Fresh Inc.: The Staff Blog

CIT Gets a Reprieve; Guitar Hero Guys Strike Again

2009-07-20T12:14:08-05:00

Who needs a government bail-out? One day before it planned to file for bankruptcy protection, the small business lender CIT Group received a $3 billion emergency loan from its major bondholders, The New York Times reports. CIT had hoped that the government would step in with a loan, but when those talks collapsed, the company turned to its bondholders. CIT isn't out of the woods yet, but the loan is expected to give the company the time it needs to set up a debt-for-equity exchange with the bondholders that would relieve its debt load. And that's good news for the companies that use the lender to borrow money against their receivables. Unleashing your inner rock star. Last October, Inc. brought you the story of Harmonix, the company behind the insanely popular Guitar Hero and Rock Band video games. The company's seemingly overnight success was actually the end result of a more than decade-long struggle to bring the joy of a blazing guitar-solo to non-musicians everywhere. Today, the company, which was acquired by MTV in 2006, is developing a plan to let unknown bands upload and sell video-game versions of their own songs on the Rock Band Network, a platform for Rock Band gamers. Indie artists can set their own price for their songs, ranging from 50 cents to $3 per song, and receive 30 percent of any resulting sales. Garage bands everywhere rejoice! Which companies do best online? Well for starters, Starbucks, Dell, eBay, and Google. Tech analyst Charlene Li and Wetpaint founder Ben Elowitz have released a report that ranks brands based on how well they use social media technologies, like wikis, forums, social networks, and Twitter. The report, which comes via Techcrunch, says that companies that engaged with social media technologies grew revenues by 18 percent over the past 12 months. Companies that did not engage suffered a drop of 6 percent. How to avoid domain name pain. In our current issue, we look at how it's getting harder to get a good domain name. (Or rather, it's getting harder if you don't have $3 million to spend.) Naming guru Eli Altman responded to our story with a blog post, "How to find a good URL without having a brain hemorrhage." His recommendations include using longer phrases, exploring the possibility of buying a new domain extension, and using a URL that doesn't directly correspond to your company name. AOL preps for single life. Sometimes the big guys reminisce about their start-up days and let that nostalgia find its way into business plans. According to The Associated Press, that seems to be what's going on with AOL as it readies for the break from Time Warner later this year. CEO Tim Armstrong, a former Google executive, has announced plans to run fewer advertisements on some of AOL's sites--an interesting move for a company that relies heavily on ad sales. The move has proved viable in some cases already, such as when the company reduced the number of ads on MapQuest, and the rise in traffic made up for the fewer ads. "We are on a long journey and sometimes you do have to make short-term trade-offs for that long-term gain," said one executive. After a first quarter during which AOL's revenue dropped 23 percent to $867 million, those trade-offs will be of monumental importance in the quarters to come. How to avoid leaks in an era of blogs and layoffs. The Wall Street Journal has an article in today's paper about the propensity of embarrassing layoff announcements to get leaked onto the web. Yahoo, for instance, suffered a particularly cold-hearted disclosure in which firing managers were instructed not to engage in small talk with the employees they were dismissing and to keep firings to a maximum of 15 minutes. Another company saw its layoff announcement make its way to the Internet just minutes after it was released internally, despite efforts to keep the move a secret. The Journal says that some companies have responded with threats and investigations, but a better tactic may be to head off the gossip hounds and simply release memos internally and externally at the same time. Do good students make good entrepreneurs? You'd think good students would make good business-owners, but that isn't necessarily the case, according to the findings of Chad Moutray, chief economist of the SBA's Office of Advocacy. His recent working paper studied the '93 graduating class to determine if those who are now self-employeed were better students. But surprisingly, those who earned "mostly As" are 2 percent less likely than their peers to own their own businesses, although the results do differ slightly by major. The margin is so slight, too, that the Times conjectures grades may not matter at all. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Starbucks Undercover; How to Kill a Great Idea

2009-07-17T12:01:01-05:00

The recession probably won't hurt your business. Say what? Scott Shane says there's a common curiosity about recessionary effects on start-ups, but data shows that effect is negligible, if not nonexistent when it comes to survival rates. Between 1977 and 2000, less than half of start-ups made it to age 5. The 48.8 percent survival number, says Shane for The New York Times, has remained constant despite economic movement--up or down. In fact, the chart that plots survival rates during recession and during expansion shows two nearly identical lines. Shane says that while it is possible that this recession will affect start-ups differently than others, two morals seem unequivocally evident. First, of U.S.-started businesses, most will live five years or less; second, launching a business because of the surrounding economic climate is a bad idea. Starbucks goes undercover. Those of you who think you are supporting local small businesses by getting your morning coffee fix at a neighborhood cafe may be in for a surprise. The Chicago Tribune reports that the coffee giant Starbucks, which has some 16,000 stores, has rebranded one outlet in their native Seattle without any visible reference to its Big Coffee affiliation. The store, dubbed 15th Avenue Coffee and Tea, is an attempt by Starbucks to sound less like a corporate entity and more like a neighborhood hangout. Needless to say, local business owners aren't happy with the somewhat deceptive move. "The Goliath is coming after me under a new name," said one local coffee roaster who will have to compete with the Starbucks alter ego. How to kill your business, in five easy steps. Serial entrepreneur Steve Blank on the death of his superstar start-up. Reminds us a bit of our story on the spectacular fall of one of the Web's first great ideas. The alcoholic drinks that the kids love...and the gov hates. Joose and Four Loko: both caffeinated, both alcoholic, and both made by companies now under investigation by states' attorneys general. The Wall Street Journal reports that California, Connecticut, and New York, among others, are looking into "whether the brands may be using deceptive marketing practices, such as by suggesting to consumers that they will have a stimulating effect like non-alcoholic energy drinks." Intentional targeting of underage drinkers is another concern. The greening of the big box. Wal-Mart announced yesterday that it plans to institute a new system of eco ratings for each item in the store. For suppliers, this means turning over 12 data points per item that Wal-Mart hopes will determine how each product was made and packaged. Once armed with these results, Wal-Mart will then calculate a product's "greenness," turning this into a consumer rating system. It's an overwhelming task to say the least. Luckily the superstore will partner with about 12 universities to collect the data and develop the standards. No word yet as to when the ratings will take effect. The mayor drinks for free. If you're nervous about big brother keeping too close an eye on you, don't work with Foursquare. But if you're a small-business owner looking to incentivize potential customers with a good deal and a little fun, you might want to get involved. While some of Google's ads are already location-based, Foursquare takes location-targeting and consumer interaction to a whole new level, TechCrunch reports. With its new iPhone app, Foursquare allows a patron of a bar, for example, to check in every time he visits the joint; if he's visited more than everyone else in a certain city or area, he's dubbed "the mayor" and wins a free drink or a discounted ticket to a show. "Being able to connect web advertising, recommendations, and social media buzz to an actual person walking into your store has long been the holy grail of the advertising world," blogs Charlie O'Donnell, CEO and co-founder of the career guidance site Path101.com, at This is going to be BIG. A remote trifecta. The worlds of broadcast TV and YouTube are about to merge, thanks to Rovi, the company that plans to launch a new version of the online video site, called YouTube XL, Wired.com writes. Now users will be able to activate a unified media guide to search, playback and recommend both broadcast content and YouTube video. All they'll need is a home network, broadband and a TV set or cable box - with one catch: the equipment must contain a Rovi chip. The company claims it has long-standing relationships with already existing TV and cable box manufacturers that will make the technology possible. So far it's partnered with Blockbuster OnDemand, Flixster, Roxio CinemaNow and Slacker radio. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

