A Utah Incubator Hatches Student Startups

By Sommer Saadi and John Tozzi

Oliver Munday

While in college and working part-time at a specialty market in downtown Salt Lake City buying gourmet chocolates and olive oils, Nick Frappier lined up the contacts and funding to start his own specialty food importer. The 22-year-old fine arts major had been in business more than a year when he realized this spring that he lacked the first clue about how to run a company. "I might have had the groundwork laid, but I had no idea what I was doing," he says.
So when he got his degree in May, Frappier joined the inaugural class at the Foundry, the University of Utah's new business incubator. In one summer his company, A Priori, went from 12 clients to 40 and brought in $93,000 in sales, more than double what he'd made in the first 14 months of business. The college hopes the Foundry's blend of management training and peer mentoring will help hundreds of students turn their ideas into viable companies.
The Foundry, launched in May, has already seen 29 teams create 18 registered businesses that together have generated $220,000 in revenue. (Frappier's company accounts for more than one third.) Among the other successes are software startup Novobi and Sundial Technologies, which is developing a frozen gel-coated spoon used to cool hot liquids. Foundry businesses have already created 22 full-time, paying jobs, including those of 10 company founders.
The incubator is part of a year-old effort at the University of Utah's David Eccles School of Business to "reboot the entrepreneurship program" around practical experience, says Rob Wuebker, Frappier's entrepreneurship professor and the incubator's faculty adviser. During the summer, 66 students working on 29 ventures shared the 3,500-square-foot downtown office. The school's goal: Give young entrepreneurs a network to help their businesses succeed. "Having, say, 15 early-stage companies in one place, there'll be a lot of cross-fertilization of ideas," says Dinesh Patel, managing director of vSpring Capital, a $400 million venture capital firm in Salt Lake City. "For a student that would be a huge advantage."
Eccles Dean Taylor Randall says students' interest in starting businesses has spiked because grads have a harder time finding work with the national unemployment rate at 9.6 percent. "If companies aren't going to hire students, we'll help [students] create the jobs," Randall says.
Demand for Wuebker's entrepreneurship classes on campus is so great that his room typically packs in double the 35 students on the official roster. Everyone who shows up has to work on a real business. In May he and Randall decided to turn a downtown space the university used for lectures and offices into a free small business boot camp to support the startups coming out of the class. "We focus almost all of our energy on resolving the one thing that makes most startups…fail: They can't manage their way out of a paper bag," Wuebker says.
The space, which the school leases for $5,000 a month, has fewer than 20 cubicles and half a dozen offices. The university provides the bare minimum: desks, chairs, meeting space, printers, Internet access, and whiteboards.
Students arrive at the Foundry by 7:05 a.m. on Mondays for an executive meeting where they share problems and offer solutions. Every member has already read the other teams' progress reports from the previous week, due by 6 p.m. on Saturday. Students have 24-hour access, and there's often someone there tinkering in the wee hours. "If you run into a problem, more often than not your colleague is able to troubleshoot," says Patrick Duke-Rosati, 26, co-founder of the six-employee RedFlower, which manufactures the fruit drink Aguas Frescas. At the start of the summer, Duke-Rosati and co-founder Fidel Crespin walked into the Foundry with an idea, but no solid plan. Now RedFlower brings in thousands of dollars each week selling at farmers markets and is in the process of securing shelf space in a Utah retailer with six stores.
Beginning this fall, the university turned the incubator into a year-round program open to students and grads from any university. As the Foundry develops, Randall expects to offer more sophisticated resources such as workshops to build prototypes or kitchens for aspiring restaurateurs. The hands-on approach will remain the same, though. "We've tried to provide experiences that bridge theory and the real world," Randall says. "It's a good testing ground for entrepreneurs, and we're here to help them pass."

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Sales boost for high street

Retailers may have turned a corner as high street sales are up for the third month running.

The Distributive Trades Survey of 20,000 company outlets carried out by the Confederation of British Industry (CBI) reveals that 60 per cent of retailers saw the volume of sales rise during September.

A total of 11 per cent of respondents saw sales fall, resulting in balance of +49 per cent which compares with a figure of +39 per cent last month.

The increase is also reflected in the volume of orders placed upon suppliers (+39 per cent), surpassing last month’s balance of +29 per cent. The CBI says that retailers in footwear, furniture and carpets have seen a particularly strong surge in sales.

Ian McCafferty, CBI chief economic advisor, says: ‘The bank holiday weekend, combined with the tail-end of summer sales have resulted in a bumper period for retailers.’

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Younger workers look to leave jobs inside a year

Workers aged between 16 and 28 lack loyalty to their place of employment, finds research.

According to a study of 401 respondents by motivational consultancy Sodexo Motivation Solutions, more than half of “Generation Y” employees are looking to leave their jobs within a year.

The findings, which highlight younger people’s perceptions of working, reveal a negative perception of call centres in particular, with just 5 per cent regarding such work as exciting.

One in three would rather claim unemployment benefits than work in a call centre.

Some 46 per cent of respondents report that they are not offered any benefits aside from their salary by their current employer, with 43 per cent naming flexible working as the single most attractive job perk.

