Jerry Kalish of Retirement Plan Blog has responded to our post that reported on a U.S. News & World Report article trumpeting the benefits of 401(k)s for the self-employed and small businesses.

Kalish urges you to consider your specific facts and circumstances (in the light of his first BIZBOX response) to determine which retirement plan is best for you, and not to rely upon blanket statements of 401(k) superiority.

We've talked about the tremendous opportunity presented by Apple's iPhone (and, soon, the T-Mobile Dream, powered by Google's Android!) for inspired entrepreneurs to design applications that can form the crux of a successful start-up. All well and good, you might say--but what makes for a successful iPhone (or smartphone) application?

An article in Forbes suggests that you go to school on Apple's putt, looking for the characteristics of the awesome applications that Apple itself has designed (Apple allows other companies to list applications in its store pending its approval, but has also designed some of its own apps, which are also for sale/download).

Where Apple doesn't distinguish itself especially, according to the article, is in sheer inventiveness: while many of its apps are far from duds, they don't particularly stand out in terms of a sheer "wow" factor from many of the apps not designed by Apple.

So what makes Apple's apps special? Unsurprisingly, the same thing that makes Apple's products special: usability; consumer-friendliness.

This is not something to be underrated. Even the savviest computer--which, frankly, is probably not a smartphone's main target demographic in the first place--values ease of use. As one senior research scientist tells Forbes, "Novelty increases people's tolerance for unusable things. As they use it and the novelty wears off, some of these usability problems will start to be more irritating."

The article points to Apple's clear visual cues informing users how to unlock their phones--that now-famous sliding bar--as a great example of how Apple makes using its phone as easy, simple, and stress-free as possible. It also mentions that on the keyboard that appears when one is typing a url into Safari, Apple's Web browser, on the iPhone, there is a ".com" option, thereby saving you four types.

It's the little things. When you're talking about something as ubiquitous in a person's day as a phone, those little things add up. Something to think about as you set about designing that killer app.

There's a wise post up at Working Smarter, the blog of business graphics software SmartDraw, about what it calls "the key employee problem": namely, what you should do if that key employee--you know him or her, the one without whom your company's trains simply could not run on time--should suddenly and without lengthy warning need to be absent for an extended period due to any of the thousand natural or artificial shocks the flesh is heir to.

...Well, what do you do? Working Smarter suggests planning for an absent-employee rainy day by keeping an accessible, central database of all relevant company information (in other words, there should not exist any company information that you or another similarly-ranked employee could obtain only by going through your key employee) as well as planning for last-minute successions beforehand. The blog also recommends having key employees who leave under more managed, if still relatively sudden, circumstances--a firing or a quitting, for example--write down exactly what they did, so that his or her replacement will have an exact idea.

All of this is solid advice. But it also obscures a more fundamental point: ideally, you do not have one crucial, all-but-indispensable employee. We made this point in this post about one entrepreneur who took a one-month vacation without sweating (except at the beach) or causing his company harm. It doesn't just go for you, the small business owner: any one of your employees should be able to take a one-month vacation without preventing the company from running just about as smoothly as ever, or at least as smoothly as could be expected when you're down one man or woman (whether they should be permitted to take month-long vacations is another matter, of course). You should not stifle your employees from being independent-minded and going beyond the contours of their given job descriptions. But neither should you find yourself relying on the extraordinary dynamism or work ethic or what-have-you of one single employee.

It's a fine line, encouraging your employees to go above and beyond the call of duty without creating a potential absent-employee catastrophe. It is the best administrators who figure out how to walk that line.

The New York Times reports on a newly successful class of small business: makers of gelato, that delicious, gourmet, and lower-fat alternative to ice cream honed by the Italians for years.

"Gelato seems to be catching on," the Times writes, "joining artisanal coffee, cheese and wine in catching the fancy of food lovers. With less than half the butterfat of regular ice cream, gelato is less fattening and healthier, and its dense, rich flavor and smooth texture can be highly addictive."

The piece cites small gelaterias in such bourgeois bohemian outposts as Waukesha, Wis., Martha's Vineyard, Mass., and Bethesda, Md. Unsurprisingly, perhaps the city hardest-hit by this trend is New York; in fact, a few months ago, New York magazine was able to conduct a taste test of no less than six gelaterias concentrated within several square blocks of Greenwich Village. (The winner, Grom, has no more than a dozen or so shops, with the only ones outside of Italy being in New York and Paris.)

There's a broader point to be taken away from the piece besides the fact that you really ought to find out where the best gelateria near you is and head on over before it gets cold out. What is gelato? Not ingredient-wise, but brand-wise? It is exotic and foreign--Mediterranean, even. It is gourmet. It is aspirational. It is expensive! It's almost like a micro-luxury--micro in the sense that, in absolute terms, a cone is not going to set you back very much; luxury in the sense that, compared to the price of a sugar cone at the local ice cream stand, it is positively the Louis Vuitton of frozen desserts.

In these small gelateria, then, we see savvy entrepreneurs taking advantage of two larger trends: the somewhat-paradoxical phenomenon that, in this sagging economy, it is the luxury brands that have thrived the most, and the hipness of ingredient-sensitive, healthy, artisanal food products.

The point is, of course gourmet gelato is on the rise right now. And, moreover, all of the things that make gelato attractive--its organic nature, its sense of being finely, personally crafted--play right into the hands of small businesses, who will always have a much easier time convincing consumers of their authenticity that big corporations.

Now, it's your turn: what other sort of product or service sits at the confluence of current consumer trends, and is there for the taking by enterprising entrepreneurs?

Rieva Lesonsky of AllBusiness has a post up--written, heroically, while she was at Wrigley Field cheering on the National League Central-leading Cubs--on how to make "fans" of your small business. This is a crucial subject: enthusiastic customers will both keep coming back, even during lean times, and will do your marketing for you--will do, in fact, your most credible marketing for you. On top of that, this is one of those rare places where small businesses actually hold the advantage over big ones.

Pay attention to her advice, kids: this is how you build fans as devout as Cubs-lovers (while hopefully maintaining a better historical record than the Cubs, who last won the World Series in 1908).

Encourage return business. Get creative. Discounts, frequent purchaser programs...offer anything you can think of to keep your customers coming back for more of whatever it is you're selling.

Offer consistently strong service... One bad customer experience can negate several past good ones. Always be on the balls of your feet, making sure your customer service is stellar.

...while also providing the occasional surprise. "Surprise is an underrated business tactic," says Lesonsky. "Used correctly, it can keep your customers coming back because they’re not met by the same old, same old every time." Throw surprises your customers' way with special promotions, small giveaways, and the like. Again: be creative.

Make it easy for customers to pass on good word of mouth. It's not enough to hang up a sign that says, "If you like our service, tell a friend; if you don't, tell us" (though you should do that too). Make telling a friend as effortless as possible. An especially effective way to do this is to develop an email list and send out missives that are then easily forwarded. Just beause viral marketing depends upon third parties organically singing your praises doesn't mean you can't give it a little push.

Check out BizBooks Friday! BizBox is hosting customer service expert and author Joseph A. Michelli on Friday. Submit a question now, and check out his answers after Friday in order to get more tips on how to produce a positive consumer experience.

Peter Bell, a general partner at Highland Capital, gives Forbes a wonderful interview on all things cloud computing. Read the whole thing.

Takeaways:
Cloud computing isn't just hype. "There will be a lot of carnage. But there will be some good companies that emerge, similar to Web 2.0. Was Web 2.0 a buzzword? Yes. But when you look at Facebook or MySpace or Gmail, there's pretty significant value there."

Your concerns are real. "If you have a cloud and it fails, there isn't anyone to call. That may be OK if you're bootstrapping your operation, because you may be able to recreate your infrastructure. But as you get into mission-critical or more established business, there will need to be multiple levels of solutions."

Start-ups should be looking to be adopted by larger platforms. "There are too many companies looking for 10% of the market. What we're looking for are a couple things. There has to be enough value in the features they offer or in their subcontractor capabilities that customers will demand those features or capabilities. If management capabilities are optimized for the cloud, then the customer will tell the likes of IBM that they need to include it."

A few months ago I blogged about trying Dun & Bradstreet’s credit building service for my small business, Cedarcrest Capital, as an experiment.

Now, three months later, my score for them: Low.

In at least three different ways they’ve failed to live up to their promise and made it impossible to recommend the service to other small business owners. First, they failed to deliver on their original promise; next, they tried a fear tactic to generate additional business; and finally, they did not follow up to satisfy a customer who expressed dissatisfaction (that would be me).

A steep price-tag – close to $600 – supposedly pays for D&B to contact your company’s creditors with a view to verifying a history of timely debt payment. I provided the maximum allowed six creditors to D&B, with up-to-date contact information.

After a month, a D&B representative reported to me their inability to reach even three of my creditors, despite the fact that I know I could reach each of them with one phone call.

Having failed to deliver on the basic promise of the service, the D&B representative proceeded to try to sell me further, more expensive, services relating to monitoring my business credit.

When I pushed back over the phone and said D&B needed do a passable job with the original task before moving on to further sales, the representative attempted to sell through fear. He suggested that my lack of D&B Score will hurt my borrowing ability, and further that I’ll need to pay them additional sums to monitor my business credit going forward.

Now, I’m not a good candidate for the “fear sell” since my business has perfect credit; maybe this will work with less credit-worthy businesses. But I have to think almost no business owner would purchase more products from a company that couldn’t do their first job correctly.

When I politely suggested as much, the D&B representative decided that arguing with me was a better tactic than promising to follow up internally and make it right.

It seems he chose wrongly.

If you haven't checked a computer over the past several days, then you may not have heard of Chrome, Google's new Web browser, which the search giant has built to compete with the big guns: The Mozilla Foundation's Firefox and, most dramatically, Microsoft's Internet Explorer. Much digital ink has been spilled over all things Chrome: its usability and accessibility, what it means for the Google-Microsoft war, and anything else conceivable. We thought we'd focus on (our corporate sister) Newsweek's take, which explores how Chrome can expand on cloud computing, as well as, in the newsweekly's words, "What Google's browser suggests about the way the search giant views the Web." It is, may we say, a way that could be particularly friendly to small businesses.

You are no doubt familiar with the concept of cloud computing, and with Google's suite of cloud computing software, from the email server Gmail to the word processor Google Docs and beyond--after all, we have not been shy about writing about cloud computing's upsides, cloud computing's downsides, cloud computing's future, and where Google stand in all of this (hint: at the forefront).

But Chrome moves Google, and cloud computing, several yards farther, if not longer. Chrome's genius, according to Newsweek, is to group Google's cloud computing software into an easy-to-use package. Chrome is a browser first; but in this aspect, it is also an operating system. In other words, its direct competitor may be Internet Explorer; but in one sense--and, down the road, certainly in an increasing sense--its looming rival is Windows.

Does this mean you should try Chrome? Well, not if you use an Apple--Chrome is only Windows-compliant for now (Google says they're working on an Apple version). And don't expect Internet Explorer to cede too much of its over-70% share of the browser market any time too soon.

