Goodbye Pandora

Apple launched an amazing suite of products this week. I’m excited to install iOS 7 and I’m looking forward to buying Mac Pro for my video editing lab.

I’ve been an Apple fan ever since the introduction of the Macintosh back in the early days. As a startup guy, I’ve always cheered for the underdog; which used to be Apple as they faced competition against IBM, Microsoft, Gateway, and Dell. Now it seems as Apple is the 800lb gorilla. They’ve become “the man”, the very thing Steve Jobs taught us to hate back in the 80s.

Consider these companies that Apple squeezed out of the market:

Blackberry – I used to love my “Crackberry”. I became lightening fast at the small keyboard. I still think a real keyboard works better than the iPhone. However, everything else about the Blackberry was terrible. The Apps sucked, the browser was poor, and the phone part was bad too. Apple destroyed Blackberry with the iPhone. As a result, thousands of jobs were also destroyed.

Dell – I know you remember the days when Dell laptops were everywhere. Businessmen, Students, and Moms all wanted a Dell laptop. Looking around your local coffee shop today and the Dell has been replaced by the glow of the Apple logo.

Napster and MP3.com – Both of these platforms changed the way we consume music. They were here first, way before iTunes. Apple found a way to sell music digitally and the world was better off because of it. But in no way did Apple pioneer digital downloads, they just made it better and “legalized” it.

Nokia – Before smart phones, everyone carried a Nokia. I’m sure you too have owned at least one. They were the top selling mobile phone for several years. Now they are fighting for their last breath.

Palm, Handspring – Handheld computing used to be lead by these companies. Since the iPhone, neither can stay afloat. No matter how good any of their products are, we will never know because of how huge Apple’s presence is in mobile computing.

Roku – Streaming TV was launched before Apple TV. Roku has some amazing hardware which you’ve probably never heard about. Apple beat this company with their digital catalog of music and movies, even though Roku’s hardware is superior to Apple.

Pandora – On Monday, Apple announced its new radio offering. Now Pandora has nothing to offer above what Apple is going to provide for millions of iPhone users. I predict the company will be out of business within 3 years. It’s sad, I love Pandora, but Apple makes it too hard to use another service over their own.

As a CEO, I never like to see people lose their jobs. Global competition is the American Way. But ask yourself, is Apple now “the man”? If so, who’s the underdog that we should be rooting for this time?

Jason

A New Adventure Begins!

Today Shoutlet, the company I founded, announced my departure as CEO. The decision was mine and the timing was right. After spending several years running the company I felt that Shoutlet was starting to grow up without me.

Building a successful startup company is similar to parenting. Eventually it needs to live a life of its own and if you love it enough, you need to set it free. Just like a parent, I have an “empty nest” feeling stepping away even though I know it’s the best thing to do. Additionally, Shoutlet has such a strong management team in place that our growth is almost on cruise control. I’m very proud of what we built.

There are several people to thank for getting me to this point. First, I’d like to thank Shoutlet’s clients for believing in my dream early on. Many of you trusted me and stuck with us no matter what obstacles came our way. Several of you have become my lifelong friends, thank you.

Second, I’d like to thank all of the hard working employees that make Shoutlet what it is today. Your passion and enthusiasm for the product is what carries the company forward. I’m very proud of all of you.

Finally, I’m excited about my future plans. My favorite part of startups is the whiteboard phase. I love the smell of markers when new ideas are being born. Today, I find myself lucky enough to be there again. Check out my new venture and stay close for additional details.

-Jason

 

 

 

The 1%

A few months ago I was interviewing CFO candidates for an open position at my company. One of the candidates started the interview by congratulating me on starting my own company. He indicated that less than 1% of the population in the United States has the courage to begin a business. I was floored by the statistic and soon found myself on Google trying to discredit it. I was disheartened to find out that he was right.

True entrepreneurs enjoy seeing others succeed. They get joy in helping others achieve their dreams. A true entrepreneur can’t ever imagine life with a “day job”. They can’t understand why someone who truly believes in his or her idea wouldn’t be working on it obsessively full time. This is why I was so shocked to find out that only 1% move forward with starting a company.

Drilling online further, I came across the following infographic that talks about “Entrepreneur DNA”.

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Do you have enough guts to start your own company?

“Most people have attainted their greatest success just one step beyond their greatest failure.” – Napoleon Hill

– Jason

Personal Branding

Personal branding is about managing your name—even if you don’t own a business—in a world of misinformation, disinformation, and semi-permanent Google records. Going on a date? Chances are that your “blind” date has Googled your name. Going to a job interview? Ditto. —Tim Ferriss, Author, The 4-Hour Work Week

Now more than ever, when it comes to your personal “brand,” it’s important to manage your digital trail, or the information online about you and your online reputation.

