Tata goes back to drawing board at stalled Indian car unit


PIMPRI, India |
Sun Dec 23, 2012 4:27pm EST

PIMPRI, India (Reuters) – Deep in Tata Motors’ (TAMO.NS) largest factory, engineers don 3D glasses to play with car designs and prototypes projected from a 10-metre wide computer screen. Their quest? The Indian automaker’s next blockbuster car model.

The research and development team’s task is a pressing one. As they work, sections of conveyor belt and welding stations lay silent at the Pimpri factory and lines of white and silver Indica hatchbacks gather dust along service roads outside.

Tata, a global name since it bought Jaguar Land Rover TAMOJL.UL in 2008, is losing traction at home as underwhelming product tweaks, heavy discounts and slumping capacity utilization mark a painful 18 months for its passenger division.

Not since the 2008 Nano, the world’s cheapest car, has Tata unveiled a head-turning passenger vehicle, and not since the Indica’s launch in 1998 has it set the Indian market alight. Now, the company is heading back to the drawing board.

More money and more attention is going to the passenger vehicle unit as the company ramps up RD, ditches a failed product strategy and prepares to enter the mini SUV segment and reboot the so-far underwhelming Nano.

“We have done something very innovative that will allow us to respond more positively,” said Tim Leverton, Tata Motors’ head of research and development. “You’ll see, over the next 12-18 months onwards, a fireworks of output.”

Tata will pour more than 75 billion rupees ($1.36 billion) into the passenger vehicle business over the next five years. Less than 30 percent of that has been earmarked for facilities or upgrading hardware, leaving the rest for new products.

“The business is understanding that’s a heavy investment to make,” Leverton said. “But it needs to be made.”

Tata desperately needs a new hit model to arrest its sliding sales and eroding market share. A slew of new variants to combat competition from global brands will see it bin its inflexible past strategy of one car per market segment.

The success of the new drive will hinge on how soon Tata can bring fresh designs and ideas to market. That could take time.

“We’re definitely not factoring in a revival in their market share for the next two to three years. We don’t see any major new products … launched over the next two to three years,” said Jinesh Gandhi, auto analyst at Motilal Oswal Securities in Mumbai. “It’s going to be an uphill task for them.”

Tata’s car sales fell 8 percent in the April-November period from a year earlier, as main rivals Hyundai Motor (005380.KS) and Maruti Suzuki (MRTI.NS) posted increases.

The company relied on Jaguar Land Rover for 90 percent of its consolidated profit in the last financial year. The slowdown in its domestic business is seen as a drag on its value.

Tata Motors has a 12-month forward price to earnings ratio of 7.4, according to Thomson Reuters StarMine, against 17.2 for Maruti Suzuki and 9.2 for BMW AG (BMWG.DE).

“For sure new products are the source of growth and interest in our market,” Managing Director Karl Slym told Reuters. “And so product focus is and should always be a priority.”

The appointment this summer of Slym, a former General Motors (GM.N) executive, itself marked a shift. His two predecessors were former heads of Tata’s commercial vehicle business – the unit that made the biggest advances under their tenures.

MANY POTS COOKING

At Tata’s plant in Pimpri, 140 km (87 miles) from Mumbai, most space is taken by commercial vehicle manufacturing. Building buses and goods trucks for India’s bone-jangling roads is the 67-year-old company’s bread and butter.

Tata, the world’s fourth-largest truckmaker, has spent much of the past few years devoted to its commercial portfolio. Its Ace range of trucks redefined a segment and have sold 500,000 vehicles since 2010. It hasn’t launched a car that popular since the Indica: its first crack at the then-nascent car market.

“The company is in a transitionary phase,” said Leverton, a former RD head at BMW with more than 30 years experience in the industry. “The nature of what we have got to do over the next five years in really coming to global standards in passenger cars is a reflection of what has been happening in commercial vehicles.”

There are signs of green shoots, however. Leverton’s 5,500-strong team, with additional RD centers in Warwick, U.K. and Turin, Italy, produced Tata’s first in-house designed concept cars, the Pixel and MegaPixel compact city vehicles.

The mini SUV, of which Leverton declined to give details, will give Tata a foothold in one of India’s fastest-growing segments, where it has been outgunned by local rival Mahindra Mahindra’s (MAHM.NS) small, sporty off-road cars.

“I have many fires with many pots on those fires,” Pankaj Jhunja, studio head at Tata’s Engineering and Research Centre, said in an interview at the site.

“When we had little competition, we wrote the rules of the game,” said Pankaj, who worked for Renault for four years. “We don’t have brands that we can pull from our Brazilian market or Korea and plonk here with some minor alterations.”