That said, cloud computing is undoubtedly the way of the future. And it is also especially amenable to small businesses, in that it lets small groups of people with far-flung members create a virtual office with great ease and no overhead. Finally, as things stand now, Google appears to be taking the cloud computing lead. So it may be worth downloading Chrome and playing around with it: one day, you and your business may be using only it. We all may be using only it.

You asked, and customer service expert Michelli answered. We hope you enjoy last Friday's BizBooks conversation.

Quick sample:
Washington, D.C.: Is it easier to provide high levels of customer service when that is what your customer is paying for? i.e. luxury, high-end brands like Nordstrom, the Ritz Carlton etc.

Joseph Michelli: I think it is far more the expectation to receive great service as the price point escalates. Who expects great service at a quick "service" restaurant? But that is where the competitive advantage can take place. If great service doesn't cost more to deliver (assuming you learn how to select for service professionalism and effectively train it) then you can offer luxury service in a mid-range business. That's why I wrote the book The New Gold Standard - to offer insghts on how to bring luxury and legendary service to life in any business.

Sharon McLoone over at (BizBox sister site) washingtonpost.com has a great post up about recent advocacy steps, some timed to coincide with the political calendar, that have been taken by and on behalf of female entrepreneurs: the women who together own 10.1 million privately-held U.S. businesses, and who are demanding an equal playing field.

McLoone lists several exciting recent developments:

WIPP equality into shape! Women Impacting Public Policy (WIPP) has introduced a draft economic blueprint The paper outlines several goals in fields such as "Health Care, Procurement, Tax Reform, Access to Capital, Energy, and Telecommunications/Technology," according to WIPP President Barbara Kasoff. "These Principles will form the basis which will provide the economic stimulus that we need to grow our businesses, provide jobs, to increase GDP and unleash the full potential of women-owned businesses as well as all small businesses." According to McLoone, WIPP presented the draft at forums held at both the Democratic and Republican National Conventions. Download a copy! Or wait until Tuesday, when a final copy will be released to members of both parties at a WIPP meeting in D.C.

Happy Twentieth, Women's Business Ownership Act! This Wednesday, Sept. 10, the National Women's Business Council--the bipartisan, federally-mandated advisor to the president, Congress, and Small Business Administration--is holding a reception in the Capitol to cheer the twentieth anniversary of the landmark law's passage. The party will be followed by an open-to-all roundtable in San Francisco in November. More info here.

Onward to 2020 The National Association of Women Business Owners, the NWBC, and others have commissioned the consultants at Quantum Leaps to help come up with a "Roadmap to 2020" that will, in Quantum Leaps's words, "provide a roadmap for all of the major national women’s business organizations to commit to between 2009 and 2020, in order to strengthen the women entrepreneurial sector, and to accelerate the growth of women-owned businesses in the U.S." Basically, it will involve getting each individual advocacy group to focus on its particular area in a coordinated fashion, so that all bases are covered by those best suited to covering them. Expect to see the roadmap unveiled before the end of the year.

Sorry, we couldn't resist posting one more excerpt from last Friday's BizBooks forum with customer service expert Joseph A. Michelli. We just love the answers he gave to two questions related to how to manage employees.

Alexandria, Va.: How do you find -and keep- good employees?

Joseph Michelli: Look for people who are serving you well in your day-to day life. If they are only satisfied with their job but not truly engaged, they will be vulnerable to your passive efforts to recruit them. Take your time to select not hire them (I have a section in The New Gold Standard just about this distinction and scientific selection techniques), use structured interviews, role playing, and formal assessment of talent. Keeping them is less about compensation and instead involves helping them grow, connecting them to something larger then themselves, giving them authority and respect.

_______________________

Anonymous: Given the current economy, what words of wisdom can you offer to leaders who are confronted with making unpopular decisions that might adversely affect employee morale?

Joseph Michelli: Business owners have to take the "risk of excellence." Often that means making unpopular decisions needed to move the company forward. Generally, people object more to the way they are treated in difficult times than the change decisions themselves. Most employees understand that not every business decision will favor them but there is no excuse for treating people poorly in the process.

But don't forget to read the whole thing.

Ever wonder how much your business--or any business (your local bookstore? the bodega on the corner?)--is worth? Well, check out BizEquity, a new Website that already contains the estimated market valuations of 10 million U.S. businesses (all with under $10 million in annual revenues), and that lets you conduct a FREE custom valuation.

According to the Wall Street Journal's Independent Street blog, the site is put out by small business credit-card issuer Advanta, which hopes eventually to let small business owners to draw attention to their for-sale businesses on the site.

If you're a small business owner, the site seems and at-best really useful and at-worst still interesting way to gauge just how much, ultimately, your business is worth.

And if you're not? Go a-searching for whatever small business you're curious about. You're likely to get hooked. And it don't cost nothin'!

Two recent articles tackle one of the most ubiquitous features of the entrepreneurs' world as well as the current economy as a whole: business failure. Not to get you down, but if you're beginning a start-up, well, there's a one-third chance you won't make it two years, a one-half chance you won't make it four.

Did we say you? We meant your business. Because the one common insight between the two articles is that you should abandon the fallacy that your business's success is the be-all and end-all of your well-being, whether we are discussing your personal life or even your business career. Reaching this apparently simple conclusion can be justiably difficult: you've spent months and years pouring your time, energy, and even money into one venture, and its slipping, and...what else could possibly matter? But, of course, the answer is: everything else.

The more hard-headed of the articles appeared at Entrepreneur.com, and it makes the salient point that pulling out all the stops to prop up a failing business can harm your future business prospects.

The easy way to conceive of this involves the situation that David Cohen found himself in as his mobile social networking platform iContact faltered. Cohen decided against using his investors' cash to keep the start-up running in order to reserve the potential to tap them for future ventures. Those investors ended up recouping 80%--"that's a pretty happy outcome for a 'failed' investment," as Cohen, who lived to fight another day, put it. So did Thea Snyder, who killed her 1call4all.com start-up when it crashed amid the 2001 tech bust in such a way (without declaring bankruptcy, for example) that some investors approached her about participating in a subsequent venture.

Meanwhile, the other article, in Forbes, focuses on you--yes, you, the part of you that may know on some level that there are many start-up idea-fish in the sea but is nonetheless bummed out that your failed one failed.

Here is what you should do:
Inspire yourself. One entrepreneur used a Teddy Roosevelt speech to get himself through tough times. Shakespeare is always a good bet, too. May we suggest a group reading, with you and your partners, your "band of brothers," of the St. Crispian's Day speech from Henry V?
Take a step back and consider how lucky you are. For one entrepreneur, who survived leukemia as a child, the smallness of his failed business was particularly stark. But we are all lucky in our own ways.
Creative destruction. One guy redid his kitchen. Try it!
Meditate. Who knows? Maybe your next great idea will come to you while you are in nirvana.

And we'd add one final bit of advice: don't let failure discourage you from starting anew. If you're an entrepreneur, it means that, at some point, the notion of risking something for the chance of greater economic and personal reward was very appealing to you. While no entrepreneur should wish failure on his- or herself, there is a sense in which it needs to exist to make the rewards all the sweeter.

Among the constituents of the U.S. government, “Homeowners” and “Small Business Owners” both seem to rank highly. The words evoke virtuous Americans who watch baseball, bake apple pies, and call their mothers regularly; possibly all three at the same time.

This weekend, however, U.S. small business owners got a sense of our real place in the pecking order. Apparently, we don't rank as high as politicians' rhetoric sometimes suggests.

Yesterday, the federal government promised to spend up to $200 billion to shore up Fannie Mae and Freddie Mac, the government-sponsored entities that lower the cost of borrowing for homeowners.

Given this explicit pledge, where do small business owners rank?

The right comparison is with the Small Business Administration. Just as Fannie and Freddie's joint mission is to lower the cost of borrowing for homeowners, the SBA's stated purpose is to lower the cost of borrowing for small businesses. Like the mortgage entities, the SBA provides guarantees to private lenders, such as banks, in order to lower costs and increase liquidity in the lending market.

In 2007, the SBA cost $1.06 billion to administer, down 28%, from $1.47 billion in 2006, according to its own stats.

So, for every dollar pledged to subsidize homeowners, the U.S. government is pledging one half of one penny. Yes, we aren't talking about equal markets--but one-halfth of one penny? And dropping??

It calls to mind not apple pie and baseball, but a Dickensian street-urchin entrepreneur selling wares in the alley. “Please, sir, could you spare another ha-penny?”

Adrants reports that many small business owners are complaining that Visa is not holding up its end of a bargain it struck a few months ago with the first 20,000 small business owners to download its Facebook app. Those lucky 20k were to receive coupons worth $100 in Facebook ads. But the Facebook site's comments are loaded with angry users alleging that they haven't received these coupons.

Visa has responded to the criticism, offering a follow-up message reiterating what it takes to receive the coupon (add the app; fill out the profile; and check email inbox) and adding, "We are committed to ensuring you receive your ad credit. If you didn’t receive the email or have any problems with the redemption, please contact Facebook directly here. Facebook is managing the promotion and can offer you expert assistance. So again, our apologies for any inconvenience."

For what it's worth, the app seems cool, although one of the prime perks it uses to advertise itself is that coupon. It seems like an interesting platform for networking among entrepreneurs via Facebook.

An article in Forbes takes the Apple triumphalist route to bash Microsoft and its Zune mp3 player. We think it misses the point of the Zune, which is, as we've written in an earlier post, precisely to be the un-iPod while simultaneously providing options at least as if not more exciting than what's on offer from Apple.

The piece acknowledges some of Zune's advances, specifically its new feature allowing for personalized music recommendations and improved wifi downloading, its new colors and storage capacities, as well as its $14.99/month promotion giving Zune users a full pass to Microsoft's music store. (It might have added the Zune's extremely nifty ability to link up with other nearby Zunes and swap music with them.)

But Apple, according to the piece, is still leaving Microsoft in the dust here: "While Zune is busy building a service aimed at displacing Apple's iPod, Apple has been using the iPod as a way to suction up users into its iTunes digital media store. At $49 for an entry level Shuffle, Apple has made the entry fee for getting into the iTunes store pretty darn low--not much more than two weeks' worth of lattes." And in fact, lo and behold, on this very day Apple has released its latest, improved iTunes version (8.0, to be precise).

The article, in short, treats Microsoft like a company looking to take the number one mp3 spot from Apple. Under that premise, it is failing.

But what if Microsoft is instead just trying to build on its share a bit?

