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Business Startups

37 Posts authored by: Touchpoint

QAestherdyson_Body.jpgby Sharon Kahn.

She describes herself as a "start-up catalyst." Through EDventure Holdings, Esther Dyson places her bets in emerging markets such as Eastern Europe and, more recently, Africa. In the U.S., she specializes in cutting-edge ideas, specifically information technology, preemptive healthcare, and commercial space travel. "I don't want to be redundant by investing in companies that would happen anyway," she recently told business writer Sharon Kahn. Some of her best-known successes include Flickr and (both sold to Yahoo!) as well as Medstory (sold to Microsoft). She's also involved with Russia’s leading search company, Yandex, and Nomanini, a South African company that makes and distributes terminals that let small businesses accept prepaid vouchers for products such as airtime, electricity, and insurance.


SK: How did you become a venture capitalist?

ED: I ran a technology newsletter, Release 1.0, for 25 years. In the mid 1990s, a friend said, ‘Gee, you keep telling people that they should invest in technology companies in Eastern Europe, where so many changes were going on. How about I give you one million dollars to invest?’ I said, ‘How much did you say?’


Money goes a lot further in Eastern Europe, but I eventually decided to invest in the U.S. as well. At that point I hired someone to run my newsletter because I became fanatic about disclosing where I might have a vested interest. With all kinds of people now blogging, disclosure has become less of an issue, but I still feel it's important.


SK: You now specialize in preventive healthcare and space as well as digital technology. Why those areas?

ED: I love emerging technologies in the same way I love emerging markets. Digital technology allows us to know and track our bodies better, helping us change behavior so we can avoid needing health care in the first place. Through their phone and sensors [that read, record, and transmit body functions], people can collect their own data and collaborate and compete with other people in the same situation. That social interaction provides motivation to eat better, exercise, whatever.


I'm also on the boards of several space companies, which represent, literally, the path to a new frontier. I trained as a backup cosmonaut. It's extremely exciting to be involved in commercial space.


QAestherdyson_PQ.jpgSK: Where do your geographic interests lie?

ED: I'm still involved with Eastern Europe and Russia, but I've also invested in several startups in Africa. The cell phone is making a huge difference there in much the same way that the Industrial Revolution changed the Western world. Armed with a cell phone, an individual does not need an employer. When farmers can easily learn the price of crops, for example, their lives dramatically change. The phone lets them advertise their services. It is a piece of capital—not  just a personal communications device—that is moving millions and millions of people from the subsistence level because they are empowered.



SK: What attracted you to some of your most recent investments?

ED: I look for entrepreneurs who have a mission—not just people who want to get rich. Ideally, they will come as a team who can support one another and keep each other from getting too crazy. An example is Omada Health. A couple of guys in California started a business to provide online group counseling for people at high risk for developing diabetes. A "facilitator" takes people who meet in groups of 10 through a 16-week course where they learn to live better. I liked not just the technology behind the company [which tracks progress using a cellular-connected scale, among other metrics], but also the plan that called for most of their counselors to be former group members. It's a virtuous cycle, where I am helping people become economically self-sustaining. And these people are going to be passionate about what they do.


SK: In many cases, you take an active board member role once you invest. What do you bring to the table?

ED: I try to do whatever is not being done. I have helped to build a team. I have had to be the grownup in the room and replace the CEO. I've frequently rewritten press releases to provide a PR message. One of my roles is to introduce management to potential customers. For example, Voxiva [a Washington, D.C.-based 2001 startup which delivers health services to clients via cellphone] wanted to enter Russia, so I provided contacts.

SK: Have you ever been tempted to start your own venture?

ED: I think being CEO is overrated. I have a very short attention span. I hired a CEO for EDventure, which lets me do the fun stuff while she takes care of the details.


SK: What types of companies are you looking to invest in over the next few years?

ED: One of the big issues we're facing is too much knowledge. That forces us to make decisions we never had to make beforewhether about climate change or health insurance. Because we can figure out the consequences of our actions, it's harder to claim ignorance.


So, in many ways, I'm investing in companies that will respond to this trendservices or devices that will give people self-knowledge and the motivation to change their behavior. And also in what I call human-capital playsassessment and motivation tools for employers and people looking to manage their own careers, and also in education itself. Overall, educated people are better equipped to make complex decisions...and to be good citizens.


This interview has been condensed and edited.

WorkingwithBFF_Body.jpgby Heather Chaet.

She’s been by your side since the fifth grade. She’s seen all of your break-ups, was your sorority sister, and was in your wedding party. He’s your best friend, your go-to guy, the Fred to your Barney, the Michael Jordan to your Scottie Pippin, the Laurel to your Hardy.

Yes, knowing someone that well can be great if you go into business together, as you know how each other think and what each of your passions are. But working with a best friend can also be fraught with trouble—not only for your bottom line, but also for your relationship. So what are some steps you can take to make sure you keep that friendship solid as you build that company together?

Put it writing

Ideally, before you put the OPEN sign in the store window or set up your web site, you will have spelled out the basics of your partnership in writing. Adam Torkildson, PR coordinator for Customer Hook, went into business with one of his best friends and still remains partners and, more importantly, friends three years later. He says getting the business details in writing before you even begin is key. “[Have] signed documents detailing your arrangement, payment structure, who owns 
what percentage of the company, and any other legal questions that [could] crop up
over the course of doing business,” says Torkildson. He adds that having defined budgets for raises, infrastructure, bonuses, and
 savings as well as guidelines on whether or not to take capital funding is also essential. “Right now, we're being courted to 
receive funding, but my friend is very hesitant,” he says.“I'm all for it.” With these guidelines already in place, however, he points out that struggles and heated discussions have been kept to a minimum.

Bibby Gignilliat, Founder and CEO of Parties That Cook, went into business with two friends, and then ended up going it alone. She agrees that setting up everything at the start is the best course of action. “Outline priorities, objectives, values, and business roles up front,” Gignilliat says. “Hire an attorney to draft
a partnership agreement—like a pre-nuptial agreement in marriage—and
 clearly spell out all exit scenarios in case it fails. Ideally, you and 
your partner should each have an attorney so that your interests are 
protected.” Tokildson adds, “These things aren't rocket science and are basically good business 
principles for anyone in business.”

WorkingwithBFF_PQ.jpgPlay to your relationship’s strengths

Michael Laramee, co-founder of Meal Train, started his company with a friend and former college roommate. “I was the officiant at his wedding,” he notes, “[Having] shared that history has worked well for us. The benefits are that you have a foundation to work from.” Laramee suggests those thinking of going into business with friends break down who is best at what. “[Define] areas of expertise before you get started,” he says. By delegating from the get-go who is better at what, tapping into each other’s strengths, and not overlapping responsibilities, the decision-making and day-to-day operations become more productive.

Louis Rosas-Guyon,
of R-Squared Computing, who has been business partners with a good friend for 12 years, agrees, and suggests partnering with a friend who isn’t just like you.  “Find your complement, someone whose strengths are your weaknesses and vice versa,” he says. “For
 example, my partner is a technical genius who doesn't particularly like to talk to
people, whereas I am less of a tech genius, but I will talk to anyone.”

Don’t let you friendship get in the way of open communication

Having your best friend sitting next to you everyday can make for a much more enjoyable entrepreneurial experience, but you have to keep in mind why you are there together—to make money and grow the business. That means constant communication, even if it is a tough conversation. “Encourage open and honest conversation. With friends involved, communication tends to become dysfunctional quickly because of fear of upsetting your friend,” says Raj Shah, SEO manager for, who has gone into business with many friends over the years.

Brandon Medenwald, the co-founder of Simply Made Apps, a start-up founded with his friends after a fun conversation one evening,
 concurs. “The biggest fear is that, as things change, co-founders start to drift apart silently,” he explains. “We stem this by constantly communicating our wishes, thoughts and ideas. If we see something becoming an issue, we sit down and address it immediately. Letting issues fester is an absolute killer.”

Don’t mistake work-time for friendship-time

When you start to work together, you may be surprised to discover new aspects of your old friend. “Most of your friends, even your closest, rarely get to work with you, so your business acumen and the way you conduct yourself might be a side they've never seen before,” says Shah, “You [both] have to be ready to be seen in a different light.” This is all the more reason to keep doing “normal” things you did before entering into business together.


Medenwald agrees. “We still meet up for beers, play golf, and everything we did prior to starting a company together. This has prevented the relationships from slipping into a ‘business only’ mode,” he explains.  It is essential to maintain your non-business friendship to make sure that foundation on which you joined together in the first place grows stronger, along with your company.

QAjerryross_Body.jpgby Erin McDermott.


