GoCardless tries to disrupt the credit card industry
For small business owners, frustration with credit card companies is nothing new.
“You are a slave to the lender,” said Doris McMillon, owner of a communications consulting business, in a recent Reuters article. “What some of these banks have done to small business owners is unconscionable.”
Luckily for entrepreneurs like McMillon, one UK based startup, fresh with $1.5 million in venture capital, is trying to shake up the credit card industry. GoCardless is building a way for UK businesses to cut out the credit card middleman, and instead allow customers and businesses to deal directly with banks by tapping into banks’ APIs, which were previously reserved only for larger companies and organizations, reports Wired.
GoCardless joins the ranks of companies, like Square and Dwolla, that are trying to challenge and out-innovate traditional payment/credit companies like Visa, Mastercard and even PayPal, which was acquired by eBay in 2002. With the ubiquity of mobile devices, and new technologies like the Square payment system, the credit/debit payment space seems wide open and ripe for innovation.
“As a merchant, card companies are a rip-off and the application process is eye-wateringly complex,” said Matt Robinson, founder of GoCardless in an interview with Wired. “We charge 1 percent per transaction — a step-change cheaper than alternatives. We can do this and still have attractive economics because we’re able to cut out the cost and complexity of the card networks.”
To read the full Q & A with GoCardless founder Matt Robinson, click over to Wired.
NPR looks at crowdfunded athletes
The big business of sports may have a new challenger. Endorsement deals, giant salaries, big name sponsorships — this is what we’ve come to expect when we watch our favorite teams compete at their huge stadiums broadcast on major television networks. But what about the lesser-known, lesser-viewed sports? And the athletes who don’t have broad appeal and access to these sorts of lucrative deals? How do they support their athletic hopes?
That’s the subject of a Mike Pesca’s report on NPR’s Morning Edition: Olympic Runners Find Unique Ways To Raise Funds. A few athletes are changing the way they get paid to compete. For Anthony Famiglietti, a steeplechase runner, the reason for looking for alternative sponsorships was fairly simple. None of the shoes produced by shoe companies willing to sponsor him fit comfortably. He literally could not compete in their products. So he tapped into the crowd, raising smaller amounts of money and offering advertising space on his running uniform to bidders.
Nick Symmonds, an 800 meter runner, also tried an alternative sponsorship idea: auctioning a sponsorship placement in the form of a temporary tattoo he applied before a race.
It’s not hard to imagine a day when even more athletes get the seed funding they need to compete from the crowd. And, yes, now even a Kickstarter for athletes seems possible too.
Photo Credit: Runners start during a men’s 100m heat at the BUCS Outdoor Athletics Championships at the Olympic Stadium in London May 4, 2012. REUTERS/Toby Melville
Looking at the new crowdfunders and the JOBS Act
The crowdsourcing site Kickstarter just turned three years old, and the New York Times has a nice profile that explores how the company has evolved and how its changed the way entrepreneurs, artists, and anyone else with an idea can raise capital online.
Much as the introduction of cheap Web services lowered the barrier to entry for people seeking to create a start-up, and as offshore manufacturing gave entrepreneurs a chance to make products without having to build a factory, Kickstarter offers budding entrepreneurs a way to float ideas and see if there’s a market for them before they trade ownership of their company for money from venture capitalists.
Tapping into the wisdom of the crowd is nothing new. And now that Kickstarter has beaten the path, there are a few similar, and niche-focused, alternatives to Kickstarter. One interesting development to consider, though, when thinking about the online fundraising space, is the Jumpstart Our Business Startups Act, also known as the JOBS Act. As Talking Points Memo reports:
Kickstarter and other crowdfunding websites are also facing something of a watershed moment in the wake of passage of new bipartisan legislation, the JOBS Act, that would specifically allow for private startup companies to solicit investors with stock options offered online, something previously not allowed under Securities and Exchange Commission regulations.
One of those companies that hopes to capitalize on this new opportunity is Return on Change, which recently launched. The mission, according to their website, “is to provide an online medium by which start-up companies and bright entrepreneurs will be able to pool capital through crowdsourcing, while creating a community of advice and collaboration.”
Understandably, opening up crowdsourced investing opportunities online has some concerned. The SEC is still figuring out how to implement the JOBS ACT, but once the details are finalized we can expect to see even more companies like Kickstarter and Return on Change, maybe even a crowdfunding startup that is ITSELF crowdfunded.
Image: REUTERS/Kacper Pempel
Q & A with MycroBurst co-founder Joe Witte
Joe Witte is the co-founder and Executive Vice President at MycroBurst, a crowdsourcing site for companies and individuals who want custom logos and designs. Reuters Small Business interviewed Witte about building a tech startup and how Mycroburst balances work with clients and designers.
