Successful Startup 101: July 2014

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The Birth of the Startup Excubator Do You Have What It Takes to Start Your Own Business?

Entrepreneurs: Here Are 7 Ways to Make the Most of Your Downtime The Trend that is Changing Sales 9 Ways To Create Time, Space, and Stillness For Meaningful Work Self-Employment Taxes Demystified: Can You Lower Them for 2014?

Symptoms of Customer Acquisition Procrastination Syndrome Managers: Don’t Treat All Employees the Same Way

Five Reasons Why Small Businesses Fail The Guide to Running a Small Business: 8 Things You’ll Never Want to Forget

10 Common Startup Flaws Leading to an Early Demise Five Startup Lessons for Fast-Growing Companies These 8 Business Beliefs AreKilling Your Startup Getting Ahead: Don’t Forget to Feed Your Spirit Operating A Business in the Age of the ‘Brand Experience’ Why Startups Hire Their Own Lawyers How We Grew Our SAAS Startup’s MRR from 0 to over $2k in Under One Month For Employer and Employees Alike, Automated Payroll is a Win-Win 9 Ways to Make A Million Neat’s Chris Barbier Talks about the Future of Small Business Solutions

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The Birth of the Startup Excubator

By George Deeb

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ver the last five years, my firm Red Rocket Ventures has consulted or mentored more than 500 startups -- nearly all of them suffering from the same problem. They are typically so focused on building their product, they don’t raise enough capital to cover essential sales and marketing activities that will allow them to better attract additional venture capital down the road. As a result, many startups run out of money soon after launch, stalling out before they reasonably had a fighting chance.

The root of the problem really comes down to better

education. Entrepreneurs need to learn early on that you can’t launch a startup unless you have raised enough capital for both your product development and your initial sales and marketing activities. They must learn the essentials that all investors look for: rapid user growth, proven customer acquisition metrics from previously tested sales and marketing channels and knowing the best, most cost-effective sales and marketing tactics to stretch their limited budgets.

By focusing on this education problem, I was originally thinking about building a startup curriculum in a university-style setting. But, given

how quickly technologies and marketing tactics are evolving, I was worried about having the curriculum go stale the minute it was finished.

Then, I thought some of this could be taught through startup incubator or accelerator programs, but that was only available to the small percentage of applicants that get accepted and only for the short period of time they were in the program.

I wanted a solution that would appeal to all companies that had the interest and the resources; a program that would grow with them through all stages of their growth -- from freshman year through senior year, using the education analogy.

I realized it was the agencies who had their finger on the pulse of all the rapid changes in technologies and digital marketing tactics. But, not the large agencies that are jacks-ofall-trades and masters of none. The boutique, niche agencies are the deep domain experts in their particular field, for example, search engines or social media.

And, more importantly, these boutique agencies that are smaller in size are also entrepreneurial and have firsthand knowledge of how to stretch startup marketing pennies into revenue dollars. By rolling up these services into a one-stop shop, managed by one person from the team, the startup “excubator” model was born in Chicago with the launch of Ensemble in August 2013, of which Red Rocket is a member company.

But, to really appeal to the startup community, we understood we needed a more attractive pricing plan that was more affordable to startups -- one where 20 to 40 percent discounts would apply for bundling your services needs into one “digital services suite” of expert vendors. In this model, the excubator would also consider taking an equity position in these businesses, so it actually had a vested interest to help these businesses succeed, as partners with entrepreneurs over the long term. This evolves the excubator members’ revenue models from the normal “short term fee driven” model to a more logical “long term venture capital return” model, which if done correctly, should improve the a typical startup’s odds of success from 10 percent to closer to 30 percent in the process.

It is too early to tell if this excubator model will work or not. A current flaw in the model is it still requires the startups to go cash out-of-pocket, even with deeply discounted rates, which they may or may not have the money to pay for. In a perfect world, an excubator model would have raised its own venture fund, or would partner with existing seed-stage venture funds, to help fund these early stage entrepreneurs who may have a great idea, but not the capital to afford the collective services which are required to launch the startup with maximum odds for success.

If excubators have done anything, they have creatively brainstormed how to help more startups over the long run.

About the Author: George Deeb is the Managing Partner at Red Rocket Ventures, a growth consulting, advisory and executive staffing firm based in Chicago. Red Rocket is also a founding member of Ensemble, an all-star powered “Digital Services Suite”. You can follow us on Twitter at @georgedeeb, @RedRocketVC and @ EnsembleHQ.

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More than half (54 percent) of entrepreneurs in the survey say they started their companies because they wanted to work for themselves instead of having a boss. A majority (89 percent) described themselves as leaders.

Do You Have What It Takes to Start Your Own Business?

By Rieva Lesonsky What qualities do successful small business owners have in common? A new survey by Deluxe Corp. sought to find out by asking entrepreneurs about their history, attitudes and characteristics that led to business success. How do you measure up?

According to Deluxe:

• Small business owners are comfortable with failure. The road to business success is paved with failures, but that’s OK for entrepreneurs in the study. More than three-fourths (77 percent) say they would rather learn from failure than never try at all.

• Small business owners are optimists. You’ll deal with lots of setbacks and obstacles in your road to business success, so you need to have a positive outlook. In the Deluxe survey, a whopping 86 percent of respondents believe they can do anything they set their minds to.

• Small business owners keep it all in the family.

Having family members who have run businesses is a common thread among successful small business owners. Whether it’s learning the ropes of business success at an early age or simply being exposed

to the realities of entrepreneurship that makes the difference, more than three-fourths (76 percent) of small business owners Deluxe polled have a family member who owned a small business.

• Small business owners like to be in charge. More than half (54 percent) of entrepreneurs in the survey say they started their companies because they wanted to work for themselves instead of having a boss. A majority (89 percent) described themselves as leaders.

• Small business owners like to get things done. You may be dreaming about starting a business, but for business success, you need to take the next step. Seventy-eight percent of entrepreneurs in the survey describe themselves as doers and 80 percent say they’re practical (80 percent).

Of course, not all small business owners are the same, and there are many reasons to start a business. Deluxe found the small business owners in the study fell into one of seven categories: 1. All Heart: These entrepreneurs started a business to do

what they love and share it with others.

2. Encore Career: These entrepreneurs are older, entering a second phase of their careers, and took a risk with starting their own businesses.

3. Passionately Confident: These risk-takers are born business owners who believe in choosing their own paths in life.

4. All in the Family: Traditional types, these entrepreneurs inherited the family business.

5. My Way: These entrepreneurs were motivated by taking back control of their time. They started their companies to gain control over their schedules and hours. (They’re more likely to be women).

6. Mastering the Niche: What we think of as the classic entrepreneur, these business owners saw an opportunity and wanted to capitalize on it.

7. Boss-me-not: These former business professionals left their for-profit, corporate jobs because they wanted to be their own bosses.

Isn’t it good to know that, whichever category you fall into, you can make a go of your business?

About Rieva Lesonsky Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Google+ and Twitter @Rieva, and visit her website SmallBizDaily.com to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.

Entrepreneurs: Here Are 7 Ways to Make the Most of Your Downtime

By Ilya Pozin

“ Focus on slivers of time where you can cut back. For example, rather than scheduling a one hour meeting to chat with your team, cut out the fluff so it’s 30 minutes or less. ”

As an entrepreneur or startup founder, being stretched thin comes with the territory. Juggling a busy schedule may be second nature for you, but are you really using your time wisely?

As the founder of two startups, I’ve grown so accustomed to being busy that I don’t think I function as well without a lot on my plate. But it’s taken years of practice for me to fine-tune my time management to ensure I’m not just getting things done but also maximizing every spare minute. This is especially important when it comes to your downtime–even if it’s just 15 minutes per day.

Here are seven things to accomplish while making the best use of every spare minute you have:

1. Reprogram your schedule Using your brief moment of downtime to work on scheduling could save you a lot of time in the future. How much time are you allocating toward meetings, projects, or anything else you’re encountering on a daily basis?

Focus on slivers of time where you can cut back. For example, rather than scheduling a one hour meeting to chat with your team, cut out the fluff so it’s 30 minutes or less.

2. Brainstorming Idea generation is crucial to every startup founder, but it

can be challenging to find time in your busy schedule. If you have 30 minutes of quiet time in the morning, brainstorm some ways to improve your business or just let your creativity flow for a while. Or, if your team is having a slow work day, invite them to the meeting room and divide them into teams for an impromptu brainstorming session. Give the team with the best new ideas a reward, like flex time or a day to work from home.

3. Strategizing Every minute counts when it comes to strategizing ways to grow your business. This could mean researching new ways to reach your customer base via marketing strategies or simply improving your website.

To put your spare time strategizing to better use, consider bringing in your business partner or trusted employee to help you further your thinking.

4. Evaluate your team When was the last time you spent time evaluating the way your team functions? Go beyond considering their efficiency and whether they’re thoroughly engaged. Instead, hone in on their strengths and weaknesses and figure out ways for them to improve. You may even want to pull your employees aside for a one-on-one to individually to address any issues and gain feedback.

5. Rework internal processes Is your business running as smoothly as you think it is? Take time to figure out ways to improve your internal processes and boost company-wide efficiency.

For example, you may find a software program that can automate menial tasks. Or maybe you’re struggling internally with the management and delegation of your teams. Consider restructuring your organization to remove hierarchy and function in a new manner.

6. Uninterrupted general focus Balancing a busy schedule often means struggling to find time to sit down and truly focus on something for a long period of time.

Take advantage of every spare moment of down time to achieve uninterrupted focus on a pressing matter, even if it’s just organizing your inbox.

7. Catch up on reading Believe it or not, reading is a great way to make use of your time.

Make time to read up on the latest industry news, check out what your competitors are doing, or even finish up that book that’s been gathering dust on your shelf. Feeding your mind also enhances your creativity and productivity overall.

Use your spare moments of relief from a busy schedule as effectively as possible to help your business.

How do you use your downtime?

About the Author Ilya Pozin is an entrepreneur, writer and investor. He is the founder of Open Me, a social greeting card company, and Ciplex, a digital marketing agency. He’s a columnist on entrepreneurship and marketing.

By Steve W. Martin Over the past several decades the structure of sales organizations has remained largely the same. They have been primarily based on outside field salespeople who make face-to-face sales calls with prospective customers and current clients. In turn, the field salespeople have been supported by inside sales representatives who helped them complete their daily tasks.

Today, the traditional sales organization structure is undergoing a significant change. Many sales organizations are transitioning from a field sales model to an inside sales model, where the inside salespeople work independently and are directly responsible for closing business, working primarily by phone and email. In order to understand the magnitude of this trend, in-depth interviews and extensive surveys were conducted with over 100 vice presidents of sales at leading high technology companies and business services providers. The resulting research provided detailed insights about the evolution of sales organizations.

The key finding: Over the past two years, 46% percent of study participants reported a shift from a field sales model to an inside sales model, while 21% reported a shift from inside sales to a field sales model. More than twice as many study participants reported moving to an inside sales model.

There are three key factors that determine whether a sales organization will utilize a field or inside sales model. They are the sales organization’s stage of development, the complexity of the products that are sold, and to a lesser extent, the sales leader’s perception of inside and outside sales model effectiveness.

upon predictable success. As the sales organization ages, it will enter either the Extend stage and enjoy longevity or the Cull stage, where it declines and is forced to reduce its size. The ratio of outside or inside salespeople changes as the organization moves from the Build to Compete to Maintain development stages.

The challenges sales organizations face is dependent upon the stage of their development. The top sales challenge in the Build stage is creating sufficient sales coverage to push the product into the market. The Compete stage challenge revolves around quickly scaling the sales organization so it can compete effectively against larger established competitors.

