Archive for August, 2008

So You’re Saying HottieMommy@aol.com Isn’t Professional?

Wednesday, August 27th, 2008

Question: what’s your first impression of the email address sxxxygrrrl08@yahoo.com?

What? You mean funding-worthy, smart, and professional didn’t come to mind?

It may sound obvious, but it never ceases to amaze us how many entrepreneurs (and other relatively smart, well-adjusted people) use unprofessional-sounding email addresses for business purposes.

Let’s face it: most people use email in some form or another these days to communicate. But that doesn’t mean you should use the same email address with everyone. That’s because while, yeah, biggunz69@hotmail.com is funny when you’re emailing your old frat brothers, the same doesn’t hold true when you’re trying to communicate with a potential business connection or investor. Trust us, if an investor finds it funny, it’s only because they’re laughing at you, not with you. And no, you’re not off the hook if your email is “cutesy” either. Emails like HunnyBunny10@aol.com and PregMommy@hotmail.com are just as disturbing—and equally unprofessional—as (some) graphic email addresses.

At the risk of sound old, crotchety, and generally lame, get a new email address. Keep it simple. This is going to sound crazy, but try just your first and last name, and if it’s not available, find a simple variation. Don’t use slang, nicknames, or any words that end in “z.” It’s a free, simple, and quick way to automatically make a better impression on an investor or important business contact.

Tags: e-mail, internet, investors
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European VC Investment is in La Toilette.

Wednesday, August 27th, 2008

Sure, the Dollar may be weaker than the Euro these days (although it’s getting better!), but if you’re an entrepreneur it still pays to be based Stateside. That’s because European VCs are investing less money in fewer start-ups, according to a new report from Dow Jones VentureSource (via the NYTimes). Specifically, VC firms funded a full 42% fewer businesses than they did last year. And the amount they’re investing declined as well. That figure dropped by 35%, to $1.3 billion dollars.

Comparatively, VC investments here in the U.S. have only dropped 19% over the same period. Normally we’d gloat, but we’re not sure they’re any winners here.

euro

European entrepreneurs won’t be seeing much of this.

Tags: funding, start-up, venture capital
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More Money: This Week’s Winners.

Wednesday, August 27th, 2008

Tech start-ups, as usual, had a good week when it came to securing funding. Read ‘em and weep:

-JumpTap, a mobile search and advertising start-up, raised $26 million in Series D funding this week, bringing their total investment to $72 million. The company specializes in creating mobile advertisements for cell phones, and is working on plans to create search that is specific to mobile. JumpTap intends to use the cash to develop more products, hire more sales employees, and to expand its service abroad.

-MIOX, a New Mexico-based company, secured $19 million in third round funding this week. The start-up develops water purification devices for both individual and commercial use that are cheap and green. So far the company has raised a total of nearly $50 million in VC investment, including the new sum.

-Brand.net, which sounds exactly like what it is, is an online advertising business focused on—wait for it—brand advertising! There must be something to it though, because the company closed $10 million in second round funding this week. They say they’ll use the funding to “accelerate its growth in the online brand advertising industry,” which is business speak for “we haven’t quite figured it out yet.”

-Content delivery network Panther Express scored $15.75 million in second round funding this week. The start-up specifically uses proprietary technology that it sells to businesses to deliver content to their customers. Panther will use the money to go international.

-Expand Networks, a WAN optimization company, says that they’ve secured $8.5 million in VC funding from Intel Capital. The start-up has raised more than $50 million to date, but says that they’ll put this new influx of cash toward R&D and to buy new technology. Er, we thought they were supposed to make it?

Tags: funding, more money
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Just Try to Stump Us.

Wednesday, August 27th, 2008

Have questions about business plans or start-ups? Good news! We have answers.

Send in your question using the form at the right (Scroll down. Way down.) and we might feature it in our weekly Q&A post that runs each Thursday. We especially like tough questions, so give us your best shot.

Lesko

Tags: q&a
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Thinking About Starting A Restaurant? Read This.

