REBELLIS

Harry Potter and The Deathly Hallows : Download pdf

2007-07-22T14:38:00.000+05:30

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2007-04-28T13:16:00.000+05:30

Even as Bollywood heartthrob Hrithik Roshan danced his way to the top of the charts in Bollywood, officials at the income tax department rubbed their hands with glee. At the end of the year, they knew, he’d end up paying an exorbitant amount in taxes. They were right. At Rs 15.10 crore for 2006-’ 07, he emerged as the highest individual tax-payer. The star, sources said, charges in the region of Rs 2.5 crore for featuring in a movie.

SCREEN-SAVERS FOR THE EXCHEQUER?

Taxes paid in 2006-07

1. N Raheja 16.50

2. Hrithik Roshan 15.10

3. Shah Rukh Khan 14.00

4. Zia Mody 6.75

5. Akshay Kumar 6.60

6. Sachin Tendular 5.75

7. M H Mody 5.45

8. Dr S Bhattacharya 4.35

9. Nishit Desai 3.15

10. Kareena Kapoor 2.90

11. John Abraham 1.10

“Some individual tax payers suddenly pay huge taxes due to one-time gains. But it’s mostly film stars and certain professionals who have a track record of consistently paying high taxes,’’ said an I-T official. He was referring to a case in Pune some time ago when an individual surprised the department by paying Rs 6.5 crore in taxes.

But it’s the film industry that takes the cake in filling up government coffers. Shah Rukh Khan has consistently been among the highest tax payers for years and in 2006- ’07, sources said, he paid Rs 14 crore in taxes—almost double what he paid in the previous financial year.

Then there is Akshay Kumar, who paid Rs 6.6 crore for 2006-’ 07 while Kareena Kapoor gave the department Rs 2.9 crore. John Abraham paid a little over Rs 1 crore and yesteryear star Jeetendra ended up paying Rs 1 crore.

As for cricketers, Sachin Tendulkar paid Rs 5.75 crore. Interestingly, none of the top businessmen who snap up billion-dollar companies contribute much in their individual capacity to government coffers. “Generally , businessmen do not pay high taxes as they classify their income as dividend income which is tax-free ,’’ sources said.

Well, atleast this proves that it takes legal brains to shelter your money from the tax-man, hehe!!!

Change the world

2007-04-14T07:26:00.000+05:30

Is good enough enough?

Most marketing efforts are projects in response to problems. "We need a box for the product launch." "We need a press release for the tour the boss is doing." "We need an ad campaign for the Super Bowl." That's the briefing that the bosses-in-power give us.

In response to projects, many organizations figure out the resources they've got and then work hard to do something good enough. On time, within budget. Meeting spec, after all, is your job.

You end up, if you're talented, with something good enough.

Is that enough? Is good enough enough to win? To change the game? To reinvent your organization and your career? In a crowded market, when all the competition is good enough, not much happens.

Good enough is beyond reproach. It's safe at the same time it represents quality. Good enough demonstrates effort and insight and ability. People rarely get fired for good enough, which is a shame.

If you redefined the objective to be, "makes some people uncomfortable, changes the entire competitive landscape and is truly remarkable in that many of the key people we reach feel compelled to talk about it," what would happen?

First, it would require significant risk-taking. Which would include the risk of failure and the risk of getting fired (omg!). Can you and your team handle that? If not, might as well admit it and settle for good enough. But if you're settling, don't sit around wishing for results beyond what you've been getting.

Second, it would mean that every single time you set out to be remarkable, you'd have to raise the bar and start over. It's exhausting.

Third, it means that the boss and the boss's boss are unlikely to give you much cover. Are you okay with that?

I hope so. It's worth it.

Only a few have tapped into their extraordinary abilities. They are the thinkers, the revolutionaries, and the nonconformists who have come and gone before us. These are the men and women who crafted ideas that made every man, woman, and child dream great dreams and believe that mankind is capable of almost anything.

Each one of us is a powerful creation - a source of light, hope, love, and conviction that can contribute beyond anything imaginable.

The question is: Where is that contribution? Who is changing the world today? Why isnt't it you?

Hmm...??

The Entrepreneur's Guide To Web 2.0 : Top 25 Apps To Grow Your Business

2007-04-14T05:58:00.000+05:30

Are you doing a good job meeting the needs of your small business? Keeping a good handle on finances? Networking? Do you have a system for organizing your marketing strategy? Do you even have a marketing strategy?

If you are running a small business, you know that to be successful you need to be a jack-of-all-trades. The smart way to manage everything from company finances, to client relations, to marketing, is to use the right tools – tools that are simple enough that they won’t require you to spend a lot of time and money you don’t have setting them up.

In this guide we cover the 25 best web2.0 applications for entrepreneurs who are looking for simple, cheap, and effective solutions to solving some of the tasks facing their small business or startup. The 25 applications selected were chosen both on the basis of their usefulness for the individual small business manager as well as their effectiveness in providing community support and networking opportunities for users.

Finances, Money Management, Payments

You’re in business to make money. However, if you can’t manage your finances, payments, and assets, you’re going to find that expenses start to creep up, financing runs short, and your ability to plan for the future is nil. Thankfully, the following five apps are designed specifically to help you manage your finances. With these apps, you’ll know where every dime is spent and what you owe at all times, allowing you to start planning your company’s future rather than always trying to play catch up.

Prosper.

Got a business idea but little or no capital? Prosper is a new type of peer lending service which brings individual lenders and small business borrowers together. Each loanee creates a profile, describes what the loan will be used for, and what interest rate they are able to pay. Lenders indicate how much they are offering, at what rates, and who they want to offer sums to. So your loan may come from multiple sources, or a single person. Alternatively, if you already have a group of investors you already know, such as friends and family, Prosper manages the transaction’s lifecycle for you. Regardless of whom you borrow from, Prosper takes a small percentage for managing each loan. For the entrepreneur looking for alternative financing, peer lending can be a great solution. The only downside, however, is that everyone knows your business, literally and figuratively.
Dimewise.

Dimewise lets you record your purchases/expenses and categorizes them. Then, when you’re wondering where the heck last month’s budget went to, you can produce a pretty pie chart showing you exactly what you’re spending your money on. You can also set recurring expenses as well as track balances in one or more accounts, which will make it easier to predict what your future months’ total expenses will be. Of course, you could do much of this with a spreadsheet, but Dimewise lets you do it from anywhere with a web browser, and saves you the time of setting up macros.
NetworthIQ.

NetworthIQ, winner of an SEOmoz web2.0 award, will help you keep track of your company’s finances as well as your personal net worth. It also includes a fun tool that lets you compare your income to other entrepreneurs of the same age or industry, so you can keep track of your company’s success relative to your peers.
Wesabe.

Wesabe goes a step further than both Dimewise and NetworthIQ by integrating its financial organization and planning tools with your bank account. This allows you to complete a monthly accounting report and simultaneously use that report to manage and pay your bills. In addition to this added function, Wesabe also serves as a meeting point for other entrepreneurs to discuss financial advice. While this application won’t be robust enough to meet the needs of larger companies, for small startups Wesabe can serve as a one-stop finance resource.
Instacalc.

Whether you’re rolling in the dough or just squeaking by, every entrepreneur has to crunch the numbers. There’s no easier tool to do long financial equations than instacalc, which will also give you a variety of charting options to display your figures. And if you need to go beyond basic algebra, calcoolate will help you add up all your moola in ways that would make your calculus teacher proud.

Timesheets, Invoicing, Billing

For a small business to succeed, managers need to maximize the amount of time they spend on developing the business, and try to minimize the time they spend on mundane tasks like creating timesheets and invoices. The following three web2.0 apps are all designed to help you cut the time you have to spend on these mundane tasks while simultaneously increasing your company’s accuracy and effectiveness in doing them.

FreshBooks.

FreshBooks is an app designed with the web-based entrepreneur in mind. Not only does the program let you bill clients via email with professional-looking invoices, but clients can also pay you online via PayPal, Authorize.net, and other options through FreshBooks. The wide range of invoicing options is certainly enough for most small business owners, and because the generated billing reports the application generates can handle imported data, FreshBooks will work well with your current billing system.
Harvest.

If after a long work day you often find yourself trying to wonder what exactly you did with all your time, both you and your small business would probably benefit from some time tracking. GetHarvest offers ten reasons why you should use their time tracking solution, including professional quality reports, Internet-based access, daily data backups, and privacy. Perhaps the most important feature is the application’s ability to analyze the hours worked by your entire staff, thus enabling you to identify company-wide inefficiencies.
SidejobTrack.

SidejobTrack is billed as a software tool for the part-time independent contractor. If your startup involves providing services for a number of different clients, this all-in-one finance app is ideal for you. With SidejobTrack you can organize all the various jobs and services you’re performing, send estimates, do invoicing, tax reporting and even manage projects.

Communication and Collaboration

A common ingredient in every small company’s success is teamwork and communication. We’ve got both covered here with five web applications designed for conferencing, voice communication, text chat, team/project management, live customer support, and workspace sharing.

Campfire.

The much celebrated product company 37 Signals has a suite of award-winning tools for collaboration and productivity: Campfire for group chat, Basecamp
for collaboration and project management, and Backpack for organization (calendaring).Among these, the most useful tool for small business owners is Campfire. The application offers password-protected chat rooms to which you can invite clients, vendors, colleagues, and employees. These secured rooms are an excellent place to conduct negotiations that may involve sensitive company data without fear of having that information compromised.
Meebo.

If you’ve used any of the text chat IM clients such as AIM, Yahoo Messenger, Google Talk, or MSN Messenger (aka Windows Live Messenger), you’re aware of one fundamental problem: they don’t play nice together. If you have one contact on one IM and another contact using another service, how do you stay accessible to both of them? You could open a whole group of IM clients and chew up your free RAM memory, or you could use Meebo as a web-based bridge. For online companies where an increasing amount of business is conducted over IM clients, making yourself accessible to everyone through a bridging app like Meebo can mean the difference between success and failure.
Userplane.

Userplane offers a suite of communication and conferencing tools, the most useful of which is called Presence. Presence is the new hot niche tool in telecom, be it over the Internet, cellular networks, or the good old regular telephone system. The technology allows a communication system to “know” where a user is and to reroute calls and messages accordingly to the specific device he is near. For those entrepreneurs who work from home, the office, and the road, this app is really helpful.
ConceptShare.

Of all the above conferencing and collaboration solutions, none of them is suited for creative live interaction, such as having multiple people in different locations designing artwork or editing a document. ConceptShare solves the need for having a way to collaborate on a project in real-time by providing a creative workspace where employees can add to and modify graphic presentations. Changes made on the artwork or web design are even tagged by contributor, so different filtering combinations will allow your team to look at a variety of different filtering options.
Near-time.

Near-time offers collaboration tools including group calendars with event and activity tracking, private shared weblogs, author pages, categories and tagging, and more. Near-time is designed specifically for small businesses, work groups and professionals, which no doubt includes the collaborative entrepreneur.

Organization

As a small business owner you don’t have the luxury of having a personal assistant to keep you organized. But just because you can’t afford to devote hours or dollars to staying on top of things, doesn’t mean that it can’t be done. The following three apps are designed to help you quickly and easily keep track of deadlines and schedule your work week so you can focus on the most important task, building your business.

Google Calendar.

There are numerous web2.0 calendaring applications out there, including CalendarHub, Planzo, and spongecell. But what sets Google Calendar apart from the rest is its ease of setup and use. With Google Calendar you can quickly set up multiple calendars for different projects or clients, as well as link up to public calendars which can help you stay synched with your client’s activities. And for the entrepreneur on the go, Google Calendar even lets you check on your schedule from a mobile phone through SMS messaging.
Remember the milk.

Have you ever tied string around your finger to remind yourself of something but then forgot what it was?Remember the milk can help you and your company remember all of the days important details. The app will let you set and receive reminders via email, SMS and IM. And to minimize the total number of apps you’re running independently on a daily basis, Remember the Milk even works as an add-on to Google Calendar.
Neptune.

Neptune is the ultimate in practical planning. This web2.0 application won a spot on this list primarily because of its ease of use and simplicity. It’s a GTD (get things done) type of to-do list application with multiple project folders and drag and drop task reordering. Neptune also sends you email each day reminding you what your most urgent task for each defined project is. And for those of you daunted by the idea of having to go in and constantly update your to-do list, Neptune will even allow you to set up events and reminders simply by mailing items to your personal inbox.

Networking, Social Spaces

While big companies can afford just wait until contacts come to them, as a small business owner you have to go out and make your own opportunities. That means being proactive about developing relationships with people in your niche and finding new ways to introduce yourself and your company to prospective clients. The two apps in this section are designed to help you to be more effective at professional networking.

LinkedIn.

LinkedIn is the new, hot, de rigueur networking tool for professionals and entrepreneurs. It builds on the concept of six degrees of separation, which says that every human being is connected to every other human being through at most 6 people. Entering into a network means being able to take advantage of business opportunities, asking for, or offering advice, and letting people in your network know about your projects. The best part? You’re connected to everyone that your direct connections are networked with. That means that you can quickly expand your contacts and develop your professional reputation with minimal effort, since you already have something in common with the other person (a common contact).
Ning.

Ning is easily one of the most unique web2.0 application sites out there. Ning takes web2.0 to a whole new level by letting you build your own networking and social space. The plug-n-play social space creator will allow you to create your own community space for other entrepreneurs and potential clients in your niche to communicate and share ideas. With hundreds of pre-fabricated modules no programming is needed to get the space up and running making it just the sort of marketing boost your company needs.

Content Creation, Office and Productivity Tools

No matter the service or product that your startup company sells, you are going to need to maintain accurate records if you want to stay productive and steer clear of legal issues. But since you’re already strapped for time, recordkeeping is often one of the first dropped tasks if a small business doesn’t have a good plan in place to make sure that it gets done. In this section we cover four of the best web-based apps to help you take notes, write documents, preserve records, and create spreadsheets. When used correctly, these tools will minimize the time it takes you to make and keep hard copies, records, and backups so that you will actually follow through and get them done.

Zoho.

Zoho has one of the most well-rounded offerings of web-based tools for the entrepreneur/ business person, including an Office Suite (Writer, Sheet, Show, Wiki, Virtual Office), Productivity Tools (Projects, CRM, Creator, Planner, Chat), Polls, and website monitoring. One of the most useful applications, however, is Zoho Challenge, which lets you test and evaluate job candidates using a combination of multiple choice and descriptive questions. Candidates can then be emailed results for one or more tests. Perhaps the best feature is Zoho Writer, a superb web-based replacement for Microsoft Word. Zoho Writer’s only limitation is its own popularity, which has been known to cause slow server response times. By using a web-based writing program, your employees and clients will be able to access their work at any time without the need for email attachments.
ThinkFree.

ThinkFree calls itself “the best Online Office on earth.” Their suite of apps includes ThinkFree Online, Server, Desktop, and Portable. Of these numerous tools, the two most useful for entrepreneurs are ThinkFree Online, a document management and sharing application, and Desktop, a Microsoft Office compatible word processing, spreadsheet, and presentation tool. Together, these two tools will allow small business owners and their employees to access a project no matter their location.
MyStickies.

Does your business involve online research, but keeping a pad of paper and a pen handy for notes seems arcane to you? Or maybe you’ve made the cost-effective choice to try to make your company paper free. Whatever your reason, MyStickies is one of a number of digital sticky note apps (among others are stikkit, jotcloud, sticky tag, and webnote) available to you to quickly record short notes. In addition to putting post-its on your desktop, MyStickies will also let you put digital stickies on a particular web page so that when you return to the page later on, you won’t need to spend time trying to remember where you were in your research.
EyeOS.

If your company would benefit from having multiple employees having access to the same documents, images, and programs, but they’re spread around the world, a shared online operating system might be the answer. EyeOS, one of the new breed of web-based “operating systems” is one of the best options available. EyeOS is Open Source and can either be downloaded and installed to your own server, or run off their public server. Once EyeOS is setup, anyone with the correct username and password can access the “desktop”, no matter where they are located. That means that if you and your employees are frequently working off the same data or tools, EyeOS may be the ideal application for your company.

Promotion, Marketing, Sales and Support

Fortune 500 companies have entire departments devoted to branding, marketing and supporting their products. For the small business owner, however, you need to replace all those departments and still have time left over to meet the other needs of your company. As the face and driving force behind your startup, it will be largely up to you to get your product in front of new customers, control the way it is perceived in the market, and answer questions from potential clients. The following four Web2.0 apps are all designed to maximize the effectiveness of your time by helping you promote your product and provide customer support.

Veetro.

Veetro is designed to be a one-stop organizational and promotional application for small businesses. It offers a wide range of tools from invoicing and project management to customer support.The most useful aspect of Veetro, however, is its emphasis on client development and sales. With built-in lead tracking, email marketing, customer support and direct advertising functions, Veetro is an excellent tool for small businesses that are making a push to expand their client base or break into a new niche.
eBay.

eBay is the classic early web2.0 application because of it’s pseudo-social network reviewing system. For small businesses trying to generate buzz, selling a few early product examples on eBay is a good way to get your product out early without a lot of overhead cost. In fact, some people legitimately make their living selling products full-time on eBay, though it’s not necessarily as easy as all those $97 e-books would have you believe. But if you’re an entrepreneur with volume purchasing and drop-shipping experience or just looking for some pre-launch exposure, eBay might be perfect for you.
Qoop.

Qoop, there it is. When it comes to promotional/ advertising efforts for your small business, Qoop is an excellent resource as it allows you to create calendars, posters and other “memorabilia” with your company’s logo added. Qoop goes beyond sites like cafepress by taking numerous web2.0 photo sharing sites and networks including photobucket, webshots, and flickr and mashing them up. So if you have, say, a flickr photostream, you can create custom calendars using your images. Qoop has also partnered up with sites like blogprinting and fundprinting to outsource volume printing.
Bonus App: YouTube.

Don’t underestimate the value of YouTube to a business, especially because of its pseudo-social network and category tagging. Real estate agents use YouTube to post video walkthroughs of properties they’ve listed on their website. Other web2.0 applications in alpha and beta stage post screencasts of their “secret” software to create some buzz. The innovative entrepreneur will come up with some way to utilize YouTube or similar sites such as revver to promote their business. If new media advertising doesn’t work for your company, you might want to promote via traditional TV through spotrunner. Spotrunner lets you pick pre-shot footage snippets to mashup, and then finds you budget ad spots with TV stations across the USA.

Being an entrepreneur has always been a high risk/ high reward venture. This year, more than 50% of new startups will close up shop before they reach their first anniversary. And while you cannot control things like market fluctuations, being smart about how you spend your time and energy can dramatically improve your company’s chances of success. This article has introduced you to 25 of the best Web 2.0 applications, all of which are designed to help you organize, control and promote your company, so that by working smarter you can maximize the chances of your startup’s success.

Little Known Ways To Brand On The Cheap: 99 Tips For Poor Web Startups

2007-04-14T05:56:00.000+05:30

“If you build it, they will come.” That might have worked for Kevin Costner in the Field of Dreams, but if you’ve built a good site and are expecting people to just show up, you’ll be waiting a very long time. The days of setting up shop and automatically getting traffic just by being online are over. Today, if you want to have success on the web you need a unique angle and a reputable brand so that visitors have something to remember you by.

Branding distinguishes you from your competition, and having a unique identity is especially important on the Internet, because buying from a competitor’s site instead of yours is just a click away. But despite its importance, surprisingly, most webmasters have either never heard of branding, or just choose to ignore it.

If you have heard of branding, then you’ve probably heard two things: it takes a long time to see results, and it’s expensive. While that is definitely true about traditional branding, Web 2.0 branding is flipping the traditional model on its head. By using offline and online DIY (do it yourself) methods and some guerilla marketing techniques, you can build, announce, and control your brand without having to spend loads of money. The following tips should help you on your way:

Branding in the Blogosphere

Yes, you can use a blog to develop your brand. But there’s a right way and a wrong way.

1. Launch an influential blog to build up your profile.

2. Go niche and dominate. If you’re going to try to leverage a company blog into traffic, links, and reputation development for your primary site, your efforts will be far more successful if you become the authority in a smaller niche, rather than one among many in a broader topic.

3. Don’t waste time reinventing the wheel. Remember that blogging for branding is a tool to get new customers, so it’s only worthwhile if blogging doesn’t take so much time that you can’t concentrate on your central business. So save time by simplifying your blogging by using these 50 blogging resources.

4. Create stars out of your audience. Everyone loves flattery. So if your goal is to develop a reputation as an expert in a particular field, start by doing profiles of the other webmasters and sites in your niche. By giving some positive but fair press to others in your niche, you can quickly develop a reputation as a person in the know. For a couple of good examples, you can check out the BlogNetworkWatch, which covers the blog network industry, and Peter Csathy, CEO of SightSpeed software, and his Digital Media Update. It’s about the industry, not the company.

5. Mix your off-line personality with your online world. Straight-laced professionalism is so passe. Throw some of your personal life/ flair into your blogging to give your site personality and start developing your own brand. But keep in mind that the brand you develop through your blog will carry over to your primary site. So don’t go so informal that you discredit your products or service.

6. Respect yourself, it’s contagious. Treat your work as authoritative if you want others to. That means citing your past articles in your current ones, mentioning work you’ve done on related topics whenever interviewed, etc.

7. Target your audience geographically. Despite the huge numbers that accessing the world community through the internet can bring, targeting your product or service to a particular geography, where applicable, can be a great way to help carve out a particular niche for your blog and brand it as the destination site for people in that region.

8. Concentrate on one domain, not 10. A lot of people think that developing a strong brand means keeping your site extremely narrow in topic scope. As a result, they decide they’ll need 10 sites to cover all their related topics rather than just one. But ‘branding’ means much more than being narrow in focus. So get the full benefit of all your marketing and promotion efforts by focusing on one slightly broader domain rather than breaking your topic into 10 blogs.

9. Host a carnival. Hosting a blog carnival, or to a lesser extent just joining in on one of dozens already in your niche, is a great way to get some exposure and establish your site as a central player in the niche.

10. Guest blog and have others guest author on your site. No one can resist the offer of free quality content. So write other bloggers in your niche and ask to be a guest blogger anytime they go on vacation or just need a couple of days off. In addition, when you have other bloggers write on your blog, they’ll be sure to mention their cameo on their own blog, bringing some new readers to your site.

SEO and Reputation Management

In addition to building your presence on social media sites (next section), there are SEO (Search Engine Optimization) and reputation management tasks you should consistently follow up on to help develop your brand.

11. Choose your company name carefully. Before incorporating, stop by a domain registrar and check that an associated domain name is available. Also ask a wide array of people what the first thing they think of when they hear the name is. Often niche insiders will give a very different answer than people who’ve never heard of your niche before. If you hope to attract both, you will need a name that is attractive to a broad spectrum of users.

12. Secure your brand throughout all top level domains. Your brand should be untouchable, so secure it by purchasing your company domain name across all the major top level domains (TLDs) such as .com, .net, .info, .org, .biz etc. Failing to do so leaves the door open for competitors/ imposters to damage your brand uniformity.

13. Use e-press releases. Press releases are great for branding, as they show up well in search engine searches for your company name. Sometimes even bloggers will republish them, building automatic links to your site. If you’ve never done a press release, consider starting at PR Leap, which receives and publishes online press releases from some 20,000 companies and provides free basic accounts. For a quick primer on press releases, see Taming the Beast. Also read how KFC made their brand visible from space. Some other distribution options are clickpress, prweb, prnewswire, prminds, sourcewire, and marketwire.

14. Clean up your web-history. If you have things in your past that show up bad when someone Googles you, clear those things up (by creating good pages, such as press releases, which then rank). If something is really bad, consider trying to solve the problem with whoever is disgruntled.

15. Interface with bloggers. Communicate with them, nurture them. E.g., Nokia hired a VoIP blogger, Andy Abramson, to manage their successful blogger relations program. By being friends with major bloggers in your industry you can help shape the way your service or product is covered on the web.

16. Avoid placing others’ free articles on your site. Try to avoid using free Adsense-directed ‘niche’ articles written by others and either directly submitted to you or found in article banks. Typically, these are poorly-written pieces written for search engines, not humans. If you have to use free articles instead of writing your own content, be selective.

17. Use article marketing. Write quality articles and give them away at various article directories like EzineArticles. While this can get you some freebie links, your efforts will be even more successful if you can email bloggers directly and ask them to cover the article on their own site.

18. Become part of a community. Find blog, forums and usenet groups and participate. Think long-term when you participate in these communities. That means giving advice that will represent your own expertise and the high standards of your company. Community interaction is extremely powerful, and it can show up in search engines years after the conversation took place. So make sure that whatever you say, it doesn’t represent short-term emotion, but instead stands for long-term quality.

19. Leave valuable comments. Every blogger’s goal is to develop a vibrant community on his blog. So if you leave valuable comments on others’ blogs without overtly marketing your own site or product, you will earn the trust of that blogger as well as some of his/her readers. When you write comments, you should always insert your site’s URL and consider using your site’s name as your username. But beyond that, no extra self-promotion should be done.

20. Use SEM. Craft a quality SEM (Search Engine Marketing) landing page on your site to explain all the wonderful benefits of your product. If you don’t want to shell out the cash for an SEM consultant, at least run your own mini-test, by asking friends and family to create a list of the 10 search terms they would use when searching in your niche. In addition, have each person in your mini survey go to your landing page and write down their activities. You can use this small sample size to predict how your larger audience will behave.

21. Create an affiliate program. See the big picture. Affiliate programs build links for you, expand your presence, and reduce advertising costs. It’s worth giving up a percentage of profits for the ROI later. Consider using intermediates like Clickbank and LinkShare, who bring sellers and affiliates together can help get your affiliate program up and running.

Social Media/ Bookmarking/ Wikis/ E-Profiles

Using Social Media for branding is at the forefront of online branding. There are hundreds of thousands of readers (and webmasters) searching for good content on Bookmarking sites. It’s time to learn how to give bring your content to them.

22. Social Bookmarking–where to start?. Start by building a profile and keeping it active at all the top bookmarking sites. A few sites we recommend are: Del.icio.us, Digg, Netscape, Reddit, and Stumbleupon. Each has a different audience, so some of your content will do better at some sites over others. Because of their differences, it is important to be an active member of all the sites and submit your content at all of them.

23. Play nice: Don’t abuse social bookmarking sites. Don’t submit (seed) every single page on your site. Be selective and only submit your best blog posts or website articles. The social bookmarking sites are getting better at weeding out users who are just self-promoters, so make sure that along with your own submissions, you mix in a healthy share of random articles.

24. Make your social bookmarking username your site URL. If your domain is mywidgets.com, use “mywidgets” as your username when you sign up at social bookmarking/ e-profile sites. Branding is all about incremental gains in visibility and trust. While your username alone won’t add tons of either visibility and trust, it can help incrementally as part of an overall branding plan.

25. Make lots of social bookmarking friends. Each site supports this differently, but under almost every site ‘friends’ is just a proxy for people that will vote for your submissions if you reciprocate. So make sure you vote for most (not all) of your friends submissions, if you want them to help vote your articles to the front page.

26. E-profiles: manage your reputation. If a potential customer types in your name into a search engine, what sort of results will they see in the top 10? It’s key for you to secure the top 10 results in Google, Yahoo and MSN for searches relating directly and indirectly (if possible) to your brand. You need to be the one defining what people see when they search for you, not your competition. Start by building e-profiles on authority domains such as MySpace, Squidoo, AboutUs, WordPress, Blogger/ Blogspot, MSN Spaces, TypePad, Newsvine, LinkedIn, Rollyo, Wikipedia, etc. Don’t let someone else define who you are.

Additional Linkbuilding

Branding and building links back to your site go hand in hand. Here are some tips that focus on how to develop and control your brand through linkbuilding.

27. Submit to select directories. Get listed on the best directories and authority sites in your niche. Some suggestions are; Aviva Directory, Yahoo!, DMOZ, BOTW, GoGuides, Sevenseek, v7n Directory and Skaffe.

28. Get listed on local authority websites. Many cities will have a large, centrally operated online business directory. A link from a local government site (.gov) will boost your visibility and build your search engine rankings. Often that requires no more effort than doing a GoogleSearch for “(your city) business directory” and emailing the webmaster.

29. Use sitemaps. Google, Yahoo, and Microsoft recently agreed to follow one standard sitemap format. A well-built sitemap can help your site get indexed regularly and fully, but its primary purpose is to give users an easy way to find a particular piece of content. Remember: by catering to your visitors, you not only create a site brand associated with quality and ease of use for those same visitors, you also increase the possibility that your regular readers will help spread your brand by dropping links to you on their own sites.

30. Be a link leaker. Give lots of link love to everyone in your niche. A lot of new bloggers think that they shouldn’t link out because it waters down their PageRank. That is completely wrong. Link out to everyone, including your competition, and as those webmasters you linked to check their referral pages, you can watch as the links come pouring in.

31. Linkbait. Write fun or helpful “top 10″ (or top 99) types of lists - they always work. Make sure that they are easy to read (i.e., each bullet point is brief). Have someone seed the article on one of the social networking sites and hope for the best.

32. Ping blog directories. Most top weblog platforms support pinging to blog directories. Use Pingomatic, Pingoat, Technorati, etc., when you update your blog. Pinging means that the search engine spidey’s will crawl your site quicker and more completely in the future.

33. Use Feedburner. Using Feedburner will allow you to control your brand’s name in the Feedburner URL. And having above the fold feeds available encourage webmasters and experienced web surfers (the people most likely to use feeds) to keep coming back and dropping you links every time you update.

Usability, Accessibility and Design

Your website is your online calling card. Make it usable and accessible by following these steps:

34. Get a unique logo. Your logo is your brand. It should be simple, straightforward, even obvious if you hope it will be remembered. You can get a graphics design student from your local college (just email a professor in the department’it works, we promise) to draw up a top notch logo for under $100. When it comes to a logo design, don’t trust your own judgment. Have a few sketches drawn up and ask people of all different sorts what the first 3 words that come to mind when they see the logo are: if its not your niche, and something like “quality” then try a different logo.

35. Create a tagline. A tagline is central to any brand. But if you don’t want to shell out big $$$ for a marketing company to develop a tagline for you (and who does?), then come up with some options yourself (shorter is better) and do a mini-survey among friends to see which tagline conjures up the brand image you are trying to create.

36. Design with a focus on MDA. Design your blog with a focus on visitor experience that leads the user to your MDA (Most Desired Action). Test various designs before launch by asking friends and family to go to the site and see where they click and when.

37. Define a distinct layout. As an online retailer/marketer you have the built-in disadvantage of a lack of trust from customers. You can help overcome that inherent bias by creating a site layout that creates the impression of organization, ease of use, and trust. Designing Website Usability by Jakob Nielsen should be at the top of your reading list.

