50 Smartest companies as per MIT Evaluation 07-06

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It Pays to Be Smart

Superstar companies are dominating the economy by exploiting a growing gap in digital competencies. 

Our economy is increasingly ruled by a few dominant firms. We see them everywhere, from established giants Amazon, Facebook, Google, Apple, and Walmart to fast-growing newcomers like Airbnb, Tesla, and Uber. There have always been large companies and outright monopolies, but there’s something distinctive about this new generation of what some economists call superstar companies. They appear across a broad range of business sectors and have gained their power at least in part by adeptly anticipating and using digital technologies that foster conditions where a few winners essentially take all.

Our annual list of the 50 Smartest Companies includes many of these firms, but it’s not merely a list of today’s biggest or most profitable players. It highlights technologically innovative companies whose business models allow them to exploit these advances. The list is our best guess as to which firms will be the dominant companies of the future. Amazon and Facebook and Google are on it, but so are plenty of newcomers. Though they might be unfamiliar to you today, we believe they have an inside track to take advantage of the technologies, such as artificial intelligence, that will define business in the coming years. Being smart about innovation won’t guarantee that these firms become superstars. But it does, at least, give them the potential to create and dominate new markets in an increasingly competitive business environment. 

The emergence of superstar companies has, in many ways, helped to define our era. Digital giants, in particular, have cleverly leveraged the Internet, so-called network effects, and big data to become hugely profitable while providing indispensable services—like free Web search and easy online shopping—and devices that have changed our lives (see “Why Tesla Is Worth More Than GM”).

But Internet companies aren’t the only ones to become superstars. According to recent research by economists at Harvard and MIT, the share of sales by superstar companies—which the authors define as the four largest firms in a given industry—has gone up sharply in all the sectors they looked at, from transportation to services to finance. The trend toward  superstar firms is accelerating, says Lawrence Katz, a Harvard economist and coauthor of the study. It has become more uniform across industries and developed economies during the past decade or so. These companies’ dominance is particularly strong in markets undergoing rapid technological change. Katz says that’s probably because of the wide disparity in how well companies take advantage of new advances. In other words, you have to be the smartest company in your field or you might as well not bother.

In itself, that might not be bad. But the authors identified a deeply troubling result of an economy where just a few top-tier companies dominate. One of the economic truths of much of the 20th century was that the portion of the country’s overall income that went to labor was constant; as the economy grew, workers got a proportionate share of that growing pie. But labor’s share of the national income has been shrinking over the past few decades. This is true in many countries, and the decline speeded up in the United States in the 2000s.

The trend puzzles economists. Some suggest it reflects the rise of cheap robots that can do the jobs of human workers, but the data isn’t convincing. Instead, Katz and his coauthors blame the emergence of the superstar companies. As these companies grow and become more efficient and more adept at using digital technologies, they need fewer workers relative to their soaring revenues. The fact that these labor-frugal firms have so much of the market share in their sectors means labor gets a smaller portion of the nation’s overall income.

Compounding the problem is that superstar companies, which desire the best possible talent, tend to pay much better than anyone else. This dynamic is deepening the divide between the country’s economic winners and losers. Nicholas Bloom, an economist at Stanford, and his colleagues have shown that about one-third of the growth in U.S. income inequality since 1980 can be explained by the disparity between the pay premiums of a few elite companies and the salaries most workers earn. Fewer and fewer people—mostly a select group of highly trained professionals—are enjoying the vast profits generated by these top companies. It is “certainly a big part of the [economic] anxiety” that is plaguing the country, Katz believes.

The rise of the superstar companies also might help explain another disturbing economic trend. Despite the proliferation of impressive new advances in software, digital devices, and artificial intelligence over the last decade and the great profits generated by Silicon Valley, economic growth in the United States and other developed countries has been sluggish (see “Dear Silicon Valley: Forget Flying Cars, Give Us Economic Growth”). In particular, an economic measure called total factor productivity, which is meant to reflect innovation, has been dismal (see “Tech Slowdown Threatens the American Dream”).

How can overall growth be so lackluster while the high-tech sector is booming?

