There are two types of entrepreneurs. Social entrepreneurs and lifestyle entrepreneurs. Wikipedia lists a third, but you can’t start out as a serial entrepreneur, which is a type of entrepreneur who continuously comes up with new ideas and starts new businesses. So you fall in one of two buckets. You’re either working to help, improve and transform social, environmental, educational and economic conditions or you’re combining personal interests and talent to earn enough to sustain a desired lifestyle. Depending on the type of entrepreneur, the motive for starting a business may be different, but one fact remains: The product or service has to make meaning for the customers if it’s to be successful.

You don’t have to come up with a product or service that radically changes peoples’ lives (although it could), but your product does have to make meaning in at least one of three ways. It has to either increase the quality of someone’s life, right a wrong, or prevent the end of something good.

You increase the quality of life for someone when your product or service brings greater personal satisfaction to his or her life. You know you’re product does this when you can satisfactorily answer the question, “Does this product/service make people fitter, wiser, smarter, or closer?” A perfect example would be Facebook. Facebook allows users to continuously stay in touch with friends, relatives and other acquaintances wherever they are in the world, as long as there is access to the Internet. For many, Facebook has increased their quality of life.

You right a wrong when your product/service solves what the customer considers to be an injustice. Blake Mycoskie, founder of TOMS Shoes, made it his mission to give every child in the world in need a pair of shoes. Talk about a Big Hairy Audacious Goal. But that’s exactly what Blake is doing, having achieved a 1:1 ratio of shoes sold to shoes given away. And yeah, he’s doing alright financially as well. But money wasn’t his motivation. Otherwise, TOMS would just be one of the thousands of companies making shoes. But it’s not; it’s righting a wrong.

Whatever the case may be, a lot of people do not like change. Every time a new technology comes out, it replaces the one before it. But there are always people seeking to buy vintage products because of the memories that they associate with the products. If you can produce or acquire high-quality products of old, then your product will be among Coca Cola’s glass bottles, Polaroid’s restored SX-70 camera, and Nike’s Air Jordan Retro sneakers.

I agree with the comment that Apple’s former chief evangelist, Guy Kawasaki, made to a group of Stanford students when he said, “It is my naive and romantic belief that if you make meaning then you’ll probably make money. But if you set out to make money, you will probably not make meaning and you won’t make money.” If you would like to see some of my own examples of entrepreneurship, feel free to check out my blog.

Michael earned his bachelor’s degree in political science from Yale University, where he focused his studies on American government. While at Yale, he served on the executive committee of Focus on New Haven, Black Student Alliance, Yale Political Union and The New Journal.

How and where did you get the idea for your companys?

Justin.tv – my friend/co-founder justin kan’s idea – he was trying to figure out what startup to build next and thought other people might be interested in listening in on the conversation. Then he thought other people might be interested in “listening in” on his life. That is how he came up with the idea of broadcasting his life 24/7. After launching this we all realized that other people are more interesting that Justin. So we focused on building a platform for others to broadcast live video.

Socialcam – we build an iPhone app that allowed people to broadcast live video from their phones. People used it to take video clips and share them with there friends. We talked to these users and realized that it was hard to share videos from your phone.

Who’s one person you’ve always looked up to?

Bill Clinton – executed a long term plan to become president
Michael Jordan – universally recognized as the best in his sport

What’s the most important action you took that you believe brought success to your business?

Deciding to start – this is the step that prevents 99.9999% of business from succeeding

What’s the number one tip you would offer to a young entrepreneur?

Think about everything on your todo list. Whatever gives you the biggest stomach ache is what you should work on first.

What are your 5 favorite online tools?

• Priority inbox (gmail)
• Google tasks
• Pivotal tracker
• Socialcam custom stats dashboard
• Mixpanel

How and where did you get the idea for your company(s)?

One of my friends had a semester @ UPenn and I wanted to go for a visit. The whole proccess of issuing a visa was just too complex. Coming to think about it, many of the daily things we do could be easily automated.

Who’s one person you’ve always looked up to?

Never had just one person. People I’m currently looking up to are: Elon Musk, Jack Dorsey, Jeff Bazos, Reid Hoffman.

What’s the most important action you took that you believe brought success to your business?

Assembling a kick-ass team behind this HUGE problem, from co-founders to employees to investors and advisers.

What’s the number one tip you would offer to a young entrepreneur?

