3-D printing for the masses

The day is fast approaching when printers will produce all kinds of 3-D objects -- from toys to tools -- on the cheap, writes Business 2.0.

By Chris Morrison, Business 2.0 - August 22 2007

(Business 2.0 Magazine) -- After midnight, it's dark and nearly silent in the Klock Werks Kustom Cycles shop in Mitchell, S.D. The only sound is the low hum emanating from a box that looks like a cross between a dormitory fridge and a Xerox machine.

Behind a compartment of clear glass, the device - a Stratasys Prodigy 3-D printer - is constructing a complex shape, all curves and spaces, out of plastic.

THROTTLING UP: Brian Klock says his $60,000 printer -- which produces motorcycle parts (red) virtually identical to machine-cut versions -- has paid for itself many times over.

MODEL EMPLOYERS: The Brauns were so excited about the technology that they build a company around it.

When he arrives at his shop in the morning, Brian Klock strolls over to the printer and pops open the glass compartment. Carefully breaking away the supports, he pulls out a perfectly turned machine part - a plastic housing that slides neatly into place between the metal handlebars of the custom-built motorcycle he's been working on, covering the fuel, speedometer, and other gauges. All that's left to do is to paint it.

Klock has transformed a virtual 3-D model in his computer into an exact physical replica. He uses a process similar to the one Mother Nature uses to build structures out of sandstone, putting down one thin layer at a time.

There are two basic methods. One involves "printing" (through an ink-jet process) liquid adhesive on fine-powder layers of plaster. The other uses a nozzle to deposit layers of molten polymer on a support structure. In a shop like Klock's, the piece can be used as is or as a prototype before remanufacturing it in metal.

Ten years ago high-end printers like Klock's cost $120,000 or more. They were employed mainly by companies like Logitech (Charts) and Boeing (Charts, Fortune 500) for quickly testing prototypes of everything from computer mice to military aircraft.

But the cost of the technology has been coming down rapidly. Today the cheapest commercial 3-D printers sell for about $20,000, making them affordable for all sorts of small businesses and entrepreneurs.

Klock was an early adopter. He bought his Prodigy machine last year for $60,000 and says it has already paid for itself many times over. He can design lightweight motorcycle parts, test them, and make changes much faster - and with far less effort - than his competition can with hand tools or standard automated cutting machines.

After a year, Klock says, his business has grown more than 150 percent, and he's getting inquiries about his products from all over the world.

Klock used his 3-D printer to ramp up his business, but John Braun, a Phoenix-based project manager for a telecommunications company, was so excited by the technology that he built a brand-new company around it. He learned about rapid prototyping at a family get-together in 2003, when someone showed him a video of a 3-D printer in action.

See how 3-D printing works

"He bugged out," his wife, Dena, recalls. "He was fascinated."

The Brauns immediately started talking about what business they'd use it for. They toyed with several ideas - jewelry making, medical printing - before settling on architectural modeling.

But when they tried to buy their own machine from Z Corp., a competitor to Stratasys, they ran into a roadblock. Z didn't normally sell to small businesses and had to be convinced that the company the Brauns called Alchemy Models was real before it would take their $50,000 check.

Once the deal was done, the couple set out to sell their idea to local architectural firms, most of which had never even heard of the technology. "We've been at the forefront," says Braun, who dumped his day job a month ago to work full-time at Alchemy.

The Z Spectrum 510 printer, one of the fastest on the market, allows Alchemy to create several models a day; traditional model makers often spend weeks painstakingly constructing their prototypes by hand out of cardboard or balsa wood. Although model makers may add their own special artistic flourishes, the computer-generated renditions show more detail and can be revised without starting from scratch.

Of course, the 3-D printer can't do anything without a virtual blueprint to work with. Braun took a college course in computer-aided design to get started but says he taught himself most of what he knows. "It took me several months to learn to create something really good," he says.

You don't need a degree in CAD to start a 3-D printing business, however. Even in tiny Mitchell, Klock was able to find an employee sufficiently proficient in CAD to turn his bar-napkin fantasy of the perfect motorcycle into a computer model.

Now he's starting to make his own 3-D digital images. "It's the same as learning to draw on a computer," he says. "There's a learning curve."

That curve should get less steep as the market for 3-D printers grows and manufacturers simplify the software. "3-D printing will follow the path of 2-D printing and other high-end technologies that became available to the masses," says Tom Clay, CEO of Z. "It will get easier, faster, and more affordable."

Eventually architecture firms could start printing their own 3-D models. But Braun says he's not worried. He figures someone will need to teach the architects how to use their new equipment.

In the meantime, his business is booming. He expects his two-person company to sell $350,000 worth of models in the next year. And if the 3-D printing market balloons, as the 2-D printing market did 80 years ago, he's betting that someone will become the next Kinko's - and it might as well be him.

He expects to serve all sorts of small businesses, making everything from power tool parts to figurines of Second Life characters.

Klock's ambitions are more modest. "I'm blessed just to be here and cognitive enough to grasp the technology," he says. "3-D doesn't have to be for stealth bombers. It can be for something as simple as motorcycles."

Chris Morrison is an editorial intern at Business 2.0.

The Secrets of Serial Success

How some entrepreneurs manage to score big again and again and...

By GWENDOLYN BOUNDS, KELLY K. SPORS and RAYMUND FLANDEZ
Staff Reporters of THE WALL STREET JOURNAL
August 20, 2007

Five years ago, Tom Scott and Tom First realized they would never have to work again. Friends from college, the pair had launched a juice brand called Nantucket Nectars from the back of their island boat and catapulted themselves -- the self-dubbed "juice guys" -- into the stuff of entrepreneurial legend as their beverage took off nationwide.

They sold a majority of their company to Ocean Spray Cranberries Inc., and when Cadbury Schweppes PLC later bought the entire business for an estimated $100 million in March of 2002, both men were set for retirement -- and they were only in their mid-30s.

But there was no retiring in their futures. Today Messrs. Scott and First are both deep into new ventures that, for now at least, appear headed for success. Mr. Scott leads Plum TV, a New York-based company that operates local television channels in historic, affluent markets such as Aspen, Nantucket and Martha's Vineyard, and has had notable investors including Starwood Capital Group CEO Barry Sternlicht, singer Jimmy Buffett and former Viacom CEO Tom Freston.

Mr. First is in the midst of a new start-up: O Beverages LLC, in Cambridge, Mass., which markets a line of naturally flavored waters already sold in nearly 20 states through Safeway, Balducci's and Bristol Farms, among other stores. In between Nantucket Nectars and their current ventures, the two men started a beverage-distribution-software company that was sold to a publicly traded technology company.

WSJ's Raymund Flandez speaks to New York entrepreneur Ari Meisel, 24, who has founded four companies -- including three before he was out of high school.

"I'm a crazy competitive person, so there's no way I'm stopping," Mr. First says. "I like being in the trenches."

Call them serial-preneurs. While some entrepreneurs struggle their whole lives to bring one idea or product to market, there's another breed: those who do it once, twice or three times more, disproving the notion of beginner's luck. In some cases, the brands and people are household names, such as Steve Jobs with Apple, Pixar and NeXT. But the ranks also are populated with lesser-known entrepreneurs who fly under the radar, hitting one start-up home run after the other.

"I really believe that some people are kind of entrepreneurial adrenaline freaks," says Wayne Stewart, a management professor at Clemson University in Clemson, S.C. "They really get their kicks by starting businesses."

SERIAL ENTREPRENEUR AS CAREER

PODCAST: What can students do to prepare for a career as a serial entrepreneur? Wayne Stewart, a management professor who teaches entrepreneurship at Clemson University in Clemson, S.C., discusses that and other topics with the Journal's Kelly Spors.

