Inc Small Business
At Bloomberg's Next Big Thing conference, industry thinkers talked about what they think will be the wave(s) of the future. Do you agree?
What's the next biggest thing in technology? Depends on who you ask.
A number of industry thinkers and innovators did some crystal ball-gazing Monday at Bloomberg's Next Big Thing conference held in Half Moon Bay, California.
Here's a round-up of some of their more interesting predictions.
1. Bitcoin. Tim Draper, managing director of VC firm Draper Fisher Jurvetson, initially tried to wriggle out of pinpointing one specific big thing but when pressed he said without hesitation, "Bitcoin," the digital currency platform. "I like when our government is challenged by the private sector."
2. Devices that understand who we are as people. This was one a number of speakers mentioned. The more jargon-laced term for the idea is "contextually aware systems" and it refers to devices that detect where you are and what you want next, before you need to ask. So, for example, think of your car doing more than simply getting you from point a to point b. Imagine a car that not only gives you directions but takes you through the process of parking your car by identifying the location of parking spots and then delivering you to your ultimate address by anticipating what you'll encounter along the few blocks you'll walk.
Draper, too, liked this idea--although his ideal device, he suggested, might be a wristband that detect your low blood sugar and then signals a nearby drone to drop off a pizza. "You get a pizza before you even know you want one!"
But these "devices" in the end may not be devices at all. "You shouldn't need a device to tell you if your glucose is too high," said Intel CTO Justin Rattner. "Your clothes should tell you."
3. You'll know about important news before you need to look for it. Already feel like you get too many alerts on your phone? Prepare for a few more. Michael Sippey, VP of product at Twitter, mentioned the company is testing a new service that will direct message you if suddenly a bunch of people you follow all decide to follow the same person. This sort of activity could indicate a news event that you might want to know about. So Twitter wouldn't wait for you to find about it in your newsfeed; it might just buzz your phone so that you're the first to know.
4. The sharing economy is the auto industry's next design challenge. Kevin Hunter, president of Calty Design Research at Toyota, addressed the elephant in the room-- at least in the car industry. Car-sharing start-ups like Lyft, Uber, and Zipcar have introduced a new challenge for automakers.
Never mind that these services may very well take more cars off the road; they may also change how they're designed. Up until now, cars have been personal machines designed specifically for the owner of the vehicle and, say, her family. But how do you design a car for an ever-changing group of drivers, rather than one person? What they look like, arguably, matters less, while their functionality matters a lot more. Toyota doesn't necessarily have the answer--at least not one Hunter was willing to share--but it will have to think about it soon.
5. Data privacy is key--but it doesn't have to scare people. It's not terribly surprising to go to a tech conference and find yourself swimming in a strong current of optimism. Technology folks tend to equate the future with progress and see entrepreneurs as the bearers of this progress. Even so, a handful of speakers, including SRI Ventures VP Norman Winarsky, raised the possibility of one area in particular that won't necessarily improve with time: consumers' problems with their own data and privacy may get worse.
But, not surprisingly, the optimists in the room see the situation differently. Rattner of Intel sees a "data economy" in the future. In other words, data privacy will still be very important, but "people will control their own personal data." They'll take ownership over it and even sell it to marketing companies to make a profit on the side.
What do you think? What are your predictions?
What's holding you back? Rob Ashkenas, managing partner of Shaffer Consulting, points out the root of the problem, and smart ways to fix it.
Slowdowns are inevitable, but to get through those slumps, you've got to know what's behind them, says Ron Ashkenas, managing partner of Shaffer Consulting, in The Harvard Business Review.
Here are three signs you've been stunted:
The law of large numbers. "As a company gets bigger, each percentage of incremental revenue suddenly represents a fundamentally larger number," says Ashkenas. There's also more pressure on the sales team to find new markets, categories, and geographies.
Market maturity. As a market moves through its life cycle, it becomes more crowded, prices stabilize, and the opportunity to grow through price increases, well, decreases. When a market gets saturated, it becomes that much harder to lure away buyers who are loyal to particular brands.
Psychological self-protection. Innovation is hard. So it's no suprise that rather than take a risk with a new product, many companies succumb to the pressure to preserve the base business and focus on "adapting existing products and services," says Ashkenas. Sadly, playing it safe leaves the door wide open for disruptive competitors.
There are two ways to keep up the growth, he continues:
Regularly re-examine your business model. "Don't limit your innovation and research to the development of new products and services, but also focus on the possibility of new business models," says Ashkenas.
Next, consider downsizing. Are all your products producing sufficient returns? Would you be better off shedding some customers? Acting on the answers "can liberate you and your resources to focus on new opportunities and will lead to more growth in the long term," he says.
Are you a technical founder? Regardless, take "Startup Engineering," Stanford's now-available free online course.
Today Stanford is launching "Startup Engineering," a free online course through Coursera.
According to the professors, you need to commit just two to 20 hours per week for 10 weeks to complete the class. And if you pass, you'll receive a nifty little certificate.
It's not surprising that Stanford would offer a class geared towards future entrepreneurs. It's a school known for entrepreneurship, and it already offers several free online courses meant to help would-be entrepreneurs. Startup Engineering was also offered on its real-world campus this spring.
But what's notable about Startup Engineering is how the course's professors--a biophysicist and an entrepreneur--focus on the technical side of starting and scaling a company far more than anything else.
They write, in the website course description:
The first part of the course will cover modern software engineering principles with a focus on mobile HTML5 development, taught via 5-minute to 10-minute video lectures with in-video quizzes, programming assignments, and multiple-choice questions. Guest lecturers from top Silicon Valley start-ups will bring these concepts to life with real engineering problems from their work.
In the second part, you will apply these concepts to develop a simple command line application, expose it as a webservice, and then integrate other students' command line apps and webservices together with yours to create an open-source mobile HTML5 app as a final project. Lectures will continue in the second part, but will be focused on the design, marketing, and logistical aspects of creating and scaling a start-up.
Of course, there's not much in there about the "soft" side of entrepreneurship--hiring the right people, marketing, and company culture, for instance--but that's not really the point of an engineering class.
But it does indicate just how essential the "software" layer of businesses are becoming for Silicon Valley start-ups.
In response to criticism about the course's narrow technical focus, Balaji S. Srinivasan, one of the course's professors, wrote on HackerNews:
It's a good strategy these days to build one's business on top of a software core, with APIs for all major business functions and physical interface layers only when absolutely necessary. That's really the overall principle that I'm trying to communicate, along with examples in practice.
In other words, entrepreneurs should be thinking about the technical layer of their business from Day 1, and founders that build their businesses with the right technical architecture are best-positioned in the long-run.
