TIME Innovation

Five Best Ideas of the Day: February 23

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. The propaganda war against ISIS doesn’t tell us anything about the real fight.

By Paul Waldman in the Week

2. Programs supporting women-owned small businesses will boost the economy.

By Claudia Viek at the American Sustainable Business Council

3. System-wide disruption — including a new medical school admissions test — is remaking medical education.

By Melinda Beck in Wall Street Journal

4. Prison reform could unleash resourcefulness and hustle currently behind bars. The tech sector should get on board.

By Baratunde Thurston in Fast Company

5. The first power plant powered by ocean waves is officially online.

By Kaleigh Rogers in Motherboard from Vice

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY advice

Help! Should I throw a party for my employees or give bonuses?

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Here's your chance to give advice in the pages of MONEY magazine.

Did you ever want to be a personal-finance advice columnist? Well, here’s your chance.

In MONEY’s “Readers to the Rescue” department, we publish questions from readers seeking help with sticky financial situations, along with advice from other readers on how to solve those problems. Here’s our latest reader question:

As a small business owner, what’s a better use of funds: throwing an employee social event to build camaraderie and improve morale, or giving that money to workers as a bonus?

What advice would you give? Fill out the form below and tell us about it. We’ll publish selected reader advice in an upcoming issue. (Your answer may be edited for length and clarity.)

Thank you!

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MONEY Startups

3 Reasons to Take Your Startup in a New Direction

150213_CAR_PivotStartup
Robert A. Di Ieso

Many successful companies changed up their business plans early on. Here's when you should too.

Podcast platform Odeo turned into Twitter. Check-in app Burbn switched its focus to photo sharing and became Instagram. Does your startup need a change in direction to succeed? Here are three signs it’s time to revamp:

1. Customers Are Telling You

Is your target buyer consistently asking for something you don’t offer? “Customers exist because you make them better off,” says Gary Gebhardt, an associate professor of marketing at Canadian business school HEC Montréal. Listen to them.

2. Your Idea Isn’t Sticking

Do you have a hard time holding on to business? Go beyond focus groups and surveys. People often misrepresent their behavior. Instead, says Gebhardt, observe your customers going about their day. “When you see how people do things, you see how you can create a solution,” he says.

3. The Competition is Winning

Look at why people are favoring your rival’s product. But don’t panic pivot, says Steve Blank, co-author of The Startup Owner’s Manual. “A pivot requires substantial evidence that your original hypotheses for your business were incorrect.”

TIME marketing

9 Tips to Make Money on Facebook

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Robert Galbraith—Reuters

These marketers have increased their clients' profits by as much as 800 percent

Inc. logo

This post is in partnership with Inc., which offers useful advice, resources and insights to entrepreneurs and business owners. The article below was originally published at Inc.com.

With a 13-year track record of helping network marketing organizations and small businesses achieve unprecedented growth, Jim Lupkin decided it was time to share his strategies with the world. He turned to best-selling author, Brian Carter. Carter, trusted by brands like NBC, Microsoft, and PrideStaff, has guided businesses to 800 percent profits and higher with Facebook marketing.

After reading Lupkin’s case study on a network marketing company that grew over seventy-million in sales with his approach, Carter knew it was time for the pair to co-author a book. The authors are quick to mention, however, that Network Marketing For Facebook is not valuable to only the network marketing industry. “We were not surprised to hear that sales professionals and entrepreneurs love the book too,” says Carter. “These techniques will work for your business if your personal brand is part of the sales process.”

Why Facebook you may ask? “Wouldn’t it make sense to join the community with the most people?” says Lupkin. “Facebook has more than one billion users and is five times more popular than the next most popular social network.”

Here’s just a taste of what you’ll find inside the cover of Network Marketing For Facebook.

1. Create an appealing Facebook profile.

When someone knows, likes and trusts you, they’re more willing to hear about your business. Your profile gives you this opportunity when you use your profile picture; cover image, and “about” section properly.

Choose a professional profile picture. Use your cover image to give people a snapshot of your personality. A complete “about” section makes you more credible and rounds out your personality.

2. Post publicly on Facebook.

Your goal is to let your friends know what you do for a living and how you can help them. For example, if you’re a realtor:

Hey everybody! As you may know, I love helping people find their dream home. If you know anyone that needs assistance, please message me.

If you’re an insurance rep:

Hey there! As you may know, I love helping families be protected from unforeseen tragedies. If you know anyone that needs life insurance, please message me.

3. Use Facebook Messenger.

It is like email, but better. If you’ve previously conversed with a prospect and you’re getting ready to talk to them again, you can quickly review all your previous talks in one place.

