Mentors: Unrealized Weapon of an Young Entrepreneur

You need a good idea. Startup cash can make a real difference. Business experience and savvy also help, of course. But to take advantage of the most powerful weapon an entrepreneur can have, find a mentor.

A good mentor helps you think through a business idea, suggests ways to generate that startup capital and provides the experience and savvy you’re missing. You’ll get praise when you deserve it and a heads-up when trouble comes -- probably long before you would have noticed it yourself.

My grandfather who owned a memorabilia and antique shop in Vancouver, British Columbia, was a natural entrepreneur. He helped my brother Matthew and me launch our first successful venture: selling toy airplanes at a local festival when we were just seven and eight years old. With his help, we developed just the right marketing strategy -- putting on a show with the planes that created excitement and a "wow" impact. We sold out of planes in just two hours.

Our first mentor was someone whom we trusted and who cared about our success. He had the knowledge and skills to keep us focused, and he knew a small early success would spur us on to more entrepreneurial attempts. Looking back, I realize he really engineered our first foray into business to build our confidence and help us understand what it’s like to work for ourselves. Even now, nearly 30 years later, Matthew and I find ourselves remembering his advice when we’re planning or making decisions.

Although few entrepreneurs are fortunate enough to have a keen mentor in the family, it is possible to find one or two. Here are eight tips to getting the right mentor -- or group of mentors -- for you:

Determine your needs. Keeping in mind that your mentoring needs will shift as you start and build your business, take the time to determine exactly what kind of mentor you want now. Are you having trouble with the numbers, understanding your market or operations? Are you ready to ramp up production or still playing with concepts? Build a wish list for your mentor -- laying out what skills and support you need to get to the next step.

Take time to network. Networking isn't just important for finding customers. It’s also vital for finding a mentor. Who do you want helping you? Someone who sits in an office and thinks connecting with the business community means reading a couple of magazines a month? No, you want someone who’s out there, knows the market and can point you in the right direction.

Listen more, talk less. Given your youthful enthusiasm for entrepreneurship, it may be hard to stay silent. But to find a mentor, you need to listen -- a lot. Pay attention and you‘ll be able to separate the smart potential mentors from those who just use all the right words.

Be "mentorable." If you come off as someone who knows everything -- or thinks you do -- many people will back away. If you want to learn, be willing to consider ideas that may not match your expectations or opinions. Above all, don’t fall victim to your own hype. Your business may or may not have serious problems, but another viewpoint will help you sort things out.

Remain flexible. You may have mentors who stay with you over the long haul, but you will also benefit from people who provide just an afternoon of insightful ideas. If you are fortunate enough to get time with someone who is rarely available, absorb all you can and take notes. Your mentor may be skilled only in one specific area, but that’s okay. All help is good help.

Don't overlook nontraditional mentors. Some mentors may help you without their knowledge through books, seminars, speeches, videos on Ted, TV programs and the internet. My brother and I always looked to Richard Branson as one of our mentors. We don’t have to meet him in person to appreciate all he provides to entrepreneurs and others all over the world.

Thank your mentors. When people help you, intentionally or unintentionally, let them know. Mentors are not in it for the money; they just want to help others grow. Think about what you can do to let them know how much you appreciate them and their help.

Pay it forward. You may never be able to pay your mentors back, but you can recognize what they’ve done for you by becoming a mentor to others. That's one reason we started YoungEntrepreneur.com: to support those who share our dreams and goals.

The State of Venture Capital in 2012

While the venture capital industry enjoyed some notable exits in 2011, there isn't enough prosperity to get those VCs out of the investment basement in 2012. That's a trend which doesn't bode well for young companies looking for venture investments in the New Year.

On balance, the VC industry is likely to end 2011 near the bottom of a decade of lousy returns for their limited partners. And with fundamental changes in the way startups operate and finance themselves, this decade of VC investment doom has created serious questions about whether venture capital can ever rise from the ashes.

Taking the long view of VC investing, 2011 looks like it will end with at most a quarter of the level of capital invested compared to its all-time 2000 high. In 2000, total VC invested hit nearly $100 billion -- growing at an annual rate of 68 percent since 1995 -- the year that Netscape went public, according to the National Venture Capital Association.

Meanwhile, when you subtract out all the fees and expenses from the returns that VCs generate for their limited partners, what you get is a surprisingly lousy return on investment.

For the decade ending June 2011, VCs earned an average of 1.3 percent for their long-suffering investors. Compared to returns from the Dow Jones Industrial Average (4.2 percent), the Nasdaq (2.5 percent) and the S&P 500 (2.7 percent), the historical statistics do not bode well for attracting new investment.

