The proper balance of skills and personalities can turn an average idea into a successful one.
A strong management team can create success out of even average ideas. So what types of people do these teams consist of? According to Bill Gross, founder of the legendary startup engine, Idealab, the best groups have a blend of four personality types, people with complementary skills. These four are:
- entrepreneur (E), who has the vision.
- producer (P). who “makes things happen, who actually takes a product, executes on it, sells it -; all the execution stages, to get it in customers’ hands.”
- administrator (A), the person is who is part bureaucrat, part troubleshooter, part organizer, someone who “puts systems in place and helps the trains run on time and keeps the wheels on the bus when things are going crazy.”
- and integrator (I), a “people person” who understands the other three types and helps “those three talents get along, because very often those other three talents hate each other’s guts.”
In Gross’s experience, most people are dominant in one of these four areas.That’s not to say that your dominant area is your only strength; to be certain, there are administrators who are also skilled integrators, for instance. But like it or not -; and in the same way you had your best subject in school or your best sport as an athlete -; you have a dominant personality type.
And it’s either E, P, A, or I. “I’m clearly an entrepreneur,” says Gross in the video below. “I really love inventing the new thing, seeing things in the distance, and trying to do things ahead of their time.”
The ideal mix
According to Gross, the perfect balance varies, depending on what stage the company is in. Startups, naturally, need more entrepreneurial energy than anything else. Later-stage companies require a bit more producer types. Mature companies, becoming more bureaucratic almost by definition, certainly need greater doses of “A” types. At the largest companies, having an “integrator” is crucial, as the number of conflicts expand exponentially as the number of staff members grow.
Which type are you?
Gross proposes what you might call a “window” test: Imagine you’re in a room, staring out a window, and the window has some dirt on it.
The E looks at the window and says, “Look over there. There’s a parking lot. We could build a building.” He doesn’t really see the actual window; he sees what’s through the window.
The P says: “We better clean that window.”
The A says: “We could make a form. And people could fill it out when they see something wrong. They’ll turn it in, and those forms will go in a queue. And then we’ll get it taken care of.”
The I says: “I wonder what the E, P, and A are thinking.”
Of the EPAI mix, Gross says, “I even think this is more important than having a decent [business] idea…this team working together can take a not-so-decent idea and turn it into a decent idea….I wish I had learned it earlier in my career. I could have made some things that weren’t successful successful.”
The car-hailing app company's latest marketing move involves a massive partnership with Home Depot to deliver $135 fir trees on demand. That's big. But not why you think.
Uber may not be able to bring your daughter a pony this Christmas, but it is getting into the holiday spirit. The company plans to bring Christmas trees to the masses--at least to the masses who live within 10 major U.S. cities and who are willing to shell out $135 Thursday for a 7-foot-tall fir tree and a tree stand.
The company, most known for its car-hailing app, innovative in-app payment system, and insanely fast growth, is partnering for the tree delivery with Home Depot. It makes sense: Home Depot sells more Christmas trees than any other retailer.
You could view it as just another Uber publicity stunt (the company calls them "surprise-and-delight campaigns"). Previous stunts include letting Uber users order up kittens on demand for cuddle time (a comparatively meager $20), or, instead of ordering a car, hailing an ice cream truck, stocked with cones to share with friends ($25 for six cones). But I think the tree delivery is better seen as a creative experiment into the broader realm of urban logistics.
On social media #UberTree is sparking the most interest from an oh-cool-I-don't-have-to-heave-an-enormous-prickly-tree-down-the-street perspective. But step back, and it's truly most curious as a brand partnership. Sure, Uber partnered with the Humane Society and Cheezburger Network for the cat day, but this is on a different level. And it's a level at which we should get used to seeing Uber operate.
"These are all aligning our brand with complimentary brands," said Andrew Noyes, Uber's San Francisco spokesman. "I think you'll see many new innovative business partnerships in the future."
And that'll be the very near future. Uber this month is partnering with not only Home Depot, but also Banana Republic, Benefit Cosmetics, and Piperlime. I've heard that behind the big branding push is Uber's big September hire--senior vice president of business Emil Michael, who formerly served as Klout's COO.
Michael has had a diverse and interesting career; he's worked in the White House, at Goldman Sachs, and currently both invests in and advises startups. He's also apparently a brand-whisperer.
This season's retail partnerships are fairly straightforward: They mostly entail the retail companies giving customers in particular cities discounts off their first Uber rides, or handing out Uber gift cards. Piperlime, Benefit, and Uber will be cross-promoting the partnerships on social media, and will be sending dedicated emails to their sizeable distribution lists, too.
But back to the trees. This particular campaign didn't come from new VP Michael exclusively. Instead, Noyes tells me, it was the brainchild of Keith Radford, a rising star at Uber who's currently the general manager for Atlanta.
Noyes couldn't predict numbers of anticipated tree-deliveries for Thursday, but a Home Depot spokeswoman told the Chicago Tribune that she didn’t expect the day to significantly affect the company's tree sales, which are in the millions every year.
And don't expect Uber to be shuffling around 7-to-8-foot-tall fir trees wedged into the back of its glossy SUVs. Home Depot is providing the truck transport for Thursday's nine hours of tree delivery. An Uber rep will be riding along to answer customer questions and hand out a special gift--which, I'm told, is a black, "cozy--very cozy"--scarf embroidered with the Uber logo.
Home Depot may be just the beginning of the brand-partnership binge for Uber. But there are a few slightly-less-commercial promotions it's running this holiday season, too. In Seattle, Uber's got another partnership coming up: an on-demand Santa photo shoot. And in at least 10 cities, the Uber Sleigh concept is back. Still no pony delivery. Not yet at least.
Those company Christmas parties are minefields of tempting treats. Here's how to indulge without regrets.
The holidays can be a very stressful time for anyone, but when you run your own company and are struggling with balancing the demands of your work with your responsibilities at home, it can be especially difficult. Holiday season can stretch you thin and stress you out. Then there are all those holiday parties. Even if you are a disciplined and well-intentioned eater, the holidays can be hazardous time for your waistline.
But there some things you can do to keep yourself trim, happy, and energized this season. Here are some tips to get you through all of those holiday parties without packing on extra pounds:
1. Don’t skip breakfast. People sometimes skip meals, especially breakfast, when they know they're going to be eating larger than normal meals at night, and this happens a lot during holiday season. They figure if they are going to load up on calories at night, then they should reduce calories in the morning so they don't gain weight. This is a huge misconception.
Skipping breakfast actually contributes to overeating later in the day. Your body is programmed to need a certain amount of energy in the form of calories, so when you skimp on one end, it is going to physiologically prompt you to eat more and make up for what was omitted earlier. Plus, skipping breakfast can lead to low blood sugar, making it hard for you to control what and how much you eat when you finally do eat, leading to over consumption. Your best breakfast bet is protein. Try eggs with vegetables, like a spinach omelet with tomatoes. Another good option, although not particularly high in protein, is oatmeal with nuts, fruit, and cinnamon. The nuts and the fruit will help you feel full longer.
2. Eat a snack before you go. Holiday parties can be a smorgasbord of typically forbidden food. Unless you have a steel will, holiday parties can sidetrack your best intentions. People tell themselves, “Well, it is a special occasion, so I guess I can just start again tomorrow.” To minimize this problem, eat a healthy snack before you go to a party. Nuts are a good choice because they contain fat, which triggers the satiety center of the brain, leading to a quick feeling of satisfaction. Pre-party snacking will help you feel less hungry when faced with all that tempting food. And if you do indulge, you'll feel fuller faster.
3. Keep alcohol consumption to a minimum. This doesn’t mean don’t drink, but be mindful of quantity. Alcohol contains empty calories. One five-ounce glass of wine is 150 calories. So, if you have two glasses, there is 300 calories. Plus, when people drink, they tend to eat more. Studies estimate that people consume an additional 350 calories just from extra food when they drink alcohol while eating. And that's not including the calories from alcohol.
4. Load up on crudités--and skip the cheese. There's usually a vegetable platter at these functions. And right next to it, competing with it, is the more appealing tray of cheese and crackers. It's tough to resist cheese, but a single ounce has as much as 100 calories. If you're not careful, in the course of an evening, you could have seven or eight slices. That's about 700 to 800 calories before dinner--and that's not including the crackers! You're better off filling up on vegetables (and a little bit of dip for flavor).
