After Zuckerberg talks, Facebook gains $6.8 billion

Fri Sep 14, 2012 5:13pm EDT

SAN FRANCISCO (Reuters) – Facebook Inc CEO Mark Zuckerberg might need to talk more often. A 30-minute appearance at a technology industry conference earlier this week has translated into $6.785 billion in additional market valuation for his company.

Facebook shares finished Friday’s regular trading session up 6.2 percent at $22 as Wall Street’s confidence in the company continued to improve in the wake of the 28-year-old CEO’s first public appearance since a rocky initial public offering in May.

The social networking company’s progress introducing a new advertising service that gives marketers improved ways to reach consumers on Facebook also helped bolster its shares, analysts said.

“People are starting to feel a little more comfortable,” said Arvind Bhatia, an analyst with Sterne, Agree Leach.

Zuckerberg’s comments, in which he highlighted mobile business progress, suggested Facebook could enter the search market and expressed confidence in future money-making prospects, have improved the perception of the stock, said Bhatia.

Zuckerberg has a reputation for spending his time building the company from the inside rather than going around promoting it to investors.

On Thursday, Facebook said its nascent ad exchange was no longer in testing mode, and several advertising agencies reported encouraging early results using the service.

The Facebook Ad Exchange allows marketers to target consumers with pitches based on their past Web browsing activity, such as the websites they’ve visited — a standard online advertising technique that until now has not been available on Facebook.

The ad exchange hints at improved monetization potential for Facebook, said Lazard Capital Markets analyst William Bird.

The world’s No.1 online social network with 955 million users, Facebook has faced a rough debut since its May initial public offering. Investors and analysts have fretted about a sharp slowdown in its revenue growth. Shares of Facebook remain well below their $38 offering price.

The ongoing expiration of “lock-up” restrictions on Facebook insiders selling shares have added further pressure on the stock.

“I don’t think they’re completely out of the woods, but it does feel like the sentiment is improving,” said Sterne, Agee Leach’s Bhatia.

The shares are up roughly 13 percent since Zuckerberg spoke at the TechCrunch Disrupt conference in San Francisco on Tuesday.

(Reporting By Alexei Oreskovic; editing by Andrew Hay)

News Corp studio co-chair Rothman resigns as film, TV split

Fri Sep 14, 2012 10:40pm EDT

LOS ANGELES (Reuters) – The co-chairman of the 20th Century Fox film unit, Tom Rothman, will step down at the end of the year as the News Corp studio separates its film and television production businesses, the company said on Friday.

Rupert Murdoch’s media giant will consolidate film operations under Jim Gianopulos, Rothman’s co-chair and CEO since 2000. The TV studio will operate as a separate unit.

News Corp is shuffling its executives as it prepares to separate into two publicly traded companies in 2013. Newspaper, book and magazine publishing will comprise one company and the Fox television and film properties will be the chief components of the other.

The Fox studio under Gianopulos and Rothman has annually ranked among Hollywood’s most profitable studios. Fox Chairman Rupert Murdoch and president Chase Carey lauded Gianopulos in a letter to Fox staffers, saying they “are confident that Jim’s stellar business and creative acumen will take our film business to new heights.”

Rothman said in a statement he had “done the same job, at the same place, for a very long time, and it is time for me to write a new chapter.” He has worked at Fox for 18 years, a time when the studio released the two highest-grossing films in history, “Avatar” and “Titanic.”

During his tenure, the studio ranked “consistently at the highest levels of industry profits” and made “dozens of films that will stand the test of time,” Rothman said. “I am extremely proud of that run.”

The film business will house Fox Searchlight Pictures, Fox 2000, Fox Animation/Blue Sky Studios, Fox International Productions, and Fox Home Entertainment. The unit will be called 20th Century Fox Film.

The company’s television production business will operate under the name 20th Century Fox Television. Co-chairs Dana Walden and Gary Newman will report directly to Carey.

