Life-Sized Business Home

Recent college grads looking for jobs right now certainly have their work cut out for them. The unemployment rate among people in their twenties is now nearly 20 percent. The other day a young jobseeker told me that even the good jobs waiting tables have all been snatched up, so that old standby of a fallback is no longer a sure thing either.

Applications to grad school are way up, often as a strategy for postponing entering the work force until the economy improves. Our 21-year-old, a rising college senior, has started mentioning how cool it would be to have a PhD. (We’re thinking how cool it would be to be done with paying for higher education for a while.) Even the grown-ups seem to be adopting that strategy. A single mom I know with four young sons was recently laid off from her job and went straight back to school to get her masters the following week.

Back in the recession of 1991, frugal spending was the highly touted solution to the economic downturn. Ken Kurson, in his article in this month’s Esquire titled “Saving Money Won’t Save You,” reminds us of the Tightwad Gazette approach to living on less and also writes ‘Too many people ignore the other solution — Increasing revenue.’ Most of Kurson’s article, however, was about  a 20-year-old entrepreneur who had somehow wriggled his way into an appointment to show him his version of the better mousetrap, a dorm-room seating solution called the Slouchback.

I predict we’ll see a large wave of 20-something entrepreneurs in the next few years, partly because when you’re making nothing, spending less is not much of an option. But also because Gen Y is wired from birth to believe in their ability to start and run a company. Many of our large corporate clients complain, in fact, about Gen  Y’s unwillingness to pay their dues like the generations before, and their assumed presumption that they could take over from the CEO right this second.

Launching a startup and running it successfully requires a mindset that’s not easily swayed by reality. Most entrepreneurs tend to be extraordinarily optimistic people, even in the face of crippled cash flow, client budget cuts and other inconvenient business developments. They have to be, or they would never be able to weather the emotional ups and downs that are part of the entrepreneurial life.

Gen Y is often characterized as having been raised with helmets on. Their parents, mostly Boomers, are said to have brought an entirely new level of intensity to parenting, and that as a result, Gen Y kids have been protected from the experience of losing, insulated with an amazingly high sense of self worth, and bolstered with the belief that they can achieve anything they can imagine.

I’d say that happens to be a perfect recipe for creating an entrepreneur. Judith Warner, in her New York Times Magazine article titled “The Why-Worry Generation” asks “Did Boomer parents actually do something right?” She points out that many Gen Y kids have seen their parents deal with layoffs or at the very least, fear of layoffs, so they don’t view the corporate life as the sure thing earlier generations once did. More importantly, she suggests that “their sense of entitlement and lack of  humility” may actually make them well adapted to cope with adversity. Their unstoppable optimism and high self regard provides them with unique resilience.

If you’ve got both resilience and optimism, then maybe all you need to be an entrepreneur is a big idea. Fortunately, Gen Y seems to be good at that those, too.

Small business owners might be about to get our own version of the bailout, sort of. A proposed $30 billion of the money the big banks have repaid on their bailout loans could go to community banks — in hopes that they’ll in turn lend it to small businesses. President Obama announced the plans for a Small Business Lending Fund this week as part of his job creation program, once again reinforcing the idea that helping small business will help put more Americans to work.

It’s gratifying to see small businesses be taken seriously, and in fact, relied upon to help turn the economy around. When the giant banks were deemed “too big to allow to fail,” I know many of us entrepreneurial types bristled, knowing full well that our success or failure was something that was, and always had been, entirely up to us.

Many of us do, however, take comfort in the fact that our bankers have our backs. Of course, they’re much more eager to lend us money when we don’t need it than when we find ourselves in a lean stretch, but still. I consider my banker a partner in growing my business. Our close relationship and his attention to my company’s needs are due, in large part, to the bank being a small community bank, and not one of the giant financial institutions.

I’m all for a plan that frees up more capital for those community banks to lend. A New York Times reporter quoted Karen Mills, the head of the Small Business Administration (SBA), as saying, “When you look at what’s causing the problem, the problem is that small community banks might lack capital.” The Independent Community Bankers of America point out that “every dollar of capital that goes into a community bank can potentially be leveraged 8 to 10 times into loans to small businesses,” according to the same article in the Times.

The big banks certainly aren’t jumping at the chance to lend to smaller companies. While small-business lending is down for the top 22 largest lenders under the federal Troubled Asset Relief Program, SBA-backed loans are up, according to the Wall Street Journal. In previous years, estimates of SBA-backed loans ranged from as low as 1% to a high of 8%. At least one industry expert predicts they’ll be up 10% to 15% this year.