38. Use whitespace liberally. There is nothing like a busy confused design to destroy a brand. Keep your design minimal and your logo prominent. Don’t feel the need to fill in every square inch with another advertisement. Less is almost always more.

39. Design for scanners, not readers. I know, you’ve put a lot of time into your content, so you want people to read every little word. But the truth is, people online are scanners, not readers. So if you want to get your message across, you need to tell them your unique selling points in a bullet list or in short crisp sentences.

40. Learn from the best. Compare yourself to established leaders such as Apple, Amazon and Google. How does your site’s user experience compare with those top sites?

41. Contact information. Offer a clear, concise and easy to find contact page, with relevant info, including a Skype username. Provide a toll free number and/or “click to call me” buttons for Skype or SightSpeed. People want to feel like there is a person behind the web page. By providing them with easy contact information, you go a long way to establishing your brand’s credibility.

42. URL structure. Brand with your page URL structure. That does not mean stuffing your URL with all related keywords, but it does mean letting people know what your site is about through the URL. (NOT: www.submit-site-directory-webdirectory-linkbuilding.com. YES: www.AvivaDirectory.com).

43. Page titles. Don’t underestimate the power of the humble little HTML tag to promote your brand in web pages. A good page title will expose searchers to your brand and help search engines to know what your site is all about.

44. Navigation. A clear navigational structure will help develop your brand authority. When people know how to easily navigate a site they feel more comfortable with the site’s legitimacy and trustworthiness.

45. Check your content for typos. What you say on your website speaks volumes for your brand and your company. If you can’t spend the time to eliminate typo’s, why should your customers think that you will spend the time to get their orders correct and send them out on time.

46. Remove inaccurate content. If you no longer offer a product or service, remove its pages and use a 301 redirect to the homepage. Nothing says spam site like having content that is clearly outdated or having links that don’t work.

47. Use consistent style. Use consistent grammar, linking style, etc. Expert Said Rouhani refers to this as “repetition” in his article How to Brand your Website. But whatever you call it, the basic point is that consistency in web design = trust. And trust = a strong brand and more regular visitors.

48. Be specific. Don’t try to be everything under the sun to every type of user. If your site sells blue widgets, you might get away with selling red widgets too. But if you try to start selling something completely different in addition to widgets, you won’t get nearly enough new visitors to offset the visitors you’ll lose by watering down your brand.

49. Get a website facelift. Give your ‘About Us’ and ‘Contact Us’ pages a freshening. Bryan Eisenberg of the ClickZ Network has several suggestions for both of these largely forgotten foot soldiers in the war for internet visitors’ hearts and minds.

50. Block out spam. Use a comment-spam filter to present a more professional blog. But be aware that whatever filter you use, you will still need to make a weekly manual check for spam comments a filter isn’t going to pick up.

51. Compatibility. Your website should be accessible through every web browser. By having parts of your website inaccessible to particular browsers, you necessarily cut out a significant portion of your potential audience. Being compatible isn’t hard, but its surprising how many major sites simply don’t do it.

52. Use valid code. Make the site meet 508 accessibility standards Designing a 508 compliant site doesn’t require a whole lot of extra work, and it can bring you more traffic in two ways. The first is that visitors with impairments are underserved on the net, so if your site is compliant it may be the only one in its niche, and as a result you will by default become the authority for those people. Second, a compliant site will typically be crawled better, because taking basic steps to make your site handicapped accessible, such as including image text for screen readers, also means more text that search engines can actually use as opposed to most graphics.

53. Be proactive: clean up problems before they happen. Remember, you are building your brand for humans and search engines. Your site needs to be solid and fast. So make sure you haven’t accidentally blocked spiders from indexing your pages with your robots.txt, rewrite dynamic URLs to appear static with a .htaccess file, and create a canonical domain name with a 301 redirect. You can also use your robots.txt and .htaccess files to block bad robots from spidering your site, stealing your text and damaging your brand.

54. Use Stock Photos. Make your website look as professional as the big guns’ sites for much less by incorporating stock photos into your site. A silent revolution is currently going on in digital photography, the rise of stock photos now allows people on a limited budget to produce site designs as good as those operating on a much higher budget. Big Stock Photo and iStockphoto are two good sources for stock images.

55. If you need design help, look in all the right places. If you can’t do a good job on the design work yourself, consider hiring an art student. Excellent work can still be had for peanuts. If going the student route isn’t to your liking, take a look at the deviantART website’s designs and interfaces section for some DIY help. And if you do want to hire a professional, you can check out the contact information on that site or try Rentacoder to get bids.

56. Have a web feed. Web-savvy readers are increasingly subscribing to web feeds of their favorite sites. Because developing a trusted brand for your own site depends on getting links, you need to cater to your web-savvy readers, who are the most likely to be webmasters themselves. So make sure to offer a wide array of web feed buttons above the fold on your site.

Personal Communication

Word of mouth has always been infinitely more powerful than any marketing campaign. Here’s how to extend this old school viral branding technique online.

57. Use email sigs. Put your site URL in your email signature, especially if you’re using a freebie account. It will help give your site credibility if your emails look professional and you may pick up a unique visitor once in a while. As a side note, a freebie account is usually associated with crummy companies, simply because your customers reason that you’re only using the freebie because you’re too lazy or broke to setup something more personalized. Nonetheless, if you prefer the freebie accounts, or are just looking for the lazy way out, at least throw in an email signature to give yourself some credibility.

58. Brand your free email accounts. Sign up for free email accounts (Hotmail, Google Mail, Yahoo Mail) using your company name as your user name. That way you there won’t be any dupe email accounts available when your evil competitor or phisher starts to try to impersonate you.

59. Network. Attending local conferences in your niche is a great way to meet people. If there isn’t a conference for people in your niche, consider hosting a meet-and-greet at a local restaurant to accomplish the same thing.

60. Can I give you my card?. Always carry business cards with a visual of the product or your tagline on the back of the card. To save money you can print business cards out on your own printer using card stock. Better yet, get Moo’s Skype cards for a fun and different way to stand out.

61. Mix work and pleasure. Host an alternative after-party to an industry convention. If the group is small enough you can host it in your home or hotel room. Otherwise just have people come to a local bar. You can usually make a deal with the local bar to give everyone a deal on their drinks just for agreeing to throw the party at their bar. That way, it doesn’t cost you a dime but you still look like a hero.

62. Give thanks. Send hand-written thank you notes to your most important customers. If you don’t want to deal with the post office, at least send personal emails. Individualized contact to customers is a great way to establish your brand as the destination site for those repeat customers by letting them know how much they are valued.

63. Support your customers even after the sale. Support post-sale questions for your product or service. The cost is a few minutes of your time, but the benefits are long-lasting customer loyalty and word-of-mouth goodwill.

64. Solicit repeat business. It’s easier to get repeat business than new business. So if you’ve only got enough time/cash to run one advertising campaign, you may want to spend that energy on your repeat buyers. Your marketing efforts to repeat customers don’t have to be expensive or time-consuming. As Chris Philippi mentions in Five Ways to Get Repeat Business, a simple “Thank you” can go a long way.

Going Viral to Develop Your Brand

Viral is in, it’s fun, and requires just a bit of thought.

65. Develop a viral link building strategy. Link building and brand building are inextricably linked. The best way to build links is with a viral strategy whereby sites link to you because of a unique service, an extensive and original article or an interesting product. You can use social networks like Digg, del.icio.us, Fark and Magnolia to get the word out quickly.

66. Go viral with a video. Make and post an interesting/ fun video (or series) on YouTube. Just make sure it’s relevant to your business. Maybe you’ve got your own addition to the Apple vs PC series of TV commercials. Whatever you create, spend a little time and effort to make it good, as a video that goes viral can bring tens of thousands of new readers to your site.

67. Use your webcam. A variation on viral videos: use your webcam to run a small competition. Make your webcam publicly available, then hold up a code or phrase that participants must send in to you. The first person in wins.

68. Go viral, part 2: create valuable e-books. Give them away; white papers are so passe. For ideas on how to create your e-book, check out Copyblogger and Seth Godin. A good ebook will keep bringing in new readers and links for months, and it will help establish your brand as an authority site in your niche.

69. Go viral, part 3: buttons. Create some utility or service on your site for free, then create a graphic buttons that websites can display, linked to your service. Consider Dane Carlson’s Business Opportunities Weblog, which hosts the famed How Much Is My Blog Worth? code.

70. Go viral, part 4: free templates. If you have a flair for design, and know your way around a stylesheet, consider creating free templates for Wordpress, MySpace, eBay listings and the like. Why free? By giving them away, each marked with your brand (name, logo and link), you will soon find them all over the internet… and so will everyone else. If you want to get really creative, create free templates specifically designed for competitors’ sites in your particular niche. For example, if you’re an online directory, create Online Directory Templates. That way you can ensure that in addition to picking up some unique incoming links from other people using your template, you’re also creating a strong web footprint within your niche so that the search engines will better recognize you as an authority.

71. Create controversy. If you have the stomach for it, be controversial and create buzz. Just remember, whatever controversy you create will reflect on your site and your brand. So in some instances going too far in creating controversy can backfire. Just walk the line and be careful.

More Unconventional Ideas - Online

You don’t have to go viral to utilize unconventional ideas online. Here are few unconventional ideas that if executed well can yield big results.

72. Hold a contest to develop an opt-in mailing list. Give something away in exchange for building a contestant email list. Artists can raffle off illustrations or paintings, booksellers and writers can offer free copies, et cetera. A opt-in subscription list of email recipients is flat-out invaluable.

73. Free swag for reviews. Nokia loaned out some of their N-series phones to bloggers to try out and review, regardless of their feelings. Try something similar, including a free download for otherwise paid software.

74. Getting reviewed without giving stuff away. The good folks at ReviewMe.com have made it easy to get blogger reviewers of your products. But if you want a freebie review you can simply email other bloggers in your niche and ask them to review your service. By letting other bloggers know that you respect their opinion and are seriously looking for feedback, many bloggers will feel flattered and respond. You will be surprised at how much good feedback and free publicity you get.

75. Buy some good keyword text. Text-Link-Ads is a great way to build reputation through branded anchor links. But you can do the same thing yourself (often for much less) by emailing bloggers in your niche and asking if they’d be willing to take some cash in exchange for a text link.

76. Build a funny 404 page. At the time of writing, according to Technorati, the 404 Research Lab had 226 blogs linking to it - quite an achievement for a single 404 page.

77. Do something outrageous. Or at very least unusual, and document the action itself and reactions others had to it. Randy’s Affiliate Marketing Programs Blog discusses a few of the more famous outrageous branding ideas, from Alex Tew’s Million Dollar Homepage (the original dollar-a-pixel site) to John Freyer’s All My Life for Sale (a wildly-successful eBay project).

78. Do something outrageous, part 2. Duplicate marketing zen master Kyle MacDonald’s One Red Paperclip experiment. Kyle is the genius, unintentional or not, who managed a series of trades to turn a single red paper clip into his own home. Now, he owns a house and he’s using all the publicity and web traffic to sell “one red paper clip” gear on his site. And all from a free-hosted Blogspot.com blog. True genius.

79. Do something outrageous, part 3. Announce that you are offering a new service which is either so underpriced or so overpriced that it causes everyone in your niche to wake up and pay attention (and give you some free press). Just be careful that you can meet demand if the price is too low (and offer it for a limited time only).

80. Head over to the Bestest Blog of All Time. Exchange links, or spend a buck or two to become a ‘Premium Blog.’ The site’s ‘Random Blog’ button will teleport visitors to your site, but in addition you’ll pick up a good backlink. The site also awards a daily accolade — the Bestest Blog of the Day — which typically generates respectable traffic numbers to winners’ sites.

Unconventional Ideas - Offline

And of course, you don’t have to be online to use marketing and branding techniques.

Promote Offline

BOTW

82. T-shirts. Shoemoney gives away t-shirts emblazoned with his name/ logo and URL. It’s worthwhile for Shoemoney because he knows that the cost of producing the T-shirt is a whole lot less than the amount he will make back in free offline branding. And if you want to combine two forms of promotion in one, you can hold a contest to design a promotional t-shirt , then give the winning shirt away. That way you get the net buzz of a contest, you don’t have to design the shirt yourself, AND you get free offline advertising by having people wear a shirt with your site on it.

83. Stickers. Everyone loves stickers. Slap’em on your car and give them away to friends.

84. Flyers. Print out a small-sized promotional flyer, and then leave copies in trendy local stores, bars and restaurants. But ask first.

85. Bookmarks. Print up some bookmarks (you remember those pieces of card stock used to keep your page in a book) and set up a stack at local coffee houses, bookstores, libraries, and any other place that your audience is likely to be.

86. Sponsor a local sports team. Why not sponsor a softball team, bowling league or other sporting event. Sponsoring = a lot of eyeballs and surprisingly it doesn’t cost a whole a lot. Often just $100 will get you listed as the sponsor of a team or event.

87. Payoff a DJ. Approach a DJ with a bit of a following to mix a track with your site name worked in. (Yeah, we know it’s an unconventional idea, that’s the point).

88. Pull off a publicity stunt. Want to get free coverage in the press, online and off? Pull off a publicity stunt. Come up with an original idea and inform the press that something special will be going down. If you’ve whetted their appetite, the press and public will turn up and bring your message to thousands of new people.

89. Be visible at local festivals. Get your name about by participating in local festivals where you will have ample opportunity to network, hand out promotional material and even sell your services / product. Just make sure that the event is the type that your service and site want to be associated before jumping in on each and every festival that comes to your city.

90. Give away a free branded product. Just like Shoemoney’s free t-shirt giveaways, why not give away a free sample of your product? This can be extremely successful, just make sure you have enough stock available in case demand skyrockets. This is ideal for conferences and festivals where the audience has self-selected to be more likely to be interested in your product or service.

91. Guerilla marketing. Head down to your local library and hunt down books relevant to your topic. Then insert your business card or flyer into the book at the very front. This guerilla marketing can work on an individual level, but the benefits can multiply dramatically if your persistent activity starts to create buzz.

92. Guerilla marketing, part 2. Change the homepage on publicly available computers. Changing the homepage of local libraries and internet cafes will bring in some new visitors, but more importantly it will create buzz.

93. Go real-world alternate advertising. Pay people to advertise your logo on their forehead, tattoo it (non-permanent), or trim it into their hair. One guy went to the extreme of hiring homeless people to carry ads for his website. (We don’t like the idea of exploiting the homeless, so we’re not giving a link).

94. Be a star. Call up your local public cable access channel and ask to be interviewed. They are desperate for content and may go for it.

95. Talk the good talk. Give a speech or volunteer for a career day at a high school.

96. Sponsor a highway. At the least, an adopt-a-highway sponsorship will build goodwill. But it also gives you a tax-deductible form of advertising. Gotta love those tax loopholes!

97. Make’em laugh. Hire a local comedian/ comedienne to do a schtick (with your logo and URL prominently displayed, say on a t-shirt) for a Youtube video. A service like GIGMasters or Entertainment Unlimited may be a good place to look for someone, but you might also luck out and save a lot of money by hanging around the stage doors of local comedy clubs and making a face-to-face deal.

98. Get physical (templates redux). Templates needn’t be digital. Mirkwood Designs, for instance, has made several box, envelope and card templates available for anyone to freely download. Ms Zaroff accepts donations for her templates, but her company also receives recognition through her customers and other webmasters providing free links: This is what happens when you type ‘Mirkwood Designs’ into Google.

99. Join up with your local Chamber of Commerce. Almost every city has it’s own Chamber of Commerce (and website), which you should join and become and active member of. Once a member, ask them to list your business on their website. The link won’t bring in much traffic, but it will give you a good quality back link, and for those customers looking to verify your legitimacy, a link from your local Chamber will go a long way.

Resources + References

The following sites are great resources for tips on successful blogging, promotion, improving your website’s rank, branding, reputation control, and more. Obviously, we can’t list everyone, but here are a few starters, in alphabetical order.

Marketing

1. (About) Marketing.

2. (About) Retail.

3. MarketingProfs.

4. MarketingSherpa.

5. MarketingStudies.

6. OneDegree.

7. SethGodin.

Professional + Business Blogging

1. BlogWriteForCEOs.

2. CopyBlogger.

3. Problogger.

4. Successful-Blog.

2. SEO Book

3. SEOPedia.

4. Wolf-Howl

21 Surefire Tips For A Successful Blog Launch

2007-04-14T05:52:00.000+05:30

Witnessing the launch of a blog as successful as Performancing’s first two weeks might lead you to think that launching a successful blog is easy… well, it’s NOT. Thousands of new blogs are launched every day, but only a handful ever get read by more than a few hundred people, and even fewer ever make a dollar’s profit. While a site can survive a terrible launch (see Instablogs’ surprising turnaround) the cost is high, and the truth is, most never recover. With no money coming in, and a readership which can be counted in the dozens, it’s no wonder that the vast majority of bloggers give up and shut down their site within a year.

The 21 points included in this checklist will cover the basics of what you need to do during those all-important first two weeks of your blog’s life. While there are no guarantees in the blogosphere, if you follow these launching tips closely, your chances of success are greatly improved.

The First Impression

1. Connect with your readers through an about page and welcome message. One of the best ways to make a lasting impact is to connect on a personal level with your readers. That means letting them know who you are and what your background is. Darren from ProBlogger does this well by including an image of his ugly mug and an ‘about page’ link above the fold. You don’t necessarily need an author pic to relate to your readers, but you should find some way to allow readers to connect with you on a personal as well as a professional level to develop some rapport.

2. Don’t get seen naked: Never launch a blog with fewer than 5 posts. In the blogosphere you typically get just one shot at impressing a visitor or fellow blogger. Too many new bloggers throw up two posts and then start working on promotion. In the world of blogging, you are selling yourself and your writing. If you can’t give people a fully dressed picture of what your blog is all about and what type of writing will be on it, then why should they throw a link your way, or subscribe to your RSS feed? When someone links to you or subscribes they’re giving a vote of confidence that your site is worthwhile, so give them something to grab on to, and let them know your space won’t be “just another abandoned blog.”

RSS & Subscriptions

3. Make sure a link to your RSS feed is available above the fold. Though they won’t help your AdSense revenues much, subscribers are the lifeblood of any successful blog. These devotees are often the ones providing you with regular comments, and are far more likely to be webmasters themselves (meaning more links). It should be obvious to anyone launching a blog, but its amazing how many new bloggers do not make a link to their RSS feed readily available. New bloggers often don’t want to devote space on their site to an RSS feed when they could squeeze in a bit more AdSense. While this thinking is understandable, it is simply wrong. The returns of having subscribers are much more valuable because subscribers drive long-term traffic organically, while an additional AdSense block provides at best a marginal short-term gain.

4. Make RSS easier still: Add subscribe links to the most popular newsreaders. Again: we want to make it easy for people to subscribe. No one reads RSS raw. Provide readers with above the fold access to some of the most popular newsreaders such as Bloglines, MyYahoo!, Google Reader, and MyMSN.

5. Offer an email version of your RSS feed. According to Copyblogger, offering an email version of your RSS feed can as much as double your subscribers. We have already covered the reasons why subscribers are essential to a healthy blog (links, comments, buzz). Feedblitz offers this service for free, as does Feedburner. But beyond simply offering the email RSS feed, you need to make sure that signing up for it is easy. A study by Marketing Experiments reveals that reducing the steps to signing up for both your RSS feed and your email subscription will increase signups by over 700%. That means more than 7x the number of repeat readers and over 7x the benefits that subscribers provide to your blog.

Social Bookmarking (aka Going Viral)

6. Put chicklets in your template. Chicklets are ugly, and having too many “If you liked this story, submit it to Delicious” lines in a post looks plain spammy. That said, when you have a top-notch post that you hope is going to go viral, there is no better way to boost your votes than to add the Delicious link and Digg button right onto the post. When used correctly, chicklets can get you the coveted ‘double vote’ (when visitors who came to your post via Delicious, for example, then drop you a Digg vote once they are on the site). When you consider the tens of thousands of visitors that visit a good linkbait, those ‘double votes’ can be enough to carry you to the popular page of a second site, just by leveraging the traffic of the first.

7. Be your own promoter: Seed your best posts. Hundreds of thousands of content hungry readers are using social bookmarking sites every day, and many track specific keywords. By seeding your best articles, and by using a mixture of both popular and specific keywords as tags, you can bring a new crop of readers to your site on a weekly basis. The best way to select the tags for your article is to think of social bookmarking sites as a form of search engine. By including both broad keywords and narrower keywords you are certain to get a blend of both low quality/high volume readers (AdSense baby!) and high quality/low volume readers (links). The following is a list of the top 10 bookmarking sites which you should submit your top articles to:

Digg: Mammoth traffic; tech-focused; savvy users
Delicious: Pretty big traffic; somewhat tech/design-focused; a lot of bloggers browse Delicious for “things to link to”
Netscape: Pretty big traffic; a mix of topics; less savvy users
Stumbleupon: Medium traffic; weird stuff/literary articles; normal users.
Yahoo MyWeb: Medium traffic; general interest; normal users
Reddit: Lower traffic; politics/random stuff; normal users.
Furl: Lower traffic; tech-focused/some random stuff; normal users
Newsvine: Lower traffic; politics and news; normal users.
Lookmarks: Low traffic; gets spammed a lot; less savvy users
Blinklist: Low traffic; gets spammed a lot; less savvy users

Getting networked

8. Leave highly valuable comments on other blogs in your niche. Every niche within the blogosphere is made up of a few tightly knit communities. Like all communities, so much of what is actually going on (passing links, giving tips, etc.) is all done behind the scenes through email and IM. As a result, getting integrated into some of the communities in your niche is essential to growing your blog. New bloggers often try to integrate themselves through email solicitations, “Hi my name is Newbie, will you be my friend?…” This rarely works. You need to first make a name for yourself and make yourself valuable to the community. One way is to start commenting on the sites of community members within your niche. By being an initiator of, or contributor to, good conversations on other blogs, other webmasters will come to recognize your name. Note: This takes a bit of finesse, so don’t go around dropping your blog’s URL in the comments themselves. Rather, just type your URL in the URL field and let your ideas speak for the quality of your writing and your site.

9. Reload quickly: Take advantage of your initial launch buzz. A successful blog launch will give you two or three days of buzz (yes, that’s all you’ll get in the blogosphere). During that window, other bloggers in your niche will be checking out your site. Take advantage of those extra visitors by putting up some top-notch content within the first couple of days and updating your site frequently. Many webmasters will stop by during the first week to check out the ‘new kid on the block,’ so make sure they see you at your best. Launch buzz is a unique opportunity to gain easy links with no real extra marketing work, and it will not happen a second time. So don’t waste the opportunity by putting up garbage or sporadic content during your first week.

10. Include tons of outbound links in your posts. As a new blogger, your target audience is other bloggers. They have the links that you need to get to the top of the search engines and to get in front of other readers. So a big key is getting other bloggers in your niche to notice you. A good trick is to use website referrals to your advantage. Almost every blogger checks their site referrals list on a daily or weekly basis (which tells them the last page a visitor was on before they landed on their site). They use this list both to track new links and to see who is talking about their site. By putting a lot of outbound links in your posts to other blogs in your niche, you can start to raise your profile. When your readers click on those links your site will appear in the referrals list of the bloggers you link to. This is free marketing for you. When other bloggers see your site in their referrals list they will often visit your site and are also much more likely to return a link to you.

11. If you have something to give, give it away! Give people a reason to visit your site which goes beyond the typical content. If you’re a designer, give away a free HTML design or Wordpress skin. Are you a programmer? Make a cool FireFox plugin. Are you an expert at XX? Give away a free 8-page report, in PDF style, called “Secrets of XX Revealed”. The point is, by giving away something, even something small, you can create buzz.

12. Start real relationships with bloggers in your niche. One of the biggest misconceptions new bloggers have is that because you are online, somehow the way business is conducted has changed. It hasn’t. Just as in the offline business world, much of what is really going on in the blogging world takes place between colleagues. That means that the most helpful tips, links, assistance, and so on are given on the basis of a preexisting friendship or relationship between you and another blogger. So after spending some time getting a lay of the land within your blogging niche, send a few relevant emails out to other bloggers within your community. Let them know that you are an avid reader of their site (and actually be one), and then ask advice, suggest something, etc. The key is to: 1) Not ask for a link, and 2) Have something interesting to say. Networking (which is just a fancy way of saying making friends) is maybe the single most important difference between an average and a successful blog. So do it.

Link Building

13. Submit your blog to blog directories. Incoming links help your site to get spidered, indexed and ranked better by search engines. Conveniently, there are many blog directories that specialize in categorizing and linking to quality blogs. You can find a comprehensive list of them at the RSSTop55.

14. Submit your blog to general web directories such as DMOZ and Aviva. Links from DMOZ (The Open Directory), Yahoo! Directory, Aviva Directory and other quality general web directories provide you with what are considered “trusted links” by the search engines, a key to ranking well. Search engines value links from quality web directories because it means that your site has been checked and selected by a human being. But not all web directories are equal, and you want to be careful when submitting your site to not just throw good money after bad links. Another nice thing about the top web directories is that they will send you relevant traffic, just like a search engine.

15. Leave your blog’s URL as your signature when you participate in forums. When you make a good comment on a forum, people will not only remember your URL and begin to associate it with quality information, but also a number of forum readers looking for more information will click the link and visit your site.

16. Use your URL in your email signature. If you’re like most new webmasters, you will be writing hundreds of emails in your first few months of blogging. You can easily and subtly convert these emails into marketing efforts for your blog by simply including your URL below your name in your signature line. The setup takes only a minute, and once it’s done you won’t ever have to think about it again.

17. Myspace or Facebook members: Put a link in your profile. Putting a link in your Myspace or Facebook account is a nearly effortless way to market your site. Again, the response won’t be hundreds of new readers, but picking up a few dozen new readers here and there (even just your friends) never hurts. Also, consider sending out a bulletin (bulk mail) announcing the blog to all of your Myspace and Facebook friends. Even if just a couple of your friends drop you a free link on their own pages or blogs, it’s worth the two minutes it takes.

18. Submit guest posts at other blogs. Few experienced bloggers can resist the appeal of good free content. But most new bloggers simply don’t take advantage of this, because the first few weeks after the launch of their blog are so hectic that they don’t have time to write additional posts for someone else’s blog. With a little planning, however, you can overcome the time crunch and pick up some great links. Save up a half dozen good posts before you launch, and submit them to related blogs as a way to introduce yourself and your blog to their audience. (It’s usually better to only do this when the blogger is actively seeking submissions; you probably shouldn’t submit posts unasked-for.) Of course, link back to your own blog in the “author’s bio” at the bottom of the post. It’s not good form to submit the same article to multiple sites, so don’t cut corners here; instead create a good unique post for each submission you make.

Finishing touches

19. Ask friends for feedback on your site. Ask some of your webmaster friends to review/critique your site a few days before its official launch. The blogging world is largely comprised people who consider themselves somewhat entrepreneurial, and as a result, bloggers tend to respect (and want to help) people who are out there trying to start up their own site. By asking other bloggers to give you feedback, you put them in the role of expert and create in them a sense of ownership in your site (which means they will be more likely to give you a hand when you need it). Not surprisingly, this technique usually does provide some valuable feedback from people who have experience, if not expertise, in running a blog. But in addition, by putting your peers in the position of expert, you dramatically increase the chance that they will follow your launch and drop you a link once you get off the ground.

20. Go ‘Real-World’ with other bloggers. If you live in a major city (or visit one occasionally), invite other bloggers to join you for a drink or dinner. While friendships can be developed in cyberspace, the most fruitful business relationships, even in the world of blogging, tend to flourish only after face-to-face interaction. It doesn’t have to be anything fancy, just send a few individualized emails to some specific bloggers in your city asking them to meet up. You can frame it as an opportunity to learn from their wisdom (bloggers love to consider themselves experts), or simply a meeting of the minds. Either way, having a relationship bolstered by face-to-face contact can provide countless benefits over one maintained entirely online.

21. Dress up your comments. Even if you don’t have any readers, you can be assured that comment spammers will find you. Comment spammers are the guys dropping off-topic advertisements for Viagra and weight loss pills in the comments of your blog. Nothing kills the ability of a blog to attract new links like a spammy site. And nothing says ’spammy site’ like a comments page full of irrelevant comments and links. So monitor and delete spammy comments on a regular basis. In addition to deleting the garbage comments, you need to foster a positive community. People want to participate in and link to a vibrant site. So create one by encouraging your friends to comment on your blog. The key is that you want to create the impression of an energetic and participatory group of readers. Nobody wants to be the first guy to comment on a post, but everyone wants to chime in on a hot debate.

The bottom line: if you follow the preceding tips, you’re not guaranteed to have a successful blog, but you are guaranteed to have a strong launch, and a fighting chance to make it big in the blogosphere.

Murthy as President : Kalam says 'fantastic'

2007-04-13T18:55:00.001+05:30

MYSORE: President APJ Abdul Kalam on Sunday said it would be "fantastic" if software industry icon N R Narayana Murthy succeeded him.

"Fantastic, fantastic, fantastic," Kalam said when asked if he wanted the Infosys chief mentor to become President.

"I will say fantastic," Kalam remarked at an interactive session at the Infosys Global Education Centre here in response to the question: "Do you want Murthy to become President?"

Speaking to reporters who asked him about the President's remarks, Murthy said it would be "wonderful" if Kalam, who has "bonded" with the youth, who are the nation's future, continued for another term.

Asked if he was open to the idea of becoming President, Murthy said, "It is all hypothetical. Right now, we have had Kalam visit us. I don't think this is the right time to discuss it. It would be wonderful if he continues for another term."

In reply to a question on whether he was open to the presidentship in future, Murthy said, "What will happen in future, nobody can say. When we have a wonderful President who has bonded with the youth who are the nation's future, my sentiment is: I wish he continues."

Commenting on Kalam's remarks, he said: "He has always been very kind to me. I have known him even before he became the President. Right from day one, he has been kind to me and my wife. I am grateful to him for his kind words."

Asked if any political party had approached him on the issue, Murthy said, "No. Not at all."

How To Build A Great Company

2007-04-13T18:53:00.000+05:30

N R Narayana Murthy, Chairman of the Board and Chief Mentor, Infosys Technologies, outlines the key ingredients to building a great company and the role of 'compassionate capitalism' in society.

Narayana Murthy is a co-chair of the Annual Meeting of the World Economic Forum at Davos, Switzerland. Excerpts from an interview with the Infosys Chairman:

You are fond of using the term 'compassionate capitalism.' What does this mean in the context of India?