The 4 Percent That Counts; Getting VCs' Attention

2009-07-16T11:52:07-05:00

Yelp conspiracy theories. Slate's Paul Smalera asked business owners to write-in if any of them felt pressured to pay to get--or keep--good reviews with the crowd-sourced online review site. Plenty of conspiracy theorists responded. But, Smalera writes, "none, to my mind, offered clear evidence of any sort of plot by Yelp to coerce business owners into paying Yelp to game its own system." Yelp may use high-pressure sales tactics, he says, but that's true of many B2B sites. When a business doesn't advertise, do positive ratings disappear? Smalera dismisses that charge for lack of evidence. Yelp deletes accurate reviews? True, but with its emphasis on "real people, real reviews" the site can't divulge its moderation standards, which sometimes delete perfectly fair reviews, or spammers and shills would know how to cheat the system, says Slate. Check out Kasey Wehrum's piece in our June issue about three business owners who decided when, and how, to respond to negative views on Yelp. This means war. As the capital markets tighten and plastic increases in popularity, banks are ratcheting up credit card fees for small businesses, taking a toll on their bottom line. The New York Times reports that merchants are launching a new offensive on those fees, encouraged by a new consumer-protection law designed to protect buyers from excessive fees. According to the Times, retailers large and small--from Wal-Mart to mom-and-pop coffee shops--are compiling petitions and supporting legislation currently moving through Congress to oppose credit-card companies and banks in what the Times expects to be "a furious battle on Capitol Hill." One industry consultant says, "The target is painted bright red on the forehead of every credit card issuer. It is a brutal, brutal year." Honing in on the 4 percent that counts. Advertising Age asks how it is possible to grow a business when "the only thing getting bigger is our federal deficit." (Apparently they haven't seen the Inc. 5000.) It's hard to avoid all the dismal data surrounding business right now--but according to AdAge, that's the last thing you should do. In order to expand, you'll have to access as much data as possible, says columnist Scott Morgan. By starting with existing customer data and prioritizing target groups, you might find that a core 4 percent of your customers are who really drive your business; that small margin is who you'll want to hone in on. Six ways to get investors' attention. With growing distrust in stocks and real estate, more and more investors are turning to venture capital as a safer options to "break out of the malaise," reports the Wall Street Journal. But that doesn't mean entrepreneurs are benefiting from their new role as the safe bet or a surer happy exit. No surprise, but CEOs looking for funding need to be prepared to offer stronger business models and field tough questions. The Journal offers six tips to turn investors' heads, including doing some maturing until you have a finished--and meaningful--product or service and making sure your market is sizable. Speaking of VCs, peHUB calls this site the "Best. VC. Homepage. Ever." We say kudos to the Foundry Group for not letting careers in finance get in the way of their rock star dreams. 12 year old's start-up already acquiring. PlaySpan, the online micro-payment start-up by 12-year-old Arjun Mehta, is soon to launch two new marketplace storefronts, reports TechCrunch. Facebook and MySpace will be the locations, allowing users to purchase various virtual goods through their social networks. Mehta's entrepreneurial endeavour - actually run by co-founding father, Karl - recently acquired micro-transaction app developer Spare Change. That company had already powered micro-payments on the two most popular networks, as well as Bebo, processing close to $30 million in transactions this year. More than enough for Mehta's lunch money. Time running out for giant small business lender. CIT Group, the faltering small- and midsize-business lender, said on Wednesday that "there is no appreciable likelihood" that the government will provide it with emergency funds, The Wall Street Journal reports this morning. Besides helping fund thousands of small businesses, CIT is also "a big player providing cash advances to clothing manufacturers and suppliers, and credit to retailers to pay off invoices." The Chicago Tribune notes that the two main trade groups for retailers and clothing manufacturers pressed government officials on Wednesday to step in. Seemingly to no avail. MarketWatch columnist David Weidner warns that without CIT, "small businesses in the U.S....would be suddenly caught in a financing crunch at a time when the nation needs small businesses to hire workers, fuel production and lead the economy out of recession." More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Twitter Gets Hacked; How Consumers Spend Their Money

2009-07-15T11:48:12-05:00

Twitter internal documents to be made public. A hacker has sent TechCrunch hundreds of what he says are confidential corporate and personal documents from Twitter and Twitter employees, Michael Arrington reported this morning. Arrington says that some of the documents showed the names of people who interviewed at Twitter as well as security passwords for Twitter offices. "The vast majority of them are somewhat embarrassing to various individuals, but not otherwise interesting," he wrote. "We're not going to post any of those documents." What the site has published so far is the pitch document for a Twitter TV show. And it promises to publish a few more documents today--those that "have so much news value that we think it's appropriate to publish them." Mashable thinks Twitter "needs to burn everything security-related down to the ground and build it all anew." Small business preps for health care reform. House Democrats rolled out their new health care proposal yesterday, a plan that The Wall Street Journal says will bring in $544 billion over the course of 10 years by taxing the wealthy. The bill, according to the Journal, would penalize small businesses that did not provide health care to their employees with a fee equal to 8 percent of payroll. Employers with a payroll of less than $250,000 are the only exemptions. Of course, according to one small business owner's testimony in The Oregonian earlier this week, the 8 percent penalty would probably be quite the relief. He currently devotes 18 percent of payroll to health care costs. Others, however, are not encouraged. "This bill costs too much, it covers too few and it has way too much government involvement," says a lobbyist for the National Federation of Independent Business. What consumers spend their money on. Visual Economics turns the latest survey results from the Department of Labor into an incredibly compelling pie chart. The average U.S consumer unit consists of 2.5 people, with 1.3 earners, spending an average of $49,638 a year. The big expenditures are as expected: housing (34.1 percent), transportation (17.6 percent), food (12.4 percent), and insurance and pensions (10.8). But some of the results may surprise you: consumers spend almost as much on entertainment (5.4 percent) as they do on health care (5.7 percent). They spend three times as much on alcohol (0.9 percent) as they do on reading (0.2 percent). Tobacco (0.7 percent) is somewhere in between. (Via What I Learned Today.) Big game publishers taking on iPhone start-ups. Small game developers have so far dominated the iPhone app niche, but the behemoths are starting to inch into the territory. Electronic Arts claims to have the largest market share by revenue of any of the developers, WIRED reports, due in part to its wildly-popular iPhone iteration of "The Sims" which launched in the app store at $9.99. Smaller developers have released most of their paid apps for 99 cents, hoping to raise download numbers in order to compete with the recognition and financial resources of the name brands. "Although top iPhone games are made by independents today, the big publishers will strike back," says Jeremy Liew of Lightspeed Venture Partners. His firm has invested in social gaming companies. "The iPhone only offers one way for games to get discovered today, and that favors the cash-rich big publishers." It's beginning to feel a lot like Christmas. It used to be that early November marked the beginning of the Christmas shopping season. Not any longer. Today's Washington Post reports that an increasing number of stores have started to launch promotions aimed at enticing shoppers to start their holiday shopping while summer is still in full effect. The pre-Yule-time push is an attempt to avoid last year's slumping sales which, according to the National Retail Federation, was the first time holiday sales have declined since the NRF began tracking those figures in the early 1990's. Entrepreneurs remain optimistic. For obvious reasons, optimism is almost a prerequesite for entrepreneurship. You don't open a shop, clean out your savings account or work 16-hour days because you're worried the world is out to get you. Entrepreneur magazine recently published a survey that gauged whether business owners could maintain their postive outlooks through what has been a tumultuous semester for many. Low and behold, 67 percent responded that their businesses were doing better than expected, or at least that business over the last six months was "not as bad as it could have been." While most were looking toward a bright future, it wasn't without sacrifice -- some 45 percent of respondents had either laid off workers, cut hours, or lost employees through attrition. Going forward, business owners responded that cash flow, credit availability and health care costs would be the most important concerns for their business. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Debating a Small Business Bailout; SpaceX Lifts Off

