Monday, April 30, 2012

Reuters: Small Business News: Social gifting: the new buzzword in e-commerce

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Social gifting: the new buzzword in e-commerce
Apr 30th 2012, 15:24

Facebook Director of Marketing Mike Hoefflinger announces a new ''Premium on Facebook'' service as he delivers a keynote address at Facebook's ''fMC'' global event for marketers in New York City, February 29, 2012. REUTERS/Mike Segar

Facebook Director of Marketing Mike Hoefflinger announces a new ''Premium on Facebook'' service as he delivers a keynote address at Facebook's ''fMC'' global event for marketers in New York City, February 29, 2012.

Credit: Reuters/Mike Segar

By Nivedita Bhattacharjee

Mon Apr 30, 2012 11:24am EDT

(Reuters) - Last year, the buzzword in e-commerce was Groupon Inc and its myriad of competitors that offered daily online coupons to entice shoppers in a down economy. Now, the latest fashion in retail is social gifting, where people get together on Facebook to buy each other gifts.

Start-ups such as Sweden-based Wrapp, which is launching its U.S. business on Monday, are getting millions of dollars in venture-capital funding, and retailers like Best Buy Co Inc, Gap Inc and Starbucks Corp are scurrying to be a part of it.

"Brick-and-mortar retailers are all looking for new, more efficient ways to drive sales into stores without diluting their brands ... we wanted to really see how retailers can leverage the megatrends of smartphones and social networks," said Hjalmar Winbladh, chief executive of Wrapp.

Wrapp is essentially an app that can run on smartphones, tablets and computers. It allows Facebook friends to buy each other gift cards from participating retailers either individually or by teaming up, which they can store on their mobile devices and redeem either online or inside physical stores. Retailers like it because there is little marketing cost and because customers often end up buying more once they are inside the store.

Since mid-November more than 165,000 active users have given over 1.4 million gift cards that can be redeemed in some 50 major retail stores across Europe, according to Wrapp.

"The thing that struck me as unique and interesting about Wrapp is that it is kind of the intersection of three trends: gift cards, social networks and mobile (shopping)," said Reid Hoffman, a cofounder of LinkedIn and a partner at Silicon Valley venture-capital firm Greylock Partners.

Wrapp has received $10.5 million in funding from Greylock and technology VC firm Atomico. Hoffman serves on Wrapp's board, as does Skype co-founder and Atomico founder Niklas Zennström.

In the United States, the Swedish company has tied up with retailers including H & M Hennes & Mauritz AB, Gap Inc, Sephora and Fab.

E-gifting - or people buying gift cards from a retailer's website - is still in its infancy, accounting for only $1 billion of the $100 billion gift card industry last year, according to Brian Riley, senior research director at CEB TowerGroup. Of that $1 billion, social gifting made up only about 5 percent or $50 million.

Technology is naturally progressing toward platforms like social gifting, said one industry player. "E-commerce platforms are becoming inherently more social with the inclusion of comments, recommendations and purchase history from each person's social graph," said Randy Glein, managing director at venture capital firm DFJ Growth.

THE RETAIL LINEUP

Starbucks expects social gifting to make up about 20 percent of its gifting business in the near future.

"Customers can connect from our site to their registered Facebook account to view upcoming birthdays of Facebook friends, send them e-gifts directly, and share the news on their Facebook wall," said Alexandra Wheeler, vice president of global digital marketing at Starbucks.

Bridget Dolan, vice president of interactive media at Sephora, said conversion rates - measuring the amount of customers who actually come to stores to redeem the vouchers - are likely to spike on holidays like Valentine's Day, Mother's Day, and just before Christmas.

This optimism has a host of startups like CashStar, SocialGift, Groupcard Apps and DropGifts rushing in to be the early birds in the sector.

CashStar, for example, works with more than 200 retailers for their e-gifting businesses, and has seen sales grow 463 percent in the latest quarter. Nearly 10 percent of CashStar's retailer network uses social gifting, CashStar Chief Executive David Stone said.

"Facebook commerce is still very nascent; it is a small, small world. Within that, social gifting is one area where we can potentially build sales," Stone said.

While there are high hopes for the future of social gifting, it may be appropriate to remember last year's darling, Groupon.

As a private company, Groupon was one of the fastest-growing businesses in history and in November pulled off one of the largest Internet IPOs of the past decade, valuing the company at well over $10 billion. But since the stock market debut, the shares have fallen around 40 percent on concern about the sustainability of that growth and the company's accounting.

WHAT'S IN IT FOR THEM?

Retailers view social gifting as an opportunity to reach out to their target buyers and promote their brands at almost no extra cost.

Wrapp, for instance, charges retailers nothing until a transaction is made. It bets on the premise that most shoppers will end up spending more than the gift card's value once they are in the store.

"As marketers, we want to be where the consumers are, and they are all on Facebook," said Bradford Robinson, gift card manager for Chili's Grill & Bar.

Wrapp, which works with companies like home improvement chain Clas Ohlson and Dixons Retail-owned consumer electronics chain Elgiganten in Europe, said users reportedly spent 5.2 times the value of the gift card when they came to claim their gifts.

