Innholdsfortegnelse for November 2016 i Entrepreneur Magazine

MOST PEOPLE haven’t heard of a scrappy little ski company called Renoun, but we gave it a lot of space in this issue—a story about founder Cyrus Schenck on page 34, and a full-page photo of him on page 35. I bet you’re wondering: How did Schenck pull that off? I’m going to tell you. Why? I owe it to you. Magazines like Entrepreneur are designed to help readers navigate their world, and we do that in journalistic ways—talking to experts, interviewing successful entrepreneurs, and so on. But we forget that to people in business, we are also a mystery in need of solving. How do editors think? How are decisions made? And so, each month, I’m going to explain our process on this page—the space where, in most magazines,…

I WAS A WRITER and an editor for about eight years, at magazines like Budget Travel and Southern Living. Eventually I got bored; the people and places that fascinated me weren’t the ones my bosses wanted to feature. In 2008, for example, I was reporting a story on Arcadia and passed a house in Montgomery, La., painted top to bottom with folk art. I pulled over, knocked on the door, and spent four hours hanging out with Juanita, who had lived in this small town her whole life. I would never forget her story, but it didn’t fit into any magazine I knew of. In 2010, I took a break to get my MFA at Brooklyn College; I wanted to write a novel. But a year later, while in the…

“THEY ARE JUST WAITING FOR SOME- thing to go wrong,” 22-year-old miner Parker Schnabel tells me with an expression that is half smile, half sneer, and all exhaustion. We’re standing on the grounds of Scribner Creek, which isn’t a creek so much as a postapocalyptic-looking wasteland of turned-over earth. And “they” are the film crew of Discovery’s Gold Rush, who have followed Schnabel’s every shovelful of dirt since he became a mine boss at the ripe old age of 16. “Last night I was digging a ditch,” he continues. “And I knew that the only way this was going to make the show was if I did something wrong or if I got hurt or something broke. And you can tell the film crew wants one of those things to…

SANDY CHILEWICH Founder and creative director, Chilewich “BACK IN 2000, WHEN I WAS JUST STARTING, I emailed a buyer at Bloomingdale’s, pitching my place mats. And I don’t know if placemats just wasn’t in my computer’s dictionary, but each time I typed that, it changed to placentas. I didn’t notice and sent it. So I wrote this buyer a lengthy email about how great my placentas were, and how many colors my placentas came in, and how durable my placentas are. I sounded like a madwoman. I never heard back from that buyer, but Bloomingdale’s is now one of our biggest customers.” JASON HORVATH Cofounder, Uhuru Design “AFTER 10 YEARS OF GROWING SLOWLY AND deliberately, in 2013 we got a $500,000 investment in growth capital and did some marketing, and…

How’d you guys get started? Jon King: For the holidays one year, Jim and I wanted to make homemade jam and sauces. I was working part-time at a greenhouse and brought our leftovers in. A woman suggested that I sell it at the local farmers’ market. I had huge student debt, so a few extra hundred dollars on a Saturday? Totally game. What was your approach at the market? We never had a product line—we just made what we wanted! If we were making strawberry jam and it didn’t set, we’d call it strawberry syrup. That’s similar to how you created one of your most popular products, Roasted Garlic Onion Jam, right? We were making garlic relish for hot dogs and burgers, and it called for a certain amount of…

CONSIDER THE WORD build. It’s perhaps the most common verb in entrepreneurship—she built a business; he is building a business. But the word isn’t fair. You know what gets built? A building. The foundation is laid, the first floor is constructed, and then the first floor is forevermore the first floor: always solid, never changing, the foundation upon which a second floor and more can rise. Built. Nothing about a business is like this. “What successful companies—for example, Amazon—do is to constantly search for something better for customers,” says Jeffrey A. Carr, a professor of marketing and entrepreneurship at New York University’s Stern School of Business. “It’s this never-ending betterment that has to happen.” And that betterment can’t happen all at once. A business is a collection of parts: revenue,…

