and what small business owners can learn from the likes of lady gaga, justin bieber and madonna. that's all coming up next, on "your business." small businesses are revitalizing the economy, and american express open is here to help. that's why we are proud to present "your business" on msnbc. hi, there, everyone, i'm j.j. ramberg and welcome to "your business" where we give you tips and advice to help your business grow. for serial entrepreneur michael diamant starting a business came

naturally. but sometimes having a great idea isn't enough. after starting two technology companies in the '90s, diamant learned the hard way about the importance of having the right business partner, and how timing can mean everything. after this resilient entrepreneur started his third business, a baby lifestyle brand, he was ready to hop, skip and jump ahead of the competition. ♪ baby baby baby always baby baby baby ♪ >> when michael diamant started the innovative skip hop brand of baby products with his wife ellen eight years ago, it wasn't the first time he had started a new business. in fact, it took three tries, and three different companies before he got it right. >> i started looking at a world where you are your own boss. that's all i kind of really saw. that's all i kind of really knew, and it was much more natural to me not to have a boss, i guess you'd say.

>> for michael, starting a business came easy. making the companies work long-term was the tricky part. an entrepreneur during the go-go internet era of the late '90s, he started t3 media, with a business partner in 1995. >> we had a company which built very large websites for large corporate customers. >> but as the company grew, michael and his business partner were seeing eye-to-eye less and less. they simply did not have the same goals as they did when they started the company four years earlier. >> we sort of began to disagree on the rate of growth we wanted to pursue, the way we wanted to pursue it. and i'm very much a growth kind of person. i like to, you know, reach for the next opportunity. >> although it was bittersweet, michael left t3 media to pursue his next big idea. money was plentiful in those days, and michael had no trouble raising capital to launch his newest brainchild. >> so in 1999 i started a

company called i-clips. unlike my first company, it was a real venture-backed business, we followed that more traditional route, raised significant amounts of money. and the idea was we were going to create a system that allowed people to share video on the internet. create our then videos and share them online. >> so what is an i-clip? free streaming video messages that you create. >> it was youtube before it really was before its time. >> when the markets dried up in 2002, i-clips went bust. michael had to let 35 employees go, and start all over again. >> what a company no longer seems to be, flat-lines and you know it's flat-lining, you have to move on. >> undeterred, less than a year later, michael was plotting his next business, which was entirely different than anything he had done before. and just like the old saying, the third time was the charm. >> this company, skip hop, was

very much boot strapped for many, many years. and we achieved that boot strapping because of some really, smart deals with our suppliers. and really smart ways of managing our risk. but, we didn't put a lot of money into the business but we put a lot of sort of vision into the category. >> with lessons learned from his prior businesses, this time michael had the right partner, his wife. and perfect timing for launching a modern-day baby gear company. >> it's amazing. we're only seven -- we're going on eight, eight years old. and at the time when my son was born, all of the diaper bags were winnie the pooh, or plaid, very old-fashioned. and i was looking for a bag that had a unisex feel, very sporty, my husband could use it, and i was able to hang it on a stroller. so i came up with that concept for skip hop. it's not that long ago. but the looks were very old-fashioned in the baby space, and since then, everyone's picked up, and has done very modern design on baby.

it just was time. >> skipping far beyond their original visionary diaper bag, the company now sells an array of innovative, award-winning products, all over the world. after having two businesses fail, the ultimate test that skip hop is here to stay was their performance during the recent economic downturn. >> 2008 was a very difficult year for everyone in this category. and it caused a lot of companies to question, you know, are they real? you know, is there a real demand for my product, or was this kind of riding a wave? and i think when we came in 2009, and saw that, you know, our products were still very much in demand, we knew that we sort of, we had built something that was really meaningful. that we really reached our customer in a unique way. that it wasn't some, you know, luxury purchase. that parents really wanted to have our products in an up market or a down market. >> when a small business doesn't

work, it can certainly be devastating. but, as we just saw, it can also be a great learning experience to build from. let's turn to this week's board of directors for their thoughts. phil davis is a serial entrepreneur who has started three businesses. his most recent addition is a restaurant called phil the fire. jen gruber is also a serial entrepreneur. she's launched three businesses, as well. jen's also the author of the book "what if, and why not?" . and alfred edmund is the multimedia editor at large for black enterprise dotcom. great to see all of you >> thank you for having me. >> phil, you -- you kind of reopened one of your first businesses, but you did see a failure in your business, and that's what you think makes your success now, correct? >> absolutely. i had seven years to think about what i could do different when phil the fire closed back in 2004. but i also had to reinvent myself in that process. so i had to distinguish between defeat and failure, between my emotions and my passion, and between who i am and what i did.

and through that process i was able to bring phil the fire back stronger, better, and do the things right when i was given the chance to take a second bite at the apple. >> i think what you just said is so interesting. this idea of distinguishing about emotions and passion. because that's the only way you could learn, right? i mean, your book, what if and why not tells people to just go for it. >> right. so, a lot of it is always following your passion. but knowing, also, where the timing is right, and the circumstances are examples right now where sometimes the timing is not right. so it takes you to step back out of your emotions, reflect what worked. why it worked. and what wasn't working. and in coming back and always re-evaluating and reinventing yourself. being an entrepreneur is about being a person who's willing to evolve constantly. reinventing yourself, and recreating as the time changes. we have to change. >> and michael, what i love about this piece is that he's kind of a true entrepreneur. he said, i can't imagine working for someone else. but he had tech companies and now he has a baby company.

>> well, if you're an entrepreneur, you're an entrepreneur all the time. and one of the things that i was old very early in life that i repeat a lot is the road to heaven is paved through hell. and what i said that to mean is every negative experience you have, was necessary, you had to have that experience with you for when you got to that point of really getting it right. so, i submit that if he didn't have those earlier failures he would not have recognized the opportunity. and he could have made his current bases. >> phil in your personal experience, do you think you had to fail in order to success? >> oh, absolutely. one of the things about the failure process is that it forces you to dig deep. and i dug really deep into myself. and i came out on the other side stronger, more determined, but more importantly, i had wisdom. and i had the gray hairs to prove it, that i had actually been through the fire and come out okay. >> where did those gray hairs go? how did you get yourself, though, to have sort of the stamina, the ambition, to do it all again after you failed?

>> well, you know, for me, it was the fact that i had done it once. phil the fire was a multimillion dollar operation, though they crashed, i knew that if i did it once, i could do it again. but more importantly, if i did it the second time, i would do it surrounding myself with the right people. not trying to do everything, i'm a better owner. i'm a better manager. i'm a better person after having gone through all of that. and it's just an amazing process, when you don't run away from failure but you run into it and you come out stronger. >> one of the things, you see a lot of serial entrepreneurs. almost every really successful entrepreneur out there has had some failure. but how do you know if you are that person, and that you're not just not good at the job? >> i'm a big believer in reading business biographies, and for that reason, the vast thing about a magazine profile, or a short news report is that you often don't get the story of the road that the entrepreneur has to travel to become this great success today. and every single case, they had what other people would consider

a failure but they just kept going. i always tell people the difference between a winner and a loser, winners just keep going. >> all right. thanks so much for this advice, you guys. and phil, good luck with your restaurant. >> thank you so much. >> thank you. >> he opened his first clothing store in upstate new york at the age of 18. but by the time he was 23, he was already bankrupt. today, designer and manufacturer tommy hilfiger runs the tommy hilfiger group. it is a $4.6 billion people yum lifestyle brand that's available worldwide. we sat down to talk to this entrepreneur about putting your business first, staying one step ahead, and always telling the truth in this "learning from the pros." ♪ >> i would say that the bankruptcy when i was 23 years old taught me a tremendous lesson, and it taught me to

really watch the business end of the business. because, being a creative person, having all these dreams and all these ideas, is all well and good. but if you don't have that business acumen, and if you don't know how to balance the creative with the business, you end up with nothing. ♪ step by step oh, baby ♪ >> i think you have to realize that a brand is very much alive. and it's almost like a child, you have to nurture it, and you have to protect it. you have to continually ask yourself what the next step is. what the next material is. what the next color is. so for us to stay a step ahead of our customers, it is the very best idea. if you're a step behind, you fall off the cliff. if you're way too far ahead, they don't get it. and you're in trouble. ♪ no no no nothing >> any successful person is going to be under the microscope.

and are going to, at some point, feel the heat on something. i think the best way to combat that is to be totally honest. absolutely honest. if you make mistake, say, you know, i made a mistake. i'm moving on. and i learn from it. i apologize. or, if someone is accusing you of something that's not true, you absolutely have to hold up your hand and say, you know something, this is absolutely untrue. it's completely untrue and unfounded. and they're accusing us of having poor quality in the clothing. show it to us. if there's something wrong, we will exchange it. we'll give you something new, or we will improve it or correct it. but denial, i think, is not an option with me. ♪ don't stop thinking about tomorrow ♪ >> i think the minute you restaurant on your laurels, or you become satisfied with your success, you become somewhat complacent, maybe arrogant, maybe too comfortable.

we have a philosophy in the company, and the philosophy is that every season has to be better than last. you know, we read a survey where we're number one in a certain category and a certain country, or, you know, we're number two in designer names in america, or something like that. and i never take those things seriously, because i think that, okay, that was written yesterday. you have to think about of tomorrow. and the minute you stop thinking about tomorrow, you lose. don't forget about the past. but think about tomorrow. ♪ don't stop thinking about tomorrow ♪ >> still ahead, we'll answer some of your business questions, including one about how to avoid going into business with someone who may not have your best interests in mind. and what can celebrities like natalie portman teach small business owners? we'll share some of their best practices coming up. sam: i'm sam chernin. owner of sammy's fish box.

