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Life Changing Conversations for Entrepreneurs

A Desk is a Dangerous Place from Which to View the World

The sign that sits outside Caterpillar CEO, Doug Oberhelman's office reads: "A desk is a dangerous place from which to view the world"

Doug Oberhelman, CEO of Caterpillar, has a sign at the entrance to top management’s offices that reads, “A desk is a dangerous place from which to view the world.”

Leading a Fortune 500 company could be an easy excuse for neglecting the little people in favor of big clients, big strategies, and public engagements. Entrepreneurs, on the other hand, can’t neglect anyone or anything when they start out. It’s all important, it’s not all comfortable, but you do everything possible to succeed. And when you do succeed, things become more comfortable. Good people join you, systems become organized, and customers show appreciation. The danger is entrenchment. Stasis. Lack of forward movement. Doug’s warning is that no matter how large your company, your leadership has to be from the front. So how to be a better leader?

Tear Down the Walls

A few years ago I pitched Mayor Bloomberg. This was when he was only Mike Bloomberg, CEO of Bloomberg Company, a billion dollar provider of financial products on Wall Street. I couldn’t help but notice the completely open office space – no private offices, dividing walls or doors in sight. Mike’s desk was on the same floor among hundreds of other employees. Joe Mansueto, founder and CEO of Morningstar, is the same way. He has a cubicle just like the rest (maybe a little bigger), but no door keeping people out.

If you value people, show it by making yourself available and laying out the welcome mat for your staff, clients, and stakeholders.

Get Out Among Your People

Even before the show Undercover Boss, there was John Edwardson, the CEO of United Airlines before he moved on to CDW. John was known to pop up at the baggage conveyor belt at United’s terminal in O’Hare airport, to help unload luggage along with the crew. I think John did this with a genuine desire to learn and understand what his employees were experiencing, and to show them a good measure of respect with his presence and attention.

Go See for Yourself

You want real boots on the ground? Check out Renee Haugerud, founder of a $600 million New York hedge fund, Galtere Ltd. Renee trades futures on commodities and currencies, but instead of staring at charts on a PC to make all her decisions she flies to her research farm in southern Minnesota to check the crops and soil for herself. Renee’s money making ability isn’t tied to being at a desk – she’s in a corn field.

We entrepreneurs assume we’ll never fall into the big company trap of losing our flexibility, our touch with customers, and our ability to out-innovate the big guys. But that means continually learning how to be a better leader. Doug Oberhelman’s promise to himself is that as long as he gets to remain CEO of Caterpillar, he will visit with clients and employees every single week. Make the same ambitious promise for yourself.

**Robert Jordan is a Forbes.com contributor. View the original posting of this article on Forbes.com.

 

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The New Patent Law: End of Entrepreneurship?

The new patent law put into place by the America Invents Act on September 16, 2011, goes into effect Spring 2013. This marks a fundamental change in US patent protection, moving away from the current first-to-invent rule to the international standard, first-to-file.

Will the new patent law endanger American entrepreneurs? (Photo credit: Wikipedia)

“Effectively, this creates a race to the patent office,” according to Patrick Richards of Richards Patent Law PC. “In a race of established, well-funded businesses with defined intellectual property protection strategies (and patent attorneys in-house or working closely with the business) versus entrepreneurs that may not have any experience with the patent system and the funds to pursue robust patent strategies, the advantage clearly goes to the businesses,” Richards said.

Although some aspects of the change are positive, including a reduced fee structure, the entrepreneur, who above all wants to “gain more certainty about their business plan at an early stage,” is likely to find the changes a net negative, Richards said.

“There are a lot of people that think (first-to-file) might favor large businesses, but no one knows how it’s going to affect” the business climate, according to Chas Rampenthal, general counsel at online legal services provider LegalZoom.com.

A solo entrepreneur who follows the rules carefully in acquiring a patent “has a pretty good leg up,” Rampenthal said, noting the law change actually reduces patent fees and possibly quickens the process.

Although companies with more resources can certainly win the race to getting in line, it “doesn’t get them a leg up on doing the inventing themselves.” He said the solo entrepreneur with a great idea remains ahead of the patent game.

What will be the impact on new business creation?

