MONEY Startups

This Woman Turned a Backache Into a Million-Dollar Home Business

Katherine Krug

Working around the clock at a mobile app startup called Everest, Katherine Krug suffered a side effect from long hours at her desk: sciatica.

The back pain was intense, she recalls: “It was hard for me to sit.” But in her quest to alleviate the pain, Krug, now 33, stumbled onto a million-dollar idea.

The back pain itself was her inspiration. Unable to attract enough users, Everest shut down in 2012, and Krug found herself “emotionally spent” and “trying to figure out what to do with my time.” So she and a friend began experimenting with ways to create a strap that would provide back support.

As she mentioned the idea to friends and acquaintances, she discovered many fellow sufferers among them—and began to suspect there was a big market for a product that could help. Asking around, she was referred to industrial designers who helped her create a prototype for the supportive strap. She launched a new startup, Better Back, last year and now runs it from home in San Francisco.

Krug didn’t initially have the money to manufacture her product so she turned to crowd funding site Kickstarter. By effectively letting investors put in pre-orders for the product, the campaign raised $1.2 million. Krug plans to start shipping the preorders, currently priced at $65, this fall.

Believe it or not, Krug is one of many solo entrepreneurs who has grown a business to more than $1 million in revenue in recent years. Data released last week by the U.S. Census Bureau counted 30,174 “nonemployer” firms that brought in $1 million to $2,499,999 in 2013, up 2% from the year before.

So how did Krug create her million-dollar, work-at-home business? Here were some her successful strategies.

Get clear on your goal. Krug is a fan of Tim Ferriss’s book, The 4-Hour Workweek. But given the realities of the startup scene, she found the goal of working four hours a week elusive. “No matter how much you try to conceive of a business that gives you some work-life balance, there’s so much work that goes into it,” she says.

After Everest, she worked as interim COO for a company she really liked and was offered a permanent position, but, she says, “I had this nagging feeling in my stomach that something wasn’t right.” She realized she does her best work when she has flexibility in how she works.

Being an entrepreneur offered the freedom and control over her schedule that she wanted, but she wanted to do it differently this time. She didn’t want to slip back into her old lifestyle, where juggling management of her team with getting the actual work done led to very long hours. “I had all of these health issues from constant stress and lack of sleep,” she says. At the same time, though, she did enjoy working with others, so she looked for a business idea where she could still work in a collaborative way.

Design a business around your ideal lifestyle. Krug decided to use a business model where she works with a flexible team of contractors. “I’m really focusing on finding people who don’t need management,” says Krug. “I think a contract model really serves that. You can get people who are experts in their own field. You come to the table as equals and can have a wonderful collaboration.”

To launch the business, she contracted with two industrial designers who live in Washington State and Maine; enlisted a marketing firm based in Brazil; and hired a virtual assistant in the Philippines through the freelance platform oDesk, which was recently renamed Upwork. To keep everyone in sync, she uses digital tools such as Skype, Google Docs, and Trello, an organizing site.

Her approach is not unusual among solo businesses, according to Steve King, a partner at Emergent Research, a firm in Lafayette, Calif., that studies the independent workforce. A 2014 study by MBO Partners, to which King’s firm contributed, found that 38% of independent workers hired independent contractors in the past year, with most of these contractors doing the equivalent of a one-quarter time worker. Generally, says King, these “virtual” companies turn to contractors because they don’t have a consistent need for help, don’t want to manage employees, and want to stay agile.

Keep it lean. One thing that helped Krug grow her business quickly, she says, was her familiarity with the ideas of Eric Ries, author of The Lean Startup, and serial entrepreneur Steve Blank.

“It’s all about taking an idea—before you spend huge amounts of money and time bringing it to life—and doing cheap and easy iterations of it,” she says.

Using Kickstarter made this easier. By promoting her idea on the site, she quickly took the pulse of the marketplace. When more than 16,000 people responded by making pledges or placing pre-orders, she had her proof of concept—and a team of potential beta testers. Dozens of people who wanted to be distributors and partners also contacted her, she says, giving her confidence that the product had traction.

Expand your network. Krug didn’t know everyone she needed to create her product, but she wasn’t shy about asking people in her network for referrals—and then asking these new contacts for more intros until she found the help she needed. An industrial designer she found, for instance, was “a friend of a friend of a friend of a friend.”

Set one meaty goal a day. Krug sets one important task a day—like “Find an industrial designer”—to tackle first thing in the morning. That keeps her from getting distracted by tasks that don’t move the business forward in a meaningful way.

