or even one of the networks trying to shut it down. Sitting in a tiny conference room in Aereo's New York City office, Kanojia scoffs at the idea of accepting an acquisition offer at this point in the company's life: "I look at where we are now, and it's probably the first half of the first inning."

He'll soon know whether there are more innings in this particular game. I mention this, but Kanojia refuses to get riled up, or to acknowledge whether he does have another plan--a Plan C or Plan D--tucked away. Instead, he cracks a smile and leans back.

"To go from doodling on the back of a napkin three years ago to center stage in national policy and this level of consumer passion?" he says. "You couldn't write the script any better."

Categories: Small Business News

What to Do When Your Employees Tell You That You Suck

Inc Small Business - Thu, 04/17/2014 - 11:34am

When an employee has the courage to give you negative feedback, you need to accept it as a gift.

It's tough to receive negative feedback, but as a leader you must treat it as if it were a fine wine. Once the cork is out of the bottle, you need to identify its nuances and understand its valuable characteristics.

Roger Schwarz, an organizational psychologist and leadership consultant, says you must be open to listening to employees when they tell you things you're doing wrong. As uncomfortable as it may be to hear it, he says, the criticism is a "not-so-nicely wrapped" gift. "Effective leaders open these gifts, regardless of the wrapping, to learn what they are doing that's negatively affecting others on their team," he writes in the Harvard Business Review.

Schwarz, who is also the author of the book Smart Leaders, Smarter Teams: How You and Your Team Get Unstuck to Get Results, says the worst thing you can do is to dismiss the feedback or ignore it. Instead, take the opportunity to learn something valuable and improve your leadership skills. Here are his tips on how to do that.

Realize you feel threatened.

Schwarz says when an employee says something negative about your leadership, you'll immediately get defensive. But before you respond, recognize these feelings. "Notice when people say things that lead you to feel upset, surprised, or threatened," he writes. "When you feel this way, there is a good chance that you've just been given a gift that's poorly wrapped."

Find the gold.

It may not feel good, but there's a valuable lesson behind the criticism. The employee may be blunt or inelegant, but the delivery is unimportant. "When you focus on how the gift was delivered, it's easy to dismiss it as off-topic, ungrateful, or whiny," Schwarz writes. "But rejecting a gift doesn't make the underlying issue go away; it just prevents you from becoming aware of it and being able to address it. There is a Talmudic saying, 'Who is wise? He who learns from everyone.' Suspend your judgment about the wrapping, and focus on your opportunity for learning."

Be curious.

When it's time for you to talk, your response should elicit more explanation. Get to the root of the complaint and try to find out more. "This leads you to open the gift by saying something like, 'I thought I was fully supporting you, but it sounds like I wasn't. What was I doing--or not doing--that you thought wasn't supportive?' When you respond with curiosity and compassion, you learn things that people were previously unwilling to discuss with you," Schwarz writes. "Discussing these previously un-discussable issues enables you to solve problems that were previously unsolvable."

Foster trust.

If you follow these tips, you'll be giving a gift back to your employee. Accept the gift of criticism and be curious and compassionate--no one wants to work for Blake from Glengarry Glen Ross. "You are creating the trust needed to talk about things that really matter and that will lead to better results," Schwarz writes. "This type of gift is priceless."

Categories: Small Business News

Why Employees Quit Jobs Right After They've Started

Inc Small Business - Thu, 04/17/2014 - 10:12am

Even more employees leave before the end of their first year.

Forty percent of employees who left their jobs voluntarily in 2013 did so within six months of starting in the position, according to data recorded and processed by the work-force insights arm of credit-reporting agency Equifax.

And another 16 percent of all employees who left on their own choosing did so within 12 months, meaning more than half of voluntary turnover happens within a year of new hires' start dates.

Equifax Workforce Solutions director of product Kristen Lewis tells Inc. that many employees approach new jobs with the belief that "they can find something else if it's not a great fit right away."

The rate at which employees left inside of six months was about twice as high for employees paid hourly than those who pocket a salary.

However, Lewis says, that doesn't necessarily mean finance was a driving factor of employee movement. Only a slight majority of employees who left voluntarily did so for greater pay, with 44 percent staying even or taking a pay cut to switch positions. "It supports the concept that culture and opportunity play a big role," Lewis says.

A cut in hours for hourly employees, meanwhile, makes a big difference in when they'll eye the door. Lewis said Equifax's data shows that for every four hours cut from an employee's schedule, there's a corresponding 5 percent jump in the likelihood he or she will take a new gig.

The idea that fast voluntary turnover--that is, turnover after less than a year on the job--is higher for hourly employees might call to mind transient industries such as retail and restaurant work, the kind of job that's dominated by hourly work. And indeed, more than 64 percent of new hires in retail and about 66 percent of those in leisure left in that time frame.

Likewise, the business services industry--largely composed of temporary staffing--sees 65.7 percent of new employees move on within a year.

However, even though the numbers are lower, they still might surprise you in other, more stable industries.

More than half of voluntary turnover in the transportation industry happened in less than a year. In the information industry, that number is about 43 percent. In financial services, 37.5 percent. In health care, nearly 37 percent.

And across all industries, employees are more likely to leave voluntarily inside of their first six months than in months six through 12.

Voluntary turnover in general was up 3.5 percent in 2013, according to Equifax. The Department of Labor has also seen a recent increase in the "quit" rate, according to the The Wall Street Journal.

Voluntary turnover is generally lauded as a positive sign for the economy, indicating that enough jobs are out there to allow employees to hop around the market. And many companies embrace the idea of being net exporters of talents, as a positive sign of their ability to nurture talent.

But even with those optimistic qualifiers, you would probably like to get at least a little bit more than a year out of your new hires.

So you might want to check out Inc. columnist and HR expert Suzanne Lucas's pointers for keeping turnover low.

