The world's richest man says everyone needs feedback beyond one-word descriptors.

Bill Gates, who recently reclaimed the title of the richest man in the world, took to the stage earlier this month for a TED talk on one of his pet causes: improving the quality of education. Specifically, the Microsoft creator focused on the need of quality feedback for teachers.

"We all need people who will give us feedback. That's how we improve," Gates told the audience. He continued:

"When Melinda and I learned how little useful feedback most teachers get, we were blown away. Until recently, over 98 percent of teachers just got one word of feedback: satisfactory. If all my bridge coach ever told me was that I was 'satisfactory,' I would have no hope of ever getting better. How would I know who was the best? How would I know what I was doing differently?"

Gates feels thorough peer evaluations, as well as evaluations of teachers by students, might help teachers improve in their career. As an example, Gates used the high-achieving province of Shanghai, China, noting their key to success has been "the way they help teachers keep improving."

"They made sure that younger teachers get a chance to watch master teachers at work. They have weekly study groups, where teachers get together and talk about what's working. They even require each teacher to observe and give feedback to their colleagues."

In other words, real dialogue engendered real feedback.

Like teachers, employees need feedback from their boss. Rather than rely on impersonal one-word evalutations, identify specific aspects of the job workers need to improve on.

How have you helped your employees improve?

A group of community-minded start-ups hope to ease the burden of college tuition with the concept of crowdfunding.

Striking out on your own is hard, but it's even harder with college loan debt.

It's no surprise, then, that a number of start-ups have popped up recently with the mission of tackling America's student loan crisis.

According to Federal Reserve Bank of New York, this debt has almost doubled since 2007 and is nearing $1 trillion. In fact, it's already surpassed the mark of auto loan debt, which is somewhere in the neighborhood of $783 billion, and credit card debt, which stands at $679 billion.

With almost 40 percent of student loan borrowers owing up to $10,000 and 30 percent more owing up to $25,000, these start-ups have their work cut out for them.

Here are six hoping to lessen the burden:

Campus Slice This "social funding platform helps you slice your tuition bill by getting support from your family and friends," says its website. By setting up an education and funding goal, and then inviting family and friends to help reach them, students can effectively crowdfund their education. Supporters are asked to make small monthly contributions, thereby keeping costs down while providing the student with a steady flow of income.

GiveCollege On this crowdfunding site, parents must register their child's 529 college savings plan on GiveCollege's platform, taking care to mention fundraising opportunities--birthdays, holidays, graduations, etc.--and invite friends and family to contribute.

By selecting the type of college parents want their child to attend, GiveCollege can predict the cost of the tuition. "We do this based on the college type you chose, your child's age, the average cost of that college currently, and then the average increase in the cost over the past few years," says Angela Merrill, co-founder.

GradSave This start-up aims to crowdfund college tuition, allowing young people to receive monetary birthday and holiday gifts that directly go toward college savings plans, CEO Marcos Cordero told Inc.

"Friends and family can contribute directly to their savings in lieu of other temporary gifts," so graduates can "focus more on accomplishing dreams of entrepreneurship rather than on paying back loans."

Pave With Pave, prospective students can set up an "innovative social-financial agreement." What does that mean exactly? Students accept a one-time payment from backers in exchange for "a small, affordable percentage of income over a period of 10 years," sort of like selling stock in themselves. The success of the prospect is in their best interest, so backers might opt to provide career guidance, mentorship, and network connections.

Tuition.io This start-up is "saving students and graduates time and money, while working with the lenders to streamline the entire process so that everybody wins," says founder Brendon McQueen. Like Mint.com but with a focus on loan debt, Tuition.io helps users manage their student loan portfolio by providing helpful reminders, personalized advice, and tools such as customized payment plans.

Upstart Similar to Pave, this start-up lets grads barter funds for "a small share of their future incomes," per its website. "The idea of Upstart is, can you provide a window of economic freedom as well as some guidance and mentorship for people that want to take a non-traditional path?" says founder Dave Girouard.

The innovative production company received top honors for its brand-driven content this week.

It's no secret the advertising production company B-Reel is changing the industry. The company made waves last year with the viral sensation The Wilderness Downtown, and this year it released The Beauty Inside, an interactive branded film that invites viewers to play the lead role.

On Friday, B-Reel announced it had swept the prestigious CLIO awards, winning not one, but two Gold distinctions in the Film and Branded Entertainment categories. Other recent award wins include six One Show awards, two Golds for SXSW, five Art Directors Club awards, and four Webby awards.

"The Beauty Inside is a truly integrated project, where the boundaries between traditional storytelling and user interaction is totally blurred,” Pelle Nilsson, executive producer and founding partner, said in a statement. “And it shows that a great collaboration between agency and production company is what makes for outstanding execution."

B-Reel, which has its roots in Scandinavia, has traditionally shied away from straightforward ad work, even as it lacked the technology.

"Limitations are frustrating, but they can also trigger a really creative side in you," Petter Westlund, the company's chief creative officer, said of the company's hacker mentality. To date, the company has created dazzling ad campaigns for Mitsubishi, State Farm, Doritos, and Google.

The Beauty Inside is not the first B-Reel production to receive accolades this year. Both that film and another short for Google Maps Cube received numerous nominations and won four Silver Pencils and one Bronze Pencil from The One Club, which promotes excellence in advertising and design.

B-Reel currently runs six offices worldwide and five divisions, including commercials, content, digital, feature films, and products.

Dr. Dre and Jimmy Iovine gave USC $70 million to fund a degree for creative entrepreneurs. The program's success may depend on these things.

With a modest $70 million grant from Dr. Dre and Jimmy Iovine, the University of Southern California announced a program for creative entrepreneurs this week nicknamed "the degree in disruption."

The program, featured in The New York Times, sounds like an entrepreneur's dream come true. Beyond attending an academy conceived by the mind behind the hip hop hit, "Let Me Ride," students will dive into the business world by way of music, marketing, patents, and prototypes. The four-year program culminates in a senior thesis project, in which students team up and spend a year designing a prototype.

Iovine and Dre told The Times' Jenna Wortham they never expected to start a university program. But at a time when Internet giants like Yahoo are acquiring young start-ups in order to stay relevant, the degree offers the hope of discovering the next Steve Jobs. That's a good look for USC and a strong selling point for cash-flush VCs, who might scour the campus in search of young talent.

The only question is: Will it work?

The true test of the program's success depends on three factors, says Chris Vance, a Kellogg School of Management graduate and CEO of the start-up Playground Sessions.

Vance says, "It's going to come down to the strength of the curriculum, the teachers, and admissions committee's ability to accept--and nurture--students with that entrepreneurial spirit, which is a difficult thing to teach and define."

Given USC's track record for turning out top-notch talent--both Don Bayne (Trader Joe's) and Henry Caraso (Dollar Rent-A-Car) graduated from the Marshall School of Business in the late 1960s and early 1970s--this endevour should have no problem churning out winners.

Although, Vance is wary of any entreprenurial program that is too narrowly focused on business. "It has to have a strong liberal arts foundation," Vance stresses. "Philosophy and even foreign language should be taught on top of the more focused coursework." He agrees that the marketing curriculum will be important because "you've got to know how to sell your product," and that working in groups helps to "develop leadership qualities and listening skills." The latter is what makes an entrepreneur sensitive and aware of the fact that "the best idea is the product of many," he says.

Despite some early pitfalls, the social network has successfully made the transition from start-up to publicly traded company.

It's the eve of Facebook's one-year IPO anniversary, and what a strange year it's been.

The Menlo, California-based company has successfully ginned up revenue to the tune of $1.46 billion in its first reported quarter, up 36 percent from $1.06 billion a year ago, according to The Wall Street Journal.

But while the company has made good on its decision to ramp up advertising, the jury's still out on whether users appreciate it.

According to The Journal, the days of relying on desktop ads in the right-hand column of its website, which the company did before filing for its IPO, are all but over.

Facebook's begun running ads for the first time on mobile devices and in its News Feed, and created "special widgets" for ads that promote installments of third-party applications. The company also launched a now-fledgling e-commerce store, which some say has dilluted the user experience.

To be fair, Facebook admitted a year ago that it was "not originally created to be a company," but was "built to accomplish a social mission--to make the world more open and connected." The company has succeeded on both counts, of course, but as The Journal points out, the idea that revenue would stem from user engagement hasn't "been enough to push Facebook's stop back up to its IPO price last May of $38.

Although that's not to say Facebook hasn't tried. After changing its tone on revenue last year, the social network made efforts to connect with advertising clients, going so far as to organize boot camps for employees and trips to meet with bigwigs like Procter & Gamble.

To date, Facebook has not delivered on all its shareholders' expectations, but some companies told The Journal the revenue-friendly attitude has encouraged them to spend more money on the site. Online retailer JackThreads.com, for example, says he's taken advantage of Facebook Exchange, a real-time marketplace that sells ads based on what sites users are visiting.

The missing link between intelligence and performance is grit, says Angela Lee Duckworth.

Angela Lee Duckworth, a former consultant at McKinsey, knows all about pushing past limits.

At the age of 27, Duckworth left her high-flying post in management consulting to teach math in New York City's public schools. As a teacher she realized some of her strongest performers didn't have "stratospheric IQ scores," but would fare better on their tests than their smarter peers.

What was the missing link between their limited abilities and their performance? Duckworth knew immediately it had to be grit. All the students could learn the material if they worked long and hard enough at it. Innate intelligence wasn't a factor--what mattered was doing the work.

"Grit is passion and perseverance for very long-term goals," Duckworth said in a recent TED talk. "Grit is having stamina. Grit is sticking with your future, day in, day out, not just for the week, not just for the month, but for years, and working really hard to make that future a reality. Grit is living life like it's a marathon, not a sprint."

Perhaps the most remarkable thing about grit, she continued, was how little scientists understand it. So far, the best idea she's heard is growth mindset, the belief that the ability to learn is not fixed and can change with your effort.

"We need to take our best ideas, our strongest intuition, and we need to test them," Duckworth said. "We need to measure whether we've been successful, and we have to be willing to fail, to be wrong, to start over again with lessons learned."

How have you applied grit at your business?

Harvard Business School grad Angela Newman left a high-paying consulting career to launch her own line of high-tech women's undergarments. Below, she shares five tips that any start-up CEO can learn from.

When Angela Newman was getting an MBA at Harvard in 1994, creating a line of undergarments couldn't have been further from her mind. "Never in a million years," she laughs now. But after graduating with her MBA in 1996, she landed a consulting position at McKinsey where she became an expert in textiles. It was something that was already in her blood. She grew up North Carolina, the heart of the U.S. textiles industry, and for many years watched her father hard at work as an executive at Milliken, a high-tech textile company that was big on R&D.

In 2009, Newman started developing what would eventually become Knock out!, a line of specialized undergarments made from odor- and moisture-absorbing fabric. In April, Newman beat out some 130 global entries to become the first woman-owned business to win Harvard Business School's Alumni New Venture Contest. Below, Newman shares some of the lessons she's learned from spending 11 years in the textiles industry and five years at the helm of her own company.

1. Play the Field
Every founder has "positions" they love to play, but this is a hazard in a start-up! With my passion to make undergarments, I spent nearly all of my early time on R&D and production. I eventually had to force myself--sometimes over strong objections--to get involved in EVERY area--including IT, legal, distribution and customer service. My goal was to gain an understanding, not necessarily do everything. Knowing enough about each area to ask the right questions and establish the right measures should be a part of every CEO's tool kit. Plus, it keeps life interesting!

2. Stay close to the customer
With all the breadth of work and pace of change that occurs in start-ups, it is easy to lose contact with the most important aspect for success of any business--the customer. We don't have a big market research budget, but I get valuable information by going direct to our wholesale and retail customers on everything from marketing messaging to prototype testing. These unfiltered customer opinions help us avoid mistakes and actually enhance the overall relationship between our company and our customers--which is invaluable in our over-marketed world.

3. Enter business competitions
Start-ups are often operating on a tight budget and everyone is going 200 miles per hour, so the idea of adding some non-critical item to the TO DO list is not popular. But the benefits business competitions offer cannot be overlooked--feedback on the concept, new contacts, and publicity to name just a few. I entered Knock out in three business plan competitions within our first two years--investing over a full month of my time toward these contests. Was it worth it? Absolutely! Knock out won the Harvard competition and was chosen one of the Top 15 Global Startups by Kauffman Foundation. The payoff was enormous. Experienced feedback, money, many contacts with venture investors and faculty, and lots of publicity.

4. Don't forget to live
No person can keep up the start-up pace indefinitely. It is easy to become engrossed in the business and forget friends, family, fitness, and hobbies. Every founder must learn to step back and enjoy life--not only will it improve health and happiness, but it will provide the much underappreciated time to take a step back and reflect on the business. I never miss my gals trips.

5. Be willing to let go
Every entrepreneur will tell you the "new venture" is more like a new baby. Full of energy, endless needs, joyous and frustrating all at the same time and all consuming in the early days. But just as babies grow up and become more independent, so should the startup. Building infrastructure, hiring great people and making yourself "expendable" should be the goal of every startup that wants to grow up.

Four simple, destructive behaviors that doom a marriage--and a business.

Kim Kardashian and I have one thing in common. Neither of us would know the other if we tripped over them.

Before a few days ago, I was aware that she's famous, that she's had reality shows and a sex tape, that she had a 72-day marriage to the NBA's Kris Humphries, and that she has more Twitter followers (17.8 million million as of last count) than all but three U.S. states have people.

But then, the other night, a friend posted a link on Facebook to Scientific American: "How to Have a Longer Marriage Than Kim Kardashian."