"I have no doubts that because of the FB platform, these things can grow very quickly and get a lot of users in a short period of time," said Sucharita Mulpuru, an analyst with Forrester Research.

But she also has a word of caution.

"It is new, and there is a lot that remains to be seen. It could be a very powerful form of marketing (and) drive incremental value. But the challenge is that there is a promise and there is a reality ... you can't just introduce a platform like this and expect it to deliver gold to everybody," she said.

(Nivedita Bhattacharjee in Chicago; editing by Matthew Lewis)

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Sunday, April 29, 2012

Reuters: Small Business News: Small business hiring takes step back in April

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Small business hiring takes step back in April
Apr 30th 2012, 04:03

Job seekers wait in front of the training offices of Local Union 46, the union representing metallic lathers and reinforcing ironworkers, in the Queens borough of New York, April 29, 2012.

Credit: Reuters/Keith Bedford

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Reuters: Small Business News: Social gifting: the new buzzword in e-commerce

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Social gifting: the new buzzword in e-commerce
Apr 30th 2012, 04:23

Facebook Director of Marketing Mike Hoefflinger announces a new ''Premium on Facebook'' service as he delivers a keynote address at Facebook's ''fMC'' global event for marketers in New York City, February 29, 2012. REUTERS/Mike Segar

Facebook Director of Marketing Mike Hoefflinger announces a new ''Premium on Facebook'' service as he delivers a keynote address at Facebook's ''fMC'' global event for marketers in New York City, February 29, 2012.

Credit: Reuters/Mike Segar

Mon Apr 30, 2012 12:23am EDT

* Sweden's Wrapp, other startups, win venture-cap backing

* Nascent industry carries big growth potential -investors

* Retailers like potential sales boost, low marketing cost

By Nivedita Bhattacharjee

(Reuters) - Last year, the buzzword in e-commerce was Groupon Inc and its myriad of competitors that offered daily online coupons to entice shoppers in a down economy. Now, the latest fashion in retail is social gifting, where people get together on Facebook to buy each other gifts.

Start-ups such as Sweden-based Wrapp, which is launching its U.S. business on Monday, are getting millions of dollars in venture-capital funding, and retailers like Best Buy Co Inc, Gap Inc and Starbucks Corp are scurrying to be a part of it.

"Brick-and-mortar retailers are all looking for new, more efficient ways to drive sales into stores without diluting their brands ... we wanted to really see how retailers can leverage the megatrends of smartphones and social networks," said Hjalmar Winbladh, chief executive of Wrapp.

Wrapp is essentially an app that can run on smartphones, tablets and computers. It allows Facebook friends to buy each other gift cards from participating retailers either individually or by teaming up, which they can store on their mobile devices and redeem either online or inside physical stores. Retailers like it because there is little marketing cost and because customers often end up buying more once they are inside the store.

Since mid-November more than 165,000 active users have given over 1.4 million gift cards that can be redeemed in some 50 major retail stores across Europe, according to Wrapp.

"The thing that struck me as unique and interesting about Wrapp is that it is kind of the intersection of three trends: gift cards, social networks and mobile (shopping)," said Reid Hoffman, a cofounder of LinkedIn and a partner at Silicon Valley venture-capital firm Greylock Partners.

Wrapp has received $10.5 million in funding from Greylock and technology VC firm Atomico. Hoffman serves on Wrapp's board, as does Skype co-founder and Atomico founder Niklas Zennström.

In the United States, the Swedish company has tied up with retailers including H & M Hennes & Mauritz AB, Gap Inc, Sephora and Fab.

E-gifting - or people buying gift cards from a retailer's website - is still in its infancy, accounting for only $1 billion of the $100 billion gift card industry last year, according to Brian Riley, senior research director at CEB TowerGroup. Of that $1 billion, social gifting made up only about 5 percent or $50 million.

Technology is naturally progressing toward platforms like social gifting, said one industry player. "E-commerce platforms are becoming inherently more social with the inclusion of comments, recommendations and purchase history from each person's social graph," said Randy Glein, managing director at venture capital firm DFJ Growth.

THE RETAIL LINEUP

Starbucks expects social gifting to make up about 20 percent of its gifting business in the near future.

"Customers can connect from our site to their registered Facebook account to view upcoming birthdays of Facebook friends, send them e-gifts directly, and share the news on their Facebook wall," said Alexandra Wheeler, vice president of global digital marketing at Starbucks.

Bridget Dolan, vice president of interactive media at Sephora, said conversion rates - measuring the amount of customers who actually come to stores to redeem the vouchers - are likely to spike on holidays like Valentine's Day, Mother's Day, and just before Christmas.

This optimism has a host of startups like CashStar, SocialGift, Groupcard Apps and DropGifts rushing in to be the early birds in the sector.

CashStar, for example, works with more than 200 retailers for their e-gifting businesses, and has seen sales grow 463 percent in the latest quarter. Nearly 10 percent of CashStar's retailer network uses social gifting, CashStar Chief Executive David Stone said.

