March 2011

Video: Deutsche Bank’s Moec Says ECB May Buy Portuguese Debt

March 24, 2011

March 24 (Bloomberg) — Gilles Moec, co-chief European economist at Deutsche Bank AG, discusses the likelihood of a Portuguese bailout after Prime Minister Jose Socrates offered to resign when plans to cut the budget were rejected by parliament. He talks with Mark Barton on Bloomberg Television’s “Countdown.”

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JBG, Rockwood Sell 1101 K St. in DC for $199 Million

March 24, 2011

JBG Cos. and partner Rockwood Capital sold the 293,598-square-foot, 10-story office building at 1101 K St. NW in Washington, DC, to a joint venture between the Rockefeller Group (RGI) and Mitsubishi Estate New York. Situated between 11th and 12th streets, the building is one block from the site of the large City Center redevelopment project and is currently 81 percent leased. Major tenants include FTI Consulting with 95,997 square feet, The District…

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Potential Sale of Grubb & Ellis Dramatizes Ongoing Shift in CRE Brokerage Landscape

March 24, 2011

The trend among the business services sector, including those providing commercial real estate services to other businesses, appears to be get bigger and go global, or go small and specialize by serving a specific niche or providing high-touch service. With the largest CRE companies increasingly on the hunt for external growth opportunities and mid-market firms under rising competitive pressure to sell or merge in order to maximize their service…

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Survey: Investor Optimism Rising As CRE Recovery Slowly Gains Traction

March 24, 2011

Investors are growing more confident that the commercial real estate industry is moving past the bottom of the cycle as the economy adds jobs and property fundamentals slowly improve, according to the results of the first-quarter 2011 PwC Real Estate Investor Survey. Tracking the expectations of survey respondents for the future performance of the office, retail, industrial and multifamily property sectors from 2011 to 2014, PricewaterhouseCoopers…

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Investors Returning To Retail Single Building by Single Building

March 24, 2011

As the Great Recession recedes, consumers, retailers, investors, landlords and lenders are re-emerging and the prospects for retail commercial real estate look better than they have in years. One has only to look to one-off, stand-alone retail properties that make up the bulk of a market’s retail inventory to see how the recovery is beginning — in very small increments. Investors appear much more willing to invest in stand-alone real estate…

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CRE May Hear Static from Proposed AT&T T-Mobile Merger

March 24, 2011

Following AT&T Inc.’s blockbuster announcement that it has agreed to acquire the T-Mobile USA subsidiary of Bonn, Germany-based Deutsche Telekom for $39 billion, the firm once known as Ma Bell, will be looking to shave billions in costs from the combined firms. Not all of those cuts will come from facilities, but the mega merger will undoubtedly impact the commercial real estate market. By the third year out from the merger, AT&T said it is looking…

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Investor Survey:Optimism Rising As CRE Recovery Slowly Gains Traction

March 24, 2011

Investors are growing more confident that the commercial real estate industry is moving past the bottom of the cycle as the economy adds jobs and property fundamentals slowly improve, according to the results of the first-quarter 2011 PwC Real Estate Investor Survey. Tracking the expectations of survey respondents for the future performance of the office, retail, industrial and multifamily property sectors from 2011 to 2014, PricewaterhouseCoopers…

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Real Money: SilverLeaf Looks To Double Note Buys This Year

March 24, 2011

SilverLeaf Financial in Salt Lake City has acquired more than $450 million of performing and non-performing loans since the company was founded in 2008, and has its sights on matching that milestone in 2011. “We have seen a number of active sellers this quarter,” said Shane Baldwin, SilverLeaf Financial’s CEO. “Currently there is over $2 billion of notes on the market expecting to be sold by quarter end. We expect to be very active this quarter…

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Peter Guber: It’s the Story, Stupid

March 24, 2011

Sometimes you learn more from your failures than your successes. One of the most painful times occurred in early 2000. My goal was to build the ultimate state-of-the-art baseball stadium in the entertainment capital of the world, Las Vegas. At the time, Mandalay baseball owned five professional minor league franchises across the country, including single-A, double-A, and triple-A teams. If we accomplished this goal, it would have elevated Mandalay’s sports entertainment business onto the national stage. Our success hinged on my ability to persuade Las Vegas’ chief politician, Mayor Oscar Goodman, to lead the campaign for a municipal bond to fund this multimillion dollar civic project. And what did I do? I spouted facts, figures and information! I failed to tell the mayor a story, aspirational or inspirational. Instead, I went informational and I failed in my goal to get them to build our stadium. And that’s when the light bulb turned on: a-ha! You forgot to tell a story, stupid! The epiphany that here I was, a teller of stories, failing to tell a heartfelt story to propel my company’s most important goal hit me like a ton of bricks. Miss the audience’s heart as a filmmaker, and the only wallet that gets hit is your own. That’s because the heart is always the first target in story telling. But my Vegas strikeout suggested that this rule went beyond show business. What if reaching the audience’s heart was critical to winning in every business I asked myself? Indeed aiming at the heart is critical in every business. Regardless of your industry or profession, you must consider yourself in the emotional transportation business and transport your listener to your goal through the purposeful story you tell. What do I mean by “emotional transportation”? I’m talking about the complex system of action and reaction that operates within stories to move listeners. Stories that “work” transport audiences emotionally. They move us to laugh, cry, gasp, sigh, or yell in sympathetic rage, and every listener intuitively demands this emotional propulsion. It’s important to remember that this is true even in a business context. Business people are human beings who grew up listening to stories, just like everybody else. So in business as in show business, if you fail to transport your listener emotionally, you will lose your audience. Lose your audience, and your story can’t possibly deliver your intended call to action. Telling purposeful stories that aim at the heart is the single biggest game-changer any business person can do and immediately — not next week or next year, but tomorrow — to change their success. That’s because magic happens when you narrate otherwise soulless information like facts, figures and features in decks and PowerPoints into emotional nodes that render an experience to an audience — and a single listener is an audience — making the critical information inside the story memorable, resonant and actionable — inciting them to embrace your call to action. And, that’s the result of the emotional transportation. It transports an army who hears your story to carry your story forward as theirs becoming apostles and advocates of your brand, service, mission or cause. Don’t take the stupid pill I took. The next time you need to convince, persuade or motivate someone or a group of someones to heed your call to action, tell a purposeful story and embed the critical information into it. As they say in the American express ads, “don’t leave home without it.”

