Thursday, June 28, 2012

Start-Up Capital Democratized: Long Live Crowdfunding!

Back in 1997, the British prog-rock band Marillion was having trouble scraping up the cash to embark on a tour of North America.

This news quickly spread among the group’s devoted fans, who rallied – without the band’s knowledge – and managed to raise $60,000 to help finance the tour. Four years later, Marillion’s hardcore fans, known as “Anoraks,” financed the band’s 2001 record Anoraknophobia by pre-buying copies of an album not yet made.

Just over 10 years after the release of Anoraknophobia, this type of phenomenon now has a name: crowdfunding.  Crowdfunding is getting a lot of media and business attention and there are sites springing up weekly where people can finance start-ups, artists, community projects and charities. What’s unusual about crowdfunding though, is that until now it has only been legal if the funders had no expectation of financial gain. They could receive some sort of benefit-in-kind like an album for example, but it wasn’t considered a bona fide investment – until recently.

Thanks to our slow-jamming President who signed the JOBS Act (Jumpstart Our Business Start-ups in early April 2012), the Securities and Exchange Commission (SEC) is introducing rules that will allow almost anyone to invest in new companies – up to a total of $1 million per year – and receive equity in return, as long as the middleman rounding up the cash is SEC-registered.

The new rules should be in place by the beginning of 2013. This is great news, considering that in our down economy, it’s already difficult enough for start-ups to raise the capital needed for a proper business launch.

So hooray for crowdfunding! This is exactly what those entrepreneurs without access to traditional finance or VC funding need.

The legislators in Washington and suits on Wall Street tell us that the Great Recession is over. But considering the miserable jobs report we got last month, it’s clear that for too many Americans the financial pain endures without respite. Enormous numbers of our young people are graduating from college only to find that the job market simply doesn’t have a place for them.

So, what are many of them doing? They are starting their own businesses, of course. And already, corporations such as Fundable are gearing up to inaugurate investment vehicles wherein anyone with a little cash to spare can help a start-up get a foothold – in exchange for a stake, regardless of its size, in the company.

Let’s hope this democratization of start-up capital fulfills its promise as a fresh new way to support America’s next wave of forward-thinking entrepreneurs.  I’m all for that.

Monday, June 25, 2012

Separating the Wheat From Chaff: Can We Focus on What’s Really Important?

I frequently comment that I can’t multitask. And yet I often find myself doing just that.

I frequently talk to clients on the phone while emailing others while fielding a barrage of Google Chat questions from my employees. When you have to juggle so many balls – handling clients, hunting for new ones, taking care of employees and family – sometimes your brain just sort of gets stuck in a groove and you find yourself spinning your wheels without really getting anywhere.

A few weeks ago, right after barely emerging from one of the most hectic weeks I’ve ever had, I wrote a post about how important it is to find that illusive work-life balance and how our ever-present mobile devices make it increasingly difficult to abandon the cares of the office even for a couple of hours.  To reinforce my argument, a recent post from the Harvard Business Review goes further, raising the issue of whether all of the whirlwind activity we engage in simultaneously is actually helping us meet our goals in a timely fashion.

HBR blogger Greg McKeown argues that it isn’t, and I agree with him. I call this the confusing activity with achievement syndrome.  McKeown also suggests that narrowing our focus instead of trying to do everything at once will help us get each of the things we’re trying to accomplish done better and more quickly.

And he certainly has the data to back up his argument. In 2009, researchers at Stanford found that heavy media multitaskers are more susceptible to distraction by irrelevant stimuli. On top of that, they also have a reduced ability to switch tasks easily.

Of course, this information can also be arrived at via plain old common sense. The more things we do at the same time, the worse we do each thing.

In his post, McKeown links to another HBR piece, this one about Steve Jobs and how the late Apple co-founder pulled the then-moribund company from the brink of bankruptcy in 1997 by jettisoning most of the products the company was making. Some of those products were bringing in profits, but Jobs, famous for his devotion to simplicity, chose to focus on just four product lines. That’s it.

And we all know how that one worked out for Apple, don’t we?

I’ve been having to do similar things at ThinkInk – albeit, of course, on a much smaller scale. For example, the company is growing and I am constantly looking at ways to make the agency more efficient while delivering the very personal service we have delivered as a smaller operation. And I am also forced to do the cost-benefit analysis of keeping some clients - and not because they cant’t pay. Sometimes you get into bed with the wrong partners. If that’s the case, my advice is to give up what isn’t essential or creating value to your agency so you can focus on the essentials and value-creators better.

To be sure, I don’t see myself going to the lengths the girl in this droll video does to eliminate the distractions of her gadgets. But I get the message, and I can see myself making a conscious effort to quit multitasking so much.

Maybe we all can. And actually get more done. And done better.

Here’s hoping.