2009-07-14T11:36:08-05:00

Possible bailout for small business lender? As the Washington Post reports, the Obama administration is facing a crisis of conscience in regards to whether it should bail out the struggling small-business lender, CIT Group. The New York-based company, which has about $75 billion in assets, has seen its stock value tumble 94 percent since the beginning of 2008 and its credit rating was slashed four notches by Moody's yesterday citing "growing concerns with CIT's liquidity position and prospects for survival of the franchise." While most analysts believe that CIT's failure would have relatively modest consequences for the overall financial system, the president's economic team is highly concerned because of CIT's focus on small-business lending. Administration officials met yesterday and were apparently split between leaving CIT alone and rescuing the failing lender. How the Democrats' proposed surtax will affect small business. Late last week Ways and Means Chairman Charlie Rangel disclosed that a bill that he drafted would impose a "surtax" on individuals with an adjusted gross income of more than $280,000. In an op-ed the Wall Street Journal says that the tax will "hit job creators especially hard." According to a 2007 Treasury study, 6 out of every 10 people that earn that much are small business owners, operators or investors. That two-year-old study also found that almost half of the income that would be taxed under this proposal is small business income from the 500,000-plus sole proprietorships and subchapter S-corps where owners pay the individual tax rate. Small business owners will be further impacted by the Rangel plan's payroll tax surcharge, which will apply to all firms with more than 25 employees that don't offer health insurance to their employees. According to the Journal, under this proposal, American small businesses would pay higher tax rates than the Fortune 500 companies. (The corporate federal-state tax rate applied to GE and Google is about 39 percent in the U.S.) In light of a new Kauffman Foundation study, which found that entrepreneurs have gotten the U.S. out of its last seven post-WWII recessions and generate two-thirds of new jobs during the recovery, the op-ed claims this policy prizes income redistribution over job creation and economic growth. Another loan option for entrepreneurs. Nine months after it first shut itself down to register with the SEC, peer-to-peer lender Prosper has received permission to relaunch its operations. The site allows small business owners with good credit (640+) to borrow money directly from lenders in an auction-style setting. Lending Club, one of Prosper's largest competitors, completed its registration in October. With Prosper's relaunch, lenders will be permitted to sell their notes as securities on a secondary market. Here's the company's take from CEO Chris Larsen. SpaceX takes flight. Wired.com has the news that SpaceX, the private rocket start-up founded by Tesla's Elon Musk, has completed its second successful launch. The California-based company yesterday used a rocket to launch a satellite that "carries a high resolution camera that will be used to monitor natural resources." Watch the launch here. Tax penalty reprieve is welcome relief. Shirley Hu, co-owner of Kustom Graphix in South El Monte, was losing sleep over the possibility of jail time - her company's $1 million-plus tax penalty would have sent her to the slammer. But thanks to Congress' plea to the IRS to delay collection of smaller cases, ranging from $100,000 to more than $1 million, those long nights are over - at least through Sept. 30. The issue is a 2004 tax-shelter disclosure law that has identified and killed multimillion-dollar shelters used by large companies, but it's endangered small businesses along the way. The Senate Finance Committee said it never intended to hurt the "little guys." "When I advanced this legislation to shut down tax shelters, I did not intend to bankrupt small businesses that had no ill intent," said Sen. Charles E. Grassley of Iowa, the ranking Republican on the committee. "I was focused on the big corporations that were actively seeking to hide their participation in tax shelters." California counts calories. As state-mandated calorie counts make their way on to California restaurants' menus, options will be changing as well. The Sacramento Bee reports that chains with more than 20 outlets will be required to list calories alongside descriptions--which is causing some restaurants to lighten their fare in order to appeal to customers. A scallops and spinach salad from Romano's Macaroni Grill weighed in at 1,270 calories not long ago (health officials recommend the average adult to eat 2,000 calories in a day). Perhaps because that information is now posted, the dish has shed 880 calories, down to 390. Other states such as New York have similar laws in effect. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Crowdsourcing and One Exec's Case for Regulating Google

2009-07-13T10:52:33-05:00

Start-up helps keep your, and Tom Brady's, private info private. After Sept. 11, the government launched a personal data-gathering campaign, understandably alarming privacy advocates. A small California-based start-up, Palantir Technologies, claims to have a partial solution, reports NPR. Alex Karp, Palantir's CEO said the company only provides intelligence agencies with information to which they are legally entitled. "Most people in America believe you can either fight terrorism or you can protect our civil liberties, and that dichotomy used to be true," Karp said. "We've found a way to tag information so the only people who can see if are those who are allowed to see it." Because Palantir's system tracks when data is collected and reviewed, it instills a sense of accountability. That might have helped New England Patriots quarterback Tom Brady; his personal information was sought 968 times by law enforcement officials for their own amusement. Bob McGrew, Palantir's director of engineering, said this never would have happened under his company's umbrella. "When some of these officials were looking at Tom Brady's data, they would be leaving a trail," he said. "It is all captured in a log that you don't need to be a technical guy to understand. A compliance officer or a civil liberties group would be able to see exactly who was looking at what information." Power to the people. The customer may always be right, but does that mean they should have a say in the way you run your business? Today's Wall Street Journal takes a look at a few businesses that are turning to their customers for advice on such topics as what products to sell, how their products should be designed, and even what the company's name and logo should be. The technique may provide cheap and easy feedback, but industry experts warn that following the whims of the crowd may stifle innovation and lead to middle-of-the-road thinking. For a deeper look at a company that was a pioneer in so-called crowdsourcing, check out Max Chafkin's profile of the innovative T-Shirt maker Threadless. Does Google need to be regulated? Today at TechCrunch, an anonymous author, described only as a "well known executive at one of the largest sites on the Internet" opines on the state of search engine marketing and SEO. The gist of the argument is that the success of businesses that operate online, specifically small businesses, is almost wholly dependent on an arbitrary set of rules levied by one entity: Google. "Due to Google's dominance, and the fact that it controls such an enormous amount of consumer behavior through paid and organic search listings, the company in essence governs commerce on the web," he writes. More to the point, he explains that because "the rules of organic and paid search change frequently," most businesses need to hire an agency or consultant to give them an even decent shot at ranking high, making the website start-up process significantly more expensive. For this author, the only real answer is mandatory public "disclosure" of the methodologies used to rank sites. Main Street businesses speak out for healthcare reform. In today's The Oregonian, small-business owner Jim Houser writes that public health care is a must. Houser's group, Main Street Alliance, lobbied in Washington this weekend for health-care reform. At 18 percent of payroll, in Houser's case, he says the current model simply is not sustainable. The United States spends more than $2 trillion for medical care each year, Reuters reports, which is more than twice what any other country pays. While many have agreed that reform is necessary, how to afford it is a hot-button issue. According to Reuters, President Obama's plan to increase taxes on Americans who earn more than $200,000 was met with resounding disapproval this weekend, mostly from Republican legislators. Republican Sen. Judd Gregg says Congress' goal to pass health-care bills by the August recess is "highly unlikely." "The crack cocaine of auction sites." The Big Money's Mark Gimein says online auction site Swoopo.com has created "the most efficient, addictive way to separate people from their money." The site, which started in Germany as a phone and TV auction, describes itself as "entertainment shopping" and manages to hook buyers by hyping amazing sales like 90 percent off a MacBook Pro. Like eBay, prices start as low as one cent and go up as members bid on the item. But unlike eBay, Swoopo charges 60 cents every time you make a bid. For the amount of savings they're advertising, 60 cents might look at first glance like chump change to the bidder, but the winning bidder of that 90 percent off MacBook Pro, for example, bid 750 times, yielding Swoopo a tidy $469.80 in fees. "What makes Swoopo so fiendishly addictive," says Gimein, "is the tendency of people to think of the bids that they have already put in as a "sunk cost," money that they have already put toward buying the item." Which isn't actually the case. The behavioral economics Swoopo applies to its auction work so well that they even make money auctioning off packs of Swoopo bids. Recession a boom time for rehab centers. Speaking of addiction, it seems that this stressful economy has led to an increase in unhealthy behaviors. The BBC reports that the recession has boosted business for The Causeway Retreat, a rehab center on the island of Osea, Essex. It's seen a 60 percent increase in clients from the corporate sector since the recession took hold late last year. "We've been at max capacity for the past year," said Mark Gregory, the retreat's general manager. "The recession isn't hurting us, I say it with sadness - it's aiding our business." The new residents' most common career field? That would be investment banking and law, not surprising when you look at the price tag for a week's stay: about $16,000. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

"The Worst Mancession in Recent History"