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AMD Hires Ronaldo Miranda as New VP and General Manager for Latin America

March 24, 2011

SUNNYVALE, CA–(Marketwire – March 24, 2011) – AMD ( NYSE : AMD ) announced today Ronaldo Miranda, 50, will join the company effective April 4 as vice president and general manager for AMD’s Latin America region. In this role, Miranda is responsible for all of AMD’s business and operations in Brazil, Mexico, South and Central America and the Caribbean. He brings more than 27 years of experience in successfully managing sales and business operations at various technology companies in Latin America.

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CRE May Hear Static from Proposed Merger of AT&T and T-Mobile

March 24, 2011

Following AT&T Inc.’s blockbuster announcement that it has agreed to acquire the T-Mobile USA subsidiary of Bonn, Germany-based Deutsche Telekom for $39 billion, the firm once known as Ma Bell, will be looking to shave billions in costs from the combined firms. Not all of those cuts will come from facilities, but the mega merger will undoubtedly impact the commercial real estate market. By the third year out from the merger, AT&T said it is looking…

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A Social Network For The Post-PC–And Post-Privacy–World

March 24, 2011

Color , a new smartphone application, allows you to be virtually all-seeing, putting eyes in the back of your head, into your coworker’s living room, and into that hotel bar your cousin visited just moments ago in Miami. It offers a social networking experience that combines a unique everything-is-public-to-everyone privacy policy with Twitter’s real-time information stream and the photo-and-video-based voyeurism of Facebook. Color CEO Bill Nguyen, who co-founded Lala, a music service acquired by Apple in 2009 , calls the app a social network for the “post-PC world.” Whereas existing social services link our online identities to usernames and URLs, Color ties them to our phones. Users are only asked to submit their first names and phone numbers when they register for the app. Color profiles then follow users wherever they go with their phones, connecting them to other Color users based on proximity. The app is also a social network for a post-privacy world: anything shared to Color is instantly visible to anyone in any place at any time. “As tech causes cultural changes, we’re going to live so much more of our lives in public,” Nguyen told the Huffington Post. “There’s private stuff and there’s public stuff. Decide which kind of information you want to share and then launch the appropriate app for that.” The power of Color’s all-seeing eye is best experienced first hand. Imagine yourself at a wedding where friends, relatives, and strangers are snapping photos of the newlyweds and posting them on Color. Any pictures or videos uploaded with the app will immediately be shared with all of the surrounding phones–as will any pictures or videos the guests have ever added to the app, whether from a bachelor party binge or a baby’s birthday. Via this access, immediacy, and proximity-based interaction, Color aims to deliver a social network that ties engagement to a shared, physical experience and in so doing, facilitates connections between strangers. Though users can choose to follow specific people’s feeds, there is no “friending” or “following” on Color. Instead, the app’s software uses the GPS and Bluetooth capabilities on phones to automatically surface people who are in close proximity to a user or with whom that user interacts with frequently. Frequent interaction involves viewing, “liking,” or commenting on other users’ posts. The app also taps into phones’ light sensors and microphones to distinguish photos taken by individuals in a shared environment (such as a party where multiple Color users are taking photos) from the snapshots of people who merely happen to be nearby (such as a separate event in close proximity). Color has raised $41 million in funding from investors including Bain Capital Ventures, Sequoia Capital, and Sillicon Valley Bank. “Just as the iPhone changed everything about mobile phones, Color will transform the way people communicate with each other,” Doug Leone, a partner at Sequoia Capital, said in a statement. “Once or twice a decade a company emerges from Silicon Valley that can change everything. Color is one of those companies.” One thing Color seeks to change is what its creators see as a flaw with existing social media services: the increasing difficulty of befriending new people online, which the company said in a statement had become “almost impossible.” “Social networks are doing pretty amazing things, but to me, social networks still [feel] solitary, like advanced email, where you write something, post something, and someone responds. That’s not like real life at all,” Nguyen said. In addition to giving users yet another avenue through which to peer into others’ lives, the app also provides users one more way to ensure nothing is forgotten about their own. “This is like TIVO-ing life. There’s no forgetting,” Nguyen said. “I think it’s the best, most complete way of having a record of your life. It’s your life crowdsourced.” How much users will choose to share–and whether an all-public app appeals to them–has yet to be seen. Would you try Color? Why or why not? Weigh in below. Color, available for free, is launching Wednesday on Android and iPhone. Blackberry and Windows Phone 7 apps will be coming soon. WATCH: Color Demo from Color Labs, Inc. on Vimeo .

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Video: Red Hat’s Whitehurst Sees Growth From Cloud Computing

March 24, 2011

March 23 (Bloomberg) — Red Hat Inc. Chief Executive Officer Jim Whitehurst talks about the company’s fiscal fourth-quarter revenue and outlook. He speaks with Cory Johnson and Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Video: Main Says Jabil Revenue May Reach $20 Billion by 2013

March 23, 2011

March 23 (Bloomberg) — Timothy Main, chief executive officer of Jabil Circuit Inc., talks about the outlook for revenue. Main also discusses the possible impact of the earthquake in Japan on Jabil’s supply chain, Jabil’s second-quarter earnings and tablet computers. He speaks with Emily Chang and Cory Johnson on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Video: AMC’s Lopez Says DirecTV Movie Plan Doesn’t `Make Sense’

March 23, 2011

March 23 (Bloomberg) — Gerry Lopez, chief executive officer of AMC Entertainment Inc., talks about DirecTV’s plan to offer movies as soon as a month after their theatrical debut. Lopez speaks with Cory Johnson and Emily Chang on Bloomberg Television’s “Bloomberg West.” AMC Entertainment is owner of the second-largest U.S. movie-theatre chain. (Source: Bloomberg)

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Video: BV’s Schilling Says Groupon COO Departure Not `Unusual’

March 23, 2011

March 23 (Bloomberg) — Mathias Schilling, managing director at BV Capital Management, talks about Rob Solomon’s decision to step down as chief operating officer of Groupon Inc. and the outlook for the company. Groupon is the world’s largest coupon site. He speaks with Cory Johnson and Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Video: NRG’s Crane Says Texas Nuclear Project Facing `Hurdles’: Video

March 23, 2011

March 23 (Bloomberg) — David Crane, chief executive officer at NRG Energy Inc., the largest U.S. independent power producer, talks about the company’s South Texas nuclear power plant expansion. Crane talks with Matt Miller and Carol Massar on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: Eckelberry Says Algae Can Mitigate Carbon Fuel Emissions

March 23, 2011

March 23 (Bloomberg) — Riggs Eckelberry, chief executive officer of OriginOil Inc., talks about the production of chemicals and fertilizers from algae, and the company’s efforts to make algae a competitive alternative to petroleum as fuel. He speaks with Matt Miller and Carol Massar on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: Drean Says Buyout Firms Have `A Lot of Money’ to Invest

March 23, 2011

March 23 (Bloomberg) — Antoine Drean, founder of Triago SA, talks about the outlook for private equity firms. Drean speaks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Carrots As Junk Food: A Healthy Deceit

March 23, 2011

Last year, we told you that carrots companies were using junk-food marketing techniques to gain a foothold in the snack market. Now Fast Company has the whole story behind the meteoric rise of baby carrots.