Anna Prata, an interim and turnaround executive who has worked with both Fortune 500 corporations and startups, sees trouble for entrepreneurs and investors alike. Prata says “this shift favors big companies with broad reach, resources and capabilities. They can quickly file while startups without cash on hand will not be able to protect their idea.” Prata thinks that thus far most early stage entrepreneurs didn’t need to make filing a top priority, especially not prior to fundraising, knowing they invented something and could prove it. But with the new law that’s no longer the case. “Why keep innovating if you do not have the resources to file first and claim ownership? It could really inhibit new company creation,” she said.

Prata thinks the impact of the new patent law on venture funding could also be pronounced: “VCs invest on the future promise of technology that will be patented at some point, knowing that if the start up failed they could retain the patented technology as an asset.” If that promise is threatened, she sees less investment dollars on ideas alone.

The End of Entrepreneurs?

Prata is also concerned about the potential effect on the American dream. Historically an entrepreneur could create and a large corporation would buy the entrepreneur’s company – it was cheaper to buy the little guy’s patent than attempt to re-invent it themselves. But what if corporations became a threat to entrepreneurs instead of their salvation as a rich class of buyers? Why would a corporation buy the entrepreneur’s company if it could come up with a variation on the theme and quickly file its own patent?

Veteran Entrepreneurs Say Bring it On

Veteran entrepreneur Chris Gladwin, founder and CEO of Cleversafe, knows a thing or two about patents, having authored 300+ issued and pending patents relating to dispersed storage technology. His take is that the patent reform act is a good idea. “In addition to aligning with international patent offices that are all on a first-to-file system, it is materially easier to operate. First-to-invent is just too hard to measure. It is practically impossible to know if a prior invention is lurking that hasn’t yet been filed; as a result, a first-to-invent system inhibits investment in new technology areas.” Chris thinks that first-to-file and the new Act will better enable new technology businesses and new technology jobs.

Neil Kane, founder of Advanced Diamond Technologies and now CEO of GlucoSentient, agrees with Gladwin: “I think it’s a net positive. There is a huge misconception about first-to-file. People incorrectly assume that if you give a presentation about an invention or idea, someone in the audience can run to the USPTO with your idea and patent it before you do.” Kane says that’s not the case, that in fact your public disclosure becomes what is known as “prior art” and would invalidate a patent filing.

Sure There’s the Law, But What About Patent Trolls?

Venture capitalist Matt McCall of New World Ventures in Chicago is among those who think the new patent law is a net plus. “Patents are not core in our process. Patents don’t keep players out but can help from being sued.” McCall hopes the new law hinders patent aggregators, often called “patent trolls”, who sue firms they claim infringe on their patents. “We’ve had too many companies victimized by trolls who have no intent to commercialize, just tax tech firms.”

Nancy Hill, president of the American Association of Advertising Agencies, says the new law “doesn’t solve the problem in our industry.” Ad agencies are a prime example of the creation of new intellectual property, building web-based products and services on top of open source code for clients and believing they are free and clear of patent claims. Hill says agencies believe they are building products “in the public domain” but continue to face legal challenges from patent trolls, making for an impossible situation that won’t be improved by the new law taking effect.

Entrepreneurs, what do you think – is the new patent law and first-to-file going to be a blessing or curse for you?

 

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Company Decision Making Doesn’t Need to Start at the Top

Dane Miller, founder of Biomet, had a hard time keeping up with the IT world. Trained as a biomechanical engineer, he was a brilliant CEO and inventor, but never pretended that he knew it all. When the company was buying a half million dollars worth of computer hardware he said that he would sign a generic name on the requisition to show that someone lower in the company could know as much about the decision as he did.

Dane forced down company decision making at Biomet to take advantage of the knowledge base around him. Not an easy thing to do when everyone defers to you. His mindset to make decisions at the right level helped build Biomet from startup to $12 billion valuation.

Empowering Employees. We entrepreneurs can be kind of controlling, but there is a point when it no longer pays to have your hand in everything. Rock Mackie, founder of TomoTherapy, inventor and manufacturer of advanced MRI machines for treating tumors, is a big fan of employees making decisions and sometimes mistakes. It’s hard to sit on your hands but Rock argues that “The dangerous thing is that you will micromanage employees to death. You have to know what are important and not-so-important decisions. Let your employees make smaller decisions even when you disagree. It’s too easy to continuously correct and give your opinion.”

