Four Practices for Great Performance

From an HBS Working Knowledge article:

"Experts and executives agree that successful fulfillment of individuals' performance expectations hinges on managers' ability to apply four practices:

1. Involve employees...
2. Focus on achievability...
3. Build measures that help meet goals...
4. Tap into employees' deepest motivations...."

Via BusinessPundit.

The Importance of Awareness

From a post by Mtthew Tobias on VentureBlog:

"I have run into an above average number of start-up teams that are stunningly unaware of their own markets, competition, and strengths/weaknesses as a team.

Let me be even more specific. I believe a heightened sense of awareness is a critical sucess factor for a CEO (and the whole start-up team in fact). The CEO must be aware of and have thought through every major issue in the company and market."

How to Do Business with Uncle Sam

This article by George A. Cloutier from BW Online explains:
"For many entrepreneurs, an impenetrable bureaucracy and time-consuming paperwork rule out any thought of bidding for government contracts. That need not be the case "

Consider an SBA 504 Loan

This article from BW Online explains:

"The 504 loan program is designed to help healthy small businesses looking to expand. It can also be used by seasoned entrepreneurs or those with industry experience who want to buy a business. Proceeds from a 504 can generally be used for fixed assets with a long life, such as land, buildings, or machinery.

A 504 is really two loans. The first, from a bank, is usually for 50% of the loan amount. A further 40% comes from a nonprofit community development corporation (CDC). The borrower puts up the remaining 10%, hence the common shorthand 50-40-10."


7 Types of Leadership Stories

This post from Good Morning Thinkers! elaborates on seven types of stories used by executives in leading their charges. The story types, taken from the book, "Squirrel, Inc.," by Convergence 2004 keynote speaker, Steve Denning, are as follows:

Sparking Action.
Communicating Who You Are.
Transmitting Values.
Fostering Collaboration.
Taming the Grapevine.
Sharing Knowledge.
Leading People into the Future.

Pioneer Entrepreneurs

Pioneer Entrepreneurs is a collaborative effort described as:

"... a source for connections and conversations that help growing companies make better business decisions. The services, content, and forums we develop focus on the development of entrepreneurial thinking and decision-making, particularly in regard to adaptive strategy and entrepreneurial finance. "

Inventables: Inspiration for new product developers

From the Innovation Weblog:

"I was recently alerted to a neat new product development resource called DesignAid from Inventables. The company describes DesignAid as a hands-on 'magazine' -- actually more like a kit of unique materials and technologies -- that helps to spark creative new product ideas. Inventables also provides subscribers with access to an online database that contains more information on each new material and technology.
I'm not trained in new product development, but it sounds like this may be a worthwhile resource!"


Setting up a crisis communications center

From TechRepublic:

"Reestablishing your organization's IT capabilities takes ample planning before a disaster or a crisis happens. Here's how to plan for putting together a crisis communications center when you need to connect your business with the rest of the world."

Startup Company Valuation Model

From Paul Allen:

"This model explains a simple way to value a start-up company when working with investors. It is provided courtesy of Joe Ollivier of First Capital Development, a private investment and hard money lending firm based in Provo, Utah. "

Cool Site: Oxymoronica

For word lovers, like me, a fun site to check out is Oxymoronica:

"Oxymoronica, n., A compilation of self-contradictory terms, phrases, or quotations; examples of oxymoronica appear illogical or nonsensical at first, but upon reflection, make a good deal of sense and are often profoundly true."

For example:

"You can't make anything idiot proof because idiots are so ingenious." Ron Burns

"Nolan Ryan's pitching much better now that he has his curve ball straightened out." Joe Garagiola

"You'd be surprised how much it costs to look this cheap." Dolly Parton


Technology Transfer Overview

This is the summary of an article from Angel Investor News.com by Behfar Bastani, Evelyn Mintarno and Dennis Fernandez that provides a good overview of the tech transfer process:

"Universities produce a large amount of groundbreaking inventions every year and are among the best sources of intellectual property (IP). The growing portfolio of companies who have successfully utilized university technology suggests that benefits may be gained from an insight into the nature and process of university technology transfer.

We present an overview of university tech transfer and approaches for finding and accessing university technology, point out potential pitfalls for a technology company looking to bring the power of university research to fruition in its products, and illustrate typical licensing terms and different types of licenses."

Seven Website Legal Pitfalls

From Businessweek.com comes this excerpt from the Upstart Small Business Legal Guide by Robert Friedman:

"The seven legal pitfalls to having your own web site are as follows:

Pitfall #1. You become subject to trademark and copyright infringement lawsuits for using audio and video content that you do not own or have the right to use in the design of your site.

Pitfall #2. You don’t have contracts providing that you retain ownership of graphic, development, editorial, and computer-programming material created by your employees and freelancers.

Pitfall #3. You become subject to lawsuits for defamation and for copyright and trademark infringement on the basis of statements made and actions taken by bulletin board users. Site owners that have policies of not editing, monitoring, or controlling the content of their bulletin board services are held less liable than those who monitor the content of their services.