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In 2000, Mr. Stewart published a study with two other researchers looking for common traits among serial entrepreneurs -- which he defined as those who had owned and operated three or more businesses. Of the 664 entrepreneurs studied, only 12% fit the bill. But those who did scored higher in all three categories examined: They had a higher propensity for risk, innovation and achievement. They were less scared of failure. And they were more able to recover when they did fail.

Beyond that, many serial-preneurs bring tactical advantages from their first venture to apply the second and third time around. For instance, they recruit top talent from their original companies to subsequent ventures. They double-dip financially, getting money -- and connections -- from people who backed their earlier brainstorms. Several lean heavily on a trusted partner for financial, professional and emotional support in whatever endeavor they undertake.

More than anything, however, the greatest, and more crucial, challenge among repeat entrepreneurs is figuring out how to rekindle for future ventures the innocence, love and hunger that fueled their first enterprise. Despite hitting it big early with Nantucket Nectars, Messrs. First and Scott both struggled after the sale to find a business that inspired them as much as being the juice guys.

"A lot of the drive early on was the drive to not have to leave Nantucket, or write the résumé, or go do anything else. We were hustlers," says Mr. First. Adds Mr. Scott: "What happened was that while approaching the things we love -- boats, water, weather -- we stumbled on juice. I've learned from this that it doesn't matter what I'm good at. It matters what I like."

What's the Motivation?

So why do some entrepreneurs who strike gold once continue to start over? A general contractor might launch a business because he has certain skills, and then stick with it until retirement. Or a banker will work her way up the corporate ladder, happy with the security of a paycheck and benefits, and retire once she has saved enough. By contrast, serial entrepreneurs' main job is the act of creation -- and thus they keep creating new businesses, often after they no longer need the paycheck.

"Most people can't understand why someone who made $10 million would do it again," says Seth Godin, who founded Yoyodyne, an interactive direct-marketing company bought by Yahoo in late 1998. He's now running a new online venture called Squidoo, a free tool that lets users build Web pages about any topic within a searchable community. "That's because most people don't like working, and they think it's irrational to keep working," he says. "But most entrepreneurs don't care about money; it's a tool."

For instance, Scott Jones was a multimillionaire by age 30, having co-founded the company Boston Technology, maker of a voice-mail system now used by many telephone companies world-wide. He retired, and learned how to fly planes and perform aerobatics, but was quickly bored. So he went back to work and has since co-founded Gracenote Inc., an Internet-accessible music database used by iTunes, as well as a robotic-lawn-mower company and a search engine that uses human guides in real time. Those years not creating, he says, were "the most unhappy years of my life."

Moreover, serial entrepreneurs harbor an unusual appetite for risk -- something they can inherit from their parents. Dan Bricklin, 56, has started four companies in his lifetime; his first Software Arts, was sold to Lotus Development Corp. in the mid-1980s. Mr. Bricklin's father was a small-business owner who ran a printing business, as did his grandfather.

" See a chart: Voices of Experience: Perspectives on starting multiple companies from people who have been there as founders or co-founders

Mr. Bricklin, who now runs Software Garden Inc. in Newton Highlands, Mass., says he feeds on the thrill of starting something new and untested. "It's like that sense of walking across a stream on the rocks -- sort of knowing where you're going, but sort of not." As for risk? "If you actually seen the ups and downs of a business, and your family isn't terrified, that makes it a lot easier to do yourself."

Likewise, Tim Miller caught the entrepreneurial bug at age 18 when he received about $500,000 after his father sold a company. Mr. Miller stashed that money away, planning to invest in his own company one day. Fifteen years later, he dipped into the fund to start a software firm called Avitek Inc. based on an idea his then-employer didn't want to explore. Mr. Miller recalls how family members fretted about the danger of going it alone, with his brother specifically questioning his judgment after he hired his fourth employee: How could he possibly put other people's livelihoods on the line?

"But it never truly occurred to me that I would potentially need to let any of them go at any point," Mr. Miller says, adding that he believes successful entrepreneurs "see opportunities where other see risk." He sold Avitek in 1999 for about $13.5 million, without layoffs, and is now running a venture called Rally Software Development Corp., based in Boulder, Colo.

The Value of Teamwork

Mr. Miller didn't succeed alone; he had a partner, Ryan Martens, who now works with him at Rally Software. Their compatibility is an asset whose value Mr. Miller finds hard to quantify. While Mr. Martens as the chief technology officer is deeply invested in software development, Mr. Miller is the business guy. "I think great leaders build teams," Mr. Miller says, "and those teams have some glue and they tend to stick together."

Whether by design or not, on second and third ventures, serials often surround themselves with familiar faces. Partly it's about familiarity and trust. Messrs. Scott and First both tapped ex-Nantucket Nectar employees for their newest ventures. They typically talk to each other several times a week, and Mr. Scott is an investor in O Beverages. "We've never doubted the other's total respect and having the other person's good interest at heart," Mr. First says.

Repeat relationships are also about expediency. Elizabeth Cogswell Baskin has run four companies, including two advertising agencies and a book-packaging operation. Now 46, she's the CEO of Tribe Inc., a $3 million Atlanta advertising agency that works with brands including Porsche, Home Depot and UPS, and peppered throughout Tribe's ranks are faces from her previous companies. "I think it is a huge shortcut to hire someone you already have a relationship with," Ms. Baskin says.

At age 77, Jack Goeken lays claim to having helped start a string of well-known enterprises: MCI, InFlight Phone, Airfone and several others. Now, he's deeply involved in a new start-up, Polybrite International Inc., a Naperville, Ill., company that produces a screw-in LED light bulb that will fit in normal lamps. His daughter Sandra, 49, has worked with him on every venture since MCI, and says one of her father's greatest strengths is "herding tigers" -- that is, finding entrepreneurial, and sometimes difficult to manage, individuals who can make a project happen, but then making sure they don't stick around too long.

"A team can come in and do a great start-up and make history, but the team that does that isn't the team to run it for 10 years," Ms. Goeken says. The key, she says, is to let those people know they'll be taken care of after a sale, so they don't hold a company's progress back worrying about a job. Bringing them on in the next venture is one inducement. Plus, she says, "they are a known entity and you take the risk out of the equation."

There are drawbacks to repeat employees. Mr. Godin, for one, believes the strategy can inhibit a fresh start. "One good thing is 'beginner's mind' -- people looking at something for the first time often have a fresh insight," he says. Plus, new businesses have different needs. At his first start-up, Yoyodyne, he says his team worked 21 hours a day in "emergency mode" -- a pattern he didn't want to repeat. "If I put the whole team together again, I don't know if we could have worked in anything but emergency mode."

More Money, Please

By contrast, hitting up the same investors, Mr. Godin believes, is almost always smart -- particularly if you made them money the first go-around. "They are doing everything on trust," he says.

David Neeleman, the founder of JetBlue Airways Corp., says treating investors fairly and staying close to them between ventures is critical -- as is giving them an opportunity to invest in subsequent ventures. In fact, he says, all of JetBlue's investors, except George Soros, had been investors in his first airline, Morris Air. "I just went back to the investors of Morris Air and said, 'Do you want to do it again?' " He raised $90 million for JetBlue from his old investors and $40 million from Mr. Soros. Mr. Neeleman stepped down as JetBlue's CEO earlier this year after a series of high-profile flight cancellations, though he remains chairman.

What's more, serial entrepreneurs find many of the contacts, and information, they pick up with early ventures can pay off down the road. They court vendors, customers, trade groups, chambers of commerce -- even if they don't need them right away. While working in earlier ventures for her father, Ms. Goeken often spent weekends in foreign countries instead of going home, inviting business contacts to dinner. For many years, she mailed 1,400 Christmas cards all over the world, learned about different religions and picked the brains of partners' low-level employees about their country's customs.