"Facebook commerce is still very nascent; it is a small, small world. Within that, social gifting is one area where we can potentially build sales," Stone said.

While there are high hopes for the future of social gifting, it may be appropriate to remember last year's darling, Groupon.

As a private company, Groupon was one of the fastest-growing businesses in history and in November pulled off one of the largest Internet IPOs of the past decade, valuing the company at well over $10 billion. But since the stock market debut, the shares have fallen around 40 percent on concern about the sustainability of that growth and the company's accounting.

WHAT'S IN IT FOR THEM?

Retailers view social gifting as an opportunity to reach out to their target buyers and promote their brands at almost no extra cost.

Wrapp, for instance, charges retailers nothing until a transaction is made. It bets on the premise that most shoppers will end up spending more than the gift card's value once they are in the store.

"As marketers, we want to be where the consumers are, and they are all on Facebook," said Bradford Robinson, gift card manager for Chili's Grill & Bar.

Wrapp, which works with companies like home improvement chain Clas Ohlson and Dixons Retail-owned consumer electronics chain Elgiganten in Europe, said users reportedly spent 5.2 times the value of the gift card when they came to claim their gifts.

"I have no doubts that because of the FB platform, these things can grow very quickly and get a lot of users in a short period of time," said Sucharita Mulpuru, an analyst with Forrester Research.

But she also has a word of caution.

"It is new, and there is a lot that remains to be seen. It could be a very powerful form of marketing (and) drive incremental value. But the challenge is that there is a promise and there is a reality ... you can't just introduce a platform like this and expect it to deliver gold to everybody," she said.

(Nivedita Bhattacharjee in Chicago; editing by Matthew Lewis)

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Thursday, April 26, 2012

Reuters: Small Business News: Small banks in bailout pool under pressure

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Small banks in bailout pool under pressure
Apr 26th 2012, 18:20

WASHINGTON | Thu Apr 26, 2012 2:20pm EDT

WASHINGTON (Reuters) - More than 100 smaller banks were able to tap government programs to pay off bailout money they received during the financial crisis but those still owing face a perilous future, a federal watchdog said on Wednesday.

In its latest quarterly report to Congress, the Special Inspector General for the Troubled Asset Relief Program, known as SIGTARP, noted that as of March 31 there were still 351 regional and community banks in the bailout program.

Banks had to agree to give the Treasury Department an ownership interest in the form of preferred stock and warrants to buy more stock as a condition of receiving bailout money. They have to buy the stock back to exit the program.

SIGTARP noted that 137 banks were able to refinance out of the bailout program by using money they received through another program, the Small Business Lending Fund, which was set up in 2010 to let the Treasury make capital investments in banks and so boost credit availability for small businesses.

The report notes that the hundreds of banks left behind, still owing bailout money, are mostly smaller and they face a new risk because dividend payments that they are required to pay the government nearly double in late 2013 to 9 percent from 5 percent.

Smaller banks typically have a harder time raising capital than big banks, and are more reliant on lending in smaller communities, many of which still are recovering from the severe recession the economy endured as part of the financial crisis.

The increased dividend kicks in after a bank has been in the bailout program for five years and was intended to be an incentive to pay off bailout money, though it now is a fast-approaching new burden.

The report said lending by community banks to small businesses has decreased modestly while big banks are increasing their lending.

SIGTARP said there were other signs that some community banks were facing a squeeze as the healthy banks leave the bailout program and the less-healthy remain in it.

"Of the 351 banks remaining in TARP as of March 31, 2012, there were 163, or 46 percent, that were not current in making dividends and interest payments totaling $306 million," the report said.

It noted that industry experts predict a wave of mergers and takeovers among community banks in the next three to five years.

Some 95 of the banks still owing TARP money had missed six or more payments. That gives Treasury the right to appoint directors to their boards, though it had done so only at nine banks by March 31.

SIGTARP said it had already recommended to the Treasury that it prepare "a clear TARP exit path" for the remaining community banks and it consider amending terms of the contracts for banks unable to get out before higher dividend payments start.

"Getting these banks back on their feet without Government assistance must remain a high priority of Treasury and the federal banking regulators," SIGTARP said.

A senior Treasury official noted the government already has recovered more than was invested in TARP's bank programs through repayments and other forms of income recovery like dividends.

"While there's no one-size-fits-all approach, you'll continue to see us make significant additional progress winding down the program in the year ahead through repayments, sales and other methods," said Tim Massad, assistant Treasury secretary for financial stability.

The bank bailout program was one of several pieces in the rescue program that the government launched amid the 2007-2009 financial crisis when it appeared the nation's banking system was on the verge of collapse.

Overall, the government now estimates the ultimate cost of the centerpiece TARP program will be around $60 billion, a figure it announced earlier this month, and that was a revision downward from a prior estimate of $68 billion.

(Reporting By Glenn Somerville; Editing by Neil Stempleman)

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Reuters: Small Business News: White House: Closing tax loophole could fund student loans

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
White House: Closing tax loophole could fund student loans
Apr 26th 2012, 18:28

U.S. President Barack Obama waves before talking about the rising costs of student loans while in Carmichael Arena at the University of North Carolina at Chapel Hill April 24, 2012.

