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Sunday, May 22, 2011

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Good Entrepreneurs Can Grow A Business Without A Large Budget

This Bookstore Made A Business Out Of Selling Just One Title
One of the biggest myths I still see in the community of new entrepreneurs is the assumption that “All I need is a good idea, and some investor will give me the big money I need to build the business.” In reality, investors fund good business plans, not big dreams. It’s all in the execution.

A related myth is that it takes a lot of money to start a business. Investment requests of $500K and $1M seem to be the most popular. In reality, most business today can be built and reach breakeven for much less than these amounts, maybe $10K-$50K, with the exception of some medical related ones, and high technology content solutions.

Starting your business with a very low investment is called “bootstrapping,” and these entrepreneurs usually have the most fun. They retain full control of their business, they don’t have an investor “boss” second-guessing their every move, and they don’t have to spend months begging for money. According to experts, up to 99% of businesses are started this way.

Here are some fundamental principles for starting and growing your business with a limited budget, as outlined in a book last year by Patrick Snow, “Creating Your Own Destiny”:

Run your business from the comfort of your home. Even though the cost of commercial office space is down, you still need to sign long-term contracts, make payments up front, outfit the space, and staff it. With a good website built in your basement, your business can look big, and be small.Match your business to your passion. You can’t be successful doing something you don’t enjoy. Passion isn’t really a substitute for money, but if you love something enough, you will find a way to get it done without paying much cash up front.Don’t hire any employees. Managing employees is a whole separate discipline, and most true entrepreneurs aren’t very good at it anyway. Running a business is not rocket science, so you can learn how if you have enough passion. Make sure any employees needed are a function of your “bandwidth,” not your confidence or interests.Build a low-budget plan. This is the opposite of starting without any plan. Operating without a plan is a sure way to spend lots of money. Low-budget also means avoiding businesses that are capital intensive, or even a franchise, which often requires a big up-front investment.Make money whether you are working or sleeping. E-commerce on the Internet is a good example of this. There you can sell your products and services 24 hours per day, seven days a week, on a global basis. Other examples are recurring revenue streams, like subscription fees, or referral fees, or subcontracting where you take a percentage.Minimize inventory, or let the manufacturer carry it. Have you ever wondered who owns all the new cars in dealer lots? It’s not the car dealers. Another example is the Amazon.com model, where they order your product for direct shipment, only after they get your payment. Consultants don’t need any inventoryBarter your skills or equity for services you need. An example would be getting free office space by agreeing to be the property manager for the owner. Exchanging equity for services is worth negotiating with legal counsel, accountants, engineers, and even sales people.

Most experienced investors are convinced that too much money is a bigger risk than too little money. Good entrepreneurs can often find a substitute for money, but there is no substitute for time and determination. So keep your eyes and your heart focused on the business vision and the tips given here, and you won’t need a big budget to achieve your biggest dreams.

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A Playbook For Using Social Media In Your Company (INFOGRAPHIC)

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OnlineMBA provides comprehensive, up-to-date, and accurate information regarding top online MBA programs and degrees.

While everyone has observed the way social media has transformed everyday life, its impact on the world of business has been well defined.

Hoards of new companies have sprung up for the purpose of utilizing social media for business growth, while older, more established businesses are scratching their heads as innovation passes them by.

Whatever the long term effects of social media on business, it is generally agreed that any company will benefit dramatically from adopting a social business model, lest the newly-formed social customer move on to more modern alternatives.

Michael Brito, a leading expert in social business models, has organized an infographic detailing the who, what, why and how of the social business imperative.

Click image to enlarge.

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Why You Should Ignore Yelp Reviews

Six years ago two partners and I opened a small grab-and-go food business. The store was their idea, and it was a smart one: Nobody nearby was offering high-quality prepared meals. The business (which I won’t name because my partners prefer to stay out of the spotlight) has done well. Many customers adore our food. But if you go online, you might think otherwise.

That’s because of another business that took root around the same time: Yelp, a website that allows users to rate and review all kinds of service businesses, from restaurants to moving companies to churches. Yelp’s business model, like those of TripAdvisor and IMDb, relies on user-generated reviews. And, as online retailers have learned, comments can have a big impact on customers’ decisions. Think about it: How often do you check reviews before buying on Amazon?

For managers, this creates both an opportunity and a dilemma. In theory, customer feedback, whether positive or negative, is a good thing, because it allows a business to improve. In reality, it can be hard to figure out what kind of feedback is legitimate—and how responsive to be. In both my consulting work and my executive teaching, I’m asked about this issue frequently.

When we were getting started, my partners and I obsessed over Yelp reviews. It hurt when someone wrote, “If you have money to spare, I suppose you could do worse.” We were tempted to rethink our model when one critic complained, “The prices are seriously whacked—$6 for...basically schmancy gas station food.” We have plenty of good reviews, too, but even today our Yelp rating is just three out of five stars.

