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SBA Expo, Day 3: And, We're Clear!
SBA Tips on Financing and Globalization
Bush Addresses SBA Expo on Energy Policy
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April 29, 2005
Diary of a Start-up
Diary of a Startup - Presenting to Investors
Posted by at 2:33 PM
It's Thursday evening April 28th and the past week has been stressful. Last week, a potential investor had submitted a due diligence list to us that we had five business days to complete. Rather than completing just what he asked for, I decided that we should be exhaustive and go far above and beyond his expectations as we are attempting to sell him on the notion that we are a quality company to invest in, with hard-working managers. Thus, last Thursday and Friday, we worked through the night and completed a 300-page investor deck for him. He was very pleased with our efforts when I presented it to him Friday morning. The nice thing about this investor deck is that we built a process around it so that it will be easy to replicate in the event that we have to produce it again.
Since then, our very serious potential investor has taken off for Italy for a one-week vacation and we have not wanted to stand idle. As such, I presented to four more groups this week, enduring an inquisition from a team of five venture capitalists in one case. If you have never been in a position to present to VC's and pitch them on your idea, it's quite an experience and I would highly recommend that you wear plenty of deodorant because they certainly make you sweat.
I have found that as an entrepreneur, I constantly need to be traveling down parallel paths and multi-tasking as there is always some dilemma. That being said, one of the issues surrounding our very serious investor's interest in our business is that he will absolutely not invest until I have fully bought out my former partner. My former partner and I had an agreement on a buyout that would take place over the course of twelve months, because we could not afford to pay him everything in one lump sum. But now I need him out of the business immediately. So I have gone back to him to renegotiate and it has not been a pleasant process as it has included a few discussions with raised voices.
Over the next week, we plan to hear a definitive answer from our potential investor as to whether or not he would like to move forward. We also plan to nail down and finalize the renegotiation of the buyout contract with my former partner. I'll be back next week to report.
Diary of a Startup is a weekly blog written by Pete Kadens, founder of Acquirent, an outsourced sales execution company based in Chicago. Click here to read last week's column.
The Apprentice
The Apprentice - Week 14
Posted by Nadine Heintz at 10:29 AM
Tana really blew it. She's usually great at marketing, but, last night, all she cared about was the BeDazzler. Of course, the BeDazzler is pretty fabulous, but having rhinestones on the T-shirts wasn't going to make or break the task. The marketing was going to be the deciding factor, as it is with most of the Apprentice challenges. Is Tana downward spiraling?
I've never been an Alex fan, but he was pretty entertaining last night. I liked his whole "I have nothing to lose" attitude in the beginning. It was also devilish of him to steal Tana from the other team, leaving Kendra and Craig to duke it out. But he didn't take any risks during the actual task. In fact, he was pretty useless. He should have just come up with a good marketing plan, instead of waiting for Tana to talk to him about. I think he was just hoping she would crash and burn so the Donald would fire her, but that was highly unlikely. Alex has lost so many challenges, he's just lucky he lasted this long.
Now I'm really torn about who's going to win. I have a really bad feeling that it might be Craig, even though I think he would be an absolutely horrible boss, especially if he's managing women, for whom he seems to have no respect. I have a thing or two to tell him if I go to the finale party again this year! Kendra has good ideas and she's an okay leader, but the whole war with Craig has really dragged her down. As someone mentioned last week, she doesn't really respond to him the right way. She just gets all pouty and makes that dumb face. I don't think she's mature enough to run one of the Donald's companies.
Tana really made herself look dinky last night. The Donald doesn't want some artsy-craftsy rhinestone fanatic running a major construction project. But I still think Tana's the best candidate. She just has to tone down the BeDazzler stuff a bit. And I don't think she's as nice as Carolyn and the Donald seem to think. She seems like a good person, but she's a strong leader and doesn't have a problem putting people in their place.
I'm starting to think this is a pretty sexist show. I could tell last night that the Donald was laying the groundwork for Tana to be fired. Maybe I was in denial before. Am I being overly sensitive? Next week's interviews should be really interesting. I think Tana can prevail if she acts a bit more serious--but not too serious. After all, part of her charm is her fun personality. I'd love to see Craig get a female interviewer. Let's see if he talks down to her! I guess we'll find out next week.
April 28, 2005
SBA Expo, Day 3: And, We're Clear!
Posted by Stephanie Clifford at 3:55 PM
I was shadowing Donnice Thode, who distributes materials for the construction industry, as she pitched Dell, Hewlett-Packard, and other big buyers on her company here at the SBA Expo. Donnice is from Houston, and everything about her shouts Texas, from the shoulderpads on her jacket, to her carefully curled and blown-out hair, to her gushy phrases ("We're just as tickled as could be," she told one buyer upon meeting him).
Belying that Southern warmth, though, Donnice is a tough saleswoman. Give her 15 minutes with a buyer, and she’ll walk away with a lead. Thode Masonry Supply & Tool is tiny, and it's barely established in the space she's selling these guys on, which is packaging material for products (like the cut-to-fit foam that HP ships its hardware in). No matter. When the DC office of a homebuilding firm told her she wasn’t the right fit geographically, she replied that she could do work outside of Texas, and asked for an in-state contact who she could call. When a foodservice cataloger indicated Thode didn't carry supplies he'd need, she pointed to Thode's janitorial supplies, packing materials, and private-label goods, got a copy of the catalog, and said she'd follow up with suggestions where Thode would fit. When HP said it already used her competitor for its foam packaging, Donnice remarked that she was certified as 8(a), as a HUBZone business, and as a woman-owned firm—and wouldn’t HP like to satisfy its supplier-diversity requirements by using her? "When you leave here, they're going to send you information—but you have to do your end to sell it," she said. "You just have to try it and see."
