The legacy of your work has a value harder to compare with pure money, so we should try our best to incorporate that in our professional decision making.

I’m not a professional athlete. That may surprise many of you.

Still, without any real awareness of the experience, I find myself scratching my head whenever a big name, well-paid professional athlete chooses more money over legacy. In most cases, it seems ill-advised.

I understand that with injuries threatening livelihood, athletes are smartly coached to get what upfront money they can as soon as they can. And I understand that there is often a mind-boggling amount of money on the table, but they seem to be facing on only one axis of success.

When Albert Pujols signed a quarter of a billion dollar, 10-year contract with the major market Los Angeles Angels, leaving the devoted St. Louis Cardinals after 11 seasons, I wasn’t surprised. (In fact, the Pujols’s wife seems more surprised, saying they had never wanted to leave St. Louis but the club wouldn’t offer a long enough, guaranteed deal.)

But if the celebrated and beloved Pujols becomes a target for boos and taunts, he’ll have to assess how much money an attack to his legacy is worth.

After watching Alex Rodriguez do similarly, leaving the Texas Rangers after a spectacular 2003 season for more than $250 million from the New York Yankees, and then becoming the most hated player in baseball, I was curious. Then, when LeBron James left his (nearly) hometown Cleveland Cavaliers to take his talent to South Beach for the Miami Heat and became the most vilified star in the NBA, I was certain.

There are enormous legacy and reputation ramifications for taking the money and leaving somewhere else.

Jayson Werth took a seven-year $126 million deal with the lowly but growing Nationals that he felt his Phillies should have offered him in his 30s. It seemed he was less than pleased when pitcher Cliff Lee took less money to focus on his legacy.

Lee helped build something — though they fell short of a championship. Similiarly, LeBron could have built Cleveland. Pujols could have been remembered as one of the greatest players and most philanthropic stars in a baseball hungry city. Instead they both went to better paying markets with a different kind of fan base.

Lessons are to be had here for all of us. The money is not at those levels, but the sense that pursuing money only ignores how you will be remembered.

And that’s worth something too.

Most of us (myself included) could do a better job of more often recognizing that when we buy something, we are also, in a way, voting for it. Cost analysis should include an awareness of what message you’re sending when buying something or going somewhere (I want this beer/farm/news site/bar/zoo/restauant, etc. to exist.)

Purchase power has always been a way to show support, but when we increasingly buy that which is not tangible, it may be even more important to incorporate that support into the price point.

As the music industry has fought online pirating, it has seemed to have the most success in arguing to consumers that buying music (an mp3, a CD, etc.) not only ensures a better experience, but purchasing also is a way to support, and tacitly “vote,” for a favorite musician — whether they are getting the biggest cut of the pie or not.

For local, small businesses (yes, niche media too), the pitch has to be the same. We need to offer value to consumers, yes, but ultimately the audience needs to also see any purchase — whatever that is — as a sign of support.

I am not denouncing bigger brands or cheaper options (I make both types of purchases regularly), I am arguing that other externalities go into your purchases, so you should keep them in mind.

Examples:

• Buy advertising or sponsorship with the local news site, blog, forum or web community that helps bring together your customers or community. The value is the traditional branding and helping to support that niche site.
• Go out to the local restaurant or corner hardware store for your smaller purchases — Every extra cent you pay over the cheaper option is a vote for not living in chain-store, strip mall hell.
• Buy, drink and love locally grown and made foods, beers and spirits — Something is unique to where you live/visit/stay, so enjoy it and, in turn, vote for it to exist.
• Purchase a tour to learn more about your home, like, in Philly, the Mural Arts Program or a Food Tour. The value Is the fun experience and learning something, and the added value is helping those groups exist and spread more elsewhere.

In the local news version of the conversation, though the end may be the same, I do think this is a different ask than suggesting the unnamed collective needs to be taught to pay for content. There isn’t a tangible good so feelings need to be part of the equation. Content is free — that’s how you create the community — so we need to find what additional, relevant value we can offer,  sell that and encourage our customers/readers/supporters to remember that a portion of that price goes to helping us exist.

Price points matter. When you don’t have a story tell, the cheapest quality paper towel or headache medicine or whatever will often be the right choice.

In competition, the cheapest cost is almost always a major deciding factor. In experiences (our supporting/growing where we live, celebrating, lifestyle or politics), the cost analysis should always include the support of what you hope to continue being available.

A journalist salary bubble may still be lurking somewhere beyond the newspaper right-sizing of the past decade.

We at Technically Philly are in the process of hiring our first reporter — to begin as an independent contractor expected to make something like $30,000 in a 12-month period. That’s a respectable, entry-level salary for a young, hungry reporter in a big market.

Unless you think otherwise. A freelancer friend of mine gave me a little grief, said she had a $30,000 salary when she started in 2004, expecting the total to have gone up in the ensuing years. I tried to remind her that in the years since she started, the momentum on subscription declines and advertising reductions have accelerated, not to mention a recession that stalled, if not shrunk, salary growth.

