10 STARTUP MISTAKES TO AVOID

Make Your Mark

IF YOU CAN

The

LEADERSHIP

LEAD
Issue

YOU WILL

SUCCEED
MARCH 2016 | ENTREPRENEUR.COM

22

Must-Have
Leadership
Qualities

How
to Be
Fearless
Without
Being
Scared

Lessons
Every
Startup
Needs
to Know
Right Now

Its All About

46
The words that push
leaders buttons.

26

36

46

76

90

99

Fear Less

What Makes a
Great Leader?

The Leader
Creates the
Culture

The 10
Mistakes
that Threaten
Startups

Franchise the
Unexpected

Top New
Franchises

In an industry of
copycats, fresh
ideas stand
out. Meet four
franchisors who are
thinking ahead.

2016s most
promising business
opportunities,
ranked.

You ght fear

every day as an
entrepreneur.
Guess what? You
can beat it.
Heres how.
By Jason Ankeny

ENTREPRENEUR 3/16

Start with these

22 qualitiesand
the wise words of
leaders who strive
to embody them.
By Adam
Bornstein and
Jordan Bornstein

Master these
leadership skills
and your companys
tone and identity
will fall into place.
By Brian
Patrick Eha

The more you know

them, the less youll
make them.
By Paula Andruss

By Tracy Stapp
Herold

By Jason Daley

ON THE SUBSCRIBER COVER: The leadership chess piece

and the buttons above, photographed by David Rinella.

16

10
Editors Note
The thin line
between fear
and leadership.
By Amy C.
Cosper

12
Feedback
Words from
our readers.

Culture
15

18

24

Esquire Guy

The Ethics
Coach

Marketing

How to ask for a

favor. (Its easier
than you think.)
By Ross
McCammon

16
Business
Unusual
After a harrowing
fall on a snowy
mountain, a climber
creates slip-on ice
spikes that change
his industry.

When helping out

can do the exact
opposite.

Three warning signs

that youre not as
loved online as you
could be.

By Gael OBrien

By Ann Handley

20

24

Travel

Ask a Pro

Can your hotel

make you healthier?
Check in, tone up,
and nd out.

How much about

my company
should I reveal
to investors?

By Elaine Glusac

By Christopher
Hann

58

Tools
55

58

62

Shiny Object

The Fix

Future Tools

Brew technically
perfect coffee in
your break room.

A new back-end
technology platform
boosts sales.

By Seth Porges

By David Port

A smartphoneconnected sensor
listens to busted
machines to ID a x.
By Marty Jerome

56
Ask a Geek
Does your biz
need virtual reality?
It might.
By Mikal E.
Belicove

ENTREPRENEUR 3/16

62

CLOCKWISE FROM TOP: COURTESY OF KAHTOOLA;

ILLUSTRATION BY ANDY MARTIN; PHOTOGRAPH BY CHRIS DELORENZO

By Dina Mishev

Where theres business

theres EPSON.
Epsons innovative solutions are helping millions of businesses exceed their
vision in more ways than youve imagined. Like robots that improve quality
in factories worldwide. Industrial dye sublimation printers that marry fashion
and technology. Mobile POS solutions for exceptional customer service. Digital
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help businesses run at full speed. See all the ways that Epson helps businesses
succeed, at epson.com/forbusiness

EPSON Business Solutions

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epson.com/forbusiness

POINT OF SALE

PROJECTORS

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EPSON is a registered trademark and EPSON Exceed Your Vision is a registered logomark of Seiko Epson Corporation.
Copyright 2016 Epson America, Inc.

74
Start
Up
71

65

67

Your Money

Startup
Finance

Are you diversifying

your income?
Youd better start.
By Steph Wagner

66
VC Viewpoint
How you handle
collapse determines
how soon you
can start again.
By Sam Hogg

71

A co-op can be a
smart way to raise
sizable funds.
By Michelle
Goodman

68

College kids turn

a silly sport into
a booming biz.
By Susan
Johnston Taylor

72
Whos Got VC?
GovXs limited
customer base
helps it cash in.
By Michelle
Goodman

Ask the
Money Guy

74

How to pick a bank.

The Process

By Joe Worth

Build your own

businessby
helping others
build theirs.

Franchise

By Carren Jao

85

88

Franchisee

Franchisor

A young immigrant
rises rapidly in the
pizza business.

Like Shark Tank,

Franchise Funding
Group has treps
compete for cash.

By Jason Daley

By Jason Daley

116
Back Page
Stop worrying
and start working.
By James Victore

CLOCKWISE FROM TOP: PHOTOGRAPH BY CHRIS DELORENZO;

ILLUSTRATION BY JAMES VICTORE; PHOTOGRAPH BY BRIAN FINKE

Money

Wacky Idea

Less wait.
More work.
Reduce downtime by 50%, get 4X faster
performance and gain 3X battery life.*
New Latitude 12
7000 Series

Your employees want to do their best

work. Refresh your business and
increase productivity with powerfully
performing Dell technology and Intel
Core processors.
Learn more at
Dell.com/business or 1-877-414-Dell
*Comparing systems four years old or more to new systems. Intel, the Intel Logo, Intel
Inside, Intel Core, and Core Inside are trademarks of Intel Corporation in the U.S. and/or
other countries. Dell, the Dell logo and the Dell badge are trademarks of Dell Inc. 2015
Dell Inc. All rights reserved.

Intel Inside.
Powerful Solution
Outside.

EDITOR IN CHIEF/VP

Amy C. Cosper
EXECUTIVE EDITOR

Jason Feifer

CHIEF CREATIVE DIRECTOR

EDITORIAL
INTERIM MANAGING EDITOR Grant Davis
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Carren Jao, Marty Jerome, Ross McCammon, Dina Mishev,
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Editors Note

FEAR ITSELF
Fear is the mother of foresight.
Thomas Hardy

had an idea for a business, and it made me

giddy. It was so full of
possibility, so compelling and dynamic and burning
and beautiful, that I devoted
my days and nights to thinking
about it. I wanted to make this
idea real. I wanted to live it.

And then I got a chance to make it happen. I

scored a meeting with Brad Feld, cofounder of
Foundry Group, Mobius Venture Capital and
Techstars, and generally just one of the most
influential VCs of our decade. Instantly, my veins
felt colder. My idea no longer felt exciting. It felt
like a horrible secret Id have to reveallike a
thing Id take out of my briefcase and say, in my
most pathetic voice, This is all I have.
But the meeting was set. I arrived at Felds
office, on a snowy day in Boulder. I said things.
I attempted full sentences: I, well, you see, I
think Feld was courteous. He was professional.
He did not fund my idea, of course. Why should
he? What he saw that day was a founder full of

OUR BOARD OF
ENTREPRENEURIAL ADVISERS

fearand no business can survive if its leader

is afraid to stand out in front.
Fear sucks. It really does. It is a raw emotion
that stands between you and greatness. It
invades your body and makes you forget that
you ever had strength. And it is the reason that
you didnt. Didnt chase that dream. Didnt take
that risk. Didnt give yourself the opportunity
to see whats on the other side: the dream
achieved, the risk rewarded, the person who
survived jumping in and now understands the
value of taking a leap in the first place.
This is easier said than done, but Im going
to say it anyway: Stop being scared. Right
now. It is the single most important thing you
can doand you can do it.
How? Thats what this issue is dedicated to.
It contains a feature about fear itself (pg. 26)
how to see it coming, and how to control it.
But this issue is also about leadership, which
just so happens to be the outcome of facing
fear. No leader has gotten to where they
are without slaying demons. A leader goes
forward because they know theres no going
back. They embrace that visceral moment
the one weve all felt at some pointwhen
they have to step on a stage and get it done.
If we feel fear, we will trip on it and fall on
our faces. Entrepreneurs like you can spot a
pothole from a mile away. But then you focus
on it and run right into it. Its a thing, like
skiing: You go where you look.
So do not look at the fear. Look past it to
where you want to be and go through the fear.
Because theres something bright and warm
on the other side of that journeyexperience,
knowledge, empowerment, wisdom, success.
Its waiting for you. And you already know
how to get there.
Now: Go.

Amy C. Cosper
CHRIS DELORENZO
Los Angelesbased commercial lifestyle photographer
DeLorenzo brings soul to his
workand this magazine. His
inspiration comes from his curiosity and the organic nature
of things, especially the sea.

10

ENTREPRENEUR 3/16

ADAM BORNSTEIN
A New York Times bestselling
author, business consultant
and egg lover, Bornstein
surveyed a range of entrepreneurs and thinkers (and even
the Terminator!) for insights
into how to be a great leader.

acosper@entrepreneur.com
@AmyCCosper
Corrected: In the February 2016 issue we wrote
that the wallpaper from designer Electra Eggleston
was based on drawings by Otis James. They are in
fact based on the drawings of William Eggleston.
We regret the error.

Amy C. Cosper photograph by Nigel Parry/CPI

Feedback

Tweetback!
We asked: Whats the most
important leadership skill?
want to follow are those that
wouldnt ask you to do something they wouldnt be willing
to do themselves.
@brad_regul: Trust and

empower.
@DanielleSmetts: A

leader should be authentic,

vulnerable, bold, resilient,
self-aware and adaptable.
@DanPriceSeattle: Have

a compelling purpose and be

accountable for the results of
the individuals and the team
you lead.
@Marianna_B: Be honest

and authentic. Walk the talk.

Admit when youre wrong.
Praise at every opportunity.
Share your passion.
@DesireeMondesir: Serve

your way to the top and keep

serving once you get there.
@_tyholland: I find the

leaders I admire most push

their followers as a support
structure, instead of pulling
from the top.

JOIN US

@mccall_h: Employees w/
brains wired differently than
yours will get on your nerves,
but that counterpoint is
essential. Different is good!
@Dieesta: Strong opinions
loosely held. Great leaders
have a worldview but are
humble enough to change
based on new info.

How have you brought

creativity to your business
latelylike, oh, since our
February issue?

@juliecchance: Ask more

questions and listen longer.

Great leadership is about
facilitating insights. Must set
the stage and hold the space.
@MetisQ: Using bonuses or

stock options to attract and

keep employees always fails.
Build a culture w/a purpose
& empathy.
TELL US ABOUT IT
Our Facebook fans, Twitter followers and discussion groups are
buzzing about what matters most
to entrepreneurs. Come join the
conversation.
Like us on Facebook:
facebook.com/EntMagazine
Follow us on Twitter:
@Entrepreneur and @AmyCCosper
Write to: Letters, Entrepreneur,
18061 Fitch, Irvine, Calif. 92614
fax: (949) 752-1180
email: entmag@entrepreneur.com

Send Will.i.am
to HR?

As an online adjunct professor for multiple schools (both

MBA and undergraduate classes), I have found your magazine helpful to keep me up with the business world. But
I was distressed to see the new trend in highlighting and
circling items within articles. I cant believe that the literacy in this country has sunk to the point that we need
to be told what is important in our professional reading.
That trend I could live without (spelled i-g-n-o-r-e). What I
will not ignore is the vile profanity in one article in the November issue. At all the companies for which I worked, a
professional atmosphere was maintained. Using language
such as you quoted by Will.i.am would have been considered sexual harassment and would have subjected the
foulmouthed person to disciplinary action.
Russ Stevens
SALISBURY, N.C.

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Live + Work

esquire guy

HOW TO ASK
FOR A FAVOR
By Ross McCammon

EY THERE. HI.
Nice shirt. Listen,
I dont normally
do this, but I was
wondering: Could you maybe do
me a favor and read this story?
No?
Hang on, let me rework that.
Id like to ask you for a favor.
Im hoping youll read this story
because I think youll enjoy it
and because it would gratify me
deeply. If you dont have the time
or if youre just not interested,
I'll understand, of course, but
I think youll find it worth your
while. Whatever you decide,
please take this request as a compliment to your taste in media.
That first request? No good.
For lots of reasonsbut mainly
because it assumed that the
request was a hassle.
But favor requests arent
hassles. The way we introduce
the request is often the hassle.
Lets first acknowledge two
surprising truths: People love
doing favors. Also: People really
love doing favors.

Why People Love Doing

Favors. Studies about favors
generally suggestthat we want to
comply with a requestif only to
avoid the awkwardness of not complying.Incentives arent needed.
A lot of context isnt necessary.
Heres how it plays out in the
research lab: In one experiment

Illustration by Paul Sahre

3/16 ENTREPRENEUR

15

Why People Hate Listening to Requests for

Favors. Its simple: indirectness. People hate that. Just say
what you want. Id like to ask
you a favor. Heres what Im hoping you will do. Theres no awkwardness because a)Yourenot
being awkward; b) Theres no
hemming, which is irritating;
and c) Theres no hawing,
which is even more irritating.
The request is introduced as
a simple thing that doesnt
require a lot of discussion or
even thought. The answer is
yes or no. Theres no debate to
be had. No negotiation. If you
actually ask and say, I could really use a favor from you. Could
you do this for me?and ask

16

ENTREPRENEUR 3/16

it directlythats much more

effective,saysVanessaBohns,
who coauthored the studies
mentioned above.We think
beating around the bush is more
polite, when it isnt.
A Favor Request Is All
About the Upshot. The
other important part is: escape.
Itshows respect.The escape in
my request was If you dont have
the time or are just not interested, I understand. We both know
thats true. You didnt need to be
told that. But the request was
more palatable because it took
into account your schedule.I
made clear that I understood
how my request was likely crashing into the hundreds of other
things you could be doing right
nowincluding just staring at a
wall instead of reading this story.
Why People Dont Need
a Reward. The favor request
shouldnt involve a reward.
One, its not necessary. People
are as likely to agree to do
a favor without a reward as
with one. And two, it pollutes
the arrangement. A reward
undercutsthemagnanimity that
comes from simply saying yes.
Magnanimity is worth way more
than the favor youll do for them.
Being asked for something is
flattering,Bohnssays. When
someone asks us for something
particularly for advicewe take
it as an indication that the person
doing the asking respects and
values us. Any kind of promise
for a favor places an unnecessary
pressure on the transaction.
Anyway, about that earlierrequest: You think youll have time
to read this story, or what?
Ross McCammon is a senior
editor atEsquiremagazine and the
author ofWorks Well with Others.
To learn more aboutEsquireand
to subscribe, go toesquire.com.

business unusual

Fall,
Get
Back
Up
HOW A NEAR-DEATH SLIDE
LAUNCHED ONE OF THE
ADVENTURE WORLDS
BEST-KNOWN BRANDS.
By Dina Mishev

rothers Danny and Mike Giovale

are both experienced mountain
climbers and had no problems
on the way up an intense climb
in the rigorous Italian Dolomites. But on the way down, Danny slipped
in a steep, snow-lled gully. I couldnt
stop, he says. As my velocity increased,
I thought, I seriously could die. He didnt,
luckily: He ew off a snow bumper into
water that had warmed on the rocks.
He told other adventurers about his fall,
and he learned he wasnt alone. Almost
everyone, without exception, either had a
similar experience or knew someone who
had, Danny says. There was a tool out
there to help them: crampons, the metal
spikes that attach to the bottom of boots.
But at the time, the only ones available
were heavy and rigid, and wouldnt attach
to hikers exible shoes. His takeaway:
We need a better solution.
So Danny set to work in his garage
in Salt Lake City, designing prototypes for
lightweight, exible crampons. He named
his company Kahtoola, or directly
in Tibetan, and called his product the
Kahtoola Traction System Hiking Crampons. He didnt have a lot of money for
market research, so he booked a postagestamp-size booth at the winter 2001
Outdoor Retailer Show in Salt Lake City, the
industrys biggest trade show. I gured itd
be a great place to get feedback on whether
I was right about there being a need for this
type of crampon, Danny says.
It turns out, he was right: Lots of orders
came in. But he was wrong about who his

COURTESY OF KAHTOOLA

run by professors at Cornell and

Stanford University, participants werechallengedto ask
strangers to fill out a questionnaire, donate to a charity or
allow them to borrow a phone.
Before asking for these favors,
the participants guessed how
many people theyd have to ask
before someone would agree to
complete the request. Then,
faith in humanity was bolstered:
It turns out people were twice as
likely to complete a request
than the participants originally
thought theyd be.Other
studies found that this is also
true of unethical requests,
like vandalizing a library
book.(Please dont do that.)
We often worry about the cost
to that person of saying yes, but
research suggests that the favor
is less of a burden than we think.
People unconsciously justify
why they do it (This person
must like me if they are asking!)
and feel positively toward the
requester. And dont overlook
the emotional costof saying no.
Everyone feels defeated and insecure, including the one doing
the rejecting.

$465

The amount an average outdoor enthusiast

spends on related products every year,
according to the Outdoor Industry Association.