It’s becoming increasingly easier to find information about anyone—even you—online. For brand marketers, however, being found online is less of a nuisance or concern. In fact, it is an imperative for many who want to establish themselves as industry experts. For that reason, establishing a social presence online is critical in becoming an online thought leader.

My recent book Manager’s Guide to Online Marketing walks through the steps on how to establish yourself as an industry expert. As a starting point, I have provided a few helpful tips here.

I’m not going to sugarcoat it for you: Becoming an online expert is tough business. You have to always be “on” and creating new content in the form of a post, tweet, video, etc. For many, it’s a full-time job and it quickly becomes time consuming, and tiresome.

The concept of personal branding has become exponential through social media. Over the past few years, I’ve seen a variety of ways to leverage social media for your own personal brand. Some tactics are more complex than others. Specifically, starting a blog is more difficult to maintain because of the continuous demand for long-form content. Therefore, platforms like Twitter have emerged that are easier to maintain since your communication is limited to 140 characters per post. You need to pick the right approach for your bandwidth and audience.

Most people in my company have a personal Twitter account, as do I, aside from a corporate Twitter account. Even though a business account is set up the same way as a personal account, the tone of these two accounts should be different.  For corporate Twitter accounts, keep your tweets informational. You comment and retweet more often about events in your industry than you would in a personal account. A corporate account can also link to e-commerce sites if you are selling a product or service.

Personal accounts should be a reflection of yourself and your personal interests.  Several industry experts have both personal and business Twitter accounts set up, but they know how to leverage each for different purposes.

Screen Shot 2013-03-06 at 11.39.03 AM

People often ask me about strategies to build their individual fan bases. There is no silver bullet when it comes to social media. Gaining true fans is a result of several marketing tactics, great content, and old-fashioned hard work.  Fans are key, and imperative for growth in social media. Even better are evangelists— those who take your message managing to a new level by recruiting more fans to your page. Foster evangelists, and your personal brand will grow while you sleep.

In addition to blogging and popular social media networks, several personal page platforms—or systems for organizing social media profiles and information—have emerged to help you better consolidate your social media connections. About.me allows you to create a personal branded page with a few clicks. These personalized pages contain links to your Twitter account, LinkedIn profile, etc. Consider this your personal landing page. You can view my About.me personal page here: about.me/mixdown.

Screen Shot 2013-03-06 at 11.33.39 AM

Since companies like About.me want to drive more traffic to their platform, they make it easy for search engines to find you. Getting found gets you noticed, and getting noticed gets you one step closer to becoming an industry expert.

You may be wondering how your online presence currently measures up to other industry experts. Several platforms offer ways to measure your current online influence. Each platform has a different formula for how influence is measured, so it’s important to evaluate each and determine which platform best aligns with your beliefs in how online influence should be measured. For more in-depth detail on how to successfully measure your online presence, you can purchase my book here.

-Jason

It Just Works – The Importance of Product Usability

“Simplicity is the ultimate sophistication.” – Leonardo da Vinci

Usability is always a top consideration in product design, and it’s key to emphasize that incorporating user-centered design principles can lead to an overall better product.  If a product is “usable”, people are more inclined to use it and to recommend it to others.

As discussed in the documentary, Objectified, it’s the features you don’t recognize that make a product useable. A good design tends to get out of your way and seems natural.

ObjectifiedWatch Objectified on Netflix here. 

In just a few short years, the technologies found in today’s mobile and computer devices such as touch screens, the cloud, and voice-control software, have radically transformed usability expectations of consumers. It’s no secret that Apple played a leading role in shifting these expectations. While design is a critical component of every product that Apple makes, if it is not easy to use, it is considered worthless to the consumer. Essentially, all of the products that Apple creates are fabricated with the goal of being intuitive and easy to understand and learn.

Given the touch-centric digital era that we live in, it became apparent to Microsoft that PC users would eventually evolve away from the traditional point-and-click functionality of the Windows desktop. With the recent launch of Windows 8, Microsoft has radically transformed its user interface strategy. Windows 8 is a significant change from Microsoft and Windows 7; turning the Start menu into an interactive screen that’s well suited for touch devices like tablets. While the product has received mixed reviews, in a nutshell, the new interface is powerful, fast and convenient for users.