2009-07-10T12:46:20-05:00

Atlantic: "Worst mancession in recent history." In nearly every age group, men are losing jobs at a faster rate than women. The male unemployment rate in May was 10.5 percent, 2.5 points higher than the same statistic for females. The Atlantic reports that the mancession extends beyond the employment rate, with men reporting higher rates of alcoholism and imprisonment, and lower numbers in earnings and life expectancy. Citing that only one out of every 10 construction workers is female, the story suggests the mancession may be a result of gender-biased work sectors. The ominous conclusion? "The Great Mancession, as silly as it sounds, could be deeper, and more long lasting, than the Great Recession." The dark side of entrepreneurship. For the past 25 years, entrepreneurship has been the de facto career path for people who want to find fame and fortune and follow their own vision--all without working for the Man, Goltz Group founder Jay Goltz writes in the New York Times. But 70 percent of business fail within 7 years and in the worst cases, that brings complete financial failure. Goltz goes through the trials of one entrepreneur's attempt to launch a high-end audio and video systems firm in Chicago to bring a counterpoint to the hype. Among the lessons? "Good accounting isn't a luxury in business. It's a necessity." Check out Bo Burlingham's feature about Goltz almost destroying himself trying to grow his company as fast and as huge as possible in Small Is the New Big Flickr founder launching something "huge and fun." Today TechCrunch has the lead on the new company being launched by Flickr co-founder Stewart Butterfield. The news comes courtesy of a tweet Butterfield posted last night announcing his new company, Tiny Speck, was hiring. He also put new meaning into managerial transparency by admitting that he may "make a terrible boss." As for Tiny Speck itself, TechCrunch says it's heard that it has something to do with "social gaming." But all the company is saying for now is that it's "working on something huge and fun." A look at the recession from an economist who's been through worse. Economists are quick to compare the current economic recession to the Great Depression that laid the country low during the 1930's, but not many can do so from firsthand experience. 93-year-old economist Anna Schwartz can. Having lived through the bread lines of the Great Depression, studied boom-and-bust trends her entire life, and co-authored the revered A Monetary History of the United States, Schwartz is more than qualified to weigh in on the nation's current fiscal crisis. In this Q&A with Time, she does just that. Schwartz takes the Obama administration to task on what she feels were misguided attempts to jumpstart the economy. In her view, the GM bailout was a big mistake, the economic stimulus bill won't have the desired effect, and Obama's healthcare reforms are a recipe for disaster. Luckily for F.D.R., she doesn't discuss her thoughts on the New Deal. Social entrepreneurship ready for its close-up. Yesterday SocialEarth.org launched a Hulu-inspired video library channel that pools footage about social entrepreneurship. "Videos are a powerful method of sharing inspiration, courage and wisdom," said Naiomi Bisram, SocialEarth co-founder. "With the launch of SocialEarth: Video, we hope to provide a platform which inspires, educates and encourages social entrepreneurs and anyone interested in making a positive difference in our world." The site, started by students and alumni of the University of Minnesota, will allow users to search by name or browse by topic, turning up results like "Mohammad Yunus" and "Jacqueline Novogratz," as well as "green" and "microfinance" - all of which can be rated by popularity. Even do-gooders love a contest. Need programmers? Start by training your kids. Kudo, a recently-released videgame from Microsoft aimed at kids 9-and-over, can actually teach your kids (or even you), about programming, reports Slate. And it's actually fun. With modern 3-D graphics players can change the landscape and modify the cast of characters. Kudo comes from a long line of games, among them the Apple II-era Logo, that put kids in an open-ended environment and gave them simple language to build things. The key, says Slate's Chris Wilson, is to teach them to think like programmers. Wilson recommends it for kids of any age, "There is something innately appealing about dabbling in a mechanical world of your own making. Building a game forces you to think of complicated situations as the sum of simple rules." More from Inc. Magazine: Apply to the Inc. 500 and Inc. 5000. Follow us on Twitter. Friend us on Facebook.

Buffett Calls Obama's Stimulus Bill, "Half a Viagra"

2009-07-09T11:46:08-05:00

The oracle from Omaha sees continued struggle in the future. Warren Buffett predicts rising unemployment and a possible second stimulus package in an interview with Good Morning America today. Buffett was an ardent Obama supporter during the 2008 campaign, and expressed concern that the first stimulus package was too diluted. Reuters reports that Buffett said the American Recovery and Reinvestment Act was like "half a Viagra and then having also a bunch of candy mixed in -- it doesn't have quite the wallop." Despite anticipating an unumployment figure of 11 percent, Buffett says, "We're going to come out of this better than ever, the best days of America lie ahead but not next week or next month." The Brotherhood of Bisnow. Elliott Bisnow, 23-year-old co-founder of e-newletter company Bisnow, organized a skiing trip for fellow young entrepreneurs, including the co-founders of CollegeHumor.com. Out of that trip grew a 200-member informal society of these prodigies known as Summit Series. The "brotherhood" of sorts helps the business owners to discuss solutions to finding health care plans, balancing salaries vs. commissions and how to gain respect from those who view their mid-20s age status as a fault. Now the group boast such venerable names as Ivanka Trump, Twitter's Evan Williams and Zappo's Tony Hsieh. Bing: better than Google; bigger than Digg, Twitter, and CNN. Despite only going live at the beginning of June, new numbers from Compete.com show that Microsoft's new search engine has been able to pick up 49.57 million unique visitors in its first month, reports social media blog Mashable. That's more than Digg (38.6 million), Twitter (23 million), and CNN (28.54 million). Compete only measures U.S. visitors, but still, in just a month, Compete shows only 12 other websites ahead in the traffic rankings. Over at the New York Times, David Pogue uncovers Microsoft's master business plan, "Wait until somebody else has a hit. Then copy it." But the rub here is that in many ways, says Pogue, Bing is better. Among its dreamy features is a pop-up balloon that shows you the first few paragraphs of text on any search result and a "big, beautiful, very successful" panel to the left of the search results that tries to make sense of what you were actually searching for. United gets a lesson in customer service. Rather than pay $1,200 to repair a passenger's guitar that was smashed by careless baggage handlers, United Airlines is now receiving a very public lesson about the importance of good customer service. The guitar in question belonged to Canadian musician Dave Carroll who has voiced his frustration with the airline in the form of a music video titled, plainly enough, United Breaks Guitars. The country-tinged song is now a YouTube sensation, garnering 137,896 views since it was posted on Monday. The public attention has even caused United to change their tune. A United spokeswoman said, "This struck a chord with us. We are in conversation with one another to make what happened right." The airline has even asked Carroll for permission to use the video internally as a way to improve the company's culture. Signs you might be a Smartphoniac. About 18 percent of the U.S. population has succumbed to the siren call of the smartphone. But it's the top 10 percent of smartphone users who represent the "true addicts of the information age," says the Wall Street Journal. You can spot them in your midst using the Journal's five telltale signs. For example, "Do they come up with excuses in the middle of a conversation to pull out their smart phone -- something like 'let me jot something you said down so I don't forget it, and then sneak a look at all their messages?" Or "Do they take their smart phones with them when they get up from the table to go to the restroom -- and do they take an awful lot of trips there?" If they fit two or three of the signs, not to worry, it's just par for the course of modern times. Four out of five, and you've found yourself a Smartphoniac. No raises in 2009, but would you accept a field trip instead? 2009 is the second year in a row many small business owners won't be handing out raises, even if well-deserved. The Associated Press reports these entrepreneurs are trying to ameliorate the situation by paying bonuses out of savings accounts and providing flex time, lunches and field trips. Proving again that the work place is no different than high school. The next big hurdle for employers will be breaking the news to their staff. Rick Gibbs, a senior human resources specialist with Administaff, said owners should do this as a group, followed by individual meetings. If pay will be moving to a performance-based status, they should take the opportunity to let workers know what's expected, he said. More from Inc. Magazine: Apply to the Inc. 500 and Inc. 5000. Follow us on Twitter. Friend us on Facebook.