In a startup, says Krug, “There’s always more to get done. I think a lot of people abandon their vision because they feel so paralyzed by how much there is to do. They get stuck.”

She’s also built in a safety valve to prevent burnout. Once she completes her key task, she gives herself permission to take a break. “If I have energy to do more I will move onto the next goal,” she says. “There are some days where the one thing is so hard I’m depleted. I give myself permission to say ‘That was enough’ and pick up again the next day—again focusing on only one thing.”

TIME Careers

These Jobs Are Most Likely To Be Taken by a Computer

Gerard Julien—AFP/Getty Images A man moves his finger toward SVH (Servo Electric 5 Finger Gripping Hand) automated hand made by Schunk during the 2014 IEEE-RAS International Conference on Humanoid Robots in Madrid on November 19, 2014.

Great news, dentists!

Telemarketers’ jobs have the highest chance of being automated, according to recent report. Other positions with huge potential for being overtaken by robots? Cashiers, tellers and drivers, among others, according to this new NPR interactive.

While telemarketers have a 99% chance of one day being totally replaced by technology (it’s already happening), cashiers, tellers and drivers all have over a 97% chance at being automated. Many positions within the “production” category put together by NPR, including packaging and assembly jobs, tend to rank highly as well.

The job with the lowest shot at being overtaken by technology in the future? Mental health and substance abuse social workers. They have a 0.3% chance, according to the data. Occupational therapists also rank at 0.3%, while dentists, surgeons and nutritionists appear pretty safe at just 0.4%.

Per NPR:

The researchers admit that these estimates are rough and likely to be wrong. But consider this a snapshot of what some smart people think the future might look like. If it says your job will likely be replaced by a machine, you’ve been warned.

To play around with the complete data, check here. But beware, it’s pretty addicting.

TIME Economy

This Stat Is One Big Reason the Recovery Has Been So Weak

Fast Food Workers Protest For Increased Wages Ahead Of McDonald's Annual Shareholder Meeting
Scott Olson—Getty Images Fast food workers and activists demonstrate outside the McDonald's corporate campus on May 21, 2014 in Oak Brook, Illinois.

Almost half of American workers don't have a full-time job

The Commerce Department’s announcement Friday that GDP growth was negative in the first quarter of this year, has analysts scratching their heads, searching for reasons the economic expansion, now in its sixth year, hasn’t yet reached escape velocity.

One explanation? The jobs recovery has been historically weak, both in terms of the pace of job growth and the quality of jobs that have been added.

A report released last week by the Government Accountability Office underscores this point. According to the GAO, a whopping 40.4% of U.S. workers are contingent as of the most recent available data in 2010 — meaning they work some in some other arrangement besides a standard full-time job.

Reads the report:

We found that compared to standard full-time workers, core contingent workers are more likely to be younger, Hispanic, have no high school degree, and have low family income. These contingent workers are also more likely than standard workers to experience job instability, and to be less satisfied with their benefits and employment arrangements than standard full-time workers. Because contingent work can be unstable, or may afford fewer worker protections depending on a worker’s particular employment arrangement, it tends to lead to lower earnings, fewer benefits, and a greater reliance on public assistance than standard work.

This rise of part-time, contract, and other sorts of non-permanent work arrangements has caused our current economic recovery to be dominated by consumers who are wary of spending — or simply aren’t being paid enough to power our consumer-driven economy.

This is why many economists, like Vice President Biden’s former Chief Economist Jared Bernstein, have stressed the importance of policies that would lead to full employment, like higher infrastructure spending, work-sharing programs during downturns, and loose monetary policy.

In an environment of full employment, competition for workers would require employers to offer higher pay and better conditions in order to retain their workforce. One of the few times the U.S. economy reached full employment was in the late 1990s, and it was also one of the few periods in past forty years where the median American worker saw significant and sustained growth in his or her wages.

TIME History

United Once Offered Unbelievable ‘Men-Only’ Flights

United Airlines - Super DC
Bill Peters—Denver Post via Getty Images United Airlines - Super DC

It operated these exclusive routes until 1970

Mad Men might have aired its final episode, but don’t worry — all you need to get your fix of jaw-dropping sexism is to open an aviation history book.

Take for instance this find over at the blog Boarding Area, which recently dug up some old ads from between 1953 through 1970. That’s when United Airlines offered flights for “men only,” where wealthy businessmen could enjoy complimentary cigars, cocktails and a full-course steak dinner in the exclusive company of other men (besides the stewardesses, of course).