Economists with the Organization for Economic Cooperation and Development think they have found the answer. It turns out that productivity at the top companies in various sectors—what the OECD economists call the frontier firms—is growing robustly. These are the companies making the best use of the Internet, software, and other technologies to streamline their operations and create new market opportunities. But most companies aren’t actually harnessing new technologies very effectively. And the relatively poor productivity of these laggards, says OECD economist Dan Andrews, is dragging down the overall economy. “Technologies are increasingly complex, and many firms may lack the competencies to adapt,” suggests Andrews, coauthor of the OECD study, which looked at the United States and 23 other developed countries.

In some ways the OECD findings are encouraging, because they demonstrate that recent innovations do—in the hands of top companies—have the potential to strongly improve productivity. But surprisingly, says Andrews, the laggards seem to be making little progress toward catching up; new ideas and business practices aren’t trickling down as rapidly as they should. The reason isn’t entirely clear, he says. But it seems that the economy is less dynamic and efficient at “dispersing” new technologies than we might think.

Such findings help drive home the importance of the 50 Smartest Companies list. Be assured, there are no laggards on it. But the research by Andrews and others also shows why we need a better business climate—one that allows more startups and fresh ideas to thrive. Today’s giant companies are pulling ahead, and a dwindling number of individuals are reaping the financial rewards. There is nothing inevitable about that trend. The advent of complex technologies such as artificial intelligence, which will be critical to future business success and are tricky to understand and master, could widen the gap further. They could also provide ample opportunities for new companies to create markets that don’t even exist today. We do need companies to aggressively push the frontiers of innovation. Still, as we celebrate our 50 Smartest Companies, it is worth keeping in mind the importance of distributing know-how, and the wealth it produces, more broadly.

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Reproduced from MIT Technology Review

Airbnb, Uber, and Others Used 'Time Collapsing' to Skyrocket From Zero to Millions 08-23

Fast-growth companies speed up success by incorporating digital tools and breakthrough innovation into the core of their business.

Image credit : Shyam's Imagination Library

In 2007, Airbnb appeared on the scene and completely changed the world of travel and hospitality. But unbeknownst to its three, 30-something founders, they forged a new path for startups.
Uber, Spanx, and NetJets also blazed trails from zero to millions nearly from inception. These standouts have rewritten the rules of building a business, proving innovative startups can play on the same field as their much larger competitors. So how did they do it?

According to business and marketing experts like Ed O'Keefe, modern longevity has everything to do with eliminating risks. When timeworn manuals advising slow-and-steady wins the business race were tossed out by innovators, a unique phenomenon was enabled, challenging much of what we know about the formula for success.

O'Keefe, the founder of EOK Marketing, who has just written a book about a theory he calls "time collapsing," says leaders who practice his theory--which can be summarized as the process of speeding up success--incorporate digital tools and innovation into their business's essence. "It isn't just one thing that leads to ignition," he says of his theory. "Multiple methods have been adjusted and optimized to permit more instantaneous gratification."

O'Keefe outlines other practices used by upstarts like Airbnb and Uber to accelerate success:

1. Leapfrog over older organizations.

This is the action taken when someone skips several stairs--typically paving the way to success. Instead of implementing a plan to increase metrics by x amount month over month, modern marketing means money can be made faster, and companies can cement their footing sooner.
Older establishments are finding younger companies competing neck-and-neck, because the steps 21st-century startups must take to reach their pinnacles are fewer and take less time to institute.

2. Consider a contrarian view to speed up emotional attachment.

In the case of Spanx, Sara Blakely inventoried the plagues of the undergarment industry. Instead of noting the wins of longer-lasting brands and consumer devotion, Blakely took everything she didn't know and based her standards on non-information.

For decades, intimate apparel manufacturers had adhered to few absolutes. They'd used the same material forever--even though it was scratchy, awkward, and ill fitting. They'd ensured their designs fit a mannequin. But Blakely broke that two-step mold when she created something she loved that was comfortable to wear, in a material she adored. And finally, she tested her prototype on humans.
In a world where no updated and intuitive patterns existed, Blakely devised her own. When consumers got wind of her impressive unmentionables, sales skyrocketed. Blakely collapsed time by engineering new guidelines for research and development, and instead of waiting for consumers to become loyal, she sped up their emotional attachment.

3. Scoop up customers through unique inventory and inventive services.

Airbnb used the collateral of participating members' houses. Uber snapped up their drivers' cars, and in doing so, both elementary-age firms displayed marketing prowess. Their potential wasn't contained by a lack of funds needed to acquire product. Instead, they expanded their resources by using abstract solutions to leap everyday hurdles.

