Success Depends on Your Team: Tap the Potential

Take it from Ford’s Alan Mulally. Leaders who look for talent, nurture it, and give it authority are ones who achieve.

Wise leaders look at what an employee can do rather than what he cannot do.

When Allan Mulally became CEO of Ford Motor Company in September 2006, it was expected among senior executives that some, if not many, would lose their jobs. Mulally was an outsider, hired from Boeing for his expertise in turning around big organizations.

But according to Bryce Hoffman’s riveting account, American Icon: Allan Mulally and the Fight to Save Ford Motor Company, the newly appointed CEO did just the opposite. He chose to keep nearly all the top leaders despite being warned by some on the board as well as inside the company that infighting might cripple turnaround efforts.

Mulally was not disheartened, nor did he opt to hire many from the outside like himself. He dug down into the ranks to discover new talent that had been under-utilized. He also realized that some of these folks simply needed a new opportunity and, if sufficiently motivated, they would rise to the challenge. And they did. Today Ford is sharply back in the black and is considered the most respected automaker in the world.

The lesson for leaders who evaluate people–that is, every leader–is to adopt a “glass half full” versus a “glass half empty” attitude. Sometimes, as happened at Ford, employees become beaten up by the system and they stop trying, or at least stop thinking creatively, and acting courageously. They go through the motions. It therefore falls to the leader to “wake them up” to tap into their potential.

Mulally’s story is not limited to executives just like himself. All leaders have an opportunity to mine the talent of their organizations.

An executive who is evaluating talent should ask three questions about the individual:

1. Does this person have the skills to do the job?

Most importantly, a staffer must be competent and fluent in the discipline he is being asked to manage. Competency is not simply a matter of knowing how to do the job now, but also how to do it when the job evolves into new responsibilities.

2. What has been holding him back from achieving?

This question gets at roadblocks. Often people have been held down, or mismanaged in such a way that they have yet to prove themselves. Their skills have been sidelined due to an inept boss or simply a lack of opportunity. It is important to explore this question deeply to decide if the candidate has what it takes to undertake new responsibilities.

3. What can I do to help him succeed?

A leader must engage in the employee development process to help unleash the individual talents. Sometimes this is simple. Delegate the authority and responsibility and watch the executive succeed. Other times it will take the form of coaching, and regularly meeting with the individual to discuss her progress, and the challenges she is facing.

There is one more important step: support from the boss. A senior leader needs to express confidence in newly promoted individuals to assure them he has their backs. Mulally is a master of this; he instilled confidence in his team by discussing his confidence in them.

There is also case for people who must be let go. Some at Ford were not on board with Mulally’s One Ford plan and opted out. Fine. Companies going through a re-invention or reinvigoration need more than compliance; they need commitment. If an executive is not fully committed to the new direction it is better that he or she leave.

Talent is not a commodity. It is the lifeblood of the enterprise and those leaders who look for it, nurture it, and seek to capitalize on it are ones who achieve their objectives.






Faster, Lighter, Stronger Cycling Wheels

Enve Composites sponsors many cycling teams, including the United Health Care Pro Cycling Team (pictured).

Inc. 5000 Applicant of the Week Enve Composites uses carbon fiber to make light-weight, durable wheels and parts for the world’s best bikes.

As applications for the 2012 Inc. 500|5000 arrive, we thought it would be worthwhile to shine a spotlight on some of the companies that are vying to appear on our ranking of the fastest-growing private companies in the U.S. (For more information and to apply, click here http://www.inc.com/inc5000apply/2012/). One that caught our eye was Ogden, Utah-based Enve Composites.

Formerly known as Edge Composites, Enve Composites specializes in manufacturing high-performance wheels and other bicycle parts for serious cyclists using mostly carbon fiber, which makes the pieces lighter but durable.

The company’s founder, Jason Schiers, is a serial entrepreneur. Schiers founded several other businesses, including a surfwear line and a window frame manufacturing business. Before he started Enve, he ran a machine shop that built stage equipment for Las Vegas shows like the Blue Man Group and Cirque du Soleil.

After selling that shop, Schiers worked for a company making composites, a hybrid of other materials, which usually creates a stronger and lighter one.

“Carbon fiber was the new, whiz kid material, so the idea of working with it and learning more about it was really exciting to me, and then of course, the idea of using carbon fiber in bikes just put me over the edge,” the avid cyclist says. “The more I worked with the carbon, the more I realized I had a knack for it.”