Donnice's approach isn't revolutionary, and her work here isn't glamorous or sophisticated. It's the grunt work of getting a business off the ground. Watching her work, and watching the hundreds of other small-business owners here pitch, network, sell, and study, I was impressed by how hard they work to build their businesses. They seem to believe that working for yourself, and being successful at it, is the ultimate in achievement.
Cue the violins. I'd better leave DC before I start writing haikus about entrepreneurs and cavorting among the cherry blossoms. Over and out.
SBA Tips on Financing and Globalization
Posted by Stephanie Clifford at 10:52 AM
On Wednesday, I attended SBA Expo sessions on financing and globalization. Some surprising numbers: There are now 225,000 businesses exporting, and SMEs make up 97% of those. Over 96% of the world's consumers live outside the U.S. And the SBA is expecting to underwrite about 100,000 loans under its 7a program this year. Other highlights:
- What are lenders looking for when you approach them for a loan? Good credit scores (above 680 is solid, said one panelist); a good business plan (mission statement, market study, demographic study, distribution channels, the company's hires and partnerships, and financials); management experience in the industry where you're looking to borrow; a down payment of 10-30 % of the project costs; and collateral, the more the better.
- If you're applying for an SBA loan, don't worry about what type (7a, Express, PLP etc.) you're offered. That's the lender's call. You should scrutinize the lenders, though. Get a list of SBA lenders through your local SBA office.
- Several giant global companies set aside lots of their contracting to small or minority-owned businesses. So far this year, Kellogg Brown & Root, the Halliburton subsidiary and Iraq and Afghanistan contractor, has gotten 57% of its procurements from small businesses.
- Meanwhile, several websites and government organizations can help businesses begin exporting. The Inter-American Development Bank (www.iadb.org) lists public-sector Latin American projects that need suppliers. The Small Business Exporters Association (www.sbea.org) can introduce small businesses to contacts in the federal government, or help them cut through red tape. Why bother? Over 96 % of the world's consumers live outside the U.S.--quite a market.
- Chris Padilla from the U.S. Trade Representative's office laid out the administration's priorities for global trade. They include lowering tariffs, simplifying customs, making procurement accessible, intellectual property rights for American companies (i.e. fighting "Made in China" knockoffs), and e-commerce.
April 27, 2005
Bush Addresses SBA Expo on Energy Policy
Posted by Stephanie Clifford at 3:21 PM
Seemingly unphased from his morning in a bunker, President George W. Bush strode onstage at the SBA Expo on Wednesday to promote his energy policy and praise small businesses. "I appreciate that our small businesses take risks and pursue dreams, as a result, creating jobs," Bush said. He was a hit among the small-business-owner audience, who greeted him with a standing ovation, whoops, cheers, and the flashing of camera phones all over the ballroom here at the DC Hilton.
Bush has just wrapped up his social security tour, and left that issue untouched today: his focus this afternoon was on energy. "A major problem facing the country...is our nation's growing dependence on foreign sources of energy," he told the crowd. "Technology is this nation's ticket to greater independence."
To back up that argument, Bush offered a number of ways he wants to fix the nation's energy policy. Those include applying technology to glean more production from existing resources, specifically, nuclear plants. The President also noted that America hasn't ordered a new nuclear plant since the 1970s, and "a secure energy future for America must include more nuclear power." Second on his list was beefing up U.S. oil refineries; new oil refineries, he mused, coud be built on closed military facilities, for example.
He then pushed opening the Artic National Wildlife Refuge to what he called "environmentally responsible exploration"; creating a pipeline to funnel Alaskan natural gas to the U.S.; looking into alternate sources of energy, including hydrogen, ethanol, and biodiesel, and 'clean' sources of power like wind (he noted he'd asked Congress for $1.9 billion over 10 years to research renewable energy sources such as wind); and creating a modern electricity grid.
International cooperation, Bush said, will be key. He touched on how China and India need to work on clean sources of energy to sustain their booming economies, which is something he said he'll discuss at July's G8 summit. He also discussed "working with likeminded countries to develop nuclear technologies that are safe, clean, and avoid proliferation."
Bush closed with a strong endorsement of his energy bill, and that--along with the rest of his speech--drew claps from all over the room. "We should have put this in place several decades ago. We haven't had a national energy policy in place for some time," the President said. "Now's the time to put that strategy in place."
Continue reading "Bush Addresses SBA Expo on Energy Policy"
April 26, 2005
Books
The Merits of Madness
Posted by Carole Matthews at 3:03 PM
Join the discussion! Read Inc.'s May 2005 "Book Club" column by Reporter Darren Dahl here, post your comments about the book, and e-mail questions you have for the authors. Send them to Darren Dahl at ddahl@inc.com, using the subject line, May Book Club. We'll send the best ones to the authors for answering, and then post a complete Q&A on Fresh Inc.
Everyone knows entrepreneurs are a little crazy, and a new book claims it's both genetic and very American. In The Hypomanic Edge: The Link Between (a Little) Craziness and (a Lot of) Success in America, author John D. Gartner claims that the personality traits that define entrepreneurial overachievers, like exceptional energy reserves, gut-instinct decision making, and an affinity for taking risks, are symptoms of hypomania, a psychiatric cousin of bipolar disorder. Gartner suggests the U.S. leads in churning out entrepreneurs because this is a nation of immigrants, another group high in hypomanic risk-takers. He uses case studies of historic visionaries like Alexander Hamilton and Andrew Carnegie to support his contention that hypomanics have long been threatening to change the world.--Darren Dahl
The SBA Expo, Day One
Posted by Stephanie Clifford at 11:11 AM
It's morning in DC, and the Washington Hilton is overflowing with small-business owners here for the SBA Expo '05. Hector Barreto, in an early AM conversation with Inc., had quite a bit to say about the future of small business.
