Articles on this Page
- 05/06/14--10:00: _Here's Why The US I...
- 05/16/14--08:44: _Fed Chair Janet Yel...
- 06/09/14--19:53: _VOTE NOW: Help Us C...
- 06/17/14--13:06: _6 Things Entreprene...
- 06/23/14--06:49: _Gina Bianchini: Her...
- 07/05/14--07:05: _12 Steps To Turn Yo...
- 07/17/14--10:04: _These Are The Avoid...
- 07/22/14--13:58: _The Devastating Bus...
- 07/29/14--14:35: _Why Women Entrepren...
- 07/30/14--14:28: _Here's Why One Woma...
- 07/31/14--07:11: _Here's Who Really I...
- 07/31/14--18:25: _5 Questions You Sho...
- 08/04/14--12:22: _How To Get Paid For...
- 08/14/14--14:36: _The Most Successful...
- 08/19/14--14:10: _10 Things Everyone ...
- 08/21/14--06:56: _11 Crucial Skills E...
- 08/21/14--13:17: _The Best State For ...
- 08/21/14--13:53: _How One Man Is Teac...
- 08/21/14--13:59: _5 Mistakes New Entr...
- 08/25/14--08:55: _Here’s What Boxing ...
- 05/06/14--10:00: Here's Why The US Is So Good At Producing Self-Made Billionaires
- 06/09/14--19:53: VOTE NOW: Help Us Choose The World's Best Design Schools
- 06/17/14--13:06: 6 Things Entrepreneurs Can Learn From Marathon Runners
- A reach goal (if you’re feeling awesome on race day)
- A realistic goal (the time you’ve been training to reach)
- A safety goal (the time you can reach when there are factors beyond your control)
- 07/05/14--07:05: 12 Steps To Turn Your Kids Into Tech Billionaires
- 07/22/14--13:58: The Devastating Business Mistake Tech Founders Often Make
- Set goals that will enable us to grow
- Break the goals down so that there is clear ownership and accountability for each goal by a specific team
- Refine goals into measurable targets
- Figure out how many new people are required to hit the targets
- Estimate the cost of the effort
- Benchmark against the industry
- Make global optimizations
- Run rate increase– Note that I say "run rate increase" and not "spend increase." You should set a limit on the amount by which you are willing to increase what you are spending in the last month of the coming year vs. the previous year.
- Earnings/Loss– If you have revenue, another great constraint is your targeted earnings or loss for the year.
- Engineering growth rate– Unless you are making an acquisition and running it separately or sub-dividing engineering in some novel way, you should strive not to more than double a monolithic engineering organization in a 12-month period.
- Ratio of engineering to other functions– Once you have constrained engineering, then you can set ratios between engineering and other functions to constrain them as well.
- Take the constrained number that you created and reduce it by 10-25% to give yourself room for expansion, if necessary.
- Divide the budget created above in the ratios that you believe are appropriate across the team.
- Communicate the budgets to the team.
- Run your goal-setting exercise and encourage your managers to demonstrate their skill by achieving great things within their budgets.
- If you believe that more can legitimately be achieved in a group with more money, then allocate that manager extra budget out of the slush fund you created with the 10-25%.
- 07/29/14--14:35: Why Women Entrepreneurs Are Happier Than Men
- 07/30/14--14:28: Here's Why One Woman Quit Her Writing Job To Clean Toilets
- 07/31/14--07:11: Here's Who Really Invented The World's Greatest Thing: Sliced Bread
- 07/31/14--18:25: 5 Questions You Should Answer Before Starting A Business
- 08/04/14--12:22: How To Get Paid For What You Already Do For Free
- 08/14/14--14:36: The Most Successful Stanford Alumni In Tech
- 08/19/14--14:10: 10 Things Everyone Should Know Before Starting Their Own Business
- 08/21/14--06:56: 11 Crucial Skills Entrepreneurs Won't Learn In School
- 08/21/14--13:17: The Best State For Women Entrepreneurs Might Surprise You
- North Dakota
- District of Columbia
- Texas (tied for ninth place)
- Utah (tied for ninth place)
- 08/21/14--13:53: How One Man Is Teaching His 7-Year-Old To Think Like An Entrepreneur
- Not everyone wants to own a business, even if they are super talented. As an entrepreneur, it’s always a privilege when you can give people a good livelihood.
- A fact of business is that part of being able to keep good people employed is having a profit margin that allows you to do so.
- At 7, Liam isn’t able to fully comprehend the balance between making money with a great team versus treating people as a means to an end. There’s no reason to be having those discussions with him at his age.
- 08/21/14--13:59: 5 Mistakes New Entrepreneurs Need To Stop Making
A new report by the London-based Centre for Policy Studies has found that the United States has produced the third most self-made billionaires currently in the world, putting it behind only Hong Kong and Israel, when considered as a percentage of the total population.
To determine the number of these "super entrepreneurs," the Center analyzed billionaires that have appeared on Forbes' list of richest people between 1996 and 2012.
With the help of Ernst & Young's Entrepreneurship Barometer, an annual survey that ranks the best countries to start a business, as well as other sources, we examine what has made the U.S. so successful at producing billionaire entrepreneurs and profitable new businesses.
Low Tax Rates
With the corporate tax rate sitting around 40% (35% federal rate plus an additional 5% at the state and local level), it may come as a surprise that the United States' tax structure is cited by the report as one of its entrepreneurial strengths. That seeming discrepancy lies in the fact that the U.S.'s tax rate, when measured as a share of GDP, is incredibly low. According to the OECD, the U.S.'s corporate taxes accounted for 2.6% of GDP in 2012. As recently as 2011, corporate taxes accounted for 1.3%. For reference, in the 1950s, corporate taxes accounted for around 5%.
Canada (26%), Norway (28%), and New Zealand (28%) all have a nominally lower corporate tax rate than the United States. Yet all three have higher corporate taxes as a share of GDP: 2.9%, 10.4%, and 4.4%, respectively. That means those three countries actually raise more revenue from corporate taxes than the United States proportionally, and U.S. companies pay a smaller share of their profits in income tax than corporations in those countries. While tax policy is a constant left/right argument, many believe that high tax rates discourage entrepreneurship.
Many in the U.S. love to harp on the country's high statutory tax rate, but corporate taxes are actually lower than they've ever been. Add in the multitude of loopholes, tax shelters, and exemptions that corporations take advantage of, and you can understand why Warren Buffet has called the notion that corporate taxes are high "a myth."
A Loose Regulatory Environment
While many entrepreneurs complain that the U.S.'s regulatory environment is complex, the country is actually an easy place to start a business when compared to the rest of the world. The 2013 "Ease Of Doing Business Index"ranks the United States as fourth, behind only Singapore, Hong Kong, and New Zealand.
The index measures regulations that affect the formation and running of businesses, such as the time and minimum capital to start a business and the procedures for purchasing property, obtaining permits, and managing bankruptcy. Similarly, the OECD index of regulations ranks the U.S. as half as burdened by regulations as Western European countries.
Here's some hard numbers on how much easier running a business is in the U.S.: On nearly every statistical measure for taxes and regulations, the U.S. scores better than the average across all G20 countries.
Access To Liquid Money
As the financial center of the world, it's not surprising that the United States' biggest advantage may be its financial markets. According to Ernst & Young, markets in the U.S. are not only large, but "efficient and highly liquid." In addition, the U.S. benefits from a deep network of angel investors, venture capital firms, specialty banks, and crowdfunding solutions to provide capital to new, innovative businesses.
The United States also benefits from an established innovation system that supports research and development. Only Japan and South Korea currently spend more money on R&D as a percentage of GDP.
Take a look at how the U.S. compares to the G20 average:
The Entrepreneurial Culture
The entrepreneurial spirit is central to American culture. Billionaire founders of Microsoft, Apple, Google, and Facebook are just the latest wave in a long tradition that began with titans like Henry Ford, Thomas Edison, Andrew Carnegie, and John D. Rockefeller.
Entrepreneurs in the U.S. are able to take advantage of elite research universities and a close association between higher education and the business world, in the form of science parks, business incubators, and venture funds. While the connection between Stanford University and Silicon Valley is the most immediate example, Cornell's new high-tech campus is similarly trying to become a hub for the NYC startup scene.
In general, Americans are also more receptive to the risks associated with starting a business. The culture in the United States, unlike many countries, is one of support. Look at how U.S. entrepreneurs view business failure:President Obama is not the first president to publically support small businesses and entrepreneurship, but he has famously made them a centerpiece of his economic program. He has called small businesses "the engine of our economy," suggesting that they drive growth and create jobs.
According to Ernst & Young, 79% of U.S. entrepreneurs say that the country's culture encourages entrepreneurship. By comparison, the G20 average is around 57%.
All in all, America remains a business powerhouse, with an infrastructure and culture that produces more self-made billionaires than most other nations. Here's an overview of how the U.S. ranks in five categories on Ernst & Young's Entrepreneurship Barometer:
On stage at National Small Business Week's opening ceremonies in Washington, D.C., on Thursday night, Fed Chair Janet Yellen exhorted small business owners for their crucial role in the economic recovery.