“Be the change you want to see in the world” (Mahatma Gandhi)

What are your 5 favorite online tools? (Productivity, organization, communication, social…)

• Gmail (obviously)
• Boomerang (Gmail addon)
• Rapportive (Gmail addon)
• Facebook messenger
• Any.DO (of course)

Jennifer went to Harvard Business School where she met Jennifer Hyman. Shortly after meeting, the two started Rent the Runway with nothing but a ”business plans are a waste of time” mentality and a series of meetings with top designers and retailers.

How and where did you get the idea for your company?

The concept for Rent the Runway originally started when my business partner and Harvard Business School section mate Jennifer Hyman, now co-founder and CEO of Rent the Runway, was home during Thanksgiving break and her sister had a “closet full of clothes but nothing to wear moment” and she thought “there needs to be a solution for this.” Together, we created Rent the Runway over several lunches so that women everywhere can live the life they dream today by having access to designer brands that otherwise would have been unattainable. We aspired to make high-end fashions as accessible as renting a movie from Netflix and let women know that they can have it all.

Who’s one person you’ve always looked up to?

I have had so many incredible mentors along the way including Carley Roney, the founder of TheKnot.com , Dan Rosensweig, the CEO of online textbook-rental company Chegg and Marc Lore, Co-Founder of Crunch Base, to name a few. I would also add that having a partner (Jenn Hyman) throughout the journey has been so beneficial.

What’s the most important action you took that you believe brought success to your business?

It is hard to choose only one because our success cannot be attributed to one action. It was a mix of the following key factors to success that I recommend to every entrepreneur that can be applied to other business models: (1) Test the Marketplace, (2) Show by Example, (3) Build a team, and (4) Realize that “No” means “Not Right Now.”

Here is an example of how we tested the marketplace before launch:

Prior to launching Rent the Runway with my co-founder we talked to hundreds of women about renting dresses and witnessed our consumer interact with our product through a series of tests we devised. We set up a pop-up shop at a Harvard undergrad dorm and when we watched women twirl around in the product and feel more confident and beautiful, we knew there was something to the concept. Not only did these teats and our focus groups validate the concept, but they also helped us evolve and tweak elements to make our company as strong as it could be – to this day we are still taking feedback from the market place as we continue to develop Rent the Runway. Entrepreneurs need to remember that starting a business is a series of tests and to not be afraid of taking risks, hearing the word “no” (which I view as “not right now”) and even failing.

What’s the number one tip you would offer to a young entrepreneur?

Love what you do.

What are your favorite online tools?

• Google Analytics
• Drop Box
• Video Genie
• Facebook Connect

This interview was made possible thanks to the YEC.

If I were to summarize their advice to entrepreneurs, it would be to promote innovation and create a culture of innovation in your business. The recipient of the 2005 Entrepreneurship Award by the London Business School, Ho Kwon Ping mentioned that ‘even though innovation is a game-changer, innovation does not necessarily fall from the sky. Innovation comes from problems people have experienced and it is a response to those real problems.

I recall Theodore Levitt’s description about innovation that it is the combination of creativity and action that leads to innovation. Hence having good ideas is not enough, but taking action and converting those ideas into a physical product, service or strategy is what innovation is all about.

Ho shares the story of a plumber based in the UK who identified that many people faced a problem of finding a plumber quickly and started an insurance-styled business where people paid a premium each month and if they were to face any plumbing problems, they can expect to have a plumber over in a matter of hours.

Innovation should never be stagnant, for Innovative ideas are only strategic until the copycats arrive. Remember the Sony walkman? It revolutionised an entire industry until Apple came up with the iPod. Like Steve Jobs of Apple, Akio Morita was the innovative force behind Sony, but the company’s innovation died with his passing.

A thought to reflect: Can your business be innovative without you?

It is important that business owners and leaders build a strong culture of innovation before they leave the company. – and like Akio Morita, the question now being highlighted about Apple after the passing of Steve Jobs, is wether or not Apple can continue its innovative spirit.

So how do we create a culture of innovation?

Disconnect from technology. – Professor Su Guaning  shared that executives from Google, Apple and Microsoft send their children to schools without computers. (e.g. Waldorf Schools). Being disconnected from technology helps children develop interdisciplinary skills like learning, critical thinking and development. It also helps to boost their creative side.

Support innovation, not managed it. It does not have to follow any form of non-systematic in progression. Supporting innovation means allowing room for mistakes and use meaningful rewards to encourage employees, business partners and even yourself to be innovative. Remember, many innovations and discoveries are the by-product of mistakes.

