Outside the Box

Tech@NYU is revving up for their semi-annual Startup Week for entrepreneurs, techies, businesses, and more.

The event kicks off on Saturday with the 24-hour hackathon put on by hackNY, where teams compete to build applications and are rated on an “awesomeness” factor. The 2011 Spring winner was for an Etsy Shopping Network, an application that puts the entire Etsy catalog on your television.

After the caffeine infested, adrenaline rush event is finished, the week following is full of panels and workshops with various subjects.

The NY Tech Club began in 2009 when Trevor Owens wanted to find a way to bring together computer, business, and design students in order to collaborate on start-ups. He explained there wasn’t a lot going on at NYU with entrepreneurs and  wanted to create a center point for students. The first event “Business Meets Tech” took place in October of 2009 with only 50 attendees. Today, approximately 1,000 people attend the club events, which is quite an impressive growth rate for two years. The events are free to anyone and a list of future gatherings can be found here.

Last week, Facebook announced an incentive plan for small businesses by offering a $50 credit to 200,000 small business for use on their advertising plan.

COO Sheryl Sandberg, former vice president of global online sales and operations for Google, is hoping to pump up revenue from ads offered on Facebook by targeting small businesses.

Sandberg estimates of the 30 million small businesses, 9 million are using Facebook to promote their business through page creations. She is hoping the credit will spark businesses to spend money on Facebook in the form of ads.

The credit is used for the cost businesses must pay each time a consumer clicks on their ad. The cost-per-click on the ad varies with the popularity of the keyword. For example, if someone is searching for designer jeans, the keyword cost may be much higher than someone who searches for a very specific brand.

Sandberg told USA Today, “It’s easier for small businesses to turn to Facebook, because they don’t have to pay for building a site, and most people can make a Facebook page, or could learn within minutes.”

With Google being portrayed in an unflattering light while being questioned by Congress for antitrust issues, Facebook couldn’t have picked a better time to rollout the plan.

But will it work?

Granted Facebook has risen to the number one destination on the web with 750 million users, but I am not completely sold on the program.

Small businesses, or any business for that matter, are able to put up a free Facebook page quickly, which allow for interaction with fans, marketing of promotions, and news updates. So, why spend the extra money on ads?

Businesses  need to keep in mind that $50 credit will be gone in a matter of days if not hours for certain businesses. The cost-per-click can be anywhere from ten cents to $3.00 to much higher with no guarantee of a sales conversion. Most businesses may not be able to afford that risk and are looking at free advertising avenues like Twitter or LinkedIn to market their products and services.

Also, most people who visit Facebook do so for the social aspect and not necessary to shop. Google’s click through rate supersedes FaceBook’s rate with approximately 2% compared to .05%. An uphill battle looks likely for the social network.

If businesses are looking to take the plunge, I believe Facebook’s main advantage lies in the demographic. A business can target an extremely specific demographic based on the extraction of profile data. For example, Gatorade can target people who have a job in sports, are interested in sports, or like certain teams.

Even if the idea of placing ads on Facebook appeals to small businesses, I am a little wary of the timing of Sandberg’s announcement. I believe she may have ulterior motives in the respect that Facebook is expected to make an IPO in 2012 and the online ad revenue will add to the appeal for investors. Also, her announcement coincides perfectly with the Google investigation, the troubled economy, and small businesses crying out for help from the government. It is a great publicity for Facebook but there needs to be more measurable data.

The idea sounds appealing. If you are one of the lucky 200,000 businesses give it a shot but make sure to review the analytics before making the full on jump into the world of online ads.

[Image via Wiki Commons]

 

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“Two billion children in developing countries do not have or have very limited access to schooling,” Nicholas Negroponte, founder of One Laptop Per Child, told a crowd of hopeful social entrepreneurs at NYU on Thursday. He is changing that alarming statistic with his non-profit organization.

The mission of One Laptop Per Child (OLPC) is to provide children from developing countries access to education through their very own laptop. The laptop, XO, is usually issued through governments and then distributed throughout the country. The current price is extremely low at $185 but don’t let the price deter you from its capability. These computers are amazing little pieces of technology.

In order to keep the price low, OLPC has open-source software, limited the features, and does not make a profit off the XO. The video below provides a visual overview of the XO Laptop.

As Negroponte discussed OLPC, the highlights or stories are what I believe drive social entrepreneurs to make the world a better place. Negronponte told us about how excited families were to have computers in their electricity-free home as it provided a bright light, how a girl that was behind in school chose to shoot a cow giving birth for her cattle assignment and received well over 100,000 hits on YouTube, and the fact children are teaching their parents and grandparents to read and write. All were touching and inspirational.

As the audience sat enthralled, Negroponte did offer a bit of advice—before thinking big, start on a smaller scale to gain experience, which is exactly what he did. Before launching OLPC, a friend urged Negroponte to build a few schools in Cambodia with the goal of providing every child a computer. When the schools were a success, Negroponte asked, “If every child in the world had access to a computer, what potential could be unlocked?” This question became part of the OLPC mission statement.

Currently, OLPC has provided 2.5 million computers to children, 300,000 are in route, and another 300,000 are backordered. Even with such an amazing impact, Negroponte wants to do more.