This summer, Fox’s animated movie sequel “Ice Age: Continental Drift” rang up huge sales around the world. It had less success with live-action movies including “Prometheus” and “Abraham Lincoln: Vampire Hunter.”

Wunderlich Securities analyst Matthew Harrigan said splitting the TV and movies businesses was a logical step.

“The TV business is generally regarded as being more predictable, less hit-driven than the studio business, and management-wise there are not that many commonalities,” he said.

(Reporting by Lisa Richwine in Los Angeles and Siddharth Cavale and Tej Sapru in Bangalore; Editing by Gary Hill and Paul Tait)

Apple did not violate Samsung patents: U.S. trade judge

Fri Sep 14, 2012 8:57pm EDT

WASHINGTON (Reuters) – Apple did not violate patents owned by Samsung Electronics in making the iPod touch, iPhone and iPad, a judge at the International Trade Commission said in a preliminary ruling on Friday.

Apple and Samsung have taken their bruising patent disputes to some 10 countries as they vie for market share in the booming mobile industry. Apple won a landmark victory last month after a U.S. jury found the South Korean firm had copied key features of the iPhone and awarded Apple $1.05 billion in damages.

ITC Judge James Gildea said on Friday that Apple did not violate the four patents in the case. Samsung had accused Apple of infringement in a complaint filed in mid-2011. It asked for the infringing products to be banned from sale in the United States.

The full commission is due to decide whether to uphold or overturn its internal judge’s decision in January.

“We remain confident that the full Commission will ultimately reach a final determination that affirms our position that Apple must be held accountable for free-riding on our technological innovations,” Samsung said in a statement.

Apple did not immediately respond to requests for comment.

The patents in the complaint are related to 3G wireless technology, the format of data packets for high-speed transmission, and integrating functions like web surfing with mobile phone functions.

Apple has a parallel complaint filed against Samsung at the ITC, accusing Samsung, a major Apple chip provider as well as a global rival, of blatantly copying its iPhones and iPads. The ITC judge’s preliminary decision is due in mid-October.

Samsung was the top-selling mobile-phone maker in the second quarter of 2012, with Apple in third place, according to data from Gartner Inc.

Samsung’s Galaxy touchscreen tablets are considered by many industry experts to be the main rival to the iPad, though they are currently a distant second to Apple’s devices.

Apple has waged an international patent war since 2010 as it seeks to limit the growth of Google’s Android system. The fight has embroiled Samsung, HTC and others who use Android.

Google’s Android software, which Apple’s late founder Steve Jobs denounced as a “stolen product,” has become the world’s No. 1 smartphone operating system.

The ITC judge’s decision comes just weeks after the most closely watched patent trial in years. A jury in a California federal court ordered Samsung to pay $1.05 billion in damages after finding that Samsung had copied critical features of the iPhone and iPad and could face an outright sales ban on key products.

Samsung has said it will contest that verdict and work with carriers to modify its products to keep them on the U.S. market.

The case at the International Trade Commission is No. 337-794.

(Reporting by Diane Bartz; editing by Carol Bishopric, Gary Hill)

A comedown may be waiting after Fed high

Fri Sep 14, 2012 6:38pm EDT

NEW YORK (Reuters) – Comparing the Federal Reserve to a rehab clinic offering addicted investors a synthetic high has been a favorite of Wall Street wags ever since the first round of Fed stimulus nearly four years ago. The punch line is that you always need more and more to get the same high and each bout of euphoria is followed by a crashing comedown.

After the frenetic reaction brought about by the announcement of the Fed’s latest stimulus program – $40 billion pumped into the U.S. economy each month – the coming week is likely to bring a more sober period for markets as investors digest what it means in the longer run and turn their attention to the remainder of the year.

That will include rancorous U.S. elections in November, wrangling over taxes and spending cuts and a slowdown in corporate earnings.

“Right now we have this short-term euphoria. But then the question is where do we go from here,” said Frank Fantozzi, chief executive of Planned Financial Services, an independent wealth manager in Cleveland. “I think after a week or so, if the underlying economic data doesn’t change, you’re going to see the market drop a bit and we’ll continue to plod along until the election.”

