Ae5yw45ye45yy45entrepreneur usa november 2015 by fooperastiz

WILL.I.AM Inside the creative mind of the rapper, innovator, inventor, artist and entrepreneur (Oh … he’s taking on Silicon Valley, btw)

NOVEMBER 2015 | ENTREPRENEUR.COM

Make Your Mark

SILVER OAK

How the legendary winery blends tradition & technology

HOW TO SAVE $250,000 FAKING IT

The delicate art of smiling through any situation

THE E360 PERFORMANCE INDEX

What type of company do you REALLY have?

THE ALL-NEW METRIS

GIVES YOUR BUSINESS ENDLESS POSSABILITIES. Starting at only $28,950.*

Introducing Metris—the new mid-size commercial van from Mercedes-Benz. The spacious cargo model offers 186 cubic feet of storage space and an impressive 2,502-lb payload, while the passenger model seats up to eight people. Both are equipped with advanced safety features like ATTENTION ASSIST®1 and Crosswind Assist2 for industry-leading protectability. From customizeability to garageability to affordability, Metris gives your business endless possabilities. Visit MBVans.com

©2015 Mercedes-Benz USA, LLC. *Excludes all options, taxes, title, registration, transportation charge, and dealer prep fee. 1 Driving while drowsy or distracted is dangerous and must be avoided. ATTENTION ASSIST exceeding 50 mph. Performance is limited by wind severity and available traction, which snow, ice, and other conditions can affect. Always drive carefully, consistent with conditions.

may be insuffcient to alert a fatigued or distracted driver and cannot be relied on to avoid an accident or serious injury. 2 Crosswind Assist engages automatically when sensing dangerous wind gusts at highway speeds

Where there’s business there’s EPSON. Epson’s innovative solutions are helping millions of businesses exceed their vision in more ways than you’ve imagined. Like robots that improve quality in factories worldwide. Industrial dye sublimation printers that marry fashion and technology. Mobile POS solutions for exceptional customer service. Digital projectors that enhance communication. And high performance printers that help businesses run at full speed. See all the ways that Epson helps businesses succeed, at epson.com/forbusiness

EPSON Business Solutions

ROBOTICS

DIGITAL TEXTILE

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POINT OF SALE

PROJECTORS

PRINTERS

Culture 15

Fake it ’til you make it: The award for best office actor goes to …

Investments in agriculture and food ventures are heating up.

How can I optimize my affiliation with a business association?

Just do it. Tips for maintaining an exercise routine while on the road.

A private-aviation training agency takes service to new heights.

Social studies: How new rules helped an old company achieve record growth.

Is there ever a place for gender bias in business?

We found products for the workplace that will appeal to all five senses—and just might boost productivity.

Editor’s Note Welcome to the new Entrepreneur.

Feedback Letters from our readers.

Ask a Pro

Business Unusual

The Ethics Coach

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ENTREPRENEUR 11/15

Food

Travel

Marketing

Design

Tools 71

LG’s svelte HD projector lets everyone see the big picture.

Wait, don’t go: An e-tailer converts site visitors into customers.

How often do I need to update my website?

Shiny Object

The Fix

Service With a Signal Creative uses for beacon technology.

The Meaning of It All Evrythng makes sense of the Internet of Things.

Ask a Geek

CLOCKWISE FROM TOP: PHOTOGRAPH BY JAMIE KRIPKE; PHOTOGRAPH COURTESY OF EPMG; LINE DRAWING BY DANIEL ZALKUS

Esquire Guy

Only a tailored e-commerce solution could fit Oak Hall. Since 1859, famed Memphis clothier Oak Hall has been known for its impeccable southern style and service. Now, thanks to integrated e-commerce solutions from FedEx, Oak Hall can deliver their unique customer experience online. See how you can have tailored e-commerce solutions woven into the fabric of your brand. Go to fedex.com/smallbusiness. #SolutionsThatMatter

102

Money 79

You want what? Pros and cons of royalty deals.

How to get grants and investments from angels in your hometown.

Ask the Money Guy

Your Money When it comes to your personal finances, think like a CFO.

Startup Finance

140

Back Page

Start Up

VCs hear it all—but the bad ideas can be as worthwhile as the good ones.

A resourceful inventor brings a gaggle of gadgets to life.

VC Viewpoint

Don’t wait for permission to indulge your entrepreneurial spirit. Just start.

Wacky Idea

Franchise

Who’s Got VC?

102

Personal endorsements power a consumer lending network.

An office-supply e-tailer focuses on service—and fun.

On-the-job training sets a young tutor’s career in motion.

Franchisor

Franchisee

Q&A

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ENTREPRENEUR 11/15

CLOCKWISE FROM TOP: PHOTOGRAPH BY DANIEL HENNESSY; ILLUSTRATION BY JAMES VICTORE; PHOTOGRAPH BY MATTHEW REAMER; PHOTOGRAPH COURTESY OF INVENTIST

Small businesses can—and should— target consumers closest to home.

EDITOR IN CHIEF/VP

Amy C. Cosper

EXECUTIVE EDITOR

Carolyn Horwitz

CREATIVE DIRECTOR AT LARGE

EDITORIAL

MANAGING EDITOR Shayna Sobol SENIOR WRITER Jason Ankeny SPECIAL PROJECTS EDITOR Tracy Stapp Herold

CONTRIBUTING EDITORS

Grant Davis, Margaret Littman, Jenna Schnuer ART & DESIGN

INTERIM CREATIVE DIRECTOR Evelyn Good CONTRIBUTING CREATIVE DIRECTOR Chad McCabe DESIGN DIRECTOR Richard R. Olson PRODUCTION MANAGER Monica Im CONTRIBUTING ART DIRECTOR Nancy Roy CONTRIBUTING PHOTO DIRECTOR Samantha Cassidy

CONTRIBUTING WRITERS Paula Andruss, Mikal E. Belicove, Jonathan Blum, Lana Bortolot, Corie Brown, Jason Daley, Michael Frank, David Freedman, Andrew Gibbs, Elaine Glusac, Michelle Goodman, Ann Handley, Christopher Hann, Sam Hogg, Jeff Kauflin, Ross McCammon, Gael O’Brien, John Patrick Pullen, Brittany Shoot, Matt Villano, Steph Wagner, Joe Worth ENTREPRENEUR.COM VP, DIGITAL David Pomije EDITORIAL DIRECTOR Raymond Hennessey MANAGING EDITOR Lauren Covello ARTICLES EDITOR Andrea Huspeni SPECIAL PROJECTS DIRECTOR Linda Lacina CONTRIBUTORS EDITOR Stephen Bronner SOCIAL MEDIA EDITOR Wendy Frink DATA AND LISTS EDITOR Tanya Benedicto Klich RESEARCH EDITOR Carolyn Sun SENIOR WRITERS Catherine Clifford, Kim Lachance Shandrow ASSOCIATE EDITORS Joan Oleck, Peter Page STAFF WRITERS Laura Entis, Katherine Taylor, Geoff Weiss, Nina Zipkin EDITORIAL ASSISTANT Carly Okyle VIDEO PRODUCER Kian VIDEO EDITORS Alice Guilhamon, Anna Teregulova IT MANAGER David Bozanic AD OPERATIONS DIRECTOR Michael Frazier TRAFFIC COORDINATOR Jose Paolo Dy ONLINE AD TRAFFICKER Michelle Rosol DIRECTOR, SITE OPERATIONS Jake Hudson DESIGN DIRECTOR Austin Allsbrook DIGITAL MEDIA DESIGNERS Kevin Chapman, Monica Dipres, Nicole Leach SENIOR ENGINEER Daniel Sibitzky ENGINEERS Angel Cool, Brandon Davis, Jaime Parra FRONTEND ENGINEER Nicholas Jennes SEO MANAGER Thomas Tan ENTREPRENEUR PRESS

ACQUISITIONS AND MARKETING DIRECTOR Jennifer Dorsey MARKETING AND PRODUCTION MANAGER Vanessa Campos

Brandon Kavulla

BUSINESS

PRESIDENT/COO Ryan Shea PUBLISHER Justin Koenigsberger ASSOCIATE PUBLISHER/MARKETING INTEGRATED MARKETING MANAGER

MARKETING

CHIEF INSIGHTS OFFICER, MARKETING AND RESEARCH Lisa Murray VP, MARKETING COMMUNICATIONS Jillian McTigue COMMUNITY MARKETING MANAGER Rocky Vy MARKETING AND EVENTS MANAGER Gildardo Jimenez MARKETING MANAGER Nicole Jurinek DIGITAL MARKETING MANAGER Nicole Jurinek COMMUNITY MARKETING COORDINATOR Ralph Li CREATIVE SERVICES ART DIRECTOR Jeff Meston GRAPHIC DESIGNER Christian Zamorano

ENTREPRENEUR MEDIA NATIONAL ADVERTISING SALES OFFICES NEW YORK CITY (212) 563-8080 REGIONAL SALES MANAGERS James Clauss, Randy Mills EASTERN ONLINE SALES MANAGER Brian Speranzini SOUTHEAST DIGITAL SALES EXECUTIVE Patrick Notaro OFFICE MANAGER/EXECUTIVE ASSISTANT TO THE PUBLISHER Elvira Perez CHICAGO (312) 923-0818 MIDWEST DIRECTOR OF ONLINE SALES Keith Bainbridge DETROIT (248) 644-2786 MIDWEST ADVERTISING DIRECTOR Lori K. Flynn ATLANTA (770) 209-9858 SOUTHERN ADVERTISING DIRECTOR Kelly Hediger SAN FRANCISCO (415) 433-0441 MANAGING DIRECTOR, WESTERN SALES GROUP Kris Kilfoil NORTHWEST INTEGRATED SALES MANAGER Leilani Provost IRVINE (949) 622-7169 LOS ANGELES ADVERTISING DIRECTOR Eric Rucker SOUTHWEST ONLINE SALES MANAGER Jeffrey Rinna

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(949) 261-2325, fax: (949) 752-1180 CLASSIFIED ADVERTISING RPI Classifieds (727) 507-7505, fax: (727) 507-7506 PRODUCTS AND SERVICES ADVERTISING Direct Action Media, Tom Emerson (800) 938-4660 ADVERTISING PRODUCTION MANAGER Mona Rifkin ONLINE ADVERTISING COORDINATOR Monica Santana EXECUTIVE STAFF CHAIRMAN Peter J. Shea

SENIOR VP, OPERATIONS Mike Ludlum SENIOR VP/CFO Joseph Goodman CORPORATE COUNSEL Ronald L. Young VP, INNOVATION Bill Shaw DIRECTOR, INNOVATION Deepa Shah VP, BUSINESS DEVELOPMENT Charles Muselli STAFF ACCOUNTANT Jane Otsubo ACCOUNTS RECEIVABLE MANAGER Lynn Van Winkle LEGAL ASSISTANT Rick Ignarra OFFICE MANAGER Yvette Madrid FACILITY ADMINISTRATOR Rudy Gusyen

Vol. 43, No. 11. Entrepreneur (ISSN 0163-3341) is published monthly by Entrepreneur Media Inc., 18061 Fitch, Irvine, CA 92614. Periodical postage paid at Irvine, CA, and at additional mailing offices. POSTMASTER: Send address changes to Entrepreneur, P.O. Box 6136, Harlan, IA, 51593-1636. One year subscription rates in U.S.: $19.97; in Canada: $39.97; all other countries: $39.97; payable in U.S. funds only. For customer service go to entrepreneur.com/customerservice or mail subscription orders and changes to Entrepreneur, Subscription Department, P.O. Box 6136, Harlan, IA, 51593-1636. For change of address, please give both old and new addresses and include most recent mailing label. Entrepreneur considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; consequently, readers using this information do so at their own risk. Each business opportunity and/or investment inherently contains certain risks, and it is suggested that the prospective investors consult their attorneys and/or financial professionals. Entrepreneur is sold with the understanding that the publisher is not rendering legal services or financial advice. Although persons and companies mentioned herein are believed to be reputable, neither Entrepreneur Media Inc., nor any of its employees accept any responsibility whatsoever for their activities. Advertising Sales (949) 261-2325. Entrepreneur is printed in the USA and all rights are reserved. ©2015 by Entrepreneur Media Inc. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher. Unsolicited manuscripts and photographs will be returned only if accompanied by a stamped, self-addressed envelope. All letters sent to Entrepreneur will be treated as unconditionally assigned for publication, copyright purposes and use in any publication or brochure, and are subject to Entrepreneur’s unrestricted right to edit and comment.

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THIS PICK NEARLY SHUT DOWN A DALLAS BAR. When a musician and his guitar unexpectedly drew a crowd too large for The Rustic bar’s air conditioner to handle, the owners’ INK BUSINESS CARD gave them

the flexibility they needed to purchase a new cooling system. There are thousands of things a business cannot control. Find out how Chase for Business helped The Rustic control its fnances at Chase.com/forBusiness. So you can own it.

Editor’s Note

DISRUPT THIS. Progress is impossible without change, and those who cannot change their minds cannot change anything. —George Bernard Shaw

isruption is something we write about every month. It’s the force we stand for, and it’s what we advocate with every story. But it’s not enough to simply talk about these ideas. We need to be part of them. So we’ve decided to turn our pages—our design, our style and our culture at large—into a lab for change and innovation. By disrupting ourselves and our logo and everything we have ever represented, we stand next to you, as one with you. It’s our riskiest move to date. So, welcome to our new look and feel. Welcome to us being one of you. We’re not just preaching, we’re doing. Just like you. We took some risks. And it was a little bit scary. The changes are obvious at first glance. For so long we have been told: Present yourselves as a business magazine.

ENTREPRENEUR 11/15

Design as if you were designing for The Economist. No. We are not, and we never will be. The way we see it, we are more than a business magazine—we are the intersection of culture, entrepreneurship and life. That’s what we want to be, and that’s what we hope our new look represents. So welcome to the new Entrepreneur. We may fail. We may succeed. Our logo may cause a commotion. Guess what? That’s the point. That’s disruption. We took the risk to stand alongside your journey toward change, because we believe in what you are doing, and we want to be a part of it. Because together, we represent the future of our economy and our culture. Change isn’t easy. As we learned through this redesign process, there are hard days, budgetary constraints, disagreements and hurt feelings and times when you ask yourself why you started this crazy undertaking

OUR BOARD

CAROLYN HORWITZ Executive editor, unsung hero and the heart and soul of the stories that get told in this magazine. She plays a lot of tennis, has edited several books and is passionate about entrepreneurship.

Amy C. Cosper photograph by Nigel Parry

Let's talk disruption #DisruptThis

at all. When you wish you had just played it safe and were doing something, anything, else. But you keep at it, because what you are doing is not just important—it may be your legacy. And if it were easy, everyone would be doing it. Let me remind you, 30 years ago the word entrepreneurship meant something totally different than it does today. To be entrepreneurial once meant selling snake oil. It meant some sort of trickery. It meant that you did not have a job. But the years have been generous to the idea of entrepreneurship. It now stands for character, risk and innovation. It is now about living the dream. It is more than being your own boss. It is about creating something that will change the course of history.

So for this inaugural issue, we chose a couple of unorthodox topics. We took a look at one of the world’s oldest industries— winemaking—and how one venerable Napa Valley producer, Silver Oak, is turning to new technology to upend time-honored traditions and processes on its way to award-winning cabernets. Another iconoclast, will.i.am, takes on the topic of innovation with his audacious gamble into the world of smart watches. You may have known that he has successfully bridged the worlds of entertainment and entrepreneurship by turning his band, Black Eyed Peas, into a lucrative brand. But did you know that he is a palm tree? (See “The hit man,” page 50.) And, as part of our new world perspective, we have decided to take our own 360-degree view of business. It’s a look at the types of companies, leaders, personalities, cultures

and operations that perform best—and, more important, why they perform. Whichever type you are, you should find lessons, takeaways and hints to building a more sustainable company—one that will keep on disrupting for years to come. The bottom line, as always, is this: We celebrate you, we support you and we believe in you. Even on your roughest day, we’re right there with you. And so is will.i.am. We think, but we’re not sure. Cheers,

Amy C. Cosper acosper@entrepreneur.com @AmyCCosper

OF ENTREPRENEURIAL ADVISERS

BRANDON KAVULLA Our creative director at large is the choreographer behind all of our design changes. His ideas have challenged us to rethink what we represent and what we stand for. He inspires all of us.

ROBERT MAXWELL Through costume changes, mood changes and parachute pants, the photographer captured our cover subject—the inimitable “palm tree” known as will.i.am—in all his L.A. glory.

NIGEL PARRY Photographer, motorcyclist, storyteller and badass, he oversaw an inspiring day of shooting in a tiny room at the Waldorf Astoria in New York. Proof that a great photographer can make anything look good—even the editor of this magazine.

JAMES VICTORE The mustached master is now a regular and recurring part of the Entrepreneur brand. His voice is as much inspiration as it is illustration. He is the intelligence behind the new logo and the voice behind our back page.

11/15 ENTREPRENEUR

Feedback

JOIN US “Bite me” is a perfect response to those naysayers!

Big Love

Reading the latest Entrepreneur is one of the indulgences I enjoy in pursuit of “devotion to oneself” in the marriage of work-life balance. And kudos to your staff for balancing the interests of businesses large and small. I find monthly takeaways, whether it’s for marketing insight, growth planning or timesaving tech tools that help not only me but the franchisees in my young business. In fact, I’ve got a couple of pages dog-eared from the current edition that I need to incorporate. So, time to work my passion—and thanks for having passion in the work you do.

Scott McMahon, PHOENIX

Big Crapple

“Stop trying to be a cowboy and start trying to be a New Yorker!” I almost rolled off the toilet laughing at that line (Editor’s Note, September). My family’s roots are in Fort Worth, Texas, but I was born and raised in New Mexico, on the eastern plains. Years ago I wrote a short piece titled “I’m Not a New Yorker.” As an artist, photographer and all-around creative type, I, too, have been admonished for not becoming a Big Apple citizen. “Bite me” is a perfect response to those naysayers!

John B. Pritchett, CLOVIS, N.M.

Big Tobacco

TELL US ABOUT IT

As a loyal reader for more than 30 years, I could not believe my eyes seeing the misleading cigarette advertising on page 29 of your September issue. Natural, organic and no additives: Smoking is still killing people.

Our Facebook fans, Twitter followers and discussion groups are buzzing about what matters to entrepreneurs most. Come join the conversation. Like us on Facebook: facebook.com/EntMagazine Follow us on Twitter: @Entrepreneur and @AmyCCosper Write to: Letters, Entrepreneur, 18061 Fitch, Irvine, Calif. 92614 fax: (949) 752-1180 email: entmag@entrepreneur.com

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letters and comments may be edited.

ENTREPRENEUR 11/15

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Live + Work

esquire guy

FAKING IT RIGHT AND THE AWARD FOR BEST OFFICE ACTOR GOES TO … By Ross McCammon

e fake it in meetings. We fake it over email. We fake it when we’re envious of someone else’s success. We fake it in the elevator when we ask Kyle if he has any weekend plans. The professional world’s a stage, and we’re all actors pretending to care about how Kyle spends his free time. The question is: How much do the roles in which you cast yourself differ from who you actually are? Because if they differ a lot, you’re going to cause more problems for yourself than if you’d just behave authentically. But if they differ just a little—if you can fake it in a way that tempers your real feelings and allows you to present yourself as calm or deliberate or enthusiastic or charged up or any other situationally virtuous behavior (SVB, as no one but me refers to

Photograph by Paul Sahre

11/15 ENTREPRENEUR

it)—then you are giving yourself time to let the negative feelings pass. And they will pass. A Few Words on Self-Presentation You think that’s you going to work? Heading into a meeting with a client? That’s not you. That’s you, plus your self-presentation tactics. Self-presentation is the behavior and information we offer to others, almost always so that we can show ourselves in a favorable light. It’s how we shake a hand, smile, make eye contact. It’s the information we provide—and don’t provide. Self-presentation involves “tactics.” And those tactics often involve fakery: We smile when we’re not happy; we act interested when we’re bored; we stay awake when we’d like to crawl up on the table in the conference room and go to sleep. To be quite honest, we lie. But there is honor in those lies. Because you’re trying. You’re trying to overcome your annoyance or insecurity or fear for the sake of a larger goal. But enough about such lofty things. Let’s get to the tactics. How to Fake Confidence at a Meeting Research shows that the key to faking is to do it early, when impressions are being made. To that end, let’s have a remedial course in body language. You might not feel like you should smile, but you should smile. (More on that later.) You might not want to maintain eye contact, but you should lock in. What researchers call the “gaze” is key. You want a lot of gaze. You know the eye contact is working if you feel slightly uncomfortable. (Slight discomfort is underrated in business.) You might not want to sit up straight, but sit up straight. You’ll seem assertive, social, in control. Basically, you want to act like a news anchor. National news—not local. Also: Raise your eyebrows every now and then. The eyebrows don’t get enough credit when it comes to body language. Draw some circles with a couple of dots for eyes. Draw some lines above the eyes and see how the expression changes. For example:

Fig. 1

Fig. 2

Fig. 3

Fig. 4

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You want a combination of 1 and 4. Figure 1 is saying: “I don’t want to crawl out of here!” Figure 2 is saying: “I find this pleasantly amusing and mildly interesting!” (Figure 2 wants to go to the bathroom.) Figure 3 is about to rob you.

WHEN FAKING GOES TOO FAR A Michigan State University professor studied a group of bus drivers, whose jobs require them to be polite to commuters. The research found that bus drivers who faked a good mood with only a smile, or “surface acting,” ended up in a worse mood and with diminished productivity. However, those who faked happiness by smiling and thinking positive thoughts, or “deep acting,” found themselves in a better mood with increased productivity. So, if you want to seem happy, get happy. Real happy.

How to Seem Happy for Someone When You’re Not Seeming happy when you aren’t is a useful tool. Sometimes you’re blindsided by news that might be good for the company but disappointing to you. A colleague is promoted, for instance. Sometimes you have to seem gracious. The key to seeming happy goes beyond faking a smile. They key is digging deep. You have a lot of resentment and envy to get through before you get to the good stuff. This requires real acting, says Sean Kavanagh, CEO of The Ariel Group, an international training and coaching company that puts acting techniques to work. I’ll let Sean have the stage. Take it away, Sean. “To be a really good actor, you have to authentically take on the role. So it’s more than just pretending.” [Polite applause. From me at least.] “Before they go on, actors will do breathing techniques that keep the breath deep into the diaphragm and not up in the shoulders. It makes them focus, it allows them to speak more clearly and it relaxes them.” [Even more polite applause.] “The next thing they do is they focus on their intention. What does this audience need of me? What do my fellow actors need of me? What is my intention as I walk on stage?” [From the wings I shout: “The audience is your associate! The stage is probably your associate’s office or something!”] “The allegory for the meeting is, How can I empathize with them? How can I walk in the shoes of the audience and bring the appropriate part of me to bear? The third thing they consider is: What is the purpose behind this soliloquy I’m about deliver?” [The soliloquy is your words of congratulations!] “Now you know what your purpose is, and you can deliver news that might feel uncomfortable to you with a level of confidence, warning, inspiration, support or whatever it is you need to convey.” [Bravo, Sean. Bravo.] How to ‘Can’ When You ‘Can’t Even’ There are times when you can’t (like at a networking event or celebrating somebody’s success). And then there are times when you can’t even. If you can’t even, and you need to seem like you can, here’s what you should do. Fix your eyes, which will want to roll involuntarily, upon an object. Any object will do. Just make sure the object is at eye level or below. Raise the corners of your mouth so that instead of exhibiting dumbfoundedness, you seem … founded. Now it seems like you merely can’t. If you close your mouth, which opened when your jaw dropped, it might even seem like you can. Up to you. continued on page 18 Line drawings by Daniel Zalkus

Ambition knows no time zone.

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ask a pro continued from page 16 How to Smile When You Do Not Feel Like Smiling The main thing to remember is: Unhappy smiling is worse than not smiling at all. People who smile when they’re not actually happy look like county-level pageant contestants. So think of something that makes you happy. Embroidery? Archery? Origami? Whatever. Consider the point of all this, which is to do good work. And doing good requires pushing through the things that make you want to scream so that your authentic reaction doesn’t create even more problems—for you and a lot of other people. Anyway, what are your weekend plans?!

Make Membership Count

How can I optimize my affiliation with a business association?

KEY TECHNICAL MATTERS Think of your possible reactions as a series of, oh, I don’t know … notches. Determine at which notch your feelings are. Your feelings, for the sake of brevity, shall be referred to as “it.” What you want to do is take “it” down at least one notch. Three notches is best. Five is too many. Pay attention to body language. Smile. Make eye contact. Sit up straight. When in doubt: Act. Be someone else. And don’t lay it on thick. Stifle anger. Stifle irritation. Do not stifle a sneeze. Sneezes are fine. Don’t fake like you’re not sneezing. Because obviously you’re sneezing. I mean, just sneeze. We’re all humans here. Always stifle feeling flabbergasted. Gasted is fine. But the flabber is way too much.

Ross McCammon is a senior editor at Esquire and the author of Works Well With Others. To learn more about Esquire and to subscribe, go to esquire.com.