Pitfall #4. You permit others to sell products from your site without agreements setting forth responsibilities, warranties, and indemnification provisions that protect you from product liability, tax liabilities, and third-party claims. Verify that your product liability insurance policy covers online sales.

Pitfall #5. You use e-mail addresses in violation of consumer privacy rights.

Pitfall #6. You have no agreements with purchasers, advertisers, and users specifying the law and jurisdiction that will apply to actions involving the site.

Pitfall #7. You become the target of lawsuits by your employees for invasion of privacy for reading their e-mail. The e-mail policy should be part of the company personnel manual (see the form at the end of this chapter). It should state that the company reserves the right to access and disclose all messages sent over its electronic mail system for any purpose. A message should also be displayed on the e- mail home screen reminding employees each time they use the system that it is not intended for personal messages. The key factor is to establish that the employee does not have an expectation of privacy."

Ten Employment Mistakes Plaintiffs Lawyers Hope You Make

This article by attorney Ron Lee states:

"There are a number of specific mistakes that arise time and time again in the workplace – and that are subsequently replayed in the courtroom...the kinds of mistakes that employers often make that plaintiffs’ lawyers can use to their advantage, even in situations where a manager or supervisor acted with good intentions." His list:

1. Bad policy management.
2. Lack of proper training, resources, and tools for managers and supervisors.
3. Lack of clarity.
4. Poor recordkeeping.
5. Lack of objectivity and patience.
6. Acting in a way that can be seen as punitive.
7. Failure to guard against retaliation claims.
8. Improper handling of terminations.
9. Lack of thoroughness and follow-through.
10. Overloaded managers and supervisors.

Cashing that VC Check

This post from Steven Bayle outlines the steps involved in obtaining that elusive check from the venture capitalist. He divides his list into phases:

Phase 1 - getting the first meeting
Phase 2 - winning over the partner
Phase 3 - the partners' meeting
Phase 4 - due diligence
Phase 5 - the term sheet
Phase 6 - the closing

The Platinum Question

From the book How to Win Customers and Keep Them for Life by Michael Leboeuf:

A young boy entered a drugstore phone booth and the druggist overheard the following conversation:

"Hello, is this the Smith residence? ... I would like to apply for the opening you have for a gardener. ... What's that, you already have a gardener? ... Is he a good gardener? ... Are you perfectly satisfied with all of his work? ... Is he not doing anything that you would like to have done? ... Do you plan on keeping him? ... I see ... Well, I'm glad you're getting such excellent service. Thanks anyway. Bye."

As he left the phone booth the druggist remarked, "Johnny, I couldn't help overhearing your conversation. I know it's none of my business, but aren't you the Smiths' gardener?" To which Johnny replied, "That's right. I just called to find out how I'm doing."

Via the StoryBlog


Fighting Unfair Price Competition

This post from A VC explains some of the commercial options open to a growing startup when faced with potentially unfair pricing from a larger competitor.

In addition to the options outlined, in a proper case, legal action or a viable threat of same could be another option to consider.

Tom Peters Manifesto : This I Believe

From ChangeThis.com:

"Tom Peters is back with more Big Ideas for your job, your company, and your life. The marketing and strategy guru holds forth on why audacity matters, why women are the future of leadership, and why diversity is crucial to business success. Those who have never read Tom will find an excellent primer here; those well-versed in Peters' ideas can get up to speed on his latest thoughts."

The manifesto in PDF format is available here.

The ABC's of Startup Debt Financing

This article by William Payne from BusinessWeek Online explains:

"Securing the capital to push a high-growth startup to the next level can be tricky and confusing. Here is an expert analysis of the options."


Crafting a Reseller Agreement

This post by Steven Bayle gives a good overview of some of the important issues involved in negotiating a reseller agreement from the viewpoint of the reseller. Steve recommends that you pick up a copy of Getting to Yes by Roger Fisher of the Harvard Negotiation Project to help with negotiation.

His "...other recommendation is that you have a very good lawyer or preferably law firm, with experience and expertise negotiating these types of agreements."

Another nugget from the article with which I wholeheartedly agree:

"My attitude towards contracts is that they are a form of insurance policy. The best contracts should never have to come out of their file folders. But if there is a problem between the parties, you are going to have to dig out that contract that you may have signed months or years before. So when you craft the contract, think about where the points of failure might occur and make sure you have the right contingencies in place."

Managing Software Development Projects

This post from Rangachari Anand's Coral Fringe blog (via StartupSkills.com) provides a "from the trenches" view of managing software development in a startup company.

Participating Preferred Explained

This post from Brad Feld identifies "participating preferred as a maligned and typically hotly negotiated issue in many venture capital investments."

The article explains from a broad perspective "the notion of participating preferred, how it works, and its financial and emotional impact on a deal."

The post points out the complications that can arise in subsequent financing rounds and how features and variations such as the "cap on the participate" (also known as a "kick-out feature.") come into play.