What's more, if you look at the 10 year return of VC funds -- they typically hold onto client money that long -- you see that returns to limited partners were negative in the decade ending each quarter between June 2010 and March 2011.

The one brightish spot for VC in 2011 -- that could carry over to 2012 -- was the post-IPO returns of seven prominent venture-backed start-ups. After all, by my calculations, those seven were up 2 percent on average through December 9. But that small increase masked wide variations between winners like LinkedIn, which is up 60 percent from its IPO and Demand Media, down 54 percent from its opening.

If you happen to be working on a startup that competes in a market segment where VCs have just made big gains, then the peer VCs who missed out will be eager to invest in your company in 2012. Otherwise, you could be in for a tough sell.

Startup Mentor is a place for all the Startups to find their virtual mentors. The forum is dedicated to giving ideas to the aspiring entrepreneurs and the first generation entrepreneurs. If you fee that you can contribute to the community of entrepreneurs by providing your articles, opinions, analysis and case studies, please send an email to startupmentor@gmail.com

Starting a Business to Fund Your Startup Idea

Nate Casey and his business partners had a winning idea: a website that lets users correspond with celebrities and professional leaders they admire. They had a name for their venture--Blazetrak.com--and they had entertainment icons and moguls who were interested in participating. The only thing they lacked was money to build the site.

Failing to secure investors, Casey and partner Corey Stanford instead opened a web consulting firm, Clariwebs, with the idea that they would use the profits from that venture to fund their true passion. After more than a year of bootstrapping, they dissolved Clariwebs and launched Blazetrak (along with a third partner, Ronald Harrison), bringing in revenue from day one. Two years later, the site boasts approximately 50,000 registered users from 202 countries and features commentary from 400 celebrities and experts. We asked Casey about making the transition from Clariwebs to Blazetrak.

How much of Clariwebs' revenue did you put into Blazetrak?
It wasn't a lot of money. Because we created this culture of bootstrapping, it only ended up being $10,000 or $15,000. We were using our own internal team to do a lot of the development work on Blazetrak. There was a lot of sweat that went into it.

How much time did you spend on each business?
We were probably 70 percent on the projects for Clariwebs. In the background, we were constantly building modules for Blazetrak. As we got closer to launching and it got more exciting, the amount of time we were spending on Blazetrak increased. By the final run, we were probably at 70 or 80 percent with Blazetrak.

Did you tell clients about the new business?
We did--particularly the ones we had established strong relationships with and who had become dependent on us for making decisions about their online businesses. It's hard, because you're trying to sustain and take care of customers for one business while in the back of your mind you're thinking about raising money for something else that you feel passionate about.

Any tips on starting a business to finance a product launch?
If you're starting a company or you're doing consulting specifically to raise money for a bigger idea, you have to be 100 percent vested in and committed to why you're doing it. The company that you're creating or the consulting work that you're doing to raise funds could be a big temptation once it starts making a lot of money. You can get really complacent. When we switched over fully to Blazetrak, that's when we started getting all these calls about potential jobs that would have been great if we were still doing Clariwebs. We were making $2,000 our first month on Blazetrak and thinking, "Wow--we could have taken a $30,000 or $40,000 Clariwebs project this month."

What's the biggest downside of funding a startup this way?
It's painful to use your own money, especially when you'd rather spend it on groceries. But that's what makes it a good thing. You get really smart with how you spend it. You say, "We really need to buy this software solution." And then you say, "Is this the right one? Can we find a cheaper version? Can we build it ourselves?"

You start to do a lot of research so you can spend less money or can learn a skill that will save you money over the long term. I figured out how to do our financials for Clariwebs by reading a book on QuickBooks. I use those skills even today.

We got so much out of Clariwebs that helped us with Blazetrak. A lot of the operational stuff, the staff and the work we did morphed over to Blazetrak. The value wasn't just monetary--we gained experience and relationships, too.

Startup Mentor is a place for all the Startups to find their virtual mentors. The forum is dedicated to giving ideas to the aspiring entrepreneurs and the first generation entrepreneurs. If you fee that you can contribute to the community of entrepreneurs by providing your articles, opinions, analysis and case studies, please send an email to startupmentor@gmail.com

Why Crowdfunding is Bad for Business

Startup Mentor is a place for all the Startups to find their virtual mentors. The forum is dedicated to giving ideas to the aspiring entrepreneurs and the first generation entrepreneurs. If you fee that you can contribute to the community of entrepreneurs by providing your articles, opinions, analysis and case studies, please send an email to startupmentor@gmail.com

Homeowners use peer lending sites such as Prosper.com to pay for a new deck, and artists use Kickstarter to pay for their next project. But so far, it's been difficult for business owners to use peer lending or crowdsourcing, as it's variously known, to fund their business.

