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  • 'Coffee is for closers,' and Other Rules for Startups, from Mark Cuban

    Mark Cuban has had a great deal of success starting companies, and leading them, in his way. He believes in keeping companies flat, fun, and focused. At Entrepreneur , he lists 12 rules for the people who start new businesses, and for potential employees of startups. A few of Cuban's rules might sound familiar, but they are worth highlighting. Like rule #4: Sales Cure All. Know how your company will make money and how you will actually make sales. and #5: Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but aren't as expensive to pay. But we also find it interesting that Cuban clearly feels strongly about the type of environment that he believes foster success. For example, #7: No offices. Open offices keep everyone in tune with what is going on and keep the energy up. If an employee is about privacy, show him or her how to use the lock on the bathroom. There is nothing private in a startup. This is also a good way to keep from hiring executives who cannot operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over a personal secretary, run away. If an exec won't go on sales calls, run away. They are empire builders and will pollute your company. Read Mark Cuban's 12 Rules for Startups here .

  • What Peter Thiel Looks for in Startups

    In an interview with the Wall Street Journal's Alan Murray , Peter Thiel --founder of PayPal, Clarium Capital, and the Thiel Foundation--shares the key questions he asks when considering whether to fund a startup. The one that jumps out at us: "Why will the 20th person join your company?" Watch more of the interview here .

  • Majority of Young Americans Have the Entrepreneur's Bug, But Barriers to Starting a Business Remain High

    We already saw Millenials as an exceptionally entrepreneurial generation, but young Americans may be even more focused on starting their own businesses than we thought. Over half of Americans aged 18-34 either want to start a business or have already started one, according to a new Young Invincibles report. However, the would-be entrepreneurs see several barriers in their way. Here's a look at what respondents to the Young Invincibles survey saw as the biggest barriers in their way: Many would like the US Congress to clear a path for them. 65% of the Millenials surveyed want Congress to "prioritize making it easier to start a business." 83% want Congress to make it easier to get loans. Given the struggles some in the generation are having with their student loans , this is a generation that understands debt. Student loan forgiveness for young people who start businesses was also a popular fix to a common barrier, with 81 percent of survey respondents supportive of the idea. Young people of color are more likely to strongly support these suggestions. More young African Americans strongly support increasing access to credit and student loan relief (62 percent and 63 percent, respectively). The majority of young Latinos also strongly support these ideas (53 percent for both). Among all young people who have seen their debt increase, school loans (42 percent) make up the most common amount of increased debt. This is even more common among people under age 25 (54 percent have seen increased student loan debt). Thirty-two percent of young Americans have more than $5,000 in personal debt, not including a mortgage, and 25 percent are very worried about being able to pay off their current debt. Read the full report here .

  • Kauffman Study: Lack of Women-Started Firms is a Missed Opportunity for Overall Economic Growth

    In a new report for the Kauffman Foundation , Lesa Mitchell makes the case that encouraging more women entrepreneurs is essential in encouraging economic growth for the US. Mitchell, vice president for Kauffman's initiatives focused on advancing innovation, wants us to look beyond the notion that increasing business opportunities for women is important just for women. This graphic sums up her findings: Job creation is of utmost importance, and new businesses bring new jobs. More than half of college graduates are female, and yet male college graduates are significantly more likely to start their own companies. More women are getting into the startup game, but not at a fast enough rate to close the gap. In the ten years prior to the great recession, women-owned firms grew at a relatively tiny rate of 7.6%. But, according to the Mitchell, that's not the most alarming figure: When we look at growth measures by revenue, the gap begins to widen. In the latest Kauffman Firm Survey, which tracked new firms three years out from their startup dates, 19.8 percent of the women’s firms reported annual revenues more than $100,000 versus nearly 33 percent of the men’s firms. The average revenue of men’s firms was almost twice that of women’s, nearly $120,000 versus about $60,000. In this range, we are still dealing with extremely small startups. Many are made up of the owner plus a helper or two, and a sizable number appear to be part-time side businesses: About 17 percent of the entrepreneurs in the KFS (of both genders combined) reported working on their businesses less than twenty hours per week. Not all firms that are small in their third year are destined to remain small, however. There may be some with growth potential that are taking a while to develop scalable products and business models and to achieve consistent earnings. This may be especially likely to happen with innovative startups, since the innovation process is highly iterative: new software spends time in development and beta testing; a new physical product may evolve through a series of prototypes. Also, it is not uncommon for innovator/entrepreneurs to work on their early-stage ideas ―on the side‖ while holding full-time jobs. So the question is: Are women starting a proportionate share of these types of firms, some of which will go on to have high economic impact? The available evidence suggests that they are not. Every five years, the Census Bureau conducts its nationwide Survey of Business Owners. The SBO samples privately held, nonfarm businesses of all ages, from recently founded to many years in existence. Using SBO data, the American Express OPEN report for 2011 found that just 1.8 percent of women-owned firms had revenues more than $1 million. The figure for men-owned firms was 6.3 percent. Read Overcoming the Gender Gap: Women Entrepreneurs as Economic Drivers here .