4. Climb as high as you want.

No companies need grant you the right to pass, to take their place--or to topple them. You are clear to climb as high as you want, and you are provided level playing terrain through the existence of free enterprise.

Simplify and cut shipping, eliminate overhead, identify your dream client--and then replicate the steps to actualize early success.

5. Put your company on the map through the law of opposites.

Dollar Shave Club, which was recently purchased by Unilever for $1 billion, tackled the micro-industry by refusing to follow the same old dusty plan. When high-quality affordable generic razors became obtainable at reasonable rates through subscription, consumers beat down the door. By positioning with a price incapable of sinking much lower, demand went up. So did profits.

6. Be powerful because you're small and flexible.

Your company must be nimble and allow you to control your presence, costs, and inventory. Multimillion- and billion-dollar corporations have discovered that massive footprints limit prosperity. But the new entrepreneur doesn't need to lease a monstrous space. The staff should be remote, the product moved on demand, and the SMM analytics liberated from third-party consultants. The business should operate location-free.

7. Use the right technology and tools for zero-barrier entry into the marketplace.

The same tools are available to businesses of any size and are accessible to entrepreneurs. Anyone can develop a relationship with a delivery company, pop up a website in minutes offering packages for immediate purchase, and send automated emails.

You also have access to breakthrough marketing and innovation at your fingertips. My agency, Trepoint, for example, leverages the power of influencer marketing to deliver 11X higher ROI for companies of all sizes. Outsourcing your lead generation and marketing support needs is yet another way to squeeze time.

In this modern marketplace with a zero-barrier entry, nothing is stopping you from going head-to-head with the leaders of an industry--the same way the creative founders of zero-to-millions companies like Airbnb and Uber have.

How can you apply these insights? What aspects of your business can you immediately time collapse and reap the rewards?

One of the best pieces of advice I have received was to do what I do best and outsource the rest. Time collapsing is another powerful way to accomplish this objective.

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New IBM Entrepreneur Program: Bringing New-age Cloud-based Innovation and Collaboration for Today’s Startups 02-04

New IBM Entrepreneur Program: Bringing New-age Cloud-based Innovation and Collaboration for Today’s Startups

If you’ve been toying with the idea of joining the cloud bandwagon, there couldn’t have been a better time than this to do so. As a step towards making cloud technology more viable and accessible than ever before, IBM has announced the launch of the IBM Global Entrepreneur Program for Cloud Startups. This is exciting, because it’ll allow startups and midsize businesses to embrace cloud technology and integrate it into the business operations, will also help them tap into IBM’s global network of clients, consultants, and innovation centers . This means businesses can gain cloud benefits—things like scalable and flexible infrastructure, hottest innovations, next-gen cloud apps and much more – combined with the ability to make important connections within the industries they serve (and or want to serve).

Clearly, IBM is bringing to the table complete cloud solutions for young and early stage companies. This program could positively aid startup innovations and transform the way early-stage companies operate today. While most young companies are financially challenged to materialize their big ideas, they find it immensely difficult to find investors. If everything goes as planned, perhaps this program will help solve this problem by bringing startups and entrepreneurs face-to-face with investors and venture capitalists.

Through this program, IBM will offer up to $120,000 worth of IBM Cloud usage credits to qualifying startups as a move to fund innovations and to spark interesting collaborations between the startups and its own entrepreneurial community. Of late, IBM has been playing a proactive role in supporting innovation among new companies. In fact, this program is latest among its string of recent initiatives in this direction. For instance, last year IBM partnered with the City of New York to launch digital.NYC, a cloud-based resource for the NYC tech community, and also teamed up with Galvanize, a startup hub based in San Francisco, to create its first-ever BlueMix Garage – a collaborative space of developers to innovate new cloud applications.

This program will give enterprises a full-blown access to IBM’s cloud portfolio, which includes tools to evaluate social data leveraging IBM’s new Twitter partnership, Aspera’s high speed data transfer services, and Cloudant’s flexible Database-as-a-Service (DaaS). Not only this, startups will get up close and personal with IBM’s vast entrepreneurial client base through IBM-facilitated networking dinners, CIO and entrepreneur meetings, and other events across the globe. And, this personal networking is probably the best opportunity for startups and the entrepreneurial community to make those vital connections that often change the course of their fate.

As for the required tech support for the program, IBM will offer consulting and support through its global innovation centers, its new incubator space in Silicon Alley and its growing network of Bluemix Garages.