Entrepreneurs are accustomed to slogging it out on their own. But if the country’s counting on us to create a bunch of jobs, it sure does help to have some sector of banking willing to lend the money it takes to expand and grow. Here’s just one more reason I advise small business owners to find a good banker at a community bank instead of going with a big bank where you’re more likely to get lost in the shuffle.

If you’re an entrepreneur — or are thinking about becoming one — take advantage of the prevailing national pride in small business. America has always had a love affair with the Mom and Pop Main Street shop, but now, more than ever, the country is depending on entrepreneurs of every ilk to play a large role in our economic growth.

During the dark days of this recession, small business owners everywhere watched the big banks and car companies in the news and joked, “Where’s my bailout?” If it’s lonely at the top, it’s especially desolate at the top of a small business, where entrepreneurs have struggled alone with all kinds of tough decisions, from whether to lay off valued employees to if it might be time to file for bankruptcy. Plenty of small companies have folded, but many more are still standing.

These business owners, and the new entrepreneurs joining their ranks, are poised to become the national heroes of the American economy. For one thing, they provide half the jobs in the country and create up to 80% of all new jobs. Lawmakers and business reporters are now pulling out all the classic metaphors, like small business being “the backbone of the economy” and “the engine driving our economic recovery.”

If you own a small business and survived 2009, or if you started a business last year, you deserve some high praise. No doubt it required sharp business acumen, not to mention bravery, to pull that off. The people around you, in your company, your community and even your country, appreciate what you’ve done to help keep your employees working and your vendors in business. People with income can spend, which creates more income, and more spending, and eventually, the economy will be thriving again.

This is what I’d like to see. I’d like to be sitting on a plane sometime soon and have the airline attendant stand up and grab her microphone to say, “Ladies and gentleman, we have some small business owners on board with us today. Let’s give them all a round of applause to thank them for their part in stimulating the American economy.”

Tom Lynch’s new company really began on a father-daughter trip. He and his 13-year-old Miranda were planning a trip to South Africa, and decided they should spend a week of their time there doing something to help. They ended up in Nzinga, a remote village of mud huts, where Miranda read books to the children and helped out in the school while her dad was put to work planting potatoes and working in the communal garden.

On the trip home, Miranda told her father they couldn’t just leave and do nothing else. She wanted to keep working to help this village. Tom agreed to help her launch a non-profit, which Miranda named Isopho, a Zulu word for “gift” and the children’s nickname for Miranda. While they were sitting there waiting for the plane, Tom searched for available URLs and registered Isopho.org then and there.

Eventually, Tom began to feel a disconnect between his work with Isopho on nights and weekends and his daytime job as a VP of Strategy & Planning for a large digital agency. Doing more of the same each day at work felt insufficient, in light of the challenges he’d accepted in Nzinga. When the company began to consider layoffs, he suggested a mutually beneficial exit agreement for himself so that he could spend more time on Isopho.

He also began thinking about starting a company that might be a better complement to Isopho. On one trip to South Africa, he stayed an extra few weeks to visit an extensive list of wineries he had culled from an even larger list.  His first requirement was that the vineyard consistently win awards for great wine. And the second was that it contribute to sustainability in some major ways. Despite its unfortunate history, the South African wine industry is now one of the most progressive in the world.

The result is Tom’s new company, Worthwhile Wines, which will import 261 sustainable wines from 21 different South African Vineyards. Although the history of winemaking in South Africa is oppressive at best, the vineyards Tom selected are doing things like putting a third of the land in the names of the Black workers, providing school and decent housing for the families working there, developing ways to use fewer pesticides, using organic grapes and employing Blacks in management roles.

Most of us would choose a sustainable product over a similar one that’s not sustainable. But few of us want to go to much trouble to figure that out. Choosing a bottle imported by WorthWhile Wines will be a quick and easy way for consumers to know they’re a) getting a good wine, that B) is from a vineyard that ’s doing good.

Worthwhile Wines will also be a way Tom Lynch can a) run a good business that b) does some good in the world.

Marilou (in white) hurdles toward her future startup

The path to entrepreneurship often covers exactly the right ground, in ways we could never predict. Interests and experience that seem to be unrelated eventually turn out to be precisely the preparation a specific new venture requires.

Marilou McFarlane, for example, has recently launched Vivo Girls Sports, an online community for athletic girls aged 13-22. If she had known when she was a kid that this was the company she’d start at age 48, she could not have plotted a more useful resume of stepping stones to this moment.

