Fresh Inc.: The Staff Blog

Dealing With Complexity; The End of the Oprah Effect

2009-11-20T11:30:59-05:00

A long goodbye to Oprah (and the Oprah Effect). It's official. Oprah Winfrey will announce to viewers on today's show that she will be retiring from her long-running talk show at the completion of the 2011 season. No need to shed a tear for Oprah, who has amassed a fortune reportedly in the neighborhood of $2.7 billion. Instead, think of all those businesses who will no longer feel the benefit of the so-called Oprah Effect, a significant surge in business thanks to a product mention on Ms. Winfrey's show. Here's a look at some Inc. 500 companies who have felt the spoils of the Oprah Effect and will surely be sad to see her go. How to deal with complexity. Leading a hyper-growth company means managing ongoing complexity. Venture capitalist Fred Destin asked ex-Match.com VP Joe Cohen, founder of Seatwave, Europe's largest ticket exchange, for his notes on how to do it well. Beyond the expected nuggets of wisdom--such as push your employees beyond what they think they're capable of and they'll feel empowered to deliver, or oversimplify and execute well--there are a couple surprises. For example, Cohen recommends ignoring the first request for anything. "If it's really important then they will ask again." He also suggests leaving the office each day with zero emails in your inbox and leaving the office once a week in the middle of the day to hang out with your family, even if only for half an hour. (Hat tip, peHUB) Learning to live with the big-box stores. When the hardware giant Lowe's announced they were opening a new store in the Baltimore area, you would expect the normal outcry from the local mom-and-pops. Instead, as the Baltimore Sun reports, local hardware stores have taken a surprisingly calm outlook on the new development. The small-business owners interviewed said they believe that local stores and the big guys both have their niche customers and that the two factions can co-exist. As one hardware-store owner said, "Do I want a Lowe's there? No. Am I terrified of it? No. People will still find us." The coming war for the web. In a blog post and a keynote speech earlier this week, Tim O'Reilly, the publishing entrepreneur and tech guru, warns of an impending "war for the web." O'Reilly observes that the dominant companies--Facebook, Google, and Apple--have made moves that attempt to wall off their offerings from those of other companies, which could make it more difficult for startups to gain traction and could eventually stifle innovation. "[I]t is becoming clear to me that we are heading into a bloody period of competition that could be extremely unfriendly to the interoperable web as we know it today," O'Reilly writes. He urges those developing new Web applications to "place your bets now on open systems" rather than cutting exclusive deals with the big players. Goldman Sachs: the new Dear Abby for small businesses. Earlier this week we told you about how two icons of corporate America--Warren Buffet and Goldman Sachs--were teaming up to inject $500 million into the small business sector . In the wake of the announcement, the Wall Street Journal reports that the investment bank is quickly morphing into "a Dear Abby of small-business woe," with hundreds of inquiries from small businesses eager to get their share. The five-year gift will hardly buck the overall decline in small-business lending, notes the Journal. And not all entrepreneurs see Goldman's contribution as laudatory. Andrea Audibert, who runs Trinity Construction & Investment out of Slidell, Louisiana says, "Goldman Sachs was part of what the problem was," adding that any potential help would merely constitute "a little retribution." Goldman's been all over the headlines recently. Today its investors expressed their frustration over the size of its bonus pool, which is on track to be the biggest in the firm's 140 year-history (about $717,000 a person a person for 2009). Black Friday bargains for small businesses. The day after Thanksgiving, lovingly coined "Black Friday," is historically known as the best day of the year for bargain shoppers. For small businesses, it's also a potential gold mine. USA Today offers several suggestions for making Black Friday a more painless experience, such as creating a list of things your business needs beforehand, shopping online for even better sales, and hitting up office-supply stores for all your business-related equipment. Radical Twitter overhaul. Stop the presses! Twitter has changed its homepage prompt from "What are you doing?" to "What's happening?" Valleywag asks a linguist what this means and parses: "Twitter's new slogan reflects the microblogging service's evolution from a venue for self expression into a forum for conversation, according to Welsh linguist David Crystal." The gossip blog translates: "So Twitter's users have, at the very least, moved beyond mere navel gazing and into arguing." Success in the mobile sphere. Some companies have definitely found ways to profit in the mobile market, but how many can say that one quarter of their users sign up on a mobile phone? Well, for one, Pandora can. The internet radio site, which has 38 million highly vocal users and counting, sees half of its first time users try it out on their iPhones, Androids, and BlackBerrys, according to GigaOM. Find out more about how to get your brand out to the mobile world. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Is Imeem going to MySpace?

2009-11-19T16:00:40-05:00

Imeem is a start-up with a great service (free online music!), lots of users (15 million, according to Quantcast), and a compelling story. Unfortunately, it's pretty darn hard to make it in the online music business. The start-up has struggled this year, because of a poor advertising market and high licensing fees owed to the record companies (these fees have been a perenial problem for online music start-ups and nearly shut down Pandora in 2007). Techcrunch reported in May that Imeem had, "risen from the ashes," by renegotiating with the record companies and raising several million dollars in additional funding. Now it appears that founder Dalton Caldwell may have found a home for the struggling music service--even if he probably won't walk away with a whole lot of money. MySpace has agreed to acquire Imeem for the "fire-sale" price of $1 million, plus an assumption of debt, according to AllthingsD. Curiously, neither MySpace nor Imeem has confirmed the deal. A MySpace spokesperson called the reports "rumors." I haven't heard back from anyone at Imeem but will update when I do. If the deal goes through, Imeem would join its erstwhile competitor iLike, which was acquired by MySpace earlier this year for $20 million. It's possible, of course, that the reports of an acquisition are false and that Imeem is still looking for outside funding or hoping to attract another acquirer.

