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3 Simple Ways to Make Your Company Mission Matter May 22nd 2013, 16:10
Looking to make your mission more than a tagline? Here’s how to start.

Mission-based businesses are a different breed. You can’t expect your mission to matter if your company doesn’t put it front and center.

Here, Luis von Ahn, the co-founder of Captcha and most recently, Duolingo, identifies three things mission-based companies need to thrive.

1. Get the culture right. It’s not enough for employees to be talented. They need to have strong moral compasses and be true believers in what they are doing.

2. Constantly restate the endgame. At Duolingo, von Ahn never tires of reminding staff members that they have the potential to help millions of people. Success at the company is seldom if ever defined in monetary terms.

3. Put mission before money. In most cases, entrepreneurs focus on making money first, then perhaps doing some good in the world. With mission-based companies, von Ahn says, it’s the opposite: Get the mission right, and the money will come.

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Manufacturing Can Help Save the Economy, If We Fix These 6 Gaps May 22nd 2013, 15:35
Yes, manufacturing can be an engine of growth again. But it will only happen if we address these critical issues.

It seems hard to believe with people still struggling to find work, but there are 600,000 jobs in U.S. manufacturing that aren’t being filled because employers say they can’t find applicants with adequate skills, according to a recent survey.

At a recent event at the Aspen Institute in Washington, Deloitte’s Craig Giffi attributed that disconnect to several gaps in manufacturing. People in business, academia and all the way to the Oval Office believe that advanced manufacturing is poised to deliver substantial job growth if we can bridge some of these gaps:

The education gap. In a 2009 study of high school graduates around the world, the U.S. ranked 31 in math, 23 in science and 17 in reading. China, by the way, ranked first in all three. The modern factory, even a small or mid-sized one like mine, increasingly relies on sophisticated technology. We desperately need our schools to generate graduates who know how to read a blueprint, who can calculate tangents, diameters and radii so they can confirm the quality of the steel wire baskets we produce.

The gender gap. Women represent nearly half of the U.S. labor force, but only one-quarter of the durable goods manufacturing workforce. The Manufacturing Institute joined with Deloitte, the University of Phoenix, and the Society of Manufacturing Engineers on an initiative called STEP Ahead (that’s science, technology, engineering and production) to better promote opportunities for women in manufacturing.

The policy gap. Many people say that President Obama has shined a spotlight on manufacturing more than any president in recent memory, including highlighting it in his State of the Union addresses. But important and vexing issues like tax and regulatory reform that could propel the sector remain mired in the halls of Washington.

The training gap. We dedicate five percent of our annual salary budget on training so that our employees are coming up with the freshest ideas they can. We are going to leverage more out of a six-figure investment in a piece of high-end equipment if we have six knowledgeable people devising the best ways to employ it rather than one person. A manufacturer that can only offer what everyone else offers is not sustainable.

The perception gap. Many people, unfortunately, associate manufacturing jobs with the four D’s: dirty, dangerous, dumb and disappearing. In recent surveys, 18-to-24 year-olds ranked manufacturing last among where they would choose to start a career. It’s an outdated view, darkened by the downsizings and outsourcing of the past two decades. Driven by trends like lean manufacturing and automation, these jobs are much safer, cleaner and more creative than their reputation. We’re proud, for example, that we’ve gone more than 1,610 days straight without a safety incident.

The growth gap. Manufacturing has added 500,000 jobs since the end of 2009, but more than two million manufacturing jobs were lost in the last recession and output remains well below the 2007 peak, indicating how serious the recent manufacturing recession really was. To compete on a global stage, U.S. manufacturing needs policies that enable companies to thrive and create jobs.

People talk about a seventh gap, but it’s a myth: the wage gap. In 2011, the average U.S. manufacturing worker earned $77,060 annually, including pay and benefits. That’s 22 percent more than the rest of the workforce. And if the factory is an exporter, the average wage zooms to $95,000, double what the average American earns.

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These 5 Start-ups Will Change the Way You Pay for Everything May 22nd 2013, 15:20
Cash registers and IOUs are going the way of the dodo, taking with them that old ka-ching sound. From Square Cash to Google Wallet, here’s how tech is changing cash payments.

Digital wallets have long been in the news, but the hottest trend is peer-to-peer payments and apps that help small business owners ditch their cash register. Visionary start-ups like Square will introduce new payment services this year, while Google plans to get in on the trend by bringing its Wallet to Gmail users. “Our mission is to make commerce easy around the world,” Square founder Jack Dorsey told Inc. magazine. These five cash disruptors are doing just that.

Square continues its quest for world domination with Square Cash, a peer-to-peer service that lets friends e-mail money. “We get to design what we want to see in the world rather than doing what other people think should be done,” Dorsey told Inc. magazine. His guiding philosophy has paid off: The technology is so intuitive more than three million merchants use Square’s Card Reader to process $12 billion a year in transactions. That stat alone should sell users on the invite-only service.

Square isn’t the only company innovating cash payments with e-mail. Soon Gmail users will be able to do the same thing. Even if your family and friends don’t use Gmail, you can still send them money so long as the search giant has access to your bank account. The service will be free, however, Google says “low fees” will apply for payments sent through credit or debit cards.