Clare Moore, communications manager at information services company Wolters Kluwer, says: 'Employers aren't giving payrises because in most cases they can't afford to. Companies should look at non-financial benefits to encourage staff retention, such as improving flexible working and help make the workplace more attractive for employees.'

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Act fast to claim rate relief

Small businesses could miss out on millions in backdated rate relief unless they lodge claims by September 30.

Companies that qualify for Small Business Rate Relief (SBRR) will receive compensation on a sliding scale based on the rateable value of their property.

Any small and medium enterprise (SME) occupying commercial premises between April 1 2007 and April 2010 could be entitled to as much as £5,000 back.

According to commercial property market data provider LeaseholdersUnited, too few business owners are aware they can claim relief.

Andrew Bacon, property advisor for LeaseholdersUnited, says: ‘Unfortunately, most councils are saying nothing about the issue and many are handing out forms that actually prevent businesses from backdating their claims.’

Phil McCabe, media manager of the Forum of Private Business (FPB) says: ‘A simple solution would be to make rate relief automatic for businesses with eligible properties.’

Rate relief can be claimed at http://www.sbrr.co.uk/. Claimants are required to enter local authority details and fax the form before the deadline.

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See Profits Rise

I still play with toys. In fact my office is pretty much covered with LEGO bricks, action figures, tin robots and the like. And, as you might suspect, I still watch cartoons. I think there’s something about being a cartoonist that requires some sort of perpetual connection to childhood.
One day while shopping for groceries I was drawn to a rack of calendars, one of which was a sort of tribute to the old Dick and Jane books. You know - “See Dick run. Run, Dick, run!” And it hit me that those simple books and their simple sentences were a cultural touchstone that I had yet to poke fun at.
Take that simple sentence, superimpose it onto a business meeting and hopefully laugh, reader. . . laugh.

Mark Anderson's cartoons appear in publications including The Wall Street Journal and Harvard Business Review. Anderson is the creator of the popular cartoon website, Andertoons.com, where he licenses his cartoons for presentations, newsletters and other projects. He blogs at Andertoons blog.
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Could Your Company Be the Next Great Franchise Business?

What does it take for a business to be franchisable? According to franchise attorney Harold Kestenbaum, coauthor of So You Want to Franchise Your Business, “a franchisable business is one that is profitable, has the ability to be replicated, and has a documented system that is easy for others to follow.”

I’ll add one other requirement: The business must have something that sets it apart from other, similar businesses.


Do you have a business like that?
Better yet, have you even been on the receiving end of a statement like this:

“You know, you should really think about turning your business into a franchise.”

If you’ve ever heard that suggestion, now’s your chance to go for it and enter The Great Emerging Franchise Challenge, where you’ll have an opportunity to win $50,000 worth of professional franchise services to get you started as a franchisor.
Contest creator Todd Taskey, an entrepreneur for more than 20 years as well as an  investment banker and business finance advisor, has assembled a group of franchise professionals who have “been there and done that” to help you transform your company into the next great franchise.
Two weeks ago, I received a call from Todd in which he asked me if I’d don my robe and be one of the judges for this contest. I told him I’d be honored. (Anita Campbell, CEO of Small Business Trends, was also asked to be a judge.)
I asked Todd about his vision and goals for this contest. He told me, “I wanted a way to attract business owners to the idea of franchising as a way to fuel the growth of their company.  I’ve worked with a few in the past and enjoyed the process very much.”
What would Todd like to see happen because of this contest? “We’d like to identify a few good ideas and give them great feedback on their business. Then, we’d like to identify one great idea and get them started. W e’d also like to get more exposure in the business community for franchising as a viable mechanism to grow a successful business into a national brand.”
Todd hopes to continue growing The Great Emerging Franchise Challenge every year, increasing awareness of franchising even further.
If you’d like to learn more about The Great Emerging Franchise Challenge, including the rules, information about the rest of the judges, and specifics about the $50,000 in franchise development services that the winner will receive, visit the contest website.
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Power Friending Will Power Your Participation in Social Media

We have had no shortage of social media-related book reviews this year (or last year, like Anita Campbell’s review of The Digital Handshake).  Now, thanks to the suggestion of a Small Business Trends book review reader, we were made aware of another book that is useful for those learning how to use social media effectively.
Enter Amber Mac.  A former media strategist with Razorfish and more recently a producer of tech programs at Citytv and G4techTV, Mac has written a guide on optimizing your communication called Power Friending: Demystifying Social Media to Grow Your Business.  I received a review copy, and felt that among the social media books available, it is probably one of the most accessible for small business owners wishing to improve the management of their online communications.
Making friends wherever you go
Power Friending outlines the rules for making online friends through an ABC formula – A for authenticity, B for bravery and C for consistency.  A begins with deciding what your communication is about.

“The first rule of authenticity is that you don’t talk about authenticity.  Well, at least not publicly. The people who achieve success on the Web, whether it’s a 20-year-old student who started a multimillion-follower fashion blog or an 80-year-old grandmother who launched the number-one video blog on YouTube, represent real passion to their audiences.  They don’t harp on about authenticity, but they do present themselves in an authentic way.”