An XO tablet computer is in development for OLPC, and we were lucky enough to see the model. It did feel heavy, but again the versatility of the tablet outweighed any weight issue.  Besides the new model, comes a new concept for OLPC: build on a collective nature instead of the original singular teaching model. Negroponte also wants to measure the success of this new model and build off of it.

As Negronponte wrapped up, I couldn’t help but feel excited for the aspiring entrepreneurs. The world right now is in mayhem, and I couldn’t think of a better time to start making a difference.

David Pogue reviews the XO laptop

[All images via Flickr]

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Author’s Note: The below blog was a class assignment and is not related to entrepreneurs.

Part classroom shake-up, part team-building, and part possible guinea pigs for his new book project, Everyone a Player, Professor Penenberg designed a scavenger hunt for our writing class to get us acquainted with Wall Street and being a reporter.  I was all game.

Put on by Stray Boots, the idea was simple—receive text clues, hunt down the answer, reply, and move on to the next one. Even though we lost with sweat dripping down us, I loved the team building, brain racking, and instant gratification texts (you are correct!). Plus, I believe I actually will remember more from being involved in a game than reading it in a book. Stray Boots and thousands of other companies may be onto something.

According to The NPD Group, in 2010 the gaming industry’s revenue reached $25 billion.

Games have taken over so many parts of our lives, we hardly notice it—reward programs, point systems, text to win, FarmVille, the list could go on and on.  I think pure genius (leave your thoughts below in comments). With a society driven by competitiveness, the constant need for recognition, and a short attention span games may be a great supplement for training videos, can’t-stay-awake lectures, and the thousands of chapters you must memorize in school. Look, I am not saying to scrap the traditional teachings but providing additional information may help with retention.

As someone who is competitive, a lover of games (list your favorite below), and easily distracted I could be a bit biased.

Growing up, I always became extremely excited when my sister and I got to play Bingo. What was supposed to be a special occasion soon became a weekly ordeal—grab your six lucky cards, listen in anticipation for the number, scream Bingo, and pick a prize. I raved about it so much, my friends soon began showing up.

My love of games, followed me throughout my teenage years and into adult hood. I remember spending hours conquering Zelda, Mario Brothers, Final Fantasy, and other level games. I loved my dopamine award for my problem-solving skills, ability to find the weakness in an opponent, and unlock the next level. Nerdy? Perhaps. But as more and more industries are looking into games as a solution to their problems the nerds are becoming more mainstream (check out “How Video Games are Infiltrating–and Improving–Every Part of Our Lives,” for a more in-depth look at gaming).

Nowadays, I have learned my lesson about the value of time and put down the iPad. Yes, I have conquered Angry Birds, Cut the Rope, Plants vs. Zombies (thrice!), every Dash game imaginable, and am still on the look out for the best game bar in Brooklyn (suggestions welcome) but as a graduate student I need to realize my weakness and the necessity of focus.  That being said, the idea of games in the classroom environment is always welcoming.

With students heading back to school in hopes of becoming the next Mark Zuckerberg, many people believe four-year programs are becoming a thing of the past.

This year Peter Thiele, co-founder of PayPal, launched the fellowship, “20 under 20” with the hopes of finding top entrepreneurs wanting to improve the world. The  handful of finalists received a $100,000 grant, and the opportunity to mentor with elite leaders of Silicon Valley. The only catch? They are not allowed to enroll in college.

As Thiele’s program was announced, controversy stirred in the educational system with many appalled by his initiative. Others were left wondering if education was becoming obsolete for entrepreneurs.

Yes, Mark Zuckerberg and Bill Gates are famous college dropouts, but can the case be made to skip the diploma?

In terms of entrepreneurism, a lot of what it takes to make it cannot be taught in a controlled setting at school. Mistakes need to be made, risks taken, and lessons learned. To fail in school is not an option but to fail in the real world may be a reality many find beneficial.

Also, many argue schools expense outweighs the advantages. The constant tuition hikes continue to occur even with the state of the economy and the unemployment rate at a staggering 9.1%. The National Center for Public Policy and Higher Education reported a 440% increase in tuition over the last 25 years. You would think with the astronomical cost of tuition, graduates would be able to find jobs, pay off their debts, and live happily ever after. Reality is calling and that fairytale is just not happening.

This whole education bubble was the reason Thiele started the “20 under 20” fellowship. In an interview with Tech Crunch, Thiele stated,

“Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Believing college graduates’ innovation was being hindered due to  the enormous debt incurred in school, many talented entrepreneurs were fearful of taking risks. Thiele wanted to stop the cycle, so he provided another outlet besides college for entrepreneurs. He hopes finalist John Burnham will continue his desire for space mining or Laure Demmy will produce anti-aging technology.

Even with the education bubble ready to burst, I still believe a degree is an invaluable source. More and more schools are vying for would-be entrepreneurs to attend their program and the numbers are growing. The Princeton Review now has a the top 25 entrepreneur programs for both undergraduate and graduate, which only recently created. The dynamic of programs is changing allowing for more real world experiences, mentors, and feedback.