In short, her argument seemed to redouble my confidence that our small startup, for-profit technology news site was doing alright to budget $30,000 for a young reporter who would focus on reporting, social media and outreach. Her argument did something else though. It made me think there may still be shocks left in this generation-long restructuring in news from higher-yield print monopoly to lower-yield, online competition.

Starting reporter salaries at the Philadelphia Inquirer are something in the arena of $35,000, with benefits, as I understand it. Updated: See the Guild contract details here [PDF]. That’s not great money for a storied big market newspaper brand, but the Inquirer is a union shop so, as I’ve been told, the guild has a structure not unlike you’d expect for a civil servant: steep pay increases with years in.

A business columnist there might be getting north of $130,000, if I understand correctly. It sounds like an experienced reporter for another business publication in town is making between $70,000 and $100,000. Now I’m not suggesting that reporter salaries were ever at that level on average, but I am pointing out that at most legacy brands, there is a pay structure that ties back to a big yield print world.

A friend of mine is jumping from a well-paying, newspaper-backed administration job to a social media-driven role with a big foundation-supported journalism outfit. His salary is probably somewhere in the $60,000 to $80,000 range.

That’s just my concern.

The old pay structures that can grow reporters into six figure salaries are being maintained because of culture, union and logistical concerns. The biggest new celebrated brands of our age — MinnPost, Pro Publica, Texas Tribune, San Diego Voice and the like — are backed by big donors and foundations. Without normal market forces pressed on them, it’s my understanding that they are following the same salary levels of the standard-setting newspaper brands.

I respect greatly the involvement of philanthropic organizations in journalism (of course I do, such funding has helped us do great work), but I think those efforts should be focused on projects, not operations. Projects have ends. Operations are ongoing.) As this funding without normal market pressures impacts this still unsettled industry, I am left with two related questions about reporter compensation. Is there any evidence that the market can (or should) support pay levels of the past? Could foundation funding be protecting a journalism pay bubble?

As I look at the smaller, independent niche news sites that I know well, I see two paths: (a) one is a leaner, more efficient operation that doesn’t pay its reporters the kind of levels the past has prized, and (b) the other is funded entirely by foundations or other deep pockets, and pay reporters rates that are not unlike the past.

Granted everything is cyclical, so as news fractures, I fully expect there to be consolidation once again. With consolidation, presumably comes efficiency and better paid, top talent. There are already years-old glimmers of that, with properties like Gawker Media, which has a portfolio of high traffic sites, driven by content written by bloggers paid largely based on page views. Pre-recession estimates suggested that Gawker writers were getting paid up to $80,000, which would be respectable pay for valued writers at a valued brand.

But, as anyone covering communities know, Gawker is an aberration — a niche conglomerate with big money. I don’t think that will be representative at all.

When we crunch the numbers at Technically Philly, I’m not sure we could ever support the kind of salary figures an established technology reporter for a big legacy brand would demand. And, frankly, I’m not yet sure it should.

The act of selling products, of course, is like finding your Atman of the service industry, so, acknowledging that that is at the top of the pyramid and any kind of client work is the foundation, let’s look at what helps these service businesses thrive enough financially to ever endeavor to trial a product or two: the three “R’s.”

By service industry, I’m thinking of professional firms that do things like web design, marketing, consulting, strategy and other high-level tasks that many companies will look to outsource.

There are three “R’s” that every successful company in a service industry achieves in building into its revenue strategy:

• Retainers — In most cases, you first work with a client around limited, deliverable-driven projects (or at least this is what we find valuable for both us and those with whom we work) for six months or a year. These are often big lifts that make heavy use of staff time, resources and insight. Good work happens here. But ideally, if value can be offered long-term with maintenance or further staff development, longer-term or continuing contracts of smaller value but steady income allow real stability and scale in the type of business (service) that isn’t very good at either.
• Recommendations — I can remember questioning the value of someone else speaking good on your work — words pasted on some leaflet or buried on a website. But in the past few years, I’ve found occasion when those very words, even when detached from the human being who supposedly said them, have been requested. Having a list of published testimonials and the client list that comes with them is endlessly valuable to draw upon in discussions, sales and strategy. When you’re starting out, use past work or give up some free work to start building that network.
• Referrals – This is surely related to the recommendations but quite a bit more valuable. Of our work at Technically Media, most of our clients come as a direct result of an introduction and private suggestion to work with us. Referrals are prized for a legion of reasons: cold calling sucks, you can better calendar-out clients, it becomes a curated list of clients with whom you want to work, the expectation is for you to succeed so winning is easier and more.

My colleagues Sean Blanda, Brian James Kirk and I learned plenty at the 2011 Online News Association conference in Boston, but we also did more touring and connected more with old friends and colleagues than last year. We even sneaked out to use the city's new bicycle sharing program and visit Fenway Park, among other sights. We were in Boston for the conference from Sept. 22-25. Photo by some lady who took the camera from her elderly father.

