Risky Business
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Did 'Craigslist Killer' Reaction Make Us Less Safe?
Continue reading… 8 CommentsThis Slate piece lays out some more interesting implications of the recent pseudo-crackdown on Craigslist by state attorney generals. (See previous post). I say "pseudo" because no law was actually passed. The mere threat of action was enough to make Craigslist agree to the AGs' demands.
Melissa Gira Grant argues that the ban on "erotic services" ads sought by the attorney generals has actually made harder their job of keeping the public safe:
The most significant difference between Craigslist and a brothel is that the former voluntarily opens its "black book" of clients to police. The records Craigslist maintains on its users played a critical role in apprehending the so-called Craigslist Killer. The Boston Police Department reported that "Craigslist was cooperative in identifying and locating" accused murderer Philip Markoff; Craigslist spokeswoman Susan Best notes that "a digital trail left by those breaking the law" allows Craigslist to support criminal investigations in a way, say, a newspaper cannot. In the case of Markoff, what could have become a series of murders was put to a quick halt once his inbox was examined. Boston cops said they relied on these "high-tech" solutions as much as "shoe-leather" investigation. The lesson here for those in law enforcement—and a lesson that Richard Blumenthal fails to understand—is that Craigslist is an ally, not a perp.
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Sonia Sotomayor: Where She Stands On Business
Continue reading… 7 CommentsHere's what seems to be the consensus opinion about whether or not Sonia Sotomayor will be good for business: Um, maybe?
When it comes to small businesses, law prof Richard Epstein points to one case that he says should have business owners shaking in their boots. It has to do with an entrepreneur who had bought land to build a CVS franchise, and then ran into trouble:
The case involved about as naked an abuse of government power as could be imagined. Bart Didden came up with an idea to build a pharmacy on land he owned in a redevelopment district in Port Chester over which the town of Port Chester had given Greg Wasser control. Wasser told Didden that he would approve the project only if Didden paid him $800,000 or gave him a partnership interest. The "or else" was that the land would be promptly condemned by the village, and Wasser would put up a pharmacy himself. Just that came to pass. But the Second Circuit panel on which Sotomayor sat did not raise an eyebrow. Its entire analysis reads as follows: "We agree with the district court that [Wasser's] voluntary attempt to resolve appellants' demands was neither an unconstitutional exaction in the form of extortion nor an equal protection violation."
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Twitter Still Not Sure How To Make Money
Continue reading… 5 CommentsAn overrated business idea: start a website that doesn't sell anything, and just hope to get tons of traffic. It's very difficult to get the kind of massive traffic needed to turn a profit.
But even if you get millions of views, there's no obvious answer about what to do next. Twitter is one of the most highly-viewed web ventures--from 1.6 million users last year to 32.1 million currently--but as an article in today's Journal examines, they're still trying to figure out a business model.
That's not to say that the uncertainty is because Twitter can't make money. It's clear that it can always sell itself off for an impressive sum:
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'Sweet Home Chicago' Not So Sweet For Entrepreneurs
Continue reading… 3 CommentsWe have some data on the best and worst states to start a business. But local and municipal laws are often more important than state laws. So what about the best and worst cities in which to start a business? I'm not aware of any studies that compare the various business regulations of cities across the board. But a recently released study from the Institute for Justice makes an interesting case that if there were such ranking, the city of Chicago would be at or near the bottom.
According to the study, "the overlapping rules of the city of Chicago and the state of Illinois create a matrix that is so confusing and nonsensical that it often seems designed to stop entrepreneurs in their tracks." What are some examples of these byzantine regulations?
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Small Business Blogging Gets A Boost
Continue reading… 1 CommentA release from marketing advisory firm Warrillow & Co. (not available online as far as I can tell):
While celebrities and the under 25-year-old population are flocking to Twitter, small business owners are just realizing the full potential of blogging. Use of blogs for specific business purposes more than doubled in the last 12 months, and 40% of small business owners now use this medium in their business.
The April 2009 survey that produced this finding was based on a survey 1210 U.S. small businesses with less than 100 employees.
Note that when they say "use," they don't mean actual blogging by small-business owners; they mean readership of blogs by small-business owners. But it's probably reasonable to think that more business owners reading blogs will lead to more tempted to write their own blogs.
But small businesses are overall still way behind the curve on Web 2.0--they still haven't mastered Web 1.0. Warrillow previously published a survey that found that only 41 percent have webpages. Read more here.
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E-Cigarette Update
Continue reading… 58 CommentsMy last post on the FDA and e-cigarettes promised an update. Well, I haven't seen any official statements from the FDA about any changes to their policy on e-cigarettes. But some reports show that the policy is and has effectively been a ban. For example, this:
A Florida company that imports and distributes so-called electronic cigarettes filed suit yesterday against the Food and Drug Administration, claiming the agency is illegally blocking imports of its product into the United States.