If there’s a maxim for today’s businesses, it most certainly is – the present and the future of successful business operation lies in leveraging the power of cloud. And, if this program turns out to be successful, IBM can proudly call itself the driving force behind this maxim.

Have startups found their holy grail in this IBM-led program? 

We’ll have to wait and watch. 

What do you think?

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The Start-Up of You 06-16

The Start-Up of You

The rise in the unemployment rate last month to 9.2 percent has Democrats and Republicans reliably falling back on their respective cure-alls. It is evidence for liberals that we need more stimulus and for conservatives that we need more tax cuts to increase demand. I am sure there is truth in both, but I do not believe they are the whole story. I think something else, something new — something that will require our kids not so much to find their next job as to invent their next job — is also influencing today’s job market more than people realize.

Look at the news these days from the most dynamic sector of the U.S. economy — Silicon Valley. Facebook is now valued near $100 billion, Twitter at $8 billion, Groupon at $30 billion, Zynga at $20 billion and LinkedIn at $8 billion. These are the fastest-growing Internet/social networking companies in the world, and here’s what’s scary: You could easily fit all their employees together into the 20,000 seats in Madison Square Garden, and still have room for grandma. They just don’t employ a lot of people, relative to their valuations, and while they’re all hiring today, they are largely looking for talented engineers.

Indeed, what is most striking when you talk to employers today is how many of them have used the pressure of the recession to become even more productive by deploying more automation technologies, software, outsourcing, robotics — anything they can use to make better products with reduced head count and health care and pension liabilities. That is not going to change. And while many of them are hiring, they are increasingly picky. They are all looking for the same kind of people — people who not only have the critical thinking skills to do the value-adding jobs that technology can’t, but also people who can invent, adapt and reinvent their jobs every day, in a market that changes faster than ever.

Today’s college grads need to be aware that the rising trend in Silicon Valley is to 
evaluate employees every quarter, not annually. Because the merger of globalization and the I.T. revolution means new products are being phased in and out so fast that companies cannot afford to wait until the end of the year to figure out whether a team leader is doing a good job.

Whatever you may be thinking when you apply for a job today, you can be sure the employer is asking this: Can this person add value every hour, every day — more than a worker in India, a robot or a computer? Can he or she help my company adapt by not only doing the job today but also reinventing the job for tomorrow? And can he or she adapt with all the change, so my company can adapt and export more into the fastest-growing global markets? In today’s hyperconnected world, more and more companies cannot and will not hire people who don’t fulfill those criteria.

But you would never know that from listening to the debate in Washington, where some Democrats still tend to talk about job creation as if it’s the 1960s and some Republicans as if it’s the 1980s. But this is not your parents’ job market.

This is precisely why LinkedIn’s founder, Reid Garrett Hoffman, one of the premier starter-uppers in Silicon Valley — besides co-founding LinkedIn, he is on the board of Zynga, was an early investor in Facebook and sits on the board of Mozilla — has a book coming out after New Year called “The Start-Up of You,” co-authored with Ben Casnocha. Its subtitle could easily be: “Hey, recent graduates! Hey, 35-year-old midcareer professional! Here’s how you build your career today.”

Hoffman argues that professionals need an entirely new mind-set and skill set to compete. “The old paradigm of climb up a stable career ladder is dead and gone,” he said to me. “No career is a sure thing anymore. The uncertain, rapidly changing conditions in which entrepreneurs start companies is what it’s now like for all of us fashioning a career. Therefore you should approach career strategy the same way an entrepreneur approaches starting a business.”

To begin with, Hoffman says, that means ditching a grand life plan. Entrepreneurs don’t write a 100-page business plan and execute it one time; they’re always experimenting and adapting based on what they learn.

It also means using your network to pull in information and intelligence about where the growth opportunities are — and then investing in yourself to build skills that will allow you to take advantage of those opportunities. Hoffman adds: “You can’t just say, ‘I have a college degree, I have a right to a job, now someone else should figure out how to hire and train me.’ ” You have to know which industries are working and what is happening inside them and then “find a way to add value in a way no one else can. For entrepreneurs it’s differentiate or die — that now goes for all of us.”

Finally, you have to strengthen the muscles of resilience. “You may have seen the news that [the] online radio service Pandora went public the other week,” Hoffman said. “What’s lesser known is that in the early days [the founder] pitched his idea more than 300 times to V.C.’s with no luck.”