Categories: Small Business News

Ahead of Supreme Court Hearing, Aereo Makes Its Case

Inc Small Business - Thu, 04/17/2014 - 9:58am

Leading up to oral arguments before the U.S. Supreme Court, the scrappy company that brought broadcast channels to computers through the cloud, explains itself.

As the days tick down before Aereo presents its case to the U.S. Supreme Court, the company is going on the PR offensive.

On Apr. 17, the New York City-based startup launched ProtectMyAntenna.org to inform users about the tech behind the company's Internet-TV streaming. It reads: "Aereo's technology provides a consumer the ability to use a remotely located individual antenna to access free-to-air broadcasts, make a personal copy of a program on a remote DVR, and play back that copy only to him or herself. Using the cloud, Aereo was able to develop a smarter, more sophisticated antenna, purpose-built for the 21st century consumer."

High Stakes

The case before the U.S. Supreme Court on April 22, American Broadcasting Companies, Inc. v. Aereo, Inc., is expected to yield a decision that's fateful not just for the existence of this scrappy, 115-person company but also for the future of America's broadcast airwaves--and possibly for cloud computing, too. The broadcasters argue that Aereo's act of streaming content through the cloud constitutes an act of "public performance" of copyrighted material. It's natural to wonder: What else do we access through the cloud that could be affected by this ruling?

Not only are the stakes high leading into Tuesday's arguments and the following deliberations, but the decision is highly uncertain. As Jonathan Handel wrote Apr. 15 in The Hollywood Reporter: "The case is so complex and the copyright and communications statutes so intricate that one advocate said the decision could end up as lopsided as 7-1--in either direction."

There was concern that the Court's decision could be locked in a 4-4 tie, because Justice Samuel Alito had recused himself from participating, possibly due to he or his family owning stock in a litigant. But this week in a surprise move, he reversed that, and his renewed participation is listed on the case's public docket as of Apr. 16.

You can read more of Aereo's argument here.

And here's the brief filed by the broadcast establishment, including ABC, CBS, NBC, and Fox, among others.

Check out Scotusblog for more documents, including amici briefs, as well as the briefs of the petitioner and respondent.

Also this week, Aereo gave TechCrunch a look at its rooftop antenna farm in Boston. It's not much to see from the outside, as the thousands of tiny antennas and their antenna boards, and the shelving units that hold them, are all encased in a 10-foot-wide beige plastic box. Yes, it's not even translucent, but the signals can travel through it.

I spent a lot of time with Aereo CEO and founder Chet Kanojia while reporting a feature on the company that will appear in the May issue of Inc. magazine. We'll publish that piece online shortly, so stay tuned.

Update: Here's the feature, "This Startup Is Shaking TV Networks--All the Way to the Supreme Court."

Categories: Small Business News

Behind the Scenes: What Drives Successful Sales Teams (Infographic)

Inc Small Business - Thu, 04/17/2014 - 9:54am

Here's how you can help your team sell smarter.

If you have trouble keeping up with the latest tools and strategies your sales team should have in its arsenal, you're not alone. On behalf of software corporation SAP, Column Five created the below infographic, a roundup of the best ways you can help your inside sales team optimize its efforts.

Categories: Small Business News

How Neil Young Won Kickstarter

Inc Small Business - Thu, 04/17/2014 - 9:50am

The rock legend's PonoPlayer portable music device raised $6.2 million, becoming one of the most successful campaigns ever on the crowdfunding website.

Neil Young is on a mission to rescue the art of recorded sound, and thanks to his recent Kickstarter effort, he might pull it off. His widely publicized campaign for the Pono music player, a portable device that aims to deliver sound as rich as your grandfather's vinyl, generated $6.2 million in pledges on the crowdfunding site--no small feat for a startup helmed by a guy known far better for his songwriting ability than his business prowess.

But there it is, plain as the Guardian headline that announced the news Wednesday: Neil Young's Pono is the third most-successful Kickstarter campaign ever in terms of money raised, trumped only by the Pebble smartwatch ($10.3 million) and the Ouya game console ($8.6 million).

How did the startup, which PonoMusic CEO John Hamm once dubbed one of the "worst-kept secrets in the world," thanks to a reveal on David Letterman's Late Show, take Kickstarter by storm? With star power, obviously. But more than that, it took an entrepreneurial mindset.

The Startup That Wasn't

The story goes that Young heard his songs on a CD for the first time in 1982, around the time the discs were first coming to market. He was disappointed at how bad they sounded; he didn't hear the plainspoken folk songs he'd played, but something much flatter and more condensed. The sound lacked the soul of his music.

As he told Mashable, he grew even more disheartened as the industry shifted to MP3 downloads and streaming music and the fidelity worsened. Meanwhile, Apple's iPhone was quickly becoming the go-to music-listening device and no one seemed to notice the problem.

"People started buying their music through their devices, and the fact that you could get so many songs on the device had a blinding effect on consumers. They realized, 'Whoa, I can get all these songs; it's so great.'" Young told Inc. in an interview earlier this month. "After a while, it dawned on them that the music was slightly compromised. Some of the depth was lost."

By the early 2000s, Young believed there was a business opportunity to restoring quality sound. He began to tinker with the project that would eventually become the three-sided PonoPlayer (pono means "righteous" in Hawaiian) and gathered a board of advisers to help. Young even met with Steve Jobs, but says he found the late Apple founder more interested in his iPod than with recreating authentic sound.

A couple of CEOs came and went on the project without fanfare. Then in October 2012, Young's fledgling Santa Monica startup, then called Ivanhoe, raised $500,000 from an undisclosed investing group, solidifying PonoPlayer's potential as a hardware disrupter. Young also put his extensive Rolodex to use, tapping friends such as John Tyson of Tyson Foods for angel investments. Soon Ayre Acoustics was on board to help manufacture the device, and Pono began to truly take shape.