In 2003, Lhapka
Gelu Sherpa wore
an earlier version
of Kahtoolas while
setting the Mount
Everest speed record.

customer was. I was thinking about

climbers and hikers and mountain runners,
he says. Adventure racers didnt even
cross my mind. But those folkswho make
a sport of hustling up mountains in
record-breaking timewere the most
enthusiastic buyers. There werent enough
racers to sustain a company, but Danny
was heartened. Those buyers would give
Kahtoola cred, and then he could pursue
the larger market of hikers and climbers.
During the companys rst year, Kahtoola
sold about 7,000 pairs of hiking crampons,
with revenues of $26,340. The next year,
Kahtoola sold 20,000 pairs.
As the company grewand moved to
Flagstaff, Ariz.its founders scrambled to
keep up. Danny and his brother made every
metal piece for each pair by hand for four
years before nding a manufacturer that
didnt mind working with small production
numbers. But that experience wasnt lost
time. We were learning during that period,
Danny says. When we did nd a manufacturer to work with, we were experts on our
process and knew what mattered most in
the end product. (Even after nding a
manufacturer, the company kept assembling all its crampons in-house for years.)
Kahtoola has continued to add products.
In 2007, it launched MicroSpikes, which
have 12 metal teeth, each about a half-inch
long, on the bottom of a rubberized ring that
can stretch to accommodate anything from
running shoes to bulky Sorel boots. This
product nally locked in those hikers and
runners; sales of MicroSpikes are now
growing at 15 to 20 percent annually. (It
was the MicroSpikes customer that I was
always thinking of, Danny says, but the
form took a long time to get there.) And in
2014, the company launched NanoSpikes,
another stretch-on traction system but with
less aggressive studs.
Today Kahtoola products are found in
471 stores in the United States and 56 in
Canada, and it has international distribution
in Europe, Japan, South America, Australia
and New Zealand. The company isnt
planning any other product launches at the
moment. Basically, our brand is a lot more
about doing a few things really well rather
than doing more things perhaps not so
well, Danny says. Theyre dug in.

3/16 ENTREPRENEUR

17

the ethics coach

THE SORTA-TRUSTED
ADVISER
WHEN HELPING OUT CAN DO
THE EXACT OPPOSITE. By Gael OBrien

Im grooming an employee
to run my next location,
but she has also developed (on her own time) a
prototype for a product
that can benefit clients
in our field. She kept me
informed about the project, and Ive been providing ongoing feedback.
I declined her offer
of partnership because I dont want to
divert time and money, but Im tempted.
She intends to keep
working for me and
is also looking for
investors to take her
product to market
but recently, with my
feedback, she turned
down an investor we
thought wasnt trus worthy. Im happy to
continue advising
her, but could my involvement backfire?
The good news is your
ethical radar detector is
on. The bad news? The volume
is way too low to be of much
help. Dial it up several notches
to avoid good intentions going
wrong. Youve combined being
a boss, training your employee
for a promotion, mentoring
her invention and figuring out
whether you want to partner

18

ENTREPRENEUR 3/16

with herand thats ripe for

potential conflicts of interests.
You have power and influence
over her, and that gives your
ideas, advice and even off-thecuff comments more weight and
impact than you may intend.
Lets start here: Its not ethical
to keep her guessing about
whether or not youre going to
partner with her on the product.
Its time to decide. If you dont
k
fig
f
at
f r
i
ry g
g
g
A
h king
like a partner when you give her
advice? Tell her where you are on
this and be consistent. Conflicts
of interest can creep up when we
arent aware that our self-interest
is impacting our actions.
Also, the roles youre playing
in her work life are at odds with
one another. As a boss, you want
her to stay with the company,
accept the promotion when
offered and not have her investor

search disrupt her job. However,

as a mentor, your focus should be
directed only on her best interests, not on your companys.
Unless you decide to create an
in-house incubator (or, at least,
an inventor-friendly climate
in your workplace), its unlikely that other employees will
barrage you with inventions.
But just in case, you need to

figure out what your businesss

standard of fairness should be.
It will keep you from inadvertently creating an impression of
favoritism, which is always toxic
to a workplace.
Gael OBrien is publisher of
The Week in Ethics and founder
of coaching/consulting rm
Strategic Opportunities Group.

Illustration by Brian Rea

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YOUR
HOTEL MAKE
YOU HEALTHIER?

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Stay Well Rooms

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& Restaurants

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The 14th oor of the MGM Grand

features extra soundproong,
puried and humidied air, ltered
tap water, blue lighting (said to
counter jet lag), an alarm clock
that simulates dawn with nature
sounds and increasing light and
a vitamin-C-infused shower that
lters out chlorine.

Varies per location. Seattles Alexis

Hotel has a new CrossFit gym with
a rock-climbing wall, monkey bars
and more. Hotel Vintage Portland
in Oregon holds weekly pickup
games with its bellman, a former
semi-pro player. At the Hotel
Marlowe in Cambridge, Mass.,
kayaks come comp.

Its new Sleep Well Menu provides

herbal tea, plus snacks with
vitamins and minerals said to
aid rest and recovery. Coming in
June: lavender sleep balm, to be
applied to pulse points for calming
aromatherapy.

Biz
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Free wi-, ample electrical outlets

and ergonomic room desks.

The Stay Well Lounge offers a

similarly freshened meeting space
on the oor.

Need a workout buddy in D.C.?

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manager bikes with guests; the
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The casino below, plus 29

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Complimentary wine hour daily.

Follow the bacon aroma to the

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meeting? Sounded like we were at a petting zoo.
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packaging of the month

2
G
i

e au c
: Make a first
i

Soma a sed $
, 0 on
Kickstarter but knew that
its product would arrive
at peoples homes like
any other: This is what
the FedEx guy would
show up with, says Tom
Crabtree, creative director
at Manual, the branding agency that helped
Soma. It needed to be
unexpected and iconic.
The packaging was made
circular to echo Somas
bubbly logo.

2014:
t l
G : Keep he brand,
s
l n the
.
The tube was a hit with
customers but expensive
to ship and used lots of
excess material. A simple
cardboard box solved
those problems but
lacked personality. The
solution: A blue-coated
interior, with bubbles
rising from within. We
wanted to give our customers a nice branded
surprise, says Liang Shi,
Somas creative director.

20
G

The molded paper

clamshell form-t
the glass carafe and
slid seamlessly out
of the tube.

Go with
the Flow

Soma sells a modern, efcient twist

on water ltration. Heres how its
packaging evolved with its business.
By Ian Frisch

The new
packaging
debuted Somas
new slogan:
Come on in,
the water is ne.

New box, same

color palette
white on the
outside and pale
blue inside.

On the Shelf
: T p he
p i io .

22

ENTREPRENEUR 3/16

PHOTOS ON LEFT COURTESY OF SOMA

In February 2015, Target

picked up Soma. For
retail, you cant just have
a brown cardboard box
on the shelf and expect
people to know what it
is, Shi says. The company tried putting a photo
of its lter on a box, but
the image didnt pop.
We said, look, lets just
showcase this beautiful
design straight-up, says
Crabtree. And so, a layer
of packaging was again
peeled away.

Photograph by Yasu & Junko

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ask a pro

Truth
Time
Q

How do I tell all

without scaring
potential investors?

marketing

Solve Your
Social Woes
3 WARNING SIGNS THAT YOURE NOT
AS LOVED ONLINE AS YOU COULD BE.
By Ann Handley

N MARKETING, you can be too social. Or not social

enough. Or social where it doesnt countthe digital equivalent of showing up at the wrong party. How to know if this
applies to you? Here, three signs that you need to fix your
strategyand where you need to double down.

Warning #1: You arent seeing any business results.

Solution: Results can mean so many thingsincreasing brand
awareness, building authority in your industry, boosting sales or
conversions, giving your brand personality, servicing customers or
something totally different. Theres no way your social media presence
will accomplish all those things at once, so focus on just one or two
goals to start. Figure out what your top priority is, and then think about
using social media more strategically to accomplish that goal.
Warning #2: You feel like youre shouting into the ether.
Solution: You may not be using the appropriate social networks.
If youre a company with largely rural customers, for example, what
are you doing on Twitter? According to the Pew Research Center,
that platform is far more popular with urbanites. Theres no rule that
you have to be on every platform, so pick the ones that match your
audience. One way to figure that out: Check your websites Google
Analytics to see which networks are most robustly referring traffic.

24

ENTREPRENEUR 3/16

Thats where your audience is.

Now go meet them there.
Warning #3: Your followers
rarely like, share or comment.
Solution: Are you being too
self-promotional? Take a look at
MailChimps social media. The
company sells email services, but
its content focuses on making
email suck a little less for us all.
(Recent tweet: Our content
calendar makes us really happy.
Heres why you should use
one, and a link to read more.)
Saddleback Bags sells leather
goods, but its social content
frequently focuses on the
adventurous lives of people who
use them. What both have in
common: Rather than being selfpromotional, theyre creating
value for their audience. Think
about the ways your products
or services can help people and
the larger context in which your
company operates. Thats what
your customers want from you
and if you deliver, theyll like it
(and share and comment).
Ann Handley is the author of
Everybody Writes: Your Go-To
Guide to Creating Ridiculously
Good Content. @annhandley

Its a critical
balancing act, but
remember: Investors
want to hear everything. Kevin
q
founder of San Diegos
Fident Capital, whos
been on both sides of
this discussion, offers
three critical steps:
1. Dont whitewash.
Most entrep
s
want to coddle
potential investors,
Choquette says, but
thats foolish: Everything will come out in
due time anyway, so
its better if it happens
early. Be honest about
the magnitude of the
challenge, he says.
2 Identify the challenges ahead t might be
your ability to recruit
the right talent. It
might be the general
condition of the capital
market. Whatever it is,
Choquette says, lay it
out. That way, prospective partners are prepared for whats next.
3 Say how youll meet
the challenges Tout
your tea s
ngths.
If you have a solid
entrepreneurial track
record, talk it up. Do
you have a proven ally
in R&D? In distribution? In marketing?
Show them your
previous experience
in building an A team,
Choquette says.
Christopher Hann

Illustration by Stuart Bradford Illustration

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ENTREPRENEUR 3/16

[innovators]

ngela Mader still feels

the fear. It follows her silently, waiting
to strike. It tags along at meetings,
wanting nothing more than to cover her
ears and eyes, so that the Very Important
Thing someones telling her is blocked by
that Very Scary Thing instead. And lets
be clear: Mader is not some rookie, having just plunked down her life savings
on a hunch. She cleared the first hurdle
back in 2008, when her health and fitness
startup, fitlosophy, began its ascent to
sales in 10 countries and retail partnerships with Amazon, Target and Walgreens.
No, Mader has already faced fear and
survived. But that doesnt matter. A
healthy level of fear is always present
or lurking, causing me to question everything, she says. Its not only my future
on the line here. I have families that
depend on me to pay their bills, and I
have a responsibility to my customers.
The fear that Oh my gosh, this is not
going to work is very real.
Its also very common.

No entrepreneur needs to be told this:

Fear comes with the territory. If you dont feel
it, quit your job right now, because theres
an opening on SEAL Team Six waiting
for you. The only question is, what kind
of fear do you feel? Roughly 30 percent of
all U.S. entrepreneurs confess to a fear of
failure (and the numbers spike even higher
in Europe and Asia), according to a Global
Entrepreneurship Monitor report from last
year. Uncounted: those who fear embarrassment, or being wrong, or losing the
trust of everyone they just hit up for cash,
or whatever. About half of all new startups
tank within the first five years, the U.S. Small
Business Administration reports, so theres
certainly reason for alarm. Entrepreneurial
Americans rank launching a company
second on the countdown of the scariest
life-changing events they may face, trailing
only concerns about retirement savings.
Whats less scary to them? Divorce. Firsttime parenthood. Relocating to a new city.
You know, the easy stuff.
But listen: Thunderstorms are common,
too, but you dont see people giving in to
themjust standing there when the rain
starts pounding, looking down to watch
their shoes fill with water. Something may be
common, but that doesnt mean its inescapable. To be an entrepreneur is to worry and
be scared. Were all just scared of different
things, says Craig Dubitsky, founder and
CEO of oral-care-product manufacturer
Hello, based in Montclair, N.J. The scariest
thing to me is not bringing your idea to life.
You dont want to have any regrets. Regrets
just suck. Youve got to be willing to go all in.
If youre not built that way, you cant be an
entrepreneur. Itll never happen.
The result of giving in to fear? Dubitsky
nails it: paralysis. Left unchecked, fear can
cripple the entrepreneurial psychehalting
innovation and thwarting goals. Fear is an
anchor; it drops down, heavy and determined, and does not stop until it has stopped
you. Fear destroys. Fear inhibits. Fear is a
business that never begins, or an investment never made, or a decision deferred
forever. Fear is the thing you dont know, but
youre convinced that its the thing you dont
want to know.
But take heart from these numbers:
Roughly 100 million businesses still launch

3/16 ENTREPRENEUR

29

[innovators]

worldwide each year. Thats three entrepreneurs facing fear every second. Thats
11,000 entrepreneurs an hour who said,
To hell with it! Theyre not special, those
people. Theyve just figured out a simple,
critical mind trick, one theyll need to
return to and refine countless times over
the lifetime of their business. And that trick
is this: Make fear work for you.
Last year, Mader was talking to a
friend who has started a few companies.
Entrepreneurs are some of the most insecure people youll ever meet, the friend
said, because theres always something to
prove. And Mader paused, because those
words felt so true. She does have insecurities. And yet, she wants to keep proving.
My faith in what Im capable of doing
is greater than my fear of doing it. I know I
will figure it out, she says. Too little fear
of failure results in recklessness; too much
fear guarantees complacency. But I know
that if I operate in a place of fear, I will
never, ever get where Im going. And Ive got

30

ENTREPRENEUR 3/16

big things to do. Im grateful for the fear. Its

what drives me.
Its what should drive us all.

efore we talk about what were

afraid about, lets just talk about
being afraid. Fear: Its an abstract
thing. If you were dunked in honey and then
deposited alone in the woods and a bear
started approaching, you would experience
real fear. That is Im-about-to-die fear. And is
that what youre feeling when youre burning
through cash and that first big client just
cannot make up their damn mind? Well
Theres fear the emotion, and when you
experience fear the emotion, its unmistakable, says Dan Gardner, author of Risk: The
Science and Politics of Fear. Then theres
fear that is used almost as a metaphor for
anxiety, worry and concern, which may or
may not be experienced as a conscious emotion. If Im thinking of going into business,
and I do my analysis and realize theres a lot

of risk here and I may go bust, I may say that

I am experiencing fear. But its not fear in the
same sense you would experience when a lion
lunges at you.
First bears. Now lions. But hey, youre
facing neither. (Except for you, guy launching
a grooming service for wild predators. Best of
luck!) What youre feeling is more complexa
whole range of emotions and worries and
forecasting gone amok. And what good is that
information? Honestly, its not life-changing.
But it should remind you of something
important: You may feel like theres an
imminent disaster, but there probably isnt.
Thats just your brain thinking way too many
steps aheadthat this thing could go wrong,
and then that thing, and then the other thing.
Thats anxiety. Thats internal. Thats you
doing this to yourself.
[Former Intel CEO] Andy Grove nailed
it. The title of his most famous book was Only
the Paranoid Survive. I think thats absolutely
true, says Steve Blank, a serial Silicon Valley
startup founder who once took a company,

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[innovators]
E.piphany, through a $66 million IPO. (And whats he
afraid of? Waking up every morning knowing what my
burn rate was, how much cash I had left in the bank, and
the day, hour and minute I was out of business, he says.
Oh, and people not wanting his product, and his best
employees leaving him, and)
He likes that title because it doesnt discount worriers.
Blind optimism? Now that will get you in trouble. His
bet is always on the founders who know bad things will
happenand have steeled themselves for the possibility.
Theyre people who have already proven themselves
in other high-pressure training grounds like military
combat, dysfunctional families or just other tough startups. Theyve been trained how to deal with chaos and
uncertainty and fear, and theyve learned to shut down all
the things that are extraneous to survival, he says.
Havent done any of that? Latch on as an early employee
at another startup to get hands-on experience with the
day-to-day challenges, or sign up for hack-a-thons, startup
weekends and entrepreneurship coursesanything that
can simulate the pressures of a startup, he says. And then
when youre in the hot seat at your own company, do as
the most experienced founders do: anticipate. You need
to constantly plan for what could go wrong. You need to
have not just plan A but also plan B, C and D. I was always
thinking multiple moves ahead. What do I do about cash?
How do I raise money? How do I get customers? If your
head isnt churning 24/7 on multiple levels and multiple
things, youre gonna get screwed.
Only the paranoid survive.

lthough, is that true? The paranoid may not

trust anyone. They may be afraid to leave
their desks, working nonstop and treating
Delivery.com like a lifeline. Nahnot all paranoid survive.
The survivors have something else. Because this is the
most important thing of it all, the greatest weapon against
fear. It isnt naming thy enemy (anxiety!), and it isnt
having a game plan (or three or four). The most important
thing of it all is:
Making decisions. Only the paranoid who know how to
make decisions survive.
When youre afraid, you stick with what you knowand
thats the state youre in now, unchanged by any future
decision making. Startups have scant time and resources
to waste on stagnation. And so, you need to adopt a bias to
action. Its a phrase Blank likes to use. Its a little wonky,
but it makes a good point: You should favor action over
inaction. You dont want to study something forever. You
dont want to say the phrase Lets circle back, because
you will never truly circle back. What does it even mean
to circle back? Where else does the circle take us? Your
employees hate that phrase. Quit it.
You learn very quickly that if you dont have a bias to

