Small Ideas

Get yourself a cup of coffee, settle back in a comfortable chair, and enjoy 15 minutes with Allen Kupetz. Allen’s outstanding presentation took place at the recent TEDxOrlando conference and it considers things such as purple catsup, the Segway, and the interesting notion of The Small Idea.

Learning from Six Companies That Didn't Make It

In business schools, we love to talk about the successes. Nothing like talking about Starbucks, Zappos, Five Guys, Amazon and many of the other startups that became the big guys. And while I have no problem discussing these companies, I think it’s important that we also talk about those that didn’t make it. The successes are certainly what we want our students to aspire toward (and perhaps give a nice gift back to the school that made it all possible), but it’s also important to take a look at those businesses that didn’t make it, and learn from them as well. Often times those that failed to make it, if we listen carefully, have more to tell us.
To that end, take a look at the article from the NY Times, How Six Companies Failed to Survive 2010 by Eileen Zimmerman.

Twitter and the NFL

Ever since we used to live out west, I’ve been a Denver Bronco’s fan. Yes, they were an absolute mess last year(there is a lesson for all us to heed in that mess dealing with hiring), but I thought the article in today’s Denver Post on John Elway, the NFL and Twitter was interesting.

From the article:

"It was important to us to reach our fans directly and in the most personal way, and it was important to restore some of the credibility in our organization that might have been lost in a challenging season. We owe that to our fans."

VC's and the Choices That They Make

Not the first time I’ve run across an article on how VC’s make their investment decisions, but given the amount of time that we spend talking about institutional investors, it makes sense to take another look at this topic. So here is the SF Chronicle article, How Venture Capitalists Make Investment Choices by Ben McClure.

From the article:

With mature companies, the process of establishing value and investability is fairly straightforward. Established companies produce sales, profits and cash flow that can be used to arrive at a fairly reliable measure of value. With early-stage ventures, however, VCs have to put much more effort into getting inside the business and the opportunity.
Here are some of their key considerations:

1. Management
2. Size of the Market
3. Great Product with Competitive Edge
4. Awareness of Risks

Why Businesses Fail

Interesting blog in the NY Times by Jay Goltz on what he feels are the top ten reasons businesses fail. The entire article can be found at his blog, but I’ve listed below his top ten:

1. The math just doesn’t work.
2. Owners who cannot get out of their own way.
3. Out-of-control growth.
4. Poor accounting.
5. Lack of a cash cushion.
6. Operational mediocrity.
7. Operational inefficiencies.
8. Dysfunctional management.
9. The lack of a succession plan.
10. A declining market.

While I agree in general with those reasons, I’ve also seen businesses fail because of poor customer service, poor hiring practices, an owner who always had to be the smartest person in the room, owners who wouldn’t listen to their employees, poor (or no) use of technology and finally because of a lousy business model.

Ego Trips Rule!

Hmmm…not sure I agree, but take a look at this from Saturday’s (January 8, 2011) Wall Street Journal:

College students would rather have their self-esteem stroked than eat their favorite food, have sex or drink beer, a study found. In one scenario, 130 subjects were asked to think of something they knew boosted self-esteem, such as getting a compliment or a good grade.

They were then asked to rate, on a 1-to-5 scale, how much pleasure the experience brought them and how much they "wanted" it (right now, in general, in good times, and in bad). In the same way, they rated the experience of having sex and eating their favorite food.

Overall, the students valued the self-esteem increase more than good food or sex. The ratio of "wanting" to "liking" was used to gauge the addictive qualities of each pleasure: Addicts can want a fix more than they like it. While students said that they liked all of these things more than they wanted them, the gap was narrowest in the case of self-esteem—which hints at the intoxicating effects of ego, the authors said.

From "Sweets, Sex, or Self-Esteem? Comparing the Value of Self-Esteem Boosts with Other Pleasant Rewards," Brad J. Bushman, Scott J. Moeller, and Jennifer Crocker, Journal of Personality (forthcoming)

I'm Not a Horse, I'm a Person

Ran across this piece from Daniel Pink about what motivates us. I’ve found myself lately thinking a lot about what motivates (and what kills motivation in) people and the research behind this “mini-lecture” is interesting. As entrepreneurs, we’ve got to be the master motivator for our teams, because they are typically small and underfunded. Based on the research, the lack of money for salaries isn’t a killer because it appears to be not that important in the grand scheme of motivation.