Sure, Marilou played sports as a girl. Soccer and track and tennis and more. She also grew up around college sports, since her father, Jim Heavner, announced many of the Tarheel games for WCHL,  the radio station he started in Chapel Hill. (Being the daughter of an entrepreneur also helps pave the way for starting your own gig later.) After college, she worked for Turner, back when Ted still owned it all, so that gave her some good experience in media, as well as a chance to work for another entrepreneur who thinks big. Later, in San Francisco, she was a media rep for KCBS for many years, before she started her own company, McFarlane Marketing. She had two daughters, both athletic, and was involved in season after season of their sports. For two years, she served as president of their soccer league, a full-time volunteer position she handled while continuing to build her marketing company. She also started an offshoot of  her marketing company that targeted colleges specifically. And now her oldest daughter, Kelly, will be playing for the Tarheels in Chapel Hill starting next year — on their very impressive women’s soccer team.

Marilou knows sports and she knows marketing. She understands teenagers and college students. She has a deep affinity for the issues that girls in those age brackets are facing. She’s savvy to the incredible buying power of this group and its appeal to marketers. And she’s not afraid to start something  new.

Starting a company is not just a way to make a living. Sometimes it’s how we reconcile and integrate everything we are.

Even if you have fabulous office space and enjoy going in every morning to be surrounded by your crackerjack staff, it’s not a bad idea to maintain a functional home office as well. I worked from a home office for the first several years after starting Tribe, and learned this week how lucky I was that I kept it largely intact after we leased real office space.

I’ve spent this week in that home office, thanks to the swine flu. I came down with it Monday night, my fever broke Tuesday night, and I thought staying out of the office for 24 hours after my temperature returned to normal would be a gracious plenty of time to stay away.

However, my entire staff voted to keep me home for the rest of the week, and then assigned my business partner the task of talking me into that. Nobody wants to catch H1N1. We also have two pregnant employees. One of them went in for her weekly check up and when she mentioned that her boss had the swine flu, the doctor went ape. Apparently, pregnant women are at elevated risk for complications with this virus.

So I set up shop in my old home office, where the wireless still works, the printer still works, my cell phone gets a good signal and the coffee machine is just a few steps away. I opened up all the windows, let the dog settle in at my feet and then I got down to business. I’ve kept up with the constant flurry of email. I’ve worked undisturbed for long stretches. And when I needed to touch base on projects with people in the office, we did it by phone or iChat.

Yesterday was such a gorgeous sunny fall day that I spent the afternoon on the deck with my laptop. I could hear the birds singing, feel the breeze in the trees, enjoy the rich colors of the potted mums waiting to be planted. Midway through, I took a break to walk up to the school to collect our fourth grader. Sam started in on homework and I got back to my work. Later, I could see him out of the corner of my eye on his homemade bag swing, figuring out ways to use a ladder to make the swing go higher and further. Once in awhile, I’d respond to a “Mama, watch this” request.

It’s a nice way to work. I might miss my home office on Monday.

“My business seems to be successful,” said the new entrepreneur, “but when do I get to quit worrying about enough work coming in?” Jo Ann is an accomplished marketer, with 20 years of experience under her belt and an MBA, not to mention gorgeous and personable. She left her post as VP/CMO at a venerable brand to start her own marketing consultancy.

“Never,” was all I could tell her. In my years of running my own companies, I’ve been able to come to a strange peace with that fact, but some days it requires a certain amount of zen not to completely freak out.

I gave her my rock climbing metaphor. When I was just starting my first ad agency, I  asked that same question of my friend Bill, a wildly successful illustrator who has run his own business for decades. Bill’s personality is about as low stress as mine is high, and I would never peg him for a worrier. (One night at some industry event, I remarked to Bill that it had been a gorgeous afternoon. He agreed, and revealed that he’d turned down a job to do a Newsweek cover that afternoon so he could go hiking instead. I was impressed, but he laughed and said, “I’m thinking I made the wrong decision.”) Bill told me the same thing I told Jo Ann: never.

Bill said he still worries all the time, but he doesn’t view worry as a negative. He suggested I try to enjoy the fear, the same way I enjoy the fear inherent to rock climbing. “Think of it as exciting,” he said. “It’s scary, but it’s kind of fun.”

Here are my four best tips for maintaining perspective:

1. Redefine worry. Worry can be useful, if it wakes you up in the middle of the night with the realization that you won’t be able to make payroll unless you collect that big receivable that’s running late. Worry can make you get up the next morning and get your client on the phone to help push that invoice through their accounting department and get you a check. Instead of telling yourself that you’re worried, maybe you’re actually just “aware.”

2. Remember how much is in your control. Although you can’t control the economy or a potential client’s budget cuts, you can control your efforts. During slow times, ramp up your networking, your outreach, your marketing. In your own business, you truly have more control over your success than you would working for a large company.

