Tag Archives: Jim Goodnight

About 3338 days ago E-Commerce

Jeff Bezos

Jeff Bezos Amazon.com because “optimism is essential” Few entrepreneurs have taken as many lumps in the court of public opinion as Jeff Bezos has since his famous cross-country drive to Seattle in 1994 to found Amazon.com. Even as recently as June 2000, Lehman Brothers analyst Ravi Suria was memorably predicting that Amazon, based on Suria’s analysis of the company’s cash flow, would be unable to service its debt by the first quarter of 2001–and a lot of people believed him. As a result, Bezos had to spend quite a bit of time fending off speculation that bankruptcy was around the corner and explaining why he’d chosen, at least initially, to stress growth over profitability. (The fact that the company’s most famous Wall Street booster had been Henry Blodget only made matters worse, as Blodget sank into infamy even faster than the market declined.) But even fewer entrepreneurs have had the satisfaction of succeeding despite such skepticism. Not long after Amazon announced its first-ever full-year profit, we invited Bezos to talk about how he beat the odds and what the future holds–not just for him and for Amazon but for the entrepreneurial spirit. I’ve joked that in the case of Amazon.com, half of it was good timing, half of it was luck, and the rest of it was brains. And there’s a lot of truth in that. The fact of the matter is, the odds are stacked against any start-up. Heavily so. There’s a huge amount of luck and timing involved. Amazon.com’s most vulnerable moment was when we were trying to raise a million dollars of angel financing–there was a moment there, back in 1995, where the company very easily could have not continued to exist. We probably had meetings with over 60 people, the process took several months to close, and we ultimately raised the money from about 22 different angel investors. And by the way, that’s completely normal: There was a period in the late 1990s when people could, with a single phone call, raise $60 million, but that’s abnormal. If you go out to raise a million dollars for an untested idea–that’s supposed to be hard. And it was. But I am very optimistic. I’m generally a very happy person. My wife says, “If Jeff is unhappy, wait three minutes.” I believe that optimism is an essential quality for doing anything hard–entrepreneurial endeavors or anything else. That doesn’t mean that you’re blind or unrealistic, it means that you keep focused on eliminating your risks, modifying your strategy, until it is a strategy about which you can be genuinely optimistic. People think entrepreneurs are risk-loving. Really what you find is successful entrepreneurs hate risk, because the founding of the enterprise is already so risky that what they do is take their early resources, the small amounts of capital that they have, whatever assets they have, and they deploy those resources systematically, eliminating the largest risk first, the second-largest risk, and so on, and so on. “You don’t choose your passions, your passions choose you.” Entrepreneurship is really more about a state of mind than it is about working for yourself. It’s about being resourceful, it’s about problem solving. If you meet people who seem like really good problem solvers, step back, and you’ll see that they are self-reliant. I spent summers on my grandfather’s ranch, in a small town in Texas; from age four to 16 I probably missed only two summers. One of the things that you learn in a rural area like that is self-reliance. People do everything themselves. My grandfather bought a used D6 Caterpillar bulldozer, and it had a stripped transmission. He had to get a big gear out of this thing and that one gear probably weighed 500 pounds–so he had to build a small crane! That kind of self-reliance is something you can learn, and my grandfather was a huge role model for me: If something is broken, let’s fix it. To get something new done you have to be stubborn and focused, to the point where it might seem unreasonable. But at a certain point, you have to be flexible and change. The hard part, of course, is knowing when to be stubborn and when to be flexible. So we do a lot of experiments. Some of the experiments succeed and some fail, but all of them are designed to improve the customer experience. Look at something like free super saver shipping–our free shipping on orders over $25. That is something we very methodically experimented with for a full year. At first, orders over $99 would ship free, and then orders over $49 would ship free, and then orders over $25 would ship free. We knew