Credit: Reuters/Larry Downing

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Wednesday, April 25, 2012

Reuters: Small Business News: Andreessen Horowitz partners pledge income to charity

Reuters: Small Business News
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Andreessen Horowitz partners pledge income to charity
Apr 25th 2012, 20:55

By Sarah McBride

SAN FRANCISCO | Wed Apr 25, 2012 4:55pm EDT

SAN FRANCISCO (Reuters) - In an effort to kickstart more charitable giving around Silicon Valley, the six general partners at venture firm Andreessen Horowitz are pledging to give half of their lifetime income from venture capital activities to charity.

In addition, the partners plan to donate $1 million immediately to six Silicon Valley nonprofits, ranging from food to youth programs.

"The idea behind it is to lead by example," said partner Ben Horowitz in an interview. "It's a show of appreciation for everyone in Silicon Valley."

Many Silicon Valley entrepreneurs tend to put philanthropy on the back burner as they work to develop their businesses. "It certainly applies to me," said partner Marc Andreessen about the years when he built up the browser company Netscape. "It's difficult to have a split focus when you're doing something that difficult."

A popular argument holds that entrepreneurs are better off focusing on building wealth so that down the line they are able to make even larger charitable gifts, Andreessen said. The counterargument holds they are missing immediate opportunities to stem societal problems such as hunger or inequality.

The partners' decision to make the pledge ensued after discussions held over several months, Andreessen and Horowitz said. It comes after the publication of "Giving 2.0," a book on philanthropy published last year and written by Andreessen's wife, Laura Arillaga-Andreessen.

"She was influential firm-wide," Horowitz said.

The pledge ties into a movement to encourage the nation's wealthiest to give generously. Two years ago, billionaires Berkshire Hathaway founder Warren Buffett and Microsoft founder Bill Gates kicked off the Giving Pledge, which invites billionaires to pledge the majority of their wealth to charity.

Individuals ranging from Facebook CEO Mark Zuckerberg to filmmaker George Lucas have signed on. The group includes venture capitalists John Doerr of Kleiner Perkins Caufield & Byers to Mike Moritz of Sequoia Capital.

For the group at Andreessen, which has not signed onto the Giving Pledge, the timing of the donations is flexible. The partners have agreed to make the gifts at any point during their lifetimes.

Venture capitalists can make billions as they reap fees tied to building up successful companies.

Andreessen Horowitz was founded in 2009 and has invested in many of the nation's hottest young companies, sometimes paying rich valuations. Some of the firm's portfolio companies include social image-sharing company Pinterest; microblogging service Twitter; gaming company Zynga; and Facebook, likely to be the technology sector's biggest-ever initial public offering.

In addition to Andreessen and Horowitz, the general partners comprise Jeff Jordan, John O'Farrell, Peter Levine, and Scott Weiss.

The six groups receiving their initial donation are urban tree-planting charity Canopy; the Ecumenical Hunger Program; Fresh Lifelines for Youth; hunger-relief charity Second Harvest; homeless charity the Shelter Network; and Via Services, which works with disabled and special-needs individuals.

(Reporting By Sarah McBride; Editing by Bernard Orr)

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Tuesday, April 24, 2012

Reuters: Small Business News: White House: Closing tax loophole could fund student loans

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
White House: Closing tax loophole could fund student loans
Apr 24th 2012, 17:34

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The White House is pictured shortly after sunrise in Washington, August 1, 2007. REUTERS/Jason Reed

The White House is pictured shortly after sunrise in Washington, August 1, 2007.

Credit: Reuters/Jason Reed

ABOARD AIR FORCE ONE | Tue Apr 24, 2012 1:34pm EDT

ABOARD AIR FORCE ONE (Reuters) - The White House said on Tuesday that it was reviewing whether a small business tax loophole should be closed to pay for an extension of low interest rates on student loans that President Barack Obama wants Congress to deliver.

The loophole allows some shareholder-employees of so-called "S corporations" to avoid paying the Medicare payroll tax on their earnings.

"We've certainly been in discussions with senators about that - that is certainly an option that is a good potential option," said White House press secretary Jay Carney traveling with Obama. "It meets the standard we set that we cannot pay for it in a way that harms students."

Obama was heading to North Carolina on the first leg of a tour of three battleground election states in which he will urge Congress to stop interest rates from rising on 7.4 million students. The action could appeal to middle class and younger voters vital to his hopes for re-election in November.

Carney said that closing the tax loophole was among a variety of potential ways to pay for the estimated $6 billion cost of a one-year extension of the loan rates, which otherwise will double on July 1 to 6.8 percent.

An S-Corporation does not pay corporate taxes but passes income through to the individual shareholders, who can report it as profits rather than wages in order to lower their tax burden.

It is sometimes called the "John Edwards" loophole after the former Democratic vice presidential nominee, who formed an S-Corporation in the 1990s when he was a trial lawyer.

