Creating a new business structure around a partnership or multiple founders is one of the most single important aspects of starting a new business. Like a business plan, your corporate structure, how you allocate shares, profits and control of the new business will help determine the fate of your company as well as the company culture (anywhere from hostile to win-win). This is a relationship, or more accurately, a marriage (so the culture would be more like dysfunctional to loving). Like a marriage, I highly recommend looking to the end of the company or partnership as you create the beginning – like a pre-nup. Seriously. Have everything worked out to cover the end and you will be good to go in the beginning. Because you never know how the relationship(s), or company, will end – will you be bought out? Go public? Be taken over? Get investment? Change direction to one that not everyone wants to buy into? Dissolve? Will founders or partners or you have a change of circumstances that lead to a desire to end the relationship? Will someone die and you are suddenly stuck with a spouse as a partner? All this needs to be spelled out upfront, because once the horse has left the barn…well, you all know how that one ends.
When I speak to multiple stakeholders at the start of their company, I go around the room and point out a scenario where one person decides they want to take more control of the company – maybe because they feel they are doing more work, or contributing more value or whatever. And ultimately that leads to someone else being screwed. I’ve had co-founders come back to me later and tell me that the scenario I played out in the meeting was exactly what happened. So protect yourself and your partners BEFORE YOU BEGIN.
George Deeb in Alley Watch provides some helpful hints and considerations that should be taken into account about how to split up equity in a startup.
I just saw Janet Falk’s blog on how she managed a placement for one of her clients and it made me mad and sad. Not about Janet. She does a great job. But about a company that I ran into a few years back that has an amazing story and results from a new kind of toothpaste. I’ve used the product (the company was smart enough to hand out, nicely packaged I might add, samples at a bootcamp/pitch fest). The “toothpaste” stops bleeding gums, actually heals gums, and stops all other kinds of gum and related ills. So why has no one ever heard of it? Because senior management of the company doesn’t believe in marketing or PR. Marketing directors come and go but can’t get senior management to invest in their own success. So many startups don’t understand the $$$ ROI power of marketing and PR. And if they manage to stay on the market at all, it’s because of a tiny amount of traction they’ve built. Most companies fold. Companies with good ideas and great products, like this toothpaste. Make sure you’re not one of them.
So you all know the phrase lead, follow or get out of the way? Well, when it’s your company, you have to lead or your business will get pushed out of the way. Change and resistance to it comes up a lot when you own your own business. You’re constantly challenged.
A while back, I called in one of my teams (information architect/writer, programmer and designer) and told them we had a new project. They were eager to sink their teeth into it. I said, before I tell you about the assignment, I have to warn you that the client will be very difficult to deal with and a real micromanager. They didn’t care and kept pushing to learn who the client was. I said “me”. I knew myself well enough to know that I needed my website changed but that if I took the helm, we’d never get the job done – plus, I’d drive everyone crazy (including myself) trying to micromanage the project. (This same situation arose when I started writing my book, alone. I wrote and re-wrote the first chapter for at least three or four months and was just stuck at that point until my co-author came aboard and said, hey we’ll go back and fix it later, let’s just get the whole thing down on paper first – which is what we did).
My team took the assignment, gave me specific tasks to do and otherwise went away and came back with a really nice product. I knew they would do that – so I just stood back and let them make the changes what needed to be done.
Maria Moraca touches on three key areas to work on in her blog: http://ht.ly/kULcZ
It’s a brave new world we are seeing and must work within. As an evolving story, we have to consider how online advertising will be affecting the consumer’s brain? Neuro-marketing research is already investigating the effect online neuro-marketing will have on our brains in the current and evolving Internet/PDA world.
As we have recently discussed in a previous blog, researchers have learned that when the consumer first receives a message, it hits a section of the brain called the Nucleus Accumbens (NAcc). This is the reward/punishment, pleasure/pain “headquarters” of the brain. By evaluating the amount of activity in such demarcated brain areas, the prefrontal cortex and the insula, neuro-marketing’s use of FMRI (Functional Magnetic Resonance Imaging) is working on a process to foresee how a consumer makes shopping decisions. For example, if the NAcc indicates a positive desire response from a brand message over a more negative doubt response –“Should I be spending money?” then the pre-frontal cortex could believe that it is getting a great deal and making a wise choice (such as better prices, bonuses, and other personal satisfactions).
