Is Crowd Funding in Your Start-Up Future?

The new hot topic for entrepreneurs these days is crowd funding, which is anticipated to at least supplement, if not replace, the slow and mysterious process of Angel and venture capital investors.

Traditional lending isn't easy to secure, and many banks are leery of lending to small start-ups (with sometimes crazy ideas for their business and little or no history/financials to back them). Now people are turning to new, creative ways to launch companies and gain funding.

This is where crowd funding platforms come in

Practically anyone can be a small business investor today, and it has blown open the door to funding opportunities. Thanks to the JOBS Act, which passed in April 2012, small businesses can seek funding from investors that don't necessarily carry the SEC's stamp of approval (with restrictions). And one way startups can quickly raise capital is through crowd funding.

These platforms allow people (individuals, entrepreneurs, organizations, etc.) with creative visions to set up campaigns to fund their dream projects through monetary donations from friends, families, and even strangers. Each campaign has a specific fundraising goal and is set to run for a certain number of days, and anyone can donate as much or as little as they please. It is an opportunity for start-up companies to reach an audience that is ready and willing to be part of their success by making small donations to the 'cause.'

A number of websites have sprung up to facilitate crowd funding, including Kickstarter, Indiegogo, Crowdfunder, WeFunder and Quirky.

The sites range from the informal to ones that are closer to traditional venture capital and angel investing, with formal review of business plans and approved entrepreneurs offering a stake in exchange for funding.

If you have an innovative idea, a strong business plan, social media savvy and a compelling incentive to offer potential investors, crowd funding might be for you.

Illustration by

Bloomberg BusinessWeek

Caveat Emptor (“Let the Buyer Beware”)

State securities regulators have put the phenomenon of crowd funding at the top of their annual investment scams list.

Because crowd funding is relatively new, scams are just getting started, regulators from the North American Securities Administrators Association (NASAA) reported recently. The idea is to make investment in startup ventures easily available to the masses. A portion of the JOBS Act will push crowd funding from a “donation” model to a true investment model, and that will make it even more of a lure for swindlers, NASAA said.

"The number of entities out there already pitching themselves as crowdfunding entities online has risen in a significant fashion," said Matt Kitzi, NASAA Enforcement Section Chair and Missouri Securities Commissioner. "Just look at web domain names: it has gone from a couple hundred to well over 1,600 in the past year. They are staking up a position to enter crowdfunding market. There will be a lot more to come on this."

Sources:

1.       Paul Shread,  “Crowdfunding Could Be the Boost Your Startup Needs,” Time,  8/20/2012

2.       Pedro Hernandez, “5 Crowdfunding Sites for Entrepreneurs,”  Small Business Computing.com, 8/17/2012

3.       Beth Pinsker Gladstone, “Crowfunding Tops Regulators Annual List of Investor Traps,”

Huffington Post, 8/22/2012

How's Your Grammar?

WSJ Article: "This Embarrasses You and I"

A front page article in The Wall Street Journal discusses "rampant illiteracy" within the workplace: 

 

"Managers are fighting an epidemic of grammar gaffes in the workplace. Many of them attribute slipping skills to the informality of email, texting and Twitter where slang and shortcuts are common. Such looseness with language can create bad impressions with clients, ruin marketing materials and cause communications errors, many managers say."

 
Students of business communication will recognize many of the errors highlighted in the article, for example, improper subject-verb agreement (e.g., "There's new people you should meet") and incorrect pronoun use (e.g., "...for John and I").

The argument is that there is a shocking lapse in competence in business writing. No doubt, but there has always been shocking writing in the workplace: jargon, buzzwords, slack writing, pompous writing, disingenuous writing, and slipshod writing.

But that kind of bad writing is not what the Journal article is about. It is about an "epidemic of grammar gaffes." You might think that in the middle of an epidemic there would be some examples to present, but the article has none. It merely quotes people who say there is an epidemic, which we must presumably take on faith, because The Wall Street Journal quotes people saying so.