How to Test Your Start-Up Idea and Etsy Hits it Big

2009-11-19T12:02:34-05:00

Steve Case's $300 million payday. It may not be much compared to that ill-fated, monster merger he presided over several years ago--the effects of which persist today--but Steve Case just won himself another big payday. His finance company, Revolution Money, will be acquired by American Express for $300 million. That's according to Revolution Money chairman and Case confidant Ted Leonsis, who blogged the sale. Though $300 million is a lot of money, it may not be the exit Case and Leonsis were hoping for, especially considering that they had raised close to $100 million in two recent funding rounds. Meanwhile, Om Malik is skeptical of the deal's merits: "Revolution Money has some kind of a next-generation payments technology that brings together offline and online worlds," he writes. "No one I know has either seen it or actually uses it. If there is one company that is going to do offline-online payments, that will be PayPal." A wine company's bizarre ending. The strange tale of wine entrepreneur Marc C. Anderson came to an end this week when he pleaded guilty to setting fire to a wine storage facility he ran in Vallejo, California in 2005. As reported in the New York Times wine blog, Anderson was a bon vivant who ran Sausalito Cellars, a service that offered to store fine wines for wineries and private collectors. Anderson hasn't explained himself, but prosecutors suspect that he started the fire to cover up the fact that instead of storing his clients' wines, he sold them off to support his extravagant lifestyle. The fire destroyed some six million bottles, which had an estimated value of between $100 million to $400 million. How to tell if your product is any good. Try the seven deadly sins test. Glenn Kelman, the CEO of the online real estate broker Redfin, says that if you can figure out which sin your product or service caters to, you'll know that your customers need, rather than merely want, what you're selling. Over at TechCrunch, Kelman outlines this test and seven others he has heard from venture capitalists, including "What's your secret sauce?" and "Why can't you grow faster?" Starving artists? Not on Etsy. Etsy, the online crafts market, has hit the big time, with total sales of $133.1 million last month, according to our friends at Fast Company. (Those are merchant sales; Etsy, like eBay, makes money by taking a small percentage from each transaction.) How did the online auction company do it during a recession? "Etsy seems to have figured out that it only gets richer if the artists they highlight can actually earn a living." We picked founder Rob Kalin as one of the coolest entrepreneurs under 30 back in 2008. And earlier this year, we described how Etsy used its open API to entice a small army of developers to build apps for free. Navigating Kenya's corrupt business climate After hearing an interview on NPR's Planet Money a new approach to development in Africa, an NPR listener wrote into the station with a story that illustrates the difficulty of doing business in Kenya. The listener, who lived and worked in Kenya, recounted the experience of Winnie Amada, a former journalist who decided to buy a restaurant in Kisumu. Powerful businessmen tried to outbid her. After the owner decided to sell it to her anyway, the businessmen persuaded her landlord to refuse to accept rent and then sue her for non-payment, and other business owners sued her for unnecessary disturbance. Only after using her connections with politicians was Amada able to reopen her business. A entrepreneur's idea of closure. Longtime tech entrepreneur Steve Blank says he's always been a guy who "liked to fail fast, move on, and not look back." But today he writes about the one time he just had to get closure. It involved two semi-trailers, $45,000, and a computer that could design a nuclear weapon. Gift giving during a recession. Although many business owners view giving gifts to customers as an expense, the Associated Press recommends looking at holiday spending as an investment. Holiday gifts, while they need not be extravagant, convey to a customer how much he or she is valued, and a valued customer will keep coming back to where they are treated well. Or, if your budget really is too thin for gifts, giving a customer face time is a great (free) way to show your appreciation. The secret to getting on the Inc. 500 list. It could be effective use of social media. That's according to researchers at the University of Massachusetts Dartmouth, who have completed the third installment of a study on the usage of social media among Inc. 500 companies. The most recent results showed a steady rise in blogging among Inc. 500 companies, with 45 percent of those surveyed now incorporating blogging into their business operations, compared to 19 percent in 2007, and 39 percent in 2008. This year's study asked respondents about their usage of specific social media sites such as Twitter, LinkedIn, Facebook, and MySpace, and found that 80 percent were using some type of social networking site, while 52 percent were on Twitter. You can view the complete results of the study, Social Media in the 2009 Inc. 500, here. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

When Tweets Go Wrong; Mobile Apps of the Future

2009-11-18T11:49:50-05:00

Wall Street giving to Main Street. No matter the motive, $500 million is one solid gift for the 10,000 small businesses that will receive funding from two of Corporate America's most well-known names. So who are the big backers? They just may surprise you. Small businesses team up to profit. Owning a smaller independent store or restaurant can be a double-edged sword. Your outlets have more personality than a major chain but they can't offer customers the sweet deals that come with economies of scale. Enter Original Restaurants, Fast Company reports, an umbrella organization that allows its member restaurants to reach out to consumers in their area through marketing programs, Rewards Card Programs, and customer satisfaction management tools. All these resources give the average participating restaurant a 2 to 5 percent spike in its bottom line, and the model can definitely work for other small businesses. See how restaurateur Danny Meyer saved hundreds of thousands of dollars through group buying and how other companies have pooled their resources to offer child care benefits. Poor Twitter etiquette on display at Web 2.0 Expo. Techies have flocked to New York City's Javits Center this week for the Web 2.0 Expo, but apparently many of the conference's attendees need a refresher course in Twitter etiquette. Internet Evolution reports that during a keynote address given by Microsoft researcher Dana Boyd, a giant Twitter screen behind her was flooded with snarky tweets from the audience lambasting Boyd's delivery. The flow of tweets caused the crowd to start laughing and Boyd to stumble through her presentation. Ironically enough, Boyd's presentation was entitled "Streams of Content, Limited Attention." The top mobile applications of the future. Amid the thousands of different apps for smartphones, picking one area for a profitable mobile start-up might be a daunting task. Fortunately, according to Read Write Web, technology research firm Gartner has compiled a list of the top ten mobile applications -- for 2012. While most of the categories are growing steadily, such as mobile music and instant messaging, Gartner predicts some newer technologies will see a huge jump. The user base of location-based services like Yelp or Loopt, for example, will surge from its current count of 96 million to 526 million. A noticeable omission from the list? This year's much-hyped virtual interface: augmented reality. "AR needs to grow out of being a technology you use 'because you can' to one you use 'because you have to,'" the post says. What area will you choose? Teenage entrepreneurs hit the big screen. Young entrepreneurs are coming to an AMC theater near you and, this time, they are the stars. In the documentary Ten9Eight, high school students raised in low-income communities tell their stories as they compete for the top prize in the NFTE business plan competition. Former Olympian Mary Mazzio, the director and producer of the film, tells us why she thinks Ten9Eight can help inspire future entrepreneurs everywhere. RIP to an RV entrepreneur. Anyone who has ever answered the call of the open road might bow their heads in a moment of silence for the passing of a man who helped revitalize America's RV industry. As the Wall Street Journal reports, Wade Thompson, who died last week at the age of 69, purchased the iconic Airstream brand of RVs in 1980 and turned it from a dying business to a money maker within a year. As one of the founders of Thor Industries, Thompson and his partner brought a dozen RV manufacturers under their company umbrella and eventually became the biggest RV manufacturer by sales. At its peak in 2006, Thor Industries had sales of $3 billion. When speaking of the prospects of the RV business, Thompson was fond of saying, "As long as there's a Grand Canyon, there will be an RV industry." Obama administration to hear from small businesses. Bankers, policy makers, and business owners will meet with Obama administration officials today to discuss the collapse of small business lending. SBA head Karen Mills and Treasury Secretary Tim Geithner, among others, will be meeting in response to a recent Treasury report that found that the nation's largest banks have decreased lending to small businesses by more than $10 billion during the past six months, CNN Money reports. With some small businesses in a bind, owners are looking everywhere for lending. But if you're an affected business owner now looking toward your family for financial help, you may want to read this first. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Why Won't VCs Tell You Why They Turned You Down?