Sometimes, if not most times, what happens outside of the sessions can be what’s most valuable about a conference.

I learned plenty the traditional way at the 2011 Online News Association national conference, held in Boston this weekend Sept. 22-25, but I surely got more out of reconnecting with friends and colleagues from other markets, even more than I remember doing at past professional events. It also didn’t hurt that I dove more into Boston than I have while visiting elsewhere for work travel.

ONA has been a national convener among news innovation conversations for more than a decade, and more locally, I’ve been involved with reviving the Philadelphia chapter of the group.

Full disclosure: this year, I was able to attend thanks to the very generous support of the Center for Public Interest Journalism at Temple University and the Wyncote Foundation. I was able to attend last year with similar support from the William Penn Foundation, which has additionally funded the Transparencity reporting project I have led.

After a few years co-running a sustainable niche news site, participating in the online discourse around news innovation and attending events like ONA and others from the Aspen Institute, the University of Missouri and, yes, our own BarCamp NewsInnovation, I felt like attending the event was just as important to talk shop with others doing similar work across the country as it was to catch up on a lot of in-session conversations that felt less relevant to where we are professionally.

Tourism and good, smart friends aside, below I share what I learned in a conference’s traditional way.

A Morning Conversation with Vivek Kundra

Kundra, who served in the Obama administration as the first federal Chief Innovation Officer, kicked off the conference.

Tweets and Takeaways:

• Shorter @vivekkundra: Let’s get the government out of the re-inventing wheels business. @eyeseast
• Why the cloud makes sense for government now: “In the 1960s the greatest innovation in tech was happening in government. In 1980, innovation moved to enterprise. In 2005, something big happened — all innovation moved to the consumer side.”
• Being able to, say, scan baby crib and see if it’s recalled only benefits parents w/access to that tech. $$$ creates tech divide  @AmyZQuinn
• Will data.gov survive the election? “It’s a one-way street,” he said.
• On @WikiLeaks, @VivekKundra cites “inherent risks,” but says “it shouldn’t have happened,” security was insufficient.  @EricCarvin

You Can’t Duck the Math: Entrepreneurial Journalism

B. J. Roche, Jeremy Caplan, Laura Frank and Jennifer Lord Paluzzi get set to start the session.

I was a little disappointed by this session and don’t think it much pushed forward the conversation, with little actionable advice or experienced details. That said, there were some small takeaways.

Tweets and Takeaways

• @Laura_Frank: try to be an ‘intrapreneur’ before you’re an entrepreneur. Now’s the time to pitch ideas within legacy orgs. @McKennaEwen
• “Be revenue promiscuous.” @meghannCIR
• When you start one site people pat you on the head and say, “Isn’t that cute.” When you launch six at a time, they take notice. @eyeseast

Below watch a video chronicling ‘five minutes in the life of ONA 2011.’

Five minutes in the life of ONA11 from Curt Chandler on Vimeo.

New Platforms for Longform Journalism

Panel (L-R): Tim Carmody, Mark Armstrong, Evan Ratliff, Joshua Benton

I’ve been interested in the movement to use tablets and even more read-friendly smartphones to return to longform roots, celebrated by this session.

Tweets and Takeaways

• Longform content movement is in some ways a rebellion to the shortening and speed of content online, says @jbenton
• Already an emerging vocabulary, in which #longform fits for 1-5k word mag-style pieces and ‘short books’ for longer, I think
• Mac Lion @arstechnica tutorial was free on site, still sold 3k in 24hrs at $5 Kindle ebooks, says @tcarmody
• We make ‘short books’ not ‘longform journalism,’ because offering something LONG isn’t a good sell says @ev_rat of @theatavist
• And how many of those are really read later? MT @alicyp: Pieces saved online to “read later” are only between 250-2k words. @hbillings

A Conversation on the Front Lines of the Arab Revolution

Friday ONA 2011 keynote 'A Conversation on the Front Lines of the Arab Revolution' panel, from left: moderator New York Times reporter Jennifer Preston, NPR social media star Andy Carvin, former Egypt Today editor Rehab El-Bakry, noted Middle East freelance journalist and blogger Issandr El-Amrani and American Islamic Congress outreach director Nasser Weddady.

The lunchtime session was timely and interesting, hearing from those involved with the coverage of the Arab Spring.

Tweets and Takeaways

• It’s good to be reminded how relatively small my contribution to the world of journalism. ….Remarkably small. ….Inconsequential, really.
• At #ona11, in session on Arab Awakening, @acarvin warns of not romanticizing a “hot mess” of political transition. @paufder
• @acarvin sometimes the best sources are also the biggest activists @VOAHutch
• “I think of my Twitter feed as a sort of an open-source newsroom,” @acarvin

B.S. Detection for Digital Journalists

My buddy and strangely proud Canuck Craig Silverman presented with Huffington Post star Mandy Jenkins drew me to this session, which had some small takeaways of value and for which you can find their notes and slides here and coverage of the presentation here.