Windows 8 includes a brilliant feature called picture passwords that allows you to login to your account by using gestures on an image with your finger or your mouse. This facet is especially useful for tablets where you want to avoid typing if you can. Instead of typing in a password, you simply select a picture from your gallery, and then create three gestures on the image to act as your password. When you create the picture password you can use gestures that consist of taps, circles, or lines to set-up a secure login. Once the picture password is created, you can then login to your Windows accounts by executing the gestures in the same direction as when you created them. This method allows for variation in possible passwords on a given picture and allows you to avoid having to use a virtual keyboard.

You can see the technology in action here:

As many users prefer very simple passwords or abandon them altogether, Windows 8 offers a next generation graphical login providing users with a sign-in method that is fast, fluid, and personal.

While Windows 8 offers notable and convenient features, Microsoft risks trying to be all things to all people. In contrast, Apple’s approach reserves the iOS software, for mobile form factors, leaving its OS X desktop software optimized for the traditional keyboard and mouse. Windows 8 is a powerful operating system, but it’s also confusing to old PC users.  Could Windows 8’s modern UI completely replace the storied desktop one day? Perhaps. Microsoft may be heading in the right direction, but Windows 8 is only the first step in a much longer interface design journey.

A lot has been said about how Windows 8 is a bold step, but really, it’s just opening the door to the next Windows 9 interface.

Usability will continue to be a key role in the adoption of new products. The launch of companies like Square (https://squareup.com) prove that there is room for plenty of additional ways to disrupt traditional markets, such as payment processing.

There are several resources available to help your product become more usable. Perhaps the biggest consulting firm on usability is Human Factors International (http://www.humanfactors.com). If you don’t have the resources to hire a consulting firm you should at minimum read, “Don’t Make Me Think” and “Rocket Surgery Made Easy” by Steve Krug. Both books are exceptional for helping you on usability and user testing.

Which products do you feel are most usable? Any additional resources I should share?

-Jason

Building A Digital Media Department

“The aim of marketing is to know and understand the customer so well the product or services fits him and sells itself.”  — Peter Drucker, author, professor, and management consultant

If you are like most of my clients, you’re probably just beginning to build a social media team. Over the past few years, I’ve seen departments range from a part-time intern managing a digital strategy to a team of eight full-time social media professionals. Every organization operates differently, and each company has access to different resources. Whatever your situation may be, it is possible to create a plan that fits your organization. My recent book Manager’s Guide to Online Marketing breaks down the steps on how to do this and more. As a starting point, I have provided a few bullet tidbits here to help get you started.

No Resources/Small Team
The part-time option is where many companies begin, so let’s start there. If you’re a company of one or simply don’t have the budget to hire a digital marketing team, there are still ways to leverage online marketing effectively. Creating strategies that require a lot of your time or tons of content will quickly overwhelm you. Remember that it’s worse to start and stop than never to begin an online presence.

Consider starting out by creating a self-running group on LinkedIn. One of the smartest things we did at our company before we had access to a team was to create a LinkedIn group and open it to other people. In doing so, we maintained our company brand in front of thousands of marketing professionals while they posted all of the content. It was easy to garner attention when we wanted to promote one of our upcoming white papers or webinars. Since we controlled the group, we could post whatever we wanted to the page.

Some Resources/Medium Team
Perhaps you’re just establishing a digital marketing team and have access to resources that can help kick-start your effort. Often I meet with companies that have a public relations person, an advertising person, an e-commerce person, a brand manager, or a marketing director. More often than not, they are already overwhelmed with their existing workload and now their boss has dumped “figuring out digital marketing and social media” on their laps. Sound like you? Well, there is hope. My suggestion for groups in this position is to form a digital media/social media committee. Agree to dedicate 5 percent of your time to digital media, dividing up responsibilities based on individual expertise. Agree to meet at least weekly, and try to never miss a meeting or reschedule.

Here are some tips for your new committee to get started in digital marketing and social media:

  • Create success metrics. Remember to define “what success will look like” before you begin. It’s better for everyone if you have a clear understanding of what success in digital marketing means before you begin. Start with your end goal in mind and work backwards.
  • Develop a routine. At the initial meeting, determine the committee’s objectives. Consider exactly what each staff member will contribute to the group every week. Evaluate tasks by individual expertise and interest, and align a plan that works with staff schedules. Be sure to have an agenda before each meeting and never end a meeting without defined action steps for the next week.
  • Repurpose content. Several companies have quality content available from public relations or marketing pieces that can be used in social media. I’ve seen companies take sections of their published newsletters and reformat them into an RSS feed reader, then distribute it on their blog, Facebook page, and website in a shareable Web application. Look for videos, stories, or audio clips to repurpose into your social media channels.