3. Give seeds time to grow. For the sort of professional services many small businesses are selling, the sales process can stretch out for years. If you don’t get a piece of business you pitch today, that doesn’t mean you won’t win some work from that client somewhere down the road. At Tribe, we got our first project from UPS a full two years after I’d sent an introductory letter to a heavyweight there. He’d kept that letter in his files until he had a need for us. Similar story with our Chick-fil-A clients. Life is long.

4. Don’t slack off in good times. When a small business is busy, it’s usually all hands on deck to get the work done. It’s very difficult to come up for air long enough to formulate any sort of marketing efforts. Just don’t let your business development machine grind to a complete halt. Keep pitching. Stay visible. Be in touch.

I’m sure some of you out there have tips to add to that list. How do you deal with the relentless need to keep drumming up business?

The front page of the New York Times yesterday carried an article on women balancing military duty and family. The military seems to have adapted fairly well to women serving alongside men, just as the workplace has over the past several decades. “Motherhood, though,” says the writer of the article, Lizette Alvarez, “poses a more formidable challenge for the armed forces.”

The corporate world is also still struggling with how to accommodate motherhood. The difficulties presented by that dual life — corporate gig and loving mom — are one reason so many women start their own companies before they work their way up to that corner office.

“Hanging on to today’s war-savvy, battle-tested cadre of mothers — and would-be mothers — is both crucial and difficult for the Army, say officers, enlistees and experts. ‘The Army’s challenge, but also the military’s challenge, is to help service members feel they don’t have to choose between family life and their military career,’ said Shelley MacDermid Wadsworth, director of the Military Family Research Institute at Purdue University, an organization supported in part by the Department of Defense.”

“’They leave when they can’t figure out’ a way to do both, she said.” Just as many mothers leave their corporate positions when they can’t reconcile the demands of their work calendar with their kid’s schedules.

Running their own businesses allows mothers the freedom to control their own calendars. Being able to schedule business trips so they don’t interfere with kids’ birthdays and school plays, to set client meetings at a time that will still get you to soccer practice by pickup, can make all the difference. It’s one of the chief advantages of entrepreneurship, especially for parents.

Most mothers I know who’ve started a company aren’t really looking for a way to work less hard. Entrepreneurs of every stripe work hard. They’re attracted to entrepreneurship partly because it allows them to work on their own terms  – and around their kids’ routines. They might put in a few hours before the kids wake up and break to get them breakfast and off to the school bus. They might field phone calls on their cell while driving a backseat of ballerinas to dance class. Or take the afternoon to oversee homework and fix dinner, but spend a productive few hours on the computer after the kids are in bed.

Starting a business is also a way women can have it both ways. They can manage the needs of their children, but not miss the excitement and satisfaction of doing work they love and are good at. Those two driving forces are much more difficult to reconcile when the place you work is a war zone.

“Not long after reuniting with her children in 2005, Specialist Holschlag said, she was sitting alone in her apartment in Iowa when she was struck by a thought she recognized as absurdly selfish: she wanted to go back to Iraq.”

There’s nothing like the excitement of starting your own business. Most entrepreneurs have a certain nostalgia about the early days when their companies were only a few steps beyond those initial notes on a legal pad — or a cocktail napkin.

When I launched my first ad agency, we really did start with a cocktail napkin. My business partner and I were teaching classes one evening a week at an ad school, and afterwards we’d meet up the street for a glass of wine. We would plot and plan and scribble thoughts on paper napkins, as we discussed our vision for the agency we would eventually call Match. Before we decided on a name, we practiced at the same bar with their cloth napkin rolls, wrapped around knifes and forks. We’d pick up that napkin roll and hold it to our ear saying, “Hello, thanks for calling Albert & Baskin.” No, that sounds like an ice cream store. “Hello, thanks for calling Magnet.” Okay, maybe. Until we finally tried, “Hello, thanks for calling Match,” and decided that was the one.

Our first office was two rooms in a renovated plow factory. We would spend the days pitching business and going to see clients, and then about 5 or 6 the phones would simmer down and we’d start doing the creative work for whatever deadlines we were trying to meet. I’ll never forget how it felt to be there working late, with the glow of lamplight on the dusty red brick walls and the rumble of trains moving past our open windows, almost close enough to reach out and touch. We’d have good music on the stereo and our dogs at our feet and after awhile we’d start to have some good ideas. It was heady stuff.