• New users w/o photos, dated updates and few or spam-centric followers are easy signs of less credible Twitter users: @mjenkins
• Image verification tools like errorlevelanalysis.com and regex.info/exif.cgi and tineye.com shared by @CraigSilverman
• “The best verification tool a journalist has is still the telephone,” says @CraigSilverman
• If you get tricked into spreading a hoax or false information ‘it is your responsibility’ to do your best to contact every person online who is continuing to spread that falsehood, said Silverman.

Making It Work with a Small Staff

Silicon Prairie Insider Managing Editor Danny Schreiber and my colleague Sean Blanda presenting at ONA. Yes, notice the local Harpoon beer we gave out.

My colleagues and I submitted three sessions to present at ONA and one was accepted, this one on working with a small staff, which Sean led on our behalf, with Danny Schreiber, who is the managing editor of Silicon Prairie Insider, not unlike a Technically Philly for the Midwest. They shared this sheet (bit.ly.com/small_staff) of their takeaways from their experiences.

Yes, we gave out beer, as depicted above, to note that small staffs have to develop good environments, and the people loved it.

Tweets and Takeaways

• Check out their brain dump sheet here.
• Video Sean Blanda handing out beer from local Boston brewery Harpoon

• best panel ever @harpoon_brewery
• Content departments and scheduling evergreen resources and features can make staff time more efficient, says @seanblanda
• Video of their ‘How large is their editorial staff’ quiz
• How much do you work? @seanblanda notes @technicallyM now limits to 40-50 hrs to fight burnout, @dannyaway says 70+ but says he loves it
• @AmyZQuinn @jerseyshorejen are understandably nervous for freelance rates. @siliconprarie pays $50 & we’ve limited freelancing due to costs
• Screenshot of @dannyaway @siliconprarie 400+ feed Google Reader account for leads, a ‘time suck’ that leads to insight, he said

I Screwed Up (And You Will Too)

My friend David Cohn, of Berkeley and Spot.Us fame, led this session and shared, with Denise Change of the Grand Rapadian, professional failures they had encountered and what they learned from it. Grab their notes here.

• Rule of the Internet: It is faster to try something than debate about trying something, says @digidave
• “The journalism community has begun to recognize failure as something positive. The journalism industry hasn’t.” @moniguzman

Below, watch a video interview collection around challenges various conference attendees felt were the most daunting for the industry, including what looks like a less than thoughtful addition by this reporter.

Other #ona11 Tweets and Takeaways from other conference sessions

• Journalists who add analysis to FB postings about stories get 20% better response. @kmingis
• Twitter doesn’t take down parody accounts like @BPGlobalPR. But will take down impersonators. @lheron
• 40% of Twitter users are just listening, using Twitter as a wire service – @EricaAmerica
• About 200 million tweets are sent every day, @ericaamerica said. @lheron
• General consensus in the room is you never delete a tweet, even if it is wrong. Clarify, be transparent. @PoppedCulture
• I attended briefly an un-conference called Tango with Django, which was a small kick-in-the-pants in us non-developer journalists about trying to learn some basic programming languages.
• The candidate voting guide is one of the dullest yet important things news orgs do. Could really use spicing up online. @kev097
• Some question came out of the annual awards show about whether enough independent and niche sites are being honored. I didn’t want to dive into that mess, though I did not that we at Technically Philly have never even thought about applying, despite doing some pretty substantial journalism projects.

Whether they are meant to be there or not, real business lessons are buried within the made-for-TV, startup-pitch-event-turned-reality-show Shark Tank, and despite the raised eyebrows, I love the program.

A rotating crew of five potential investors, billed as self-made millionaires, hear quick pitches from would-be entrepreneurs of varying skills, interests and levels of experience. Sometimes deals are made; sometimes those entrepreneurs walk away with nothing, aside from a little exposure.

This is not the first time I’ve talked about the show: last fall, I wrote about what the Knight News Challenge could learn from Shark Tank.

I watched most of last season and all of what has come out so far this year. I’ve got to thinking there are a few lessons to be learned from watching.

First, it’s the best reality show on TV because — though the drama is naturally turned up and the personality surely encouraged — it has the same quick-cut, digestible entertaining qualities of other programs, but it also has a taste of next-big-thing trends and dives into the American ethos of entrepreneurship with all the teachings of what works and what doesn’t.

Watch a clip from last season below.

So, yes, I’ve had some takeaways, some for pursuing investment and some, of course, for being the very unique experience of having five potential, competing investors sitting in front of you on national TV.