SurePayroll has a great technique. They hand out a reward for the biggest mistake made each year. It’s their way of showing the team that it’s good to take risks.

Decision Democracy Increases Innovation. Participating in company decision making gets employees more vested in the organization and can have huge payoffs. Raj Soin started MTC Technologies with $1,700. Just as he had entrepreneurial desires, he wanted his employees to have the chance to launch companies. So he set up an incubator. “I challenge my engineers and other employees who come up with an idea to present it, and then we fund them to take it to the next level,” Raj said when I interviewed him for How They Did It. He knew that the best innovation would not always come from the top, so empowering everyone within the company to think about problems and solutions outside of their immediate projects led MTC to spin out 20 additional companies before being acquired by BAE for $425 million.

A Built-in Culture of Company Decision Making. I visited Zappos headquarters and took note of CEO Tony Hsieh’s desk mixed in with everyone else. Not a hint of hierarchy. Every new hire goes through customer service training, no matter what their role. Employees are encouraged to make decisions and take ownership of the company’s reputation through every interaction with a customer. They were proud to tell us the longest customer call was 8 hours. The result is a culture of outstanding customer service that even extends to handwritten thank you notes from someone like Isabella.

Imagine your company full of Isabellas – people who put their heart into their work. Holding some decisions too close? Now is the time to entrust and empower your employees.

**Robert Jordan is a Forbes.com contributor. View the original posting of this article on Forbes.com.

 

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Want to Start a Business? You Don’t Need to Know it All

Want to Start a Business? You Don’t Need to Know it All

It’s easy to put ultra successful entrepreneurs on a pedestal. Let’s face it: after they reach the peak, they usually sound brilliant, and as Ben Franklin said after he became rich and famous, “now I sing well too.”

But when you peel back their lofty status and record of home runs you usually see a series of hits, misses, whiffs and foul balls along the way. And that’s not a bad thing. Great entrepreneurs are not afraid to acknowledge they don’t know it all. More powerfully, the ability to act without full information can be a strength when you want to start a business.

Vince Pettinelli, a psychotherapist by training said “If I had to hire me I never would have because I didn’t have the prerequisite business skills.” Yet, he went on to build a $200 million company called PeopleServe. Many of us want to start a business but are in the same boat – we don’t have experience behind us. Here are a few ways you can capitalize on your abilities no matter what level you are at right now:

Ask Questions: Find a really successful company owner and ask them how they did it. Think your question is an imposition? It is not. The truth is, in most cases that successful person is wondering how they can give back without appearing to be boastful. Stephen Covey said “the deepest desire of the human spirit is to be acknowledged.” You are honoring them with your attention, respect and passionate desire to learn.

Hire People Better Than Yourself: This is a truism – every successful founder I’ve ever interviewed said this at some point in our discussion. No one ever said “it was all me, just me.” Here’s a practical example of good hiring in action: Vince Pettinelli had no financial background. As soon as he could afford it, he hired his accountant to come on board the company full time. Eventually the accountant became company president. From the beginning Vince said “Your job is to teach someone who can’t read financials–how to. And that includes me.” That one hire helped him stay within budget and grow the business massively.

Make Mistakes: Even Dick Costolo, founder of Feedburner and now CEO of Twitter didn’t always get it right. He said “I keep starting companies because of the regrets I have about the 50 things I did wrong on the previous one.” And fear of making mistakes should not hold you back. Al Berning, founder of Pemstar puts it perfectly: “People think if you study long enough, you’ll get a clear direction to go ahead. That’s never going to happen. You just have to have enough confidence in yourself to move forward.”

It’s easy to sound naïve, especially when you want to start a business but are a newbie. Instead of trying to act like you know it all, embrace what you don’t know. It’s not a weakness. Treat it as a precious asset and the world will open up for you.

**Robert Jordan is a Forbes.com contributor. View the original posting of this article on Forbes.com.

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8 Head Games that Can Kill Your Best Business Ideas

8 Head Games that Can Kill Your Best Business Ideas

At some point in your entrepreneurial quest you’ve probably had a few sleepless nights? It hits 3am and you are still staring at the ceiling wondering how you are ever going to get your business launched, find the right customers, hire the right people, or make some cash. I’ve been there. So I asked the “doctor,” business coach Jim Rohrbach, how we get stuck in feelings of utter despair when our business ideas look impossible. Jim says there are 8 head games to avoid.