Build a Digital Media Department
One day, (perhaps you are here now), you’ll need to operate an entire digital team. Recently, a CMO from the banking industry asked me to design a complete digital marketing organization for him, and I’m providing the same plan here for you. It’s becoming more common to have a c-level executive leading the digital side of marketing. The Chief Social Officer oversees an entire digital marketing organization and is responsible for budgeting, hiring, and business planning. This position should have a pulse on your industry and online marketing expertise with the ability to predict trends. This position leverages relationships with industry analysts to forecast a predicted positive outcome—meaning understanding that the efforts will be successful in the end. Qualified candidates should have several years’ experience in leading a digital advertising agency or come from a digital platform company (Google, Facebook, etc.).

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For more in-depth detail on how to successfully build a digital media department, you can purchase my book here.

4 Lessons from Walt Disney on Entrepreneurship

While enjoying my recent vacation to Disney World with my family, I was struck by the ultimate vision and innovation of the amusement park’s founder. With over 600 million people visiting Disneyland since it’s opening on July 17th 1955, it’s clear that Walt Disney was one of the most successful entrepreneurs in history. On my trip, I found myself eager to learn more about Disney’s thoughts on innovation and entrepreneurship. Here are 4 inspiring tidbits that you can learn from his success story.

Speaking at Disney - 2013

Speaking at Disney, January 2013

1. Never Settle, Always Aim Higher

“Disneyland will never be completed. It will continue to grow as long as there is imagination left in the world.” – Walt Disney

From the beginning, Walt Disney’s ultimate goal was telling stories by animating objects. Cartoons, movies and theme park characters and rides are all inanimate objects brought to life by the power of imagination. Each Disney innovation pushed the envelope and standard of what was possible. Disney was known for his passion to do more. After successfully completing one project, Disney would immediately start on a new one. After finishing his film “Snow White and the Seven Dwarfs,” he immediately went to work on other feature films such as “Bambi,” and “Fantasia.” Following the creation of Mickey Mouse, Disney went on to create Minnie Mouse, Donald Duck, Pluto and many other iconic characters. He always wanted to achieve more and further develop his dreams.

2. Content is King

Magic-Carpets-of-Aladdin-Magic-Kingdom-Walt-Disney-World_50984394Some of the main attractions at Disney World are created around the concept of beloved Disney movies or stories. For example, the Magic Carpets of Aladdin allow kids to fly on a carpet. Developing attractions based on beloved stories, characters, and movies is the ongoing key to the success for Walt Disney World. Content, storytelling and overall customer satisfaction go hand in hand. Pirates of the Caribbean is a multi-billion dollar Walt Disney Company franchise encompassing a series of films, numerous theme park attractions, and spin-off novels as well as numerous video games and other media publications. The franchise originated with the Pirates of the Caribbean theme ride attraction, which opened at Disneyland in 1967, the last Disney theme park attraction overseen by Walt Disney. Disney based the ride on pirate legends and folklore. (Note: The original post referred incorrectly to the fact that the Pirates of the Caribbean movie inspired the lazy boat ride at the amusement park. It was the other way around.) 

Disney Executive Vice President, Global Marketing, Sales and Travel Operations Leslie Ferraro said defining an organization’s story informs and influences how it positions its brand.

“First, you must understand your consumer and build your marketing plan on those insights,” Ferraro said. “And, in our cluttered media age, story is more important than ever. What is your story? Find it. Tell it in a compelling fashion while being true to your brand, focusing on the elements of most interest to your consumers.”

3. Follow Your Passion

“All our dreams can come true, if we have the courage to pursue them.”- Walt Disney

Disney always had a love for drawing. He would draw in his spare time and he devoted most of his life to his artwork. He was even willing to do other jobs to fund his passion.
Finding your passion and following it is very difficult and takes courage. Just imagine how incredible it would be to do what you love everyday. So many people struggle to find the career they’re excited to wake up to every morning. Like Disney, pinpoint what you love to do, and sprint towards it.

Mickey_Mouse

4. Overcome Adversity

“Disneyland is a work of love. We didn’t go into Disneyland just with the idea of making money.” – Walt Disney

“All the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me… You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.” – Walt Disney

When the film industry learned of Disney’s plans to produce an animated feature-length version of Snow White, they were certain that the endeavor would destroy the Disney Studio and called the project ‘Disney’s Folly.’ Many people tried to talk Disney out of the project, but he continued to work on the feature. To obtain the funding to complete Snow White, Disney presented a rough cut of the motion picture to loan officers.