i opened the first sammy's back in 1966. my employees are like family. and, i want people that work for me to feel that they're sharing in my success. we purchase as much as we can on the american express open gold card. so we can accumulate as many points as possible. i pass on these points to my employees to go on trips with their families. when my employees are happy, my customers are happy. vo: earn points for the things you're already buying. call 1-800-now-open to find out how the gold card can serve your business. our fascination with celebrities can teach us a lot about what to do, and then what not to do when it comes to branding. one thing is definitely for

sure, the a-list truly knows how to rise above a crowded market and grow their fan base. that's why our guest says if you want to learn the secrets to successful marketing, you should gaze at the stars. jennifer hill is a venture attorney at gunderson detmer where she represents emerging growth companies. >> great to be here. thank you. >> you gave me a list of celebrities and what we can learn from them. and since i was in junior high school in the heyday which never ended we're going to start with madonna. my favorite. >> you have to reinvent yourself as an entrepreneur. that doesn't mean completely redoing your entire business all the time. but it means taking your core product and making sure you're always adapting to the market. and madonna does this incredibly well. from the time she was in her early 20s until now, when she's past 50, she's still on the pulse of music. she finds new ways to preinvent her sound, but making sure she's adapting to trends. entrepreneurs need to do that. the market's going to pass you. >> especially now, i find,

because of technology, you have to pay attention to what's going on in the outside world and how your customers are changing. >> absolutely. >> moving on to the next one, natalie portman and christy turlington? >> be a brand ambassador for your passion. both of them are very passionate about well-being and yoga and the environment. natalie portman was a vegan for quite some time, and so a spanish shoe manufacturer developed a line of vegan shoes. she found that she couldn't find red carpet ready styles that didn't use leather. so she and this company teamed up to display her passions through this really cool brand of shoes. >> what do you mean, as a business you should find a cause that you care about or are you talking about your own cause for your business? >> your own cause for your business. for example christy turlington, we all know her as a supermodel. but she's an incredibly passionate yogi. she wanted to funnel that passion into a new clothing line, into a book, into a whole lifestyle brand that focuses on well-being. that's what a lot of successful entrepreneurs do. they find their product because it grows from their passion. it's something that they know

well and they're inspired by. celebrities may have a leg up in the sense that people know who they are, but if the product isn't good and resonating with the market, still not going to go. >> there are a lot of celebrity failed businesses out there. it's not everything. then justin bieber. he certainly is a model for success. >> he is. create your own fan base. look at what he did on youtube. his mother put a video of him on youtube and he got this great fan base and suddenly usher comes calling. not everybody is going to be literally plucked into stardom. using social media, facebook and twitter, you can create a lot of interest for your product and for yourself. one of the pieces of advice that i give to entrepreneurs is share the wealth of your information back. whether it's on a blog or commenting on other ones, be helpful to people that write to you. talk about what you know but do it in a way that gives back and soon you'll find that you have a lot of people following you and demonstrating interest in you and your product. >> there are a lot of examples out there of small companies that just did a really good job with social media and worth of mouth. you know, as justin bieber did. and then became really successful. >> absolutely. >> and then finally lady gaga.

>> adapt, unflappable confidence. lady gaga has many things that to be written about. she's actually a case study in a lot of different leadership journals now. the one thing that you see about her in every situation is she is always on. she's fundamentally and truly believes in herself and that confidence emanates, it radiates from her in everything that she does. that's one of the reasons why people are so willing to follow her. aside from her music. but it's such an important trend for entrepreneurs. >> what do you do if you don't actually have it? >> fake it till you make it. >> yeah? >> absolutely. if you don't believe in you and you're not projecting people should believe in you, then others aren't. you have to be confident all the time. >> just as important to your customers, too, your employees. >> absolutely. >> all right. okay, well we've learned a lot today from the stars. thanks so much, jen. >> thank you. >> the economy may be down, but staff morale doesn't have to follow. here now are five tips on how to keep employees happy during tough times, courtesy of inc.com. say thank you. recognize the hard work

employees do with a simple thanks now and then can go a long way. offer inexpensive rewards. you might not be able to offer year-end bonuses. but try showing your appreciation with a restaurant gift card or movie tickets. provide gym memberships. beyond showing you care about your employees, it can also pay off in boosted productivity by a healthier, more energetic team. seek input. employees will feel like they have a stronger stake in your company when you include them in efforts to improve their work place. it's harder for workers to leave a business they've helped build. and finally, pay for classes. by helping your employees pursue their interests, and build on areas that make them feel better about themselves, you'll have happier workers. >> it's time you will have a better workplace. and jen and alfred are with us once again. the first one is about trusting a business contact. >> in dating we can see the red