• Frustration. “Why is this taking so long?”
• Irritation. “Why don’t those people return my emails and phone calls?”
• Aggravation. “How come the developer can’t get my website ready in time for our launch?”
• Confusion. “What the heck is my niche anyhow?”

And then it gets worse…

• Self-doubt. “What if they were right – maybe I don’t have what it takes?”
• Helplessness. “We’re bleeding red ink!”
• Hopelessness. “I can’t seem to close any deals!”
• Despair. “What was I thinking when I started this business?!”

See how these feelings can lead to a long, dark hole of nothingness? If your business or business idea is going to succeed, you have to stop playing head games. What’s the cure? Focus on the three things you can control: your attitude, activity and skills. Here are some tips to keep you moving forward:

1. Create Success Rituals. The best entrepreneurs create structure around themselves to reinforce their culture, attitude and best practices. Ever seen a sales room where the team rings a bell for each sale? The bell rings and the room is instantly energized. Find your bell – the triggers that bring out great performance from yourself and your team – then make a ritual out of it. At my first company, we had a “Good Friday” lunch every week when everyone on the team had to talk about at least one accomplishment. Yea, sometimes the comments were snarky…I’d hold my tongue when people talked about how glad they were they had not killed each other. But the camaraderie and team confidence were always there.

2. Schedule Your Activity Proactively. Ask yourself: what are the three crucial goals I must accomplish today? Then schedule those activities in advance so when emails, texts, and meetings come knocking you already have the time set aside. Nothing defeats despair like activity aimed at a valid goal. On the day Amazon bought Zappos, Amazon founder Jeff Bezos held a press conference where he talked about all the mistakes Amazon made in the early days, and how he reminds himself every morning that “today is Day One.” So if today is Day One what three goals do you want to accomplish?

3. Work on the Skills You Love. Nothing increases confidence like improving your competence, and to do that you have to focus on what you love to do. Too many company founders don’t know how to delegate, which means they end up doing a lot of things they don’t like and are not good at. Farm out the things you aren’t passionate about and hone in on your best talents. You’ll be more productive and positive. Steve Jobs said, “I have looked in the mirror every morning and asked myself: ‘If today were the last day of my life, would I want to do what I am about to do today?’ And whenever the answer has been ‘No’ for too many days in a row, I know I need to change something.” Doubt and hopelessness have zero chance to take root against your goals and business ideas pursued passionately.

**Robert Jordan is a Forbes.com contributor. View the original posting of this article on Forbes.com.

 

 

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How to Make One Better Decision Each Day

How to Make One Better Decision Each Day

Jeff Hawkins, founder of Palm and Handspring, spoke on campus at Stanford University in 2009. He said that whether you run a dry cleaner or a tech company, if you could just make one better decision each day, you would end up dominating your industry.

That sounds right, but how do you do that? Three pointers from great entrepreneurs:

1) Don’t go for Perfect. You’ll Just Stall. Dan Sullivan, founder of the Strategic Coach Program, says perfection and procrastination are two sides of the same coin. His solution? Go for 80%. Other than brain surgery and nuclear weapons, 80% is great for your first effort, and when your second effort takes on the remaining 20% of the challenge using the same 80% idea, you are now at 96% of your ultimate goal.

2) No Decision is Final. Jim Camp, author of Start With No, points out that every decision you make will lead to another decision, and another. When you realize this, it is easier to make the first decision today.

3) See Your Decisions as Experiments, Not Personal Indictments. What I love about interviewing incredible entrepreneurs like Dick Costolo, now CEO of Twitter, is their ability to view decisions dispassionately. Dick tells entrepreneurs in How They Did It that when he built Feedburner (since sold to Google), their business model was like going to the doctor. “Better like this or like this? A or B? B or C? Oh, C’s doing better than B. Let’s do more C.” Dick tinkers with decisions, constantly working to improve rather than judging himself by occasional setbacks.

Back to you – you have a decision to make today, don’t you? What’s it gonna be?