The focus shifts to maximizing sales productivity by lowering the cost of sale and increasing the average sales price in the Maintain stage. The Extend stage challenge is to attain widespread customer adoption so their solution becomes the de facto standard. The Cull stage challenge is to revitalize a demoralized and marginalized sales force. These challenges directly influence the sales organization’s structure and whether a field or inside sales model will be deployed.

Sales Cycle Complexity

Sales Organization Development Stage Every sales organization can be classified into a “Build,” “Compete,” “Maintain,” “Extend,” or “Cull” stage based upon its development.

The Build stage is when the sales organization is first establishing itself. If successful, it will proceed to a high-growth Compete stage and then to Maintain stage that is contingent

The complexity of the sales cycle determines the evolution of the sales organization and at what point outside field or inside-based sales models will be implemented. Sales cycle types can be classified by complexity as Enterprise, Platform Cloud-based or Point-specific. Each of these sales cycles vary in complexity depending upon the number of individuals and departments involved in the selection process, the size of purchase, and sophisticated nature of the solution offered.

Enterprise sales typically are large capital expenditure purchases that involve long sales cycles. Multiple departments of a company and all levels of the organization (C-level

executive, mid-level management, and lower-level personnel) are needed to approve the solution’s functionality and its purchase. A point-specific sales cycle is usually targeted to solve the business problems of single department within an organization and the purchase decision is made by a small number of decision-makers usually at the lower-level of the organization. The Platform Cloud-based sale provides a turnkey business solution for the customer over the internet and is sold directly to the business users of an organization. There is a preferential field and inside sales model strategy for each of the sales cycle types. For example, a field sales model is preferred for enterprise sales cycles and an inside sales model is preferred for Platform Cloud-based sales cycles.

Sales Leaders Perception of Field and Inside Sales Models While the goal of this study was to gather quantifiable metrics based on surveys and interviews with sales leaders, there is another aspect of sales model decision making that cannot be ignored. Ninety-eight percent of study participants responded that the characteristics between inside and outside salespeople are significantly or somewhat different.

Most sales leaders believe that outside salespeople have superior sales skills and the most accomplished sales professionals are in the field as evidenced by the sales leader comments below. This in turn can influence their decision and whether they implement a field or inside sales model.

“Field Sales is more strategic, meeting with C-level executives and developing strategic business innovation to help them grow their business versus inside which is more quantity and not as in depth majority of the time.”

“Inside Sales is a transactional engagement and the focus is on opening opportunities.

Outside teams are solution and relationship based.”

“Outside sales requires far more emotional intelligence, situational awareness, and planning. Our inside sales, while equally demanding, requires persistence, research, and back end work.”

Furthermore, many sales leaders have a personal bias toward deploying outside salespeople over inside sales. In some cases, this inclination was based on their own experience from many years ago when they were in field sales. However, this historical disposition is being offset by the changing nature of how customers buy today. Customers are smarter and information is not only easier to find, but available in greater detail than ever before. In addition, technology has become a way of life and completely disrupted the buying process. Via the Internet, customers can research products, prices, and opinions.

This situation is driving more sales leaders to consider and then deploy an inside sales model. For example, study participants were asked to rank the influential factors that are responsible for the migration from field to inside sales. Sixty percent responded that it was due to the increasing pressure on business performance and profitability.

Fifty-four percent said it was due to technology advancements. Forty-

seven percent felt that buyers more readily accept the remote selling process and thirty-four percent believed it is because of societal changes such as a mobile workforce and personal online purchasing habits.

Study participants also cited the following advantages of an inside sales model compared to field sales model. Eighty-four percent believe it is easier to onboard new salespeople and share best practices. Seventy-nine percent responded that inside sales allows the organization to scale faster.

Increased call activity and selling volume was cited by seventy-eight percent of responders. Seventy-six percent acknowledge that inside sales provides a better strategy to penetrate small businesses and mid-markets.

Today, there is a changing perception among sales leaders about the strategic role inside sales performs. This change is due to the benefits that sales leaders believe the inside model provides in terms of scaling activity, growing the organization, and attacking specific markets.

About the Author Steve W. Martin teaches sales strategy at the University of Southern California Marshall School of Business. His new book is titled Heavy Hitter I.T. Sales Strategy: Competitive Insights from Interviews with 1,000+ Key Information Technology Decision Makers

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9 Ways To Create Time, Space, and Stillness For Meaningful Work Ernest Barbaric

am fascinated by people who do meaningful work. People who create, share and nurture ideas that move us toward a better future. They somehow operate differently, and I am curious to find out how.

Late last year, I decided to start set up interviews with some of these people I could get access to. Some acquaintances, some authors of interesting articles I came across and some people who came highly recommended — spanning from a communications director for an addictions recovery centre, to a web designer and author, to a lead researcher of a multi-year cancer study. Some patterns started emerging. This is one of them.

INPUTS In a recent study by UC Irvine, researchers attached heart rate monitors to office workers while also monitoring the programs they were using. It was found that people who checked e-mail frequently were consistently in a “high alert” state. They were less productive and experienced more stress, while those whose e-mail was disabled for 5 days had natural, variable heart rates and got more done (source).

Think about that.

That’s just e-mail…

In a regular week, the average worker spends about 13 hours checking or dealing with e-mail. (source).

Those among us under 35 years of age, spend an average of 4.2 hours a day on social networks, while those over 35 average around 3 hours a day. (source) Add to that between 250 and 3000+ advertising messages we’re exposed daily, phone calls, regular mail, radio programs, music at the gym, dealing with your kids — basically everything that’s fighting for your attention and chewing away at it piece by piece — it’s clear that our brains are being exposed to a spiralling number of inputs.

And THAT is one of the major stumbling blocks preventing us from doing meaningful work. Limiting those inputs can help create the time and space necessary to do work that matters.

MENTAL INPUTS Even right now, as you are reading this, you may have a few other tabs open on your browser, you may have TV on in the background or you may remember that you have to buy groceries tomorrow.

To do good work, we have to focus. And it’s impossible to focus when all those things are swirling around in our brains. Here are some practices I use to limit mental inputs and create focus.

Brain Dump As you sit down to do whatever needs doing, you may have fragments of ideas, tasks and to-do’s in the back of your mind. Dump them out.

Get everything that is currently taking up even a fraction of your attention down on paper.

Errands. Groceries. E-mails you have to reply to.

Report you have to write. Website design sketch for a new client. New bag you want to buy.

You will notice just by doing this alone, before starting work, you will create breathing room for your mind, allowing you to fully focus.

Monotasking Our brains are just not meant for multitasking. In fact, as you multitask, your brain literally begins to rewire itself and as a result, sustaining attention becomes impossible. (source) Don’t multitask yourself to becoming a vegetable. Instead, focus on one task at a time.

I often struggle with this. Even now, my fingers will float over to the CMD+TAB buttons ready to switch to another application, check e-mail or see what my friends Instagrammed. Here’s one solution: Pomodoro Technique.

It’s essentially a timer you set yourself to a 20, 25 or 30 minute interval where you do one thing and one thing only. You can learn more about the technique here, and download the free FocusBooster app to try it for yourself. It’s weird at first, but I found having a time limit really helps reign your mind in.

Breaking the attention barrier You may have different experience, but I found that it often takes me about 15 or 20 minutes to really get into a task. It’s like a warm-up routine before working out.

After interviewing Paul Jarvis recently, I started a daily writing practice where I sit down and write until there are at least 500 words. Most often it’s not award winning content (not that I won any awards), but it’s raw material. This article came from one of those writing sessions. It sometimes takes 20 minutes, sometimes an hour — but breaking through that attention barrier, where no other thing is floating around in my brain other then what I am writing — is a truly magical moment.

We’ve given control of our time and attention to apps, e-mail, social media and little white numbers in red bubbles. We’ve basically trained ourselves to automatically respond to stimuli (a notification) by checking the source, much like Pavlov’s dogs in his classical conditioning experiments.

Well, we can’t be slaves to notifications if we are to do meaningful work. Here are some ways to limit digital inputs.

Disable notifications

DIGITAL INPUTS

Almost every app, mobile or not, has some kind of a notification system. Either a numeral showing you how many e-mails you’re missing, audio ping (Facebook does this with messages) or a pop-up of some sort.

With our laptops, tablets and phones it’s SO easy to get distracted! “Just going to check Facebook for a second”, “just going to see if anyone Tweeted me” or “*ping*, Oh there’s a new e-mail. I should probably check it”.

Every notification you receive while trying to focus is like someone putting a cattle prod to your mind. Turn off or disable notifications as much as you can, at least for the period of time you need to concentrate on a task.

Turn off WiFi Another way to deal with digital distractions and inputs is to simply cut them off at the source. The Internet Connection. I will often turn off the WiFi on my laptop when I work on a marketing strategy, or a new article.

It’s simple and effective. Using the Pomodoro technique, you can give yourself a 5 minute window between completing tasks to check e-mail if you really need to.

Patch up black holes Social Media is like an attention black hole. You just flipped over to the Twitter tab, and next thing you know it’s 3:15AM and you’re reading about Genghis Khan on Wikipedia. Yes, I help companies with digital marketing, but the fact remains… this can be a major time waster if you’re trying to focus.

There are apps that can help, such as ColdTurkey or SelfControl that will block access to certain websites, e-mail servers or even other programs for a period of time. Or you can clean up your browser cookies and never let those websites remember your password, so you have to enter it every time. This little trick worked for me.

ANALOG INPUTS Outside of the metal and digital inputs, we still have the physical world to deal with. So how do you limit analog inputs?

Analog notifications I consider the phone (yeah, that one app on the bottom left of your screen) to be an analog notification. Some of the ringtones are truly jarring to my ears, and the bzzzzzz bzzzzzz of the vibration motor is just as bad.

So, I’ve turned off vibration for both modes (silent and ring) and use a simple ringtone (Signal on the iPhone 5).

When I do work, I’ll turn the airplane mode on — effectively stopping all inputs that way. My voicemail greeting promises to get back to the caller within 90 minutes, and so far I may have missed that mark once in 5 years. This gives me a 90 minute interval to focus and do work.

Visual Pollution Do you have a lot of clutter on your desk? This kind of “visual pollution” plays an interesting trick on our mind. It may create comfort, or it may create an image of “look how busy I am” to your boss, but it’s really just a distraction.

Our brain takes in a lot more then we actively process and the more it has to deal with, the harder it is to sustain attention. I look at everything “extra” on my work area as a leak in my attention tank. To plug those leaks, I’ll only have handy the items needed for that specific task. Most of the time, it’s a client folder, a notebook with ideas and my laptop.

Human interruptions It can take up to 23 minutes to refocus on a task

after being interrupted. (source). Those are some significant losses of time, not to mention a huge drain on your attention tank. So, it’s worth looking at how to limit this kind of analog input as well.

Most of the time, I work out of a home office. My wife and I made a deal where if the office door is closed, it means I need to focus on a project — generally she’ll let me simmer in there until the Pomodoro app signals a break :) You may need a sign on your office door, or some kind of signal that indicates “no interruptions please” to your co-workers or co-habitants if you have a home office.

This is not to say we should be anti-social. Rather, we’re just asking for a short period of time where we can concentrate without being distracted.

As we experience an ever increasing number of inputs, notifications, distractions and interruptions, it’s essential to give yourself the gift of space, time and quiet in order to do meaningful work. I hope this article gave you some ideas on how to do that.

About the Author I’m an artist, professional speaker, writer, maker, motorcycle rider and marketing strategist. My unique ability is simplifying complex problems, strategizing and charting a way forward. My work has been featured in Mashable, Forbes, GOOD, Social Media Today, Non-profit Quarterly and The Financial Post.