I clicked. I read. I learned. I learned about Kim Kardashian--but I also learned some great tips for running a business.

The article was based on a study of married couples that lasted 14 years (about 71 times the length of the Kardashian-Humphries marriage). As I read, I realized that psychologists John Gottman and Robert Levenson's advice about saving a marriage also adds up to great practical advice for leading stakeholders in your business.

Gottman and Levenson didn't actually study the Kardashian-Humphries marriage, but they wanted to identify early signs that couples would split. So, they asked 80 Midwestern married couples to describe a recent argument. They recorded how the couples interacted with each other--and then they tracked them for 14 years.

Here's the amazing part, according to writer Melanie Tannenbaum:

Gottman and Levenson eventually realized something incredibly important: They didn't actually need to note down all that much. In fact, there were just four behaviors that could be used to predict which couples would still be married 14 years later -- with 93 percent accuracy.

Gottman and Levenson refer to the troublesome quartet of behaviors -- contempt, criticism, defensiveness, and stonewalling -- as the Four Horsemen of the Apocalypse. (This is where the Kardashian part comes in, because Tannenbaum cleverly illustrated each behavior using clips of Kardashian and Humphries arguing on TV.)

Avoiding these four behaviors might be good for a marriage, but they're also an excellent guide for any business leader who wants to improve communication. So here's an examination of the four, along with what you can do to avoid them in your business.

1. Avoid contempt by building a culture of appreciation.

Contempt "is a potent mix of anger and disgust," Tannenbaum writes. The Kardashian clip she chose to illustrate contempt shows Humphries telling his soon-to-be-bride that her career is "essentially worthless" during a heated debate over what state they should live in.

To avoid contempt, Gottman and Levenson advise leading by example, with constant, proactive, respect. This might mean giving credit for accomplishments, but also offering admiration for their work in things that you don't do as well. (Think of the marketing person who shows sincere interest and respect in how the product developers learned their craft.) It also means demonstrating that you, as a leader, expect the same kind of respect in return.

2. Make criticism about actions, not people.

Gottman and Levenson draw a distinction between personal criticism and legitimate complaints. Tannenbaum illustrates this with a video clip in which Kardashian tells Humphries that his messy tooth-brushing habits are "gross" and that people like him are "one of [her] pet peeves."

The old adage, "praise in public, criticize in private" has fallen out of favor, so it's even more essential now that you promote a culture in which expressions of contempt are verboten. People need to think about whether they're legitimately criticizing their colleagues' performance, or launching more ad hominem attacks.

3. Avoid defensiveness; be responsible.

The best offense may be a good defense, but defensiveness only gives offense. Tannenbaum illustrates this with a clip in which Kardashian blames Humphries when she loses of a $75,000 pair of earrings in the ocean--refusing to accept her possible responsibility for say, wearing $75,000 earrings in the ocean.

Gottman and Levenson advise avoiding defensiveness by actively accepting responsibility when things go wrong.

"This doesn't mean shouldering all the blame," Tannenbaum writes, but simply acknowledging your acts and omissions that may have contributed to someone else's less-than-stellar performance. Doing so might help you quickly navigate the personal minefields in a difficult situation and approach the real problems.

4. Don't tolerate stonewalling.

They say the opposite of love isn't hate, it's apathy. To illustrate this Tannenbaum chose a clip in which Kardashian told Humphries she did not plan to take his last name.

"This clearly bothers him," she wrote, but "rather than talking this out and coming to some sort of compromise or reasoned conclusion, Kris completely shuts her out."

Stonewalling can be a behavioral response to stress, she continues, "accompanied by increased physiological responses like an accelerated heart rate, higher blood pressure, and sweating." If you feel yourself reacting in this way, or if you observe it in your employees, Gottman and Levenson's advice is to "engage in something called 'physiological self-soothing,' which basically just means taking deep breaths and trying to mindfully relax."

In other words, take a deep breath, count to 10, and remind yourself that your business (or your relationship) is well worth the price of this momentary stress. As H.G. Wells said, "The crisis of today is the joke of tomorrow."

The fast-growing data visualization software company puts Seattle back on the IPO map.

Tableau Software, the Seattle-based data visualization software company, joins the sparsely-populated ranks of tech start-ups that have gone public so far this year, pricing its stock at $31 per share for Friday's IPO.

Under these pricing terms, Tableau will have a market capitalization of $1.7 billion, Forbes reported. The company is offering up 5 million shares Friday, while stockholders are offering up 3.2 million, GigaOm reported. Shares will trade under the symbol "DATA" on the New York Stock Exchange, and co-founder and CEO Christian Chabot rang the opening bell this morning.

Tableau's first-quarter revenue in 2013 reached $40 million, up more than 60 percent from $24.7 million in the same period last year, Forbes reported. Even if pricing stays flat all day Friday, GigaOm's Derrick Harris wrote, the company stands to rake in $155 million from its 5 million shares.

The company has landed on the ranks of the Inc. 5000 for five consecutive years starting in 2008. That year, the company had $13.2 million in sales revenue which increased 373 percent to $62.4 million in 2011.

Tableau is the first Seattle-based tech company to go public since Zillow's public offering in July 2011, GeekWire reported.

Yes, crowdfunding is cool. It's democratic. It's disruptive. And it's a bad idea for a lot of start-ups.

There are two completely different ways of looking at crowdfunding. It is either a) the best thing to happen to start-ups since Red Bull; or b) while sometimes useful, it’s no serious substitute for other sources of money, including family & friends. Even bootstrapping.

This may not endear me to some of my friends, but increasingly, I lean towards the latter.

Yes, I know, I know. Crowdfunding is revolutionary. It lets you raise funds without sacrificing ownership or having to face relatives across the table at holidays, or needing to promise a return besides a free sample of your product or some other “reward.” At least until the SEC weighs in with rules on how you can crowd-source equity investors, you don’t need to do much of anything to apply for that money except create a decent color scheme and tell a nice story. Even so, crowdfunding has drawbacks. Here are three:

1. It makes it too easy to kid yourself

Ever written a business plan? If you have, you know how much painstaking thought you have to put into crafting mission statements, identifying supply chains, forecasting sales and determining costs, etc. It’s like going to college--you put in the effort to show what you’re capable of. Granted, not every professional investor will demand a business plan, as such, but all of them will demand to get under the hood of your business proposal. Until you’ve validated every decision you made in creating your company and developing your product, you’re not getting anywhere with them.

With crowdfunding, it’s a bit different.

Even if you have a real business in mind--as opposed to, say, a campaign to cover your expenses while you study art in Florence--you know one thing: No one on Kickstarter, Indiegogo or their imitators is going to ask you to estimate your cost of customer acquisition or the size of your potential revenue streams or any other tough business questions.

Yes, running the numbers is hard, let alone using those numbers to win over skeptical investors. But there’s a reason for that. Business is hard. Convincing real investors that you’ve got what it takes is your company’s first reality check. Crowdfunding can let you postpone reality, but not indefinitely. It’s better to ask the hard questions before you’ve burned through a year of your life and $100k of other people’s money.

2. It isolates you from people who can actually help you

Raising money from professional investors forces you to be think hard about your company and be honest with yourself. But it also gives you the benefit of having real, seasoned experts thinking hard about your company, too.

A seasoned angel or VC can help you decide, say, whether to incorporate, how to cope with a cash crunch (which you will have, trust me), and where to turn for advice about a thorny business development question. Crowdfunding may connect you with seed money, but ultimately your company stands a higher chance of success with the benefit of the tactical savvy, strategies for market capture, and smart financial practices that a seasoned investor can provide. Also, a well-connected veteran with a serious stake in your success can open doors that a pack of starry-eyed strangers chipping in $50 apiece simply cannot.

3. I'd never recommend investing in a crowdfunded company. What does that tell you?

I recently reviewed a crowdfunding proposal from a company that makes nutritious snacks using a global supply chain in West Africa. The company is looking for $50,000 on indiegogo.com to fund production. The campaign offers 11 contribution categories, with perks ranging from a personal thank you on their website to a weekend in Napa complete with wine tastings, hikes, and quality food.

After researching this company's team, it became apparent to me that no one had any financial experience. In fact, only one team member had any qualifications listed on the crowdfunding site at all. If you are serious about starting and building a company that lasts, why would you want to surround yourself with company like this?

Realizing your dream as an entrepreneur is hard. Crowdfunding sites, in my opinion, distort the dream. Granted, funding can help supplement other sources of money and help you try out a product, but the true test of a business is what happens after the funding is done. And that’s when you’ll need the discipline, expertise and sense of urgency that comes putting your own money at risk or that of serious investors who expect a real return.

One YC partner makes an exit, while Paul Graham introduces five new ones--including Groupon founder and ex-CEO, Andrew Mason.

Y Combinator founder Paul Graham took to his blog yesterday to announce the hire of four new part-time partners--including Groupon founder and ex-CEO Andrew Mason.

The other part-time partners, who will advise the next class of YC start-ups, include Michael Seibel, the founder of Socialcam, Steve Huffman, the co-founder of Hipmunk and Reddit, and Dalton Caldwell, the co-founder of Imeem and App.net.

Kevin Hale, the co-founder of Wufoo, will join YC as a full-time partner.

"We've known all these guys for years and we can already tell it will be great to work with them," Graham wrote. Harj Taggar, the first-ever YC partner will be leaving the firm.

But the big news here is the surprise return of Andrew Mason, the Groupon founder who was, for all intents and purposes, canned from his last gig as Groupon's CEO. He's not just becoming a part-time partner at YC, either. In a blog post on his own site--timed with Paul Graham's post--Mason had a few announcements of his own.

"If there's a silver lining to leaving Groupon, it's the opportunity to start something new," Mason wrote. "I've accumulated a backlog of ideas over the last several years, my favorite of which I'll be turning into a new company this fall."

He doesn't offer many details about the new company, but Mason also used the post to announce a third new project that's currently in the works--a music album targeted at young people entering the workforce.

Yes. For real. (Well, so he says. But honestly, we're talking about Andrew Mason, after all.)

In his words:

I came to realize that there was a real need to present business wisdom in a format that is more accessible to the younger generation. It was with this in mind that I spent a week in LA earlier this month recording Hardly Workin', a seven song album of motivational business music targeted at people newly entering the workforce. These songs will help young people understand some of the ideas that I've found to be a key part of becoming a productive and effective employee.

We'll be sure to stay tuned.

Yahoo is eyeing the blogging platform Tumblr, but Facebook might beat it to the buzzer.

It's beginning to look like Facebook might spoil Yahoo's acquisition party.

The search giant has been eyeing Tumblr for awhile, according to All Things D, and CEO Marissa Mayer has been on an acquisition spree--ten companies to be exact--ever since she took the reigns nine months ago.

According to sources close to the corporate development team, Yahoo believes Tumblr could bring them the key 18 to 24-year-old demographic it needs to seem relevant and youthful.

However, David Karp, one of the blogging platform's founders and chief executive, has been seen around Silicon Valley nuzzling up to another tech bigwig who goes by the name of Mark Zuckerberg.

Karp was first spotted at the Facebook Home launch, reports Giga Om. Facebook also has a reputation for snapping up startups, with Instagram being its largest (and most successful) to date.

A Facebook spokesperson declined to comment, but Giga Om seems to think both companies are eyeing Tumblr due to its mobile ad push. Mayer has said she's focused on mobile, and Tumblr owns nearly 108 million blogs and 50 billion posts, with 117 million visitors a month, according to comScore. Karp's company is rumored to be valued at $800 million.

"For Yahoo this could be a much needed foray into mobile advertising and also into pushing new native ad-formats that help diversify its ad business away from the usual web advertising," says Giga Om.

Serial entrepreneur and mentor Jeff Hoffman writes about his experience aboard the floating accelerator Unreasonable at Sea.

I'm amazed to see an explosion of global interest in entrepreneurship in the last few years. Nations on every continent are turning to entrepreneurs to address unemployment, create jobs, stimulate economies, and innovate new ideas.

A great example of this flurry of activity is Unreasonable at Sea. Created by the Unreasonable Institute in Boulder, Colorado, Unreasonable at Sea is an inventive and impressive undertaking in which 11 start-ups travel on a ship to 13 countries to try and launch their ventures in multiple global markets in a condensed period of time. During the days in between ports of call, the entrepreneurs continue working on their start-ups with the help of seasoned mentors (like me) on board.

I wrote this dispatch last month somewhere off the coast of Gambia, between stops in Accra, Ghana, and Casablanca, Morocco. The entrepreneurs and their products on the floating incubator gave me hope for a better world. One team developed a solar powered hearing aid that is allowing thousands of deaf people in underdeveloped nations to hear for the first time. Another team made a low-cost, non-invasive surgical device that is making surgery available to rural villages where surgery was never available before. A third group created a low-cost stove that will allow families in emerging nations to prepare their own food in places where they could never cook their own meals before. And there's eight more.

It's encouraging to see a generation of young people who want to make the world a better place, and are launching companies to achieve that goal. But the uniqueness of the Unreasonable at Sea voyage makes this an incubator like no other. As they build their start-ups, the entrepreneurs visit potential markets and immerse themselves in on-the-ground activities with the real potential buyers of their products. They hold focus groups in India, visit villages in Ghana, test products in Myanmar, and meet with distributors in Vietnam. It's not only a life-changing experience, it's a turbo-charged entry into global markets that few entrepreneurs will ever be exposed to.

This kind of outside-the-box thinking, from the creators of Unreasonable at Sea, mixed with incredible entrepreneurs and mentors on the ship, come together to push the boundaries of entrepreneurship and social responsibility to exciting new levels. I can already tell it will benefit millions of people on every continent long after this journey is over.