The company "got a lot done on that money; we built a prototype player and got our music label contracts done," Hamm told Inc. in a recent interview. But in many respects, the company was at the point "where Neil needed to make something of it." Hamm joined the company after becoming acquainted with Young through a board member. But it would take time--and many failed prototypes--before either Hamm or Young felt satisfied.

At one point, Hamm says, "we had to stop and start the player design," as well as adjust plans for Pono's online marketplace, which will function much like iTunes but with a broader array of studio master-quality recordings. (It's set to launch sometime this year.) "We wasted a little bit of engineering time, rewrote the firmware," Hamm continues. But overall, "we kept evolving, figuring out ways to make it better."

Today, Pono is a full-fledged business with a product, a vision, and as Young puts it, soul. The device has 128 gigabytes of memory (good for storing from 1,000 to 2,000 digital albums), comes in black or mustard color, and retails for $399. And of course, as listeners attest, it sounds really good.

A Star-Studded Kickstarter

"That's the best sound I've ever heard in a car ever in my life; as a matter of fact, it might be some of the best sound I've ever heard," David Crosby says in the Kickstarter video as he exits Young's boat-size Cadillac Eldorado. "It's starting to sound like an amazing, warm, dynamic analog recording," says a beaming Chris Robinson, the Black Crowes's frontman, at a concert. "It's vinyl quality," says a young music fan. Chimes in another: "Yeah, it's a lot different than, like, a regular iPod. It sounds like I'm actually there."

On March 15, Young began taking discounted preorders for the music player on Kickstarter. Within a day, it reached its $800,000 funding goal, powered by the celebrity-filled video. The wow factor the artists project when describing the PonoPlayer's sound also proved effective--so many of them seem so astonished by what they've just heard that you can't help yearning for that feeling.

Perhaps the best testimonial of all comes from Dave Grohl of the Foo Fighters, who hops in Young's car for a listening session. On rotation: Aretha Franklin's "Respect." The car windows rattle and the bass is insistent, turning the vehicle into a concert on wheels. "You could definitely hear that it's not as compressed so that music can open up a little bit wider," Grohl says later while lounging in his tour trailer. He stretches his arms to convey what what he means: This sound is really huge.

"There are a lot of people who miss music," Young said of the Kickstarter success. "They miss hearing it and feeling it. There's a magic in music that's missing when you take away 95 percent of the data. That's what an MP3 is."

Vickie Nauman, the North American president of 7digital, a digital music distributor, offered a different take. "First and foremost, Neil Young is very authentic, and people respond well to authenticity," Nauman says. "It's rare these days. Second, the Pono story of 'hearing music as the artists intended it to be heard' brings the artist back into the dialogue, and fans care about the artist. And finally, the message about higher-quality audio is also timely--music fans are demanding better-sounding audio."

The third point may be what sets Pono apart from other music startups, even those like Beats that use sound quality as a selling point. "Beats is basically an earphone with a bass boost in it," Young says. "It gives you that fat sound, and it's a good sound. But you can plug into Pono through a Beats set of headphones. You can play Pono through anything. Pono is music that you buy. Beats is a pair of headphones and a streaming service."

Not that Young is averse to a little competition: "We will [make] whatever set of headphones you want to see," he says. "The better the headphone, the better the Pono is going to sound."

Whether delivering superior sound will attract a critical mass of customers remains an open question. "Convenience trumps quality," James McQuivey, VP and principal analyst with Forrester Research, tells Mashable. "It's why MP3 works. It's why streaming works." At nearly $400 for the hardware (song and album prices have yet to be determined), Pono may remain a niche business that caters mainly to die-hard music fans. But it could still be a very lucrative one.

Categories: Small Business News

What Makes the Best Logos So Good

Inc Small Business - Thu, 04/17/2014 - 9:06am

An expert weighs in on the elements that separate a great brand emblem from a forgettable one.

Every day consumers are confronted with countless logos but remain mostly unaware of how these icons are constantly transmitting a slew of messages aimed at the subconscious.

"A company's logo is its shorthand, a visual cue that tells a story of the brand's culture, behavior, and values," said Su Mathews Hale, a senior partner at the New York brand-strategy and design firm Lippincott. Because a logo may only have a second to tell this story, creating one "can sometimes be the most difficult aspect of branding," she says.

We had her guide us through some of her favorite projects she's worked on, as well as some of the corporate logos she most admires.

Walmart Stores

In 2005, Wal-Mart, as the company then styled itself, recruited Lippincott to reimagine its brand. It wanted to shed its image as a big corporate outlet for cheap products and become seen as a place where people could wisely save money and buy premium groceries. The corporation debuted its new logo in 2008.

Mathews Hale and her team felt that the old logo's all-caps, dark blue letters screamed "corporation" and had become inextricably linked to the popular view of critics who saw Wal-Mart as a malevolent giant crushing small businesses across the country. They deemed the star that served as a hyphen in its logo generic and forgettable. They also believed that businesses with hyphenated "mart" names conjured up images of corner stores and cheap outlets, hence the new styling, Walmart.

They decided to keep the color blue, which Mathews Hale calls the world's favorite color, but to go for a brighter hue they believe evokes modernity and trustworthiness. They replaced the sharp angles of the original letters with "a more humanistic font." Finally, they decided on an asterisk-like symbol that looks like "a light bulb going off in your head," a metaphor for Walmart shoppers being smart for taking advantage of affordable, quality products. They chose a hue of yellow that appears hopeful but didn't make it too bright because "bright yellow is associated with low-cost items in retail," says Mathews Hale. She was happy to find that focus groups also interpreted the spark as a sun or flower, both positive associations.

eBay

In 2012, eBay basically had the inverse problem from Walmart: It wanted to finally grow up, and its playful logo was getting in the way of its ambition. Mathews Hale says that when Internet companies have electric, jumbled logos, they conjure up memories of the companies that died when the dot-com bubble burst. So for eBay, she and her team stuck close to the original design but refined the typography, toned down the colors, and put the letters on the same baseline. The resulting logo is "more grounded" and better suited for a company that takes business seriously, Mathews Hale says.