If you haven’t spoken to a friend in a while, make sure to re-establish the relationship first. You don’t want them to feel like you are only reaching out for business. You can say, “Hey! We haven’t spoken in a while. How have you been?” Only chat about your products if they ask what you do.

4. Send messages based on past conversations and what you know about a friend.

A realtor example:

Hey Tom! I know you love houses with a view, and I seem to remember you were looking for a house. Well, check out this amazing lake view property! Do you want to come see it with me?

An insurance rep:

Hey Alicia! I know we’re both family people, and it’s been awesome to see yours grow up on Facebook. I was super glad to find out about this new life insurance option our company just created. It provides for families like no other policy I’ve seen. Do you want to hear more about it?

5. Keep the conversation going.

It’s exciting to have someone respond to your messages! Thank them for the response, give them additional information: pictures, videos and details of your offering, and then let them know what is the next step.

If you don’t hear back, send them a message once a week asking if they wanted to take the next step. Be patient. Not everyone checks Facebook daily.

6. Stay in touch.

It’s only a matter of time until friends want your product. Stay in touch on Facebook by posting quality content and interacting with your friends’ posts. Posting quality content is a balance between business and personal: Too much of either can result inf ailure. Be personal 80% of the time. People do business with those they have the best relationship with; so post about what’s on your mind. Post about business the other 20%.

The more you interact with your friend’s posts, the more your business posts appear in their newsfeed. Your friends will also see you as a true friend, not someone just trying to sell them products. When you comment on a friend’s post, write from the heart. Treat it the same as when you talk face to face.

7. Grow your friends to grow your income.

With over a billion users, Facebook offers an unlimited amount of people to talk to if you take the time to build relationships. Facebook’s Graph Search solves the new prospect obstacle by opening up their entire database to you. All you need to do is take the time to reach out and build relationships.

8. Create a group for support and inspiring sales teams.

Whether you’re a manager motivating a team, or have a group of industry peers who want to support each other, Facebook Groups are the answer. You can move mountains when you belong to a group of passionate people working toward the same goals, supporting each other every day.

Once you start your group, post at least a few times a week. It could be a question, words of motivation, pictures, or videos. Always like and comment on what others are posting as well. Groups are like live events happening 24 hours a day. When run correctly, it will become the cornerstone of your success.

9. Remember, Facebook is part of the strategy, not the whole strategy.

Facebook connects you to new people and helps you develop relationships. However, you still need to talk with people face to face, over the phone, and at events. They also need to experience a “taste” of your offering.

MONEY Jobs

POLL: Do You Want to Have Your Own Business Someday?

Are you the entrepreneurial type, or do you prefer a steady paycheck from the boss? Let us know.

MONEY Small Business

4 Phrases that Will Kill Your Startup’s Pitch To Investors

Looking to get a new biz funded? Better not say these things—or you'll sink your chances before you're even gotten off the ground, says entrepreneur Seth Talbott.

Unfortunately, there are many different areas where you can fail with a startup—and raising money from investors is no exception.

Having founded numerous companies, advised dozens more, and put together more pitch decks together than I can count, I learned the hard way which pitching mistakes are fatal and which ones are survivable.

This is why having veteran entrepreneurs in your startup team is an attractive factor for investors; experience is often life’s best teacher. But if you don’t have that knowledge at your fingertips, instead be a student of other startups’ failures. Make sure that your pitch doesn’t reflect inexperience or naiveté—not just because investors won’t touch your startup, but because your survival depends on it.

Over my time as an entrepreneur, I’ve identified these as the four most lethal phrases to use when trying to raise money:

“We have no competition.”

Why it’s a pitch killer: It shows that you either don’t understand your customers or have done a terrible job analyzing the competitive landscape—and often it means both.

With any business, you are either competing against ingrained behavior or against a rival company, and you need to know the balance of that situation better than anyone.

Just because you think that you are a “first mover” doesn’t mean that you get a free pass in studying the competitive landscape. In fact, I would argue that you have even more work to do.

As a general rule, assume that any idea you’ve heard of has been done before. If there isn’t already a market dominator, there’s probably a really good reason for that.

So don’t discredit yourself by presenting your idea to investors assuming that you’re the first one to think of it and assuming that being a “first mover” will give you a huge advantage. Proceed with caution and skepticism about the uniqueness of your solution. Study, research and dig until you find prior failures and have a deep understanding of why they didn’t work.

“No one can copy us.”

Why it’s a pitch killer: It makes you look ignorant and it also shows arrogance about your development prowess, which is a red flag to investors.