The reason is, people generally want to get a return on their investments. But federal law currently prohibits Joe Consumer from investing in a business startup. There are strict rules about who is an "accredited investor" for this type of high-risk investment. Right now you generally need at least $5 million in assets to qualify.

There's been recent legislation that aims to change the qualifications required of investors in startups. Also entrepreneurs are hopeful that the law will change. Tom Szaky from Trenton, N.J., waste-management firm TerraCycle, for instance, recently opined in the New York Times that the rules should be changed to allow crowdsource funders to invest in startups.

I'm going to say I'm against the idea. Why?

Startups don't just need money -- they need expertise. In the current scheme of things, investors often provide that expertise. They became wealthy because they know something about how to run a successful business.

But in a crowdsourced model, no one investor has substantial money in the venture. So there's no one who could insist on a board seat as part of their deal, or otherwise make an entrepreneur take their ideas seriously for how to grow the business.

That makes the startup a riskier venture, both for the investors and the entrepreneur. Maybe that entrepreneur will find mentors in other places. But nothing's compelling them to do so.

Often, connecting with angel investors or a venture capital firm brings a business owner some high-quality expertise in the deal. It's unclear if entrepreneurs would get the help they need to be successful if their funding comes from hundreds of individuals each putting up $50.

Crowdsourced funding sites thrive on successes -- being able to state the high rate of return for investors. Would a business-oriented crowdfunding site be able to make a good claim here? Perhaps, but I'm betting no.

Seven Tips for Becoming a Better Boss

Is better hiring and retention high on your to-do list this year? Many people need to do more with less nowadays. A great way to start is with bettermanagement and more effective workers.

It’s easy to see why companies would want to start building a great workplace. Where to begin can be more difficult to discern. This lack of clarity makes it tough to take focused actions that move a company forward. In some cases, it can even discourage leader if the scope and breadth seems too large to overcome.

If you’re among those aspiring to build a better workplace, even a great one, here are seven tips from the leaders of companies recognized in this year's annual Best Small Workplaces list.

1. Begin with yourself. “In order to build a great workplace, you must first build yourself by gaining a deep understanding of your strengths and weaknesses as a leader, and you must completely commit to developing yourself into the best leader and person you can be. At the same time, you must hire outstanding people who are as committed as you are to build a great workplace.” – Robert Pasin, Chief Wagon Officer, Radio Flyer

2. Flip the traditional management dynamic. “Treat every employee as a colleague, and turn the management structure upside-down. If you are hiring well, then the management of the company is there to support the talent and aspirations of your employees, and not the reverse.” – John Saaty, CEO, Decision Lens.

3. Hire the best. “Hire people smarter than you. This is the best advice my father gave me when I was starting my business, and I believe it holds true today. In today's competitive environment, your time at work will be easier and more pleasant if you are surrounded by smart people-- those who share your values, mission, and vision and like to have FUN! Talented employees will help your business to grow, and create a great place to work. Customers value knowledgeable employees -- the smarter your new hires are, the better off your business will be in the end.” -- Lauren Dixon, CEO, Dixon Schwabl

4. See employees as whole people. “Every employee has things in their life more important than work. If you fail to realize that, there will be a fundamental disconnect in your relationship with that employee. Realize it and embrace it, and you will be on the way to a mutually beneficial relationship. ” – Tim Storm, CEO & Founder, FatWallet

5. Use positive, constructive motivation. “It’s said that eight out of 10 people come to work in the morning wanting to make a difference, but by lunch it’s down to four. That’s usually a result of the environment more than anything, not just the physical but the interpersonal. Lead your employees with a clear vision, support them with adequate resources, and possibly most important – reward them for treating others with respect. Motivate everyone in a positive, constructive way, and your biggest problem will be having to build more office space sooner than you thought!” – Tim Hohmann, CEO, AutomationDirect

6. Practice accountability to your values. “Hold everyone accountable to your core beliefs and values, including you. No ‘license to kill’ is allowed no matter how much money someone brings into your business. Otherwise, a double standard develops which will derail the creation of a great workplace.” – Jim Rasche, 3EO, Kahler Slater

7. Start now. “Don’t wait till you get bigger to put in place key items, such as staff surveys, peer interviewing for hiring and clear standards of behavior [developed by staff].” – Quint Studer, CEO and founder, Studer Group

Innovation from Amazon, Starbucks and USPS

How do the big, name-brand companies stay on top? One answer is innovation. Besides acquiring smaller, innovative companies, most giant brands also put a lot of energy into research and development. So they're constantly testing out new ideas in every element of their business, from marketing strategy to products.