The film premiered at the Carthay Circle Theater on December 21, 1937 and at its conclusion the audience gave Snow White and the Seven Dwarfs a standing ovation. Today, Snow White and the Seven Dwarfs is a legendary classic. At the 11th Academy Awards, Walt Disney was awarded an honorary Oscar, and the film was nominated for Best Musical Score. The film is ranked in the American Film Institute’s list of the 100 greatest American films, which also named the film as the greatest American animated film of all time in 2008.

It takes courage to see your dreams through with doubts and insecurities surrounding you. Follow your heart, and work through the instability that comes along for the journey. Believe in your enthusiasm.

Walt Disney was an inspiration to many. His success story teaches us all valuable lessons that push us to aim higher. My recent trip has provided me with newfound confidence to imagine the unthinkable.

How have success stories from entrepreneurs like Walt Disney inspired you?

– Jason

Sources
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Got Funding?

Over the past few years, I have helped raise nearly $25 million dollars for Shoutlet. So it’s no surprise that several new entrepreneurs ask me about the process of obtaining Venture Capital funding. I’ve learned some very valuable lessons throughout the process, and I’m hoping that this post will help you examine all of your available options before you consider funding.

First, only take funding if you need it. It sounds like an obvious statement, but too many startups go out for funding just because they think they have to. I suggest to do whatever you can to self fund your startup before accepting funding.

Second, the days of funding an “idea” are over. Naive startups believe that you can simply come up with a good idea, get it funded, quit your day job and then start taking salary. Those types of funding events have not happened since the Clinton era. No investor funds an “idea” anymore. Venture Capitalist look for proven business models now. They only want to invest in a “sure thing.” My suggestion is to borrow and beg to get your idea to a prototype, sell some of it into the marketplace, then go for funding once you able to prove that it can scale.

A famous CEO told me once, “The second you take funding, you can never go back. Your business will be all about growing top line revenue and you’ll soon find yourself needing more funding to sustain your growth.” He was right. Once you accept funding, you work for your Board of Directors and shareholders, and you have an obligation to do what’s best for the company, with or without you there. I suggest examining all other options before going for funding.

Consider this story from my friend and fellow entrepreneur Jack Phan. He’s an entrepreneur that did it both with and without funding. I’ve asked Jack to share his story:

“In 1997, I was involved with an early Internet startup in Portland, Ore during the dot-com boom of the 90s called Handyman Online. By 1998, our technology for online lead generation, matching and lead distribution systems proved so successful that we were growing beyond our capacity and had to expand offices and take on more overhead. By 1999, we had raised nearly $26 million dollars in funding, hired a new CEO, opened nearly 30 physical offices nationwide and grew our headcount to 300+ employees. We spent several million dollars to hire a consulting firm to do an overhaul of our technology infrastructure, complete hardware upgrade and bring in enterprise level software to support a large business.

By 2000, we had given up control, burning through cash at a faster rate than we could grow revenues, and by spring of 2001, during the dot-com meltdown, we needed the next round of funding but our investors had all fled. The more money we raised, it appeared the more money we would need to keep growing and chase profitability. Eventually, we sold our assets to our biggest competitor and walked away with nothing.

However, it didn’t take long before we were back at it. By September of 2001, we had started a new company called ReliableRemodeler.com and vowed to grow this company with our own resources and not give up our equity if we didn’t have to. The goal was simple; grow with our own resources, build a solid team, wear as many hats as we could manage and try to double our revenues each year while maintaining control of our company.

By 2007, we landed #187 on Inc. 500’s Fastest Growing Private Companies by achieving more than 1100% growth. The offers started to come in and by February of 2008, we successfully sold our business to a Bay Area company in the lead generation space for all cash. Our patience, hard work and dedication finally paid off.  We probably could have grown faster had we taken on investor money like the first business but we would have given up control, equity and would have had to sell our business for at least 10 times what we sold it for just to achieve the same personal financial exit.

My advice is have a good business model first, take money only if you have to, do your job as an entrepreneur to add value, work your butt off, and build a business that can be self sustaining for a long time.  In the end, your hard work and dedication will pay off.”