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THE SHOCKING STATS ABOUT WHO'S REALLY STARTING COMPANIES IN AMERICA 08-15

THE SHOCKING STATS ABOUT WHO'S REALLY STARTING COMPANIES IN AMERICA

FULLY A THIRD OF VENTURE-BACKED COMPANIES THAT WENT PUBLIC BETWEEN 2006 AND 2012 HAD AT LEAST ONE IMMIGRANT FOUNDER AT THE HELM. ARIANNA HUFFINGTON AND OTHER PROMINENT ENTREPRENEURS ON WHY THE U.S. NEEDS TO GET CREATIVE ABOUT IMMIGRATION POLICY.

What do Google’s Sergey Brin  , eBay’s Pierre Omidyar  , and Tesla Motors’sElon Musk all have in common? Each of these serial entrepreneurs who founded companies that have market caps in the tens or hundreds of billions--employing tens of thousands of workers--were born outside the U.S. From Yahoo to Facebook and LinkedIn, each of these innovative companies that have played such a large role in the U.S. economy had at least one founder that was born abroad and then emigrated to the United States.

Immigrants today are more than twice as likely to found businesses as their native-born counterparts and are responsible for more than 25% of all new business creation and related job growth  . And while some of these immigrant-led businesses are next-generation startups and small businesses, many actually top the charts when it comes to America’s largest companies. 

Currently, more than 40 percent of Fortune 500 companies   were founded by immigrants or the children of immigrants, according to a study by The Partnership for a New American Economy  , a group of governors and business leaders launched by New York City Mayor Michael Bloomberg and Australian media heavyweight Rupert Murdoch. 

Yet today, more than 200 years after the U.S. declared independence and threw open its doors to immigrants looking for freedom and a chance to realize their potential, the land of opportunity has been inching its doors shut.

THIRTY-THREE PERCENT OF VENTURE-BACKED COMPANIES THAT WENT PUBLIC BETWEEN 2006 AND 2012 HAD AT LEAST ONE IMMIGRANT FOUNDER AT THE HELM.

A recent study   put out by the National Venture Capital Association (NVCA) found that venture-backed companies with at least one foreign-born founder are responsible for an increasing amount of IPOs and subsequent job creation.

 The study concluded that 33% of venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder   at the helm. The study also found that those public, venture-backed companies with at least one immigrant founder represent a market capitalization of $900 billion.

These revenue-generating machines are an enormous boost to the U.S. economy--contributing to the GDP, paying taxes to help lower the U.S. debt, creating domestic jobs (immigrant-founded, venture-backed public companies employ approximately 600,000 people globally with the majority of jobs created in the U.S.) and helping to lift up the standard of living overall.

When I asked Mark Heesen, president of NVCA, why immigration reform is so important not only altruistically for immigrants looking for opportunity but actually selfishly for the U.S. economy, he said: “As Congress debates comprehensive immigration reform, understanding the contributions of high-skilled, foreign-born entrepreneurs to our country is imperative to ensuring meaningful changes to our system. 

These individuals have founded many of America’s most successful companies, keeping jobs, market value, and innovation here in the United States. Our policies must not only accept, but welcome the next generation of immigrant entrepreneurs who are making even greater strides in starting and growing amazing companies.”

But let America’s immigrant entrepreneurs speak for themselves. From the Greek-born founder of The Huffington Post to the Romanian-born CTO of SAP turned founder of Tidemark, the six entrepreneurs below share one important thing: a unique perspective and way of seeing the world that only growing up on the outside can bring.

CHRISTIAN GHEORGHE: ROMANIAN-BORN NYC LIMO DRIVER TURNED FOUNDER AND CEO OF TIDEMARK

Christian Gheorghe, founder and CEO, Tidemark  , who was previously the CTO and SVP at SAP, immigrated to the U.S. from communist Romania with a master’s degree in computer science and mechanical engineering. To make ends meet--and learn English at the same time--Gheorghe took a job in NYC as a limo driver. But this highly educated and hardworking immigrant didn’t let language barriers or low-skilled jobs set him back--they only motivated him.

"In retrospect, not knowing English when I first arrived at the modern version of Ellis Island--a brightly lit immigration room at JFK airport--was a blessing in disguise. Freedom, the first word I ever learned by listening to Pink Floyd records in communist Romania before escaping to America, was one of the few English words I did know and muttered to the immigration officer when he asked me, ‘Why are you here?’