We see several advantages to such a tack:
Homefield advantage. Namely, the advantage is Apple's, since it is the company that started the mp3 player craze and is more generally focused on individual consumer products. However dominant it is in this field, it's not nearly as dominant as Microsoft is on its homefield of personal computing and business software. So, with the Zune, Microsoft can fight a clever and elegant rearguard action, hitting Apple where it hurts while not staking too much on what would be, if it were to be engaged to the maximum, a Quixotic battle.
It's good not to be the king. Microsoft is the Biggest of the Big Dogs, and that just may be its largest liability, from a brand perspective. Who wants to root for the bland, plodding, uncreative Dominant Force From Redmond when you can side with insurgent Apple, scrappy Google, or any one of the rest? But with the Zune, Microsoft gets the chance to play underdog, which could garner it great sympathy and undercut the negative brand image that it admittedly has earned over the years.
Cred with the tech community. By all accounts, the Zune/Microsoft mp3 store is at least as, and probably more, innovative than the iPod/iTunes combination. Microsoft could keep things that way and earn much-needed plaudits from the tech-savvy community, or it could blandify things, probably pick up some market share but ultimately turn the Zune into...just another bland Microsoft product. You know, like Vista.
Drafting. In a long-distance race, it is frequently wisest to run just behind your most immediate competitor, letting him or her take the wind and tire out so that you can pass them in the end. In this context--and the Forbes article actually dwells on this--you have a situation where, if iTunes continues its vast dominance and it appears as though the iPod works a little too well with it, well, you may be starting to approach antitrust concerns. "With the Zune, Microsoft continues to try to build a better music player. Apple, meanwhile, has built a digital media monopoly. Yes, Mr. Ballmer, you should be familiar with this concept," the article snarks. Perhaps Microsoft is using its experience with the good folks at the U.S. Department of Justice wisely in this instance?

Don't get us wrong. With the iPod/iTunes dominance, Apple has scored one heck of a victory, and it doesn't look to be under any sort of threat any time soon. But let's give Microsoft, which we're ordinarily not averse from disparaging, the credit it is due.

Chances are you've read your fair share of articles, blogposts, or even emails that begin with some variation of the above in the past couple months. Fact is, politics is on everyone's mind right now (and for good reason). But how should this fact be squared with that saying about politics not making for polite conversation when we're talking about cultivating a friendly, productive workplace?

Etiquette blogger Carol Bory has some advice to individuals who wish to have, as she puts it, "civil political conversations at work," from which we have extrapolated some further advice for the office administrator interested in keeping things amicable.

So you are someone who wants to have political conversations with others at work. First, don't take it for granted that you must participate in such discussion--keeping your opinions to yourself is very much an option. However, should you choose to engage, Bory says, treat your interlocutor with respect, do not automatically presume he or she agrees with you, and--perhaps counterintuitively--be firm in your beliefs ("By expressing yourself with determination and poise you will convey the strength of your convictions," Bory says. "If someone is bullying you, respond politely but firmly").

And what about setting a workplace guideline? We're no etiquette experts, but Bory for her part clearly is not averse to political conversation taking place, provided it does so within the boundaries of fairness and respect. We'd advise you to address the matter head-on--via a memo, a meeting, or a brief few words, acknowledge the heated election season, and people's interest in and potentially differing opinions about it. Outline how you expect political conversation to take place (for which, see above). And warn your employees that failure to treat others with respect denies them the right to yours.

Ultimately, political conversation is a healthy sign--you just need to make sure it is conducted in a healthy way.

Read the BizBooks conversation with Jill Lublin, the author most recently of Get Noticed...Get Referrals, here.

Let's say you're new to the business game, you've psyched yourself up, and you're ready to dive in--head-first. What next? Where do you start?

Consider organizational events. They can be the ideal places to begin making contacts because virtually everyone who attends these events is there to network and make connections. Frequently, these events have been structured to facilitate networking. Specific times have been set-aside for attendees to meet one another, interact, and make connections.

The fact that these events are networking-oriented can take the pressure off shy, uncomfortable newcomers. Since everybody has the same agenda--to connect with others--strangers will frequently approach you, introduce themselves, and engage you in conversations. When you talk with others, it breaks the tension, and makes it less frightening. You find that taking to the next person is easier and that you're more comfortable.

A dizzying number of organizations hold networking events, so the trick is to attend those that could be most productive for you. Choosing the best events can take a little investigation and although every group is a potential source of referrals, some are clearly better than others. Therefore, it's usually worth the time and effort to learn which can be the most opportune for you.

Or, start your own group.

And don't limit yourself to just one group. Different groups serve different audiences and have different slants or purposes. Civic organization support community projects, women's groups work to promote women's causes, and industry associations serve the members of their particular fields. So I always belong to a number of groups.

Before you join organizations:
*Clarify your objectives for both the short and long term. List what you want to accomplish and how long you realistically think it will take.
*Precisely identify your target audience. Know exactly whom you want to meet: travel writers, classic car restorers, or wine distributors. Then go to organizational events that they would attend.
*In identifying your targets, look for cross-promotional opportunities. Members of certain groups may not use your goods or services themselves, but they could give you entr?e to a large number of people that will.
*Learn about each organization; investigate what you may be getting into. Ask about its mission, agenda, membership profile, events and causes, how often it meets, and the commitment you will be expected to make. If you're young and new in business, do you want to join an established service organization that has an older demographic? Perhaps you do. Speak with your friends and business associates. Learn about their experiences and what they would recommend for you. Be their guests at meetings and events and experience them for yourself.
*Before you join an organization, speak with at least one member.. Get a general overview of the group, its strong points, what it's like to belong, how it could help you, and information about its members. Specifically ask what they like best and least. Usually, those you speak with will introduce you at your first meeting or even sponsor you, which will help you make contacts and gain credibility.

Join organizations in your field, but also venture out. If you're a publicist, join publicity associations, but also think about going to authors groups because writers need publicity. If you?re the only insurance salesperson who belongs to the motorcycle club, it could help you sell policies. Joining organizations outside of your own industry can also turn you on to new and fascinating people and interests, which can stimulate and add excitement to your life.

When you join organizations, decide how involved you want to be. Devoting your time to causes, serving on committees, and being an officer can dramatically increase your profile. Ask yourself, can you afford the time, effort or expense of leading a campaign or being a director? Is it worthwhile for you? Or will your service be rewarding enough to justify the time??

No matter how far you branch out or how successful you become, I think it's essential to remain closely connected to your local community: your Chamber of Commerce, business, civic, and community groups. These organizations will be your base; their members will be the core advocates who will root for you, support you, and spread your fame. When you try to expand beyond your local area, they can give strong endorsements when people in the new markets ask about you.

Jill Lublin, the author of Get Noticed...Get Referrals and a participant in our BizBooks series, has a great new post on how to decide which groups you should join over on our Topic of the Week blog. Check it out!

College prep agency The Princeton Review and Entrepreneur.com teamed up to publish a 2008 list of the 50 best schools for entrepreneurship--25 undergrad, 25 grad. The rankings purport to measure both the academic programs as well as the business success of their graduates.

First place went, respectively, to the University of Houston's Wolff Center for Entrepreneurship and the Arthur M. Blank Center for Entrepreneurship at Wellesley, Mass.'s Babson College. Both lists, which contain several of the same institutions, are dominated by state schools such as the Universities of North Carolina, Arizona, and Oklahama. Boston-area schools, including Babson, Northeastern, and Suffolk, also make a strong showing.

Just as notable is which schools do not appear on either list, namely: all the Ivy League institutions as well as several other especially presitigous universities such as Stanford, Duke, Washington University at St. Louis, and MIT. We've written about Columbia's new undergraduate minor in "technological entrepreneurship," and presumably these schools' absence does not reflect a total lack of entrepreneurial programs. Rather, it seems that other schools have gotten way out ahead of these emerging academic/preprofessional field.

Anyway, check out the lists. Lots of useful and interesting information.

The New York Times runs a phenomenal article on the 16-23 million (depending on your estimate) people who own small businesses, who represent at least around 15% of registered voters. The article specifically explores what these voters would like to hear from the two presidential candidates, and what they say they haven't heard.

Of course, we could give you a basic outline of the two candidates' policies that are particularly relevant to small business owners. In fact--hey, look!--we did!

Still, according to the article, small business owners say that what they want most is specifics. A full 80 percent of small business owners polled in a Suffolk University study in July said they did not know either McCain or Obama's positions relevant to their livelihoods as small business owners. "Neither candidate has developed a comprehensive small-business policy to address issues such as health care, taxes and retirement affecting this important demographic," the executive director of the National Association for the Self-Employed told the Times. “Neither has spelled out exactly what he’ll do,” added one small business owner, a political independent.

Who will win over this sizable, vital consituency? The smart money would be, as it would be in any election year, on the Republican. Though far too diverse to constitute a solid voting bloc, small business owners tend to lean towards the Grand Old Party due to its perceived business-friendly stance on smaller government--lower taxes, fewer restrictions on trade, and the like. (On taxes, McCain would lower the capital gains rate while Obama would lower it only on businesses; McCain would lower everyone's income taxes, while Obama's would let the Bush tax cuts expire for the top 5% of money-makers. On trade, Obama has been more aggressive in questioning NAFTA and other trade deals.) It is no surprise that the July Suffolk poll showed a 38%-21% edge for Sen. John McCain.

Yet the topsy-turviness of this election year (which has already seen the extremely unusual spectacle of the candidate from the incumbent party trying to declare himself essentially not of that party) could give the Democrat, Sen. Barack Obama, an extraordinary opening. Famed pollster John Zogby, a Democrat, thinks these voters are up for grabs. For example, on health care--which some groups call the biggest issue for small business owners--McCain, who favors some refunds to employers, is ordinarily seen as the more business-friendly pick; yet there is an argument that Obama's fight for universal health care is actually good for business.

Furthermore (and as any reader of Michael Taylor's dispatches would know), many small business owners feel the government does not do enough for then--63% feel this way, in fact, according to the Suffolk poll. In a year in which the lack of credit may be these voters' public enemy #1, the Democrat--who, as always, vastly outpolls the Republican on the question of economic stewardship--has a major league opening.

In other words, stay tuned. The next eight weeks are going to be a wild ride.

It seems a bit of drama took place at the TechCrunch50 Conference, which took place this past Monday, Tuesday, and Wednesday in San Francisco. VentureWire reports that when two venture capitalists spoke at an otherwise "lighthearted" panel about their care for the entrepreneurs whose endeavors they backed, Michael Arrington--that would be TechCrunch's founder and the conference's host--stood up at an audience microphone and told them what he thought about what they were saying. Hint: it has to do with what you might find on the ground at a bull farm.

Arrington took issue with the VCs' explaining the many hours they spend with and around the entrepreneurs they are backing with reference to their desire to build strong relationships and nurture the start-ups. Instead, Arrington argued, the VCs put in all that time in order to protect their investments and minimize their vulnerability.

It was apparently quite awkward. We can imagine.

But the question remains: why do VCs spend all that time around the start-ups and entrepreneurs they back?

Or is that the relevant question? Frankly, it doesn't seem that relevant why the VCs are doing such a thing. And are we really supposed to fault them even if the main impetus behind the time they put in is to protect their investments and make more money rather than out of the goodness of their heart? They don't call them venture capitalists for nothing.

