Things Remarkable Startups Have In Common

Why do some startups succeed and others don't? Here's a hint: It doesn't have to do with if an idea is good or bad. Indeed, the successful entrepreneurs are able to run with amazing concepts and pivot otherw when needing. There are a few more tried and true principles that can contribute to the success of your new company.

Among other things, these are four things remarkable startups have in common.

1. Founders are insanely passionate about the idea. Don't start a business without passion. You won't be able to see it through if you are not really into your idea. Founders of most successful startups started searching for solutions to a problem they cared about and made it their focus.  

"You have to be burning with an idea, or a problem, or a wrong that you want to right. If you're not passionate enough from the start, you'll never stick it out," Steve Jobs has said.

Founders with great passion tend to inspire others to greater success, and they look out for those traits in new hires. According to best-selling authors and workplace strategists Kevin and Jackie Freiberg, passion enables innovation and creativity and makes employees want to stay in their jobs and contribute, even when they’re not feeling their best.

2. They don't try to do too much at once. Laser focus is immensely crucial for the success of every new business. What is the one thing your startup is known for?  Your startup should be focusing on the one thing that makes you stand out. All the successful and well-known startups you know today are doing the one thing that makes them stand out.

For instance, Snapchat knows a picture is worth a million words and have allowed users to send photos and videos that disappear a few moments. Dropbox wants to be the go-to solution for uploading and sharing files in the world.. Most great startups start out to provide simple services or products, but as they grow customers and users tend to demand more, the company needs to improve and make solutions even better.

"The most important things for startups to do is to focus. Because there's so many things you could be doing. One of them is the most important. You should be doing that. And not any of the others." says founding partner of Y Combinator Paul Graham.

3. They value their customers and take great care of them. Does your startup know how to design and deliver great customer service? Successful startups are constantly seeking to satisfy their customers. The importance of reinforcing awesome customer service should be made clear among your employees. Design your products with the customer in mind. Remarkable startups listen and respond to their customers' evolving needs and expectations.

Strive to make your customers feel that signing up with you was one of the best decisions they ever made, and you will likely have their business for a very long time. As your product changess, the best opportunity you have at delivering the best service is a close relationship with your customers that value their feedback and user experience. Your customers are the people that support you, trust you and most importantly, rely on you for the service or product you offer. They could have chosen your competitors, but they chose you. Make them a part of your evolving development process. Startups that grow with their customers ultimately win.

4. Entrepreneurs don't forget the importance of culture. Successful startups establish and maintain some the best company cultures that promotes and motivates employees. The team behind a product or service is one of the most important factors for a successful business. The first people you hire for your startup are critical to your startup's success. And cultural fit is as equally important as competence when hiring your best people.

People with the right skills and personality are more likely to influence your small team to greater heights than just competent hires. Culture takes time and effort to build, but as long as you don't lose sight of it, you are on a journey to building a great company. It is well known that Google has a unique culture and some of the company's success can be attributed to this culture. 

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Reasons to Start Your Own Business

If you’re an entrepreneur you have heard the million reasons not to go into business: It’s too risky, you might go into debt, you’ll probably lose sleep, your social life is kaput, and the list goes on. But even with all these uncertainties, people are still attracted to the startup world. There are just as many, if not more reasons to take the leap and go into business for yourself.  Here are just a few:

1. Spare time. This one can take some time.  Initially you’ll work longer hours for less pay.  But if you do it right, you could start to master your schedule and the freedom that being an entrepreneur provides is awesome. 

2. A story to tell. Whenever I tell someone I run my own business, they always want to know what I do, how I do it and how it’s going. I always am able to provide a tale or two, and the best part is that I get to determine the story's chapters. (When working for a corporation, people most likely have less input.)

3. Tax benefits. For entrepreneurs (freelancers included), they have the opportunity to take advantage of some nice tax perks. Many can write off expenses like travel, food, phone bills, portions of car payments, and the list goes on. Also, certain startups qualify for government incentives. Make sure to ask your accountant about what tax benefits you may be eligible for.

4. Pride. When you build something successful, it’s a great feeling. You had a vision, were able to execute it and not can reap the benefits of saying "I did this." On the other hand, it’s tough to be proud of the zillionth request for proposal you fill out for your employer.

