Is Anybody Listening?

One of the common themes I’ve been hearing lately from entrepreneurs is that we’re being ignored by Washington. A couple of newspapers today, the Orlando Sentinel and the New York Times, in separate stories, picked up on that same issue. First from Sara Clarke in the Sentinel:

While the nation's giant automakers take federal aid and financial behemoths apply for funds from the government's Troubled Assets Relief Program, the nation's small companies have had a lot of trouble getting even conventional loans.The economic-stimulus plan, which President Barack Obama is expected to sign Tuesday, could provide much-needed relief. But the impact of the $787 billion plan remains to be seen -- previous efforts to loosen small-business credit and spur the economy have had little effect.

More than 380 banks nationwide have already received federal funds from the controversial TARP fund, which has paid out more than $350 billion so far in an effort to counter the financial crisis and thaw the credit freeze. Among the payouts: $45 billion each to Bank of America and Citigroup, $40 billion to AIG, and $25 billion each to JP Morgan Chase and Wells Fargo.Those numbers underscore the yawning divide between Wall Street and Main Street, where businesses are usually looking for loans to buy "a truck and a lawn mower."Such small loans are hard to come by these days, even for well-established businesses, said Jan Mangos, an Orlando-based counselor with SCORE, a nonprofit group that offers free help to small businesses. "There is a lot of bad feeling out there," Mangos said, "particularly when you get people who have had a track record of success."

And then from Mickey Meese in the New York Times:

The $819 billion bill passed by the House last week and a similar measure under consideration in the Senate simply do not go far enough to bolster the small-business sector, owners and those who lobby on their behalf say. “Small businesses are a job engine for the economy,” said David French, vice president for government relations at the International Franchise Association. “Unfortunately,” he said, the stimulus package offers “a thimble-full of fuel for this engine.”
By his estimation, only 0.05 percent of the House bill is dedicated to small-business lending programs, and the Senate version is only slightly better. “It’s not a lot of money relative to the scale of the credit market problems,” Mr. French said.

While President Obama wants Congress to move quickly, Karen Kerrigan, president of the Small Business and Entrepreneurship Council, said more time should be spent examining other ideas. “I think more than expediency,” she said, “it has to be a good bill.”
“If small-business owners are to shoulder the responsibility for getting our nation back on sound economic footing,” Ms. Kerrigan said, “they need something from this package that will encourage them to invest, hire and prepare for growth.”

Seed Stage Funding

With my move to Syracuse University now in full court-press mode (we are moving into the house tomorrow), while taking a brief coffee break and catching up on some reading, I came across something that might be of help to entrepreneurs going through the seed stage funding process. I ran across it at the blog; Ask the VC, these documents were created by TechStars. Take a look at an example Term Sheet, Articles of Incorporation, Bylaws, and Subscription Agreement…all of which give the entrepreneur involved in funding their business an idea of what doc’s will be sent their way.

Secrets of Netflix Success

In the current issue of Fortune (February 2), take a look at the short article, The Movie Man which discusses the success of Netflix. I also liked the accompanying sidebar on Reed Hastings and the Four Secrets of His Success. Here are his keys with my parenthetical comments:

1. Target a specific niche (which includes being sure that there is a specific pain in the marketplace…and make sure that the pain is real and substantial)
2. Stay flexible (while your focus has to be the short term, you also have to think of the long term viability of your enterprise. Is your product or service a one-hit wonder that will be overtaken by the marketplace?)
3. Never underestimate the competition (or put another way, there is always competition even when you are the first in the marketplace because consumers always have other places to spend their money)
4. There are no shortcuts (Amen!)

The Entrepreneur on Campus is Moving North

Effective February 16, I’ll be writing this from a little further north… as I’ve been named the Executive Director of the Falcone Center for Entrepreneurship at the Martin J. Whitman School of Management at Syracuse University. While it’s very hard to leave my good friends at the Crummer Graduate School of Business at Rollins College and throughout Orlando, I’m excited about taking on this new challenge. I’m especially excited about meeting lots of students at SU from throughout the school who are interested in entrepreneurship as well as entrepreneurs from the Central New York area.

In the meantime, while I figure out where in the world we got all this stuff that we’re now taking to New York, you need to be thinking of ways to keep your business focused on the thing that’s most important to us…and that’s our customers. As entrepreneurs, customers are the king now and in this incredibly difficult economic environment, we need to be sure that our competitors aren’t stealing them from us. Take a look at all the ways that we touch our customers; from the parking lot to the website to what they hear when they call us and see how we can make it easier for our customers to deal with us. Sometimes we get so caught up in making sure our policies and procedures are in place, that we forget that sometimes people actually want to buy stuff from us. In order to be sure that we are handling customers the way we should, ask a couple of your friends who are not customers, to “shop” you and make an effort to get information on your products. Have them go all the way through the purchase process and then have them report back to you on what they experienced. Listen to them (without getting mad) and then take action to correct whatever problems they discovered.

The Use of Social Media

I’ve been spending more time thinking about the use of social media, not only for entrepreneurs, but also for my world inside a College. In this regard, my friend Mark Carbone, the president of XE Corporation, has been taking me through an educational process, and it’s interesting to see the things hitting the press on this subject. Take a look at a relatively recent piece from the PR company, Edelman. The article on their website, The Social Pulpit: Barack Obama’s Social Media Toolkit examines the role that social media played in President Obama’s campaign. The piece has some interesting lessons for those of us still learning the craft. According to Edelman, the primary social media lessons from his campaign include:

1. Start early
2. Build to scale
3. Innovate where necessary and do everything else incrementally better
4. Make it easy to find, forward and act
5. Pick where you want to play
6. Channel online enthusiasm into specific, targeted activities that further the campaign's goals
7. Integrate online advocacy into every element of the campaign

Not Waiting for a Bailout

These are most certainly difficult times for all people, but it’s remarkable to see the resiliency that’s coming from the entrepreneurial world. While the big companies are hanging out in Washington looking for a hand-out, the entrepreneurs that I talk to tell me that they are doing what entrepreneurs do…focusing on their customers, working hard and not waiting for the folks in Washington to solve the crisis. Make no mistake, entrepreneurs are concerned about the economy, but even in these challenging times they are working to position themselves to be ready when the economy turns around. Here’s an article from the Los Angeles Times by Cyndia Zwahlen that confirms from the left coast, the things I’m hearing here in Florida. Below is a quote that I particularly liked:

"My focus isn't on a handout, my focus is to have the leadership skill and visionary skill to bring a lot more relevance to my business through becoming far more remarkable," said Michael Donner, third-generation owner of Barco Uniforms Inc., which employs 175 people in Gardena.

Amen to that Mr. Donner!

Making the Grade…Literally

Today’s Wall Street Journal ran an interesting story on how the economy is hitting the world of Venture Capital. See the complete article by Pui-Wing Tam: Venture Capital Performs Triage: With Cash Scarce, Only the Strongest Investments Get New Funding.

For more detailed information on Venture Capital by region, state, industry and stage, see the PricewaterhouseCoopers Money Tree Report: https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical