The Venture Edge

I was recently crusing the Inc.com website when I ran across an interesting article that I thought was worth sharing. The article -- The $4 Million Complaint Call -- was written by Ron Burley, founder of Broadcast Software International, a technology startup. Ron's company specializes in the development of digital audio and automation software for broadcast radio stations. Four years after founding his company, he had grown it to 16 employees with a customer base spread across 40 countries around the globe. However, Broadcast Software was at a crossroads in its life -- Ron could no longer afford to fund the company's growth by himself, and it desperately needed an infusion of outside capital. Unfortunately, investment in technology companies had dried up, and there was no outside capital to be found anywhere. If something didn't change, and soon, the company would likely collapse. 

I recently read an interesting article on the trendwatching.com website about one reason why people buy some products and not others. According to the article, people embrace brands that are flawsome, that is, they behave more humanly and are not afraid to show their flaws. 

On Tuesday and Wednesday of this week, I participated in a very interesting seminar here in San Diego: The Art of Science Learning: Shaping the 21st-Century Workforce. As many of you may be aware, the United States faces an innovation gap that is growing wider with each passing year. According to John Lechleiter, chairman, president, and CEO of pharmaceutical giant Eli Lilly and Company, "A recent study ranked the U.S. sixth among the top 40 industrialized nations in innovative competitiveness, but 40th out of 40 in 'the rate of change in innovation capacity' over the past decade. The ranking, published last year by the Information Technology and Innovation Foundation, measured what countries are doing -- in higher education, investment in research and development, corporate tax rates, and more -- to become more innovative in the future. The U.S. ranked dead last." The bottom line is that our nation is falling behind the rest of the world when it comes to innovation, and this problem is getting worse, not better. 

It’s a common phenomenon that even the savviest entrepreneurs can stumble trying to take their businesses to the next level. Marco Giannini wasn’t new to entrepreneurship and he wasn’t new to failure. While an MBA student at the University of Southern California (and one of my students I'm proud to say), he launched Clear Day, a natural beverage company designed to take advantage of consumers’ desire for functional beverages. That business failed in 2003 from a lack of customer validation and too much money spent on product development. Not one to dwell on failure, Giannini decided to take his experience in functional beverages into a new area. His childhood dog had suffered from arthritis and hip dysplasia, so he began to study how supplements in dog treats might help dogs live happier lives. After finding a manufacturer to produce his first product—Happy Hips—Giannini began driving all around California visiting pet store owners to get them to try his product. He also handed out samples at sporting events. When a customer wrote to him to tell him that her aging dog was now able to walk normally after two years of Dogswell treats, he knew he had a hit.

I would like to start by saying that I agree 100 percent with my blog-mate Kathy Allen's last post: It's the private sector, st...d! This so-called economic stimulus plan has become just another boondoggle -- welfare for an ever-growing list of special interests with cozy Congressional relationships. As soon as this river of cash runs out (which it apparently now has), then of course the result will be economic contraction. It's no coincidence that the economic term "double-dip inflation" is suddenly gaining increased attention in the press. 

If you've got a small-ish business and you're looking for financing, you know that there are plenty of challenges. One of these challenges is the fact that many banks are still holding back on making loans at all. Another challenge is that companies are bumping up against the SBA (Small Business Administration) loan limits. Fortunately, progress is being made in Congress to help in both these areas.

When a business is really starting to take off, there are any number of potential obstacles blocking the way to success. As employees are hired, the money begins to come in, and things really start humming, it's easy to think that everything you touch will turn to gold. This is, of course, rarely the case. In reality, it's at just this critical point in the growth of your company that you've got to remain disciplined in your goals, and not overreach. This a lesson that Ken Wolf learned the hard way.

Given the choice, most entrepreneurs would prefer their businesses to grow -- not get stuck on a plateau or, heaven forbid, shrink. But there are times when growth isn't good, and as an entrepreneur, you need to know when to grow -- and when to lay low.

In any business, there are times when you'll hit a ceiling -- when growth slows and sales flatten. How do you get jumpstart your engine of growth and get your business moving again?