5. Socialize while you eat. Once you have filled your plate with your appetizers, walk around and socialize. Try to move away from the buffet table so as not to give in to mindless eating. This is a good opportunity to network. Additionally, if you chat while snacking you will eat more slowly. And slowing down helps send the signal to your brain that you are full--before you have done too much damage.
Take these suggestions, and you'll have a healthier, happier holiday season!
Making the leap isn't easy. Here's how to manage by report and not by sight.
Lately, it seems like a golden age for startups. Apple bought Topsy, a social search engine. SnapChat turned down a multi-billion dollar deal. And Spotify is seeing explosive growth. Here in Chicago, GrubHub and Trunk Club are just two more of examples of startups with lots of potential.
The leaders of those companies are likely wondering how to maintain their entrepreneurial spirit as the organization grows--something many startup founders face when they want to take their businesses to the next level.
When I was working out of a borrowed office space with the other co-founders of a small online payroll service 13 years ago, we made decisions quickly and changed course without hesitation. But as the leader of a much larger organization--today, SurePayroll employs more than 200 people--my approach has evolved.
The founder of a startup is personally driving action, working with customers, hiring employees, and sometimes even handling HR and payroll. It’s an intense juggling act, and one that gives you a lot of control.
But to make the transition from founder to leader, you can’t manage by sight anymore. You have to trust others to lead and give up control.
In the old days, if we didn't like something, we shouted across the room. But now there's a process. I speak with the manager, get their assessment, then have them go to their team. I don’t just walk into meetings.
Running a larger organization requires consistency, too. In some cases, you may let some things slide. Not every report will do what you'd do. But this doesn't mean you can't have a personal touch. It's just about knowing how to motivate without doing everything yourself.
Speaking of a personal touch, I can’t wish every employee happy birthday, but I do write handwritten notes. And while I can’t personally congratulate each employee on a job well done, I send a company-wide email recognizing those who excelled.
When your organization grows, you’re not just running it. You’re representing it. You’re no longer directly providing the service, you’re the one who's delivering the message, be it to clients, investors, partners or the media.
Put another way, I used to work through lunch. But these days, I take people to lunch.
This week, fast-food workers are expected to walk out of their jobs en masse. Here's what their wage war means for small businesses across the U.S.
One of the worst positions you can be in as a business owner is having to hold firm on costs, especially where employees are concerned. Many franchise owners in big cities across the U.S. now find themselves in this unenviable spot.
Since last November, when more than 200 fast-food workers engaged in a one-day strike at roughly 20 restaurants in New York City, some owners have experienced similar walkouts and others have followed the events anxiously. Yet another strike this Thursday--this time involving workers in 100 cities and coordinated protests in 100 additional cities--is expected to be the biggest yet.
Fast-food workers are teaming up with labor groups, including the Service Employees International Union, and retail workers at companies like Walmart to ask employers for a "fair wage" of $15 an hour, up from the federal minimum wage of $7.25. That represents a $15,000 annual raise for a fulltime worker.
"Workers are going on strike tomorrow because [many of them] are making at or close to the minimum wage, and it's not enough to survive on in a city like Chicago, where they are getting hit by rising costs for everything from housing to transportation to food," says Deivid Rojas, a spokesman for Fight for 15, a group that's organizing workers in Chicago. "A lot of them have families to sustain, and the minimum wage--or what they call the 'poverty wage'--isn't enough."
These efforts, which are part of a national push to raise wages and unionize low-income earners, are splashy and getting plenty of newspaper ink. But it's unclear whether they could actually pass muster.
Without new legislation enforcing an enhanced minimum wage, franchises would need to implement the policies on their own. And many of those franchises are owned by franchisees, or individual business owners, not giant franchisors (a.k.a. the McDonald's and Wendy's of the world). Of the 36 percent of U.S. restaurants that identify themselves as franchises, 75 percent are owned by franchisees and only 25 percent are owned by corporations, according to the International Franchise Association (IFA), a trade group.
The workers' requests are unlikely to be met for a variety of reasons. Few would disagree that workers ought to be able to feed their kids without having to rely on government assistance. But broaching the subject now--at a time when price competition has only intensified in the fast-food industry and many businesses still struggle after the recession--may be ill advised.
What's more, the wage hike itself would be significant--a more than 100% boost for many workers. Though you could argue that inflation has eroded the value of employees' wages over the last few decades, on the face of it, ponying up substantially more in overhead costs would be a bitter pill for any company to swallow--let alone one run by an individual franchise owner.
If wages are allowed to rise, wave sayonara to the dollar menu, as costs would skyrocket and jobs would disappear, business groups say. "What the unions and their allies fail to realize is that raising the minimum wage will only hurt those it is intended to help," says Matthew Haller, a spokesman for the IFA. "Increasing the cost of labor in the current economy would lead to higher prices for consumers, lower foot traffic and sales for franchise owners, and, ultimately, lost entry-level jobs."
Scott DeFife, executive vice president of policy and government affairs at the National Restaurant Association, a trade group, echoed that sentiment: "Business owners already face great uncertainty due to a lack of a clear economic plan from Washington and the health care law’s implementation. Calls to double the minimum wage only intensify the challenges faced by job creators."
Higher wages might also push the fast-food industry to replace workers with automated systems. Just as retailers, including CVS and Lowes, have introduced self-service kiosks in recent years, it's likely that fast-food employers facing added overhead costs would institute similar measures. Transactions that take place at self-service kiosks in North America are already expected to launch past $1 trillion per year through the devices by 2014, according to a September report from Franklin, Tenn.-based researcher IHL Group.
Still, many economists argue that higher wages will not hurt businesses. There has been much research pointing to the benefits of a wage hike to $10.10 an hour, a policy that Congress is now toying with adopting. In his column this week, New York Times columnist and Nobel laureate Paul Krugman cites an Economic Policy Institute study estimating that a roughly $3 hourly wage hike would directly benefit 30 million workers. The theory goes, a higher wage minimum would aid workers making less than $10.10 an hour and also push up the wages of workers who currently make more than that. Those workers would then potentially up their spending on everything from health care and education to possibly even buying more meals out. Studies have shown that low-wage earners receiving a windfall are less likely to save than their higher-earning counterparts.
In the end, the effect of higher wages could wind up a wash, but that result might take years to come about. "We are in uncharted territory," says Mark Price, a labor economist at the Keystone Research Center, a policy think tank in Harrisburg, Pennsylvania. "If fast-food employers started going in this direction, I would expect to see a lot of innovation as these employers seek out the mix of business practices necessary to be profitable at higher wages."
VC Fred Wilson explains why the White House is right to support Rep. Robert Goodlatte's patent reform bill--and what else the bill needs to protect start-ups.
Yesterday the White House came out in favor of Rep. Robert Goodlatte's patent bill. This is a good thing.
The Goodlatte bill doesn't have everything in it that we would like to see in a bill aimed at reducing the pain that patent trolls inflict on the innovation economy, but it is a good start and I think it can get improved in conference with the Senate.
One thing that was taken out of the Goodlatte bill that we would like to see put back in is the broadening of the covered business method patent review process to include all business method patents.
In the five plus years that we have been working to educate government officials about the blight that patent trolls have wreaked on the start-up sector, I have seen a huge shift. We have gone from elected officials being ignorant about this issue, to being aware of it, to now being as outraged as we are about the troll issue. That's a good thing and the result, I think, will be better laws and better processes to out bad patents and bad actors in the system. This is long overdue but welcome nonetheless.
This article originally appeared on Fred Wilson's blog, A VC.
Crossing the Employer Threshold: Determinants of Firms Hiring Their First Employee, a report by Robert W. Fairlie, analyzes the factors that lead new businesses without employees to hire their first employee; this is a significant aspect of small business job creation.
The Swedish startup didn't do itself any favors by disclosing what it pays for streamed music.
In her memoir, I Feel Bad About My Neck, the inimitable Nora Ephron likens the thought of death to "considering the alternative." Sure, your skin is sagging and your bones are about to break, but hey. Consider the alternative.