The more pertinent question, it would seem, is rather: is it more effective for VCs to put in lots of time and attention and energy, or to back off and let their entrepreneurs be? There is a lot of room for serious debate and disagreement on that subject. And if the answer is no, then we may indeed very well question the motives of VCs who do it anyway, thereby seemingly going against their own interest.

But demonizing investors for wanting to protect their investments seems a little naive. It is nearly impossible to imagine they are doing so out of any ill will--there money is on the line too, after all.

We've written before about how discounting can give you a comparative advantage over competitors that is only amplified during a sagging economy (like, er, the current one). Given that, we were hardly surprised to find that coupon use is growing among consumers, according to a new poll. Specifically, 80% of consumers use them, and over 70% are using more than they did six months ago.

The implications of this finding are obvious: even though it may hurt--may even seem counterintuitive, given that the lousy economy that is encouraging coupon use is the same lousy economy that leaves you less able to afford discounting--at this point, it may be less about attaining a comparative advantage and more about keeping up. With a full 87% of consumers reporting that they would be more likely to shop at a place that offers coupons, you may not be able to afford not to.

But you still can distinguish yourself from your competitors without cutting more into your profits by designing coupons that are more clever and that are delivered more wisely. Take heed:
*80% say they will likely increase coupon use if they receive coupons specifically tailored to them or consumers like them.
*56% say online coupons are as convenient as or more convenient than print ones.

Arm yourself with that, and go forth and coupon.

Alan L. Carsrud, who runs Florida International University's Global Entrepreneurship Center, says it all to the New York Times: “Small-business cards have fundamentally replaced lines of credit."

The big story of the U.S. economy for the past several months has been the "credit crunch". Credit has become as valuable as gold, and as scarce. One of the main consequences of the crunch as far as small businesses are concerned, reports the Times, is the decline of lines of credit and the rise of small business credit cards. (Time to note that BizBox's sponsor is American Express OPEN.)

Lines of credit tend to be much easier on the borrower: their interest rates are either fixed or slow-moving, and tend to be altogether lower than those of small business cards, which like normal credit cards can contain wildly altered and high rates depending on the borrower's credit score, or even simply on the lender's whim. Small business credit cards' advantages, according to the Times, generally have less to do with the credit facility itself and more with extra, ancillary benefits such as other discounts and more generous payment terms.

The change has already happened. A National Small Business Association found a record low of small business owners--only 28%--had used business credit cards for the year before. And that was in February: as the crunch has persisted, that figure has almost certainly worsened.

Credit cards are a tricky, fickle beast. The rates are variable, and high. Generally, they are less conducive for raising capital. No wonder that, as we discussed yesterday, many small business owners say that their single greatest political concern is the lack of available credit.

It's worth noting that, in theory, this overall situation hurts banks too: the move towards credit cards is sure to restrict (further) how much overall they lend to entrepreneurs, whereas ideally they would be lending as much as possible (to successful endeavors). Instead, to protect their investments and their ever-scarcer credit, they must resort to credit cards, cutting back on how much they lend, decreasing profit growth...and all over again. That vicious cycle thing.

...and so it's time to play a game!

But not just any game: we recommend Johnny Money, which simulates running a small business. (Register, and ignore the stuff about "Class Code".) Each month is a turn. You have to peddle your wares, pay your bills, compensate your creditors: in short, you must run your own business.

There are only six products you can sell, but the game is otherwise remarkably detailed. Adjust your mark-up; pick your advertising budget; decide how much you want to borrow from the bank (the bigger the loan, the higher the interest rate--just like in real life!).

There's liability insurance, there's rent, there's a tax on profit. The only difference form real life is that instead of calculating all of these figures and taking your own inventory, the computer does it for you. Well, there is one other difference from real life--it's only a game--but who's counting?

We're warning you, it is kind of addictive. But at least you can console yourself with the thought that you may very well be learning something.

Skeptical about developing iPhone apps, which we've identified as a hot industry for tech start-ups? Well a bit of recent bullish news may change your mind: namely, users of Apple's 12 million extant iPhones have downloaded over 100 million apps in only two months of their availabilty--more than twice as many as songs were downloaded from iTunes during that period. TechCrunch, er, crunches the numbers, and finds that the current rase see 1 billion apps downloaded a full year faster than the first 1 billion songs were downloaded from iTunes.

In a separate post, TechCrunch's Michael Arrington provides a useful corrective to skeptics who note (not incorrectly) that Apple is more restrictive than many tech entrepreneurs would like in terms of which applications it allows into the sacred Application Store. (Google, by contrast, has pledged to make the applications for its forthcoming Android operating system truly open source.) Arrington's not in the Apple-defending business, and he doesn't disappoint here.

But he nonetheless accurately shows how foolhardy it would be to give up on this growing and potentially lucrative market just because Apple's being too strict. "The fact is that there are more than twelve million iPhones in people’s hands today, and another 800,000 or so are likely sold each week," Arrington writes. "That is too much of an opportunity to pass up. Developers will complain, but ultimately they’ll play by whatever rules Apple demands. Even if those rules are ambiguous and subject to change regularly without notice."

As an additional point, though, at least if we are to have faith in capitalism and the whole notion of the way open source works, we should posit that Apple will move more towards a more truly open open source model in the future rather than away from one. Why? Open source works: everyone knows this. And now, faced with a competitor that offers a similar product but with truly openly sourced apps--that would be Android--Apple is going to have to adapt and evolve to stay competitive; if it doesn't, Google will trounce it. To quote Austin Powers: "Groovy...smashing...yay capitalism!"

We have a new brother site (we always call Slate our sister, and it would be nice to have a brother, too) as of today. Go check out The Big Money, the new way to read business.

Seriously, it's really cool. We especially like its Socially Responsible Investing application, which lets you screen which companies are the most (Southwest Airlines as well as, ironically enough, Fannie Mae and Freddie Mac) and least (cough cough ExxonMobil) socially responsible according to five metrics: gay/lesbian; labor and human rights; green; non-military; and no vice.

Which leads us to ask: how socially responsible is your company? It's not just a personal/moral decision. As a sense of your social responsibility seeps into the public--no matter how big or small you are--being socially responsible will likely prove good for business.

While the awful economic news you're hearing about today doesn't directly concern any small businesses--the whole problem with the utter collapse of Lehman Brothers is its utter bigness (the fourth-largest investment bank goes bankrupt! this is not good!)--it is pulling down the economy as a whole, and will continue to do so. And that's not just bad for small business owners, posits a story in the New York Times--it's especially bad for them.

Though the article's focus is specific entrepreneurs who were forced to fold their businesses and become employees again over the past year as macroeconomic conditions have worsened, its thrust can be summed up in the following truism, which it attributes to Indiana University Professor David B. Audretsch: "When the economy expands, small businesses gain more than large companies. In an economic downturn, small businesses tend to be hit harder."

The notion that the business cycle is amplified in rather than consistently applied to or muted in small business' fortunes certainly makes logical sense. After all, among the main appeals of striking out on your own is the high-risk/high-reward environment.

But a post on the Wall Street Journal's Independent Street blog challenges the Times piece's contention. "Today’s economic climate shouldn’t be viewed as all doom and gloom" for entrepreneurs, the post contends. Conditions of tough times that would appear to give the smaller fish an advantage over the bigger ones include:
-An opening to cut in to the market shares of an industry's dominant player (the piece cites Dunkin' Donuts's successful encroachment on Starbucks's turf).
-The changed times favor quicker adaptation, and small companies tend to be more adaptable than big ones. They can discount, offer new products, and come up with new, times-appropriate promotions faster, the post contends.
-Smaller companies can also more easily coordinate with other strapped, small companies, bringing prices down. Small businesses of the world, unite!

We don't want to adjudicate between the two sides. Rather, we'd like to point out that both are correct: the truly terrible economy is going to make things harder for everyone, and the truly terrible economy offers opportunities for, if not certainly the smallest, than certainly the savviest businesses to make gains that less malleable boom times do not permit.

We'd also like to point out that it is not like you get to choose whether you do business during good or bad times. Rather, you have to do business in the times you are given (and if you are in business long enough, you are guaranteed to get both). Right now, you have to do business in an awful climate, so you might as well flex your entrepreneurial muscles and figure out how not only to survive but to thrive.

Note: see BizBox's previous post for a discussion of whether the economy's dire straits are a particular advantage or disadvantage for small businesses.

The financial headlines this week threaten to turn small business owners into Chicken Littles. In fairness, the financial sky truly is falling - from the best and the brightest of Bear Stearns and Lehman Brothers down to the humble homeowners who live across the street from you. So we can cut people some slack for asking: is anyone truly safe?

The answer is: yes. In fact, most of us are safe.

The common denominator of the credit crisis of 2007 and 2008 can be summed up in one word: Debt. The mortgage crisis, for example, is a crisis of excessive debt burden at the homeowner level, which has compounded excessive debt at the Wall Street level.

And it is debt that distinguishes a small business like yours from the big boys. I can guarantee that Bear Stearns, Lehman Brothers, Fannie Mae and Freddie Mac do not have businesses that look like yours, because in recent years they typically operated with debt that exceeded their equity by between 20 and 50 times.

By contrast, there is no small business in the world that can get that much credit from their bank without committing borrowing fraud (in which case you've got bigger problems than being overleveraged). As a result of the structural fact that it is relatively difficult to get banks to lend to small businesses, and has been even more so for over a year now, it just so happens that most small businesses carry very little debt.

So you're probably "safe," at least as far as the credit crunch directly hurting you is concerned. (You're not, unfortunately, totally immune from the business cycle, unless your consumer base is located on a distant planet that is currently going through a period of robust growth.)

But there's more: now is actually a time for you to thrive. If your small business runs debt-free, the turmoil of the last year and a half is truly an opportunity. Why? Because cash is king for the next few years. And so if your lack of debt gives you the ability, for example, to extend limited but scarce and therefore valuable credit to customers, then that could be the factor that puts you on a fast track for growth.

From TechCrunch comes news that Yahoo! has a new ad campaign called "Start Wearing Purple". It's all about...purple, the color of kings and queens, and, apparently, of Yahoo! too lo these many years. Not that you would know this from the Yahoo! homepage or logo, although it appears you would if you had read this Time profile from last year.)

Good campaign or bad campaign? It's hard to like it too much. If you can get a color combination that is specifically associated with your brand, then that is an extremely powerful thing: think McDonald's buff and red, or Coca-Cola's red and white. But these companies were able to establish and are able to sustain those color combinations because they have made them virtually ubiquitous among the products attached to that brand.

And this ubiquity and strong ability-to-identify, in turn, have enabled these companies to use its colors to extend its brand. Think Diet Coke, which uses that distinctive bright red in the lettering against the white-silver shade to denote something that is sort of Coca-Cola's opposite, with a twist. Or even think about a small business Website that uses the same distinctive burgundy as its sister Web-magazine....

