eBay Reports Positive Q1 Financial Data

eBay has released its first-quarter earnings report, and there's good news for the company's fans: it beat most analysts' estimates. The bad news for fans (and especially shareholders) is that eBay's stock has nonetheless fallen 8.14 percent in after-hours trading, possibly due to a weak forecast.

In fairness to eBay, Google and Yahoo suffered similar fates after making positive Q1 reports of their own. Also, eBay's forecasts weren't awful; the company just expects revenue for all of 2010 to fall in the $8.80 billion to $9.10 billion range, whereas experts would like to see $9.12 billion.

So let's move on to the success stories. eBay reported $2.20 billion in revenue, which is a little bit better than the anticipated $2.19 billion, and it beat earnings per share estimates by a similar margin (reporting $0.42 versus $0.41).

The company recorded a year-over-year increase in total payment volume of 35 percent, too, even though a gain of just 33 percent was predicted.

CEO and President John Donahoe observed as a result, "Our first quarter results reflect another strong step toward achieving our three-year growth and profitability goals."

eBay now simply needs to work on repeating that step a few more times for the sake of not losing too many investors.

The Secret of Sales Success

What really drives salespeople to chase deal after deal?

Great salespeople are masters of psychology: The best of them can suss out pain points and imminent objections just a few minutes into a call. Their own psyches, however, are more mysterious. Are they motivated by greed and competition? Or masochism and the prospect of rejection? Perhaps both, suggests G. Clotaire Rapaille, a psychoanalyst and ethnographer who has been working with major corporations for two decades. The founder of Archetype Discoveries Worldwide in Palm Beach, Florida, Rapaille has built a career helping corporations discover the mental models that animate their customers, employees, and organizations. Much of that research has focused on salespeople, whom Rapaille characterizes with a surprising archetype: happy losers. Understanding what that means, he told editor-at-large Leigh Buchanan, can go a long way toward helping managers get the most out of their often inscrutable sales forces.

Explain the term happy loser.

Salespeople sometimes say to me, "I don't like that you call me a loser." But that's not what I mean. Happy losers are people who see rejection as a challenge. If 95 percent of the time you are rejected, you have to ask yourself, "Why did I choose this kind of life?" The happy loser likes it because 5 percent of the time, he wins. And all those times he loses, he sees as getting to the win.

How did you arrive at the happy-loser archetype?

We always go back to the first imprint: to the first experience in a person's life when he or she creates a mental reference. So we asked salesmen about their first experiences selling -- as children with a lemonade stand or trying to persuade their parents that they don't want to go to school. With the first experience, they feel strong emotion, and emotion is absolutely key to producing the neurotransmitters in the brain that create mental connections. The first time they are rejected is very powerful. What we find with good salespeople is that that first no stimulated them. It didn't make them want to give up. It made them want to find another way.

Are people born happy losers, or can they be trained?

Both. In some corporations I've consulted with, we've had regular meetings with salespeople and asked them, "How many nos did you get this week?" The ones that got nos got points. Then, after a month, we made the correlation: The more nos they had, the more sales they had made. Because they were trying more things, taking more chances. The response was almost Pavlovian. The more mistakes, the greater the reward.

So salespeople should be trained to embrace rejection?

Absolutely. If the manager keeps saying, "You're going to win; you're going to win; you're going to win," and then the guy goes to see the potential client and is rejected, it's a disaster. A sad loser goes down and never comes back. A happy loser comes back.

Another reason to embrace the no is that the sale isn't done until you hear it. Say a customer walks into a store to look at a dress, and the salesperson says, "It's inexpensive; it fits you; you look so beautiful." So the customer buys the dress and leaves. The boss of the salesperson says to her, "How did it go?" She says, "Well, I'm very happy. I sold the dress." The boss asks, "How many nos did you get?" "I didn't get any nos." "Then that's wrong," says the boss. "Because the sale doesn't end when the customer says, 'Thank you.' You say to her, 'You have that nice dress. You should have these shoes that go with it. This purse, this belt, this sweater, this scarf.' At some point, the customer will say, 'No. This is enough.' That is when the sale ends. The sale ends when you lose."

How do you ensure people actually learn from their mistakes?