The suit, filed by Smoking Everywhere in the U.S. District Court for the District of Columbia, argues that the FDA has overstepped its regulatory authority by banning shipments of the devices and insisting they need to go through the drug approval process.
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"Job Creation Through Entrepreneurship" Act: Nice Name, But Where's Substance?
Continue reading… 3 CommentsCongress today is considering the Job Creation Through Entrepreneurship Act of 2009. Check out the bill here.
I don't believe that "job creation through entrepreneurship" is something that can be legislated into existence. This bill does nothing to change that belief.
It mostly has unobjectionable provisions like more support for veteran-owned small businesses, and a greater SBA commitment to promoting Native American businesses. Then there's this:
Directs the Administrator to contract with third-party vendors for entrepreneurial distance learning content and the development of communications technology that can distribute such content to potential and existing entrepreneurs throughout the United States.
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Good News From Nouriel Roubini
Continue reading… 1 CommentIn the past year or so, it's been hard to read the name "Nouriel Roubini" without it being preceded by "economic doomsayer." So I thought it was interesting that at the end of this lengthy and interesting New Republic profile of Roubini there are some words of hope from the economist. He says the recession may have at least one positive side effect:
Given the right changes, perhaps the United States can develop with the productive long view in mind, and maybe its human talent can be spread more equitably. "When you have more financial engineers than computer engineers, you know that the brightest minds have gone into something where, probably, the margin was excessive," he had told me earlier. "Maybe some of these bright people are going to do something entrepreneurial, more creative, or go into government. I think that's actually a good change. The transition is painful, but the result may be good."
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Gay Marriage Is Anti-Small Business, Says Michael Steele
Continue reading… 50 CommentsI might be a little late here, but I just have to comment on this story.
GOP Chairman Michael Steele explained in a recent speech how his party should "recast" the gay marriage issue as not just a social issue, but a business issue:
"Now all of a sudden I've got someone who wasn't a spouse before, that I had no responsibility for, who is now getting claimed as a spouse that I now have financial responsibility for," Steele told Republicans at the state convention in traditionally conservative Georgia. "So how do I pay for that? Who pays for that? You just cost me money."
It's almost unfair to comment on this because it's so hard to figure out what Steele even means here. I guess he's saying that if a small-business owner has gay employees who suddenly are able to get married, that owner will have to pay higher benefit costs, such as higher health-care premiums to insure the spouse.
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Libertarians For Taxation
Continue reading… 2 CommentsDespite the fact that he writes for one of the best-known libertarian publications, Reason, Nick Gillespie isn't afraid to admit that some new taxes would be better than the status quo: legalize and tax drugs, prostituion, and gambling, he says in the New York Times. (See my post on California's still-pending proposal to legalize and tax marijuana).
But, as Gillespie points out, there are bigger economic reasons to legalize black markets than just new tax revenue.
In terms of economic stimulation and growth, legalization would end black markets that generate huge amounts of what economists call “deadweight losses,” or activity that doesn’t contribute to increased productivity. Rather than spending precious time and resources avoiding the law (or, same thing, paying the law off), producers and consumers could more easily get on with business and the huge benefits of working and playing in plain sight.
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Chrysler Dealership Closings: Dealer Says Another Reason Not To Buy Chrysler
Continue reading… 5 CommentsYesterday Chrysler announced it will close 789 of its 3,181 dealers across the country. The Washington Post says that Chrysler is doing this to "improve their business and image."
One dealer falling victim to these cuts hopes the move will actually worsen the company's bleeding and further tarnish its public image.
Via Fark, there's this report from the Oregonian:
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Utah Lifts Key Alcohol Regulation On Restaurants
Continue reading… 1 CommentIs Utah trying to change its notoriously conservative reputation? This week the Utah legislature is enacting a law that one local news source calls "the biggest overhaul in state alcohol reform in 40 years."
Up until May 12, restaurants in Utah had to set up barriers between customers and bars. This partition became known as the "Zion curtain." The new legislation mostly lifts that requirement, but mixed drinks must be prepared in a separate, out-of-view area, ostensibly so minors cannot see.
Also part of this legislation is the end of another requirement that I blogged about earlier.
This change will probably make life easier for restaurant managers in Utah, as one attests in this AP report:
"It's just kind of pointless to have clear glass in front of us. It really takes away from the personal experience of our customers," said Abbie Daggs, a manager at Stella Grill in suburban Salt Lake City.
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Craigslist To Stop "Erotic Services" Ads
Continue reading… 3 CommentsPressure from various state attorney generals has proven too much for Craigslist to bear. Yesterday the online classifieds site announced that it will no longer accept "erotic services" ads, and will remove the category entirely next week. What will replace that category is an "adult services" category that will contain "postings from legal adult service providers."
Craigslist will have to police this category to keep the attorney generals happy. Online businesspeople should take note that the Internet is quickly becoming less of a wild west than it used to be.
