With the dawn of HTML5, videos that give the user the option to choose the next step have boomed on video services such as Youtube. Riding the wave of interactive choose-your-own-adventure video applications is Boulder, Colorado start-up Flixmaster. The company, one of the members of the TechStars Boulder incubator, offers a drag-and-drop interface that creates an interactive video without the financial burden. READ MORE
How low will they go? Wireless phone companies are in the middle of a price war that’s seen one after another announce a flat rate of $99 a month for unlimited calls inside the United States. Verizon kicked things off in February and AT&T and T-Mobile immediately followed. Soon after, Spring/Nextel rolled out two plans, including an even-cheaper $89 a monthly flat rate for bare bones domestic service. Lower prices are good news for some small companies that couldn’t do business without their mobile phones. But it won’t make a big difference to others whose existing contracts include a shared pool of minutes that averages out to less than $99 a month per employee, according to one telephone industry consultant. Either way, cut-rate unlimited calling plans are a sign of things to come, consultants and small business owners say. Once considered a business luxury, all-you-can-talk wireless voice service is quickly becoming a commodity. As prices drop, wireless carriers are coming up with new services to keep users from jumping ship – and revenues rolling in, sources say. “They won’t keep customers if they focus on the cell phone as just a voice service,” says Anders Mikkelsen, managing director at Berlin Pacific, a New York City consultant that helps small and mid-sized companies pick the right phone plans. “They all have to have a new spin on what mobile is all about. It’s about communications, not just voice.” Same price, different services Though prices are the same, wireless carriers’ $99 a month unlimited calling plans differ slightly in what’s offered: Verizon — Includes unlimited voice, Internet access and Web-based e-mail AT&T — Includes unlimited voice calls T-Mobile — Includes unlimited voice, text messaging and IM Sprint/Nextel — Includes unlimited voice, data, text, email, Internet access, TV and music services and GPS. A stripped down $89 a month plan covers only unlimited voice and text messaging. Tim Bates, with Bates Strategy Group, a Boulder, Colo., technology marketing consultant, recently switched two wireless phones to AT&T’s new $99 a monthly unlimited calling plan. “We live on our phones,” Bates says. “With a predictable bill, long calls and conference calls are not something we need to bill added charges for.” International calls are still an issue, but Bates says he uses Skype, the voice over Internet service, for those. Flat-rate plans increasingly appealing Cheaper rates for unlimited monthly wireless phone calls also sound good to Raza Imam, managing partner of Adaptive Solutions Inc., a five-year-old contract software developer in Chicago. Imam is on his cell phone an hour or two a day talking to a business partner and 15-person development team in Pakistan and to customers around the world. One month a few years back his mobile phone bill hit $900. “That was ugly,” Imam says. “It was a contract negotiation with a client, there was a lot of back and forth. We never want to do that again.” When Imam’s current contract expires this month, he’ll consider moving to one of the new flat rate plans. Which one will depend on what his colleagues want, but whatever it is, it’ll have to include more than basic voice service. “That’s not the end all, be all,” he says. “The value-added services will tip the scale for me.” One new feature that’s caught his eye: T-Mobile’s Hotspot@Home, which for an extra $10 a month lets customers send and receive unlimited calls nationwide over a home Wi-Fi Internet connection. “You can make calls and it doesn’t subtract them from your pool of minutes. That’s an attractive feature for me,” he says.
Michael Schwartz had a problem with his salesforce. It wasn’t that they weren’t selling. It’s what happened afterward. Schwartz is sales operations vice president at Incentra Solutions in Boulder, Colo., a fast-growing provider of storage and IT services for mid-sized companies. In the past two years, Incentra acquired five smaller businesses and now has close to 120 sales representatives in multiple regional offices. At the month’s end, when it was time to calculate and pay salespeople commissions, each region’s finance department used a different process. It took too long, and back at corporate, Schwartz was in the dark as to whether the company’s commission structure was really working. “It was difficult for us, without a consistent process, to review numbers in a lot of detail,” he says. Like many other companies, Incentra built its commission plans on spreadsheets. But as experiences there and elsewhere have shown, spreadsheets do a poor job of calculating complicated sales commissions. Salespeople even have a name for the problem: “Excel hell.” Earlier this year, Schwartz switched to something that’s picking up steam as a spreadsheet alternative: sales incentive management software, which automates the job of creating and managing a company’s reward system for meeting sales quotas and goals. Typical sales incentive software includes tools to devise, document, and allocate incentive plans and a Web-based portal that sales reps and sales managers use to track data and generate reports. Appealing to small businesses Sales incentive software has been around for a while, but vendors only recently introduced a low-cost software-as-a-service (SaaS) version that’s affordable and appealing to small and mid-sized businesses. Costs range from $20 to $50 a month per person, according to analysts. That’s more expensive than a spreadsheet, but the extra cost is worth it because it eliminates mistakes and accidental overpayments that routinely happen in spreadsheet-based commission plans, says Michael Dunne, a sales software analyst at Gartner, the Stamford, Conn., technology research and consulting firm. Also, because the software generates more detailed reports, companies can see whether their commission structure is motivating salespeople to sell the most profitable product mix, Dunne says. That’s important to a company like Incentra, which projects a big jump in revenue this year but is still working to get itself out of the red. To that end, Schwartz started rolling out a sales incentive software program from Callidus Software in mid-March and expected to have 85 percent of its salesforce up and running by April. If all goes well, Schwartz plans to use the software for other employees who receive commissions, including inside sales representatives, engineers, and corporate staff. Besides Callidus, vendors that sell sales incentive management software to small and mid-size companies on an SaaS basis include: Xactly
