Opinions expressed by Entrepreneur contributors are their own.
Stock prices continue to hinge on the uncertain progress of U.S.-China trade negotiations.
Hopes for a deal were higher today and stocks were up sharply in the morning, though they lost steam in the afternoon. The Entrepreneur Index™ closed up 0.69 percent, while the Dow and S&P 500 indexes were up 0.64 percent and 0.54 percent respectively. The Nasdaq composite index gained 0.95 percent.
Twitter and the FANG stocks were back out front leading the technology sector higher today. All of them were up more than one percent and Netflix rose 3.6 percent.
Twitter, up 5.25 percent today, had the biggest gain on the Entrepreneur Index™. It continues to recover much of the ground lost since July when active account users fell for the first time on the social media network. That was largely because of Twitter’s ongoing efforts to rid the network of automated “bot” accounts spreading politically and/or commercially motivated messages.
The market appears to believe the company has a handle on the issue now. The stock has been one of the hottest in the volatile tech sector of late. It is up 37 percent from the October low and has risen 14 percent in the last five trading sessions.
Ever-volatile Wynn Resorts had one of the biggest gains on the day, rising 3.66 percent. Meanwhile, O’Reilly Automotive Inc. continues to thrive. The auto-parts retailer’s stock was up 3.25 percent today and has risen 47 percent this year. Other good gains were posted by Ralph Lauren Corp. (2.69 percent), salesforce.com (2.41 percent) and Cerner Corp. (2.13 percent).
Investor day at Under Armour Inc. was one to forget for shareholders this year. The stock fell 10.44 percent — the biggest decline on the Entrepreneur Index™ today — as executives at the apparel-maker addressed analysts and investors about the company’s outlook.
Analysts are skeptical of the company’s ability to grow sales, particularly in the competitive U.S. market where sales are falling for the company. Under Armour has also not entirely put a cultural issue centered on the inappropriate expensing of entertainment by employees–think strip clubs–behind it. Two marketing executives close to CEO Kevin Plank were fired this week. The stock has recovered nicely from a three-year slide, up 43 percent this year, but is down 18 percent in the last four trading sessions.
Outside of Under Armour, the REITs were the weakest performers on the Entrepreneur Index™ today. The sector followed the “rates up/REITs down” trading adage. The 10-year Treasury bond yield rose three points today and all nine REITs in the index were down on the day. Shopping center operator Macerich Company (-4.48 percent), SL Green Realty Corp. (-2.77 percent) and Kimco Realty Corp. (-2.75 percent) had the biggest declines.
The Entrepreneur Index™ collects the top 60 publicly traded companies founded and run by entrepreneurs. The entrepreneurial spirit is a valuable asset for any business, and this index recognizes its importance, no matter how much a company has grown. These inspirational businesses can be tracked in real time on Entrepreneur.com.
Jon Sebastiani, whose first business was acquired by Hershey, now leads snack company Smashmallow.
6 min read
In this ongoing column, The Digest, Entrepreneur.com News Director Stephen J. Bronner speaks with food entrepreneurs and executives to see what it took to get their products into the mouths of customers.
Jon Sebastiani scored a major win with his first business, Krave Jerky, when it was acquired by The Hershey Company in 2015 (financial terms were not disclosed).
The entrepreneur, whose background is in wine, founded Krave in 2009 and has since gone on to run an early stage private equity firm that invests in food companies. But two years ago, he once again got the entrepreneurial itch and founded Smashmallow, which seeks to raise the bar on what Sebastiani called a nascent category: marshmallows.
Smashmallow, which creates flavored marshmallows such as cookie dough, cinnamon churro and mint chocolate chip — and also sells rice crispy treats — can be found in more than 15,000 stores. The privately funded company said it expects more than $40 million in retail sales in 2019.
Sebastiani spoke with Entrepreneur about where the idea for Smashmallow came from, what his initial goals were and his advice for other entrepreneurs.