ENTREPRENEUR 11/15

Mike Gatti, senior vice president for member relations at the National Retail Federation in Washington, D.C., offers this three-step approach. Get engaged. It’s not enough to just sign up and read the newsletters. “Really get involved,” Gatti says. “Join a committee that has something to do with your discipline and your company.” Get educated. Take advantage of all the information associations provide—most of it’s online and free. “One of the things trade associations do is conduct research on various issues facing the industry,” Gatti explains. “If you don’t take advantage of that, you’re wasting a lot of your membership dollars.” Get familiar. Learn who’s who on the association staff. “When you spend money on your membership, you’ve got a team of people working for you and your industry,” Gatti says. “The ones who get the most out of our organization are the ones who know us and interact with us.” —Christopher Hann

Coffee, tea or tiara? Steffany Kisling’s SkyAngels cater to every airborne need.

business unusual

THE FRIENDLIER SKIES A private-aviation training agency takes service to new heights By Margaret Littman

ENTREPRENEUR 11/15

steffany kisling never expected to get into the rarified world of private aviation. “I grew up with meager means. Even a commercial flight was a luxury,” she points out. Today Kisling, a former cabin attendant on flights and yachts, is the founder of a business that specializes in extravagance: San Francisco-based SkyAngels, which trains über-cabin attendants to see to every need of the famous or wealthy who fly high on private planes. Kisling launched the company in 2010, when recruitment for her first training class (now called SkyAcademy) netted

applications from some 500 women. (To date, no men have signed on for training.) The interest came mostly through networking in the close-knit flight-operator community and through postings on LinkedIn and Craigslist. Of the initial applicants, Kisling interviewed 10 and eventually permitted three to go through the training process, setting the tone for a startup that was highly selective from the get-go. SkyAngels are more than flight attendants. In addition to standard safety and security procedures, the tasks they perform—asked but sometimes intuited—run the gamut from nice touch to over-the-top. Many of the extras are foodrelated; preflight pickups have been made at The Ivy in Los Angeles, Joe’s Stone Crab in Miami Beach and Cipriani in New York, as well as runs to grab birthday cakes or to Brooklyn for pizza. The team goes above and beyond for kids: On one flight the plane’s interior was transformed to a Disney theme, down to the foods and tiaras. SkyAngels also take kids on outings at the destination—from horse-andcarriage rides to snorkeling— while parents work. Need a fourth hand to play bridge in the air? A SkyAngel can do that. Additionally, the company provides services such as efficiency consulting and an online training platform for flight operators. Kisling launched SkyAngels with $25,000. The first three years in business “were really booming,” she says, adding that the venture has been profitable since its first year. (She would not reveal revenue figures.) The quick growth required a pivot along the way. In the beginning, those who went Photographs by Jamie Kripke

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through SkyAngels training became contract workers for the company, which worked as a staffing agency as well as a training firm. SkyAngels launched when the economy was slow, and flight operators contracted the company’s flight attendants to perform both mandates certified by Federal Aviation Regulations and high-end hospitality duties like serving as chef, personal assistant and caregiver, often in multiple languages. However, when the economy improved, flight operators began hiring their own crews. With that shift, demand for the staffing side of the business fell, but demand for the training didn’t. In 2014, Kisling brought in investors, including Mark Stevens of S:Cubed Capital (former partner of Sequoia Capital) and Dan Rosensweig, CEO of Chegg (and former COO of Yahoo). With their backing she developed a plan to expand SkyAcademy, which now has an online component as well as a physical location near Oakland International Airport. The program, which includes online training plus three-day intensive in-person schooling, costs $3,000. Also in the works is software designed to increase the efficiency of flight operators.

HOW TO SUCCEED IN THE LUXURY BUSINESS BY REALLY TRYING

Kisling declines to disclose her financial goals except to say that she expects ROI to improve as the online training programs and software roll out. The new training will allow SkyAngels to significantly increase volume. Enrollment will be open—meaning no more screening applications, and anyone can attend. As her business has changed, one thing has stayed constant for Kisling. “I love it,” she says, noting that she enjoys the fact that nothing is the same from one day to the next: An aircraft may show up late, creating a domino effect of menu replanning and ingredient sourcing (say, if breakfast suddenly turns into dinner) in just two hours. “It keeps me abreast of what our students are going through, and I get more stories to tell.”

While some might think that marketing to the deep-pocketed customers in the world of private aviation would be a breeze, SkyAngels CEO Steffany Kisling knows otherwise. She says there are special considerations when dealing with the extremely affluent, who expect top-notch service at all times. The key, she’s found, is to focus on providing exceptional service to fewer customers. “You cannot make any mistakes,” Kisling says. “You have to pay attention to detail. You have one opportunity, and if you don’t get it right, chances are you are not going to get called again.” Gary Davis, who was a pilot with United Airlines for 38 years before going into private aviation, says celebrity and high-end clients can be very particular. “Sometimes I’m glad flight attendants deal with those passengers, and I can hide in the cockpit,” Davis says. “The ones who come out of SkyAngels are pretty adept to handle it, even early in their careers.” Kisling says the rise in companies that “attempt to tackle the complicated market of private aviation—selling ‘empty legs’ at a discounted price with the goal in mind of making private jet travel available for the masses,” is an example of watered-down luxury that dilutes the sector. Those in the luxury market need to keep in mind that it’s “not for everyone,” she explains. “Our focus has always been and will continue to be on making private jet travel more delightful for those who can afford it.” —M.L.

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ENTREPRENEUR 11/15

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the ethics coach

He Said, She Said IS THERE EVER A PLACE FOR GENDER BIAS IN BUSINESS? By Gael O’Brien

I just fired my sales director for dishonesty and need to replace him. Our business is in a male-dominated field, but I want things done right this time. My wife tells me studies have shown that women are perceived to be more ethical than men. Is this accurate?

Dishonesty is a failure of character, not gender. Before recruiting the rotten apple’s successor, find out if he created any problems that need cleanup. His way of doing things lowered the bar for those reporting to him. Consider whether there is anything about your company’s sales goals, pay or incentive plan that could inadvertently encourage unethical behavior. Find an 24

ENTREPRENEUR 11/15

issue? Address it immediately. Before hiring somebody new, reaffirm your ethical standards and practices with your team. Let them know what you expect. Ask if they see company values supporting, challenging or not having an impact on how they sell your products or services. Find out if they feel they have what they need to do their jobs and if there are non-financial

rewards—like recognition and appreciation programs—that would motivate them. This discussion will give you a clearer picture of the kind of person you should hire to bring out the best in the team. Now, back to the gender question: Your wife rightly points out that a number of studies highlight areas where women are seen as more ethical and more likely to support ethical business practices. However—and putting aside the danger inherent in any gender stereotyping—results are often mixed. For example, in the 2015 Pew Research Center study “What Makes a Good Leader, and Does Gender Matter?,” 31 percent of those surveyed said women in top executive positions are more ethical and honest; 3 percent said men were; and 64 percent found no difference between the genders. Gender bias is unethical, whether it leads you to believe that female candidates are superior or that men will be a better fit in your industry. Bias undermines how you do business. Moreover, it is discriminatory and an invitation to a lawsuit. You likely will have your expectations exceeded if your search includes a diverse group of qualified men and women. The more varied the candidates, the better the chance you’ll find a person who walks the talk about ethical behavior and can mentor and motivate your team to deliver great results.

We opened a second location of our business before we were ready. We screwed up a big order, and the customer complained on Facebook. I fixed the

problem and replied on social media. The issue is resolved, but how do I build trust with potential customers when I’m coming from behind?

Customers trust businesses with reliable words, actions and products and quick remedies to problems. So, don’t fret—you’re off to a good start. You accepted responsibility for and fixed a major stumble. Your team plays a huge role in creating the conditions necessary for trust to take hold; their credibility, consistency and commitment to customers will earn that trust. Since the team members in your new location got off to a rough start, make sure the problem didn’t come from (or result in) internal trust issues. If it did, help employees work through the issues and fix vulnerabilities in the system. If they feel resentful, embarrassed or don’t want to help each other succeed, customers will pick up on the bad vibes and flee. Once everyone’s on the same page, ask for ideas from both locations that will inspire customer confidence and ensure a consistent and positive customer experience. Formalize a plan incorporating the best ideas; this should include taking action to build trust and fuel customer satisfaction as a competency to be evaluated and recognized in performance reviews. Do all that, and you’ll quickly see that satisfied customers will put word-of-mouth to work to establish your business as trustworthy—in both locations. Gael O’Brien is publisher of The Week in Ethics and founder of Strategic Opportunities Group.

Illustration by Karsten Petrat

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food

THE VC GROCERY LIST

and Kleiner Perkins Caufield & Byers. It is an international opportunity that’s attracting corporate investment funds as well, from companies such as Google, Monsanto, Mars and Taylor Farms, a leading freshBy Corie Brown produce processor. Silicon Valley sees “a vast, vast food industry that is behind other industrial sectors,” says Drew Taylor, head of new ventures he food revolution has a at Taylor Farms in Salinas, Calif. “We are new champion. Venture capexcited that there is more interest in food and italists are stepping in with Food e-commerce was the largest agriculture, and that there are more innovabillions of dollars focused on sector in both volume and size of tive ideas than ever before.” agriculture and food ventures deals, driven in part by the proliferation The darlings of the food sector combine that reduce waste and use of chemicals, of meal-delivery services. Big Data—the mountain of existing data on conserve resources, accelerate distribution resources, geography, supplies, weather and and—at least theoretically—improve our markets—with local information. Drones and health and the health of the planet. robots play a role. The “killer apps” proIt’s a new playing field for venture firms. duce real-time insights that farmers And startups all along the food chain— and food businesses use to create from farmers and tech companies efficiencies, reduce waste and to home cooks—are reaping huge Water connect with consumers. rewards: $2.06 billion invested Sector Financing: $525 million Still, ag-tech has some in the first half of 2015. Average Deal Size: $52.5 million risk, according to Mark That’s nearly as much as Kahn, founding partner the $2.36 billion total for of India-based VC firm 2014, which was two and Drones & Robotics Omnivore Partners. a half times the figure $201 million $10.6 million He notes that farmfor 2013, according to ers tend to be slow to AgFunder, a reporting Food E-commerce adopt unproven tech$551 million and support service $18.4 million Decision Support Tech nologies, which can for entrepreneurs in $179 million $8.9 million frustrate venture capthe new food sector italists with very high launched in 2013. expectations. Returns Cultivian Sandbox of Bioenergy are much faster with Chicago closed its first $166 million $13.8 million consumer food ventures. food fund for $34 million “Big Food is facing extincin 2008, just as the recesSoil & Crop Tech Other* tion,” Kahn says. “No one eats sion hit. “It was tough,” says $114 million $119 million $7.1 million $17.6 million Chef Boyardee anymore.” co-founder Andy Ziolkowski AgFunder co-founder Rob about what was a nonexistent foodLeclerc agrees. “Big food compatech sector at the time. In hindsight, he nies lost $4 billion in market share last says, it was perfect timing: Opportunities Biomaterials year,” he says. “Those companies are scared. were, and continue to be, plentiful, and Food & Biochemicals Storage They don’t know how to deal with all of Cultivian, with more than $150 million under $92 million $29 million $6.6 million $7.2 million the change.” management, has invested in food and agriSustainable Cannabis Protein To that end, General Mills, Coca-Cola, culture ventures such as Advanced Animal $39 million $40 million $3 million PepsiCo and others are rushing to refresh Diagnostics, Vestaron and Conservis. $10 million their portfolios with the purchase of entreNow hundreds of Silicon Valley firms are *Smart Equipment & Hardware, Farm-to-Consumer, Waste Mitigation, preneurial brands that meet Millennials’ in the game, including mainstay funds such Animal Nutrition, Food Safety & Traceability, Indoor Agriculture, Miscellaneous. demand for high-quality products. The as Khosla Ventures, Andreessen Horowitz Source: “AgFunder AgTech Funding Report 2015”

Investments in food ventures are heating up

ENTREPRENEUR 11/15

DINNER’S ON ITS WAY

Photograph by Sam Kaplan

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Hershey Co. bought Krave Pure Foods, a maker of nitrite-free beef jerky with $35 million in sales, for a reported $300 million earlier this year. In May, Hormel Foods paid $775 million for Applegate Farms, a producer of humanely raised, antibiotic- and preservative-free deli meats. Meanwhile, Silicon Valley investors are excited about plant and insect proteins, produced by the likes of Hampton Creek Foods, Modern Meadows, Impossible Foods and Beyond Meat. Aquaponic and urban farming ventures have traction as well. High-end meal-delivery ventures are white-hot. Danielle Gould launched Food+Tech Connect—a platform for innovation that offers online classes, meetups, news and other resources for startups—in 2010. Her business focuses on food ventures along the entire value chain, from farm to fork. “We’re here to help entrepreneurs,” she says. There were 50 companies and investors in the space when she started blogging and hosting Food+Tech events. Today, she says, there are 4,000 active players and more entering the fray every day, as well as other organizations providing support for them, such as The Mixing Bowl, a hub for IT in food and agriculture. “There is more money, which is attracting more talent,” she adds. “It’s a gold rush,” agrees one venture fund executive who asked not to be identified. “We’re looking for truly disruptive technologies that produce huge returns. It is an open question whether the food sector will provide those opportunities.” Corie Brown is co-founder of Los Angeles-based Zester Media.

ENTREPRENEUR 11/15

The gym at Soho House Chicago is a knockout.

travel

No Excuses! GETTING YOUR WORKOUT IN WHILE ON THE ROAD

By Elaine Glusac

y any mortal standard, Yamandu Perez’s workout regime is impressive. The Chicago-based restaurant and bar owner, who did four Ironman races in one calendar year, routinely rises at 6 a.m. to run, bike or swim before pulling into the office. When he travels, he practices a floor-exercise routine in his hotel and seeks out local running or triathlon clubs. For Perez, who is working on opening his third restaurant, athletics are vital for his personal health and integral to his professional success. “I’m never satisfied with my results,” he says. “So I bring that to work. It doesn’t matter how amazing we did today; there’s always something you can learn.” Maintaining fitness while traveling often requires running a gauntlet of temptations and traps—from late-night meals to irregular sleep—that can derail your physical energy and your psychic motivation. Earlier this year, Omni Hotels & Resorts released a survey that found that 70 percent of travelers routinely gain weight on the road. From low-fat foods to souped-up gyms, the travel industry has stepped in with wellness initiatives. Omni offers gluten-free breakfast stations at its buffets. Delta Air Lines carries fresh packaged-food choices such as wraps and salads from Luvo. Hotel gyms, once acceptably closet-size, have become amenity selling points. Forgot your sneakers? Chains like Westin and Fairmont will loan

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them to you for a nominal fee. “We see hotels responding to business travelers—who have back-to-back meetings, are eating on the fly and want to decompress quickly—by sometimes putting a treadmill in the room,” says Christina Gambini, a vice president at Travel Leaders Group, which represents about a third of travel agents nationally. Meanwhile, posted calorie counts at restaurants have raised awareness of airport pitfalls. “Maybe you don’t get a Starbucks venti; you get the tall.” Trainers suggest that the easiest form of exercise on the road, one with no equipment required, is body-weight circuits: repetitions of pushups, squats, jumping jacks and burpees (a combination of squats, planks and jumps). “It is generally thought that weights and treadmills are necessary to work out, but you can get strength and cardio benefits from doing a simple body-weight routine,” says David Chesworth, fitness specialist at Hilton Head Health, a weight-loss and wellness retreat in South Carolina. You can pump up the energy level by throwing in high knees or mountain climbers between sets. Planning a new brewery in Germany, Greg Koch, co-founder and CEO of San Diego-based Stone Brewing Co., swears by his “no excuses” daily workout: four sets each of push-ups, hill climbers and jackknives. He’s spending so much time in Germany these days that he bought an apartment there. He also bought a bike that he uses to commute, combining exercise and immersion. “I learn more about my surroundings quicker,” he says. “It’s a real sense of freedom.” 30

ENTREPRENEUR 11/15

GEAR, GO-TOS AND GRUB FOR FITNESS-MINDED ROAD WARRIORS Best gym: The 40-room Soho House Chicago hosts a disproportionally large 17,000-squarefoot gym with an old-fashioned boxing ring, steam rooms, lounges and group fitness classes including mixed martial arts.

Wear your trainer: The duo behind the new athletic apparel line Athos built a smart grid into their shorts and shirts ($149 to $199) that sends data via Bluetooth to a mobile device, so wearers can see how muscles are functioning and monitor vitals.

Take a nap: Sleep is the cause du jour among health circles. Using ear clips that emit energy waves, the spa at the Miami Beach Edition will induce a 20-minute power nap ($25); the hotel claims it is equivalent to four hours of deep relaxation.

BYO nutrition: Austrian-born entrepreneur and avid athlete Constantin Bisanz launched Aloha plantbased, powdered drink blends. They come in portable packets—just mix into water when you can’t get the fresh stuff.

Find a friend: A social network dedicated to adventurers, Gociety introduces users to like-minded folk for activities such as rock climbing, skiing, mountain biking and kayaking.

Group therapy: ClassPass offers access to fitness classes in 34 cities in the U.S., U.K. and Canada for a monthly fee of $79 to $125. Featherweight feet: Squish a pair of sock-like Nike Free 3.0 Flyknit running shoes ($140) into your carry-on, adding just 7.7 ounces— and a whole lot of zip—to your load.

Healthy vending: Luke Saunders, a onetime traveling salesman frustrated with poor food choices, launched Farmer’s Fridge, a vending machine filled with salads like peach caprese, shaved veggie and kale. It’s currently in 23 locations in Chicago.

All-access pass: Members of Life Time Fitness have access to more than 115 centers around the U.S., most with swimming pools and basketball and racquet courts.

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Photograph by Sam Kaplan

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ing to work it. “Google is democratic,” Sheinkopf notes. What’s more, online review sites like Yelp and Angie’s List can give a small business direct insight into its brand reputation. “Businesses may despise Yelp, but [it’s] a window on how you operate and are perceived,” he says. So encourage social reviews, thank people who say nice things, and view negative reviews as an opportunity to fix what’s broken. “It’s painful to see a negative comment or review,” Sheinkopf admits. But take a long-term view: Use the criticism as a chance to both resolve an immediate issue for one customer and to improve a process or system for the good of future customers.

marketing

Generation Next HOW NEW RULES HELPED AN OLD COMPANY ACHIEVE RECORD GROWTH

By Ann Handley

even years ago, in the midst of an economic recession, Boston’s Yale Appliance + Lighting was losing money. “I’d read somewhere that people will buy some things anyway during a recession—and one of those things was refrigerators,” recalls CEO Steve Sheinkopf. “So we pumped more money into radio and newspaper advertising, thinking it would help. It didn’t—it hurt.” Sheinkopf, who had taken over the store founded by his grandfather, refocused with what was (at the time) a radical approach. He doubled down on a digital marketing strategy that included social media, blogging,

ENTREPRENEUR 11/15

reputation management and email components. The focus on a content-based inbound marketing program allowed Sheinkopf to bring his advertising budget to near zero. (Last year, he says, he spent nothing aside from seasonal Google AdWords buys around Black Friday and a tax-free holiday weekend.) Today Yale Appliance is profitable and growing, with 140 employees. Top-line revenue is expected to hit $80 million this year, and in June the company opened a state-of-the-art showroom in Framingham, Mass.— only its second store after 92 years in business. So how did Sheinkopf use digital marketing to turn around his grandfather’s company? There’s

no magic or special gift involved. “Obviously I’m not a genius; otherwise, I wouldn’t be in the appliance business,” he laughs. What he does have: commitment. A content-based marketing strategy requires it. Here’s how you can get similar results. Actively manage your online reputation. When you’re a small, regional business, you compete with companies that can easily outspend you in advertising. In Sheinkopf’s case, that includes big-time players: Sears, Best Buy, Home Depot and Lowe’s. But digital content can give small, scrappy companies a bigger footprint—if they’re will-

Know what your customers want. In 2007, when Sheinkopf started blogging, he got some traction through organic search results. But things really ignited when he dug deeper into digital marketing basics. He credits Marcus Sheridan at thesaleslion.com with teaching him how to write a metatag, a headline and a call to action that can convert prospects into customers. Sheinkopf also studied customer reactions to figure out what kind of posts would be most useful. It turned out that trend pieces and specific comparisons of, say, a Thermador to a Viking cooktop, got the most traffic. Recommendation posts like “The 5 best counter depth refrigerators” also did well. Creating customer-centric content takes time. But it’s a valuable exercise, for two reasons: It helps you understand what motivates customers, and it requires you to learn everything about your stock, inside and out. Online content has become Yale’s biggest driver of new Illustration by Mario Wagner

PHOTO COURTESY OF BL PHOTOGRAPHY (STEVE SHEINKOPF)

business, Sheinkopf says. Page views were at 18,000 visitors per month in 2011; this past August, the site had 448,000 visitors. What’s more, those who visit the blog and download buyer’s guides convert into buyers at a much higher rate. That’s why Sheinkopf personally reviews all the content his blog publishes. I told him I was surprised that the CEO manages the company blog, and he laughed: “There’s no better business-development effort. So why wouldn’t I?” Make customers smarter. Yale Appliance has more than 20 guides covering everything from how to buy under-cabinet lighting to what to look for in a dishwasher. Many of those started as internal, vendoragnostic training resources for new employees. “We already had a 10-page guide on an induction oven,” Sheinkopf says. It wasn’t a far leap to turn it into a buying guide for customers. Yale uses marketingautomation vendor HubSpot to nurture customers through the buying process. Anyone who downloads a guide to buying a sub-zero fridge opts-in to a series of emails designed to deliver more information about the appliances. Those emails have a high engagement rate:

35 percent, vs. 5 to 10 percent for other emails Yale sends (mainly newsletters and daily promotions). “We focus on making our customer smarter,” Sheinkopf says. “People want to be informed; they don’t want to be sold to anymore—if they ever did.” Invest in staff and other resources that touch customers. Customer happiness is rooted in happy employees. So Yale hires carefully, finding employees with the right cultural fit and making sure they are happy and well taken care of—through profit sharing and generous benefit packages, as well as topnotch training programs. Yale has also spent time and effort identifying and investing in improvements to customer experience, including better phone and computer systems. Quit procrastinating. Sheinkopf embraced content marketing long before a lot of other businesses caught on. So is his success linked to a first-mover advantage? “Good, original information is still good, original information,” he points out. “Good content is still good content.” In other words, any small business can—and should—take advantage of these digital strategies. “I’m not an outlier,” Sheinkopf adds. “There are still millions of industries and countless opportunities in underserved markets. You just have to refuse to do business like everyone else.”

design

PACKAGING OF THE MONTH By Andrew Gibbs

WHO: Burger King commissioned Turner Duckworth, a design agency with studios in London and San Francisco, to redesign its visual identity and launch it to more than 13,000 restaurants in nearly 100 countries. WHAT: Burger King wanted fresh designs for carryout bags, burger wraps, french fry containers and cups. The new line emphasizes individuality and the uniqueness of madeto-order flame-grilled burgers. “All the packaging has a handprinted effect reminiscent of the marks on the burgers made by flame grilling: imperfect perfection,” says a Turner Duckworth spokesperson. Burger King also wanted packaging that would foster efficiency; the new burger wrap, which can be oriented to say either “cheeseburger” or “hamburger,” has a spatula icon that helps staff center the product on the paper. WHY WE LOVE IT: Small details add up. The typeface has minor imperfections, emphasizing one-of-a-kind quality. The abstracted burger in the Whopper logo and on takeout bags is modern, striking and instantly recognizable. Each size of coffee cup has a different icon: a mini battery (for espresso), an alarm clock, a light bulb or a lightning bolt. Together, these playful yet subtle elements serve to modernize Burger King’s image and imbue the company with character, all aimed at enhancing customer loyalty. Andrew Gibbs is editor in chief of The Dieline and editorial and creative director of How magazine.

Ann Handley’s latest book, Steve Sheinkopf’s Yale Appliance + Lighting is a case study in effective digital marketing.

Everybody Writes: Your Go-To Guide to Creating Ridiculously Good Content, is a Wall Street Journal bestseller. @MarketingProfs

11/15 ENTREPRENEUR

design

SENSORY SOLUTIONS

Is your office more sensory-deprivation tank than think tank? We found some high-design products that appeal to all five senses while aiding productivity and overall well-being. Warning: Users may experience a comfort level so great, they’ll have trouble leaving the workplace.

SIGHT FOR SORE EYES

HEAVEN SCENT

SOUND BARRIERS

CLASSIC TASTE

TOUCH OF COMFORT

The Fade Task Light from Fade Studios ($249) fuses LED light technology and user experience in a function-plus-form lamp. The single bar has an articulated arm that rotates 270 degrees and adjusts from a straight vertical to a 120-degree bend that provides spotlight-focus to your desk. Dimmer and color-temperature controls allow users to moderate light, adjust to changing conditions throughout the day and optimize conditions to specific tasks or materials. The base includes a five-volt integrated USB port. Even more beautiful? It comes in four cool colors.

The Dew aromatic diffuser from ZAQ ($49.99) turns any office into a tranquil and odor-free environment while humidifying the air. Compact and energy-efficient, the dewdrop-shape diffuser, compatible with essential oils or blends, can be used deskside or in a community area to enhance air quality, while multicolor LED lights may (some say) reduce anxiety and improve mood. Dew comes with a black or white base and is made of BPA-free materials.

Italian design meets technology meets the graphic arts in the Parentesit acoustic wall panels designed by Lievore Altherr Molina for Arper (starting at $1,229). Available in a variety of colors as circles, squares and ovals, the panels can hang alone or grouped together into modernist wall art, reducing background noise and creating a quiet space for collaboration or solo concentration. Wall installations can be configured to include LED ambient lighting or speakers. Launched this year at Milan’s Salone Internazionale del Mobile, the panels will be available in the U.S. in 2016.

Artisanal coffee devotees are returning to the original tastemaker: the Chemex (three-cup vessel, $37.50; six-cup, $41.50). Fans say the glass pour-over carafe—instantly recognizable by its iconic shape and leather tie—produces the purest coffee because of its proprietary paper filters, which remove bitter oils. What’s more, the manual, pod-free method is environmentally friendly. Launched in 1941 and still made in America, the Chemex has been called one of the best-designed products of modern times, earning a place in New York’s Museum of Modern Art. Mary Tyler Moore served up coffee in a Chemex on her classic show; the carafe also made several cameo appearances on Mad Men.