NANO FACTOR

The Nano has disappointed sales expectations.

In 2008, a delegation of officials from India’s West Bengal state, where Tata was building a plant to make the Nano, visited the Pimpri factory. When they were shown the then top-secret prototype, one excited official shouted: “When can I buy one?”

But the Nano has been beset by production delays, poor marketing and cost over-runs. More pressing for Tata is that no launch since then has matched the barrage of publicity and public excitement it generated.

Tata hopes a new Nano, which runs on diesel – a popular fuel thanks to government subsidies – will rekindle excitement in a car many thought would revolutionize mass transport.

“It’s in the pipeline,” said Leverton, who declined to give a launch date. “In terms of the technical challenges involved, we’ve addressed them … You can judge what’s happened so far on Nano, but we haven’t finished with it yet.”

The last car Leverton worked on before he joined Tata Motors was the 2003 Rolls-Royce Phantom, a car that cost 250,000 pounds when it was launched, and boasted lamb’s-wool rugs and chromium-plated air-vents. Bringing desirability to Tata Motors, seen more as a low-cost brand, is his new task.

“There’s a certain demand from the customer … I think we’ve understood that and we’re responding,” said Leverton, adding Indian drivers are among the world’s most demanding.

They certainly have a lot of options to choose from.

Global marquees such as Ford (F.N) and Renault SA (RENA.PA) have spent billions of dollars in India over the past few years, and offer models boasting international design standards and features previously limited to Europe or the United States.

Tata’s share of India’s car market had fallen to 10.9 percent in the April-November period of this year, according to the Society of Indian Automobile Manufacturers, from 12.8 percent in the fiscal year that ended in March.

The carmaker is offering a discount of up to 60,000 rupees on its Indica Vista hatchback, which starts at 410,000 rupees, and up to 15 percent off its Aria SUV.

“We need to get our act better … in terms of product refreshers, product launches, look at more opportunistic segments,” Chief Financial Officer C. Ramakrishnan said on a recent conference call. “We know we have a long way to go.”

(Editing by John Chalmers and Dean Yates)

Fear, finger-pointing mount over "fiscal cliff"


WASHINGTON |
Sun Dec 23, 2012 5:33pm EST

WASHINGTON (Reuters) – Some lawmakers voiced concern on Sunday that the country would go over “the fiscal cliff” in nine days, triggering harsh spending cuts and tax hikes, and some Republicans charged that was President Barack Obama’s goal.

“It’s the first time that I feel it’s more likely that we will go over the cliff than not,” Senator Joe Lieberman, an independent from Connecticut, said on CNN’s “State of the Union.”

“If we allow that to happen it will be the most colossal consequential act of congressional irresponsibility in a long time, maybe ever in American history.”

“It looks like to me that obviously this is going to drag on into next year, which is going to hurt our economy,” Republican Senator Bob Corker of Tennessee said on CBS “Capitol Gains.”

The Democratic president and Republican House of Representatives Speaker John Boehner, the two key negotiators, are not talking and are out of town for the Christmas holidays. Congress is in recess, and will have only a few days next week to act before January 1.

On the Sunday TV talk shows, no one signaled a change of position that could form the basis for a short-term fix, despite a suggestion from Obama on Friday that he would favor one.

The focus was shifting instead to the days following January 1 when the lowered tax rates dating back to President George W. Bush’s administration will have expired, presenting Congress with a redefined and more welcome task that involves only cutting taxes, not raising them.

“I believe we are,” going over the cliff, Republican Senator John Barrasso of Wyoming said on Fox News Sunday. “I think the president is eager to go over the cliff for political purposes. I think he sees a political victory at the bottom of the cliff.”

Some Republicans have said Obama would welcome the fiscal cliff’s tax increases and defense cuts, as well as the chance to blame Republicans for rejecting deal. Obama has rejected that assertion.

Democrats have charged that Boehner has his own self-interested reasons for avoiding a deal before January 3, when the House elected on November 6, is sworn in and casts votes for a new speaker.

Democratic Senator Charles Schumer of New York said on NBC’s “Meet the Press” that Boehner has been reluctant to reach across the political aisle for fear it could cost him the speakership when he runs for re-election. “I know he’s worried,” said Schumer.

Boehner, who so far has no serious challenger for the job of speaker, has said that he has no such concerns.

Such finger pointing has been under way since Congress returned after the election, but it has gained intensity in the past few days, with the heightened prospect of plunging off the cliff.

Congress started the clock ticking in August of 2011 on the cliff. The threat of about $600 billion of spending cuts and tax increases was intended to shock the Democratic-led White House and Senate and the Republican-led House into bridging their many differences to approve a plan to bring tax relief to most Americans and curb runaway federal spending.