Letter From Silicon Valley About once a week I go out with the Pro Leisure Tour, a bunch of Bay Area ex-dot-commers who get together for coffee, movies, and other poor substitutes for a full and rewarding workday. The Tour started out as an elite club for newly free and empowered individuals. Now that all the work is gone, it’s an excuse for people to get out of their pajamas. Sometimes we meet for 11 a.m. poker at the Grove — the Marina’s sorority-girl salad hangout — although the highest ante anyone can afford is about four Jujubes. One recent Wednesday I was running late for a Tour event at the Embarcadero — a matinee of Hedwig and the Angry Inch — so I hailed a cab. En route I asked my driver how business was going, since I’d heard that San Francisco cab revenues were down 50% from last year’s. The cabbie, it turned out, wasn’t in a position to make any comparisons. The year before he had been working as a contract recruiter for HearMe, a provider of live-voice technology for the Internet, which announced in July that it would cease operations and sell its assets. But he did hold forth at some length about the hiring process at high-tech start-ups, of which he had a poor opinion. “I used to work in financial services, which was a lot easier because they would have one supreme being making hiring decisions,” he said. “At these high-tech companies, they have a committee make the call, but six people can make the same dumb decision that one person can.” When I was CEO of online-marketing company Gazooba Corp. (now called Qbiquity Corp.), I used to grovel before people like that cabbie, showering them with $100-an-hour fees plus stock options in the desperate hope of landing a database architect, say. Still, I respected the guy for picking up the pieces and finding a way to put some money in his pocket. As I paid my fare, he told me that he expected the job market to improve in a year or so and hoped one day to return to recruiting. “I don’t know that driving a taxi has a great future,” he said. “I made a nice chunk of change before, without a lot of aggravation.” The self-reinvention theme surfaced again during the film, which was about a transsexual singer who overcomes a broken heart, copyright infringement, and other challenges (it wasn’t always an inch) to find true love and stardom. Chatting with my fellow Tourists after the show, I learned that Hedwig and the cabbie weren’t the only ones remaking themselves in the face of adversity. One woman brought up the example of a former high-tech-magazine writer who was training to be a dominatrix. “She was going to a place in San Mateo or someplace Silicon Valley like that,” the woman said. “I don’t know if it’s all whips and chains, but it’s some kind of dominant work.” My friend Carla, a onetime consultant to the dot-com stars, is researching a new product idea with the help of a career-life coach in Boulder, Colo., whom she phones once a week. As old habits die hard, Carla was in stealth mode with the project. But when I told her I was interested in professional reincarnations, she didn’t hesitate. “You should talk to my friend the Doggie Dentist,” she said. The Doggie Dentist, it turned out, was 33-year-old Kimberly Testa. Kimberly used to work at Alexa Internet, a software company that Amazon.com acquired in 1999 for more than $250 million in stock. Kimberly had gotten laid off in March. “I spent two months licking my wounds from the torture,” Kimberly told me when I reached her by phone. “And by torture I don’t mean the layoff. I mean the dot-com-in-general torture. I went from salesperson to project manager to media buyer to trade-show coordinator, with a different job every month. I’d work eight days a week to get something done, and then I’d find out it was irrelevant because the company had changed strategy again.” Kimberly had longed for a career that would “put a smile on my face — where I would know at the end of the day that I’d accomplished something that mattered to someone.” One day she brought her cat, Rufus, to the vet, where she met a woman doing anesthesia-free teeth cleaning. Intrigued, Kimberly struck a licensing deal with the woman, who was based in San Diego. The teeth cleaner would train Kimberly to whiten up those Old Yellers, and Kimberly would pay the woman a percentage of her business for five years. Having mastered the art of holding an animal in a towel and saying “Sit,” “Stay,” and “Good doggie” as if she meant business, Kimberly posted a sign-up sheet for her services at Alpha Dog, a pet store in Mill Valley. By the end of the first day she had a day’s worth of appointments and was soon booked solid two months out. “It’s all word-of-mouth marketing,” said Kimberly. “People don’t want to put their pets to sleep during the cleaning, but I don’t know a lot of people who like their dog’s breath. So there’s a lot of demand.” At $75 a cleaning (or more if the need for a doggie mint is severe), Kimberly projects annual revenues of more than $80,000 — and that’s for scraping tartar just three days a week. To grow the business, she wants to offer her services in pet-grooming shops. Kimberly finds her new customers easier to deal with than her former colleagues. At Alexa, “nobody knew what they were doing, especially with the direction changing so much,” she says. “With these animals, I clean their teeth, I give them a doggie treat, and they wag their tails. The relationship is very clear.” Not every apple has fallen as far from the dot-com tree as Kimberly has. Former Qbiquity marketing director Paul Allen (loyal readers of this column will recall that, no, he’s not that Paul Allen) remains part of the tech start-up scene, albeit in a very different role. When I hired Paul as employee number five, back in 1999, I didn’t know that he had already achieved some local prominence by throwing Jewish networking parties: so-called Jewcrew events. He also operates a message board (www.Jewniverse.com) that is a kind of Craig’s List for the Jewish community, publishing listings of jobs, apartments, and things for sale, as well as book, movie, and restaurant reviews. At the height of the dot-com frenzy, friends and people who knew Paul through his Jewcrew and Jewniverse activities began E-mailing their business plans to him. “They considered me the master networker,” he says. After leaving Qbiquity, in December, Paul announced to his Jewcrew and Jewniverse comrades that he was launching something called the Tribe of Angels, a group for accredited investors, entrepreneurs, and vendors with an interest in the Jewish community. Within a week 50 investors and 30 entrepreneurs had joined the Tribe. Paul held the first Tribe of Angels party at the San Francisco Park Hyatt in January. He has since held four Tribe events, and word has gotten back to him that investors and entrepreneurs are indeed hooking up at the shindigs. Entrance fees from the events and advertising revenues from his E-mail newsletter, TribeWire, cover the Tribe of Angels’ operating costs. But Paul wants to get more involved in the deal flow he’s generating and to work closely with both sides of the funding equation. Paul’s idea is to hold private angel-investor briefings in which he’d present companies that are seeking funding to investors, Ã la Silicon Valley’s famous Band of Angels. After doing some research, however, Paul has found that with only a master’s degree in social work, he isn’t yet qualified to take finder’s fees on deals. “There were some SEC requirements about that,” he says. As Paul studies for his Series 7 exam, Kimberly massages the gums of a basenji, and a former tech writer whips something other than hyperbolic verbiage into submission, I find myself feeling strangely hopeful. Perhaps — like a California redwood sapling that sprouts up through fire-scorched earth — a (dare I say it?) new economy is rising from the ashes in Silicon Valley. An economy where the Internet is just another medium. Where not everything is about stock options. Where Kimberly Testa — not to mention her customers — can smile at the end of the day. Andrew Raskin is the cofounder and former CEO of Gazooba Corp. (now Qbiquity Corp.) and a contributing writer for Inc. Though he is not a dog, he could get used to the idea of being held in a towel while someone brushes his teeth. Please e-mail your comments to editors@inc.com.
