Inc Small Business
Procter & Gamble's former CEO offers simple but useful tips for better discussions at work and elsewhere.
A great deal of our lives is spent talking to people. The proportion may go up for salespeople and down for introverts, but everyone could stand to have more productive conversations.
Maybe you had good role models or instincts, but if you feel your conversational skills are lacking, a new book by A.G. Lafley, Procter & Gamble’s former CEO, offers good advice on how to make discussions less shallow.
In the book, Playing to Win: How Strategy Really Works, Lafley reveals his principles for fruitful conversation.
"People’s default mode of communication tends to be advocacy--argumentation in favor or their own conclusions and theories, statements about the truth of their own point of view.
"The stance we tried to instill at P& G was a reasonably straightforward but traditionally underused one: 'I have a view worth hearing, but I may be missing something.' It sounds simple, but this stance has a dramatic effect on group behavior if everyone in the room holds it. One, they advocate their view as a possibility, not as the single right answer. Two, they listen carefully and ask questions about alternative views."
This approach has obvious benefits--it's far more likely to promote problem solving than meetings where each participant argues their point of view.
Improving the quality of discussions should lead to better decisions and better meetings, but these skills could also strengthen your personal relationships. So how do you employ "assertive inquiry?" Here are three steps:
Advocate your own position, then invite responses. Try saying, “This is how I see the situation and why. How do you see it?”
Paraphrase the other person’s view and ask for their take. “It sounds to me like your argument is this. Is that what you're saying?”
Explain a gap in understanding. “It sounds like you think this acquisition is a bad idea. Could you tell me how you came to that conclusion?”
Advocating for your ideas may help you get your way, but blending assertiveness and inquiry is guaranteed to get people on your side. The reason: "Inquiry leads the other person to genuinely reflect and hear your advocacy rather than ignoring it and making their own advocacy in response," says Lafley.
How have you improved conversations?
Handle founder Shawn Carolan explains why pursuing email perfection is all but pointless.
For many of us, the constant ping of inbox alerts and the 24-hour nature of today's news cycle serve as a symbol for the stress of being constantly ON. If you could just get your inbox under control, then you could get off the tech treadmill and be fully in the moment, right?
It's an understandable goal, writes Handle co-founder Shawn Carolan on GigaOM, but it's never going to happen, at least not long term.
How does he know? Carolan has chased the inbox zero mirage and learned what's on the other side. He writes:
Over the past year-and-a-half while developing Handle, our entire company was in a race to zero. Inbox zero, to be precise. We set out to create a product that would allow us to leave work with zero emails in our inboxes and, so the thinking went, would lead to lives of zero stress (or at least until the next morning). We wanted to go home for dinner with friends and families and be fully present, in both body and mind. Wouldn’t that be amazing, transformative - invaluable, even?
Yes. So would alchemy, but neither exist. Inbox Zero, we discovered, is a mirage.
Like a fad diet, getting your inbox to zero only yields short-term results. In a burst of extreme discipline you can scrub your email account to sparkling, pristine condition. But just like that extreme diet, the results will soon fade away, leaving you more anxious and discouraged than before. So what's the inbox equivalent of sustainable, healthy living?
Setting priorities according to your individual values and getting everything floating around in your brain down on paper (or pixels). Psychologists have determined the real value in to-do lists is quieting something called the Zeigernik effect, which causes incomplete tasks to nag us. Simply writing down a detailed plan will kill the buzz and clear the mind.
Of course, as Carolan notes, this type of organization is essential but not sufficient as priorities are also about values. "Each moment is a value judgment, and only yours to make," he writes. Establishing what constitutes an unmissable "must-do" versus a message you can leave well alone involves values.
Is making a speaking engagement more important than your child's school play? Is mentoring a must, or is writing more important? These decisions, taken together, will define your life values, and nothing will make them easier.
With your values nailed down and must-dos planned out, pursuing inbox zero will be less important. If you want to feel better, much like getting in shape, it needs to come from a change in behavior and understanding your values--not bursts of obsessive guilt.
Have you had success achieving inbox zero?
Having trouble generating synergy with your paradigm shift? The buzz-phrases need to go. Here are nine we'd like to buzz-saw.
Over the past 12 years, I've covered countless tech companies, from mobile app developers to companies that help you find a place to work in a big city. After sitting through hundreds (or is it thousands?) of meetings and recording countless interviews over the phone, I've taken note of the catch-phrases people say again and again. And again. Until the point at which they no longer mean anything. Now they're just annoying.
Here are the nine terms I'd like to kill.
With apologies to Eric Ries and the Lean Start-up crew, the word pivot has lost all meaning. Originally, it meant analyzes your customer base and revenue and making a fairly dramatic change. A design company, say, might shift to become an app developer. But now start-ups characterize nearly any change as a pivot. (I can't help but think of the basketball "pivot" which is more of a side-step move.) It's okay to analyze customers and revenue and make changes. But calling them pivots doesn't make you sound any smarter.
Here's another term I liked when people first started using it, circa Pinterest's launch in 2010. But think about it: We've been talking about curating the Web now for three years. That's like 50 years in the analog world. There's now "media curation" and "SEO curation" and "start-up curation"--we're curating our use of the word curate.
3. Eating your own dog food
Other than the obvious gross factor, this phrase refers to how a company should use it's own product. If you make an accounting app, you better be using it for your own accounting. But what was once a somewhat helpful metaphor has become tired and, frankly, completely obvious. Of course you should be testing your own product. No need to "dogfood it." (Don't even get me started on the grammatical offense committed in that previous sentence.)
4. Disruptive technology
Even when a small airline tracking start-up like RouteHappy.com comes along, it bears some similarities and owes some of its inspiration to a site like Kayak. No slight to either service. Few entrepreneurs come up with something the world has never heard of. They come up with incremental innovations that improve--rather than disrupt--what already exists.
5. Lipstick on a pig
In design circles, if you say this phrase in a meeting you will be taken out back and ridiculed for hours. It's a cliche. You're talking about an analytics database that has a trendy new look but woefully broken code? Sorry, it's still a cliche.
6. Barrier to entry
In the Silicon Valley sub-culture, when someone talks about your start-up and drops the phrase "barrier to entry" it's basically the equivalent of saying "your idea sucks." What it really means is that your company is not going to get funding, or customers hate it, or that there's a major technical problem. Instead of using the phrase, just be up front: This isn't a barrier to entry; it's a failure.
