AoM got busy. These write ups will be even shorter than the previous ones.
Interesting group, interesting discussion. No one (still) likes my relationship of Kickstarter to offline pre-sales, such as concerts. That’s ok. No one likes it when I point out that a mortgage is a bundled loan (it is really the deposits in the bank (well, 9 times the deposits of the bank) being lent, not the bank’s own money, so a mortgage in some sense is a crowd funded loan. Think Jimmy Stuart in It’s a Wonderful Life) either. I’ll get over it. Here are some bullets I got from this.
- why people buy and donate on Kickstarter is under researched
- the crowdfunding research is taking off, but it needs to be careful to not fall into Stuart’s Trap (which is apparently, not connecting to other areas of research…–so I know what that is now too….)
- (of course) there is a file drawer problem
- Demographics don’t seem to matter (to success) once you get the funding to start your project. This is probably the most significant non significant finding I’ve ever heard.
- There’s something called ScholarFlock.com that I need to check out someday.
- Paper Idea — Crowdfunding as cultural and/or social investment
- Paper Idea — Types of pitches that perform better (this wasn’t covered in the PDW, I just came up with it while in the session. I think if I could get a sample of pitches that failed, then later succeeded by redoing their pitches (along with some that failed twice) I could learn something interesting)
- Locally, the Crescent Theater might make a good crowdfunding case study. What would you use a crowdfunding case study for? Piola Shoes (from Cincinnati) has an interesting story as well, but I’m not sure I’d be able to get permission to tell it. I might be able to sanitize it though.
- Corporate KickStarter is a thing. (interesting paper idea–how do people relate to corporate campaigns?
- Is there some way to get to lying in campaigns and how that affects stuff? I’m thinking about the changing story of iCPooch here.
- Stretch goals are an interesting area of study.
- How is feedback incorporated into the product.
Digital Technologies: A Game Changer for Entrepreneurship?
This was Per Davidsson’s session. Great job, like every thing he does.
Some interesting ideas. Most agree that entrepreneurship is entrepreneurship and technology is a tool. The PDW recommended thinking about digital technologies as (digital) artifacts, platforms, and infrastructure. Everyone seemed to agree. I may be a bit behind the curve here, but I’m not sure I could articulate the difference between each of the three. I do think that digital technologies move us towards more forgiving business models. That is, they make it easier to try and fail, and eventually succeed because the cost of failure is so low, and the level of success can be so high. When initial capital outlays are tiny and there is a zero marginal cost for additional units shipped, profit potential is pretty great.
Then came Susan Marlow, questioning that technology is a great leveler, that entrepreneurship is easy, and an idea plus a laptop can equal success. First, no one really claims this. Thinking people realize that technology levels the playing field, but no playing field is perfectly level, some are just more level. Second, no one thinks it’s easy, they just think it’s less costly to fail, making eventual success possible. Finally, an idea plus a laptop plus A TON OF WORK can, but may not necessarily equal success. It works. Not every time, nothing works every time. But it does work. And then we brought intersectionality into the conversation. I am so tired of people thinking that the reason some people are more successful than others is that they’re being kept down. Maybe that’s true. But plenty of people have refused to be kept down, and all this focus on these problems will not make them go away. It will institutionalize the very problems it highlights. Sigh. Enough soapbox. If you think the internet is not good for your particular special group try to get them to give it up.
Digital Footprints: We all have digital footprints. This blog is one of them. I’m sure that there are things in here that will keep me from getting hired, getting tenure, or getting promotions at certain jobs. I’m sure there are things in there that will keep me from being on certain boards, and so on. I’m sure there are things that might even keep me from starting some businesses. I’m too old to care. I should care, but I can’t make myself care. What use are digital footprints for entrepreneurs? That is an interesting question.
Howard Aldrich closed out this session by positing that digital entrepreneurship is third industrial revolution. Howard is a genius, so I felt pretty good because I’ve been saying words to that effect in class for several years now.
How Can We Make Entrepreneurship Research Relevant?
This PDW was run by Norris Krueger. That is enough by itself to justify attendance. Bullet points again.
- What would happen if I would disappear? Does the e’ship paper I’m working on matter enough that its absence would be noted? What happens if I don’t publish this?
- Look more into Kauffman’s Reports on Entrepreneurial Ecosystems.
- Look at Kauffman’s Mayors Conference. Recommend to Mayor if appropriate.
- Remember, policy makers do not read academic articles. Hit them where they are.They look for knowledge that leads to action. They DO NOT CARE about your lit review. (That’s cool. I don’t either really.)
- One good suggestion was tiered writing. Start with a readable working paper. Make a 2 page executive summary. Maybe make it into a blog post. They didn’t say this, but maybe a series of tweets….
- Paper launch events for things you want to be noticed.
- Most of this is to do boundary spanning. You translate your papers to the appropriate audience.
- Know if your study seeks to understand or explain. To this I’d add predict.
Lean Startups and Innovation Strategy: Towards a New Paradigm? — This contained a lot of stuff I’d heard before. One very interesting point that was made was that on the Business Model Canvas the only parts that matter are Customer Segments, Value Proposition, and Channels. I get what they were saying, but I’d want to see the research before I discarded 2/3 of the entire canvas.
I was scheduled to attend Leading Entrepreneurial Ventures: Individual and Team-Based Perspectives, but I was conferenced out for the day. I went back to the room, did some back exercises, and got ready for the Entrepreneurship Social that evening.
Team-Based Learning for Entrepreneurship Educators & Getting Student Buy In With Team Based Learning.