"It may not be that important to you right now, but they might have something to teach you," she says. "I'd invest more than just getting the deal done. And time and time again, I went back to the same people in new ventures."

A Question of Desire

One of the hardest tasks serial entrepreneurs face is recapturing the drive and direction that fueled their first venture, without letting the first success overshadow or dictate what they do next. Sometimes, it's as simple as learning to let go. Says Ms. Goeken: "Walking out of Airfone was the saddest day of my life. When I finally pulled myself together, I never looked back. I don't miss a single company now."

Other times, it isn't so clear-cut. After Nantucket Nectars was sold, the founders started a beverage-distribution-software company because it seemed a natural evolution from being the juice guys. Trouble was, both men hated software, and left before the company was sold.

"I felt like I was turning into a sheep," says Mr. Scott. "I started wondering what I'd do about the rest of my life and was insecure, afraid and slightly depressed." Finally he pushed himself to understand what got him to Nantucket Nectars, and arrived at a rather amorphous answer: passion.

"We were passionate about ice, and pumping out sewage systems on boats; juice was just one of 50 things that we liked," Mr. Scott says. With Plum TV, he loves the civic nature of local TV -- even though it's about as far from juice as you can get. "I think the best entrepreneurs are like artists and painters," Mr. Scott says. "It's about creating. It's not about business."

Likewise, his partner, Mr. First, also fumbled at different enterprises, including starting a grocery store, until his wife said to him, "You're bored stiff, aren't you?" That set off a period of his own soul-searching -- eventually, leading him full circle. What he loved most, it turned out, was what he had already done: building a consumer-products company. So in early 2005, he launched O, and the first bottles hit the Boston market that spring.

Mr. First concedes that he sometimes feels the burden of re-entering a field he once dominated. Consumers don't pick up O and want to drink it just because Nantucket Nectars was a big hit; he doesn't have the "Tom and Tom" story -- he doesn't even have the other Tom.

"I constantly think about how I was the cool guy at Nantucket Nectars, a juice guy," Mr. First says. "I'm risking going back into the same industry and being a loser."

Still, Mr. First says, he's slowly learning to use the previous success to grease wheels where he can: Grocery chains, for instance, believe if he can do it once, he can do it again. The same is true with investors. "It gives me credibility," he says, "and the fight is too tough to leave a weapon in the bag."

--Ms. Bounds, The Wall Street Journal's small-business news editor in New York, served as contributing editor of this report. Mr. Flandez is a staff reporter in the Journal's New York bureau and Ms. Spors is a staff reporter for the Journal in South Brunswick, N.J.

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Write to Gwendolyn Bounds at wendy.bounds@wsj.com, Kelly K. Spors at kelly.spors@wsj.com and Raymund Flandez at raymund.flandez@wsj.com

Fast Money

Factoring isn't for everybody. But for companies that need cash quickly -- or don't want to hassle with banks -- it's one way to go.

By RICHARD GIBSON
August 20, 2007

Businesses often need more cash than they have on hand. It may be for an emergency, a fleeting opportunity or, sometimes, such ordinary events as a payroll to meet.

How to be prepared and avoid a cash-flow squeeze? Short of having an ATM in-house, many firms are using what once was a controversial way of obtaining quick money.

It's called factoring, and it's based on a simple idea. A business sells its invoices or accounts receivable to a firm that specializes in collecting their payments. That firm, called a factor, advances most of the invoiced amount -- 70% to 90% is common -- to the business after checking out the credit-worthiness of the billed party. After the bill is paid in full, the factor remits the balance to the client, minus a transaction, or factoring, fee.

The process can be swift. Once the factor is satisfied that he or she will be paid, money from an invoice can be in the hands of the issuing client within 24 to 48 hours. Indeed, for many businesses, the biggest attraction of factoring is not being held captive by slow-paying customers.

"As a subcontractor for glass and glazing on construction jobs, we'd have to wait 30 to 60 days for our money," says Theresa Woods, controller at Metropolitan Glass Systems Inc., a Tampa concern. So her company began using AmeriFactors Financial Group, based in Celebration, Fla., to collect its bills. "We'd get our money on the spot," Ms. Woods says.

Help at the Start

Some businesses use factoring to get started. Because it is the financial soundness of their customers that most concerns a factor, firms with scant history can nonetheless sell their invoices. "We weren't profitable then, so didn't qualify for bank financing," founder Alton Johnson of Bossa Nova Beverage Group says of the juice maker's early days.

While Mr. Johnson says venture capital was a possibility, he decided that even with factoring's higher interest rates, paying them was preferable to selling part of the company. Factoring got the Los Angeles firm through a critical start-up and growth period, he says.

Although it has helped many businesses get on their feet, some that have factored accounts receivable to meet their cash-flow needs say they viewed it as a stopgap measure.

"It's something we will wean ourselves from over time, as we're able to establish other funding -- which we're working on," says Jeff Brain, chief operating officer of SFGL Foods Inc., a Glendale, Calif., concern that markets seafood gumbo and other items under the Smokey Robinson brand.

Perhaps chief among factoring's drawbacks is its cost. A factor may charge several percentage points more than a conventional lender.

"We know we're not the cheapest form of financing," says Jonathan Schuster, chief operating officer at Premium Financial Services, a factor in Santa Monica, Calif. And for some clients, he adds, "we're a temporary fix, not a long-term solution." But he and other factors can rattle off lists of clients who have been with them for years -- some because they consider banks to be, in Mr. Schuster's word, "intrusive."

Factoring's origins go back thousands of years, to the Mesopotamians. It was also a vital source of financing for American colonists who would ship furs, lumber and tobacco to England. Subsequently, one of factoring's biggest users was the U.S. garment industry, where the time between procuring cloth to be made into a suit, say, and being paid for the final product could be many months.

Today, though, the process is at work across the commercial landscape. Some factors specialize in certain types of businesses, such as trucking, construction or health care. Industry sources estimate that billions of dollars in accounts receivable will be factored this year.

Changing Ties

One reason cited for factoring's increased popularity is what some entrepreneurs say has been the breakdown of the personal relationships that once characterized banking. A decade or so ago, Roger Shorey, president of Accurate Metal Fabricators Inc., Kissimmee, Fla., says he could call his bank and say, "'I need $40,000 in my account,' and they would say, 'OK. The next time you come in you can sign the [requisite] papers.' "

Today, Mr. Shorey says, he'd have to do the paperwork before receiving the money. "That makes factoring more attractive to a guy like me," he says.

Factoring isn't for everyone. It probably wouldn't be economical for a firm that sends out thousands of small-denomination invoices, because of the service fees a factor may assess for reviewing each one for risk.

Another deterrent some cite is a negative connotation tied to factoring's garment-industry heritage, where companies factoring often were found to be financially fragile. A related commonly held impression is that a company uses a factor because it isn't credit-worthy enough to deal with a bank.

The U.S. Small Business Administration says it doesn't have a position on factoring as a financing source. However, it contends that some firms "may be able to find more advantageous terms and conditions through the use of an SBA-guaranteed business loan."

Advocates point to various ways factoring can save a business money. Since the factor handles credit checks and bill collections, a business can reduce its overhead by not having to staff for that in-house. Moreover, because factors won't accept a questionable invoice, businesses can avoid the headaches -- and losses -- that come in dealing with a customer who turns out to be a deadbeat. In those instances, factoring becomes a safety net.

"Any time we get a new customer we forward the name [to the factor] and they check them out immediately," says Tampa Bay Press President John Hedler, who has sold accounts receivable for a decade or more.