These eight tips will make your business travel easier and cheaper.

On Sunday May 19th, I will finish the tail end of an epic journey that started March 12th and included, Ho Chi Minh City, Phan Thiet, and Phu Quoc in Vietnam, Dubai in the UAE, Bath, Brighton and London in Great Britain, not to mention, San Francisco, Silicon Valley, Berkeley, Philadelphia, Atlanta, Atlantic City and Washington, D.C. During this entire time, I stopped home in New York City for only nine days.

I had weather ranging from 100 degrees and 90 percent humidity to 35 degrees with wind and rain. I needed to dress casual, business casual, in a suit and tie, and I needed workout clothes as well. I traveled in planes, trains, and automobiles as well as tubes, subways, buses, cabs, trolleys, and often by foot for three or four miles to get to my destination.

It was a blast! I learned a few things have changed in travel recently, so here are eight of my latest and most useful tips for the occasional traveler as well as the seasoned veteran.

Roaming is still expensive, but most smartphones work on wireless in foreign lands. Call your carrier and check your options. Sometimes, you can buy a phone with time for cheap which is well worth it for the connectivity. Let your credit card companies know you are going to distant lands or you may find yourself cutoff at the worst time. You'll need your card available for the best exchange rates.

There is nothing worse then broken luggage on a long trip. For a few hundred dollars, you can get indestructible, easily packable roller bags that are well worth the investment. I have used only two bags in the last 20 years thanks to Briggs and Riley. For carryon, I switched to a backpack. This Tumi T-Tech is my new favorite. It's big enough to carry all I need but it's light, compact and with leather trim looks nice for any meeting. I keep my luggage packed with all my toiletries and travel items ready to go at all times. And don't forget to pack a swimsuit because you never know when you'll need it.

TSA is the worst part of travel these days. The new scanners require no items on your person. I wear slip on shoes and drawstring pants to avoid the belt issue. Put all your pocket items in a light jacket or sport coat while in line so you can just put the whole coat in the bin. It's still a hassle but you might be able to skip the whole thing with TSA Pre™.

Yes really! Thanks to new electronic tracking systems, today there is less than a 0.3 percent chance of luggage being lost. Plus, little time is saved by keeping it with you. In most airports, by the time you actually disembark, go to the bathroom, train to the main terminal and get to baggage claim, your luggage is nearly there. Meanwhile, by checking, TSA is faster, you can pack any size shampoo, avoid scrambling for overhead space, and you get an easy, lightweight walk through the terminal. You can avoid fees with frequent flyer status or an airline credit card. Then enjoy plenty of room to relax on the plane. For a little more legroom, after take off, take your carryon from under the seat and tuck it behind your legs. It acts like a footrest and allows you to stretch your legs.

E-readers are fine, but any flight will leave you with over 90 minutes of non-electronic time. This is my favorite reading opportunity. I always keep a new novel to entertain me and I never have to charge it. My other must-have is this new Samsonite adjustable pillow. I shaped it for many uses on planes, trains and for use in hotels. It beats any inflatable by far.

As a writer and video guy, I find tablets (even with keyboards) grossly inadequate for serious editing work. And sadly, my MacBook Pro 13" was proving too big to open on some domestic coach flights. I love my new MacBook Air 11". I tested it successfully in the tightest of spaces, and I love how light it is. If you prefer PC, get a small netbook. The cloud helps you use a small laptop for travel even if you need the big screen at home, and you'll be thrilled with the portability for walking and full features out and about. Don't forget a power adapter for all those weird plugs.

Taxi cabs are hands down the most expensive form of transportation in most cities. They're convenient for short distances if traffic is not terrible, but public transportation is best. Do some research and use the subway, metro or underground. You'll save a ton of dough and get to see the flavor of the city by people watching. Or better yet, if you can time your meetings appropriately and if weather permits, take long walks and really experience the foreign lands you're visiting.

I've stayed in my share of hotels, which were mostly fine. But Airbnb is now my lodging approach of first choice, especially in foreign lands. I used it twice on this adventure for three nights in Dubai and six nights in London. In each case, I had my own room with all the amenities of any hotel, and my hosts were delightfully friendly, and better at inside knowledge than any concierge I've known. I stayed in beautiful homes at a total cost savings for the nine nights of more than $2,000 overall compared with hotels in the same vicinity.

Like this post? If so, sign up here and never miss out on Kevin's thoughts and humor.

Forget shiny objects and distractions. How people who grew up with nothing, people like you and me, build big-time success.

There's way too much focus on amorphous concepts like leadership and entrepreneurship these days. If you spend enough time around successful executives and entrepreneurs, you quickly learn that none of them ever set out to become either. That's just not how it works.

The more I think about it, if I came into the workforce now instead of 30 years ago, I'm not sure I would have made it. Frankly, the odds are much slimmer now. There's just too much distraction, too many shiny objects, too much information keeping people from focusing on what really matters.

Make no mistake: It's still possible to make it big. It just takes some focus, and the ability to tune out the noise and the pomp. This is how real people who grew up with nothing end up making it big in the real world.

By making their own luck. They say luck is when preparation meets opportunity. That's absolutely true. Take baseball. When you get a high fastball right where you want it, it doesn't do any good if you can't hit it out of the park. You've got to be ready when that break comes.

By trusting their gut. I don't get crowdsourcing; it makes no sense to me. When everyone collaborates and has to agree on everything, you don't get innovation and you don't get great work. Sometimes you just need a focus group of one.

By making smart decisions. There's a good reason why smart people do well in this world. They can reason. They don't throw caution to the wind based on one data point from a source that isn't credible. There's simply no way around it. Good things come to people who make good calls.

By taking risks. The single biggest reason why the vast majority of people go nowhere in life is because they don't or won't take risks. They take the easy way out, the path of least resistance. You don't make it big that way. Ever.

By finding big problems that need to be solved. There's a huge misconception that innovation is mostly about inventing or coming up with cool new things. More often than not, innovation is about figuring out what people really need or want but can't have or afford.

By saying "sure, no problem" a lot. If you're always telling people why you can't do something, if you parse everything and nitpick, I've got news for you: You're not going anywhere. If you want to make it in this world, learn to say, "sure, no problem." Practice. It's good for you.

By working their tails off when they need to. Sure, there are people who became rich and successful the easy way. There must be. But I've never met or known one. Not one out of thousands. So forget it. If you're not ready to work your tail off whenever you need to, settle in for a life of mediocrity. And one more thing. First you do the work. Lots and lots of work. Then success happens. In that order.

By focusing on what really matters. You know all the personal branding, blogging, tweeting, liking, messaging, posting, status updating, and social networking everyone spends all their time doing these days. None of that matters. Period.

By negotiating hard. And getting equity. Whether it's your own company or a piece of somebody else's, if you want to make it big, you've got to get a piece of the pie. The catch is that nobody wants to give it up, at least not easily. So you've got to negotiate hard. Do it. It'll pay off big-time.

By finding ways to resolve their issues and complement their weaknesses. I keep hearing about strengths-based leadership. What a crock. If you've got big issues or weaknesses that are holding you back, you need to face reality and find a way to either resolve them or partner with others who can put up with you and fill in the gaps.

By listening and learning from smart, accomplished people. This is the argument for getting out in the real world and working for a stellar company or two while you're young. You'll learn how things work in the business world. You'll learn how to manage. You'll learn the ropes from people who've actually accomplished what you aim to do.

By doing. Nobody ever got anywhere by sitting on their butts and saying, "Someday I'll do that ... maybe tomorrow." Successful people are people of action. They do things. They get things done.

Now go out and make it big.

Are your employees afraid to disagree with you? Here's how to help them stand up for their opinions.

As the CEO of my online marketing company VerticalResponse, I'm actively involved in the day-to-day and right now I've got 12 direct reports. They span from coordinators to SVP level so I'm dealing with a varied bag of experience and know-how. My team understands that as involved as I am, each one of them is empowered to chart the course for their projects, make decisions and get stuff done to meet our individual and collective company goals.

I was in a meeting with my director of content marketing the other day and she asked me a pretty interesting question... " How do you like to receive push back?" She was asking because not everyone feels comfortable and confident pushing back on the boss (me in this case). It got me thinking about this; as the boss you have to take the fear and risk out of the equation for your employees concerning taking a stance. Allow them to:

1. Just Do It

Imagine that your employee already feels intimidated and scared. Let them know that you hired them because of their expertise, experience and knowledge about what they do. As the CEO or boss, you don't know everything about everything--that's why you need them and want them to share what they know, even if it conflicts with something you think or say. Of course, the feedback should be communicated in a respectful and business appropriate manner--something like, "I disagree here because I have some data from a recent customer survey that our customers prefer X, not Y," is preferable to "You don't have a clue. I know what our customers want."

2. Stop Agreeing

Have you ever been in a meeting where there was that person that shook their head and agreed with everything that was being said, but then walked out of the meeting and slammed everything and disagreed? Passive-aggressive agreement serves no one especially when it comes to business. Allow for an environment where people feel like they are being heard and can say what's on their mind.

3. Have a POV

Your employees are smart otherwise you wouldn't keep them around, so allow them to have an opinion and bring it. Having differing points of views and opinions is the stuff that great products and companies are made of. Being part of the big idea or a collaborative process means everyone speaks up, shares and takes risks. Provide that safe environment where employees can speak up, be heard and be valued for it.

You may be at the top of the org chart, but you admittedly don't have all the answers. You need and depend on your team for information, solutions and getting stuff done, so make sure they feel included in the decision making process all along the way. For instance, if I'm in a meeting and someone asks me what I think we should do, I often turn the tables (in a good way) and ask them what they recommend.

Using the example above, if I ask what someone thinks and then ignore their response, you can imagine how they'd feel. So no matter what, you must actively listen to what people have to say, consider it and take it in, no matter how strongly you feel about it. Otherwise, you'll be a hypocrite and no one wants that.

So how do you handle it if you just don't agree and need to make a decision that your employee doesn't share? Being honest and transparent is your best bet. Let your employee know that you've heard what they had to say, that you really value their opinion, but for [insert the reason] this decision needs to be made. Most employees get that as the boss you have to make tough choices sometimes, and as long as they are considered and valued in the process, they'll buy in and support it.

How do you prefer or handle getting push back? Got any advice to add?

Did you enjoy this post? If so, sign up for the free VR Buzz weekly newsletter and check out the VerticalResponse Marketing Blog.

The captain of the world's most ubiquitous social media platform talks leadership, disruption, and why he follows Mia Farrow.

There are certain things you’d expect of the CEO of the fastest growing, most disruptive, 140-character communications platform in the world. For starters, you’d expect him to spend a lot of time thinking about the future, much of which his company is driving. You’d expect him to be scrambling to keep up with explosive growth. You’d expect him to be pithy: anyone viewing the world through 140-characters updates ought to be pretty good at concise expression. And you’d expect him to be surprised by nothing.

Well, three out of four isn’t bad.

Dick Costolo’s path to CEO of Twitter has actually been full of surprising twists, and the company he runs has been a continual source of amazement--to him as well as everyone else. Costolo came to Twitter in 2009 as COO and took over as CEO, supposedly temporarily, when co-founder Evan Williams went on paternity leave. (Moral: Don't go on paternity leave.) He was interviewed this week by Jason Mendelson of the Foundry Group at the annual meeting of the National Venture Capital Association, the venture capitalists’ trade group. The following is an edited version of his remarks.

On his not exactly straight career path

Costolo was a classic engineering geek at the University of Michigan. To fill out his degree requirements in his senior year, he began taking acting classes--and wound up stage-struck. On graduation, he spurned tech job offers to head for Chicago and the famous improv comedy troupe, Second City, where he worked alongside, among others, a young Steve Carrell.

Acting is a hard profession. After Second City, I was getting auditions for things, but I didn’t get any parts. I guess in retrospect that was all part of my career strategy.

What launched me toward Feedburner? Well, the Internet happened. When I saw Mosaic, I thought, “I gotta do this.”

I founded and sold a few companies. Feedburner was my fourth. [It sold to Google in 2007 for a rumored $100 million-ed.] Carrell and I were recently reviewing where everyone in Second City with us had ended up. Steve turned to me and said, “Too bad things didn’t work out for you.”

But I do think the theater background has helped. One of the things that I think I do well as a CEO is that I’m present. When I’m with my employees, I’m there in the moment. That’s something you learn in improv, where what’s here right now is all that matters.

On starting up outside Silicon Valley

Taking the helm of Twitter meant moving to Silicon Valley, which Costolo views as a mixed blessing.

It's absolutely possible to do start ups outside of the Valley. I loved Chicago for the same reason Warren Buffett likes Omaha. When you’re outside the Beltway, as it were, you are spared a lot of distractions. You’re not always being told “This or that is a great deal. Everybody who knows anything is getting into it.” I remember one can’t-miss deal in particular. The company raised a lot of money and went out of business six months later. There’s a benefit to not having to deal with that stuff.

Another thing: The competition for developer talent is really tough in the Valley, It’s remarkable how much attention you have to devote to making sure you have the most appealing work environment. It’s distracting always to have to worry that if my company doesn’t have the best burritos all my developers are going to leave.

In the midwest there’s not so much competition. You should think about the work environment somewhat, but you can focus less frequently on the quality of the burritos.

On management and leading

Twitter had 50 employees when Costolo joined. It now has 2,000. Not surprisingly, Costolo spends a lot of his time recruiting, hiring and trying to maintain a coherent company culture.

I try to spend a lot of time with people outside my direct reports. The view from the top is totally distorted. If you only spend time with your directs, you have no perspective on what's really going on.