How to Buy a Business in 10 Steps

In this article, I outline the process involved in purchasing a business in a privately negotiated transaction. The full article is available here

The ten steps are:

1. Assemble a team of experienced advisers.
2. Determine the type of business to buy.
3. Find a business for sale.
4. Conduct a due diligence investigation.
5. Value the business.
6. Make an offer.
7. Negotiate definitive documentation.
8. Arrange financing.
9. Satisfy conditions to the closing.
10. Close the transaction.


Why VCs Might Pass on Your Deal

Serial VC-backed entrepreneur, Steve Bayle, offers in this post his list of why VCs may pass on your deal. My take of his list is as follows:

1. Market is too small/Business can't grow big enough, fast enough.
2. The business model doesn't scale.
3. VC's are reluctant to invest in a service business.
4. VC's are afraid of consumer businesses.
5. Your product is nice to have, not a need to have product.
6. Your business in not ready for VC investment
7. No barrier to entry/no sustainable competitive advantage.
8. Entrenched competition
9. Area is overfunded already
10. Looks like a lifestyle business
11. Too many moving parts
12. Flawed business model
13. Weak management team
14. Unclean IP rights
15. We already have an investment in the same area
16. You are asking people to change their behavior

The Good, The Board, and The Ugly

From the OnlyOnce blog comes this advice for the entrepreneur regarding building and dealing with a board of directors:

1. Building a board can be one of a CEO's greatest trump cards.
2. Don't think of managing your Board as a burden.
3. Figure out how to work differently with investor directors and outside directors.
4. Sit on a board yourself.

This post is also contains links to other perspectives on the subject each of which is worth reading.

The Financial Benefits of Going Public

This article by Theodore F. DeStefano for E-Commerce Times stresses the benefits of a small-cap company going public:

"An alternative you should consider is an initial public offering (IPO). How will an IPO solve your money problems? Actually, it is generally far easier for a publicly-traded company to obtain capital than a private company. Once you go public, a universe of lenders and investors opens up to you."

The Pros and Cons of a Corporate Investment

Entrepreneurs looking for capital sometimes turn to likely customers, suppliers or other established companies for investments. VC Mike Docherty suggests here that companies are increasingly interested in making such investments. This post by Steve Bayle, who founded three venture-backed companies, cites these as the pros and cons of such investments:


strategic value
lower price sensitivity
faster closing time
no board seat required


won't act as lead investor
shallow pockets
potential changes in control
high maintenance
capping your valuation
cutting off your ability to do business with their competitors
VC don't like em

He concludes:
"Like most decisions involved in financing your company, the decision to take corporate money or not is a complicated one, and will vary from company to company. You probably need to do even more due diligence on a corporate investor than on a VC, as you need to really understand their strategic motivations and whether or not their goals are going to be congruent with yours. Also know how deeply into the organization the commitment to you and your company goes. Trees with shallow roots tend to get blown over in strong winds, and rare is the startup that doesn't weather at least one storm. But having corporations interested in investing in you is a good problem to have!"

Mathematics of VC Deal Valuation

This post by Brad Feld explains the mathematics behind some basic VC deal terminology, stating:

"I've found that even sophisticated entrepreneurs didn't necessary grasp how valuation math (or "deal algebra") worked. VCs talk about pre-money, post-money, and share price as though these were universally defined terms that the average American voter would understand. To insure everyone is talking about the same thing, I started passing out this document. Recognize that this is about the math behind the calculations, not the philosophy of valuation"


Is Going Public the Right Move for Your Company?

One of the issues Google's management must face after the IPO is their obligations of disclosure to the public about their plans and expectations. This article by Theodore F. di Stefano from e-commerce times explores these issues, stating :

"Some people are extremely private and want no one to know their business. But if you bring your company public, everyone will know your business. Yes, your annual salary, perks, potential conflicts of interest and details about the board of directors that you have chosen are all available to the general public -- even to your neighbors, if they are so inclined to inquire. "

Inspire Your Team

A nugget from this article by Pat Croce in Fortune Small Business:

"Every small-business owner should look for reasons and moments to recognize members of her team for increased effort, persistent positive attitude, and peak performance. Praise pays. Recognizing the tiny triumphs and small victories of your staff provides the psychic income necessary to propel it to additional success while strengthening its allegiance to your company."

Software Product Pricing Primer

In this article from msdn, Eric Sink, Software Craftsman, SourceGear, provides a collection of issues to consider when making decisions about the price of software products.

Nanotech funding to grow to $8.6 billion

Nanotech funding to grow to $8.6 billion: "By Michael Kanellos
CNET News.com

Corporations, governments, universities and others will spend an estimated $8.6 billion on nanotechnology research and development in 2004, and the private sector will account for a bigger proportion of the total."

VC Liquidation Preference

A post by Brad Feld elaborates on this idea:

"A liquidation preference is a standand (and rarely negotiable part) of a VC investment. It's the downside protection on an investment that VCs expect to have as a baseline of any equity investment."

Entreprenuer's View of VC Valuation and Deal Structure

A nugget from this post by Matt Blumberg:

"[V}aluations and deal structures can end up being about VCs getting as much upside as possible out of their winning deals to cover their losses from their zero-return deals. What bugs me about this is that entrepreneurs don’t have that same luxury of a diversified portfolio – they are 100% invested in terms of their human capital and often their investment capital in their company."