As one former student of the class writes:
Being able to automate huge parts of your business, regardless of what industry you're in, is a huge advantage. Think about an energy company building APIs to monitor consumption and efficiency at client sites and adjusting their work accordingly--that's huge. This class does a lot more than teach you how to build webapps; it teaches you to think in an automation mindset and happens to teach you a lot of useful skills along the way.
You can't beat the nightlife or business opportunities, said Michael Bloomberg during his Stanford commencement speech Sunday. Translation: Silicon Alley should be the next tech hub.
New York City mayor Michael Bloomberg believes in Silicon Alley so much, he wouldn't be surprised if Stanford graduates started moving there.
“I believe that more and more Stanford graduates will find themselves moving to Silicon Alley, not only because we’re the hottest new tech scene in the country, but also because there’s more to do on a Friday night than go to the Pizza Hut in Sunnyvale,” he said during his Stanford commencement speech Sunday.
"Leland Stanford, in addition to being an entrepreneur, an elected official, a philanthropist, and a great supporter of higher education, was originally a New Yorker," he added. "No other university in the world has so profoundly shaped our modern age. Without Stanford, there's no Silicon Valley, and without SV, there's no tech revolution, no information revolution, no communications revolution, at least not as we know it."
In his apparent bid to lure the techies of Silicon Valley to his city, Bloomberg quipped, "Apparently, every single person here has a great idea for a new startup. I've been here two days, and so far 27 students 14 professors and the checkout guy at Axiom Palmer have approached me about VC funding."
The mayor's dream of turning the Big Apple into the next tech mecca might not so be far-fetched. Yahoo CEO Marissa Mayer recently bought Tumblr for a cool $1.1 billion, which prompted many in the New York tech sector like John Borthwick, CEO of Betaworks, to tell GigaOm this type of social media sale "helps solidify and legitimize the entire New York startup ecosystem."
Or as Ken Lerer, the New Yorker behind Lerer Ventures, put it, "If you stand on Broadway and look above 34th street, you can see the media of the past. Look down the Broadway, you see the future."
Do you agree with Bloomberg that Silicon Valley's finest should move to New York?
Facebook is just one Internet giant that has released its NSA stats to reassure users. Here's a round-up of the others, and their numbers.
Consumers haven't been able to look at Silicon Valley the same way ever since news broke of a long-running government program called PRISM. Of course, the nine Internet companies implicated in the leak aren't the only ones handing over customer data. Apparently thousands of companies do this, writes Inc. reporter Eric Markowitz.
However as news continues trickling out, Internet giants feel pressed to step forward and disclose the total number of legal orders they received for user data, including ones from the National Security Agency and from state, local, and federal police performing criminal investigations.
Here's what they've told us so far:
Apple is the latest company to speak up about PRISM, per its Commitment to Customer Privacy:
"From December 1, 2012 to May 31, 2013, Apple received between 4,000 and 5,000 requests from U.S. law enforcement for customer data. Between 9,000 and 10,000 accounts or devices were specified in those requests, which came from federal, state and local authorities and included both criminal investigations and national security matters. The most common form of request comes from police investigating robberies and other crimes, searching for missing children, trying to locate a patient with Alzheimer’s disease, or hoping to prevent a suicide."
The company also made it clear it wasn't mining data for fun:
"Apple has always placed a priority on protecting our customers’ personal data, and we don’t collect or maintain a mountain of personal details about our customers in the first place. There are certain categories of information which we do not provide to law enforcement or any other group because we choose not to retain it."
Microsoft came forward Friday after receiving the go-ahead from the government. According to John Frank, vice president and deputy general counsel, the search company received between 6,000 and 7,000 requests from U.S. law enforcement affecting between 31,000 and 32,000 accounts in the last half of 2012. In a blog post, he writes:
"We appreciate the effort by U.S. government today to allow us to report more information. We understand they have to weigh carefully the impacts on national security of allowing more disclosures. With more time, we hope they will take further steps. Transparency alone may not be enough to restore public confidence, but it’s a great place to start."
In a statement provided to CNET, Google said it wants to be even more transparent. As it is, Google releases statistics about government surveillance in its transparency report, including information on NSA letters sent by the FBI.
Last Wednesday, Google revealed it uses secure FTP servers and in-person delivery when complying with NSA requests. Over the course of 2012, the search giant received between zero and 999 National Security Letters--foreign intelligence-related requests from the FBI involving U.S. citizens separate from its investigations into criminal, civil, or administrative matters.
On June 11, Google wrote to the Department of Justice and the FBI asking for details on national security requests and their scope.
"When required to comply with these requests, we deliver that information to the U.S. government-- generally through secure FTP transfers and in person," spokesperson Chris Gaither told USA Today. "The U.S. government does not have the ability to pull that data directly from our servers or network."
Facebook also announced on Friday it had been given permission to disclose its number of data requests. Facebook received between 9,000 and 10,000 requests pertaining to 18,000 and 19,000 accounts.
“The government will only authorize us to communicate about these numbers in aggregate, and as a range,” Facebook said. “This is progress, but we’re continuing to push for even more transparency, so that our users around the world can understand how infrequently we are asked to provide user data on national security grounds.”
Twitter was one of several companies approached by the NSA to participate in a "dropbox" system, whereby legally requested data could be copied from their own server to one owned by the NSA, The Guardian reports. However, the start-up flatly denied the request and has since joined the rally for support to publish more details about the number of U.S. law enforcement requests.
Alex Macgillivray, the company's chief lawyer, tweeted:June 11, 2013
More than 80 percent of manufacturers see health care costs as their top business concern
Another day, another survey about Obamacare.
About a week ago, we reported on a survey of hiring among small- and medium-sized businesses, which found the Affordable Care Act to be only a minor factor in determining the number, and type, of employees on their payroll. [http://www.inc.com/Adam-Bluestein/Obamacare-hiring.html] Apparently, few of those survey respondents were manufacturers-;who are viewing the approaching implementation of Obamacare with dread.
Among the 317 companies who participated in the National Association of Manufacturers/Industry Week Q2 Survey, 82.2 percent said that “rising health care/insurance costs” was their top business concern-;ahead of taxes and regulations, uncertainties about the political climate (each cited by 66.9 percent of respondents), and well ahead of worries about weaker domestic and foreign sales of their products (cited by 50 percent and 27 percent, respectively).