In a post published Tuesday putting its own business practices under the microscope, music streaming service Spotify sent musicians a similar message. "At least you’re earning a penny for each song you write," the authors seemed to suggest. "Would you get that from piracy or iTunes?"
The answer is probably not, but neither musicians nor venture capitalists are impressed at this point. The fact of the matter, says David Pakman, a VC and the former CEO of eMusic, is that there’s been "a pretty dismal track record of investors betting on digital music companies." Pakman called Spotify’s recent $4 billion funding announcement a "flat round," or sign that the company’s growth had stagnated.
In terms of investment dollars, the category is small and venture capitalists are far less interested in companies like Spotify than they are about unsexy but lucrative business-to-business start-ups, for example. "It’s a sector that the majority of investors avoid," says Pakman of the streaming music business.
In opening up the kimono, Spotify made itself look worse in the eyes of artists-slash-royalty advocates like Radiohead frontman Thom Yorke by revealing it only pays between $0.006 and $0.0084 per song to rights holders. At the same time, it underscored that its business model--in which it pays 70 percent of its revenue to rights holders--still isn’t working.
On one hand, Spotify claims the aim of its model is to "regenerate" lost value to the music business by "converting music fans from poorly monetized formats to our paid streaming format, which produces far more value per listener." Whereas the average music listener only spends $55 per year, argues Spotify, premium subscribers in the U.S. spend $120 per year.
But with 24 million users globally, Spotify doesn’t quite stack up against heavyweights like YouTube, which has some 1 billion users, and Apple’s iTunes, which has almost 600 million users. And getting its current users to pay more for its content will be hard to pull off. In fact, in order for it to grow, says Pakman, "Spotify needs to charge far less than $10 per month," especially in developing markets like Maylasia, Mexico, China, and Signapore.
Meanwhile for artists, the company's launch of a webpage called Spotify Artists Tuesday--though easy on the eyes and generally helpful in terms of orienting artists to the service--likely did little to allay concerns over compensation.
In fact, it feels a little too late. Although it's heartening to see Spotify trying to improve its relationships with artists after founder Daniel Ek expressed disappointment with their dismissal of the service, many will find it hard to get behind the story that they're being paid fractions of a penny every time their song's played.
By joining forces with the maker of Quickbooks, the small-business resource site wants to help entrepreneurs "do something transformative."
Financial software maker Intuit announced Wednesday morning that it has agreed to acquire small-business resource site Docstoc.
Docstoc CEO Jason Nazar co-founded the company with CTO Alon Schwartz in 2007 with the idea of creating a one-stop shop for all the documents an entrepreneur might need to start a business. The company offers online courses on building businesses, templates for legal documents and contracts, resources for obtaining business licenses, and product recommendations. He says the acquisition will help Docstoc reach more entrepreneurs and create even better products for them.
"There are 28 million small businesses in the country. We want to help them do something transformative," Nazar told Inc. "Intuit has such a great brand and will help us do that."
Nazar says Docstoc has been profitable for about three years but did not disclose revenue. The company makes money through advertising, subscriptions to its services, and sales of its tools. A news release about the deal said Docstoc's website attracts 16 million unique visitors a month.
The terms of the deal were not disclosed. To date, Docstoc has raised $4 million in funding from VC firm Rustic Canyon and other investors.
Docstoc's 50 employees will remain in Santa Monica and Nazar will continue to lead operations.
In 2012, Docstoc launched a sister site, License123, to help business owners navigate the sometimes thorny process of obtaining city-specific licenses. The idea was born out of an internal pitching competition among employees.
To hear more about Docstoc's start-up story, check out this live chat with Nazar from 2010.
The entrepreneur's Revolution Fund has invested a large sum in the Washington D.C.-based salad chain, Sweetgreen.
Sweetgreen just got some green--courtesy of Steve Case’s Revolution Fund.
The fund, started by Case and two former AOL colleagues, announced its $22 million investment in the Washington D.C.-based salad chain startup on Wednesday. Case said he thinks the startup has a lot of potential to become a popular restaurant chain, as reported by the New York Times.
“I do think there will be a Chipotle equivalent in the healthy dining category. I think Sweetgreen is well positioned to be that iconic brand in this next wave,” Case told the outlet.
Case will join the startup’s board and act as an advisor to the founders. There are currently 22 Sweetgreen locations scattered across the east coast. The outlet reported that the company plans to use the new capital to open more locations. New York, Boston and Philadelphia are amongst the next cities Sweetgreen plans to infiltrate.
Nicolas Jammet, Jonathan Neman and Nathaniel Ru--all Gerorgetown University graduates--started the company back in 2007, with a focus on local produce, sustainability and healthy living. The team has incorporated creative marketing, advertising and customer engagement tactics in the past--it even launched its own food and music festival, Sweetlife Festival back in 2010.
The photo-sharing app is getting some adult supervision. Now the question is whether the former Facebook and Instagram exec can turn Snapchat into a big business.
Snapchat is growing up.
The white hot Los Angeles-based start-up has just landed former Facebook and Instagram executive, Emily White, as its chief operating officer, according to The Wall Street Journal. It's a major show of faith for the two-year-old start-up that allows people to send each other photos and videos that automatically disappear in a matter of seconds. Lately, Snapchat has become, arguably for good reason, the poster child for modern tech start-up hubris. Snapchat's founders, Evan Spiegel and Bobby Murphy, have been derided for reportedly turning down Facebook's $3 billion acquisition offer and raising gobs of money without having a revenue strategy in place. White (who some are already comparing to Facebook's COO Sheryl Sandberg), could change all that.
Before joining Snapchat, 35-year-old White led efforts to bring ads to Instagram, which was also a pre-revenue company when Facebook acquired it in 2012 year for just under $1 billion. In an interview with the Journal, White said the move was a no brainer.
"It happened really quickly, but to have an actual COO role in one of many companies that is disrupting the communications arena is one I could not pass up," she said. "I think that Evan has been looking for someone who can help him grow and scale what is already something that has changed a lot of the way people think about the mobile experience."
To be sure, the hire suggests that Snapchat CEO Spiegel plans to make good on his promise to forego easy exits and turn Snapchat into a big, standalone company. Having cut her teeth in online sales at Google and then at Facebook, White stands to strengthen Snapchat's potential for building its own advertising model. Of course, that doesn't mean it will be an easy task. As Instagram's ad model has proven, users don't take to having their newsfeeds infiltrated by brands easily
As White admitted to the Journal,
"I am about to learn a lot about the way communication is happening right now and am excited to help grow [Snapchat] into a big business."
If you want young talent to fit in, don't treat them like a bunch of freshies.
Hiring and training young talent presents an inherent challenge. Companies need to both bear with fresh employees as they get used to the working world while still making them feel like they're a crucial part of the team.
One strategy for dealing with this challenge comes courtesy of the National Hockey League's Boston Bruins: Tear down the rhetorical walls that separate your younger and more experienced employees.. Captain Zdeno Chara has banned the use of the word "rookie" in the team's locker room, the Boston Globe reports.
For reasons that trace back some 20 years to his junior hockey days in Slovakia, Chara believes the word has no place in the hockey workplace. ... In the Bruins' locker room, newcomers are respectfully called "first-year players" or "younger guys" or "newer guys."
While younger players still need to work their way up the leadership ladder, Chara says he strives to make them feel like they're a welcome part of the team--not part of some strange subset within it--before they even lace up their skates.
So, how to shift this idea off the ice into the office? From a semantics perspective, it's easy enough. Take demeaning terms like "junior" out of titles. And if you have a reverse mentoring program, consider eliminating the term "reverse." Mentoring is mentoring.
But it's not just about semantics. The ban on "rookie" is just the literal representation of a Bruins locker room culture that fosters respect for its youngest players and emphasizes that they're part of the team like everybody else. From the Globe:
"I had a couple of bad experiences," the earnest, 6-foot-9-inch defenseman said of [his early career], where, he recalled, rookies often were forced to perform demeaning chores or rituals. "And I said, 'You know, if I ever am in a position to control that, I would totally change it, because it’s not fair.'"