Economists say the harsh tax increases and budget cuts from the fiscal cliff could thrust the world’s largest economy back into a recession, unless Congress acts quickly to ease the economic blow.

MARKETS COULD TUMBLE

The most immediate impact could come in financial markets, which have been relatively calm in recent weeks as Republicans and Democrats bickered, but could tumble without prospects for a deal.

Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will be closed on Tuesday for Christmas.

Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the week with scores of market participants away on a holiday break.

If Congress fails to reach any agreement, income tax rates will go up on just about everyone on January 1. Unemployment benefits, which Democrats had hoped to extend as part of a deal, will expire for many as well.

In the first week of January, Congress could scramble and get a quick deal on taxes and the $109 billion in automatic spending cuts for 2013 that most lawmakers want to avoid.

Once tax rates go up on January 1, it could be easier to keep those higher rates on wealthier taxpayers while reducing them for middle- and lower-income taxpayers. Lawmakers would not have to cast votes to raise taxes.

Some lawmakers expressed guarded hope that a short-term deal on deficit reduction could be reached in the next week or so, with a longer, more permanent deal hammered out next year.

But a short-term deal would need bipartisan support, as Obama has said he would veto a bill that does not raise taxes on the wealthiest Americans.

Democratic Senator Kent Conrad, chairman of the Budget Committee, said Obama and Boehner are not that far apart and that both sides should keep pushing for a long-term big deal.

“I would hope we would have one last attempt here to do what everyone knows needs to be done, which is the larger plan that really does stabilize the debt and get us moving in the right direction,” Conrad of North Dakota told Fox News Sunday.

But most Republicans are now looking past January 1 to what they consider their next best chance of leveraging Obama for more cuts in the Federal budget – a fight over the debt ceiling expected in late January or early February. At that time, the administration will need Congress’ authorization to raise the limit on the amount of money the government can borrow.

“That’s where the real chance for change occurs, at the debt-ceiling debate,” Republican Senator Lindsey Graham of South Carolina said on “Meet the Press.”

(Reporting by Thomas Ferraro and Richard Cowan; Editing by Fred Barbash and Vicki Allen)

Analysis: Amazon, Google on collision course in 2013


SAN FRANCISCO |
Sun Dec 23, 2012 12:33pm EST

SAN FRANCISCO (Reuters) – When Amazon.com Inc CEO Jeff Bezos got word of a project at Google Inc to scan and digitize product catalogs a decade ago, the seeds of a burgeoning rivalry were planted.

The news was a “wake-up” call to Bezos, an early investor in Google. He saw it as a warning that the Web search engine could encroach upon his online retail empire, according to a former Amazon executive.

“He realized that scanning catalogs was interesting for Google, but the real win for Google would be to get all the books scanned and digitized” and then sell electronic editions, the former executive said.

Thus began a rivalry that will escalate in 2013 as the two companies’ areas of rivalry grow, spanning online advertising and retail to mobile gadgets and cloud computing.

It could upend the last remaining areas of cooperation between the two companies. For instance, Amazon’s decision to use a stripped down version of Google’s Android system in its new Kindle Fire tablet, coupled with Google’s ambitious plans for its Motorola mobile devices unit, will only add to tensions.

The confrontation marks the latest front in a tech industry war in which many combatants are crowding onto each others’ turf. Lurking in the shadows for both Google and Amazon is Facebook with its own search and advertising ambitions.

“Amazon wants to be the one place where you buy everything. Google wants to be the one place where you find everything, of which buying things is a subset,” said Chi-Hua Chien, a partner at venture capital firm Kleiner Perkins Caufield Byers. “So when you marry those facts I think you’re going to see a natural collision.”

Both companies have a lot at stake. Google’s market capitalization of $235 billion is about double Amazon’s, largely because Google makes massive net earnings, expected by analysts to be $13.2 billion this year, based on a huge 32 percent net profit margin, according to Thomson Reuters I/B/E/S. By contrast, Amazon is seen reporting a small loss this year.

Amazon shareholders have been patient as the company has invested for growth but it will have to start producing strong earnings at some stage – more likely if it grows in higher margin areas such as advertising. Google’s share price, on the other hand, is vulnerable to signs of slowing margin growth.

AD CLASH

Not long after Bezos learned of Google’s catalog plans, Amazon began scanning books and providing searchable digital excerpts. Its Kindle e-reader, launched a few years later, owes much of its inspiration to the catalog news, the executive said.

Now, Amazon is pushing its online ad efforts, threatening to siphon revenue and users from Google’s main search website.

