Start-up End of Year Legal To-Dos

Around this time every year, some business effectively shut down, whether physically or mentally. (You folks with restaurants and storefronts that have to work every moment till New Years, sorry). Regardless of your “closing down” situation there are still a few things on your to-do list, whether you know it or not.

I spoke with Charley Moore, Founder and CEO of Rocket Lawyer about some things for start-ups to think about before the end of the year. Rocket Lawyer has created a “Legal Health Score” that goes through some of the basics that every start-up company should consider, in a simple, step-by-step fashion. The closer you are to 100, the healthier your business may be.

Simple things can improve your score, including having an incorporation, doing regular corporate meetings with minutes, or creating employment agreements for your employees. Moore should know about this stuff. He’s helped venture funds and early stage startups, like this small company called Yahoo! (a long time ago) make sure they were set in the proper legal structure.

“The end of the year is a great time to think about the administration of your business,” said Moore. “Think about your corporate structure and consider if incorporating at this time will give you a new year of different tax treatment, or protect your company as it goes into a new phase. If you’re already incorporated, make sure you keep minutes of a corporate meeting at the end of the year. Estate planning is also important. Even if you are a business owner, you are a person first. The way you’ll divide your business should something happen is important, and there are changes to estate taxes in 2011 that you need to pay attention to.”

Rocket Lawyer did a recent survey of 1000 business owners and found one of the main reasons that businesses avoid seeking counsel is the expense. But services online like Rocket Lawyer and others including CorpNet (profiled a few month ago in "A Start-up Helps You Incorporate") can provide you with documents and legal services. Rocket Lawyer also provides connections to lawyers in your area who can assist you when the pre-made forms and services are not enough.

One of the nice features in Rocket Lawyer is the ability to create form legal documents by answering questions using a simple web interface. It took me about 5 minutes to create a letter to send to a customer who is behind in payments.

Finally, funding the business is often something startups are thinking about. Moore said “There is seasonality for fundraising. Heading into January - it's a high water mark for fundraising for loans, venture or angel loans. Yearend is the right time to be prepared to hit the ground running in January - if you are not ready, you may miss the investment calendars for investors.”

You can learn more about Rocket Lawyer’s end of year advice in a new release they published after my interview with Moore. What are you doing to "close out the year" for your start-up?

Finally, I'd be remiss if I didn't mention a very smart program from American Express called "Small Business Saturday." Launched to compete with big box store's "Black Friday" promotions, it has continued past November. Amex card members can get a $25 credit for shopping at small businesses on Saturdays through the end of this year. The website has materials that small businesses can use to promote this effort at their stores. There's also a charity aspect - as more than 1MM people "liked" this effort on Facebook, American Express donated a million dollars to Girls, Inc. Certainly worth checking out, because we all support the Start-ups and small businesses here, right?

Happy Holidays to all!

Denise Richards Jennifer Sky Samantha Mathis Samantha Morton Grace Park

Innovation Agents: Diane Hessan, CEO of Communispace

Diane Hessan, CEO of Communispace, believes in the power of consumer communities to generate ideas and innovation.

When you're at the helm of a ten-year old, $50 million social network that's growing at a rapid clip, you might take innovation for granted. Not so with Diane Hessan, CEO of Communispace.

Sure her company has enjoyed a compound annual growth averaging 39 % in the last five years. And yes, Communispace sailed out of the dot-com bust and the recession on double-digit margins and a client retention rate of 90 percent. But rather than rest easy, Hessan's still hungry: for smart growth, scaling Communispace's corporate culture, and ways to make a transformational difference for her clients.

"We ended up in a space that's recession-proof," Hessan tells Fast Company. But that's partly because she understood the depths of the economic slump were a time of opportunity--a lesson learned as a girl working alongside her father in his sewing machine repair shop. "I've said every day it's a terrible time to lose touch with your customers."

Communispace's staff, therefore, is constantly tasked with looking for better ways to build and manage about 400 private online customer communities they've created. "We do an enormous amount of innovation within the communities," she explains, "Not from big, scientific, quantitative research. It can be one consumer saying something that changes everything."

From lone voice to new product

That's exactly the kind of innovation that gave birth to Godiva Gems. Contrary to what you might think, says Hessan, those tasty individually-wrapped candies were not the product of tons of market analysis. Instead, while talking to consumers about the way chocolate is used to entertain, one woman confessed she didn't share the contents of her gold Godiva boxes. Hessan says the wheels started turning immediately. "It spurred a completely different conversation," one that pushed Godiva's product developers to figure out what a package of share-able chocolates would look like.

For Hessan, the most important thing Communispace does to innovate is to get immersed in the life of their customers. "New ideas are a dime a dozen. The key is to find the right idea that's really going to add value and transform the way you do something to make it so much better."