- Jack Phan

Funding Sources (listing by recommended order of priority):

  1. Pre-sell – If your idea is solid enough, why not try pre-selling it to customers? When I first began Shoutlet, I sold the idea of our platform to clients by showing them a PowerPoint presentation well before it was actually built. I promised prospects a substantial discount and the opportunity to help shape my product roadmap if they ordered in advance. I funded the entire first version of Shoutlet from taking pre-orders.
  2. Friends and Family - Your own friends and family can be an excellent source of funding. It may surprise you how supportive they can be when you approach them for investment. Most families have a “rich uncle” that is more than willing to help. If you do get funding from family, I would make the process formal. Set a valuation and determine your terms of investment before you take their money. I’ve seen verbal deals lead to lawsuits later, which can be ugly for families. Also be clear about the risks involved in funding a startup.
  3. Bank Loan - After last year’s financial crisis, getting money from bank institutions is much more difficult than it used to be. I’d recommend a bank loan if you truly have faith that your product or service is going to sell immediately AND if you have collateral to offer the bank (such as your home, car, or 401k account). My advice is to never put yourself into a situation that you can’t unwind. Always make sure that you can pay off the loan even without selling your product or service.
  4. Angel Funding - Often you can obtain funding from high net worth individuals in your hometown. These people can often be found by networking with lawyers, bankers, accountants. Be sure that the individual is an accredited investor. There are certain rules you need to follow to stay out of legal trouble when going the Angel route. Often Angels invest in the individual, not necessarily the company.  It’s much easier to get Angel investors than it is to go out for Venture Capital funding.
  5. Venture Capital - Venture Capital money is the toughest to get. The folks that run these firms are often Harvard or Stanford educated with several years of experience in funding and selling companies. They receive hundreds of business plans per month, and only jump on the ones that completely align with their firm’s investment criteria. To obtain Venture Capital, you often have to already be generating revenue with a proven business model. Venture Capitalist invest in the company, not the individual. They want to see how you can scale your company and give them a ten times multiple on their investment. To pitch a Venture Firm, I recommend having two pieces to your pitch: 1) A PowerPoint presentation that can tell your story in less than 10 slides and 2) An Excel sheet that proves your revenue model. Note: VCs think in bullet points. Be clear, concise, and to the point. You can visit the National Venture Capital Association for information on Venture Capital. Also, it may be helpful to download a Term Sheet so that you can see in advance what your investment terms might look like. In addition, be sure to check out The Funded to see how well your potential Venture Capital investors are rated by other entrepreneurs.
  6. Crowdfunding - Kickstarter gained significant attention as a way to get funding for your new product or service through the internet. Crowdfunding allows inventors to list their idea on a popular website in an effort to raise funds before the idea goes to market. Often several hundred (or thousand) people will invest or pre-order your product before you build it. I’ve found this process to be very effective for product (not as good for services) that you want test the market before you go bigger.

Types of Investment Instruments (Definitions from Wikipedia):

  1. Preferred Stock - Preferred shareholders have priority over common stockholders on earnings and assets in the event of liquidation and they have a fixed dividend (paid before common stockholders). I’ve seen almost all Venture Capital deals use Preferred Stock. Basically, they get their back before you do. They also get nifty little add-ons like dividends and participation rights (extra ways of squeezing cash out).
  2. Common Stock - The type of stock most often used for investment. If your legal structure is currently a Limited Liability Company, you might have to change it to a C Corporation to begin selling Common Stock. Most Angel investors are fine buying Common Stock as it’s the same type of ownership you would have an the entrepreneur. One of the only ways for an entrepreneur to get Preferred Stock is if you put a significant amount of your own cash into the company.
  3. Warrants - A warrant is a security that entitles the holder to buy the underlying stock of the issuing company at a fixed exercise price until the expiry date. Warrants and options are similar in that the two contractual financial instruments allow the holder special rights to buy securities. Both are discretionary and have expiration dates. The word warrant simply means to “endow with the right,” which is only slightly different from the meaning of option.
  4. Debentures - A debenture is a document that either creates a debt or acknowledges it, and it is a debt without collateral. In corporate finance, the term is used for a medium- to long-term debt instrument used by large companies to borrow money. Basically, it’s give companies that opportunity to borrow money from investors instead of going to a bank.
  5. Stock Options - A call option on the common stock of a company, granted by the company to an employee as part of the employee’s remuneration package. The objective is to give employees an incentive to behave in ways that will boost the company’s stock price. If the company’s stock market price rises above the call price, the employee could exercise the option, pay the exercise price and would be issued with ordinary shares in the company. The employee would experience a direct financial benefit of the difference between the market and the exercise prices. If the market price falls below the stock exercise price at the time near expiration, the employee is not obligated to exercise the option, in which case the option will lapse. Restrictions on the option, such as vesting and non-transferring, attempt to align the holder’s interest with those of the business shareholders.
  6. Phantom Stock - A form of compensation where a company promises to pay cash at some future date, in an amount equal to the market value of a number of shares of its stock. Sometimes companies prefer to use Phantom Stock for its employees because it gives them similar benefits to Stock Options, but without voting rights. Additionally, Phantom Stock doesn’t need to be purchased at a later date like Options do, so there is no money out of pocket. However, Phantom Stock is often taxed like a cash bonus, so employees cannot take advantage of long-term capital gain tax discounts like they can with Options.