So in 2005, he launched Edge Compositions. For the first three years as the company built its product, Schiers took on various projects, ranging from making pieces for Burton snowboards to building plates for horse X-rays.

“While we were developing the wheels, we needed to generate some cash to offset the costs of all the development,” Schiers says. “They were fun projects, they were learning projects, and they helped offset the costs a bit, because it allowed us to have some revenue.”

Then in 2008, Schiers decided to stop taking on side assignments and focus on the company’s core product. That year, it launched a full line of mountain wheels, road wheels, handlebars and forks (which holds up the wheel).

The company took off from there, headlong into another major problem: trademark infringement. When Schiers founded the company, he had not anticipated that it would grow so quickly and had not thought about licensing Edge Composites abroad. So after almost a year of back and forth with Europeans who already owned the name, Edge Composites became Enve Composites, requiring all new branding on everything from catalogs to the company website.

“It wasn’t an inexpensive venture, but it was absolutely the right thing for our business to do, and now we own the name Enve,” says Sarah Lehman, who became the company’s CEO in 2010.

Despite some road bumps, Enve had a three-year growth rate of 560% with 2011 revenues of more than $7 million. The company distributes to bicycle shops domestically and abroad and has 65 employees, many of whom are avid cyclists. In fact, they often take two-hour bike rides in the middle of their workday and take weekend bike trips together.

“There’s a lot of lunch-time rides, and they’re strongly encouraged because we feel strongly that to develop the best product, you actually have to ride it,” Lehman says.






Venture Capital Access Program Seeks Minority Tech Startups

Facebook’s falling stock price after its highly anticipated IPO may have disappointed some investors, but that doesn’t overshadow this important point — entrepreneurs took a great idea and turned it into a multi-billion dollar business that created thousands of jobs.

Venture capital firms invested in Facebook early on. Andreessen Horowitz, Accel Partners and Elevation Partners reaped the benefits of its stake in Facebook from the May 18th IPO.  As the fallout continues over the Facebook IPO and the resulting share price slump, what are venture capital funds doing to discover the next Facebook or transformational product or service? Will the next disruptive technology come from a person of color or a woman?

Access to capital is one of the biggest barriers facing startups. This is where the Venture Capital Access Program or VCAP© comes in. VCAP© is a partnership between the Harvard Business School Alumni Angels of Greater New York (HBSAANY) and The National Association of Investment Companies (NAIC).  The HBSAANY invests nearly $2 million dollars into 7 to 10 companies annually.

“We’re representing a diverse group of entrepreneurs with the potential to develop something equally transformative over time if given the resources,” says Ed Dandridge, President and CEO of The NAIC.

VCAP© seeks entrepreneurs across the traditional and digital business spectrum. Dandridge says companies in high growth businesses such as technology, life sciences, and consumer packaged goods are ideal candidates.

Read more at The Grio…

Franchise Your Business: 4 Tips

This neighborhood butcher shop will grow by 30 stores in 2012 for total sales of $70 million. Here’s how they did it.

You’ve started a successful retail business. You may even have several locations. But to get to the next level, you have two choices: Either turn yourself into a large chain, or franchise your concept and let other entrepreneurs in on your success.

For Justin Rosberg, CEO and co-founder of The Meat House, a nine-year-old line of neighborhood butcher shops, franchising offered a way to grow rapidly while retaining control of the company he and his partner had built. The company had grown to seven locations, and the founders wanted to expand further, but they faced a decision. “We could bring in a large capital partner,” Rosberg says. “But for that type of commitment the partner would want a lot. Or we could listen to what a lot of our customers were telling us. They were asking, ‘Is this a franchise? Can we bring one of these to our neck of the woods?’”

Today, The Meat House still owns seven of its own stores, but there will be at least 30 more franchised locations open by the end of this year, with projected sales for the whole brand of around $70 million in 2012, Rosberg says. Here are the steps the company followed to create its successful franchise:

1. Have a clear core concept.

“We work with franchisees who understand that we’re in the hospitality industry,” Rosberg says. “We may be working with the freshest, most sought-after commodities, but at the end of the day, they are commodities. We want to develop that relationship with customers from day one.”

Developing customer relationships across franchised locations meant making a conscious decision not to “feel” like a chain, Rosberg says. Each franchised store is expected to participate in the community where it’s located, supporting local charities, sports teams, and so on.

2. Pick franchisees with care.

Some of the original Meat House stores were located in tourist locations, which was handy: Vacationing entrepreneurs would visit the stores and ask about franchising opportunities. But whether you’ve got prospective franchisees knocking on your door or not, be very choosy, Rosberg advises.

