Consumers create jobs

Nick Hanauer's Ted presentation that explains it all.


In a capitalist economy, the true job creators are consumers, the middle class.  And taxing the rich to make investments that grow the middle class, is the single smartest thing we can do for the middle class, the poor and the rich.


hat tip Alltop


Jim Tankersley article

the pay what you want model

Jim Slater provides a report card on Panera's experiment

Not everyone is so generous, but that's OK with Brooke Porter, who manages the restaurant. She knows that times are still hard for many. She has seen families down on their luck come in to celebrate birthdays with a meal they normally couldn't afford. A teacher laid off after 25 years stops by on his way to job fairs. He can't afford to pay much but makes up for it by volunteering at the store.

"If a man in a suit and tie leaves a dollar for a $10 meal, that's fine," Porter said. "We don't know his story."

Only a few take advantage of the system - "lunch on Uncle Ron" as Shaich calls it. He still fumes over watching three college kids pay $3 for $40 worth of food. Generally, peer pressure prevents that sort of behavior, he said.

"It's like parking in a handicapped spot," Shaich said.

Overall, the cafe performs at about 80 percent of retail and brings in revenue of about $100,000 a month. That's enough to generate $3,000 to $4,000 a month above costs, money being used for a job training program for at-risk youths.

"We took some kids that typically wouldn't be employable, didn't know how to work in society," Shaich said. "We gave them a combination of job training and life skills." The first three graduates of the program are starting jobs at other Panera restaurants.

Shaich admitted he didn't know how the pay-what-you-want experiment would pan out. He said the success should send a message to other businesses to put faith in humanity.

"The lesson here is most people are fundamentally good," Shaich said. "People step up and they do the right thing."

Life is a game of inches

Comfort with uncertainty

Tim explains why comfort with uncertainty is the key 

I’m thinking that the single most important trait of the true entrepreneur is establishing a good healthy long-term relationship with uncertainty. As an entrepreneur, you don’t know for sure, but you act. You program, you contract, you create, you hire, you borrow, you spend, and you act, all like the explorer setting forth into unknown territory. 

Planning helps. Research helps. But you have to be able to live with the educated guess.

While you were waiting.

Seth shares these thoughts

The economy will be going gangbusters

Your knowledge will reach critical mass

Your family situation will be stable

The competition will stop innovating

While others were hiding last year, new products were launched, new subscriptions were sold and new companies came into being. While they were laying low, websites got new traffic, organizations grew, and contracts were signed. While they were stuck, money was being lent, star employees were hired and trust was built.

Most of all, art got created.

Street smart v book smart

Scoot Shane shares this little ditty,

As you might expect, more intelligent entrepreneurs do better at running their own businesses than less intelligent ones. In a different article, published a year after the one mentioned above, de Wit and Winden found that the self-employed with higher IQs tended to earn more money than those with lower IQs. And the recent working paper by Djankov, Qian, Roland and Zhuravskaya found that “failed entrepreneurs are less smart” than successful ones.

So what do these studies tell us? Maybe they are little more than a statistical curiosity or maybe they hint at a pattern.

Subject to the caveat that we have only handful of studies and all of them are based on correlations, here’s the pattern suggested by the data: The average person who works for herself is more intelligent than the average person who works for others, but (as my earlier column pointed out) she doesn’t do as well in school.

Reinvent yourself.

Megan Conniff shares Aaron Kennedy's advice,

• Love, love, love your restaurant idea … all aspects of it: menu, design, culture, location(s). You’ll need this passion to get you through the difficult times emotionally and physically.
• Quickly gather feedback directly from customers and staff members to adapt your concept; thoughtfully migrate it to optimal, to the bull’s-eye.
• Keep it fresh. Continue to reinvent yourself within your unique brand/culture. You must stand for something that’s also important to your customers. Stay true to that, but continue to get better and better at it.

The spark of passion requires work.

Chrissy Scivicque shares the work required to ignite the passion.

When people are passionate, we often say they have a “fire in the belly” or that they’re “firing on all cylinders.” Fire is full of energy and heat. It’s what we all want to feel inside—a sense of passion for what we do and what we stand for.

...