If you’re starting or running a business near Orlando, Florida, Jerry Ross is the man to see. A lifelong entrepreneur who sold his first company right out of college, he eventually started an entertainment-lighting company that lit up the 1996 Summer Olympics in Atlanta, and a Super Bowl or two, before he sold the firm in the late ’90s. Now he’s the driving force behind the National Entrepreneur Center, a small business nonprofit hub that more than 12,000 business owners and would-be entrepreneurs have passed through in its nine years. The Center is a home for business mentoring, one-on-one advice, and seminars about all aspects of the small business world.   


EM: Is there a mantra that you have for small business owners?

JR: For me personally, “Just stay vertical.” That means just stay upright and don’t hit the mat whatever challenge comes your way. If you can take whatever comes and just stay upright, eventually you will outlast the storm, opponent, competitor, or hurdle of the day. “Just stay vertical.”


Professionally, it’s: “Is what I am doing right now, making me money?” As an entrepreneur, I would ask myself that question 10 times a day. If the answer is yes, keep on doing it. If the answer is no then I would drop the task right there and redirect my efforts. Going to lunch with a client can be a “making money” activity. However, playing golf with a bunch of buddies who aren’t going to buy from you—during the workday—is not!


EM: What do people lose sight of?

JR: Making money! A business is not a hobby. A business must make a profit. If you don’t make money, you go out of business and then you can’t help anyone, including your family, your investors, and the community as a whole. If you like to sail and buy a sailboat, you can spend all the money you want and people say you have an expensive hobby. However, if you get into the “sailing cruise” business, you better make a profit.


QAjerryross_PQ.jpgEM: Looking back, what were the key decisions that you agonized over when you struck out on your own?

JR: Three things. 1) How long was it going to take to actually make money to take home? 2) How I could possibly work all day in the business, and then all night doing paperwork, mailings, etc. and still have time for family?  3) How and when to hire an employee—how can I afford it? How can I afford not to?


EM: Were there mistakes that haunt you even now?

JR: I was too quick to give up pieces of the ownership to partners that I probably didn't need to have in the first place. And I was too slow to fire employees who were not productive.


EM: It’s been a difficult few years for a lot of small businesses. What are the trends you’ve been seeing in the last few months? What should SBOs be keeping an eye on for 2013?

JR: Businesses are getting better at getting rid of expenses that they don’t need and can’t afford anymore, which helps them stay vertical. And there is virtually no capital for the smallest of businesses, so businesses are getting more creative about asking friends, relatives, and neighbors for investment because they are getting no interest on their savings accounts, Wall Street is scary, and they know the local businessperson... just like the old days.



EM: Small businesses are a major engine of employment in the U.S. What have visitors to the NEC been reporting about the outlook for hiring? 

JR: Hiring plans remain stagnant with so much uncertainty in the marketplace—health care, expiring tax cuts, the election etc. Most businesses are hesitant about investing in anything—including people.


EM: Your organization deals with all types of people looking to hang out a shingle. Are there new groups you’re seeing come forward that surprise you? Are there those that you have difficulty reaching, traditionally?

JR: It’s hard to quantify, but service businesses remain a big part of the startup market because many folks have decided to start their own business because they can’t find employment elsewhere and those businesses are not capital intensive.


EM: You’ve enlisted numerous nonprofits and organizations that run the gamut of business backgrounds—Hispanic, African-American, disabled entrepreneurs, female business owners, among others—to advise and coach. What are the common threads? How do you advise other regional entrepreneurial centers in terms of inclusiveness?

JR: This is something that we have learned to do over the nine years we have been in operation. There is a real attitude of inclusion in Central Florida that has allowed us to not only think about these initiatives, but also actually engage community funders who got involved and financially supported doing something. I speak to audiences all over the country about how simple an idea like collaboration can be, but how difficult it can be to actually accomplish. Today we have such diverse opinions, ideas, and agendas. However it can be done, and you can achieve great things as a community, an entrepreneur center, or as an individual entrepreneur—if you just stay vertical.


This interview was edited for length and clarity.

BacktoSchool_Body.jpgBy Iris Dorbian.


Administered by the Small Business Administration, the federal agency that provides support to entrepreneurs, Small Business Development Centers (SBDCs) have played a key role in growing many small businesses nationwide. Funded through a combination of state and SBA grants, most are typically based at community colleges and state universities. Offering mostly free services, ranging from developing a business plan to executing a marketing strategy, SBDCs can be a lifesaver for financially strapped entrepreneurs looking to turn their  dreams into reality.  


For Amber Sims Hinterplattner, co-owner of the four-year-old All Stages Marketing, a digital and social media marketing agency based in Santa Barbara, California, enlisting the services of a local college’s SBDC proved instrumental in building a solid foundation for her company in its infancy. She first became acquainted with the center through the teacher of an adult education entrepreneurial course that she was taking with her husband and business partner at Santa Barbara City College.


BacktoSchool_PQ.jpg“[Our class] was taught by an active SBDC consultant who mentioned the free resource for local entrepreneurs who were serious about getting help with their business concept,” she recalls. “We scheduled a meeting with him and he provided the initial counsel, introducing us to the SBDC resources and other SBDC counselors. [The latter] were incredibly experienced, encouraging and supportive, which is, to me, a critical part of launching a business successfully. Having people who are veterans of business provide sound advice while standing on the sidelines cheering for you is priceless.”


Hinterplattner says the SBDC counselors helped her and her husband build confidence in their ideas and were instrumental in connecting them with businesses that were interested in learning more about their service capabilities. The SBDC also encouraged them to showcase their marketing knowledge with other area businesses through speaking engagements and other networking events.


The experience was so positive for Hinterplattner that she became an SBDC consultant two years after first seeking assistance.  “I wanted to give back to my community,” she explains. “My social media and online marketing knowledge are in high demand for small business owners who typically can't afford consultants or an agency like mine.”


To be sure, an SBDC is not the cure for a struggling small business that requires a more intensive overhaul. There are limits to what an SBDC can provide in terms of service and duration. Entrepreneurs who are contemplating using an SBDC as a resource should consider the following tips:


Find counselors who specialize in your sector

Denise Breeson, a 10-year SBDC counselor who teaches small business management at Santa Rosa Jr. College in Santa Rosa, California, says finding a counselor who understands your industry is critical. “They need to match their business type with the expertise of the counselor,” she advises. “Some counselors have direct experience in the field; others do not.”


Hinterplattner says this is key. She also emphasizes that it’s important to focus on a weakness that you need help improving. “If you don't see [or find a counselor with the] expertise you were hoping for, ask the network to help match you with someone who can help in the areas you've outlined,” she counsels.


Be realistic

Although an SBDC can help a burgeoning business with website optimization or developing an effective online presence, it can’t perform miracles. Make sure your expectations are grounded and informed.


Zach Halpern, founder of the Boca Raton, Florida-based Frozen Guru, which makes flour-free waffles for retail distribution, touts the SBDC at Palm Beach State College as a wonderful resource. He credits it for helping him streamline his company’s search results rankings.


Yet he does have a caveat about SBDCs that fellow entrepreneurs should heed. “They are limited to advice and guidance,” says Halpern, who has six employees. “They do not have any discretionary funds to assist companies.”


Breeson echoes Halpern’s disclaimer, adding that entrepreneurs need to understand that “SBDC services are not ongoing, but rather limited to a task such as writing a business plan. They are not open ended.”


Have a clear vision of what you want to do

As great a resource as an SBDC might be, its ability to help a business will be limited if the owner’s goals and ideas are vague. “Even if you don’t have a business plan, an SBDC can help you develop one,” insists Hinterplattner. “But not having a business vision makes it hard for both parties. I know this firsthand as I've been on both sides of the table.”


Do your research beforehand

Try to glean as much information as you can about SBDCs and how they can help your business before you visit your nearest center. You might even be better off getting assistance from SCORE (Service Corps of Retired Executives), a nonprofit staffed by counselors who work on a volunteer basis, unlike SBDC counselors, who are paid. 


Visiting an SBDC can be a turning point in the development of a small business still in its infancy. Not only can the counselors arm the entrepreneur with the tools needed to drive a company forward, they can also pave the way to influential and prosperous associations that can last the lifetime of a business. As with everything else in life, tenacity and an eagerness to convert lessons learned into real world application are necessary elements.


“Don't lose sight of the fact that being in business for yourself is both a reward as well as sacrifice,” says Hinterplattner. “The first several years always demand more to succeed in the long run. Stick with it as there are organizations out there, including the SBDC, that are there to help you along the way.”

BizSchoolDropout_Body.jpgby Iris Dorbian. 


At an age when most of his peers are either grappling with the demands of a first job or figuring out what to do with their lives, 24-year-old Jamal Robinson belies the stereotypes. The ambitious Fort Wayne, Indiana-native started to pursue his dreams at the University of Central Florida’s College of Business Administration, but he put academia on the backburner when a plethora of opportunities surfaced. From 2008 until this past spring, he was president of sales at Novis Communications, a watch brand that he co-founded. His latest venture, Chicago-based Desiar Eyewear, has attracted the attention of venture capitalists, private equity groups, and celebrity clients like rapper/producer Soulja Boy, and recently launched its retail distribution at the Randolph Street Market. So what tips—and caveats—does Robinson have to offer others who may be contemplating life as an entrepreneur rather than a college student? Robinson shares his experiences and insights with business writer Iris Dorbian.  



