Business News

How Much Should I Work?

Xconomy-Boston - Mon, 10/13/2014 - 00:01
Joe Chung

My son, a member of the optimization generation, where pretty much every aspect of his life will be tracked, measured, and ultimately ruled by the Alg, posed a fascinating question to me the other day. He simply asked, “How much should I work?”

Now, the context for the question is that he’s undoubtedly a Type A who throws himself into his pursuits with unbelievable intensity, but his job is somewhat loosely structured so that he has a huge amount of discretion over how he allocates his hours and in particular how many hours he works at all. (Hint: he works a LOT.)

So I traced an approximation of the following graph on a restaurant table top:

The X-axis is the average number of hours per day spent working. Zero is of course zero, and 24 means that he would be literally working 24 hours every day, 7 days per week without sleeping! The Y-axis is job productivity measured in percentage of one’s possible potential. So 100 percent is the best one can possibly be.

So obviously if he works zero hours he will achieve exactly zero percent of his potential productivity. On the other end of the X-axis, working continuously without sleeping will also yield zero percent (I’m not allowing negative productivity just to keep things simple), and in fact if he worked so hard that he never slept he might actually die! So in between these two extremes, the graph must surely rise to 100 and fall back down again to zero. In my hypothetical graph I start with a fairly steep rise as the average hours per day goes up, but following the law of diminishing returns, the productivity curve must flatten so that each additional hour per day yields less and less of an increase in productivity. Finally the curve can rise no further having reached 100 percent, and from there the only direction to go is down!

Now at this point, which happens to be around 12 hours per day on my made-up graph (i.e., equating to 84 hours per week), my son is working so hard that spending more time at work actually begins to decrease productivity due to making errors, losing track of things, miscommunications, etc. Once he increases his hours to the point of seriously cutting into sleep, meals, hygiene, and other normal bodily functions, his productivity plummets as errors pile up, e-mails are left unanswered, and important meetings are forgotten in a delirious haze of ill temper and body odor.

But the important takeaway from staring at the curve is that for every level of productivity, except 100 percent, there are actually two levels of work hours that correspond. So at the point at which he is averaging 18 work hours per day yielding a productivity of about 25 percent, at least according to my particular graph, he could also work just 3 hours per day and achieve the same productivity and presumably be a much more pleasant person to share an elevator with. Which brings us to an obvious truth: No matter what level of productivity you are achieving, you are much better off being on the left side of the curve than on the right!

What’s interesting about this line of thinking is that I strongly suspect that the vast majority of driven, hard-working Type A’s are always on the wrong side. Their personalities lead them to push themselves as hard as they can until something (e.g., partner, close friend, nervous breakdown), actually pushes back. If that’s true, then they basically push themselves until they are well past their optimum output and down the declining right side of the hump until something is actually breaking, whereas they could achieve the same level of productivity by working several fewer hours per day.

So to finally answer my son’s question, here are a few simple rules:

1. At the very least, try not to be too far down the right side of the curve. Recognize the signs of declining productivity by seeking out feedback from the people you work for and work with. When they say you’re working too hard, you probably are.

2. Notice how your allocation of non-working hours affects your overall job performance. If your job requires that you be creative, personable, inspiring, etc., you’re probably not going to be those things for long if you are working yourself to death.

3. Experiment. Like any good data-driven analytical optimization, you need to create a varied set of data points from which you can draw comparisons. Try different levels of work and attempt to infer your personal productivity graph, decide where you want to be, and try to be on the left side of the graph. It won’t be perfect, and of course one can’t really measure productivity on a single axis, but it’s probably better than just going pedal to the metal until you burn out!

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HubSpot in Dublin: Lessons in Building a Global Public Company

Xconomy-Boston - Thu, 10/09/2014 - 11:30
Gregory T. Huang

The latest U.S. tech company to go public is HubSpot, which has netted about $114 million in its IPO on the New York Stock Exchange. From a global perspective, what’s most interesting about the Boston-area online marketing company (NYSE: HUBS) has been its effort to go into new international markets.