So, where do you start? That’s a good question. You have planted the seeds, and now it’s time to develop the roots of your company with a strong management team. Once you set a solid foundation in place, your company will flourish. Investors bet on your teams as much as they do your company, so select your branches wisely.

Remember at the end of the day it’s all about control. Even though Facebook has raised several rounds of capital, Mark Zuckerberg still controls all of the votes for Facebook. If you position yourself correctly, you can do the same.

I hope you found this post helpful as you consider raising capital. Let me know if you have any questions or need any additional advice for your own funding process.

-Jason

Technically Healthy

The New Year somehow brings out the ambition to make changes in your life. It’s a fresh start, and a time of renewal and change. Nearly half of all Americans make New Year’s resolutions, and of those, almost 40 percent are related to weight loss. This is why you see an influx of weight loss commercials every January. In 2013, I am making a commitment to living a healthier lifestyle. To accomplish this, I plan on using technology to help meet my fitness goals.

Today, there are countless tools available for you to help get in shape. From iPhone Apps to websites, everyone has a solution. Listed below are a few of my favorite devices:

bloodpressureThe Withings Smart Blood Pressure Monitor

  • Helps you measure, track, graph and share your blood pressure directly from your iPhone, iPad or iPod touch
  • Application available for free on the iTunes App Store
  • Instant blood pressure and pulse measurement
  • Automatic backup
  • Health follow-up in your pocket

iphonewithings

 

Withings Wireless Scale WS-30

  • Track your weight and Body Mass Index (BMI)
  • Free Withings Health Companion app to visualize weight trends, set goals, and monitor progress
  • Position Control technology for high-accuracy weighing
  • Weight data uploads automatically
  • Multi-user support with automatic recognition

jawbone-up-iosUP by Jawbone

  • At least one year of battery life, UP™ is a system that takes a holistic approach to a healthy lifestyle
  • The wristband tracks your movement and sleep in the background
  • The app displays your data, lets you add things like meals and mood, and delivers insights that keep you moving forward

 

 

 

Additional Website:

lss1_logo

SparkPeople 
SparkPeople.com is a leading weight loss website that teaches millions of people how to live a healthy lifestyle and stop dieting for good. The SparkPeople philosophy, combined with smart motivational strategies and a collection of personalized online tools, has helped thousands of members lose weight and keep it off.

Additional iPhone App:

om

MyOmBody 
MyOmBody is a wellness companion on a mobile phone that will allow you to build, collect and analyze a holistic ecosystem of personal health data. Providing a positive, integrative, and non-prescriptive support, it aims to help you discover how to be as healthy and happy as nature intended.

I’ll be tracking my progress on this blog, so be sure to check back to see if these technology tools are useful or not.

What are your favorite fitness technology tools?

7 Must Read Books Before Starting Your Company

No book can replace the real experience of managing your own company; however there are several lessons that are worth learning ahead of time. I often joke with my colleagues that I earned my “street MBA” via the business book section of Amazon.com. You can learn a tremendous amount simply by studying the leaders in your industry that have succeeded before you. The following book recommendations offer a starting point to help guide you through your entrepreneurial journey.

Becoming a Category of One
By Joe Calloway

BecomingoneBecoming a Category of One reveals how extraordinary companies succeed, and offers you the tools and ideas to help your business emulate their success. Packed with real case studies and personal reflections from successful business leaders, it helps you apply the best practices of the best companies to set yourself apart from your competitors and turn your business into a market leader.

Jason says: This book was instrumental in helping me identify new markets for Shoutlet. While every one of our competitors began to offer the same functions, we chose a different path. This book is uplifting and insightful. Use it for when you need to find your competitive edge.

It’s Not How Good You Are, Its How Good You Want to Be: The World’s Best Selling Book
By Paul Arden

Itsnothowgoodyouare It’s Not How Good You Are, It’s How Good You Want to Be is a handbook to make the unthinkable thinkable, and the impossible possible. The world’s top advertising guru, Paul Arden, offers up his wisdom on issues as diverse as problem solving, responding to a brief, communicating, playing your cards right, making mistakes and creativity, all notions that can be applied to aspects of modern life. This book provides a unique insight into the world of advertising into easy-to-digest, bite-sized spreads.