It's worked for the Bruins, after all. Boston, which advanced to the Stanley Cup Finals last season and won the Cup in 2011, is in first place in the league's Eastern Conference this season, and three of its top-10 scorers are first- or second-year players.
Here's a look at the new wearable devices on the market--and those coming in 2014.
A wave of companies, many of them start-ups, is creating wearable electronic tracking devices for nearly every part of the human body, from brainwave-monitoring headbands to smart socks. Retail revenue from wearable technology is predicted to reach $19 billion by 2018, according to a new study from Juniper Research. Here's a look at the products already on the market as well as a few of the items launching in the next year.
Sigmo's language translator clips to a lapel and translates speech into 25 languages ($64, early 2014, buysigmo.com).
The Nike Fuelband SE tracks exercise intensity against a preprogrammed goal ($149, nike.com).
InteraXon's Muse measures brainwaves and lets users control games with their minds ($269, interaxon.ca).
Bodymedia's Wireless LINK armband tracks physical activity, calories burned, and sleep quality ($119, bodymedia.com).
Fitbit's Force measures physical activity and sleep quality. It also functions as a smartwatch, delivering phone notifications ($130, fitbit.com).
GoPro's Hero3 records video and can be mounted on a helmet or a user's chest. It's also waterproof ($400, gopro.com).
Google's Glass takes photos, records video, and searches the Web (no price yet, 2014, google.com).
Emotiv's Insight tracks brainwaves and lets users control games telepathically ($229, spring 2014, emotivinsight.com).
Misfit's Shine monitors activity--and can fit into a necklace or a bracelet or clip onto a shirt ($120, misfitwearables.com).
Narrative's life-logging camera snaps two geotagged photos every minute ($279, spring 2014, getnarrative.com).
Under Armour's Armour39 chest strap keeps tabs on heart rate, respiration, and calories burned. Plus, it wicks away sweat ($150, underarmour.com).
Lark Technologies' Larklife tracks exercise, calories, and sleep quality. Plus, it gently vibrates to wake users up ($150, lark.com).
Jawbone's Up tracks sleep, activity, and calories. It sends an "idle alert" for too much time spent on the couch ($130, jawbone.com).
Recon Instruments's Jet is like Google Glass for athletes. It has a camera and tracks and displays a user's speed ($599, spring 2014, reconinstruments.com).
The Nike iPod sensor fits into Nike sneakers to track a runner's pace ($19, nike.com).
Withings's Pulse clips to a lapel to track a user's heart rate and physical activity ($100, withings.com).
Pebble's Smartwatch displays texts, emails, and calls ($150, getpebble.com).
Heapsylon's Sensoria Smart Socks use textile sensors and a Bluetooth anklet (shown) to track speed and cadence ($149, spring 2014, sensoriafitness.com).
LumoBack's posture belt vibrates when users start to slouch. It also tracks activity and sleep ($150, lumoback.com).
Samsung's Galaxy Gear notifies users of incoming calls and emails. Also includes a speakerphone, voice recognition, and a built-in camera ($299, samsung.com).
OMsignal's smart shirt contains textile-based sensors that track heart rate, breathing, and activity (no price or release date yet, omsignal.com
Kapture's Klip records audio constantly. Users press a button to save the previous 60 seconds of conversation ($75, spring 2014, kaptureaudio.com).
Three ways to quickly turn tactics into action.
As the replacement for a company founder, Chad Dickerson had to win the trust of his team. Here he talks about translating tactics into action.
Be Transparent About Change
“Nine months in as CTO, I’d made about 15 personnel changes on a team of 20. People were demanding answers: Why are you doing this? I said, ‘I’m doing it for the good of the company and the community. Six months from now, if the company is worse for it, I’m a jerk. But if six months from now the company is better for it, you’ll know I did it for the right reasons.’ I took a lot of risk, told people I was taking the risk, but told them it was going to get better.”
Find Time for the Future
“By the summer of 2009, we were losing our minds; the site was blowing up every day. I started a small group of the best engineers, and I called it the Breakfast Club. I said, ‘I know you don’t like to get up early, but I want you to come here for breakfast three days a week, and we’re going to talk about the future only, nothing about what’s going on. We’re going to build the Etsy future.’ ”
Do Whatever’s Necessary
“One year, right before the kickoff for holiday shopping, we discovered we needed a new server. We literally needed it the next day, so I pulled out my Amex and ordered the server. It was delivered to a FedEx center in Moonachie, New Jersey. I ran out of the office in Brooklyn and drove to Moonachie. I pulled the car up into the loading dock at our data center and carried it over to the guys who would install it.”
Etsy is growing rapidly, has hundreds of happy employees, and is worth hundreds of millions of dollars--but is still deeply troubled. Now comes the hard part for CEO Chad Dickerson.
In his first week as chief technology officer of the e-commerce company Etsy, Chad Dickerson took a promising engineering candidate to a café near the company’s office in the Dumbo section of Brooklyn, New York, to conduct an interview. While the two were sitting at the bar, the new CTO got a text message from Etsy’s founder, Rob Kalin, saying the site was down and nobody knew why. Trying to remain calm and not give away the bush-league crisis, Dickerson excused himself and headed to the restroom to respond. In a series of texts and calls, while his candidate sat nursing a drink in the other room, he learned to his horror that the site didn’t even have a way to tell visitors it was experiencing technical difficulties. “You’d go to Etsy.com, and it was like dead air,” Dickerson says. In the scramble that ensued, someone remembered, “Oh, yeah; we used to have this blog. Let’s get that going again, so we can at least redirect people there.”
Etsy had launched in 2005 as a marketplace of handmade goods, and by the time Dickerson arrived, in 2008, the craze for artisanal products was well established in popular culture. Kalin’s company was perfectly positioned at the center of it all (and Kalin himself would be on the cover of Inc. twice). Individual crafters would crochet beanies and whittle baby toys in their garages, and Etsy would provide them online storefronts and access to a vast customer base. Kalin had recruited Dickerson to join Etsy with a passionate narrative about how the site was trying to change the world through the sheer power of craftsmanship. Dickerson had long harbored something of a hippie streak, and he was restless in his job running the advanced-products team at Yahoo, so he took a chance and moved with his wife across the country from Silicon Valley to Brooklyn.
Now, just a few days into his job, he began to wonder if he had made a terrible mistake.
It wasn’t just the technology that was a disaster. Kalin had started the company, along with two friends, when he was a 24-year-old recent graduate armed with a classics major and a passion for furniture making but little to no technology or business acumen. His lack of experience didn’t limit the company at first, but as Etsy grew and took on tens of millions of dollars in venture capital financing, it began buckling under the weight of its success. Customer service was a joke, for instance; sellers who had problems often waited a week to get a response to an email. Kalin’s co-founders left the company in 2008 and said the experience had been like “an abusive relationship.”
That’s the company Dickerson took responsibility for in 2011, when Etsy’s board removed Kalin and named Dickerson CEO. Since then, head count has more than doubled, to more than 450. Gross merchandise sales have roughly tripled and are on track to approach $1.5 billion this year. There are more than a million shops on Etsy, 18 million items for sale, and 60 million monthly unique visitors, up from 25 million when Dickerson took over.
Not only is Etsy moving fast, but under the hood, things are running smoothly. The site is stable and fast, mobile traffic has surged, and a custom payment platform has streamlined the buying process and added a new revenue stream. Transactions happen in nine languages across more than 200 countries. Within the company, Dickerson has created a culture in which employees have a high degree of creative freedom and, when things go wrong, accountability without blame. “We actually trust people,” Dickerson says. He calls the approach a “radical decentralization of authority.”
It’s a remarkable success story: A leader takes over a troubled operation intimately tied to its founder and earns the trust and admiration of his staff members by, in large part, trusting them. Spend a few days hanging around Etsy headquarters, lunching at picnic tables and tearing up paper plates so they’ll break down more easily in a compost pile, and you come away with the impression of a confident and enlightened company. An IPO is widely anticipated.
And yet, spend just a few minutes scanning the Etsy forums, where sellers trade tips and discuss Etsy-related issues, and another story quickly emerges, one in which Etsy faces nothing short of an existential crisis. On the forums, a highly vocal faction of members accuses Dickerson of selling out the company’s mission. In this narrative, Dickerson was brought on as a tool of the investors, who want the company to grow at all costs. Etsy is just a step away from becoming eBay, these people say.