It’s hard to ignore feedback, especially when it is so frank. But because the reviewers in social media are usually anonymous, it’s hard to know whether they are representative. In 2009, we had a rare opportunity to meet some of them. That fall we attended an event where Yelp hosted several hundred “elite users”—the volunteers who write many of its reviews. As we handed out (free) food, I realized that these people looked nothing like our customers, who tend to be over 30 and professional. The Yelpers were mostly in their twenties. From my conversations that evening, I learned that most of them don’t want to pay premium prices for premium food. Economically, that makes sense. They are apparently less affluent than our customers. They may have many motivations for writing free reviews, but they are likely to have ample spare time and to be highly price sensitive—factors that undoubtedly color their postings.

This post originally appeared at Harvard Business Review.

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Whatever You Feel Compelled To Do, Don't

Remember the last time you pushed the "send" button for an email and then instantly regretted it? Or snapped at someone in a moment of frustration?

It's easy to recite the litany of all we do wrong in our lives — eat and drink too much, exercise and sleep too little, spend too much on things we don't need and run up too much debt, judge others too quickly and embrace them too conditionally, profligately consume resources and spend too much time obsessing about our own needs and too little focused on the needs of others.

We know better. We're capable of better. So why exactly do we make so many short-sighted destructive choices?

Let me suggest a very basic answer: Unbeknownst to most of us, we each have at least two very distinct selves. They don't know very much about one another. If you have any doubt this is so, think for a moment of what you're like at your best, and what you're like at your worst. Which one is the real you? The answer, of course, is both. Two selves — both you.

Under ordinary circumstances, our parasympathetic nervous system and our prefrontal cortex are running the show. We're capable of thinking clearly, calmly and logically. In our work at The Energy Project, we call this the "Performance Zone." It's here that we're capable of operating at our best.

In the face of a perceived threat, however, our sympathetic nervous system and amygdala take over and our second self steps up. A flood of stress hormones is released. Our pre-frontal cortex shuts down, we become narrow and more myopic in our vision, and we react more primitively and instinctively.

The physiology of fight or flight mobilizes us to attack, or run like hell. Think of this as the "Survival Zone." It's a great place to be if there's a lion coming at you.

It isn't great in situations where thinking is an asset. The problem is that our bodies respond to any perceived threat — say, a critical comment from a colleague or a boss — by fueling the fight or flight response. We lose our capacity for rationality and reflectiveness, and we mostly don't realize we've lost it.

Consider a classic question you've surely asked someone — or been asked yourself: "What were you thinking when you did that?"

More often than not, you weren't thinking anything at all. You were just reacting.

Once stress hormones stop circulating through your body, the capacity to think logically returns. But that doesn't mean we take responsibility for our bad behaviors. Instead, many of us use our prefrontal cortex to rationalize what we've just done without thinking. We seek to justify, or minimize, or deny our responsibility for behaviors that were in fact hurtful and destructive to others.

We misuse the gift of our cognition.

Think of all the bankers who made irrational, sub-prime loans that were sure to eventually fail, but have yet to take any responsibility for their self-serving misdeeds — or been held accountable.

So what's the antidote to behaving reactively — and badly — when we feel under threat?

The first step is to become more aware of when your emotions begin to turn negative. That may mean noticing your heart beating faster, or tightness in your chest, jaw, or forehead.

The next step, when you sense you're getting frustrated or anxious, is to apply "The Golden Rules of Triggers." It's very simple: Whatever you feel compelled to do, don't. Compulsions are not choices, and they rarely lead to positive outcomes.

The moment you feel yourself moving into the Survival Zone, label it: "Ah, there I go." Take a deep breath. Inhale through your nose to a count of 3, and exhale slowly to a count of six. That will quiet your body.

Finally, feel your feet, to get out of your head and ground yourself in the reality of the present moment.

You've just bought time. Now you should be able to ask yourself "How would I behave here at my best?" and make a conscious choice about how to respond.

This post originally appeared at Harvard Business Review.

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The 15 Best-Paid Jobs In America

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What jobs pay the most? It’s that time of year when the U.S. Bureau of Labor Statistics crunches through reams of data on 800 different jobs to tell us how much Americans earn and which jobs pay the most and least.

If you’re well established in a career, the news is merely voyeuristic — a matter of looking over your colleagues shoulders to see what they might earn. But if you’re young and seeking work — or older and retooling — the annual occupational wage data might suggest where to focus your energy.

Of course, the jobs that pay the most are also the hardest to get. The 10 largest occupations account for more than 20% of the nation’s 127 million jobs, according to the BLS. But only one of the 10 largest occupations paid more than the national average wage of $44,410. That one position: Registered nurse, which pays an average wage of $67,720.

It’s far easier to get a job as a waiter or fast-food worker, which account for nearly 5 million positions, but pay less than $10 an hour and make up some of the America’s worst paid positions.