Use the Small Business Administration

From bizjournals.com:

Beginners to bigshots: How real businesses use the Small Business Administration to grow

E-Mail Use Threatens IP Protection Efforts

This article from Internet Week.com by George V. Hulme points out some of the risks email usage poses and asks these questions:

Is The Content Of Your Company's Outbound E-Mail Messages Monitored?

Is Appropriate Use Of E-Mail And The Web Part Of Your Company's Security Policy?

Does Your Company Have In Place Customer Data-Privacy Safeguards That Inform Employees Of Privacy And Behavior Standards?


Reverse Mergers Under SEC Microscope

If you are considering taking your closely held corporation public by merging it into a shell company that is already public, but inactive, you shoud read this article by Theodore F. DeStefano from the E-Commerce times, who states:

"Presently, the SEC has less tolerance of reverse mergers and shells. In fact, it has recently suspended trading on 26 stocks of shell companies. It plans to take steps to assure that these stocks are never traded again by revoking the registrations of these companies."

Ten Survival Tips for Entrepreneurs

This post by Dave Pollard, from his "How to Save the World" blog, offers this advice:

1. Manage Your Cash Flow.
2. Risk Capital Doesn't Exist.
3. Offer Something Different.
4. Use Viral Marketing.
5. Ensure Your Team Has Appropriate Balanced Talent.
6. Have Experts Critique Your Plan.
7. Know When to Fold.
8. Have an Exit Strategy.
9. Listen to Your Customers.
10. Stay Agile and Alert.

Negotiating Private Lender Credit Terms

This article from Entrepreneur.com: explains:

"Working with commercial banks for loans is essentially a one-way settlement process. The bank offers certain terms as to the interest rate, an assortment of upfront fees, the term, principal and interest repayment formats and due dates, collateralization, and other closing costs associated with screening and obtaining the credit...

Working with private lenders,however, should definitely be much more of a two-way settlement process. Too often, though, entrepreneurs assume the creditor's offer of terms is as rigid as that of the commercial banker, and companies can end up with a final loan package that overly favors the lender's requirements rather than the borrower's unique requests."

Expand Globally with Caution

This cautionary note comes from a post by VC Ed Sim:

"Many startups I meet with today are either taking advantage of offshore development or have pushed up plans to expand sales internationally. Given the broader scope of this trend, I have changed the category name Offshore Resources to represent a broader theme, Globalization. While taking advantage of a global economy is a great idea, it certainly can be disastrous for some companies."


Protect your business ideas when contacting VC's

In this article from SouthCoastToday.com, Louise Witt of Fortune Small business explains:

"Enticing venture capitalists to invest in your idea requires striking a delicate balance. You have to provide them enough information about your business plans to pique their interest, yet, at the same time, you have to protect your idea.

After all, safeguarding your idea is critical -- and protecting it properly can make it more valuable both to you and to your potential investors. Venture capitalists will be reluctant to invest millions in a startup if a rival could simply start a copycat business."


Bootstrapping Top 10 List

From VC, Brad Feld, comes this list of bootstrapping tips minus his insightful commentary available at the full post here.

1, Figure out how much cash you really have.
2. Figure out how much time you really have.
3. Pick one idea in one domain and go extremely deep on this idea.
4. Surround yourself with experienced people.
5. Find angels.
6. Figure out what you want to look like in 5 years.
7. Get customers.
8. Learn everything you can about what you are about to do.
9. Figure out your fallback plan.
10. Figure out what to do if you fail (face your fears before you start).

Taking Technology to the Masses

The New York Times profiles CMU's Raj Reddy and his ambitious plans in this article, stating:

"Raj Reddy was fed up debating the problem of the digital divide between the rich and the poor and decided to do something about it.

Mr. Reddy, a pioneering researcher in artificial intelligence and a professor at Carnegie Mellon University, plans to unveil at the end of this year his new project, called the PCtvt, a $250 wirelessly networked personal computer intended for the four billion people around the world who live on less than $2,000 a year."


How to Negotiate a VC Term Sheet

On his blog, OnlyOnce, first time CEO, Matt Blumberg, who runs email services provider ReturnPath.net, offers this advice on negotiating a VC investment term sheet:

1. Get a good lawyer...
2. Focus on terms that matter, otherwise known as "pick your battles"...
2a (new). Sacrifice valuation for a clean security...
3. Always have a BATNA (Best Alternative to a Negotiated Agreement – a fancy way of saying Plan B)...
4. Be prepared to pay up for high quality investors...
5. Ask for references...
6. Don’t let the VC get away with negotiating a point by saying “we always do it this way.”...
7. If you have multiple investors in the syndicate, insist on a single investor counsel and a lead investor...
8. Try to deal in advance with follow-on financings...
9. Handle the term sheet negotiation carefully...
10. Finally, don’t forget to say thank you at the end of the process...

The full article is well worth reading here.