Here are three of latest and greatest ideas that recently caught my eye, which come courtesy of Starbucks, Amazon and UPS:

Starbucks recently opened a portable store in the Seattle area that's made from four stackable shipping containers. The store offers many possibilities. It's moveable like a food truck, but offers a different look and feel. Maybe they could plop it down in different cities, or as a test store in a prospective market. If customers don't come, they could try again a few blocks away.

At the same time, the store makes a statement about Starbucks' commitment to the environment. It's essentially a recycled store. On the exterior reads the company's motto: "regenerate, reuse, recycle, renew, reclaim." It also has a tiny footprint, under 500 square feet.

The company says it may use them in the parking lot while stores are being remodeled or constructed. What a great way to start building your audience before you open.

For its part, Amazon is testing out a new delivery method for its many packages -- PIN-based, self-service lockers they place at a nearby 7-Eleven or other 24/7 convenience store. If you're not home much, you could pop by your locker when it's convenient and keep your packages secure in the meanwhile. They're trying out these lockers in Seattle, New York and London.

UPS likes this idea, too -- they're testing "gopost" parcel lockers outside post offices in Northern Virginia. The lockers enable customers to receive high-value items such as smartphones in a secure way, then retrieve them anytime.

These news twists show how valuable it is to rethink every aspect of your business. Not all new initiatives should be about products or services. It'll be interesting to see how these innovations are received by customers.

Mark Cuban's 12 Rules for Startups

Anyone who has started a business has his or her own rules and guidelines, so I thought I would add to the memo with my own. My "rules" below aren't just for those founding the companies, but for those who are considering going to work for them, as well.

1. Don't start a company unless it's an obsession and something you love.

2. If you have an exit strategy, it's not an obsession.

3. Hire people who you think will love working there.

4. Sales Cure All. Know how your company will make money and how you will actually make sales.

5. Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but aren't as expensive to pay.

Related: Mark Cuban on Why You Should Never Listen to Your Customers

6. An espresso machine? Are you kidding me? Coffee is for closers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.

7. No offices. Open offices keep everyone in tune with what is going on and keep the energy up. If an employee is about privacy, show him or her how to use the lock on the bathroom. There is nothing private in a startup. This is also a good way to keep from hiring executives who cannot operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over a personal secretary, run away. If an exec won't go on sales calls, run away. They are empire builders and will pollute your company.

8. As far as technology, go with what you know. That is always the most inexpensive way. If you know Apple, use it. If you know Vista, ask yourself why, then use it. It's a startup so there are just a few employees. Let people use what they know.

How to Raise Money for Your Startup

Raising capital for a startup venture during these difficult economic times has been a major obstacle for many aspiring entrepreneurs. But it's not impossible.

There are several steps budding business owners can take to get in front of prospective investors and to help make sure they pony over the cash you need, says Asheesh Advani, author and co-founder of CircleLending, a peer-to-peer lending service that was acquired by Virgin Money USA in 2007. He now serves as CEO of asset management services company Covestor. Advani was a speaker at Entrepreneur's Growth Conference here on Jan. 11, 2012.Raising capital for a startup venture during these difficult economic times has been a major obstacle for many aspiring entrepreneurs. But it's not impossible.

Here are Advani's best tips for landing the money you'll need to get your business off the ground:

Know the different types of investors. There are three types of people who might invest their money in your business idea: friendly investors, hobby angels and professional investors. Friendly investors are the people you know personally, namely friends and family. Hobby angels are individual investors who are most likely professionals themselves who have some money to spare. Professional investors, of course, include venture capitalists, angels and banks. "Professional investors care most about the economics of your business," Advani says. "Whether they understand your business or not, they're required to consider your business idea, as well as countless others."

Make a list of prospects. Scour your industry and your professional network to put together a first group of people and test your business pitch, he says. If the people in this initial group appear to be interested, expand your list of prospects from there.

"When I started my businesses, I wound up raising money from 75 different investors," Advani says. "Not because I wanted to. I needed to."

He suggests keeping track of your contacts, your meetings and your goals for each of the meetings. Keep in touch with the contacts throughout the pitching process.

Set a closing date. Determine a specific, official date for when interested professional investors need to get you the money they promised -- and hold them to it. When dealing with friendly and hobby angels, Advani suggests a "rolling closing date," meaning that you'll accept the investment money as soon as they're willing to give it. Also, be sure to be clear with friendly investors about what happens if the money they invest isn't paid back on time or at all.

"These are people who are close to you, so do everything you can to maintain a good relationship," Advani says.

Use middle men carefully. Third-party groups can be great for two things, Advani says. They can help connect entrepreneurs to individual investors they didn't otherwise know. Examples include peer lending and investing sites Lending Club and Prosper.

Crowd funding sites are another option. These services -- including Pro Founder andPeerbackers -- can help entrepreneurs collect numerous investments from people via social networks.