Earning a really lucrative income is likely to require lots of schooling. An analysis of the government data shows that the top-paid professions in America are dominated by positions that require a medical degree — although there are 27 jobs that don’t require a medical degree. What jobs pay the most — and how much is that exactly?

This post originally appeared at BNET.

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INSTANT MBA: Accept Negative Feedback -- You're Better Off In The Long Run

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Today's advice comes from Jeff Bezos, founder of Amazon:

"[W]e allow negative customer reviews on the website. In the early days, I'd get complaints from mostly book publishers because we were mostly books at the time, and they would say: 'You don't understand your business. You make money when you sell things. Why don't you delete the negative customer reviews?'

"And our thought on that is very different. We think we make money when we help customers make purchase decisions. And that's different. It's point of view.

"There's a great Allen Kay quote, he said, 'Point of view is worth 80 IQ points.' And if your point of view is I'm going to be long-term oriented, then that long-term orientation allows you to align your behaviors and your activities with your customers. Because in the long term, take a sufficiently long investment horizon, customers and shareholders are very aligned.

"If you're trying to optimize things for the next three months, then you would go get rid of all the negative customer reviews, because for three months, your sales would go up. But if you're really focused on the long term, you want to help people make purchase decisions, and people will say, 'This is a very useful site because it helps you make purchase decisions.'"

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The Laws For Sexual Harassment In The Workplace Are Murkier Than You Think

The news about both Dominique Strauss-Kahn and Arnold Schwarzenegger has brought renewed attention to what seems like a myriad of past allegations of sexual harassment by the two politicians. Strauss-Kahn and Schwarzenegger have also both now acknowledged relationships with women who worked for them.

So, when something happens between a boss and employee, where’s the line between harassment and a consensual relationship? It turns out the law isn’t as clear as you might think.

In the United States, certain situations are considered inherently coercive. For instance, sexual contact between prison guards and inmates—even if it’s entirely consensual—is sexual abuse by definition. However, laws governing the workplace are far more permissive, though companies may adopt their own, more stringent policies.

Under U.S. federal anti-discrimination law, sexual advances or comments in the workplace aren’t necessarily against the law, and that’s even if there’s a big power gap at play, Ernest Haffner, a senior attorney at the government’s Equal Employment Opportunity Commission, told me.

“If that were true, a romantic relationship could never be consensual or welcome in a particular workplace,” Haffner said. “I don’t think case law supports that.”

Instead, the test is whether the sexual comments or conduct was unwelcome . Sound simple? Not so fast.

Experts say there aren’t hard-and-fast rules for judging whether conduct is unwelcome. “Unwelcomeness is tricky,” said Haffner. “The person may subjectively believe that the conduct is unwelcome, but you have to objectively be able to show it.”

In some cases, a person may be able to show that advances were unwelcome even though he or she didn’t protest or say so at the time. “Consensual” isn’t the same thing as ”welcome,” experts say. It all comes down to a close analysis of any given situation.

Lawyers told us that power dynamics can be a factor. Past history between the two people can also be a factor. Even body language can be a factor.

“The bright line is it being unwelcome, but the facts that make that up are really going to depend on the circumstances,” said Fatima Graves of the National Women’s Law Center, noting that courts have ruled differently. “Some courts have said that it’s important for the employee to communicate clearly that it is unwelcome,” Graves noted.

That’s why the government and anti-discrimination groups encourage people who believe they’re being harassed to inform the harasser directly that the advances, comments or conduct are unwelcome. Legal Momentum, a women’s rights group, warns the targets of harassment, “Your legal claims can be hurt if you keep silent.” It also provides a sample letter [PDF] to send to a harasser, suggests reporting the harassment to the company and recommends holding on to all records documenting the harassment itself and complaints about it.

Once it’s established that the conduct was sexual harassment, it’s up to the company to prove that it’s not liable. If the harasser was in a supervisory role, the company is almost always liable, though companies can try to argue that the person didn’t make use of internal channels to report the harassment or waited too long to do so.

Under U.S. anti-discrimination law—civil statutes—there are caps on how much companies can be forced to pay if the case goes to trial. They’re based on the size of the company—and awards for even the largest companies are capped at $300,000, though this doesn’t include compensation for, say, medical or therapy expenses incurred as a result of the harassment.

More often than not, however, these cases will settle out of court. President Bill Clinton famously paid Paula Jones $850,000 to make her sexual harassment lawsuit go away, with no apology or admission of guilt needed on Clinton’s part. Just last year, former Hewlett-Packard CEO Mark Hurd settled for an undisclosed amount a sexual harassment claim brought by a company contractor.

Not all workers in the United States are covered by federal sexual harassment laws, however. The housekeeper with whom Schwarzenegger fathered a child out of wedlock, for instance, most likely was not.