Amazon’s fledgling ad business is still a fraction of Google’s, with Robert W. Baird Co. estimating Amazon is on track to generate about $500 million in annual advertising revenue – tiny, given it recorded $48 billion of overall revenue in 2011. By contrast, 96 percent of Google’s $38 billion in 2011 sales came from advertising.

But Amazon’s newly developed “DSP” technology, which taps into the company’s vast store of consumer purchase history to help marketers target ads at specific groups of people on Amazon.com and on other websites, could change all that.

“From a client’s perspective, the data that Amazon owns is actually better than what Google has,” said Mark Grether, the chief operating officer of Xaxis, an audience buying company that works with major advertisers. “They know what you just bought, and they also know what you are right now trying to buy.”

Amazon is discussing a partnership with Xaxis in which the company would help Amazon sell ads for the service, Grether noted.

Amazon did not respond to an email seeking a comment.

STARTING POINT

Amazon can bring in higher-margin revenue by selling advertising than it can from its retail operations. By showing ads for products that it may not actually sell on its own website, Amazon establishes itself as a starting point for consumers looking to buy something on the Web.

Research firm Forrester reported that 30 percent of U.S. online shoppers in the third quarter began researching their purchase on Amazon.com, compared with 13 percent who started on a search engine such as Google – a reversal from two years earlier when search engines were more popular starting points.

Amazon now sells ads that show up to the side of product search results on its website. There were 6.7 billion display ad impressions on Amazon.com in the third quarter, more than triple the number in the same period of 2011, according to comScore.

That early success is a “huge concern” for Google, whose business relies heavily on product searches and product search ads, said Macquarie Research analyst Ben Schachter.

Partly in response, Google recently revamped its product search service, Google Shopping, by charging retailers and other online sellers a fee to be listed in results.

Founded four years apart in the late 1990s, Bezos has long worried about Amazon’s reliance on Google for traffic, according to people close to the company, while also being dubious about Google’s high market valuation.

“He’d say: ‘This is the first time in the history of the world where the map maker is worth more than the territory that it’s mapping,'” recalled the former Amazon executive of Bezos’ comments about Google’s popular online mapping service.

TENSIONS BUILD

Google’s Android system is thriving but still has not cracked the nut of how to make money from mobile search ads and sales of digital goods like games, apps, music and video.

“If they can figure out mobile ads, that would truly be Google’s second act,” said Forrester analyst Sucharita Mulpuru.

But Amazon launched a broadside against Google in 2011 with the creation of its own version of Android for its Kindle Fire tablets that replaces key Google money-making services, such as a digital music and application storefront, with its own.

Not unlike Apple, “Amazon wants to control the experience on their devices,” said Oren Etzioni, a University of Washington computer science professor. “That doesn’t make Google happy.”

The two are also clashing in cloud computing software.

Amazon started its cloud business more than six years ago, providing data storage, computing power and other technology services from remote locations. Google only launched its cloud computing business this year, but the market is growing so quickly there is still room to grab share, Etzioni said.

“I would not write Google off,” he added. “Amazon has the early lead but it’s very early.”

TRANSACT OR DIE?

Still, mobile gadgets and cloud computing are currently tiny businesses compared with the multibillion-dollar opportunity presented by advertising and online commerce.

Google recently acquired BufferBox, a company with a network of lockers that shoppers can use to receive packages. It is also testing same-day delivery in San Francisco, hinting at growing interest in a larger role in online retail.

It is not talking about its full plans for retail, but some analysts think features such as same-day delivery or “pick-up” lockers, are valuable features it can use to enhance its existing online ad business. An ad for shoes, for example, might also make the shoes available for pick-up in a locker nearby, said Needham Co analyst Kerry Rice.

If Google can own the search and the delivery, it will be able to provide the same experience as Amazon, with no inventory – “a higher margin, more efficient model,” Chien said.

Earlier this year, Google launched a new certification service highlighting merchants that ship quickly and reliably and backing it with up to $1,000 in “purchase protection.”

Google could create a database of products and send shoppers to a page that has a way to buy quickly through the company’s payments service Google Wallet, Forrester’s Mulpuru said.

Google could then send that transaction to the retailer who would ship the product to the consumer. That ability is critical, according to Schachter, who said if consumers lack the ability to purchase items through Google it will lag Amazon and eBay Inc.

(Editing by Edwin Chan, Peter Lauria, Martin Howell and Maureen Bavdek)

Asian shares steady, U.S. budget concerns weigh


TOKYO |
Sun Dec 23, 2012 9:54pm EST

TOKYO (Reuters) – Asian shares steadied in quiet pre-holiday trade after a slump late last week, but markets have become more jittery about the risk of the United States failing to avert a fiscal crisis.

