Up and Running:

Health care, loans, SBA, job creation … have you noticed that the public discussion on all of these business-related topics is very far off base? Doesn’t it seem like the talking heads choose sides first, then recite talking points? And that the result is no real communication or discourse, because it’s all predetermined. Tell me what the pundit said and I’ll tell you which side he’s on; which uniform he wears.

Funny, everybody in government is in favor of small business. Words and phrases like “job creation” get used so much they’re diluted of all meaning.

Meanwhile, back in the real world, you and I are getting into the office early with a large cup of coffee every day, answering phone calls, following up on projects, and while these issues affect us in the long term, we have too much short term–and too much business-specific work–to allow us time to even look into it.

So I was browsing NYTimes.com online Sunday when I caught Robb Mandelbaum’s piece called Obama Talks Up Small Business, Again on his You’re the Boss blog. It seems like a decent piece of journalism, summing up the latest small-business talk from the White House. What struck me about it, though, was not the content but how much I find myself agreeing with this comment, from someone who uses only his first name (Doug) and says he’s a small-business owner. He said:

• This is not a Democrat vs. Republican issue. I am WEARY of the fighting–neither party shows it cares about anything but winning and staying in power (or regaining it.).
• As soon as a person brings up Pelosi or Reid or Obama or Limbaugh or Beck or Cheney–that person LOSES the argument by showing they are not an independent thinker but a follower of the hamster wheel of politics that keeps spinning, keeps getting you worked up emotionally, but never gets things done.
• Give American small-business owners the freedom to be entrepreneurs and they will supply America with innovation, jobs and new tax revenue.

I agree.

(Photo credit: Marynchenko Oleksandr/Shutterstock)

There are long-term needs and wants, and then there is fashion, and there is changing technology as well. Does the recession mean markets are falling apart? Is technology making some markets fall into disorder? Does that make this a good time to start something new in those same markets? Maybe.

Seth Godin suggested this the other day, in Crowded at the Top:

The very best time to launch a new product or service is when the market appears exhausted or depleted. There’s more room at the top and fewer people in a hurry to get there.

He cites four specific markets that seem to fit this general pattern:

The next golden age of journalism, of communications, of fashion, of car design–those are being established now, in a moment when it’s not so crowded at the top.

That makes sense in general, but you have to be careful. Sometimes markets crumble because something else replaces them, or the need dies, or fashions change forever. Think about buggy whips, telegrams, cassette tapes or hula hoops. The underlying needs are still there, but the actual markets have died where they were and been reborn somewhere else.

(Photo credit: Vibrant Image Studio, Dean Pennala/Shutterstock)

I’ve seen this happen so many times: the entrepreneur gets the company going and wants financing to push it to the next level, and the investors want the company but not the founder.

It’s not at all unusual, and it’s not as bad as it sounds either. The underlying problem is that growing a company often takes different skills and talents than starting a company.

BusinessWeek.com has a good story on that this week: An Entrepreneur Prepares to Pass the Torch, by Nick Leiber. It’s about Michelle White of Michelle’s Miracle:

It’s a classic dilemma. A first-time entrepreneur creates a thriving company from scratch with the potential to be The Next Big Thing, but her investors thinks she needs an experienced CEO and management team to take it there. They also bet future investors will want to see seasoned leaders in place.

It happens to a lot of people. My favorite example these days is Steve Jobs, who was kicked out of his post at Apple Computer in the 1980s to make way for John Sculley, who ran the company from the late 1980s to the early 90s. Then when Jobs came back to run the company again in the late 1990s, he brought it back from near death to prominence. 

(Photo credit: that photo appears in the businessweek.com story online. You can click it to go to the original.)

This was in the New York Times today:

Starting Nov. 13, the new movie, “Ten9Eight,” will be shown at select AMC theaters in cities including New York, Chicago and Los Angeles. In addition to a theater release, Ms. Mazzio is in talks with several companies to show the film next year on television.

There’s an interesting back story by Mickey Meece, a rgular contributor to the Times on subjects of small business and the like. It’s about Mary Mazzio, filmmaker, who has done one film on entrepreneurs already (Lemonade Stories), and was really interested in doing this one.

While “Lemonade Stories” looked at the impact of mothers on entrepreneurs, her new documentary “Ten9Eight: Shoot for the Moon,” follows a group of students from “Harlem to Compton and all points in between” as they compete in a business plan contest run by the nonprofit group Network for Teaching Entrepreneurship.

It looks like it could be fun. Here’s the link:

Practically Speaking – ‘Ten9Eight’ Documents the Dreams of Young Entrepreneurs – NYTimes.com

I’m cynical enough to write that I don’t think this is big news, but still, it’s good to see the Department of Commerce saying the right things about entrepreneurship. And jumping onto Twitter is a good way to communicate with entrepreneurs.

