how flight car is turning the rental car industry on its head, that's coming up next on "your business."

hi there, everyone, i'm j.j. ramberg and welcome to "your business" the show dedicated to giving you tips and advice to help your small business grow. this happens all of the time. someone has a great idea, turns it into a company, and then nobody is interested. well, the founders of flight car wanted to minimize their risk. they had what some would consider a crazy idea that rethinks the entire way the rental car industry works. and so, before spending too much time or too much money. they launched their company with the bare minimum to see what people would think. >> just four hours after they launched their company, the founders of flight car received a cease and desist order from the san francisco airport. >> it wasn't even frightening,

it was like this blows because we just launched and now we had to change the model. >> sri is part of the three-person launch team of flight car. he and his partners are disrupting the rental car industry. basically, they took a look at how things currently work and thought -- there's got to be a better way. >> there are two parking garages at the airport. one where people are paying a lot of money to park their cars and another where people are paying a lot of money to rent cars from. it doesn't make sense right now. there's a lot of inefficiency in that system. >> these three 18-year-olds put off college telling harvard, m.i.t. and princeton, they were going to be busy for the next year and set off to change an industry. here's how flight car works. instead of dropping your car off at long-term parking. you drop it off with them for free. while you're gone, they'll rent your car out to someone else, charging less money than companies like hertz and avis and they'll give you a percentage of the fee.

it's definitely a new way of thinking, part of what's been dubbed the sharing economy and the way they launched their company is modern as well. instead of waiting until everything was perfect. they launched with as little in place as possible. with what's called a minimum viable product or m.v.p. >> if i'm going to do this, what do i need? i need to have some people you know who can help with the transactions, i need to have the insurance squared away and you know, preferably a parking lot. it doesn't have to happen. >> they launched their company with no official place to park the cars they were collecting. in the beginning, they would meet their clients right at short-term parking on airport property. which is why they got that cease and desist order from sfo. >> so you knew something like that was going to happen. why not skip that part and launch once you launched in a place where you knew you wouldn't get the cease and desist order.

>> well then we would be launching like today and tomorrow and we would have given up a lot of traction and time. >> the idea behind their strategy was to launch fast and lean. no employees, low overhead, their one required large expense was insurance and few systems perfectly in order. just get the idea out there and see how people react. >> imagine if flight car didn't work. then we would have spent three more months setting everything up. we would have had done things like get land together. it gets very expensive and time consuming, we would have spent all that time working on something that we could have tested very easily and ended up not working. >> as it turns out, flight car is working. but it's already been through a few iterations in its still very young life. now they have their own parking lot. but before that, they changed their dropoff point multiple times. >> how did you get people to trust you when you're not even

telling them a place to come until they call you? >> it's talking to the customer and like just being honest about we're trying this concept and they understand. >> that culture of understanding is one of the key reasons the flight car team decided to launch the company in san francisco. jim newton was one of their first customers and he explains it best. >> in silicon valley there's this mindset to be much more accepting to start-ups and give them a little slack. >> but even jim, who simply tried out flight car because he thought it sounded like a neat idea, had a moment of hesitation the second time he signed up to drop off his car and they told him to meet them somewhere new. >> it was like, well, i'm supposed to go where? you know. and i'm supposed to meet a guy? it was like, late, too. it was like -- it was like mid knight or something like that. and it was like okay, let's see how this goes. >> there is a lot of people who might think this is crazy. your first interaction with your

customer is your most interaction with a customer. for them to see something that isn't perfect? might hurt you down the road. >> that's why i think it's been important for us to meet the customers. you know when you tell them, meet them, you're the founder, you give them the car, they completely get it. >> and regardless of what was happening behind the scenes. the founders were adamant about providing a good experience. because for their customers, that's the only thing that counts. >> what's great about the start of a business is that there are so few customers that you can provide really, really good customer service. >> excellent. >> it was easy, they knew who i was. they picked me up. >> since they launched their mvp, things have changed at flight car. now they have their own parking lot. employees and systems in place. and it's replicable, they opened another one in boston. i asked if they used the mvp philosophy there as well and they told me, luckily they didn't have to. >> hopefully not. it's going to be crazy, if we