Health-care anxiety is up from last quarter’s survey, when 74 percent of respondents listed insurance costs as a top concern. “Even in three months, it’s ticked up in a way that’s statistically relevant,” says Joe Trauger, NAM’s vice president of human-resources policy. “It’s having an impact on how they’re conducting business-;trying to decide whether to decide additional people and making other long-term planning decisions.”
Ninety-nine percent of manufacturers surveyed already offer health benefits to their employees. So their big concern isn’t about having paying a bunch of new premiums, but rather seeing their existing premiums go up even more than they already have-;8.5 percent on average in each of the past two years. The respondents anticipate an average premium increase of 14 percent in 2014, but that’s an estimate: While some companies have already started negotiating next year’s rates, many are simply guessing guess based on past experience and their internal utilization data. “I think the larger message here,” says Trauger, “is that no one is expecting rates to go down. Everyone expects moderate to significant increases.”
The certainty about which way premiums are headed is countered by confusion about almost everything else having to do with Obamacare: About 56 percent of those surveyed said they were either not prepared or uncertain about how they planned to implement the ACA at the beginning of 2014. And more than 41 percent said they were uncertain if their business would participate in a health insurance exchange.
Kvetching about health-care and politics aside, 51.6 percent of manufacturers surveyed expected their payrolls to hold steady, and more than twice as many companies expected to add full-timers (32.5 percent) than to cut them (15.9 percent).
Even Chris Poole, who founded the 4chan online community when he was 15, says he hasn't a clue what teens do online today.
When Chris Poole created 4chan, an image-centric forum site, he was just 15 years old. Today, he's 25--and admits he's already out of touch with what young people are doing online these days.
In recent years, while 4chan became a birthplace for popular memes that draws 25 million unique monthly views, Poole has become a prominent free-speech advocate, founded a different venture-backed drawing-and-image site, and taken on a role at a New York-based VC firm--all very grown up occupations. On Friday he shed perhaps his last vestige of the enfant terrible years: He claimed to be out of touch with kids these days.
Here's what happened when The Next Web's Harrison Weber asked Pool during the Northside Festival in Brooklyn where teenagers go online these days:
Poole: I don't fucking know!
Weber: [Laughs] My sister knew about Snapchat before me. I bring her up because she's 16, in high school, and a pretty typical teenager. And I write about technology professionally.
Poole: Dude, tell your parents.
At this point Weber mumbled something mock-defensively about his little sister not sexting (obviously), and the conversation diverted into the significance of privacy via anonymity online--and whether that's even possible anymore.
Poole's indoctrination into the Internet was in the '90s, when you dialed up on modems, and "browsing" was the trickiest part of navigating what was unironically dubbed the information superhighway.
"For a lot of people, myself included, AOL was the training wheels for the Internet. It was structured around keywords and chat rooms, and buddy lists," Poole said.
It's that chat-room style of interactive anonymity that helped inspire 4chan. Built on a series of continuous message boards, the site is filled with user-generated content that's ephemeral, and never becomes a permanent record. Most boards are limited to roughly a dozen pages, so content is usually available for only a few hours or days before it is removed. Also, 4chan's users are anonymous with un-verified identities: Poole was known on 4chan as "moot," and the most popular identity there is "Anonymous".
That's one way Poole may still understand young people.
"Being able to put yourself out there and take risks and be vulnerable without it coming back to haunt you is really powerful," Poole said.
Are you a crocodile salesperson? Do you sell and tell? Here's a better approach to identifying a sales prospect's problems.
In my first enterprise software company, we developed a sales methodology that we called PUCCKA. The point was to develop a common methodology to make sure our whole team approaches sales with the same mindset and to give us a language to talk with each other about our prospects. Having a methodology, instead of just going on random sales visits, helped force a bit of rigor and honesty among team members in terms of how well--or poorly--we thought we were doing.
This post is about the Pain aspect of our methodology, as in, “Have you identified your customer's pain point yet?” Pain is a reminder that unless your prospect has a need to solve a problem, they are not going to buy a product. Customers sometimes buy things spontaneously without thinking through what they actually need. But, often, there is an underlying reason for a purchase, even if the buyer doesn’t bring it to the surface.
For instance, between the years of 2010 and 2012, every brand out there seemed to be buying Facebook "Likes." In truth, many companies had no idea why they actually needed Facebook Likes. But there was still a pain point. The pain was that somebody senior in the organization had read about the importance of Facebook for business and had begun asking loud questions about why the organization didn't have a strong Facebook presence. That is still "pain." It's a reason a company would buy something, even if a boss is a dolt with no economic rationale for what he is asking to be achieved. Just watch Mad Men and you'll see what I mean.
So how do you identify a pain point? Rule number one: Don't be a crocodile. Too many sales reps use what I refer to as a "tell and sell" approach. They walk into customer meetings with pre-canned sales decks and proudly squawk through 30 of their favorite slides without engaging the customer in a discussion. I call them crocodile salespeople, because they have small ears and big mouths. The reason they tell and sell is that it’s far easier to go through talking points you’ve regurgitated 100 times than to engage the customer in a dialog about their business challenges. Crocodiles might leave meetings feeling great about themselves, but they come away without any further knowledge of the customer's “pain.”
I’ve also seen sales reps go to the opposite extreme, walking into a meeting and spouting out, “So, tell us what’s not working in your manufacturing process!” I hate when people do this to me. My first thought is, “You asked for the meeting--why am I going to give you a bunch of ammunition to sell to me?”
So where's the happy medium? The best sales meetings are discussions. The goal is to get customers speaking about their organizations. And the best way to do so is by asking open-ended questions. There is an art to teasing out pain points. I recommend starting with a brief overview of you, your company, and your solution. And by brief, I mean BRIEF! You’d be amazed at how long some people rattle on about their life stories in an introduction. Nobody wants to hear your life story other than your mom.
After the overview, I recommend offering up some examples of clients you’ve worked with (you obviously need their approval first). These references make for great discussions with customers. If you have enough references in your arsenal, you obviously want to pick out ones that you believe will resonate with your prospect due to job function or industry.
And then there’s the key transition slide, which I call “What We Find” (WWF). WWF gives you the ability to tease out the problem having just shown similar cases where customers have this problem. For example: “What we find is that many of our customers have been accumulating Facebook Likes, because they thought they were supposed to. Now they have a few thousand Likes, but haven’t been able to figure out whether this is improving their bottom line. They don’t have a way to measure the effectiveness of a Like.” Then, use that as a seque to ask your prospect if they have the same problem: “Do you see that at all inside your department? Have you found a way to best link your potential marketing leads in social media into activity that leads to more business?”