"The Federal Reserve tries to promote the conditions that foster job creation," Yellen says, "but overwhelming it is businesses that create the jobs."
Yellen addressed a group of small business advocates and owners, including the 53 winners of Small Business Person of the Year, who were selected by the U.S. Small Business Administration from every state, plus the District of Columbia, Puerto Rico, and Guam.
Yellen, who was confirmed as a replacement for Ben Bernanke at the start of the year, said that since employment starting growing again in 2010, the private sector has accounted for all of the net increase in employment, given that public sector jobs shrank.
What's more, most of the increase has come from small business. Just over half of new jobs have been created by companies with less than 250 employees.
"America has come a long way since the dark days of the financial crisis," Yellen said, "and small businesses deserve a considerable share of the credit for the investment and hiring that have brought that progress."
Yellen was introduced by Maria Contreras-Sweet, administrator of the SBA. She said that Yellen "shattered the glass ceiling in finance." Yellen is the first woman to chair the Federal Reserve, one of the most powerful policy-making roles in the world.
Yellen's speech marked the opening of festivities for National Small Business Week in the nation's capital. There were ceremonies in San Francisco, Kansas City, and Boston earlier in the week.
Started in 1963, National Small Business Week comes with a presidential proclamation to recognize and support small business owners. The SBA provides loans, federal contracts, and strategic counseling to aspiring and current entrepreneurs.
Other Small Business Week speakers include Sam Adams billionaire Jim Koch and Papa John's founder John Schnatter. Look for further coverage on Business Insider.
As we enter the golden age of design in startups, highly talented user-interface and product designers are becoming ever more important.
Some companies leading the charge are Apple, Pinterest, Square, and Airbnb. What those companies have in common is that design is at the core of their businesses.
But which school is best suited to get you the design job you want?
That's where you come in. We want your help in figuring out which schools help you in the one thing that really matters: your future career.
Please take a few minutes to answer the questions below. In a few weeks, we'll reveal the new definitive list of the World's Best Design Schools.
Keep in mind the list is not comprehensive — if there's a college missing, add it below!
Whether you’re a casual gym-goer or a race junkie, working up a sweat has some universal elements: the willpower to start, the pain, the motivation to keep going, and the push to go further than you thought you could.
My personal passions are growing my business and running faster.
Though they may seem like different pursuits, entrepreneurs can learn from runners’ commitment, drive, and ability to power through.
Here are a few runners’ lessons that entrepreneurs should internalize when starting a business.
1. Show up with confidence.
Training for a marathon takes a minimum of three months — if someone is already a strong runner. While I wouldn’t spend that much time in “prep mode” before starting your business, good training and experience will give you confidence right out of the gate.
As a business owner, you must continually remind yourself of the training that’s prepared you for success. Perhaps you’ve had a challenging and accomplished career, a great education or mentor, or a setback that caused you to grow. Think about what you’ve done to train, and show up to the starting line with confidence.
2. Persistence pays.
Meb Keflezighi recently became the first American man to win the Boston Marathon in 31 years. After the race, he shared insight into his strategy: "I don’t rest until I put my head on the pillow." The same lesson applies to business. You will have setbacks, failures, and people who doubt you. Keep working. Keep running. All your efforts will make victory that much sweeter.
3. Take nothing for granted.
In the afterglow of a personal best, your runner’s high and raw adrenaline can push gratitude to the backburner. But the ability to race and compete isn’t a given. Don’t take your ability to exercise for granted.
The same goes for starting a business: Not everyone has the desire to put themselves in the driver’s seat (understandably). But if you want it and are in the position to do something about it, be thankful. It’s a tremendous opportunity, worth remembering during both good times and bad. Be grateful for the opportunity — it will make you and those around you much happier and more fulfilled.
4. Set three goals.
No matter how well you train, marathons are unpredictable beasts. Race day could go perfectly — or your legs may feel like lead as you battle a torrential downpour. My running coach taught me to set three goals:
Just like on race day, uncontrollable factors will pop up in the business world. Having three sets of goals will make you feel good about your achievements without allowing setbacks to shake your confidence.
5. Visualize your success.
As a runner, it’s helpful to visualize success. I picture myself crossing the finish line with a new personal best, or reaching deep inside to go faster when my muscles get tired. Visualizations are extremely powerful motivators, but they aren’t limited to athletes. Visualize business success, too.
Maybe your goal is to introduce a truly innovative product or feature in your space, reach a certain revenue figure, or create an award-winning company culture. What will it feel like to accomplish your objective? Whatever your goal is, picture it, then work to make it reality.
6. Analyze your performance.
Every time I cross the finish line, I check my performance using a tracking app like Strava or RunKeeper. I review my splits (my pace at each mile) to see where I did well and where I can improve. I notice which parts of my body are in pain so I can train to strengthen them.
I find it helpful to replay the race in my mind — not to wallow in what didn’t go well, but to set a plan to finish faster next time. Once you’ve hit a milestone in business, replay what got you there. What made you successful, and where can you improve?
Take hold of the successes, and find ways to amplify and multiply them down the road. When training for a marathon, you put in the miles leading up to race day, lace up, and hope for the best. The same goes for business: You prepare as much as you can, but there will always be hard stretches along the way.
There’s no question that it takes sheer determination and confidence to reach the finish line. By maximizing your training, you’ll put yourself in the best position to succeed, knowing you gave it your all.The result? You’ll have no regrets — perhaps the greatest victory of all.
Phil Dumontet is the founder and CEO of DASHED, the leading restaurant delivery service in the Northeast. Phil prides himself on the company’s industry-leading delivery times, unique partnerships with higher-end restaurants, and commitment to keeping delivery green.
Produced by Justin Gmoser
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How do you set your kids up to be the next Mark Zuckerbergs or Larry Pages?
Serial entrepreneur Charles Tips has the most popular Quora answer on this topic with more than 5,200 upvotes from people like the co-founders of Zynga-owned Farmville and Google-owned Wavii.
Tips has a couple kids and says he has numerous friends who are self-made billionaires.
Step 1: "Make them aware of the full range of life options."
"The world abounds with opportunity to lead whatever life you want, but you have to demystify, demystify, demystify for them to be able to see what makes go businesses go," says Tips.
Step 2: "Do NOT send them to public school NOR to the prep schools that are just our public schools on steroids."
This isn't the recipe for every billionaire. Mark Zuckerberg attended a prepschool for high school. Other billionaires never graduated 12th grade.
But in Tips' opinion, someone as atypical as a billionaire is going to need an atypical education. He says his kids began working an assortment of jobs when they were pre-teens and traveled a lot doing things like filming documentaries and driving boats.
"If you want conventional minds, get them a conventional education," Tips says.
Step 3: "Teach a love of work."
In other words, don't let them be lazy. Because, as Tips says, "getting rich takes work" for which you need "stamina."
See the rest of the story at Business Insider
Editor's note: This post originally appeared on Quora, as an answer to the question, "What are avoidable mistakes that first-time entrepreneurs make repeatedly?"
1. Stop drinking your own Kool-Aid.
If you are not brutally honest with yourself, you can’t make informed decisions that will truly improve your company.
You will hide behind excuses and spin stories to yourself explaining away why you have to keep doing the rest of the things on the list.
You can’t believe all the stories you tell. You need a healthy dose of skepticism (not the same as self-doubt or lack of self-belief) to make real forward progress.
2. Stop being so busy all the time.
Does an early stage startup founder really need to spend time evaluating every HR alternative instead of focusing on customers and product? Some people think that being the CEO means being involved with everything. But what they are really doing is getting in the way and usually just slowing down progress.
Surround yourself with smart people and delegate, delegate, delegate. There are only a few things you should not delegate in the early stages of a business like customer engagements, raising capital and finding product-market fit.
3. Stop working yourself to death.
As the founder, you often feel like the world is on your shoulders and you have to be working 100-hour weeks to set an example for your employees. Startups are a marathon, not a race. The average successful exit takes 7-10 years. If you don’t take time for yourself and take care of yourself, nobody else will. Relax, take breaks, take walks, take days off, get massages, pamper yourself. You can’t take care of others if you do not take care of yourself first.
4. Stop half-assing it.
On the other hand, I have tried countless times to build a startup idea as side projects, and it doesn’t work. I am not saying that it is impossible to start a startup on the side. I am saying that to make a real play at doing something investable, you are going to have to make the leap and do it full time sooner than you will feel comfortable doing so. It always works this way. Nobody will invest in you if this is not what you do all the time, no matter how good the idea is.
5. Stop hiding behind fake traction.
Founders often highlight what looks good and hide what looks bad. This is fake traction. Like: “All of my users love my product!” Sounds great, but if you only have 12 users, your sample size is two orders of magnitude too small. If you find 1,000 people who can’t stop talking about your product, you are on to something big. Or another is “I have 300 people on my waiting list to buy my product!” Awesome, how many of them are willing to pay you for it up front? None? Haven’t even asked yet?
6. Stop counting your eggs before they hatch.
An investor who expressed interest in investing but hasn’t called back in a few weeks isn’t money in the bank. Close, close, close. Convertible notes aren’t perfect, but at least you can do a rolling close cheaply. A potential customer who says he may pay if your product did such-and-such is not money in the bank. Close, close, close. What will he pay for today?