Enhance innovation under limited resources. Sometimes having limited resources forces us to think of creative ways to overcome challenges or seize opportunities. At the Nayang Technological University an event called a ‘Hackathon’ is held every year where under limited resources, different individuals or teams come together, exercising their programming prowess to collaborate and create working solutions to an industry problem within closed doors in 24 hours.

Involve people in the innovation process. Ask people in your business to share their thoughts and ideas on how to take your business forward. They may see or highlight troubled areas in your business and be able to come up with innovative solutions or creative ideas. Getting them involved will get them to be more supportive when you decide to put those ideas into action.

Looking back these past few months I can now say that sitting down and writing up my business plan was one of the best decisions I have made. The benefits I have gained as a first time entrepreneur have been numerous and well worth the time and energy needed to write up the business plan. Below I have listed some of the major benefits I gained and I recommend that every entrepreneur consider these before deciding to “wing it”.

The Evolution of Ideas

Ideas change and evolve all the time. In order to plan and execute your ideas, it is critical that they be documented in a structured way. Documenting your ideas in a business plan is a great way to see beyond the idea and to look more towards the business world. The difficulties of market penetration and the strength of the competition is often forgotten when the entrepreneur is focused on their idea and its implementation. The business plan solves this “bias” by forcing the entrepreneur to consider many different areas within the scope of their idea.

A great benefit of writing a business plan is that it helps with brainstorming and developing of the initial idea. While writing the business plan for my content bookmarking site, Bmark, I was able to identify opportunities and develop new pillars to the business simply from the research I conducted.

Help Others Help You

As a first time entrepreneur many aspects of starting a business were foreign to me and I needed to get help from different advisers. Having a well written business plan allowed me to easily explain my business idea to who ever with one email. When needing help on market penetration from a close friend, I simply cut this section from my business plan and emailed it to him to review and comment. Many may worry that others will steal their ideas, but the risk of failing to get off the ground with your startup is so much higher, that preventing those who can help from helping is a bad idea.

Investors Still Want to See a Business Plan

Before an angel or VC gives you a dime for your new startup, they want to see that you have a plan for taking your idea to the market place. Unless you have 100,000 hits a day on your week old website, or some how solved world hunger, most investors want to see a business plan.

After writing my 37 page business plan I was much more prepared to face potential investors who would barrage me with all kinds of questions relating to the market I was entering. Having a thorough business plan which is well organized and edited will show your potential investors that you are serious and willing to put in the time and energy needed to get things done properly.

Every Coach Needs a Book of Plays

As time goes by and your new startup grows, your focus will shift from this cool new idea, to hiring staff, speaking to the media and meeting with lawyers. A business plan will act as a guide for both the founders and the staff, and with keeping the team focused on the companies vision.

Conclusion

I strongly recommend that anyone who is considering starting their own business start the process by writing a well researched, in depth business plan. The time and energy invested will be well worth it and may even save you months of frustration. I have only highlighted some of the benefits I gained from writing my business plan but are interested to hear some others. If writing a business plan helped you develop your idea, tell us about it in a comment below and share it with the rest of our readers.

Security/Night Guard

You pull up to the parking lot, and notice that they have a security guard. A security guard for a parking lot is a healthy indicator that have money to spend for something that’s not necessarily essential. Especially if he doesn’t carry anything on his belt. He’s just a glorified watcher, to make sure no one breaks into the cars.

I know of one security guard that greets us every time we visit our client and tries to remember our names but always gets it wrong.

Card Stock

If the business card you get from a potential client is thicker than yours, then they probably have money to spend on a little extra heavier card stock. I know people who have tiny companies and have fancy plastic cards so my first impression would be that she has a big successful company. However if I realize she’s only the worker/employee, and her office address is an apartment complex, then I’ll know something is off. So this tidbit is only a small part of a bigger whole that you should look out for.

Marketing Department

If a company has an outside marketing company, then they have boatloads of money to spend. If they have their own marketing company, then that means they’re very controlling of their image, but still have enough money to spend for a department that is not super essential for most companies.

Fax Number

Most people these days don’t have or need a fax machine. However, if you hit on a company that’s down to toss some money for a fax machine and a monthly number, then you’re golden. Hi-tech companies probably use e-fax numbers, so this only counts for companies 10 years or older, back when faxes were still essential.

Vending Machines

Vending machines are a good indicator that a company has a certain amount of employees to even turn a profit of having a machine there. I don’t know the exact number but it’s definitely over 50 employees.

Vending machines are not usually owned by the company. They either pay the company a percentage of sales, or the company asks to just reduce the soda/food price to pass on the savings to the employees.