that customers would like that, so it was a question of, would it drive enough sales to make it worthwhile? We compared it with a television advertising campaign: We picked two markets, Minneapolis and Portland, Oreg., and for a year we did television advertising just in those markets. We wanted to see if we would get a sufficient lift in sales to justify television advertising, and to compare that with giving the money directly to the customers in the form of free shipping instead of to the television networks. That’s a very customer-experience-focused experiment, and when we were done we decided we would make the $25 free shipping indefinite. It’s been in place now for almost two years. On the other hand, we invested in a number of dot-com companies–Pets.com, Living.com, Kozmo.com, and Homegrocer. Our strategy was to create placeholders for these categories that seemed interesting to us. But ultimately all the businesses I mentioned failed. Of course, if I knew everything I know now, I would have invested the money differently. But that’s hindsight. When you do experiments you have to expect a certain fraction of them not to succeed. Even once you have a strategy that makes sense and holds together from different angles, optimism is essential when trying to do anything difficult because difficult things often take a long time. That optimism can carry you through the various stages as the long term unfolds. And it’s the long term that matters. If you look at the online space over the next 20 years, you’re going to continue to see innovation. Certainly things are different from nine years ago, but there are still going to be thousands and thousands of successful companies. This is a big industry, and it’s going to have lots and lots of winners, of all sizes. Amazon itself has a kind of ecosystem of people involved in entrepreneurial activities. We have 600,000 active seller accounts now, and over 900,000 associates–the websites that link to us–and a lot of those are small businesses with multiple employees. We recently started making available software kits that let people use the basic building blocks of Amazon.com to build their own websites and e-commerce applications and so on, and we’ve had over 50,000 downloads. That’s beyond what we would have expected. If I were just setting out today to make that drive to the West Coast to start a new business, I would be looking at biotechnology and nanotechnology. I also think about data security–every time you read about the next computer virus, you wonder if there aren’t entrepreneurial solutions to that. These are fundamental technologies, things that are going to change the world. But the truth is, I probably wouldn’t do any of those things because I grew up programming computers. So maybe I’d think about data security, but I’m sure I’d do something with software and computer science and software engineering. Certainly, in the spring of 1994, the thing that motivated the formation of Amazon.com was noticing that Web usage was growing at 2,300% a year. One of the huge mistakes people make is that they try to force an interest on themselves. If you’re really interested in software and computer science, you should focus on that. But if you’re really interested in medicine, and you decide you’re going to become an Internet entrepreneur because it looks like everybody else is doing well, then that’s probably not going to work. You don’t choose your passions, your passions choose you. One of the reasons you saw so many companies that were formed in 1998 or 1999 fail is that they were chasing the wave. And that usually doesn’t work. Find that area that you are interested in and passionate about–and wait for the wave to find you.–Rob Walker Rob Walker is a contributing editor. Jeff Bezos, Amazon.com because “optimism is essential” Betsey Johnson, Betsey Johnson for her stylish life Russell Simmons, Rush Communications for his powerful example Scott Cook, Intuit because he learns, and teaches Sergey Brin & Larry Page, Google for their integrity. And, well, for Google David Neeleman, JetBlue for creating an airline fit for humans Tom Stemberg, Staples for doing it exactly right Jack Stack, SRC Holdings for going naked Judy Wicks, White Dog Enterprises because she’s put in place more progressive business practices per square foot than any other entrepreneur Davin Wedel, Global Protection because he’s a lifesaver Pat McGovern, International Data Group for knowing the power of respect Steve Jobs, Apple Computer, Pixar because we like to be seduced Lance Morgan, Ho-Chunk because a man must make his own