At issue is what belongs in the Etsy marketplace. The individual artisans who helped build the company from scratch believe handmade goods should be just that, nothing more. This sounds reasonable enough--until a successful seller finds herself unable to meet demand and has no choice but to leave Etsy if she wants to expand her business. There are countless examples of exactly that happening.
Etsy, which makes most of its money by charging a 20-cent listing fee for each product and taking a 3.5 percent commission on each sale, clearly needs to keep its best sellers around. At the same time, the company can’t afford to alienate its passionate core. It adds up to a distinctly 21st-century dilemma for Dickerson. It’s not enough for the CEO of Etsy to build great shopping technology, post big sales numbers, and inspire his work force. He’s the leader of a community as much as a company, and that means balancing wildly divergent priorities. That his particular community includes a million-plus artist types with, in many cases, anticommercial tendencies, makes it all the harder. Only if he can earn the community’s trust, as he earned the trust of his staff, can he prove himself a visionary CEO.
To understand the conflict that’s roiling Etsy’s community and the challenge facing Dickerson, consider the case of Tielor McBride. A bearded 28-year-old Brooklyn-based leather-goods maker, McBride joined Etsy in 2010. He was designing window displays and interiors for Ralph Lauren stores, but after he got promoted into the advertising department and the work left him creatively unfulfilled, he decided to turn his hobby of making rugged leather and canvas bags into a profession. He made his first sale on Etsy in late 2010, under the shop name TM1985, and business took off a few months later when he was highlighted on Etsy’s homepage as a Featured Seller; he had 200 orders in one day.
As sales picked up on Etsy, McBride’s connections in the fashion world also started paying off, and he began selling bags to independent boutiques in Brooklyn and beyond. His business quickly exceeded his capacity to turn out bags in his workshop, so he decided to expand his production operations, as any budding entrepreneur would.
Today, 12 skilled workers make TM1985 bags and wallets and other accessories in a small family-owned leather-goods factory in New Jersey. McBride visits the factory two or three times a week to make sure the foreman knows what’s coming down the line, to keep an eye on quality, and occasionally to help punch out leather or rivet pieces. He designs all his products himself and still makes prototypes in his own workshop, but increasingly, he spends time on operational matters. He will sell half a million dollars’ worth of bags this year, about 90 percent of that through his wholesale channels and just a few percent through Etsy.
“I’ve benefited a lot from Etsy--I got my start there,” McBride says. On one level, his success is a testament to the cultural movement that made Etsy possible. His brand’s entire reason for being is a rebuke to big business and a return to personal attention to detail. And yet, as he’s grown, the amount that his hands touch any individual piece has shrunk to nearly zero.
For Dickerson, supporting successful shops like TM1985 has been a high priority. Historically, the company has done this by amending the guidelines for what does and doesn’t belong in the marketplace. What began as a 4,000-word rules document ballooned to 14,000 words by 2012, as various exceptions and fine distinctions were accounted for. McBride was able to continue on Etsy because his manufacturing partner qualified as “partial production assistance” under the rules.
The problem was, nobody was quite sure what partial production meant, and many of the other rules were similarly unclear. Rather than settle debates, the complex thicket of regulations created new debates and an ever-larger enforcement burden for the company. If a wedding-dress maker enlisted her sister to work with her in her studio, that would be an acceptable labor arrangement, but if her sister worked in another state, it would not. Why? Technology changes have complicated matters further: What if someone designed a toy on a computer and produced it with a 3-D printer? Would that be handmade? Why is it any better or worse than Tielor McBride’s bag factory?
Just as important as finding ways to keep sellers like McBride within the rules is providing them with a different class of customers. Rather than letting McBride make 90 percent of his sales to other retailers, for instance, Dickerson has created a wholesale market on Etsy. It allows Etsy members to connect with retailer partners such as West Elm and Nordstrom, as well as independent boutiques around the country.
The wholesale program is one step in a wider effort to professionalize Etsy’s sellers. A tool called Shop Stats provides a dashboard of store-performance metrics. A Seller Education Program teaches members business skills such as how to merchandise for the holidays and how to generate traffic through social media. One goal of the professionalization of Etsy, Dickerson says, is to give sellers more time to focus on designing and making their products. The other goal, of course, is to increase sales for everybody.
Dickerson, 41, is an unlikely tech CEO, a former English major at Duke who started his career as a ponytailed aspiring journalist and fell into Internet technology somewhat by accident. Eventually, he became a pioneer of modern Silicon Valley-style tech culture, the man who made the hack day a staple of the start-up world when he was at Yahoo. A little bit round and rumpled, with salt-and-pepper hair, he radiates a basic decency that makes it entirely believable when he talks about his underlying idealism.
It’s a profile that doesn’t fit the craven-capitalist picture you’d get of Dickerson if all you knew of him was what appears on Etsy’s user forums. The disconnect comes down to trust. Dickerson has earned it among staff members because he delivered them from a demoralizing situation and because of the open, honest culture he created. Oddly, those same core cultural principles have been absent in much of Etsy’s management of its community. When Dickerson talks about creating opportunity for sellers, many interpret that as code for him wanting to court big business and move away from the craft movement. They call Dickerson’s company Etsy-bay.
Nowhere has the lack of trust played out more clearly than in the debate around so-called resellers, distributors of mass-produced goods that masquerade as handmade on Etsy. Nobody denies that resellers exist--because Etsy is an open platform, anyone can sign up, so a certain level of spam is inevitable--but many Etsy members suspect the company of quietly tolerating them to collect the revenue they generate.
In early 2013, Dickerson sat down with Heather Jassy, Etsy’s vice president of member operations, and gave her the task of reimagining the company’s marketplace guidelines. “I want you to write a new set of policies,” he said to her, “and my only requirement is that you do it in a sensory deprivation chamber, without referring to the current ones.”
The project became known internally by the code name Humanscale. “We wanted to emphasize the idea that this was about people,” Dickerson says. The previous rules centered on trying to define what is handmade and what is not. The new rules wouldn’t even bother to define handmade, and instead took shape around three broad principles that Dickerson has encoded throughout the company’s culture: authorship, responsibility, and transparency. Now he would try to encode those cultural values in the selling community.
In Dickerson’s words, authorship means that “the items you sell begin with you; Etsy is not a place to sell items that you had no role in making.” Responsibility means “you take responsibility for the way your items are made from beginning to end.” And transparency means “you should be open and honest about all the people and partners involved in what you are selling on Etsy.”
More practically, the new guidelines allow sellers to hire as many people as they want, in any place they want. Sellers can enlist manufacturing partners to produce all or part of the goods they’ve designed. “Partial production assistance” is gone, as are other, similarly complicated conceptions. The only requirements are that sellers submit applications to use mass production--an in-house team will review them--and that approved manufacturing partners be disclosed on the shops’ About pages.
It’s a radical departure from the past, and for the first time a decentralization of authority when it comes to the community. “We are trusting the sellers to make the right decisions,” Dickerson says, “and do it in a marketplace that’s open and honest.”
A few dozen Etsy sellers have gathered at Etsy headquarters for a town hall meeting in which Dickerson will announce the new production guidelines. Around the world, more than 5,000 Etsy members are tuning in via webcast.
“The sellers here and those of you on the webcast are really who helped build this company, and as we grow, I want Etsy to commit to getting closer to the community, not growing apart,” Dickerson begins, pacing in front of the audience with a vintage sewing machine and a few spools of fabric arrayed on a table behind him. “We all know that Etsy can only do well when our seller community does well-;when you do well.” He announces that the company plans to launch a new era of transparency and open communication with sellers.
From now on, Dickerson says, Etsy will release a detailed quarterly summary of its performance and strategic goals, so sellers can have a better understanding of why the company makes the decisions it does. Beginning today, the company will unveil a new section of its website that offers much more detail than previously available about its market-integrity efforts. The new section will detail how many shops are being flagged as potential violators, how many investigations are opened by the company, and how many shops end up getting booted. A few people applaud when he announces that Etsy will now offer phone support for its sellers, something the community has long begged for.