Passion is what drives us forward in life. Without it, we feel empty and cold. With it, we feel energized and full of fire. Too often, we make the mistake of thinking that passion just appears. For a lucky few, it does. For the rest of us, we have to create sparks and fan them, gently and over time, until they burst into powerful, glorious flames.

A gathering of angel investors

Rieva Lesonsky explains the new angel investing requirements

Under the proposed changes, the minimum annual income for an accredited investor would have increased from $200,000 to $450,000, and minimum assets would have increased from $1 million to $2.3 million. Experts estimated the changes would have eliminated between half and two-thirds of current angel investors from being able to invest in small businesses.

In May, a bipartisan amendment sponsored by Dodd and other senators restored the definition of “Accredited Investor” to the former income and asset levels, with just one change: a primary residence can no longer be listed as an asset. The 120-day waiting period was removed; instead, the amendment directs the SEC to issue rules within one year for disqualifying offerings and securities sales involving “bad actors” (people with a record of violating certain federal or state laws).

The necessary traits to thrive

Courtney Rubin outlines the findings of a new study

Top of the list for successful entrepreneurs is the ability to collaborate. Those who can delegate, build strong relationships with their management teams, employees, and others are more likely to click with customers.

The other five traits frequently found in flourishing small business owners:

• Being self fulfilled. Good small business owners put a high price on the fulfilment their companies provide them, relish being their own boss, and enjoy being in control of their personal income. They value "doing something for a living that I love to do," "being able to decide how much money I make," and "being able to have the satisfaction of creating something of value."

• Future-focused. Small business owners who thrive are good at both short- and long-term planning. They're as likely to have a well thought-out plan for the day-to-day running of the business as a road map for how to run the business for years.

• Curious. Good entrepreneurs are always reading and asking questions. They want to learn everything from why a particular business failed to how to find, motivate, and keep good employees.

• Tech-savvy. Perhaps not surprisingly, the best small business owners invest time and money on their company's website and are likely to "rely a great deal on technology to help make our business more effective and efficient." (For more on why social media is worth a company's time, check out this guide.)

• Action oriented. Successful founders are proactive and always "differentiating ourselves from our competitors," survey respondents said. They were less worried than other small business owners about the state of the economy, and more likely to look at adversity as "a kick in the rear to help you move forward."

Understand the river

When I put my hand in the flowing river, I am connecting with the last of what has been and the first of what is yet to come"

Charles Lee explains his investment style to .

For Lee, it's not a stretch to draw lessons about investment management from fly fishing: "When you go to the river, you sit there first and just watch. You see many things you hadn't seen before -- dragonflies are floating or damselflies are flying, the way the wind and sun move. Then you hear sounds you never heard before. Then you notice how the fish are doing. What are they eating? Where are they going? The goal is not to say how many fish you catch. The goal is to know and understand the river. That's the way I look at investing and studying markets. If you understand the river, you will catch a lot of fish."

Operating a business has a lot to do with the flows of a river

Interrogative or declarative?

Dan Pink examines a declarative question and its corresponding results;

three social scientists explored the differences between what they call "declarative" self-talk (I will fix it!) and "interrogative" self-talk (Can I fix it?). They began by presenting a group of participants with some anagrams to solve (for example, rearranging the letters in "sauce" to spell "cause".) But before the participants tackled the problem, the researchers asked one half of them to take a minute to ask themselves whether they would complete the task – and the other half to tell themselves that they would complete the task.

The results?

The self-questioning group solved significantly more anagrams than the self-affirming group.

Doubt is the reason that lead did not become gold overnight in the Middle Ages and it still works its ugly magic today.

Delight the audience

Seth advises to forget about the pixie dust and do the hard work.

delight the audience you already have, amaze the customers you can already reach, dazzle the small investors who already trust you enough to listen to you. Take the permission you have and work your way up. Leaps look good in the movies, but in fact, success is mostly about finding a path and walking it one step at a time.

Let them read Linchpin.

Seth rails against the compliance mentality,

We make a difference to other people when we give gifts to them, when we bring emotional labor to the table and do work that matters. It's hard for me to imagine that this is only available to a few. Yes, the cards are unfairly stacked against too many people. Yes, there's too many barriers and not enough support. But no, your ability to create and contribute isn't determined at birth. It's a choice.