7. Stop trying to get around paying lawyers.
You are running a complicated legal entity that may take funding from individuals and VCs, and could eventually IPO or be acquired. This is not a mom-and-pop business, LegalZoom and RocketLawyer are not good enough. Do it right. Don’t even try to out-smart yourself here. Expensive in the short term? Yes. Worth it in the long term? ALWAYS. Your future self will hate you if you try to save too much money here.
8. Stop trying to serve two kinds of customers.
You can’t do two things great. You don’t have the time, money, or resources to figure out the product-market fit for more than one product doing one thing. It is always so enticing to try to follow new opportunities that come up, but don’t fool yourself. You can’t be great executing two go-to-market strategies at once. The split focus will mean you will be at best mediocre, but probably terrible at both. If you really think the new opportunity is better, pivot the company and go all in.
9. Stop believing that your product is your company.
Your company is the value your provide to your customers, not your product. Often your customers couldn’t care less if what happens behind the scenes was done by the best Scala code in the universe or a thousands monkeys … as long as it works reliably and timely. Your customer value and your team is your company, not your product. Focus on making your team happy and your customers happy and all else will follow.
10. Stop avoiding your customers.
How long has it been since you last talked with a customer? On the phone or in person? Not to sell them stuff. Not to offer support. To listen. To build your relationship with them. To ask questions. Please don’t tell me it has been more than a week or two. A founder, and especially a CEO, has no excuse not to be in continuous communication with customers. Don’t have customers yet? Call your prospects.
11. Stop avoiding your team.
There are often times you want to curl up and cry, but a leader can not hide behind his desk no matter how much he might want to. A leader must be visible in good times and in bad. Especially in bad times. When a child is scared and hurt he needs his parents the most. Your team is your company, keeping them happy is one of your top priorities.
12. Stop pretending to be superman.
A leader doesn’t need to be perfect. Don’t pretend that everything is always fine and that you never make mistakes. You might think it makes you look strong and brave, or makes people look up to you. In reality, it comes off fake and inauthentic. You don’t have to flaunt your failures, but hiding them is unnecessary too. Just talk about them honestly and ask people how they think you could improve.
13. Stop being so secretive about your idea.
You may be scared someone will steal your idea. Don’t. Just don’t. Such a beginner mistake, not even an amateur mistake, it is just a total rookie mistake. You will never find product-market fit by keeping your idea secret until it is perfect. You need to talk about your idea. A lot. To a lot of people.
Because honestly, your idea probably sucks just as much as you are secretly afraid it might. One of the reasons many founders are so secretive about their ideas is because they don’t want to be told it is a stupid idea. This is just denial. Don’t be in denial. Anyhow, the people you are so afraid will steal your idea are too busy working on their own big ideas to steal yours.
14. Stop falling in love with your idea before product-market fit.
“The counterfeit innovator is wildly self-confident. The real one is scared to death.” — Steven Pressfield.
The more confident an early stage startup founder is, the more concerned I am for them. Of course they can’t just go around telling people they are scared to death all the time. But when you are an early stage founder and really in love with what you built, you will never seek the changes necessary to really make your product great.
Read the Instagram Story to get a great example of a team who wouldn’t stop until they really found product-market fit. If their love of Burbn (predecessor to Instagram) had held them back, they would probably be out of business by now.
15. Stop ignoring marketing.
Even before you launch your product, you should be marketing. By marketing, I don’t mean press releases and media attention. The best marketing is word-of-mouth. Getting people to talk about you. You only get word-of-mouth by creating real fans. You create fans by adding real value to people’s lives. You can add value to people’s lives in many ways besides your product or service.
You can write tutorials and provide useful blogging content that isn’t directly related to your startup at all, but related to your industry. Some excellent examples of this include Signal v. Noise from 37signals, DigitalOcean Tutorials and The Buffer Blog. Create fans, not just users. Most startups don’t even try.
16. Stop comparing yourself to other startups.
Startup envy isn’t a good enough motivator to get you through the tough times. Thinking that such-and-such startup was just acquired for hundreds of millions of dollars and you are so much smarter than them is not a productive thought. I have written about how to cope with startup envy before, but it is better if you just prevent yourself from getting envious in the first place. In fact, it is probably a fantastic idea to stop reading Hacker News and Techcrunch altogether until after you don’t work for your startup any more.
17. Stop ignoring history.
Trying to raise venture capital for the first time? You are not the first person to do this, read as much as you can and surround yourself with people who have raised money recently (not 10+ years ago, within the last 2-3 years).
Trying to build a payment company but never built a payment company before? Don’t try to rediscover everything that worked and didn’t work for others, surround yourself with advisors who have done it before. Get introduced to Peter Thiel and Max Levchin. Read their biographies before you meet them. Pick their brains. Offer them stock in your new venture. Hustle smarter, not harder.
18. Stop procrastinating the launch of your company.
Procrastination is just giving into your inner demons. You don’t want to know if it will succeed or fail, but all you are doing is shooting your own feet and cutting of your legs and arms. Go read "The War of Art," now. I’m serious. Steven Pressfield calls procrastination a form of your own personal ”Resistance”. The closer to launching your startup, the stronger the Resistance feels. You will make up excuses, you will do anything to put it off another week, another month. You can’t find product-market fit unless you have a product to try to fit with.
19. Stop launching too early.
Launching a “Minimal Viable Product” or MVP does not mean building the crappiest proof of concept and launch it as quickly as you can. Though “lean” startups are a hot trend right now, many founders misunderstand what a MVP is. Build a product worth using, not a proof-of-concept.
If an MVP was a proof-of-concept, it would be called POC instead. Build something that someone would pay for. This means making the product look professional and polished. This means finishing enough details that it doesn’t look like a fly-by-night endeavor.
20. Stop avoiding thinking about revenue.
Stop comparing yourself to Twitter and Facebook that didn’t worry about revenue until many years after being founded. Stop saying you are the next Instagram. I’ll believe you about as much as I would believe you told me you are holding a winning mega-lottery ticket.
Growth is great, and great growth can be wonderful to experience, but cash-flow is king for almost all startups. Don’t tell yourself that you are an exception, you are risking too much if you are wrong.
21. Stop using your lack of funding as an excuse.
With today’s technology, you do not need to spend millions of dollars to validate most startup ideas. You can usually validate that people want to your product in some form or another, or even pay for it, with just a few thousand dollars. Haven’t built your product yet because you think you need funding first? Build another product that won’t cost so much. Haven’t started selling your product because you think you need funding first? Richard Branson built a billion dollar business without venture capital. You are making up excuses, go find solutions.
22. Stop just following your passion.
Passion is an energy that can power and motivate you, but easily blind you too. Passion can blind you to truth; it can deceive you. I have seen many founders blind with passion. Passion can blind you to know when you need to pivot or change your product. If the Burbn founders had been overly passionate about their first app, they would have never created Instagram.
The trick is to get passionate about product-market fit, not about the product as it is today. Keep tweaking until you find the fit. You will know when you found it, there won’t be any doubt. ”When I was a commercial loan officer for a large bank, my boss taught us that you should never make a loan to someone who is following his passion.” — Scott Adams
23. Stop asking people to sign NDAs before discussing your startup.
Early stage startup ideas are not worth protecting because they almost all suck. Yes, your baby is ugly. Sorry, but it is the truth. After you raise a few million in venture capital and you are setting up a meeting with a large public company, then you can ask to put an NDA in place. However even then, you will have to sign their NDA (they don’t do special NDAs for every startup they talk to) and thus you won’t likely get much protection.
24. Stop lying to yourself when things are not right.
How long have you been telling yourself that the employee (you know which one I mean) is not pulling his weight and is causing more harm than good? How many times have you turned the other way hoping it will go away? STOP IT. DEAL WITH IT. TODAY. NOW. REALLY. You can’t afford to put problems off to the side at a startup. There is no time. Deal with your problems today, stop putting them off. Stop hoping they will resolve themselves. This is business, do your job. Deal with your mess.
25. Stop trying to get away without knowing your unit cost.
Unit cost is how much your service costs you to run per customer. “But I’m a SaaS, Lucas!” Stop it, you are a business, right? You have customers? You have service bills? Take out the fixed costs, then divide the rest of your service bills by the number of customers you have. Find out how much it costs you to support one more customer on average. Make sure you are charging your customer a lot more than their unit cost, otherwise you are a charity, not an investible business. You can’t start calculating unit cost too early. It is key to understanding cash-flow and profitability.
26. Stop believing that hiring sales people will cure your revenue problems.
Reality check: sales people don’t figure out how to sell your product. You do. The only reason you should hire a sales person should be because you don’t scale and you have been doing more sales meetings than you can handle lately. A founder/CEO doing sales calls? YES. Never done a sales call before? Doesn’t matter. Start now.
It is your job to figure out how to sell your product. You need to perfect your sales pitch. You need to create a great deck that works. Once you know it works, you let a sales person shadow you until they can say the same things you do.