As I look back on the idealism of my youth, I realise that a socialist system will not succeed as a system, because people need opportunities, incentives and competition in order to better themselves. This is the essence of capitalism.

Embellish the spirit of capitalism with fairness, decency, transparency and honesty, and the result is compassionate capitalism.

Compassionate capitalism is extremely important for every society, in general, and for developing countries, in particular.

In India, where the divide between the haves and have-nots is very large, the only way we can reduce this divide is by embracing compassionate capitalism.

To what do you attribute the success of Asia's multinationals?

The first factor is the work ethic. By and large, there is tremendous focus on hard work, pride in the company, and loyalty to the company in Asia. This focus exists in the West too, and that's how they have built great companies.

However, I see less emphasis in the West on such a work ethic these days.

Second, there is a spirit of family in Asian companies. This means working as a team, showing concern for your fellow employees, making sacrifices for each other's benefit, and identifying with the common cause of the company.

How has Infosys responded to the tsunami that struck South-East Asia?

Infosys has contributed Rs 50 million to the Prime Minister's Fund. In addition, we requested employees to contribute a day's salary on a voluntary basis. We did something similar after 9/11.

We were the first Indian company and one of the few in the world outside the United States to contribute to the Firemen's Fund.

The Infosys Foundation has donated clothing, medicine and food items to the victims of the tsunami. Some of our people have gone to affected areas and helped people to improve processes for better management of aid distribution.

Some companies sell to the bottom of the economic pyramid, to customers with relatively little spending power. What is the business case for multinational companies to target this market?

About 80 per cent of the global population lives in the developing world. These people have low disposable income. Thus, taken as individuals, their buying strength is small but, as a group, they have an enormous potential as a market.

On the other hand, the markets in the developed world are getting saturated and growth is coming down. Hence, if multinational companies were to design products that are inexpensive and cater to this vast segment of low-disposable income consumers, then there is tremendous growth opportunity both in revenues and profits for MNCs.

Business can address social challenges through public-private partnerships. Again, what is the incentive for companies to partner with the public sector?

Public-private partnerships in developing countries like India are very important because a company cannot prosper on a sustainable basis, unless it makes a difference to the context in which it operates.

By making a difference to the society in which they operate, companies create goodwill in the society, and become friends of the society.

This responsibility is even greater in the case of multinationals, since there is a mistaken belief that multinationals do not care for the context, and are there only to plunder the society where they operate.

When the vast majority of the poor believe that there is a positive impact on them because of a public-private partnership involving multinationals, it is likely to create tremendous goodwill towards these companies.

What is the key to building a great company?

First of all, we need good leadership. I don't know of a single great company that has not had good leaders. Great leaders raise the aspirations of their followers; they make people more confident, energetic and enthusiastic.

Such leaders make people embrace the adage: a plausible impossibility is better than a convincing possibility.

People, who are motivated by great leaders, dream big, make sacrifices and achieve miracles. It is not sufficient just to have great leaders. We need a mechanism to identify, train, empower and mentor successive generations of leaders.

Such leadership training and mentoring has to become the responsibility of the current generation of leaders.

Second, we have to create a grand, noble vision which elevates the energy, enthusiasm and self-esteem of everyone in the company while ensuring that everybody sees a benefit in following the vision.

Third, a company has to benchmark itself on a global scale in every area including sales, production, human resources, R&D and finance. It creates an open and confident environment where first-raters recruit first-raters.

Fourth, a great company continuously measures and improves the following attributes: meritocracy, fairness, justice, openness, speed, imagination and excellence in execution.

Finally, a great company practices an enduring value system, and follows the finest system of corporate governance.

Reproduced with permission from the World Economic Forum. Rediff.com is the WEF's online media partner.

NRN says sorry, was 'quoted out of context'

2007-04-13T18:50:00.000+05:30

Chief mentor of Infosys N R Narayana Murthy has apologised to those who may have been hurt by his comments on the instrumental version of the National Anthem played during President APJ Abdul Kalam's visit to Infy's Mysore facility on Sunday.

Clarifying his stand on the issue, he said: "We played the ins t rumental version of the National Anthem so that we could all sing along, and all of us did so. We wished to share the pride of being an Indian in the presence of our President. We are informed that this is as per protocol. If the media s t a t e m e n t has hurt anybody's sentiments, I deeply apologise."

On Sunday, the media questioned Murthy on the choice of an instrumental version. Some reports quoted him saying: "We had arranged for five people to sing the Anthem. But then we cancelled it as we have foreigners on board here. They should not be embarrassed while we sing the Anthem."

This statement upset a section of people, some of whom have been expressing their dismay on blogs. According to Infosys, the context of the statement was not adequately dealt with in the reports.

The feeling internally, it said, was that foreigners would be more comfortable with the instrumental version, as they would then have an opportunity to hum along as others sang the Anthem.

Murthy said on Tuesday: "We have always kept the interest of India foremost in our minds, and our work speaks for itself.

We are a proud Indian company, with strong universal ethos of transparency, accountability and honesty. It has always been our endeavour to represent India with the highest standards of respect and enable it to take its rightful place in the world economy."

How To Start A Startup

2007-04-01T15:46:00.000+05:30

- An Excerpt From Hackers & Painters

If you wanted to get rich, how would you do it? I think your best bet would be to start or join a startup. That's been a reliable way to get rich for hundreds of years. The word "startup" dates from the 1960s, but what happens in one is very similar to the venture-backed trading voyages of the Middle Ages.

Startups usually involve technology, so much so that the phrase "high-tech startup" is almost redundant. A startup is a small company that takes on a hard technical problem.

Lots of people get rich knowing nothing more than that. You don't have to know physics to be a good pitcher. But I think it could give you an edge to understand the underlying principles. Why do startups have to be small? Will a startup inevitably stop being a startup as it grows larger? And why do they so often work on developing new technology? Why are there so many startups selling new drugs or computer software, and none selling corn oil or laundry detergent?

The Proposition

Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four. This pays especially well in technology, where you earn a premium for working fast.

Here is a brief sketch of the economic proposition. If you're a good hacker in your mid twenties, you can get a job paying about $80,000 per year. So on average such a hacker must be able to do at least $80,000 worth of work per year for the company just to break even. You could probably work twice as many hours as a corporate employee, and if you focus you can probably get three times as much done in an hour. [1] You should get another multiple of two, at least, by eliminating the drag of the pointy-haired middle manager who would be your boss in a big company. Then there is one more multiple: how much smarter are you than your job description expects you to be? Suppose another multiple of three. Combine all these multipliers, and I'm claiming you could be 36 times more productive than you're expected to be in a random corporate job. [2] If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year.

Like all back-of-the-envelope calculations, this one has a lot of wiggle room. I wouldn't try to defend the actual numbers. But I stand by the structure of the calculation. I'm not claiming the multiplier is precisely 36, but it is certainly more than 10, and probably rarely as high as 100.

If $3 million a year seems high, remember that we're talking about the limit case: the case where you not only have zero leisure time but indeed work so hard that you endanger your health.

Startups are not magic. They don't change the laws of wealth creation. They just represent a point at the far end of the curve. There is a conservation law at work here: if you want to make a million dollars, you have to endure a million dollars' worth of pain. For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary. Imagine the stress of working for the Post Office for fifty years. In a startup you compress all this stress into three or four years. You do tend to get a certain bulk discount if you buy the economy-size pain, but you can't evade the fundamental conservation law. If starting a startup were easy, everyone would do it.

Millions, not Billions

If $3 million a year seems high to some people, it will seem low to others. Three million? How do I get to be a billionaire, like Bill Gates?

So let's get Bill Gates out of the way right now. It's not a good idea to use famous rich people as examples, because the press only write about the very richest, and these tend to be outliers. Bill Gates is a smart, determined, and hardworking man, but you need more than that to make as much money as he has. You also need to be very lucky.

There is a large random factor in the success of any company. So the guys you end up reading about in the papers are the ones who are very smart, totally dedicated, and win the lottery. Certainly Bill is smart and dedicated, but Microsoft also happens to have been the beneficiary of one of the most spectacular blunders in the history of business: the licensing deal for DOS. No doubt Bill did everything he could to steer IBM into making that blunder, and he has done an excellent job of exploiting it, but if there had been one person with a brain on IBM's side, Microsoft's future would have been very different. Microsoft at that stage had little leverage over IBM. They were effectively a component supplier. If IBM had required an exclusive license, as they should have, Microsoft would still have signed the deal. It would still have meant a lot of money for them, and IBM could easily have gotten an operating system elsewhere.

Instead IBM ended up using all its power in the market to give Microsoft control of the PC standard. From that point, all Microsoft had to do was execute. They never had to bet the company on a bold decision. All they had to do was play hardball with licensees and copy more innovative products reasonably promptly.

If IBM hadn't made this mistake, Microsoft would still have been a successful company, but it could not have grown so big so fast. Bill Gates would be rich, but he'd be somewhere near the bottom of the Forbes 400 with the other guys his age.

There are a lot of ways to get rich, and this essay is about only one of them. This essay is about how to make money by creating wealth and getting paid for it. There are plenty of other ways to get money, including chance, speculation, marriage, inheritance, theft, extortion, fraud, monopoly, graft, lobbying, counterfeiting, and prospecting. Most of the greatest fortunes have probably involved several of these.

The advantage of creating wealth, as a way to get rich, is not just that it's more legitimate (many of the other methods are now illegal) but that it's more straightforward. You just have to do something people want.

Money Is Not Wealth

If you want to create wealth, it will help to understand what it is. Wealth is not the same thing as money. [3] Wealth is as old as human history. Far older, in fact; ants have wealth. Money is a comparatively recent invention.

Wealth is the fundamental thing. Wealth is stuff we want: food, clothes, houses, cars, gadgets, travel to interesting places, and so on. You can have wealth without having money. If you had a magic machine that could on command make you a car or cook you dinner or do your laundry, or do anything else you wanted, you wouldn't need money. Whereas if you were in the middle of Antarctica, where there is nothing to buy, it wouldn't matter how much money you had.

Wealth is what you want, not money. But if wealth is the important thing, why does everyone talk about making money? It is a kind of shorthand: money is a way of moving wealth, and in practice they are usually interchangeable. But they are not the same thing, and unless you plan to get rich by counterfeiting, talking about making money can make it harder to understand how to make money.

Money is a side effect of specialization. In a specialized society, most of the things you need, you can't make for yourself. If you want a potato or a pencil or a place to live, you have to get it from someone else.

How do you get the person who grows the potatoes to give you some? By giving him something he wants in return. But you can't get very far by trading things directly with the people who need them. If you make violins, and none of the local farmers wants one, how will you eat?

The solution societies find, as they get more specialized, is to make the trade into a two-step process. Instead of trading violins directly for potatoes, you trade violins for, say, silver, which you can then trade again for anything else you need. The intermediate stuff-- the medium of exchange-- can be anything that's rare and portable. Historically metals have been the most common, but recently we've been using a medium of exchange, called the dollar, that doesn't physically exist. It works as a medium of exchange, however, because its rarity is guaranteed by the U.S. Government.

The advantage of a medium of exchange is that it makes trade work. The disadvantage is that it tends to obscure what trade really means. People think that what a business does is make money. But money is just the intermediate stage-- just a shorthand-- for whatever people want. What most businesses really do is make wealth. They do something people want. [4]

The Pie Fallacy

A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world. There is, in any normal family, a fixed amount of money at any moment. But that's not the same thing.

When wealth is talked about in this context, it is often described as a pie. "You can't make the pie larger," say politicians. When you're talking about the amount of money in one family's bank account, or the amount available to a government from one year's tax revenue, this is true. If one person gets more, someone else has to get less.

I can remember believing, as a child, that if a few rich people had all the money, it left less for everyone else. Many people seem to continue to believe something like this well into adulthood. This fallacy is usually there in the background when you hear someone talking about how x percent of the population have y percent of the wealth. If you plan to start a startup, then whether you realize it or not, you're planning to disprove the Pie Fallacy.

What leads people astray here is the abstraction of money. Money is not wealth. It's just something we use to move wealth around. So although there may be, in certain specific moments (like your family, this month) a fixed amount of money available to trade with other people for things you want, there is not a fixed amount of wealth in the world. You can make more wealth. Wealth has been getting created and destroyed (but on balance, created) for all of human history.

Suppose you own a beat-up old car. Instead of sitting on your butt next summer, you could spend the time restoring your car to pristine condition. In doing so you create wealth. The world is-- and you specifically are-- one pristine old car the richer. And not just in some metaphorical way. If you sell your car, you'll get more for it.

In restoring your old car you have made yourself richer. You haven't made anyone else poorer. So there is obviously not a fixed pie. And in fact, when you look at it this way, you wonder why anyone would think there was. [5]

Kids know, without knowing they know, that they can create wealth. If you need to give someone a present and don't have any money, you make one. But kids are so bad at making things that they consider home-made presents to be a distinct, inferior, sort of thing to store-bought ones-- a mere expression of the proverbial thought that counts. And indeed, the lumpy ashtrays we made for our parents did not have much of a resale market.

Craftsmen

The people most likely to grasp that wealth can be created are the ones who are good at making things, the craftsmen. Their hand-made objects become store-bought ones. But with the rise of industrialization there are fewer and fewer craftsmen. One of the biggest remaining groups is computer programmers.

A programmer can sit down in front of a computer and create wealth. A good piece of software is, in itself, a valuable thing. There is no manufacturing to confuse the issue. Those characters you type are a complete, finished product. If someone sat down and wrote a web browser that didn't suck (a fine idea, by the way), the world would be that much richer. [5b]

Everyone in a company works together to create wealth, in the sense of making more things people want. Many of the employees (e.g. the people in the mailroom or the personnel department) work at one remove from the actual making of stuff. Not the programmers. They literally think the product, one line at a time. And so it's clearer to programmers that wealth is something that's made, rather than being distributed, like slices of a pie, by some imaginary Daddy.

It's also obvious to programmers that there are huge variations in the rate at which wealth is created. At Viaweb we had one programmer who was a sort of monster of productivity. I remember watching what he did one long day and estimating that he had added several hundred thousand dollars to the market value of the company. A great programmer, on a roll, could create a million dollars worth of wealth in a couple weeks. A mediocre programmer over the same period will generate zero or even negative wealth (e.g. by introducing bugs).

This is why so many of the best programmers are libertarians. In our world, you sink or swim, and there are no excuses. When those far removed from the creation of wealth-- undergraduates, reporters, politicians-- hear that the richest 5% of the people have half the total wealth, they tend to think injustice! An experienced programmer would be more likely to think is that all? The top 5% of programmers probably write 99% of the good software.

Wealth can be created without being sold. Scientists, till recently at least, effectively donated the wealth they created. We are all richer for knowing about penicillin, because we're less likely to die from infections. Wealth is whatever people want, and not dying is certainly something we want. Hackers often donate their work by writing open source software that anyone can use for free. I am much the richer for the operating system FreeBSD, which I'm running on the computer I'm using now, and so is Yahoo, which runs it on all their servers.

What a Job Is

In industrialized countries, people belong to one institution or another at least until their twenties. After all those years you get used to the idea of belonging to a group of people who all get up in the morning, go to some set of buildings, and do things that they do not, ordinarily, enjoy doing. Belonging to such a group becomes part of your identity: name, age, role, institution. If you have to introduce yourself, or someone else describes you, it will be as something like, John Smith, age 10, a student at such and such elementary school, or John Smith, age 20, a student at such and such college.

When John Smith finishes school he is expected to get a job. And what getting a job seems to mean is joining another institution. Superficially it's a lot like college. You pick the companies you want to work for and apply to join them. If one likes you, you become a member of this new group. You get up in the morning and go to a new set of buildings, and do things that you do not, ordinarily, enjoy doing. There are a few differences: life is not as much fun, and you get paid, instead of paying, as you did in college. But the similarities feel greater than the differences. John Smith is now John Smith, 22, a software developer at such and such corporation.

In fact John Smith's life has changed more than he realizes. Socially, a company looks much like college, but the deeper you go into the underlying reality, the more different it gets.

What a company does, and has to do if it wants to continue to exist, is earn money. And the way most companies make money is by creating wealth. Companies can be so specialized that this similarity is concealed, but it is not only manufacturing companies that create wealth. A big component of wealth is location. Remember that magic machine that could make you cars and cook you dinner and so on? It would not be so useful if it delivered your dinner to a random location in central Asia. If wealth means what people want, companies that move things also create wealth. Ditto for many other kinds of companies that don't make anything physical. Nearly all companies exist to do something people want.

And that's what you do, as well, when you go to work for a company. But here there is another layer that tends to obscure the underlying reality. In a company, the work you do is averaged together with a lot of other people's. You may not even be aware you're doing something people want. Your contribution may be indirect. But the company as a whole must be giving people something they want, or they won't make any money. And if they are paying you x dollars a year, then on average you must be contributing at least x dollars a year worth of work, or the company will be spending more than it makes, and will go out of business.

Someone graduating from college thinks, and is told, that he needs to get a job, as if the important thing were becoming a member of an institution. A more direct way to put it would be: you need to start doing something people want. You don't need to join a company to do that. All a company is is a group of people working together to do something people want. It's doing something people want that matters, not joining the group. [6]

For most people the best plan probably is to go to work for some existing company. But it is a good idea to understand what's happening when you do this. A job means doing something people want, averaged together with everyone else in that company.

Working Harder

That averaging gets to be a problem. I think the single biggest problem afflicting large companies is the difficulty of assigning a value to each person's work. For the most part they punt. In a big company you get paid a fairly predictable salary for working fairly hard. You're expected not to be obviously incompetent or lazy, but you're not expected to devote your whole life to your work.

It turns out, though, that there are economies of scale in how much of your life you devote to your work. In the right kind of business, someone who really devoted himself to work could generate ten or even a hundred times as much wealth as an average employee. A programmer, for example, instead of chugging along maintaining and updating an existing piece of software, could write a whole new piece of software, and with it create a new source of revenue.

Companies are not set up to reward people who want to do this. You can't go to your boss and say, I'd like to start working ten times as hard, so will you please pay me ten times as much? For one thing, the official fiction is that you are already working as hard as you can. But a more serious problem is that the company has no way of measuring the value of your work.

Salesmen are an exception. It's easy to measure how much revenue they generate, and they're usually paid a percentage of it. If a salesman wants to work harder, he can just start doing it, and he will automatically get paid proportionally more.

There is one other job besides sales where big companies can hire first-rate people: in the top management jobs. And for the same reason: their performance can be measured. The top managers are held responsible for the performance of the entire company. Because an ordinary employee's performance can't usually be measured, he is not expected to do more than put in a solid effort. Whereas top management, like salespeople, have to actually come up with the numbers. The CEO of a company that tanks cannot plead that he put in a solid effort. If the company does badly, he's done badly.

A company that could pay all its employees so straightforwardly would be enormously successful. Many employees would work harder if they could get paid for it. More importantly, such a company would attract people who wanted to work especially hard. It would crush its competitors.

Unfortunately, companies can't pay everyone like salesmen. Salesmen work alone. Most employees' work is tangled together. Suppose a company makes some kind of consumer gadget. The engineers build a reliable gadget with all kinds of new features; the industrial designers design a beautiful case for it; and then the marketing people convince everyone that it's something they've got to have. How do you know how much of the gadget's sales are due to each group's efforts? Or, for that matter, how much is due to the creators of past gadgets that gave the company a reputation for quality? There's no way to untangle all their contributions. Even if you could read the minds of the consumers, you'd find these factors were all blurred together.

If you want to go faster, it's a problem to have your work tangled together with a large number of other people's. In a large group, your performance is not separately measurable-- and the rest of the group slows you down.

Measurement and Leverage

To get rich you need to get yourself in a situation with two things, measurement and leverage. You need to be in a position where your performance can be measured, or there is no way to get paid more by doing more. And you have to have leverage, in the sense that the decisions you make have a big effect.

Measurement alone is not enough. An example of a job with measurement but not leverage is doing piecework in a sweatshop. Your performance is measured and you get paid accordingly, but you have no scope for decisions. The only decision you get to make is how fast you work, and that can probably only increase your earnings by a factor of two or three.

An example of a job with both measurement and leverage would be lead actor in a movie. Your performance can be measured in the gross of the movie. And you have leverage in the sense that your performance can make or break it.

CEOs also have both measurement and leverage. They're measured, in that the performance of the company is their performance. And they have leverage in that their decisions set the whole company moving in one direction or another.

I think everyone who gets rich by their own efforts will be found to be in a situation with measurement and leverage. Everyone I can think of does: CEOs, movie stars, hedge fund managers, professional athletes. A good hint to the presence of leverage is the possibility of failure. Upside must be balanced by downside, so if there is big potential for gain there must also be a terrifying possibility of loss. CEOs, stars, fund managers, and athletes all live with the sword hanging over their heads; the moment they start to suck, they're out. If you're in a job that feels safe, you are not going to get rich, because if there is no danger there is almost certainly no leverage.

But you don't have to become a CEO or a movie star to be in a situation with measurement and leverage. All you need to do is be part of a small group working on a hard problem.

Smallness = Measurement

If you can't measure the value of the work done by individual employees, you can get close. You can measure the value of the work done by small groups.

One level at which you can accurately measure the revenue generated by employees is at the level of the whole company. When the company is small, you are thereby fairly close to measuring the contributions of individual employees. A viable startup might only have ten employees, which puts you within a factor of ten of measuring individual effort.

Starting or joining a startup is thus as close as most people can get to saying to one's boss, I want to work ten times as hard, so please pay me ten times as much. There are two differences: you're not saying it to your boss, but directly to the customers (for whom your boss is only a proxy after all), and you're not doing it individually, but along with a small group of other ambitious people.

It will, ordinarily, be a group. Except in a few unusual kinds of work, like acting or writing books, you can't be a company of one person. And the people you work with had better be good, because it's their work that yours is going to be averaged with.

A big company is like a giant galley driven by a thousand rowers. Two things keep the speed of the galley down. One is that individual rowers don't see any result from working harder. The other is that, in a group of a thousand people, the average rower is likely to be pretty average.

If you took ten people at random out of the big galley and put them in a boat by themselves, they could probably go faster. They would have both carrot and stick to motivate them. An energetic rower would be encouraged by the thought that he could have a visible effect on the speed of the boat. And if someone was lazy, the others would be more likely to notice and complain.

But the real advantage of the ten-man boat shows when you take the ten best rowers out of the big galley and put them in a boat together. They will have all the extra motivation that comes from being in a small group. But more importantly, by selecting that small a group you can get the best rowers. Each one will be in the top 1%. It's a much better deal for them to average their work together with a small group of their peers than to average it with everyone.

That's the real point of startups. Ideally, you are getting together with a group of other people who also want to work a lot harder, and get paid a lot more, than they would in a big company. And because startups tend to get founded by self-selecting groups of ambitious people who already know one another (at least by reputation), the level of measurement is more precise than you get from smallness alone. A startup is not merely ten people, but ten people like you.

Steve Jobs once said that the success or failure of a startup depends on the first ten employees. I agree. If anything, it's more like the first five. Being small is not, in itself, what makes startups kick butt, but rather that small groups can be select. You don't want small in the sense of a village, but small in the sense of an all-star team.

The larger a group, the closer its average member will be to the average for the population as a whole. So all other things being equal, a very able person in a big company is probably getting a bad deal, because his performance is dragged down by the overall lower performance of the others. Of course, all other things often are not equal: the able person may not care about money, or may prefer the stability of a large company. But a very able person who does care about money will ordinarily do better to go off and work with a small group of peers.

Technology = Leverage

Startups offer anyone a way to be in a situation with measurement and leverage. They allow measurement because they're small, and they offer leverage because they make money by inventing new technology.

What is technology? It's technique. It's the way we all do things. And when you discover a new way to do things, its value is multiplied by all the people who use it. It is the proverbial fishing rod, rather than the fish. That's the difference between a startup and a restaurant or a barber shop. You fry eggs or cut hair one customer at a time. Whereas if you solve a technical problem that a lot of people care about, you help everyone who uses your solution. That's leverage.

If you look at history, it seems that most people who got rich by creating wealth did it by developing new technology. You just can't fry eggs or cut hair fast enough. What made the Florentines rich in 1200 was the discovery of new techniques for making the high-tech product of the time, fine woven cloth. What made the Dutch rich in 1600 was the discovery of shipbuilding and navigation techniques that enabled them to dominate the seas of the Far East.

Fortunately there is a natural fit between smallness and solving hard problems. The leading edge of technology moves fast. Technology that's valuable today could be worthless in a couple years. Small companies are more at home in this world, because they don't have layers of bureaucracy to slow them down. Also, technical advances tend to come from unorthodox approaches, and small companies are less constrained by convention.

Big companies can develop technology. They just can't do it quickly. Their size makes them slow and prevents them from rewarding employees for the extraordinary effort required. So in practice big companies only get to develop technology in fields where large capital requirements prevent startups from competing with them, like microprocessors, power plants, or passenger aircraft. And even in those fields they depend heavily on startups for components and ideas.

It's obvious that biotech or software startups exist to solve hard technical problems, but I think it will also be found to be true in businesses that don't seem to be about technology. McDonald's, for example, grew big by designing a system, the McDonald's franchise, that could then be reproduced at will all over the face of the earth. A McDonald's franchise is controlled by rules so precise that it is practically a piece of software. Write once, run everywhere. Ditto for Wal-Mart. Sam Walton got rich not by being a retailer, but by designing a new kind of store.

Use difficulty as a guide not just in selecting the overall aim of your company, but also at decision points along the way. At Viaweb one of our rules of thumb was run upstairs. Suppose you are a little, nimble guy being chased by a big, fat, bully. You open a door and find yourself in a staircase. Do you go up or down? I say up. The bully can probably run downstairs as fast as you can. Going upstairs his bulk will be more of a disadvantage. Running upstairs is hard for you but even harder for him.

What this meant in practice was that we deliberately sought hard problems. If there were two features we could add to our software, both equally valuable in proportion to their difficulty, we'd always take the harder one. Not just because it was more valuable, but because it was harder. We delighted in forcing bigger, slower competitors to follow us over difficult ground. Like guerillas, startups prefer the difficult terrain of the mountains, where the troops of the central government can't follow. I can remember times when we were just exhausted after wrestling all day with some horrible technical problem. And I'd be delighted, because something that was hard for us would be impossible for our competitors.

This is not just a good way to run a startup. It's what a startup is. Venture capitalists know about this and have a phrase for it: barriers to entry. If you go to a VC with a new idea and ask him to invest in it, one of the first things he'll ask is, how hard would this be for someone else to develop? That is, how much difficult ground have you put between yourself and potential pursuers? [7] And you had better have a convincing explanation of why your technology would be hard to duplicate. Otherwise as soon as some big company becomes aware of it, they'll make their own, and with their brand name, capital, and distribution clout, they'll take away your market overnight. You'd be like guerillas caught in the open field by regular army forces.

One way to put up barriers to entry is through patents. But patents may not provide much protection. Competitors commonly find ways to work around a patent. And if they can't, they may simply violate it and invite you to sue them. A big company is not afraid to be sued; it's an everyday thing for them. They'll make sure that suing them is expensive and takes a long time. Ever heard of Philo Farnsworth? He invented television. The reason you've never heard of him is that his company was not the one to make money from it. [8] The company that did was RCA, and Farnsworth's reward for his efforts was a decade of patent litigation.

Here, as so often, the best defense is a good offense. If you can develop technology that's simply too hard for competitors to duplicate, you don't need to rely on other defenses. Start by picking a hard problem, and then at every decision point, take the harder choice. [9]

The Catch(es)

If it were simply a matter of working harder than an ordinary employee and getting paid proportionately, it would obviously be a good deal to start a startup. Up to a point it would be more fun. I don't think many people like the slow pace of big companies, the interminable meetings, the water-cooler conversations, the clueless middle managers, and so on.

Unfortunately there are a couple catches. One is that you can't choose the point on the curve that you want to inhabit. You can't decide, for example, that you'd like to work just two or three times as hard, and get paid that much more. When you're running a startup, your competitors decide how hard you work. And they pretty much all make the same decision: as hard as you possibly can.

The other catch is that the payoff is only on average proportionate to your productivity. There is, as I said before, a large random multiplier in the success of any company. So in practice the deal is not that you're 30 times as productive and get paid 30 times as much. It is that you're 30 times as productive, and get paid between zero and a thousand times as much. If the mean is 30x, the median is probably zero. Most startups tank, and not just the dogfood portals we all heard about during the Internet Bubble. It's common for a startup to be developing a genuinely good product, take slightly too long to do it, run out of money, and have to shut down.

A startup is like a mosquito. A bear can absorb a hit and a crab is armored against one, but a mosquito is designed for one thing: to score. No energy is wasted on defense. The defense of mosquitos, as a species, is that there are a lot of them, but this is little consolation to the individual mosquito.

Startups, like mosquitos, tend to be an all-or-nothing proposition. And you don't generally know which of the two you're going to get till the last minute. Viaweb came close to tanking several times. Our trajectory was like a sine wave. Fortunately we got bought at the top of the cycle, but it was damned close. While we were visiting Yahoo in California to talk about selling the company to them, we had to borrow a conference room to reassure an investor who was about to back out of a new round of funding that we needed to stay alive.

The all-or-nothing aspect of startups was not something we wanted. Viaweb's hackers were all extremely risk-averse. If there had been some way just to work super hard and get paid for it, without having a lottery mixed in, we would have been delighted. We would have much preferred a 100% chance of $1 million to a 20% chance of $10 million, even though theoretically the second is worth twice as much. Unfortunately, there is not currently any space in the business world where you can get the first deal.

The closest you can get is by selling your startup in the early stages, giving up upside (and risk) for a smaller but guaranteed payoff. We had a chance to do this, and stupidly, as we then thought, let it slip by. After that we became comically eager to sell. For the next year or so, if anyone expressed the slightest curiousity about Viaweb we would try to sell them the company. But there were no takers, so we had to keep going.

It would have been a bargain to buy us at an early stage, but companies doing acquisitions are not looking for bargains. A company big enough to acquire startups will be big enough to be fairly conservative, and within the company the people in charge of acquisitions will be among the more conservative, because they are likely to be business school types who joined the company late. They would rather overpay for a safe choice. So it is easier to sell an established startup, even at a large premium, than an early-stage one.

Get Users

I think it's a good idea to get bought, if you can. Running a business is different from growing one. It is just as well to let a big company take over once you reach cruising altitude. It's also financially wiser, because selling allows you to diversify. What would you think of a financial advisor who put all his client's assets into one volatile stock?

How do you get bought? Mostly by doing the same things you'd do if you didn't intend to sell the company. Being profitable, for example. But getting bought is also an art in its own right, and one that we spent a lot of time trying to master.