7. Finding synergy
It's hard to say this one with a straight face anymore. It reminds me of the old Fake Steve Jobs blog written by Daniel Lyons, who is now an editor at Forbes and writes for Newsweek. He used to put a bunch of goofy business phrases together like "let's find the synergy in our paradigm shift" in a way that always made me laugh. What's sad is that real people actually talk this way.
8. Best of breed
Doesn't every company view its product as best of breed? Who sets out to be the middle of the pack or the worst?
9. Social media
This one could get me in trouble, because I receive a handful of pitches per day from "social media" companies and many experts who make a living by analyzing social media. But when your car and even your baby's diaper can tweet for you, hasn't pretty much everything become "social"?
EBITDA multiples for your industry don't tell you much about what your particular company might be worth. Here's how to get a better idea -- and a better deal.
The other day, an entrepreneur friend called me in frustration. He’d been trying to figure out what his company might be worth, and the best information he could find was that multiples in his industry were currently between four and six times EBITDA.” (That’s earnings before interest, taxes, depreciation and amortization.) His point, which I thought was very fair, is that this resulted in a valuation range that was so wide as to be almost useless.
Despite the merger and acquisition industry’s obsession with EBITDA multiples, those numbers are really nothing more than a way of describing how much the marketplace thinks certain companies in certain industries are worth at a particular moment in time. They’re an “output” number that measures what companies are being valued at, rather than an “input” that would be helpful in determining the value of your own particular company.
“Then what,” asked my frustrated friend, “is valuation actually based on?”
I told him that you have to get back to basics: earnings, the quality of those earnings, and creating competition between buyers.
At the most basic level, the more money your company makes, the more it’s worth. Therefore, the best way to get more for your company is to grow the company so it earns more. This increases your book value, but larger companies also sell for higher multiples than smaller companies because their higher growth opens up a larger and more sophisticated market of potential buyers.
Quality of Earnings
Although mergers and acquisitions end up being presented as strategic moves in press releases and articles, at the most basic level any buyer is looking for a return on their investment. That means they want to buy companies with high-growth, stable earnings. The more stable and predictable your earnings are, the more you’re worth. This seems like a no-brainer, but company management often gets distracted by chasing after one new and exciting “next best thing” after another, and forgets all about the attractiveness of a smooth upwards trajectory.
You also need to dig out the risk factors in the way your company is currently operating. If 80% of your business is tied up in one customer, that’s not good. If your product is about to be made obsolete by new technology, that’s not good. Other risk factors include potential government regulation, gaps in your supply chain, how large your potential customer base is--the list goes on.
Not all profits are created equal. This is why basing company valuations on EBITDA multiples or a purely financial analysis can be so misleading.
There will only be a certain number of entities that have both the ability to buy your company and the desire to do so. When it comes time to sell, don’t just go to the guy down the road - reach out to all of them. Putting those buyers in competition increases the amount they’re willing to pay, as the opportunity for gain they initially saw in front of them turns to a fear of loss that someone else might end up with your company’s assets. Remember your Economics 101 class: the only true way to determine a product’s worth is to see what a willing buyer will pay in the free market.
Savvy entrepreneurs use these three pillars to make their business more valuable long before it’s time to sell. Bigger is better, so growth is important. Predictable, steady growth is the most attractive, and “swinging for the fence,” or one-time unpredictable events, are not very valuable. Finally, when it does come time to sell, make sure that you market the company to a large number of qualified buyers, so that the competition in the marketplace will drive your company’s value to a peak.
Smartphones may be smart, but the way we use them is still a little dumb. It's time for a mobile code of ethics.
As smartphones continue their unimpeded march into the pockets of millions of worker bees, new modes and patterns of user behavior--good and bad--are evolving constantly. (Take ringtone download trends as a quick example.) BYOD or no BYOD, what people do with those phones all day (and night) can cross all kinds of lines with compliance, laws and regulations, company policies, and most frequently (and alarmingly), basic common sense. Those smartphones might be smart, but the user behavior can get pretty dumb--not to mention costly and risky for employers.
So how does a company establish a few iron-clad rules of mobile behavior? First, recognize that your mobile policy (you do have one, right?), and the ethical guidelines that follow, need to mirror the practices and policies that govern your company generally. Second, commit to educating and communicating with your employees about what defines a good mobile code of ethics.
Here are a few principles to start with:
1. First and Foremost: Do Your Job
Zero tolerance for texting, personal calls, and cameras made sense in the early days of mobility, but no more. Mobile infuses our personal and professional lives too much for outright bans to be practical. But the importance of productivity means that companies should not be laissez-faire about mobile use at the office, either. Instead, find a middle ground: Make sure your employees separate personal from work-related mobile communications and that they understand that, worked-related or not, these devices should never distract them from communicating in the workplace.
2. Protect Confidential Info
The increased presence and usefulness of mobile devices for work purposes means that we can take our jobs with us almost everywhere. It also means that we can possess sensitive and confidential emails, documents, and conversations that, if lost or mishandled, can land companies in a heap of trouble. Set up systems that allow your employees to protect the information on their phones (from security apps to encrypted documents), and be clear about the importance of doing so.
3. Show a Little R-E-S-P-E-C-T
If your company purchases mobile devices for employees (or reimburses them for using their own) make it clear to your workers that that they have to hold up their end of the bargain, too. Company devices need to be treated with respect, and while the occasional loss, theft, or shattered screen is inevitable, enlist all of your employees in the proper care of company-related equipment. Put it to them in layman's terms: "If you just bought an iPhone 5, would you want to leave it at the bar after Friday happy hour?"
4. Know--and Follow--the Law
Mobile devices in the workplace mean that your company can find itself liable for the bad, or even just careless, behavior of your employees. Depending on the time, place, and involved parties, sexting can constitute sexual harassment. Employees texting while driving a company vehicle will become your problem too. Read up on the legal pitfalls of mobile devices in the workplace, and make sure your employees understand them too.
5. Respect Others' Privacy
When it comes to smartphones, it's important to maintain a level of trust between yourself and your employees. No, they shouldn't have free rein to do as they please on a company phone. But, they should also feel comfortable calling home to check in on the kids, browse Facebook during lunch, or respond to a text between meetings. Ideally, all personal interactions will happen outside of work, but make it known that if they respect your mobile policies and the company's time, you'll respect their need for privacy.
