The Experts Are Always Right!

This morning, over a nice cup of coffee while watching the snow fall, I read the article in today’s Wall Street Journal, Technology Predictions are Mostly Bunk by L. Gordon Crovitz. From the article:

Arthur C. Clarke, the science fiction writer, identified what he called the "three laws of prediction," reflecting an optimistic view of ingenuity: 1. When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong; 2. The only way of discovering the limits of the possible is to venture past them into the impossible; and 3. Any sufficiently advanced technology is indistinguishable from magic.

Take a minute, get a cup of coffee or depending on the time of day, a Knob Creek and water, and read the piece. And think of it the next time some talking head gives a prediction on the state of the economy, the state of technology or the state of the National Football League.

Let's Do Some Good

If you haven’t seen this piece in the NY Times, take a moment to read it. Especially as we consider the holiday season and what it has turned into, this is a good time to think about doing good. The article is titled Doing Good by Paying Forward by Ron Lieber.

Love and War

Here at Syracuse University, it’s been my pleasure to work with the outstanding Entrepreneurship Bootcamp for Veterans with Disabilities program. As I’ve had the chance to talk to and work with veterans from the various branches of the military, I’ve become more and more appreciative of the level of dedication and commitment that they’ve shown to our country. In today’s Wall Street Journal, take a look at another example of young men and women who provide service to our country, even if it means, as the article puts it, juggling “marriage and mission.” The article is entitled: Love and War by Michael M. Phillips.

Two from Today

I got to a meeting early today, and since there was a copy of the USA Today sitting there, I had the chance to read two interesting stories. The first has to do with making money off YouTube, entitled, YouTube Keeps Video Makers Rolling in the Dough. The second story, which has nothing to do with entrepreneurship, but which absolutely pulls at your heart, is called Hospice Santa Volunteers Face Grief, Kids’ Hard Questions. I dare you to read this story without having to wipe the tears from your eyes.

Pay Toilets on Airplanes?

If you didn’t see this article about Ryanair in yesterday’s Wall Street Journal, you might want to read it and learn about a company that really thinks outside the box! How outside the box…how about charging airline passengers to use the toilet? Now, I’m certainly not advocating that level of cost cutting, but I really like Ryanair’s approach to thinking way outside the box as a way to reinvent a company or even an industry.

Never Give Up!

Here is an interesting video of an athlete who isn’t going to let anything get in the way. (http://www.youtube.com/watch?v=NZ1cCfi4YUw ) It has a nice Syracuse University and Whitman School of Management connection because Augusto Perez, is a client of our Start-Up NY program through his business that provides motivational speeches and also provides Spanish translation services. Greg Callen, who is also featured in the video, is also a StartUp NY client having started a not-for-profit, MoveAlongInc which provides wheelchair recreation for people in Central New York.

Dinner Plates from....

Entrepreneurship is about finding the pain in the marketplace, and then finding an aspirin to cure that pain. Take a look at this article from Reuters today by Deborah Cohen about an entrepreneur who took something he saw in a different country, and applied that notion to a problem here in the USA. From the article:

(Michael) Dwork found himself marveling at the sight of the makeshift plates local peasant women were hand-crafting from fallen palm leaves, which they pressed in crude ovens along the side of the road.

"They looked absolutely horrible, covered in mold," recalled Dwork. "I totally fell in love with them. There was no design, there was no sanitary production, there were no 50 other things, but at the end of the day, the concept was really cool."

The natural process gave Dwork the idea to start VerTerra Dinnerware, an eco-friendly maker of compostable plates, bowls and serving dishes. Fast-forward to today and VerTerra (www.verterra.com) is a growing, Brooklyn, New York-based startup that produces a million pieces of disposable dinnerware in its India factory every month. The company supplies these products to wholesale customers, such as hotels and caterers, as well as food service operators, including those serving meals in the box seats at Cowboys Stadium and the U.S. food tent at the upcoming Vancouver 2010 Winter Olympics.

In the past year, retail customers have joined the mix. Half of Whole Foods' U.S. stores now carry the plates, which retail at 50-75 cents per piece, and VerTerra has been promised distribution throughout the organic grocery chain's full system by early next year.

Start-Up Nation Israel

When you hear about something once, you take note of it. When you hear about it a few days later while in a different city, you start thinking about it. And when you read about it the following week in the Wall Street Journal, you decide that you better seriously pay attention.

Two weeks ago, one of our Whitman School of Management professors walked into my office and told me about a new book called, Start-Up Nation by Dan Senor and Saul Singer. Then a week later, when Mike and I were visiting the Small Business Administration in Washington DC, Bill Ellmore mentioned the book. And then today, in the Wall Street Journal there is a very favorable review. What caught everyone’s attention was the author’s comments about the startup culture in Israel and its relationship with their military. The authors contend that Israel has a very unique entrepreneurial culture that leads to entrepreneurial success. Where does that culture come from? Read from the review:

Mainly, the Israeli military."You have minimal guidance from the top," Messrs. Senor and Singer write, "and are expected to improvise, even if this means breaking some rules. If you're a junior officer, you call your higher-ups by their first names, and if you see them doing something wrong, you say so." High-school stand-outs are recruited into elite military units and trained intensively, with an emphasis on technology. When they're done, everything required to launch a start-up "will be a phone call away. . . . Almost everyone can find some connection to whomever he or she needs to contact to get started." Israel is a country, it seems, where everyone knows everyone.

It is also a country with mandatory military service before college. For nations that want to emulate Israel's start-up success, Messrs. Senor and Singer advocate similar mandatory service, military or otherwise, to get "something like the leadership, teamwork, and mission-oriented skills and experience Israelis receive." The trick is to combine what's learned in the Israeli Defense Forces (or its non-defense equivalent elsewhere) with an almost abrasive individualism and the kind of self-reliance that occurs in a country that has to go it alone to survive.”

Here is the link to the entire review by James Glassman: Where Tech Keeps Booming.

The Art of the Exit

We always talk to our students about the importance of knowing the exit strategy for your company. It’s critical if you’re looking for angel or VC money to know what type of company might be your exit, but it’s also important even if you’re not looking for outside money because there might be a time that you or your partner(should you have one), decide that you'd like to try a new challenge. Here is an interesting article on what the author is calling the Art of the Exit.

Setbacks

Visiting today with local entrepreneur Bruce Dew, and we were talking about the setbacks that we sometimes run into when we’re launching and growing our businesses. I told him that one of my friends likes to say he has “started 10 companies…three that were successful and seven that I don’t talk about.” Bruce gave me an equally wonderful phrase about dealing with those times when things don’t work out. As he put it: “ A set-back is a set-up for the come-back.”

The Elephant in Your Room

Interesting posts coming from the blog, Both Sides of the Room by Mark Suster, entrepreneur turned VC. I particularly liked his recent post on Dealing with the Elephant in the Room.

There’s an old saying that if I’m talking with you and I start the conversation by saying, “whatever you do, DO NOT think about Elephants” then you can’t help but thinking about elephants while we’re speaking. There’s a lot of truth in this adage. It’s sometimes called “The Elephant in the Room” because even when you don’t mention not to think about an Elephant there are certain issues that you just can’t stop thinking about whether they are brought up or not.

Many businesses that pitch to me have Elephant issues and I’d like to tell you how to deal with these when you’re raising venture capital. Elephant issues are those things that the VC would automatically be thinking about when you’re speaking but he/she may not immediately ask you about either for legal reasons or out of courtesy.

But the VC is thinking about the issue whether you address it or not. I’d like to separate these from skeletons in your closet which are issues that the VC would have no idea about when you’re meeting but might discover later during due diligence.

You might want to include Mark’s blog as part of your must-reading list.

Entrepreneurs and the Economy

If you haven’t seen the article in the Opinion section of the Wall Street Journal today written by Carl Schramm, Robert Litan and Dane Stangler of the Kauffman Foundation, you should. The article, titled New Business, Not Small Business, Is What Creates Jobs, is a wonderful piece reminding all (especially those in Washington) of the importance that entrepreneurs play in our economy. It also has some interesting suggestions that all, even those in academia, should consider.

Facebook and the Entrepreneur

An entrepreneur from LA sent over this article by Dan Fost from the Los Angeles Times on using Facebook for your small business. From the article, which is titled Facebook Becoming Big Friend to Small Businesses:

Businesses need to go where their customers are, and increasingly these days, that's on Facebook and other social media sites, analysts say. More than 300 million people have signed up for Facebook, and half of them visit the site every day.