In 2010 I founded a Social Media for Business certificate program at Mount Royal University, and in 2014 I am developing a Digital Marketing certificate for the Canadian Marketing Association. I love working with motivated marketers and entrepreneurs, and even more so in a mentorship or coaching capacity.

Self-Employment Taxes Demystified: Can You Lower Them for 2014?

By Nellie Akalp If you make a living as a self-employed sole proprietor, tax time probably makes you wonder where so much of your hard-earned money goes. Freelancers, consultants, and independent contractors are usually shocked the first time they’re hit with the self-employment tax.

You can’t legally avoid paying your taxes … period. However, there are certain things you can do to help minimize what you owe. Here we’ll break down the details of self-employment taxes and how a different business structure can help you lower them. Of course, as with anything you read on the Web, this is a general overview and it’s smart to talk with a tax advisor about your personal circumstances.

What are selfemployment taxes?

Self-employment taxes are how self-employed people help fund the Social Security and Medicare programs. Employers and employees typically split these taxes, but when you’re selfemployed, you’re on the hook for the whole thing.

Self-employment tax rates can vary year to year. For example, it was lowered for 2011-2012. For the 2013 tax year, it reverted back to its normal 15.3% rate (the breakdown is actually 12.4% for social security and 2.9% for Medicare).

Who has to pay selfemployment taxes?

Anyone making more than $400 in selfemployment income is required to file a Schedule SE with his or her tax return. This is where you calculate how much self-employment tax you owe.

Also, keep in mind that when you’re filling out your Form 1040, you can deduct a portion (between 5057%) of your self-employment tax payments.

How can you lower them?

The key way to reduce what you owe in selfemployment taxes is to change your business

structure from a sole proprietor/partnership into a corporation or Limited Liability Company (LLC).

When you have a corp or an LLC, you can make an S Corp election and this can help you reduce some self-employment liability. Here’s how: When you’re a sole proprietor, you owe selfemployment tax on the first $113,700 of your SE income (for 2013). With an S Corp election, it’s slightly different. You pay yourself a reasonable salary for the work you do, and then if there are any profits left over, they can either stay in the business or you can take them as a “profit distribution.” Here’s the key point: you need to pay social security/Medicare tax on the salary portion, but you don’t have to pay it on the profit distributions.

Let’s look at an example: Jill is set to earn $100,000 this year in self-employed income. If her business is structured as a sole proprietor, then she’ll need to pay self-employment taxes on the entire amount. However, if her business is an LLC with S Corp election, she will pay SE taxes (or social security) only on $60,000, which in this case, is what she pays herself as a reasonable salary for her job.

Wondering why Jill doesn’t just pay herself $10,000 in salary and then enjoy $90,000 in profit distribution that’s SE tax-free?

That’s because the IRS requires that you pay yourself a fair market rate for whatever job you do for the business. And this compensation is checked very closely.

Is there a downside to changing your business structure?

When you have a formal business structure like a Corporation or LLC, you are obligated to manage your business at a higher administrative level than with the sole proprietorship. That means more paperwork and administrative work. If you like to keep things simple and are concerned that all the extra paperwork won’t be worth the tax savings, then consider choosing the LLC with S Corporation election. In general, an LLC has a lot less paperwork and formal management than

a corporation. In fact, it won’t be too different than a sole proprietor.

Other ways to reduce SE taxes Beyond changing your business structure, you should also think about minimizing your reported net profit. For the self-employed, the Schedule C/C-EZ calculates your net profit (gross revenue minus deductible business expenses). This net profit is used to calculate your selfemployment tax, so it only goes to follow that the lower your net profit figure, the lower your SE tax bill. Make sure that you’re including all allowable business expenses when filling out your Schedule C, including: office rent or home office deduction, office supplies, business travel expenses and conferences, computer equipment, software, etc.

Final thoughts In addition to helping you lower your SE taxes, the LLC or corporation can also help you separate your personal assets from the business, so you’re not risking your personal savings if your business is sued or runs into financial trouble.

Speak with a tax advisor

or do your own research on business structures to decide if the LLC or S Corp is right for you.

About Nellie Akalp Nellie Akalp is a passionate entrepreneur, small business advocate and mother of four. As CEO of CorpNet, a legal document filing service, Nellie helps entrepreneurs start a business, incorporate, form an LLC or set up Sole Proprietorships (DBAs) for a new or existing business.

This post originally appeared on BlogHer

Symptoms

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Are you on a hiring binge - before you have actual work for them to do? It’s never a good idea to have idle resources sitting around.

Symptoms of Customer Acquisition Procrastination Syndrome

By Kriti Vichare

It’s an epidemic out there in the entrepreneurial world.

Anyone out there suffering from CAPS (Customer Acquisition Procrastination Syndrome)? Symptoms include the eager urge to work on ANYTHING and EVERYTHING except finding customers to build a new business. Your doctor (or mentor) doesn’t need to tell you that building

a business is contingent on finding paying customers, yet new entrepreneurs often dive into the more fun, less important tasks first!

Here is a list of symptoms that show that you may be suffering from CAPS. If you have done any of these before or instead of finding customers, you may need intervention:

Browsing email newsletters, reading blogs, watching videos, and skimming books are all important, but if this is all you do, and you are claiming to be working on a business, Houston, we have a problem.

8

1 2

Are you tackling social media completely manually? Or consuming it constantly? That’s probably a waste of time. Get a tool like Hootsuite or find a social media assistant.

Do you have a constant, burning urge to check your stats: Facebook likes, Twitter followers, email list subscribes and unsubscribes. Warning: none of these metrics imply a paying customer! Saying “thank you” to new followers also doesn’t guarantee that they will buy your services - if your product is good, they will buy it even if you don’t thank them!

3

Do you find yourself running errands ALL. THE. TIME? Stop! Those errands are detracting you from finding customers! Hire an assistant or a gopher and streamline the unnecessary errands.

4

Are you bogged down by clerical tasks? Unless that is the core competency of your business, they are getting in the way of finding customers.

5

Did you find and rent a fancy office space, before you had clients? Um, why? How do you plan to afford that shiny desk?

6

Are you on a hiring binge - before you have actual work for them to do? It’s never a good idea to have idle resources sitting around.

7

Did you throw a red carpet launch party, before actually finding a customer? You may laugh, but it happens!

9

Did you spend months creating a fancy logo, slick business cards and a fancy feature-andcontent-filled website before you were certain about the product you were offering and the customer you were offering it to?

10

Are you letting daily stimuli sway your day instead of spending the day focusing on building actual leads and customers?

11

Are you feverishly attending random networking events in the hopes you will meet the right people that may help spread the word about your business? It this is a strategic move, then it makes sense.

Otherwise avoid thee events The only cure for this severe ailment is to find your first paying customer! And after that, rinse and repeat as often as you can, every day.

About the Creator This comic was created by Kriti Vichare and Shivraj Vichare. It was inspired by the ironies they have seen and have experienced in their small business ventures. You can find their comics on www.entrepreneurfail.com/. They are the creators of the book Cheating on your Corporate Job: A Comic Look at the Startup Dream.

“

You can’t always tell why which approach is the right one, since those who want to do it collaboratively may be trying to moderate expectations and those who want goals dictated may want an excuse when they can’t deliver.

“

Managers: Don’t Treat All Employees the Same Way

By Michel Theriault

W

e are all familiar with the golden rule that says to treat others as you yourself would like to be treated. However, don’t take this maxim too literally in your role as a manager.

After all, everyone is different. How your employees respond and react to different situations will vary.

In many cases, you do have to be fair in the way you treat your employees, but the reality is that each member of your staff is unique and you need to take that into account.

Treating everyone who works for you the same is “off the rack” management. You need to customize your management approach.

A more effective way of managing your staff is to understand each of your employees’ personalities, capabilities, sensitivities, and other factors that might impact how they respond to any given situation and, in particular, how they differ from you.

Here are a few examples of common management activities where you should reconsider treating everyone the same:

Giving Feedback or Praise Some your staff will perform at a top level regardless of whether you praise them or not.

Others require constant pats on the back to keep them motivated.

Similarly, one person may enjoy being invited up to the front of the room and praised in front of their colleagues and peers, while somebody else may be very shy, have no interest in the attention, and in fact will be quite uncomfortable with it.

Providing Guidance or Direction Some employees need detailed instructions and direction, but others can simply be pointed in a direction and told the desired objective.

For those who need detailed instructions, it might not be because they have little motivation or don’t know what to do. It may simply be a matter of personality, or perhaps they’ve gotten grief from a previous manager for doing things not exactly like he or she wanted. Find out what works for each of your staff members, and use it to get the best results from that individual.

Setting Goals and Objectives Like the previous item, some employees are very happy having their goals and objectives handed down to them, while others have a need to contribute and help build those goals and objectives directly.

While in some cases your organization’s requirements dictate those goals or objectives, with most employees there are numerous additional requirements that could be set collaboratively.

You can’t always tell why which approach is the right one, since those who want to do it collaboratively may be trying to moderate expectations and those who want goals dictated may want an excuse when they can’t deliver. Whether dictating goals and objectives or working collaboratively, be careful to keep in mind the potential motivation behind your employees’ preferred approach.

Discipline Some employees take discipline and criticism very well, likely the more confident ones.

employees — so you can apply the right approach.

Development and Training Some employees are driven to learn and take every opportunity they can for development and training, while others are less enthusiastic.

Understanding the reasons for that lack of enthusiasm will go a long way to developing training that works for them.

For instance, off-site training may present logistical or family problems for some employees, so they resist it, or they know a day off from the job means they will work harder or even longer hours to recover from the office day they missed.

Others, however, may be more sensitive to being told they did something wrong and be driven by fear of losing their job. They may stop taking risks or making their own decisions because of that fear.

Traditional management techniques usually wrap correction or discipline into a softer approach, telling employees to try to do things differently next time. That will work for many employees, but sometimes the more direct, harsher approach is the only way you will get change from that employee. Again, this is why it’s important to understand your individual

Even more important is that different people learn better with different techniques. Some employees may need the hands-on, workshoptype approach while others may prefer attending a lecture or even reading a book on the topic to get the knowledge they need.

While there are certainly benefits and drawbacks to the various techniques for learning and you need to make it work for your requirements, taking into account how each employee learns and trying to adapt the development and training program to those needs will go a long way.

About Michel Theriault Michel Theriault is an author, speaker, and consultant focusing on topics relevant to Managers and aspiring Managers in businesses of all sizes who want to get results, get attention, and get ahead. He is the author of Write To Influence (from the Quick Guides for Managers series), Win More Business – Write Better Proposals and Managing Facilities & Real Estate. Write To Influence is currently available as a free download in ebook and audiobook format. As the founder of Success Fuel for Managers, Michel’s work includes training, consulting, seminars, and business-oriented books. Connect with Michel or read his blogs about management and leadership on his site at www. successfuelformanagers.com.

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Small Businesses Fail

5

Reasons Why Small Businesses Fail

By Anthony Fensom hen it comes to owning and running your own business, fear of failure can be very real, particularly when it could impact your family, income and even home. With this in mind guest writer Anthony Fensom, highlights common causes of failure.

Albert Einstein famously said, “Anyone who has

never made a mistake has never tried anything new.� From Richard Branson to Walt Disney, there is a long list of famous entrepreneurs who failed spectacularly before becoming successful.

But with ABS data showing around half of the new businesses established in Australia fail within four years, what are some mistakes to avoid?

1.

WRONG BUSINESS MODEL

failures, and the current business climate is not making it any easier.