32

ENTREPRENEUR 3/16

Shift to
Low Fear
HOW DO WE DIAL DOWN OUR FREAKEDOUT MINDS? SCOTT HALFORD, AUTHOR OF
ACTIVATE YOUR BRAIN AND THE FOUNDER
OF THE CONSULTANT GROUP COMPLETE
INTELLIGENCE, EXPLAINS.
Interview by Clint Carter

This is the rst time Ive

done an interview for
Entrepreneur. If I blow it,
my career could suffer.
Should I be a little afraid?
Sure. One of the triggers of
fear is uncertainty, and you
dont know how this
interview will turn out. We
have about seven times as
much architecture in our
brains to detect threat as
we do for spotting reward.
Its evolutionary; it has
allowed us to survive. Were
not erce, fast or strong.
Were just smart. And were
exquisitely sensitive to
things that feel dangerous.
Doesnt it seem like we
should have some kind of
built-in mechanism that
helps us differentiate
between life-threatening
danger and, say, whether
a meeting is going well?
We do have that mechanism. Its called the frontal
lobe. Every piece of
information you meet in the
world triggers an emotion,
which tells you whether to
believe something is true,
dangerous or right for you.
So when you have an
emotional response to
somethinga deadline, for
instancethats the animal
brain putting you on high
alert. The frontal lobe is the
cognitive part of the brain

that says, You dont really

need to be that afraid. This
gives intelligence to our
emotions. The downfall to
emotion is that if its strong,
it sties your ability to
access your prefrontal
cortex. I tell the people I
counsel, when youre
feeling anxious and you
know youre inating the
risk of something, literally
walk away.
And what, this will give
you more courage?
It will. Danger is magnied
through a stress hormone
called cortisol. It focuses
danger in your brain. Taking
a break resets the neurochemistry so that the stress
response goes down.
What about when youre
on a deadline? Its still
good to take a break?
Absolutely. In my book I talk
about research that says we
need a break from intense
cognitive work, the kind that
uses the frontal lobe, about
every 57 minutes. And that
break should last for 10 or
15 minutes. I rounded down
to make it a perfect hour,
and now I call it the 50-10
rule. And it works. Set an
alarm to go off after 50
minutes, and then go
distract yourself. Hardcharging entrepreneurs

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[innovators]
action, you end up frozen in fear. You die, and the people
around you die, Blank says. Shit happens all the time:
New competitors come up, VCs change their mind, blah
blah blah. You need to figure out what to do. You dont
have time to waste.
Where to start? Blank has some more jargon for the
occasion: revocable decisions or irrevocable decisions.
Divide and conquer the questions that await you. That
price change or marketing tweakcan you change it
later, if the decision turned out to be wrong? Yes, you
can. Thats a revocable decision. Make it now. How about
that long-term office lease or venture capital offercan
you change that later? No, thats an irrevocable decision.
There are fewer of those, and youre allowed to take longer
on them. Youre welcome.
The point is: Make decisions and see what comes
from them. The more steps you take, the more impact
youll see, and that will inform your next steps. Become
experienced. And dont be afraid to ask for advice.
You want to surround yourself with really grounded
folks who help you deal with things, partly because
theyre not exactly like you are. Thats really helpful,
says Hellos Dubitsky. Thats where a good board of
directors comes in, along with good investors and good
friends in and around your business whove been entrepreneurs themselves.
This may sound obvious. Thats OK. Good, even. It
means theres no secret to defeating fearno mutant gene
contained within the 11,000 entrepreneurs an hour who
launched their companies. Fear is common, and so is
overcoming fear. Its a part of the process.
And for arguments sake, lets just say the worst
happens: You fail. Your fears are realized. The business
closes, the employees are laid off, maybe someone writes
an embarrassing news story about you. Tears are shed.
Some people are pissed. Some jerk, somewhere, says, I
told you so. And thenwell, what?
There will be nothing left to fear, thats what. It happened. You survived. And youre free to try again.
Thats how it went for Jim Snediker, whose last company, the flash-sales curation site Left of Trend, folded
in mid-2012. There wasnt any part of me that was like,
This wont work out until Id done Left of Trend for a
while and realized its pretty hard to build an e-commerce
business with no money and no competitive advantage,
Snediker deadpans. But I wanted to do something good.
I didnt want to have to go back to the job I was doing with
my tail between my legs. That was the fear and motivation
driving me. So you keep trying different things. And he
did: Within weeks of his failure, he cofounded a menswear company called Stock Mfg. Co., which hes now CEO
of. It reinvigorated me.
Theres nothing to fear. The worst is never as bad as you
think. Again, that is, unless youre the guy facing down
the bear. That probably is just as bad as you think.

34

ENTREPRENEUR 3/16

and Im one of themthink

we can plow through the
day, skip lunch, work
nonstop. When we do that,
were setting ourselves up
for bad decision making
and increased fear.
Say I pitch you an idea for
a great startup, and after
Im done, I say, Ah, but I
could never make it
work. What do you say?
Id say youre confusing fear
with a lack of condence.
Condence is a very
different thing. It has fear
based in it, sure: Youre
afraid youre not good
enough. But its different.
So whats the relationship?
Say youve just nished a
proposal, and youve
submitted it to the client.
What a lot of people do
after that is they let anxiety
and fear build up. That
dents their condence,
which starts to affect the
rest of their life.
You second-guess
yourself.
Thats what we call useless
rumination. Youre re-eating
it. Thats what cows do. OK,
maybe you did screw up the
proposal. But theres not
one thing you can do about
it now. It goes back to that
adage: Hope for the best,
but expect the worst.
Because if you expect the
best and then you dont get
it, it causes depression. And
then we begin to fear the
next disappointment,
because nobody likes
depression. So do you see
these circular patterns?
Absolutely. It sounds like
fear is an emotion we
experience more acutely,

and the long-term effect is

an erosion of condence.
Thats exactly right. People
with condence are willing
to step out and try something where they dont
already know the outcome.
People with fear, when
somebody comes back to
them and says, I dont
know if this is going to
work, they say, Yeah,
thats what I gured. They
dont ask for feedback or
redirection. We feed the
fear, which erodes our
condence, which then
feeds fear again.
But its hard to imagine
CEOs like Jeff Bezos or
Marissa Mayer being
afraid of a business
decision.
Id venture to say theyve
made lots of decisions that
they were afraid about. But
again: Dont confuse
condence with fear. Bezos,
Jobs, GatesI bet theyd
tell you that theyve faced a
lot of uncertainty. What we
see are their successes, but
I bet theyre meeting failures
all the time.
How about talking about
my fear: Will that fortify
my courage?
Youre weaker if you dont
talk about it. You know,
more women get cancer,
but more men die from
cancer. One reason is that
men dont go to therapy.
They dont talk about it. But
I would counsel against
using the word fear here.
Language matters. When
you talk to somebody, you
say, Here are my concerns, or Here are my
challenges. Then you start
to reframe the emotion. You
start to talk yourself down.

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What
Makes
a Great
Leader?
22

Start with these

qualitiesand the wise
words of leaders who
strive to embody them.
By Adam Bornstein and Jordan Bornstein

36

ENTREPRENEUR 3/16

LEAD + SUCCEED

#1

Focus

Its been said that leadership is

making important but unpopular
decisions. Thats certainly a partial
truth, but I think it underscores the
importance of focus. To be a good
leader, you cannot major in minor
things, and you must be less distracted
than your competition.To get the
few critical things done, you must
develop incredible selective ignorance.
Otherwise, the trivial will drown you.
Tim Ferriss, bestselling author,
host of The Tim Ferriss Show

INSPIRATION

PEOPLE ALWAYS SAY IM A SELF#5 MADE MAN. BUT THERE IS NO

SUCH THING. LEADERS ARENT
SELF-MADE; THEY ARE DRIVEN. I ARRIVED
IN AMERICA WITH NO MONEY OR ANY
BELONGINGS BESIDES MY GYM BAG,
BUT I CANT SAY I CAME WITH NOTHING:
OTHERS GAVE ME GREAT INSPIRATION
AND FANTASTIC ADVICE, AND I WAS
FUELED BY MY BELIEFS AND AN INTERNAL
DRIVE AND PASSION. THATS WHY IM
ALWAYS WILLING TO OFFER MOTIVATION
TO FRIENDS OR STRANGERS ON REDDIT.
I KNOW THE POWER OF INSPIRATION,
AND IF SOMEONE CAN STAND ON MY
SHOULDERS TO ACHIEVE GREATNESS, IM
MORE THAN WILLING TO HELP THEM UP.
Arnold Schwarzenegger,
former governor of California

#2 CONFIDENCE
A leader
instills
confidence and
followership
by having a
clear vision,
showing
empathy and
being a
strong coach.
As a female
leader,to be
recognized I
feel I have to
show up with
s
r
d

assertiveness,
yet always try
to maintain
my Southern
upbringing,
which
underscores
kindness and
generosity.
The two work
well together
in gaining
respect.
Barri Rafferty,
CEO, Ketchum
North America

Transparency Ive never

#3 bought
into the concept of

wearing the mask. As a leader, the

only way I know how to engender
trust and buy-in from my team and
with my colleagues is to be 100 percent authentically meopen, sometimes flawed, but always passionate
about our work. It has allowed me
the freedom to be fully present and
consistent. They know what theyre
getting at all times. No surprises.
Keri Potts, senior director of public relations, ESPN

#4

Integrity
Our employees are a direct reflection of the
values we embody as leaders. If were playing
from a reactive and obsolete playbook of
needing to be right instead of doing whats
right, then we limit the full potential of our
business and lose quality talent. If you focus
on becoming authentic in all your interactions,
that will rub off on your business and your
culture, and the rest takes care of itself.
Gunnar Lovelace, co-CEO and cofounder, Thrive Market

2/16 ENTREPRENEUR
3/16

37

#6
LEAD + SUCCEED

#7

INNOVATION

In any system
with nite
resources and
innite expansion
of population
like your
business, or like
all of humanity
innovation is
essential for not
only success but
also survival.The
innovators are
our leaders.You
cannot separate
the two. Whether
it is by thought,
technology or
organization,
innovation is our
only hope to solve
our challenges.
Aubrey Marcus, founder, Onnit

38

ENTREPRENEUR 3/16

#8

Passion
YOU MUST LOVE WHAT YOU DO.IN ORDER TO
BE TRULY SUCCESSFUL AT SOMETHING, YOU
MUST OBSESS OVER IT AND LET IT CONSUME
YOU. NO MATTER HOW SUCCESSFUL YOUR
BUSINESS MIGHT BECOME, YOU ARE NEVER
SATISFIED AND CONSTANTLY PUSH TO DO
SOMETHING BIGGER, BETTER AND GREATER.
YOU LEAD BY EXAMPLE NOT BECAUSE YOU FEEL
LIKE ITS WHAT YOU SHOULD DO, BUT BECAUSE IT
IS YOUR WAY OF LIFE. Joe Perez, cofounder, Tastemade

PATIENCE

Patience is really courage

thats meant to test
yourcom mitment to your
cause. The path to great
things is always tough,
but the best leaders
understand when to abandon
the cause and when to stay
the course. If your vision
is bold enough, there will
be hundreds of reasons
why it cant be done and
plenty of doubters. A lot
of things have to come
togetherexternal markets,
competition, financing,
consumer demand and always
a little luckto pull off
something big. Dan Brian, COO, WhipClip

#9
Stoicism

Its inevitable:
Were going to nd
ourselves in some
real shit situations,
whether theyre
costly mistakes,
unexpected failures
or unscrupulous
enemies. Stoicism is,
at its core, accepting
and anticipating this
in advance, so that
you dont freak out,
react emotionally
and aggravate things
further. Train our
minds, consider the
worst-case scenarios
and regulate our
unhelpful instinctual
responsesthats
how we make
sure shit situations
dont turn into fatal
resolutions.
Ryan Holiday,
author of The Obstacle
is the Way and former
director of marketing,
American Apparel

Wonkiness

#10

UNDERSTANDING THE UNDERLYING

NUMBERS IS THE BEST THING IVE
DONE FOR MY BUSINESS. AS WE
HAVE A SUBSCRIPTION-BASED
SERVICE, THE BIGGEST IMPACT
ON OUR BOTTOM LINE WAS TO
DECREASE OUR CHURN RATE.
BEING ABLE TO NUDGE THAT
NUMBER FROM 6 PERCENT TO
4 PERCENT MEANT A 50 PERCENT
INCREASE IN THE AVERAGE
CUSTOMERS LIFETIME VALUE.
WE WOULD NOT HAVE KNOWN TO
FOCUS ON THIS METRIC WITHOUT
BEING ABLE TO ACCURATELY
ANALYZE O
DATA
Sol Orwell,
cofounder,
Examine.com
No.

11

Authenticity
Its true that imitation is one of the greatest forms of flattery, but not when it
comes to leadershipand every great leader in my life, from Mike Tomlin to
Olympic ski coach Scott Rawles, led from a place of authenticity. Learn from
others, read autobiographies of your favorite leaders, pick up skills along
the way... but never lose your authentic voice, opinions and, ultimately,
how you make decisions. Jeremy Bloom, cofounder and CEO, Integrate

3/16 ENTREPRENEUR

39

LEAD + SUCCEED

Open- #12
mindedness
ONE OF THE BIGGEST MYTHS IS
THAT GOOD BUSINESS LEADERS
ARE GREAT VISIONARIES WITH
DOGGED DETERMINATION TO
STICK TO THEIR GOALS NO
MATTER WHAT. ITS NONSENSE.
THE TRUTH IS, LEADERS
NEED TO KEEP AN OPEN MIND
WHILE BEING FLEXIBLE,
AND ADJUST IF NECESSARY.
WHEN IN THE STARTUP PHASE
OF A COMPANY, PLANNING
IS HIGHLY OVERRATED AND
GOALS ARE NOT STATIC.
YOUR COMMITMENT SHOULD
BE TO INVEST, DEVELOP
AND MAINTAIN GREAT
RELATIONSHIPS.
Daymond John, CEO, Shark Branding and FUBU

#14

Personableness

We all provide something unique to this world, and

we can all smell when someone isnt being real.
The more you focus on genuine connections with
people, and look for ways to help themrather than
just focus on what they can do for youthe more likable and personable you become.This isnt required
to be a great leader, but it is to be a respected leader,
which can make all the difference in your business.
LEWIS HOWES, NEW YORK TIMES BESTSELLING
AUTHOR OF THE SCHOOL OF GREATNESS

40

ENTREPRENEUR 3/16

#13
Decisiveness

In high school
and college, to
pick up extra
cash I would
often referee
recreational
basketball
games. The
mentor who
taught me how
to ofciate
gave his refs
one important
piece of advice
that translates
well into the
professional
world: Make
the call fast,
make the call
loud and dont
look back. In
marginal situations, a decisively made
wrong call will
often lead to
better longterm results
and a stronger
team than a
wishy-washy
decision that
turns out to
be right.
Scott Hoffman,
owner, Folio Literary
Management

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LEAD + SUCCEED

#15

EMPOWERMENT

Many of my leadership philosophies were learned as an athlete. My most

successful teams didnt always have the most talent but did have teammates
with the right combination of skills, strengths and a common trust in each
other. To build an overachieving team, you need to delegate responsibility
and authority. Giving away responsibilities isnt always easy. It can actually
be harder to do than completing the task yourself, but with the right project
selection and support, delegating can pay off in dividends. It is how you truly
nd peoples capabilities and get the most out of them.
Shannon Pappas, senior vice president, Beachbody LIVE

#16

Positivity

In order to ach
greatness, yo
must create
a culture of
optimism. T
will be many
and downs, but
the prevalence
of positivity
will keep the
company going.
But be warned:
This requires
fearlessness.
You have to truly
believe in making
the impossible
possible.
Jason Harris, CEO, Mekanism

42

ENTREPRENEUR 3/16

#17
GENEROSITY My main goal has always been to offer the
best of myself. We all growas a collective wholewhen Im
able to build up others and help them grow as individuals.
Christopher Perilli, CEO, Pixel Mobb

#18 Persistence
A GREAT LEADER ONCE TOLD ME,
PERSISTENCE BEATS RESISTANCE.
AND AFTER WORKING AT FACEBOOK,
INTEL AND MICROSOFT AND STARTING MY
OWN COMPANY, IVE LEARNED TWO MAJOR
LESSONS:ALL GREAT THINGS TAKE TIME,
AND YOU MUST PERSIST NO MATTER WHAT.
THATS WHAT IT TAKES TO BE A LEADER:
WILLINGNESS TO GO BEYOND WHERE
OTHERS WILL STOP.
NOAH KAGAN, CHIEF SUMO, APPSUMO

LEAD + SUCCEED

Insightfulness

#19 It takes insight every

day to be able to separate that
which is really important from
all the incoming re. Its like
wisdomit can be improved
with time, if youre paying
attention, but it has to exist in
your character. Its inherent.
When your insight is right, you
look like a genius. And when
your insight is wrong, you look
like an idiot. Raj Bhakta, founder, WhistlePig Whiskey

W
o e

COM U

If people arent
aware of your expectations, and they fall
short, its really your
fault for not expressing
it to them. The people I
work with are in constant
communication, probably
to a fault. But communication is a balancing act.
You might have a specific
want or need, but its
superimportant to treat
work as a collaboration.
We always want people
to tell us their thoughts
and ideasthats why
we have all these very
talented people working
with us.