Web Awards: Design Effective Web design is not about creating flashy graphics and piling on the features. The best sites appreciate the value of simplicity. Three very different Web sites took top honors in the Design category this year. One, a scooter manufacturer and marketer from New Hampshire, got the judges’ attention by creating a strong brand image and an easy-to-use format. Another, a Massachusetts-based information portal for network-storage professionals, got high marks for its clear organization. The third, a ceramics wholesaler in Boulder, Colo., won praise for its warm color palette and minimalist display of its product line. A scooter retailer, a techie news site, and a ceramics catalog. These very different companies had the same philosophy when it came to creating a Web site. Each followed the golden rule of Web design: Keep it simple. That’s an important message for growing companies to think about as the Internet enters a new phase in its evolution. People are starting to rethink what “Web design” means, taking the time to be thoughtful about design rather than just getting the site up and running. The bottom line: there’s a lot more to good Web design than just images, colors, and fonts. FIRST PLACE: Nova Cruz Products LLC Our judges gave high marks to the Web site of Nova Cruz, purveyor of the Xootr brand of scooters, for its strong identity and judicious use of Flash animation. “Talk about user-centered design. These guys rock. The whole site felt both useful and fun. Well-designed menu structure, great legibility, effective use of space, and a prominent call to action. (They have a big Buy button.) The Flash movie of the Xootr was useful and entertaining. I loved the photo gallery and the poetry. It felt like sincere fan fare, not affected.” –Harley Manning “This may be one of the better uses of the splash page — to show the product in large size. Nice color and design for the navigation menu across the top — edgy, yet bright and readable.” –Bill Demas “The home-page design does exactly what it is supposed to do: it guides the user toward scooters. The scooters are positioned in a clean, fun, urban environment — perfect for this product. I like the recurring urban-transport motif, and the fact that the design drops out of the way on lower-level pages (while remaining absolutely consistent with the look and function of the home page) is actually a plus for me.” –John Hartnett SECOND PLACE: TidalWire Inc. TidalWire’s informative site for the network-storage industry won points with our judges for making its rich content easy to navigate. “A superb example of simplicity of design accomplishing realistic goals. The simple, clean icons and color combinations easily divide the page into the three main product areas. In this case the icons actually have something to do with the content, unlike some other sites. Simple, clean, and effective.” –John Hartnett “As far as a portal site goes, this one is quite pleasing to the eye. It seems like they actually considered the overall design and didn’t just hack it together like most info-driven mishmashes. These concise nuggets of information are just right for the Web.” –Jeffrey Harkness “Generally well-thought-out design, with good use of color-coding tabs and grouping information together into the most important high-level categories.” –Bill Demas THIRD PLACE: Mosca A wholesaler of Italian ceramic dishware, Mosca garnered praise for its simplicity and its beautiful color palette, all complementing the company’s product line. “Beautiful, good catalog site. Very clean. Great color palette, which goes with the Italian motif.” –Jeffrey Harkness “Saying ‘thank you’ before a visitor registers, explaining what you will do for registrants in exchange for their information, having an opt-in check box for the mailing list, and having a brief, optional survey with an open-ended question — all those features convey the impression that the company treats its customers with respect.” –Bill Demas “A minimalist, design-oriented site. This site accomplishes its goals very well by placing the products in a gorgeous ‘upscale’ setting. Great use of color. Simple, effective navigation that works exactly as it should.” –John Hartnett State of the Art Design guru William Drenttel, a founding partner in the new-media design firm Jessica Helfand-William Drenttel, in Falls Village, Conn., spoke recently with Inc reporter Kate O’Sullivan about Web design. Inc: What do you think about Web design in general these days? Drenttel: I think we’re at a regrouping phase after the mad rush, where half the stuff didn’t work very well because it was getting built so fast. Now companies are trying to retool things to make them work right. Most companies these days are not investing a lot in new design. They’re trying to make the sites they have work better. Inc: For a small business with a limited budget, what are the most important elements of Web design? Drenttel: I think that people need to limit their ambitions and make sure they build something that they’re able to maintain and service and run. The biggest problem people have is that the scale of their sites quickly gets out of hand. It’s easy to build a Web site that’s bigger than you are. Inc: Which Web sites make good models for small-business owners? Drenttel: If you’re in the scooter business and you look at other scooter companies, that teaches you something. But a lot of the most effective, well-designed Web sites are going to exist in sectors where they care about design, places where design is part of the communication and the brand identity, such as Pottery Barn or the Museum of Modern Art. Ebay and Amazon are about selection, so it’s all navigation, it’s all search, it’s “how fast can I buy?” And those become the criteria for success. I think that’s a terrible model for a small ceramics manufacturer or a scooter company to emulate. In either of those cases the way that MOMA shows its product is more relevant. What Matters Most Clement Mok is a renowned independent design and business consultant. According to Mok, as the Internet shakeout continues, smart companies are starting to refocus their Web sites by getting back to basics. Inc: What do you think about the state of Web design these days? Mok: People want to optimize their existing investment. Certain features and functionality are no longer worth maintaining and so they get eliminated. So sites are actually clearer and more usable than they were a year ago. Inc: Do you think Web sites are better designed than they were in the past? Mok: Better is relative. Web sites are more focused and simplified and more integrated into the overall business strategy. However, on the visual design side certain things have just gotten more pedestrian. It’s partly because there’s a limited amount of money, so the effort is more focused on maintenance. That means you don’t have a lot of innovation. Striking that balance between design and functionality is what’s going to be so important as we move forward. Inc: What are the most important elements of a well-designed Web site? Mok: Usefulness. And usability. Does the interface allow the user full control? And desirability. Does it engage beyond its initial use? What are the hooks that will keep you wanting to reengage? Is it the brand, the editorial voice, or the visual appeal? A great Web site provides a balance among those attributes. Inc: What are the critical things to do when designing a site? Mok: Set realistic expectations and watch out for “feature creep.” You need to consider the market and the business every time you have a new feature. If what you want to add is so important and you have limited development resources and dollars, what are the implications? What should you give up? It’s almost like if you add one new feature, you should probably delete or delay another one. A New Attitude Bill Hill is president of MetaDesign, a San Francisco-based design company. He talked with Inc about how his clients’ expectations regarding Web-site design are changing. Inc: What do you think is going on with Web design these days? Hill: What we’re seeing is a renewed emphasis on traditional elements of design rather than this feeling of “just get it out the door.” For a while it was just “get it out and make it cool, because we’re competing with everybody out there.” Now clients are saying, “It’s gotta work.” Inc: What do you think people designing Web sites will be focusing on now? Hill: People will be looking at things like information hierarchy and navigation, and they will be trying to connect with users’ needs and trying to understand them rather than just giving them whatever technology can deliver. Inc: Do you have a pet peeve about the way Web sites are designed? Hill: Sites that try to do everything for everybody at all times. They end up with a cacophony. Banking sites try to start selling you loans, and you just want to check your balance. We have clients that say, “We want to have every new product in the company advertised on the home page.” It’s just ludicrous. What would the New York Times be like if you had advertising on the front page? I don’t think people would trust it as much. I think we’re really going to have to have some realistic way of looking at what the user needs. Inc: For a small business with a limited budget, what are the most important Web-design elements to focus on? Hill: Who are the users? Really. Be realistic. Don’t say, “Well, everybody.” Do some work to categorize the types of users. Think about what you are going to do before you have designers do it. Once you have a business plan in place, it will be a lot more likely that a designer will actually effect change. The 2001 Inc Web Awards The Best Small-Business Sites in America The 2001 Inc Web Awards: Winners A Web Strategy Runs Through It Traffic Magnets Duh-sign of the Times Home Groan Many Happy Returns Please e-mail your comments to editors@inc.com.