Most successful businesspeople have a passion for their business, so if you are in it for a quick buck then perhaps rethink your strategy. Having the right business model will ensure your business can achieve growth from day one – and not just fight it out with other competitors.

Tip: Alex Osterwalder and Yves Pigneur’s “business model canvas” can help identify your value proposition, partners and channels, while a proper business plan is essential for examining the business opportunity and its required resources.

2.

POOR CASH FLOW Poor cash flow management has been blamed for 90 per cent of small business

According to Dun and Bradstreet, businesses are waiting nearly eight weeks to be paid by other companies, with the average invoice payment time rising to 55 days during the first quarter of 2013.

Tip: Make sure your payment terms are at the shorter end of the scale, send out invoices as soon as the work is done and follow up late payers immediately.

3.

BAD LOCATION For a retail business, position is everything, unless you are planning to operate purely online. A lack of patronage will kill your business, although getting space in a shopping centre can prove costly.

Tip: Consider your target market carefully

and, like David Jones’s “multi-channel” approach, obtain as many pathways to reach customers as possible, including a shopfront, user-friendly website and mobile store.

4.

LACK OF RESOURCES Inadequate finance, equipment and human resources can hurt your business, so ensure your business is sufficiently capitalised from the start. Poor financial controls, including bad credit arrangements, have been blamed for up to a third of business failures.

Tip: Don’t quit the day job until you have enough savings to endure any unexpected revenue shortfalls. Tap ‘friends, family and fools’ for finance, check available government assistance.

5.

INADEQUATE SUPPORT It can be challenging operating a small business and even harder if you are a one-person operator. Not everyone is skilled in every area and without proper financial controls, marketing and management experience, it can be tough to succeed.

Tip: Seek advice from a mentor with expertise in your industry. Educate yourself in areas you are weak in and build a network of support from which you can draw upon.

Being an entrepreneur is about taking calculated risks, not avoiding them entirely.

“If you’re not making mistakes, you’re not trying hard enough,” says award-winning entrepreneur William H. Saito, who says a failure is someone who quits.

Sources SMH: ability to fail DNB Dynamic Business SMH: Why so many businesses fail “An Unprogrammed Life,” By William H. Saito, John Wiley & Sons, 2012.

Source: "Five reasons why small businesses fail," Anthony Fensom, RaboDirect: Click Here

The Guide to Running a Small Business: 8 Things You’ll Never Want to Forget

By Ma McManus

1 Nothing Happens Overnight In the early stages of running my small business, I constantly found myself filled with feelings of anxiousness and anticipation. Why had this brand not achieved the level of international success that I had envisioned when I started the company? Why was my brand following not massive? Am I ever going to see this brand reach the heights that I so desperately desire?

I was either having a tough time curbing my problems of time management, or I was making the same mistake that small business owners across the world suffer from on a regular basis. I was expecting to shut my eyes a poor man with a small company at night, and open them a rich man with a large company in the morning. Of course, this is one of those feelings that unless you make a conscious effort to combat, it is only natural to suffer from.

Unfortunately, it is one of the most dangerous mistakes to make in the early stages of operating your business. It can be, and often is, utterly demoralizing.

Ask any business owner if their road to profits took longer or shorter than they had originally anticipated. You show me a man or woman who tells you that it took shorter than expected, and I’ll show you a good liar. Running a successful company takes time, and there is simply no way around it.

Okay, so maybe once in a while you read of a miraculous business maneuver that results in “overnight success”. There’s actually a word for this kind of success! Luck. Or being in the right place at the right time. For every example you find me of true overnight success, I will find you seventy-five examples of businesses that took five years before they turned a profit.

Little Things Make a 2 Big Difference How often have you been given extra packets of ketchup at a drive-through, and gone home to find yourself surprisingly pleased whilst you dig through your bag of warm goodies? It’s the same French fries and cold soda that you’ve always enjoyed, but those extra two packets have just made this lunch the best one since your mother sent you turkey and gravy in a Tupperware container. Weird, huh?

Something so seemingly irrelevant has just made your experience with this restaurant more enjoyable than you ever thought possible.

Now, imagine the same situation, although this time you delve into your fast-food bag only to find the drive-through attendant failed to provide you with the condiment so critical to the meal. You’re now contemplating either driving back to the restaurant or knocking on your neighbor’s door begging for spare ketchup packets. You see, it’s not really the meal itself that makes you happy. Of course, the meal must taste

good. But if two meals both taste relatively similar, for a relatively similar price, it’s the little things that make you loyal to one over the other. This idea holds true across all elements of business. In an industry filled with barbers dishing out haircuts, the ones who give you a free comb are the ones who last.

The Hardest Things 3 Are the Most Important Something you quickly learn while running your business, especially if you are running it alone or with very few employees, is that the tasks required to operate effectively are incredibly diverse. In my experience being interviewed by magazines and publications, one of the most common questions I hear is, “Could you describe what you might do on an average day at Bokos?” I do my best to frame a useable answer, but responding to this question is surprisingly difficult. Especially when “everything” is not what they want to hear. Unfortunately, “everything” is about as close to the truth as anything else. Among the wide array of various tasks that need to get done, one thing becomes very clear, very quickly. The hardest things are usually the most important.

4 It Doesn’t Hurt to Try Coming to terms that there is no roadmap to follow as you run your business is perhaps one of the most important ideas to accept. The trouble is, it is also one of the most difficult. You may find yourself filled

with thoughts like, “I do not know with certainty what will happen if I do this. I better just avoid it altogether.”

Everybody likes a sure bet. Whether you knew it at the time or not, when you took on the role of owning a company, you also took on the role of a pathfinder.

There is no set of steps to follow that will ensure a prosperous future. But there is also no harm in deviating from the status quo to make decisions that might seem obscure and unpredictable. I have found that often, these somewhat ridiculous side quests end up being better strategic moves than the safe bets. With a safe bet, you know what you are getting.

When you try something new, the end result is unknown. It could be bad, making you say to yourself, “What the hell was I thinking?” Or, quite possibly, it could be the one thing that changes your business forever.

5 Prepare for Sacrifice A nine to five job can be, and often is, extremely demanding. Every day, millions of people around the world experience a great deal of stress attempting to effectively deal with the demands of working for a large company. They force themselves out of bed well before the sun rears its head, rack their brains to figure out ways to increase profit and decrease spending in a congested cubicle, and sit through stop-and-go traffic on the way home to the tune of Pink Floyd’s Another Brick in the Wall. For many, this stress filled job is so demanding that a cold, frost-brewed draft is in serious demand by eight o’ clock that night. Owning a company takes those stresses, and that demand, and extends it beyond the eight-hour workday.

An old saying in the entrepreneurial world goes, “When you own your own company, you are always at work.” Working for a company is like watching football every Sunday, owning the company is like being the head coach of the team. If you are not willing to make sacrifices, owning a company might not be the best option for you.

6

It’s not Just About the Money

I once had a man I had never met request to speak with me about owning a company. As we spoke on the phone, he told me that he was a 28-year-old electrician working in Texas. He said that the job that he currently held paid very well, he was bringing home around $60,000 per year. Nothing to laugh at. But he told me that he didn’t want to work for somebody else, he wanted to start his own company. He told me that he hated every minute of his current job. He said it didn’t matter how much money he made, he just wanted the freedom to make his own decisions and set his own hours. He had the spirit and outlook every entrepreneur must have. It’s not about the money.

It’s about the drive, the excitement, the experience, and the freedom. It doesn’t matter how many suits a man owns, he can only wear one at a time.

Expect the 7 Unexpected Running a business is tough. There is really no other way to put it. Remember when Dorothy was making her way to the city of Oz, and ran into all sorts of obstacles and uncertain situations along the way?

Well, running a business is much like Dorothy’s incredible journey.Around every turn, there will be

obstacles that you must quell before you can continue moving towards the ultimate goal of owning the business of your dreams. These obstacles will come in all shapes and sizes, and some will be very difficult to anticipate. Some, however, are very easily avoidable if you are both proactive and careful in making key business decisions. Obstacles are unavoidable, they are simply a part of business that you cannot escape from. They are, however, manageable. If you are able to effectively plan and anticipate these potential delays, it will transform the massive pothole in the road into a small, manageable divot.

Ask Yourself the 8 Tough Questions What differentiates me from my competitors? How long am I willing to continue working this job if things take longer than expected to get off the ground? How much money will I be happy with?

Where do I see this company in three years? These are the kinds of questions that need to be addressed in the early stages of starting your own business. An old saying says that if you fail to plan, you should plan to fail.

Asking questions about your company, what you want out of it, and where it is headed long-term will help you gain perspective on what you are actually getting yourself in to. If you are simply starting a website that sells small bracelets that you make in your free time, it is less important to ask yourself where the company should be in three years. But if you are serious about the business you are hoping to create, asking difficult questions helps you look at your company in a transparent, honest way. One of the first, and often most difficult steps in answering the complicated questions, is constructing a business plan.

About the Author Matt McManus is the founder of Bokos, a Minneapolis-based footwear company. The brand has been featured in the Star Tribune and Wisconsin State Journal. He is a private pilot and photographer.

Editor’s Note: this article originally appeared here.

10

COMMON STARTUP FLAWS LEADING TO AN EARLY DEMISE

BY MARTIN ZWILLING

1 2 ased on my experience as a mentor and an entrepreneur, if you fail on your first startup, you are about average. That’s not bad, but who wants to be average? Every young entrepreneur knows implicitly that startup success is a long, hard road. Statistics show that the failure rate for new startups within the first 5 years is higher than 50 percent. How can you improve your odds?

Of course, a real entrepreneur always takes a failure as a milestone on the road to success. They count on learning from their mistakes, and use the experience to move to the next idea. But why not learn as well from the mistakes of others, without suffering their cost, time, and pain? In that context, I offer you my list of ten top startup failure causes, seen over and over again:

3 4 5

NO WRITTEN PLAN. Don’t believe the old urban legend that a business plan isn’t worth the effort. The discipline of writing down a plan is the best way to make sure you actually understand how to transform your idea into a business. Take heed of the words of an old country song, “if you don’t know where you’re going, you might end up somewhere else.”

BUSINESS MODEL DOESN’T MAKE MONEY.

Even a non-profit has to generate revenue (or donations) to offset operating costs. If your product is free, or you lose money on every one, it’s hard to make it up in volume. You may have the solution to the world hunger problem, but if your customers have no money, your business won’t last long.

IDEA HAS LIMITED BUSINESS OPPORTUNITY.

Not every good idea is a good business. Just because you passionately believe that your technology is great, and everyone needs it, doesn’t mean that everyone will buy it. There is no substitute for market research, written by domain experts, to supplement your informal poll of friends and family.

EXECUTION SKILLS ARE WEAK.

When young entrepreneurs come to me with that “million dollar idea,” I have to tell them that an idea alone is really worth nothing. It’s all about the execution. If you are not comfortable making hard decisions, taking risk, and taking full responsibility, you won’t do well in this role. Remember, the buck always stops with you.

THE SPACE IS TOO CROWDED ALREADY.

Having no competitors is a red flag (may mean no market), but finding ten or more with a simple Google search means this may be a crowded space. Remember that sleeping giants do wake up if you show traction, so don’t assume that Microsoft or Proctor & Gamble are too big and slow for you to worry about.

6 7 8

NO INTELLECTUAL PROPERTY.

If you expect to seek investors, or you expect to have a sustainable competitive advantage against sleeping giants, you need to register all your patents, trademarks, copyrights, and trade secrets early. Intellectual property is also often the largest element of early-stage company valuations for professional investors.

