Last Minute Gift Ideas
We’re already in the second week of December! I for one have been so busy lately that I not only missed out on the Black Friday and Cyber Monday hoopla, but I still haven’t done any Christmas shopping!
I have a feeling that I’m not the only one, so I thought I’d provide you, dear readers, with a few holiday gift ideas from our Why Didn’t I Think of That? Companies. Continue Reading
Why Small Businesses Matter
Author Michael Ellsberg recently wrote a fascinating piece for the New York Times. He started by revealing he was typing his article on an Apple Computer, using Microsoft software. Once finished, he would share his story with the world via Twitter and Facebook.
The problem, revealed Ellsberg, was that the founders of every one of those high tech companies was a college dropout.
It was a compelling opening, and a masterful way to make his point — that higher education is failing America. Specifically that it’s failing to produce, or even encourage, job creators. Ellsberg’s premise is that our great universities have lost the interest, and/or ability, to generate the kind of people that made America the economic powerhouse of the world.
When you think about it, that’s not so surprising.
Who among us learned anything truly valuable – or interesting — about capitalism, stocks & bonds, or even personal finance — in a classroom? Why does the education system of the greatest capitalist nation do such a poor job of explaining what capitalism is, and how it works?
But the academic world isn’t the true problem.
Higher education can only reflect what a society values. And for far too long, we haven’t valued the foot soldiers who really make this country tick — the risk takers who come up with an idea, and lay everything on the line – personal property, personal savings, years of their lives — to make it happen. To start what all of those high tech companies were in their infancy: small businesses.
That’s why I’m so encouraged by the new national movement promoting “Small Business Saturday.”
Devised last year by American Express, Small Business Saturday is designed to be an annual celebration of the businesses that drive the American economy, businesses that provide over half of American jobs– not Hewlett-Packard, or Wal-Mart, or IBM, but the small businesses employing 500 or fewer people, the mom-and-pop corner stores, the newly conceived start-ups.
For the whole of this Saturday, American Express customers who register on Facebook, then spend $25.00 or more at a small business and will receive a $25 refund from Amex.
It’s a great promotion, and a nice attempt to encourage people to spend at small businesses, but the $25.00 refund isn’t the only reason to shop at a small business.
When people look at the mega-corporations and conglomerates that rule the market, they seem to forget a very important truth: virtually every business out there, no matter how large it is, had to start somewhere. Microsoft was dreamed up by a couple of Harvard drop-outs. Apple started in Jobs’ parent’s garage. Google started as a Stanford research project. The list goes on.
Every start-up’s got a chance of hitting it big, after all. But a small business doesn’t need to become big businesses in order to matter. Despite all of the high profile IPOs and internet giants dominating the headlines these days, small businesses are equally critical to the economy. But the health of the small business ecosystem can be a lot harder to gauge than companies trading on the Dow Jones. Maybe for that reason, it’s so easy to forget about them.
Thankfully, American Express and their much-appreciated faux-holiday aren’t the only ones trying to remind the American public.
The U.S. Small Business Administration recently sent out a message to young, unemployed people across the nation: stop looking for a job, and make one. Start your own business. Sure, it’s easy to get lost in the maddening scramble to find a “real job.” But, the SBA’s eager to remind us- capitalism is about a lot more than nine-to-fives and blind consumerism. It’s about making your own opportunities. And the SBA is putting its money where its mouth is.
According to the Washington Post, the SBA Deputy Adminstrator Marie Johns is touring the country with something known as the Young Entrepreneur Series, attempting to shed some light on the many resources available for entrepreneurs- and bolster those who are uncertain of their future with a few rousing success stories.
“There is such a lack of awareness of the resources that are out there among young people,” Johns told the Post, “we need to grow the economy and create more jobs in the country. We need everyone who may have a dream or an idea to go out and do it.”
Of course, starting a small business isn’t for everyone.
“Unemployed people tend not to start as successful companies on average as people who are employed do,” said Scott Shane. Scott, a professor of entrepreneurship at Case Western Reserve University, is among the many experts who believe that, while the SBA’s heart is in the right place, its message might not be entirely helpful to the 16% of unemployed men and women under the age of 24- which is, currently, its target demographic.
“You’re not going to get as many successful business with young unemployed people as if you put your money into encouraging entrepreneurship among employed, middle-aged people- one of the greatest assets a business owner can bring to a fledgling company is an existing consumer base, as well as industry knowledge…what’s more, the self-employed are especially likely to report that they find their work stressful.”
Johns, while she acknowledges the viewpoint of Shane and others like him, also feels that entrepreneurship is still a worthy path, and pointed to the large range of resources the SBA provides hopeful entrepreneurs- including a free training program, access to microloans, and counselling for young men and women.