But...Yahoo! and purple? As we've pointed out, this is apparently not a new thing for them--purple has always been, at some level, Yahoo!'s official color. But if there currently were a strong connection between color and brand, we wouldn't have have had to Google--er, we mean Yahoo--"Yahoo purple" to come up with that Time article.

In sum, we think Yahoo! will not be able to build this campaign on the (we think fallacious) assumption that a great many people associate purple with Yahoo! to begin with. If they really wanted this, they should treat it just as much as a reintroduction of the official purple color--but it may be too late for that.

Of course, in its headline, "Yahoo Bleeds Purple. And You Thought Microsoft's Marketing Campaign Was Weird," TechCrunch seems to be suggesting that this ad campaign may be as bizarre as or even more bizarre than the ill-fated Mojave Experiment. No chance. Not even close.

The latest entry in the great debate over how the quickening credit crunch will affect small businesses comes from the Wall Street Journal, which sounds a bearish note, arguing that particularly small businesses with anything other than wonderful credit histories--a category that, crucially, also excludes start-ups--are going to have a mighty hard time borrowing money over the next several months. (By the way, nice redesign, WSJ.)

A couple of other predictions from the piece:
-Small businesses will be forced to delay plans for growth.
-Little-used credit unions and community banks will be increasingly major players in small-business financing.
-Small businesses will approach nonbank lenders, frequenty requiring them to pledge assets as collateral.

The bulk of this analysis is indisputable. Yet it overlooks the point Michael Taylor made yesterday on BizBox: namely, that small businesses that weren't operating with too much debt to begin with--which is more small businesses than you may think, given how hard it is for small businesses to borrow large amounts of money even during times when credit isn't scarce--won't need to worry about these new credit problems, which comparatively will give them a leg up on every company that does. To expand on Mike's point, in the land of scarce credit, cash is king.

That said, the one place where the article really does hit the mark might be in terms of its prediction that big purchases, planned expansions, and the like will be delayed until the credit market firms up a bit. With Wall Street caving in, and with the end not even in sight, the wisest course of action may be to get your balance sheet in order, put your money into as secure assets as you can, and, of course, keep on doing business.

We present a cautionary tale for developers of iPhone applications--which in the past we have encouraged as savvy start-up entrepreneurs. Via the New York Times's Bits blog, there is the story of one developer, Alex Sokirynsky, whose Podcaster app (check it out--it lets you download and stream podcasts) was rejected by Apple for inclusion in the Application Store because...well, it's not entirely clear why--Apple gave its reasons, but they are pretty clearly inconsistent with Apple's broader policy.

The real problem is the opaque method by which Apple approves or rejects applications. "So does Apple actually have rules or standards for what iPhone applications are and aren’t allowed to do?" the blog asks. "It hasn’t published any. It didn’t give any helpful information to Mr. Sokirynsky suggesting how he might change the application."

It's hard not to be out-and-out against this way of doing business. You learn in Econ 101 that transparency is crucial to any competitive market, and so Apple's apparent refusal to explain its application decisions with any sort of adequacy--an Apple spokesperson was unforthcoming when Bits sought comment--is sure to create lousy competition that denies iPhone users the best choice of applications and, eventually, denies Apple app downloads (though given how robust downloads have been so far, one imagines this fear is not at the forefront of Apple's concerns). Some day, there's going to be true competition in the quirky-yet-smartphone market, and woe to Apple if the competition's app approval process is truly open and fair...

...whoops, have we forgot to mention the exciting news--that that T-Mobile Dream, powered by none other than Google's Android operating system, is officially hitting stores next month? (News from Feeling Lucky.) Google claims it is taking a different tack altogether in terms of how it accepts apps: it is making its app store fully open source, not even subject to its own prior approval.

This method carries with it its own risks, to be sure, and we would be very surprised if Google were never willing to step in and insist an app be fixed or not included when a compelling reason presents itself. But it almost seems less risky than Apple's reliance on seemingly deliberate opacity and off-putting secrecy. Beyond the free-market rationale, it makes Apple seem of the past and Google of the future.

According to a new Rasmussen poll, small business owners are considered harder working than CEOs, employees of big corporations, and (especially) government employees by a substantial majority.

The findings:
-70% think entrepreneurs work harder than those three groups.
-78% think entrepreneurs work harder than government workers; fully 80% of Republicans think this, and a lower 70% of Democrats think this. Similar ratios prevail when comparing entrepreneurs to employees of big corporations.
72% think entrepreneurs work harder than CEOs of big corporations, whom 12% say are the harder workers.

One thing to say about this poll, obviously, is that it purely reflects people's perceptions; the reality could be completely the opposite (there's no real way to tell, is there?).

The broader point to make, though, is that an entrepreneurs' workweek is maybe more usefully defined not as simply longer or harder but as radically different from that of a CEO or, especially, of a government worker or big-corporation employee. It is more flexible, and allows a more careful and personalized tinkering of the work-life balance; it also almost certainly means longer, and certainly less regular, hours. Becoming an entrepreneur is a trade-off. It is also as much a lifestyle as a career choice. Many think it's a great choice, but people considering making it should understand the breadth of their decision.

The conventional wisdom states that, controlled for what job slot you need to fill and how much you can pay to fill it, it tends to be better to hire the most experienced applicant. Those with experience, so the accepted way of thinking goes, will be better able to accomplish the varying day-to-day requirements of their job, will be more professional, and will require less training. Experience cannot be taught. It is worth paying for.

That's certainly true in many instances. However, according to a new paper co-authored by three professors from three prominent b schools (you can download the paper itself at the bottom of the article), there is an argument to hiring for an open position a relative newcomer to that sort of position over someone who has served in the equivalent position at a different company for decades. And that is even before you adjust for the fact that, almost by definition, you can pay the newcomer less than the experienced applicant.

A clue to the paper's main insight can be found in its title, "Unpacking Prior Experience: How Career History Affects Job Performance." For the thing that the authors unpack is what they call an employee's "baggage". If "experience," with all of its positive connotations, means the wealth of knowledge about how to do a job that an employee has learned solely by doing his or her job for some time, where the knowledge increases with time, then "baggage", also proportionate with time, is the wealth of knowledge about how to do a job at an employee's previous company. The authors' concern, then, is what they term "cross-corporation baggage". And it can make a more experienced employee ultimately a worse employee than a less-experienced one lacking in it.

"If you have a strong culture and a clear strategy in doing things that differ from your competitor, you may want to think carefully about whether you want to hire for experience or whether you want to hire people with less experience and invest more in training them in your model," says one of the professors. "If your competitive advantage is the culture of your company, you want to be careful about bringing in people with a long tenure in their occupation or industry and think about how that prior experience is going to bring positives as well as negatives to the firm."

The conclusion to draw from the study is not that newer people are better, of course. That's not even the conclusion the study itself draws. But the paper should make you question the experience-is-better dogma.

More significantly, the paper should make you realize and in your hiring decisions emphasize the importance of "cultural fit" with your firm. Hiring and retaining employees who fit well with your company's culture is the ultimate goal. Sometimes the best person for the job will be a rookie unencumbered by cross-corporation baggage; other times, it will be a seasoned veteran who nonetheless convinces you that your firm's culture is a wonderful fit for him or her, and that he or she will quickly and seamlessly adapt to it. Keep the "cultural fit" goal in mind, be a vigilant and attentive interviewer and reviewer of your applicants, and you will find yourself with competent employees who belong with you.

Here's a remarkable venture: Connect, a San Diego-based nonprofit that has served as a catalyst that links start-up capital with the many burgeoning entrepreneurs in San Diego, which has increasingly been known worldwide as a hub of innovative telecom and especially life sciences businesses. The organization, which began in 1985 as an outgrowth of the University of California-San Diego, is the subject of a New York Times profile today.

Connect could not be more aptly named: its goal is to link entrepreneurs with big ideas and investors, angel and otherwise, with excess cash. (It also advises start-ups on the more financial aspects of their business.)

Oh, and did we mention its free? Though not a charity, Connect relies on donations, according to the Times.

Connect is the type of organization San Diego is lucky to have. It's also the type of organization any city should be grateful for the chance to subsidize. The journey of capital from investors to start-ups is among the most important in several industries, most notably tech and life sciences, and that journey is much more arduous than it needs to be chiefly for reasons--investors' lack of tech savvy, scientists' lack of business savvy--that are totally divorced from what should matter. And who can blame financiers for not having advanced degrees in biochemistry, or great doctors for not having MBAs?

So to the entrepreneurs: look into whether your own city has an organization like Connect. And to the cities: if you don't have a Connect, contact the local university and ask it how much it needs to start one. It'll likely prove the first of many successful investments.

The Great Podcaster Rejection, in which Apple inexplicably denied what seemed like a perfectly good iPhone application the crucial entree into its Application Store, has sent shockwaves through the tech developing world (people are pissed). It also prompted a really, really funny cartoon that you should check out here. (H/t: Gizmodo.)

We have announced our skepticism of Yahoo!'s "Start Wearing Purple" campaign, chiefly on the grounds that not too many people know about the Yahoo-purple connection that exists, and apparently--allegedly--always has. We still are skeptical, by the way, but fairness dictates that we show you this mock-up of Yahoo!'s forthcoming homepage.

So here it is: what will greet the roughly 325 million unique global visitors Yahoo gets each month. (Via TechCrunch.)

The new site also brings several functional changes, most notably the ability to use third-party applications (i.e. Gmail) via Yahoo!'s site--for which we give our hearty approval. But we're still not buying the purple thing.

Who says there's no credit available for small businesses right now? (Well, the Wall Street Journal did, and they had a point, but bear with us--there's good news up ahead, brought to you, as so many pleasant packages every day are, by UPS.)

The credit crunch has hit small businesses particularly hard, according to many. And while, yes, it may be true that--as BizBox's very own Michael Taylor pointed out earlier this week--small businesses' general tendency to have little debt in the first place puts them at an advantage during a weak credit market, ultimately, even very small businesses almost always need to borrow money at some point, particularly if they are just beginning. And so it's hard not to feel worried for small businesses during this economy (which, in case you've been in a cave for all of the past four days, has entered crisis mode).

Enter UPS, with what sounds to us like a great program aimed at shoring up its own business while facilitating business for others, specifically small businesses. Indeed, you could say that it is by facilitating business that UPS hopes to keep up with its own. Reuters reports that UPS's financing division has initiated a program called UPS Capital Cargo Finance.

The deal is simple: if you are a U.S. small business that meets certain requirements--you've been importing from foreign countries for three years; you receive a minimum of one import shipment per month; various other metrics related to profitability and management--then UPS will grant you a 60-day bridge loan worth up to half the value of a given shipment from abroad. Neatly enough, the shipment itself serves as the loan's collateral.

Reuters does note that this new credit avenue for certain small businesses goes against the current trend, which is decidedly towards decreased credit. The difference here, it seems to us, is incentive: namely, UPS's wants to keep business flowing, even though its extending credit to others via this new program is going to cost them a fair bit. Think of the program almost like a subsidy, or better yet, a stimulus measure: just as the government may issue tax rebates or increase direct spending in an effort to spur the economy and thereby, eventually, to secure tax revenue for itself, so UPS hopes to keep its own coffers filled by helping others fill it for them. (Something tells us that UPS will not lend 50% of the money for an imported package handled by FedEx.)