have to do this again and again, i feel like we'll age like presidents. i think that we've locked down a good model. i find this idea of the minimum viable product fascinating and it's the way we launch things in my company. so how can you pull it off? and doesn't it make sense for every business? let's turn to this week's board of directors. alfred edmund is the senior vice president and multimedia editor at "large" at black enterprise and sin barnes is a partner at first capital and blogs at sneakerheadpc.com. great to see both of you guys. i found out about this company actually from a colleague of yours. and i thought it was such a good story. this idea of the mvp, minimum viable product turns on its head the way people used to do business before. >> that's right, that's right. >> we met these guys and many of the entrepreneurs we meet, one

thing we love is this idea of build, break, learn and do that as many times as you can, as fast as you can. turn those feedback loops into shorter and shorter loops. and really be able to grow your business with as few dollars as possible. and ultimately that will lead to a strong foundation and to the biggest business that you're capable of building. >> we do this in my company, as i just said, but alfred, it pains me to put stuff out there that's not perfect. we do it because we build, break, learn, get it out there, get feedback. when i get it sometimes i think i want to tweak that and it's a little heartbreaking even though i know it's the right thing to do. >> you're not the person, even though you're making it, that's going to decide whether it's perfect or not. the final judge is still going to be the marketplace and the consumer. you can fool yourself into thinking, it's not right, it's not right. but you don't really know until you put it out there. so it's really better, especially the way things move so quickly to get it out there and see what the customer thinks. >> i put stuff out there and i thought pile going to hate this

and it turns out to be the thing that they love. >> we put things out there that we thought were perfect and they say, he hate it, i don't want it. >> as long as you have a way to find out why they hate it or love it. and the product that you go to the mass market with and you reach the most consumers with, will be perfect in their eyes. >> the minimum viable product. how do you figure out what that is. >> the way i think about that, as an entrepreneur you want to maximize learning per dollar. you should do that with every experiment you run, with every decision you make, you should think about the dollars you put to work against this experiment and how much you're going to learn from that experiment. you should optimize learning per dollar. so minimum viable product sometimes that's something on paper and interviewing a customer and other times you have to actually write some code and put something out on a website or with the case of flight car, they needed to figure out how to get some cars in a lot and have people come and rent them. >> they started a place where

someone is going to give them their car and they had no parking lot. literally, one day they said, drop it off here and the next day they said, just call us on your way here and we'll tell you where to drop it off. >> they not only started the market in place where people were willing to take the risk, but there was a reward factor to the risk. i can pay less money and have my car sit in a lot and maybe get paid for the process? >> i loved meeting these guys. i'm excited to see how the company does it and for you guys, i hope they do very well. this is a whole new way of thinking flight car. if we think back on old ways of marketing, old ways of thinking. a lot of them still work, too, i'm talking in particular about email marketing. which a lot of people may think is very old school, still very helpful. here are five ways to ignite your email list, growth without ending up in the spam folder, courtesy of mashable.com.

one, make it easy. don't just position the facebook and twitter icons prominently on your website, make sure the email invite option is also front and center. two, don't stop at just one. add more option forms throughout your site and in various placements. test these locations to find the combination that works best. >> three, collect emails at your stores. ask your customers for their information at your checkout counter or when requesting an email receipt. four, make it mobile. make sure your mobile site also asks visitors for their email. don't ask users to fill out lots of forms, keep it short and simple. >> and five, consider implementing social sign-on. users can sign into your website using their log-in information from facebook or twitter instead of having to create a separate log-in account. >> a couple of weeks ago, i went back to stanford business school for my 15th reunion. things are quite different than when i went there.