Activity in other assets was also subdued, with spot gold steadying as investors took to the sidelines, while oil extended losses, with U.S. crude inching down 0.2 percent to remain below $89 a barrel while Brent futures also eased 0.2 percent to $108.78. O/R

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.07 percent after falling to a near two-week low on Friday when House of Representatives Speak John Boehner failed to gain support for a tax plan, raising fears the U.S. may not be able to avert the “fiscal cliff” of automatic spending cuts and tax increases set to start January 1.

The White House on Friday tried to rescue stalled talks but there was little headway as lawmakers and President Barack Obama abandoned Washington for Christmas.

Many market players still expect both sides to reach a compromise before the year-end deadline but heightening tensions were likely to stifle trade already slowed by the holidays.

U.S. Treasuries gained a safety bid on Friday from fiscal cliff worries, which put many investors on edge and drove down global equities markets, the euro and oil futures.

Australian shares .AXJO were up 0.2 percent but trade was extremely thin, with Monday’s session shortened ahead of the two-day Christmas holiday and many players already away.

South Korean shares .KS11 edged up 0.1 percent in light trading before Christmas Day, with the weakening Japanese yen and U.S. fiscal uncertainty keeping investors uneasy.

“With a dearth of good news, shares will undergo corrections in the final week of this year, albeit within a limited range” said Park Hyeong-joong, an analyst at Meritz Securities.

“A chance is growing that the U.S. fiscal issue will not be resolved by this year-end,” Park said.

Japanese financial markets are closed for a public holiday and will resume trading on Tuesday.

The dollar inched up 0.2 percent to 84.38 yen, having fallen below 84 yen on Friday. The dollar hit a 20-month high of 84.62 yen on December 19.

The yen has been pressured by expectations the Bank of Japan will be compelled to adopt more drastic monetary stimulus measures next year as incoming prime minister Shinzo Abe has demanded bolder action by the central bank to bring Japan out of decades-long deflation.

Abe stepped up pressure over the weekend, saying on Japanese television on Sunday that he will try to revise a law guaranteeing the BOJ’s independence if his demand for a binding inflation target is not met.

Currency speculators increased their bets against the U.S. dollar in the latest week, according to data from the Commodity Futures Trading Commission released on Friday. Bets against the yen fell after reaching a more than five-year peak.

But market players generally see the dollar staying firm for now as a U.S. fiscal impasse will likely continue to sap investor appetite for risky assets and raise the dollar’s safe-haven appeal.

“It looks like all momentum for the fiscal cliff negotiations is gone,” said Rob Ryan, strategist for RBS in Singapore. While the dollar could sway by year-end flows, “on balance I would see a stronger U.S. dollar into the end of the year,” Ryan said.

EPFR Global, a fund-tracking firm, said on Friday that investors around the world pulled $4.1 billion from bond funds worldwide during the week ending December 19, the most since August 2011, and favored riskier stock exchange-traded funds despite the U.S. budget worry.

ETFs are generally believed to represent the behavior of institutional investors, and can be used opportunistically to bet on various indexes.

The euro stood steady around $1.3180.

In Italy, Mario Monti announced on Sunday he would consider seeking a second term as Italian prime minister if approached by allies committed to backing his austere brand of reforms. Monti resigned on Friday but has faced growing calls to seek a second term at a parliamentary election on February 24-25.

At stake is the leadership of the world’s eighth largest economy, where recession and public debt of more than 2 trillion ($2.6 billion) have aggravated investor concerns about growth and stability in the euro zone.

Italy faces a huge bond redemption in the first quarter of 2013 and its failure to secure funding could refuel concerns about sovereign financing not only in Italy but also similarly indebted Spain, hurting sentiment towards the euro.

(Additional reporting by Hyunjoo Jin in Seoul and Masayuki Kitano in Singapore; Editing by Eric Meijer)

Boost Your Energy at Work: 10 Ways

Feeling tired at work? Forget the triple shot latte and try these 10 tips instead. You’ll be raring to go!

Chris Schmidt/Getty

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You may have read the stats. Workplace productivity is up and employment is down. That can only mean that fewer people are in the workplace but now they have to work harder and longer. No wonder so many people are always tired and sucking down coffee and energy drinks.

Since there are still only 24 hours in a day you not only have to be more productive, but also maintain high energy and stay happy. Otherwise you’ll drag yourself down, end up a miserable, grumpy, scrooge, and take a lot of folks with you on the way.

The demands of work are keeping people so busy these days sometimes they forget the simple things that make them feel energized. Here are some tips to keep your energy soaring that don’t require the use of drugs or an unlimited Starbucks card.