Depending on what his factor, AmeriFactors, learns, it may suggest a maximum line of credit his firm should extend to a customer. And while that vetting may deter Mr. Hedler from a sale, AmeriFactors is "really doing us a favor," he says. "Otherwise, if somebody doesn't pay, you have to have an attorney go after them, and it comes out of my pocket."

Factoring can be a big help for those who want to do business overseas but worry about being paid. That's especially true for smaller companies that have little or no experience abroad, or lack the financial means or connections to collect from a customer thousands of miles away.

Mr. Shorey of Accurate Metal Fabricators says he often uses factoring to obtain discounts for his Florida kitchen-cabinet company by paying for large quantities of supplies upon delivery, knowing that he can cover that check by factoring invoices. On a $120,000 truckload of steel, the discount could be $6,000 or so, he says. That's more than enough to cover his factoring costs, Mr. Shorey says. "So I'm using Kevin's money to make money," he says, referring to Mr. Gowen, AmeriFactors' CEO. Businesses also can save money by paying cash on delivery, of course -- something factoring may facilitate.

Even one-person operations can benefit from factoring. Stephen D. Lemish, a lawyer in El Cajon, Calif., who specializes in court-appointed work for indigent people, uses Premium Financial to collect from the courts and other government agencies.

"You can't usually bill until a case is over, and that could be anywhere from two months to a year," Mr. Lemish says, noting that his bills sometimes can run to several thousand dollars. Of factoring as a business tool, he says, "For anybody who has a big cash-flow problem, I would recommend it."

--Mr. Gibson is a special writer for Dow Jones Newswires in Des Moines, Iowa.

Write to Richard Gibson at dick.gibson@dowjones.com

Firms Go Online to Train Employees

Virtual Classes, Videos Give Workers Flexibility And Save Owners Money

By RAYMUND FLANDEZ
August 14, 2007

A few years ago, David Dam, head of sales development for Golden Harvest Seeds Inc., was frustrated with his company's sales-training program for 250 employees and 2,000 independent crop-seed dealers. Mr. Dam would rent meeting rooms for 30 people, and only 15 would show up. He had trouble finding great trainers. Fuel prices were making travel more expensive, and the sessions took valuable time out of workers' days.

But in the spring of 2004, Mr. Dam's company tried planting some seeds in a new field -- online training.

Golden Harvest hired EJ4 LLC, a video-based online trainer in St. Louis, to produce and post online videos for teaching sales reps how to sell Golden Harvest seeds. Mr. Dam tracked the results and found that employees were watching the videos, mostly on Saturdays or Monday mornings. Sales increased, as did demand for more courses, and training costs fell to less than $100 per person from between $175 and $200.

"This would have been next to impossible if we had just standard [face-to-face] training," Mr. Dam says. Now, Golden Harvest, of Waterloo, Neb., offers about 120 training courses on its internal Web site, with 2,000 page views a month. "We're getting more done with less money," he says.

Flexible Learning

For small businesses looking to cut costs and increase efficiency, online training classes and videos are becoming more available -- and more attractive. Some businesses are turning to specialists in training, such as EJ4. Meanwhile, inexpensive or free management and training courses also are available on Web sites of some big companies, such as Microsoft Corp. and Hewlett-Packard Co., and Small Business Development Centers, which are funded in part by the U.S. Small Business Administration in Washington.

On-demand e-learning, delivered over the Web or by audio or videodisc, has become the second most popular approach to learning and training for small businesses, after print-based materials, says Steven S. Wexler, director of research and emerging technologies for the eLearning Guild, a Santa Rosa, Calif., trade group. About a third of its 17,000 U.S.-based members are small businesses that use some form of online training. In comparing the learning approaches of large and small businesses, people in smaller organizations are engaging more in "cutting-edge" training with online games, private Wikipedia-type sites, blogs and podcasts, he says.

Ken Cooper, a partner at EJ4, says companies typically can obtain unlimited online training from his firm for $100 for each employee per year. The typical online course, he says, averages 10 minutes and includes as many as 70 slides with text, animation and video making it visually appealing. Classes can be downloaded for use in video iPods or hand-held sales devices.

Some online-training providers also customize classes. EJ4, for example, can film a company's own managers or other staff teaching a specific course.

Such training galvanized Golden Harvest workers, Mr. Dam says. The company set records in new customer acquisitions and new dealer recruitments. In 2005, the first full year of the online training, the company's revenue jumped 14%, or about $30 million. (Mr. Dam declined to disclose total annual sales.) The firm was recently acquired by Swiss agribusiness Syngenta AG.

Free Classes

Microsoft offers officeliveseminars.com, a small-business resource with free, downloadable online seminars on topics like time management, guerrilla marketing, franchising and sales. The site is separate from Microsoft's officelive.com, where the company markets and sells Microsoft products and business services.

In March, H-P expanded its online offerings for small businesses with free online classes, how-to guides, business templates and success-story videos. H-P's Learning Center for Small and Medium Business is available to anyone. (Go to http://www.hp.com/sbso/ and click on "online classes" at the bottom of the page.)

The classes aren't limited to H-P products; they also teach how to use other companies' software tools, including Microsoft Access and Publisher, Adobe Acrobat and CorelDraw. Other topics include networking and data management, marketing materials and computer skills. A "Business Toolbox," containing how-to guides on computing, networking and other technology, can also be found at H-P's Small Business Connection Web site, www.hp.com/go/sbc.

'To the Point'

Bob Perry, who owns a cemetery-mapping business called topoGraphix in Hudson, N.H., has been taking the H-P online classes periodically for nearly three years, and says it has been a huge help for him.

Mr. Perry, who is dyslexic, has been downloading classes on the CorelDraw software program to help him learn to develop more mapping techniques for his clients. His business is converting paper-based cemetery maps into digital versions and conducting on-site surveys using a Global Positioning System, satellite imaging and ground-penetrating radar to find unmarked graves.

"The programs are very simplified, direct and to the point," says Mr. Perry, who used to take some courses like Excel at a local college but found it too time-consuming.

Write to Raymund Flandez at raymund.flandez@wsj.com

Blog It and They May Come

Small businesses find blogging can be useful -- but awfully time consuming

By SARAH E. NEEDLEMAN
August 20, 2007

A few months after launching a blog early last year, Get It In Writing Inc. started seeing traffic to its Web site soar.

Today the small marketing-copywriting firm in Boca Raton, Fla., draws as many as 150,000 unique visitors a month to its site, compared with an average of only 100 before the blog, which features advice and trends on marketing and resides within the company's Web site.

But Allison Nazarian, the company's 36-year-old founder and president, says all that traffic didn't lead to more sales right away. In fact, the site's sudden popularity even brought on a new financial burden. "We ended up having to upgrade our Web site's hosting plan so it could accommodate that level of traffic," she says.

Now, the number of new clients is finally on the rise, as are sales, she says. So far this year, 25% of new prospects have come by way of the company's Web site, http://www.getitinwriting.biz/. Before the blog was launched, it was 1%, and most new clients came through word-of-mouth and referrals. Sales also are up by 18% so far this year from a year earlier, she adds.

Blogging is "worth it," says Ms. Nazarian, "but you definitely need patience."

Most owners use blogs -- which are easy to set up and require little technical savvy -- to drive people to their company Web site. But entrepreneurs also use them to get consumer feedback or answer commonly asked questions. And some blogs serve as stand-ins for Web sites as a way to describe what a business does.

Nice to Visit, but...

Still, getting people to visit isn't the same as getting them to buy.

"A blog can help you...establish your credibility and expertise, and that is what encourages people to click and buy," says Debbie Weil, an author and corporate blogging consultant in Washington, D.C. "But it takes time achieve it. You don't get instant high search-engine rankings. It's a fallacy to think you blog and you sell."