Jason says: I’ve made this book a required read for many new employees. My favorite takeaway is that most people don’t realize that the current job they are in could be the one that makes them famous. It teaches you to master your current role through a series of inspirational stories from the late Paul Arden, former Creative Director of one of the world’s leading advertising agencies. Use this book if you are searching for meaning in your current job.

Think and Grow Rich
By Napoleon Hill

ThinkThink and Grow Rich is a must for anyone wanting to improve their lives and their positive thinking. There have been more millionaires and indeed, billionaires, who have made their fortunes as a result of reading this success classic than any other book every printed. This is a true masterpiece with the fundamentals of the Success philosophy.

Jason says: I tell the “three feet from gold” story in this book all of the time to friends, employees, and other entrepreneurs. In this book you’ll discover that many people give up on their dreams due to a what is often a short-term setback. The stories in this book will give you confidence enough to stick with it as you’re probably only “three feet from gold.”

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition
By W. Chan Kim and Renee Mauborgne

BlueWritten by the business world’s new gurus, Blue Ocean Strategy continues to challenge everything you thought you knew about competing in today’s crowded market place. Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, authors W. Chan Kim and Renee Mauborgne argue that lasting success comes from creating ‘blue oceans': untapped new market spaces ripe from growth. And the business world has caught on – companies around the world are skipping the bloody red oceans of rivals and creating their very own blue oceans.

Jason says: This book is a much more scientific take on the above Becoming a Category of One. It’s written by a couple Harvard professors, and I found it to be a dry read; but it is also very effective in helping to define your competitive differentiators. Often the answers are right in front of you, and this book will help you find them.

Rework
By Jason Fried

Rwork

Rework shows you a better, faster, easier way to succeed in business. Read it and you’ll know why plans are actually harmful, why you don’t need outside investors, and why you’re better off ignoring the competition. The truth is, you need less than you think. You don’t need to be a workaholic. You don’t need to staff up. You don’t need to waste time on paperwork or meetings. You don’t even need an office. Those are all just excuses. What you really need to do is stop talking and start working. This book shows you the way. You’ll learn how to be more productive, how to get exposure without breaking the bank, and tons more counterintuitive ideas that will inspire and provoke you.

Jason says: This book proves that you can create a successful company without an endless supply of resources. I used this book with my product development team to help them continue to think like a startup as we grew. Read this before you go out to get a big round of funding, and it will humble you.

The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything
By Guy Kawasaki

Art

A new product, a new service, a new company, a new division, a new organization, a new anything—where there’s a will, here’s the way. It begins with a dream that just won’t quit, the once-in-a-lifetime thunderbolt of pure inspiration, the obsession, the world-beater, the killer app, the next big thing. Everyone who wants to make the world a better place becomes possessed by a grand idea. But what does it take to turn your idea into action? Whether you are an entrepreneur, intrapreneur, or not-for-profit crusader, there’s no shortage of advice available on issues such as writing a business plan, recruiting, raising capital, and branding. In fact, there are so many books, articles, and Web sites that many startups get bogged down to the point of paralysis. Or else they focus on the wrong priorities and go broke before they discover their mistakes.

Jason says: This book taught me how to create a cadence to get our company marching to the same beat. I learned about mantras and the importance of communication in a fast growing company. Use this book to help create meaning for your company.

 

Drive: The Surprising Truth About What Motivates Us
By Daniel H. Pink

DriveMost people believe that the best way to motivate is with rewards like money—the carrot-and-stick approach. That’s a mistake, says Daniel H. Pink (author of To Sell Is Human: The Surprising Truth About Motivating Others). In this provocative and persuasive new book, he asserts that the secret to high performance and satisfaction-at work, at school, and at home—is the deeply human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world. Drawing on four decades of scientific research on human motivation, Pink exposes the mismatch between what science knows and what business does—and how that affects every aspect of life. He examines the three elements of true motivation—autonomy, mastery, and purpose-and offers smart and surprising techniques for putting these into action in a unique book that will change how we think and transform how we live.

Jason says: This book changed the way I manage employees. A mid-level manager I was used to doing the tasks for my employees. As I became a CEO that strategy was no longer an option. Use this book to teach you how to empower your employees to become the extraordinary thought leaders that they are capable of becoming. Most people thrive on solving challenges. This book will show you how to lead your employees to greatness.

What is the best startup related book that you would recommend?

– Jason