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How to Start a Business in 10 Steps

A little less than two-thirds of Americans want to start their own business. Perhaps surprisingly, this is true among both younger and older workers. Like the drive to write a book ( 81% of Americans) or work as a full time freelancer (soon to be half of all workers), starting your own business is a widely shared dream.

For good reason. People who work for themselves tend to love it. Although it comes with the complexity of having to manage every piece of an operation, as well as the stress of knowing that success rides completely on your own shoulders, there’s nothing quite like being your own boss.

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It’s also very possible. Here’s how.

1. Research Your Market

This guide will assume that you already know what your business will do. If not, we have an excellent guide to coming up with your small business idea here.

Once you have your idea set, you need to do your research.

Starting your business will inevitably be a learning experience, but you want to get as much information as you can beforehand. So take some time to study your planned market. Ask questions like:

• What kind of competition will you face?

• Who is your target consumer?

• Where will you locate your business?

• What are the logistical and practical concerns about that location?

• What do consumers like and dislike about the existing market for your product?

• What do consumers say they want right now?

• What kind of spending power does your target consumer have?

Your market will be different depending on the nature of your business venture. A corner store has entirely different demographics and challenges than a web-based service vendor. In both cases, though, it pays to know your audience. Literally.

2. Write a Business Plan

The business plan is the blueprint for your company. It’s where you’ll apply your research and planning into one document that describes in detail the who, what, when, where, how and why of your new business. In it you will address issues such as:

• Who you will market to;

• What you plan to sell;

• When you anticipate hitting certain benchmarks, your timeline for development;

• Where you will locate this business, whether online or brick and mortar;

• How you will operate this business day-to-day;

• Why this business, what opportunity did you see in the market.

Your business plan should also address critical issues such as:

• Monetization and cash flow. How do you anticipate making your money and turning a profit?

• How much will it cost to run this business? Don’t miss the details.

• When do you expect to become profitable?

• Specific challenges you anticipate and how you will overcome them.

• What will it take, step by step, to operate this business and create this product?

The business plan article linked above goes into more detail, and the Small Business Association has a template here. Both are worth reading in further detail, because starting a business without a business plan is like setting off on a road trip without a map or GPS.

And, of course, don’t forget to pick a terrific name.

3. Get Feedback

Now stop.

Writing your business plan should be exhausting. This should be a detail-oriented document that takes a hard look at your planned venture and how, precisely, it will work. If you’ve done it right, by now you should be ready to tear into the building phase of your new business.

Instead, take a step back and solicit feedback. Call friends, family and colleagues who might have some knowledge of the industry you’d like to enter. Seek out mentors or professional guidance if possible. Get their opinion of your business plan. They might have questions you didn’t think of or notice something that slipped by you.

Hopefully this business will be around for years to come. You can afford a small delay while you get a few more eyes on your proposal.

4. Find the Money

Cards on the table, this is the hardest part for most entrepreneurs.

Not every business needs a lot of startup capital, but you will almost certainly need some. How much will depend a lot on what you want to do. A web-based services firm might require very little in the way of funding, while a retail store can require a substantial amount of cash to pay for rent, inventory and staff.

Regardless of how much, now is when you need to find this money.

This is something every entrepreneur faces, and small business owners turn to a variety of sources for startup capital. No matter where you get funding, expect to invest at least some of your own money. Lenders and investors will want to see that you have “skin in the game,” to use industry speak. Beyond your personal accounts, called self-funding, small business owners also rely on:

Bank Loans

Many businesses start with a small business loan from local banks.

You will need to have all of your paperwork in order to pursue a loan. Expect the institution to ask for details from your business plan, including monetization strategy and financial projections. If you have trouble securing a loan, you can turn to the Small Business Association which runs a loan guarantee program to help make this type of financing more accessible.

Personal Loans

While not an option for every entrepreneur, many people do rely on loans from family and friends.

If possible this is typically better than securing a loan through the bank. You’ll likely pay little interest and will have more generous terms in case of default. However, it also depends on knowing people who have that kind of cash lying around.

Grants

While not lavishly funded, programs such as Grants.gov operate small business grants for entrepreneurs.

Investment

Professional investors typically look for potentially large-growth business opportunities. Depending on the nature of your intended company, this could be a good fit for you.

A venture capital firm is unlikely to sink money into a small legal practice or restaurant. These tend to be low-growth relative to the returns that they seek. However, someone looking to launch a new product or web-enabled service, something with high potential scalability, might be a good fit for the private investment model.

