"The advice I’d give to anyone wanting to start a company today would be just the opposite of what they tell you in B-school. I’d tell you to “Bootstrap” it.
I define “Bootstrapping” as the act of starting a business with little or no external funding. Bootstrappers don’t write lengthy business plans, chase deep-pocketed investors, or indulge in overly academic market research exercises. Instead, they focus all of their considerable energy, brainpower, determination and skills on creating a business that can actually succeed in the real world.
In fact, I can offer at least eight solid reasons why Bootstrapping will consistently deliver better results than the “fund-and-burn” model that has become entrenched in Silicon Valley and elsewhere:
1. Bootstrapping ensures that you build your business on a legitimate, real-world value proposition...
2. Bootstrappers initiate the critical sales learning process sooner, not later...
3. Bootstrappers don’t waste money; they make it...
4. Bootstrapping accelerates time-to-market and time-to-profitability...
5. Bootstrappers are less likely to make big, fatal financial mistakes...
6. Bootstrappers are forced into unconventional thinking...
7. Bootstrappers have more freedom and flexibility...
8. Bootstrappers wind up owning much, if not all, of what they create."
Read more in this SandHill.com article.
"The advice I’d give to anyone wanting to start a company today would be just the opposite of what they tell you in B-school. I’d tell you to “Bootstrap” it.
According to this InfoWorld article, the immigration policies and procedures of the United States encourage offshoring, stating:
"Why go through the expense - including not just the visa fees but also the legal fees needed to process the visas, the time it takes to get new employees trained and up and running, plus the uncertainty, delays, and lack of permanency of investments you may have made in hiring foreign workers - when you can just contract a company outside our borders and still get most of the benefits of having the best and the brightest working for you?"
"Corporate blogs, it seems, are everywhere. If you think of blogging as something your employees do on their own time, and shudder at what they might be saying about your company, you’re not alone. Until recently, corporate America knew blogging primarily as a difficult employment issue, one that led to several high-profile terminations when employees posted material on their personal blogs that companies deemed offensive or detrimental to the company’s interests. But now more and more businesses – including Microsoft, Google, Yahoo and Ask Jeeves, to name just a few – have realized that company-sponsored blogs offer a means of communicating with their customers and other constituencies in a direct, informal and participatory way. The basic idea is that some or all employees are allowed to post comments on company-sponsored blogs. The public can access these blogs and generally (but not always) can post their own comments too.
While corporate blogs offer novel opportunities, they also present significant legal risks...To minimize the risks, companies should carefully consider their blogging strategy and take proactive steps to minimize potential exposure. Such steps may include:
Creating a written policy for employees that sets out clear guidelines for corporate blogging and raises awareness about possible pitfalls. Companies may wish to have separate guidelines for employees’ discussion of the company in their personal blogs.
Taking the steps required to qualify for the safe harbors available under the Digital Millennium Copyright Act.
Archiving corporate blog content in a well-organized and readily available form."
From this Howard Rice alert via this VentureBlogpost.
"The goal of this paper is to help the reader gain a basic understanding of the differences between open source and commercial software in terms of some of the practical implications of each and some of the broader issues that software developers, governments and commercial enterprises might want to consider in terms of their own policies and acquisition activities, all bearing in mind not only the immediate costs and benefits, but also the longer range implications of how their decisions today will affect their economies and their standing in the world technology market tomorrow."
Via this I/P Updates post.
"The U.S. Supreme Court will hold a landmark hearing Tuesday in MGM v. Grokster, an intellectual property case that will help set the legal boundaries for copying files from the Internet.
The case pits the entertainment industry against companies that offer file-sharing services. A group of 28 movie and record companies are fighting StreamCast (the distributor of Morpheus) and Grokster, the peer-to-peer software firms.
Tuesday's hearing is part of an appeal by the entertainment industry of a federal judge's ruling last year in the case against the file-sharing firms. The judge found that the defendants shouldn't be held liable for end users committing copyright infringement, citing the 1984 Sony Betamax case, where Sony won the right to sell its home video tape recorder while the movie industry fought to ban VCR sales.
The stakes are high. The most famous file-sharing company, Napster, nearly collapsed as a result of protracted battles with the entertainment industry. Judges found that because Napster maintained centralized servers and facilitated searches for individual songs, the company was liable for policing content.
The companies involved in Tuesday's hearing offer a decentralized network and are therefore blind to users' activities. The case will likely be determined by the summer."
Read more in this RED HERRING article.
This DeveleperDotStar.com article stresses the absolutely essential requirement that written agreements be entered with independent software developers, preferably prior to their beginning work, stating:
"Businesses all over the United States hire software developers to create software that offers a competitive advantage or cuts operating costs. Frequently both business owners and software developers enter into these agreements to develop software without addressing the issue of copyright. How does copyright law apply to these kinds of agreements, especially in cases where copyright ownership is not addressed explicitly? Who owns the software?...
Copyright ownership is critical, since the copyright owner will have the exclusive right to reproduce, distribute, and create a derivative work (among other rights)...
The Federal law addressing this situation is entitled The Copyright Act of 1976, 17 USC 201(a). The general rule is that the author of the work owns the copyright. The Copyright Act, however, contains an important exception called the "work for hire" doctrine. If the facts establish that the "work for hire" doctrine applies, the person for whom the work was created (in this case the shop owner) would own the copyright. The "work for hire" doctrine applies when employees create works within the scope of their employment or a situation where a certain type of work is specially ordered or commissioned by which an express agreement is to be considered a work for hire..."
The article continues by referring to this copylaw.com piece that states:
"For a work created by an independent contractor (or freelancer) to qualify as a work for hire, three specific conditions found in the Copyright Act must be meet:
1. the work must be "specially ordered" or "commissioned." What this means is the independent contractor is paid to create something new (as opposed to being paid for an already existing piece of work); and
2. prior to commencement of work, both parties must expressly agree in a signed document that the work shall be considered a work made for hire; and
3. the work must fall within at least one of the following nine narrow statutory categories of commissioned works list in the Copyright Act:
(1) a translation, (2) a contribution to a motion picture or other audiovisual work, (3) a contribution to a collective work (such as a magazine), (4) as an atlas, (5) as a compilation, (6) as an instructional text, (7) as a test, (8) as answer material for a test, (9) or a supplementary work (i.e., "a secondary adjunct to a work by another author" such as a foreword, afterword, chart, illustration, editorial note, bibliography, appendix and index)."