These were both run by Peter Balan, from the University of South Australia. They were both part of a sub conference of the AoM, which I’m not sure why exists, other than to take an extra $130 of my University’s money. Both seminars were very valuable to me. I believe I’m sold on team based learning. Next summer I would like to develop a suite of TBL exercises and fully implement it. If implementation is easier than I think it will be I may fully commit in the spring. I’m going to adopt some of the exercises teaching techniques I learned this semester, but doing a complete change over on such a short time will shortchange the students I think. And even if I were able to pull it off, it would leave no time for other duties.
While the sub-conference took a break I squeezed in a lunch session on Entrepreneurs and Individual Differences. I found the entire stream of research as presented uninspiring. We are all different, no matter how much some people want that to not be true. We have differences in intelligence, drive, access to capital, access to markets and opportunities, and so on. Some differences are hard-coded (genetic) into us, some are situational, and some we create ourselves. I’m comfortable with that, because there is nothing I or any entrepreneur can do to address some differences, and everything we can do to address others. Focusing on why certain cultures start certain types of businesses, certain genders have different opportunities, or particular ‘races’ (I so hate that word, it’s incorrect, and politically charged) have differing success rates is boring to me.
The FLIPPED Workshop
This was a hands on practice session with various online tools. I was familiar with many of them, and have been using them in my classes for a long time. But there were a few new ones, and I’m looking forward to receiving the email packet from the instructors so that I can weave in a few more online exercises.
After this session I retired to my room in order to work on a business plan for a Mobile area client.
Family Business Exit and Survivability — Mixed bag of papers
ENT Plenary Session — Managing an Entrepreneurship Center: A Director’s Perspective
David Deeds and Michael Morris anchored a very competent panel focused on running an entrepreneurship center in an academic setting. I was surprised by how much we’re already doing right at South. The Center Directors on the panel have huge budgets and we’re doing almost all of what they’re doing. I did get some good takeaways from this, but I had Dr. Mosley there with me, and they’ll probably be his initiatives. I have enough to do with what I’m already doing.
Crowdfunding: Signalling Knowledge and Trust — This was supposed to be run by my friend John Mueller, but he was unable to attend for whatever reason. Still an interesting paper session. The research on crowdfunding is advancing fast. Several good papers investigating signaling, trust and syndication.
The remainder of the day was entrepreneurship business meetings and social, which I did not attend.
A Multi-Level Perspective on the Processes of Learning, Knowledge Creation and Sharing — This paper session was on topics I know a relatively small amount about. That being said, the entire thing was very frustrating. I went to this to see Cai Unger’s presentation. He’s a doc student at South. Nice guy, and smart. At the conclusion of his presentation, he took questions from the audience, only they weren’t questions. They were the ramblings of people who had something to say, who may have been very knowledgeable, but seemed to be grandstanding for some reason I don’t even understand. If someone had tried that with me I believe I would have said ‘I’m sorry, what was the question?’ But I guess we don’t do that in academia. At any rate Cai did a great job and several from South were there to support him.
After that I hit the road. There were more sessions I wanted to go to, but there was also a whisky run to make, and my own bed to get to.
This was an eventful day. I had a full, full schedule. I’d like to thank the Academy (always wanted to say that) for putting together an excellent program. I’ve compiled some quick notes on the events I attended. As you read this keep in mind that these are only my views. The people that worked hard to put these programs together no doubt know far, far, more about their topics than I do. I probably missed the point on many, or even all, of these sessions. Any errors of understanding are mine.
8:00 Hogwarts School of Leadership: Two engaging ladies from UAB (University of Alabama, Birmingham) explained how they run an upper level leadership course using the Wizarding World of Harry Potter as an extended example to motivate participation and help students understand the concepts. Their class sounds amazing. My take aways were some examples of running a flipped classroom, some specific types of exercises that I can work into my classes to encourage that out of class work is completed, and most importantly, a new to me take on running teams in the classroom. They suggest larger teams than I’m used to using, and keeping the same teams all semester. I can see their points, but I’m not sure I’m ready to commit to doing that. I will give it some thought though.
9:45 Writing Better Theory: I showed up to a standing room only panel session. The line to get in was out the door and past. Security closed the door and ran us off, citing fire code concerns. I was really looking forward to that session. I asked if I could just put my pocket recorder in the room and pick it up later but they were unaccommodating.
12:00 The Future of Entrepreneurial Intentions Research: It was good to hear and be part of this type of conversation again. I have missed the theoretical world. I’m not sure if there’s a place for me in intentions research, but we’ll see. The people putting on the PDW think that they should kill the theory of planned behavior, and they made a good case. Their argument was that the world is complex, and TPB does not adequately explain or predict, from an empirical standpoint. They also discussed the iterative nature of the relationship between attitudes and intentions. I think most people agree that feedback loops are far more prevalent in the models that scholars put forward than they let on. But how on earth, even with panel studies, are you going to model intentions leading to attitudes, reinforcing intentions, reinforcing attitudes, heightening intentions, finally leading to action? It was hard enough writing feedback loops into design theory, where you have a well defined and well documented iterative prototyping process. Is TPB wrong? Certainly. I can tell you for sure that I was in business the first time almost before I made any decision, let alone formed an attitude about it. Besides that, I learned a little about a new data analysis technique called fuzzy set qualitative comparative analysis, or fsQCA for short. It proposed multiple solutions when they are present, I guess. Lastly, there was a long list of topics that need to be studied, the most interesting of which was the idea of collective intentions. We shall see if I find something in this area. They did say that for this research to be really interesting, it should be linked to performance. That made me smile, mostly because I say that about all research.
1:45 Creating a Shared Online Course in Creativity and Innovation: I mean no disrespect, but this PDW felt like 50% Why won’t you join our teaching collaborative, and 50% Please like my Facebook Page. That’s harsh, and I honestly got a lot more out of it than it sounds like. I did find out that people have similar problems and techniques for teaching C&I. The people hosting the PDW also have a lot of video content, some of it is even Min Basadur, who’s work makes up about half of my C&I class at South. It will be nice to get access to those videos and use them as outside assignments. It sounded like they have a bunch of course modules that could be plug and play, and are full of subject matter experts. I look forward to getting to know them better, and participating in the community they’re trying to create.