The Journal references pitched battles over the Oxford comma.* And the article quotes Bryan Garner on examples of 'uneducated English,' such as saying " 'I could care less,' instead of 'I couldn't care less,' or, 'He expected Helen and I to help him,' instead of 'Helen and me.' "

The examples are of interest because they display two very different phenomena. Using I instead of me as an object of a verb or preposition is grammatically correct, but often misused in informal conversation. Using I could care less** represents a choice to be informal.

And there, with a preference for informality, we have located the burr under The Wall Street Journal's saddle. It's those damn Young People. "Tamara Erickson, an author and consultant on generational issues, says the problem isn't a lack of skill among 20- and 30-somethings. Accustomed to texting and social networking, 'they've developed a new norm,' Ms. Erickson says."

Young people have always been able to write badly without the assistance of texting. New forms of slang crop up all the time, but slang is a continuing phenomenon. Fresh examples of uneducated writing crop up all the time too, but bad writing in all its forms is a cultural constant. The Internet has not made writing worse; it merely makes it easy to see just how much bad stuff is out there.

Take the WSJ Grammar Quiz. How did you do?

The Wall Street Journal offers a clever interactive quiz that focuses on common errors in grammar and punctuation. Take the quiz. How did you do?

Do you agree with the article's assessment that lack of proper grammar at work is a serious issue? Why or why not?

*This is merely a style convention. Use the final comma in a series or not, as it suits you, or as it suits your employer. Even the Associated Press Stylebook says to use the final comma when it's necessary to avoid ambiguity.

**Though not logical, "I could care less" is always perfectly understood, as veteran drudge John E. McIntyre writes in the Baltimore Sun.

It Pays to Advertise

Why is Social Media “Free” to Use?

It is often said that the American free enterprise system is the eighth wonder of the world and the average American's lack of understanding of what it is and why it works is the ninth wonder of the world.

In today's confluence of mass communication, many of us are somewhat bewildered by the tremendous number of advertising messages that are directed to our attention on a day-by-day basis – whether through traditional venues such as newspapers, magazines direct marketing, etc. – or from rich media platforms, such as sponsored ads on Google and Facebook to individual websites and apps.

But have you ever stopped to consider where our economy and commerce would be if business people did not aggressively pursue their freedom to advertise the products and services they produce?

Better yet, how could all the “free” social media sites we enjoy operate without advertising revenue – including those ubiquitous banner ads that run along the sidelines and interfere on the middle of the page? Bottom line: “free” content on collaborative sites are possible only by advertising dollars.

But, in the social age, where do ads fit?

According to a Forbes article, Facebook founder Mark Zuckerberg stated, “We should relax, make relationships, build rapport, sell later.” That philosophy has helped shape its current pitch. Rather than simply providing traditional ads, the social network encourages companies to engage with user by telling them stories. Facebook believe that such interaction is less intrusive than other online ads that take over a user’s screen or push done content.  

Advertising:  With –or -Without Content:

Dish Network Announces its New Ad-Skipping DRV – Ironically, with Commercials.



Ad-skipping DVR raises a ruckus

 The Wall Street Journal, New York Times, LA Times, and others screamed headlines during “upfront” week on the Dish Network Corp. plans to promote its new ad-skipping feature with, ironically enough, a television ad.

Ironically, Dish is rolling out television, radio, newspaper and social media ads to spread the word about their new DVR, dubbed the “Hopper.” Dish last week added “Auto Hop” which lets views skip commercial completely on most nation prime-time shows aired on the major broadcast networks.

However, major networks may not run the ads.

From the B-School

A little card with a caption that said, "NEGATIVE THINKING" and the message it contained is a standard in Business Administration Schools.

It begins, "A man lived by the side of the road and sold hamburgers. He was hard of hearing so he had no radio. He had trouble with his eyes so he watched no television and read no newspaper, but he sold good hamburgers. He did however, advertise in the local newspaper telling people how good they were.

He stood by the side of the road and cried, "Buy a hamburger mister?" and people bought. He increased his meat and roll orders and bought a bigger stove to take care of his trade. His son came home from college to help him and then something happened.