First off, can you briefly describe MycroBurst? How it works, etc.
I’ve always described MycroBurst as an eBay for design services. We have a community of more than 35k designers representing more than 100 countries. They participate in design contests for our customers (aka Project Holders), who require anything from a brochure, postcard, website or logo design. What makes our marketplace so powerful, is that a Project Holder will typically receive dozens, and typically more than 100 design concepts from our design community to choose from. And that’s in one week. Our platform makes it easy to communicate with all the designers, and easy to review the concepts side by side.
Where did the idea come from?
Previously, we had a design team that provided services to our clients via online transactions. Many of our designers were leaving in order to freelance for sites like eLance. And after seeing this model work for other crowdsourcing sites, we felt that this was where the future was with sourcing design services. After we shifted in 2009, it was apparent that everyone was happier. Our designers had freedom, and our clients received far greater choice, and flexibility in a faster delivery method.
MycroBurst relies on a crowdsourcing model that actually helps pool talent for clients. Are there any other sites that you think are operating a similar model (not necessarily with design), and how has that affected MycroBurst?
We are actually a member of a “Crowdsortium” which had more than 100 crowdsourcing companies such as UTest, CrowdFlower, and GeniusRocket. Some of the other services that are crowdsourced include videos, website/application testing, content writing, labeling, research, translation, and the list goes on.
I think it a little strange Designcrowd & 99Designs is not mentioned like his competitor. Those are what students at my university use. I’ll check MycroBurst.
Q & A: Starting a Distillery
Brothers Will and Dave Willis launched the Boston-based craft distillery Bully Boy in 2011. It’s the first distillery in Boston since prohibition and one of many new small batch distilleries that have sprang up across the U.S. in the last few years. Reuters Small Business interviewed Dave Willis over email about launching Bully Boy and what he’s learned along the way.
How long did it take to go from deciding to start a distillery and actually distilling? And what were the biggest obstacles? Funding? Licensing?
Moving from the idea of a distillery to actually distilling took about a year and a half. Nothing about the process was easy. We knew we wanted to be in Boston, so one of the biggest challenges was finding suitable manufacturing space. We need fifteen-foot ceilings for our still, concrete floors, and either a loading dock or bay doors. Most of the industrial space in Boston is either way too big, or small, cramped, and raw. Funding the operation wasn’t easy either. We started looking for capital in 2010. The economy was improving, but there still wasn’t much appetite for risk, and starting a distillery is very risky. What’s more, the risk is difficult to assess because the banks have no point of comparison. We ended up raising cash through friends, family, and anyone who was willing to listen. Then, of course, there is the licensing component. Don’t even get me started.
So proud that this great local business is in my neighborhood – Roxbury – in Boston. Would love to see Bully Boy help make this largely empty warehouse/former light manufacturing district a home for craft distillery/microbrew/craft brewing start-ups!
How to avoid getting swindled under the JOBS Act
The new JOBS Act was aimed at making it easier for start-ups to raise cash, but critics warn the legislation makes it easier for criminals to do the same. In this Reuters TV video, Fred Katayama explains how you can avoid getting ripped off.
The JOBS Act: Washington Takes One Step Back Toward Capitalism
Read a very different take with a free-market perspective on the new JOBS Act by Ron Holland, CEO of Biologix Hair Inc.
Study: Crisis in employee retirement planning
A study from Nationwide Financial shows African American small business owners are worried about their employees’ retirement plans, but are increasingly optimistic about the economy and willing to invest more in employee benefits than other small business owners.
According to the study, small business owners say not enough of their employees have sufficiently planned for retirement and the situation has reached “crisis levels.”
“There’s a tremendous level of desperation with small business owners today,” notes Robin Wilson, CEO of Robin Wilson Home, in the below video from Reuters.
Despite the bleak situation with retirement planning and the economy, the survey found that many African American small business owners are hopeful that the economy will improve. Nearly a quarter of those African American small business owners surveyed said they would start to offer employees a 401(k) plan within the next two years, compared to 11 percent of all small business owners. Similarly, 28 percent of African American small business owners said they would add health insurance plans for their employees within the next two years, compared to 11 percent of all small business owners.
See the video below for more on how African American small business owners see the economy:
Looking at Greece’s entrepreneurs
Maybe it’s Instagram-size payouts or maybe it’s just pure desperation and a lack of good opportunities that drives someone to start a business in the middle of a recession. Either way, instead of protesting or moving away in search of work, a group of entrepreneurs in Greece are tapping into that same spirit and defying the odds to launch their own startups, NPR reports.