This approach is often successful. When you have a real business disussion about a pain point, rather than simply pitching your solution, prospects are more likely to open up about their own problems. Even if they debate whether the problem is real, you’re having a much better meeting then just flipping through slides. If they’re going to take the time, energy, and logic to try and debate with you, it's must better if they’re at least engaged.
Another point to keep in mind: People prefer to hear themselves speak rather than to listen to you. It’s just human nature. Your job is to tease out as many discrete pain points that are near enough to your solution set as possible. Then, you can begin talking about what it is that you do. Write down the customer pain points so you don't forget them and ask questions the whole time. The best form of sales is “active listening,” when you’re engaged in what the customer is telling you.
And please resist the temptation to cut off the customer with a story of your own. ("I heard you, but now let ME tell you this great story I have.") Most people naturally do this at cocktail parties, but it's not a good idea in sales meetings. When you cut off customers with your stories, you lose valuable insights that might be exposing more pain points. Show your knowledge and charm through great questions, not great anecdotes. Frankly if you can’t sit with prospects and tease out pain points then you ought to be working in a different department than sales or executive leadership.
Everybody has pain points. If you find out what your prospects' problems are, you’ve answered the question, “Why Buy Anything?” Importantly, once you tease out some problems, you can begin to pivot the meeting to your solution and how it may solve their problem. I'll delve deeper into “Unique Selling Propositions” in my next column.
We've got you covered: Here's a rundown of the top events you can watch on the Web.
Call it a tale of five cities. Unlike previous years, the SBA's National Small Business Week (kicking off today) is being held across the country: in Seattle, Dallas, St. Louis, and Pittsburgh, before wrapping up at the end of the week in Washington.
Now, you're probably too busy to travel all over the country as if the year were 1975 and the SBA was actually the Grateful Dead. Fortunately, much of the program will be live streamed on the SBA's website, at sba.gov/nsbw.
You can find the full schedule here, but since you're probably also busy enough that you can't sit in front of your computer watching the whole thing, here's my take on the top 10 things on the agenda:
1. Seattle Day
Monday is basically Microsoft Day. The kickoff takes place on the computer giant's campus. Among the highlights are keynote speaker Lee Rhodes, founder of glassybaby (12:15 p.m. Eastern). You'll also find an "armchair interview" with Cindy Bates, vice president of the U.S. Small and Medium Sized Businesses (SMB) organization at Microsoft Corp, the head of the SBA, Karen Mills, and others.
(Watch it here.)
2. "Getting Started With Social Media" Google+ Hangout
Each day at 4 p.m. Eastern, the SBA will host a series of Google+ hangouts, designed to bring together experts and give you a leg up in your business.
Guess who's hosting the first of them? (Me.) The first panel is on "Getting Started With Social Media." I'll be talking with marketing representatives from Google, the head of small business marketing at Twitter, an expert from Constant Contact, and the managing director of a leading digital marketing strategy firm. (Again, this is Monday at 4 p.m. Eastern.)
(Watch it here. For the Google+ hangout, you can also tweet questions at @billmurphyjr.)
3. Dallas Day
On Tuesday, the program shifts to Dallas. Highlights will include a panel on the region's entrepreneurial ecosystem" and one on growing globally, led by a senior manager at Lockheed Martin.
In the afternoon, there will be a session on government contracting. It doesn't seem that this will be livestreamed, which is too bad, but you can check out my report from last year's event: 6 Tips for Getting Government Contracts.
4. "Managing Your Business's Online Reputation" Google+ Hangout
Rieva Lesonsky, CEO of GrowBiz Media, will moderate an all-star panel on business reputation online. You'll find the head of marketing for the "Get Your Business Online Initiative" at Google, along with representatives from Yelp, LinkedIn, Dun & Bradstreet, and others. I'll definitely be watching--it's at 4 p.m. Eastern, again.
(Watch it here.)
5. St. Louis Day
Your best bet for the third day of the conference, Wednesday, includes a discussion with David Steward, co-founder of St. Louis-based World Wide Technology, Inc, starting at 10:15 a.m. Eastern. (Watch it here.)
6. "How a Mentor Can Help Your Business" Google+ Hangout
NFL Hall-of-Famer and entrepreneur Fran Tarkenton will host Wednesday's hangout event, on coaching and mentorship. It starts at 4 p.m. Eastern. (Watch it here.)
7. Pittsburgh Day
There are some interesting sessions planned on certifications and crowdsourcing that you might want to check out if you're in the area, but as far as livestreaming programs, Thursday's events include an introduction to the Pittsburgh entrepreneurship ecosystem, at 9:45 a.m. Eastern.
(Watch it here.)
8. "How to Get a Loan for Your Business" Google+ Hangout
Calvin Goings, an SBA regional administrator, will host this talk on how to get money. (Can you think of anything more interesting?) He'll be talking with an SBA Business Lending Executive at Wells Fargo, the CEO of Ninkasi Brewing Co., which received an SBA loan, and others. It's at 4 p.m. Eastern again.
(Watch it here.)
9. D.C. Days
Washington actually gets two days of events, overlapping with Pittsburgh on Thursday and wrapping things up on Friday. Highlights include Square CEO Jack Dorsey's talk on Thursday evening (7 p.m., livestreamed), and a keynote address by Angie Hicks, founder of Angie's List, on Friday (12 p.m.)
(Watch it here.)
10. Small Business Person of the Year
Finally, you'll find the SBA's Small Business Person of the Year award on Friday. The SBA is extremely tight-lipped about who they'll be honoring in advance of the event. In advance, you might want to check out all 54 "state" nominees, or read up on Victoria Tifft, last year's winner. (Watch it here.)
(Like this post? Check out Bill's weekly email.)
In many ways, office politics is like a Bureaucratic Disease. Here's the cure. (It also works against workplace bullies and bad bosses, too).
Some people play political games at work. Not most, but enough to cause serious issues for the rest of us. It seems to be particularly common in government bureaucracies and mature industries, but you'll find it in any company where management is clueless, employees aren't held accountable, and it takes an act of God to fire someone.
This is probably a mischaracterization, but I've always seen office politics as something of a disease--a bureaucratic disease. Here's how to fight it, from the CBDC (Center for Bureaucratic Disease Control):
Symptoms of Bureaucratic Disease include backstabbing, torpedoing, manipulating, controlling, grandstanding, finger pointing, power grabbing, sugar coating, idea stealing, and passive aggressive behavior.
The pathology of this particularly insidious disease tends to follow a common pattern: Avoiding anything remotely associated with actual work, taking as much undeserved credit for success as possible, and ensuring that someone else takes the blame when things go terribly wrong, as they inevitably do.