“You have to have so many employees before you’re covered,” said Michelle Caiola, a senior attorney at Legal Momentum who previously worked for the government’s EEOC. “Being an employer of one person in a household—that wouldn’t be covered.”

This post originally appeared at ProPublica.

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Saturday, May 21, 2011

Apple Is A Religion: Neuroscientists Find Both Trigger The Same Reaction In Your Brain

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Image: BBC

The cult of Apple is real, according to neuroscientists.

They compared MRIs of Apple fans' brains to those of people who call themselves "very religious" and found that Apple and religion light up the same part of the brain. This means that Apple triggers the same feelings and reactions in people as religion.

BBC highlights the finding in an upcoming documentary, Secrets of Superbrands.

The documentary also likens Apple Stores to cathedrals. "Apple stores often feature stone or other types of austere, simple flooring like a church with products mounted on pedestals like individual altars," writes Inc's Renee Oricchio.

Apple store launches are like religious experiences too. "The scenes I witnessed at the opening of the new Apple store in London's Covent Garden were more like an evangelical prayer meeting than a chance to buy a phone or a laptop," writes Alex Riley and Adam Boome of BBC.

"Inside the store, glassy-eyed staff were whipped up into a frenzy of excitement, jumping up and down, clapping and shouting. When the doors finally opened, they hysterically "high-fived" and cheered hundreds of delirious customers flooding in through the doors for hours on end."

It seems Steve Jobs really is a God to some people.

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The 18 Longest-Serving CEOs

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CEOs seldom keep their spot at the helm of a single company for long, but occasionally a select few manage to stick in the same place for decades.

Many of their names have become synonymous with the companies they helped grow into global empires.

How did they manage to do it?

We've compiled a list of 18 current CEOs of public companies -- with upwards of $10 billion in revenue, according to Fortune -- who have stayed in the same spot for 15 years or more.

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Silicon Valley Guru Steve Blank Welcomes The New Bubble And Says Microsoft Is Doomed

Steve Blank is the closest thing Silicon Valley has to a guru.

The serial entrepreneur turned writer and professor has a big theory: entrepreneurship is a skill that can be taught.

At Stanford and Berkeley, Blank teaches scientists to get out of their labs and find real customers for their ideas -- without getting bogged down in the traditional MBA weeds of spreadsheets and revenue models.

Blank and a few other like minds traveled a lonesome road earlier this decade, but now their ideas are broadly admired, and they help inspire the current crop of startups coming out of the Valley -- and the angel investors and VCs who fund them.

We caught up with the outspoken professor to talk about the state of the tech business today.

Highlights from our conversation:

The LinkedIn IPO "absolutely" marks the beginning of a bubble -- and he thinks it's going to be great. He likens it to the Netscape IPO in August 1995 that kicked off four years of boom times, but notes that this time VCs actually know how to build real companies with real revenue and profit.Crazy investors -- not geeks -- are what makes Silicon Valley unique. Without the "crazy" financiers willing to take big risks in hopes of chasing "obscene" returns, the valley would just be "a bunch of smart scientists and entrepreneurs sitting in their labs and their garages."Microsoft will start to fail within six quarters. Blank put a timeline on Microsoft suffering the kind of huge loss that drove IBM to restructure itself back in 1993: six quarters from now. He thinks Steve Ballmer is a "miserable failure" and that the board should be blamed for not replacing him. He also suggests that buying Nokia and installing Stephen Elop as CEO might be a solution.But Larry Page is doing the right thing at Google. By letting the geeks run the show, Page is following in the footsteps of one of the earliest Silicon Valley pioneers: Fairchild Semiconductor in the 1950s.

Here's a lightly edited transcript of the full interview.

Business Insider: Let's start with the big LinkedIn IPO this week. Do you think we're at the beginning of another big tech boom like the 90s?

Steve Blank. Absolutely. Tech boom and bubble. Away we go. I think it's going to be great.

BI: So you'd call it a bubble?

SB: Oh absolutely. There's no rational basis for the valuations. It doesn't mean it's a bad company, it just means that we're now into buying things because we think the sector's going to be hot and there's going to be more to follow.

I also think we're much smarter this time. Last bubble, we didn't say it was a bubble. We said it was the new normal. Now at least journalists and financial analysts are being smart and asking "what does this mean and when does it end?" I think it's not March 2000, I think it's August 1995 -- Netscape's IPO. It'll bring a lot of cash and innovation into technology clusters.

BI: Other than the fact that people recognize it as a bubble, do you see any other differences between what's happening today and what was happening in the late '90s?

SB: It may be instructive to remember what happened before the late '90s. VCs tutored their companies on how to grow revenues and how to get customers. Up to August '95, you couldn't take a company public through any of the boutique technology players, the Hambrechts, the Robertsons, the Montgomerys, without having five quarters of increasing profitability and revenue.