Software does not fall under any of these categories, making essential a written agreement spelling out the ownership of copyright.
Posted by Anthony Cerminaro at 3/28/2005
The point of an “elevator pitch” is to get your prospects interested enough in your company to get their card or refer you to someone else who might be. You don't need to reel them in; you just need to get them on the hook.
Here are 10 ways to make sure your pitch gets a nibble from a big one.
1. Be Concise...
2. Solve a Problem...
3. Tell Them What They Want to Hear: Describe your product or service and its benefits succinctly. Depending on your audience, you may also have to:
define and size the market
explain how you’re going to make money
tell who is behind the company and
frame the competitive landscape and your advantage in it.
4. Speak in Plain English...
5. Grab the Listener's Attention...
6. Ask Qualifier Questions....
7. Tailor Your Pitch to Your Audience:
To investors, the pitch focuses on your team and how you plan to make money.
To customers, your focus should be on the problem you can solve for them.
Potential partners want to know what you're building, why it's important, and why you’re going to be a success.
8. Show Your Passion...
9. Conclude With a Call to Action...
10. Tell a Consistent Story..."
From this article from Stengel Solutions.
Posted by Anthony Cerminaro at 3/26/2005
On this 25th anniversary of his death, the people will march through the streets carrying that promise printed on thousands of banners. Mothers will make pupusas (thick tortillas with beans) at 5 a.m., pack them, and prepare the children for a two-to-four hour ride or walk to the city to remember the gentle man they called Monsenor.
Oscar Romero gave his last homily on March 24. Moments before a sharpshooter felled him, reflecting on scripture, he said, "One must not love oneself so much, as to avoid getting involved in the risks of life that history demands of us, and those that fend off danger will lose their lives." The homily, however, that sealed his fate took place the day before when he took the terrifying step of publicly confronting the military."
Read more in this article: Oscar Romero: Shepherd of the Poor.
"In general, we're going to decline opportunities for a couple of reasons. First of all, no matter how clever and elegant an invention might be, it's not likely to be a commercially viable innovation unless the value proposition to the targeted user is powerful. In the incredibly competitive world of consumer products, the value proposition of most inventions is insufficient. Secondly, for some inventions and inventors, we simply can't add enough value to warrant our receiving our targeted return on investment."
From this Dispatches Weblog post.
"It took Red Hat 16 months to produce the newest version of its premium Linux product, which went on sale in February for as much as $2,499 per computer per year.
It took a group of programmers less than two weeks to release a free clone. But the move could help Red Hat as much as it appears to hurt it. "
From this CNET News.com article via this Jeff Nolan post.
"Company directors are increasingly leaving themselves at risk from prosecution by failing to comply with tightening regulation.
From the use of illegal software to the presence of copyrighted materials on the network and the failure to meet requirements under legislation such as Sarbanes-Oxley, directors are putting their necks on the line and their own staff aren't helping.
It seems end users will always be the weakest link in the chain – with illegal software a particular favourite among staff seemingly intent on landing their bosses in legal hot water.
John Lovelock, director general of the Federation Against Software Theft said: 'We would like employees to think carefully about downloading copies of software without paying for it. However, the responsibility for their actions can rest with the directors and officers of their organisation. Theft is theft and will be treated accordingly.'
Lovelock added: 'Corporate liability is something that management cannot afford to gloss over. It will come back to bite them.'
Similarly employees can undermine compliance at the press of a button..."
Read more in this article from silicon.com.
This post from The Accounting Blog via this Matt Homan post explains why hourly billing sucks:
"1) Customers hate it... The simple truth is that nobody likes hourly rates, except the CPAs and lawyers who charge them.
2) Total cost: unknown. With hourly billing the customer has no idea what their total cost will be- they only know they hourly rate...
3) "Berlin Wall" of communication. With hourly billing, people are reluctant to ask...questions because they know that the meter is always running"
Alternatives to hourly billing that I often use in my practice include:
Fixed or Flat Fee
Variations On Standard Contingency Fees
Discounted Hourly Fees
Retrospective Based on Value
explicated here; and
Equity Based Fees
"Business owners can generally offer two different kinds of employee stock option programs to their employees: incentive stock options and non-qualified stock options.
Incentive stock options allow employees to avoid paying taxes on the shares they own until those shares are sold. This provides a deferred-tax incentive for employees, which is another nice benefit. In some cases, the employee may also qualify for a long-term capital gains tax option.
Non-qualified stock options do not share the tax benefits of incentive stock options. However they do have the benefit of being more easily transferred to children than do their incentive stock option counterparts...
If you do decide to offer a stock option program for your employees, your first step should be to consult a professional financial advisor who can guide you through the process and make sure your programs conforms to federal and state laws."
From this Gaebler Ventures article.
"Whether you choose to use host-based disaster recovery (DR) software or hardware-based systems, you will need to be sure of your software licensing on both sides of the DR plan, well ahead of an actual disaster. Failing to ensure that you have the proper licensing could result in your DR system failing to function as expected, or in significant fines and other penalties. Many different factors come into play when discussing software for DR, which makes it an often-overlooked aspect of the DR planning process.
Get the appropriate licensing for backup/recovery facilities...
Find out licensing requirements of "standby equipment"...
Check licensing agreements for application software.."
Read more in this techrepublice article.
Posted by Anthony Cerminaro at 3/23/2005
"The innovative, high growth, R&D intensive biotechnology industry is especially reliant on skilled and experienced individuals to enable and guide biotechnology company development and commercial success. There is a need for individuals with skills and expertise in a wide variety of disciplines. Recruiters and job seekers will find this industry profile useful for developing an understanding of the biotechnology industry, where the opportunities lie, and how to capitalize on them."
From this post from about.com.
Posted by Anthony Cerminaro at 3/23/2005
"Along with the many benefits of open source...come a number of risks. Perhaps the most obvious risk is potential liability for intellectual property infringement. The typical open source project is a grass-roots effort that contains contributions from many people. This method of development can be worrisome from an intellectual property standpoint because it creates multiple opportunities for contributors to introduce infringing code and makes it almost impossible to audit the entire code base...The typical license form does not include any intellectual property representations, warranties or indemnities in favor of the licensee; it contains a broad disclaimer of all warranties that benefits the licensor/contributors.