Secretary of Commerce Gary Locke last week announced the formation of its new Office of Innovation and Entrepreneurship, with the following goals:

• Encouraging Entrepreneurs through Education, Training, and Mentoring
• Improving Access to Capital
• Accelerating Technology Commercialization of Federal R&D
• Strengthening Interagency Collaboration and Coordination
• Providing Data, Research, and Technical Resources for Entrepreneurs
• Exploring Policy Incentives to Support Entrepreneurs and Investors

He also announced joining Twitter as SecLocke, which is an interesting development. Locke told CNN:

“It’s important that the Department of Commerce regularly communicates with American businesses and entrepreneurs to help them translate new ideas into economic growth,” Locke told CNN. “Innovation is going to be the key to our long-term economic growth, and we need to embrace new ways of communicating with small businesses and entrepreneurs.”

So that seems like a good step to take.

I posted here a couple of weeks ago how I don’t think real entrepreneurship sits around waiting for government policies one way or the other. And I’m sticking to that story. Still, at least they’re trying, which seems like a step in the right direction.

(Photo credit: from http://www.commerce.gov/CommerceSecretary/index.htm)

Marketing expert John Jantsch, creator of Duct Tape Marketing, posted this list today on the American Express OPEN forum. He introduces it by recognizing that it’s not necessarily that big idea you’ve been waiting for that makes the startup successful. He offers these five factors:

1. The owner is the customer. Meaning that you make a product or service that you want to use. Jantsch says: “You can acquire some measure of knowledge from various research techniques, but nothing beats living, breathing and feeling the same things your prospects do.”
2. The market understands the offering. He mentions this problem: “If your innovation simply solves an incredible problem people don’t yet know they have, you may wind up burning through the money before they get it.”
3. The market already spends money here. John says: “If people are already spending money on a product or service, then two-thirds of your work is done.”
4. It’s an innovation that simplifies. Amen to that.
5. Nothing is precious. This is a tough one. “If you’re in love with your bright, shiny, baby startup and all that it offers, you may become blind to the reality the market suggests.” Keep an open mind, Jantsch says, “talk to your customers, talk to your competitors, talk to your employees and remember nothing is precious but what the numbers prove to be so.”

Here’s the link: 5 Attributes of a Sure Fire Startup: Marketing: Idea Hub: American Express OPEN Forum

The roads to starting your own business are not mapped and paved. You have your own path. If it takes you in that direction, good luck to you.

I don’t think many people go through any well-defined series of steps. We start businesses because we want to prove something, build something, do something, not do something else, create something–or for some other reason.

I see a lot of startups, but I almost never see startups that began with people vaguely wanting to own their own business or be their own boss and then sifting through menus of business opportunities, choosing one and building a business. I’m sure it happens. But I’m also sure that much more often, the entrepreneur sees the need or the possibility first, then builds the business while pursuing his or her own path.

You grow up, get an education, get a job in something that interests you that might or might not be related to your education. You see something that could be done better. You see something you want to do. You get an opportunity to join somebody else, helping with his or her vision. You find a way to get somebody to pay you to do what you like, instead of something else that you don’t like.

Follow your own path. It’s not a good business or bad business according to the times or the type of business. It’s a matter of whether or not you believe in it and you want to do it.

(Image: Jaqui Martin/Shutterstock)

The discussion about health care and small business is really bugging me. First my bias, declared now so I don’t end up like all those others who just recite talking points supporting their “team” in politics: I’m firmly behind President Obama on health care.

(An aside: politics ought not to be a team sport. Every politician ought to decide on each issue based on what’s best for the country. But that’s impossibly utopian, I know.)

What’s bugging me, aside from all the obvious politically motivated hooray-for-our-side blathering from both sides, is the people claiming one health-care policy is good or bad for job creation or small business. Everybody, it seems, wants to speak for small business, but what they say is just claiming that whatever it is their team is saying is supposedly good or bad for small business. They’re using talking points. They’re playing for their team.

Here’s a simple truth: Businesses start or don’t start regardless of the government’s health-care policies. People start businesses because they want to, because they believe it’s good for them or for some similar motive. They don’t decide to do it–or not to do it–because of health care.

And more truth: Health-care costs don’t kill companies. People are not hired or fired because of higher or lower health-care costs. Companies that work, companies that succeed, will manage the health-care costs. Companies that fail are just looking for something to blame.

That’s my opinion.

I have to admit bias squared with this post, because I like Ramon Ray, the author, and he’s congratulating Business Plan Pro, which is my work, on its 15th anniversary. Still, Ramon makes this point very well:

We all know that when applying for a loan and seeking venture capital funds you simply have to have some sort of business plan. But we often forget about one important audience, ourselves. A business plan is not only needed for third parties involved with providing funding to us in one shape or another, a business plan is an important, strategic document to help guide our growth. Like a good road map on a trip, it helps us know where we have been, where we are and where we are going.

That’s from Business Plans Are Not Just for Startups on Ramon’s excellent blog Smallbiztechnology.com. If you don’t follow Ramon there and as ramonray on Twitter, well, you ought to. He’s a true expert in the subject.