Local angel investors, such as those found through AngelList, are more likely to invest in a regionally focused business. While beyond the scope of this article, you can learn more about finding private investors here.

Crowdfunding

Crowdfunding has become an increasingly common source of startup capital for small businesses. This model tends to reward retail style projects (someone looking to create a specific thing that catches the public’s eye). It can also be an excellent way to hone your sales pitch to a general audience.

For more information on financing, the SBA has a comprehensive information sheet on common sources of funding here.

5. Choose a Location

Where you locate may determine some of your legal obligations and paperwork, so it’s best to get that done at this step.

As much as possible you should try and do this with specificity. While you’re not ready to sign a lease just yet, the closer you can come to a specific address the better. Meanwhile, if you’ll be starting this company online, now’s the time to pick up your domain if you haven’t already.

Pay attention to local laws! We cannot overemphasize this. The best location can be killed off by a zoning ordinance that makes your business illegal on that particular street corner. Municipal laws can be petty and confusing, so make absolutely sure your business is street legal.

6. Establish Legal and Tax Structures

If at all possible, at this step you should retain the services of a lawyer and/or accountant. You will absolutely want professional advice. Otherwise, you run the risk of missing details that come back to bite you down the road. We also must note that nothing here constitutes legal advice. This is just a general primer on what you need to know.

Now is when you’ll actually begin forming your business and filling out the necessary paperwork with federal, state and local governments. This can involve (but is not limited to):

Choosing Your Corporate Structure

There are many types of businesses you can form, including LLCs, S-Corporations, partnerships, sole proprietorships and more. Those listed here are the most common corporate forms for a small business. The right one for you will depend on issues like cash flow, number of participants and how you want to structure potential liability. You can read more about this issue here and here.

Register Your Business

How you have to register, and with who, will depend on your specific corporate form. However, if you have formed a corporation of some sort you will have to file articles of incorporation to create this legal structure. For more information on registering your business, see this resource.

Register With State and Federal Tax Agencies

You will need a tax number and may need an employer ID number. The SBA has a guide to finding and filling out your appropriate tax forms here.

Determine Any Licenses and Permits That You Need

Depending on the nature of your business, you may need a license to operate. The SBA has a database of federal and state licensing requirements here.

Be certain to also look up zoning and location-based regulations. You may need additional permits based on where you’ve chosen to operate your business. These are typically a city-level concern.

7. Open Bank Accounts and Sign Leases

Once your business has been properly formed you can begin to act in its name. Now is when you can start actually executing on many of the opportunities you’ve already lined up.

Open bank accounts in your new business’ name. Take out a corporate credit card and, if your bank offers it, work to pre-establish a line of credit. You will find this easier to do now that your company exists and has established funding, although it may not become an option until you have operated for some time.

Go out and actually get the funding you secured earlier, because now you have someplace to put it. You should have already gotten the “yes” by now from someone, but you don’t want to deposit corporate seed money into your personal checking account. This may technically constitute a felony that rhymes with “schmembezzlement,” and is poor form either way.

With the money in hand and a functional checkbook, now is when you sign the necessary leases on real estate.

8. Take Care of Little Details

Once again step back and take stock, because the best ideas can be broken by the smallest details.

Make sure your business has comprehensive insurance for issues ranging from fire to property damage and legal liability. Many business owners overlook that last issue, and it can be a career killer if someone slips and falls or even just decides they don’t like you.

If you will hire employees put a documented process in place for hiring and firing. Have your workers compensation and unemployment insurance paperwork filed and in order.

If you haven’t already, talk to both a lawyer and an accountant. This is especially critical if you will employ people. Even if you don’t formally retain an attorney, buy a few hours of an employment lawyer’s time to make sure you have your bases covered. Figure out how your business will do its accounting and have that system set up and operational, whether you’ll do it yourself or have hired a professional.

9. Start Making Things

Now, at long, exhaustive last, we get to the fun part. It’s time to start actually making things.

You have the money, you have the location. You have all of your paperwork filed and are legally bulletproof. Now begin making your product.

How you do this will, obviously, depend entirely on what you specifically do. A manufacturing company will need to source suppliers for raw materials and the necessary machinery. (Because you took our advice and checked out all the local laws you won’t need to worry about any noise complaints from the neighbors.) A retailer will source vendors and set up an inviting, fun storefront. A consultant will finish making her office look tasteful and professional.