Even if such representations and warranties or indemnity obligations existed in open source license agreements, it would be difficult if not impossible to recover against the licensor for having licensed infringing code. Many of the most prominent open source projects appear to be owned by thinly-capitalized non-profit entities that do not have the financial wherewithal in most cases to answer for a massive intellectual property infringement suit...
Open source licenses also do not contain the kinds of representations and warranties of quality or fitness for a particular purpose that commercial software vendors sometimes negotiate into agreements among themselves...Some open source software projects, such as the Linux initiative, have one or more stewards who monitor code quality and track bugs. Other initiatives, however, are really more the product of weekend and after-hours hobbyists and do not enjoy the same code quality and rigorous testing protocol. Without contractual commitments of quality or fitness, the licensee must accept the risk that the software contains fatal errors, viruses or other problems that may have downstream financial consequences.
Companies looking to build a business on open source software also need to consider the problems associated with creating derivative works. Some open source license forms, such as the GPL, require licensees to provide free copies of their derivative works in source code form for others to use, modify and redistribute in accordance with the terms of the license agreement for the unmodified program. This licensing term is advantageous for the free software community because it ensures that no for-profit company can "hijack" the code base from the community. On the other hand, this licensing term makes it very difficult for companies in the commercial software business to use such open source software as a foundation for a business. These companies must be concerned that their "value added" programs might some day be viewed as "derivative works" and need to be made available to the world in source code form for free."
From this ABA overview found via this extensive collection of open source resourcesfrom DennisKennedy.com.
"For years now adults have been unable to understand the teenage wonder, the bliss, the simplistic genius of the word 'like.' The valley-girl word that made the '90s great, that replaced 'said' and signaled hyperbole or understatement was a staple of our youths. Placed by many adults on the irreverence-o-meter at the same level as gum-smacking, it continues to ruin job interviews for many college graduates even to this day. However, the times appear to be changing: the upstart of a word 'so' actually seems to be encroaching dangerously on the territory of the once ubiquitous 'like.'"
Read more in this entertaining article by Princeton undergrad, Laura Berner.
"Every business needs a 'premarital agreement' that covers what happens when an owner wants out.
Many, if not most, LLC owners overlook a critical element of their operating agreement that can save them both money and angst: 'buy-sell,' or 'buyout,' provisions. When you have buy-sell provisions for your operating agreement, you and your co-owners can prepare for events that have been the downfall of more than a few successful small businesses -- namely, the death, divorce, bankruptcy or retirement of one of the owners."
Read more in this findlaw article.
"Growthink calls the first approach 'peeling back the onion.' In this approach, we start with the generic market (e.g., the coffee market) that that company is trying to penetrate, and remove pieces of that market that it will not target. For instance, if the company created an ultra high-speed coffee maker that retailed for $600, it would initially reduce the market size by factors such as retail channels (e.g., mass marketers would not carry the product), demographic factors (lower income customers would not purchase the product), etc. By peeling back the generic market, you eventually will be left with only the relevant portion of it.
The second methodology requires assessing the market from several angles to approximate the potential market share, answering questions including:
Competitors: who is competing for the customer that you will be serving; what is in their product pipeline; once you release a product/service, how long will it take them to enter the market, who else may enter the market, etc.
Customers: what are the demographics and psychographics of the customers you will be targeting; what products are they currently using to fulfill a similar need (substitute products); how are they currently purchasing these products; what is their degree of loyalty to current providers, etc.
Market factors: what other factors exist that will influence the market size - government regulations; market consolidation in related markets, price changes for raw materials, etc.
Case Studies: what other markets have experience similar transformations and what were the customer adoption rates in those markets, etc. "
From this BusinesKnowhow article by by Dave Lavinsky, President, Growthink.
Posted by Anthony Cerminaro at 3/20/2005
"A new law lets into the country an extra 20,000 foreign workers who earned graduate degrees here, but those receiving the additional work visas won't necessarily need to hold master's and doctoral degrees.
That's because holders of more than 20,000 of the 65,000 H-1B visas granted for fiscal year 2005 hold graduate degrees from American colleges and universities. And government authorities decided to designate 20,000 people from the original 65,000 as those covered by the law, which was enacted by Congress in December."
From this InformationWeek article.
"It's easy to neglect setting up a retirement plan when you own your own business. With so many existing administrative tasks--payroll taxes, health insurance benefits, bookkeeping--adding one more benefit may seem overwhelming.
But retirement creeps up on you much faster than you'd expect. Setting up a retirement plan is essential--and the sooner, the better.
What Are Your Options?...
Simplified Employee Pension) Plan...
Profit Sharing Plan...
Money Purchase Plan...
Paired Profit Sharing and 401(k) Plan...
SIMPLE (Savings Incentive Match Plan for Employees) Plan...
Pension (Defined Benefit) Plan...
Paired Defined Benefit and Defined Contribution Plan..."
Read more including the pros and cons of each option in this article from Forbes.com.
Interesting discussion going on about the concept of the embedded patent attorney as in this post from Matt Buchanan. I must take issue, however, with this assertion by Russ Krajeck that "the patent attorney has much more propensity than any other specialty" to become "embedded" in a client's business.
I agree with the position of Matt Buchanan that the concept of becoming embedded applies to other legal specialties. As a business and technology attorney who focuses on transaction work, becoming deeply conversant with my clients' businesses is what I do every day.
I was privileged to have been a guest and interviewed last week on SMB Trendwire: Audio Conversations with Small Business Experts. The topic of our conversation was the "The Well Utilized Business Lawyer." You may listen to me discuss legal issues important to small businesses and how and when to make effective use of a business lawyer as part of "the team" by clicking here.
This paper by Aaron Schiff "reviews the recent literature on the economics of open source software. Two different sets of issues are addressed. The first looks at the incentives of programmers to participate in open source projects. The second considers the business models used by profit-making firms in the open source industry, and the effects upon existing closed source firms. Some possible future research directions are also given."