4:00 Fostering innovation in entrepreneurial ecosystem research: This one was long, and I was tired. Great stuff though, and I think I have a paper idea out of it. The panel discussion had three debates.
- Constructs, metaphors, and analogies — there was conversation for and against using the the ‘ecosystem’ concept. Points were made on both sides. I took from this the same thing that I took from my year-long conversation about what entrepreneurship was. It’s like Jim Fiet said to us, just define it and move on. The definition may be different in the next paper. As long as your work is internally consistent, you’ve done your job. (I’m paraphrasing. I’m sure what he said was shorter, and better phrased, but that was the idea.)
- Methodological Rigor — it’s lacking. Duh. Not to go off on a Fiet tangent with this post, but great men discuss ideas, lesser men criticize methods. Other issues discussed were what’s the proper unit of analysis, what’s the DV (hint, I think it’s performance…so either businesses started, cash taken in and spent, or maybe even Per Davidsson’s favorite variable, job creation. I like that one.), and can you generalize your findings and how. All great questions. Oh yeah, and what are the boundaries of the ecosystem, and what constructs are we examining.
- Theoretical Foundations — Maybe I was tired, and I’ll go back and listen to the recording of this later, but I could barely understand what was being said. It wasn’t accents or jargon, I just wasn’t tracking too well I think. They did give a nice list of theoretical lenses from which to examine ecosystems. I came up with a very doable paper idea (I think) just from the list. I think I can get data from snowball sampling smaller market ecosystems, then use standard SNA analysis to spit out potential variables like cohesiveness, and such, then perhaps set jobs created or dollars funneled to businesses as a DV and see what pops out.
Finally, this session introduced me to a potential new tool, Kahoot.IT, a instant feedback survey-game website. This might increase student engagement a bit.
6:00 Exhibit Hall Opening Reception: Went for 5 minutes. Didn’t stay, even though there were people there and companies I wished to talk to. One free drink was not worth fighting that crowd. So I had a nice dinner, retired to my room to work on other stuff, and now I’m putting this together before bed.
It’s the day before the start of the Academy of Management’s annual convention. I find myself in a Marriott Hotel in Atlanta. The bulk of the sessions that I’ll be attending over the next several days take place in this building, or right next door in the Hilton. I’m in a lovely little room with a view of part of Atlanta’s skyline. The room is a Staywell Room. I’m sure there’s a trademark or something, but I’m not sure how to do that on WordPress so imagine a little TM where it is supposed to be. The features of the Staywell room are not that important to me, but the upgrade was complementary due to a fair amount of travel hacking over the last several years. They have a filter on my shower to remove the chlorine from the water. I assume that this is the same chlorine that the city adds to the water, but I’m not sure. Maybe they add it on location, just to take it out of the water in their premium rooms. I have an air purifier in the room. I have an aromatherapy machine in the room. The lights have settings like relax, energize, and circadian. I’m pretty sure if I were a twenty something that I would find all of this tech pretty awesome. They do have tech in the room for me too. They have an iron and ironing board. I’ve already ironed my clothes for tomorrow. They have a coffee maker with my name (figuratively) on it. There’s a tiny fridge that now has some cheese residing in it, just in case I get hungry in the night.
I’m excited to be here. This is the first Academy I’ve been to since graduation that 1) I’m not paying the entire bill and 2) I’m not looking for a job. I can focus on the job at hand. I’ve got so many sessions on my calendar. I’m focusing on stuff that will make me better at my job. I’m attending some sessions on writing, some on entrepreneurial ecosystems, and some paper sessions in the areas that I’m researching. Tomorrow starts out at 8:00, and as I write this, it’s really today, so I’m going to bring this to a close and try to get some rest. I wonder if there is a light setting for dark.
Cleaning Out My Comments
Almost every comment I get is spam. Some of them are hilarious. Here are four at more or less random, because it amuses me to put them up.
It’s perfect time to make some plans for the future and it’s time to be happy.
I’ve read this post and if I could I want to counsel you
few attention-grabbing issues or tips. Perhaps you can write next articles
referring to this article. I wish to read more issues approximately
I’ve been browsing on-line greater than 3
hours lately, but I never discovered any fascinating article like yours.
It’s pretty worth sufficient for me. In my opinion, if
all website owners and bloggers made good content material as you did, the net might be
much more useful than ever before.
Comment Four (On a post that said only “I have a bunch of wonderful, attentive students” on another website I use)
As you will inevitably learn on your path to losing weight, effective weight loss is not only about watching what you eat, but much more about changing your lifestyle. This means changing your habits and how you approach your day-to-day life. Read this information to help you throughout the process.
This morning I was listening to the radio on the way to work instead of listening to a podcast, which has been my habit of late. Commercials came on, and as they always do they skirted the edge of the truth, and as they always do they made me angry. I’m not sure how or when I became aware of the manipulative tactics in commercials. But as I’ve grown older I’ve gotten more and more angry when I hear them, and the more likely I believe they are to work, the angrier they make me. I’m pretty sure I could do an entire series on the lack of truth in commercials, but today I want to focus on just one thing. I want to examine the idea of the middleman.
