Strategy Corner: How fast food chains pick their next location?

Did you ever wonder how fast food chains choose their next locations? A recent article in Fast Company details just how they do this, and it is very interesting.

As an Entrepreneur.com article states, one way that fast food chains may earn more money in the future is by not purchasing the real estate of the locations where they will operate. For example, “A hypothetical McDonald's restaurant with $1.5 million in annual sales generates about $169,000 in pretax franchise profit for the company, which, under the old system, makes money by collecting royalties and rent. By contrast, under the new system, McDonald's-leasing the land and having the franchisee own the building-gives up some rental income, and its pretax profit falls to $121,000. The upside is that the company doesn't incur about $450,000 in capital expenditures, enabling it to boost its return on investment to 24 percent, vs. about 18 percent under the old system, according to Glass. By forgoing ownership of new franchised restaurants, McDonald's freed up about $285 million in capital last year and $230 million in 1999.”

Fast Company firmly states that American real estate practices changed after the recession of 2008, in that “big food corporations spend much of their capital placing new locations where they think there will be growth, but suddenly those choices seemed much more risky. The land that sits under fast food outlets like Taco Bell and Wendy’s is typically owned by the parent companies. As the economic crisis hit the fast food industry, more and more fast food companies began adopting data-driven approaches to opening new locations, says Simon Thompson, commercial director at geoanalytics firm Esri.”

Such factors that chains like Starbucks use when determining where to open new retail locations include “retail clusters, public transportation stops, and neighborhood demographics.”

As geographic information systems (GIS) technology improves, it will be fascinating to keep watch over this industry to see if the percentage of profitable chain locations improves based on location decisions that were made with big data in mind. Extensive, focused market sizing and segmenting can make a big difference in selecting the locations of retail stores.

Making Use Of Big Data To Save Lives

As more Americans use wearable devices to monitor their personal data, companies that manufacture these “wearables” are in turn provided with more information about customers’ daily lives, sometimes down to the minute or second.

Case in point: After the recent 6.0 quake (on the Richter Scale) tore through Napa Valley, California, Jawbone, the maker of popular wrist-worn monitors that detail information such as how far you have walked during the day to how many consecutive hours you have slept, has revealed the sleeping habits of Californians affected by the earthquake. More specifically, the firm revealed the percentage of Jawbone Up wearers who were awoken by the quake.

Specifically, as TechCrunch reports, “Jawbone found that, unsurprisingly, those living closest to the epicenter of the quake were the ones who woke up most reliably, at around 3:20 AM when it originally struck. 93 percent of UP wearers in Napa, Sonoma, Vallejo and Fairfield woke up almost instantly, while just over half of UP wearers in San Francisco and Oakland were awoken. The effect was negligible for those further out – by the time you get to surrounding Modesto and Santa Cruz, where the effects were still detectable but very minor, there are almost no UP wearers who arose around the time of the event.”

Furthermore, “The people closest to the epicenter were also more likely to stay up longer after waking, per Jawbone – of those 15 miles or less from the epicenter, 45 percent stayed up the remainder of the night.”

As wearables grow in popularity, there will certainly be further debates as to what personal information is made available to companies that manufacture these devices. As ZDNet reports, “5.2 million wearables were sold in North America in 2013, and more than 40 percent of all wearable devices currently in use are there.”  As the market becomes more fragmented, questions will certainly be raised as to what information becomes available for companies, and how, in the event of an emergency wearables have the potential to save lives. Of course, some information will likely have to be shared with police and fire departments, as well as other emergency services.

For example, as Fast Company reports, “Peter Schmidt, a researcher at the National Parkinson Foundation, and Allison Willis, a medical doctor at the University of Pennsylvania, reported that better access to care from neurologists could prevent the death of almost 7,000 Parkinson’s patients annually in the U.S.”

Additionally, a medical wearable device manufacturers  of a device called “Biostamp can help provide that care. With little effort, patients using the device could share data with doctors and receive immediate feedback.”

If wearables will, in the near future, have the ability to save the lives of individuals in emergency situations, the debate over what access companies have to the data of their products will likely tip in their favor.

7 Worthwhile Startup Lessons You Might Not Want To Hear (Fast Company)

7 Worthwhile Startup Lessons You Might Not Want To Hear

"The one way to deliver on this over-used but necessary phrase is to take a notebook to every meeting. Even if you were never a note-taker in school (I surely wasn’t), if you take a notebook to meetings, you will remember details that other people will surely forget--and when you do this, you will appear smarter and more powerful. This will help you win new business and retain current clients."

Source: Fast Company

5 Ways the Workforce Will Change in 5 Years (Mashable)

5 Ways the Workforce Will Change in 5 Years

"The freelancer is on the rise, and if you ask proponents of the "contingent" (freelance) economy, they expect that by 2020 some 40% of the workforce will soon be made up of contract-only employees. 'This is in part because millennials don't want to stay in one job forever, but also in part because companies prefer to try out employees before committing to them,' says Stephen Robert Morse, co-founder of SkillBridge, via email. 'These changes will affect the white-collar economy, just as they have already disrupted the blue-collar economy (e.g. Uber)."'