ID: Why did you decide to stop pursuing a business degree and drop out of college? 

JR: There was an opportunity for me to design and make my dream a reality in running my own fashion business. I took that chance. I went to UCF and then I transferred back home where I was going to finish my bachelor’s degree at Indiana University—Purdue University Fort Wayne. I stopped after my associate’s degree to pursue building my business.  



BizSchoolDropout_PQ.jpgID: What were the opportunities that you pursued in Florida? 

JR: I went there to connect with individuals who were successful in business. I met someone who was in real estate. He was looking to start a woman’s brand, Foxy4. I told him I could develop a line of clothing if he just gave me the opportunity. That’s how I got started. After my second year at UCF, I designed that line [which included hats, t-shirts, bathing suits, and dresses] and then decided to move back to Fort Wayne, drop out of UCF, and pursue building a fashion business. From 2008 to 2011, I did custom eyewear for celebrities. I had a buzz around my name in Florida and that opened up great opportunities. That’s when I decided to pursue fashion and build my brand rather than go to school.  



ID: Do you have a design background?  

JR: When I got the opportunity to design for Foxy4, I would spend nights reading fashion magazines like Elle, Harper's Bazaar, and Vogue. I would also watch videos on designers, especially Karl Lagerfeld, in a series called “Signe Chanel.” 



ID: What convinced you to take on the designer gig even though you didn't have a design background? Was it the same kind of impulse that convinced you that you could succeed without a business degree? 

JR: I have always been creative and I knew designing was something I could do if I learned a little more about the technical aspect. That's the same thing I felt about school. Education is very important to me, but once I saw what school could offer I knew when the opportunity came, I would be able to leave school while still creating a successful company. 



ID: What do you feel are the pros and cons of your dropping out of college?  

JR: I’m learning what they can’t teach you in classrooms, which are the trials and tribulations of what it’s really like to start a business. You can have simulations, you can have internships, but nothing can give you that real world experience, which I feel is the most valuable thing I’ve learned so far. Also, schools teach you to be part of a business and add value—not so much to start and develop your own business. Even with entrepreneurial programs, the core courses are still based around big business.  The con of dropping out is missing the proper things that you learn in school that will eliminate some of the learning curves at building a business.  



ID: What are some of your strategies for handling critical business tasks like managing cash flow and other technical skills that they teach in college business classes? 

JR: I am a firm believer in mentors. I have five people who have been, and are, entrepreneurs who assist me in growing as a small business owner. They are my sounding boards for how I handle cash flow, credit, and scalability, especially as my business grows. 



ID: Can you describe what led to the formation of your eyewear company?  

JR: I had a pair of sunglasses that I really liked and I had the idea to put Swarovski crystals on them to make them flashy. That was in 2008 and that’s how I got started creating custom sunglasses. Up until last year I was still enhancing glasses with crystals by myself. Then this year I decided to source my manufacturing and I did that through relationships. That’s a challenge in itself. And in growing the brand this year, I raised the capital. It took me about six to seven months of meetings with venture capital groups, private equity groups, and business people to really nail down who I’m going to bring in as an equity partner.  



ID: How specifically did your affiliation with Soulja Boy help grow your brand? Can you cite an example? 

JR: Affiliation with entertainers just opened doors and added credibility to what I was doing. I was a young kid running to every concert I could with a bag of sunglasses. When Soulja Boy started wearing them, I became the young kid who made Soulja Boy's sunglasses. It was never a strategic business move, but it did give my brand credibility. I knew the Desiar concept at the time was cool and could work, but when a major celebrity begins to wear your product, it gives you a boost. 



ID: What are some of the obstacles you have dealt with? And how have you overcome them? 

JR: I would say understanding cash flow was an obstacle starting out. Being a small business, every penny matters so I'm learning to be as efficient as possible. The best way I handle that is by calling one or two of my mentors and asking them questions that I may have problems with. They never tell me what to do, but they give me suggestions on how they would handle my situation. Sometimes I agree and sometimes I don't but it's always good to have a different perspective. 



ID: Do you have other employees at Desiar?  

JR: No, it’s just me—it’s your typical start-up. I have someone who helps me in marketing, but that person is not an employee. He’s a good friend of mine. With Desiar, I design, develop, market, and create the content. The only thing I don’t do is manufacture, which I outsource.  



ID: What are some of the most valuable lessons you’ve learned?  

JR: Anyone who is interested in becoming an entrepreneur should surround themselves with mentors who have been successful in business. For example, I searched out mentors who were very strong in areas I wanted to focus on, such as finance, general business, fashion, and manufacturing. I didn't force any relationships, but I waited to connect and associate with people who wanted to help see me grow as a person and entrepreneur.  

QAmichaelzeto_Body.jpgby Erin McDermott.


Have you taken a small business up on an offer via your cellphone? You very well might soon, thanks to new efforts to engage customers through location-based mobile technology. Michael Zeto, CEO and founding partner of Atlanta-based Proximus Mobility, is at the forefront this new frontier, dubbed hyper-local proximity marketing. Recently, he talked with business writer Erin McDermott about what small businesses can do with this intriguing new media to increase their revenue.



QAmichaelzeto_PQ.jpgEM: In layman’s terms, can you explain hyper-local proximity marketing and how it works?

MZ: Hyper-local proximity marketing is really the distribution of relevant, location-specific advertising and marketing content to consumers’ mobile devices in and around the point of purchase or that critical decision-making moment.

A consumer interacts with a call to action—some signage possibly that says to receive special offers turn on their Bluetooth or WiFi. They do that if it’s not already enabled, and in most cases one or the other would be enabled. And then they receive information when they’re in range of an access point or in an “offer zone.”  

EM: There are plenty of people who aren’t necessarily comfortable with a lot of technology when it comes to their privacy. Proximus is doing it another way: The customers need to opt in, correct?

MZ: Yes. Everything we do takes that into account and it’s all opt-in based. So regardless of which one of our offerings you’d choose, there will be some step that you’ll need to do to opt in ensuring that we stay in line with all of the privacy regulations.


EM: What works in terms of how a business can get clients and customers to want to enable or opt-in to that contact? 

MZ: It comes down to the content and the relevance of the offer. It doesn’t have to be a giveaway—it just needs to be something that is relevant to the business that would give value to a consumer out there. It could be a two-for-one coffee or it could be a special ingredient for how they make one of their better-selling items in a restaurant—something that would be of value for somebody to know. We’ve seen people leverage proximity marketing to increase per-head spending, increase repeat visits back to a location, and increase the sale of higher margin items to the consumers, which adds to the business’s bottom line.


EM: How have people been getting those messages across? What have been some creative uses in how they’re connecting with customers?

MZ: The first step is that call to action, so it’s about letting people know there’s something available for them. In some cases, it’s at events and they’ll have street themes and T-shirts with a catchy saying. In some cases, it’s signage like poster boards or a banner flashing across a digital sign.


EM: In terms of the actual message, what have businesses been sending that you think have been effective?

MZ: People always want offers. So for the business owner, for the ad to be effective, the offers need to be something that provides a benefit to the consumer and to the business itself. That’s why we try to promote the increase in per-head spend, where it’s not a giveaway offer of something they’d normally buy. You offer them an appetizer along with the purchase of an entree.


Or, for example, a hair salon giving a clip of a new hairstyle that’s been seen on a Hollywood celebrity. The hair salon’s saying “If you want your hair to look like Jennifer Aniston, get your hair cut here. And, oh, by the way, she holds it together with Aveda products.” So they’re not only giving the consumer something valuable—which is what’s new in the world of hairstyles they might want—but they’re also promoting the salon and an up-sale of products, which has a very high margin to it. And in some cases, the company that provides the product to the salon may actually pay to place it there as an advertisement.


EM: On the business side, how can someone determine the effectiveness of the technology?

MZ: When you leverage mobile, it’s pretty measurable. With our solution, you know if somebody has opted in, and if the content has been browsed on their phones or if they’ve viewed 18 pages of ad content, and they’ve looked at it for the last two-and-a-half minutes. That’s all very valuable information because that means they’re spending that much time on it and there’s value to what the retailer is giving the consumer. So that means you’re on the right track as far as what you’re developing for the consumer.


EM: Each of these new forms of media seem to have their own rules of etiquette—you shouldn’t pin too much on Pinterest, you shouldn’t overcrowd people on Facebook. How can proximity-marketing users figure out how to get their message right in terms of tone, frequency, and content? What’s the secret to engaging someone?