Hyatt Place

Hyatt Hotels Corporation bought AmeriSuites in 2004, and Lippincott was responsible for rebranding the chain as Hyatt Place, which launched in 2006. Hyatt and the designers believed that AmeriSuite's affordable business-suite market was beginning to be seen as a boring, cheap alternative to upscale hotels. The way to turn that perception around, the company believed, was to make the suites seem like a good option for younger business travelers who may not be very wealthy but who still appreciate luxury.

A fundamental component of the relaunch was to give every Hyatt Place an attractive, engaging lobby. The final logo combined two different shapes: In design, says Mathews Hale, "a circle tends to be seen as modern and approachable" and "a square tends to be steadfast and disciplined." The design team chose vibrant colors for seven of the circles and picked black for two. When Hyatt Place signs are illuminated at night, the colored circles create an "H" for "Hyatt," which Mathews Hale finds to be a fun, extra dimension of the logo.

Starbucks

Over the past several years, Starbucks has grown into a global powerhouse and has been heavily promoting its non-coffee products, such as pastries, sandwiches, and teas. In 2011, it decided it wanted a simpler logo not tied to the word "coffee." Mathews Hale wasn't involved in the project, but her Lippincott colleagues were.

The redesign started with a basic premise. When focus groups were asked what color Starbucks' logo was, explains Mathews Hale, participants almost universally said "green." But the thing is, only the ring around the former logo was green--the siren character was outlined in black. Mathews Hale says the designers freed the siren from her constraints and imbued her with the color with which customers were already associating the brand. They nixed the word "coffee" and brought the text outside of the circle, since the siren had become iconic enough to stand on her own.

"It's a great example of how a logo can evolve," says Mathews Hale.

NBC

Lippincott hasn't worked with NBC, but Mathews Hale says the NBC peacock is one of her favorite logos. She thinks the logo has improved and grown simpler over time, and that even though the peacock's colors originally celebrated the advent of color television, the array still transmits feelings of joy and energy.

FedEx

FedEx's logo is another one of Mathews Hale's favorites. As shown by her work with the Hyatt Place logo, she likes images that have surprises in them, and the arrow formed by the "E" and "x" in FedEx is one of the best-known examples. She also appreciates the timeless nature of the logo. "It could have been designed in 1970 or it could have been designed yesterday," she says.

It was actually created in 1994 by Lindon Leader, and it has won more than 40 design awards, partially for the reasons Mathews Hale mentions.

Apple

Mathews Hale thinks Apple's emblem is a perfect example of how a logo needs to adapt to the changing direction of the company it represents. One of Apple's co-founders, Ronald Wayne, designed the first Apple logo, a weird, detailed etching of Sir Isaac Newton that was supposed to represent Apple as an ambitious outsider. That same year, Steve Jobs hired Rob Janoff to replace that image with something more modern. Janoff came up with the now iconic image of an apple with a bite out of it, and Jobs decided Apple's unique approach to computers would be represented by making the apple rainbow-colored.

It became monochrome in 1998 to fit into the clean, simplistic designs that the company decided to pursue.

Regarding trends and presentation

When tackling a branding project, Mathews Hale differentiates between the "true and new." She says a logo needs to be "true," in the sense that it should not be fundamentally tied to a trend, or the "new." The trendiness is more appropriate in supporting elements of branding, like store experiences or website interfaces. That said, a logo should be fundamentally sound but also be adaptable to the ways it will be presented.

"Logos used to have to be recognizable down to the size that they would be represented on a business card. Now they have to work at much smaller sizes, because they'll be seen on mobile screens," Mathews Hale says. That's actually the reason why so many logos have become "flatter," in the sense that they've been stripped of techniques such as shadowing that add a dimension of depth or movement.

Here's an example of how Google went flat last year:

"I personally like more simple designs," says Mathews Hale. "Gradients are my worst nightmare."

Categories: Small Business News

Is the Family Business a Recipe for Disaster?

Inc Small Business - Thu, 04/17/2014 - 8:41am

Kids make mistakes. Parents won't let go. Everyone suffers.

"What's wrong with family business? The family."

So says New Hampshire attorney John Hughes, who frequently counsels clients on succession planning. John tells me he has seen "way more failures" than successes when it comes to bringing children into a business. Paul Karofsky, a family business consultant, puts it even more bluntly. A dysfunctional family enterprise, he cautions, "is like no other hell on earth."

Given the poor odds of a successful transition to the younger generation, why would any company owner consider it? Well, most entrepreneurs spend their lives nurturing two things: their companies and their kids. So it's natural to want to pass one down to the other. On the practical side, family companies are ideal vehicles for transferring knowledge and experience to offspring. They provide welcome employment and leadership opportunities and can act like domestic magnets, pulling family members together. And, of course, there's great pride in perpetuating a family brand.

For most families, the process of transitioning to the younger generation is a mixed bag. Gloria and Dave Sharrar founded Richmond, Virginia-based CityParking in 2004. Two years ago the Sharrars' son (who shares his father's name but goes by David), took over as CEO, and Dave transitioned to chairman. David's sister, Katie, also works in the business. Together, the siblings own 40 percent of the company, with plans for their shares to increase.

Gloria, who is retired from CityParking, says that Dave "has evolved from CEO to Guardian--of his kids and of the business he founded." Dave tries not to meddle in operations, Gloria says, but "sometimes he'll just walk in on the kids, and ask how they're handling this or that. The kids will say, 'Dad, you don't need to be engaged in this.' But it's hard for Dave to let go."