arrows–Winnebago proverb James Goodnight, SAS for saying no to Wall Street (repeatedly) and yes to the people who really matter Stella Ogiale, Chesterfield Health Services for doing good while doing well Rhonda Kallman, New Century Brewing for seizing opportunity– again and again Laima Tazmin, LAVT because she’s a lot like other kids–and then again… Laura & Pete Wakeman, Great Harvest Bread for living a little –no, a lot Andra Rush, Rush Trucking for rolling up her sleeves Kathleen Wehner, Cirrus Aviation for refusing to quit Frank Venegas, Ideal Group because he parlayed a little bit of luck into a lot of good fortune for others Dan Wieden, Wieden + Kennedy because he’s a true independent John Sperling, Apollo Group because he stirs the pot, and apparently always will John Stollenwerk, Allen-Edmonds for his commitment to U.S. workers. We also love the shoes Mel Zuckerman, Canyon Ranch for showing the way

About 3338 days ago E-Commerce

Laima Tazmin

Laima Tazmin LAVT because she’s a lot like other kids–and then again… Laima Tazmin, president of LAVT LLC, a Web consulting company based in a ramshackle prewar upper Manhattan building, is laying out her vision for the company’s expansion into customizing computers and developing community-based online businesses. Tazmin’s office is efficiently sparse, all her papers are properly filed, and her workspace is ordered and symmetrical, down to the dueling computer terminals that allow her to work side-by-side with an assistant, who scours Internet boards for new markets. It’s a lean, effective operation, considerably more advanced and potentially more lucrative than the typical entrepreneurs of Laima’s lot. That lot would be babysitters, lawn mowers, paper routers, and burger flippers. Laima Tazmin is a 15-year-old freshman. The assistant is her mom, Lora. “Laima is the top kid I have personally ever worked with, and that’s out of 9,000,” says Steve Mariotti, founder and president of the National Foundation for Teaching Entrepreneurship (NFTE). “I’ve never met a kid like that.” It was an NFTE instructor who introduced Laima, who was then in sixth grade (she was thoroughly self-taught in HTML by that point), to the world of small business. “He taught us we could turn our interests and hobbies into ideas for companies,” says Tazmin. She parlayed her love of computers into a business plan that initially won a regional competition and then, after a bit of tweaking, bested plans from high school and college-age kids to win her the “Young Entrepreneur” contest sponsored by Fleet Bank. That netted her both $2,500 and a taste of media exposure. Money doesn’t seem to be the force behind Tazmin’s march toward the wunderkind hall of fame. Rather she has a sincere desire to build a viable company that can more or less sustain itself when she hits some lucky college campus in 2007. Essentially, she sees herself setting up a “network of associates” (other college kids) to do her grunt work. To that end, she has burned through every program NFTE offers and is now the guinea pig in an “Executive Incubator” that offers Deutsche Bank director Joe Carvin as a mentor. “Laima has the technical skills, creative ability, and seriousness of purpose,” says Carvin, “and she’s in an industry where young people can have a competitive advantage.” To think she took her baby steps toward becoming a mogul on Communist soil. Laima was born in Cuba, the daughter of a Russian mother and a Cuban father who left the family portrait years ago. Lora brought Laima and her older brother Arlin, who is now 26, to the United States via the Soviet Union in 1995. It’s the American dream played out with a tinge of adolescent angst, or it would be if Laima weren’t so preternaturally calm. On top of her quiet confidence, Laima has incorporated Buddhist meditation into her daily routine, which explains her Taoish nuggets like “Failure is a step to success.” She is the polar opposite of the high-strung, ready-to-snap-and-go-ballistic type A’s who water the lawns of prep schools with their tears over a B-plus. She is a sunny, charming, well-adjusted young girl who just happens to have a copy of the Idiot’s Guide to Making Millions on the Internet on the same bookshelf as the latest Harry Potter, a Shrek DVD, and Hello Kitty memorabilia. “I find Laima to be extraordinarily poised beyond her years,” says Tom Phillips, one of her (10, at the moment) clients, who owns a communications consulting firm and hired her to give him a Web presence. “Her work is great.” The accolades pour in from all corners, including her fellow students, who recently voted her class