But be careful about sharing your business idea online, Advani warns. "Before you post a profile on any of these sites, remember that everyone will know what you're planning to do," he says.

Protect Your Business from a Rogue Employee

Days before Christmas, a New York glass installer who admitted he uploaded an unfinished copy of X-Men Origins: Wolverine to the Internet, received a one-year sentence in federal prison from a U.S. District Court judge who termed his actions "extremely serious."

It's a sad story for Gilbert Sanchez, the glass installer, but what, you ask, does this have to do with my company or start-up? Let's suppose for a moment that instead of installing glass, Sanchez worked for you and, rather than uploading the movie from his home, he did so using his work computer and your company's Internet connection. This circumstance may carry implications for businesses.

Recently, a raft of lawsuits have appeared accusing thousands of individuals of illegally uploading and downloading materials in violation of U.S. copyright laws. Attorneys for film companies -- including one Los Angeles plaintiff that sued more than 5,800 individuals for downloading one particular adult film -- file many of these suits.

OK, so you probably won't see many of these films at the Academy Awards celebration in February, but the plaintiffs in these lawsuits are hell-bent on collecting settlements from a large number of individual defendants. They're in the process of issuing subpoenas to Internet service providers to obtain the name and address of individual subscribers -- including businesses -- to pursue mass settlements.

The question is, what do you do if your company is subpoenaed as a result of a mass filing? TheElectronic Frontier Foundation, a nonprofit founded in 1990 to defend digital rights, says that because these cases are unique you should immediately contact an attorney in either the state where the lawsuit was filed or in the state where your business is incorporated.

Stewart Kellar of the San Francisco-based E-ttorney at Law agrees, but says business owners slapped with a mass file-sharing lawsuit also need to have an Internet Usage/Copyright Infringement policy in place to avoid such legal actions in the first place. He says that policy "should state in no uncertain terms that the Internet is to be used for business and (maybe) personal email use only and for no other purpose."

Kellar suggests that if your business does receive a subpoena from its ISP, it should first be determined if the infringement occurred on a work computer by an employee. If so, the company can offer up the employee to the plaintiff, pay the settlement fee and seek reimbursement from the employee. Or a company can just ignore the demand letter and see if the plaintiff will proceed and make good on its threats.

"A business that provides an Internet connection to its employees or the public is itself an ISP," says Keller. "Unless it knew about the infringing activity and then induced or facilitated that infringement, contributory liability is very unlikely."

What Your Business Can Learn From Apple's Battle with Samsung?

If you haven't been paying attention to the ongoing court battle between Apple and Samsung, you're missing an epic conflict over patents and trademarks, both of which are often overlooked by entrepreneurs when attempting to launch a new product or service.

The dispute centers on Apple's claims that Samsung's products infringe upon its design patents. Per the latest in the conflict, a U.S. District judge ruled last Friday that Apple failed to meet its burden of showing a likelihood of irreparable harm in the injunction it sought against Samsung. As a result, Samsung, the world's largest consumer electronics company, now has the go ahead to continue selling its Galaxy S 4G, Infuse 4G, and Droid Charge phones and Galaxy Tab 10.1 tablet in the U.S.

It's an early Christmas gift for Samsung, but winning a battle does not the war win, according toChristopher V. Carani, a partner in the intellectual property law firm of McAndrews, Held & Malloy and chair of the American Bar Association's Design Rights Committee. Here's what Carani has to say about this seven-month-old court fight and why business owners should pay attention to future skirmishes:

Preliminary injunctions are hard to win but do have impact. Apple had an uphill battle in persuading a judge to pull Samsung's targeted products off the shelves prior to the fact-finding discovery process and full trial based on the merits of Apple's claims. In this case, even though Samsung prevailed on the preliminary injunction, the motion created delay and uncertainty in Samsung's U.S. launch.

Apple's design patents strategy proved effective. Apple's strategy of applying for multiple design patents for the iPhone enabled it to protect itself and was effective in ensnaring Samsung's tablet and smartphone products.

Prior art searches to invalidate patents are critical. When someone claims your product violates their patent, you conduct a search for "prior art" -- that is, anything proving that a product or service existed prior to a given date. Samsung's saving grace in this latest round was that its litigation team located prior art references that undermined the validity of one of Apple's iPad design patents. What Samsung discovered was a 1994 Knight-Ridder video depicting a tablet newspaper of the future, which looks very similar to the iPad and Galaxy Tab 10.1 tablet.

While Samsung doesn't have to take its products off store shelves, the judge found in Apple's favor with respect to one of Apple's iPhone design patents. As a result, Apple has an excellent chance of obtaining a large damages award for that patent infringement as well as for lost profits from Samsung's sales of the Galaxy S 4G and Infuse 4.