5. Your posterity. If you’re a doctor, plumber or bus driver it’s hard to imagine you passing your career on to your loved ones. But if you own your own business, that’s something you can pass on to the next generation. And be proud of it, because you created it.

6. Job security. Have you ever been laid off, downsized, or fired?  If you have, you get this. With entrepreneurship the security lies in the fact you are your own boss. You run the show and don't have to worry about getting let go.

7. Networking. Entrepreneurs are communal creatures.  We love to meet each other, swap stories, and learn from each other’s experiences. Your circle of friends and acquaintances always grows when you become an entrepreneur, as many founders need others to lean on to survive and talk about the challenges only known to them.

8. Doing good. While this isn’t exclusive to entrepreneurs, it’s definitely a perk. You control where your company profits go and if you choose, you can give allocate your financial gains to others. You can sponsor a charity, a non-profit or just personally give back to the community.  This is quite honestly one of the best parts of being an entrepreneur.

9. Novelty. We, as humans, love new experiences but rarely can you experience a host of new things from inside your cubicle. This all changes when you are running the show. Starting your own business will ensure you’ll always be facing new challenge and experiencing something new.

10. Mentorship. Having had mentors and getting to be a mentor have been some of the best experiences of my life.  Learning from the masters and getting to help those less experienced than you gives you such a sense of satisfaction. From my experience (and other's stories) the entrepreneurial community is very willing to give back and lend a helping hand.

11. Becoming an expert. This point goes along with mentorship.  Regardless of what you do as an entrepreneur, if you stick with it, you’ll probably become very good at it. And this gives you a sort of soapbox, so use it. You'll have the chance to be interviewed for your expertise, write about it and get to spread your message.

12. Skills. People ask me how I learned about SEO, social media, pay-per-click, PR and all the other marketing techniques I utilize. I tell them that I was forced to learn them, otherwise I wouldn't survive.  The same way I was forced to learn how to build a spreadsheet, how to balance a budget, how to negotiate leases and countless other skills I picked up because I was the only resource I had. While developing new skills can be tough and takes times, it can pay off in spades.  These skills will be invaluable throughout your life.

13. Determination. Everything I’ve done as an entrepreneur has affected me in my personal life.  I used to be poor at committing to changes. But having been an entrepreneur for over a decade has forced me to become dedicated and determined to causes. (Now I can stick to an exercise plan much easier.)  I’m also better at being a father and husband because of that determination I learned.

14. Recognition. There are literally thousands of local, regional and national awards that recognize entrepreneurs in every field and industry. This shouldn’t be your only reason to start your business, but it certainly is a great feeling when you receive this recognition.

15. Financial independence. Let’s be honest, this is probably the biggest reason people get into business for themselves.  And that’s a good thing!  You should want financial independence.  However you define financial independence – retirement stockpile, unlimited cash potential or having the money to buy what you want --  entrepreneurship can allow you to achieve it. Trust me, money doesn’t buy happiness, but it does make finding happiness much easier.

16. Reinvention. I’ve started and sold several companies over my career.  And every time I sell a company, I’m presented with an opportunity to reinvent myself all over again. On the flip
side, if I had received my law degree, I’d be a lawyer (not a lot of room to recreate myself). But as an entrepreneur, I get to be whatever I want to be.

17. Change the world. Everyone jokes that every entrepreneur says they’re going to change the world. It’s difficult to imagine how a cell phone accessory kiosk in the mall is going to change the world.  But there are those that do succeed.  Take a look at Elon Musk, Bill Gates, Sergey Brin, and the countless other entrepreneurs who really have changed the world in some small (or major) way.

18. Create jobs. There’s nothing like the satisfaction of knowing you’re responsible for the success of your employees.  Your ideas provided them the opportunity to earn a living, provide for their family and fulfill their own dreams.

19. Your brand. Being known for something is awfully enjoyable.  People may start referring to you as the marketing guy, or the retail maven or the software guru.  Whatever it is you’re recognized as, it’s fun to build that brand and earn that recognition.

