Your genetic tolerance for risk, coupled with new productivity gains through smart technology, can help your company revolutionize its industry.

Mankind’s most innovative, large-scale achievements: building the Pyramids of Egypt and the Panama Canal—even putting a man on the moon—were each accomplished with roughly the same number of people: 100,000. Luis von Ahn, the Carnegie Mellon professor who researched these epic projects, makes the observation that 100,000 may well be the practical limit on the number people it was possible to organize, using pre-Internet technology. Von Ahn is fascinated by the question: If we can put a man on the moon with 100,000 people, what can we do with 100 million?

I’m interested in the opposite question: If it took 100,000 people to put a man on the moon 40 years ago, how many would it take today?

The answer is certainly a fraction of that number: Elon Musk’s SpaceX company is successfully sending unmanned vehicles into space with fewer than 2,000 employees. And many more of the best-known new companies in the United States today also employ very small staffs. Matt Ridley, author of The Rational Optimist, notes that the size of the average American company is down from 25 employees to 10 in just 25 years.

Most of the national discussion around the current U.S. recession has focused on the negative impact of this radical increase in productivity: our “jobless recovery.” I think this is a pressing issue that industry and government need to address. But there is one simultaneous, positive impact on our society and economy from smaller company sizes that we should also include in that debate:

Product evolution and innovation happens faster now than ever before.

Scientists study fruit flies to gain rapid learning about genetic traits specifically because they are prolific, inexpensive to maintain, and adapt quickly to change. You could say the same about small companies today. For example: Years ago, two behemoths owned the photography industry, Kodak and Fuji. But innovation in photo sharing has been driven by the dozens of start-ups like Flickr, Ofoto, Photobucket, Picasa, Shutterfly, and now Instagram, that have launched over the past 10 years. Similarly, photo taking has been revolutionized by software and device companies such as Apple, RIM, Nokia, and Sony. It’s my contention that rapid product development and market testing of their products and services—something not possible inside most big companies—is what’s created the most value for the photo-sharing public over the past decade. And Kodak declared bankruptcy last week.

There are numerous other industry examples, and I’d welcome hearing from readers about their personal experiences. It’s my contention that competition among a large number of small teams to solve important problems gives us, collectively, the best shot at getting to a right answer, the best product and the biggest breakthroughs.

It’s my contention that competition among a large number of small teams to solve important problems gives us, collectively, the best shot at getting to a right answer, the best product and the biggest breakthroughs.

Astro Teller, who leads New Projects for Google, told a great story to the Mindflash.com staff recently that made this point brilliantly. A university testing incentives to innovation ran an experiment in which students in one pottery class were told their entire semester grade would be based on the quality of their final piece. Students in another class were told that 90 percent of their grade would be total weight of the clay they fired during the semester, and just 10 percent on the quality of their final piece.

The final pieces created by the second group were incomparably better, because those students learned more, went faster and explored more. The takeaway has to be that in an environment where we reward experimentation and reduce or eliminate the risk of failure, we get better outcomes—sooner.

Now, I readily admit that it’s one thing to burn through a lot of clay, and another thing entirely to burn through people. The human and economic cost of assembling and dissolving businesses can’t be ignored. But for those with the willingness and ability to try, fail and try again, these technology-driven productivity gains are driving each of us the opportunity to create something truly innovative for the benefit of all.

This was recently confirmed for me by a quick tag-cloud analysis I did of the biographies of about 100 of the country’s leading technical, political and thought-leaders.The word appearing most frequently in their biographies? Former.

Source: Start-up

The first place your customers meet you is online. So it’s time for a spot check: Are you looking your best?

Customer relationships are job No. 1 for any business, but building them with customers who experience your product primarily online and over the phone requires a unique blend of intentions, knowledge, and process (all aligned with clear expectation-setting). The goal is to quickly forge trust in the ability, reliability, and strength of your service and its team. These overall truths of your product and team are vital to delivering a customer experience that bonds the customer to your brand and your service ultimately resulting in a lasting relationship connection.

These days relationship building, especially online, is not for the faint of heart. Much of the Web’s transactions and interactions are set up as self-serve and therefore, by design, happen quickly. In lieu of a first-person interaction, first impressions on the Web stem directly from the initial customer experience on your website, social channels, or online conversations reviewing your service in communities or forums.