Company: Noribachi makes custom light systems for clients like the Los Angeles Memorial Coliseum and Churchill Downs Racetrack. Innovation: Dibachi launched in 2008, knowing how scant lighting industry innovation was in the past 100 years. “As a result, you had a very calcified business channel and a product area that was ripe for a technological shift.” Today he has nearly 20,000 customers and ships an average of 2,500 LED lights and fixtures per week. This is a second career for you, following a successful run in Silicon Valley. What’s the most unexpected thing you’ve learned about the lighting business? In Silicon Valley, the idea was always that if you make the pie a lot larger, everyone eats a lot more. In the lighting industry, everyone thinks the pie will stay…

OPEN OFFICES CAN be hotbeds of creativity and collaboration, as well as noisy distractions. Spotify-blasting headphones can block it all out but will also make you deaf to stuff you still need to know. The Doppler Labs Here One earbuds fix all that: They stream music via Bluetooth while acting like a literal filter for wanted and unwanted noise—blocking out bad sounds (the copy machine, Frank in accounting’s personal calls) and letting through the necessary ones (your business partner talking directly to you). Here’s how: Built-in microphones take in all the sounds around you, which are processed by an internal computer, and then only the noises you select via an app are actually played into your ears. The app also features a volume control, so you can jack up specific…

The faster the Los Angeles–based online underwear retailer MeUndies grew, the more frustrated its COO, Terry Lee, became. The problem was shipping: The now 5-year-old company was manufacturing in Asia and using a freight forwarder to manage the logistical tangle of international shipping to get the product to the States. “We were paying a lot of money but getting zero transparency around pricing and the bare minimum in terms of service and flexibility,” Lee says. So he set out to find a better fit for his shipping needs. The Fix The freight-forwarding industry is made up of thousands of old-guard companies (one of which MeUndies was using) content to work by telephone. But a few startups have entered the space. In the summer of 2015, Lee picked one of the…

FIRST STEP: Set better terms. Otherwise, you’re at someone else’s mercy. At one of my companies, we sold six-figure packages of services to Fortune 500 companies. We assumed that getting a signature on a purchase order meant we’d be paid. That turned out not to be true, because our customers’ accounts payable departments often had very different ideas. So once we wised up, we made sure someone in their accounts payable signed off on our payment terms before we provided the services—and we made sure to find out exactly who would be handling our invoice and payment. Speaking of invoices: The more thorough they are, the faster you get paid. They need to describe everything ordered and/or services provided. They need purchase order numbers. (A copy of the actual document…

Humberto Gomez had a good thing going. For 11 years he ran a Farmers Insurance Agency so successfully that he was able to buy a piece of land and build his own office, complete with a private shower he used after daytime runs. Still, he grew restless. As a Marine Reservist who once worked for the Arlington, Tex., police department, he’s always on the lookout for new challenges. He found one after insuring several franchisees of Dental Fix Rx, a mobile company that fixes equipment on-site in dentists’ offices. “Out of all the people I insured, every time I talked to those guys, they sounded positive and excited,” says Gomez. “They were always adding another vehicle or more employees.” So late last year, he handed the reins of his insurance…

IN 1991, DON DWYER SR., founder of The Dwyer Group franchise system, wanted to honor military members returning from the first Gulf War and assist them with the transition to civilian life. His answer was VetFran, a program designed to offer discounts, mentorship, and training to veterans seeking to become franchise owners. To date, Dwyer’s creation, which is now run by the International Franchise Association, has helped more than 6,500 veterans to become franchisees. And the 650-plus franchisors who participate in VetFran have found that veterans, with their leadership skills and disciplined training, make ideal additions to a franchise system. Case in point: the Ambrozewskis, owners of an Anytime Fitness gym, profiled on page 100. As VetFran celebrates its 25th anniversary, we present our list of the top 100 franchises…

My mother used to say, “If you don’t ask, you don’t get.” I’ve tried to make this a professional habit. It’s hard, of course. But if you don’t ask for more, then all you get out of work is a paycheck—you’ll never be satisfied, and it will never be enough. Ask for what you need: more time, more creative control, and always more money. Dream big: If you want a pony, ask for a unicorn. And when the universe provides you with more, just say, “Thank you; more, please.” All you have to do is ask. James Victore’s work has been exhibited at New York’s Museum of Modern Art. He teaches creativity to businesses.…

