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- 03/25/13--16:54: _Dramatically Increa...
- 03/26/13--14:21: _Few People Understa...
- 03/29/13--12:03: _13 CEOs Who Get Pai...
- 03/28/13--09:21: _8 Common Bad Habits...
- 04/09/13--15:02: _What The Future Wor...
- 04/11/13--16:30: _Startups Should Jus...
- 04/22/13--06:38: _VC: This Is My Favo...
- 04/22/13--13:53: _INSTANT MBA: 'It Ta...
- 04/24/13--08:22: _4 Reasons Atlanta I...
- 04/27/13--11:09: _4 Good Work Habits ...
- 04/30/13--13:30: _A Great Idea Withou...
- 05/09/13--03:53: _One No-Brainer Reas...
- 05/09/13--06:30: _A Struggling Small ...
- 05/09/13--15:22: _Obamacare Could Lea...
- 05/09/13--17:05: _8 Ways To Be A Memo...
- 05/14/13--12:29: _INSTANT MBA: Give E...
- 05/15/13--08:11: _6 Traits You Need I...
- 05/16/13--07:27: _Work For Yourself O...
- 05/17/13--06:06: _Watching The Goldma...
- 05/17/13--10:34: _9 Management Lesson...
Present your arguments in a logical manner.
Be willing to debate ideas, and be open to feedback and critiquing.
Be a problem solver; come to the table with a solution.
Keep your cool; don’t get offended by their bluntness.
Don’t make small talk.
Don’t micromanage them.
Use humor when dealing with Resourceful Oranges.
Do not expect a micromanager.
Create a competitive environment, because these workers think it’s a game.
Tell Resourceful Oranges what you want accomplished, not how to do the job.
Make use of their skills in a crisis situation.
Make them feel part of the team.
Present your ideas in a systematic way.
Be prepared and open to criticism.
Be a team player.
Give these people a sense of belonging.
Fill them in on the details of a task.
Focus on the future, not the past.
Make use of stories, metaphors and analogies when explaining yourself.
Use personal examples to make your point.
Listen to them when they are not satisfied with something.
When presenting new ideas or tasks, start with the big picture and then drill down to the detail if necessary.
- 03/29/13--12:03: 13 CEOs Who Get Paid Shockingly More Than Their Employees
- 03/28/13--09:21: 8 Common Bad Habits That Ruin Client Relationships
- 04/09/13--15:02: What The Future Workplace Will Look Like [SLIDE DECK]
- 04/11/13--16:30: Startups Should Just Drop Their Marketing Team
- 04/22/13--06:38: VC: This Is My Favorite Entrepreneur Story In A Long Time
- Extreme product passion. When his packaging suppliers tried to get him to change his product to make it less hot or more sweet for American customers he refused, ““Hot sauce must be hot. If you don’t like it hot, use less,” he said. “We don’t make mayonnaise here.”
- Uncompromising product quality (he processes his chillies the same day they are harvested)
- He had a guiding principle for the company.
- Focus on the customer and provide value - ”We just do our own thing and try to keep the price low. If our product is still welcomed by the customer, then we will keep growing.” He said this in response to the fact that several other companies are now stealing the Sriracha brand name. He can’t trademark it since it’s the name of a city. By the way, he has never spent a dollar on advertising
- Provide something distinctive. What will you be known for? Given the brand dilution going on with the name Sriracha how can he still grow his business? The distinctive design of his packaging. That crazy rooster. All those freaking languages on the bottle – the mystery of it all! And the green caps.
- 04/24/13--08:22: 4 Reasons Atlanta Is A Great Place For Entrepreneurs
- 04/27/13--11:09: 4 Good Work Habits That Can Totally Backfire For Managers
- 04/30/13--13:30: A Great Idea Without Action Is Just A Regret
- 6 Non-Business Books That Will Make You Smarter
- Inside a Completely Transparent Company
- 9 Habits of People Who Build Extraordinary Relationships
- 05/09/13--03:53: One No-Brainer Reason To Set Up Your Company In A Foreign Country
- 9 Habits of People Who Build Extraordinary Relationships
- The Power of Gratitude
- 10 Things Extraordinary People Say Every Day
- 05/09/13--17:05: 8 Ways To Be A Memorable Boss
- 05/14/13--12:29: INSTANT MBA: Give Employees The Tools They Need To Be Successful
- 05/15/13--08:11: 6 Traits You Need If You Want to Lead
- 05/17/13--10:34: 9 Management Lessons We've Learned From The Office's Michael Scott
The best leaders have an acute understanding of their employees’ temperaments. In the book "Colour Savvy," authors Susan Geary and Anne Bulstrode discuss four different temperaments—Inquiring Green, Resourceful Orange, Organized Gold and Authentic Blue—based on a person’s needs and values.
If you’re able to identify these different temperaments in people, you can pinpoint their strengths and challenges. You will also understand the best ways to interact and work with them.
Temperaments are different from personalities, because several temperaments can make up a personality, Geary and Bulstrode say, but everyone is born with a “preferred way of doing things,” or a preferred temperament. Here’s how to best work with these four types:
1. Inquiring Green
Inquiring Greens include Martin Luther King, Jr. and Woody Allen
“Inquiring Greens” are constantly on an ongoing quest for knowledge, usually through facts and data. They tend to be independent thinkers and don’t like others telling them what to do. “They value progress and improvement … tend not to get mired in the past or present but are oriented to the future and progression,” the authors write.
These employees make great visionary and strategic leaders and are “especially adept at dealing with complex issues—whether it is a computer, mechanical or organizational problems.” They are primarily big picture people and can see possible pitfalls and contingencies in a situation. However, they are also prone to feeling uncomfortable in social situations and therefore may give off a cold, impatient and uncaring vibe.
Tips for working with an Inquiring Green:
2. Resourceful Orange
Resourceful Oranges include Ronald Reagan and Richard Branson
These people typically hate to sit still for long periods of time and usually value excitement and action more than planning. They tend to make decisions quickly and don’t like to spend too much time thinking about it. Furthermore, they prefer change and unpredictability to a stable environment.
Resourceful Oranges are the most adaptable out of all the Temperaments and “function optimally when they need to work on tight deadlines or juggle multiple priorities.” When problems arise, these people automatically go into action mode and don’t tend to panic. They are also great negotiators and have an easy time charming others to get them on board with their missions.
Since they are highly energetic and like to do things spontaneously, they may have a reputation as being ”immature, rambunctious, noisy, disordered and careless.”
Tips for working with a Resourceful Orange:
3. Organized Gold
Organized Golds include Queen Elizabeth II and Julia Child
These people think it’s important to be part of a community, so they work best when they feel a sense of belonging. They prefer hierarchical structures and believe that everyone should have specific duties and responsibilities. They perform best in teams and groups. Organized Golds thrive at planning and organizing and have an easy time identifying priorities and managing others.
As for their challenges, Organized Golds often have a difficult time remaining calm in different scenarios. They are overprotective, sometimes rigid and, often, overworked and exhausted. They prefer routine and don’t do well with change.