I really believe in support groups. Companies should have a kind of Happy Losers Anonymous. Salespeople get together and go around the room and say, "I'm a happy loser" -- they know that part is a joke, so it's OK -- and then confess all the mistakes they made. And the group says, "What can we learn from these mistakes?" You end up with so much more learning; it's fantastic. And we know it works, because people don't make the same mistakes again.

Do managers look for the right things when hiring salespeople?

Many managers just look for results. They look for people who can prove that they did sell. They don't understand that this is only one element of the profile. They don't understand the importance of rejection. So they eliminate some very good people. Instead, I would ask: How many things did you try in your life that you failed at? And not only in business. Did you try skiing? Did you try snowboarding? Did you try fencing? How about during your education?

What do you think of in-house sales contests and similar motivational programs with big rewards?

Rewards are good, but the symbolism of the reward is very important. I once did some work on the merger of two large banks. One question for the merged entity was, How do we reward the people who sell? One of the banks was very sales oriented, and it offered its top salesperson a cruise. The other had a slower sales culture; it spent more time building relationships and gave out small diamonds, which salespeople wore on their jackets, like stripes on a uniform. Its salespeople were very proud of those diamonds.

The message of the cruise was, Sell, sell, sell, and for one year you will be on top. But when the cruise is over, it is over. And the next year someone else wins, and you are the ex -- world champion. At the other company, salespeople would always have the diamonds. What do they say, Diamonds are forever? And so it is more like having a gold medal that no one can ever take away from you. The emphasis was on longer-term relationships built over time.

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Are your business problems Driven you to Distraction

Are your business problems making you insane? In his debut column, 37 signals co-founder Jason Fried argues that one of the keys to success is to let your lazy side guide you.

I think of myself as wildly ambitious and unapologetically lazy. Though we've all heard about the good things that come from ambition, laziness gets a bad rap. That's unfortunate. I can attribute a healthy chunk of my success to the positive returns of laziness. Laziness has the best ROI in the business.

Let's start at the beginning. I launched my first real company, a Web design company called Spinfree, in 1996. It was a solo show: just me, a desk in my apartment, and some self-taught mediocre Web design skills. But it was all I needed. The jobs rolled in, and my clients were happy. I could pay the bills, stash away some savings, and work when and where I wanted.

But I wasn't happy. Rather than building confidence, I was accumulating doubt. As my business expanded, I grew nervous and self-conscious. I began to feel as if my accomplishments weren't enough, that I had to take things to "the next level." I thought if I didn't get there fast enough, I'd be bowled over by the competition.

When I bid on projects against larger design firms, I started saying "we" instead of "I" in an attempt to sound bigger. The proposals submitted by my rivals were long and shiny, so mine had to be longer and shinier. I even began badmouthing the competition -- people I'd never met. That's ugly.

The thing is, I didn't need to do any of these things. I thought I did, but I didn't. I was inventing problems. I was making things hard on myself.

How did I figure this out? Laziness. I got tired and let down my guard and wound up learning something important about myself: I love work, just not hard work. I think hard work is overrated. My goal is to do less hard work. And what's hard? Acting like someone else, writing elaborate proposals I don't believe in, and flinging mud at the competition. That's hard and horrible work.

So I put my laziness to work for me. Instead of long proposals, I wrote short ones. Instead of worrying about competitors, I ignored them. And here's what happened: My company got more work. I found better clients. I slept better. I woke up better. I was happier. And, most of all, running a business became a lot easier.

Fifteen years later, this continues to be the most important lesson I've learned as an entrepreneur: Most of the stuff you agonize about just doesn't matter. Truth is, things are pretty easy and straightforward -- until you make them hard and complicated.

This is the ethos that drives what we do at 37signals, the company I co-founded in 1999. We make simple Web-based collaboration software for small businesses and groups. We have millions of users -- and millions in profits -- but we're just 16 people. We don't act any bigger or smaller. We don't put on airs. We just are who we are.

We don't worry much about what the competition is doing. We don't worry about growing pains we don't have yet. We don't spend time on five-year plans and forecasts, because in my experience, they just don't matter.

We invent software, not problems. Real problems will find you; you don't need to invite fake ones to dinner.

Yet that's precisely what many business owners do. I spend a lot of my time speaking with entrepreneurs and entrepreneurs-to-be. They e-mail me, call me at the office, hit me up on Twitter, or introduce themselves at conferences and events. And for the most part, they have one thing in common: They're scared. Worried. Insecure. Just like I was.