#20

Kim Kurlanchik Russen, partner, TAO Group

g
he i ies i e

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#21

Accountability

Its a lot easier to assign blame than to

hold yourself accountable. But if you want
to know how to do it right, learn from
financial expert Larry Robbins. He wrote
a genuinely humble letter to his investors
about his bad judgment that caused their
investments to falter. He then opened
up a new fund without management
and performance feesunheard of in
the hedge fund world. This is character.
This is accountability.Its not only taking
responsibility; its taking the next step to
make it right. Sandra Carreon-John,

No.

22

It takes real leadership to

nd the strengths within each person
on your team and then be willing to
look outside to plug the gaps. Its
best to believe that your team alone
does not have all the answers
because if you believe that, it usually
means youre not asking all the right
questions. Nick Woolery, global
director of marketing, Stance Socks

senior vice president, M&C Saatchi Sport & Entertainment

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By Brian
Patrick Eha
Typography by
Adam Lowe
Photographs by
David Rinella

46

ENTREPRENEUR 3/16

LEAD + SUCCEED

Build a
culture
of

CREDIT GOES IN THIS SPACE HERE

IN 2012, CHEF NIKI NAKAYAMA WAS LIVING HER

dream, preparing traditional Japanese kaiseki feasts at her

Los Angeles restauran
Then her sous chef quit without
notice. I had been accustomed splitting tasks with him, she
says, but now everything fell on her shoulders. She dove in,
preparing exquisite, labor-intensive meals of nine or 13 courses
but with less leadership available, her minimal staff suffered.
What was going on? The problem may have been culture.
In traditional Japanese kitchensnot unlike some traditional
American officessubordinates are expected to watch and learn,
rarely ask questions and never debate the head chefs ideas.
I am not a great teacher, Nakayama admits. Thats why the
loss of her sous chef was so acute: The staff had lost a certain kind
of leader, someone who could speak Niki, bringing order to her
creative chaos and translating her instructions for everyone else.
Nakayama couldnt fill the hole herself.
She came to a realization: Everyone should be aware of their
weaknesses and overcome them as a team. Nakayama fixed her
own problem by hiring Carole Iida, a fellow chef whom she was
dating at the time. Where Nakayama was messy and spontaneous,

Illustration by Firstname Last

working off the top of her head, Iida was organized and reliable, and could guide the staff. She brought in her organizational abilities, and we were able to put everything together for
other people to understand, Nakayama says.
As a result, the 2016 Zagat guide has awarded n/naka the
top spot for food among L.A. restaurants, a dramatic rise from
eighth place the year before. Now Nakayama encourages all
her workers to focus on their strengthsto pull out that best
part of ourselves and just contribute that all the time, without
spending too much time trying to fix the weaknesses that we
have, she says. Its far more productive in a team environment. Its knowing and respecting each others strengths and
weaknesses that makes a great team.

3/16 ENTREPRENEUR

47

LEAD + SUCCEED

Build a culture of

48

ENTREPRENEUR 3/16

analysisand maybe even conducting experiments to determine the best course of action. It
means trusting a clear, quantitative approach that
everyone can understand. And it means not using
language thats limiting. Heres a phrase Krakauer
hates: Thats not how we do things around here.
No. He is adamant on this point: Anyone caught uttering that phrase, he says, should be put down.
Like scientists, business leaders should wield
evidence as a tool of persuasion, Krakauer
believes. He quotes physicist Richard Feynman:
Science is the belief in the ignorance of experts. Its a hard lesson to learn, but a necessary
one: Your gut instinct is not sufficient. If you
want to persuade top talent to follow your lead,
youd better be able to back up your arguments
with more than your job title.

CREDIT GOES IN THIS SPACE HERE

, N EXTREMELY

w
fi
center, sets a
high bar for sc e fi q y
more than 250
researchers affiliated with SFI are investigating the
fundamentals behind the worlds biggest problems
cancer, fast-spreading viruses, global economies, you
name it. And its president, accomplished scientist
David Krakauer, knows one thing for sure: When
working with all these great minds, he cannot always
be the smartest one in the room. He sometimes thinks
of himself as a colonel leading an army of generals.
So how does he lead them? The authority of my
position is not worth shit, he says. When Im talking
to someone who is more accomplished than I am,
my opinion is not the most compelling argument.
The most compelling argument is rigor. You have
to speak the language of rigor.
Speak the language of rigor. That means supporting every idea with observation, evidence and

Illustration by Firstname Last

Aw, thanks @bamadesigner, we like you too.

We like to think Slacks changing the way that
teams communicate. But dont take our word for it.
slack.com/love

Work on purpose

LEAD + SUCCEED

Build
a culture
of
C

A TECH STARTUP THAT

00 companies and other brands

do content marketing, was founded by three
guys in New York in 2010. That trio has since
grown to a staff of about 100. And along the way,
cofounder and chief creative officer Shane Snow
feared a disturbing change: The energy driving
that growththat scrappy, do-anything attitudecould easily cool. Employees might become
timid in large groups, afraid of earning the ire of
the majority. Most people and most companies
reach a plateau at a certain point, and at many
points, says Snow. Its crazy how quickly even a
disruptive, rebellious startup can get to the point
where they say, Thats not the way things are
done here. (There it is, that phrase again.)
So Contently made sure not to let that happen.
For example, Snow limits meetings that involve
problem solvingwhere employees really need to
speak upto three or four people. And challenges
keep Contentlys big team feeling scrappy. For example, Snow often asks for 10X ideassay, How
can we improve customer happiness by 10 times?
Employees are game, he says: They do want to
keep things fresh. A leaders role is to create the
right opportunities.

50

ENTREPRENEUR 3/16

Time for another forbidden phrase: Dont

bring me problems; bring me solutions.
Leaders use that phrase because they think
it inspires employees to take initiative, says
Adam Grant, a professor at the University of
Pennsylvanias Wharton School and author
of Originals: How Non-Conformists Move the
World. But instead, it teaches employees not
to speak up about a need unless they have
a proposal for fixing it. When you ask for
solutions, you create a culture of advocacy
rather than a culture of inquiry, Grant says.
Most creativity, most innovation happens
when somebody points out a problem thats
not yet been solved.
Snow wants to hear it all. He and his
cofounders set aside a few free hours every
week so any employee who wants to chat (in
or, preferably, outside the office) can do so. Its
an invitation to hear about those problems
that are in search of solutions. When someone brings in a perspective that hasnt been
heard yet, Grant says, it often forces you to
reconsider your decision criteria, to bring in
new informationand that ultimately is good
for your process.

Were blushing, @RonellSmith. Thank you.

We like to think Slacks changing the way teams
communicate. But dont take our word for it.
slack.com/love

Work on purpose

LEAD + SUCCEED

Build
a culture
of
G

SSOC

i
m g g
f
sovereign wealth funds, corporate
and public pensions, foundations
and university endowments. Its
founder, Ray Dalio, is widely seen
as a financial genius. And yet, after
a meeting with a potential client
one day, an employee several levels
down on the org chart fired off a
blistering email to Dalio. He accused the boss of being unprepared
and disorganized, and gave him a
gradeD-minus!for his behavior.
I dont know many organizations
where you can send an email like that
to the billionaire founder and keep
your job, says Grant, the Wharton
professor who shared the incident
in his book, Originals. But instead of

52

ENTREPRENEUR 3/16

lashing out, Grant says that Dalio asked others who had participated in the meeting to assess his performance. The email
exchange was then forwarded to the entire staff, effectively
turning Dalios misstep into a case study.
This is how Bridgewaters culture works, according to
Grant: Everyone is accountable to everyone. The staff is
expected to routinely rate coworkers on a range of 77 qualities,
including somelike the willingness to touch a nervethat
might not be prized at other companies. The firms 1,500
employees can even assess their bosses, and the more incisive
the critique, the better. And all this data, including the name of
each person who left feedback, is available to any employee.
Its extreme. It wouldnt work for most companies. Thirtyfive percent of new hires dont make it past 18 months. But
consider what Bridgewater is going for: It wants employees to
feel that hard work is recognized, and that the company values
transparency. Find ways to bring those traits into your workplacebecause when an employee feels comfortable enough
to challenge you, and youre able to turn that into a lesson in
leadership, then youve created a culture in which everyone
can do their best work.

Thanks, @AshleySamour. Heres to being useful together.

We like to think Slacks changing the way that teams
communicate. But dont take our word for it.
slack.com/love

Work on purpose

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The Right

shiny object

THE FIX C
FOR
YOUR FIX

TECHNICALLY PERFECT COFFEE IN THE

BREAK ROOM? ITS POSSIBLE.
By Seth Porges

Photograph by Yasu & Junko

OFFEE SNOBS ARE rarely happy in offices. Thats

because the vast majority of automatic machines
dont deliver the most essential elements to brewing
good coffee, says Emma Sage, coffee science manager at the Specialty Coffee Association of America, the countrys coffee police. They heat the water too much or not enough,
dont give the water enough contact time with grinds and often
cannot hold the proper dose of coffee without overflowing. But
the SCAA does certify a rare few automatic makers for creating
perfect joeand one of the best is the Oxo On 12-Cup Brewing
System. The secret: a removable kettle (meaning the hot water
is available for tea, too) that exactingly portions water to hit the
grinds during the brew cycle. Bonus: Its 12-cup capacity minimizes office fights over the last drops. ($300; oxo.com)

3/16 ENTREPRENEUR

55

ask a geek

Do I Need
Virtual
Reality?
EBBE ALTBERG, CEO OF LINDEN LAB
(MAKER OF THE VIRTUAL 3-D WORLD
SECOND LIFE), THINKS YOU MIGHT.

RANDS ARE ALREADY experimenting with VR. Among them, the NBA shows
360-degree game footage, Marriott Hotels loans headsets to guests so they
can take tours of exotic destinations and Ford uses VR to help design its vehicles interiors. By the year 2020, Altberg believes, VR companies will be generating more than $150 billion a year in revenuesand you may want a part of that.

Isnt this a little

speculative? I dont even know
anyone with a VR headset.
Thatll change sooner than you think. VR
has wide business potentiala company can
connect with remote staff as if they were all
in the same room, a carmaker can offer test
drives, real estate brokers can provide buyers
with walk-throughs of entire buildings and a
dressmaker can even offer a virtual fitting for
a wedding dress.

Cool, but how do I know if

VR is worth it for me?
Are 3-D environments and spatial

relationships important in your line of

worksay, architecture, interior design or
product design? Do your employees require
expensive or potentially dangerous training
in fields such as medical procedures, heavy
equipment, product installations or hazardous materials? VR could be an effective tool
for you. And if you have prospective customers, partners or others with whom you meet
face-to-face frequently, VR might save you a
bundle on travel.

So where would I start?

Check your budget. There arent many
companies creating custom VR content

today, and the ones that do are expensive

like Unity, which also makes blockbuster
video games. Youll also need to hire artists,
videographers and software engineers. The
price could easily top $1 million. Dont have
the cash? Dont despair. In the early days of
the internet, a website was expensive to build,
too. Not anymore.

How far away are we

from a VR boom?
For some industries, VR will become a
critical component in the next few years. For
others, it will probably be more like five to 10
years. And by that time, VR will be far more
impressiveand cheaper.
As told to Mikal E. Belicove

Write On!

The pen can still be mightier than the screenbut

what if you need both? The Wacom Bamboo Spark
($159) is a Bluetooth-connected folio with space for
a tablet on one side and a pad of 5.8-by-8.2-inch paper on the other. Scribble away on the paper with the
Sparks stylus/ink pen and your notes are reproduced
in digital form on the tablet. When youre done, press
a button and the notes zip over to the Bamboo Spark
iOS app, where they can be stored or shared, preserving your doodles for all time. John Patrick Pullen
56

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Illustration by Max-O-Matic

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the fix

BOOMING PRODUCT,
BUSTING SALES
SOMETIMES THE PROBLEM ISNT WHAT YOURE SELLINGITS THE TECH YOURE USING.
By David Port
OSA LABS launched in 2013 with a oneperson engineering department and
off-the-shelf e-commerce apps: one for
subscription orders and one for single
orders. But then the companys product
Soylent, the soy-based meal-replacement drink thats
huge with techiesbecame a hit, and Rosa Labs
convoluted app setup began hindering growth. So
cofounder and CTO John Coogan decided to start
from scratch. He hired a three-person development
team and gave them their rst task: Decide which
development platform to use to build the companys
new, completely customized ordering system.

The Fix
Coogans team researched many
systems, looking for one that
matched their needsand their
resources. Rosas IT team would
remain small, but the company
expected to grow and would
want to update its software
regularly. That led them to the
cloud-based Heroku platform,
which is known as a platformas-a-service. It allows clients
to develop their own integrated
e-commerce app, back-end

John Coogan of
Rosa Labs.

database and other systemsbut

without paying for servers, or
locking them into something
that could become outdated. Its
extremely good at removing the
grunt work of getting servers set
up and having code executed on a
reliable basis, Coogan says.

The Results
Rosa Labs now has a fully custombuilt system that can handle
customers orders, offer new
upsells and push surveys to collect
customer feedback. Since it was
installed last spring, the companys site runs markedly faster
and its subscription conversion
rate spiked 84 percent. That led
to a 24 percent increase in meals
shipped. And because Herokus
system can always handle updates,
Rosa Labs developers roll out new
code an average of 2.97 times per
dayinstead of once every couple
months, like before.

The Second
Opinion
Before you go the same route,
consider your IT needs: Does investing in customized tech make
sense, given where your company
is in its growth cycle? And if it
does, do you have the resources,
talent and attention capital to
do it right? A custom approach
tends to drain money and time,
says Chris Locher, VP of software
development at the Minneapolisbased web-development firm
Nerdery. But the resulting gains
can quickly offset that drain.

58

ENTREPRENEUR 3/16

Photograph by Chris DeLorenzo

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A New Wayto
Do Payroll

This startup claims to reduce the bimonthly task

to less than five minutes. By Vanessa R ich ard son
ZENEFITS IS ONE
of those Silicon
Valley unicornsa
billion-dollar
company once the
darling of investors.
It grew by offering
free accounting and
automated, cloudbased HR programs
for small businesses (and made its
money selling health
insurance). But after
three years of boom
times, the companys revenue growth
slowed. So now
its expanding its
servicesand the
companys attempt
to save itself may
also save entrepreneurs a big hassle.
The new product: automated, free
payroll services.
The service,
which is still being
tested with a small
group of companies, aims to handle
payroll for employers of any size. It
automates state tax
lings in all 50 states
and deductions for
health and retirement benets and
adjusts paychecks
based on vacation
days and sick leave
taken. It handles
prorated checks for
new hires as well as
COBRA premiums
and nal payouts
for exiting employees. (An upgraded
version, at $25 plus
$4 per employee
per month, lets
companies tweak
deductions or
contributions for
benets programs
outside of Zenets.)
The company is
aiming to roll out the
service on April 1.

60

ENTREPRENEUR 3/16

The idea came

out of necessity.
Last summer,
paycheck-processing behemoth ADP
cut off access for
Zenets clients,
so the startups
founder, Parker
Conrad, decided to
treat the crisis as an
opportunity. There
are so many irritating things about
payrollpaperwork,
admin, complianceand Im convinced we can make
wide swaths of that
go away by having
a single, integrated
system of records
that connects to

everyone, he says.
Should you sign
on? Maybebut
keep the risks in
mind. Zenets is still
young and trying to
do complex, disruptive stuff. They
havent quite gured
out the legal and
licensing regulations
for selling benets
online, says Jody
Padar, CEO of New
Vision CPA Group
in Walnut Grove,
Ill., and author of
The Radical CPA,
so what if youve
entered your payroll
and they get shut
down before your
employees get their

paychecks?
But so far, at
least, early adopters
seem pleased. One
of them is Tivilon, a
nine-person company in Baltimore
that produces
healthcare-focused
digital marketing. It
was using Zenets
for HR and health
insurance services,
and CEO Mark Zawodny says payroll
is just as easy to
use. Weve run four
payrolls successfully, he says, and it
only takes me three
minutes each now,
instead of 20 to 60.
That is invaluable.

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future tools

The Best-Trained Ear

NEW TECH TROUBLESHOOTS
BY LISTENING IN.
By Marty Jerome

WHEN A MACHINE is in
prime working order,
its parts hum in literal
harmony. And when that
hum turns to whirring or
clicking? Thats what Augury
is for. The Israel- and New
Yorkbased startups device
can listen to any machinefrom
a jet engine to a household
applianceand identify whats
wrong, or even predict whatll
break next.
Heres how it works:
Augurys ultrasonic sensor
plugs into a smartphone. (The
company provides it for free;
it charges only for usage.) A
techniciansomeone at your
company, say, or the repair
person you calledplaces the
device on a machine; audio data
is relayed to Augurys servers,
and a diagnosis is made. Then
the fixing can begin.
Hartford Steam Boiler
definitely likes the sound of
that. The $1.2 billion company,

9.8%

the stat:

62

which provides equipment-breakdown insurance and other specialty

coverage, is now a partner.
Whats most exciting to us
is the deep knowledge they
will ultimately have about
patterns in equipment failure, says Jacqueline Lesage
Krause, managing director
of HSBs strategic corporate
ventures. Their tagline is
Machines talk, we listen.
Weve been waiting for this
day for a while.