What is a middleman? Simply, a middleman is someone who is not at the beginning or the end of the process that gets you your goods and services. This is a really broad definition, but I believe it’s an accurate one, especially when so many different commercials in so many different industries claim to save you money by cutting out the aforementioned middleman. So, in one sense, everyone between you and your Cheerios that’s not a farmer is a middleman. Everyone that’s not swinging a pick in a diamond mine that gets a piece of your two months salary is a middleman. And I don’t know about Kellogg’s or Walmart but companies like “The Shane Company” claim to cut out these middlemen and bring their diamonds directly to you. Don’t read this as a screed against The Shane Company or even the diamond industry (although it seems highly corrupt, and stupid). This could just as easily apply to mattresses, vitamins, or computers.
Ok, so in the diamond industry, someone has to dig up the diamonds. (Working backwards from there we could look at equipment manufacturers, mining supplies, logistics companies and so on, but we’ll just begin, for simplicity’s sake at the digging in the dirt.) Ok, now the diamond is dug up. It must be cleaned off, graded, sorted, sold to someone who have it cut and shaped into what we think of as a diamond, and put into a setting. Once all that is done you need to be made aware that this lump of coal, for which you’re about to strike one and possibly two horrible bargains, exists. Then the bargain must be struck and the glittering symbol of your eternal love must be delivered unto your trembling fingers, which fortunately thanks to the rather severe lightening of your wallet, you’ll have no trouble carrying around for another two months while you wait for the ‘perfect moment’ in which to give it away. But I digress, back to the story at hand. Which part of that, exactly, can we do without? If it doesn’t get dug up, nothing else happens. The same with each step in the process.Someone has to cut it. Someone has to decide how much it’s worth. It must find its way to wherever you are. It must be available for inspection and purchase. It must be set in a ring. You must, must, be made aware that it exists, and that it is right and proper that you should ever so briefly own it so that you may use it as a magpie uses a bright bauble, to attract a mate to your nest.
The point is, that no link in this chain is unnecessary. No one can be ‘cut out.’ Why would you want to anyway? Well, the reason, at least the way it’s presented in commercial land, is cost. “We cut out the middleman to save you money.” Ok. without going deeply into how products are priced, and a TON of issues surrounding that, how could cutting out the middleman possibly save money? Every job that was done before still needs to be done. (Try buying your Cheerios from the farmer. Let me know how that works for you.) Presumably, in the modern world we’re going to pay people for each of those jobs, we’re going to have capital outlay for the tools, equipment, locations, and management associated with those jobs. We’re going to want to make a profit for our owners or shareholders on each part of the process, because after all, each part requires an investment of time, talent, and treasure, and those are the things that profit pays for.
So when we say we ‘cut out’ the middleman, that’s not really what we mean at all. What we really mean is that we internalize the middleman. If the job needs to be done, and it’s not done by an outside company (middleman) we must be doing it ourselves. Whether personally or hiring employees, someone is doing that job. We’re responsible for their salary, benefits & our share of their taxes. We’re providing a workplace & their equipment. Assuming our investments are just as important as other people’s we’re likely to pay ourselves a reasonable return on that investment. So all we’ve done is become the middleman ourselves. We’ve eliminated nothing.
That’s ok, and there are some savings to be squeezed out of this idea. It’s called vertical integration. The idea behind it is that if you control more of the process, from start to finish, you can capture more value from whatever it is and pass a portion of those savings on to your customers. (Of course you do this not to be nice, but because by passing some savings on you may increase the total spend of the customer and maximize your own profits, but that’s a topic for another day.) Think about your car for a minute. The company that makes it, no matter what company makes it does some things themselves, but has outside companies that do some things as well. Almost all companies do their own final assembly. Some may build their own airbags but most, as you can probably figure out from news about product recalls, buy them from a couple companies that specialize in building airbags. They either make or buy every component in the car because that is the decision that maximizes their profit. And that’s good. It makes for a very efficient process. It just doesn’t make for a good commercial. Or maybe it does. The savings here come from vertical integration AND the fact that it was a high markup business with pretty severe barriers to entry. But that is a story for another day.
When starting a business it is often difficult to get other people and businesses to take you seriously. Customers may be hesitant to buy from you. Suppliers may even be hesitant to sell to you and they certainly won’t line up to give you credit. Speaking of credit, a new business often has a better chance of finding gold at the end of a rainbow than they have of getting a loan or a line of credit at a bank. Even getting a business checking account is harder than it used to be. With that in mind I’ve collected some information to help you with starting a business that the public, suppliers, creditors, and even the government perceives as legitimate.
It turns out that convincing the government that you are for real is pretty easy, and convincing them helps to convince others, so we’ll start there. It may be surprising that the government is the easiest target but it shouldn’t be. It is in their best interest for your endeavor to be a business. They will get to collect revenue off of the work you do or the products you sell, so they want to make the process of you becoming a business as easy as possible. To convince the government you’re a business you just have to tell them you’re a business. Well, often you have to pay them some money too, but really that’s about it. But you have to tell them in a way they’ll understand. What they will want to know first is what kind of business you are. If you are going to be a corporation, limited liability company, or partnership, there are legal forms you file with the government, pay some fees, and poof, you’re a real business. (There are all sorts of long term consequences to this decision, so I strongly recommend hiring an attorney to help you make the decision and file the paperwork.) If you don’t want to be one of the more formal types of businesses you can elect to be a ‘sole proprietor.’ This is actually the simplest and most common structure used to start a business according to the Small Business Association. Becoming a sole proprietor happens differently in different states. Some are as simple as saying “I’m a sole proprietor” and hanging up a sign, or the modern day equivalent, which is usually making and publishing a web site. In other states you may need to pay a small fee and register with some governmental agency. This registration may be required to open a business bank account. When you are registering you should go ahead and get an employer identification number (EIN), especially if you think you might someday have employees. It’s an additional ‘signal’ that you’re legit. You can get an EIN on line at IRS.Gov, specifically here.