"Over the past two years, we've seen this increasing uptick in businesses realizing that their customers are on Facebook," said Tim Kendall, Facebook's director of monetization product marketing. "If they can create a presence in Facebook that allows customers to connect with them, it can be a way to strengthen that connection and also to find new customers.

"Plenty of other sites are also wooing small local businesses. The review site Yelp, Citysearch and a host of Yellow Pages sites are all making a push.And typically, businesses don't stick to one site such as Facebook. Instead, they spread their presence across the social media landscape, including MySpace, Twitter and LinkedIn. Increasingly, these sites connect with one another so that a status update on Facebook becomes a tweet on Twitter, or a blog post could be pushed out to several sites.

Soda Pop!

We like to say in entrepreneurship that it’s all about the passion for your venture. After hearing John Hendricks of Discovery Channel talk recently, I’m amending that to say it’s about passion bordering on obsession that’s needed to make a business a success. Take a look at this video of an entrepreneur who is exactly that about his business.

http://videos.komando.com/2009/10/11/amazing-soda-shop/

Tell a Story

I love stories…maybe it’s my heritage in working for Disney, or maybe it’s just because I think they are a wonderful vehicle to tell about projects or programs…better than reciting a mind-numbing list of facts and figures. To the point of storytelling, my friend Dwain Deville, just sent over this article from Business Week.

From the article:

Tell classic stories. Most reporters don't care about a tiny startup, and that's why Benioff never positioned himself as such. He told a classic David-vs.-Goliath story. "We gave the media something different. We gave them something new. We always positioned ourselves as revolutionaries. We went after the largest competitor in the industry or the industry itself. We made our story about change. We were about something new and different that was good for customers, and good for the community. We talked about the future." Although the media landscape is changing, Benioff believes there will always be a need for content. The delivery model might be changing, but exchanging and sharing stories and information remains as important as ever.

Make your own metaphors. According to Benioff, simple metaphors are a terrific way to communicate your message. "I spend a lot of time creating metaphors to explain what we do. For example, early on I explained what we did with the metaphor "salesforce.com is Amazon.com (AMZN) meets Siebel Systems." Later when we launched AppExchange we called it "the eBay (EBAY) of enterprise software." Anyone can create their own metaphors, says Benioff. "Just remember to test them before you put them out there. Try a few and run them by customers, analysts, and people in your network to make sure they work."

I’d add that even if you’re not dealing with reporters, but instead are talking to board members, funding sources, stakeholders, friends of your program, etc…stories are a powerful way to get your message across. And what’s best, if your Board members hears a story, it then becomes a story that he/she can tell and it gets your message out even further into the community. Think stories…gather them, edit them and tell them to get your message out in way that facts and figures never can.

Women Owned Businesses

In case you haven’t heard, the number of women owned businesses are on the rise. The Center for Women’s Business Research released their latest report and as reported in a story by Mickey Meese of the NY Times, the report estimates that “eight million businesses — or 28 percent of all businesses — were owned by women, and that those businesses created or maintained 16 percent of all jobs in a range of industries like business services, personal services, retail, health care, communications and real estate.” Here is the link to the rest of the story, One in Four Businesses Calls the Owner ‘Ma’am’. You might also want to visit the Center’s website for more information on this growing sector of business.

Angel Investment-Part 2

While we are on the subject of angel investing, take a look at the wonderful post from Bill Grimm’s blog, Thoughts on Advanced Entrepreneurship. Bill is a professor of entrepreneurship at the Crummer Graduate School of Business, but he is also an attorney who has touched almost all of the technology related deals that have taken place in Central Florida in the last 25 years. Here is a link to his thoughts on Myths on Angel and Venture Capital Investments.

Angel Investing

Playing catch-up today in the office, and ran across this interesting article and resources on angel investing from the October 28 NY Times. From the article: Small-Business Guide - Small-Business Guide - The New Rules of Angel Investing - NYTimes.com

Angels are still financing deals, but at lower valuations and with more specific milestones. They have grown more picky and less tolerant of risk. “What you’re seeing now is a real flight to quality,” said David S. Rose, chairman of New York Angels. “If you are the real deal, you can get funded.”

What’s the real deal? Angels are looking for companies with more modest capital requirements. They seek companies that bootstrap, beat quicker paths to profitability and have proven management teams. “The most striking change is angel investors are way more discerning about where they deploy their capital,” said Bruce Cerullo, a Boston-based angel investor who specializes in health care. “Now groups like ours are looking for more fully baked ideas that are much closer to revenue generation.”

I think the other reason that angels are able to be pickier about deals, is that there are so many other options for them to invest. For one, think of all the distressed investments that are available; the investment advisors for many of these angels are presenting other less risky and potentially more lucrative options for their available capital. That said, angels are investing, but as entrepreneurs, we need to make a clearer and more compelling case as to why they should invest their money with us versus the other options (think real estate) out there.

Great Speakers/Great Messages

One of the great things about being involved with a University is that I get a chance to hear and meet wonderful speakers. Last week, I heard the founder of the Discovery Channel, John Hendricks, give a great lecture on entrepreneurship. John spoke on the need for entrepreneurs to be passionate and nearly obsessive about their venture to be successful. He also said that we should pay attention to our daydreams. For John, one of his daydreams was a tv channel for documentaries, which in essence was the elevator pitch for what would become the Discovery Channel. He also talked about the Planet Earth series and their upcoming big-event series, Curiosity, where they will tackle 60 big questions.

Last night, I heard James Olson, the VP of Corporate Communications at US Airways (and a Syracuse University graduate) speak about the Miracle on the Hudson. He took us back to last January, when he was sitting at his desk and got a call and needed to comment on the spot to the fact that one of their airplanes was floating in the Hudson River. He told a packed audience at the Newhouse School of Public Communications that planning and drilling is indispensible to prepare for a crisis, but that you also have to be flexible enough to make changes on the fly when those changes are called for. But he also reminded all in attendance that transparency is required, because whether we like it or not, in this day of 24/7-always-on-all-the-time media, even private letters to customers will be made public, so we might as well think about that at the outset. US Airways still has on their website, a spot where you can see lots of information about the incident, including the letter that was sent to the passengers of 1549 just days after the accident.

Thoughts from the Other Side of the Desk

I just ran across this article that was posted on Reuters back in early October called The Secrets to Getting Your Green Business Funded. It’s a question and answer session with venture capitalist Bryan Korba and he offers a perspective from the other side of the desk on talking with the institutional investor. In particular I liked his items, which I’ve placed below, that are red flags that turn off investors:

1. Closed-minded entrepreneurs.
2. No real startup experience.
3. Need to spend millions of dollars to generate insignificant revenue.
4. The company has no model to generate revenue (it's customers, not buzz, that generates revenue).
5. The company can show no operational roadmap on how to build and manage the required business processes (sales, accounting, customer service, quality control, etc.).
6. Unrealistic valuation of the company.
7. Entrepreneurs that try to control everything.
8. Trying to raise money instead of building a business

Stop Solving Your Problems

Because I couldn’t watch the NFL game on TV that I wanted to this late afternoon (Saints vs. Dolphins), I instead read through the stack of magazines that were covering my desk and littering the floor of my office. Flipping through Fast Company, I ran across an interesting piece, Stop Solving Your Problems. While most of the article dealt with big company stuff, I found myself thinking about how entrepreneurs could take the same notions and apply them to our own companies. Consider the notion that the authors Dan Heath and Chip Heath, raise as they begin the article:

“Your business has a big problem. You've thought about it, but you can't seem to crack it. So you consult your colleagues -- to no avail. Then you turn to the big guns -- your industry's top experts. They've got nothing. (Well, to be precise, they've got 40 PowerPoint slides worth of nothing, and you've got $225,000 less of something.) Now what?”

While most of us won’t spend $225,000 with a consultant, how many of us have spent less and were left with a consultants report and the nagging feeling that nothing was solved. The authors go on to point out that…

“We start by tapping the local knowledge, and if it's insufficient, we go looking for specialists. But what if we're following the wrong protocol? We should stop looking for experts and start looking for analogues. It's a big world: Chances are someone has solved your problem already.”

Take a look at the article and then try to apply it in a less costly manner (most of us aren’t going to get NASA involved) to our own problems.

On a related thought, see Dan Macsai’s take on three ideas that the newspaper industry can copy to help its business.

Maintaining Success

I was reading an article and came upon some interesting thoughts that were provided on the subject of how to be successful over a period of time. Sustaining success over a period of time is something that all of us who are entrepreneurs have to think about; whether it’s for a period of years or whether it spreads over a number of generations. Here’s what was said on the topic of how that sort of success happens and continues:

“You have to have a really over-arching plan. You need to have a plan to handle the challenge of the transition. You can't deviate from that plan. You have to approach the job with a vision so that you're not going to a mystery place. You have to know where you're going, accept the challenges and take it all in stride. Expectations are never adjusted because of the results. The focus is on standards, expectations and uncompromised principles. What we do doesn't fluctuate. We've learned to deal with the attention and the notoriety (of success). That doesn't change anything."