His son said, "Father, haven't you been listening to what people are saying? If money stays tight, we are bound to have bad business. There may be a big recession coming on, you had better prepare for poor trade. Whereupon this man thought, "Well, my son has been to college. He listens to the radio, watches television and reads the newspaper and he ought to know". So, he cut down on his meat and roll orders. He cut out his advertising and no longer bothered to stand by the road to sell hamburgers, and his sales fell almost over night. "You're right son", the father said to the boy. "We are certainly headed for a recession".

Sources:
1. Micahel Humphry, "Facebook, DVR and Solving the Ad Conundrum," Forbes, 5/17/2012
2. Doug Gross, "Ad-skipping DVR Prompts Fight for the Future of TV," CNN Tech, 5/25/12

Pinterest: Pinning, Sharing and Challenging Copyright Laws




Getty Images pinned and re-pinned - some in hi-res 

 

Is Pinterest the new Napster or a Wake-Up Call for a Better Copyright Idea?

The headline in The Wall Street Journal asked, "Is Pinterest the Next Napster?" It's a good question, but perhaps the wrong one.

The story focuses on a blog post written by Kristin Kowalski titled, "Why I Tearfully Deleted My Pinterest Inspiration Boards" that went viral.

Pinterest is a social site for image sharing around themes that launched in March 2010. It gained a considerable following and was one of Time's "50 Best Websites of 2011." In January 2012 it drove more referral traffic to retailers than YouTube, Google+ and LinkedIn combined and became the fasted site to ever break 10 million unique visitors.

As its popularity increases, so have concerns about whether its users aren't just sharing their favorite things, but engaging one another in the web's largest copyright infringement platform.

Ms. Kowalski, a photographer/lawyer, feels pretty strongly that it's infringement to re-pin work from others. Kowalski turned to federal copyright laws and found a section allowing fair use without permission when someone is criticizing it, commenting on it or conducting research. Re-pinning doesn't fall under any of those categories. She concludes that the only option is to either pin your own work or get off Pinterest altogether.

In a recent TechCrunch interview, Jonathan Klein, co-founder and CEO of Getty Images, discussed photo sharing on the Internet. As the world's largest stock agency, he is focused on protecting the photographs that belong to his company -- and making sure that Getty and its affiliated photographers get paid.



Mr. Klein is not concerned about people playing with Getty photos; teenagers using for school projects and folks putting them up on their personal blogs -- or, at the moment, even Pinterest.

So when does Getty snap into action? The moment a website starts running ads alongside those images. As Klein told TechCrunch in the interview above: "We're comfortable with people using our images to build traffic. The point in time when they have a business model, they have to have some sort of license."

This is why Pinterest has a big problem on its hands. When they start generating revenue, which they have not done so far, this will spotlight copyright issues and the lawyers will pounce. The site has certainly built immense traffic by allowing people to share and collect as many photos as they want -- many of which inevitably don't belong to them in the legal sense.  However, the moment that Pinterest starts making money on its own, intellectual property owners such as Getty Images will have the right to ask that Pinterest pay up -- or start deleting pinboards.

But could it be instead that pinning other people's images -- the way Pinterest intends and the way most people use the site -- is fair use? Courts have held that search engine thumbnails are sufficiently transformative to not be infringing. In that context, are Pinterest boards likewise transformative?

Pinterest is probably counting on that -- being considered like a search engine were this ever come to a courtroom, since pins link back to the original site. Pinterest may also have concluded that its users' creation of "boards" is use of content in ways that is akin to collages and mashups, which many consider transformative and therefore lawful.

So there are understandably different opions on the issue of copyright legality. However, beyond questions of copyright, underlying all of this is a huge problem to which the only solution is a mass recognition of the cultural shift occurring. Simply put, the Internet is built on a culture of sharing.

Creatives of all types are often surprised to find their photos shared or their designs copied by others. All art is ultimately derivative -- from the great masters like Karsh or Hemingway or Matisse -- whether the artist wants to admit it or not. We build on those who came before us. That's not a bad thing -- it's just art.