“I learned later what great things an open and benevolent American immigration policy can really do for oppressed people such as myself. One thing is for sure: At that moment, as the wall was coming down, I was given a chance to be free. Freedom, as it turns out, has shaped everything in my life since I was allowed to immigrate to America.

“From learning how to drive a limo in NYC to make ends meet, to later writing software and starting companies to realize the vision I have for analytics for the many, a common thread emerges. The most amazing thing that America has given to me is the gift of freedom to build something from nothing, to find and work with teams of people that share common values, and to build and create value that matters,” says Gheorghe.

IQRAM MAGDON-ISMAIL: ZIMBABWE-BORN, U.S. BRED, COFOUNDER OF VENMO

Born in Zimbabwe to parents of Sri Lankan descent, Magdon-Ismail said his experience as an immigrant in the U.S. was very different from the experiences of his friends who immigrated to the U.S. and weren't lucky enough to become citizens.

“I came to America when I was in the 7th grade. I feel very lucky to have become a U.S. citizen before I went to college--I was automatically granted citizenship when my mom became a citizen because I was under 18. Some of my friends in college didn't have citizenship status, and I found myself planning my career differently. I didn't require a special visa to stay and work in the U.S., whereas some of my college friends did. I knew after I graduated, the doors were wide open for me. 

I was free to explore, and start my own company. Some of my friends were dependent on company sponsorship in order to stay in the U.S. This seems like a good position for companies with enough wherewithal to sponsor students, yet still represents a minor inequality because the spectrum of companies I could work for versus some of my friends was slightly different.

“Venmo   welcomes immigrants. They bring unique insight to our company because of their diverse experiences. I was immersed in a very different environment growing up and going to school in Zimbabwe. My immigrant perspective helps Venmo consider different markets, and a lot of the social encounters I had outside the U.S. continue to inspire some of the innovation you see in our product today. Nowadays, companies like Venmo can quickly reach global audiences. We want people from everywhere in the world to join our team.

“It would be nice if some of our immigration reform focused on helping international students pursue their dreams in America. I have met lots of bright students forced to leave the country because they didn’t have appropriate working status. America is the land of opportunity, and international students with lots of potential are like all other students that attend U.S. universities--we should do whatever we can to keep these amazing people here.”

ARIANNA HUFFINGTON: GREEK-BORN, BRITISH-EDUCATED, AMERICAN MEDIA MAVEN

Arianna Huffington, the Greek-born entrepreneur and founder of The Huffington Post  --which was sold to AOL for $315 million in 2011--brought with her the values her mother instilled in her when she was a young girl growing up in Greece as she immigrated to London and then the U.S., first moving to New York and later settling in California. 

The ambitious socialite turned political candidate turned businesswoman and media maven now runs one of the most influential and well-read publications in the U.S.--a publication that has an entire section dedicated to the topic of immigration.

“In the preamble to the Constitution, we are told that America is constantly moving toward a more perfect union, and the 40 million immigrants in the United States are a central part of that never-ending journey. Nowhere is that more evident than in our community of immigrant entrepreneurs.

“When I was growing up in Athens, my mother would tell me, ‘Failure isn't the opposite of success; it's a stepping stone to success,’ and when I came to America, I was given many opportunities to fail my way to eventual success. But my story is just one of millions. And it falls to all of us--especially those of us who have come here and started businesses--to do whatever we can to make sure the same opportunities we've enjoyed are there for the immigrants of today and tomorrow.”

RENAUD LAPLANCHE: FRENCH SAILING CHAMPION TURNED FOUNDER AND CEO OF LENDING CLUB

Renaud Laplanche, the French-born serial entrepreneur who in addition to founding two successful companies also happens to be a two-time French sailing champion and an Ernst & Young Entrepreneur of the Year, initially came to the U.S. as part of a one-year assignment with the New York law firm Cleary Gottlieb. But halfway into the assignment, the entrepreneur left the firm to found TripleHop Technologies, a leading software firm that was acquired by Oracle in 2005. 

But he didn’t stop there. In 2007, Laplanche founded Lending Club   because his perspective of consumer credit growing up in France was vastly different than consumer credit in the U.S.--and he wanted to bring a friendlier credit model to his new home in America.