20. Your reason. I’ve given you a list of why I think you should get into business.  But all that really matters is your reason to start your own business.  So, what is it?  Tweet out this story and add your reason.  Comment below and share with us why you did it.  I know it will be a good one. 

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Start up -What Legal Issues Should I Consider Before Starting a Social Network?

Like any other business endeavor, a social network brings up a variety of legal issues. Here are just a few that you'll need to consider:

• Social networks can take a great deal of capital to get off the ground. Will you be looking for investors? Hitting up family or friends for loans? Documenting these financial contributions, and determining whether people are entitled to "a piece of the action," involves securities and valuation issues.

• You'll want to choose a legal entity that will own the social network. Which form of business should you be? That depends on your financial plans and exit strategy.

• How will you collect and then use data from users? This brings up a host of privacy issues--both in terms of sharing email addresses, as well as data security issues if you take credit cards, store Social Security numbers or collect other private information on your site.

• If your social network is a playground, what kind of referee will you be? Users want to know there are "rules of the road" and what kind of treatment they can expect in your playground. If yours will be a social network for “haters” and I’m a pacifist, I’ll want to know that before I join. That's where your site’s terms and conditions come in handy.

• And then there's the competition. First of all (and this is not strictly a legal issue), how will you distinguish your social network from the many others that are out there? If you don't have a clear and differentiated value proposition, you're unlikely to win people over versus the more known and popular sites already available. Second, if you’re a copycat network, you do run the risk of being sued, especially if your logos and design are similar to those that already exist and have achieved some prominence.

Those are some initial thoughts. If you're serious about getting this started, and it's not just a pipe dream, you'll want to flesh out your plans to take full account of the competition, and consult with a business attorney who is familiar with doing business and creating networks online. Investors in particular will want to see that you have weighed all of the risk factors carefully before they pony up their cash.

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Different Ways to Plan for the Future - Start up Business

Perhaps you've wondered if it's better to start your own company or work for someone else. There are many ways to consider that question but one of my favorite ones is to explore how entrepreneurs think. Once you know that, you can compare yourself to them and decide whether you share their approaches to the world.

Entrepreneurs may use two types of business logic for thinking about the uncertainty that confronts them: prediction, analyzing the past to forecast the future and plan accordingly, andcreation, trying out a solution and moving forward based on how well it works.

One of the exam questions I used for the midterm for my Babson College course Foundations of Entrepreneurial Management involved having students to define each of these types of logic and to say which approach is best.

It's a trick question that most students get right. The answer is that each approach works. But the challenge is knowing which circumstance requires which style of thinking.

Using the past to predict the future. For example, if you are an entrepreneur in an industry that's fairly regular, such as selling Christmas trees, prediction logic will work well. It is probably fairly easy to analyze previous years' data of tree sales by species and size for each day of the year.

Odds are very high that you will start to see sales rise on Thanksgiving and perhaps peak 10 days before Christmas. And if you are trying to decide how many different trees to order, you can use historical experience as a first approximation of what to order this year, adjusting the numbers in case new competitors pop up or the weather is going to be very different than in the past.

In other cases prediction logic is a terrible approach and creation logic yields a better outcome.

Related: Keep Innovation Flowing as Your Startup Grows

When creation logic bears fruit. Consider the story of Max Levchin. He immigrated to the United States from Ukraine and attended the University of Illinois. He liked building operating systems for computers and after he graduated decided to co-found Confinity, a company that would build operating systems for the handheld Palm Pilots that proliferated in the 1990s.

He did that but had few buyers. So he decided instead to focus on building operating systems for another handheld device -- the digital wallet. Levchin got a mostly tepid response from the market for that as well.

One feature of his software generated a huge amount of email traffic from people who were trying the product -- its ability to use his software to pay for items that were being auctioned on the then fast-growing eBay.

Please, Max -- the emails implored -- make this online auction currency easier to use and have it run faster. For six months, Levchin ignored the emails because he just wanted to build operating systems.

Eventually he gave in to customer demand and built up the auction currency function. Confinity is merged with Elon Musk's X.com, and called PayPal just like the digital wallet product. In 2002, eBay acquired PayPal for $1.5 billion.

Best use scenarios. Creation logic seems inefficient but it can yield excellent results in situations with great uncertainty as long as an entrepreneur is happy with the idea of doing frugal experiments, analyzing the results and then trying again based on the feedback.

