Up and Running:

Take five minutes to list all the uses you can think of for a brick. (Pause for five minutes. Write your list.) How many items do you have on your list?

I’ve done that exercise with groups of small business owners. Some get 30 and even 40 items, some only 10 or 20. And the point of the exercise is that creativity comes from quantity of ideas, not quality of ideas. Weed out the bad ones later. When it’s time to come up with new ideas, make a long list first. The longer, the better.

I was reminded of this by BNET’s “The Top 10 Catalysts for Great Ideas”:

1. When you’re inspired
2. Brainstorming with others
3. When you’re immersed in a project
4. When you’re happy
5. Collaborating with a partner
6. Daydreaming
7. Analyzing a problem
8. Driving
9. Commuting to and from work
10. Reading books in your field

Which is then nicely complemented by LifeDev’s “15 widespread creativity myths”:

1. Creative people are weird.
2. Putting a bunch of people together in a large room will produce creative ideas.
3. Only creative people have creative ideas.
4. Deadlines spark creativity.
5. Competition is better than collaboration.
6. Creatives are Messy.
7. Structure is bad for creative thinking.
8. An idea WILL come in one sitting.
9. Creativity requires high-level thinking.
10. The only motivator[s] for creative thinking [are] money and fear.
11. Ridiculous ideas are worthless.
12. Only certain jobs use creativity.
13. Creative people always have great ideas.
14. I’ll never forget my ideas.
15. More and better technology will yield more and better ideas.

Interesting, do you agree?

Why doesn’t somebody make a small device to plug into a leftover input of an HD TV to run a looped video of a nice landscape or something like that, to turn that LCD HD TV device into a useful wall panel? I’ve searched, Googled and so on, and I can’t find anything like that.

Make it an iPod-sized device with RCA outputs. The HDMI inputs on the TVs are already used up, so it has to work with one of the unused inputs, which tend to be RCA.

Today’s New York Times includes a story by Sharon McDonnell called “Snoozing at the Terminal”:

“Sleeping overnight in [the] airport has become enough of a phenomenon that it has inspired one recent novel, Dear American Airlines. The author, Jonathan Miles, said he was spurred to write the book after an unscheduled overnight stay at O’Hare International Airport in Chicago.

An unscheduled overnight stay at a German airport inspired one business traveler, Frank Giotto, the president of Fiber Instrument Sales in Oriskany, New York, to create the Mini Motel, a one-person tent complete with air mattress, pillow, reading light, alarm clock and pillow (which he now sells for $39.95).

Asked what airports would think of a tent city of his Mini Motels, Mr. Giotto expressed confidence.

‘People sleeping in chairs don’t seem to bother them,’ he said. ‘We could be forcing the airports to come up with a solution to respond to the tremendous need.’”

Can you guess a startup that’s based on a product but doesn’t have to carry inventory and creates its own channels of distribution? One whose startup costs are not a lot more than a good computer, and the know-how? One whose time from conception to shipping is a matter of weeks?

I’ve never met Scott Aughtmon. He emailed me in early May and asked me to contribute to his next book, shown here. It’s an eBook with advice from me and 37 other people about how to work your business during a recession. Scott contacted the experts, got responses in email, laid out the book, and produced it as an ebook. He’s now selling it on his website at www.recessionsolution.com.

So he first contacted me in May, and he’s already selling the book in July. That’s fast. And that’s a product business without inventory. Furthermore, by offering the contributors a piece of the action (promote it and get a share of the sales), he’s built an automatic distribution channel. (For the record, I’m just linking here, I’m not going to take a cut if you click and buy the book. I’m just writing about it, for now. I didn’t feel comfortable writing about it if I was going to get a commission for your purchase.)

I was intrigued. I asked Scott to talk to me about his business model.

How did you get started in ebooks?

I got started in ebooks because I was looking for a way to make an additional income online. … I began reading everything I could get my hands on. I read ebooks and classic books on marketing.

I read an ebook from a guy who had compiled a list of ideas and ways to make money. In this ebook, he suggested that an easy way to create a product was to interview experts on a subject and compile their answers into a book.

At this point in Silicon Valley, the dot-com bubble was bursting and later in that year Sept. 11th happened. The word was that we were about to enter a recession. I realized that there were people that I was studying online and off who knew methods to help people survive and even prosper in a recession, so I decided to do an ebook on that subject for business owners.

I came up with the title for the ebook, “How Your Business Can Survive And Prosper In A Recession,” came up with three questions to ask each expert, and at 1am or 2am one night I began emailing experts.

The next day, I began receiving answers from some of the experts. I continued to send out emails and my list of experts began to grow. I ended up with a list of 18 experts. By the end of the process experts were thanking me for including them.

After that I compiled the interviews in a Word document and converted it to a .PDF file. I then applied the lessons I had learned from all the ebooks and books I had read and set up a website and began selling the ebooks

Do you have any experience with regular books?