In Venmo’s world, owing money is just like sharing a memory. The mobile app lets users tag IOUs with personal notes. Venmo also makes payments convenient, and with the launch of Venmo Touch this year, it’s about to get even easier. With help from Braintree, a payment structure service, the new iOS app–currently in private beta with several merchants–lets users save credit card information across various apps on their phone.

PayPal has long urged shoppers to “lose their wallets,” but now the company is urging small businesses to ditch their cash registers too. Starting next month, PayPal will launch an initiaitve called Cash for Registers offering free credit, debit card, check, and PayPal processing for the rest of the year to any qualifying U.S.-based business. All owners need to do is hand over their cash register to receive a card reader, iPad stand, cash drawer, and printer–plus access to of-the-moment PayPal-linked apps like PayPal Here and ShopKeep POS.

Groupon’s iPad app Breadcrumb was designed with the food industry in mind. Restaurants, bars, and clubs can use it. Waitresses can split, process, and transfer various checks, while business owners can tailor the service to fit individual needs. They can make maps of their tables, edit items and tally inventory, and help employees clock in and out. At $99 per month, the price is right and very disruptive.

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Letting Go: The Best (and Hardest) Thing You’ll Ever Do May 22nd 2013, 15:10
Few entrepreneurs like to delegate. But give it a try–you may be surprised at what you learn.

A few weeks ago, I did something that once would have been unimaginable: I handed over day-to-day control of 37signals’s most popular product, Basecamp. A different Jason, Jason Zimdars, is steering that ship now.

Understand, Basecamp is not just any product. It’s our signature offering. We launched it nine years ago, and it boasts tens of thousands of paying customers and millions of users across scores of industries around the world. It’s critical to our success–and because many customers use the software to run their businesses, it’s critical to their success, too.

For years, I felt I was the only one who could manage Basecamp. But I recently spent some time reflecting on my day-to-day responsibilities. Every day, I make dozens of decisions, some big, some small, about 37signals–about our culture, employees, customers, current products, future offerings, and more. As a result, very few things get my undivided attention anymore. And that’s become a problem.

To put it another way: For me to hold on to Basecamp is no longer in the best interests of the company. In fact, our continued growth depends on me becoming a different kind of leader–one who is able to see when other people can do a better job than I can.

It also occurred to me that the only reason I was running Basecamp was that I had always run Basecamp. And that’s no reason to do anything.

From the outside, this may seem obvious. But letting go is one of the hardest decisions a business owner ever makes. It’s especially challenging when you’ve been doing things your way for years.

Given all that, you might ask why I didn’t start with some baby steps and hand off something less important than Basecamp. I guess it’s because baby steps are baby steps. They’re not going to take you very far. It was time to take a big leap.

Basecamp is at the top of its game right now. Last year, we redesigned it from the ground up, and our customers have been delighted with the results.

But there’s a flip side to that success: the risk of complacency. When something is working well, it becomes too easy to let things run themselves. Fix a few things here, improve a few things there, launch a new feature every so often. That’s coasting. And I don’t want Basecamp to coast. I want someone thinking about Basecamp, and only Basecamp, 24 hours a day. And I finally came to understand that given all that is on my plate, that person no longer can be me.

I was lucky. Because if deciding to delegate was difficult, deciding whom to delegate to was a cinch. Jason Zimdars has been a designer here for years. And lately, he’s really stepped up, singlehandedly taking over projects without waiting to be asked. He’s proved, without being asked to prove, that he is capable of making smart decisions and producing on-time, quality work.

When I asked Jason how he felt about taking over Basecamp, he asked if he could take the weekend to think it over. On Monday morning, he came to me and said, “Hell, yeah!”

I’ll still be involved, of course. Everyone at 37signals contributes to what we do and how we do it.

But in the end, it’ll be Jason who will make the final call. As for me, I’ll finally have time to devote my attention to new ideas. There’s an important lesson here: By offering Jason a chance to develop his talents, I am also giving myself a chance to grow. And that’s the best kind of win-win.

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Build Trust and Authority in Google Search May 22nd 2013, 14:35
Here’s what you need to know about Google’s Hilltop algorithm and how to use it to your advantage.

The Hilltop algorithm is one of the oldest still used by Google, and it’s more relevant than ever. In the original white paper submitted by Google, the authors describe “…a novel ranking scheme for broad queries that places the most authoritative pages on the query topic at the top of the ranking.”

To offer an understanding of authority, the Hilltop algorithm uses “a special index of expert documents” as starting points for authority signals. These “expert documents” are simply Web pages that Google has deemed an authoritative Hilltop. When a Hilltop links to a website outside of this special club, that website earns trust and authority. This increased brand authority earns higher search engine rankings.

The key word to note here is “authority,” which has appeared frequently in recent discussions around upcoming changes to Google’s search algorithm. A recent video by Matt Cutts, head of Google’s Webspam team, forecasts some upcoming changes in Google search guidelines. In this video, he makes references to the idea of Hilltops:

“We’re doing a better job of detecting when someone is sort of an authority in a specific space. It could be medical, it could be travel and trying to make sure those rank a little more highly if you’re some sort of authority, or a site that according to the algorithms we think might be a little bit more appropriate for users.”