August '95 through March 2000, the rules changed because there was an unending appetite in the financial markets -- VCs didn't have anything to do with it, it was the investment banks and the public. So venture capitalists -- because they're smart and organized to optimize profits for their limited partners -- stopped being company builders and started becoming financial engineers. Startups and Silicon Valley companies were no longer building revenue or profits, they were building slideware and concept and hype. If it had the letter "e" or "Internet" it was a concept IPO.

Post-crash, VCs picked through the rubble and spent the last decade building companies. This bubble is beginning not with hype, but built on the rubble on the last one. These first 10, 20, 50 companies coming out that have filed have real revenue, real profits, real customers. I think that's dramatically different between this bubble and the last. I'm not concerned about the first wave of companies.

We also know now, which we didn't 10 years ago, how to eliminate the egregious infant mortality risks. It used to be war stories. Now I can probably say "talk to me about your customers" after 6 months. If you can't do that, I can't guarantee you're going to fail but you're sure not on a high probability trajectory.

"Tell me what you found outside the building." "Oh, we're still working on the spec." Not a good sign.

BI: So explain your concept of lean startups, what that is and why it works.

SB: Venture capital and technology entrepreneurship is at best 50 years old in its modern form. What we did for the first 50 years of startups was get it wrong. We treated startups as smaller versions of large companies. We said "everything you do for these large companies -- business plans, you need to write one. VPs of sales -- you need to have one. Revenue plans -- you need to execute that. Everything they do at IBM, you need to do in your startup, just a smaller version."

It took 50 years to realize why that's wrong. Large companies execute known business models, while startups search for a business model. The distinction between execution and search is huge. People who execute are incredibly uncomfortable in a chaotic environment, and people who are wonderfully comfortable in chaos go crazy in an execute environment. Business plans, which are great for your second and third product in a large company, are a joke in a startup when it's all a series of unknowns.

My work, Alexander Osterwalder, Eric Ries, and others are now creating the equivalent of a parallel stack -- what you learned in business school for execution, we're now teaching what you learn for search.

BI: I've heard some people criticize the angel model in that it encourages small ideas and small exits. Would you like to see more startups going for big, groundbreaking, home run ideas?

SB: I think that's people looking through the wrong end of the telescope. Those observations are wrong. Big ideas haven't gone away -- VCs writing $10 million checks haven't gone away. Even clean tech hasn't gone away. Adam Grosser raising $2 billion for a clean tech fund out of Silverlake. Elon Musk isn't putting rockets into space for 100 grand or doing Tesla [for cheap]. These are big money ideas.

We now have a methodology, we know how to time the money, so there's very few business cases where you should be taking tens of millions of dollars on day one, even for big ideas.

For example Facebook -- they could have raised a ton of money up front, but you don't need it up front, you need it in the back.

BI: What about big established companies like Google and Microsoft? How can they overcome the innovator's dilemma and recapture some of the energy of the startup world?

Next Page: Microsoft Is Toast.

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Caterina Fake: How To Avoid The Pressure Of The Startup "Sophomore Slump"

Athletes and musicians aren’t the only people who need to worry about the dreaded "sophomore slump."

Flickr co-founder Caterina Fake says it applies to entrepreneurship as well, and that it’s a risk every entrepreneur faces after a successful exit.

“You have to be aware of it and you have to not be afraid to fail," she said.

"You end up having all of these interviews with reporters who are crediting the reason you’re getting all this attention not to what you’re currently working on, but for the past success,” she said.

“The expectations are high, and everybody’s watching what you’re doing. To fail is even more risky than when you did it the first time around because the expectations are such that, ‘founder of well-known company X is now doing a new thing, and maybe it’s not actually very good.' That’s actually a greater fall from grace than if nobody knows who the heck you are and you’re just starting out.”

She said it sets you up in a position where there’s more to lose, and when there’s more to lose, people tend to take fewer risks. “It’s something you have to be perpetually looking out for. You have to keep on doing what you do.”

Fake said she started taking business risks when she was a little kid.

“I was one of those kids that always had a lemonade stand, a newspaper route and a little business that I created of selling knick-knacks that I had made,” she said. “I think that it was always an impulse that I had, and the manifestation of that was also that I wasn’t a good person working at a regular job that had a start time and an end time. I wasn’t very successful at that, so it trended naturally that way.”

She spent time living in Vancouver, which is where she started photo-sharing site Flickr. She and co-founder Stewart Butterfield launched the site in February 2004, and it was acquired by Yahoo in 2005 for a reported $30 million. Fake has said that the company kept its heart even after it was acquired, and credits the Yahoo team.

“I think it had the good fortune of good caretakers, the people who were managing it afterwards understood what it was and had a good understanding of what the heart of it was,” she said. “That’s a very important thing when your company has been acquired, you want to make sure that the heart and soul of it don’t get lost. It’s a very common thing for a company to come in and impose whatever the local culture is. The people at Yahoo really understood what it was.”