The Athens entrepreneurs, based around an incubator called CoLab, include at least one tech startup, BugSense, that has already raised capital from Silicon Valley. So while many tech startups, including those in Greece and those that launch during a recession, will never turn a profit, it’s worth noting that a more than few startups have successfully launched during a recession.
For perspective, here are just a few of those companies that launched during hard economic times:
GE, IBM, Microsoft, Apple. Oh and of course, Instagram.
Photo: A Greek presidential guard hoists the Greek flag in front of the Parthenon temple at the Acropolis hill in Athens October 3, 2010. REUTERS/John Kolesidis
Mr Peabody, looks like you got tipped for writing & mentioning only a handful of specific startups in Greece. As a journalist, you should have done your research better. That is in the case you care to provide your readers with a quality article that is also head and shoulders above the rest.
However, it’s just a shallow article with almost nothing to “take away”.
As one of fellow posters already mentioned, there is a good number of great startups from Greece. Here’s few: Babelverse, betcafe.com, tsoonami, etc.
Hopefully, you’ll investigate more for your next articles.
Rocco
MentorMob turns textbooks to playlists
Kris Chinosorn is addicted to online learning. But the frustration of having too many windows open while trying to source good information took its toll. His answer was to create MentorMob, a site that allows users to curate online content into step-by-step lessons on any topic.
MentorMob calls these lessons learning playlists. The playlist topics range from the New Hampshire GOP primary to how to bake sourdough bread at home.
“We’re providing the platform for sharing information, but it’s really about anything you want to learn,” says Chinosorn.
He wants MentorMob to be a good source of educational content through the playlists.
“The learner playlist sets it all up for you into a specific order into a long, deep learning process as opposed to a search to find one specific piece of information. We want to focus on that good, deep information,” says Chinosorn, co-founder and CEO of MentorMob.
The website ensures quality control through its content management teams. But playlists can also be open to the public for editing.
“We have content management teams that check out the information and work with content creators to create the best content possible,” says Chinosorn. “People get really excited not only seeing their content learned, but seeing people flock around their playlists because they are passionate about the same thing. Once these people come in and are helping each other, they get excited about seeing that mobilization around one specific playlist or subject.”
Q & A: Uncovering the hidden agenda
According to Kevin Allen, we pitch business ideas every day. But how do we ensure our pitches will be successful? Allen’s forthcoming book, The Hidden Agenda, teaches readers how to connect to their audience on an emotional level in order to win pitches. Entrepreneurial spoke with Allen about how to find and connect to what he calls the hidden agenda.
You write in your book that each of us makes a pitch every day. What do you mean by that?
Whether you’re trying to get a group of people to follow you for the first time who you’ve hired or you’re running a small company, at the end of the day there’s an organization you’re trying to reach and connect with. In business (that’s) an audience that you’re trying to get to do what you want them to do and to buy your product. So the notion of pitching, that is reaching someone and connecting with them so they will follow you is a universal thing in business we do each and every day.
What do you mean by the title of your book, Hidden Agenda?
Over the years of pitching, I realized that behind every decision is an emotional desire. People don’t buy with their heads, they buy with their hearts.
While everyone was listening for the functional stuff (in meetings), my antenna would go up and I would say I think this person is nervous or this person has an ambition. If I could connect with that in the form of what makes me special or what I believe or maybe establishing a shared ambition, I’ll connect with them and they’ll believe in my business. Once I started to codify this and use this as a process, we won much of the time.
First, it’s putting yourself in a relationship of empathy with your prospect to understand what keeps them up at night, what they aspire to, what they believe in. But that’s only half the job. The other half is reaching inside yourself, your core, to see what makes me special? Or what is it I believe or what ambition do I have? Often connecting to that hidden agenda is the magic.
One of the other elements you probably need to consider is the difference between a conversation with one or two people and talking to an audience. It’s hard to judge what a large group is thinking because we tend to think blank faces are judging us. Blank faces in groups are normal.
So reaching a group can be hard unless we understand what is going on.
We, as speakers, still tend to look for approval because we are still using normal conversational skills in front of a group. But on the whole we don’t get approval signs when we speak. So you might be thinking that you know their hidden agenda (they think you are boring) when you are interpreting the wrong signals. They are just listening. We need to re-think the audience and need to re-think how we are in front of an audience. It’s a fundamental of public speaking that tends to get missed. It seems to catch a lot of people out and during my courses you see the a-ha moment when we explore this point. So to be in front and to have trust in yourself learn how to be ease with blank faces – then you can probably see their agendas better.
John Dawson, Bath UK