Next, let’s convince the banks that you’re in business. They’re still probably not lending you any money but having a business bank account separate from your personal one makes record keeping easier, and those long checks are pretty cool, especially if you get them in a book, three to a page. You can sit at home with the book open in front of you, wearing a translucent green visor and just soak in the ‘in business’ feeling. OK, when you go in to the bank ask them to talk to a business bank representative. That person will tell you what they offer and how much it will cost you. You will need a deposit to open the account. A check or transfer from your personal account is fine. If he or she looks at you funny (which they won’t) just say you’re taking an equity position in the new venture. That’ll teach ’em. They will ask you your business name, and will most likely want proof that it’s legit. This is where you show them the papers you paid the attorney (out of your personal account — damn!) for. The business name will go on the account. You will be the one signing the checks (with your own name). At this time they may ask you for a TIN, or taxpayer identification number. If you formed a company you’ll have one. If you got an EIN you’ll be able to use that. If you don’t have either of those things then you can just use your social security number. They may want to see your card, but no one has ever asked me. After that you should be set up. Handle this account with care. This is the beginning of establishing business credit.
Now, on to suppliers. Regardless of what business you’re in there will be things your business must purchase. Cleaning supplies, web hosting, products for resale, packing peanuts, transcontinental business class flights, something. Some of the things you may wish to buy may not be for sale to the general public. You may be entitled to different pricing if you’re a business. Often businesses receive credit terms for things they purchase. Things that you’re going to buy and then sell later at retail will be sold to you tax exempt. Let’s take each issue in turn.
To acquire things that are not available to the general public the company selling to you must agree that you ‘should’ have access to them. For instance, in some states it is illegal for most people to buy dynamite, but if you’re a building demolitions company you would be allowed to buy it. Often there is a license or certification process that goes along with this kind of product. If that is the case, seek out the licensing agency, complete the requirements and you’re in. Bonus, it makes you look more official. Sometimes there’s not an ‘official’ gatekeeper or policy, but some people just aren’t allowed access. For instance, there is no law saying you can’t own lock picking tools in most states. As a matter of fact you can buy them from many sources online. However, if you were to attempt to purchase them from a legitimate locksmith supplier it is unlikely they would sell to you unless they could independently verify that you were a locksmith. In the past, having an ad in the local telephone book was considered proof in that industry, but with the rise of internet advertising and the demise of the phone book you might have to prove you’re a locksmith some other way. Joining a trade association often serves as ‘proof’ in these situations, and is often a good idea as well. I’ve even had to answer questions that supposedly only a locksmith would know, kind of like a secret handshake.
Special pricing is usually a matter of buying in quantity. Sometimes that is making a large purchase, or sometimes it’s making a small purchase, and making sure that the company you’re buying from knows that you intend to make regular, ongoing purchases. The discount you’re receiving is for bulk, or sometimes, for doing the work of selling the product to the retail customer. The easiest way to get this is to just buy a lot all at once. The next best way is to become a regular customer. After you’ve been ordering for a while, inquire about discounted pricing. As with all negotiations, your results will vary by industry standards, whom you’re working with, and your negotiation skills.
Business credit is typically granted as business relationship are developed between your business and your supplier. You will almost certainly start out on a cash payment basis. Over time as you order and pay good will is developed. My suggestion for developing business credit is to do it early. The process I use is to fill out an application for credit with whatever company and then place a couple orders for cash while they’re processing it. Once they’ve received a few hundred dollars from me in business it’s easier for them to grant me a small credit line. I then charge something and pay it off right away. The purposes for this kind of credit, at this stage of your company’s development are to (1) build more credit, and (2) to facilitate your business’s operations. You’re not trying to generate interest free inventory loans at this stage. You’re just trying to establish that you’re a legitimate company and make doing business easier.
The last issue is avoiding paying sales tax on something you’re going to resell. If you’re going to sell products, and you don’t live in one of the five remaining states without a sales tax, you’re going to also collect sales tax and pass it on to the government. In most states if you’re going to be collecting that tax on retail sales, you don’t need to pay it on the wholesale amount you pay for whatever it is you’re reselling. The process I’ve been through in three states requires you to get a Sales Tax ID number. Remember 1200 words ago when we were dealing with the government? You should have gotten a sales tax ID number then. Sorry. So, get that number using your state’s process to do so, then give that number to whomever you’re buying whatever from. Now, this is important. It will be tempting to not pay sales tax on things that you are just going to use in your home and/or your business. DON’T DO THIS. It is a crime, and governmental types get more bent out of shape over this than they do for little things like arson, murder, or bigamy. Only kidding, but if you want to bring the governmental hammer down on your business just mess with their revenue stream. So, get the number and use it properly. With great power comes great responsibility.
Finally, everyone thinks you’re legit but your customers. How do you signal to them that you’re the real deal and not some random fly by night quasi-organized scam artist? Well, first, all this stuff you’ve already done helps. For example, when you sell something that people are accustomed to paying sales tax on and you don’t charge it that will send up a red flag. But you’ve covered that. If you have a retail location you can hang your business license. If you have a website, make sure that it’s professional and error free. This means that if you have a product or service offering you need a policies page. All the cool (i.e. real) companies have them. Local businesses have local numbers. Sure, this is easy to fake and lots of fake businesses have local numbers too. And sure, everyone can call everywhere now so what good is a local number. A local number is a signal. People consciously and subconsciously process signals like this to make decisions. Take credit cards. All of them. Online and off. It’s a hassle. The credit card company takes part of your money. Suck it up. Your bank can help with processing, or you can just use Square or something similar. From day one, manage your online reputation. That’s right, I’m giving you permission to Google yourself regularly, even daily if necessary. You will have bad things come up on the internet. Deal with them, then move on.