Fake also credits the Flickr community with maintaining the culture.

“It’s a really strong community, and it’s a really strong culture, and a lot of that was also because the contributors to Flickr were very strong as well,” she said.

Today Flickr is hosting more than five billion images, and counts U.S. President Barack Obama as a user. Fake says she always hoped the company would reach the level it’s at today. “You always hope that when you build a company it will thrive as it has. I think the lifespan of it is quite impressive,” she said.

She also said it’s been amazing to see photos on Flickr of President Obama with his family.

“The Obama administration especially has been very active on Flickr, which is a wonderful thing to see. From the campaign through the inauguration. Throughout his administration there have been some amazing photographs put on Flickr.”

Fake joined Yahoo after the acquisition in 2005 and stayed until early 2008. She launched her latest venture, Hunch, in 2009. The company provides recommendations based on users’ preferences, and is trying to build an online ‘taste graph.’ Though Fake’s role has come in to question in recent months, she said she’s pleased with the direction the company went in after it pivoted.

“All of the recommendations that you see on Hunch are contributed by users, and I think this is a really important part of the service because if you are able to capture human activity, you’re always able to make technology work in a much better way than it would without the human input.”

She said she’s proud to have contributed to the community aspects that carry on to this day. ”We’re centering on a theme here of setting things up well in the beginning. Constantly putting good back into the products that you build and the life that you lead is a very important thing to do.”

Though she could be comfortable with a big exit under her belt, with a new startup and investments in companies including DailyBooth and Etsy, Fake said it’s important continue to take risks as an entrepreneur.

“It’s about doing things that you haven’t done before, where you’re still kind of a beginner, and not resting on your laurels,” she said. “It’s a hard thing to do--there’s a ton of research that’s been done that shows that people are more afraid of losing what they’ve already acquired than of taking a risk and building something new. This is a really common quality, that you want to hang on to what you’ve already got.”

Flickr is credited with pioneering many of the user-generated content features associated with social networks today, like tagging and marking photos as favorites. Fake’s background is in online comm unites and user-generated content. Now that she’s an active angel investor and partner at Founder Collective, she said she’s drawn to companies that incorporate community participation--a “human” aspect as she calls it. These companies include fundraising platform Kickstarter and art community 20×200.

“There’s a very common theme if you look at the investments that I do, those are all things that have some aspect of user-generated content, creativity, self-expression. There’s something very human about all of those companies, the things that they create. That has been the type of company that I am very much drawn to.”

She said that while the founders of her portfolio companies are very different, they all have the same passion for community.

“The founders themselves are all very different. They have the same intuition about products, about how to create and build communities, how to sustain communities, how to create contributory systems.

“Kickstarter is growing like wildfire, and the reason for that is they’ve really found an amazing way of putting people together in a very human way. They’re really good at highlighting certain projects and matching creators and their funders. I see the same thing happening with 20×200, where they have created a great audience full of artists in the art world, which is actually a very difficult world to penetrate.”

She said that while the companies’ products and services differ, they have a lot in common: great products, great communities, community-building, self-expression, creativity and something very human.

She believes entrepreneurs flourish under apprenticeship, and said angel investors are often great teachers.

“A lot of the time the people that are doing angel investing--it’s very common for them to be entrepreneurs themselves. I am an angel investor and I have very close relationships with many of the people. I interact with them very frequently. Often you can find good mentors in the angel community.”

She says that mentorship doesn’t have to be one-on-one, though. Online resources can be the best source of knowledge for new entrepreneurs.

“You can learn from other people’s experiences, they write about them all the time and publish all kinds of articles and blog posts,” she said. “There’s amazing information out there about entrepreneurship, which didn’t exist when I was starting out in the early 2000s. I don’t necessarily think you need a single person to be your mentor; you can learn from everybody. The best way to do it is to just engage in the conversation. Participate, be in the community.”

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Most People Are Daydreaming 46% Of The Time

x You have successfully emailed the post. If you've ever been to a yoga class, your teacher probably harped on you about "mindfulness," or being present -- because it puts you in a better mood.

Now Harvard psychologists Matthew A. Killingsworth and Daniel Gilbert confirmed that the centuries-old Buddhist practice is worth paying attention to.

Using an iPhone app called trackyourhappiness, researchers asked 2,200 people globally to respond to text messages at any given moment, explaining what they were doing and how happy they were. After sifting through 25,000 text messages, Killingsworth and Gilbert found that 46% of the time, people were daydreaming, and they weren't all that happy. The ones who were fully engaged in an activity were happiest.

“A human mind is a wandering mind, and a wandering mind is an unhappy mind,” they said in the study, which was published in Science magazine. “The ability to think about what is not happening is a cognitive achievement that comes at an emotional cost.”