I originally read some on the idea of self-publishing the recession ebook, but decided against it, because of the upfront costs involved. The benefit of producing an ebook is that the actual cost to produce each ebook is “$0″ after you pay for small costs of the webhosting, online payment processing, etc.

Do you have any tips you might have for others looking to produce an ebook or any pitfalls they should avoid?

I would encourage anyone who is looking to produce ebooks to seriously consider it. If you’re a business owner it would be a great way to add an additional stream of income! You just need to take the time to prepare and make sure you know how to do it efficiently and effectively.

What you’ll need to get started selling your ebooks:

* Microsoft Word
* Adobe Acrobat
* A Web host
* A payment processor. I’d suggest Clickbank.com for your payment processor.

Here’s why I suggest Clickbank: You pay only $49.95 to open an account and they charge just a small amount per sale to process your orders. But the number one reason I suggest them is that you can offer affiliates a percentage of every sale they send you and Clickbank handles everything. You don’t have to worry about a thing. They track the sales, cut the checks and send the checks to your affiliates. This allows you to offer an affiliate % as a an incentive to other sites and bloggers to promote your ebook.

Any tips to offer?

• Don’t worry about making your first ebook perfect. Do your best to put out the best product you can, but you will make mistakes, miss typos, etc. You’ll only learn how to do this by doing it!
• Don’t go at it alone. Read up on how to create and sell ebooks effectively.
• Invite other sites to help promote the ebook as your affiliates.
• If you have customers already, ASK them what type of information would be valuable to them. Ask them if they be interested in this information in an ebook format, so they could instantly download and have it. They will tell you the information they would be willing to buy - if you let them!

How about pitfalls to avoid?

• Don’t think you’re going to become a millionaire from writing one ebook. Focus on how you can continue to help the people who buy your ebooks by offering them other products and service to help them.
• If you want “author” status in the traditional sense, then ebooks won’t be the way to get it. If you want “expert” status, and a possible other source of additional clients and income, then ebooks could help you to achieve
  this.

Have you worked with the old-fashioned publishing model, as author or publisher? How does that compare?

I haven’t, but my wife is going to be published. Her book will come out in January 2009. Getting your book published the traditional way is great and I’m not in any way against it, but it’s much harder to get your foot in the door. The company my wife is with is great and they’ve treated her very well.

In a traditional sense… If you get published the traditional way you might get a small advance, but don’t think getting published means you’ll be rich or well-known. You won’t make any money per book until you make back the advance and money that your publisher spent to market your book. Once you do make a percentage on your books it’s only a small amount of the price for the books until you gain notoriety and are able to get a higher percentage. But still, the amount per book that you receive is not that high.

In many cases you will have to do a lot of the leg work as a new author to get the word out that you have a book that’s been published.

Overall, is it worth it? Is this a good way to go?

Ebooks are a way to get your information out there easily, build your
“expert” status, and add an additional income stream to your business. It’s a great way to get started and you can use it as leverage to get a future book published the traditional way.

There was a nice post Saturday called I had that idea years ago! on the 37 Signals blog.

For those who don’t know 37 Signals, it’s a very nice, simple, collaborative project-management site, one that several of us in Palo Alto Software use and admire.

This value-of-the-idea theme is pretty much old hat on this blog, but I liked the way the blog put it, so here’s what it said:

So somebody else built a successful business on that idea you had three years ago. What does that mean? That if you would just have pursued that idea, you would now automatically be enjoying their spoils? Sorry to burst your bubble, but I really don’t think so.

Ideas on their own are just not that important. It’s incredibly rare that someone comes up with an idea so unique, so protectable, that the success story writes itself. Most ideas are nothing without execution.

Just because you thought of a site to share photos with friends wouldn’t have made you Flickr.

But I can see how fooling yourself into thinking otherwise is attractive. When someone else is having success with an idea similar to yours, it’s almost like you’re having that success, if only you would have pulled the trigger on it. It inflates the sense that your brilliant idea really was brilliant and that success was just a binary switch away (pursue/don’t).

On the other hand, it means that you don’t need divine inspiration to start a successful business. Doing well is not restricted only to those who can have paradigm-shifting ideas. You just need to do it better, or actually merely even good enough, to please enough paying customers that income can exceed expense and you’re off to a great start.

You’re probably too young to wear nostalgia gracefully, anyway.”

Well said. Just another point of view, but still, worth noting.