27. Stop postponing the calculation of your cost of user acquisition.
Cost to Acquire a Customer (aka CAC) is one of the most important metrics an online business has. If you watch "Shark Tank," you know they always ask entrepreneurs for the number up front. It has been extremely well studied by top tier investors like Bessemer who have published great resources on learning about CAC.
To calculate CAC, you will need to know your business numbers inside and out, which you should already know. If you don’t, then figuring out how to calculate CAC will get you asking the right questions. Hire an accountant to help you double check your work and assumptions. Like lawyers, don’t try to skimp here, you future self will thank you. Like unit cost, you can’t start calculating CAC too early.
28. Stop hiring contractors instead of employing great engineers.
It is so so so tempting to just say: “F--- it, I’ll just hire a part-time contractor to build out my prototype.” Don’t do it. don’t give in to the temptation. Hiring full-time employees takes longer and is harder and can cost more, but the long-term benefits will always outweigh the short-term gains.
A startup is not about the product, it is about the team. A great team will always out-do a great product. Hiring full time employees is about building a team. Hiring contractors is a band-aid full of dirt and bacteria. Startups are a marathon, not a sprint. It is more important to slowly build an excellent team, a motivated team, the right team … than it is to get your product out of the door faster.
29. Stop ignoring your Ideal Customer.
“All novels are really letters aimed at one person.” — Stephen King, "On Writing." That person is called the Ideal Reader. Novels are subjective, not everyone will like any given novel, so you don’t even try to please everyone. You try to please your Ideal Reader. Stephen King’s Ideal Reader is his wife. Whenever he gets stuck, he thinks of his wife and asks himself: what would make her laugh/cry/pee her pants? When you get stuck, always ask yourself: Who is your Ideal Customer? Who are you trying to make pee their pants?
30. Stop picking such small problems to solve.
Will someone pay for your app that increases Twitter followers? Yes. Can you grow that into a $100 million a year business? No. It is a small idea. It is a small market. There is nothing wrong if your goal is to create a small business that augments your income or might even support your whole lifestyle.
But that kind of business will never get venture capital, nor should it, so don’t even try. You are wasting investors' time and your time. A real startup’s goal should be to change the world for the better. If increasing Twitter followers is a temporary revenue-generating bootstrapping step to a next-gen marketing platform that improves the connection between brands and customers … that is a big problem to solve. That is an investible idea.
Lucas Carlson is the author of "The Craftsman Founder Manifesto," which talks about the inner psychology of starting companies, and publishes startup advice and book recommendations for founders on his blog. Lucas is currently the chief innovation officer at CenturyLink, which acquired his startup AppFog.
I am a giant advocate for technical founders running their own companies, but one consistent way that technical founders deeply harm their businesses is by screwing up the budgeting process. Yes, the budgeting process. How ridiculous is that? How does it happen and why is it particularly problematic for engineers?
I'll begin by describing how I screwed it up in my company. Our sales were growing so fast that the biggest problem that we faced was that we literally could not handle all the customers that wanted to sign up for Loudcloud.
To combat this and enable us to grow, I worked diligently with my team to plan all the activities that we needed to accomplish to expand our capacity and capture the market before the competition. Next, I assigned sub-goals and activities to each functional head. In conjunction with my leadership team, I made sure that each goal was measurable and supported by paired metrics as well as lagging and leading indicators.
I then told the team to figure out what it would take to accomplish those goals and return with their requirements for headcount and program dollars. Finally, I made adjustments to their requests based on industry benchmarks (mostly reductions) to get to a plan that I thought made sense.
Here’s the basic process:
Unless you are an experienced manager, you may not even see what’s wrong with this process, but it very nearly led to my company's demise. In fact, the above process is completely upside-down and should only be followed if you wish to bloat your company to the brink of bankruptcy and create a culture of chaos.
When I asked my managers what they needed, I unknowingly gamified the budgeting process. The game worked as follows: The objective was for each manager to build the largest organization possible and thereby expand the importance of his function. Through the transitive property of status, he could increase his own importance as well.
Now you may be thinking, "That wouldn't happen in my company. Most of my staff would never play that game." Well, that's the beauty of the game. It only takes one player to opt in, because once someone starts playing, everybody is going in — and they are going in hard.
Gameplay quickly becomes sophisticated as managers develop clever strategies and tactics to improve their chances for winning. One common game technique is to dramatically expand the scope of the goals: "When you said that you wanted to increase our market presence, I naturally assumed that you meant globally. Surely, you wouldn’t want me to take a U.S.-centric view."
To really motivate the CEO, another great technique involves claiming dire circumstances if the company fails to achieve its metrics: "If we don't increase sales by 500% and our top competitor does, we will fall behind. If we fall behind, we will no longer be No. 1. If we’re not No. 1, then we won’t be able to hire the best people, command the best prices, or build the best product, and we will spin into a death spiral." Never mind the fact that there is almost no chance that your competitor will grow 500% this year.
Another subtle problem with this process is that when I asked my team what they needed to achieve their goals, they naturally assumed they would get it. As a result, my team deeply socialized their ideas and newly found money with their teams. This has the added gaming benefit of inextricably tying their demands to company morale.
When the VP of marketing asked me for 10 headcount and $5 million in program expenses, then shared that plan with his team, it changed the conversation. Now a major cutback to his plan would alarm his team because they had just spent two weeks planning for a much more positive scenario. “Wow, Ben greatly reduced the plan. Should I be looking for a job?” This kind of dynamic put pressure on me to create a more expansive expense plan than was wise. Multiply this by all my managers and I was on my way to burning up all my cash and destroying my culture.
My core problem was that my budgeting process did not have any real constraints. We were private and did not have a specific profit target that we needed to hit and we had plenty of cash in the bank. Drawing the line on expenses seemed rather arbitrary. In the absence of a hard constraint, I had no constraint.
An excellent constraining principle when planning your budget is the preservation of cultural cohesion. The enemy of cultural cohesion is super-fast headcount growth. Companies that grow faster than doubling their headcount annually tend to have serious cultural drift, even if they do a great job of onboarding new employees and training them. Sometimes this kind of growth is necessary and manageable in certain functions like sales, but is usually counterproductive in other areas where internal communication is critical like engineering and marketing.
If you quadruple your engineering headcount in a year, you will likely have less absolute throughput than if you doubled headcount. As an added bonus, you will burn way more cash. Even worse, you will lose cultural consistency as new people with little guidance will come in with their own way of doing things that doesn’t match your way of doing things. Note that this does not apply to you if you have very small numbers. It's fine to grow engineering from one to four people or from two to eight. However, if you try to grow from 50 to 200, you will cause major issues if you are not extremely careful.
Starting with the cultural cohesion principle, a far better way to run the budgeting process is to start with the constraints. Some useful constraints are:
After applying the global constraints, the following steps will provide a better process:
At this point, some readers may think that I've lost my mind. As a technologist, you know that the worst thing that you can do is over-constrain the problem before you start. You'll kill creativity and prevent yourself from getting a truly great outcome. That's precisely why I, as an engineer, struggled with this process: the human factors muck up the logic. Specifically, local incentives, if not properly managed, will sharply motivate human behavior and defeat the global goals.
It’s critical to recognize this so that you don’t turn your agile, small company into a slow, big company before its time.
Read more posts on Ben's Blog.
The American workplace still lacks in equality for women. The gender gap is a present issue for a large amount of females in the workforce. However, in one field women are flourishing with success and happiness: entrepreneurship.
According to Fast Company, a June report reveals that one in ten women are going into business for themselves, with a 1/3 aiming to expand to six or more employees.
The report goes on to suggest that women between 35 and 44 are most likely to run or start their own business. It is believed that this correlates with motherhood for many of them. With both jobs having demanding, flexible hours the women can work at a less rigid time structure. The report's lead author, Babson College associate professor of entrepreneurship Donna Kelley, suggests that entrepreneurship has value beyond economic and social value. Kelley goes on to state, "Clearly, entrepreneurship provides women a most satisfying career choice."
Even when starting a new business, women in the study reported to be slightly happier than males in the same position. This gets attributed to confidence in the business. It is believed that confidence leads to success, which creates action. That action leads to the belief that a person can succeed, no matter the result.
Furthermore, the report demonstrates exactly how happiness is a key factor to female entrepreneurs. According to the report, when a woman achieves success in her business their happiness is nearly triple to that of a woman who has an employer or does not have a successful business. This may have to do with American female business owners averaging higher salaries to other females in the workforce at $63,000 to $42,700.
More often than not, when I tell people that I left a glamorous travel writing job to start my own cleaning business, they look at me cockeyed. You traded in your passport and pen to scrub toilets? Really? Why?
I'll tell you why.
I didn't want to spend the rest of my working life making money for somebody else. I didn't want a boss anymore, and I certainly didn't want to be stuck working at a desk behind a computer from 9-to-5 daily. I wanted my own business. I wanted to be able to make as much money as I desired, without the fear of being victimized by downsizing. I wanted to make the rules and not answer to someone else who was writing my paychecks. I wanted all of my dedication, hard work, long hours, and passion to put money in my pocket, without limitations. I wanted satisfaction.
And I got it.
