Tag Archives: WSJ.com

What Obama Win Means for Small Business and Entrepreneurs

Current Affairs, , , ,

I just posted Now Let’s Hold Both Parties Accountable for What They Do to Small Business on the smplans.com blog. It’s a riff on Sarah Needleman’s excellent summary on WSJ.com, called Clarity for Small Firms. I hope you can see that one; I’m not sure about the pay wall. She summarizes the situation for taxes, fiscal cliff, government spending, access to capital, jobs, energy, and net neutrality. Nobody is saying election campaigns clarify anything all that much, but still, a lot was said. 

I hope you click to see my post on the smbplans.com blog, and maybe look as well at what we’re doing there with social media business plans. 

Go Ahead, Search Me … and Give Me Better Info

Business Ethics, Marketing, , ,

What bothers me isn’t that Orbitz steers Mac users to pricier hotels, as WSJ.com reports; it’s that some people act like that’s somehow illegitimate, unfair, or deceptive.

I say, on the contrary, give people what they like.  Not everybody wants the cheapest hotel available. Many people prefer paying a bit more for something better. And what’s wrong with that?

The report:

Orbitz Worldwide has found that people who use Apple Inc.’s AAPL +0.22% Mac computers spend as much as 30% more a night on hotels, so the online travel agency is starting to show them different, and sometimes costlier, travel options than Windows visitors see.

So, just for the sake of argument, I like interesting restaurants with local and organic food, and I don’t mind paying the bit more that those restaurants cost. Am I mad at Yelp if it shows me those on the top of a search, instead of the fast foods and pizza? The Journal adds:

Orbitz found Mac users on average spend $20 to $30 more a night on hotels than their PC counterparts, a significant margin given the site’s average nightly hotel booking is around $100, chief scientist Wai Gen Yee said. Mac users are 40% more likely to book a four- or five-star hotel than PC users, Mr. Yee said, and when Mac and PC users book the same hotel, Mac users tend to stay in more expensive rooms.

Guessing what people want, based on what we know about them, is not a bad thing to do.  And it’s not like Mac users have to pay more for the same room, on the same night, booked at the same time; it’s a matter of guessing what they want to see. How is this bad?

We all routinely pay different prices for the same thing. We all know that airplane seats — to cite one obvious example — are priced in all different ways. It bugs me that I pay more for the trip I book at the last minute than the one I book in advance, but I don’t blame the airlines for that. And we can get last-minute hotel rooms cheaper, sometimes, than by booking in advance. This is pricing by context and value. I don’t like it when it’s me paying more, but then I always have the option of planning better. Or not going. Right?

I’ve been a Mac user since the beginning, and was a long-time consultant to Apple, although I like Windows too and use both. But I’ve always seen the Mac had some extra connotation. That’s interesting to me, and intriguing for marketing purposes. Like car brands, dining preferences, and fashion. We are what we buy.

How do you feel about this? Are you offended?

A Potentially Creative Management Team Assessment Idea

Management, ,

Whether you’re a football fan or not, I suggest you take a quick look at NFL: The Giants on the Giants on WSJ.com today. And that’s especially if you’re running a business, or working on a business team. And even more so if you’ve heard about the 360 methodology for polling teams – business teams — about each other.

Have you heard of the 360 (360 degree feedback), in which people in business organizations review each other anonymously? Each person reviews their supervisor, their subordinates, and their peers. The review includes questions about business, management, strengths and weaknesses, etc.

I can’t say I’m a big fan of the 360. It’s too easy to confuse popularity with management. Anonymous zingers can be painful, even when kept private. And negative feedback is hard to give directly, sure, but anonymous changes the chemistry. To be fair, the results of the 360 aren’t really "open," when it’s run correctly. Each individual gets individual results. But management also gets results.

However, I do think this variation on the 360  could be a great adaptation. They didn’t ask the football players about football; they asked fun questions, looking for fun answers. Read the source story and you’ll see … who would you sit next to, who is the coach’s favorite, etc. I could see this style working well in a company framework: best dresser, worse dresser, best presenter, most improved, etc. It could be a good discussion starter. (Illustration: by Scott Pollack, taken from WSJ.com)

A Hard Real-World Lesson About Getting It in Writing

Business Mistakes, , , , , ,

I just read American Express’s Small Business Saturday Event Spurs Backlash on WSJ.com. It’s sad but not surprising to see what seemed like a wildly successful small business promotion turn sour like this. Putting big companies together with small business and development organizations is tough. Compatible goals are a frequent problem. wsj.com

Here’s a quick summary:

Now, some small-shop owners including California’s Ms. Blanchard are boycotting the Saturday event. “The reason I’m not participating is because it’s not affiliated with the 3/50 Project,” Ms. Blanchard says. For American Express, “it’s a monetary boon if they can get more people to use the card,” she adds. “But there’s been no reciprocal kindness back to the merchants. The 3/50 Project looks out for the interests of the merchants.”