The effect on markets of the European Central Bank’s plan to buy government bonds of struggling euro zone countries, then the Fed’s opened-ended commitment to spur growth have been breathtaking. The Dow and the SP 500 reached the highest closing level in nearly five years while the Nasdaq marched to new 12-year highs.


But in Friday’s stock market action strong gains in the morning steadily eroded throughout the day, perhaps the first signs of fatigue creeping into the market.

“We are starting to get into that heady territory where you need to be on the defensive,” said Richard Ross, global technical strategist at Aubach Grayson in New York. “Trying to squeak out the last 5 percent of a move when there is potentially a 15 to 20 percent downside in my opinion is pretty dangerous stuff.”

Ross believes that equities, commodities and currencies are now approaching extreme levels of both price and momentum while geopolitical tensions in the Middle East are rising.

Even though all the major stock market rallies since the financial crisis have coincided with new central bank efforts to stimulate the economy, not everyone is buying it.

The latest data shows a moderate increase in short interest – bets that stocks will fall – across SP 500 stocks during the last two weeks of August, a period when stocks were rallying on expectations of the Fed’s announcement. Typically short interest inversely tracks the market. If investors were getting out of bets that stocks will fall, that would mean buying back those stocks and forcing the market higher.

Data provided by Schaeffer’s Investment Research, a Cincinnati-based research firm, shows that bets against the biggest 500 U.S. companies edged back to about 7.3 billion shares after falling from about 7.6 billion to 7.2 billion from the start of July through the end of August – a period when the market gained more than 3 percent.


That uptick in short interest could be significant. From the middle of September 2011 through the end of May this year, short interest on SP 500 stocks fell like a stone to about 6 billion shares. During that period the SP hit a four-year high, rising more than 20 percent from trough to peak.

One side effect of the Fed’s bond-buying should be to reduce volatility in markets. That means the CBOE VIX volatility index .VIX should remain close to the five-year lows it hit this summer. In August it fell as low as 13.30.

Yet activity in the options market shows some very bold bets that volatility could sky rocket in the months ahead. Call option buying on the VIX – bets the index will rise – is close to a record high at 5.182 million contracts, according to Schaeffer’s data. The record is 5.249 million set in August.

The most actively traded VIX calls on the Chicago Board Options Exchange were October calls with a strike price of 60. Those also had the highest open interest. The VIX would need to rocket more than 300 percent by mid-October, hitting its highest level in about four years, for that trade to break even.

On the face of it a bet like that may seem little better than betting your 401(k) on a single number on the roulette table, but it does reveal more bearishness creeping into the market as stock indexes march to new highs.

Open interest, or outstanding contracts, on the October VIX calls with a strike price of 60 was 37,000 while traded volume was around 40,000. Many of those were bought in blocks of 2000 to 5000 for 5 cents each, suggesting a single buyer, according to Todd Salamone, vice president of research at Schaeffer’s.

“Somebody’s really playing a disaster by October,” said Salamone. “If they’re looking for something that big, that is not a portfolio hedge because that would be a lot of downside in the market before that hedge would actually kick in.”

A lot of the market action over the coming months will depend on whether the Fed’s stimulus program succeeds in boosting the economy.

Data on the housing market in the coming week is expected to show a continuing improvement. Economists in a Reuters poll expect the National Association of Home Builders Index to tick up in September when the data is released on Tuesday. On Wednesday both housing starts and existing-home sales are expected to increase.

Early manufacturing data for September, however, is not expected to be so robust. Both the Empire State index and the Philadelphia Fed index are tipped to show contraction. That would follow the sharpest drop in U.S. manufacturing in more than three years in August, which was also the third consecutive month of contraction.

“Let’s face it – we are in truly unchartered waters here,” said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.