INVESTMENT PITCH LESSONS

1. Have a strong elevator pitch – Well, obviously, first and foremost, you should have down exactly what you aim to say: simply what your business is, why it’s unique, what needs it fills, how much money it has made, how it will scale to make more and why you’re the person to do it. Gabe Weinberg recently wrote on this and many other angles for your investment pitch.
2. Always offer your sales figures for the last calendar year — Or, if more relevant, in the last year or fiscal year, but the point is to have, ready immediately, how much in actual sales you made in a 12-month period. Projections are fine, recent numbers are cool, orders or forthcoming sales are great, but the first thing to say is what you’ve already done and that figure needs to be during a 365-day period.
3. Have existing sales — Don’t seek outside investment without sales unless you have a very clear, special circumstance, like intellectual property concerns for high technology, pharmaceutical, heavy machinery of the like. ….Even then…
4. Have a clear sense of why the investor needs you — Many of the entrepreneurs took for granted the idea that they were of value to the business being pitched, however in multiple pitches I watched the investors questioning that very idea. Have a rational, reasoned and succinct answer to why you are the best person on the planet to run or be involved in your business — other than just that you began it.
5. Don’t make an investment pitch as your last report — As noted above, you need to know what you want and what’s the least you’ll take and be able to walk away if neither is met. If you’ll take anything and show it and are unable to walk away, you can get yourself in a world of trouble.
6. What specifically will you do with an infusion of capital — You absolutely must be able to very specifically cite precisely what you’re going to spend outside investment on and it better be a very clear way to quickly grow revenue.
7. Investment money is for scale — When speaking to investors (not friends and family) you’re essentially trading a chance to grow your business big for an efficient return of investment. That means, outside investment is for a clear next step to growing quickly your business, as noted above.
8. Know your options for product direction — Startups are pushed lots of different ways, from direct to consumer sales for bigger yields, to private licensing for existing company for quicker payout, to distribution agreement with stores and more. Be well researched in which directions are possible, have a clear sense of which way you think you should go, but be aware of the other options.
9. Getting on store shelves is much easier than staying there — Products can be put on trial by a store, but price point, shelf placement and customer reaction dictate if it will stay there. As I learned, it all comes down to “gross margin per linear inch,” a phrase I now love.
10. Come with a clear direction in mind but be ready for others — Know how, where and why you want to grow your startup, but be willing (and eager) to get criticism and advice from investors who might offer varying directions.
11. Products scale, not services — Don’t go seeking investment for your service. Go seeking investment for a product-driven business or a service made unique by a product that supports it. Perception is that that’s a far safer chance to make a return on investment.
12. Know the size of your industry — Be researched enough to recite what annual sales are across your industry or a related one, be aware of units or other size scales. You need to be able to quickly prove that there is money to be made in an industry that those potential investors might not know well.
13. Know your cost to produce and the retail price — Those are two very important figures to know well in advance of asking for outside investment. Compare to other similar products, pay for user testing, have existing sales and do whatever else will get you to those numbers.
14. Have other investment to speak of and lessons learned – Before seeking outside investment, you should have used your own capital and that of friends and family. That’s where you start, and then have a reason why that money was successful and why you need more of it. If these tests of capital failed, getting more money from outsiders won’t look so wise.
15. Know the difference between a product and a company – Having a single idea or product or service is a fine start, but without anything more, when you seek an investment, that single sale needs to scale in a bigger way than if your idea is to build a robust and diversified business.
16. Licensing a product to an existing company can get costly — Let’s say you have a unique, cost effective way to better maintain the shine of motorcycle chrome, and you want to license the product to Harley Davidson. Assuming your product is good enough and connections strong enough that you meet with the company and get the deal agreed to, you just might be paying a hefty downpayment and pledging guarantee payments that will come from either sales or from limping away from the deal.
17. Gaining investment is not a success, it’s a tool — This is a concept that also came up in a recent interview I had with a scaling tech company in Philadelphia and is an important one. No one’s goal should be to get investment. Investment should be a way to get to that goal.
18. Know your competition — Be well versed in who is doing work similar to yours, directly or otherwise. Being unaware of relevant competition or simply ignoring someone who is can be a big mistake.
19. Having a mission is a wonderful plus, but it doesn’t replace needing to be able to talk business — Offering a reason that you’re motivated to make your business succeed, through social entrepreneurship or personal experience, can inspire an investor, or at least sell her on the idea that you’re determined to succeed. None of that, though, will replace the need to be sure about the business sense of your project. Inspiration doesn’t keep missions alive, the funding does.
20. Patents, trademarking and copyright matters more than almost anything you have – Unless you have sales to suggest otherwise, nothing you have is as valuable as the protection of an idea, product, brand or service to keep your sales your own.
21. Know the lingo but never be dependent on it – Every industry have its phrases and specifics. Know it. Talk it. Talk shop with others in your industry enough that when you encounter an investor who knows that industry, you convey the idea that you know it. But always be able to speak in comfortable, recognizable language.
22. Don’t take it personally — Women have cried, men have wined on the show. Be sure to keep your personal values and pride separate from a group of investors who could likely tear your plans apart.
23. Royalty guarantees are commonly at seven percent of profit per unit sold — When investing relatively large sums for a promising product with little in existing sales, the investors often asked for a product royalty on top of equity. The argument was that the invested money would have to go largely to awareness and less to scaling, so to better get a quick rate of return, royalty on unit profit was desired. The royalty rate varied but most often landed at seven percent, described as a common rate.
24. Evaluate your company appropriately — A surprising number of entrepreneurs came to the table without fully understanding that putting a price on equity in a company sets its evaluation; that is, if you’re offering 10 percent equity in your company for $10, you’re suggesting that your company is worth $100. That said, there’s some variation to evaluating companies, particularly startups and across various industries. Different methods include [A] multiplying your last 12-months of EBITDA by 2.5 or another multiple, [B] putting a dollar figure on all monthly users, [C] totaling full assets with a dollar figure and adding a calendar year projection. There are also startups like YouNoodle trying to get an algorithm to do the work or use resources from Inc. magazine or from CNN or perspective like here.

