Bill Gates should take a small-business approach to turning Microsoft around. (Photo credit: Wikipedia)
Why should Bill Gates, one of the most recognized global business leaders, accept advice from a small business owner? One of the advantages of operating a 100-employee organization is that we can view all aspects of our operation, remain agile, and move quickly. Large businesses can take advantage of our insights and experiences because, regardless of the size of the business, we all face similar struggles. They’re just on a different scale.
Small businesses have to work hard every day to survive. We discover what matters most really fast or we find ourselves out of business just as fast. Whether we like it or not, businesses must sell to survive—even giants like Microsoft Microsoft. In his book, The Leader Who Had No Title, Robin Sharma points out, “In the new world of business, the riskiest place you can be is trying to do the same things in the same way as you’ve always done them.”
What can Mr. Gates learn from small business that will help him fill the soon-to-be-vacant chair at the top of his organization? Filling the CEO slot at the Microsoft table might be easier than he thinks. Have you have noticed that the missing piece of a puzzle is generally right under your nose, which is why you can’t see it? Microsoft might consider offering the top job to a likable, energetic, no-nonsense salesperson within their organization who has the guts and ingenuity to rekindle the fire for the software giant.
I know it’s a long shot, but why not give a homegrown Microsoft employee from the sales ranks with a high-octane heart and spirit a shot at the top seat? Perhaps it’s time Microsoft considers moving someone up from one of their small farm teams to the major leagues before considering external candidates. The CEO’s primary job is to authentically communicate the vision and message of the company to the world. Salespeople do this all day long. Those who survive in sales learn quickly what resonates and what does not with customers.
One question that Mr. Gates, or anyone in business attempting to fill a top leadership seat within their organization, should ask is: Will this individual rekindle the spark for products and services that the company builds and get the people within the organization excited and energized? They don’t need to be famous or even brilliant. I believe they need to possess a genuine love for the people, products, and services and a willingness to share that love and belief with the world. They need to offer natural and authentic content so that when people hear it they ask for more. It’s as simple as that.
The real treasure for Microsoft (and all businesses, for that matter) is the people who work hard every day to grow or sustain the business. They might not be polished or carry professional portfolios or degrees from Ivy League schools but chances are if they have the right heart and drive they will stand strong with the organization during challenging times.
An excellent example of one of the best sales visionaries today who landed in the top seat of a major corporation is Brad Smith, CEO of Intuit. He has worked in numerous leadership positions, including senior vice president and general manager of Intuit’s Small Business Division, and before that he was the head of Intuit’s Consumer Tax Group in San Diego. Everyone we know inside and outside of his organization holds him in high regard. He’s likable and he’s not shy about promoting his organization. He sets his priorities and makes time for the people within his organization and small businesses like Fishbowl.
I have one rule within my organization that is beyond non-negotiable. All leaders must genuinely and unconditionally love/respect the people, products, and services within the organization. Ninety percent just doesn’t get the job done. To be brutally honest (and a lot of execs might not like hearing this), it doesn’t actually take a lot of smarts to fill the top seat. It takes a lot of heart, trust and willingness to go the distance for the organization even if it means now and again you make yourself vulnerable personally. The people within the organization do most of the heavy lifting when it comes to building the products and services. A great leader gives them credit and spends every waking hour of his or her day sharing this across the globe.
Microsoft has plenty of people who successfully oversee day-to-day operations of the billion-dollar publicly operated enterprise. They should consider hiring someone for the top job who gets over-the-top excited about what Microsoft builds and shares with the world. I believe the ideal candidate could be someone who is not from the upper ranks, which generally consists of a small group of people. Why not let the thousands of Microsoft employees weigh in on who will be their next chief? I would also strongly recommend that Mr. Gates have all their candidates sit down and see if they can pass the standard Microsoft certification exams before they get the top chair to ensure they fully understand the vast capabilities of the products.
The next CEO just might be sitting somewhere within the ranks—an individual with the right heart to lead the company into its finest hour. Microsoft might not be considered the coolest on the market today, but I believe they are most definitely built to last. This, I believe, is the core value proposition of Microsoft: They help people across the globe build and develop skills that can lead to meaningful careers.