  • Five Personality Factors for Successful Entrepreneurs

    At Forbes , Mary Frakes and Thomas Harrison teach us about five personality factors they say are key in assessing whether one has the necessary makeup to be a successful entrepreneur. The first four may seem obvious: Openness to Experience Conscientiousness Extroversion Agreeableness The fifth personality factor stands out a bit: Neuroticism . Here's how Frakes and Harrison introduce this trait: This one's a biggie. Neuroticism measures how strongly and negatively you react to the stresses of life. Highly neurotic people have strong emotional reactions to problems and take a long time to get over bad moods, anger or hostility. They often feel anxious or depressed, and are seen as worriers. Those at the other end may not always be happy or cheerful, but they don't tend to be overwhelmed if they occasionally feel depressed, anxious, or angry. Such equanimity gives them an advantage as entrepreneurs because they tend not to let snags get them down. Frakes and Harrison provide a quiz that examines one's neuroticism, and the other 4 factors, as a means of determining whether one is better suited to work in a company or for herself/himself. Take the quiz here , and then read more on the methodology here .

  • Failure of Imagination Dooms Start-ups

    Scott Shane wants entrepreneurs to take responsibility in their decisions. He rejects assertions that most start-ups fail because of outside forces beyond control of the people who start the start-ups. And he especially rejects the notion that start-ups struggle because they can't keep up with rapid growth. Rather, Shane, Professor of Entrepreneurial Studies at Case Western Reserve University, argues that entrepreneurs set their new companies up for failure by choosing to enter industries that are "unfavorable to new companies." From Small Business Trends: Many entrepreneurs start companies that stand little chance of out-competing other businesses. Data from the Panel Study of Entrepreneurial Dynamics reveals that nearly 40 percent of the founders of new companies don’t think that their businesses have a competitive advantage. (Because entrepreneurs are an optimistic lot, if a business’s founders don’t think the company has a competitive advantage, what are the odds that it does?) Not enough entrepreneurs have experience in the industries in which they are starting their businesses. Academic research shows that working in an industry for several years before starting a business enhances the survival prospects of a start-up, but a sizable fraction of entrepreneurs start businesses in industries in which they have no work experience. Many entrepreneurs fail to take the actions that research shows help businesses to survive. Academic evidence shows that putting in place careful financial controls, emphasizing marketing plans and writing a business plan increase the odds that a new business will survive, yet many founders fail to write plans, have inadequate financial controls and don’t focus on their marketing plans. Read Why Do Most Start Ups Fail? here .