COMPETITIVE GROUP PITCH INVESTING LESSONS

• Ask for all potential offers on the table before negotiating — By simply asking if anyone else in the room would like to make an offer, you can improve the terms being offered from which to negotiate.
• Be confident, or at least look confident — The pack of investors swarm and cut down those who look nervous or uncertain.

WORDS OF WISDOM

• “Between an idea and a business is a hell of a long way.” – Kevin O’Leary, season two, episode five
• “Don’t cry about money, it never cries for you.” — Kevin O’Leary
• “Don’t ever be enamored by what something sells for. It’s more important what you get to keep in your pocket.” – Robert Herjavec

OTHER READING:

• How to evaluate your financial position — Some interesting, unique measurements of a business’s viability, like the very simple idea of dividing cash on hand by monthly expenses to get the number of months before you hit bankruptcy. That’ll keep you from focusing too much on sales, if overhead is skyrocketing.
• Real-Life Lessons From Shark Tank — Some good, broad takeaways
• Branding Lessons From The Star Of ‘Shark Tank’
• Business Lessons from ABC’s Shark Tank

Following President Obama’s much hyped jobs speech, small business owners have been discussing the direct ramifications for if his proposals were enacted by Congress.

My Technically Media colleagues and I were specifically interested in these details, as provided by the New York Times:

“The centerpiece of the American Jobs Act is an extension and expansion of the cut in payroll taxes, worth $240 billion, under which the tax paid by employees would be cut in half through 2012. Smaller businesses would also get a cut in their payroll taxes, as well as a tax holiday for hiring new employees.” Also: $4k to any business that hires an employee that has been looking for a job for six months.

Beyond the fact that those proposals aren’t actually in place yet, I wanted to share the basic, common reasons for why independent contractors and freelancers are still the way of the world, particularly in publishing.

*Note, I am far from a financial planner. These are just commonplace words of wisdom and direct advice from professionals.

Benefits of independent contractors:

• Save 12-15 percent of expected money paid to the individual, in employer-matched payroll taxes, worker’s compensation and related costs
• Be absolved from worker liability and many workplace expectations
• More easily trial individuals and work on short-term projects with a clear end
• Simply collect a W9 for all individuals and then file a 1099 for those paid more than $600.
• Avoid expectations for health insurance, retirement plans and other additional benefits not already providing early in your business.

Benefits of full-time employees:

• Encourage work from a central office, to foster collaboration and connectivity
• Encourage similar working hours to foster better communication.
• Allow employees to use tools and resources provided by your company (computers, equipment, paid tools)
• Pay them through payroll, instead of paying a variable, monthly invoice
• Dictate all or the majority of the assignments and work projects for the individual

Important Reading:

• Independent Contractor (Self-Employed) or Employee? [IRS]
• Is This An Employee or Independent Contractor? 
• Independent Contractor definition [Wikipedia]
• W2 for full-time employees, 1099 for independent contractors
• W9 and 1099 forms for independent contractors
• 1099 vs W2 at around $60k/yr: How much actual difference?  [ars technica forum]

Check the archived chat here.

Below check out the Storify, I put together highlighting some of the more interesting responses to the series of questions put out by the facilitator. As host, I was meant to drive conversation, outreach and use any expertise I had on the subject.

Below the Storify, I put the answers to the Lightning Round questions for me below in HTML. The lightning round kicked off the night, which ran from 8pm to about 9:30pm, and introduced me to the dozens of participants, who were from around the country.