If you are in that rare entrepreneurial situation where the past gives a fairly clear picture of the future, then prediction logic is a far more efficient way to figure out what to do.

If you can think both ways and know when each way is appropriate, you may well have what it takes to be an effective entrepreneur.

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Things to Look for in a Venture Capitalist

What really separates venture capitalists from the rest of us?

I’ve been dealing with VCs for a long time, including my time as one of them. I’ve lost count of the number of meetings I’ve had and the thousands of emails (and dollars) I’ve exchanged with them over the years.

Last week someone asked me what I think about VCs. She wanted to know if I thought they were really smart, just lucky or absolutely clueless. Here’s what I told her:

They know what they know, and not much else. Most of the VCs I’ve worked with would fail an undergraduate exam on emerging technologies, regardless of how amazingly articulate and affable they might be. I remember VCs I worked with in the late 1990s that had absolutely no clue about how the internet actually worked or any insight at all about the technology that powered the web, or the business models that the web enabled. Since most VCs come from banking, finance, mergers, acquisitions and related industries, they really don’t understand much about retail, insurance, manufacturing or aerospace, among other industries.

So what do they know? Deal terms, valuation, investor rights. All that stuff. They’re really good at modifying deal terms. They’re good at employment agreements. They understand cap tables even when they’re drunk, and can dissect -- and challenge -- revenue projections in their sleep.

It's not who you know. It's who they know. Most of the success that VCs enjoy is due to their relationships. Who they invest with, the entrepreneurs they back and the lawyers and investment bankers they hire explain much more about their success than their technical knowledge, experience or natural luck. If you look at the most successful VCs, you will almost always see repeat performers in their portfolios. They go to the same wells over and over again. Most of their success is the result of who they know, not what they know or do.

A VC always wins. When VCs fail, they still get huge salaries and management fees, fly private jets and take elaborate vacations disguised as deal flow expeditions. When their investments are successful, they get huge salaries and management fees, fly private jets, take elaborate vacations disguised as deal flow expeditions and get “carried interest,” a percent of the profits from their investments. The traditional 80/20 split (after huge salaries and fees, of course) makes a lot of “lucky” VCs very, very rich.

VCs get paid really well regardless of how well they perform (with other people’s money). Many of them -- and maybe even you -- will say that if a fund fails to return meaningful returns to its investors, VCs will have a hard time raising another fund. But the facts suggest otherwise. Actually, this all sounds pretty damn smart to me. In fact, the VC business model is absolutely brilliant -- for VCs.

If you’re an entrepreneur looking for an investment, or an investor looking to make some money, what should you look for in a VCs? Here are five rank-ordered areas to assess:

1. Relationships. Who does the VC know, invest, work, travel and win with? Look for relationship pedigrees that include major law firms, successful entrepreneurial testimonials and happy institutional investors.

2. Performance. While VCs win whether they succeed or fail, you need to know what the empirical record actually shows, not lore or hearsay, but actual results, like the internal rate of return of each and every fund they’ve raised and the carried interest that investors actually received. Take no prisoners here: this is the most important due diligence you will ever do.

3. Advocacy. Assess the firm’s orientation -- is it an entrepreneur-friendly firm or a firm that’s focused primarily on its investors? There are strengths and weaknesses with each bias, but remember that entrepreneur-friendly firms have better deal flow than firms that have investor biases.

4. Knowledge. While many VCs are not rocket scientists, they should also know enough about themselves to know what they don’t know. There is no more deadly combination than arrogance and stupidity -- if you see this combination, run for the hills.

5. Professional integrity. It’s important to calibrate the integrity and ethics that define your VC firm. If you’re wondering why “professional integrity” is last on my rank-ordered list, it’s not that professional integrity isn’t important, it’s just that the other four areas are more important. This will tell you everything you really need to know about VCs.

Good “luck.”

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Questions to Ask Before starting Your Own Company

The dream of being one's own boss is what leads many people to start businesses, but leaving your bread-and-butter job to fulfill that vision is a move that shouldn't be made hastily.