(Reporting by Jeff Mason; Editing by Jackie Frank)

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Monday, April 23, 2012

Reuters: Small Business News: Analysis: Smaller managed futures funds tempt investors

Reuters: Small Business News
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Analysis: Smaller managed futures funds tempt investors
Apr 23rd 2012, 11:50

By Claire Milhench

LONDON | Mon Apr 23, 2012 7:50am EDT

LONDON (Reuters) - Smaller managed futures funds able to exploit niche commodity markets and the most volatile conditions are increasingly likely to win assets from investors disappointed with returns from the big trend-followers that dominate the industry.

Managed futures, or commodity trading advisers (CTAs), attracted a wave of assets in 2009 after performing well during the 2008 financial crisis.

Mainstream institutional money flooded into some of the best-known of these small independent asset managers, so that 60 percent of total CTA assets are now with the top 10 players.

But since 2009, industry performance has been patchy as traditional trend-following models have struggled in range-bound markets in which it is hard to gain traction.

Studies have also shown that as funds grow and attract assets from more conservative pension schemes and insurance companies, performance erodes. Managers become more risk averse and too big to effectively exploit opportunities in smaller futures markets because of the limited liquidity there.

"Large or small shouldn't define the strategy out-turn but in reality it does," said John Godden, chief executive of IGS, an adviser in the alternative investment space.

He argues that an investor using just the big trend-followers will experience a high degree of correlation in their managed futures portfolio: "They are using a lot of the same tools at the same time in the same way on the same markets."

Godden said investors need to look in different corners for real decorrelation: "Getting actual commodity plays into place is something people need to be doing. There is a feeling that they have been slightly misled in terms of what part commodities are playing in these funds."

WHAT'S IN A NAME?

Despite the CTA label, many of the biggest funds generate most of their returns from currencies, interest rates and equities futures. Their size prevents them from generating meaningful returns from smaller, niche commodity markets such as cocoa and sugar, where they risk moving the market against them.

"Often the smaller managers can spend more risk budget in some of the smaller commodities markets," said Matthew Roberts, a senior investment consultant at Towers Watson.

"The larger managers may be more focused on fixed income and currency markets."

Jan Auspurg, managing director of AQ Advisors, said that smaller funds, like his Aquila Capital Spectrum Fund, which has some 180 million euros under management, are better able to exploit commodity market signals. Energy was the biggest contributor to the fund's returns in February, for example.

"The big funds recognize that these strategies work but as soon as they reach a certain size they have to stay away from most commodity contracts, because they would be the market themselves," he said.

The biggest funds also tend to attract the biggest institutional investors but this presents its own problems. Conservative pension funds and insurers have strict rules around risk exposure and cannot tolerate huge drawdowns.

"Institutions prefer lower volatility strategies, which don't have the same upside benefits but also don't have the downside - ultimately it is not as good," said Godden. "Those institutional, slightly sanitized versions don't do the job when you need it."

A study by Attain Capital Management in August 2010 found that as assets grow, returns diminish, going from an average of 22 percent a year with less than $250 million under management, to 9 percent when strategies grow to over $1 billion.

An IGS research paper looking at performance from November 2007 to February 2009 also found that many traditional CTAs scaled back their positions when volatility spiked. "A lot of CTAs pull in their horns at these moments," Godden said.

CHOPPY WATERS

One of the biggest problems for CTAs is that their trend-following strategies, which account for the bulk of the industry, have struggled in choppy, sideways markets where few trends establish themselves long enough for managers to put on sizeable positions.

Enter the smaller multi-strategy funds hoping to capitalize on investor disenchantment. The AC Spectrum Fund has had decent returns since its launch in May 2011, up 7.58 percent last year when the Barclay CTA Index was down 3.09 percent as trend-following strategies struggled.

Auspurg attributes the outperformance to the returns generated by the fund's carry and correlation strategies. The latter examines momentum in individual contracts and asks if this is related to momentum in other markets over 24-48 hours.

"We have determined that some markets are leading others. These are larger markets and we assume a slightly quicker information diffusion," he said.

Managers who outperformed in volatile months all point to the value of using intraday timeframes or shorter term systems.

"In 2011, the quicker systems had an advantage because they could follow these relatively rough times in a better fashion," said Auspurg. "If you have a long system dominating your trend model then you have to stay in and suffer all the volatility."

But some managers are going further. Dissatisfied with the performance of its Rochester strategy, Reech AiM Partners launched Quantik in February. This uses a model that aims to adapt to changing market conditions by prioritizing the most successful sub-strategies and sidelining those that do not work.

"We have seen in 2009 and last year that unless you could adapt quickly, your models didn't work," said CEO Christophe Reech. "We are in a different world … it can change extremely quickly, so surviving means adapting."