Considering the past and current positions taken by Google, it’s more important than ever for brands to earn links from topically relevant Hilltops to earn more visibility in search results. This will also scale link building efforts, since authoritative resources are naturally syndicated by a large number of news aggregators, social profiles and other Internet users. We call this “climbing the Hilltop.”

When brands climb Hilltops on a regular basis, they’ll naturally become a Hilltop themselves. This is the point that really scales organic search traffic, since organic search visibility will increase across the board once the brand earns the Hilltop status. Earning links from Hilltops across the web increases the trust and authority of your website, which boosts brand visibility in search.

Focus on authority when climbing industry Hilltops. No matter how many outbound links you build, nothing will perform as effectively or consistently as reliable, authoritative information that users can trust.

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5 Best Resources for Small Business Buyers May 22nd 2013, 14:17
Although buying a small business is a big step, it isn’t a step that you have to take alone. Here are several resources that can help you close on the business of your dreams.

Buying a business is exciting. When you enter the market to buy a business, you’re greeted by a stunning array of business opportunities, many of which have the potential to become a major turning point in your life and your entrepreneurial career.

But narrowing the list of prospective opportunities down to the business that is the perfect fit for your personal and career goals can be difficult. And once you do find the business that is right for you, seeing the deal through to completion can be even more daunting.

The good news is that you don’t have to navigate the process of buying a business alone. At BizBuySell.com, we believe there are at least five important tools and resources every buyer should consider when they enter the business-for-sale marketplace.

1. Business BrokersBrokers have a wealth of information about businesses that are for sale and often know about opportunities that haven’t yet been listed publicly. Additionally, good brokers have keen insights about the marketplace and can advise you on which businesses will be best aligned with your buying objectives and your budget. (Not to mention the fact that a broker can help you identify and prioritize your buying objectives and your financial options and, therefore, budget.)

A business broker can also play an important role as an intermediary and advocate in your dealings with sellers. When unexpected roadblocks bring the buying process to a grinding halt, as often happens, business brokers know how to overcome the obstacles and get a deal across the finish line.

2. Online ToolsResearch is critical when buying a business. Fortunately, there are plenty of online resources available for business buyers. From helpful articles to online business-for-sale listings, your laptop or tablet is a gateway to the tools and information you will need to locate and acquire your business.

Additionally, there are many online tools that can help you assess specific companies. For example, at BizBuySell we offer a Valuation Report that provides you with access to tens of thousands of currently listed and sold businesses (i.e., “comps”) to help you assess what your budget can buy and evaluate a seller’s asking price.

3. Appraisal ExpertsWhile online valuation tools are great starting points for valuation, a detailed valuation of the specific business is critical before entering the negotiation process. Generally, the seller will have already hired an appraiser to determine the value of the company. But savvy buyers know that business valuation isn’t as straightforward as sellers make it out to be, so they take the extra step of hiring their own appraisal expert.

Your broker may provide these services or he/she can help you find an appraiser with valuation experience in the industry and geographic area of the business you want to acquire. With the right appraiser, you will be better able to gauge the value of tangible and intangible assets, and strengthen your position during the negotiation stage.

4. Legal CounselAt some point in the process, you will need to engage the services of qualified legal counsel. Although it’s technically possible to acquire a business without the help of an attorney, it’s not advisable–there are simply too many legal details that can derail the deal and jeopardize your success post-sale. If you are working with a broker, he/she can help you find the best lawyer for your needs. (Tip: Brokers are a great direct resource, but they are also an excellent gateway to other trusted resources.)

During the buying process, your attorney will be responsible for drafting purchase agreements, contracts and other documents related to the acquisition. In many cases, the buyer’s relationship with the attorney continues after the deal has closed–with the attorney providing legal services throughout the business lifecycle.

5. Accountants and other Financial AdvisersAlthough many people associate accountants and financial advisers with sellers, it’s just as important for buyers to tap into competent financial expertise. At the beginning of the process, your accountant or financial adviser will help you determine how much you can afford to spend on an acquisition and can help you secure the capital you need to be a serious buyer.

During the later stages of the buying process, a skilled accountant can decipher the financial records of businesses you are considering, and help you decide whether sellers’ claims line up with historical balance sheets and earnings statements.

Outside resources bring data and objectivity to the process of buying a business. Although we would all like to think that we’re rational decision-makers, emotions cloud our judgment. By combining your own research with key online tools and the assistance of third parties, you can minimize risk and increase the likelihood that your career as a new business owner will start on solid ground.

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Do Yourself a Favor: Hire Nice People May 22nd 2013, 14:10
This entrepreneur says team dynamics can make or break your company. That’s why he hires the nice guy every time.

Luis von Ahn, the co-founder of Captcha, never cared much about culture. But that was then. He tells Inc.’s Jeremy Quittner that in his new venture–Pittsburgh-based language teacher Duolingo–his priorities are very different.

What is the single most important thing you’ve learned from your previous businesses?