VC's Look for Torchbearers

From a post by Seth Godin (via A VC):

"When venture-capital firms look for entrepreneurs on whom to risk their money, they aren't searching for a great idea, or even great credentials. No, what they're searching for is this: the certainty that the person who brings them a business idea is going to carry the torch for that idea as long as it takes, that the idea will get passed on, and that the business will make it across the finish line."

Jerry's Top Nine Ways NOT to Raise Money from a VC:

More from former full-time VC Jerry Colonna:

Jerry's Top Nine Ways NOT to Raise Money from a VC:

1. Don't beg; it's embarrassing.
2. Don't jump into a cab with them as they're running away from you.
3. Don't stalk; it's scary.
4. Don't hand a business plan to the VC's kids at Little League practice and expect them to pass it along to their Dad; it's REALLY scary.
5. Don't slip it under the front door of their house late at night, when no one is looking; it's call-the-police-honey scary.
6. Don't make fun of their existing investments ("If you like that piece of crap, you'll love my company.").
7. Don't send a business plan written on a napkin. It's trite, silly, and ineffective.
8. Don't threaten to beat them up and, finally,
9. Don't show up unannounced to their office and pretend you have an appointment (this may seem an attractive method since nearly all VCs are over-booked and are lousy at managing their schedules and it's entirely possible that they forgot about your meeting. If you do it, you'll make an enemy of their assistant. You do NOT want to make an enemy of the VC's administrative assistant.)

Read the full article from Inc.com here.

Forget VC Money, Fund Yourself

From former full-time VC Jerry Colonna:

"The best possible way to finance your business is from free cash flow. If you can meet your capital needs without selling equity or without taking on personal debt, do it. It's that simple."

Of course, there is more to it than that. Read the rest in this article from Inc.com.

The Case for Affinity Lending

From BW Online "Entrepreneur's Byline" by Sandra G. Wagenfeld :

"If you're not a startup, don't want to give away a piece of your hard-built business, and need cash to grow, read on..."


Controlling Content Chaos

In this article from Computerworld Sue Hildreth explains that the answer for controlling content chaos is enterprise content management (ECM) softare:

"...designed to keep track of documents and records that are stored in a variety of locations and formats (paper, Web pages, PDF files and, increasingly, audio and video media) throughout a company. Interest in ECM systems has intensified as IT managers feel increased pressure both from their own executives and from regulatory agencies to carefully track and consolidate all of the organization's key documents...

ECM systems...combine a variety of niche content management products: those that manage Web content, records, documents, digital assets and images, plus collaboration tools. ECM software aims to provide organizations with a single platform for inputting, storing, searching, editing, tracking, sharing and distributing all forms of content."


Feld Thoughts: Financial Fitness for Entrepreneurs

By Bradley Feld of Mobius Venture Capital recently posted this article stating:

"I wrote the following article on 'financial fitness for entrepreneurs' last year for the Kauffman Foundation's Entreworld web site so it's reasonably fresh; I got a lot of positive feedback and it ended up in USA Today. It's aimed at any entrepreneur - not just those running venture funded companies. While it's aimed at an early stage entrepreneur, I think it's useful whether you have one employee (you, the founder) or thousands of employees in your business. It was 'professionally edited', so it lost some of my special voice (you'll notice the lack of cuss words.) Enjoy."

I did enjoy it and I believe you will too.

These are his financial tenets:

1. Cash is king: No matter what, don’t run out of money.
2. Put in real financial systems from day one.
3. Measure everything
4. Build an annual operating plan
5. Use your vendors to fund your business
6. Use your customers to fund your business
7. Be careful of personal guarantees
8. If it sounds too good to be true, it probably is
9. Finance your business appropriately for what you are trying to create
10. Choose professionals carefully
11. Don’t take anything for granted: Double-check everything.

Offshoring Outsourcing Roundup

As a follow up to my previous post on global outsourcing legal issues, outsourcing offshore continues to be a hot topic in the political news and in the blogosphere. George's Employment Blawg lists several articles on the subject. I add the following to that list:

Clearing up the confusion over outsourcing:

An interview from CNet with John McCarthy, a vice president at Forrester Research, whose 2003 report predicted that 3.3 million service jobs would move abroad by 2015 and which figure has been cited repeatedly, as the public seeks to understand and weigh the merits of pushing high-paying jobs such as computer programming to lower-wage countries like India.

Benefitsblog: Outsourcing: Traps for the Unwary

An outline of potential legal issues faced by employers considering offshoring under ERISA and the Fair Labor Standards Act

According to Nari Kannan

"If you read the newspapers or watch some of the TV news programs you would think that IT unemployment in the U.S is somewhere around 50% and all due to offshoring. Reality does not seem to anywhere close!"

E-Commerce News: Global: India Might Undermine Outsourcing with Taxes

Should I Franchise My Business?

"If you want to expand, but lack the money, the people and the time, it may be time to think about franchising." So states Mark Siebert in this article in Entrepreneur.com. He continues:

“Franchising is a relatively flexible format, and just about any type of business can be franchised, provided it meets some basic characteristics:

• It needs to be credible. Does your company have experienced management? A track-record over time? Is the concept proven? Have you achieved good local press or public acclaim?