6. Get a Refresher on Common Courtesy
Mom said it best: Play nice. Mobility has changed how we work and live, but common courtesy--and some common sense--go a long way. You wouldn't like it if a job candidate checked his phone during an interview, would you? Show him the same respect. Oh, and you don't have license to text an employee after hours--unless it's critical for work and she's given you explicit permission to contact her that way.
While "Don't be stupid" is no way to frame an ethical policy, emphasizing common sense and good behavior is fundamental to any effective mobile code of ethics.
Customers lie because they secretly hope that you'll sell them something.
Customers are human, which means that they sometimes bend the truth. Here are the most common lies that customers tell and how to use them to your sales advantage:Lie 1. "We're totally happy with our current vendor."
No matter how much a customer claims to "love" their current vendor, they're always willing to consider a better alternative. Your job is to make it clear why you're the better alternative.Lie 2. "We don't have the budget."
Unless the customer is actually bankrupt, what this really means is "other projects have a higher priority." Your job is to explain why your offering is more important than what's already been budgeted for.Lie 3. "I am the sole decision-maker."
This is usually wishful thinking. Even in "Mom and Pop" operations, "Mom" can veto decisions that "Pop" makes. In big companies, decisions are always by consensus. Your job is to discover (and sell to) all the stakeholders.Lie 4. "Send me some information and I'll look it over."
This is how customers say "I'm busy so get lost" without being rude. Your best bet here is to agree to send the information but also ask something like: "Just out of curiosity, what are your priorities in this area." Keep the conversation going.Lie 5. "I'm sorry I missed our scheduled meeting."
Well, probably not all THAT sorry because clearly something more important came up. Fortunately, social convention now puts the customer under an obligation to do something to make up for wasting your time.Lie 6. "We'll consider all bids equally."
Sorry, but in every sales situation that goes out for bidding, there's somebody who's got the inside track (usually they wrote the RFP). Your job is to either be that somebody or earn the write to tweak the RFP.Lie 7. "Your competition is much cheaper."
The customer is well aware that there's a perfectly good reason (like better service or more features) why your offering costs more. If not, then the problem lies in how you're presenting and positioning your offering.Lie 8. "If you don't give us a huge discount, the deal is off."
These last minute demands are how customers test to see that they've negotiated the best deal. If you fold and give the discount, they'll know you were about to cheat them. If you stand your ground, they'll sigh in relief and pull out the checkbook.
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For employers with low-wage workers, a way around higher costsBy now, you surely know about the Affordable Care Act's employer mandate, which requires companies with 50 or more full-time employees to provide affordable health benefits or else face penalties. But what if you provide insurance, and your employees don't want it? For some employers, that could be a kind of best-case scenario. By offering health benefits that meet the ACA's affordability requirement-;with no employee having to pay more than 9.5 percent of their W-2 income toward premiums-;they can avoid penalties. And if employees voluntary decline the coverage, they can also avoid paying premiums. Why wouldn’t employees want to take benefits? In a word, arithmetic. For someone making $25,000 a year, premium contributions for individual coverage could hit nearly $200 a month and still be considered "affordable" under the law. The "individual mandate" penalty for not having insurance in 2014, by contrast, is just $95, or 1 percent of household income over the tax filing limit. It's easy to see the financial incentive for someone who's feeling healthy, and lucky, to pay the penalty and pocket the difference. Fast-food chains Popeyes and Wend'’s are two big employers that are counting on lower-wage workers to do just that. In March, Popeyes's U.S. president, Ralph Bower, told the Huffington Post that many workers would rather pay the $95 fine (the penalty maxes out at $695 per uninsured person, or 2.5 percent of household income over the filing threshold, in 2016) than opt in to the company's coverage. Only about 5 percent of Popeyes employees, after all, had signed up for a high-deductible health plan offered by the company that cost just $130 per year. Meanwhile, in March, Wendy's cut its initial estimate of Obamacare-related health-care increases by 80 percent, primarily based on the expectation that many employees will decline insurance. It's certainly not the scenario that policymakers intended, but it's a reality that could bring at least some relief to plenty of businesses beyond the fast-food industry. According to a recent survey of about 1 million U.S. employees by the benefits consulting firm ADP, participation in employer health plans starts declining sharply at income levels below $45,000. While 81 percent of employees making more than that participate in employer health plans, participation rate drops to just 37 percent for single employees earning between $15,000 and $20,000 per year. "I have tons of clients who are banking on employees not taking the insurance and just paying the personal penalty," says Michael Bodack, president of York International, a benefits agency in Harrison, New York. Although you can’t financially induce someone to not buy insurance, you can-;and should-;clearly communicate the full range of options to employees. In their enrollment packages, says Bodack, "some firms are going to actually put choices A, B, and C, and one choice will be 'Go without insurance.'" Employers with more than 200 employees will need to be especially vigilant. Starting in 2014, if they offer health coverage they will be required to automatically enroll full-time employees in a plan, even if they don’t choose one for themselves. Employees can still opt out, but it will up to the employer to make sure they know that. Whether you're counting on employees to take benefits, or praying they won't, following the rules, and communicating the facts clearly, is your best course.
Thanks to a $10 billion jump, Bill Gates surpassed Carlos Slim.
As Microsoft shares hit a five year high Thursday, Bill Gates reclaimed the title of the world's richest man, according to Bloomberg News.
Bloomberg's Billionaire Index pinpoints Gates' value around a cool $72.7 billion. He surpassed Carlos Slim who previously held the title with $550 million. According to Bloomberg, "Slim’s fortune has dropped more than $2 billion this year as Mexico’s Congress passed a bill to quash the market dominance of the 73-year-old billionaire’s America Movil SAB."
Gates, Slim, and Warren Buffett, who placed third on Bloomberg's list, have been playing musical chairs with the title for the past five years.
The creator of tech giant Microsoft and founder of the Bill and Melinda Gates Foundation is notoriously shrewd when it comes to money. In a recent Reddit Ask Me Anything, he said, “I definitely think leaving kids massive amounts of money is not a favor to them," and cited Buffet as an inspiration for how to set up an inheritance.
