If you have never heard of Groupon recently, you probably are not working in the tech industry because it is all over the blogosphere. After all, growing from zero to US$1.35 billion valuation in 18 months is pretty AMAZING.

So what are their secret weapons? What are they doing right? How are they gaining customers at such a rate? Let’s take a look.

Crystal Clear Value Proposition

Groupon’s goal is clear: help introduce people to your business. Each coupon on the site has a predetermined minimum. If not enough people sign up for the deal to take effect, neither Groupon nor the business makes any money. Groupon makes money by getting a cut of these promotions from the retailers.

According to Jeremy Liew from Lightspeed Venture Partners, Groupon went from around US$100,000 in revenue in Jan 2009 to around US$10 million in revenue in Jan 2010 – a 100X increase in just twelve months.

When many retailers are struggling to survive in this economy, Groupon has become their savior. According to Andrew Mason, Groupon’s founder and CEO, nearly all of their deals have succeeded so far. And there is currently a 120 deals waiting list in Chicago alone. As you can tell, Groupon uses collective buying to create a win-win for local businesses and their customers. No wonder so many merchants are eager to participate.

Built Virality inside the Product

Since each deal is only good for one day, it creates a sense of urgency for the users and make them feel excited.

Obviously, users want to make sure the minimum is hit. What can they do? Tell their friends. Groupon takes that social component to the next level through Facebook Connect and Twitter, inviting a user’s entire network to get in on the deal.

Their user acquisition costs? Zero.

Groupon also invested a lot resources on customer service, from our help line to quick online response to customer issues. So customers are happy and continue to help Groupon reach new heights.

Alternative to Traditional Advertising for Local Businesses

Andrew wants people to treat Groupon like “a city guide that offers promotions“. He wants to help people have fun in the city and save money using the tremendous power of group buying.

In order to do so, they have to work with retailers to create attractive deals. Like the founder said:

We help businesses navigate the new world of social media and Internet marketing in an approachable, creative way. An appearance on Groupon validates these businesses as a cool part of their community.

For local business owners, Groupon has become an alternative to traditional advertising, where they pay up front and hope for the best. In this new platform, these promotions are like a whole new form of local advertising, where merchants only have to pay for REAL result.

Moreover, because of those unbelievable prices, customers will purchase something they’ve always wanted to try but never had the chance, bringing a flood of new customers to local businesses, at least some of them will hopefully get hooked and become loyal clients eventually.

Negative Working Capital

In accounting:

Working Capital = Current Assets – Current Liabilities

It is the amount of money that a business needs to stay in business. According to Business Insider:

Some businesses have negative working capital: they get money from sales before they pay suppliers.

For companies like Walmart and Amazon, they actually need no working capital because they negotiate deals in such a way that they only pay for things after 1-3 months. Most of the time, the stuff they buy is long sold by then. And people who go to Walmart to buy stuff will pay immediately, which means that Walmart is actually sitting on a pile of cash that it really does not need. So they can pay their debt slowly or use the extra cash for investment.

These businesses basically are financed by their customers. Negative working capital is a tremendous thing to have in a business. Apparently, Groupon has a large negative working capital (4 million Groupons have now been sold already). They first charge users upfront, take a cut and pay merchants back later. This is one of the reasons why Groupon is such a great business.

What’s your opinion? What makes Groupon such an attractive investment to VC? Let us know in the comment area.

*UPDATE: One of our readers asked what caused the visit jump from a hundred thousand or so to 2 million in mid 2009.

*ANSWER: Good question! Groupon originally operated only in Chicago, New York City, Boston, Washington, D.C., Los Angeles, and San Francisco. They started to launch to other cities in mid 2009, like Atlanta, Denver, Dallas, San Diego, Phoenix and Seattle…etc, more than 20 cities by the end of 2009.

*CORRECTION: Oops! It seems my answer is not correct. Andrew, the founder of Groupon, just told us the real answer in the comment section. “mid-2009 traffic jump: we used to be groupon.thepoint.com; that’s when we changed to groupon.com”. Thanks a lot, Andrew!

**UPDATE 2: One of our readers asked how Groupon has managed to distance themselves from the pack.

**ANSWER: And he got the answer from Andrew directly on Twitter! His answer, “customer service, copywriting, etc… all the little things you put time into when you care about more than making a quick buck”.

If you enjoyed this post, get free updates by email or RSS.