First, Barreto says the budget he proposed is looking good. "I'm pretty confident we'll get pretty close to what we asked for," he said, noting the budget is with Appropriations now; when it's finalized, he said, is "everybody's guess--we're constantly in budget mode."
I asked him about the cuts to the microloan program, which small-business committee chair Olympia Snowe, among other Congressional delegates, has been a vocal champion of. The argument goes that microloans help out fledgling businesses, while 7a loans, Barreto's preferred vehicle, are bigger, and so only help those who are already established. "The reason for that is we only did 2,300 microloans, so under $35,000 [per], in the U.S. last year," Barreto said. "Something like 700 microlenders do it better and cheaper." He also noted that 7a covered around 24,000 loans of that size, so having a separate program for the microloans didn't make sense to him.
Why, then, is Snowe so opposed? "Olympia's a champion for a lot of things," Barreto said, "and in some states, the microloan entity does a really good job. But we don't see that kind of consistency across the board." Still, Snowe's objections have gained some ground in Congress, and Appropriations could mandate that the microloan program be saved. "We feel that we shouldn't be in that program, but if Appropriations decides differently, we will abide by that, and have a microloan program as we did this year," Barreto says.
Earlier, in a breakfast meeting with about 20 small-business owners, Barreto highlighted a few useful facts about the SBA.
- The national ombudsman is a guy named Mike Barrera, and if companies are having trouble with anything--getting federal contracts, getting security clearance, red tape--send comments his way.
- In the coming months, SBA administrator Allegra McCullough will be touring the country to get comments about SBA size rules in 11 hearings. If you want to weigh in, you can send a testimonial to her or attend one of the meetings.
- Business matchmaking is taking place here at the DC Hilton today. It matches small businesses with buyers at companies such as American Airlines, HP, AstraZeneca, and others; the small businesses have 15 minutes to pitch the big guys on their products and services. The SBA is now doing a pilot 'virtual' matchmaking program, which will use the Internet to connect buyers and sellers.
- And, in case you weren't aware of it, you can now access all of those red-tape forms through a single site.
Before signing off, let me give props to Hector Barreto's style. At 8 AM, he's in a charcoal suit, sky-blue oxford (with a monogram at the cuff, no less), and a gold tie. Most impressively, his black hair stands about an inch high--without any visible use of product. Bravo.
April 22, 2005
Diary of a Start-up
Diary of a Startup: On the Road
Posted by at 2:35 PM
It's Thursday morning April 21st and we are on the rampage to raise $250,000 to $500,000 in order to keep the business going. At the tail end of last week we received our first letter of interest to acquire stock in the company from a wealthy Chicago entrepreneur. He sent over a laundry list of things for us to complete so that he could do the appropriate due diligence and make a quick decision on whether or not to invest in our business. He had a meeting with his advisors yesterday to discuss all of the information that we aggregated for him and to assess whether ours was the most appropriate investment for him. We expect to hear something more from him today or tomorrow. I am cautiously optimistic because I know that these interested parties often find that reasons not to invest trump the reasons to invest in a small private company, due to the inherent risk.
In addition to that single investor, we have been on a road show this week and presented to about six different parties, mostly angel investors. We seek to steer clear of the venture capital market because we don't want to lose too much control of the business. None of us have ever participated in a capital raise, so we are trying to learn as we go. Getting too much advice from our attorney would result in astronomical legal bills that we cannot afford at the present time. As entrepreneurs, we have learned that its always a balancing act, and right now we are attempting to do everything from servicing our clients to learning about how to engage in a capital raise to assessing who the "right" investors/partners are for Acquirent. I can honestly say that this fundraising thing is a full-time job and I would warn any other entrepreneurs that you should prepare to spend the majority of your weeks focusing on this versus the business itself. Taking your eyes off the existing business can be dangerous though!
We are also facing one more problem, but again this is a problem that can be resolved by successfully raising funds for the company. On the 15th of each month, we usually pay commissions to our salespeople and we still have not received a large commission payment from one of our clients. Since our business is centered around employing salespeople, and salespeople want their commissions when they sell something, it puts us in a little bit of a bind! As such, I fronted some commissions to two salespeople despite our ongoing cash flow issues. This hurt, but I felt that in the long run that this was the right thing to do because without our sales people we would really cease to exist.
The next step is for us to solidify our funding and then decide how to best allocate the cash. We are really working hard to get this money in and even if we have to knock on a few hundred doors to get the money, we are going to do it because we have worked too hard and built too much to simply let it all evaporate. Hopefully we'll be back with some good news next week!
Diary of a Startup is a weekly blog written by Pete Kadens, founder of Acquirent, an outsourced sales execution company based in Chicago. Click here to read last week's column.
The Apprentice
The Apprentice - Week 13
Posted by Nadine Heintz at 2:18 PM
I can't stand Craig. And it really annoys me that Tana keeps her mouth shut during his arguments with Kendra. He was totally out of line last night. I realize she and Craig have some kind of "street smarts" alliance, but come on.
Craig had nothing to do with his team's victory last night. Anyone could have played the disorganized desk jockey during the presentation. During the important part, the market research, he wandered off to play with office furniture. Then he had the nerve to treat Kendra like an idiot, when she and Tana came up with the winning idea in the first place!
Obviously, Alex and Bren blew it by not meeting with the Staples team. Alex said they were just the judges, not the customers, which doesn't make any sense. Weren't the products being designed for Staples, after all? Duh. And it amazes me that they didn't think to do market research with customers at a Staples store. Geez. They really blew it. If they had met with the Staples execs, they would have figured out that the store was interested in a simple idea, like the padlock with a combination based on numbers rather than words.