Having a good co-founder really matters. I put a lot of weight on feelings and am weirdly in touch with them, which is not typical for an engineer. My current co-founder, Severin Hacker, is really logical.

I am in charge of product; he is in charge of technology. I do the specs of what needs to be done, and he figures out the best way technologically to do it. He also thinks bigger than me: If I want to have a $100 million company, Severin wants a $100 billion company.

What else are you doing differently this time around?

I’m spending a lot of effort on team dynamics. Our team at Duolingo is really cohesive, but this did not just happen. I made a concerted effort to hire people who are going to play nice.

In the past, I just looked at how competent people were, but it sometimes happens the most competent are the biggest assholes. I used to think this does not matter, but I realized this is really important.

Do you take a hands-on approach with the hiring now?

I do. Every person that comes through here, I talk to them for an hour. It is amazing how much comes out in an interview.

You sold your two previous companies. Is that your goal with Duolingo?

I just did what made sense at the time. And I would say that right now it does not make sense for us to sell to anybody. The product is pretty successful, and it is growing, and there’s nobody we see as a clear partner. I’ve made enough money. What’s important now is to have a positive impact on people.

Duolingo is backed by some brand-name investors, including Ashton Kutcher and Timothy Ferriss. What have you learned about dealing with the money guys?

This is the first time I’ve had VC backing, but I’ve learned a lot. Before, I didn’t know that on a Series A round of funding, you sell around 20 percent of the company. So if someone comes around and proposes 40 percent, you know that is not right.

The other one is boneheadedly simple: Competition among investors is good. If you are talking to one big VC and wind up talking to another, they will find out. How much that matters is insane.

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Should You Hire or Outsource HR? May 22nd 2013, 14:10
As your business grows, you face a slew of employee compliance and legal issues. So what’s the right time to bring HR on board?

Dear Evil HR Lady,

I run a small business with around 45 employees. I’m in the restaurant/retail/convenience store industry. We are looking to keep expanding the food end of our business with more restaurants. From what I have been reading my company is supposedly right in the sweet spot for outsourcing HR. I want to provide the best for my staff while remaining profitable enough to grow my business and have an edge on my competition. What are your thoughts on outsourcing HR?

–Planning ahead

You’re right to be thinking about adding HR to your staff. At 45 people you’re on the cusp of being subject to more regulations and you need help. Additionally, hiring, training, and managing people becomes more and more complex with more people (because you can no longer do it all yourself), and it just makes good sense to have someone who is an expert in that area on board to help you out.

But whether that role is in-house or outsourced really comes down to what you are looking for.

If you want someone to be your right-hand man, advising you, handling problems instantly, and participating as part of your planning team to help figure out the best way to develop the staff to handle a changing workload as the business grows, you probably want to hire someone directly.

If you’re more concerned about complying with regulations and laws (the more employees you have, the more concerned you need to be), while you still handle most of the employee issues directly, outsourcing is probably your best bet.

If you want someone who can multitask and take on HR as well as oversee other functions, then you want someone in house.

If you are comfortable with most problems being solved by a call center or email, then outsourcing is the way to go.

There isn’t a right or wrong answer, here. In fact, your best solution may lie somewhere in the middle. One thing I would strongly think about is doing a hybrid approach: hiring someone part time to be a business partner, helping you with planning, staff development, and hiring, and then work with an outsourcer for your benefits, employee handbooks, and legal compliance.

This is actually more doable than you might think. There are quite a few experienced, intelligent people out there who would love the opportunity to have a meaningful, challenging part time job. It gives you the advantage of having expertise on staff without breaking the bank. Additionally you gain the advantages of an outsourcer (such as the ability to quickly analyze exactly how a new regulation affects you).

But, in the end, it comes down to what your business needs and how you want to approach it. You do need HR on board at this point, if just to be the person responsible for making sure you’re complying with employment laws, and so it’s a great time to analyze the role you want for HR in the future and plan around that.

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When It’s Time to Fire Yourself May 22nd 2013, 14:08
Awe.sm founder Jonathan Strauss recalls the wrenching lead-up to his resignation.

The decision to hire outside management for your growing business is never easy. Investors and owners are flooded with questions: Is now the right time? How should founders behave? And most of all, How will I cope?

That’s the topic of an honest and thoughtful post by Jonathan Strauss, who founded awe.sm. After devoting blood, sweat, and tears to his startup for four years, investors told him there needed to be a change at the top, or else he’d be forced sell. It was a painful wake-up call that forced him to recalibrate his mindset:

“I put hiring a CEO in the same category as taking an acqui-hire or just closing up shop and moving on–things I would think about at 4am in the office on those darkest nights when I’d have a bout of sobriety about the insanity I’d turned my life into. And ultimately, things that represented the one unacceptable option motivating me to push even further beyond my limits I’d long surpassed: failure.

“In the early days, the only way for me to keep awe.sm from failing was to tie my fate with the company’s. If awe.sm failed, I failed. But as we switched from lean startup to growth company, I didn’t fully realize how making my ego a shareholder went from being necessary for survival to being a limitation on what we could achieve.”

Giving up control would be painful, but his emotions were much more complex.