This index from the Carnegie Library of Pittsburgh lists types of small businesses and a corresponding sample business plan, profile or book about the business with sources provided after each entry.
Via this post from Marcus P. Zillman.
Posted by Anthony Cerminaro at 3/17/2005
From a post by A VC:
"I sometimes do a class at NYU's Stern Business School called 'Venture Capital, When You Need It, When You Don't'. I make the point in this class that Venture Capital is the wrong source of capital for the vast majority of entrepreneurial ventures.
Here is the powerpoint I use when I teach the class. If you are thinking about raising venture capital, give this a read and think hard about it before you start the process."
Posted by Anthony Cerminaro at 3/17/2005
"Outside of lower costs, three other developments have helped make software as a service much more attractive. First, developers have created new applications that have been engineered from the ground up to be offered as a hosted service and even many existing applications have been re-engineered to make them more "hosting-friendly".
Second, the advent of XML and web services has made it easier for companies to integrate hosted applications and data into their own legacy systems. From a technical perspective, this has removed one of the last major drawbacks of hosted software. And finally, 10 years of exposure to the web has made many corporate managers much more comfortable with the idea of hosted-applications. Even many IT managers, who at first resisted hosted applications as a potential threat to their jobs and influence have now warmed up to hosted-apps as a way to quickly meet business unit needs without adding significant costs to their own organization. For many developers, selling a hosted software solution is now an easier and faster process than selling installable code.
On the strength of these developments, 2005 may very well turn out to be the year that software as a service goes from being an alternative means of delivering software to being the preferred means."
Read more in Burnham's Beat post.
What should every business plan include, no matter what?
"1. Specific milestones, with deadline dates, spending budgets and a list of the people responsible for them. I've seen this called 'weaving a MAT,' with MAT standing for 'milestones, assumptions and tasks.' That normally goes into Section 5, Strategy and Implementation. Make the responsibilities specific for specific people, and make sure every task gets assigned to a single person with a name and a face. This section must describe how these different milestones are going to be tracked and measured.
2. Real cash flow. Your plan should show cash flow--either projected or actual or both--month by month for at least 12 months. Show where you're getting money and how much, and show what you're spending the money on. This is cash flow, not just profit and loss, and you have to understand how different cash flow is from profits. Profitable companies go under all the time, but companies with positive cash flow can pay their bills.
3. Focus. A business plan should establish your company's priorities. Don't try to do everything, and don't try to please everybody."
From this entrepreneur.com article.
"Forecasting business revenue and expenses during the startup stage is really more art than science. Many entrepreneurs complain that building forecasts with any degree of accuracy takes a lot of time--time that could be spent selling rather than planning. But few investors will put money in your business if you're unable to provide a set of thoughtful forecasts. More important, proper financial forecasts will help you develop operational and staffing plans that will help make your business a success."
This article from entrepreneur.com explains how to build financial forecasts when you're just getting your business off the ground and don't have the luxury of experience.
"University ownership in software is generally covered by a university's copyright or patent policy. The disposition of title and royalties are complex issues and depend on the actual intellectual property protection for the particular software."
For more on how Stanford takes technology developed in their environment makes it available to the private sector or builds companies out of it read this article by Katharine Kufound via this post by Jeff Nolan.
"Avoiding lawsuits altogether...is the only way small businesses can protect themselves. Though there is no magic bullet to ensure that, there are steps business owners can take. Caffey proposed what he calls the 'STA method:' skills, tools and accountability.
Skills: Small business owners need to learn how to handle disputes more effectively, preventing the disputing party from suing in the first place. 'At the beginning of every lawsuit or potential lawsuit is a lost opportunity to resolve a basic dispute,' he says.
Tools: Small business owners should take advantage of tools available to keep them out of court, including contracts, mediation ('the greatest dispute resolution tool ever invented'), arbitration and warning notices.
Accountability: 'An accountable organization seeks business solutions to its business disputes and strives to improve its relationships with those who have a complaint,' rather than avoiding or denying such claims, Caffey says. It also refuses to see itself as a victim but rather takes responsibility for its own role in a dispute and seeks proactive ways to solve them, rather than just looking for someone else to blame. "
From this BizNewOrleans:article via this ESD post.
SWOT analysis takes a look at Strengths, Weaknesses, Opportunities and Threats....
Strengths: What things do you do very well that are important to your business? What would be the impact if you applied those strengths to tangential and complementary activities?...
Weaknesses: How important are they once you’ve identified them? How can you strengthen those areas? How can you isolate their impact so that while they exist, they do little or no harm? What might happen if you ignore them?...
Opportunities: Where are the low hanging fruit? Where might a modest improvement make a significant impact? What aren’t your competitors doing that you can for competitive advantage? What do your customers want that will improve their experiences with you? Can you exceed their expectations?...
Threats: What are the threats? What might their impacts be? Can they be avoided? At what cost? What if you ignore them? Can you achieve competitive advantage by preemptively addressing them?"
From this article by Frank Demmler.
"What is creativity? It's not the same as innovation. Creativity is the ability to generate appropriate, useful ideas that don't follow logically and analytically from the information available, It's the ability to know, in a complex world where most of the relevant decision-making information is unknown or unknowable, which ideas might work, might make sense. Innovation is the effective implementation of such ideas.
Both creativity and innovation are often the only ways to accomplish some of the most important value-imperatives in business:
Radically improving product or process quality, currency, design or throughput
Improving problem-solving or decision-making
Improving resource-use effectiveness
Improving new product development
Improving employee and customer satisfaction or motivation
Predicting the future"
Read more in this post from Dave Pollard in which "Dave looks at some accepted wisdom on the creative process, and adds some of his own."
Posted by Anthony Cerminaro at 3/14/2005
"The easiest way of developing a strong opening for your next presentation, talk, workshop, or meeting is simply to create a compelling lead that you can say in thirty seconds. If you can say it in twenty seconds, even better.
The lead should be a short description of your service, product, company, or cause that your grandmother could understand. It must be clear, concise, and compelling. The world’s greatest business communicators have their leads down cold. You can, too...by crafting a lead that answers the following four questions in thirty seconds or less:
1. What is my service, product, company, or cause?
2. What problem do I solve (or what demand do I meet)?
3. How am I different?
4. Why should you care?
Answering these questions will help you start strong while giving the rest of your presentation a direction."