Potential buyers will always delay if they can. The hard part about getting bought is getting them to act. For most people, the most powerful motivator is not the hope of gain, but the fear of loss. For potential acquirers, the most powerful motivator is the prospect that one of their competitors will buy you. This, as we found, causes CEOs to take red-eyes. The second biggest is the worry that, if they don't buy you now, you'll continue to grow rapidly and will cost more to acquire later, or even become a competitor.

In both cases, what it all comes down to is users. You'd think that a company about to buy you would do a lot of research and decide for themselves how valuable your technology was. Not at all. What they go by is the number of users you have.

In effect, acquirers assume the customers know who has the best technology. And this is not as stupid as it sounds. Users are the only real proof that you've created wealth. Wealth is what people want, and if people aren't using your software, maybe it's not just because you're bad at marketing. Maybe it's because you haven't made what they want.

Venture capitalists have a list of danger signs to watch out for. Near the top is the company run by techno-weenies who are obsessed with solving interesting technical problems, instead of making users happy. In a startup, you're not just trying to solve problems. You're trying to solve problems that users care about.

So I think you should make users the test, just as acquirers do. Treat a startup as an optimization problem in which performance is measured by number of users. As anyone who has tried to optimize software knows, the key is measurement. When you try to guess where your program is slow, and what would make it faster, you almost always guess wrong.

Number of users may not be the perfect test, but it will be very close. It's what acquirers care about. It's what revenues depend on. It's what makes competitors unhappy. It's what impresses reporters, and potential new users. Certainly it's a better test than your a priori notions of what problems are important to solve, no matter how technically adept you are.

Among other things, treating a startup as an optimization problem will help you avoid another pitfall that VCs worry about, and rightly-- taking a long time to develop a product. Now we can recognize this as something hackers already know to avoid: premature optimization. Get a version 1.0 out there as soon as you can. Until you have some users to measure, you're optimizing based on guesses.

The ball you need to keep your eye on here is the underlying principle that wealth is what people want. If you plan to get rich by creating wealth, you have to know what people want. So few businesses really pay attention to making customers happy. How often do you walk into a store, or call a company on the phone, with a feeling of dread in the back of your mind? When you hear "your call is important to us, please stay on the line," do you think, oh good, now everything will be all right?

A restaurant can afford to serve the occasional burnt dinner. But in technology, you cook one thing and that's what everyone eats. So any difference between what people want and what you deliver is multiplied. You please or annoy customers wholesale. The closer you can get to what they want, the more wealth you generate.

Wealth and Power

Making wealth is not the only way to get rich. For most of human history it has not even been the most common. Until a few centuries ago, the main sources of wealth were mines, slaves and serfs, land, and cattle, and the only ways to acquire these rapidly were by inheritance, marriage, conquest, or confiscation. Naturally wealth had a bad reputation.

Two things changed. The first was the rule of law. For most of the world's history, if you did somehow accumulate a fortune, the ruler or his henchmen would find a way to steal it. But in medieval Europe something new happened. A new class of merchants and manufacturers began to collect in towns. [10] Together they were able to withstand the local feudal lord. So for the first time in our history, the bullies stopped stealing the nerds' lunch money. This was naturally a great incentive, and possibly indeed the main cause of the second big change, industrialization.

A great deal has been written about the causes of the Industrial Revolution. But surely a necessary, if not sufficient, condition was that people who made fortunes be able to enjoy them in peace. [11] One piece of evidence is what happened to countries that tried to return to the old model, like the Soviet Union, and to a lesser extent Britain under the labor governments of the 1960s and early 1970s. Take away the incentive of wealth, and technical innovation grinds to a halt.

Remember what a startup is, economically: a way of saying, I want to work faster. Instead of accumulating money slowly by being paid a regular wage for fifty years, I want to get it over with as soon as possible. So governments that forbid you to accumulate wealth are in effect decreeing that you work slowly. They're willing to let you earn $3 million over fifty years, but they're not willing to let you work so hard that you can do it in two. They are like the corporate boss that you can't go to and say, I want to work ten times as hard, so please pay me ten times a much. Except this is not a boss you can escape by starting your own company.

The problem with working slowly is not just that technical innovation happens slowly. It's that it tends not to happen at all. It's only when you're deliberately looking for hard problems, as a way to use speed to the greatest advantage, that you take on this kind of project. Developing new technology is a pain in the ass. It is, as Edison said, one percent inspiration and ninety-nine percent perspiration. Without the incentive of wealth, no one wants to do it. Engineers will work on sexy projects like fighter planes and moon rockets for ordinary salaries, but more mundane technologies like light bulbs or semiconductors have to be developed by entrepreneurs.

Startups are not just something that happened in Silicon Valley in the last couple decades. Since it became possible to get rich by creating wealth, everyone who has done it has used essentially the same recipe: measurement and leverage, where measurement comes from working with a small group, and leverage from developing new techniques. The recipe was the same in Florence in 1200 as it is in Santa Clara today.

Understanding this may help to answer an important question: why Europe grew so powerful. Was it something about the geography of Europe? Was it that Europeans are somehow racially superior? Was it their religion? The answer (or at least the proximate cause) may be that the Europeans rode on the crest of a powerful new idea: allowing those who made a lot of money to keep it.

Once you're allowed to do that, people who want to get rich can do it by generating wealth instead of stealing it. The resulting technological growth translates not only into wealth but into military power. The theory that led to the stealth plane was developed by a Soviet mathematician. But because the Soviet Union didn't have a computer industry, it remained for them a theory; they didn't have hardware capable of executing the calculations fast enough to design an actual airplane.

In that respect the Cold War teaches the same lesson as World War II and, for that matter, most wars in recent history. Don't let a ruling class of warriors and politicians squash the entrepreneurs. The same recipe that makes individuals rich makes countries powerful. Let the nerds keep their lunch money, and you rule the world.

Notes

[1] One valuable thing you tend to get only in startups is uninterruptability. Different kinds of work have different time quanta. Someone proofreading a manuscript could probably be interrupted every fifteen minutes with little loss of productivity. But the time quantum for hacking is very long: it might take an hour just to load a problem into your head. So the cost of having someone from personnel call you about a form you forgot to fill out can be huge.

This is why hackers give you such a baleful stare as they turn from their screen to answer your question. Inside their heads a giant house of cards is tottering.

The mere possibility of being interrupted deters hackers from starting hard projects. This is why they tend to work late at night, and why it's next to impossible to write great software in a cubicle (except late at night).

One great advantage of startups is that they don't yet have any of the people who interrupt you. There is no personnel department, and thus no form nor anyone to call you about it.

[2] Faced with the idea that people working for startups might be 20 or 30 times as productive as those working for large companies, executives at large companies will naturally wonder, how could I get the people working for me to do that? The answer is simple: pay them to.

Internally most companies are run like Communist states. If you believe in free markets, why not turn your company into one?

Hypothesis: A company will be maximally profitable when each employee is paid in proportion to the wealth they generate.

[3] Until recently even governments sometimes didn't grasp the distinction between money and wealth. Adam Smith (Wealth of Nations, v:i) mentions several that tried to preserve their "wealth" by forbidding the export of gold or silver. But having more of the medium of exchange would not make a country richer; if you have more money chasing the same amount of material wealth, the only result is higher prices.

[4] There are many senses of the word "wealth," not all of them material. I'm not trying to make a deep philosophical point here about which is the true kind. I'm writing about one specific, rather technical sense of the word "wealth." What people will give you money for. This is an interesting sort of wealth to study, because it is the kind that prevents you from starving. And what people will give you money for depends on them, not you.

When you're starting a business, it's easy to slide into thinking that customers want what you do. During the Internet Bubble I talked to a woman who, because she liked the outdoors, was starting an "outdoor portal." You know what kind of business you should start if you like the outdoors? One to recover data from crashed hard disks.

What's the connection? None at all. Which is precisely my point. If you want to create wealth (in the narrow technical sense of not starving) then you should be especially skeptical about any plan that centers on things you like doing. That is where your idea of what's valuable is least likely to coincide with other people's.

[5] In the average car restoration you probably do make everyone else microscopically poorer, by doing a small amount of damage to the environment. While environmental costs should be taken into account, they don't make wealth a zero-sum game. For example, if you repair a machine that's broken because a part has come unscrewed, you create wealth with no environmental cost.

[5b] This essay was written before Firefox.

[6] Many people feel confused and depressed in their early twenties. Life seemed so much more fun in college. Well, of course it was. Don't be fooled by the surface similarities. You've gone from guest to servant. It's possible to have fun in this new world. Among other things, you now get to go behind the doors that say "authorized personnel only." But the change is a shock at first, and all the worse if you're not consciously aware of it.

[7] When VCs asked us how long it would take another startup to duplicate our software, we used to reply that they probably wouldn't be able to at all. I think this made us seem naive, or liars.

[8] Few technologies have one clear inventor. So as a rule, if you know the "inventor" of something (the telephone, the assembly line, the airplane, the light bulb, the transistor) it is because their company made money from it, and the company's PR people worked hard to spread the story. If you don't know who invented something (the automobile, the television, the computer, the jet engine, the laser), it's because other companies made all the money.

[9] This is a good plan for life in general. If you have two choices, choose the harder. If you're trying to decide whether to go out running or sit home and watch TV, go running. Probably the reason this trick works so well is that when you have two choices and one is harder, the only reason you're even considering the other is laziness. You know in the back of your mind what's the right thing to do, and this trick merely forces you to acknowledge it.

[10] It is probably no accident that the middle class first appeared in northern Italy and the low countries, where there were no strong central governments. These two regions were the richest of their time and became the twin centers from which Renaissance civilization radiated. If they no longer play that role, it is because other places, like the United States, have been truer to the principles they discovered.

[11] It may indeed be a sufficient condition. But if so, why didn't the Industrial Revolution happen earlier? Two possible (and not incompatible) answers: (a) It did. The Industrial Revolution was one in a series. (b) Because in medieval towns, monopolies and guild regulations initially slowed the development of new means of production.

Education and School Loan Consolidation

2007-03-26T13:13:00.000+05:30

The easiest way to reduce your student and school loan debt is to consolidate student loans. School loan consolidation results in lowered debt and payments if the average interest after consolidation is lower than it is before. This is really just refinancing one or a group of federal student loans, at a lower interest rate - just as refinancing a mortgage loan at a lower interest rate would reduce monthly payments and the total amount paid.

There are two basic kinds of school loans - private and federal. Federal school loans are almost always at a much lower interest rate than you could get for an unsecured private school loan. Because of the nature of the federal loans, you should never consolidate both private and federal loans into a single private loan. Because only federal loans carry government backing, they can be refinanced at a much lower interest rate than can privately financed school loans. So when you come to consolidate school loans, do the federal loans together then look at consolidating your private student loans.

References and Links

1. Student Loan Consolidation - General information and eligibility information for student loan consolidation, with lenders and other student loan companies
2. Consolidate Federal Student Loans - Details on federal student and school loans, with resources and student loan comapny lists for consolidating your federal student loans.

Student Loan Consolidation

2007-03-26T13:06:00.000+05:30

Consolidation Loans combine several student or parent loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans. It is very similar to refinancing a mortgage. Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans. Some lenders offer private consolidation loans for private education loans as well.

A separate page provides a comparison chart of consolidation loan discounts.

Interest Rates

The interest rate on a consolidation loan is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%.

For example, suppose a student has just Stafford Loans originated on or after July 1, 2006. These loans have a fixed interest rate of 6.8%. When they are consolidated by themselves, the consolidation loan will have an interest rate of 6 and 7/8ths of a percent, or 6.875%. So the interest rate increases only slightly.

If the borrower has a mix of loans with different interest rates, the weighted average will be somewhere in between. For example, if the borrower has $5,000 of Perkins Loans (at 5.0%) and $10,000 of Stafford Loans (at 6.8%), the weighted average is


$5,000 * 5.0% + $10,000 * 6.8%
------------------------------ = 6.2%
$5,000 + $10,000

This weighted average, 6.2%, is then rounded up to the nearest 1/8th of a percent, yielding a consolidation loan interest rate of 6.25%.

Note that the weighted average does not fundamentally alter the underlying cost of the loan. It preserves the cost structure by including each interest rate to the extent that it applies to part of the overall loan balance. For example, the consolidation loan in the previous paragraph says that of the $15,000 consolidation loan balance, $5,000 will be at 5.0% and $10,000 at 6.8%, yielding an equivalent interest rate of 6.2%.

If you are consolidating loans with different interest rates, the weighted average interest rate will always be in between. Don't be fooled if someone tries to suggest that this will save you money by getting you a lower interest rate. The interest rate may be lower than the highest of your interest rates, but it is also higher than the lowest of your interest rates. More importantly, the amount of interest you pay over the lifetime of the loan will be about the same.

(For the mathematically inclined, there is a slight difference due to the different shapes of amortization curves at each interest rate. In the example given above on a 10 year term, $10,000 at 6.8% has a monthly payment of $115.08 and total interest paid of $3,809.66, $5,000 at 5.0% has a monthly payment of $53.03 and total interest paid of $1,364.03. If you add these, you obtain a total monthly payment of $168.11 and a total interest paid of $5,173.69. Using the weighted average, $15,000 at 6.2% has a monthly payment of $168.04 and a total interest paid of $5,165.01. So using a weighted average yields a very small reduction in the monthly payment (in this case, 7 cents) and in the total interest paid ($8.68) due to a kind of triangle law. Of course, when you consolidate the interest rate is rounded up to the nearest 1/8th of a point, so $15,000 at 6.25% has monthly payments of $168.42 and total interest of $5,210.42, yielding a slight increase. So you pay a tiny bit of a premium for consolidation, due to the rounding up of the interest rate.

The PLUS loan interest rate loophole can reduce the interest rate on 8.5% fixed rate PLUS loans by 0.25% through consolidation.

If you were deferring the interest on an unsubsidized Stafford Loan by capitalizing it, most lenders will add the capitalized interest to principal when you consolidate. (Lenders can capitalize interest at most quarterly, but most capitalize it once when the loans enter repayment or at other loan status changes.)

No Cost to Consolidate

Aside from a slight increase in the interest rate on the consolidation loan, there is no cost to consolidate your loans. There are no fees to consolidate.

Under no circumstances pay a fee in advance to get a federal education loan or consolidate your federal education loans. There are no fees to consolidate your loans. While other federal education loans, such as the Stafford and PLUS loans, may charge some fees, the fees are always deducted from the disbursement check. There is never an up front fee. If someone wants you to pay an up front fee, chances are that it is an example of an advance fee loan scam.

Who Can Consolidate

Both student and parent borrowers can consolidate their education loans. (Students and parents cannot combine their loans through consolidation, since only loans from the same borrower can be consolidated. But they can consolidate their loans separately.)

Married students are no longer able to consolidate their loans together. This provision was repealed effective July 1, 2006. When married students consolidated their loans together, each spouse became responsible for the full amount of the loan, and the loans could not be separated if the couple got divorced. To avoid such problems in the future, Congress decided to repeal this provision as part of the Higher Education Reconciliation Act of 2005.

Students can only consolidate their education loans during the grace period or after the loans enter repayment. (Loans that are in default but with satisfactory repayment arrangements may also be consolidated.) Students can no longer consolidate while they are still in school. (The early repayment status loophole and the ability of Direct Loan borrowers to consolidate during the in-school period was repealed as part of the Higher Education Reconciliation Act of 2005, effective July 1, 2006.)

Parents, however, can consolidate PLUS loans at any time.

You Can Consolidate with Any Lender

Students and parents can consolidate their loans with any lender, even if all of their loans are with a single lender. (The single holder rule was repealed on June 15, 2006, as part of the Emergency Supplemental Appropriations Act of 2006. Borrowers no longer need to exploit the single holder rule loopholes in order to consolidate with any lender.) Direct Loans can also be consolidated with any lender. This allows you to shop around for a lender that offers a lower rate or better discounts.

Most lenders require a minimum balance before they will consolidate your loans. For example, many lenders will only offer consolidation loans for borrowers with loan balances of at least $7,500. A few lenders will offer consolidation loans for balances of $5,000 or more, and the Federal Direct Consolidation Loan program has no minimum balance for consolidation loans. (Lenders may not discriminate against borrowers who seek consolidation loans on the basis of number/type of student loans, type/category of educational institution, the interest rate on the loans, or the type of repayment schedule sought by the borrower. Lenders are, however, able to discriminate on the basis of the amount of the loans being consolidated, so lenders can set a minimum balance on the loans.)

Which Loans Can be Consolidated?

Any federal education loan can be consolidated. You can even consolidate a single loan. There are, however, a few restrictions on consolidating a consolidation loan.

You can consolidate a consolidation loan only once. In order to reconsolidate an existing consolidation loan, you must add loans that were not previously consolidated to the consolidation loan. You can also consolidate two consolidation loans together. But you cannot consolidate a single consolidation loan by itself. These restrictions have been in effect since early 2006.

Note that when you reconsolidate a consolidation loan, it does not relock the rates on the consolidation loan. The consolidation loan is treated as a fixed rate loan within the weighted average interest rate formula used to calculate the interest rate on the new consolidation loan. Consolidation does not pierce the veil on previous consolidations.

The new restrictions on consolidating a consolidation loan limit your ability to use consolidation to switch lenders. Generally, you will consolidate your loans once, toward the end of the grace period or after the loans enter repayment, and then be locked into that lender for the lifetime of the loan. If you want to preserve your ability to use consolidation in the future to switch lenders, you should exclude one of your loans from the consolidation.

Repayment Plans

Consolidation loans provide access to several alternate repayment plans besides standard ten-year repayment. These include extended repayment, graduated repayment, income contingent repayment (Direct Loans only) and income sensitive repayment (FFEL only). If you do not specify the repayment terms, you will receive standard ten-year repayment.

Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10-year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid over the lifetime of the loan is increased.

In certain circumstances (for example, when one or more of the loans was being repaid in less than 10 years because of minimum payment requirements), a consolidation loan may decrease the monthly payment without extending the overall loan term beyond 10 years. In effect, the shorter-term loan is being extended to 10 years. The total amount of interest paid will increase unless you continue to make the same monthly payment as before, in which case the total amount of interest paid will decrease.

You do not need to pick an alternate repayment plan. We recommend sticking with standard ten-year repayment, because it will save you money. The alternate repayment plans may have lower monthly payments, but this increases the term of the loan and the total interest paid over the lifetime of the loan. See our caveat about extended repayment below.

Repayment on a consolidation loan will begin within 60 days of disbursement of the loan, unless the borrower qualifies for an deferment or forbearance.

Federal education loans, including consolidation loans, do not have a prepayment penalty. So you can pay off all or part of your federal education loans without incurring a penalty. If you want to take advantage of this, be sure to include a letter with the extra payment indicating that it should be applied to reducing your principal. Otherwise, the lender may treat it as an advance payment of the next month's monthly payment.

Tools for Evaluating Consolidation Options

FinAid's Loan Consolidation Calculator can help you understand the tradeoffs of consolidating your loans. It compares the reduction in the monthly loan payment with the increase in the total interest paid over the lifetime of the loan. It also shows you the interest rate on your consolidation loan.

Despite the switch to fixed interest rates on Stafford and PLUS loans eliminating a key financial incentive to consolidate, there are still several reasons to consolidate your education loans. These include having a single monthly payment, access to alternate repayment plans, the PLUS loan interest rate loophole, and the ability to reset the 3-year clock on deferments and forbearances. But consolidation can cut short the grace period, although the grace period loophole can work around this problem. It is best to avoid consolidating Perkins loans, because you lose several valuable benefits. Beware of extending the term of your loan, as this can increase the total interest paid over the lifetime of the loan; you can stick with standard ten-year repayment.

For More Information

FinAid has a page of common questions about consolidation.

The numerous student loan loopholes are discussed in depth in other sections of the FinAid site.

Learn more about Loan Consolidation from Citibank Student Loans.

FinAid also maintains a list of education lenders who offer federal and private student loans, including consolidation loans.

If your school participates in Direct Lending, you should visit the US Department of Education's Federal Direct Consolidation Loan web site.

Calvin And Hobbes - Bill Watterson

2007-03-25T21:46:00.000+05:30

Hundreds of comic strips have been published in newspapers. The majority are terrible, and almost all the rest are mediocre. There have been maybe four or five good comic strips in the history of the world. So saying that Calvin and Hobbes is the best comic strip ever doesn't really hold a lot of weight.

And it's really a shame that it's so difficult to quantify this strip's greatness. I can confidently state that Calvin and Hobbes outclasses the rest of the comic strip world more than anything else has ever outclassed the rest of its medium. Sans this strip, the industry is characterized by guys sitting on rocks making stupid puns, a Family Circus kid misunderstanding the meaning of a word, or an overweight father playing golf while telling jokes such as I LIKE GOLF and GOLF IS HARD. It's a medium that doesn't really deserve something as good as Calvin and Hobbes, but it got it anyway, and the newspaper-reading world was made a better place by it.

Calvin and Hobbes ran from 1985 to 1995. Bill Watterson drew thousands of strips, and while I wish like hell that he would come back and draw more, it's probably best to reflect and be thankful for what he's done. Below we have showcased, in no particular order, some of our favorite Calvin and Hobbes strips of all time. If you love them as much as we do, let us know if you think there are any that we should have included. And if you missed out, well, hopefully we can give you some idea of why Mr. Watterson
is our hero.

"Virtue needs some cheaper thrills."

Calvin is an unbelievably intelligent six-year-old. Hobbes is his tiger friend who plays the role of Jiminy Cricket, casual observer, and savage beast. This strip introduces their dynamic rather well. Calvin's a grossly misbehaving child, and no matter how he tries, he can't betray his nature.

It's kind of refreshing to see a strip that doesn't feel the need to have an uplifting message, or feel like it needs to point out that it's mean to whack an innocent person upside the dome with a snowball.

Amway all the way

2007-03-24T00:21:00.000+05:30

The concept of network marketing is new in India and i think there is a chance for all of us to make hay before the sun shines. Today i attended a seminar on Amway and was completely impressed to see such highly qualified people who joined as affiliates. There were guys from IITs and IIMs and today was the first time that i was introduced to an IIM Ahmedabad guy. Its not that they are too special but when you see them doing network marketing then you ought to find out the bigger picture. Well the truth is that network marketing aka MLM is a big industry in US and those who are aware of this can figure out how huge it can grow in India considering the population - hell we have got more than a billion people to market to. I still haven't registered as an affiliate there because i am still exploring the options. But the best thing that i liked is that i could network with such talented people so easily. Just last week i was wondering if i would be able to start a business or do something on my own because i do not have any friend who has a successful business and from whom i could learn tricks of trade and all of a sudden things have entirely changed. I met people who are running their own businesses apart from Amway. Overall this week was awesome. I would appreciate your comments.

Amway Or Network Marketing

2007-03-24T00:14:00.000+05:30

hello everyone out there

50 Ways to Save Money in Your Business - Save your company thousands of dollars with these penny-pinching tips.

2007-03-24T00:10:00.000+05:30

On a shoestring budget (and what entrepreneur isn't?), it really pays to scrimp and save. Just in case you've forgotten the value of a hard-earned penny, we've come up with a slew of money-saving ideas to boost your business's bottom line-from cutting your legal bills to inexpensive ways to draw in customers. Though some tips will save you more money than others, the end result of your overall spendthrift strategy could add up to a bundle.

Penny-Pinching Promotions

1. Piggyback your advertising. Including advertising material in other mailings, such as in invoices, saves postage and other costs, says J. Donald Weinrauch, co-author of The Frugal Marketer. Likewise, make the most of your point-of-purchase opportunities by tucking coupons, newsletters or other promotional fliers in the bag with customers' purchases.

2. Be a good neighbor. Split advertising and promotion costs with neighboring businesses. Jointly promote a sidewalk sale, or take your marketing alliance further by sharing mailing lists, distribution channels and suppliers with businesses that sell complementary goods or services.

3. Ask the people you know for help. The kind of support you'd most like to get from your contacts is referrals-the names of specific individuals who need your products and services. So go ahead and ask! Your contacts can also give prospects your name and number. As the number of referrals you receive increases, so does your potential for increasing the percentage of your business generated through referrals.

4. Got a happy customer? By telling others what they've gained from using your products or services in presentations or informal conversations, your sources can encourage others to use your products or services.

5. Make a special TV appearance. Local cable TV stations often have very reasonable advertising rates at time slots throughout the day and night. Though you won't necessarily reach prime-time viewers, you will make an impression where it counts-in the comfort of potential customers' homes.

6. Offer expert advice. Teaching a class, speaking at a community meeting, or writing an article for a local paper not only makes you look like an expert but garners low-cost attention for your business.
· Read more online here.

Internet Ideas

7. Start your search engines. Research your market and find potential visitors for your Web site by looking through Usenet newsgroups (forums on the Internet where people post messages for public viewing) and special-interest groups related to your target market, product or service. Or, if you have America Online, visit their Small Business Center, which includes libraries of small-business information you can download at no charge.

8. Cut costs when setting up your online store. Think going online has to cost an arm and a leg? You can start out by selling items for next to nothing on online auction sites like eBayand Yahoo! Auctions. If you want to create a professional storefront, there are several "Web site in a box" solutions available, usually for a low monthly fee.
· Read more online here.

9. Start chatting. Find newsgroups that cater to your audience, and join the fray. "I didn't start [participating in online discussion groups] to generate business, but as a way to find information for myself on various subjects," says Shel Horowitz, owner of Northampton, Massachusetts-based Accurate Writing & More and author of several marketing books, including Grassroots Marketing. "But it turned out to be the single best marketing tool I use. It costs only my time. [One] list alone has gotten me around 60 clients in the past five years." Always include your URL in your signature, but don't do any hard selling-most groups will ban you immediately. Instead, provide useful information that'll make people will want to click on your site.

10. Spread the word yourself. Are you letting people know what your URL is? Try putting it on your letterhead and business cards and in e-mail signatures-wherever potential visitors are likely to see it. Include it on employee uniforms, any promotional items you give away, all press releases, in your Yellow Pages ad and on company vehicles.

Location Logic

11. Get a suite deal. You don't have to run your office full-time from an executive suite to benefit from its services. Many homebased entrepreneurs find executive suites meet a range of needs, including access to a private mailbox and a receptionist to answer or forward calls to your home office. Visit the Office Business Center Association International Web sitefor more information.

12. Be mobile. While the costs of establishing a permanent retail location can be steep-you may spend up to $100,000 or more, with leases spanning three to 10 years-carts, kiosks and temporary spaces can be an easier way to get a foot in the door with a lot less risk. The upfront investment for a kiosk or a cart ranges from just $2,000 to $10,000, according to Patricia Norins, publisher of Specialty Retail Report. License agreements for carts and kiosks are shorter and are usually renewed every month up to one year depending on the location. This arrangement makes it easy for entrepreneurs to "come in, try it out for a month, and if their product isn't working, shift to a new product line or close up shop and move to a new location," Norins says.

Office Overhead

13. Buy recycled printer cartridges. Check Google or your Yellow Pages for a local recycled printer cartridge supplier. Or if you want to mix your charitable instincts with your printing needs, visit www.lasermonks.com, a remanufactured printing supply company run by a group of monks in Wisconsin who, after business expenses are paid, donate their profits.

14. Fill it out for free. Instead of buying forms at your local office supply store or spending time creating them yourself, you can find tons of free forms online that you can download, customize and print. Our free forms on Formnetcan get you started.

15. Get free software. Visit Download.comto try hundreds of software products for free through trial downloads, freeware and limited versions of the full product. Visit our Complete Guide to Softwareto find the best software options for small businesses, including many links to the free trials of those brands. Another tip: If you haven't found what you're looking for through Download.com or our software guide, check out the manufacturer's site. Most offer free trial downloads.

16. Buy used equipment. Save up to 60 percent by buying used computer equipment, copiers and office furniture from stores such as the nationwide Aaron Rents & Sells chain. Auctions and newspaper classifieds are other good sources of used equipment.

Insurance Intelligence

17. Save by association. When looking for insurance, check with your trade association. Many associations offer competitive group insurance.

18. Be prepared. Buying appropriate insurance upfront saves money in the long run, says Jeanne Salvatore of the Insurance Information Institute, a nonprofit organization in New York City. Consider what situations would be catastrophic to your business and protect yourself with adequate insurance. "Disaster recovery," says Salvatore, "is one area where business owners shouldn't scrimp."

19. Make a foul-weather friend. By arranging for an alternative place to run your business in case of a major disaster, you may be able to save on business interruption insurance, advises the Insurance Information Institute. For instance, you could arrange with a firm in the same industry to use their facilities in case of damage, and vice versa.

20. Check up on your medical insurance. Before choosing a medical insurance carrier, ask for information on past claims and the loss ratio of paid claims to premiums, advises the Council of Better Business Bureausin Arlington, Virginia.

21. Raise your deductible. Raising the deductible on your insurance usually lowers your premiums. Even if you end up having to pay the deductible, it's likely to be less than the amount you save.

Employee Economics

22. Aim to lease. Employee leasing-in which you turn over your work force to a professional employer organization that leases your employees back to you-can save you substantial cash on employee benefits, says Bruce Steinberg at the American Staffing Association (ASA). For referral to a leasing company near you, visit the ASA online at www.staffingtoday.net.

23. Go with the flow. Rather than paying for employees who sit idle when business is slow, consider hiring temporary employees to handle surges in business.

24. Make experience count. Get free or low-cost help-and give local college students a chance to learn the ropes-by hiring interns.

25. Use independent contractors. Employers generally don't have to withhold or pay any taxes on payments to independent contractors. But be very careful that your independent contractors fit the definition provided by the IRS or you could face penalties.

26. Commission your sales force. Overhead, salaries, incentives, training costs, fringe benefits and expenses add up when you're hiring your own sales representatives. Contracting independent manufacturers' sales reps, paid on commission only, is less expensive-and often equally effective.

Shipping Savings

27. Clean up your mailing list. The U.S. Postal Service will clean up your mailing list for free, correcting addresses, noting incomplete addresses and adding ZIP+4 numbers so you'll be eligible for bar-code discounts.

28. Prune that mailing list even more. The Direct Marketing Association offers this checklist of cost-cutting ideas. Eliminate nonresponders and marginal prospects; print "Address Correction Requested" on the face of your mail; investigate co-mingling your mail with that of other small mailers to take advantage of discounts available mainly to large mailers; and stockpile mail to build up larger volumes.

29. Be an early bird. Send mail early in the day, and you can usually expect to get one- to two-day delivery for the price of a first-class stamp.

30. Shop around for an overnight courier. Overnight delivery rates for the major couriers are competitive; however, if you're willing to wait a few hours-or even an extra day-you could save.

