• Ian MacMillan Explains a Quick Net Present Value Tool

    Ian MacMillan says it is better to be "roughly right" than to be "precisely wrong." That is a driving notion behind the BareBones NPV tool that MacMillan, professor of innovation and entrepreneurship at Wharton , and Rita McGrath , who teaches at Columbia University Business School . NPV stands for Net Present Value, and the tool is designed to give innovators and investors a better sense of whether a business idea will generate necessary revenue, and for how long it will remain profitable in a highly competitive business climate. MacMillan explains the tool in this video from Ideas@Wharton: Rita McGrath has more information available on her blog, and provides a downloadable version of the tool here .

  • Steve Westly: Clean Technology to "Drive" the Economy

    Tesla Motors announced last week that it was receiving $465 million in low interest loans from the federal government --part of $8 billion the government gave out for "advanced vehicle technologies." So it is now full speed ahead for the electric car manufacturer, and Steve Westly , a member of Tesla's board of directors, argues that Tesla's success is a sign that entrepreneurs in "clean technology," are poised to lead the economic recovery. In this talk for Stanford's Entrpreneurship Corner , Westly, formerly Controller and Chief Financial Officer for the State of California (and likely pleased that he isn't in that role today), and before that a key executive at eBay, says the zero-emission-vehicle will become a product "that people have to have" and that will spark new investment and strong growth that will "drive" the economy:

  • Boxee CEO on Entreneurship in the Recession

    Avner Ronen knows how to make a splash with a startup. In launching his new online video company, Boxee , Ronen has disrupted the TV industry and drawn a lot of attention. Heavy hitter media owners NewsCorp and GE are troubled by Boxee's emergence , and seem inclined to make Ronen's life a little more difficult. But in this economy there is no time to waste. Worry about the long term later. There are no "angels" out there, Ronen says in this BigThink video, so entrepreneurs have to be quick, fast, and agile:

  • Bringing the Startup Mentality to Managing a Newsroom

    As newspapers continue to struggle to keep afloat, news managers are desperate for ways to respond to a shifting business climate. Mark Briggs advises them to ditch the "command and control" management style, and adopt the mentality of a startup business. Briggs wrote Journalism 2.0 --covering the opportunities for the news media in the digital age--and he blogs at a site of the same name. Inspired by some of Internet entrepreneur Scott Porad 's ( FailBlog.org and I Can Has Cheezburger? ) writing, Briggs came up with with some core ideas for bringing the startup culture into the newsroom. 1. Divide and conquer: Pick 2-3 small teams and give them decision-making authority. In other words, allow them to launch anything the whole team agrees is worth trying. But pick the right people. Remember, there are certain types of people who prefer planning to progress. That’s not who you want. 2. We report, you decide: Use the weekly or monthly meetings that normally serve to seek clearance on new projects as a progress update. So instead of “we’d like your blessing to try this new approach,” the message would be “we are trying this new approach and this is what we’ve seen so far.” 3. Don’t let money stop you: If it’s a service that costs money, don’t waste time traveling up the chain of command to get approval. Either ask the vendor for a free trial (good service providers will be flexible, especially in this climate), or if it’s an online technology, look for an open source solution or find another news organization that will share some code. Read Briggs's full post here .

  • GM's Bankruptcy, New Era for Smaller, Innovative Auto Companies

    General Motors is likely to file for Chapter 11 bankruptcy early next week . This might have come as a shock a decade ago, and yet any bad news for the automaking giant raises few eyebrows today. So what is to become of the US automanufacturing business now? In the latest Wired Magazine , Charles Mann suggests we are entering a new age for the industry. One that will reward smaller, innovative companies--much like what happened in the comuter industry three decades ago: If a domestic auto industry is to survive, it will have to incorporate and encourage breakthroughs from outsiders like Transonic. Automakers will need to transition from a vertical, proprietary, hierarchical model to an open, modular, collaborative one, becoming central nodes in an entrepreneurial ecosystem. In other words, the industry will need to undergo much the same wrenching transformation that the US computer business did some three decades ago, when the minicomputer gave way to the personal computer. Whereas minicomputers were restricted to using mainly software and hardware from their makers, PCs used interchangeable elements that could be designed, manufactured, and installed by third parties. Opening the gates to outsiders unleashed a flood of innovation that gave rise to firms like Microsoft, Dell, and Oracle. It destroyed many of the old computer giants—but guaranteed a generation of American leadership in a critical sector of the world economy. It is late in the day, but the same could still happen in the car industry; it just has to harness our national entrepreneurial spirit to develop the next wave of auto breakthroughs. Read Beyond Detroit: On the Road to Recovery, Let the Little Guys Drive here .

