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How much information is too much on the Web? What kind of information sharing is smart? And what is unprofessional? A month ago, I sat on a panel at Inc.'s Grow Your Company conference in Orlando, along with T3 founder Gay Gaddis, who puts together digital-marketing campaigns for large companies, and Dr. Christos Cotsakos, founder of Pennington Ventures and the former CEO of E-Trade. Both Cotsakos and Gaddis agreed that business owners should encourage their employees to go online and interact, on behalf of the overall enterprise, with colleagues, partners, and even customers. But Gaddis also offered a cautionary tale. Not long ago, Gaddis told the audience, one of her employees came to her and said, "I've been friended on Facebook by one of our clients. What should I do?"

Continue reading "What's Professional When It Comes to Social Media?"

"Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 6.1 percent in the first quarter of 2009," according to a press release from the Bureau of
Economic Analysis. A 6.3 percent drop was recorded in the final quarter of 2008.

"It was the third straight quarter of declines and capped the worst six months of economic activity since the late 1950’s," the New York Times reports.

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

Gather a bunch of smart small business owners in a hotel ballroom and you are bound to emerge with a list of clever management ideas to try back at your office. And so it was at Inc.’s 2009 Growing Your Company Conference (affectionately referred to as GrowCo in these parts), held in Orlando, Florida, on March 18, 19, and 20. Among the best practices I learned:

• Hiring advice, Part 1. Fred Kessler of Sales Partnerships Inc. in Westminster, Colorado, has a rigorous screening process for new hires and prefers headhunting rather than screening resumes that come in unsolicited. Still, Kessler encourages his staff to follow-up with every applicant, and here’s why: he likes to see whom his applicants will list as references. Then, Sales Partnerships goes after those people. The idea is that the average job seeker may or may not be good, but the people they choose to provide as a reference are very likely to be articulate, dependable, and knowledgeable. In effect, job seekers themselves become pre-screeners for headhunting targets.

• Hiring advice, Part 2. Apple’s Steve Jobs actually looks for job candidates who have strong drawing skills. So says Tom Wujec, a speaker and author who argues that the ability to express information and ideas through sketches and doodles is fundamental to the process of innovation.

• Hiring advice, Part 3. Lots of bosses give small presents to retiring employees. Jack Mitchell gives small presents—flowers, a nice note—to people he has just hired, no matter how junior they are. Mitchell, the CEO of a retail company that owns three stores including the flagship Mitchell’s of Westport, Connecticut, says that the loyalty you engender when you warmly welcome a new employee into your company is well worth the nominal expense.

• Sign every check that goes out the door. Jack Mitchell also recommended this practice, as a way for an entrepreneur to keep in close contact with overhead costs and discretionary spending. (Mitchell’s homespun wisdom led one attendee to exclaim, “Some people believe in God. I believe in Jack Mitchell!”)

• How to fire workers. Terminating an employee is an aspect of being the boss that most entrepreneurs struggle with. Jeff Davis of Legal Art Works in Jacksonville, Florida, has come up with a mental trick to help him through the act of firing a worker. He pictures his kids. Davis figures that the stress he incurs in managing a poor-performing worker has to have a deleterious effect on his health and, over time, the stress level would shorten his lifespan. Since he wants to live as long as possible to spend as much time with his kids as possible, Davis believes that firing a worker who causes him stress is actually a gift he’s giving his kids. “I've shared that bit of advice with other CEOs that I know and they have come back to me saying that it really helped them reduce a ton of anxiety over making a decision,” Davis said. ”It prevented them from stretching it out over more time and causing more of their hair to turn grey.”

• Why now is a great time to kill products or services. Doug Tatum, the founder of Tatum CFO Partners in Atlanta says that now is the perfect time to look around your business and identify a few low-margin activities—products, value-added services, etc.—to discontinue. Customers understand that businesses are streamlining operations in an effort to shore up their balance sheets, so they will be more understanding of changes. And if you can switch them to some sort of lower-cost offering, they may even be grateful that you are changing the terms of your deal with them. Meanwhile, you can use this time to make strategic choices with less pushback from your customers than you might otherwise experience.

• Check your bank’s CAMELS rating. Every bank is judged on 6 factors (capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk) and assigned a rating of 1 through 5, with 1 being a strong rating and 5 suggesting weakness. Jack Stack of SRC Holding Co. suggested that entrepreneurs find out their bank’s CAMELS rating and only look to work with banks that have a 1 or 2 rating. The top banks, in his experience, tend to give their customers the fairest terms.

• The hidden value of social media. As more companies dabble with marketing on sites such as Facebook, MySpace, and Twitter, the question arises: Is this useful activity or a waste of time? Dr. Christos Cotsakos, the former chairman of E*Trade and the founder of Pennington Ventures, believes it’s essential—and actually has a hidden productivity-boosting component. He argues that employees don’t work 100 percent of the time they are in the office to begin with. But once they become addicted to social media, they will often check websites during their off-hours to see how online projects are progressing. Cotsakos said that, by tapping into what he calls an employee’s “discretionary productivity,” a company can get more bang for its marketing buck.