Source: Mashable

SkillBridge featured in Mashable: 5 Ways the Workforce Will Change in 5 Years

At SkillBridge, we know that the workforce is rapidly changing. Occasionally, we have the opportunity to tell others about our vision for the future of work. Recently, Stephen, our co-founder, had the opportunity to discuss the future of work with Mashable. An article that came out today titled "5 Ways the Workforce Will Change in 5 Years" says:

"The freelancer is on the rise, and if you ask proponents of the "contingent" (freelance) economy, they expect that by 2020 some 40% of the workforce will soon be made up of contract-only employees. 'This is in part because millennials don't want to stay in one job forever, but also in part because companies prefer to try out employees before committing to them,' says Stephen Robert Morse, co-founder of SkillBridge, via email. 'These changes will affect the white-collar economy, just as they have already disrupted the blue-collar economy (e.g. Uber)."'

How do startup companies generate leads?

Insights, tips, and tricks from the pros.

Companies need to generate leads in order to create a functioning sales funnel. However, many startup companies struggle to find leads that enable them to continue them on a path toward successful revenue growth. It is important to remember that lead generation differs by industry.

At SkillBridge, our leads are the clients who need to purchase consulting services, but at other firms, leads might mean targeting people who need to book vacation homes, make restaurant reservations, or rent airplanes. Targeting, of course, is key. But how can companies target new customers more effectively? I spoke with several startups who have excelled at lead generation to determine their best insights into how to find effective leads.  

Multi-Faceted Strategies

Ryan Scott of Lean-Labs.com recommends this method for lead generation:

1. Create content that generates traffic.

2. Include clear Calls to Action (CTAs) that offer our visitors some valuable piece of content in exchange for their information.

3. Automate touch points to educate the leads on our services and to lead score them for service/need fit. If they aren’t a good fit to do business with us, we don’t try to sell them on us.

4. Once a lead has reached a certain score, we personally reach out to them and offer them free consultation - whether they use us or not.

5. We close leads and deliver more value than they pay for. We find this provides us with referral customers, turning our leads into our brand advocates over time."

Inbounds vs. Outbounds

Kyle Porter, the CEO of SalesLoft.com says, "For inbound clients, our blog, featured guest blog posts, sales leader interviews from outside our company, infographics, slide decks, social media, and hosting our own events work." This is different from his firm's outbound tactics that include using their technology to export leads from LinkedIn, as well as using software to contact people efficiently. He adds, "What works? Content that solves the customer's problems, plus cold emails sent in small batches over time with personalization. What doesn't work? Self-serving content and spam blasting lists of purchased contacts."

Zack Hanebrink who heads marketing at MassageBook.com, understands that there is far more to marketing than sitting around and waiting. He says, "The trick is to not just publish and wait; you have to aggressively promote your content. For example, the channels that work best for us are LinkedIn groups and putting a little budget behind promoting it on Facebook. The key is to share content with your target audience. With LI groups, you can see where they're hanging out (groups). Facebook Ads let you get really granular with targeting, ensuring you're promoting your content to the right audience." 

Go Mobile

Andrianes Pinantoan of GetPocketBook.com says, "We grew from 50k users to 100k users in the last 6 months and there's one way we consistently generated leads: mobile advertising. But the devil is in the details. We tested a dozen networks when we started out our campaigns and one of the key things we learned is to avoid popular networks like Google AdWords. The reason is because while they convert well, large networks also have a high cost per click. In the mobile world, advertising networks are fragmented and there are many other options that people simply don't consider. For example, one network generated $0.07 clicks for us."

Get Social

When the going gets tough, social media is an excellent way to build upon existing networks and create new ones. Patrick Antinozzi of Rapidweblaunch.com says, "I use Twitter's search feature. I can use saved searches to find fairly high quality potential clients for my web design company. For example, people who have recently opened a new business will likely want to build a website for it and, if they're talking about it on Twitter, I can easily find them and contact them."

Old Fashioned Word of Mouth and Networking

Shannon Callarman of Cubicle Ninjas says, "Cubicle Ninjas has been in business for over 5 years. Our marketing team dabbles in all sorts of lead generation strategies, but the one thing that works the best (and has worked since the beginning) is word-of-mouth. We take pride in keeping our clients happy project after project. When our current clients are satisfied, it leads to more happy clients from other organizations. Recommendations and referrals is our #1 source for lead generation, year after year."

Isaac Palka, a co-founder of Zenly, the first online marketplace for apartment rentals, where users can browse video tours of apartments and rent them online without a broker agrees, "Lead generation was a particularly challenging endeavor for my company, because building a marketplace requires generating leads on both the supply and the demand side simultaneously. We pursue all kinds of lead generation tactics, from paid banner ads, to traditional PR methods of pitching reporters and receiving press. Some of these methods are unreliable, and others are costly. We found that putting the investment into our customers truly yields the best results. The majority of our users who actually use our service to find an apartment (as opposed to just exploring for fun), tell us that they were referred by a friend. Even more interesting, is that these referrals are not coming through our Referral Program system that we have implemented, to give referrers and referees cash back. The referrals are coming through good old word of mouth because people are happy with our service and the quality of our customer support."