while a lot of us are entrepreneurial, now there's a whole venture lab dedicated just to on-campus start-ups. technology has changed everything. making it much easier to start a small company. i took advantage of being on campus to chat with a bunch of professors and ask them what would i learn if i were sitting in that seat in your class today, instead of 15 years ago. garth stallone was my strategy professor back then. today he's dean the entire school. i asked him about how running a small business has changed in the last decade. >> i think innovation is in the air even more than it was 15 years ago. >> take it out of a university setting for a second. i am a dry cleaner in cleveland, how important, is it important for me in the same way that you guys intermix with other departments. for that person to intermix with other businesses? >> i think it's very important for them to, to get new ideas and to have an infusion of ideas from businesses that look

unrelated but may have an idea that you can apply to your own business. he think just looking at your peers and being stuck in a particular paradigm can be very limiting. >> how do you foster an innovation, if you are not naturally innovative, how do you foster that kind of culture? >> within your organization, you have to embrace experimentation, that also means that you need to embrace failure. when you experiment, not everything goes well. so you need to have a culture where you try things, if they don't work, you celebrate those, in my teen we have a little celebration where every time we pronounce something we try dead, we clink on a little glass and we smile and we celebrate it. because we tried it. and you also have to be good at shutting down things that don't work and be honest about that so embracing failure a little bit paradoxically is a very significant part of success. >> how do you teach that? you have a bunch of very

ambitious students here who want to be very successful. have been successful enough to be admitted to this school so far. how do you teach them that failure is okay? we expose them to lots and lots of entrepreneurials, that's the way we do it. key have entrepreneurs coming to our classes, in all of our entrepreneurship class, the classes are written around people who started a business. and some of them are written fairly early on. you don't know if there are going to be successful. there are a lot of failures and what they will say, is i failed in that business, but if you look at my career, you know, i had in the baseball analogy, i struck out, i had a base hit and then eventually i had the home run. it's really about that kind of track record of your life. >> so you have about 11% of people here who graduate and go on to start something the next year and countless more years down the road. >> so what's one piece of advice you give to people as they're setting up to start something new? >> the way of starting a business has really changed. we encourage them to emphasize

customer empathy. it's about focusing on your customer and their needs. you know, in all days you would sit in your lab and event something you thought was a great idea and fully flesh it out and take it out to market and hope that it succeeded. and that's not really the philosophy in silicon valley any more. it's much more about talk to the customer, figure out what you think they want. build something in a very, very simple prototype and then rapidly innovate on the prototype. so -- >> ultimately it's all about the customer, not about what you -- >> you can think whatever you want, if this isn't satisfying a real customer need, if they're not resonating with your product and service, it's not going to succeed. >> i sat in your class 15 years ago, it was great to be there then and it's great to talk to you now. >> thank you, so much. >> how involved do you want your investors to be running your small business. and the head of the pennsylvania beer dynasty talks about the importance of growing flow

despite high demand in this week's learning from the pros. ♪ i' 'm a hard, hard ♪ worker every day. ♪ i' ♪ i'm a hard, hard worker and i'm working every day. ♪ ♪ i'm a hard, hard worker and i'm saving all my pay. ♪ ♪ if i ever get some money put away, ♪ ♪ i'm going to take it all out and celebrate. ♪ ♪ i'm a hard, hard worker... ♪ membership rallied millions of us on small business saturday to make shopping small, huge. this is what membership is. this is what membership does. when america's oldest

brewery opened its doors in 18 29 in pottsville, pennsylvania, it was the first step in turning yingling into a household name. now 184 years later, the company produces two million barrel as year at three facilities and it's still run by the ying ling family. the fifth-generation owner talks about a good product at an affordable price, remembering your backyard and the next generation in this learning from the pros. >> i think any small business has to really watch their cost. i've always watched costs here, from the time i was a kid. i was 15, 18 years old. i kind of did everything years ago. now we have plant managers and production managers and they're forever wanting more and more employees. and i tell them, you can't get too many more employees yet.