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Video: Fier Says Conifer `More Bullish Now Than Last Month’

March 23, 2011

March 23 (Bloomberg) — Michael Vogelzang, president and chief investment officer at Boston Advisors LLC, and Rick Fier, a trader at Conifer Securities LLC, talk about the impact of the U.S. housing market, the European sovereign debt crisis and corporate earnings on stocks. They talk with Matt Miller, Carol Massar and Julie Hyman on Bloomberg Television’s “Street Smart.” Sheila Dharmarajan also speaks. (Source: Bloomberg)

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Ohio Funeral Home Stopped From Liquefying Bodies

March 23, 2011

COLUMBUS, Ohio — An Ohio funeral home that is the first in the nation to use a cremation alternative that dissolves bodies with lye and heat has effectively been blocked from using the procedure by state regulators. Edwards Funeral Service in Columbus is the only U.S. funeral business offering the procedure called alkaline hydrolysis to the public, according to Jessica Koth, a spokeswoman for the National Funeral Directors Association. The process is touted by proponents as being better for the environment than cremation. While funeral homes in other states are moving toward the method, Edwards’ owner, Jeff Edwards, told The Columbus Dispatch that he has used the method on 19 bodies since January. But a memo issued last week by the Ohio Department of Health has left Edwards unable to continue using the procedure. The health department’s memo directed local officials not to issue permits required for disposing of bodies or accept death certificates when bodies are to be disposed of through alkaline hydrolysis. Edwards told the newspaper he is considering legal action. “There’s no law that says you can’t do this,” he said. The health department cited a Feb. 16 statement from the Ohio Board of Embalmers and Funeral Directors that alkaline hydrolysis “is not an authorized form of disposition of a dead human body.” The health department directive was based solely on the statement of the board, which advises the department on what methods of disposal are approved, spokeswoman Jennifer House said Wednesday. She said the department has reviewed the process and found that it does not pose any risk to public health. An official with the funeral directors board did not immediately return a message seeking further information. Alkaline hydrolysis was developed in the U.S. in the early 1990s as a means to get rid of animal carcasses and has been used to dispose of human cadavers at the Mayo Clinic in Minnesota and at the University of Florida in Gainesville. Also known as resomation, alkaline hydrolysis uses a solution of water and lye, 300-plus degree heat and 60 pounds of pressure per square inch to destroy bodies in big stainless-steel cylinders. Left behind is a coffee-colored liquid that has the consistency of motor oil and a strong ammonia smell. Proponents say in most cases it can be safely poured down the drain and that, unlike cremation, the process does not involve fossil fuels or emissions. The remaining bone and bone fragments can be ground into a powder and given to a family, similar to the remains left from a cremation, the funeral directors association said. New Hampshire in 2008 reversed a two-year-old law that allowed the process. State lawmakers upheld the ban in 2009. The procedure merely speeds up the body’s natural decomposition process into a matter of hours, James Olson, chairman of the National Funeral Directors Association’s green burial work group, told The Associated Press. Olson said alkaline hydrolysis gives families who’ve lost a loved one another option and said anyone feeling squeamish about the method need only think closely about what’s involved in cremation. “I think burning a body at 2,000 degrees has more of a ‘yuck factor’ to it than putting it into a solution where it’s just naturally going to break down,” said Olson, owner of the Lippert-Olson Funeral Home in Sheboygan, Wis. Olson said his funeral business is relatively small and is not using alkaline hydrolysis because it would not be cost-effective to buy the equipment. The Roman Catholic Diocese of Columbus has not studied Edwards’ use of alkaline hydrolysis, but it would appear that flushing away the liquid would go against church teaching that persons should be handled respectfully after they die, said Deacon Tom Berg Jr., a diocese spokesman. “We don’t call for the separation of a person’s remains, that they should all be kept together and buried together,” he told the AP. ___ Associated Press writer Kantele Franko in Columbus, Ohio, contributed to this story.

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Video: Stephenson Says Commodities `Best Investment’ for Decade

March 23, 2011

March 23 (Bloomberg) — John Stephenson, a fund manager at First Asset Investment Management Inc., talks about the outlook for commodity prices, investment strategy and some of his commodity stock picks. Stephenson, author of “The Little Book of Commodity Investing,” speaks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Video: De Vaulx Says He’s Adding to Japan Stock, Gold Holdings

March 23, 2011

March 23 (Bloomberg) — Charles De Vaulx, portfolio manager at International Value Advisers LLC, and Mark Travis, chief executive officer at Intrepid Capital Corp., talk about investment strategy. De Vaulx and Travis also discuss the performance of U.S. stocks. They speak with Pimm Fox and Julie Hyman on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Video: Stern Says Additional Fed Quantitative Easing `Unlikely’

March 23, 2011

March 23 (Bloomberg) — Gary Stern, former president of the Federal Reserve Bank of Minneapolis, talks about the possibility that the Federal Reserve will enact another round of its quantitative easing program. Stern also discusses the U.S. housing market and inflation. He speaks with Matt Miller and Carol Massar on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: Stocks Advance as Metal Prices Rise; Portugal Bonds Drop

March 23, 2011

March 23 (Bloomberg) — Bloomberg’s Deborah Kostroun reports on the performance of the U.S. equity market today. U.S. stocks rose, erasing yesterday’s drop, as higher metal prices lifted commodity shares, while oil gained as allied forces struck Libyan leader Muammar Qaddafi’s troops. Bonds of Europe’s most-indebted nations sank amid concern Portugal will need a bailout. Bloomberg’s Pimm Fox also speaks. (Source: Bloomberg)

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Goldman Sachs Chief Discusses His Work Habits On Witness Stand

March 23, 2011

Lloyd Blankfein, chief executive officer of Goldman Sachs Group Inc. (GS), checks his bank’s profit every day, prefers voice mail to e-mail and makes unscheduled calls to board members at times of market “uncertainty.” His testimony at the insider trading trial of Raj Rajaratnam was intended by prosecutors to show how one of those board members, Rajat Gupta, who served in 2007 and 2008, passed on information he learned from the board. Blankfein’s 3 1/2 hours on the witness stand today before a packed Manhattan federal courtroom also included a few questions about the CEO’s personal life.