SOHO Balance A garden-tool distributor rakes it in by carefully deciding what he needs to do himself — and what he doesn’t Lars Hundley received his entrepreneurial epiphany while mowing the lawn. It wasn’t his lawn; it was his landlord’s. But Hundley was responsible for mowing it, and gosh darn it if he was going to spend $1,000 or more on some gas-belching mower to cut grass he didn’t even own. Hundley bought the cheapest push reel mower he could find, an $89 Home Depot special. Then he started mowing. He couldn’t believe how easy it was. It’s not as though Hundley, 31, had always dreamed of becoming an entrepreneur. “If you had told me 10 years ago that I would be in retail selling lawn mowers, I would have laughed you off the planet,” he says. At the time he was doing tech support at a videoconferencing company in Boulder, Colo., 30 hours a week. Upon encountering the push reel mower, Hundley grew interested in starting his own E-commerce company. He decided that the Internet marketplace was the best venue for him to make money selling the item. What are the chances that in any given location you could find enough people interested in environmentally friendly lawn and garden products? he asked himself. The videoconferencing company’s tuition-reimbursement program enabled him to attend an executive M.B.A. program at Colorado State University. Hundley immersed himself in Internet technology during the day and in business-school fundamentals at night. Three years later Hundley’s site, CleanAirGardening.com, is the number one online U.S. dealer of Brill push reel mowers, a top-of-the-line German brand. Hundley also sells electric mowers, trimmers, and blowers, as well as compost bins and garden tools. Last year Clean Air Gardening made $300,000; Hundley turned a profit of $100,000. His only office: a corner of his living room, in a one-bedroom Dallas condo. The office consists of no more than a wooden desk, a standard chair, and a one-drawer filing cabinet from Office Depot. For no-frills soloists like Hundley, success hinges on knowing what to automate, what to outsource, and what to do yourself. Hundley has automated much of his company’s back-end process. Yahoo Store provides him with an E-commerce engine for $100 a month. “Yahoo Store is awesome,” he says. “There’s no way that a Web-design company could build a site that does what Yahoo Store does, at least not for less than $100,000.” Hundley stores his contacts on Yahoo’s E-mail address book. He’s even automated his accounting system by setting up a Wells Fargo Internet banking account, with his suppliers designated as payees. “I don’t have to mess with licking envelopes,” he says. Some things are too complicated or important to be automated. When customers phone with questions, for example, Hundley handles the calls himself. But by last summer initial-order calls were taking up too much of the CEO’s time, so he outsourced product orders to Personalized Communications Inc., a Dallas-based call center. He paid the center about $500 to teach its operators about his products and to program his products and prices into its system; now the center charges him about $350 a month for handling basic orders and tracking marketing information. Hundley still handles customer service himself. That’s the thing about outsourcing: it saves time, but it costs money. Hundley performs certain key functions himself because for now, he says, it’s the best way to keep expenses low and profits high. But it’s always a delicate balance between minimizing expenses and maximizing his impact as CEO and sole employee. One of Hundley’s most important functions is deciding what to sell, a task he would be loath to farm out. But even so, Hundley needs to be judicious about the time and expense involved in selecting new products to offer. When he chooses a new product — a cordless hedge trimmer, perhaps, or a human-powered snow thrower — he orders as few as he can. He tests new products himself at his parents’ farm a few hours south of the city. Once he thinks he’s found a winner, he snaps a picture of it with his digital camera and often tests consumer response by listing a few items on eBay. “I won’t just sink $50,000 into ‘I think this might work,’ ” he says, because he might end up with a warehouse full of duds. That “warehouse” is actually a 10-by-17-foot, $200-a-month ministorage unit half a mile from his condo. Each day, Hundley tallies his E-mail orders — 30 to 40 a day in the spring, 5 to 10 a day the rest of the year — and prints shipping labels on his inkjet. He drives his 10-year-old Volvo sedan to the storage unit and loads the mowers into the trunk and back seat. “You can fit a surprisingly large amount of stuff in a Volvo,” he says. He drives to UPS and ships the mowers himself. Hundley works six days a week but insists he hasn’t fallen into a soloist-workaholic rut. He takes his dog to the park twice a day and rides his bike around White Rock Lake for hours. He taught a friend how to work the Volvo supply chain and then treated himself to a trip to Mexico. For his next vacation, he’s considering an outdoor-survival school in Utah. “They teach you the skills you need to survive with nothing,” he says. As if he couldn’t figure it out himself. Jill Hecht Maxwell is a reporter at Inc. Technology. Hundley’s SOHO Essentials Office: iMac computer, $1,600. Lexmark inkjet printer, $150. iOmega Zip CD burner, $189. Canon Digital Elph camera, $500. 10-inch cardboard Elvis. Sleeping border collie mutt. Telecom: Two-line Siemens cordless phone, $199. Cordless headset, $100. Voice mail from Telco, $9 a month. Panasonic fax machine, $130, with dedicated phone line, $24 a month. Nokia wireless phone, $149, with service for $80 a month. Internet: DSL connection, $40 a month. Outsourcing: Basic incoming-order phone calls handled by Personalized Communications of Dallas, $350 a month. Desktop: Yahoo Store, $100 a month. Yahoo Address Book, free. Wells Fargo online bill payment, $5 a month. Q+A with Elaine St. James Keeping it Simple People often decide to work from home to simplify their lives. But they frequently find that it just makes things more complicated, especially when they’re sharing their home-office space with family members. Inc. Technology contributor Alessandra Bianchi recently talked to Elaine St. James, author of Simplify Your Work Life, for tips on how to have your home-office cake and eat it, too. Inc.: Do you have a system for keeping family life and work life separate? St. James: It’s important to remember that a home-based business is not a substitute for child care — or elder care. My kids are grown now, but I recommend that parents who work at home educate their kids on the concept of “work time” versus “playtime.” Even young kids can learn the concept if you stick to your guns. It’s important to educate your spouse, friends, and other family members who think that because you’re at home, you’re not really working. Most adults won’t learn that concept as quickly as your kids will, but they, too, will eventually catch on. Inc.: How does technology fit into the picture? St. James: There’s no question that technology makes it possible for us to vastly improve our productivity and simplify our work lives. But be selective in giving out your cell-phone number, and don’t be timid about setting boundaries, like, “Please don’t call me between 5 and 7. That’s my dinnertime,” or “Please don’t call me on the weekends. That’s my time with my family.” It’s hard to relax and have time for yourself and your family when you know you can be interrupted at any moment by a ringing phone. Please e-mail your comments to editors@inc.com.