Small-business owners often create blogs to boost their company Web sites' search-engine rankings. High rankings can help draw more visitors to a site because people tend to click on the top results of a search first.

WRITE IT UP

What's New: Small-business owners are increasingly turning to blogs as a marketing tool.

The Uses: Most owners use blogs to drive people to their Web sites. For others, it's a place to post information and get customer feedback. Some even use a blog in place of a Web site.

The Caveat: Although a blog may get more people to visit a site, it won't necessarily get them to buy.

Search engines rank blogs with fresh content higher than ones that are rarely updated, says Caroline Melberg, president of Melberg Marketing Inc., an online-marketing firm in Wayzata, Minn. So the higher a blog is ranked, the greater the chances of consumers finding it, she says.

Indeed, fresh blog content has brought lots of visitors to Ms. Nazarian's site. In addition to writing two to four brief entries on her blog each week, she posts lengthy ones twice a month titled "Amazing Advertisements." These generate the most traffic, she says, and feature snapshots of clever advertisements from around the globe, plus pithy commentary. The company promotes the entries by submitting them to user-generated social Web sites such as Digg.com and Reddit.com, which publicize online items recommended by members.

Feeding the Appetite

But coming up with compelling content on a regular basis for a blog can be time consuming. Ms. Nazarian says a contract employee responsible for Internet marketing at her firm spends between one and five hours scouring the Web for interesting ads to profile in just one "Amazing Advertisements" entry.

Other bloggers are having better luck turning blog readers into customers.

Since Tracy L. Coenen started her blog, Fraudfiles, in November 2005, she has seen a considerable boost in revenue for her private forensic-accounting practice, Sequence Inc. The Milwaukee-based firm's revenue rose 31% last year from 2005, and is expected to climb 50% this year from 2006, Ms. Coenen says. She spends about 30 to 45 minutes a day posting as many as three entries on her blog, offering news and opinions about her specialty. The blog is located within the company's Web site, http://www.sequence-inc.com/.

Before the blog, Ms. Coenen says, "I don't think I ever had a case that came to me because of my Web site." She says she currently handles about 20 cases a year, and six have come from the blog since it launched. She adds that each case generates revenue ranging from $5,000 to $25,000.

Making the Link

Ty's Toy Box Inc., an online retailer based in Erlanger, Ky., has lured people to its blog about trends in the toy-licensing industry by having other blogs and Web sites link to it. The company arranged a link-exchange agreement in April with TheToyGuy.com, a Web site from toy-industry expert Chris Byrne that features news and product reviews.

"We coordinated it so that occasionally our blog and Chris's blog are about the same issue, but from different perspectives," says George Stolpe, vice president of business development and media relations for Ty's Toy Box. The two blogs link to each other in each post, he says.

Ms. Melberg says the links help boost a company's search-engines ranking because blogs recommended by external sources rank higher than ones without link referrals.

According to Mr. Stolpe, Ty's Toy Box pays a free-lance writer to maintain its blog and says the total cost for it is "a very minimal amount." He says while he can't quantify the blog's role in the near-triple-digit average growth in sales every year since its start, he has no doubt it has played an important part.

Sharing Information

For some businesses, a blog isn't so much about bringing in new traffic to boost sales as it is about sharing information with customers and getting feedback.

In May, Michael Hyatt, chief executive officer of Thomas Nelson Inc., posted an entry in his blog, michaelhyatt.com, asking for input on the cover design of a new book that the publishing company was preparing to put out. Readers were invited to select one of three images, and the company went with the picture that earned the most votes.

But the commentary hasn't always been positive. Two years ago, Mr. Hyatt wrote about how Thomas Nelson, which has about 650 employees, donated around 100,000 bibles to victims of Hurricane Katrina. Several readers posted comments on the blog that criticized the effort, including that donating resources such as food and shelter would have made more sense.

But Mr. Hyatt, who devotes about three hours a week to blogging, says the reaction only bolstered the authenticity of his blog as a source of honest communication between the company and its customers.

Jonathan Ham, an independent enterprise-security consultant in Missoula, Mont., uses his blog to answer client questions that may be of wider interest. He adds new entries to his blog (located within his company's Web site, jhamcorp.com) about twice a month. Mr. Ham says he's under no pressure to write more often because he isn't concerned about boosting traffic to the company's site.

Better Than a Site

In some cases, blogs are actually taking the place of a company Web site.

Take London-based tailor Thomas Mahon, whose blog, called English Cut, is about the tailoring process, or as he puts it, "what happens when you order a suit for $4,000." Mr. Mahon's entries discuss his normal business routine, including his travels to meet clients and photos of him cutting and stitching materials. He says his Web journal helps lend more credibility to his work than a Web site could because he can profile projects as they're being developed without the professional help he would need to regularly update a Web site.

Before launching his blog in late 2005, Mr. Mahon, who employs five subcontracted tailors, says he landed all client accounts through word-of-mouth -- even though he had a Web site, which he has since abandoned. Now he gets twice as many referrals and has had to limit the number of suits he can produce a year to about 150. Previously, he made between 50 and 60 suits a year.

--Ms. Needleman is a reporter for WSJ.com in South Brunswick, N.J.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

The Secrets of the World's Richest Man

Mexico's Carlos Slim makes his billions the old-fashioned way: monopolies

By DAVID LUHNOW
August 4, 2007

(See Corrections & Amplifications item below.)

Mexico City

Carlos Slim is Mexico's Mr. Monopoly.

It's hard to spend a day in Mexico and not put money in his pocket. The 67-year-old tycoon controls more than 200 companies -- he says he's "lost count" -- in telecommunications, cigarettes, construction, mining, bicycles, soft-drinks, airlines, hotels, railways, banking and printing. In all, his companies account for more than a third of the total value of Mexico's leading stock market index, while his fortune represents 7% of the country's annual economic output. (At his height, John D. Rockefeller's wealth was equal to 2.5% of U.S. gross domestic product.)

As one Mexico City eatery jokes on its menu: "This restaurant is the only place in Mexico not owned by Carlos Slim."

Mr. Slim's fortune has grown faster than any in the world during the past two years, rising by more than $20 billion to about $60 billion currently. While the market value of his stake in publicly traded companies could decline at any time, at the moment he is probably wealthier than Bill Gates, whom Forbes magazine estimated at $56 billion last March. This would mark the first time that a person from the developing world held the top spot since Forbes started tracking the wealthy outside the U.S. in the 1990s.

"It's not a competition," Mr. Slim said in a recent interview, fiddling with an unlit Cuban cigar in a second-story office decorated with 19th century Mexican landscape paintings. A relatively modest man who wears ties from his own stores, the mogul says he doesn't feel any richer just because he is wealthier on paper.

How did a Mexican son of Lebanese immigrants rise to such heights? By putting together monopolies, much like John D. Rockefeller did when he developed a stranglehold on refining oil in the industrial era. In the post-industrial world, Mr. Slim has a stranglehold on Mexico's telephones. His Teléfonos de México SAB and its cellphone affiliate Telcel have 92% of all fixed-lines and 73% of all cellphones. As Mr. Rockefeller did before him, Mr. Slim has accumulated so much power that he is considered untouchable in his native land, a force as great as the state itself.

The portly Mr. Slim is a study in contradiction. He says he likes competition in business, but blocks it at every turn. He loves talking about technology, but doesn't use a computer and prefers pen and paper. He hosts everyone from Bill Clinton to author Gabriel García Márquez at his Mexico City mansion, but is provincial in many ways, doesn't travel widely, and proudly says he owns no homes outside of Mexico. In a country of soccer fans, he likes baseball. He roots for the sport's richest team, the New York Yankees.