A restaurateur should stock the kitchen, buy appliances and write out a menu.

The details of getting to work depend entirely on your industry and profession. Fortunately, you’ve got a well written business plan for figuring out what those details are. Whatever you do, though, now’s the time to start actually doing it.

10. Scale and Hire

Your business is operational. Now’s the time to think about how to keep the lights on.

Some businesses will require employees from the very beginning. A cafe, for example, is almost impossible to run alone. Those employees are part of your startup costs and will be with you from the very beginning. As your business grows you may have the luxury of hiring more people to take some of the work off your plate.

Now is also the time to begin marketing.

To be fair, this is something you should be considering all along. You should always think about how to get your business’ name out into the community. Don’t let up once the doors open. Look to social media, advertising, foot traffic and local networking to get people in. Talk with other businesses in the area about collaboration efforts.

This is where you get to be creative. This is the fun part of being an entrepreneur. If you’re at step 10 you’ve earned it. So enjoy, because this is your business.

Source: How to Start a Business in 10 Steps – TheStreet

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This Hedge Fund Superstar Thinks Climate Change Will Impact All Your Investments—And Soon

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Since November, Robert Gibbins has crisscrossed the globe attending scientific conferences, traveling from his home in Geneva, Switzerland, to Arizona, Spain and Austria. The events had a common theme—climate change—and were well attended by academics, bureaucrats and politicians. One group was conspicuously absent. “I didn’t see any other investors there,” he says.

That boggles his mind. “Climate change is something we have to include in every single analysis, every investment,” he says. Most people think—or hope—that global warming is something their children or grandchildren will have to reckon with. Gibbins disagrees. The 49-year-old founder of Autonomy Capital ($5.5 billion in assets) thinks that climate change is happening suddenly and soon.

He structures every bet his hedge fund makes around his belief that the world is skidding toward a future that’s overheated and underwater—and that carbon will be treated as a costly waste product that needs to be captured and stored. Gibbins has already made good money betting on European carbon-futures contracts and expects richer plays to come.

Gibbins has an impressive track record making big calls. His fund, which places large bets on sweeping economic and political trends, is an industry standout, returning an annualized 12.85% net of fees since its November 2003 inception, compared to 8.9% for the S&P 500 index.

The ski-happy, outdoors-loving son of a Vancouver real estate agent, Gibbins made stops at the University of Pennsylvania and the trading desks of JPMorgan and Lehman Brothers before starting Autonomy. For many countries, he believes, climate change will be a major stress on economic stability. If a country is a basket case now, it’s only going to get worse as the seas keep rising and other fast-paced changes hit. “It’s not enough anymore to create a cheap T-shirt, car or semiconductor,” he says. To that end, Gibbins recently shorted the debt and currencies of Turkey and South Africa. He views both countries’ governments—led by Recep Tayyip Erdogan in Turkey and the ANC party in South Africa—as totally inept. “You can choose to be ruled by the ANC or Erdogan, or you can be a modern industrial economy,” he says. “You can’t have both.”

By contrast, he’s going long on Argentina. On recent trips there, Gibbins found people were exhausted after a decade of economic hardship and failed policies, convincing him the country won’t return populist Cristina Fernández de Kirchner to power (she last held the presidency in December 2015). The country’s debt is priced for disaster. “My view is, in Argentina, the society has had enough. It doesn’t want policies that are designed for the next three days,” Gibbins says.

As he sees it, all sophisticated investors these days have access to the best government and economic data. He travels 150 days a year in the pursuit of an edge and expects the 24 investment pros and economists working for him to do the same. He meets with local bureaucrats, journalists and business executives to gauge how decisions are made and how well local institutions function—and whether they can handle chal­lenges like climate change.

What about individual stocks? One obvious thought is to avoid property insurers like AllState and Travelers, which seem likely to get clobbered by rising costs, paying out more as weather-related damage piles up. Gibbins doesn’t buy it. He thinks insurers could fare just fine because much of their business is writing coverage for short periods, giving them the chance to reprice their products. Gibbins says REITs have a lot more risk.

You want even more against-the-grain thinking? Despite President Trump’s decision to pull out of the Paris climate accord, Gibbins anticipates the U.S. will eventually take the lead with Europe on a global deal to limit carbon emissions and penalize countries that don’t comply. So Gibbins thinks big oil stocks, like Exxon, or the currencies of oil-addicted nations, like Nigeria, are vulnerable.

