Buyer (and Seller) Beware: Crowdfunding

A few weeks ago, I spoke on a panel to entrepreneurs and potential investors about equity crowdfunding. Takeaway: Lawyers are a bunch of downers (which, I guess, is hardly news to most of you). 

First, however, let me begin by acknowledging the wonderful things about crowdfunding:

• If you are a “regular person,” you can now invest on the internet!
• If you have an early-stage company, you can now raise capital on the internet!

Although you may infer from my tone that I’m a skeptic (disclaimer: I may be), I don’t want to detract from the fact that crowdfunding offers another tool for both investing and raising money. And since raising capital is one of the most challenging aspects of being an entrepreneur, having another tool to do so is a good thing. If you are an investor, crowdfunding provides an avenue for directly investing in companies you want to see succeed, which is obviously empowering.

Mattress Buying: A Consumer’s Tale

We’re expecting a new addition to our family in the coming months and have decided that now is a good time to upgrade our queen-sized mattress to a king-sized one.  Right now things are already pretty crowded with my husband, me, our dog and two cats, and we’re aware that adding our new four-year-old son during lazy weekend mornings and bedtime stories could push us over the edge—literally.  It’s been ten years since we bought our last one and the mattress-buying landscape has changed a lot during that time.  

Our last mattress-buying experience consisted of us going into a store and coming out with a much more expensive mattress than we’d planned on (and one which I have not stopped complaining about since the day it was delivered), so I decided to do things differently this time.  We are going to buy a mattress online that comes in a box.  Despite having qualms about not being able to try it out in person, I’ve bought into the line that all the online mattress companies use: how can you really tell by lying on a mattress for 5 minutes in the store anyway?  All the online mattress companies I’m looking at offer long trial periods to figure out if you like it or not.  And what clinched it for me was this: if you return it, you don’t have to figure out how to stuff it back into the box—they’ll come get it from you for free.

Securities and Your Business: An Overview for Beginners

As an entrepreneur with a great new idea, probably one of the last things you want to hear when you’re raising money is: “Oh, and we also need to make sure you’re compliant with securities laws.” It’s yet another hurdle to clear on your way to bringing your idea to market. You know you’re supposed to care about it, but you may wonder how it really has anything to do with your business. 

Let’s break it down: Does your business use other people’s money? If the answer is yes, then securities laws likely apply. 

What is a “security” anyway? This is actually a complicated question that courts have grappled with over the years. 

BEWARE THE SHINY NEW OBJECT

I often suspect that I was born in the wrong generation, and those who know me well would probably agree. Here are some cold hard facts: even though I’m under 40, I generally don’t know any music written after 1950, I only use my smartphone if I have to (and I also leave it at home sometimes), I still text with only one index finger (as opposed to dual thumbs), and I like to print documents out in order to read them. I know. I’m the worst.

But I would just like to point out that, at least as far as the last item on my list goes, there may be some evidence that I’m not destroying the planet by my profligate printing ways.  We are often exhorted to go paperless in order to be more environmentally friendly. (I would also like to interject here that, due solely to my husband’s efforts, I live in a largely “paperless” household.)  As a result, whenever I print something that isn’t absolutely necessary, I’m plagued by mild guilt accompanied by a mental image of clear-cut expanses and little forest animals without homes.

I like you so I’m going to hire you.

Last week I attended a presentation that purported to give you an edge when dealing with others. When I left the presentation, however, I wasn’t thinking about how interesting the topic had been or whether it was something I wanted to implement myself. Because my impression was that the speaker was self-absorbed and a bit of a braggart, despite the compelling nature of the subject matter, I was relatively uninterested in learning more about it. Maybe that’s harsh, but it brought home to me that being “likeable”* when you’re trying to sell something—an idea, a product; really, anything—may be more important that I’d initially thought.  

As a rule (to which there are, of course, exceptions), people will do business with people they like.

Work Environment: Listening to Music

What’s your take on listening to music at work?  I generally don’t listen to music while working but, according to research, perhaps I should.

Here’s the upshot:  Music can help lift your mood.  A good mood has a positive effect on your work. 