And for good reason. The "kids" are unseasoned and still make mistakes. "Your children will do nothing but reassure you that they're ready and can do the job," Gloria says. But certain things at CityParking fell through the cracks, and some critical client relationships became strained. Gloria takes the long view and reminds Dave that mistakes are opportunities to learn. But she blames both her husband and herself for overestimating their children's readiness to take the helm when they did.

And no wonder. Business demands something not normally required of parents: an objective assessment of their kids' strengths and weaknesses. Family succession only works when offspring are competent leaders who are passionate about their work. Consultant Karofsky says entrepreneurs must make a decision: Does the family serve the business or does the business serve the family? If parents take the attitude that blood is thicker than ability when choosing a successor, chances are the business won't be around long enough to serve anybody.

Luckily for the Sharrar family, this isn't the case. The next generation may be making its share of mistakes, but Gloria says that overall they're doing a good job of steering the growing company. Both kids now have healthy incomes for their families and are proud to be recognized in the community as good business leaders.

For Gloria's part, she's glad to be out of the company. "My conversations with my kids are more personal now," she tells me. "Being in business with your children adds a layer of tension and decision making that can diffuse the fundamental love and caring of the parent-child relationship. Over a long period of time, it creates an undercurrent that can become an undertow."

Anyone with a family business should hire an attorney to help with estate planning and recruit an outsider who can mediate and advise--as well as make clear-headed evaluations of the capabilities of the next generation. That's a role Gloria no longer feels comfortable playing. "I just want to be a Mom and a grandmother," she says. "I don't want to have to assess my own children."

Categories: Small Business News

The Only Way to Get Really, Really Rich

Inc Small Business - Thu, 04/17/2014 - 8:00am

No matter how you define rich, this is the only way to get there.

Want to be remarkably successful? Want to get really rich? (While there are many ways to feel "rich," in this case we're talking about monetary wealth.) Then check out this little gem of an investment opportunity.

It's a simple investment. You only have to invest almost all of your money. On the upside, after a year you might earn 3 percent more. The downside? Any day you could lose it all, for reasons usually outside your control and that you will almost never see coming.

Would you make that investment? Of course not.

Yet millions of people do--every day they go to work for someone else.

Of course the analogy isn't perfect. Until you're laid off or fired you do earn a salary. But when you work for someone else, your upside is always capped--sure, you might occasionally get a raise, but in most cases 3 to 4 percent is the best you can expect.

Yet your downside is always unlimited because getting fired or laid off can make your income disappear overnight--and with it the considerable investments you've made in time, effort, dedication, and sacrifice.

Extremely limited upside. Unlimited downside.

That's a terrible investment.

Rich in Wealth

So if you hope to get really rich, working for someone else will never get you there. But don't just take my word for it, the government agrees.

The IRS Statistics of Income Division, a place where fun surely goes to die, has published "400 Individual Tax Returns Reporting the Largest Adjusted Gross Incomes Each Year, 1992-2009," or in non government-speak, "400 People Who Earned a Freaking Boatload of Money."

In 2009, it took $77.4 million in adjusted gross income to crack the top 400. (That just barely got you in; the average income of everyone on the list was $202.4 million.)

Where it gets interesting is how the top 400 made their money:

  • Wages and salaries: 8.6 percent
  • Interest: 6.6 percent
  • Dividends: 13 percent
  • Partnerships and corporations: 19.9 percent
  • Capital gains: 45.8 percent

A few conclusions are obvious:

  • Working for a salary won't make you really rich.
  • Making only safe "income" investments won't make you really rich.
  • Investing only in stock of large companies won't make you really rich.
  • Owning a business or businesses could not only build a solid foundation of wealth but could someday...
  • Generate a huge financial windfall--and make you really rich.

Don't trust the IRS? Fine. Check out the top 10 on the Forbes billionaires list. Gates. Buffett. Ellison. Koch. Walton. Adelson. All entrepreneurs. (I worked my way down into the 200s and still couldn't find an employee, so I got bored and stopped looking.)

Clearly getting really rich in financial terms is the result of investing in yourself and others, of taking risks, of doing hundreds of small things right...and then doing one or two big things really right.

But what if you don't get one or two big things really right? There's another way to get really rich.

Rich in Life

I've spoken to hundreds of entrepreneurs, and each and every one does the same thing. When we talk about the financial side of being an entrepreneur--exit strategies, revenues, IPOs, cashing out--they're interested but far from animated.

But when we talk about the life of an entrepreneur, about how it feels to be an entrepreneur, they all light up. They start to gush about the challenges, the responsibility, the sense of mission, the sense of purpose, the sense of fulfillment and excitement of working with and for a real team, the amazing feelings of empowerment and the control over their own destinies....

It happens every time.

The bootstrappers with infinite dreams and negligible revenues light up.

The successful entrepreneurs such as Joel Gascoigne, who helped expand Buffer from a personal project into a business with a talented team with real revenues, light up.

The hugely successful entrepreneurs such as Scott Dorsey, who helped steer ExactTarget out of a garage, into an IPO, and then into an acquisition by SalesForce.com, light up.

Every entrepreneur lights up when we talk about being an entrepreneur because they feel alive: free to chart their own courses, to make their own decisions, to make their own mistakes--to let the sky be the limit not just financially but also (and almost always more importantly) personally, too.

And in that way, regardless of financial return, they feel really rich. And they are really rich -- regardless of income or wealth.

Really, Really Rich

That's why the only way to become really rich financially and really rich personally--in other words really, really rich--is to start your own business. Even if it's just on the side. Even if it's just a slightly stepped-up hobby.

There's no reason not to. You don't have to quit your job right away; in fact, you probably shouldn't. (One of the best ways to minimize your risk is to keep your full-time job while you build your foundation for success.) Plus the basics of starting a business are easy; you can do it in one day.