How to Start New Hires on the Right Track

Assessing employees starts on Day One. Your hiring process shouldn't be complete until you have a fully-oriented employee with their own development plan -- a clear plan of action that will engage and hold your new hire accountable.

Because the sooner you set expectations for your employees, the more likely you are to have a productive team that supports and grows your business. And that isn't the only benefit. There are three primary reasons to create individual development plans for managing performance. A development plan will:

1. Set expectations for performance. It gives employees clear expectations for their results. Statements in writing mean there is a greater likelihood of meeting or exceeding expectations. Having clear goals makes them more achievable.

2. Create a coaching document and put a process in place with a road map for advancement and a schedule to review progress, which holds managers accountable for providing feedback.

3. Create a benchmark that shows growth and improvement or the lack of progress against goals. This benchmark will assist you in developing your team members at all levels. Creating a record of improvement will make it easier to adjust the job fit for the employees and to make decisions in a more timely way about where you want to invest in developing employees.

Development plans show what employees can do to grow and develop, to advance, to become more valued, and to be more satisfied in their work. They also point out what kind of support and assistance they will need to get where they are going faster.

Components of the Plan
One mistake many managers make, often because they use poorly designed development plan templates, is to take on too many challenges at once. Keep the plan as simple as possible. Identify a combined total of two or three measurable objectives within the following three job-related categories:

• Focus on the employee's career growth. Examples include attending classes, seminars or workshops, or participating in on-the-job training or self-study programs (e.g., books, DVDs or web-based training).
  
• Help the employee improve personal aspects of his or her performance, behavior or conduct. Examples of task-oriented performance goals are improving computer proficiency, time management or presentation skills. Or the employee can focus on correcting behavioral problems that negatively impact group morale, job performance or job satisfaction. Examples of such goals are developing conflict resolution or stress reduction techniques and building collaborative coworker relationships. As with professional development goals, effective performance objectives are well defined, are measurable, and are clearly linked to specific job-related outcomes.
  
• Provide specific assignments to participate in or manage ongoing or future projects. When setting project-oriented goals, outline the scope of the role the employee is to play, list resources and completion time frame, and define the desired result.

Components of an Effective Objective
Objectives must be ones the employee has agreed to accomplish within a specified time. The goals should be specific and challenging but attainable. Identify everything that both the employee and manager need to provide to accomplish the goals as an objective. Each objective should have four parts:

1. State the desired achievement for task mastery or improved behavior.
2. Define the applicability of each goal to the function.
3. Specify the method of learning.
4. State the time frame for achievement.

When to Assess
Many companies tie development to performance appraisal. While it's true you need to set expectations before you can identify areas for growth, employee development is an ongoing process. Reviews should be scheduled as often as needed according to the support, advancement, and abilities of each employee.

Each job and organization will evaluate and measure its employees using a variety of tools. Some of the most common include:

• Biannual or annual performance standards/reviews/appraisals: These usually include quantitative and qualitative sections where both the employee and manager have opportunities to make remarks. They state expectations and goals. The employee's performance is measured against these goals at the end of the time period. Traditionally, these appraisals are directly tied to annual bonuses or pay increases.
  
• Budget and quota measurements: These include measuring a person's performance against budget expectations and quotas. Employees are evaluated based on how well they perform, and rewards are directly tied to performance.

Regardless of how you choose to evaluate employees, using a development plan customized for each individual will make the performance evaluation process easier and fairer and offer ongoing opportunities to provide coaching and feedback throughout the year, not just at performance review time. It also reduces the risk of surprise in the results for the employees.

The manager and employee will work on the development plan together, but the more involved the employee is in determining the areas to work on, the more committed that individual will be to accomplishing the goals. The objective is to create an environment that encourages continuous feedback from managers, which will help employees advance more quickly, achieve more, and avoid unnecessary problems and setbacks.

How Steve Jobs Saved Apple

When Steve Jobs returned to Apple in 1997, the tech company he co-founded more than two decades earlier was on the brink of failure. During the final quarter of 1996, Apple's sales plummeted by 30 percent. Microsoft was the dominant computer company in the market.

As Isaacson recalls in his biography on Jobs, a Fortune magazine story from that time said this of the company: "Apple Computer, Silicon Valley's paragon of dysfunctional management and fumbled techno-dreams, is back in crisis mode, scrambling lugubriously in slow motion to deal with imploding sales, a floundering technology strategy, and a hemorrhaging brand name."

Fresh off a partnership deal with Microsoft that injected Apple with $150 million, one of Jobs' first goals as CEO was to review the company's sprawling product line. What he found out was that Apple had been producing multiple versions of the same product to satisfy requests from retailers. For instance, the company was selling a dozen varied versions of the Macintosh computer.