You’ve heard of founders Dharmesh Shah and Brian Halligan, and the company’s illustrious investors, but you probably haven’t heard of Jeetu Mahtani. He is the managing director of HubSpot’s international operations, and heads up the company’s office in Dublin (pictured).

Mahtani started in sales at HubSpot’s headquarters in Cambridge, MA, in 2009. About three years ago, he went to Halligan, the CEO, and said he wanted to start calling the U.K. to get new customers. Halligan, who led PTC’s sales teams in Hong Kong and Tokyo in the ‘90s, said to go for it. So Mahtani started coming to the office at 4am to call overseas; pretty soon he had built a small team that all showed up at that hour (the better to beat the traffic).

Fast forward to January 2013, when HubSpot opened its European headquarters in Dublin. Mahtani moved there with a landing team of a half-dozen people from Boston and quickly hired about eight locals. The office has since grown to a bit over 100 employees, mostly in sales and customer service, with an engineering contingent of about a dozen.

The Dublin operation is increasingly crucial to the company’s growth in a very competitive sector (see Marketo, Oracle, Salesforce). The Irish engineers are fully in charge of the mobile layer of HubSpot’s marketing software. And Mahtani says the company makes 15 to 20 percent of its global sales from Dublin.

For the past year or so, Mahtani has also been in charge of setting up the firm’s new Sydney office, and establishing global best practices across Europe, Asia-Pacific, and the U.S.

Bottom line: going international is crucial for many mid-size U.S. software companies, and HubSpot is figuring out how to do it as it goes public.

Three lessons Mahtani has learned:

1. Go all in. “U.S. companies arrive in Europe, but they don’t commit,” he says. It’s not just the money invested, it’s getting “talent and leadership from headquarters involved,” he adds. “Your output will be what you put into it.”

2. Get the right mix of talent, and promote them. “There are morale and cultural issues in a remote location,” he says. Given the “right roots and leadership,” the company wants to promote from inside. To that end, several of Mahtani’s first sales hires in Dublin have risen to become sales directors, he says.

3. Treat Europe as a different animal. “You have to take into account the backgrounds and cultural differences, end to end, of a region,” he says. Meaning that customers in Germany have very different requirements in terms of technical support as compared to the U.K. or Italy, say.

Looking farther afield, he says, Australian customers “buy like Americans” and “growth has been great.”

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Can Salesforce1 Push the Workforce into the Mobile Age?

Xconomy-Boston - Thu, 10/09/2014 - 10:33
Doug Winter

Dreamforce 2014 is quickly approaching, and it has me thinking about the impact Salesforce (NASDAQ: CRM) has had on the way we work and more generally on the future of work itself.

Dreamforce is the annual Salesforce user conference, and it has more or less become a must-attend event for anyone in the cloud computing business. Last year the conference drew more than 120,000 attendees to downtown San Francisco.

From the beginning, Salesforce has revolutionized the way we do business. They were the first pioneers to bring customer relationship management (CRM) to the cloud, and last year Forbes ranked Salesforce as the world’s most innovative company. Today, we’re finding ourselves in a time where massive trends are reshaping the enterprise and in turn, the workforce. How companies respond will dictate the rest of their future within their particular space.

Now Salesforce is driving more changes. As mobile device adoption continues to accelerate and shift everyday thinking, enterprises are starting to evolve beyond the “bring your own device” (BYOD) era and into a full-fledged, mobile-enabled workforce. In fact, according to a recent survey from CA Technologies, 60 percent of companies have an enterprise-wide mobile strategy, or are planning to implement one in the next year.

A mobile-enabled workforce can improve efficiency, productivity, and provide flexibility within the workplace. Moreover, a mobilized workforce enables faster communication, enhances customer experience, and lowers costs. When it comes to a high-profit selling environment, however, a company needs more than a laptop or smartphone—they need mobile applications that make it easier to get work done. This way, sales reps can focus on what they do best—selling.