Cool Tools If you’re marketing to a niche or need an online forum for fresh ideas, Web logs could be the new killer app Dave Pell has a split personality. By day he’s the hard-driving managing partner of Arba Seed Investment Group of San Francisco, an angel-investment firm that funds Internet start-ups. But by night — or whenever he’s got a free hour or so — he’s posting new stuff on his Web site, acting as “chief dotconomist” and scribe of Davenetics, a daily E-mail newsletter that has become required reading for some 12,000 followers of the new economy. “I call Davenetics ‘the official newsletter of the next five minutes,” he jokes. Pell’s nether life as an online Mark Twain is just one example of a growing trend among Netheads called Web logging, or “blogging” for short. Web loggers use their Web sites to show off their insight and expertise; as a broadcast medium for customers, clients, and acquaintances; and even as a company intranet. And as entrepreneurs like Pell are discovering, Web logs can be invaluable for building their businesses and brands. At its most fundamental level, a Web log is a Web site, or a section of a Web site, whose overriding characteristic is its ever-changing list of links. But Web logs are also Internet-age gardens. Bloggers add new links — like so many new seeds — to the top of their Web page, and older, staler items drop to the bottom and are later composted in archives. Web loggers can organize their sites in threaded topic areas, bulletin-board style, and visitors can use Web-logging tools — such as those available at GrokSoup (www.groksoup.com) — to easily add their own responses to articles and ideas posted on the site. As a communications and loyalty-building tool, a Web log provides both a news filter and a freewheeling forum that can enhance a company’s reputation and encourage customers to come back to the site. Web logs can also be used as a kind of company intranet to keep employees in the loop. And because Web-logging tools are free and require no programming knowledge to operate, they might just be the hottest thing since E-mail. Fame in Internet Time Of course, news digests predate Walter Cronkite. And surfers have passed around links to one another since the birth of the Internet. Plenty of Web sites, such as Slashdot.com and the Drudge Report, are fundamentally little more than Web logs. But thanks to a slew of relatively new, free, downloadable, and look-Ma-no-programming Web-logging tools, creating a Web log is easier than ever. (See “Blog Me, Baby,” below.) Web-logging tools have already turned thousands of Netheads into self-styled news filters and critics. The vast majority of Web loggers are cyberspace hobbyists and subversives, who publish their own daily stream-of-consciousness wanderings using the Internet’s vanity press. They pick and choose articles of interest, respond to them, and invite others to contribute their own views on a continuously evolving basis. Pell, for instance, surfs dozens of Web sites — ranging from the New York Times online to a gossip site called Techdirt.com — for the latest Web-related news of interest to entrepreneurs, investors, journalists, and the merely curious. Using a set of easy-to-use Web-logging tools, he creates pithy headlines and descriptions of the articles along with links to the full articles at their original sites. Call Davenetics an electronic news service with attitude. The mix of news and views that Pell serves up shields his devoted readers from the informational tsunami of the hundreds of conventional news sources that threaten to engulf them. “In this fast-paced E-biz world, time’s not merely money, it’s survival,” says Rik Myslewski, longtime Davenetics fan and editorial director of Productopia.com, a San Francisco-based consumer-information site. ” Davenetics’ timely updates save me and my troops the precious hours it would take to sift critical news from background noise.” Pell insists that blogging doesn’t interfere with his work at Arba Seed Investment. In fact, he says, it’s really a part of his job. His newsletter has attracted the interest of publications like Forbes, which now invite Pell (who previously hesitated to approach publications through the usual front door of pitch letters) to contribute articles on seed investments and the Net in general. The publicity “has added a lot of value to my brand,” he says, squelching a smile. “I get invited to a lot of nice dinners with smart people offering new business opportunities.” Rebecca Blood, a Web developer and consultant who formerly managed a departmental site at the University of Washington, uses her Web log, www.rebeccablood.net, as an outlet for her creative expression. But her skill at Web logging also subtly promotes her skills as a Web designer and manager, and demonstrates her knowledge of the Internet itself. “A Web log offers an easy platform for self-expression, and it’s easier to set up than an elaborate Web site,” Blood says. “And it’s much more effective than setting up a mailing list where you’re just pushing out E-mail at people about the links you find.” Blood’s site is dear to the large, growing, and endlessly creative Web-logging community, the vast majority of which fiercely opposes the notion that businesses could exploit Web logs for their own capitalist purposes. “I’ve never seen a business do Web logging, and frankly, I hope I never do,” says journalist Jim Romenesko, who operates two news-filtering Web logs, www.obscurestore.com and www.medianews.org. “There’s a certain resentment among independent writers who feel businesses will try to co-opt them.” Nevertheless, it’s happening. Businesspeople like Terry Yelmene see great potential in using a Web log to tout their own expertise. Yelmene, a consultant with 3C3 Applied Research and Technology, a four-person company based in Boulder, Colo., is an expert in knowledge management. Large businesses in the Boston area hire Yelmene and his colleagues to help them find