It's easy to see why. Conventional business wisdom breeds paranoia. If you don't get big fast, you lose. If you don't obsess about the competition, you will be crushed. If you don't make long-term plans, you'll be staggering in the dark.

Come on. Conventional wisdom is tired, upset, groggy, scared, and a pain in the ass to work with. It doesn't have to be like this.

Instead of spending your time worrying about what could, might, or may happen, spend your time on what matters now. Are your customers thrilled with your service today? Is your inbox flooded with word-of-mouth referrals today? Do your employees love their jobs today? Can people find what they're looking for on your website today? Be honest with yourself. If the answers aren't satisfactory, then I'd suggest that you truly have something to worry about -- no matter how beautiful and comprehensive your business plan is.

Tomorrow. Eventually. Next quarter. Next year. Five years from now. Exit strategy. Throw these words away. They don't matter. Today is all you have in business. Tomorrow is just today again. Next week? Seven todays in a row. A month isn't 30 days. It's 30 todays.

I'm not suggesting you stop thinking about the future. I'm telling you to stop stressing about it. Go on, get lazy.

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Credit-Card Reform: No Fix for Small Biz

Small business cardholders still face penalties that issuers are now barred from charging consumers

When Washington's new credit card rules took effect on Feb. 22, most cardholders got some relief from practices that consumer advocates have long condemned, like raising rates on old balances or applying payments in a way that maximizes interest charges.

Small business owners were the exception. As an amendment to consumer protection laws, the Credit Card Accountability, Responsibility, & Disclosure (CARD) Act did nothing to regulate the fast-growing market for small business credit cards. Unlike corporate charge cards that large companies use to manage expenses, business credit cards function much like consumer cards and are personally guaranteed by business owners, who often carry balances to finance their ventures. Small business cardholders now face a hodgepodge of policies and uncertain prospects for reform.

Business cards account for 15% of all volume charged on credit and debit cards, analysts estimate. The law did direct the Fed to recommend additional protections for these cardholders to Congress by May 22. A bill to cover business cards with CARD Act-style protections has stalled in the House. Small business advocates hope to attach the measure to a future Senate jobs bill—and to pass it before business owners take on credit card debt mistakenly thinking they're protected from retroactive rate hikes, says Molly Brogan, vice-president of public affairs at the National Small Business Assn., which has long pushed for credit card reform. "There's mass confusion," she says.

The banking lobby says giving small business cards the same protections as consumers will curtail credit. Because small businesses are risky and tend to charge more than consumers, issuers will have to cut credit and preemptively raise interest rates if they can't adjust rates later on, says Ken Clayton, senior vice-president of card policy for the American Bankers Assn. "You're merely going to exacerbate that pullback in credit that's already taking place in the marketplace," he says.

Some card issuers are voluntarily giving business customers bits of the same protections consumers now have. On Apr. 1, Bank of America (BAC) announced that it would cease raising interest rates on existing balances in May for its 2 million small business cardholders and add other protections in July. Capital One (COF) included small business accounts in many CARD Act-related changes in February.

Without the force of law, these changes could be reversed by card issuers. And small business cardholders still face penalties such as fees for going over credit limits that issuers are now barred from charging consumers. Kevin Reeth, CEO and co-founder of online bookkeeping startup Outright, has been charged for exceeding the $3,000 credit limit on his American Express (AXP) small business card twice since AmEx abolished such penalties for consumers on Oct. 1. On other occasions, his card was declined—making it difficult to tell when a charge will be approved if he's near the limit. AmEx spokeswoman Rosa Alfonso notes that business owners can avoid over-limit penalties by paying down their balance before their billing period ends.

While card issuers often argue that they need to be able to raise rates on existing balances to compensate for the risk of extending unsecured credit, BofA doesn't expect that abandoning its ability to adjust rates will limit the amount of credit it can extend, says spokeswoman Betty Riess. The bank aims to boost lending to small businesses in 2010, including credit card loans, by $5 billion. Say Riess: "We're trying to make every good loan we can."

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14 Tips for Small Companies to Thrive in a Down Economy

8. Don't pander — ponder! Showcasing your wisdom without taking time to probe causal factors can be insulting. Instead, honor the complexity of client issues. Be inquisitive about their goals, frustrations, hopes, and struggles. Then construct a matrix of options and augment this with the advantages and disadvantages of each.