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Steve Jobs Reelected To Disney Board

March 23, 2011

BURBANK, Calif. — Shareholders of The Walt Disney Co. on Wednesday re-elected its entire board including Apple Inc. CEO Steve Jobs , despite concerns over his health and his poor attendance at company board meetings. Proxy advisory firm Glass Lewis & Co. had recommended voting against Jobs’ re-election because he failed to attend 75 percent of the board meetings in fiscal 2010. Jobs became Disney’s largest shareholder after the company purchased Pixar Animation Studios in 2006 for $7.4 billion in stock. Jobs, who bankrolled Pixar when it was a fledgling movie house, now holds a 7.3 percent stake in Disney. After the vote, Disney said that it “considers itself fortunate to have Steve Jobs as a member of its board of directors.” Despite his spotty attendance record, Jobs has had a significant influence on Disney’s digital strategy – as evidenced by its many iPad applications. In November, CEO Bob Iger cited Jobs’ help in pushing the company to come up with a message for its redesigned Disney Stores. The company ended up focusing the stores on offering “the best 30 minutes of child’s play.” The annual shareholders meeting finished early Wednesday in Salt Lake City. Disney shares rose 72 cents, or 1.7 percent, at $42.16 in afternoon trade.

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PIMCO Announces Elizabeth MacLean and Jason Duko to Join Firm as Senior Members of Bank Loan Portfolio Management Team

March 23, 2011

NEWPORT BEACH, CA–(Marketwire – March 23, 2011) – PIMCO, a leading global investment management firm, has announced that Elizabeth (Beth) MacLean and Jason Duko will join the firm and become members of PIMCO’s bank loan portfolio management team. Upon joining PIMCO in early April, Ms. MacLean will become an Executive Vice President and Portfolio Manager, and Mr. Duko will become a Senior Vice President and Portfolio Manager. They will be based in the firm’s Newport Beach office and will report to Marc Seidner, a Managing Director and senior member of the Portfolio Management Group.

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Video: Rifkin Sees `Modest’ Fallout for Goldman From Testimony

March 23, 2011

March 23 (Bloomberg) — Mark Rifkin, partner at Wolf Haldenstein Adler Freeman & Herz LLP, talks about the insider-trading trial of Galleon Group LLC co-founder Raj Rajaratnam and the implications for Goldman Sachs Group Inc. and the hedge fund industry. Goldman Sachs Chief Executive Officer Lloyd Blankfein testified that former Goldman board member Rajat Gupta violated the firm’s confidentiality policies by allegedly telling Rajaratnam about the firm’s earnings and strategic plans. Rifkin speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

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Video: Merrifield Wants No `Rush to Judgement’ on Nuclear Power

March 23, 2011

March 23 (Bloomberg) — Jeffrey Merrifield, a former member of the U.S. Nuclear Regulatory Commission who is now senior vice president at nuclear plant builder Shaw Group Inc., talks about the safety of nuclear power in the U.S. and the outlook for construction of more nuclear power plants. Merrifield speaks with Matt Miller and Carol Massar on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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UBS Accused Of ‘Cheating’ French Madoff Victims

March 23, 2011

PARIS (Reuters) – Swiss bank UBS “tricked” victims of Bernard Madoff’s giant Ponzi scheme by sponsoring a Luxembourg-registered fund that for four years fed assets directly to the fraudster without saying so in its prospectus, a Paris court heard on Wednesday. The “Luxalpha” fund was deemed safe by investors because of the link to UBS, which was presented in the prospectus as sole custodian of the assets, said Jean-Pierre Martel, a lawyer representing 78 French investors who invested 28 million euros ($39.69 million) in total in Luxalpha. UBS denies the charge. “The prospectus was saying: ‘this product is 100 percent UBS, you can go for it’,” Martel told a hearing at the Paris Court of Commerce. “Here we have investors who were shamefully cheated by one bank … with information that was wrong and dishonest.” A verdict date has been set for June 9. UBS is also fighting a $2 billion lawsuit from the trustee liquidating Madoff’s companies, Irving Picard, over its involvement in Luxalpha. Picard has said UBS’ involvement lent the funds “an aura of legitimacy” while shielding the bank from liability through secret side agreements. “UBS considers it has not committed any error. It is also a victim in this affair,” the Swiss bank’s lawyer, Denis Chemla, told Reuters during recess. Lawyer Martel told Reuters that if the Paris court decided it was not competent to judge the matter then it would be “over,” as his clients were not recognized as creditors or shareholders by the Luxembourg authorities. (Reporting by Lionel Laurent and Matthieu Protard; editing by Elaine Hardcastle) Copyright 2011 Thomson Reuters. Click for Restrictions

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Ron Ashkenas: Let’s Talk About Culture Change