For example: One time an employee came to me and asked whether employees should be having one-on-ones with managers or not. His manager where he used to work in the company had one-on-ones every week; the manager in his current assignment didn’t believe in them.

That’s when I realized we had no consistent management style at Twitter. People just carried over what they had learned the last place they worked. They’d just think, “This is how we did it at Google, or at eBay.”

So I created a management course, and I teach it myself because I want my managers to realize how important it is to me that they manage correctly.

One thing I try to impress on all managers is that they make sure everyone on their team understands what they understand. When that happens, office politics kind of drift away. You don’t have people saying, “What are those guys doing over there in that group? They goof off and don’t work the same hours we do." You don’t have people saying that kind of divisive thing.

I also try to set an example by telling the staff when I screw up. That is super-important because it empowers everyone to say to me or to their manager, “I screwed up. What should I do?” I want everyone on my team doing that and not covering up mistakes and not getting help they need.

A lot of young managers think they have to be omniscient. They think, “I’m the manager, I’m supposed to know that.” I tell them, “It’s not your job to be omniscient. It’s not your job to make all the decisions. It's your job to make sure the right decisions get made.”

Remember, as a manager, you’re totally transparent. If you’re making decisions about things you know nothing about, your team will see that and they will realize you’re going to make their life miserable. You need your team’s trust and you build that trust by being honest.

On Twitter’s role in change--and culture

One of the things that amazes me about Twitter is the way it utterly eradicates artificial barriers to communication. Things like status, geopolitics and so on keep people from talking to one another. Those go away in Twitter.

You see exchanges that would never happen anywhere else. You’ll see a woman in Canada direct a question to Paul Kagami, prime minister of Rwanda and get an answer. I remember seeing a rapper bragging that making the first million is the hardest. Within seconds T. Boone Pickens tweeted back that the first billion is a lot harder.

But my favorite Tweet started with Sara Sliverman. She was saying that if being around your family annoys you--this must have been during the holidays--just pretend you're in a Woody Allen movie. Mia Farrow tweeted back. "I tried that, and it didn't work." I followed Mia Farrow immediately.

Another reason to spend an evening with Humphrey Bogart or Peter O'Toole -- you just may become a better leader as a result.

Lawrence of Arabia (1962): Make them believe in the win-win

The film opens with T.E. Lawrence (Peter O’Toole) in a basement drawing maps for the British Army. It’s not a glamorous position, but Lawrence manages to show his superior officers he has a keen understanding of the Middle East. Reluctantly, they send him into the desert to conduct intelligence work, and he eventually camps with a Bedouin tribe that is desperate to protect its land from the Turks.

Lawrence begins as the ultimate outsider, but in a short period of time he becomes a primary leader. How did he do this?

He understands the needs and nuances of the Bedouin and politically engages their leader, Prince Faisal (Alec Guinness). More important, he understands that to be trusted he has to present himself not as an internal expert, but as servant-leader acting on the Arabs’ behalf. Lawrence’s success is grounded in his ability to persuade the Bedouin that siding with the British is a win for both parties.

There is a footnote here in that in the short-term, Lawrence is able to accomplish his goals. Those who know British history know that this was not ultimately a win-win, although Lawrence was clever enough to cast it that way. Even though he shows a servant attitude, he understands that he has to get the Bedouins on his side.

The Caine Mutiny (1954): Keep them in your corner

But when Nicholson inspects the enlisted men’s efforts at building a bridge he is horrified at their spotty work, improper organization, and bad planning. He assumes command of the project and begins to design a better bridge.

When asked why he is helping the enemy, Nicholson firmly states that he is doing nothing of the sort. He argues that he is boosting morale, disciplining the prisoners, and upholding the British Army’s reputation by doing the best job possible.

The completed bridge is eventually attacked by allied forces and strangely Nicholson fights to protect the bridge--his bridge. In the ensuing battle he finally realizes the error of his behavior and asks himself, “What have I done?” A shell blast knocks him to the ground and he slowly gets up. But the pain is too much for him. He stumbles and falls on the detonator, demolishing the bridge he worked so hard to create.

Nicholson knew how to lead a team, but he forgot the overriding, larger goal of the war. He only realized his error when it was far too late. Leadership can sometimes be an intoxicating, distracting force that blurs common sense and straight thinking. The Bridge Over the River Kwai reminds all leaders that they must never forget their bigger mission.

The Bridge Over the River Kwai (1957): Don’t forget your mission

Lieutenant Commander Phillip Queeg (Humphrey Bogart) is put in charge of the Caine--a run-of-the-mill U.S. naval ship. The first day on the job, Queeg makes it known that he runs a tight ship that follows all naval regulations. He doesn’t like shirttails hanging out and he doesn’t like protocol overlooked. The men on the ship are in a constant state of lamentation. Certainly, their old captain, who endeared himself to the men, wasn’t as tough and certainly not as demanding.

In a fierce storm, Queeg orders the ship to follow its intended route instead of turning around to avoid dangerous weather. The crew mutinies. When they make it to shore, the Navy investigates the mutiny and holds a trial. Queeg is found incompetent because of his neurotic attention to detail, but we have to ask--was he really? Queeg was an accomplished navy man with a stellar record. Perhaps his subordinates were just lazy and lacked the courage to follow their leader into the storm. The Caine Mutiny asks tough questions about leadership and what leaders can and cannot do. Queeg ultimately failed not because he didn’t have the necessary expertise and knowledge, but because he didn’t bother trying to win over his crew pragmatically.

The Guns of Navarone (1961): Make sure they work together

Granted, this isn’t your average leadership challenge. But to many, the group dynamics will be familiar. Each man in the team has a specific skill set that’s important to the mission, but each has a problem trusting the other.

The film examines the interactions between the men as they set out. Mallory keeps the team together, but does it without heroics or a lectern. As the mission nearly unravels, it becomes clear to each team member on how dependent they are on each other. Mallory takes a group of individual experts and methodically creates a team capable of working together.

Twelve Angry Men (1957): Give them time to work out their differences

Juror No. 8 (Henry Fonda) is the only jury member who believes that a Puerto Rican teenager living in New York City may not have killed his father.

The other 11 jurors are irritated with Juror No. 8. Not only do they feel the case is cut-and-dried, but they have social plans and don’t want to deliberate late into the evening.

However, Juror No. 8 insists on reviewing the dubious facts, and argues that he can’t watch a teenager hang on such weak evidence.

Again, his fellow jurors mutter disapproval and restate their desire to go home. Juror No. 8 demands another vote--this time a secret one. The ballots are counted and to everyone’s surprise another “not guilty”’ vote crops up. Juror No. 8 sees a light at end of the tunnel.

Twelve Angry Men puts team dynamics under a microscope and examines how groupthink, personal motives, and prejudices can inhibit a team’s performance. However, Juror No. 8 exhibits how true, fact-by-fact, pragmatic discussion can convince people to think in different ways. Moreover, Juror No. 8 takes things slowly and gives times for differences to be ironed out. He doesn’t streamroll everyone with his views, but rather talks them to his side.

Going global isn't only for big players. How a far-flung workforce can benefit small businesses.

When you think of multinational corporations, certain names probably pop into your head. But, there is a completely different kind of global company: the micro-multinational. Daniel Barnett founded and runs one of these companies, WorkEtc, an all-in-one business management platform.

WorkEtc's company headquarters sit in Australia, with development teams in China and Romania, a chief technical officer in Malaysia, local support in the UK, U.S. and New Zealand and a dedicated sales team in the U.S. "We operate in a 24/7 global marketplace," Barnett said, "and as a start-up the only way of staying open all hours and keeping lean is with remote teams."

Managing people on multiple continents has some difficulties, but it can be done. The first thing you have to do when hiring people who may never set foot on company property is hire way above the skill level you think you need, according to Barnett. "There is the temptation when hiring people in cheaper overseas market to hire at the same skill level or experience that you would locally. You immediately think, awesome, I can get this same quality person for half the going rate downtown! It never works out like that. You inevitably lose some productivity to time zone differences and often non-native English speakers require additional instruction. But hire above the level you were looking for and you can easily recover this and then some."

Hiring can be difficult as well. WorkEtc often recruits people who have been end users of the software, which caters to business owners, so most of the employees know what it's like to run their own business and work independently. Even so, no one is hired straight out. Barnett gives a three month trial period to see if the person really can handle being part of a global team while working completely independently. Barnett says the three months really aren't necessary: He can tell if it will work out within the first two weeks.

And what are the keys to success? It's not technical skill, as everyone who begins the three month trial has that. It's the ability to become part of the team--not an easy task when you never meet your team members. WorkEtc uses a "Daily Report" to make sure everyone is on the same page and as a tool to get to know each other. At the end of each employee's workday, everyone--including Barnett--must fill out the daily report. This isn't some sort of complicated, technical report. It's just four items:

• What I worked on today
• What are the challenges I have
• How I overcame those challenges
• What I'm working on tomorrow

While the main focus of the answers are business related, employees are encouraged to mention other areas of their lives as well. This helps build relationships among team members who may never meet. And while this report seems simple, several people in the trial periods have been unable or unwilling to write up daily document; they don't stay on after the trial period.

When a trial period is unsuccessful it can be painful on all sides, Barnett says: "One person, a year ago, was late to Skype meetings, and missed one or two daily reports. I had to give them the hard news. The person was not entirely shocked, they knew they hadn't met expectations.

These kind of things become very, very important in a remote environment. I mean it's not like you can just lean over the cubicle wall and pull someone into a meeting if they're late or have forgotten."

Another thing that you need to think about with a multinational workforce is that everyone needs good communication skills--including telephone skills. Often people who are brilliant at complex technical work are uncomfortable getting on a live call and talking. Email and IM are great tools, but actually talking with your team can solve problems in half the time. So, it's a skill Barnett screens for.

What are the advantages of having a micro-multinational over a regular small business? Well, for one, the employees love their independence and telecommuting. One employee in Los Angeles was able to give up a daily 60 minute commute each way. Another employee in the UK has a disability that makes regular trips to an office difficult. A third, who is Australian, was able to keep his job even after he relocated to Malaysia to be near his wife's family. Definitely a benefit for the employees.

Not everyone is suited to this type of job, but for those who are, the micro-multinational can be a successful small business model.

Wharton management professor Matthew Bidwell talks with Inc. editor-at-large Leigh Buchanan about the nuances of measuring employee productivity.

A recent newsletter from the University of Pennsylvania's Wharton School addressed the lack of clarity over what constitutes productivity in an office. Among other commentators, management professor Matthew Bidwell weighed in on the problems with using "crude numeric tools" to achieve desirable behavior.

Inc. Editor-at-Large Leigh Buchanan spoke with Bidwell about the trouble with traditional productivity metrics.

Organizations place so much emphasis on people developing their intellectual capital. But there aren't a lot of tangible outputs for that. Does that discourage people's willingness to spend time on it?

Learning, developing intellectual capital, these things are very hard to measure. So are other desirable behaviors, such as helping people. And of course the more you measure those things that can be measured, the more attention people pay to that, and not to the things that are more difficult. Setting clear goals for people motivates and engages them. If you use metrics for those goals then the other things tend to get ignored.

So helping colleagues and other what you call "citizenship behaviors"--recruiting, mentoring etc.--are sacrificed to productivity metrics?

It's about tradeoffs. People see the costs of citizenship behaviors much more clearly because they see them as coming at the expense of exceeding their targets or whatever is being measured. So you have to ask yourself, as the manager, what is more important? In a lot of organizations you may feel helping is nice but not so critical to our success. In those cases, yes, I'm prepared to sacrifice some of those citizenship behaviors. In other environments you might make a very different judgment.

How do you encourage citizenship behaviors?

You can let it be known that [employees] will be rewarded. A lot of organizations have 360-degree reviews where they try and incorporate feedback from peers to get a sense of who is helping others. And there are some cultures where the expectation is if someone needs your help then you will give it. In those cultures people understand that there are sanctions for not helping. So you can never measure it as well as more tangible things. But you can certainly get a sense of it.

What you can't have are wishy-washy metrics of "people say this guy is very helpful," and then the hard dollars they brought in. It becomes very hard for organizations to resist the temptation to pay more attention to the hard dollars.

Do employees generally dislike productivity metrics?

I guess it depends, in part on what you are using them for. We know that people like feedback. Not necessarily performance evaluations--they hate those. But they like to know how they are doing. Productivity metrics help people say, "I had a good day today. Yesterday, I had a less good day."

That's especially true if rewards are tied directly to the metrics. Very high-performing salespeople who get high commissions are very, very focused on their productivity metrics. There's a lovely video we sometimes show in class of Nordstrom's highest-performing salesman. In it, he says it's all about I want to know exactly how much money I'm making each day, so I know what my paycheck is going to look like. In those kinds of jobs, productivity metrics actually help people get excited. In other jobs they might be a distraction.

I guess if the company doesn't have metrics then managers will just use their judgment about how an employee is doing, which can be problematic.

Most managers try to anchor their judgments to something. If they can't measure your outputs, they may measure your inputs, like whether you're staying late at work. We tend not to like those cultures, where what is important is that you are in the office, not what you actually achieve.

As a manager, talking about the quality of someone's work is hard. We can sit here all day and argue about whether or not something is high quality. Measures have objectivity about them. They make it much easier to justify a decision.

Are there some professions where metrics don't work--very creative ones, for example?

We think of academia as being this great haven of creativity. But it's actually quite metric-oriented. People want to know how many papers you have published, how frequently they have been cited, what are the student evaluation scores you have received. Scriptwriters might be evaluated on how much money their movie made or the ratings on their TV shows.

How do you help employees weigh productivity when deciding how to allocate their time? You probably don't want to say," quantity matters more than quality so don't worry whether it's any good."