president, just another application-builder in her heavily scheduled young life, which is filled with: studying; shaking it as a member of the school’s hip-hop dance team; hardwiring desktops; playing tennis and basketball; volunteering for a cyber-project that lets war veterans tell their stories digitally; speaking on behalf of NFTE; writing a novel; and oh, yes, running a successful business. If she seems too good to be true, remember that teenagers have a way of defying expectations. So maybe she won’t become Bill Gates, but she’ll definitely be Laima Tazmin. “I want to direct my own life,” she says with a knowing grin. “Entrepreneurship is about planning for the future, and I want to develop my creativity to have freedom. I want to grow myself.”–Patrick J. Sauer Patrick J. Sauer is a staff writer. Jeff Bezos, Amazon.com because “optimism is essential” Betsey Johnson, Betsey Johnson for her stylish life Russell Simmons, Rush Communications for his powerful example Scott Cook, Intuit because he learns, and teaches Sergey Brin & Larry Page, Google for their integrity. And, well, for Google David Neeleman, JetBlue for creating an airline fit for humans Tom Stemberg, Staples for doing it exactly right Jack Stack, SRC Holdings for going naked Judy Wicks, White Dog Enterprises because she’s put in place more progressive business practices per square foot than any other entrepreneur Davin Wedel, Global Protection because he’s a lifesaver Pat McGovern, International Data Group for knowing the power of respect Steve Jobs, Apple Computer, Pixar because we like to be seduced Lance Morgan, Ho-Chunk because a man must make his own arrows–Winnebago proverb James Goodnight, SAS for saying no to Wall Street (repeatedly) and yes to the people who really matter Stella Ogiale, Chesterfield Health Services for doing good while doing well Rhonda Kallman, New Century Brewing for seizing opportunity– again and again Laima Tazmin, LAVT because she’s a lot like other kids–and then again… Laura & Pete Wakeman, Great Harvest Bread for living a little –no, a lot Andra Rush, Rush Trucking for rolling up her sleeves Kathleen Wehner, Cirrus Aviation for refusing to quit Frank Venegas, Ideal Group because he parlayed a little bit of luck into a lot of good fortune for others Dan Wieden, Wieden + Kennedy because he’s a true independent John Sperling, Apollo Group because he stirs the pot, and apparently always will John Stollenwerk, Allen-Edmonds for his commitment to U.S. workers. We also love the shoes Mel Zuckerman, Canyon Ranch for showing the way

About 4465 days ago E-Commerce

A Helping Hand With Taxing Matters

Best of the Web Tax pointers are available from several online sites at no charge. Twelve CEOs assess what the advice is really worth Print neatly. That’s the kind of advice that the IRS considers a “dynamite” tax tip, Dave Barry once wrote in his Miami Herald column. “If you ask them a real tax question, such as how you can cheat,” Barry said, “they’re useless.” The IRS won’t tell you how to cheat, but it does attempt to mitigate the tax-filing (if not the tax-paying) ordeal by offering a helping hand, and now it does so online. In partnership with the Small Business Administration, the IRS makes tax information for business owners quickly and easily accessible on a Web site titled Small Business Corner ( www.irs.ustreas.gov/bus_info/sm_bus). The site offers the government’s latest intelligence on such things as its rules for business-expense deductions and what the tax agency considers the best record-keeping systems for small companies. If the IRS is the authoritative source of tax information, is there any reason to look elsewhere on the Net for tax expertise? Several privately owned sites say yes. Each site has its own spin, depending on what group it aims to attract — a general small-business audience or merely start-up entrepreneurs, for example. Like the IRS site, the private offerings are free. They contrast with the tax-prep sites, such as Intuit’s TurboTax or H&R Block’s TaxCut, which enable users to fill out their tax returns online for a fee. To determine which of the tax-advice sites were worthwhile, Inc. asked 12 small-business CEOs to evaluate seven of the most popular ones. Two of the sites belong to Big Five accounting firms: Deloitte & Touche’s Dtonline.com and Ernst & Young’s TaxCast.com. Individual accountants operate others, including TaxMama.com, which began as an online newsletter. Another site that was a newsletter before it evolved into an in-depth source of complex tax matters is TaxProphet.com. It has 40,000 users and registers about 