March 23, 2011

All change in organizations is challenging , but perhaps the most daunting is changing culture . There are at least two reasons for this: (1) Culture is a soft concept . If there’s no concrete way of defining or measuring culture, then how can you change it? And (2) culture represents collective norms and behaviors . It’s hard enough to change one person’s behavior — how can you change the behavior of an entire organization? But if managers want to build high-performing organizations, they need to address culture change . Here’s an example that my colleague Keith Michaelson shared with me of how one manager succeeded in changing the culture of his operation: Ted Wilson* had spent his entire career with a large electric utility when he was asked to become plant manager for one of the company’s generating stations. The only problem was that its weak operating record and long history of internal conflicts had given this station the reputation of being a tough place to work and an even tougher place to manage. For a manager with bigger career aspirations, Ted realized that changing this reputedly negative culture would be key to the plant’s success — and his own success as well. To get started, Ted made himself visible throughout the station, talking to people on all three shifts. During one of his walk-arounds, he went into the control room on the third shift where one of the operators asked, “Who are you?” Ted introduced himself, and the operator replied, “I like you already. We never met the last plant manager.” But Ted quickly realized that being a nice guy wasn’t going to make enough of a difference; especially when his observations revealed the negative attitudes of many workers and conflict between the functions, shifts, and individuals. To tackle these detrimental aspects of the culture, Ted convened his leadership team to develop a vision and values statement for the station — something they had never done before. After something of a struggle, they developed a highly aspirational vision (“… to be the standard against which all other power stations are measured…”) and a set of values/behaviors for achieving that vision. These included statements such as “Embrace Conflict Resolution,” “Show Confidence in the Chain of Command,” “Have a Questioning Attitude,” and “Take Ownership for Our Performance.” Most of these core values were missing on a day-to-day basis, and they provided a true north so that the leadership team could have a common direction for change. The real challenge of course was translating these behaviors — which would constitute the new culture — into reality. Knowing that the usual communications channels would be inadequate, Ted instructed his managers to model the behaviors, and use real-time day-to-day interactions for teaching and reinforcing. If they could “convert” people, even one at a time, eventually there would be enough critical mass for the new culture to take hold. For example, when Ted or his managers heard workers using profanity (a common occurrence in a power plant) they would tell them, “You’ve got to stop with the obscenities. If we’re going to be a place that other power plants want to emulate, we can’t talk that way.” Initially this was met with skepticism or disbelief, but with time and repetition the idea took hold. Similarly, when Ted saw that many employees were habitually extending their “ten-minute” breaks to thirty minutes or more, he called the shop stewards together and (instead of starting disciplinary actions) enlisted them in getting people to take more ownership for their own performance. In addition, Ted practiced more proactive teaching, such as bringing together previously warring groups or individuals with an internal expert in conflict resolution and visibly celebrating key performance improvements in the plant. As a result of all this work, one year after Ted became station manager the operation had improved performance on almost all of its metrics, and had gone 250 consecutive days without a safety incident (a major achievement). And while the culture had not changed completely, it was definitely moving in the right direction. What are the key lessons from Ted’s experience with culture change that might be applied in other organizations? What could he have done differently? What other suggestions would you add? *Name has been changed. Cross-posted from Harvard Business Online

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Vuzix Appoints Two New Members to Its Board of Directors

March 23, 2011

ROCHESTER, NY–(Marketwire – March 23, 2011) – Vuzix Corporation ( TSX-V : VZX ) ( OTCBB : VUZI ) ( FRANKFURT : V7X ) (“Vuzix” or the “Company”) announced today that Jose A. Cecin and Richard F. Conway have been appointed to the Company’s Board of Directors bringing the total number of Board members to eight (8). The confirmation of Mr. Cecin and Mr. Conway as Board members satisfies the obligation of the Company, under its loan agreement with LC Capital Master Fund Ltd. (LC) to add two Board seats to represent the interests of LC.

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Bob Meighan: Tax Saving Tips for Procrastinating Filers

March 23, 2011

With just a few weeks left to go, millions of taxpayers are scrambling to meet the April tax deadline. If you’re among them, you’re not alone. An estimated 27 percent of taxpayers wait until the last two weeks to file their return. This year, there’s some good news for all the procrastinators out there, an extra three days to file your federal taxes. The federal tax deadline is Monday, April 18 instead of April 15. Double check with your state as not all state tax deadlines are the same. For those who are waiting until the last minute, there’s still time to reduce your 2010 tax bill. Here are a few things to remember: Go online. Taxpayers can go online to prepare and e-file taxes up to the last minute. Online tax preparation is fast, easy and convenient E-file your return. You avoid long lines at the post office and with direct deposit, get your refund back in as little as eight days. Contribute to your IRA. Even procrastinators can save money on their taxes. Taxpayers have until the April 18 deadline to contribute to an IRA and get a deduction on this year’s return. Remember charitable contributions. Cash and in-kind donations made in 2010 are deductible for itemizers. Even mileage to and from volunteering is deductible. Take advantage of higher education tax breaks. Tax credits like The American Opportunity Credit and The Lifetime Learning Credit are available if you or your children were in college in 2010 – don’t miss the potential tax savings available to you. Don’t just take the standard deduction if you think you’re running out of time. It may be worth more to itemize. Software programs like TurboTax can compare both and help you decide which is best for you. Need more time? Taxpayers can get an extra six months to file (until Oct. 17, 2011). But remember, an extension to file, is not an extension to pay your tax bill. Individuals still need to send the IRS a payment for taxes owed, within 90 percent accuracy, to avoid late penalties. What if you can’t pay? You’re not alone. Taxpayers who can’t pay the full amount they owe can ask for a streamlined installment plan. You may qualify for a streamlined plan as long as you don’t owe more than25,000, and you must be able to pay your tax bill off within five years. See here . These simple tips can provide even the most procrastinating taxpayer with real savings on their 2010 tax bill. Despite the temptation to put off taxes until the very last minute, the clock is ticking so it’s time to get going. Spending a few minutes to take advantage of any of these tips can help you get big savings on your tax return. As vice president for consumer advocacy for Intuit’s TurboTax business, Bob Meighan works with customers to help ensure TurboTax products meet their needs. A Certified Public Accountant, Meighan holds a bachelor’s degree in business administration from the University of North Carolina.

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Barbara R. Arnwine: Collective Bargaining Rights Are Key for Workplace Equality