According to Boarding Area, these flights were operated in two routes, New York to Chicago and Los Angeles and San Francisco. Flights would leave at 5 p.m. in each of the four cities, six days per week, excluding Saturdays.

Here’s how United’s ad copy pitched it:

Relax after a busy day on this special DC-6 mainliner flight. You’ll enjoy the informal, club-like atmosphere. Smoke your pipe or cigar, if you wish, and make yourself more comfortable by using the pair of slippers provided . . . take off your coat, and stretch out in a deep, soft Mainliner seat. Or, enjoy congenial company in the lounge.

Take advantage of may special services on this flight. Closing market quotations are available and you favorite business magazines. If you’d like do some some work, your stewardess will arrange a table for you.

Eat your heart out, Don Draper.



TIME Media

Netflix Accounts for More Than a Third of All Internet Traffic

Streaming service's share of online traffic is approaching 40%

Netflix’s dominance over our streaming habits is only continuing to grow. According to a new report from Sandvine, Netflix now accounts more almost 37% of downstream Internet traffic in North America during peak evening hours, up from about 35% in November. The company’s share of online traffic has been ticking up steadily as it has built its subscriber base over the years. Netflix now has more than 40 million members in the U.S. and more than 60 million globally.

Still, Netflix isn’t the only company seeing spikes in usage. Sandvine found that HBO’s streaming platforms HBO Go and HBO Now saw a 300% increase in usage during the season five premiere of Game of Thrones in April. And downloadable content for Call of Duty:Advanced Warfare accounted for 12% of traffic on one North American broadband network on the day it was released.

TIME Apple

Apple Is Getting an Unexpected Huge New Customer

New York City Exteriors And Landmarks
Ben Hider—Getty Images A general view of the IBM The International Business Machines Corporation offices on Madison Avenue on March 11, 2014 in New York City.

Big Macs for Big Blue

As its newfound partnership with Apple ramps up, IBM has announced that it’ll be offering its employees Mac computers, 9to5Mac reports.

A memo to employees said that IBM workers would be able to select from a MacBook Pro, a MacBook Air, or a PC when a new workstation is set up. The company reportedly plans to have around 50,000 MacBooks in use by the year’s end.

The move is another step in a stunning reversal of Apple and IBM’s longstanding rivalry. Last year, IBM and Apple announced a partnership to launch “made-for-business apps” for iPhones and iPads. That historical deal came as IBM is doubling down on the enterprise and service offerings, rather than personal computers. IBM sold its PC unit to Chinese technology company Lenovo in 2005.

TIME Startups

How the Cloud Is Helping Startups Grow Lightning-Fast

This company is teaching the cloud to see while using it to grow

In business, success is often about seeing the future. For instance, CamFind co-founders Brad Folkens and Dominic Mazur caught a glimpse of it in 2011, when they noticed search engine traffic on desktop computers was declining. Fewer people were using their PCs to look things up because they were running queries on their mobile devices instead.

As Folkens and Mazur looked deeper, they also saw how search habits differed on smartphones and tablets versus desktops. On desktops, people mostly use Google for whatever they’re looking for. But on mobilde devices, if people want to find a restaurant, they’ll search with the Yelp app. If they’re looking for a work contact, they’ll use LinkedIn. For news, the New York Times app might be their go-to. And if they wanted to find out what spider just bit them, well, they were in some trouble.

“We found Google Goggles (a search engine that ran queries against photos) only answered queries correctly one in twenty times or at best one in ten times,” says Folkens, the CamFind’s CTO. “We looked at creating an image recognition platform that would output answers 100% of the time, with a varying degree of detail.”

Camfind’s image recognition platform works much differently than the kinds of search engines that came before it. Previously, when a search was run, the computer would show exact results, or nothing at all. But with some of the deep learning going on in cloud connected computing, CamFind can gradually come up with the right answer — in an instant.

For example, let’s return to the spider. Imagine you quickly snap a picture of the bug and use the image to search on CamFind. In the short time it takes to return the search result, the spider query spins out across the web. CamFind’s image recognition platform, a collection of code hosted on rented cloud servers, sends the query across other servers, also hosted in the cloud. The image file passes through a variety of computer vision algorithms: some specialize in two-dimensional images, others utilize deep learning technologies. If the image recognition platform still hasn’t figured out what kind of spider it is by then, the platform will send the picture off to a human in order to determine an answer. That person then enters the result back into the system, helping the platform learn the answer for a future query.