These are just a few thoughts from someone who cares about the fate of the big guys and big corporations. They create a multitude of jobs and careers for people. In the end it doesn’t really matter how big or small your company is; we are all remembered for the legacy we leave behind. Good luck to everyone at Microsoft. Thanks for decades of great products and services.
Additional reporting for this article was provided by Mary Michelle Scott, Fishbowl President. David Williams’ book, The 7 Non-Negotiables of Winning, is available from Amazon.
How do you go about starting a small business? Just as looking for a job is a full time job, setting up shop is in and of itself a tedious and time-sucking enterprise for those not fluent in legalese.
Docstoc, a one-stop shop for entrepreneurs and small businesses including documents and online tutorials from business experts was acquired today by Intuit, a provider of payroll and tax tools to small businesses for an undisclosed sum.
Intuit, which also owns popular personal finance app, Mint, purchased Docstoc as part of a strategy to create an entire ecosystem for small businesses and their needs.
“We want to be the operating system of choice for SMBs,” said Alex Chriss, Vice President and General Manager within Intuit’s small business division, adding that the company which had revenue this year of $4.2 billion, is “always looking” for more acquisitions that would help “solve small business pain.”
Jason Nazar spent the past 7 years building Santa Monica-based Docstoc from a document sharing platform to a site which now attracts more than 16 million unique monthly visitors and has over 40 million registered members worldwide. Previously a Partner at a venture consulting firm in L.A. Nazar is also the creator and host of Startups Uncensored, the longest running and most widely attended technology gathering in Southern California, which regularly brings together thousands of entrepreneurs, techies and investors.
“Our vision is to be the ultimate destination and resource site for small businesses. We’re extremely excited to continue to pursue this shared vision with Intuit, a world leader of solutions for small businesses,” said Nazar. “Together we will have an unprecedented opportunity to help entrepreneurs make their businesses better.”
Docstoc raised just $4 million in funding from VC Rustic Canyon as well as notable angel investors including co-founders in MySpace, LowerMyBills, Mp3.com, PriceGrabber and Baid.
“They had such an amazing array of content,” said Chriss of Docstoc, which spent this year releasing new features including iPad apps, articles, tutorials and videos alongside a document sharing platform and growing library of both free and purchasable legal, business, financial, technical, and educational documents. “There are 28 million small businesses in the U.S and they have a ton of questions,” said Chriss.
Docstoc’s vast user base will no doubt help push entrepreneurs towards Intuit’s tax and accounting tools aimed at small businesses.
As part of Intuit, Docstoc’s team of 50 employees will stay at their Santa Monica HQ and continue to be led by Nazar. As an Intuit company, Docstoc will have the resources to develop even more products and services aimed at entrepreneurs and small businesses, Nazar said.
Docstoc bought BestVendor in August this year, a Yelp-like directory to provide small businesses with recommendations for choosing different software and cloud services.
Championed in the UK by Chuka Umunna, the shadow secretary of state for business, innovation and skills, Small Business Saturday is a non-political campaign that will highlight small business success and encourage consumers to ‘shop local’ and support small businesses in their communities.
Here, shadow minister for SMEs Toby Perkins tells more about the scheme.
I think we’re all aware that the world today is full of problems. We’ve been hearing them today and yesterday and every day for decades. Serious problems, big problems, pressing problems. Poor nutrition, access to water, climate change, deforestation, lack of skills, insecurity, not enough food, not enough healthcare, pollution. There’s problem after problem, and I think what really separates this time from any time I can remember in my brief time on Earth is the awareness of these problems. We’re all very aware.
Why are we having so much trouble dealing with these problems? That’s the question I’ve been struggling with, coming from my very different perspective. I’m not a social problem guy. I’m a guy that works with business, helps business make money. God forbid. So why are we having so many problems with these social problems, and really is there any role for business, and if so, what is that role? I think that in order to address that question, we have to step back and think about how we’ve understood and pondered both the problems and the solutions to these great social challenges that we face.
Now, I think many have seen business as the problem, or at least one of the problems, in many of the social challenges we face. You know, think of the fast food industry, the drug industry, the banking industry. You know, this is a low point in the respect for business. Business is not seen as the solution. It’s seen as the problem now, for most people. And rightly so, in many cases. There’s a lot of bad actors out there that have done the wrong thing, that actually have made the problem worse. So this perspective is perhaps justified.