Nick Niehaus of Case Coolie uses a different approach. He relies on "cold calling and networking for most of our leads. I'm a member of BNI which is one of the largest networking groups in the world. We've sold a lot of our products and services through connections made there. We like it because of the structured weekly focus on passing referrals. As an introvert that structure helps a lot."

"The main approach to lead generation for my startup, UsersThink, is to drive traffic to my site through content marketing, entice readers to join the newsletter, and use that as a way to remind people about the service more frequently, " says John Turner, CEO of UsersThink.

Can Cold Calling Ever Work? 

"I have been a self-employed entrepreneur for 15 years. Both my business founded in 2000 and the second in Dec. 2012 have relied 99.99% on cold calling. For this to be successful there are 3 key factors: 1. You must clearly identify your addressable market. Does your product fit those you are calling? 2. Undertake at least initial research to identify the key person(s) in the prospective client's department. 3. Before launching into an elevator speech, verify that the person you called is not in the middle of a meeting or dashing out to catch a flight," says Elizabeth Avery, of the Washington D.C.-based SoloTrekker4U. 

As Holly Jo Anderson of Veritas Marketing says, "Send samples to key media to try your product. This encourages them to write about your product/service. Depending on the product or service, you can also sample with the end customer. But don't give away the farm." 

Conclusions

There is not one way to properly market a startup to generate inbound leads. It appears that using multiple sources of lead generation is optimal to only using one or two. Of course, there is a fine balance that must be created at startups where resources are limited, but given the many options out there, it is certainly worth it to try multiple strategies. 

Eight Things I Learned From Reading The McKinsey Way

15 years ago, in 1999, Ethan M. Rasiel published The McKinsey Way. This book quickly became a "must-read" for anyone applying to work in the management consulting industry as it gives inside tips into what it is like to work for "the firm." The McKinsey Way very much demystifies the process of management consulting at McKinsey, as Rasiel draws frequently on his own experiences and the experiences of his former McKinsey associates to provide practical knowledge. Here are eight things I learned from reading The McKinsey Way that have surely helped me succeed in business:

1. Never forget the 80/20 rule. For example, 80% of the sales come from 20% of the brokers. 80% of the orders come from 20% of the customers. 80% of the profits come from 20% of the products. You can frequently prove that such statistics as these exist by using data properly and controlling for variables. This is thought of as one of the "great truths of management consulting." 

2. McKinsey is successful because it maintains a vast library of all of its past work. This enables its staff to search and sift through data from previous "cases" while working on new "engagements." Retaining your data will help you prevent making mistakes and permit you to build on your experiences. 

3. Don't underestimate the importance of language. Being able to communicate thoughts and ideas clearly and persuasively is an important skillset that nearly everyone needs. Some individuals may be more difficult to convince than others, but having strong data to support your recommendations will certainly strengthen any case you make.

4. Whenever you are interviewing someone -- for a job, or as a consultant -- it is essential to end the interview by asking "Is there anything else you wanted to tell me?" Sometimes, interviewees feel too guarded, but then they may spew out all of the information that you are asking for once they recognize the interview is over. Many people will only open up once a more informal appearance sets in. 

5. If you are a thought leader in a specific field, share your thoughts. This will earn you the respect you need and deserve from your peers, and it might also bring you new business. These days, this is as simple as writing a blog post, but it can also mean getting published by larger established publications.

6. Before conducting an interview with anyone (including job candidates), create an interview guide. In this guide, you must outline not only what you are trying to achieve with the interview, but also determine three things that you must learn and know by the end of the interview.  

7. Serving on the boards of non-profit organizations can be good for business. Not only is it important to be passionate about helping others, but surrounding yourself with like-minded individuals will increase your status in your community.  

8. When you don't know an answer, it is okay to say "I don't know." You never want to exaggerate to a business contact, or find yourself stumbling and bumbling around for words. Simply say, "I don't know. I'll have to conduct more research to answer that question" and you will earn far more respect than providing a wrong answer or an answer you haven't thought out in great detail.

The McKinsey Way is filled with true stories of the lives of McKinsey consultants.  Regardless of what field you are in, this book will teach you many tips and tricks that can help you in your everyday life.

The Ice Bucket Challenge Is Changing Charities. Here Are The Implications.

Unless you have been living under a rock, by this point you are now aware of the Ice Bucket Challenge, the fundraising effort that benefits ALS.org. However, there have been many critics of this fundraising effort. Arielle Pardes, writing for Vice, says, "There are a lot of things wrong with the Ice Bucket Challenge, but most the annoying is that it's basically narcissism masked as altruism. By the time the summer heat cools off and ice water no longer feels refreshing, people will have completely forgotten about ALS. It’s trendy to pretend that we care, but eventually, those trends fade away." 

As The Guardian echoes, "Between 29 July and 12 August, the ALS Association has seen donations quadruple from year-ago levels, hitting $4m. Over the same period, they have received gifts from 70,000 new donors – people they will try to transform into regular givers."