Every time a customer experiences your product or service, he or she should get clear brand and relationship context to support their purchase experience. Without it, a less-than-positive first impression becomes a potential disaster. Conclusions are drawn quickly, leaving you with limited opportunities to clarify, confirm, and resolve problems before your customers express dissatisfaction to their social networks. Both delight and disappointment can spread like wildfire at a moment’s notice.

So what can you do to ensure your customers get a clear sense of your brand, and the relationship you want to create with them, when they make an initial commitment to your service? Here are several ideas:

Be Explicit With Your Customer Philosophy.

Make it visible on your website. Communicate it in your newsletter. Create specific marketing campaigns around it. Write it on your wall in the office. Reinforce the philosophy with employees, vendors, and partners—anyone who has a role in the direct or indirect relationship with your customers. At Get Satisfaction, we express our philosophy through a document called the Customer/Company Pact. We encourage our customers to sign it and incorporate the principals in their own business. It’s a foundation to the way we do business and core to our culture.

Keep the Feedback Light “Always On.”

The days of monthly webcasts, quarterly surveys, annual conferences, and expensive one-off focus groups are becoming antiquated as relationship development moves further. Online customers want to be able to share ideas and insights wherever they are and whenever they decide to. In fact, they expect it. Encourage always on feedback by creating a visible way to gather it directly from your website and in your social channels as well.

Showcase Your Customers’ Success.

Shoot fun videos demonstrating your customer’s success. Surprise them with thank you notes, fun schwag and other material that supports your philosophy. Offer opportunities for them to share their insights with other customers, and employees too. Publicly recognize them for their expertise.

Surprise Customers With a Different Form of Communication.

In our crazy online, e-mail-centric worlds, you can shift a relationship by simply reaching out voice-to-voice. Yes, even a simple voicemail can have a big impact. The power of the human voice signals a different intention than can be typically be expressed through an e-mail. Even though we often shy away from making a call, sometimes it’s just what you need to build a memorable connection with a customer who typically only gets email communication often filled with corporate speak (jargon).

Build a Highly Discoverable Customer Community.

Make it easy for your customers to find and engage with like-minded peers. Make sure your customer communities are integrated with your social channels and your web site, as well as plugged in to your customer portal or CRM applications. True engagement happens when customers are actively helping each other, solving problems, expressing ideas for ways to improve your service, as well as giving praise for exceptional service and features. Peer-to-peer relationships are central to engagement because they build a natural tone of trust, which can be echoed, supported, and amplified by company employees too.

Making sure that the customer’s experience has the right brand and relationship context is core to building amazing long-term relationships with your customers.

Think about your business: How are your brand and your overall customer experience building trust with your customers? How engaged are your customers?

Source: Start-up

It’s in style to dismiss business school, and higher education in general, as unnecessary. But our company wouldn’t exist without it. Here’s why.

Fifteen years ago my co-founder and our president, Bill Haney, wrote an article called “The Power of Invention,” which discussed the core and enduring American spirit of innovation. He also posited that our innovative spirit is inextricably linked to our country’s higher education system.

Of course, that was back before business school fell out of vogue and dropping out of Harvard was a pre-requisite to becoming a tech-baron. Let’s face it, higher education may or may not be worth the personal investment. But we certainly came up with some intriguing ways to put it to work for our business.

As Bill wrote: “if you looked at the vast history of the United States…the key in building products and companies of value [is] connected inherently to our fundamental American values around education…The wealth of technology that is driven by government, university and nonprofit laboratories throughout our country is unique and staggering.”

We really believe in American investment in this kind of innovation and in the early days at Blu, we found ourselves searching for a competitive, tech-oriented basis on which to build a firm that would revolutionize a backward, bankrupt, and environmentally detrimental homebuilding industry. So, we transformed Bill’s words into action, and turned to some of America’s greatest learning institutions to help us establish the foundation for our company—and the unique building-technology that is crucial to its success.

Our first stops were the Massachusetts Institute of Technology and Rhode Island School of Design, where, among other things, Blu sponsored two years of seminars. There, we were able to draw on the invaluable brainpower and raw enthusiasm of graduate students and professors in architecture, industrial design, computer science, logistics, and interior architecture.

We started with a review of the history of housing in the United States, which lead us to ask—and try to answer—some very big questions.

Why had industrial housing succeeded in Western Europe, but not the United States? How was Toyota able to apply its intelligence in car making to its precision-built homes in Japan? And most importantly, how and why had home building in the United States become such an over-bloated, low-tech, energy sucking, and consumer-unfriendly industry?