“After three and a half years of fusing my self-worth with the success of the company in the crucible of startup survival, it was impossible to tear them apart without pain. But while my first reaction was disappointment and failure, it was almost immediately washed away by a wave of relief. I knew change was inevitable, but I had no idea how stressful and exhausting maintaining my internal reality distortion field had been until they gave me permission to turn it off.”

Strauss details the pros and cons of selling his company versus hiring a new CEO. He doesn’t shy away from admitting his mixed feelings–or the fears that kept him up at night.

If you’re facing a similar decision or just up for an unvarnished view on one of the toughest decisions a founder can make, the post is well worth a read.

Could you ever resign as CEO of your company?

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Mario Batali: Don’t Turn Your Back on Tradition May 22nd 2013, 14:00
Modernize all you want, but reinventing the wheel is pointless, says Mario Batali.

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Tony Hsieh Makes Strides With Vegas Downtown Project May 22nd 2013, 13:00
With 20 start-up investments and nearly 30 acres of land, Zappos CEO Tony Hsieh is slowly, but surely, fulfilling his promise to revitalize downtown Las Vegas.

When Inc. last checked in with the Downtown Project, Zappos CEO Tony Hsieh’s plan to revitalize Downtown Las Vegas, some Vegas natives were skeptical. At the time, local lawyer and restaurant critic John Curtas told Inc., “Some part of me doesn’t trust what he’s doing yet.” He added: “As much as I’m afraid Zappos is going to Disney-fy the area, it’s got nowhere to go but up.”

So 18 months later, has it?

These days, Curtas is singing a slightly more optimistic tune. “Things are pointing in the right direction,” he says of the project’s ability to breathe life into a chronically-depressed downtown Vegas. “I think it’s a couple years away from being there, but for the first time in 25 years, I have hope.”

What’s Happening in Downtown Vegas?

The grand vision for the Downtown Project began back in 2010, when Hsieh decided to relocate Zappos’s headquarters to the City Hall building in Downtown Las Vegas (from the burbs), a move that will be completed this fall. Along with the move, Hsieh committed $350 million of his own money to invest in his new neighborhood, devoting $200 million to investments in real estate, $50 million to small businesses, $50 million to education and culture, and the remaining $50 million to tech start-ups through the VegasTechFund.

In just the last year, Hsieh has made quick work of that money. According to the Las Vegas Sun, Downtown Project has dumped $93 million into the purchase of 28 acres of land across Clark County. In late March, Downtown Project inked a deal to purchase 100 Tesla Model S electric cars for Hsieh’s car and bike-sharing initiative Project 100. Meanwhile, several projects are still to come. This summer, the 150-seat performance space, the Inspire Theater, is set to open, followed by Downtown Container Park, an outdoor mall of sorts made of repurposed shipping containers, which will open this October.

“One of our goals is to have everything you need to live, work, and play within walking distance,” says Hsieh via email. “In an ideal world, we’d like to help people get rid of their cars.”

The Biggest Winners So Far

The primary beneficiaries of Hsieh’s investment have been the founders of VegasTechFund’s 20 portfolio companies, including start-ups like Wildfang, an e-commerce clothing company, and Skillshare, a platform for taking classes online. For many of these founders, including Maren Kate Donovan, CEO of Zirtual, Hsieh’s offer was too good to pass up. Having grown up in Las Vegas, Donovan always believed that in order to get her entrepreneurial career off the ground, she’d need to get out of Nevada. So, after graduating college, she moved to San Francisco to launch her start-up, which connects executives to virtual assistants all around the world, in 2011. “It seemed to me that San Francisco was like Los Angeles if you want to be an actress,” Donovan says.

Soon enough, however, she began to feel the strain of being a small fish in a big pond. Hiring talented engineers, she says, was prohibitively expensive in San Francisco, as was office space. So when Zach Ware, a Zirtual client and VegasTechFund partner, put Donovan in touch with Hsieh, it didn’t take much convincing to get her to relocate Zirtual’s headquarters to Vegas.

Since opening an office at The Ogden, a luxury condo building occupied largely by Zappos employees and VegasTechFund portfolio companies, Donovan says one of the biggest perks of being part of the Downtown Project is having unfettered access to Hsieh and his fleet of influential friends.

“I’m obsessed with logistics and operations, so Tony put me in touch with the president of UPS,” Donovan says. “In San Francisco, there are hundreds of people trying to court and woo and get advice from a select group of mentors. It’s easier to be dismissed.”

But while founders may be lured by all Downtown Project has to offer, attracting enough employees to those businesses is proving to be a tougher sell. For Keller Rinaudo, CEO of Romotive, relocating to Vegas back in 2011 was a no-brainer. After completing TechStars Seattle, where he and two co-founders were developing his Romo product, which combines hardware and software to turn any iPhone into a personal robot, Rinaudo got a call asking him to come to Las Vegas and meet Hsieh.

“I came in, talked to him about what we were doing, and Tony was like, ‘Here’s a free apartment. Move in here, and build your robots,'” says Rinaudo of their first meeting in 2011. “That sounded pretty good to us, so we took him up on it.”