Sources:

1. Therese Poletti, "Is Pinterest the Next Napster," The Wall Street Journal, March 14, 2012

2. Collen Taylor, "For Pinterest, Revenue Will Turn Copyright Questions Into Real Problems," TechCrunch, March 22, 2012

3. Anthony Wing Kosner, "Pinterste: Napster for Housewives or Wake Up Call for a Better Copyright Idea?", Forbes, March 15, 2012

4. Ruth Suehle, "Pinteerest and Copyright: Why You Should Keep Sharing -- and Keep Pinning," Opensource.com, March 7, 2012

Building Brands in a Connected World

"The Connected World has Rerouted the Customer Journey"

Mad Men - the AMC series of top-down advertising and marketing from the 60s - hilariously describes the traditional purchasing funnel: Awareness > Consideration > Purchase > Preference > Loyalty.

In a TV-dominated age, you'd see a commercial and become aware of a brand. Then, after you got familiar with the name, you might consider if you wanted to buy it. Next, you bought it. Then, you might decide you liked it. Finally, you identified yourself with the brand ("I'm a Budweiser guy").

Facebook recently released a study by Forrester Consulting to evaluate how marketing leaders are building brands in a connected world. According to the study, social media has turned the purchase tunnel on its head.

Facebook's new process looks like a circular motion of learning, investigating, purchasing, and interacting.

The process is completely influenced by social media. Consumers hear about new brands and investigate via social media. When it comes time to buy something, consumers increasingly consult their friends via social media. Then, they expect to be able to interact with the brands through social media after the purchase.

The study proposes a six-point plan for building brands in the social media age:

1. Articulate the brand's social identity so the brand communicates with a unique, compelling, and authentic voice.
2. Connect with your best and most likely customers by giving them a reason to like or follow the brand in social channels.
3. Engage people by making brand communications more participative and personally relevant.
4. Influence people by inspiring and enabling people to share messages about your brand with their network.
5. Integrate social into the brand and product experience to make it more cohesive and useful.
6. Rejuvenate the brand by using insights from social channels to monitor the brand's health and improve the brand experience.

A good example of this process can be seen in the clip below that has Michigan State basketball coach Tom Izzo reinforcing the power of social media while in the hunt for the NCAA championship.

Sources:

1. "Building Brands For The Connected World," Facebook, Forrester Consulting, February 2011

2. "Facebook's 6-Point Plan for Building Brands in the Social Media Age," Todd Wasserman, March 12, 2012

3. "Journey to Comfort with Tom Izzo," Dove Men+Care

Where Have The Editors Gone?



Ann Arbor Journal
Thursday, February 16, 2012
Page 1-A (cover page)

 Quality Continues Downward Spiral
The press, especially the traditional press, continues to loose out to rich media formats - not only in revenues, but apparently in talent also.

A recent publication in the Ann Arbor, MI region painfully pointed this out last week.

The Ann Arbor Journal, a weekly newspaper published by Heritage Newspapers, underscores the question: "where are the editors, where are the proof-readers, where are the fact finders?"

A front page article in its Feb. 16th edition, "City talks sustainable uses of land," features a layout template meant to flag information for editors to complete. They actually published the paper with "Subhead goes here, typically three decks."

Truth in Advertising? Since When?

Campbell's Soup Co. was

charged with deception

when it placed marbles

in the bottom of a soup

bowl so ingredients

would rise to the surface.

If it looks too good to be true, then... In ancient Rome, the Latin expression caveat emptor, "Let the buyer beware," warned buyers of unscrupulous sellers. It remains a good dictum today.

Deceptive advertising, whether from altered images and/or simulations, infomercials, misleading statements, outrageous claims, and questionable testimonials -have a long history in the US.

There are legendary stories about ad campaigns that used mock-ups rather than real products to simulate the way products work. When some of these practices came to the attention of the public, some people called them "deceptive advertising," and the authorities stepped in. Nowadays, the Photoshop phenomena is the primary tool to enhance a product.