Don't cherry pick

"Observe without judgment"

One of the most difficult self imposed obstacles for entrepreneurs to tackle is the urge to cherry pick. The urge to ignore some customers and pay really special attention to others based on a subjective metric. You do not know what anyone is capable of bringing to a relationship. Endeavor not lose a fantastic opportunity because you prejudge. Everyone has a gift, everyone is relevant, take the time to learn about them.

Long term stress

Seth shares this; The long term stress is starting to become prevalent in far too many individuals and organizations. The natural progression without some circuit breaker is to reframe the discussion entirely.

More and more, I'm seeing bus company behavior from previously great organizations. It's a symptom of companies (and cultures) under long-term stress. These are all traits that occur when you allow standards to erode, when you embrace the status quo and when management gives up. You don't need lots of money or squadrons of people to change this, you just need to care.

Understand how your actions impact others and ultimately your business.

Sean speaks of guidelines for MBA programs, however these "needs" easily apply to any entrepreneur.

1. Greater self-awareness. Executives want managers who understand the impact they have on the performance of others.
2. Development of more practical skills. Today’s managers should come equipped to lead teams, run meetings, deliver effective presentaions and give performance feedback.
3. Understanding the big picture. Modern organizations are complex organisms, and leaders, to be effective, must understand the context of how decisions are made. It’s often better to find a good solution that can be executed easily rather than the ‘right’ solution that would be disruptive to implement.

Differentiation Startegy

The business dictionary defines differentiation strategy as

Approach under which a firm aims to develop and market unique products for different customer segments. Usually employed where a firm has clear competitive advantages

What does that actually mean? Could it mean saying "yes" when everyone is saying "no", could it mean going "small" when everyone is going "large", could it mean "less" when everyone is going "more". Dr Youngme Moon postulates that maybe it is about "letting go."

Letting go of all the notions the years of accumulated. Many of the notions are deeply rooted, intertwined within the fabric of our being and not so easily given up. Differentiation requires letting go. That seems really scary when in reality differentiation is the safest course.

Ground rules for the spread of ideas.

Steve Tobak lays out the ground rules to help spread your ideas

Ground Rule 1. There are some things you simply can’t control. Luck, for instance. Sure, you can improve your odds of getting lucky, mostly by putting yourself out there, being open to opportunity, and taking risks.

Ground Rule 2. Timing really is everything. If you do everything else right, the most likely thing to trip you up will be timing. Nailing everything below will help, but not entirely. That’s just the way it works.

Let it go!

Fast no is better than a long maybe

Anthony Tjan brings a little sanity to the yes, no , maybe dynamic.

"as always a fast no is better than a long maybe." I have since borrowed that sentence many times over. Too often people are not sure if they want a yes and instead create prolonged discussions because they are either: a) too embarrassed to say no, or b) just want option value.

1. Be clear on the "ask". I have seen people pitch us with brilliant clarity of ideas, but a cloud of ambiguity on what they want from an investment partner in terms of both capabilities and dollars
2. Set a firm deadline and sense of urgency. When meeting any prospective investor, customer, or buyer, set a clear deadline for a decision. In most cases you can get to a definitive yes or no just by being clear about a close date.
3. Agree to and adhere to a post-pitch process. Outline next steps for the follow-up. What additional documents or meetings are required for a decision? When will these occur and will there be sufficient time given the deadline at hand? If nothing is required, agree to the next follow-up date and the form of the follow-up. Make the follow-up timing shorter than your gut tells you: if you think you should follow up in two weeks, say a week. A follow-up in two weeks often means that the person is revisiting the issue in 13 days (the day before follow-up) versus six days for a follow-up in a week.
4. Affirm the silent no and provide an out. Become better at trying to confirm the silent no. Schedules change, people ask for more time, and other priorities take over. Know how to escalate to the no. Prolonged silence or indecision requires a forcing mechanism. Something along the lines of "I want to thank you again for your time considering this and realize that now may not be optimal timing. Can I assume a pass for now?" Human nature is more conditioned to a yes or maybe, rather than a no. Politely providing an out is usually appreciated by the other side, and it is a good way to elicit a definitive decision or gain clarity on the best next step.