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The Entrepreneur Factor

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Inspiration often strikes at odd times. This was definitely the case for Maxine Clark, founder of Build-a-Bear. Clark was an executive at May Co. (know Macy’s) before being promoted to president of Payless ShoeSource, one of the company’s discount brands, in 1992. Although Clark was financially satisfied, she realized her job was lacking any creativity. Clark left the company in 1996 in search of a more fulfilling job.

Clark was in search of Ty Beanie Babies with her friend’s kids one day, but they couldn’t find any Beanie Babies the kids didn’t already have. Katie, her friend’s daughter, picked up one of the stuffed toys and said we could make one of these. This suggestion set a light bulb off in Clark’s brain. While young Katie envisioned making a small stuffed animal at home, Clark set her sights bigger, envisioning a store that would allow kids to create their own customized stuffed animals.

Although most of the parents she discussed the idea with didn’t see the appeal, the kids were ecstatic about the idea. Clark formed a Cub Advisory Board, made up of children who gave their opinions about the products and services Clark wanted to offer. After withdrawing $750,000 from her retirement savings, Clark opened the first Build-a-Bear Workshop at the St. Louis Galleria. On opening day, the lines stretched out the door.

Build-a-Bear started with just bears and a variety of clothing, but later added shoes and other accessories, as well as a plethora of different plush animals. The company has licenses with Disney and several major league sports teams so shoppers can make Disney-themed characters or dress their stuffed animals in official sports gear.

Clark added a few investors in 1998 and 1999, but had to start turning investors away because the company didn’t need their money. Today, there are more than 150 Build-a-Bear Workshops in 19 countries. The majority of their stores are located in major shopping malls within the U.S., however, the company is rapidly expanding overseas and into smaller markets and tourist destinations.

 

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Economists believe that the recent drop in entrepreneurship experienced in the U.S. is yet another sign that the economy is on the road to recovery. People that started new businesses because of necessity are now returning to jobs offering wages or a salary since they offer stability and additional benefits.

In 2011, only 320 of every 100,000 adults started a business, down slightly from 340 in 2010, according to a report by the Kauffman Foundation. This trend is reflected in all demographics and in all types of industries. The report also revealed that older Americans, those between the ages of 55 and 64, form a larger share of the entrepreneurs in America compared to 1996. Immigrants are also more likely to start businesses, with an average of 550 in 100,000 starting their own businesses in 2011. The entrepreneurship rates for Asians, African Americans and Hispanics is also higher than it was 15 years ago, as is the number of entrepreneurs without high school diplomas.

University of Southern California graduates Ben Forman and Geoff Larson debuted their invention, the Zboard, at the South by Southwest conference in Austin. The two dreamed up the electric skateboard as a senior project for one of their mechanical engineering classes. Riders shift their weight forward to accelerate or backward to break.

The entrepreneurs blew through most of the $50,000 in personal funds they had to develop the board before turning to Kickstarter, a Web site that allows people to raise money for projects. Four days after posting a video to Kickstarter, the duo had the $10,000 they were seeking and within three weeks, they were up to almost $190,000. People who sent money were eligible fore free shipping or other incentives. 

The pair also submitted a video to Startup America’s South by Southwest Pitch Contest and won, which netted them airfare to Austin, passes to attend the show and an opportunity to pitch their idea to attendees. The price of a Zboard starts at $500 and the company already has 200 pre-orders. The first boards should begin shipping in April.

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Tiffany Krumins was a nanny caring for special needs children and children who had been diagnosed with cancer when she came up with the idea for a new product. Her product, AVA The Elephant, is a talking, elephant-shaped medicine dispenser for children. The idea is that AVA will reduce children’s fears about taking medications. Krumins applied for a spot on the ABC television series, “Shark Tank,” to pitch her idea to a panel of investors.

The idea came when Krumins was caring for a young boy with Downs Syndrome. Cutting the boy’s hair was extremely difficult, so Krumins lined up some toy animals around the kitchen table and incorporated them into the haircut. The animals calmed the child down and resulted in a less problematic haircut. After that experience, Krumins was the only one who could cut the boy’s hair. She experienced similar issues another day when she and his mother were trying to administer medicine to the child. That night, she created an animal out of sponges and fabric, using the device from a recordable greeting card to record her voice.