I am a senior editor at Forbes who likes digging into Wall Street, hedge funds and private equity firms, looking for both the good and the bad.

Source: This Hedge Fund Superstar Thinks Climate Change Will Impact All Your Investments—And Soon

DoorDash Is Now Worth Nearly As Much As Grubhub After $400 Million Funding Infusion

Investor appetite in food delivery companies is growing, notwithstanding a rash of customer complaints about how these startups pay contract workers. On Thursday, DoorDash announced it had raised another $400 million in a Series F funding round led by Temasek and Dragoneer Investment Group. The cash infusion brings DoorDash’s total capital raised to $1.4 billion, of which $978 million came from funding rounds in the last year.

Source: https://www.forbes.com/sites/bizcarson/2019/02/21/doordash-funding-400-million-grubhub-7-billion-valuation/#3df12b267e10

How To Extract Business Value From Data Science: It’s All About The Teamwork – Jack Soat

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To make an impact at the enterprise level, the data science group can’t work in isolation, said Ian Swanson, Oracle vice president of machine learning and artificial intelligence product development, during a presentation at the recent Oracle OpenWorld conference. “In order to do data science right, it has to be a team sport,” said Swanson, former CEO of DataScience.com, which Oracle acquired earlier this year.

Team Members

One of the data science group’s most valuable teammates is the IT organization, for multiple reasons, he said. The DS group relies on IT to manage and secure the data it uses; support the needed analytics tools; and deliver ready access to scalable bandwidth, compute, and storage capacity to build and train production-oriented analytic models.

Another important ally is the application development team. Developers must incorporate the models DS builds into their “ecosystem” as regular features among the many they use to build production applications, Swanson said.

That points to a significant attribute of production-oriented models: reusability. An ecommerce recommendation engine, for instance, might be reused for forecasting an item’s revenue stream, he said. A key performance indicator for one technology company Swanson worked with on a DS project was “how often that model was used by other parts of the business,” he said.

Line-of-business managers are a valuable constituency as well, because they’re tasked with performing the actions—and getting the results—from applications that use analytic models. An underestimated advantage line-of-business managers bring to the analytics model-building process, Swanson said, is their domain expertise—their experiences working with customers.

As for the top brass, they don’t need “to be involved in every step of the model, but they need to understand how it will be used, the opportunities it offers, the things it can achieve,” Swanson said. “If you’re not involving the top, if they’re not part of the team, data science is not affecting the heart of the business.”

Awash in Tools

Because data science is the new darling of the technology marketplace, the number and variety of analytics tools are staggering. Swanson said he worked with a company whose DS team had accumulated 682 different tools. “How is IT managing 682 different tools?” he wondered.

Still, building predictive analytics models is complicated, requiring a “full stack” of tools, libraries, and languages—preferably open source, which encourages standards and self-service, Swanson said. As DS matures, its practitioners will have to comply with enterprise programming standards, in particular version control. “If you’re writing production code, you should be using some sort of system that encourages working together to follow best engineering practices, such as checking in code and making sure its reproducible,” he said.

But enterprise data science goes beyond programming. “It requires a platform that removes barriers to production, improves collaboration, manages the tool sprawl, provides self-service access to data, and helps with model planning and retention,” Swanson said.

Reliable Outputs

Calling data scientists “the architects and engineers of digital transformation,” Swanson noted that there are DS use cases “in every industry and function,” providing the means to generate “new business channels and new business models.” But achieving those goals requires the will—and a strategy—for extending the work data scientists can do as widely across the enterprise as resources will allow.

“It’s about creating a process that delivers reliable outputs to drive business outcomes,” Swanson said. “You need to put it into action—that’s real DS.”

 

 

 

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How to Plant Ideas in Someone’s Mind – Adam Dachis

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Getting someone to want to do something can be tough if you know they’re not going to want to do it, so you need to make them believe it was their idea. This is a common instruction, especially for salespeople, but it’s much easier said than done. You have to look at planting ideas in the same way you’d look at solving a mystery. Slowly but surely you offer the target a series of clues until the obvious conclusion is the one you want. The key is to be patient, because if you rush through your “clues” it will be obvious. If you take it slow, the idea will form naturally in their mind all by itself…..