Tough Love for Employees and Pandora's New Deal

2009-07-08T11:20:27-05:00

The deal that saved online radio. Pandora, and other Internet radio sites, are breathing a sigh of relief today, one day after record labels and online radio stations struck an agreement that will reduce per-song royalties for streaming music. In March, we told you about how Pandora founder Tim Westergren built a grass-roots campaign of web listeners that pressured Congress into getting involved. The move seems to have worked. The old royalty system would have required web-radio players to pay royalties of 19 cents per listener, per song next year. Westergren and other web radio leaders said their businesses couldn't survive under the weight of those fees. Under the new deal, web-radio players with annual revenue of more than $1.25 million must pay either 25 percent of gross revenue or 9 cents per listener, per song -- whichever is greater --, The Wall Street Journal reports. Smaller sites will pay the higher of 7 percent of expenses or 12 percent for the first $250,000 of revenue. Still, it's not all good news for Pandora listeners. The company announced that those users who listen for free for more than 40 hours a month, will now have to pay 99 cents once they pass that number. Click here for our 2007 cover story on Pandora's crazy ride to the top of online radio. IOU's are California's new legal tender. The state of California is in pretty bad shape, fiscally speaking. A still-unresolved $26-billion budget gap led the state to issue IOUs in lieu of actual payments on their bills last week. The San Diego Union Tribune reports that a bill currently moving through the legislative process would allow business owners to pay taxes using the the IOUs. Registered warrants, as they are officially known, are already accepted as payment on income tax, but the bill would broaden their acceptance to allow IOUs to pay off any kind of fee owed to the state. Since Thursday, the first time California has issued IOUs since the Great Depression, about $230 million have been distributed in IOU form, according to the San Diego Union Tribune. The bill's author, Assemblyman Joel Anderson, explained, "To expect them to pay the fees and taxes, when they have yet to receive cash payment from the state is outrageous." Telling employees to get healthy or else. Interesting story in today's Wall Street Journal about one company who gave the following ultimatum to it's employees: get your medical checkups or lose your health insurance. Tired of skyrocketing healthcare costs and the lackluster employee participation in the company's voluntary wellness programs, AmeriGas Propane made the decision to enforce some tough love. Employees and their covered spouses were given a year to complete a battery of health checkups, including blood pressure checks and blood-sugar tests. Those who failed to complete the tests would lose their health insurance. Despite some grumblings from employees, and some legal concerns over privacy issues, the program seems to have had some early success. 90% of AmeriGas workers have gotten the required tests. One employee discovered early-stage breast cancer from a required mammogram, a test she said she would likely have put off had it not been mandated. For an admittedly unscientific test of how healthy your workforce is, take a look at our office wellness quiz. The unexpected hero of the upcoming Facebook movie. ScriptShadow got its hands on the first draft of the Facebook movie, directed by West Wing creator Aaron Sorkin, and finds the mesmerizing script centered around an unlikely hero: Sean Parker, an early investor in the social network. Parker, who also co-founded the infamous file-sharing startup Napster, is given credit for pushing Facebook founder Mark Zuckerberg to rev up the company's growth. Defamer quotes ScriptShadow's Carson Reeves, "And don't get me started on Sean Parker - a character that can become iconic if the film is made. The brash techy rock star revels in his own ego, and is a key player in why Facebook is on our computers today." Comparatively, Zuckerberg is portrayed as more of a dweeb. In one wrenching scene, he sits alone in a dark room and "friends" the ex-girlfriend who dumped him right before he launched Facebook. Overall, thanks to Sorkin's screenwriting prowess, viewers can expect the story to be something of a comedy. Google's new operating system. The rumors were true. In a move that has anti-trust regulators on the edge of their seats, Google announced on it's blog last night that it will develop Google Chrome OS. The new system will allow applications to run directly on the Web and will be installed in the second wave of 2010 Netbook models. Sundar Pichai, VP of Google's product development, said, "We are going back to the basics and completely redesigning the underlying security architecture of the OS so that users don't have to deal with viruses, malware and security updates." Recently, WIRED chronicled the deep-seated competition between Google and Facebook as they vie to control users' Internet experiences. Could Chrome OS be Google's knockout blow? Entrepreneurs by the numbers. A new study from the Ewing Marion Kauffman Foundation, dubbed The Anatomy of an Entrepreneur, provides some insight into what makes the founders of high-growth companies tick. The answer? Coffee. Lots and lots of coffee. Just kidding. The study looked at the socio-economic, educational, and familial backgrounds of 549 successful entrepreneurs and determined that most of the company founders are experienced, well-educated and married with children, and that they come from middle- to upper-lower-class backgrounds. The full study can be downloaded from the link above. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Apple Vs. Teen Hackers; How to Twitter for Business

2009-07-07T12:20:21-05:00

The kids Apple loves to hate. If you're one of thousands of iPhone users who has "unlocked" or "jailbroken" your phone, you may have a 15-year-old to thank. The Wall Street Journal takes a look today at teams of teens that spend hours a day developing jailbreaking software that allows users to access an app store with non-Apple-sanctioned programs. "These include applications that block ads on the iPhone's mobile Internet browser, for example, or let the phone double as a laptop-computer modem," The Journal says. At the center of one such operation is Ari Weinstein, a rising 10th grader who has been hacking since he was 11. "Apple doesn't have the right to tell me what I can put on my phone," he says. "I only do hacking that helps people." People outside of Apple, that is. For more hacking fun, check out this FastCompany.com video. Twitter for business owners 101. Probably like a lot of people out there, tech entrepreneur Neil Patel was initially skeptical about the actual usefulness of Twitter for his business. He has since come around and on his blog, Quick Sprout, he discusses the lessons he's learned in making Twitter a valuable tool for growing his brand. Even if you don't know a tweet from a blog, Patel does a good job in explaining not only how to get your company up and running on Twitter, but why you should even bother in the first place. Once you've mastered the basics, check out this link from Inc. Technology for some more tips on how to use Twitter to find potential customers and turn those contacts into sales. VC too big for its britches. First-quarter venture capital investment is down to $4.3 billion from $7.1 billion from the same quarter last year, and that might not be such a bad thing. The New York Times reports that some VC firms are shrinking themselves in an effort to return to their roots as firms founded by entrepreneurs, for entrepreneurs. An influx of arguably over-thinking MBA-educated partners and aging industry veterans who have lost touch with technology could be hindering the industry's ability to fund successful start-ups and make worthwhile returns, the paper reports. And more firms with more money are actually detrimental to the process, as well, investors say. Cramming more money into a start-up than it actually needs can choke the company and bloats valuations to a size where only nominal returns are possible. "The best thing that could have happened to V.C. is this economic crisis," one venture capitalist says, "because it's lowering the flow of capital into these funds." This is your brain on venture capital. A more humorous look at the venture capital world comes from anonymous blogger Sand Hill Slave, whose motto is "I no longer fear hell for I work in Venture Capital." Sand Hill Slave has a handy graphic depicting what goes through the brains of a typical general partner, venture partner, and associate at your average Sand Hill Road firm. According to the drawing, equal chunks of a GP's brain seem to be devoted to both of the following thoughts: "A CEO just pitched us using the buzzword 'freemium'. Smells like a winning strategy. Huzzah!" and "Get Mike Arrington to pimp the companies I just invested in." A significantly smaller portion of the GP's brain, is occupied with the thought, "My admin better not turn out to be that wench Sand Hill Slave." (via peHUB) The MJ effect on Los Angeles. With Michael Jackson's memorial service scheduled to start at 10:00 a.m. PST today, 17,500 people have flocked from around the world to the Staples Center in Los Angeles. For this southern California city, the event could mean a $4 million boost in tourism, a local economist tells the Los Angeles Times. Many flights to LA were sold out by Monday, and hotels have seen a surge in occupancy rates. Local businesses can thanks fans like Florence Kesler, who flew in from Paris without even having a ticket to the event. Black and white but not dead all over. Large newspapers' profits have decreased more than 100 percent over the past five years, but these publishers still rank among the nation's best companies when it comes to operating margins, WIRED says. In 2008, newspapers with circulation greater than 80,000 posted average operating margins of 12 percent. That's twice as much at Wal-Mart's but only half as much as Google's. But being the big behemoth isn't always a positive. The Inland Press Association, which just released the data, found smaller news outlets to be the most resilient, crediting the fact that local markets are tougher to shake up. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Marc Andreessen as VC; Teaming with McDonald's