Who said these things? Pete Carroll, the head football coach at the University of Southern California. If you’d like to read the entire article by Al Lesar of the South Bend Tribune, here is the link to the story.

Whole Foods: The Unique CEO

I was never a particularly big fan of going grocery shopping. It was something that had to be done of course, but it wasn’t something to enjoy and it was never a thing to look forward to. And then, when we moved to Santa Fe, New Mexico…I discovered Whole Foods Market. The first time I walked into one of their stores, everything was different. The customer service was exceptional, the fish department folks really knew their stuff, and I could get freshly roasted coffee to take home with me. Where had this store been my whole life?

Since that time, grocery shopping in America has certainly changed. And living in Syracuse, I have no Whole Foods (but I do thank goodness have the spectacular Wegmans), but I look back to my shopping mornings at Whole Foods with wonder; how did they turn this guy who hated shopping into one that actually enjoyed the process. This is just preamble to a suggestion that you read the article in this morning’s Wall Street Journal that is an interview with the CEO of Whole Foods. The interview is comprised of one cup of business 101, one cup of social entrepreneurship and a dash of pride from the CEO for having created a truly unusual store that in many ways has revolutionized the grocery industry.

I Love the Newspaper Industry...

I love the newspaper industry…always have. However, I’m probably exactly what’s wrong with it because even though I read more newspaper now than ever, I only pay for one. I read the Wall Street Journal and parts of the NY Times, LA Times, Denver Post, the Syracuse Post Standard, South Bend Tribune (to keep tabs on Notre Dame) and the Chicago Tribune to keep track of my beloved Blackhawks. But I only pay for the on-line and print edition of the Wall Street Journal, and the others I read for free on the internet.

Which brings me to Peter Kann’s column in today’s Wall Street Journal. As you read this article, for a moment, forget about the newspaper industry and insert your industry or your company whenever Mr. Kann refers to his industry. That’s to me the interesting thing about the demise of the newspaper industry; just a few years ago it was unthought-of that the thing could go down in flames as it has. Sure it’s been in trouble for a while, but no one really saw this coming and that’s the lesson for all of us, no matter what industry we are in. Look; watch; and think because if you are not careful…if you aren’t paying close attention to your business model…if you aren’t innovating...if you aren't talking and listening to your customers…and your customers kids…you too someday could be sitting in the same place that they are today.

Office of Innovation and Entrepreneurship

Take a look at the following press release:

Commerce Secretary Locke Announces New Commerce Initiatives to Foster Innovation and Entrepreneurship

WASHINGTON—U.S. Commerce Secretary Gary Locke announced today his plans to create a new Office of Innovation and Entrepreneurship within the Department of Commerce and launch a National Advisory Council on Innovation and Entrepreneurship. Both substantial new initiatives will help leverage the entire federal government on behalf of promoting entrepreneurship in America. The new office is expected to announce additional initiatives in the coming months.

The new Office of Innovation and Entrepreneurship, which will answer directly to the secretary, will be geared toward the first step in the business cycle: moving an idea from someone’s imagination, or from a research lab, into a business plan.

“We're not lacking for groundbreaking ideas in this country; nor are we short on smart entrepreneurs willing to take risks,” Locke said at the Inc. 500/5000 Conference today. “What we need to do is get better at connecting the great ideas to the great company builders. And I think The Office of Innovation and Entrepreneurship is a big step in the right direction.”
The National Advisory Council on Innovation and Entrepreneurship will advise the Commerce Department on policy relating to building small businesses and help to keep the department engaged in a regular dialogue with the entrepreneurship and small business communities. The council is expected to be comprised of successful entrepreneurs, innovators, investors, non-profit leaders and other experts.

The Obama Administration is committed to helping America’s entrepreneurs succeed, evidenced by its efforts to free up credit markets, unprecedented investments in America’s physical and intellectual infrastructure, and variety of tax credits and other incentives to help foster promising industries like renewable energy and smart grid technologies.
Working toward the Obama Administration’s vision, the Department of Commerce will lead the effort to encourage high-growth entrepreneurship through these new initiatives, among others.

The mission of the Office of Innovation and Entrepreneurship is to unleash and maximize the economic potential of new ideas by removing barriers to entrepreneurship and the development of high-growth and innovation-based businesses. The office will report directly to Locke and focus specifically on identifying issues and programs most important to entrepreneurs. Working closely with the White House and other federal agencies, this new office will drive policies that help entrepreneurs translate new ideas, products and services into economic growth.

The office will focus on the following areas:
Encouraging Entrepreneurs through Education, Training, and Mentoring
Improving Access to Capital
Accelerating Technology Commercialization of Federal R&D
Strengthening Interagency Collaboration and Coordination
Providing Data, Research, and Technical Resources for Entrepreneurs
Exploring Policy Incentives to Support Entrepreneurs and Investors
National Advisory Council on Innovation and Entrepreneurship

The National Advisory Council on Innovation and Entrepreneurship will advise Locke and the administration on key issues relating to innovation and entrepreneurship. The council will include successful entrepreneurs, innovators, angel investors, venture capitalists, non-profit leaders and other experts who will identify and recommend solutions to issues critical to the creation and development of entrepreneurship ecosystems that will generate new businesses and jobs. It will also serve as a vehicle for ongoing dialogue with the entrepreneurship community and other stakeholders.

Rent a CFO

Interesting piece in the Wall Street Journal by Ray Flandez on renting a chief financial officer. There are quite a few such companies out there that can provide these services, and for the smaller firm they can be much more cost effective than hiring out that position. One other thought in that area is to find a great CPA and use that person as your CFO. In my manufacturing business, that’s what I did. Our accountant, Pete Stefanou, was a fantastic guy who was great at thinking outside the box, so it was well worth the extra cost to use him as our CFO. But if you choose to go that route, you need to make sure to keep the CPA up to date on things going on in your organization. In my case, I liked using Pete as a sounding board on new ideas, personnel issues, costs, pricing, etc. He was invaluable in helping me to grow, and then eventually to sell the business.

The Government Can!

Ran across this today at Jeff Cornwall’s site, The Entrepreneurial Mind. If you’d like to smile, take a look at this video: http://www.youtube.com/watch?v=LO2eh6f5Go0

Artist's are Entrepreneurs Too

My daughter’s boyfriend this summer showed me a book by an artist who made cartoons on the back of business cards. The book, Ignore Everybody by Hugh Macleod, was a fun read, and it caused me to start reading his blog. Yesterday’s blog caught my attention, because it was titled “Artists Are Entrepreneurs and Marketers too.”

Here’s a piece of his post:

Artists– suc­cess­ful ones, any­way– have to create stuff out of thin air, then somehow find a way to sell it at a profit. The Art Purists will be horri­fied to hear this, but yeah, you really do need the mind of entre­pre­neur and a mar­ke­ter to be able to do that.

The Customer is Always Right…Uh, No!

There is the old adage, the customer is always right. Right? Well, no the customer is not always right and sometimes you even need to fire them. Take a look at the article from the NY Times; Know When to Fire a Customer.

This article brought to mind a particular incident when I owned a small resort in Wyoming. A large family was having a reunion at the resort, and they were incredibly difficult to deal with. No matter what my staff did, it wasn’t good enough. Because I happened to be at the resort that week, I took a personal interest in trying to sort out the matter. But no matter what I did, it just wasn’t enough to satisfy this demanding group. Finally, it was on day three of a seven night stay that I met with a group of the family members and told them that since we couldn’t seem to make their week a happy one, that I would find them accommodations elsewhere in the area where they would hopefully be able to enjoy the rest of their reunion. The family members immediately said that they didn’t want to move, that in fact they wanted to stay and it caused the entire dynamic of the relationship to change. They didn’t become the easiest group to deal with, but their constant bickering and complaining ended and I think they had a reasonably happy vacation. My approach worked; and while it won’t always be the right approach, sometimes you just have to say to your customer that you don’t want their business. Be careful when you do so, but sometimes it just has to be done.

Twitter and the Crisis

Ah…Twitter…what are we to do with you? As an entrepreneur, I’ve been trying now for some time to make sense of how to best use Twitter. And while I’m not quite ready to say it’s the best things since sliced bread…I’m also not ready to abandon it either. Take a look at an article from today’s Wall Street Journal titled, Entrepreneurs Tweet Their Way through Crises that discusses using Twitter when you are in crisis mode.