I think it’s a built-in problem. Is Amex’ marketing program compatible with the development organization’s socioeconomic goals? Does a big company spend money altruistically without getting marketing benefits from it?

The WSJ article refers to a blog post by Cinda Baxter, organizer of the 3/50 movement that was designed to boost sales for small businesses, explaining why she cut ties with Amex.

I think there’s a lesson for all in one of the 44 comments, by Ramon Ray, of SmallbizTechnology. In his comment he says:

From what I can read in Cinda’s blog post. Cinda was promised something by AMEX, during phone discussions and meetings. But as I’ve learned through many great relationships with big companies talking on the phone is GREAT. But until a contract is signed or something is in writing – talk means nothing. I think Cinda’s mistake was not presenting a formal proposal to AMEX and getting their written approval. That’s what I would have done. Small businesses (as I and Cinda are) might get very excited hearing from a ‘big company’ that they’ll do x, y, z. But keep in mind a ‘big company’ is made up of many teams of people and bosses. Hence once the ‘talking’ is over, it’s time to put ink on paper or words in an email. That’s the ONLY way to really know that the talk (intention) is action.

I get that completely. I’ve been exactly there, where Ramon suggests. I’ve made that mistake too. Sad, but it happens. Actually, I’d go simpler than a contract, just a letter would be enough. But something in writing.

And it’s a good lesson.

 

 

The Nature-Nurture Debate on Entrepreneurship

Business Education, Entrepreneurship, , , , ,

Is entrepreneurship something people are born with, or do they learn it? Good question, I suppose, but not one I expect anybody will ever be able to really answer. Emily Malby does a good balanced job of reporting about it in Entrepreneurship: A Look at the Nature-Nurture Debate on the Online Wall Street Journal (WSJ.com).

WSJ page view

I’ve always found the nature-nurture debates interesting because only a fool is ever really sure anything is one or the other. These are all great examples of arguments in which the only intelligent answer is uncertainty. Who could ever isolate all the factors involved? And what about Malcolm Gladfield’s book Outliers, for example, which suggests that true expertise takes 10,000 hours of hard work. Is the accomplished musician, or the successful artist, the result of talent, training, or both? And what’s the role of luck?

The WSJ quotes a survey taken with 500 entrepreneurs in the UK. It says:

Only 13% believe that skills they gained through education and experience were the main drivers in starting a business.

Hmmm … but what does that mean, “the main drivers?” and what does “skills gained through education and experience” mean? The report goes on to suggest a contradiction, and maybe a problem with definitions:

Almost 90% of entrepreneurs who took the survey had worked for another company before launching their own companies, and 30% had studied business and management.

So that’s kind of mysterious. I think it goes back to how hard it is to get data like this. We don’t get the facts — as if there are any — but what people say about themselves. And nobody asked unsuccessful entrepreneurs what they thought … what if lack of education and experience increases the likelihood of failure?

The WSJ story, I should add, goes on to give a well balanced summary of this debate, quoting experts and research on several sides of it.

And either way, the nature-nurture debate has nothing useful to say about whether we can teach entrepreneurship, or learn entrepreneurship. Whether it’s learned or innate, there is still the matter of training, and skill, and experience. Don’t tell me born entrepreneurs don’t gain from learning the normal process, and skills like cash flow and marketing. Don’t tell me that the luxury of learning, if it’s available, doesn’t help.

For every Bill Gates or Mark Zuckerberg there are hundreds of millions of the rest of us.

Hell with School or Work, Startups are Genetic

Entrepreneurship, Weblogs, , , , ,

What a relief. Entrepreneurship is genetic. That’s great news. Here I’ve spent all this time (since 1974) thinking it was ideas, plans, teams, taking steps, getting things done, doing things well, paying the damned bills, solving problems, and all that hard stuff. What a waste!

In Is Entrepreneurship Genetic? on Brazen Careerist, Jake Poinier writes:

Roughly one third to 40 percent of the tendency to be an entrepreneur is innate rather than taught. Independence, tolerance for risk, ability to recognize opportunity, and leadership are all affected by your genes.

He goes from there to a well-written, thoughtful, sensitive tribute to his father, an excellent post. But I still had that 40 percent ringing in my ears when it reappeared yesterday in Dyan Machan’s Is Start-Up Savvy in Your DNA on WSJ.com. He poses that education question I see a lot lately, which usually suggests that since entrepreneurship can’t be taught, you should just wing it:

We’ve always had a hunch that entrepreneurs are a different breed, but some academics are taking that idea quite literally. Turns out … 40 percent of the variation in the tendency to be an entrepreneur is inherited. [T]his work puts a new spin on an age-old question: Can classroom learning really teach you how to succeed?