2009-07-06T12:25:53-05:00

Andreessen's next big thing(s). "The man who popularized the Web browser," -- as The New York Times describes Netscape co-founder Marc Andreessen today -- is hoping to influence other new technologies through a venture capital firm he's launching called Andreessen Horowitz. Andreessen (who also founded Opsware and Ning) and his partner, Ben Horowitz, have raised $300 million, The Times reports, and will focus on investing rather small amounts, as little as $50,000, in young tech start-ups. "Andreessen Horowitz will be testing a theory of investing....that smaller funds making smaller investments in very young companies will yield higher returns," The Times says. Over at TechCrunch, Sarah Lacy explains how Andreessen Horowitz will distinguish itself from most other VC firms. "Like Founders Fund and unlike most everyone else, Andreessen and Horowitz are more comfortable investing when an entrepreneur wants to stay the CEO," Lacy writes. "Hiring a 'grown up' CEO always sounds like a great idea, but almost always hastens a company's failure, Andreessen argues." States looking for new ways to tax online retailers. Cash-strapped states looking to collect sales taxes are considering new laws, or revisions to existing ones, that would force e-tailers to pay up, reports the Wall Street Journal. North Carolina is one of the states contemplating going after companies with marketing affiliates to get sales taxes. Sen. Hoyle, who thinks that current laws can be read to force retroactive sales tax, predicts sales tax from out-of-state sellers could bring in up to $200 million more annually. Texas is looking into whether Amazon can be taxed through an in-state subsidiary that handles distribution. A spokesperson from Amazon, which is based in Seattle, told the Journal, "We don't want to shoulder the unconstitutional burden of collection in states where we lack a physical presence." This comes on the heels of recent legislation passed in New York, Rhode Island, North Carolina, and Hawaii, that would force companies to collect sales tax if they have in-state online marketing affiliates. In response, Amazon, Overstock, and the like threaten to drop affiliates in some states, which caused states like Hawaii and California to back off so as not to punish local businesses. The trade group Performance Marketing Alliance says that there are 200,000 affiliate marketers in the U.S. that represent $14 billion in sales annually. But since affiliates only drive between 8 and 20 percent of sales for e-commerce sites, they can be dropped without significant consequence. The idea of collecting sales taxes through affiliates came out of former NY Gov. Eliot Spitzer's 2008/2009 budget. At the time, Overstock responded by pulling its affiliate business in New York. The Kiva backlash. Less than a month has passed since Kiva.org opened its micro-lending platform to U.S. entrepreneurs and already more than 400 members are unhappy, TechCrunch reports. A lending team entitled Unhappy Kiva Lenders was created a week after the announcement claiming that "Kiva shifted from making loans exclusively where the needs are greatest, to where they are the least." Kiva CEO Premal Shah, for his part, says that even before the current financial crisis, more than 10 million U.S. business owners waged a losing battle to obtain capital. Inc. reporter Tamara Schweitzer thinks what's really important is the growing popularity of microfinance. Brewing up business with McDonald's. As McDonald's takes aim at Starbucks with its new line of high-end coffee drinks, dubbed McCafe, the Chicago Tribune takes an interesting look at the small coffee roaster who has been tapped to be the burger giant's main bean supplier. Tyler, Texas-based Distant Lands struggled long and hard over the decision to become Ronald's lead espresso supplier, but eventually decided that the benefits outweighed any potential drawbacks. Among those drawbacks is adapting to McDonald's stringent sets of rules for its suppliers. But adapt it did. Prior to landing the new contract, Distant Lands kept quality control records through a green tag pinned to a burlap sack full of coffee beans. Now their system is all handled electronically. Asked whether it was worth the effort, one Distant Lands exec noted, "We got to be an approved supplier to McDonald's, and for a little company like ours, you have no idea how important that is." The running shoe that isn't. The Tarahumara people of Mexico can run 150 miles in sandals, which sounds crazy unless you are part of the grassroots movement that believes running shoes should de-evolve. "They're not hampered by running shoes," explains Galahad Clark, a seventh generation shoemaker. Inspired by the Tarahumara's "edenistic" approach to running, Clark developed Vivo Barefoot, a line of running and walking shoes that are as back-to-basic as possible while still being considered a shoe (i.e. the puncture-resistant soles are only three millimeters thick). Some are lace-ups, some sport Velcro strips, but all have a shallow height and are described as more of a glorified sock than shoe. Clark believes, counter-intuitively to the athletic industry, that typical running shoes are causing more injuries than they prevent. Vivo's claims are similar to those of Danny Abshire, whose Newton Running line we featured last year. Bed Bath & Economic Barometer. Time magazine thinks it may have discovered what exactly that whole Beyond business was all about. Although Bed Bath & Beyond has had trouble peddling housewares and hand lotions in an ongoing recession, it recently announced that Wall Street's expectations were slightly pessimistic, citing a 13.5 percent profit increase. If buyers are reopening their wallets to Bed Bath & Beyond, some analysts say, they might be ready to loosen up funds for other discretionary spending and help start the upward climb out of the recession. "The nest is where we'll likely see the early signs of a recovery," says retail analyst Marshal Cohen. Other experts, however, say it isn't that simple. After all, the retailer's largest competitor went out of business, and the encouraging reports could be more of a reflection of decreased competition than of a nation-wide upward trend in spending. As consultant Howard Davidowitz says, "There is no more Linens 'n Things. How can that not have a tremendous impact on Bed Bath & Beyond?" More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Landing a Spot in Starbucks; A New Boston-Area Booze Biz

2009-07-02T12:01:31-05:00

Life at Silicon Valley’s most famous research center: A tech geek's uptopia. BoingBoing looks as the painstakingly cultivated culture of the Palo Alto Research Center (PARC). In the 14-acre facility, every employee has his or her own office with a view of the courtyard or the Palo Alto Hills. Privacy in the common areas was also ensured with the entire building divided into pods, each with its own feel. Biz dev director YF Juan tells BoingBoing that the PARC inhabitants are divided into “celebrity geeks” like Van Jacobsen who wrote the TCP stack for the internet protocol and the “default geeks” who specialize in a particular subject. Just how geeky are they? On February 13, 2009 at 3:31:30PM the number of seconds since the day that UNIX time was created became 1234567890. The PARC had a party to celebrate. “We just gathered around and took pictures around the computer and had coffee and water.” Despite Google-like amenities, including a killer cafeteria, workers try to strike a good work/life balance, the way George Pake intended when he conceived of Xerox PARC. Says Juan, “We're often hanging out, except that when we hang out we're talking about how to address a particular computing problem. We hang out in our own geeky way.” Time to pay up. Television executives are coming to realize their position today very closely mirrors the predicament newspapers are facing. Namely, having long-distributed content for free on the Web, how do you convince your customers to start paying for it? Wired sees a new business model in the crystal ball, or screen, as it were. Possibilites include new content where ads are integrated right into the show rather than separated into 30-second spots (which sounds a lot like old-school product placement to me), and a premium subscription plan, something like Netflix. One Disney-ABC executive seems to have the end down, if not the means. "We need to be able to match the appropriate pricing, availability windows and distribution platform to the right consumer," he says. Breaking the Starbucks barrier. Tuesday marked a milestone for KIND Fruit + Nut bars. After a five year struggle to woo Starbucks execs - and many free samples and e-mails later - Daniel Lubetzky can finally see his company's food products grace the shelves of the coffee giant's retail stores. His dogged persistence caught the coffee company at a point of weakness. It needed to revamp its image, providing healthier menu options. Lubetzky's bars, made with whole natural ingredients rather than paste, fit perfectly into the equation. "This is such a huge break," Lubetzky said. "Now we just have to show we can make it work." This isn't the first successful David and Goliath story we've seen. Tom Szaky of garden products company TerraCycle had similar success when he pitched Wal-Mart. DFJ’s global business plan competition picks a winner. Venture capital firm Draper Fisher Jurvetson and Cisco announced the winner of their joint business plan competition yesterday. The $250,000 prize goes to Husk Power Systems, launched by two University of Virginia b-school graduates in India in 2007. The startup designs and operates mini power plants that convert rice husks into electricity to serve off-grid Indian villages. Unemployment rate rises. So much for signs of recovery. The U.S. economy lost 467,000 jobs in June, the Labor Department said today, a month after job losses slowed amidst hopes of a turnaround. Economists had been expecting 365,000 lost jobs, The New York Times reports. The unemployment rate also rose, to 9.5 percent from 9.4 percent. One economist told Times that the stimulus has been "a finger in the dike." But another, Mark Zandi, chief economist at Moody's Economy.com, said, "If we didn't have the stimulus, the economy would've contracted twice as fast in the second quarter." A toast to entrepreneurial spirits. Finally, as you pause to enjoy a Fourth of July cocktail this weekend, you might want to raise a glass to a pair of Gloucester, Massachusetts entrepreneurs making a bid to become the next Absolut Vodka. The Boston Globe has the story of 56-year-old Bob Ryan and his 37-year-old nephew Dave Wood, who left more stable occupations to open their upstart distillery Ryan & Wood. The pair’s premium, handcrafted Beauport Vodka and Knockabout Gin have already begun to hit liquor store shelves and bars. For a closer look at the ins-and-outs of the liquor business, as well as a glimpse into the life of a true American original, check out this How I Did It on the late Sidney Frank, the man who brought Jagermeister and Grey Goose to the states. Have a safe and happy Fourth of July weekend, the Inc. staff will be back to work on Monday. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Battle of the Browsers; Stick a Fork in Joost