(Photo credit: I captured that picture from Ramon’s Twitter profile)

Many years ago I was leaving a job as a vice president at a market-research firm to go out on my own when several of the other four vice presidents at the firm suggested I was crazy to do that. Their worry was security, family and so on. My wife and I had four small kids at the time.

I left anyhow, and I didn’t feel any more at risk on my own than I was with the salary. “You’re only as safe as your billings in this small firm anyhow,” I told them. That turned out to be ominously true. They were out of their jobs within the next two years. All four of them.

I was reminded of this by Steve King’s post Do Small Business Owners Have More Job Security and Personal Time? on Small Business Labs last week. Steve gives us research from Ace Hardware that seems to say this (his words):

So small business owners feel their jobs are more secure and they have more flexibility, independence and personal time. Sounds pretty good–if you make it.

Interesting for entrepreneurs. But remember, with all research like this, consider it food for thought, and stay skeptical.

I’m very happy to see our local (Eugene, Ore.) newspaper (The Register-Guard) leading today with this story by Diane Dietz about a local company getting $40 million in stimulus grants.

To you and me, this means “hey, it could happen to you.” Or so it seems to me.

Cascade Sierra Solutions in nearby Coburg, Ore., specializes in technical solutions to increase fuel efficiency in trucks. These are things like special add-ons to reduce wind drag, in one program. The latest grant is to install power pedestals at truck stops so truckers can plug into electric power without having to run their engines.

Cascade picked up $17 million in an earlier grant, and $22.2 million last month. It has about a dozen employees locally, but its programs are supposed to add about 1,700 jobs worldwide through greater fuel efficiency.

I’d like to think this is happening all over the country. It’s creating jobs, helping the economy and helping the clean-energy movement (or maybe just less dirty). But for today, here’s one example close to my home.

Darren Dahl brought back some bad memories with his A Small-Business Guide to Intellectual Property in The New York Times last week. Not that his story is off base, either: He seems to have things pretty much straight. Even so, he may be way too optimistic. Out here in the real world, from my experience at least, things are often worse.

For the first example, he tells how Daniel Lubetzky discovered that a competitor had done a knock-off package that looked like his company’s snack bar:

He kept hearing how one of his competitors had copied the packaging, look and feel of his bars.

Fortunately for Mr. Lubetzky, he had secured crucial components of intellectual property like trademarks, trade dress (the look and feel of a product) and web addresses after founding his company. Unlike a patent, which can cost up to $25,000 to secure, trademarks and web addresses can be obtained relatively cheaply and without the aid of a lawyer.

Several years ago my company had a bad experience with a competitor who brought out a new box that was so much like our market-leading box that our sales reps called complaining we’d brought out a new product without telling them. We had one of the best intellectual property lawyers I’ve ever heard of, and we had all the trademark protection he could think of, but it turned out that copying packaging is not illegal. You watch the key trademarks, make things look the same, and the consumer gets fooled.

You’re probably thinking we didn’t have the right lawyers, but if so, take a stroll down the retail shelves of any office superstore or a grocery store and count how many packages look like their competitors. The imitators copy market leaders.

I think the package knock-off strategy sucks. But it also works. People make money that way. And most of the time, it’s not illegal, and trademarks and copyright are easy to work around.

And then, second example, patents: The patent system is broken. Just read what Wikipedia says about patent trolls. Here’s what a patent troll does:

• Purchases a patent, often from a bankrupt firm, and then sues another company by claiming that one of its products infringes on the purchased patent
• Enforces patents against purported infringers without itself intending to manufacture the patented product or supply the patented service
• Enforces patents but has no manufacturing or research base
• Focuses its efforts solely on enforcing patent rights

Unless you’re running a business, you probably have no idea how widespread this is. My company is a small business, barely 40 employees, and we got caught in it. And I know a guy who had a family photo-sharing site, no employees, and he got caught by one. He had no revenue, but he still had to pay $1,000.

But to be fair to Darren Dahl, he doesn’t talk about patent trolls, but he does summarize very well the frustration of patents in general:

Actually, what a patent does is give you the right to prevent someone else from producing what your patent covers. “Having a strong I.P. position helps ensure that other people pay you for your innovation like they would a toll on a road,” Mr. Kocher said.

But even if you do have a patent, there’s no guarantee that someone won’t try to get around it. There’s also no guarantee that you will win if you fight that person. But if you have your I.P. ducks in a row and a commitment to do whatever you can to defend those rights, you do have a fighting chance–even in a fight against a much larger company.

I don’t want to be too negative, but sometimes it seems that the “fighting chance” he mentions is also too optimistic. The world of high technology is littered with the corpses of companies that eventually won their cases on appeal, but the company was lost in the meantime.

And I’m not saying that as an entrepreneur you should ignore patents, trademarks or copyright. No. You do what you can to protect yourself as best you can; but don’t think that it’s easy. And don’t think the system actually works.