You’re the Boss Blog: Today in Small Business: Founded During the Recession

You're the Boss Blog: Is Silicon Beach Over-Hyped?

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You're the Boss Blog: Business Owners Say They Have Yet to Figure Out Health Care

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You're the Boss Blog: Today in Small Business: No Vacation?

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Corner Office: Be Yourself, Redfin’s Glenn Kelman Says, Even if You’re a Little Goofy

Q. What were some important early lessons for you?

A. Two things influenced me the most. I’m an identical twin, and I felt that with my twin brother, we sort of formed this unassailable force and it gave me the confidence to be different. Even if I was a goofball, my twin brother was a goofball with me, so I didn’t have to worry about fitting in as much. I was able to march to my own drummer.

My parents were a big influence, too. My mother was a nurse, and my father was an engineer, but I just think they didn’t know how to fit in. Here’s just one example: We moved into this ritzy neighborhood in suburban Seattle for a little while. We were the only renters, and somebody came by to tell us that we had to mow the lawn, that there were these rules about how short the grass had to be. My dad decided that he wasn’t ever going to mow the lawn. I just felt like we really didn’t fit in in a lot of different ways, and I was constantly in embarrassing situations because of things they did. At one point, my dad used a machete to mow or really just hack back our lawn.

Eventually, I just decided that you couldn’t die of shame and that I could do whatever I wanted to. It made me less risk-averse, and gave me this confidence that I could be myself. I think the corporate world is pretty starved for personality. The reason you have comic strips like “Dilbert” and sitcoms like “The Office” is that people just can’t be genuine human beings in a corporate environment. So if you can really be your own self, even if it’s a little bit different, I think people are really drawn to that.

Q. Did you always want to go into business?

A. I was sort of lost, because I wanted to study everything. At different points, I applied to graduate school. I got into medical school. I thought about being a writer. I thought about being an investment banker. I just didn’t know what I wanted to do with myself. I think the thing that best suits me about being a C.E.O. is that you get to exercise many different talents and wear many different hats.

Q. So how did you get into the world of tech?

A. When I was trying to write a novel, I ran out of money, and I was delivering packages on a bicycle. And I finally connected with these guys who started a software company, and almost serendipitously fell into that. I felt like they were goofy guys and that I was a goofy guy. It was just a really interesting, harrowing environment.

Q. How so?

A. I could hear them arguing in the conference room about whether I should be fired, and the C.E.O. would come out and tell me that a chain is only as strong as its weakest link, and God help you if you’re that link. I went home every night just convinced that I was the worst employee they had ever seen. It was a weird place, but it taught me to be tough, it taught me to be resourceful. I loved that job.

Q. You were one of the founders of Plumtree Software before you joined Redfin. How did that happen?

A. I met these V.C.’s and connected with Redfin, an early-stage company that had hit hard times. It was three guys in an apartment who put listings on a Web site. I was just the fourth guy in the apartment. I loved it.

Q. You now have 800 employees. Tell me about your approach to leadership today.

A. The main anxiety I have as an executive is making the shift as a start-up person to becoming an executive at a larger company. You worry that you need to change your behavior to match the new scale at the company, but you also worry that you don’t know what’s really going on, and that people are muttering, “Does Kelman have any idea how messed up this is?”

The way you find out is to have lunch with people, or go on a long car ride with them or join the running club with them. But the most important thing you can do as an executive is to just ask the most basic question, which is, “What should Redfin be doing better?” People will say, “I think it’s great.” But if you say to them, “Think about it,” and then follow up with them, you’ll hear, “Well, actually, this is really screwed up, and I think you need to fix it.”

Q. What else about your culture?

A. The main project I have at Redfin is to unite two separate cultures — real estate agents and software engineers. One of the ways we do it is by having people do “A Day in the Life” talks during our all-hands meetings, and they talk for 10 minutes about a typical day. Then you hear other people saying things like, “I had no idea how hard it is to be a real estate agent.”

Q. How do you hire? What are you looking for? What questions do you ask?

A. Mostly what I’ve learned about it is, you can’t judge a book by its cover. It’s very hard in an interview when someone talks about their work to judge them. What you want is to have them do the work. So when I interview engineers, I give them a coding problem and I ask them to work through it. When I interview a marketing person, I say, “Write a press release,” or, if you’re in P.R., “Write a pitch.” I want to see the actual quality of their work.

The other thing that I look for is people who are beasts. I was a dishwasher once and I kept falling behind with all the dishes, and this guy in the kitchen yelled at me to get me going — “You’re an animal. You’re a beast.” And I was just a very intellectual, effete kid — I was probably reading Proust at that point in my life — and that experience made me a lot grittier and tougher.

If I haven’t found evidence that someone’s ever done anything hard in their lives, then I just don’t believe they’re suddenly going to be able to jump into a phone booth, come out wearing a cape and learn how to be tough on this job. I want to know about anything you’ve done that’s hard, really hard. So I tend to focus on that.

You're the Boss Blog: Today in Small Business: Amy’s Baking, Again

You're the Boss Blog: E-Commerce Company Learns to Sell Directly on Facebook

You're the Boss Blog: This Week In Small Business: Mibblio, Kaggle and Shodogg

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

Must-Reads

Ryan Tate says you can hear the screams of crushed start-ups echo across Silicon Valley. Here are five reasons undergraduate entrepreneurship courses aren’t producing entrepreneurs. Anil Dash offers 10 rules of the Internet.

The Economy: Manufacturing Is Sexy

Retail and food service (pdf) sales for June increased slightly, and consumer prices rose 1.8 percent over last year. Tim Mullaney reports on why the economy is not yet a pretty picture, Michael Lombardi explains why a recession is inevitable within 12 months, and Fabius Maximus is confused. But American manufacturers are seeing domestic growth, industrial output rose by the most in four months, and a Penn State University professor proclaims proclaims that manufacturing is sexy again. Conditions in the New York region improved modestly, and the Philadelphia area showed solid expansion. Builder confidence increased to its highest in seven years. Ben S. Bernanke tells the world the Federal Reserve is still easing. Shawn Tully explains why the interest rate party is over. Small businesses created 45 percent of the new jobs generated in June.

Finance: $92 Quadrillion

AmeriMerchant announces a new $60 million credit line to finance small businesses, HSBC starts a $1 billion loan program for small exporters, and a Paypal glitch debits $92 quadrillion from a guy’s account. Tracy Kellaher lists four ways banks alienate small-business customers. Here are the 13 biggest Kickstarter projects ever — and where they stand now. Amrik Randhawa suggests three accounting habits to practice weekly, and a new cash-flow tool promises to help businesses improve their forecasting.

Start-Up: Mibblio, Kaggle and Shodogg

Here’s why so many start-ups have silly names, like Mibblio, Kaggle and Shodogg. A start-up wants to help freelancers earn more. Here are 16 essential skills for freelancers. Google and Blackbox, a global start-up accelerator, team up to help selected start-ups. A study reveals how to spot future entrepreneurs (hint: it’s not about the grades), and one entrepreneur makes millions doing the chores we all dread. Nathan Beckord explains how he hacked the start-up conference circuit.

People: Unlimited Vacation

Justin Fox makes the case for paying people more. Bryan Goldberg explains why seeing employees get rich is awesome. The chief technology officer and co-founder of HubSpot says employees should get unlimited vacation, and this company is advertising for a happiness engineer. A business owner offers employees the use of a financial adviser. The difference between how employees are are treated at a company can boil down to which ones have children. Victor Cheng suggests five ways to keep employees from checking out on the job. Christine Comaford shares her thoughts on using psychology to engage employees. A restaurant owner fires all of his employees by text message.

Management: Crazy, Successful People

Here are some tips for making it in the art world. Carolyn Gregoire shares the one thing that many “crazy successful people” do every morning. A Sage survey finds small-business owners continue to work longer hours and take less vacation. Srikanth An says doing foolish things with enthusiasm is one of 10 traits of a successful entrepreneur, and Valerie Balester lists seven habits of highly effective communicators. Lin DeBeaulieu shares a few fitness tips for business travelers, and Paul Mah shows how to transform your hotel room into a productive workspace. Prasad Kaipa explains to tell if you’re suffering from “Superman syndrome.” Jason Piatt suggests eight steps to improve operational processes.

Marketing: Selling in Asia

Jeff Bullas points out seven marketing trends you should not ignore. Sean D’Souza says there are three core elements of good storytelling (and says your business needs them). Sonia Simone says there are five things you can do this week to fix your marketing. Craig Briggs has 12 answers to help Western marketers sell in Asia. Some retailers are tracking their shoppers’ cell phones, and research finds that mobile accounts for 85 percent of gas and convenience store searches.