Over the course of a year and half, Romotive grew to 18 employees, secured a $5 million Series A investment from VegasTechFund, and was shipping tens of thousands of Romos to more than 30 countries around the world. Romotive quickly became the poster child for Downtown Project, but in just a few short weeks, Romotive will be relocating to more obvious pastures: San Francisco.

Challenges to Hsieh’s Bet

“It’s getting to the point where if we’re going to build a company around this idea of making affordable robots for everyone in the world, we’re going to need to be able to hire 1,000 people, not 20, and we’re going to need access to the best roboticists in the world,” Rinaudo says. “Those people are in Boston or Palo Alto, and we concluded that we really need to go where they are.”

Many in the tech community viewed this decision as bad news for Vegas, but Rinaudo disagrees. “I think having a robotics company in San Francisco that’s a shining example of how you can start a weird, ambitious company in Vegas and grow it quickly will serve Downtown Project more than it will hurt it,” he says.

Hsieh, for one, was supportive of Rinaudo’s decision. “Nine years ago, Zappos moved from San Francisco to Las Vegas, but that didn’t become the standard trajectory of Silicon Valley start-ups,” Hsieh says. “I think we’ll see some companies moving, but most staying. What’s important is the constant influx of new talent, the pace of which is actually accelerating in Downtown Vegas.”

While he may have laid down a solid foundation already, Hsieh says he knows there’s still lots of work to be done, and it won’t happen overnight.

“I come from a tech background, so I’m used to moving fast. Anything related to buildings and real estate just takes a longer time,” he says. “I think the most important lesson I’ve learned from other cities is you can’t just build a pretty building and hope that things will work out. You need to focus on the people and the community first.”

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How to Prospect for New Customers May 22nd 2013, 12:00
A step-by-step approach for building up your sales pipeline.

For most companies, the ability to find potential customers is the difference between growth and bankruptcy. Here’s a systematic approach, loosely based upon a conversation with Thomas Ray Crowel, author of the excellent book Simple Selling.

1. Get a decent list of prospects.Ideally, you want to be prospecting for customers who are already likely to buy. To do that, draw your list of prospects from the following sources in this order:

Referrals. People whom your existing customers have contacted and suggested that they get in touch with you.

Networks. People whom you’ve connected with personally at industry events or online via social networking. Website Visitors. People who’ve shown an interest in your offerings by accessing your website and leaving contact data.

Purchased Lists. People who have the job title that typically buy your offering inside industries into which you typically sell.2. Create a qualifying script.

Based upon your experience, define a conversational way to ask, during an initial conversation, whether or not the suspect has a budget, authority to spend the budget, and a need for your offering.

In most cases, qualifying scripts are built around open-ended questions that you ask during the conversation. I’ve provided you with a list of these questions in my previous post “14 Ways to Qualify a Sales Lead.”

If you’re calling somebody from a purchased list, you’ll also want a basic cold-callings script. There’s a good model for this in my previous post “A Cold Calling Script That Really Works.

3. Set reasonable prospecting goals.

Set a target for how many prospects you will need in your pipeline order to generate the number of sales that you need. For example, if you must generate five sales a week and on average close one out of fifty prospects, you will need to make 250 calls a week.

Based upon how many of your prospecting calls “go through,” estimate the amount of time it will take to make those calls, including the time that will be required to have a meaningful conversation once you’ve gotten into one.

4. Get into a positive mental state.

Find a place where you won’t be interrupted or distracted. Take a few minutes to focus yourself and your thoughts:

Be positive. Believe you will succeed. If you fail try again.

Be optimistic. Look for the best in people and expect good things to happen. Visualize success. Imagine ALL the emotions you’ll feel when you achieve your goal.5. Make the calls.

‘Nuff said.

While doing so, remember to listen as much (or more) as you talk. According to Crowel, the most common prospecting mistake is failing to notice when prospect wants to buy right now. Listen for stuff like this:

  • “We’ve been looking to buy something like this.”
  • “I was thinking of contacting your firm about this.”
  • “Oh, yeah, we definitely need to talk.”

If you hear something like this, you can skip the script and jump right to the close.

Like this post? If so, sign up for the free Sales Source newsletter.

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3 College-Town Incubators to Watch May 22nd 2013, 04:09
America’s college towns are perfect spots for fresh ideas and innovation. Here are three incubators to watch.

It shouldn’t be surprising that 32 percent of all business incubators in North America have ties to a university. College towns offer an abundance of resources–including a cheap, well-educated work force and a pipeline of ideas from campus classrooms. High-profile incubators such as Stanford’s StartX and the Austin Technology Incubator at the University of Texas aren’t the only hives of innovation buzzing within academia.

Here are three other college-town incubators worth watching.

USC/Columbia Technology IncubatorLocation: Columbia, South Carolina; home of the University of South Carolina.

The 40,000-square-foot USC/Columbia incubator houses 45 young companies in fields that include software and pharmaceuticals. Entrepreneurs can get mentorship on topics such as grant writing and Web design, join lunchtime discussions with fellow entrepreneurs, and compete for seed funding in pitch contests.

Success stories: The 31 companies that have graduated from the incubator have created more than 775 jobs, according to the incubator. Direct Measurements, which makes sensors (above) to measure the stress on bridges and wind turbines, was recently named lead subcontractor on a $4.4 billion bridge-monitoring project in Washington State.