How have we tended to see the solutions to these social problems, these many issues that we face in society? Well, we’ve tended to see the solutions in terms of NGOs, in terms of government, in terms of philanthropy. Indeed, the kind of unique organizational entity of this age is this tremendous rise of NGOs and social organizations. This is a unique, new organizational form that we’ve seen grown up. Enormous innovation, enormous energy, enormous talent now has been mobilized through this structure to try to deal with all of these challenges. And many of us here are deeply involved in that.
I’m a business school professor, but I’ve actually founded, I think, now, four nonprofits. Whenever I got interested and became aware of a societal problem, that was what I did, form a nonprofit. That was the way we’ve thought about how to deal with these issues. Even a business school professor has thought about it that way.
But I think at this moment, we’ve been at this for quite a while. We’ve been aware of these problems for decades. We have decades of experience with our NGOs and with our government entities, and there’s an awkward reality. The awkward reality is we’re not making fast enough progress. We’re not winning. These problems still seem very daunting and very intractable, and any solutions we’re achieving are small solutions. We’re making incremental progress.
What’s the fundamental problem we have in dealing with these social problems? If we cut all the complexity away, we have the problem of scale. We can’t scale. We can make progress. We can show benefits. We can show results. We can make things better. We’re helping. We’re doing better. We’re doing good. We can’t scale. We can’t make a large-scale impact on these problems. Why is that? Because we don’t have the resources. And that’s really clear now. And that’s clearer now than it’s been for decades. There’s simply not enough money to deal with any of these problems at scale using the current model. There’s not enough tax revenue, there’s not enough philanthropic donations, to deal with these problems the way we’re dealing with them now. We’ve got to confront that reality. And the scarcity of resources for dealing with these problems is only growing, certainly in the advanced world today, with all the fiscal problems we face.
So if it’s fundamentally a resource problem, where are the resources in society? How are those resources really created, the resources we’re going to need to deal with all these societal challenges? Well there, I think the answer is very clear: They’re in business. All wealth is actually created by business. Business creates wealth when it meets needs at a profit. That’s how all wealth is created. It’s meeting needs at a profit that leads to taxes and that leads to incomes and that leads to charitable donations. That’s where all the resources come from. Only business can actually create resources. Other institutions can utilize them to do important work, but only business can create them. And business creates them when it’s able to meet a need at a profit. The resources are overwhelmingly generated by business. The question then is, how do we tap into this? How do we tap into this? Business generates those resources when it makes a profit. That profit is that small difference between the price and the cost it takes to produce whatever solution business has created to whatever problem they’re trying to solve. But that profit is the magic. Why? Because that profit allows whatever solution we’ve created to be infinitely scalable. Because if we can make a profit, we can do it for 10, 100, a million, 100 million, a billion. The solution becomes self-sustaining. That’s what business does when it makes a profit.
Now what does this all have to do with social problems? Well, one line of thinking is, let’s take this profit and redeploy it into social problems. Business should give more. Business should be more responsible. And that’s been the path that we’ve been on in business. But again, this path that we’ve been on is not getting us where we need to go.
Now, I started out as a strategy professor, and I’m still a strategy professor. I’m proud of that. But I’ve also, over the years, worked more and more on social issues. I’ve worked on healthcare, the environment, economic development, reducing poverty, and as I worked more and more in the social field, I started seeing something that had a profound impact on me and my whole life, in a way.
The conventional wisdom in economics and the view in business has historically been that actually, there’s a tradeoff between social performance and economic performance. The conventional wisdom has been that business actually makes a profit by causing a social problem. The classic example is pollution. If business pollutes, it makes more money than if it tried to reduce that pollution. Reducing pollution is expensive, therefore businesses don’t want to do it. It’s profitable to have an unsafe working environment. It’s too expensive to have a safe working environment, therefore business makes more money if they don’t have a safe working environment. That’s been the conventional wisdom. A lot of companies have fallen into that conventional wisdom. They resisted environmental improvement. They resisted workplace improvement. That thinking has led to, I think, much of the behavior that we have come to criticize in business, that I come to criticize in business.