“My business development officer would say it’s character, capability, and commitment,” he says. “They need to buy into the critical success factors you’ve learned. Franchising isn’t necessarily just buying into your successes, it’s about the learning any successful system requires.”

3. Make a serious investment in training.

Not only do the new owners get from two to 10 weeks of training, but The Meat House sends out teams of five employees to work at each new franchise store for more than a month, getting it up and running.

Isn’t that kind of… expensive? “The cost of sending people out gobbles up the franchise fee,” Rosberg says. (The Meat House also earns royalties and a marketing fee on franchise store sales.) “But it’s an investment in their success. It lets us provide the foundation for future successes. We’re hoping they’ll wind up with more than one store, so that by their second or third store, they’ll know the system and won’t need as much training.”

4. Keep tight controls.

Even after very carefully selecting your franchisees and giving them extensive training, successful franchising still depends on maintaining a great deal of control over every aspect of the franchise stores, Rosberg says. “In certain ways, bringing the entrepreneurial spirit and your love of food is to be encouraged,” he says. “But from the point of view of operating the store, we have pretty tight guardrails.”

For instance, Rosberg and the corporate executives know exactly what type of space a store should occupy: 3,500 to 4,500 square feet, either stand-alone or at the end of a strip mall, with 25,000 to 35,000 cars a day going by, preferably on the side of the street where people are headed home. “We always have a level of control over site selection,” Rosberg says.

The company also operates a secret shopper program to check up on stores. “We monitor KPIs, and we can tell from those trends how well each store is executing,” Rosberg says. And, he adds, the corporate office is quick to step in if anything looks awry. “Any problems we’ve had have always been because we let those guardrails get too wide,” he says. “We let the franchisee choose a location, or let an operator we had doubts about complete the training.”

Stretching the rules this way always turns out to be an error, he adds. “You need to be stringent at all times on the things that made you successful.”






Leave Justin Combs Alone: Whether Rich or Poor, An Earned Reward is His To Keep

Justin Combs earned his $54,000 scholarship, and despite his father's wealth, should keep it. (Photo: File)

Everyone is up in arms about Justin Combs, the son of multimillionaire music mogul Sean “Diddy” Combs, being awarded a $54,000 scholarship from UCLA. Many question whether he should keep the scholarship, give it away or have it revoked.

*Insert major side eye and kissed teeth here.*

So I guess if he was a high school dropout, impregnated a teen or committed a murder (or been the victim of one), it would be business as usual in the world of public scrutiny.

It’s ludicrous to ask a young man, who is the alumnus of a very prestigious prep school and reportedly graduated with a 3.75 GPA, to give back what he rightfully earned.

Instead of being a drugged-up, party-hard, nepotistic son of a rich man, this guy decides to excel as a scholar and on top of that, pursue his dream of being a football star, and people get upset about that?

He didn’t decide to just skip school, become a music artist and ride the coattails of his father’s connections and affluence.

He didn’t decide to spend his time unapologetically going in and out of drug rehab and criminal courts, with seemingly no regard for the legacy he wants to build or that of his family.

He didn’t skate through high school with barely a 2.0 GPA, nor has he gotten multiple young, puppy love boos pregnant (as of press time).

He didn’t decide to star in a reality show where he and his friends are bedding different women every night, getting wasted at clubs and participating in trifling (albeit entertaining) public foolery.

Where are our values, people?

Isn’t the whole point of great parenting to be able to teach children the right way to go so  that they won’t be adults constantly picking the pockets of the people who raised them? Isn’t it to teach children to excel for themselves, make their own way and build their own lives reflective—yet independent—of the success of those who cared for and mentored them in their impressionable years?

But, wait. I’m about to let you in on a secret when it comes to millionaires and their money.

I’ve interviewed, been in the company of and talked to plenty, so I know.

*Shhhh … come close. Don’t want everyone to hear. Top secret info here.*

Millionaires are human too. (Go figure.) They too want the chance to smile and be proud that their children can hold their own, are able to walk on their own two feet (and financial merit) and pay their own way through life.

I’m sure Justin Combs is proud to say that he earned that scholarship by being what he should— a scholar who can compete in a working world where many may not care who your father is at the end of the day, in a world where you have to show and prove based on what you can uniquely contribute. (Though money can open many doors, it can’t, for example, buy intelligence, business savvy, athletic tenacity, or ingenuity.)

Instead of throwing salt on an accomplishment that should be lauded, especially as a great example to other young, black youth, leave Justin Combs alone and let him tread his own path to success independent of his daddy’s stacks.