The larger lesson is: in these trying times, it's best to appeal to others' self-interest when you want to gain a leg up via a relationship with them. Enlightened altruism, call it. You would be surprised how persuasive advancing one's own self-interest can be as a motive for helping to advance someone else's.

Boy, that New York Times piece telling entrepreneurs to "Turn Back," which we covered here, has really created a stir. The Wall Street Journal's Independent Street blog countered it; so did, at least implicitly, our own Michael Taylor; and check out this stirring call to arms for entrepreneurs everywhere. The Times must not have known what it was in for when it told entrepreneurs that this economy boded ill for them.

In a characteristically smart post on AllBusiness's Small Business Blog, Rieva Lesonsky expresses her sharp disagreement--even fury--with the Times piece.

She analogizes what's going on now to the recession the U.S. entered following the massive stock market crash of late 1987. The layoffs and instability that ensued birthed hundreds of thousands of talented, ambitious corporate refugees who went out and started their own businesses, making the '90s the Age of the Entrepreneur, Lesonsky argues.

Beyond that, Lesonsky advises entrepreneurs to step into the vacuum that will inevitably be left by struggling big corporation, who will have to cut back on marketing and the like. And she suggests that they be bold in breaking the old rules and establishing new ones in this chaotic time.

Sounds good to us.

While we're gushing about too-good-to-be-true programs for linking venture capital with start-ups or generous credit lines for small businesses, we thought we'd also praise Union Square Ventures, a VC firm profiled today in the New York Times. Hip, helpful Web 2.0 products whose companies the firm has helped back include Twitter, del.icio.us (which Yahoo! purchased in 2005 for a reported $30 million), and Meetup.

Union Square's M.O. is to invest early and invest small. Its more modest, early-round stakes--usually under $1 million in exchange for 5-10%, as opposed to the more typical 20% for a larger infusion--are offset by its hands-on involvement in the development of its start-ups' products as well as a certain type of patience: the type that that lets it assume that a viable business model can found for a viable product and that makes it willing sometimes to raise its bet during a second round of financing.

And besides, these guys actually use their start-ups' products! In fact, they keep a blog, from which you can learn about Zemanta, a blogging app that automatically suggests links and images to go with posts (its motto is, "Blog Smarter").

But why else do we like Union Square? Because it adds something--something good--to the usual VC equation. Let's elaborate.

Start-ups, at least when they're starting up, tend to be one-dimensional: based around one central, driving idea usually that has gotten as far as being put to basic use. We don't mean this as an insult: in most cases the entrepreneur's job need be no more than to have that one brilliant idea--and frequently those ideas are brilliant, innovative, original, and even world-changing. What distinguishes a failed start-up from a successful one usually isn't more acute business planning; rather, it's the seed idea that makes the difference.

But practically, a seed idea is not all a successful start-up needs. One other item, of course, is money. And God said, let there be venture capitalists!

But with Union Square, these start-ups aren't just getting money--the typical venture-capital end of the deal (although, crucially, they are getting it, albeit in a slightly smaller-than-normal amount). They're getting expertise and wisdom. They're getting the experience that comes with having already watched the birth and growth of several start-ups that do broadly similar (Web 2.0-y) things. They even get a few extra brains on the product itself. In short, Union Square is venture capital plus.

And Union Square could not be more relevant than right now, in a time when there simply isn't enough money floating around to allow venture capitalists give the full 20% to every nascent business that comes their way.

So the new model could very well be VCs offering start-ups less capital but, formally or informally, more of other things. Or Union Square, and these credit crunched times, could prove the exception, not the rule.

But if, five years from now, Twitter is only more ubiquitous, and has been successfully monetized to boot, then people will have no choice but to pay attention to Union Square and its model.

First, a definition. Connecting is the art of building relationships--relationships that last. It’s the forming of bonds with people that can grow into deeper, closer, more meaningful relationships. And one of your most important connections is with your customers.

Making close connections with them is essential because people prefer to interact with those with whom they feel connected. With whom they share common interests, feelings, values, and beliefs. Whom they trust and want to help.

Instead of concentrating on closing one-time sales, work to build close, long-term connections that will endure. And follow these suggestions:

*Be honest and build trust. Exaggerating and falsifying may help produce quick sales, but over time, it will do you in. Overstating and failing to deliver as promised kills relationships because customers want what they were promised. Few will continue to conduct business with those who have not kept their word. Not delivering precisely as promised is the best way to ruin your reputation and brand.

* Perfect your art. Deliver top quality. Do what you do excellently, as well as it can be done. “There is no substitute for quality,” T. Harv Eker states. If the quality you provide is outstanding, you don’t have to do lots of networking. People will network for you. They will tell others about you and recommend you. People love to refer others to those who provide the top quality.” It makes them look good.

* Stick to the facts. It’s easy to exaggerate and promise more than you can deliver, but it doesn’t pay. Be honest. Connect with potential customers by telling them the results your goods and services have achieved. Better yet, document the results, put on demonstrations, and show them proof. Provide them with endorsements from satisfied customers; take them to sites to your goods or services in operation with other customers. Then explain to your prospects exactly how you can help them.

* Don’t promise too much — especially if you may not be able deliver. Be completely honest. It’s better to lose a sale and stay on good terms with the prospect than to land the sale and subsequently alienate the customer. If your honesty costs you a deal, think of it this way: the customer may remember your truthfulness and call on you again. However, if you over-inflate or fail to deliver, your future with that prospect will be doomed, over, kaput. Plus, aggrieved customers tend to tell their friends about their dissatisfaction — especially when they feel they were intentionally deceived.

* When you’re looking for business, offer your goods or services at an attractive price. Be fair and don’t gouge; build trust. Give potential customers a price incentive for giving you their business. When you have performed well for them, you can use them showcase to sell future customers. You will also have forged connections with satisfied customers who will give you repeat business and recommend you to others.

*Ask satisfied customers to give you endorsements or letters of commendation. Have them write on their letterheads how excellently you performed. Post the commendations on your Web site, hang copies in your office, and keep them in a scrapbook that you can show potential customers. Insert them in your brochures and sales materials.

If you treat your customers with respect and honesty, you will make a connection. And you will find that it's more than good for business--it feels good, too.

When we layed out McCain and Obama's positions on issues particularly relevant to small businesses (think taxes, trade, health care, and the like), we noted that owners of such businesses tend to lean Republican due to that party's reputation for pro-business policies and smaller government. A brand-new survey confirms that tendency: earlier this month, 64% of the surveyed small business owners said they were planning to vote for Sen. John McCain, with the remaining 36% pulling the pre-Election Day lever for Sen. Barack Obama. But the results also show these entrepreneurs being more open to Obama than you may expect--while at the same time pointing the way for how Obama can gain yet more ground with this constituency.

The key to interpreting the results of the survey, which was conducted by SurePayroll and had 1,062 respondents (via Independent Street), is to compare the numbers on the candidates with those on the parties. The candidates are 64% McCain-36% Obama. These were the only two options; we can infer that undecideds picked whomever they are leaning towards. However, on the question of which party is better for small business, 57% say the Republican Party, 18% say the Democratic Party, and 25% responded, "I don't think the party matters."

The first thing to note is that anemic Democratic number, especially contrasted with the majority who prefer the GOP. No doubt many Democrats would wear their number, which is the consequence of policies that side with workers over owners, as a badge of pride. But it's still there.

The second point, however, is that, as far as Obama is concerned, that awful Democratic number means that he is wildly outperforming his party. More than that: he captures a significant majority of those who say party doesn't matter, and are therefore focused exclusively on the candidates themselves--those 25%, who probably correlate strongly with Independents.

To elaborate: it is difficult to conceive that more than a few percentage points of those who give either party an advantage also favor, on these issues, the candidate of the other party; and these outliers should, roughly, cancel each other out. That gives Obama, again roughly, over three-fourths of those who are looking exclusively at the candidates themselves: that 18% share of the 25% bloc. (Think of it this way: if the candidates evenly split that 25% who don't distinguish between the parties on these issues, then the final result would be 69.5% McCain-30.5% Obama.)

These figures suggest that, at least as regards small business owners, it is Obama, and not McCain--who has famously attempted to distance himself from his own party, whose current leader, after all, has abysmal approval ratings--who has successfully dissociated himself from an unpopular brand. They also suggest that, in appealing to small business owners, such a dissociation should continue to be his strategy. (One suggestion for how Obama could do this would involve trade, where he has been aggressive in critiquing deals, including NAFTA.)

The 18% who favor Democrats represent something of a ceiling, since changing people's perceptions of large and perpetual parties requires great effort and time. It is Obama's second 18%, who aren't looking primarily to party, upon whom he should look to build if he wants to make further inroads into what should be a solidly McCain constituency.

Wonderful little tale about how online social media can help you reach out to your customers and provide a fuller customer service experience. One of us has a Twitter (apart from BizBox's Twitter), and there wrote a tweet about some problems we were having with our personal blog, which is hosted by TypePad. You know, just your run-of-the-mill complaint, for which Twitter's 140-character maximum template is perfectly suited.

Then, not long after, this appeared in our email inbox:

From: G--- W---- <------@sixapart.com>
Hi there:

I saw a Tweet from you saying you were having trouble with TypePad ­ we had a short problem today but we should be back up and running now. You can always check status.sixapart.com for more information, too! Please let me know if you have any other questions.

G--- W----
TypePad Community Manager
Six Apart

A couple back-and-forths later, and the problem was solved.

Props to TypePad. Note how the customer--that would be one of us--was able to get superior service without even having to seek it out. New Web 2.0 technologies and products allow such things, but only if you take full advantage of them.

It really couldn't be more stark, and couldn't have been illustrated more starkly yesterday: the difference between Apple's attitude towards the legions of software developers looking to build their own products and start-ups upon the iPhone's formidable platform, and Google's attitude towards them as it prepares to launch the first-ever phone powered by its Android operating system on October 22. The companies' respective policies regarding apps are crucial for this burgeoning sector, which we've already identified as prime tech start-up ground.

Google, as you may already have read, formally rolled out Android and the T-Mobile G1 smartphone that will carry it. The phone itself looks cool--it has both a keyboard and a touch screen, and comes installed with several popular Google apps, including Gmail. But what we are really focused on is the Android Marketplace: its app store. And, as previously announced, the restrictions on developers and on applications will be minimal. More than that: Google is making Android's code available to developers and users of other smartphones, in the hopes of proliferating the OS on as many phones as it can.

Apple, meanwhile, takes, let us say, a different tack. They require prior approval before allowing an app to appear in the app store. They routinely take down apps that are there. They are already notorious for their capricious and opaque rejections. And now, via Gizmodo, comes word that these summary rejections come attached with a non-disclosure request--a gag order.