Read more: https://lifehacker.com/5715912/how-to-plant-ideas-in-someones-mind?tag=manipulation

 

 

 

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Online Millionaire Ready To Take You Under His Wing For The Next 5 Weeks And Reveal His Closely Guarded Secrets By QSC

 

This is NOT where we talk about some positive mindset or any of that typical stuff people through around… There is ONE specific thing you need to do that will allow you to hit the ground running and then go on to magnetically attract people to you and turn them into raving fans… which of course leads you straight to the $$$$$$

Time to discover the difference in the types of income streams you can implement into your newly formed business and immediately initiate them ready for big pay days! (SPOILER ALERT: There’s 1 thing we’ll reveal here that very few people know about that makes me $1,000+ DAYS! …and it can be done by complete newbies)

You know you need one, so it’s time we just made it happen… Let’s fire up your very own “list building engine” – this is a very specific 2-phase list machine that will not only build your email list but also automatically make you commissions at the very same time! (NOTE: If you’ve ever worried about “hat to say” or “Not having any value to share with a list” or “what if they don’t like me or I say the wrong things” …this is PERFECT for you

Read more: https://quickstartchallenge.com/sale1

 

12 Daily Mindfulness Hacks for Entrepreneurs – Larry Kim

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Mindfulness is all the rage these days, and with good reason.Practicing mindfulness has been shown to reduce stress and anxiety. A new study from the University of Oxford even found that mindfulness-based cognitive therapy (MBCT) is as effective as antidepressants in preventing depression relapses.

What is Mindfulness?

What may at first seem like senseless hippie jargon is actually quite simple?—?mindfulness teaches an individual to observe his or her own behavior and thought process totally devoid of judgment. Individuals acknowledge their feelings and thoughts, then release them.

Mindfulness teaches individuals to be present in and embrace the moments of life, rather than be suffocated by the constant self-criticism and anxiety that so often plagues our minds.

12 Mindfulness Hacks in 24 Hours

Practicing mindfulness isn’t just for the Zen Buddhists, sitting in lotus flower positions on the tops of snow-capped mountains. In fact, you can practice numerous mindfulness techniques in a single day.

In the Morning

1. Start a Mindful Morning Routine. When waking up in the AM, instead of going about business as usual and thinking ahead about the upcoming meetings, reports, and stresses of the day ahead, give attention to the physical elements of your morning routine. Feel the water on your skin when you shower, smell the shampoo and soap, notice how your brush feels as it smooths your hair, and hear the sound your toothbrush makes rubbing against your teeth.

2. Coffee Concentration.

12 Mindfulness Hacks You Can Use in 24 Hours

Buddhist monks have a form of meditation involving a tea ceremony, in which monks devote utmost concentration to every aspect of the tea. You can do this with your own morning drink. Listen to the sounds of your coffee maker at it brews your drink and the smell the aroma. Study the color of your coffee, watching how it changes when you add milk or cream. Feel the warmth of the mug in your hands. Then, finally, study the taste in measured sips. Eating and drinking are everyday practices we often take for granted, but they can easily become mindfulness exercises that can be utilized throughout the day.

3. Exercise to Connect With Body. Exercise presents another opportunity for mindfulness, as you focus on your breathing, your form, and your body’s movement. If you’re running, listen to the pounding sound of your feet on the pavement. If you’re lifting weights, feel the cool metal bar in your hands. Don’t let negative thoughts and distractions slip in.

Afternoon Moments of Zen

4. Sketch a Doodle. Grab a notepad and pencil, find a subject, and get sketching. Don’t write this one off believing yourself to have no artistic talent. Anyone (yes, really, truly anyone) can draw. It only takes practice. Choosing a subject is simple?—?you can even draw the Starbucks cup sitting on your desk.

Begin drawing by choosing a point on your subject to start drawing from. Then, follow the lines of the object with your eyes and pencil. Study the subtle indentations, the gentle curves, and the shadows cast by the cup. Sketching is a great study in mindfulness, requiring concentration and awareness. Plus, your sketch can be as simple or as detailed as you’d like, serving as a great short or long break from constant screen time.

5. Take Time to Stretch Take a mid-day break from the office and step outside to do some basic stretching. Stretching is good for maintaining a healthy body, and taking the opportunity to study how your muscles move and feel is a great opportunity for mindfulness.

6. A Few Minutes of Deep Breathing. Focused breathing is an often-cited mantra of meditation pros and yogis, and not without reason. We breathe constantly, but are almost always unconscious of its activity. Taking the time to focus on breathing helps individuals find connection with their bodies.