“The company they start may last for a season. It may be their life’s work, it may lead to other things. Either way, it’s well worth the effort.”
Johns acknowledged that “being a small business owner is not an easy road — it takes drive and determination.”
She encouraged young entrepreneurs to look into the SBA’s resources if they’re considering small-business ownership as a career path. Among other things, the SBA provides a free entrepreneurship program, access to microloans and counseling for young people.
The SBA will be travelling to Tahlequah, Oklahoma on November 29, and Milwaukee, Wisconsin on December 1.
Whether you go out and spend a little extra cash at a small business today or not, today is as good an opportunity as any for a little reflection. It’s easy to get embittered about our society. It’s easy to feel helpless as a small business owner or as an average citizen. Sometimes it seems that all the power is in the hands of the monopolies or the corporate lobbyists. But there’s a reason that Small Business Saturday comes right after Thanksgiving. Just as Facebook, Microsoft, Twitter and Apple were all founded by dropouts, so too was America. We are a country built on the premise and the promise of personal freedom- the freedom to realize your own goals, the freedom to pursue your own vision of success and happiness. Millions of American entrepreneurs and small business owners are doing just that. Not all of them will weather the storm or find their fortunes. But they deserve our nation’s collective recognition and respect. And not just one day a year.
Robert Smith, Nicholas Greene, and Benjamin Christopher were all contributors to this piece.
Robert Smith is the co-founder and co-host of Why Didn’t I Think of That? Bob is a voice talent and communications professional who’s held leadership positions in corporate marketing, advertising and broadcasting.
Nicholas Greene is a freelance writer based out of Calgary in Alberta, Canada. Nick has been writing since he was old enough to pick up a pen and has contributed to numerous tech blogs over the course of his career.
Amazon’s Fire Sale
Amazon.com Founder and CEO Jeff Bezos says that Amazon is “the only tech company with low margins.”
Low margins is an understatement. The company is losing money on every single Kindle Fire tablet they sell. But it’s all part of Jeff Bezos plan to conquer the Universe. He may or may not succeed, but one thing’s clear: The Kindle Fire is about to change the tech industry forever.
About a year ago, a tech blogger noticed something strange. He laid out the various price points Amazon has charged for its Kindle e-reader on a simple bar graph, with the Y-axis representing the dollar amount, and the X-axis representing the date of the Kindle’s price change. What he found was that the Kindle, which originally went on sale in 2009 for $399, was dropping in price at a perfectly consistent rate. If the trend continued, he extrapolated, the Kindle would be free by November, 2011.
In August 2010, blogger Kevin Kelly had the chance to mention this to Jeff Bezos, the founder and CEO of Amazon. Bezos just smiled and said, “Oh, you noticed that.”
Then he smiled again.
The Family
Well, November 2011 is here, and we don’t have a free Kindle. What we have instead is a brand new Kindle family, which includes the Kindle Fire–a full color Android tablet–as well as the Kindle Touch–a standard Kindle with an e-Ink touch display–and the cheapest Kindle yet, an ad-supported model that’s retailing for $79. Wired Magazine brought up the idea of a free Kindle to Bezos again this year. He responded, “It’s an interesting marketing idea, and we should think about it over time. But $79 is low enough that it’s not a big deal for many people.”
It shouldn’t come as a surprise that Bezos isn’t ready to give away the Kindle just yet. Especially when you consider the fact that he’s already losing money on it. And not for lack of sales. Whereas Apple will sell their iPad for twice as much as it costs them to manufacture it, Amazon is selling much of their hardware at a loss. Their goal isn’t to make money on the millions of Kindles and Kindle Fires that they’ll be selling this holiday season. Their goal is to make new customers.
Because of that, many people haven’t ruled out Bezos offering free Kindles to Amazon customers in the near future. Sure, he’s indicated that it isn’t a part of his short-term strategy, but like anything else he says, it’s best taken with a grain of salt. His secrecy is a thing of legend, and, from what I’ve found, he has no qualms with misleading journalists if it means keeping the cat in the bag for a little bit longer.
When Bezos spoke with Wired Magazine last October, for instance, he was quoted as saying, ”The number one app for the iPad when I checked a couple of days ago was called Angry Birds–a game where you throw birds at pigs and they blow up. The number one thing on the Kindle is Steig Larsson (author of The Girl With the Dragon Tattoo). It’s a different audience. We’re designing for people who want to read.”
Even as the words were coming out of his mouth, development on the Kindle Fire tablet was likely well underway. Of course, it’s not a complete about-face. The Fire and its black-and-white kin appeal to two different, if overlapping audiences. The traditional Kindle, Bezos argues, can’t be beat when it comes to long-form reading. The Fire, on the other hand, is perfect for reading a magazine or watching a movie. Ask Bezos whether Kindle users should switch over to the Fire tablet, and his response is: ”They should buy both.”