First designed for workers standing for long periods on hard surfaces—on assembly lines or in banks, shops or healthcare facilities—GelPro floor mats have found a ready audience in people working at the new stand-up desks. In a study at Texas A&M University, the mats were shown to reduce spinal compression and increase flexibility while reducing leg, foot and back fatigue. The range of made-in-the-U.S. mats (from $79.95) have nonslip bottoms and feature a proprietary “energy-return” foam that won’t break down over time; the higher-end models include therapeutic gels (think running-shoe technology).

ENTREPRENEUR 11/15

PHOTO BY MARCO COVI (PARENTESIT)

by Lana Bortolot

innovators

LIGHTNING

The Napa Valleyâ&#x20AC;&#x2122;s warm, dry climate, offset by the cooling marine layer from the Pacific Ocean nearby, results in premium grape quality at Silver Oakâ&#x20AC;&#x2122;s Soda Canyon vineyard.

IN A GLASS

BY JASON ANKENY // PHOTOGRAPHS BY JAKE STANGEL

While its lush cabernets adhere to classical traditions, Silver Oak Cellars is pushing winemaking into the 21st century by embracing breakthrough technology, sustainability and data insights. Here’s a toast to the Napa Valley mainstay that’s fomenting—and fermenting—a wine revolution.

Rising from the ashes: President and CEO David Duncan.

“What are we going to do? We’re going to rebuild the winery.”

Sometimes an ending is also a beginning. Around 6:30 a.m. on Feb. 2, 2006, firetrucks from across Napa Valley raced to the Oakville, Calif., site of Silver Oak Cellars, one of the region’s oldest and most celebrated boutique wineries. Smoldering fireplace ashes discarded in a nearby dumpster had caught fire sometime before sunrise, and the flames soon engulfed Bonny’s Chai, the 7,000-square-foot erstwhile dairy barn that served as Silver Oak’s original winemaking facility in 1972, the year Ray Duncan and Justin Meyer began crafting the first vintage of their signature cabernet sauvignon. 11/15 ENTREPRENEUR

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Cabernet sauvignon grapes are fermented in new stainless-steel tanks, ensuring sterility.

No lives were lost in the blaze, but the historic Bonny’s Chai was destroyed. The fire also claimed about 70 barrels of Silver Oak’s 2004 Napa Valley Cabernet, valued at roughly $2 million, and caused heat and smoke damage to other buildings on the property. “The old days of Silver Oak literally burned down,” president and CEO David Duncan, the youngest of Ray Duncan’s four sons, recalls almost a decade later. “I remember we were at my dad’s house that afternoon. The whole management team was sitting there, and it’s dead silence, except for the sniffles. Rickie [Piña, Silver Oak’s CFO] all of a sudden goes, ‘What are we going to do?’ I looked up, without missing a beat, and said, ‘We’re gonna rebuild the winery.’ Everyone relaxed and started laughing, and we opened wine. We knew we had a future, no matter what.” Silver Oak didn’t simply start over, however. It seized the opportunity to rethink both the 40

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art and business of winemaking, blending its time-tested oenological principles and processes with cutting-edge technologies, analytics-driven insights and sustainable philosophies—in essence, bridging the gap between Napa Valley and Silicon Valley, its neighbor less than 100 miles to the south. Seven years removed from the grand opening of the reconstructed Oakville facility, Silver Oak remains both an institution and an innovator. While consumer support for its supple, food-friendly cabernets has never wavered over time—Silver Oak consistently places among the top 10 on Wine & Spirits magazine’s annual countdown of bestselling restaurant wines—David Duncan says the company is currently producing the richest, most nuanced wines in its 43-year history. He credits the creative renaissance to the stateof-the-art Oakville winery as well as digital advances translating to healthier, more bountiful vineyards and superior grapes.

So now Silver Oak is doing it all again, leveraging the lessons it learned in Oakville to build an even more forward-thinking site in Sonoma County’s Alexander Valley, on the grounds of the former Sausal Vineyard and Winery, which the Duncan family acquired in 2012. Duncan says the new winery, scheduled to open in 2017, will incorporate alternative energy sources, water-reuse solutions, reclaimed building materials and other ecologically progressive elements coming together to produce wine in greater harmony with the earth. “It’s going to be very farm-based—very modern. When it’s finished, it’s going to be part of the land,” Duncan says. “Water use, energy use, where the materials come from—all of those things are really important to demonstrate what can be done for the wine industry. We’re not doing risky things. We’re just taking current technology and pushing it to the edge.”

The wine ages for two years in American oak barrels, then spends 15 to 20 months more in bottles; executive VP Tim Duncan oversees sales.

inemaking isn’t the world’s oldest profession, but it’s damn close. Villagers in Jiahu, located in northern China’s Yellow River Basin, produced the world’s oldest known fermented beverage—a rice wine made with beeswax and wild grapes or hawthorn berries—as far back as 7,000 B.C., and in 2011, archaeologists unearthed the earliest known winery in an Armenian mountain cavern. The site, dating back about 6,100 years, housed a large basin for treading grapes, as well as fermentation jars and the remains of crushed fruit, leaves and vines. The history of California wine begins in 1769, when Father Junípero Serra, a Franciscan missionary, established the state’s first vineyard in San Diego. California wines were produced for sacramental purposes before businessman Jean-Louis Vignes established

the Golden State’s first commercial winery, El Aliso, in 1833 in Los Angeles; other pioneering California wine entrepreneurs include Agoston Haraszthy, General Mariano Guadalupe Vallejo and Charles Krug, famed for launching Napa Valley’s first commercial winery in 1861. Collectively these vintners were generating between 19 million and 35 million gallons annually by the 1890s. Prohibition, enacted in early 1920, derailed the American wine industry for decades. The ranks of commercial wineries across the U.S. plummeted from more than 2,500 before Prohibition went into effect to fewer than 100 by 1933, when lawmakers passed the 21st Amendment, repealing the law. Even by 1960, there were fewer than 300 commercial wineries nationwide; California, which had 713 bonded wineries before Prohibition, did not return to that level until 1986. Despite a combination of climatic, geographical and geological factors creating

a singularly hospitable environment for growing premium wine grapes, Napa Valley boasted only about 25 wineries as late as the mid-1960s, with a local focus on low-grade jug wine. The Robert Mondavi Winery, the first major winery built in Napa during the post-Prohibition era, opened in 1966 in Oakville and radically reshaped the landscape, creating an array of top-quality, top-dollar varietals that proved the region could produce wines to rival the finest European exports. Ray Duncan, founder of Denver-based oil and gas exploration firm Duncan Oil Inc., as well as the Durango Ski Corp. and Purgatory Ski Resort, began acquiring land in the Napa and Alexander valleys in the early 1970s. Duncan originally planned to plant vineyards and sell grapes, but he opted to enter the wine business after befriending Justin Meyer, the former apprentice to Brother Timothy Diener, the legendary vintner at Napa’s 11/15 ENTREPRENEUR

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Christian Brothers winery. Duncan and Meyer agreed to devote all their resources to creating a single varietal: cabernet sauvignon aged for two years in American oak barrels and an additional 15 to 20 months in bottles, making each vintage drinkable upon commercial release. “You gotta tip your cap to the fact that Ray jumped in at a time when Napa really wasn’t known for cabernet,” says Rob McMillan, a longtime wine industry analyst and the executive vice president and founder of Silicon Valley Bank’s wine division. “Everything takes vision. There’s also timing, luck and hard work. Without a doubt, all those things turned out for [Silver Oak]. But Ray was diligent, and he listened to Justin, took his point of view, and they worked very well

together to come up with a philosophy of just doing cabernet. Virtually nobody else that I can recall said, ‘We’re gonna do one [varietal], and we’re gonna do it really well.’ They helped define Napa as a cabernet producer.” Silver Oak—so named in honor of Oakville and the Silverado Trail, the scenic route stretching 29 miles along Napa Valley’s eastern edge—produced 1,100 cases of its first vintage, the 1972 North Coast Cabernet Sauvignon, created from grapes harvested in its Alexander Valley vineyard. Luscious and silky-smooth, informed by the strong, sweet flavors and aromas synonymous with American oak aging, it was released to the public in 1977 at the bargain price of $6 per bottle. “We made the ’72, ’73, ’74 and ’75 before we sold our first bottle of wine. My dad had the

Vineyard manager Dave Shein and his dog, Molly, out for inspection.

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faith and trust in Justin to do that,” David Duncan says. “We basically borrowed all the money. It was not that expensive. Nobody was here—there was nothing going on. The investment on the first vintage was probably $5 a bottle, or $60 a case.” Silver Oak’s entry into the market coincided with a tectonic shift in the global wine culture. While domestic sales of California wines increased steadily throughout the 1970s, international experts and enthusiasts viewed varietals from Napa, Sonoma County and other adjacent regions with outright contempt. That changed virtually overnight on May 24, 1976, after British wine merchant Steven Spurrier invited several California wineries to compete in a blind tasting event known as the Judgment of Paris. The nine

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of grapes harvested in its vineyards. Both wines invariably sell out. Silver Oak does not disclose revenue but says that about 25 percent of sales originate directly from its website and tasting rooms. In-state transactions account for another 25 percent, with the other 49 states accounting for 40 percent of sales and international sales making up the remaining 10 percent. Up to 70 percent of Silver Oak wines are consumed in restaurants, the company adds. “We built this brand one bottle at a time, one glass at a time, in great restaurants across the U.S.,” says Charlie Campbell, Silver Oak’s national sales director. “The connection with our restaurant accounts has been relationship-based. Here in California, we are own distributor. We don’t have a middleman. Other distributors push wine into accounts. We’ve created a model where our customers are pulling—they come in and ask.” Silver Oak’s popularity across the state, the country and the world benefits all Napa Valley vintners, says Michael Honig, president of Rutherford, Calif.-based Honig Vineyard & Winery. “Silver Oak is a brand like Ferrari or Hermès—it’s something that’s helped elevate the whole Napa Valley brand even higher,” Honig says. “They’re very well-respected in the wine world, they have an amazing market share, their sales are through the roof and every distributor would love to have them in their portfolio because it’s such a great annuity. It just sells—and that’s not always the case with wineries. They just keep truckin’ along.”

Quality control: Cellar master Joe Ramirez.

French judges awarded top honors to a pair of Napa wines, the 1973 Stag’s Leap Wine Cellars Cabernet Sauvignon and the 1973 Chateau Montelena Chardonnay, forcing wine snobs across the planet to reconsider their opinions of California vintners. Silver Oak’s own fortunes improved dramatically in 1979, when its 1974 vintage won a gold medal at the annual California State Fair Commercial Wine Competition. “That was like getting a Parker score of 100 in that day and age,” Duncan says, referring to the 50-100 point ratings scale popularized by influential U.S. wine critic Robert M. Parker Jr. “That put us on the map from a demand standpoint.” Also in 1979, Silver Oak harvested the grapes for its first Napa Valley cabernet 44

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sauvignon, and since that time, the company has produced two cabernets every year, one each from Napa Valley and Alexander Valley. Silver Oak continued acquiring additional properties across the region, including Napa’s Soda Canyon Ranch and Jump Rock along with Red Tail and Miraval Vineyards in Alexander Valley, and in 1999 launched a second brand, Twomey Cellars (named for Ray Duncan’s mother, Velma Twomey Duncan) to offer additional varietals like pinot noir, merlot and sauvignon blanc. Silver Oak now produces approximately 70,000 cases of Alexander Valley Cabernet (priced at $70 per bottle) and 28,000 cases of Napa Valley Cabernet ($110) per year, although numbers fluctuate with each vintage based on the quality and quantity

ilver Oak commemorates the release of each new cabernet with an open house at its Oakville winery. On this absolutely flawless Napa summer day, the company is unveiling its 2011 Alexander Valley vintage: For a $50 admission fee, guests enjoy bottomless glasses of cabernet as well as live music and food from local celebrity chefs Charlie Palmer and Masaharu Morimoto. The Duncans and other Silver Oak executives are on hand to field questions, pour wine and even autograph bottles for adoring fans. These Release Day events—held the first Saturday in February for the Napa Valley Cabernet and the first Saturday in August for the Alexander Valley vintage—evolved

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organically over time. “People just started showing up,” says Kathleen McLeod, Silver Oak’s senior director of marketing, hospitality and retail. “The wine was so highly sought-after that people realized if it was going to be released on that particular Saturday, they would line up overnight. We started to give them coffee and donuts, then decided that if we’ve got this captive audience of 2,000 people who want to come on this day, we need to make sure we’re providing the best possible experience.” This summer’s celebration reaches its emotional climax when members of the Duncan family—including patriarch Ray, now 85; David; and his brother Tim, Silver Oak’s executive vice president and managing partner of Twomey Cellars—award a 12-liter Balthazar bottle of Alexander Valley 1991 to Dennis Hein, an Omaha superfan marking his 50th consecutive Release Day visit. The limited-edition Balthazar, equivalent to 16 standard bottles of wine, is signed by the Duncans; its label also bears the signature of Justin Meyer, who retired in 2001 due to health problems, selling his half of Silver Oak to the Duncans for a reported $110 million. Meyer died in 2002, the same year Ray Duncan asked David, who had been named president of Duncan Oil, to relocate from Denver to Napa Valley to assume day-to-day control of Silver Oak’s operations. “When I came in with the opportunity to be

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the leader of the bunch, I really didn’t know what I was doing,” Duncan chuckles. “It ended up giving the winery the perspective of, ‘Hey, let’s try stuff. We know we have something good, but how can we make it better?’ My first couple of years here, I spent a lot of time working in the vineyards and in the cellar, and realized really quickly that it’s so far from being a recipe, and there are so many things you can tweak and things you can do.” Duncan’s leadership faced its first real test on New Year’s Day 2006, when water from the Napa River flooded Bonny’s Chai. The facility burned to the ground five weeks later, a mere 48 hours before the Release Day event launching the 2001 Napa Valley Cabernet. Silver Oak wasted no time restoring normalcy: It held the open house anyway, then began plotting its comeback. Silver Oak constructed the new Oakville winery from 550 tons of 4-inch-thick stone reclaimed from a 115-year-old dismantled flour mill in Coffeyville, Kan., elevating the property 4.5 feet above the flood plain to avoid further conflict with the Napa River. Contractors installed close to 1,500 solar panels to power the site, which touts amenities such as a tasting bar built from stacked American white oak 4-by-4s salvaged from a 182-year-old Missouri barn and a glasshouse wine library containing bottles dating back to the original 1972 vintage. Silver Oak additionally introduced a

range of updated winemaking and bottling equipment, including dozens of stainlesssteel, temperature-controlled fermentation tanks of a variety of sizes, some with each with the capacity to hold 4,500 gallons of wine. “Safety and sanitation is our primary job,” says Joe Ramirez, Silver Oak’s cellar master. “There are a lot of things that can happen with wine because it’s an organic product— microbiological things. The environment needs to be sterile. That’s why stainless steel is important.”

he improvements did not stop after the winery reopened in fall 2008. The following year, David Duncan and Daniel Baron— Silver Oak’s director of winemaking since 2001—implemented a method called “berry sensory analysis” in an effort to better pinpoint fruit maturity and guarantee that it’s harvested at peak ripeness. Berry sensory analysis employs a series of tests using sight, touch and taste to assess a grape’s softness, color, pulp, seeds and skin; each element is awarded a score from 1 (underripe) to 6 (overripe), with a score of 4 denoting optimal ripeness. During growing season, Silver Oak staffers evaluate grapes several times per week, in some cases even multiple times per day, and once their scores start coming up as 4s, harvesting begins.

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Silver Oak’s vineyards also rely on sap-flow sensor technology developed by Oakland-based startup Fruition Sciences. Sap-flow sensors—essentially cuffs attached around the vine—monitor how the vineyard responds to environmental conditions, wirelessly transmitting real-time data every 15 minutes. Fruition’s proprietary algorithms analyze and process the data, making it available to wineries through a web-based interface that lets them track parameters including vine stress (an estimate of plantwater deficit) and transpiration (the volume of water released by the plant’s leaves). “We now know the full genome of the grapevine, and we can actually see which genes are turned on and off by inducing water stress at different phases in the growth cycle of the plant,” Baron says. “We’ve developed a team of people who really believe in the scientific method and use it every day, so our knowledge base just keeps increasing.” Within the wine industry, Silver Oak’s thirst for new information and ideas is rarer than a bottle of 1934 Domaine de la Romanee Conti Richebourg. “The main obstacle we face is psychological. People are reluctant to move away from tradition, because they get intimidated by the complexity of technology,” says Thibaut Scholasch, Fruition’s co-founder and vice president of R&D, noting that only about 200 of the world’s hundreds of thousands of wineries have implemented Fruition solutions in their vineyards. “Silver Oak is on the forefront of innovation because they’re not afraid to challenge traditions.” When the accumulated data tells Silver Oak that harvest time has arrived, its vineyard crew picks between 40 and 45 tons of grapes daily, says Dave Shein, who manages the company’s Napa Valley acreage. Each team of eight begins picking around 4 a.m. to avoid peak sun hours. All grapes are harvested by hand with curved knives, one cluster at a time, and deposited into lug boxes carrying about 40 pounds of fruit. The contents of those boxes are dumped into a half-ton macro-bin and transported by tractor to the winery, where they’re sorted, destemmed and crushed. After 14 to 21 days in fermentation tanks, followed by six weeks of malolactic fermentation, the wine is siphoned away from sediment and blended, then transferred to barrels—where it spends the next 24 months— 48

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and finally bottled, where it continues to age. “We try them as year-old wines, we try them as 2-year-old wines, and we evaluate every single one of them critically, both for the winemaking decisions and for the vineyard management decisions, to help us make better decisions as we go forward,” Shein says. “Every year, it’s a fresh start, and you can apply everything you’ve learned in the previous cycles to help make the next one better. We always say we have yet to make our best bottle of wine.”

our decades on from the Judgment of Paris, California now accounts for 90 percent of all U.S. wine exports, translating to statewide winery revenue of $24.6 billion in 2014. In all, California sold 269 million cases of wine in the U.S. and overseas last year, up 3.7 percent over 2013. The state is home to more than 3,900 wineries—about 47 percent of the nationwide total—and the most desirable vineyard properties rarely change hands. When Sausal Vineyard & Winery came onto the market, the opportunity was simply too good to pass up, says David Duncan. The Alexander Valley site, owned since 1956 by the venerable Demostene winemaking family, is home to a 113-acre vineyard dominated by zinfandel vines, some dating back to 1877. “When the Demostenes started to make wine in 1972, they had the next use permit in sequential order from Silver Oak,” Duncan says. “Like Dad would say, ‘It’s the Celestine Prophecy.’ It was meant to be.” As of press time, Silver Oak is still finishing the blueprints and securing the building permits for the new winery, but Duncan is thinking big. Solar panels will power the facility, mirroring the Oakville site, but the Alexander Valley winery also will introduce a so-called “purple pipe” that will drain water used to wash fermentation tanks and other equipment into a membrane bioreactor, where the water is processed for reuse. Silver Oak additionally would like to eschew PVC in all electrical wiring, turning to materials that are not petroleum-based. Silver Oak has even identified siding for the new building: 80,000 board feet of redwood wine tanks constructed in 1932, dismantled about 15 years ago and stashed away on a Sacramento farm. “It’s all old-growth hard-

wood redwoods,” Duncan beams. “Frickin’ beautiful. Pardon my French.” The U.S. Green Building Council, a nonprofit organization that promotes sustainable building construction, has already reviewed Silver Oak’s plans and says the company aims to achieve elite platinum certification, its highest and rarest grade. The winery isn’t just good for the environment, however; it’s good for Silver Oak’s bottom line, too. “We’ve learned there’s all kinds of stuff you can apply for if you do it this way—government grants, tax credits, energy rebates,” Duncan says. “Our CFO is going nuts on this stuff. I told her ‘Get everything you can.’” Silver Oak isn’t limiting its acquisitions to land. In May the company purchased Higbee, Mo.-based A&K Cooperage, the longtime manufacturer of its 59-gallon American oak barrels, becoming the first North American winery to own and operate its cooperage. Silver Oak initially took a 50 percent stake in A&K in 2000, and the two firms jointly bought several hundred acres of Missouri oak timberland. Each acre yields approximately one barrel per year; the wood is then aged up to two years and toasted during assembly— the lighter the toasting, the more the barrels impart their natural oak flavor and tannins. Owning its cooperage increases the control Silver Oak can exert over the quality and consistency of its wine. The one thing it still can’t control is time: It takes just as long to produce a bottle of cabernet today as it did in 1972. There’s no way to accelerate the process. And that’s just fine with Silver Oak. Time is secondary. What matters most is timelessness. “There was this fad going around for 10 or 15 years around higher alcohol, and we were never able to jump on that bus because by the time it was clear that was the direction that was getting the high scores, we had five years of inventory. So we stuck to our guns,” Duncan says. “Now people are making more moderate wines, and we’re getting credit for making wines of style and personality and grace. We never stopped doing that. As a long-term product cycle, that’s a very unique thing. There’s so much urgency in our world today. That doesn’t exist in what we do. It’s very important to me to guard that, and to not get in a hurry and follow what everyone else is doing. Our customers like what we do. The only thing we’re trying to do is get better at what we’re really good at.”

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will.

Will.i.am can’t sit still. STATIONED BEHIND THE MIXING CONSOLE AT THE HEART OF ONE OF THE FOUR RECORDING STUDIOS INSIDE HIS CENTRAL HOLLYWOOD OFFICES, HE TWISTS AND TURNS IN HIS AERON CHAIR, INSISTENTLY TAPPING HIS FOOT TO A RHYTHM ONLY HE CAN HEAR. THE MUSIC IS FILLING HIS HEAD, BUT IT MUST REMAIN THERE, AT LEAST FOR A LITTLE WHILE LONGER. RIGHT NOW, THERE’S OTHER BUSINESS AT HAND.

Welcome to the world of i.am+, the technology startup at the intersection of will.i.am’s entertainment empire and entrepreneurial ambitions. The rapper, producer and DJ has straddled music and commerce throughout his career: Years before i.am+ launched in late 2012 with its foto.sosho camera accessory line for the iPhone, his multiplatinum hip-hop group Black Eyed Peas inked sponsorships with everyone from Apple to Coors to Best Buy to Honda. Along the way, will.i.am landed deals with firms like Intel—which in 2011 named him director of creative innovation—and Coca-Cola, his partner in Ekocycle, a brand devoted to sustainable goods. He’s also a founding shareholder in Beats Electronics, creators of the wildly popular Beats by Dre headphones brand. The difference this time is that will.i.am isn’t collaborating with Apple; he’s competing directly against it. The i.am+ smartband aims to 52

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challenge the Apple Watch and other wrist-worn smart devices, offering consumers voice-activated access to music, maps, messaging and other digital media services. “Apple is an amazing company,” he says. “We did commercials with ’em. Does that mean I’m not supposed to dream up a device that’s similar to something that they’re doing? I think what we’re going to build is different from what they’re going to build. And because you’re putting it on your body, I think you’re supposed to serve up options to the public. Imagine if freakin’ Gucci was like, ‘We’re not going to make shoes because Louis Vuitton makes shoes.’ Karl Lagerfeld will tell you, ‘Not only do I design for Fendi, I also design for Coco Chanel, and I also have my own line.’ The same motherfucker’s making clothes that compete with his other clothes! That shows you what the world is really like.”