INTERVIEW EXCERPTS

"This isn't a competition. Being a businessman isn't about that kind of competition. It's a competition for the marketplace."

-- Carlos Slim, in a discussion with The Wall Street Journal. Read the edited excerpts.

Admirers say the hard-charging Mr. Slim, an insomniac who stays up late reading history and has a fondness for reading about Ghengis Khan and his deceptive military strategies, embodies Mexico's potential to become a Latin tiger. His thrift in both his businesses and personal life is a model of restraint in a region where flamboyant Latin American business tycoons build lavish corporate headquarters and fly to Africa on hunting jaunts.

To critics, however, Mr. Slim's rise says a lot about Mexico's deepest problems, including the gap between rich and poor. The latest U.N. rankings place Mexico at 103 out of 126 nations measured in terms of equality. During the past two years, Mr. Slim has made about $27 million a day, while a fifth of the country gets by on less than $2 a day.

"It's like the U.S. and the robber barons in the 1890s. Only Slim is Rockefeller, Carnegie, and J.P. Morgan all rolled up into one person," says David Martínez, a Mexican investor who lives in Manhattan.

Monopolies have long been a feature of Mexico's economy. But in the past, politicians acted as a brake on big business to ensure that the business class didn't threaten their power. But political control faded in the 1990s with the privatization of much of the economy and the slow death of the Institutional Revolutionary Party, which held power for 71 years until 2000.

"It is surprising how big companies have captured the Mexican state. This is a risk to our democracy, and is suffocating our economy," says Eduardo Perez Motta, the country's antitrust chief.

As the face of the new elite, Mr. Slim presents an acute challenge for the country's young president, Felipe Calderón. He must decide whether to try and rein in Mr. Slim despite the mogul's standing as the country's largest private employer and taxpayer. Congress routinely kills legislation that threatens his interests, and his firms account for a chunk of the nation's advertising revenue, making the media reluctant to criticize him.

During the past few months, Mr. Calderón has looked to cut a backdoor deal with Mr. Slim. In a series of face-to face meetings -- the details of which have surfaced for the first time -- the president has tried to convince Mr. Slim to accept greater competition, according to people familiar with the talks. The government holds an important card: Mr. Slim can't offer video on his network -- a big potential market -- without government approval.

But even some within Mr. Calderón's camp privately say the closed-door talks play into Mr. Slim's hands by letting him circumvent the country's regulators, underscoring the weakness of Mexico's democratic institutions. Unless Mr. Calderón extracts big concessions from the mogul, they say, he may become too powerful to control. For his part, Mr. Slim says that his companies are "in constant contact" with regulators, but played down the notion of a secret negotiation.

A talkative man who is generally avuncular but who can easily lose his temper, Mr. Slim rejects the monopolist label. "I like competition. We need more competition," he says, sipping a Diet Coke. He stressed that many of his companies operate in competitive markets, and pointed out that Mexico accounts for only a third of sales at his cellphone company América Móvil SAB, which has clients from San Francisco to Sao Paolo.

Mr. Slim's strategy has been consistent over his long career: Buy companies on the cheap, whip them into shape, and ruthlessly drive competitors out of business. After Mr. Slim got control of Telmex in 1990, he quickly cornered the market for copper cables used by Telmex for telephone wires. He bought one of the two main suppliers and made sure Telmex didn't buy any cable from the other big supplier, eventually prompting the owners to sell the company to him.

His control of Mexico's telephone system has slowed the nation's development. While telephones have long been standard in any American home, only about half of Mexican homes have them. Only 4% of Mexicans have broadband access. Mexican consumers and businesses also pay above-average prices for telephone calls, according to the Organization for Cooperation and Economic Development.

Mr. Slim agrees that many industries in Mexico are dominated by big companies. But he sees no harm as long as they offer good service and prices. "If a beer in Mexico costs 1 peso and in the U.S. it costs 2 pesos, then I don't see the problem," he says.

Despite countless measures over the years that show his companies charge high prices, Mr. Slim steadfastly rejects that notion. During an interview, he orders an aide to fetch his own telephone bills. "See? We charge $14 per month for basic phone rental, cheaper than the U.S.," he says, pulling up a seat next to the reporter. That may be so, but additional fees in Mexico make most phone bills more expensive than in the U.S. Mr. Slim's total phone bill at his own house was a whopping $470 last month. "I have a lot of maids and my sons make calls," he says.

Mr. Slim says his success comes from spotting opportunity early, something he learned in part from reading futurist writer Alvin Toffler, who wrote the best-seller "Future Shock" in the 1970s, and who sends the mogul manuscripts to review. Pulling a dog-eared copy of Mr. Toffler's last book, "Revolutionary Wealth," Mr. Slim leafs through it and shows off his comments in the margins. "Some of his numbers were out of date," he mutters.

Mr. Toffler says he first met Mr. Slim on a trip to Mexico in 1993. Mr. Slim approached him after a speech, surrounded by his family and carrying one of Mr. Toffler's books, heavily underlined. The two have been friends ever since. "If you didn't know he was the richest guy in the world, you'd just think he was a likeable and intelligent guy," says Mr. Toffler.

The fifth of six children, Mr. Slim was born wealthy. His father, Julian Slim, made his fortune on a general store in downtown Mexico City called "The Orient Star." His father died when Mr. Slim was only 13.

THE FOUR D'S

Companies that dominate their industries often resort to the four D's to defend their turf when facing competition for the first time.

Deny -- When Mexico's long-distance market opened to competition in 1997, Telmex at first denied access to its network, arguing that rivals didn't have the legal authorization to operate in the country, say rivals. In recent years, Telmex has tried to block Internet calling service Skype's entry into Mexico, arguing it needs a government concession to enter the market. Telmex says it follows legal procedure.

Delay -- Telmex dragged its feet on allowing access to its network, often not returning calls from executives of rival companies or not showing up at meetings, rivals say. When Mexico's telephone regulator, Cofetel, tried to regulate Telmex in the following years, the company took it to court nearly every single time, tying up the regulator's rulings for years.

Deteriorate -- Rivals complain that Telmex hurt competitors' service. One small rival, MCM Telecom, says Telmex would route all of its calls through one particular station to overload the calls and create busy signals. Telmex says any such move was inadvertent.

Dump -- Mr. Slim's companies can put the squeeze on rivals. Since his Mexican cellphone company, Telcel, has more than 70% of the market, it collects high interconnection fees for calls between networks roughly seven in every 10 times. Rivals, however, have to pay the fee most of the time, making it hard for them to undercut Telcel's prices and gain market share.

Early on, Mr. Slim showed an aptitude for numbers that would help his career. He taught algebra at Mexico's largest public university while finishing his thesis, titled "Applications of Linear Theory in Civil Engineering." His love of numbers also drew him to baseball, a lifelong hobby. "In baseball...numbers talk," he once wrote. Even today, he enjoys discussing baseball, telling a reporter that slugger Barry Bonds should be remembered more for his walk ratio than his home runs.

After college, Mr. Slim and some friends became stockbrokers in the country's fledgling market. Trading by day and playing dominoes by night, the clique became known as "Los Casabolseros," or "The Stock Market Boys." Despite the success, friends say Mr. Slim, less of a party boy and more private than the rest, wanted to run companies rather than trade. "He never liked money as much as the rest of us. He just wanted to be a good businessman," says Enrique Trigueros, one of the casabolseros.

Mr. Slim soon got his chance. After turning around a soft-drink company and a printing firm in the late 1960s and mid 1970s, he made his first big move in 1981, buying a big stake in Mexico's second-biggest tobacco company, Cigatam, maker of Marlboro cigarettes in Mexico. The company generated the cash Mr. Slim needed to go on a buying spree.