Yet, The Guardian also claims "the spectacle of people gleefully spending the last months of summer publicly dumping buckets of ice water over their heads, posting videos of the same and chattering about ALS online seems to have triggered a Grinch-style backlash. Ice-bucket challengers are nothing but slacktivists, it is alleged, using the stunt as a way to feel good about themselves and giving themselves an excuse not to write a check to this cause – or any other – but still feel virtuous."

William MacAskill at Quartz agrees with this sentiment. He says:

"The ice bucket challenge is a symbol for much that’s wrong with contemporary charity: a celebration of good intentions without regard for good outcomes. It is iconic for what I call donor-focused philanthropy—making charitable giving about the giver, rather than about those who need help." 

This piece then presents another interesting argument -- that donor-focused philanthropy isn't for organizations, because of the mixed messages it sends.

In my previous article I mentioned one damaging aspect of donor-focused philanthropy: that it encourages a culture of great praise for small gifts. I believe this culture trades a small short-term gain in donations for a long-term harm by undermining a charitable attitude according to which there are serious problems in the world that desperately need our help, and that won’t be solved by a bucket of ice water. (For those who point to the now $8 million raised, I respond: should we regard the fact that the most widely-publicised fundraising campaign in years has raised 3¢ per citizen, or 0.00006% of GDP, as a cause for celebration or as an indictment of the current state of charitable giving?)

As all other charities will now ostensibly be encouraged to start their own versions of the Ice Bucket Challenge -- aka creating outrageous stunts that will go viral --  non-profit consultants will inevitably be brought in to determine how to best re-create the situation that is occurring right now, where one ice bucket has led to a waterfall. This is almost certain, as nearly every other charity out there will likely be facing a shortfall of donations because people will have donated their time and money to ALS. As you may already know, SkillBridge.co doesn't take any commission when we match consultants with non-profit work, so if you require non-profit consultants, we are happy to help.

Is the investment banking world about to become disintermediated?

If you read the New York Times this weekend, you may have stumbled across the article titled, "In Silicon Valley, Mergers Must Meet the Toothbrush Test." The article starts by asking:

"When deciding whether Google should spend millions or even billions of dollars in acquiring a new company, its chief executive, Larry Page, asks whether the acquisition passes the toothbrush test: Is it something you will use once or twice a day, and does it make your life better?"

The financial technology (fintech) world is awash in capital, that this report by Accenture points out.

As Jacob Mullins notes in TechCrunch, "In the past, buying a company required people with subject-matter expertise to help identify the right M&A target and all the related data and information you needed to make the decision. Today, intelligent matching algorithms and proprietary data sets that span the globe enable buyers to identify the right target within minutes and connect within a matter of hours. The world of investment banking is a-changing."

Unsurprisingly, traditional investment banking hubs such as London and New York City have benefited the most from fin-tech investments. For example, as the Accenture report notes, fin-tech investments in London have more than tripled since 2011 and now account for more than half of all European venture investments. The report notes that "London is already experiencing an 
entrepreneurial renaissance in its tech sector, and has the highest density of startups in the world by some measures. With nearly  135,000 financial-services technology  workers in the UK and four of the world’s ten biggest banks with global or European headquarters situated in London, the capital city offers great foundations for a thriving fintech cluster."

New York City has its own fintech innovation lab that serves the purpose of linking startups with big banks. The lab recently had its 4th demo day, where startups pitched their products to investors. This year's six startups were: 

• Revolution Credit is building a platform that uses financial education games to judge borrower’s creditworthiness and help improve the decision-making process around lending
• Standard Treasury makes white-labeled and co-branded developer platforms for banks; the company says it helps decrease service costs and churn while increasing transaction volumes
• Pymetrics uses neuroscience games and big data to match candidates to jobs
• Kasisto is a spinoff from the company that created Siri; it’ working on a virtual personal assistant for banking mobile apps
• Enigma pulls together public data on companies, people and locations, indexes the information and provides it to financial institutions to support underwriting and trading processes
• LRMRKTS helps banks report, reconcile and reduce risk when it comes to derivatives

And of course, though London and New York are leaders in the fintech space, Silicon Valley isn't far behind. As the Accenture report notes:

Even though it is the European leader, London’s share of the global fintech pie is still relatively small. In 2013, one-third of all global fintech financing (32 percent) and 20 percent of all deals took place in Silicon Valley, while the whole of Europe accounted  for 13 percent of fintech financing and 15 percent of global deals.

While the future looks bright for fintech, where the revolution will be centered, if anywhere, still remains a mystery.

Put your brakes on: The robotic future isn't coming just yet.

Yes, the future is already here. That means robots. And not just a one-robot-per-family model like they had in The Jetsons. But swarms of robots. Really. Swarms. At Harvard, they just announced the creation of a swarm of 1,000 robots. And, crazily, they cost only $14 each. But don't worry about robots stealing your jobs just yet. As Jess Zimmerman writes in The Guardian:

Thanks to a big new report from the Pew Research Internet Project, we can now say definitively that, in the next 11 years, robots will take all our jobs. Or that robots will create tons of new jobs, or that nothing will change, or what even is a “job” anyway?