  • Microsoft's Ballmer Says Now is a Good Time to Start a Business

    Last week Microsoft CEO Steve Ballmer went back to his old business school, Stanford, and spoke to a class of students studying entrepreneurship. And he told them that this is "really a good time to start a business." The global economic crisis, as bad as it is, has provided a corrective measure for good entrepreneurs. Ideas that are worth funding will get it, while bad ideas will not take advantage of a broken system. “The ideas that weren’t good enough shouldn’t have been funded and they won’t be funded today,” Ballmer tells the students. And "t here may be more opportunites in the long run, even if the Entrepreneurial opportunities are less 'frothy' than they might have been in the short run." Here is Ballmer's lecture:

  • Seth Godin on the Power of Tribes

    Seth Godin is many things: internet guru, entrepreneur, best-selling author, blogger. In the past, we would have said he "wears of many hats". But in the web 2.0 world, it might be better to say he is a member of many tribes. He is especially adept at sharing ideas--whether his own or those of others. And he says that in today's world of growing social media outlets, tribes--groups of people founded on shared ideas and values--are back. And thanks to the growth of tribes, the age of mass marketing, he says, is dead. Here is Godin speaking about leadership and tribes in a TED Talk :

  • Values Based Entrepreneurship During "Great Recession"

    Even in this global economic crisis, Mike Hannigan , president and co-founder of the "green" business product company Give Something Back , says "The money to scale the socially responsible business sector is here." When Give Something Back started in 1991, Hannigan says he and his co-founder simply copied Paul Newman and the Newman's Own business plan to start their own socially responsible business. But times have changed and entrepreneurs looking to lead socially responsible companies are well positioned for success. Hannigan, speaking as part of a panel of socially responsible business leaders for The Good Business Network in San Francisco, names four reasons now is a good time for he and his peers: -There are successful business models to follow; -Business schools are training people for values-based business management; -Hundreds of new social networks help these businesses, much in the same way Chambers of Commerce helped start-ups throughout 19th and 20th Centuries; -and venture capital firms are now looking to fund businesses with social agendas. Here is Hannigan speaking at The Good Business Network panel: You can watch the full discussion here .

  • Twitter: Changing the Web, Business, and Business on the Web

    Tim O'Reilly , founder and CEO of O'Reilly Publishing and an expert on Web 2.0, says the microblogging site Twitter is changing the way people and businesses interact on the Web. Here is an excerpt of his interview at Fora.tv : BusinessWeek shares some examples of entrepreneurs who are using Twitter to grow their businesses. In the case of Chris Savage, who runs a site called Wistia.com, he can find people who are searching for services he provides, and then connect with them and build his client base. For others, the value comes from building relationships between the business and customers, or connecting with more and more possible customers through Twitter's inherently viral nature: The viral component of Twitter has helped Andra Watkins, founder of Positus, a consulting firm based in Charleston, S.C. She joined Twitter about six months ago, and at first found it a bit daunting. "I did not grow up using these tools and it has taken me time to develop the voice and approach," she says. Still, she has built a following of 600 Twitterers—friends, colleagues, bloggers, and potential customers. She in turn follows about 600 other people, including a group from her home state of South Carolina—85% of whom she figures could help bring in business. She also follows influential bloggers and those with large Twitter followings, in hopes of establishing a dialogue with them, and keeps tabs on her competitors. Watkins sometimes sends out tweets that have nothing to do with her business, such as a few complaining about exercise. "It makes me more approachable," Watkins says. In the past six months, she's found 10 new paying clients through Twitter. Read the full BusinessWeek article, Twitter: Building Businesses Tweet by Tweet , here .