My answers to the Lightning Round that kicked off the night:

1. In a tweet, describe your organization, companies: @wjchat Co-founder of content strategy shop @technicallyM and our flagship, a popular local technology news site @technicallyPHL #wjchat
2. What is the first step to go from reporter to journalism entrepreneur? @wjchat Desperation? A community in need of help coming together, lotsa time and desire to steal and implement every good idea you find #wjchat
3. What tip would you give someone starting up his/her own news org? @wjchat Pick a niche you care about, spend no money on tech to start and plan for funding that doesn’t rhyme with “schmadvertising” #wjchat
4. What have you learned now, that you wish you knew when you first launched? @wjchat Business 101 like profit per staff hour and admin basics like payroll, invoicing #wjchat
5. What is success for you? How do you know you’ve reached it? @wjchat Sustainability. When we bring on a full-time editor with something of a freelance budget and cover tech in Philly, then @technicallyPHL has won #wjchat
6. Are you profitable? @wjchat Yup. No outside investment and three full-time staffers, we pay ourselves $40k, a meaningful salary for young journalist. Revenue (1) events, (2) foundation projects (3) consulting #wjchat
7. Divide up your time: Reporter vs. businessman vs. Web developer vs. designer. Well, across the three of us @technicallyPHL 30 percent reporter, 40 percent business, 20 percent web dev, 10 percent deisgn #wjchat
8. What’s been the lowest point in this venture? What’s been the highest? Low=selling ads out of mice-ridden apt in 09, High=hosting big @PhillyTechWeek last April w/ impact, community & revenue #wjchat

Remember: I am an individual who is a technology reporter. These are my opinions and should not reflect those of my company Technically Media, nor its technology news site Technically Philly.

Online auction giant eBay bought for $2.4 billion King of Prussia-based e-commerce powerhouse GSI Commerce in March, and I spoke briefly about the deal on WHYY.

As NewsWorks reported, there was immediate concern about the loss of local jobs through contraction and restructuring. In my conversation, I pushed on the notion that there is important value for the region’s perception as a technology hub to have significant exits to point to.

This acquisition, I suggested, can be seen as a good thing.

In doing so, I raised the ire of Old City coworking space Independents Hall co-founder Alex Hillman, who told me he felt strongly that growing companies in Philadelphia was a lot more important than selling out to bigger players elsewhere.

This post is going to argue that we’re both right.

WHAT ARE WE TALKING ABOUT?

Philadelphia hasn’t been much known as a business powerhouse for, oh, I don’t know, maybe a century.

In the second half of the 20th century particularly, with consolidation across a variety of professional and service industries, Center City Philadelphia has become known as mostly the place of middle managers and regional vice presidents, with some prominent exceptions like Comcast, Sunoco, Aramark, Urban Outfitters, (Cigna, for now) among others. Regionally, Wawa is gearing up for something big, and SAP and Bentley Systems are players of important note, but we have a lot more stories about regional executives, like those we’ve seen in the competitive wireless market here.

That means a smaller pyramid of high-paying, white collar jobs, which often comes with other jobs and, yes, the draw of still others who want or need to be in the orbit of major decision makers.

While business woes are nothing new for Philadelphia — a cultural Goliath turned whimpering regional outpost — this city’s high yield, professional IT community has postured itself as a real way to grow jobs, improve perception and bring cache back to the Cradle of Liberty. Something other cities have seen, too.

But, as some like Hillman might rightly suggest, it’s tough to do that when anyone big enough to really impact the region keeps signing the biggest offer sheet, keeping the only Philadelphia beds with CEOs in them inside the Four Seasons.

First, a few examples of companies whose top decision makers aren’t here anymore due to recent sale.

• GSI Commerce, while suburban based, boring and relatively unknown outside of investor circles, it was sold for just shy of two and a half billion-with-a-capital-B and will continue to help shape how consumers shop online.
• Boomi, the Berwyn business-software developer, merged last fall with online computer retailer Dell to form Dell Boomi, keeping offices here and official headquarters in Texas. Jobs may grow here for now, and while that’s valuable, regional offices have little cache and, arguably, less firm a hold on employment roots here.
• myYearbook, the New Hope-housed social network sold for $100 million last month to Quepasa Corp., a Florida-based social site targeted at Mexico and South America and took with it this region’s only truly successful social site with traction and profit.
• Avid Radiopharmaceuticals, the University City Science Center-based early-stage pharmaceutical manufacturer that is working on fighting Alzheimer’s, sold last fall to Indianapolis-based drug shop Eli Lilly for nearly $800 million. For a couple years there, Avid was the go-to defense for Philadelphia having a rich startup life sciences community that could go toe-to-toe to eds and meds foe Boston, a city that, in its own way is questioning how influential it can/could have be/en. Now the staff answers to someone in Indiana.
• Rohm and Haas, the legendary, original chemical technology company was bought by Delaware rival Dow for more than $15 billion in 2008, while a somewhat older example, it’s hard to point to a clearer case of an innovation company making investors (and shareholders) happy at the expense of, well, winning, which would benefit Philadelphia quite a bit more, I’d argue.
• University City-based PhindMe being bought by suburban Motivas and Old City VoIP startup Alteva selling for a meager $17 million to a regional telephone company are somewhat smaller examples of this.
• There is no shortage of examples that are not necessarily in IT but are such cultural touchstones in Philadelphia that they also suggest this sale and bail cycle that has kept any giant from growing here. See Larry Magid going corporate with the Electric Factory in 1998 (though he’s back battling) or, of course, remember that after building a big bold corporate office in the Navy Yard, Tastykake was bought by Georgia’s Flower Foods.