March 23, 2011

Women’s History Month is a very special time to reflect upon both the particular challenges that women continue to face in the workplace and upon the new opportunities that will arise for economic equity. It’s also a time is to appreciate the struggles of the Sheroes who came before us who opened the doors of opportunity. It is up to us to recognize the significance of being women and also the importance of being a part of a broader collective that lifts the stature of everyone — male and female. We must ask ourselves, how do we both acknowledge the persistent disparities and concerns of the past while also looking to the future for continued upward mobility for all? Gender-based issues of increasing unemployment, job silos, unequal pay, sexual harassment and the “Old Boys Network” continue to haunt the American workplace and denigrate the economic status of women. And this affects everyone. The fact is, it’s not quite time for “post-gender” thinking. Take the l atest unemployment figures . While we added some 192,000 jobs in February, the overall scenario for women was not rosy. The National Women’s Law Center notes that over the course of the recovery, women’s overall unemployment rate increased from 7.7 percent to 8 percent, while men’s dropped from 9.8 percent to 8.7 percent. Even more disheartening, between July 2009 and February 2011 unemployment rates increased for single mothers (from 12.6 percent to 13 percent) and African-American women (11.8 percent to 13 percent). Recently, we witnessed the crisis facing public workers in Wisconsin. Governor Walker’s actions are of immense importance to women and stand in direct contradiction to our continued progress. According to the Bureau of Labor Statistics , women comprise 52 percent of state-level public sector jobs and 61 percent at the local level. The impact on state and local job cuts in the public sector will be especially devastating to women at a time when the recession has already disproportionately impacted us. Women of color, already facing large pay gaps, are in danger of falling still further behind as bargaining rights disappear. Dr. Steven Pitts of UC Berkeley’s Center for Labor Research and Education notes that black women in the public sector earn a median wage of $15.50 an hour, while the sector’s median wage overall is $18.38 (white men make $21.24). This is not so surprising when you consider that African-American women comprise only 12.2 percent of labor unions. This data exemplifies the compelling need for workers to have the ability to bargain for equal rights in the workforce. The wage gap remains an important civil rights crisis for women. We have made gains in areas of education and employment, yet we know that we have not been fully acknowledged in the workplace when the paycheck arrives. This illustrates the distinction between the evolution of personal achievement and universal women’s emancipation. Barriers still confront women in many professions and prevent us from achieving true equality. While we should appreciate the success stories, such as women’s increased access to law firms, there are still challenges to overcome. The retention rate, for example, tells a bleaker story about how women fare in the legal profession. The attrition rate for white female attorneys within 55 months is 77 percent, while minority female attorneys at law firms have the highest attrition rate, at 41 percent within 28 months and 81 percent within 55 months. A Diversity and the Bar report notes that women of color often feel isolated in an “old boy’s network” environment. It appears that white male attorneys share a greater opportunity for advancement, perhaps because often times those in power (white males) are connected most with people like them. While it is critical that law firms fulfill their responsibility to systemically address these barriers to women’s achievement, women must also assist in advancing each other. This year marked the 100th Anniversary of International Women’s Day. The United Nations highlighted , as I have, that despite the gains made, much remains to be done to eliminate gender discrimination. Until these vast disparities are addressed and systematically dismantled, this country’s economic viability for the future will never be fully realized. The time for a level playing field is long overdue. As women, we must find our voices and be active in advocating for real equality in these times. And we must always look beyond the headlines to find “her” story. This originally appeared on New Deal 2.0 .

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Bernanke: Dodd-Frank Should ‘Level Playing Field’ For Small Banks

March 23, 2011

SAN DIEGO – New financial regulatory reforms should help reduce the edge that large banks have over smaller ones because of their implicit support from government, Federal Reserve Chairman Ben Bernanke said on Wednesday. Bernanke argued the Dodd-Frank reform legislation will address the issue of firms perceived as too big to fail by restricting their activities, raising their capital requirements and enhancing regulators’ ability to wind them down. “A financial system dominated by too-big-to-fail firms cannot be a healthy financial system,” Bernanke told a group of community bankers in a speech that did not touch on the broader economic outlook. “One benefit of the reforms should be the creation of a more level playing field for financial institutions of all sizes,” he said. A number of other top Fed officials, including Richard Fisher, president of the Dallas Fed bank and Thomas Hoenig, president of the Kansas City Fed, have argued the legislation does not go far enough. They have called for very large banks to be broken up. WATSON NO CREDIT OFFICER Bernanke said part of the reason the new laws governing the financial sector would support community banks was that regulators are cognizant of their concerns and challenges. With that in mind, the Fed is aware that many community banks need time to recover from the financial crisis. “We recognize the importance of striking the right balance between promoting safety and soundness throughout the banking system and keeping the compliance costs for smaller banking firms as small as possible,” he said. He said the crisis suggested fancy computer models are no substitute for on-the-ground intelligence on lending, joking the IBM computer that had recently won the U.S. game show “Jeopardy!” was not well equipped to make credit decisions. “This advantage for community banks is fundamental to their effectiveness and cannot be matched by models or algorithms,” Bernanke said. “Watson may play a mean game of Jeopardy, but I would not trust it to judge the creditworthiness of a fledgling local business or to build longstanding personal relationships with customers and borrowers.” Copyright 2011 Thomson Reuters. Click for Restrictions

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Gemma Godfrey: EU Bonds: Portugal Proving the Point & How You Can Profit

March 23, 2011

First the bank bail-outs, then countries joined the queue. Talks of Greece defaulting, Irish riots and Spanish air-staff simultaneously taking a ‘sick-day’. Just what is at the root of the EU’s troubles? And how do last week’s events with Portugal exemplify the problem? A Flawed Strategy Einstein summed up the challenge being faced within the EU succinctly when he proclaimed “you can’t solve a problem with the same kind of thinking that created it.” In Europe today, many countries are struggling under the burden of too much debt and the problem is being tackled with the issuance of yet more debt. Crucially, without growth, debt as a percentage of GDP will continue to worsen even before new debt is added to the equation. Investors are losing patience. Portugal Proves the Point… According to central bank forecasts, Portugal’s economy will contract by 1.3% this year, pushing the country into its second recession in three years. In reaction to this poor growth outlook, Moody’s downgraded its bond rating not one but two notches on Tuesday night. The very next day it sold €1bn in short-term government debt. Unsurprisingly, investors asked for a higher interest rate on their loan — exacerbating Portugal’s problem. As the finance minister conceded , servicing debt at current yields is “unsustainable over the long term”. …but Presents Opportunities A downgrade in a country’s government debt may trigger a wave of forced sellers. Pension funds, insurance companies and ETFs are focused on matching their liabilities to their assets. Therefore, they may be restricted in holding debt rated below a certain level. With Portugal’s government debt downgrade (again let me emphasize by not just one but by two notches), these investors may have to sell certain Portuguese debt holdings. Any forced selling may be exploited with the purchasing power in your hands. Misunderstood Markets In addition, as Christine Lagarde, the French economy minister, admitted “Europe is difficult to understand for markets. They work in an irrational way sometimes,” and it is possible to profit from this ‘irrationality’. Companies located in an EU periphery country, with strong balance sheets and demand insulated from worries about their homeland (i.e. international exposure etc), may suffer from illogical moves in the markets that punish anything connected to the country regardless. This debt can be picked up ‘cheaply’. United They Stand; Divided They Fall The problem with the “EU” banner is that it links together economies that are quite different from each other. Much press has been dedicated to the fate of the ‘PIIGS’ — Portugal, Italy, Ireland, Greece and Spain but it is interesting to compare journalistic exposure with economic impact. Greece Ireland and Portugal account for less than 5% of EU GDP. It is wise to remember that often overreaction offers the most profitable investment opportunities.