Gates, who is 57, founded Microsoft around the mid-1970s after he decided to drop out of Harvard. He reportedly talked the decision over with his parents, who were supportive of his desire to start a company.
This isn't the first time Gates has been named the world's richest man, or the second, according to Forbes. Pegging his worth around $40 billion, the magazine named Gates the world's richest man in 2009. Prior to that, he topped Forbes' list every year from 1995 to 2007.
Is the costly--and long--patent approval process worth it? Small businesses don't seem to think so.
Just two months after several provisions of the America Invents Act (AIA) went into effect, the House Committee on Small Business met to evaluate how it's been doing.
As fewer small businesses seek patents for services, it's beginning to look like the act might have offered too little, too late.
Some explanations for this trend include the backlog of applications awaiting approval, the cost of securing a patent before and after approval, and the increasing number of patent trolls and ensuing legal battles. To wit, the percentage of small business-secured patents has dropped from 30 percent in 2000 to 20 percent in 2013.
The news is troubling, said committee chairman Representative Sam Graves. "In the patent arena, small firms play a critical role in developing innovation, producing 16 more patents per employee than big businesses. Moreover, obtaining a patent is equally critical for small businesses and their ability to attract startup capital, and grow their business."
Patents also give small businesses a "powerful foothold" when they "may not yet be able to fully realize the market potential of their product or service," said Dennis Crouch, a law professor at the University of Missouri.
However, those patents come at a price.
It can take more than three years for a patent application to work its way through the system, and while businesses can bypass it with a $4,000 fee, small businesses must pony up $2,000--not exactly small change when you're just starting out.
The other problem is, patents expire, which means paying more fees to keep them up-to-date. Renewal fees tend to be relatively inexpensive, but many small business are ditching them anyway.
The past decade has also seen a rise in patent licensing companies, also known as patent trolls, which exist for the sole purpose of gathering patents and licensing them. While they've revitalized the marketplace and provided an incentive to actually make patented products, they've also led to an increase in patent infringement lawsuits.
Because they're so expensive, "many cases settle in an unsatisfying way with the accused infringer paying a settlement fee simply in order to avoid the high cost of fully defending the lawsuit," Crouch said.
What do you think--should small businesses still secure patents?
What you do matters more than what's on a piece of paper, says the marketing guru.inc_clean_text
If you want to reward your people, time off will work better than more money. But you can't stop there.
Money can't buy love or, apparently, better job performance.
A WashingtonPost.com article reported yesterday on a growing body of research about the efficacy of financial rewards. The authors--Elizabeth Dunn, a professor at the University of British Columbia, and Michael Norton, a professor at Harvard Business School--described the kinds of behavioral finance experiments that have become de rigueur in management writing. In the predictably counter-intuitive results, kids paid to improve their grades exhibited decreased motivation. People paid more to do well in an electronic memory game performed worse than those who were paid less.
Given the wan allure of money, the authors suggested rewarding workers instead with the gift of time--chiefly in the form of flex-time and sabbaticals. They cited an experiment at Boston Consulting Group in which consultants who gave up work-related emails and phone calls one night a week reported improved satisfaction with their jobs.
I agree that motivating employees with time rather than money is a sensible idea--but with one caveat. You can lavish all the sabbaticals and vacations and half days on people that you want. But if you don't reduce their workloads commensurately you're not doing them any favors. Rewarding someone with a long weekend means nothing when they still have six deliverables on Tuesday. The boss must redistribute the work, pick up some herself, extend the favored employee's deadlines, or just accept that something won't get done, and that the company must soldier on without it.
If the person taking time off is in a leadership position, I'd recommend the redistribution option. Small companies have a tough time developing leaders because they don't have a lot of stretch positions. The marketing manager's six-week cycling tour of Europe is the perfect opportunity for one or more underlings to take an extended turn in her shoes.
So by all means, give the gift of time. Just be sure it's genuinely time off.
Satisfied customers are a sincere--and inexpensive--way to promote your business. Here's how to turn them into your brand's biggest fans.inc_clean_text
Serial entrepreneur and author Steve Blank gave the commencement speech at the University of Minnesota. His advice is relevant for anyone starting up.
Editor's note: This speech was given at the University of Minnesota and then appeared on steveblank.com.
I am honored to be with you as we gather to celebrate your graduation.
This school has a distinguished roster of graduates... Earl Bakken, the founder of Medtronic, was an Electrical Engineering grad; and Bob Gore of Gortex and your current president are both alums of your Chemical Engineering program.
In fact, I feel very connected to another one your grads. I’m sure you’ve heard of Seymour Cray; he built a supercomputer company in Chippewa Falls that made the fastest computers in the world. These were very expensive supercomputers. They cost tens of millions of dollars and filled two tractor-trailers worth of space.
Back in Silicon Valley, I co-founded a company that built desktop workstations powerful enough to compete against Cray. We bid against them in a sale to the Pittsburgh Supercomputer Center... and lost. I never forgot that loss because instead of buying hundreds of our small computers they spent $35 million on that Cray. My startup never recovered and soon after went out of business.
Fast-forward 15 years. Now retired, I noticed that the Pittsburg Supercomputer Center had put their Cray for sale on Ebay. Yep--the $35 million machine was now for sale for $35,000 dollars.
I bought that Cray... honest... you can Google “Cray on eBay” and there I am. I had it shipped to my ranch and kept it in the barn next to the cows and manure.
It was closure.
But the story about Cray is also a story about success and failure. If I can keep you awake, I’m going to tell you why--while you may have thought today was the end of your education--it’s really only the beginning. And while you might be moaning about that thought, pay attention because what I’m about to share could make a few of you very, very successful.
First day of your life
For most of you, college was the first day of your own life. The morning you stepped onto campus you were no longer just a child of your parents. College was the first place you could taste the freedom of making your own decisions--and in some of those mornings-after--learn the price of indulgence and the value of moderation.
Here at school you had your first years of taking responsibility for yourself. While it may not be obvious to you yet, your college years were a transition from having your parents make decisions for you to making decisions for yourself. But now you face a new chapter that--if you’re not careful--could result in having companies make decisions for you.
It might turn out that graduating from college and getting a job may be just an illusion of independence. If you’re not careful you’ll simply end up having others tell you what to work on, how to spend your time, when to show up and when to go home. In fact, working in a company could be the adult version of listening to your parents tell you what to do... only the pay is usually a whole lot better than your allowance.