(Reporting by Claire Milhench; additional reporting by Eric Onstad, editing by William Hardy)

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Friday, April 20, 2012

Reuters: Small Business News: Entrepreneurs find cash in trash

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Entrepreneurs find cash in trash
Apr 21st 2012, 05:05

EcoScraps (L-R) co-founder Craig Martineau, co-founder Dan Blake and former colleague Brandon Sargent look at mulched food at the EcoScraps facility in Salt Lake City, Utah, in this handout photo taken in 2011. REUTERS/Handout/EcoScraps

EcoScraps (L-R) co-founder Craig Martineau, co-founder Dan Blake and former colleague Brandon Sargent look at mulched food at the EcoScraps facility in Salt Lake City, Utah, in this handout photo taken in 2011.

Credit: Reuters/Handout/EcoScraps

By Christina Hernandez Sherwood

Sat Apr 21, 2012 1:05am EDT

Some entrepreneurs across the country are building businesses based on the belief that garbage -- once destined to rot in a landfill -- can be repurposed into profitable products.

Americans produced about 250 million tons of trash in 2010, recycling and composting about 34 percent of that total, according to the U.S. Environmental Protection Agency. Now, thanks in part to a sour economy and growing environmental awareness, a few businesses are looking for ways to turn more of the trash destined for landfills into viable products.

For Dan Blake, a former Brigham Young University student and now CEO and co-founder of the startup EcoScraps, the idea for a business came when he couldn't finish his French toast at an all-you-can-eat buffet. He says he realized how much food is wasted at a single restaurant -- and how much it costs for garbage haulers to truck away the scraps. The EPA estimates that 33 million tons of food was trashed in 2010. Because food is among the heaviest waste -- and garbage tipping fees are based on weight -- it's costly to toss old edibles.

Coming from an entrepreneurial family, Blake sensed an opportunity. "A business that doesn't have to buy materials should, in theory, have really good margins," he said. Blake started dumpster diving, collecting food to compost in his apartment's parking lot. A university lab did soil analysis to find the best combination of nutrients for fruitful compost. It wasn't long before Blake and his partners dropped out of school to pursue EcoScraps full time.

Launched in 2010, the business turned profitable a few months ago and now sells its compost and potting soil in Utah, Colorado, Arizona and New Mexico. EcoScraps has 25 employees and declined to disclose revenues. Blake attributes some success to EcoScraps' money-saving model. Food waste, often from grocery stores and farms, is hauled to the company's compost facilities for a discounted tipping fee. The savings is passed to consumers, who can typically buy EcoScraps products for less than other organic compost and soil. But just as with traditional trash hauling companies, transportation costs are high.

"Transportation is a killer," says Blake. "We spend a ton of our time figuring out how to cut down on those costs."

In the nonprofit sector, an Orlando startup is reusing discarded hotel waste. Clean the World partners with major hotel chains like Walt Disney Hotels and Starwood, and they recently secured a partnership with InterContinental Hotels Group, to collect thousands of bars of used soap every day. Gathered by housekeepers and shipped to collection centers, soap is sterilized, melted and reshaped into a new bar.

Founders Shawn Seipler and Paul Till say the inspiration for Clean the World struck in a Minneapolis hotel room. Curious about the fate of his half-used soap, Seipler called the front desk, and was told it was thrown away. "There's this huge amount of trash," Seipler said. "What could we do with it?" After ruling out the idea of selling recycled soap, they settled on a nonprofit model with a dual mission: divert waste from landfills and improve health conditions globally by distributing soap to those in need.

Clean the World charges hotels a monthly fee of 65 cents per room. As part of the deal, hotels receive communication materials touting their participation in the program. Since its inception in 2009, the nonprofit says it has distributed more than 10 million bars of soap to 45 countries -- and diverted more than a million pounds of landfill waste.

Houston-based RecycleMatch is also building a business from trash. The company is testing software that lets businesses run public or private online auctions in an effort to make the most money for their manufacturing byproducts. Two businesses, Shaw Industries and Progressive Waste Services, are kicking off the pilot program, said RecycleMatch founder Brooke Farrell. With the software, she said, "they can manage all the byproducts in one platform with tons of flexibility."

A former consultant at trash-hauling giant Waste Management, Farrell was inspired to start RecycleMatch when she noticed small companies repurposing manufacturing materials. She loved the idea, but wanted to see it scale up. "Instead of saying, ‘I'm going to create bathmats out of football parts,'" Farrell said, "I wanted to find a technology that could help people achieve scale faster."

During the last few years, Farrell said, companies have come to better understand the potential for their manufacturing waste to be repurposed into an ongoing revenue stream. "They see waste material as an opportunity instead of a cost," she said.

(Editing by John Peabody)

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Reuters: Small Business News: Management Tip of the Day: Stop trying to delight

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Management Tip of the Day: Stop trying to delight
Apr 20th 2012, 13:07

BOSTON | Fri Apr 20, 2012 9:07am EDT

BOSTON (Reuters) - Customers mostly don't want to be "delighted" in some contrived manner, but instead want quick responses and solutions to their problems, says Harvard Business Review.

The Management Tip of the Day offers quick, practical management tips and ideas from Harvard Business Review and HBR.org (www.hbr.org). Any opinions expressed are not endorsed by Reuters.

"The notion of going above and beyond customer needs is so entrenched that managers rarely question it. But delighting your customers may be a waste of time and energy.