Realizing the potential that mobile apps represent in this new era of workforce mobility, Salesforce is rolling out their Salesforce1 Customer Platform to connect business apps, devices, and data in one place. Salesforce1 allows users to take their CRM system anywhere they go. It gives sales reps direct access to their reports and dashboards, easy navigation with accounts, and provides access to data offline. This enables reps to … Next Page »

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Online Pharmacy Startup PillPack Lands $8.75M, Led By Accel

Xconomy-Boston - Thu, 10/09/2014 - 06:30
Curt Woodward

A lot of technology startups get rightly criticized for not bothering to tackle a problem that will make anyone’s life better. PillPack is not one of those startups.

The Manchester, NH-based company offers a new twist on the concept of a mail-order pharmacy. Instead of sending long-term supplies of drugs in conventional pill bottles, PillPack pre-sorts all of a customer’s medications into small, time-stamped plastic packets that are easy to decipher—open the “8 am” packet, take the pills, and move on.

PillPack also offers a website that lets customers track their orders and bills. But it still takes the personal service side of pharmacy seriously, with pharmacists on the payroll to manage a patient’s refills and answer any customer questions 24 hours a day.

“We couldn’t have done this 10 years ago,” founder and CEO TJ Parker says. “We’re building something that does provide true utility for folks, especially in an industry that hasn’t seen modern technology infiltrate into it.”

A PillPack medication packet

Before starting PillPack, which was part of the 2013 class of Boston Techstars companies, Parker got into the family business as a pharmacist himself. Today, he and his father make up half of the company’s pharmacy staff, which oversees customer orders and communications with doctors out of PillPack’s Manchester offices.

Although he won’t discuss customer numbers, Parker says PillPack is now shipping to customers in 40 states and expects to be available nationwide by early next year—that’s up from 31 states when PillPack officially launched in February.

Venture investors seem to like what they see in PillPack’s growth. Accel Partners is joining the company’s list of backers, leading a new $8.75 million investment. Previous investors Atlas Venture also participated the new round, along with High Line Venture Partners, QueensBridge Venture Partners, Andy Palmer, and David Tisch. The startup has raised $12.75 million since its founding.

There’s a common tie between the two main venture firms being touted with this investment round: Fred Destin, a former Atlas venture capitalist who invested in PillPack before leaving the firm earlier this year to join Accel.

“I think it was a huge win for us to get someone from that good of a fund, who is already in tune with the business and bought in. It worked out very, very well,” Parker says.

PillPack plans to use the money to grow its business on every front. The startup has about 25 people now, split between its pharmacy and shipping offices in Manchester and its software engineering outpost in Somerville, MA.

That growth should be easier now that PillPack has cleared a significant hurdle: it was recently accredited as an online pharmacy by the National Association of Boards of Pharmacy, a year-long process that endorses PillPack’s bona fides as a legitimate business.

Why is that bit of arcane industry vetting so important? Google and Facebook don’t allow companies like PillPack to advertise their services without that accreditation, Parker notes.

Those policies are aimed at keeping the online advertising giants from butting heads with regulators—Google paid $500 million in 2011 to settle federal charges that it was allowing illegal pharmacies to advertise to Web users, and has been accused of being too lax in the following years.

Being able to use those platforms for advertising should be a big boost for PillPack, especially when you consider that another common way of finding customers online—sending out e-mail solicitations—can be tough when the subject is mail-order prescriptions. “Being an online pharmacy makes spam filters lots of fun,” Miller says.

One major change PillPack has made since launching the company earlier this year is a big price cut. At its public debut, PillPack was charging customers a $20 monthly subscription fee for its service, on the theory that people would pay more for a more user-friendly product and around-the-clock service.

That turned out to be wrong, and PillPack has since dropped the extra fees entirely.