1. Start Your Day With a Workout

You would think a big workout would make you tired, but actually getting that blood pumping first thing will keep you going for the day. Don’t forget a good breakfast as well, solid fuel to stoke the day’s fire.

2. Take a 20-minute Power Nap

Of course you don’t want your colleagues to see you sleeping on the job, but studies have shown that a brief power nap can help revitalize you for the whole day. One employer I know actually set up a motorized massage chair in a designated “nap room” for employees and requires they use it for breaks. Check out Inc. columnist Jessica Stillman’s power nap primer.

3. Remove All Personal Grudges

All that emotional baggage takes its toll day in and day out. Whether it’s anger you feel for a coworker or even someone who is distant from work, the emotions can be distracting and absorb energy. We like to think we can ignore the feelings, but often we just mask them and that takes energy in and of itself. Make a list of your grudges and commit time to reconcile each of them until they are gone. Soon you’ll feel like someone added minutes to your clock every day.

4. Take a 15-minute Humor Break

Laughter is a natural energizer. Those endorphins from chuckles are as good for you as a solid workout. Sign up for the joke of the day, or cruise YouTube for some funny videos. Grab some colleagues and have a joke pow-wow. You’ll lighten the atmosphere all around, and help everyone feel good about the rest of the day. This is a good one for 2:30 in the afternoon when the classic after lunch doze is coming on.

5. Take a 15-minute Walk

Sometimes we just need to get out. It doesn’t matter if the weather is hot, cold or rainy, getting up from that chair and computer can rejuvenate your body and your mind. Leave the smartphone behind as well. Stretch, breathe and take in the outdoors to feel refreshed and awake.

6. Read Something Fun During Lunch

A little escape is good to clear the mind and reset your energy. Short stories are my favorite for lunch breaks. Not only are they entertaining, but finishing one at lunch gives you a sense of completion which helps boost your confidence to get back and fight through the day. Try a classic like Mark Twain or Rudyard Kipling, and you’ll feel like you are doing something worthwhile with your time. 

7. Resolve Any Conflicts With Your Boss or Colleagues

Concern over conflict can eat away at your attention and tire you quickly. Don’t hold back.  Confront issues head on. If you are open, empathetic, and diplomatic in your approach you may forge a closer bond that will make coming days easier to enjoy. 

8. Do Something Nice For a Colleague

Energy is easily transmitted from person to person. This tip helps on so many levels. It’s energizing to think about someone else, the actual act of giving creates a natural high, and of course gratitude provides plenty of energy as well. Try this hat-trick every day for a week and feel the surprising buzz.

9. Call a Good Friend and Chat for 15 Minutes

Nothing perks up my day more than time with a close friend. Whether it’s quick catch up, or a chance to vent some of the day’s frustrations, this short, fun reconnect will recharge your batteries and give you the support required to battle any tough day. The best part is that you will give your friend the same benefit.

10. Make Sure Your Work Activity is Fulfilling

If you hate what you do then none of my suggestions and no amount of caffeine will energize you enough to grind out depressing workdays continuously. Find a way to get paid doing what you enjoy. No need to make yourself and everyone around you miserable. Life is short and you are entitled to enjoy every day of it.

3D Printing Has a Bright Future With Dark Problems

DIY gunsmithing is just one potential issue 3D printer companies must decide how to handle. But there are many more risks on the horizon.

3d printed gun

Courtesy of Defense Dist.

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In the wake of the Sandy Hook elementary school in Newtown, Conn., many organizations have felt compelled to react, to do something. Among those is MakerBot. The 3D printer company announced recently that it would no longer host plans for a key assault rifle part on its Thingiverse website, which lets users upload files to make virtually anything with one of the company’s devices.

The use of 3D printing in business has enormous possibilities, whether in manufacturing shoe parts or creating parts of the Iron Man costume for a movie. But companies in the 3D space are learning an old lesson: New technology brings along new problems and issues.

MakerBot isn’t the first 3D printing company to come up against the possibility of DIY gunsmithing. As recently as October 2012, commercial 3D printer company Stratasys clashed with an online group that wanted to build its own guns. When it learned of the project, the company cancelled the lease and picked up the printer.

It was only early in 2012 that MakerBot took on the consumer market. But in February, the company had added terms prohibiting the uploading of weapons-related files to its site, according to CNET.

MakerBot told CNET the reason was that the file violated the website’s terms of service. And yet, the publication had asked the company about this particular issue back in August. MakerBot admitted that it always had the choice to remove the gun part, but had not previously exercised it.