Quite honestly, at first I didn't know how I was going to do it, or what I was going to do to get my own business, but I did know a few things — I love to clean, I'm really good at it, and I truly enjoy helping other people. So that's where I started.
I cleaned a couple of houses for friends, and quickly realized that my "clean" gene was much more prominent than I had thought. I felt euphoric and accomplished when I saw the transformation from dirty to clean evolve. I was happy. My friends were ecstatic. They referred me to neighbors, and those neighbors referred me to friends......and that's when I realized I could seriously start a cleaning business. Oprah would call it my "aha" moment.
I was really excited and knew I had to act fast to capitalize on the momentum. What was my business name going to be? How was I going to keep getting new clients? Do I need money to make money? No. What I needed was a business plan, stat.
So I got my game plan together, named my business The Cleaning Diva (because that's what I am), created a sassy logo, had some business cards made up at Staples and put an ad on Craigslist promoting my services. The response was instantaneous. One phone call led to another, and another, and I soon had a steady roster of clients, most of which are still on my current schedule and continue to refer The Cleaning Diva.
Referrals are vital to my business.
It's not just about the cleaning. I build relationships. I clean and treat my clients' homes as if they are my own, but I also enjoy and value the time I'm there engaging in conversations and really getting to know them. That's what makes The Cleaning Diva tick. It's also a principle I've passed along to my team of Divas. Yes — my team, my other lifeline. The Cleaning Divas take pride in having meticulous cleaning skills, trustworthiness and reliability, and most importantly, strong relationships with clients. Leading by example is crucial.
I'm a journalist by degree, and never took a business course, so The Cleaning Diva is definitely an ongoing, hands-on learning experience for me too. Some things are trial and error. Others just come naturally. Sometimes I have to do research. But at the end of the day I truly can say I love what I do, and it shines through in my energy. Every morsel of my hard work comes back to reward me. I have my own business. I control my success. Not someone else. I wouldn't trade that for anything.
"That's the greatest thing since sliced bread!"
Everyone says that phrase, but no one actually knows who came up with the genius invention.
Otto Frederick Rohwedder is one of the world's most influential inventors that no one has ever heard of.
The Iowa native was originally a jeweler who owned three stores. In the early 1900s he came up with an idea to build a bread slicer.
To fund his idea, he sold off his stores and built a prototype, but the prototypes and blueprints of his contraption burned in a 1912 fire, according to Mercury News.
It took 16 more years for Rohwedder to implement the idea. Finally in 1927, he unveiled his machine, which both wrapped and sliced loaves of bread, and he patented the invention.
Rohwedder began selling his machines to local bakeries, and customers began consuming more bread than ever before. His son said in a 2003 interview that one bakery sold 2,000% more bread within two weeks of launching sliced bread. Wonderbread became the first mass commercial brand of sliced bread in 1930.
When sliced bread was first unveiled, it was advertised as "the greatest forward step in the baking industry since bread was wrapped."
That phrase morphed into today's idiom, "the greatest thing since sliced bread."
Rohwedder's first bread slicer is showcased in The Smithsonian in Washington, D.C.
You have what you think is a great idea for a new business. But being an entrepreneur isn't without hazards. Before quitting your job it's important to take a hard look at your circumstances.
Take it from Brian Short, founder of allnurses.com, the largest online networking community for nurses with about 4 million unique visitors a month, 830,000 registered members and 300 new members joining per day. This kind of traction wasn't a sure thing back in 1994 when Short, then a Registered Nurse, started building the site during a time when the Internet was a relatively new thing for most people. Here's what he learned along the way and the questions he says you should ask before starting your own business.
Will I have passion for running this business?
Short's website grew out of his love of the burgeoning Internet and how it offered an entirely new way of finding information about nursing. He says it just goes to show that turning a hobby into a business makes a lot of sense because when you enjoy something you're less likely to burn out and more inclined to be willing to put in the long hours necessary to get a new venture off the ground. But what if your idea has the potential to be lucrative while not involving an exciting product or service? "I think you can be passionate about anything, even if it's customer service or customer experience," he says. "You don't have to love, [for example], car insurance." The idea is to find some aspect of your business that you can nail better than the competition.
Is there a strong need in the market for this business?
Talk to everyone you can about your idea--including professionals with some knowledge of the space you want to enter--and ask for honest feedback about whether it's something people need. "Make sure [your] gut feeling is based on research," he says.
How will I pay the bills?
Unless your business will be making money from the start, you need a plan for paying your bills, one that figures in unexpected bumps in the road. "If you run out of cash and get strapped you're going to start losing your passion because you have to put food on the table," he says. To lessen your risk, figure out how long it will take to be profitable, how much money you'll need in the meantime and where it will come from. Want ideas? Read "10 Crazy Bootstrapping Stories."
Do I have the strengths needed to grow this business?
No one is good at everything, which means you have weaknesses. The key is identifying the talents you need to grow your business and taking a hard look at whether or not you possess them. Short did this himself a year ago after moving out of a home office where he had previously been doing everything himself. "I realized there were things I wasn't good at so I ended up hiring out all my weaknesses so they supplement my strengths. And I can just focus on my strengths," he says.
Does my family support me?
If your spouse or significant other isn't on board he or she also won't appreciate the time and attention your fledgling business will require. "If you're single and you don't have any responsibilities this question might not apply but if you have other people involved in your life, if they're not on board it's going to create friction," he says.
Say you've thought about starting your own business, but you haven't figured out what exactly that business is or what it would look like. Ask yourself, "What would I do for free?" This question is posed in Thomas O'Malia's book "The Entrepreneurial Journey." It's a critical question to answer when deciding what type of venture to begin, so put on your thinking hat, and let the ideas begin.
Hobbies. When you think about what you'd do without pay, the first things that will likely jump to mind are your hobbies. At this stage, don't think about what is realistically possible as a business, just jot down everything.
Interests. What kinds of websites or articles do you read? Do you subscribe to publications or RSS feeds, and if so, what do they cover? Maybe you have a passion for food, travel, race cars, shopping, gardening, history or wine. Write down the types of topics you tend to read about or watch on television.
Volunteer work. If you volunteer, it's likely in a place or for a cause about which you're enthusiastic. Do you spend Saturday mornings at the animal shelter, or do you visit a home for the elderly? What do you enjoy about your volunteer work, and what skills do you use when you are doing it?
Expertise. Sometimes it's hard to extract our skills from the daily grind. But your hidden passion may be in what you do regularly without much thought. Do you advise friends and family on how to decorate their homes? Do you send friends recipes? On the flip side, for what kinds of advice do friends and family come to you? It could be relationship advice, styling tips, or ideas on where to take their kids on a rainy day. Whatever it is, you are considered a source for that subject.
How you spend your time. If you have trouble coming up with ideas, consider how you spend your time outside of work. It may help to spend a week or two writing down what you do during weekday evenings and on the weekend, as well as how much time you spend doing it. You may spend two hours every night cooking, which could mean it's a key interest, because not everyone would do that. Maybe you spend your nights searching for the latest deals on hiking gear, because hiking is your hobby. In that case, you'd add all hours devoted to anything related to hiking up at the end of the week to determine the total.
Whatever you do outside of work, record it and how much time you've done it. Then total related items at the end of the week. This should give you a good idea of how you spend your free time.
Research and Design
Once you've narrowed down your list and determined what you spend the most time on — or what you'd rather spend your time on — begin researching. Conduct simple online searches to find out about other businesses that do what you're considering doing. Take notes about their processes and how much they charge.
Talk. Start floating your idea among close friends and family. Keep in mind there will be many naysayers, but don't let them deter you. It's helpful to see the pros and cons of starting a business, but in the end, it's up to you. You don't need to invent something or be the next big thing. You need to do what you want to do better than the other companies out there. It may simply be the way you market yourself, the way you operate or a new way to reach clients.
Find and schedule discussions with other entrepreneurs in complementary businesses. They could end up being partners down the road and can offer you invaluable advice as you start out.
Draft a plan. You don't need a business degree to write a business plan. Once you feel you've gathered a good amount of data, begin composing your strategy document. It should identify the type of business, the problem it aims to fix, what you will offer to solve that problem, the types of clients you envision, a rough sketch of pricing and how, and to whom you will market the business.
Once you've become excited about your ideas, don't wait to have a perfect proposal in place. Get out there and start talking to potential partners and clients, who will help you adapt and perfect your initial ideas. Let the momentum take you forward as you develop your business. If you tire of the idea or run out of energy, it may be time to go back to your brainstorm list and rediscover what else you might do for free. There's bound to be something in there that you'd spend countless hours on and can turn into a business.
Stanford University has bred some of the most influential tech entrepreneurs since the beginning of Silicon Valley.
Whether it's due to the top-notch engineering and business programs, extensive alumni network, or university-affiliated accelerator programs, many of the industry's most important figures have earned degrees here, starting with Bill Hewlett and Dave Packard in the mid-30s and continuing on to today's startup founders.
We've rounded up some of the most notable Stanford alums in tech.
HP cofounders Bill Hewlett and Dave Packard met at football tryouts.
Hewlett and Packard, considered by many to be the founding fathers of Silicon Valley, were Stanford students.