Tax Tactics

31. Mind some petty pointers. Don't get careless about your petty cash account. "Though you don't need receipts for expenses under $75, you should still track these expenses since they can add up," advises Holmes Crouch, author of 18 tax books.

32. Hire your children. If your children are at least 14 years old and pay their own taxes, it pays to take advantage of their lower tax bracket. "You can essentially transfer income from your business to them [to save money]," says David L. Scott, author of The Guide to Saving Money (The Globe Pequot Press).

33. Take a stand on taxes. If your business is new in the neighborhood, you may be at a higher tax rate than those who have been there longer. "Go to city hall to determine what your neighbors are paying, and use this to negotiate a better rate," says Pete Collins of New York City-based PricewaterhouseCoopers LLP. "Expanding businesses can often negotiate with community authorities, who want them to stay in town rather than move and take jobs elsewhere."

34. Homebased? Don't overlook crucial tax deductions. In addition to being able to deduct a portion of your rent or mortgage interest and utilities as a business expense, you can also deduct a percentage of various home maintenance expenses, along with a portion of the cost of services such as house cleaning and lawn care. Check out the IRS's Web site, or check with a knowledgeable tax advisor for more information.

35. Get out on the town. If much of your business is conducted at restaurants or you find yourself driving to clients' offices, make sure you take those deductions. If you entertain clients or potential clients to discuss a current or future project, you can deduct a portion of your entertainment costs. To qualify for this deduction, you must maintain a log of entertainment-related expenses you plan to deduct. For mileage, you can deduct 37.5 cents per mile in 2004. This figure usually changes annually, so check with your accountant at the beginning of each year.

Financial Focus

36. Make credit comparisons. If you tend to run unpaid balances on your credit cards at the end of the month, shop for a card with a low interest rate. If you pay in full, it's more important to avoid an annual fee and look for a longer grace period. "Often credit card issuers waive the annual fee or reduce the interest rate if you ask," says Scott. "Just tell your credit card company you've had several solicitations from other companies with more favorable interest rates or no annual fees, and ask if they will reduce yours."

37. Avoid cash advances. "Credit card companies usually charge an upfront fee of up to 2 percent of the advance, with interest accruing immediately," says Scott.

38. Bank on an early deposit. Make bank deposits early enough in the day so you get credit (and start earning interest) that day.

39. Get checks in the mail. Ordering your checks from a printing company often costs less than getting them from a bank. Options include Checks in the Mailand Designer Checks.

40. Form a buying alliance. Join with another business or a trade association for bulk purchasing discounts.

41. Take it with you. If you're near your suppliers, pick up your order yourself-or perhaps have a friend or family member do it for you, suggests Sarah Williams Steinman, president of Casco Bay Herb Co., an herbal soap manufacturer in Cumberland, Maine. For example, Steinman's husband travels throughout the Northeast. "He keeps me updated as to when he might be near one of my suppliers," she says. "He often travels through the town where my olive oil supplier is, and he'll pick up a few hundred pounds of oil on his way home. That saves me about $75 in shipping." Caution: Pick up supplies yourself only when it truly saves you money. If it's taking you away from a revenue-producing activity, you're not really saving.

42. Be reluctant to give credit. If you do extend credit, thoroughly check the client's credit background, says Collins. For less-than-creditworthy accounts, Collins advises considering the following actions: Collect cash in advance; send partial shipments; request letters of credit, personal guarantees and a pledge of assets; take out credit insurance; or think about factoring (see below).

Professional Policies

43. Query your consultants. The professionals you work with regularly are often easy to bargain with, thanks to the rapport you've developed with them. Ask your insurance agent, accountant or attorney how you can cut back on their costs. You'd be surprised at the suggestions they might offer on ways to cut your premiums, reduce billable hours or avoid huge retainers. You might also barter your services.

44. Be a legal eagle. When hiring an attorney, make sure you have a written fee agreement to prevent surprises. It should include an estimate of the time to be spent on your case and specify what's covered in the fee-including typing or copying-and what is not.

45. Learn something new. Rather than pay a consultant to write your press releases, for example, hire one for an hour or so to show you how to do it yourself.

46. Run from the law. "Avoiding lawsuits is a big factor in business success," says tax book author Crouch. "Even arbitration can get expensive." The best alternative: Try to work out any problems before they grow to the point that attorneys get involved. "Don't ignore any written or phone complaints."

Buying Brainpower

47. Stretch your budget with barter. Swapping one product or service for another is a good way to avoid cash outlays-and unload slow-moving inventory. If you'd rather not bargain with other businesses directly, hire a commissioned barter broker (listed in the Yellow Pages under "Barter"), or join a commercial barter club or exchange. The National Association of Trade Exchanges (NATE) is a clearinghouse for member exchanges across the country, allowing business owners to swap just about anything with anyone. Participants typically receive "trade dollars" for their goods or services, which are brokered across cities nationwide with the help of NATE. Visit NATE at www.nate.org.

48. Time your payments. Ask suppliers if they give discounts for early payment. If not, it's to your advantage to pay your bills-including utilities, taxes and suppliers-as late as possible without incurring a fee, advises Scott. "The longer funds are under your control," he says, "the longer they're earning a return for you rather than someone else."

49. Join an association. Many trade and business associations have reasonable membership fees and offer discounts on everything from insurance, travel and car rental to long-distance phone service, prescriptions and even golf course fees.

50. Seek at least three bids on everything. Even mundane purchases merit shopping around. If you quote a competitor's lower price, a supplier or vendor will often match that price to win your business.

SEO - Build A Successful Site In 12 Months

2007-03-24T00:06:00.000+05:30

The following is from a post from Webmaster World. I think it's a great article and a good read for anyone starting up a website.

I know this system works 100% of the time with Google to attain rankings across a wide range of keywords. This is what I do with clients to build a successful site and it has worked every time. The level of success will depend largely on the subject matter, its potential audience, and its level of competition on the net.

The following will build a successful site in one years time via Google alone. It can be done faster if you are a real go getter, or everyone's favorite, a self starter.

1. Prep Work & Begin Building Content

Long before the domain name is settled on, start putting together notes to build at least a one hundred page site. That's just for openers. That's one hudred pages of real content, as opposed to fluff pages like copyright information and about us pages.

2. Domain Name

Easily brandable. You want Google.com and not MyKeyword.com. Keyword domains are out—branding and name recognition are in—big time in. The value of keywords in a domain name has never been less to search engines.

Learn the lesson of Goto.com becomes Overture.com and why they did it. It's one of the most powerful gut check calls I've ever seen on the internet. That took serious resolve and nerve to blow away several years of branding.

3. Site Design

The simpler the better. A general rule of thumb to follow is that text content should outweigh the HTML content. The pages should validate and be usable in everything from Lynx to leading edge browsers. Keep the HTML clean and stucturally sound, it makes it easier for spiders to eat up your content.

Stay away from heavy things like Flash, Document Object Model (DOM), Java, and JavaScript. Go external with scripting languages if you must have them—there is little reason to have them that I can see—they will rarely help a site and actually stand to hurt it greatly due to the many factors most people don't appreciate, such as search engines' distaste for JavaScript being just one of them.

Arrange the site in a logical manner with directory names hitting the top keywords you wish to hit. You can also go the other route and just throw everything in root. This is a rather controversial method, but it has been producing good long-term results across many search engines.

Don't clutter and don't spam your site with frivolous links. Keep it clean and professional to the best of your ability. Learn the lesson of Google itself. Simple is retro cool. Simple is what surfers want.

Speed isn't everything, it's almost the only thing. Your site should respond almost instantly to a request. If you get into even three to four seconds delay until "something happens" in the browser, you are in trouble.

Those few seconds may vary for someone living in a country other than your native one. The site should respond locally within three to four seconds tops! Any longer than that, and you'll lose ten percent of your audience for every second. That ten percent could be the difference between success and failure.

4. Page Size

The smaller the better. Keep it under 15k if you can. The smaller the better. Keep it under 12k if you can. The smaller the better. Keep it under 10k if you can. I trust you are getting the idea here. Over 5k and under 10k. Yeah, it sucks, and it's tough to do, but it works. It works for search engines, and it works for surfers.

5. Content

Build one page of content with 250 to 500 words per day. If you aren't sure what you need for content, start with the Overture keyword selector tool and find the core set of keywords for your topic area. Those are your subject starters.

6. Keyword Density & Position

Simple old fashioned search engine optimization from the ground up. Use the keyword once in the title, once in the description tag, once in a heading, once in the url, once in bold, once in italics, and once high on the page. Try to hit a keyword density of five to twenty percent.

Use good sentences and speel check it. Spell checking is becoming increasingly important as search engines use auto-correction during searches. There is no longer a reason to look like you can't spell—unless, of course, you really are phonetically challenged.

7. External Links

From every page, link to one or two high-ranking sites under that particular keyword. Use your keyword in the link text, as this is ultra important.

8. Internal Links

Link to on-topic, quality content across your site. If a page is about food, then make sure it links to the fruits and veggies page.

Specifically with Google, on-topic internal linking is very important for sharing your PageRank value across your site. You do not want one "all-star" page that out performs the rest of your site. You want fifty pages that produce one referral each a day, not one page that produces fifty referrals a day.

If you do find one page that drastically out performs the rest of the site with Google, you need to balance some of that PageRank value by moving it to other pages. It's the old share the wealth thing.

9. Put It Online

Don't go with virtual hosting. Stick with a hosting plan that offers a static IP address. Make sure the site is "crawlable" by a spider. All pages should be linked to more than one other page on your site, and not more than two levels deep from the root. Link the topic vertically as much as possible back to the root. A menu that is present on every page should link to your site's main "topic index" pages.

Don't put it online before you have a quality site. It's worse to put a "nothing" site online, than no site at all. You want it flushed out from the start.

Go for a listing in the Open Directory Project (ODP). If you have the budget, then submit to Looksmart and Yahoo. If you don't have the budget, then try for a freebie on Yahoo—but don't hold your breath.

10. Submit It

Submit the root to Google, Fast, AltaVista, WiseNut, DirectHit, and HotBot. Now comes the hard part: forget about submissions for the next six months. That's right. Submit it and forget about it.

11. Logging & Tracking

Get a quality tracker that can do justice to inbound referrals based on log files. Don't use a lame graphic counter, you need the real deal here. If your host doesn't support referrers, then back up and get a new host. You can't run a modern site without full referrals available all day, every day, and in real time.

12. Spiderlings

Watch for spiders from search engines. Make sure those that are crawling the full site can do so easily. If not, double check your linking system to make sure the spiders find their way through the site. Don't fret if it takes two spiderlings to get your whole site done by Google or Fast. Other search engines are pot luck and it is doubtful that you will be added at all, if not within six months.

13. Topic Directories

Almost every keyword sector has an authority hub on its topic. Go submit within the guidelines.

14. Links

Look around your keyword sector in Google's version of the Open Directory Project (ODP). This is best done after getting an ODP listing. Find sites that have a links page or that freely exchange links. Simply request a swap. Put a page of relevant content and links up for yourself as a collection spot.

Don't freak out if you can't get people to swap links. Just move on. Try to swap links with one fresh site a day. A simple personal email is enough. Stay low key about it and don't worry if a site won't link with you. Eventually they will.

15. Content

One page of quality content per day. Timely, topical articles are always the best. Try to stay away from to much personal, blogging type stuff, and look more for article topics that a general audience will like. Hone your writing skills and read up on the right style of "web speak" that tends to work with the fast and furious web crowd.

Lots of text breaks. Short sentences—lots of dashes—something that reads quickly.

Most web users don't actually read, they scan. This is why it is so important to keep low key pages today. People see a huge overblown page, and a portion of them will hit the back button before even trying to decipher it. They've got better things to do than waste 15 seconds trying to understand your whiz bang flash menu system. Just because some big support site can run flashed out motorhead pages, that is no indication that you can. You don't have to do what they do.

Use headers and bold text liberally on your pages as logical separators. I call them scanner stoppers, where the eye will logically come to rest on the page.

16. Gimmicks

Stay far away from "fads of the day" or anything that appears spammy, unethical, or tricky. Plant yourself firmly on the high ground in the middle of the road.

17. Link Backs

When you receive requests for links, check the site out before linking back with them. Check them through Google and their PageRank value. Look for directory listings. Don't link back to junk just because they asked. Make sure it is a site similar to yours and on topic.

18. Rounding Out The Offerings

Use options such as email a friend, forums, and mailing lists to round out your site's offerings. Hit the top forums in your market and read, read, read until your eyes hurt because you read so much. Stay away from "affiliate fads" that insert content on to your site.

19. Beware Of Flyer & Brochure Syndrome

If you have an e-commerce site or online version of bricks and mortar, be careful not to turn your site into a brochure. These don't work at all. Think about what people want. They aren't coming to your site to view "your content," they are coming to your site looking for "their content." Talk as little about your products and yourself as possible in articles.

20. Build One Page Of Content Per Day

Head back to the Overture keyword selector tool to get ideas for fresh pages.

21. Study Those Logs

After 30-60 days you will start to see a few referrals from places you've been listed. Look for the keywords people are using. See any bizarre combinations? Why are people using those to find your site? If there is something you have over looked, then build a page around that topic. Retro engineer your site to feed the search engine what it wants.

If your site is about "oranges," but your referrals are all about "orange citrus fruit," then you can get busy building articles around "citrus" and "fruit" instead of the generic "oranges."

The search engines will tell you exactly what they want to be fed—listen closely, there is gold in referral logs, it's just a matter of panning for it.

22. Timely Topics

Nothing breeds success like success. Stay abreast of developments in your keyword sector. If big site is coming out with a new product at the end of the year, then build a page and have it ready in October so that search engines get it by December, e.g. go look at all the PlayStation 3 and Nintendo Wii sites in Google right now. Those are sites that were on the ball last summer.

23. Friends & Family

Networking is critical to the success of a site. This is where all that time you spend in forums will pay off. Here's the Catch-22 about forums: lurking is almost useless. The value of a forum is in the interaction with your fellow colleagues and cohorts. You learn long-term by the interaction—not by just reading.

Networking will pay off in link backs, tips, email exchanges, and it will put you "in the loop" of your keyword sector.

24. Be Social

Social bookmarking and networking sites can be used to your advantage if the content is right. Places like Digg, Delicious, Technorati, StumbleUpon, and so on, can really expose your site to those that truly are interested. Expect some great backlinks and traffic if you use this to your advantage.

25. Notes, Notes, Notes

If you build one page per day, you will find that a brainstorm like inspiration will hit you in the head at some magic point. Whether it is in the shower (dry off first), driving down the road (please pull over), or just parked at your desk, write it down! Ten minutes later and you will have forgotten all about that great idea you just had. Write it down, and get detailed about what you are thinking. When the inspirational juices are no longer flowing, come back to those content ideas. It sounds simple, but it's a life saver when the ideas stop coming.

26. Submission Check At Six Months

Walk back through your submissions and see if you are listed in all the search engines you submitted to after six months. If not, then resubmit and forget it again. Try those freebie directories again too.

27. Build One Page Of Quality Content Per Day

Starting to see a theme here? Google loves content. Lots of quality content. Broad based over a wide range of keywords. At the end of a years time, you should have around four hundred pages of content. That will get you good placement under a wide range of keywords, generate reciprical links, and overall position your site to stand on its own two feet.

Do those twenty-seven things, and I guarantee you that in ones years time you will call your site a success. It will be drawing between 500 and 2000 referrals a day from search engines.

If you build a good site with an average of four to five pages per user, you should be in the ten to fifteen thousand page views per day range in one years time. What you do with that traffic is up to you, but that is more than enough to "do something" with.

StartUp FAQ

2007-03-24T00:02:00.000+05:30

I also have posted quite a few topics on Entrepreneurship, and building your own business...
I have them under the BusinessPoints label ... and the Entrepreneurship label also...

Where do you find co-founders?

Most successful startups have more than one founder, and usually the founders seem to have been friends for at least a year before starting the company. The best way to meet co-founders is to go to school with them, so recent grads have a big advantage there. You can also meet co-founders at work, but be careful not to violate whatever noncompete you signed. In the old days, co-founders often met through user groups, but this seems less common now.

How can someone start a startup if they have a family to support?

The best plan might be to start a consulting business that you can gradually morph into a startup. This way you always have a source of income. See How to Fund a Startup, especially the section labelled "Consulting."

Do you know of any good books about startups?

The how-to type of books are generally wretched. Many are downright mistaken.

The best source of information about startups is probably not business books, but histories of particular startups and industries. The most famous is Tracy Kidder's Soul of a New Machine, but there are many good books of this type. I particularly liked Sorensen's My Forty Years with Ford.

The one book we encourage startup founders to read is Dale Carnegie's How to Win Friends and Influence People. It's critically important for anyone in business. Try to get a used copy printed before the 1960s; after Carnegie died, the book continued to be "updated" by a committee, and the changes were not for the better. I'd also recommend Franklin's Autobiography.

I have multiple startup ideas. How do I decide which to work on?

Work on the one that will cause the most immediate, concrete improvement in users' lives. Don't worry too much at first about competitors, or how users will find out about it, or how to make money. But don't work on something that's going to take ten years, either. (In technology, ten years rounds up to never.)

Google is a good example. Everyone needs Web search, and the founders probably had something that significantly improved their own ability to find stuff online within the first couple months. And once something starts to work (a) it's enormously encouraging, and (b) it's much clearer what direction to take it in.

How much should a startup worry about being sued for patent infringement?

There are two kinds of patent suits:

1. Random people suing you in the hope of getting money.

2. Competitors suing you in order to destroy you.

Until you're successful, you won't have to worry about the first type. And once you are successful, you'll inevitably have a lot of them to deal with, valid or not. So fatalism is the right plan for type 1 suits.

How much you should worry about type 2 suits depends on what kind of business you're in. You probably have to worry more about it in hardware than in software. In software such suits are rare, so far.

So if you're doing software, I'd try to build something people want, and then hope for the best. The best, in this case, being that you get big enough that you have to worry about type 1 suits.

In software, patent suits are rarely to never the deciding factor in whether a startup succeeds or not. Founders should probably spend 100x as much time worrying about building something users won't want, because that kills 100x more startups than patent problems.

See Are Software Patents Evil? for more.

18 Mistakes That Kill StartUps

2007-03-23T23:54:00.000+05:30

In the Q & A period after a recent talk, someone asked what made startups fail. After standing there gaping for a few seconds I realized this was kind of a trick question. It's equivalent to asking how to make a startup succeed—if you avoid every cause of failure, you succeed—and that's too big a question to answer on the fly.

Afterwards I realized it could be helpful to look at the problem from this direction. If you have a list of all the things you shouldn't do, you can turn that into a recipe for succeeding just by negating. And this form of list may be more useful in practice. It's easier to catch yourself doing something you shouldn't than always to remember to do something you should. [1]

In a sense there's just one mistake that kills startups: not making something users want. If you make something users want, you'll probably be fine, whatever else you do or don't do. And if you don't make something users want, then you're dead, whatever else you do or don't do. So really this is a list of 18 things that cause startups not to make something users want. Nearly all failure funnels through that.

I also have posted quite a few topics on Entrepreneurship, and building your own business...
I have them under the BusinessPoints label ... and the Entrepreneurship label also...

1. Single Founder

Have you ever noticed how few successful startups were founded by just one person? Even companies you think of as having one founder, like Oracle, usually turn out to have more. It seems unlikely this is a coincidence.

What's wrong with having one founder? To start with, it's a vote of no confidence. It probably means the founder couldn't talk any of his friends into starting the company with him. That's pretty alarming, because his friends are the ones who know him best.

But even if the founder's friends were all wrong and the company is a good bet, he's still at a disadvantage. Starting a startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.

The last one might be the most important. The low points in a startup are so low that few could bear them alone. When you have multiple founders, esprit de corps binds them together in a way that seems to violate conservation laws. Each thinks "I can't let my friends down." This is one of the most powerful forces in human nature, and it's missing when there's just one founder.

2. Bad Location

Startups prosper in some places and not others. Silicon Valley dominates, then Boston, then Seattle, Austin, Denver, and New York. After that there's not much. Even in New York the number of startups per capita is probably a 20th of what it is in Silicon Valley. In towns like Houston and Chicago and Detroit it's too small to measure.

Why is the falloff so sharp? Probably for the same reason it is in other industries. What's the sixth largest fashion center in the US? The sixth largest center for oil, or finance, or publishing? Whatever they are they're probably so far from the top that it would be misleading even to call them centers.

It's an interesting question why cities become startup hubs, but the reason startups prosper in them is probably the same as it is for any industry: that's where the experts are. Standards are higher; people are more sympathetic to what you're doing; the kind of people you want to hire want to live there; supporting industries are there; the people you run into in chance meetings are in the same business. Who knows exactly how these factors combine to boost startups in Silicon Valley and squish them in Detroit, but it's clear they do from the number of startups per capita in each.

3. Marginal Niche

Most of the groups that apply to Y Combinator suffer from a common problem: choosing a small, obscure niche in the hope of avoiding competition.

If you watch little kids playing sports, you notice that below a certain age they're afraid of the ball. When the ball comes near them their instinct is to avoid it. I didn't make a lot of catches as an eight year old outfielder, because whenever a fly ball came my way, I used to close my eyes and hold my glove up more for protection than in the hope of catching it.

Choosing a marginal project is the startup equivalent of my eight year old strategy for dealing with fly balls. If you make anything good, you're going to have competitors, so you may as well face that. You can only avoid competition by avoiding good ideas.

I think this shrinking from big problems is mostly unconscious. It's not that people think of grand ideas but decide to pursue smaller ones because they seem safer. Your unconscious won't even let you think of grand ideas. So the solution may be to think about ideas without involving yourself. What would be a great idea for someone else to do as a startup?

4. Derivative Idea

Many of the applications we get are imitations of some existing company. That's one source of ideas, but not the best. If you look at the origins of successful startups, few were started in imitation of some other startup. Where did they get their ideas? Usually from some specific, unsolved problem the founders identified.

Our startup made software for making online stores. When we started it, there wasn't any; the few sites you could order from were hand-made at great expense by web consultants. We knew that if online shopping ever took off, these sites would have to be generated by software, so we wrote some. Pretty straightforward.

It seems like the best problems to solve are ones that affect you personally. Apple happened because Steve Wozniak wanted a computer, Google because Larry and Sergey couldn't find stuff online, Hotmail because Sabeer Bhatia and Jack Smith couldn't exchange email at work.

So instead of copying the Facebook, with some variation that the Facebook rightly ignored, look for ideas from the other direction. Instead of starting from companies and working back to the problems they solved, look for problems and imagine the company that might solve them. [2] What do people complain about? What do you wish there was?

5. Obstinacy

In some fields the way to succeed is to have a vision of what you want to achieve, and to hold true to it no matter what setbacks you encounter. Starting startups is not one of them. The stick-to-your-vision approach works for something like winning an Olympic gold medal, where the problem is well-defined. Startups are more like science, where you need to follow the trail wherever it leads.

So don't get too attached to your original plan, because it's probably wrong. Most successful startups end up doing something different than they originally intended—often so different that it doesn't even seem like the same company. You have to be prepared to see the better idea when it arrives. And the hardest part of that is often discarding your old idea.

But openness to new ideas has to be tuned just right. Switching to a new idea every week will be equally fatal. Is there some kind of external test you can use? One is to ask whether the ideas represent some kind of progression. If in each new idea you're able to re-use most of what you built for the previous ones, then you're probably in a process that converges. Whereas if you keep restarting from scratch, that's a bad sign.

Fortunately there's someone you can ask for advice: your users. If you're thinking about turning in some new direction and your users seem excited about it, it's probably a good bet.

6. Hiring Bad Programmers

I forgot to include this in the early versions of the list, because nearly all the founders I know are programmers. This is not a serious problem for them. They might accidentally hire someone bad, but it's not going to kill the company. In a pinch they can do whatever's required themselves.

But when I think about what killed most of the startups in the e-commerce business back in the 90s, it was bad programmers. A lot of those companies were started by business guys who thought the way startups worked was that you had some clever idea and then hired programmers to implement it. That's actually much harder than it sounds—almost impossibly hard in fact—because business guys can't tell which are the good programmers. They don't even get a shot at the best ones, because no one really good wants a job implementing the vision of a business guy.

In practice what happens is that the business guys choose people they think are good programmers (it says here on his resume that he's a Microsoft Certified Developer) but who aren't. Then they're mystified to find that their startup lumbers along like a World War II bomber while their competitors scream past like jet fighters. This kind of startup is in the same position as a big company, but without the advantages.

So how do you pick good programmers if you're not a programmer? I don't think there's an answer. I was about to say you'd have to find a good programmer to help you hire people. But if you can't recognize good programmers, how would you even do that?

7. Choosing the Wrong Platform

A related problem (since it tends to be done by bad programmers) is choosing the wrong platform. For example, I think a lot of startups during the Bubble killed themselves by deciding to build server-based applications on Windows. Hotmail was still running on FreeBSD for years after Microsoft bought it, presumably because Windows couldn't handle the load. If Hotmail's founders had chosen to use Windows, they would have been swamped.

PayPal only just dodged this bullet. After they merged with X.com, the new CEO wanted to switch to Windows—even after PayPal cofounder Max Levchin showed that their software scaled only 1% as well on Windows as Unix. Fortunately for PayPal they switched CEOs instead.

Platform is a vague word. It could mean an operating system, or a programming language, or a "framework" built on top of a programming language. It implies something that both supports and limits, like the foundation of a house.

The scary thing about platforms is that there are always some that seem to outsiders to be fine, responsible choices and yet, like Windows in the 90s, will destroy you if you choose them. Java applets were probably the most spectacular example. This was supposed to be the new way of delivering applications. Presumably it killed just about 100% of the startups who believed that.

How do you pick the right platforms? The usual way is to hire good programmers and let them choose. But there is a trick you could use if you're not a programmer: visit a top computer science department and see what they use in research projects.

8. Slowness in Launching

Companies of all sizes have a hard time getting software done. It's intrinsic to the medium; software is always 85% done. It takes an effort of will to push through this and get something released to users. [3]

Startups make all kinds of excuses for delaying their launch. Most are equivalent to the ones people use for procrastinating in everyday life. There's something that needs to happen first. Maybe. But if the software were 100% finished and ready to launch at the push of a button, would they still be waiting?

One reason to launch quickly is that it forces you to actually finish some quantum of work. Nothing is truly finished till it's released; you can see that from the rush of work that's always involved in releasing anything, no matter how finished you thought it was. The other reason you need to launch is that it's only by bouncing your idea off users that you fully understand it.

Several distinct problems manifest themselves as delays in launching: working too slowly; not truly understanding the problem; fear of having to deal with users; fear of being judged; working on too many different things; excessive perfectionism. Fortunately you can combat all of them by the simple expedient of forcing yourself to launch something fairly quickly.

9. Launching Too Early

Launching too slowly has probably killed a hundred times more startups than launching too fast, but it is possible to launch too fast. The danger here is that you ruin your reputation. You launch something, the early adopters try it out, and if it's no good they may never come back.

So what's the minimum you need to launch? We suggest startups think about what they plan to do, identify a core that's both (a) useful on its own and (b) something that can be incrementally expanded into the whole project, and then get that done as soon as possible.

This is the same approach I (and many other programmers) use for writing software. Think about the overall goal, then start by writing the smallest subset of it that does anything useful. If it's a subset, you'll have to write it anyway, so in the worst case you won't be wasting your time. But more likely you'll find that implementing a working subset is both good for morale and helps you see more clearly what the rest should do.

The early adopters you need to impress are fairly tolerant. They don't expect a newly launched product to do everything; it just has to do something.

10. Having No Specific User in Mind

You can't build things users like without understanding them. I mentioned earlier that the most successful startups seem to have begun by trying to solve a problem their founders had. Perhaps there's a rule here: perhaps you create wealth in proportion to how well you understand the problem you're solving, and the problems you understand best are your own. [4]

That's just a theory. What's not a theory is the converse: if you're trying to solve problems you don't understand, you're hosed.

And yet a surprising number of founders seem willing to assume that someone, they're not sure exactly who, will want what they're building. Do the founders want it? No, they're not the target market. Who is? Teenagers. People interested in local events (that one is a perennial tarpit). Or "business" users. What business users? Gas stations? Movie studios? Defense contractors?

You can of course build something for users other than yourself. We did. But you should realize you're stepping into dangerous territory. You're flying on instruments, in effect, so you should (a) consciously shift gears, instead of assuming you can rely on your intuitions as you ordinarily would, and (b) look at the instruments.

In this case the instruments are the users. When designing for other people you have to be empirical. You can no longer guess what will work; you have to find users and measure their responses. So if you're going to make something for teenagers or "business" users or some other group that doesn't include you, you have to be able to talk some specific ones into using what you're making. If you can't, you're on the wrong track.

11. Raising Too Little Money

Most successful startups take funding at some point. Like having more than one founder, it seems a good bet statistically. How much should you take, though?

Startup funding is measured in time. Every startup that isn't profitable (meaning nearly all of them, initially) has a certain amount of time left before the money runs out and they have to stop. This is sometimes referred to as runway, as in "How much runway do you have left?" It's a good metaphor because it reminds you that when the money runs out you're going to be airborne or dead.

Too little money means not enough to get airborne. What airborne means depends on the situation. Usually you have to advance to a visibly higher level: if all you have is an idea, a working prototype; if you have a prototype, launching; if you're launched, significant growth. It depends on investors, because until you're profitable that's who you have to convince.

So if you take money from investors, you have to take enough to get to the next step, whatever that is. [5] Fortunately you have some control over both how much you spend and what the next step is. We advise startups to set both low, initially: spend practically nothing, and make your initial goal simply to build a solid prototype. This gives you maximum flexibility.

12. Spending Too Much

It's hard to distinguish spending too much from raising too little. If you run out of money, you could say either was the cause. The only way to decide which to call it is by comparison with other startups. If you raised five million and ran out of money, you probably spent too much.

Burning through too much money is not as common as it used to be. Founders seem to have learned that lesson. Plus it keeps getting cheaper to start a startup. So as of this writing few startups spend too much. None of the ones we've funded have. (And not just because we make small investments; many have gone on to raise further rounds.)

The classic way to burn through cash is by hiring a lot of people. This bites you twice: in addition to increasing your costs, it slows you down—so money that's getting consumed faster has to last longer. Most hackers understand why that happens; Fred Brooks explained it in The Mythical Man-Month.

We have three general suggestions about hiring: (a) don't do it if you can avoid it, (b) pay people with equity rather than salary, not just to save money, but because you want the kind of people who are committed enough to prefer that, and (c) only hire people who are either going to write code or go out and get users, because those are the only things you need at first.