INEXPERIENCED TEAM.

In reality, investors fund people, not ideas. They look for people with real experience in the business domain of the startup, and people with real experience running a startup. If this is your first time around, find a partner who has “been there and done that” to balance your passion and bring experience to the team.

RESOURCE REQUIREMENTS NOT UNDERSTOOD.

A major resource is cash funding, but other resources, such as industry contacts and access to marketing channels may be more important for

certain products. Having too much cash, not managed wisely, can be just as devastating as too little cash. Don’t quit your day job until new revenue is flowing.

9 10

TOO LITTLE FOCUS ON MARKETING.

Viral marketing and word-of-mouth are not enough these days to make your product and brand visible in the relentless onslaught of new media out there today. Even viral marketing costs real money and time. Without effective and innovative marketing across the range of media, you won’t have a business.

GIVE UP TOO EASILY OR EARLY.

In my experience, the most common cause of startup failure is the entrepreneur just gets tired, gives up, and shuts down the company. Many successful entrepreneurs, like Steve Jobs and Thomas Edison, kept slugging away on their vision, despite setbacks, until they found the success they knew was possible.

Note that the lack of a university degree or MBA is not even in the list of common failure causes.

In fact, we can all point to examples of successful entrepreneurs who dropped out of college, like Mark Zuckerberg and Bill Gates, but still went on to be way above average. The most important thing you can learn in school is how to learn.

The best entrepreneurs value “street smarts,” in addition to “book smarts,” to temper their passion with reality principles, like the ones listed here, to stay ahead of the crowd. It’s good to say you never make the same mistake twice, but success is even sweeter the first time around with no mistakes. Go for it

About the Author Martin is the CEO & Founder of Startup Professionals, Inc., a consultancy focused on assisting entrepreneurs with mentoring, business strategy and planning, and networking.

Martin for years has provided entrepreneurs with first-hand advice, mentoring and business plan assistance as a startup consultant. He has a unique combination of business and high-tech experience, and executive mentoring and connecting startups with potential investors, board members, and service providers.

Five Startup Lessons for Fast-Growing Companies

By Kit Hickey

Within our first month of publicly launching Ministry of Supply in June 2012, we sold more than 6,000 shirts and gained 4,000 customers. Our company grew fast because it had to. We were an adolescent trapped in a baby’s body — we had to learn how to sprint before we could learn how to walk, and we had some serious growing pains as we tried to scale production from 300 to 6,000 shirts a month.

However, we quickly realized that by empowering

our customers and empowering our company, we could truly grow the way we wanted. Everything we do comes down to empowering people to be their best.

As a co-founder, I focus a lot on how we can scale our team, our operations and our distribution.

We’re a startup, and face many of the same challenges that startups face. Here’s what we’ve learned along the way about managing fast growth.

Championship vs.

Ownership There are six members of our team, and we all champion different areas of the business.

For example, co-founder Gihan Amarasiriwardena focuses on product development and technology. Devin Cook, head of Customer Advocacy, spends all day thinking about how we can make customers as happy as possible. Over the months, we realized that we worked better as a team when we moved away from ownership and moved towards championship.

This philosophy ensures nobody feels possessive about his or her area of focus, while encouraging teamwork and collaboration. So while Devin may be focused on customer happiness, we all chip in with ideas and often have company-wide brainstorms about improving the customer experience. As champions, we’re all really proud of the areas we focus on and are encouraged to get others behind our initiatives.

Holistic Views of the Business I love knowing what’s going on in all areas of the business, and we’ve found that everyone the team does too. We have an open office space and are constantly talking and bouncing ideas off of each other throughout the day. A few months ago, we realized that our communication wasn’t great despite the fact that we spent all day talking – some people didn’t know what was going on in various aspects of the business because decisions get made so quickly and a lot of decisions get made outside of the office.

We’ve been trying to get better at making sure that everyone in the company knows what’s

going on and has a holistic view of the business. Being transparent and giving everyone the opportunity to know as much as they can enables everyone on a team to be their best.

Agile Problem-Solving We act fast whenever we see problems. When we realized that some of the shirts we were shipping were running too slim, we halted production, created a new pattern, trained our manufacturers, and got better-fitting shirts on the market in three weeks.

Being able to adapt quickly and iterate in real-time is a huge benefit of a startup and we will forever try to retain that ability. In this example, by acting quickly to solve a problem, we were able to minimize exchanges — and more importantly, make our customers happy.

Technology Is in Our DNA As a fashion brand born out of MIT, we use technology to create the best products possible — from our use of thermal mapping

to optimize venting in our Aero pants design to the NASA phase-change performance materials we use in our Apollo shirts.

We truly believe that technology can improve everyone’s lives and we democratize technology through apparel. As such, we don’t stop at the use of technology in product development; we leverage technology in every touch point of our brand.

Brand Is Culture At Ministry of Supply, we all live and breathe the mission. We are intentional

About the Article Kit Hickey is the co-founder of Ministry of Supply, a brand which is inventing the future of men's professional wear. The company has been featured in NYT, TechCrunch, Inc., Forbes and Elle Magazine. In addition, Kit is a lover of mountain sports and has half an MBA from MIT. Follow her: @kit_hickey

about hiring people who fit both our brand and our culture. When we take company retreats, we challenge ourselves to be our best. Our last one included hiking and winter camping in negative degrees. We want our customers to be their best and our employees to be their best. Everything we do comes down to that.

Obviously a startup is a tremendous amount of work and nothing is certain.

However, by staying true to our mission and empowering our customers and employees, we know that we’ll be here for the long haul.

THESE 8 BUSINESS BELIEFS ARE KILLING YOUR STARTUP

By Ana Yoerg

“The common rule of thumb is that of 10 start-ups, only three or four fail completely.

Another three or four return the original investment, and one or two produce substantial returns. The National Venture Capital Association estimates that 25% to 30% of venture-backed businesses fail,” according to Wall Street Journal reports.

Yet VC’s like Marc Andreessen have publicly noted that there is no rational reason for it. We have the talent, we have the ideas, and there is plenty of market demand for smart products and killer services. Our current economy has enough space to accommodate the growth of one hundred times more startups into fully-scaled, sustainable businesses.

So, why aren’t there more Dropboxes and Airbnb’s?

Is the startup success story fated to be like a Hollywood wonder, where only a few actors in LA finally make it to the top?

Possibly. But maybe it’s because too many people are clinging to old business beliefs.

Teaching Old ‘Business Beliefs’ New Tricks Now, if you’re a relatively young startup founder, it’s strange to think you can have “old”

“

The National Venture Capital Association estimates that 25% to 30% of venture-backed businesses fail,” according to Wall Street Journal reports.

business beliefs. It seems like something reserved for silver-haired COO’s at Fortune 500 companies, rooted in traditional business practices from decades of experience.

But first-time entrepreneurs do have old beliefs.

They come during those “I have no idea what I’m doing” moments, when to find an answer to a new question or challenge, they fall into the trap of Googling or getting counsel from peers — both of which result in a mountain of startup advice that doesn’t apply to the problem.

So, what do they do? What any human would: they turn to their own experience for answers.

And that is where the dangerous moment comes … when old, life adages are not only false, but when clinging to them blocks their chances of success.

Here are a handful of ‘old’ business beliefs that could be killing your startup:

1

Follow my vision.

Ever hear the one about the executive who surrounded himself with “Yes” people? He always felt confident in every business move, but all those yes-es caught up with him in the end when the customer said “No.” Too many entrepreneurs rely on generic market research or common assumptions to confirm their vision and seemingly “no-brainer” solution. If you have honest conversations with the customers whose problems you are trying to solve, you’ll learn what people really want, not what you think they want.

2

In business, this means pricing a product based on the sales margins you need in order to make the profit that will work on your balance sheet. Ignore that me-first instinct. Instead, work backwards and first find out how much a customer will pay. For instance, at last year’s Lean Startup conference, Lit Motors explained how they built a simulated dealership experience just to find out if their product had a viable market. When 15.7% of showroom visitors put money down on the spot, they knew they could move forward with their pricing strategy.

3

exist. What ultimately drives them to purchase is psychology and an interactive experience. To make people buy, make it easy for them to behave the way you want them to; focus on interaction design, not visual design. An upscale boutique may have hardwood floors and relaxing music, but they’re not selling the kind of volume as the franchise grocery store that carefully places high-margin products at eye-level.

Figure out what you need, then ask for it.

5

Ah, the popularity trap! In business, this translates to the the problem of vanity metrics like visitors, views and followers, and thinking that Facebook “Likes” are going to impact your business. Ditch those and focus instead on what directly impacts your business’s bottom line: conversions, retention rate, customer referrals and even (gasp!) revenue.

Perfect planning = excellent execution = success.

Note, however, that metrics by themselves are not enough; as Ash Maurya has said, [metrics] will only tell you that something is going right or wrong. To understand why and to get to the real insights, you need to get to the people behind your numbers — the customer.

Think about all of the planning that goes into a wedding, and how little of the detail anyone remembers from it.

So, what if the timing is a little off on the march, or if the groomsmen’s ties are a slightly different shade than the bridesmaid dresses.

In the same way, your product release is important to you, but if everything isn’t 100% as you planned it, will anyone else even notice, or care? No. Just get your product out the door so you can begin the process of learning and iterating. As General Patton once said: “A good plan, violently executed now, is better than a perfect plan executed next week.”

4

People buy pretty things.

No, people are tempted to buy pretty things. That’s why fashion magazines

Have lots of friends.

6

Customers are loyal.

Dogs are loyal, customers are not. Maybe you make some nice moves and get a handful of seemingly dedicated, loving customers, but they’re not going to stick with you if you mess up more than once. Given that so many startup founders are millennials, who are known for their constantly shifting brand loyalties, this may already be apparent.

7

So, if all customers are fickle, how do you keep them? This is where startups have an edge on bigger businesses. They’ve gotten notorious for their tendency to pivot, but pivoting is a great way to acknowledge that your current path is not earning or retaining enough customers and that you need to shift gears. If more companies had short runways and had to make these hard decisions sooner rather later, there might be fewer fizzles, or long, drawn-out product failures.

audience. Startups need to dedicate resources to marketing, because as sexy as the “we went from zero to one million users with no marketing” story is, it’s just not the norm. But this is again where timing comes into play.

If it ain’t broke…

Each bag has a large number printed on it, and that number represents the amount of nourishment (i.e, lunches, vitamin supplements, etc.) children in need will receive via their in-kind donation to the WFP. It’s a built-in story that gets people thinking and talking about the product and mission in the same breath, which is the kind of word of mouth marketing that turns customers into brand ambassadors.

Tradition assumes that every business’s goal is to achieve product-market fit, to find that special formula that will skyrocket sales and ensure long-lasting success. But if you don’t innovate and change the formula, your product will eventually become irrelevant and customers will get bored and move on (see #6).

The best startups are the ones that have struck fear into large companies in their space because of their ability to not only iterate faster, but to be constantly moving targets themselves and therefore harder to pin down and crush as competition. So, even if it’s not broken, fix it.

Strive for continuous innovation; it’s as essential as changing the seasonal inventory in a retail store. Keeping things fresh for your customer makes them come back for more.

8

First product, then marketing.

In a way, this is a correct belief because everything needs marketing. People, places, products… you can build it, but they won’t come unless you communicate the value to the right

Consider marketing as a component of your product, not a supplement or something that comes after. For example, FEED Projects are like the Toms Shoes of bags, but rather than push their mission through advertising and storytelling, they’ve built it physically into the product.