• It needs to be unique. Is your business adequately differentiated from its competitors? Is it marketable as a business opportunity? Does it have a sustainable competitive advantage?

• It needs to be teachable. Are the systems in place? Are operating procedures documented? Could someone learn to operate your business in three months or less?

• It needs to provide an adequate return. I don't mean just profitability. If a business can't generate a 15 to 20 percent return on investment after deducting a royalty (typically between 4 and 8 percent), it's going to have difficulty keeping franchisees happy.

If your business meets these criteria, then it may be a good candidate for franchising.”

If Cash Is King, Credit Is Queen

In this article in BW Online, Emily McHugh shares her experience and makes the case for bootstrapping, including the prudent use of credit cards. Other sources of capital at the various stages of her startup included loans from families and friends, an SBA micro loan, a manufacturer's advance, bank lines of credit, and -- her personal favorite -- upfront cash deposits from customers.

A nugget from the article:

"All entrepreneurs need to spend less time worrying about debt or equity financing, and a lot more time figuring out the route to positive cash flow. Getting the product to market and generating sales should be the entrepreneur's primary focus."


The Clockwork of Tech Transfer Projects

In this article by John L. Jenkins, the participants in a successful academia/government/commercialization technology transfer project are compared to clock components.

"The key to the development of a successful technology licensing team is to develop an understanding of, and empathy for, the priorities of other players in the relationship. Look at the players in the relationship as though they were components in a clock. A clock’s gears, by design, move and operate independently from one another. This very precise interrelationship is integral to the clock functioning properly."

Jenkins identifies the players and their priorities as follows:

A. The Academic Team

From the Professor(s) perspective:

Funding for graduate students
Research for dissertations/theses
Case studies for presentations/conference papers
Acquisition of new/upgraded equipment
Areas of interest to the school’s administration
Technology that builds on/complements prior research
Potential for collaboration with other institutions

From the Student/Researcher perspective:

Research for dissertation and/or thesis
Tuition and/or stipend support
Enough excitement to keep them from studying!
Fulfillment of multi-class requirements
Something to brag about to friends/family
Something meaningful to put on a resume

B. The Private Sector/Commercial Team

From Management’s Perspective:

Potential for profitable new product(s)
Potential for cost reducing process improvement
Risk profile justifiable to a board of directors
Commercialization cycle to satisfy investors
Potential for visibility (read: promotion/raise)

From Engineering/Development’s Perspective:

Something "cutting-edge" to work on
An intellectual challenge
Potential for long-term involvement
Lead to a potential raise
Something meaningful to put on a resume

From Marketing/Sales’ Perspective:

Something that will knock the customer’s socks off
Potential for performance/bonus achievements
Synergy with existing products/services
Something meaningful to put on a resume

C. The Government Team

From the Government Researcher’s Perspective:

Something meaningful to work on
A connection to real-world application
A profile that’s significant
Potential for long-term involvement
Something meaningful to put on a resume

From the Government Funding Group’s Perspective:

Fit with the organization’s charter/mission
Potential for job creation/retention
Favorable political value
Acceptable risk profile

For Love or Money

Serial entrepreneur Jack Roseman states in an article published in the Pittsburgh Post-Gazette:

"When I started into business, I had some feel for how to handle customers, suppliers, employees and competitors. But when I got to the point of going after big money, I found I didn't understand venture capitalists. And that's a serious handicap if you want to get your company on the New York Stock Exchange, as I did."

He goes to explain that the reason venture capitalists are so hard for entrepreneurs to understand is that there is a fundamental disconnect in intention. Venture capitalists are in it primarily for the money and entrepreneurs for the love of the challenge. You may read the full article here.


Venture Capitalists Don't Like Surprises

Venture Capitalist Ed Sim explains in his blog BeyondVC:

"One of the recurring themes of dealing with VCs and boards is that we do not like surprises. In addition, tell us the facts, and if there are any negative surprises give us action steps on how you are going to remedy the situation."

It's InfoWorld 100 Time

Nominations are now being accepted for the coveted InfoWorld 100 awards!:

Here is the official description:

"Every year, InfoWorld's editorial staff names 100 companies that have made the best use of technology to enhance their business. The InfoWorld 100 Awards celebrate real-world IT projects that use technology in smart, innovative, creative ways to meet business and technical objectives. We're looking for projects (or substantial segments of projects) completed between November 2003 and September 2004. "

What is morale anyway?

This article from techrepublic explains that high morale is more than mere enthusiasm and how other factors come into play in shaping your team's morale.

Business Life Cycle

From Vanilla's Accounting Blog comes this interesting article that explains the five phases in the life of a business. According to the article:

"There are five distinct stages that businesses go through as they mature. Each stage of the cycle poses a different set of challenges and requires the owners to apply a different set of skills (and conquer a different set of frustrations) in order to ensure the success of the business."

The five stages are Existence, Survival, Success, Take-off and Resource Maturity.