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Goldman Sachs CEO Lloyd Blankfein: Rajaratnam Obtained Confidential Information

March 23, 2011

NEW YORK (Reuters) – Goldman Sachs Group Inc Chief Executive Lloyd Blankfein made his much-anticipated appearance at Raj Rajaratnam’s trial, telling jurors a former director at Wall Street’s most powerful bank leaked inside details to the accused hedge fund manager. Blankfein was called to testify by prosecutors in Manhattan federal court. His appearance intensifies the focus on what is already the largest U.S. insider trading case in decades. Dressed in a dark suit, white shirt and blue tie, the Goldman chief walked swiftly to the witness stand in the tense, packed courtroom of U.S. District Judge Richard Holwell. He hesitated slightly when asked for his name, saying “Lloyd, uh, Blankfein,” before spelling it for the court reporter. He told jurors that former director Rajat Gupta violated Goldman confidentiality policies by revealing to Rajaratnam the board’s June 2008 discussion of a possible merger with Wachovia Corp or an insurance company. Asked whether American International Group Inc was the insurer, he said, “I don’t have a specific recollection, but it probably would have been.” Prosecutors played a July 2008 wiretapped phone call in which Gupta and Rajaratnam discussed Goldman. Prosecutors have accused the Sri Lankan-born Rajaratnam, a one-time billionaire, of illegally making $45 million from 2003 to 2009 based on tips from insiders, some of whom were highly placed executives in corporate America. Rajaratnam, 53, has said his trades were based on his own research at his Galleon Group hedge fund and publicly available information. He has vowed to clear his name at trial. Gupta was accused by the U.S. Securities and Exchange Commission of tipping Rajaratnam about Goldman’s 2008 financial results, as well as a $5 billion investment in September 2008 by Warren Buffett’s Berkshire Hathaway Inc at the height of the financial crisis. The SEC said Rajaratnam reaped $17.5 million from the illicit tips. Blankfein testified that it is important for Goldman directors not to disclose private discussions about the publicly-traded bank’s business. “We don’t want information about our company to get out until it’s appropriate,” he said. He also said premature disclosure inhibits the “free exchange” of ideas among directors, who might otherwise fear that what they say privately could become public. Gupta, a former worldwide managing director at the McKinsey & Co consulting firm, has denied the SEC’s accusations and sued the agency last week. Goldman has not been accused of wrongdoing. Blankfein, 56, has been Goldman’s chief executive since June 2006. During a break, Blankfein grinned and leaned on the jury box. He made a joke to the court staff and looked relaxed. Rajaratnam, meanwhile, stared straight ahead, expressionless. LIMITING BLANKFEIN TESTIMONY Prosecutors earlier asked Holwell to block Rajaratnam’s lawyers from cross-examining Blankfein on whether Goldman bears responsibility for the 2008 financial crisis, or is the subject of any Department of Justice or SEC probes. They said such information is irrelevant to the trial, and could create unfair prejudice against Blankfein’s testimony. In court on Wednesday morning, Rajaratnam lawyer John Dowd said “I’m not going to inquire” about pending investigations. He also said he may recall Blankfein to the stand later. Rajaratnam’s trial began on March 8, and is expected to last two months. Blankfein took the witness stand after Rajiv Goel, a former Intel Corp managing director and longtime friend of Rajaratnam who is cooperating with the government. Goel began testifying on Tuesday, and is expected to resume testifying later. The case is U.S. v. Rajaratnam, U.S. District Court, Southern District of New York, No. 09-01184. (Additional reporting by Basil Katz and Lauren Tara LaCapra; editing by Dave Zimmerman) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Anne Hill: 5 Great New Social Media Strategies

March 23, 2011

Most business owners understand the basic premise of social media marketing today, which is that linking your website to your company presence on other social networking hubs (such as LinkedIn , Facebook , and Twitter ) is more effective than just getting a lot of SEO for your site. Consequently, I spend a lot of time advising small businesses on how to create and maintain their Facebook Pages, and how best to improve their LinkedIn presence. However, there are some golden opportunities for creative marketing that haven’t been widely adopted yet, that would be even more effective for many professionals. While all your competitors are concentrating on updating Facebook and LinkedIn, wouldn’t it be fun to outshine them all by doing something completely different? Here are five new strategies for business marketing — things that have only become possible quite recently, that will make your service or storefront even more relevant in a crowded field. 1. Claim your business profile on Yelp. If you have a storefront or office, you absolutely must list it on Yelp . Why? Because Yelp has a great mobile app that is very popular for finding products and services when you are on the road. It is quicker and easier to use than Google’s iPhone search app, making your store hours, phone, and location instantly accessible to the large group of Yelp users. When you sign up for Yelp and claim your business, you can interact with all of those users — and Yelp gives you free swag you can display in your window, or add to your website to cross-link your site to its Yelp listing. Non-storefront businesses can also have profiles on Yelp, and can list up to 5 different cities they serve. Finally, consider writing reviews yourself. Leverage your deep knowledge of a locale or industry by writing helpful comments on relevant businesses, then create a widget on Yelp that you can place on your website, that will share your reviews with a wider audience. 2. Improve your business search results with a listing on Google Places. In its recent efforts to improve search results, Google now gives greater weight to local data, most notably from its own Google Places . The first step is to simply Google your company name, then locate it on the Google map for your area. Like Yelp, you then claim your business identity (creating a Google account if you don’t already have one) and are able to add lots of information about your business. Having a listing on Google Places will automatically bump up your business in a Google search, and filling it out is pretty straightforward. You can also correct any misplacement of your store location on GoogleMaps, which happens fairly frequently in rural areas. Being easily found on GoogleMaps is important, but you can also use Google Places to do the opposite and hide your company from view (by substituting a P.O. Box for a street address), if you work from your home and do not wish to divulge your residence to the world. 3. Engage with other experts in your field on Quora. One stand-out social media tool is Quora.com , which operates on a simple premise: there should be a place to go on the web for clear, concise answers to specific questions. With a minimum of hype and noise, Quora does just that. It is an excellent way to increase your visibility and connect with others interested in similar topics. Its interface is also clean and relatively easy to master, unlike Facebook with its endless settings and options. As with all social networking sites, you need to put some work into understanding its interface, finding people and topics to follow, and responding to questions from others. Once you get the hang of it though, Quora makes it easy to share what you know on Facebook (only to profiles however, not pages) and Twitter. In fact, a clever way to stream your Quora activity to your website would be to create a Twitter account, link it up to Quora, and then put a Twitter widget in a sidebar on your website. Visitors to your website will then see every time you ask or answer a question on Quora — and you won’t have to engage with Twitter in any other way, so long as you are consistent about using Quora. 4. Create big value with a very small camera. If there is one gadget that will do more to boost your online presence than anything other than your phone, it is a video camera. Whether you use your iPhone 4 , a Flip camera , or something else, the technology is well within your grasp to create short, fun videos on topics of interest to your customers, and upload them to your website, blog, Facebook page, or YouTube channel in minutes. Camera shy? Keep in mind that the optimal length for online video is from 2 to 5 minutes. That’s just enough time to place the camera in front of you and say something relevant about where you are and what is taking place, then end it with a friendly sign-off. You can have short conversations with colleagues about industry-related issues; promote local festivals and events; advertise new products and services when they are available. Above all, you add personality to your business, which is a huge advantage in a market stuffed with words but starved for a human voice. 5. Join or create a group for local events on Meetup. If you regularly hold informational meetings about your business, consider expanding your reach by listing them on Meetup.com . And if you want to network with others in your area with similar interests, you are most likely to find them on Meetup. Unlike most tools mentioned so far, Meetup results in actual face-to-face meetings with like-minded people from your own area. It gives event planners the tools to set maximum attendance levels, send out reminders before the meeting, and easily keep in touch with group members. More than any other social networking site, Meetup has also made it extremely easy to link information from its site to your business site, with a slew of customizable widgets and several handy RSS feeds . With them, you can promote your group, your area, your calendar of events, even specific topics right onto your blog or website. For the past several years, conventional wisdom has been that having a blog was the most important tool for your business. But blogs are not for everyone, nor are Facebook Pages, and now they don’t have to be. These new tools are less daunting and more flexible than anything that has come before, and their reach and popularity is only beginning. If you have been hesitant so far to try social media marketing for your business or website, you have officially run out of excuses. A version of this article was published at Creative Content Coaching . Subscribe to the CCC blog on Kindle .