From this AlwaysOn article.
Posted by Anthony Cerminaro at 3/14/2005
"Comparative advertising is an effective way to inform consumers about your product and how it compares to your competition. Competitors, however, are quick to respond to comparative advertising — no one wants the consuming public to think their brand is inferior.
Comparative advertising is entirely legal in the United States, but, as with any advertising, it cannot be false. The requirements of truthful comparative advertising are designed to protect the consuming public and ensure they can make informed purchasing decisions."
This article from Goodwin Procter LLP via Mondaq "will help you stave off challenges to your advertising or, if avoidance is not possible, to prevail in a challenge."
"Heightened concerns over security are leading many large companies to rethink the legal terms and conditions on which they purchase software. It has been fairly standard in the software industry to exempt vendors from liability for damages caused by flaws in their products.
For instance, vendors are contractually exempted from responsibility for damages that result from computer crashes or virus attacks that exploit faults in their software. Right now the push is coming from customers but some commentators suggest that there may be a need for regulation in the area.
Software vendors such as Oracle Corp., say they hope the industry can avoid regulation by responding better to customer demands for security. In the U.S., the changing attitudes are attributed to the tough new accountability and privacy rules such as Sarbanes Oxley and health information privacy."
From this Laws of .Com article.
"The first way to limit the IP costs is to be very judicious with the protection. For example, if a software program is to be licensed only in the form of object code, there may be many inventions that lie beneath the surface that cannot be detected by a competitor.
These ideas are best kept as trade secrets and not disclosed for two reasons. The first is that the disclosure has the effect of educating a competitor in how the product is built. The second reason, which is even more important, is that even if there was protection on the idea, it would never be able to detectable when a competitor used the idea. Detectability is one of the key parameters in whether an idea is appropriate for patenting.
The second reason is that in selecting which portion of a product to protect, it is not always necessary to protect every detectable idea. Often, there are one or two key ideas that any infringer would have to violate to copy the bulk of the product. Even if there are many patentable innovations in the product, there may be just one or two ideas that would be the highest priority.
Having whittled down the possible ideas to one or two patentable ideas, the next step is getting the patents issued.
There are several things that can reduce the cost of having patent issued."
Read more in this post from Anything Under the Sun Made By Man.
From the second installment of re:invention blog's 10 Tips for 10 Million WomenTM Saturday Feature, spotlighting woman entrepreneur, Debby House, Founder and CEO of The Adare Group (Chicago, IL), a strategy and profitability consulting firm comes these ten tips:
1. Solve your customer's critical problems...
2. Be externally focused...
3. Make quick, tough decisions...
4. Measure actions that generate profits...
5. Don't let the stock market run your company...
6. Innovate, Invest and Inquire
- Innovate: Creativity is cheaper in the long run than conformity
- Invest: It is risky but it generates long term profits
- Inquire: Curiosity produces innovation and reduces risk
7. Highly value customized products and services...
8. Only real profits pay the bills...
9. Don't let processes get in the way of profits...
10. Everyone must produce profits..."
"I can’t resist mentioning that Jesus understood the calibration of independence [of corporate directors] far more clearly than do the protesting institutions. In Matthew 6:21 He observed: “For where your treasure is, there will your heart be also.” ...
Measured by the biblical standard, the Berkshire board is a model: (a) every director is a member of a family owning at least $4 million of stock; (b) none of these shares were acquired from Berkshire via options or grants; (c) no directors receive committee, consulting or board fees from the company that are more than a tiny portion of their annual income; and (d) although we have a standard corporate indemnity arrangement, we carry no liability insurance for directors. At Berkshire, board members travel the same road as shareholders.
Charlie and I have seen much behavior confirming the Bible’s “treasure” point. In our view, based on our considerable boardroom experience, the least independent directors are likely to be those who receive an important fraction of their annual income from the fees they receive for board service (and who hope as well to be recommended for election to other boards and thereby to boost their income further). Yet these are the very board members most often classed as “independent.”
Most directors of this type are decent people and do a first-class job. But they wouldn’t be human if they weren’t tempted to thwart actions that would threaten their livelihood. Some may go on to succumb to such temptations. Let’s look at an example based upon circumstantial evidence. I have first-hand knowledge of a recent acquisition proposal (not from Berkshire) that was favored by management, blessed by the company’s investment banker and slated to go forward at a price above the level at which the stock had sold for some years (or now sells for). In addition, a number of directors favored the transaction and wanted it proposed to shareholders.
Several of their brethren, however, each of whom received board and committee fees totaling about $100,000 annually, scuttled the proposal, which meant that shareholders never learned of this multi-billion offer. Non-management directors owned little stock except for shares they had received from the company. Their open-market purchases in recent years had meanwhile been nominal, even though the stock had sold far below the acquisition price proposed. In other words, these directors didn’t want the shareholders to be offered X even though they had consistently declined the opportunity to buy stock for their own account at a fraction of X.
I don’t know which directors opposed letting shareholders see the offer. But I do know that $100,000 is an important portion of the annual income of some of those deemed “independent,” clearly meeting the Matthew 6:21 definition of “treasure.” If the deal had gone through, these fees would have ended. Neither the shareholders nor I will ever know what motivated the dissenters. Indeed they themselves will not likely know, given that self-interest inevitably blurs introspection. We do know one thing, though: At the same meeting at which the deal was rejected, the board voted itself a significant increase in directors’ fees."
From the Berkshire Hathaway annual letter to shareholders available here in PDF format which is worthwhile reading in its entirety.
"Small and mid-sized businesses (SMEs) are poised to take up outsourcing and offshoring in increasing numbers, according to industry group the National Outsourcing Association (NOA).
Sanj Prabhakar, SME director of the NOA, said in the past most SMEs haven't had the 'internal expertise' to pursue outsourcing, especially to an offshore location. 'I'm talking about having full time employees to manage such an operation.'
Yet recently the pool of consultants with offshoring experience who are available to guide SMEs through the process has grown and the price model has come down in scale so smaller outsourcing deals can be accommodated, Prabhakar explained. "
From this post from silicon.com.