Basically, we're more likely to think negative thoughts if we let our minds wander. And it makes sense that commuters and people waiting in line are more irritable. “We see evidence for mind-wandering causing unhappiness, but no evidence for unhappiness causing mind-wandering,” Mr. Killingsworth told the New York Times.

Perhaps we could take the advice of William F. Buckley Jr., who once said, "Industry is the enemy of melancholy."

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Women-Owned Firms Aren't Growing Due To A Lack Of Role Models

It’s a great time to be an entrepreneur, and now there’s data to prove it: women have been starting businesses at 1.5 times the national rate and now account for 29 percent of all company owners in the U.S.

But this data, presented in the recent American Express OPEN Report, also revealed a new glass ceiling. While most women-owned businesses exceed their peers in key success measurements — revenue growth and number of employees — this trend stumbles at the highest levels of business size and achievement.

The report, the first to analyze the latest U.S. Census data and provide a view of business ownership over the last 14 years, found that at the 100-employee and $1 million revenue levels, the number of women-owned firms dives below that of men-owned and public ally-owned companies. Even more strikingly, women-owned firms only employ six percent of the total U.S. workforce.

What’s going on? And what needs to be done to help female entrepreneurs succeed beyond the small-business level? We sat down with the report’s author, Julie Weeks, to learn more about her findings and what they mean for the future of women-owned businesses.

Entrepreneurship is the next professional frontier. Women are increasingly more likely to hold senior-level positions in the workplace, and that gives them excellent skills with which to start a business. Women also have higher levels of education than ever before, and are more likely to have the kinds of degrees that can lead to greater success in business ownership, such as business or law.

Also, many women want the flexibility that comes with business ownership. Even though, as an entrepreneur, you will work much harder than you would otherwise, you are in charge of your own destiny. That’s very appealing to a lot of women.

Though women-owned firms are growing, they are not accounting for a very large share in the nation’s overall employment and revenue. So we took a look beyond those statistics to see what’s going on, and found that women-owned firms are really keeping up the pace in terms of revenue and employment growth fairly far along the business growth spectrum. Overall women are doing as well as the average firm, all the way to the $1 million in revenue and 100 employee mark.

That’s when they falter off the pace. Some might think that women-owned firms are starting small and staying small, and that’s not really true. They are growing…up until a certain point.

Certainly, the population of women-owned firms is younger than the population of men-owned firms. But it is more than that. I believe it has to do with the lack of role models, peers, and mentors, and that there are fewer women at that rarefied atmosphere. The informal networks that help business owners get doors opened for them are less available to women. The kind of capital that is required at that level is very much a referral-based system, and there are fewer women engaged in that system on both sides of the table.

What needs to happen on a systemic level to improve this?

From a public policy and a business support point of view, there has been far more attention paid to getting people into business than to supporting their growth once they’ve started. Widening the lens of business support beyond the startup is very important. We need to put attention on the “missing middle."

There is a lot of attention paid to startups, and then everyone salivates at the other end of the spectrum at the IPO-bound, fast-growth businesses. More attention paid to the middle would boost growth rates of the foundational businesses that are employing people, that do a lot for the economic vitality of local communities.

And particularly for the women’s business sector, paying more attention to growth-oriented support, making women’s business networks more available and mentoring programs more visible and active, and having a broader dialogue about what growth and success means would all help.

Traditional success only looks at financial goals: go public or get bigger and bigger. But a lot of women are put off by that discussion and want to grow their business a little more organically. Women are more likely to look at the “triple bottom line” (that is, taking into account a firm’s ecological and social impact rather than solely profit). Our dialogue and lexicon about success and what we want to achieve as business owners is minimized and taken less seriously since it’s not as testosterone-charged, and that does women a disservice.

But, there’s an increasing discussion that “profit above everything” isn’t good in the long run for communities and for the planet. Taking into account the impact of a business on the community and environment is a very important discussion to have. There are many communities that are hollowed out when one large company moves to another area, and without strong small businesses present, that community is left in a lurch. Big isn’t always best, growth for growth’s sake is not always the ultimate goal, and recognizing that there are different ways to lead a business is very important.

What better time to jump into charting your own future? If you get tied into a career path working for other people, you may be shutting off potential options for your future. And there’s a lot of support out there for young women interested in business ownership, and I think those resources are going to continue to increase.

Young professionals now have a much broader view and bigger sense that the sky’s the limit if you start a business, because you’re seeing all of the Mark Zuckerbergs out there. Not everyone will get that far that fast, but the more we show examples of younger people who have been successful very early in their careers, all the better.

I think perhaps they’re out there, but we're not looking close enough. I hope they’re out there! Or that they will be.

View the full report: American Express OPEN State of Women-Owned Business Report.

Julie R. Weeks is President and CEO of Womenable, a for-profit social enterprise that works to enable women’s entrepreneurship worldwide. She has over 30 years' experience in the fields of research design and analysis, public policy, and women's enterprise development. Prior to launching Womenable in 2005, Weeks was Executive Director of the National Women's Business Council and Managing Director and Director of Research for the Center for Women's Business Research.