Instead, they went crazy designing a big piece of furniture to supposedly cut down on clutter. I don't know what kind of offices they've been working in, but my cubicle would be pretty crowded if I wheeled that thing in. And the fact that the drawers didn't slide out was totally absurd. What a disaster.
So it's all come down to Tana and Craig (street smarts) versus Kendra and Alex (book smarts). I'm guessing that Alex will be the next to go. The only reason he didn't get the boot last night is that he argued more skillfully than Bren. The Donald seemed particularly impressed by the fact that Alex had studied in Israel. I felt kind of bad for Bren. But it seemed like he had enough of the Apprentice. He said as much in the cab ride confession.
I'm looking forward to the final showdown. I still think Tana has the best chance to win. Kendra has potential, but she needs to grow up. Enough with the pouty face! If it comes down to Craig and Tana on the final task, he'll never be able to hack it. He's been riding on her coattails for a while now. If he wins, I'll be really disappointed. I guess we'll find out soon enough!
Never Be Closing
Posted by at 2:10 PM
Glengarry Glen Ross is to beleaguered salespeople as A Confederacy of Dunces is to angry, sweaty, hot dog vendors, Naked Lunch is to heroin-addicted writers and A Fan's Notes is to alcoholic football aficionados -- that is to say, it shows how the sausage is made and that ain't always pretty. Sales executives recently shared their thoughts in the May 2005 issue of Inc. on what the David Mamet masterpiece means to them -- definitely a cult favorite for those in the know. "It's artistically significant and evokes a lot of emotion illustrating such a clear link between motivation and outcome," says John Oesch, "if people are rewarded for only eating what they kill then they will game the system as much as they can." Oesch, a professor at the University of Toronto's Rotman School of Management, uses clips from the 1992 movie in his emotionally intelligent leadership course to show modern managers that there are better ways to build sustainable, dedicated, ownership within a company than threats and manipulation.
But that's not what audiences pay $100 a ticket to see. They want bloodletting, flop sweat and tears (of both joy and sorrow preferably). They want drama. As Glengarry Glen Ross returns to Broadway on May 1st, Patrick J. Sauer spoke with the stars of the production at the Royale Theater. Here are a grab bag of their thoughts about salesmen, swampland, and selling a lie.
As they say in the theater, "Never Be Closing."
Click below for interviews with the cast of "Glengarry Glen Ross," opening on Broadway May 1, 2005.
Alan Alda as Shelley "The Machine" Levene
Frederick Weller as John Williamson
April 21, 2005
A Franchise is a Franchise is a Franchise
Posted by Don Boroian at 1:47 PM
Franchising is more than chains like McDonald's. Sometimes, it's an expansion strategy, a license, a partnership, or a joint venture.
Let's play a word association game. When I say "franchise," you think ___________.
Many of you are saying "McDonald's." Certainly, McDonald's is the model for franchising's success in America. When you hear the word "franchise", many of you think of restaurants, and while it is true that the food service industry makes up a large portion of the franchise marketplace, franchising has made its way into nearly every sector of the economy. As a business model, franchising has extended into over 70 different industries. Currently, according to a recent PriceWaterhouseCoopers's study on the impact of franchising, franchising accounts for 14% of private sector employment in the United States. Why then is franchising so confusing when it accounts for such a large part of the U.S. economy?
At several points during my career as a franchise consultant and also helping businesses explore expansion, I have had entrepreneurs come to me looking to find a way not to franchise by calling their expansion strategy something else, a license, a partnership, or a joint venture. For these entrepreneurs, it is often just a misunderstanding of what franchising is that leads to the confusion. They see it perhaps as being a negative, and feel that franchising is only for certain kinds of businesses. Sometimes, the requirements of being a franchisor appear from the outside to be too cumbersome. In reality, it is usually easier legally to be a franchisor than to latch onto a business opportunity where each state would require different legal documents. I often have to tell these business owners that the fact of the matter is that, if three specific conditions exist, it doesn't matter what you call it; it's a franchise.
Continue reading "A Franchise is a Franchise is a Franchise"
'The Wal-Mart Tax'
Posted by at 10:20 AM
In between sips of coffee and bites of Cinnamon Life, the foundation was laid for Wal-Mart to make me a complete hypocrite. I came across an advertisement in the New York Times, on page A17, equipped with the headline: "How Much Does Wal-Mart Cost American Taxpayers Every Year?" emblazoned across the top. My attention was headlocked -- not an easy task.
On a normal day this would merely be a slight speed bump on my way to page A18, but today I took a sip of coffee, got comfortable on my wooden barstool, and read the entire ad. I continued on to the number; "$1,557,616,500.00," posted on one of those annoying Wal-Mart "Roll Back" signs with the clever phrase "It's Time to Rollback Wal-Mart" declared immediately below it. This gargantuan number was identified as "The Wal-Mart Tax," and this lurid text followed:
"Year after year, Wal-Mart's low pay and meager employee benefits force tens of thousands of employees to resort to Medicaid, food stamps and housing assistance. Call it the Wal-Mart Tax."
This really pissed me off. What about Merv? Merv was the sweet old man who sat in the front of my Wal-Mart store and said: "Hi, welcome to Wal-Mart," to every person that walked in the store. He was always so happy; he'd grab your cart for you and tip the brim of his hat to your lady friend as he said "Hi."
I was convinced that Wal-Mart was screwing Merv. Here they were, the largest corporation in the world, with $10 billion in profits last year, and they were pulling one over on Merv. "Someone should pay for this," I said to myself. Nobody screws Merv and gets away with it.
Continue reading "'The Wal-Mart Tax'"
Inner City 100
San Fran Company Makes Inner City 100
Posted by Carole Matthews at 9:25 AM
The entire 2005 Inner City 100 list will be announced tonight at the 7th Annual Inner City Awards dinner being held Boston. But before the big announcement, Inc.com shares one last honoree from this year's list.