Here's the deal. In return for less freedom, less control, and less fulfillment, every day you go to work for someone else your upside is always capped and your downside is always unlimited.

The downside for entrepreneurs is also unlimited--but in return, they enjoy the possibility of an unlimited financial upside and an unlimited personal upside.

Take a chance on yourself. Try to get really, really rich. Maybe you'll only become really rich.

One out of two is still awesome--and you will have achieved it on your terms.

If your friends and family think you were crazy for starting a business, show them this article. If you've been thinking about starting a business and people say you're being foolish, show them this article.

If the people around you don't understand how personally fulfilling taking a chance on yourself can be, have them check this out.

And then get started on your entrepreneurial journey, even in the smallest and safest way. Every step you take will bring you closer to becoming at the very least really rich--and maybe, just maybe, really, really rich--and will let you join a group of people who live their lives their way, on their own terms.

Who are those people?

Entrepreneurs. Be one.

It's the best investment you can make--because it means you're investing in yourself.

Categories: Small Business News

Innovation Is an Attitude

Inc Small Business - Thu, 04/17/2014 - 8:00am

True innovation has nothing to do with your company's size or industry. It's a way of thinking. Here are three ways to make sure you're on the right track.

You might think that the business world is split between two camps: companies that innovate and those that don't. And you'd probably be right. However, is the divide between the successful behemoths and the barbarian entrepreneurs pounding at the gates? Not at all.

Successful innovation is a matter of attitude and practice, not of size. There is nothing sacred about being an entrepreneur--many will fumble around without hitting a spark of genius. Large companies? Some manage to keep churning out new products and technologies on a regular basis.

Eric Ries, author of The Lean Startup, has an interesting view. In an interview with McKinsey & Company, he explains how tech startups successfully challenge incumbents. Though some of the mechanics apply specifically to that industry, the places where incumbents fall down are a matter of attitude. They also aren't a simple matter of size.

In other words, there's a chance that you're leading a dinosaur. A little baby dinosaur, to be sure, but one as doomed to extinction as its brethren. Here are the basic problems exhibited by companies that will ultimately lose, no matter their size.

Are You Relying on the Old Answers?

In high tech, it's now possible for a "kid with a credit card--with a $1,000 budget"--to create something that, to a consumer's eye, looks like the polished mature product of large competitors, notes Ries. That's an industry dynamic, to be sure, but it doesn't mean other industries escape the fate.

Everything is running on computers. You can model problems and solve them on computers. Computers can run inbound sales and make a company look big and sophisticated. In addition, service providers run on computers. Want someone to provide fulfillment for your products? Amazon has it down pat, all riding on computation that helps make things affordable. Need to manage a more complicated sales process? There's Salesforce.

So, large technology companies not only face direct competition, but those in areas other than high tech might find competitors using sophisticated simulation, automation, and communications to grind down the barriers to competition.

Now, realize that none of this is restricted to a large versus small view of the world. Ries said, "And so you're not dealing with one potential competitor but with thousands or millions." But the same is true for a small company. Are you up to the level of innovation necessary when everyone in the world is out to eat your lunch?

Are Your Failures Productive?

Businesspeople, whether entrepreneurs or the heads of legacy corporations, don't like to fail. That's a shame, because you don't get anywhere without failure. Failing is the reconciling force in this great laboratory of life. You try something, it doesn't work, and you go on to something else.

Only, as the great Samuel Beckett once wrote: "All of old. Nothing else ever. Ever tried. Ever failed. No matter. Try again. Fail again. Fail better."

Failure is scary, but it's necessary because without it you can't progress. Just make sure you--and the people who work for you--learn from all those mistakes. Your company's culture must welcome failure, even though it can be enormously scary. If a big company slips up, no one may notice it. If you lose a big gamble, it could be the end of your company.

But there is no other approach that can work. Make productive failure part of your corporate culture, even making its smart existence one of the ways you judge employees (and yourself).

Are You Keeping Your Head Above Ground?

When it comes to competition and innovation, the absolutely worst thing to do is to bury your head in the sand. You might not want to hear about all the dangers, or consider the amount of hard work success will take, but it's the only way.

Be ready to face reality, and make sure your employees understand that it's the only thing you want to hear. Any size company can be willfully blind. Make sure it doesn't happen to you.

Categories: Small Business News

4 Ways to Make the Most of a Business Opportunity

Inc Small Business - Thu, 04/17/2014 - 7:30am

Listen carefully: Sometimes the best opportunities knock softly at your door.

Opportunity has a way of making a soft tap-tap on your door. Smart entrepreneurs listen for these signals--they have ears specifically attuned to the sound.

A recent book called Opportunity Knocking: Lessons From Business Leaders, by CNBC senior talent producer Lori Ann LaRocco, focuses on the sound of these opportunities--from how to take advantage of a burgeoning industry to how to take on a challenge that's bigger than just one company. I recently caught up with LaRocco, and she explained four ways to make the most of any opportunity.

1. Ride the wave of a challenger.

One of the most interesting points LaRocco makes is that many small companies ride on the coattails of other companies as a way to grow quickly. She says one of her favorite examples is from Anthony Wood, the founder of Roku.

"Roku continues to blaze a trail with its legion of consumers and is laying the groundwork to becoming an operating system for television," she says. "For six years, they have been competing with Apple TV, and they continue to grow despite Apple's constant versions of their system." Wood told her that Roku sales doubled when Apple TV launched.

2. Turn big setbacks into big wins.

Another favorite example, she told me, has to do with Uber, the popular ride-sharing service. Anyone following the peer-to-peer car-sharing service knows there have been constant legal challenges, especially from taxicab unions. LaRocco says Uber learned how to turn a setback into a win. When the D.C. Taxicab Commission added a snow emergency fee of $15, Uber didn't raise its rates in response--it might have seemed like an opportunity to increase revenue. Instead, the company pounced on the opportunity and kept rates the same to attract new customers away from its legal challenger. "If the taxi unions want to be competitive, they have to think like a business providing service rather than a cartel holding consumers hostage," says LaRocco.