ENTREPRENEUR 3/16

That was 2015s growth in mobile phone

and smartphone salesthe rst single-

digit (as opposed to double-digit) growth

ever. What does it mean? Perhaps that
the world is saturated in phones. Now
the mobile wars will move even more
heavily into prices (dropping!) and features
(growing!) as carriers ght for customers.
Source: Worldwide Quarterly Mobile Phone Tracker, IDC

Illustration by Andy Martin

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Making + Managing

your money

EARNINGS FROM
EVERYWHERE

ARE YOU DIVERSIFYING YOUR INCOME? YOUD BETTER START.

By Steph Wagner

VERYONE CAN AGREE: A business should never rely on just one

customer to generate the majority
of its revenue. When that client
moves onpoof!there goes the business.
But you need to apply that thinking to the
bigger picture, too. Are you relying upon

Photo Illustration by Yasu & Junko

your business to generate all your personal

income? Thats a problem.
Dont think of it as a knock against your ability as a business owner or your company. All
youre doing is hedging, and thats smart. For
example, one of my clients is a lawyer. She does
well, but her business, like any business, has

ups and downs. So she also bought the building

that houses a Wendys franchise in Michigan,
which provides her a 7 percent annual return
on a lease that runs in five-to-seven-year increments. (I own rental properties, too. And
as I wind down my businesswhich, hey, isnt
happening yet!that cash will fund a sizable

3/16 ENTREPRENEUR

65

vc viewpoint
chunk of my retirement income.)
So how much of your income should
be diversified? The answer depends
on your circumstances, tax situation
and goals. Make a plan with your financial adviser. Heres mine right
now: Im 45, with a decent amount of
investable assets, so only 20 percent
of my income is passive. Barring some
unforeseen financial emergency, all
that money is strategically reinvested.
Now heres where it gets interesting: Once you begin generating passive income, you can invest it in ways
that build more wealth and eventually create, yup, more passive income.
Lets say you net $2,000 of income
each month from a piece of rental
property. Reinvest that income, like
my lawyer client did, and it could earn
7 percent annually. After 10 years,
youve got $334,000. Even $500 of
additional income each month could
turn into almost $100,000 in 10 years,
depending on how you invest it.
There are many ways to save and
reinvest, but the process all begins
the same way: As soon as your business kicks off enough income for you
to start using that money judiciously,
open your eyes to new income opportunities. You worked hard for that
moneyand that money should be
given the opportunity to work just as
hard for you.

BE A
SUCCESSFUL
FAILURE
By Sam Hogg

How you handle

collapse determines
how soon you start again.
THE CEO OF A STARTUP we funded called to tell us his tough decision: He
had $1 million in the bank, and he was shutting down his company. Crazy,
right? Not really. He had set a benchmark for progress and failed to reach it,
and so he was returning the remaining capital to investorssaving us all from
making millions in wasted, additional investments. We were so impressed that
weve since handed him the reins at two other problematic companies.
Some of my best experiences with CEOs were during the worst situations
for their companies. Exiting gracefully takes precision and tact, and VCs will
take notice. Here are the qualities Ive come to admire in CEOs of struggling
startups. Youd do well to adopt them yourself.
HONESTY. Nothing frustrates investors more than a CEO who is so
optimistic that he or she refuses to recognize the bumpy road ahead.
When it looks like things will be getting tough, it is far better to keep
investors informed than surprised.Don't wait for good news to share;
investors like more dialogue when growth numbers are missed, burn
is higher than expected, or a new, well-funded competitor emerges.
PLANNING. Entrepreneurship is emotional, so take feelings out of
the equation. Preemptively map out your stage gates, the specic
objective metrics (revenue, funding, etc.) that initiate specic courses
of action (proceed as planned or wind down the company). Share
them with your team and investors, and stick to them.
ACCOUNTABILITY. Winding down a company is not trivial work.
Aside from the unpleasant need to re people, a leader has to deal
with expectations from lenders, investors and customers. Respected CEOs make sure all these matters are settled before moving on,
even if the outcome is difcult for everyone involved. Investors, who
are often stuck with all this dirty work when leadership bails early,
especially appreciate this accountability.

Steph Wagner is a private equity

investor and nancial strategist.
@StephLWagner

How I Saved

Sam Hogg is a partner with Open Prairie Ventures and Huron River Ventures. @SamHogger

$9,000

Peter Spenuzza, CEO of Rise Bar, Irvine, Calif.

One of our employees was concerned about the

stability and security of our main computer
system, which we use to enter and ship orders.
So she worked through her professional network
to find a highly recommended company that could
scale with us, offered us better service and

66

ENTREPRENEUR 3/16

more securityand was $6,000 a year cheaper than

our current provider. We switched, and business
picked up. Inspired, we then looked into ways to
cut shipping costs, and switched to the U.S. Postal Service. In the first four months with them,
we saved more than $3,000. As told to Grant Davis

Illustration by Arthur Giron

startup finance

Co-op Capitalism
FOR THE RIGHT KIND OF BUSINESS, A RADICAL
MOVE CAN BE A SMART WAY TO RAISE FUNDING.
By Michelle Goodman

HEN BOULDER-BASED solar

energy company Namaste
Solar first went looking for
capital to expand in 2004,
it could have gone through the hassle of
securing a bank loan or put together a dogand-pony show to attract outside investors.
But the company decided it wanted to partner with the people who knew the business
better than anyone: its own staff.
Namaste invited its employees to buy up
to 10,000 shares in the company apiece. The
response blew cofounder Blake Jones away,
with employees borrowing money from their
friends and family to buy in. The average
employee investment was somewhere
between $15,000 and $25,000, Jones says.
And one person invested $100,000.
Namaste operates whats known as a
worker co-op, a for-profit company owned
and governed by its employees. Usually the
domain of idealists concerned with workers
rights, co-ops give interested employees a
democratic vote in key business decisions
and a cut of the profits. But they can also be a
smart economic decision for businessesso
long as the conditions are right.
First thing to know: Co-ops are almost
never going to be completely capitalized
by their members, says Melissa Hoover,
executive director of the Democracy at Work
Institute, an advocacy group for worker coops. To grow, they want to make sure the coop can still attract outside investments. And
that can be difficult. Banks are often leery of
investing in enterprises that appear to put
their people before profits and exponential
growth. And newly empowered workers may
not want to sell off large swaths of equity to
ROI-obsessed outside investors.
But if the idea still sounds appealing,
organizations like the International Cooperative Alliance, National Cooperative
Business Association and the United States
Federation of Worker Cooperatives can help
guide businesses toward a co-op structure

Photograph by Bobby Fisher

that works for them. There are, for example, ways to keep the spirit of the program
while also selling non-voting stock shares
to outsiders. (A co-op member, after all,
doesn't have to be an employee.) Thats what
fair-trade coffee distributor Equal Exchange
does. Since 1989, it has sold more than $16
million in preferred stock to more than 600
individuals. Whenever they sell, they sell
out. Theres a wait list, says Jones of Namaste
Solar, who converted his companys model to
Equal Exchanges in 2011 to expand his pool of
potential investors.
A new breed of co-op is even using
prelaunch, direct public offerings to get
off the ground. CERO is one of them. Its a
Boston-area commercial compost hauler that

Blake Jones of
Namaste Solar.

raised its initial money through a local grant

and an Indiegogo campaign in 2013. Then it
hired San Francisco Bay Area financing firm
Cutting Edge Capital to guide it through a
direct public offering, which allowed CERO
to sell shares to investors with a minimum
investment of $2,500. More than 80 buyers
grabbed $340,000 worth of shares.
Last year, the compost startup diverted
more than 350 tons of restaurant, supermarket and school food waste from landfills. It
expects to break even in 2017, and expects
investors to earn a 4 percent annual dividend.
We want people to come back, says Lor
Holmes, who leads CEROs venture development and capitalization strategies, and invest
when we decide to grow the business.

ask the money guy

How do I pick
the right bank
for my business?
A GENERATION AGO, most businesses just picked the bank closest to
their ofce. That way, there was less schlepping to the teller to deposit the
days receipts. Today, banks of all sizes and locations compete for your
businessbut not all are equal. Lets break it down.

COMMUNITY
BANKS

REGIONAL
BANKS

NATIONAL
BANKS

Good for

Small to mediumsize businesses.

Small to mediumsize businesses with

aggressive growth
strategies.

Medium to large
businesses with
multistate operations.

Service

Very responsive.
Decisions are usually
made by bank/branch
staff. Its possible
youll interact with
the same banker
for years.

Small enough to
still care about and
deliver personalized
service.

Impersonal. A high
turnover among staff
makes it hard to
maintain a personal
relationshipand
anyway, most
decisions arent made
at the branch level.

Fees

Can be the highest

around.

In the middle.

Lowest, thanks to
economies of scale.

Technology

Behind the curve.

Dont expect online
banking access.

Youll get the basics,

but nothing fancy.

On the cutting edge.

Can handle much,
if not most, of
banking online.

Ease of
Credit

Loans are made with

more weight given to
your character and
history and an understanding of
the local market.

Regional banks will

give more weight
to local market
conditions than
national banks will.

Loans are issued

strictly by the
numbers, with
no exibility.

Intangibles

Community banks
partner with national
banks to provide
credit cards and
international services.

Many regional banks

are made up of
independently run
community banks
and offer the best
of both worlds.

Experts in international banking and

services.

So, how do you decide?

First, make a list of the services
you want. Are you looking for
low fees, easy credit, an SBA
loan or a combination of these
and other services? Now rank
the items in order of importance, and start shopping.
At each bank, ask for the
business banker; thats usually
the loan officer assigned to
commercial customers. Talk
through your priorities.
Then ask two key questions:
1) How high a lending limit
can they authorize without
needing approval from higher
authority? 2) Do they offer
SBA loans, do they like to make
them, and what volume of them
do they close? (And if youre
serious about taking out a SBA
loan, look for banks that are
Preferred SBA Lenders and
have the authority to underwrite and approve these loans
on their own.) The answers will
give you a good indication of
how much the bank wants to
work with you.
Of course, the ultimate test
is to apply for a line of credit.
Recently, I helped a client
apply at eight banks. Two didnt
respond. Four came back with
uncompetitive offers. Two
gave us detailed terms sheets.
We went with the one that
offered us more money than
we asked for.
Joe Worth is a partner
at B2B CFO. @b2bcfo_NJ

68

ENTREPRENEUR 3/16

PIGGY ICONS DESIGNED BY GREGOR CRENAR/THE NOUN PROJECT

By Joe Worth

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The Art of

wacky idea

THE BEST KIND

OF BUSINESS
BUBBLE
HOW A COUPLE OF COLLEGE KIDS TURNED
A SILLY SPORT INTO A BOOMING BIZ.
By Susan Johnston Taylor

D
Inside that bubble,
there is a (paying) athlete.

Photographs by Brian Finke

AMON GRACE AND Lucas Andrews were poking around YouTube one day and
landed on a kooky video of some Norwegians playing just about the craziestlooking sport ever. It was soccerbut every player was encased in a giant bubble
that began at their waist and went up past their head. It looked fun and ridiculous.
And, the guys thought, it might also make a great business. Instead of going to play laser tag,
bubble soccer is a new entertainment product, Grace says.
Now the question: But what is this business? They could just sell the bubbles, but how
many people would want to buy those things? They could launch a league, but that would
be cumbersome. Then they got it: Theyd rent out the suits, nets and other equipment, and
market the game to local colleges, high schools, church groups and parents of bar mitzvah

3/16 ENTREPRENEUR

71

boys. (Grace and Andrews know the market. Theyre business students: Grace goes to
Michigan State University; Andrews is at Western
Michigan University.) They raised $4,000 from a
venture fund at MSU to purchase 10 suits and became Detroits first bubble soccer guys.
It was tough at first. The early suits popped, so
Grace and Andrews scrambled to patch holes until
they found a different, more reliable supplier. They
also discovered the hazards of unambitious branding. They initially called themselves Bubble Soccer Detroit but later realized that the name, well, limited them to Detroit. So last spring, they
rebranded as Bumpin Bubbles and have since found 40 partners across
the United States and Canada. And theyve added to their rental offerings: For $250 an hour for 10 bubble suits (or $350 an hour for 20 suits),
customers also get refs and everything else needed for a game.
Last year, Bumpin Bubbles clocked more than 250 rentals, with
$80,000 in sales. Projected sales for 2016 are $200,000. And because
bubble soccer can be played indoors or out, the company has begun
honing its pitch based on the season. During the summer months, we
get corporate events and corporate picnics, Grace says. In the winter
we do school groups and church groups. Some people rent them for the
entire night for an all-night party.
But despite the growth, its still very much a college operation. We
can fit 20 suits in my Trailblazer, which is like the company car, Grace
says. He drives to events across Michigan to set upand enlists fraternity brothers to work as needed.

Lucas Andrews wont

burst the bubble.

whos got vc?

Not for Everyone

GOVX SELLS TO ONLY CERTAIN CUSTOMERS, BUT THAT HELPED IT CASH IN.
By Michelle Goodman

he average citizen shops

online at Amazon. But
folks in the military and
government rst-responders
(such as police and reghters)
have a deeply discounted online
marketplace just for them: Its
called GovX, and it carries nearly
100,000 products from about
500 brands, including Ray-Ban,
Garmin, prAna, Woolrich and
5.11 Tactical, at discounts of 25
to 40 percent.
Its a good deal for shoppers,
but how did GovX make this
niche, low-price site sound
like a good deal to investors?

72

ENTREPRENEUR 3/16

Last summer, it announced

it closed a Series B round of
preferred stock nancing that
brought its total investments to
$11.5 million.
The answer: GovX knows how
to make the most of its rareed
assets. San Francisco VC rm
Rothenberg Ventures, which
contributed to the Series A
round, was attracted to the platforms proprietary verication
technologythe software GovX
developed to make sure every
shopper is actually in the military
or government. It also loves the

huge market potential: about

$75 billion in annual e-commerce
sales. If you can be the de
facto market leader in selling to
a subset of the American population thats empowered and
growing, thats big business,
says Mike Rothenberg, founder
and CEO.
Seth Hamot sees a very
different benet. Hes chairman of the Carlsbad, Calif.,
sunglasses maker SPY Optic,
which partners with GovX, and
the relationship has given him
intel on which military and rst
responders buy his products.

We skew very high with reghters but not with policemen,

he says. Now when Im allocating resources to marketing, I
tend to allocate them higher for
reghters than I do for police.
How happy is Hamot to have
this information? He personally
invested more than $1 million
in GovX.
And the e-retailer has a plan
for its $11.5 million: Improve
software, and draw in more
customers. Because those
customers mean data. Which
means happy investors. Which
means more customers.

CHRIS MANN

Owner - Cincinnati & Dayton

Regional Developer for Ohio, Kentucky,
Pennsylvania & North Carolina

The Woodhouse is all about family. Owning

a Woodhouse Day Spa gives me loads of time
to travel with my family and enjoy experiences
that I wouldnt be able to otherwise. Our guests
are family too, so we treat each of our customers
as if they were guests in our own homepart
of our family. Lastly, each of the franchise
partners is part of the Woodhouse family and
are treated as such. Its a great organization
and one Im proud to be a part of.

New Woodhouse Day Spa locations are opening

nationwide... Will the Next One be Yours?
From sales and marketing to accounting and IT,
Woodhouse owners come from all walks of life.
Come join our family of franchise partners!
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franchisees in Ohio, Kentucky, Pennsylvania & North Carolina regions.
Go to OwnAWoodhouse.com for more information.)

Only Luxury Spa Franchise in the World.

u Average Annual Sales $1,719,267.*

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Mott Smith (left) and Brian Albert

are cooking up the next
generation of Los Angeles chefs.

foodie tenants wouldnt have to worry

about passing the countys stringent
permit process.

the process

Solving Other
Peoples Problems
YOU CAN BUILD YOUR OWN BUSINESSBY HELPING
OTHERS BUILD THEIRS.
By Carren Jao

ARTISAN CHEFS have so many opportunities. The specialty food market is

worth an estimated $109 billion, growing nearly 22 percent between 2012 and
2014. Whole Foods, Kroger and other
national retailers are hungry for the next
tasty thing. And yet, few small businesses have the funds to build out their own,
fully permitted commercial spaceand
they cant go far in cramped, unlicensed
home kitchens.
When Mott Smith and Brian Albert realized this, they knew they could create
a great business solution. Their company, L.A. Prep, now rents kitchen space
for an average of $3,000 a month and
provides around-the-clock security, an
VJLZWHJLHUKL]LUHUVUZP[L<:+(
VJL;OPZPZOV^[^V[YLWZZVS]LKHSV[
of their peers problems.