Nobody is going to say that. People quickly get the message based on who gets the bonus, who gets promoted, who gets fired. It's much less a stated policy and much more what organizations do in practice.

Is there a correlation between individual productivity and leadership?

A lot of behaviors that correlate with productivity are going to be important in a leader as well. You want somebody who has the ability to focus on the task. You want someone with a goal orientation. Still, there are certainly people who are very good at getting things done but not so good at working through other people.

Procter & Gamble's former CEO offers simple but useful tips for better discussions at work and elsewhere.

A great deal of our lives is spent talking to people. The proportion may go up for salespeople and down for introverts, but everyone could stand to have more productive conversations.

Maybe you had good role models or instincts, but if you feel your conversational skills are lacking, a new book by A.G. Lafley, Procter & Gamble’s former CEO, offers good advice on how to make discussions less shallow.

In the book, Playing to Win: How Strategy Really Works, Lafley reveals his principles for fruitful conversation.

"People’s default mode of communication tends to be advocacy--argumentation in favor or their own conclusions and theories, statements about the truth of their own point of view.

"The stance we tried to instill at P& G was a reasonably straightforward but traditionally underused one: 'I have a view worth hearing, but I may be missing something.' It sounds simple, but this stance has a dramatic effect on group behavior if everyone in the room holds it. One, they advocate their view as a possibility, not as the single right answer. Two, they listen carefully and ask questions about alternative views."

This approach has obvious benefits--it's far more likely to promote problem solving than meetings where each participant argues their point of view.

Improving the quality of discussions should lead to better decisions and better meetings, but these skills could also strengthen your personal relationships. So how do you employ "assertive inquiry?" Here are three steps:

Advocate your own position, then invite responses. Try saying, “This is how I see the situation and why. How do you see it?”

Paraphrase the other person’s view and ask for their take. “It sounds to me like your argument is this. Is that what you're saying?”

Explain a gap in understanding. “It sounds like you think this acquisition is a bad idea. Could you tell me how you came to that conclusion?”

Advocating for your ideas may help you get your way, but blending assertiveness and inquiry is guaranteed to get people on your side. The reason: "Inquiry leads the other person to genuinely reflect and hear your advocacy rather than ignoring it and making their own advocacy in response," says Lafley.

How have you improved conversations?

Handle founder Shawn Carolan explains why pursuing email perfection is all but pointless.

For many of us, the constant ping of inbox alerts and the 24-hour nature of today's news cycle serve as a symbol for the stress of being constantly ON. If you could just get your inbox under control, then you could get off the tech treadmill and be fully in the moment, right?

It's an understandable goal, writes Handle co-founder Shawn Carolan on GigaOM, but it's never going to happen, at least not long term.

How does he know? Carolan has chased the inbox zero mirage and learned what's on the other side. He writes:

Over the past year-and-a-half while developing Handle, our entire company was in a race to zero. Inbox zero, to be precise. We set out to create a product that would allow us to leave work with zero emails in our inboxes and, so the thinking went, would lead to lives of zero stress (or at least until the next morning). We wanted to go home for dinner with friends and families and be fully present, in both body and mind. Wouldn’t that be amazing, transformative - invaluable, even?

Yes. So would alchemy, but neither exist. Inbox Zero, we discovered, is a mirage.

Like a fad diet, getting your inbox to zero only yields short-term results. In a burst of extreme discipline you can scrub your email account to sparkling, pristine condition. But just like that extreme diet, the results will soon fade away, leaving you more anxious and discouraged than before. So what's the inbox equivalent of sustainable, healthy living?

Setting priorities according to your individual values and getting everything floating around in your brain down on paper (or pixels). Psychologists have determined the real value in to-do lists is quieting something called the Zeigernik effect, which causes incomplete tasks to nag us. Simply writing down a detailed plan will kill the buzz and clear the mind.

Of course, as Carolan notes, this type of organization is essential but not sufficient as priorities are also about values. "Each moment is a value judgment, and only yours to make," he writes. Establishing what constitutes an unmissable "must-do" versus a message you can leave well alone involves values.

Is making a speaking engagement more important than your child's school play? Is mentoring a must, or is writing more important? These decisions, taken together, will define your life values, and nothing will make them easier.

With your values nailed down and must-dos planned out, pursuing inbox zero will be less important. If you want to feel better, much like getting in shape, it needs to come from a change in behavior and understanding your values--not bursts of obsessive guilt.

Have you had success achieving inbox zero?

Having trouble generating synergy with your paradigm shift? The buzz-phrases need to go. Here are nine we'd like to buzz-saw.

Over the past 12 years, I've covered countless tech companies, from mobile app developers to companies that help you find a place to work in a big city. After sitting through hundreds (or is it thousands?) of meetings and recording countless interviews over the phone, I've taken note of the catch-phrases people say again and again. And again. Until the point at which they no longer mean anything. Now they're just annoying.

Here are the nine terms I'd like to kill.

1. Pivot
With apologies to Eric Ries and the Lean Start-up crew, the word pivot has lost all meaning. Originally, it meant analyzes your customer base and revenue and making a fairly dramatic change. A design company, say, might shift to become an app developer. But now start-ups characterize nearly any change as a pivot. (I can't help but think of the basketball "pivot" which is more of a side-step move.) It's okay to analyze customers and revenue and make changes. But calling them pivots doesn't make you sound any smarter.

2. Curate
Here's another term I liked when people first started using it, circa Pinterest's launch in 2010. But think about it: We've been talking about curating the Web now for three years. That's like 50 years in the analog world. There's now "media curation" and "SEO curation" and "start-up curation"--we're curating our use of the word curate.

3. Eating your own dog food
Other than the obvious gross factor, this phrase refers to how a company should use it's own product. If you make an accounting app, you better be using it for your own accounting. But what was once a somewhat helpful metaphor has become tired and, frankly, completely obvious. Of course you should be testing your own product. No need to "dogfood it." (Don't even get me started on the grammatical offense committed in that previous sentence.)

4. Disruptive technology
Even when a small airline tracking start-up like RouteHappy.com comes along, it bears some similarities and owes some of its inspiration to a site like Kayak. No slight to either service. Few entrepreneurs come up with something the world has never heard of. They come up with incremental innovations that improve--rather than disrupt--what already exists.

5. Lipstick on a pig
In design circles, if you say this phrase in a meeting you will be taken out back and ridiculed for hours. It's a cliche. You're talking about an analytics database that has a trendy new look but woefully broken code? Sorry, it's still a cliche.

6. Barrier to entry
In the Silicon Valley sub-culture, when someone talks about your start-up and drops the phrase "barrier to entry" it's basically the equivalent of saying "your idea sucks." What it really means is that your company is not going to get funding, or customers hate it, or that there's a major technical problem. Instead of using the phrase, just be up front: This isn't a barrier to entry; it's a failure.

7. Finding synergy
It's hard to say this one with a straight face anymore. It reminds me of the old Fake Steve Jobs blog written by Daniel Lyons, who is now an editor at Forbes and writes for Newsweek. He used to put a bunch of goofy business phrases together like "let's find the synergy in our paradigm shift" in a way that always made me laugh. What's sad is that real people actually talk this way.

8. Best of breed
Doesn't every company view its product as best of breed? Who sets out to be the middle of the pack or the worst?

9. Social media
This one could get me in trouble, because I receive a handful of pitches per day from "social media" companies and many experts who make a living by analyzing social media. But when your car and even your baby's diaper can tweet for you, hasn't pretty much everything become "social"?

EBITDA multiples for your industry don't tell you much about what your particular company might be worth. Here's how to get a better idea -- and a better deal.

The other day, an entrepreneur friend called me in frustration. He’d been trying to figure out what his company might be worth, and the best information he could find was that multiples in his industry were currently between four and six times EBITDA.” (That’s earnings before interest, taxes, depreciation and amortization.) His point, which I thought was very fair, is that this resulted in a valuation range that was so wide as to be almost useless.

Despite the merger and acquisition industry’s obsession with EBITDA multiples, those numbers are really nothing more than a way of describing how much the marketplace thinks certain companies in certain industries are worth at a particular moment in time. They’re an “output” number that measures what companies are being valued at, rather than an “input” that would be helpful in determining the value of your own particular company.

“Then what,” asked my frustrated friend, “is valuation actually based on?”

I told him that you have to get back to basics: earnings, the quality of those earnings, and creating competition between buyers.

Earnings

At the most basic level, the more money your company makes, the more it’s worth. Therefore, the best way to get more for your company is to grow the company so it earns more. This increases your book value, but larger companies also sell for higher multiples than smaller companies because their higher growth opens up a larger and more sophisticated market of potential buyers.

Quality of Earnings

Although mergers and acquisitions end up being presented as strategic moves in press releases and articles, at the most basic level any buyer is looking for a return on their investment. That means they want to buy companies with high-growth, stable earnings. The more stable and predictable your earnings are, the more you’re worth. This seems like a no-brainer, but company management often gets distracted by chasing after one new and exciting “next best thing” after another, and forgets all about the attractiveness of a smooth upwards trajectory.

You also need to dig out the risk factors in the way your company is currently operating. If 80% of your business is tied up in one customer, that’s not good. If your product is about to be made obsolete by new technology, that’s not good. Other risk factors include potential government regulation, gaps in your supply chain, how large your potential customer base is--the list goes on.

Not all profits are created equal. This is why basing company valuations on EBITDA multiples or a purely financial analysis can be so misleading.

Competition

There will only be a certain number of entities that have both the ability to buy your company and the desire to do so. When it comes time to sell, don’t just go to the guy down the road - reach out to all of them. Putting those buyers in competition increases the amount they’re willing to pay, as the opportunity for gain they initially saw in front of them turns to a fear of loss that someone else might end up with your company’s assets. Remember your Economics 101 class: the only true way to determine a product’s worth is to see what a willing buyer will pay in the free market.

Savvy entrepreneurs use these three pillars to make their business more valuable long before it’s time to sell. Bigger is better, so growth is important. Predictable, steady growth is the most attractive, and “swinging for the fence,” or one-time unpredictable events, are not very valuable. Finally, when it does come time to sell, make sure that you market the company to a large number of qualified buyers, so that the competition in the marketplace will drive your company’s value to a peak.

Smartphones may be smart, but the way we use them is still a little dumb. It's time for a mobile code of ethics.

As smartphones continue their unimpeded march into the pockets of millions of worker bees, new modes and patterns of user behavior--good and bad--are evolving constantly. (Take ringtone download trends as a quick example.) BYOD or no BYOD, what people do with those phones all day (and night) can cross all kinds of lines with compliance, laws and regulations, company policies, and most frequently (and alarmingly), basic common sense. Those smartphones might be smart, but the user behavior can get pretty dumb--not to mention costly and risky for employers.

So how does a company establish a few iron-clad rules of mobile behavior? First, recognize that your mobile policy (you do have one, right?), and the ethical guidelines that follow, need to mirror the practices and policies that govern your company generally. Second, commit to educating and communicating with your employees about what defines a good mobile code of ethics.

Here are a few principles to start with:

1. First and Foremost: Do Your Job

Zero tolerance for texting, personal calls, and cameras made sense in the early days of mobility, but no more. Mobile infuses our personal and professional lives too much for outright bans to be practical. But the importance of productivity means that companies should not be laissez-faire about mobile use at the office, either. Instead, find a middle ground: Make sure your employees separate personal from work-related mobile communications and that they understand that, worked-related or not, these devices should never distract them from communicating in the workplace.

2. Protect Confidential Info

The increased presence and usefulness of mobile devices for work purposes means that we can take our jobs with us almost everywhere. It also means that we can possess sensitive and confidential emails, documents, and conversations that, if lost or mishandled, can land companies in a heap of trouble. Set up systems that allow your employees to protect the information on their phones (from security apps to encrypted documents), and be clear about the importance of doing so.

3. Show a Little R-E-S-P-E-C-T

If your company purchases mobile devices for employees (or reimburses them for using their own) make it clear to your workers that that they have to hold up their end of the bargain, too. Company devices need to be treated with respect, and while the occasional loss, theft, or shattered screen is inevitable, enlist all of your employees in the proper care of company-related equipment. Put it to them in layman's terms: "If you just bought an iPhone 5, would you want to leave it at the bar after Friday happy hour?"

4. Know--and Follow--the Law

Mobile devices in the workplace mean that your company can find itself liable for the bad, or even just careless, behavior of your employees. Depending on the time, place, and involved parties, sexting can constitute sexual harassment. Employees texting while driving a company vehicle will become your problem too. Read up on the legal pitfalls of mobile devices in the workplace, and make sure your employees understand them too.

5. Respect Others' Privacy

When it comes to smartphones, it's important to maintain a level of trust between yourself and your employees. No, they shouldn't have free rein to do as they please on a company phone. But, they should also feel comfortable calling home to check in on the kids, browse Facebook during lunch, or respond to a text between meetings. Ideally, all personal interactions will happen outside of work, but make it known that if they respect your mobile policies and the company's time, you'll respect their need for privacy.

6. Get a Refresher on Common Courtesy

Mom said it best: Play nice. Mobility has changed how we work and live, but common courtesy--and some common sense--go a long way. You wouldn't like it if a job candidate checked his phone during an interview, would you? Show him the same respect. Oh, and you don't have license to text an employee after hours--unless it's critical for work and she's given you explicit permission to contact her that way.

While "Don't be stupid" is no way to frame an ethical policy, emphasizing common sense and good behavior is fundamental to any effective mobile code of ethics.

Customers lie because they secretly hope that you'll sell them something.