This is the second installment of the “Startup to IPO” series. Last time we talked about how Vistaprint, Rackspace, OpenTable and Salesforce.com have distinguished themselves as a very special and elite breed of institutions. Now we will look at the obstacles these companies have faced and how they overcame each of them.

As you can tell, leadership and vision alone won’t guarantee success. These four elite entrepreneurs have also gone through the ups and downs of a startup life. As Charles Dunstone, the founder of Carphone Warehouse, would say:

“It’s not supposed to be easy. If it was, then everyone would do it.”

Based on what I have learned from these four companies, I find out that, as an entrepreneur, you don’t have to do everything right all the time. You just have to keep asking questions and try different solutions. Never lose your heart. And above all else, don’t ever give in.

Transforming from the Mail Order Catalogue Model

When Vistaprint was founded in 1995, France was gripped by the largest strike movement in the past 40 years. Because of the strike and lack of financing, Vistaprint almost went out of business, forcing Robert Keane to restart his company again in the spring of 1996. Definitely not a smooth start for a startup.

In the beginning, Vistaprint was selling their products via direct marketing catalogue. Robert convinced Microsoft France to distribute their catalogues in every box of Microsoft Publisher. In this way, Vistaprint was able to reach their targeted small business customers with extremely low cost, 10 times cheaper than acquiring customers in a direct marketing model, allowing them to grow from zero revenues in 1995 to 2.5 million euros by 1999.

Yet the company saw a problem with their business model later on. Since Microsoft only wanted them to advertise to their new customers but not their existing user base, their revenue started falling and they could not grow as fast as they want. That was a love-hate relationship. On the one hand, Microsoft was a great partner leveraging their marketing effort, and on the other hand, Microsoft limited their growth.

The company knew that they need a new business plan if they want to grow larger. That was when the Internet came. Thus Robert decided to move away from the declining catalogue business to become an online marketer of small business printing.

To benefit from the near-zero cost distribution channel of the Internet, they decided to develop a web publishing program which makes you feel like the software you run on your desktop. Sounds familiar with all of the Web App Hype these days? And that was in 1999.

Robert later explained:

The idea was to give [the web publishing program] away free across the Internet and then utilize the Internet to conduct our direct marketing. We came up with a production technology where we aggregated orders together. Those three changes, in retrospect, were important in changing the trajectory of VistaPrint.

Not Getting VC Money

In fact, there is one more major strategic move contributing to their survival. Robert believes the fact that Vistaprint could not raise funding during the dot com crash actually saved the company. At that time, a lot of Internet bubble companies raised huge amount of money helping them to live until 2002-2003. When Vistaprint moved to the US in 2000, they could not raise money so they had to cut costs to keep profitability or they would go out of business. In other words, other companies did not have to face reality with their big venture capital money allowing them ignore operating costs and cash flow. Like Robert said:

“As much as I would like to say we were brilliant, I really think success is hard work combined with talent from a lot of different people, and some luck. We were lucky to not get venture capital because it forced us to work harder to get to profitability.”

Imagine you were in Robert’s position, will you have the gut to change your business model and leave your best partner, Microsoft, when facing crises? Or you will just stay put and give in? We can easily see that “change” is deeply embedded in Vistaprint’s corporate culture. They did not satisfy to be a merely profitable firm. They always want to survive and thrive in the long term. Without proactively looking for the next opportunity, Vistaprint probably would remain a small company working with Microsoft. How about your company? Do you want your company to survive in the short term or grow in the long term? Given the current economic crisis, may be it is a good time for your company to change.

Huge Consolidation and Commitment to True Profit

Similar to Vistaprint, Rackspace also went through the tough time during the dot com bubble. After some wild spending with big VC funding, Rackspace had barely enough cash to sustain the business for 3 months in the fall of 2000. Due to this experience, they have learned that, in order to survive, they have to stay lean and build the company organically.

While their richer rivals continued their wild spending on costly data centers, Rackspace had to grow cautiously, buying servers just enough to meet their customer demand, growing one customer at a time.

As most people know, the hosting industry is extremely competitive, causing a lot of consolidations, bankruptcies and failures. Besides providing their excellent “Fanatical Support“, Rackspace has developed a principle of achieving “true profit” which enables them to reach the top. They defines true profit as a company’s operating profit (after taxes) minus its total annual cost of capital. The management has decided that if a project generated lower than 15% profit margin, they would just shut it down.