On the origin of Smashmallow
“I have a vicious sweet tooth. I have a daughter. Today she’s 10 years old, but when I started Smash three years ago she was seven, and she’d always have sweet treats around the house — cookies, brownies, gummy bears. When you’re training for Ironmans or marathons you really have to be extremely disciplined on your diet, and oftentimes those don’t mix with a vicious sweet tooth. So over the years one of my little tricks was marshmallows, because when you look at the ingredient panel and the nutritional deck, a marshmallow kind of scratches that itch of a sweet treat. Yet from a sugar content standpoint and from an ingredient standpoint, it’s really not that bad for you.”
Image Credit: Courtesy of Smashmallow
On what he thought the business could be
“The basic business thesis was, can we make the marshmallows snackable by utilizing clean ingredients, removing corn syrup and any artificial flavor and creating a more decadent experience by adding inclusions to it? So a pretty simple thesis was built, but the basic big question from an entrepreneurial standpoint [was can we] change consumer behavior. The thrill of an entrepreneur is changing consumer behavior [around marshmallows].
“We’re not leading the next wave of plant-based meat replacement. This is a simple disruption, but it’s an example of changing the conversation around usage occasion by offering a healthier more guiltless sweet treat.”
On the opportunity
“Most people think marshmallows are for s’mores, rice crispy treats or hot cocoa. Very few people snacked on them, but we wanted to change the conversation. So we packaged it in a bag in a pouch that resembles a snack bowl. We have great flavors. They’re beautiful looking. Then we sent out in a messaging strategy that went right after other sweet treats and positioned it as a less-guilty sweet treat. … The results were pretty astounding. People were adopting the product, snacking on it, giving us feedback, like, ‘Wow, where have you been all my life?'”
“The consumption of food in the U.S. is changing so quickly in terms of what consumers demand and are looking for, and as an entrepreneur to participate in this sweeping change where we are so nimble, we have access to so much capital, we have relationships with all the leading retailers in America that are wanting innovation and we’re able to move so much faster than big food — it’s like a gold rush in terms of opportunity.”
On what kinds of products entrepreneurs should create
“[Food] buyers tend to be risk-free, and they’re looking for incrementality. So if you have a product that is driving incremental, premium or penny-profit growth to their set, they’re going to get behind you. That’s what’s happened [with Smashmallow]. Since Target has launched the brand, we’re driving an incremental purchase. We are not cannibalizing their premium set.”
Image Credit: Courtesy of Smashmallow
On where entrepreneurs go wrong
“A lot of entrepreneurs look at the marketplace first to see what’s working, and then they design their product out of what’s working rather than looking into the abyss of the unknown and truly delivering a first-mover product, whether that product is in the form of changing a usage occasion or simply a new product. But when you’ve found a unique product that’s alone driving innovation, you’re going to get a retail community to support you more. True entrepreneurship is the ability to find an opportunity within a nascent category or within a new product experience that is driving different consumer behavior. So the bottom line is differentiation.”
On whether he wants Smashmallow to follow Krave’s path
“We’re running our business and building our business for the long run. We truly want to build an iconic brand that will withstand time rather than sprinting toward some exit in some predetermined amount of time. But I think ultimately we invest and build brands for some eventual partnership or exit in some capacity.”
On his secret weapon
“One of the skills that many entrepreneurs forget about is the ability to listen, because by virtue of having the courage and the backbone to go out and actually start the business from an idea that you have takes a lot of risk and courage because you could fail. Therefore a common trait of these entrepreneurs is overconfidence, and sometimes overconfidence will preclude you from listening to honest feedback. Despite my past successes I don’t ever want to be drinking my own Kool-Aid, so I live in a very humble place and really try to practice the art of listening.”