B Born William Adams Jr. in 1975 in East Los Angeles, will.i.am grew up poor. In the absence of money to purchase Air Jordans and other trendy brands, he and his friends acquired “oldman suits” at thrift stores, forging their own distinctive style and sensibility. “You can follow the trend, or you can set the trend,” he says. “You set the trend by having a barometer of what young folks are doing, and the conditions of life they’re living. We would take stuff that was scraps and turn them into luxury. It wasn’t rags to riches. We turned our rags into things that rich people wanted. It’s like, ‘Oh, this is what I got? That motherfucker’s gonna want this because of how I rock it and how confident I am with it.’” Will.i.am’s music career began in summer 1987, when the eighth grader teamed with friends to form the rap group Atban Klann. Originally signed to N.W.A alum Eazy-E’s independent label Ruthless Records, Atban Klann evolved into Black Eyed Peas, which in 1998 issued its debut album, Behind the Front, for Jimmy Iovine’s Interscope Records. Will.i.am thanks Iovine for honing his entrepreneurial philosophies, in part by awarding him a vanity label, the Interscope-distributed will.i.am Music Group. Iovine is co-founder of Beats Electronics with rap legend Dr. Dre, and first approached will.i.am about investing in the company. (Will.i.am has never disclosed the financial terms of his Beats stake. In 2011, Taiwanese smartphone manufacturer HTC purchased a majority stake in the firm for a reported $300 million, and a year later Beats paid $150 million to buy back 25 percent. HTC sold back its remaining stake in 2013 for $265 million, and Apple purchased Beats last year for $3 billion.) Beyond Iovine’s influence, will.i.am credits consulting partnerships with advertising

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agencies like TBWA\Chiat\Day, Ogilvy & Mather and Young & Rubicam for shaping his branding and marketing acumen. “I didn’t know what a brand was. ‘You mean you guys got a brand bible? What the hell?! You mean everything’s thought out? Aw, hell no! Don’t tell me that!’” he recalls animatedly. “From there, Black Eyed Peas changed. I was like, ‘Dude, here’s the verbs for this album. Here’s our color scheme, and here’s the imagery that’s associated with all this stuff.’ I treated it like a company. You don’t accidentally become relevant in damn near every country on the planet.” Black Eyed Peas have sold 31 million albums and 58 million singles worldwide on the strength of bombastic earworms like “Where Is the Love?,” “My Humps,” “Boom Boom Pow” and “I Gotta Feeling,” and in 2011 the group headlined the halftime extravaganza at Super Bowl XLV. Corporate backing helped pay for increasingly grandiose music videos and tours: In 2003 Black Eyed Peas appeared in Apple’s first TV commercial spotlighting its fledgling iTunes digital music store, and in 2010 Apple rival BlackBerry sponsored the act’s live performances. BlackBerry also teamed with will.i.am on Dipdive, the online social media platform he employed to launch “Yes We Can,” the musical anthem he created to promote Barack Obama’s first presidential campaign in 2008. Dipdive quietly shut down in 2013. “A stumble is a stumble. It’s education on the run and the marathon, so you don’t stumble again,” will.i.am says. “If you keep on stumbling on the same type of mistake, then you have no business. But learning from that experience is what gave me the perspective to add to my work with Beats, which was a great success. Working there is what gave me the stance to work at Intel, and working at Intel gave me the knowledge and the courage to start my own company when we sold Beats to HTC.” It’s too soon to predict whether i.am+ will stumble or soar. The $325 foto.sosho iPhone snap-on lens was a flop, and tech media outlets voiced near-unanimous disapproval of a beta version of the smartband released in late 2014 to consumers who prepaid for the device. Chandra Rathakrishnan, i.am+ co-founder and CTO, says feedback collected during the beta trial was incorporated into the forthcoming official release, noting that this retail version will boast an overhauled user interface as well as other customer-recommended improvements. At press time, i.am+ was still determining pricing for the smartband, which is built on Aneeda, a proprietary modification of Google’s opensource Android operating system. I.am+ says the product—shaped more like a bangle than a watch to simplify taking it on or off, fostering different types of engagement scenarios—stands apart from the Apple Watch and its competitors because it is not tethered to a smartphone. “It’s a phone in itself. The key difference is it’s built to reflect a different set of use cases from that of a phone,” Rathakrishnan stresses. I.am+ is also developing a streaming music service and voice-enabled search tool; in addition, the company is making its software development kit available to selected partners interested in coding their own applications. Rathakrishnan is quick to shoot down assumptions that will.i.am is little more than a celebrity figurehead. “Will and I have worked like any two founders would work in a startup. He’s as involved as top founders at a Twitter or Facebook would be, for example. He understands exactly what he’s talking about, and he’s very involved from a strategy, product development and biz-dev perspective, to the extent where his involvement in music has lessened because of the time he spends on this.”

“A STUMBLE IS A STUMBLE. IT’S EDUCATION ON THE RUN AND THE MARATHON, SO YOU DON’T STUMBLE AGAIN …”

Will.i.am, meanwhile, doesn’t give a damn what cynics think. “Every time a new piece of technology comes out, the thing that brings it out into the world is music. Entertainment is a way to deploy amazing technology to everyone. But when you think of entertainers in business, it’s like ‘That doesn’t make sense,’” he says. “Hold on. Wait, wait, wait. Last time I checked, they always need us to sell their shit. So why is it alien for a musician to bring their own business to market? Every time I checked, you use us, and our world, to deploy new inventions or innovations to mass culture.” Regardless of how the Puls is received, will.i.am insists that he and i.am+ are in it for the long haul. And many years and many millions of dollars removed from scouring thrift stores to set trends, he still draws inspiration from the unlikeliest sources. “Palm trees is what we need to be,” he says. “What do you mean, palm trees? I am not a redwood. When that wind comes, I bend. I’m a fuckin’ palm tree. There’s not supposed to be palm trees in California, just like there’s not supposed to be rappers in tech. But we’re here, and we weather the storm.”

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Entrepreneur 360

WHAT’S YOUR TYPE? 56

ENTREPRENEUR 11/15

How does a new business achieve success? Clearly, there is no single answer—but there is some science amid the art. We’ve developed six archetypes of company leadership that embody the varieties of management style, processes and culture that are demonstrated by today’s flourishing entrepreneurs. By DAVID FREEDMAN and MATT VILLANO Illustration by STUART BRADFORD

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Entrepreneur 360

WILLINGNESS TO TAKE RISKS. RELIANCE ON DATA. EMPLOYEE RELATIONS. ABILITY AND DESIRE TO INNOVATE. These are among the factors one may consider when examining company leadership and performance. Why do some startups achieve lasting success while others become flash-inthe-pan fads or all-out failures? Every company has a unique strategy and culture. Some play things safe, staying the course for lasting (yet modest) profit; others see growth through rapid evolution in tandem with technological advances or trends, yielding major returns that may not have staying power. Some place a high level of responsi-

ENTREPRENEUR 11/15

bility and decision-making on employees at all levels; others choose to place all their faith in management. The combinations are endless. However, when considering the components of flourishing companies of all types, some commonalities emerge. Through surveys and available data, we’ve examined hundreds of small businesses and come away with six archetypal sets of practices and characteristics that we believe are representative of most growth companies operating today. The qualifications were simple: Companies had to be domestically owned, privately

held, for-profit and have shown net capacity growth over at least two years, with an employee size in 2015 of 10 to 1,000. With the help of Gary Kunkel, senior research fellow at the Business Dynamics Research Consortium at the University of Wisconsin—who examined information on businesses from BDRC’s proprietary data sets— we conducted surveys over the first nine months of 2015 with nearly 400 qualified companies. We asked highly detailed questions about market sector, management style, sales territories, target growth rates, expansion planning, processes and other business functions. We reviewed the data received to come up with our six company archetypes. We think of these archetypes as providing a 360-degree view of thriving business and thus we have dubbed this study the Entrepreneur 360. You may be surprised that representatives of some of these company archetypes can demonstrate growth. All have benefits, and all have flaws. But whether or not you find them relatable—do you recognize yourself anywhere?—they contain lessons for entrepreneurs that can be applied to nearly any industry. And all are emblematic of leaders who have the passion, talent and grit to launch and maintain a resilient business. —Carolyn Horwitz

Best Practicers PROFILE

These star companies do everything evidence-based management wisdom says they should do. They set high growth targets and are confident of hitting them. They are employee champions, staying highly attuned to staff needs and input and promoting more agile, decentralized decision-making, Key Characteristics as well as innova• Best Practicers tend • They set high tive and proactive to be in rapid-growth growth targets and action. It all industries, and are make a point of pays off: These mostly national and clearly communicatinternational in focus ing those aggressive firms report not rather than local or plans to employees, only sustained regional. They are customers, suppliers but especially also more likely to be and even the local urban-based. community. rapid growth, and almost no prob• Avoiding top-down, • They see fast command-andgrowth as a competlems in any area control management, itive edge in its own of management they emphasize emright and are driven to or performance. powering employees constantly increase WHAT WORKS Best Practicers tend to achieve everything they’re going for. They report confidence in hitting their daunting growth targets. They attract good employees, retain them and are able to ensure that they build their skills and remain fully productive. Company cash flow tends to stay strong. They’re able to time their expansions well, and they keep up with changing customer needs and potentially disruptive technologies.

WHAT DOESN’T WORK Zip. That’s right: These companies as a group report fewer problems on average than their peers across every single aspect of their businesses.

through distributed decision-making, transparency, sharing information and frequent, deep communication both up and down in the organization. • They are big on rewarding employees, by sharing profits, promoting from within and emphasizing good benefits, good quality of life and a positive work environment.

market share. • They seek to be both brand leaders and innovators, and encourage risk-taking. • They rely heavily on internal metrics and external market research. • They expand proactively, without waiting to book the orders that would necessitate it. • They give to charity for its own sake, and not just to help the company grow.

TAKEAWAY The conventional wisdom isn’t always right, but in the case of management best practices, it seems spot-on. The formula isn’t a secret: Pursue aggressive growth; lavish care and attention on employees; set up nimble and broad-based decision-making processes; embrace change and disruption; stay on top of data; and communicate with customers and suppliers.

iCracked

hen new hires are onboarded at iCracked, a repair and reselling company that specializes in both Apple and Samsung devices, trainers share the same set of mission-critical instructions multiple times: Managers don’t want to hear, “What do you want me to do next?” but instead, “Hey, can I do this?” The distinction is subtle; the former enforces hierarchies, while the latter sparks a culture of exploration, experimentation, independence and confidence. “Our hope is that this philosophy instills in our people a sense of empowerment,” says iCracked co-founder and CEO AJ Forsythe. “We believe people learn through mistakes and decision-making. True fulfillment comes through finding solutions and implementing them.” The approach certainly resonates with employees. At last count, iCracked, which is based in Redwood City, Calif., had 130 full-time employees spread over five offices on three continents—and a microscopic turnover rate. The company also employs more than 3,000 technicians, a number that continues to grow as iCracked establishes a presence in more cities around the world. Communication is another key to keeping employees satisfied. Every two weeks, Forsythe runs an all-hands-ondeck meeting during which he and other executives share big-picture strategy and implore the rank and file to share their ideas for the future. Finally, in hiring, Forsythe says iCracked looks for candidates with curiosity, ethics and drive. “You can’t teach someone to have those traits,” he explains. “But if they possess them, you can teach just about everything else.”

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Entrepreneur 360

Classics

PROFILE

UpCounsel

WHAT WORKS Because of their sales focus, Classics express confidence about continuing growth, and their sales, marketing and HR teams handle the growth in stride. They cope well with the pace of change, probably helped by the fact that they aren’t technology leaders or disruptors.

WHAT DOESN’T WORK Classics’ growth targets are lower than average. And as is common among sales-driven firms, they report problems finding, retaining, developing and getting high levels of productivity out of employees. They may also have trouble reaching management consensus.

TAKEAWAY In spite of all we hear about leading-edge management practices and disruptive companies, there is still plenty of room for more conventional companies to notch growth year after year. Markets don’t award extra points for being flashy, and success can be built around a mastery of sales.

ENTREPRENEUR 11/15

aversion, they are more likely to be reactive than proactive, expanding only when the orders are booked. • There’s no innovation in leadership here, either.

• They express relatively high confidence in growth, apparently because they are sales-focused, seek customer input in planning and work hard to communicate success to customers. Even their charitable contri-

with suppliers are not as close as with customers. • Overall, they’re not employee champions, and they avoid sharing financial and other information with staff members. However, they do solicit input from employees in business planning, mostly on the sales side. • They are more focused on local markets than most E360 companies.

By the book: UpCounsel’s Mason Blake, left, and Matt Faustman.

t figures that lawyers would do everything by the book. How else to explain UpCounsel’s success? In 2012, when Matt Faustman and Mason Blake wanted to build a company to match small and midsize businesses with experienced attorneys, they pounded the pavement to get a sense of what legal services were needed. Later, when Faustman, CEO, and Blake, CTO, needed cash to offset the costs of acquiring those new customers, they sought out venture funding from Menlo Ventures to the tune of $10 million (and $13.9 million overall). Once the approach was perfected— eliminating the traditional partner structure and reducing overhead by unifying customers on proprietary practice management software—UpCounsel was able to provide quality legal services for up to one-third the traditional cost, the San Francisco-based company says. Data has formed the foundation for each of these moves. Call Faustman conservative, prudent, almost skittish, but the former attorney says he learned early on never to make business decisions without researching each possible outcome. This has resulted in 20 percent month-over-month revenue growth in 2015, the company says. “The equation is about user acquisition and lifetime value economics,” he explains. “We know what it costs to bring customers in; we know if we can net more than that over time, we’ll be in good shape.” UpCounsel applies this same philosophy to HR, hiring “smart people,” Faustman says, and encouraging them to rely on research and data to solve problems. There’s no magic, no conversation circles for the company’s 30 employees. Just hard-nosed research and data-driven decision-making. Which is exactly how lawyers like it.

PHOTO COURTESY OF UPCOUNSEL

Classics place an emphasis on sales but glue themselves to the middle of the road when it comes to most management practices. That’s why they don’t stand out much from the crowd in terms of how well they support employees, how aggressively they Key Characteristics seek growth and how they deal with • No daredevils here. butions are seen as risk. The results Though Classics supporting customer are—surprise, are average when relations. it comes to risk surprise—average. • Their relationships

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Entrepreneur 360

Forward Thinkers Key Characteristics • Forward Thinkers tend to be in mature industries. • They lead the E360 in being driven by new production technologies and processes. • They set the highest average annual growth targets among E360 companies. • They expand proactively. • They are more likely than their peers to prioritize input from their boards of directors. • Their focus is more international than local.

Forward Thinkers surge ahead in growth and profits by being aggressive in adopting new technologies and processes, setting high targets and expanding proactively. But they can be disorganized when it comes to operations, controls and managing employees, leading to struggles with some of the basics. WHAT WORKS The big payoffs to emphasizing technology and innovation are strong growth and high margins. That high growth rate isn’t easily financed without outside funding, but Forward Thinkers seem to have little problem finding investors—which may explain why they have unusually influential boards of directors.

WHAT DOESN’T WORK Most departments in a Forward Thinker company struggle to some extent to cope with the rapid growth— and those proactive expansions sometimes turn out to be ill-timed. Forward Thinkers also report trouble with management consensus and keeping the organization focused on objectives.

TAKEAWAY It’s no surprise that technological and process innovation can rocket a company to success, particularly in mature industries that may have become sleepy. But fast, innovation-fueled growth also calls for extra attention on company components that may become stressed by the pace of change. What’s more, managers at cutting-edge firms need to be prepared to deal with what may be conflicting direction from outside investors and other stakeholders.

In step (from left): Avant founders Paul Zhang, Al Goldstein and John Sun.

PROFILE

Avant

ENTREPRENEUR 11/15

to think of it as an 80-20 rule: 80 percent of our time on the core mission but somewhere between 10 and 20 percent of our time thinking about what is going to come next.” Employees play a big part of this mission. The company holds weekly demo days and Q&A sessions; at quarterly town hall meetings, executives share financial information

with the entire team. All of this has paid off: Since the company’s debut in 2013, Avant has grown from three to 730 employees worldwide and launched operations on two continents. Sure, Goldstein and his crew like to boast about their accomplishments. But if the wins are legit, is it ever really boasting?

PHOTO BY NIC ROTH, COURTESY OF AVANT

he Matrix gets a lot of attention at Avant. Not the science-fiction movie; rather, the four-part matrix the Chicago-based marketplace lending platform has developed to codify the process through which it tackles new initiatives. Step 1 is easy: Scale. Any move the company makes has to be proportionate to complexity (that is, the more complex the move is, the larger it must be). Step 2: The move must extend the company’s brand and provide stellar customer experience. Step 3: Company leadership must understand the new initiative at its core. Step 4: The company must have the right resources to make the move worthwhile. “We embrace the notion that you can never be too focused,” explains CEO Al Goldstein, co-founder and CEO. “We like

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Entrepreneur 360

PROFILE

Dashed

Contrarians

peed. That was the driving force behind restaurant delivery service Dashed. When CEO Phil Dumontet started the Boston-based company in 2009, he wanted it to be the fastest in the industry. It has largely achieved that goal. Revenue is up 140 percent since 2011, the company says. A key factor: diversifying delivery methods, with roughly a quarter of all deliveries handled via bicycle, scooter or smart car. “We can zip around traffic, park in commercial spots and be much more nimble with our fleet,” Dumontet says, adding that proprietary mapping technology enables drivers to find the fastest routes between stops. To keep drivers engaged (deliveries can get boring by the end of an eight-hour shift), Dashed has set up a leader board that rewards drivers in each transport category for the fastest times every day. Rewards ranging from cash to medals are given out at the end of every week. Beyond implementing this incentive system, management philosophy has remained relatively unchanged since the beginning—a move by design. Even the recent rollout of driver ratings was done quietly, so it wouldn’t detract from the company’s primary mission. Says Dumontet: “We want it so when customers think about Dashed, they think about one thing and one thing only: speed and fast delivery.”

These companies thumb their noses at management best practices, from taking care of employees to proactive use of data. But unlike Key Characteristics Controllers, Contrarians seem • Contrarians rank or external market among the lowest on research. They don’t made of Teflon, most measurements listen to customers or blithely gliding over of championing suppliers, either. the bumps and pits employees, including • They are slow to promoting from within, that trip up other change, tending to sharing profits, decenbe reactive rather companies. They tralizing decisionthan proactive. keep putting up the making, supporting • They don’t keep up skills development, growth numbers, with new technologies sharing financial and they do everyand processes. information and thing their way. encouraging new ideas. • They don’t bother WHAT WORKS Contrarians’ employees have needed skills and are fully productive, and managers usually reach a consensus. They maintain good profit margins, their departments are all able to adjust to growth and they time expansions well. Growth is readily funded from cash flow.

WHAT DOESN’T WORK Nothing. Though their style is opposite that of Best Practicers, Contrarians are the only other group to be essentially problem-free.

Here is a partial list of qualified companies that completed our Entrepreneur 360 survey between January and September 2015. For the full list and details, go to Entrepreneur.com.

ENTREPRENEUR 11/15

• They don’t even bother to claim to prospective employees that opportunities and rewards are high. • When it comes to planning and decisionmaking, they don’t turn to data, operational metrics or internal

to clearly articulate a growth plan. • They are less likely than other E360 companies to be national or international in scope, or to be in a pioneering industry.

TAKEAWAY Most companies pay a substantial price for ignoring even some best practices, and it takes magic to thrive in the absence of all of those practices. What’s the magic? The success of Contrarians defies group analysis, emerging instead from whatever it is they’re doing at a micro level. Each is winning on some serendipitous combination of peculiar execution and possibly fluky conditions in their individual markets. Hey, whatever works.

Accord Engineering

Benay Enterprises

Archimedia Solutions Group

BrainStorm Tutoring & Arts

Assay Depot Atlas Home Energy Solutions Baird Group

Burns Marketing CarGurus CircleUp ContextMedia

Crowdtap

MobileX Labs

Hawkins International

Mobius Consulting

Icontrol Networks

Myriad Mobile

Intelisys

Next Jump

Syndio

WebDevelop .com

PURE Group of Insurance Companies

Synduit

WebpageFX

TerraCycle

Work Market

JAMF Software LaSalle Network

NatureBox

Spectrum Aeromed

UltraTech International

Spokeo

UniqueHR

Stellarware Corp.

Videon Central

Trepoint

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COMING ATTRACTIONS A SVELTE HD PROJECTOR LETS EVERYONE SEE THE BIG PICTURE By John Patrick Pullen

nstead of simply taking your shows on the road, the new LG PW800 ($599) lets you bring an entire home theater along. Pulling double duty as a business tool and personal device, this 1.3-pound HD projector takes up as much room in your bag as a sandwich yet shoots out vivid, larger-than-life imagery. With a Roku stick streaming the latest Transformers epic from Netflix, the PW800 crisply projected robo-battles onto a wall across the room with a 100-inch diagonal picture size—which should alleviate any fears about how well it could handle a simple PowerPoint presentation. The 800-lumen LED lamp works well in most lighting environments (low light, semi-dark and dark), and with USB, HDMI/ MHL and RGB video input, the projector can run off a flash drive, a Chromecast laptop or a computer. Even better, built-in speakers, which circle the projector’s shell, emit a surprisingly robust surround sound that’s loud enough to overpower the device’s noisy cooling fan. Bummer: The PW800 lacks a battery, which prevents it from being a true travel mate.

Photograph by Sam Kaplan

11/15 ENTREPRENEUR

CONTROL FREAK

Hack the hotel

Designers and graphic engineers, rejoice: The days of pushing around mice, trackballs and trackpads are coming to an end. Palette, a customizable tactile suite of controllers for Adobe products and other design software (starting at $199), can dial up the precision or turn multi-key shortcuts into a one-button process. Through Palette’s software, each of the controls can be programmed to your preferences, snapping together into a fully customizable control panel, much like an electric guitarist’s pedalboard of sound effects. Even those who don’t work in the creative suite will find uses for Palette’s controller systems—they can be used as shortcuts for a variety of keyboard commands, including many used in the Microsoft Office suite of programs. At last, building Excel spreadsheets can feel like a video game.

Most hotel Wi-Fi networks will block guest access to bandwidthhogging streaming video services. But if your company has a VPN (virtual private network) line, wise up and log in to that. Working like a wormhole that warps your data connection from your far-flung location to your office’s stable setup, a VPN is must-use technology for those looking to keep data secure. Don’t have a VPN? Don’t sweat it; online services like Buffered and ExpressVPN can set you up with one for a nominal fee.

Service with a Signal this past summer, Google launched its Eddystone Bluetooth beacon system for Android, joining Apple’s iOS as a major player in the short-range messaging technology and making it accessible from either Apple or Android devices, which represent 96 percent of the world’s smartphone market. Beacons— originally regarded as a way to push real-time flash sales to shoppers’ smartphones as they stroll store aisles—are having a moment: Beyond offering digital coupons, the small wireless devices can expand loyalty efforts, provide indoor heat maps of customer engagement and conduct over-the-air transactions. Big-box stores such as Home Depot and

Target love beacons, according to Steve Hegenderfer, director of developer programs at beacon marketing firm Bluetooth SIG. “The advantage these mega companies gain by installing beacons is that they seem more like a small business,” he says. “Customers walk in and get a bit of personalized service through their smartphone like they’d get at a small outfit.” But beacon tech isn’t limited to big retailers; small businesses can leverage it to out-tech the competition. “Businesses of all sizes need to make sure they’re thinking about this tech,” says Trevor Longino, head of PR and marketing for Polish startup Kontakt.io, which packages

beacon hardware and software for use by other companies. “It’s like how no one takes a company seriously if it doesn’t have a website. In 10 years’ time, if they don’t have a good beacon strategy, they’ll be thought of the same way.” So how are small businesses putting beacons to work? • HotSpot, a Fredericton, New Brunswickbased beacon-tech company, is spurring commerce at local businesses in several Canadian towns by letting the stores pay for customers’ parking. Using beacons, businesses can send

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ENTREPRENEUR 11/15

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customers messages when time on their parking meter is low, or offer time at smartphone-enabled meters. “This sort of thing allows people to stay in the store longer and shop more,” Longino says. “It turns parking into an opportunity to generate revenue for all the businesses nearby.” • The tens of thousands of fans at multiday music festivals routinely overpower the limited cellular networks at their remote locations. That’s why festivals such as Bonnaroo in Tennessee and Coachella in California use beacons as a workaround. The festivals promote a beacon-powered app called Aloompa. Once concertgoers load the app, it supplies site maps and real-time navigation, as well as event schedules and social media location-sharing capabilities. • For the past two years, NBA fans heading to the nosebleed seats in Oakland, Calif.’s Oracle Arena for a Golden State Warriors game received offers via their smartphones to pay the face-value difference for an upgrade to open seats closer to the court. Signal360, which developed the beacon system for the Warriors, has since set its sights on Major League Baseball stadiums and liveperformance theaters. —J.P.P.

ENTREPRENEUR 11/15

THE MEANING OF IT ALL A cloud-based data service makes sense of the Internet of Things By Michael Frank

or a peek at the future of the Internet of Things, check out the label on a bottle of Scotch whisky. Diageo, the global beer and spirits maker behind Guinness, Johnnie Walker and Smirnoff, is experimenting with liquor bottles featuring a proprietary smart label from Thinfilm embedded with a sensor. These sensors can tell Diageo whether a bottle has been opened. By pairing the bottle with a smartphone app, Diageo gets a flood of useful data about how frequently the customer is pouring a drink and on what days and times. It’s a heady amount of data to capture and crunch—tracking millions of bottles at a time— but a hell of an opportunity. That’s where the new Evrythng platform comes in. Rather than

invest in servers, software and developers to organize and parse those billions of bits of data flooding in from their bottle sensors, Diageo sends all its info to Evrythng’s cloud-based service, which spits out a realtime dashboard that Diageo’s marketing team can act on. “You do this, and you’re turning the nonelectronic into the electronic,” says Evrythng co-founder and CMO Andy Hobsbawm. This move to digitizing everyday products is well underway—research firm Gartner estimates that there are nearly 5 billion IoT devices in consumer and industry hands today, and that figure should jump to 25 billion by 2020. Supplying the backend engine to the IoT is New Yorkand London-based Evrythng’s raison d’être. The company

counts on the fact that IoT manufacturers want to devote their time and energy to their products, not to building out a big data department to organize information that’s collected from them. Evrythng operates a PaaS (platform as a service) model: Customers pay a license fee to sync their internet-connected products to the cloud service, in addition to a cost per thousand of unique packaged products active on the system—or, in the case of durable appliances that last for years, an annual fee per connected product. By outsourcing that data capture, a hardware manufacturer can accelerate its learning curve. “What this enables is incredibly granular insight,” says Simon Coombes, CTO of lighting-tech startup Gooee, an Evrythng customer that plugs its sensors into banks of LED systems used in commercial, industrial and office environments. “Think of a luxury retail setting, where the quality of the light can drastically affect the look of the product on display. Because we can heat-map a retail setting, we can study merchandising and proactively shift the intensity of the lights to make the product look better. We can study behavior in real time, adjust accordingly and suddenly, we’re driving sales.” Gooee’s example explains why manufacturers and marketers are salivating over the IoT revolution. That and the size of the global market helped Evrythng raise $7 million in Series A funds in 2014 from Skype co-founder Niklas Zennström’s Atomico and New York-based BHLP (with a big contribution from networking giant Cisco), London-based Dawn Capital and Samsung. The appeal is that their platform turns every IoT device into a sort of customer. “Think of us like a Salesforce.com for things,” Hobsbawm says. “Instead of managing database records about individual customers, we manage dynamic data profiles for individual products.”