Rejecting a $20 Million Deal

For example, Rackspace once sold a fast-growing, moneymaking subsidiary because it doesn’t meet the rule. They also passed a $20 million deal with Morgan Stanley which would put their little-known firm on the map. Their CEO explained:

“We could have made a profit on this deal, but not enough to risk our capital. Were we willing to let Morgan Stanley use our multimillion-dollar asset and make a profit of only $600,000? No. We are 100 percent committed to making a true profit.”

The company believes this strict financial discipline has helped them to avoid the dangers of rapid growth and stay in the reality.

If you was the CEO of Rackspace, would you pass the chance to work for a respected giant company? Is your company really creating real wealth or just growing for its own sake? Are you focusing on the right projects that give you true profit? If not, your company probably is wasting money. And the costs for fixing these missteps could be very high.

Slow Start

To many people, it is hard to believe OpenTable has survived the dot-com crash which put a lot of web companies out of business.

In 1999, not many restaurant owners could see the benefits of online reservation management, especially when they already had more business than they could handle. Consequently, the company took off very slowly. They have to hire an aggressive sales force to persuade each owners that online reservation process can actually increase the number of customers, improve customer service and lower their costs. Since they have to do that one restaurant at a time, it took a long, long time before this business model and concept were proven.

It took 3 years for OpenTable to serve its one-millionth user. Yet as their popularity increased, restaurants actually suffered if they were not listed on the site. They have to join OpenTable voluntarily, paying one dollar for each referred diner. Now the company seats an average of approximately 2.8 million diners every month.

OpenTable is a business that almost didn’t happen, constantly being told “no”, but getting things done anyway. Do you have the determination to prove the doubters wrong? Does your company have the patience to start slow and smart?

Last week, Marc Andreessen, the founder of Netscape and Ning, also talked about the fact that not many startups going to IPO these days. He urged venture capitalists stop whining about Sarbox and other factors that are hurting their ability to take companies public. So what is his solution?

“Build Companies More Valuable and You Won’t Have this Problem.”

It sounds so easy but is extremely hard to do

In the next post, let’s talk about the growth strategies of these companies.

Photo source: mikebaird @Flickr

Part 1: Leadership & Vision
Part 2: Obstacles
Part 3: Growth
Part 4: Differentiation & Marketing

If you enjoyed this post, get free updates by email or RSS.

Doctors, lawyers and consultants are widely considered as non-scalable professionals. Yet the founders of LegalZoom.com have successfully combined legal services and the Internet into one business model. Below is an inspiring story about their startup story which I believe all entrepreneurs would love to hear about.

In February 2008, the founders of LegalZoom.com, Brian Liu and Brian Lee, were invited to speak at the UCLA Entrepreneurship Week. I was so excited about this because I’ve heard about their success multiple times in the past. Did you see their TV commercials on CNBC? What’s better than listening to the founders talking about their own founding story?

Currently, LegalZoom is the nation’s leading online legal document preparation service. They started the company with five UCLA interns in 2000 and quickly grow the business into a company with revenue more than $6.5 million and around 350 employees.

Very Early Stage

Brian Liu and Brian Lee knew each other when they attended the UCLA School of Law. Although both of them have worked as attorneys at some of the most prestigious law firms after graduation, they believed that there should be something better than a 90 hours job.

So they quitted their high-paying jobs and tried to raise fund from Venture Capital for their online legal document service startup. Unfortunately, the whole stock market crashed on the day they went to the Venture Capital office. The VC simply asked them to come again in the future.

Usually people will just give up in this situation, right? But these two founders decided to continue their venture because they believed in their idea so much. Eventually, they got the business off the ground using their own money and funding from family and friends. (Site note: their first office is actually in one of the founders’ condo and they didn’t pay any salaries to themselves for one and a half year. Talk about bootstrapping your startup.)

Credibility

For an online legal related company, they understood that TRUST is the most important part for their business. If the customers didn’t trust your site, no one is willing to give his/her personal information to you.

Therefore, Liu and Lee tried to find a high-profile attorney to be their partner so people will recognize and trust their company right from the start. Not surpisingly, they aimed for the best possible target they could find: Robert Shapiro, who is most notable for being part of the defense team which successfully defended O.J. Simpson from his murder charges. Everyone in the US knew about Robert at that time. However, how can they connect with such a famous person?

They thought calling 411 is the best way to do that. So they called 411, got the home phone number of Robert Shapiro and called him at night. For some reasons, Robert really picked up the phone himself. Amazing! After Brian told Robert that they was planning to pitch him a business idea, the famous attorney planned to hang up immediately. But they asked him to give them 2 more minutes. Robert agreed. And Two minutes later, he likes their business ideas so much and finally becomes their business partner and co-founder of LegalZoom.