Very interesting, that 40 percent number. So if nobody in either my background or my wife’s was an entrepreneur, and we started a company, does that mean we have only 60 percent chance of success, even 20-some years later? And we have five grown-up children, so does that mean they’re 40 percent entrepreneurs, or that two of the five are entrepreneurs? Is it a dominant or recessive trait? And my dad, the ophthalmologist, he doesn’t have independence or risk tolerance, or ability to recognize opportunity? One of our five children runs our company now, so does that mean one of the other four – all duly employed – needs to start a company quickly? I wonder which one it will be?

So all those good entrepreneurial traits, those are just inherited traits now, with or without schooling? How could book learning help? Damn, I liked school too, I wouldn’t have missed it, but apparently it was wasted. But then I don’t have entrepreneurial DNA, apparently, so maybe that’s why I needed an education.

And what about work? Doing it? Getting into the office, returning phone calls, solving problems, hiring and firing people as needed, finding credit, doing prototypes, getting the right vendors? They say that 90 percent of success is just showing up. I wonder if that’s including or excluding the 40 percent that comes at birth. If our grown-up children have all 40 percent of the genetic part, do they have to show up just half of the time, to be successful?

While all of this is fun, sort of like the nature/nurture argument when done as an impromptu party game, it’s just about as useful as comedian Jeff Foxworthy’s “you know you’re a redneck when” stand-up routine. It doesn’t get to any meaningful conclusions about who and when and what makes startups.

Clearly, just like the redneck routines, lists of entrepreneurial traits are fun — I posted a list of my own here and another here and a third here on this blog. But don’t take them seriously.

For the record, this whole idea comes directly from Scott Shane’s Born Entrepreneurs, Born Leaders, which I bought and read and liked. It has none of the simplicity you’d think from the summary here. Actually Scott examines a lot of interesting research around the nature vs. nurture question as it relates to careers, and he jumps to no over-simplified conclusions. He’s exploring. He’s got table after table of background information about career choices and traits, characteristics, and genetic research. It’s a good book. But not a great one to be summarized in a headline.

Generalizations about startups almost always fail. People start companies for as many different reasons as there are companies. And those companies fail or fly for an entirely different set of reasons. Like I said in my opening paragraph on this post: It’s also what you’ve done, what you do, what you want, what you like, who you love (try to start a business without family support, and you’ll see), what bores you, what you did for your first job, where you live, where you’d like to live, what people want from you… as many traits as there are entrepreneurs.

Why Business Planning is Like Regular Exercise

Business Planning, , ,

I’ve been meaning to post about this for a couple of weeks now, ever since somebody tipped me off to Gentle Nudges Work to Get People Exercising on WSJ.com. That report cites research showing that regular reminders helped people get regular exercise. Phone reminders from real people worked better than computer reminders. And both kinds of reminders worked better than no reminders. And people exercising in teams were more consistent than people exercising alone.

I’ve often compared business planning to nutrition and exercise. It’s a process, related to good and bad habits, properly applied over a long term; not a sudden burst. And people who cite the misuse of the business plan document as an argument against good planning are using the same faulty logic as people who cite starvation diets and running a marathon without training as arguments against nutrition and regular exercise. In all three cases, what works is the long-term consistency instead of the short-term burst. Good business planning is like regular exercise, not like running a marathon all at once.

Here’s a snippet of the WSJ report:

In the Stanford study, 218 people were divided into three groups. [For a first group], a Stanford health educator called her and other members of her group every three weeks, on average, for a year to ask about their compliance and to cheer them on. A second group of participants received calls not from humans but from a computer programmed to make similar inquiries.

After 12 months, participants receiving calls from a live person were exercising, as a mean, about 178 minutes a week, above government recommendations for 150 minutes a week. That represented a 78% jump from about 100 minutes a week at the start of the study. Exercise levels for the group receiving computerized calls doubled to 157 minutes a week. A control group of participants, who received no phone calls, exercised 118 minutes a week, up 28% from the study’s start.

Think about that related to business planning. Regular reminders worked. The goal was consistency over time. Real business planning for real entrepreneurs and small business isn’t a matter of creating a big formal business plan, but instead, setting goals and metrics and tracking and following up with management and steering. It’s a planning process, not a plan. While the thinking and insight in developing a plan can be valuable, the more more significant value comes from the process of the plan review and tracking and course corrections that follow.

In my writing, my workshops, and whenever I get a chance, I say start a business plan by doing a review schedule first. That’s a good way to establish, from the beginning, that the plan is about planning, and it’s a process, where the value is consistent application of plan review and course correction over the long term. Consider that a kind of pre-scheduled reminder system.

If you’re serious about building or growing your business, build in the business plan review meetings from the very beginning. And remind all the team members. And stay true to that process, so you meet once a month to review and revise the plan.