Unable to explain why so many products were necessary, Jobs asked his team of top managers, "Which ones do I tell my friends to buy?" When he didn't get a simple answer, Jobs got to work reducing the number of Apple products by 70 percent. Among the casualties was the Newton digital personal assistant. Unfortunately, the cut-backs also resulted, in part, in a workforce reduction of about 3,000 employees.

"Deciding what not to do is as important as deciding what to do," Jobs says in the book. "It's true for companies, and it's true for products."

Moving forward, Jobs' strategy was to produce only four products: one desktop and one portable device aimed at both consumers and professionals. For professionals, Apple created the Power Macintosh G3 desktop and the PowerBook G3 portable computer. For consumers, there was the iMac desktop and iBook portable computer. (According to Jobs, the "i" emphasized that the devices were directly integrated with the internet.)

The move to a smaller product line and a greater focus on quality and innovation paid off. During Jobs' first fiscal year after his return, ending in September 1997, Apple lost $1.04 billion and was "90 days from being insolvent," Jobs says in the book. One year later, the company turned a $309 million profit.

Jobs' plan also laid the groundwork for Apple's continued innovation. The company introduced revolutionary products including the iPod portable digital audio player in 2001, an online marketplace called the Apple iTunes Store in 2003, the iPhone handset in 2007 and the iPad tablet computer in 2010.

RIP Steve Jobs

Entrepreneur Steve Jobs, co-founder of Apple Computer Inc., died Wednesday. He was 56.

Jobs' vision for a "computer for the rest of us" yielded a host of products and services that have revolutionized the tech industry, among numerous others. During his reign at the top of Apple, the company introduced the iPod portable digital audio player in 2001, an online marketplace called the Apple iTunes Store in 2003, the iPhone handset in 2007 and the iPad tablet computer in 2010.

While Jobs struggled with health issues including a pancreatic tumor and a liver transplant, Apple's products continued to resonate with consumers, driving mind-boggling profits for the company. Apple says it has sold more than 300 million iPods, over 100 million iPhones and more than 15 million iPad devices. The company has sold billions of songs from its iTunes Store.

Here's a collection of reactions of Jobs' death from fellow entrepreneurs, tech personalities and other notable figures:

Bill Gates, founder of Apple rival Microsoft:

"I'm truly saddened to learn of Steve Jobs' death. Melinda and I extend our sincere condolences to his family and friends, and to everyone Steve has touched through his work.

"Steve and I first met nearly 30 years ago, and have been colleagues, competitors and friends over the course of more than half our lives.

"The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come.

"For those of us lucky enough to get to work with him, it's been an insanely great honor. I will miss Steve immensely."

Guy Kawasaki, entrepreneur, venture capitalist and former Apple chief evangelist

"May Steve rest in peace. My deepest sympathy to his loved ones. No CEO has done more for his customers, employees, and shareholders than Steve.

"He changed the world -- my world, your world, the entire world. His words to live by: 'There must be a better way.'

"You changed our lives, Steve, and you showed us that there is a better way. . .we will miss you."

Mark Cuban, Internet entrepreneur and billionaire:

"He was a once-in-a-generation mind. His ability to understand and translate pop culture was second to none. He will be missed."

Google co-founder Sergey Brin:

"From the earliest days of Google, whenever Larry and I sought inspiration for vision and leadership, we needed to look no farther than Cupertino. Steve, your passion for excellence is felt by anyone who has ever touched an Apple product (including the Macbook I am writing this on right now). And I have witnessed it in person the few times we have met."

AOL co-founder Steve Case:
"I feel honored to have known Steve Jobs. He was the most innovative entrepreneur of our generation. His legacy will live on for the ages."

Apple Board of Directors:

"Steve's brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve."

U.S. President Barack Obama:

"By building one of the planet's most successful companies from his garage, he exemplified the spirit of American ingenuity. By making computers personal and putting the Internet in our pockets, he made the information revolution not only accessible, but intuitive and fun. And by turning his talents to storytelling, he has brought joy to millions of children and grownups alike. Steve was fond of saying that he lived every day like it was his last. Because he did, he transformed our lives, redefined entire industries, and achieved one of the rarest feats in human history: He changed the way each of us sees the world.

"The world has lost a visionary. And there may be no greater tribute to Steve's success than the fact that much of the world learned of his passing on a device he invented."

The overwhelming outcry of sadness, wrapped in accolades, for Jobs also flooded the Twittersphere.

Michael Dell, founder of Dell Inc.
@MichaelDell Today the world lost a visionary leader, the technology industry lost an iconic legend and I lost a friend and fellow founder. The legacy of Steve Jobs will be remembered for generations to come. My thoughts and prayers go out to his family and to the Apple team.