When you work with as many entrepreneurs as I do, you see the same patterns in terms of mistakes that owners make once they are starting to grow and scale. Once a business gets past the initial stages—which come with their own set of mistakes—it moves into a new phase, which is growing and expanding what you’ve worked so hard to launch. As is always the case, a new phase in business, like in life, comes with its share of missteps, and I see owners and CEOs making them time and time again when scaling a business. The following are the most common mistakes companies make during the growth and scale periods, and how to avoid them.
Refusing to hire a new team to replace original employees
The people who got you this far may not be the ones who can take you where you need to go next. When we start a business, we are juggling a ton of responsibilities. We’re typically cash constrained, which forces us to hire lower-cost generalists to help us. They don’t necessarily excel in one area of the business, but they are good enough and flexible enough to help wherever we need it. But as the business becomes more mature and we approach a period of growth and scale, it’s important to bring in specialists to run each department, such as a head of sales, marketing, or technology. It’s also important to bring in people who have previous experience taking a company where we want ours to go. For example, if you want to build a company that does $10 million in sales per year, you need to hire a head of sales who has taken a company near your size and grown it beyond your $10 million target.
The problem is that often entrepreneurs feel loyalty to those who joined their business prelaunch and fought through early battles together. They tend to hold on to them for too long, stick them in the wrong roles, and hope they will succeed. It takes a very different type of person to run companies with 10, 20, 50, 100, or 200 people. So the number-one job of an entrepreneur, at every stage in business, is to make sure she has the right people in the right roles at the right time.
Not understanding the economic drivers of your business
One very common mistake for entrepreneurs at this stage is that they don’t understand the numbers behind what is truly driving the business. So they don’t make decisions based on data and wind up investing in areas that don’t make the most business and economic sense. This is an especially common mistake for companies that are overcapitalized. They overspend. So it’s crucial to slow down, make sure you have identified a true product/market fit that makes economic sense and a proven system for acquiring customers, and then decide to invest in scaling.
Being stuck to the product road map
It is very common for entrepreneurs to get past the launch phase and be stuck in their own business product cycle. We’ll discuss how to avoid this below.
This occurs for one of two reasons. The first one we mentioned above: not understanding the economic drivers of your business. The second is being stuck to the product road map. Our team makes a list of what it will build next, prioritized and placed in order. But sometimes we get so caught up and wed to the road map that we forget to listen to the customers. As a result, we launch what we want instead of what they need. When preparing to scale, focus on data, feedback, and what your paying customers are telling you they want most. Build a product road map around their wants and needs.
Finally, we run into companies that do a great job getting to market, build great products, and have momentum. However, they are not sure how to take what they have and scale quickly. They get tunnel vision and can’t wrap their heads around how to increase lead flow, profits, and valuation. We’ll talk more about valuation shortly.
If you’ve been contemplating ditching your 9-to-5 for self-employment, here are five things that will make your transition easier in the long-term.
7 min read
Opinions expressed by Entrepreneur contributors are their own.
Starting a new business isn’t easy and it, of course, has its share of ups and downs.
Some months are outstanding (financially), while others aren’t.
Some months you’re in “pitch mode” to land new business and others you’re delegating work to be performed, hiring new team members, firing ones who aren’t working out and doing all the “things” that nobody on social media will ever know, hear or see.
For a person who’s historically been a “corporate intrapreneur” — otherwise referred to as someone who acts entrepreneurial yet is paid a salary as an employee of a company — to have full autonomy to show up and do your work on your terms while having the security blanket of a paycheck can be rewarding.
However, the thought of not having that direct deposit hit one’s bank account every 15th and 30th of the month can also be terrified to the point of paralysis by analysis.
“How will I pay my rent?”
“How will I make my mortgage next month?”
“How will I sustain my lifestyle?”
“How will I be able to afford expensive dinners and vacations?”
These are all questions that run through the minds of corporate intrepreneurs — who have an entrepreneurial mindset — and lead them to stay put more times than none.
It’s fear. It’s self-doubt. And, it’s real.