“Essentially what we have is like a brain that constantly learns as people take pictures with the app and as images are fed into our system,” says Folkens.

Most times, CamFind will identify the correct species of spider in the photo. (Spiders are actually one of CamFind’s specialties, probably because they freak people out so much.) “Then you can find out information about it, whether or not it is poisonous, and if should you go to a hospital,” says Folkens. Or, if the app is totally stumped, it will show the user enough results so they can recognize the spider in a related images.

But without cloud computing, CamFind would have arachnophobia just like the rest of us. The company would not only need a bunch of enormous computers in its offices to run these platforms and algorithms, but they’d also have to lease a massive space to house all that equipment. Through the capabilities provided by the cloud, CamFind can lease all the necessary computing power instead. This is a huge cost savings, and it’s at the heart of our current technological boom.

It used to be that when goods or services became popular overnight, they’d be victimized by their own success, unable to reach customers fast or inexpensively enough. They couldn’t get the tools they needed, build products quickly, or deliver their the goods in a timely manner to keep up with demand. But with the cloud, software startups can add (or subtract) computing might at the push of a button.

“The cloud makes that physical layer disappear,” says Folkens. “I can just say, ‘Give me five machines to run our computer vision algorithms over; give me 10 machines; give me a 100 machines all with powerful GPUs (Graphics Processing Unit) . . . and we only pay for what we use.”

As a result, within two weeks of reaching a million app downloads in late 2013, CamFind had more than 20 different companies looking to use the company’s technology in their own products. Today, they have more than 700 such customers using CamFind. This cool little app that was teaching the cloud to see has opened everyone’s eyes. The future is looking good, indeed.

MONEY 401(k)s

The Big Mistake That Most 401(k) Savers Are Making

uneven balance with money on each side

The average 401(k) plan balance has risen to $100,000. But most workers fail to rebalance, so risks are rising too.

When it comes to saving in your 401(k), doing nothing can often work wonders.

As a recent survey by Aon Hewitt found, some 79% of workers who are eligible for a 401(k) or similar plan are participating, thanks in large part to the do-nothing magic of automatic enrollment. It’s the highest level since at least 2002, when the firm started tracking participation rates. This steady saving helped push account balances to a record high of $100,320 last year, up 10% from 2013.

Still, 401(k) inertia has a downside too. As the survey shows, most workers aren’t paying attention to the investments they hold, which increases the odds they will fall short of their retirement goals.

Take those record balances. Truth is, that 10% growth rate is relatively sluggish, which suggests many participants are invested in an ultra-conservative manner. The S&P 500 stock index jumped 13.5% in 2014, while Treasury bonds produced a 10.75% return. Moreover, only 24% of participants increased the amount they save each pay period, Aon Hewitt found. So even with additional cash going in, the average balance did not keep pace with either the stock market or the bond market.

Granted, a portion of that slow growth can be explained by regular distributions and early withdrawals. Last year, 3.6% of participants took regular withdrawals, up slightly from 3.5% the previous year, the Investment Company Institute reports. Meanwhile, 1.7% took a hardship withdrawal and at year-end 17.9% had a plan loan outstanding, ICI says. But a bigger issue probably has to do with participants leaving too much money in short-term money market accounts. In a lot of plans with automatic enrollment, the money goes into cash accounts that yield well under 1%.

Looking beyond account balances, Aon Hewitt’s data highlights another worrisome trend—only 15% of 401(k) savers did any sort of rebalancing last year, one of the lowest trading rates on record. Rebalancing is a fundamental aspect of long-term investing. Say your target asset mix is 60% stocks, 30% bonds and 10% cash. Once a year you should sell just enough of the funds that grow fastest (lately, stocks)— and add enough to the laggards (cash and bonds)—to restore your target mix. This time-tested strategy ensures you will buy low and sell high over the long haul and maintain the right level of risk in your portfolio.

Two years ago, stocks rose 32% and bonds fell 9%. The prudent move would have been to sell some stocks and buy some bonds, which would have let you benefit from the bond market’s rally last year. Stocks also rose last year by 13.7%. So if you haven’t rebalanced in the past two years, you probably hold a lot more in stocks than you originally intended, which means you may suffer worse-than-expected losses when the next bear market arrives.

The low level of rebalancing activity is only partly explained by the stunning rise of target-date funds, which automatically adjust holdings as you age. About 70% of 401(k) plans offer target-date funds and 75% of plan participants invest in them, according to T. Rowe Price. Stripping those and similar funds out, Aon still found that only 19% of participants rebalanced.