(Reporting By Edward Krudy; Editing by Kenneth Barry)

Wall Street ends at multi-year highs on Fed

Fri Sep 14, 2012 4:51pm EDT

NEW YORK (Reuters) – U.S. stocks rose for a fourth straight session on Friday to close out the week at nearly five-year highs after the Federal Reserve took bold action to spur the economy, a move that could keep equities buoyed in the coming months.

Shares of Apple Inc (AAPL.O), the largest U.S. company by market value, ended at an all-time peak, and Exxon Mobil (XOM.N), the second biggest, hit a four-year high.

Equities are in a run-up that has pushed the SP 500 to end higher for four consecutive months. The extended advance has come mainly from actions by Europe’s and the United States’ central banks to keep interest rates low and stimulate their struggling economies.

The Fed said Thursday that it would keep up its aggressive bond-buying until unemployment falls. Chairman Ben Bernanke said he wanted to see a convincing improvement in the economy that could deliver sustainable job creation.

Bernanke’s comments are “going to create an artificial floor on the market, meaning that we could see higher prices over time,” said Paul Nolte, managing director at Dearborn Partners in Chicago. “Any correction that we get will be no more than a few percentage points.”

The Dow and the SP 500 both closed at their highest levels since December 2007, while the Nasdaq ended at the highest since November 2000. The small-cap Russell 2000 .RUT index closed at the highest since April 2011.

The Dow Jones industrial average .DJI ended up 53.51 points, or 0.40 percent, to 13,593.37. The Standard Poor’s 500 Index .SPX closed up 5.78 points, or 0.40 percent, to 1,465.77. The Nasdaq Composite Index .IXIC gained 28.12 points, or 0.89 percent, to 3,183.95.

For the week, the Dow rose 2.2 percent, the SP climbed 1.9 percent and the Nasdaq added 1.5 percent.

The SP is now just 6 percent below its all-time closing high of 1,565.15 despite a relatively weak economy and economic risks around the world.

The Fed’s balance sheet could expand by 11 to 12 percent by the end of the year, monetary accommodation that could “translate into a move up in the SP 500 stock index to the 1,505 area,” Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, LLC in Menomonee Falls, Wisconsin, said,

Energy and material stocks led the gains as the Fed’s move boosted commodity prices. Miner Freeport-McMoran Copper Gold Inc (FCX.N) rose 2.03 percent to $42.64 and aluminum company Alcoa Inc (AA.N) advanced 2.18 percent to $9.84. The PHLX Gold/Silver Index .XAU climbed 2.86 percent to its highest since early March.

The SP energy sector index .GSPE rose 1.3 percent and the SP materials sector index .GSPM was up 1.2 percent.

U.S. economic data released on Friday helped justify the Fed’s decision to launch a third round of bond purchases to try to lower borrowing costs and spur growth.

A jump in the cost of gasoline pushed consumer prices up in August at the fastest pace in more than three years and squeezed spending on other items, threatening to further slow the already sluggish economy. Other data showed production at factories, mines and utilities dropped by 1.2 percent, the biggest decline since March 2009.

SP Dow Jones Indices said UnitedHealth Group Inc (UNH.N) will replace Kraft Foods Inc (KFT.O) in the Dow Jones industrial average after the close of trading September 21. UnitedHealth shares rose 0.67 percent to $54.25 and Kraft slipped 0.5 percent to $39.93.

Home Depot (HD.N), the world’s largest home improvement chain, was up 2 percent to $59.46 after the company announced it will close all seven of its big box stores and cut 850 jobs in China.

Shares of Staples (SPLS.O) were up 2.09 percent to $12.21 after Fortune magazine reported that several private equity firms, including Bain Capital, are considering a buyout offer for the retailer.

Total volume was 8.45 billion shares, above last year’s daily average of 7.84 billion.

On both the New York Stock Exchange and Nasdaq, about two stocks rose for every one that fell.

(Editing by Kenneth Barry)

Quirky’s Overnight Race to the iPhone Market

Quirky teams up with Fab to develop a line of crowdsourced accessories for the iPhone 5 and other Apple products–in just 24 hours.