  • Self-Employed no More: Slowdown in Job Creation Among Entrepreneurs and the Smallest of Firms

    Bloomberg News reporters Anna-Louise Jackson and Anthony Feld write that at least a million formerly self-employed Americans, aggregate, have lost their businesses since the start of the recession. This knocks down one silver-lining narrative of the global economic crisis: that more people will take the opportunity to work for themselves as big corporations shed jobs. The 18-month contraction that started in December 2007 initially resulted in more would-be business owners, as the number of people who work for themselves grew to 16.3 million in July 2008 from 15.7 million at the end of 2007, according to data from the Bureau of Labor Statistics. Since then, the total has fallen about 10 percent to 14.7 million in July, the data show. Employer businesses - those that provide work for individuals including the founder - "have been starting in fewer numbers, with fewer workers and growing at a slower pace than in the past," according to Robert Litan, a vice president at the Kauffman Foundation, which supports research on startups. "Therefore, these entrepreneurs are generating increasingly fewer new jobs for the U.S. labor market." The number of new employer businesses dropped 24 percent to 505,473 on an annual basis in 2010 from 667,341 in 2006, according to Litan, who co-wrote a report published in July on small-business job creation. Read Economy knocks self-employed out of business here . The Kauffman Foundation report to which the article refers provides helpful detail and analysis of the loss of jobs among small businesses and startups. We'll share just one chart from the report that illustrates the central point of Jackson and Feld's reporting: Read Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation here .

  • Head of Facebook's Developer Network on Social Design and Disruption

    Knowledge@Wharton has an interesting interview with Ethan Beard , director of Facebook's Developer Network . Beard responds to questions about privacy and Facebook's growth potential. But what we found compelling in this interview is Beard's belief in "social design" as the driving force for Facebook. Beard sees social design as a user-centered disruptive force that extends far beyond the Facebook platform. Take a look:

  • Fast Food Franchises Learning from Food Truck Entrepreneurs

    The popularity of food trucks continues to climb, and the business world has been taking notice. While once the domain of streetwise entrepreneurs with culinary chops, investment bankers and established fast food businesses are getting into the game as well, according to Entrepreneur Magazine 's Jason Daley : The food-truck craze--whether it's a bubble that will eventually burst or a new fixture on the American culinary scene--is pulling in big numbers. In a 2010 survey by Chicago-based food industry research and consulting firm Technomic for American Express, 26 percent of Americans said they had visited a food truck in the last six months, despite the fact that most trucks are concentrated in a few big cities. A popular Food Network reality show, The Great Food Truck Race, in which seven mobile gourmands try to outsell each other, has primed millions of people for mobile dining. "Ten percent of the top 200 restaurant chains will have a mobile presence in the next 24 months," says Aaron Noveshen, co-founder of Mobi Munch, a Los Angeles-based company that helps develop mobile platforms and runs several food trucks in California. "I can already count eight that do." Even if the hipster sheen fades from the gourmet food trucks, Noveshen believes they'll still find a customer base at colleges, corporate campuses and other areas where full-service restaurants aren't viable. Food trucks offer something that is always appealing: convenience. "People are more time-starved than ever," Noveshen says. "Mobile food will serve that need. It's a fundamental thing that never goes away." Read Franchises Hop on the Food-Truck Trend here .

  • Naming, Branding a Startup

    What's in a name? That which we call Facebook. By any other name it would be as ubiquitous and penetrating of our culture. No? Branding experts say that the name of a company can matter a lot. And the founders of some of the most successful companies of the digital age agree. WNYC 's Lisa Chow and Jim Colgan wondered about the challenge of naming a startup, so they asked for naming tips from some founders of successful companies, like Apple and Twitter. They also spoke with founders of startups that are not exactly househould names, and, coincidentally or not, did not take off: Read more and test your knowledge of company names here .

  • Kaufman Foundation Report: Small Businesses 'Starting Smaller, Staying Smaller'