Crowdfunding: The Answer to Startups’ Financial Woes?

Getting funded is one of the biggest challenges for startups. Venture capitalists and angel investors are bombarded with “great” ideas for businesses, and they can only invest in so many. Banks are turning small businesses away for loans. So what’s a startup founder to do if they need money?

pile of money

Obama says try crowdfunding. Rather than rely on banks or private investors to help get your business running with an injection of cash, put it in the hands of the people. With crowdfunding, anyone can invest in a company (in smaller increments ranging from $5 to $1000). And with President Obama’s JOBS Act, it will be easier for startups to get that funding without jumping through so many hoops.

The Act says that nonaccredited investors (read: you and I) can invest in a company, and that company can raise up to $1 million a year without having to register with the Securities and Exchange Commission (SEC). There have been several crowdfunding websites connecting companies with individuals wanting to invest, but since the JOBS Act was passed, their numbers are at an all-time high.

Where to Find the Crowds

There are generic sites that offer a variety of projects people can contribute to, such as Prosper, as well as others more tailored to specific niches, like the creative projects found on Kickstarter. The Act says that people who invest in these startups are now entitled to stock, and some sites like PeoplesVC will facilitate that transaction once the SEC works out the details. Others like IndieGoGo are more lighthearted and simply offer investors perks like stickers, access to special events and products.

Raising $1 million from total strangers may take as much work as pitching VCs. Many people aren’t convinced that crowdfunding will really work to garner large amounts of money from so many investors. It’s clear that getting your project in front of enough investors to actually meet your financial goal will take a lot of promotion (social media looks like the best avenue), but the key is to have an idea that people can get excited about.

How it Works

Let’s look at bikedabs, a startup seeking funding on the site Fundable. The startup’s profile page on Fundable is detailed, explaining its product (a removable attachment that allows bikers to ride clipless pedals with street shoes). The company aims to raise $25,000, and as of this post, had raised about $5,000. Backers of the project receive a variety of rewards, from a t-shirt to an expensive road bike. It’s clear the backers of this project are excited about it: many have offered their own marketing services and connections to help bikedabs succeed.

Visitors can follow a startup’s path toward funding, get updates and share the project through social channels. It’s truly a new way of supporting small business.

The site takes a fee from the money raised; Peerbackers takes a 5% “success fee” to cover its own expenses. The money doesn’t have to be paid back.

Worth a Shot

For a startup that needs a smaller injection of cash, or that simply wants to try a different path, crowdfunding is worth a try. Remember, the key is self-promotion. Crowdfunding sites are just now starting to be recognized by the general public and media, so educating potential investors on how they work and why they’d want to invest in your company is necessary.

Crowdfunding Sites

IndieGoGo: Variety of types of projects available to fund.  Fee: 9% if you don’t meet your goal; 4% if you do.

PeoplesVC: Variety of types of projects available to fund.  Fee: 9%

KickStarter: Funds Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater projects.  Fee: does not list.

Microventures: Interested in any industry but Real Estate and Oil and Gas.  Fee: $350 up front application fees, plus 10% after funding.


Pile of Money Photo via Shutterstock

From Small Business Trends

Crowdfunding: The Answer to Startups’ Financial Woes?

What I Pack: Inside the Bags of Road Warriors

What must-bring gear should you pack on your next business trip? We asked a few hard-working road warriors that very question. Here’s a look inside their travel bags.

What must-bring gear should you pack on your next business trip? We wanted to find out, so we asked a few hard-working road warriors to snap a photo of what’s inside their travel bags. Click on to see what they won’t leave home without.–John Brandon

Found in Town founder Nicole Duhoski, who also runs the market strategy company VineSprout.com, packs an Apple iPad, an iPhone, her car keys, and company pamphlets when she travels. She uses her own product–note the stickers on each item–to make sure that if she loses something, the person who finds it can contact her.

Rob Bernshteyn, the CEO of e-procurement company Coupa, carries a MacBook Pro at all times when hitting the road. On the right, that’s an original T-Mobile Droid phone and a Plantronics headset for Skype calls; on the left, an Itronics adapter for international power outlets, along with a USB drive. He also carries cans of Red Bull, packs of seaweed, and a boatload of business cards.