Tips for working with an Organized Gold:
4. Authentic Blue
Authentic Blues include Oprah Winfrey and Jimmy Carter
These people are always trying to find meaning and significance in their personal and professional lives. Out of all the temperaments, Authentic Blues are the best at communicating with others and “can be gifted in the use of stories, analogies and metaphors.” However, since they are so in tune with their feelings and everyone else’s feelings, these people are often hypersensitive to criticism and conflict and are “overly helpful.”
Tips for working with an Authentic Blue:
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What are the odds that your new idea will succeed? If it does, what will the return to you be?
One of the problems that we have in business (and life!) is that we often can’t know the answer to questions like this in advance. And this drives us nuts. Consequently, a lot of people invest a great deal of effort into reducing uncertainty. There are two problems with this approach. The first is that we often don’t understand uncertainty very well, and the second is that profitably opportunities only exist where outcomes are genuinely uncertain.
Frank Knight wrote about this in 1921 in a great book called Risk, Uncertainty and Profit (which you can read here). He distinguished between two types of uncertainty. The first type is when we know the potential outcomes in advance, and we may even know the odds of these outcomes in advance. Knight calls this type of uncertainty risk.
An example of risk is rolling a pair of dice. Before we roll, we know in advance what the odds are for each possible outcome (provided that the dice are fair). Knowing these odds forms the basis for all of the games of chance that we can play. Dice are relatively simple, cards a bit more complicated, but we can know all of the odds with them in advance.
Genuine uncertainty is different. This occurs when we don’t even know the possible outcomes in advance, let alone their probabilities. Genuine uncertainty occurs in complex systems, where lots of actors interact over time – the economy, for example.
The important point that Knight makes is this: real opportunities for profit only exist in the face of genuine uncertainty. Which means that if we want to innovate successfully, we not only have to deal with uncertainty, we must seek it out.
The Problems of Uncertainty
We’re not the most rational decision-makers in the first place, and confusing uncertainty with risk makes things worse. Here’s how:
We act like everything is just a risk. Here is how Knight puts it:
Business decisions, for example, deal with situations which are far too unique, generally speaking, for any sort of statistical tabulation to have any value for guidance. The conception of an objectively measurable probability or chance is simply inapplicable. The confusion arises from the fact that we do estimate the value or validity or dependability of our opinions and estimates, and such an estimate has the same form as a probability judgment; it is a ratio, expressed by a proper fraction. But in fact it appears to be meaningless and fatally misleading to speak of the probability, in an objective sense, that a judgment is correct.
When we act like everything is a risk, we greatly increase the chance of failure. However, the opposite can also be a problem:
We act like everything is unknowable. Uncertainty often gets blamed for inaction. Barry Ritholtz takes aim at the problems with this:
It finally dawned on me what the uncertainty trope is all about. It took a conversation with a nervous chief executive to reveal it, but I teased out the answer.
Most of the time, people exist in a happy little bubble of self-created delusion. We engage in selective perception, seeing only the things that agree with us. Our selective retention retains the good stuff and disregards most of the rest. In our minds, we are all younger, better-looking, slimmer, with more hair than the camera reveals.
In short, we construct a reality that bears only passing resemblance to the objective universe.
During those brief instances when the facade fades, the curtain gets pulled back and the ugly reality becomes clear. We get a glimmer of understanding about our own lack of understanding. That’s when the grim reality of the human condition is revealed — and it terrifies us.
The next time you hear someone mention uncertainty, ask yourself this: How much less do they actually know about the future today vs. what they knew last week or year? How much less do they think they know?
We can’t use not knowing as an excuse to not act – because we never know.
It seems like we either suppress uncertainty, and act overconfidently, or we overemphasize uncertainty, and don’t act at all. Both are bad outcomes.
How to Respond to Genuine Uncertainty
Managing risk is pretty straightforward. You match up your investment to the odds of it paying off. Managing uncertainty is trickier.
Fortunately, there are a few things that we can do. It’s important to cope with uncertainty effectively, because doing so allows us to go where the opportunities are. Here are some strategies:
1. Aggregate. When I get in my car to drive to work tomorrow, it’s impossible to know if I’ll have an accident or now. And yet I have car insurance. How can this be?Insurance works because when you add up enough individual cases of uncertainty, you might end up with probabilities.When we’re talking innovation, this means that Linus Pauling was exactly correct when he said that the best way to have a great idea is to have a lot of ideas. Volume can reduce uncertainty. This is what venture capital firms do too when they make a wide range and high number of investments.
2. Seek out uncertainty to increase the chance of hitting it big. If you enter the lottery, the odds of winning are higher than the payout – it’s a sucker bet. Innovation is the opposite – the odds of winning are lower than the payout – it’s a positive feedback loop. Taking advantage of this is a smart play. This is the process of looking for positive outliers.
Understand that when we face uncertainty, some ideas will fail. But this is what drives progress. William Janeway has an interesting take on this in his book Doing Capitalism in the Innovation Economy:
Schumpeter’s process of creative destruction can only proceed by trial and error. We see that which is created through the lens of survivors’ bias and ignore the “hopeful monsters” that economic evolution has spawned and left behind in metaphorical emulation of Darwin’s process of natural selection. No doubt every one of them was launched on the basis of an exercise in forecasting future revenues, costs and an expected value to be compared with a rough estimate of the cost of capital. As Schumpeter well knew, the wastage is the measure of the inescapable uncertainty that attends the practice of doing capitalism: We need only visualize the situation of a man who would … consider the possibility of setting up a new plant for the production of cheap airplanes which would pay only if all people who drove motorcars could be induced to fly. The major elements in such an undertaking simply cannot be known … Neither error nor risk expresses adequately what we mean.
Waste measures uncertainty!
It’s important to understand the distinction between risk and uncertainty. The two situations require different responses – and if we confuse the two, we won’t use the right approach.
And that really increases the risks we face!
In the past 30 years, compensation for chief executives in America has increased 127 times faster than the average worker's salary.
An annual list from Payscale compares the ratio of CEO to employee pay for the largest 100 companies as ranked by Fortune last year. (CEO pay is gathered from Fortune's list and includes salary, bonus and profit sharing, but does not include equity.)
The gap is most extreme at Wal-Mart Stores, Inc., where CEO Michael Duke gets paid 1,034 times more than his average worker. This ratio is twice as much as the second company on the list, Target (597:1).
Payscale found that worker satisfaction tends to be low at companies with an extreme CEO-to-worker pay ratio.
Alan R. Mulally gets paid 304 times more than the average Ford employee.
The ratio for CEO pay to average employee pay at Ford Motor is 304:1 with a CEO annual compensation of $20,830,000 and median annual employee compensation of $68,500.
Ford Motor pays its employees 3 percent above market relative to companies in the same industry and 70 percent of its employees say they are highly satisfied.
In 2012, the company reported $20,213 million in profits and is ranked number nine on the Fortune 500 list.
This ranking of Fortune 100 companies was created with data gathered and crunched by Payscale.
John H. Hammergren gets paid 313 times more than the average McKesson employee.
The ratio for CEO pay to average employee pay at McKesson is 313:1 with a CEO annual compensation of $19,070,000 and median annual employee compensation of $61,000.
