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Startup Lesssons and Recession Strategies

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Vacant stores become ads. With bankruptcies on the rise and commercial real estate still sluggish, a handful of advertisers are turning vacant storefronts into ersatz billboards. Stephanie Clifford, a former Inc. senior writer, has the scoop on this trend at the New York Times. Big time brands like Nestea, Snickers, and Intel have already put up some creative campaigns on the windows of shuttered stores. For now, the ad rates are actually quite affordable -- just $500 for a three-month run, reports the Times.

Learning from startups At the Times' Dealbook, venture capitalist Peter Rip, a general partner at Crosslink Capital, argues that regulators should use startups as a model for financial reforms. Though Rip is partial to venture-backed companies, his suggestions for regulators are dead on. At small companies, Rip points out, there's nowhere to hide: "Unlike in public companies, boards of venture-backed companies have no reluctance to replace C.E.O.'s or key managers when things aren't working. 'Wait until next year, again' is not tolerated because the companies cannot afford it."

The ultimate community bank. Reuters reports that residents of the poverty-stricken Palmeiras neighborhood in Fortaleza, Brazil, say they're largely insulated from the financial crisis, because their local economy isn't tied into the global banking system. Instead, they use notes called palmas, loaned out by the Palmas bank, which are designed to keep wealth in the local community. And it looks like it's working—10 years ago, people had to leave the Palmeiras just to get a haircut; these days, there's a thriving group of entrepreneurs starting businesses that take palmas.

Growth and uncertainty. During tough economic times, conventional wisdom says that businesses should only invest in things with a clear return on investment. But, according to a new book by Wharton and Columbia business school professors, that approach causes companies to waste a lot of money and forgo opportunities. Knowlege@Warton interviews Ian MacMillan and Rita McGrath, co-authors of "Discovery-Driven Growth," who say that growth opportunities are by nature murky. Instead of intense and careful planning, you should focus on creating inexpensive experiments. "When things are uncertain, you really don't know what the outcome is going to be," says MacMillan. "The key issue is to know from the start that the plan is wrong...So, how do I plan in such a way that I come out with the right solution but not necessarily know what it is at the outset? That's what discovery-driven planning is all about. It's a plan to learn." Meanwhile...

At startups, board members face tough calls. The Wall Street Journal has an interesting piece on how boards members at startups are dealing with competing temptations during the recession. Namely, are recessions the right time to spend or to save? At Japersoft, a San Francisco software company, one group of board members wanted to preserve the $15 million in cash reserves. The others wanted to use it to seize market share from rivals weakened by the recession. Tough choices abound.

The Internet, brought to you by...Your web browsing may soon be interrupted by 15 to 30 second "deliberately intrusive" video ads that load as you navigate between web pages. The idea, explains New Tee Vee, is for publishers to shift ad dollars away from banner and other display ads sold in bulk, and onto more expensive video spots. Advertisers have long been doubtful over whether consumers actually pay attention to banner ads. The small company at the heart of the matter is ShortTail Media, whose platform lets advertisers serve short video ads.

Wading through the resume slush pile. There probably hasn't been a better time to hire top talent in a generation. But, the actual hiring process can be maddening. The WSJ has a nice breakdown of some of the tools out there that can help you quickly screen applicants. One service, called VoiceScreener, lets job applicants record responses to interview questions over the phone, and uploads the recordings to secure web servers.

Last updated: May 12, 2009




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