PHOTO COURTESY OF THINFILM

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the fix

Wait, Don’t Go An e-tailer converts site visitors into customers By Jeff Kauflin

Before co-founding the online T-shirt and prints marketplace TeePublic in 2013, COO Adam Schwartz knew he’d have to solve a problem, one that had bedeviled every site he’d worked on before. “You’re only converting like 2 percent of your traffic into customers,” he says. “There’s a lot of meat left on the bone with the 98 percent of people who are coming and going.” He knew he needed a way to salvage lost customers and maximize conversion.

chwartz decided to give Bounce Exchange a shot at boosting his conversion rates. The New York City-based marketing technology startup uses pop-up graphics to capture users’ attention and convert them into customers. Last year TeePublic embedded a few lines of code from Bounce Exchange onto its site; this allowed the platform to monitor the e-tailer’s traffic and serve up offers and pitches based on user behavior. For example, if a user on TeePublic moves

her mouse toward the top of the page to open another browser tab, Bounce Exchange predicts that she is likely to leave the site, and it displays a prompt asking for her email address. In other cases, it will display an image inviting her to browse other categories of T-shirts she might like, based on the pages she’s already viewed. TeePublic also runs occasional sales on T-shirts, and Bounce Exchange can display a countdown timer on specific product pages, letting customers know they have a limited time before the sale ends. The Bounce Exchange design team creates the custom graphics that run on clients’ websites. Its account managers identify where users are leaving the purchase funnel, and they make ongoing suggestions for customer segmentations and interactive graphics to improve conversion. They run A/B tests to see which graphics work best, then implement the results. Schwartz appreciates the thorough approach. “A lot of software companies want to hand over software, drop it off and sort of say, ‘You figure this out.’ Bounce Exchange is getting in there with you to make it work,” he says. “I can’t think of another piece of software I use where that really happens.”

The Results

After a year of use, Bounce Exchange is bringing in an extra $40,000 per month in sales that would have otherwise been lost, Schwartz claims. For capturing email addresses from visitors who click on a TeePublic ad, the platform has a 15 to 20 percent opt-in rate, and those new sales leads have a lifetime value of $5 to $10 each. Bounce Exchange CEO Ryan Urban admits that the soup-to-nuts platform isn’t cheap; pricing starts around $4,000

per month for small businesses. Schwartz declined to reveal how much TeePublic pays for the service but says, “It pays for itself and more.” Urban claims that the ROI for small firms ranges from five to 20 times the cost of implementation, depending on prior conversion rate and industry.

personal assistant

PARDON THE INTERRUPTION: An app trains users to become master multitaskers The ceaseless pings and alerts from your smartphone don’t need to be distractions; in fact, they can be a chance to fine-tune your ability to switch mental gears quickly. At least, that’s what Mo Bitar is betting on. The Chicago-based software developer’s 99-cent iOS app Concurrency is leveraging the emerging field of interruption training. Install the app, set your interruption preferences for every 15 minutes or every hour, and the tool will spit out a mix of short math equations for you to solve throughout the day. Consider it circuit training for your brain. —Jonathan Blum

ENTREPRENEUR 11/15

Photographs by Robert Wright

Adam Schwartz of TeePublic.

ask a geek

SPRUCED TO PRODUCE

How often do I need to update or rebuild my website?

When it comes to updating your business website in a timely manner, the one rule is this: There are no rules. That’s according to Christian Riggs, president of Riggs Creative Group, a user-experience design and website development firm in San Diego. Riggs says that deciding whether to update, redesign or reengineer your site should depend entirely on your business goals, objectives and economic considerations, rather than on some superficial time frame pulled out of thin air. We asked him to explain. —Mikal E. Belicove

Why would I redesign the look and feel of my website but not rebuild it?

A variety of factors can make a redesign worth considering, but here are several that almost always require an update. You’ve got new branding and color standards, and you need to make sure your new look extends to your website. Your bounce rates are extremely high, meaning people visit but few convert; a wellthought-out redesign can turn this around. Or your business has grown, and plans call for new products and services; your site’s design may need to reflect that change. Last, your customers complain about your site, claiming that it looks outdated or doesn’t work well.

What developments might require me to reengineer my website from scratch?

A Second Opinion

Hiten Shah, founder of Kissmetrics, a San Francisco-based analytics and conversion company built to optimize marketing, believes Bounce Exchange fills an important role in e-commerce. “The knowledge around how to do e-commerce, what to do and what things to try is definitely one of the industry’s weak spots,” he says. According to Shah, Bounce Exchange’s reliance on disruptive pop-up ads to drive sales works, plain and simple. “Every single time I’ve measured users’ dissatisfaction with pop-ups in the past, I find a singledigit percentage of people who complain about the pop-ups,” he points out. “But I also find a double-digit percentage who actually sign up.” Illustration by Daniel Zalkus

The most important one is if your current site doesn’t adapt to mobile device screens. Fixing this is an absolute must in today’s mobile-driven world. Another would be if your site was originally built using Flash: Apple’s iPads and iPhones don’t support Flash. That’s reason enough to rebuild, but there’s another reason: Flash can slow your site down.

5 the stat:

Anyone in your company should be able to learn and use your content management system (CMS) to update your site. You shouldn’t have to hire a programmer to make simple changes and fixes. Along those same lines of keeping things simple: If your site takes forever to load, you need to reengineer the backend. Nobody puts up with long waits anymore.

Should I invite my customers to be part of the redesign process?

Yes! Customer opinion and feedback give you the kind of insights that convert visitors into customers. Start by asking what they think of your proposed design and if it appeals to them. Then ask about the problem they’re looking to solve and if the information they need access to is easy to find in the new design. After you relaunch the site, ask them again if they like it. If they say no, address their concerns through incremental design enhancements, which your new site should allow you to do without starting over. In short, you want to follow the lead of sites like Apple.com and Amazon.com, which rarely undergo complete facelifts. Instead, their sites evolve over time using an iterative process that results in near invisible refinements that have the bonus of maintaining the user experience that customers know and like.

Forty-seven percent of U.S. households contain at least five internet-connected devices such as smartphones, tablets, PCs and smart TVs. Twenty-four percent have more than seven devices in use. It’s a sign that instead of all things digital passing through our smartphones, we’re transitioning to a world where we want and expect to tap into a variety of platforms to perform many of the same functions (email, video, browsing, social media, shopping). Source: Ericsson Mobility Report, June 2015

11/15 ENTREPRENEUR

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ask the money guy

A PIECE OF THE ACTION

WHY WOULD AN INVESTOR WANT ROYALTIES? DOESN’T HE BELIEVE IN MY BUSINESS? By Joe Worth

Photograph by Sam Kaplan Photography

he straight answer is no, he doesn’t believe in your business. Investors are all about risk and return. The more risk they see in a situation, the more return they must have. By asking for royalties in lieu of equity, the investor is telling you that your company involves more risk than he’s willing to take. Here are four reasons an investor may choose to suggest this route. • The size of the investment is not in line with what the investor usually doles out. A royalty offer could be indicative of an outsize funding request (or the opposite).

11/15 ENTREPRENEUR

• The stage of your startup doesn’t sync with the investment strategy. The investor may concentrate on angel and seed rounds, whereas your business has moved beyond that stage to selling product. • The investor loves the product but doesn’t necessarily believe in the team behind it. Many investors will tell you they invest in people, not products or companies. • The investor sees potential for a profitable business, but not the kind of explosive, hockey-stick growth needed to justify taking an equity stake in your company. The good news is that royalty deals are fairly common, and you should be able to find general rules of thumb for many industries that will enable you to compare your offer to others. Going into the negotiations, what matters most is the strength of your intellectual property. You want a patent (multiple patents are better), one with many years left on its protection—you won’t get a good deal if your patent expires in a year. Other variables to consider: the extent of the royalty deal (units sold or time), exclusivity and uncertainty of the market. You can also negotiate a mix of upfront investment and royalties. One tip is to suggest sliding royalty rates, with the rate shrinking year by year or after certain sales targets are met. This allows investors to limit risk at the start since they get their money back faster, while you share the upside of success down the road, with the ability to keep more of the future profits for yourself. So don’t be insulted by a royalty offer. It’s an investment in your business. Keep a level head and negotiate hard. And remember that royalties will always be limited by how much profit can be made on the product. In some cases, paying royalties may be the best-case scenario for your company’s future.

your money

THINK LIKE A CFO

WHEN IT COMES TO YOUR PERSONAL FINANCES, MAKE EVERY DECISION COUNT

By Steph Wagner

hanks to many years of modeling financial statements and analyzing performance ratios, I tend to think like a CFO when it comes to my personal finances. This means I have a comprehensive understanding of the ripple effect that good or bad financial decisions will have on my net worth. One role of a CFO is to ensure profitability, despite fluctuations in revenue. This starts with the essential task of identifying the proper balance between fixed and variable costs. When managing your personal income, you must do the same. I always put at least 20 percent of my take-home pay into savings; it’s a nonnegotiable expense. To do this, I limit my fixed overhead to no more than 45 percent of my income. Allocating at least 35 percent to variable costs (food, entertainment, clothing, vacations) enables me to control my expenses and consistently meet my savings goal. It also prevents me from having to dip into my savings account if my income changes. However, it is possible to save too much. A business that allocates too much of its retained earnings toward growth is often starved for cash and forced to rely on alternative—and expensive—ways to fund its daily operations. The same can happen to you: Poor cash management will inevitably force you to rely on credit cards. Given that the average card charges 15 percent interest, this will undermine any return you’ve generated by your rigid need to save. While properly managing your income is essential to building wealth, you must also maximize the way your money works for you. I recently decided to leave California and move back to Texas. Beyond personal considerations, the move made sense from a business perspective, offering more affordable travel costs, lower taxes and a new client base. I had planned to put my California house on the market and liquidate its equity, which has nearly doubled over the past three years, and I was set on purchasing a far less expensive home in Texas with the cash. The idea of being mortgage-free was enticing. But upon further reflection, I realized that sacrificing the opportunity to leverage up a highly appreciating asset with a 3.25 percent mortgage—not to mention the potential for rental income—was not financially prudent. I decided I would be crazy to liquidate. So take a hard look at your assets (and debts) and ask yourself if you’re putting each of them to their best use. Consider how restructuring your liabilities could expand your assets. I am certain that thinking like a CFO has saved me from making costly mistakes at home. You can—and should—do the same.

Joe Worth is a partner at B2B CFO. @b2bcfo

ENTREPRENEUR 11/15

Steph Wagner is a private equity investor and financial strategist. @StephLWagner

Illustration by Ben Wiseman

startup finance

Cities of Angels

HOW TO GET STARTUP GRANTS AND SEED INVESTMENTS FROM YOUR HOMETOWN

By Michelle Goodman

fter earning an MBA from the Wharton School at the University of Pennsylvania, Ashrit Kamireddi was prepared to go wherever he had to in order to raise seed money to grow VeryApt, his apartment-review platform. But thanks to a $100,000 angel investment from Philadelphia’s StartUp PHL program, which invests in local entrepreneurs, he didn’t have to leave town. This was good news for Kamireddi, who has hired four full-time employees since raising a total of $270,000 in seed funds, and expanded his operations to 10 other cities. • Philly, which launched its $6 million startup fund in 2012, is among several major cities offering grants and seed investments for entrepreneurs. Among them, Detroit boasts two venture funds for early-stage companies, with a portfolio of nearly 80 startups; Denver awards $35,000 in annual grants to new companies.

Well-connected: Steve Boerner (left) and David Gritz of Hatch House.

How I Saved

Steve Jackson, President, Hungry Howie’s Pizza, Madison Heights, Mich.

$250,000 82

ENTREPRENEUR 11/15

So, what’s the best way to gain access to these funds? To identify opportunities, check with your city’s economic development office, incubators, accelerators, co-working spaces, networking groups and anywhere else startup founders and advisors congregate. Begin building relationships long before you’re ready to raise capital—even a year or two in advance, advises Archna Sahay, Philadelphia’s manager of entrepreneurial investment, who regularly counsels entrepreneurs about pitching Startup PHL. “The minute you realize you want to take on the investment is when you need to start having that conversation,” she says. City information sessions on startup grants and seed funds are a great place to start. Be sure to introduce yourself to key players while there. Also, set up one-on-ones with stakeholders receptive to meeting. “Don’t be shy about asking to run things by them,” says Bethlehem, Pa.-based Steve Boerner, co-founder and president of Hatch House, a 12-month live-work program for founders in or just out of college. Boerner turned to Asher Schiavone—economic development coordinator for Bethlehem, which has awarded more than $6 million in business grants to 80 local startups since 2004—who offered suggestions on everything from what to include in the application to the details of his slide deck to his pitch. That dialogue led to Boerner landing $15,000 from the city. Prepare thoroughly for these meetups so

We reduced the cost of our pizza and side-order containers by switching to new boxes that incorporate a front rollover design and use three inches less linerboard. Spread over

you can speak with authority about your venture. “You really get one chance with municipal grants,” Boerner explains. Make that chance count by understanding the fund’s motives. Municipal governments have good reasons for giving money to startups—mainly job creation and economic stimulation. Be sure your goals align with those of the investment program and that you are clear on all stipulations, advises Kamireddi, whose equity investment from Philadelphia came with the caveat that VeryApt stay local for a minimum of 18 months. To gain extra intel, Kamireddi suggests talking to entrepreneurs in the city’s investment portfolio about their experiences with the program. “Often people think it’s just about the dollars,” says Patricia Glaza, vice president and managing director at Invest Detroit, which runs the city’s community development funds. But ensuring that an investor’s agenda meshes with yours is equally important. Also key: the mentorship that comes with the funding. For Jonathan Frankel, founder of Nucleus, a wireless intercom that scored $100,000 from Startup PHL this year, having the ear of Josh Kopelman, partner at First Round Capital, the VC firm that manages and selects Startup PHL’s investments, sweetened the deal. “You want to take smart money,” Frankel says. “You want to take money that comes with good advice.”

our 600 locations, these eco-friendly boxes will reduce the amount of linerboard we use by 1,500 miles, saving us roughly $250,000 a year. —As told to Grant Davis

Illustration by Ben Wiseman

vc viewpoint

WHAT A STINKER!

VCs hear it all—but the bad ideas can be as worthwhile as the good ones By Sam Hogg

like people in any business, we in the VC world love to exchange horror stories. Ours tend to focus on absurd pitches: perpetualmotion machines, kitten sweaters and everything in between. Our cumulative experiences would rival the gag reel on Shark Tank. Despite this, we do our best to educate—not humiliate—founders. It’s our job. People invest millions with VC firms so that we’ll go out and find the next Facebook or Uber. That means taking meetings—lots of them. Conversations with entrepreneurs are the lifeblood of our business. We spend most of our time listening to far-fetched pitches, but doing so makes us better. That’s because venture capital is a numbers game, and reviewing as many ideas as possible, including the bad ones, helps us identify the ones that just may strike gold. It’s common for VCs to pass on an opportunity multiple times before investing. But with each refusal comes feedback and an understanding that the door is open to pitch us again. This may seem like an agonizing way of getting to “Yes,” but we do it in part to see how a founder responds. It’s a good indicator of coachability and a look into how an entrepreneur will deal with customers, partners and co-workers. We also take meetings because reputations matter. Entrepreneurs talk to others, and word travels fast about VC firms that aren’t friendly to work with or aren’t worth anyone’s time. Fear of missing out gives us nightmares, so we play nice and engage in any way we can. The best of us speak proactively with entrepreneurs via social media, sharing advice and insights that can elevate our firm’s profile and help future entrepreneurs learn from others’ mistakes. Surprisingly, it’s the worst pitches that can bring out our best. It would be easier for us to say, “Sorry, no deal” to a flailing entrepreneur than to dive in and help out, but we don’t do that. Because we never know if today’s failure will become tomorrow’s billion-dollar unicorn. We’ll save the laughs for the bar. Sam Hogg is a venture partner with Open Prairie Ventures and Huron River Ventures.

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wacky idea

FANTASTIC CONTRAPTIONS A RESOURCEFUL INVENTOR BRINGS HIS CREATIVE CONCEPTS TO LIFE By Jenna Schnuer

Photograph by Sam Kaplan

Entrepreneur:

Camas, Wash.-based Shane Chen was two decades into running his company, CID, when he became bored with designing electronic instruments for environmental researchers. He started toying with other inventions. Five years ago, he sold CID to devote all his time to what had been a side project called Inventist, dedicated to bringing his gadget dreams to life. continued on page 86 11/15 ENTREPRENEUR

continued from page 85

“Aha” Moment

Solowheel

Aquaskipper

Chen doesn’t see any limitations on what he can invent. Most of his creations come out of his personal life—an avid speed skater and windsurfer, he started with recreational human-transport gadgets, then moved into kitchen items, thanks to his love of cooking. “I like to come out with ideas that are completely out of the blue, completely new concepts,” he says. • His love of speed skating was the basis for one of his most popular products, the transport device Solowheel. It has one wheel between two foot rests and runs on a rechargeable battery with gyro sensors and a motor; balance is controlled by software. To steer, the rider simply leans in the direction he wishes to go. Though used mostly for fun in the U.S., the Solowheel, which goes up to 10 mph, has taken off as a “last mile” commuting tool in China and Europe—commuters get off the subway or bus and Solowheel their way to work.

Rolling Out

Chen’s creations, which span a variety of price points, are sold at inventist.com, through specialty catalogs such as Skymall and via distributors in Europe, Australia and China. Some products, Chen admits, sell far better than others, although he declines to disclose revenue. Top sellers include the Solowheel and the Hovertrax, a two-wheeled skateboard-like unit; each wheel has a motor, gyro sensor, balancing software and accelerometer. Both sell for $1,495. Other inventions include Orbitwheels, which has a separate wheel for each foot and is described as a cross between a skateboard and inline skates ($100); Aquaskipper, which allows users to “jump” on water ($495); and the Lunicycle ($149), which shortens the time it takes to learn to ride a unicycle to half an hour. • Chen predicts that his next hot item will be a kitchen tool called the Ultradrainer, for which he has already scored coveted programming on QVC. With 20 different uses—including straining, steaming and marinating—the product was a quick hit during a 10-minute test run on the shopping network, selling 15,000 units at $20 per two-piece set.

Show Off

Inventist does very little marketing, and Chen relies on third parties to do much of the selling. Chen says the company also benefits from customers who make YouTube videos that showcase his products. The videos—which often go viral—help potential users get over the fear hump that commonly accompanies new ideas. Even Edison, Chen says, had to educate people to get them to start flipping on light bulbs instead of lighting up oil lamps.

Faux Off Lunicycle

One of the most challenging aspects of the invention game, Chen says, is dealing with knockoffs. There are already more than 150 copycat versions of Solowheels, and 20 of Hovertrax. “We try to stop them, but they don’t listen,” he says. • The knockoff market has gotten so crazy, he points out, that even the granddaddy of transport gadgets, Segway, was acquired earlier this year by Ninebot, a Chinese company that got its start by copying—you guessed it—Segway.

Bright Ideas

Orbitwheels

ENTREPRENEUR 11/15

Anxious to spend more time inventing and less time on business, Chen recently began talks with some (undisclosed) major brands in hopes they’ll license his products. Indeed, at press time, he was in the process of signing a deal with Mark Cuban to license Hovertrax. He hopes Inventist’s future will allow him to be all about new ideas and less about marketing or manufacturing. • His devotion to following through on ideas is indeed impressive. “If I think the idea is going to work, I’ll do anything to make it,” he says. “The best investment you can make is in your own idea.” Illustrations by Daniel Zalkus

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who’s got vc?

WILL YOU VOUCH FOR ME?

PERSONAL ENDORSEMENTS POWER A CONSUMER LENDING NETWORK

By Brittany Shoot

rom Facebook to LinkedIn to Tinder, much of the power of social networks comes from personal recommendations. Vouch, a direct-to-consumer lending company, is taking this concept a step further, having colleagues and loved ones vouch for borrowers’ credibility. The San Francisco-based company, which calls itself the first social network for credit, launched in April and has raised $9.6 million in funding. CEO Yee Lee is an engineer and serial entrepreneur who was an early PayPal employee and co-founded fast-growing startups such as Katango, a social algorithm site acquired by Google in its first year. He says his inspiration for Vouch

came nearly 10 years ago while at PayPal, where executives were struggling to reconcile discrepancies between individuals’ actual worth and reputation vs. self-reports on their accounts. “It turns out that it’s easy to falsify one person’s data, but it’s harder to fake more than one,” Lee explains. To verify information and underwrite transactions, he realized, loan agents needed to look at an individual’s wider network. Less Facebook and more Kiva, Vouch is akin to microfinance platforms that create social networks around each borrower. The service offers one- to three-year installment loans of $500 to $15,000. Sponsors

Social loans: Yee Lee of Vouch.

ENTREPRENEUR 11/15

agree to repay a small portion of the loan if the borrower defaults; their recommendations can also increase the loan amount or lower the annual percentage rate (APR), which ranges from 5 to 30 percent. There are no application, annual or prepayment fees on Vouch loans, but there is an origination fee of 1 to 5 percent (compared to 5 percent at most major banks). Late fees are 5 percent of the payment amount with a minimum of $15; credit card companies typically charge $25. As of September, Vouch had provided more than 1,000 loans and worked with thousands of sponsors. Even Vouch’s internal workings are based on endorsement. The company recruits employees through referrals or existing relationships. Lee notes that every Vouch executive has at least 20 years of experience in finance, consumer lending or engineering. Vouch raised $3.5 million in seed money and in January closed a $6 million Series A round with investors including Core Innovation Capital, Stanford StartX Fund and IDG Ventures USA. “I think Vouch has the potential to fundamentally lower the cost of capital for all consumers,” says Alex Rosen, managing director at San Francisco-based IDG. “Vouch offers a unique consumer product that safely gives people much better rates on loans than they’ve ever had access to before.” Adding cash to the company coffers enables Vouch to continue to hire top talent and to offer “many more loan originations,” Lee promises. You might call it a different kind of network effect. Photograph by Matthew Reamer

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starting up. That often gets neglected by new companies. And when I talk about online presence, it really has to be thought of as mobile. I believe in 2015, for the first time, more searches are going to be done for local business on mobile than on desktop. Particularly in services that are location-based, having a strong mobile presence is critical.

Where did your research uncover missed opportunities for small businesses?

q&a

Local Insights

SMALL BUSINESSES CAN—AND SHOULD—TARGET CONSUMERS CLOSEST TO HOME. HERE’S HOW. By Paula Andruss

consumers plan to patronize more local businesses in the coming year—

and they’re seeking specific experiences from those companies. Those are some of the findings from a survey of more than 6,000 U.S. consumers conducted by online marketing company Yodle, headquartered in New York City. We asked Paul Bascobert, president of local at Yodle, to explain what startups can learn from the data and how they can improve the experience of local customers.

Why are consumers purposely seeking local businesses?

People want better relationships with their business providers. Local businesses don’t necessarily compete on price but on their ability to provide a certain level of service and personalized experience to their customers. It’s why customers buy, and it’s why many are using local vs. large national competitors.

How can entrepreneurs meet that expectation? If you want to differentiate 90

ENTREPRENEUR 11/15

yourself, you have to understand not just what customers want from a product or service, but how they want that product or service delivered and the kind of relationship they want to have with your company. Technology has advanced such that it’s pretty easy for people to connect with their small-business partners and, similarly, for small businesses to connect with their customers. There’s a wide range of opportunities—including online communications, social media and customer reviews— for small businesses to play

up their service, locality and personalization, as well as how important customers are to a smaller business, relative to a big company.

What mistakes do you see businesses make when trying to capture a local audience?

A big one is not providing a professional, comprehensive online experience. It’s so important to build your reputation across many different channels, directories and listings, particularly as you’re

The most significant thing I saw in our survey was the gap in reviews. Our data showed that three-quarters of people expect reviews—they have moved from something that was interesting and new a few years ago to mainstream and expected today. But while 90 percent of customers said they would be interested in providing reviews, only 7 percent have actually ever been asked. There is a market expectation that reviews will be provided, and a pretty dramatic willingness on the part of individuals to provide reviews, yet very few small businesses are taking advantage of that.

What’s the next trend in local?

Online booking, scheduling and payments seem to be the next things that are coming. Companies like Uber are setting expectations for consumers that they will be able—on a mobile device—to find a provider, look at a provider, see their reviews, transact, close the transaction, leave a rating and get a record of that transaction, all in a very seamless and easy-to-use interface. So you can expect that this expectation that’s been set by the consumer is going to find its way to other local providers. Photograph by Jesse Dittmar

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Software giant Salesforce invested in Sheri Atwoodâ&#x20AC;&#x2122;s startup, SupportPay.

Money and street cred aren’t the only reasons for startups to seek corporate investors. Besides understanding the intricacies and challenges of the market, many corporate venture arms offer support services and partnership prospects, including technical aid, mentorship, leadership and efficiency training, distribution channels, joint development opportunities and introductions to potential customers. Of course, corporate VCs have an agenda beyond the cash. Many want to keep a toe in the innovation pool, helping to shape groundbreaking products and, in some cases, acquire them. When attempting to raise corporate VC funds, it’s essential that you go in with your eyes open and target strategic investors who complement your corporate vision. Here’s how to do it.

Research their MO.

Motivations vary wildly among corporate investors. Some, like Google Ventures and Intel Capital, operate independently of their parent companies and place more emphasis on returns. Others prioritize partnering with startups over reaping financial rewards. Nashville, Tenn.-based hospital chain Hospital Corporation of America (HCA) considers itself a customer first and an investor in health-tech startups second, says Will Morrow, who manages HCA’s venture capital group. To invest in a company, “we have to at least believe that we will be a user of their product or service at a fairly significant scale,” Morrow says. Comcast’s investment arm, on the other hand, behaves more like a traditional VC firm, hoping to unearth media and tech startups that will be runaway hits four to six years down the line, according to Andrew Cleland, managing director of Comcast Ventures’ New York office. “We like to position ourselves as ‘VC plus’ because you get this additional benefit of commercial opportunity,” he adds. Some corporate venture groups invest six figures or $1 million to $2 million per deal; others routinely invest at least several million dollars per deal. Seed funds can be the hardest to raise. According to CB Insights, during the first half of 2015, seed investments comprised only 11 percent of corporate VC deals, while Series A and B contributions accounted for approximately 50 percent, and Series C contributions accounted for nearly 20 percent. 94

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Atwood won Salesforce over with her knowledge of industry pain points and ideas for how to correct them.