2009-11-17T12:04:09-05:00

Foursquare releases its API in the race to dominate location. Foursquare, the suddenly white hot location-based social network, released its API to the public yesterday. And Mashable is predictably bullish about the results, making the argument that just as Twitter's meteoric rise depended on developer interest around its API to build things like Twitter desktop and mobile apps, so will Foursquare's API help legitimize the service and catapult growth. Foursquare, which has already picked up $1.35 million from Union Square Ventures, lets iPhone and Android users check in and notify friends from locations like bars or restaurants. Developers can use the API to visualize data generated by its users or create new ways to check into its service. What's more, argues Mashable, Foursquare's API and the real-time, location-aware nature of the mobile service, could help prove to the world that location really is everything. But GigaOm reports that Foursquare is hardly alone in the race to build a database of the world's coolest locations. Nextstop, a user-generated travel site founded by ex-Google product managers, also released its API. And Mozilla, uLocate, and Geodelic are steadily building their own databases. How to pick the right idea. It sounds easy, but any entrepreneur will tell you that choosing the right idea for a business is often the hardest part. Here's a very interesting video of Josh Petersen, one of the co-founders of 43 Things, speaking at Seattle 2.0's StartupDay 2009, on how to come up with ideas and how to choose which of your ideas is the best one. Well worth the time. (Via A Sack of Seattle.) Why won't VCs tell you why they turned you down? Most entrepreneurs find the lack of feedback that comes with a VC's rejection unhelpful at best. Foundry group co-founder Jason Mendelson tries to address the frustration by drawing from his own experience. If your pitch is too far afield from the firm's interests, he explains, all that's prudent is a quick email saying the fit doesn't work. Don't expect feedback on your business model when it's only taken a cursory look to see that it's not something his firm would invest in. There have also been instances where Mendelson's noticed something with his portfolio companies that might be relevant to a company's pitch, but he's elected not to share. The toughest scenario is "when the main issue with the company is the entrepreneur(s) themselves. It’s not easy for me to say 'I wouldn’t invest in you' and I try to stay away from that, because people change and improve over time." On the flip side, if the entrepreneur behind the pitch doesn't excite him, Mendelson adds, its likely he'll have less to say. (via peHUB) Office Envy: Twitter's New Digs. Twitter recently moved its San Francisco headquarters around the corner to a larger space previously occupied by social network Bebo. TechCrunch gathered employee photos from around the web. Expect a lot of Twitter-themed art (think birds and @ symbols), as well as DJ booth, twee deer sculptures, and, ehem, vanity mirrors in the toilet stalls. The dark side of developing apps. Reports of scrappy young software companies developing hit apps for smart phones have become the feel-good success stories of the past few years. However, as Wired reports, there are a number of pitfalls out there for small companies who place all their hopes on the whims of large corporations such as Google or Apple. One example is the software start-up Hello, Chair, which worked for nine months on an iPhone app called Appsaurus, which recommends other apps based on those you already own. Hello, Chair's hard work proved all for naught when Apple introduced their free app recommendation tool called App Store Genius. As one of the Hello, Chair developers explained, "That's one of the scariest things: If Apple moves an inch, they crush a bunch of little developers." While you can't fault companies like Apple or Google for developing their own apps, there has been a good deal of scrutiny over the somewhat arbitrary apps approval policy. In fact, today's ReadWriteWeb tells the story of three apps developers who have signed an online petition asking Apple to okay their apps, all of which have been awaiting approval for months. The speed dating model of hiring Small companies looking to hire are buried under a mountain of resumes in the current employers' market, and making the wrong decision can be costly. I Love Rewards, a Wellesley, Massachusetts-based consulting firm had 1,200 candidates for nine openings but they narrowed it down to 68 in two easy steps, reports The Wall Street Journal. First they asked candidates to fly to an open house in Toronto which decreased the pool by 800. Then they held a series of speed dating-style interviews to locate the most enthusiastic candidates. Other companies have found success in tapping the talent pool by using applicant tracking software and video interviews or by asking hard-hitting questions like "How would you design Bill Gates's bathroom?" Why accounting matters. It's not glamorous and it won't turn a bad idea into a good business. At the same time, all good businesses have it. Entrepreneur and New York Times small business blogger Jay Goltz delves into the paradox of accounting. Using social media for giving. According to our friends over at Fast Company, Chase Bank is embarking on a crowdsourcing effort to raise money for charities via Facebook. The app, called the Chase Community Giving Program, allows users to pick from over 500,000 charities to receive money from Chase's philanthropy fund. The candidates range from a number of categories, such as healthcare and environment, with a $1 million prize going to the top charity ($100,000 for the top five, and $25,000 for the 100 finalists). The winners will be announced on December 15. A head count of 300 million Facebook users provides Chase with a pretty formidable crowdsourcing tool -- could this spur a trend in marrying social media with philanthropy? More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Follow us on Tumblr. Friend us on Facebook.

A Battle Over Pigs Raises A Stink; India's R&D Explosion

2009-11-16T11:42:56-05:00

Lessons learned from a million-dollar mistake. Entrepreneurs are forever learning from their own mistakes, so once in a while it's nice to learn from someone else's for a change. Tech entrepreneur Neil Patel shares the story of his million-dollar mistake made while pursuing a web-hosting start-up. Patel lists a number of things that went wrong with the businesss, poor money management and a lack of communication between the principals were among the key missteps. But perhaps the biggest mistake Patel made was not knowing when to say when. Patel and his partner kept on throwing good money after bad until the situation finally came to a crashing halt. Patel has since recovered and has gone on to further success with new ventures. As he explains, "What separates the true entrepreneurs from the phony ones is that the true entrepreneurs don't give up." Battle in Butchertown. There's a small-business feud brewing in the trendy Louisville, Kentucky neighborhood of Butchertown. And the cause comes from the very things that gave the area its name: pigs. The Wall Street Journal has all the dirty details. How to break bad work habits. For those in the professional world, it's easy to fall prey to bad habits -- procrastination, poor time management, and impatience are all examples of behavior that can affect the productivity of one's work or business. Fortunately, says Web Worker Daily, training the brain to adopt good habits doesn't take as long as most people think. Citing recent scientific research in the field of neuroplasticity, or the brain's ability to reorganize itself, the article says new habits (or "neural connections") can be learned within 30 to 60 days, if new information is presented every day. To combat consistent unpreparedness or tardiness for meetings, for example, set a computer or phone alarm 30 minutes before each meeting to look over notes and agendas. "A habit is an involuntary, unconscious action," said Larry Tobin, co-creator of Habitchanger.com, where customers can join a 42-day habit breaking program. "They are something we have taught ourselves to do, so it is possible to unlearn them." Twitter nixes suggested users list. Once a quick way for a company or individual to gain as many as 370,000 new followers within the first 30 days among its ranks, Twitter's suggested user list is finally being laid to rest. Co-founder Biz Stone told the press that the controversial list will be replaced by "something that is more programmatically chosen, something that actually delivers more relevant suggestions" (via Read Write Web). See how one CEO is making Twitter work for his company. Silicon Valley watch out: India's transformation into a global R&D hub. In one of the most talked about stories on TechCrunch, entrepreneur-turned-academic Vivek Wadhwa reports that "while the West was sleeping, Indian IT morphed into a giant R&D machine." That outdated picture of a nation of call center workers and low-level computer programmers is now a preferred outsource provider of crucial R&D in sophisticated, higher value-added fields like semiconductor design, aerospace, automotive, network equipment, and medical devices. Both the Palm Pre and the Kindle have key components designed in India and Indian multinational firms like Tata and Reva are now poised to tackle U.S. and European markets. What's missing, however, is early stage venture financing and that pillar of American capitalism: grassroots entrepreneurism. In that department, India's lagging behind China, which boasts savvy start-ups making the most of government incentives and recruiting talented Chinese returnees as its CEOs and CTOs. But that doesn't mean that startups there aren't smart and hungry, cautions Wadhwa, who spoke to a 100 different young companies during a recent trip. "Many of them are solving problems that U.S. companies have thus far failed to solve and doing it with fewer resources," he writes. And U.S. VCs, like DFJ, are following the innovation trail. There isn't yet enough momentum to incite an explosion in venture capital. But Wadhwa says it will happen "sooner than you realize." An eBay for the non-tech savvy. There's one major demographic that remains untouched by e-commerce: the technologically-challenged. Glyde, a Palo Alto, California-based start-up conceived by Simon Rothman is counting on its ease of use to win over that demographic and help it compete with stalwarts like eBay and Amazon. According to the ">New York Times, Rothman's target market is people who had never sold items on the Internet because it was too difficult. "We want the middle-aged Midwestern soccer mom to easily be able to buy and sell her stuff," he said. "It's a pretty straightforward ambition." More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

