US Fed to trim stimulus soon; World's one in five on social networks; How not to start a start-up

1 US Fed to trim stimulus soon (BBC) Federal Reserve officials said they plan to begin trimming the central bank's stimulus efforts in "the coming months". They believe that the US recovery is strengthening, according to minutes from their October meeting. The US central bank is currently engaged in an $85bn a month bond buying programme to lower interest rates and boost the US economy. However, officials also stressed that investors should be assured that short-term interest rates will remain low for an extended period of time - perhaps even after the unemployment rate drops below 6.5% benchmark.

The minutes also note that Fed policymakers had an unscheduled conference call on 16 October - just before the US was set to breach the so-called debt ceiling and potentially default on its debt obligations. According to the minutes, policymakers agreed that had Congress been unable to come to an agreement, the situation would have been "potentially catastrophic".

http://www.bbc.co.uk/news/business-25027552

2 World's one in five on social networks (Khaleej Times) An estimated 1.61 billion people, more than one in five globally, will log in to social networking sites at least monthly this year, the research firm eMarketer has said. The study said the number was up 14.2 per cent from a year ago and growth will push that number up to 2.33 billion by 2017.

The highest penetration of social network users, according to eMarketer, is in the Netherlands, at 63.5 per cent. Norway was second at 63.3 per cent, followed by Sweden (56.4 per cent), South Korea (54.4 per cent), Denmark (53.3 per cent), the US (51.7 per cent) and Finland (51.3 per cent). The 1.61 billion figure represented 22 per cent of the world’s estimated population, the survey said.

The report said India is seeing the highest growth this year of 37.4 percent, though only 7.7 percent of the population uses social networks. Indonesia’s numbers will climb 28.7 percent and Mexico will grow by 21.1 percent. eMarketer said. All three of those countries are also high-growth areas for Facebook, the world’s largest social network with more than one billion users. The US remains the country with the greatest number of Facebook users, at 146.8 million, but with India’s large population and expected growth rate, it will have the largest Facebook population of any country by 2016, according to the report.

http://khaleejtimes.com/kt-article-display-1.asp?section=lifestyle&xfile=/data/lifestyle/2013/November/lifestyle_November20.xml

3 How not to start a start-up (Caroline James in Sydney Morning Herald) Nic Blair knows a thing or two about how to stop a business in its tracks. But eight failed ventures – including one that took just four days to go belly up – have not killed the 27-year-old's love of building businesses from scratch. The Brisbane businessman credits his romping commercial career with teaching him lessons that have resulted in two successful start-ups – Search Factory and Brus Media. Search Factory, is a search engine marketing agency, started in 2011 and now employs 25 people. Brus Media is a mobile phone advertising network started in 2012 and is expected to turn over $1.5 million this financial year.

Blair names five things he discovered you should never do when starting a business: Launch without watertight paperwork. It doesn't matter how ingenious your business idea looks on paper, if you haven't got all legal documents before trading, you are doomed. Blair learnt this the hard way in 2008 when he and two colleagues launched their first start-up, a premium SMS subscription service. Things were looking good ... except to get the permits needed to run competitions the trio used their former employer's address and, when he caught wind of this, he wasn't impressed. "We were fired and in the end the business lasted four days," Blair recalls.

Shirk good legal advice. After Blair and his business partners were sacked they were told their former boss was "going to claim we cost him $200,000 and seek damages". The news could have been devastating had they not had the foresight to pre-emptively contact their own lawyer. They refuted the damages bill and in the end, they won the battle. "We had kind of expected some fallout, so while it cost us $6000 in our lawyer's costs – $2000 each – it was a lot less than the $200,000 it could have cost us without good legal advice," Blair says.

Start trading without enough market research. Blair spent the next two years launching six more start-ups and working part-time as a furniture removalist. All of them failed. Blair says 2008/2009 was a period of "making a couple of hundred dollars a week, learning heaps, making lots of mistakes and losing a bit of money." Raid your own pockets if they are not deep. Blair borrowed $25,000 from a bank in 2009 to try to keep his clutch of start-ups operating. In hindsight, he says he should have sought an investor partner. "Big entrepreneurs say 'use other people's money if you can' and now I see the benefit of giving up a share of your business if it means you can invest someone else's money; reaching into your own pockets is fine only if you can afford to lose the money."

Chase short-term gains. Blair worked for Flight Centre during 2010 before launching two businesses – Search Factory, and a network of 25 travel websites. The travel sites failed. Asked why, Blair says he "took some short cuts" to boost their (the sites) short-term web traffic. His quick-fix search engine optimisation tactics backfired and Google "really penalised me". "It meant they hit a peak then just fell away as we couldn't sustain that volume and I ended up selling the travel websites really cheaply to a guy that was working for me. "I spent about $30,000 on them and ended up getting $12,000 back."

 

http://www.smh.com.au/small-business/startup/how-not-to-start-a-startup-20131028-2wbu2.html