HEY, WANNA FEEL old? Great. Let me a get a startup exec on the phone. [Ring, ring] Hi there. I’m trying to reach Elena Gorman, product marketing lead at HipChat, the group-chat and file-sharing company. [Waiting] Elena, hello! Question for you: What do you think of when I say the word telephone? “Working in Silicon Valley, I haven’t had a desk with a phone on it since 2010.” You don’t say? “I can imagine a scenario where getting someone on the phone would be the quickest way to resolve a complex issue. But even with that, we have video chat and group video chat in HipChat. The only reason to ever bring up my phone is if wi-fi is spotty. I think most young people probably associate telephone communications at…

"CULTURE FIT" IS THE HOLY GRAIL OF HIRING, BUT WHEN TRACY LAWRENCE launched the catering startup Chewse, in 2011, she gave experience an inflated importance. “We’re really into transparency and talking truth to power, but we didn’t always have a way to vet it,” she says. That led to a toxic hire: someone with crazy-impressive skills and market chops but a passive-aggressive streak. Fast-forward six months and the Chewse culture was marked by whispered unease and gossip. “We couldn’t even pinpoint why everything felt so wrong at first, until another employee brought it to our attention,” she says. Though parting ways with the bad hire was quick enough, righting the culture took more time. Now Lawrence makes sure that culture questions—Tell me about a time you disagreed with your boss.…

TRACY YOUNG AND HER COFOUNDERS KNEW THE CONSTRUCTION BUSINESS AND COMPUTER engineering, but they didn’t know squat about organizational management. So when they launched their startup, PlanGrid, which digitizes blueprints, they “decided to run PlanGrid with no titles and a flat management structure. We were just going to build this business together,” says Young. That worked fine for a while, but then… 1 Stop defending your stupidity. “When we hit around 50 employees, someone came up to me and asked what her career path was. I looked at her and wanted to say, ‘Don’t you see we’re all drowning in work? Why are you asking me about career paths? No one even likes career paths!’ But these things matter. Basic business structures work, and career paths are there for a…

Entrepreneurs Non-entrepreneurs ENTREPRENEURS, PERHAPS MORE THAN ANYONE ELSE, LOVE TO talk about their mistakes. They’ve been conditioned to see failure as a learning experience—that, rather than being the end of something, a big flop is merely a very useful (though painful) data point along the way to success. And so we wondered: Just how different is an entrepreneur’s perspective? We partnered with the polling company Ipsos to find out. Ipsos reached out to 1,007 people in August, asked if they consider themselves entrepreneurs, and then had them react to a series of business challenges. The results: Entrepreneurs have statistically thicker skins. NOT FEELING DOWN! Here’s who said no when we asked: Is this a failure? NOT SWEATING IT! Here’s who said no when we asked: Is this a major challenge…

1.RETAILNEXT, San Jose, Calif. 2. AVANT, Chicago 3. CARVANA, Phoenix 4. SUJA JUICE, San Diego 5. CARDLYTICS, Atlanta 6. EOS PRODUCTS, New York City 7. TALKDESK, San Francisco 8. LIAISON, Alpharetta, Ga. 9. TASKUS, Santa Monica, Calif. 10. NORIBACHI, Harbor City, Calif. 11. ETAILZ, Spokane, Wash. 12. PETPLAN, Newtown Square, Penn. 13. UBERMEDIA, Pasadena, Calif. 14. KARGO, New York City 15. VARSITY TUTORS, St. Louis 16. TELES PROPERTIES, Los Angeles 17. BAUBLEBAR, New York City 18. COMPANY.COM, Atlanta 19. NARRATIVE SCIENCE, Chicago 20. SPORTS 1 MARKETING Irvine, Calif. 21. QSTREAM, Burlington, Mass. 22. NOVICA, Santa Monica, Calif. 23. DRAWBRIDGE, San Mateo, Calif. 24. AUGUST HOME, San Francisco 25. BONANZA.COM , Seattle 26. CLEARDATA, Austin, Tex. 27. FLEXPORT, San Francisco 28. BIZFI, New York City 29. GENEVA SUPPLY,…