What to do if you're exposed
Close and repeated contact with someone infected with the disease is not advised as it can cause dangerous levels of stress and anxiety. In some cases, it has been known to cause bouts of depression and burnout. In rare instances of chronic contact, some victims have actually been seen to "fall apart at the seams."
If you have an infected coworker and are exhibiting some of the above signs, you are advised to seek immediate treatment.
Course of treatment
1. Take a long hard look in the mirror. Not to blame the victim here, but in many cases, the person reporting the disease in someone else is actually the one who was initially infected. "Reacting in kind" can actually be a defense mechanism employed by the other person's bureaucratic autoimmune system. If that diagnosis is found to be false, proceed to Step 2.
2. Self medicate and wait. Studies have found "waiting" to be an effective strategy. There's an old Japanese proverb that goes something like this, "If you stand by the river long enough, you'll see the body of your enemy float by." No, it's not some sort of hokey holistic cure; it really works because the disease tends to cause infected individuals to eventually self-destruct.
If, on the other hand, your signs are becoming severe, discontinue this treatment at once and proceed to Step 3.
3. Quit and try your luck elsewhere. Although the disease has a widely variable and potentially long range, it quickly loses its potency once you leave the proximity of the organization or company. Once you're safely out of range, the effects of the disease should subside precipitously.
While this is the only cure that's known to be 100 percent effective, it does have some potentially severe side effects, including loss of income, feelings of failure, and diminished pride. Our advice: get over it and move on.
Taking the problem to human resources or management will rarely result in a positive outcome. That course of action has far more frequently resulted in 1) nothing, 2) the victim being labeled a troublemaker, or 3) both victim and infected coworker getting fired.
Under NO circumstances should you try to reason or go head-to-head with the infected individuals. Once the disease has reached the pathological stage, those infected are more or less beyond help or hope. Engaging them will only serve to reinforce and embolden their behavior. It's their game and their rules; you will be no match for their deranged and psychopathic manipulations.
While the pathology is different, the same course of treatment has been found to be effective in the event of repeated contact with workplace bullies and dysfunctional bosses.
Small print: Don't let the comedic tone fool you. The advice is absolutely genuine. No joking.
The interview coach of the future is here, and it goes by the name of MACH. Developed by MIT, the computer software tells you exactly where you need to improve just by hearing the sound of your voice.
We've all been there: Your ideas are fresh and your team is top-notch, but you still aren't attracting investors.
Perhaps it's time to brush up on your interview skills.
The Automated Conversation coacH (nicknamed MACH) might be able to help. Developed by the Massachusetts Institute of Technology, the robot functions as a career coach, giving mock interviews while monitoring facial expressions and prosody (speech pattern and intonation) to see where participants need to improve. Such feedback might include the number of times an interviewer paused or turned to crutch phrases like "you know."
Shortly after MACH was designed, researchers tested it on 90 students. After lumping them in three groups--one that watched a taped interview, another that used MACH and watched a taped interview, and a third that received feedback from MACH, the video, and an interview coach--they found the latter group made the most strides.
Soon small business owners will be able to reap the same benefits via desktop--all they'll need is a camera and microphone. MACH's software will arrive on mobile platforms shortly.
Beyond pinpointing areas in need of improvement, MACH can help entrepreneurs gain an edge over the competition. It'll do so by gauging reactions to interviewers of the opposite sex and see how they fare when asked certain questions. Eventually MACH will analyze sentiment and how well a respondent explained a topic.
Watch the video below to see it in action:
If you want to position yourself as a thought leader in your industry, there's no better way to begin than becoming an author. Here's how.
What convinces you to buy one product or service over the other? For me it's a combination of credibility, expertise, and quality. Oh yes, and price: I want to make sure that I'm getting a fair value. But I will pay more if I see proof of greater experience and expertise. The old adage, "you get what you pay for," is one I stand by.
As an entrepreneur it's important that you exude expertise and confidence, in person and in your marketing efforts. Whether you own a hot dog stand or you're a professional speaker, positioning yourself as a thought leader in your field is one sure-fire way to help future clients know, trust, and want to do business with you. And publishing a book can do just that. From the day your book arrives on shelves, you possess one of the best marketing and branding tools available.
"Most people think writing and publishing a book is a daunting task, but it's easier than you might think" says Cliff Suttle, Chief Excitement Officer (you know, CEO) at ExciteYourAudience.com. Suttle believes that too many people think (and think...and think) about writing a book, but never get to Page 1. "One of the most popular blocks to success is the fear that they don't have anything original to share," he says. "But nothing is further from the truth."
Create a Noteworthy Idea
It's time to set aside the myth that you have nothing original to share. "There are books on every subject imaginable, but you have a unique perspective to share with the world," Suttle says.
To find your book idea, make a list of everything you know about. Write, write, write and don't erase anything. You'll be amazed at how much you know. Don't limit your ideas to business, list everything: making sales calls, dealing with vendors, writing contracts, parenting, building a deck, playing piano, picking out flowers for a wedding, etc. You know a lot, don't you? This should give you a boost in confidence! Now cull out the ideas that will shape themselves into an informative book. Here are some examples.
If you own a moving company: How to Pack Without Pulling Your Hair Out, or How to Make Your New Community Feel Like Home
Financial firm: How to Avoid the Pitfalls of Investing in the Stock Market, or Demystifying Your Small Business Financial Statements
Bakery: Great Taste Without Exploding Your Waist, or How I Turned My Passion Into Dollars
The possibilities are endless!
Stop Writer's Block Before it Begins.
The second thing that hangs people up is that they think they can't write. You're probably better than you think. Remember, no one can benefit from your knowledge if you never write it down. If you struggle with writing, hire a ghost writer or an editor. eLance.com, LinkedIn, and other such sites are a great source for finding people who can help you with this.
Buyer Beware: Always check out references and work samples for anyone you find on such sites.
Choose Your Publishing Options Wisely.
With the vast majority of books being self-published today, it has become the norm. However, this can be a pitfall for many new authors because there are almost too many publishing options to choose from. Be careful: not all publishers are created equal or have your best interest at heart.
Suttle recommends you choose a company that has automated and personal-interaction options for printing and produce quality products with a quick turn-around time. Make sure they do not take ownership of your book. This is important; read the fine print.
"Some publishers feel that just because they print your book, they should own the rights to it and any sequel," he says, "And you certainly don't want that."
The Book is Done, Now Promote.
Once you have written, edited and printed your book, the real work begins. You have to get the book into the hands of your potential customers. According to a recent study from a major publisher, the average self-published book sells 57 copies. Not good. That's pretty much your friends and family. You really want to sell 1000s of copies of your book in order to make it worth producing.