In his book, Quitter: Closing the Gap Between Your Day Job & Your Dream Job (Lampo Press, 2011), Nashville-based author Jon Acuff says that between 70 and 80 percent of people think about quitting their job to do something more fulfilling. “A lot of people wake up Monday morning and say, 'How did I get here?'” he says. “You take a six-month stop-gap job sometimes and find yourself still there years later, but it doesn't have to be that way.”

That said, Acuff and other experts say there are some important things to consider before quitting your day job to start a business.

Here are the ten questions you should ask yourself.

1. Is this going to make me happier?

Before leaving your job for uncharted territory, make sure this is really what you want – not just what you think you want or a way to escape your current job. “I personally believe you should get enjoyment out of your career,” says Chris Hurn, Orlando, Fla.-based, author of The Entrepreneur's Secret to Creating Wealth: How The Smartest Business Owners Build Their Fortunes (Advantage, 2012). “Too many people suffer silently in their job, but before you go out to be your own boss, you have to believe you're going to be happier. If you can't say that you believe it will make you happier, don't do it.”

2. Is the timing right?

If your wife is pregnant or you've just taken over the care of an elderly parent, it may not be the right time to leave the security of an established job to pursue the dream. “We throw out these Pinterest-sized platitudes like, 'Just go for it' or, 'Step out in faith.' And then we pretend that we don't have a mortgage or bills or responsibilities,” Acuff says. Instead, be honest about your current situation; be realistic about your bills and your commitments; and then make an informed decision.

3. How will I cover my expenses?

The biggest detriment to starting a business? Being undercapitalized, says Deborah Shane of Fort Myers, Fla., author of Career Transition – Make the Shift: Your Five Steps to Successful Career Reinvention (Deborah Shane, 2010). You should have a rainy day fund or savings built up to cover you and the business for a certain period of time, the length of which will be determined by the nature of the business and how quickly you'll be able to pay yourself a salary (although Shane suggests 12 months as a good place to start). “Make sure you have the money to pay both your personal and business expenses for that period before venturing out on your own,” she says.

4. Do I have the support of family and close friends?

The talents and shortcomings we have the hardest time recognizing are often our own. So before venturing away from a secure situation, Acuff suggests asking the people you trust the most how well-suited they think you are to the opportunity. “Talking to family and close friends will help you realize if you’re going after something that you really want to do, or just escaping your current situation,” he says. “Don’t just talk to the dreamers in the group that will tell you to go for it. Talk to the people that will be honest with you and encourage you if you’re on the right path.”

5. How much am I willing to change my lifestyle?

Some people are very good at structure. Getting up, going to work for a set number of hours, performing set tasks, and interacting with co-workers works really well for them. Yet starting your own business can be anything but structured and can mean long, hard hours – very often spent alone. “There's also a lot of self-motivation involved. You have to be structured, innovative, creative and proactive,” Shane says. “The solo nature of it is not for everyone.”

6. Do I truly have the discipline to be my own boss?

Many people think if they can be their own boss, it's going to make life easier. Sometimes that's true, but not always, according to Hurn. Not everyone is meant to be a business owner. Although entrepreneurs come in all shapes and sizes, they do often share traits like good leadership skills and a desire to be in control. “Many people think entrepreneurship is for risk-takers, and that's not necessarily the case,” he says. “I think successful entrepreneurs do the due diligence before starting their business and minimize the risk involved in a new project.”

7. Can I test the waters without giving up my current job?

Acuff urges people to 'beta test' their dream job before leaving a stable situation to pursue it full-time. You might find you don't like the new career as much as you thought you would. “Before you quit your accounting job to open a coffee shop, it might be good to work at a Starbucks part-time for six months to see if you hate coffee and humans,” he says. “Practice the dream.”

8. Are there skills I still need to brush up on?

Before stepping out, make sure you have the relevant skills, qualities and intangibles to make a new business work. It's important to be up to date on the latest technology in your field and be able to use social media to your advantage. “Make sure your skill gaps are closed and that you're up on trends and best practices in the area you are getting into, following the top blogs and web sites,” Shane says. “So much is changing so fast -- staying relevant is crucial to success.”