For some of you, that may be exactly what you are looking for. Many of you are going to take what you learned here, get a good job, get married, buy a house, have a family, be a great parent, serve your community and country, hang with friends and live a good life. And that’s great. Minnesota is a wonderful place to hunt, fish, canoe, raise kids, and pursue lots of interests other than just your job.
All of you will ultimately make a choice... a choice about whether you “work to live” or you “live to work.” This should be a conscious choice. Don’t get trapped into the daily routine of showing up and just getting by.
While you’re excited about your first “real” job, recognize that your interests and those of your employer are probably not the same. Having your employer tell you what a great job you’re doing and rewarding you for it is not the same as discovering your passion, and figuring out who you are, and what’s rewarding for you.
What I am saying is, “Don’t let a career just happen to you.” And as much you love, respect and honor your parents, don’t live their lives. Your obligations to meet their expectations ended the day you became an adult.
At the end of the day, you can decide whether you want to be an employee with a great attendance record, getting promoted to ever better titles and working on interesting projects--or whether you want to attempt to do something spectacular--this be or do should be a question you never stop asking yourself--for the next 20 years, and beyond. Be? or Do?
Let me share with you the day I faced the Be or Do question.
Big Company versus Startup
Out of the military, my first job in Silicon Valley was with one of the most exciting companies you never heard of. By the time I joined it was a decade old, and no longer a startup. Our customers were the CIA, NSA, and National Reconnaissance Office. Our CEO, Bill Perry eventually became the Secretary of Defense.
In the 1970's and '80's the U.S. military realized that our advantage over the Soviet Union was in silicon, software and systems. These technologies allowed the U.S. to build weapons previously thought impossible or impractical. The technology was amazing, and somehow in my 20’s I found myself in the middle of all of it.
Building these systems required resources way beyond the scope of a single company. A complete system had spacecraft and rockets and the resources of ten's of thousands of people from multiple companies.
If you love technology, these projects are hard to walk away from. It was geek heaven.
While I worked on these incredibly interesting intelligence systems, my friends in startups worked on new things called microprocessors. They’d run around saying, “Hey look, I can program this chip to make this speaker go beep.” I’d roll my eyes, comparing the toy-like microprocessors to what I was working on--which was so advanced you would have thought we acquired it from aliens.
But before long I realized that at my company, I was just a cog in a very big wheel. A small team had already figured out how to solve the problem and ten’s of thousands of us worked to build the solution. Given where I was in the hierarchy, I calculated that the odds of me being in on those decisions didn’t look so hot.
In contrast, my friends at startups were living in their garages fueled with an energy and passion to use their talents to pursue their own ideas, however unexpected or crazy they sounded. “Really, you’re building a computer I can have in my house?”
For me, the light bulb went off when I realized that punching a time clock is not the way to change the world. I chose the path of entrepreneurship and never looked back.
Engineers Run the World
Engineers used to be the people who made other peoples ideas work. Today, they change the world. We live in a time where scientists and engineers are synonymous with continuous innovation. We don’t think twice as our phones shrink, our computers fit in our pockets, our cars run on batteries, and our lives are extended as new medical devices are implanted in our bodies. Scientists and engineers no longer work anonymously in backrooms. Today we celebrate them for improving the quality of peoples’ lives.
George Bernard Shaw once said, “Some men see things as they are and ask why. Others dream things that never were and ask why not.” Engineers like you have the capacity to move the world forward by continually asking “why not?” It’s your special “doing” gene that empowers us to do better.
You invent. You imagine. You see things that others don’t. Where others see blank canvases, you’ll see finished paintings. You hear the music that’s not written, you see the bridges that have yet to be built. You envision the products and companies that don’t exist yet.
Only In America
University of Minnesota Science and Engineering alumni have founded more than 4,000 active companies, employing over ½ million people and generating annual revenues of $90 billion. These alums chose not to take the safe road but instead to push beyond their boundaries and DO.
At some time you might decide that you want to become the master of your own destiny--that you want to take an idea--and start your own company. And all of you sitting here just earned a degree that gives you choices that very few other professions have.
Entrepreneurship is not something foreign--it’s built into the DNA of this country. America was built by those who left the old behind. Not too many generations ago your family packed up what they had, got on boat and came to America. They struck out across the country and ended up here in Minnesota.
And what’s great about the United States... No other country embraces innovation and entrepreneurship quite like we do. You don’t have to stay in one job, and it’s really, really hard to starve to death.
I predict that 78 percent of all commencement speeches this year will have advice about “pursuing your passion and doing stuff you love.” But they don’t tell you why. Well here’s the secret--if you’re going to spend your career in a company, doing stuff you enjoy will help you keep showing up.
But if you want to do something, something entrepreneurial, just loving what you do is isn’t enough. You’re pursuing ideas you can’t get out of your head. Ideas that you obsess about. That you work on in your spare time.
Because that fearless vision and relentless passion are what it takes to sustain an entrepreneur through the inevitable bad times--the times your co-founder quits, or when no one buys, or the product doesn’t work. The time when everyone you know thinks that what your doing is wrong and a waste of time. The time when people tell you that you ought to get a “real” job.
By the way, every year I remind my students that great grades and successful entrepreneurs have at best a zero correlation--and anecdotal evidence suggests that the correlation may actually be negative. There’s a big difference between being an employee at a great company and having the guts to start one.
You don’t get grades for resiliency, curiosity, agility, resourcefulness, pattern recognition and tenacity.
You just get successful.
The downside of starting something new is that’s it’s tough, because unlike the movies--you fail a lot. For every Facebook and Google, thousands never make it.
Like Rocket Science Games, which was my biggest failure. 90 days after showing up on the cover of Wired Magazine I knew the game company where I raised 35 million dollars was headed for disaster.
We’d believed our own press, inhaled our own fumes and built lousy games. Customers voted with their wallets and didn’t buy our products. The company went out of business. Given the press we had garnered, it was a very public failure.
We let our customers, our investors, and our employees down. I thought my career and my life were over. But I learned that in Silicon Valley, honest failure is a badge of experience.
All of you will fail at some time in your career... or in love, or in life.
No one ever sets out to fail.