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Nick Seguin: Kauffman’s Guide To Navigating The Startup Game

March 23, 2011

Starting a company, like capitalism, is messy . If there were a known formula for success, there would be far more startups and far more successful large businesses. Anecdotal evidence and case studies based on past successes do little to illustrate important decisions and the real process of business building. Rose-colored glasses tend to be the eyewear of choice for entrepreneurs looking back on how they won in startup game. At Kauffman, we are examining the “science of startups”: the decisions and best practices that are most common to successful, scalable firms. Now, more than ever, we need entrepreneurs and their firms to succeed because young firms create jobs and drive economic growth . And they tend to be the ones that bring products, services and processes to people at massive scale, generating substantial social benefit and often improving and saving lives. So how does one go about navigating the various ways to spend time, money and energy on an idea in order to create an immediate positive impact and long-term value? Resources have exploded onto the scene as of late, creating a veritable industry around entrepreneurship. The exact combination and sequence of resources that make up a successful startup are not yet well known, but the following are a few tips that many entrepreneurs have followed. Not to state the obvious, but human capital is critical. Most ideas are commodities. What really matters are the people who build businesses around ideas. Whether through unstructured peer-communities or focused mentorship, human capital consolidation and curation is a fundamental investment founders need to make when launching and growing their companies. Human capital creation occurs in formal and informal communities that exist online and offline. Examples include Entrepreneurs’ Organization (EO) , Hackers & Founders and simple meetups. Likewise, people might be accessed and employed through structured programs such as accelerators, like TechStars and YCombinator , which facilitate direct mentorship. Considerations of a startup’s life-cycle phase and specific needs dictate the appropriate engagements here. Discussions about financial capital always require considerations of industry and phase. For instance, life sciences and advanced materials have their own realities; capital here looks more like $50 million tranches. Equity financing has consequences that founders must be aware of. Strategic capital, when it is needed, can be the right decision and building a war chest isn’t a bad thing. But it is important to be aware of different types of investors, their motivations and their fiduciary responsibilities (if any). When considering and pursuing capital, founders can access helpful content and tools on Venture Hacks , AngelList , Own Your Venture and the Kauffman Foundation’s own Entrepreneurship.org . Iteration is a concept that expands beyond product development. It applies to many facets of a company, including idea discovery, business model search , the team, customer development and even to the personal exploration of becoming a founder. Finding mechanisms, methodologies and opportunities to iterate is important. But you can’t iterate until you’ve done something. That’s the first step. Committing to iteration means there is a line in the sand, and this is the most difficult step for many entrepreneurs. Iteration allows for progress on something tangible as opposed to postulation. Look for opportunities to iterate through simulations and events like Startup Weekend , pitch competitions, accelerators, and most important, your own company. Entrepreneurship is the phenomenon that allows individuals to bring innovations to society, create wealth and realize economic independence. Founders and potential founders have more resources available than ever before as they make their journey toward these outcomes. While the active and messy life-cycle of company building is far from being boiled “down to a science,” entrepreneurs will be a step ahead if they focus on people, strategic financing and iteration.

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9 Companies That Can’t Keep Their Products On The Shelves

March 23, 2011

By 24/7 Wall Street: It is not unusual for companies with highly successful products to run out of inventory. Oftentimes, companies scramble at the last minute to meet an unexpected upsurge in demand. Some analysts also suspect that companies “create” shortages to boost interest in their products among consumers and the media. Rumors emerged that Apple did this with both the iPad and iPhone, though this has never been proven. Apple’s success has been so spectacular that it doesn’t matter whether the shortages are planned or not. The problem with product shortages will get worse for some companies because of the Japan earthquake. Several car companies have already slowed production because of the dwindling availability of parts. Honda and Toyota each expect some of their plants to be shut down for weeks. Several firms that make components for consumer electronics like the iPad will need to close their doors for a while as well. It will not be a public relations stunt if iPad 2 shortages begin anew in the next month. The duration of manufacturing interruptions in Japan may not be announced until the end of the spring. Companies, however, face these types of challenges all the time. Mattel was unable to sell entire lines of toys when it was discovered that manufacturers in China had covered them with lead paint. Regional oil shortages happen when hurricanes shutter refineries. Customers rarely care about why they cannot buy the products and services they want. They are not usually in a forgiving mood, and that should worry companies facing potential shortages. A consumer may buy a competitor’s product or may decided to skip the purchase entirely. 24/7 Wall St. examined how companies such as BMW and Lululemon Athletica stumbled when faced with product shortages. The companies did a poor job estimating product demand, probably costing them revenue. Sales were further hurt by the news of the shortages. Below is a list of nine companies whose products barely touched the shelves before getting snatched up, based on 24/7 Wall St. research. Check out 24/7 Wall Street for more information.

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