In fact, most customers just want simple, quick solutions to their problems, and your company should make that possible.

Think about the service initiatives you have underway. Question whether they are focused on reducing customer effort or adding unnecessary bells and whistles. Start with frontline employees since they likely interact with customers the most. Make sure they have the skills, permission, and the incentive to reduce customer effort."

- Today's management tip was adapted from "Stop Trying to Delight Your Customers: The Idea in Practice" by Matthew Dixon, Lara Ponomareff, and Anastasia Milgramm.

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Thursday, April 19, 2012

Reuters: Small Business News: Management Tip of the Day: Practice being a leader

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Management Tip of the Day: Practice being a leader
Apr 19th 2012, 11:11

BOSTON | Thu Apr 19, 2012 7:11am EDT

BOSTON (Reuters) - To practice leadership in your life, seize opportunities to make and learn from decisions, whenever and wherever they arise, says Harvard Business Review.

The Management Tip of the Day offers quick, practical management tips and ideas from Harvard Business Review and HBR.org (www.hbr.org). Any opinions expressed are not endorsed by Reuters.

"Leadership is not an innate trait that you're born with. It can be learned. The key is to practice before you have the official title.

Start by focusing on the choices you make now, such as who to put on your team or what vendor to use for your project. Recognize that you likely don't know everything. Making decisions based on incomplete information is a skill that every leader must master.

Once you've acted, ask yourself: Was that the right decision? Could you have done something differently? This will get you comfortable with making decisions, acting upon them, and reflecting on their outcomes. Then, learn from your inevitable mistakes.

You will build knowledge and skills as you work up to the larger decisions with broader consequences that all leaders have to make."

- Today's management tip was adapted from "Wilderness Leadership â€" on the Job" by John Kanengieter and Aparna Rajagopal-Durbin."

(For the full post, see: here)

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Monday, April 16, 2012

Reuters: Small Business News: Corrected: In Silicon Valley, designers emerge as rock stars

Reuters: Small Business News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Corrected: In Silicon Valley, designers emerge as rock stars
Apr 16th 2012, 22:54

Facebook design chief Kate Aronowitz poses for a photograph at her desk at the company's headquarters in Menlo Park, California March 2, 2012. REUTERS/Robert Galbraith

1 of 6. Facebook design chief Kate Aronowitz poses for a photograph at her desk at the company's headquarters in Menlo Park, California March 2, 2012.

Credit: Reuters/Robert Galbraith

By Gerry Shih

SAN FRANCISCO | Mon Apr 16, 2012 6:54pm EDT

SAN FRANCISCO (Reuters) - Five years ago, Justin Edmund arrived at Carnegie Mellon University, a floppy-haired freshman, with artistic talent and dreams of joining a venerable design firm like IDEO or Frog. But during his sophomore year, a recruiting pitch from a Facebook employee turned his head, and prompted a detour of his ambitions.

"It didn't even occur to me that working at a tech company was something I could do," Edmund said. "I switched my trajectory completely."

So, in 2010, Edmund interned on Facebook's burgeoning design team, and, after graduation, landed a job at Pinterest. There, at just 21, he has played a central role in building the virtual scrap-booking site into one of the hottest startups on the Internet.

Edmund isn't alone. Inspired by the legacy of Steve Jobs and lured by the promise of the current tech boom, young designers are flocking to Silicon Valley, where they're shaking up a scene long dominated by engineers and programmers.

The new breed of "user experience" designers - part sketch artist, part programmer, with a dash of behavioral scientist thrown in - are some of the most sought-after employees in technology. Entry-level interactive designers at startups are commanding salaries easily topping $80,000, almost twice the median pay for primarily print designers of about $45,000, according to a recent survey by the American Institute of Graphic Arts.

IN-HOUSE TALENT

Top venture capital firms, from Google Ventures to Andreessen Horowitz, are hiring in-house designers to help the young startups in their portfolios. One angel investor has even established a Designer Fund to identify startups driven by design talent.

To feed demand, new digital design programs have sprouted over the past two years, at both elite engineering universities such as Stanford, and art schools like the California College of the Arts. The School of Visual Arts in New York has seen applications for its digital design program soar by 43 percent since its inception in 2009.

Indeed, the flourishing of digital design reflects the Valley's evolution, entrepreneurs and investors say.

In the latest generation of innovation, heavily concentrated in applications for mobile devices and social networks, and relying on ever-cheaper cloud-computing services, success depends not on whiz-bang technology, but rather, on a subtle sense of how to make features useful and engaging.

The most recent example is Instagram, the slick photo-sharing app that was snapped up by Facebook earlier this week for $1 billion. The 12-person company's founding duo includes Kevin Systrom, who majored in Management Science and Engineering at Stanford, and Mike Krieger, who describes his background as "Human-Computer Interaction and User Experience."

"There's a growing recognition that it's critical for a company's first employees to be people with great design sense," said Eric Feng, a founder of Erly, an evite- and photo-sharing company, and a former partner at venture capital firm, Kleiner Perkins Caulfield and Byers. "That's true even if you look at larger companies like Google and Facebook, who have moved in that direction."