Things are going well so far, and the audience remains polite as Dickerson launches into the real reason for the meeting--the Humanscale production guidelines, which are now 900 words, down from the previous 14,000. When he opens the floor for questions, some are easily dismissed (Is Etsy selling out? No. Why are there so many resellers? We’re constantly fighting it), but others prove trickier.
One seller in the room points out that, under the new rules, it’s possible that Ikea could qualify to sell on Etsy. As long as there were a person at Ikea designing a product and vouching for the sustainability of its production process, why couldn’t that product now qualify? Dickerson’s response: “If Ikea called today and said they want to be on Etsy, I’d hang up. They should buy from Etsy.” It’s not an entirely satisfying answer, because there’s nothing in the rules that explicitly prevents established brands from listing their products, other than a subjective application-approval process. Saying no to Ikea is an easy call, but what about a smaller but established company that’s serious about sustainable production? How big is too big? Etsy doesn’t have clear answers to those questions yet.
The most important aspect of the Ikea question is simply that it was asked. To Dickerson, of course Ikea would never be able to sell on Etsy. But to a community that doesn’t yet trust him, that’s not obvious. The risk of knocking down the confusing old rules is that people can interpret it as a flinging open of the doors to bad actors. Which is exactly what happens on the Etsy forums as people watch the town hall webcast.
“Oh noooooo... this is not sounding good AT ALL :(”
“Well handmade just died. Etsy just voluntarily self-imploded.”
Dickerson and every other Etsy executive I spoke to said the company ran no financial projections when developing the Humanscale project; every decision was just about responsibility, transparency, and authorship. That’s a highly principled move for an e-commerce company that’s normally driven by data. But the fact remains that empowering sellers to grow more easily can only help Etsy continue to grow--which is, of course, the point.
Dickerson sees the Etsy of the future as a market not of handmade goods but of what he calls “person-to-person” commerce. “It’s all about creative people building businesses, connecting people through commerce, and making items that have stories behind them,” he says. He envisions Etsy sellers mobilizing skilled workers in struggling former industrial communities like Detroit. Manufacturing isn’t a bad word in this vision of Etsy; it’s essential. If Etsy is going to change the world, it’s going to do it by opening a vast market of humanely and sustainably produced goods dreamed up by real people who really care about quality. It’s no less soulful a vision than Rob Kalin’s ideal of individual crafters crafting for a living. And Dickerson sees no reason handmade goods can’t coexist in a person-to-person market with goods made in small factories.
In the days and weeks after the town hall, a few supportive threads in the forums vie for attention with the doomsday predictions. Dickerson hopes that time will prove him right, as the company approves the right kind of manufacturers, drives out the wrong ones, and devises new tools to help everyone sell. “At the risk of sounding quite self-aggrandizing, I just have like a really deep sense of responsibility,” he says. “I know that there’s a lot of conflict and protest in the community, but I really want the community to be successful. When I think about the changes we’ve made, it’s always been in the name of that.” If only the community would believe him.
Answer: clean air, clean living and lots of cash to invest.
We had barely started our tour of the Chautauqua, Boulder's verdant 19th-century park, when my guide for the morning, local historian Carol Taylor, handed me the packet with the "cautionary tales." They were photocopied news articles, all from national publications, all featuring Boulder and all written--in Taylor's mind, anyway--by superficial out-of-towner nincompoops. "Namaste and Pass the Naan," read one's subhead. "You will be hard-pressed to find one person here, including your 85-year-old grandmother, without a six-pack," read another. Over four decades, as Taylor's packet meant to show, writers had missed the town for the lovely trees (and bike paths and mountain views)--unfairly reducing Boulder to a playground where smug eco-liberals puffed legalized marijuana and compared triathlon times.
"We're so much more complex than that," Taylor said. She gave me a gentle, pleading look. "Don't just go back and write that everyone rides their bikes everywhere."
Out from the gleaming sunlight, a Lycra-clad cyclist whizzed majestically by.
Let me just say, it's hard to keep a straight face when touring this idyllic mountain city--and interviewing its start-up founders and venture capitalists, its coffee-shop denizens and microbrew cognoscenti. It's so tempting to linger on the glorious hippie mane of the organic peanut butter CEO, or quote the impossibly outdoorsy venture capitalist ("I only invest in companies I can ride my mountain bike to!"). But I don't want to be unfair or stoop to caricature. It's not as if they were handing out free joints to everybody on Pearl Street, the city's main drag, on the day I arrived. (No, that was two days earlier. The event was called the Boulder Flood Relief Joint Giveaway.)
But easy as Boulder may be to mock, the city is impossible to dismiss. Boulder is an entrepreneurial powerhouse like no other. In 2010, the city had six times more high-tech start-ups per capita than the nation's average, according to an August 2013 study by the Kauffman Foundation--and twice as many
per capita as runner-up San Jose-Sunnyvale in California. This vibrant culture has given Boulder a prosperous economy: Without the help of oil, natural gas, or any monolithic industry, Boulder County (population 300,000) ranks among the top 20 most productive metro areas in terms of GDP. Unemployment is 5.4 percent--almost two points below the national average and a full point below the Federal Reserve's goal for the nation. It is the home to a start-up incubator, Techstars, and a healthy venture capitalist community.
Boulder as start-up haven is not a new development, either. Since 1960, it has quietly nurtured nascent industries, including natural foods, computer storage, biotech, and now Internet companies. It's the original home of Ball Aerospace (one of the first NASA contractors), herbal tea pioneer Celestial Seasonings, StorageTek (later acquired by Sun Microsystems for $4.1 billion), and the biochemistry lab that led to Amgen.
But Boulder wasn't always so affluent, so collegiate, so pretty. The history of Boulder, the start-up haven, is a fascinating story of a community that built itself from scratch through a combination of individual effort, shared sacrifice, and counterintuitive choices (not to mention a near-constant urge to skip out of the office and get outdoors). Its success is a very specific, and in some ways limited, way of fostering a local economy. But it offers an unexpected solution to how cities all over the U.S. could make themselves a welcoming spot for start-ups.
When city fathers first laid out Boulder, the city was dry, barren, and unremarkable--a two-mile stretch of road at the mouth of Boulder Canyon that served as one of several mining-supply depots following the 1859 Colorado gold rush. Wrote Isabella Bird, a British travel writer, in an 1879 book: "Boulder is a hideous collection of framed houses on the burning plain."
But a streak of exceptionalism ran through Boulderites. They displayed a deep commitment to city beautification and education. In 1877, just six years after Boulder officially incorporated, citizens persuaded the state legislature to make it home to Colorado's first public university; 104 families donated land and money to build the campus. In 1889, the citizens voted to issue a $20,000 bond to build the Chautauqua, a place where visiting Texas schoolteachers could hike, picnic, and listen to lectures--a sort of bucolic TED Conference of the time.
In 1908, citizens hired landscape architect Frederick Law Olmsted Jr. (the son of the legendary creator of New York City's Central Park) to consult with them on how best to plan the city--a precocious move for a town of 10,000. His recommendations included putting wires underground and keeping streetlights beneath tree level, and he cautioned them about suburban developers, "dirty industries," and pandering to tourists. Above all, he said, Boulder must be beautiful--a prosperous town where people would spend their lives, not just make their money and get out. "As with the food we eat and the air we breathe, so the sights habitually before our eyes play an immense part of determining whether we feel cheerful, efficient, and fit for life," Olmsted wrote in his report.
Boulder might have remained a sleepy pretty college town, were it not for the communists. In 1949, fearful of a Soviet nuclear attack, President Harry Truman issued an order to stop the clustering of major buildings in Washington, D.C. The nation's basic research labs had to expand elsewhere. Boulder citizens, sensing an opportunity, bought up 217 acres of land and beat out 11 other cities to make that site the home of the National Bureau of Standards's new Radio Propagation Laboratory.
At first, the D.C.-based scientists bristled, considered it an exile. "They would say, 'Where do we go to see the Indians?' " says R.C. ("Merc") Mercure, one of the founding employees of Ball Aerospace, who was a physics graduate student at the University of Colorado at the time.