Keep the Customers Happy

So what’s the reasons for LegalZoom’s success? I believe it’s because both founders always focus on what make the customers happy. Lawyers in general have earned a bad reputation for their ambiguous charges. Customers often have to pay for a ridiculous amount of money for simple legal document preparation services. Liu and Lee saw this huge opportunity of providing low-fare online services which are fast and affordable. They thought that some legal services can actually be processed automatically online with much lower costs.

Since they understood that lawyers are bad at customer services, they knew LegalZoom had to change that perception and to take customer services very seriously. That’s why more than half of their 350 employees are dedicated customer service representatives. They believe entrepreneurs should always think in the customers’ standpoint because that’s the key to customer satisfaction.

Start Small

Many entrepreneurs consider VC funding as the only way to get funding, yet Brian reminds us that we shouldn’t be scared to start small and make the business pay as it goes. It doesn’t take that much money to start a web business nowadays. Because they didn’t get any VC money, they could slowly build their business for long term and didn’t have to worry about when the VC will cash out.

Although LegalZoom is in a very competitive industry now, they aren’t afraid of startups with a lot of funding from VC as they tend to overspend, especially on marketing, and can’t stay small in the early period. This kind of startups usually won’t stay long. The competitors that they are afraid of are the ones that are similar to LegalZoom: start slow and smart.

Build the Right Team

LegalZoom only hired when they need. They never overhire. When doing business with wrong people, nothing can get done. Therefore, they like to pick business partners who are different from themselves. They look for people who have different personalities but still can work together.

Originally, they didn’t want middle managers but when LegalZoom became bigger and bigger, they realized that they need to hire professional managers to help them manage a large group of employees. When the office has more than 20-25 people, they just can’t do everything on their own. At the same time, they don’t want to micromanage their employees. They want to find ways to empower people so that they can do things independently.

Competitive Advantage

Liu and Lee believe competitor advantages are more important than barrier to entry in their business. Their competitors are lawyers and most of them are not good business people. They don’t know how to provide good services. As a result, their superior customer services set them apart from competition.

Also, they have built a strong local relationship as they are so close to customers. A lot of their customers are entrepreneurs who need legal services. They are entrepreneur themselves so they fully understand what their customers want. They are honestly trying to help their customers. Meanwhile, they believe LegalZoom is able to do better in every services they come out so they are not scare of big players in the industry.

The goal of LegalZoom is to become a brand name of law. And it seems they are not that far away from that goal.

(Note: This is a re-print of my post in 5/5/2008 in my personal blog. )

If you enjoyed this post, get free updates by email or RSS.

Our team was so obsessed with the philanthropic model created by Marc Benioff at Salesforce.com. So we have decided that this blog should have a bigger mission than helping others to grow their businesses. As entrepreneurs, we want to help someone similar to us, who are willing to take risk and believe they can change the world. That is why we think Kiva is our perfect match.

Kiva is the world’s first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs around the globe. According to Kiva, the people you see on the site are real individuals in need of funding – not marketing material. For example, Mrs. Tagoeva lives in the Varzob district. She is divorced and has 9 children. So she is requesting a loan in order to purchase livestock to support her children and she still needs $350 more to get the loan she requested. If you want to help, Kiva allows you to lend as little as $25 to help entrepreneurs like Mrs. Tagoeva and as they repay the loan, you get your money back.

If you want to learn more, 37signals has written an excellent post about this wonderful service.

We have just created a Lending Team at Kiva for people who understand the sufferings that every entrepreneurs have to go through and believe entrepreneurs need to have a mission that is bigger than making a profit.

If you join our lending team, we can work together to alleviate poverty. Web technologies have empowered people moving ideas at unprecedented scale. So we believe the power of philanthropy is scalable, too. Please join us to help some of the world’s best and toughest entrepreneurs. Yes, we can change the world now, $25 at a time.

Photo source: jup3nep @Flickr

If you enjoyed this post, get free updates by email or RSS.

During the interview of Chance Barnett, the founder of GIG.FM, at Mixergy.com, Andrew and Chance mentioned that many startups just think about how to make their companies more viral, how to build a cooler product, and how to get on TechCrunch. Yet Chance, as a successful direct marketer, has a different mentality. He always thinks of how to get a dependable source of traffic and convert it into real profit.