  • Entrepreneurship and Social Responsibility

    Bill Green , Senior Vice Provost and Dean of Undergraduate Education at the University of Miami, believes that entrepreneurship is "an irreducable form of freedom." And because of that, it is a form of social responsibility. In a conversation with at The Kauffman Foundation , Green lays out the steps entrepreneurs take in helping society move forward. Entrepreneurs, he says, 1) Think a new thought, 2) Make that new thought into something real, and 3) Implement it and put it out there so that you and other people benefit. Watch Green in the full Kauffman Conversation, and let us know if you agree or disagree and why (by clicking on comments above):

  • Startup Advice for Lean Times

    Cisco, Oracle, Lotus, Atari: all technology businesses that were start-ups during economic downtimes. BusinessWeek 's Spencer Ante spoke with some entrepreneurs who saw opportunities during recessions and shares some of their advice. The article is yet another reminder that a lot of top American businesses owe some of their success to the decisions their founders made that ran against the economic tide. As Harvard Business School's Tom Nicholas tells Ante, "Recessions can be really useful strategic opportunities." Ante goes on to write: Entrepreneurs, financiers, and historians point to several reasons for this phenomenon. For starters, everything is cheaper during a downturn, including the cost of labor, materials, and office space. There's less competition, both from incumbents that are trying to put out their own fires and from startups that find it harder to raise money. And the tough times force entrepreneurs to work on their business models earlier, so they end up reaching profitability more quickly than when money comes cheap. "The companies are tougher because they were tested during a tougher time," says Carl Schramm, president of the Kauffman Foundation, an organization that promotes entrepreneurship. The advice in the article, though not necessarily brand new, serves as a good reminder to entrepreneurs to match up core strengths with clear opportunities. And most of all, believe in what you are doing as you build a company and a culture. Another key lesson is to pick markets strategically, says Umang Gupta, who joined database maker Oracle ( ORCL ) in 1980 as employee No. 17 and wrote its first business plan. Ultimately, the company wanted to build a database program that would work with multiple types of computers, from minicomputers to PCs to mainframes, those hulking machines that crunched massive amounts of data. But Oracle couldn't do it all at once. It started out creating a database that worked on minicomputers such as Digital Equipment's PDP-11. Then Oracle methodically went upstream, pursuing mainframes next, rather than going for mainframes and PCs at the same time. "We concentrated our bets," says Gupta, now CEO of Internet measurement firm Keynote ( KEYN ). "We built a culture of an extremely focused, aggressive company." Read the full article here .

  • Finding The Love in Entrepreneurial Partnerships

    Valentine's Day has come and gone, but a lot of small businesses are still looking for love, or at least good business matches. We've seen a lot of advice about not trying to go it alone in tough economic times. The key to thriving, or even just surviving, may be the partnerships you build. Entrepreneur.com shares some ideas and resources--many of them online--for finding the right match for key objectives like funding, development plans, or connecting with a corporate sugar daddy: Maybe what you need is a corporate partner to help bring an idea to the big time. According to Docherty, opportunities await entrepreneurs in the emerging field of open innovation, where large companies and innovators collaborate to bring a proven concept to market. Now more than ever, he says, "progressive, large companies are recognizing they need outside innovators as much as innovators need them." His company, Venture2, organizes one-day "Innovation Speed Dating" events, where pre-screened entrepreneurs and corporate product-development execs rotate through a series of face-to-face first and second "dates," with the goal of finding a partner. For those who prefer to avoid the dating scene, there's PartnerUp.com , which matches entrepreneurs with business partners, co-founders, and board members. Users solicit interest by posting partnership opportunities. Once potential partners identify one another, they can communicate anonymously before formalizing a relationship. Read the full article here .