Wednesday, August 27th, 2008

No, we’re not going to try to talk you out of it. Everyone knows that restaurants have a high rate of failure. And you’ve already heard that old stat that two out of three restaurant start-ups go under. But what you may not know is that there are certain things you can do to improve your chances that don’t involve using your five-year-old as a dishwasher. An article in today’s New York Times illustrates the point well : luck aside, if you’re going to go into the restaurant business (or any business for that matter), go prepared.

Two restaurateurs are featured in the Times piece—one who failed and one whose business is a success. Here’s the difference: Barry Sorkin, the entrepreneur who made it, went in with a detailed business plan.

“Mr. Sorkin…wrote a detailed business plan that ran for more than 40 pages, comparing his concept to the menus of his potential competitors. It featured a heartfelt essay, ‘Our View on ‘Q,’ that set out the group’s philosophy on barbecue….Along with a simple menu of ribs, brisket, chicken and side dishes like macaroni and cheese and twice-cooked fries, the plan also included an extensive analysis of the expenses the restaurant expected in its first three years…Determining that the North Side of Chicago lacked sufficient rib outlets, the group zeroed in on a storefront on North Pulaski Road…”

While we’re not proposing that you write any “heartfelt essays” in your business plan (please don’t, actually), the detailed planning, research, and analysis Sorkin and his team did prior to launch is worth copying. They knew they competition, they knew their expenses, and they—generally—knew what to expect. The same wasn’t true of the entrepreneur whose start-up didn’t make it. While multiple factors contributed to the failure of Charlita Anderson’s business, a lack of planning was obviously one of the major problems:

“But before the cafe opened, unexpected costs appeared. To pass inspection, the restaurant needed doors that pushed outward so customers could easily exit. The two doors each cost $1,000. Toilets for the restrooms arrived with no seats. ‘The tiny little things you don’t even expect, they’re going to pop up at any time,’ Ms. Anderson said.”

And even if you have exceptional food, a great location, and an even better team (and the stars are perfectly aligned), it’s those little things that can kill a business.

restoclosed

Tags: business plan, start-up
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Don’t Call Us Pessimists.

Tuesday, August 26th, 2008

With more bleak news on the economy from the fed today, it’s good to remember a point we’ve made before: the downturn can actually be a good thing for entrepreneurs. In fact, the Harvard Business Journal goes so far as to make the argument that most savvy entrepreneurs love a downturn because of the opportunities it affords. They make a good point: Clif Bar, Chipotle, Method, and Hanna Andersson—all hyper-successful businesses—launched in the midst of a recession or downturn. Says entrepreneur Eric Ryan who co-founded Method, a natural cleaning products business, during tough times:

“Starting a business in a recession is like vacationing in the off-season. It’s a little less crowded, and everything starts going on sale.”

Words to live by.

Tags: economy, entrepreneur
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This Won’t Hurt…Much.

Tuesday, August 26th, 2008

You guys have made it abundantly clear that you like politics as much as sharp stick in the eye. We get it. That’s why when we came across this new report from the Small Business and Entrepreneurship Council, it caught our eye. It provides a simple—and interesting!—comparison of the two presidential candidates’ stances on small business and related topics. And although the SBEC tends conservative (translation: pro-McCain), the report appears fair, comprehensive, and jibes with our understanding of the candidates’ positions.

So, with a little help from USAToday, we’ve compiled a few of the more interesting tidbits for entrepreneurs and small business from the doc. You can read the whole thing here, but if you lack the time, energy, interest, or all of the above, check out our quick and dirty version:

Here are some of Obama’s positions according to the report:

Eliminate all capital gains taxes for small-business start-ups.
Make R&D tax credit permanent.
Establish a small-business and microenterprise initiative for rural America; 20% tax credit for $50,000 investments in small businesses.
As for health insurance, small biz can buy into a national federal pool to receive a refundable tax credit up to 50% on premiums paid for employees.
Create a $10 billion “Clean Technologies Venture Capital Fund” to invest in new tech start-ups.
Expand SBA and micro-loan programs, as well as strengthen SBA capital access programs directed at minority- and women-owned business.

McCain’s plans include the following:

Vote of a three-fifths majority in Congress necessary to raise taxes.
Permanent ban on Internet taxes.
Allow first-year deduction of equipment and technology investment.
Ban cell phone taxes.
No mandates on small business in regards to health care.