Smart failure and intelligent growth

It's also the way Communispace evolved from its focus on employees within organizations to consumer groups. Hessan likes to say that the company has made more mistakes than anyone else. A critical one at the beginning was building software so large companies with staff in far-flung locations would have a way to share best practices.

Chase Manhattan Bank (in its pre-J.P. Morgan days) eagerly signed up. The result? A flop. "Out of 200 people, only seven users," Hessan admits. "It was a just a complete 'nice to have.'"

Yet from failure came a new idea via a conversation with then-potential client Hallmark. Once the switch was made to creating consumer communities, growth was fast. "I'm a huge believer in serendipity," says Hessan.

But Hessan is also quick to point out that growth can be destructive without well-managed capacity. Communispace does execute annual planning, but more important, Hessan believes, are the two-hour management meetings that take place every Monday. Studying weekly metrics allows the company to finesse an emergent strategy instead of simply reacting to changes.

"Our priority is always to take care of existing clients," she says. "It is so sexy to have a brand-new account, but building value for customers you already have is a kind of growth that's a much more gratifying and sane way to grow."

Growing forward

Hessan says her biggest challenge now is maintaining the Communispace culture as they continue to grow. From the logistical difficulties of packing more than 300 people into the company cafeteria for a staff meeting to the daunting prospect of remembering more names, it's enough to keep any CEO up at night.

Yet here's another instance where Hessan presses innovative thinking into action. "Usually when you hear scale you think about finances and margins. I think the key is to figure out how to scale leadership," she muses. "My job now is mostly about developing strong leaders in the organization."

Hessan maintains her strength is hearing the one person who is saying something profound, giving them the tools and getting out of the way. "At this stage of my career it's not my job to invent the idea, but to be discerning."

This interview is part of a series about the paths that innovators took to get where they are today. See more Innovation Agents.

Gabrielle Union Alessandra Ambrosio Amanda Detmer Emma Stone Raquel Alessi

Yes Virginia, That's Salvage Santa

I love when the holiday spirit and the entrepreneurial spirit merge. We're having one of those moments in Panama City, Florida right now. It's a story that begins with a terrible tragedy; a shoot-out at a school board meeting of all places. But, it ends with heroes, charity for children and an outpouring of generosity from all over the world (courtesy eBay, of course).

I won't spend much time on the gunman. Suffice it say, he was clearly a troubled soul. He barged in on a very routine school board meeting last week. After some attempts to negotiate his grievances, he opened fire. Miraculously, no one was shot - but him. First, the security guard disabled him with a shot. Later, he turned the gun on himself. This time, fatally.

It wasn't just the lives of the remaining innocents spared, humanity survived too. In fact, it has found a way to thrive.

First there's school board member, Ginger Littleton, who was one of the women allowed to go by the gunman during the standoff (even a deranged gunman can be a gentleman, I suppose). Upon her release, Ms. Littleton doubled back and tried to take him out with her purse. The video is incredible, as you may have seen on national news accounts by now.

Then there's the security guard, Mike Jones, who finally brought down the gunman. Mike Jones is not new to the hero business. He's been doing it for years in his community refurbishing used bicycles and collecting toys for children in need at the holidays. For 27 years years, he's been known this time of year as "Salvage Santa".

Salvage Santa hasn't missed a day of work since the shooting. In fact he's working overtime. I am happy to report Salvage Santa has shown no squeamishness in capitolizing on his heroic efforts at the school board shooting to boost holiday donations for his cause. Good on him, I say! Compare this to the usual book deal and paid appearances on cable television. This is truly the "spirit" part of "entrepreneurial spirit".

If only more of us would get in touch with the spirit part of ours, too!

Ginger Littleton has. She's put her infamous purse up on eBay with proceeds pledged to help Salvage Santa buy more toys and bikes. Incredibly, the bureaucrats of eBay made her take it down briefly. Salvage Santa isn't a registered charity, so it violated their charity auction criteria. The matter was resolved and the purse is back up. As of this writing, the bidding is now over $1200.

Back to Salvage Santa, himself: Let's remember that for the previous 26 years this man didn't need to be thrust into the middle of a national headline story cast in the role as hero to merge his holiday spirit with his entrepreneurial one.

Neither do we.

I thank him for the reminder. This year, I believe he's salvaging a lot more than bicycles. Now, what can we do?

Rachel Blanchard Sienna Guillory Tricia Vessey Aki Ross Ashley Tappin

Review: Now, Build a Great Business

The Book: Now, Build a Great Business: 7 Ways to Maximize Your Profits in Any Market by Mark Thompson & Brian Tracy, Amacom, Hardcover, November 2010.

Obviously, I read a lot of business books. I read business books on how to love your customers, how to hire and fire, how to think big, how to narrow your focus, how to be more creative and yet more disciplined. Such in-depth attention to select issues is incredibly useful to business practitioners who know to just which problem they should apply their attention. But for new or growing business owners, a more holistic treatment to the business of doing business is needed, and that is what Mark Thompson and Brian Tracy's new book, Now… Build a Great Business, provides.