About the Author Ana Yoerg is a founding partner at Pivotal Pod, a content marketing agency that specializes in working with startups. She is, at heart, a word-nerd who believes that great branded content (e.g., creative ad copy, email, blog posts, bylines, video) coupled with well-timed, agile PR campaigns can dramatically boost user growth and build customer engagement for any startup.

Pivotal Pod is the producer of the Lean Startup promo video, “What would an entrepreneur do?” featuring Marc Andreessen and Eric Ries.

Clients have included Opera, Wikia, Mobile Theory, Rumgr, VegasTech, and Explore.org, a project of the Annenberg Foundation.

Accept responsibility for your life. Know that it is you who will get you where you want to go, no one else.” – Les Brown

Getting Ahead: Don't Forget to Feed Your Spirit

By Mindy Thomas shows that 75 percent of the gainfully employed would rather “ Research take a raise than have more time off. In other words, people are NOT taking time for themselves. They are not engaging in doing things that nourish their being or feed their spirit.

“

used to be). Remember those days when you used to laugh hysterically with your friends or family? Remember how damn good it felt? Filling your spirit with nature and meditation could also make you go inward, resulting in feelings of gratitude and intense pleasure.

As Blake Shelton from the popular show “The Voice” might say, “What kind of bull crap is this?” To the contrary, Blake definitely knows what I’m referring to because it’s clear that one of the ways Blake feeds his spirit is through country music.

In today’s never-ending world of staying on top of your game, it has become increasingly difficult to stay supercharged. Whether you are an entrepreneur, a college student, or someone who is looking to make career changes, empowerment can come in different forms, including feeding your spirit.

One of the things I have observed with people who are trying to make changes in their lives is that their level of unhappiness continues to get progressively worse. It’s not just their job that is making them anxious, depressed, or downright miserable. I am finding that 9

times out of 10, these same people rarely, if ever, make quality time for themselves.

In fact, people go for weeks, months, or years without feeding their spirit.

Research shows that 75 percent of the gainfully employed would rather take a raise than have more time off. In other words, people are NOT taking time for themselves. They are not engaging in doing things that nourish their being or feed their spirit.

Let me provide a little more clarification about what feeding your spirit looks like.

Feeding your spirit simply means enjoying yourself and doing things that bring you happiness.

It’s about opening your heart and finding ways to bring a smile to your face. It’s about making time for fun and laughter.

Feeding your spirit reminds you of who you are (or who you

You see, when we spend more time working our tails off and thinking about everything outside ourselves, we lose ourselves. We forget about us.

Ultimately, we end up starving our spirit. Who’s kidding whom?

You know whether you’re starving your spirit or not. It’s easy to figure out. Are you creating any free periods to have fun? If not, you might want to look at ways to incorporate time into your schedule to connect you to your heart, in turn lifting you and your vibrational levels up.

Just last night, I saw a wonderful picture of a friend on Facebook who had a brain hemorrhage one year ago. She posted these words, “With my salsa teacher and salsa friends who gave me back my joy and love of dance.

Dance keeps me young and alive!”

This morning my client, who is a crackerjack of an attorney but bored out of her mind, proclaimed that she would return to her yoga practice. After attending a class last week, she

realized how grounded and clear she became after taking time to fill her spirit. She feels infinitely more empowered by allowing herself “feel good” time.

Another client sent me a text message a few months ago telling me he was in NYC for the weekend. This was his way of “filling up his spirit.” He adores big cities and had been down and out for more than three years after his layoff and, yes, he agreed, he had done nothing to replenish his spirit since the layoff.

your cell phone, being quiet for two minutes, getting a massage, playing with your pets, cooking a nourishing meal for your family, and entertaining your friends are all great examples of ways to feed your spirit.

This past summer another client called me from a Phillies game.

Even though he adored baseball, he hadn’t been to a game in two years. This man sounded so revived and energized as a result of making this incremental change. I was truly happy for him.

However, feeding your spirit is remarkably different and unique for each person. The question you need to ask yourself is what helps to open your heart?

What is the one thing you could do for yourself this week that would make you feel more cheerful and connected? The other question you need to ask yourself is what is this going to cost me if I don’t take the time? You and I both know there’s always a cost.

Listening to music, singing out loud, driving with the convertible top down, breathing in fresh air, going on nature walks, sky gazing, visiting the beach, the mountains or a lake, turning off

I would like to suggest that you consider being kinder to yourself as a possible way of staying supercharged

About Mindy Thomas Mindy Thomas is a cutting-edge career consultant, professional résumé writer, professor, and entrepreneur.

Through her company, Thomas Career Consulting located in Philadelphia, she leverages her 25-year business background with a solid foundation of career solutions for challenging times. Email Mindy at mindy@thomascareerconsulting.com, follow her on LinkedIn , and visit her website to learn more about her expert career consulting services.

as you drive towards your goals of getting your business off the ground or starting a new chapter in your life.

Think of yourself as if you are a garden. Nurture yourself just like that garden. You deserve it. Your spirit craves it. And, there’s no question that you most definitely are worth it.

Brand Experience

Operating A Business in the Age of the ‘Brand Experience’

By Julius Talvik The business world has been through a remarkable transition in the last three decades, a time that has seen traditional concepts of brand move away from the physical to the virtual world. The preeminent philosophy of these times came to be embodied in a so ware development term known as “user experience”—what a customer experiences in electronic formats.

The difference, it was believed, between a “good” user experience and “bad” one was the difference between

a company’s success and its failure. Thus, user experience became the key to thriving in the digital revolution.

In the last decade or so, however, the preeminence of user experience seems to have come full circle. There has been a shi back toward the physical world in which all aspects of a business—its products, architecture, printed materials, so ware, mobile applications and everything in between—have to be considered as a unified whole in order for companies to succeed.

The story of how we got here, and what it means to businesses moving forward, is a fascinating tale that holds lessons for anyone willing to tune into its subtle, but powerful messages.

The traditional meaning of the term “brand” emerged in the late nineteenth century and evolved slowly but steadily for most of the twentieth century. A brand was an idea applied to a physical thing; most o en it was a product, but could be a service, too. A brand encompassed everything the product or service promised to the customer on rational and emotional levels.

Enter the Personal Computer Between the advent of the personal computer in the early 1980s to the mid-1990s, however, the notion of brand began to seep into the electronic space—the so-called “virtual world.”

The concepts of branding that once applied to physical things got transferred to digital assets such as websites and operating systems. The old notions of brand did not go away, per se; The Coca-Colas and McDonald’s, the Tides and the Chloroxes of the world still existed – but the electronic world took center stage.

The future of brand was virtual and user experience trumped all. It is important to consider the etymology of the term “user experience.” It is a so ware term for the relative ease with which a customer can interact with a piece of so ware to accomplish some desired goal, ideally a goal involving the purchase of product.

Two leading examples of this shi are familiar enough: Apple and Amazon. The “insanely great” Apple operating system and Amazon’s “crush-all-competitors” online marketplace transformed the digital world. In 1999 or so, a third player entered the scene when Google launched its minimalist Web experience.

Soon, all the complexities of the Internet were reduced to a single box on a white page. The Internet, Google promised, could be had for the simple price of a few search terms and a click of a mouse. It was the ultimate user experience and several multi-billion-dollar fortunes materialized out of that li le box on the white screen.

During this time, new verbs entered the lexicon. Business leaders fre ed that their companies would get “Amazoned.”

Consumers mastered the art of “Googling.” Suddenly, user experience was all anyone could talk about.

Boomerang Effect Then along came the iPod and, with it, iTunes. As if by magic, the virtual and the physical were once again reunited. User experience and brand, it seemed, were not separate and mutually exclusive things, but different aspects of the same concept. The user experience is the brand experience, and vice versa.

Not only was the iPod a beautiful physical product, an icon of industrial design, but its operating system and the brilliance of iTunes were perfect matches for the simplicity of its design.

Stepping into one of Apple’s new retail stores, it was as if the Apple operating system had inhabited the “geniuses” in the blue shirts, the retail experience and even the very architecture of its stores. If one could use an iPod, Apple promised, one could navigate the store just as easily.

Almost overnight, business experts who only a few years earlier had extolled the age of user experience and cautioned against ge ing Amazoned were saying that ge ing “Appled” was the real threat. Today, even Amazon and Google, those paragons of the user experience, are manufacturing consumer devices.

Kindle and Google Glass are but two examples among many.

Likewise, Amazon’s warehouses and Google’s campus in Mountain View have become physical extensions of their parent companies, much as Apple’s retail stores and its Cupertino headquarters seem to embody the very essence of Apple.

Implications for Business While this shi to the brand experience is an interesting turn of events, what is the business leader of today to make of the evolution? To me, it means that to stay ahead of the technology/content curve, companies will have to align all brand touchpoints—the physical and the digital manifestations of their brand—around their core principles.

This is the “brand experience.”

Increasingly, technology innovation will merge with new hardware devices to connect the disparate consumer decision points of our lives. This is exemplified in the much talked about “Internet of things” where every device we own—our cars, our refrigerators, our wine cellars, our televisions and more—will be networked and controlled through handheld smartphones, laptops, tablets or something else not yet invented.

In this world, where physical and digital are one, the brand experience will become dominant. The philosophy of brand

experience is already transforming the retail se ing, but it will surely infuse restaurants and entertainment soon enough.

To succeed, and in some cases to survive, companies will have to learn to capture value from their own virtual and physical infrastructures. The Apple Store turns the highest profit per square foot than any other, even Tiffany & Co. Apple didn’t get there selling diamonds and platinum, mind you, but by applying its exceptional “brand experience” to everything it does—its products and its branded physical environments at the same time.

Businesses will likewise have to develop a consistent voice and tone on all channels. In essence, they will need to create a brand operating system in which the things that work on one device work on all others. This will require a deep understanding and appreciation for the company’s brand pillars and how those pillars apply to each medium and guide the development of future iterations.

Where do we go from here?

The evolution to the age of brand experience will have many beneficial and largely predictable effects on global industry, as well—a sort of 21st century multiplier effect. These impacts will be felt on both sides of the equation, as the ecosystem necessary to support it all will spread into retail, consumer products, shipping and architecture as well as in the sphere of digital design and development.

Companies will have to focus everywhere at once and think hard about how the personalities of their carefully cra ed brands get translated into physical and digital things, so that customers can immediately recognize the brand operating system wherever they encounter it. This will require simplification and streamlining to a degree never seen before.

About the Author Julius Talvik is co-founder and Chief Innovation Officer of unison.net, a brand innovation company in Washington, DC, that develops physical and digital products for companies around the world. He is multi-talented creative director with expertise that stretches from technical development, identity design, and experience design to music production, print collateral and product packaging.

Connect with him @UnisonBrand ***This article originally appeared on TheNextWeb.

Legal Corner

Why Startups Hire Their Own Lawyers

By Daniel Doktori Airbnb challenged local hotel zoning laws, Uber took on taxi licensing requirements, and Pinterest built a business around posting copyrighted images. Startup companies that simply follow the rules risk getting left behind. The right lawyer can mean the difference between pushing the envelope and breaking the law. Many startups struggle to decide whether and when to hire a lawyer and how to make the most of their in-house attorney once they do.

I asked several prominent General Counsels of tech companies (and one VC fund) about their work and about how their companies approached the decision to hire them. Here’s what they said.

“Being general counsel is like being Tom Hagen in the Godfather – you’re a Consigliere,” the top lawyer at a New York City startup recently explained. But to achieve that kind of trust, “you need to understand where the founders are coming from – the sacrifices they had to go through to build their business.” Startup companies hire for “fit” into a company culture that celebrates and demands risk-taking – a quality not typically associated with lawyers. So when startup CEOs recruit their first inhouse attorney, they look for someone who can replace “no, because,” with “yes, if.”