Company:BaubleBar is a rapid-response jewelry team that identifies fashion trends and puts out new pieces in weeks, rather than seasonally. Growth:Since launching in 2011, BaubleBar now ships 1,500 orders a day, selling in Nordstrom, Bloomingdale’s, and Anthropologie. It has landed $35 million in funding. You were originally friends and now run a business. What’s your strategy for working together? Yacobovsky: Amy oversees the merchandising, product development, and sourcing teams, while I focus on the technology and marketing teams, overseeing all of BaubleBar’s creative. Jain: Each of us needs to know what’s going on on the other’s team, so we have two people looking at everything holistically. We don’t have a siloed organization where I handle this and she handles that. Yacobovsky: We also sit next to each other. They’ve tried…

Keep it impersonal. Never online-bank via public wi-fi. Obvious, right? But you shouldn’t even check email—that can give hackers access to a trove of personal info. This applies even to secure websites, those with https (hypertext transfer protocol secure) in the URL. “Public hotspots are susceptible to man-in-the-middle attacks”—where the hacker intercepts communications—“which will strip out the ‘secure’ part of https,” warns David Lee, a product manager for mobile at security software company Norton. Beware fake networks. Check the network name with the staff of wherever you’re working. “You might see ‘Free-Starbucks-wifi,’ but this could easily be a fake,” says Jérôme Segura, a lead malware intelligence analyst at internet security software maker Malwarebytes. You’d be able to get online like everything was normal, except all your traffic would be visible…

PAUL GRAHAM, FOUNDER of the accelerator Y-Combinator, coined a term every startup should know: default dead. It is a pretty simple concept. Assume that your expenses and revenue growth remain constant, and now fast-forward into the future: Will you run out of money before you turn a profit? That means you’re default dead. (And if you will escape the red before running out of cash, congrats: You’re default alive!) This isn’t just an academic exercise. Go ahead and graph your monthly expenses and revenue over time, and find the point where they (hopefully) intersect and you become cash-flow positive. The amount of money needed to get there—between now and profitability—is the amount you need to secure from investors or other funding sources. And until you can get that funding, you’ll…

JENNY DURANSKI WAS EIGHT months pregnant, on her hands and knees, cleaning up a flood in her eco-friendly nail salon, Noktivo. She’d signed a lease for the Chicago retail spot just nine months earlier, but as her belly grew, so did issues with the shop: Plumbing leaked after every rain, and this latest flood—caused by a burst pipe—would shutter her business for weeks. “It was an old building, and the landlord never fixed anything,” she says. She had to move, but her savings were depleted. When another entrepreneur, Kate Jotzat, offered to let her rent out a room in a hair salon, Chroma K8, Duranski jumped. “I was certain it would be temporary,” she says. “I planned to stay just long enough for me to find a location on my…

SHOPPERS Your best customers aren’t necessarily the biggest spenders; they’re the ones who come back a lot. “I like to think that our $15 to $20 bottles drink better than most $30 to $50 ‘branded’ bottles,” says Smith. “It isn’t about the price; it’s about developing a relationship with your customer.” NEIGHBORS In some states, a would-be wine shop must notify residents within a certain radius. Don’t underestimate the power of the local community board, or even one prickly neighbor, to contest your plans. Courting the locals early and respectfully could save you a bundle in the long run. WINE REPS “Treat your wine reps like human beings,” says Smith. Don’t make them wait to see you or attend cattle-call buying sessions. Learn their product and be up front. NEXT…

Q WHAT ARE THE BEST WAYS TO RESEARCH THE COMPETITION? A When it’s time to size up your opposition, consultant and author Becky Sheetz invokes the wisdom of ancient Chinese military strategist Sun Tzu: Know your enemy, and know yourself. Cultivate spies. Hire your competition’s top salespeople—or at least invite them for lunch, dinner, or cocktails. “It’s a great conversational way to find out stuff you may not otherwise be able to,” says Sheetz, author of The Art of War for Small Business. Engage your prospects. When a potential customer declines your business, find out why—and how your offer stacked up. “It’s more important to find out why you lost,” Sheetz says, “than why you won.” Behold the secret shopper. Intelligence gathering typically involves strolling through competitors’ aisles. No store?…

CHARGEBACKS911, an aptly named company, spent 12 months analyzing data from its clients, and it discovered a startling fact: Women file 76 percent of all chargebacks for tangible goods. Blame it on shopping styles, says COO Monica Eaton- Cardone. Women are more likely to buy an item in multiple sizes or colors and are also prone to buyer’s remorse. “Then we get busy, we forget to return it, the bill comes, and chargebacks follow,” she says. This is exclusive to online shopping. “Probably not a single woman who files a charge-back would consider walking into a Nordstrom and stealing a pair of shoes,” she says. After one chargeback, a pattern quickly forms. “Fifty percent of friendly-fraud chargebacks where a woman is not caught results in another happening in just 60…