**Robert Jordan is a Forbes.com contributor. View the original posting of this article on Forbes.com.

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How to Avoid the Big 5 Social Media Mistakes Corporations Make

My biggest challenge right now is mastering the vastness of social media and I suspect I am not alone. No matter what size company you work for, facing customers, partners, vendors, investors or the public means you better get good at LinkedIn, Twitter, Facebook, blogging, or Pinterest. Yet for many of us it can be intimidating. Earlier this year McDonalds promoted the hashtag #McDStories and didn’t get quite the response it was looking for. So how do you avoid social media mistakes and get good at this?

Michael Lebowitz, founder and CEO of Big Spaceship, came to my rescue. I interviewed Michael in this podcast where he explains why most corporations get it wrong, and how we should change our way of thinking about social (listen here). Here are five mistakes corporations make:

1. Corporations have no sense of humor. They aren’t good at funny. But a little attitude can be good. Recently someone tweeted that they saw a bird poop on a SmartCar, totaling it. What did the folks at SmartCar do in response? They created an infographic showing how many pigeon craps it would take to destroy the car. Nicely done.

 

2. Companies are too slow to respond. We are bombarded with email, meetings, and corporate hierarchy, and speedy response can easily go out the window. But social media wants immediacy – that’s the oxygen. We have to communicate in real time. I can’t believe I am actually going to cite Tamagotchi in a Forbes post, but those silly virtual alien pets that you had to feed and water, or they’d die? That’s like social media.

3. Companies have no voice. Corporations do their best to be politically correct and inoffensive. That’s boring. To be successful with social media you must have voice. Skittles posted a fan’s “Skittles Covered Roller Skates” and that single photo got 35,000 likes. They aren’t afraid to have fun. Have a voice.

 

4. Corporations that are nameless and faceless fail to connect. People seek connection and acknowledgement. When people speak out to a company they often feel like their comment is thrown into a deep, dark hole. Who is behind the curtain? Ford does a great job using social media to engage customers and learn more about its fans. Be human.

 

5. Companies treat social like a process, when it’s really an organism. Michael nailed it on this point. Corporations want to reduce everything to a process, but that is not the way social media works. There is no set of inputs and outputs like a machine. Rather, think about social media as a living, breathing organism that you must nurture and form a relationship with.

Check out the banter between AMC Theatres and Oreo. When Oreo asked its followers if they brought cookies into the movie theater, AMC wasn’t afraid to instantly come back with a fun response of its own.

You want to avoid social media mistakes and be the life of the party? No problem. Engage, be authentic, and don’t take it too seriously.

**Robert Jordan is a Forbes.com contributor. View the original posting of this article on Forbes.com.

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Podcast: Michael Lebowitz, Founder & CEO, Big Spaceship

Podcast: Michael Lebowitz, Founder & CEO, Big Spaceship

I recently interviewed Michael Lebowitz, Founder & CEO, Big Spaceship about how corporation get social media wrong. Listen now:

 

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What Entrepreneurs Can Learn from a Door to Door Pitchman

What Entrepreneurs Can Learn from a Door to Door Pitchman

Let me tell you a story about Johnny Miller.

“Johnny who?”

Trust me, you don’t know this Johnny. But I bet you’ve seen one of Johnny’s co-workers walking down your street, knocking on door after door attempting to sell magazine subscriptions. Last weekend I answered the door while blocking my big, loud and unhappy dog who was intent on killing the stranger outside. One hand on the door, one on the dog, I was not an ideal prospect. Johnny, however, had me hooked in 10 seconds. I sidled out to the front step, and before I knew it I was sitting down with a magazine salesman for a product pitch.

When you think door-to-door salesman, the word “inspiring” doesn’t come to mind. Most of my friends would have sooner pretended they were not at home. But being brave, I figured I’d politely brush Johnny off. Little did I know that Johnny, a 21-year old raised in the projects of Charleston, South Carolina, could sell his words, ideas and products brilliantly. I think entrepreneurs can learn a lot from his example.

Many entrepreneurs get the strategy and execution of their pitch completely wrong. Rather than paint a picture in the world of the investor or customer, they make the mistake of focusing on what they make or sell. It is easy to talk about your product or service. It’s what you know, and it’s wonderful, right? As an entrepreneur, you dive in when asked the innocent-sounding question, “so, what do you do?” The truth is that most pitches fall flat and don’t succeed, and that’s where we can learn from Johnny.