BusinessWeek just started a new feature profiling new entrepreneurial companies, in a slide show motif, called Fresh Entrepreneurs - Profiling Startups Around the U.S. It strikes me as a nice way to get quick views of what other people are doing. Stories like …

• She quit her consulting job at Bain, hired a designer from Chicago’s International Academy of Design & Technology, pulled $50,000 from personal savings, whipped up some samples, and several months later took her Aphira line to high-end pro shops. Glaspie, a graduate of Northwestern’s Kellogg School of Management, generated $50,000 in sales in 2005. She hopes to hit $1 million next year.
• Efimova, who studied dance in St. Petersburg, opened Russian Pointe in early 2006 after selling ballet shoes as a wholesaler, first in Ann Arbor, Mich., and in the Loop since 2005. Official supplier to the Joffrey Ballet, she opened the retail suite to bring, in her words, “the love of dance, and beauty, to this magical city of Chicago.” The store is lavishly decorated: thick cabernet-colored velvet curtains hang in the windows, and a row of old opera-house chairs runs along the middle of the store. A stage with a large mirror and barre make the store a favorite with little princesses who come for their first fitting. Local ballet schools Ruth Page and Boitsov ensure a steady stream of wannabe Giselles coming through the door. Sales rose from $7,065 in her first month as a retailer to $29,286 in October.
• Forget Boston Market or the prepared-foods section of Jewel or Whole Foods. In Oak Park, there’s the Perfect Dinner, a kitchen that prepares “home-style” take-out and delivered meals. The startup is aimed mostly at “El” riders, who can go online to scope out the shop’s menu of eight to 10 daily entrées and order ahead before exiting Oak Station on the Green Line.
  The business was founded by Karen Gruber, 48, who formerly handled the Kraft cheese account at ad agency J. Walter Thompson, and Jill Haas, 47, a onetime food scientist at Kraft Foods. The Perfect Dinner broke even with $500,000 in revenue last year—the average check is $41—and is looking at 8% to 10% growth this year, Gruber says. The pair, who started the venture with $250,000 from friends, family, and their own savings, is now trying to drum up $700,000 to open two more sites this fall.

It’s a nice treatment, quick and interesting. Recession or not, people are making it with their startups.

Imagine yourself in a conference room, presenting your business plan to potential investors. How do you answer the question: “Where’d you get that idea?”

This comes to my mind today because of a post I read yesterday on Ask the VC. An e-mailer asked what it means when investors ask that question:

Are they looking for an emotional and inspiring story or are they worried that we may have taken our idea from someone else or, what I believe is the case, do they want to see if we were driven by an opening in the market that we observed?

Jason Mendelson answers that question, from the VC’s point of view, in his post “How Did We Get the Idea for Our Startup?” Yes, inspiration and emotion are nice, he says. And yes, a great new market is even better, for obvious reasons. However:

“Taken Our Idea from someone else”–This is a big one. If you come and pitch a next-generation social networking site and previously worked at Facebook, we are going to have an in-depth discussion. Maybe you didn’t steal it, but maybe your former employer will have a claim on the intellectual property developed while you were employed.

That last one is one that I’ve run into more than once, in reading business plans and consulting. When entrepreneurs are employed already in the same industry, that sends up red flags.

And I also enjoyed Mendelson’s last couple of possibilities. Maybe the VCs want to see how well you pitch an idea, giving you a stage to play on; or “perhaps it is just a trite icebreaker and the VCs are just asking you this so they’ll have time to answer e-mails on their Blackberry while you wax poetically.”

The discussion reminds me of the critical scene in the 1988 movie Working Girl. The old guy asks the two women where they got the idea–a contested idea, where ownership is being argued. One of them just hems and haws. The other reconstructs the thought thread in detail, with references to news pieces, gossip and other connections. Guess whose idea it really was?

I had a very interesting lunch meeting today with Derek Brandow and Jason Gallic of the YBGroup. That’s also YottaByte Group, and it’s about changing our education system. Ask yourself: What does technology have to do with education? Think of a 15-year-old kid you know. Outside the class, it’s cell phones, IM, SMS, Facebook, and so on. Inside the class, it’s essays, math homework, tests, start the period with a bell, end it with a bell . . .

“But wait a minute!” I hope you’re saying, the one world has nothing to do with the other. What would texting have to do with education? Hmmm . . . what’s wrong with this picture? Why does the one world have nothing to do with the other? Does that make any sense at all?

Gallic and Brandow are building a business plan around their way to prepare young people for the world the rest of us live in, using the tools the rest of us use, with processes (like collaboration, for example) similar to what the rest of us use. Seems like a good idea to me. I’m looking forward to getting more details, but from what I heard today, this is a business, with a business model. Not all far-reaching ideas to change education have to be nonprofits.

And, by the way, I love stories as a way to communicate, and I love the way their website tells a story to help us understand what they’re after. And I mean really tells a story, as in A fictional account of a YB student. If you’re interested in this, read the story.

Good article on Facebook in the Wall Street Journal Online: “Some Facebook Applications Thrive, Others Flop,” with thanks to David Miller of Campus Entrepreneurship.