A good time to buy came in 1982, a year that would shape Mr. Slim's destiny. That year, the collapsing price of oil threw Mexico into a tailspin. When departing president José López Portillo nationalized Mexico's banks, the traditional business elite feared the country was becoming socialist, and ran for the exits. Companies were selling for as little as 5% of their book value. Mr. Slim picked up dozens of leading firms for bargain-basement prices, a move that paid off when the economy recovered in the following years. He bought Mexico's largest insurer, Seguros de México, for $44 million. Today, the company is worth at least $2.5 billion.

"Countries don't go broke," an unflappable Mr. Slim told friends at the time. Indeed, Mr. Slim always says his inspiration to invest during the downturn came from his father, who bought out his partner in their general store during the worst days of the 1910-1917 Mexican revolution -- a bet that made his father a fortune when the fighting ended.

Mr. Slim still spots good values. From 2002 to 2004, he amassed a 13% stake in bankrupt carrier MCI, later selling it to Verizon Communications Corp. for $1.3 billion. "He has never overpaid for anything," says Hector Aguilar Camín, a historian and friend. While the pair were on holiday in Venice, Mr. Slim once haggled with a store owner for several hours to get a $10 discount on a tie.

Despite his abilities, many here believe his biggest break was the rise to power in 1988 of Carlos Salinas, a Harvard-educated technocrat bent on modernizing the country. The two men had struck up a friendship in the mid-1980s, and Mr. Salinas spoke of Mr. Slim as the country's brightest young businessman. Local wags dubbed the pair "Carlos and Charlies," after a popular local restaurant chain.

Under Mr. Salinas, hundreds of state companies were sold, including Telmex in 1990. Mr. Slim, together with Southwestern Bell and France Telecom, won the bid over one of his closest friends, Roberto Hernandez, who got together with GTE Corp. Mr. Hernandez later suggested the auction was rigged, something both Mr. Slim and Mr. Salinas have long denied. Regardless of whether there was favoritism in the sale of Telmex, the privatization process created a new class of super-rich in Mexico. In 1991, the country had two billionaires on the Forbes list. By 1994, at the end of Mr. Salinas's six-year term, there were 24. The richest of them all was Mr. Slim.

In retrospect, it is easy to see why Messrs. Slim and Hernandez considered Telmex a prize worth losing their friendship. Although countries like Brazil and the U.S. broke up state monopolies into a number of competing firms, Mexico sold its monopoly intact, barring competition during the first six years. And while countries like the U.S. initially barred local "baby bell" carriers from offering long-distance and cellular service in their same area, Telmex got to do all three at once, and across the entire country. Indeed, it won the only nationwide cellular-telephone concession, while rivals had to settle for concessions that were limited to certain regions. When competition was allowed in long distance, foreign carriers were limited to a minority stake in the fixed-line business. Mexico didn't even bother to set up a telephone regulator until three years after the sale.

Dan Crawford was one of those who took on Mr. Slim and lost. In 1995, the California native became chief operating officer of Avantel, a long-distance company partly owned by MCI and the bank of Mr. Hernandez, Mr. Slim's erstwhile friend. Avantel spent around $1 billion building a new network, but it soon ran into trouble trying to connect to Telmex's network -- something it needed to complete calls to and from Telmex clients. Telmex executives simply ignored phone calls or failed to turn up for meetings, Mr. Crawford recalls.

When Telmex did connect the calls nearly a year later, the price was so high that Avantel paid 70 cents of every dollar it made to Mr. Slim's company, according to Mr. Crawford. When Avantel took Telmex to court for monopolistic practices, Telmex responded by asking a judge to issue an arrest warrant for Avantel's top lawyer in Mexico, Luis Mancera, on trumped up charges, Mr. Crawford says. Mr. Slim confirms the story, but says a Telmex lawyer acted rashly, and that the judicial proceeding was dropped. Mr. Mancera declined to comment.

"Slim is very aggressive," says Mr. Crawford, who recently retired from MCI. Avantel eventually defaulted on its debts in 2001, much of which were scooped up by Mr. Slim and later sold for a profit. Avantel was sold recently to another Mexican firm for $485 million -- a fraction of what it invested in Mexico.

For his part, Mr. Slim says Avantel and others mistakenly focused on the long-distance market, which was in decline, rather than wireless, which was growing.

It hasn't been much easier taking on Mr. Slim in the wireless market either. In 2004, Spain's Telefónica SA began selling handsets at a loss here to build market share. But it soon realized that tens of thousands of phones were purchased but never used. According to a case currently at Mexico's antitrust agency, Telefónica says that Telcel distributors bought the phones to keep them off the market, in some cases swapping the phone's existing chip with their own and reselling the handset.

When asked about this practice, Mr. Slim says "It could be. That happens to all of us. If you sell something for $50 or $20 that costs $100, someone's going to buy it." His spokesman and son-in-law, Arturo Elías, says the distributors acted without Telcel's knowledge.

Attempts to regulate Mr. Slim's companies have largely failed over the years. Mexico's telephone regulator, Cofetel, was so weak in the 1990s that Telmex's rivals dubbed it "Cofetelmex." When the regulator did try to act, Mr. Slim's lawyers blocked it in the country's Byzantine courts.

The Telmex chief also had friends in high places. Vicente Fox, Mexico's first opposition president when he won in 2000, tapped a former Telmex employee, Pedro Cerisola, to be his minister of communications and transport. During his tenure, Mr. Cerisola rarely moved against Telmex, say executives from rival telephone companies. Mr. Cerisola declined to comment.

Using money from his telephone empire, Mr. Slim has expanded into Latin American markets as well as new industries in Mexico. His cellphone company América Móvil has 124 million customers and operates in more than a dozen Latin American nations. In Mexico, he has focused on industries that depend on government contracts. His new construction company, Ideal SAB, is currently bidding to run some of Mexico's biggest highways. His new oil-services company recently built the country's biggest oil platform.

Some of Mexico's business leaders say in private that they feel Mr. Slim has grown too greedy. The death of his wife, Soumaya, from kidney disease in 1999 left him without an anchor, says Mr. Trigueros, Mr. Slim's friend from his stockbroker days. "She was a special woman, the kind who keeps a guy in line. Nowadays, he only has business to think about," he says.

Mr. Slim's empire is so vast here now that doing business without him can be difficult. Two years ago, Hutchison Port Holdings and U.S. railroad Union Pacific teamed up to bid on a $6 billion port and railway in Baja California to compete with Long Beach port. But Mr. Slim felt the project had been arranged behind closed doors and was against the idea of the country's biggest project going to foreigners. He made his feelings known to the Baja California governor and the project was stalled. Mr. Slim has since worked to put together a rival consortium, which includes Mexican rail company Grupo Mexico and U.S. railroad Burlington-Northern. He says his potential bid is a better option for the country because the railroad will run along Mexico's north and help spur development. Union Pacific and Hutchison both declined to comment.

Mr. Slim has recently given more money to philanthropy, but he has often said his most important legacy is his family. In 2000, a few years after heart surgery, he put his sons and sons-in-law in charge of his businesses. He also started a group called "Fathers and Sons" that invites Latin American billionaires and their heirs for annual meetings, where they sip fine wines and attend seminars like "How to Run a Family Business."

There is no obvious successor to the patriarch's empire. That gives some Mexican officials hope that one day the state can regulate his companies. Says one high-ranking official: "When Slim dies, we can finally regulate his kids."

Write to David Luhnow at david.luhnow@wsj.com

Corrections & Amplifications:

About half of Mexican homes have telephone lines, according to the World Bank. This article about Mexican telecom magnate Carlos Slim incorrectly said only 20% of Mexican homes have phone lines.