To understand a company’s investment approach, look at its last five deals, advises Tom Drummond, managing director of Heavybit Industries, a nine-month program in San Francisco for seed-funded companies making developer-focused products. “That will tell you both how active they are and how they pay,” says Drummond, who worked for corporate VC Reed Elsevier Ventures for almost a decade. “Are they leading the round? How big is the round overall? How many other capital partners are in there?” Boston-based 3-D printing company Voxel8 closed a $12 million Series A round this year that included an undisclosed contribution from Autodesk’s Spark Investment Fund. Voxel8 gleaned details about Autodesk’s investment philosophy from public statements CEO Carl Bass had made about 3-D printing. “We follow what he says quite a bit,” says Voxel8 co-founder Daniel Oliver. For other clues, scour the company’s financial statements for the coming year’s business priorities, suggests Asif Khan, co-founder and CEO of Caremerge, a Chicago-based

healthcare platform for seniors. Studying a company’s recent acquisitions and write-ups by industry analysts can yield additional breadcrumbs, says Khan, whose $4 million Series A round was led by health insurance provider Cambia Health Solutions and included GE Healthcare. Khan also chats up corporate product managers and VCs at trade shows and other industry events. “Usually people have their guard down at these conferences,” Khan says. “If you have a meaningful and purposeful conversation, and they understand and like your product, they will introduce you to other people.”

Prove you’ll add value.

For the sake of argument, let’s assume you’re targeting corporate VC groups that share their parent company’s strategy, as opposed to those concerned solely with financial returns. (Let’s also assume you’ve applied the standard principles of investment networking, initiating talks at least six to 12 months before you’ll need money.) To court strategic VCs, you need to

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show how your startup complements their business goals. “When you’re pitching a strategic investor, you’re actually thinking of them as a partner, customer and contributor,” says Manvi Goel, director of the Strategic Partnerships Initiative at Greentown Labs, a clean-tech incubator just outside of Boston. This means selling the goliaths on collaborating with you rather than selling them on the financial opportunity, she says. Take SupportPay. Although Salesforce Ventures doesn’t typically invest in consumer products, Atwood knew the software giant wanted to expand into the government sector but was having trouble making headway. She also knew that government child-support databases were woefully outdated, despite federal mandates calling for state government improvements. She sold Salesforce on the chance to move child-support payment tracking to the cloud and the fact that she built SupportPay using Salesforce technology. Relevant data about industry pain points

and room for improvement can help make your case. “VCs love research,” Caremerge’s Khan says. “They want to understand what’s going on in the trenches.” Soliciting feedback is also wise. “You get a different suggestion base when an entrepreneur comes in to meet with a corporate venture group than when you meet with a purely financial investor,” says Morrow, who often has HCA buyers attend pitch meetings. Just be sure to listen to the advice; insisting you know the market better than a potential customer impresses no one.

Weigh the risks.

The more corporate VC you score, the more strings may be attached. “Any entrepreneur thinking about raising money from a corporate venture fund has to make sure there are no special privileges given to the fund,” Heavybit Industries’ Drummond warns. For example, you don’t want to give corporate investors the right of first refusal. “It might negatively impact your exit opportunities,” he says.

Also be wary of granting special information rights, special voting rights or other terms that give corporate VCs preferential treatment in the marketplace. Entrepreneurs striking smaller, earlierstage deals probably won’t have to contend with these terms, according to Ranvir Gujral, co-founder and CEO of San Francisco-based visual marketing platform Chute, which raised six figures from Salesforce during its $2.7 million seed round in 2012. “It’s not reasonable if they’re putting $100,000 in a $3 million round to get information rights,” he says. “But over a certain amount, most corporate investors have to treat that investment differently. It goes on the balance sheet.” None of this means that selling to or partnering with a corporate investor’s competitors is out of the question. Just ask SundaySky co-founder and CEO Shmulik Weller. In 2013, his New York-based video-engagement company raised $20 million in Series C funding, with Comcast Ventures leading the round and taking a board seat. But this didn’t scare away

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the mass-media giant’s competitors. “It was never an issue; no one raised that concern,” Weller says. In fact, he adds, “many of Comcast’s competitors are customers of ours.”

Try partnering first.

Corporations aren’t necessarily known for their agility and quick decision-making. Nor can you expect their investment arms to maintain the same strategic direction for years on end; today’s mandate may be different tomorrow. That’s why it’s smart to build relationships over time with people from across the corporation. “You’re not just getting in bed with the VC arm,” says Karl Martin, founder and CEO of Toronto-based Nymi, which last year raised $14 million in Series A funds for its wearable authentication devices, including $2 million from three corporate VCs. “You’re getting in bed with the whole company.” Selling your product to or establishing a partnership with the business arm of a sizable corporation before taking its money is a great

way to test-drive the alliance, says Martin, whose strategic investors include MasterCard’s Start Path fund and Salesforce. It also lets you amass internal champions so that when it’s time to raise capital, you’re already vetted. Last year Nymi began working with MasterCard to develop a Canadian pilot program for secure mobile payments made by wristband, authenticated by the wearer’s heartbeat. Besides leading to an investment deal with the financial-services titan, the partnership gave Martin an inside glimpse into how the corporation operates. When Nymi pivoted from targeting consumers to targeting businesses, Martin wondered how MasterCard would respond. Happily, the credit-card colossus didn’t bat an eye. “They were fully supportive,” Martin says. “They said, ‘Your justification makes sense. We’re not going to get in the way.’ They really understood early-stage innovation.” Having the support of a corporation’s product team or other stakeholders can give future fundraising efforts a boost. Consider

Boston-based HourlyNerd, an online marketplace for consulting projects that raised $7.8 million in Series B money this year, with GE Ventures contributing. “When they thought about investing, they had readymade internal testimonials about how useful the product was,” cofounder Rob Biederman says of GE, one of HourlyNerd’s largest customers. “They were able to ask really detailed questions of their internal stakeholders and say, ‘Could you imagine using more of this?’” GE’s interest in the young company was no fluke. “It’s often the case that somebody at one of our clients will refer us to their corporate VC group,” Biederman says, adding that GE remains the startup’s only corporate VC. “The trick for us is being disciplined. The right partner can generate a tremendous amount of value, but the wrong partner can potentially be a bit of a quagmire.” Michelle Goodman is a Seattle-based journalist and author of My So-Called Freelance Life.

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Growing a

franchisor

SUPPLIES WITH R A SMILE AN OFFICE-PRODUCT E-TAILER FOCUSES ON SERVICE—AND FUN By Jason Daley

Photo illustration by Serge Bloch

emember the ’90s, when big-box retailers rampaged across the U.S., putting bookstores, clothing boutiques, electronics stores and small groceries out of business? Well, some of those mega-retailers ran out of steam: Borders Books and Music turned its last page in 2011; Barnes & Noble is teetering on the brink; Circuit City shorted out in 2009. Most recently, Office Depot bought OfficeMax, then the whole shebang was purchased in February by Staples, considerably cutting the number of players in 11/15 ENTREPRENEUR

the office-supply sector. But Darin Kraetsch, Alan Woods and Brian Curin, founders of the popular franchise brand Flip Flop Shops, were ahead of the curve. In 2012 they launched an online office-supply portal called OfficeZilla. Soon United Stationers (recently rebranded as Essendant)—a distributor with a $750 million office-supply inventory and 30 U.S. warehouses—came calling. Together they turned OfficeZilla into a franchise, one that marries new technology with good-old, pre-big-box customer service. “In a short period of time, we’ve seen a very competitive marketplace among big-box stores dwindle,” says Kraetsch, who serves as CEO. “That’s one of the things we hope to

capitalize on. We hope to disrupt the space they have left open for small and medium-size business that Staples can’t afford to service.” E-commerce leads from officezilla.com are fed to local franchisees, who follow up with businesses to help them buy the right products—from pens and folders to janitorial supplies—in the right quantities. The model has attracted 19 U.S. franchisees, with more on the way. Kraetsch set aside a few moments to tell us how OfficeZilla’s tech is taking the pain out of making supply decisions.

PHOTOGRAPH BY RAYMOND MCCREA JONES/REDUX PICTURES

Goofballs with gear (from left): Darin Kraetsch, Alan Woods and Brian Curin of OfficeZilla.

“OfficeZilla is refreshingly fun and mildly i e ere t.

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What does personal service have to do with office supplies?

A lot of times the person doing the ordering for a business is doing it for multiple locations or departments. There are a lot of lists to manage. Where the franchisee comes into play is coaching that person, helping them find the best way to organize the account and create sub-users that they can monitor. They can look at a list of invoices and point out things like a toner that is becoming hard to find and expensive, or that they’re buying file folders each month and it would be cheaper to buy them in bulk. We’re able to give small businesses the type of service they would get from Staples if they were big enough. It goes beyond just buying Uni-balls.

What kind of franchisees are you looking for?

Why franchise?

When we started OfficeZilla, we wanted to be a straight e-commerce company. When Essendant met with us, they asked if we had thought of franchising, and to be brut honest, I said I hadn’t and didn’t understand how that would be possible. They educated us on how we could use the tech side to drive business to a strong customer-service-based franchisee model.

Really, we have a bifurcated plan. W going after traditional f ls across the l g g e ffi wh l k h b b h l p f t 9 f f ep d d l d h h are challeng d h d the technology side of t Independent dealers have hightouch relationships with clients; however, they have to adapt to the changing business. We’re putting ourselves out there as a solution for them. We do our best to give them that technology support so they can do what they do best, which is develop relationships and sell products.

Can OfficeZilla do for office supplies what Flip Flop Shops did for sandals?

Y ah the office-supplies indust as never demonstrated a lot of ersonality. It has always been s mething very perfunctory. We are really focused on our brand itself. OfficeZilla is refreshingly fun and mildly irreverent. On our website, one of our slides is one of our people making out with a big roll of bubble wrap. We want to bring a little emotion to office supplies and make customers smile or roll their eyes. We want to do everything we can online to build a relationship that our franchisees can then continue.

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franchisee

Business Schooled ON-THE-JOB TRAINING SETS A YOUNG TUTOR’S CAREER IN MOTION

By Jason Daley

hen Ashley Mulcahy was earning her teaching degree at San Diego State University, she needed a little extra cash. So in 2011 she answered an ad for Tutor Doctor, an in-home education franchise. She met up with franchisee Alexandra Wilcox, and the two clicked immediately. By the end of that meeting, Mulcahy had signed up as a tutor and agreed to do administrative work as well. The job, it turned out, suited her, and over time she took on more responsibility. In fact, by the end of her first year with Tutor Doctor, Mulcahy was taking client meetings and helping parents decide the best curricula for their children. She and Wilcox won Tutor Doctor’s Rookie of the Year award and expanded from three territories to nine, covering Orange County, Calif. After Mulcahy received her bachelor’s degree, she bought the business from Wilcox. Now, at 26, Mulcahy heads an education empire that contracts with more than 100 tutors in more than 20 cities. “Running a business wasn’t what I planned or signed up for in the beginning, but there came a point where I was making a lot more money doing this than I would ever see as a teacher,” Mulcahy says. “I never thought I’d have this much control over my income.” We asked her to open the book on her success.

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Are you surprised Tutor Doctor signed off on a 22-year-old buying nine territories? I’d been going to conferences, and I was always on corporate team calls. They were used to me being involved. By the time Ali [Wilcox] was ready to move on, it was a no-brainer; they were happy to take that step with me. They really like engaged franchisees. What has made you a top-10 franchisee? For most Tutor Doctor franchisees I’ve met, this is their second career or a side business. They have their own biases and thoughts on how a

business should be run. Some people are stuck in their own mold. I came in unbiased and was willing to follow the system and embrace changes. On the flip side, I think some of the younger generation can be a little entitled. So I’ve come into this with the mindset that I have to work hard to be successful. It’s helped me take calculated risks and do things differently, and that has helped me be successful. What are some things you do differently? For one thing, all of our staff is remote; we all work virtually from home offices. We all have access to the same

resources and documents using cloud servers and apps and devices. Some franchisees have offices and all that overhead, but we’ve done away with that. Also, I think we’re more communicative on our end. We’ll send quick notes to parents by email asking how their child did on a test. Or if we know a mom is active in an autism support group, we might send her an interesting article and say we were thinking of her when we read it. Things like that. Technology really gets woven into our employee discourse and helps with client relationships.

What’s the hardest thing you’ve faced so far? One of the main things I’ve learned in business is that you can’t always please everyone, and that’s OK. It’s something I’ve struggled with. In college, you want your professors to like you, and they want to see you succeed. But in doing consultations and working with the public, you can’t always meet everyone’s needs. If you meet a family, and their child is getting an F in a subject, but they only want to sign them up for tutoring once a week, we know that won’t help. We have to set true expectations.

Photograph by Daniel Hennessy

Brian Garrison is one of many members of Mosquito Joeâ&#x20AC;&#x2122;s corporate team who served in the U.S. military.

CALL OF DUTY

Skills honed during military service transfer naturally to franchise ownership. Thatâ&#x20AC;&#x2122;s precisely why these companies are looking for a few good vets. By Jason Daley

Photographs by Terri Loewenthal

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“VETS BRING THE RIGHT SET OF EXPERIENCES AND WORK ETHIC TO OUR BUSINESS.” —Brian Garrison 106

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ranchise systems are picky. But JDog Junk Removal & Hauling might be the most selective of all. The Berwyn, Pa.-based company sells units exclusively to military veterans and their families—no exceptions—and hires as many veterans as possible to clean out, transport and repurpose customers’ junk. It’s great marketing. When a JDog crew shows up to do a job in camouflage trucks and trailers and military-style uniforms, it’s hard not to take notice. “When these guys walk into the consumer’s home, people instantly respond and say, ‘Thank you for your service,’” says Army veteran Jerry Flanagan, who began franchising the brand in 2013 and now has 21 units operating in seven states. “It makes marketing much easier because we are able to show how we are different. We’re able to penetrate new markets quickly. People really want to get behind veteran-owned and -operated businesses.” When he launched his business in 2011 in a Philadelphia suburb, he didn’t plan to employ a post-military work force, though he did hire as many veterans as he could. What he found was that employees with a military background often had better leadership skills and were more likely to follow his systems than other staffers. They showed up on time, caused few problems and took pride in their work. “I’m not really looking for entrepreneurs to be my franchisees,” Flanagan says. “I’m looking for guys who can follow orders and can look at my playbook and follow it effectively.” While JDog’s vets-only policy is unique, Flanagan is not alone in realizing that veterans have skills that make them great franchisees. In fact, over the past decade, franchise systems have made aggressive efforts to recruit military veterans, offering discounts, incentives and even free equipment to get them through the door. But it has taken time for franchise brands to fully realize the potential of the veteran community. In 1991, at the end of the first Gulf War, Don Dwyer, founder of the Dwyer Group of franchises that include Mr. Rooter and Glass Doctor, started a program called VetFran, which was a loose affiliation of franchise brands that recruited vets to help them transition to civilian life. Over the next decade and a half, the program had periods of high and low activity, but in 2007, as increasing numbers of those who’d served in Iraq and Afghanistan began transitioning out of the military, member brands ramped things up. VetFran became a program of the International Franchise Association designed to educate vets about franchising and connect them with companies offering incentives. In 2011 VetFran launched Hiring Our Heroes, a program aimed at bringing 80,000 veterans into the franchise industry; as of 2014, it had brought 203,890 former service members into the fold, including 5,608 franchisees. Today VetFran comprises nearly 700 franchise brands. “In February I visited with Budget Blinds, which waives

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“GUYS AND GALS IN THE MILITARY ARE USED TO GIVING ORDERS AND EXECUTING. THAT’S HOW FRANCHISING IS.” —Monty Heath, VetToCEO their $75,000 franchise fee for veterans,” notes George Eldridge, program manager of VetFran, who left active duty in 2012. “They were so impressed by the vets they’d worked with that they wanted more. That was nice to hear. Here’s a company making decisions not on what vets have done in the past, but what they can do now. No vet wants a handout. All the franchise brands I talk to say the same thing: They wouldn’t be doing their vet programs if there was no return on investment.” Former Navy SEAL Monty Heath is executive director of VetToCEO, a Marietta, Ga.-based nonprofit that offers free online programs for veterans exploring entrepreneurship. He believes franchising is perfectly suited to the mentality of many veterans. “These guys learn leadership and perseverance in the service. They are hard-working and mission-focused, and they complete the task in front of them no matter what,” Heath explains. “Guys and gals in the military are very much used to giving orders and executing. That’s how franchising is. They’re given a playbook and they figure out how to execute it. The military mind is set up to be in that environment. That’s what a veteran provides vs. someone who has to start from scratch learning how to run a business.” Mosquito Joe, a franchise system based in Hampton Roads, Va.,

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home to several large military installations, is investing heavily in veterans; some 15 to 20 percent of its franchisees are former service members. While the company offers a $2,500 discount on its franchise fee to veterans, COO Brian Garrison, who left the military in 2012, believes vets are attracted to the brand’s culture. Many members of Mosquito Joe’s corporate team also served in the military. “We feel vets bring the right set of experiences and work ethic to our business,” Garrison says. “Veterans coming through the pipeline look at the other vets in our system, and it resonates with them. Our team has close to 100 years of franchise support experience. We can look veterans in the eye and say, ‘We understand that you don’t have any experience in the private sector. But we can be a backstop for you as you make the transition.’” Indeed, Mosquito Joe’s culture resonated with Dennis Corrigan from the start. He grew up in a military family and spent the first 24 years of his adult life as a U.S. naval aviator. After retirement from the cockpit, he spent the next 17 years on the fringes of the Navy designing training materials for pilots and air crews. When he decided to go into business for himself, he signed on with Mosquito Joe and launched his unit in Virginia Beach, Va. “I found that because of their focus on the

military and because we have the same values, it made it much nicer to interact with them,” he says. “I was able to build relationships with corporate almost immediately based on our common work ethic.” Corrigan is paying his success forward by primarily hiring veterans and firemen on his crews, which control mosquitoes in homeowners’ backyards and in outdoor areas before events. “I have found that folks from the military have a different commitment to the job,” he says. “They understand a lot about customer service, although they may not know they’re doing it. They are really good at completing a job to the best of their ability and on time.” Jan-Pro, the 10,000-unit commercial cleaning franchise, and its recently launched residential cleaning brand Maid Right, have sought to employ former service members since 2000, when the company launched its VetConnection Program. The Alpharetta, Ga.-based company offers a 10 percent franchise-fee reduction for vets. Because of its master franchisee model, the company aims to find individuals who have experience managing large groups of people. Scott Thompson, vice president of franchise development for Jan-Pro and Maid Right, looks to match the right veteran with the right opportunity. “I probably wouldn’t give an infantryman who never managed a larger unit a master franchisee license, and I probably wouldn’t give a major who worked hard to learn leadership skills a small package,” he explains. “We try to align our opportunity to a veteran’s goals, skill set and capital.” Thompson adds that many service veterans have the advantage

of a military pension, which gives them a level of security that other prospective franchisees may lack. “That pension gives them flexibility,” he says. “They have some income already as they’re ramping up their business. In some cases, what they make from their franchise is just gravy. They can take the time to build their business up correctly.” Eric Freeman, who served in the Gulf War and now works as a Dallas policeman, started his Maid Right franchise last May. By August, he’d exceeded his personal goals by signing up more than 60 clients in his first six months. “The military made me goal-oriented and driven,” he says. “I grew up in a military family and learned discipline. I won’t sit around and wait for someone to do something for me.” Workout Anytime, an Alpharetta-based fitness franchise, reduces its $30,000 franchise fee by a third for vets. Co-founder and president John Quattrocchi says the past few years remind him of when he returned home from Vietnam after serving four years in the Air Force. “It seems like an awful lot of people are coming home from Iraq and Afghanistan and are looking for work, and we have a great need for people with the tools they’ve learned to help us expand,” he says. “When I came home in the ’60s we faced the same thing. I was able to get a job in a steel mill after college, but a lot of friends who served in Southeast Asia couldn’t find a job. I certainly have a soft spot for veterans. We should give back to anyone who serves their country.” Jason Daley is a frequent contributor to Entrepreneur.

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FRANCHISE

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ABOUT ORANGETHEORY Orangetheory Fitness is a one-of-a-kind, heartrate based, group personal training workout broken into intervals of cardiovascular and strength training, otherwise known as HIIT (high intensity interval training).

ORANGETHEORY FAST FACTS Unique business model, with minimal inventory and comprehensive franchisee support Prospective franchisees need a minimum of $150,000 in liquidity

ORANGETHEORY FITNESS: THE HOTTEST FITNESS FRANCHISE IN THE WORLD Orangetheory Fitness (www.orangetheoryftness.com), ranked as one of the best workouts today by Men’s Journal and #399 on Inc. magazine’s list of the 5,000 Fastest Growing Privately-Held Companies in the United States, is a one-of-a-kind, heart-rate based, group personal training workout broken into intervals of cardiovascular and strength training, otherwise known as HIIT (high intensity interval training). Backed by the science of excess post-exercise oxygen consumption (EPOC), Orangetheory’s heart-rate-monitored training is designed to maintain a target zone that stimulates metabolism and increases energy. Classes are led by skilled personal trainers that have participants using a variety of equipment including treadmills, rowing machines, TRX® suspension training and free weights that results in the average person burning 500 – 1,000 calories per workout. The result is the Orange Efect – more energy, visible toning, improvement of endurance, strength and power, and an extra calorie burn for up to 36 hours post-workout. Otherwise known as the Orangetheory Fitness Afterburn! Launched in 2010, Orangetheory Fitness has quickly become one of the world’s top ftness franchises, with 200 open studios (as of April 2015) in 28 states, and more than

600 franchise licenses awarded in the United States, Mexico, Canada, Australia, Colombia and the United Kingdom. “It’s incredible that in just fve years we’ve been able to muscle our way into the highly competitive ftness industry and become a leader,” said Dave Long, chief executive ofcer of Orangetheory Fitness. “It all started in 2010 with a single Fort Lauderdale studio, and we are now an international brand with demand for Orangetheory Fitness studios growing each day. Our explosive growth both domestically and internationally has been fueled by our unique workout solution and a successful franchise business model. Our concept is focused on results, and the small studio footprint allows us to open in high-trafc areas that provide our owners with a huge competitive advantage. We look forward to continued growth in existing markets and expansion into new markets in 2015.” Franchise and Area Developer Opportunities Orangetheory Fitness is currently accepting qualifed franchisees and area developers for U.S. and Master Developers for international markets. To ensure franchisees can maximize their potential as Orangetheory Fitness owners, the company’s comprehensive training and

#399 on Inc. magazine’s 5,000 fastest growing privately-held corporations in the United States and ranked on the Entrepreneur Franchise 500® More than 600 franchise licenses awarded Zero unit closures

marketing programs are focused on building and sustaining a proftable business and strong brand identity. Franchisees beneft from a robust support system that includes everything from feld training to personal trainer recruitment. The experienced leadership team provides expertise and assistance with business plan development, paperwork and infrastructure. Orangetheory Fitness provides guidance in all phases of the start-up process, plus the ongoing support needed to ensure long-term success.

FOR MORE INFORMATION Orangetheory Fitness P: (954) 530-6903 E: sales@orangetheoryftness.com W: www.otfranchise.com www.orangetheoryftness.com Learn how easy it is to get started in the travel industry!

LEGO® is a registered trademark of the LEGO® Group of companies which does not sponsor, authorize or endorse these programs.Creative Learning Corporation common shares are listed on OTCBB under the ticker symbol CLCN. © 2013 Bricks 4 Kidz

FRANCHISE

ABOUT CRUISEONE CruiseOne, a World Travel Holdings company, is the world’s largest cruise agency. Discover your love for travel and start a home-based travel business for less than $10,000.

CRUISEONE FAST FACTS 30 percent of our franchise owners are U.S. Veterans and Military spouses 20% OFF the initial franchise fee for U.S. Veterans 10% OFF the initial fee as part of our DiversityFRAN initiative Celebrating 23 years in business with 1000 Franchise Owners

DISCOVERY YOUR OPPORTUNITY IN TRAVEL CruiseOne provides the work-life balance you desire, in an industry which ofers one of the most fun and rewarding opportunities around. Franchisees are provided with extensive initial training and 24/7 ongoing education. Plus, with web-based business tools, franchise owners receive the freedom to conduct their business from anywhere in the world with an internet connection. If you have an entrepreneurial spirit and a passion for travel, this could be the opportunity for you. Full Training & Support No Experience Required Initial training takes place at CruiseOne’s state-of-the-art learning center located in its Fort Lauderdale, FL world headquarters. Plus, a dedicated support team is available six day a week via phone, email or instant chat for continuous guidance as well as 24hour technical support. Dynamic continuous learning and certiﬁcations are essential to the growth of your business and are available 24/7 in a virtual training platform. What’s more, live weekly webinars focusing on the core components of the business ensure your success. Award-Winning Marketing & Lead Generation CruiseOne spends more than $1 million a year

generating leads and brand awareness on behalf of their franchisees. You are provided with an established one-of-a -kind “Four Dimensional Marketing Plan” that includes online marketing, ofine marketing, public relations and an in-the-ﬁeld marketing and business development team to support you with your localized plan. Innovative Technology and Mobile-Friendly Websites CruiseOne provides web-based business tools that include everything you need to market, sell and service your clients. At no additional cost, all franchisees receive multiple consumer websites that are mobilefriendly and drive online bookings. Clients can book directly through your websites; reinforcing the personal touch that the client desires with the convenience they expect from a leading travel provider. Create the Work-Life Balance you Desire ruiseOne’s ﬂexible “work-from-anywhere” environment and the excitement of the travel industry appeal to just about everyone. The CruiseOne model allows you to work from home, but also gives you the option of working part-time, full-time, or working from an ofce or storefront.