Bryant Quan, CEO of deal-sharing site Slickdeals.com, carries a Lenovo Thinkpad W500 laptop, a Verizon 4G LTE USB Stick, an Autum Dualist Leather Day Wallet, a Mnemosyne Roots Grid Notepad–beneath is a Hartmann Aviator Leather Folio. He stuffs the whole collection inside a Banana Republic messenger bag. He also packs a Canon Powershot S100, Toddy Gear Smart Cloth, Pilot pens, USB sticks, and various chargers.

Dean Donaldson, the Global Head of Innovation at Mediamind, a digital advertising company, is one serious packer. He brings along an iPad, iPhone 4S, and a MacBook Pro on every trip. Beyond the typical chargers and USB cables, he also drags along a Canon G-Series camera, a Seagate Satellite drive with built-in Wi-Fi, an extra 1TB drive, a small external audio speaker, and a pointer with a 100-foot range.

California-based The Buddy Group is a digital advertising firm. Chief Creative Officer Bryan Boettger packs his gear into a soft Patagonia travel bag. Inside, he brings a Bang & Olufsen Earset for making Bluetooth calls, a BookBook Retro case for the iPad (which looks like a journal), Skullcandy Jay-Z earphones, several moleskin notebooks, water bottles, a De Lacy Wallet, and a portable Wi-Fi adapter.

That’s a hard-to-find HP Folio notebook on the left that’s part of Gary Peterson’s travel arsenal. He’s the president of market research firm Gap Intelligence. He also carries a HP SimpleSave 500GB drive, an iPod Nano, and the iPhone. He’s currently reading How the Mighty Fall by Jim Collins and The Five Dysfunctions of a Team by Patrick Lencioni. Oh, and he brings gifts for clients like The Balvenie whiskey and CaboWabo tequila.

Nicole Andergard, the PR manager at Tripwire, a company that makes IT security software, always carries a MacBook Pro when going out of town. She also brings a high-quality headphone set by Bose, travel docs in ziplock bags, and a back-up portable hard drive. Read more: Secrets of the Most Productive Travelers






College Graduates Are Now Questioning the True Value of Their College Degrees

At a time in which the leaders of tomorrow should be excited to begin their careers, college graduates are now questioning the true value of their college degrees.  What once seemed like a guarantee for a successful life is now a gateway for an interview.  An interview for a position in which their degree will more than likely not reflect the job description.  But with unemployment rates at an all time high, graduates now feel pressured to be thankful for a job offer rather than identifying the opportunity to create something pure.

“After my initial four years of college, I was not ready to graduate.  I knew that if I did, I would forever miss the place I spent the most important years of my life.  The four years that equipped me to look at life through the lens of an egotistic entrepreneur with little experience and a life long list of ideas.  At the end of those four years, I was not yet prepared to say goodbye to the friends who eventually became more like family.  Not ready to begin searching for a real job that would lead to a career.  Not willing to exchange my drunken debates with boring meetings.  I wasn’t even ready to replace ramen noodles with steak and shrimp.”

Since the moment I crawled out of my cap and gown I have experienced mixed feelings towards my college degree.  It seemed like my most successful friends were those who didn’t shake a man’s hand on stage.  The same people I shared a college campus with were those feeling pressure to become waitresses, cold callers and bartenders.  Not the most ideal careers to pay off thousands of dollars in student loans?!

One day while feeling undervalued at my internship (I settled for an internship after graduation), I decided my degree wasn’t worth the tree they cut down.  The next day I decided to turn in my 2 weeks notice and pursue entrepreneurship through talent management, real estate and writing.  From that moment I decided to share my personal thoughts and experiences during my first full year in the real world.  I can honestly say all I have to show for the past 12 months is a story.  A story that I hope you can relate to, learn from, or laugh at.  The memories I have created, people I have met, and lessons I have learned are far more valuable than any 9 to 5 salary.

My goal in life has always been to leave an impression.  With this book I intend to do just that.  Generation Y is a different breed of individuals.

“Generation Y is by far the most versatile and unique group of individuals.  Our competitiveness separates us from previous generations.  Our will to succeed without the patience to start from the ground and work our way up leaves many in a confused state of mind.  We are always thinking of that next innovative idea that will generate millions of dollars while influencing the world.  We know what we want and we want it NOW.  Success has replaced the dollar sign.  The definition has evolved into something more than returning to your high school reunion in a Mercedes.”

I guess what I am trying to do is encourage my peers (and those who will find themselves in our shoes) to pursue your dreams by not giving in to the constant pressure to simply “pay the bills” with a job that you will later regret accepting.  We are currently in a job market that is perfect for young entrepreneurs.  Without much to lose, why not take advantage of the situation and pursue your true career aspirations.  There is little to lose and the world to gain.