If a company has that many employees, then that means stability.

Past Clients

When I’m looking at potential clients, I look at their clients, and use indirect clues to see how much they’re worth. So it’s kind of like asking the girlfriends of the girl you like to see if she likes you.

If a client is a service provider like me, I look at the past clients to see if they are a recognizable brand. I google them, and look at their website, and look for other clues.

If a potential client had a huge client, then I put my bid accordingly.

Year Established

If the company’s been operating for more than 10 years, then it’s a good indicator that they know what they’re doing and have money to spend on your product or services.

Obvious But Still Useful Indicators

Many of these clues are obvious, however, because they’re soo obvious, alot of businesses use them as smoke screens, and to beef up their image.

Office Size

If it looks like they have a big space, check to see if they’re sharing it with someone. Usually there are several people renting the same place to share the load.

Location

I interviewed a well-off PR person once, and they said they rented an empty office on Avenue of the Stars, a wealthy area in Los Angeles, but would always meet with his clients somewhere else until he could afford to furnish his office.  ”Fake it till you make it” he said.

Multiple locations

This is a huge indicator of big business. I know a photographer/make-up guy that has an office in New York and in Los Angeles, even though he’s the sole owner and worker. He said he easily spends over $30,000 to run his business on both coasts.

Their print ads went out on Sunday and then they waited. In their stores, employees busied themselves with all the routine chores and the sales force thought of clever greetings for those who might walk in. Now, their doors are shuttered and the marketing and sales force roams the empty aisles still looking for those new customers. They weren’t willing to change their ways; now, those who still don’t engage new business on social media may be doomed to the same fate.

Learning from the past

So what did these poor souls do that was so wrong as to fate them to obscurity? Their payroll was always timely and accurate, their maintenance staff maintained an inviting climate and their shipping department was competent. When a customer did appear, the sales staff was courteous and well informed about the quality wares they offered. In fact, most everything they did was well done – everything but getting in the new business that made payroll viable.

Doing well at the wrong things

Having a great accounting department, an efficient order fulfillment operation and the cleanest bathrooms in town won’t keep your doors open if you don’t continually bring in new business and service your existing clients. In the digital age, this means having an engaging marketing strategy, and that means being good at social media. Remember the spirits wandering the floors? They had perfectly good supporting departments that ate up management’s time that should have been spent optimizing their comprehensive marketing campaign. Outsourcing your shipping and accounting functions won’t cost you any customers, but stepping up your outreach game is bound to gain your firm new business. While it’s not too late to cash in on the opportunities presented by the holiday sales season, build your e-commerce plan for the long haul, not just one remaining event.

Give yourself the gift of customer engagement

At the center of your online presence should be your website. If you’re not seeing results corresponding to your webpage content, your first assumption should be that you have lousy on-page content. Build good landing pages that change often and make it easy for potential and existing customers to move to some point of sale. Without that last part, all other efforts are pointless. Getting eyes on your webpage is where social networking comes in.
By focusing on not just one, but several social networking platforms, Facebook, Twitter and don’t overlook Foursquare if you have physical stores, identifying potential sales opportunities will yield results. Short contests focused on a particular product and discounts for “checking in” at a store can lead to the building of customer loyalty, and that’s more important than you might know. When a prospect is converted into a bona fide customer, keeping that customer engaged through social media not only results in referrals, it cements that customer’s loyalty and repeat tendency.

Ridding your ghosts of commerce present

The ghosts of commerce past didn’t know how fast the market was changing. Now, if you think you know the pace of change, you’re probably wrong. The digital age means that you can’t just respond to buyer interest, you have to anticipate that interest so well that your marketing efforts are a step ahead. You do that by focusing like a laser on what you must do, not on what you’ve always done, even if you did those things well. When your social media presence anticipates need based upon close engagement, you’ll be far removed from a ghostly future.

However, have you ever noticed how the most successful companies on Facebook realize it is more than simple dialogue that keeps customers interacting and coming back? Customers want more than company updates; they want interaction, freebies, contests, and games that capture their attention.

Fostering strong connections with customers takes creativity and can be difficult, but has the ability of resulting in a vocal group of brand advocates.

As Facebook continues to grow, so does the ingenuity of branding campaigns that can reach these members.

Some of the most successful campaigns captivate users through:

Being Creative

Since Ford Motor Company’s widely successful use of social media to aid in the release of their 2010 Explorer, social media managers have had to consistently raise the bar to get fans involved.