Students and professors got down to business and contributed some of the leading thinking on combining architecture and computer science. And, because these institutions attract talent from around the world, this “R&D” yielded perspectives that took into account many different global building systems and green building products. Moreover, doing R&D this way is at a relatively fixed cost, and fixed timeline –you get to see results the end of each semester!

Through this research—and subsequent research from University of Michigan professors and students—we have re-imagined homebuilding and built a new paradigm for the entire industry:

• Our Blu | 3-D Configurator allows consumers to visualize and customize homes completely online.
• Operational advancements and a proprietary steel framing system have allowed us to, in factories, build homes that have the high ceilings, open spaces, and vast windows expected in a custom-built home. Our homes also deliver high resistance to extreme weather and seismic challenges, and come at a fixed, pre-agreed cost.
• And finally, we invented a way to connect product design and visualization directly to the manufacturing process—something standard in the auto and aerospace industry, but, until now, nonexistent in homebuilding.

We also researched what consumers felt were lacking in homes—namely, a connectedness to nature, lower energy bills, long-term durability, and integration of technology—and used that information to model passive solar, renewable energy, air exchange systems, and green fixtures that would make our homes beautiful, healthy, and 50 to 70 percent less expensive to operate. In other words, we’re letting people live greener, more beautiful lives—and save money.

We founded Blu on the principle of revolutionizing a very sick industry. We are still working hard to achieve our goal. Staying connected to and continuing to learn from America’s great academic institutions is still very much a part of our strategy.

And why not? Students and professors alike are excited and inspired to contribute to something “real,” and we are glad to have such a variety of perspectives, yielding high-quality, thorough research.

Source: Start-up

Innovation contests can spur new products, and boost worker morale. Are you up for a challenge?

For years, Elastec/American Marine, a Carmi, Illinois–based maker of equipment used to clean up oil spills, had been tinkering with plans for a promising new oil-recovery system. But the project never got off the back burner. Things at the $30 million company were rolling along smoothly, after all, and CEO Donald Wilson was unsure about the potential market. The project might still be languishing were it not for the 2011 Wendy Schmidt Oil Cleanup X Challenge.

Sponsored by the wife of former Google CEO Eric Schmidt, the contest offered a top prize of $1 million to the team able to create a device capable of recovering oil from the ocean’s surface at a rate of at least 2,500 gallons per minute. That’s no small task: The industry standard is less than half that amount, about 1,100 gallons per minute. As the largest manufacturer of oil-spill-cleanup equipment in the U.S., Elastec felt the pressure to respond to the gauntlet being thrown down. “We like challenges, and this certainly was a challenge,” says Wilson.

The oil-cleanup challenge was presented under the banner of the X Prize Foundation, which is best known for contests designed to spur innovation in aerospace and, more recently, the understanding of the human genome. But the foundation is hardly the only outfit sponsoring such contests. In this age of crowdsourcing and open-source everything, innovation challenges can be found in nearly all industries. DARPA, a division of the Department of Defense, is well known for its annual challenges, which have included competitions for creating unmanned vehicles and re-creating shredded documents. Likewise, Netflix famously offered $1 million to whoever developed the algorithm that best improved upon its movie-recommendation system. For contestants, the benefits of such challenges often go beyond the prize money. Win or lose, competing can speed product development, create a team spirit, and produce some free publicity.

Wilson first read about the X Challenge when online registration for the prize opened, in October 2010. Given the difficulty of the undertaking, there was plenty of internal discussion about whether Elastec ought to take the plunge and enter. And then there was the question of whether it truly had a shot at winning. A number of team members were openly skeptical about the likelihood of even completing the project on time.

To begin with, the company’s existing technology had never achieved the kinds of numbers the contest required. What’s more, even though Elastec had cooked up the basis of its new idea years earlier, it was still a tall order to get it built, tested, and ready to compete within the contest’s required time frame of 90 days. “We always give at least a year for any new product development,” says Wilson. “And for this one, there are a lot of things going on with the design. It might otherwise have taken us, maybe, five or 10 years.”

Were it not for Wilson’s faith in the proposed technology, which involves a series of rotating discs designed to skim the water’s surface and capture the oil from it, Elastec might have passed on the challenge. “We felt it was going to be head and shoulders above anything else that was on the market,” says Wilson.

Besides, there’s nothing like a challenge with a deadline to light a fire under people. “Contests like this bring benefits like set timelines and deliverables that focus you as a business owner to get something on paper, a prototype, and something out the door,” says Megan Mitchell, senior associate director of Wharton Entrepreneurial Programs at the Wharton School of the University of Pennsylvania.