But the more deeply I got into all these social issues, one after another, and actually, the more I tried to address them myself, personally, in a few cases, through nonprofits that I was involved with, the more I found actually that the reality is the opposite. Business does not profit from causing social problems, actually not in any fundamental sense. That’s a very simplistic view. The deeper we get into these issues, the more we start to understand that actually business profits from solving from social problems. That’s where the real profit comes. Let’s take pollution. We’ve learned today that actually reducing pollution and emissions is generating profit. It saves money. It makes the business more productive and efficient. It doesn’t waste resources. Having a safer working environment actually, and avoiding accidents, it makes the business more profitable, because it’s a sign of good processes. Accidents are expensive and costly. Issue by issue by issue, we start to learn that actually there’s no trade-off between social progress and economic efficiency in any fundamental sense. Another issue is health. I mean, what we’ve found is actually health of employees is something that business should treasure, because that health allows those employees to be more productive and come to work and not be absent. The deeper work, the new work, the new thinking on the interface between business and social problems is actually showing that there’s a fundamental, deep synergy, particularly if you’re not thinking in the very short run. In the very short run, you can sometimes fool yourself into thinking that there’s fundamentally opposing goals, but in the long run, ultimately, we’re learning in field after field that this is simply not true.
So how could we tap into the power of business to address the fundamental problems that we face? Imagine if we could do that, because if we could do it, we could scale. We could tap into this enormous resource pool and this organizational capacity.
And guess what? That’s happening now, finally, partly because of people like you who have raised these issues now for year after year and decade after decade. We see organizations like Dow Chemical leading the revolution away from trans fat and saturated fat with innovative new products. This is an example of Jain Irrigation. This is a company that’s brought drip irrigation technology to thousands and millions of farmers, reducing substantially the use of water. We see companies like the Brazilian forestry company Fibria that’s figured out how to avoid tearing down old growth forest and using eucalyptus and getting much more yield per hectare of pulp and making much more paper than you could make by cutting down those old trees. You see companies like Cisco that are training so far four million people in I.T. skills to actually, yes, be responsible, but help expand the opportunity to disseminate I.T. technology and grow the whole business. There’s a fundamental opportunity for business today to impact and address these social problems, and this opportunity is the largest business opportunity we see in business.
And the question is, how can we get business thinking to adapt this issue of shared value? This is what I call shared value: addressing a social issue with a business model. That’s shared value. Shared value is capitalism, but it’s a higher kind of capitalism. It’s capitalism as it was ultimately meant to be, meeting important needs, not incrementally competing for trivial differences in product attributes and market share. Shared value is when we can create social value and economic value simultaneously. It’s finding those opportunities that will unleash the greatest possibility we have to actually address these social problems because we can scale. We can address shared value at multiple levels. It’s real. It’s happening.
But in order to get this solution working, we have to now change how business sees itself, and this is thankfully underway. Businesses got trapped into the conventional wisdom that they shouldn’t worry about social problems, that this was sort of something on the side, that somebody else was doing it. We’re now seeing companies embrace this idea. But we also have to recognize business is not going to do this as effectively as if we have NGOs and government working in partnership with business. The new NGOs that are really moving the needle are the ones that have found these partnerships, that have found these ways to collaborate. The governments that are making the most progress are the governments that have found ways to enable shared value in business rather than see government as the only player that has to call the shots. And government has many ways in which it could impact the willingness and the ability of companies to compete in this way.
I think if we can get business seeing itself differently, and if we can get others seeing business differently, we can change the world. I know it. I’m seeing it. I’m feeling it. Young people, I think, my Harvard Business School students, are getting it. If we can break down this sort of divide, this unease, this tension, this sense that we’re not fundamentally collaborating here in driving these social problems, we can break this down, and we finally, I think, can have solutions.
The bitcoin logo (Photo credit: Wikipedia)
Buttressed by an Internet craze, the price of bitcoin has skyrocketed this past year from $17 to over $1,200. Pundits expect significant price volatility in 2014 as well.
While the Federal Reserve gave tacit approval, stating “virtual currencies like bitcoin have legitimate uses and should not be banned,” the IRS has not yet issued tax guidance. Despite the lack of guidance, income from bitcoin transactions must be reported.
What’s the bitcoin tax treatment for traders?
There are two possibilities how bitcoin should be treated for tax purposes: either it is an (1) intangible asset, or (2) a foreign currency. The problem with saying that it’s a currency is that it is not issued by a government, and traditionally currencies are legal tender issued by governments. In California Bankers Assn v. Shultz, the Supreme Court stated (in a non-tax context): “‘Currency’ is defined in the Secretary’s regulations as the “coin and currency of the United States or of any other country, which circulate in and are customarily used and accepted as money in the country in which issued.”