On Oct. 1, 2018, when my LinkedIn inbox became flooded with “Congrats on your work anniversary!” messages, I took a moment to reflect on what it took for me to walk away from a job that previously paid me over $150,000 per year.
For beginners, working a full-time job with a salary and benefits isn’t a bad thing if you look at it from the perspective of you’re being paid to learn new tasks and gain experience(s) which will you take with you for the rest of your career. Experience which someday you can charge large sums of money for.
Post-recession, circa 2012, I had to temporarily step away from being self-employed and go work for corporations to rebuild my credit and save up money, which had been nonexistent in the previous four-year period.
One of those jobs led me to start social media for Winn-Dixie, one of the largest supermarket chains in the U.S.; the other was working at LinkedIn, which relocated my family and me to San Francisco and opened up a new world of opportunities which previously didn’t exist.
However, there comes the point when the paycheck, company logo or work culture does not fulfill your needs, and you have to assess whether your purpose and passion are more important than a paycheck.
If you’ve been contemplating ditching your 9-to-5 for self-employment, here are five things that will make your transition easier in the long-term:
1. Have a bigger objective in mind outside of your day job.
If you cannot answer that you love your job, then you’re in the wrong position. I often will meet gainfully employed professionals who dislike their boss or the company that they work for but feel that staying put outweighs the risk of going elsewhere — including on their own. If you have years of experience and don’t think that your value is recognized within your organization and are being held down, perhaps think about freelance consulting on the side to get a feel for what it’s like cutting your invoices, sending out proposals and doing work independently.
2. Start building an identity outside of your current job title.
As soon as you get the “itch” to work for yourself, make your priority not what you will do but how you will do it. Begin with building a professional identity outside of your job title or company logo. Many working professionals are known as “James at X Company” or “Susan from Y Company” because they’ve built their entire legacy around being an employee of a high-profile organization — which is fine, but there comes the point where you need to create your own identity independent of that employer.
Begin writing for publications in your industry as your name only — unaffiliated with your employer or current job title. Start speaking more at industry conferences. Participate in online groups on Facebook and LinkedIn to grow your identity and thought leadership but also to network.
3. Secretly network within your network.
For two years before I exited my corporate job to start my social media marketing agency Gil Media Co., I met privately with close colleagues to share with them my vision for “next steps,” either at industry conferences or by phone. While you don’t want to share your intentions publicly with the world just yet, what you do want is for your closest colleagues to act as informal advisors who may have a job for you (on a freelance basis) or can introduce you to someone that might be looking for your expertise. You’d be surprised at exactly how many major corporations are looking for consultants or freelancers with your skill set and expertise.
4. Don’t quit without paying clients.
Unless you’re fired or laid off from your job, do not quit unless you have a paying client or two. Not having guaranteed income will bring you stress which will make it harder for you to focus on the basics of getting a business up and running. Therefore, it is critical that you have income coming in from other sources before you become self-employed (by choice). You should also have at least six months of salary in liquid cash saved up to help you bridge the period between going out on your own to bringing in consistent business.
In my case, a year before leaving my corporate job I picked up a client (ironically from a free speaking gig) which afforded me the ability to save cash that would eventually buy me a runway.
5. Document the process.
Sharing your story is a competitive advantage. Why? Because it’s your story. Strangers will be more inclined to help you when they see someone who’s sharing their vulnerabilities. As I share in the video and short documentary above titled “Chasing Opportunity,” a layoff in the financial services industry in 2008 led me to discover social media as a gateway to rebuilding and rebranding myself, which led me down a new career path to where I find myself today. While my story is unique to me, it’s also real and relatable.
As you’re growing a new business document the process of growth — and sometimes failure — through daily stories on Instagram or Facebook. Leverage mediums like YouTube and LinkedIn, too, to amplify awareness around whatever your “hustle” is. You will find that there’s a world of opportunity waiting for you outside of your city or state if you see it. However, sharing who you are, what you do and what you want to accomplish is critical to unlocking it.