Speaking is a powerful way to sell books--and to promote your company at the same time. Suttle typically sells 100 books at the back of the room after a speech. Of course there is a skill to being successful from stage. You can learn more about that from Suttle's "Speaking for Authors," program, which teaches the techniques to increase the back-of-the-room sales of your book.
Another way to market is with a book launch campaign. These can be tricky and will take research and planning to pull off, but can be well worth the time and expense. Again, there are training programs available that can fast-track your mission.
Lastly, give your book away for free. Books are the best business cards you will ever have. The average business card is kept for about an hour. The average book stays on someone's shelf for two years. How much is a new client worth to you? Books are an inexpensive and awesome way to advertise.
With a determination and desire any business person can be an author and noted expert. Write the book already, and share your experience here on The Successful Soloist!
Come learn more as I interview Suttle on Million Dollar Mindset Radio Monday at 2 p.m. ET.
In a live online chat, NSA whistleblower Edward Snowden answered questions about the PRISM scandal.
Edward Snowden, the National Security Agency whistleblower, is answering questions from the public in a live written chat right now on The Guardian's website.
For obvious reasons, Snowden's whereabouts are still unknown, but the 29-year-old was able to find a secure Internet connection to answer questions from the public. He'll likely keep talking even if he's detained--or worse.
"All I can say right now is the U.S. government is not going to be able to cover this up by jailing or murdering me," Snowden writes. "Truth is coming and it cannot be stopped."
Below are more statements he has made so far in the chat, in response to questions selected from the comments section of the Guardian website and Twitter, about the extent of U.S. government access to civilian information, the role of Google and Facebook, and his ethics:
On being called a traitor:
"I did not reveal any U.S. operations against legitimate military targets. I pointed out where the NSA has hacked civilian infrastructure such as universities, hospitals, and private businesses because it is dangerous. These nakedly, aggressively criminal acts are wrong no matter the target. Not only that, when NSA makes a technical mistake during an exploitation operation, critical systems crash."
On the role of tech companies like Google and Facebook:
"Their denials went through several revisions as it become more and more clear they were misleading and included identical, specific language across companies. As a result of these disclosures and the clout of these companies, we're finally beginning to see more transparency and better details about these programs for the first time since their inception."
On how easily the government can snoop:
"If I target for example an email address, under FAA 702, and that email address sent something to you, Joe America, the analyst gets it. All of it. IPs, raw data, content, headers, attachments, everything."
On how easily a government employee can access civilian information:
"The reality is this: if an NSA, FBI, CIA, DIA, etc analyst has access to query raw SIGINT databases, they can enter and get results for anything they want. Phone number, email, user ID, cell phone handset ID (IMEI), and so on. It's all the same."
On disappointment with Obama:
"Unfortunately, shortly after assuming power, he closed the door on investigating systemic violations of law, deepened and expanded several abusive programs, and refused to spend the political capital to end the kind of human rights violations like we see in Guantanamo, where men still sit without charge."
On the accuracy of his salary:
"The statement I made about earnings was that $200,000 was my 'career high' salary. I had to take pay cuts in the course of pursuing specific work. Booz was not the most I've been paid."
On his decision to leave the United States:
"Leaving the U.S. was an incredible risk, as NSA employees must declare their foreign travel 30 days in advance and are monitored. There was a distinct possibility I would be interdicted en route, so I had to travel with no advance booking to a country with the cultural and legal framework to allow me to work without being immediately detained."
On what he wants to see happen next:
"I would advise [Obama] personally call for a special committee to review these interception programs, repudiate the dangerous "State Secrets" privilege, and, upon preparing to leave office, begin a tradition for all Presidents forthwith to demonstrate their respect for the law by appointing a special investigator to review the policies of their years in office for any wrongdoing. There can be no faith in government if our highest offices are excused from scrutiny - they should be setting the example of transparency."
By emphasizing outfits rather than pieces, the Finnish start-up stands to succeed in the virtual try-on space. Here's how customization, shopping carts, and social features are changing the game.
Start-ups have tried virtual clothing try-on solutions time and time again.
They attempt to make a viable solution for trying on clothes online, with the hopes that it will actually save people from making terrible purchases on the web or from shopping in bricks-and-mortar stores.
Already, there's Metail, TrueFit, Clotheshorse, True & Co., Fitiquette, Fits.me, and PhiSix.
But Finnish start-up Stylewhile is different from other virtual try-on start-ups in the sense that rather than licensing its technology to retailers to integrate onto their platform, Stylewhile functions somewhat as its own online retailer.
Stylewhile also places more of an emphasis on outfits, rather than pieces, Stylewhile CEO Jutta Haaramo tells Business Insider.
Its iPad-optimized platform allows customers to mix and match items from various retailers on top of a model with a similar body type. Once you've created your ideal look, you can save that style and even share it with friends to get their input. Or you can buy those pieces on the spot. For now, it's only available for women.
If you find something you like from both Neiman Marcus and Shopbop, you'll be directed to each retailer's respective shopping cart. But that will likely change, Haaramo says.
In the future, Haaramo envisions one shopping cart to make purchases from multiple retailers on Stylewhile.
Stylewhile has agreements with online retailers including Shopbop, Asos, Ivana Helsinki, Neiman Marcus, and My-wardrobe.com. For every transaction facilitated through Stylewhile, the company takes a percentage of the revenue.
Users typically try on about 17 pieces per visit, Haaramo says. About 10 percent of users actually click the purchase link, which is pretty respectable given that add-to-basket conversion rates average around 12 percent.
Haaramo founded Stylewhile in 2011 alongside Mika Martilla in Helsinki, Finland. Its four-person team is backed by The Finnish Foundation, Tekes, and Lifeline Ventures.
This story originally appeared on Business Insider.
Lunch isn't just about physically fueling your team, argues Cater2.me co-founder Alex Lorton. Breaking bread together is a powerful way to build a company culture and stir innovation.
You, you there, holding the third, bland turkey sandwich you’ve shoved in your mouth for lunch this week, put it down right now!
That’s the message from Alex Lorton, co-founder of food start-up Cater2.me. Your schedule may force you to wolf down something less than super appetizing alone at your desk every once in awhile. But if, as a business owner, you haven’t at least considered getting your team to together for a midday meal from time to time, you’re missing out on a seriously good opportunity to spark conversations, build bonds and get their creative juices flowing.