Try this almost laughably simple breathing exercise: Take a slow, deep breath in through your nose, breathing in air from your belly rather than your chest. Pause a moment, holding in your breath, before letting the air out slowly through your mouth. It’s that simple, just rinse and repeat!

7. Ongoing Check-Ins. Pause regularly throughout the day and assess the state of your body and mind. How is your posture? Are you clenching your jaw? Are you thirsty? You may be surprised what you learn about yourself through these regular check-ins. Try to practice these mini check-ins every hour or so. Some individuals use periodic vibrating smart watch alarms to serve as quick reminders to collect themselves and refocus.

In The Evening

8. Take Out the Ear Buds. When walking home from work or jumping on a bus, avoid the temptation to put in your ear buds. Instead, focus on what is happening around you. Hear the birds singing, listen to the children playing on the nearby jungle gym, and be fully present.

9. Meditative Mind Dump. Dedicate 10–15 minutes to sitting down with just a pen and a pad of paper. Use this time to write out any and all thoughts that are swirling about in your mind. Not only will writing down your thoughts help clear your mind and relieve built-up stress, but you also may stumble upon some genius ideas that were previously buried.

10. Clear Mind (And Dishes) With Chores. Arriving home to be greeted by mountains of dirty dishes is far from fun. Instead of attacking your dishes, laundry, and garbage duties with dread, turn those burdensome chores into mindfulness exercises. Feel the water on your hands (or gloves) and study the texture of the sponge as you go about cleaning dishes. Take care to concentrate on the shape and weight of the plates, bowls, and utensils as you clean them.

11. Get Lost In The Music. Music can be another handy tool for practicing mindfulness as part of your everyday routine. Ideally, choose a song you’ve never heard before and hit play. Avoid letting your mind drift into thoughts about the song’s genre, artist, and lyrical meaning. Instead, simply listen with attention to the song, following the beats and crescendos while keeping your mind quiet.

12. Try A Guided Meditation. As the mindfulness movement grows in popularity, more apps and resources are becoming available to aid you in your journey. Check out popular apps like Headspace and Calm. You may also try listening one of the many guided meditation videos on YouTube, which are especially calming when you’re getting ready to power down before bed.

12 Mindfulness Hacks You Can Use in 24 Hours

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Don’t Let Patent Paralysis Stop You Moving Forward With Your Invention

 

I once met an inventor who was so paralysed with the fear that his idea might be stolen that he put off applying for a patent. The idea of trusting in what he felt was a flawed patent system and paying out between £3,000 – £6,000 to apply delayed his decision to move forward, and 18 months later his worst fears were realized as he entered a local store in his area only to see a virtual copy of his product sitting on a shelf – he was mortified.

My take on potential issues relating to patent protection is that you are damned if you do and damned if you don’t. Without a shred of doubt, I would advise inventors to apply for a patent and do everything in their power to strengthen it so the chances of it holding up in court are stacked heavily in their favour.

I have lost count of the amount of people I’ve come across in the last 19 years, ever since I set out on my own mission to invent, who have “kicked themselves” because they should have patented some idea they dreamt up, only to see it in B & Q, a well-known toy chain or one or two other famous superstores. Although a high percentage of such claims might be fabricated, I have witnessed a few heartbreaks where patent paralysis has reared its ugly head and led to would-be inventors losing out.

4 ways to guard against patent paralysis:

1 Keep your idea secret

I am a true believer and advocate of keeping product ideas secret in the period before you apply for a patent. I won’t even tell a family member or one of my team when I first set something in motion. I trust them, but even an inadvertent slip up that leads to an outsider knowing something of my creation process can result in my patent being contested or invalidated further down the line (a Chinese whisper really could lead to someone else beating me to market). However remote that possibility may be, I have to take this subject seriously, especially having a track record in dealing with 7 infringement cases already.

2 Take notes but hide your notepad

If your bright idea does make you a tidy sum it could attract the attention of a potential infringer, so you may need to provide the more technical details of your product, especially if an opposing lawyer contests some of your claims in a court of law.

I would therefore urge you to log your development process including sketches in a diary to reduce or eliminate such a scenario developing. And place it somewhere safe where no one will find it.

3 Find yourself a trusted patent attorney – make your idea watertight

Providing you have done all you can to research the potential viability of your great idea, you will need to make sure your patent is watertight. A patent attorney should give you a free half an hour consultation to ascertain whether your idea may have legs – your notebook and any mocked up proto-type will help formulate a picture of what your product will do.