Increasing Traffic to Your Internet Business

Kelly Spors answers questions from readers about entrepreneurship
July 31, 2007

Start by figuring out what phrases people are typing into search engines when looking for your type of products online. Once you know that, you can buy paid search ads, such as pay-per-click ads, using those phrases and pepper your site with them to boost its search-engine rankings.

Showing up high in search-engine rankings is very important since most people use search engines to shop for products online.

There are some key-word suggestion tools that help identify popular search phrases, usually available free. For instance, Google Inc.'s AdWords Keyword Tool and Wordtracker.com let you type in words and see which related phrases get searched most often. Type "Made in America" into the AdWords Keyword Tool, for instance, and you see phrases like "clothing made in America" and "toys made in the usa" have been searched fairly often recently. But "toys made in America" was searched hardly at all.

You also can experiment with various search phrases by signing up for an advertising program, like Google AdWords. The programs let you bid on various phrases. The price you bid is what you pay the search-engine provider each time someone clicks on your ad. The more you bid, the higher an ad for your site appears on the right-hand side of a search-results page. These programs have monitoring programs that let you see what phrases are most effective in generating traffic and customers on your site.

Another way to get attention is to position yourself as an expert on the benefits of buying American, says Aaron Wall, an Oakland, Calif., search marketing expert. You might, he suggests, write a blog on your site with daily updates on timely issues that people who buy American goods care about, such as U.S. manufacturing trends and product safety. A blog should draw more traffic and links to your site, which, in turn, should boost your site's ranking on search engines.

How to Get a Children's Book Printed

Kelly Spors answers questions from readers about entrepreneurship
August 7, 2007

Finding a publisher requires some perseverance, research and, yes, superb writing. A good start is checking out the library to read the most popular children's books and seeing what publishers are behind books most similar to yours. You can then put together a list of those most likely to publish your book.

Many people have written children's books, but few meet a publisher's standards: manuscripts offering intriguing characters with a unique vision. But coming up with that next "Where the Wild Things Are" requires you to understand the publishing world and what sells.

There are numerous classes for aspiring children's authors, but you might also find a writing mentor or two by joining groups like the Society of Children's Book Writers and Illustrators, a Los Angeles-based organization that hosts seminars and networking events for people trying to become children's book writers.

Once you have a manuscript in polished form, send a typed copy, a short cover letter and a self-addressed stamped envelope to publishers. You can find one of the most comprehensive lists of publishers and their submission guidelines in the Childrens Writers and Illustrators Market 2007, a guidebook for children's book publishing. Some publishers allow you to send manuscripts you've sent elsewhere while others want exclusive dibs, so know the policies of each one before sending them your manuscript. Others suggest you send a query letter first.

If, after two months, you still have no response, contact the publisher to inquire. If you still don't hear back, you might write a letter withdrawing your submission and send it to the next one.

You don't need to send illustrations with your manuscript -- unless you happen to be a professional illustrator. Most children's book publishers have a pool of illustrators they work with and prefer lining up their own.

Having a literary agent also will greatly boost your odds of selling your manuscript, because they are attuned to working with the major publishing houses and know what it takes to get a book published. Most literary agents take a 10% to 15% cut of your profits. You can find lists of agents in the Literary Market Place, available at literarymarketplace.com. You also could check the "Acknowledgements" section of books similar to yours.

From Parties to Payoff

By SIMONA COVEL
July 21, 2007

(See Corrections & Amplifications item below.)

Just days after Laurel Touby's bank account grew -- by a lot -- the mediabistro.com inc. founder sounds exhilarated and still a bit unbelieving. This week, Jupitermedia Corp. said it agreed to pay $20 million in cash plus a possible $3 million over the next two years for the business Ms. Touby started in the mid-1990s by hosting cocktail parties.

Gary He

Laurel Touby

Ms. Touby kicked off her venture when she mailed postcards to friends and acquaintances in the media industry, inviting them to gatherings to network and socialize. Sometimes, she walked around the bar with a hat, collecting contributions to cover the tab. "People got married, people got jobs, people got free-lance work," recalls Ms. Touby, who says she's "a broker of people."

By 1997, she was sending an email newsletter. In 1999, she built a Web site -- with the help of a friend's boyfriend -- and its job listings took off. Today, mediabistro.com, with close to $10 million in annual revenue, makes money mostly through job listings, ad sales, membership fees and writing classes.

The Wall Street Journal talked with the 44-year-old Ms. Touby, who once covered small business as a journalist, about how she funded her business.

The Wall Street Journal: In 1999, you had an idea that job listings could be the cornerstone of an online business, but you didn't want to go to friends or family for money. What did you do?

Ms. Touby: I started talking to everyone I knew. One thing I learned writing about small business is that you don't want to be undercapitalized. I got into the old-boy network. I met this guy … he was cute, and we got to chatting. He looked like the young-old-boy network. He agreed to let me take him to lunch. I agreed to pay him a finder's fee, and he introduced me to his ex-girlfriend's father. This guy was my first serious meeting -- I wore my million-dollar suit. I was charging for the job listings and [the investor] had the vision to look at this crazy plan … It took him five minutes, and he was like, "I'm in."

He put in $250,000. I said, "Do you know any leads [for more investors]?" I wanted someone who would be arm's length, not angels who often want too much control. Well, the old-boy network really works. He introduced me to [the person who would become] the lead investor, and he put in $750,000.

He put me through the ringer -- he didn't know media. They only gave me half of the money upfront, and wanted certain milestones, like revenues and profits -- hard things to do!

WSJ: Two years later, the dot-com bubble was deflating, followed soon by Sept. 11, 2001. What happened?

Ms. Touby: I was running out of money. I went back, hat in hand, to get the other half of the promised money [from the investors]. They gave me around $50,000 -- enough to get through the panic. It basically bought two months. For three months, I took a pay cut to zero. Much of my staff took a 20% pay cut. I put up my apartment for a $100,000 line of credit, though I ended up not having to use it.

WSJ: How did you turn things around?

Ms. Touby: We launched classes and seminars, and I realized this makes money. People loved it. In 2003, we had our first profitable month. By the end of 2003, we were really [consistently] profitable. Now, 15,000 people have gone through the classes.

FACT BOX

Company: mediabistro.com inc.

Founded: 1997

Employees: 27

Executive: Laurel Touby

Title: Founder and senior vice president

Age: 44

Years in position: 10

Biggest hurdle overcome: The Internet crash and Sept. 11, by launching a series of offline classes and seminars.

Biggest success: Growing by 30%-plus for several years.

WSJ: Did you go out looking for a potential buyer?

Ms. Touby: I don't just go knocking on doors. That's lame. But I'm always at conferences, always running into people. I was always friendly to potential buyers. I've been out and about -- speaking at conferences, on panel discussions. One reason you do that is to get your name and your company out there for a potential sale. I've always been strategic.

WSJ: When did buyers start coming around?

Ms. Touby: Over the past few years, we had a few hard offers and a bunch of whisper offers. Financial buyers wanted to pay low and sell in a few years. I always wanted a strategic buyer who would help achieve my goals, and I always knew in my head I wasn't going to sell for less than a certain number. We were growing at 30% each year, so it made sense to wait [for the right buyer]. Discussions started with Jupiter on March 16. We had lunch and argued. I think they got a bargain compared to what I wanted. But I think I'm going to get more out of working with them than going at it alone. I never really believed it until the money hit the bank. I was sure someone was going to snatch it out of my hands.

Write to Simona Covel at simona.covel@wsj.com

Corrections & Amplifications:

Jupitermedia agreed to pay $20 million in cash plus a possible $3 million over the next two years for mediabistro.com. An earlier version of the story incorrectly stated the possible $3 million additional payment would be over three years.