Here are some thoughts from the end of the article; note the caution about using Twitter occasionally or only when you need it.

Twitter can also be an effective way to get a message across to consumers in an emergency. When an ice storm struck the Bartlesville, Okla., area last winter, United Linen & Uniform Services notified customers about the status of their orders through Twitter in addition to its Web site. Scott Townsend, marketing director for the laundry service, says many consumers today will find information about a business on Twitter before anywhere else because it's where they hang out online. "You fish where the fish are," he says.

Entrepreneurs should bear in mind that Twitter is unlikely to be of help in dealing with a problem if it isn't used regularly otherwise, says Shel Israel, author of "Twitterville: How Businesses Can Thrive in the New Global Neighborhoods."

"If you just go to Twitter when you have a crisis, you will have no followers and no credibility," he says. "The key to using Twitter effectively is to build trust with people who are relevant to your business."

Steve Fusek, owner of Fusek's True Value LLC, a hardware store in Indianapolis, now has an employee dedicated to updating the shop's Twitter profile during business hours. Mr. Fusek says consumers expect to see frequent tweets and swift responses to customer-service inquiries they post.

"You can't just sign up and leave it. You have to have someone on it," he says. "If you're not legitimate, you'll be found out quickly."

Pay It Forward

Ran across this interesting blog on Reuters and (Let’s Work Together to Boost Entrepreneurialism) by Michael Gaiss, who is a Senior Vice President at venture capital firm Highland Capital Partners. In particular, I liked the first point:

Connect and enable the next generation of entrepreneurs. Much can be learned from those who have already done it. Barriers preventing the next generation from connecting with the existing entrepreneur community, as well as each other, need to be removed. Gatherings and one-on-one mentoring can be orchestrated to bring entrepreneurs of all stages together to better enable the free flow of ideas and advice. The challenge is to leverage existing institutions such as associations, universities, venture and angel networks, and relevant service providers to get these off the ground, while encouraging the organic emergence of new networking & mentoring platforms over time. As entrepreneurship evolves, what started as forums for sharing insight and advice matures into a vibrant and proven support ecosystem that entrepreneurs can rely on to help get their startups off the ground.

Entrepreneurs are the most giving of folks; looking to help out the next generation of business innovators. In most cases, the entrepreneurs want to help, but they don’t how or where to go to provide assistance. At Syracuse University, we’re trying to facilitate that flow of help and be a connecting point to match mentors with those who need the help. It’s really just an entrepreneurial way of paying it forward.

The Good Enough Revolution

Allen Kupetz sent over a piece from Wired Magazine that I’ve been forwarding around to folks interested in entrepreneurship here at Syracuse University. The article, The Good Enough Revolution: When Cheap and Simple is Just Fine is getting some interesting comments from faculty and friends. Take the time to read it; it’s rather long but provides some things to think about for those of us who are creating the next product or getting ready to kick-out a great new service. It’s telling us that time is a limited and precious resource, and that the more complex a device is, the less we’re going to use it or maybe even want it.

The Flip's (video camera) success stunned the industry, but it shouldn't have. It's just the latest triumph of what might be called Good Enough tech. Cheap, fast, simple tools are suddenly everywhere. We get our breaking news from blogs, we make spotty long-distance calls on Skype, we watch video on small computer screens rather than TVs, and more and more of us are carrying around dinky, low-power netbook computers that are just good enough to meet our surfing and emailing needs. The low end has never been riding higher. So what happened? Well, in short, technology happened. The world has sped up, become more connected and a whole lot busier. As a result, what consumers want from the products and services they buy is fundamentally changing. We now favor flexibility over high fidelity, convenience over features, quick and dirty over slow and polished. Having it here and now is more important than having it perfect. These changes run so deep and wide, they're actually altering what we mean when we describe a product as "high-quality."

And it's happening everywhere. As more sectors connect to the digital world, from medicine to the military, they too are seeing the rise of Good Enough tools like the Flip. Suddenly what seemed perfect is anything but, and products that appear mediocre at first glance are often the perfect fit.

The good news is that this trend is ideally suited to the times. As the worst recession in 75 years rolls on, it's the light and nimble products that are having all the impact—exactly the type of thing that lean startups and small-scale enterprises are best at. And from impact can come big sales. "When the economy went south before Christmas last year, we worried that sales would be affected," says Pure Digital's Fleming-Wood. "But we sold a ton of cameras. In fact, we exceeded the goals we had set before the economy soured." And this year? Sales, he says, are up 200 percent. (Another payoff: In May, networking giant Cisco acquired Pure Digital for $590 million.)

To some, it looks like the crapification of everything. But it's really an improvement. And businesses need to get used to it, because the Good Enough revolution has only just begun.

Entrepreneurship and the Cookie Company

It’s hard not to like entrepreneur’s like the one in this story from the August 27 Wall Street Journal. In an age of corporate bailouts and oversized bonus checks, it’s great to see people willing to take chance on launching their own business, placing their own money at risk. Take a look at the article on Tate’s Bake Shop and cheer on this group of entrepreneurs who want to make a difference, one cookie at a time.

Looking for an Opportunity: Consider the Pet Industry

As an opportunity for entrepreneurs, I love the pet industry. I love it because there are lots of neat niche’s out there for companies to find and exploit, the boomers are aging and with their kids leaving the house are spending more time and money are their pets, and perhaps most importantly it continues to grow even in difficult times. Take a look at the article in today’s Wall Street Journal: Nestle Finds Pet Owners More Willing To Spend by Goran Mijuk and Anita Greil.

Some quotes of interest from the article:

Nestlé SA, the world's largest food and drink producer by sales, reported a drop in first half profit and revenue Wednesday as consumers scaled back purchases of items like bottled water, prepared meals and dairy products. But the company did a lot better with animals than it did with humans. The same focus on premium, higher-margin products that may have put a damper on overall sales growth paid off in the company's big pet-care division, as recession-stressed consumers still found ways to spend more on their dogs and cats.

The strength of spending on pets has caught the eye of companies across the world economy.
The main beneficiaries are companies selling pet food, but the growing market is drawing increasing interest from players in sectors ranging from health care to insurance.
"Growth in pet care remains resilient," said Nestlé Chief Financial Officer Jim Singh. The company, Mr. Singh said, is scaling back underperforming and mainstream products in favor of premium offerings "that are delivering improved nutritional benefits for pets."
The American Pet Products Association, a trade group, estimates U.S. spending on pets will rise to $45.4 billion this year, from $43.2 billion in 2008.

Purina and Friskies are among Nestlé's fastest growing brands, with sales of each up by more than 6% in the first half. Dog Chow, which saw sales jump by more than 16%, had the second-fastest growth among Nestlé's major products, outstripped only by coffee system Nespresso, which has a growth rate above 20%.

You Can’t Give Up

When you have a moment, take a look at this video of Dana Bowman. A truly inspirational story…and when you think that it’s too hard to launch a company, or the work ahead of you is to daunting, think of this amazing individual. Thanks to Dr. George Burman for passing this along.

“I Know What It Will Take”

If you haven’t read this interview in the August 7 Wall Street Journal with the new head of the SBA Karen Mills, take a look at it. In particular, I like the fact that she will keep reminding Washington that even through the bailouts and the bonuses on Wall Street, the engine of growth that will drive this country comes from…you and me…the entrepreneurs. As the head of the SBA puts it, “Seventy percent of the jobs in this country are created in small business. And over half of the people who work in this country own or work for a small business. They are the engines of our economic activity here. They are going to be critical to creating the jobs that will lead us into the recovery and out of this economic difficulty.”

However, I met with a banker yesterday and she reminded me that while the SBA guarantees are in place, the business still has to qualify for the loan. That means good credit, a solid business plan and cash flow that makes sense in relation to the amount that you want to borrow.

Angel Investing in a Recession

I am fascinated by angel investors. I’ve been an angel, belonged to a group and watched the process…so I’ve had the chance to see the types of deals that the typical group sees, and I’ve also seen a lot of entrepreneurs making a pitch for funding. Whenever I see something interesting on angels, I’ll be sure to post it and here is something from Scott Shane and the NY Times on How Has Angel Group Investing Held Up During the Recession? And yes, the NY Times posted a comment of mine on this article.

Making the Most Out of Twitter

I like Monday evenings, and it’s not even football season yet. I like Monday’s not because I’m ready for some football (which I am), but because Monday’s the day that I get Barron’s. Now I know lots of you have been reading Barron’s for years, but for me, this is something new. And one of the reasons’s I like it is because I’ve been finding in every issue something interesting.