Drawing by Art Winters
Neuro-marketers are seeing the possibilities of using FMRI to examine and better understand the workings of consumers’ brains.
With this new knowledge they hope to develop new ways to initiate and stimulate consumer wants and needs. Don’t forget that it has always been marketing’s purpose to stimulate the consumer’s cravings and increase AIDA: attention, interest, desire and action.
If this concept makes you feel queasy, what kind of debate might occur if companies/brands have more invasive ways to communicate to and influence consumers in how to respond to a brand’s image, its brand story, and its brand positioning for superiority???
What kind of society will develop if this becomes the normal practice rather than a seemingly science fiction prediction?
OMG – What’s Next??? We may not be LOL’ing for long…….
Arthur & Peggy Winters co-teach SXB 200 Brand Marketing Communications for Image & Meaning and SXR 050 Intro to Branding: The Art of Customer Bonding.
Have you heard about WordPress?
If you haven’t you are
- Not living on Planet Earth
- Not reading this page which was made using WordPress
WordPress is one of the most versatile and user-friendly web publishing applications. It has been enjoying rapid and widespread use over the past few years. Find out how easy it is to make web sites, change or create themes, add plugins and expand your offerings to clients – or maybe you just want to create a new web site for yourself.
Do all of this without having to know a lick of code!! How crazy is that?!?!?
Learning WP is a skill that you can hardly live without in today’s world whether you are just making a web site or are going to work for others.
And besides. Its too much fun.
Here is where you can get started learning something that is fun and useful.
Details And Registration
For questions about this class contact Bud Kraus, email@example.com.
Bud Kraus teaches CTD 600 Web Design: HTML , CTD 605 Web Design: Cascading Style Sheets, and CTD 613: WordPress.
Market research – I’m referring to primary market research — takes time and energy and sometimes money. But the results are amazing and don’t cost nearly as much as the time, energy and money you will waste by NOT doing it. When you ask open-ended questions to your customers, the responses you get will help you cut through the clutter and develop a communication that speaks directly to the audience you want to sell to (or whatever your goal is with that audience).
And this is where you, as a small business, have it over the big guys. Large companies are so invested in a point-of-view (usually management’s point-of-view, not that of their customers) that they can’t make an adjustment to respond to the information in front of them. Imagine being at the helm of a huge cargo ship and having to make a u-turn in a space as wide as 42nd St. Not only is it not easy, it’s almost not do-able. So when situations come up that require a quick response to get to the market, the big firms are basically out of luck. Which leaves lots of room for you … if you’ve done your research properly.
Check out Isaiah Adams’ post and how research can help you … and hurt you if you’re not listening to your audience.
This is the title of an article just published in The New York Law Journal (I’m one of the authors). It’s a cautionary tale about fundraising. It gives relevant details about the JOBS act and how that applies to fundraising – and it’s not the panacea many are mistakenly making it out to be.
It’s also about losing focus on the prize – moving your business forward – while distracted by the dazzle – the allure or promise of raising capital any way you can. The article details what’s legal and not legal in the world of raising money for your company. I hope you use it as a guide to do your fundraising the correct way so you can avoid the fate and outcomes (jail time?) of this unfortunate company.
Great line-up of expert speakers for my licensing class which starts tomorrow!
Licensing is a great source of primary or additional income for your product(s). Learn the basics about how to navigate the world of licensing in four weeks! And get the lowdown from people who live licensing!
My guest speakers this term will be:
David Kalow – An Intellectual Property attorney with fashion product experience
Arnold Burstein – A Licensing Agent who knows all the in’s and out’s of the licensing world and is the Chair of the NY Chapter of the Licensing Executives Society
Serena Godwin – Licensing Manager, Natori and (surprise guest speaker?)
Nathan Fleisig – An FIT faculty who specializes in licensing names and products
Outerstuff: Director of Licensee Global Social Compliance, and an FIT faculty member.
It’s not too late to register!
CEO 035 (55A) Licensing
Thurs., April 25, May 2, 9, 16