2009-07-01T11:48:03-05:00

Battle of the web browsers After its debut in 2004, non-profit run, open-source Web browser Firefox captured almost a quarter of the market with its speed, stability, and customizability. But lately users had been complaining that Firefox had gotten slow and prone to crashing, says Slate’s Farhad Manjoo. In the meantime, Apple and Google came out with Safari and Chrome. And in March, Microsoft debuted Internet Explorer 8, which Manjoo calls “a pleasure to use.” This week, Mozilla finally released Firefox 3.5 and it was worth the wait, boasting new features and a boost in speed. Better yet, argues Manjoo, it “gives us a peek at the Internet of tomorrow.” It offers the best implementation of HTML 5, an update to the standard coding language that the World Wide Web Consortium has been trying to promote since 2007. The new release, adds Manjoo, “could prompt a re-engineering of the Web itself.” For more on how a free products and a volunteer workforce made Mozilla the hottest tech company in America, check out David H. Freedman’s feature on The Firefox Paradox from our archives. The worst tech commercial ever? It’s been a bad week for Internet Explorer. Just as techies are heaping praise on Firefox’s latest release, 29-year tech writing veteran Harry McCracken declares Microsoft's new IE commercial, featuring a woman projectile vomiting (repeatedly) after seeing a site her husband had been viewing, the worst commercial he’s seen. Ever. Valleywag concurs, adding that other spots in the series are just as grating. Even AdAge calls the series, hosted by ex-Superman star Dean Cain, “nothing if not odd.” Third time a charm? For the third time in three years, the web TV provider Joost has a new business plan. It's also laying off 70 of 90 employees, Advertising Age reports. As one of the first web TV start-ups, Joost had the backing of CBS and Viacom, and high-profile founders in Niklas Zennstrom and Janus Friis, of Skype and Kazaa fame. Soon, though, users became disenchanted with its mandatory software download, so last year the start-up switched to a browser-based, ad-supported service. But that maneuver didn't help Joost gain much market share from popular sites like Hulu. Now it will start licensing its technology to other media companies to use on their own sites. The future doesn't look bright, Om Malik writes over at GigaOM. "When I read about all the planned changes...the first thought that crossed my mind was: Stick a fork in it; Joost is done," he says. Malik goes on to compare their new strategy to "a leaky lifeboat in the middle of the Pacific Ocean." Ouch. Their missteps, he continues, include growing too big, too fast; attracting too much publicity, too soon; and waiting too long to move to a browser-based service. Big Apple food fight. A good old-fashioned New York City street fight is brewing in Manhattan between the city's established food-cart vendors and a new wave of culinary entrepreneurs with high-end food trucks serving everything from vegan tacos to chicken-Thai dumplings. The New York Times reports that the traditional hot dog and gyros vendors have been less than welcoming to this new breed of mobile food purveyors, who they claim are encroaching on their turf and stealing their business. The feud has begun to turn ugly, with some of the new vendors claiming they have to deal with threats, harassment, and in one case, slashed tires. As Grant Di Mille, owner of the Street Sweets food truck, explains, "I should not have to carry a baseball bat on my truck in order to sell cupcakes." Small businesses fall behind on loan payments. Small and medium-sized companies are reporting the highest rate of delinquent loans since the recession began, according to PayNet, a commercial lending analysis group. Reuters reports that the latest numbers show a moderate delinquency (accounts that are behind by at least 30 days) rate of 4.43 percent, .35 percentage points higher than the monthly average over the last nine years. PayNet's founder and president, Bill Phelan, predicts that despite some promising April statistics, the business cycle has not yet come full circle. "We're still in the thick of it," he says. The rates of severely delinquent accounts (90 or more days behind) and accounts in default (180 or more days behind) also rose, although by smaller margins. Taking one for the team. Chrysler filed for federal bankruptcy on Thursday, General Motors is on the fence, and a third of Detroiters live below the poverty line. To Bing Group founder and ex-NBA hall-of-famer Dave Bing, it sounds like a good time to throw his hat in the ring for Mayor of Detroit. Bing has no political experience, but ESPN thinks he’s got he the determination to turn the city around. If elected, Bing says he will turn the company over to his two daughters, and donate his salary to the police department. With "one shot" to turn the city around, says Bing, it had best begin with this election. Been there, done that. One T-shirt designed by small business owner, Mike Draper, expressed his sentiment about the growing health care problem: "America: Only the Insured Survive." Draper, whose screen-printing company pays all health insurance premiums for its seven full-time employees, testified in Washington last week in favor of a government-run public insurance option, touting it as the only viable alternative for the future. Draper believes the flat rate levied by a proposed Congressional bill would bring consistency to his year-to-year budgeting. "[Our employees] are all unmarried 20-somethings," Draper said. "But in five years, when everyone needs family policies, we might be in a little bit of trouble." More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Avoiding a Twitter Faux Pas; Ex-Jocks Face Trouble