Take today for example: I’ve been struggling for a while now to make sense of Twitter. I use it and try to follow what’s being written on entrepreneurship, sports and politics. Among others, I follow Charlie Weis, Karl Rove and Shamu, probably enjoying Shamu’s posts the most. But as I follow more and more people, the less value Twitter seems to be giving me because even with Tweet Deck, it’s tough to make sense out of what people are saying…which leads me to believe no one really reads what’s out there on Twitter. People are talking and nobody is listening, which was causing me to pay less and less attention to it. But in the current issue of Barron’s there is an interesting article by the Electronic Investor (Mike Hogan and Nancy Miller) on using Twitter for chatting on investments which maybe is one interesting reason to start paying attention again to the Tweets. Or maybe I’ll just go back and see who Shamu is dumping on today.

Competition for PowerPoint?

If you haven’t seen it, you should take a little trip on the web to Slideshare.net. It’s a neat new product that according to a recent article, might create a little competition for Microsoft and it’s PowerPoint product. I’ve used slideshare to find some interesting approaches to presenting information and while that’s only a part of its value, you might want to look at it to see if it can be of any use for you. After all, any company that thinks it’s good enough to challenge Microsoft deserves at least a glance from entrepreneurs like us.

A Corporate Entrepreneur at Olive Garden

Nice article in the current issue of Fast Company titled, Why America is Addicted to Olive Garden by Chuck Salter. The piece provides info on how the restaurant concept that is owned by Darden Restaurants uses customer research, technology and brand management to grow its business.

However, it’s unfortunate that when the history of Olive Garden was provided in the article, nowhere did it mention the contribution of one of the most impressive corporate entrepreneurs ever, Blaine Sweatt. Blaine is often times called the father of Olive Garden and had been Darden’s President of New Business Development from 1996 to 2007. He led the in-house teams that developed Olive Garden, Bahama Breeze and Smokey Bones BBQ Sports Bar concepts, among others. He got his start in the company back when it was owned by General Mills, and it was thanks to his effort, that Olive Garden is enjoying the success it is today. He is also an entrepreneur who loves to give back to students and is one of the finest gentlemen I’ve ever met. So while the article may have ignored him, next time you’re in a Darden Restaurant, have a glass of wine and toast the contributions that were made by a Blaine Sweatt, a great entrepreneur who just happened to be working in a corporation.

Branding

Dwain Deville, the author of the book Biker’s Guide to Business sent this over to me and it’s something to think about regarding consistency in your branding approach. Why Coke Beat Pepsi for the Last 100+ Years.

Accessible, Free and Simple

If you aren’t thinking of ways to use social media to help market your business, you should be. OK…I know what you’re going to tell me. “Kruczek, if I hear one more word about Twitter or Facebook…” and while far too much has been said and written about those platforms (see latest issue of Fortune magazine for an example), if you aren’t at least thinking about using them, you should for no other reason than they are accessible, free and simple to use. Take a look at the article from the New York Times with the horrible title, Mom and Pop Operators Turn to Social Media, and read about the success of one entrepreneur in the food industry that is using social media to drive business to his crème brulee cart.

Customer Service Stinks!

If you’ve heard it once, you’ve heard it a thousand times... customer service in corporate America is dead. A recent experience of mine provides evidence that for entrepreneurs, customer service is one place that we will always beat the big company.

Over the past few days, I’ve spent around three hours on the phone and visiting a store to take care of a problem with a Logitech Harmony remote. Now this remote isn’t cheap, and it’s the thing that makes the TV and other assorted entertainment devices work together. I bought it at Best Buy, and they set it up just a couple of months ago. The remote stopped working over the weekend and so I went to Best Buy who referred me to their GeekSquad 800 number who referred me to one Logitech number, which referred me to a second Logitech number which referred me to a third Logitech phone number. And then it got even sillier.

After about an hour and a half on the phone yesterday, Logitech determined that it had to be the battery. In the process of the phone call, they ripped into Best Buy repeatedly for their poor customer service and then promised to send me a new battery. The absolute cherry on the sundae is an email I just got from Logitech this morning: the battery is out of stock and wouldn’t be shipped for 6 weeks!

As an entrepreneur, you can take comfort in the fact that when you are going head to head with the big companies, if you even remotely care about your customers, you are going to beat the heck out of the big guys because, at least from this experience, it’s clear that Logitech doesn’t care about its customer.

Those Darned Customers!

Interesting piece in today’s NY Times on the subject of customer service: The Dusenberry Diary. It’s interesting to me because I think customer service is one place where the entrepreneurial company should always beat the big guy. I know in my companies, customer service was always job one for all of us, but especially for me. I would call the irate customer; I would talk to our existing customers and ask them “how are we doing?” Often times, just as was mentioned in the NY Times article, when you talk to the customer you’re going to hear things that you don’t want to hear. But if you don’t talk to your customers, after a while you won’t have to worry about ‘em because you’re going to be out of business.

Stimulus and the Economy

On Sunday, Carrie and I were driving up to Albany to pick up a traveling son from the airport. We took the scenic route and stopped in at a small art gallery along the way. As we were making a purchase, the artist/owner asked me what I did for a living. When I told him that I worked in the business school at Syracuse University, he turned and asked me a simple question: “When is it going to be over?” Of course he was talking about the economic situation in the USA, and that comment came back to me as I was reading one of my favorite blogs, Calculated Risk Finance and Economics. According to a post this morning, the answer could be really soon.
In a discussion of the economy and the stimulus package, here is what Calculated Risk said:

There are two possible explanations that the administration was so wrong. ... The first explanation is that the economy has deteriorated because the stimulus package failed. ... The second answer is that the economy has deteriorated in spite of the stimulus.
Very little of the stimulus has been spent so far, so it is premature to say it failed. However Romer (Christina Romer, a senior White House official) recently was quoted in the Financial Times:

Ms Romer said stimulus spending was “going to ramp up strongly through the summer and the fall”. “We always knew we were not going to get all that much fiscal impact during the first five to six months. The big impact starts to hit from about now onwards,” she said. Ms Romer said that stimulus money was being disbursed at almost exactly the rate forecast by the Office of Management and Budget. “It should make a material contribution to growth in the third quarter.”

So we should see an impact in the 2nd half of 2009 ... and that starts now!

Becoming a Young Gun

Today, Robert Tuchman, author of Young Guns: the Fearless Entrepreneur’s Guide to Chasing Your Dreams and Breaking out on Your Own, is providing a guest post. Robert is an entrepreneur who started Tuchman Sports Enterprises (TSE) out of his one-bedroom apartment in New York City. His company was named to the annual Inc. 500 list of America's fastest growing privately held companies and as one of the top 100 promotion agencies by Promo Magazine. He bootstrapped the startup of TSE with no money and no investors and ended up successfully selling it to Premiere Global Sports for a tidy profit. Last year TSE earned over $70 million dollars in sales as the Corporate Events division of Premiere Global Sports. Robert serves as President of that division, still guiding the business he started.


Graduation from college carries such ironic emotion: you have spent four years yearning to graduation, but as soon as you do, you spend your remaining days nostalgic about your school days. College is a great time, but with graduation comes reality. You are now armed with all that you need: you are the fuse and your diploma is the match. Let the fireworks begin!

Many leave college and send out applications to tens of corporations looking for a job. But there are others who take a bit more of a risk: they seek entrepreneurial pursuits. Know that what lay behind you and what lay in front of you is trivial compared to what lay within you. Have courage.

If it is entrepreneurship you desire post graduation, there are several thing you must consider.

An entrepreneur needs to be someone who can both visualize and actualize. He needs to be able to visualize something—and once he has that “something,” he needs to see exactly how to make it happen. In order to make it happen, there are several steps that you as an entrepreneur must take on your way to entrepreneurial success. Do not just enhance what is, but advance towards what will be: keep the long term in sight.

It is essential that you are able to marry your work and what you love. When in sales, there is no right or wrong way to sell: all you need is passion and enthusiasm for your product. This passion will ignite the minds of your potential client, facilitating connections, and connections between will be made. Your passion and enthusiasm for your product will be what encourages the sale—not the rote duplication of someone else’s selling system. It takes courage to grow up, form your own philosophy, and become who you really are. What you do to sell and promote your business has to be a reflection of what you are already willing to stay up late for and get up early for. It has to connect to your “why” and be a part of your own experience.

Second, you must start working your plan, whether you are ready nor not. Know the four good things that you are about to do: first, that your business is going to be built on a great idea; second, that great idea is going to connect you to a market; third, that you will create a plan based on what you learn, on an ongoing basis, about that market; fourth, that you will adjust that plan over time.