you have to run efficiently and do it with what you have. sometimes it works, sometimes it doesn't. >> all i know is if we can run a can line with five people, that's what we have on can line. you know we don't run as fast as the big breweries, they probably run 2,000, 2400 cans a minute. we run 890 cans a minute. we do it with five people. and that's for us, that's good, that's as good as i can do and you can't expect any better than that. your best. >> we have a capacity problem and how much beer we can really handle. we don't want to sell more than what we can make, because then you start running into product problems. and it's not necessary for this company to operate that way. we probably haven't grown fast enough, but you don't want a lot of unused capacity in your manufacturing facility. so we grow in accordance with opening new markets. years ago, we had an opportunity to go into new england markets

and just kind of throw our beer out there into any market that was willing to receive us. we pulled away from that as we started to grow in the pennsylvania market. we got good wholesalers, we grew into maryland, into new jersey, delaware and kind of grow in adjacent markets now. we build a brand, reputation for that brand. the consumer likes it, we move onto the next state where it's already known. >> remember our back yard. just remember where you came from. we just kept this company alive by not forgetting where we came from. they supported us here, no the just in our pottsville area, but harrisburg and philadelphia and we've sold beer in those markets for many, many years. i call us a local regional brewery. we depend so much on the local area that we wouldn't want to lose that. we certainly don't want to lose the support that we've gotten regionally.

it's your back yard. this is the oldest brewery in the united states. you can't sell the yuengling brewery to joe smith. you know, hope one of the family members is going to come in and take it over. next generation is jennifer and wendy. they have shown that will is a great interest on their part to learn and take over. i think they see some of the things that i do. sometimes they don't understand why but they are learning. and it is a learning experience for hem. they are getting to the age of pretty soon i'm getting to the age also and pretty soon they are going to be running this. >> it is time to take some of your business questions. the first one is about courting potential investors. >> we are considering investment. should we consider investors who have to be really involved in our business or consider

investors that trust us to handle it? >> what do you think, alfred? >> you know, there's smart and dumb money. smart money comes with advice, connections, mentorship, and if somebody is investing in your businesses chances are they know more about the industry than you do. so i would say that all things being equal, you want the person who has the interest in your business. >> the key, though, right is smart. because if someone has an interest in your business, and thinks they are smart, actually not helpful, then it is more of a hindrance than a help. >> you definitely want to look at is this a person that's invested in this industry for it, this person that is running business in that industry. here's who you want. not just somebody who i like your business. no. you want somebody who really is smart money. >> bring it back to something very familiar for any entrepreneur which is hiring. when you chose your co-founders, when you choose your first employees, you have a way that you look at what they are going to bring to the table and have a way to understand their skill set and to know how they are going to impact your business.

do the exact same things with investors. far too many entrepreneurs view themselves on the sell side of an investment partnership. and i think they should spend more time on the buy side evaluating the source of capital and will it add value. >> unlike hiring you cannot fire them. once they are invested they are there. >> here's what you don't want. someone you are beholden to you because they have your money but don't have the same goals as you. >> this is a question about targeting ing ing ing ing ini. i think this is interesting. she is trying to reach one particular type of person. it is a question about how do you reach a niche in general? >> the best thing to do is deeply understand your customer and walk in their shoes and really know the way they view the world and you have to figure out a way to deliver, something

had a shocks them. something that goes well beyond what they would have expected. so that they talk about it and want to come back and i think you are really delivering deep value for them. >> how do you figure that out, though? you want to reach these people and get in there. how do you figure out -- >> it is going the take research. can you not do this from 30,000 feet. i'm trying to reach urban entrepreneurs, business management services. that's a very, very broad description of what the customer and the service. what you want to narrow it down to is the services i provide now and i need to identify the types of businesses that need those services and demonstrated willing must to pay for them. that may be a very different person and person you had in mind when you thought urban. and the services they may want may be a different menu of services than what you initially were thinking they may want. you have to dig deeper. >> get out building and talk to them. >> absolute. >> i okay. finally, here is a question about incorporating your company. >> agree with me, any small

business should at least be an llc if not a c corp itself. any business netting $200,000 a year ago should be incorporated. >> would the panel guy? >> if you have $200,000 a year coming in, you should talk to a really good lawyer and figure out what is best for your specific situation. there are lots of corporate forms. really should talk to lawyer. >> i totally agree. i get nervous around words of always, any, these absolute terms. reality is you should have an attorney, have a tax pro on your side and should have a financial adviser to figure out what is best for your business. i think he is generally right and you need to tailor it to what is right to your business. >> quick question about that. what if you are developing an app. you don't know if it is going to turn into a business or not. you don't want to spend all this money. legal hiring lawyer, et cetera. do you med to turn it into a