McKesson pays its employees 1 percent above market relative to companies in the same industry and 71 percent of its employees say they are highly satisfied.
In 2012, the company reported $1,202 million in profits and is ranked number 14 on the Fortune 100 list.
This ranking of Fortune 100 companies was created with data gathered and crunched by Payscale.
Larry J. Merlo gets paid 316 times more than the average CVS Caremark employee.
The ratio for CEO pay to average employee pay at CVS Caremark is 316:1 with a CEO annual compensation of $18,160,000 and median annual employee compensation of $25,800.
CVS Caremark pays its employees 3 percent below market relative to companies in the same industry and 60 percent of its employees say they are highly satisfied.
In 2012, the company reported $3,461 million in profits and is ranked number 18 on the Fortune 100 list.
This ranking of Fortune 100 companies was created with data gathered and crunched by Payscale.
See the rest of the story at Business Insider
When you’re running a small business—especially in the early stages—it’s easy to simply focus on how to stay afloat. The problem is, that mindset will keep your company mediocre at best and fighting for survival at worst.
In the first months of launching their real estate company Those Callaways, Joseph and JoAnn Callaway learned just how much real growth starts with client relationships. In that situation, they decided to forfeit a deal because it was the best choice for their client. Since then, their business brings in around $100 million in sales annually and reached $1 billion worth of resale in the first 10 years of business.
In their book Clients First: The Two Word Miracle, the Callaways discuss where most business owners go wrong when developing relationships—and how to fix the problems. Most employers are guilty of these bad habits without even being aware of it, and these habits can not only ruin relationships, but they can negatively affect business too.
1. Being too sure of yourself.
The Callaways say that when you have a healthy perspective of who you are, it will help you stand apart from your competitors, but when you’re too focused on recognition, you may veer off “onto a destructive path.”
“No client likes working with someone who has a patronizing attitude or constantly sings his own praises,” Joseph says. “Your job is not to be the most important person in the room or to put others down. Believe me, when you take care of your clients first and foremost, they will take care of you through their loyalty and appreciation.”
Instead, Joseph advises that you should always focus on your client. Don’t try to find a common interest just so you can bring the conversation back to yourself.
2. Thinking it’s just a job.
The only way you can honestly put a client first—time after time—is if you actually really do care about your job and what it means to society. If you have to, try to make a connection between what you do and how that affects the bigger picture.
“Whether you are a CEO or installing brake pads, you can learn to love what you do in that you feel pride in your work and strive to be better,” Joseph says. “Having any other attitude will only make you miserable and drive clients away.”
To fix a negative pattern of thinking, the Callaways say you should think of specific things you can do to ensure you’re always growing professionally. For example, look into seminars related to your field and continually network so you can meet and learn from people in your industry.
3. Telling “white lies,” which includes exaggerating.
If you’ve ever told your client you’re sick just so you can have a few more days to work on a project, then you’re guilty of not being entirely honest with someone who is paying you to be honest.
“When you cultivate a reputation for rock-solid honesty—for laying out all your cards even when it doesn’t benefit you, for telling the whole truth, for never holding back or sugarcoating—you’ll gain customer loyalty that money can’t buy,” Joseph says. “Clients will trust, respect and refer you, and your own life will become easier."
4. Being too professional.
Do you see your clients as business opportunities and sources of income, or do you see them as actual human beings with likes, preferences, quirks and stories? If you want to truly put your clients first, you need to think of them as more than sources of income. You should treat clients—and potential clients—as if they’re different from any other.
5. Thinking you’re always right.
The Callaways say that it’s easy to think you’re always right, especially if you’re the expert and the most qualified to make decisions. Although this may be true, it doesn’t mean that other opinions don’t matter.
“No matter what industry you’re in, you need to turn your viewpoint around and make a sincere effort to see yourself and your business as your client does,” Joseph says.
You can always ask the client what they think about your business, especially if the deal fell apart and they no longer conduct business with you. If you’re willing to accept this feedback and change your business model based on it, you can stop yourself from making the same mistake with the next client.
6. Being stingy with time and money.
Yes, your time is valuable, but the first sign that you’re trying to wrap up with a client quickly so you can get to the next one will probably be the last time you get that client’s business.
“I remember being very apprehensive about donating a large sum of money to build a Habitat for Humanity house as a Christmas gift for our clients,” Joseph says. “I thought I’d never see that money again. But in the years since, I’ve learned that new clients chose us—and even that a bank gave us all of their foreclosures to sell—because they had learned of that donation.”
That might not be the scenario for every case, but Joseph says it shows the time and money you use for something will eventually “come back to you with interest.”
7. Failing to express genuine gratitude.
If people don’t feel valued, they’ll likely take their business elsewhere, so it’s risky to take people for granted.
“JoAnn and I have realized that there are many ways to say ‘thank you’ to clients, and not all of them are verbal … you can show clients just how much you appreciate them by getting to know them personally, forgiving occasional bad behavior, and staying up-to-date in your field so you can give them the highest level of service,” Joseph says.
8. Doing everything yourself.
When you truly care about the success of your business—and about the well-being of your clients—it can be hard to let go of any aspect of your work. The thought of allowing someone else to take over any area of responsibility is extremely difficult, but necessary. In actuality, one of the most important aspects of running a successful business is understanding how to delegate responsibilities to others. Otherwise, what ends up happening is that “you become stretched too thin, feel overwhelmed and actually become less effective,” Joseph says.
Although it may be common to think about your business on a short-term basis, such as making enough money this month to pay the bills, the Callaways say that building the long-term relationship with clients is what will keep you in business and set you apart from your competitors.
“Most business owners are so concerned with paying the bills that we instinctively put ourselves first,” he explains. “It’s a behavior fueled by fear. But when you really put the customer first, and put your own needs second, a whole lot of other things naturally fall into place. Decisions will become easier, your business will flourish, and your relationships will be based on true transparency.”
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Technology and globalization has completely changed how we live and work, and employers are trying to figure out how best to run their companies. If people are happier and get most of their big ideas outside the office, how important is it to physically be present?
It depends on what kind of company you are, says Kay Sargent, vice-president of Teknion, a manufacturer of high-end office systems and furniture. Each company has to choose a culture and workspace that works best for its teams and inspires innovation.
In the future workplace, there are four models — Fixed, Motion, Mobile, and Distance. Teknion uses Pixar, Google, IBM and Skype as examples of these models in a PowerPoint presentation they've shared with us.
See the rest of the story at Business Insider
I recently had a conversation with a marketing veteran, who came complete with an elite school MBA in marketing. I asked what he considered to be the purpose of a current marketing campaign. His response was “brand awareness.”
I asked, “To what effect?” The answer was “to become a visible thought leader.” I continued to prod, asking why that mattered. The response to that question?
“I don’t know.”
Problematic Marketing Departments
This conversation illustrates the main problem with most marketing departments. In many organizations, marketing team members are the “smart” MBA types who are good at analysis via PowerPoints and Excels. The marketing team often does not understand that their goal is to drive sales via the route of brand-building and lead generation. They can’t connect the dots between data and increased sales.