Today's Inner City 100 company...
BankServ
San Francisco
Revenue: $10.1 million
Employees: 57
Dave Kvederis's company manages the secure electronic transfer of money for banks and other commercial clients. Since BankServ expanded last year by acquiring two London companies, it has added 258 new customers in 51 countries, including Nigeria, Russia, and Brazil. BankServ's multilingual staff helps it to compete; the company recently landed clients in China, thanks in large part to the fact that several employees are fluent in Mandarin and Cantonese.
April 20, 2005
Christmas Decoration Company Makes Inner City 100 List
Posted by Carole Matthews at 12:13 PM
With the announcement of the entire list just a day away, Inc.com shares one more honoree from this year's Inner City 100 list.
Today's Inner City 100 company...
American Christmas Decorations
New York City
Revenue: $4.3 million
Employees: 91
If you've been to New York City during the holidays, you've probably seen Fred Schwam's handiwork. Each Christmas season, Schwam’s South Bronx company decks out Radio City Music Hall, Macy's, and dozens of Midtown skyscrapers with everything from Christmas trees to giant nutcracker dolls. Rather than diversify into, say, Fourth of July decorations, Schwam continues to expand his Christmas business. Last year, he began selling predesigned do-it-yourself holiday kits to national retailers such as Banana Republic and Nine West. One place Schwam doesn't decorate for Christmas is his own house--he's Jewish.
April 19, 2005
General Miasma
Posted by at 6:25 PM
What's good for General Motors may no longer be good for the USA. Hell, it might not even be good for Liechtenstein. Recently, a media brouhaha broke out between GM and the Los Angeles Times, specifically Pulitzer Prize winning automotive writer Dan Neil. It seems GM took a major exception to his review of the Pontiac G6 , known to you and I as the car that made a bunch of woman weep with orgasmic tongues on Oprah. Neil finds the G6 "entirely adequate," but thinks that adequate isn't good enough for a giant corporation stuck in neutral. And perhaps sliding into reverse if today's quarterly $1.1 billion loss is any indication. It's the worst posting since 1992, when GM flirted with bankruptcy. In his column, Neil called for heads to roll, specifically CEO Rick Wagoner, comparing him to the coach of a losing baseball team and saying, "it's time to sweep the dugout."
So how did GM respond? By yanking its advertising from the Los Angeles Times.
Let us consider this business decision for a moment. Dan Neil is a critic -- paid to criticize -- and a very good one to boot. There had never been a Pulitzer nomination for automotive writing prior to Neil, and he deservedly won for his unique look beyond what's under the hood to the role of the car in American culture. (He once penned a legendary column about "test-driving" the backseat of a Ford Expedition that expedited his departure from the Raleigh News & Observer.) The point being, Neil is a popular, high-profile journalist who passes judgments, both bad and good (and who makes the Corvette again?). This is a PR battle GM couldn't possibly win.
I haven't driven the G6 yet, so I can't comment on the car, but I can comment on the boneheaded play by a floundering corporation. With all of its other problems, why would GM choose to bring the scorn of auto enthusiasts upon itself? Even if Neil ripped GM at every turn it wouldn't be worth it, but he doesn't as evidenced by the Corvette review, so the charter member of the Big Three just comes across as petulant and petty. Why take an unnecessary loss in the court of public opinion? Let the cars -- not corporate spokesflacks -- speak for the company.
Or am I wrong here? Maybe GM should go quid pro quo with Neil if it truly believes he has crossed the line. Now, I've met Neil, I've even seen him in a kilt, but this is not simply standing up for my own kind. GM's decision to go into battle with a respected writer makes no sense to me. (Although perhaps the iconic auto manufacturer should be nervous, Neil wandered around Scotland with a claymore foaming at the mouth muttering about "cutting GM off at its knees.")
Bad press can be just that, bad press. Dan Neil's rant won't do a skosh of the public damage that pulling ad dollars will. Besides, what does GM have to worry about? Oprah herself gave away the Pontiac G6, so it must be a huge smash best-seller right...um, right...uh oh...
That's it! No more Pontiacs on Oprah!
April 18, 2005
Sales and Marketing
Befriending the "Competition"
Posted by Keith Ferrazzi at 4:21 PM
Since I've had some extra time on my hands, I finally got around to reading Alison Stein Wellner's piece in Inc.'s March issue: "Let's Be Friends: It seems nuts. But new research says that CEOs who become pals with their rivals do better than those who don't."
I'm so glad to see that the research is showing what many of us know to be true in practice -- that we all succeed better together. No reason that can't apply to entrepreneurs, CEOs, even competitors! In the past, I always got to know my competition when I was in key posts. Deloitte CMO, Starwood CMO... There were multiple reasons for doing so. One, more focus on getting your own stuff right is needed than on beating the other guy in order to succeed. Two, you never know where you or they will end up over the long term. Sure I appreciate a healthy rivalry, but again, that does not mean you cannot be friends around such a rivalry. (In the "Let's Be Friends" article, there's a great line -- "It's better to have your butt whipped by a friend than an enemy. At least that way you're more likely to find out why.") And three, of course, you can actually learn a lot from each other as well.
Now, as founder of a sales & marketing consulting firm and a training/speaking business, I think about competition in two ways. I don't have any competition. By the same token, everyone is my competition. The point is that any company can choose to go it alone without outside support relative to sales and marketing, or they could decide to use one of the big guys or another specialist group like ourselves. What I worry about is not if my "competition" is going to be a success, but if my business is shaping up as I would like. Our growth rate has been extraordinary so far, and I need to assure that our processes and talent keeps pace.