2009-06-30T11:15:56-05:00

Top 10 places to spend your golden years. As U.S. News and World Report puts it, entrepreneurs never really retire, they just move on to their next project. In fact, according to a recent study by the Kauffman Foundation, people between the ages of 55 and 64 had the highest rate of entrepreneurial activity over the past decade. With that in mind, the magazine recently put together their list of the Top 10 Places for Entrepreneurs to Retire. So what makes a good retirement locale for entrepreneurs? US News searched for places with strong job growth, low unemployment rate, low business tax rate, reasonable home prices, and an affordable cost of living, among other factors. They also looked for places close to college campuses, which often share their incubators and research labs with local entrepreneurs. Topping the list is Arlington, Virginia, whose proximity to Washington, D.C. (and its lucrative government contracts) makes it a prime place for entrepreneurs who aren’t quite ready to take up shuffleboard full-time. Twitter users give British company a scolding. In a cautionary tale about the etiquette of using social media for business purposes, British furniture company Habitat was lambasted by Twitter users last week after it tried to link a gift-card promotion to the ongoing conversations about the violence in Iraq. The company tagged their gift-card posts with the marking “#mousavi”, which normally indicates that it was part of the larger discussion related to Iranian opposition leader Mir Hussein Moussavi. Needless to say, Twitter users were vocal in expressing their outrage. Habitat quickly posted an apology, saying, “We’ve been listening and we know 140 characters aren’t enough for a full apology.” (Via NY Times.) Entrepreneurial missteps of college basketball stars. The story of athletes turning to the business world after their careers end is not uncommon. But a detailed look at their entrepreneurial missteps is. To that end, the The News & Observer digs into the business ventures of Christian Laettner and Brian Davis, former teammates on Duke University's basketball team who also played in the NBA (Laettner for 13 years; Davis for one.) In the mid-1990s, the duo, along with a third partner, launched Blue Devil Ventures and set out to convert abandoned tobacco factories in Durham to apartment buildings. The initial project was a success, inspiring grad students and others to move downtown. But troubles soon crept up. "Buoyed by initial success in Durham and an increasingly fluid lending environment, Laettner and Davis shifted their gaze to restoring crumbling buildings in the blighted parts of other inner cities, rather than focusing on finishing in Durham first," the paper writes. The company went on to buy properties in Baltimore and Philadelphia. But now, their expansion plans for the Durham property--which includes planned office space, retail shops, and more apartments--are delayed and the city of Durham isn't happy. It's refusing to release more than $1 million in promised tax incentives until deadlines are met. Worse, the Blue Devil Ventures are at the center of at least five lawsuits, with former associates and friends (including Pro Bowl linebacker Shawne Merriman) seeking more than $6 million in unpaid loans. (Hat tip to peHUB.) Howcast steps out from Google's shadow. If you've ever wondered how to grow grass in someone's keyboard, you're in luck thanks to Howcast.com, a new DIY video-sharing site. That topic and others of equal uselessness grace the startup founded by three former Google colleagues. Howcast was intended to be a more humorous take on "how-to" than its predecessors, such as About, eHow, Expert Village, Videojug and 5min. "Coming from Google where you automatically have millions of eyeballs on your product to where you start something from scratch has been extremely challenging," said Sanjay Raman, Howcast cofounder. Nevertheless, he must have known what he was doing. Despite the current economic situation, the startup has garnered $10 million in funding, 80 percent from a VC investment. A greener end for retired office electronics. New laws across 18 states require electronics manufacturers to recycle consumers' outdated equipment rather than allowing its hazardous chemicals to seep through landfills and into the groundwater. While residents in states like Washington, where The New York Times reports more than 15 million pounds of electronic waste have been collected, have responded enthusiastically, manufacturers are less than giddy. "We think it is unreasonable that an individual industry be designated as trash collector," one Panasonic executive says. Many manufacturers would rather adhere to a national statute than try to keep up with wide-ranging laws that differ between municipalities. Environmental specialists, however, suggest the potentially poisonous problem could be dealt with earlier on in the process. "Maybe since they have some responsibility for the cleanup, it will motivate them to think about how you design for the environment and the commodity value at the end of the life," says one manager of the electronic waste program in Maine. How to avoid the next Bernie Madoff. Bernie Madoff's 150-year prison sentence, which ranks fourth on the list of longest white-collar prison sentences, closes the book on one of the uglier business stories to emerge in recent history. The Chicago Tribune takes the lessons learned from Madoff and lists some tell-tale signs to help ensure you are not placing your funds in the hands of a Madoff financial doppelganger. In her blog, Gail MarksJarvis details nine tips every business owner, entrepreneur and investor can and should do to avoid similar schemes. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Probing the Financial Crisis; Billy Mays Dies

2009-06-29T11:02:33-05:00

Pecora Hearings: the redux. Like the famous hearings led by Ferdinand Pecora in the early 1930s to investigate the cause of the Wall Street crash of 1929, Congress is developing the Financial Crisis Inquiry Commission, an investigative body that will examine the causes behind our current economic woes. The Pecora Commission produced the information and impetus for many of the financial reforms of the New Deal. According to the Huffington Post, the nominees for the commission, which will have six Democrats and four Republicans, will be finalized over the next few days. Of the names leaked by Reuters, the only one with the expertise to get the job done, says the HuffPo, is Brooksley Born, who chaired the Commodity Futures Trading Commission in the late 1990s. As for the Republican names leaked--like Sen. Jake Garn, a proponent of deregulation who sponsored a law that led to the S&L collapse--all but one, says the article, “could be an alumni society of the people whose policies helped cause the collapse.” The world loses yet another icon. The advertising community lost its own superstar yesterday with the death of TV pitchman, Billy Mays. The cause of death of the 50-year-old Mays is still being investigated, but Mays did report not feeling well after bumping his head during a rough landing of the U.S. Airways flight he was on Saturday. Mays sold over a billion dollars worth of the products he hawked, from Orange-Glo cleaner to OxiClean stain remover. The Chicago Tribune has a nice photo slideshow of TV's most famous advertising icons, of which Mays certainly has a place among the pantheon. For a closer look at how Ron Popeil, the godfather of all TV pitchmen made his start, click here. Will camp for tax credits. What would draw company executives to camp sleeping-bag style in a Baltimore auditorium? Friday, execs lined up five days early to apply for tax credits for angel investors who have helped fund their businesses. The applications can't be formally accepted until 9 a.m. Wednesday, but that didn't deter more than 10 company reps from getting there on Friday since the credits are distributed on a first-come, first-serve basis. Luckily the entrepreneurs were offered "lodging" inside University of Maryland's BioPark facility; last year they weren't so lucky and spent 12 hours parked on a downtown sidewalk. "[The turnout] shows how important this program is to biotech start-up companies and how important it is for Maryland to increase funding for the program," said BioMarker Strategies president Scott Allocco, the first exec in line this year. The program encourages investments in biotech start-ups by cutting taxes for 50 percent of an angel investor's investment. Colorado’s coming up green collar. While corporate America downsizes, Ascent Solar, a green energy cell manufacturer based in Thornton, Colorado, is hiring three or four people a week. The company, which was spun out of a technology incubator in 2005, is part of a trial run in Denver over the past few years to test out whether investments in renewable energy, infrastructure, and public transit may be a solution to the economic crisis. It’s the same strategy Washington wants to employ nationally. The results in Denver, says Slate’s Daniel Gross, show both promise and limitations. Governor Bill Ritter talks about spawning a “new energy economy” fueled by the state’s research universities, anticipated stimulus funds, and institutes like the National Renewable Energy Laboratory, which is located in the state. Companies like Abound Solar--which spun out of Colorado State University in the 80s, received $15 million in DOE funds in the 90s, and recently picked up $150 million in private investments--give hope. Still, says Gross, “There's a gulf between what the politicians promise and what the engineers think is feasible.” Hitting the links on the down-low. Once a crowning symbol of achievement and deserved relaxation, the golf course has become an incriminating place that some CEOs would rather avoid. USA Today reports that many CEOs have elected to either play golf more discreetly or stop playing altogether. Almost 22 percent of respondent CEOs in a 2006 USA Today poll belonged to three or more country clubs simultaneously, the story says, though many of them have cut their rounds now, in an effort to dodge allegations of executive excess. A June survey by Vistage International, an executive leadership organization, showed that 29 percent of CEOs are playing less golf and that 11 percent have dropped the game completely. One business development consultant said that charities are the ones who really suffer in this arrangement. Instead of playing in a public tournament that could raise much-needed charitable contributions, would-be philanthropists are playing privately. And while a start-up CEO faces a very different set of challenges than, say, AIG CEO Edward M. Liddy, the title itself is not well-received by the public. According to this month's Rasmussen survey, CEOs garnered the lowest favorable opinion of any profession. Back to the future? As the recession continues to strain businesses, their owners have reinvented the system of bartering. It used to be that in order to attain goods and services neighbors would trade a chicken for some milk, corn for candlesticks. Today, business owners are employing online services such as BizXchange, a Bellevue, Washington-based company that employs a system of trade dollars that business owners can use to trade products or services with other companies on the network, reports CNN Money. Others, like an organic eatery owner named Tina Ames, choose a more informal approach. Her trade with a local contractor? A new roof for an old truck. Typically, barter activity spikes during economic downturns. And as the recession lengthens, it seems that making purchases without cash may turn into more then a trend. In search of ethanol. Add the giant chemical and plastics maker Dow Chemical to the growing list of large corporations trying to successfully harvest hydrocarbons for fuel and chemicals. Dow is set to announce today that it is partnering with a Bonita Springs, Florida-based start-up called Algenol Biofuels to use algae to convert carbon dioxide into ethanol, The New York Times reports. While the companies hope to sell the ethanol as fuel, Dow's long-term goal is to also use it to replace natural gas in making its plastics. Algenol, Dow Chemical, and other partners on the project, including the National Renewable Energy Laboratory, aim to construct a plant that will produce 100,000 gallons a year. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.