At Context Media, we’ve done away with our marketing department. It now falls under our sales manager, who has direct insights in to the messages and the tactics that are producing results, and who knows how to continually tweak them to improve our marketing campaigns. Our sales department manages all our marketing functions, from trade shows to direct mail campaigns to relationship management programs.
Why Startups Benefit
This tactic is vital for startup success. In a startup, it’s important for every single employee to take ownership of marketing. Everyone must be able to define the message and communicate it clearly — whether this is the product development team, the sales team, or the customer service team. By having a separate marketing team, you create a role that doesn’t fit into the lean operations model. Marketing, as a function, is an understanding of the audience, a definition of a clear product value, and the communication of this in the most efficient ways — a function that should be owned by each employee of the company.
Founder-led companies with clear missions and defined, coherent product values have already covered a lot of textbook “marketing strategy.” A team that understands the purpose and value of its product to its customers should be empowered to continually study the market and be responsive to messaging and communication channels that have proven effective. Startups should also allow product and sales teams to communicate consistently and work collaboratively to build a feedback loop of understanding, while also iterating and improving.
How It’s Done
But I’m not saying it’s easy.
We had a shock phase in our company when we decided to wipe out the standalone marketing team. It required tangible skills and an intangible psychological training phase. The sales team had to understand the true meaning of marketing — and the fact that they had control over marketing decisions. Eventually, we identified the skills of each team member and determined who could own certain marketing responsibilities.
There was an important educational process in which we defined what marketing meant to us and how we expected each person to contribute to this. Simultaneously, we broke down the specifics of marketing in tangible goals, campaigns, and metrics for our sales manager to lead. It’s still an experiment, but we are happy with the early read on the disruptive change we made to our organizational structure. Empowering the sales team to experiment with messaging — and channels to deliver the messaging — has not only improved their pitch, but also helped execute high-ROI campaigns.
We had to backtrack, but if other companies start this way, they will be more efficient in producing actual sales, while also motivating every employee to truly love the product. Most marketing is grassroots, anyway. Why wouldn’t you have the people most excited about the company — your current employees — dream up your next marketing campaign?
Shradha Agarwal is the Chief Strategy Officer and Co-Founder of ContextMedia, a leading media technology company that educates and informs consumers as they make critical decisions about their health. Shradha was named to Crain’s Chicago Business 40 Under 40 list, and she was the Stevies’ 2012 Female Entrepreneur of the Year. You can connect with her on LinkedIn, Google + and Twitter.
Venture capitalist Mark Suster loves a good story of an entrepreneur driven by the desire to provide a great product.
Suster recently wrote a post describing his favorite entrepreneur story in a while. It's the tale of Sriracha hot sauce creator David Tran, who fled Vietnam in the 1970s when the North's communists took power.
Tran actually named his company, Huy Fong Foods, after the ship that took him from Vietnam to the U.S. He named the hot sauce after Si Racha, a small village in Thailand.
When Tran moved to Los Angeles to start his business, he hand-made batches of hot sauce in a bucket and drove it to customers in his van.
"But his goal wasn’t to make a billion dollars," Suster writes. "He wasn’t driven by quick riches. He was driven by wanting to provide a great product. How much could the new generation of entrepreneurs learn from that? I know it’s what I look for when I want to back companies."
Today, Huy Fong Foods does $60 million in annual sales. And what's especially notable is that he didn't get any outside funding and never sold out.
Here's what touched Suster, in his words:
Today's advice comes from Shark Tank's Daymond John on Entreprenuer.com:
"When I first got into business I made a lot of bad decisions. If I miss 10% to 20% of opportunities because they're a timely matter, then it is what it is."
John is a multimillionaire entrepreneur known for his clothing line FUBU and as one of the investors on the popular reality show "Shark Tank."
He says that when he makes a business decision, he doesn't want to look back and regret it later, therefore, he takes his time. Instead of making snap decisions, John says to "wait just a minute."
"It takes the same energy to think small as it does to think big. So dream big and think bigger."
Want your business advice featured in Instant MBA? Submit your tips to email@example.com. Be sure to include your name, your job title, and a photo of yourself in your email.
In recent years, some smaller cities have been able to compete with larger areas — such as New York City and San Francisco — as places for entrepreneurs to start new businesses.
In the South, Atlanta has quickly become an attractive place for entrepreneurs with its low cost of living, convenient transportation, available tech hubs, and diverse talent pool.
In fact, between 2000 and 2006, Atlanta's population grew by 20.5 percent, making it the fastest-growing urban area in the country.
This has given the city a diverse feel much like larger metro areas that attract talent from all over the world, says Gail Margolies Reid, a business consultant and author of the book "The Complete Idiot’s Guide To Low Cost Startups."
We spoke to Reid about the opportunities Atlanta offers entrepreneurs that have allowed it to quickly climb the ranks and become one of the top places for starting a company. Here's what she told us:
1. Low cost of living
This is an extremely important factor for new businesses that have limited financial resources and are in their early stages. Compared to larger metropolitan areas, Atlanta is a relatively inexpensive city, where you don't have to make as much money to experience a similar lifestyle as those living in larger cities.
And as more companies rely on technology to grow and expand their businesses, it's become less important where the business actually is, as long as you're able to access all of the resources you normally would if you were living in a bigger city.
"It's become so much cheaper to start a business, especially here," Reid tells us. "Atlanta has a lot of free classes for entrepreneurs and it's really easy to find people to help and advise you. There are a lot of opportunities for innovation here because Atlanta is still not as innovative as Chicago, New York or Los Angeles," so there's a lot of room of movement and growth.
2. Convenient transportation
The world's busiest airport — Hartsfield-Jackson International — is located in Atlanta, which means that business travel is easy and more affordable if you're already living near the city. You can meet with international clients and transport goods much more easily, in and out of the city.
Furthermore, MARTA — the city's bus and railway system — is the "key to attracting tech employees" in the area. David Dabbiere, CEO of Airwatch calls Atlanta's transportation system the "secret weapon" for his tech and security firm.
3. Tech hubs
Tony Riffel, the owner of coffee shop Octane in Atlanta, tells Tim Donnelly at Inc.com, that sometimes he feels more like "he's running a business incubator than a corner hang-out," because his customers frequently ask him for advice or suggestions for their businesses.
But Riffel isn't the only one that's been seeing this trend. In 2012, the Atlanta Tech Village opened its doors as a business that brings entrepreneurs together to exchange ideas, along with providing actual workspace for business owners to operate their daily tasks.
And the city isn't just a booming startup tech hub. Georgia hosts at least 13,000 technology companies — including AT&T Mobility, CNN and Damballa Inc. — employing 250,000 tech workers, according to Sam Williams, president of the Metro Atlanta Chamber.
4. Diverse talent pool
Atlanta is home to some of the most advanced universities in technology and bioscience degree programs, such as Georgia Tech, Emory University, and Georgia State University. In fact, Georgia Tech has one of the oldest business incubators in the country: the Advanced Technology Development Center, a startup accelerator that has helped launched more than 130 companies, according to its web site.
Many of the graduates of these top universities end up residing in the area and greatly contribute to Atlanta's business growth.