Also, if people continue to believe it only takes hard work and passion to make it big, there will be a lot of people in a far bigger mess than student loans. Many entrepreneurs have the ambition but need the tools and foundation to build their dreams upon.

I am sure we have all heard it before but connections, connections, connections. In today’s world one of the best reasons for going to school are the people you meet. As sad as it may be, it is true. Not everyone will have the chance to meet Silicon Valley’s brightest tech stars, but they will have the opportunity to build a solid base.

Yes, if you are like Burnham or Demmy use your god given talent to make the world a better place without traditional schooling, and I will be honored to be a part of your generation. If you are like the other 99% entrepreneurs, a few classes never killed anyone.

With Inc. Magazine naming Ideeli the fastest growing company of the year and the Mercedes-Benz Fashion Week in full swing, I thought it would be the perfect time to examine where  fashion entrepreneurs are succeeding.

With super models strutting down the catwalk, a continuous flashing of bulbs, and the sounds of thunderous applause, the Mercedes-Benz Fashion Week is a dream come true for any fashion entrepreneur.

Rafael Cennamo, one of the notable newbie designers, explained to The New York Times

“Mercedes-Benz Fashion Week is a way to show the world exactly who I am.”

With notoriety, comes quite a hefty price tag. According to The New York Times article, “No Beginner Discounts at Lincoln Center,” the average cost to put on a 15-minute show can range anywhere between $30,000-$100,000, with more established designers spending up to $500,000. This is no easy feat for anyone, especially young designers,  and with an unknown return on investment, it makes taking the plunge that much more difficult. That being said, in the world of fashion many designers, including Cennamo, must find some way to, as Tim Gunn would say, “make it work.”

Fashion entrepreneurs hope to break into the business with the dream of making it big, having celebrities don their couture, and Rachel Zoe going “bananas” for their latest spring line but the reality for many is far less glamorous but possibly more profitable.

Located approximately four miles away from Lincoln Center, Ideeli is tucked away in the SoHo area on Lafayette Street. Co-founded by Paul Hurley, Ideeli offers customers steep discounts on designer brands for a limited time. Ironically, it is also one of the main sponsors of Mercedes-Benz Fashion Week.

Just named the fastest growing private company by Inc. Magazine with a growth rate of 40,822% in three years, Ideeli’s revenue is sitting pretty at $77.7 million.

Besides Paul Hurley’s perseverance, a lot of what got him to where he is today deals with making mistakes, learning, and adapting.

Initially, Hurley thought he hit jackpot gold with his Aveo, a software company but a fumble caused him to miss an IPO opportunity.

“We were on track to have a big win, and then the downturn came, and we got caught;. I was completely wiped out,” Hurley told Inc. Magazine

While continually launching other small businesses, Hurley discovered the demand for designers to unload inventory while consumers desperately desired the luxury brand.

“The day after Leman failed, which was a spectacular day for us, you could fire a gun in Saks and not hit anybody. No one was shopping. But they were shopping at Ideeli. So that was a big epiphany moment,” Hurley told Inc. Magazine

You won’t find any paparazzi or expensive cocktail parties happening at Ideeli. Instead, according to Inc Magazine., Ideeli is flanked with cheap office furniture in an extremely small setting for its hard-working staff of 200. Having around-the-clock photo shoots to ensure all 3,500 images make it online each week, dealing with an imperfect logistic system, and juggling vendor relationships creates a completely different fashion world than the circus down the street.

Ideeli, among other online flash-shopping sites, found a gold mine by offering limited time discounts. Not only are they providing an enticing, competitive environment for consumers, but designers are in desperate need to dump inventory. With continual funding, Ideeli is looking to expand into other sectors of flash sales, the latest being travel.

People wanting to break into fashion may feel like the money and thrills live on the catwalk but following the trail leads to what consumers desire and right now it is the allure of glamour without the price tag.

Even with Ideeli’s monstrous success and the excitement of designers showing their first collection at Mercedes-Benz Fashion Week, it is important to remember running your own show takes a lot of work.

Coming from a small business background as the owner of an online women’s contemporary clothing store, I remember the days of being invited to the Rebecca Taylor or Tibi show during fashion week and for some reason not going; it may have had something to do with the amount of work I needed to get done. On a day-to-day basis, I rarely ever dealt with fashion but instead was involved with the mundane tasks of running the business: writing descriptive copy, handling shipments, paying invoices, developing press releases, and overseeing online advertising. Only a few times a year did I get giddy about seeing the must-haves for the coming seasons. If it sounds like a drag, most the time it was.

Even though I loved running my own business, there was a bit of relief when I decided to close the door when the economy tanked. Yes, the highs were amazing but I am definitely glad the stress, sleepless nights, and tears are gone.

Realizing Mercedes-Benz Fashion Week is displaying retail luxury at its finest, and Ideeli is offering the finest deals, flash-shopping sites are where the potential for growth is at its highest. With the economy in such an unstable state, people are looking for escapism. A Hermes bag can offer that outlet but a savings of 70% off a Chanel vintage bag seems even better in the eyes of consumers.

[Images via WikiMedia Commons, Zemanta, WikiMedia Commons]