Social Media: Twitter Power

Stephanie Miles shares seven strategies for maximizing the success of your social media. This infographic reveals the marketing power of Twitter. Dave Matthews hitchhikes to his own show. Bridget Ayers wants you to implement these simple security settings for your social media activities. Becky McCray explains what to do if you hate your Web site. Andy Hayes shares three Web trends that customers (and business owners) will love.

Around The Country: Boot Camp for Women

Detroit files the largest municipal bankruptcy in American history. Moody’s downgrades Chicago’s debt. Miami is experiencing a rise in start-up activity, and Phoenix small businesses are seeing a growing economy. Angered by the Zimmerman verdict, some are calling for a boycott of Florida businesses. An entrepreneur finds a niche in the San Francisco rental market. The Community College of Philadelphia is offering free small-business training. An online event will feature a panel of women entrepreneurs who have received financing from United States Special Operations Command. American Express Open will hold a boot camp for women entrepreneurs in September.

Around The World: Hitting the (Great) Wall

The world’s largest building opens for business in China even as the country’s economic growth slows (and Paul Krugman suggests it’s about to hit the wall). Central bankers in India and Brazil tighten liquidity. The infamous Russian oligarch Sergey Veremeenko shows how the .00001 percent lives in Moscow. British retailers are coming up with creative ways to capitalize on the royal baby buzz. The Middle East tops the West in female founders of tech companies.

Red Tape: Planning for Bunny Disasters

Microsoft is backing a small-business lobby to ease immigration laws. The Feds want a disaster plan to protect magic-hat bunnies. Here’s how Hurricane Sandy affected local taxes. Richard Posner says the sequester has been a failure. The Internal Revenue Service cancels one of its furlough days. A report finds that two of every three small-business executives say they’re not ready for the Affordable Care Act. Still, the new law is bringing good news about insurance premiums. Hamilton Nolan reports that part-time is the new full-time, but Matthew Yglesias says “Obamacare” is not to blame. Privacy fears over the legislation are looming as agencies begin to link up. More doctors are bailing out on their practices.

Technology: Five Million Smartwatches

A research firm says $2.1 trillion will go into information technology spending in 2013. Paid apps are on the decline. Five million smartwatches are expected to ship in 2014. Ramon Ray has 10 tips for staying safe and virus free. New Mac malware is confusing users. Here are the eight best apps for team collaboration. Samsung continues to dominate Android. Microsoft’s introduction of the Surface was “a disaster,” but Tony Bradley says the device can help small businesses reduce tech costs. Sameer Doshi, who is blind, shows how he uses a computer. Researchers have developed a phone that can be recharged with urine.

Tweet Of The Week

?@SalesLeaderTodd – Is there a silver bullet for sales? Nope. If you have forgotten the basics get reacquainted and sell more.

The Week’s Best Quotes

Seth Godin believes more people are marketing badly: “The cure? Notice what is working in the real world and try to figure out why. Apply it to your work. Repeat. Learn to see, to discern the difference between good and bad, between useful and merely comfortable.”

Adrienne Asselmeier says failure really is an option: “Instead of proclaiming that you’re not afraid to fail, it’s important to contemplate challenges you may face, how you will handle them, and what you will do if ultimately you do fail. If you’re prepared for failure as an option, then you won’t end up in the gutter because you will be vigilant and flexible while still working toward your business goals.”

This Week’s Question: Are you prepared to fail?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

You're the Boss Blog: When the Customer Is Not Right

An owner’s dispatches from the front lines.

I have a friend who has an 18-year-old son. He is a big kid, with a friendly disposition and a kind and respectful demeanor. He has a very good part-time job at a respected restaurant in an affluent suburb of Chicago. He works at the carryout counter where he reviews customer orders, asks the customers if there is anything else he can get for them, and then asks if they need help carrying their food to their cars. He has worked there for more than a year, and I’m sure the training and support he has received will serve him well in future jobs.

Recently, I happened to ask his mother how the job was going, and she gave me a disappointing report. Last week, she said, a customer came in to pick up an order, looked at her son and asked him to say, “What’s happening!”

Did I mention that the young man is African-American? And for those too young to remember, there was a well known character on a 1970s sitcom called “What’s happening,” who was black and obese, wore a red beret and suspenders, and would go around saying, “What’s happening!” His name was Rerun, and he was played by an actor named Fred Berry.

Now some of you may think, “What’s the big deal?” — but I hope not many. To most people, this is offensive, and whether you consider it stereotyping, ignorance or racism doesn’t matter. What does matter is that this teenager went home, related the story to his mother and cried. He doesn’t understand why someone would ask him to do that, as if he is there for their amusement.

But here is the worst part, the part that makes me sick as a boss, as a father and as a friend. He felt obligated to say the line, because he was trained to take care of customers, to do whatever he has to do. His mother told him that he should have said, “I’m not really comfortable with that.” And that is certainly a better answer than I came up with. But her son is not sure what the company would think of that response.

And I understand why he feels that way — even though I happen to know the owner of the company, and I am pretty sure he would be horrified to hear the story. I believe the owner would give him advice similar to his mother’s.

This is not the only uncomfortable situation he encounters. His mother tells me that about once a week, after he reviews an order with a customer in his charming and pleasant manner, and leaves the room (but remains within earshot), a white customer will say to the white cashier something like, “He’s so nice! I didn’t expect that.”

I’m not sure what’s worse, thinking it or saying it. But I’m very sure the cashier is uncomfortable, and I’m pretty sure these customers are clueless about what they are doing. Granted, no one is getting shot, pulled over or accused of a crime, but there is damage done. I asked his mother what she says to him when this happens? She said she tells him that there is racism in the world and that it will always be there. I cringed. I asked if she was sure it was racism and not ignorance. She said it really didn’t matter — it hurts either way. She said that for the first 14 years she did say it was ignorance, but at some point she got tired of defending ignorance and painting a rosy view of her world. It gave me a different perspective.

As a boss, I believe I have a responsibility to make sure my employees understand the difference between dealing with an angry customer and dealing with abusive behavior — or perhaps in this case, ignorant and rude customers. The white cashier could ask “Why would you be surprised?” This might actually do the customer a favor. As for the “what’s happening?” customer, I’m sure that he’ll be back, and I’m sure he will do it again — because he probably thinks he’s being funny and friendly. I am hoping my friend’s son will muster the nerve to say, “No, I’d rather not.” I think he needs to speak with his boss.

What would you tell your employee?

Jay Goltz owns five small businesses in Chicago.

Strategies: If You’re a Bond Investor, Beware of the Seesaw

THE Securities and Exchange Commission issues frequent bulletins about what it calls “investment frauds and scams” — a frightening taxonomy of plots and stratagems aimed at separating investors from their money.

The agency’s alerts range from warnings of Madoff-style Ponzi schemes to “pump and dump” operations intended to temporarily inflate a stock price. They also include cautionary notes about polite offers of assistance from predators posing as government regulators.

Lately, though, the S.E.C. has been giving a warning of a different sort. Bearing the general title “Interest Rate Risk,” this latest bulletin is a cry for understanding. It’s about bonds, and for most people, the subject is confounding.

The problem isn’t a new scam but a lack of knowledge about how bonds work, which can be dangerous in a time of rising interest rates. In its bulletin, the agency points out that investors need to understand that when rates rise, bond prices generally fall. This inverse relationship is a fact of life in the bond market. Like gravity in the physical world, it’s constant, powerful and important.

But outside trading floors, business schools, banks and brokerage firms, bond dynamics are fairly obscure, surveys find. That’s troubling in a time like this, said Lori Schock, director of the agency’s Office of Investor Education and Advocacy. “We’re not predicting what’s going to happen to interest rates or when,” she said, “but we do know that rates can’t go much lower. And we know that they can go a lot higher.”

If interest rates do go higher, most people don’t understand how that will affect bonds. A 2012 financial literacy survey by the Finra Investor Education Foundation asked this question: “If interest rates rise, what will typically happen to bond prices?” Prices will fall, but only 28 percent of adult Americans in the survey answered correctly. Finra ran the same survey in 2009 and got the same results.

The Finra survey found that financial literacy levels were generally very low. On its Web site, it offers a five-question quiz, with questions drawn from the survey — none requiring computations, just an understanding of basic concepts. Only 14 percent get them all right, it says. (The average number of correct answers is between 2 and 3.)

As far as bonds go, Ms. Schock said, one way to visualize the relationship of interest rates and prices is to think of what she calls “a teeter-totter.” She’s from Indiana. In Queens, where I come from, we call it a seesaw. Whatever you call it in your playground, imagine interest rates sitting on one side of a plank and bond prices clinging to the other. When one side rises, the other falls.

That’s just the way seesaws work, and it may be enough explanation. But suppose you want to go a little deeper: Why do interest rates and bond prices move like this?