Wilson’s enthusiasm for the project soon drifted down to almost every one of the company’s more than 140 employees. “Morale was very high,” Wilson says. “We asked a lot of people to get up early and stay late and work weekends—but it was still easy to motivate people to be involved.”

The company spent nearly $600,000 building the prototype. Some 350 companies entered the contest; Elastec and the nine other finalists were invited to demonstrate their devices at the National Oil Spill Response Research & Renewable Energy Test Facility in Leonardo, New Jersey. The facility contains a giant water tank designed to simulate the saltwater and wave conditions of an actual oil spill. To Team Elastec’s great excitement, the company’s new oil skimmer performed as intended.

When the results were announced at an award ceremony last October in New York City, Elastec walked away with the top prize of $1 million. Its device achieved an efficiency rate of 89 percent and took in more than 4,600 gallons of oil a minute—more than four times the industry standard, and nearly twice that of the nearest competitor.

In addition to the prize money, which Wilson says will be used to recover some of the costs associated with the contest as well as commercialize its new technology, Elastec can now market to its clients an oil-removal device that has been field-tested and recognized by a panel of industry experts as demonstrably better than anything else available. Attracting clients is also likely to be a little easier, given the extensive media coverage the company received after the X Challenge win, which included interviews on CNN, Fox Business News, and National Public Radio. Wilson says Elastec has received calls from numerous customers around the world inquiring about the new technology.

For all the success Elastec had, Wilson acknowledges the risks that failure in the X Challenge might have entailed. The money and manpower sunk into the challenge would have been wasted, at least to some extent. Morale might have been compromised. Food for thought for any company with thinly stretched resources that is considering participating in an innovation challenge.

Besides the oversize, lottery-style check, the biggest takeaway for Elastec has been the sense of accomplishment employees feel in bringing a technology from idea to fully functioning prototype that shattered existing industry standards. “We didn’t leave any stone unturned,” says Wilson. “We did a huge amount of engineering, research, and testing. We did a lot of smaller-scale testing. But we can only test. You never know until you actually get into the tank.”

Up for a Challenge?

Innovation contests abound. Finding them is easy, thanks to a number of websites that serve as platforms that allow various organizations to post their challenges. Here are three sites that would-be contenders should check out:

1. InnoCentive.com

InnoCentive.com hosts more than 120 active challenges in a number of industries, although it leans heavily toward engineering, chemistry, and health care–related competitions. (Example: $30,000 to develop a room-temperature-activated adhesive)

2. Kaggle.com

For number crunchers, Kaggle.com is the leading hub for data-mining and predictive-modeling challenges. (Example: $3 million to develop an algorithm that uses available patient data to predict and prevent unnecessary hospitalizations)

3. BigCarrot.com

Still in beta testing, BigCarrot.com posts more lighthearted challenges, usually with less-lucrative prizes. (Example: The Methuselah Mouse Prize—$100 to the team with the longest-living laboratory mouse)

Source: Start-up

Is your Facebook page a real snoozer? You won’t make much money that way! Even the smallest business can make money on Facebook. Here’s how.

As a small-business owner, you probably don’t have the resources that a large corporation employs for online advertising campaigns, but social media consultant and author Brian Carter says that even solopreneurs with limited funds can gain the competitive edge in this vast cyber-arena.

“For years the Internet has provided us with the wildest opportunities that haven’t been very competitive or expensive,” says Carter. And with all of these options available to us, Carter is most passionate about Facebook advertising. “It provides us with the biggest opportunities—it’s a great place to profit,” he says.

“Advertising on Facebook is the biggest opportunity for businesses large and small,” Carter says. “What Facebook advertising does, which is great, is to allow you to reach a TV-sized audience, locally, nationally and even internationally, and still target it the way you would in any internet marketing campaign, yet start with just five bucks a day. To me it’s revolutionary because businesses can reach an audience they couldn’t have ever reached before.”

If you’ve jumped into the Facebook frenzy, like millions of business owners, by creating a Facebook page: congratulations—but that simply isn’t enough. “There are a lot of problems with pages,” Carter claims. Recently, he combined efforts with EdgeRank Checker and found that the average page across 4000 pages is only reaching 17 percent of their fans. So if you have 100 fans, you may only be reaching 17 people with all of your hard work! “The downside of the page is that you’re not visible to all of your fans,” says Carter.