• Abide by the 48-hour rule. As GrowCo emcee Norm Brodsky put it, once you hear a good idea, you have to make a change within your company within 48 hours… otherwise, the idea is likely to fall through the cracks. The clock is officially ticking.

Will this downturn prove to be harsher than the last one in 2001? And if so, how? A news report out of Massachusetts raises one possibility: a spike in the crime rate. "As more people lose their jobs and savings to the swooning economy, police officers across the state are grappling with sharp rises in burglaries, larcenies, and car break-ins, which many of them believe are tied to the financial gloom," the Boston Globe reports.

"The connection between crime and the economy has always come with caveats," the newspaper continues. "Although most police officials and criminologists agree that a recession usually leads to a rise in property crimes, many say that every crime is triggered by a variety of societal and personal pressures that cannot be explained by any single factor."

The overall crime has been on the decline for the better part of the past 20 years--a period of strong and sustained economic growth. Companies have not used the low-crime rate as an excuse to neglect issues such as workplace security and loss prevention, and technology has made certain aspects of crime prevention much easier to manage. Still, a whole generation of business owners has come on the scene in a period of low crime, meaning they didn't have the same costs or distractions as, say, a company that did business in the 1970s or 1980s, when crime was more prevalent. A sudden rise in crime could, in theory at least, present these unprepared business owners an added obstacle to recovery.

Of course, the Globe isn't proving or predicting a crime wave; the article simply cites a few worrying statistics from police departments in Lawrence and Lowell, Massachusetts, and raises questions. What are you seeing in your business? Have you experienced an uptick in crime--be it employee theft or simple vandalism--in your area?

Some colleagues and I were just in a meeting with Bob LaPointe, the funder and president of a company called Trendline Communications, based in Marblehead, Massachusetts. It was an "old-home week" situation: Bob worked at Inc. for many years, running its circulation department, then a division that took Inc. into new businesses such as events and custom publishing. In the late 1990s, Bob ran Inc.com. Bob mentioned that Inc.'s founder, the late Bernie Goldhirsh, originally gave him the assignment of creating new lines of business but with little or no upfront investment. If Bob was unable to make a business profitable in his first year, Bernie would shut it down. "He absolutely hated failure," Bob recalled. "And he believed there was an inverse relationship between the amount of capital available and the level of creativity." At a time when many, many businesses find the level of available capital to be nil, Bernie's philosophy of business offers some small cause for optimism.

With the economy prone to wild fluctuations these days, it is more difficult than ever to forecast accurately and to know whether a down month should be viewed as awful or merely disappointing. To help entrepreneurs with benchmarking, Inc. and Sageworks have compiled detailed financial data on privately held companies in more than a dozen industries. To see how your business compares, check out the Profitability Report, which was updated this week with fresh data.

It's rare that a logo breaks through into the popular consciousness a la Nike's swoosh or Starbucks's mermaid. Graphic designer Sol Sender produced just such a mainstream hit this year for an unlikely client: Barack Obama. Sender's 'O' design, combining a rising sun image set against a red, white, and blue landscape, managed to be clever and patriotic at the same time. Steven Heller of the New York Times recently spoke with Sender.

"We never saw the candidate as being 'branded,' in the sense of having an identity superficially imposed on the campaign," Sender said. "The identity was for the campaign, not just for the candidate."

To read the rest of the interview, click here.

Y Combinator's Paul Graham makes the case that now is a perfectly fine time to start a company—maybe not a restaurant, he says, but certainly anything in high tech. Graham writes: "If we've learned one thing from funding so many startups, it's that they succeed or fail based on the qualities of the founders. The economy has some effect, certainly, but as a predictor of success it's rounding error compared to the founders."

Continue reading "Don't Worry, Start a Company"

Online auction giant eBay has acquired Bill Me Later, the Maryland-based payment credit company that ranked No. 64 on this year's Inc. 500. The deal price was reported to be $945 million, including $820 million in cash and $125 million in stock. EBay's intention is to merge Bill Me Later, a site that lets online retailers offer instant credit to customers, into its PayPal unit. Separately, eBay announced that it was laying off 1,000 workers.

Over at GigaOm, Stacey Higginbotham speculates that "the folks over at Amazon.com aren’t likely to welcome eBay as Bill Me Later’s new corporate overlords." Amazon owns a chunk of Bill Me Later (or did) and was one of the service's top customers, along with Apple and Newegg. But Amazon has eschewed PayPal in part because it is owned by eBay, which Amazon views as its top competitor. Will it now discontinue Bill Me Later as a payment option?

“Currently, Bill Me Later is still available as a payment option on our site, but I can’t speculate as to whether we’ll continue to offer them going forward,” Amazon said in a statement.

Among the comments to GigaOm's post on the subject was this analysis courtesy of Bobby M: "Me thinks eBay threw money towards competitive grwoth, rather than acquiring yet another payment service. Lets face it, there is nothing unique about BML. However, it now cuts into Amazon’s payment options for its customers. So was this a strategically correct move - yes. Was it worth the price - No."

What do you think? Is Bill Me Later (at 2007 sales of $86 million) worth 10 times revenue? Was this a smart buy for eBay? If so, why? And if you were Amazon, would you continue to offer Bill Me Later, or phase it out?