Here’s one way to understand it: When you buy a fixed-rate bond, you are making a loan. In return, you get your money back, plus interest. When market interest rates rise, the bond drops in value. That’s because, under current conditions, anyone making the same loan will expect more interest than you’ve gotten. If you want to trade the old bond for a new one, the old one will have less value. And when something sold in the marketplace has less value, its price usually falls.

There are exceptions to every rule, of course. If the bond’s interest rate isn’t fixed, and instead readjusts as market rates change, the seesaw analogy doesn’t hold. And the prices of different kinds of bonds shift differently. But the seesaw captures the basic idea.

It’s important right now because interest rates have risen since the spring, and, therefore, prices have fallen. If you don’t understand the relationship between prices and rates (often called yields) you could hurt yourself “by reaching for yield, buying bonds that you think are going to pay you more interest, only to see rates go up further, so the value of your bonds will fall,” Ms. Schock said.

Many people are in danger of getting hurt this way. “We’re concerned that many people might mistakenly think that there’s safety in investing in bonds,” she said, “when there’s actually a fairly good chance of running into trouble with interest rate risk now.”

EVEN Treasury bonds are affected by interest rate risk, although the federal government backs these bonds and will pay all the principal and interest if you hold them to maturity. Such high-quality bonds are safe in many ways, especially in comparison with other assets.

Bond prices are generally less volatile than stock prices, and a major bond market decline is likely to be much less severe than a major fall in the stock market. Bonds can provide steady income and — whether held individually or in a mutual fund — can play an important role in a diversified portfolio, buffering against stock fluctuations.

But when market rates rise, you’ll run into a pricing problem if you need to sell a bond — or if you hold Treasuries in a mutual fund, where they are priced daily. All things equal, your mutual fund will fall in value as yields rise.

Interest rates on Treasuries — and a range of other bonds — have already risen sharply, and a broad consensus of market analysts says they are likely to rise further in the years ahead. Historically, rates are still relatively low, largely in response to the policies of the Federal Reserve. The Fed has been buying $85 billion of bonds a month, but is considering an end to those purchases.

Bond yields gyrated last week in response to congressional testimony by Ben S. Bernanke, the Fed chairman, who said Fed action was “by no means on a preset course.” If the economy strengthens, he said, the Fed will ease its bond-buying. That could result in higher interest rates.

If you hold your bonds until maturity — or keep them as a buffer — you may tolerate such swings. But it’s better if you understand what’s going on. Remember the seesaw: When yields rise, prices fall.

Strategies: If You’re a Bond Investor, Beware of the Seesaw

THE Securities and Exchange Commission issues frequent bulletins about what it calls “investment frauds and scams” — a frightening taxonomy of plots and stratagems aimed at separating investors from their money.

The agency’s alerts range from warnings of Madoff-style Ponzi schemes to “pump and dump” operations intended to temporarily inflate a stock price. They also include cautionary notes about polite offers of assistance from predators posing as government regulators.

Lately, though, the S.E.C. has been giving a warning of a different sort. Bearing the general title “Interest Rate Risk,” this latest bulletin is a cry for understanding. It’s about bonds, and for most people, the subject is confounding.

The problem isn’t a new scam but a lack of knowledge about how bonds work, which can be dangerous in a time of rising interest rates. In its bulletin, the agency points out that investors need to understand that when rates rise, bond prices generally fall. This inverse relationship is a fact of life in the bond market. Like gravity in the physical world, it’s constant, powerful and important.

But outside trading floors, business schools, banks and brokerage firms, bond dynamics are fairly obscure, surveys find. That’s troubling in a time like this, said Lori Schock, director of the agency’s Office of Investor Education and Advocacy. “We’re not predicting what’s going to happen to interest rates or when,” she said, “but we do know that rates can’t go much lower. And we know that they can go a lot higher.”

If interest rates do go higher, most people don’t understand how that will affect bonds. A 2012 financial literacy survey by the Finra Investor Education Foundation asked this question: “If interest rates rise, what will typically happen to bond prices?” Prices will fall, but only 28 percent of adult Americans in the survey answered correctly. Finra ran the same survey in 2009 and got the same results.

The Finra survey found that financial literacy levels were generally very low. On its Web site, it offers a five-question quiz, with questions drawn from the survey — none requiring computations, just an understanding of basic concepts. Only 14 percent get them all right, it says. (The average number of correct answers is between 2 and 3.)

As far as bonds go, Ms. Schock said, one way to visualize the relationship of interest rates and prices is to think of what she calls “a teeter-totter.” She’s from Indiana. In Queens, where I come from, we call it a seesaw. Whatever you call it in your playground, imagine interest rates sitting on one side of a plank and bond prices clinging to the other. When one side rises, the other falls.

That’s just the way seesaws work, and it may be enough explanation. But suppose you want to go a little deeper: Why do interest rates and bond prices move like this?

Here’s one way to understand it: When you buy a fixed-rate bond, you are making a loan. In return, you get your money back, plus interest. When market interest rates rise, the bond drops in value. That’s because, under current conditions, anyone making the same loan will expect more interest than you’ve gotten. If you want to trade the old bond for a new one, the old one will have less value. And when something sold in the marketplace has less value, its price usually falls.

There are exceptions to every rule, of course. If the bond’s interest rate isn’t fixed, and instead readjusts as market rates change, the seesaw analogy doesn’t hold. And the prices of different kinds of bonds shift differently. But the seesaw captures the basic idea.

It’s important right now because interest rates have risen since the spring, and, therefore, prices have fallen. If you don’t understand the relationship between prices and rates (often called yields) you could hurt yourself “by reaching for yield, buying bonds that you think are going to pay you more interest, only to see rates go up further, so the value of your bonds will fall,” Ms. Schock said.

Many people are in danger of getting hurt this way. “We’re concerned that many people might mistakenly think that there’s safety in investing in bonds,” she said, “when there’s actually a fairly good chance of running into trouble with interest rate risk now.”

EVEN Treasury bonds are affected by interest rate risk, although the federal government backs these bonds and will pay all the principal and interest if you hold them to maturity. Such high-quality bonds are safe in many ways, especially in comparison with other assets.

Bond prices are generally less volatile than stock prices, and a major bond market decline is likely to be much less severe than a major fall in the stock market. Bonds can provide steady income and — whether held individually or in a mutual fund — can play an important role in a diversified portfolio, buffering against stock fluctuations.

But when market rates rise, you’ll run into a pricing problem if you need to sell a bond — or if you hold Treasuries in a mutual fund, where they are priced daily. All things equal, your mutual fund will fall in value as yields rise.

Interest rates on Treasuries — and a range of other bonds — have already risen sharply, and a broad consensus of market analysts says they are likely to rise further in the years ahead. Historically, rates are still relatively low, largely in response to the policies of the Federal Reserve. The Fed has been buying $85 billion of bonds a month, but is considering an end to those purchases.

Bond yields gyrated last week in response to congressional testimony by Ben S. Bernanke, the Fed chairman, who said Fed action was “by no means on a preset course.” If the economy strengthens, he said, the Fed will ease its bond-buying. That could result in higher interest rates.

If you hold your bonds until maturity — or keep them as a buffer — you may tolerate such swings. But it’s better if you understand what’s going on. Remember the seesaw: When yields rise, prices fall.

You're the Boss Blog: A ‘Not-to-Do’ List for Recent College Graduates

College graduation: lofty commencement speeches are given, bright futures anticipated and, for some lucky college graduates, new jobs await. While commencement addresses may be inspiring, I wish someone would take the opportunity to deliver a more practical message to new college graduates who are about to enter the work force. It would go something like this:

“Congratulations. You’ve just earned your college degree. I’m glad to be here as the first person to speak to you as college graduates. I have good news and bad news. First, the bad news: Despite your newly obtained degree, you don’t know anything. You have no skills. If you are really lucky, you will soon land your first job. You are not entitled to that job. Quite the contrary, there are many people just like you who would love to have that job. If you get it, you should be grateful for your good fortune and make the most of it. It will be hard work, sometimes backbreaking work, and you may feel that the work is beneath you. But the reality is that nothing is beneath you, because you don’t know anything — yet.

Now, the good news: You live in the United States of America, the greatest country in the world. If you work really, really hard, if you are happy to start at the bottom and work your way up, if you are ready to grind and scratch and claw, and if you catch a bit of luck, anything is possible. Anybody can be anything in America. You just have to be willing to learn fast from those around you and work really hard.”

Unfortunately, I was not invited to deliver any commencement speeches this year. So I’m doing the next best thing and reflecting in this post on my first job. I hope that it can provide a bit of help and guidance.

I’ll start with a summary: I totally whiffed on my first job experience. When I graduated from college, I knew nothing, had no skills and was not owed anything. But that’s not how I felt at the time.