Why Do Startups Hire Their Own Lawyers?

“Lawyers are not engineers. They don’t reliably produce products on a daily basis, but instead provide a strategic, long-term value proposition focused on smart growth and risk-management,” explained one Startup General Counsel (GC).

A typical assignment for a startup GC arises when a business idea confronts the question: how can we do this legally? The answer generally falls into one of several categories: how to protect intellectual property; how to hire, fire, and compensate employees; how to hold regular board meetings and ensure company officials honor their duties to shareholders; how to advertise in compliance with federal rules; how to enter into agreements to partner with other companies; how to maintain user privacy; how to sell things online; how to respond to government requests for user data.

GCs pride themselves on their ability to “get smart fast” on legal issues facing the company (it helps that they no longer get paid by the hour). When getting smart fast is either not smart enough or not fast enough, the general counsel acts as a savvy procurer of legal services by knowing which lawyer to hire for what and how much to pay.

As one explains, “I ask myself, ‘can we stage the legal costs?’” Another adds, “I come in with some very basic questions and I say, ‘for the love of god, don’t write me a memo. Let’s contain the legal costs to X.’ Then it’s lather, rinse, repeat. I do some more research and see if I need more from outside counsel after that.”

When Do Startups Hire Their First Lawyer?

Conventional wisdom indicates that a startup’s first lawyer will have had four to 10 years of experience in a broad-based corporate practice, preferably one where the clients were themselves startup companies. Less conventional wisdom exists on the subject of when a startup company should hire that first in-house lawyer. Some startups look for a costbenefit threshold of legal bills (about $300,000) that can be managed by bringing someone in house. Some see company size as the relevant metric, with one GC asserting that once a company has 10 employees, it should be hiring a full-time operations person to handle Chief Operating Officer duties (often times a lawyer who is not referred to as solely “general counsel”).

How do Startup General Counsels Work?

time. Sometimes, it’s a lack of stomach for the attendant risk: “We’re not taking any heavy actions without getting ‘adult supervision.’”

At a startup company, speed counts. Driven by an ethos of “trust but verify,” many Startup GCs stress the importance of following their instincts. “You can say what you think and then go back and check.

Things are moving fast, so the mostly right answer today is better than the perfect answer tomorrow.”

HOW DO STARTUP GENERAL COUNSELS INTERACT with the CEO?

As a result, the single most important tool for a successful startup general counsel is a big rolodex.

“Google is great. Friends are better,” quipped one GC, but Google remains first stop in the standard three-step process of “Internet research,” “outreach to the legal network,” “hire outside counsel.”

As one startup lawyer puts it, “I’ve come to realize that every answer in the world is out there [on the Internet]. The decision is whether or not to spend the time finding it.” Internet research is important in priming the set of questions to ask one’s colleagues, because they have other priorities as well. “You need to pick your spots” when asking colleagues for help.

One way to pick more spots is to grow your network.

One General Counsel created a group of local general counsels upon being thrown into a job which seemed overwhelming at first. “I said let’s share information – you go first!” Another General Counsel joined the local State Bar Association’s corporate counsel group.

“I now have buddies around town.”

A good startup general counsel has a keen grasp of what former Defense Secretary Donald Rumsfeld termed the “known knowns,” “the known unknowns,” and the “unknown unknowns.”

Generally, all litigation is farmed out. Further, a general counsel may seek insight from outside counsel in case of lack of experience, or lack of

Being perceived as the “no guy” ranks among a startup general counsel’s top fears. “You don’t want to be the guy at the end of the hall that just says ‘no,’ because eventually people don’t incorporate you into the conversation.” Another explains, “if you want the CEO to trust you, you need a track record of not always saying no.” Some general counsels have even eliminated “no” from their vocabulary.

“It’s not the GC’s place to say no. It’s the GC’s place to expound on the risk and if there is something that is super risky, make that clear, but leave the call to the CEO.” A problem-solving stance and a deep understanding of the company’s product help GCs avoid unnecessary nos.

More than avoiding trouble, some GCs see their understanding of public rules and perceptions as an opportunity to lead. One GC explained that he filters his own legal advice through the lens of the customer: “If you’re reading [the customer] correctly,” and you have an internal reputation for doing so, your legal advice, whether restrictive or progressive, “will be an easy sell.” * This article was developed through a series of interviews generously granted by the following general counsels: Sarah Reed, Charles River Ventures; Brian Chase, Foursquare; David Pashman, Meetup; John Geschke, Zendesk; Sarah Feingold, Etsy; Doug Hicks, AVOS Systems; Jared Cohen, Kickstarter.

About the Author: Daniel Doktori is an associate in the emerging companies practice at WilmerHale in New York City and is the co-founder of the Harvard Law Entrepreneurship Project. Follow him on Twitter @ddoktori. * The article first appeared in Tech Crunch on January 4th, 2014.

How We Grew Our SAAS Startup’s MRR from 0 to over $2k in Under One Month

M

onthly Recurring Revenue (MRR) is a critical statistic in the startup industry. There are many key metrics to monitor when building your company, but before you can focus on churn rates or lifetime value of customers, you first need monthly income. This can be quite a challenge when starting out.

Friends and family may be willing to test your product, but when the time comes, how many are ready to pull out a credit card for your service?

We are a Competitive Intelligence SaaS startup based in Berlin. We not only created a comprehensive plan that took us from 0 to over 2K in under one month, we documented our learning experience through the Preparation, Private Beta, and Open Beta phases. Here’s our in-depth case study on how we gained traction while making income that helped us secure funding.

Preparation Phase

Set Up Your Blog ASAP

Set Up a Launchrock Page

Become an industry leader and create buzz before you launch. Consumers don’t want to be sold to; they want valuable resources from a source they can trust before they buy. Be that source. Answer industry questions, make yourself valuable. If people trust you, they are more likely to use your product.

Launchrock makes things easy in the beginning. If you follow the lean startup method, you know that you need a solid product/market fit. Launchrock can help you determine whether there is enough of a fit to build your idea by experimenting for initial interest. Set up and then market your page via industry relevant channels. We budgeted $50 for LinkedIn ads, and our conversion rate was over 15%. Set a goal for success: it could be a 10% conversion rate of visitors to signups. Within one month, we had 120 signups, which exceeded our goal – Rivalfox would launch.

While you could build a launch page yourself, there is no reason to reinvent the wheel. Launchrock already has growth hacking functionality built in. After someone enters their email address, it automatically prompts them to share it, and allows you to set your own growth hacking parameters.

For instance, if you invite five customers, you will be rewarded with access to our private beta.

Blogs are effective at driving traffic, which is especially critical in the very beginning, when it is often only friends and family trickling to your site.

Hubspot found that businesses which blog more than once per week add new blog subscribers at twice the rate than businesses that blog just once per month. The report also showed that blogs that have accumulated at least 51 posts see 53% more traffic than blogs with 20 to 50 posts. Blogs with more than 100 posts see three times more traffic, while those with over 200 posts see nearly 4.5 times as much. Adding content steadily can create serious results.

We launched our blog prior to Open Beta and received well over 10,000 page views within six

months. The traffic was great, but the conversion rate from blog readers was lower than we had hoped, as were newsletter signs ups. We decided that we needed more prominent calls to action.

We introduced a screen for newsletter sign ups and linked with Aweber – this was featured front and center and increased our newsletter sign up 100%. We also introduced a popup which opens after ten seconds and asks if they want to check out the Rivalfox page. This popup increased the number of people going from the blog to the trial page from 5%-15%, which skyrocketed the number of leads.

Consider Guest Blogging B2B marketers who use blogs generate 67% more leads per month than those who do not.

Building an audience and establishing trust takes time, but sometimes this can be sped up through guest blogging. With guest blogging you are gaining exposure to a wider audience who will eventually know and love you too. There is also an authority that comes with guest blogging.

Anyone can start a blog, but readers assume that an invitation to guest blog means that you are an expert. So far, we have taken two stabs at guest blogging that did not result in a ton of traffic.

When considering this option, be sure to reach out to blogs with a huge following consisting of your target audience. Shoot for the stars; don’t think too small.

Take Advantage of Social Media Social Media allows you to create buzz about your company, share all your amazing blog posts, track what people love and hate about your competitors, and build relationships with key influencers who may help you down the line.

First, figure out what channels work best for your product. This will be an experiment. Start with activity on all major channels and track the volume of traffic and interest that comes from each source, then bump up your efforts on those sites. For us, as a B2B company, most of

our social media leads come from Twitter and Quora. We had plenty of views from LinkedIn, but they didn’t convert. Mostly, these LinkedIn visitors were in the competitive intelligence industry and, while they might be interested in what we are doing, our product is not geared for their use. Quora turned out to be a big winner for us; one person answered a question about CI and mentioned Rivalfox. It brought us a lot of leads and the conversion was over 15% from visitor to trial.

Private Beta Leverage Your Contacts Start by finding Beta/Alpha testers through your current network. This can be friends, family members, and professional connections. Our founders had launched a startup previous to Rivalfox, and the contacts they made through that venture proved invaluable.

Utilize Startup Directories and Services After you have worked out some of the major product kinks, it is time to get your startup noticed by early adopters. We utilized dozens of startup directories and found hundreds of Beta users, some with significantly higher conversion rates than others.

Erli Bird – A directory which allows early adopters access to different Beta products and highlights what services are going to launch soon. According to American Genius, “Erli Bird converts early tech adopters into a viable user base for startups before they spend time on development, giving early stage startups a means to test their ideas and gauge reactions prior to investing time and money in an idea that could flop or succeed wildly – either way, startups will know before they go public.”

Betali.st – An awesome tool that allows early access to new startups each month.

We gained over 400 signups in two days with a 30% conversion rate from visitor to trial! One factor to note when considering to use Betali.st is that you have to wait several weeks until you are featured, unless you pay a fee. At Rivalfox we didn’t pay that fee, but if we had to do it all over again, we would definitely pay for better timing.

Betali.st would be extremely helpful in the open beta phase. We were featured during our closed beta phase; once we emailed those 400 people to announce our introduction of open beta, only half signed up.

CSSMania – CSSMania is the worldwide leader of the CSS Showcases genre. It is a website that features homepages with great design. Of course, success really depends on your target demographic, but for us, CSS Mania led to 15 signups.

KillerStartups – Killerstartups is a site that allows you to submit your startup by category. It takes three to six months to review your startup and possibly publish your article, or your could pay $167 to be featured within 48 hours. We paid this fee since the traffic to the site was really high (even higher than betali.st), but it was a complete fail. Our $167 only led to four sign ups.

Producthunt.co - Producthunt is a daily leaderboard of the best new products. You can self post a link to your product. Our post brought us 14 leads in one month.

Other Startup List Resources

● ● ● ● ● ● ● ● ● ● ● ●

startupli.st market.thenextweb.com news.ycombinator.com Chrome Store startups.fm feedmyapp.com crunchbase.com thestartuppitch.com startups-list.com angel.co f6s.com webdevtwopointzero.com

Gather and Listen to Feedback Customer feedback is crucial in the Beta phase.

We installed and quickly fell in love with Intercom, an awesome tool that lets you generate automatic messages after sign up and, after 29 days, communicate with handpicked customers. Here is an example of an automated message with the survey:

Hello Anton Thank you for using our product. We’re constantly working to improve our quality of service as we progress through our early stages of beta, but here are some features that you can expect in the near future: ● Save time by selecting special areas on the website you want to monitor and more precise results

name those to get

● Benchmark your competitors in an easy dashboard overview. Additional: More KPI’s to come -> Drop us a short email if you wish something specific ● Reports are going to be more precise and focused on the essential information So if at all possible it would be great if you could tell us what we can improve (it only takes 2 minutes): http://survey.io/survey/5a4ba Best regards, Oleksandr Ivanov Co-Founder & CEO PS: Learn more about Competitive Intelligence in our Blog.