13. Raising Too Much Money

It's obvious how too little money could kill you, but is there such a thing as having too much?

Yes and no. The problem is not so much the money itself as what comes with it. As one VC who spoke at Y Combinator said, "Once you take several million dollars of my money, the clock is ticking." If VCs fund you, they're not going to let you just put the money in the bank and keep operating as two guys living on ramen. They want that money to go to work. [6] At the very least you'll move into proper office space and hire more people. That will change the atmosphere, and not entirely for the better. Now most of your people will be employees rather than founders. They won't be as committed; they'll need to be told what to do; they'll start to engage in office politics.

When you raise a lot of money, your company moves to the suburbs and has kids.

Perhaps more dangerously, once you take a lot of money it gets harder to change direction. Suppose your initial plan was to sell something to companies. After taking VC money you hire a sales force to do that. What happens now if you realize you should be making this for consumers instead of businesses? That's a completely different kind of selling. What happens, in practice, is that you don't realize that. The more people you have, the more you stay pointed in the same direction.

Another drawback of large investments is the time they take. The time required to raise money grows with the amount. [7] When the amount rises into the millions, investors get very cautious. VCs never quite say yes or no; they just engage you in an apparently endless conversation. Raising VC scale investments is thus a huge time sink—more work, probably, than the startup itself. And you don't want to be spending all your time talking to investors while your competitors are spending theirs building things.

We advise founders who go on to seek VC money to take the first reasonable deal they get. If you get an offer from a reputable firm at a reasonable valuation with no unusually onerous terms, just take it and get on with building the company. [8] Who cares if you could get a 30% better deal elsewhere? Economically, startups are an all-or-nothing game. Bargain-hunting among investors is a waste of time.

14. Poor Investor Management

As a founder, you have to manage your investors. You shouldn't ignore them, because they may have useful insights. But neither should you let them run the company. That's supposed to be your job. If investors had sufficient vision to run the companies they fund, why didn't they start them?

Pissing off investors by ignoring them is probably less dangerous than caving in to them. In our startup, we erred on the ignoring side. A lot of our energy got drained away in disputes with investors instead of going into the product. But this was less costly than giving in, which would probably have destroyed the company. If the founders know what they're doing, it's better to have half their attention focused on the product than the full attention of investors who don't.

How hard you have to work on managing investors usually depends on how much money you've taken. When you raise VC-scale money, the investors get a great deal of control. If they have a board majority, they're literally your bosses. In the more common case, where founders and investors are equally represented and the deciding vote is cast by neutral outside directors, all the investors have to do is convince the outside directors and they control the company.

If things go well, this shouldn't matter. So long as you seem to be advancing rapidly, most investors will leave you alone. But things don't always go smoothly in startups. Investors have made trouble even for the most successful companies. One of the most famous examples is Apple, whose board made a nearly fatal blunder in firing Steve Jobs. Apparently even Google got a lot of grief from their investors early on.

15. Sacrificing Users to (Supposed) Profit

When I said at the beginning that if you make something users want, you'll be fine, you may have noticed I didn't mention anything about having the right business model. That's not because making money is unimportant. I'm not suggesting that founders start companies with no chance of making money in the hope of unloading them before they tank. The reason we tell founders not to worry about the business model initially is that making something people want is so much harder.

I don't know why it's so hard to make something people want. It seems like it should be straightforward. But you can tell it must be hard by how few startups do it.

Because making something people want is so much harder than making money from it, you should leave business models for later, just as you'd leave some trivial but messy feature for version 2. In version 1, solve the core problem. And the core problem in a startup is how to create wealth (= how much people want something x the number who want it), not how to convert that wealth into money.

The companies that win are the ones that put users first. Google, for example. They made search work, then worried about how to make money from it. And yet some startup founders still think it's irresponsible not to focus on the business model from the beginning. They're often encouraged in this by investors whose experience comes from less malleable industries.

It is irresponsible not to think about business models. It's just ten times more irresponsible not to think about the product.

16. Not Wanting to Get Your Hands Dirty

Nearly all programmers would rather spend their time writing code and have someone else handle the messy business of extracting money from it. And not just the lazy ones. Larry and Sergey apparently felt this way too at first. After developing their new search algorithm, the first thing they tried was to get some other company to buy it.

Start a company? Yech. Most hackers would rather just have ideas. But as Larry and Sergey found, there's not much of a market for ideas. No one trusts an idea till you embody it in a product and use that to grow a user base. Then they'll pay big time.

Maybe this will change, but I doubt it will change much. There's nothing like users for convincing acquirers. It's not just that the risk is decreased. The acquirers are human, and they have a hard time paying a bunch of young guys millions of dollars just for being clever. When the idea is embodied in a company with a lot of users, they can tell themselves they're buying the users rather than the cleverness, and this is easier for them to swallow. [9]

If you're going to attract users, you'll probably have to get up from your computer and go find some. It's unpleasant work, but if you can make yourself do it you have a much greater chance of succeeding. In the first batch of startups we funded, in the summer of 2005, most of the founders spent all their time building their applications. But there was one who was away half the time talking to executives at cell phone companies, trying to arrange deals. Can you imagine anything more painful for a hacker? [10] But it paid off, because this startup seems the most successful of that group by an order of magnitude.

If you want to start a startup, you have to face the fact that you can't just hack. At least one hacker will have to spend some of the time doing business stuff.

17. Fights Between Founders

Fights between founders are surprisingly common. About 20% of the startups we've funded have had a founder leave. It happens so often that we've reversed our attitude to vesting. We still don't require it, but now we advise founders to vest so there will be an orderly way for people to quit.

A founder leaving doesn't necessarily kill a startup, though. Plenty of successful startups have had that happen. [11] Fortunately it's usually the least committed founder who leaves. If there are three founders and one who was lukewarm leaves, big deal. If you have two and one leaves, or a guy with critical technical skills leaves, that's more of a problem. But even that is survivable. Blogger got down to one person, and they bounced back.

Most of the disputes I've seen between founders could have been avoided if they'd been more careful about who they started a company with. Most disputes are not due to the situation but the people. Which means they're inevitable. And most founders who've been burned by such disputes probably had misgivings, which they suppressed, when they started the company. Don't suppress misgivings. It's much easier to fix problems before the company is started than after. So don't include your housemate in your startup because he'd feel left out otherwise. Don't start a company with someone you dislike because they have some skill you need and you worry you won't find anyone else. The people are the most important ingredient in a startup, so don't compromise there.

18. A Half-Hearted Effort

The failed startups you hear most about are the spectactular flameouts. Those are actually the elite of failures. The most common type is not the one that makes spectacular mistakes, but the one that doesn't do much of anything—the one we never even hear about, because it was some project a couple guys started on the side while working on their day jobs, but which never got anywhere and was gradually abandoned.

Statistically, if you want to avoid failure, it would seem like the most important thing is to quit your day job. Most founders of failed startups don't quit their day jobs, and most founders of successful ones do. If startup failure were a disease, the CDC would be issuing bulletins warning people to avoid day jobs.

Does that mean you should quit your day job? Not necessarily. I'm guessing here, but I'd guess that many of these would-be founders may not have the kind of determination it takes to start a company, and that in the back of their minds, they know it. The reason they don't invest more time in their startup is that they know it's a bad investment. [12]

I'd also guess there's some band of people who could have succeeded if they'd taken the leap and done it full-time, but didn't. I have no idea how wide this band is, but if the winner/borderline/hopeless progression has the sort of distribution you'd expect, the number of people who could have made it, if they'd quit their day job, is probably an order of magnitude larger than the number who do make it. [13]

If that's true, most startups that could succeed fail because the founders don't devote their whole efforts to them. That certainly accords with what I see out in the world. Most startups fail because they don't make something people want, and the reason most don't is that they don't try hard enough.

In other words, starting startups is just like everything else. The biggest mistake you can make is not to try hard enough. To the extent there's a secret to success, it's not to be in denial about that.

Notes

[1] This is not a complete list of the causes of failure, just those you can control. There are also several you can't, notably ineptitude and bad luck.

[2] Ironically, one variant of the Facebook that might work is a facebook exclusively for college students.

[3] Steve Jobs tried to motivate people by saying "Real artists ship." This is a fine sentence, but unfortunately not true. Many famous works of art are unfinished. It's true in fields that have hard deadlines, like architecture and filmmaking, but even there people tend to be tweaking stuff till it's yanked out of their hands.

[4] There's probably also a second factor: startup founders tend to be at the leading edge of technology, so problems they face are probably especially valuable.

[5] You should take more than you think you'll need, maybe 50% to 100% more, because software takes longer to write and deals longer to close than you expect.

[6] Since people sometimes call us VCs, I should add that we're not. VCs invest large amounts of other people's money. We invest small amounts of our own, like angel investors.

[7] Not linearly of course, or it would take forever to raise five million dollars. In practice it just feels like it takes forever.

Though if you include the cases where VCs don't invest, it would literally take forever in the median case. And maybe we should, because the danger of chasing large investments is not just that they take a long time. That's the best case. The real danger is that you'll expend a lot of time and get nothing.

[8] Some VCs will offer you an artificially low valuation to see if you have the balls to ask for more. It's lame that VCs play such games, but some do. If you're dealing with one of those you should push back on the valuation a bit.

[9] Suppose YouTube's founders had gone to Google in 2005 and told them "Google Video is badly designed. Give us $10 million and we'll tell you all the mistakes you made." They would have gotten the royal raspberry. Eighteen months later Google paid $1.6 billion for the same lesson, partly because they could then tell themselves that they were buying a phenomenon, or a community, or some vague thing like that.

I don't mean to be hard on Google. They did better than their competitors, who may have now missed the video boat entirely.

[10] Yes, actually: dealing with the government. But phone companies are up there.

[11] Many more than most people realize, because companies don't advertise this. Did you know Apple originally had three founders?

[12] I'm not dissing these people. I don't have the determination myself. I've twice come close to starting startups since Viaweb, and both times I bailed because I realized that without the spur of poverty I just wasn't willing to endure the stress of a startup.

[13] So how do you know whether you're in the category of people who should quit their day job, or the presumably larger one who shouldn't? I got to the point of saying that this was hard to judge for yourself and that you should seek outside advice, before realizing that that's what we do. We think of ourselves as investors, but viewed from the other direction Y Combinator is a service for advising people whether or not to quit their day job. We could be mistaken, and no doubt often are, but we do at least bet money on our conclusions.

Bill Gates on Innovation, Education and Role of Govt

2007-03-23T21:03:00.000+05:30

In a one on one with Peter Jennings (via ABC news) Bill Gates has some interesting insights. Some interesting questions captured here.

JENNINGS: Can you tell me two things that you have changed your mind about in the last year about, in the last year, about technology?

GATES: Well let’s see. There are some things that we are always thinking about. For example, when will speech recognition be good enough for everybody to use that? And we have made a lot more progress this year on that. I think we will surprise people a bit on how well we will do on our speech recognition. Also the idea of how the phone and the PC are coming together. Where you will be able to see the calls that you missed, or even when your phone rings see immediately who that is that’s calling, or control how that is forwarded, or even set it up so that the screen is part of your interaction. We are seeing that as increasingly important and are putting a lot of research into that.

JENNINGS: You have been a big advocate of travel. And you have on occasion said that Americans who spent more time traveling in Africa, for one, would learn something. What would we learn?

GATES: Well I think there is a lot of compassion when you see people in a very tough situation. When you see parents dying of AIDS, you see orphans, you see malaria. If you don’t see it — if you are just reading the statistics its hard to relate to and its hard to think of it as something that you need to help change. So actually getting out to India, to Africa, that’s critical to me to make sure my foundations is doing effective work and you know renews my commitment to take all the wealth I have and make sure it goes back to causes like world health.

JENNINGS: But you are a very specific example in this case and I will come to that, how do you think the average American would change if he or she traveled more?

GATES: I think they’d vote for Politicians who cared more about the developing world and the tough conditions there. That our aid would be more enlightened and a higher percentage of what we do. I think they would want to get involved themselves in either being a part of a volunteer organization here in the U.S. or even spending some time helping out overseas. I think they would feel a more common bond and realize how privileged they are.

JENNINGS: What have you learned about the value of private money?

GATES: Well private money can take risks in a way that government money often isn’t willing to. For example, take the creation of a vaccine that will eliminate AIDS as a problem or Malaria — that’s been vastly under-funded and we need to change that. Governments didn’t want to try something that could be a failure.

JENNINGS: And are you very, very aware that your children are terribly privileged? I shouldn’t say terribly privileged, very privileged and that you have to fight that with them for the future?

GATES: I think that’s one of the biggest challenges that Melinda and I face is that our kids will grow up in a nice house and we don’t want them to take things for granted. We’re looking forward to taking them on a lot of these foundation trips so that they will see what life really is like for most people on the planet and they’ll have an understanding for why we’re giving our wealth to those causes.

Google Myths

2007-03-23T20:44:00.000+05:30

I've heard many inaccurate things about Google this year, and most of them are spread by word of mouth. Maybe Google should do a better job at explaining things that may seem trivial to computer experts, but difficult understand for other people.

1. Google Desktop indexes your files and uploads the index to Google's servers. (Michael Arrington)
No. Google stores the index on your computer. If you enable a feature called "search across computers", Google will securely send copies of your indexed files to Google servers. The feature is disabled by default.

2. Gmail indexes your emails and makes them available for everyone. (Darbacour)
No. Google indexes your messages so you can search them. This feature is now available in other webmail applications (Yahoo Mail, Windows Live Mail). Google doesn't make your messages or the indexes public.

3. Google doesn't delete my Gmail messages.
In order to keep your email safe, Google needs to have multiple backups of your data. "You may organize or delete your messages through your Gmail account. (...) Residual copies of deleted messages and accounts may take up to 60 days to be deleted from our active servers and may remain in our offline backup systems." (Gmail Privacy Policy)

4. Google doesn't improve search anymore to increase its earnings from ads.
You may not perceive too many changes in Google search, but Google tweaks its algorithms often to improve search results quality, removes spam sites and tries to add more fresh results. On the visible side, Google added search refinements, more direct answers, malware warnings and address recognition.

5. Search results should be ranked by people, not by algorithms.
Google uses the links from other pages the determine the importance of a page, and those links were placed by humans. Google also monitors user's clicks to determine if the search results are relevant.

6. Google is spyware.
"Spyware is software that reports on your activities or gathers personal information about you and sends it via the Internet to third parties without your knowledge or consent." If you use software like Google Toolbar or Google Desktop, some features may send personal information to Google, but most of them are either turned off by default or require your explicit approval. Google also uses cookies to save your preferences and records queries, clicks, usage patterns to deliver better results. The problem is not that they record it, it's what they do with it. And Google tries to protect it from third parties (like US Government).

7. Google Earth shows real-time images.
No, what you see "are photographs taken by satellites and aircraft sometime in the last three years".

8. Google is the best search engine that will ever be built.
Google is far from a search engine that "understands exactly what you mean and gives you back exactly what you want". But its goal is to reach that state. (Google's philosophy)

9. Google favors Wikipedia, Technorati, blogs.
Well, not exactly. These sites happen to have many backlinks, and oftentimes quality links. I know many people that link to Wikipedia to show an explanation for a concept or an acronym, link to Technorati to tag their blog posts or link to blogs because they are infectious.

10. Google will take over the world.
Those who control information, control the world. Hopefully Google will be a benevolent dictator (guess what? I linked to Wikipedia).

The Best Blog On Entrepreneurship On The Blogosphere

2007-03-23T16:33:00.000+05:30

Hey, I just stumbled on the blog of the revered Guy Kawasaki, a former evangelist for Apple Computer....and currently he is Managing Director of his own venture capital firm - Garage Technology Ventures Inc. (cool name, huh ?)...
I found a particularly intriguing article on his blog...The Art of Bootstrapping...go and read it...it'll probably make sense to some of the aspiring entrepreneurs in India...

Federal Consolidation Loan FAQ

2007-03-23T00:22:00.000+05:30

		What is a Citibank Federal Consolidation Loan?
		A Citibank Federal Consolidation Loan combines several existing federal student loans into one new loan. You can enjoy the convenience of lower monthly payments, a single fixed interest rate and one monthly payment.

		What is the interest rate?
		The interest rate for a Federal Consolidation Loan is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. This rate is fixed for the life of the loan and cannot exceed 8.25%. You may be able to take advantage of a rate as low as 5.375%*. The interest rate on a Federal Consolidation Loan is set according to federal law.

		How can I consolidate my loan with the grace rate?
		You have the option of consolidating your loan during your grace period and taking advantage of a rate as low as 3.50%. It is important to remember that you must indicate the month and year of your grace end date in #26 on the Consolidation Loan application if you would like to hold the processing of your Consolidation Loan until the end of your six-month grace period. The rates in effect at the time that you apply for your Consolidation Loan will be used in the weighted average calculation to determine the rate on your Consolidated Loan.

		Will the reduced interest rate that I am receiving due to borrower benefits on my existing loans be used to calculate the fixed interest rate on my new Consolidation Loan?
		No. Interest rate reductions received as borrower benefits on existing loans will not be considered when determining the applicable interest rate on your consolidation loan. For example, if the applicable rate on your existing loans is 6.80%, but you were receiving interest rate reductions as a borrower benefit that reduced the interest rate to 5.80%, the interest rate used to calculate your new Consolidation Loan will be 6.80%.

		How can I find out what my Consolidation Loan payment will be?
		To estimate what your payments and total amount of interest paid may look like, input various interest rates into our Loan Consolidation Calculator. After your application has been approved, the disclosure and monthly account statement will include your exact payment amount and interest rate.

		How do I know if I am eligible?
		If all of your loans are in grace, repayment or in a deferment/forbearance, you may be eligible for a Citibank Federal Consolidation Loan. Your loans that are in an in-school status cannot be consolidated until you graduate or leave school. If you have defaulted on any of your loans, you need to make satisfactory payment arrangements with the current holder and provide evidence of that to Citibank. Loans subject to a judgment or wage garnishment are not eligible for consolidation.

		Can I consolidate my loans while I am attending school?
		If you are currently a full- or half-time student, you can apply for a Consolidation Loan upon graduation. For loans disbursed prior to July 1, 2006, the interest rate during the grace period is 0.60% lower than the Stafford repayment rate. By consolidating while you are in grace, you will have the opportunity to secure a lower interest rate and start paying down your student loans.

		Can I get an in-school deferment on my Consolidation Loan?
		If you are attending school at least half-time you will be eligible for an in-school deferment on your Consolidation Loan. Keep in mind that you will need to begin repaying your Consolidation Loan immediately upon graduating, withdrawing, or dropping to less than half-time enrollment status. Citibank offers a special Consolidation Loan four-month Lender Option forbearance that may be considered to help you ease into repayment.

		How do I apply for a Consolidation Loan?
		Apply today to lock in a low fixed interest rate. Citibank offers you three ways to apply for a Federal Consolidation Loan: Apply & Sign Online Apply & sign online using Citibank’s Online Federal Consolidation Loan Application. Let our online application guide you through the process. It’s fast, secure and easy! Download an Application (PDF ~176KB) Complete instructions on how to fill out and where to send your application are included. You must have the Adobe Acrobat Reader Software, Version 3.0 or greater, installed on your computer in order to view and print the application. Request an application be sent to you by mail Use our online form to request an application be sent to you by mail.
		What is the maximum/minimum loan limit for a Federal Consolidation Loan?
		There is no limit to the dollar amount you can consolidate.

		How do I check the status of my Consolidation Loan Application?
		To check the status of a Consolidation Loan Application, please call our Customer Service Department at 1-800-967-2400, Monday - Friday, 8:00 a.m. to 11:00 p.m. Eastern Time to speak with a Citibank Customer Service Representative. TDD users can call toll-free at 1-800-846-1298.

		How much is this going to cost?
		There are no application or processing fees. And, there is no penalty for early repayment.

		What if I forget to consolidate one of my eligible student loans?
		You can add an eligible student loan that you forgot to consolidate into your new Federal Consolidation Loan if the loan is added within 180 days of the original date of your new Consolidation Loan. If more than 180 days have passed, you’ll need to complete a new Federal Consolidation Loan application.

		If I have already consolidated my student loans, can I enter into a new Consolidation Loan?
		Once you have consolidated your student loans, you can only enter into a new Consolidation Loan if you either have an eligible student loan that was never consolidated or you get a new eligible student loan after the date of the original consolidation.

		Once my student loans are consolidated, is there a way to “unconsolidated” them?
		No. The original student loans are paid in full and cannot be “unconsolidated”. Once consolidation begins, there is no way to reverse the process.

		Should I keep making payments on my student loans while I’m waiting for my Consolidation Loan to be processed?
		Yes, continue to make all regular payments. You will be notified by mail when your Federal Consolidation Loan has been completed. You will receive a repayment schedule at the time of disclosure.

		How long with it take for my application to be processed?
		Depending on the number and type of loans you currently have, it takes approximately 6 to 8 weeks for the Consolidation Loan application to be processed.

		When will I have to make my first payment?
		It’s usually due within 45 days after the consolidation has been completed. You will receive a disclosure and a repayment schedule which identifies your payment due date.

		Are there any pre-payment penalties?
		There are no pre-payment penalties.

		Where can I find my student loan information for the Consolidation Application?
		If you are in repayment, look on your most recent statement. If you are in grace or in a deferment/forbearance, look on your disclosure statements that were sent to you when you obtained your loans. These items should provide you with an account number, balance and interest rate. If you have some of your loans through Citibank, you can check those loans online. You can also visit www.nslds.ed.gov.

		Can I consolidate with Citibank even if I have not borrowed any of my student loans with them?
		Yes, the federal government recently passed a law that now allows borrowers to consolidate their student loans with any eligible FFELP lender. This means that whether you are a prior Citibank student loan borrower or not, you can now consolidate your eligible loans with Citibank and receive our industry-leading benefits and services.

		Can I also consolidate my private student loans?
		Yes. Although private student loans cannot be included in a Federal Consolidation Loan, Citibank also offers a Private Consolidation Loan. Learn more…

¹The 5.375% interest rate is an estimated rate for the consolidation of Stafford Loans in a deferment or a grace status and taken out from July 1, 1998 through June 30, 2006. The rate assumes you will take advantage of all available Citibank interest rate reduction benefits. Actual rate may be higher or lower based on your existing loans. Stafford Loans disbursed on or after July 1, 2006 have a fixed interest rate of 6.80%. The interest rate on a Consolidation Loan is set according to federal law and will be the weighted average of the interest rates of the loans being consolidated rounded up to the nearest 0.125% or 8.25%, whichever is less. For example, the current 6.54% variable interest rate would be rounded up to the nearest 0.125%, or 6.625% after consolidation. Consolidation Loans are eligible for a 0.25% E-Z Pay interest rate discount when payments are automatically withdrawn from your bank account and you agree to only receive your statements electronically. Consolidation Loans are also eligible for a 1.00% interest rate reduction for CitiExtras® Savings after making the first 36 consecutive monthly payments on time. Assuming you are eligible for and take advantage of all available Citibank benefits, the 1.25% rate reductions would be applied to the 6.625%, thus reducing the rate to 5.375% for the 37th monthly payment through the remainder of the term. Any rate reductions obtained on underlying loans will not be used in calculating your loan consolidation rate. Interest rate reductions and other benefits terminate upon loan delinquency or default. You must continue to make your monthly payments by the scheduled payment due date to retain the applicable benefit. We reserve the right to modify or discontinue benefit programs at any time without notice. Program changes will not affect loans that were eligible for benefits prior to the time of the change. Other terms and conditions may apply.

The Student Loan Corporation

Benefits Of School Loan Consolidation

2007-03-23T00:11:00.000+05:30

There are many benefits to student loan consolidation. When a borrower consolidates student loans, he or she locks in the current, low interest rate, eliminating the need to worry about how interest rates will skyrocket in the future.

In many cases, consolidation lenders will have a borrower-benefit program, which often means an additional 1.25 percent interest rate reduction for qualified borrowers. Depending on the lender, these programs can often reduce interest rates to as low as 5.375 percent.

By locking in low rates for the life of their loan, borrowers enjoy the benefits of reduced monthly payments of almost 50 percent, which in the long run, will improve credit scores and potentially save borrowers thousands of dollars over the life of their loans.

Additionally, consolidation simplifies a borrower's finances. No longer does one have to rummage through piles of confusing loan documents from multiple lenders. Each month, a borrower with consolidated loans will receive just one bill from one lender.

Also, there are no penalties for early repayment. This gives you the option to pay off debts quicker, which will save you the headache of being in debt and the need to pay additional interest fees towards the end of your loan.

Improve Your Credit Score

As you may well know, credit scores play a major role in determining whether or not you get an apartment, house, car, cellular phone — the list goes on indefinitely. It's your way of showing companies that you are trustworthy and reliable enough to make consistent and timely payments on acquisitions that are more expensive. Having a bad credit score taints you, jeopardizing your chances of being approved by creditors.

Credit scores are negatively affected by late payments, incomplete or partial payments, defaults, and judgments and liens. The score can be broken down into several components: 35 percent of your score depends on your payment history; 30 percent, on your outstanding debt; 15 percent, the length of your credit history; 10 percent, recent inquiries on your credit report; and 10 percent, the types of credit your currently use.

Because a student loan is money owed, it adversely affects your payment history and your outstanding debt, which comprises 65 percent of your total credit score. This, of course, may be debilitating to your good credit.

Stafford loans, which are the most common type of student loans, are often issued in subsidized and unsubsidized portions. A student could graduate with as many as four subsidized Stafford loans and four unsubsidized Stafford Loans, totaling eight separate loans. Furthermore, most students don't make payments on their loans until after they graduate.

In summation, students may have eight loans in four years without a single payment.

Obviously, there are extenuating circumstances, including, "How can a student be expected to pay off their debts? They're concentrating on schoolwork! How can a full-time student work full-time?" Lenders recognize this and often offer grace periods, which exempt students from repayment for a few months after graduation.

Unfortunately, computers are responsible for calculating credit reports. For calculating machines, numbers are numbers, regardless of how compelling your story may be. Eight loans, four years, and no payments make a horrible combination.

A lesser-known benefit of consolidation is the fact that it improves your credit score. When you consolidate, your new lender pays off all of your eight loans, and then opens up one new consolidation loan. When a computer calculates your credit score, they will see this: eight loans paid in full. You will look like a responsible and trustworthy borrower.

Consolidation increases your credit score because it pays off all your old loans and reduces your number of open accounts.

Explaining the Consolidation Process

Although the student loan consolidation process seems complicated, it's actually quite simple. We've broken down the process into five easy steps to show you that there are no hidden tricks and messy loopholes.

Apply. After deciding which consolidation company has the best offers, you will need to fill out a consolidation application. Don't worry. Most lenders have student loan consolidation specialists with whom you can confer about your overall savings and the repayment plan that will best fit your financial circumstance.

Application is easy and free with no obligations. Many companies will send potential clients an application packet that includes the consolidation application, applicable discounts, and methods to compute your interest rates. Some, such as Law School Loans, allow students to apply over the Internet using an E-Signature process.

Once the lender receives your signed application, they will review your application, checking to make sure that your case complies with the Higher Education Act. If it does, they will proceed with the consolidation process.

Loan Verification Certificate. After lenders review the accuracy of your consolidation application, they will send your existing loan holder a loan verification certificate, which is essentially a payoff statement. The LVC reveals how much the student owes to that particular lender.

The original loan holder often takes a long time — sometimes even up to two months — to return the LVC to the consolidation company because they don't want to relinquish one of their borrowers and their interest payments.

If your original loan holder hoards a student's loan information, they stall that student's consolidation process. This may jeopardize the student's chances of locking in the current variable low interest rate. In two months' time, the variable interest rate might increase, making you lose thousands of dollars in savings. That is why many consolidation companies stress the importance of timeliness.

It should also be mentioned that while your application is pending, you ought to continue making payments on your existing loans. Because your loans are not yet paid off, you may incur late payments and negatively affect your credit score.

Paying Off Old Loans; Starting Anew. When the consolidation company receives the student's loan information, they will cut a check to all previous lenders, paying off each loan in full. Your consolidation lending company now owns all your loans, so you will only have to make one low monthly payment.

The consolidation company will then create a new federal consolidation loan for you. By this time, you will have successfully combined all your loans. Even better, the consolidation company will have paid off all other lenders, which will bolster your credit score by reducing the number of loans and showing that you have paid off previous debts.

Calculating the Interest Rates

LIBOR Index

LIBOR, also known as the London Interbank Offered Rate, is the interest rate at which banks borrow money from other banks in the London Interbank Market. It is also the standard financial index used in U.S. capital markets.

Because London's euro-based market reflects the world's economic condition, international investors use the LIBOR interest rate to match the cost of lending to the cost of funds. Many adjustable rate financial instruments such as Adjustable Rate Mortgages (ARMS) and other variable-rate loans base their interest rate on the LIBOR Index. It is the basis for some of the world's most active interest rate markets.

The LIBOR Index is set by the independent organization, the British Bankers Association (BBA), and is an average of inter-bank deposit rates offered by selected London banks for maturities. These rates are applicable to the U.S. dollar, the U.K. pound, the Swiss franc, the Canadian dollar, the Japanese yen, and the Danish krone. In a single month, the BBA fixes hundreds of LIBOR rates in different currencies.

These rates are compiled each working day by an electronic vendor and are then broadcast by various international distribution networks. The LIBOR Index, often used to set loan interest rates in the U.S., is posted monthly on Fannie Mae's website and daily in the Wall Street Journal.

Prime Rate

One of the most desirable interest rates is called the prime rate. Banks offer prime rate to their most creditworthy customers. Unlike the LIBOR Index, the prime rate does not adjust on a regular basis. However, when the prime rate does adjust, the LIBOR Index generally has smaller changes than the prime rate.

The Wall Street Journal Prime Rate is the most standard prime rate index. The Wall Street Journal prints a composite prime rate change only when 23 of the 30 largest banks change their prime rates.

According to the WSJ, prime rate is the "base rate on corporate loans posted by at least 75 percent of the nation's 30 largest banks." Prime rates are usually three percentage points higher than the Federal Funds Rate, the interest rate that banks charge one another.

The Federal Reserve fixes the Federal Funds Rate, increasing the Federal Fund Rate to slow down the economy and lowering the rate to boost it. When the Federal Reserve changes the interest rates, the prime rate will also reflect these changes.

However, most corporate loans are indexed to LIBOR. Prime rates, though they should be 3 percent higher than Federal Fund Rates, are usually equal to LIBOR rates.