“My cultural background played a key role in the genesis of Lending Club. As an immigrant, I was not familiar with U.S. consumer credit and was shocked when I realized that credit card companies charge 18% interest rates. I was looking at this with a fresh pair of eyes because there is no such thing as credit cards in France, and consumer loans are a lot more affordable. I think most American consumers got used to the idea of paying high interest rates on credit cards, but for me it was something really new and that made me question the efficiency of the system and gave me the idea for Lending Club.”

PETER WEIJMARSHAUSEN: DUTCH FOUNDER OF SHAPEWAYS

Dutch-born Peter Weijmarshausen founded Shapeways   in 2007 within the Philips Electronics Lifestyle Incubator. Three years later, the immigrant entrepreneur left the incubator after securing venture funding for his 3-D printing marketplace, which is headquartered in New York. Now, Weijmarshausen is working to bring manufacturing back to the U.S., enabling a community where people can create, share, buy, and sell their own 3-D-printed designs.

"A company is nothing without its people and, as it stands, the freedom for employees to work wherever best suits them is not always supported by international immigration laws. Shapeways was started in the Netherlands and, after three years, we decided to move our headquarters to New York, which presented me immediately with the challenge of immigrating to the United States. We're an international startup with a team still in the Netherlands and offices and a factory in New York. 

The team has roots from all over the world, and in the end we've managed to work within the bounds of the existing processes. But making them easier and more flexible will help Shapeways and other companies grow and compete in an increasingly global economy and internationally expansive workplace, both of which have been enabled by new information technologies."

PHIL JABER: FOUNDER OF PHILZ COFFEE

Phil Jaber, the founder of the hugely popular Bay Area-based Philz Coffee  , says the values he grew up with in the Middle East are the same values that have led to his success in America. 

With 13 coffee shops spanning San Francisco and the Bay Area, Philz employs roughly 300 people and single-handedly fuels many of area’s entrepreneurs, startup founders, and tech giants from Facebook--which has a Philz coffee shop at headquarters--to Virgin America--which serves Philz coffee on its flights.

“I immigrated to the United States in the 1960s because I was looking for a better life. My older brother was already living in California and had opened his own business--so I moved out here and helped him around the shop. But from an early age, I knew I wanted to open my own business.

“Running a business isn’t just about the money. To be successful in business, you must really love what you do and you must treat people well--whether they’re your team members or your customers. My business is all about word of mouth--one person tells another person and quickly word spreads. So it’s important to treat each person the way you would want to be treated--after all, we all come from under the canopy of heaven.” Canopy of Heaven is coincidentally the name of one of the flavorful brews of coffee at Philz.

“Before opening my first shop, I visited more than 1,100 coffee shops to observe what worked and what didn’t work--I wanted to make sure that the culture and environment I was fostering at my coffee shop was a diverse, culture-rich, and welcoming one. From a young age growing up in Ramallah [on the West Bank], I learned how to live with and respect people of all cultures, and I wanted my coffee shops to reflect that. At Philz, we work to foster an environment that builds culture and community--an environment that helps people connect with each other.”

As I sat with Phil at his 24th Street location in New York, it was clear that his coffee shops were hubs of connection, collaboration, and diversity, as he pointed out a group of tech entrepreneurs drinking coffee during a brainstorming session, introduced me to a local doctor, and smiled looking at the young couple dancing in line to the café music.

“My heritage, culture, and family have played a big role in the way I run my shops,” Phil says, pulling out a laminated quote his father had written for him more than a decade ago that read: “Let the life I live speak for me."

LET THEM IN.

As Americans, we all have immigrant friends who have personally made our lives richer. And we’ve all heard their stories of going through the immigration process, of the lengthy and tiresome process of obtaining an H-1B visa and eventually becoming citizens. We’ve heard too many times their worried voices when discussing whether or not they’d be able to stay in the country if they wanted to quit their job and start their own business—the same risks we as citizens are encouraged to take--or what would happen if they got laid off and were out of a job for more than a month. Would they be sent back home?

As the daughter of parents who emigrated from Iran and started their lives in the U.S. from scratch, literally bringing with them only two suitcases and the clothes on their back, I understand too well how much hardworking and educated immigrants like my parents really want to be here, how hard they will work to succeed, and how much our country will benefit as a result of letting them in.