Customers are human, which means that they sometimes bend the truth. Here are the most common lies that customers tell and how to use them to your sales advantage:

No matter how much a customer claims to "love" their current vendor, they're always willing to consider a better alternative. Your job is to make it clear why you're the better alternative.

Unless the customer is actually bankrupt, what this really means is "other projects have a higher priority." Your job is to explain why your offering is more important than what's already been budgeted for.

This is usually wishful thinking. Even in "Mom and Pop" operations, "Mom" can veto decisions that "Pop" makes. In big companies, decisions are always by consensus. Your job is to discover (and sell to) all the stakeholders.

This is how customers say "I'm busy so get lost" without being rude. Your best bet here is to agree to send the information but also ask something like: "Just out of curiosity, what are your priorities in this area." Keep the conversation going.

Well, probably not all THAT sorry because clearly something more important came up. Fortunately, social convention now puts the customer under an obligation to do something to make up for wasting your time.

Sorry, but in every sales situation that goes out for bidding, there's somebody who's got the inside track (usually they wrote the RFP). Your job is to either be that somebody or earn the write to tweak the RFP.

The customer is well aware that there's a perfectly good reason (like better service or more features) why your offering costs more. If not, then the problem lies in how you're presenting and positioning your offering.

These last minute demands are how customers test to see that they've negotiated the best deal. If you fold and give the discount, they'll know you were about to cheat them. If you stand your ground, they'll sigh in relief and pull out the checkbook.

Like this post? If so, sign up for the free Sales Source newsletter.

For employers with low-wage workers, a way around higher costs

Thanks to a $10 billion jump, Bill Gates surpassed Carlos Slim.

As Microsoft shares hit a five year high Thursday, Bill Gates reclaimed the title of the world's richest man, according to Bloomberg News.

Bloomberg's Billionaire Index pinpoints Gates' value around a cool $72.7 billion. He surpassed Carlos Slim who previously held the title with $550 million. According to Bloomberg, "Slim’s fortune has dropped more than $2 billion this year as Mexico’s Congress passed a bill to quash the market dominance of the 73-year-old billionaire’s America Movil SAB."

Gates, Slim, and Warren Buffett, who placed third on Bloomberg's list, have been playing musical chairs with the title for the past five years.

The creator of tech giant Microsoft and founder of the Bill and Melinda Gates Foundation is notoriously shrewd when it comes to money. In a recent Reddit Ask Me Anything, he said, “I definitely think leaving kids massive amounts of money is not a favor to them," and cited Buffet as an inspiration for how to set up an inheritance.

Gates, who is 57, founded Microsoft around the mid-1970s after he decided to drop out of Harvard. He reportedly talked the decision over with his parents, who were supportive of his desire to start a company.

This isn't the first time Gates has been named the world's richest man, or the second, according to Forbes. Pegging his worth around $40 billion, the magazine named Gates the world's richest man in 2009. Prior to that, he topped Forbes' list every year from 1995 to 2007.

Is the costly--and long--patent approval process worth it? Small businesses don't seem to think so.

Just two months after several provisions of the America Invents Act (AIA) went into effect, the House Committee on Small Business met to evaluate how it's been doing.

As fewer small businesses seek patents for services, it's beginning to look like the act might have offered too little, too late.

Some explanations for this trend include the backlog of applications awaiting approval, the cost of securing a patent before and after approval, and the increasing number of patent trolls and ensuing legal battles. To wit, the percentage of small business-secured patents has dropped from 30 percent in 2000 to 20 percent in 2013.

The news is troubling, said committee chairman Representative Sam Graves. "In the patent arena, small firms play a critical role in developing innovation, producing 16 more patents per employee than big businesses. Moreover, obtaining a patent is equally critical for small businesses and their ability to attract startup capital, and grow their business."

Patents also give small businesses a "powerful foothold" when they "may not yet be able to fully realize the market potential of their product or service," said Dennis Crouch, a law professor at the University of Missouri.

However, those patents come at a price.

It can take more than three years for a patent application to work its way through the system, and while businesses can bypass it with a $4,000 fee, small businesses must pony up $2,000--not exactly small change when you're just starting out.

The other problem is, patents expire, which means paying more fees to keep them up-to-date. Renewal fees tend to be relatively inexpensive, but many small business are ditching them anyway.

The past decade has also seen a rise in patent licensing companies, also known as patent trolls, which exist for the sole purpose of gathering patents and licensing them. While they've revitalized the marketplace and provided an incentive to actually make patented products, they've also led to an increase in patent infringement lawsuits.

Because they're so expensive, "many cases settle in an unsatisfying way with the accused infringer paying a settlement fee simply in order to avoid the high cost of fully defending the lawsuit," Crouch said.

What do you think--should small businesses still secure patents?

If you want to reward your people, time off will work better than more money. But you can't stop there.

Money can't buy love or, apparently, better job performance.

A WashingtonPost.com article reported yesterday on a growing body of research about the efficacy of financial rewards. The authors--Elizabeth Dunn, a professor at the University of British Columbia, and Michael Norton, a professor at Harvard Business School--described the kinds of behavioral finance experiments that have become de rigueur in management writing. In the predictably counter-intuitive results, kids paid to improve their grades exhibited decreased motivation. People paid more to do well in an electronic memory game performed worse than those who were paid less.

Given the wan allure of money, the authors suggested rewarding workers instead with the gift of time--chiefly in the form of flex-time and sabbaticals. They cited an experiment at Boston Consulting Group in which consultants who gave up work-related emails and phone calls one night a week reported improved satisfaction with their jobs.

I agree that motivating employees with time rather than money is a sensible idea--but with one caveat. You can lavish all the sabbaticals and vacations and half days on people that you want. But if you don't reduce their workloads commensurately you're not doing them any favors. Rewarding someone with a long weekend means nothing when they still have six deliverables on Tuesday. The boss must redistribute the work, pick up some herself, extend the favored employee's deadlines, or just accept that something won't get done, and that the company must soldier on without it.

If the person taking time off is in a leadership position, I'd recommend the redistribution option. Small companies have a tough time developing leaders because they don't have a lot of stretch positions. The marketing manager's six-week cycling tour of Europe is the perfect opportunity for one or more underlings to take an extended turn in her shoes.

So by all means, give the gift of time. Just be sure it's genuinely time off.

Serial entrepreneur and author Steve Blank gave the commencement speech at the University of Minnesota. His advice is relevant for anyone starting up.

Editor's note: This speech was given at the University of Minnesota and then appeared on steveblank.com.

I am honored to be with you as we gather to celebrate your graduation.

This school has a distinguished roster of graduates... Earl Bakken, the founder of Medtronic, was an Electrical Engineering grad; and Bob Gore of Gortex and your current president are both alums of your Chemical Engineering program.

In fact, I feel very connected to another one your grads. I’m sure you’ve heard of Seymour Cray; he built a supercomputer company in Chippewa Falls that made the fastest computers in the world. These were very expensive supercomputers. They cost tens of millions of dollars and filled two tractor-trailers worth of space.

Back in Silicon Valley, I co-founded a company that built desktop workstations powerful enough to compete against Cray. We bid against them in a sale to the Pittsburgh Supercomputer Center... and lost. I never forgot that loss because instead of buying hundreds of our small computers they spent $35 million on that Cray. My startup never recovered and soon after went out of business.

Fast-forward 15 years. Now retired, I noticed that the Pittsburg Supercomputer Center had put their Cray for sale on Ebay. Yep--the $35 million machine was now for sale for $35,000 dollars.

I bought that Cray... honest... you can Google “Cray on eBay” and there I am. I had it shipped to my ranch and kept it in the barn next to the cows and manure.

It was closure.

But the story about Cray is also a story about success and failure. If I can keep you awake, I’m going to tell you why--while you may have thought today was the end of your education--it’s really only the beginning. And while you might be moaning about that thought, pay attention because what I’m about to share could make a few of you very, very successful.

First day of your life

For most of you, college was the first day of your own life. The morning you stepped onto campus you were no longer just a child of your parents. College was the first place you could taste the freedom of making your own decisions--and in some of those mornings-after--learn the price of indulgence and the value of moderation.

Here at school you had your first years of taking responsibility for yourself. While it may not be obvious to you yet, your college years were a transition from having your parents make decisions for you to making decisions for yourself. But now you face a new chapter that--if you’re not careful--could result in having companies make decisions for you.

Career Choices

It might turn out that graduating from college and getting a job may be just an illusion of independence. If you’re not careful you’ll simply end up having others tell you what to work on, how to spend your time, when to show up and when to go home. In fact, working in a company could be the adult version of listening to your parents tell you what to do... only the pay is usually a whole lot better than your allowance.

For some of you, that may be exactly what you are looking for. Many of you are going to take what you learned here, get a good job, get married, buy a house, have a family, be a great parent, serve your community and country, hang with friends and live a good life. And that’s great. Minnesota is a wonderful place to hunt, fish, canoe, raise kids, and pursue lots of interests other than just your job.

All of you will ultimately make a choice... a choice about whether you “work to live” or you “live to work.” This should be a conscious choice. Don’t get trapped into the daily routine of showing up and just getting by.

Diverging Interests

While you’re excited about your first “real” job, recognize that your interests and those of your employer are probably not the same. Having your employer tell you what a great job you’re doing and rewarding you for it is not the same as discovering your passion, and figuring out who you are, and what’s rewarding for you.

What I am saying is, “Don’t let a career just happen to you.” And as much you love, respect and honor your parents, don’t live their lives. Your obligations to meet their expectations ended the day you became an adult.

At the end of the day, you can decide whether you want to be an employee with a great attendance record, getting promoted to ever better titles and working on interesting projects--or whether you want to attempt to do something spectacular--this be or do should be a question you never stop asking yourself--for the next 20 years, and beyond. Be? or Do?

Let me share with you the day I faced the Be or Do question.

Big Company versus Startup

Out of the military, my first job in Silicon Valley was with one of the most exciting companies you never heard of. By the time I joined it was a decade old, and no longer a startup. Our customers were the CIA, NSA, and National Reconnaissance Office. Our CEO, Bill Perry eventually became the Secretary of Defense.

In the 1970's and '80's the U.S. military realized that our advantage over the Soviet Union was in silicon, software and systems. These technologies allowed the U.S. to build weapons previously thought impossible or impractical. The technology was amazing, and somehow in my 20’s I found myself in the middle of all of it.

Building these systems required resources way beyond the scope of a single company. A complete system had spacecraft and rockets and the resources of ten's of thousands of people from multiple companies.

If you love technology, these projects are hard to walk away from. It was geek heaven.

While I worked on these incredibly interesting intelligence systems, my friends in startups worked on new things called microprocessors. They’d run around saying, “Hey look, I can program this chip to make this speaker go beep.” I’d roll my eyes, comparing the toy-like microprocessors to what I was working on--which was so advanced you would have thought we acquired it from aliens.

But before long I realized that at my company, I was just a cog in a very big wheel. A small team had already figured out how to solve the problem and ten’s of thousands of us worked to build the solution. Given where I was in the hierarchy, I calculated that the odds of me being in on those decisions didn’t look so hot.

In contrast, my friends at startups were living in their garages fueled with an energy and passion to use their talents to pursue their own ideas, however unexpected or crazy they sounded. “Really, you’re building a computer I can have in my house?”

For me, the light bulb went off when I realized that punching a time clock is not the way to change the world. I chose the path of entrepreneurship and never looked back.

Engineers Run the World

Engineers used to be the people who made other peoples ideas work. Today, they change the world. We live in a time where scientists and engineers are synonymous with continuous innovation. We don’t think twice as our phones shrink, our computers fit in our pockets, our cars run on batteries, and our lives are extended as new medical devices are implanted in our bodies. Scientists and engineers no longer work anonymously in backrooms. Today we celebrate them for improving the quality of peoples’ lives.

George Bernard Shaw once said, “Some men see things as they are and ask why. Others dream things that never were and ask why not.” Engineers like you have the capacity to move the world forward by continually asking “why not?” It’s your special “doing” gene that empowers us to do better.

You invent. You imagine. You see things that others don’t. Where others see blank canvases, you’ll see finished paintings. You hear the music that’s not written, you see the bridges that have yet to be built. You envision the products and companies that don’t exist yet.

Only In America

University of Minnesota Science and Engineering alumni have founded more than 4,000 active companies, employing over ½ million people and generating annual revenues of $90 billion. These alums chose not to take the safe road but instead to push beyond their boundaries and DO.

At some time you might decide that you want to become the master of your own destiny--that you want to take an idea--and start your own company. And all of you sitting here just earned a degree that gives you choices that very few other professions have.

Entrepreneurship is not something foreign--it’s built into the DNA of this country. America was built by those who left the old behind. Not too many generations ago your family packed up what they had, got on boat and came to America. They struck out across the country and ended up here in Minnesota.

And what’s great about the United States... No other country embraces innovation and entrepreneurship quite like we do. You don’t have to stay in one job, and it’s really, really hard to starve to death.

Passion

I predict that 78 percent of all commencement speeches this year will have advice about “pursuing your passion and doing stuff you love.” But they don’t tell you why. Well here’s the secret--if you’re going to spend your career in a company, doing stuff you enjoy will help you keep showing up.

But if you want to do something, something entrepreneurial, just loving what you do is isn’t enough. You’re pursuing ideas you can’t get out of your head. Ideas that you obsess about. That you work on in your spare time.

Because that fearless vision and relentless passion are what it takes to sustain an entrepreneur through the inevitable bad times--the times your co-founder quits, or when no one buys, or the product doesn’t work. The time when everyone you know thinks that what your doing is wrong and a waste of time. The time when people tell you that you ought to get a “real” job.