"March 10th was the 90th day following President Bush's signature to the Veterans Benefits Improvements Act, which among other things required employers to post notice about employees rights under the Uniformed Services Employment and Reemployment Act, better known (thankfully) as USERRA.
One of its requirements is that on the 90th day following the signing of the bill, employers are to post a USERRA notice, which the DOL has just in the nick of time posted on its website. For Secretary Chao's comments on the new posting check out the DOL news release."
For links to the form of notice and the DOL press release, visit this post by Michael Fox.
"You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed."
Read more in this essay by Paul Graham via this Escape Velocity post.
"It's a chilling thought what if you complete your tax return and discover that you owe the government much more than your small business can afford?
If you find yourself in this predicament, you have two problems. First, you have to find a way to pay the IRS. Second, you have to figure out what's gone wrong in your business especially with your cash flow and fix it."
Read more about your options inthis ABC News story found via this Law & Entrepreneurship News post.
"For business owners and managers, delegation is an essential skill, and a leadership responsibility. The hazards of doing everything yourself can include burnout and missed deadlines. You may get stretched too thin, or find that you don't have all the skills needed for the job. That's when it's time to delegate.
Delegating multiplies your effectiveness, so you can use your time and talents where they make a difference. Besides streamlining your work and saving time, delegating teaches you to communicate persuasively, supervise and train, and expand your sphere of influence. It means building and maintaining a team....
You can help your staff stretch their talents, and grow through teamwork, new skills, and problem solving. Delegating gives more people a stake in the outcome. Delegation is more than hiring and managing people---it is guiding, inspiring, and motivating them. Here are six steps for doing it superbly.
1. Select people for the job, and motivate them...
2. Match the person to the task...
3. Define project tasks and communicate them clearly...
4. Track progress, give feedback, and help people solve problems...
5. Allow for creativity and variations in work style...
6. Provide incentives and show appreciation...
Throw a party...at project completion. Send personal notes of thanks and say 'Thank you for a job well done.'"
From this excellent article from businessknowhow.com that is well worth reading in its entirety.
"The responsibility for inventing new products is shifting from corporations to entrepreneurs. After peaking in 2000, industrial R&D spending began a three-year slide, slipping from $185 billion to $173 billion, and R&D Magazine projects the downward trend to continue this year. Large companies, whose obsession with short-term results has led them to unburden themselves of in-house R&D, have begun formal efforts to scour small businesses for innovation.
As a result, inventors and invention houses, such as Invention Science and NineSigma, are harnessing the web not only to pool creativity but also to get products to market faster than ever. There is even evidence that small outside firms may simply be better at inventing the new new thing: Consulting firm CHI Research of Haddon Heights, N.J., which tracks innovation, found that among 1,270 'highly innovative' firms - those with 15 or more patents in the previous five years - the number of small businesses rose from 33% in 2000 to 40% in 2002. While the era of Alexander Graham Bell may be gone - the Census Bureau eliminated 'inventor' as an occupation in 1940 - never has there been more opportunity for entrepreneurial inventors and inventive small businesses. "
From this Fortune Small Business report via this Business Opportunities Weblog post.
"Elon Musk will be keeping his fingers crossed later this month when his latest venture, a low-cost rocket called Falcon I, launches from Vandenberg Air Force Base in California.
Musk, a 33-year-old South African former internet entrepreneur who has a physics degree from the University of Pennsylvania, says that launch costs are a major reason why humanity has not yet successfully exploited space. 'At the current rate, it will never happen,' he says.
Musk created and bankrolled Space Exploration Technologies Corp (SpaceX) three years ago, after selling his stake in Paypal, the online payment system, to internet auction house eBay for hundreds of millions of dollars.
With his first rocket, Falcon I, each launch costs $5.9 million to put a 520-kg payload in low-Earth orbit. A bigger medium-lift rocket, Falcon V, is expected to put payloads in geosynchronous orbit for $15.8 million, compared to $60 million for Boeing’s Delta medium-lift launch rocket."
From this Physics Today article.
In honor of International Women's Day, Global Entrepreneurship Monitor has released the GEM 2004 REPORT ON WOMEN AND ENTREPRENEURSHIP, stating:
"GEM is the voice of entrepreneurial research, policy and impact across the globe. The showcase event in the GEM yearly cycle is the annual Launch Conference which introduces the research findings of the previous year. This year's Launch Conference, held in London on 20 January 2005, attracted an audience of some 200 business people, entrepreneurs, policymakers, diplomats, journalists and academics from around the world."
Some of the key findings in the report include:
"In 2004, GEM estimated that about 73 million people are involved in starting a new business in the 34 countries that participated in the study. Of those, about 30 million are women. The average level of female total entrepreneurial activity (TEA) rate across the 34 GEM countries varied from 39.1% in Peru to 1.2% in Japan.
In every country in our study, men are more active in entrepreneurship than women. The largest gap occurs in middle income nations where men are 75% more likely than women to be active entrepreneurs, compared to 33% in high-income countries and 41% in low-income countries.
Overall, opportunity is the dominant motivation for women’s entrepreneurship, similar to men. Nonetheless, many more women than men are involved in entrepreneurship because of the lack of alternative job opportunities.
In low and middle income countries, the peak years to become involved in entrepreneurial activities for women are ages 25-34. In high income countries, on the other hand, the peak years for women are ages 35-44.
In low income countries, the majority of entrepreneurially active women (54%) have not completed a secondary degree. In high income countries, on the other end, women with post secondary education are the most likely (34%) to start a new business.
As in the case of men, and regardless of per capita income, the largest majority of women involved in starting a new business hold other jobs.
Regardless of per capita income, a strong positive and significant correlation exists between knowing other entrepreneurs and a woman’s involvement with starting a new business."
The Launch agenda and speaker's presentations are available for downloading by following this link.
For you literary buffs:
"Open Source Shakespeare was created to be the best free resource for scholars, thespians, and Shakespeare lovers. It includes the 1866 Globe Edition of the complete works.
OSS will not replace the expensive, subscription-only sites at libraries or research institutions - though many features are comparable:
Power. The advanced search will pinpoint the passages you're seeking.
Flexibility. The features are designed to accommodate multiple ways of searching and viewing the text.
Friendliness. You need not have a degree in computer science to find this site useful, as it's designed to be easily understood and navigated.