The pair first met in the early 1930s while attending radio engineering classes taught by professor Fred Terman, who would later be essential to the founding of HP.
They both tried out for Stanford's football team, though only Packard would make it.
Google cofounders Larry Page and Sergey Brin dropped out of their Ph.D. program.
Perhaps the most well-known founders to come out of Stanford, students Larry Page and Sergey Brin started Google while working towards their Ph.D's in computer science.
The pair first met in 1995. Page, a recent graduate of the University of Michigan, was considering attending Stanford; Brin was assigned to show him around.
The following year, they began work on a search engine they called BackRub, which operated on Stanford servers for more than a year before it began to take up too much bandwidth.
Sun Microsystems cofounders Vinod Khosla, Scott McNealy, and Andy Bechtolsheim named their company after the university's network.
Khosla, McNealy, and Bechtolsheim were Stanford grad students when they founded software company Sun Microsystems in 1982.
The company's name is an acronym for Stanford University Network, the campus' computer system.
Bill Joy, who was a Ph.D. student at Berkeley at the time, is also considered an original founder of Sun.
See the rest of the story at Business Insider
It's a beautiful Sunday afternoon in August. All over the Bay Area people are out having fun in the sun. Me, I'm just sitting here trying to work. It's not going very well. I've spent the last half hour fixated on a couple of hawks gracefully riding the warm air currents above the majestic coastal redwoods. It looks like fun. Sigh.
My wife (also working) just texted, "On my way home. What's for dinner?"
Welcome to my life — the life of a boss, a small business owner. Not what you expected? Me neither. But I've been at it for 11 years and it's a little too late to backpedal now. The door doesn't really swing back the other way, not after that long. At this point I'm the only one who would ever hire me.
I know how sad that sounds but don't cry for me. I'm actually pretty content. It's just that there are a few things I sort of wish someone had told me before I pulled the plug on a lucrative executive career and jumped to the other side — you know, the one where the grass is always greener.
Would it have mattered? Probably not. Nevertheless, here are 10 things I know now that I wish I'd known then.
Self-discipline — what's that? Even after decades in the corporate world, the amount of self-discipline required to work entirely on your own — especially at home — was a real culture shock. Forget about forcing yourself to work; forcing yourself not to work is even harder. It takes real discipline not to be on 24x7.
The expenses really add up. The Fed says there's no inflation. I want some of what they're smoking. Health insurance, self-employment tax, income tax, and payroll tax alone will eat you alive. Federal, state, local — all the bureaucrats have their hands in your pockets.
You become the house slave. It doesn't matter how much you work or how many X chromosomes you have. If you're the one that works at home, you're the one that gets stuck with most of the housework. Don't ask me why; that's just the way it is.
It is lonely at the top. What I miss most is the camaraderie, the relationships, the friendships, going out to lunch or for drinks after work with the gang. My dog is great but she just lies there.
There is no safety net. Everyone who works in corporate America should thank their lucky stars that, with rare exception, no matter how badly they screw up, someone is always there to bail them out. Even if you get fired you can go somewhere else. When it's your gig, you work without a net.
It is way harder than it looks. Maybe your passion is marketing, accounting, recruiting, engineering, design, web development, or cooking. That's nice. Now you get to wear all the hats. You can outsource some of the work but you are still the chief everything officer. Running a business is harder than it looks.
There's nobody to dump on. You know the old expression "$#*! rolls downhill?" When you're your own boss it's as if there's an enormously powerful fan at the bottom of the hill that blows everything right back at you.
It's a thankless job. I guess everyone gets a charge out of being recognized for a job well done or getting a bonus for exceeding expectations. It's like hitting a home run or scoring a touchdown when you were a kid. Patting yourself on the back is just not the same.
It still feels like work. This may sound a bit naïve but you'd be surprised how many people get it in their heads that working for themselves is going to be different. It never occurs to them that it will still feel like work … because it is. You still have to do everything you hated about your job and then some. Surprise.
You may end up working for a loser. There's really no way to sugarcoat this so I'm just going to say it straight out: everyone isn't Bill Gates. Business success requires troubleshooting, problem-solving, and decision-making skill. It takes perseverance, self-motivation and guts. It takes a lot of things that most people don't have.
Still, there's something to be said for experiencing all that on your own. I mean, who am I to deprive you of all the pain and frustration? Besides, there's an awful lot of fun and fulfillment, too. Good times, bad times. Yin and yang. That's life and, you know, I wouldn't have it any other way. I take it all back. Working for yourself is a blast, a trip, a walk in the park. Go for it.
My work here is done. Time to start on dinner.
While some people knock advanced degrees, many entrepreneurs benefit from formal business training. But there are certain things even the best programs don't usually teach (or teach well) that are critical for you to master.
11 founders from YEC name the startup skills that only on-the-job experience can equip you with:
1. Startup-style leadership
Small teams are a totally different beast than a corporate environment. You have one person filling multiple roles, no clear ladder for advancement, and people often have to train themselves. Employees in startups need to be much more empowered and forward-thinking than in traditional companies. It's not something that is taught in school. —Laura Roeder, LKR Social Media
2. The power of networking
A large part of success in business comes from the people you know and the power of your network. Schools don't talk about growing and cultivating networks or the many facets of networking (actively or passively), but everyone has a network and it would behoove students to learn how to maximize them. —Darrah Brustein, Network Under 40 / Finance Whiz Kids
3. Grit in the face of failure
You cannot learn grit in a classroom. Being an entrepreneur is about making the effort to create something from nothing. You can learn theories and best practices in a classroom, but you cannot learn the grit and dedication it takes to see your vision to the end. So much of success is in the willingness to invest 100% of your energy in the face of great uncertainty, and to wake up the next day ready to do it again. The path is not smooth and you will take your lumps. Grit is about falling down and getting back up, again and again. You can't learn that in a classroom. —Andrew Thomas, SkyBell Technologies, Inc.
4. The loneliness of being a founder
Not to sound all melancholy here, but being a founder is lonely because all of the bucks stop with you. There is no one to complain to (negative feedback should only go up) and your job is to create solutions and constantly pitch in a positive light. "Never a bad day at a startup," a VC recently told me. That creates a barrier between a founder and the rest of the world around them. It's an interesting challenge, and finding a support system of mentors and advisors is crucial. —Trevor Sumner, LocalVox
5. It's a marathon, not a sprint
Schools breed ambitious workers who run toward the finish line and try to answer every right question first above all, but this is simply not the best approach in the real world. There will be lessons you only learn by looking back, and there will be long droughts filled with disappointment. Instead of wallowing in that, reassure yourself that you're working toward a larger goal. You're in it for the long haul, and that is more valuable than any short-term victory. —Rob Fulton, Matikis
6. How (and when) to scale
No school can teach you when it's the right time to expand your business, make new hires and take on more responsibilities. A lot of the time this will come from a gut feeling and the strategic relationships you have built. No textbook can teach you this skill. —Jason Grill, Grill Media | Sock 101
7. An effective sales process
For all that you learn about marketing, they don't teach you about effective sales. Nobody teaches the process from prospecting to suspecting, to lead development and nurturing, to closing the sale. —Jon Cline, Rokit SEO
9. Product design and creation
You can learn marketing theories and business operation strategies in school, but school can't teach you what to sell. You need to understand how to identify the market and how to create a product that your market will consume. This is very hard to teach, and usually comes into effect by someone stumbling upon it or being in therightplace at theright time. I do think it's a great exercise to design MVP products or even just landing pages that are designed to promote an imaginary product. These really bring the product to life and can teach you a lot about what product creation is really all about. —Dave Nevogt, Hubstaff.com
School by nature is very static, with a built-in roadmap for how to graduate. It does not teach you how to scrap a roadmap and change your destination, as entrepreneurship often dictates. Learning how to adapt is essential to having even a chance at success in being a entrepreneur. —Phil Chen, Systems Watch
11. How to live with pressure
In school, the feeling and emotions that accompany stress come and go depending on tests, quizzes and assignments. You stress, you take the test, then you are free to breathe a sigh of relief. Entrepreneurship is living with the fact that there is no sigh of relief, ever. Instead you learn to live with stress, you acknowledge it, and you learn to cope with it daily. Learning to live with stress and pressure is something no one can teach you but a challenge you have to face and overcome within yourself. —Kim Kaupe, ZinePak
The areas where women entrepreneurs are lacking get a lot of attention — in the tech industry, say— but perhaps we should spend a little more time celebrating the many and growing spaces where female business owners are doing really well.
Based on the fourth annual OPEN State of Women-Owned Business report, these are numerous and sometimes stereotype-shattering. The comprehensive look at the state of female-owned firms delves into the rate of business formation by women (an impressive 1,200 new businesses or so a day), the demographics of female business owners (happily, increasingly diverse), and the economic impact of women-owned firms. And it zooms in on geographic trends. If you want to know what areas of the country are home to the most women business owners and where those businesses are truly thriving, this report is for you.
As you'd expect, the most populous states, like California, have the most female-owned businesses in a straight head count, but things got more interesting when the researchers looked not just at the quantity of firms but where women-owned companies are contributing the most to the economy. The report calls this metric "growth in economic clout" and reached a number for each state by "averaging together the rankings of growth in the number, revenues, and employment of women-owned firms."