The front flap on Now, Build a Great Business pronounces: "You'll find no theory here—just practical steps you can take immediately, with simple explanations of exactly how to measure how well you're doing at each step along the way." For some, this approach may seem rote, but the authors, absolute business gurus, make the material fresh and memorable.

And being memorable is important. None of us have the time to reference back to books we've read in the past, so we need easy mnemonic devices to remember some of this key advice in times of need. Thompson and Tracy make complex and subjective concepts structured and linear.

To be a good leader, they suggest that you remind yourself of three key Ps: Purpose. Passion. Performance. When hiring, follow their Law of Three: Always interview at least three people for a position; Interview the candidate you like in three different places; Have the candidate interviewed by at least three different people.

Stocking their book with stories and brief anecdotes about other companies' successes, failures, decisions and risk-taking, the authors enable you to assess your own company and mindset—all with the goal of devising a plan with measureable goals. In one of the most simple and useful sections of the book, the authors offer "a very simple sample set of thirty-three measures to inspire or provoke you to create your own dashboard for your business."

After reading each chapter, you'll be given a worksheet where you can reflect on your own personal experiences by way of the terminology and wisdom given. I particularly love the last question on the worksheet, "What one action are you going to take immediately?" Now, Build a Great Business is oriented toward action and will help you be too.

Reviewer Jack Covert is the founder of 800-CEO-READ, a leading bookseller to corporations and large organizations, based in Milwaukee.

Drew Barrymore Marley Shelton Thalía Brooke Burke Thandie Newton

GLBenchmark 2.0 Released - Modern SoCs Benchmarked

We've constantly on the lookout for new benchmarks to use for benchmarking the latest SoCs in devices. Today, Kishonti Informatics released the latest version of its popular GLBenchmark suite for measuring graphics performance on both iOS, Android, Symbian, Windows Mobile, and Maemo. We've been testing it out for a while now and have some numbers of our own and from the community results.

Read on for more details and results from devices we've got our hands on.

Kelly Monaco Gisele Bündchen Jennifer Aniston Amy Cobb Deanna Russo

The Dark Side of Web Tracking

The Washington Post exposes a dark secret of online retail: The use of a customer's past purchase history—or even his or her web usage—to extract the highest price possible.

One way they fight back against picky customers is through "dynamic pricing," also called "discriminatory," "personalized," or "variable" pricing. And, for the most part, customers have no idea it is happening.

In its most brazen form, it works like this: Retailers read the cookies kept on your browser or glean information from your past purchase history when you are logged into a site. That gives them a sense of what you search for and buy, how much you paid for it, and whether you might be willing and able to spend more.

They alter their prices or offers accordingly. Consumers - in the few cases they recognize it is going on, by shopping in two browsers simultaneously, for instance - tend to go apoplectic. But the practice is perfectly legal, and increasingly common - pervasive, even, for some products.

That's via Chris Kulczycki, CEO of one of my favorite online retailers, Velo Orange, which, Kulczycki notes, does not engage in the practice.

As a customer, his Tweet made me happy. It also made me think that this could be a looming issue as Congress looks into some of the shadier Internet advertising practices.

About a year ago, when buying a plane ticket that mysteriously went up in price at the last minute, I became convinced that the airline was employing the very same tactic. "Apoplectic" was a mild description of how I felt. The customer service agent assured me up and down that my suspicions were unfounded, that the airline did not adjust prices based on web surfing. Now I'm not so sure—and I'm guessing this practice will cause a fair amount of consumer outcry, maybe even action by regulators.

Earlier this week, USA Today reported on a plan by the FTC to create a Do Not Track database that would allow people to opt out of so-called "behavioral targeting," whereby retailers customize ads based on your web surfing. (Behavioral targeting, which accounts for more than 80 percent of all ad campaigns according to the article, is the reason that handbag has been following you around the web in banner ads.)

The advertising industry insists that behavioral targeting is good for consumers—who doesn't want targeted ads, after all?—but I think it's going to be harder to make that argument if they're using it to raise prices.

Laura Prepon Ashley Scott Michelle Behennah Julie Benz Saira Mohan

Logitech Laptop Speaker Z305

One last journey into the land of audio yields curious results; when last we spoke with Logitech they gave us the Z515 wireless speaker set, a curio that seemed destined for a niche market. Today we have on hand the Z305 laptop speaker, a far more practical solution to the common problem of dismal notebook speakers. The Z305 is essentially a long barrel that clamps on to the lid of your notebook, plugs in to the USB port, and threatens to improve your listening experience. At $59 it's fairly reasonably priced, so the question is...just how well does it work?

Bar Refaeli Jessica White Anna Friel Monica Bellucci Minki van der Westhuizen