Determining Interest Rates

When giving loans, banks offer their consumers a rate determined by the sum of three factors: the prime rate; a variable percentage, which is determined by the lender's assessment of the risk in lending; and the loan's profit margin.
Prime rates and LIBOR rates greatly affect the interest rates of consumer loan products such as credit cards, home equity loans, auto loans, small business loans, personal loans, some private student loans, and other variable-rate loans.

When a person borrows a loan, banks usually charge compound interest, which means that interest is calculated over the interest that has been added to the debt before. The frequency of compounding directly affects the total amount of interest paid over the life of the loan.

When a student borrows a loan with a LIBOR index, they can choose the frequency of the compounding, whether it is one month, six months, one year, or more. If a borrower has a one-month LIBOR rate, then the interest rate is fixed for that one-month period, and then compounded once every subsequent month.

To illustrate how this works, let's take a closer look at a specific scenario. If a student took out a $100,000 student loan with a one-year LIBOR rate and pays off her loans after 15 years, you can calculate the total amount by using the compounding formula,

Given that A0 is the principal amount borrowed, which is $100,000; that r is the interest rate, which is currently 5.2476 percent; that n is the number of compounding periods per year, which is one; and n?t is the total number of compounding periods, which would be 15; A(t), the total amount after 15 years, would be $215,368.91.

Let's look at another example where the student has a six-month LIBOR rate for a $100,000 loan. The interest rate, r, would be 5.1196 percent. The number of compounding periods per year would be 2, and the total number of compounding periods within 15 years would be 30. Using the same compound formula, the total amount after a 15-year period would be $213,459.

When calculating the interest rates for consolidation, your lender will take the weighted average of the interest rates on the loans being consolidated, then round it up to the nearest one-eighth percent. This new fixed interest rate will remain the same throughout the life of the loan.

Consolidation will allow you to lock in low interest rates before they increase. As a result, you will save money every single month on your payments and reduce the overall amount of interest you would have paid. Throughout the life of your loan, you may save up to 60 percent.

What to do during times of financial duress

After you graduate, you may have difficulty finding a job, much less a high-paying job. These situations may put undue financial stress on you. With a gazillion other bills to pay, you may not have enough extra cash to make monthly payments towards your school loans. Lenders know that life happens. It presents unexpected surprises and throws everything else off course.

For cases like these, lenders have created three different plans to help you get through rough times. The following explain your options:

Grace Period

For students who have consolidated while attending school, you may qualify for a 6-month grace period before you start repaying your debts. Your grace period will begin immediately after you are enrolled less than half-time at an eligible school.

If you have applied for consolidation, but your enrollment status drops below half-time before the first disbursement, you will not have to make consolidation payments for the remaining months in your grace period after you have received your first disbursement.

In order to qualify, you must meet all of the following conditions. First, you must have a Direct Loan or Federal Family Education Loan (FFEL) Program loan while you are in school. Third, your lender must receive your consolidation application before you graduate.

Varied Deferment Options

There are also different deferment options that will temporarily suspend the borrower's monthly loan payment.

Even though principal payments in both are postponed, deferment works differently for subsidized and unsubsidized loans. During the deferment of direct subsidized loans, interest is not charged to you. Instead, the government pays the interest on your behalf.

Whereas, during the deferment of direct unsubsidized loans, you will have to pay the interest accrual because the government will not. If the borrower chooses not to pay interest, then it will automatically be added to the principal balance of the loan, increasing the debt owed.

For loans that were disbursed after July 1, 1993, you may be eligible for the following five original deferment options. For loans taken out before July 1, 1993, you may have access to other deferment options not listed below. These are the options open to borrowers:

In-school Deferment. Borrowers must have Federal Stafford, Federal SLS, Federal Consolidation, or Federal PLUS Loans. In order to be eligible, the borrower must also be enrolled as a full-time or half-time student. No time limits are placed on this deferment.

Graduate Fellowship Deferment. To qualify, a borrower must be engaged in full-time student in an academic subject area in which he or she has been recommended by an institution of higher education. Oftentimes, the graduate fellowship deferment is given to borrowers who provide teaching and/or research assistance. Also, the deferment form must be signed by a program official, whether it is a dean, professor, director, or chief.

In addition to needing a bachelor's degree, the candidate must have outstanding Federal Stafford, Supplemental, PLUS, or Consolidation Loans. There is no time limit on graduate fellowship deferments.

Rehabilitation Training Deferment. In order to be eligible, the borrower must be either scheduled to engage or already engaged in a full-time rehabilitation training program. These programs, which are offered by the Department of Veteran Affairs or state agency that oversees vocational rehabilitation, help those with mental health issues or those who abuse drugs or alcohol.

Additionally, the borrower must have a plan that specifies when rehabilitation is expected to end. Usually, the time spent in rehab should be significant enough to excuse your inability to work full-time.

Unemployment Deferment. You must be actively seeking, yet unable to obtain a full-time job that matches your level of expertise, salary, or responsibility. You will need to show that you made six attempts to find employment in the past six months if you cannot provide documentation that shows that you are eligible for unemployment benefits. Furthermore, you must be registered with an employment agency if there is one within a 50-mile radius from your address.

Unemployment deferment must be renewed every six months. It cannot be renewed more than six times.

Economic Hardship Deferment. The borrower must meet and provide necessary documentation for one of the following conditions: (1) The Federal Family Education Loan (FFEL) or the Federal Perkins Loan Program has granted you an economic hardship deferment; (2) You get financial aid from federal or state public assistance program, including Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), or food stamps; or (3) The monthly compensation for your full-time job meets specific federal requirements.

Economic hardship deferment must be renewed every 12 months and cannot be renewed more than three times.

Peace Corps Services Deferments. To qualify, you must volunteer in the Peace Corps. This deferment must be renewed every 12 months and cannot be renewed more than three times.

You may qualify for deferment if you still owe money on a FFEL Program loan that was made before July 1, 1993 and if you meet the following criteria:

You may qualify for a three year deferment if you are disabled, act as a caretaker for a disabled spouse or dependent, serve in the U.S. Armed Forces, serve in the Commissioned Corps of the Public Health Serve, serve in the National Oceanic and Atmospheric Administration Corps, teach in a designated area that lacks mentors, or if you volunteer full-time for a tax-exempt organization or ACTION program.

You may qualify for a two year deferment if you participate in a medical internship or residency program.

You may qualify for a one year deferment if you are a mother entering or re-entering the workforce.

You may qualify for a six month deferment if you are on parental leave.

Forbearance

For those who disqualify for deferment, you may try to qualify for forbearance, which is a reduction in payment amount or a temporary suspension of payments. If you are suffering financial duress, then your lender may choose to postpone your current payments. However, if you are currently able to make payments and unable to make up for previous delinquent payment, then your lender may grant you forbearance on your previous debt.

Some circumstances that allow for forbearance include economic hardship, illness, service as a medical or dental intern/resident, service for the nation and the subsequent reception of a national service education award under the National and Community Service Trust Act of 1993, or times when the monthly debt on your federal Title IV student loans equals or exceeds 20 percent of your monthly income.

It is important to remember that forbearance does not eradicate all previous debt. Instead, it relieves you from making mandatory monthly payments for a short while. During this time, your monthly debts and interest accrue, and you are still responsible for their eventual pay-off.

There are consequences worth considering. You will be paying interest on a larger amount of debt. Your interest will be added to your debt, which will increase your overall debt. You will pay more interest on this larger debt. The cycle continues. In short, because your debt increases with time, when you decide to start paying off your debts, you will have a higher monthly payment than you did before.

Each lender creates its own forbearance policies. In some cases, a lender may grant you a temporary forbearance of 60 days, so that they may evaluate your evidence of economic distress and process your documentation. In other cases, if you have not made a single payment, your lender may ask you prove your dedication to repay by asking you to make one or more payments to your account.

To see if you are qualified for forbearance, you should contact your loan provider.

Repayment Period

Consolidation offers flexible repayment options that, depending on the amount of debt you have accrued, may extend your repayment period from the usual 10 years to up to 30 years. There are pros and cons to both a shorter and lengthier repayment plan, but you should choose plans according to how much you are willing to dish out per month. You may have to consider the size of your debt and the amount you are currently making.

If you opt for a shorter repayment period, you will be making larger monthly payments, which may make you tight on expendable cash. However, you will have to pay less interest during the life of your loan.

If you choose to have a longer repayment period, you will make smaller monthly payments, which will allow you to meet other expenses, such as childcare, car payments, and mortgage payments. You will have more financial mobility than you would if you chose a shorter repayment period, but you will pay more interest over the life of your loan.

It's important to realize that Consolidation Loans give you the option to switch repayment plans at any time, so you can change your plan to accommodate to the financial changes in your life.

In any case, after your first disbursement, you will have to make your first payment within 30 days. If you are qualified for deferment or forbearance, the time periods for the following payment plans do not pertain to you. The following are your repayment options:

Standard Repayment Plan. This is a 10 year plan, which includes fixed monthly payments of at least $50. In cases where your loan is higher, your monthly payments will have to be adjusted to a higher rate to ensure that you repay all your debt within the specified time frame. Also, your monthly payment amount may adjust accordingly with the annual changes in variable interest rate.

Extended Repayment Plan. This plan allows you to pay your loans off by making fixed monthly payments within 12 to 30 years. The actual time frame depends on the size of your loan. Smaller debts get shorter payoff times; whereas, larger debts may extend to up to 30 years. Monthly payments must be at least $50, but may be higher if you have greater debt. Also, your monthly payment may adjust annually with changes to the interest rate.

Graduated Repayment Plan. With this plan, you must repay your loan within 12 to 30 years. The actual time frame is determined by the size of your loan. Monthly payments will start off low, but will gradually increase, often, after the first two years. The size of your monthly payments must be more than 50 percent and less than 150 percent of what you would pay had you opted for a Standard Repayment Plan. Also, your monthly payment may adjust annually with changes to the interest rate.

Income Contingent Repayment Plan. This plan will adjust your monthly repayment amount according to the size of your loan, your family size, and your income. The actual amount will adjust along with changes to your income and family size. In order to calculate the actual monthly payment, your lender has to obtain necessary information from the IRS. Until then, your payment will be based on the amount of interest that has accrued on your debt. After 25 years, the portion of your unpaid loans will be forgiven.

Your lender will choose the appropriate repayment plan for you if you neglect to make your own decision. There are also alternative repayment options available for those who have proven to the Department of Education that there are special circumstances that make it difficult to comply with the existing plans listed above.

There are other issues regarding repayment. Firstly, you will not be penalized for prepaying your loan. Secondly, if you are 30 days late making a payment, then lenders may charge a late fee that should not exceed six cents for each late dollar owed. Thirdly, it is imperative to make your monthly payments even if you don't receive a reminder. It is your responsibility to ensure that your debts are being handled in a timely manner.

Which Loans May You Consolidate?

Ineligible Loans

There are some loans that cannot be consolidated, but may be used to determine the length of your repayment period under the Graduated and Extended Repayment Plans. These loans include:

* Primary Care Loans
* Medical Assist Loans
* Law Access Loans
* PLATO Loans
* Health Education Assistance Loans

Additionally, any other state or private loan that is not guaranteed by the federal government falls into this category.

Eligible Loans

The following loans may be consolidated:

* Federal Subsidized and Unsubsidized Federal Stafford Loans
* Direct Consolidation Loans and Federal Consolidation Loans
* Guaranteed Student Loans
* Federal Insured Student Loans
* Federal Supplemental Loans for Students
* Auxiliary Loans to Assist Students
* Federal Perkins Loans
* National Direct Student Loans
* National Defense Student Loans
* Health Professions Student Loans
* Loans for Disadvantaged Students
* Nursing Student Loans

If you would like to consolidate Direct PLUS and Federal PLUS Loans before graduating, your parent borrower may consolidate other eligible, non-PLUS loans, too.

The Repercussions of Late Payment

If you have missed payments, it is possible that you are delinquent or in Federal Student Loan Default. Delinquency happens when you miss one payment. Consistently missing more than one payment will place you in default.

The consequences of default are vast and harsh. If you are in default, your employer may withhold your earnings from you and give it to the U.S. Department of Education. You may be deemed ineligible for other federal student aid and loan deferments. The government may withhold your federal income tax refund. You may lose loan benefits; lower interest rate incentives; deference, forbearance, and repayment options; and your eligibility for future financial aid. In more extreme cases, you may bear the brunt of costly legal action and collection charges.

Additionally, because the Credit Bureau will be informed regularly about the amount, disbursement, and repayment status of your loans, they will know if you are in default with your monthly payments. If you are in default, you will suffer from negative credit, which may have severe and long-lasting repercussions.

Negative credit will determine whether lenders will loan you money on homes, car, credit cards, and so on. Having bad credit may exclude you from loans altogether and subject you to higher interest rates.

To be fair, before your lender discloses your default status to a credit bureau, they will give a 30-day advanced notice. During this time, you may request a review of your debt, and the Department of Education is obligated to address your concerns in a timely manner. If, however, you repay your late debt within those 30 days, you will be relieved from your default status and bad credit.

If your monthly payments are too high, you may prevent your loans from defaulting by changing your repayment option or applying for deferment and forbearance. These options will either lower your monthly payments or stop your monthly payments altogether. However, the trade-off would be an extended loan life and greater aggregate debt.

Circumstances that Discharge You from Loan Payment

You may be discharged from repayment if documentation is provided that proves that you have died or have been permanently and totally disabled. If you want to be discharged based on a disability, then you must submit and have your doctor certify a discharge application to the Direct Loan Servicing Center.

If you and a spouse applied for the consolidation loan jointly, then you will only be discharged from future payments if there is documentation that shows that both of you are dead or permanently and totally disabled. If you both agree that you are both permanently and totally disabled, then you both must submit and have your doctor(s) certify the discharge applications.

You are not considered disabled if you have a condition that existed before you applied for any of your consolidated loans. The only exception is if a doctor verifies that your health has taken a downward turn, worsening beyond hope and repair.

Sometimes, parts of your debt may be discharged. Partial-discharge may be applicable if the shut down of your school prevented you from finishing your course load, or if your school mistakenly verified your consolidation eligibility. Also, if your school fails to provide you with a required refund, then you will receive a discharge amount equal to the refund amount.

If you are undergoing bankruptcy and would like to be discharged from monthly payments, then you must prove your financial distress in bankruptcy court.

Who Can Consolidate?

Students

If you are an in-school borrower, you may consolidate upon graduation, provided you have eligible loans meeting the minimum consolidation requirements.

If you are an out-of-school borrower, you may consolidate if you have at least one direct loan or FFEL loan meeting the minimum consolidation requirements.

Parents

If you are an in-school parent borrower, you may qualify for consolidation if you have a PLUS loan meeting the minimum consolidation requirements.

If you are an out-of-school parent borrower who wants to consolidate, you may have only PLUS loans or have PLUS loans and other student loans that you are currently paying.

Married

Currently, joint consolidations are not allowed. If you consolidated with your spouse in prior years, you should realize that this is a joint consolidation. If you want deferment, forbearance, or discharge, both spouses must qualify. For example, you may not discharge consolidation simply because one of you dies or is permanently disabled. Both of you must die or be disabled in order to obtain discharge. If not, then the single borrower who survives carries the brunt of the financial burden.

Golden Rules from Business Visionaries

2007-03-22T20:06:00.000+05:30

Here's a transcript of an article in Business 2.0 where they asked 30 business visionaries, collectively worth over $70 billion, what single philosophy they swear by more than any other -- in business, life, or both. Here are the secrets of their success. They are a few golden nuggets in here.

Surround Yourself With People Smarter Than You
Chris Albrecht, CEO, Home Box Office
Surround yourself with people smarter than you and be comfortable with that. I went to a high school for gifted students and went from being one of the smartest kids in the class to being near the bottom of the pack. I got very comfortable with being in that situation and realizing how much I could learn from people who are as smart as or smarter than I am. Now that I'm running HBO, it's so important that the answers about how HBO continues its success come from the people sitting in the room with me. My job is to help guide them to the right answer.

George Steinbrenner, owner, New York Yankees
This is a rule that my late father, Henry George Steinbrenner II, taught me when I was a young man. Most young men listen to what their fathers say, but they do not always put their advice into play. I was no exception. I didn’t appreciate the lesson he taught me until it had slapped me in the face several times. I guess I was a slow learner.
Not only was my father an outstanding athlete, but he also graduated first in his class in naval architecture, preparing himself for a career in shipbuilding. Even in light of his achievements, I wanted to navigate my own way through the waters of my early career, whether they were smooth or stormy. Mistakes were made, but the wisdom of my father’s counsel finally sank in.
So I pass his advice along: Surround yourself with amazingly intelligent men and women. The people I work with not only are smarter than I am, possessing both intellectual and emotional intelligence, but also share my determination to succeed. I will not make an important decision without them.

Remember Who You Are, Not What
Brad Anderson, vice chairman and CEO, Best Buy
When a company starts its life, those who create it are very aware that it's a people-powered effort. They're a group of people with a good idea, trying to make something out of nothing. But as companies grow, something strange happens. They start to think of themselves in terms of what they are, rather than who they are. The irony is that just about every company that goes from "who" to "what" spends an extraordinary amount of energy fighting to regain that sense of "who." Trying, with apologies to Lennon and McCartney, to get back to where it once belonged.
Every organization gets its energy from the relationship between the customer and the person who serves that customer. If a company makes the leap -- honestly listening to customers -- employees will bring the best of themselves and pour their energy into their work. At Best Buy, we don't always get this right, but when we do, it's a beautiful thing. I can recite dozens of stories about employees who transformed our business because they saw a need and had the freedom to use their own talents to fill it.
Any organization is a human endeavor, but most big organizations work hard to dehumanize, to depersonalize. Why? They're scared, because we humans are unpredictable and messy. I say, Turn around and embrace it. Celebrate it. One of our employees said it best: Try to be "a company with a soul."

Make Hiring a Top Priority
Steve Ballmer, CEO, Microsoft
Not long after I joined Microsoft in 1980, Bill Gates put me in charge of recruiting. The business was growing fast, but we were badly understaffed. I asked Bill to approve the hiring of about 50 people. He said no. I told him I thought we needed more great people in order to grow; he thought I was going to bankrupt the company. Bill was pretty conservative. He's since said that he always wanted to have enough money in the bank to pay a year's worth of payroll, even if we didn't have any revenue coming in.
We didn't hire as fast as I wanted, but we did hire, and I did all the hiring myself for a long time. No one joined Microsoft without my interviewing them and liking them. I made every offer, decided how much to pay them, and closed the deals. I can't do that anymore, but I still invest a significant amount of time in ensuring that we're recruiting the best people. You may have a technology or a product that gives you an edge, but your people determine whether you develop the next winning technology or product.

If You Think You Can't, You're Right
Carol Bartz, CEO, Autodesk
Often I'm put in the position of persuading people to do something I want them to do, but they don't want to. So first I have to hear the "can'ts" -- the limitations they carry in their minds. I always listen closely to the reasons why people feel they can't do something. I'll even bring them to the point where they say to me, "Now you're getting it, boss! That's why we can't do it."
When I hear that, I've laid my trap. I start by asking the person who is resisting me to tell me how much he or she can do toward the goal I'm expressing. That's because I have this core belief that you can do anything if you try. That's why we release new versions of our core AutoCad program annually -- because when people say it can't be done, I say we can, we just don't know how. So we learn.
There are times, of course, when people convince me that something can't be done. I'm really just trying to get a balanced view, to get people to be honest about both sides. My rule helps me to do that. It's a gimmick, sure, but it's a way to help people avoid getting stuck in the negative.

Make Your Customers Your Sales Force
Marc Benioff, CEO, Salesforce.com
Why have a few hundred salespeople when you can have a few hundred thousand -- especially when those few hundred thousand aren't on the payroll? This idea, which proved to be one of the most important eureka moments for Salesforce.com, came to me while I was at Ozumo, a popular sushi bar in San Francisco, where I often go after work. I was dining with an important prospective client, and I was working hard to sell him on Salesforce.com and our future strategy when -- without any prompting -- an existing customer approached me and told me how successful his company had been with Salesforce.com. At that moment I realized that no amount of marketing or promotional gimmicks like T-shirts, buttons, and chocolate cigars would ever match that endorsement.
Word of mouth can make or break a product offering. While many companies have lost their market positions because of the well-known product failures they've experienced, just the opposite can also be true. It's important to note that the first step in building this groundswell depends on having a great product that customers love. By offering customers an opportunity to talk about their success, companies can create what author Malcolm Gladwell calls the "tipping point" -- a convergence that can propel a small company into a household brand. At Salesforce.com, this has meant developing our 308,000 subscribers into the biggest sales force in the business. Sure, our customers may be getting a free hamburger on us, but with their endorsements to prospects, we're getting the ketchup and mustard on top.

Reinvent Yourself. Repeat.
Alex Bogusky, executive creative director, Crispin Porter & Bogusky
I was 24, working at a small ad agency in Miami and trying to become a junior art director, when I read Positioning: The Battle for Your Mind, by Al Ries and Jack Trout. One chapter talked about how people position you or a product in their mind, and how you've got to disrupt to get people to take you out of that position.
I wondered, what kinds of things did I have to do to disrupt people and make them think differently about me? There is a lot of change in people and in their careers, and people are reluctant to see it. It's the way we think, the way we categorize things.
So I just embraced this notion that every six months I would radically change my look. I mostly did it with my hair, from a crew cut to a Mohawk to long hair to a mullet. I changed the color. It didn't matter what I did -- I just had to change it. I wanted people to have to take the trouble to reanalyze what I was offering.
I'm 42 now, and I've stopped. What does that mean? It means it isn't about me any longer. Now it's about the agency. Sometimes we change the titles of departments and people. We changed the planning department to the "cognitive anthropology" department, and the account service department to "content management." We have to change just as often, so that we're not being evaluated by the same standards as last year.

When People Screw Up, Give Them a Second Chance
Richard Branson, founder and chairman, Virgin Group
To be a good leader, you've got to concentrate on bringing out the best in your people. People are no different than flowers -- they need to be cared for and watered all the time. This is true whether it's a switchboard operator or the chairman who just gave a bad speech. I should know; I gave a bad speech last night. The point is, people know when they've fucked up, and they don't need bosses ramming it down their throats.
When I was 7 or 8, I took some change from my dad's drawer and went 'round to the sweet shop. The shopkeeper called my dad and said, "We've got your son here; could you come down?" Here I am, with 50 pence, and the shopkeeper says, "I assume your son has taken this, that you didn't give it to him?" My dad says, "How dare you accuse him of stealing!" My dad knew I'd taken it, and I gave it back -- but I never stole again.
Years later, when Virgin was about 20 people, the manager of a secondhand music shop tells me that one of our staffers is selling albums that were new from Virgin. It was petty theft. Rather than sacking him, I brought him in and we had a chat. Today he is the head of marketing of one of our companies and one of the best people Virgin has.

Check With the Wife
Po Bronson, author, The First $20 Million Is Always the Hardest and What Should I Do With My Life?
I would never want to be the kind of luminary who admits that my wife is smarter than me, but alas, I am, and she is. My wife owes me no deference at all, and so she never hesitates to tell me I'm being ridiculous. I tend to check with her at these three stages:
1. At the very beginning of an idea, when it's still so vague that if she does not like it, I can pretend I simply hadn't thought it through enough to present it well.
2. Right before completing a project, when I'm up against the deadline and I can pretend it's too late to change it even if she doesn't like it.
3. Before going on television, in case she thinks I should wear a different shirt

There Can't Be Two Yous
Warren Buffett, chairman and CEO, Berkshire Hathaway
When you get out of bed in the morning and think about what you want to do that day, ask yourself whether you'd like others to read about it on the front page of tomorrow's newspaper. You'll probably do things a little differently if you keep that in mind.

The Customer Should Always Be Happy
John Chambers, CEO, Cisco Systems
My golden rule is to focus almost fanatically on customer success. Living by this rule helped steer Cisco through the tremendous growth of the 1990s. It's allowed us to fine-tune our acquisition strategy and anticipate many challenges and market transitions to stay ahead of our competition.

Don't Be Interesting -- Be Interested
Jim Collins, management consultant; author, Built to Last and Good to Great
I learned this golden rule from the great civic leader John Gardner, who changed my life in 30 seconds. Gardner, founder of Common Cause, secretary of health, education, and welfare in the Johnson administration, and author of such classic books as Self-Renewal, spent the last few years of his life as a professor and mentor-at-large at Stanford University. One day early in my faculty teaching career -- I think it was 1988 or 1989 -- Gardner sat me down. "It occurs to me, Jim, that you spend too much time trying to be interesting," he said. "Why don't you invest more time being interested?"
If you want to have an interesting dinner conversation, be interested. If you want to have interesting things to write, be interested. If you want to meet interesting people, be interested in the people you meet -- their lives, their history, their story. Where are they from? How did they get here? What have they learned? By practicing the art of being interested, the majority of people can become fascinating teachers; nearly everyone has an interesting story to tell.
I can't say that I live this rule perfectly. When tired, I find that I spend more time trying to be interesting than exercising the discipline of asking genuine questions. But whenever I remember Gardner's golden rule -- whenever I come at any situation with an interested and curious mind -- life becomes much more interesting for everyone at the table.

He Who Says It, Does It
Simon Cooper, president and COO, Ritz-Carlton
I use this phrase whenever someone convinces me that they can achieve something I consider to be unachievable. In the past I've been known to add focus to a goal by making a bet to see if they can make it -- sometimes with amusing consequences. I remember being at a mountain resort in Canada and proposing an incredible goal for the season. The team convinced me that they could achieve it, and I offered to jump into the lake if they did. It's a long story, but they made it. There's a great scene of a hole being cut in the ice and an ambulance on standby while I gave a whole new meaning to the term "dunking." The cognac was very welcome.
One of the assets I look for in a team or a leader is a bias for action and a willingness to say "We can do it," coupled with a solid strategy. The way I interpret it, execution and commitment are absolutely essential to any strategy or initiative in an era too full of plans, processes, and procrastination. The expression speaks to the need for individuals and teams to commit to goals and actions and be willing to be held accountable for them. There is a flip side that goes something like "No one is more apathetic than in the pursuit of another person's objective."

Treat your customers like they own you, because they do.
Mark Cuban, co-founder, HDNet; owner, Dallas Mavericks

Educate and Obey Your Conscience
Stephen Covey, business consultant; motivational speaker; author, The 7 Habits of Highly Effective People
I have huge stacks of books that contain a lot of the wisdom literature from all sources, including the Koran and the Bhagavad Gita, the text in Hinduism and Buddhism. It helps me learn to listen to people and to empathize within their frame of reference. In other words, to free myself from my own agenda, and get into their agenda.
Be extremely open and get your security from a divine source rather than human approval. It frees you. It gives you great courage; it also gives you more wisdom.

Get Out From Behind Your Desk
Jim Goodnight, CEO, SAS
At any company, it's easy to get into a rut of spending your day reading e-mail and going to meetings. That's not a productive way of doing business.
I talk to people in the elevator and ask them what they're doing. I was talking to one of our heads of R&D and learned about a programming challenge they were facing with customer records. I said I'd write a procedure that does all the things we need to do and gave his team 20 lines of code.
My code ended up processing 100 million records. I wanted to challenge the programmers by showing them that, hey, if I can do this stuff, you can do this stuff. And I wanted to be able to converse with them at the basic, lowest level of programming on how this stuff works. I was so thrilled with what I'd done -- so proud, I guess -- that I gave seminars to all of our programmers on how to do it.

Learn to Give Back
Michael Graves, architect and designer
My parents told me that no matter how good you are in your work, you must make a contribution to society. Without that, you will only be selfish. My career has been an interesting mix of architecture, design, and education. I teach, which is a way to "give back" to the profession. I taught at Princeton University for 39 years and am gratified that many of my students have become teachers themselves.
But there's another way of giving back. Architecture and design are professions that inherently address the public good. Since I became partially paralyzed nearly three years ago, and spent considerable time in hospitals and rehabilitation centers, I have come to realize that some of those buildings are not functional at a basic human level and that durable medical equipment has rarely been regarded as anything but a necessary evil.
My colleagues and I can make a difference if we turn our attention to improving the functionality and appearance of the aids to living that many people need, even those with slight disabilities. We're working on a collection of them now, a contribution that I never expected but hope will make many people's lives more enjoyable.

Only the Paranoid Survive (Now More Than Ever)
Andy Grove, former chairman and CEO, Intel
By now most people in Silicon Valley know this is my mantra, but I'm not sure they know what it means. It isn't as crazy as it sounds; it's really a corollary to Murphy's Law, which states that everything that can go wrong will go wrong. If that's so, then the paranoid have an advantage.
I was always amused at how the phrase caught on -- and who wanted to be considered even more paranoid than I am. Once, when I was receiving an honor at Harvard University, Bill Gates was saying some nice things about me on a video and said he had only one quibble: that he was the most paranoid.
I think the rule is more relevant than ever today. The U.S. economy is getting hollowed out, industry by industry. Health care is about to become one-sixth of the U.S. economy, and yet for the most part it's an industry that has never taken advantage of digital technology. Our country's infrastructure is fragile, even precarious. Just look at New Orleans. So I would say, Duh. We'd better be paranoid.
I know I am. But not about Intel. One of the benefits of no longer being the company's chief "paranoid" officer is that someone else gets to do that now.

Once a Day, Take Some "Beach Time"
Mireille Guiliano, CEO and president, Clicquot; author, French Women Don't Get Fat
We have to take "beach time" -- a space for ourselves -- every day because we live in a world of burnout. Even if you take 20 to 30 minutes for yourself, you'll be a better worker, a better colleague, a better person. It benefits the people around you as much as it benefits you. Don't feel guilty to do your own thing during that time. And I don't necessarily mean going to the gym. I never go to the gym. I have a view of one across the street from where I live in New York. It's 7:30 at night, when you should be thinking about dinner and relaxing, and the gym is full of people.
I take my beach time each morning. I have a glass of water, and I walk along Bank Street to the Hudson River. A walk is the cheapest and best exercise, and it's the best 20 minutes of my day. It's an element of what I call "French Zen."

Believe in Something Bigger Than Yourself
Carlos M. Gutierrez, U.S. secretary of commerce; former chairman and CEO, Kellogg
My experience and observation have shown that if people see you looking out only for your own best interests, they won't follow you. You have to believe in doing good for those you serve, knowing that it will allow them to do extraordinary things. Another important lesson I learned from my father, who was the first great leader I observed. He taught me that you have to keep your perspective and have a sense of humility. As he used to say, "Tell me what you brag about, and I'll tell you what you lack."