How to Market on Facebook; Win a Franchise

2009-11-12T11:57:02-05:00

No health care reform, say most entrepreneurs in Congress. The New York Times has the breakdown, showing that eight of 11 entrepreneurs in Congress voted against the recently-passed health care reform bill. Four of those who voted against the bill? Democrats, all of whom represent districts won by John McCain in last year's presidential race. Here are the stories of the most recent entrepreneurs to reach Capitol Hill, as well as the CEO of last year's No. 1 Inc. 500 company on how to fix health care. How to market on Facebook. Building online communities of fans, and capitalizing on demographical information are just a few of the ways that more and more businesses are finding Facebook to be an indispensable marketing tool, The New York Times reports. Creating a web presence for your company with Facebook can be a piece of cake, by using features such as fan pages, which allow you to build a deeper relationship with current customers while targeting potential new ones. CEOs miffed by lack of VC operating experience. A new survey conducted by VentureSource shows that while most start-up CEOs are happy with their VC board members, a common sentiment was that less experienced VCs, or the "investment banker types," are a burden to have on a board (hat tip to The Wall Street Journal). One anonymous respondent phrased it bluntly in response to an open-ended question at the conclusion of the survey. "Two things kill companies the fastest, bad management and bad boards. We have too many VC board members who have never run a company and have no idea how to help management." Want to avoid this kind of problem? Check out our resources for advice on building a great board. Love yogurt, win a franchise. Well, it's a little more difficult than that. But the TCBY yogurt chain is indeed giving away a franchise to an aspiring entrepreneur, 21 years of age and older. Click on the link above, fill out the entry form, and create a two-minute video that makes the case for you being the chosen one. Twenty-five semifinalists will be notified by the first week of January. Obama stepping up broadband stimulus funds. The good news for small business owners, especially those in the hinterlands, is that the government is speeding up plans to dole out broadband stimulus cash. Many small businesses are being stifled by the current broadband arrangement and to that end, $4 billion in funding will be dispersed, though seven times that amount has been requested by 2,200 grant applicants, according to Ars Technica. Here's one company that's trying to make it easier for customers to find a broadband service that works for them. Nine states with money trouble, California-style. Entrepreneurs need to be attuned to the financial health of the states where they set up shop and a new study by the Pew Center on the States charts all 50 states according to their "fiscal peril." States were scored on six factors: "high foreclosure rates; increasing joblessness; loss of state revenues; the relative size of budget gaps; legal obstacles to balanced budgets," and bad money-management. After the Golden State, Arizona, Rhode Island, and Michigan were closest to the brink. As we wrote the other day, though, a floundering government can be a golden opportunity for entrepreneurship. Just look at some members of the Pew's endangered list that were Inc. 500 hotspots. How to deal with your boss's negative feedback. While everyone reacts differently to criticism in the office, there are ways to respond calmly, without flying off the handle and becoming argumentative. The Associated Press offers several suggestions on how to take the criticism in stride, such as putting your emotions on hold, first and foremost. Then, you can approach the situation with more positivity, and work to improve the feedback for next time. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

India's Entrepreneurs Unleashed; Google's New Language

2009-11-11T12:58:26-05:00

From the annals of world domination: Google launches its own programming language. One of the pillars of Google's success has been efficiency, whether that's serving search results or processing data, says Mashable Ben Parr. On the heels of launching its mobile operating system, Android, which Motorola has already adopted for its Droid phones, and collaboration tool Google Wave, the search giant is now "looking to tackle the underpinning code that runs the web," reports Parr. Go, as the language is called, is an open source development code that the company hopes will reshape web development and software in its favor. Go is based on the C programming family, but it incorporates elements of Python (the development language of choice at Google) and the Pascal/Modula/Oberon family that Mashable says makes speedier and more dynamic programs. Get your programmers ready. While the government dithers, India's entrepreneurs step in. Governments are notorious for getting mired in their own bureaucracy in the face of public needs, which is where entrepreneurs often step in. Harvard Business Review has a piece that profiles some up and coming social entrepreneurs who are stepping in to fill the government gap. One example is Harish Hande, who runs SELCO, a solar energy distribution company. Fifteen years ahead of any similar government initiatives, SELCO has sold over 100,000 highly customized lighting systems by accommodating urban and rural poor with a flexible "power-by-the-hour" business model. Picking up government slack could be an easy model for U.S. entrepreneurs to follow. Any takers to fix health care? For more news about the Indian entrepreneurial scene check out Inc. India. Google's Gift to travelers. It's free Wi-Fi! From now until January 15th, the search giant is giving away free wireless internet access at 47 airports--including Las Vegas, Boston, and Miami--and on all Virgin America flights. The full list of airports is here and CrunchGear has the news. How much is Twitter really worth. "Less than you think," writes Om Malik, citing a new research report. Of course, "less than you think" is still pretty darn high. NeXt Up estimates that Twitter is worth roughly $600 million, thanks to its substantial user base--some 70 million users--and high potential for revenues and profits. The firm estimates that Twitter will generate more than $100 million in revenue by 2013 and close to $150 by 2014. But the valuation is a lot less than the $1.1 billion figure Twitter received from its latest investors, Malik says. The reason? "We believe that most revenue generation options available to the company have the potential to alienate at least some of Twitter‚Äòs user base," according to the report. "Twitter may not have adequate time to revise its models before it loses its critical mass and reputation," it adds. That helps explain why the company has been so hesitant to try to make money. Tech start-up acquisitions signaling better times? Some big-name companies embarked on early holiday spending sprees this week, such as Google, who bought mobile ad start-up AdMob for $750 million, and Logitech, who acquired LifeSize, a video-conferencing start-up, for $405 million. According to the New York Times, the high-profile purchases could indicate a renewed interest in M&A, which, in turn, might point to a recovering economy. Jeff Brody, a founding partner of Redpoint Ventures, which was one of the backers of the LifeSize deal, told the Times that although the number and value of acquisitions has been down, the improving economy has forced companies to increase their offers. "As the I.P.O. market has started to come back and as public company stocks have recovered, we have seen a surge in M&A interest and prices." Click here Seven pioneers are helping to diversify the Motor City. After decades spent at the mercy of the auto industry, Detroit is branching out. Entrepreneurs looking to build more efficient batteries, develop artificially intelligent robots and make more eco-friendly clothing are bringing jobs in technology, medical research, and design to revive Detroit's workforce, reports CNN Money. Despite the fact that green has never been the Big Three's forte, Ann Marie Sastry, whose company Sakti3 is developing lithium-ion batteries, sees opportunity in locating her start-up close to potential collaborators and customers, "There is a wealth of knowledge and understanding of vehicles, and a wealth of people who store this knowledge." Other entrepreneurs, like eco-design start-up Guffly.com, came for the funding ($300,000 worth) and support. Says CEO Chanell Scott, "It's been great for us to have a community that's so receptive. People are excited to have new businesses here." More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Follow us on Tumblr. Friend us on Facebook.