Not a surprising response from a man who runs the largest eCommerce store on Earth. But with prices like these, it’s kind of hard to argue with him.
The Price
“The main tactic Bezos employs is quite simple: low prices. It’s hard to argue with that tactic. Who doesn’t want low prices?”
-Richard L. Brandt, One Click: Jeff Bezos and the Rise of Amazon.com
The thing that amazes me most about Amazon is that they still have the power to amaze me.
When I got my second generation Kindle two years ago, I was amazed that it offered a free wireless connection anywhere. I was amazed again when Amazon began offering models for as cheap as $130, the following year.
By the time the Kindle Fire was announced last September, I was ready to not be amazed. All the tech bloggers knew that Amazon had an inexpensive, full-color Android-powered tablet in the wings. But when the news finally broke and Jeff Bezos unveiled the much-anticipated Fire, I couldn’t help it– My jaw dropped.
A good friend of mine was working for an ad agency that had made a bid on the Kindle Fire campaign earlier this year. He had been given most of the critical specs of the tablet and was sworn to secrecy. But even he was shocked on the day of the Kindle Fire’s announcement. While he’d been privy to most of the Fire’s specifications, there was one detail they managed to keep a secret: the price.
The Kindle Fire costs only $199. That’s less than half the price of the cheapest iPad model available, and almost exactly half the price of the very first Kindle. Here’s some more perspective:
One year ago, I was writing about Samsung’s Galaxy Tablet, last Christmas’s only real iPad competitor. The cheapest version of the tablet was a $399.99 promotion T-Mobile was offering with a 2-year data plan. Without a data plan, it costed $649. And it wasn’t even a very good tablet.
So how can Amazon sell the Kindle Fire so cheap without losing money? The short answer is: It can’t. Each $199 tablet that Amazon sells actually costs them about $201.70 to manufacture. Continue Reading
Take Your Business Elsewhere
By Nicholas Greene
These days, more and more entrepreneurs are looking to found start-ups in new locales. The reasons are many and varied: better economy, better market for their products, better IT infrastructure… Even a better climate can play a role.
Now, governments must do whatever it takes to attract new businesses, or risk getting left behind today’s global economy.
To truly thrive in today’s global market; a country needs to be capable of attracting the best and brightest entrepreneurs from around the world. They need to make sure that up and coming start-ups have an easy time of setting up shop on their soil-or they’ll just take their business somewhere else.
So it should come as no surprise then that many governments are doing everything in their power to attract new start-ups. If they can offer an aspiring entrepreneur enough incentive to start a business in their country, it’s a win-win for both the company and the local government. The problem, though, is that some countries are losing a lot of new businesses–and economic growth–to neighboring nations with more aggressive strategies for enticing start-ups and small businesses. Such companies, of course, can play a vital role in a nation’s economy-at-large.
Canada is one such country that has been losing out. ”Canada has fallen behind the pack,” Maura Rodgers of BCBusiness explains. “[Canada's] existing entrepreneurial immigration programs are outpaced by aggressive new policies from more forward-thinking nations. Since 2006, the number of immigrants in the entrepreneur category applying as permanent residents in Canada has dropped by more than half. ”
Canada isn’t alone. Many politicians have been arguing that the US is losing out on a lot of new businesses. As the Boulder County Business Report paraphrased Congressman Jared Polis–speaking at a recent open-house on immigration laws and entrepreneurial visas–”Allowing students to come to the U.S. for college or graduate school but then making it very hard for them to remain in the U.S. is essentially subsidizing job creation in other countries.”
Is there a solution? As a matter of fact, there is. That would be the proposed American Startup Visa Act.
The bill, which was introduced earlier this year and is currently languishing in congress, would make it much easier for any immigrant entrepreneur to receive a two year visa if they had a “qualified U.S. investor” ready to put money into their startup.
Senator John Kerry, who introduced the bill along with Senators Richard Lugar and Mark Udall, explains:
“Every job-creating American business started as an idea in the mind of an entrepreneur. We need to keep and bring more of those ideas to our shores where they can put Americans to work. Global competition for talent and investment grows more intense daily and the United States must step up or be left behind.”
The American bill was followed by a similar effort from the Canadian government. In August, Canada announced its own program, aiming “to upgrade [the] country’s immigration program by making it easier for prospective entrepreneurs with Canadian investors to launch science and technology companies.” According to Canada Updates, this act is backed by three principles: The Canadian Venture Capital Association, co-founder Boris Wertz of Growlab, and Danny Robinson of the B.C. Innovation Council.
“We are already falling behind countries like Chile, Singapore, and Britain, who have already upgraded their programs,” stated Wertz, “but I believe we can learn from them and make ours better.”