But being afraid to fail means you’ll be afraid to try. Playing it safe will get you nowhere.
As it turned out, rather than run me out of town, the two venture capital firms that had lost $12 million in my failed startup actually asked me to work with them again.
During the next couple years... and much humbler... I raised more money and started another company that we were ultimately able to take public, and those patient investors more than made up for their earlier loss--many times over.
As scientists and engineers, you know about failure. You know that virtually no experiment works the first time. And in a new company all you have is a series of untested hypotheses. You learned something vital in school--to test your hypotheses by designing experiments, getting accurate data, analyzing the results, and then modifying your initial hypotheses based on those results. This is the scientific method, and surprisingly we found the exact same method works for startups.
Because failure is a part of the startup process. In Silicon Valley, we have a special word for a failed entrepreneur--it’s called experienced. Our country and our entrepreneurial culture is one of second and third chances. It’s what makes us great. You don’t have to change your name or leave town. Entrepreneurs in America know that they get multiple shots at the goal.
Be or Do
Someday several of you in this graduating class will be worth a $100 million dollars. And a few of you might change the way the world works.
I want you to look around you. Go ahead. Take a few seconds and give it a look...
While most of you were looking around wondering who this was going to be, I hope a few of you were feeling sorry for the rest of your classmates, knowing that the most successful person in the audience is going to be you.
These days I write a blog about entrepreneurship. At the end of each post, I conclude with “lessons learned"--a kind of Cliff Notes of my key takeaways. So that’s how I’ll finish up today.
Here are the two lessons that I’d like to pass on to you.
Your science or engineering degree gives you tremendous choices--you, and no one else gets to decide two things:
whether you choose to be or you choose to do
whether you “work to live” or whether you “live to work”
Remember… live your life with no regrets. There’s no undo button.
And congratulations--you’ve earned it!
Thank you very much.
Failure to comply with a clause in its contracts left many small business owners out in the cold, say lawmakers.
An investigation by House lawmakers revealed the U.S. General Services Administration has failed to pay thousands of federal contractors since 2008. The majority of these contractors were small businesses, though 1,334 firms were affected and all companies were collectively shorted more than $3 million, according to details obtained by The Washington Post.
The problem stemmed from a failure to comply with the "guaranteed minimum payment" clause outlined in many of its contracts, said The Post. The GSA offers an online catalog of government services known as the Multiple Awards Schedules (MAS) Program from which other agencies can purchase goods and services, such as paper and construction, often at a discount.
To participate in the program, small businesses must go through "a rigorous and often costly" vetting process, said The Post. They also must keep up their sales and meet a $25,000 combined sales threshold in the first two years. If not, they're owed $2,500 upon being ousted, which is supposed to be paid automatically. Apparently, that wasn't happening.
The Republican-led House Small Business Committee discovered this last year, as Committee Chairman Sam Graves (R-Mo.) was reviewing proposed changes to the structure of the MAS program. Graves noticed the GSA couldn't account for minimum payments issued to those companies because they hadn't been paid. A year later, he received a letter confirming "the problem" from GSA Federal Acquisition Services Commissioner Thomas Sharpe. In all, the agency owes $3,108,888.
“GSA’s case for canceling these contracts in terms of dollars saved did not account for paying some of these firms the $2,500 they would be owed under their contracts,” Graves said on Thursday. “When the committee began questioning why the $2,500 was not included in the calculations, it became clear that GSA was not adhering to its own contracts and had not paid the required termination costs to small businesses for at least five years.”
Fortunately, the small business contractors will be paid the money owed to them in coming months.
It's not about politics. It's about a fundamental breach of trust.
Of the many scandals swirling around Washington right now, one in particular should scare you most as an entrepreneur.
It's the news that the Internal Revenue Service applied blatantly political filters to its review of nonprofit organizations, and targeted conservative groups. Notwithstanding my colleague Gene Marks's recent take on this, I think this a very big deal--and a fundamental breach of the public trust.
I know a bit about the IRS from personal experience. A dozen years ago I left my job as a Washington lawyer to follow a dream. I packed everything I owned in a used Kia Sportage and headed to Hollywood to be a screenwriter. I needed a "day job" while I attended UCLA's extension school and wrote scripts, so I put my law degree to work at the IRS Office of Chief Counsel, starting at the federal building in downtown Los Angeles.
There were some good people among my colleagues there, and I'm still friends with a few of them. However, the overall bureaucratic atmosphere and culture of micromanagement I encountered at the IRS was stifling, even degrading to my way of thinking. It was a horrible professional fit.
In the end, I left both the IRS and Hollywood, served in the U.S. Army JAG Corps, and then launched a different writing career. The life lessons I learned could easily fill another column, but for now I want to focus on one of my takeaways from working at the IRS.
It's this: Society needs bureaucracy.
Let me explain. Think about how much you enjoy dealing with big government bureaucracies--the Department of Motor Vehicles, the different regulatory agencies that affect your business, or of course, the IRS. Now, imagine who it is that actively seeks to work there.
Some of these workers are truly decent people, of course, but a career government bureaucrat is almost the professional polar opposite of an entrepreneur. He or she likely values stability and security and excels at performing routine processes over and over again. Some of the processes might be very complex, but by their nature they are supposed to become routine.
In other words, career government bureaucrats give up the chance at a unique, extraordinary professional career in exchange for something predictable. They buy into a system in which seniority and longevity are at least as important to personnel decisions as proficiency (to say nothing of dynamic new ideas).
Some may love the work, although many of my government colleagues were there mainly to gain experience before going into the private sector. Others appreciated the jobs because they wanted to focus on their families, or their hobbies. (Granted, a few others were career dead-enders of the worst stereotype--bitter, boring drones who put in their 37-1/2 hours a week, complained endlessly, and spent more time on office politics than work.)
Regardless, the rest of us, in exchange for giving these people almost limitless job security and generous pensions, are supposed to get something very specific in return. We're supposed to get predictable, even-handed enforcement of society's rules. The entrepreneurs among us count on that even-handedness in order to be able to make good decisions.
In other words, the line at the DMV might be long, but it's supposed to be equally long for everybody. The forms you have to fill out to comply with government regulations might be a pain in the neck, but they're supposed to be the same even-handed, predictable pain in the neck for you and for your competitors.