74

ENTREPRENEUR 3/16

STEP 1: Clear the path. Smith and

Albert are local real estate developers, and
they knew their kitchen spaces would need
some time in the governments oven. They
helped rewrite Los Angeless regulations
on shared food production facilities so their

STEP 2: Design the space. They built out

an $18 million, 56,000-square-foot food production facility but designed it for a variety
of uses. Some of the private kitchens are as
small as 140 square feet, used for preparation
of chocolate, ice cream, cheese and other
foods that may not require a ventilation hood.
The larger spaces are designed so artisans
can do full line cooking and large-scale
production, Albert says.
STEP 3: Promote the model. L.A. Prep
opened in April 2015 and has championed
its success storieslike Semolina Artisanal
Pastadoubling production in just seven
months, and Tava Life (maker of Grass Fed
Pure Spreadable Butter) scoring national expansion in four major retailers. Thats helped
draw in some more established names as well,
like Blue Bottle Coffee, which operates a
bakery at L.A. Prep. Its everything from the
new guys to the old guys, Smith says. We
love it.
STEP 4: Add the perks.
L.A. Preps founders are now
experimenting with new
programs to help their tenants, such as group buying
so multiple companies can
band together and get bulk
discounts on ingredients
and one-on-one coaching
services, to help chefs get
their products into peoples
hands (and mouths).

Photographs by Chris DeLorenzo

~ D AV
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Fifteen years ago, David skipped buying

a new car and, instead, invested in being
an Allstate Agency Owner. A good choice
thats paid off.
Today, Davids business has nearly tripled
in size. His hard work and devotion to
clients have helped David and his wife,
Vanessa, enjoy a wonderful life together.
One that nally includes that new car
hes always wanted.
David has built a good life by staying
true to himself and the people he helps
protect. Now you can, too. Talk to
your local Allstate recruiter today at
877-875-3466.

OWN YOUR OWN BUSINESS

EARN WHAT YOURE REALLY WORTH

H ear more of Davids story at

AllstateAgent.com

Subject to all terms and conditions as outlined in the Allstate R3001 Exclusive Agency Agreement and Exclusive Agency program materials. Allstate agents are not franchisees; rather they are exclusive agent
independent contractors and are not employed by Allstate. Allstate is an Equal Opportunity Company. Allstate Insurance Company, Northbrook, IL. In New Jersey, Allstate New Jersey Insurance Company,
Bridgewater, NJ. 2015 Allstate Insurance Co.

THE 10
MISTAKES
THAT
THREATEN
STARTUPS
THE MORE YOU KNOW THEM, THE LESS YOULL MAKE THEM.
By Paula Andruss

OUNTLESS STARTUPS FAIL every year. But there are

not countless reasons that they fail.Im talking to entrepreneurs three or four times a week, and theyre all
coming to me with the exact same issues, says Tarek
Kamil, a serial entrepreneur with five launches under
his belt (most recently, as founder and CEO of the communications
platform Cerkl).People are falling into the same traps over and over.
If they could just avoid those common mistakes, the chances of their
company being successful would significantly increase.
Hes not the only one who thinks so. Mentors, VCs and serial entrepreneurs all say they routinely see entrepreneurs fall prey to a commonsetof mistakes. So what are they? You should know.

76

ENTREPRENEUR 3/16

Photograph by Jesse Chehak

Tarek Kamil has heard

your problems before.

77

Notprepping your life

Confusing a product
with a business

No one would show up to run the Boston Marathon

without training first. The same should be true of startups. You need to warm up with someprelaunchtraining,
from getting proper rest and nutrition toshoring up
relationships.Youhave to berigorous about making
sure youre ready and thatevery area of your lifeisin
check,Kamilsays.A startupwill takea toll on your
life, guaranteed.
Iffriendsand familydontunderstandwhatsabout
to happenandarenot supportive ofyour vision,
theyllcausepersonal misery, not to mentiona majordistraction from the business.Have acandid conversation
to manage expectations. Tell them, Im going to give
this my attentionand while it doesnt mean youre not
importantto me,it mayfeel that way,Kamilsays.You
need to make sure theseareas are buckled up, because
entrepreneurship will shine a light on whatever parts of
your personal life are weak.

Inthisage ofapps, Atlanta-basedserial entrepreneur and

companystrategist Eric Holtzclawsayswannabe treps
dont always know how to build upon their success.A
productsolvesan individual need, he says, but a real
business has something customers will come back for again
and again.
Heres how to make the distinction: Do you have potential revenue streams beyond the customers initial purchase
of a product? Thats a key factor forprospectiveinvestors, who want to see what thenextthing isand want to
make sure that theres some longevity beyondwhatyoure
offeringtoday,Holtzclaw says. Are you going to license
the technology to someone else? What does the business
look likeinthree or five years?Thats a big concern from an
investor perspective, and that will help you determine if you
even have a business at all.

We say this with full respect: Youre not good at everything.

You cant be. And yet, every part of a business should be done
expertlyparticularly the tricky stuff like taxes and legal
issues. Structuring not only the company but also potential
investmentsin the wrong way can come back to haunt you,
says serial entrepreneurGreg Rau, COO of Ridago,
a hardware engineering firm based in Oregon.
So where it really matters, dont download some free online
guide or think you can handle it yourself. Find an expert whose
job is to know exactly what you need to do. The place Rau says
entrepreneurs are particularly in need of an expert eye: When
drafting the terms you accept investment on, he says, if you
dont pay attention to things within the terms sheets, like
liquidation preferences, that could hurtyou on the future sale
of the company to the point where the founders may end up
with nothing.

78

ENTREPRENEUR 3/16

Greg Rau,
an expert on
hiring experts.

LISA BOOMER/THE GOLDEN RANGE

Not paying for expertise

80

Ignoring data

Scaling too quickly

Magicalthinking can kill any business, says Lisa

Stone,the San Franciscobasedcofounder of the online
community BlogHer. You cant just believe youll succeedyou need to actually crunch some numbers and
figure out if you will succeed. Therehas to be data that
validates that yourbigidea is real,or at least providesa
leading indicator thatit could be.Once youcollectthat
data, use it to create key performance indicators or milestones to show your idea or business is progressing.
Stone speaks from experience. In the early stages of
BlogHer,she and her partners were told that women would
never blog in largeenoughnumbersto supportan annual
conference. But the data they collected from their first
small test conference confirmed their belief that the plan
would work. The event, organized in four months, sold out
with more than 300 women showing up and netted the
team $60,000, which was poured back into the company.

Heres a scary number: Seventy-four percent of highgrowthinternet startups fail because they scaled too fast,
too soon. (Thats according to a report by Startup Genome.)
It happens a lot, says Erik Rannala,cofounder and managing partner of Los Angelesbased Mucker Capital. People
raise money, think theyre flush with cash and then spend
it on the wrong things. But by the time they realize that
spending isnt getting them anywhere, its often too late.
What are they spending on? Oh, anythingfrom
marketing to hiring too many employees too quickly. But
the basic problem is the same: Theyre draining the budget
on things that arent essential toexpansion or determining
whether their business is even viable. Whenyou start to
spendmoney,you need to either have more orhavea way
to generate more,Rannalasays. Because if you run outof
moneybefore youactually hit any real business milestones,
youre going to have a very hard time raisingmore.

ENTREPRENEUR 3/16

Clinging to the wrong idea

Failing to delegate

Youhave to realize that sometimes youre pushing up the

wrong hill or youre pushing into a brick wallyoure never
going tobreakthrough,Rannalasays. This mistake is
especially prevalent among first-time entrepreneursand
peopleenteringan unfamiliarmarketfolks who just fall
in love with their original idea and cant recognize how
much its failing.
Dont go on gut. Go on evidence. Evaluate how your
product fits in the market. Maybe you run experiments
on what tactics or product tweaks draw in customers the
best. Or maybe you closely track how much it costs you to
acquire each customerand if small tweaks make that cost
go up or down. For consumer internet companies, for example, there are five or six tried-and-true ways to acquire
customers, Rannala says, and if youtry themforsix or12
months and none of those tactics are working, that might
be a sign that theres something wrong.

Its perhaps the most classic problem in management:

Rather than give up control and trust others to take the
reins, you try to do everything yourselfand fail. The
instinct is understandable, of course. Most good entrepreneurs are very strategic,sotheydont want to have to
worry about whether the fine detailsare being accomplished, Holtzclawsays.
So, what to do? Delegate, obviously. Start by drawing
up processes, almost like a guidebook for how to do things
the way they should be done. That way youll feel calmer,
and your employees will have the direction they need. If
you dont do that, youllhiretoo quickly because youll
think, Ive got to bring somebody in because Im so overwhelmed, he says. Well, if youre overwhelmed and no
one can take anything off your plate,youre nevergoing to
get out of that state. You have to delegate.

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81

82

Thinking money
solves everything

Underestimating
how long sales take

Struggling entrepreneurs often think that if they

can juuuuust raise another round of financing, their
problems will be solved. But money doesnt work
like that. It cant solve a fundamental issue with a
business model, says Carter Cast, professor of entrepreneurship at Kellogg School of Management and
venture partner at Chicago-based Pritzker Group
Venture Capital.
If your business model isnt sound, throwing
money at it is not going to work, Cast says. You have
to fix the problemfirst,andthen raise the money.
Doing it the other way around will only get you in
more trouble.

Lets get this out of the way: Sales take time.

Many startups even think they canclose abig enterpriseaccount in three to six monthsbut in reality,
a deal like that can take more than a year.And if your
business plan doesnt account for that, youre going
to be in trouble.
They have to sell in to the c-suite,the line manager,the technology folksandthe product manager.
There are multiple levels of approval,and then
theresa scoping and discovery and implementationprocess,Castsays. Ive seen many companies
run out of money because they have been too aggressive in estimating theirtimelines.

ENTREPRENEUR 3/16

10

Fearing failure

PHOTOGRAPH BY JESSE CHEHAK

Failfast may be a popular catchphrase, but Kamil isnt a

fan of it. No matter how much entrepreneurs may glorify
failure, theres still that scary word: fail. And nobody
wants to be the opposite of success. Its really the wrong
term, because failing means theres no benefit, and most
times thats just not true, he says.
Change the mindset. You didnt failyou ran an experiment that will improve your next business.Its learning,Kamilsays. Although it hurts a little bit each time,
now youve learned something, and you can apply that
lesson to move forward and make your business better.
So, were these still 10 types of startup failures? Sure, technically. But that just means theyre also 10 ways to learn.

The students are most excited about learning and

succeeding at something theyve never tried before.
-Armando and Maria Mojica, Franchisees from Minneapolis

540.940.2910 engineeringforkidsfranchise.com
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3/16 ENTREPRENEUR

83

Growing a

franchisee

FRESH DELIVERY

HOW A YOUNG IMMIGRANT RAPIDLY ROSE IN THE PIZZA BUSINESS.

By Jason Daley

Photographs by David Yellen

3/16 ENTREPRENEUR

85

over P&Ls, things like that so

it was an easy transit
Is it tough working with your
family?

I really dont nd anything

different between working
with family members and my
employees. You know, you
spend more time with the
people you work with than
you do with your family. They
really are my second family.
When I was manager at
Dominos, I bought everyone
a cake on their birthday, and
I still do it. We all have to get
along and treat each other as
family. Thats something Ive
always believed.
Why is community involvement important to you?

Ag Mahmud, with
daughter. Previous
page: Mahmud
with his family (and
pizza partners).

G
HMU
d owns four Papa
Jo
rest
in New York and
C
. But he didnt always know
w pizza was. He grew up in a small vilg
ngladesh, where fast food wasnt exactly
c mon fare. In 2002, when he was 16, his family
moved to America. I didnt really have any goals at the
time, he says. I was just focusing on school and getting a part-time job.
That first job was as a delivery driver for Dominos. I
realized I could make a career out of this, he remembers. I saw how the franchisee was making a lot of money and was able to grow his own business. I made owning
a pizza franchise my goal and aimed to get to that level.
To do that, he worked his way to manager and studied
the business. Then, in 2013, he applied to become a Papa
Johns franchisee. He was accepted, and using his savings and loans from family, he opened his first unit. Now
he runs his restaurants as a family business: Each of his
three brothers is in charge of one location, and his dad
works as a delivery driver.
86

ENTREPRENEUR 3/16

Youre very young and dont

have a ton of business experience. Why did Papa Johns let
you buy a franchise?

They looked at my rsum

and saw that I hadnt worked
anywhere but pizza places.
When they interviewed me,
they just wanted to see my
knowledge about the pizza
world. I talked to them about
my experience and what
Id like to do to reach out to
the local community and
churches. I think they were
impressed. Every one of my
brothers started out as a
pizza delivery driver. So we
all knew operations, how to
run the business and make
pizzas. Papa Johns taught
us how to manage our businesses as owners, how to go

Im not interested in just selling pizza parties to schools

and things like that. I always
donate pizzas to school
events, to local churches,
to colleges. Im active with
them. The return comes
when those people go home
and think of us. They might
not know my name, but they
know me as the Papa Johns
pizza guy, and that I always
try to help them out.
Your family invested a lot in
you. Were they ever worried
you wouldnt succeed?

They were not afraid to

spend their money; they
knew that running a pizza
franchise was something I
was passionate about. They
said that if I put my mind into
this and if it was what I wanted to do, theyd help me out.
It does make me proud, and
my parents and everyone are
proud of me. Now they can
say that we own a food store
in America.

Freaky Fast

CONCEPT
Freaky Good

NUMBERS
$1,367,810* 25.78%* $270,355*
AVERAGE GROSS SALES

AVERAGE FOOD AND

PAPER COSTS

AVERAGE NET PROFIT

FROM OPERATIONS (IN $)

800.546.6904 + OWNAJIMMYJOHNS.COM
*Figures reect averages for fteen (15) affiliate-owned restaurants that opened before January 1, 2010 as published in Item 19 of our April 2015 Franchise Disclosure Document. These averages are based on a 52-week annual period from January 1, 2014 through December 30, 2014. Of these fteen (15) restaurants, 9 (60%) had higher
gross sales, 6 (40%) had higher food and paper costs and 6 (40%) had higher net prot percentage during the reported period. The nancial performance representation contained in Item 19 of our April 2015 Franchise Disclosure Document also includes (1) average systemwide gross sales, average franchise gross sales, and the
number and percentage of restaurants exceeding these averages during the referenced period and (2) average gross sales, average food and paper cost, and average net prot percentage information during the referenced period for nine (9) affiliate-owned restaurants that were opened after January 1, 2010 and before January 1, 2014.
A new franchisees results may differ from the represented performance. There is no assurance that you will do as well and you must accept that risk. This offering is made by prospectus only.

2016 JIMMY JOHNS FRANCHISE, LLC ALL RIGHTS RESERVED.

franchisor

Theyll
Fund Your
Franchise!

Dan Murphy, the

shark that escaped
the tank.

...IF YOURE A DYNAMITE

FIT, OF COURSE. MEET THE
FRANCHISE GUYS WHO WANT
TO DO THINGS DIFFERENTLY.
By Jason Daley

n THE ABC show Shark Tank,

contestants pitch business
ideas to seasoned professionals who decide whether or
not to fund them. But could a
similar contest create new franchises? Thats
what Cincinnati entrepreneurs Dan Murphy
and Gary Green started wondering. Both
have developed lots of different franchise brandsincluding The Growth Coach (business coaching) and
Fresh Coat (painting contractors)and decided to launch a competition of sorts. Instead of going through
the arduous process of thinking up and developing a franchise brand themselves, theyd take applications
from small-business owners who were hoping to expand, and select one or two for the franchise-development
process. They call themselves Franchise Funding Group.
We want to help entrepreneurs who have a successful business with one or two locations but have the
vision to scale nationwide, Murphy says. We can be that path for them. Their offer is robust: Theyll fund a
business up to $150,000 and take a 25 percent stake. Then theyll help the franchisor find an attorney to create
a franchise disclosure document, help them train their franchise team, create their systems, develop marketing, and do all the things that young franchises struggle through, usually on their own.
The first brand they funded in 2015 is Pet Wants, a subscription pet food company that makes monthly
deliveries of all-natural, fresh-made grub. More are anticipated for 2016. Heres how winners are picked.
What made your rst selection, Pet Wants, special?
The founder, Michele Hobbs,
had that X factor. She wanted
to expand nationwide but just
didnt know how. She kept
asking, How do I successfully franchise my business?
and it turned out we were the
answer. She wasnt going to
be denied. We looked at the
due diligence, and she was in
a great nichefresh pet food.
She had determination, grit
and great selling skills. She had

88

ENTREPRENEUR 3/16

a proven system and was just

looking for a partner. We started
offering franchises in June 2015,
and in less than ve months sold
19 franchises, with eight up and
running and 11 in the process of
launching.
How many people applied for
that rst round of funding?
We got around 90 credible inquiries and had 60 people ll out
the full application. We talked
about those 60 applications at
length and then looked at the

nancial statements for 15 of

those before deciding to fund
one. I think thats the ratio well
have going forwardfunding
one or two brands out of 100.
Were putting our reputation at
stake, and spending a lot of time
and money. So we want this to
be a great relationship.
Whats the next brand
youll fund?
We dont know yet. Were just
taking a second round of inquiries in Q1 of 2016. But as our

name gets out there and people

realize were legit partners, were
getting a much higher caliber of
applications. Were also going
to start working with emerging
franchise brands in the oneto-50-unit range that just need
a little extra repower. Really,
we want to get these brands
up and successful. We gure
most of these franchisors will
eventually want 100 percent
ownership but will still want
access to our expertise, so we
have a buyout formula in the
plan, and then well get a longterm management fee.
Why not just get a consulting
fee to start, and move on?
Because this is a blast, and its
giving back. Im 52, and Gary is
ve years older. We dont have
the time and energy to start
businesses ourselves anymore,
and weve been blessed in
franchising. Now we just want
to help other people do it. Its
probably the most exciting thing
there is.