I had just graduated from the Wharton School, the country’s oldest undergraduate business school and one that consistently lands the top slot in college rankings. I studied entrepreneurial management and tried to drop out of school to start a business during the winter break of my junior year. (Thankfully, my parents forced me to stay in school.) I finished my studies early in my senior year and spent the remaining weeks waking up early to read The New York Times and The Wall Street Journal, and then using the rest of the day to consume voluminous amounts of coffee while devouring Ayn Rand’s “Atlas Shrugged.” I was biding my time until I left academia to do what I thought I was meant to do: run a business.

Like all Wharton undergraduates, I interviewed with companies that came calling on campus: investment banks, strategy consulting firms and technology companies. At the time (I graduated in 1997), there was a company called Trilogy, based in Austin, Tex., that was getting a lot of press. Trilogy had been started by Joe Liemandt, who dropped out of Stanford to start an enterprise software company that was selling multimillion dollar software applications to big companies like Boeing, Sun Microsystems and Hewlett-Packard. While the software seemed esoteric — who understands what product configuration software does and why another company would spend millions of dollars for it? — Joe’s success was tangible. He was on the covers of business magazines and was ranked as one of Fortune’s 40 richest under 40 in 2001. He was the type of entrepreneur from whom I could have learned a tremendous amount.

But I didn’t think there was anything I needed to learn.

I was recruited to Trilogy by Ajay Agarwal. Before joining Trilogy, Ajay had graduated from Stanford, then Harvard Business School and worked in strategy consulting at McKinsey & Company. Today, Ajay is a managing director at the venture capital firm Bain Capital Ventures. Ajay’s recruiting pitch was particularly compelling: come to Trilogy to work in an entrepreneurial environment with extremely smart people. The problem was that I believed I was ready to be the entrepreneur immediately.

Still, I accepted the job, and after a summer schedule meant to shed a wanderlust that I assume most college seniors have, I moved to Austin. I was paired with Jason Wesbecher, another Wharton undergraduate who had been working at Trilogy for about six months. (Today, Jason is the founder and chief executive of Handshakez in Austin.) Jason was the epitome of inherent intelligence, hard work and focus. He was driven to acquire customers for Trilogy, understanding that revenue was the lifeblood of a fast-growing start-up. At the time, I could not have been less impressed with that role.

I was ready to start a company. I felt it was my destiny to do so. It was what I had dreamed about since I was a child. In retrospect, I was terribly, utterly, naïve. Now, 16 years later, here are my reflections:

1. I knew nothing. Yes, it is true I studied business in college, and the college I went to is a good one (if you were to ask Donald Trump, it is without question the best). But there is a vast difference between studying business and doing business. Until I had actually done it, I knew nothing at all.

2. I didn’t know that I didn’t know anything. This is actually worse than not knowing anything. I thought that I had something to contribute. In fact, I thought that my presence at Trilogy was a real gift to the company. I was wrong.

3. I missed the opportunity to learn. Because I believed that I already knew everything, I missed the chance to learn from the incredibly smart people who did know something. Trilogy was an exceptionally good company at recruiting. It produced a Trilogy Mafia well before anyone talked about the Paypal Mafia. Former Trilogians have gone on to accomplish absolutely amazing things. And the people I had the chance to work with directly — Joe, Ajay, Jason and many others — were all truly extraordinary businessmen.

4. I thought I was entitled to something. Somehow, I arrived at Trilogy thinking that it was to their great benefit to have me as an employee. As a result, I thought I was entitled to the opportunity of doing something “strategic.” What I came to understand afterward was that many college graduates would have loved to have that job, and that it was my opportunity, but not my right, and certainly not something to take for granted.

5. I was confused about the meaning of hard work. I thought I should spend my time thinking big thoughts. I assumed that if I were in the office a lot, I must have been working hard. I didn’t know that I should have been doing what Jason was doing — the hard work of calling potential customers, learning about their problems and presenting our solutions. That was hard work and meaningful work. I didn’t realize it until after I had left.

My time at Trilogy was a missed opportunity. I realized it at the annual Trilogy Prom, where the entire company gathered at a luxurious location to celebrate the year’s success and to recognize extraordinary individual performance. Jason (deservedly) won a Trilogy Star Award based on his exceptional contribution to the company. As I watched him walk to the front of the room to accept his prize, I was of mixed emotion: proud of him but disappointed with myself. The experience proved to be a turning point.

After just over a year at the company, I decided to leave. Thankfully, I started to figure out what it took to achieve success. It was Jason’s focus and do-whatever-it-takes attitude that caused me to re-evaluate my own disposition. Once I did, I realized that I needed to start afresh. I looked for a small start-up where I could join on the ground floor. If I proved my mettle and the company grew, I might be able to take on more and more responsibility, learning essential skills to start my own company someday.

Next week, I’ll talk about my second job experience — what I did when I joined Callidus Software.

Bryan Burkhart is a founder of H.Bloom. You can follow him on Twitter.

You're the Boss Blog: This Week in Small Business: Firing the Founder

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You're the Boss Blog: Finding Alternatives to Building a Web Site

Generating revenue along with the buzz.

Over my last two columns, I’ve discussed how not to hire a Web developer and how to build a Website you love. But for some small businesses, there are other options — alternatives to building or refreshing a Web site.

One option is a one-page site. This is a specialty of Carbonsquare, a design shop that builds business sites of up to 10 pages using customized templates on the Weebly platform. One of Carbonsquare’s clients is a fashion-accessories retailer, Debra Wood, who has a mobile fashion boutique, DebiFashion. Ms. Wood decided a one-page site worked best for her side business. “It was so much work to constantly change my shopping-cart Web site, so for a $249 investment, I can make the changes I want and not break the bank,” she said.

For a basic 10-page site, Carbonsquare charges $549 plus a monthly hosting and maintenance fee that runs about $30. “We decided to use the Weebly system because it’s a simple drag-and-drop system,” said Christopher Rippie, founder of Carbonsquare. “We want to help our customers understand smart design. Too many people over-design their Web sites. We did not use the WordPress platform, because it takes more time to build a Web site, which drives the cost up. We are trying to eliminate the sticker shock in Web site design and give people something they can manage themselves after we build it.”

Carbonsquare does have some drawbacks. WordPress plug-ins won’t work with the Weebly platform, search-engine optimization functionality is not built in the way it is with WordPress, and if you are blogging heavily, the system has limitations. Mr. Rippie suggests building a blog in WordPress and integrating it with the Weebly Web site.

Another option is to use Tumblr, a very easy-to-use blogging platform, as your Web site. With more than 100 million bloggers, Tumblr has an active community of users who search for content based on keyword tags. This can make it easier to build an audience quickly. It allows users to post text, photos, quotes, links, music and videos from a desktop or phone and from a  browser or through e-mail. A Tumblr page works best for visual businesses, such as retail, design, food, or fashion. Some small businesses use Tumblr in addition to a WordPress blog. Tumblr allows owners to link back to e-commerce sites with coupon codes, QR codes and links to other social media accounts. Its templates are easy to use and there’s nothing to download to get started.

Diane Souter of Absolutely Fabulous Unique Gifts and Décor in Huntington Beach, Calif., uses a Tumblr page to highlight her latest products and attract a younger audience. “Tumblr is so easy to do that I could do it,” she said. “I’m able to take a photo with my iPhone and upload it to Tumblr with the hashtags and keywords, within seconds literally, and it links to my Web site.”

Ms. Souter said that while the traffic from Tumblr leads to some sales, it mainly drives buzz. “It would be great if people could click on the picture and the price comes up with the ability to make a purchase through Tumblr,” she said. That might be a way Yahoo will attempt to monetize the site, now that it has bought it for more than $1 billion.

Three months ago, Innate Family Chiropractic, based in Pasadena, Calif., started using RebelMouse to host its Web site. RebelMouse allows companies to display the latest updates on their social media accounts on the company home page; in fact, those updates can be the homepage or they can an embedded addition. Users can customize a RebelMouse site or choose from previously designed theme pages. They can also post a full-text blog post directly to RebelMouse and then add an image or a video. And they can add RSS feeds from their own blog or from other blogs they read frequently.

Paul Berry, former chief technology officer of Huffington Post, says he created RebelMouse to save small-business owners time and frustration. “We just so saw so many people struggle with their Web site almost to the point of giving up,” he said. “We knew there was a simple solution that didn’t involve developers or designers. We wanted to make people’s content shine and amplify their social media efforts.” The service costs $10 a month and integrates seamlessly with MailChimp, the e-mail service.

Innate Family Chiropractic picked RebelMouse to save time with its Web marketing and because it wanted a central place to share content on pediatric chiropractic care. The three-year-old family wellness and chiropractic center uses Twitter, Facebook, YouTube, Instagram, and Pinterest to share and generate health-related tips and articles. “I used to spend so much time educating clients and putting our content on all our social media accounts,” said Christopher Vargas, a chiropractor and owner of Innate Family. “Plugging everything into RebelMouse just made things easier.” The company pays $19.99 a month to use the service on two Web sites.