300,000 hits a month, according to tax lawyer Robert L. Sommers, who runs it. Although the sites don’t charge user fees, some make money by selling ads posted alongside the tax advice. Others are marketing tools. For example, Sommers, who’s also a columnist for the San Francisco Examiner, says that TaxProphet.com brings in clients for his law practice — and generates ideas for his column. Sommers claims that even taxpayers who have the assistance of a certified public accountant can benefit from consulting the tax-code nuances laid out in TaxProphet.com. “At tax time, CPAs are working 18-hour days and may not have time to ponder the gray areas, like whether you need a W-4 for the Israeli teacher you employed or if a treaty with Israel makes that unnecessary,” he says. Traffic is heaviest on the sites in the run-up to the April 15 tax-filing deadline, but they post information for all seasons. One tip on TaxMama.com last fall, for instance, suggested that tax-payers consider charging business expenses to a credit card up until December 31, 2000. The charges are deductible on the 2000 return, even if they weren’t paid before year-end. If you’re perplexed by some tax wrinkle or want an update on lawful tax-avoidance schemes, which of the seven sites is your best bet? Here’s what our CEOs had to say. www.bankrate.com What it’s good for: A well-organized, clearly defined primer. “The entire site has a lot of value,” said one CEO. Bankrate.com contains a Calculations section, which is useful for computing gross profit margins and a variety of business ratios. Don’t waste your time if: You want a hard-core, business-oriented site or you’re a lender or you’re doing tax work for a financial institution. What our CEOs had to say: “It will make my favorites list,” commented one reviewer. A second panelist said, “This site is easy to navigate, easy on the eyes, and gives you a good, brief understanding of each topic.” What you ought to know: The site’s owner is Bankrate Inc. (formerly known as Bank Rate Monitor), based in North Palm Beach, Fla., a longtime publisher of financial information. Bankrate.com’s content now appears in the Money section of Usatoday.com. www.dtonline.com What it’s good for: A guide for personal financial planning. It also contains useful tidbits, including a schedule of gift- and estate-tax rates and a rundown of 10 “essential” practices for growing a company. Don’t waste your time if: You need access to tax schedules or links to other sites. What our CEOs had to say: “One visit was all it took” to sour one CEO on the site because he found it lacked forms that he could download. A fellow panelist, however, said the site was “very informative, especially for small businesses.” What you ought to know: Dtonline.com contains a weekly online missive, “Tax News & Views,” a Deloitte & Touche compilation of the latest tax news from Washington. www.irs.ustreas.gov/bus_info/sm_bus What it’s good for: Comprehensive tax information furnished by the IRS and tailored for small businesses, plus links to other useful tax-related sites, such as www.tax.gov (which covers the tax- and wage-reporting basics). Don’t waste your time if: You seek tax loopholes. What our CEOs had to say: “Excellent tax information for small businesses,” one panelist said. It’s great for “getting a handle on tax issues relating to a start-up,” said another. Still, one CEO disliked the site and said he couldn’t find valuable advice there. What you ought to know: The IRS also offers online sites not specifically devoted to small businesses, including www.irs.ustreas.gov, a guide for filing electronic tax returns. www.smbiz.com What it’s good for: News and tax tips are updated daily. It also has a host of useful links to other sites. Don’t waste your time if: You need answers to specific tax questions. What our CEOs had to say: They agreed that the site is valuable mostly as a “link farm,” in the words of one of them. They generally faulted its design as lacking pizzazz. What you ought to know: The genesis of the site is the Small Business Tax Review, a newsletter published since 1980 by the A/N Group, in Melville, N.Y., a provider of tax news and analyses for small businesses. www.taxcast.com What it’s good for: Tax-law summaries and a trove of tax documents mostly suited to accountants and financial planners. Don’t waste your time if: You want a fast, easy-to-understand tour through the tax landscape. One business owner said the site, though rich in complex information, was “too sterile” and “does not keep my interest.” What our CEOs had to say: They applauded its many links