Often, businesses want to officially cover themselves against potential legal problems. But espousing a stance without doing anything only postpones a problem and does not solve it. And when you’re in the business of enabling people to easily make things, you have plenty of potential problems facing you.

Forget weapons, for a moment. A PR firm recently touted someone’s contention that 3D printers could let people reproduce copyrighted designs. Yes, I know, it sounds like a law firm looking for a new line of work, but the possibility is actually there. Not only could 3D printer companies face potential pressure from major brands, but those brands will now have to expand their anti-infringement activities beyond looking for factories that make knock-offs.

At what point does a 3D printer manufacturer or service firm face liability because a consumer makes a product or part that breaks under use, possibly causing injury or damage?

The future of 3D printing is still bright, but there are some dark clouds on the horizon, and entrepreneurs in the space will have to deal with them.

2 Women Serial Entrepreneurs Tell All

Susan Leger Ferraro, founder of an early-childhood schools chain, and Laura Fitton, digital business owner, irreverently detail what has helped them most along the way.

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Keep your equity in your pocket. Help out your mentor. That advice and more emerged during an Inc. panel this week in Boston titled “How I Did It: Women Entrepreneurs Tell All.” 

On the panel, Susan Leger Ferraro, repeat entrepreneur and founder of Little Sprouts, a chain of early-childhood schools that she sold in 2008 to American Education Group, was joined by Laura Fitton, who founded Pistachio, a Twitter consultancy, and OneForty, an app store for Twitter that HubSpot acquired last year. Maisha Walker, founder and president of Web design and Internet marketing firm Message Medium, moderated. 

Here’s what Ferraro and Fitton recommend you take from their experiences:

Get mentors.

Ferraro has had six mentors (“all men–but very evolved men”) including Deepak Chopra, whom she met after chasing him down a golf course in 2002. “If you want to talk to someone, you make sure to talk to them,” said Ferraro. “If they resonate with you, you get their number.”

Fitton, whose mentors include Guy Kawasaki and Seth Godin, pointed out that successful businesspeople like mentoring energetic entrepreneurs because it expands their own spheres of influence. When you do find mentors “don’t ask lazy questions–ask specific questions,” she advised. “Make it easy for them to mentor you.”

Both women emphasized that mentoring should be a two-sided relationship. Ask your mentor what you can do for him or her–not just the other way around.

Volunteer.

Ferraro gained experience and relationships critical to starting her own company by working a few hours a week–gratis–at other companies. “Those experiences taught me what I didn’t know as a business leader,” said Ferraro, adding that the greatest value lay in observing other leaders in action.

Fitton warned against using busyness as an excuse for not volunteering. “It’s easy to say, ‘I’m a single mom running a startup’,” she said. “Everyone will buy that excuse. But it’s a freaking copout. You have the same 24 hours a day that Mother Teresa had. That Gandhi had. You woman up and decide what you’re going to do with it.”

Always say yes.

Leap or lose. If things don’t work, Ferraro points out, you can always pull back. Seven years ago, WGBH, the public television station in Boston, wanted to launch a pre-school literacy curriculum in the classroom. The organization had approached 15 school chains across the country offering to train teachers and provide the necessary resources, but had been repeatedly rebuffed. The program seemed like too much work. Its effectiveness wasn’t assured. “I said, ‘When do you want to start?'” Ferraro recalled. Today, WGBH is still one of Little Sprouts’ most important partners. “I can’t believe all those other people told them no,” Ferraro said.

Approach VCs. 

Fitton advises against trying to “parachute in on the most-widely-read, popular venture capitalist blogger.” Instead, she said, start with your inner circle–those who trust and believe in you. Find out whom they know in the venture community or on its periphery. Then use those contacts to start working your way closer.

“When an entrepreneur cold calls me and says, will you introduce me to some angels, I tell them it wouldn’t work because I can’t give a credible introduction of who you are and what you’re doing,” she said. “So start with the people closest to you, even if they are eight degrees from venture capitalists. They will get you one step closer.”

Or don’t approach VCs at all.

Eight weeks after emerging from the Tech Stars accelerator, Fitton’s company, OneForty, closed a $2 million venture round. It happened fast–too fast, said Fitton. The company wasn’t ready for it. “Our burn rate went way up and we became much more expensive,” she said.

That happened before OneForty had quite settled on a direction. Taking venture capital means “hiring a boss you can’t fire,” she added.

Ferraro’s venture investors insisted she relinquish several projects that mattered to her, including work in the community, and with the homeless. “I had to do it under the radar and behind their backs,” Ferraro said. She advised attendees to consider debt first and “keep your equity in your pocket.”

Don’t craft culture.