There are segments that explain developing a communications strategy for a single user or for teams. In fact, the teamwork emphasis is where this book shines, such as its list of 10 best practices for a social media team and a brief overview of the advantages co-managing can bring (less work, more variety of engagement, more friending possibilities).
Power Friending also incorporates video media usage, such as adding a B-roll to a video, and mobile applications, media that is growing in  importance.  Mac also writes on applications that will impact the options available for businesses, such as augmented reality (the use of scanning to augment what is seen in the real world) and mobile meetups.  This near-future aspect is something many social media books fail to consider, and I liked how Mac offers the information by not stretching too far ahead of the current state of media.
Learn, learn and learn some more
Power Friending uses examples of successes and failures to educate readers. Small businesses are represented by examples such as Threadless, a custom T-shirt company that through its follower voting on Twitter and Facebook was able to sell 100,000 shirts a month and gained 800,000 Facebook fans.  Other successes include Starbucks and Nissan’s Hypercube effort in Canada, while failures include Bringpopcorn.com’s attempt to gain Diggs.
The failures are analyzed well, with explanations clearly tied to the concepts Mac espouses.  These are easy for small business owners to not only understand, but also use to improve on their own efforts.  I liked the example of Skittles allowing all tweets with the keyword “Skittles” to appear on its site:

“Such an open campaign did not give Skittles the family-friendly image it wanted. With zero guidance, users began slamming the brand and its marketing strategy, a lot of times just to watch their negative notes appear on the Mars-owned company’s home page. For example, Mike Butcher wrote, ‘Skittles give you cancer and is the cause of all world evil.’ Hundreds more people included profanity in their tweets, making some visitors think that the Skittles home page must have been hacked.”

The examples good and bad are clear and often memorable.  Mac’s point throughout Power Friending is to manage the challenges and make the most of the media to create a consistent message.
How it stacks up against other social media books
Power Friending is a small book similar to Chris Brogan’s Social Media 101. It gives an overview of executing social media that differs from 101, yet it does not delve deep into a discussion of measurement like Jim Sterne’s Social Media Metrics.  All three books are an aid to social media, with Power Friending making its place in between. Power Friending aims for and achieves the right mix for social media users who know the basics and now need to develop tools, teams and communication styles without the in-depth measurement discussions that marketers and web analytics specialists typically enjoy.
Despite some personal misgivings about how current a social media books can remain over time, I am convinced the material in this book will retain its value well.  I learned a few new tools along the way, and gained context for my new learning without anything being dumbed down.

A straightforward guide to making friends

Whether you have a community manager in your organization or a team of social media ninjas, this book is perfectly suited for you, with actionable suggestions that will help those responsible take initiative.  Power Friending is a truly awesome guide to communication and social media.
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Convince Overseas Companies to Partner with You

We operate an online freight exchange that handles logistics for road transportation in India. We want to approach freight exchanges in the U.S. and Europe and propose collaborating. How should we position ourselves as we seek these strategic partnerships? —S.G., Mumbai

Reliable delivery of goods is one of the essential components of successful businesses, particularly those operating on a global scale. Your task is to persuade potential partners that your logistics operation is crucial to their success.

Draw up a brief proposal that includes information on your company, your own background, and the business synergies, efficiencies, and competitive leverage that could be created under these cross-border collaborations. Solidify the benefits for both parties, so you can present a win-win scenario, says Peter Zapf, deputy chief operating officer of Global Sources (GSOL), an online resource for importers and exporters.

"Understand how the synergies would benefit both parties," he says. "Such synergies could be either on the customer side—assisting customers that have cross-border freight requirements—or on the operations side, such as having a single development team with domain expertise, rather than two separate development teams," Zapf says.

Your proposal should include several components, including your corporate vision and the principles your company stands for, says Ayse Oge, a small business export consultant with Ultimate Trade, based in Encino, Calif.

"Benefits to the U.S. firms from a complete and rapid entry into this fast-growing market need to be precisely stated," she says. "How much cost-cutting would the U.S. firm generate out of this partnership? How would it affect their bottom line? What new customer acquisition can realistically be expected within the next couple of years?"

If you can bring actual customer contracts to the negotiating table, that will be a powerful draw for the companies you are targeting, says Damon Schechter, chief executive officer of Shipwire, an international shipping and logistics firm based in Palo Alto, Calif. "If you can solicit local customers to look abroad for growth, lots of potential partners will be more than happy to help you grow those customers," Schechter says.

In your proposal, stress your customer service orientation and include some case studies, as well as the competitive advantages you enjoy in your industry. If you specialize in moving particular products—say, apparel or high-value items—make sure you mention that as well. "Specialization is important for logistic companies in the U.S.," Oge says.

Make sure that you research the companies you approach, so that your proposal is savvy and on target with their business goals. You should also think about how you'd like to structure these partnerships. "Are you thinking about selling a stake in your corporation? Establishing cross-holdings between your two companies? Cross-marketing to each others' customers via cash or barter? There are many possibilities," Zapf notes.

Put together a compelling set of value propositions for your prospective partners, stressing the entry you provide into one of the fastest-developing markets in the world. Good luck.

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