Is the gag order a gigantic deal in and of itself? Probably not, especially compared with the much more significant problem of Apple's generally dictatorial and anti-open source policy regarding inclusion in the iPhone app store. But still, it sends the exact wrong message, both to developers looking to develop new applications that could in turn make the iPhone a more attractive product (and now have an alternative platform for which to design such aps) as well as to users who are sure to be turned off by something so inimical to the culture of openness for which the tech industry--and above all Google--is known.

Can anyone even surmise what Apple is thinking with all this? It's like they want to make it easy for Google to cut into their market. It will be fascinating to see how this plays out once you start seeing G1s everywhere alongside all the iPhones.

Though there has been much debate over just how badly the credit crunch will harm small businesses--in fact, our own Michael Taylor argued that the lending dearth will provide a comparative advantage to small businesses over overleveraged big ones--there is little disputing that, at base, there will be less credit floating around for the next several months at least, no matter what Washington eventually does in terms of buying up Wall Street's most damaged assets.

Still, one beacon of hope were the community banks that would now be in a better position to offer small amounts of credit, even according to the pessimistic Wall Street Journal article from last week, which served as something of a lightning rod for those arguing against a doom-and-gloom attitude as far as small businesses are concerned. In fact, the Journal followed up that piece a few days ago with an article on those alternate lending institutions, including hedge funds and asset-management firms, as well as community banks, who do tend to charge higher interest rates than banks (as high as 15%, in fact) but which may be the only option many small businesses have left.

But today, via the Independent Street blog, we find yet another Journal article (its coverage of this whole crisis has, naturally, been superb) pointing out that community banks may be less of an option than was thought. The reason? They tend to be big holders of preferred shares in Fannie Mae and Freddie Mac, the two government-sponsored entities who lost billions packaging subprime mortgages into those toxic securities you keep hearing about, to the extent that the federal goverment has bailed them out and essentially renationalized them. Specifically, 27% of U.S. banks have such shares, which have naturally been hit extremely hard; and of that 27%, 85% are community banks. (Though it's not immediately apparent why, banks based in Massachusetts are getting hit particularly hard by this dynamic.)

The Journal reports that the American Bankers Association predicts, based on leverage ratios, that the decline of these shares will lead to a total drop in lending somewhere between $76 billion and $114 billion. (The group is lobbying for Washington to pay some amount of dividends on the shares to cushion the blow.)

"These community banks are the lifeblood communities across this nation," wrote the Association's president. Let's hope that as the government figures out how best to bail out the huge banking houses of Wall Street that fuel big corporations, it doesn't forget to help out the smaller banks that fuel the small companies, too.

With Season 5 of The Office premiering tonight, we feel a little weird speaking out against paper, since that is after all the product that provides the livelihoods of the Dunder-Mifflin employees we love so. Still...we wouldn't be the cloud computing, well, triumphalists we are if we weren't urging you to double-down on cloud computing and generally go electronic, a result of which would be a sharp reduction in how much of that dead tree you have floating around. (Briefly: it's cheaper, it's easier, it gives you and your employees more flexibility, your savvier competitors are doing it, and since it requires flexibility it gives small businesses an advantage over large ones.)

On that note, check out this wonderful interview Forbes did with Bill Brikiatis (who comes from document-imaging software company eCopy, and therefore does have quite a horse in this race). While acknowledging that paper will probably never quite go the way of the dinosaur--especially not if Dwight Schrute has anything to do with it--Brikiatis does offer some pretty persuasive cases for putting most of your documents on computers, as well as some sound suggestions for how to accomplish this smoothly and securely.

A few takeaways:
-Electronic is faster. This seems intuitive, but it's worth really thinking about why. Brikiatis offers the example of a document for which you need the signature of several disparate parties. If that's a physical document, it needs to be physically carried from place to place; if you utilize scanning, email, and faxes, the whole thing can be done in a few minutes.
-The transition away from paper requires institutional flexibility, and that gives small businesses a leg up over big ones. "There's less IT bureaucracy in a small or midsize business," Brikiatis says. "In a larger organization, to bring in new applications, you need to go through reviews, checks, processes, approvals. Small and midsize businesses can be much more nimble with IT projects."
-At this point, being primarily paper-based is inefficient, because everyon'e already partly electronic-based. Do your employees accomplish most of their written business-related correspondence by sending letters via the Postal Service--with stamps and envelopes and everything--or, you know, via email? We thought so. You're already partly electronic. Storing vast quantities of documents on paper needlessly makes for a whole separate line of information that requires extra work and time that, as a small business, you cannot afford to spend.
-Don't forget security. There is document-encrypting software, and ways to require passwords at any of several steps along the way to accessing electronic documents. If you do this right, your documents will be far safer than they are simply behind a lock in a metal filing cabinet next to your desk.

Image courtesy of Newsday.

The New York Times carries an interview today with Patricia Martin, the author of RenGen: The Rise of the Cultural Consumer--and What It Means to Your Business. Among other things, Martin predicts that the RenGen--that's Renaissance Generation, the group now in their late teens and twenties--will produce the most entrepreneurs of any generation yet. "Not only are they driven to do original work, but they are going to want to live that out in originally designed careers," Martin tells the paper. "In order to do that, they’ll work hard to create their own enterprises because that is where they can realize their dreams."

The larger takeaway is that there is a wide swath of consumers, cutting across generational and indeed demographic lines--she uses the term "psychographic" to describe this group--who emphasize authenticity over slickness, genuine industrious commercialism over fake pseudo-anti-commercialism, and eco-consciousness above almost everything else.

These are the people whom you are going to be selling to, employing, and, increasingly, competing with, so read the whole thing and take notes. Of course, if Martin's right, then chances are some of you are members in good standing of RenGen, so none of this will be news to you.

You can tell your elected representatives what you think should be done all you want, and it still will not amount to the influence you have with your vote. That said, there are ways to combine the use of your individual voice with your promise as a voter in order to bring about change that could help you and your business.

One of the most valuable insights of Enterpreneur.com's post tackling the question of how to influence policymakers is that in many cases it is your local legislators--those elected at a municipal or county level rather than state or federal--that hold the power to enact, or not to enact, changes that will help you and your business. Since they are also much more accessible, and more amenable to the leverage you can bring as an individual voter as well as important member of your community, the best place to start is likely with them.

So how do you approach your alderman, or mayor, or county representative? For one thing, you can go and see them--unless you're talking about the mayor of New York, these are going to be accessible people. The other key, according a consultant whom Entrepreneur.com talked to, is to show them why what you want is good for votes. This is basic salesmanship: appeal to self-interest. For politicians, self-interest means support in November. Convince them that what you want will increase their vote count, and you have a good chance of getting it; fail to persuade them of that, or make no reference to that, and you're fighting a decidedly uphill battle.

Now, what about state and even federal-level politicians? Here it's a little trickier: they're not as accessible (although you usually should be able to get something in front of your U.S. Congressman if you put some effort into it), and their constituencies are large, making your voice that much smaller. It's here where lobbies such as the National Federation of Independent Business can come into play. Unsurprisingly, we've been getting emails from NFIB constantly over the past couple weeks announcing candidates whom they have endorsed. The one caution we'd strike is that their focus on small business does tend to give them a slight Republican lean. Which certainly shouldn't pose a problem if you're a Republican, too; but Democrats especially may want to be wary of unquestioningly accepting all that the organization says. Still, it's a good resource, and definitely worth joining.

Beyond that, vote on the issues. But most of all, VOTE!

From our corporate sister The Washington Post:

Classic Sleep Products, a Jessup, Md.-based bedmaker, has offered to send--free of charge!--535 mattresses to Congress so lawmakers can work 'round-the-clock to "iron out" (their pun; not ours) the current financial crisis.

"The home furnishings category and the mattress industry in particular has been terribly affected by the sluggish economy and if in this small way I can make a contribution to resolve this problem, I want to do it," Zippelli said, in a company release. He noted that his HQ is a mere 45-minute delivery drive from Capitol Hill.

This little ploy is brilliant--no joke. At worst, this is some publicity Classic Sleep otherwise would not have had. At best, Pelosi takes him up on his offer and, naturally, doesn't possibly let him send the mattresses for anything less than their retail prices, no doubt plus shipping.

Some food for thought as the current economy--yes, the very economy that Classic Sleep is patriotically trying to help fix--severely constricts your marketing budget. Get creative. Don't be afraid to take a risk; don't even be afraid to be outlandish.

We've already discussed how, as the political season heats up, now is the time for you to try to enact changes that will help small businesses. Here's one, as suggested here and here: simplifying the home office tax deduction, which is currently so complicated that only a small percentage of the 8.3 million Americans with rooms in their homes used exclusively for business take it. That means that many owners of the 53% of all small businesses that are run from home are simply not availing themselves of this break, simply because it's too complex.

The general idea of reform seems to involve a standard deduction; in fact, Rep. John McHugh (R-N.Y.) has proposed one worth $1500, which may be itemized. In fact, the Small Business Administration itself, through its Office of Advocacy's Regulatory Review and Reform program, has called for a standard deduction. So have a host of small business lobbying groups.

The National Federation of Independent Business's issue page makes the case for an optional home office standard deduction pretty persuasively. "Home-based businesses incur expenses that would be easily deductible if the businesses were not located in a home," it argues. "The complicated recordkeeping now required by the IRS to qualify for a home-office deduction is a barrier to many who would qualify but don't have the time and staff to do the paperwork."

From an abstract policy perspective, having a deduction that not even a third of those eligible for it actually take (Independent Street estimates that 2.7 million take it out of 8.3 million who are allowed to) is senseless. It would be one thing to oppose the deduction outright: we don't, but there is at least grounds for disagreement there. However, assuming the deduction exists--meaning that policymakers have collectively decided it is better to have it than not to--it ought to be as simple as possible in order to encourage as many people as possible to take it. The current situation promotes a massive inefficiency in which those with the know-how, time, or money to hire a good accountant get an unfair and unanticipated leg up on those who don't. That has to end.

We've pretty steadily followed the conventional wisdom regarding comparisons between Apple's extremely closed iPhone app store, especially when compared to Google's promised mostly open Android app store. This is an important topic, as the app stores are wonderful start-up terrain. We've criticized Apple's heavy-handed and capricious stewardship, while praising Google's decision to open up the store, exercising minimal prior restraint on prospective applications. (The T-Mobile G1, the first phone to run Android, comes out October 22.)

But fairness dictates that we present the alternate viewpoint, which has recently been articulated on TechCrunch and on our sister site Slate.

The TechCrunch post, by Dan Kimerling, is less a theoretical defense of Apple's policies and more an instruction to developers to quit whining. "When you create the platform, you set the rules," Kimerling writes. "If Apple wants to restrict iPhone applications to those that do not compete with features built into the iPhone, well, they can go right ahead and do so." Well, yes, but no one's really arguing otherwise. Few say Apple can't do what it's doing; they say it shouldn't.