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Bailout Extended To Small Banks
Continue reading… 1 CommentAfter months of showering "too-big-to-fail" banks with money, Treasury is going to increase capital assistance to banks with assets under $500 million. The New York Times points out one potential problem:
More than 300 small banks are already participating in the federal program, although in recent months a growing number has sought to withdraw because of stringent requirements. So it is unclear whether the expansion will garner many new takers.
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3 Ways To Save The Media--Or Not
Continue reading… 1 CommentPeter Osnos at the Daily Beast just wrote an article with a very eye-catching headline: "The Scrappy Entrepreneurs Who Will Save The Media." But after looking at the actual ideas of these "scrappy" entrepreneurs, I worry that the media is in even more trouble than we thought.
1. Buy newspapers out for peanuts; relaunch as public services. Osnos points to a blog post proposing that Minnesota Public Radio buy out the Minneapolis Star Tribune and slowly merge with it.
Me: Sure, maybe this will have to be done. But this is no all-encompassing "save" for journalism. If all of the traditional media became like public radio or PBS, it would be resigning itself to serving only a very specific and limited audience. Obviously, public media can work on a mass scale, as it does in many other countries. But those media sources also have a lack of competition. Many entrepreneurs I'm sure are hoping that the American media does not go that way, and that there are still many profit opportunities to be had.
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Where Your Stimulus Money Is Going
Continue reading… 0 CommentsThe Associated Press breaks down where stimulus transportation dollars are being spent relative to the economic conditions of the area. Some of the interesting findings:
--In low-unemployment counties nationwide, those in the bottom quarter of jobless rates, the federal government is spending about $89 a person compared with $59 a person in the worst-hit areas.
--In counties with the largest populations, the government is spending about $69 a person in areas with the lowest unemployment and $40 a person in places with the greatest job need.
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Jack Kemp Leaves A Small Business Legacy
Continue reading… 11 CommentsFormer Congressman, vice presidential candidate and free-market promoter Jack Kemp died last week. Today, Jim Blasingame, host of the Small Business Advocate radio show (and who I've interviewed in the past) has a nice tribute to Kemp in the Memphis Commercial Appeal.
Jack Kemp cared about small businesses, and he believed in the importance of American entrepreneurship. For those small-business owners who, like me, just want the government to not take too much of our precious capital away in taxes and get out of our way as we attempt to serve customers, create jobs and achieve financial success, we've lost a champion and a friend.
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McDonald's Recession Marketing Strategy: Take On Starbucks
Continue reading… 2 CommentsMcDonald's is one business that has proven somewhat recession-proof. So you might want to take note when they unveil a marketing strategy. As the AP recently reported, that strategy seems to be to target and undercut more luxurious brands--in this case, Starbucks coffee.
The ads portray the drinks as the antidote to a miserable day and aim to get consumers to see the beverages as affordable, quality alternatives to lattes at more gourmet chains like Starbucks Corp.
McDonald's doesn't have to show that they can get you the same bang for less buck. At a time when cutting back is the premium for many consumers, they just need to show that they can give you the bare minimum quality to keep you reasonably happy for a much lower price. That's something that many small-time entrepreneurs can emulate--they tend to be good at doing things similar to the competition, but for less.
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Law Enforcement Officials Step Up 'Craigslist Killer' Criticism
Continue reading… 12 CommentsSince I last blogged about the topic, the situation for Craigslist and the controversy surrounding Philip Markoff's alleged use of the site to find victims has gone from bad to worse. Yesterday, attorney generals from Missouri, Connecticut, and Illinois met with Craigslist representatives to discuss how to "minimize" misuse of the site. Some state officials aren't as friendly--South Carolina Attorney General Henry McMaster sent a letter to Craigslist CEO Jim Buckmaster saying that the company's management "may be subject to criminal investigation and prosecution" unless Craigslist removes all erotic services solicitations from the South Carolina portions of its site by May 15 at 5 pm.
My take: This is a perfect example of politicians trying to "do something" about a problem without really doing anything. Demonizing Craigslist is a convenient way for these attorney generals to look like they are protecting their citizens, when removing these ads, at best, just shifts the problem.
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Small-Business Lending On The Mend?
Continue reading… 10 CommentsCould the federal government's attempts to help out small businesses with the credit crunch be working? An article in today's Wall Street Journal gives some reason to think so:
In February, the latest month for which figures are available, 35% of newly approved 7(a) loans, the most popular SBA loan program, sold on the secondary market, according to the Government Accounting Office. That was up from 24% in January. From September 2007 to September 2008, before the credit crunch, 45% of approved 7(a) loans sold on the secondary market.
When plans were first announced, one SBA lender told me that the flagging market for SBA loans was mainly rooted in the larger issue of banks tightening. Could this increase in SBA loans be evidence that the overall credit crunch is abating?