9. Prepare to bend by predicting the trends. Be vigilant about monitoring relevant trends, since they're always in flux. Even more importantly, anticipate and maintain an awareness regarding forces that could affect the trends you're monitoring. Doing so enables you to foresee and adapt to emerging trends before your competitors do.

10. Don't defer getting referrals. If you're not comfortable asking your satisfied clients to provide referrals, do it anyway! Once you've delighted them, conduct a brief interview to learn what they valued most about working with you. Using this information, draft a brief testimonial for them to edit and print onto their letterhead.

11. Publicize or perish. Both credibility and sales increase from publishing articles or books, and speaking on your area of expertise. It's not that hard! Every time you solve a problem for a client, produce an outline of the process from start to finish. Then fill in the outline, and voila, you have an article or a speech. Multiple articles can comprise a book. Writing a book is less daunting if you write only one chapter at a time without thinking of it as a book.

12. Value for free, service for fee. Consider providing an educational session to prospective clients at no charge, but structure the delivery so that they want more. For example, deliver the information you promised to deliver, but make reference to additional, high value information your clients receive.

13. Don't attend conventions without clear intentions. Recoup the opportunity cost of attending conventions. Get an attendee list in advance of the meeting, identify and research your targets before you even leave town. Then make it your mission at the meeting to establish contact and engage them. Remember: Attendance is not an outcome. Make your attendance result in new business by preparing in advance.

14. Break it down to build it. Identify key result areas of your business, such as prospecting, delivery, marketing, speaking, new product development, etc. For each, write out measurable goals each quarter. Break these down into component parts, and include them in your calendaring tool.

No matter how many of these tips you implement, your own outlook and attitude can diminish their effectiveness. Those who prevail in difficult times are the ones who steadfastly refuse to allow negativity to form a barrier to their success. They instead deliberately and diligently take constructive action, thereby refreshing and reinvigorating their minds and their spirits, enabling them to take more action, which refreshes and reinvigorates.

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14 Tips for Small Companies to Thrive in a Down Economy

If your thoughts are primarily fear-based, if you’re envisioning the worst for yourself and your business, if your conversations are focused predominately on bad news, then you’re seriously impeding your own success. Instead of giving succor to all the negative blathering, buckle down and determine to take three actions every single day to improve revenue. Here are some suggestions.

1. Don’t you DARE pick up that phone unless it’s to generate business! Be ruthlessly disciplined about generating business as JOB ONE. Any activity that doesn’t secure new business should be delegated or done during non-business hours. Prioritize everything else around this fundamental principle. During business hours, dedicate yourself exclusively to building your business.

2. Virtually stalk your prospects. Describe your ideal client. What types of organizations do they belong to? Join them. What kinds of publications do they read? Read them. What types of events do they attend? Attend them. Differentiate yourself with detective work about your targeted prospects. Research them; tap your network prospects. Research them; tap your network to learn more. This information helps warm up cold contacts, and sets you apart from most others who won't go to this much effort.

3. Work backward to move forward. If you're tracking important ratios, you know how many qualified prospect meetings it takes to generate one client and the average sale per client. With only these two pieces of information, you can control how much you sell each month. Determine desired sales volume, then conduct two to three times the number of qualified prospect meetings required to achieve it.

4. Invite scrutiny. Whose business acumen do you admire? Who's already successful in your field? Whose clientele does your product or service complement? Invite these folks to be your advisory board. Meet quarterly to gain their advice on your business challenges. Advisory boards impose a level of scrutiny and accountability that both challenge and comfort. Ensure you get unbiased, unemotional, tough truths by not including friends and loved ones on the board.

5. Your pipeline is your lifeline. NEVER stop prospecting. In good times or bad, keep your pipeline full! Even when you’re flush with business, don't get cocky. Realize that if you wait to prospect until you need new clients, it will be too late to achieve immediate results.

6. You lag before you bag. The lag time between your first meeting with a qualified prospect and closing the sale is an essential ratio for managing your productivity. The sales you bag today likely began at least three months ago!

7. Play the numbers. Whether you enjoy it or not is irrelevant — networking is an imperative. Learn how to do it well. If you want to survive the lean times, you have to network regularly and focus on helping others. Understand that networking is a numbers game. Play to win!

To Be Continued

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