But the move put Boulder on the U.S. government's map. In 1952, the federal government made greater Boulder the site of Rocky Flats, a 27-building nuclear weapons manufacturing facility. After the Department of Defense ordered sophisticated rocket pointing controls from CU's labs, researchers, including Mercure, left to form Ball Aerospace, which filled those contracts and others. Eventually, the government made Boulder the site of the National Center for Atmospheric Research, and IBM moved its tape drive manufacturing division out there, which later led to the founding of storage start-ups StorageTek, Exabyte, and McData. On the backs of these technology jobs, Boulder's population doubled from 1950 to 1960 and then jumped to 67,000 10 years later.
By the late '60s, scientists weren't the only new people moving in. Across the country, the hippie movement was under way, and as suburban teens and twentysomethings started migrating to beautiful places across the country, many chose Boulder. (In the first half of 1968, drug arrests in the city doubled.) To Mo Siegel, a Colorado boy who had grown up on a ranch 80 miles away in Palmer Lake, the assembled flower children were his kind of people--and, in 1969, a potential market. A health nut already, the 19-year-old began gathering herbs in the foothills surrounding Boulder, filling up gunnysacks with chamomile and red clover blossoms, sewing them into little muslin tea bags, and selling them, in 1969, as Mo's 36 Herb tea. It would become the first year of business of Celestial Seasonings, the brand that became known for teas such as Sleepytime and Red Zinger. (Siegel eventually sold the company to Kraft, bought it back, and then sold it again to Hain Foods for $336 million.)
Celestial Seasonings was among the first of many natural-foods companies, including White Wave, maker of Silk-brand soy milk; Horizon Organic Dairy; and Alfalfa's, a specialty market akin to Whole Foods. For these sorts of entrepreneurs, Boulder was an ideal test market. Given its population of affluent, outdoorsy types, brands could test new ideas with a friendly group of consumers in the local markets, work out the kinks at low risk, and then take the successes to a more general market in Denver and beyond.
"I just got so much support. Everybody believed," says Siegel.
With industry picking up and the population booming, the city could have stoked the growth, welcoming developers in to build out new housing and offices. Instead, it did the opposite. In 1959, the city drew a line across the surrounding mountains, above which it would not provide water or sewer services--purely in order to protect the view. In 1967, residents instituted a special 0.4 percent sales tax to purchase "green space" around the city, stymieing developers, heading off major roadways, and preserving nature. Next, the city limited new housing starts to just 2 percent a year. Now the county manages more than 97,000 acres of open space. Boulder is in a bucolic bubble, with the Rocky Mountains on one side and parkland on the other.
Encircling the city with green space has had several implications for Boulder, some expected and some not. Though never exactly cheap before, the limited space has resulted in sky-high real estate prices--with a median price of $431,200, single family homes are 1.5 times as expensive as in Denver. Meanwhile, as the preserved space flourished, so did the deer population--and the hungry mountain lions, which commuted in to eat the deer and, occasionally, attack citizens of Boulder.
The green border, paired with the city's conservative zoning and development laws, has also meant that national retailers--or any monolithic competitor--have trouble finding good spaces to open in Boulder. Meanwhile, the city's hard line against expansion doesn't really allow its own start-ups to grow much past a certain size. The result? The town has made itself a physical incubator for small businesses. "After companies reach 500 employees, they either have to move out to the other side of the open space or sell," says Kyle Lefkoff, a general partner with Boulder Ventures since 1995.
But for those who can afford the housing, steer clear of the mountain lions, and squeeze into its limited office space, Boulder affords an incredible quality of life--along with a place to do business. The planning strategy, which at first seems antibusiness, simply favors those who are in it for the long haul--those who are thinking about raising families and living in Boulder until old age, and weeds out those that would dive in because of a juicy tax incentive.
There are entrepreneurs like Phil Anson, who came out after graduating from college purely to bum around and climb. A onetime line cook, he started selling premade burritos out of a cooler to support himself. In time, he found he liked scaling that business better than scaling rocks, and Evol Burritos, his 73-employee company, now distributes to supermarkets nationwide and rang up $12.4 million last year.
There were those who arrived in Boulder by accident and fell in love. Matt Larson, founder of Confio Software, moved there because his biggest investor told him he had to as a condition to getting funded (the man lived in Boulder and wanted to be chairman but didn't want to move). Alabama native Dale Katechis ended up in Lyons, the town just north of Boulder, after he and his wife ran out of money on the way to Montana. Katechis started waiting tables. Then he opened his own restaurant, Oskar Blues Brewery, and started brewing beer as a way to get his eatery's name out, and found the beer sold better than the food. (His brewery, which sells Dale's Pale Ale, made $33 million in sales last year.) Little Lyons "was like Mayberry in the mountains," Katechis says, his voice tinged with the last remnants of an Alabama drawl.
There are those entrepreneurs who moved to Boulder when they were older, when they already had money, almost as a reward to themselves. In 2001, the Wall Street day-trading firm where Kate Maloney worked opened an office in Boulder, simply because she and some co-workers thought it would be more fun. Six years later, she started TherapySites, a Web company she runs out of a loft apartment downtown. In 2006, adman Alex Bogusky moved a chunk of Crispin Porter + Bogusky, the advertising agency he co-founded, from Miami to offices in Gunbarrel, a town eight miles northeast of Boulder. To Bogusky, outdoor sports lovers and entrepreneurs share a common DNA: "Thrill seekers are drawn to this place," he says. "Once you get out here, you want the ultimate thrill in business, too, and that's start-ups." By the time Bogusky retired from the agency, the Boulder office of Crispin Porter + Bogusky had swelled to more than 700 employees--many of whom had moved from Miami.
And finally, there are those who came out of the University of Colorado and couldn't imagine going anywhere else. The most famous is probably Marvin Caruthers, who, as a biochemistry professor in 1980, helped start the biotech firm Amgen. His co-founders decided to put company headquarters in Thousand Oaks, California, but Caruthers kept a lab in Boulder. Since then, the University of Colorado has become a destination for DNA and RNA research. Veterans of his department, of Amgen, and of the university's biology departments would go on to start biotech firms, including Applied Biosystems, Dharmacon, Myogen, and Pharmion, companies that sold for more than $6 billion altogether.
I wish I could point to some municipal entrepreneurship program or other business initiative that enticed these people to start companies in Boulder. But the thing is, entrepreneurs claim the city stymies them more than it helps. Mundane parking regulations hindered business early on, says Niel Robertson, CEO of $12.6 million-a-year Internet advertising start-up Trada. The city, in its efforts to reduce congestion, gave Robertson's 17-employee company just three parking permits. (The company, which now has 100 employees, has since moved to a building with a parking garage.)
Anson, the burrito maker, says it took eight weeks just to get a permit to install a new refrigeration unit at his plant. "They're so conditioned to say no to everything," he says. "It's a massive pain in the ass." But leave town? No way. "It's a dual-edged sword," says Anson. "It's harder for me to run my plant, but it's also why people can't build mansions and block each other's views, so we have a balanced city."
Of course, Boulder's not perfect. Many businesses would struggle to exist there, especially those that require heavy equipment or a low-wage work force. Its regulations, and its constricted land area, heavily favor small companies. In fact, several start-ups, including Internet security firm Webroot and StorageTek, grew out of the town, choosing to move out to a sprawling office across the green space in neighboring Broomfield. But many other entrepreneurs decided to sell out and stay--and join Boulder's growing number of angel investors and venture capitalists, the next step in the city's development. Mo Siegel now invests in other natural-foods companies. Caruthers helped start Boulder Ventures, which invests almost exclusively in Boulder entrepreneurs.
All together, venture capital firms invested $587 million in Colorado in 2012--a far cry from major venture hubs such as Silicon Valley and New York City ($11 billion and $2.3 billion, respectively) but significant. They would rather do that than move to some tony retirement place--because in their minds, Boulder beats 'em all. That's the thing. Pretty much every entrepreneur told me he or she started up in Boulder or stayed in Boulder for that same reason: It's a beautiful place to live. And it's beautiful not because the city forefathers had some nifty pro-start-up policy--but because they had the foresight to plant lots of trees, welcome a university and federal science labs, buy up lots of parkland, and then stay disciplined about preserving the beauty they had created. The idea was simple: Make a city a great place to live, and people figure out how to make a living there.