Melinda Emerson is founder and chief executive of Quintessence Multimedia, a social media strategy and content development company. You can follow her on Twitter.

This post has been revised to reflect the following correction:

Correction: June 7, 2013

A previous version of this post referred incorrectly to the Web platform Weebly.

You're the Boss Blog: This Week in Small Business: Be a Plumber

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

Must-Reads

These e-mails show how Steve Jobs won negotiations. Ezra Klein explains why we should stop celebrating our falling deficits.

Economy: Restaurants and Real Estate

Intuit’s profits rise on “small-business strength.” Research from Dell and Intel shows optimism among small businesses, but an index from Experian and Moody’s Analytics projects more struggles through the end of the year. Restaurant sales are at a high. Existing home sales are up 9.7 percent over a year ago, new home prices touch record highs and Matt Phillips says the hidden indicators on housing are buried in Home Depot’s “rock solid” earnings. But the Architecture Billings Index reverts to negative territory for the first time in nine months. Travel on all roads and streets (pdf) declined by 1.5 percent in March (compared to last March). The Federal Reserve chairman says Congress’s fiscal policy is hampering economic growth.

Management: Oh My Stars!

Here are eight ways to run a small business. Kat gives some advice for stepping up your work wardrobe, and Kimberly Crossland believes you should be working out every day. “Oh my stars!” is just one of 11 old-fashioned sayings Kristin Piombino wants to bring back. Here are a few tips for fighting small-business fraud. Betsy Berkhemer-Credaire offers ways for more women to get on corporate boards. Eric Yu provides a straightforward guide for value-based pricing. Mars Dorian shares five creative lessons he’s learned from his enemies, including: “Ask for that slap in the face.” The Blunt Bean Counter shares advice for finding a business partner. Bob Dahms explains why coming up with the right name is crucial for your business.

Employees: Groupon’s Giant Cat

A Florida business owner gives half of his company to his employees. Laura Vanderkam wonders if it is worth it to train new employees. A giant cat in a spaceship helps keep Groupon’s employees on task. Tim Berry explains how to calculate the hourly cost of an employee. SAP plans to hire a “whole bunch” of people with autism. A hairy, grown man impersonates a 2-year-old girl.

Youth: Be a Plumber

Yahoo buys Tumblr from a high school dropout and promises not to mess it up. This is how to set goals. An 18-year-old takes the science world by storm, a teenager develops a computer algorithm to diagnose leukemia and another teenager wins a fellowship to skip college and build a crowdfunding platform. Mayor Michael R. Bloomberg recommends skipping college to be a plumber. Young entrepreneurs pitch ideas to Warren Buffett and win prizes for their businesses. A bored teenage girl plays “Eruption” better than Eddie Van Halen. Here are the best commencement speeches of 2013, and Dave Kerpen advises graduates to master these 15 simple skills.

Entrepreneurs: Dig Deep

American entrepreneurship rates reach their highest levels in more than a decade according to researchers at Babson College and Baruch College. Wade Steenhoek asks if entrepreneurship can be taught. Jeff Cornwall thinks there are industries that are ripe for the “destructive, disruptive, and opportunistic work of entrepreneurs.” Barbara Corcoran prefers to see entrepreneurs dig deep into their own pockets and put some skin in the game before asking for money. Jack Dorsey of Twitter says, if you have an idea, “get it out of your head and start working on it.” Not taking risks just for the sake of taking risks is one of seven signs of a true entrepreneur, according to Steve Tobak. Charlie Osborne reveals the one mistake every entrepreneur must avoid.

Finance: The East Coast Is Riskier

Kathy Davis lists 10 ways to increase small-business profit and productivity, and here are three ways to save money for your business. The Small Business Administration starts a new program with banks to increase lending to veterans. Patrick Clark thinks it is riskier to lend to East Coast small businesses, and Ami Kassar explains why alternative lenders should set some standards. Ty Danco and Dharmesh Shah explain the hows and whys of updating angel investors. An online software service is introduced to help manage receivables. These 31 charts will restore your faith in humanity.

Social Media: Migrating From Facebook

A new study shows teenagers are migrating from Facebook to Twitter. More family farms are becoming connected through social media. Heidi Cohen shares 31 social media marketing tips. Marsha Friedman has a few strategies for building a social media audience, and this may be why social media doesn’t work for your business. Here is how to make 100 blog posts every day. Ken Mueller shares five places where you might not want to check in online. Thomas von Ahn explains how to get 58 percent of your revenue through LinkedIn groups. Here are 30 small-business champions to follow on Twitter, and these hard-to-believe “facts” really are true (according to BuzzFeed).

Sales and Marketing: Publicity Stunts

Emanuel Perdis has seven rules for coping with sales rejection. Brockwell Bone says that in tough times, small trims make more sense than cutting off all marketing. Carla Johnson describes how your content strategy can thrive when marketing and technology work together, and Ned Smith believes more small businesses are becoming tech-savvy about customer management. Here are a few examples of businesses that have pulled outrageous publicity stunts. I.B.M.’s Watson gets a job in customer service.

Online: Dissatisfied?

A survey reveals that half of small-business owners are dissatisfied with their Web presences (and this bride is probably dissatisfied with her dog). A study finds more than half of American women would rather give up sex than their mobile devices. A viral Dove campaign becomes the most watched ad ever. Google Checkout will be shutting down. This is the essential small-business Web site checklist. Amazon sets its sights on men’s grooming. The Los Angeles Times wins the headline of the week award.

Around the Country: Pickpocket-Proof Pants

A Southwest Missouri bank has set up an account so local residents can donate to storm victims in Oklahoma, and this moving video captures the moment when a survivor finds her dog. Here are other ways to help the victims. Staples increases benefits for its small-business customers. A company donates $120,000 of cloud services to St. Louis entrepreneurs. John Patrick Pullen explains why even small businesses are bigger in Texas. A Long Island entrepreneur designs pickpocket-proof pants. A bill that would give Oregon distillers more opportunities to market and sell their spirits heads to the governor’s desk. These big cities are showing strong growth, while these cities are the most stressed. The National Association of Small Business Professionals adopts tougher and more stringent approval standards for its accredited business program. There are 100 different types of fungi on your feet right now!

Around the World: Greece

Global steel output was down in April. Greece is not turning the corner. Manufacturing in China contracts. A crane accident shuts down power to a third of Vietnam, and an alarming decline of frogs and salamanders is reported.

Red Tape: Tesla Pays Off

An investigation by the House Committee on Small Business finds the General Services Administration owes more than $3 million to small businesses. The immigration bill advances in the Senate, and David Bier gives five reasons that immigration creates economic benefits. The chairwoman of a leading global payment service strongly favors guest workers. Some online businesses are frustrated with “misrepresentations” regarding the Marketplace Fairness Act. The Occupational Safety and Health Administration is offering training grants. Tesla pays off its federal loan.

Technology: The New Bad Guys

This is the Senate report on how Apple used shell companies to save $44 billion in taxes, and this is a chart of the company’s international tax structure. “Tech has replaced banking as the new corporate bad guy,” says Rana Foroohar. Dan Pallotta suggests five things Tim Cook should do, including, “Make a self-deprecating joke”: “Mock himself. People would love it. They would love him.” New software brings face detection to stores and streets for $40 a month. New 3-D printers may level the playing field for small businesses, and this video gives an example of how 3-D printing is changing the world. (NASA wants to use the technology to make pizza). Matt McGee gives a tour of the new Google Maps, and a card counter develops a Google Glass app to beat the house. Eric Knorr says you need to protect yourself from the coming cloud crackup, and Lucas Mearian suggests ways to keep the feds from snooping on your cloud data. These are some great apps to help you build your business, and these are the five most important online tools for small businesses. This is how to use your cellphone as a survival tool.

Tweet of the Week

@marshallk I have the smartest, best informed “to read” folder ever. It’s just sitting there, to be caught up with someday, being real smart! sigh…

The Week’s Best Quotes

Christian Pretorius explains how to set moods: “In the first second, that instant when you first establish eye contact before you say anything and before you break silence — give people your sincere smile.”

Elizabeth Dunn and Michael Norton reveal the secret to buying happiness: “Experiential purchases — such as trips, concerts and special meals — are more deeply connected to our sense of self, making us who we are. And while it’s anyone’s guess where the American housing market is headed, the value of experiences tends to grow over time, becoming rosier in the rearview mirror of memory.”

This Week’s Question: Are you dissatisfied with your Web presence?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

You're the Boss Blog: For Local Businesses, the Internet Threat Isn’t Just the Sales Tax

An owner’s dispatches from the front lines.

I am a third-generation retailer. My father and grandfather owned a “dime store” (Google it), and working there gave me a foundation that would allow me to become a successful entrepreneur.