out which employees know what and to develop ways of sharing that knowledge. Yelmene’s Web site, www.3C3art.com, will soon feature a link to a personal Web log called “Knowledgeer at Large,” which will include constantly updated links to new articles of use to his company’s clients and anyone else interested in the wide world of knowledge management. “I’m taking content about knowledge management and publishing my opinions within the framework of a Web log that can be read by my clients and the knowledge-management community,” says Yelmene. “It will be great for my business, because it’s a mechanism for demonstrating what I can do.” If your Web log is successful, your electronic community will grow, which can be both good and bad. Dave Winer also uses his Web log to opine. The CEO of UserLand Software Inc., an eight-person software company in San Francisco, Winer holds forth on content-management software for the Web on UserLand’s public site. Each of the company’s development-team members keeps a public Web log — using tools the company has developed — on the UserLand site, where they share their technical knowledge with the Web-development community and ask for public feedback. Winer and his far-flung colleagues — who work in Seattle and Los Angeles and even in Germany — also use their Web logs as a corporate intranet. After entering the password-protected private site, they follow links to get information on employees, projects, sales numbers, milestones, and more. Winer is able to oversee the private site, post information to it, monitor bugs, and track project deliverables using specific software. “Our Web log is our management process,” says Winer. “It’s remarkable how much more productive we’ve become using it.” To Blog or Not to Blog Although Web logging has valid applications for many kinds of companies, it isn’t practical for every small business, says Jakob Nielsen, principal of Norman Nielsen Group, a consulting company in Mountain View, Calif., and author of Designing Web Usability: The Practice of Simplicity. “You have to be able to say something reasonably new every day about what’s happening in your field,” Nielsen says. “If you have a static site and an irregular publishing schedule, you will turn people off.” And while self-expression may be the main goal of individual Web loggers, a company’s Web log has a different raison d’être. As a marketing tool, it’s the organization’s public and professional face. Thus, anyone who regards word-mongering as more of a struggle than a pleasure should probably avoid Web logging, Nielsen says, noting that there’s nothing worse than reading someone’s bad content. (Hint: If you don’t have the requisite writing skills, find someone who does and put them on daily Web-log duty.) Stretch yourself too thin, and your lack of energy will show in the poor quality of your Web log, he says. “Companies that lack the resources to commit to a daily Web log would be better off publishing a semimonthly E-mail newsletter, containing some fresh insight and links to interesting articles,” Nielsen advises. Another key factor is commitment, veteran Web loggers say. “Doing a good Web log takes a lot of time,” says journalist Romenesko. “Some people have a hard time sitting down and working on them for a few hours a day.” And a fledgling blogger shouldn’t expect any kind of immediate return on the labor investment. “It took me months and months to develop an audience,” Romenesko notes. Even more challenging is the notion of building credibility by swallowing your pride and linking to the other guy’s site. To be a credible Web logger, “you have to have the guts to point to things that are of interest, even if they are considered competitors,” Nielsen insists. Linking to competitors’ sites poses no problem for Brent Holliday, a partner with Greenstone Venture Partners (www.greenstonevc.com), a four-person venture-capital firm in Vancouver, British Columbia. Like Terry Yelmene and Dave Pell, Holliday uses Greenstone’s Web log (the Greenstone Grok) to show off his company’s expertise. The site provides links to news items of interest to entrepreneurs and the high-tech community in the Pacific Northwest — regardless of the parties involved. “Other venture capitalists will come to me and ask, ‘Why did you put the news of our deal on your Web site?” says Holliday. “They don’t notice that people come to us first — and every day — as a source of intelligence. It increases our credibility to talk about what’s going on, no matter who’s doing the deals.” Size is a factor, too. If your Web log is successful, your electronic community will grow, which can be both good and bad. Instead of being an adjunct to your business, your Web log could threaten to consume it. You might find yourself needing to add hardware, bandwidth, and more resources, and gradually morphing into a publisher. “This is a long-term marketing tool,” says Nielsen. “You have to cost everything out and think about how you will deal with it over time.” Caveats aside, dedicated Web loggers can find themselves basking in their 15 minutes of fame, not to mention the loyalty of their customers. “Blogging is the platform for a new meritocracy,” says Pell. “It removes the barriers to creative performance. You don’t have to have the leverage of a major media corporation, but you can prove to the reader that you are smart and good at what you do.” Blog Me, Baby The cool thing about the Internet is that as soon as something becomes popular, someone’s going to find a way to make it easier to participate. And Web logging is no different. The tools listed here are free and easy to use, and help automate (and greatly accelerate) the blog publishing process. You don’t need to know how to write any code, and you don’t need to install any server software or scripts. Yet you can still fully control the look and location of your blog. To use these tools, however, you will need to have either a Web site or access to a Web server. (You can get Web-server access through your Internet service provider.) Web Site What It Does Blogger (www.blogger.com) Blogger provides a template for your page that indicates where you want your information posts to appear. When you make a new post, you’ll get “Post” and “Publish” buttons that will automatically send your new page to your Web server. No programming is required, though Blogger asks that you link your page back to its site. UserLand (http://manila.userland.com) UserLand’s downloadable software comes with “Edit This Page” buttons that let you update your Web log easily without having to worry about programming. GrokSoup (www.groksoup.com) GrokSoup is a classy, supersimple tool with a very straightforward interface for building a Web log. Registration and a password are required. Please e-mail your comments to editors@inc.com.