The best way to build stronger defenses is to identify your company's weak spots. Here's a primer.
First things first: There are way more than five ways that cyberthieves can break into your business. (They’re surely thinking up new methods as you read this.) Often they use more than one approach in a single attack.
Even so, small-business hacks tend to fall into a few categories. We turned to security professionals and "ethical" hackers--they help businesses identify their vulnerabilities--to find out the most common methods used and what you can do to protect yourself and your brand.Weak Passwords
How It Works: With a $300 graphics card, a hacker can run 420 billion simple, lowercase, eight-character password combinations a minute.
Risks/Costs: 80% of cyberattacks involve weak passwords. 55% of people use one password for all logins.
Notable Scams: In 2012, hackers cracked 6.4 million LinkedIn passwords and 1.5 million eHarmony passwords in two separate attacks.
Your Best Defense:
- Use a unique password for each account.
- Aim for at least 20 characters and preferably gibberish, not real words.
- Insert special characters: @#$*&
- Try a password manager such as LastPass or Dashlane.
- Check out password alternatives.
How It Works: An infected website, USB drive, or application delivers software that can capture keystrokes, passwords, and data.
Risks/Costs: 8% increase in malware attacks against small businesses since 2012. Average loss from a targeted attack: $92,000.
Notable Scams: In February, hackers attacked about 40 companies, including Apple, Facebook, and Twitter, by first infecting a mobile developer’s site.
Your Best Defense:
- Run robust malware-detection software like Norton Toolbar.
- Keep existing software updated.
- Use an iPhone--Android phones are targeted more than any other mobile OS.
How It Works: Bogus but official-looking emails prompt you to enter your password or click links to infected websites.
Risks/Costs: 125% rise in social-media phishing attacks since 2012. Phishers stole $1 billion from small businesses in 2012.
Notable Scams: Scads of small businesses were targeted in 2012 with phishing emails designed to look like Better Business Bureau warnings.
Your Best Defense:
- Keep existing software, operating systems, and browsers updated with the latest patches.
- Don’t automatically click on links in emails to external sites--retype the URL in your browser.
How It Works: Think 21st-century con artist tactics, e.g., hackers pretend to be you to reset your passwords.
Risks/Costs: 29% of all security breaches involve some form of social engineering. Average loss: $25,000 to $100,000 per incident.
Notable Scams: In 2009, social engineers posed as Coca-Cola’s CEO, persuading an exec to open an email with software that infiltrated the network.
Your Best Defense:
- Rethink what you reveal on social media--it’s all fodder for social engineers.
- Develop policies for handling sensitive requests like password resets over the phone.
- Have a security audit done.
How It Works: Hackers hold your website hostage, often posting embarrassing content like porn, until you pay a ransom.
Risks/Costs: $5 million is extorted each year. The real cost is the data loss--paying the ransom doesn’t mean you get your files back.
Notable Scams: Hackers locked the network at an Alabama ABC TV station, demanding a ransom to remove a red screen on every computer.
Your Best Defense:
- As with malware, don’t click on suspicious links or unknown websites.
- Regularly back up your data.
- Use software, such as Kaspersky Internet Security 2014, that specifically checks for new exploits.
Sources: Symantec, Kaspersky, Verizon, CSO, LastPass, abcnews.com, Osterman Research, Neohapsis Security Services
When communication and trust break down among you and your top execs, you need to fix it fast. Here's how to get to the root of the problem.
When stress is high and deadlines are tight, it's natural--and even OK--for a team to experience some tension. What's not OK is a breakdown in trust and clear communication. If you, the CEO, and your management team have gotten to the point where you're airing your grievances against each other to other people in the office, you need to fix the problem fast.
Liane Davey, author of "You First: Inspire Your Team to Grow Up, Get Along, and Get Stuff Done" and vice president of team solutions at Knightsbridge Human Capital, has a solution to fix communication and trust issues between executives. Davey has created what she calls a "Team Inoculation program," which she refers to as "the flu shot for teams."
"Few people are aware and honest enough to see the role they play in the dynamic of the team," Davey writes in the Harvard Business Review. "When things on teams go wrong, most people spend their time blaming everyone else for their predicament," she writes. "You have to take accountability for the effectiveness of your team."
The key to fixing a quarrelsome team is to recognize the role you've been playing and change your actions. Below, read the roles Davey has outlined with the necessary changes you need to make to come to a solution.
The 'Wicked' One
Usually one or more people are actively destroying the team dynamic, Davey says. If you rely on truculent tactics--disparaging, trivializing, and interrupting your team members, or spreading rumors and telling employees to ignore another executive's orders--you need realize you are causing the strife. "With greater self-awareness and some coaching, you can change. In my experience, the wicked team member is actually the easiest to convert. Usually this is because the wicked ones are smart and want to have an impact," Davey writes. But if someone else is the wicked one you have to "give them a way to make a more significant and positive contribution," she says.
The 'Wronged' Team Member
If you're the team member who has been marginalized and trampled, you need to change your attitude. There is no time for "wallowing" and you need to start standing up for yourself, Davey says, but do not go on the attack. "It's time to change how you show up. You might be surprised to learn that, in my experience, it's more likely to be the wronged who is voted off the island than the wicked. That is because the wronged often lack the energy and resilience to make another earnest attempt at making the team better," Davey writes. "They are exhausted by the experience and often past the point of no return."
You could very well not be involved in the dysfunction at all--you may be happy to sit on the sidelines and watch your team go after each other's throats. But, as a leader you cannot be a bystander. Not intervening when you know you should is just as bad as instigating the problem. A leader needs to mediate between the two opposing sides and help everyone come together again. "The witnesses are the first to throw up their hands and say that life on the dysfunctional team is unbearable. Unfortunately, commiserating does nothing to change the course of things, and their disengagement costs the team, too," Davey writes. "Are you just watching as your team goes down the tubes? Get in the game."
Effective email marketing campaigns require proper timing, deep knowledge of your audience, and plenty of restraint.
Email marketers must walk a fine line when crafting newsletters and other messages. Your missives can be a welcome promotion, filled with information of real interest to subscribers and sent infrequently enough to remain unobtrusive--or they can be just another inbox-clogging nuisance. Here are the most important tips from Mashable on getting subscribers engaged and keeping them from clicking the dreaded "unsubscribe" link.
Pay attention to timing
Not only does the message itself need to be timely to resonate with subscribers, but it's important to send it at the right time. Mashable cites a recent survey by Experian Marketing Services that finds emails sent on Saturdays and Sundays receive the most clicks and yield the highest revenue-per-email rate. Late nights are also good--with a lower volume of competing messages, emails sent between 8 p.m and 4 a.m. garner the highest response rate. You'll need to do some testing to determine the optimal times.
Personalize the message
Sending out a single email blast to all subscribers may save time, but it's a poor way to make a real connection with them. It's far more effective to break the list into groups based on demographics or behavior from the user data you've collected. The more relevant you can make the message to each individual recipient, the more likely they'll be to engage with it.
Don't forget mobile users
A huge portion of your audience will receive your email newsletter on a mobile device, so making the text readable and the links clickable is crucial. That may seem obvious in this mobile-dominated era, but a study by software company Equinux earlier this year found that less than 12 percent of major brands' newsletters were optimized for viewing on mobile displays.
Acknowledge when a subscriber engages
To maintain the connection with subscribers, send an appreciative response when they sign up, as well as the first time they make a purchase or engage with your email materials in some other way. Just be careful not to bombard them with follow-up messages--sending too much email is the surest way to lose new subscribers.
Give an "opt-down" option
Another way to avoid email overkill is letting customers choose to receive fewer newsletters or other messages. When someone on your list indicates that s/he wants to unsubscribe, present this as an alternative.
Expect to lose some people
No matter how useful and well tailored your campaign is, you're going to lose some subscribers, most often within 30 days of their sign-up date. It's an inevitable part of email marketing, but one that you can minimize. When people opt to unsubscribe, ask them to fill out an exit survey where they can click a button to indicate their reasons for leaving and fill in a field to give more specific feedback. Collecting this information can prove vital for preventing the loss of other customers in the future.