No previous travel experience required – full training and support provided Less than $10,000 investment, with ﬁnancing available

Low-Cost, Low-Overhead Business CruiseOne is a less than $10,000 investment with no inventory. Top that of with CruiseOne’s flexible financing options and becoming a franchise owner is easier and more afordable than ever. Owning a CruiseOne franchise is the perfect opportunity to discover your love for travel. This road toward success is paved with minimal risk and maximized profits, so take that first step toward your future today.

FOR MORE INFORMATION CruiseOne P: (800) 822-6506 E: Recruitment@wth.com W: CruiseOneFranchise.com Learn how easy it is to get started in the travel industry!

FRANCHISE

ABOUT PAINTING WITH A TWIST Largely accountable for setting the new social standard of Paint & Sip, Painting with a Twist Studios continue to innovate and lead the category with tremendous growth potential still to come.

PAINTING WITH A TWIST FAST FACTS Ranked #1 Paint & Sip in Category (2015 & 2014) First location opened in 2007

PAINTING WITH A TWIST #1 Franchise in the Paint & Sip Category (2015 & 2014) Painting with a Twist has been ranked the #1 Paint & Sip Franchise by Entrepreneur magazine for two consecutive years. Cofounders Renee Maloney and Cathy Deano built their business upon creating a safe, creative, and friendly environment to serve customers while supporting local artists and local charities. Their original idea has resulted in one of the fastest growing franchise systems in the US and is now being duplicated throughout the country with the same passion through their robust franchise network. The concept: guests follow an art instructor and create a unique painting. No art experience is necessary! Either with BYOB or alcohollicensed studios, friends have a new favorite place to meet, socialize, and have fun together. Women-Owned Business Renee and Cathy founded Painting with a Twist, in 2007, as a way to help rebuild their Hurricane Katrina devastated community. Eight years later, their passion and commitment remains frmly planted in local communities. Their inspiring and infectious personalities can be seen in the business model: making fun, lively art with friends. The concept quickly expanded into kidsâ&#x20AC;&#x2122; classes, corporate team building, private parties and more. As the business continues to grow at a doubledigit pace, Renee and Cathy credit much of their success to empowering like-minded entrepreneurs with the opportunity to open a

business that they truly love. Today, Painting with a Twist supports more than 247 locations across the nation. Positive Community Impact Painting with a Twist believes that giving back to local and national charities and supporting the communities that they serve is essential to their longevity. Painting with a Purpose, the charitable arm of Painting with a Twist, was established in 2009, as an authentic way to show support in the communities they serve and to bring positive awareness to the franchise brand. Similar to the fundraising in New Orleans after Hurricane Katrina from the frst locations, the studios host monthly fundraiser events that beneft local charities and raise money for worthy causes. Since 2009, Painting with a Twist has donated more than $2,000,000 to non-proft organizations such as Habitat for Humanity, Humane Society and various animal shelters, Odyssey House, Young Audiences, Special Operations Warrior Foundation and Vera Bradley Foundation for Breast Cancer.Â A Solid Foundation for Long Term Success While industry-leading franchise growth is driving the company well ahead of their many competitors, the company believes that building better systems and infrastructure to support the external growth is equally as important to their longevity. Painting with a Twist Franchise partners thrive under the professional support of a 27-member home

247 locations in 31 States Women-owned Investment Range: $89,300 to $143,300 $660,952* Average 2014 Annual Gross Revenue for the Top-Third Painting with a Twist Franchisees. ofce team and they have access to over 6,000 copyrighted original art pieces for the most customer variety available in the business. To accommodate the expansion of the organization, Painting with a Twist recently expanded the Home Ofce Headquarters in Mandeville, LA, to 11,000 square feet including a new training center. Painting with a Twist is actively seeking qualifed franchise partners in most markets. Minimum fnancial requirements: $150,000 net worth, $50,000 liquid assets, excellent credit score. Painting with a Twist is a proud member of the Vet Fran Program and ofers a 20% franchise fee discount to Veterans. For more information please visit or call:

FOR MORE INFORMATION Painting with a Twist Franchising P: (985) 626-3292 E: franchising@paintingwithatwist.com Learn how easy it is to get started in the travel industry!

W: paintingwithatwist.com/franchise

* This is information taken from the 2015-2016 Painting with a Twist Disclosure Document. The group of franchisees providing the data for this fgure includes the top-third of the 78 Painting with a Twist franchisees (out of the 147 Painting with a Twist franchisees that were operating as of December 31, 2014) that were included in Item 19. Of the 26 top-third franchisees, 10, or 38.46%, achieved Annual Gross Revenue that exceeded the Average Annual Gross Revenue of $660,952. There is no assurance, however, that you will do as well.

FRANCHISE

ABOUT SPORT CLIPS Sport Clips is a strong national franchise with a proven business model, low startup costs, and no perishables. We have a semi-absentee / manager-run business model that allows you to work ON your business, not IN your business.

SPORT CLIPS FAST FACTS Franchising Since: 1995 FRANCHISE

98.3% franchise continuity rate

#1 FRANCHISE FOR VETERANS

Total Franchise Operating Units: 1,400+

500 2015

#1 Top Franchise by FranchiseGator.com

AT SPORT CLIPS, WE GET THE VET You’ve served your country. Now, you’re ready for a new mission. It’s a winning concept — a great haircut experience for men and boys in a sportsthemed environment. For over 20 years, Sport Clips Haircuts has provided great experiences for our Clients and great opportunities for our franchisees. With over 1,400 stores and adding over 150 new locations each year, Sport Clips is by far the leading men’s and boys’ haircut franchise in North America, in all 50 states and Canada. For entrepreneurs looking to build a business, Sport Clips ofers an attractive opportunity with no hair care experience required. Best of all, Sport Clips is a recession resistant business and not at the mercy of commodity prices. Sport Clips has a 20-year history of providing everything you need, from the time you consider investing in a franchise through store expansion. Sport Clips stores are run by on-site managers who are hair-care experts, giving our franchisees greater stability and ﬂexibility. A consistent and thorough store opening process is in place that includes everything from assistance with site selection and third party ﬁnancing

to marketing, grand-opening plans and stylist recruitment, along with on-going support to help you continue to grow your business. “Sport Clips has opened more than 550 locations in the past four years and has had only five store closures,” says founder and CEO Gordon Logan. “We put the success and profitability of our Team Leaders (franchisees) first, working very hard to provide superior support and training… this has resulted in impressive 7-10% same store sales growth each year, a trend we look forward to continuing.” Start-up requirements are relatively low — $100,000 liquid with $300,000 in net worth and a commitment to expand to multiple units. And Sport Clips ofers a 20 percent discount on the franchise fee for qualified veterans through the International Franchise Association’s VetFran program. It’s just one of the many ways Sport Clips says “thank you” to our active duty troops and veterans, having raised over $3 Million for the VFW Foundation through our “Help A Hero” program providing scholarships for separating U.S. service members.

Top Franchise to Buy for its investment category by Forbes magazine Top Personal Service Franchise by Entrepreneur magazine #5 Best for Vets Franchise by Military Times Top 100 Global Franchises by Franchise Direct Franchise Fee $59,500 for 3 licenses or $25,000 for single license (qualiﬁed veterans)

FOR MORE INFORMATION Sport Clips Franchise Recruitment P: 800.872.4247 ext. 1 E: Franchise.Recruitment@SportClips.com W: www.sportclipsfranchise.com Learn how easy it is to get started in the travel industry!

FRANCHISE

“AFTER MEETING IN THE ARMY, WE WANTED TO

FULFILL OUR DREAMS OF OWNING A BUSINESS.”

ABOUT CRUISE PLANNERS

- CHRIS AND SHEILA KORTE

Cruise Planners is an American Express Travel Representative, has been named a Top 10 franchise by Franchise Business Review, and is listed as a Hot Franchise for Veterans by GI Jobs.

CRUISE PLANNERS FAST FACTS

888.582.2150

CruisePlannersFranchise.com facebook.com/CruisePlannersFranchise

No previous travel experience necessary $1,000 of franchise fee military discount

SELL THE WORLD WITH CRUISE PLANNERS Cruise Planners proudly supports the

on training. Plus, Cruise Planners is an

military community year round through

American Express Travel Representative,

a program for veterans, military

which lends instant credibility to new

spouses, and active and retired military

franchise owners and offers a variety

personnel interested in combining their

of exclusive marketing programs and

passion for travel and entrepreneurial

added benefits.

Marketing kit worth up to $3,000 Benefts available to the entire military community and their spouses 6-day training in Florida focused on travel, technology, and marketing Training fee waived for business partner Home-based business, that you can keep as you move, relocate, or deploy

spirit. Cruise Planners continues to gain recognition in supporting the military

Join the 18% of Cruise Planners

community, and was named among the

franchise owners who come from a

Top 10 franchises in Franchise Business

military background in an exciting

Review’s Veterans & Franchising

opportunity that is ideal for those

Special Report.

who enjoy helping others, have a

Highest travel commissions with multiple revenue streams

passion for travel, the discipline The Military Initiative Program includes

for entrepreneurship, and a large

a marketing kit worth up to $3,000, free

networking base to help build their

FOR MORE INFORMATION

leads, an additional attendee at training,

business. With no travel industry

Cruise Planners

and franchise discounts to position

experience required and benefits for

new franchise owners for success. This

the entire military community, now is

program complements Cruise Planners’

the best time to invest in this low-cost,

back-office support, which includes

home-based franchise opportunity with

benefits such as innovative marketing,

the largest, nationally recognized, and

booking and lead generating tools,

highly awarded travel agency in

professional development, and hands-

the country.

P: (888) 582-2150 E: franchising@cruiseplanners.com W: CruisePlannersFranchise.com/military Learn how easy it is to get started in the travel industry!

PHOTO ÂŠ YASU & JUNKO/TRUNK ARCHIVE

JOINING FORCES the list

Top franchises look to make military veterans their newest recruits By Tracy Stapp Herold

11/15 ENTREPRENEUR

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ore than 5,600 veterans have become franchisees in the past four years, according to the International Franchise Association. That’s thanks in no small part to the organization’s VetFran program, through which some 650 member companies offer discounts, mentorship and training to veterans seeking to become business owners. The initiative has been a boon to the sector: Franchisors find that vets, with their leadership and teamwork skills and propensity for following a system, make ideal franchisees. On the following pages, you’ll find our list of the top 100 franchises offering incentives for veterans, listed in order of their ranking in Entrepreneur’s 2015 Franchise 500®. We’ve included details on what each company offers, as well as information on the ways these franchises are honoring veterans and active servicemembers. This list is not an endorsement of any particular franchise or veterans program. Before investing, read the company’s legal documents, consult with an attorney and an accountant and talk to knowledgeable franchisees about their experiences.

1Anytime Fitness Fitness center

2015 Franchise 500 rank: #2 Startup cost: $62.9K-$417.9K Franchise fee: $18K-$35K Total franchises/ co.-owned: 2,869/36 Incentive: 20 percent off franchise fee anytimefitness.com

Subway

Subs, salads

2015 Franchise 500 rank: #3 Startup cost: $116.6K-$263.2K Franchise fee: $15K Total franchises/ co.-owned: 43,916/0 Incentive: Franchise fee waived if opening on a military/government location; 50 percent off franchise fee if opening on nongovernment location but receiving government financing subway.com

Supercuts Hair salon

2015 Franchise 500 rank: #5 Startup cost: $113.9K-$233.8K Franchise fee: $29.5K Total franchises/ co.-owned: 1,393/1,093 Incentive: $2,500 rebate on first-store franchise fee regisfranchise.com

4 7-Eleven

Convenience store

2015 Franchise 500 rank: #10 Startup cost: $37.6K-$1.1M Franchise fee: $10K-$1M Total franchises/ co.-owned: 55,944/495 Incentive: 10 to 20 percent off franchise fee; special financing

7 Hardee’s

Burgers, chicken, biscuits

2015 Franchise 500 rank: #17 Startup cost: $1.3M-$1.9M Franchise fee: $25K-$35K Total franchises/ co.-owned: 1,894/192 Incentive: 10 percent off franchise fee

franchise.7-eleven.com

ckefranchise.com

5 Dunkin’ Donuts

8 The UPS Store

2015 Franchise 500 rank: #11 Startup cost: $217.3K-$1.6M Franchise fee: $40K-$90K Total franchises/ co.-owned: 11,460/0 Incentive: 20 percent off franchise fee for first five traditional restaurants

2015 Franchise 500 rank: #21 Startup cost: $167.8K-$353.6K Franchise fee: $29.95K Total franchises/ co.-owned: 4,862/0 Incentive: $10,000 off franchise fee; 50 percent off initial application fee

Coffee, doughnuts, baked goods

Postal, business and communications services

dunkinfranchising.com

theupsstore.com

Jan-Pro 6International Franchising

9 Cruise Planners

Commercial cleaning

2015 Franchise 500 rank: #12 Startup cost: $3.9K-$51.6K Franchise fee: $2.5K-$44K Total franchises/ co.-owned: 7,849/0 Incentive: Up to 20 percent off franchise fee jan-pro.com

Travel agency

2015 Franchise 500 rank: #22 Startup cost: $2.1K-$22.7K Franchise fee: $495-$10.5K Total franchises/ co.-owned: 2,071/1 Incentive: $1,000 off franchise fee; $500 marketing credit; free training for second person; three months of website hosting and support cruiseplannersfranchise.com

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ENTREPRENEUR 11/15

10 GNC Franchising Vitamins and nutrition products

2015 Franchise 500 rank: #23 Startup cost: $190.9K-$321.5K Franchise fee: $40K Total franchises/ co.-owned: 3,210/3,524 Incentive: 50 percent off first-store franchise fee gncfranchising.com

11 Snap-on Tools

Professional tools and equipment 2015 Franchise 500 rank: #25 Startup cost: $159.7K-$316.3K Franchise fee: $7.5K-$15K Total franchises/ co.-owned: 4,579/225 Incentive: $20,000 off startup inventory snapon.com

Vanguard 12 Cleaning Systems

Commercial cleaning

2015 Franchise 500 rank: #26 Startup cost: $10.9K-$35.8K Franchise fee: $9.6K-$35.7K Total franchises/ co.-owned: 3,109/0 Incentive: 10 percent off franchise fee vanguardcleaning.com

Liberty Tax Service

Tax preparation, electronic filing

2015 Franchise 500 rank: #28 Startup cost: $58.7K-$71.9K Franchise fee: $40K Total franchises/ co.-owned: 3,882/181 Incentive: 20 percent off franchise fee; special financing libertytaxfranchise.com

John’s 14 Papa International Pizza

2015 Franchise 500 rank: #30 Startup cost: $129.9K-$844.2K Franchise fee: to $25K Total franchises/ co.-owned: 3,993/740 Incentive: Franchise fee waived; free set of ovens; reduced royalty for four years; $3,000 foodpurchase credit papajohns.com

15 ServiceMaster Clean

Commercial/residential cleaning, disaster restoration

2015 Franchise 500 rank: #31 Startup cost: $69.6K-$261.7K Franchise fee: $31.9K-$67K Total franchises/ co.-owned: 5,021/10 Incentive: 15 percent off franchise fee

servicemasterfranchise.com

Papa Murphy’s

Take-and-bake pizza

2015 Franchise 500 rank: #32 Startup cost: $264.8K-$446.2K Franchise fee: $25K Total franchises/ co.-owned: 1,369/119 Incentive: Discounted royalty fee papamurphys.com

17 Matco Tools

Mechanics’ tools and equipment 2015 Franchise 500 rank: #33 Startup cost: $85.2K-$247.7K Franchise fee: $5K Total franchises/ co.-owned: 1,598/1 Incentive: $10,000 in inventory

Auntie Anne’s 18 Hand-Rolled Soft Pretzels Soft pretzels

2015 Franchise 500 rank: #34 Startup cost: $196.5K-$370.1K Franchise fee: $30K Total franchises/ co.-owned: 1,602/15 Incentive: $10,000 off franchise fee auntieannes.com

19 Midas International Auto repair and maintenance

2015 Franchise 500 rank: #35 Startup cost: $184.1K-$430.1K Franchise fee: $30K Total franchises/ co.-owned: 2,232/4 Incentive: Franchise fee waived midasfranchise.com

20 Sport Clips

Men’s sportstheme hair salon

2015 Franchise 500 rank: #36 Startup cost: $168.3K-$326.5K Franchise fee: $25K-$59.5K Total franchises/ co.-owned: 1,373/32 Incentive: 20 percent off franchise fee sportclipsfranchise.com

21 Great Clips Hair salon

2015 Franchise 500 rank: #37 Startup cost: $122.6K-$233K Franchise fee: $20K Total franchises/ co.-owned: 3,694/0 Incentive: $5,000 off first-store franchise fee greatclipsfranchise.com

gomatco.com

Through a program it calls Operation HeartFirst, Anytime Fitness has pledged to give at least one veteran per year a $125,000 grant and a $125,000 loan to open a gym.

22The Maids

24 Miracle-Ear

26 CleanNet USA

2015 Franchise 500 rank: #38 Startup cost: $98.6K-$126K Franchise fee: $12.5K Total franchises/ co.-owned: 1,137/60 Incentive: $4,000 off franchise fee

2015 Franchise 500 rank: #41 Startup cost: $119K-$287.5K Franchise fee: $30K Total franchises/ co.-owned: 1,259/6 Incentive: 10 percent off franchise fee

2015 Franchise 500 rank: #45 Startup cost: $9.8K-$97.95K Franchise fee: $6.1K-$83K Total franchises/ co.-owned: 2,617/14 Incentive: 5 to 10 percent off franchise fee

Residential cleaning

Hearing instruments

Commercial cleaning

maids.com

miracle-ear.com

Sculpted freshfruit bouquets

2015 Franchise 500 rank: #42 Startup cost: $211.5K-$1.6M Franchise fee: $25K Total franchises/ co.-owned: 5,201/3,255 Incentive: 10 percent off franchise fee

Edible Arrangements International

2015 Franchise 500 rank: #40 Startup cost: $192.7K-$326.4K Franchise fee: $30K Total franchises/ co.-owned: 1,202/4 Incentive: $10,000 off first-store franchise fee

stores

This y 7-Eleven held the Operation ake d contest, with q yi g erans competing for the opportunity to open a store without paying a franchise fee. Though the company initially planned on a single winner, CEO Joe DePinto— an Army veteran—decided to award the prize to all three finalists after meeting with them.

cleannetusa.com

Circle K

Convenience

circlek.com

27 Snap Fitness

28 Merry Maids

Jr. 29 Carl’s Restaurants

30 Budget Blinds

2015 Franchise 500 rank: #47 Startup cost: $109.5K-$285.6K Franchise fee: $25K Total franchises/ co.-owned: 1,316/125 Incentive: $5,000 off franchise fee

2015 Franchise 500 rank: #48 Startup cost: $60.5K-$185.9K Franchise fee: $36.5K-$50.5K Total franchises/ co.-owned: 1,495/187 Incentive: 15 percent off franchise fee

2015 Franchise 500 rank: #49 Startup cost: $1.3M-$1.9M Franchise fee: $25K-$35K Total franchises/ co.-owned: 1,257/238 Incentive: 10 percent off franchise fee

2015 Franchise 500 rank: #50 Startup cost: $89.2K-$187.1K Franchise fee: $14.95K Total franchises/ co.-owned: 1,009/0 Incentive: Franchise fee waived

carlsjrfranchising.com

budget-blinds-franchise.com

24-hour fitness center

snapfitness.com

ediblearrangements.com

Residential cleaning

merrymaids.com

Burgers

Window coverings, window film, rugs, accessories

AWARDING FRANCHISES NOW SEW FUN STUDIOS is a mobile business teaching sewing and design principles through classes, camps & parties. Our goal is to celebrate sewing as a very contemporary, relevant and creative activity for kids of all ages. With our innovative project based curriculum we hope to inspire young people to discover the joy of sewing as a lifelong skill and ongoing creative expression.

proven business model with successful 7 year track record comprehensive training program complete creative curriculum

custom software and website full marketing plan + materials

SF Franchise Company LLC

+1 904 824 3133 www.sewfunstudios.com

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ENTREPRENEUR 11/15

31 Massage Envy Spa

Therapeutic massage and facial services 2015 Franchise 500 rank: #51 Startup cost: $413.7K-$960.9K Franchise fee: $45K Total franchises/ co.-owned: 1,085/0 Incentive: $5,000 off franchise fee massageenvy.com

Car 33 Meineke Care Centers Auto repair and maintenance

2015 Franchise 500 rank: #53 Startup cost: $200.1K-$466.4K Franchise fee: $30K Total franchises/ co.-owned: 973/2 Incentive: 50 percent off royalty fees for first six months meinekefranchise.com

Fantastic Sams Hair Salons

Stone 34 Cold Creamery

2015 Franchise 500 rank: #52 Startup cost: $136.1K-$246.1K Franchise fee: $30K Total franchises/ co.-owned: 1,122/2 Incentive: 25 percent off multi-unit franchise fee

2015 Franchise 500 rank: #54 Startup cost: $261.1K-$404.5K Franchise fee: $27K Total franchises/ co.-owned: 1,224/11 Incentive: 20 percent off franchise fee

Family hair salon

fantasticsamsfranchise.com

35 Comfort Keepers Home care

2015 Franchise 500 rank: #57 Startup cost: $83.1K-$114.4K Franchise fee: $45K Total franchises/ co.-owned: 747/29 Incentive: 10 percent off franchise fee comfortkeepersfranchise.com

Coverall Firehouse 36 37 Health-Based Subs Cleaning System Commercial cleaning 2015 Franchise 500 rank: #60 Startup cost: $14.5K-$48K Franchise fee: $11.3K-$37K Total franchises/ co.-owned: 7,996/0 Incentive: 10 percent off franchise fee

Subs

2015 Franchise 500 rank: #61 Startup cost: $128.8K-$1.2M Franchise fee: $20K Total franchises/ co.-owned: 870/31 Incentive: $2,000 off first-store franchise fee firehousesubs.com

coverall.com

Ice cream, sorbet

kahalamgmt.com

Sport Clips is the primary p r of the Ageless Aviation Dreams Foundation, which honors senior veterans with flights in a Boeing Stearman biplane, used to train military aviators in the 1930s and â&#x20AC;&#x2122;40s.

Instead 38 Home Senior Care

Nonmedical senior care 2015 Franchise 500 rank: #62 Startup cost: $102.3K-$117.9K Franchise fee: $48K Total franchises/ co.-owned: 1,042/2 Incentive: 10 percent off franchise fee homeinstead.com

Chem-Dry 39 Carpet & Upholstery Cleaning Carpet, drapery and upholstery cleaning; tile and stone care

2015 Franchise 500 rank: #63 Startup cost: $11.3K-$141.5K Franchise fee: $20.5K Total franchises/ co.-owned: 3,564/0 Incentive: 10 percent off franchise fee chemdryfranchise.com

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40 Cinnabon

Cinnamon rolls, baked goods, coffee

Express 41 Employment Professionals

cinnabon.com

2015 Franchise 500 rank: #66 Startup cost: $120K-$196K Franchise fee: $35K Total franchises/ co.-owned: 725/0 Incentive: 50 percent off franchise fee

2015 Franchise 500 rank: #65 Startup cost: $180.1K-$387.5K Franchise fee: $30K Total franchises/ co.-owned: 1,245/1 Incentive: $5,000 off franchise fee

Staffing, HR solutions

expressfranchising.com

Eye Level 42 Learning Centers Supplemental education

2015 Franchise 500 rank: #68 Startup cost: $75.6K-$139.1K Franchise fee: $20K Total franchises/ co.-owned: 573/741 Incentive: 50 percent off franchise fee myeyelevel.com

43 Th g ts annua Op a Vet p e contest CruiseOne has g a y nearly $200,000 worth of franchises to veterans over the past four years.