To achieve this effect, you should aim for music that puts you in a “mild positive” mood (I guess being “wildly ecstatic” must be too distracting).   A “mild positive” mood is conducive to creativity because it allows your thoughts to be more expansive and influences how your brain organizes thoughts; by negative inference, it must also mean that you’re not overly stressed.  Being stressed can lead to errors.

Repeat Business and Human Nature

How do you keep customers coming back?  For some fortunate companies that produce essential products, provide necessary services, or have long-term institutional clients, this may not be such a front-of-mind issue.  But for the rest, how do you build customer loyalty?

One company, with which I have recent personal experience, has seemingly mastered the art of capturing repeat business.  StitchFix, a five-year-old fashion startup, is a subscription service that, for a $20 styling fee, sends each customer a box of five hand-picked, curated clothing or accessory items based on the customer’s answers to a detailed style profile. If you keep all five items, you get a 25% discount on the entire “Fix” (as StitchFix refers to each box), and if you even just keep one, your $20 styling fee is credited towards that purchase.

The Grit Project: Achieving a Growth Mindset

Apparently I live under a rock. A week ago, while at a conference in New Orleans, I learned that having “grit” and “a growth mindset” are some of the best indicators for potential success. I’ve since discovered that “Grit,” in particular, has recently become a meme in a myriad of contexts including education, parenting, and the workplace.

I’ve always thought that the keys to career success were hard work coupled with a certain amount of intelligence, but according to The GRIT Project, “perseverance and passion for long-term goals” and being “open to increasing one’s innate abilities and talents and believing in the power of effort”—a/k/a “grit” and “a growth mindset”— are far better predictors of success. If you like taking quizzes, you can get your own grit and growth mindset scores on the American Bar Association’s Commission on Women in the Profession’s website. The project aims to give women the tools to help them rise in the legal world, where the leadership is still overwhelmingly male.  

These concepts obviously translate to a wider audience and are useful in many other contexts, too, because doing just about any difficult thing really well requires grit and a growth mindset. In fact, as I started to think about it, it became so obvious to me as to be almost ludicrous that it even needed to be discussed. I mean, of course you need perseverance and of course you need to be interested in learning and believe that your efforts will yield growth in order to be good at something.  

Here’s the thing, though: I don’t think we’ve internalized that as a culture.  In support of my hypothesis, here’s my unscientific and purely anecdotal evidence:

Before I was an attorney, I used to be a professional cellist in a symphony orchestra. As all of my musical colleagues can attest, most people’s immediate reaction upon learning that you’re a classical musician is something along the lines of: “Oh, you’re so lucky!  You must be so talented!” (As an aside, now that I’m a lawyer they add to that: “So what on earth made you want to become a lawyer?”)

The assumption underlying that common reaction is that talent is the primary factor in becoming a professional musician and that it was inherited (and therefore otherwise inaccessible). Sure, a certain aptitude is essential, but honestly, when I look back, I just remember the hours spent practicing every day for decades. Which brings us back to perseverance and passion for long-term goals and being open to increasing one’s innate abilities and talents and believing in the power of effort. Anything difficult requires grit and a growth mindset.  Playing the cello, practicing law, running or starting a business, parenting—you name it.

I have to admit that I struggle with how grit is different than just plain old hard work, but The GRIT Project makes a distinction by stating that grit is “about working in very deliberate, focused ways to improve your performance over a long period of time.” My own interpretation: work smarter, not harder, and do it for a long time.

So what about those articles lately that talk about how grit may actually not be so beneficial after all? How sometimes the effort expended to complete or to persevere through something difficult is not worth it. This is certainly sometimes true, and exerting too much energy in pursuit of every single goal isn’t the smartest use of everyone’s finite resources. But if we narrow the parameters, maybe we can agree that in the context of a “worthwhile” long-term goal, grit and a growth mindset are boons to most endeavors.

Is all this just more pop psychology? Perhaps, but like much of pop psychology, it may contain kernels of wisdom, too.  It’s a good reminder when you’re feeling discouraged or overwhelmed that 1) most difficult things require perseverance, and 2) believing that your efforts will yield positive results does make a difference.