Digitally Enhanced Images Getting Attention from Authorities.
In the US and the UK, authorities are taking issue with cosmetic ads that they deem are misleading. Print ads for CoverGirl mascara, fronted by spokes model Taylor Swift, have been banned by the U.S.'s watchdog National Advertising Division of the Council of Better Business Bureaus Claims (mercifully abbreviated to NAD) for making unsubstantiated claims. According to the NAD, the mascara ads made claims that couldn't be proven. What's more, fine print beneath Swift's picture states "lashes enhanced in post production."

This is the first major beauty ad to be banned in the United States, though such measures are less rare in the United Kingdom and Europe, where media-watch groups have adopted particularly aggressive anti-Photoshop stances.

For a quick view on how Photoshop is used in cosmetic advertising, check out the video called Evolution below from Dove that shows how Photoshopping is applied to a model.

P&G had the grace to pull the ad when it got caught, but it's a slippery slope between artistic enhancement and government regulation. 

When asked whether this was a de facto ban on Photoshop, NAD director Andrea Levine stated, "You can't use a photograph to demonstrate how a cosmetic will look after it is applied to a woman's face and then - in the mice type - have a disclosure that says 'okay, not really.'" Mice type! We like this lady.

In the UK, Christy Turlington and Julia Roberts retouched ads banned.

Julia Roberts and Christy Turlington are two very beautiful women. But in order to sell its foundation, L’Oreal may have made some itty bitty adjustments to their faces.

That’s a no-no, according to Britain’s Advertising Standards Authority, who has banned two ads of the lovely ladies that were airbrushed to an extent that they claim misleads customers. This will come as a shock to anyone familiar with makeup ads.

Member of Parliament Jo Swinson first alerted the campaign watchdog to Lancome's two-page ad showing Roberts as shot by Mario Testino and a spot for Maybelline's "Eraser" foundation featuring Turlington.

Swinson added, "Excessive airbrushing and digital manipulation techniques have become the norm, but both Christy Turlington and Julia Roberts are naturally beautiful women who don't need retouching to look great. This ban sends a powerful message to advertisers -- let's get back to reality,"

Did you know: There's truth in ice cream advertising.
In the old days of TV ads, many tricks were used: motor oil over roasts to make them look better, airbrushed automobiles, razors that could shave the sand off a piece of sandpaper, mashed potatoes in place of ice cream - and so much more.

A classic example include Campbell's Soups ads (1968); in order to show the abundance of vegetable and noodles in the soup, the ads were shot after placing clear marbles in the bottom of the bowls, helping the vegetables stay near the top and show up clearly in the ads. They got busted by the FTC for false advertising.

It's true that food stylists - those who arrange and photograph food for those tempting photos you see in ads and in restaurants - sometimes create ingenious concoctions to stand in for the real thing under the hot lights of the studio.

Mashed potatoes are still substituted for ice cream. So are recipes involving shortening and confectioners sugar. But when it comes to photos used in advertising, the Federal Trade Commission has deemed that real ice cream must be used in ice cream ads. However, if the ads are for the ice cream cone or a hot fudge topping, a phony ice cream concoction can be used.

Sources:
1. Sarah Anne Hughes, "CoverGirl Ad Featuring Taylor Swift Nixed Over 'Enhanced' Eyelashes," The Washington Post, December 22, 2011
2. Charlotte Cowles, "Taylor Swift's CoverGirl Mascara Ad Banned," New York Magazine, December 20, 2011
3. Jim Edwards, "US Moves Toward Banning Photoshop in Cosmetic Ads," Business Insider, December 16, 2011
4. Turkey Hill Team, "Did You Know: There's Truth in Ice Cream Advertising," Icecream Journal, March 11, 2009
5. William M. O'Barr, "Ethics and Adverising," Advertising & Society Review, 2007
6. Hilary Moss, "Julia Roberts & Christy Turlington L'Oreal Ads Banned in UK," The Huffington Post, July 27, 2011
7. Colleen Nika, "Taylor Swift's Mascara Ad Discontinued, 'Vogue' Cover Confirmed," Rolling Stone Magazine, December 21, 2011