The city's growth and identity in recent years have made it one of the country's best places to start a new business, but aside from being a significant tech hub for entrepreneurs, Reid says that there is a Southern hospitality quality that isn't evident in larger cities. For example, businesses seriously "become a part of the community that they're in," meaning that if they run into financial hardship, the community will get involved to keep the business sustained.
"It's not unheard of for the community to have fundraisers for the business, bridging that line between just strictly doing business and reaching out to people."
"Not sure if that is just a Southern thing, though," Reid tells us.
Becoming a true leader requires an incredible amount of self-awareness. It involves knowing when to eliminate behaviors that are no longer working, even if they worked in the past. In his book "Tipping Sacred Cows," Jake Breeden warns that traditional managerial values, such as fairness, collaboration and balance, can sometimes be the “downfall of an otherwise promising career.”
“There is this conventional wisdom to do your best at work and produce excellent results,” Breeden tells us, “but some of these things can produce unintended consequences.”
He says that certain qualities are so highly regarded, they’re thought of as “sacred cows” and are revered in the workplace. But true leaders know when to break the rules, and in today’s complex business world, managers should take a close look at their own work habits.
1. Balance and Fairness
Leaders cannot expect to enter into win-win situations and not have to make sacrifices. Breeden argues that this is just an excuse not to have to make real, tough decisions. “Balance backfires when it moves from being about bold, sometimes tough, choices to being about bland compromises. If a leader, in striving for balance, is mediocre at everything, then balance has backfired.”
At some point, leaders will have to make decisions that won’t make everyone happy and aren’t considered fair or balanced by their employees.
“Fairness is the inverse of excellence,” Breeden says. “Leaders should ensure that there’s a fair process, but you also need to have the courage to treat people differently.”
Collaboration is a good thing, but it isn’t always the best strategy. To ensure collaboration doesn’t sabotage your project, Breeden advises:
“When leaders do collaborate, it must be accountable, not automatic. Accountable collaboration means everyone has a clear understanding of the mission of the team, and the goal of the team is to achieve its mission and disband. When collaboration is accountable, everyone knows everyone else’s responsibility, and they aren’t afraid to point out when the ball is dropped.”
And beware of the number-one excuse that prohibits a team from getting things done: Calling a meeting when it’s not needed just in the name of collaboration.
When you spend too much time producing perfect work instead of developing the solutions that you need to accomplish work immediately, you may very well lose out on the opportunity at the moment.
“Striving for excellence in the end is a good thing. However, this prohibits risk-taking,” Breeden says. Leaders shouldn’t obsess about every mistake or detail, because most of them won’t matter. “When excellence is worshiped, it becomes a goal in and of itself, disconnected from larger goals.”
“Sometimes the preparation and the work happen at nearly the same time, which can be both healthy and productive,” Breeden says. On the other hand, if you’re constantly “hunkering down” and “hiding out” because you’re preparing, you won’t be as on top of things in your industry as the ones who are just going along with the big idea everyone is talking about.
“In the workplace, preparation can backfire by causing you to fall in love with your work to the point that you defend what you should change,” Breeden says. “It backfires when your work becomes your baby. And sometimes, preparation is merely an excuse not to take action.”
In short, great leaders need to constantly examine different qualities depending on the situation—you can’t just follow the same rules for every situation.
“Powerful, often invisible behavioral, social and cultural forces can cause leaders to espouse the infallible importance of unexamined virtues in their ascent to success,” Breeden says. “One of the mightiest of these forces is the advice passed down from successful leaders, who attribute their success to such virtues.”
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"Idea" should really be a verb, because no idea is ever truly real until our inspiration has been turned into action.
No idea is ever a truly great idea until we actually do something with it.
I should know. I've had lots of ideas, but acted on very few.
Example: I graduated from college before the fitness boom. Combine aerobics classes and Easter egg spandex combinations and Schwarzenegger and Stallone and Jane Fonda and millions of people started to work out.
I saw an early Nautilus demo and thought, “Hey, there's a real opportunity here. I should open a gym.” I thought about it a lot, scouted locations, talked to manufacturers and lenders… but thinking and planning was all I ever did.
Thirty years later I still feel a twinge of regret whenever I see a Gold’s or Crunch or Planet Fitness.
The same is true with computers. I owned one of the first Kaypro II“portables.” I was hardly a programmer but I did know more about computers than many people... and when IBM-compatible computers started to hit the market I thought seriously about opening a retail store. (Remember this was well before online computer sales became a gleam in Michael Dell's eye.) One manufacturer was even willing to front most of the capital because they wanted to quickly establish storefront distribution channels.
While in retrospect the opportunity would have been relatively short-lived, for at least a decade that business might have thrived… if I had done more than just think about it, that is.
The list goes on. Years ago a friend recognized home healthcare was poised to take off and wanted us to go into business together. I thought about it a lot, helped refine his financials and flesh out his start-up plan… but I never pulled the trigger.
Today he has locations in 15 cities. The only connection I have with his business is that I will someday be a customer.
I can console myself by thinking that hindsight is always perfect and I had no way of knowing how those opportunities would turn out. But like most rationalizations, that's only partly true. Even then I thought those ideas were great.
Instead of acting, though, I let “idea” be a noun instead of a verb. Getting into fitness or computers or home healthcare weren’t really ideas.
Ideas without action aren't ideas. They’re regrets.
Every day would-be entrepreneurs let hesitation stop them from acting on an idea for a product or service or business. Every day people who want to try a different career let uncertainty stop them from trying to live their dreams. Fear of the unknown and fear of failure are what stopped me and may be what stops you, too.
Think about a few of the ideas you've had. How many of those ideas could have turned out great, especially if you had given your absolute best? A decent percentage?
That's why we all need to trust our analysis, our judgment, and even our instincts a little more. We certainly won’t get it right all the time... but if we let “idea” stay a noun, we always get it wrong.
May 8, 2013
The worldwide movement to tax, confiscate, and regulate everything imaginable turned a new page earlier this week when the “Marketplace Fairness Act” passed in the US Senate.
The bill still needs to clear the House of Representatives. But its fundamental purpose, enforcing state sales tax for online transactions, is almost guaranteed.
Even if they don’t manage to successfully push the bill through this time, they’ll just re-propose a new version of it in a few months’ time until it finally passes and destroys the digital economy.
First, there’s the obvious consequence of the end-user consumers having to give governments more of their hard earned savings to pay for bombs, drones, and body scanners.
Additionally, though, the law would bury -any- business that has an online presence with an enormity of paperwork and tax filings.
Consider the prospect for a budding entrepreneur in the Land of the Free– start a business and go blind on tax reporting to dozens of states, then pay through the nose for Obamacare. Sounds like a great deal, right?
They might as well send greeting cards to productive citizens saying “Please leave the country, thank you.” And they should. Because this is a perfect example of how diversifying internationally can work for you.
Fact is, this law would not apply to foreign companies who do business online and sell to US-based consumers.
Simply as a matter of practicality, it’s not possible to get every business in every jurisdiction in the world to marshall the appropriate resources behind complying with such an absurd requirement. How do you get an e-tailor in India or Bhutan to track, report, and pay sales tax on a customer in Kansas?