Treat Your Best Customers Best

Jerry Osteryoung,director of the entrepreneurship program in the College of Business at Florida State University, writes in the Tallahassee Democrat: "Clearly, all businesses have many customers. However, all customers are not the same. Although all customers deserve to be treated well, you need to treat your best customers even better." Read the full article here.

Intellectual Property in Mergers And Acquisitions

Adam Liberman identifies 10 intellectual property Ingredients to a Successful Deal. (published by Mondaq, free subscription required)
Among the key points:

1. The greater the disparity between the proposed price and the value of net tangible assets, the more likely intellectual property is important to the transaction.

2. A working assumption is that foreign laws will be substantively different from domestic laws and must be dealt with accordingly.

3. A clear identification must be made of what comprises the intellectual property to ensure its proper valuation, accounting, taxation and transfer.

4. The deal is not complete until title transfer is recorded.

Venture Funding Climbs, Refocuses on Start-Ups

NetworkWorldFusion reports that: "Venture funding in the information technology sector continues to grow, according to a pair of recent reports, with early-stage companies seeing more investments than they have in previous years. "

Managing Cash Flow

This posting from The Accounting Blog explains the basics of cash flow and offers some strategies for managing it more effectively.

This will help you answer some important questions like: how much can I grow my business right now (i.e. without additional funding)? And: how much additional cash would be needed to grow the business even more (for example, to double sales next year)?

Entrepreneurial Deathtraps

From the The Venture Capital Institute comes this list of twenty-five entrepreneurial deathtraps taken from a 1996 presentation by Frederick J. Beste. Among the traps to be avoided:
1. The 50-50 partners trap.
2. The three (or four) (or five) musketeer's death trap.
3. Overdependence on one customer.
4. "Mousetrap" Teams
5. Inadequate Pricing
6. Insufficient start-up capital
7. Failure to Look at the Downside
9. Lack of focus


Motivate Your Employees with Monetary Rewards

In this article from the WSJ StartupJournal, Bob Rosner explains that "Most companies are...crude when it comes to rewarding employees. They don't realize that it doesn't take a suitcase of bills to keep your best people. What it does take is finding out what's important to your people and giving it to them when they've earned it. "

Five Characters You Don't Want to Become

From the Viewpoint of an Entrepreneur

"These are five characters that you don't want to become in your IT career! The Technical Prima Donna, The Interminable Planner, The Conceptual Mountaineer, The Presence Meister and the Invisible Busybody!"

Nor in any other career.

Start-up salaries get reality check

"The days of easy money as a tech executive at a start-up are over, according to a new study. Salaries for information technology executives at upstart technology firms plateaued in 2003, after three years of sluggish growth"according to the report summarized in this article from CNet.

Bootstrapping Your Startup

From an Entrepreneur.com: "Despite the dream of some entrepreneurs to meet a VC with deep pockets, the fact is that 99.9 percent of business owners will struggle alone, pulling themselves up by their bootstraps. And that's not necessarily a bad thing. With a little luck and a lot of pluck, bootstrapping a business can be both financially and emotionally rewarding." You may read the full article here.

Grants will be given for entrepreneurship

The Akron Beacon Journal reports that a group of philanthropic organizations is giving $8.15 million in grants to four Northeast Ohio organizations to help foster entrepreneurship and create new high-growth industry clusters. You may read the full article here.


Breaking the Rules with Open Source

"Increasingly, entrepreneurs ... are eyeing open source as a better way to build software companies. Rather than incur huge start-up costs and recruit high-priced software sales executives, smaller companies are building their businesses around an open-source business model, where software source code can be viewed and enhanced by others." Read more from Martin Lamonica here.

First of All, Let's Use All the Lawyers

With all due respect for William Shakespeare, John Gleidman explains the value brought to the table by a well utilized business lawyer. Among his observations, the well utilized business lawyer:

* Asks you strategic questions to help you achieve your goals.

* Gives you process-related advice to help you get from Point A to Point B

* Works as part of the negotiating team, giving advice on what positions can or cannot be taken based on prior deal experience.

* Documents your intentions clearly.

Five Myths in E-Commerce About Personalization

Robert Brazile in E-Commerce News urges internet businesses not to allow these five myths of personalization to hinder the development of online personalization in e-commerce. He identifies the following as myths:

1. In order for personalization to work, you need to get users to log in or register, and you need to track reams of information.

2. Systems that do personalization are clunky, expensive and slow and can be supplemented by standard databases not geared toward customer experience.

3. Personalization is really about a number of fuzzy, unproven techniques that can ultimately leave you with privacy issues.

4. Personalization equals unique customization, meaning that my marketing department will need to come up with as many offers as there are people.

5. There is no way to test what works in a cost-effective and scientific manner, and ROI for personalization is difficult to prove.

5 Rules for Business Startups

Business Coach, Brian Tracey, provides 5 Rules for Business Startups.

1. Find a problem and solve it.
2. Find a need and fill it.
3. Look for solutions
4. Focus on your customer.
5. Invest sweat equity in your business.