Cost: Office space ranges from $150 a month to $1,000 a month.

To apply: Your start-up has to be tech-oriented. To be considered, submit a business plan and an application for review.

EnterpriseWorksLocation: Champaign, Illinois; home of the University of Illinois

EnterpriseWorks has nurtured 145 businesses, many in IT and biotech, since its founding 10 years ago. In addition to offering entrepreneurs legal assistanceand payroll services, the incubator hosts six entrepreneurs-in-residence and an industrial-designer-in-residence to help start-ups bring their products to life.

Success stories: EnterpriseWorks’s start-ups have raised $550 million in outside capital, including more than $28 million in government research grants. IntelliWheels, a company that has created a patent-pending gear system for manual wheelchairs (above), was awarded a grant from the National Institutes of Health and has raised more than $500,000 in funding.

Cost: Leases range from $200 to $800 a month for offices; $800 to $1,900 for labs.

To apply: Submit a business plan and an application for review. You’ll have an inside track if your start-up has ties to the university.

Furnace Technology Transfer AcceleratorLocation: Scottsdale, Arizona; home of Arizona State University’s Skysong Center

The Furnace gives start-ups at least $25,000 in seed funding and business services worth another $25,000. They also get intensive mentoring for six months and access to resources like on-site 3-D printers. The 15-month-old accelerator was created to spur the commercialization of intellectual property coming out of Arizona research institutions.

Success stories: The Furnace has secured more than half a million dollars in financial support for the selected start-ups. Among the 10 companies in the accelerator’s inaugural class is RehabDev, which is developing wearable technologies (above) to help stroke victims perform repetitive motions that aid their rehabilitation.

Cost: Tech transfer fees typically cost start-ups an equity stake of 3 percent to 4 percent.

To apply: Applications for the 2013 class are available August 1. Your start-up must be new, without revenue.

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Why Warby Parker Opened a Retail Store May 21st 2013, 22:26
The future of retail is at the intersection of e-commerce and bricks-and-mortars, says co-founder Neil Blumenthal.

When Warby Parker opened a flagship store in New York City, many people were shocked. No one expected the digital eyewear disruptor to expand their business to a bricks-and-mortar store.

Speaking at Internet Week this week, Neil Blumenthal, one of Warby Parker’s founders, said the move was strategic.

“We believe the future of retail is at the intersection of e-commerce and bricks-and-mortar,” he said. “People think it’s crazy that we went and signed a 10-year lease in SoHo, next to Ralph Lauren, across the street from the Apple Store. But we have actually been dabbling in bricks-and-mortar for about three years, almost as long as we have had the website open.”

When it launched, the start-up offered customers the option to try a number of glasses at home, he explained.

“That in itself was a physical form of sales, but what happened was that within 48 hours of launch, we were overwhelmed by demand and had to suspend the home trial program. And people would call up and say, ‘Hey, can we come to your office and try on glasses?’ And we would say, ‘Uh, we are working out of my apartment.’

“People would come in, and we would lay out the glasses on the dining room table. And we thought it was going to be a sub-optimal experience, but it ended up being a very special experience in that we could build relationships with our customers. They could try on all the glasses. We started to realize maybe there was a place for traditional bricks-and-mortar retail.”

The idea for the Warby Parker showroom and pop-ups was born. When those raked in profits, the company decided to open a flagship to anchor the brand. Now, 50 percent of their foot traffic and sales are driven by word-of-mouth, which Blumenthal says was exactly the point. “Our philosophy from the get-go has always been: How can we grow this primarily through word-of-mouth?

“It’s about how can we create special moments. When you walk into the store, most people are really surprised, because it doesn’t look like any place they have ever been that sells eye glasses.”

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What It Really Means to Put Your Best Foot Forward May 21st 2013, 22:01
Seva Call founder Manpreet Singh says what you do matters more than what you wear.

In Silicon Valley, the classic suit and tie has long given way to hoodies and sweatpants. But Manpreet Singh says he’s fine with that.

The founder and president of Seva Call, a Potomac, Maryland-based site that connects customers with service providers, tells The Washington Post that long hours and focused attention require maximum comfort. Getting dressed to the nines? Well, that’s just a distraction.

“I have no idea how I, or anyone else, got any work done at my old finance job,” he recalls. “Today, if we’re all putting our best foot forward professionally, no one cares whether or not that foot is clad in shiny leather wingtips.”

To promote a culture where everyone is “comfortable being comfortable,” he says Seva Call discourages guests and even job applicants from dressing up. Every minute spent thinking about appearance is time away from putting in work.

“The right balance is one that allows everyone to focus on the work,” he continues. “So far, I’ve managed to work with a team that’s smart enough to know where that balance is. And it has nothing to do with whether or not to wear shoes.”

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General Assembly Co-Founder: ‘Your Education Is Always in Beta’ May 21st 2013, 20:31
No matter what happens, you should never stop learning, says Matthew Brimer and a panel of entrepreneurs.

Entrepreneurs should think of their education as always being in beta with room for growth and improvement, said Matthew Brimer, co-founder of General Assembly, a start-up academy.