Richard Branson, Virgin Founder
@richardbranson RIP Steve Jobs. A truly great businessman. Inspiration to so many. A real Family man. He will be sorely missed.

Kevin Rose, founder of Digg.com
@kevinrose damn.. damn.. damn.. RIP Steve Jobs

Ben Kaufman, founder of Quirky
@benkaufman "Those who are crazy enough to think they can change the world, are the ones who do.". Thanks Steve. Your products started me on this path.

Gurbaksh Chahal, serial entrepreneur
@gchahal Thank You, Steve Jobs.

Robert Scoble, tech evangelist and blogger
@Scobleizer Rainbow over Silicon Valley. Steve Jobs RIP. @ Sunnyvale

Scott Heiferman, founder of Meetup.com
@heif Sad sad sad sad sad sad sad

Ashton Kutcher, actor, investor and entrepreneur
@aplusk We have all surfed on the wake of Steve Jobs ship. Now we must learn to sail, but we will never forget our skipper.

How to Get Funding From Friends and Family

Most entrepreneurs have learned that it's almost always quicker and easier to get cash from someone you know, rather than angel investors or professional investors (VCs). In fact, most investors "require" that you already have some investment from friends and family before they will even step up to the plate.

You see, investors invest in people, before they invest in ideas or products. Since they don't know you (yet), their first integrity check on you as a person is whether your friends and family believe in you strongly enough to give you seed money for your new idea. If they won't do it, they why would I as stranger invest in you?

Friends and family will likely not expect the same level of sophistication on the business model and financials as a professional investor, but they do expect to see certain things. Here is a summary of some key items to think about as an entrepreneur before approaching friends, family, or even fools:

1. Don't be afraid to ask, carefully
If you set around quietly waiting for someone you know to offer you money to fund a startup, you will probably have a long wait.

On the other hand, if you open every conversation with "I need money," you won't have any friends or any money. Practice your "elevator pitch," and end it by asking for the order.

2. Be upbeat and respectful
Nothing kills everyone's optimism and desire to help quicker than a negative or arrogant attitude.

If they are going to put cash into your company, chances are that they will expect to spend a fair amount of time together, either helping you or certainly discussing progress. Nobody likes a downer.

3. Be passionate about the idea
Friends and family will quickly detect your level of sincerity and thought behind the idea.

You need to convince them that you have been working on this vision for a long time, and have done the "due diligence" on all the potential knockoffs. Daydreams and "the idea of the moment" won't get much respect.

4. Demonstrate progress and your own "skin in the game"
Saying that you need money to start is not nearly as convincing as saying that you have built a prototype on your own dime, but need more to roll it out.

We all know people who can talk a good game, but never get around to building anything.

5. Ask for the minimum rather than the maximum
We would all love to have a million dollars of funding to "do it right" and build the company of our dreams. But your chances are minimal of finding someone who will give you that much to start.

Set some milestones for three or four months out, and show what you can do, then ask for more.

6. Communicate the risks, and write down the agreement
Be honest with naïve family members and friends about the inherent risks of a startup – at least 70 percent fail in the first five years.

Don't take money from family or friends who can't afford to lose it. Think hard about the consequences of a possible startup failure and the loss of their funding.

7. Show some incremental value along the way
Look for ways to get some traction with a minimal product, while you are still developing the main event.

In high technology, this is called "release early and iterate," which allows you to make corrections as you go, as well as adjust for the market changes. It also shows progress to early backers.

8. Network to build investor relationships before you ask for money
Having a real project, rather than just an idea, is a strong positive when networking for angels or VCs. Now you really have something to discuss, and real credibility as an entrepreneur.

Build the relationship first, ask for advice on a real project, then maybe money later.

9. Don't think of friends and family funding only as a last resort
Overall, don't think of friends and family funding only as a last resort. There are massive advantages, like sharing profits with friends and family, as well as the strategic credibility than can be gained from funding from someone you know, rather than from a professional investor.

I hope all of these points seem like common sense to you, and you wouldn't think of handling it any other way. Yet, I'm continually amazed at how often I am approached as a professional investor by strangers asking for a million dollars to fund an idea, without hitting even one of the above points.

We can all recount horror stories of families and friendships torn apart by money lost on someone else's speculative dream. In these cases both the entrepreneur and the funding partner are the fools. Don't be one.

Startup Mentor is a place for all the Startups to find their virtual mentors. The forum is dedicated to giving ideas to the aspiring entrepreneurs and the first generation entrepreneurs. If you fee that you can contribute to the community of entrepreneurs by providing your articles, opinions, analysis and case studies, please send an email to startupmentor@gmail.com