Let's look at each line of FerrazziGreenlight business. First, on the consulting side, I reach out to CEOs of other consulting firms that I aspire to be like to get guidance all the time. I hope to meet the leaders of Monitor Consulting, as I hope someday to have as large and thriving a practice as they have built. I am meeting with Michael Porter -- this week actually -- because I greatly admire him and want to know how he founded that firm.
I meet with other training and development houses and even refer business to them when we are at capacity. In the meantime, I learn so much and never feel that shadow of paranoia. I am paranoid, but not paranoid that someone else will be successful, too -- just paranoid that I might miss something that will allow me to grow our business into the thriving institution that I want it to be over the years. I speak to folks like Tim Sanders. We recently traded tips on launching books because he just released his latest, The Likeablity Factor. I talk with Michael Hammer and Jason Jennings and the list goes on and on. Even others who have written networking books, like Diane Darling, or those who are writing networking books, like Jeff Meshel. I am even editing his manuscript. How much more friendly can you get?
Inner City 100
The Countdown Continues
Posted by Carole Matthews at 12:44 PM
This demolition contractor is just one of the 100 fastest-growing urban businesses that will be honored this week at the annual Inner City 100 event, to be held on April 21 in Boston.
Today's Inner City 100 company...
HMB Contractors
Milwaukee
Revenue: $3.5 million
Employees: 36
A mentorship program with an established contractor helped CEO Heidi Brandt--who taught grade-school earth science for 11 years before founding her business--break into the male-dominated demolition industry. Now she's branching out. Brandt recently set up a plant where she plans to recycle material from demolition sites, including concrete, grass, and kitchen cabinets. "I don't believe in sending everything to the landfill," she says.
April 17, 2005
Real Estate Firm Makes Inner City 100 List
Posted by Carole Matthews at 8:28 AM
The announcement of the Inner City 100 is just a few days away. Which companies made this year's list of America's fastest-growing urban businesses? Through April 21, Inc.com features a new honoree each day.
Today's Inner City 100 company...
MetroPro Realty
Chicago
Revenue: $2.3 million
Employees: 42
Donna Jackson and Margie Smigel established their reputation in Chicago real estate by working with developers on the city's poor South Side. These days, the partners handle listings all over the city-from multimillion-dollar mansions to $200,000 lofts. They handle every aspect of selling a property, including appraisals, "staging" an apartment for an open house, and financing; in some cases they even offer to cover up-front expenses for sellers. Last year, they created their own radio show, a kind of Car Talk for homeowners.
April 15, 2005
Diary of a Start-up
Diary of a Startup: Acquirent
Posted by at 3:38 PM
It's 4:15am on Friday the 15th and the average day in the life of an entrepreneur at Acquirent has begun: For the past eighteen months, we have worked endless days attempting to build a worthy company. It has been a struggle every step of the way, but we knew that would be the case when we started the company.
Acquirent first launched in late 2003 and was completely bootstrapped by the savings of two individuals: me and my former partner. Acquirent is a company that exists to serve a significant purpose (at least we feel this way): We work with lower to middle market companies to produce more sales at a lower cost. We are an outsourced sales execution business and our clients hire us to deploy and manage dedicated sales professionals that work on their behalf to close business with either their end users, or in some case their channel partners.
We started out of an apartment with two guys and one tiny client. As each month progressed, we learned the business and began to move upstream with our client base. Today our client base includes several large companies and we have built a name for ourselves to a certain extent.
But it hasn't been easy. Over the last eighteen months, we have endured the dissolution of a partnership because my partner and I shared different visions on the future of the company; one rounds of layoffs; and several more emotional ups and downs. The good news is that we have endured and persevered to this point. We run a profitable business, but our business is hampered by cash flow issues. Since Acquirent does not process any payments for our clients, we often become the third (sometimes last) party to get paid and that can translate in to a "Days Sales Outstanding" figure of as much as 150 days.
So today we lie at a significant crossroads in the future of Acquirent. On paper we are profitable, but due to our cash flow woes we need capital to sustain the business as a going concern. We have companies all over the world that have expressed interest in working with us (over 300 companies), but we do not have the financial stability or capital infrastructure to engage in a partnership with them at this juncture. An infusion of cash would allow us to hire more quality people (including a chief operating officer); help us purchase better technology to better service our clients; and most importantly, it will help us meet payroll and pay our vendors on time even when our cash flow is struggling.
We also have a team of visionaries who truly believe that we can build a powerful entity with our model. The hurdle is that we are undercapitalized. We are now embarking on our journey to raise $250,000 to $500,000 in a first round of financing. If we do not find this money in the next six weeks we will be in serious danger of failing due to poor cash flow. Wish us luck!
The Apprentice
The Apprentice - Week 12
Posted by Nadine Heintz at 10:00 AM
Now I'm really convinced that Chris needs professional help. Last week, he was arrested for freaking out at a casino after being asked to pay a $20 cover charge. Then, last night, he cried in the boardroom. He's on emotional overload all the time. But being "angry man" wasn't his problem in this week's episode. He just stunk.
Up until this point, everyone, including the Donald, seemed to think that if Chris could control his temper, he'd be great. But he wasn't. Net Worth's brochure was totally amateurish. It looked more like an instruction manual than a promotional brochure. The pictures were terrible. There was no concept. And Chris's presentation was even worse than Angie's flop last week! I almost fell off the couch when he called the Solstice the "Solster Roadster." The car executives looked disgusted.
Of course, all the blame can't be laid on Chris. Alex blew the interior photos when he neglected to get close-ups of the logo and the tires. I couldn't really get a feel for Bren's writing, but I'm not that surprised that it was dull. No offense to lawyers, but I've read some legal briefs and they're not exactly scintillating!