Krumins’s product idea caught the eye of Barbara Corcoran, the show’s real estate mogul. Corcoran offered to invest $50,000 in Krumins’s company. In exchange for the investment, Corcoran wanted a 55 percent stake in the company, which also made her a  majority owner. Although this news came as a surprise to Krumins, she accepted the offer. Neither Krumins nor Corcoran knew the business, so it was a learning experience for both.

Shortly after appearing on “Shark Tank,” Krumins was diagnosed with thyroid cancer. She was forced into isolation while she received her chemotherapy, which gave her additional time to work on her business plan. The experience also helped Krumins empathize with children with long-term illnesses and cancer.

Currently, AVA The Elephant sells for $9.99 at more than 10,000 retail outlets in five countries, including CVS, Toysrus.com and Kroger. The company is anticipating sales of more than $1 million for 2012.

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Starting your own business takes more than just a great idea. It takes drive and determination too. Some successful entrepreneurs have even been successful by combining someone else’s idea with their drive and determination. Take entrepreneur Dalia Almanza-Smith, for example. While honeymooning on the southeast coast of Spain, Almanza-Smith stumbled upon a rack of colorful postcards at a restaurant. She picked a few up and realized they were advertisements and the idea hit.

She and her husband lounged on the beach during their honeymoon and worked on a business plan that would introduce these postcards to consumers in America. When they returned from their honeymoon, Almanza-Smith quit her job and launched Frankie Freecards.

Almanza-Smith visited restaurants and other local businesses and asked them to put her racks on their walls, then visited local businesses and offered free or low-cost advertising to get the ball rolling. Within a few short years, the company had clients in several major cities, including Chicago, Los Angeles, New York and San Francisco along with almost $5 million in revenue.

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Timing is essential when starting a new business. You need to make sure the service or product you plan to offer is in demand, but you also need to make sure the market isn’t already saturated or you could lose out to your competition. Introducing a product or service too early could also be detrimental to the success of your company. This could have been the case with start-up company Shazam. The company itself was started in 1999 in London by Chris Barton, Philip Inghelbrecht, Dhiraj Mukherjee and Avery Wang. Shazam’s service identifies songs that cell phone and smart phone users capture using their phones and provides the title, artist and purchasing information.

Shazam launched its first identification service in 2002, long before Apple introduced the iPhone and the smart phone industry took off. The service was only available to cell phone users in the United Kingdom. In order to use it, customers had to dial a four-digit code and hold the phone up to the speaker to capture a portion of the song. The service then matched the snipped to songs in their database of more than 11 million songs based on its acoustic fingerprint. The name of the song and the artist were then sent back to the customer via text message.

With the smart phone app market as hot as it is, Shazam now also offers an app for iPhone, Android and even Java compatible smart phones. Using the app, the customer simply launches the app and captures a portion of the song. The app then analyzes the song and reports the name of the song and the artist immediately. Links to iTunes and Amazon.com’s MP3 store are provided so users can purchase the song. A link to the video on YouTube is also provided if the video is available.

The company currently has more than 180 million users around the world and a staff of 150. They offer two different apps for consumers to download, one of which is a free app that allows users to tag up to five songs a day. The paid app costs around $5 or $6 and allows unlimited song tagging.

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Military veterans are nearly 50 percent more likely to start their own business than those without active-duty military experience. According to census data collected in 2007, veterans owned 2.4 million businesses, which represents 9 percent of all businesses in the U.S. These businesses generated more than a trillion dollars in receipts and employed more than five million people.

One such veteran/entrepreneur is Robert Dyer, a Marine Corps aviation officer, developed his idea for a nutritional supplement that could provide enough nutrients for a soldier while sitting around a campfire with his Marine and Navy buddies in Afghanistan. While on deployment, Dyer developed the idea further, with the blessing of his buddies, some of whom are minority partners in the venture. When he returned from deployment in late 2009, he put more effort into the fledgling business and the Ruckpack was born. Each two-ounce Ruckpack provides an energy boost as well as a whole host of vitamins, electrolytes and other ingredients to help soldiers stay in peak mental and physical performance during missions.