and other resources, but craved a more inviting format. “It’s very vanilla,” said one panelist. What you ought to know: Affiliated sites furnish many kinds of Ernst & Young tax help. One example is www.ey.com, a site well known for financial counseling for individuals and families. www.taxmama.com What it’s good for: A joyful and occasionally informative romp through the tax world for inexperienced businesspeople. This site’s “personal commentary and humor make it unintimidating,” said one CEO. Another recommended it only for tax filers with rudimentary questions. Don’t waste your time if: You’re looking for a highly professional format or need more than a casual presentation of everyday tax issues. What our CEOs had to say: This is a site “more geared toward the consumer than toward businesses,” said one CEO. Another echoed the assessment, saying, “It just doesn’t have the kind of information I need” as a business owner. However, a third CEO said that this is a “great site with good information.” What you ought to know: The site’s founder, Eva Rosenberg, holds the Enrolled Agent credential, which the U.S. Treasury Department issues to qualified accountants. Rosenberg claims to respond to every E-mail query she receives. www.taxprophet.com What it’s good for: Basic facts. The site’s a good do-it-yourself reference for those who are just starting a business and can’t afford an accountant. “If you know what you’re looking for,” one CEO said, “you can do full-text searches of a large tax-law database,” which will give you a heap of hits to sift through. You just need to have the time to do it. Don’t waste your time if: You want quick answers to your questions. What our CEOs had to say: It’s better to leave to an accountant the kind of time-consuming tax research that’s available on the site. “I don’t have the time to just browse,” one CEO said, and “it’s cheaper for me to call my accountant for a quick answer.” But for those with the stomach for truly in-depth tax research or an education in tax law, the site may be useful, according to another reviewer. What you ought to know: In the spirit of fulfilling Robert Sommers’s mission of educating its users about everything to do with taxes, the site posts advisories about tax scams on an online bulletin board. The bottom line For overall tax advice that’s accessible and relevant to small businesses, our CEOs favored the IRS site, Dtonline .com, and Bankrate.com. The reviewers singled out Bankrate.com for its supe- rior ease of navigation, and they appreciated TaxProphet.com’s extensive tax- research database. They lauded Smbiz.com for links to other tax-related sites. The panelists scorned TaxMama.com in many respects yet couldn’t help liking it for its sheer fun. Sara Trainor Callard is a freelance writer based in Quincy, Mass. The savvy entrepreneur’s guide to online tax advice Comments Would CEOs go back? What are the site’s pluses? CEOs’ quick take www.bankrate.com Yes. “The news section, which seems to be updated often.” “This is a worthwhile site to visit.” www.dtonline.com Maybe. “Clear and concise language.” “Very informative.” www.irs.ustreas.gov/ bus_info/sm_bus Maybe. “Quick and easy to explore.” “Would recommend for tax issues relating to start-ups and small businesses.” www.smbiz.com Probably not. “The links.” “Could use a redesign.” www.taxcast.com No. “A comprehensive listing of links.” “It was loaded with information but was a little overwhelming for the tax novice.” www.taxmama.com No. “Good basic information that’s well categorized.” The site can give you the basics for “general tax queries.” www.taxprophet.com Maybe. “Searches of a large tax-law database.” For extensive tax research without a CPA’s services, this is a “good reference.” Grades Ease of navigation Variety User- friendliness Technical reliability Average grade www.bankrate.com A- A- B B B+ www.dtonline.com B B B- A B www.irs.ustreas.gov/ bus_info/sm_bus A- B B A- B+ www.smbiz.com B- B C- A- B- www.taxcast.com B- C B B B- www.taxmama.com C C B C C www.taxprophet.com B- C B- A B- Our panelists John Auger, cofounder, Operations Associates Gary Barras, CEO, Integral Systems Henry L. Foster, CEO, Call Henry Dr. Jim Goodnight, CEO, SAS Kevin J. Goslin, CEO and cofounder, Construction Technology Group Tim Handley, CEO, Advantage Credit International Duncan Harrison, CEO, Alaskan Automotive Distributing Dean Hunt, president, Certified Associates James Matuszewski, CEO, FeelGood for Life George G. Mueller, CEO, Color Kinetics Victor Tsao, CEO, Linksys Ross Youngs, CEO, Univenture Please e-mail your comments to editors@inc.com.