Because my father was unable to teach me anything about management (only one nonfamily employee), marketing (didn’t do any) or finance, I learned most of what I know about business through trial and error. But I did learn something more valuable, something more basic from my father. What I learned has since been termed customer service, but it is something I have been giving since I was 7 years old.

My father was good at it. But in the end, it couldn’t make up for the competition from bigger stores that slowly put him, and thousands like him, out of business. All of these years later, I wonder whether specialty stores like mine — picture framing, art, a furniture store — will be put out of business by the latest version of bigger stores, the Internet retailers.

Small retailers have been under attack for 40 years. The number of local hardware stores, shoe stores and clothing stores has fallen drastically. Other small businesses — privately owned drugstores, office supply shops and small electronics stores — have all but disappeared. But some small businesses are at least holding their own, and some are even doing well. The local bakery, locksmith, jewelry store, shoe repair store, bike shop, frame shop, cleaners, hair salon, pizza parlor, tailor and florist still occupy space in strip centers across America.

Many of these businesses have a strong service component, which means they don’t really have Internet competitors. But some do. In particular, I think of the local shoe store. Customers can come into the store, try on numerous pairs of shoes and walk out empty-handed — only to go home and order online, perhaps saving sales tax and maybe a few dollars more. Great customer service may help the local retailers, but nothing is going to stop some people from stealing their time.

A recent You’re the Boss blog post on this topic got quite a response, with many people agreeing that “showrooming” is wrong. But the responses also reminded me that many people do not understand what happens on the other side of the counter. There are many misconceptions about why there are cost savings from buying on the Internet, with some of them stemming from the phrase “bricks and mortar.” There is a common assumption that local retailers charge more because they have to pay more in rent. But that generally is not the case. As a retailer who sells both on the Web and off, I can assure you that competing on the Web is not free. The cost of building and maintaining a Web site can easily eat up whatever savings you enjoy paying warehouse rent instead of retail rent.

So what are the differences? Well, the big Internet businesses are going to have lower costs because of their economies of scale. And labor can be a huge savings. Web retailers don’t have to pay commissions, and they don’t pay people to stand around and wait for the opportunity to serve customers. But much of this cost advantage can disappear if the site offers free shipping.

On the other hand, the advantage Internet retailers have enjoyed by not having to collect sales tax has been greater than many realize. If you have bought from Zappos, you may have noticed that its prices are often the same as the local shoe store’s — until the local store charges for sales tax. Forcing Internet retailers to collect this tax will do much to level the playing field. But there is another reason that some of these big companies charge less, or more accurately choose to charge less, and it is one that is poorly understood. They charge less because they are O.K. with not making a profit. Most small businesses can’t afford to do that.

Why would a company choose to operate without a profit? Because it wants to provide great value? Check. Because it wants everyone to love the brand? Check. Because it wants to gain market share? Check. Because it wants to put everyone else out of business, so that it can one day flick a switch to raise prices and make a fortune? CHECK!

Don’t believe me? Well, here is Jeff Bezos of Amazon, explaining why making a profit isn’t important. Of course, he doesn’t say he’s planning to raise prices after he puts a lot of people out of business, but let me translate something for you: Gaining market share by not taking a profit makes the most sense if you are planning to raise prices later when you have less competition.

If this competition with giant Internet companies seems like some kind of Brave New World, it’s really not. It’s pretty much the same strategy the robber barons employed in the 19th century. Today’s combination of tax avoidance and profit delay enjoyed by the Web retailers has made it very difficult for some local retailers. But is the end near?

Well, the Internet’s free ride on sales tax may be. And I believe that if that ends, the game will change. It may be too late for some, but it will make it easier for local companies to compete. Of course, there will continue to be some casualties because of inventory levels, buying power, and maybe even service. And make no mistake: not all local retailers learned the customer-service lessons my father taught. Meanwhile, some Web retailers do give great service, including Zappos.

But here is some sobering math — and perhaps the ultimate misconception. When a local store loses 10 percent of its business to Internet competition (or for any other reason), it doesn’t sound devastating. But that 10 percent decline in revenue can easily mean a 100 percent decline in profit. Here is the (simplified) math. Let’s say a store has $1 million a year in revenue and a 5 percent profit at the end of the year, or $50,000. If sales fall 10 percent, to $900,000, and the business’s cost of goods sold is 50 percent, the $100,000 drop in revenue will wipe out the entire $50,000 in profit. And if sales should fall 20 percent, the store will post a $50,000 loss. That can’t last long.

People are often surprised when a local store or restaurant that seemed busy closes down. But would an outsider even notice a 10 percent drop in business? Of course, the person paying the bills — or not paying the bills, in this case — will always notice.

So what is the moral of this story? If you are a retailer facing Internet competition, the new sales tax law — if it passes — should help, but it may not solve all of your problems. And if you are a customer, please think twice before you use the services of a local retailer without any intention of buying. We all may pay a hefty price for your “savings.” Empty storefronts don’t help a neighborhood.

Jay Goltz owns five small businesses in Chicago.

You're the Boss Blog: Torn Between Two Start-Up Communities

A social entrepreneur tries to change the way people shop.

Most start-ups fail. It’s a fact. It’s also a fact that I don’t consider failure an option. I started Fashioning Change in San Diego where I went through the Founder Institute, a tech accelerator that connected me to some of the top technology minds in San Diego and around the country. I entered the program as the only social enterprise, as one of the youngest participants and as the only woman of the 23 entrepreneurs accepted.

The program was like drinking from a fire hose. It was tough — the intensity actually brought a couple of the guys to tears and only 11 of the 23 entrants went on to graduate. But the experience was invaluable and connected me to a network of brilliant advisers and mentors that taught me what I needed to know to get Fashioning Change off the ground. Most important, I was able to form relationships with mentors, advisers, and investors through the institute, and I anticipated that once I graduated from the San Diego chapter of the Founder Institute I would continue to build the same types of relationships throughout the San Diego community.

It didn’t take me long to realize, however, that the Founder Institute was ahead of the curve when it came to women in tech and that I was going to have to look beyond San Diego to find the capital and support I needed to build Fashioning Change. Based on my experience, I suspect San Diego suffers from what Brad Feld refers to as the “patriarch problem” in his book “Startup Communities.”

“The first of the classical problems that stall progress in a start-up community is the patriarch problem. In moments of frustration, I call this the old-white-guy problem. At its core, it’s one of the key challenges of a hierarchical organizational model, one in which the most powerful people are the ones at the top of the hierarchy. In many cities, especially in the United States, these patriarchs are the old white guys who made their money many years ago but still run the show.”

As a San Diego native, I found it painful to see the patriarch problem persist at the expense of the start-up community. And because I wasn’t finding the resources we needed to help Fashioning Change grow, I began to seek them in other places — primarily in Santa Monica and the Bay Area. Last spring, I began driving up to Santa Monica two or three times a month. I instantly experienced a positive extension of the small adviser and mentor network I had met through Founder Institute in San Diego. In Santa Monica, I sensed far more excitement about helping one another and seeing the start-up ecosystem grow. Last summer, my drives to Santa Monica increased to two or three times per week.

The start-up ecosystem is exploding around Santa Monica, which is becoming known as Silicon Beach. To my surprise, I soon met several San Diego start-ups that had moved north only after they had reluctantly given up on San Diego. In Santa Monica, even as outsiders, they found mentors and resources to be far more accessible. Every trip north pushed Fashioning Change forward. I would drive up and then drive back filled with energy and information. As we executed on everything, we continued to build traction.

As time passed, I couldn’t shake the feeling that we needed a more permanent presence in Santa Monica. It’s a feeling I fought and struggled with for personal reasons. I didn’t want to turn my back on my city. Also, I’m extremely close to my family. In fact, the process of building my start-up helped me become closer to them because I gave up my cute two-bedroom apartment, sold all of my furniture, and moved back home so that I could cut down on expenses and extend the company’s runway. Living at home allowed me to spend additional time with my older brother who has a disability. On days when the start-up life seemed especially frustrating, coming home always put things into perspective.

Eventually, we decided to rent a Fashioning Change house in Santa Monica that serves as our local headquarters — although we still have an office in San Diego where our developers work. Lately, I’ve been spending a lot of time in San Diego because my co-founder, Kevin Ball, just had a beautiful baby boy. The San Diego office is in a free tech incubator downtown. Last week I was told by the leaders of the incubator that Fashioning Change has to raise more capital.

The people making this demand know nothing about our day-to-day operations. In fact, when we send them update reports, the e-mails aren’t even opened (on MailChimp, you can see who opens the e-mails and how many times). The incubator’s interest in our raising money has little to do with our needs and everything to do with it wanting to report positive news to its own donors. But at this point we have no need to raise more capital, so we’re not going to do it — even if it means we have to move out of the incubator.