Never Bow to Precedent
Gary Hamel, business consultant and author
Near the end of my Ph.D. program at the University of Michigan, a veteran professor took me aside and proffered these words of advice: "Gary, the surest way to get tenure is to build on someone else's well-established theory, churn out as many articles as you can for leading journals, and avoid the temptation to do consulting, as this will only divert you from your research." As I absorbed this bit of sagacity, I had to work to keep from frowning. "Hmmm," I thought, "that might be the way to get promoted, but it sounds like a recipe for creative suicide."
So in an act of rebellion, I signed up for a consulting project at General Electric while still a doctoral student (jeez, did I learn a lot), hooked up with a similarly contrarian-minded professor, C.K. Prahalad, and started working on the first of what would become 15 articles for the Harvard Business Review and two books. And as I looked around for role models and mentors, it quickly became obvious that the people who had really made a difference in the world of management -- from Frederick Winslow Taylor to Mary Parker Follett, W. Edwards Deming to Taiichi Ohno -- were all rebels. Constructive rebels, but rebels nonetheless.
As the pace of change accelerates, the value of precedent will continue to wane. Today the most important thing is to regard everything you believe as nothing more than a set of hypotheses, forever open to being disproved. A healthy disrespect for precedent is the ultimate advantage in a world where the future is less and less an extrapolation of the past. By the way, being a contrarian is usually not as risky as the custodians of convention typically make out. Somewhere along the way, I got tenure.

You Can't Cheat an Honest Man
Phil Hellmuth, poker world champion
What we do as poker players is read people. People lie to us; they try to bluff us constantly. So we get used to trying to sort out all the bullshit. When I get pitched by people who are really good, like con men, they are not as good as the poker players.
You can't cheat an honest man. I don't know exactly why that is, but it's true for me. My honor is unquestioned in poker, and if you have perfect honor in poker, it's better than having it anywhere else in life because everyone remembers everything from 15 or 20 years ago. If you cheated then, they'll remember.

Don't confuse luck with skill when judging others, and especially when judging yourself.
Carl Icahn, billionaire investor

Conventional Wisdom Is Always Wrong
Paul Jacobs, CEO, Qualcomm
The downside of this rule is that no one will believe you, so you'll need to work much harder to sell your idea. The upside is that everyone else will be running in the wrong direction, so you'll have a more open field in which to innovate. Find the incorrect underlying assumptions and you'll create opportunities.

Make Deals With People, Not Paper
Penn Jillette, magician, author, and producer
This was the hardest thing to learn when I was 19. When we first started doing Penn & Teller shows, I thought that if you had a contract, it was enforced. I thought there were the contract police -- so you'd sign a contract that says you're going to give me a million dollars, and if you don't have a million dollars, someone will step in and give me my million anyway. Right.
That's one of the hardest lessons for a guy like me who has no interest in business but now runs a multimillion-dollar enterprise. A contract is not much of a legal document. It's just an agreement that two people who trust each other have made. You can't enter into a contract with anyone that you wouldn't make a handshake deal with, because everything comes down to a handshake deal.
The more experience I got in showbiz, the less I read the contracts. Now I don't bother. If I can't make the deal in a phone call, and have them understand it, then it's not a worthwhile deal. You're making a deal with the people, not with the contract. That's a mistake that people make a lot: "We've got it in writing now." The contract is clarification, but it's not enforcement.

Get Your Timing Right
Ray Kurzweil, inventor and entrepreneur
I had the idea that I would be an inventor when I was 5 years old. Now, 52 years later, I still fashion myself an inventor. After some youthful experiments, I realized that the key to a successful invention is timing. Many inventors succeed in getting their contraptions to work, yet most inventions still fail in the marketplace because the enabling factors needed for success are not in place when they're needed.
With this in mind, I became an ardent student of technology trends over 30 years ago. Now I have a team of researchers who assist me in gathering key measures of information technology in a variety of fields. In addition to timing my inventions, the technology trend models derived from this data enable me to create long-term forecasts of what will be feasible with the information tools of 10 or 20 or 30 years from now and beyond. I say this not just looking backward now but with a track record of accurate predictions in a series of books going back about two decades.

Thou Shalt Not Covet Thy Competitor's Success
Geraldine Laybourne, chairman and CEO, Oxygen Media
When I was at Nickelodeon, we had 10 commandments whenever we started a new business. To me, the most important one was "Thou shalt not covet thy neighbor's wife, thy neighbor's donkey, or thy competitor's success."
This is especially true in television, where so many people just keep their eye on what the other networks are doing. They'll try to find the next Desperate Housewives, but the look-alikes never amount to a whole lot. I've done that a couple of times and fallen flat on my face. So I try not to get distracted by what worked for others.
I always have an eye on the competition, but it's not to do what they're doing. It's to see where the holes are. I've built businesses by looking at conventional wisdom and going exactly the opposite way.

Business Can't Trump Happiness
Shelly Lazarus, chairman and CEO, Ogilvy & Mather Worldwide
I am constantly asked by women how to balance careers with family. I know from experience that there is no silver-bullet answer; if there were, we would be seeing more women in the corner office. The truth is that balance is achieved through a host of individual dance steps, from being willing to suffer a little domestic chaos to insisting that performance be measured by results, not just time spent in the office. Unless you love your work, you won't find the balance. How can you, if you resent the time away from family spent at a tedious job? I fell into a job and a company I loved. I never wanted to leave and never worried that my family suffered for it. Finding fulfilling work should be an early and deeply pursued part of everyone's career path. This may sound soft and mushy, but happy people are better for business. They are more creative and productive, they build environments where success is more likely, and you have a much better chance of keeping your best players.

Don't Trust, Just Verify
Steven D. Levitt, coauthor, Freakonomics
There's something bad in everything good and something good in everything bad.
Michael Lewis, author, Liar's Poker, Moneyball, and Coach: Lessons on the Game of Life
So much of what we hear and what we're taught turns out to be false on closer scrutiny. Whether it is expert advice, what you read in the paper, or what your mother told you, if it is important, take the time to figure out for yourself whether it is really true

Share and Share Alike
Scott McNealy, founder and CEO, Sun Microsystems
You learn to share in preschool. Later you learn that if you make the pie bigger, everyone gets a little more. These lessons came together when we started Sun. We didn't have the resources to do everything ourselves, so we shared what we had to attract customers and get their help in building the business. There are now 4.5 million Java developers and about 950 companies worldwide all collaborating on a technology Sun shared with the community.
This is possible because sharing creates communities, which create new markets. It's also changing business models: Companies can no longer expect to lock in customers with proprietary standards. They must now compete on the value of their business execution. They monetize that value a little bit, spread over the entire community. With 1 billion people on the network today, and several million more joining every week, there's a lot of opportunity. So while it may seem counterintuitive for a company to share, it's the key to larger economic growth -- not only for Sun, but for everyone in the world

Get Face Time With the Customers
Anne Mulcahy, chairman and CEO, Xerox
Xerox's founder, Joe Wilson, used to always say this, and it's become my own golden rule. The way I see it, if you forget the customer, nothing much else matters. The brand deteriorates, employees lose jobs, and shareholders lose value.
My mantra around Xerox is to ensure that the customer is connected to everything we do. It's why every senior leader -- from our head of human resources to our general counsel -- is assigned a customer account to cover.
I remember getting on the elevator one morning at headquarters around the time of a quarterly earnings report, and our chief accountant stepped in right before the door closed. I started to ask him how the numbers were looking, but he was more interested in debriefing me on a customer call he'd just made in Louisiana. Our elevator ride turned into a longer discussion about billing resolutions for this customer (though I did finally get the analysis of our earnings numbers out of him).
This is why I make hundreds of customer calls each year. Hearing firsthand from our customers about their relationships with Xerox changes my perspective on the toughest of business decisions

Choose Your Mistakes Carefully
Craig Newmark, founder, Craigslist
When someone points out a mistake to you, deal with it -- don't go into denial. When I started running Craigslist, I made some serious goofs in hiring the wrong people, people whom I shouldn't have trusted. As a result, though, I eventually found a guy who's become a really good CEO and who has great judgment in hiring. I realized I wasn't a good manager, so I got out of the way.
I also issued stock to employees, not thinking it would be worth anything. Big mistake -- eBay was able to buy a 25 percent stake in Craigslist from a former employee. But eBay turned out to be a good partner; we share a similar moral compass

Maximize the Compromises
Hans-Olov Olsson, chairman, Volvo Cars; senior vice president and chief marketing officer, Ford Motor
Maximize the compromises; otherwise you do not win in global business. My education along this path began during the six years I served as president of Volvo Cars in Japan. In Japanese culture, you do not allow one party in a negotiation to lose face. Trust grows from an honorable exchange, when everyone walks away from the table feeling good about a deal. To do that I had to master the art of listening. Actually, I thought I was a good listener before I went to Japan. Once there, I discovered that listening is not only about words but about observing body language and the nuances of give and take. Compromise, in Japan, springs from empathy.
I left Japan and moved to Brussels to head up Volvo Cars in Europe. Compromise is necessary in Europe as well, but it demands a different set of skills there. The cultures of Europe are extremely independent and rooted in their respective identities. Consider how difficult it has been to form a European Union and you get a sense of the obstacles to reaching consensus on any marketing strategy. Maximizing a compromise, however, does not mean losing yourself so that you can please others. You have to be fully yourself; never pretend to be someone else. From that position of strength, create a win-win solution for all parties. Then be very disciplined in the follow-up so that you leave nothing unanswered.

Whatever a Man Soweth, That Shall He Also Reap
Dick Parsons, chairman and CEO, Time Warner
This came from my grandmother, and it was the best advice I ever got. If I think of anything on a daily basis, in terms of a moral compass, that is the one. You treat people the way you want to be treated. If you treat everyone with respect, somehow it comes back to you. If you are honest and aboveboard, somehow it comes back to you

Never, Ever Forget That You Are a Servant
David Neeleman, founder, chairman, and CEO, JetBlue USA
My grandfather ran a general store, and if a customer needed something that wasn't in stock, he did whatever it took to get the item -- even running across the street to a competitor -- rather than ask the customer to take her business elsewhere. He never told me, "Take care of others, and they'll take care of you" -- he didn't have to. I saw it happen.
When I entered the aviation business, I never thought in terms of "passengers" or "tickets sold" but of "people" and "customers." It was distressing to hear airline colleagues complain about the customers -- even going so far as to say how much easier it would be for them if there were fewer passengers.
When JetBlue started flying in February 2000, my goal was to bring humanity back to air travel. We hire nice people and train them in the skills they require to help run the airline. I don't think you can train someone to be nice. We are all servants in the best sense of the word, which brings amazing personal and professional rewards.

Jim Press, president, Toyota Motor Sales USA
I really consider myself a servant leader. A servant leader works for his dealer network, for the associates in his organization, and for his customers. I mean, from a business point of view, if you put the customer ahead of all else, you’ll never make a wrong decision.
That’s the premise I worked from in deciding to keep a brand-new technology out of the current Prius. It was a remote information screen in the dashboard that operated via the driver using a mouse instead of by touch -- and it offered some clear advantages. It could be placed farther away from the driver, leaving the interior feeling roomier. Fingerprints wouldn’t mark up the screen. Plus the technology could save the company money because it’s cheaper and simplifies the interior’s design challenges.
But you have to keep asking yourself, Is this innovation customer-friendly? And this one wasn’t. I remember attending the demonstration in our parking lot and thinking, It may be better for the company, but who wants to concentrate on a mouse while you’re driving a car? I said this isn’t customer driven; we can’t do it, although perhaps in the future there might be advances that will help us find a way to make it work. Then I walked away, and that was the end of that. Instead we arrived at a setup that worked for everyone.

Learn to Trust Your Gut
Paul Pressler, CEO and president, Gap
I learned this from one of my first bosses, a legend in the toy industry named Bernie Loomis. I watched every decision he made, and it wasn't so much what he decided as how he made the decision. Like most executives, Bernie was informed by financials, input from his team, and insights from customers. But he didn't always follow what appeared to be the most logical path -- he once sold empty boxes at Christmas, with the promise of a blockbuster toy to come later.
I once asked Bernie how he came to a particular decision that seemed like a strange choice. He told me, "I have no idea. I just knew what I felt in my gut." As it turned out, his gut was almost always right.
Few business decisions are black and white. That's why you surround yourself with smart people and listen to different points of view. But when it's time to make the call, I rely on my instincts. Whenever I haven't done this, it's ended up being a mistake.
A career is a collection of experiences to get your gut ready. It's the accumulation of knowledge from successes and failures that helps you to see what's possible and build something great.

The Next Big Thing Is Whatever Makes the Last Big Thing Usable
Blake Ross, co-creator, Firefox
When Firefox began, the browser market was "dead," client software was "outdated," and many entrepreneurs were working on podcasting tools for goldfish and other "next big things." We focus on the everyday problems that nag at everyday people. There are more than enough to go around without imagining new ones.

Be a Problem-Solver
Hector Ruiz, CEO, AMD
In a race for more megahertz, we forgot to ask if customers really needed higher processor speeds to get better performance. It turns out they didn't. In introducing wholly new chip architectures, chipmakers forgot to ask if customers were willing to replace software and auxiliary hardware. It turns out they weren't. Innovation is only worthwhile if it is focused on solving real-world problems.

Loyalty Counts as Much as Smarts
Srivats Sampath, founder, McAfee.com; CEO and president, Mercora
Starting and building a company is like going into battle -- and I always prefer to go into battle with a team that is loyal to one another and to the cause. At Mercora, most of us have worked together for six to 10 years, and the trust and loyalty we have for one another makes an extremely difficult task enjoyable.

Hard Work Opens Doors
Ivan Seidenberg, chairman and CEO, Verizon
My first boss -- he was the building superintendent, and I was a janitor -- watched me sweep floors and wash walls for almost a year before he mentioned that I could get tuition for college if I got a job with the phone company. When I asked him why he'd waited so long, he said, "I wanted to see if you were worth it." The message: Work hard, have high standards, and stick to your values, because somebody's always watching.

Be the Person Who Steps Up
George Shaheen, CEO, Siebel Systems
Approach what you do as a leader, not a participant. I'm talking about life. It doesn't matter whether you are trying to run a huge company, your family, a church choir, or the Indian Princess outing at your kid's school. You will see that the most successful people are the ones who approach whatever they do with the mind-set and qualities of a leader. This means you need a vision for the outcome of what you're doing, you must have the courage to act on your vision, and you have to execute.
I grew up in a small farm town in central Illinois. There were 49 kids in my high school, and at that time, many of us who did go to college flunked out. And the ones who flunked did so because of poor English skills. So our English teacher, Helen Mess, began tutoring us in themed writing in her home three nights a week. Three nights a week! She acted like a leader: She saw a problem, and she had a vision for how to fix it. But she didn't ask for extra money, or for any programs from the government. She just said, "Come to my house." That took courage. And she executed: Fewer of us flunked out.

Those Who Don't Know Their Own History Are Doomed to Repeat It
Ram Shriram, angel investor and Google board member
I wish I had kept a personal diary from day one of my career. But I did get started in 1996, so I've at least documented the most recent history of my own follies and foibles. It's intended not to correct personality flaws or change behavior -- or even worse, self-flagellate -- but rather to serve as a guide to the numerous aspects of running a business while avoiding the minefields of the past. For some things there is no substitute for experience-based knowledge, and documenting it ensures that we'll always remember it.

What Gets Measured Gets Managed
Stan Sigman, CEO, Cingular Wireless
Whether you're a network engineer responsible for making sure calls are completed or a marketing manager responsible for a new product, you need to know how to measure your success. That's how we do business at Cingular, and that's how we will reach our goal of being the most highly regarded wireless company in the world.

Quit Taking, Start Giving
Russell Simmons, co-founder, Def Jam Records; founder, Rush Communications
You get a lot of benefit from giving, not from taking. You have to fill a void, give people something that's meaningful and useful. If it's an entrepreneurial venture, find what people need and give it to them. Give them something that's lasting. Be careful not to take a shortcut or give people what they think they need. My latest venture, UniRush Financial Services, offers a real benefit for people who are struggling. It's for people who are mostly locked out of the system, and they need it to get on their feet. It's not a way to exploit them because they are on their knees. It's a way to pick them up

At the Height of Success, "Break" Your Business
Ed Zander, chairman and CEO, Motorola
Companies that don't innovate don't survive, so the key to success is driving this innovation. This lesson is especially important to remember when things are going well. Though it's counterintuitive, successful companies actually need to be more innovative than the competition. It's like kids playing king of the hill -- everyone aims for the kid at the top. Leaders that don't innovate are displaced by those willing to take risks.
This is why, when a company reaches the height of its success, a good leader will shake things up by "breaking" the business. One example of this is moving people around. Changing the company's organizational structure allows different people to interact and allows new, innovative ideas to take shape.
Every day I look for ways to break Motorola. Employees are excited to come to work every day because they, too, live, breathe, and imagine the next big thing. Breaking the business may sound like a strange thing for a CEO to do, but this strategy has sparked innovation at Motorola and it is the reason for our success.

Business Is Not About Ideas, It's About Initiatives
Sergio Zyman, marketing expert
My golden rule of business is action. Ideas are nice, but initiatives move the business forward. Businesses must move forward and grow. If you are not achieving growth, you are not being successful -- no matter how good your ideas are.
It may sound harsh, but this is not the Doris Day school of life -- a "Que Sera, Sera" attitude is not rewarded. I have a reputation for being an abrupt kind of guy. Since my days at Coca-Cola, there has been a perception that I am incredibly demanding -- and it's true. I like people who can "point and shoot" when it comes to getting done what needs to happen. Business is not about ideas; it's about initiatives and strategies. So cut all the niceties and pleasantries that really, in the end, drive you nowhere and focus on what keeps the business moving and growing.
Remember the "Mean Joe Greene" ad from Coca-Cola, and how warm and fuzzy it was? Everyone loved watching that ad while they drank Pepsi. I killed that ad because it did not help sell more Coca-Cola. It's about driving growth, not entertainment. In today's business environment, everyone's destination must focus only on growth and making sure you have the right tools and team in place to achieve that. You have to be a growth insurgent to achieve growth, constantly attacking competitors' weaknesses and winning the hearts and minds of the consumer.

Google Engineers Never Sleep.....zzz

2007-03-21T23:41:00.000+05:30

"Google engineers never sleep, or at least that's the way it seems given the constant stream of new and improved features that have been appearing at various Google sites.
Beyond rolling out Google Desktop 5 Beta this week, they've just added the ability for those with Google Local business listings to upload photos of their business to Google Maps.
They've also integrated a Community Search feature into Google's online photo service Picasa, raised the storage allotment to 1 gigabyte, and simplified linking to photos or albums.
They've also improved Google Finance by adding videos, the ability to plot extended hours market data on charts, and portfolio sorting options.
And they're currently testing the addition of keyword search volume statistics for AdWords users. Such data is highly valuable when trying to decide whether, for example, "free" or "expensive" makes a better search term to buy. "

Learning From the West : Speech By Narayana

2007-03-16T02:24:00.000+05:30

Ladies and gentlemen:
It is a pleasure to be here at the Lal Bahadur Shastri Institute of Management. Lal Bahadur Shastri was a man of strong values and he epitomized simple living. He was a freedom fighter and innovative administrator who contributed to nation building in full measure. It is indeed a matter of pride for me to be chosen for the Lal Bahadur Shastri Award for Public Administration and Management Sciences. I thank the jury for this honor.

When I got the invitation to speak here, I decided to speak on an important topic on which I have pondered for years - the role of Western values in contemporary Indian society. Coming from a company that is built on strong values, the topic is close to my heart. Moreover, an organization is representative of society, and some of the lessons that I have learnt are applicable in the national context. In fact, values drive progress and define quality of life in society. The word community joins two Latin words com ("together" or "with") and unus ("one"). A community, then, is both one and many. It is a unified multitude and not a mere group of people.

As it is said in the Vedas: Man can live individually, but can survive only collectively. Hence, the challenge is to form a progressive community by balancing the interests of the individual and that of the society. To meet this, we need to develop a value system where people accept modest sacrifices for the common good.

What is a value system? It is the protocol for behavior that enhances the trust, confidence and commitment of members of the community. It goes beyond the domain of legality - it is about decent and desirable behavior. Further, it includes putting the community interests ahead of your own. Thus, our collective survival and progress is predicated on sound values.
There are two pillars of the cultural value system - loyalty to family and loyalty to community. One should not be in isolation to the other, because, successful societies are those which combine both harmoniously. It is in this context that I will discuss the role of Western values in contemporary Indian society.

Some of you here might say that most of what I am going to discuss are actually Indian values in old ages, and not Western values. I live in the present, not in the bygone era. Therefore, I have seen these values practiced primarily in the West and not in India . Hence, the title of the topic.

I am happy as long as we practice these values - whether we call it Western or old Indian values. As an Indian, I am proud to be part of a culture, which has deep-rooted family values. We have tremendous loyalty to the family. For instance, parents make enormous sacrifices for their children. They support them until they can stand on their own feet. On the other side, children consider it their duty to take care of aged parents.

We believe: Mathru devo bhava - mother is God, and pithru devo bhava - father is God.

Further, brothers and sisters sacrifice for each other. In fact, the eldest brother or sister is respected by all the other siblings. As for marriage, it is held to be a sacred union - husband and wife are bonded, most often, for life. In joint families, the entire family works towards the welfare of the family. There is so much love and affection in our family life.
This is the essence of Indian values and one of our key strengths. Our families act as a critical support mechanism for us. In fact, the credit to the success of Infosys goes, as much to the founders as to their families, for supporting them through the tough times. Unfortunately, our attitude towards family life is not reflected in our attitude towards community behavior. From littering the streets to corruption to breaking of contractual obligations, we are apathetic to the common good. In the West - the US , Canada , Europe , Australia , New Zealand - individuals understand that they have to be responsible towards their community.

The primary difference between the West and us is that, there, people have a much better societal orientation. They care more for the society than we do. Further, they generally sacrifice more for the society than us. Quality of life is enhanced because of this. This is where we need to learn from the West.

I will talk about some of the lessons that we, Indians, can learn from the West. In the West, there is respect for the public good. For instance, parks free of litter, clean streets, public toilets free of graffiti - all these are instances of care for the public good. On the contrary, in India , we keep our houses clean and water our gardens everyday - but, when we go to a park, we do not think twice before littering the place.

Corruption, as we see in India , is another example of putting the interest of oneself, and at best that of one's family, above that of the society. Society is relatively corruption free in the West. For instance, it is very difficult to bribe a police officer into avoiding a speeding ticket.
This is because of the individual's responsible behavior towards the community as a whole On the contrary, in India , corruption, tax evasion, cheating and bribery have eaten into our vitals. For instance, contractors bribe officials, and construct low-quality roads and bridges. The result is that society loses in the form of substandard defence equipment and infrastructure, and low-quality recruitment, just to name a few impediments. Unfortunately, this behavior is condoned by almost everyone.

Apathy in solving community matters has held us back from making progress, which is otherwise within our reach. We see serious problems around us but do not try to solve them. We behave as if the problems do not exist or is somebody else's. On the other hand, in the West, people solve societal problems proactively. There are several examples of our apathetic attitude. For instance, all of us are aware of the problem of drought in India .

More than 40 years ago, Dr. K. L. Rao - an irrigation expert, suggested creation of a water grid connecting all the rivers in North and South India , to solve this problem. Unfortunately, nothing has been done about this. The story of power shortage in Bangalore is another instance. In 1983, it was decided to build a thermal power plant to meet Bangalore 's power requirements. Unfortunately, we have still not started it. Further, the Milan subway in Bombay is in a deplorable state for the last 40 years, and no action has been taken. To quote another example, considering the constant travel required in the software industry; five years ago, I had suggested a 240-page passport. This would eliminate frequent visits to the passport office. In fact, we are ready to pay for it. However, I am yet to hear from the Ministry of External Affairs on this.
We, Indians, would do well to remember Thomas Hunter's words:

Idleness travels very slowly, and poverty soon overtakes it.

What could be the reason for all this? We were ruled by foreigners for over thousand years. Thus, we have always believed that public issues belonged to some foreign ruler and that we have no role in solving them. Moreover, we have lost the will to proactively solve our own problems. Thus, we have got used to just executing someone else's orders. Borrowing Aristotle's words:

We are what we repeatedly do. Thus, having done this over the years, the decision-makers in our society are not trained for solving problems.

Our decision-makers look to somebody else to take decisions. Unfortunately, there is nobody to look up to, and this is the tragedy.
Our intellectual arrogance has also not helped our society. I have traveled extensively, and in my experience, have not come across another society where people are as contemptuous of better societies as we are, with as little progress as we have achieved. Remember that arrogance breeds hypocrisy. No other society gloats so much about the past as we do, with as little current accomplishment.

Friends, this is not a new phenomenon, but at least a thousand years old. For instance, Al Barouni, the famous Arabic logician and traveler of the 10th century, who spent about 30 years in India from 997 AD to around 1027 AD, referred to this trait of Indians. According to him, during his visit, most Indian pundits considered it below their dignity even to hold arguments with him. In fact, on a few occasions when a pundit was willing to listen to hm, and found his arguments to be very sound, he invariably asked Barouni: which Indian pundit taught these smart things!

The most important attribute of a progressive society is respect for others who have accomplished more than they themselves have, and learn from them. Contrary to this, our leaders make us believe that other societies do not know anything! At the same time, everyday, in the newspapers, you will find numerous claims from our leaders that ours is the greatest nation. These people would do well to remember Thomas Carlyle's words:

The greatest of faults is to be conscious of none. If we have to progress, we have to change this attitude, listen to people who have performed better than us, learn from them and perform better than them.

Infosys is a good example of such an attitude. We continue to rationalize our failures. No other society has mastered this part as well as we have. Obviously, this is an excuse to justify our incompetence, corruption, and apathy. This attitude has to change. As Sir Josiah Stamp has said:

It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.

Another interesting attribute, which we Indians can learn from the West, is their accountability. Irrespective of your position, in the West, you are held accountable for what you do. However, in India , the more 'important' you are, the less answerable you are. For instance, a senior politician once declared that he 'forgot' to file his tax returns for 10 consecutive years - and he got away with it. To quote another instance, there are over 100 loss making public sector units (central) in India . Nevertheless, I have not seen action taken for bad performance against top managers in these organizations. Dignity of labor is an integral part of the Western value system. In the West, each person is proud about his or her labor that raises honest sweat. On the other hand, in India , we tend to overlook the significance of those who are not in professional jobs. We have a mind set that reveres only supposedly intellectual work.

For instance, I have seen many engineers, fresh from college, who only want to do cutting-edge work and not work that is of relevance to business and the country. However, be it an organization or society, there are different people performing different roles. For success, all these people are required to discharge their duties. This includes everyone from the CEO to the person who serves tea - every role is important. Hence, we need a mind set that reveres everyone who puts in honest work.

Indians become intimate even without being friendly. They ask favors of strangers without any hesitation. For instance, the other day, while I was traveling from Bangalore to Mantralaya, I met a fellow traveler on the train. Hardly 5 minutes into the conversation, he requested me to speak to his MD about removing him from the bottom 10% list in his company, earmarked for disciplinary action. I was reminded of what Rudyard Kipling once said:

A westerner can be friendly without being intimate while an easterner tends to be intimate without being friendly.

Yet another lesson to be learnt from the West, is about their professionalism in dealings. The common good being more important than personal equations, people do not let personal relations interfere with their professional dealings. For instance, they don't hesitate to chastise a colleague, even if he is a personal friend, for incompetent work.
In India , I have seen that we tend to view even work interactions from a personal perspective. Further, we are the most 'thin-skinned' society in the world - we see insults where none is meant. This may be because we were not free for most of the last thousand years. Further, we seem to extend this lack of professionalism to our sense of punctuality. We do not seem to respect the other person's time. The Indian Standard Time somehow seems to be always running late. Moreover, deadlines are typically not met. How many public projects are completed on time? The disheartening aspect is that we have accepted this as the norm rather than the exception. In the West, they show professionalism by embracing meritocracy. Meritocracy by definition means that we cannot let personal prejudices affect our evaluation of an individual's performance. As we increasingly start to benchmark ourselves with global standards, we have to embrace meritocracy.

In the West, right from a very young age, parents teach their children to be independent in thinking. Thus, they grow up to be strong, confident individuals. In India , we still suffer from feudal thinking. I have seen people, who are otherwise bright, refusing to show independence and preferring to be told what to do by their boss. We need to overcome this attitude if we have to succeed globally. The Western value system teaches respect to contractual obligation. In the West, contractual obligations are seldom dishonored. This is important - enforceability of legal rights and contracts is the most important factor in the enhancement of credibility of our people and nation.

In India , we consider our marriage vows as sacred. We are willing to sacrifice in order to respect our marriage vows. However, we do not extend this to the public domain. For instance, India had an unfavorable contract with Enron. Instead of punishing the people responsible for negotiating this, we reneged on the contract - this was much before we came to know about the illegal activities at Enron. To quote another instance, I had given recommendations to several students for the national scholarship for higher studies in US universities. Most of them did not return to India even though contractually they were obliged to spend five years after their degree in India .

In fact, according to a professor at a reputed US university, the maximum default rate for student loans is among Indians - all of these students pass out in flying colors and land lucrative jobs, yet they refuse to pay back their loans. Thus, their action has made it difficult for the students after them, from India , to obtain loans. We have to change this attitude.

Further, we Indians do not display intellectual honesty. For example, our political leaders use mobile phones to tell journalists on the other side that they do not believe in technology! If we want our youngsters to progress, such hypocrisy must be stopped. We are all aware of our rights as citizens. Nevertheless, we often fail to acknowledge the duty that accompanies every right. To borrow Dwight Eisenhower's words:

People that values its privileges above its principles soon loses both.

Our duty is towards the community as a whole, as much as it is towards our families.
We have to remember that fundamental social problems grow out of a lack of commitment to the common good. To quote Henry Beecher:

Culture is that which helps us to work for the betterment of all.

Hence, friends, I do believe that we can make our society even better by assimilating these Western values into our own culture - we will be stronger for it.
Most of our behavior comes from greed, lack of self-confidence, lack of confidence in the nation, and lack of respect for the society. To borrow Gandhi's words:

There is enough in this world for everyone's need, but not enough for everyone's greed. Let us work towards a society where we would do unto others what we would have others do unto us. Let us all be responsible citizens who make our country a great place to live.

In the words of Churchill:

Responsibility is the price of greatness. We have to extend our family values beyond the boundaries of our home.

Finally, let us work towards maximum welfare of the maximum people - Samasta janaanaam sukhino bhavantu. Thus, let us - people of this generation, conduct ourselves as great citizens rather than just good people so that we can serve as good examples for our younger generation.

- Speaker : N R Narayana Murthy

A similar viewpoint is exhibited on the Enterprise Resilient Management Blog