IN 2011, MY FIVE PALS AND I WERE driving home from one of our weekend ski trips in Vermont. We were engineering students at the time and used to throw out all kinds of ideas during those three-hour drives. On this one day, my friend Donny suggested building skis that were based on engineering principles and thus unequivocally better. We loved the challenge. Surely we could build a better ski. During my material sciences class, I learned about a rare class of soft materials that harden the instant you apply force, which meant we could produce a ski that was soft in powder but stiff in icy conditions. We made a sample and ran some tests, and the numbers were astonishing: Because of the variability of their dampness (a ski’s…

MediaRadar had been growing at a steady clip and was about to launch a big new product. This was 2010, and the then-4-yearold company, which helps clients like The New York Times target advertisers, had created a tool to identify media buyers. “But instead of us taking a year to build it from scratch, we paid a third party that specializes in providing this exact data,” says CEO Todd Krizelman. It seemed like the right move at the time. But then the bad news started rolling in… STAGE 1: DENIAL Almost immediately after MediaRadar announced the product, clients were queuing up to use it. But before the week was out, a handful had called to report major errors. “I thought maybe it was just a few bits of bad data,”…

THE ERROR: Overexpansion. “We were intoxicated by what was going on with Uber—on-demand everything, expand really fast, and off to the races. Once we had the mechanics of same-day delivery figured out in San Francisco, we expanded too quickly without realizing that we couldn’t copy and paste the mechanics of what worked in San Francisco to Los Angeles and New York.” The fix: With the company burning nearly $500,000 per month, it decided to shutter same-day delivery in L.A. in August 2015. “We had stretched our footprint so wide, it spun our whole economic model sideways.” The switch took their burn rate to just $15,000 a month, giving BloomThat time to retool for L.A. (It’s now back, and profitable.) THE ERROR: Moving too fast, literally. “We promised delivery within a…

Company: The Honest Kitchen makes dog and cat food with high-quality, human-food ingredients (like coconut, spinach, and quinoa). Impact: In 14 years, the company has grown to 49 employees, and it’s on track to double its revenue inside of two years, from $20 million in 2014 to a projected $40 million in 2016. How did you decide there was a market for high-quality pet food? My dog was suffering from chronic ear infections, and I was spending a fortune at the vet on steroids and antibiotics that never brought a true cure. So I researched and started making my own food for him. It cured his earaches—and made a huge mess in my kitchen. That led to the idea of dehydrated food, to still feed him healthy foods without the…

Company: JotForm creates online forms for use on websites—no coding skills required. It has helped magicians book events, bakeries accept custom orders, and even Facebook collect questions to ask President Obama during a Town Hall event. Leadership: Tank has guided the 10-year-old company through rocky waters (i.e. a Secret Service shutdown). Now at two million users, including Uber and Harvard University, annual revenue has grown 50 percent yearly over the past five years. What do you spend the most of your workday doing? Fifty percent of my day is devoted to the hiring process. When I interview someone, I take them to lunch to make sure they are the right personal and cultural fit for our company. I also ask myself, Do I want to work with this person for…

IT LOOKS LIKE an ordinary USB stick. But plug it into any device’s USB port and it instantly makes your software smarter—as if you plugged in another brain. The Fathom Neural Compute Stick, made by the semiconductor company Movidius, powers “deep learning”—the ability to see and analyze images, and learn from what it observes, much like a human. We’re talking office security cameras that can distinguish a burglar from a janitor, or self-driving cars capable of finding legal, nonmetered parking. The business possibilities are endless. Tech like this “will replace experts in fields where we simply needed a ‘pair of eyes’ on the job,” says Movidius CEO Remi El-Ouazzane. “We’ve built machines that can now detect and perceive visual data better than humans.” You’ll need some programming chops to take…