We recently heard of a hub of start-ups leasing space in another San Diego downtown building that might be a better location for our San Diego operations. We checked it out, and the leasing company seemed very start-up friendly. One plus is that we would get to be around other start-ups we respect. We will probably make a decision very soon.

Any suggestions? What is your start-up community like? Does it offer the kinds of resources you need?

Adriana Herrera is chief executive of Fashioning Change. You can e-mail her at adrianah@fashioningchange.com, and you can follow her on Twitter at @Adriana_Herrera.

You're the Boss Blog: Debating the Merits of Hiring Great Recession Graduates

Avoiding the pitfalls of fast growth.

Intrigued. Inspired. Insulted. I summoned all three feelings as I glanced through the responses to my last post, “Why I Like to Hire Great Recession Graduates.” In the post, I talked about how many recent graduates — tempered by the tough economy they have experienced — are making excellent employees in fast-growth companies where a hunger to work and a will to win override the need for entitlements, praise and corner offices. In fact, I suggested, these recent graduates have adjusted to the new reality much better than some of their parents.

While my opinion has not changed, I will say this – I could hear my associates cackling and laughing as some of the angry comments came my way. No doubt the commenters said some things that my associates have long thought and always wanted to say, so they did some good for all of us.

Now, before my detractors get too carried away in delight, I want to stress a couple of things. First, I am an entrepreneur who loves a fast-growth culture where no whining is allowed, period. And as you will see below, I will offer in response a solution that can perhaps get us all to a higher level of thinking, which is my goal as a blogger.

I also want to say that while I was not insulted by the zingers that questioned my intellect and even my humanity, I was insulted for a different reason. Many entrepreneurs called and sent e-mails to say that they would have liked to back me up in the comment section — but they feared that predatory lawyers might make life difficult for them in the future. Now, that is an insult – when the people who should be protecting our right to free speech are stifling it. But perhaps that is a post for another day.

As an entrepreneur educator, I was intrigued by the stark difference in the response that came my way on Twitter and in the blog’s comment section. I got my clock cleaned in the comment section, but on Twitter I discovered that the communication gap is even greater than I suggested in my post. While the response to my post, by my informal calculation, was 90 percent negative among Times commenters, it was 80 percent positive on Twitter. What does that tell us?

Millennials are using social media for news, so it is not just social and it is not just business, as I wrote. It is a way of life for recent graduates. I would say that this generational communication divide is the widest it has been since Elvis and rock ‘n’ roll replaced Lawrence Welk and the waltz. With the Great Recession graduates getting their news on Twitter and Facebook feeds, they are very close to putting down print newspapers and magazines for good. The “cool” factor is playing big here.

As I was going down my office elevator last week, a millennial told me, “I read your blog — you rock.” I must confess at the moment I was feeling some trepidation from all of the negative comments on the blog, so I tried to suggest that she express that positive reaction with a comment of her own. She gave me kind of an OMG frown and said, “I will retweet it.” Here is what I learned from that response: a retweet with a one-liner is the new letter to the editor. Just as rock went from Elvis Presley to Alice Cooper, we may be heading for the three-second commercial. I could beg the millennials to read The New York Times on Sunday and tell them how wonderful I think it is, but it would not do any good. The times, they are a-changing.

After my elevator conversation left me feeling more like Lawrence Welk than Elvis, I was soon inspired by Karthik Selvaraj, who lives in India and graduated from Carnegie Mellon last December. Mr. Selvaraj, who had come to my post through social media powerhouse LinkedIn, sent an e-mail to say that he wanted to bring this new breed of entrepreneurship to India. Yes, while I cringed when I read many of the comments, I smiled when I saw the Twitter cheers, and I was overjoyed to see that my intended message was received by many around the world.

My proposed solution is to ask all of us to be more entrepreneurial — at all levels of a company. Yes, I could have been more reverent about the job plight of many who have struggled the last few years, but I don’t see my job as being Mr. Rogers where I tell everyone in the neighborhood how wonderful they are. My goal is to provoke thought on how entrepreneurial companies can get to the next level.

Here is the deal: the old stuff doesn’t work any more. And that’s why I want to hire people who are trying and creating new things. But I want to stress again — I am not the Grinch looking to steal cheap labor. In today’s environment, everyone is measured on our added value to the enterprise. I think the Great Recession graduates will do better than their parents on every economic level over the next 10 years because they are willing to take more risks on the front end. And for that, for being more entrepreneurial, they will be — and should be — rewarded for taking that additional risk, with both raises and equity.

Again, I am talking here about fast-growth enterprises. I’m not talking about small businesses or corporate America. There is always a place for wisdom and knowledge. But there is also a place for fresh ideas — especially when you are trying to get to the next level. Can you imagine if there had been Twitter at Woodstock?

Cliff Oxford is the founder of the Oxford Center for Entrepreneurs. You can follow him on Twitter.

You're the Boss Blog: Questioning the TOMS Shoes Model for Social Enterprise

A social entrepreneur tries to change the way people shop.

After visiting Argentina and seeing the impact of poverty on some of its children, Blake Mycoskie was inspired to create a philanthropic “for-profit business that was sustainable and not reliant on donations.” The result was Toms Shoes, which promised that for every pair of shoes it sold, it would give away another pair to a child in need.

Since its founding in 2006, Toms has given more than 2 million pairs of shoes to children living in poverty in more than 51 countries. And it now has a line of eyewear that offers the same promise. The organization Mr. Mycoskie created has become a well-known example of a company that is based on business principles but also gives back.

It is also responsible for getting lots of Gen X and Gen Y entrepreneurs to think about business in a different way and for globalizing the buy-one, give-one model that is now so popular. In fact, there are many buy-one, give-one companies that have taken inspiration from Toms, and many of them apply to sell through my company, Fashioning Change. As you can see from our roster of brands, however, only two such companies have met our criteria, which we call our Promise of 5. In fact, if Toms Shoes were to apply to Fashioning Change to sell shoes through our site — it has not done so — it would not make the cut.

It’s for this reason that we have begun to question whether the buy-one, give-one model is the best choice for aspiring social entrepreneurs.

The tenets that drive Toms Shoes’s model are spelled out on the company’s Web site.

Identify Communities That Need Shoes
Together, we find communities that will benefit most from Toms shoes due to economic, health and educational needs, and where local businesses will not be negatively affected.Give Shoes That Fit
Our Giving Partners order the sizes children in their community need. …Help Our Shoes Have a Bigger Impact 
Children who are given Toms shoes receive them as part of larger health and education programs run by our Giving Partners. …Give Children Shoes As They Grow
Children grow fast! Toms works to give shoes to children in need throughout their childhood. …Provide Feedback and Help Us Improve
We rely on our incredible Giving Partners to provide feedback on shoes’ fit and durability, the giving process and the needs of the community. …

It would be hard to fault an organization that helps people and children get the things they need to survive and even thrive. But while Toms has done an amazing job of providing children with shoes, I wonder if it couldn’t do more to solve the underlying problem that inspired Mr. Mycoskie to create Toms in the first place.

Here’s my concern: Rather than solve the root cause of why children don’t have shoes, Toms has created a business model that actually needs poor children without shoes in order to sell its shoes. Those children are an essential part of the company’s marketing.

The root cause of poverty in many developing countries is a lack of access to fair-paying, sustainable employment. Imagine the positive impact Toms could have if it were to use every decision in its supply chain to address the causes of poverty. Before writing this post, I contacted Toms to see what the company had to say about the pros and cons of the buy-one, give-one business model.

Eventually, I was connected with the company’s chief giving officer, Sebastian Fries, who acknowledged that there were aspects of the Toms approach that could still be improved. When I asked Mr. Fries whether Toms might be perpetuating the poverty of the children who get free shoes, he responded that Toms is “not in the business of poverty alleviation.”

Interestingly, though, that does seem to be the business Toms is in when it comes to selling eyewear. The company’s eyewear contributes to the employment of nurses and doctors that in turn provide sight-giving support and surgeries so that people can become employable, create a sustainable living and get themselves out of poverty. What this contrast told me is that Toms is very good at public relations and marketing and recognizes that it could be doing more.

At Fashioning Change, we understand that every decision that goes into manufacturing a product — the materials, the factory, the packaging, the method of distribution — can produce social empowerment. That’s why we work with companies who are committed to doing things right every step of the way. Based on my conversations with Toms, it is clear to me that the company has a huge opportunity to share the lessons it has learned with the many Gen X and Gen Y entrepreneurs it has inspired.

In fact, I was told that Toms is now trying a program in Ethiopia in which it manufactures in one of the communities where it gives away shoes. The company has plans to do the same in Kenya and India. I asked what percentage of Toms shoes might be made in these factories, but I was told the number was not yet known. I also asked about plans to manufacture in the United States and was told that the United States did not have factories that could fill the company’s needs. I strongly disagree, but that is a topic for another post.