The experts Pew consulted – 1,896 research scientists, business leaders, academics, developers and other technology mavens – were split almost precisely down the middle on the question of whether robots would destroy more jobs than they might create by 2025. Half of these people – “widely quoted as technology builders and analysts and those who have made insightful predictions” – envisioned a class-striated techno-dystopia in which unskilled and even skilled workers will have been supplanted by metal analogues and left on the street to starve. The other half trusted that human ingenuity would conjure new jobs, and that we might even wind up with more leisure time and greater job satisfaction while robots do all the menial tasks. Maybe, they said, we’ll have developed an entirely different definition of what it means to work, or maybe all jobs will be enhanced, but not supplanted, by artificial intelligence – the Pew survey lumped AI and robots together – because consumers still want the human touch.

As The Boston Globe's BetaBoston writes:

As for the employees whose duties have been automated, they are being put to work elsewhere in the operation, according to Eckert. Manufacturers, you may have heard, are facing a massive talent shortage, due to retirements and a shortfall of younger workers entering the industry. In Massachusetts alone, it’s estimated that 100,000 manufacturing jobs will open up in the coming decade (and many will be tough to fill).

While robots may certainly help create stronger product lines by automating key tasks, but humans will still be critical to make sure processes go smoothly. 

Despite these conclusions, Marcus Wholsen writes a column in Wired titled, "When Robots Take All the Work, What’ll Be Left for Us to Do?" He writes: 

Traditionally, increased productivity correlates with economic growth and job growth, since human labor has historically driven production. A robot workforce, however, can drive productivity and growth on its own, eliminating jobs in the process. That might mean the whole paradigm of exchanging labor for pay starts to break down. “If we persist in the view that the dividends from robots’ increased productivity should accrue to robot owners, we’ll definitely come to a future where there aren’t enough owners of robots to buy all the things that robots make,” Cory Doctorow wrote in a recent Boing Boing post.

Doctorow suggests the possibility that robot-driven abundance could undermine the need for markets as we know them. “Property rights may be a way of allocating resources when there aren’t enough of them to go around, but when automation replaces labor altogether and there’s lots of everything, do we still need it?” Assuming a post-scarcity system of distribution evolves to peacefully and fairly share the fruits of robot-driven post-scarcity production, jobs as we know them might not just become unnecessary—they might stop making sense altogether.

Sure, the future is scary. Think about every sci-fi movie ever created: From Transformers to Terminator to the Bourne Identity to AI. Fortunately, with the best and brightest humans in control of our robotic future, our hope is that all remains Kosher for quite some time.

 

Is entrepreneurship in America really dying or is it just a lot of hype?

Lately, there have been many articles about the death of American entrepreneurship. The Atlantic led this charge, writing:

What's melting, exactly? Not the kids' apps, but the mom-and-pop stores. Derek's Coffee and Thompson's Corner Store would be considered start-ups. But a new Starbucks or Whole Foods is considered part of an existing franchise. So as chains have expanded by more than 50 percent since 1983—Walmart gobbles up smaller competition with a particularly greedy appetite—start-ups have perished, as Jordan Weissmann has explained. The demise of small new companies isn't limited to retail. Construction and manufacturing start-ups have collapsed by more than 60 percent in the last four decades. Here's the industry-by-industry die-off from Brookings data ("entry rate" is an industry's share of firms that one-year-old or younger):

However, going against this data are other reports that show that American entrepreneurship is alive and healthy -- as we see every day at the co-working space where SkillBridge is based. The University of Nebraska published "the State Entrepreneurship Index, a measure of states' muscle when it comes to growing new enterprises. The latest index is based upon 2013 data from the U.S. Bureau of Labor Statistics, the U.S. Census, the U.S. Patent and Trademark Office and the Bureau of Economic Analysis in the U.S. Department of Commerce. Click to see state-by-state rankings."

The report states:

The index is based upon five key components: a state's net growth in business establishments, per capita growth in business establishments, business formation rate, number of patents per thousand residents and average income for non-farm proprietors. The combination is designed to reflect key elements of an entrepreneurial climate: business startups and failures compared to population, innovation and income.

The rest of the 2013 top 10 are California, New York, Kentucky, New Hampshire, Connecticut, Texas, Utah, Oregon and Colorado.

Michigan was 50th. It is one of a swath of industrial Midwest states with comparatively low scores on the entrepreneurial index.

Michigan has lost more than 106,000 people since 2008, but has lost businesses at a faster rate. However, in 2013, its population grew slightly.

"Michigan is turning things around and should eventually do better on the index," said Thompson, director of Bureau of Business Research.

North Carolina was No. 49, preceded immediately by New Mexico, Indiana, Alabama, Arizona, Maine, Virginia, Ohio and Hawaii.

New York and New Hampshire both have been among the top 10 each of the past four years; Texas has been on it three times; Connecticut has appeared twice in the past four years. New York remains strong as a major population and finance center, while New Hampshire benefits from being a low-tax state in a high income region."