As soon as you can, join the Chamber of Commerce. Seriously, join the chamber. After you’ve been in business a year, register with the Better Business Bureau. Do things that you see other businesses in your industry and area doing. When you have the funds, engage in local marketing such as sponsoring a baseball team or whatever. Legitimate businesses invest in the communities that support them.
That’s about it. Well, not really. There are tons of things, but that’s all you’re getting today. This list should be good enough to get you started. If you need specific consultation, feel free to reach out to me. I’d love to help.
Hey all, I’m a veteran of multiple Startup Weekends and several pitch competitions. Pitching for Startup Weekend is a little different than your standard elevator pitch. With that in mind, the good people at The Container Yard have asked me to put together some tips on pitching for the this particular event. Since many of you are likely to need that info at some time I’ve decided to share it here as well. These notes were prepared from personal experience and several websites about elevator pitches and Startup Weekend. Nothing on here is proprietary, but I didn’t make the entire post up from whole cloth either. You know how writing is on the web these days….
Pitching for Startup Weekend
The purpose of the pitch at startup weekend is to recruit people to your team. With that in mind, one thing you can do is begin the recruiting process the second you walk in the door, or even before. Talk to people during the meet and greet. Share ideas. Try to get people excited about your idea, or if you find an idea you’re more excited about than your own, plan to join their team. Having a fantastic Startup Weekend is not all about getting your idea selected. It’s about learning. It’s about creating something new, whether or not the original idea was yours. This is a low risk learning experience, that just might turn into a new career or side hustle. But the things you learn there will be applicable to other businesses and projects for the rest of your life. That doesn’t mean you shouldn’t give the best presentation you can though, so here are some thoughts.
1. You get 60 seconds. They WILL cut you off.
2. This is a popularity contest.
a. Be likable – smile
b. Be friendly – SMILE
c. Be passionate – If you have trouble being passionate, be excited. If you’re nervous, that’s good. Just go somewhere quiet (it helps if you find a mirror) jump up, land on the balls of your feet and say “boy I’m excited, boy I’m excited, BOY I’M EXCITED!
d. Engage other people going to startup weekend in advance. Don’t ask them to vote for you, but when you find people that will be there let them know you’re going to be there too and you’re excited about sharing ideas and working on something together.
e. Only use humor if you’re self-confident enough to pull it off. If it’s forced you’ll sound like a dork.
3. This is also a performance.
a. Move. If something is huge, make big arm motions. If it’s frustrating, make a frustrated face and shake your fist. If something makes you happy, SMILE!
b. Modulate your voice. Don’t just talk. If there is a reason to be quiet or loud, be quiet or loud.
c. Consider your tone of voice in addition to volume and physical movement.
4. Here’s a sample pitch formula
a. Introduction 10 seconds –This should introduce you, your idea, and contain a title. The title is super important, there will be voting later and they can’t vote for you if they don’t remember who you are. You may want to invite people to join you here.
b. Problem 15-20 seconds – What problem are you trying to solve and for whom? Be as specific as you can in the time allotted.
c. Vision 20 seconds – This is what the world looks like for the customer with the problem solved. What makes your solution different or better than others?
d. Requirements 10 seconds – What do you need in terms of people/knowledge/skills/
e. If you have time, and you probably shouldn’t, re-invite people to join your team, and restate the name of the idea.
5. Practice before the event. You will suck. Then you will get better. Then you will get bored. Then you will get good.
6. A good idea is to write it down and memorize it.
7. When writing and practicing your elevator pitch will change. This is good. You’ll be putting what you’re saying into your natural voice and improving your presentation.
8. My personal preference is no notes. Notes detract from your passion. It’s really hard to passionately read a note card.
It was, and still is, my intention to write here regularly. And so many things have happened recently that deserve mention, but I’ve careened from event to event with little time for reflection, let alone time to organize and explicate my thoughts. With that in mind I’m going to give several subjects a short treatment here today and reserve the right to write about each in more detail later should I get some free time. It was October when I last published. Ouch. That’s bad, even for me. I will attempt to do better.
First, we had a successful elevator pitch competition this fall. We loaded up students on duck boats, drove them out into the Mobile Bay and let them give their elevator pitches to judges. We gave away a few thousand dollars and the students had a great time. When I was hired at the University of South Alabama that is what I was hired to do. My previous experience at the University of Cincinnati running their pitch competition was a tremendous help in getting this one off the ground. Because I had been through it before I wasn’t nearly as nervous as the other professors. Having said that there is no way that the event would have been nearly as successful as it was without the guidance and support from my partners in the Melton Center for Entrepreneurship and Innovation. Jennifer and Don were amazing. Our admin Rachel was amazing. The students that helped, Brooke and Henry especially, were amazing. I am grateful to have found a university with so many caring, competent people. If you’re interested in the competition, an article including results can be found here and more information on the competition itself can be found here.
Second, The Roundhouse, a co-working space, angel investment aggregator, and accelerator mentioned in an earlier post, has folded. It appears that some person or person at the facility was less than honest, less than competent, or both. I feel bad for the budding businesses that were harmed by this, and I have reached out to the ones I had a personal interaction with to help plug them into other resources. This serves as a reminder to me, and should serve as a lesson to everyone to do your homework before entering into a relationship with any business or person. To be honest, I’m not sure the community needed The Roundhouse. This community does need actual angel investors though. So if you’ve got some cash and don’t mind taking a little risk let me know.
Third, the spring competition is underway. It is called the Coastal Venture Competition. You can find information about it here. I’m really excited for this competition and much more nervous. I’ve never run a New Venture Competition before. I think we’ve come up with a way to get a great competition out of our students and still meet them ‘where they are at’ currently. The general idea is that they will submit an entrance video, which in essence can be a video taped elevator pitch or commercial, and then over the course of this semester work with me, other faculty, and our mentor network to develop a slide presentation worthy of presentation in front of a live audience of students, faculty, judges, and potential investors. We are not requiring a business plan, but supporting information will be taken into account to determine who gets to present. We’re giving away $12,000 to the top 8 places, so I shouldn’t be worried about getting eight quality ideas, but I still am.