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IDEA OF THE DAY: Get 25% Of The World's Beer Drinkers (Women) To Drink More

x You have successfully emailed the post. Image: Carlsberg
The idea: Enclose a 4.5% alcohol beer in a well-designed bottle, skip the obnoxious television commercials, and place it on the shelves of high-end bars across Denmark this year (the beer is called "Copenhagen"), then roll it out to the rest of Europe and parts of Asia in 2012.

Whose idea: Carlsberg

Why it's brilliant: The "Copenhagen" is marketed as an alternative to white wine or champagne.

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The Most Important Decision You Make Happens At Age 12

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We were all asked "What do you want to be when you grow up?" probably a million times during our childhood. It's no wonder that we felt pressure to come up with an answer.

Last year, literary critic William Deresiewicz advised Stanford University's freshman class to reevaluate the decisions they made at age 12, or 19. He said that too often, people continue on with a path because it's safe and conventional. Not that we all need to be Mark Zuckerberg or Ralph Lauren.

"Maybe you did always want to be a cardiac surgeon. You dreamed about it from the time you were 10 years old, even though you had no idea what it really meant, and you stayed on course for the entire time you were in school," he said. "Who wants to live with the decisions that they made when they were 12? Let me put that another way. Who wants to let a 12-year-old decide what they're going to do for the rest of their lives? Or a 19-year-old, for that matter?"

Basically, he told them to grow up. Maturity means you have to make tough, thoughtful decisions.

He even went so far as to say today's young people are part of a "postemotional" generation: "You prefer to avoid messy and turbulent and powerful feelings."

Without introspection, "You go from being a political-science major to being a lawyer to being a corporate attorney to being a corporate attorney focusing on taxation issues in the consumer-products industry."

And is that where you wanted to go?

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This Is The Best Way An Entrepreneur Has Ever Spent His FU Money

New Zealander Derek Handley's mobile marketing company, The Hyperfactory, was acquired last year by Meredith Corporation for an undisclosed amount.

Last month, he gave a speech at Kea, New Zealand's global network, about his life as an entrepreneur and explained what he did with the money from the acquisition.

Handley wanted to buy three things, and they weren't a mansion or a yacht:

1. A trip to Africa

2. A ticket to space

3. A letter Napoleon wrote to his generals

In his speech, he explains his unusual purchases.

"19,392 is apparently the number of days that I have left to live," Handley starts.

"And although it sounds like a lot, over the last few years I've come to realize that it probably takes you a good five years to achieve something meaningful. Turns out that 19,392 is really only 10 of those 5 year blocks. So when you think about having to achieve ten things and that's all you've got, you'll be much wiser in how you spend each of those chapters..."

"...When I was 21 and starting out, I was aspiring to be an entrepreneur, because I wanted to build businesses," Handley says. "I wanted to make a living, I wanted to make a mark, and I really wanted to make money.

"Ten years on, after this period I started to see things very differently and I started to see entrepreneurship as one of the greatest assets of society to make the world a potentially better place. As an answer to many of the world's ills, and as an enabler to much of the world's opportunity."

So, 30-year-old Handley took his "FU money" and made his three purchases.

"First, I went to Africa and discovered and learned all about how entrepreneurship and microfinance and microloans were empowering microentrepreneurs to lift themselves out of poverty in the present.

"Second, I bought a ticket to space with Richard Branson's Virgin Galactic [which costs $200,000] because I wanted to see the world from up there as one and be inspired by the future.

"And third, I bought that letter that Napoleon had written to remind myself of the past, and to never give up."

This is the Napoleon letter Handley bought (he used it as inspiration when The Hyperfactory was on the verge of failure):

We are at a time when you need to double the resolve, and double the vigor of ordinary times. Lead by example. Be the first to put yourself in danger. And with the troops that you have, I expect you to defeat double of theirs.

The full speech is 20 minutes long, but if you have time and want to be inspired, watch it:

Derek Handley from World Class New Zealand on Vimeo.

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Waiting Tables Is Now A Full-Fledged Career

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waitress Clarissa CruzClarissa Cruz is the former Style Editor of People magazine and has written for Entertainment Weekly, InStyle, Food & Wine, and Budget Travel.

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Caterina Fake: How To Avoid The Pressure Of The Startup "Sophomore Slump"

Most People Are Daydreaming 46% Of The Time

Women-Owned Firms Aren't Growing Due To A Lack Of Role Models

IDEA OF THE DAY: Get 25% Of The World's Beer Drinkers (Women) To Drink More

The Most Important Decision You Make Happens At Age 12

This Is The Best Way An Entrepreneur Has Ever Spent His FU Money

Waiting Tables Is Now A Full-Fledged Career

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