And providing your patent attorney gives you the heads up, you will be given an option to disclose more information and begin the patent process. As part of the application process, you must pay for a patent search and a ‘substantive examination’. You can request the search either when you apply or later in the process. You must request your search within 12 months of your filing or priority date. If no other patents or prior art documents are cited you are free to monetise your invention.

You shouldn’t be daunted by this process, it is your chance to articulate how your product will work in your chosen field. I usually invite my own patent attorney to visit our showroom to see it functioning in the environment it will inhabit. Another important tip is for you to include all the materials and shapes you tried or included during your development phase, and some you didn’t, this will reduce the risk of competitors trying to design around your claims later on.

4 Relax

Being uptight and defensive can feed patent paralysis, so be vigilant and relax. I would encourage you to spend time reading over your patent application again and again, so you begin to understand and trust the patent language, which is clearly different than in our own technical fields.

Talk to your patent attorney and be meticulous in how you create such an important document, work hard to understand each other’s perspectives. Sometimes you just have to take a leap of faith and trust in the system, it is up to you to articulate to your patent attorney exactly how your invention benefits its customers, in order not to leave a loophole for anyone to exploit. Put this extra work in at the start and it could help you avoid a lot of trouble in the years to come.

Graham Harris is founder and Managing Director of Tech-ni-Fold Ltd and Creasestream LLP, global leaders in print creasing technology. His invention has saved customers over £8billion to date. His book Against the Grain is available now on

By: Graham Harris Tech ni Fold Ltd

Why Entrepreneurs Start Companies Rather Than Join Them

If you asked me why I gravitated to startups rather than work in a large company I would have answered at various times: “I want to be my own boss.” “I love risk.” “I want flexible work hours.” “I want to work on tough problems that matter.” “I have a vision and want to see it through.” “I saw a better opportunity and grabbed it. …”

It never crossed my mind that I gravitated to startups because I thought more of my abilities than the value a large company would put on them. At least not consciously. But that’s the conclusion of a provocative research paper, Asymmetric Information and Entrepreneurship, that explains a new theory of why some people choose to be entrepreneurs. The authors’ conclusion: Entrepreneurs think they are better than their resumes show and realize they can be more successful by going it alone. And in most cases, they are right.

I’ll summarize the paper’s conclusions, then share a few thoughts about what they might mean – for companies, entrepreneurs and entrepreneurial education. (By the way, as you read the conclusions keep in mind the authors are not talking just about high-tech entrepreneurs. They are talking about everyone who chooses to be self-employed – from a corner food vendor without a high school diploma to a high-tech founder with a PhD in Computer Science from Stanford.)

The authors’ research came from following 12,686 people over 30+ years. They found:

1. Getting a job involves signaling. When you look for a job you “signal” your ability to employers via a resume with a list of your educational qualifications and work history. Signaling is a fancy academic term to describe how one party (in this case, someone who wants a job) credibly conveys information to another party (a potential employer).

2. Entrepreneurs believe their signal falls short. People choose to be entrepreneurs when they feel that they are more capable than what employers can tell from their resume or an interview. So entrepreneurs start ventures because they can’t signal their worth to potential employers.

3. Entrepreneurs have higher average pay. Overall, when people choose entrepreneurship they earn 7% more than they would have in a corporate job. That’s because in companies pay is usually set by observable signals (your education and experience/work history).

4. But the pay is less predictable. The downside of being an entrepreneur is that as a group their pay is more variable – some make less than if they worked at a company, some much more.

5. Entrepreneurs score higher on cognitive ability tests than their educational credentials would predict. And their cognitive ability is higher than those with the same educational and work credentials who choose to work in a company.

6. Immigrants also have trouble signaling. Signaling (or the lack of it) may explain why some groups such as immigrants, with less credible signals to existing companies (unknown schools, no license to practice, unverifiable job history, etc.) tend to gravitate toward entrepreneurship. And why funding from families and friends is a dominant source of financing for early-stage ventures (because friends and family know an entrepreneur’s ability better than any resume can convey).

7. Entrepreneurs defer getting more formal education because they correctly expect their productivity will be higher than the market can infer from just their educational qualifications. (There are no signals for entrepreneurial skills.)