Openness. You can download the code and the database that runs this site, and use them in your non-commercial project as you see fit. As long as you link to Open Source Shakespeare on your site (if you post your project to the Web), you're welcome to use any or all of OSS. "
"The Wisconsin Angel Network (WAN) has launched its website, www.wisconsinangelnetwork.com with the introduction of a resource page for angel investors.
The page offers links to various sources of information specific to early-stage investing, including starting an angel network, network best practices, investment trends, seed-stage research, angel tax credits and news sources. "
From this Daily Press - Ashland, Wisconsin article.
Mark Leslie, Founder & former CEO/Chairman, Veritas, made a presentation on "The Sales Learning Curve - Why it Always Takes Longer and Costs More" at the Columbia Tower Club on January 28.
Mark, currently a professor at Stanford Business School, is working with Altus Alliance to study the stage of growth between new product release and the revenue inflection point - a critical point in the growth of any business.
Mark Leslie's presentation is available here in PDF format.
Via this NW Venture Voice post that also contains recommendations on other good reads for those considering starting a company.
"Practical suggestions from University of California psychologist Sonja Lyubomirsky on what to do to have a more satisfying life.
1. Count your blessings. Write down once a week three to five things for which you are thankful.
2. Practice acts of kindness to both friends or strangers that makes you feel generous and capable, and gives you a greater sense of connection with others.
3. Savor life's joys. Pay close attention to momentary pleasures and wonders.
4. Thank a mentor. Express appreciation to that someone who guide you at life's crossroads.
5. Learn to forgive. Let go of anger and resentment to the person who has hurt or wronged you. That bolsters positive feelings about your past and gives you peace of mind.
6. Invest time and energy in friends and family. Strong personal relationships have the biggest effect with your satisfaction in life.
7. Take care of your body. Get plenty of sleep and exercise.
8. Develop strategies for coping with stress and hardships. There is no avoiding hard times. Religious faith can help you cope."
From this post from Reflections of a Business-Driven Life.
"Franchises are based on the belief that an already-successful business operation can be duplicated. The classic franchise pitch is: 'We have a business system, concept and product line that is tried and tested. If you run the business according to our proven system, you will be successful.' The franchise delivers a product line (or line of services) that has already distinguished itself from its competition.
The franchise has already determined the appropriate marketing and management structure to deliver the product into your community.
The franchiser has also determined the requirements for success and has ascertained that you can deliver the investment necessary for success. By the time your franchise opens, many of the uncertainties of business start-ups have been eliminated.
You have enough capital. You have a successful business plan. Your product has demonstrated acceptance in the market and you have a proven marketing strategy. If you stumble along the way, you have management support to help you identify the problem and make appropriate corrections. "
From this franchisetrade.com article.
From the fhe first installment of re:invention blog - 10 Tips for 10 Million Women TM Saturday Feature:
"Each weekend we will feature a woman entrepreneur and her personal 10 tips for success. We hope this feature will be a powerful example of "women helping women win." The women entrepreneurs you'll read about here will lead different types of companies and have different personal experiences. But they all have one thing in common: they are fearless women entrepreneurs who are willing to share specific, tangible ideas that you can put into practice today.
We're on a mission at re:invention to build more women-led million dollar businesses. We think 10 Tips for 10 Million Women is a unique way - not only to honor women - but to provide women with the practical business and marketing advice that is necessary to turn a dream into a profitable and actionable reality."
Posted by Anthony Cerminaro at 3/07/2005
"Last year the trend for Linux adoption was more about education and research. This year the trend will be about implementation. Executives have done their homework and know about the many risks and rewards of implementing an open-source system."
Access the resources in this edition of Executive Guide from SearchCIO.com for the latest analyst predictions, case studies and more to help you make smart open-source investment decisions.
Posted by Anthony Cerminaro at 3/07/2005
According to this article from powerhomebiz.com, these are the common kinds of startup expenses that most small businesses face:
Research and development costs.
Business Plan Preparation.
Product Development and Beginning Inventory.
Advertising and Marketing Promotion Expenses
Cost of Financing
Remodeling and Decorating.
Fixtures and Equipment.
Licenses and Permits.
Cost of Web Site creation..
Via Small Business Brief post.
"I think the fundamentals of how businesses get built and compete with one another haven't changed. In fact, rather than overcomplicating or starting from scratch, one can make sense of today's tech market dynamics and determine the right strategy by following simple logic based on old-fashioned fundamentals.
THREE STEPS. Over the years, I've used a framework articulated by two longtime colleagues, Rich Tong and John Zagula, and found it very effective. Tong and Zagula have captured this framework in their new book, The Marketing Playbook: Five Battled-Tested Plays for Capturing and Keeping the Lead in Any Market. It's based on years of personal and collective experience across a multitude of changes in both technology and business. I will borrow liberally from its 'playing field' concept here.
The concept involves understanding today's tech market via a simple analysis. And I mean simple. It has only three parts:
A: The way things are.
B: The way things could be.
C: What needs to happen, or the gap you need to cross, to get there.
Businesspeople often neglect to do their ABCs -- or to do them often enough to keep current. That's hardly surprising, given how cluttered and complex the playing field seems nowadays. Yet a quick ABC analysis can save a lot of wasted effort and help zero in on the right strategy. "
From this businessweek.com article by Brad Silverberg, a founder of Ignition Partners, a venture-capital firm based in Seattle.
This Entrepreneur'sGuide to Software from Entrepreneur.com covers the gamut of software tools that will help make a small business more productive. Featured are more than 170 applications designed strictly for business users, including accounting programs, backup tools and marketing-related software.
Via this post from ESD.
"All too often startups use business development as a catch all group for smart people who may not fit elseware. For that reason the function of business development has been greatly diminished in many companies. The effective structure of a business development organization is one that aligns it with the P&L objectives of the larger organization with regard to vertical markets or specific technology/product areas.
Finally, business development shouldn't be the place you put the fresh MBAs, this function should be the home for seasoned executives who understand how markets work and have the contacts throughout the ecosystem to make things happen."
From this Jeff Nolan post.