business right away? do you wait and see if it is successful? >> get something out market and see what happens as a sole proprietor. you should have in mind sort of certain objective milestones that say at this scale i'm ready to talk to a lawyer. >> yes. great. a lot of good advice. and if any of you out there have a question for our experts all you have to do is go to our website. openforum.com/yourbusiness. submit a question for our panel. or you can send us an e-mail. yourbusiness@msnbc.com. you sent me a wheat the other day that i thought was so mice and inspiring i wanted to share it with the you had audience. you wrote fear of success is the fear of the unknown. too often we cling to failure because we are pam with it. what inspired to you write that? >> really my own life. i'm big into trying different things and not -- allowing the piers to stop me from doing and

it not worrying about failing because failure is fiction. failure is fiction. mistakes are myth. >> you will try new things. that tie. >> bow tie line. when i did bodybuilding. some people know. i was into bodybuilding. i like trying to test myself and really proving over and over again, nothing you can't do. you just have to decide what is it worth your time to do. >> if i twitter great resource for both inspiration. practical advice. we follow a lot of people and we want on just share with you some things people are say being small business. here's the latest. small business consultant and your business guests, are daily deals good for mall business? they can be. the decision to offer one must be carefully considered. our good friend carol roth who now has her own radio show tweets the one thing you need for successful delegation del set clear expectations. and "usa today" small business columnist rhonda abrams suggests stay ahead of the curve. identify problems before they occur and save your small biz from you wanted surprises.

we will continue to follow those people and you guys. share them with our audience. have you great advice today. now we would love to get great ideas from small business owners like you. >> we started our customer appreciation program that's called our fabulous 100 where ran at intervals and provide them with gifts and incentives. acts of kindness. this program has been so successful that group of customers more than doubled in sales customers. >> my tip top business owners is to take advantage, use excel to take control of your stock. buy expensive software. >> one thing we like to emphasize is that because of our small size we can constantly communicate with our entire staff. good way to do that is have a

friday lunch with your entire staff and bring everyone in. make sure you are open to sharing ideas. be surprised what you can learn about your own business talking to your employees. >> between your e-mail inbox and social networking sites it is hard to filter how what is for from the rest. if that's your problem like it is mine check out our app of the week. cloze help you pillter through the noise and get messages relative to you. it gives relationship scores to everyone you know based on when and how you communicate with those people. cloze will make sure your key people never get lost in the shuffle. interesting idea. it was great to see you. thank you so much for coming on and letting me pick your brains for the day. hope to see you soon. >> thanks. >> if any of you want to revisit some of today's segments you can see them online.

openforum.com/yourbusiness. you can follow us on twitter. please don't forget to become a fan of the show on facebook. next week, should it stay or should it go? how do you know when it is time to stop selling a product? >> if there is a thick coat of dust it is really not move. >> when it is down at the bottom shelf and all the way to the left or all the way to the right it is on its way out. >> we will find out when the time is right to give your not so best sellers the boot. remember, we make your business our business. ♪ i' 'm a hard, hard ♪ worker every day. ♪ i' ♪ i'm a hard, hard worker and i'm working every day. ♪ ♪ i'm a hard, hard worker and i'm saving all my pay. ♪ ♪ if i ever get some money put away, ♪ ♪ i'm going to take it all out and celebrate. ♪ ♪ i'm a hard, hard worker... ♪

membership rallied millions of us on small business saturday to make shopping small, huge. this is what membership is. this is what membership does. good morning from new york. i'm steve kornacki. 12 people are confirmed dead from thkd wes's storms. killing nine in oklahoma and three in missouri. in northern los angeles county, fire fighters are battling a raging fire that scorched 19,500 acres since thursday. now i'm joined by amanda terkel, senior political reporter and managing editor of the huff