The IRS has not said its opinion, but both Canadian and Swedish tax authorities are treating bitcoins as an asset. Also, the German Finance Ministry says bitcoin is not classified as e-money or a foreign currency, but is rather a financial instrument under German banking rules. It is our sense that unless Congress enacts legislation to treat bitcoins as a foreign currency, the IRS will treat bitcoins as an asset.
If you buy bitcoin for purposes of appreciation and then sell it, then if (1) bitcoin is an asset, you will have capital gain and loss, and (2) if bitcoin is a foreign currency, then under Section 988 you will have ordinary income and loss.
Is bitcoin a commodity?
There is no definition in the Internal Revenue Code of “commodity.” Black’s Law Dictionary 342 (4th ed. 1968) defines commodity: a movable article of value that can be bought or sold. A bitcoin is not movable property, so arguably it’s not a commodity. But at the Senate hearing, academics and financial industry players warned that bitcoin could be regulated as a commodity if market volatility continues. Such financial regulation may or may not impact the tax treatment.
Most bitcoin investors and traders will prefer capital gains tax treatment
After the astronomical rise in bitcoin this past year, most investors and traders may prefer capital gains and loss tax treatment. Consider this example: An American investor bought bitcoin at $17 just over 12 months ago and he sold it recently for $1,200. Is he entitled to significantly lower long-term capital gains tax rates of up to 20% in the top bracket and up to 15% in the second top bracket? That’s 20% lower than the top ordinary rates of 39.6% and 35%.
In this example of incredible appreciation, investors and traders will prefer that the IRS views their bitcoin transactions as trading in a commodity or other capital asset held for price appreciation. As long as the investor did not acquire the bitcoin as part of his business or for personal reasons this tax treatment seems safe to deploy on 2013 tax returns — until the IRS says otherwise.
Can bitcoin traders use ordinary loss tax treatment in Section 475?
What goes up fast and irrationally may also go down fast and irrationally. New investors may wind up with big trading losses and they may wish for ordinary loss treatment instead of $3,000 capital loss limitations and large capital loss carryovers.
As the bitcoin trading market expands, some bitcoin traders may be able to achieve trader tax status – business treatment – on trading that asset class. It is not clear whether they can make a Section 475 MTM election for trading bitcoin to have business ordinary gain or loss treatment. Section 475 allows “Traders in Securities and or Commodities” to make the election. Although the term “commodities” above really refers to trading Section 1256 contracts or regulated futures contracts, Section 475 does not seem to include bitcoin. However, if bitcoin becomes regulated as a commodity, it may qualify for Section 475 treatment.
Mark Feldman contributed to this article.
If you’re looking for funding for a new or existing business, you need a business plan. Your business plan gives lenders and investors the information they need to determine whether or not they should consider your company.
Your business plan outline is the first step in organizing your thoughts. And, when you follow the outline below, you ensure your business plan is in the format that prompts investors and lenders to take action.
In the business plan outline below, you will see the ten (10) sections common to business plans, and the twenty-three (23) sub-sections you must complete.
Section I – Executive Summary
1 – Executive Summary
The Executive Summary is the most important part of your business plan. Because if it doesn’t interest readers, they’ll never even get to the rest of your plan.
Start your Executive Summary with a brief and concise explanation of what your company does. Next, explain why your company is uniquely qualified to succeed. For example, does your management team have unique competencies? Do you have any patents? Are you the first mover in your market? Does a huge, unmet market opportunity exist? Etc.
Finally, include a synopsis of your financial projections in your Executive Summary. Specifically, include your expected revenues, expenses and profits for each of the next five years, how much funding you are seeking, and the key uses of these funds.
Section II – Company Overview
2 – Company Overview
The Company Overview section provides a brief history of your company.
Here you will answer questions such as when and how your organization was formed, what type of legal entity you are, and accomplishments to date.
Importantly, your past accomplishments are perhaps the best indicator of potential future success, so be sure to identify and include all key milestones your company has achieved to date.
Section III – Industry Analysis
Your Industry Analysis section has two sub-sections as follows:
3 – Market Overview