Biz Tips from the Boston Celtics; When to Dump a Client

2009-11-10T11:39:21-05:00

Filing for customer divorce. Some small business owners are finding it difficult (and expensive) to maintain relationships with delinquent or discount-hungry customers, according to The Wall Street Journal. Shedding those clients, which was the option chosen by Kishau Rogers, owner of Richmond, Virginia-based Websmith Group, can often make it easier to endure harsh economic times and turnaround sagging profits. By dropping her late-paying customers, Rogers, whose firm develops websites, was able to reallocate 20 percent of her time to other clientele, and put the business's 2009 revenue on track to rise 10 percent. While dropping customers can be risky, "to continue to have a customer that's losing the company money with every transaction is not a good strategy either," said Valarie Zeithaml, a marketing professor at University of North Carolina at Chapel Hill. For more tips on giving difficult customers the boot, click here -- and be gentle. Customer Appreciation 101 from the Boston Celtics. With a record of 7-1, and perennially sold-out home games, the Boston Celtics have developed a fiercely-loyal fan base. To help keep that fan base energized, and to show their appreciation, the Celtics have become one of the most social-media savvy teams in all of professional sports. As the Boston Globe reports, the team posts exclusive locker room footage on YouTube, has an interactive stats game on their Facebook page, and regularly sends Twitter messages to their 21,000 followers. A smart move from a team who realizes that while a sold-out stadium is a good thing, it is important not to forget about those fans who couldn't get a seat. As the Celtics president, Rich Gotham, explains, "Now that we're at this sold-out state, it's more difficult to get into the game and fans can't get tickets. We want to make sure we don't forget about those fans. We want to keep them interested and keep them loyal." The evolution of start-up ecosystems We've covered various start-up hotspots in the past, but Fred Wilson has an explanation of how a start-up ecosystem evolves over time. He says it's important to think of the infrastructure for start-ups, whether in Boston, the Valley, or the next nexus, as growing and developing over decades. The first decade is largely trial and error, decade two is when VCs and companies have firmer footing and a network of resources, and in the third decade, Wilson says the ecosystem is fully formed. Wilson then applies this trajectory to "new startup ecosystems developing in Europe, Asia, and elsewhere. It can happen and it will happen. But it takes time. And you can't fast forward because we are talking about experience which can't be manufactured." Mark Cuban has some advice for Rupert Murdoch. Screw Google! The Dallas Mavericks owner, HDNet founder, and prolific blogger weighs in today on the future of newspapers. He recommends that News Corp. owner Rupert Murdoch should simply prevent Google's bots from indexing its papers and instead rely on Twitter and Facebook to get the news out. "TWITTER POSES NO THREAT to any destination news site," Cuban writes. "140 characters does not a story make. Find it on twitter, link to a story on say, FoxNews and everyone is happy...Having to search for and find news in search engines is so 2008." Meanwhile, Cuban seems to be interested in buying the Los Angeles Dodgers. Things to know before starting a website. Web designer Erik Parkin takes a turn as guest blogger on the Seattle Post-Intelligencer's business blog to talk about the four questions you should ask before building a website for your small business. As he explains, simply telling a designer to "make it look cool" doesn't give the designer nearly enough information about what your company does and how you plan on using your website. Parkin's four questions should help any business owner stay focused on the purpose of the website, which is to enhance the business, not detract from it. A more professional tweet. The big-name partnerships just keep piling up for Twitter. First were the deals with Microsoft and Google to include tweets in search results. Now, as The New York Times Bits blog reports, Twitter has a struck a deal with professional networking site LinkedIn. LinkedIn users will now have the option of sending status updates to their Twitter feed, while also showing their most recent tweets in their LinkedIn profile. The payoff for Twitter? Increased exposure and added revenue, though, not surprisingly, the financial terms of the deal are undisclosed. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Playfish Sells Out and A Plan to Save Detroit

2009-11-09T11:50:06-05:00

Playfish sells to EA for $275 million. So it turns out that there's a lot of money in virtual goods. Playfish, a London company that makes Facebook's Restaurant City, just sold itself to video game giant Electronic Arts for $275 million in cash, with the prospect of an additional $100 million in earn-outs. Techcrunch says, "Social games are increasingly popular and Electronic Arts needed to buy one of the top players: Zynga, Playfish, or Playdom." Playfish has revenue of $75 million a year. How to save Detroit. This month's issue of Inc. spotlights one good idea: An entrepreneurial ecosystem built around the electric car. Of course, if that doesn't work out, we can always turn the city into farmland. That's the nutty plan floated by a group of architects and reported in the New York Times. "[T]he sheer size of Detroit — a largely vacant urban prairie bigger than Manhattan, Boston and San Francisco combined — makes it a prime test case for the 'shrinking cities' movement. And so an American Institute of Architects study imagines Detroit reduced into a metro core surrounded by green belts, 'urban villages' and banked land," the Times says. It gets weirder: "Even raccoon- and pheasant-hunting is not unheard of within the protein-poor city’s limits. Yes, a retired truck driver reportedly shoots raccoons and sells them as food, at $12 per carcass to feed a family of four." The Netflix model hits the runway. According to a story by the New York Times, it will soon be as easy to rent couture dresses as it is to rent Netflix DVDs. Fledgling start-up Rent the Runway, founded by Jennifer Hyman and Jennifer Carter Fleiss, plans to allow customers to rent, via mail, thousand-dollar dresses for less than $200 each. Hyman came up with the idea after watching her sister shell out cash for a dress she'd only wear once to a wedding. After solidifying a business plan with Fleiss, the duo secured seed financing from Bain Capital Ventures to build its inventory of 160 styles. Although the article questions the long-term viability of the company -- "No one wants to rent last season's dress," quipped one fashion blogger -- Rent the Runway's current customers seem pleased with the service. Small business owners play Scrooge with holiday bonuses. Small-business employees expecting a holiday bonus may end up feeling a bit like Bob Cratchit this season. The Atlanta Journal-Constitution reports on a recent American Express survey that reveals a significant drop in the number of business owners who are planning on giving their workers gifts or cash. This year, only 31 percent of owners will dole out an end-of-year bonus. That's much worse than last year when 44 percent of owners planned on giving bonuses. Even worse, of the owners who still plan on giving bonuses or gifts, 42 percent said they'll give fewer or cheaper gifts to their employees. As an American Express adviser explained, "Business owners are still feeling pinched cash wise." In other words, "Bah humbug." For a look at how some businesses deal with having to cut employee bonuses, check out this story from the Inc. archives. Fred Wilson on Valuations and Option Pools. Fred Wilson breaks down one of the trickiest negotiations in early stage financing: Whether to put aside stock to issue to employees at a later date. Although setting aside an option pool is about nominally about compensating employees, it's also a negotiation tactic, or, as Wilson concedes, a way for the venture capitalist to lower the price. Wilson advises VCs to be upfront about that and for entrepreneurs to research the market value of their business with and without an option pool. Spark Capital's Bijan Sabet follows-up on Wilson's post with recommendations on how to structure terms and rights associated with option pools, including vesting and change of control. How to get more from your LinkedIn account. Although there are many professional social networks, LinkedIn is still one of the biggest and most useful. Mashable writer Sharlyn Lauby offers advice, about seven ways you can get more from your account. For instance, she recommends including a photo in your profile, asking for recommendations, and using groups to expand your reach. Succession planning for your small business. One of the most difficult decisions any family business owner has to make is who to pass the baton to when it's time to move on. The Wall Street Journal provides some tips, starting with planning a retreat away from the office to discuss the idea with all family members. You can also get some advice straight from successful family business owners featured in Inc., here. Can you patent an idea? Business method patents have been around for decades--Clarence Saunders was granted a patent for the idea of the "self-serving store" in 1917 for his chain of Piggly Wigglys--but in 1998 a Supreme court decision produced a flurry of new patents for business methods, especially new types of software. Now the court plans to reevaluate that decision, and companies such as Google, Yahoo, and Symantec are weighing in, reports the Wall Street Journal. "Certainly, some of the more extreme positions that are being urged before the court could eliminate patents with hundreds of millions, if not billions, of dollars in value," says Andrew Pincus, a lawyer who filed a brief on behalf of a software trade group. Check out Inc.'s article on filing a patent or guarding against infringement on one you already have. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