As for Net Worth, I'm pretty disgusted with all three team members. Sure, Kendra produced a great brochure. After all her bravado, she's lucky she came through with a great product. Part of me empathized with her plight. She wanted to pull an all-nighter, and Craig and Tana were whining like tired babies. That may be partly Kendra's fault. If she was a more charismatic leader, maybe she could have inspired them to press on. But something tells me that Craig and Tana were up to something. They might have figured that Chris was no match for Kendra in this challenge. So why not leave all the work to her, and ride her coattails to victory? I thought Tana was a better person than that, but this show doesn't tend to attract the purest souls.
Nevertheless, Kendra's behavior was babyish. When Craig said there was no concept for the brochure, Kendra didn't explain it again. She just got exasperated. That's not a good sign. Despite the great job she did on the brochure, I doubt she has what it take's to head one of the Donald's companies.
I felt bad for Bren in the boardroom. He seems like a nice person, but his performance has been mediocre, especially compared to Tana's. Still, the deck was stacked against him last night. He tried his best, and stayed up all night. He just didn't have the right writing style. Alex is more of a slacker. He peaked during the grafitti mural episode. It's been downhill since then. There's no way he'll make it to the final two.
One thing I still don't get is why the Donald has so much sympathy for Chris. I'll admit that it was sweet when he told Chris to come over for a goodbye handshake after firing him. But I don't think Chris is a very nice person, especially after the whole casino incident. Let's just say I'm glad I don't work with him.
Well, my money's still on Tana, despite her slacker behavior last night. It'll be nice to see a woman win for once. If any of the lame guys win, I'll be really annoyed with Mr. T.
April 14, 2005
Imposing Structure Amid Rapid Growth
Posted by Nicole Gull at 5:25 PM
Of course we're consistently happy to chat with business owners and for the most part, they are anxious to share some stories with us. Today the Inc. staff had lunch with Shoba Purushothaman, CEO of New York City based company, The NewsMarket. Shoba, whom we’ve written about in the past, was quite clear in discussing her company's most recent headache (albeit a good headache to have): The company has grown so much in the past few years, and in order to maintain that growth, she and her management team need to infuse a formal structure into the company to keep things running smoothly.
It seems a total hassle to revamp a culture that's worked since a start-up's inception. How do you suddenly tell your first employees they’ll now be evaluated every few months, or that they'll be required to attend training every year, or even that they'll have to adhere to a slew of brand new HR policies? It may be a bit awkward at first, but hierarchy and order are necessary evils as a company finds its way from start-up to high-growth mode.
For Shoba's part, she's said her company has taken to the change quite well. After hiring a seasoned manager as The NewsMarket's COO, Shoba has managed to rally her employees to partake in training on time management, weekly priority meetings and periodic evaluations. "I think they love it because they feel like the company is growing up," Shoba says. Next, the company is planning what it calls its World Summit, a weekend for employees from each of the company's offices in the UK, India, Asia and Europe to meet for a weekend in New York.
It would be interesting to hear how some other fast-growing companies are juggling the constraints of growth and a need for a little internal spring-cleaning. Are there any counter-intuitive approaches to making the most of a rather difficult and often painful transition?
Fort Lauderdale Company Makes Inner City 100 List
Posted by Carole Matthews at 3:54 PM
Which companies made this year's list of America's fastest-growing urban businesses? Through April 21, Inc.com features a new honoree each day.
Today's Inner City 100 Company...
A.M.E.'s Uniforms
Fort Lauderdale, Fla.
2003 Revenue: $3.1 million
Employees: 12
Mark Forst's company sells postal uniforms that must adhere to U.S. Postal Service design specifications, so there's not much room for creativity. But he manages to differentiate his uniforms in other ways. Incorporating feedback from postal workers, A.M.E.'s pants feature double pockets strong enough to hold large key rings, and triple-stitched crotches that are less likely to rip as carriers get in and out of mail trucks.
Yesterday's honoree: Traf-Tex
April 13, 2005
Business Out of Africa
Posted by Nicole Gull at 5:33 PM
I'd imagine most Americans have grown up with the image of Africa as a place in need of tremendous aid - snapshots of children with distended bellies in fruit fly infested villages. No food. No infrastructure - and certainly no thriving business world. But, last night, I witnessed a very different image of Africa. In this Africa, I saw and heard stories of business owners - just like those who likely read this site - building and growing businesses throughout their continent: A children's clothing manufacturer in Nigeria, a bank in Ghana, a flower exporter in Kenya, and an international airline in Somalia. And those are just a handful. Who knew?
Apparently, Carol Pineau. She produced "Africa: Open for Business," a documentary film funded by the World Bank premiering in the U.S. and Canada this week. The Africa-America Institute hosted a screening last night here in New York. In the film, Pineau, an American journalist, profiled 10 business owners in Somalia, Congo, Botswana, Uganda, Zambia, Lesotho, Kenya, Dakar, Ghana, and Nigeria. While the rest of the world has turned its attention to Asia and India for examples of emerging economies, it turns out there are quite a few things American business owners could gain from their African counterparts, too.
Each business profiled in the film has its challenges, but each also has experienced tremendous growth. For instance, Vodacom, a cellular phone company in Kinshasa, Congo, grew to nearly one million users in three years' time. The company's founder and chairman, Alieu Conteh, has said his company claims 49 percent of the African cellular market - and counting. Daallo Airlines, a company in Somalia, was born shortly after the Somali government collapsed. At first, the company offered a few short flights within Africa. It now serves customers traveling to Paris and London and competes with four other carriers in the market.
Pineau is quick to assert this growth is not uncharacteristic - nor without attention from the investment community. The Corporate Council on Africa reports that foreign direct investment inflows to Africa increased from $12 billion in 2002 to $15 billion in 2003.
