Single-person businesses top 20 million
By Will | July 30, 2007
In the ‘60s the saying was “turn on, tune in, drop out”. Well, that didn’t last, but today, we have the corporate version happening.
The “Drop Out” part meant that individuals would pursue self-reliance, choice, and change for themselves. Right now, the US Census Bureau reports that over 2,000 people a day in the US are going into business for themselves. They are heading for hitting a trillion in revenue per year, also.
They are leaving behind the traditional corporate culture for the single-person company.
Also included in the report are the fastest growing areas, which include:
Web search portals (41.2 percent)
Internet service providers (16.6 percent)
nail salons (18 percent)
electronic shopping and mail-order houses (12 percent)
recreational vehicle dealers (12.1 percent)
landscaping services (11.1 percent).
The US Census bureau reports:
A daily average of 2,356 people went into business for themselves as the nation’s number of businesses without a payroll reached 20.4 million in 2005, the U.S. Census Bureau announced today.
According to Nonemployer Statistics: 2005, the addition of 860,000 firms where an owner ventures outside the typical business culture of bosses and employees increased 4.4 percent over a one-year period. Businesses without paid employees, known in the business industry as “lone wolves,” had receipts of $951 billion and make up approximately 78 percent of the nation’s 26 million-plus firms.
The report has data on 17.7 million individual proprietorships, more than 1.3 million corporations and 1.3 million partnerships. Nonemployer firms may be run by one or more individuals and can range from home-based businesses to corner stores or construction contractors. These firms are often part-time ventures with owners operating more than one business.
Among the fastest-growing industries are Web search portals (41.2 percent), Internet service providers (16.6 percent), nail salons (18 percent), electronic shopping and mail-order houses (12 percent), recreational vehicle dealers (12.1 percent) and landscaping services (11.1 percent).
The District of Columbia led the nation in the growth of these small businesses with a 9.6 percent increase between 2004 and 2005, followed by Nevada at 7.7 percent and Florida with a 7.6 percent growth rate.
Topics: Miscellaneous | No Comments »
Can a Startup Outside the Valley Get Valley Funding?
By Todd | July 26, 2007
Guy Kawasaki and I sat down last month to discuss if a startup outside of silicon valley can get funding from the sought after Sand Hill Road? Guy’s perspective stems from a career in the valley and funding startups. See more video interviews with Guy here.
Topics: Startups | 1 Comment »
Using an Investment Broker When You’re Outside the Valley
By Sarah | July 22, 2007
Ask the VC has an interesting counter post by Donna Murdoch of KeyStone Equities that is worth a read.
Donna’s letter is in response to Jason’s post “Are there Venture Capital Brokers?“.
Donna’s post, and I think the point is very well taken, is that in the Valley where the ins and outs of venture financing are well known, raising a round of financing is consider a core competency of sorts. But if you are an entrepreneur outside the Valley (Donna gives the example of Philadelphia), raising a round isn’t something the non-Valley entrepreneur is necessarily exposed to. And so some help raising the round isn’t necessarily a bad thing. I agree. If you’re an OtV entrepreneur, Donna’s post is good food for thought.
Topics: Startups, VC, Ideas | No Comments »
Why Viral Online Marketing Rarely Works
By Rob | July 18, 2007
Most of the startups we see here on OTV don’t have a marketing budget. They plan to go viral. They plan to get blogs to talk about them. They plan to spread via word-of-mouth. That’s all fine and good, except that it rarely works. Why? Well, a new study hints at one reason - the things bloggers talk about are the things that spend the most money.
After analyzing blog buzz volume, ad spending, purchase intentions and actual product sales, Nielsen found the best predictor of buzz for newly launched consumer-packaged goods (CPG) is a large advertising budget.
So much for the power of the blogosphere to do your work for you.
Topics: Strategy | 2 Comments »
bOk - Ottawa, Canada
By Will | July 16, 2007
bOk is located in Ottawa, Canada. Basically, they provide free and cheap long distance calls through their service. Their service is initiated by using a text message to their service. I posted step-by-step details below (There are really only 3 steps). 2) send this text message to bOK (613.614.0285)
3) pick up your phone and start talking.
- Really cheap international calls.
2. Your friends will see “bOK him” or “bOK her” beneath your profile picture
3. When anyone clicks on the “bOK him” or “bOK her” button, your phone will ring and their phone will ring,
Q: What are the advantages to being outside of silicon valley?
A: “Well, for us, this started as a way to solve a problem for ourselves. When we solved this problem, we realized that others had the same problem. So, we went about alleviating their pains as well. I think as a founder the most exciting part is that people actually benefit from what you’re doing. You are serving a purpose. It adds a whole new meaning to an endeavor when people appreciate your efforts. ”
Topics: Startups | No Comments »
Why Europe Lags The Valley
By Rob | July 14, 2007
There is an interesting post and video about why Europe lags Silicon Valley. I have a decent perspective of European culture because I spent a summer in Denmark in 1999, studying International Business and lived with a Danish family. The odd thing about the Danish culture is that uber-achievement is not considered a good thing. Danes want to be wealthy, for sure, but they don’t want to be centi-millionaires or billionaires. Extravagant wealth is frowned upon.
In the U.S., achievement and wealth are status symbols, which is why most people pursue them so intensely. Silicon Valley has done a good job of attracting the kind of people that are career oriented and are willing to take on hard challenges in return for a cut of a huge potential pie. Europe may need serious cultural changes to have the kind of wealth creation power found in the Valley. But then again, those changes have other effects that may not be as desirable.
Topics: International | No Comments »
Startup Lessons from the Valley (Sonoma)
By Todd | July 6, 2007
After my Bay Area visit, my group headed north to the valleys of Sonoma and Napa (we preferred Sonoma). We enjoyed many wine tastings (those small amounts add up) and brought back too much wine.