The Truth about Cyber Monday; Tour the Gawker Offices

2009-11-06T12:02:51-05:00

Tour a Start-up's Office: The Gawker edition. Gawker Media, the parent company behind blogs like Valleywag and io9, has been experiencing a growth spurt of 40 percent year-over-year. Now Silicon Alley Insider takes us inside CEO Nick Denton's "steampunk" headquarters in downtown New York as part of its new tour a startup photo feature. What should you expect from inside the belly of the blogging beast?: A couch straight out of the Matrix, a roof deck for courting advertisers, the requisite glass-walled conference room, and a "comfortingly familiar" library-like atmosphere to soothe recent college grads. The myth of Cyber Monday. Online advertising company Permuto offers up an interesting infographic on the history of Cyber Monday, the Monday following Thanksgiving which is the online equivalent of Black Friday. Also known as every e-retailers' favorite day. The term, which has now become part of our cultural lexicon, was reportedly first mentioned in a press release from Shop.org on November 21, 2005. Contrary to popular belief, Cyber Monday is not the biggest online shopping or spending day of the year. In fact, that day typically occurs sometime between December 5 and 15th. However, Permuto theorizes that the ever-growing hype over Cyber Monday may lead to a self-fulfilling prophesy in which this year's day may actually become the biggest online shopping day of the holiday season. (Hat tip to Digg.) E-commerce health is either thriving or diving. About those e-retailers: two reports released this week are painting vastly different pictures of the online retail landscape, with one estimating that e-commerce saw a 2 percent drop in Q3 and the other charting expected 8 percent growth in November and December compared to last year. So who to believe? There's no easy answer according to the Wall Street Journal. comScore and Forrester Research, who respectively churned out the conflicting numbers use dramatically different approaches to evaluate online shopping. comScore measures the behavior of a large body of volunteers while Forrester surveys consumers and retailers as well as pooling data on things like Google ads to flesh out the picture. Forrester analyst Sucharita Mulpuru pointed to Amazon, which is predicting Q4 growth between 21 and 35 percent, to bolster the group's findings. "The entire rest of the industry would have to be really negative" to lead to a down quarter, she said. Boston vs. Seattle vs. Boulder: how does the climate for tech startups measure up? peHUB points to a thoughtful post from Seattle business blog Xconomy which has the highlights from a VC panel comparing startup culture in different cities. Boulder has the nation's highest per capita of computer scientists and PhDs--not to mention a wealth of executive leadership imported in during the dotcom boom--but around 2003 the "endless cocktail party circuit" got stale, says the Foundry Group's Brad Feld. He launched Tech Stars, a seed fund and mentorship program, to make first-time entrepreneurs the new core of the ecosystem--partnering them with experienced founders and energizing the community in the process. Chris Sheehan from CommonAngels said Boston has a deep bench of entrepreneurs, and the wealth created from startups is being reinvested via VCs. But "the dispersed ecosystem" makes things difficult, which is why clusters are forming in the city around mobile, gaming, Web, e-commerce, tech, and marketing. In Seattle it looks like the next wave of angels and entrepreneurs will likely come out of Amazon, but Steve Hall of Vulcan Capital was frank about the city's perceived shortcomings. "People outside Seattle, particularly fund investors, believe that Seattle is a little too nice. We enjoy our lifestyle too much. Boulder may have a little of this as well. That doesn't build the most competitive companies when you've got people in the Valley who live and breathe this for sport." Calling all NYC entrepreneurs. The New York Public Library's Science, Industry, and Business wing has announced their first annual New York StartUP! Business Plan Competition for any aspiring Big Apple entrepreneurs. The winner will receive $15,000 to help start their business, while other cash awards totaling $28,000 are also available to runners-up. In addition to the money, entrants will also receive orientations and business mentoring. Full details and due dates can be found here. Chairs that Tweet. The hip furniture maker Blu Dot picked a novel marketing campaign to celebrate the first anniversary of its New York City store. The company placed 25 blue chairs, which retail for $129 each, in New York City and let people grab the free samples. The catch? Each chair has a cell phone with a GPS chip attached to the bottom. When someone picks one up and takes it home, the chair sends a Twitter message with its location. The second catch? If you grab a chair, you get followed by a video crew and interviewed for a promotional video. But you get to keep the chair! Fast Company has some nice pictures of the campaign and asks, justifiably, "But is it marketing?" We're not sure either, but the promotion is working well as a PR stunt. Unemployment hits 26 year high. The unemployment rate hit 10 percent last month, for the first time since 1983. The Wall Street Journal has the historic (and depressing) news, but notes that it could be worse. Only 190,000 jobs were lost last month, compared to 741,000 jobs lost in January. Welcome to your jobless recovery. Employers who are hiring consider their options. Despite those abysmal unemployment numbers, some small companies are actually switching to hiring mode. But should that new employee be hired full-time, temporarily, or as a contracted position? The AP reports that despite the onerous responsibilities that come with hiring someone on staff--from federal and state labor laws, workers compensation insurance, and employment taxes like Social Security and medicare--hiring full-time employees is the often best way to build the business for the long-term. Said Arlene Vernon, president of the Eden Prairie, Minnesota-based HR consulting firm, HRx Inc., "If you know you're growing, then find someone who's really committed. They're going to think for the benefit of the organization." More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Biz Lessons from the Poker Table; Google's New Idea

2009-11-05T11:19:28-05:00

Yanks win, but few spoils for Bronx businesses. Congratulations to the New York Yankees, for winning (yet another) World Series championship. But while the team celebrates, owners of the struggling small businesses whose shops flank the new $1.5 billion House that Steinbrenner Built, are feeling more like the defeated Phillies. As the New York Times reported earlier this week, despite the Bronx Bombers' winning season, sales at local businesses were down significantly from previous years. New traffic patterns around the stadium are one reason for the drop, but some vendors blame the team's owners for opening up more concession stands outside the stadium. "I think what they're trying to do is force everybody else out," said one business owner. "It's dismal, very dismal." Google's new e-commerce offering. Google's ever-expanding product line just got even bigger thanks to its new Commerce Search, a search function tailored for retailers. The service, which incorporates Google's search capabilities into your online store, carries a price tag of $50,000 a year according to TechCrunch, but Google says it's worth it. Their claim is that faster search speed will help customers navigate to what they want quickly, making them more likely to buy. Other perks include the ability to customize the search function to match the rest of your site and integration of other Google products like Google Analytics. Entrepreneurship lessons from the poker table. In business, as in poker, sometimes you have to know when to fold 'em. So says serial entrepreneur and blogger Eric Ries on GigaOM. Ries takes the lessons he's learned from watching the World Series of Poker and explains how entrepreneurs and poker players share many of the same qualities. Namely, "Both rely on acting strategically under conditions of extreme uncertainty. And, in both, small changes in your odds of winning can have a big impact on the final outcome." Ries goes on to point out that just as in poker where amateur players sometimes beat the pros, many successful businesses are run by generally poor entrepreneurs. A frustrating truth in both cards and business. As Ries says, "Just because someone has had a success doesn't necessarily mean they understand why they were successful at all." For a look at an entrepreneur who helped launch the professional poker phenomenon, check out this profile of the World Poker Tour's Steve Lipscomb from the Inc. archives. The Droid arrives. Verizon has been courting app entrepreneurs with those creepy commercials for its new smart phone. The Motorola Droid comes out this week--and the Wall Street Journal's Walt Mossberg has a review. Long story short: The phone is pretty good. "It's the best super-smart phone Verizon offers, the best Motorola phone I've tested and the best hardware so far to run Android," he writes. But will the Droid, named for Google's Android operating system, be able to replace (or join) Apple's iPhone as the preeminent platform for app entrepreneurs? That seems unlikely in the short term. Mossberg notes that the iPhone marketplace currently dwarfs the Android's offering, and he finds a number of problems with the new phone, namely a cramped keyboard and some software bugs. Skype founders settle, finally. Janus Friis and Niklas Zennstrom's four year old sale of Skype to eBay just got a little sweeter. The pair, who unloaded the online phone company for roughly $3 billion in 2005, will get 10 percent of a newly independent Skype, two board seats, and an option to buy more stock. Kara Swisher has the news and says that the deal marks an end to legal wrangling that stemmed from a dispute over software licenses and over eBay's decision to sell Skype to an investment consortium that included the former CEO of another of Zennstrom and Friis's companies. Swisher says that the lawsuit was especially fierce, "using embarrassing emails and making pointed accusations of...plotting all kinds of nefarious schemes." The power of women-owned businesses. Last month, the Center for Women's Business Research released a study which found that 28 percent, or an estimated 8 million, of all U.S. businesses were women-owned. The study also showed that those 8 million cross-industry businesses created or maintained 16 percent of the country's jobs. However, only 4.2 percent of the nation's revenue is generated by women-owned businesses. The Center plans to approach the Obama administration, the Small Business Administration, and House and Senate small-business committees to request more resources and programs in support of the women business owners, reports the New York Times. On how the sector of support for women business owners needs to expand, executive director of the national Women's Business Council, Margaret Barton said, "Women really have to fall in love with running a business. They have to move into the state about being excited and motivated by running a business. We need help with that area." Finding the right business partner. Tech entrepreneur Neil Patel shares some advice on his blog, QuickSprout, about the benefits of having a business partner, and how to find the right one. Patel, who admits he's been through his share of partnerships, warns that the union can be as tumultuous as a marriage and recommends setting expectations for each partner on day one. To that end, he suggests "sealing the deal" by putting both names on the LLC -- with clearly delineated percentages -- to prevent issues with money or ownership. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