While these companies grow, they seem to be taking pretty good care of their employees and communities while they are at it. According to Pineau, a good number of these small business employers offer free lunches, on-site healthcare, and access to vitamin supplements for HIV treatment. Clearly, there is no such thing as the perfect business climate (if there were, we'd be out of business). And the film's entrepreneurs were quite clear about the problems they face: High costs on importing equipment from abroad; frequent lapses in electricity; a lack of resources and fuzzy government regulations, and the like. But it seems Pineau is onto something. Africa may in fact be open for business - and not just for Africans.
April 12, 2005
Recruiting and Hiring
Weird and Wacky Interview Answers
Posted by Carole Matthews at 3:23 PM
Human resource professionals get them all of the time. The prospective employee who answers a question with something so off the wall that it either entices the interviewer to learn more about the person sitting in front of them, or, more frequently, causes the interviewer to show the candidate the door.
That's the topic of a recent article by Kathy Gurchiek, an associate editor at HR News. The article, "Interview answers keep getting weirder, wackier," cites some comments HR professionals offered on the Society for Resource Management's HR Talk Bulletin Board.
Here are a just a few of the crazy answers Gurchiek features in her piece:
- A woman was asked where she saw herself in five years. Her response, as Gurchiek notes: " 'I only plan to be here until I get my gospel singing career off the ground," before bursting into song because she said, 'God wanted her to sing for us,' recalled a SHRM member."
- When another SHRM member asked a candidate how she juggled tasks, the candidate's response was, "When I get too busy, I just sloooooow down."
- "I was homecoming queen my senior year of high school," was the response one 30-something interviewee gave a SHRM member when she was asked to cite a major accomplishment.
And there are dozens more SHRM members offered on the bulletin board that weren't mentioned in the article.
Have you ever received a crazy answer to one of your interview questions? Let us know by sharing them here.
Inner City 100
Countdown to the Inner City 100
Posted by Carole Matthews at 11:53 AM
For the seventh year, Inc. and the Initiative for a Competive Inner City (ICIC) have teamed up to recognize America's fastest growing urban businesses through the annual Inner City 100 list. Inc.com counts down to the announcement of this year's honorees on April 21 with a profile a day of one of this year's winning companies.
Today's Inner City 100 Company...
Traf-Tex
Houston
2003 Revenue: $7.8 million
Employees: 40
Mario Reyna knows how to stop traffic. Reyna, a 43-year-old electrical engineer, estimates that he has installed 10% of all the traffic signals in Houston. Traf-Tex also sells and services surveillance cameras for highways and electronic road signs. Last year Reyna moved his company to a new 8,000-square-foot building near William P. Hobby Airport.
April 8, 2005
The Apprentice
The Apprentice - Week 11
Posted by Nadine Heintz at 2:43 PM
Wow! Angie really blew it last night. What a choker. I've always liked her on a personal level, but there's no disputing that she was a six-time loser. Tana, on the other hand, did a great job once again. She put the kabash on Craig and Kendra's bickering before it got out of hand, and she even kept her cool when the guys came back from the silk screener with shoddy merchandise. As a leader, she's both likeable and authorotative, which is a tough combination to pull off.
Even though the challenge was yet another shill for corporate America, it was pretty interesting. Obviously, it was wise of Tana and Kendra to survey teens before coming up with design ideas. That helped them figure out that cell phones are the number one gadget for teens, which seemed to really matter to the store execs. That was huge.
Angie's team, on the other hand, totally missed the mark by focusing on iPods and laptops. Sure, iPods are popular, but I don't know one teen who doesn't have a cell phone. And what was up with that laptop sweatshirt? It reminded me of this crazy coat/backpack that I wore in the third grade. I thought it was pretty cool at the time, but now I wouldn't be caught dead with a big hump on my back. That idea was ridiculous, especially compared to Tana's cute little cell phone holsters. Net Worth's branding was way off, too. Why would they call their line Beach Tech? Who the heck brings a laptop to the beach? There was a big disconnect there. The Wearable Tech name was much better, with a broader appeal.
Angie's biggest mistake was taking on too much. When she got a gander at that whiteboard, she should have delegated some of her tasks to Alex and Chris. Maybe she's a micromanager and figured she could do a better job. Instead, she wound up having a breakdown and completely blowing the presentation. That was totally unbelievable. I felt bad for her, but she deserved to be fired after that. Yes, Chris screwed up big time by losing the credit card, but it was definitely Angie's fault that her team lost.
Angie seemed pretty shocked that she was fired instead of Chris. Something tells me he'll be the next to go. He's terrible, even when he's not chewing tobacco and swearing. After last night, I'm reevaluating my forecast. I used to think Kendra had a chance against Tana, but now I'm not so sure. I think it's going to be Tana all the way. I guess we'll find out soon enough!
Succeeding and Starting Over Again
Posted by Lora Kolodny at 1:13 PM
Many entrepreneurs have launched juggernaut companies, only to hand over the reigns and come back to the drawing board with a smaller and sweeter startup (to grow again into a juggernaut -- see Inc. 500 serial entrepreneurs).
For example, remember the late '90s toy trend, The Furby? The creator of that little emo-tronic plush owl, Roger Shiffman, recently announced that he was getting back in the ailing toy industry with a startup called Zizzle. Also, one of Inc.'s Most Fascinating Entrepreneurs, Trip Hawkins, CEO of mobile game maker Digital Chocolate, left his first tour de force Electronic Arts, and came back to the field of video games not once, but twice.
These entrepreneurs' paths (shared by countless others, as well) begs the question: Is it possible to run a successful, profitable company without growing it to the point where, eventually, you need to hand over the reigns? What businesses have succeeded without changing leadership? How have they – or you – gotten into that position?
Arthur Rubinfeld, a former executive vice president at Starbucks responsible for growing the business from 100 to 4,000 stores, weighs in on this and other growth-related topics in his new book, out today from Wharton School Publishing,