Canada and the US aren’t the only countries to toy with the idea of a start-up visa. In truth, they’re actually a bit late to the party.
Start-up Chile offers entrepreneurs $40,000 and a year-long residency if they bring their business ideas along for the ride. Britain’s own start-up visa allows any entrepreneur with at least 50,000 pounds of funding from a reputable organization to set up shop on a one-year visa. Singapore has similar requirements for foreign start-ups; requesting that any entrepreneur wishing to set up shop in the country inject at least $50,000 in their company. All three of these programs are already up and running.
Canada and America’s programs, on the other hand, have yet to gain Congressional approval.
It’s a problem. Potential immigrant entrepreneurs frustrated with the difficulty of setting up a business on American soil are seeking alternative locales. At a Start-up Chile event, for example, at least a quarter of attendees said that they would have started in the US, were it not for America’s policies on immigration.
As the global economy becomes more interconnected, immigration programs are going to become more and more integral in securing the best up-and-comers on the market. Until Canada and the US get their act together, they’re going to keep losing jobs and businesses to other nations where conditions are more favorable to foreign entrepreneurs.
Want to send Congress a message? Let them know you support the American Startup Visa Act.
Don’t think the bill is a good idea? Tell us why in the comments below!
Contributor Nicholas Greene is a freelance writer based out of Calgary in Alberta, Canada. Nick has been writing since he was old enough to pick up a pen and has contributed to numerous tech blogs over the course of his career.
What is Start-Up Success?
What is success? The founder of a tech start-up might have a very different answer than you or I. For some, success might be landing on the cover of Fortune or Forbes Magazine. For others, having their product become a household name would be success. For new tech start-ups, it’s a lot more fundamental than that: Swim. Don’t Sink.
It should come as no surprise that the majority of tech start-ups fail, often early on. Having a start-up is a lot like having a child, in some ways. The first few years are the most critical. Nurturing an infant start-up can be a thrilling, exhausting, and stupefying process. All your careful preparation goes out the window, and life becomes one big frantic scramble toward a singular goal: Keep the baby alive and healthy.
Aside from just not failing, there are a number of success stories entrepreneurs hope to someday tell their kids. Seeing a company through to a lucrative I.P.O. (Initial Public Offering) would be a dream come true for some. Selling your company off to a competitor would be a very attractive scenario to many start-up owners. Some people won’t be satisfied until they’re an iconic CEO on the level of Steve Jobs, Larry Page, or Mark Zuckerberg. All of these would be valid examples of success. The tricky part is getting to that point before you run out of money.
Last month, as I was preparing to publish a feature on Particle Code, a young Palo Alto-based tech start-up, I ran across an interesting bit of news. That Monday, the company announced it had been acquired by Appcelerator, one of its main competitors. Reading the news, I felt some conflicting emotions. On the one hand, I was elated. A company we just so happened to be profiling had made the news, only a week or two after co-founder Galia Benartzi spoke with one of our contributors.
On the other hand, the news made me feel a little uneasy. And it’s not just because it meant the article would need some serious retooling. The fact of the matter was, the company, for all intents and purposes, didn’t exist anymore. It had been bought out and absorbed by a much larger organization. So, was it still even a success story?
It didn’t take too much soul-searching before I had my answer: an unequivocal Yes.
I explained it in the article this way:
“Even if their new roles as advisers turn out to be purely ceremonial, the founders of Particle Code can rest easy knowing that their little tech start-up was a true success. In a phenomenally short period of time, they invented and streamlined a technology which not only saved their mobile gaming company time and money, but also went on to become its own company, blossoming into a set of useful and versatile tools that have benefited countless other developers. Then after only one year, they were able to sell it, presumably for a profit, to one of their direct competitors.”
Acquisitions like this are common place in the tech world–in fact, having their company acquired is the penultimate goal of many start-up founders, second only to becoming the next Facebook or Groupon. Some of the most well known tech brands, from Android to Flickr, began as little tech start-ups that were eventually acquired.
While Particle Code’s employees all have a new home at Appcelerator, it’s entirely possible that Appcelerator will dismantle their new acquisition, throwing the brand out the window and stripping the company for parts. But in the cut-throat world of Silicon Valley start-ups, that’s success. For every Mark Zuckerberg or Andrew Mason in the world, there are a million start-up owners who would gladly trade their business for a lump sum payment. And that’s to say nothing of those “serial entrepreneurs” who flip start-ups like hotcakes.
Sure, there’s something to be said for staying for the long haul, seeing your company all the way from its inception to the cover of Forbes Magazine. But in the end, the important thing is achieving your personal definition of success. If you don’t have one, you can borrow mine:
Make an investment, build your company, get out ahead.
That’s success. It’s a simple enough game, but it’s a hard one to win.