Every headline-grabbing hack is a stark reminder that your data isn’t always safe in other companies’ hands—or clouds. One solution: Create, and manage, your own cloud using the ZeroStack Z-Block. Step 1: Plug it in. The ZeroStack system is a box (yes, like on Silicon Valley) that can quickly plug into a company’s network, transforming the system into a web-accessible cloud computer. “Customers can deploy a cloud in less than an hour, instead of days or weeks,” says Ajay Gulati, cofounder and CEO of ZeroStack. The price starts at $5,000 per month. Step 2: Control your data. Your cloud can be accessed from any web browser. Because ZeroStack uses your company’s own server, you can keep a watchful eye on your data instead of trusting your valuable information to somebody…

A FEW MONTHS AGO, in May, the government finally allowed the average person to become an angel investor. This change was known as Title IV of the JOBS Act. Technically speaking, it allowed “unaccredited investors”—that is, individuals who have less than $1 million in assets, earn no more than $200,000 a year, and are not professional investors—to participate in crowdfunding campaigns in exchange for equity in a company. Maybe you’ve already done this, or at least have thought about doing it. Is it a good move? That depends. You might be able to put money into the next Facebook…but the chances are low. My fear is that inexperienced investors will more likely bet the farm and lose everything. Now, hey, I know how entrepreneurs think: The greater the risk, the…

Know your limits “ My photography business is just me. It’s great to have the option to stay up till 3 a.m . designing Christmas cards, but I also need to know when to pass on jobs. If someone calls on December 8 and wants a family session, holiday cards made, and a big canvas print for Grandma, I have to say no.” —Mary Hanson, Mary Hanson Photography, Minneapolis Set staffing expectations “I run a day spa and boutique. People come in as late as Christmas Eve getting services done to look good for the holidays! We have about 12 employees and try to limit any kind of vacation after October 31. There can be exceptions, but our staff want to be here for their clients.” —Lisa Mergel, Kanvas Beauty,…

Heather and Allan Staker used to have date nights. Then the married couple launched a startup together. “Friday date night would turn into eating Indian food in front of our laptops,” Heather says. “I was starting to feel overwhelmed—we were always together, but we were always working. I went to see a life coach, who told me, ‘You’ve got to stay in love with each other, apart from your business.’” ¶ So they came up with a rule: No computers on date nights. It wasn’t easy, but they stuck to it. And with technology banished, their special dinners became a time to connect and talk as spouses rather than as cofounders. Their online educational program, Brain Chase, could wait. The benefits of starting a business with a loved one seem…

Tristan and Hannah Ambrozewski met and married while in the Army. When it was time to figure out what came next after seven years in the military, they knew fitness was going to be part of it. “We’re both big into working out—it was instilled into us in the military,” says Hannah, who retired from the Army in 2012. After trying out a Fit4Mom franchise, they realized they wanted to own and run something bigger. The problem was they didn’t have the funds to pursue their dream business, an Anytime Fitness gym. But then they heard about Operation Heartfirst, an annual $125,000 grant for a veteran to open an Anytime Fitness franchise, funded by Anytime Fitness cofounders Chuck Runyon and Dave Mortensen, several hundred Anytime Fitness franchisees, and the nonprofit…

Big O Tires Tires, tire services, auto products Startup cost: $259.2K–$1.2M Franchise fee: $30K Total franchises/ co.-owned: 387/2 Incentive: Franchise fee waived Checkers and Rally’s Restaurants Burgers, fries Startup cost: $165.8K–$1.3M Franchise fee: $30K Total franchises/ co.-owned: 519/315 Incentive: Franchise fee waived Flippin’ Pizza Pizza, salads Startup cost: $221.3K–$398.3K Franchise fee: $25K Total franchises/ co.-owned: 20/0 Incentive: First-store franchise fee waived Jet-Black Franchise Group Asphalt maintenance Startup cost: $36.5K–$100.2K Franchise fee: $7.5K Total franchises/ co.-owned: 88/10 Incentive: Franchise fee waived KidzArt Art-education programs, products, and services Startup cost: $36.4K–$44K Franchise fee: $29.9K Total franchises/ co.-owned: 65/0 Incentives: Franchise fee waived for first 10 veterans to join system; 10 percent off franchise fee thereafter Valpak Direct Marketing Systems Direct-mail and digital advertising Startup cost: $82.2K–$200.8K Franchise fee: $15K–$17.5K Total franchises/ co.-owned:…