Cater2.me allows teams of 10 or more accomplish this by connecting them with catered meals to suit even finicky requirements (or voracious appetites for BBQ) from local chefs, food carts and general purveyors of tastiness in San Francisco, New York, and Chicago. But if you're elsewhere, Lorton feels that you don’t need a service like his to reap the benefits of breaking bread together. What are they?Calories and Conversation
Food isn’t simply about calories and vitamins. It’s also a tried and tested way to start conversation. Just think of how many times you’ve struck up a cocktail party chat by commenting on the food, though Lorton offers another example of the how food can catalyze conversation.
“Where do you go with your friends when you really want to have a good conversation? You go to dinner,” he told Inc.com.
And this is particularly important in the modern, wired workplace where we spend so many hours staring at screens. “What I’ve seen from modern workplaces I go into, especially tech offices, is so many people are there with their headphones on staring at a computer. That’s just the the way the workplace has gone,” he says. But with the appearance of the Cater2.me crew, “we actually see people lift their heads up to see what’s coming in for lunch. That’s a way to draw people away from what can become a very solitary workday,” Lorton adds.Getting the Most Out of Lunch
So what are Lorton’s tips for getting as much refreshment and idea and culture-generating conversation out of your shared meals as possible? First provide the right infrastructure -- a space to sit down and eat together with plenty of chairs and table space is best if you have the room. Then provide the conversation starters. Put simply: "lunch shouldn’t be boring."
Repetitive uninspiring offerings aren’t just less tasty, they’re also less likely to spark the kind of informal talk that will bond your team and help them come up with innovative ideas about not just what to order but also how to improve you business. "We’ll actually have the chef come in and do the final bits of assembly right on site to make it more interactive," Lorton offers by way of example. "Those kind of things add a little extra social element, bringing people together and having them talk."
But you don’t need a guy flipping made-to-order crepes in your break room. Simply spending some time finding lesser known vendors and cuisines can get the conversational ball rolling. "Seek out local providers. Rather than going to Subway, find the local artisan sandwich shop," he suggests. Your team won’t just discuss the prosciutto and salami, they’ll also end up chatting about ways to improve your products and services too.
"The idea of breaking bread together is really, really powerful," Lorton concludes.
Do you agree?
A serial entrepreneur lost a fundraising pitch last week, but came away with some useful management techniques.
Last week I competed in Swim with the Sharks, a fundraising pitch contest run by the local New York Entrepreneur's Organization. Five finalists went head-to-head in front of a panel of judges and a live audience of 300 entrepreneurs, similar to the ABC hit show Shark Tank.
I had rehearsed several times and believed wholeheartedly that I had crafted the perfect pitch. Though I had recently already closed a seed round for Likeable Local, I fully expected to come to this event and win. I had worked very hard, I'm very competitive, and I simply expected to win. I always win.
Not this time. The event host, FUBU founder Daymond John, announced both a "People's Choice" winner and a "Judge's Choice" winner. I was neither. I emerged a loser--or at least I felt like it. I was devastated. I felt like I wasn't good enough, smart enough, or talented enough. I sulked for hours.
Then I realized I had lessons to learn from this experience, from losing:
Humility makes a difference.
I had gone into the event feeling too confident, perhaps even cocky, and that probably showed. The truth is, everybody loves an underdog, and nobody likes a cocky attitude. As Geoff James said here, "Humility is probably the business world's least-appreciated emotion." It's always important to be confident, but humble at the same time. It makes you more likeable and likely more successful.
Practice doesn't always make perfect.
While practice does make you better, it doesn't make you impeccable. There are no guarantees of success. I practiced more for this presentation than I've practiced for most things in my entire life--and I still didn't win. I had a strong presentation, but upon review of a video of it, I see I definitely could have been better. For instance, I could have made the presentation more about the problem my new comany is solving, and less about me.
There's success other than 'winning.'
You don't always have to win to achieve positive outcomes. A pessimist says, "I lost." An optimist says, "I didn't win, but what can I learn from this? What can I take away from this experience?" As it turns out, I landed a meeting with Daymond John, made some great new contacts, and walked away with a fine-tuned fundraising presentation. Most importanty, I learned how to lose better.
Despite my ultra-competitive nature, I learned that winning and losing isn't always so black and white. In this case, I may have been a loser, but the only thing I really lost was an unduly cocky approach.
What have you learned from losing? Tell me about it in the comments section below.
The stakes are a lot higher than you think, says VC Jeff Bussgang. He explains why he's getting behind the Senate's Gang of Eight bill.
Editor's note: This is post is part of a series on immigration policy from Engine, a Silicon Valley-based advocacy organization for tech start-ups.
I recently had the privilege of testifying on the benefits of immigration reform in front of the U.S. Senate Committee on Commerce, Science, and Transportation. I plan to continue to speak out until we get the change we need. Bluntly put, our country’s current immigration policy is broken. If we fail to address the issue, it threatens our future as the leading nation for innovation.
As a data-driven investor, I have an appreciation for the compelling data that surrounds the immigration issue. Immigrant entrepreneurs have contributed tremendously to our economy. Here’s an interesting fact: 76 percent of patents issued to our top 10 patent-generating universities had an immigrant inventor. And another: In many of the high tech industries I operate and invest in, the unemployment rate is effectively below zero due to a lack of qualified technology workers, choking off further growth and opportunity. These facts need to be front and center in this battle to change the system and allow us to fully realize our economic potential.
For too long I’ve watched our dysfunctional immigration system turn away the best and brightest from creating jobs and wealth in America. One of my most brilliant students grew up in Vietnam and came to America to attend Stanford University on a full, merit-based scholarship, before working in management consulting and then enrolling in Harvard’s MBA program. For the last two years, she has been working on starting an online education company that will dramatically decrease cost and increase to a quality high school education--an incredibly important issue to all American families. Quite a resume.
She wants to start the company here in the U.S., because she knows this is the best place in the world to finance and build a business like hers. But, due to her immigration status, once she graduates she either has to leave the country or find a job with someone who will sponsor her H-1B visa--all within 60 days. This year, the H-1B cap was “sold out” within a week. The options are slim: Either she will abandon her start-up dream, or she will pursue it in another country that will welcome her instead.
The provisions in the Senate Gang of Eight bill would change the opportunity set for my student. I hope the bill gets the support it needs to change the outcomes for future entrepreneurs. I’m particularly pleased with the proposed INVEST visa program, which grants a path to citizenship for successful entrepreneurs. This program would allow America to be a magnet for entrepreneurs who wish to start their own companies here, not a deterrent.
I believe that America can still be the place where the world’s most creative entrepreneurs come to build globally significant companies. I’ve already written to my Senator, and will be calling Congress on June 18 as part of Engine Advocacy's Keep Us Here campaign. I urge you to do the same.