Starting A Business is a Daunting Dream

Before launching your business you may want to read this article by William Shulz from the Wall Street Journal's Startup Journal. He states in part:

"Running your own business is hard. But you think you're smart and can take an idea and make it happen. Odds are good that you'll lose half of your start-up cash by making mistakes. They may involve bad leases, employees, records, decisions, ideas or luck. The bottom line: You're bound to make mistakes, and they'll cost you.

Why do most small companies fail? Because no one can really tell you how to run a business. No weekend seminar can teach you everything necessary to be successful. "

Avoid Unnecessary Spending

The Small Business Blog identifies these ten ways to avoid spending money unnecessarily:

1. Develop a budget for each department.
2. Develop a list of what employees are allowed to purchase.
3. Know how much cash you have in the bank every day.
4. Read and approve each expense.
5. Stay on top of and try to collect as quickly as possible your accounts receivable.
6. Extend your accounts payable.
7. Barter for services and products.
8. Only buy things you absolutely need.
9. Ask every vendor for advice on how to save money on products you purchase from them.
10. Put out a bounty on internal savings by rewarding employees with 10 percent of whatever money they can save the company.


The Deal Of A Lifetime

In this article orinally published by Mondaq, I briefly summarize some of the major legal considerations involved in the buying or selling of a business.

Oiling the Hinges on Your Exit Strategy

BW Online | August 3, 2004 | Oiling the Hinges on Your Exit Strategy

"Beyond the emotional value entrepreneurs invest in their outfits, a business is worth whatever the market will pay. Here are some expert tips to maximize the eventual payout"


A Practical Overview of Business Intelligence

This post by dwatson gives a brief overview of business intelligence. As explained in the article:

"Business Intelligence is, at its core, the ability to access data from multiple sources within an enterprise and deliver it to business users for analysis...

Business Intelligence (BI) is fast becoming a must-have capability for competitive advantage in both small and mid market organizations."

NASA Issues Call For Moon, Mars And Beyond Technologies

"NASA issued this week a Broad Agency Announcement (BAA) focused on what's needed in human and robotic technology to put into high gear any Moon, Mars, and beyond space exploration.

As part of a sweeping roster of needs, NASA is asking for proposals in the fields of artificial gravity, inflatable structures, as well as living-off-the-land machinery"

Details are available here.

Integrating Business Goals And The Law In Licensing Deals

Edward Perlman explains in this excellent article how to create a license agreement that defines the rights, obligations and liabilities necessary to create a win-win situation consistent with management's business objectives in a technology transfer transaction. (via DennisKennedy.blog)

Global Outsourcing Legal Issues

Jolly industries reports in a press release that the theft of its intellectual property and its problems dealing with the Indian legal system exposes the risks of global IT outsourcing.

These are but two of the many legal issues and pitfalls attendant upon global IT outsourcing as pointed out in articles by Jason Epstein and Wendy Fink

As Mr. Epstein states: "Companies looking to save money, gain technology expertise, or simply shift liability have increasingly turned to outsourcing. Outsourcing takes many forms, ranging from outsourcing a discrete business function, such as software development or records management, to the entire IT department. Whatever the form, there are certain common legal issues associated with technology outsourcing."

I believe that some of the key issues may be grouped as follows:

Intellectual Property -- ownership, licensing, confidentiality, control, protection

Process Management -- description and scope of services, performance specifications, control, quality, change orders, transfer of assets, transfer of personnel, dispute resolution, security, disaster recovery, termination rights and duties

Other -- privacy, liability limits, warranties, remedies for breach, exclusivity, enforcement, particularly as the foregoing relate to foreign jurisdictions


Safeguarding Trade Secrets in the Information Age

Sheryl Willert writes in Findlaw's Modern Practice that:

"There are no easy solutions to the problem of protecting trade secrets in the information age. But there are definite steps the employer can take, and these include monitoring business equipment and promulgating unambiguous policies."

After outlining the legal issues, she offers helpful suggestions on tackling this important task. Read the thorough and complete article here.

How to Be Creative

Want to be more innovative? Consider checking out this article from gapingvoid on how to be creative that offers interesting and insightful tips.

Majority of Startups are Conventional

Reuters reports regarding a study released by the Global Entrepreneurship Monitor:

"If you believe the hype, start-ups are an innovative breed that go against the grain of conventional business. But are they?

A new study says the vast majority are not, leading one to wonder whether innovation is what it takes to start companies, or if they're really fueled by something else."

Read the full story here.

Four Agreements & Work

Joyce Wycoff reprints an excellent article from Mary Bartlett at Good Morning Thinkers!. As summarized by Jack Vinson, the four agreeements are

1.Be impeccable with your word
2.Don’t take anything personally
3.Make no assumptions
4.Always do your best

Director Liability for CEO Pay

Benefitsblog links to previous posts and reports on an op-ed piece by Geoffrey Colvin for Fortune magazine (via LexisNexis) entitled

--'CEO pay meets its match: plaintiffs lawyers'--

suggesting that under recent Delaware case law, directors could be personally liable if they fail to analyze and monitor a CEO's compensation.