Andrew believes that there are two communities of people in the business world. On one side, we have the “Cool Kids” who are always on TechCrunch, always have the latest iPhone, and always build the latest apps for Twitter. And then, we have the “Internet Marketers” on the other side. They are the ones making real money online but never get covered in mainstream media. They only focus on optimizing landing pages, testing different keywords, and utilizing direct marketing on Google.

No More Larger-Than-Life Entrepreneurs

Knowing this fact makes me wonder if all those cool startups are doing business the right way. Today many young entrepreneurs aim to build companies with the goal to sell them. While looking for a quick exist strategy is nothing wrong, I seldom see young entrepreneurs who define success on a very big scale, like Steve Jobs, Jeff Bezos, Howard Schultz…etc. I am talking about those who believe they can transform society and build great, lasting companies.

So why does that happen? Why so few startups go public nowadays? Is that because everyone is afraid of the costly regulations of the Sarbanes-Oxley Act? Do they just want to be inventors but not company builders? Or the problems they are solving are too small? Or they simply don’t want to grow large?

In order to answer those questions, I think it’s a good idea to learn from the past successful entrepreneurs who’ve successfully took their companies public. I want to find out why they were able to transform their companies from startups to IPO, from good to great. Like Jim Collins said:

…the best way to understand how great entrepreneurs become great company builders was to take the greatest companies of the 20th century and then rewind the tape of history to when they were start-ups.

Considering that both Built to Last and Good to Great focused on giant public companies, I want to talk about smaller companies which are founded in the past 15 years. Since I don’t have a 21-person research team like Jim Collins, I can only hand-pick the following 4 companies and see how they have distinguished themselves as a very special and elite breed of institutions. The reason I choose Salesforce.com, Rackspace, Opentable and Vistaprint is because they were not heavily covered in mainstream blogosphere despite their accomplishment. To get a better picture, all of these companies combine showing up on TechCrunch 1425 times in 2009, compared to 4730 times for Facebook and 4930 times for Twitter.

Although they are in different industries, I have founded that these founders share a lot of similarities which contribute to their successes.

I am going to divide this series into 5 parts which will focus on (1) Leadership & Vision, (2) Obstacles & Leverage, (3) Growth & Financing, (4) Differentiation, and (5) Marketing.

Let’s talk about leadership and vision today.

Building a Multi-Decade Business Institution

Vistaprint was founded in Paris after its founder, Robert Keane, graduated from business school in 1995. To many people, Vistaprint is just a typical online printing company. However, Robert has a much bigger vision. When asked about his company’s five years plan, he replied:

If you don’t mind, I would like to modify that to 15 years or 20 years. Great companies like FedEx, Swatch, eBay or Dell are built over decades. We are still only in the middle of our second decade. We have the aspiration to build a world-class and truly transformational business institution.

He believes that his company is more than a printing shop. He wants to make everything a small business needs in marketing, including low volume business cards printing, promotional T-shirts printing or even website building software. As long as a small business wants those services, his company will build them with great quality at superior prices. He wants to transform the small business marketing industry like what Southwest did to the airlines industry over the last 30 years.

Using advanced technologies to group similar orders in large groups, Vistaprint is able to provide short-run, low-cost, and low-volume production to small companies, a market opportunity of over $25 billion. Not until 14 years later, this huge potential of opportunity has finally been recognized by giant retailers, such as Staples and OfficeMax, but Vistaprint still remains as one of the leaders in this area.

I suspect not many people believe there could be more innovation from an industry like business card printing, yet somehow, Robert and his team have made it happen.

What is the larger purpose of what your company is doing? Do you compromise that your industry is too small and saturated so you can’t make a difference? Consider when Vistaprint just got started. Thousands of printing stores were already existed. Robert was just selling their services through direct marketing catalogues, one customer at a time. And today his company is worth $1.84 billion with $400 million in revenue.

World-Class Service

Similarly, even though Rackspace is already a leader in a crowed and competitive industry, their founders believe they are more than a hosting company. Pat Condon once said:

Our vision is to build Rackspace into one of the world’s greatest service companies striving to offer world-class service alongside organizations like Nordstrom, the Ritz Carlton and Federal Express. These companies are known for their unique customer service experience and we want Rackspace’s Fanatical Support to be similarly recognized. While we think we’re the industry leader in service, we are constantly striving to be better. I think this is one of the defining characteristics of a truly world-class service organization.