At first, we couldn’t afford much furniture and most of what we had was hand-me-down. Our desk was a borrowed dining room table we shared, facing each other across our laptops. We splurged on a pair of new swiveling desk chairs at the Office Depot, but hadn’t yet sprung for any rugs, so the chairs would slowly roll away on the warped old hardwood floors if you didn’t keep a good grip with your feet. One late night I was sitting cross-legged in my chair, writing on a pad of paper in my lap. I heard my partner B.A. talking to me, but she sounded far away. When I looked up, I realized I had rolled downhill all the way across the room. After that, we got some rugs, and they also helped with the noise of the trains which was so loud it was beginning to make our teeth rattle around in our heads.

Eventually, our little startup was employing ten or 12 people and working with an impressive list of clients. We grew out of our two rooms and knocked down walls to expand into three connected studio spaces. We bought furniture and returned the desks and tables and other pieces we’d begged and borrowed in the beginning. We put in a sophisticated phone system. We started a 401(k) plan. In short, we became a real business. Our startup worked.

But I wouldn’t trade anything for those early days. There’s nothing like the feeling of making something out of thin air. One day, Match was a stack of cocktail napkins covered in Sharpie. Then suddenly, there was a company that didn’t exist before, doing good work for clients, supporting a number of people in doing work they love, and giving other would-be entrepreneurs the confidence that they could do it too.

Several years later, a woman I’d worked with a decade before asked me to lunch to discuss the company she was about to launch. Over our Caesar salads she said, “I told my business partner, how hard could it be? If Elizabeth and B.A. can do it, anyone can!”

Watching our new iPhone app climb the charts in Apple’s ratings feels like watching election returns when your side is winning. On September 10, we launched the Start Your Own Company application from Starter Cards (the division of our ad agency that develops content and tools for entrepreneurs) and have spent the last ten days tracking its move through Apple’s rankings. After four days, it broke into the Top 100, debuting at 92 in paid business apps. The next day, it moved up to 66. Over the weekend, we broke into the Top 50, squeaking in at 47 and crawling up to 45 by Sunday afternoon. Today, we were ecstatic to see the app nicely positioned in the Top 25, holding steady at number 20, and by the time we all left the office at 5 o’clock it was sitting pretty at number 17. It’s starting to feel like we might be onto something here.

Anyone who runs a small business knows that there are plenty of days and months and even sometimes years when you wonder if your big idea is going to work. You have to train yourself to keep the faith, despite setbacks and quagmires and plenty of heavy slogging uphill. Some days that can be damn hard.

Then one day, everything in the universe lines up just so, and you have a major win. Suddenly, it all looks easy. It feels easy. You experience what I call the moving sidewalk effect, where you’re just strolling along yet propelled ahead at a satisfying clip.

But what makes one effort a win and another a dud? Why does one particular idea pop, while others fizzle out? I wish there were an app for that. I don’t know the answer, but this is what I think helps:

1. Sending out a lot of ships, as my old friend Chellie Campbell would say. To switch metaphors, the more irons you have in the fire, the more of a chance you have of one becoming really, really hot. Also, it helps cushion disappointment to have your hopes pinned on more than one good idea.

2. Surrounding yourself with talent. One thing you learn early on in the ad industry is that a great concept is only as good as its execution. If you have a brilliant idea for a commercial and turn it over to a lackluster director, your spot is not going to become the talk of the town. (At least not in a good way.) You want the best people you can get to bring your ideas to life.

3. Any flame begins as a tiny ember. This one comes from my old business partner B.A. Albert, now president of Grey Atlanta. Great ideas and big opportunities rarely present themselves as roaring fires. You have to recognize them when they’re  nothing more than a little glow. You blow on that ember, feed it tiny pieces of kindling, then larger sticks, finally logs. Steady as she goes, you follow one step with another with another.

4. Hope for a lucky break. In this case, our big break was Alissa Walker deciding the story of our iPhone app would be a great fit for Fast Company, successfully pitching it to her editor, and then writing a fantastic piece. That one article on Fast Company’s website is the most likely cause of the Start Your Own Company app’s amazing momentum in the Apple rankings.

5. Set the stage for lucky breaks. We had heard that the first week after launching an app was critical, and so we mobilized to maximize the moment. Before launch day, we had prepped to submit the application to reviewers, post a YouTube demo video, launch a Facebook fan page, mention it on LinkedIn and tweet about it on Twitter. We prepared a press release and jpegs to send to a core group of reporters, most of whom we’ve built relationships with over months or years. (In fact, I’ve known Alissa since she was an intern in my ad agency in the late 90’s, and have watched her blossoming career from afar.) Sometimes luck just happens, but it happens more often if you prepare the ground for it to take root.

That’s all I know. I’d love to hear your thoughts.