Great Entrepreneurial Fallacies
Each day, Inc.'s reporters scour the Web for the most important and interesting news to entrepreneurs. Here's what we found today.
Entrepreneurship exposed. Jay Goltz, who owns five small businesses in Chicago, writes in today's New York Times about the eight most common misconceptions about starting a new business. Goltz's list of fallacies attacks the notions of small businesses offering stability, allowing you to make your own hours, giving you control over your own destiny, that it's simple (or simply possible) to raise capital, and that success is based on finding the next "new thing." Goltz argues, for the most part, that entrepreneurial success is a combination of hard work, long hours, accessible funding, and, most importantly, luck.
New Supreme Court rulings tough on business. In what appears to be a continuing trend of the U.S Supreme Court siding repeatedly with employees and plaintiffs in cases against businesses, a pair of new rulings make it easier for workers to sue their employers if they suffer retaliation after voicing a complaint and also makes it easier to sue drug-makers over alleged stock fraud, the Los Angeles Times reports. After last year's ruling that companies and unions could spend more freely on campaign ads, liberal groups had dubbed the court company-friendly; now that the U.S. Chamber of Commerce has only been on the winning side of one case this year, that theory seems disproved.
A college blog surges in popularity. Since they were named as part of Inc.com's 2010 list of 30 Under 30 entrepreneurs, the three chic ladies behind Her Campus have seen an explosion in the site's popularity. The Boston Globe provides a compelling portrait of how the three women in their early 20's found an intensely loyal niche. Cathy Cranston, former head of the Harvard Business Review and an adviser for Her Campus, explains how the site capitalized on a demographic that fell outside the boundaries of more mainstream publications. "The site hits an obvious hole in the market, a female demographic that falls somewhere between the Seventeen magazine and Cosmopolitan crowds," she told the paper. "It's a readership that advertisers are desperate to get to."
How StumbleUpon stumbled onto success: patience. In 2001, StumbleUpon was just a part-time project. Now, 10 years later, the site is seeing 500,000 new users sign up each month. So what does it take to scale? "Nothing explodes overnight," CEO Garrett Camp explains to Mashable. "There were years of working in our bedrooms before we saw any kind of growth." In 2007, StumbleUpon was acquired by eBay for $75 million, but the deal only lasted until 2009. Camp explains that, perhaps ironically, smaller companies are best suited to grow bigger. "The bigger a company gets, the more people are involved in decisions, the slower decisions get made," Camp says. "Look, the whole theory of startups is that three motivated people can go and do something that every company can't."
Shut 'em down. AOL, the new parent company of The Huffington Post, is preparing to fold some 30 existing AOL sites into other, larger sites, The Wall Street Journal reports. Tim Armstrong, AOL's chief executive, announced that AOL's Politics Daily, Travel, Radio, Aisledash, and Wallet Pop websites will all be integrated into the equivalent HuffPo domains. Since AOL acquired The Huffington Post for $315 million at the beginning of March, the company has laid off about 950 employees.
Need a lawyer? Bid it out. That's the premise behind Shpoonkle, a start-up based in New York City that's created a virtual auction room, allowing lawyers to bid for clients. For example, let's say you have a parking ticket that you want to fight. Log on to Shpoonkle, explain your situation, and let the bidding war begin. Sounds simple, but will it work? The Wall Street Journal notes that many lawyers are skeptical of the service, but explains that the current lawyer "sourcing" system could use an upgrade. Patti S. Spencer, a tax and trust and estate attorney in Pennsylvania, told The Journal, "I don't know if it will succeed, but I'm going to try it." The founder of the site is a 21-year-old law student named Robert Grant Niznik, and funding, The Journal notes, is coming largely from Niznik's parents. No explanation was given to how the young law student arrived at the name "Shpoonkle."
Does Apple's success depend on Japan? Some are beginning to wonder. According to The New York Times here's why: Last week, shares of Apple usually fell nearly 7 percent, in two days; Rumor has that certain Japan manufacturers that Apple relies on for essential product pieces are out of operation due the crisis; Apple has been very slow to restock stores with iPad 2s and iPhones. In Apple's defense, many technology companies are at risk of being effected by Japan's crisis because all of them, in some way, rely on manufactures in Japan for some component of business. The reason why analysts are harping on Apple is because it has made a habit of being slow to respond to customer demands. The problem is that no one ever knows for sure when Apple is in trouble because they've also made a habit of being so tight-lipped that by the time the public realizes there was a problem, Apple's already fixed it.
Leveling the app playing field even more. For those small companies who have trouble getting noticed in the App Store, meet Tapjoy, a new platform for publishing and distributing applications and games based in San Francisco that launches today, according to VentureBeat. Tapjoy's self-publishing platform, Tapjoy Publishing, will allow developers to publish their own software. "We're in the unique position of being able to turn great but undiscovered apps into major hits by leveraging our mobile social distribution platform," said Mihir Shah, CEO of Tapjoy. "We encourage our developers to stay independent. We become a real alternative."
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CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.