Photograph by Jesse Chehak

Franchise the
In an industry of copycats,
fresh ideas can stand out.
90

ENTREPRENEUR 3/16

Illustration by Phil Wrigglesworth

Meet four new franchisors who

are thinking ahead. By Jason Daley

Unexpected
3/16 ENTREPRENEUR

91

Walk through a
franchise convention,
and most of the reps manning the booths might as well be shouting, Me, too!
Franchising is all about replication, after alland franchises are experts at replicating
the same types of concepts. But amid the modern scrum of better burger joints, burrito
restaurants, permutations of oil-change places and riffs on the 24-hour gym, a few new
interesting concepts are rising up. Theyre driven by technology, mobile franchising and
the fading hangover from the debt crisis. Some are on the wacky sidelike a potato-based
fast casual brand or burrito vending machinesbut some seem like potential winners,
just at the beginning of their long journey upward. Here are our picks for four of the most
interesting newcomers in the franchise game.

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ENTREPRENEUR 3/16

Multi-Unit Opportunities
p

KARA CHOATE/CHOATE HOUSE (LIFESQUIRE)

Li
P

Valerie Riley,
at your service.

i e

CH

P
a
i

l
i

p f
who can afford it, a personal
assistant is one of the easiest
ways to free up hours for
family and relaxing. But a good one is hard
to findand outside major cities, very few
companies place them. Thats the opening
Valerie Riley saw. She was an assistant in
Dallas; when that job ended, she moved to
Oklahoma City and started a firm called
Riley Group to match, train and administer assistants. In 2014, she rebranded as
Lifesquire and began franchising nationally.
She now has four locations, with another
five expected this year. Her staffing concept

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93

is unusual for the franchise worlda very

personal, luxury service. Were really looking for owner-operators, not just investors,
she says. To have a robust business, a franchisee needs about 60 clients. They have to
hire the right staff and find assistants willing
to take a text at 10 at night and work on holidays. They need to be house or life manager
The schedule looks different every day.
Lifesquire is now busily crafting itself
to be more than just a niche employment
agency. It uses proprietary software, almost
like an online dating site, to match the right
assistant to the right client. And to build the
brands credibility and visibility, Lifesquire i
launching a personal assistant academy thi
yeara teaching program to help everyone
in the field improve their skills and service,
regardless of whether theyre placed through
Lifesquire. We want to position ourselves
as the leader in this space, says Riley. If
anyone has experience in any service-based
business, I think I can teach them.

F R ANCHISE

Growler USA
PITCH

Craft
beers
megabar

W
AS LAUNCHED many
bus esseshis last was an outdoors retailer
called Trap Happensbut until recently,
h had no knowledge of brewing. Then he
n iced something special happening in the

COURTESY OF GROWLER USA

Join a Winning Team!

Over 30 Years of Proven Franchise Success
This Months Featured Brand

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All of our brands provide...
Home-Based Opportunity
Low Start-Up Cost
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Outstanding Training,
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513-331-3647
www.PetWants.com
Pet Food is a huge
$22 billion industry

Pet Wants

High prot margins from

recurring delivery customers

Perfect business for Pet Lovers to

serve the Millions of Pet Parents

Explosive growthentering
a new market every week

Largest Senior Transition Services

Company Nationwide.

94

ENTREPRENEUR 3/16

Premier Provider of Residential

and Commercial Painting.

International Leader in the Coaching

Industry, now in 13 Countries!

Leader in House Care Management

for Seniors and Busy Adults.

Ranked #1 Senior Care

Franchise 5 Years in a Row.

At Growler USA
and want draft
beer to go?
Grab a growler.

the beer world. Craft brewing is one of

the fastest-growing industries weve seen
in our lifetime, says White. As a serial
entrepreneur, that catches my eye.
It also caught his imagination, so he
began developing a concept for a brewpub
specializing in American-made beers and
ciders (along with American coffee and
kombucha tea). The first test unit, called
Growler USA, opened in 2013 in Eugene,
Ore. After a few years of perfecting the
concept, White franchised it to owners
in Charlotte; Austin; Centennial, Col.;
Seattle; Scottsdale, Ariz.; Honolulu and
five cities in Texas.
The concept is simple on paper but
difficult to manage in the real world. Each
Growler USA will have 100 taps. All bartenders are required to become certified
cicerones (the beer equivalent of wine
sommeliers). The brewpub uses a state-ofthe-art tap system that can be adjusted to
the exacting standardsvolume, amount

of CO2 and temperatureof each beer it

serves. We took the idea of the pub, of a
public gathering space, and interjected it
with cool technology and amazing food,
all designed to enhance the experience of
handcrafted beverages, he says. There
are almost 4,200 microbreweries in the
U.S., and each of those produces 15 to 20
styles of beer. We have a database of 70,000
American beers alone, and my staff is
determined to try all of them.
And despite being a franchise, White
says, each unit will focus on its local
brewing scene. You know, in Eugene well
have these guys pull up in an old truck with
a mason jar of beer, and theyll pour it for
our customers. And if they love it, Ill say,
Great; well take two kegs, says White.
We love the entrepreneurial spirit of
brewing. You meet these guys who say,
I started brewing in Uncle Goobers
barn, and now we have 80 employees.
Thats inspiring.

Discovery Point child development centers offer

a unique, quick and easy approach to franchising,
with support from signing to opening. See why
Entrepreneur Magazine listed Discovery Point
as Top 500 and a Red Hot Franchise in this
growing $48 billion industry.

Unique turnkey franchise model

2+ decades of proven success
Fixed royalty rates
Affordable initial investment

888-997-2182 | discoverypointfranchise.com

3/16 ENTREPRENEUR

95

FR ANCHISE

StoneCoat
PITCH

S
a
p

MEDIEVAL LORDS AND Harry Potter

set designers agree: Stone buildings look
awesome. Theyre also expensive; even a
few chunks of fieldstone or granite on a
house or office building can bust the budget. Whats more, the rocks add so much
weight that they also require industrialstrength engineering.
Still, in the HGTV era, people want
to get their stone onand that includes
Dallas entrepreneur Ken Morrison. In
2005, he wanted to add some stone accents
to a house he was hoping to flip. But after a

Get others to
bank on your
business, build on
your brand, and
unlock your
growth potential.
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consultation, he learned that the rocks were

too heavy to incorporate into the remodel.
Surely, he thought, this cant be the only kind
of stone available. So he began researching
after-market applications and came upon
something called hydraulic limestone.
Found only in a few quarries in Europe,
hydraulic limestone can be powdered and
mixed with water to form a slurry, which can
then be sprayed onto almost any surface.
Because it takes two to four hours to dry, it
can be colored, carved and shaped into practically any patternchalk, cast stone, marble

Hotel
Makeover
PITCH

Room service
for hotels

JOE AIELLO AND his wife, Debbie, bought

into a high-end timeshare in Texas in the
1990s. And then, to their great displeasure,
the condos were remodeled in 1997. It was
just a horrible job, remembers Joe. The couple happened to install industrial kitchens
and build restaurants for a living, so Debbie
approached the condo board and said shed
like to take a crack at redesigning the units
the next time around. The board agreedbut
said they also wanted her to manage the
painting, install the carpet, buy the furniture
and coordinate the whole process. Debbie did
just that. Then some nearby condos asked the
Aiellos for help. And then some hotels along

How you like me

now? says this
Hotel Makeover
renovation.

the Gulf Coast did, too.

Debbie saw an opportunityto make a
company solely focused on hotel renovations,
called Hotel Makeover. Most franchised
hotels have brand standards that require
certain furniture, decor, locks and so on, all
of which is replaced every six to seven years.
This can be a painful, costly thing, which is
why the hotels asked Debbie to create a onestop, turnkey affair. Refreshing a hotel is
very complicated, Joe says. Even for a 70- or
80-room hotel, there are well over a million
elements to deal with. Hotel owners often
cant manage that. Theres a reason no one
had built a company like this before.

COURTESY OF HOTEL MAKEOVER

Own the Next

Big Thing in
Franchising

and more. When it dries, it turns into actual

limestone that wont crack or chip. And
because the layer is relatively thin, it doesnt
have the weight problems of cut stone.
Morrison spent several years experimenting with processes for applying and shaping
the hydraulic limestone. Then, in 2010, he
launched a company called StoneCoat. After
five years of good business, Morrison hooked
up last year with Sam Hance, a veteran franchise developer who helped grow 10 other
brands, including Curves. After one month,
the company sold four units.
What makes us novel is that we are a
low-cost franchiseit usually takes $75,000
to $155,000 to open, and our pipeline is very
short, says Hance. From the time a franchisee signs the paperwork, they can be up and
running in less than 60 days.
But the biggest selling point, says Hance,
is the product itself. Stone is messyyou
deal with mortar, theres a rubble pile when
youre done and it takes a long time. We come
in, blow it on and were gone.

By 2005, Joe had joined the company fulltime, and the Aiellos spent the next decade
preparing to take the brand nationaland
now the couple is beginning to franchise, and
plan on having six to 10 units operating by the
end of the year. Hotel Makeovers business
arrangement is built to make franchising less
intimidating. It keeps all the complex design
and procurement duties at its home office;
the local franchisees role is to serve as a liaison and partner with the hotel owners, and
establish relationships with local tradesmen
and other subcontractors.
Most franchisees will manage five to
eight renovations a yearand given the hotel
industrys rapid expansion in the past few
decades, the Aiellos arent concerned about
drawing in business. Industry sources estimate there are 20 million hotel rooms in the
world, says Joe. And remodeling is a huge
problem in the industry that we can solve. Its
a great business. In the U.S., its $14 billion.
Thats roughly the size of the global music
industry and 50 percent larger than the NFL.
And its an industry with no leadership. We
hope to be the first one.

START
A
HOME-BASED TRAVEL
BUSINESS
Theres no better time to be a travel professional
and theres no better way to get started

Low-cost, low-investment with no inventory

Full training provided no experience required
Preferred access to special rates and amenities
Turn-key marketing programs, websites and
national branding

WORLDS LARGEST CRUISE AGENCY

CALL TODAY

1-800-822-6506
www.CruiseOneFranchise.com

3/16 ENTREPRENEUR

97

Discover the

Great life
More than a thousand people
across North America have
discovered the great life with
Great Clips.
If youre passionate, business savvy, and
can follow a proven system, you too could
create a new future for you and your family.
With the support of the Worlds Largest
Salon brand, youll receive expert advice
at every step of the way.
Discover the great life at
GreatClipsFranchise.com/Owners

ACHIEVE YOUR LEGACY

Limited opportunities
still available!
GreatClipsFranchise.com
800-947-1143

MULTI-SALON OWNER

JERRY AKERS

Great Clips, Inc. 4400 West 78th Street, Suite 700 Minneapolis, MN 55435 800-999-5959 or 952-893-9088 State of MN Reg. #F-928
This advertisement is not an offering. An offering can only be made by a prospectus led rst with the Department of Law and the State of New York. Such ling does not constitute approval by the Department of Law of the State of New York.
THESE FRANCHISES HAVE BEEN REGISTERED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF CALIFORNIA. SUCH REGISTRATION DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR
ENDORSEMENT BY THE COMMISSIONER OF CORPORATIONS NOR A FINDING BY THE COMMISSIONER THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE AND NOT MISLEADING.

TOP
the list

FRANCHISES
2016s most promising business
opportunities, ranked.

ISEBYL/GETTY IMAGES (TYPE)

By Tracy Stapp Herold

3/16 ENTREPRENEUR

99

RECREATION
1

AUTOMOTIVE
1
HOTELS
1

HEALTH
2

TECH
3

t takes a certain amount of chutzpah to

FOOD RETAIL
3
PERSONAL CARE
start a business. It takes even more to de13
cide that others will want to start a busiFINANCIAL SERVICES
4
ness just like it. But when the business
The
75
model works, success comes quickly, and MAINTENANCE
companies
10
the payoff is a spot on our list of the top new
BUSINESS SERVICES
on our list
6
franchises of 2016. Nearly 10 percent of the
come from
a wide variety
951 companies that applied for Entrepreneurs
of industries.
2016 Franchise 500 started franchising in 2011
Heres the
SERVICES (OTHER)
or later. Of these newcomers, weve listed the
7
breakdown:
CHILDRENS
BUSINESSES
top 75 on the following pages. The companies
8
are ranked based on Entrepreneurs objective,
RETAIL
quantifiable criteria, including system size,
8
growth rate and financial strength and stabilQUICK-SERVICE RESTAURANTS
ity. Other factors that go into whittling down
8
our list are a franchises startup costs, any ongoing litigation, terminations and whether the company offers financing. Bear in mind, this list is not intended
as a recommendation of any particular franchise. Any franchise opportunity, whether new or old, should be researched carefully before you invest. Read the companys legal documents, consult with an attorney and an accountant, and talk to as many franchisees as you can.

You have what it takes to be successful, and Big O Tires has the industry-leading knowledge and
resources to help get you there. Enjoy the freedom of operating your business independently while
leveraging the support, resources and established brand recognition of a multi-million dollar network.

More than 50 years of experience in the tire & automotive service industries
Proven business expertise and strategy designed to exceed customer needs
Premium buying power of hundreds of locations
Nationally-recognized franchise networking

This advertisement does not constitute an offer of a franchise. A franchise offering can be made
by us only in a state if we are rst registered, excluded, exempted or otherwise qualied to offer
franchises in that state, and only if we provide you with an appropriate franchise disclosure
document. Franchises are not available in all states.

www.bigofranchise.com
877-890-5874

100

ENTREPRENEUR 3/16

Tools
1andMac
Automotive tools
equipment

HUMAN
BlueGrace
Healthy Markets
Logistics
4Healthful-food
7Transportation

Enviro-Master
Franchise
10
Restroom hygiene

uBreakiFix
13
Electronics
repairs

TGA Premier
Youth Tennis
16
Youth tennis programs

Franchising since: 2011

Startup cost:
$86.2K$240.3K
Total franchises/
co.-owned: 800/13

distribution

management

products and services

Franchising since: 2012

Startup cost:
$64.4K$109.9K
Total franchises/
co.-owned: 130/29

Franchising since: 2011

Startup cost:
$39.5K$181.3K
Total franchises/
co.-owned: 55/2

Franchising since: 2011

Startup cost:
$156.3K$282.7K
Total franchises/
co.-owned: 35/0

Franchising since: 2013

Startup cost:
$74.7K$165.6K
Total franchises/
co.-owned: 107/19

Franchising since: 2011

Startup cost:
$16.3K$67.4K
Total franchises/
co.-owned: 27/1

8services
Sign and lighting

11
Preschool,
daycare, public-

TRYP by
Wyndham
14
Hotels

Renters
Warehouse USA
17
Property management

Franchising since: 2011

Startup cost:
$64.3K$350K
Total franchises/
co.-owned: 44/47

speaking enrichment
programs

Franchising since: 2011

Startup cost:
$1.3M$22.9M
Total franchises/
co.-owned: 123/0

Franchising since: 2011

Startup cost:
$43.5K$106.8K
Total franchises/
co.-owned: 26/3

TruBlue Total
House Care
15
Handyman services,

British Swim
School USA
18
Swimming lessons for

residential cleaning,
lawn care

ages 3 months and up

Rent-A-Center
2furniture,
Rent-to-own
iLoveKickboxing
.com
electronics,
5
computers, appliances
Kickboxing fitness
Franchising since: 2013
Startup cost:
$355.4K$582.2K
Total franchises/
co.-owned: 150/2,928

3Math, science,

Engineering
for Kids

technology and
engineering activities
Franchising since: 2011
Startup cost:
$26.9K$93.6K
Total franchises/
co.-owned: 141/2

classes
Franchising since: 2012
Startup cost:
$120.1K$309K
Total franchises/
co.-owned: 88/6

Yesco

9nonmedical
Medical/
home care,
Qualicare

6boothsTapSnap
Digital photo
Franchising since: 2012
Startup cost:
$57.4K$109.4K
Total franchises/
co.-owned: 314/8

patient advocacy
Franchising since: 2011
Startup cost:
$78.7K$190.95K
Total franchises/
co.-owned: 55/3

Genius Kids

Franchising since: 2011

Startup cost:
$224.9K$574.5K
Total franchises/
co.-owned: 19/5

by JC
12 Salons
Salon suites

Franchising since: 2011

Startup cost:
$464.6K$903.6K
Total franchises/
co.-owned: 44/10

Franchising since: 2011

Startup cost:
$65.3K$90.4K
Total franchises/
co.-owned: 27/0

Franchising since: 2011

Startup cost:
$74.7K$113.4K
Total franchises/
co.-owned: 23/4

THE HOTTEST FRANCHISE OPPORTUNITY IN FITNESS

THE ONLY FITNESS BRAND THAT PUTS MOOD ABOVE MUSCLE

OUR PROVEN MODEL

Median Member Count

Median Revenue
Median EBITDA

6,628

$ 1,776,742
$ 687,078

JOIN A FEEL GOOD FRANCHISE

Contact Ed Yancey at 212.359.8780 blinkfranchising.com

Figures reect the actual median annual gross sales, median annual EBITDA, and median end-of-year membership numbers of 3 aliate-owned and operated Blink Fitness Gyms (operational
for at least 4, but less than 5, full years as of February 28, 2015) during their 4th full 12 months of operation, all as published in Item 19 of our April 17, 2015 Franchise Disclosure Document.
The beginning and ending dates of the 12 months of operation represented for each Blink Fitness Gym dier because each Gym opened on a dierent date. The nancial performance
representation contained in Item 19 of our April 17, 2015 Franchise Disclosure Document also includes actual median and average annual gross sales, annual EBITDA, and end-of-year
membership numbers for all 24 aliate-owned and operated Blink Fitness Gyms (operational for at least one full year as of February 28, 2015) during their 1st, 2nd, 3rd, and 4th full 12 months
of operation. A new franchisees results may dier from the represented performance. There is no assurance that you will do as well and you must accept that risk. This oering is made
by prospectus only.