flags all the time but in business relationships how do we look for the red flags to begin to ascertain if somebody is wanting to take our business for a ride. >> speaking to somebody who has made a lot of dating mistakes, the best thing is to talk to a people who know them and people who have aub served their business behaviors and how they act in relationships, and that will give you plenty of indication how you might interact with them. >> not just the references they give you. >> absolutely not. no. >> you have to dig deeper than that. >> and it starts with your instinct. you can sometimes know to pull back. it becomes work. if it's easy then it's working

and if it's work to make any forward progress, it's probably not the right relationship and you should back off. >> when you are talking to somebody, you know how they are going to react later. negotiations can get sticky, but as long as somebody is fair you get a sense of how they will be later on. >> you can't want it more than they do. if you want it more than they do, you are in trouble. >> sometimes you cannot help it, though. >> you have to hold back. >> people who renl stir on our site can save favorites and etc., and in doing so they have contact information. how do i recruit them without being a best? i've resorted to e-mailing them but i would like to capture more clients. >> well, really good useful e-mail, e news letters that has

good information, so they get something in their mailbox that is not a sales pitch but a service, and that will turn the tide if you want to use e-mail addresses. >> education does play into part of building credibility and trust. and they might be mulling over the idea at that time, but if you are continually contacting them in ways that you feel like you are educating them, and not through an e-mail letter or through cocktail parties where they see you face-to-face and get to know you who you are as a person without feeling like they are trying to take something from them or get something from them, then when they come to the moment they are ready to make the decision, you will be the first one they go to. >> it's a lot of work. you have to get them interested, and then -- >> you have to make it their idea to come to you.

>> this is from lauren who wroelt how do i know if i have a good accountant? good question. if you are not a numbers person, how do you know? >> if you are not a numbers person, it's crucial to have an accountant. you need to make sure that your accountant is small business specific, and they understand what the small business owners obstacles are and what they can write off, and giving guidance to the small business and guide what they are making and give an understanding of what the next year or three years should look like, and then you have the right accountant. they have to understand how to grow a business. >> you are looking are at different kinds of expertise,

and small business tax planning, not general tax planning, and they need to be connected and can help you to get other businesses, and then their personal taxes. >> yeah, we ask for referrals all the time. >> too many people make a mistake to get a numbers cruncher. >> and then ricardo wrote how do i come up with a formula to price my gas, vehicle and insurance costs? >> out to a good start to figure out what the expenses are, and then see what the competitor is, what they are charging. chances are, they are not off too far from the ballpark in what they are charging.

if you undercut them you are not going to make a profit, and if you over price, then they have an argument that they are the low cost competitor. that's a piece of research you need to do. what are the competitors doing. >> do you want to be the higher cash yea, or lower costs. that relates back to the service and what your equity brand looks like. sometimes they want to send the message they are the best and highest cashe in the industry. >> yeah, we did an interesting piece on this talking to some hot air balloon valleys in napa valley, and talking about how do you price yourself against your competitors. >> the price, the value you are off ying and the value of the service have to match. if those things are not in line,

it won't work. >> thank you for all the advice. very helpful. if any of you out there have a question for our experts, go to the website, the address is open forum.com/yourbusiness. openforum.com/yourbusiness, or you can e-mail your comments at yourbusiness@msnbc.com. now let's get some great ideas from small business owners just like you. >> the first business plan you write is not the business you will end up in, and it's very important given the economy right now to be flexible and to look for opportunities outside of your core concept. my business today is not what it was 12 years ago, and it's growing in part to my staying

open to opportunities that the economy has presented. find like-minded people that are in business. some can be people that have been in business or startups like me, and be around as many people that you can that run businesses successfully. >> know your product, and believe in it and believe in yourself and go with your natural instinct. if your goal is to help people, if your goal is to make streams of income, whatever your why is that you come into business, you stick with it. are you starting to lose track of your business listings posted on the web? if so check out the site of the week. you put control of your

listings. you can correct your listings. to learn more about today's show, click on our website, openforum.com/yourbusiness. don't forget to become a fan of the show on facebook. we love getting your feedback. and follow us on twitter. and listen to this one asked to make a sacrifice. >> i paid for everybody and not myself and then it reached a point where i needed more support. >> we will tell you why some workers agreed to work for free.

until then, i am j.j. ramberg, and remember, we make your business our business. shazi: seven years ago, i had this idea. to make baby food the way moms would. happybaby strives to make the best organic baby food. in a business like ours, personal connections are so important. we use our american express open gold card to further those connections. last year we took dozens of trips using membership rewards points to meet with farmers that grow our sweet potatoes and merchants that sell our product. vo: get the card built for business spending. call 1-800-now-open to find out how the gold card can serve your business.