More importantly, though, there is a vast network of international treaties– Double Taxation Agreements, Free Trade Agreements, etc.– protecting foreign companies from such tax.
As an example, the US-Singapore Free Trade agreement has an entire section devoted exclusively to e-commerce. So even from a legal standpoint, a US-based tax would not apply.
The solution is clear. Folks who are primarily doing business online, or thinking about doing business online, ought to seriously consider getting professional advice to move the business overseas.
Here in Singapore, you can register a new business, inclusive of secretarial and resident director services, for about $3,000 USD.
It’s well worth it. The banking system here is modern and well-capitalized. And the support services for an online business ranging from web hosting to credit card processing are excellent.
Moreover, Singapore’s tax system is one of the most competitive in the world. Right now, for example, a $100,000 net income in 2013 would end up with an effective corporate tax rate of just 1.2%. A $1 million net income would result in an 11.88% effective tax rate.
If that’s too expensive, the Marshall Islands has a zero percent tax rate and lower corporate registration costs (<< $1,000 total). Yet it’s still possible to access Singapore’s excellent digital and financial infrastructure with a Marshall Islands company.
Online companies are by far one of the best ways to take advantage of international diversification. You can set the company up in one place, bank in another, process credit card transactions in another, host your web site in another, outsource employees to another, etc… all in the specific jurisdictions which make the MOST sense for your business.
It’s completely 100% legitimate. And in doing so, you might just dodge a bureaucratic land mine.
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"What can I get for you?" the old man asked when I walked in the store. The expression on his face was expectant and hopeful, almost uncomfortably so.
I was on my bike, two mountains into West Virginia on a long ride. "Just a couple bottles of water," I said. His shoulders sagged, disappointment obvious, and I noticed the chalkboard menu behind him.
"And one of your sandwiches," I added quickly.
He asked what kind. I told him to make me his favorite.
I pulled an old metal chair up to a scarred wooden table to wait. The next mountain I would climb dominated the view out the window. I'll see all I want of that soon enough, I thought, so I turned to look around.
I saw a small, owner-operated country store. You know the type: For years a hub of the community, now pushed aside by convenience chains. The shelves were filled with items -- fishing lures, diapers, auto parts, books, movies, homemade crafts -- once essential but now gathering dust as relics of a world much less flat.
My head was turned away and I didn't notice he had shuffled over. "Oh. I'm sorry," I said, half standing. "You didn't have to bring my food to me."
"That's all right," he said. "Sit down and relax." He paused and tilted his head towards the plastic tray in his hands. "I made one for myself. If you don't mind I'll sit and eat with you."
“Absolutely,” I said. He pulled out a chair and joints creaked as he eased down.
I took a bite of my sandwich. "This is really good," I said. He smiled.
Then he started asking questions. Where was I from? Where I was going? How long did it take to get used to people seeing me in that skin-tight getup?
As we talked he took small bites of his sandwich. I could tell he wanted the conversation to last.
I asked about his store. He said he had opened it almost 40 years ago, back when folks only made the trip to "town" (Franklin WV, population 720) every month or so. He had tried to stock a little of everything. In time he learned which items different families needed and tried to carry those, too.
"Now I don't know what to do," he said. "Most of my old customers moved on or passed on. I try to keep up but nothing much seems to work.
"I don't know. Maybe this is a young man's game." He sighed and leaned back in his chair.
"I just don't know," he said, almost to himself.
I tried to think of something to say. I could talk about meeting an unfilled need or finding a niche or differentiation through service, but whatever I said would be a platitude... and platitudes only tend to insult insult those who have already given everything.
Sometimes there isn't anything to say.
So we sat in silence as he looked out the window, his eyes fixed on something only he could see.
Eventually he shook his head, we talked some more, and a little while later I left.
As I rode away I thought about how business can be a metaphor for life. At a surface level business is cut and dried: You make money or lose money, build a customer base or lose a customer base, launch a new product or watch it fall flat.
You care about the surface level because it's important, but under the surface is where the true importance lies. Under the surface are the connections, the relationships, the friendships, and the times you don't just serve a market but get to make a real difference in another person's life.
For him, that was the mother who had counted on him to stock her baby's favorite formula. That was the father who had occasionally found time to take his boys fishing and counted on him having bait. That was the carload of boys who stopped in for sodas and snacks and a movie to take home on a Friday night because that was how they spent their small town Friday nights.
He and his store had meant something, however minor, to people.
Now it didn't. Now he didn't.
I'd like to say I found a way to help turn his store around, but life doesn't work that way. (I did ask a friend who holds an annual cross-country motorcycle charity ride to route through that part of West Virginia and stop for lunch. Later he said the old man was overwhelmed by the crowd but also seemed happy, especially when he was asked to join in a group photo.)
When I rode by a year later the store was closed.
I unclipped and stood in the dusty parking lot. Nothing moved but a few loose shingles flapping in the wind. No ads in the windows, no sign above the door, nothing to memorialize a lifetime of work.
One of the things I do is write for Inc.com, and every time I write an article I try to think about him. While I sometimes write about startups and technology and fairly esoteric business strategies, at a deeper level I try to help people like him, people with goals and hopes and dreams and a sincere desire to build a better life for themselves, their families, and the customers they serve.
Do I make a huge difference? Of course not. I’m not that egotistical and while stupid, I'm not that stupid. But I do hope to make an occasional impact, however, and possibly provide a tiny bit of encouragement or inspiration or motivation.
That memory of the flicker of desperation in a struggling entrepreneur's eyes inspires me to try to give others in the same position a few tools that might go some small way towards helping them achieve their dreams.
And barring that, I try to provide a little spark of hope, because the most valuable thing we can give, no matter how faint or fleeting, is the gift of hope.
Despite objections by businesses to parts of the Affordable Care Act, there could be as many as 33% more new small businesses over the next few years as a result of the law, reports the WSJ. The Kauffman-RAND Institute for Entrepreneurship Public Policy calculated the estimate.
Why the projected increase?
A major barrier that keeps people, especially those with pre-existing conditions, from starting their own business is the ability to get robust and affordable health insurance. People seek out and keep corporate jobs, not because they want to, but because they feel like they have to. Entrepreneurs call the phenomenon "entrepreneurship lock."
The Affordable Care Act could potentially solve that by offering people who start businesses coverage through state- or federally-run marketplaces for insurance (exchanges).
But that's a big if. Many details of the law's implementation have yet to be worked out.
It won't be fully active for some time yet, and the consequences and price of coverage won't be settled for even longer. Premiums may even go up for young, healthy people.
To see that full 33% increase in new businesses, coverage from exchanges would have to be equivalent to that from corporate plans, which is unlikely in the short run.
For young people, the idea of being unable to pay for massive medical bills seems distant and unlikely. But many older people have seen it in others or experienced it themselves, or have dependents that they have to worry about.
Without a significant savings cushion, a luxury many people don't have, leaving a safe corporate job with benefits just doesn't seem like an option.
Great business ideas aren't limited to the affluent or the young, and though it might take a while to play out, this looks like an unsung benefit of the new health care legislation.