MZ: I think it’s to be as non-intrusive as possible. Again, if the content is valuable, that’s the key. The reason people get tired of being bombarded, I think, is because 80 to 85 percent of the content they’re getting hit with is not really that relevant. It’s not exciting enough to be bombarded with. But if somebody’s giving great stuff, that’s important. And that goes to a business’s strategic objectives and what their initiatives are. If their strategic business objective is to increase per-head spending when somebody’s in the store or increase basket size, as a grocery store would say, then they need to structure their content around that.


EM: Speaking of customers being in the store, there’s been a lot of news coverage lately about “showrooming—the trend of smartphone users going into a retailer’s shop to test out a product they’ve seen online, then buying it on another e-commerce site—and the effects on big and small businesses. A recent Wall Street Journal article talked about proximity marketing being one possible solution for retailers. What have you seen? Don’t these also fall into the category of possibly also being intrusive?

MZ: Not necessarily, because with showrooming [customers] are in the store. The goal is to get you to spend money in the store and not go in and look at stuff then go and buy it somewhere else. So if they’re served an offer that’s made while they’re showrooming, you may, for instance, be able to get an offer relevant to that item, or an item, and provide them with a price that’s listed to engage them with the proximity solution while they’re in the store.


EM: What have been some of the biggest challenges that you’ve faced with this type of technology?

MZ: The biggest challenges have been that there are a lot of options out there from a mobile perspective. There’s proximity, as we do it, via WiFi and Bluetooth, there’s geofencing, there’s just straight text, there’s app-based stuff—there’s a lot of noise in this space. And so the biggest challenge has been that there’s all these other options and getting retailers to take an integrated approach. There’s no one silver bullet. If you really want to communicate with as many people as possible at the right times, you probably want to leverage multiple types of mobile technology offerings to get content into people’s hands. We actually offer all of the above in our solution.


EM: Where do you see this type of technology five years from now?

MZ: It’s projected to reach tens of billions of dollars just in the U.S. It varies whether that might be through the purchasing of solutions like ours, or a digital/mobile ad spend. I think that it’s probably going to move a little slower, but the potential of those numbers is certainly there. And as consumers adopt the method that they like the best, or the multiple methods they like the best, I think you’ll see it grow rapidly. It’s like anything else—it’s all about consumer adoption. That’s what really drives those big numbers. If the consumers want the content delivered to them, then retailers and brands eventually will have to deliver their content that way—if they want to stay competitive.

Body_SweetSpot.jpgby Susan Caminiti.


As most entrepreneurs will attest, it takes drive, focus, and a nearly round-the-clock time commitment to start, and successfully grow, a small business. Yet entrepreneurs, when pressed, will also admit that owning their own company often takes a toll on their personal life, eating into precious family time, vacations, and even sleep.


PQ_SweetSpot.jpgAttempts to grab some of that balance back are not always successful. A recent survey by insurance company Hiscox showed that just five percent of the small business owners it spoke with say they maintain work/life balance by not working weekends. Not having their smart phone at the dinner table or in the bedroom? A paltry three percent of the survey respondents say this is how they keep the work/life formula in check.


The good news is that it doesn’t have to be that way. Entrepreneurs are actually in the best position to create and maintain a manageable level of work/life balance—and are able to set the tone for the rest of their employees. “It really does start at the top,” says Kathie Lingle, executive director of the Alliance for Work-Life Progress in Scottsdale, Arizona. “As the boss, you are in control of how you work and that example sets the pace within the rest of your organization.”


Find some flexibility

That’s certainly true of Lizanne Falsetto, founder and CEO of ThinkThin, a Los Angeles-based company that makes a line of all-natural, gluten-free snack bars. The single mother of two pre-teens says work/life balance for her is all about flexibility. And she’s not alone. The Hiscox study found that ‘flexibile working hours’ was the most popular work/life balance strategy, cited by 51 percent of small business owners. “The idea of work and life being 50/50 all the time just isn’t a reality for me,” she says.


Each day of the week is different for Falsetto, depending on the number of meetings scheduled and what obligations she has with her kids. “Today I had a 7 a.m. call, worked until 2 p.m. and then spent a few hours with my daughter,” she recalls. “I came back in the office at 4 p.m. and worked a few more hours. The rest of the week will be different and that flexibility is what allows me to have balance in my life.”


Falsetto says she extends that same flexibility to her 130 employees. “They know what has to get done and I don’t micro-manage their time,” she adds. On Sunday nights (“After all the kids are in bed for everyone,” she explains) Falsetto has a conference call with her senior managers to review what’s on tap for the week ahead. “It’s a good way for everyone to come in on Monday morning and be able to move full-speed ahead without a lot of confusion,” she says. “I do believe that chaos creates anxiety.”

Know when to turn it off

To be sure, there are times when a certain 24/7 mentality takes over and work/life balance is nearly non-existent. “In the early stages of any business start-up, work is going to overtake other things in your life,” explains Jaye Smith, president of Breakwater Consulting, an executive coaching firm in New York City. If you’re in a competitive business and need to be available to clients or customers, then that’s what you have to do, she explains.


But Smith counsels entrepreneurs not to sacrifice their mental health—or that of their employees—for the sake of responsiveness, a trap that technology makes all the more tempting. “When you promise a client an answer on something, it doesn’t always have to be in the next 10 minutes,” she adds. “It’s okay to suggest getting back to them the next day, if possible.”


The same goes for emails. “You don’t want them going out to clients at 2:30 a.m.,” she advises. “It sends the message that you’re not in control of things and need to conduct business at unreasonable hours. Wait until your normal business hours to communicate.” Not only does this help rein in your own schedule, but it also prevents customers from expecting you to be available at any time of the night or day, she says.


Learn how to take a break

Christine Figliuolo, founder and president of Creations by Christine Events, a wedding and corporate event planning company based in northern New Jersey, has established her own version of work/life balance. “My business is cyclical, with spring and fall the two busiest times of the year,” she explains. Oftentimes corporate events and weddings are back to back and her home life—she’s married with three teenage daughters—gets less of her attention. “I manage through it because I know there’s an end in sight and my schedule will slow down” in the off-season, Figliuolo says.


It’s during those periods that she makes sure to spend time with her daughters, taking day trips or simply going out to dinner or the movies. “I also make sure to take care of myself,” she adds. Yoga, massages, and time to work out are “another element of my business life,” she says. “If I don’t refuel during the down times, I won’t have the energy to get through the crazy times.”


As with most things in life—and in business—balance comes down to the basics, say the experts. Enjoy the work you do. Get enough sleep. Spend (uninterrupted) time with the people you love. Disconnect occasionally and just think. Says Smith of Breakwater Consulting: “An investment in yourself is ultimately an investment in your business.”

Body_QAjackcrawford.jpgby Sharon Kahn.


After founding four successful startup companies, Jack Crawford launched Velocity Venture Capital in 2005. The aim is to provide seed capital for early-stage information-technology entrepreneurs in the Northern California area. Velocity's current portfolio includes anyCOMM Corp., whose software will control separate digital consumer devices from a PC or HDTV, and S Machines, whose semiconductor architecture aims to significantly increase processor performance. Recently, Crawford spoke to business writer Sharon Kahn about what differentiates a good idea from a great one, and the skills small business owners need to succeed.



SK: Can you address the differences between a "good" and a "great" business idea?

JC: The best ideas come from knowledge: understanding of areas where the entrepreneur has a lot of experience and great interest that allows insight into something others don't see. Most ideas start with solving a problem. A great idea takes a quantum leap over established ways of doing business. Facebook created a new way to communicate, a new way to advertise. But pioneers that come up with the transformative ideas aren't always the long-term winners. Fast-followers with really good ideas can often accomplish more. Google, for example, did not invent the search engine, but it is the most powerful company in that space today.


PQ_QAjackcrawford.jpgSK: What do you look for in assessing ideas?

JC: I'm a seed- and early-stage venture capitalist, which means sometimes I invest in companies, but often it’s no more than a guy, a girl, a dog, and a great idea. The intent is to help move these ideas to a product, then a company, revenues, profits, and eventually exit, which means an IPO or purchase by a large company. As we do our due diligence, we look to see if the concept meets four criteria. One is a sizeable market. For a venture capital investment, that means that the product or service will generate $1 billion in annual revenues if every potential customer buys. Two is a sustainable advantage. If the technology is easy to copy, the competitive landscape could soon include 100 or 1,000 competitors, so the idea breaks down. Three is a financial model that makes sense. If the product is too capital intensive, or takes too long to get to profitability, it may not be worthwhile. Fourth is a great team. I will take a good idea and a great team every time. The idea is just the starting point. If it has merit, you still need the management ability to execute it. Rarely will the original idea make it through to the execution stage.


SK: What are some key steps for turning a great idea into a business?

JC: First, let me say you won't make it unless you're passionate. Success is based less on that initial idea than having three factors: maintaining extraordinary passion, keeping a laser focus, and lucky timing. From there, flexibility—or what I like to think of as intellectual agility—is required at so many steps. You need sales skills and confidence to attract capital, talent, and customers.