Statistics web site FiveThirtyEight.com adamantly sees American entrepreneurship declining. As Ben Casselman, the site's chief economics writer says:

There is other evidence that America’s aging population can’t explain its aging businesses. Self-employment rates, for example, have declined for all age groups (other than teenagers) over the past 20 years. And as Hathaway and Litan showed in an earlier paper, the decline in entrepreneurship is remarkably constant across regions and industries, hitting youth-heavy tech hubs and graying industrial cities alike. Demographics may be contributing to the problem, but they aren’t the primary cause.

This may be explained by a demographic shift that occurred between the Baby Boom and the rise of the Millennial Generation. Vox's Matt Yglesias attempts to explain the trend, "One possibility is that the link to population aging is quite literal. A study by Vivek Wadhwa, Raj Aggarwal, Krisztina Holly, and Alex Salkever that looked specifically at "high-growth" industries found that the typical successful founder is 40. Not someone who's at the tail-end of his career, but not someone who's fresh out of school either. That's in part because 'professional networks were important to the success of their current business for 73 percent of the entrepreneur,' and it takes time to achieve that success. Mark Zuckerberg founded a great company when he was in college, but that kind of super-young founder is the exception not the rule — most people need some practical experience and contacts to succeed."

As with many other things, now we must simply wait and see.

You won't be able to hire PriceWaterhouseCoopers consultants for the next two years.

The big news today in the consulting world is that PriceWaterhouseCoopers (PWC), was hit with a $25 million fine and a 2-year ban from partaking in consulting industry activities in New York City. The AP says the firm "will face a two-year suspension from consulting for new bank clients under an agreement with New York regulators following an investigation that showed the company improperly altered a report about Bank of Tokyo Mitsubishi laundering money."

Of course, while this is a direct blow to PWC, it is also a blow to the credibility of the consulting industry as a whole. Large clients frequently rely on consulting firms for critical work, and it is both surprising and disappointing when a large consulting firm makes these sorts of errors.

Yet, that is not all that PWC did to do damage to the industry, as PWC did damage to one of its own partners who, valiantly, tried to stop the shenanigans. The AP report continues, "The regulators also noted that PriceWaterhouseCoopers withheld more than 20 percent of one director's compensation after it came to light the director repeatedly had suggested the company stop conducting further analysis that might show bank wrongdoing. The director, presently a partner, was quoted in the settlement agreement signed Monday but was not named."

Furthermore, "The deal requires PriceWaterhouseCoopers within a year to establish procedures that include requiring the consultant and its bank clients to submit work plans to New York regulators and that the banks consent to independent contact between the consultant and regulators."

My Newest Post In Staffing Stream: The Human Resources Technology Revolution Is Upon Us

Today, Staffing Stream published my newest piece, titled "The Human Resources Technology Revolution Is Upon Us." Read it in full here, or check out this excerpt:

This human resources technology revolution is particularly fascinating as it intersects with Millennial culture: The idea that it is good, and cool, to work in five jobs by the time you hit thirty years old is very new. How do you attract and retain the best employees, knowing that they may only stick around for nine months or a year?

Unbundling and Rebundling

With the success of Airbnb and Uber, the idea that anything can be made “on demand” is quickly becoming a reality. At SkillBridge, we focus every day on how we can bring consultants on demand to the workplace. We have decided to unbundle the job hunt for one specific niche: top-tier, short-term consulting. This is one way that the work market is shifting, especially because 40 percent of the workforce is expected to be made up of contingent workers by 2020.

That said, other sites out there, such as LooseMonkies, are attempting to rebundle the job search process by giving candidates more data about where they stand compared to the other people applying for their jobs.

Why Silicon Valley Wants Wall Street’s Best (CNBC)

Why Silicon Valley Wants Wall Street’s Best

Stephen Robert Morse, co-founder of SkillBridge, a company that matches bankers and consultants with firms for short-term projects, agreed. “The idea of people who are very talented at Excel and can crunch data, is a skill that start-ups need,” he said. “They want people to use data to increase their customer base and sales and make operations more efficient.

Source: CNBC

You are not "wasting" your 20s at Google or McKinsey... Raj De Datta Is Wrong. Here's why:

This morning, when I logged into LinkedIn, I saw an article titled "Don't Waste Your 20s at Google or McKinsey." And I disagree with it completely.

As the article's author Raj De Datta writes, "Going to work at a start-up or growth company in your 20s will put you on the fast-lane learning curve. It will be the best investment you can make because you’ll find yourself."  Your 20s, are, of course, a period of 10 years. I am now 28 years old, and have spent approximately half of my time thus far working for others, and the other half working for myself. I may be happier overall when pursuing entrepreneurial activities, but I am very thankful for the many learning experiences I had at big companies.

Yes, the article's author, Raj De Datta has worked at a couple of larger firms, Cisco in the tech space, and the investment bank Lazard. Perhaps he chose not to learn while working there, or didn't want to advance up the corporate ladders of those institutions, but I am more and more dismayed when I see wantrapreneurs striking out, wasting their parents hard-earned money, or having 0 idea how to run a business because they have never worked at a successful one.