Fitton said having a mission and core values is important. But they are “bullshit unless you make your hiring and firing decisions based on those things.”

She adds that if you claim something is a core value but wouldn’t fire someone for not embodying it, then it is not really a core value. “Do you have the balls to tell your best engineer, ‘I’m sorry, you’re not a fit. You shouldn’t work here anymore because you’re disrupting the culture.’ Even though they wrote 80% of the code?”

Find balance.

A single mother, Ferraro insisted on “sacred time” with her three sons while building her companies. “There were hours where I wouldn’t answer the phone except in an emergency,” she said. “Whoever was my second-in-command I would say, ‘I’m taking two hours. We’re going to the zoo.'”

Fitton’s experience was different. Forced to relocate to California for three months during the launch of OneForty, “I threw my kids under the bus,” she confessed. The children, aged two and three, stayed with their father, from whom Fitton was divorced, “and his awesome girlfriend who is now their stepmom.”

Balance did come eventually. Since selling the company, Fitton, who is now HubSpot’s inbound marketing evangelist, has pulled back. Last spring she worked four-day weeks to spend more time with her kindergartner.

Be nice. 

Simply being gracious can set you apart. Ferraro said that when she is asked to speak at an event she sends the organizers something from Edible Arrangements to thank them for the opportunity. Fitton described how she met social media expert Gary Vaynerchuk, who was thronged by admirers at a party following a presentation. “All I could think of was, ‘Someone needs to get Gary food,'” said Fitton, who brought him a plate. The two have been close ever since. “Kindness and consideration,” said Fitton, “are low-hanging fruit.”

Expand Your Definition of ‘Great Salesperson’

Entrepreneurs gripe that great salespeople are scarce. But the real problem is that most companies’ concept of a great salesperson is too narrow.

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At the Inc. 500|5000 Conference in October, I had breakfast with some entrepreneurs who were talking about their problems recruiting salespeople. “There are plenty of salespeople out there, but really good closers are hard to find,” one of them said. “I mean, you have to be able to ask for the sale. If you can’t handle that, you’ll never be a good salesperson.”

I couldn’t disagree more. There’s a lot more to selling than closing, and all good salespeople aren’t closers. Some of the best I’ve known have been great at everything but closing–weeding out prospects, romancing them, making them feel warm and fuzzy. When I was CEO of CitiStorage, we created a system to help out salespeople who had trouble asking for the sale. When they thought it was time to close, they would bring the prospect to me, and I would finish for them. Salespeople in our industry brought in, on average, 15,000 units of new business per year. At CitiStorage, the number was 100,000.

Of course, this kind of system won’t work unless your salespeople think of themselves as a team, rather than as individuals out for themselves–which brings us back to the shortage of closers. The problem is not that there are too few closers. The problem is that most companies need to hire closers and only closers, because of their compensation systems–because they pay salespeople on commission, and there’s no room for nonclosers in such a system. After all, if they can’t close, they won’t get paid.

I believe that a well-managed team of people with complementary talents will always outperform a collection of hotshots out for themselves. You see it in sports, and you see it in business. That’s why I instituted a salary-plus-bonus system. Not only did it allow us to harness the different talents of our salespeople, but it also removed the greatest obstacle to teamwork. Because bonuses were based half on the company’s success and half on each individual’s contributions in various areas–not just closing–salespeople worked closely together, covering for one another when necessary and helping one another out in difficult situations.

So here’s a thought for those of you who are having trouble finding closers: Maybe you’re better off without them.

 

Barclays To Overhaul Pay And Bonus Under Sants

Incoming Barclays PLC (BARC.LN) compliance chief Hector Sants has been tasked with rewriting rules on salary and bonuses to drive down costs and stop criticism of executive pay policies, the Sunday Telegraph reported without citing sources.

The former head of the U.K. Financial Services Authority has been asked to play a key role in writing the new pay strategy, to be revealed at the bank’s strategic review on Feb. 12, the newspaper said.

Sants will work with new Chief Executive Anthony Jenkins to reduce compensation levels and change the way performances are evaluated, The Sunday Telegraph said.

This will mean that future payouts will be based as much on the “social impacts” of deals and products sold as on their financial goals, the paper said.

Mr. Sants and Mr. Jenkins replace top executives who quit over the Libor-fixing scandal, including former CEO Bob Diamond, who was criticized for his fat pay packages and perceived risks in the investment-banking business he built.

Last week the Financial Times reported that Sants’ remuneration package was worth up to GBP3 million as part of his move to Barclays next month. A Barclays spokeswoman declined to comment.

-London Bureau, Dow Jones Newswires; +44 (0)20 7842 9320

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