“We have this idea that education is this kind of an adjective that you can apply to yourself after you go through four-plus years experience in your late teens and early twenties,” he said in a panel held Tuesday at Internet Week. “So you come out with a college degree and you are educated.”

But this doesn’t mean we’re always prepared. The knowledge needed at different stages of an entrepreneur’s life and career evolves over time.

“Rather than thinking of education as this thing that happens in a four year period of your life and then you are over, you are done, we like to think of education as something that should be tracked to both your life and your career, as well as your progress through it, so that it is suited to what you need and when, but is also attached to the world as it exists today,” Brimer explained.

Some entrepreneurs learn from watching their peers, chimed in Bridgette Beam, moderator of the panel and Google’s global entrepreneurship manager. In her experience, she’s learned a lot just by talking with colleagues.

“It starts with asking for help,” added Matt French, director of business development for Startup Weekend. “Most entrepreneurs don’t know the answer to every question, and surrounding yourself with smart people can help answer them.”

Brimer agrees. “Hire people who are better than you at specific things,” he urged. “Ideally, as your company grows, you should be the least talented, the least capable and the dumbest person in the room. And if you are not, if you are the most talented, the most capable, and the smartest person in your company, then you are hiring all terrible people.”

This might not make entrepreneurs feel like kings of their castles, but it will help them to build more sustainable companies and boost the value of their products.

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The Biggest Threat to the Yahoo-Tumblr Combination May 21st 2013, 20:04
A recently-acquired founder has some advice on company culture for Marissa Mayer.

So another young tech genius cashes out as Yahoo acquires Tumblr for $1.1 billion. Will Yahoo CEO Marissa Mayer be able to turn it into a profitable venture? I’ll leave that to the pundits. I’m going to address what poses the biggest risk to a successful integration: culture. Yahoo and Tumblr have very different company cultures–and if the marriage is not handled correctly, it could mean disaster for everyone involved.

Already social media observers and even Tumblr employees are openly saying to Yahoo: “Leave us alone.” Tumblr has built a successful brand and culture by doing things its own way. And while the execs at Yahoo will certainly be touting the Tumblr culture as a major reason they bought the company, make no mistake: they will do whatever is necessary to monetize the investment and satisfy shareholders.

My own company, BerylHealth, was recently purchased by a large public company. I’ve felt assured Stericycle respects Beryl’s culture; the CEO asked me to become the chief culture officer of the combined entity. But I have no doubt that merging into a larger company–let alone scaling Beryl’s culture to a multi-billion dollar enterprise–will have its challenges.

Here’s the advice I have for Yahoo CEO Marissa Mayer:

Don’t say, ‘Nothing will change.’
While this could placate employees in the short term, you know it’s not true, and you’ll lose trust when you inevitably start making changes.

Recognize your new people–soon.
You bought a cool social media site that caters to the younger generation. But you didn’t just buy a website. You bought the hearts and minds of 175 people who live and breathe the Tumblr ethos. They are your product.

Get to profitability.
Tumblr will only survive (and Yahoo will only thrive) if it makes money. Tumblr’s employees need to know that millions of blog posts a day doesn’t ultimately provide a long-term return to stakeholders. No need to apologize for that.

Brainstorm together.
Don’t make decisions for the Tumblr team, but with them. These are smart people who know their business. Tumblr’s leaders have earned a right to be at the table.

Make known your core values.
Start right now and make sure your employees understand your company-wide mission, vision, and values– that they are part of something bigger than themselves.

I wish you all the best of luck.

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Mario Batali on Growing a Business May 21st 2013, 20:03
The celebrity chef talks branding, business, and building quality products with Scott Gerber.

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Tumblr Is New York’s Third Billion-Dollar Start-Up Exit in the Past Year May 21st 2013, 18:31
Away From the Computer Tumblr lets users share their thoughts online, but Karp prefers to jot his ideas for the company on paper.Who needs Silicon Valley?

New York startups are proving that Silicon Valley isn’t the only place where monstrous tech companies can be made.

In the past twelve months, three tech companies in the New York area have exited for more than $1 billion.

Connecticut-based Indeed, a job search site with a big Manhattan presence, was acquired by Japanese company Recruit Co. Ltd. for an estimated $1 billion. Travel search site Kayak went public then was acquired by Priceline for $1.8 billion.

Now Tumblr, a true New York City company, has been acquired by Yahoo for $1.1 billion in an all-cash deal. It’s staying in New York post-acquisition, so the talent won’t be departing for Silicon Valley.

Other recent, sizeable New York exits include Buddy Media, which was acquired by Salesforce for ~ $690 million and OMGPOP, which Zynga purchased for a ~ $200 million.

The exits mean more capital to spawn companies and retain talent in New York. Tumblr was the result of an exit its founder, David Karp, was a part of in 2006. He was head of product for UrbanBaby when CNET acquired it and he used the capital to launch Davidville, a hub for his creative projects.

Tumblr won’t be the last big exit New York sees either. Other valuable companies that are growing quickly include 3D printing company Makerbot and project funding site, Kickstarter.

– By Alyson Shontell

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