For instance, take the Hotels.com Trip Your Face campaign, which allowed fans of their page to upload their own picture into one of three destinations and would produce a short video staring the fan.

Hotels.com used their creativity to not only gain fans, but to become viral by automatically posting the video to the customers wall, encouraging friends of that Facebook member to visit the page and produce their own video.

Offering Exclusivity

Would you join a community if they offered exclusive content that interested you? Content can include media, discounts, prizes, in-store coupons, and even sneak peeks at new and upcoming products.

For example, Beats Electronics, maker of Beats by Dre headphones, provides exclusive and inspiring content in the form of YouTube videos that gives the stories of musicians who came from modest beginnings.

Similar in exclusivity, VA Mortgage Center (VAMC) offers the Military Education Program, which is a scholarship exclusively for fans of their page that have some connection to the military community. VAMC developed a tab for users to submit their application through the Facebook page only after they have liked the page.

Building Loyalty

We all know a “like” isn’t enough. Pages such as Nike, McDonalds, or Coca-Cola have millions of “likes”; however, do you think the majority of these customers actively engage with the page? Of course not.

Constantly ask yourself, what keeps your fans coming back? Or how can you maintain constant engagement? When you add value to your page, you give your fans a reason to come back and engagement becomes much simpler.

Domino’s Pizza UK launched a campaign last year to build brand advocates by using their “Superfans” application. The application rewarded Domino’s most engaged customers with special offers, promotional codes, and they even displayed their top fans on the application tab.

Another great campaign that offered value was Kohl’s Cares campaign. In this campaign, Kohl’s Department store gave away $10 million to various schools decided by fans voting on their fan page. The top 20 schools with the most votes were given $500 thousand each. Kohl’s fan base also jumped well over a million due to this campaign.

While forming creative campaigns that add value and offer exclusivity is great, keep it mind it is necessary to be relevant. If your campaign is blatantly off topic or out of your niche and only has the goal of building the most fans, there’s a good chance you’ll have low engagement and low fan value. Simply ask yourself, would I rather have ten thousand fans that are actively engaged in my page or a million fans that lack interaction or a strong connection.

Today we’re presenting an interview with Neil Patel, cofounder of KissMetrics and Crazy Egg. Check out his blog over at QuickSprout.

Neil is a serial entrepreneur, blogger, and investor. Through his two companies, he has helped large corporations such as AOL, General Motors, Hewlett-Packard and Viacom make more money from the web. By the age of 21 not only was Neil named a top 100 blogger by Technorati, but he was also one of the top influencers on the web according to the Wall Street Journal.

How and where did you get the idea for your companys?

Most of my ideas came from pain points my business partner or I experienced. Every once in a while we also got ideas from friends, family members, or customers who were also experiencing pain points.

Over the years I’ve had hundreds of ideas, but I’ve only run with the ones that were big enough and solve pain points that people are experience today.

Elon Musk. He is my favorite entrepreneur by far. How cool would it be to say, my competitors are Toyota (Tesla) and N.A.S.A. (Space X). He only creates big businesses and doesn’t let anything stand in his way. For example, when he couldn’t raise money for Tesla, he used almost a 100 million of his own dollars.

Elon also goes for businesses that change the world and solves huge problems. If you look at his batting average, you’ll see that he knows what he is doing.

Sell, sell, and sell. That’s the one thing I do more than anything as if you can get good at closing big deals, you’ll make money. It takes time to get good at sales, but it is a necessary skill that I recommend most entrepreneurs learn.

At the end of the day, you just aren’t selling your product or service to customers. You are also selling to employees, investors, and anyone else out there. Sales is a good skill to have.

Never give up and keep on learning from your mistakes. I know that’s technically two tips, but I feel that they go together. If you are young you probably don’t have much overhead, so you should keep on pushing forward. As time goes on your odds of succeeding will increase as long as you are learning from your mistakes.

And if you want to take it one step further, you should also learn from other people’s mistakes.

• Liquid Planner – This tool allows my team to collaborate together. Plus it helps us stay on track because it helps us be more efficient with our communication efforts.
• Rescue Time – as an entrepreneur you need to work efficiently. Rescue Time monitors what you do and where you are wasting time.
• Gmail – my life revolves around email and there is no better email app than Gmail.
• Wufoo – if you want to keep track of your contact forms, Wufoo is a good tool that helps with this.
• Pipe Drive – my favorite sales management and CRM solution. It’s a lot easier to use than Salesforce.

This interview was made possible thanks to the YEC.