And, the process of getting through an IRS examination might be slightly less pleasant than root canal without anesthesia, but it's supposed to be even-handedly, predictably unpleasant for everyone, regardless of their background or political persuasion.
I was never naive enough to think that government processes were totally absent personal feelings, but the idea that IRS workers introduced systemic political bias into their work is abhorrent. I'm honestly not sure whether it's more damaging if the direction to do so came from on high or was the result of the personal biases of a few lower-level bureaucrats.
Regardless, it's a blatant violation of trust, and the episode reminds us that if itxc2xa0can happen at the IRS, it can happen at any government bureaucracy. I hope the other government workers investigating this whole thing keep that in mind as they work.
Then, I hope they figure out exactly who's responsible--and, even handedly and predictably--throw the book at them.
Spoiling your dog has never been so easy. These small companies are making the best of America's love for dogs.
There are 80 million pet dogs in America. And, boy, do their owners love them. At a time when the start-up world is brimming with scaleable ideas, these entrepreneurs are taking products, services, and technologies with proven track-records--and turning their focus away from you the human, and toward your furry friend. Here are five start-ups that took these ideas and are currently trying to make them bark.
What size is Fido? "Small and cute," "just right," or "big and bold?" For $19 a month, this start-up delivers a box of size-appropriate treats and toys to your door. Barkbox, which raised $5 million more in funds from investors such as Lerer Ventures and Polaris Ventures, and plans to rename itself to Bark & Co., donates at least 10 percent of its profits to shelters, rescues, and animal welfare organizations.
This start-up takes dog walking to a whole new level, tracking Spot's every step and, yes, poop. With the help of a handy GPS enable Swifto app, dog walkers update their charges' profiles with information regarding the walk's route, pooping, and social habits. Swifto operates in Manhattan, Brooklyn, and Queens and the app is now operational on all smartphones, including Android devices and iPhones.
This little company makes scannable ID tags that use QR codes. So, if Brutus skidaddles, whoever finds him can use the code to pull up his online profile--and get in touch with his owner. The company's Beta program launched in September, 2010. Two and a half year later, PetHub has launched Netherlands, Germany, and France.
Dog Vacay allows vetted and insured dog lovers to open up their homes and offer to take care of pets, while their owners are out of town. Dog Vacay, which launched in October of 2001, offers rates that start at $15 a night and include 24/7 customer support and daily photo updates.
This crowdfunded start-up makes an app and a pet-feeder, which, combined, allow users them to feed their furry companion when they're far away. Pintofeed works with iOS, iPhone, Android and Windows 8 devices and can automatically create a schedule to dispense food and will monitor pet's intake. The company is currently taking "reservations" for the $149 devices, which have yet to make it fully to market.
What's the deal with Bitcoin? Inc. talked to Charlie Schrem--Bitcoin millionaire and "evangelist"--for the low down.
It's been described as both "an online form of money laundering" and a brilliant "anarchist's brainchild." The developer who goes by the pseudonym Satoshi Nakamoto called Bitcoin simply a peer-to-peer electronic cash system back in 2008.
However you think of it, one thing is clear: Bitcoin is one of the buzziest things going on in tech and finance right now.
So it should come as no surprise that entrepreneurs and investors are gathering Friday for a conference on all things Bitcoin-related, called "The Future of Payment." Charlie Schrem is the co-founder of the payment processor BitInstant, one of the first Bitcoin millionaires, and vice chairman of the Bitcoin Foundation, which is behind the conference.
Inc. talked to Schrem about the controversial currency--and the frenzy it has caused.
Lots of people think Bitcoin is a bubble. What would you say to them?
If you look at the laws of economics, Bitcoin is really following that. People say Bitcoin is a bubble. I respond: well, which one? There were already three, and we've recovered from them already. The real answer is they're not bubbles; they're speculated bubbles that turn into market corrections. For example, you see the price growing steadily, steadily, slowly--then it shoots up over a two week period. Then early adopters who have so much say, "Hey. I think I'm going to cash out now." People start selling and the market corrects itself to its true value.
Currency. Security. Commodity. Bitcoin has been described as all three. How should it be regulated--if at all?
Bitcoin is two things. There's a capital "B" and a lowercase "b." If someone is talking about Bitcoin, they are either talking about one or the other--not really both. Bitcoin is, on the one side, the world's largest decentralized global payment infrastructure. The ability to send data or money or a unit of value from one person to another regardless of where they are, that can't be stopped or controlled any government, is a feat. It's something that has never existed anywhere in the world.
At the same time, on the other side, bitcoin is also that unit of value that is being transfered. If you look at the human body, you have blood that carries nutrients and oxygen all over the body--and they're carried all throughout the body through the veins. You look at money as the blood and you look at companies like PayPal, MoneyGram, or banks as the veins that connect the blood throughout the whole body, right? Bitcoin is both. It's both blood and vein.
Bitcoin transactions are anonymous, which as been cited as both a strength and a weakness of the currency. Where do you weigh in?
It's not anonymous. That's actually a big common misconception. It's psuedo-anonymous. Private is a better word to use. Every Bitcoin transaction is traceable. You have a public ledger that anyone can view about every Bitcoin transaction that's ever happened. And that's it. As long as the companies that act as intermediaries between the old world--like dollars--and the new world--like Bitcoin--know their customers, it's very, very difficult to have money launderers or terrorists or people like that use Bitcoin because they'll have to give their identity.
What about the early adopters who actually mined for Bitcoins? Are there records for them?
Absolutely. It's a little bit harder to know who the miners are, but let's say the miners want to cash back out into dollars--they're going to need to prove their identity.
So... do you know who Satoshi Nakamoto is?
No, no I don't. I wish.
What about cyber security issues? Are you worried about Bitcoin being hacked?
Bitcoin has never been hacked and Bitcoin can never be hacked. What can be hacked is the various websites or exchanges that hold Bitcoin. Bitcoin itself has never been hacked just like email has never been hacked--but your Gmail account could get hacked. Bitcoin is an open-sourced protocol. It's a way of sending units of value over the Internet. The code is open sourced. Anyone can read it, see it, and update it. So at this moment you have all of the world's best hackers trying to break Bitcoin. And they can't.
It seems like you practically need a PhD in computer science to understand how Bitcoin works. For it to become more mainstream--say for businesses to adopt it--won't it need to be more accessible?