Although the trip was for pleasure and not business (hotel without wireless!), my vineyard experiences left me with a nice feeling (buzz) and a few tips for startups. Some may be ones you’ve already experienced, but as entrepreneurs we can find lessons in everyday life.
- Hire the right people - The first place we stopped was Ledson Vineyards. After two days of wine tasting, we all agreed it was the best. Was the wine that much better? Maybe, but the staff truly made the difference. We actually went back to Ledson and bought more wine and the staff gave us free tastings. They suggested places to eat and other wineries they personally visit. With a mediocre product and a great staff, you have a fighting chance. Build a great product and a great staff and you’re set.
- Know your USP - Every business has its unique selling proposition and wineries and startups are actually pretty similar. When tasting wine (especially lots of it) the differences become less obvious, the same can be true for startups. Most wine servers talk about the ingredients and the taste (as they see it), but taste is subjective. The good servers talked about the process it took to make such great wine and its scarcity. When a visitor comes to your site/business, quickly explain why your service/product is worth their time. As a startup, your USP should be objective (faster, bigger, etc) and avoid the speculative pitch (better design or great management team).
- Know when to ask for the business - We quickly found the serving staff’s goal is to get you to buy wine or join their wine club (neither is cheap). Unfortunately, most servers pushed the wine club brochure in your face too early. Just because you have a captive audience doesn’t mean you put contracts on the table. The best servers and salespeople know when to ask for the signature. I don’t know a shortcut on when to ask, but as a customer we all know when it feels wrong.
- Don’t focus on competition - Everyone has competition. If you don’t think you have any, you’re in trouble. And if you focus too much on it, you’re wasting your time. The best wineries talked about themselves and left out the competition during our visits. They talked about their labor intensive production, high quality and disregarded what others were doing. It’s healthy to keep abreast of what the “enemy” is doing, but by focusing internally you’ll see more gains than looking outside.
Topics: Startups | No Comments »
It’s The Network, Not The Valley, That Causes Success
By Rob | July 5, 2007
I recently stumbled across the research of Annalee Saxenian. She has studied Silicon Valley and high tech hubs in other countries. She compared Valley companies to those in Boston during a time when Boston was much less successful, and determined that the collaborative networked nature of the Valley was a key to it’s success. Add to the the research that size of network matters for entrepreneurial success, and you have an interesting conclusion. To succeed as a startup, you need good networks. If you are outside of the valley, those networks are much more difficult to build. So, in addition to Will’s excellent post about how to build a startup hub, I would add that what you don’t have locally, you should network to get. Extend your network beyond your city if you want your startup to be successful.
Topics: Ideas | 1 Comment »
How to Create a Local High-Tech Hub
By Will | July 1, 2007
One of the coolest essays on creating a tech hub was written by Paul Graham. How to Be Silicon Valley gives the recipe for cooking up the next tech hub. He makes a lot of important points about what creates a tech center, and what does not. Here are some of my key take aways:
1. A tech hub takes nerds and rich people to fund them.
2. A lot of the rich people that want to fund high-tech startups are nerds themselves.
3. Therefore, you need to create a nerd-haven – a place that will attract and keep nerds around.
How do you create this nerd-attracting place? There are two main components.
1. Create a city with a tech creative-class culture. Tech-creative are a special sub-set of the creative class. A youthful and creative technologist type person usually likes lots of independent stores, coffee shops, and youthful activities like hiking. A vibrant urban center-point is a good start.
2. Create a city with a world-class university. What it takes to create a world-class university - is big name professors. Big name professors will take a lot of money to lure and pay to stay, but once the momentum gets going, new top thinkers will want to come to the university to teach and learn. This creates a ongoing cycle of top people attracting other top people. It may cost several hundred million dollars to get started, which is a lot of money. But, if you live in an urban center, go check out how much you spent on your last sports stadium.
Some cities get confused and think they can create a tech center simply by fiat. They may hire some bureaucrats in the government that are in charge of high-tech startups, or they may build an office park and give it a high tech name, and invite large tech companies to move in. There may be some limited success by these methods, but the young technologists are not looking for bureaucrats or buildings – these things are actually the last things on their minds.
One main key seems to be that smart/ creative people like to be around other smart/ creative people, so once you get the ball rolling, it can be self perpetuating.
So work towards creating a city with some personality and a world class university. These are some basic fist steps to pulling in the technologist creative-class people you want. And, the dynamic interactions between the right types of people is where future ideas are launched and funded.
Topics: Miscellaneous | 2 Comments »
Need Cash For a Startup? Let Google Fund You
By Rob | June 28, 2007
If you haven’t heard yet, Google has released a new funding program around their Google Gadgets idea. Two types of funding are available.
1. Grants of $5,000 to those who’ve built gadgets we’d like to see developed further. You’re eligible to apply for a grant if you’ve developed a gadget that’s in our Google gadgets directory and gets at least 250,000 weekly page views. To apply, you must submit a one-page proposal detailing how you’d use the grant to improve your gadget.2. Seed investments of $100,000 to developers who’d like to build a business around the Google gadgets platform. Only Google Gadget Venture grant recipients are eligible for this type of funding. Submitting a business plan detailing how you plan to build a viable business around the gadgets platform is a required part of the seed investment application process.
Granted, the funding is limited in scope, but if you have an idea, try building a gadget component to your strategy. That would allow you to leverage the funding Google is willing to provide, and still do something bigger and better. For seed stage funding, Google takes a stake in your company. Relationships like that can be very beneficial in the long term.
Topics: Resources | 2 Comments »