    No matter what the prevailing discussion is in Washington, job creation remains perhaps the biggest challenge for policymakers. And many of the most ardent small business supporters argue that their sector is the real engine of job creation in the US. So jump-starting that engine would certainly be welcome. But it may be that small businesses started to change in size before the recession. That is, that they became smaller and had fewer employees. A new Kaufman Foundation report highlights this issue, and makes the case that a boost in small business job creation is highly dependent on the number of small businesses, and not so much on current small businesses hiring more people. Recent Census Bureau research has pointed to one factor that is contributing to this slowdown in job creation—shrinking job creation in startups. As shown in Figure 1, startups created an average of 3.5 percent of total U.S. jobs annually in the 1980s, but in the 2000s contributed only 2.6 percent of total U.S. jobs. While diminished in number, these jobs still were the difference between positive and negative overall net job growth in the United States. Media and academic commentators who bemoan America’s unusually slow rate of job creation after the 2007–2009 recession are missing what we believe is a longer-term trend that began earlier in the decade and might best be called a slow jobs “leak.” In the pages that follow, we draw upon newly available data to track businesses over time and dig deeper into the health of U.S. startups. We examine young companies’ size at birth, jobs created, and survival patterns to draw inferences about the health of emerging companies in the United States. The patterns we find among young businesses show that recent U.S. startups are performing much worse than prior cohorts in terms of job creation. Conventional wisdom about job growth tends to focus solely on the jobs that are being created at existing (typically big) companies. But as a wealth of recent research has shown,6 new businesses are vital contributors to a healthy jobs market. Indeed, we know that, until the Great Recession, new firms in the United States generated on average about 3 million new jobs every year. While these firms typically follow a quick up-or-out pattern of success or failure, our analysis highlights for further scrutiny of some additional and, we believe, significant facts about the jobs actually created by new businesses. Read Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation here .

  • Inc.'s Thirty Under Thirty Coolest Entrepreneurs

    We know Millenials are quickly becoming the influential generation of consumers, rivaling their Boomer parents. But they are also becoming leaders in the business world. Inc. Magazine profile of thirty entrepreneurs under thirty is enough to make you feel old and impressed at the same time. It may come as no surprise that a lot of these young entrepreneurs have tapped into the web and social media savvy for which their generation is known, but their stories also reflect a mature awareness of a lot of the basic tools of success needed for startups in any industry. Read Meet the 30 Under 30 Coolest Entrepreneurs here .

  • Startup Success and Getting the First Hires Right

    Gurbaksh Chanal has successfully built a few companies, and he has come to believe that the potential success of any new business depends on the first hires. The first five hires are especially important. Get them wrong and the company will not take off. Chanal wants his first hires to be hungry. He explains his hiring philosophy in this short interview at Big Think :

  • Entrepreneur: 'Five Rules for Bootstrapping Success'

    There is a lot to be said for growing an independent business without seeking funding from a VC or angel investors. Control trumps financial resources for many entrepreneurs. Jim Beach, David Beasley and Chris Hanks , writing at Entrepreneur, say that "bootstrapping can also be better for employees," as they have a stronger relationship with the company founder and "there is a clear and absolute line of authority." Beach, Beasley, and Hanks say the key to bootstrapping is to get the business up and running quickly and efficiently. And they advise following five rules: 1. Get Operational Quickly 2. Understaff 3. Keep Growth in Check 4. Forecast from the Bottom Up and 5. Reconsider the Traditional Business Plan The low-risk, bootstrapping entrepreneur doesn’t need start out by writing a detailed business plan. He or she starts small, with one or two sales, slowly building with little if any debt and using his or her day job as a cushion, creating a sustainable, profitable business from day one. Using this formula, the only person who would read your business plan is you, and you already know what the plan is. Planning is important; spending weeks writing about it is not important. Later in your career as an entrepreneur, having a formal business plan may be a good idea as you venture into larger companies and indeed want to use someone else’s money to do so. But for now, that’s not necessary. Spend that time selling. Read the full description of these rules here .

  • Paul Graham and What Y Combinator Looks for in Startups

    Six years ago Paul Graham launched Y Combinator , and created a new process for funding and developing startups. Y Combinator brings selected entrepreneurs to Silicon Valley for a few months, and gives them some, but not a lot of, funding ($18,000). The conceit is that the money is not so much the key to getting a successful business off the ground. Rather, it is the training that matters. And that training is hard to come by in traditional educational institutions. So the question then is "who is Y Combinator looking to tap for this training?" That`s the question that Charlie Rose asked Graham at the TechCrunch Disrupt Conference . And Graham`s answers might surprise you. He`s not looking for simply the "best and brightest." Video streaming by Ustream
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