“The folks that we thought would use PillPack the most were more sensitive to the fee than we anticipated,” Parker says. “They’re spending so much on meds and doctors that spending another $20 was more impactful to them than I think I realized.”

Now, the startup charges only a regular co-pay, which patients would normally encounter when filling prescriptions (PillPack says it works with “most prescription drug insurance plans, including a majority of Medicare Part D plans”). That cuts down the up-front revenue, but is apparently a better way to grow the “lifetime value” of each customer, one of the key measurements of any e-commerce business.

PillPack is one of those intriguing young businesses that are attempting to improve an established, important industry by injecting a next-generation dose of better technology, improved design, and the efficiency of digital tools.

The difficult-to-master basics of dispensing prescriptions, shipping packages, and building software are falling into place now, Parker says, leaving him optimistic that the new investment cash can help PillPack expand much more quickly. Being able to finally advertise online won’t hurt, either.

“We’re very much about building awareness that the product exists,” he says. “We’ve found that customers absolutely love it, and we’d love to get it into more customers’ hands.”

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HubSpot IPO Raises $114M for Online Marketing Software

Xconomy-Boston - Wed, 10/08/2014 - 20:30
Curt Woodward

Online marketing software seller HubSpot, which helps mid-sized businesses attract customers with blog posts, e-mails, and social media campaigns, has raised about $114 million in its initial public stock offering.

The Cambridge, MA-based company said Wednesday night that it sold 5 million shares of its stock at $25 each. That price was higher than HubSpot’s previously estimated price range, indicating good demand for the stock.

After accounting for fees, HubSpot will clear an estimated $113.7 million—cash it will immediately use to bankroll its operations, which had become reliant on debt financing while it waited to complete the IPO. Underwriters have an option to buy another 750,000 shares if demand is high.

The company’s shares would begin trading publicly for the first time on Thursday morning.

HubSpot (NYSE: HUBS) was founded in 2005 by CEO Brian Halligan and technology chief Dharmesh Shah, who met while attending business school at MIT. They decided to start HubSpot after finding that many small companies had to patch together an unwieldy number of software programs to help them market their companies online.

The company faces several competitors, including standalone companies like Marketo (NASDAQ: MKTO) and individual product lines offered by larger software sellers, including Salesforce and Oracle.

Salesforce, in fact, was a venture investor in HubSpot before spending $2.5 billion to acquire a competitor, ExactTarget. Since then, HubSpot has developed new products aimed at salespeople, increasing its competition with Salesforce.

Shah and Halligan

HubSpot’s public-market debut was the second major tech-industry IPO for the Boston area this year. The online home-goods retailer Wayfair went public on Oct. 1.

Like a lot of young companies, HubSpot has historically been a money-loser as it tries to gain a large market foothold. But more recent results show that the company is trying to stabilize its financial position as it heads to the public stock markets. In the first six months of the year, HubSpot reported that it collected about $51 million in revenue, an increase of about 46 percent from a year earlier. The company’s losses grew by less than 9 percent in that same period, to nearly $18 million.

Marketo, by comparison, has reported proportionally higher losses so far this calendar year, with a nearly $26 million net loss on $68 million in sales.

Most of HubSpot’s losses are tied to its heavy spending on sales and marketing for its own services, which give mostly mid-sized business-to-business companies the ability to improve their websites, e-mail pitches, blog postings, and other online marketing assets.

HubSpot’s average revenue per customer grew from $6,580 in 2012 to more than $7,700 in 2013, an increase of about 18 percent. But the company’s customer acquisition costs grew more quickly: HubSpot spent nearly $8,300 to land each customer in 2012, compared with more than $11,600 in 2013, a jump of more than 40 percent.

As a result of its spending on company growth, HubSpot definitely needs the cash injection that the IPO can provide. As of June 30, the company had just $7.3 million in cash on hand, which is less than it’s spent per month on operating costs this year. To keep its operations humming, HubSpot drew $13 million from its $35 million line of credit.