I remember all of my bosses. Some were bad. Most were good.
But only one was truly memorable--in the best possible way.
Memorable bosses possess qualities that may not always show up on paper but do always show up where it matters most: in the hearts and minds of the people they lead.
Here are eight qualities of truly memorable bosses:
They believe the unbelievable.
Most people try to achieve the achievable; that’s why most goals and targets are incremental rather than inconceivable.
Memorable bosses expect more--from themselves and from others. Then they show you how to get there. And they bring you along for what turns out to be an unbelievable ride.
They see opportunity in instability and uncertainty.
Unexpected problems, unforeseen roadblocks, major crises... most bosses take down the sails, batten the hatches, and hope to wait out the storm.
A few see a crisis as an opportunity. They know it’s extremely difficult to make major changes, even necessary ones, when things are going relatively smoothly.
They know reorganizing an entire sales team is accepted more easily when a major customer goes under. They know creating new sales channels is a lot easier when a major competitor enters the market. They know reorganizing manufacturing operations is a lot easier when the flow of supplies and components gets disrupted.
Memorable bosses see instability and uncertainty not as a barrier but as an enabler. They reorganize, reshape, and re-engineer to reassure, motivate, and inspire--and in the process make the organization much stronger.
They wear their emotions on their sleeves.
Good bosses are professional.
Memorable bosses are highly professional and yet also openly human. They show sincere excitement when things go well. They show sincere appreciation for hard work and extra effort. They show sincere disappointment--not in others, but in themselves. They celebrate, they empathize, they worry.
In short, they’re people. And, unlike many bosses, they act as if they know it.
Professional is admirable. Professional--with a healthy blend of humanity--is inspiring.
They protect others from the bus.
Terrible bosses throw employees under the bus.
Good bosses never throw employees under the bus.
Memorable bosses see the bus coming and pull their employees out of the way often without the employee knowing until much, much later (if ever--because memorable bosses never seek to take credit).
They’ve been there, done that, and still do that.
Dues aren't paid, past tense. Dues get paid each and every day. The only real measure of value is the tangible contribution a person makes on a daily basis.
That’s why no matter what they’ve accomplished in the past, memorable bosses are never too good to roll up their sleeves, get dirty, and do the “grunt” work. No job is ever too menial, no task ever too unskilled or boring.
Memorable bosses never feel entitled, which means no one feels entitled--except to the fruits of their labor.
They lead by permission, not authority.
Every boss has a title. That title gives them the right to direct others, to make decisions, to organize and instruct and discipline.
Memorable bosses lead because their employees want them to lead. They’re motivated and inspired by the person, not the title.
Through their words and actions they cause employees feel they work with, not for, a boss. Many bosses don’t even recognize there’s a difference, but memorable bosses do.
They embrace a larger purpose.
A good boss works to achieve company goals.
A memorable boss also works to achieve company goals--and achieves more than other bosses--but also works to serve a larger purpose: to advance the careers of employees, to make a real difference in the community, to rescue struggling employees, to instill a sense of pride and self-worth in others. They aren’t just remembered for nuts and bolts achievements but for helping others on a more personal or individual level.
Memorable bosses embrace a larger purpose because they know business truly is personal.
They take real risks, not fake risks.
Many bosses--like many people--try to stand out in some superficial way. Maybe it’s their clothes, or their interests, or their public displays of support for popular initiatives. They do stand out, but for reasons of sizzle, not steak.
Memorable bosses stand out because they’re willing to take an unpopular stand, to take an unpopular step, to accept the discomfort of not following the status quo, to take the risk of sailing uncharted waters.
They take real risks not for the sake of risk but for the sake of the reward they believe is possible. And by their example they inspire others to take a risk in order to achieve what they believe is possible.
Memorable bosses inspire others to achieve their dreams: by words, by actions, and most importantly, by example.
Today's advice comes from Brooke Denihan Barrett, co-chief executive of Denihan Hospitality Group, via The New York Times:
"You have to set certain standards that you want people to live up to. And if people need help, then we want to help them along the way. Sometimes organizations can fall down if they don’t also ask: How do you give people the tools they need to be successful? How do you get that person to understand what change needs to happen, and how do you help them along the way? Because people can’t always figure it out on their own, and nor should you expect them to."
Barrett says that part of building a strong culture is actively listening to better understand those who work for you. Aside from this, you need to pay attention to the way different people interact within your organization and keep an eye out for certain body language signs, because several times, someone may be saying one thing, but meaning another.
"I realized that you get a lot more with the carrot routine than the stick routine. I also realized that you really needed to explain the 'why' of things. You need to give people a little bit of space to come around, and say, 'Yeah, that makes sense,' before you really engage them in what needed to be done."
A treasure, hidden for centuries, awaits the lucky retriever. Three brothers each go on a quest for the treasure with the opportunity to claim it as his own.
The two older brothers fail; the youngest submits to a series of trials in which he demonstrates various characteristics of leadership, and succeeds in the quest.
Erika Andersen, leadership coach and author of "Leading So People Will Follow," would read bedtime stories like this to her children, and it was then that she began to notice a pattern. In every story like this one, there was a pattern in the characteristics demonstrated by the protagonist that made him, or her, a natural leader.
Andersen deciphered this age old pattern and now applies it to her writing and her practice as a leadership coach. Levo had the privilege of learning the characteristics from Andersen, so that we can all find out what makes others want to follow:
Andersen says that a leader is someone who can articulate a compelling and complete view of the future. Someone who can say, “Here’s where I think we should go,” but not in a my-way-or-the-highway kind of way — in an inclusive way that says we can do it together.
Passion doesn’t necessarily indicate being loud or charismatic about something, says Andersen; it indicates depth. People are eager to follow a leader who is deeply committed to the quest—or, in business, to the good of the enterprise. Good leaders don’t get “shiny-object-itis,” says Andersen. Good leaders are those who will follow through.
A good leader is someone who can make tough decisions. Leaders will make decisions that make them personally uncomfortable, if it’s for the good of the enterprise. It’s a rare trait to have, as historically people tend to avoid discomfort, but a leader will do it if it helps the greater good. To a leader, the business is more important than personal comfort.
Leaders have the ability to think deeply, Andersen says. They see patterns in the enterprise and share them with their colleagues, which allows them together to make the moral choice. Speed in action is often commended, but thinking deeply about important topics and making decisions that aren’t spur-of-the-moment, and are taken seriously, is more commendable, especially in a leader.
Generosity in leaders isn’t primarily about materials goods, says Andersen, as leaders do also have to be frugal when it comes to the business. But that’s not to say one can’t be generous in spirit, with praise, hope, faith, information, responsibility, and power. When leaders believe in us and support our success, that’s the best kind of generosity.
Historically, leaders were elected to protect a group—be it a family, a kingdom, or a business. When you don’t trust a leader to protect the group, you feel like you have to protect yourself; and when a group is self-protected, it’s hard to interact freely. When it comes to making a leader, none of the other traits can exist without the rest, but trust is foundational. When we trust leaders, we trust their character and their competence. Someone capable of leading and capable of being competent to do the job gives us faith in them.