Attending a conference isn't all about personal and career development. Here's what else employees should be doing.
Since there are so many high-quality conferences and events put on each year, you really need to think about which ones you should go to and what you'll get out of them by attending.
At the end of each year I have the team at my e-mail marketing company, VerticalResponse provide me a list of the events they're considering, along with why they want to go. I also ask them to provide (and this is the biggie), "what's in it for our customers?" This may seem odd as attending a conference is all about personal and career development, networking and the like, but nowadays, we can't keep all that juicy content to ourselves. We've got to get the word out and share what we've learned with our customers. So what's the benefit for your employees and your customers of attending a conference? I've got four top takeaways.1. Learn
This is the most obvious motivation for most people who attend conferences. And given the quality and quantity of conferences out there, you'd be hard-pressed to find one where you couldn't learn something. But, be thoughtful and choosy about which sessions you commit to. At SXSW recently, the lines were so long for some sessions that my team got shut out from many that they really wanted to attend, even after waiting for over two hours to get in. And, from time-to-time you'll go to a session with high hopes, only to realize it's not hitting the mark, or meeting your expectations, so look through the agenda and pick the ones you think are the best fits. If they don't measure up, don't feel bad about leaving a session if it's not meeting your needs. You paid to be there and need to make the most of it. The worst thing you can do is stay put, zone out and start surfing the web or online shopping. Get up and get what you need.2. Network
This is one of the most popular reasons people cite for attending a conference. And who doesn't like the opportunity to get to know and meet new people who work in the same industry? There's an incredible amount of sharing, learning and leveraging that can happen. For instance, we were developing a ProWebinar Series and needed to recruit some industry experts, so while our social media manager was attending New Media Expo, he was able to connect with lots of heavy-hitters and get their commitment to join our series. We were also able to connect with a great vendor on the tradeshow floor and ended up signing a deal with them on the spot. A win-win.3. Content
A few years ago, people went to conferences, learned lots of things and that was that. Then along came social media and everything changed. Now look around a room at a conference and note that almost everyone is tweeting snippets and stats using conference hashtags. Even if you're not at the conference, you can follow along. There are live feeds, blogs and more covering all the action. Now when my team goes to a conference I ask, "what content will you bring back?" and they know the expectation. When we go anywhere we are tweeting, live blogging, posting to Instagram and any other social networks we feel are relevant. By being part of the conference buzz, we get our names out there and get a slice of that coveted thought leadership pie.
Plus, most of our small business customers could never afford the entry price to these conferences, so it's our job to cover it and distill the information so they can benefit from our attendance.4. Share
If you send someone to a conference and they learn and network and create content, then that's great. But, to truly make it valuable, they've got to bring all that back and share it with all the folks who didn't get to go to the conference, but could benefit from the good stuff. And, having the extra responsibility of bringing something back to share encourages your team to be present and engaged during the conference.
There you have my four benefits of attending a conference. Do you support and enable your team to attend them? What's your biggest motivator?
Can't afford more IT staff? Try these apps and services designed to do some of your critical, everyday tech tasks.
A human brain is lightning fast. It can process thoughts in microseconds, recall information stored decades ago, and solve incredibly complex mathematical problems. In theory. But if you've ever tried to ask your IT team to do several things at once, you quickly realize the limits of our supposedly nimble minds.
Part of the problem is that, people are not built for multitasking--especially when the tasks are complex. The average IT staffer in a start-up may be assigned to network operations, systems management, and the help desk--all at the same time. And that's probably causing some serious IT bottlenecks.
These apps can help. They are designed not for replacing a human per se, but for handling repetitive tasks so your staff can work on other projects. Or at least avoid extra stress.
Software that automates certain IT functions can be a lifesaver for a small company. But as you grow, your back-end infrastructure tends to get more complex. IPsoft is one answer. The automation tools can analyze how you do password management, network permissions, and diagnostics, among other things. For example, if there is a problem on your network, the software can analyze how to resolve the problem. If the same problems re-occurs, IPsoft can apply the same script to resolve it again.
2. BMC MyIT
For those still using a call-in help desk, BMC MyIT is for you. The app is designed to weed out unnecessary support calls. Employees go through a tree structure to resolve common issues, like a missing password or a computer glitch. This frees up IT staff to work on more complex problems within your company. The company claims the app can handle 90 percent of the issues.
3. Hotspot Shield
It takes a handful of IT employees to run a complex firewall, set up (and maintain) a virtual private network, and snoop for malware. This app runs in the cloud and sets up a secure firewall between your data and the devices you use in your business. There's no on-site installation and the app also provides secure encryption to ward off hackers.
Mention the phrase "big data analytics" and you might as well start looking for a computer scientist to add to your IT staff. Usually, it means using complex tools to analyze reams of data--say, who is buying what on your e-commerce site. SiSense is like a front-end for everyday non-technical folks to analyze that same complex data. You can see fancy charts and graphs without having to learn a programming language.
There's a period of time in a company's growth journey when outsourcing makes sense. Here's when and how to plan for it.
As a young company, there really isn't an option to hire employees for a lot of core functions. There just isn't the income to do so. Instead, you have to buy resources that are critical to surviving the start-up phase that you cannot successfully do yourself. Is it a core skill? If not, you should probably purchase some time from an expert to handle it.
When the amount of money spent to purchase a resource reaches about one-half or three-fourths of what the wage for an employee would be, then it's probably time to hire one. While it's not a directly comparable cost, you will be getting all of the focus and attention of your employee rather than a billable portion of time from your hired expert.
That is phase one of outsourcing. As a company grows, more of the core functions will come in-house. However, not every function should necessarily be handled internally. As business picks up, certain jobs will become too difficult to scale. This is especially true for companies that are growing rapidly.
For OtterBox, one of those functions was manufacturing. In the early days, we did it ourselves. Actually, in the early, early days, I did it in my garage. Obviously, that wasn't going to work for very long. As we grew the brand and the product offerings, it didn't make sense for us to keep manufacturing in-house. There was no way to keep up with demand and respond to cyclical business patterns.
Instead, we were able to find solid partners that specialize in flexible, scalable manufacturing. It wasn't an easy transition at first and a hard decision to make, but it was so necessary to the success of the company. Without it, OtterBox would not have been able to survive because it wouldn't be able to meet demand.
What should be outsourced will be different for every company. Determining early what those functions are will save a lot of frustration and failure down the road. Strategic planning can help identify those potential pain points before they become insurmountable problems. Look for the areas where your company should really be focusing its time and money. What are those key differentiators that only you can do?