Open Beta Use MailChimp to Announce Open Beta When we were ready to launch out Open Beta we already had a list of 700 people from our combined efforts including our blog and the signups from Launchrock and betali.st. We announced this through MailChimp and it garnered us 300 signups.

To Pay in Advance or Not to Pay in Advance? That is the Question.

At first, we started with credit card required, which led to 20 customers who signed up but only eight which remained customers after the trial. After one month, we switched to no credit card required – many more people signed up for the free trial and our conversation rate grew 5-10%.

Key Lessons We received plenty of leads on a daily basis, but the average breakdown looked like this: Organic – 31.85 % Referrals – 12.7 % Social - 28.12 % Direct – 26.5 % After much analysis the key lessons we learned were:

Start blogging ASAP Our blog pushed thousands of visitors to our website prior to launch and allowed us to start building our valuable email marketing list early.

Connect to Industry Leaders for Opinions

Don’t Be Afraid to Ask People to Pay Early

Using social media allowed us to connect with industry leaders who shared our content and provided invaluable insight into our product.

If you ask people if they like your product, most will say yes. The real question is: do they like your product enough to pay for it? The earlier you can get this information (and the earlier you can start making revenue) the better.

Experiment in a Controlled Way While reading advice by fellow entrepreneurs is helpful, there is no perfect formula for how to launch your product. Do controlled experiments to see what works best for you. For example, by reducing our Trial Period to fourteen days instead of thirty, and using Intercom to contact people and concentrating on people who signed up for the trial, we increased our conversion from 4.7% to over 14%.

Concentrate on Inbound Leads Connect your sales team to inside leads and concentrate on making those first customers 100% happy. Use Skype, intercom, or targeting email campaigns to check in. If those inbound leads love your product, they will share it, creating more inbound leads, which are so much easier to go after than cold calls.

About the Author Kalie Moore is head of content marketing for Rivalfox, a service that monitors your competitors, and gives you comprehensive reports on their activity with actionable business intelligence. She also writes about international startup ecosystems on her blog Berlin Startup Girl. Follow Rivalfox and Kalie on Twitter.

For Employer and Employees Alike, Automated Payroll is a Win-Win

By Tabitha Jean Naylor For businesses that only have a few employees, performing payroll duties manually usually isn’t too much of a hassle. But for businesses that have a half dozen or more employees, manual payroll processing is a task that is not only cumbersome, it can lead to errors that an automated payroll system wouldn’t make. There is a tremendous amount of information to take into account when calculating payroll including salary rates, tax records, government rules and regulations regarding hours and wages, and on and on it goes. There is no really no margin for

error in making all of the necessary calculations involved in payroll processing because it involves the livelihood of the people who business owners depend on most – the employees.

Automated payroll systems make life easier for both employers and employees. Businesses can save time and money and enjoy better peace of mind knowing that their paycheck and benefits distribution needs are being fulfilled with maximum accuracy and efficiency. For employees, the convenience is unprecedented.

Paychecks are automatically deposited into the

employee’s bank account on the specified pay day which eliminates the need to make timeconsuming trips to the bank and waiting for checks to clear. And they still have access to all of the pertinent information about each pay period including the number of hours worked, their benefits breakdown, and other information.

With an automated payroll system, payroll expenses can be monitored instantly which can be beneficial in graphing company financial data and establishing a forecast. With this information more quickly and efficiently available to employers, decisions can be more easily made regarding hiring needs. Also, salary increases and other adjustments can be made much more quickly in order to make determinations about how payroll is affecting the company’s bottom line.

And if there is one thing that most employers dread about doing payroll manually, it is calculating and managing tax information. The stress and confusion normally associated with figuring out employee tax data is virtually eradicated when an automated payroll system is implemented. All tax records are kept in a database and are quickly and easily retrieved.

Payroll is the most essential element of any business and yet it is the least enjoyable for employers to deal with when the work involved has to be done manually. But the stress of doing payroll can now be a thing of the past when businesses choose to make an automated payroll system part of their workplace infrastructure.

When it comes to automated payroll systems, there really is no downside.

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Payroll Can Be a Pretty Tough Process

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millioner

9 Ways to Make A Million

By Steve Tobak

It’s a safe bet that more ink and paper have been expended in the name of how to make money than just about any topic. In case you’re wondering why, here’s a hint: Do you know how the dollar sign originated? Try overlapping the letters U and S, as in United States.

So how do you get ahead — and stay ahead — of the ever-increasing cost of living? Surprisingly enough, there’s no secret to making big bucks. The problem is people want it to be easy, like a winning lottery ticket, a magic formula for timing the stock market or a get-rich-quick pill.

Capitalism and the American Dream are both alive and well, and with good reason. Who would have thought basic staples like food, shelter, transportation and healthcare would cost so damn much? We used to think of a millionaire as rich.

Pretty soon that’s going to be the poverty level.

Sorry to break this to you, but you live in the real world, not a fantasy novel. And while there is no silver bullet for making it big, it isn’t rocket science, either — unless you happen to be Tesla and SpaceX founder Elon Musk. For the rest of us, this is how real people make gobs of money in the real world.

1 2

Start with nothing and grow up in a tough neighborhood.

Lots of wildly successful people started with nothing and fought hard every day of their lives to make it. Starbucks founder and CEO Howard Schultz and Goldman Sachs CEO Lloyd Blankfein grew up not far from where I did in Brooklyn. Competition and adversity breed great leaders.

Own your own business and live like a monk.

Two-thirds of America’s millionaires are self-employed.

The vast majority are small business owners who live on budgets well below their means, invest their money, and never received any kind of inheritance, according to the book “The Millionaire Next Door.” Do you really need that new car or iPad? Nope.

5

Take risks, make mistakes and trust your gut.

Most people are either ridiculously risk averse or take dumb risks they know they shouldn’t take. Take smart risks, the ones that make sense to you. Trust your gut.

You’ll be wrong more often than not but that’s okay.

Nobody ever got ahead by playing it safe.

6

Manufacture your own luck.

8

Stay married.

Follow the yellow brick road ... to Silicon Valley.

The high-tech industry has created enormous wealth for millions of people, and not just top executives, either. Microsoft alone accounts for an estimated 12,000 millionaires among former or current employees. The reason? Technology startups are the land of equity and opportunity.

4

7

Do what you love ... and pray there’s a market for it.

Steve Jobs said, “The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.” He was absolutely right. If you follow your passion — and so do customers — the money will follow.

3

two companies and is not much of a delegator. The same was true of Steve Jobs when he ran Apple and Pixar. You get out of life what you put in.

Work your living tail off and make lots of sacrifices.

Yahoo CEO Marissa Mayer is a serious workaholic who works 90 hours a week. So does Elon Musk, who runs

9

It’s said that luck is when opportunity meets preparedness. While it’s true that I’ve been very, very lucky, it’s also true that I never stopped searching for opportunities and never hesitated to go for it when I found even a glimmer of a possibility. My advice: quit tweeting and linking and get out and network with real people in the real world.

I’ve seen it over and over again: one of the most common killers of wealth is the good old “divide by two.” Think about it. Each time you get divorced, that’s another divide by two. Divorce is a geometric progression — to the poor house. That’s why only the poor and very rich can afford it. If you’re in the middle, forget it.

Diversify, diversify, diversify.

That age-old axiom is so true it isn’t funny. I have an old friend — a former senior executive like me — whose investment strategy has always been to put his money in as many different places as possible. It takes time and effort but the payoff is huge. Save your money, invest it wisely and diversify.

Of course, you can always call yourself a social media entrepreneur or a self-branded CEO of one and generate all sorts of free online content while the folks at Google and Facebook get rich. The truth is, nobody ever got anywhere by doing what everyone else is doing. You may as well just buy lottery tickets and pray for a miracle.

About the Author Steve Tobak is management consultant, executive coach, columnist, and former senior executive of the high-tech industry. As managing partner of Silicon Valley-based Invisor Consulting, he’s been a trusted strategic advisor to executives and business leaders for more than a decade. Contact Tobak.

Editor’s Note: this article originally appeared at Entrepreneur

Neat’s Chris Barbier Talks about the Future of Small Business Solutions

C

ompanies that specialize in small business solutions have managed to carve out a very lucrative market niche for themselves and one of the frontrunners in the quest for innovation in this burgeoning industry is Neat. Billing itself as “one ecosystem for all your important information”, Neat offers customers ways to transform documents currently in paper or digital format into a more organized and streamlined collection that is easily accessible, searchable, and sharable. Neat’s Vice President of Project Marketing, Chris Barbier, has been an integral part of the company’s success and has helped put the right business solution products into the hands of the small business owners who need them the most.

It is easy to mistake Neat’s expansive product line as a just a consumer product like any other geared toward small business. But this industryleading enterprise is actually a critical element of what is considered by many to be the backbone of the American economy – small businesses.

Startups and “sole-preneurs” – small businesses with one or two employees – make up roughly 70 percent of Neat’s customer base and the owners of these companies have found that Neat’s products have done exactly what they intended to do which is to help them manage and organize their paper and digital documentation.

According to Barbier, the key to successfully running a small business is efficiency. Small

eliminating the need for manual data entry.

businesses do not have a lesser need for streamlined logistics just because they are small.

In fact, there may be an even greater need for efficiency in small businesses because they may not have the resources that larger, more cash-rich corporations have. Neat’s solutions help business owners not only organize critical data but also integrate that data into other essential systems within the business in order to establish a better information infrastructure.

One of the key elements of what Barbier calls Neat’s “user interface refresh” is the revamping of its web product which involves an in-depth analysis by the Neat team of how customers interact with its entire product line. Contact management and digital marketing are two of Neat’s top priorities. Despite the ongoing proliferation of digital communication in this the internet age, Neat recognizes the fact that much of the business world still operates on a very personal level in the sense that as much as entrepreneurs and business owners utilize email and other digital means of communications, things like business cards are still very much alive and well in the corporate world.

This has prompted the company to create products like their business card scanner that can help improve the flow of small business interaction.

These scanners extract the contact information off of business cards and distribute that information to any number of digital resources such as LinkedIn profiles and CRMs such as Salesforce thus

One of the elements of Neat’s repertoire that Barbier sees as being largely overlooked is the accounting aspect, specifically the tax management capabilities that the company offers. These management capabilities allow receipts and other important expenditure documentation to be scanned and stored throughout the fiscal year so that when tax time comes around, the job of retrieving and referencing important financial data for reporting purposes is much more streamlined and efficient.

Neat’s products currently integrate with Quickbooks accounting software but Barbier says that the company has plans in place to integrate with other products such as Freshbooks, Zero, and Sage as a means of expanding its product line and giving customers more options in terms of finding the right solutions for their specific business needs.

Neat’s plans for the rest of 2014 and into the early part of 2015 should see the company continuing in its position as a leading provider of small business solutions. One of the primary additions to Neat’s offerings is the release of a software package that is compatible with any scanner on the market.

Currently Neat’s software only works with its own scanners but the company understands that customer’s want to be able to leverage the software with any scanner that they may have and Barbier says that this is exactly the need that the company is looking to fill.

One of Neat’s overarching goals is the move toward being more of a “cloud powered” company which Barbier says will help the company’s ability to integrate with other hardware and that is important for customers who want to implement Neat’s solutions with other hardware and software systems. For both Neat as well as for its customers, the future of small business looks very bright.

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