Fourth, we have four local breweries that are all seeking and acquiring funds to expand. It’s odd that they’re all in the same industry and they’re all seeking funds in different ways. As I understand it one is selling revenue shares, one is self funding, one is taking a bank loan and one is doing equity based crowdfunding. It seems like a strange confluence of events and I’m looking for a way to get a paper out of it. If you have any ideas let me know. Speaking of writing, my tenure clock has started (for the first time ever) and I’m planning on writing all summer long. By the time August rolls around my goal is to have three papers ready for USASBE submission, two abstracts ready to go for Babson, two abstracts for APEE (why write the paper if the abstract isn’t accepted) and a paper for the Southern Management Association. I also need to have a good start on AOM submissions. I believe that they allow three, so seven papers and four abstracts. That’s a lot of writing for such a short period of time, but I’m stealing time where I can to get a head start on it. All that to say if you need data analysis, or if you’re working on something cool in the general area of entrepreneurship and you’d like to write with me over the summer I’ll be available.
Fifth, It is Mardi Gras season down here. These people take their holiday seriously. It has been amazing. There are multiple parades every day. There are more parades next weekend leading up to Fat Tuesday than Muncie Indiana (my hometown) sees in a year. And the small ones are better than the big ones up there. There are many, many social events during the season. My wife and I have been invited to one this year. I imagine as we get to know more people we’ll be invited to more in the future. I look forward to that for many reasons, not the least of which is because I’ll get to buy her some nice evening wear and she can’t tell me no. I’ll have to buy myself one to three tuxedos, depending on what events we go to. Full tuxes with tails are a thing down here, and they’re required for certain balls. I’ve been to several black tie affairs in my life, but when this happens it will be the first time I’ve been to an event that requires tails. Fortunately for me , the event we’re going to this year just requires a suit, which I already have.
As the man says, ‘that’s the news from Lake Woebegone.’ I’d like to get into some more depth on a few of these things, and maybe I will later. For the time being though, this should serve as a quick catch up of life and business for me in Mobile Alabama.
Over the past couple weeks I’ve been learning how to solve the Rubik’s Cube. It’s a puzzle that always bothered me as a kid. Not because I couldn’t solve it (I couldn’t) but because other kids could solve it and I couldn’t. That is really petty, I know. But it’s true. I could beat those kids in chess, I scored higher on every test (and got lower grades in almost every class, but I didn’t care about that) and was a top performer in pretty much every academic contest you can think of. But I couldn’t solve the cube. I bought a book on how to solve it. That got me to where I could solve one side and the edges on that side, but I couldn’t get any farther. I learned to take it apart and put it back together solved. (That should have told me something about myself. I’m not sure what…) I didn’t peel the stickers off, you could detect that, but if I turned the top side 45 degrees I could pop the corner out and disassemble and reassemble it and no one could tell that I ‘cheated.’ Eventually something else attracted my attention and I moved on. Thinking about it, knowing that all these other people could do it made me feel dumb, and I didn’t like that.
Thirty years later, I see a man doing magic on Penn & Teller’s Fool Us with a Rubik’s Cube. Six dollars later Amazon delivered a ‘speed cube,’ which turns easier and has colored plastic sides instead of stickers to my office. I’m not sure if it comes apart the same way, because I can solve it pretty easily now. It turns out that all the techniques in the cube solving book I studied as a teenager can be distilled into half a dozen fairly short algorithms (in this case directions for telling you which side to turn and whether to turn it clockwise or counter clockwise).
If I thought I felt dumb before I was mistaken. Knowing that there’s a trick to something that I don’t know doesn’t really bother me. I’ve seen Penn & Teller perform the Bullet Catch trick many, many times. I have no idea how they do it. I have theories from the ridiculous (very lightly charged loads that really fire across the stage, break glass during the flight, and end up where they can be easily palmed (even I’m not crazy enough to think that they’re actually catching the bullets in their teeth)) to the highly technical (they have cameras and experts making identical bullets when they secret on to the stage somehow, or a device in their mouth that copies or 3d prints the bullets somehow), to the mundane (plants in the audience, which I’m confident is not how they really do it). I know there is a trick to it, and that’s why I can’t figure it out. But with the cube I didn’t even know there was a trick. When someone solved a Rubik’s Cube in front of me I thought I was watching a wizard perform magic, but I was watching a magician perform illusion. I didn’t even know that I didn’t know.
This is exactly how Steven Brundage, the cube guy on Fool Us actually fooled Penn & Teller. What he did wasn’t illusion, it was artistry. It was artistry developed by deliberate practice. He learned to do something so well, that the performance of it looked like magic, even to trained magicians.
I will never (probably) be able to solve a cube as fast as Brundage, nor will I ever (probably) be able to build a business like Gates, or Jobs, or Branson. But I know some things about entrepreneurship, and cube solving that I did not know before.
First, both are skills, with all that encompasses. They can be learned, and they can be taught. Thinking otherwise just means that you don’t fully understand the algorithms involved yet.
Second, neither is easy, even if you know the ‘tricks.’ Especially at first. I’m two weeks into my cube training, and I still have the algorithms by my side to look over at. I’ve also started, or assisted in the startup of a great many businesses. I still use a ton of tools (tricks) to make sure that the business starts off properly.
Third, nothing happens without thought and action, working together.
Fourth, some people will get it easier than others. That does not mean that those others are incapable of getting it. It just means it will take them longer. If you’re trying to understand entrepreneurship, or trying to be an entrepreneur, do not despair. You can, with help, figure this out.