One shortcut is to go to a trade show, which allows you to talk to a lot of potential customers in a non-sales environment. When I had the idea for a business to help transform college newspapers into online portals, I showed up at a trade show with a poster board that asked if printed newspapers wanted to move online. I talked to a lot of people, and got some great input about how to round out the business, such as adding a calendar function and web-based email. And I got a sign-up sheet with contacts of people interested in buying the service. I went on to found, which was later acquired by a larger company.


SK: But don't you run the risk of someone stealing your idea if you talk with so many people?

JC: In my experience, entrepreneurs hinder their growth by overweighting the value of their idea. You can protect an idea in several ways, and one way is not to talk to anybody about it. The likelihood of success is then very low. To get input, you need to decide how much to reveal. Your experience in the industry you've targeted is probably your initial protection. The next level of defense might be a patent. Other safeguards might involve lining up a unique distribution partner or customer. Or, if you move quickly and confidently, you might establish a lead-time advantage. If someone tried to start a competitive Facebook today, it would be difficult because the audience has already chosen Facebook. The same would be true for Ebay and Amazon.


SK: Aren't great ideas risky?

JC: Great ideas are extremely risky. But the greatest risk often brings the greatest economic returns. To act on a great idea, you have to be comfortable with taking calculated risks with just 50 percent to 60 percent of the information required. You've got to be comfortable with failure and have the ability to adjust. Think of aiming at a target. You miss a little to the left, so you compensate by dialing in closer. You miss again, and adjust again. Then finally you hit the target. Then you hit it again.

SK: Is funding available for great ideas?

JC: At Velocity, we see around 600 opportunities a year. Some of those are just MBAs testing concepts, and others are up-and-running companies looking for a venture round of financing. We probably fund one percent to two percent. But a growing amount of funding is available. The number of angel investors, who supply $25,000 to $250,000 for early-stage ideas, is increasing both in the number of investors and the amount they are spending. New categories of “super angels” or very wealthy individuals who will invest $250,000 to $500,000 are creating funds. Corporate investors are another source. Samsung recently established a $30-million fund that will focus on seed-stage companies. Nobody says it's easy, but great ideas backed by great teams will always get funded.


This interview has been condensed and edited.

Body_QAfranchisee.jpgby Iris Dorbian.


After a career as a captain in the U.S. Army and later director of small business marketing at BellSouth, Nicole Siokis was looking for a challenge that would both fulfill her needs and accommodate her schedule as a mother of a young daughter. She found it by signing up in 2009 as a franchisee for Mom Corps, a nationwide flexible-staffing firm that, since its inception in 2005, has grown into a thriving enterprise with 19 locations across the country. Now president and owner of Mom Corps - Atlanta, Siokis oversees two part-time recruiters who cater to major corporate clients, while registering approximately 18,000 job candidates in the state. (Nationwide, Mom Corps has a database of 70,000 plus candidates.) Recently, Siokis took a breather from her busy schedule to speak with business writer Iris Dorbian about the trials and triumphs of being a franchisee.

ID: What led you to become a franchisee for Mom Corps?

NS: I’ve always worked for big organizations, but I’ve always had an entrepreneurial spirit. When I decided to leave BellSouth, they had the option of letting people go and take [severance] packages. I thought this was a good time for me to go out and do something on my own. With Mom Corps, this was the chance to run my own business with infrastructure support around me. The franchise gave me all of that without my having to invest in it all myself. And as a mom, the Mom Corp concept was something I believed in. The two things combined were a match made in heaven.

PQ_QAfranchisee.jpgID: How did you find out about Mom Corps?

NS: When I left BellSouth, I ended up working for an executive search firm in Atlanta. It was during that time that I got to know the founders of Mom Corps. [The firm] had an informal partnership with them. So I got to know them on a personal level. Then in 2009 when they decided they were going to franchise out, they said they were looking for people who have a business background, but who also understand staffing and recruiting. That’s the background I have. In talking with them it was just something I started to investigate and pursue a little further.

ID: What are the rewards and challenges of being a franchisee for Mom Corps?

NS: The reward is I get to run my own business. I’m my own boss. I make my own schedule and I set my own priorities. Anything I want to do with my business is up to me. And I love that part of it. The challenge for me is how to grow the business. When do I hire somebody? How do I hire somebody? What area do I hire somebody in? What payroll services do I use? What are the best resources for me on how to grow and where to grow?

ID: Describe in brief a day in the life of being a franchisee.

NS: My week always starts on Sunday because Sundays I’m looking at the week’s priorities, what I need to get done that week. Then I start on Monday meeting with the recruiters and then we outline what the goals, objectives, and deadlines are for that week. Then once we have a job we’re trying to fill—once we get candidates—I will talk with all of those candidates before they go and interview with my clients. And then I’ll get feedback from the clients to find out how the interviews went. Then I talk to the candidates and get their interest levels and start doing reference checks. Because I maintain the client relationship, I like to be actively involved in that and let the recruiters do the sourcing and the initial interviews with the job candidates.

ID: What would make clients come to Mom Corps for staffing needs?

NS: They come to us for two different reasons. In the larger companies, it may be that they have a project that’s going to take six months and need someone that’s going to help them for that time. Once that project is over, then that person is out. A great example of that is our client Equifax. They’ll say one of their recruiters went out on maternity leave, so they need a recruiter to work for six months until the staffer returns.

In the smaller to midsized companies, they tend to use us when they have jobs that are new or they’re not sure if they’re sustainable. For example, they’ll say, ‘I have this new job in which I see this need (i.e. accountant, marketing). I think it’s 25 to 30 hours a week. I’m busy now and I’m hoping it’s going to be busy six months from now.’ So they’re looking for a professional level person who isn’t necessarily looking for that 40 to 50 hours a week. Somebody who can appreciate that reduced-hours, flexible schedule.

ID: What kind of marketing support, if any, does the corporate office provide you as a franchisee? Further, what kind of demands, operational and financial, does corporate make?

Our corporate folks provide great marketing support. Corporate manages our national PR efforts, which often trickles down to local PR opportunities as well. They provide overall brand strategy and develop collateral such as sales tools kits, e-brochures, weekly candidate newsletters, quarterly client newsletters and website and Facebook content development. (Our local Facebook pages are tied to the corporate page but we can add our own content as well).


In terms of operational/financial demands, there are certain reporting requirements we have such as quarterly financials. We do have an operations manual that dictates several processes and requirements that must be followed (i.e. filing paperwork such as I-9 verification for all new hires in accordance with labor laws, etc). We also have revenue/royalty minimums after franchise has been in service for one year.


ID: Based on your experience, what would be your tips to other people wishing to become franchisees? What should they do and what should they avoid? 

NS: Due diligence is really keen. Look at the FDD—that’s the disclosure document. Talk with other franchisees. Find out from some of the franchisees what are the challenges and what kind of support do they get from the corporate office. Really make sure you do your prep work ahead of time.  

ID: What type of business person would be better suited to become a franchisee? 

NS: If you work for a company and you want to go out and do something on your own, it’s a big capital investment to have to put all this infrastructure in place. Franchising gives you an opportunity to run a business, but it also gives you some infrastructure that if you went out on your own exclusively, you wouldn’t necessarily have. 

Body_QASethHaber.jpgby Susan Caminiti.


In 2001 Seth Haber, 33, was working in Boulder, Colorado as an IT specialist with McKesson Corp., the giant healthcare information technology company. It was his first real corporate job, but it didn’t take him long to figure out that it would likely be his last. On weekends and vacations Haber pursued his love for the outdoors and camping, eventually developing a lightweight, portable nylon hammock for sleeping that became the first product of his company, Trek Light Gear. In a conversation with business writer Susan Caminiti, Haber describes what it took to leave his well-paying corporate job, why it’s important to do what you love, and how listening to your gut can be the best business skill an entrepreneur can develop.

SC: Was there a specific day when you realized that corporate life just wasn’t for you, or did it happen more gradually than that?

SH: I can’t pinpoint an exact day, but it did happen pretty quickly after I joined McKesson. I had a clear path of seeing my boss, and his boss, and his boss’s boss and I knew I didn’t want to be doing this for the rest of my life. I didn’t see how, even at a senior level, I would have any impact on the bigger picture. Plus, when friends would ask, ‘So what do you do for a living?’ I never really felt like I had an interesting answer to that question.

PQ_QASethHaber.jpgSC: So how did Trek Light Gear get started?

SH: It happened very organically. I loved camping and had been doing it my entire life. But as I was getting older I was having some frustrations with it, especially with the sleeping. I’d wake up in the morning in my tent with this hot, stuffy feeling and couldn’t wait to get outside. When the weather was nice I would set up my sleeping pad outside the tent and that was much better. I loved camping, but just wanted the sleeping part to be better.

SC: How did you come up with the idea for the hammock?