Getting In on the E-Signature Game Over the centuries, signatures have come in many forms, from a simple mark to a copperplate John Hancock to the imprint of an intricately carved ivory seal. Now the U.S. Congress has added “electronic sound, symbol, or process” to the list. That’s how electronic signature is defined in the Electronic Signatures in Global and National Commerce Act, which went into effect on October 1. In principle, the term’s broad definition means that signing one’s name can be as simple as sending an E-mail or pressing 1 on a Touch-Tone phone. But companies doing business online could opt for more sophisticated technologies should they desire a higher level of security and comfort. Anyone can create digital signatures using common desktop applications, such as Microsoft Outlook, Netscape Communicator, and Adobe Acrobat. While those signatures are images, Montreal-based onSign, a unit of Silanis Technology, offers free software for script aficionados that embeds a digital signature in the image of a user’s handwritten name. A digital signature operates by matching two “keys” — very large numbers used to encrypt information. You use your private key to generate a signature. You then send (or store online) a digital certificate containing your public key with each signed document. The certificate explains who you are to the document’s recipient, and the public key allows him or her to verify your signature. If the keys don’t match — or if the document has been altered since you signed it — the verification attempt will fail. In many simple digital-signature programs, users issue their own certificates. That method may be adequate among correspondents who know one another, explains Lisa Pretty, executive director of the PKI Forum, a public-key-technology industry group. If additional security is necessary, companies such as Dallas-based AlphaTrust Corp. can fill the breach by issuing users a digital ID that allows the recipient of their documents to verify their identities and validate their electronic signatures. In the end, ensuring 100% validity when it comes to digital identities may not be possible. But signature verification in the paper world isn’t foolproof either, says Rick Lane, director of E-commerce and Internet technology at the U.S. Chamber of Commerce. “There’s no difference,” he says. “Those concerns don’t change.” –Mary Kwak The E-Sign Law: Just the Facts Electronic signatures and records have the same legal validity as handwritten signatures. No one can be required to use or accept electronic signatures or records. States can preempt the new law by adopting the Uniform Electronic Transactions Act (which is technology neutral) or by enacting laws that similarly do not specify which technologies qualify as electronic signatures. The Electronic Signatures in Global and National Commerce Act does not apply to certain documents, including wills, divorce papers, and court orders. Source: Electronic Signatures in Global and National Commerce Act. High-Wired Competition As recently as five years ago, nothing in New York City symbolized the financial ruthlessness of the 1980s more than a vacant building at 55 Broad St., just west of the New York Stock Exchange. Once the home of Drexel Burnham Lambert Group Inc., the 400,000-square-foot structure sat empty for five years after the giant securities firm collapsed into bankruptcy, in 1990. Desperate to find tenants, the Rudin Management Co. upgraded the building by installing state-of-the-art wiring, then offered the space to high-tech start-ups at bargain rates. From the start, Rudin Management executives insisted they were creating a community, a place where creative entrepreneurs could “cross-pollinate.” John Gilbert, Rudin’s chief operating officer, says tenants cooperate in a variety of ways, from embarking on joint ventures to sharing ideas and services. Ultimately, that’s how it worked for Thomas Pennell, CEO of Pennell Venture Partners, which has been a tenant at 55 Broad St. for more than four years. Initially, he says, he didn’t interact much with his neighbors, mostly other struggling start-ups. More recently, though, the building has attracted bigger, better-known technology companies; as a result, Pennell says, he’s done some deals with his workplace neighbors and expects more to follow. But other people get a little nervous about working side by side with potential competitors. Rudin Management “put a nice spin on it,” says Charles Smith-Semedo, CEO of NewMedia Technology Corp., based at 55 Broad. But in Smith’s opinion, any serious networking happens outside the front door. “When you get on the elevator, everybody stops talking,” he says. Meanwhile, even the most community-minded businesses watch their neighbors for signs of failure. When one Internet start-up directly below Pennell’s space failed, the venture capitalist says, “we just took their furniture and wished them well.” –Anne Stuart Healthy Skepticism for ASPs Application service providers (ASPs), software companies that manage data for you on the Web, are struggling to convince small-business owners that the ASP model is a secure one. Now Accpac, a subsidiary of Computer Associates, has started one of a few partner programs in which accounting firms host Accpac applications on their Web sites. Through those programs, small-business owners can begin using the ASP offerings through companies they already know and trust. Another small-business anxiety: even though the whole point of the ASP model is that it allows data to live anywhere, many CEOs want their data to remain physically close to home. So Accpac has built regional data centers. CEOs “like it that their data is in a building they can drive to, surrounded by fences and guard dogs,” says Robert Lavery, vice-president of strategic alliances for Accpac, only half joking. And small-business owners are absolutely right to be wary, says Joseph Fuccillo, a senior vice-president at Xand Corp., a Hawthorne, N.Y., company that provides hosting hardware and services to ASPs. “If you’re going to outsource any business-critical data, you should go see the facility and make sure it’s not in someone’s garage,” he says. –Jill Hecht Maxwell Things We Love Pat O’Neill’s monthly mailings to prospective new accounts were getting a little stale. Her solution: CD-ROM business cards. First she filmed a three-minute commercial for O’Neill Benefits Group Brokerage, her four-employee benefits-intermediary business in Boulder, Colo., and sent it to Microbizcard Inc., of Toronto, which burned it onto CDs the size of business cards. O’Neill paid about $2 per disc, though Microbizcard has since dropped its prices to $1.50 per unit with a purchase of 500 discs. Microbizcard offers the discs in the customer’s choice of 12 standard shapes, such as squares and ovals, or cuts them into custom designs, such as a pair of boxing gloves or a can of soda. CD-ROM business cards have been around for about three years. What’s new, says Microbizcard vice-president Dionne Skinner, is that the cards can now hold all kinds of multimedia goodies and even have E-commerce capability. The downside: Some computers won’t play the business cards without an adapter. Still, O’Neill remains eager to mail out her multimedia missives along with the regular, paper business cards. “One day CD-ROM business cards will be all over the place, and once people have a pile of them, they won’t stick them into their machines,” she says. “But right now, even if they pop them in for a minute, I look good.” –J.H.M. Tracking Tech Time At