  • More Tips on Innovating Through a Recession

    The February issue of Entrepreneur Magazine features a report on innovating during a recession. When the economy "tanks," Tiffany Meyers writes, "You have two options: hole up in a bunker and hope it ends before you run out of tinned peas, or innovate and emerge stronger than when the economy took the hit." Of course a magazine named "Entrepreneur" has a rooting interest (if nobody innovates, who is buying a magazine on entrepreneurship?). But we have posted several times now about companies that were started or boosted because their leaders tackled major initiatives of innovation during severe economic downturns. The magazine report advises entrepreneurs shore up their core businesses ("Take a reality check"), collaborate ("Don't go it alone"), and run, don't walk, toward your loyal customers and their needs ("Play to your strengths"). Read Special Report: Innovate in a Recession .
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  • Start-ups and Recessions

    Last week we highlighted the McKinsey Quarterly's report on companies that made great leaps in innovation during the Great Depression. Hewlett-Packard, Polaroid, and DuPont were noted examples. But what about start-ups and small business? Does entrepreneurship take a nap during recessions? The Kauffman Foundation looked companies that went public every year from 1901-2006 and found some noted names. A cross-section of successful public companies were founded during recessions, including such recent examples as Genentech, Microsoft, Southwest Airlines, Genzyme, and many others. And prominent companies being founded during a recession are not just a recent phenomenon, with Morgan Stanley, Allstate, Krispy Kreme, and Knoll, among others, all able to trace their founding dates to the Great Depression. More generally, the report found that there wasn't much of gap between the number of companies started during recession years and the number started during years of economic expansion years. Over that full period, an average of 70 companies were founded per year during recessions, compared with 83 during expansion. And looking at the data for all years after World War II, the gap is nonexistent: On average, 138 companies went public during each year of economic expansion, while 140 companies went public during years of recession. This report isn't extensive enough to draw firm conclusions, but at the very least it shows, as does the McKinsey article, that there are opportunities during down periods. The relationship between when a company is founded and its eventual success is little-explored, but interesting and important. Should we expect fewer companies of lasting significance to be founded during economic downturns? Or, should we expect that tough economic times produce quality companies in similar numbers as other periods? The answers to these questions touch on issues in policy, economics, and entrepreneurship research. While the research summarized in this short paper is only preliminary, it suggests some possible early answers. Knowing that a company was successful-at least as evidenced by having gone public-does not give us any information about whether that company was founded during a recessionary or non-recessionary period. At least in a general sense, that is suggestive in that, given smaller numbers of companies founded during recessionary periods, the implication is that companies founded in such times have a higher likelihood of turning out to be economically important. A good next step would be to look at key shared characteristics between successful companies started in periods of recession. Read the full Kauffman report here .

  • Small Business Index, State by State

    Every year for the past 13 years, the Small Business and Entrepreneurship Council judges which states it says are friendliest to small businesses and entrepreneurship. They call the rankings the Small Business Survival Index . For 2008, South Dakota was ranked the best state, followed by Nevada, Wyoming, Florida, and Washington (state). Those five states were the top five in last year's index as well, with Washington fourth and Florida fifth. The bottom five states are Minnesota, Rhode Island, Maine, California, and New Jersey (The District of Columbia ranks 51st). This is of course just one group's ranking system, and it isn't clear how the ranking really stack up against the number of start-ups state by state. The index appears to be heavily weighted toward tax policy--an issue that has long been at the center of the SBEC's lobbying efforts. States with lower taxes across the board--from diesel tax to capital gains--are deemed to be much friendlier toward small businesses and entrepreneurs in the index. Government spending counts against a state's rating. Another interesting piece of the SBEC's metrics is population growth. In terms of population growth, from 2000 to 2007, total U.S. population grew by 6.9%. As for the top 25 states in the 2008 Index, population growth over this period registered 8.4%, while among the bottom 26 (including the District of Columbia), population growth registered 5.0%. Therefore, the population in the top 25 states on the Index grew at a 68 percent faster pace than the bottom 26 on the Index over the period of 2000 to 2007. In terms of raw numbers, the top 25 added 13.2 million in population, while the bottom 26 added 6.3 million. The full report is here .