SH: A friend of mine suggested it. There were camping hammocks on the market but they were pretty much just big balls of net that would get tangled. The first night I tried sleeping in a hammock wasn’t the most comfortable, but it was still 100 times better than sleeping in a tent. That’s when I sort of had my light bulb moment and began looking for other materials for the hammock besides the netting. I found this lightweight, parachute nylon material and I knew I was on to something. It solved my problem, but the more I spoke to other people about it the more I knew it was a great idea. Everyone was so enthusiastic.


SC: How else did you spread the word about your product?

SH: In 2003, I had a manufacturer make 100 hammocks and I sold them all at the Boulder Creek Festival over Memorial Day weekend. Even though I saw this great reaction, I still wasn’t thinking of this as a business. I just saw it as a way to make a little extra money during the summer.

SC: When did you start to think of this as something other than a weekend hobby?

SH: I launched the website for the hammocks in late 2004 and then in 2007 opened a kiosk in downtown Boulder. Since I was still working at McKesson full time I had to hire people to work the kiosk. That’s when I started thinking about leaving my job. I’d work these festivals on the weekends and talk to people about the hammocks and love it. Then when I had to go back to work on a Monday, it was awful. It was like the feeling you get going back to work after a great vacation. Except it was happening every week for me. After a while I started feeling like I was living this dual life—like I was Batman on the weekends and Bruce Wayne during the week.


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SC: How did you make the decision to leave McKesson?

SH: First I started asking lots of people—business associates, mentors—how do you know when it’s time to take that leap? The best and most consistent advice I got was, you’ll just know.


SC: Did you?

SH: Sort of. In mid-2007, my company outsourced a whole bunch of people in my department and offered severance packages to those of us who were going to leave. I just knew in my gut that this was the sign I was looking for. I took the severance money, socked away a whole bunch more, and started full-time with Trek Light Gear at the beginning of 2008, running it out of my home.

SC: What was it like making that transition from a corporate job to your own business?

SH: I went at it with the same attitude I do with everything: if you don’t know how to do something, just research it and figure it out. I didn’t go to business school, so for me everything was learning on the job. Before I started hiring people, I wanted to make sure I understood every aspect of running the business.

SC: What’s been the biggest challenge?

SH: Doing as much as possible with as few resources as possible. I didn’t get showroom and office space until earlier this year. The business has grown through the website and the kiosk. I have one full-time employee and two part-time workers. I could have grown the business faster if I had brought on more people, but I wanted to stay in control and not have the expenses get out of hand. This business has been financed with credit cards, lines of credit, and cash flow. There are no outside investors.

SC: How has the company grown since you started doing it full-time?

SH: Well, last year we started selling on the Home Shopping Network. We had a few time slots on TV and we’re also on the website. In June, Amazon will be stocking our entire product line, which now includes T-shirts and tote bags. Up until these two, I had only been doing direct sales, but HSN and Amazon were too big to say no to.


SC: What advice would you give other folks considering leaving a corporate job to strike out on their own?

SH: Give it a go. I want to spend my time on something I enjoy. Isn’t that the reason for starting your own business in the first place? But keep in mind if it fails, it’s not the end of the world. If Trek Light Gear doesn’t work out I can always get a job. So don’t let yourself be paralyzed by that fear.

Body_DivideConquer.jpgby Iris Dorbian.


Haralee Weintraub has a business arrangement she considers ideal. For the past five years, she and her partner Shelby Schefstrom at Haralee Sleepwear, which manufactures clothing for menopausal women, have been dividing up responsibilities befitting their roles as founders based on temperament and aptitude.

“I am responsible for sales and marketing,” explains Weintraub, whose company has a skeletal staff of two, plus myriad independent contractors, “while my partner is responsible for shipping, receiving, inspection, and folding of the products.”

“[Shelby] is very easy going,” says Weintraub. “When we have to go to our manufacturer, he is the best person for the job. We meet with all our independent contractors together and get a sense of whom they relate to better and that's who works the relationship. Sometimes it’s a good cop, bad cop routine. If someone does not perform well or meet a deadline, I am the person that does the talking: I am the bad cop so to speak. It works out well for us.”


PQ_DivideConquer.jpgIn the small business sector, where both human and financial resources may be severely limited, sometimes divvying up all the tasks to two persons can be a viable shorthand solution. What are then some tips that small business owners can employ to split up roles to improve their business flow and ROI?  

Map out each owner’s respective areas early on 

Jeff Kear, owner of Planning Pod, a software company that serves small businesses, says clearly defining each owner’s role is a critical best practice “because if you're both working on everything all the time you will duplicate efforts and be constantly stepping on each other's toes.” Kear, who shares co-CEO duties at Planning Pod with his partner Steve Feingertz, is well versed in the protocol of partitioning responsibilities of a specific job. In addition to launching Planning Pod with Feingertz, both have been co-CEOs with each other since starting the Denver, Colorado-based branding agency Kear Stevens in 2001. They also run, an online software company for event and wedding planners.  


As is the case with Haralee Sleepwear, Kear and Feingertz have also found that a successful division of labor is predicated on knowing and leveraging each person’s talent.  


“One of Steven's strengths is product development,” explains Kear. “At the beginning of a project, he and I will sit down and make the big decisions such as the assets required to complete it. We will then agree on timelines. Then he manages that portion of the business, gives me daily updates and consults me when he needs my opinion or when a larger decision needs to be made.” While product development is underway, Kear works on sales and marketing, which includes market research, branding and positioning, search engine optimization, social media, and public relations. He’s also responsible for legal matters, such as contracts. Not only does this collaborative arrangement prevent a repetition of labor, but it also allows each person to concentrate on specific areas of the business. “We have another set of valuable ears and eyes when decisions need to be made,” Kear notes. “We used this process when building Planning Pod and shaved about three months off what it took to build our previous software tool.” 



Dare to separate and be “virtual” 

Jay Turo and his partner Dave Lavinsky co-founded Growthink, a small private equity firm for small business entrepreneurs, in Los Angeles 13 years ago. “For the first five years of Growthink, we worked in the same small office, with our desks literally across from one another,” recounts Turo. But in 2004, the pair took the company bicoastal and hasn’t looked back since. “When Dave moved to New York, our personal productivity soared along with the growth and the success of the business.”  


According to Turo, who says he handles the investment banking and consulting components of the business while Lavinsky helms the publishing side, the physical separation between them resolves a problem that Turo sees with many co-founders/partners. “They invest way too much time in talking with each other when they really should be out independently talking to employees, customers, partners, investors, and other key stakeholders,” he explains.  


Find a partner with a different skill set 

You remember the old adage about opposites attract? Well, as in a romance, sometimes in business pairing up different personality types can be a blessing.  


“I can’t tell you how many people I know who started a business with someone who had an identical or very similar skill set as they had,” says Kear. This can often lead to disputes over control of one facet of the business while other critical aspects are left to languish, he adds. “Sometimes you need to subordinate what you want to do for the success of the business and you have to learn new skill sets. Going into my first business I was a copywriter but had to quickly become a salesperson because I was pretty good at it and the business needed me to go out there and generate revenue.” 


Communicate, communicate, and communicate 

This may sound like a business platitude but it bears repeating: If you want to be adept at carving up the workload of small business ownership between you and another party, you will have to master the complex nuances of communication. This can entail ongoing web or IM chats, daily updates via e-mails and phone calls and (if you’re geographically near) face-to-face discussions. Not being in the loop could culminate in disastrous decisions leading to lost revenue and clients.  


Kear agrees, and says he and his partner operate a “CEO hotline,” which he likens metaphorically to a “batphone” or a “red phone in the President’s office.”  



He further clarifies: “My business partner and I are always available to each other via phone and text because you never know when a decision needs to be made and something needs to be discussed. Since we run several Internet-based businesses, we often have emergencies in the early morning that need to be addressed. It may seem like a drawback or challenge, but that's part and parcel of being a co-CEO, and it makes decision-making much more efficient.”

Body_QAejmartinez.jpgby Iris Dorbian.  



When EJ Martinez initially launched Power Pizzeria in 2004, the then-24-year-old University of Miami graduate believed his concept—selling healthier pizza—was good enough to translate into healthy profits. Unfortunately, the former marketing major’s lack of research and experience in the restaurant industry doomed the business, which closed a year after opening. But like the proverbial phoenix rising from the ashes, Martinez used the lessons learned from his mistakes and took over a failing pizzeria at the end of 2005 and spent the next four years fine-tuning the art of running a restaurant. Since then, Power Pizzeria has taken off. In 2011, annual revenue for the company reached $3 million and it employed 80 employees in several locations across South Florida. After recently launching a franchise program for his pizza business, Martinez took some time to speak with writer Iris Dorbian about the importance of learning from failure.  


ID: What do you think went wrong the first time?  