"Emerging markets have a reputation for volatility that leads many companies to overestimate the risk, causing them to reject good investment opportunities and to underestimate the performance of existing businesses. While individual markets can be highly volatile, research shows that a diversified portfolio of investments in them can have risk levels comparable to - or even below - those of more developed markets.
By taking a portfolio approach to investments in emerging markets, companies can diversify away the risk. "
From this McKinsey Quarterly article. (free registration required).
From this findlaw article viathis Stark County Law Library Blawg post.
Small-business owners need to be tax wise throughout the year, not just during tax season. This checklist from NFIB can help you take advantage of all the deductions you're legally entitled to. Many of these items require special consideration when deducting, so always consult with your accountant or other tax professional when preparing tax forms.
You cannot make this stuff up:
"Four Connellsville-area men are accused of stealing a Pygmy goat, killing it and trading its meat for crack cocaine...
Police said charges of theft, receiving stolen property, cruelty to animals and criminal conspiracy were filed Tuesday with Bullskin Township District Judge Robert Breakiron...
Police said Albright removed the goat from a pen with a piece of rope, dragged it to a patch of woods and tied it to a shrub.
Albright and Charles Smith Jr. allegedly beat the animal to death by striking it on the head with a hammer and/or a steel pipe.
Police said the goat was taken to the Smith residence where it was skinned by Fisch and the elder Smith. According to witnesses, the meat was traded to a local drug dealer for crack cocaine."
From this Pittsburgh Tribune Review story.
"Where a con man deceives a bank customer into investing his life savings in a fraudulent scheme, the bank that held the customer’s account presumably has no liability whatsoever for the customer’s foolhardy actions. But with phishing there is one key difference. That is, the con man (i.e., the phisher) may be exploiting the security choices made by the spoofed company. In other words, the approach to information security taken by the spoofed company may somehow contribute to the success of the attack.
Role of Information Security
The law governing a company’s obligation to implement information security usually requires a process-oriented approach to security, based on an ongoing risk assessment. Thus, in light of the prevalence and the significance of phishing attacks, companies likely to be affected need to expressly consider the threats that such attacks pose, and their anticipated impact. Based on the results of this risk assessment, such companies should design and implement an information security program to manage and control the risks posed by phishing attacks identified during the risk assessment. For companies at risk, a failure to expressly consider and address phishing attacks within the overall context of their information security program may well be considered as a failure to comply with its legal obligations."
From this Baker and McKenzie article.
"Whether your start-up costs total $5,000 or $500,000, you'll need solid numbers. The challenge is finding information that's credible and reliable. The good news: You can get hard data, plus valuable insight, from a variety of sources. Here are eight places to explore:
1. People in the business...
2. Sources of supplies...
3. Trade associations...
4. SCORE. The Service Corps of Retired Executives...
5. Business start-up guides...
6. Franchise organizations...
7. Business start-up articles...
8. Business consultants..."
From this entrepreneur.com article via this post from ESD.
"Supervisors, managers, executives and even human resources staff often engage in behaviors that, unwittingly, lead employees to feel misled, lied to or otherwise unfairly treated. In doing so, they increase the likelihood of litigation. Ten common mistakes increase the likelihood of employee lawsuits and financial exposure.
1. Forget About Training...
2. Disregard Company Policies...
3. Shoot From the Hip...
4. Motivate Poor Performers With Raises and Bonuses...
5. Criticize the Person [rather than the performance]...
6. Ignore Problems...
7. Put Nothing in Writing...
8. Understand That Boys Will Be Boys...
From this workforce.com article by Maxine Newhauser via this post onGeorge's Employment Blawg.
"Employers statewide will be impacted by a recent ruling from the Pennsylvania Commonwealth Court, holding that employers cannot have non-lawyers represent them at Unemployment Compensation proceedings...
Despite a well-reasoned dissent that pointed out the flaws in the majority's opinion, including a double standard for claimants and employers, the ruling stands that employers now may not use non-lawyers to represent them in unemployment compensation hearings. This will require many employers to change their practices and make the decision either to run up costly attorney’s fees in defending against UC claims, or forego fighting them altogether.
On February 14, 2005, the Department of Labor & Industry expressed its frustration with the Harkness decision's potential to complicate the unemployment compensation claim process, and announced that it was appealing the Harkness decision to the Pennsylvania Supreme Court. Stay tuned for a decision from the state’s highest court."
From this Greater Valley Forge HR Law Link post.
The owner of a family business, much like a parent, is part teacher. "In order for a business to thrive into a new generation, philosophies, business practices and experiences must be passed along to employees. And if the employees are also the owner’s children, the legacy of the family business becomes fully intertwined with the family’s own heritage...
In successful succession planning, an owner must totally divorce him or herself from family issues and keep a firm grip on the main objective: preserving the business. The process begins by finding the answers to three very important questions:
1. Who? Consider first who might be best suited for the job before factoring in any emotional issues. If only family members are considered, for example, look first to see who has the most aptitude and interest. If a surviving spouse would be considered, how active has he or she been in the business? Are there key employees or non-family members to consider?
2. When? Does the owner plan to retire or does he or she simply want to prepare for disability or death? Does the owner want to gradually cut back on any or all aspects of the business?
3. How? Is a steady stream of income needed to fund retirement? Can the new owner or owners finance the transfer?
From this edition of Northeastern University's Family Business Quarterly
"An enterprise would be well positioned to benefit from innovation if it takes into consideration from the initial stage of the new product development process the full range of IP issues. This is true whether the decision to innovate is taken as part and parcel of the overall business strategy, one-off development of a new idea, or as a reaction to developments in the marketplace."
This article from WIPO provides a good overview of the full range of such IP issues as well as the role of IP in new product development, concluding:
"Intellectual property rights can effectively be used to facilitate a successful innovation. Innovative technologies stand a better chance of successfully reaching the marketplace if IP is used strategically. Gauging the importance of IP in innovation ,by merely focusing on patents as input and/or output of innovation, does not do justice to the significant role that can be played by the other tools of IP. A broader approach to the contribution of IP in innovation is therefore needed.
IP also plays an important role in safely navigating the valley of death. It provides access to financing and technical facilities. In addition, IP provide a strong negotiation position when it comes to entering into and maintaining business partnerships."
Via this Information Policy post.
Posted by Anthony Cerminaro at 3/01/2005