If you need advice to help with your transition, let’s connect on social media and discuss.
Without a roadmap, your chances of failure increase.
5 min read
Opinions expressed by Entrepreneur contributors are their own.
One of the biggest mistakes entrepreneurs who want to build a tech startup make is that they don’t create a roadmap or prototype. Without a prototype, you can end up going down an unclear and expensive path when you’re developing your mobile app or product. That’s why prototyping is a crucial part of creating an app.
Here’s how it can benefit you and how to get it done:
1. Gain clarity.
Without a defined concept, you can easily set your app up for failure, and it’s hard to define your concept sans a roadmap and a visual aid, such as a prototype. Your roadmap helps you to define and sharpen the idea of your concept by mapping out the customer’s journey.
Base this information on market research by analyzing your competition and determining what features attract your target audience to your competitor’s apps. Your app should address your users’ needs and provide more value than what your competition offers so that you have a unique value proposition.
With this information, you can produce a high-fidelity prototype of your mobile app that is interactive so that stakeholders can have a clear vision of what the interfaces, interactions and other elements of your app would be like once the final app is made.
2. Quickly validate your idea in the market.
If you want to entice stakeholders to invest in your app, you need to validate your concept in the market. A prototype helps you achieve this goal since it can help you test market demand. You can opt to create a prototype using a prototyping tool or have an outsourced team build one for you to your specifications.
Choose app metrics, such as app usage and engagement, to determine market demand so you can save time and money from further developing an app that may not work.
3. Save on cost.
App development isn’t cheap. It could be $5,000 to $50,000 or run into the hundreds of thousands, even millions, depending on the customization and maintenance required. Building an app without developing a prototype first drives up your costs over time. Maintenance costs can take up 15-20 percent of the cost of app development.
A prototype helps you reduce the expenses of app maintenance due to inefficiencies since you’ll be able to identify bugs and vulnerabilities before the final development of the app. You’ll also save on rebuilding costs if your developers later find that the app is not meeting compliance requirements.
4. Develop consistent UX.
If you want to get users hooked on your app, you have to provide an experience that helps facilitate what your app is offering your users. Mobile marketing analytics research company Localytics noted in a study that only 21 percent of people who download apps only use the app once. So, it’s important to focus on taking steps to retain users and understand their behaviors.
With a prototype, you have the power to observe user interaction with your app. You can study user behaviors early on in the development process and make adjustments to your app to improve their experiences. For example, you can change the font of a button’s text if you notice that users click the button more often. This helps to improve their experience and encourage engagement with your app.
5. Drive stakeholder acceptance with a proven concept.
When you’re trying to convince important stakeholders, such as venture capitalists, angel investors or even crowdfunding audiences, to invest in your mobile app, it’s challenging to get them to buy-in to your concept without a visual, working prototype.
But with an app prototype, these crucial stakeholders get a clickable, interactive app they can use and test. It helps to justify funding since it reduces the risk of uncertainty and helps your audience visualize the potential profit your app can bring.
6. Fine-tune your prototype to improve your concept.
A prototype also gives you the opportunity to explore new ideas and further improve on your concept because it allows you to see problems with the app early in the development process. Creating a prototype gives you the chance to improve on your concept so that your development team can find potential weak spots and errors.
According to a study by MarketingSherpa and MECLABS Institute, 13 percent of users delete mobile apps due to bugs. It’s important to test your app with your target audience to identify errors before you finalize the product. During this stage, it’s important to document user interactions, errors incurred and each instance and version that you updated. This helps you to create a valuable and addictive app for your target audience. For example, you can create and reference a backlog of the different versions of your app and compare the different errors your users experienced as they navigated through the system.
You can also implement features that provide feedback from your audience on the app, such as a survey or poll. Use the direct feedback to further develop the app based on their needs. You can use this information to create a more enhanced experience for your users and improve your chances of having a more successful app at the launch of the final product.