Fifth, as skills, the more you do it, the better you will do it, but only if you practice deliberately. At some point I will address deliberate practice here, but in the meantime, look up Anders Ericsson’s work on the subject. (If you do that you’ll have no need of my thoughts about it.)
Sixth, even though I’ve used the word ‘trick’ several times, it’s not really a trick, or a set of tricks. It’s a set of techniques that you use in specific situations. You learn the techniques and you learn when to apply them. With a Rubik’s Cube, it’s a sequence of clockwise and counter clockwise turns. With a business it is market research, product validation, value proposition iteration, or whatever specific tool is needed at a given place and time.
Lastly, sometimes businesses (and cubes) can’t be ‘solved.’ They just don’t work. For a cube, this means probably it was taken apart and put back together incorrectly. For a business, there are many, many reasons this might be so, but they all boil down to that business not having the proper parts in the proper places. That might mean that that particular business will never work. It might mean that parts need to be added, removed, or moved around. But what it does not mean is that you are incapable of being an entrepreneur. It just means that you plus that business, in that time and place don’t work. Failure is an event, not a vocation.
On the occasion of visiting the Roundhouse, labeled online as a ‘startup space’ and in a Journal of Organization Design case study as a ‘startup factory’, I set out to clarify my personal knowledge of some of the various components of an entrepreneurial ecosystem. I was seeking definitions and norms for physical locations that, at least theoretically, assist entrepreneurs in launching their businesses. I focused on co-working spaces, incubators, and accelerators, as they appear to be by far the most common combinations of physical structures and entrepreneurship specific assistance. I conclude with a brief discussion of Roundhouse specifically.
A co-working space is a shared environment that entrepreneurs and business people can use on an ad hoc or contractual basis. Often there are shared resources such as internet access, tables, computers, coffee machines, meeting rooms, and so on. Usually, there is some sort of fee for accessing the space, ranging (rarely) from a ‘per use’ basis, to ongoing monthly fees, to annual contracts. There is a growing trend to offer co-working spaces for free, at least in major markets. Before this was called co-working, it was called renting office space. There was a company (probably still is) Called Regus that would rent you space by the day to by the year with shared secretarial, fax, internet, boardrooms, and so on. And people used libraries and coffee shops, with varying levels of success. They still do.
An incubator is a much more sophisticated bundle of resources. The purpose of a business incubator is to help nascent and early stage businesses develop. To do this they offer a suite of services. Incubators vary in the ‘mix’ of products and services offered. Some commonly offered services are high speed internet, help with business basics, introductions to investors and business experts, preferential access to higher education, and intellectual property advice. Sometimes also offered are market research, legal and financial experts, comprehensive business training programs, and access to capital through preferential loans, angel investors, and venture capital. Incubators typically don’t have a timeline for a business’s exit, or if they do it is measured in years rather than months. Incubators are most often grant funded and/or not for profit. Their goals are usually socioeconomic in nature, things like job creation, technology commercialization, or diversifying the local economy. Oh, and they want to help the company succeed too.
Everyone wants to be an accelerator. But they’re not. Incubators and accelerators both prepare companies for growth, and they both provide guidance and mentorship. But accelerators operate on a faster time table, and often put significant amounts of money into the mix. In exchange for this money and the services offered, the accelerator takes a piece of the company. The numbers I found indicate that 6-7% is about average, for cash and prizes totaling $150 thousand to $250 thousand. Most, but not all accelerators have a ‘standard deal’ that all companies must agree to to be considered for admission. An accelerator program is typically an intense 3 to 6-month learning period, during which, and immediately following there is a great deal of very active mentoring going on. In addition to the mentoring, a comprehensive suite of services, similar to incubators, is offered, with specifics varying by location.
The Round House
Based on their website, the Round House offers all of the above in Opalika, and now in Mobile Alabama. From their website it looks like they offered a traditional accelerator in 2015 in partnership with John McAfee and others. However, I don’t see any current evidence of a typical accelerator format. In any event, a visit to their space in Mobile and a talk with Kyle and Robin left me convinced that they were something new. They have co-working space. It is very nice space. If I were in the market for co-working space it would definitely be on my short list. Kyle didn’t seem to care for the incubator model however. He indicated that he wanted to move much faster with the companies he chooses to mentor. In general, I view that as a good thing. Fail fast, fail often, fail forward and all that. And if you’re going to succeed, why not now? Why drag it out? That all makes sense. And as I’ve come to understand the rest of the model, it makes even more sense.
What this company seems to do, at least some of the time, is make what can only be described as angel investments in nascent and young companies. Instead of forking over a bunch of cash however, they provide all the same services that an incubator or an accelerator would provide, plus additional services, such as hiring programmers to finish your software. I can see the virtue in this. Often, a fledgling entrepreneur doesn’t really know what to do with the money they get. Without going through their process myself, or without analyzing the numbers for the businesses they have ‘graduated’ I’m not sure if they’re a good deal or not. At first blush I believe that they are taking a larger equity stake and providing similar services to companies than accelerators do. That being said, I imagine that most of the companies that they take under management (or whatever) wouldn’t be able to get into an accelerator in the first place.
So really, it’s the same old story. If a company could qualify for Y Combinator, or The Brandery, or Amplify, they’d be in one of those types of startup accelerators. Since they can’t, they are coming to a lower tier of service provider. Let me be clear, when I say lower tier, I do not mean that Round House is not as good as Y Combinator. (That’s a bad example. Probably no accelerator is as good as Y Combinator, but you get my point.) All I mean is that their money seems more expensive than other money. It’s similar to someone with a higher credit rating getting a better interest rate. The better ideas get better terms. But if you’re in Mobile or in Opalika and you’re looking for access to capital and mentoring, do your due diligence and check out Round House. It might be a good fit.