Courtesy Company

MAKE IT SNAPPY: Quirky CEO Ben Kaufman leads an evaluation panel reviewing customer-submitted iPhone 5 accessory ideas–narrowing down 1,500 ideas to more than a dozen designs in 24 hours. They’ll be be in consumers’ hands in less than two months.

Few workers burn the midnight oil with an open bar and a live DJ on deck.

But that was the scene at Quirky’s New York headquarters on Thursday night as the company raced to develop accessories for the new iPhone 5, as well as a few other Apple products, in just 24 hours. The company, which makes products that are collectively designed by its customers, intends to have a working prototype of each of the products ready to deliver to its manufacturer on Saturday, says CEO Ben Kaufman. The products will go on sale on on Wednesday, September 19. They will begin shipping in four to six weeks.

“Fab has done an amazing job of selling Quirky products in the past few months,” says Kaufman. “With this excitement for the new iPhone, we felt joining forces would deliver some of the best, brightest ideas and intelligent designs.”

The rapid development process began on Wednesday, as Quirky announced the launch of a permanent vertical for Apple accessories on its site. It invited its community members to submit ideas for products to be developed during the special 24-hour event. Quirky received more than 1,500 submissions.

On Thursday evening, 53 of those submissions were chosen by Quirky’s staff to be reviewed during the company’s live-streamed evaluation panel, held before an audience of several dozen employees and guests. The panel included representatives from each of Quirky’s departments, as well as a buyer and a merchandising specialist from Fab.

Roughly 15 ideas, including a wristband that converts to a charging cable for the iPod Touch and a case that would transform the iPhone into a full-fledged camera, were selected. Among the rejected ideas: a metallic iPhone case with “a real James Bond look,” an iPhone case that could diffuse the camera’s (already miniature) flash, and a vibrating iPhone attachment that would serve as, well, a vibrator.

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  • Quirky’s employees and guests then began drafting sketches and brainstorming product specifications, which were voted upon and refined by online community members. Participants in the design process at Quirky’s headquarters wore bright badges specifying their role in the process, such as “designer,” “community member,” or “shitter”–someone designated to point out flaws in a proposed idea.

    By the next morning, initial concepts for each product had been finalized, and the company began soliciting suggestions for product names and taglines. The engineering phase will begin Friday, and photos of the prototypes will be available this evening on Quirky’s site. Though relatively simple products such as the phone cases will be available within a month, other products may take longer to develop, says Kaufman.

    “But they will still be brought to market within months–significantly faster than most consumer product companies take to develop a plastic spatula,” he says.

    This is not the first time Quirky has worked around-the-clock to put out a community-designed product. One of the company’s first products, a cord wrap for Mac computers called PowerCurl, was designed and launched in a 24-hour period. In September, the company partnered with Sony to organize a daylong event to develop a bicycle, which was unveiled at the premiere of the film Moneyball. Quirky billed the event as “reinventing the bicycle” as a counterpart to the “reinvention” of baseball depicted in the film.

    “It’s really exciting to see how people go all in and hustle to get it done,” Kaufman says. “It’s fun for the team, it’s fun for the community, and it shows what the Quirky machine can really do.”

    4 High-Tech Hotels to Try

    Get more than just a good night’s sleep the next time you travel on business. These hotels have super-fast Internet, cool gadgets, and more.

    The Marlin Hotel

    Courtesy of the company

    Guests at The Marlin Hotel in Miami get an iPad to control the climate, lighting, and more in their rooms.

    Finding a hotel for the night when you are traveling for business can be mundane. If you’re like me, you’ll pull up a site like and look for the best rate at hotels closest to your next meeting.

    But there is a whole range of high-tech hotels that offer something more. For those who need to stay connected, give a presentation in a conference room, or just tap into a high-speed network, these temporary digs fit the bill–and still offer good rates and soft mattresses.

    1. The Inverness Hotel and Conference Center
    Location: Denver, CO
    Some hotels claim to offer high-tech features but really only have high-speed wireless in the room. In the conference center at the Inverness Hotel, you can connect your iPad to a projector wirelessly and stream a presentation. By the end of this year, the hotel will upgrade the wireless projectors to high definition. The conference center is also outfitted with super-fast 100Mbps Internet.