EJM: From my marketing classes, I knew how to advertise the product; I just didn’t know how to fulfill orders. I never worked in a restaurant before so I kind of went into it blindly, not knowing much about inventory, tracking costs, or providing service. I had a good idea but I rushed into it a little too fast without doing the necessary research. In the restaurant world, once you provide mediocre service to customers, they pretty much lose faith in you and stop ordering. I decided to close that restaurant and take some time to learn the business. 



ID: How did you recover from the failure and rebuild your business?  

PQ_QAejmartinez.jpgEJM: I went to pizza expos, restaurant shows, read a bunch of books, and learned how to run the business. I knew I had a good product and a good idea. I just needed to know how to execute it. During that time when I was learning how to run a restaurant, I had the opportunity to take over a pizza place here in Miami that was not doing so well. I decided to give it another shot and open another restaurant using everything I had learned, correcting all the mistakes I had made with the first business, and coming in with all new ideas. I was much more organized and prepared.  



ID: What did you do differently the second time around?  

EJM: We added some items to the menu and just learned how to treat the customers right. I also executed basic restaurant principles better, such as how to get deliveries out on time, how to make sure the product is consistent, how to track your inventory, and how to portion correctly. In our first store, there was no inventory control of portions, so our costs were extremely high. Previously I didn’t know how to manage basic day-to-day operations [such as] how many delivery drivers you need and how to route those deliveries more efficiently.  



ID: Can you talk about your expansion and how you got involved with opening a franchise program? 

EJM: I took [the period of] 2005 to 2010 to perfect our systems and to open multiple stores—we opened four stores between 2005 and 2009. I wanted to get a grasp of how to run multiple restaurants. I had various franchise requests, but didn’t feel we were ready to franchise until I got a good grasp of [managing the business]. So we spent that time just tweaking everything. Then in 2010 we started to develop our franchise program, which launched earlier this year at the Miami Franchise Expo.  



ID: Based on your achieving success the second time around, what’s your advice to other entrepreneurs who may be having a rough time reinventing or rebuilding following failure?

EJM: Learn from your mistakes. And keep at it. There were times when I thought about dropping everything and quitting, but then I thought I had a good idea. I didn’t want to be that person who, looking back, said ‘I should have done this or that.’ It’s really [about] taking a step back to regroup. Learn what you did wrong and talk to as many people as you can. Go and see what other people are doing, right or wrong. Keep trucking along. It’s tough to fail. No one likes to fail, but sometimes it’s good to have a failure before you begin to succeed.  

Body_Franchising.jpgby Susan Caminiti.


John Lyons has been cooking most of his adult life, but it’s always been in someone else’s kitchen. That finally ended in 2010 when he and his wife Theresa opened their first Muscle Maker Grill in Oakland, N.J. The franchise, which has about 200 locations across the country, offers wraps, salads, and other healthier alternatives to fast food. The hours are long—an 80-hour workweek is typical—and managing a staff of inexperienced, mostly 20-somethings is a challenge, Lyons says. “It seems like it gets harder and harder, having to deal with staffing issues, and always being concerned about the food quality and customer service,” he says. But then if you ask him if it’s all worth it to be his own boss, his answer is simple. “I love it.”


Lyons has plenty of company. Consider these numbers from the International Franchise Association (IFA), the Washington, D.C. trade group that represents franchisors—the companies you buy a franchise from. Sales of goods and services provided by franchises now account for roughly $2.1 trillion annually. There are approximately 825,000 franchise units operating in the U.S. and those businesses employ nearly 18 million workers. The IFA’s Franchise Opportunities Guide lists over 1,100 franchise concepts, covering everything from accounting and business services, to pet care and wildlife control. “There really is a business for everyone,” says Alisa Harrison, senior vice president of marketing for the IFA.


PQ_Franchising.jpgThere’s a franchise for nearly every budget as well. Prices start at around $5,000 for a service business without a lot overhead and run up to nearly $2 million for an established brand such as McDonald’s. (The average total upfront investment according to the IFA is $250,000 to $300,000.)


Bumpy Past

Yet despite franchising’s popularity, the industry did suffer in the wake of the financial crisis. In previous recessions, laid-off workers, tired of being at the mercy of large corporations, often used hefty severance packages or home equity loans to purchase a franchise, thereby fueling the industry’s growth, explains Harrison.


“That all went away in 2008,” she says. “Few people were getting severance packages and with house values so depressed all over the country, not as many people were able to tap into their homes for the money.”


The industry is slowly seeing signs of improvement. According to data from the IFA, the number of franchise establishments is expected to increase 1.6 percent this year after falling for the past three years. The number of folks employed by franchised businesses is estimated to grow by a little over two percent in 2012.


Of course, that doesn’t mean that Hungry Howie’s Pizza or Camp Bow Wow (yes, those are real companies) will become the next Subway or Dunkin’ Donuts. But franchise consultants and other industry experts say that certain demographic and lifestyle trends are clues to which concepts are popular right now and therefore could be your best bet.


One segment attracting a fair amount of attention is elder care. Ed Kushell, president of Franchise Consulting Group in Los Angeles, says an aging population combined with government cutbacks in senior citizen services has fueled the growth in this area of franchising. Home Instead Senior Care, Comfort Keepers, and Home Helpers are some of the well-known companies in this segment.


A quick look at the numbers explains why these franchises could be good bets: Last year the oldest baby boomers began turning 65. By 2030, when all of them will have reached that milestone, fully 18 percent of the nation's population will be at least that age, according to Pew Research Center population projections. Says Kushell: “The number of elderly people in this country is not going to slow down anytime soon. Franchises in this segment have the demographics in their favor.”


Franchises that cater to health and wellness, such as gyms and so-called med-spas, are also attracting plenty of interest. Massage Envy is the largest massage therapy franchise in the country, with nearly 800 locations in 45 states. The company credits its popularity to the fact that Americans spend between $5 billion and $7 billion annually on massages. In fact, many Fortune 500 companies now offer massage as an employee benefit designed to reduce stress, according to the company.


Sol Glastein opened his first Massage Envy in Closter, N.J. in 2006 and says from the beginning, “the results were phenomenal.” He attributes the concept’s success to a business model that taps into the fast-paced, often stressful rhythm of modern life. “We’ve taken the massage out of the realm of something for the rich and wealthy and made it something that is both affordable and therapeutic,” he says. Customers can purchase a membership—like a gym—that entitles them to a one-hour massage each month. Glastein opened his second location in Waldwick, N.J. in 2010 and is so bullish on the concept that he recently bought the rights to become a regional developer, allowing him to sign up franchisees throughout western Pennsylvania.


Buyer Beware

While franchising has made many people rich, it’s not a business model without risks. According to Kushell, too few potential franchisees conduct the sort of due diligence necessary to determine the financial soundness and growth strategy of the franchisor. “We turn away 75 percent to 80 percent of the people who approach us about franchising their business because they just don’t have a business model that’s viable,” he says.


If a potential franchise interests you, Kushell advises asking about the company’s growth strategy and expansion plans in addition to examining its financial statements. And pay special attention to where a franchisor is looking to open new units. “If all the locations are on the East coast and you’re being offered a chance to open the first location in Texas or California, run for the hills,” Kushell advises. Why? Because one of the biggest advantages a franchised business has is the power of its brand name. If you own the only location of Mary’s Maid Service in the state, you’re getting little leverage from the name and the chance of failure escalates dramatically, he warns.


Keep in mind too, that part of franchising’s appeal is that you’re buying an established business concept with a particular way of operating. If your goal is to buy a franchise in the hope of using your considerable management or marketing experience to overhaul operations, a franchised business is probably not for you.


And finally, take the time to understand not only the franchise fee, but also the ongoing royalty and advertising costs, says Harrison. All of this information is found in a franchise’s disclosure circular, a document the Federal Trade Commission requires of all franchisors. In addition to the one-time franchise fee, you’ll pay ongoing royalty costs, typically equal to four percent to 10 percent of gross sales. You’ll also be responsible for contributing anywhere from one percent to six percent of sales for advertising expenses. The test of a well-run franchisor, says Kushell, is one that makes its money from these on-going royalties, not one-time franchise fees.


Running a franchise is really no different than any other business venture. It requires a lot of hard work and long hours with no guarantee of success. Yet the appeal of venturing out with an established concept and brand is clearly a business model that holds sway with many entrepreneurs. It certainly does with Lyons of Muscle Maker Grill. Despite the long hours and lack of vacation time, he and Theresa have already bought the rights to their second store.

Body_BusinessHindsight.jpgby Iris Dorbian.

“Regrets I’ve had a few,” crooned Frank Sinatra in the famous song, “My Way.” That fabled lyric can also apply to many small, established business owners when they look back in hindsight at their entrepreneurial journey, comparing the glorious highs to the abysmal lows. What do some of them wish they had known way back when they launched their business?