Kimerling is more persuasive when he points out that Apple can afford to do what it wants with its app store because developers, eyeing the 14 million (and rapidly increasing) iPhones and the iPhone's superior platform and storage space, will continue to develop for the iPhone because the opportunity is too great to worry too much about Apple's strict patrolling of its app store. This is a useful, realistic corrective to the notion that Apple's behavior genuinely endangers the iPhone's dominance, at least in the short-term. Still, it is the luxury of pundits to tell the world what it's doing wrong, and Kimerling fails to persuade that pundits shouldn't continue to tell Apple to loosen its app store.

On the other hand, in Slate, Farhad Manjoo offers a compelling case for closed-sourcedness. He notes that this is not the first time that Apple has taken a closed-source stance, especially in comparison to its competitors: in the early days of the PC, Apple made the decision to make its operating system compatible solely with its own hardware, while Microsoft made its OSs--the Windows systems--compatible with hardware made by Dell, by Gateway, by IBM, and by whomever else. The result was, to be sure, plenty of market dominance; but also far more technical problems. "Your Windows computer crashes more often than your Mac computer," Manjoo says, "because—among many other reasons—Windows has to accommodate a wider variety of hardware. Dell's machines use different hard drives and graphics cards and memory chips than Gateway's, and they're both different from Lenovo's. The Mac OS, meanwhile, has to work on just a small range of Apple's rigorously tested internal components—which is part of the reason it can run so smoothly."

Moving from the past to the present, Manjoo points to Google's other key open-source decision--making Android available for other phones--and wonders about the efficacy and efficiency for developers of designing Android apps when some Android phones will, for example, have a full keyboard, and some will not?

We dunno. There is no need for Apple to be remotely as harsh about its app store as it has been (which Manjoo readily admits). And we have to think that in the long run, the open-source system is going to produce the more exciting apps--or, more than likely, force Apple to make its system more open-source than it currently is.

Still, there is no denying the advantages closed-source systems have historically had. And there is certainly no denying that, for the forseeable future, developers are going to continue to have to take the risk (and maybe hold their noses) and design for the iPhone.

Check out the comments section of our post from last week on decreasing the amount of paper your office uses in order to lower costs and increase efficiency. None other than Bill Brikiatis, of document-imaging software company eCopy and the subject of the post, weighed in.

Brikiatis (who blogs at eCopy's Document Imaging Blog) writes:

"Thanks for picking up on the Forbes article. Small businesses really do have an advantage because they can quickly start using technology that reduces the constraints of paper in the office.

One other way that we see eCopy customers gaining an advantage is using larger computer monitors to help replace the need to print and store paper documents in file cabinets. If you can comfortably view documents on a monitor, there is much less need for paper. As you probably know, the price of larger monitors has dropped dramatically over the last 5 years. If you can digitize documents as soon as they enter the office, you can reduce costs and speed workflows in your business."

We'd add that even if the price of larger monitors hadn't dropped, it's still probably a worthy investment: one big cost now will save lots of smaller costs in the future.

We were going to write about the Paulson plan and its help to community banks. But the plan appears up in the air now that the U.S. House of Represenatives narrowly rejected it. So, instead we're going to talk about how to get business coming your way. And the answer is specialization.

Ivan Misner's latest column focuses on the admittedly "counterintuitive" notion that the fewer things you give the impression you're able to do, the more people will seek you out to do what you say you can do. As he puts it, "You're an office-furniture wholesaler? No help. You specialize in custom-designed, made-to-order desks, shelves and file cabinets in large lots? Bingo. You've snagged an appointment."

The advantages to specialization:
-You'll be the one they think of. When something directly up your specialized alley comes up, people will head for you. By contrast, if you advertise yourself as a generalist, then people will not head for you--instead, they will head for, well, a specialist.
-It's easier to describe. If you do a specific thing, it's very easy to communicate this to others. If you do many things, by contrast, it is hard to place them all under a single, memorable rubric.
-You are likely to step on fewer pre-existing toes. Misner gives the example of an insurance agent who offers several different types of insurance. For someone to switch to you, they likely need to sever several different relationships--one with a life insurer, another with a home insurer, etc. Offering only life insurance, by contrast, will make someone more amenable to switching to you.

We'd add that specialization is well-suited to this long tail world of ours, in which there are nearly infinite niches to fill. Misner says that trying to be all things to all people will work only if you're Wal-Mart. In other words: you're not Wal-Mart (unless the good people down in Bentonville are reading this, in which case they're probably on the wrong blog); only Wal-Mart is Wal-Mart. And when people need one-stop-shopping, they are going to go to Wal-Mart. (Lord knows there's probably one nearby.) Instead, be there when they want one specific thing, and they want it done well. Be special--be a specialist!

As we said in our previous post, we're going to withhold too much comment on any financial industry bailout until such a bailout appears to have a chance of actually being, you know, enacted. (It's worth quickly mentioning that any such plan is likely to provide some sort of help to community banks, which should help small businesses secure credit from them.) Instead, we thought we'd direct you to this Wall Street Journal piece on alternate ways you can go about trying to get credit during these times. (Of course, this is the same paper that warned that small businesses are going to have quite a time of it trying to get loans.)

For the time being, if you're looking to score financing via the more traditional avenues, good luck getting interest rates lower than 10-15%--and good luck, period. But if you look into these other options...
P-to-P lending Websites. These resources--the article cites Lending Club, Prosper, and Zopa-- are like other social networking sites, in which users set up profiles and seek to get referrals. Here, the purpose is to attach lenders to borrowers. Several sites use credit histories to analyze riskiness. On Prosper, loans are going right now as high as $25,000, with interest rates as low as 6%.
Collateral that hits close to home. Two borrowing methods involve putting up collateral that might make you sweat under the collar, so don't try this unless you've got guts and few other options. Factoring lets you put your accounts receivable up for collateral on a loan, whose interest rate will rarely dip below 15%. This option seems especially risky during a downward economic cycle, when bankruptcies personal and business will not be infrequent, raising the risk that counterparties who owe you money will not always be able to pay you back. Asset-backed loans are just what they sound like, and also tend not to carry low rates.
Work out a better deal. One of your advantages as a small business is the personal relationships you have developed with counterparties, including suppliers. Trying talking to them. They're living in the same business climate you are, so they'll be sympathetic. Maybe you can work something out. One New York City gymnasium even secured a sizable loan from a wealthy customer.
Community banks and credit unions. We've discussed these before: the problem is that most community banks--which have fewer than $1 billion in assets--have been hit hard by the collapse of Fannie Mae and Freddie Mac.
Alter your behavior to reduce your credit needs. Instead of trying to get more credit, try to make yourself less reliant upon it. The article suggests leasing rather than purchasing, where you can. Needless to say, any strategies for imminent, explosive growth should probably be postponed for the time being.

The last option is the best one. The fact is, there really are no favorable credit situations right now, so the best thing you can do is to try to avoid them altogether. The good news is that small businesses are actually less dependent on credit than bigger ones to begin with--this is Michael Taylor's point--which should give you an opening to cut into their business. Moreover, small businesses can afford to be more flexible. That's going to pay off right now. Put yourself on as strict a credit diet as you can, and wait this is out.

If the performance of the Dow Jones Industrial Average yesterday is any indication, the broader business community was not well served by the failure of the U.S. House of Representatives to pass the $700 billion bailout plan (although this morning the Dow is up over 250). Still, this delay could and should provide an opportunity for small businesses to lobby and agitate for a bailout that helps them, too.

Mostly, the small business lobby has called for the plan to be passed. The thinking behind the National Federation of Independent Business's endorsement appears to be: small businesses need credit; the credit markets need the bailout; therefore, the bailout is good. (Click on the endorsement to get to a recording of a conference call hosted by NFIB at which Bush administration officials explained the bailout.)

The NFIB was not pleased with yesterday's events. "I've had the opportunity to hear from many small business owners over the past week," said NFIB President and CEO Todd Stottlemyer. "They are angry and upset, and they have a right to be. Small business men and women did not create the financial mess on Wall Street."

Nor was Sandy Baruah, the acting administrator of the Small Business Administration (appointed by President Bush), who told Sharon McLoone over at our brother site washingtonpost.com, "The House action today is disappointing -- clearly there is more work to be done."

McLoone quotes several other prominent members of the small business community, including officials from the International Franchise Association, the Small Business and Entrepreneurship Council, and the National Association for the Self-Employed also expressing their disappointment with Congress and general support for the bill.

Maybe most telling, though, was a poll conducted last week by the National Small Business Association finding that 44% of small business owners simply didn't know if the bailout, if passed, would affect them positively or negatively.

It's hard to blame them. The bailout has its eyes set on propping up big financial institutions, both to save that powerful sector and to enable it to keep credit flowing to other industries. (And incidentally, it is worth noting that though the bill would commit to using up to $700 billion, it would basically have to end up costing far, far less than that admittedly huge figure.) With the exception of the help to community banks--more on that in a future post--there is little in the bailout that even directly, or even indirectly but at a close remove, is targeted to help small businesses.

So what should small businesses want out of this? The NSBA has some ideas.
Help for community banks. These smaller institutions, which have been ravaged by the collapses of Fannie Mae and Freddie Mac, should be helped out so that they can lend to local small businesses.
The credit card reform bill. The House has actually passed a "credit card holders' bill of rights," and now the U.S. Senate can vote on it. Nearly half of small business owners have reported using credit cards as a financing source: a risky one, because the interest rates tend to be high, and a fickle one, with the credit card companies able to alter the rates on a whim. NSBA is touting passage of this bill as a good piece of companion legislation to the bailout.
Fully fund the SBA. The focus is specifically on the SBA's flagship program, the so-called 7(a) loan guarantee. The Small Business Technology Council has called for the fees on these loans to be waived due to these extraordinary times.
Deal with energy and health care costs. No one expects the government to get to these issues, say, this week. But it would be hard to think of something more important to small business' long-term health than bringing down these tremendous, and unpredictable, costs.

In one sense, the timing of all of these events is good: it's right before Election Day. This is when your representatives will listen to you most. Now is the time to talk to them and demand that your government--federal, state, and local--not forget about small businesses as they try to help the economy.

Here's a bit of counterintuitive advice, courtesy of Entrepreneur.com: now is the time to launch an Internet company! No, the author isn't unaware of what's been going on in the economy (although the article was published last week); and, no, this isn't 1997.

Actually, the whole thing makes a lot of sense. For example, did you know that:
-Online retail is growing? In the first quarter of 2008, online sales were up 13.4% from two quarters before.
-It is not unreasonable to launch a viable site with only $3,000-$5,000 in start-up capital? Thank such innovations as cloud computing for the immense cheapness with which surprisingly robust Net businesses can be maintained. (It would be nice to get that standard home-office deduction to continue to make things cheaper, and fairer, too.)
-High gas prices have caused folks to alter their shopping habits to reduce gas consumption--that is, they're shopping more online now?

All true! And anyway, fortunes are made when no one else is looking (or starting new companies). Or they can be.