Although YOUNG AND HUNGRY; A College Degree is Expensive Cooking Spray is primarily intended for Generation Y, I hope this gives older generations a better understanding of what we are about.

We all know we are Young and Hungry, we just prefer to take our time looking at the menu for exactly what we want.

As a 2011 graduate of Ohio University, I am the author of Young and Hungry; A College Degree is Expensive Cooking Spray as well as a Realtor with RE/MAX Metro Plus in Columbus, OH.  In addition to writing on my blog, www.thebarrpursuit.com, I am a talent manager for up and coming talent in central Ohio.


Meeker Report: 3 Big Takeaways for Entrepreneurs

Former analyst-turned-VC Mary Meeker earned the title, "Queen of the Net," during the first dot com boom.

When former analyst-turned-VC Mary Meeker delivers her annual take on tech trends, the industry listens. Here’s what her latest report means for start-up founders.

Mary Meeker, a former high-profile technology stock analyst and now a partner at the iconic venture capital firm Kleiner Perkins Caufield Byers, has produced an annual assessment of the tech industry for years. Her latest one, which she presented Wednesday at the D10 conference, reveals some eye-opening–and encouraging numbers–for entrepreneurs who either make or use technology to do business. But, jumping on an opportunity and making money off it are two very different things.

Here are three big takeaways for start-up founders:

1. Go east for Internet growth.

Citizens and businesses in western nations have rapidly adopted the Internet for work, study, and fun. In the U.S., for example, 79% of the population has access to and uses the Internet. Impressive, but a number that should make you consider business projections. If your products or sales and marketing channels depend on the Internet, realize that the West is reaching a saturation point. Some people simply won’t be interested in the Internet, and the ones that will can’t provide the same levels of growth we’ve seen.

Not to say that there is no value in western online markets. Far from it. But when you plan your business and consider growth, you have to think of where you can obtain it. Meeker’s report suggests Asia–particularly China, a country with an estimated 513 million Internet users already (more than double the 245 million in the U.S.) And that figure represents only 38% market penetration. China has seen 12% year-over-year growth. India has 38% growth and only 10% market penetration. Indonesia: 22% growth and 23% penetration.

But reality has to set in. Not only do you have to learn how to do business in any of these countries, but you need a business model that will generate revenue and that recognizes the far greater price sensitivity of consumers there.

2. Mobile is moving.

Mobile telecommunications and computing in mainstream 3G technology (without even considering the expansion of high speed wireless connectivity) is an enormous growth engine. The U.S. sees 31% year-over-year growth even with 64% penetration and 208 million subscribers out of a populace of roughly 300 million. Japan has 95% penetration, while Korea’s is 85%. There is also enormous potential in markets that have low penetration: India (4%), China (6%), Russia (8%).

There’s one catch: You have to find a business model that will let you make money on mobile. Mobile e-commerce represents well under 10% of e-commerce in general and advertising costs per thousand on mobile are only a fifth of the already low numbers on the desktop.

Facebook shows what can happen if you bank on mobile without finding a way to fill the vault. The company’s year-over-year mobile growth last quarter was 69%. But management still hasn’t discerned how to make money on mobile, with small displays that curtail the number of ads that can fit on a page (0 right now for Facebook) and no obvious way yet to get a cut of some type of transaction or other. As a result, last quarter saw a 37% increase in ad revenue and only 1% growth in the annualized average ad revenue per user. In other words, mobile users are contributing virtually nothing to Facebook revenue and are undercutting the company’s overall financial position.

3. iPad is hot, but Android is hotter.

You’d have to hide from the news not to hear that iPad use has seen rapid expansion. The tablet has been growing at three times the rate of the iPhone, which is saying a lot. As of January 2012, 29% of adults in the U.S. owned either a tablet computer or e-reader.

Android phones are growing even faster at four times that of the iPhone. You can expect growth in all the devices to continue. Out of the 6.1 billion mobile phone subscriptions, only 953 million have smartphones.

How that growth will play out is a question, though. Apple makes money because it controls its own ecosystem as a way to help lock customers in to its highly profitable hardware platform. But while a few companies are doing well supplying apps, most are making relatively small amounts: $8,500 per publisher per year, and that doesn’t count the skewing effects of the big winners. Android is even less profitable for most companies.

If you want to reach people, smartphones and tablets will be necessary. But don’t necessarily expect that reaching them is enough. You’ll still need to offer something they really want and manage transactions in an efficient and effective way.

Check out the full report below:

KPCB Internet Trends 2012