So where are women-owned firms an increasingly large share of the business landscape? Not California or any other recognized entrepreneurial hot spot— not by a long shot. Here are the top 10:
Where are women-owned businesses the least dynamic? New England and parts of the Midwest, I'm looking at you. "At the other end of the spectrum, the states in which the combined growth in the number, revenues, and employment of women-owned firms lag the national average to the greatest extent are Iowa, Vermont, Rhode Island, Ohio, and Maine," the report reads.
But the dominance of western states in the ranking isn't the only mildly surprising but cheerful news on the expanding territory being conquered by women-owned businesses. The ladies are also breaking into new areas vis-à-vis sector as well as geographic location.
"Women-owned firms are starting and growing businesses in all industries, diversifying into sectors previously described as "non-traditional" for women. Over the past 14 years there has been an evening-out in the concentration of women-owned firms, meaning that an increasing number of women-owned firms can be found in all industries," concludes the report.
Did this ranking surprise you?
SEE ALSO: 5 Things The Happiest Entrepreneurs Do
What did your parents teach you about money? If you’re anything like me, you were taught that money was earned by completing a task.
As a kid, I had a weekly allowance. My parents made a chore list. Each week I was responsible for taking out the garbage, doing the dishes, vacuuming the house, and doing the laundry. In exchange for this work, I received a hefty $5.
It seemed like a good deal to me, but what did I know? I was a kid. Looking back, that equated to something like $0.50 per hour. A screaming deal for my folks.
Now, as a dad of two boys, Liam and Dylan, I’m in the process of thinking through how I want to structure the pay system in my own home.
This is my oldest son, Liam. He’s seven. He’s awesome, bright, funny, and, as you can see, debonair. And he wants to make some money.
After all, there’s a ton of things he needs to buy. You know, like a fourth football and additions to his ever-expanding Beyblade collection. Just like the rest of us, he wants to keep up with the Joneses.
So, the time came a few months back when Liam wanted an allowance.
My initial thought was to do what my parents taught me: Make a chore list and negotiate a fixed-price allowance that was tilted heavily in my favor.
But after giving it a bit more thought, I realized that if I did that, I’d be giving Liam a huge disservice because an allowance teaches kids poor lessons on money. Here’s a few that come to mind.
Bad money lesson #1: Time and tasks are your commodity
Employees sell their time to entrepreneurs to do tasks. You come into the office, slog it out for eight to ten hours, do whatever you’re told, and in return get a paycheck. As an employee, your most valuable commodity is your time and the tasks you accomplish in that time. The problem is that if you don’t have time to sell, if you get sick or injured for instance, you don’t make money. And if companies aren’t looking to buy your time because there aren’t enough tasks to go around, you don’t have a job, no matter how talented you are.
By contrast, entrepreneurs sell ideas or products. They get paid not for their time and tasks, but for the value they bring to the table in solving problems for the world and creating jobs. And if they do it right, they create companies and systems that make money even when they aren’t working.
Paying Liam an allowance for his chores would teach him that his time and tasks are what is of value to me. It’s not.
Bad money lesson #2: Do the bare minimum
As a kid, my goal was to get my chores done as quickly as possible so I could then go and play. There was no pride in my work, and because I was getting paid for my time, I tried to hurry through my tasks. This resulted in a constant struggle between my parents, who wanted the job done right, and me, who wanted to just get the job done.
Often, this is carried over to our roles as employees. Because there is no ownership, the goal is to do the tasks we’re assigned at the minimum level of acceptance. I’m not saying this is everyone, but it is a lot of folks.
I see these patterns in my son, too. I have to constantly push him to complete a task correctly. Entrepreneurs, however, know the importance of quality and passion in work. Because their livelihood is dependent on not just getting the job done quickly, but also getting it done right, they invest themselves into their work in a way that those who sell their time and tasks don’t.
Bad money lesson #3: Life is about work, then play
A natural outcome of selling your time for tasks is that you bifurcate your life. Right now, Liam still thinks that work is a drag that you have to get through in order to be free to play. This creates a destructive pattern of looking at work as a necessary evil to make money so that you can then do what you want.
Employees can have this mindset too. That’s why you often hear people say they can’t wait for the weekend. And why they also love the phrase “T.G.I.F.” The goal is to get through the workweek so that then you can pursue the things you’re actually passionate about.
Entrepreneurs don’t have this mindset, at least not the good ones. True entrepreneurs make their passions their living. They don’t live for the weekend. They live to solve problems and create value. The irony is this often translates into more fun and downtime down the road.
So, we’ve decided not to do allowance at our home. My dream for Liam is that no matter what he does in life, he grows up with an entrepreneurial spirit (which, by the way, I think the best employees also have). With this in mind, here’s what we’re teaching him.
Good money lesson #1: In life, we have responsibilities
Liam still has chores. Each day he’s expected to feed the cat, empty the trash and recycling, put the dishes away, and keep his room clean. For that he gets nothing other than the satisfaction of a job well done (hopefully he feels that satisfaction soon).
He’s protested. He believes he should get money for these tasks. But we’ve taught him that he doesn’t get paid for doing work around the house. Just like mom and dad have responsibilities in the home that we don’t get paid for, so does he.
He’s not there yet, but hopefully he’ll learn that responsibility is a way of life, and you don’t always get paid for being responsible.
Good money lesson #2: Real value comes in solving problems
In our house, you get paid for recognizing a problem and proposing a solution. I’ve taught Liam that if he wants to make money, he has to pay attention to the world around him, identify a problem that needs fixing, and propose a solution. We then negotiate a payment.
So, for instance, during the fall, Liam noticed the yard was full of dead leaves. He approached me with the proposition to clean up the leaves for payment. We negotiated $10 fee. He did a great job and made $10 in a couple hours, which is pretty good money for a kid.
And he’s extended this thinking in other areas. The other day, he noticed that his nana and papa’s car was dirty. He proposed to clean it for $5. A deal was struck. He then leveraged that deal into cleaning his aunt’s car too. He made a total of $10 in a couple hours — and got to play with the hose.
At the end of his car-washing day, he proudly announced he was starting a car wash company. “What will it be called?” I asked. “Liam’s Car Washing,” he said proudly.
Good money lesson #3: A great business takes a great plan
I was proud of Liam for wanting to start a car washing business, but I wanted to teach him some more lessons. So, I asked him what materials he was going to use to wash the cars he lined up. He told me he would use a bucket from the garage and the soap and sponge by the sink. I told him that was a good idea with one exception, those things weren’t his to use. He needed to finance his business with his own money and materials.
I then asked him how he would get new business. He told me that he’d put a sign out. “Do you think that will be enough?” I asked. We agreed it probably wasn’t. He needed a better marketing plan.
So, lately, we’ve been working on a business plan together. Liam now knows he needs to purchase materials for his business and to creatively find a way to get customers from around the neighborhood. He is learning the importance of business planning.
Good money lesson #4: Life is about work as play
Liam loves projects. The other morning he was up at 6 a.m. with about twenty "Highlights" magazines spread out before him.“What are you up to?” I asked. “I’m trying to decide which craft I want to do,” he said.
Kids inherently want to build. Whether it’s crafts or legos or forts, they throw themselves into projects with abandon. The best byproduct of teaching Liam about entrepreneurship is that he’s learning that work can be fun, especially if you’re building something you’re passionate about.
Ultimately, I don’t have all the answers. This is as much a learning experience for me as it is for Liam. But it is awesome to see my son begin to see the world in a different way than I did as a kid.
Since he’s seven, the expectation isn’t that he creates a great business. It’s that he begins to change the way he thinks about money and business. My hope is that as he grows up, these early lessons will set the foundation for great success in life, obviously with many hard lessons along the way.
I see passion building in him as he looks at making money as a project that involves solving problems rather than as selling his time to hurry through tasks. Every kid loves a good project … and so do I. I see him slowly turning into an entrepreneurial thinker. And no matter what he does in life, that type of thinking will help him excel.
As I wrote above, “Ultimately, I don’t have all the answers. This is as much a learning experience for me as it is for Liam.” Part of parenting is being able to receive feedback, learn from it, and put it those lessons into practice, no matter what form it comes in.
In the original version of this post, I had a poorly-worded section called “Leverage talent” about my attempts to teach Liam about hiring employees as part of a successful business.
Sam Biddle at ValleyWag wrote a vitriolic post in response called, “How to Turn Your Kid into a Little Asshole.” While I’m dismayed at the tone of his post and the heartbreaking attacks on my son in the comments, Sam has a point.
At the end of the day, I’m just a normal guy trying to be the best dad I can. I make mistakes all the time. I’m not claiming to be “successful.” I’m just processing my thoughts from what’s worked for us so far.
What I really believe is that part of a great business is hiring the best talent you can. Leveraging is totally the wrong word and not reflective of what I wanted to say. It was a poorly thought out section.
A couple takeaways:
It was the wrong approach, and one I’ll talk with Liam about to rectify.