Like any marketing campaign, it’s apparent that you need a strategy before you launch your page. So how can a small business benefit from what Facebook has to offer? Here’s what I learned from my conversation with Carter. And I’m learning much more from his most recent book release, The Like Economy: How Businesses Make Money With Facebook.

• Combine your Facebook marketing plan…
  ….with the strategies that you are best at. If you’re good at e-mail marketing, for instance, use Facebook ads to get more e-mail subscribers. If your website converts traffic really well, use your page to drive traffic there. Always plug into what you already know works well for your business.
• If you’re growing fans through Facebook advertising…
  …get people to click “Like” right on the ad. You will get a lot cheaper fans that way than if you send them to a fan page through your ad. If you run an ad that sends people to a custom tab because you want to get an opt-in, that’s the same thing as sending them to another website, and you may not want to do that. Not everyone will put in their e-mail and click like so you are dividing your efforts. Decide first if you want fans or e-mail subscribers. If you want fans, don’t send them directly to a custom tab.
• Think of your page as a social e-mail.
  There’s a chance that followers will see your updates in their feed, but you have to really capture them within your first few posts. There are parallels to e-mail in this strategy; not everyone will open them. If you get a 30 percent open rate, you’re doing great. On Facebook you can use the same strategies to do really well. The difference is that with e-mail marketing you don’t want to send out e-mails everyday or you will lose your subscribers.
• If you’re not sure…
  …whether the greatest benefit will come from sending people from your ad to your site, your Facebook opt-in page, or gaining fans through prompting them to click “Like” right on the ad, test them all! See how much it costs you to acquire a fan, and how much traffic you get from those fans, versus the cost of acquiring an e-mail and the ROI on that e-mail address.
• Engage with your fans in your posts.
  Don’t make every post a call to action. You want to turn the folks who like your page into true fans of your brand.
• Boring Facebook pages won’t get you far.
  If your business isn’t something that most people would consider exciting, like culture, lifestyle sports, animals, dating, kids – or anything that people get gushy about—go the opt-in route rather than the fan marketing route. If your business is attractive to many consumers, use pictures in your ads to entice them to click like. If your brand allows you the creative streak to through in a picture of a puppy, cat or baby, you’re golden! People will click on your ad.
• Remember one of the key differences…
  …between using AdWords and Facebook advertising. That is, in order to generate revenue through online advertising, you must reach the right people, with the right message, at the right time, with the right offer. It’s possible to do this with AdWords and Facebook ads. The main difference is that AdWords is about fulfilling demand: finding the small set of people who are ready to buy, or very close to it, and capitalizing on finding people at that stage of the sales funnel. With Google you are targeting people by what they are looking for. With Facebook you are targeting them by who they are and what they like. These are people who are likely to buy from you at some point which is a larger group of people. There’s more sales potential overall. But be careful not to spend too much money on people who are going to wait three or four years to buy, unless you have a sales cycle that is naturally that long. But you may be able to get them to buy sooner than they would have by posting enticing posts or with compelling conversion practices on your website.
• Facebook page insights…
  …can be a great resource to learn about your audience. You’ll find this tab on your admin panel on Facebook in the left hand column. Look at the graphs that tell you how many people are liking you per day, how many people are talking about you, sharing your posts, etc. Notice what type of posts get more engagement than others and create more like them. Know your audience, put yourself in their shoes and engage them!

In light of Google’s new Search Plus Your World, I couldn’t resist asking Carter if he thought Google+ will give Facebook a run for its money anytime soon. “Google+ can become big if it becomes more sticky—if we can enjoy using it more,” Carter says. “Right now it’s all the early adopters on Google+. It’s not really an opportunity for most marketers because there is not enough of a general audience there. Google+ has to be more fun to use to attract that audience. Search Plus might be a strong-arm tactic to try to force it to happen faster.”

He continues: “It certainly could be a big deal at some point but there are phases of adoption of something new—like Facebook was in 2009. There aren’t enough people on it in this phase to do any real marketing. But once it reaches enough adoption the network effect happens. You can reach more than half of the United States with Facebook ads, and Google+ is just not there yet.”

Join me on Monday, January 23 on Toginet Radio, where Brian Carter will join me to talk more about how small businesses can make money on Facebook. If you can’t make the live Million Dollar Mindset broadcast at 2pm eastern, download the podcast anytime after 4 p.m.

Source: Start-up