After you have visualized your plan, find the right partner… and avoid the wrong one! You will have a significant advantage over one-man businesses if you come together with another person regularly to make important decisions. Find someone with whom you have good chemistry, someone who fills your blind spots. Successful partnerships are based on the idea of taking different perspectives in a discussion and having different talents.

Once the groundwork has been established, set priorities for the absolutely crucial first year. Concentrate on why you are doing something—not how. Your “why” will keep you closely connected to your company and your product. As soon as you lose sight of “why,” you will also lose sight of your driving force and your motivation.

Through your first year and beyond, court clients—and keep them coming back! In order that you become a successful entrepreneur, it is essential that you are the person who is willing to pick up the phone and call people to talk about making deals and doing business. When you make this phone call, make sure you are absolutely certain about the product that you are selling. With this certainty, you can use confidence to build up a network of contacts. The network cannot be established overnight—it is going to take a lot of phone calls. You cannot just wave your magic wand over a corporation and change them into a profitable client.

In order to keep your client base, you need a great team to work with. Make sure that your company has shared values, that there are rewards for quality improvements, and that there are strong internal and external relationships. Empower the best, lose the rest!

Inevitably, there will be failure. You must learn from failure: use it as a stepping-stone. Do not forget what mistakes you have made, but do not allow yourself to dwell on them. Take from your failure: take the lesson learned—do not let it take anything from you: not your energy, not your time and not your space.

Finally, in order to keep your company going and keep your clients happy, maintain good relations with your vendors. It is essential that you support the people who support you. If you are making a big commitment to a client, make sure you have a solid relationship with your vendor.

In the end, take energy from taking risks. Live in the spirit of the entrepreneur!

The Boomer as Entrepreneur

If you happen to be a boomer (or even if you are not), take a look at the following study from the Kaufman Foundation called “The Coming Entrepreneurship Boom.”

Per a press release from the Kaufman Foundation:

According to Robert E. Litan, VP of Research and Policy at the Kaufman Foundation: “The fact that the largest age group of our population is also the most entrepreneurial bodes well for the United States' economic future. This study shows how several other emerging trends, from job tenure to regulatory changes due to the current recession, should facilitate entrepreneurship in coming years." Contrary to popularly held assumptions, it turns out that over the past decade or so, the highest rate of entrepreneurial activity belongs to the 55-64 age group. The 20-34 age bracket, meanwhile, which is usually identified with swashbuckling and risk-taking youth (think Facebook and Google), has the lowest. Perhaps most surprising, this disparity occurred in the 11 years around the dot-com boom—when the young entrepreneurial upstart became a cultural icon.

Other key findings include:

While people under 30 have historically jumped from job to job, the most striking development today has been the deep drop in the incidence of "lifetime" jobs among men over age 50. Long-term employment has fallen dramatically for people ages 35-64 over the past 50 years.
With longer life expectancies and greater health in later life, older generations may continue to start new firms—or mentor young entrepreneurs. Since the first Internet-era recession, transaction costs and barriers to entry have fallen for entrepreneurs of every age.

I think one other point is worth mentioning. Some boomers who are entrepreneurs, are now ready and willing to sell their existing businesses. These boomers also know that to sell their business in these uncertain and tight credit times, means that they will have to also finance the sale of their business, which opens up a tremendous opportunity for the younger generations. So this may also be a good time to look at your local boomers and see if you can buy a business from them. Remember the entrepreneur’s mantra: everything is for sale.

ARC Loans

Thanks to Dr. Mike Haynie for passing this along:

Internet Address: http://www.sba.gov/news

Small Business can Apply for ARC Loans Beginning Today

WASHINGTON – Starting today, June 15, SBA will begin accepting loans for a temporary new program called America’s Recovery Capital. “ARC” loans of up to $35,000 are designed to provide a “bridge” for viable small businesses with immediate financial hardship – to keep their doors open until they get back on track.

“These ARC loans are another tool in the SBA toolkit which will provide critical support to small businesses struggling to make it through these tough economic times,” said Administrator Karen G. Mills.

ARC loans are deferred-payment loans of up to $35,000, available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing and qualifying business debt. ARC loans are 100 percent guaranteed by the SBA and have no SBA fees associated with them.

ARC loans will be disbursed over a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt including mortgages, term and revolving lines of credit, capital leases, credit card obligations and notes payable to vendors, suppliers and utilities. SBA will pay the interest on ARC loans to the lenders at the variable rate of Prime plus two percent.

Repayment will not begin until 12 months after the final disbursement. After the 12-month deferral period, borrowers will pay back the loan principal over a period of five years.

ARC loans will be made by commercial lenders, not SBA directly. For more information on ARC loans, visit www.sba.gov <http://www.sba.gov/

For more information about all of the SBA’s programs for small businesses, call the SBA Answer Desk at 1-800 U ASK SBA or TDD 704-344-6640, or visit the SBA’s Web site at http://www.sba.gov <http://www.sba.gov/> .

Find the Pain; Find the Opportunity

An entrepreneur from Virginia sent the story below to me, with a suggestion that perhaps this is another form of entrepreneurship that we should think more about in our business schools. His concern is that b-schools spend so much of their student’s time talking about launching high-tech ventures (i.e. the next Google) that we don’t point out to our students that there are other opportunities out there. In the short time I have been at Syracuse University, I’ve talked to students who are thinking of businesses in industries as diverse as restaurants, manufacturing, software, entertainment, and on and on.

But my friend from Virginia’s point is well-taken so take a look at this article, Waxman’s Beat, about finding the pain in the news marketplace and then identifying the right VC group (Seattle-based venture capital firm Maveron LLC, founded by Dan Levitan and Starbucks CEO Howard Schultz) to back the enterprise.

Wine and Social Media

If you like drinking wine, you probably know of Murphy-Goode Winery which is located in California. If you’re really involved in social media, you also probably also know about Murphy-Goode but for an entirely different reason than what’s inside the bottle. The winery, which turns out some really nice cabernet’s, is running a unique contest to find a temporary employee who can bring them into the world of Web 2.0. As they put it on their website:

We at the Murphy-Goode Winery got to thinking about the new age of communications and we figured it was a pretty good thing. So to get going, we’re looking for someone (maybe you) who really knows how to use Web 2.0 and Facebook and blogs and social media and YouTube and all sorts of good stuff like that — to tell the world about our wines and the place where we live: the Sonoma County Wine Country. In exchange, we’re offering you a “Really Goode Job” — a six-month job paying $10,000 a month plus accommodations! We want to hire a social media whiz (your title will be “Murphy-Goode Wine Country Lifestyle Correspondent”) who will report on the cool lifestyle of Sonoma County Wine Country and, of course, tell people what you’re learning about winemaking.

So how do you apply? Not in the oh-so-old-fashioned way of sending in a resume or filling out an application? Nope…Murphy-Goode is asking interested individuals to send them a video, “60 second (or less) video in English, created by you that shows why you are the best person for the job and exhibits your ability to communicate. It should be entertaining. We are looking for a video that demonstrates your storytelling, personal presentation, video production skills, creative content, enthusiasm, knowledge of Murphy-Goode wines and the Sonoma County Wine Country.”

I’ll be following this to see how the experiment goes.

Both Sides of the Table

In reading Ask the VC by Brad Feld, I came across the blog, Both Sides of the Table by entrepreneur turned VC, Mark Suster. Having spent some time reading through it, I like what I’m reading. Mark is interesting, on-topic and with lots of good things for entrepreneurs. To get to know his blog, take a look at this series of posts which begin with The First VC Meeting. Print out this series, and find a time to read through all of them, preferably in one-sitting. I think you’ll enjoy it. Let me know what you think.

Washington and the VC

Jeff Cornwall in his blog, The Entrepreneurial Mind, pointed out something today that really resonated with me. He said:

“I continue to be concerned about the inordinate amount of attention that Washington is giving to venture capital. There seems to be an assumption that VC investment is a White Knight that will help spur entrepreneurship in America and pull us out of our recession.Remember, venture capital only funding a small part of the entrepreneurial sector. In fact, one study found that 99.962% of entrepreneurial ventures in the US had NO venture capital investment.”