A salary is Fixed Income
Earning a salary, working for someone else, is earning ‘fixed income,’ which means you hope it comes close to covering your lifestyle expenses. Like all fixed income, however, it will be limited. In the case of your salary, the limitation of your fixed income comes not from prevailing interest rates, but rather from the environment and decisions of people you work for.
Did your company do well this year? Did your boss decide you are one of her key employees? Does your company expect to still need your labor and time in another year, or three?
If you can say yes to all three, then you can continue to earn your fixed income, otherwise known as a salary. You cannot reasonably expect, however, anything above the minimum that your boss and company guesstimate will be enough to keep you around for as long as they need you.
Business ownership is Equity
Owning and building a business feels completely different.
Owning and building a business is earning ‘equity.’
Equity typically pays less in dividends than does fixed income. It also pays less often.
Worse, equity has a nasty habit of losing value periodically. Equity regularly goes to zero in value, which, if it’s your company, means you lost your investment and your business and your income all at the same time.
It’s also potentially more costly emotionally to lose your business equity than to lose the fixed income of your salary. Despite this terrible feeling – I’m speaking from experience here — here’s the surprising part of my strongly held belief:
Everyone in the for-profit world should aspire to build and run his or her own business.
On entrepreneurship vs. working for a salary, my own journey
During most of my college years I did not imagine a life in business, working for profit. Truth be told, I dismissed working for profit, in my self-righteous college-kid way, as unworthy of serious consideration.
After a few years of actually working for a living, however, I realized I enjoyed it much more than I had imagined I would. It felt ‘real’ in a way that pure academia did not. The teamwork involved in the companies I worked for, producing a service for which customers happily paid significant sums, seemed ‘real’ as well, in a way that was new and surprising to me.
Once I decided making money was one of my goals, the next decision about working for a living became whether to work for myself or to work for someone else.
Although I enjoyed working in the for-profit world, I got it into my head that I would rather own my own business rather than work for a salary for someone else.
Please see next post on Entrepreneurship Part II – Ownership vs. Salary: lessons from finance
And Entrepreneurship Part III – More differences between ownership and salary: Air, Taxes, Retirement
 Of course I know of bosses who pay above the minimum amount to keep you around. But these bosses are relatively rare and therefore remarkable. Also, they are violating a rule of market efficiency by paying you more than is necessary to retain you. If they persist in paying you more than necessary, another competitor can pay its employees less and undercut your employer. Which is what makes overpaying for you unsustainable, in the long run. You cannot expect it to last.
This is a continuation of a theme started earlier, in this post On Entrepreneurship, Part I
Founding an investment firm
A friend from college once explained to me that, growing up, he didn’t realize his family was wealthy. His dad worked at an investment firm, and they had a comfortable lifestyle, but my friend noted no major extravagances about their life.
One day his father told him that he had in fact founded the investment company where he worked, and that while the salary he’d drawn for the past thirty years had made them comfortable, their family’s real net worth, as he approached retirement, was something much more significant.
The key, his dad explained, was that unlike other dads who worked for a salary and then retired after a few decades, he had, by contrast, built up something very valuable at the end – his equity in the firm he founded. He sold the majority of his investment business to a European bank for a considerable sum, which overwhelmed the regular salary he’d drawn over the years. Being an owner made all the difference.
Suddenly my friend realized his family was more than just comfortable, it was inter-generationally wealthy.
The Goldman IPO
In my own life, I joined Goldman Sachs shortly before the firm went public via an IPO. This event made hardly any difference to my career or net worth. As an analyst with very little service to the firm at the time, I hardly rated any notable equity gift.
For people with longer service at the firm, however the lesson of the IPO – in particular the difference between fixed income and equity – couldn’t have been any starker.
Managing Directors, the penultimate ‘rank’ at the firm, could expect a low seven-figure payout through the IPO award of stock and stock options. That was nice, and I’d be the last one to ever feel bad for a Managing Director at Goldman.
Partners, the highest rank at Goldman, owned the firm before the IPO. I estimate Partners generally received a payout 30 times higher than Managing Directors at the IPO. Amazing to me.
The Managing Director IPO amount was cool and comfortable, but probably didn’t change everything about the person’s life. The 30-times-higher partner payout, represented blow-your-doors-off-never-work-again type money. All because the partners owned equity, and the MD’s didn’t.
Managing Directors and Partners did the same jobs, worked themselves to the bone the same way, dedicated their every waking breath to advancing the firm, and had distinguished themselves at the top of the financial pyramid. Usually the biggest difference between an MD today and Partner tomorrow was time – the Partners had typically joined the firm a couple of years earlier.
Although the Goldman IPO represented the extreme example of salary vs. ownership in my own life, I have come to think that that ratio holds true elsewhere as well.
My best guess is that the difference between fixed income and equity, when it comes to getting rewarded financially after a lifetime of building equity, is about 30 times higher.
You know those charts showing the difference between fixed income and equity returns over the long run? I’m talking about charts where the returns from fixed income assets show a modest, steady rise due to moderate compounding effects, while the equity chart shows a rocky, but ultimately asymptotic upward turn?
Those charts show the difference in investment returns from bonds vs. stocks. And also the returns from working for a salary vs. owning and building a successful business.
I’m not insisting you be profit-oriented. But if you are profit-oriented, you need to figure out a way to own your own business. For the same amount of work, the financial payout is 30 times higher at the end of your career.
Caveats, qualifiers, clarifications on the for-profit life vs. other choices
Not everyone wants to work for profit, and I think that’s just fine. Great even.
Many people prefer to create beauty in the world, or to contribute to better understanding in human relationships, or to encourage the care and feeding of the soul.
Others seek to push the envelope on human knowledge, or to sculpt young minds, or to comfort the grieved or heal the stricken.
Others, perhaps a majority of the human race, just want to take in enough money on a weekly basis to allow some leisure time for beer, ice cream, and football.
I applaud you if you seek any of these things.
All of these goals, in their own way, are as valid, or more valid, than maximizing your pile of money.
So when I write about the advantages of entrepreneurship for maximizing personal profits, I’m addressing the profit-oriented person right now.
If you do plan to work on increasing your personal pile of money, you cannot afford to work for a salary, for someone else, on a fixed income. You need to start building equity, like, right now.
See previous post on Entrepreneurship Part I – Equity is Ownership, Fixed income is Salary
After nine long years, The Office came to a close last night (sad!). And while there are plenty of things we’ll miss—Jim and Dwight’s pranks, Kevin’s one-liners, and all the Andy drama—no one will ever replace the man who started it all.
So, in honor of the show’s finale, we decided to review the management stylings of Michael Scott and share a few nuggets of workplace wisdom we’ve gained from him over the years.
Sit back, relax, and learn from the World’s Best Boss.
1. After sitting at your desk all day, sometimes you just need to move.
Source: What Should BC Call Us
2. Bring snacks, and you’ll instantly make friends at the office.
Source: Daily Dose of Memo
3. Keep meetings engaging by adding a little variety.
4. Stick to your guns.
5. Inspire your employees with motivational quotes.
6. Make time for team bonding.
Source: Little Moments
7. Celebrate even the little wins.