Before the IPO, most of HubSpot’s stock was owned by the venture capitalists who infused the company with more than $100 million in private investment since its founding.

General Catalyst Partners was the biggest shareholder before the IPO, with about 27 percent of the company. Matrix Partners held about 17 percent of the company, and Sequoia Partners had a roughly 10 percent stake.

Halligan owned about 5 percent of the company before its IPO, and co-founder Shah held about 9 percent.

HubSpot also shared some of its newfound wealth with people who typically don’t get the best price on IPOs—in SEC filings, the company said its bankers had agreed to set aside 5 percent of its IPO shares for HubSpot employees and some of the company’s marketing agency partners.

Those partners, typically marketing consultants who sell HubSpot’s software to their own clients, are critical to the company’s success: HubSpot says they’re responsible for about a third of its sales and more than 40 percent of its customer base.

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The Beacon Hill Report - October 2, 2014

An update on the mandated paid leave Question #4 ballot initiative as well as New England's looming energy crisis.

Alternative to Mandatory Leave is Step in Right Direction

National Federation of Independent Business (NFIB) Massachusetts State Director Bill Vernon today made the following statement in response to gubernatorial candidate Charlie Bakers proposed alternative to mandatory leave. Vernon serves as Chairman of the No on 4 Committee:

Small Business Backs Tisei in Hot North Shore Congressional Race

he National Federation of Independent Business (NFIB) today announced its support for former state lawmaker Richard Tisei in his bid for the seat previously held by incumbent John Tierney in the competitive 6th District congressional race.

NFIB to Hospitals: Not Every Business Can Operate like the Biggest Employers

Director Bill Vernon today cautioned the CEOs of several hospitals who are backing mandatory paid leave that not every small business can operate like the state's biggest and most profitable employers.

Spread the Word on Scholarships

Massachusetts high school seniors can start applying for a financial head-start in college from NFIB's Young Entrepreneur Foundation starting October 1.

The Beacon Hill Report - September 18, 2014

NFIB MA State Director provides an update on healthcare cost and income taxes.

Massachusetts Small Businesses: Partners Merger Will Raise Health Costs

The Massachusetts chapter of the National Federation of Independent Business and the Retailers Association of Massachusetts have asked Attorney General Coakley to reconsider the settlement with Partners Healthcare regarding the proposed merger with South Shore and Hallmark Health Corporations.

The Beacon Hill Report - September 4, 2014

NFIB MA State Director Bill Vernon talks about health care costs, tax amnesty laws and the impact of a new domestic violence bill on your business.

The Beacon Hill Report - August 21, 2014

NFIB MA State Director Bill Vernon provides an update on the MA economy, Gov. Patrick's Economic Development bill and the Health Connector.

The Beacon Hill Report - August 7, 2014 Edition

State Director Bill Vernon provides an update on the end of session for 2014.

The Beacon Hill Report - July 17, 2014

NFIB MA State Director Bill Vernon provides an update from Beacon Hill.

NFIB/Massachusetts Celebrates SCOTUS Decision on Forced Unionization

Director Bill Vernon today applauded a decision by the United States Supreme Court this morning invalidating an Illinois executive order forcing private sector employees to pay government union dues. The ruling, said Vernon, appears to undermine a Massachusetts that also requires home health care workers to pay union dues involuntarily.

Employment is projected to grow 10.8% from 2012 to 2022, led by jobs in healthcare

Employment is projected to grow 10.8 percent from 2012 to 2022, adding 15.6 million jobs. Occupations and industries related to healthcare are projected to add the most new jobs. Growth is expected to be fastest in occupations that typically require postsecondary education.

Employment is projected to grow 14.3% from 2010-20, led by health care and construction

Employment is projected to grow by 14.3 percent or 20.5 million from 2010-20. Industries and occupations related to health care, personal care, and construction are projected to grow fastest. Growth is expected to be fastest in occupations that typically need postsecondary education.
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