Johnny has knocked on 10,000 doors in 3 ½ years of selling subscriptions all over the US, and managed to sell skeptical me with no powerpoint in sight…on words alone. Here’s how he did it:

1. Johnny Engaged Immediately. Johnny got a hook in me immediately.How? I’ll get to that. The point is he knew he had a very thin lifeline. Now take a look at your pitch– verbal or powerpoint – how long is it? And your real lead, the juice, the reason for your faith and enthusiasm in your business – how many slides into the deck is it? If you are doing an executive summary, how far down the first or second page until you get to the heart of your business? I’m getting bored already. Johnny wouldn’t let me get bored or disengaged.

2. Johnny’s Words and Questions Were Honed to Perfection. Johnny used his first twenty words like a scalpel. Have you refined your pitch down to its essence? No empty words? Everyone knows what an elevator pitch is, but why do so few entrepreneurs actually do it well? Listing your lawyer or accountant in your executive summary is a loser move. Endless copy about confidentiality – unnecessary. As Mies Van de Rohe said: less is more. Johnny is a scientist. He experimented in his delivery and discarded losing experiments in favor of winners. Most entrepreneurs keep plowing through the same long turgid prose.

3. Johnny’s Pitch Was Human. Johnny’s pitch did not distinguish between the product and the man selling it – they were one and the same. It’s a given that entrepreneurs fall in love with their technology, product, and design. They love their baby. But even with all that emotion, they make the mistake of pitching very rationally, unlike Johnny, who made his product come alive. The thing is, we human beings are emotion-based decision makers. Here’s an example that plays to pure emotion. My friend Dominic Luzi served as interim CIO at Hästens, a maker of high end beds costing $15,000 to $65,000. I asked Dom how a bed could be worth so much? He told me that his first night in a hotel room with a Hästens bed he wanted to see what all the fuss was about, so before turning in, he lay down on the bed in a full suit, tie, and shoes, just to test it out for a minute. The next thing he knew, it was the following morning and he hadn’t moved an inch from his original spot. There is magic to that bed and all Dom had to do was tell me his experience. Can you get that level of feeling into your pitch?

4. Johnny Listened. Just because it’s a pitch doesn’t mean it’s canned. Yes, hone your message, but don’t go on autopilot. Johnny knew he was selling a basic product. Rather than rambling on about why magazines are great, he asked me what my first job was. And as I blissfully reflected on my past, Johnny listened like his life depended on it. Come to think of it, I guess for him it did.

Johnny is consistently successful in the most brutal form of business combat, the stone cold pitch to a completely uninterested prospect. Get in the mind of your prospect and you’ll win. Thanks for the lesson Johnny. I can’t wait to get my first copy of Vegetarian Times, and I’m not vegetarian.

**Robert Jordan is a Forbes.com contributor. View the original posting of this article on Forbes.com.

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Three Best Ads Ever for Entrepreneurs

Three Best Ads Ever for Entrepreneurs

I take inspiration wherever found, and sometimes great advertisements win hearts, minds and can push company founders forward.

The three best print ads of all time for entrepreneurial action:

1) Schwinn: “We fell. We got up. End of Apology.” This ad for Schwinn bicycles features a banged up rider in the upper right – check out that blood – and it sums up great, unreasonable, unrelenting, unstoppable entrepreneurs everywhere.

2) Cessna: “Some words of encouragement for the last people who really need them.” This ad from Cessna has as much attitude as one could stand in the middle of a vicious recession, but you can feel yourself perking up just reading it: “…Call them contrarian. Label them renegades…If you are one of them, you are already on your mission. While others flail dull weapons, you hone yours…and emerge stronger than before. RISE.”

3) Minolta: “Are you waiting…” This ad from Minolta is alpha to omega for everyone who needs just a little boost to get in gear. Here’s the full text:

Are you waiting
for someone to lead and inspire you
for the boss to recognize you
for clients to thank you
for coworkers to help you
for the world to hail you
well here’s a news flash
they are all just sitting there too
waiting for you

Minolta got it right. We’re all just waiting for you.

**Robert Jordan is a Forbes.com contributor. View the original posting of this article on Forbes.com.

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