OK, by now, you probably get the point. But here’s a different one.

WHY ACQUISITIONS CAN BE GOOD FOR THE REGION

When that WHYY reporter asked me to assess whether GSI Commerce being bought by eBay would be bad for the region, I answered the only way I could.

I am a technology reporter, focusing mostly on city policy and early stage, consumer-facing startups.  My answer didn’t come from deep knowledge of GSI or eBay’s intentions regarding staff here. My answer was driven by the need for the business community, particularly technology-driven leaders the world over, to have on their lips the news that a Philadelphia area company exited for a few billion dollars.

It was an exciting, cloud-based deal in Philadelphia, a place that, as Inquirer business columnist Mike Armstrong put it in one of the most important columns in Philadelphia news over the past few years, “is home to many big, old companies, but few big, bold companies.”

That is why, yes, entrepreneurs growing their businesses and selling for great profit and whatever other reasons we might offer can be a good thing. Every city — every country — needs a varied ecosystem in any business community, and that certainly includes technology companies selling prominently to other technology companies, even rivals from other cities.

TAKE THE HILL: WHY ACQUISITIONS LIMIT PHILADELPHIA

But here’s why Hillman is also right.

Because for every point the region might get for a high profile acquisition, Philadelphia must get something like a million of them for snubbing convention and pushing to greater heights. As that Armstrong column referenced earlier suggests, though, Comcast is just about the only example of that happening here — as its acquisition of NBC Universal is making it one of the largest media companies in the world.

While I want 10,000 business sharks to bloom here — who chase money to create jobs in Philadelphia — Hillman also sees the need for the community-driven entrepreneur. Companies that identify their sense of place as a contributing factor to their success. These stories in tech are as essential to a region’s attraction and retention of talent as acquisitions and, yes, even likely more so.

We’ve seen this model of hip, young startups who are distinctly not from the Bay Area and are doing so proudly and successfully. Paired with a tech scene and a big, talent-hungry Fortune 500 company spewing out talent, perception can fuel wonder. Some startups in this case that quickly come to mind for me:

• Groupon in Chicago — the father of a million daily deal startups is the giant of the Second City’s startup community
• Gowalla in Austin — the location-based social network ended up losing out to FourSquare but in the height of the battle between the two, the tiny Texas town with the interactive design conference to top them all was rocking with one of the hottest companies in the country.
• SCVNGR in Boston — Sure, the mobile-based scavenger hunt platform was incubated in Philadelphia, but it’s home is in New England.
• Cheezburger in Seattle – the well-trafficked online comedy site has in audience what it lacks in seriousness and is that national voice (whatever that voice is) from a city with considerably less publishing notoriety than Philadelphia, once a leader in such things.
• GoDaddy in Scottsdale — the domain registrar and hosting company is almost 15 years old but remains Arizona’s IT face and fit with the Sun Belt scene, makes a case for being something.

In most of these cases, the tech scene has the freelancers, entrepreneurs and startups, along with the buzzy growth machine and a stable giant or two (think Dell near Austin and Microsoft in Seattle). That’s a nice package, but it seems Philadelphia is missing a piece of the puzzle, and that’s what Hillman seems to want most and feel acquisitions hurt that.

CONCLUSION

Will some of those examples be bought out? Almost certainly. But perhaps this is my final unfinished thought.

If Philadelphia proper and its environs succeed at anything in a big way in technology, it’s in the boring and stable world of life sciences. (I want to add education to fit the ‘eds and meds’ tripe, but after watching Wharton-bred Coursekit flee northward at the first opportunity, it’s clear that no one is listening)

And in the boring world of life sciences, buzz rarely extends beyond those narrow industries.

That’s fine, as an economic driver and jobs creator. But I’m also interested in Philadelphia raising its profile nationally and beyond to help attract and retain more entrepreneurs who might duplicate that work and, dare I suggest, build consumer facing products that could push the cycle forward of changing how Philadelphia as a place of business is seen.

Strictly building businesses won’t do that because Philadelphia IT is best at what most people care least about: slowly, carefully constructing a company.

So, yes, build powerful businesses, grow and make corporate headquarters inside the 135-square miles of Philadelphia. Care about community and place, do cool, innovative and even important things with technology and innovation. That is what we’re most lacking in Philadelphia’s technology community to date: those better known, consumer-facing products of buzz and growth and scale.

But understand that those take very different types of entrepreneurs and they are rarer than the ones who are going to execute the best deal possible for investors and themselves. And don’t ignore that we also need a bit of the marketing that acquisitions help provide.

I do wish GSI Commerce would have done the acquiring, rather than being acquired, but I won’t consider it a failure. Because this region needs as much activity in as many different ways as we can get.