Lemons vs. cherries

The most provocative conclusion in the paper is that asymmetric information about ability (that is, when one party has more or better information than the other) leads existing companies to employ only “lemons,” relatively unproductive workers. The talented and more productive choose entrepreneurship. The entrepreneurs know something potential employers don’t – that nowhere on their resume does it show resiliency, curiosity, agility, resourcefulness, pattern recognition, tenacity, and having a passion for products.

This implication, that entrepreneurs are, in fact, “cherries” contrasts with a large body of literature in social science, which says that the entrepreneurs are the lemons — those who cannot find, cannot hold, or cannot stand “real jobs.”

So, what to make of all this?

If the authors are right, the way we signal ability (resumes listing education and work history) is not only a poor predictor of success but has implications for existing companies, startups, education, and public policy that require further thought and research.

In the 20th century, when companies competed with peers with the same business model, they wanted employees to help them execute current business models (whether it was working on an assembly line or writing code supporting or extending current products). There was little loss when they missed hiring employees who had entrepreneurial skills. However, in the 21st century, companies face continuous disruption; now they’re looking for employees to help them act entrepreneurial. Yet their recruiting and interviewing processes – which define signals they look for – are still focused on execution, not entrepreneurial skills.

Surprisingly, the company that best epitomized this was not some old-line manufacturing company but Google. When Marissa Mayer ran products at Google, the New York Times described her hiring process: “More often than not, she relies on charts, graphs and quantitative analysis as a foundation for a decision, particularly when it comes to evaluating people. … At a recent personnel meeting, she homes in on grade-point averages and SAT scores to narrow a list of candidates, many having graduated from Ivy League schools … One candidate got a C in macroeconomics. ‘That’s troubling to me,” Ms. Mayer says. “Good students are good at all things.’”

Really. What a perfect example of adverse signaling. No wonder the most successful Google products, other than search, have been acquisitions of startups not internal products: YouTube, Android, DoubleClick, Keyhole (Google Maps), and Waze were started and run by entrepreneurs. The type of people Google and Marissa Mayer wouldn’t and didn’t hire started the companies they bought.

Next questions

The paper’s findings raise some interesting questions about how to drive entrepreneurship.

Better signals. When I shared the paper with Tina Seelig at Stanford she asked, “If schools provided better ways to signal someone’s potential to employers, will this lead to less entrepreneurship?”

Imagine a perfect world in which corporate recruiters found a way to identify the next Steve Jobs, Elon Musk, or Larry Ellison. Would the existing corporate processes, procedures, and business models crush their innovative talents, or would they steer the large companies into a new renaissance?

The economic environment. So, how much of signaling (hiring only by resume qualifications) is influenced by the economic environment? One could assume that in a period of low unemployment, it will be easier to get a traditional job, which would lead to fewer startups and explain why great companies are often founded during a downturn. Those who can’t get a traditional job start their own venture. Yet other public policies come into play. Between the late 1930s and the 1970s, the U.S. tax rate for individuals making over $100,000 was 70 percent and 90 percent (taxes on capital gains fluctuated between 20 percent and 25 percent.) Venture capital flourished when the tax rates plummeted in the late 1970s. Was entrepreneurship stifled by high personal income taxes? And did it flourish only when entrepreneurs saw the opportunity to make a lot more money on their own?

Leaving big companies. Some new ventures are started by people who leave big companies to strike out on their own – meaning they weren’t trying to find employment in a corporation, they were trying to get away from it. While starting your own company may look attractive from inside a company, the stark reality of risking one’s livelihood, financial stability, family, etc., is a tough bar to cross. What motivates these people to leave the relative comfort of a steady corporate income and strike out on their own? Is it the same reason – their company doesn’t value their skills for innovation and is just measuring them on execution? Or something else?

Entrepreneurial education. Is entrepreneurship for everyone? Should we expect that we can teach entrepreneurship as a mandatory class? Or is it a calling? Increasing the number of new ventures will only generate aggregate wealth if those who start firms are truly more productive as entrepreneurs.

Lessons learned

  • Entrepreneurs start their own companies because existing companies don’t value the skills that don’t fit on a resume
  • The most talented people choose entrepreneurship (lemons vs. cherries)

[A version of this story originally appeared on the author’s own site.]

Steve Blank is a retired serial entrepreneur-turned-educator who created the Customer Development methodology that launched the lean startup movement, which he wrote about in his book, The Four Steps to the Epiphany. Blank teaches Lean LaunchPad classes at Stanford University, U.C. Berkeley, Columbia University, and NYU.

By: @sgblank

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