This reminded me of conversations I would have back at Rollins College with my friend and chairman of the Crummer Graduate School Center for Entrepreneurship Board of Advisors, Bill Grimm. Every year, after the entrepreneur of the year awards were handed out in Orlando, we would look through the list of companies that were in the running of the award, and we would usually find, if we were lucky, one company in ten that was venture backed. The others were done through bootstrapping. Yet, throughout the country, the interest is always in seeing VC firms come to town, and now Washington has picked up on that same theme. Jeff is right, the current assumption making the rounds of our nation's capital is that the VCs will be the ones to get us out of the mess we’re in. While they will certainly help, in truth, it’s going to be that 99 plus percent of companies that are started slowly (with help from family and friends), grow gradually, and hire continually that will be the ones that are the true catalysts for change in the United States.

I Need Your Help

I need help and I’m reaching out to my blog for it. At Syracuse University, we run an outstanding program called the Entrepreneurship Bootcamp for Veterans with Disabilities. The program assists our post-9/11 veterans who have been disabled as a result of their military service and helps them to start their own businesses. The program was founded at Syracuse University, and now is offered nationally in partnership with four other great universities; Purdue, Texas A and M, UCLA and Florida State. Right now around 125 veterans go through this program each year.

The number of American soldiers injured in Iraq and Afghanistan, as of March of 2009, has exceeded 45,000. Improvements in body armor and other technological advances have resulted in an unprecedented number of soldiers surviving major injuries, but returning home with a chronic disability. Further, the number of veterans suffering from post-traumatic stress and other psychological challenges resulting from their service suggests that the number of Americans who endure a disability as a result of military operations since 9/11 has exceeded 300,000. Notably, many of these veterans are young adults, in their early to mid-20s. For the veteran returning from war, it is often the case that the traditional means through which to ‘climb the economic ladder’ are closed as a result of a physical disability. Simply put, at Syracuse University we represent entrepreneurship as a means through which veterans with disabilities can engage the economic engine of their community, and ultimately our nation.

The Entrepreneurship Bootcamp for Veterans with Disabilities program consists of three phases: an online course focused on the fundamentals of entrepreneurship and small-business management, followed by a 10-day, entrepreneurship bootcamp at one of the five universities where some of the best entrepreneurship instructors and entrepreneurs from around the country will focus on helping these men and women turn their entrepreneurial dreams into a reality. The third phase of the program will consists of on-going mentoring support to our EBV students. Importantly, the program is offered entirely free to our veterans. They have already earned the price of admission.

I need help because we would like to provide the veterans who go through this program with even more assistance than we already do. In particular, we’d like to provide them with a laptop computer, and a printer to help them launch their entrepreneurial effort. We’ve put together an impressive sponsorship package for participating companies, but I need contacts in upper management or in the sponsorship department at companies like HP, Dell or Apple to donate the laptops and printers. This is a fantastic program, but I need your help. If you happen to have a contact that you’d like to share, send me an email at tkruczek@syr.edu or call me at 315-877-2306. Thanks for your help.

Raising Money in a Different Way

While in business schools, we like to talk about venture capital and angel investors, the reality of entrepreneurial life is that most entrepreneurs raise money from family, friends and fools. But in the June 5 Wall Street Journal , Diana Ransom brings up some other options for funding a business in her article, Unique Ways Entrepreneurs are Raising Money.

The Times They Are a Changing

Reuters writer David Lawsky just posted an interesting article on the venture capital industry, called Venture Capitalists See Their Industry Shrinking. While this industry gets far more attention, both good and bad than they deserve, the piece provides some interesting insights and stats; one of which was that the number of VC firms dropped by ten percent over the last year as investment money disappeared.

From the article:

"It is very tough to make a commitment to a new venture fund these days," said Panda Hershey, director of global private markets for the large pension fund, TIAA-CREf. "Many of us benefited in '99 and 2000, but subsequently it became very tough for venture as a whole to get returns," she told a panel at the Venture Capital Investing Conference. "I would say, please produce some returns before we re-up with you."

Now They Get It

A favorite movie of mine is “Wag the Dog” the 1997 dark comedy with Robert DeNiro. In it, his character who is a political consultant, keeps using the phrase when referring to the press, “Now they get it.” I was thinking of that expression when I saw the piece in today’s Wall Street Journal written by Josh Mitchell, “Car Chiefs Grilled on Dealer Closings.” Now Congress and the press are "getting" one of the untold stories about the entire mess with the auto industry, and that’s the problem that shutting down thousands of dealerships will cause for small towns all across the USA.

As one example, over the years I’ve spent a lot of time in Cody, Wyoming, and in that town of around 7,000 year-round residents, the car dealers were among the biggest and best employers, they were big contributors to charity, and they were the ones youth baseball, soccer and hockey teams went to for sponsorship. Truth be told, youth sports in our country the last twenty years would have been in a world of hurt without car dealers as they were the ones who paid for lots of uniforms, bats, and balls.

This same story about economic impact for communities can be told across the USA, and with these dealers going out of business, the trickledown effect for our country will be huge. This should have been something that was addressed with Detroit before the billions in bailout money was given to them, but as is often the case, “Now they get it” is heard later rather than earlier and the impact has yet to be felt. Rest assured though, it will be felt.

Bloblive!

A couple of years ago, I met with the president of Blue Orb, Pete McAlindon in Orlando, and he introduced me to Jeff and Rich Sloan, who had launched StartupNation. Over coffee, we talked about the need for “community” for entrepreneurs. We talked about how lonely it is running your own shop and how you need to have people to talk to about your problems. When I owned my companies, there were a group of us who used to go out for dinner and beer at tradeshows, and talk about our problems. We weren’t competitors, so we felt that we could talk and share, and in the process we learned from each other.

I bring this up because of an article on entrepreneurial community in the NY Times written by Don Steinberg. The article, A Network for Small Businesses and Start-Ups, provides some interesting food for thought. The article talks about bloblive, which as the article mentions are events trying to create a community where entrepreneurs can feel free to share ideas and concerns and get feedback and maybe even some advice or a connection. Think of it as idea networking for the entrepreneur.

While it’s possible that the owner of the program, the Advanta Corporation (yes, that Advanta Corporation which is in a world of hurt these days thanks to their credit card business) isn’t the best one to launch what they are calling ideablob’s, perhaps colleges and universities through Centers for Entrepreneurship are better served to fill the need the Advanta has identified. But hats off to Advanta for taking the first step and reaching out to our community through these forums.

Professional Athletes and Doing the Right Thing

Sometimes professional athletes are seen as a group of immature, spoiled brats. Read this piece from ESPN and read about the Denver Nuggets (including Syracuse University grad Carmelo Anthony) doing the right thing.

Entrepreneurship is More than Just Tech Companies

David Berg provided me with an interesting piece on entrepreneurship and the government from Nextgov.com. The article described the Obama administrations interest in startup companies and the technology that often times jumps out of these entrepreneurial ventures.

The Obama administration is reviewing the government procurement process to better position innovative startup companies to compete for technology contracts, said Vivek Kundra, the federal chief information officer, on Tuesday.

Kundra made the announcement at a business conference in Washington hosted by the Mid-Atlantic Venture Association, which represents professionals from private equity and venture capital firms that together manage more than $100 billion in capital.

"We're looking at the procurement process to make sure we're able to tap into some of the best ideas. We cannot continue to spend billions of dollars on IT projects that haven't produced the dividends we've been looking for," Kundra said in his speech. "The federal government can lead when it comes to innovation."

Government officials are "very early" in the process of improving the procurement system to bring in promising VC-backed technologies, Kundra told Nextgov after his speech.

While I of course, applaud anything the administration is doing that helps entrepreneurial companies, Washington might also want to think of the literally thousands and thousands of non-tech companies that are in need of better access to capital, lower tax rates, and other support that will help them launch and grow businesses that will employ many people providing that wonderful trickledown effect. Tech and the VC companies get the attention, but it’s wise to remember that VC companies invest in only around 3500 (mostly tech) deals each year.

A Time for Entrepreneurship

Very nice piece of inspirational video on entrepreneurship that comes to us from grasshopper.com. Thanks to Jeff Cornwall and of Belmont University and his blog, The Entrepreneurial Mind for posting.

Get that Job!

Right now at my school, students are deeply into the process of finding a job. And since the interview is a critical component for getting hired, here is a video that portrays one way to get that job:

http://www.omgsoysauce.com:80/3319/how-to-nail-your-next-interview/

Thanks to Allen Kupetz for sending this along.

Help is Available

Maybe it’s because I’m a closet “foodie” but whenever I run across a story in the press about the food and hospitality industry, I always read it. In the Wall Street Journal, the story titled, Sweet Returns, I also liked the message. In particular, note the issue of reinvention and seeking out of resources from the community.