Thanks to my critics for helping me refine how I’m approaching my parenting. I’m happy to take the knocks on this, as being a dad is a life-long learning process. I wish I could be the best dad ever right out of the gate, but even harsh feedback is valuable feedback because it’s not about me, it’s about my son.
So, my final request is that if you disagree with me, please do so in a constructive way. I’m happy to dialogue, and am always open to change.
We all know there is no one right way to start your business — certainly no failsafe blueprint to success. However, there are several common pitfalls that unnecessarily trip up many entrepreneurs on their road to success, a few of which I fell victim to myself while founding Educents.
Now, there is value in learning from your mistakes but here are some rookie mistakes that don't need to be made. Trust me, we all make plenty of completely original mistakes on our own that we can learn from.
1. Know when to stop bootstrapping.
In the beginning it's fun and exciting to do everything yourself but there will come a point when cutting corners and sleeping under your desk (yes, I did sleep under my desk at times) is counterproductive. Decide which tasks you're going to outsource, find reliable people for the handoff and get a little sleep.
At first, we tried cutting corners with our programming and got a subpar product. When we eventually invested in a more quality service, we saw huge returns. Consider hiring a graphic designer, a bookkeeper, or an office manager. Think hard about where your time is best spent.
2. Don't go it alone.
Grab a co-founder, a like-minded friend, or find a group of fellow entrepreneurs that meet regularly. It is almost impossible to maintain clear focus and an intelligible vision after too many late nights at the office. You'll need someone to bounce ideas around ideas with, someone to give you a different perspective, and someone who will give support when you feel like you've hit the end of the road.
There have been countless times when my co-founder has stepped in when my brain is fried, and vice-versa. You'll need to identify the people who will support you early on if you want to succeed.
3. Don't let expectations snow you under.
Let people know what you need from them and what they can expect from you. Your spouse, your family, your mentor — everyone expects something from you. Make sure you're managing those expectations. I once told my Mom, "I'll be at the family reunion in June, but I might not leave my office until then." It was April. Make sure to manage expectations concerning your availability.
This is particularly important for women in leadership. There are strong opinions out there about how women should conduct themselves at work and in their personal lives. Make sure you're crafting your own narrative and have it on repeat — expectations are set and then met. Be clear about who you are, what you're standing for, and why you're standing for it (and if you're going to make that family reunion).
4. Don't assume your team "gets it."
As a founder, you have to be the cheerleader, the HR lead, the bad guy, and sometimes the janitor. Having a team that is talented and understands the bigger picture will help push your goals and objectives into motion.
Make sure you're playing your part in helping them "get it." It's important to convey your passion for what you're doing. My co-founder and I spend a lot of time talking about the educators who benefit from Educents, even sharing love mail on a regular basis so the team can celebrate our impact. That kind of transparency inspires and aligns the team to our vision.
We also prep our teams when a hard week is coming. If they know we're going to be out of the office or particularly stressed, they step up in really extraordinary ways.
5. Don't underestimate how long the road can be.
Every time I think, "six months from now" I am gravely mistaken. Companies are not born overnight. It takes months, maybe years, of hard work to get off the ground. When you think the long nights are over, something else will come along that's worth staying up for.
This also applies to your salary (sadly). I had some pretty grand ideas about how fast I was going to get a return on the investment I made in my education when I got my MBA. Educents became successful quickly but when we began making money, we invested it back into the company. Hopefully, we'll have the fancy cars in retirement.
You may end up stepping on one of these entrepreneurial landmines. When you recognize that "thing" just isn't working, find a way to recover. You are going to make mistakes, lots of them, but find a way to make them work for you instead of against you. Then write your own list of rookie mistakes.
Strong fighters and successful entrepreneurs have a lot more in common than you'd think.
When great boxers step into the ring, and when the very best entrepreneurs start a new venture, they're always determined, focused, and — most of all — fearless.
James Markham can attest.
The 43-year-old Washington, D.C. native is a part-time boxer and full-time business owner.
When he founded his small business — Project Pie, a fast-casual, build-your-own pizza company — in 2012, he applied what he learned in the ring to his new venture, and the strategy proved to be successful.
Since Project Pie first launched, Markham and his team have opened five locations in the U.S. and six in the Philippines, and plan to open 20-plus additional stores by the end of 2014. On average, he says, each location yields about $1.4 million annually in revenue.
We spoke to Markham about the parallels between boxing and entrepreneurship — and how his time in the ring helped him become a successful small-business owner.
Business Insider: Can you share a little bit about your background?
James Markham: I grew up on the East Coast and was raised by a single, Italian mother whose food, ironically, was horrible. Because of where I lived and my Italian heritage, I was always around good pizza.
An important event happened when I was 11 or so. My mother dropped me off to see a movie, but I was way too early. While I was waiting, the owner of the neighborhood pizza place came to open his restaurant and invited me to come in and said he would make me a slice while I was waiting. While I was eating that awesome slice he was hand-tossing dough to make the pies for the day and I thought, "man, that is cool." I made a promise to myself that I would open my own pizza restaurant someday. I didn't think about it for 20 years, but eventually I did it.
BI: So, how and when did you get into boxing?
JM: I started boxing when I was 10 or 11, just messing around with friends. I had, let's say, "aggression issues" and found boxing to be the proper outlet to get it out of my system without going to jail. I didn't get serious about boxing until the end of high school when I started competing in amateur matches. I don't want this to sound like I was some world-class boxer, because that's not the case. But it did do a lot of good things for me.
BI: Did you pursue it after high school?
JM: At 22, I contemplated going pro, thinking, "Hell, if I'm going to keep getting punched in the face, I might as well get paid for it." But I quickly learned that I was not at the level of some of those guys. Being tough is not always a good thing in boxing. I was getting my butt kicked all over the ring — but I never quit.
Although I never boxed professionally, I did fight in my first professional MMA at the age of 42 with a Southern California promotion called Gladiator Challenge. I won that fight via knockout in 56 seconds in the first round. Not sure if I was good or lucky, but I will take it either way.
BI: Now let's get back to the pizza story for a minute. Can you tell us the story of how you eventually became an entrepreneur?
JM: I got my start from a little bit of savings, family help, and pulling money off credit cards. I was inspired by what Chipotle had done with Mexican food (efficient assembly line, fresh ingredients, and great branding) and thought the same style of restaurant could be done with pizza.
I founded Seattle-based MOD Pizza in 2008 – essentially pioneering the fast-casual or "build-your-own pizza" industry. I developed the concept and even the recipes, but split ways with the partners over different visions for the brand. I then started Pieology in Southern California, another fast-casual concept, but again had disputes over the direction of the brand with the other partners and got out. Finally, I was able to start Project Pie, which is the culmination of everything I learned about the pizza industry.
I took the entrepreneurial route because I've always known that I'm super passionate, even hardheaded — and never wanted to work for anyone. I also know that I can be a pain in the ass and that no one would ever want me to work forthem.
BI: Did you work in the food industry at all before starting these companies?
JM: Yes. Before starting Project Pie, and before founding the other two pizza brands, I held various roles in the restaurant industry, including franchisee of a Cold Stone Creamery shop — so I understand franchising from both sides.
BI: Can you tell us a little more about Project Pie specifically?
JM: Project Pie launched in 2012 when we opened the first location in the MGM Grand in Las Vegas.
My goal was to create a concept that's hands-down better than the competitors from the overall vibe to the quality of food to the value.
Whether you choose two or 26 toppings, all Project Pie pizzas are the same price, they are cooked in two minutes in a high-temperature, stone-hearth oven and served to guests in less than five minutes from the time of their order.
Everything about Project Pie is authentic. No two restaurants will ever look the same.
BI: So, it's clear you have two passions: boxing and pizza. Are there any parallels between boxing and entrepreneurship?
JM: There are a lot of parallels.
Just like in boxing, entrepreneurs need to stick to their game plan. As a boxer, my goal is to go out there and impose my will on my opponent — and that's how I think of business. I have always had that fighter mentality; if it has worked so far, why change?
I like to know what's going on in the fast-casual pizza segment, but I never worry about what my direct competitors are doing. I do things the way I want to do them. I am not worried about my competitors' game plan. Like a boxer, I am going to just force my game plan on you.
Another parallel: Business is a 12-round fight just like boxing. It's a marathon. The entrepreneurs who can withstand competition — like boxers who can stay standing through 12 rounds — are the ones who are left standing.
BI: How have your experiences in the boxing ring helped you succeed as a small-business owner?
JM: For starters, I have discipline. Business owners must develop their game plan and stick to it. They must have the discipline to stay true to their game plan and not deviate. In boxing, maybe your game plan is to establish your jab, work the body. Every time you go to jab, however, you get hit in the face — so you slightly alter how and when you throw your jab. Your game plan doesn't always work out immediately. But you have to stick with it and eventually it will work. People abandon game plans and lose faith in abilities too quickly. That's why they fail.
Boxing has also taught me how to clear my head, which is an important skill to have as an entrepreneur. It has also taught me to be mentally alert — which has been useful in business.
And finally, boxing has helped me hone my fighter mentality, which has been powerful as an entrepreneur. In business, when someone says I can't do something, I want to prove them wrong.