To be sure, engineers still occupy a rarefied perch at the top of the Silicon Valley hierarchy, and are the target of the fiercest recruiting battles.

VISUAL APPEAL

But even Facebook, famous for a culture that glorifies the "hacker way," now talks of integrating "design thinking" into its products and has steadily beefed up its design studio.

From her team's brightly-colored studio in Facebook's Menlo Park offices, design chief Kate Aronowitz dispatches designers who are paired with an engineer, a product manager and sometimes a researcher to conceive new products or improve features such as user profiles or messages.

The embrace of design starts at the top with CEO Mark Zuckerberg, who has stressed the importance of building a crack design team, Aronowitz said.

In a highly competitive recruiting climate, it's not uncommon for even Facebook to encounter top design talent playing hard to get. For the toughest cases, Aronowitz plays her trump card: She asks Zuckerberg to place a personal phone call.

"When they're not returning my email, that tends to work," said Aronowitz, who herself was poached by Zuckerberg from LinkedIn in 2009. "I'm lucky to have that in my back pocket."

The spotlight fell squarely on the design team last November, when Facebook credited Nicholas Felton, one of its data-visualization experts, with conceiving the Timeline interface which has become one of Facebook's most significant overhauls in recent years.

For fledgling startups, it's even more critical to understand how design affects user behavior, said Dave McClure, an angel investor who cited the example of Mint, an online tool for managing personal finances acquired by Intuit in 2009.

Jason Putorti, the startup's designer founder, lent the Mint interface "much more warmth," which was crucial for a startup that dealt with sensitive information, McClure said. Design, he added, "made the app feel trustworthy, comforting, functional."

Last year, McClure put down money to create the Designer Fund, a program that identifies entrepreneurs with strong design backgrounds and offers seed money and mentoring from experienced founders like Putorti. The fund, headed by Enrique Allen, a 25-year old graduate of Stanford's design school, has partnered with more established venture investment firms like Khosla Ventures, Andreessen Horowitz and Kleiner Perkins.

"We're reshaping a lot of how you build a company," McClure said. But, he added, "there's still a resource and talent shortage" for interaction designers.

SCOUTING FOR ARTISTS

Finding exceptional design talent, though, is not a simple matter. Last year, Kalvin Wang, the co-founder of Ridejoy, a service that arranges carpools, said he spent several "incredibly hard" months recruiting an interaction designer.

Dirk Cleveland of Riviera Partners, a Silicon Valley headhunting firm, said startups have trouble finding a design "unicorn" - the rare designer with the interactive digital skills that many app startups require.

"It's literally the toughest position to fill right now," Cleveland said. "That equation of supply and demand is out of balance. Engineering education has progressed, and startups have learned to do more with limited resources, but I don't think that's the case for design."

Even though he sifted through 150 resumes, Wang said, "There are so many startups and so many tech companies that are snapping them up. It's slightly ridiculous."

Ridejoy interviewed candidates from Toronto, New York and the Midwest, and ultimately hired a Parsons School of Design graduate living in Omaha.

"You do really have to look outside Silicon Valley," Wang said. "For Bay Area designers, they have literally hundreds of options and they're going to work at a place where they know people, or a big name like Google."

The sizzling job market hasn't escaped the notice of design schools across the country.

Liz Danzico, founding director of the School of Visual Arts' masters program in Interaction Design, said the original goal was simply to understand where the new innovation economy field was going. "Experience is now the material, not ceramic or plastic," she said.

Still, Danzico expected most graduates to stay in New York â€" the traditional hotbed of design. She was "really surprised" to find, in a survey of her first graduating class, that almost half ended up on the West Coast at companies including Apple, Facebook, Twitter and Yelp.

Meanwhile, at Carnegie Mellon, Kelly Lau-Kee, a junior industrial design major, said "there's huge buzz generated by the students, the employers, even the professors" about the prospect of work in Silicon Valley.

On any given day, Lau-Kee said, she'll spot pictures on Facebook and Instagram shared by friends currently employed by startups. They paint a heady picture of life in California, of snazzy workspaces, hip coworkers and sunshine spilling into every frame.

"A lot of people like the mentality of work and play, which the startups advertise really well," she said. "It's a culture we really want to check out."

Wayne C. Chung, the chair of Carnegie Mellon's industrial design program who taught Edmund, the young star at Pinterest, said the new economics of the profession was evident on college grounds. Traditional design firms, buffeted by the last recession, have noticeably cut back on recruiting, while tech companies have maintained a visible presence on campus, he said.

After this semester, Chung expects another sizeable contingent of his graduates to make their way West to Silicon Valley.

"In their hearts and eyes," Chung said, "they don't see anything else as nearly as exciting.

(This has been corrected in paragraph 11 to say that Eric Feng is a founder of Erly (not Erly and Hulu); delete "and Chad Hurley, of Youtube" in paragraph 21 because he is not a participant in the Designer Fund)

(Editing by Jonathan Weber and Bernadette Baum)

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