The "Other" Entrepreneurship; Inside Intuit

2009-11-04T11:50:19-05:00

Private companies still cutting back. A new employment report from ADP estimates that private companies cut another 203,000 jobs in October, Bloomberg reports. The good news? That's down from a decline of 227,000 in September. The bad? "I’m still expecting to see payroll employment decline probably through the end of the year," Joel Prakken, chairman of Macroeconomic Advisers, told Bloomberg, "not turn up until January or February." Google's definition of disruption: the "less than free" business model. Benchmark Capital's Bill Gurley considers himself an aficionado of business disruption. Think game-changing movements like software-as-a-service, open source software, and the freemium internet model. "As a venture capitalist it is imperative to understand ways in which a smaller private company can gain the upper hand on a large incumbent." But Gurley says Google topped all other disruptive plays of all when it announced this week that it was including free turn-by-turn navigation directions with each Android mobile OS. To understand how disruptive this is to the GPS data market, says Gurley, you need to know how "turn-by-turn" data became the lynchpin that held the duopoly of NavTeq and Tele Atlas together. In a market where maps are free, turn-by-turn data, which was costly to build and maintain, became a differentiator. On the heels of Google's announcement, stocks at companies like Garmin and TomTom fell upwards of 16 percent. For Google, argues Gurley, "less than free" doesn't stop with the iPhone. If Google goes the same route with its Chrome operating system and Sony or HP or Dell build a netbook with Chrome as its base, Google would gladly pay the ad splits to the computer manufacturers to put even more pressure on Microsoft's Windows. To build or buy a business. The popular conception of entrepreneurship involves building a business from scratch in your garage, but buying an existing venture can be a less glamorous but savvier entree into the business world. On the New York Times You're the Boss blog, Barbara Taylor outlines some of the perks of buying rather than building, including less risk and more cash flow. Also, check out Inc.'s new section on buying a small business as well as a piece on a machine shop in Indiana that's on the broker's block. Minting a new Intuit. After Intuit closed its deal to acquire personal finance site Mint.com earlier this week, TechCrunch caught up with Mint founder and CEO Aaron Patzer to discuss the details of the acquisition. Along with the $170 million for the start-up, he also receives a new title: vice president and general manager of Intuit's Personal Finance Group. His first official mandate as boss? Putting the kibosh on Quicken Online, which, according to the post, has significantly fewer active users than Mint.com. "Over the next six to nine months," he says, "we will end-of-life Quicken Online and their customer's data will be migrated over to Mint." The move will prove to be a particularly ironic one, considering that the Quicken Online team, which Patzer now oversees, was dubious of Mint's success prior to the acquisition. Patzer says later directives will include Mint and TurboTax integration, and helping users with financial planning for "big life goals" such as paying debt or buying a house. Click here for an Inc. Q&A with Patzer, in which he explains why he finally decided to sell. Tough economy sends even laundromats into a spin. Coin-operated laundromats have long been touted as recession-proof businesses. After all, no matter how tough times get, people will always need clean clothes. Still, today's Wall Street Journal reports that this difficult economy is even affecting laundromats, putting a strain on their reputation for always turning a profit. "Now more than ever, the adage that we're recession-proof is being tested," says the president of the Coin Laundry Association. The Journal speculates that the economy has led people to wash their clothes at the home machines of friends and family and that people are wearing clothes longer between washes. Laundromats may collect their revenue one quarter at a time, but their effect on the economy is no small change; coin laundries represents a $5 billion industry with roughly 35,000 stores nationwide. Foursquare's Eurotrip. The location-based social networking application Foursquare, started by the founders of the similar but too-early-for-its-own-good Dodgeball, has been building serious momentum since it picked up $1.35 million in seed funding in September. First, it announced an advertising platform for small businesses to offer rewards to its members. At the time, Mashable said Foursquare beat Twitter to the "local advertising goldmine." Then it added 15 cities in the U.S. and Canada. And today, TechCrunch reports that it's also rolling out its service in 15 European cities. Earlier this month, founder Dennis Crowley told us the service only had 100,000 registered users, but it looks like it won't stay that small for long. Social, computer-based games are dominating the video game sector. The holiday season is typically the biggest money-making time for the gaming industry, but recent price cuts for Sony's PlayStation 3, Microsoft's XBox, and Nintendo's Wii have failed to generate much of an increase in profit. However, one company that has been capitalizing on the $50 billion industry is the two-year-old London-based start-up, Playfish. Unlike traditional console-based video games, Playfish makes social, computer-based video games, which can be played through social media sites, like Facebook and Myspace. With tens of millions of people playing social games, and buying virtual goods, such as presents, clothes, and furnishings, so far, some believe that the social gaming industry is just in its infancy. Playfish chief executive, Kristian Segerstrale told Reuters, "The video-gaming market is in the middle of this fundamental tectonic-plate shift, away from being a physical product-driven industry to being a digital service-driven industry."