3. Turn down opportunities that don't match your strengths.

There's a reason Apple became so successful early on--the company focused on engineering prowess and marketing savvy. However, Apple didn't take on IBM and Microsoft in the realm of business process or enterprise software. LaRocco says successful companies need to do the same thing today. Growth happens when a company emphasizes a strength and skips opportunities that exploit a weakness.

"Not all opportunities are created equal," she says. "You have to run each opportunity against your checklist of what your mission statement is, and assess the lay of the land and see what you can do differently."

4. Always weigh the risks.

Every opportunity has an associated risk--it might stretch your staff or your financial resources--but any new partnership, product, or even a big sales opportunity can cause stress on operations and your customer service. LaRocco says one example of how to weigh the risks comes from Ford Motor Company's CEO Alan Mulally. There's a chapter in her book dedicated to how Mulally met the challenge (and risk) of financial insecurity during the 2008 economic meltdown. Mulally knew the risks were great in going to Washington during that time and taking on Congress. He was advocating for an entire industry, not just for his company. Yet, the eventual outcome--not taking any bailout money--meant Ford came out of the meltdown relatively unscathed. "When you are at the crossroads of deciding on an opportunity, you have to weigh the risks," says LaRocco.­ "If the risk of not doing it outweighs the risk of doing it, you have your answer."

Categories: Small Business News

14 Surprising Things That Affect Your Willpower and Decision Making

Inc Small Business - Thu, 04/17/2014 - 7:15am

How to keep your choices under your control.

President Obama only wears blue or gray suits.

As he tells Vanity Fair, it's a way of managing his willpower.

"I'm trying to pare down decisions," he says. "I don't want to make decisions about what I'm eating or wearing. Because I have too many other decisions to make."

Obama's focus on routine is backed up by research. Social psychologist Roy Baumeister has found that willpower is like a muscle--it can be strengthened or fatigued with use.

It's a crucial insight, given that a 2011 study of 1 million people around the world found that people think that lack of self-control is their biggest weakness or character failure.

As Baumeister details in his book Willpower: The Greatest Human Strength and a New York Times Magazine cover story, willpower and decision making are interconnected. The house you grew up in, the number of decisions you made today, and what your friends are doing, all affect your decisions in weird ways. Here's a look at how.

Make your most important decisions in the morning, before you experience "ego depletion."

"Freud speculated that the self, or ego, depended on mental activities involving the transfer of energy," the New York Times reports. "[His] experiments demonstrated that there is a finite store of mental energy for exerting self-control."

As the day wears on, your energy reserves are further depleted.

Your brain needs glucose in order to make good decisions.

"Even the wisest people won't make good choices when they're not rested and their glucose is low," Baumeister tells the Times. "That's why the truly wise don't restructure the company at 4 p.m. They don't make major commitments during the cocktail hour. And if a decision must be made late in the day, they know not to do it on an empty stomach."

Grocery retailers discovered this decades ago. Researchers found that, "just when shoppers are depleted after all their decisions in the aisles--with their willpower reduced, they're more likely to yield to any kind of temptation, but they're especially vulnerable to candy and soda and anything else offering a quick hit of sugar."

Our finite supply of "decision making power" means that making a series of decisions can be exhausting.

Which would explain why shopping is so tiring.

Researchers found that shoppers who "had already made the most decisions in the stores gave up the quickest" on a math test.

Once you're mentally depleted, you're more likely to make bad decisions.

"To compromise is a complex human ability and therefore one of the first to decline when willpower is depleted," reports the Times.

At the end of the day, when we're more physically and mentally fatigued, we're more likely to skip the gym after work or drink more during happy hour.

Developing routines helps you eliminate stress and conserve energy for important decisions.

"The most successful people, Baumeister and his colleagues have found, don’t use their willpower as a last-ditch defense to stop themselves from disaster," the Times reports.

"Rather, they conserve willpower by developing effective habits and routines in school and at work so that they reduce the amount of stress in their lives. They use their self-control not to get through crises but to avoid them. They give themselves enough time to finish a project; they take the car to the shop before it breaks down."

If you want more willpower, get better sleep.

Studies equate sleep deprivation--getting less than six hours a night--with being drunk. As Stanford health psychologist Kelly McGonigal says, sleep deprivation messes with the prefrontal cortex, a region of the brain associated with decision making.

When you're sleep deprived, "the prefrontal cortex is especially hard hit and it loses control over the regions of the brain that create cravings and the stress response," she says. "Unchecked, the brain overreacts to ordinary, everyday stress and temptation."

Your unconscious plays a key role in helping you make good decisions.

President Obama's decision to "sleep on it"--with "it" being whether or not to raid Osama Bin Laden's compound--aligns with psychologists' recommendations for complex decision making.

"Because your conscious attention is limited, you should enlist the help of your unconscious," according to the Harvard Business Review.

Even if you don't have the option to delay your decision for long, engaging in another activity will take your mind off your dilemma and allow your unconscious to surface.

Your decisions are shaped by your friends and family.

Breakthroughs in network science--the study of social groups--have revealed how many things we tend to think of as being individual, like whether you get fat or stop smoking, are actually collective.

As James Fowler of the University of California, San Diego, and Nick Christakis of Harvard Medical School have found, our behaviors are contagious. If your best friend becomes obese, you have a 57 percent greater chance of growing obese too. If a close colleague quits smoking, you have a 34 percent greater change of quitting smoking, too.

Sometimes, it's best to run your ideas by others.

Network science has insights into productivity, too.

When researchers tracked the successes of individuals at an aerospace company, including patents and products those individuals brought to market, they found that who a given engineer knew was tremendously important.