I am quite thankful for the time I spent at William Morris Endeavor (only Endeavor when I worked there), Mother Jones magazine, Seamless.com (now merged with GrubHub, and Quirky.com -- all far larger companies (MJ is a non-profit, technically, but still...) than SkillBridge is today. At larger companies you learn to deal with people. Some of these people may not be the best people. Or perhaps they just appear to be angry. And it is your job to learn to work with them, come hell or high water. These experiences have certainly benefited me as an entrepreneur: At the very least, my customer service skills are now superb because I have had to deal with so many colleagues and customers over the years.

As for the argument that Google or McKinsey aren't ideal places to work, that is complete and utter nonsense. Many of my most intelligent friends from the University of Pennsylvania and other fine institutions started their careers at Google, McKinsey, or other large tech or consulting firms. Some of them are still there -- and those who stuck around seem quite happy. For example, my good friend Josh Steinberg works for Google and now lives in Tokyo, his dream city, and has traveled all around the world, on Google's dime. My other good friend Anastasia Leng founded Hatch.co after working at Google for 5 years. Neither of them would change a thing about their 20s. They were able to pay off their student loans, travel, and live excellent lives.

It is no secret that at SkillBridge, we recruit individuals to become our consultants who have at least three years experience working at large corporations. This is not an accident: We know that Google, McKinsey, and other top-tier firms have vetted their candidates well. We know that it is challenging to work at these places and that Google and McKinsey employees are solving real-world problems every single day. Therefore, we know that Google, McKinsey, Bain, and BCG produce the cream of the crop. Why wouldn't we want these top-notch people to work for us?

Plus, not everyone is an entrepreneur. Not everyone wants the stress of starting a new company -- because, believe me, there is tons of stress involved. And not everyone can afford to take the risk to work without payment for a long time, as many entrepreneurs do. Many people would rather spend time with their kids or spouse rather than working -- or slaving -- at a startup. Yes, most startups fail, despite what some Millennial publications may sucker you in to believing. And there is nothing wrong with wanting the stability, benefits, and perks that come with working at a large corporation. If you have to pay back student loans, few more sensible options exist.

There are dozens of valid reasons why someone would want to work at Google, McKinsey, or another top firm. Heck, many people treat a stint at McKinsey, Bain, or BCG as all-expenses-paid graduate school in which you are being paid to work. The training that you will get at these firms is incomaprable, and can lead to life-long benefits -- being able to bill out at $150 per hour at SkillBridge being just one of them.

So, to Raj De Datta, who may have just written that article as a recruiting tool for his startup, stop spreading your gospel, as it is inherently false. And to everyone who did work at a large corporation in your 20s, I don't need to tell you this, but you made a smart choice.

Oil and gas consultants take notice: The domestic front is looking strong.

This morning, I read this very interesting article in The Guardian about the rapid growth of oil and gas in America. (This is certainly a growing field for SkillBridge consultants.):

In the mean time, the severely high demand for apartments has sent rental rates skyrocketing. In February, Apartment Guide claimed Williston boasted the highest rent in the US, citing a monthly rate of $2,394 for a 65 sq m apartment. This would make the North Dakota city a more expensive rental market than New York City, Los Angeles or the Bay Area.

Check out the full piece.

How A New Management Team Offered Differing Perspectives At Burger King, Turning The Company Around

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I recently read a great article in Business Insider on the transformation of Burger King. Few companies have the flexibility to completely uproot their senior management, but apparently Burger King was able to. Not only did fresh perspectives help turn around the company, they also "simplified the burger chain's offerings." However, as a senior manager, you may not be looking to fire your CEO and hire someone new. You may just want to get a fresh perspective -- hence why hiring a consultant with expertise in your industry could help you solve your problems, improve your cashflow, and ultimately grow your business. Here's a clip from the Business Insider article:

"These days ... Burger King is behaving more like a startup than a typical burger chain," Leonard writes.

Perhaps that's because this is Schwartz's first job in the fast-food industry. Before Burger King, he was an analyst at Credit Suisse in Boston, and more recently, he worked for 3G Capital, the Brazilian private equity firm that bought Burger King in 2010.

It's uncommon to find a CEO of a large public company as young as Schwartz. After Facebook's Mark Zuckerberg, he would be the youngest CEO of the Fortune 1000, if Burger King made that list, Leonard points out.

Having no experience in the industry, Schwartz spent his first couple of months training in Burger King restaurants — cleaning toilets, making burgers, and interacting with customers.

His experience led him to believe that the complicated menu was slowing down orders. So he simplified the burger chain's offerings to include dishes that are easier to assemble.

Under the direction of 3G, Schwartz has helped reduce Burger King's corporate headcount from 38,884 to 2,425 by refranchising restaurants, meaning those workers now report to franchise owners. He has implemented deep cost-cutting measures that axed many executive perks, including lavish offices that employees called "Mahogany Row" and a $1 million annual party at a chateau in Italy, Leonard writes.

Schwartz has also negotiated deals with restaurant operators in Brazil, China, and Russia, which have helped grow the number of Burger Kings worldwide by 12% to 13,667 over the past year.

