How to find talent in unlikely places. What do people who make money by recruiting talented people do when the economy tanks? They keep recruiting, of course. The New York Times talked to a all manner of talent scouts--venture capitalists, head-hunters, and record executives--for a survey on recruiting published yesterday. The lessons are not all that surprising--the article recommends looking in unusual places and casting a wide net, for instance--but some of the methods used are. We learn that the VC Ram Shiram, an angel investor in Google, looks inside Stanford computer labs and prefers to invest in entrepreneurs who are starting their first or second company. Meanwhile, Sequoia's Michael Moritz uses a founder's salary as a proxy to gauge commitment: "Bare-bones pay is generally a good sign; it means the founder wants every possible dollar to go toward the success of the company, even if it means personal sacrifices."
Lessons from a failing industry. Clay Shirky's new essay, which compares the current upheaval over digital technologies to the creation of the printing press in the fifteenth century, is ostensibly about newspapers and the media business, but it contains an implicit warning against self-inflicted blindness that could apply to any industry. Shirky has some interesting stuff to say about the future--he thinks that entrepreneurs like Craig Newmark will likely create the institutions that replace newspapers--but the best part of the essay is the beginning, when he describes how newspaper companies failed to consider the possibility that their industry was undergoing a revolution: "When reality is labeled unthinkable, it creates a kind of sickness in an industry," he writes. "Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en masse." A sound warning.
The mobile web is huge. On his blog, VC Fred Wilson passes along some remarkable numbers from ComScore, which indicate that the mobile web is one third to one half the size of the Internet. Some 63 million people access the mobile web each moth in the U.S., if you're scoring at home. If these numbers are even close to correct, marketers can't afford to ignore the mobile world. For more on the marketing possibilities in the mobile web, see our story here.
Geeks converge in Texas at SXSW. For entrepreneurs hoping to launch a technology startup, this weekend's South by Southwest conference, which is as much about partying as it is about panels, has become a key marketing opportunity. The New York Times explains the unique challenge of selling your startup to the cool kids of tech: "But wooing the technorati is a tricky business. Start-up companies are aware that in-your-face marketing is a good way to scare off the kinds of people who go to South by Southwest." Meanwhile, Kevin Rose, the founder of Digg and the subject of a November cover story, launched a new service that makes connecting with tech insiders (not to mention Shaq, Britney Spears, and Lance Armstrong) a lot easier. It's called WeFollow and it's a user-generated list of top Twitter users. (Yes, that's Rose at the top of the tech list with 293,147 followers.)
The best place to start a company. It's not Silicon Valley, according to a GigaOM report from SXSW: "The model of tech getting used to VCs throwing crazy amounts of money at them is just crazy," says Mike Maples, Sr., an angel investor who formerly worked at Microsoft. Other panelists decried the VC funding model as shallow and limiting for entrepreneurs. Check out an on-location video at the end of the entry.
Obama's new plan to increase lending to small businesses. Today Obama and Geithner will announce the administration's plan to make lending to small businesses more attractive. The plan revolves around two SBA programs: 7(a), which allows small businesses to procure government-backed loans up to $2 million through the SBA, and 504, which guarantees up to $4 million worth of economic development projects for small businesses, reports CNN . Here's the nitty gritty: Loan guarantees for 7(a) now cover 90 percent of loans below $150,000. The administration will also temporarily waive upfront fees for 7(a) loans that banks charge borrowers, which can be as high as 3.75 percent. And, starting today, fees for both lenders and borrowers on any new 504 application will be eliminated. The White House is hoping that decreasing the cost of borrowing will make it easier for small businesses to get the credit they need to make new investments. As Inc.'s Robb Mandelbaum noted a few weeks back, the SBA also withdrew earlier plans to limit goodwill financing to 50 percent of a loan after experts and business owners protested. Instead, through August 31st, the agency will review each loan where goodwill financing exceeds the new rules.
Buyer's market for businesses? A recent survey shows that 80 percent of business dealmakers think it's a buyer's market, the Chicago Tribune reports. "We had a record 2008, and so far our buyer inquiries are up 200 percent over the same period last year," said Domenic Rinaldi, managing partner of Sunbelt Business Brokers in Chicago. "There's so little security in corporate America. Owning a business is a way to gain control of their destiny." As the Tribune points out, loans are low for those who qualify, the job market is incredible for employers, and many businesses will be more profitable after the recession. On the other hand, business brokers, like real estate agents, always say it's a buyers market, so these survey results aren't that surprising.
When fighting off competition, remember the four R's. That's regulation, reputation, regeneration, and real estate, and they're all strategies for guarding your market share against upstarts. Over at Business Week, Steve McKee recommends these barriers, which you can erect to deter as many potential competitors as possible. They might not all work for your business, but these days, you need to be especially vigilant about protecting your bottom line.
Small business owners are optimistic. A recent survey says that most small businesses were profitable last year and have high hopes for the future. The survey results, available at FOX Business, reveal that 69% of small businesses were profitable in 2008, and 70% said that they expect their businesses to still be in operation in five years as opposed to being closed, sold or transferred.
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