    2. Conrad New York
    Location: New York City
    This hotel, which opened in March, has a unique offering: a virtual concierge app you can use either during your visit or before you arrive for the night. With the app, you can order movie tickets that will be delivered to the front desk, specify that you’d like a hypoallergenic room, make dinner reservations in the hotel restaurant, and even configure your wake-up call.

    3. Intercontinental Hotel
    Location: San Francisco
    One of the most popular charging locations for electric cars is the hotel garage, primarily because you can leave a car to charge overnight. At the Intercontinental in San Francisco, you can use a fast-charging ECOtality Blink charger. The stations are free to use, and those who charge up their EV will also help with the EV Project to help determine who is charging and where.

    4. The Marlin Hotel
    Location: Miami
    Every guest at The Marlin Hotel in Miami can borrow an iPad to control the lighting in their room, the TV, music, the shades, and even see the two security camera feeds in the parking lot. When you control the lights, you can adjust the brightness level and enable different lighting zones within the room. The TV is connected to an Apple TV set-top box where you can download movies.

    Stayed in any high-tech hotels? Tell me about it in the comments.

    3 Smarter Ways to Raise Prices

    An increase in price, if done correctly, can actually make your current customers feel more appreciated.

    Price Change


    Raising your price can mean losing customers. Case in point: When Netflix suddenly raised its price about a year ago, irate customers left in droves.

    However, it is possible to raise prices in such a way that your existing customers, rather than leaving the fold, stick around–and may in fact become even more loyal. Here are the ground rules to use.

    1. Have a Credible Reason

    Customers realize that there are plenty of good reasons why a price can and should go up. For example, if your suppliers are charging more, they know you’ll have to charge more. Similarly, if rising support costs are making your company unprofitable (even though your product is high quality), customers know that you’ll eventually need to charge more for support.

    Even something like, “I found out that I’m charging less than the competition” can be a valid reason, if delivered honestly. The main point is to have a reason other than “because we want more money”–which is basically how Netflix positioned it.

    2. Provide Plenty of Warning

    Customers hate surprises. The minute you know that you’re going to have to raise your price, start laying the groundwork. In your regular communications with your customers, explain what’s going on with your business and start building your case for a price increase.

    This is where a corporate blog or a customer newsletter comes in handy. Keeping customers informed and involved makes it less likely that they will bolt when they find out that they will have to pay more.

    Netflix had ample time and opportunity to communicate with its existing customers; there was no reason to spring the news out of a clear blue sky.

    3. Give Existing Customers a Discount

    Let’s suppose you need to raise your price 15%. Rather than make the price rise across the board, raise the price 20% for new customers–but only 10% for current customers. Even a temporary discount off the new higher price tells your current customers that you value their support and that you’re committed to giving them the best deal possible.

    If you’ve made a reasonable case for the rise in price and laid the groundwork, your existing customers will be grateful for the discount rather than irritated at the new price.

    Like this post? If so, sign up for the free Sales Source newsletter.

    Already a Decent Speaker? Here Are 5 Expert Tips

    Every great leader must be adept at making presentations. Here’s how to perfect yours.

    Jetta Productions/Getty

    I recently outlined the eight basic tips every presenter should consider. Here are five advanced tips will make your presentation that much more memorable:

    1. Start With Your Face

    Make good eye contact by moving them across the room in a tic-tac-toe pattern and briefly locking eyes with as many people as you can. Linger long enough to complete a thought or statement. You want everyone in the room to feel you are giving the presentation just to him.

    Your facial expressions should be deliberate and purposeful. If you look down or away, your audience will perceive it as a lack of confidence or that you are trying to remember a point you forgot. Remember to smile.

    2. Use Your Body

    Always utilize your body–not your slides–to keep your audience engaged. Use elaborate hand gestures to emphasize size, shape, direction, or to make a point. Your motions will feel extreme, but your audience is typically further away, so grand gestures will only keep people engaged and help them visualize your point.