If you are a small startup, you are likely working the kind of product or technology that would take GE, Amazon, Microsoft or HP a long weekend to copy.

Additionally, in the case of software companies, patents are often not useful because startups are rarely creating new technology as much as applying existing technology in new ways. Plus, enforcing and defending patents is expensive and a massive distraction.

“We will be profitable in one year.”

Why it’s a pitch killer: Investors don’t expect you to turn a profit quickly, and, in fact, will become highly suspicious of your financial predictions if you suggest a profitability roadmap that defies industry norms.

Also, while financial projections never end up being perfectly accurate, they do speak to your ability to estimate labor costs and whether the business will scale efficiently.

So don’t make the rookie mistake of giving wildly unrealistic financial predictions.

“We are cheaper.”

Why it’s a pitch killer: A lower price point is rarely enough to unseat an entrenched leader or differentiate yourself from the competition—which is why no one with a decent amount of entrepreneurial tread on their tires starts companies from that approach.

Undercutting competitors with efficiency improvements and brilliant execution can be one of a few competitive advantages. However, the “we’re going to be cheaper” approach almost always fails because new entrepreneurs typically don’t have appropriate expectations for the actual cost of doing business, the costs of labor, or the length of the sales cycle.

And think of it from an investor’s perspective: How sexy is it to be investing in a business that is trying to be cheaper instead of premium?

So now you know the worst of what to avoid in your pitch. But the point isn’t just to eliminate these phrases—rather to also realize why they are a problem and what blind spots they reflect. My point isn’t that a few words will ruin your startup, but that a few bad decisions based out of ignorance will.

Seth Talbott has founded numerous companies, including Promedev (which provides lab services for medical providers), AtomOrbit (which helps businesses create mobile workspaces with access to legacy data) and Preferling (which helps users find restaurants based on preferences).

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. YEC recently launched StartupCollective, a free virtual mentorship program.

MONEY Small Business

Can Ferguson Recover? The Lasting Economic Impact of Violent Unrest

Flames illuminate the St. Louis Fish & Chicken Grill next door to where fire crews worked to douse a burning furniture store.
James Cooper—Demotix/Corbis Riots erupted moments after it was announced Ferguson police officer Darren Wilson will not face criminal charges in the fatal shooting of unarmed teenager Mike Brown. Several buildings were looted and burned.

The looting and destruction of businesses in Ferguson could have long-term effects.

A grand jury decision not to indict police officer Darren Wilson for the shooting of unarmed black teen Michael Brown has stoked anger in Ferguson, Mo., where peaceful protests have given way to looting and violence, virtually shutting down the city last night. “People don’t want to come into the area,” Jason Bryant, a local pastor, told TIME.

The events echo those in August, when the shooting first caused long-standing tensions to erupt into violence, theft — and shuttered storefronts. TIME reported last night that local retailers have seen sales slow by as much as 80%.

While the loss of local business may seem trivial next to the potential for additional violence — not to mention the civil rights and other legal issues at stake — there is a danger that rioting could disrupt the lives and livelihoods of Ferguson residents for years to come.

In the ten years after the 1992 Los Angeles riots, for example, the city lost nearly $4 billion in taxable sales, according to research conducted by Victor Matheson of College of the Holy Cross and Robert Baade of Lake Forest College.

“Social unrest can have a lasting negative impact on a local economy in a way that’s much more persistent than even a natural disaster,” says Matheson. “Though Hurricane Andrew caused more damage upfront, businesses were able to bounce back as soon as cleanup began. We didn’t see that in Los Angeles.”

Matheson and Baade found that the steps toward recovery are relatively clear after natural disasters: Communities tend to join together to build shelters, clean up, and storm-proof structures against future events. After rioting, by contrast, it’s much harder rebuild confidence and community trust among frightened business owners, or to convince new employers to move in. “It’s not as simple to just stamp out violence and anger,” Matheson says. And reluctance to rebuild is dangerous because it is self-perpetuating, he adds.

Concerns about lasting damage to business-owner confidence similarly followed riots in London in 2011 (also triggered by a police shooting), and economic aftershocks are still felt today, despite the commitment of more than $116 million in riot-recovery funding.

While there are no easy fixes that will keep Ferguson from suffering a similar fate, quelling anger is a first step. Various experts and commentators have suggested policy changes that could help rebuild trust in the police department, including a consent decree like the one that eventually helped the LAPD improve relations with residents of L.A.

No matter what path Ferguson takes, says Matheson, the sooner the violence ends, the faster the local economy can begin to heal.

 

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