Tweets in Your Pocket and the Danger of Multitasking

2009-11-03T11:46:42-05:00

Get ready for Twitter, the gadget. One of the reasons for Twitter's breakneck growth has been the company's decision to make its data available to anyone interested in building applications on top of its messaging system. (This approach has worked pretty well for two other companies you may have heard of.) Until now, all of the Twitter upstarts--such as the iPhone app Tweetie and the link-shortener Bit.ly--have focused on making software. But now, one company is trying to turn Twitter into a profitable gadget. Peek, a New York start-up that makes a cell-phone like device for email, just introduced a $199 hand-held gadget "built exclusively for sending tweets," according to the Wall Street Journal's venture capital blog. According to the article, Peek "expects the TwitterPeek to be popular among those who use Twitter to promote their business, likely equipping an employee with a dedicated device." (Via Techmeme.) Hiring data shows a glimmer of hope. Good news! As reported in the Houston Chronicle, a recent survey of small- and medium-sized businesses showed that 28 percent are planning to add new positions. That number is up significantly from six months ago when only 18 percent said they were planning on making new hires. The survey, which was done by HR outsourcing firm Administaff, also revealed that 23 percent of companies are planning to increase their employee compensation. Are multitaskers more productive?. Web Worker Daily says no, citing a recent study. Stanford researcher Clifford Nass started looking into the subject because he envied his students' ability to multitask and wanted to know how they did it. So Nass and his colleagues studied a group of 100 "high multitaskers" (who used four or five types of media at the same time, like texting while reading email while chatting on the phone) and "low multitaskers" (who used a piddling two at a time). The results showed that the high multitaskers did worse on all three aspects that define success: the ability to focus on the relevant and ignore the rest; the ability to organize information; and being able to move between tasks. Of course, it's possible that high multitaskers are just naturally bad at those kind of things. It's also possible checking your Blackberry while you browse the internet while you're on the phone with the client isn't actually improving your productivity. Inc.com's own Josh Spiro talked to Pandora founder Tim Westergren about this topic back in September. Read Westergren's tips for staying productive. An academic start-up incubator. It's not always clear how to take the great ideas hatched in universities and turn them into companies. But, as TechCrunch reports, the University of Southern California's Stevens Institute for Innovation is doing its part. The college is set to announce tomorrow that the Stevens Institute has helped raise $115 million in funding for 15 USC spin-offs in the past two years, connecting entrepreneurs with foreign investors, grants, and local VCs. How to pick your angels. Hacker News flags a post by Chris Dixon on mistakes start-ups make when choosing their angel investors. He cautions against picking angels who are suggested by your lead investors and against picking investors simply because they are well-known. Instead, Dixon recommends picking "a varied group of people." He writes, "If you want a few celebrities to create some buzz, fine. You should also pick some people who are connectors – who can introduce you to key people when you need it (varying connectors by geography and industry can also be helpful). Also very important are active entrepreneurs who can (and will) give you practical advice about hiring, product development, financing etc." For help finding angels, check out our angel investor directory. Are entrepreneurs the new celebrities? Maybe not, says the Wall Street Journal, but things seem to be moving in that direction--at least when it comes to product endorsements. The article cites several companies, including Dell, American Express and Intel, that have recently used entrepreneurs in ad campaigns. After AT&T spotlighted Blake Mycoskie, the founder of the Venice, Calif.-based Toms Shoes, in a 30-second commercial during the Masters Golf Tournament, the spot became so popular online that the phone company produced a 60-second version that premiered on American Idol. Mycoskie also notes that his daily online traffic tripled. "There can be no doubt that AT&T is responsible for this increased exposure," he says. The Journal goes on to highlight the cost-effectiveness of using entrepreneurs, who will often do the campaigns for free, versus A-list celebrities, who can come with a million dollar price tag. Build-a-Bear cleaning up. It's hard to believe that an industry that specializes in making cute and cuddly teddy bears, and other fuzzy friends, is worth $1.5 billion in the U.S. alone. It is, and the St. Louis, Missouri-based retailer Build-a-Bear Workshop is dominating that market, reports CNN Money. Founder Maxine Clark started the business in 1997 in her local mall, and has since expanded the enterprise to 400 locations nationwide. Build-a-Bear's 2008 revenues hit $468 million. Says Clark, "When customers create toys at Build-A-Bear Workshop, they make something that is theirs alone...At Build-a-Bear it's all right to act like a kid. That's appealing to people who are 10 or 60." Time to diversify? When the economy is bad and revenues drop, diversification seems like a reasonable strategy. But in a Harvard Business blog post, Monica Tate-Maile discusses how hard it can be. Meanwhile, check out the Case Study in Inc.'s November issue about how a troubled company found new opportunities in lean times. More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.

Confessions of a Facebook Spammer; Starting Your Own Category

2009-11-02T12:38:46-05:00

How Facebook spam works. Facebook just won a $711 million lawsuit against an email marketer who had operated a spam scam on the social network. But scams are still endemic on the social network, according to a guest post on TechCrunch. "The underlying premise of all the advertising techniques we've discussed so far is that trickery is profitable," writes Dennis Yu, CEO of BlitzLocal. "Fool them into thinking the new friend request is from Facebook, lie to them that the miracle skin creme is actually free, tell them they'll earn points if they just click this button-which then puts their email address on a list that's resold to the top spammers in the world." The post is a great read if you're interested in the dark side of online advertising, and it contains an interesting prediction about Facebook." I honestly believe from my meetings at Facebook, that they've all drunk the Zucker-koolaid and are putting the user experience ahead of earnings," Yu writes. "That's why, if you're a UK resident, you're not seeing those sexy Russian dating ads from a couple months ago-but man, were those profitable." Starting your own (profitable) category. "If you can't be the first in a category, set up a new category you can be the first in." So say the authors of The 22 Immutable Laws of Marketing. Entrepreneurs like Gary Vaynerchuk and Tim Ferriss are certainly evidence that you can build a brand the around a unique personality or passion. But where do you start? Web Worker Daily outlines five steps to building your own category, including abandoning the idea of appealing to everyone, being laser-focused and building the framework to support your individual voice. Federal agencies try the cash-for-innovation model. In the past, businesses have often taken the lead in advertising high-profile competitions that were accompanied by sizable cash prizes in order to spark inventors' interest in developing new technologies. These days, however, it has become the norm for federal agencies to also use contests to inspire innovative inventors by offering financial rewards. As reported by the Boston Globe, the Department of Defense has used these types of contests to hasten the design of military robots that soldiers can carry during combat, and NASA has also awarded more than $2 million since 2006 through its Centennial Challenges program to innovators who have designed space-faring robots. According to Andy Petro, manager of the NASA prize program, "We're not paying for ideas; we're only making awards when an idea has been translated into practical reality." Small business lender files for bankruptcy. The will it, won't it, drama surrounding commercial lender CIT Group came to an end yesterday when the 101-year-old lender said it was entering a "prepackaged" reorganization plan through bankruptcy court, The New York Times reports. The company said it expects to emerge from the proceedings before year's end. CIT is one of the nation's biggest players in the "factoring" industry, whereby "suppliers and manufacturers sell payments owed for goods and services to companies such as CIT because they need immediate cash," Bloomberg explains. With an estimated 70 percent of the factoring market, CIT is a huge lender to the retail industry, including thousands of small and mid-sized businesses. "Short term, it's going to cause some difficulties for startups and smaller borrowers," Jean Everett, a partner at Hiscock & Barclay LLP, told Bloomberg. The big losers on the deal? Likely the taxpayers, who are expected to lose most, if not all, of their $2.3 billion bailout investment in CIT. The balancing act with virtual goodsAs we've noted before, virtual goods are flourishing, but it can be a tight rope act for companies to get revenue from players of their virtual games without scaring them off. Companies need to employ both economists who help find the perfect price for the goods, and creative types who ensure that the virtual games and social networks stay engaging and competitive. Virtual goods are estimated to be and $1 billion business in the U.S. according to the San Francisco Chronicle but usually only 5 to 10 percent of users help the companies pull in money. Plus, there's always the danger that a newer, cooler game will drag players away. But despite the risks, the industry is expected to remain lucrative. Charles Hudson, founder of the Virtual Goods Summit which was held last week in San Francisco says, "People are going to keep spending money on virtual goods because they're spending time in these places, building relationships and engaging content. It's just like another hobby." Amazon and Zappos make it official. And the price is $1.2 billion. The acquisition was announced several months ago, but the deal has received government approval, and it closed over the weekend. (In the interim, the total size of the deal went up by $300 million, thanks to a jump in Amazon's stock price.) CEO Tony Hsieh writes, "I'm excited because Amazon supports us in continuing to grow our vision as an independent entity, under the Zappos brand and with our unique culture." (For more on how Zappos grew itself into a billion dollar company, check out our May cover story.) More from Inc. Magazine: Get this delivered to your inbox. Follow us on Twitter. Friend us on Facebook.