Did we leave out anything critical? Let’s hear it if you think we missed any key points.

mccainobama

Tags: politics, small business
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Word-Of-Mouth Good For More Than Spreading Rumors.

Tuesday, August 26th, 2008

Most of the time, big corporations serve as a great lesson in what not to do in business. However, as a small business owner (or someone who’s thinking about launching a start-up), here’s one strategy worth swiping from the big guys’ play book. Amazon has come up with a cheap and highly-effective way to hawk their wireless reading device, the Kindle: get the customers to push it. Amazon currently isn’t running any outside advertisements for the Kindle. Instead, they’ve launched a campaign on their site that encourages happy customers to tell others about their Kindle either through comments on the site, or programs like “See Kindle In Your City,” where current Kindle owners can demo their reader for people who are interested in buying them.

The strategy seems to be working, according to Wired, who has a piece online about Amazon this week. While no official numbers have been released (although there’s been plenty of speculation), anecdotally it appears the Kindle is selling far better than expected. Reports Wired: “Amazon is relying more than ever on its tried-and-true sales strategies of word of mouth and customer reviews, and it appears to be working, although the total market for the device is questionable.”

The take home lesson here is two-fold. First, it’s not always necessary to have an expensive ad campaign to sell a product or service. In fact, unless you know what you’re doing, or hire a professional, a major return isn’t guaranteed. Perhaps the most important point though, is the second: word-of-mouth and the customer referral are incredibly powerful. Potential customers are far more likely to be wooed by positive feedback about a good or service from an actual customer (and someone they trust) than any advertisement you could purchase. That doesn’t mean you should nix the ad campaign you’ve developed for your small business or start-up. It simply means that you shouldn’t count out word-of-mouth as a powerful tool that could actually help stimulate sales for your business. Amazon certainly hasn’t—and it’s paid off.

kindle

Tags: advertising, amazon, marketing, small business
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This Week In Business History: The Solar Powered Car Debuts.

Tuesday, August 26th, 2008

Think all this green technology is a new thing? Not so much.

This week in 1955, the first solar-powered car was unveiled at the General Motors Powerama in Chicago. Designed by William G. Cobb, the car was powered by 12 selenium photoelectric cells that converted the solar power to electricity, which operated the motor.

While Cobb obviously wasn’t able to turn this into a lucrative solar power automobile business, he still paved the way for others who are trying – which earns him a mention here. But what we want to know is if the first solar powered vehicle debuted 53 years ago, what’s taking so long for these cars to hit the mainstream?

solarcar

Not the first solar power car – just one that’s cool to look at.

Tags: green business, history
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iPhone Apps For Business: Why So Few And So Lame?

Tuesday, August 26th, 2008

If you bought your iPhone thinking that it was going to be a great new tool in your small business arsenal you might be disappointed by this news: only a mere 3% of the applications available in Apple’s App Store are actually targeted at business. That’s a surprise, given that back in March, Apple CEO Steve Jobs announced that the iPhone was getting a software upgrade that would make it more appealing to business.

Here’s the good news, though: the number of business apps is growing, reports today’s Wall Street Journal. Just a month ago, there were only 23 business apps. Today there are 65.

As far as the popularity of business apps go, Salesforce, sales software, has been far and away the App store’s best seller. That’s not terribly shocking consider that a lot of the apps aimed at business still seem relatively useless for the average entrepreneur or business owner. Read: they suck. For instance, how many people would actually find the Drapery Calculator—aimed at soft furnishings and drapery manufacturers—helpful? Or what about GarageBuy, an app that lets you search and bid on items on various eBay sites. Er, unless you trade on eBay for a living, what’s that got to do with running a small business? And, for some reason, half the business apps inexplicably seem to confer the ability to make and send voice recordings. On the other hand, other Apps like the Remote Desktop seems like they would have real, practical applications.

All you iPhone business users out there, what do you think? Have you found the iPhone particularly helpful for business? And are there apps that have made your life as an entrepreneur, business owner, or wannabe any easier?

appleapps