    Resist any temptation to stay stationary behind a podium. Use your entire presentation space, and make sure you move with purpose and command the stage. Never put your back to your audience.

    Your slides should be simple and support what you say, but should not distract your audience from focusing exclusively on you.

    3. Master Your Voice 

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  • Your voice is your most powerful and important asset while you are on the stage. Use inflection wisely to keep your speech interesting, and project your voice to the very back of the room. Understand that how you say your speech is as important as what you say. A slight lift in your voice means you are asking a question; ending your sentence slightly lower indicates authority.

    The biggest mistake most speakers make is a failure to slow down or use pauses. Silence and space between words allows for emphasis and lets your audience catch up with your ideas. Count to two in your head after making a point or after the laughter dies down. It will seem like an eternity, but it’s much shorter than you think.

    Avoid filler words or phrases: “like,” “um,” “so,” “right.” Become mindful of the things you say that are unnecessary. Make every word choice wisely.

    4. Shake It Up

    No matter how incredible your presentation is, your audience has a limited attention span. Find opportunities to make the presentation entertaining and interactive. You can field questions, use technology like TextTheMob to poll your audience, or break into smaller groups to do an activity. 

    5. Practice–a Lot

    The most important thing you can do, above all other suggestions, is to practice, practice, practice. Malcom Gladwell in his book Outliers says that it takes 10,000 hours to become an expert. The ability to deliver a good presentation is no different. I record myself as I practice and use the video to help me fine-tune my delivery.

    Best Way to Bounce Back From a Mistake

    So you messed up. Psychologists have worked out a game plan for exactly what you should do next.

    trampoline, flip

    Flickr Creative Commons

    No matter how clever, competent, or well prepared you are for the challenges of starting and running a business, you’re going to screw up from time to time.

    That’s not only simple human nature but also a testament to how challenging entrepreneurship truly is. So how do you bounce back mentally after these setbacks?

    This is a question on which psychologists have plenty to say. Their advice may surprise the more hard charging and highly strung among us but would hardly shock your kindergarten teacher. What’s the best course of action following a screwup? Forget beating yourself up, and instead be nice–to yourself.

    When it comes to learning from mistakes, you might think that holding yourself to a high standard and being uncompromising in your self-criticism is the best, if not most immediately pleasant, course of action, but that’s not what a recent PsyBlog post on the subject recommends. Instead, try “self-compassion.”

    Researchers, the post reports, have compared whether distracting yourself from your screwup, actively trying to boost your self-esteem by remembering past successes, or viewing the mistake with compassion and without judgment helped people dust themselves off and get back on their feet the quickest. According to the post, the study found self-compassion worked best, helping participants to: 

    • See the possibilities for change
    • Increase the motivation to change
    • Take steps toward making a change
    • Compare themselves with those doing better, to help motivate their change

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  • You might think you’re being soft on yourself by forgiving yourself your sins and slipups, but in fact, this approach, the science suggests, is more likely than beating yourself up to help you actually change and improve for next time.

    PsyBlog may recommend self-compassion as a general-purpose response to self-inflicted setbacks, but it’s not the only blog suggesting it’s both kind and smart to be softer on ourselves. Psychologists have also prescribed “self-forgiveness” as a cure for procrastination, according to a British Psychological Society Research Digest post on a study looking into how students can best bounce back after they have slacked off on studying:

    Students who’d forgiven themselves for their initial bout of procrastination subsequently showed less negative affect in the intermediate period between exams and were less likely to procrastinate before the second round of exams. Crucially, self-forgiveness wasn’t related to performance in the first set of exams but it did predict better performance in the second set.

    The study’s conclusion for students–“forgive yourself for you have procrastinated, move on, get over it and you’ll be more likely to get going without delay next time around”–is probably equally applicable to entrepreneurs.

    Are you guilty of beating yourself up for your slipups in a counterproductive way?