Success starts with the right people

David Guralnick, president of Kaleidoscope Learning, which designs and develops online learning courses for companies, wishes he had taken more time to find staffers that were the right fit for his company. He recalls an incident when he needed to hire a lead programmer to design and build a product for a Fortune 100 client, which was also co-funding the project. Because his business was still in its nascent phase, the project’s importance was heightened considerably. Unfortunately, his rush to hire ended up being counter-productive.

“As it turned out, I went through two lead programmers who did not work out before finally finding the right lead,” recalls Guralnick, whose 14-year-old company now has 40 employees. As a result of this staffing debacle, the product not only took longer than planned to complete, it fell short of Guralnick’s expectations. “More patience would have served me well,” he says now. “As an entrepreneur, it’s easy to start to think that you can do everything yourself, or at least to underestimate just how critical it is to work with great people whose styles mesh together well. Even if someone’s very skilled, things may not work out well if they’re unhappy in their role or aren't the right fit in terms of work type or personality.”

Don’t be shy about asking for help

Natasha Ashton, co-founder and co-owner of Petplan (a pet insurance company that launched in 2006), echoes Guralnick’s sentiments and also urges small business owners to surround themselves with experts who can help their company grow. “One of the best decisions we ever made as a company was to recruit Vernon Hill as company chairman,” explains Ashton. “His extraordinary experience in the financial services industry as the co-founder of Commerce Bank, coupled with his passion for creating fans not just customers, and his own experience as a pet parent, allowed us to take the business to the next level.”

PQ_BusinessHindsight.jpgTrust your gut

However, there’s something to be said for believing strongly in oneself. David Black, founder and CEO of Vicinity Media Group, which publishes several Northern New Jersey regional magazines (Suburban Essex, Vicinity, and InBiz), wishes he had placed a greater premium on his own instincts rather than ceding his authority early on to so-called experts.

“I’ve discovered only in the past couple of years that I know more about my business than the experts do,” concedes Black, who launched his company 20 years ago. “I only had a high school education and was never in publishing before. My theory was to get people who knew more than me and let them achieve my vision. It turns out they don’t necessarily get what you’re trying to do.”

Turning obstacles into opportunities

For husband and wife team, Natasha and Chris Ashton, it isn’t so much the regrets that they share, but an awed realization of the challenges they had to grapple with shortly after they began Petplan. Launching their startup in 2006, in the face of skepticism and a combined $250,000 in student debt, the Ashtons quickly found their foothold and by 2007, were seeing double-digit growth each month. But later that year, the burgeoning success of Petplan almost came to a crashing halt thanks to an unexpected turn of events.


“Chris shattered his ankle and broke two ribs in an accident,” recounts Natasha. To make up for his absence—Chris subsequently endured several surgeries and needed six months of rehabilitation—the Ashtons decided they must delegate if the company was to survive. “Our choice wasn’t safety or risk, but rather sink or swim,” she recalls. “By empowering our day-to-day managers, we could focus on our growth strategy.” (By 2008, Petplan’s staff size was 12 employees; today the company has more than 60 employees, according to Natasha).

Maintain focus, but be flexible

“As a small growing business, opportunities can seem endless,” says Guralnick. “There can be a temptation to jump at each new opportunity. On the other hand, being small does often allow you to be flexible. If something isn’t working or there is a particular new idea that is worth exploring, you can make changes. It’s a tricky balance.”

Establish core values

Set parameters for what your company will do and use that as a basis for making decisions.  “Regardless of how exciting an opportunity may seem, if it doesn’t support your core values, it probably isn’t right for you,” says Natasha Ashton. “As an organization of pet lovers, pets’ health and wellbeing is at the forefront of every decision we make.”

Find a space of your own 

In Virginia Woolf’s immortal short essay, “A Room of One’s Own,” published in 1929, she stressed the importance of women finding a private sanctum in which to incubate and cultivate their artistic ambitions and thus put them on par with men. Although Woolf’s admonition wasn’t about business, her passionate exhortation is akin to a best practice that Garden State publisher David Black emphasizes to small business owners just beginning their careers.  


“One of the best things an entrepreneur can do is find a space that they can think and dream creatively as often as possible,” he advises. “Because when you’re trying to do things in your head as an entrepreneur, it’s a lot different from reality.” 


To help him slip into a creative meditation, a state of mind he calls “a zone,” Black says he will often stay at home rather than go to the office and be distracted by the din of daily business activities. Engaging in this kind of focused reverie is an imperative for small business owners, particularly entrepreneurs seeking to embark on a venture. “You need to have a dream first and pursue it,” he reflects.  

Body_SilentPartners.jpgby Erin McDermott.


Psst. Is that silent partner you’re seeking really the best move for your small business?


When it comes to finding additional funding these days, it’s sometimes a tough road. As a result, people are looking at other avenues of capital, taking on all types of new partnerships, and even tapping into money through crowd-funding sites such as Kickstarter, Indiegogo, and AngelList.


Traditionally, silent partners have been the go-to investors, often family and sometimes friends, who pump in funding but also agree to stay out of day-to-day operations. They get a share of the profits and—unless there is a limited partnership agreement that rules out liabilities—risk taking a hit if an enterprise runs into trouble. Their presence is no secret to people familiar with a company, and often they are prized for their industry contacts or standing in a community.


So why choose to remain silent? There can be several reasons. For some investors, it’s a way to avoid the unwanted entreaties of others who also are seeking capital. Others might use a silent partnership to keep quiet about the extent of their business portfolios or to stay one step removed from a venture that they don’t want to be publicly identified as backing.


So, is this silence really golden for a small-business owner?


PQ_SilentPartners.jpgWhat you don’t get for your money

Mitchell D. Weiss doesn’t see much value in the proposition. He’s a longtime financial-services executive and entrepreneur who now teaches finance at the University of Hartford and is the author of Life Happens: A Practical Guide to Personal Finance from College to Career. To him, owners who recruit the strong, silent type of partners are missing a critical opportunity to gain knowledge from others who know the stakes and have years of experience and connections that are priceless for an entrepreneur.


“I wouldn’t want money from people who aren’t going to help me. I want someone who isn’t just a checkbook, but someone who’s in a position to mentor me and offer advice,” Weiss explains. “What’s more important for entrepreneurs is to seek out people who can give you good feedback. Not someone who hasn’t made a payroll, or can’t relate because they’ve never faced the pressure of running a business.”


Weiss himself has been there with business relationships both silent and not so silent. He recalls dealing with a principal at one of his early ventures who declared that he “likes his partners limited” and made clear that he wanted little advice from others, even while seeking investors. “That’s also known as ‘Give me the money and shut up,’” Weiss says now, laughing. “In the end, I learned a lot of good things and a lot of lessons about what not to do.”


Jaine Lucas also sees many entrepreneurs missing the boat.


“One of the issues with crowd-funding is you get the money, but not the advice, coaching, and mentoring you’d receive from angels, VCs, or others who might financially back your company,” says Lucas, an entrepreneur, former Fortune 50 marketing executive and now executive director of the Innovation & Entrepreneurship Institute at Temple University’s Fox School of Business in Philadelphia. “Most entrepreneurs will tell you that access to coaching and other people’s networks are just as important, if not more so, than the money.”


There’s always an exception

But Lucas does see the value of silence with one often-tapped group of investors: friends and family.


“They are often too involved emotionally and cannot see things objectively,” she says. “I see these things all of the time with our younger entrepreneurs who have very little access to capital other than credit cards and friends and family, so they take money from Mom and Dad. The problem is, to Mom and Dad, this promising entrepreneur is still their baby—and they don’t know anything! I see so many family relationships really impaired by money—and money has a way of blowing things up.” 


One way to avoid that conflict Lucas says, is to make sure terms are clearly outlined well before any funds are invested, including whether the friend or family member will have any right to input in the venture. “Sadly, it isn’t treated as seriously as it should, and agreements need to be put in place before any money exchanges hands,” she says.


Today, most investments come with an extra two cents

“I see [silent partners] as something that’s becoming a thing of the past,” says David Luk, the 33-year-old chief executive of Quewey, a startup online network of experts that facilitates business expertise via free question-and-answer platforms and paid phone-consulting sessions. As people become more sophisticated about investing, Luk says they should feel the urge to provide advice so they can contribute added value to their investment.


“If you asked me to go out and search, in this early funding round, for investors who want to be silent, I think it would be hard to find that. And frankly, I don’t want that,” Luk says. “If I have a choice between an investor who has a willingness and ability to help versus someone who prefers to stay silent and on the sidelines, I’d rather have the person who can add value and not just the capital. We’re a startup and it seems like a waste of a potential resource.”


Often, it’s elusive resources like experience that are most important for growing small companies—and sorely needed at crucial turning points—such as getting down to the business of using that new capital wisely and making money for all of your investors, silent or not.


Weiss says he’s seen entrepreneurs get an overzealous sense of “We’ve got it!” when funding does arrive. “Investors want that money back, and want their investment to grow—you’re just renting it,” Weiss points out. “It doesn’t just come with a lipstick kiss on the bottom of a Hallmark card.”

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