After experience, the relationships that an individual had were the greatest predictor of success. The people who had relationships up and down hierarchy and across departments were the most likely to succeed by the company's metrics.

Why? Because when you have quality relationships with people, you can combine ideas, gather feedback, and earn buy-in for your projects--another reason that generous people succeed.

It can be valuable to cave in and say "yes" to the "wrong choices" once in a while.

Occasionally giving in to your desires can reinvigorate you, so you don't feel completely deprived all the time, according to the Times. It helps you stay on track for the long-term.

There's a reason why people celebrate Mardi Gras before the Lenten season.

If you make an obligation to someone, the decision gets easier.

Are there decisions you don't have to make right now, or you can have someone else make for you?

"Instead of deciding every morning whether or not to force themselves to exercise, [smart people] set up regular appointments to work out with a friend," reports the Times.

If you prepare for your moments of weakness, you'll be better able to make good decisions.

"Good decision making is not a trait of the person, in the sense that it’s always there," Baumeister says. "It’s a state that fluctuates," the Times reports:

His studies show that people with the best self-control are the ones who structure their lives so as to conserve willpower. They don’t schedule endless back-to-back meetings. They avoid temptations like all-you-can-eat buffets, and they establish habits that eliminate the mental effort of making choices.... Instead of counting on willpower to remain robust all day, they conserve it so that it’s available for emergencies and important decisions.

"The best decision makers are the ones," he says, "who know when not to trust themselves."

If you can exercise your willpower, studies suggest you're more likely to succeed.

In the famous 1972 Stanford marshmallow experiment, school children were asked to sit at a table with a marshmallow in front of them and not eat it--for an excruciating 15 minutes. They got a sweet pay off if they made it: a second marshmallow.

As has been widely reported, the students that could wait for the second treat had higher SAT scores and lower levels of substance abuse than their more impulsive friends.

But the waiting game might not be the whole story...

But sometimes what looks like weak willpower could be quality decision making.

If it looks like the opportunity to act might disappear, it can be better not to wait.

In 2012, University of Rochester researcher Celeste Kidd published a study that challenged that marshmallow experiment. When she was younger, Kidd spent time working for homeless shelters--she remembers wondering how growing up in such an unstable situation would affect decision making.

Those kids, she thought, would eat the marshmallow right away.

But not because they didn't have enough willpower. Rather, they grew up in situations where you they couldn't trust adults to follow through on their promises.

"Our results definitely temper the popular perception that marshmallow-like tasks are very powerful diagnostics for self-control capacity," Kidd said. "Delaying gratification is only the rational choice if the child believes a second marshmallow is likely to be delivered after a reasonably short delay."

In Kidd’s study, children were primed to think that researchers were either reliable or unreliable. In one part of the study, the experimenter gave the kids a piece of paper and crayons, giving each child the choice of using those art supplies or waiting for better ones. Then came the twist: for one group of students, the experimenter brought back markers and more crayons; for the other, the experimenter came back and apologized, saying there weren’t any nicer art supplies.

Then came the marshmallow test. Nine of the 14 kids from the "reliable" set were able to wait 15 minutes for the second marshmallow, but just one of the 14 who were disappointed waited it out.

The lesson: What looks like willpower might also be trust.

Categories: Small Business News

10 Things Everyone Should Know About Selling

Inc Small Business - Thu, 04/17/2014 - 6:30am

Almost every position in every company requires some kind of selling. Here are the essentials you need to know to do it well.

There are thousands of "how to sell" books and training courses available everywhere around the world. However, everything you need to know about selling really boils down to the following simple rules:

1. Specialize in selling one thing.

The notion that a great salesperson can sell anything to anybody is as stupid as the idea that a virtuoso musician can play any instrument. The more you specialize in terms of product, service, and industry, the more likely you are to sell successfully.

2. Winnow down your sales leads.

When you're selling, the last thing you want or need is a huge list of sales leads. You only want to spend time on prospects who will probably buy. Therefore, the tighter your target list, the more likely you'll find someone who's actually interested.

3. Do your research first.

Never, never, never contact a prospect before you've checked out the person's LinkedIn profile, researched his or her company and industry, and found at least one good reason why the prospect should to talk with you, today.

4. Get into a conversation.

Your initial goal is not to sell but to get into a conversation to find out if it the prospect is a potential customer. Therefore, a sales pitch--whether spoken, written, videoed, or whatever--is not just a waste of time; it's actually preventing a sale from ever happening.

5. Be a person, not a salesperson.

There's absolutely nothing wrong with selling for a living or having to sell in order to make yourself or your firm successful. However, most people dislike any behavior that smacks of the showroom. Be yourself, not a clone of Ron Popeil.

6. Qualify the prospect quickly.

When you do get into that conversation, your goal is to find out whether that prospect has a need for what you're offering and the money to buy it. If not, eliminate that prospect from your list. Don't waste your time or the prospect's.

7. Focus on the customer's customer.

When you're assessing needs, what's most important is always what your prospect's customers need from your prospect to be successful. Your job is to help the prospect meet those needs. Your own needs, of course, are utterly irrelevant.

8. Adapt to the buying process.

Selling is not something that you do to a customer. It's something that you do for a customer. This means understanding how the customer buys the sort of thing you're selling and providing assistance as needed to make the purchase happen.

9. To sell you must close.

When you've got what you hope is a bona fide potential customer, it's hard to risk hearing a no that smashes your dream of a big sale. Nevertheless, if you don't ask for the business, or wait too long to ask for it, you're going to lose the sale anyway.

10. Build long-term relationships.

The only way to make selling easier is to build up your Rolodex, not just of contacts but of people whom you've personally helped become more successful. Eventually, you won't need to sell any longer because your friends will do your selling for you.

Readers: Is there something in this list that's missing. Leave a comment!

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Categories: Small Business News
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