By the way, every year I remind my students that great grades and successful entrepreneurs have at best a zero correlation--and anecdotal evidence suggests that the correlation may actually be negative. There’s a big difference between being an employee at a great company and having the guts to start one.

You don’t get grades for resiliency, curiosity, agility, resourcefulness, pattern recognition and tenacity.

You just get successful.

Failure

The downside of starting something new is that’s it’s tough, because unlike the movies--you fail a lot. For every Facebook and Google, thousands never make it.

Like Rocket Science Games, which was my biggest failure. 90 days after showing up on the cover of Wired Magazine I knew the game company where I raised 35 million dollars was headed for disaster.

We’d believed our own press, inhaled our own fumes and built lousy games. Customers voted with their wallets and didn’t buy our products. The company went out of business. Given the press we had garnered, it was a very public failure.

We let our customers, our investors, and our employees down. I thought my career and my life were over. But I learned that in Silicon Valley, honest failure is a badge of experience.

All of you will fail at some time in your career... or in love, or in life.

No one ever sets out to fail.

But being afraid to fail means you’ll be afraid to try. Playing it safe will get you nowhere.

As it turned out, rather than run me out of town, the two venture capital firms that had lost $12 million in my failed startup actually asked me to work with them again.

During the next couple years... and much humbler... I raised more money and started another company that we were ultimately able to take public, and those patient investors more than made up for their earlier loss--many times over.

Hypothesis Testing

As scientists and engineers, you know about failure. You know that virtually no experiment works the first time. And in a new company all you have is a series of untested hypotheses. You learned something vital in school--to test your hypotheses by designing experiments, getting accurate data, analyzing the results, and then modifying your initial hypotheses based on those results. This is the scientific method, and surprisingly we found the exact same method works for startups.

Because failure is a part of the startup process. In Silicon Valley, we have a special word for a failed entrepreneur--it’s called experienced. Our country and our entrepreneurial culture is one of second and third chances. It’s what makes us great. You don’t have to change your name or leave town. Entrepreneurs in America know that they get multiple shots at the goal.

Be or Do

Someday several of you in this graduating class will be worth a $100 million dollars. And a few of you might change the way the world works.

I want you to look around you. Go ahead. Take a few seconds and give it a look...

While most of you were looking around wondering who this was going to be, I hope a few of you were feeling sorry for the rest of your classmates, knowing that the most successful person in the audience is going to be you.

These days I write a blog about entrepreneurship. At the end of each post, I conclude with “lessons learned"--a kind of Cliff Notes of my key takeaways. So that’s how I’ll finish up today.

Here are the two lessons that I’d like to pass on to you.

Your science or engineering degree gives you tremendous choices--you, and no one else gets to decide two things:

whether you choose to be or you choose to do

whether you “work to live” or whether you “live to work”

Remember… live your life with no regrets. There’s no undo button.

And congratulations--you’ve earned it!

Thank you very much.

Failure to comply with a clause in its contracts left many small business owners out in the cold, say lawmakers.

An investigation by House lawmakers revealed the U.S. General Services Administration has failed to pay thousands of federal contractors since 2008. The majority of these contractors were small businesses, though 1,334 firms were affected and all companies were collectively shorted more than $3 million, according to details obtained by The Washington Post.

The problem stemmed from a failure to comply with the "guaranteed minimum payment" clause outlined in many of its contracts, said The Post. The GSA offers an online catalog of government services known as the Multiple Awards Schedules (MAS) Program from which other agencies can purchase goods and services, such as paper and construction, often at a discount.

To participate in the program, small businesses must go through "a rigorous and often costly" vetting process, said The Post. They also must keep up their sales and meet a $25,000 combined sales threshold in the first two years. If not, they're owed $2,500 upon being ousted, which is supposed to be paid automatically. Apparently, that wasn't happening.

The Republican-led House Small Business Committee discovered this last year, as Committee Chairman Sam Graves (R-Mo.) was reviewing proposed changes to the structure of the MAS program. Graves noticed the GSA couldn't account for minimum payments issued to those companies because they hadn't been paid. A year later, he received a letter confirming "the problem" from GSA Federal Acquisition Services Commissioner Thomas Sharpe. In all, the agency owes $3,108,888.

“GSA’s case for canceling these contracts in terms of dollars saved did not account for paying some of these firms the $2,500 they would be owed under their contracts,” Graves said on Thursday. “When the committee began questioning why the $2,500 was not included in the calculations, it became clear that GSA was not adhering to its own contracts and had not paid the required termination costs to small businesses for at least five years.”

Fortunately, the small business contractors will be paid the money owed to them in coming months.

It's not about politics. It's about a fundamental breach of trust.

Of the many scandals swirling around Washington right now, one in particular should scare you most as an entrepreneur.

It's the news that the Internal Revenue Service applied blatantly political filters to its review of nonprofit organizations, and targeted conservative groups. Notwithstanding my colleague Gene Marks's recent take on this, I think this a very big deal--and a fundamental breach of the public trust.

I know a bit about the IRS from personal experience. A dozen years ago I left my job as a Washington lawyer to follow a dream. I packed everything I owned in a used Kia Sportage and headed to Hollywood to be a screenwriter. I needed a "day job" while I attended UCLA's extension school and wrote scripts, so I put my law degree to work at the IRS Office of Chief Counsel, starting at the federal building in downtown Los Angeles.

There were some good people among my colleagues there, and I'm still friends with a few of them. However, the overall bureaucratic atmosphere and culture of micromanagement I encountered at the IRS was stifling, even degrading to my way of thinking. It was a horrible professional fit.

In the end, I left both the IRS and Hollywood, served in the U.S. Army JAG Corps, and then launched a different writing career. The life lessons I learned could easily fill another column, but for now I want to focus on one of my takeaways from working at the IRS.

It's this: Society needs bureaucracy.

Let me explain. Think about how much you enjoy dealing with big government bureaucracies--the Department of Motor Vehicles, the different regulatory agencies that affect your business, or of course, the IRS. Now, imagine who it is that actively seeks to work there.

Some of these workers are truly decent people, of course, but a career government bureaucrat is almost the professional polar opposite of an entrepreneur. He or she likely values stability and security and excels at performing routine processes over and over again. Some of the processes might be very complex, but by their nature they are supposed to become routine.

In other words, career government bureaucrats give up the chance at a unique, extraordinary professional career in exchange for something predictable. They buy into a system in which seniority and longevity are at least as important to personnel decisions as proficiency (to say nothing of dynamic new ideas).

Some may love the work, although many of my government colleagues were there mainly to gain experience before going into the private sector. Others appreciated the jobs because they wanted to focus on their families, or their hobbies. (Granted, a few others were career dead-enders of the worst stereotype--bitter, boring drones who put in their 37-1/2 hours a week, complained endlessly, and spent more time on office politics than work.)

Regardless, the rest of us, in exchange for giving these people almost limitless job security and generous pensions, are supposed to get something very specific in return. We're supposed to get predictable, even-handed enforcement of society's rules. The entrepreneurs among us count on that even-handedness in order to be able to make good decisions.

In other words, the line at the DMV might be long, but it's supposed to be equally long for everybody. The forms you have to fill out to comply with government regulations might be a pain in the neck, but they're supposed to be the same even-handed, predictable pain in the neck for you and for your competitors.

And, the process of getting through an IRS examination might be slightly less pleasant than root canal without anesthesia, but it's supposed to be even-handedly, predictably unpleasant for everyone, regardless of their background or political persuasion.

I was never naive enough to think that government processes were totally absent personal feelings, but the idea that IRS workers introduced systemic political bias into their work is abhorrent. I'm honestly not sure whether it's more damaging if the direction to do so came from on high or was the result of the personal biases of a few lower-level bureaucrats.

Regardless, it's a blatant violation of trust, and the episode reminds us that if itxc2xa0can happen at the IRS, it can happen at any government bureaucracy. I hope the other government workers investigating this whole thing keep that in mind as they work.

Then, I hope they figure out exactly who's responsible--and, even handedly and predictably--throw the book at them.

Spoiling your dog has never been so easy. These small companies are making the best of America's love for dogs.

There are 80 million pet dogs in America. And, boy, do their owners love them. At a time when the start-up world is brimming with scaleable ideas, these entrepreneurs are taking products, services, and technologies with proven track-records--and turning their focus away from you the human, and toward your furry friend. Here are five start-ups that took these ideas and are currently trying to make them bark.

What size is Fido? "Small and cute," "just right," or "big and bold?" For $19 a month, this start-up delivers a box of size-appropriate treats and toys to your door. Barkbox, which raised $5 million more in funds from investors such as Lerer Ventures and Polaris Ventures, and plans to rename itself to Bark & Co., donates at least 10 percent of its profits to shelters, rescues, and animal welfare organizations.

This start-up takes dog walking to a whole new level, tracking Spot's every step and, yes, poop. With the help of a handy GPS enable Swifto app, dog walkers update their charges' profiles with information regarding the walk's route, pooping, and social habits. Swifto operates in Manhattan, Brooklyn, and Queens and the app is now operational on all smartphones, including Android devices and iPhones.

This little company makes scannable ID tags that use QR codes. So, if Brutus skidaddles, whoever finds him can use the code to pull up his online profile--and get in touch with his owner. The company's Beta program launched in September, 2010. Two and a half year later, PetHub has launched Netherlands, Germany, and France.

Dog Vacay allows vetted and insured dog lovers to open up their homes and offer to take care of pets, while their owners are out of town. Dog Vacay, which launched in October of 2001, offers rates that start at $15 a night and include 24/7 customer support and daily photo updates.

This crowdfunded start-up makes an app and a pet-feeder, which, combined, allow users them to feed their furry companion when they're far away. Pintofeed works with iOS, iPhone, Android and Windows 8 devices and can automatically create a schedule to dispense food and will monitor pet's intake. The company is currently taking "reservations" for the $149 devices, which have yet to make it fully to market.

What's the deal with Bitcoin? Inc. talked to Charlie Schrem--Bitcoin millionaire and "evangelist"--for the low down.

It's been described as both "an online form of money laundering" and a brilliant "anarchist's brainchild." The developer who goes by the pseudonym Satoshi Nakamoto called Bitcoin simply a peer-to-peer electronic cash system back in 2008.

However you think of it, one thing is clear: Bitcoin is one of the buzziest things going on in tech and finance right now.

So it should come as no surprise that entrepreneurs and investors are gathering Friday for a conference on all things Bitcoin-related, called "The Future of Payment." Charlie Schrem is the co-founder of the payment processor BitInstant, one of the first Bitcoin millionaires, and vice chairman of the Bitcoin Foundation, which is behind the conference.

Inc. talked to Schrem about the controversial currency--and the frenzy it has caused.

Lots of people think Bitcoin is a bubble. What would you say to them?

If you look at the laws of economics, Bitcoin is really following that. People say Bitcoin is a bubble. I respond: well, which one? There were already three, and we've recovered from them already. The real answer is they're not bubbles; they're speculated bubbles that turn into market corrections. For example, you see the price growing steadily, steadily, slowly--then it shoots up over a two week period. Then early adopters who have so much say, "Hey. I think I'm going to cash out now." People start selling and the market corrects itself to its true value.

Currency. Security. Commodity. Bitcoin has been described as all three. How should it be regulated--if at all?

Bitcoin is two things. There's a capital "B" and a lowercase "b." If someone is talking about Bitcoin, they are either talking about one or the other--not really both. Bitcoin is, on the one side, the world's largest decentralized global payment infrastructure. The ability to send data or money or a unit of value from one person to another regardless of where they are, that can't be stopped or controlled any government, is a feat. It's something that has never existed anywhere in the world.

At the same time, on the other side, bitcoin is also that unit of value that is being transfered. If you look at the human body, you have blood that carries nutrients and oxygen all over the body--and they're carried all throughout the body through the veins. You look at money as the blood and you look at companies like PayPal, MoneyGram, or banks as the veins that connect the blood throughout the whole body, right? Bitcoin is both. It's both blood and vein.

Bitcoin transactions are anonymous, which as been cited as both a strength and a weakness of the currency. Where do you weigh in?

It's not anonymous. That's actually a big common misconception. It's psuedo-anonymous. Private is a better word to use. Every Bitcoin transaction is traceable. You have a public ledger that anyone can view about every Bitcoin transaction that's ever happened. And that's it. As long as the companies that act as intermediaries between the old world--like dollars--and the new world--like Bitcoin--know their customers, it's very, very difficult to have money launderers or terrorists or people like that use Bitcoin because they'll have to give their identity.

What about the early adopters who actually mined for Bitcoins? Are there records for them?

Absolutely. It's a little bit harder to know who the miners are, but let's say the miners want to cash back out into dollars--they're going to need to prove their identity.

So... do you know who Satoshi Nakamoto is?

No, no I don't. I wish.

What about cyber security issues? Are you worried about Bitcoin being hacked?

Bitcoin has never been hacked and Bitcoin can never be hacked. What can be hacked is the various websites or exchanges that hold Bitcoin. Bitcoin itself has never been hacked just like email has never been hacked--but your Gmail account could get hacked. Bitcoin is an open-sourced protocol. It's a way of sending units of value over the Internet. The code is open sourced. Anyone can read it, see it, and update it. So at this moment you have all of the world's best hackers trying to break Bitcoin. And they can't.

It seems like you practically need a PhD in computer science to understand how Bitcoin works. For it to become more mainstream--say for businesses to adopt it--won't it need to be more accessible?

There's a learning curve, just like there is with anything. It takes time to learn how to do something and it's going to be difficult. Back in the day, my mother didn't understand Bitcoin. She thought it was for techs and geeks and nerds. Now, she understands it pretty well. It's like email. You don't need to understand how email works to use email.