9. Am I sure my business idea is sound?

It's important to make sure what you're planning to do is marketable, that it fills a niche. Is there a need for this thing you want to do? “I work with a lot of creative people who have started businesses based on peoples' lifestyles, the world we live in today,” Shane says. “They've found niches to help working moms, families, individuals who are time-starved.” Make sure your idea is relevant before making that leap.

10. Do I have a business plan?

It doesn't have to be the length of a novel, but anyone starting a new business should put together a plan that includes a sound sales and marketing plan. Winging it is not an option in today’s competitive marketplace. “It doesn't have to be complicated, but can be as simple as a one-page summary,” Shane says. “Look at it as a road map.”

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Things I Learned Growing $2,000 Into a Multi-Million Dollar Business

In Spring, 2008, I spent my exchange semester studying in Osaka, Japan. Three of my American classmates were looking for summer internships. As I had spent my previous semester in Shanghai making friends with interns who worked at Heineken and the Beijing Olympics, I managed to help my classmates by connecting them with companies in China.

A few months later, I graduated from Jonkoping International Business School in Sweden. I was 23 years old, in the diamond industry and decided to move to the Thailand. Paradise on earth! One day I looked at my bank account and saw $1,998. I recalled my time in Japan and thought how easy it would be if you could just apply up for an internship and go to China with your housing, visa and friends organized.

My parents told me I had to burn all my bridges to truly succeed. I bought a laptop and a one-way ticket to China. I burned all my bridges and have never looked back.  

Five years and four global offices later, I’m running a multi-million dollar business. My journey has taught me vital lessons for an entrepreneur to live by.

1. Learn foreign languages. I speak seven languages, a tremendous advantage compared to our competitors. It is much easier to understand foreign markets and cultures. I communicate with local vendors and business partners without any problems. People appreciate and respect you when, literally, speak their language. Thanks to my language skills, I've developed relationships with important business people who others could not. Join a language course today. It’ll be worth your time and money.

2. Treat everyone with respect.  Not everybody in the global business world is doing business the same way as you. Be open-minded to other cultures and “when in Rome, do as the Romans do.”  Too many entrepreneurs put on an act when they meet important business people and treat everyone else with less respect. Every single contact knows another contact, so treat a CEO the same way as a waiter. I see them both as potentially important contacts. People judge actions more than words. 

3. Move fast. A start-up has to move as fast as a mouse or get crushed by an elephant. If you come up with an idea today, act on it today. Don’t wait. Every day somebody is waking up with the sole purpose of running you out of business. Procrastination is your enemy.

4. Love what you do. I meet so many people, from investment bankers to marketers, who don’t enjoy what they are doing. You can never be truly great unless you really love what you do. Every day, wake up with a smile and enjoy every second. Don’t live a wasted life. Love every second and, if you don’t, do something else.

5. Be 24/7. Opportunities are lost while dining with your friends or out in a bar. Once, I was invited for a live interview on Fox-TV business news but, as it took me 12 hours to respond, they canceled on me. My iPhone is on 24 hours a day, 7 days a week. My colleagues know they can reach me at 5 am as well as at 11 pm. Be connected and keep your phone on 24/7. Answer emails in real-time. That’s the only way to get an edge running a fast growing start-up in different time zones.

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How to Name Your Business

What's in a name? A lot, when it comes to small-business success. The right name can make your company the talk of the town. The wrong one can doom it to obscurity and failure. Ideally, your name should convey the expertise, value and uniqueness of the product or service you have developed.

Some experts believe that the best names are abstract, a blank slate upon which to create an image. Others think that names should be informative so customers know immediately what your business is. Some believe that coined names (that come from made-up words) are more memorable than names that use real words. Others think they're forgettable.

In reality, any name can be effective if it's backed by the appropriate marketing strategy. Here's what you'll need to consider in order to give your small business the most appropriate and effective name.

Enlist Expert Help to Start

Coming up with a good business name can be a complicated process. You might consider consulting an expert, especially if you're in a field in which your company name may influence the success of your business. Naming firms have elaborate systems for creating new names and they know their way around the trademark laws. They can advise you against bad name choices and explain why others are good.