In any case, I think Toms may be evolving in the right direction. What started as philanthropy may now be moving toward what I think of as a real social enterprise — a business that creates systemic solutions to social issues through the use of business principles. One of the many wonderful things about Toms and many other “do good” companies is that we all share an intention to make the world a better place. And we’re all learning as we go.

What do you think? Is the buy-one, give-one model right for social entrepreneurs?

Adriana Herrera is chief executive of Fashioning Change. You can e-mail her at adrianah@fashioningchange.com, and you can follow her on Twitter at @Adriana_Herrera.

You're the Boss Blog: This Week in Small Business: It’s On

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

The Sequester: Already Hurting?

The sequester budget cuts take hold, and Jim Tankersley says it will sock an already vulnerable economy. Scott Sumner explains how we got into this mess. Some feel the sequester cuts are already hurting small businesses. But E. Scott Adler and John Wilkerson say things are bad, but not bad enough, and another blogger says there are nine great things about the sequester. James Walter and Corey Ross say that alternative lending for small businesses will get a boost.

The Economy: Pricing Pressure

Steven Hansen says new home sales in January were “beautiful,” but the economy grew only 0.1 percent in the last quarter. Manufacturing sentiment improved in Richmond, manufacturing activity increased (but at a slower pace) in Texas, and manufacturing activity was down in Chicago. Home Depot’s co-founder says small businesses are struggling. Consumer confidence rebounds but is still at recession levels. New orders for durable goods (pdf) fell but music sales are growing for the first time since Napster. An Ernst & Young report says that pricing pressure is among the biggest risks and opportunities ahead this year.

The Fed: Currency Realignment

The Federal Reserve chairman defends the central bank’s monetary stimulus (here’s the full speech). Jonathan Spicer and Ann Saphir say Ben S. Bernanke’s challenge is to “prime markets for a policy turn.” And Paul Krugman says Mr. Bernanke is a hippie. The dollar surges, and one blogger believes there will be a realignment of the currency system. Al Bredenberg says that ending currency manipulation will help manufacturers.

Management: A New C.E.O. for Vistage

Ben Schiller thinks that Whole Foods may be a viable model for the future of capitalism. A new report advises couples to run their weddings like small businesses. Here is how an owner of a technology company powers his business (and this is how this guy became an accomplished party crasher). Vistage International names a new chief executive, and Groupon fires Andrew Mason, who writes an awesome goodbye letter. Rhonda Campbell explains why expanding your production capabilities is necessary to keep your customers satisfied. A document-filing service explains how to make mistakes intelligently. Brian Solis shares some fascinating facts on business failures. A chocolatier shares her thoughts about running a niche business. And a new study answers the big question: Do small-business owners have better sex?

Your People: Time Wasters

Yahoo’s chief tells her employees they can no longer work from home. Wellness incentives at many companies are becoming financially attractive. But if that’s not your thing, then a company sweepstakes may help your employees become healthier. Joanne Tucker explains why you need to have a written health and safety policy: “You, as the employer, have overall and final responsibility for health and safety in the workplace.” These are the 10 biggest time wasters at the office. More employees are raiding their retirement accounts. This is how one successful company hires and fires employees. A determined teenager walks 10 miles to a job interview (but another business owner hires him instead). A naked guy gets locked out of his hotel room.

Finance: Banks Are Doing Fine

The banking industry’s earnings were 19 percent higher than last year and the second-highest ever. But JPMorgan lays off 4,000 workers. January’s leasing volume was up 16 percent from a year ago. Scott Grannis says there is no shortage of money but here are a few reasons banks still aren’t lending to you. A mom-to-be lets online voters pick her baby’s name for $5,000. Capital One Financial expands its partnership with a global microlender. Gary Emmanuel says there are five reasons equity-based crowdfunding won’t work. A Kickstarter-funded film wins an Oscar. Here’s how to pitch a venture capitalist when you’re in high school. A bookkeeper gives advice for using tools (and common sense procedures) to prevent financial fraud, and Savannah Bobo says here’s what to expect if you use an automated payroll system.

Mobile: Payments Heating Up

MasterCard expands its mobile payment system. Samsung offers a new mobile payment service. Another IOS app is introduced to help small and growing businesses accept credit card transactions. Google is chipping away (pdf) at Apple’s mobile market for businesses. These are the three winners from the Mobile Premier Awards. Francisco Rosales offers compelling proof that mobile is changing business. Here are five mobile apps that can help you learn more about your customers.

Start-Up: In Prisons

Start-up mania hits California’s most notorious prison. Chris Groscurth says “competent leaders” are among the three must-haves for changing a start-up’s culture. A start-up quietly delivers smart wires to big power players. Janine Popick says these are the wrong reasons to start a business. Joshua Turner feels there is never a wrong age to start a business. Jenny Fulbright offers advice for starting and running a service business. Bruce Nussbaum says “indie capitalism” is on the rise.

Around the Country: Selling Pickles to China

An owner of a “bicycle academy” explains why he chose a Volkswagen van for his business. Michigan’s Black Chamber of Commerce celebrates Black History Month by promoting entrepreneurship. Brad Tuttle explores the “smoking hot network” for gently used cars. March will be small-business month for a bunch of northern Ohio communities. A North Carolina small business increases sales of pickles in China and becomes the Ex-Im Bank’s 500th “express insurance” customer. Macy’s and Penney are fighting over Martha Stewart.

Around the World: Another Cruise Ship

A new study from DHL finds the world today is less globally connected than it was in 2007. The British economy grew more than previously thought in 2012. In July, Honda plans to do something it hasn’t done for almost 50 years. South Koreans chow down on McDonald’s french fries, while North Korea approves 28 model hairstyles. Taiwan’s smaller start-ups realize that co-working is the way to go.  A report from Italy explains the election mess. An abandoned Russian cruise ship drifts towards Europe. China suffers a lull in manufacturing and its biggest weekly cash drain ever. The Onion warns that Chinese third-graders are falling behind American high school students in math and science.

Red Tape: Start-Up Legislation

The Internal Revenue Service reminds that it has a small-business and self-employed tax center. Nelson Nigel asks if your company is ready for government procurement: “The tendering process is something you’re almost always given only a single shot at. If you fail to make a good impression the first time around, you’ll usually have a hard time getting the government to give you another chance.” Felix Salmon says the pending Startup Act 3.0 is a no-brainer.

Marketing: Pricing Secrets

Here are the answers to questions about lead nurturing and marketing automation. Chris Penn says the secret to setting prices is to base them on value. Heidi Cohen says there are four cornerstones of content marketing, and these are the four types of content people love to share. When selling, Geoffrey James believes that you have three decision makers to win over. And Mike Major says you should avoid these four sales mistakes. David Frey lists 13 elements of effective advertising. Here’s a place to get some marketing training for the Web. Anum Hussain says there are eight big marketing campaign mistakes to stop making.

Social Media: Using YouTube

Here’s how to make the most of Twitter’s promoted advertising. Anna Farmery shares three social media tactics for business-to-business consumers, and Louise Julig explains how business-to-business marketers are benefiting from Facebook. Here are 20 examples of how some companies advertise their text-messaging campaigns through their Web sites. And this list defines all of the social media marketing acronyms. Liz Lockard says these three Google Analytics insights will matter to your business. Jim Smith shares thoughts on getting the most from YouTube. A baby tries to nap, but it’s just not happening.

Technology: A 3-D Car

Microsoft upgrades its cloud-based Office 365 for businesses while two small businesses say yes and one says no to the Microsoft Surface Pro. A brilliant machine separates Oreos. An innovative motion controller for PCs starts shipping in May. This is a practical guide to live chat implementation. Here are six utilities to supercharge your laptop. A Skype competitor hits 175 million users. Deimar Gutierrez says 3-D printing is the new hotbed of innovation and that it will affect every business. It will be used to build NASA’s spare parts and rocket engines, and a 3-D printed car is as strong as steel, half the weight, and nearing production.

Tweet of the Week

@indecision – One way to get people to care about sequestration is to get Jennifer Lawrence to say something wacky about it.

The Week’s Bests

Jennifer Warawa wants to know if you’re really listening: “Maybe there are clues about career challenges, struggles with a project or just general dissatisfaction. Maybe an e-mail was an employee’s cry for help and because you only had time to gloss over it, you missed their message all together. It’s no wonder so many people today feel disconnected or unheard – most people don’t have time (or make time) to listen.”

Glenn Muske says that you have a secret advantage to use in battle against huge marketing budgets. “Small-business owners develop deep connections with their customers. Those connections arise from close interactions. In such an interaction, the owners can identify the specific problems the customer is trying to solve. They can find the unfilled niche and learn how to attract an audience.”

This Week’s Question: Do you let employees work from home?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.