3/16 ENTREPRENEUR

101

Best in Class
Education
19
Center

Storm Guard
Restoration
22
Exterior restoration

Blaze FastFired Pizza

26
Assembly-line pizza

Chicken Salad
Apex Fun Run
Bricks &
Chick
Minigs
29
33
Elementary37
Chicken salads, soups,
school fund-raising
Lego resale store

Supplemental
education

Franchising since: 2011

Startup cost:
$159.4K$232.1K
Total franchises/
co.-owned: 30/3

Franchising since: 2012

Startup cost:
$394K$857K
Total franchises/
co.-owned: 98/5

sides

programs

Franchising since: 2012

Startup cost:
$336.5K$539.2K
Total franchises/
co.-owned: 30/8

Franchising since: 2012

Startup cost:
$60.5K$86.2K
Total franchises/
co.-owned: 66/0

Lightbridge
Academy
23
Childcare/early

Go Minis
Portable
27
Storage & Moving

learning

Portable storage
containers

Bottle &
Bottega
20
Paint-and-sip studio
Franchising since: 2011
Startup cost:
$94.3K$146.1K
Total franchises/
co.-owned: 16/2

Franchising since: 2011

Startup cost:
$470.4K$688.6K
Total franchises/
co.-owned: 4/12

24 Music schools

30
34 Payroll services
Burgers, hot dogs, fries,
BurgerFi
International

onion rings, custards

Franchising since: 2012

Startup cost:
$208.4K$396.6K
Total franchises/
co.-owned: 8/10

Franchising since: 2011

Startup cost:
$651K$1.1M
Total franchises/
co.-owned: 62/17

Mosquito Joe
28
Outdoor pest
control

Pilates
31Club
Pilates classes

Bach to Rock

Hallmark
Homecare
21
Caregiver search,
recruitment and
placement
Franchising since: 2013
Startup cost: $33K$46K
Total franchises/
co.-owned: 90/0

Franchising since: 2011

Startup cost:
$370K$522.5K
Total franchises/
co.-owned: 5/6

Maid Right
Franchising
25
Residential cleaning

Franchising since: 2012

Startup cost:
$62.9K$125.8K
Total franchises/
co.-owned: 113/1

Franchising since: 2013

Startup cost:
$4.7K$48.8K
Total franchises/
co.-owned: 111/0

Click bait

Bricks & Minifigs snaps together

a winning retail formula.

HEN JOHN MASEK AND DAVID ORTIZ met, something

clickedand it wasnt just the Lego bricks they were both
individually buying to resell online. The pair realized that
the best way to sell the tactile toys was to join forces and set up a brickand-mortar store where kids and parents could immerse themselves
and let their imaginationsand walletsrun wild. In 2010, the duo
created Bricks & Minifigs to buy, sell and trade Lego, opening two
stores, one in Battle Ground, Wash., and one in Canby, Ore. A year
later, they took the leap into franchising.
Masek, the companys president and CEO, expects to have a total of
20 stores open by the end of the year, including expansion into Canada.
We asked him to share his insights into how a business concept based
on the appeal of brightly colored little plastic bricks turned into one of
the years top new franchises. T.S.H.

Tons of places carry Lego, and the company even has

its own stores. What makes Bricks & Minigs special?
If you picture all the Lego products that have ever been made as an

102

ENTREPRENEUR 3/16

Payroll Vault

Franchising since: 2012

Startup cost:
$41.1K$68.99K
Total franchises/
co.-owned: 27/1

Franchising since: 2012

Startup cost:
$70.5K$150.1K
Total franchises/
co.-owned: 19/1

SuperGreen
Solutions
35
Energy-efficiency

Ofce
Evolution
39
Virtual office services,

products and services

executive-suite and
conference-room
rentals

Franchising since: 2012

Startup cost:
$161.3K$244.7K
Total franchises/
co.-owned: 40/5

Franchising since: 2012

Startup cost:
$115K$175K
Total franchises/
co.-owned: 48/0

Chocolate
Works
32
Chocolate, candy,

Executive
Home Care
36
Home healthcare

parties

Franchising since: 2012

Startup cost:
$99.8K$151K
Total franchises/
co.-owned: 8/2

Franchising since: 2012

Startup cost:
$290.5K$456.6K
Total franchises/
co.-owned: 17/0

Digital Doc
38
Electronics
repairs and accessories

iceberg, the big-box

stores carry only the tip
of the icebergthe new
sets. What makes us different is we carry everything below the water.
We buy collections of all
sizes from people, so we
have cases full of used
sets from a few years
to a few decades old,
thousands of minifigures, and dump tables
full of pieces people can
dig through to find what
they need.
Sounds simple,
but why franchise?
We knew we wanted this to be
bigger than us, and we knew that
if we grew through corporate
stores alone, it could become a
very sterile environment very
quickly as we became more removed from our customers. Our

Franchising since: 2012

Startup cost:
$200K$350K
Total franchises/
co.-owned: 12/8

Bricks & Minigs

cofounder and
CEO, John Masek.

stores are meant to be warm and

invitinga welcoming place for
all ages. And its much tougher
to do that under a corporate
umbrella than it is in a locally
owned environment.
So far, every franchised store
has done something to make our
brand stronger. For example, it
was our franchisees who turned

COURTESY OF BRICKS & MINIFIGS

Franchising since: 2011

Startup cost:
$56.7K$96.8K
Total franchises/
co.-owned: 22/10

Franchising since: 2011

Startup cost:
$99.1K$221.2K
Total franchises/
co.-owned: 13/1

Athena
Learning
40
Centers
Tutoring
Franchising since: 2012
Startup cost:
$75.2K$150.8K
Total franchises/
co.-owned: 7/3

Fyzical Therapy
& Balance
41
Centers
Physical therapy,
balance and vestibular
therapy, preventative
wellness services
Franchising since: 2013
Startup cost:
$141.3K$799.5K
Total franchises/
co.-owned: 139/0

Bio-One
42
Crime-scene
and trauma-scene

Move Me
43 You
Moving services
Franchising since: 2012
Startup cost:
$143K$192.2K
Total franchises/
co.-owned: 35/0

1BJOU %SJOL )BWF 'VO n

21
44 Burger
Burgers

Franchising since: 2011

Startup cost:
$428.2K$1.1M
Total franchises/
co.-owned: 15/4

New Uses
45
Homefurnishing and
accessories resale store
Franchising since: 2011
Startup cost:
$187.5K$286.5K
Total franchises/
co.-owned: 10/1

cleaning
Franchising since: 2011
Startup cost: $83K$88K
Total franchises/
co.-owned: 39/0

1JOPUT1BMFUUF DPN 'VO#VTJOFTT

us on to third-party vendors that

make specialized accessories
like weapons for minifigures.
How do you know
youve found a potential
franchisee that will add
value to the brand?
A sense of family. Weve turned
away any number of people who
have an incredible amount of
money because theyre just
looking for another investment
thats not what were looking for.
We want somebody who says,
This is for me; this is for my
family; this is so we have
something thats ours,
that we can grow.
Whats the best feedback
youve received?
From a 6-year-old boy at the
grand opening of our Louisville,
Ky., store: My life will never
be the same.

FRANCHISE OPPORTUNITIES
THE NATIONS FASTEST GROWING HEALTH & WELLNESS FRANCHISE

www.MassageGreenSpa.com | 1-877-62-RELAX

3/16 ENTREPRENEUR

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therapy and chronicdisease management

for ages 60+
Franchising since: 2011
Startup cost:
$166.5K$297.5K
Total franchises/
co.-owned: 11/2

IceBorn
47
Ice and water
vending machines
Franchising since: 2012
Startup cost:
$27.1K$213.5K
Total franchises/
co.-owned: 37/120

Cream
48
Ice cream
sandwiches

We chose to franchise
before we opened our first
bakery.That is how we
wrote our business plan.
If we were going to open
one bakery, then we
wanted to plan opening
the next 1,000 at least.
Scott Jones, CEO and
cofounder, Bens Soft
Pretzels (#50)

Franchising since: 2012

Startup cost:
$191K$535K
Total franchises/
co.-owned: 15/2

Style Encore
49
Womens
clothing and

Bens Soft
Pretzels
50
Soft pretzels, dipping

GymGuyz
Le Macaron
French
51
Mobile personal
52
Pastries
training

accessories resale store

sauces, beverages

Franchising since: 2013

Startup cost:
$254.3K$389.1K
Total franchises/
co.-owned: 32/0

Franchising since: 2013

Startup cost:
$119K$308K
Total franchises/
co.-owned: 53/10

Franchising since: 2013

Startup cost:
$68.2K$166.7K
Total franchises/
co.-owned: 41/4

Macarons, pastries,
gelato, chocolates
Franchising since: 2012
Startup cost:
$129K$256.4K
Total franchises/
co.-owned: 22/7

Your Golden Opportunity

Midas is a globally recognized leader in the tire and automo
for nearly 60 years. We are looking for motivated people to
our Midas franchise family! Build your long term success wi
customers know and trust.
Powerful local and national marketing
 $FFHVVWRQDWLRQDOHHWDFFRXQWVWRKHOS\RXUEXVLQHVVJ
Ongoing training and support
Excellent point of sale and shop management systems
This advertisement does not constitute an offer of a franchise. A franchise offering can be made y s
y in a
state if we are rst registered, excluded, exempted or otherwise qualied to offer franchises in tha s
,a do
if we provide you with an appropriate franchise disclosure document. Franchises may not be avail ble in a st te

midasfranchise.com
800-365-0007
104

ENTREPRENEUR 3/16

y
f

Bar-B-Clean
53
Barbecue
cleaning
Franchising since: 2013
Startup cost:
$19.2K$41.1K
Total franchises/
co.-owned: 20/1

BRIAN KRIDER/BENS SOFT PRETZELS

ActiveRx
46
Strength
training, physical

Iron Tribe
Fitness
54
Group personal-

My Salon
Suite/Salon
58
Plaza

Tapinto.net
61
Local online
news sites

training gyms

Salon suites

Franchising since: 2012

Startup cost:
$305K$438.5K
Total franchises/
co.-owned: 32/6

Franchising since: 2012

Startup cost:
$568K$1.5M
Total franchises/
co.-owned: 27/25

Franchising since: 2013

Startup cost:
$4.1K$13K
Total franchises/
co.-owned: 40/3

55
Indoor
59
trampoline arena and
Electronic cigarettes
Rockin Jump

party space

and related products

Franchising since: 2013

Startup cost:
$892K$1.9M
Total franchises/
co.-owned: 17/3

Franchising since: 2013

Startup cost:
$89.4K$103.2K
Total franchises/
co.-owned: 15/1

56
Real estate

60
Mobile commercial-

Franchising since: 2012

Startup cost:
$53.3K$220K
Total franchises/
co.-owned: 37/31

fleet washing

Realty One
Group

COURTESY OF BLAZE PIZZA

Palm Beach
Vapors

Fleet Clean
Systems

Franchising since: 2013

Startup cost:
$90.1K$320.6K
Total franchises/
co.-owned: 10/7

Trumi
57
Fitness and
nutrition coaching
Franchising since: 2012
Startup cost:
$6.4K$21.1K
Total franchises/
co.-owned: 19/0

The Interface
Financial
62
Group - IFG 50/50
Invoice discounting
Franchising since: 2014
Startup cost:
$86.8K$137.8K
Total franchises/
co.-owned: 68/0

Mosquito
The category is on fire
Shield
63
Outdoor pest control
Franchising since: 2013
Startup cost:
$73.1K$106.8K
Total franchises/
co.-owned: 31/2

and we know franchising

enables us to grow faster
with the most experienced,
well-capitalized franchisees.
Jim Mizes, president
and COO, Blaze FastFired Pizza (#26)

AMAZING

FRANCHISE OPPORTUNITY
Get in on the ground floor of the next hot franchise concept
with Amazing Lash Studio

Amazing Lash Studio is your opportunity to be a part of the start-up of the

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Large and growing demand for eyelash extensions

Fragmented industry with no national brand leader
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Recurring revenue business model
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Local marketing support
Automated business systems
A limited number of regional developer and
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individuals.

Call Today! 855.LASHUSA (855.527.4872)

Visit our website for more information: www.AmazingLashStudio.com/franchise

Your Look. Your Style. Our Lashes.

3/16 ENTREPRENEUR

105

Are You an Entrepreneur?

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Amazing
Lash Studio
64
Franchise

Two Maids
& A Mop
66
Residential cleaning

Eyelash-extension
salons

Franchising since: 2013

Startup cost:
$50.2K$142.95K
Total franchises/
co.-owned: 13/0

Franchising since: 2013

Startup cost:
$246K$404K
Total franchises/
co.-owned: 52/0

Supporting
Strategies
65
Bookkeeping and
operational support
for small businesses
Franchising since: 2013
Startup cost:
$55.4K$80.4K
Total franchises/
co.-owned: 36/1

Device Pitstop
67
Electronics
resales and repairs
Franchising since: 2013
Startup cost:
$178K$243K
Total franchises/
co.-owned: 11/1

LunchBox (A
Waxing Salon)
68
Body waxing

KATIE BOSDE/YOU MOVE ME

Franchising since: 2013

Startup cost:
$133.4K$340.9K
Total franchises/
co.-owned: 15/2

Franchising was
the most costeffective and
strategic way to
grow my business.
Plus, everyone told
me it couldnt be
done, and Ive
never shied away
from a challenge.
Brian Scudamore,
CEO and founder,
You Move Me (#43)

THE NEXT
GENERATION OF
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AN INVESTMENT THAT GROWS!
Avg. Net Prot (EBITDA)

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Innovators in Educational Child Care

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Enjoy a high quality of life

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Recession-resistant industry
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Open territories in New Jersey, New York,
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LightbridgeAcademyFranchise.com

*Figures as published in item 19 of the Federal Disclosure Document. This offering is made by franchise prospectus Lightbridge Franchise Company only.

3/16 ENTREPRENEUR

107

 650 franchise companies

participating
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2/ No

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Fax to (888) 847-6035 or mail to Entrepreneur, P.O. Box 413050, Naples, FL 34101-3050

Expires 08/31/2016

Opportunity Mart

The

Photobooth
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1
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Under

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DISCOVER A
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BUSINESS AND FRANCHISE

OPPORTUNITY FINDER
entm.ag/lowcost

1-800-228-8305 (Ext. 1542)

Fax: 763-559-7545
E-mail: contact@lilorbits.com

LilOrbits, Inc.
Department 1542
8900 109th Avenue, Ste 100
Champlin, MN 55316

If you write to us, please include your phone number!

www.lilorbits.com
3/16 ENTREPRENEUR

111

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Resolutely Difcult Advice

By James Victore

Is what Im making good enough? Thats the question an entrepreneur cannot

stop asking. It begs for an answer. Itbores to the center of our creative souls, hits us
right in the solar plexus of self-doubt and sets off a chain reaction of brutal personal
interrogation about our commitment, our motive, our spirithell, even our very existence.
Heres the solution: Stop. Stop asking that damn question. Stop worrying and start
working. Theres nothing more fruitful than showing up every day and doing the work.
Dont judge it, dont edit it, just do the work. You cant even worry about whether people
will like it, because thats not your call. (Crazy, right? But true.) Just do whats in your
heart and trust that its good enough. Thats what the work is. Do the work.
James Victore is a designer for bold believers, an advocate for creativity and an artist
whose work has been exhibited at New Yorks Museum of Modern Art.

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Preproduction model shown. Available spring 2016.