The Winklevoss twins are giving the keynote at the conference this weekend. Why them?

Cameron and Tyler are really interesting people. These guys know everyone--from politicians to bankers to the guys like you and me. They also have a ton of experience building infrastructure and building companies. And that's what Bitcoin needs--it needs better infrastructure, better companies, and more people involved. So aside from them being high profile, I think they can teach a lot of people in the crowd how to take Bitcoin to the next level.

Make sure you see your workplace through your staff's eyes.

Most business owners like to think the culture they have created feels like a family. While that means different things to everyone, having everyone feel a personal connection to the company, take pride in what they do, and help each other succeed is the foundation.

Sure, creating a family atmosphere starts at the top, but you have to look under the surface to see if it comes to life. How can you tell? Your people being champions of the company culture, proactively coming up with ideas to make it a better place to work and choosing to hang out together on the weekends are all signs that there is a tighter connection than a day’s work and a paycheck.

Maybe most important: Never forget that your company is their company, too. If you don’t think of it as their company--well then you should just give up on the idea of having a family-oriented company culture in the first place.

There are a few simple things that I have found go a long way toward creating an environment that is both positive and professional:

Be real. All too often business leaders feel they need to project an image to those who work for them that doesn’t necessarily reflect who they really are and actually masks their true personality. It’s ok to let your people beyond the veneer of leadership. I am proud to make a fool of myself in small ways every day and feel that the ability to laugh at myself makes me far more approachable. My teams may think I am a little strange at times, but I think they know that I am the person they see every day.

Be empathetic. Remember what it was like when you were the person sitting at that cubicle wondering how you were going to get through those days filled with ungrateful customers, unreasonable expectations and a limited understanding of how to do what’s being asked of you? That’s how your teams feel most days. They aren’t looking for you to tell them how to solve their problems--ok sometimes they are--but mostly they want to believe you can relate to their world and can help THEM solve things. Think through problems with them, ask questions rather than always supplying answers and remember: Remember the worst boss you ever had. Then think about the best. What were the major differences in how they communicated?

Be humble. Nothing’s wrong with a healthy ego. It is almost impossible to lead a large group of people without the ability to stand in front of them and make them feel you know what you are doing at the times when you are not even sure you do. But there is a huge line between ego-confidence and ego-arrogance. You’re the boss, they already get that and don’t need to be reminded of how awesome you are. I believe that I am at my absolute best when everyone around me succeeds and my role is that of coach and advisor. You should be happier to get a note from a client about how great someone on your team performed that a direct thanks for something you did.

Be direct. Most people know when they’re struggling. Often they are trying desperately to figure out how to turn things around but are terrified to speak up beause they don’t know if you know how much they’re struggling. Meanwhile, it is likely that your own frustration is resulting in harsh heat-of-the-moment criticism rather than constructive advice. Wait until things calm down a bit and ask the person to meet over a cup of coffee. Tell them you know they are struggling, and that you are invested in their success. Talk to them about what’s not working and be specific about things they can do to improve, then help coach them on those items rather than getting angry. In most cases you’ll find the person turns it around. Those who can’t or won’t often take this as a signal that they should find another job. Either way things get better for you, them and all of the people around who were just as frustrated with the situation but simply worked around the person the whole time.

Be transparent. The people who work for you have made a decision to place part of their lives in your hands and don’t like to live in a black hole. It has amazed me at times that as tight knit as we are often people in the office don’t know what is going on across the business. We’ve had major pitches going on and half the office doesn’t even know we are pitching. The answer: communicate, communicate and communicate some more. It’s your job to make sure people know what’s happening--that means the good, the bad and the ugly. What you tell them will NEVER be worse than what they will be talking about behind your back if you say nothing.

Sure, perks are great--and my company offers plenty of them. But true happiness in the workplace starts with passion.

This week marks the 12th anniversary of my entertainment marketing and interactive advertising agency, Situation Interactive. I founded the company, which has offices in New York City and Los Angeles, based on my personal passion and curiosity for the intersection of technology and live experiences: the sporting event that makes us cheer, the Broadway show that makes us sing, or the vacation that leaves you in awe. As a consumer, I believe having such experiences--and sharing them with others--makes me a better, happier person. Therefore, as a business owner that helps market these experiences, I believe wholeheartedly in what I do every day.

My company has been fortunate enough to be named a best place to work by Crain's New York Business three years in a row. We work hard to provide great perks, including free tickets to cultural and sporting events, free breakfast, and an outdoor roof deck. But what I'd like to believe makes it a truly great place to work is the fact that each of my 60 employees shares my belief in the value of the live experience and my passion for what we do. Over the years, I've identified four key traits common to happy employees. Now, I keep them in mind when I'm recruiting new hires to ensure they'll be a good fit.

They believe in the greater purpose of our company.

There's nothing more powerful in a career than realizing what you do has a greater purpose beyond financial gain-;for me, it’s the fact that I believe my company makes the world a better place. Whether it’s the company’s greater purpose or the impact of each person's work day-to-day, all that matters is that our employees believe in it.

They have a personal passion for their role at the company.

For me, it's not a question of whether an employee will dread going to work each day, but if they will love going to work each day. Without a personal passion for their job, employees will have a hard time growing within the company.

Their values align with company values.

Every company has a core set of values expressed either through words or action. While it wasn't until this past year that we (literally) published on our walls our founding principle that "We believe the world is a better place when people are doing rather than having," this spirit has been central to what makes us tick since the very beginning. We continually reinforce this core principle by taking part in rewarding experiences together as a team.

Their family members (or other loved ones) are proud of what they do.

People want to be proud of what they do. One of the best ways to illustrate that is to have the acknowledgment and respect of those that love them the most. Happy employees are excited to share their work life with loved ones. They speak proudly of what they do to their mother, son, daughter, and friends. If their loved ones are proud of them, it's icing on the cake.

At an annual meeting of venture capitalists, a Morgan Stanley managing director gave five tips on how to pitch him. They're helpful for anyone making a big ask.

Get over yourself. Be nice.

That was just some of the advice venture capitalists got at the last session of the National Venture Capital Association conference in San Francisco on Wednesday.

Just as entrepreneurs have boards of directors they need to satisfy, venture capitalists have limited partners, or L.P.s. These are the managers of endowments, pension funds, and other big pools of money who give money to venture capitalists to invest.

In a panel called “Rants and Raves,” each of four L.P.s was given five minutes to say what they like the most, and what they like the least, about venture capital and its practitioners. There was plenty to like, but it was the criticisms that were the most memorable. Especially those from Jamey Sperans, a managing director with Morgan Stanley.

In his presentation, Sperans offered five things venture capitalists could do better during the fundraising process, when they're asking to manage his money. But Sperans’ comments provide excellent food for thought for anyone trying to raise money or making any kind of ask. Here are his five tips.

Don’t Lie

Sure, this sounds simple. But Sperans says he gets lied to every day. Some of the lies are doozies, while others appear to be white lies.

Sperans considers being hyper-promotional a lie. “What you ask us to do as investors is completely insane,” Sperans told the audience of venture capitalists. “We’re asked every day to give money to people we’re just getting to know for 12 to 15 years. It’s an act of lunacy. And it’s a game of trust.” Erode that trust--in any way--and it’s game over.

One Felony or Two?

Sperans said that during one negotiation, the venture capitalist said it should be the second felony, not the first, that would be cause for termination. Obviously, that negotiation ended quickly. But Sperans is making a larger point: There is information content embedded in everything you do. The way you treat your colleagues in the negotiation room, the way you treat the people on the other side of the table, the way you treat the secretary: They all matter. These are all things that tell Sperans if you’re a good person, and a trustworthy person. And as he said repeatedly, it’s all about trust.

Beware the Lake Wobegon effect

In Lake Wobegon, as envisioned by Garrison Keillor, the women are strong, the men are beautiful, and all the children are above average. Venture capitalists, he says, would also have you believe that they’re all above average. As a group, they may all be smarter than the average bear, but as an L.P., Sperans is not choosing between a venture investor and an average bear. He’s choosing between venture capitalists. And they can’t all be above average.

“By definition,” he said, “half of you are below average. As investors, very few of you are extraordinary bets. When you come to talk to people like us, who talk to people like you every day, a little humility and a little self-awareness goes a long way.”

The Great Dispersion

Average returns in venture capital are not good. Even the top 25% of venture capital funds, Sperans said, are bad as risk-adjusted bets. “I want the top decile or better,” he said. “I need the outlier event.” What does that means to the folks pitching him? “Think carefully about your business, the proposition to the entrepreneur, and what makes you guys truly extraordinary.”

Show Me Some Love

Sperans knew this one was not going to be popular. “I believe in the power of love in all things, but I believe in the power of love in business and investing,” he said. “I know you’re snickering already.” He said not many people talk about love in a commercial context, because “it feels soft or it feels like a lawsuit.”

What he’s referring to, Sperans says, is “the emotional disposition certain people have toward the work they do and the people they do it with. “ He’s sick of hearing about passion, because it’s so self-centered. Instead, in some people--both entrepreneurial teams and partnerships of venture investors, “there is a deep and abiding respect and selflessness that is really uncommon and really powerful.” He says the two groups that raised the most money from him showed business love, although he asks folks not to try to fake it. “It’s really painful if you do,” he said. He closed with a quote he attributed to William Penn: “Let’s see what love can do.”

Most successful businesses are built from a proprietary asset, not just an idea.Until that spark is in place, outside investment is a risky proposition.

The essence of building a business is creating something from nothing. But in reality, every business starts from something and results in something more ... hopefully a lot more.

Among the high-ambition business builders we talk to, we find a common misconception that good ideas by themselves attract money. Sure, there are VCs in Silicon Valley looking for the next Facebook, but in general they are placing their bets on individuals, teams, and track records, rather than simply ideas. This is a basic fundamental of finance: Why should someone invest in your risky business venture instead of placing safer bets somewhere else?

We've written previously about the lack of value in ideas (see Why Your Idea Isn't Worth Anything and Why You're Not Entitled to Your Idea). The vast majority of start-up businesses, even those that raise funding, are built from something proprietary: a reputation among a base of customers, a unique skill or expertise, a valuable asset such as a truck fleet or a desired location, or even someone's time and effort--sweat equity to build the business.

Examples are everywhere. Facebook was based on access to a captive network of Harvard students (the original users were required to have a Harvard.edu e-mail address). Apple was built when Steve Wozniak spent his time tinkering with early PCs and Steve Jobs commercialized his work. One of the companies we work with, Phin and Phebes Ice Cream, was built through the creativity and inventiveness of the founders, who created some amazing ice cream flavors. Our own business was built through the reputation and skills we built in a prior job that we leveraged with our first clients to establish an early track record.

Each of these businesses used these early sparks to ignite value. They all received capital infusions only after they had built a unique foundation for growth.

We almost always discourage businesses from raising outside capital until the conditions are perfect. A proprietary source of capital, such as your own savings or the profits from another business, should be used almost as sparingly. Most businesses can benefit from building their strategic assets first and only employing capital once a core business model can be scaled. Until then, it's important to identify your spark, and leverage it into a viable business.

What sparks did you use to start a business? When have you sourced capital to fuel the fire? Share your thoughts with us at karlandbill@avondalestrategicpartners.com.

Your future competitors will likely supply what you do--but from cheaper, off-the-radar sources.

There are backyard business terms, and there are--how shall we put it?--more elevated notions.

Any kid with a lemonade stand grasps "supply" and "demand."

But notions like "disruption" and "business model innovation" tend to be the province of the business literati. If you know what they mean, you've either been to b-school or read a few dozen articles (perhaps even in Build) on the topics.

This is why a recent post on TheNextWeb.com caught our attention. Sangeet Paul Choudary, author of the upcoming book, Platform Thinking, used the very friendly term "supply" to frame what, in our eyes, is a kick-ass theory on the often complex notion of disruption.

Choudary (@sanguit) explains that the key to Airbnb's disruption of the incumbent hospitality market--that is, hotels and inns--was its ability to challenge the incumbents' traditional source of supply. "Airbnb enables anyone with a spare room and a mattress to run their own BnB and benefit from a global market of travelers."

It would be one thing if Airbnb were the only upstart disrupting incumbents by challenging traditional supply sources. But in Choudary's eyes, Airbnb fits into part of a supply-challenging pattern, along with BuzzFeed, oDesk, and YouTube. What do these companies do differently?

Here's Choudary's list:

No one previously imagined an inventory of travel accommodations composed of urban households with spare rooms. Likewise, the idea that a global audience would find amateur videos (as is often the case on YouTube) appealing would have been scoffed at years ago.

As the case study of Airbnb suggests, the average listing initially doesn't compare to established hotels in service quality and targets a price-conscious traveler. The same dynamic applies when comparing YouTube with traditional broadcast media.

As the platform finds greater adoption among consumers, it attracts mainstream producers as well. As a result, the production quality improves as the platform gains consumer traction, something that we've seen with both Airbnb and YouTube, as well as many other platforms.

So where does all of this leave you? If you're a mid-market exec, think about what your company supplies. Remember: Your future challengers are thinking about cheaper, off-the-radar ways to supply the same thing. What can you do about it? Two things:

1. Consider the long-term vulnerabilities in whatever it is you supply. How might a new business capitalize on these vulnerabilities?

2. Take a step in this direction, even if it's just a mental step. What can you do to remain nimble and competitive, if suddenly your customers can go elsewhere--and pay less--for what you supply? A larger company could simply make an acquisition. A mid-sized company might not have such fiscal flexibility.

Related Articles

When the Game Changes
How to Create a Business Model That's 'Built to Last'
The 'Consumption Chain' Solution to Differentiation That Lasts