The downside is cost. A professional naming firm may charge as much as $80,000 to develop a name. That generally includes other identity work and graphic design as part of the package, according to Laurel Sutton, a principal with Catchword Brand Name Development. Naming services that charge as little as $50 do exist, but spending a reasonable amount of money early for quality expert advice can save you money in the long term.

What's in a Name?

Start by deciding what you want your name to communicate. It should reinforce the key elements of your business. Your work in developing a niche and a mission statement will help you pinpoint the elements you want to emphasize in your name.

The more your name communicates to consumers about your business, the less effort you must exert to explain it. According to naming experts, entrepreneurs should give priority to real words or combinations of words over fabricated words. People prefer words they can relate to and understand. That's why professional namers universally condemn strings of numbers or initials as a bad choice.

On the other hand, it is possible for a name to be too meaningful. Common pitfalls are geographic or generic names. A hypothetical example is "San Pablo Disk Drives." What if the company wants to expand beyond the city of San Pablo, California? What meaning will that name have for consumers in Chicago or Pittsburgh? And what if the company diversifies beyond disk drives into software or computer instruction manuals?

How can a name be both meaningful and broad? Descriptive names tell something concrete about a business -- what it does, where it's located and so on. Suggestive names are more abstract. They focus on what the business is about.

Consider "Italiatour," a name that was developed by one naming company to help promote package tours to Italy. Though it's not a real word, the name is meaningful and customers can recognize immediately what's being offered. Even better, "Italiatour" evokes the excitement of foreign travel.

When choosing a business name, keep the following tips in mind:

• Choose a name that appeals not only to you but also to the kind of customers you are trying to attract.
• Choose a comforting or familiar name that conjures up pleasant memories so customers respond to your business on an emotional level.
• Don't pick a name that is long or confusing.
• Stay away from cute puns that only you understand.
• Don't use the word “Inc.” after your name unless your company is actually incorporated.

Get Creative

At a time when almost every existing word in the language has been trademarked, the option of coining a name is becoming more popular. Some examples are Acura and Compaq, which were developed by naming firm NameLab.

Coined names can be more meaningful than existing words, says NameLab president Michael Barr. For example, "Acura" has no dictionary definition but the word suggests precision engineering, just as the company intended. NameLab's team created the name Acura from "Acu," a word segment that means "precise" in many languages. By working with meaningful word segments (what linguists call morphemes) like "Acu," Barr says the company produces new words that are both meaningful and unique.

Barr admits, however, that made-up words aren't the right solution for every situation. New words are complex and may create a perception that the product, service or company is complex, which may not be true. Plus, naming beginners might find this sort of coining beyond their capabilities.

An easier solution is to use new forms or spellings of existing words. For instance, NameLab created the name Compaq when a new computer company came to them touting its new portable computer. The team thought about the word "compact" and came up with Compaq, which they believed would be less generic and more noticeable.

Test Your Name

After you've narrowed the field to four or five names that are memorable and expressive, you are ready to do a trademark search. Not every business name needs to be trademarked, as long as your state government gives you the go-ahead and you aren't infringing on anyone else's trade name. But you should consider hiring a trademark attorney or at least a trademark search firm before to make sure your new name doesn't infringe on another business's trademark.

To illustrate the risk you run if you step on an existing trademark, consider this: You own a new manufacturing business that is about to ship its first orders when an obscure company in Ogunquit, Maine, considers the name of your business an infringement on their trademark. It engages you in a legal battle that bankrupts your business. This could have been avoided if sought out expert help. The extra money you spend now could save you countless hassles and expenses further down the road.

Final Analysis

If you're lucky, you'll end up with three to five names that pass all your tests. Now, how do you make your final decision?

Recall all your initial criteria. Which name best fits your objectives? Which name most accurately describes the company you have in mind?

Some entrepreneurs arrive at a final decision by going with their gut or by doing consumer research or testing with focus groups to see how the names are perceived. You can doodle an idea of what each name will look like on a sign or on business stationery. Read each name aloud, paying attention to the way it sounds if you foresee radio advertising or telemarketing in your future. Use any or all of these criteria.

Keep in mind that professional naming firms devote anywhere from six weeks to six months to the naming process. You probably won't have that much time, but plan to spend at least a few weeks on selecting a name.

