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 Entrepreneurship Insights

April 2014

Here is the latest Entrepreneurship Insights. It's about the practice of entrepreneurship - creating and building something of value from practically nothing; the perception, creation and distribution of value and benefits to individuals, groups, organizations and society,

hoping you enjoy reading


Storyboarding-a Secret Weapon for Startups

Storyboards-what are they?

Why would a startup want to use the storyboard technique? And for what? Surely that is just for film producers. Telling stories is one of the most persuasive ways that startups can get their message across-to customers, investors, bankers, partners.


In my book, Telling Startup Stories, I describe the use of storyboarding to put together a plot. A storyboard is a graphic organizer that provides the viewer with a high-level view of a project. The technique that does indeed come from the cinema industry, but it also helps to put together your business story.


I use the example of one of my own startups that never finally saw the light of day, but it will show you the process of storytelling as perfected by Pixar. It does not use images, but is based on a simple fairy story, and it goes like this:



You can use the same boxes as I did, starting with "Once upon a time" and then fill in your own story. Other tools for storyboarding include Storyboard That, a freemium app. If you prefer working with paper, then you should try presentationzen, a storyboarding sketchbook. If you are an Evernote user, you might prefer Penultimate that you can download for free. Lots of other low-cost options exist.


A Secret Weapon?

I call storyboarding a secret weapon, because most startups struggle to get their story across and this technique helps them get to the crux of what they want to tell much faster than lengthy presentations. It can be done inexpensively and helps a team organize their pitch effectively, as well as having fun while they do it.


It's not a technique taught in business schools or in wide use just now. On the other hand, the content marketing professionals are using it in their work, often at high cost to the client. You can use it on a do-it-yourself basis, providing you use the kind of discipline I suggest above.

Income Disparity & Startups

Income disparity is growing. Among S&P 500 companies (April 2012), the average pay of CEOs was $12 million a year, while the average employee income is $35 thousand, or a difference of 354-to-1. 


Between 1976 and 2012 the share of US income earned by the top 1% almost tripled, rising from 9% to 24%. 


Among advanced economies, studies show close correlations between a nation's degree of income inequality and its rates of homicide, imprisonment, infant mortality, teenage births, and obesity. 


You might say that it's the flip side of successful entrepreneurship. But is it? A shrinking proportion of Americans, and people in other industrialized countries, believe that they can have the opportunity to start a business.


The Pew Research Center found that, in 1999, 74 percent of Americans agreed with the statement "most people who want to get ahead can make it if they're willing to work hard." In 2014, that percentage had declined to 60 percent. The share of Americans who believe that the economic system in this country is "basically unfair" since "all Americans do not have an equal opportunity to succeed" increased from 29 percent in 1998 to 44 percent in 2013, a Gallup poll revealed.


The Price of Inequality 

The prevalence of these attitudes have a great impact upon the world of startups. Bankers are naturally more cautious about lending to them, potential partners tend to become more risk averse, job candidates can become more hesitant to join a startup. Entrepreneurship in the US dipped in 2013, returning to pre-recessionary levels of 2006, according to the Kauffman Index of Entrepreneurial Activity.
In his book, The Price of InequalityJoseph E. Stiglitz exposes the efforts of well-heeled interests to compound their wealth in ways that have stifled true, dynamic capitalism. He says, "we have a political system that gives inordinate power to those at the top, and they have used that power not only to limit the extent of redistribution but also to shape the rules of the game in their favor."


Outside the political system, companies can make an impact directly. Whole Foods goes so far as having a salary cap for its top executive, of no more than 19 times the company's average annual wage. More and more companies are following suit, because it's good for business, as well as being in the interest of morality.  


So What Can You Do About It? 

Paul Graham suggests, "There is of course a way to make the poor richer without simply shifting money from the rich. You could help the poor become more productive-for example, by improving access to education. Instead of taking money from engineers and giving it to checkout clerks, you could enable people who would have become checkout clerks to become engineers."


As an entrepreneur, you may find it helpful to have full disclosure on earnings. Daniel Isenberg, Babson professor, suggests (Fast Company blog April, 2014) entrepreneurs should engage in honest dialog, considering that wealth inequality is often the 'elephant in the room.' They should also give back, he says, noting that entrepreneurs are disproportionately more philanthropic. He suggests they learn more about wealth and inspire latent entrepreneurs.


At startup, staff may be surprised just how little you are taking out of the business. Henry Ford understood this, and paid workers at Ford more than their counterparts at other industrial companies, reasoning that helping to expand the new middle class was a way to expand the market for Ford's product. Costco pursues the same ideology today.


There are many other ways that you can contribute to more equitable income distribution. Here are ten:

  1. Avoid dealing with the mega-banks - Citibank CEO's 2014 salary package is $14 million; likewise at BOA, and at Chase it's $20 million.
  2. Do your banking with a locally-owned bank, a credit union, or at least a bank with an 'outstanding' rating under the Community Reinvestment Act.
  3. Get insurance from a mutual or cooperative insurer. The Prudential CEO's compensation last year was about $20 million. Is he worth that?
  4. Check your suppliers' compensation policies where you can, or set your purchasing policies to include coverage not only of their environmental performance, but also social practices.
  5. Buy 'local', where you have a better chance of knowing about a company's employment and salary policies.
  6. Join your State business social responsibility organization, such as VBSR in Vermont, or a local chapter of Business for Shared Prosperity. Raise discussion about income disparity in your local chamber of commerce or trade group.
  7. The World Economic Forum named income inequality as "the risk that is most likely to cause serious damage globally in the coming decade," Connect with local leaders who share the opinion, like the new Mayors of New York and Seattle.
  8. Provide incentives for your company to give employees a stake in it: establish an ESOP. Make work places pro-family. Provide day care help, wellness centers, time off for family emergencies.
  9. Follow the work of organizations such as the University of Texas Inequality Project, to keep yourself informed.
  10. Take steps as early as possible to become a certified B Corporation. Simply completing the questionnaire will have you adressing the issues, even if you do not complete the process.
Student Startups
I teach entrepreneurship and strategy on the MBA in Managing for Sustainability. That's fun enough. What makes me proud, though, are the startups of many of my students.

The latest is a non-profit that uses the crowdfunding model to raise money for land conservation: The Natural Capital Network was founded by an alum, Galen Guerrero-Murphy. Clean Power Perks is a rewards program for buyers and users of clean energy, established by a graduate, whom I still advise, Tess O'Brien. Noospehere Marketing produces strategic custom content for visionary organizations. I advised founder Kathy Hipple on her capstone project, from which the company has grown.

There have been many more, and doubtless yet others will spring from my next Entrepreneurship course, starting in May.
Thanks for reading this issue of Entrepreneurship Insights. If you have any comments, or would like help with your startup, do write to me: I also offer a 7-day turnaround business plan review. Try me!

Will Keyser
a.k.a. The Startup Owl

In This Issue
Quick Links
Telling StartUp Stories: Keep the End in Mind
by William Keyser
Kindle Edition

The Price of Inequality: How Today's Divided Society Endangers Our Future
by Joseph E. Stiglitz
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