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Five Essentials for Small Business in 2013 12-18

Five Essentials for Small Business in 2013

For those of us who followed along last week, we posted the top five essentials for small business in 2013. Today we are posting the complete list, all in one place, for concise viewing.

Small businesses must prepare for what appears to be an extremely difficult economic environment. Since the bursting of the 2008 credit bubble, U.S. consumers and financial institutions were dramatically hurt by bad debt and over levering themselves. These two vital components of the U.S. economy, that drive individual consumption which is approximately two thirds U.S. GDP, have been a drag on the economy over the last four business years. Although consumers and financial institutions have partially repaired their balance sheets, most of the debt burden was shifted to federal, state, and local governments. 

The size of government has never weighed so heavily on our economy and potentially runs the risk of crowding out the private sector. The Small Business Authority  , on a daily basis will report on the five essential things independent business owners will need to consider to position themselves and have successful enterprises. We will report on these items on a daily basis beginning this Monday, December 10^th.

1. Managing Obamacare. Under the PPAHCA, small businesses with 50 or more employees are mandated to buy health insurance   for their employees or pay a fine, or tax according to Justice Roberts. In addition, many small businesses will be eligible for tax credits under the PPAHCA, as well as taking under consideration managing full-time and part-time staff to meet or beat the 50 employee threshold. Will small business owners hire advisers and consultants to get them through this knothole? Will they try to read and understand the 2000+ page piece of legislation themselves? Healthcare   expenditures are approaching 20% of GDP, thus spiraling healthcare costs is a significant concern for small business owners.
2. Small businesses will need to consider how to get business loans   for growth or refinance. This struggle moves into its fifth year, post the 2008 credit bubble bursting. Not only is new credit unavailable to support growth for small businesses, many small businesses are having a difficult time getting their local community or major money center banks to roll over existing financing.  Why is this so? Well, with the election over we don’t see the banking regulators stepping up the pace of bank seizures and tightening the capital and compliance on existing under capitalized banks. The continuous process of de-levering and shrinking the balance sheets of the banking industry has made rolling over orrefinancing existing debt   a big struggle for small businesses. Small businesses must do what they can in this loan starved environment by working with existing banking relationships, pay down debt and continue the global process of de-levering themselves as well as the banking industry.
3. eCommerce solutions for most small businesses are becoming essential for small- to medium-sized businesses. eCommerce   payment processing   sales during the last few months grew at 15-20 % year over year, while bricks and mortar   sales were down. An eCommerce   site is essential, not only to take payments   but also to allow a business to be found online. Those without a website are at a significant disadvantage. This includes not just big box retailers or major service providers, but also local small businesses and their competitors. The ability to be found and highlighted through  a local internet search is a necessity these days
4. Cyber Security for Small Business. Small businesses are going to need to make the leap into the cloud and accept the fact that their businesses are at risk each and every day. They are no longer able to ignore the risks inherent in keeping sensitive data in a tower on their hard drive under their desk. Lawyers and medical professionals cannot ignore the risks of keeping their client’s health and financial data sitting on a server in the closet of their office or unbounded local IT provider. For the following reasons businesses must embrace the cloud:

• It is more cost effective than their current IT configuration.
• It is more secure. Not perfect, but generally more secure than their current IT configuration.
• It is more efficient regarding access to data 24/7 off of a tablet or smartphone and remotely.
• Constant surveillance and security offered by cloud hosts of business applications are better and security guaranties are available and can be offered. In a nut shell and lastly, small businesses need to embrace the cloud in 2013 and should talk toThe Small Business Authority   to learn how to enhance their business in this fashion.

5.      Cloud Computing   for SMART results. Cloud computing  allows all of a small business’s critical transactions, as well as economic,ecommerce   and web site   traffic data to be accessible at anytime, anywhere – with the proper application. Something like the Newtek Advantage   is extremely beneficial to small business owners, allowing them to see their real-time business information from any smartphone or tablet.Cloud computing   is SMART, because it allows for:

S: Sales Increases – less time dealing with administrative matters means more time selling and servicing customers.

M: More Control, Less Surprises – key business stats and metrics are available in real time; small businesses can make more informed decisions faster and never be out of touch with the most important business data.

A: Accelerated Profits – real-time information means better and more profitable decisions.

R: Real-time information means key business management data is only seconds away, whenever and wherever the business operator is.

T: Technology Enhancements — leads to decreased cost and expense of an IT department — everything is in the Cloud.

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