first glance the job he’d done on the pet-themed Web site seemed a job well done to Todd Jones. His Internet consulting company, Semtor Inc., had built the site efficiently — or so he thought. But when it came time to bid on the next job, Jones took a closer look. It turned out that his company had invested 1,724 person-hours in the pet site, 124 more than it had figured into the price. “That cost us about $6,000,” Jones says. Jones knew the exact numbers because Semtor, based in Weston, Fla., uses professional services automation (PSA) software from Toronto-based Changepoint Corp. ( www.changepoint.com). Invented by techies for techies, it helps consultants figure out what to charge before a job begins and how to track their services once a project is under way. The software is licensed for a onetime fee of $500 to $2,000 per user. Customers can also rent it from Changepoint over the Internet for $70 and up per user per month. Companies are also using Changepoint to help their own technology departments track their costs — and justify their budgets. For instance, at Integris Health Inc., a health-care network based in Oklahoma City, the 160-person IT division is planning to use the software to send dummy bills to other departments to chart how it’s spending its time. “When the VP of a different division says, ‘I don’t get anything out of IT,” explains Integris IT director Cynthia Hilterbrand, “we can say, ‘That’s interesting. We gave you 2,000 man-hours.” PSA’s ultimate value may be as a management tool for projecting costs for future work. Jones says that the detailed information that Changepoint provided on the pet-site job allowed Semtor to bid for its next job more accurately. Integris, too, plans to use its new knowledge about IT work demands to budget IT staff time. –Jane Salodof MacNeil Outsourcing IT: What It Costs Application Maintenance: $250,000 to $100 million for a three year to five year contract Hardware Support: $2,000 to $1 million annually Application Service Provider: Either $20 to $2,000 per user per month or up to 10% of revenues per transaction Call Center: $100,000 to $2 million annually Web-Site Hosting: $20 to $100,000 monthly Custom Development Project: $2,000 to $100 million, depending on the length of the contract Source: Ian S. Hayes, president, Clarity Consulting Inc., Hamilton, Mass. Wanted: Tomb Raider Computer games are really starting to get down to business. The University of California at Irvine is launching a 10-course program next semester called Gaming Studies. The program melds graphic arts, computer science, social sciences, and performing arts. UC assistant professor Robert Nideffer, who got the ball rolling and holds graduate degrees in computer arts and sociology himself, expects the gaming-studies field to become even more popular than film studies has been. Several other schools have gotten on the bandwagon as well. Nongaming companies should keep an eye out for gaming grads. “Building a game is a very sophisticated project-management environment,” notes Brian Reithel, president of the Foundation for Information Technology Education, the research arm of the Association of Information Technology Professionals. –J.H.M. Hot Tip: Limo as Mobile Office As Steve Healis’s janitorial-services company, Avalon Building Maintenance Inc., of Anaheim, Calif., was expanding, the CEO found himself spending 8 to 10 hours a week just driving to customer sites and division offices throughout southern California. To catch up on the work he wasn’t getting done while on the road, Healis ended up working extra nights and weekends. His solution: a mobile office. Healis and division managers now travel in one of three vans or a limousine, all outfitted with an inverter, a device that lets them use laptops, printers, and fax machines en route. The vehicles each cost about $55,000, plus $1,000 for the inverter. Janitors who do detail work at customer sites do the driving. When Healis visits potential customers, he can go out to the car, work up a proposal, and, he says, return it to the customer five minutes later. He credits the mobile offices with allowing him and his managers to handle more work during the company’s growth spurt — $150,000 a month in business each, compared with the $100,000 they did a month before they got the equipped cars. (Avalon Building Maintenance is on track to do $8 million in business in 2000.) But Healis acknowledges that he sometimes gets a bit uncomfortable riding around in the limo. Referring to the few times the paparazzi have mistaken him for a celebrity when he pulls up to a job on Beverly Hills’ Rodeo Drive, he says, “I just want to say, ‘No, I’m the janitor!’ ” –Julia Ramey Seeing Blue What is it about the color blue? We’ve noticed more and more companies — especially high-tech and Internet businesses — copping the cool tone for use in their names. Perhaps CEOs want their businesses to grow up to be IBM, or maybe they’re just huge Cookie Monster fans. Leatrice Eiseman, director of the Pantone Color Institute, in Carlstadt, N.J., counsels companies on how customers react to colors. “Invariably, when we show people a blue swatch, we get the same kind of response: words like constant, loyal, dependable, and always there for you,” Eiseman says. “It comes from the mind’s association of blue with the sky and water — things that are never going to go away.” In other words, true-blue. Here’s a list of just a few of the blue-toned businesses we’ve come across: Bleu22 Studios Blue Dog Multimedia Blue Dot Interactive Bluefly Inc. Blue Hypermedia Blue Martini Software Bluemercury Blue Moon Internet Services Blueprint Technologies Blue Pumpkin Software Blue Shoe Technologies Blue Sky Internet Inc. –J.H.M. Who’s Afraid of E-Commerce? Less than a fifth of U.S. small businesses sell online, according to IDC, a research group in Framingham, Mass. But never underestimate the power of the Net. By 2005, Americans will spend more than $632 billion in stores as a direct result of research they’ve conducted online — more than triple what they’ll fork over when shopping electronically, says Jupiter Research senior analyst Ken Cassar of New York City. –J.H.M. Please e-mail your comments to editors@inc.com.
Pat O’Neill’s monthly mailings to prospective new accounts were getting a little stale. Her solution: CD-ROM business cards. First she filmed a three-minute commercial for O’Neill Benefits Group Brokerage, her four-employee benefits intermediary business in Boulder, Colo., and sent it to Microbizcard Inc., of Toronto, which burned it onto CDs the size of business cards. O’Neill paid about $2 per disc, though Microbizcard has since dropped its prices to $1.50 per unit with a purchase of 500 discs. Microbizcard offers the discs in the customer’s choice of 12 standard shapes, such as squares and ovals, or cuts them into custom designs, such as a pair of boxing gloves or a can of soda. CD-ROM business cards have been around for about three years. What’s new, says Microbizcard vice president Dionne Skinner, is that the cards can now hold all kinds of multimedia goodies and even have e-commerce capability. The downside: Some computers won’t play the business cards without an adapter. Still, O’Neill remains eager to mail out her multimedia missives along with the regular, paper business cards. “One day CD-ROM business cards will be all over the place, and once people have a pile of them, they won’t stick them into their machines,” she says. “But right now, even if they pop them in for a minute, I look good.” Copyright © 2000 G+J USA Publishing