So, instead of hunkering down and hoping the economic downturn would be short-lived, Mr. Gottenbusch reinvented his business. With the help of the Manufacturing Extension Partnership, a program partially funded by the Department of Commerce and designed to give small firms access to manufacturing specialists and other advisers, Mr. Gottenbusch looked for new customers in unusual places, created unique products to drive store traffic, joined a purchasing association to keep costs in check and took advantage of the real-estate slump to scoop up a new store location on the cheap.

The result: Servatii not only survived last year, it thrived, with sales rising 15% to $8.5 million. Mr. Gottenbusch declined to give profit figures.

As an entrepreneur, one of the biggest mistakes I made was in trying to do it all on my own. I never once turned to the colleges or universities in my home town of Orlando, and never once did I turn to the resource providers such as the SBA, Department of Commerce or others that could have helped me. Now that I’m in the academic world, I always remind entrepreneurs that there are resources out there in the community, many at no or very low cost, that can help you grow your business. The challenge for the resource providers is to find ways to reach the entrepreneur. The entrepreneur needs the help; they just can’t spend the time trying to look around the town to find it. The resource providers need to find ways to reach their potential client and make accessing their services simple and easy.

Entrepreneurs and the Recovery

Nasir Ali of the Syracuse Technology Garden passed to me an article about entrepreneurship from Newgeography. The article was entitled, Entrepreneurs Ignored in Recovery Plans, was posted on April 22. The article detailed results from a Kaufmann survey on entrepreneurship and the government. The key findings of the Kaufmann report included the following:

By a margin of three to one (63 percent to 22 percent) Americans favor business creation policies as opposed to government creating new public and private sector jobs. In fact, 79 percent of respondents say entrepreneurs are critically important to job creation, ranking higher than big business, scientists, and government.

Only 21 percent of all survey respondents say that the stimulus package supports entrepreneurial activity and 33 percent believe it will retard entrepreneurship.
While 78 percent of survey respondents say innovation is important to the health of our economy, only 3 percent say they believe the stimulus package will encourage innovation.
Americans think the government does little to encourage entrepreneurship, despite its importance; 72 percent of respondents say the government should do more to encourage individuals to start businesses. Almost half of respondents think the laws in America make it more difficult to start a business.

The article also discussed the SBIR (Small Business Innovation Research) and the STTR (Small Business Technology Transfer) programs, advocating at the conclusion of the piece that the USA should be “doubling if not tripling the investment in both of these programs. At a minimum a $5 billion SBIR program should be put in place. It will get us much more in growth than the Treasury bailouts of the banks, or General Motors. It represents both what America wants – Small Business Innovation – and needs in these times of economic stress.”

US News Ranking in Graduate Entrepreneurship Programs

I’m pleased to announce that the US News and World Report released this morning it’s list of specialty programs in MBA schools, and the graduate entrepreneurship program at the Whitman School of Management at Syracuse University was ranked 15th (tied with Duke) in the nation! For us, this is particularly good news as we’ve moved up three places and ahead of outstanding schools such as University of Michigan, Northwestern, Dartmouth and DePaul University.

Rankings, while always interesting to those in academia, are for me a time to reflect on all the people who’ve helped us achieve this honor. In particular, I think of all of the entrepreneurs who’ve reached out to our program and helped our students by judging business plan competitions, speaking in our classrooms, all the way to just having a cup of coffee with interested students. While I’m very pleased that entrepreneurs have provided so much help and support to the Syracuse University program, I also know that entrepreneurs are helping colleges and universities across the country. Thanks to all of you for making a difference in the lives of so many students who are excited about entrepreneurship. We couldn’t do it without you!

Starting a Business... with $10!

Allen Kupetz, author of The Future of Less, sent over this from the International Council for Small Businesses. This comes from University of Alabama professor Craig Armstrong who challenges students in an experimental class to start their own business… as long as they spend $10 or less! Now before you start to laugh, think about the valuable learning that will take place launching a business on ten bucks. In my old days at Disney, usually over a couple of beers, we would debate the merits of who is more creative: someone who spends $50 million on a great attraction, or someone who delivers a very good attraction for $2.5 million. In Dr. Armstrong’s class, students have to be very creative in accomplishing something that still fits a need in the marketplace, while doing it for very little money.

The $10 Business, developed by Dr. Craig Armstrong of the University of Alabama, is an experiential learning exercise that requires students to start their own business using $10 or less. A member of USASBE, Dr. Armstrong won the Third Place Prize in the 2009 3E-Learning Competition for the $10 Business. One key rule of the exercise requires students only allowed to spend or invest additional funds in their business with profits earned. In the execution of their business plans, students are responsible for keeping a weekly diary that details the thoughts, actions, and responses throughout. Dr. Armstrong notes a very favorable response from his students, who claim this exercise as the highlight of their undergraduate education. A strong sentiment indeed, especially considering that Dr. Armstrong uses the exercise with his first-year entrepreneurship students.

Some $10 Business stats include;
Dr. Armstrong's highest earner made over $2,200; Student used wine corks to make framed displays and magnets for customers.
Same student continued to operate the wine-cork business for the rest of the semester and earned over $3,000.
Two students earned over $1,000 after 5-weeks.
In a class with an enrollment of 47, the average amount of profits earned per student was $200.
This same class generated about $9,400 of wealth on an initial investment of $470.
90% of all students make mor than $10 in five weeks

Dr. Armstrong's inspiration for developing this exercise lies in his entrepreneurship research regarding the resourcefulness of entrepreneurs. The $10 Business is intended to identify resourcefulness and expose the entrepreneur's creative side. According to Dr. Armstrong, “This exercise raises the type of research questions that we need to ask in entrepreneurship.”
The $10 Business is truly a test of the imagination. Especially for entry level entrepreneurship majors, this exercise produces an initial shock that soon fades away after some thought and discussion about the ways to start a $10 business. The initial question is always; do I start a service-oriented business or develop a product offering? The answer to this question will undoubtedly be affected by given limitations, but real success comes when a student can most effectively maximize the impact of their initial investment.

Dr. Armstrong does point out, however, that there is a lot of heterogeneity in students' imaginations. Some business ideas are bland, some are really innovative and others fall into the undergraduate party mentality of creating a beer delivery service. All things considered, students turn to service-oriented businesses more frequently than product offerings. Some past service-oriented businesses include dorm room cleaning, home delivery for beer, house painting, and babysitting. One student started a business that supplied out-of-town condo owners with food, supplies, and labor to stock and prepare their homes prior to arrival. As Dr. Armstrong points out, “College service-oriented businesses such as food and drink delivery are much more representative of the majority as opposed to those selling home-made gift baskets.”
The $10 business is also a result of Dr. Armstrong's past experiences with students who have often expressed their desire to learn how to start a business. This experiential learning exercise gives students' the chance to see first hand what it takes to execute such a task. The experience gained is invaluable for the entrepreneur, particularly considering that they began with only ten dollars!

In the lecture that immediately precedes implementation, Dr. Armstrong expresses to the entire class that there are no ground rules for the creation of your business. The only requirements are; the daily maintenance of a journal that includes ideas and business plan initiatives, and observation of the $10 maximum initial investment. Dr. Armstrong encourages the inclusion of emotions and thought in the journal because it serves as a great way to track progress over the five-week process. The journal is graded for completion and weekly maintenance as apposed to quality ad success which will be difficult to judge. The goal of the exercise is to award completion and thoroughness and not to punish students for unsuccessful ventures because successful entrepreneurs often have stories of failure.

Over the course of the exercise, Dr. Armstrong will only share a few journal entries with the class for guidance. The journal does have a very informal style. Dr. Armstrong even recommends creating a separate Gmail account for email all correspondence and accessibility to the gChat and Google Groups features.

Students who have participated in the exercise have started a wide-array of businesses that cover a multitude of industries. The real joy for the professor is to see the spark of imagination among students and their commitment to making it work. Dr. Armstrong told me that, ‘Pushing the initiative is really fun to watch and after 5 weeks, when they want to take the business farther, then I can help.'

Quotes from Students
"Our professor gave us the seemingly impossible task of starting a business and running it for the semester... with a start up budget of only $10! How do you start a business for $10? I started making crafts with wine corks. I started out small making wine cork boards and refrigerator magnets, and it has been a very good experience so far. I started collecting wine corks from local restaurants and wine stores on a weekly basis to build up as much inventory as I could. Once I got to the point where I had enough capital to start buying corks in bulk, things actually took off."
"This is one of the best activities that I have done during my tenure at the University. I enjoy practical experiences. I wish the University would place more emphasis on activities of this type."
"I really thought that it was a great learning experience because when you first think about starting a business with just ten dollars, it seems impossible, but when you gather information and find a problem that can easily be solved then you can start your own business."