Because of their ambitious goal, one of their founding principles is to focus on serving customers with what they call “Fanatical Support“. They always believe that managed hosting is a service business and not strictly a technology business. This philosophy is deeply embedded in their culture from the very beginning. Rackspace wants to become the back office IT department for their customers, enabling them to focus on their core business but not hosting.

At that time, most of their competitors only focused on the technology end of hosting, but much less on service and support. By contrast, Rackspace believes they are in the business of providing their customers a pleasurable experience, and constantly pushing themselves to do that.

How about your company? Have you turn good customer service into your competitive advantage? Do you just follow what your competitors are doing today? Since 1998, Rackspace has grown more than 50 percent a year and there are currently 1800 Rackers (their employees) around the world serving their customers with their award-winning support everyday. Their dedication to great service enables them to grow their business from a small startup to a $1.65 billion public company today. Yes they did that in 11 years only. If they can do it, so can you.

Never Lose Faith

During dot-com boom, most people doubt that a company like OpenTable will succeed. It is a capital intensive business and difficult to scale. Chuck Templeton, the founder, wanted to create an online real-time restaurant reservation service for consumers and later added a comprehensive reservation management system to replace existing paper reservation systems in every restaurants.

Yet, in order to do that, OpenTable has to conquer territory market-by-market, restaurant-by-restaurant. Also, local market is one of the hardest and most expensive things to do well on the Internet. Doesn’t sound like a good Internet business model. Regardless of what the naysayers said, Chuck never gave in:

When we founded OpenTable.com, one of our goals was to make great restaurants…easily accessible to people who enjoy dining out…It has created a fair amount of jobs both directly and indirectly. It has provided both restaurants and consumers with a much more efficient and effective way to enjoy a meal at most of the world’s finest restaurants…All in all, it’s pretty cool.

Due to his determination, Opentable has grown to have a customer base of over 10,000 restaurants in 50 states and multiple countries, with $635 million market capital. And it is still keep growing one restaurant at a time.

The Business of Changing the World

Salesforce.com is known for its concept of the “end of software” model and successfully transforming software from a product to a service industry. Similar to Vistaprint, OpenTable and Rackspace, this company believe nothing is more important to them than making sure every customer is successful in their service.

However, Marc Benioff, the founder of salesforce.com, did something unique that every serious company builders should pay attention to. To be truly successful, Marc believes companies need to have a corporate mission that is bigger than making a profit, a concept that he learned from the Art of War. In other words, people can’t be united or focused unless they share a common philosophy—a philosophy that gives their effort a greater meaning.

He wants to make sure everyone in his company understand the importance of this idea so he created the famous “1-1-1″ model, a philanthropic program.

We try to follow that at salesforce.com, where we give 1% of our equity, 1% of our profits, and 1% of our employees’ time to the community. By integrating philanthropy into our business model our employees feel that they do much more than just work at our company. By sharing a common and important mission, we are united and focused, and have found a secret weapon that ensures we always win.

Meanwhile, some people argues that how they can provide the best services to their customers when their employees are volunteering outside. Marc simply replied:

You have to be able to go to San Francisco Homeless Connect and you have to be able to run your computers. Both of those things have to happen. A successful company can do that, and we do that, of course.

In fact, this model has become a critical part of their business, making them a more competitive company. Salesforce.com ranked No. 7 out of all the companies in the world in a magazine called Business Ethics that charts the work of companies that do corporate social responsibility. As a result, many corporations like their company and are actually more likely to buy services from them, although this is not their original intention. How many entrepreneurs would think that philanthropy could become an asset to the company and their ability to work with customers and recruit employees? Sometimes doing the right things will give you tremendous results that you didn’t expect.

Besides your core business, does your company have a core value that is shared by every employees? Do you know helping others can become your secret weapon in the business world? According to Marc, one of their biggest accomplishments is that Google has copied their 1-1-1 model exactly, creating a $1 billion non-profit foundation, compared to their own $30 million foundation.

For future entrepreneurs, how would you define success? Having a good lifestyle or inspiring millions to help other people or transforming an industry to make others more successful or becoming an entrepreneur people aspire to be? That’s your choice.

In part 2, I will talk about the obstacles these four companies have faced in the past and how they were able to overcome them.

Photo sources: (Robert Keane) @PIworld, (Chuck Templeton) @facebook, (Pat Condon) @rackspace, (Marc Benioff) @flickr

Part 1: Leadership & Vision
Part 2: Obstacles
Part 3: Growth
Part 4: Differentiation & Marketing

If you enjoyed this post, get free updates by email or RSS.