Add it all up, and it’s clear that workers now realize that they must save, and they want to know more about managing their money. But many are held back by inertia and concerns that they don’t know what they are doing. That’s why most heartily embrace plan features like automatic enrollment and automatic escalation of contributions. Aon Hewitt says workers would also benefit from better access to online tools and advice, and a simplified lineup of investment options.

The Holy Grail, though, may be a guaranteed lifetime income product, such as a deferred fixed annuity (for a portion of your portfolio), inside all defined contribution plans. These reduce the risk of failing to rebalance while giving workers something most sorely lack—an income stream other than Social Security that will never run out. Slowly, these income products are coming, Aon Hewitt says, as leading-edge companies better understand the laws and their responsibilities for what is a fairly new investment option.

Read next: How the New-Model 401(k) Can Boost Your Retirement Savings


Photo-Sharing App Path Sells to Korean Internet Firm

TechCrunch Disrupt SF 2014 - Day 3
Steve Jennings—Getty Images Path founder and CEO Dave Morin speaks on stage at TechCrunch Disrupt at Pier 48 in San Francisco on Sept. 10, 2014

The long-troubled photo-based social network Path has finally found an end to its story: Daum Kakao, a Korean Internet company, will buy it.

Path’s founder and CEO Dave Morin announced the news on Thursday evening via a blog post while much of the tech industry was still distracted by Google’s developer conference happening this week in San Francisco.

Morin didn’t disclose terms of the deal, except that Daum Kakao is acquiring its flagship social network, Path, and Path Talk, a separate app that lets users chat with local businesses as well as with other users. Kong, a mobile app for taking and sharing selfie photos that the company recently released, will remain under the ownership of Path, the company.

Under Daum Kakao’s ownership, “nearly everything you have come to love about Path and Path Talk will remain as is,” Morin writes, adding that the new owners will continue to update and improve the services.

In short, Path seems to be doing what so-called “mobile app labs” do — building various smartphone apps, dumping the duds, and focusing on the ones that take off. Twitter co-founder Biz Stone’s new venture recently ditched Jelly, its social Q&A app, in favor of Super, an app for creating and sharing brightly colored posts.

Despite a much-hyped initial launch and multiple rounds of venture capital funding, Path, which focused on connecting smaller circles of people than others like Facebook, ultimately fell out of favor. The company, however, maintained that it was still quite popular in Southeast Asia, which makes its acquirer a natural fit. Daum Kakao was born in 2014 as a result of a merger between Korean Internet company Daum Communications and KakaoTalk, a popular mobile messaging service in Asia. Daum Kakao is inheriting a community of more than 10 million monthly active users, who view about 400 million pieces of content every day, according to Morin’s post.

Morin co-founded Path in 2010 with Dustin Mierau and Shawn Fanning of Napster fame, and raised a total of $77 million in funding from investors such as Kleiner Perkins, Shasta Ventures, and Greylock Partners.

This article originally appeared on

TIME Google

Google Is Testing Hands-free Payments With McDonald’s and Papa Johns

The tech giant is testing an app that will let you pay at the store without pulling out your wallet or phone

Google is testing a futuristic way for shoppers to pay for what they buy without having to take out their wallet — or even their phones.

The technology, known as hands-free payments, is supposed to make paying in stores that much easier. All a customer has to do is download an app onto their phone. When checking out at a store, all they have to do is stand in front of the cash register and say their name to the cashier. A blue tooth sensor automatically detects whether they have the app and then bills them.

Google revealed the test Thursday at its annual developers conference in San Francisco. Fast food giant McDonald’s and pizza chain Papa John’s have partnered with Google to experiment with the technology in the Bay Area.

Details about Google’s payment system are still fuzzy. The company emphasized that it is an experiment. It may rely on Bluetooth technology to sense that your mobile phone is nearby. Shoppers who make a purchase receive a notification on their phone about being billed.

The technology is just one of many ideas involving mobile payments, a particularly hot space in the tech industry. A number of companies like Apple are experimenting with different ways for consumers to pay using their phones under the theory that paying digitally is more convenient than using cash or credit cards.

Google isn’t the first company to tackle hands-free payments. Payments company Square introduced hands-free payments in 2011, but has since retired its consumer-facing app that included the feature. In 2013, PayPal premiered a similar technology using Beacon, a Bluetooth device retailers placed in their stores.

In addition to discussing hands-free payments, Google unveiled a new mobile payments wallet and platform on Thursday called Android Pay.

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