Once your decision is made, start building your enthusiasm for the new name immediately. Your name is your first step toward building a strong company identity, one that should last as long as you're in business.

This article is an edited excerpt from "Start Your Own Business, Fifth Edition", published by Entrepreneur Press.

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Builted A $10 Million Business By Reinventing The Bicycle

When his son turned 2, South Dakota dad Ryan McFarland bought him a tricycle and a bike with training wheels - each done up in racing stripes.

"My enthusiasm quickly turned to frustration as I watched my eager son of just 20 pounds struggle with the weight and complexity of these so-called 'children's bikes,'" McFarland says.

So McFarland, a dirt bike racer himself, started to rethink the traditional bicycle, looking for ways to turn it into a ride more suitable to his son. He thought about drilling holes or cutting away parts, but then he had an aha moment: He could get rid of the pedal system altogether.

What would provide propulsion instead? Feet.

McFarland took off the pedals, allowing him to lower the bike's center of gravity and thus stabilize the ride. What's more, his son could sit on the bike with both feet on the ground, which gave him full control of motion. He could walk along when going slowly, run to pick up speed, and then lift his feet to glide along. The design helps the rider gets a hang of balance and motion.

Like that, a new kind of bike was born - a Strider.

In 2007, McFarland used his invention to found Strider Bikes. Since then, it's seen explosive growth. He's sold more than 695,000 products, and the company brought in $10 million in revenue last year. In February, Strider moved to a 26,000-square-foot facility in Rapid Springs and now has 32 employees.

What's more, McFarland, 45, was named by the U.S. Small Business Administration as one of America's 53 best small business people of the year.

McFarland sees the Strider as filling a need that no other bicycle has met. "I don't think there has been anything in the marketplace that addresses the needs of an 18-month-old or 2-year-old," he tells Business Insider.

The Strider not only teaches young kids the basics of riding a bike, it also makes a big difference in parents' lives. "The kid's mobility is escalated to such an extent, it really changes your life," he says. "The parent has been attached to a diaper bag and a stroller the last two years, or they're moving at a snail's pace waiting for this dawdling 2-year-old. All of that changes when the child becomes mobile on this bike."

In a way, it's not too surprising that McFarland experienced such rapid success in the biking business. He's been exposed to racing - and entrepreneurship - all his life. His grandfather was a race car engineer, and his dad owned a motorcycle dealership. He grew up racing mountain bikes, dirt bikes, and go karts.

Before Strider, McFarland ran companies of his own in biking and home finance. Experiences with those businesses helped Strider grow quickly, since he already had a huge network of contacts in the bike industry and had a good understanding of finance and lending. To that end, McFarland used an SBA-backed line of credit to help navigate the fluctuating needs of inventory. If not for the loans, he says, all Strider's capital would have be sucked into inventory.

But inventory continues to grow as Strider becomes more a part of American childhoods. Already, kids are duking it out in the Strider World Cup Championship.

For McFarland, the most difficult part of the business is "convincingly explaining" the concept of the Strider to people. A bike-scooter might not sound like a big deal - until you see how it can change the way a kid experiences the world.

"Two years old, and they're more mobile than an adult at walking pace," McFarland says. "It's altering the course of this person's whole life - balance, coordination, confidence, everything. It's going to have a pretty profound effect." 

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Need to raise money for your startup?

If you’re looking for a list of Start Up Funding  sites, you’ve found it!
1 Angel.co
AngelList is a platform for startups—started by the dudes who do Venture Hacks.
Total start up funding raised from investors is $19,573,001 in April 2014.

2 Kickstarter
Kickstarter is a crowdfunding platform.This site is helpfull for those who like to get crowdfunding

 for there idea.

3 indiegogo

Indiegogo is an international crowdfunding site.

A few examples of campaigns on indiegogo, include "Lets Give Karen -The bus monitor- H Klein A Vacation!", which raised $703,833, Stick-N-Find which has raised $861,165, Bug-A-Salt which raised $577,546 and Let's Build a Goddamn Tesla Museum which raised $1.3 million.

Note : we advice you before geting funded by investors, first get to know who is investing on your idea?,why he is investing? what is his professional life?.Its better to talk with investors in skype or face 2 face communication.

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