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Wingstop Restaurants

Chicken wings

2015 Franchise 500 rank: #70 Startup cost: $192.3K-$688.4K Franchise fee: $30K Total franchises/ co.-owned: 787/19 Incentive: $15,000 off first-store franchise fee wingstop.com

Hotels 44 Sign-A-Rama 46 Choice 48 Moeâ&#x20AC;&#x2122;s International Southwest Grill Signs

2015 Franchise 500 rank: #71 Startup cost: $96.6K-$248.5K Franchise fee: $49.5K Total franchises/ co.-owned: 961/0 Incentive: 10 to 50 percent off franchise fee signaramafranchise.com

Batteries Plus Bulbs

Hotels

2015 Franchise 500 rank: #74 Startup cost: $88.1K-$13.2M Franchise fee: $10K-$60K Total franchises/ co.-owned: 6,372/0 Incentive: Development loans choicehotelsfranchise.com

Batteries, light bulbs, related products

batteriesplus.com

2015 Franchise 500 rank: #77 Startup cost: $86.2K-$240.3K Franchise fee: $3K Total franchises/ co.-owned: 844/6 Incentive: $10,000 off startup inventory

2015 Franchise 500 rank: #72 Startup cost: $215.1K-$389K Franchise fee: $37.5K Total franchises/ co.-owned: 614/46 Incentive: $10,000 off franchise fee

Mac Tools

Automotive tools and equipment

mactools.com

Southwestern food

2015 Franchise 500 rank: #78 Startup cost: $368.9K-$915.7K Franchise fee: $30K Total franchises/ co.-owned: 607/4 Incentive: $10,000 off franchise fee moes.com

49 Smoothie King Smoothies, health products

2015 Franchise 500 rank: #79 Startup cost: $181.1K-$422.95K Franchise fee: $30K Total franchises/ co.-owned: 702/22 Incentive: 20 percent off franchise fee smoothieking franchise.com

Mac Tools sells c s th the d d a rior Project logo; a percentage of the proceeds goes to the organization. Hungry 50 Howieâ&#x20AC;&#x2122;s Pizza & Subs

Pizza, subs, bread, wings, salads

51 FastSigns International Signs, graphics

2015 Franchise 500 rank: #80 Startup cost: $239.7K-$472K Franchise fee: $25K Total franchises/ co.-owned: 533/18 Incentive: 50 percent off franchise fee

2015 Franchise 500 rank: #81 Startup cost: $164.8K-$299.9K Franchise fee: $37.5K Total franchises/ co.-owned: 587/0 Incentive: 50 percent off franchise fee; 50 percent off first-year royalty and ad royalty fees

hungryhowies.com

fastsigns.com

52 Cellairis Franchise

Cell-phone and wireless-device accessories and repairs 2015 Franchise 500 rank: #82 Startup cost: $56.9K-$406.8K Franchise fee: $7.5K-$30K Total franchises/ co.-owned: 577/32 Incentive: 20 percent off franchise fee cellairis.com

Anago Cleaning Systems

54 Ritaâ&#x20AC;&#x2122;s Italian Ice Italian ice, frozen custard

2015 Franchise 500 rank: #84 Startup cost: $140.5K-$414.2K Franchise fee: $30K Total franchises/ co.-owned: 597/0 Incentive: 50 percent off franchise fee ritasice.com

Mathnasium 55 Learning Centers Math tutoring

2015 Franchise 500 rank: #83 Startup cost: $10.5K-$65.6K Franchise fee: $4.6K-$32.3K Total franchises/ co.-owned: 2,377/0 Incentive: 10 percent off franchise fee

2015 Franchise 500 rank: #86 Startup cost: $90.8K-$137.6K Franchise fee: $40K Total franchises/ co.-owned: 666/11 Incentive: 40 percent off franchise fee for active-duty military; 25 percent off franchise fee for veterans three years post discharge

anagocleaning.com

mathnasium.com

Commercial cleaning

56 Kona Ice

Shaved-ice truck

2015 Franchise 500 rank: #87 Startup cost: $114.1K-$129.4K Franchise fee: $15K Total franchises/ co.-owned: 667/10 Incentive: 10 percent off franchise fee kona-ice.com

57 Molly Maid Residential cleaning

2015 Franchise 500 rank: #88 Startup cost: $85.8K-$131.3K Franchise fee: $14.9K Total franchises/ co.-owned: 647/0 Incentive: $6,000 off franchise fee mollymaid.com

58 Proforma

Printing and promotional products

2015 Franchise 500 rank: #89 Startup cost: $4.7K-$50.2K Franchise fee: to $29.5K Total franchises/ co.-owned: 702/0 Incentive: Franchise fee waived; customized marketing kit onlyproforma.com

59 Weed Man Lawn care

2015 Franchise 500 rank: #91 Startup cost: $68.5K-$85.5K Franchise fee: $20K-$33.8K Total franchises/ co.-owned: 563/0 Incentive: 25 percent off franchise fee weedmanfranchise.com

11/15 ENTREPRENEUR

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60 Marco’s Franchising

63 CertaPro Painters Ltd.

66 Rent-A-Center 69 Menchie’s

2015 Franchise 500 rank: #95 Startup cost: $207.8K-$530.8K Franchise fee: $25K Total franchises/ co.-owned: 600/0 Incentive: $5,000 off franchise fee

2015 Franchise 500 rank: #106 Startup cost: $355.4K-$582.2K Franchise fee: $35K Total franchises/ co.-owned: 109/2,764 Incentive: $5,000 off franchise fee

marcosfranchising.com

2015 Franchise 500 rank: #101 Startup cost: $129K-$161.5K Franchise fee: $52.5K Total franchises/ co.-owned: 472/0 Incentive: 10 percent off franchise fee; preferred in-house financing

Pop-A-Lock 61 Franchise System

Pizza, subs, wings, cheese bread

Mobile locksmith and security services

Residential and commercial painting

ownacertapro.com

Legoengineering classes, camps, parties

2015 Franchise 500 rank: #96 Startup cost: $100.4K-$135K Franchise fee: $15.5K Total franchises/ co.-owned: 511/3 Incentive: 10 percent off franchise fee; special training program popalock.com/franchising.php

62 Cartridge World

Bricks 4 Kidz

2015 Franchise 500 rank: #102 Startup cost: $33.8K-$51.1K Franchise fee: $25.9K Total franchises/ co.-owned: 649/1 Incentive: 10 percent off franchise fee bricks4kidz.com

Ink and toner cartridges, printers, printer services and supplies 2015 Franchise 500 rank: #97 Startup cost: $68.8K-$150.8K Franchise fee: $50K Total franchises/ co.-owned: 1,063/0 Incentive: 10 percent off franchise fee

Goddard Systems

Preschool/educational child care 2015 Franchise 500 rank: #105 Startup cost: $704.7K-$880K Franchise fee: $135K Total franchises/ co.-owned: 428/0 Incentive: $20,000 off franchise fee

Rent-to-own furniture, electronics, computers, appliances

rentacenterfranchising.com

Pillar 67 To Post Home Inspectors Home inspections

2015 Franchise 500 rank: #109 Startup cost: $33.2K-$42.6K Franchise fee: $17.9K Total franchises/ co.-owned: 463/0 Incentive: 10 percent off franchise fee pillartopost.com

Carvel

Ice cream, ice-cream cakes

2015 Franchise 500 rank: #110 Startup cost: $249.3K-$381.1K Franchise fee: $30K Total franchises/ co.-owned: 445/0 Incentive: $10,000 off franchise fee carvel.com

goddardschoolfranchise.com

cartridgeworld.com

BUDGET BLINDS OFFERS A SOFT LANDING FOR TRANSITIONING VETERANS

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ENTREPRENEUR 11/15

menchies.com

Home Helpers/ Direct Link

Medical/nonmedical personal care

2015 Franchise 500 rank: #112 Startup cost: $65.8K-$106K Franchise fee: $44.9K Total franchises/ co.-owned: 628/0 Incentive: $2,000 off franchise fee homehelpershomecare.com

71 Novus Glass

Auto glass repair and replacement

2015 Franchise 500 rank: #113 Startup cost: $46.8K-$229.5K Franchise fee: $14.99K Total franchises/ co.-owned: 1,627/17 Incentive: $3,000 off franchise fee novusfranchising.com

72American 75 Pita Pit Leak Detection Concealed water, gas and sewer leakdetection

2015 Franchise 500 rank: #115 Startup cost: $76.8K-$259.6K Franchise fee: $29.5K-$120K Total franchises/ co.-owned: 365/28 Incentive: $5,000 off franchise fee americanleakdetection.com

Club Z! In-Home Tutoring Services

In-home tutoring

2015 Franchise 500 rank: #116 Startup cost: $32.6K-$56.6K Franchise fee: $19.8K-$39.8K Total franchises/ co.-owned: 390/0 Incentive: 10 percent off franchise fee clubztutoring.com

Cost Cutters Family Hair Care

Family hair salon

2015 Franchise 500 rank: #118 Startup cost: $88.5K-$182.1K Franchise fee: $29.5K Total franchises/ co.-owned: 394/268 Incentive: $2,500 rebate on first-store franchise fee

Pita sandwiches

2015 Franchise 500 rank: #123 Startup cost: $187.5K-$314.98K Franchise fee: $25K Total franchises/ co.-owned: 489/14 Incentive: 20 percent off franchise fee pitapitusa.com

AAMCO 76 Transmissions and Total Car Care Transmission repair and car care

2015 Franchise 500 rank: #124 Startup cost: $227.4K-$333K Franchise fee: $39.5K Total franchises/ co.-owned: 671/0 Incentive: $8,000 off franchise fee aamcofranchises.com

77 N-Hance

Wood floor and cabinet refinishing 2015 Franchise 500 rank: #125 Startup cost: $24.3K-$131.98K Franchise fee: $15K-$53.1K Total franchises/ co.-owned: 380/0 Incentive: 10 percent off franchise-fee down payment nhancefranchise.com

regisfranchise.com

BROTHERS IN ARMS In 2013 Home Franchise Concepts, parent company of Budget Blinds, Tailored Living and Concrete Craft, announced its Million Dollar Franchise Event, a push to offer $1 million to military veterans in the form of $35,000 discounts on franchise and territory fees. The goal was met this year, with 30 veterans becoming franchisees. One of them is Cedric Cook, a Marine Corps vet who

Self-serve frozen yogurt 2015 Franchise 500 rank: #111 Startup cost: $218.3K-$385.2K Franchise fee: $40K Total franchises/ co.-owned: 495/1 Incentive: $10,000 off franchise fee

opened his Fulshear, Texas, unit last November. While Cook was training, Budget Blinds was already working out its next initiative: Troops in Transition, offering a bigger discount—nearly $75,000—to veterans who have left the military in the past two years or active service members planning to leave in the next two. Curious as to how the program would be received, COO Todd Jackson asked Cook for

feedback. “He got teary-eyed and said, ‘I can’t believe you guys are doing this. I want to help,’” Jackson says. Cook has long had a heart for helping fellow vets, offering advice, mentoring and serving as an advisor for American Corporate Partners. “It’s tough coming off of active duty,” he says. “Somebody who’s gone through it can give them a listening ear and offer perspective.” Budget Blinds enlisted Cook to develop a mentorship program for those joining the system through the new initiative. One such franchisee is his

brother, Army veteran Tharon Cook, who opened a Budget Blinds in July in Newport News, Va. Through Troops in Transition, Tharon received a six-month franchise agreement, to be renewed for 10 years if he meets company-set sales goals. Cook’s advice for his brother and other Troops in Transition franchisees? “Be true to yourself. If you’ve gone through military training and succeeded there, you know you can succeed at this. And remember that you’ve got people out there batting for you.” —T.S.H.

78 Right at Home 80 Del Taco

82 Griswold Home Care

84 EmbroidMe

2015 Franchise 500 rank: #126 Startup cost: $78.2K-$131.7K Franchise fee: $47.5K Total franchises/ co.-owned: 476/1 Incentive: 10 percent off franchise fee

2015 Franchise 500 rank: #136 Startup cost: $847.7K-$1.8M Franchise fee: $35K Total franchises/ co.-owned: 243/304 Incentive: 50 percent off franchise fee; reduced royalty fee for two years

2015 Franchise 500 rank: #138 Startup cost: $98.5K-$121.2K Franchise fee: $49.5K-$54.5K Total franchises/ co.-owned: 208/11 Incentive: 5 percent off first-territory franchise fee

2015 Franchise 500 rank: #143 Startup cost: $93.7K-$246.5K Franchise fee: $49.5K Total franchises/ co.-owned: 460/0 Incentive: 10 percent off franchise fee

deltaco.com

griswoldhomecare.com

discoverembroidme.com

81 Coffee News

83 Schlotzsky’s Sandwiches, pizza, salads

Great 85 American Cookies

schlotzskys.com

2015 Franchise 500 rank: #145 Startup cost: $183.2K-$316.7K Franchise fee: $35K Total franchises/ co.-owned: 344/0 Incentive: 25 percent off first-store franchise fee

Home care, medical staffing

rightathomefranchise.com

HomeVestors of America

Home buying, repair and selling

2015 Franchise 500 rank: #127 Startup cost: $42K-$347.3K Franchise fee: $16K-$55K Total franchises/ co.-owned: 587/0 Incentive: $1,500 to $5,000 off franchise fee homevestors.com

Mexican/ American food

Weekly newspaper distributed at restaurants

2015 Franchise 500 rank: #137 Startup cost: $9.3K-$10.3K Franchise fee: $6K Total franchises/ co.-owned: 785/5 Incentive: Three-year zero percent financing for second through fifth units

Burgers, fries

Startup cost: $155.4K-$1.3M Franchise fee: $30K Total franchises/ co.-owned: 472/335 Incentive: Franchise fee waived checkersfranchising.com

CiCi’s Pizza

All-you-can-eat pizza buffet

Startup cost: $488.7K-$757.98K Franchise fee: $15K-30K Total franchises/ co.-owned: 409/36 Incentive: Franchise fee waived cicispizza.com

Duct Doctor USA

Residential and commercial air-duct cleaning

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ENTREPRENEUR 11/15

2015 Franchise 500 rank: #141 Startup cost: $503.8K-$786.98K Franchise fee: $30K Total franchises/ co.-owned: 312/38 Incentive: $10,000 off franchise fee

coffeenews.com

g g E p Franchise 500® to make our list, but they earn an honorable mention for waiving their franchise fees for vets. Checkers and Rally’s Restaurants

Nonmedical home care

Startup cost: $41K-$136.5K Franchise fee: $25K Total franchises/ co.-owned: 26/0 Incentive: 10 percent off franchise fee; franchise fee waived for wounded warriors. ductdoctor.com

Flippin’ Pizza Pizza, salads

Startup cost: $221.3K-$398.3K Franchise fee: $25K Total franchises/ co.-owned: 18/2 Incentive: First-store franchise fee waived flippinpizza.com

Jet-Black Franchise Group

Asphalt maintenance Startup cost: $42.5K-$104.3K Franchise fee: $7.5K-$10K

Total franchises/ co.-owned: 87/10 Incentive: 50 percent off franchisee fee; franchise fee waived for second territory jet-black.com

KidzArt

Art-education programs, products and services

Startup cost: $46.1K-$52.8K Franchise fee: $39.9K Total franchises/ co.-owned: 86/0 Incentive: Franchise fee waived for first 10 veterans to join system; 10 percent off franchise fee thereafter kidzart.com

Valpak Direct Marketing Systems Direct-mail and digital advertising Startup cost: $82.2K-$200.8K Franchise fee: $15K-17.5K Total franchises/ co.-owned: 162/5

Embroidery, screen printing, promotional products

greatamericancookies.com

Incentive: Franchise and training fees waived; territory fee waived for dormant territories valpakfranchising.com

You’ve Got Maids

Environmentally friendly residential cleaning

Startup cost: $34.9K-$108.9K Franchise fee: $6.99K Total franchises/ co.-owned: 48/0 Incentive: 10 percent off protected territory fee; franchise fee waived on additional franchises youvegotmaids.com

Ziebart

Auto appearance and protection services Startup cost: $172K-$331K Franchise fee: $30K Total franchises/ co.-owned: 363/12 Incentive: Franchise fee waived ziebart.com

LEADERS LEAD. FOLLOWERS FOLLOW. YOU CAN’T DO BOTH. Acknowledging the great irony that most of today’s aspiring entrepreneurs are following the crowd instead of doing what innovative leaders like Richard Branson, Mark Zuckerberg, and Elon Musk did to become successful, Steve Tobak delivers some truth:

Nobody ever made it big by doing what everyone else is doing.

BUY THE BOOK #RealLeaders

@SteveTobak SteveTobak entm.ag/RealLeaders

Pop-A-Lock offers s techt i gd unts for franchisees who hire returning military members.

86Steamatic

Insurance/ disaster restoration, cleaning, mold remediation

2015 Franchise 500 rank: #146 Startup cost: $112.5K-$168.7K Franchise fee: $15K-$40K Total franchises/ co.-owned: 361/0 Incentive: 25 percent off franchise fee steamatic.com

87 Lawn Doctor

Lawn, tree and shrub care; mosquito and tick control

2015 Franchise 500 rank: #147 Startup cost: $81.5K-$99.99K Franchise fee: $30K Total franchises/ co.-owned: 508/0 Incentive: $15,000 off franchise fee

lawndoctorfranchise.com

Property 88 Real Management Property management

2015 Franchise 500 rank: #148 Startup cost: $56.6K-$99.9K Franchise fee: $20K-$40K Total franchises/ co.-owned: 272/0 Incentive: 10 percent off franchise fee realpropertymgt.com

Birds 89 Wild Unlimited

Bird-feeding supplies and nature gift items 2015 Franchise 500 rank: #149 Startup cost: $123.3K-$192.1K Franchise fee: $25K Total franchises/ co.-owned: 288/0 Incentive: 15 percent off franchise fee wbu.com

YOUR PROFIT POTENTIAL

90 CruiseOne

Travel agency

2015 Franchise 500 rank: #150 Startup cost: $3.2K-$21.9K Franchise fee: $495-$9.8K Total franchises/ co.-owned: 1,000/0 Incentive: 20 to 40 percent off franchise fee; training fee waived for first veteran/military spouse associate, reduced by 50 percent for additional veteran/military spouse associates cruiseonefranchise.com

Fish Window Cleaning Services

CRAFT BEER | GOOD FOOD | SIMPLE OPERATIONS • Craft Beer: America’s fastest growing new industry. • Great for semi-absentee owners or multi-unit operators. • Leading Franchise System in “Microbrew Pubs” hospitality category. • JOIN THE TEAM! It’s fun, rewarding and high profit.

Taste Freedom! Contact:

720.465.6670 Franchise@GrowlerUSA.com

www.GrowlerUSA.com

Window cleaning

2015 Franchise 500 rank: #154 Startup cost: $78.2K-$139.7K Franchise fee: $30.9K-$54.9K Total franchises/ co.-owned: 305/1 Incentive: 10 percent off franchise fee fishwindowcleaning.com

92 U.S. Lawns Commercial grounds care

2015 Franchise 500 rank: #155 Startup cost: $32.8K-$79.3K Franchise fee: $22K-$32K Total franchises/ co.-owned: 267/0 Incentive: $5,000 off franchise fee; special financing uslawns.com

ACTIVE DUTY SERVICE MEMBERS AND US VETERANS

JOIN THE #1 REVENUE PRODUCING TUTORING FRANCHISE 50% OFF THE INITIAL FEE FOR ACTIVE DUTY AND US MILITARY VETERANS • Low initial investment of under $100k • Franchisees earn 61% more revenue than the closest competitor* • No previous education experience required Veterans excel at Huntington because of their expertise implementing systems—investing in Huntington means investing in a system with 38 years of success. Additionally, veterans value businesses that are not only ﬁnancially rewarding, but also make a diﬀerence in their community.

Call 1-800-653-8400

“As a business, if you follow the Huntington system and put in the time, your center will be highly profitable. The greatest satisfaction to me as a franchise owner is knowing that my destiny is in my hands— Huntington provides you with the support and tools you need, and the execution and the ﬁnancial gains are controlled by you.” Shawn Livingston, US Army Veteran & Huntington multi-unit owner

Personalized Attention. Proven Results.

HuntingtonFranchise.com *Data are for all franchise centers open in 2014, except for Kumon, which is for centers open for three or more years. Huntington, Sylvan, and Mathnasium revenues are as reported in Item 19 of their Franchise Disclosure Documents (FDD). We estimated ClubZ! from its FDD-reported ﬁnancial statement as total franchisor revenue, less purchase of trademarked material and software fees, divided by the average royalty rate, then divided by number of franchise centers. We estimated Kumon revenue using data from its FDD Item 19 and a survey of its centers as average center enrollment multiplied by an average monthly enrollment charge of $120, plus registration fees of $50 and materials fees of $30 for half of its enrollments. We also evaluated Eye Level, Grade Power, and JEI, but could not estimate their revenue. The criteria for owning a Huntington franchise if you are a US Veteran or Active Duty Service Member are the same as those for any prospective franchisee—Net worth of $150K, Liquid Capital of $60K and a 4 year college degree. This oﬀer is good through 2015.

11/15 ENTREPRENEUR

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93 Tutor Doctor Tutoring

2015 Franchise 500 rank: #156 Startup cost: $62.5K-$100.7K Franchise fee: $39.7K-$54.7K Total franchises/ co.-owned: 429/0 Incentive: $5,000 off franchise fees of $44,700-plus

tutordoctoropportunity.com

Big O Tires

Tires, tire services, auto products 2015 Franchise 500 rank: #158 Startup cost: $258.2K-$1.2M Franchise fee: $30K Total franchises/ co.-owned: 381/12 Incentive: Franchise fee waived bigofranchise.com

McAlister’s Deli

Sandwiches, salads, baked potatoes 2015 Franchise 500 rank: #161 Startup cost: $579K-$1.5M Franchise fee: $35K Total franchises/ co.-owned: 281/46 Incentive: $5,000 off franchise fee

mcalistersdelifranchise.com

Which Wich 96 Superior Sandwiches Sandwiches

2015 Franchise 500 rank: #162 Startup cost: $195K-$488.8K Franchise fee: $30K Total franchises/ co.-owned: 293/4 Incentive: $10,000 off first-store franchise fee whichwich.com

Two Men 97 and a Truck International Moving services

2015 Franchise 500 rank: #164 Startup cost: $178K-$555.5K Franchise fee: $50K Total franchises/ co.-owned: 281/2 Incentive: 10 percent off franchise fee

Get More Out Of Life! Join the Home Inspection Leader Are you ready to improve your quality of life and run your own business in a thriving industry? At Pillar To Post, your success is our number one goal.

twomenandatruck franchising.com

• Great Work-Life Balance • Flexible Scheduling

BrightStar Care

• Home Based

Medical/nonmedical home care, medical staffing 2015 Franchise 500 rank: #165 Startup cost: $93.5K-$172.97K Franchise fee: $50K Total franchises/ co.-owned: 266/4 Incentive: $5,000 off franchise fee

• Have More, Be More, Do More Find out more about why Pillar To Post might be right for you. Contact us today! franchise@pillartopost.com

(877) 963-3129

brightstarfranchise.com

The HoneyBaked Ham Co. and Café

pillartopost.com/entrepreneur

Specialty ham and turkey store/cafe

2015 Franchise 500 rank: #166 Startup cost: $281.8K-$436.4K Franchise fee: $30K Total franchises/ co.-owned: 193/234 Incentive: $10,000 off franchise fee honeybakedfranchise.com

Rainbow 100 International Restoration & Cleaning

Indoor cleaning and restoration

2015 Franchise 500 rank: #167 Startup cost: $156.2K-$256.1K Franchise fee: $28K Total franchises/ co.-owned: 311/0 Incentive: 25 percent off franchise fee rainbowinternational franchise.com

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ADVERTORIAL

3 Steps to the Perfect Elevator Pitch By Robert W. Bly An elevator pitch is a 30-second answer to the question “What do you do?” Often asked by a complete stranger in casual circumstances (rather than at a time when you have a captive audience and PowerPoint sales presentation to ofer support), this question can be quite intimidating—unless you’ve already got a clear, to-the-point answer in your back pocket and ready to use. You should be able to clearly describe your business to someone in the time it takes to ride an elevator with them. When you’re able to clearly defne the business you want to be in, you can more easily plan a marketing campaign that helps you attain your goal. Not to mention, that you never know when the person you’re speaking to is a potential customer or referral source. Most elevator pitches, unfortunately, don’t work—because they are straightforward descriptions of job functions and titles, generating not much else aside from disinterest and a few yawns. So, what’s the formula?

First, begin with the words “Do you know?” Te question “Do you know?” identifes the pain point or need that your product or service addresses. For a fnancial planner who, say, works mostly with middle-aged women who are separated, divorced, or widowed and possibly re-entering the workplace, this question might be, “Do you know how, when women get divorced or re-enter the workforce after many years of depending on a spouse, they are overwhelmed by all the fnancial decisions they have to make?”

Second, use a statement that begins with the words “What I do” or “What we do” Te second part of the formula is a statement that begins with the words “What I do” or “What we do,” followed by a clear description of the service you deliver. Continuing with our fnancial planner, she might say, “What we do is help women gain control of their fnances and achieve their personal fnancial and investment goals.”

Third, present a big beneﬁt using the words “So that” Te third part of the formula presents a big beneft and begins “So that.” Here’s what the whole thing sounds like: “Do you know how when women get divorced or re-enter the workforce after many years of depending on a spouse, they are overwhelmed by all the fnancial decisions they have to make? What we do is help women gain control of their fnances and achieve their personal fnancial and investment goals, so that they can stay in the houses they have lived in all their adult lives, have enough income to enjoy a comfortable lifestyle, and be free of money worries.”

Learn how to build a practical marketing plan that produces the results of an expensive consultant without the hefty costs.

BUY THE BOOK #MarketingPlan entm.ag/marketingplan

OPPORTUNITY One of these opportunities could mark the turning point to owning a business of your own, realizing your personal dreams and securing true financial independence. So go ahead, make your first move by considering all that they have to offer in this Opportunity Spotlight. Then make your first call.

Time for your next career move? Own a

franchise!

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Apply online at www.coffeenews.com or call 207.941.0860

Make A Difference In Your Life and Theirs!

+ Low Start-Up + Proprietary Teaching Method + Great Income Potential + Proven Results 1-877-531-MATH(6284) mathnasiumfranchise.com TO ADVERTISE IN THIS SECTION, PLEASE CALL 800-864-6864.

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Resolutely Difficult Advice By James Victore

The entrepreneurial spirit is marked by action—followed by mistakes and failure—then, more action. But starting is the hardest part. Too many of us are waiting to start. Waiting for permission from our boss, or for the weather to clear up or the economy to boom. Just start. There are no secret handshakes or special instructions. No one is standing in your way but you. You choose to be notorious. You choose to become the hero of your own life. Start and don’t stop—momentum is your friend. Just start.

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ENTREPRENEUR 11/15

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