Read more: http://www.businessinsider.com/burger-kings-young-ceo-2014-7#ixzz38UwCfIML

President Obama Signs A Bill To Help Workers Train For Real-World Experiences

Interesting development today from the White House: President Obama signed a law that,  "citing a “skills gap”  prevents many unemployed workers from qualifying for new jobs, signed legislation on Tuesday to bolster federal job-training programs.

The new law seeks to impose more accountability on the federal-state training partnerships by requiring a “job-driven checklist” to ensure that federal money is used effectively and by providing “data-driven tools” to give workers better information about career prospects. It also gives cities and states greater flexibility in how they use federal money for training programs.

Why are consultants’ fees so high? Here’s what we’re doing at SkillBridge.co to change this…

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When I tell people that at SkillBridge.co, we have created a platform for consultants to find work at market prices, the next obvious question is, “What are market prices for consultants?” The second question, also pretty obvious is, “Why do consultants charge so much money for their services?”

The second answer is that consultants have to hustle for business. Therefore, they have to raise their prices to account for all of the time they spent hustling. At nearly every event I attend in New York City, I meet a “consultant.” This person is inevitably at the event to find new business.

Consultants spend between 50% to 75% of their time hustling for business, and then only spend approximately 25% of their time completing the work that they get. Therefore, if a consultant charges $200 per hour, that is probably because he had to attend five networking events for two hours each in order to find your work. It makes sense that consultant factor the hunt for work into their equation. This is why we created SkillBridge.co.

As I recently published in the SkillBridge Manifesto, “More than 70% of your time is spent doing business development. The chance that this approach gets you a project that matches your skillset, pay rate, and availability, is slim to none. Then, dealing with service agreements, invoicing, and billing departments is a nightmare.”

The alternative to dealing with independent consultants is even worse: Large management consulting firms. As I wrote, large consulting firms “charge you a 500% markup for their work. The bulk of your fees go into the pocket of the partner who sourced your project. What is left is eaten up by large firms’ extravagant offices, armies of administrators, first-class travel habits, and other frills. Very little money goes to the consultants who do the work.”

This is why we built SkillBridge, an online platform to find and hire the world’s best consultants on demand. We believe that talented, independent, consulting professionals, who are passionate about the work they do, should be able to easily connect with high impact corporations that need expert help. Neither party should have to spend an exorbitant amount of time or money to find each other. Companies want more affordable, unbundled alternatives to the solutions offered by traditional professional services and consulting firms.

Another reason why we built SkillBridge is to give talented business professionals an alternative to full-time work: Increasingly, the new knowledge workforce want options that allow them to raise a family, pursue adult education, or explore different career paths.

I might use cheeky slogans like #ConsultingForAll, but I really mean it. Consulting should be far more accessible to small businesses than it is today.

Now, back to the first question. Market prices for consultants are far more affordable than you think: You can easily hire an ex-McKinsey consultant with 5 years experience for $125 per hour to work on a strategy report for you or your company. You can also hire an Ivy League graduate who has worked at an e-commerce startup like Fab.com for three years to help you create an online marketing strategy for $75 per hour. Once you take away the fancy offices and first class travel of large consulting firms, consulting becomes a realistic way to achieve goals for your business.

Stay tuned for a future post, likely coming next week, in which I will further break down the costs associated with consulting and explain how it is a smarter and more efficient way to hire talented people to get work done for you and your company. I will also discuss how to set your consulting fees, and explain how SkillBridge and other platforms help consultants find excellent, interesting, and well-paid work.

My Barber Needs A New Pricing Strategy. Maybe You Do Too...

Last Friday, when I woke up and rode my bike to my local barber shop, Vincent's, a place that has served as a local neighborhood barbershop for nearly 100 years, there were already five guys waiting outside at 7:55am, and the shop doesn't even open until 8.

Nowadays, the shop is run by Vincent Jr., and it is always packed. Even on Saturdays, when there are three or four barbers working, it is typical to expect a line that will last from 30 minutes to one hour before you get your haircut. (Ostensibly this is because the place is closed on Sunday and Monday, but that is another story...)

The reason I am writing this is that a haircut at Vincent's is just too darn cheap. At $12, it is the best bargain that can be found in New York City. (But, it doesn't make me get haircuts more frequently either.) I happily tip $5 whenever I get my haircut, because I feel like a new man when I walk out of the barber shop.

What I really think Vincent's needs is a pricing strategy. I've done my market research for him: I've talked to dozens of customers while I'm waiting in line, and they all love the quality of the haircut at Vincent's. It would be safe to say that every patron would continue to go to the shop, even if the haircut were raised to $15. One of the major reasons is that there are few barbers in our neighborhood -- at least few that use scissors to cut your hair rather than those pesky new clippers.

Good news: Vincent's starting to listen. When I arrived at his shop this morning, and suggested that he raise his prices, he pointed to a brand new sign. A haircut is now $13. He's part of the way there, but not there completely, as I am convinced he can earn at least 15% better returns per year if he continues to raise his prices.

Do you know a company that should change their pricing strategy, needs market research support, or can otherwise benefit from consulting help? If so, please refer them to SkillBridge!