There's a learning curve, just like there is with anything. It takes time to learn how to do something and it's going to be difficult. Back in the day, my mother didn't understand Bitcoin. She thought it was for techs and geeks and nerds. Now, she understands it pretty well. It's like email. You don't need to understand how email works to use email.
The Winklevoss twins are giving the keynote at the conference this weekend. Why them?
Cameron and Tyler are really interesting people. These guys know everyone--from politicians to bankers to the guys like you and me. They also have a ton of experience building infrastructure and building companies. And that's what Bitcoin needs--it needs better infrastructure, better companies, and more people involved. So aside from them being high profile, I think they can teach a lot of people in the crowd how to take Bitcoin to the next level.
As a leader, you need to articulate your clear-cut implementation plan. The second in a seven-part series on the power of communication.inc_clean_text
Make sure you see your workplace through your staff's eyes.
Most business owners like to think the culture they have created feels like a family. While that means different things to everyone, having everyone feel a personal connection to the company, take pride in what they do, and help each other succeed is the foundation.
Sure, creating a family atmosphere starts at the top, but you have to look under the surface to see if it comes to life. How can you tell? Your people being champions of the company culture, proactively coming up with ideas to make it a better place to work and choosing to hang out together on the weekends are all signs that there is a tighter connection than a day’s work and a paycheck.
Maybe most important: Never forget that your company is their company, too. If you don’t think of it as their company--well then you should just give up on the idea of having a family-oriented company culture in the first place.
There are a few simple things that I have found go a long way toward creating an environment that is both positive and professional:
Be real. All too often business leaders feel they need to project an image to those who work for them that doesn’t necessarily reflect who they really are and actually masks their true personality. It’s ok to let your people beyond the veneer of leadership. I am proud to make a fool of myself in small ways every day and feel that the ability to laugh at myself makes me far more approachable. My teams may think I am a little strange at times, but I think they know that I am the person they see every day.
Be empathetic. Remember what it was like when you were the person sitting at that cubicle wondering how you were going to get through those days filled with ungrateful customers, unreasonable expectations and a limited understanding of how to do what’s being asked of you? That’s how your teams feel most days. They aren’t looking for you to tell them how to solve their problems--ok sometimes they are--but mostly they want to believe you can relate to their world and can help THEM solve things. Think through problems with them, ask questions rather than always supplying answers and remember: Remember the worst boss you ever had. Then think about the best. What were the major differences in how they communicated?
Be humble. Nothing’s wrong with a healthy ego. It is almost impossible to lead a large group of people without the ability to stand in front of them and make them feel you know what you are doing at the times when you are not even sure you do. But there is a huge line between ego-confidence and ego-arrogance. You’re the boss, they already get that and don’t need to be reminded of how awesome you are. I believe that I am at my absolute best when everyone around me succeeds and my role is that of coach and advisor. You should be happier to get a note from a client about how great someone on your team performed that a direct thanks for something you did.
Be direct. Most people know when they’re struggling. Often they are trying desperately to figure out how to turn things around but are terrified to speak up beause they don’t know if you know how much they’re struggling. Meanwhile, it is likely that your own frustration is resulting in harsh heat-of-the-moment criticism rather than constructive advice. Wait until things calm down a bit and ask the person to meet over a cup of coffee. Tell them you know they are struggling, and that you are invested in their success. Talk to them about what’s not working and be specific about things they can do to improve, then help coach them on those items rather than getting angry. In most cases you’ll find the person turns it around. Those who can’t or won’t often take this as a signal that they should find another job. Either way things get better for you, them and all of the people around who were just as frustrated with the situation but simply worked around the person the whole time.
Be transparent. The people who work for you have made a decision to place part of their lives in your hands and don’t like to live in a black hole. It has amazed me at times that as tight knit as we are often people in the office don’t know what is going on across the business. We’ve had major pitches going on and half the office doesn’t even know we are pitching. The answer: communicate, communicate and communicate some more. It’s your job to make sure people know what’s happening--that means the good, the bad and the ugly. What you tell them will NEVER be worse than what they will be talking about behind your back if you say nothing.
Sure, perks are great--and my company offers plenty of them. But true happiness in the workplace starts with passion.
This week marks the 12th anniversary of my entertainment marketing and interactive advertising agency, Situation Interactive. I founded the company, which has offices in New York City and Los Angeles, based on my personal passion and curiosity for the intersection of technology and live experiences: the sporting event that makes us cheer, the Broadway show that makes us sing, or the vacation that leaves you in awe. As a consumer, I believe having such experiences--and sharing them with others--makes me a better, happier person. Therefore, as a business owner that helps market these experiences, I believe wholeheartedly in what I do every day.
My company has been fortunate enough to be named a best place to work by Crain's New York Business three years in a row. We work hard to provide great perks, including free tickets to cultural and sporting events, free breakfast, and an outdoor roof deck. But what I'd like to believe makes it a truly great place to work is the fact that each of my 60 employees shares my belief in the value of the live experience and my passion for what we do. Over the years, I've identified four key traits common to happy employees. Now, I keep them in mind when I'm recruiting new hires to ensure they'll be a good fit.
They believe in the greater purpose of our company.
There's nothing more powerful in a career than realizing what you do has a greater purpose beyond financial gain-;for me, it’s the fact that I believe my company makes the world a better place. Whether it’s the company’s greater purpose or the impact of each person's work day-to-day, all that matters is that our employees believe in it.
They have a personal passion for their role at the company.
For me, it's not a question of whether an employee will dread going to work each day, but if they will love going to work each day. Without a personal passion for their job, employees will have a hard time growing within the company.
Their values align with company values.
Every company has a core set of values expressed either through words or action. While it wasn't until this past year that we (literally) published on our walls our founding principle that "We believe the world is a better place when people are doing rather than having," this spirit has been central to what makes us tick since the very beginning. We continually reinforce this core principle by taking part in rewarding experiences together as a team.
Their family members (or other loved ones) are proud of what they do.
People want to be proud of what they do. One of the best ways to illustrate that is to have the acknowledgment and respect of those that love them the most. Happy employees are excited to share their work life with loved ones. They speak proudly of what they do to their mother, son, daughter, and friends. If their loved ones are proud of them, it's icing on the cake.