For some of those developers, the applications have become viable businesses. Companies drawing large numbers of users to the Facebook web pages associated with their applications are able to sell advertising or even goods or services there. For others, the applications are helping to raise their profile and user ranks of existing operations.

But many more have tried and failed, unable to gain or keep a following. Creating catchy applications is becoming more challenging as the number of applications vying for users’ attention grows and their sophistication increases. Meanwhile, some early tactics used to gain wide reach are being eliminated by Facebook because their intrusiveness drew complaints.

“Entrepreneurs need to ask themselves, ‘What is the problem I’m trying to solve? What is the need I’m trying to address?’ ” says Ben Ling, director of platform marketing at Facebook. “The Facebook platform is not a magic platform and you can plug in anything and it will be successful. It doesn’t make something that’s not useful, useful.”

The top 1 percent of applications accounted for two-thirds of all application activity in the nine months since Facebook introduced the platform, according to a study of Facebook applications published in March by O’Reilly Media Inc., a technology-focused publishing company in Sebastopol, California. And only 200 applications hosted more than 10,000 users a day. About 60 percent of applications failed to attract even 100 daily users.

Worth reading.

Don’t choose an industry based on trends, statistics or some list of hot startups. Look in the mirror, focus on your strengths and weaknesses, your experience, whom you want to be and what you like to do–and start a business that reflects who you are and who you want to be.

I hate to disagree with Scott Shane because I like him, I like his books, and I like the way he thinks. But I do disagree with at least some of the underlying implications of his two-post reflection on failure rates by industry. Particularly the matrix he produces as a conclusion:

To bring you up to speed, this starts with Shane’s May 28 post on Small Business Trends, about how small business survival rates vary.

The data show that the four-year survival rate in the information sector is only 38 percent, but is 55 percent in the education and health services sector. That is, the average startup in [the] education and health sector is 50 percent more likely than the average startup in the information sector to live four years. That’s a huge difference.

Moreover, most of the sector trajectories don’t cross; the sectors that have lower initial survival rates generally tend to continue with these lower survival rates every year.

Then he followed up with an even more interesting post late last week, prompted by the obvious follow-up question, which is in one of the comments:

“Good point about selecting an industry with high survival rates for a startup . . . but does not an entrepreneur have to stick to the industry he or she knows? Perhaps the information is valuable for angel investors but I think entrepreneurs cannot change their spots, stick with your strengths.”

Exactly. I’ve posted several times on this blog my general orientation toward starting your business in the area that you know. For example, my previous posts: “Where to Start, What to Start” and “Mirror, Mirror, on the Wall, What Startup?” My general position is that you don’t choose an industry; you stay with the givens, meaning your interest, your experience and, in most cases, your location.

Shane has a pretty good answer to this question:

Entrepreneurs won’t be successful if they try to start businesses in industries they don’t know. We have a lot of data that show that various dimensions of startup performance–survival, sales growth, employment growth and profitability–all increase with the number of years of experience that an entrepreneur has in the industry in which he or she is starting a business.

But Joe and many other people are missing an important part of the success story, operating in a favorable industry. I can tell from the comments on my posts about picking a good industry that people are frustrated by this point because it creates a problem for many people. The dilemma is that if your experience lies in an industry–like autos or steel or retail–that isn’t favorable to startups, you’re disadvantaged relative to your friends in computer software. Their 15 years of experience in software positions them well to start a business; your 15 years of experience in autos or steel or retail does not. The frustrating part is that you can’t change your history.

But this dilemma doesn’t change the facts. Success as an entrepreneur is enhanced by being experienced in a favorable industry; being inexperienced or operating in an unfavorable industry puts you at a disadvantage. Even if you want to fight the odds, it’s an uphill battle because investors, customers and suppliers understand the situation.

. . . which brings Shane to the matrix above.

And my problem with Shane’s conclusion is that I don’t agree with the premise that your odds in a business you don’t know are ever better than your odds in a business you do know.

Statistics are dangerous. Generalities don’t work well. You aren’t just in autos or steel or retail, for example; you’re in your specific auto-related business or your specific retail business. The real odds are about the match between you, your business offering, your target market and your strategic focus. That’s my opinion, though; I might be wrong.

Great title. I wish I’d thought of it. It’s from Venture Hacks this morning in a post about Mike Speiser’s new blog: Laserlike. Laserlike’s theme is, “Free ideas. Just add execution.” In his second post, Mike writes:

The theme of Laserlike is that ideas are overvalued. Entrepreneurs spend too much time worrying about protecting their ideas and not enough time launching them!

I had trouble finding the original post, but not the PDF of the slides in a related presentation. And the Venture Hacks summary is also very good.

A drinking straw that purifies water. Talking books. A $6 valve that replaces $2,000 worth of hospital equipment related to IV medicine. An artificial optic nerve. Very interesting stuff in a slide show from Fast Company.

10 Ideas That Could Change The World | Fast Company