The sunk cost fallacy is the nearly automatic psychology that causes you to stick with losing bets rather than jump ship. A strategy to combat this fallacy — mentally focusing on the potential gains of cutting and running rather than the losses — was outlined last week in The Atlantic. Persistence, an important quality in entrepreneurs, can also be amplified by self-justification or normative pressures to stick with in-progress endeavors, according to researchers at Oregon State and Utah State universities. They surveyed 135 (mostly male, middle-aged) high-tech entrepreneurs in the U.S. and found that the entrepreneurs don’t always pursue decisions that would maximize utility if it requires giving up a current business venture.

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Like mere mortals, entrepreneurs are also motivated in their decision-making to maximize potential financial and non-financial benefits (value) given the likelihood of achieving those benefits (expectancy). Entrepreneurs also have a host of other factors to consider, like their past startup experience, the size of their current business, potential psychological, social, and financial switching costs, and whether starting a new business meshes with their personal principles of autonomy and risk-averseness, for example. When it comes to leaving their current business and starting a new one, however, it turns out that the way expectancy and value play into the decision isn’t straightforward.

Here’s how the survey worked, in the researchers’ own words:

“The participants were asked to rate the likelihood that they would pursue a series of hypothetical entrepreneurial opportunities. Each hypothetical opportunity was presented as a comparison with the participant’s current business across four criteria: value of financial returns, likelihood of finan­cial returns, value of non-financial benefits, and the likelihood of non-financial benefits”

To test the effects of expectancy and value on entrepreneurs’ persistence with their existing business, the researchers set different prior conditions: in some cases the entrepreneurs would have the resources to continue with their current business as well as start a new one, while in others they had to choose between staying with the old business or launching a new one. These two conditions resulted in unexpected behaviors.

If the potential value of the current business was higher than that of the alternative, or if probability of success was higher for the current than the alternative, entrepreneurs tended to discount potential highly successful or financially rewarding outcomes associated with the hypothetical new business venture. That is, expectancy and value weren’t simply additive factors that predicted whether entrepreneurs would spring for a new business opportunity.

There are a number of factors that could be at play here beyond just money. The researchers also looked at the size of the company (entrepreneurs were more likely to leave bigger firms) and past startup experience, which could help entrepreneurs better evaluate the market (over 80 percent of those surveyed had previous startups under their belt). Uncertainty (as opposed to risk) may also play a role, with entrepreneurs opting to stick with their existing venture where some amount of uncertainty may already have been eliminated.

Of course, an online survey is no match for the real world, where entrepreneurs would have much more information and time to guide their business decisions. But if entrepreneurs can self-diagnose and recognize tendencies for overconfidence, counterfactual thinking, and a drive to avoid uncertainty, they can potentially maximize their returns and generate some kickass businesses in the process.

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According to GE’s annual Innovation Barometer , it looks like that’s what they want. The report, which surveyed 3,000 C-suite executives in 25 countries and took their temperature on a range of issues affecting innovation and competition, found that business leaders highlighted education as one of their top policy concerns.

When asked about the most pressing priorities for governments to support innovation, they ranked improving education just above fighting bureaucracy and protecting IP. In particular, they indicated that schools should encourage more entrepreneurial cultures through partnerships with business savvy individuals and develop curricula that better prepares students for future jobs.

The survey also indicated that, globally, executives’ confidence in education systems had fallen an average of six points over last year, although the confidence of U.S. executives increased.

The report comes on the heels of a number of interesting U.S.-based efforts by business leaders, particularly those in technology, to support education. Microsoft backs the Philadelphia School of the Future and works with high school students in Seattle to teach them computer science.  Schools in Newark got a $100-million gift from Facebook CEO Mark Zuckerberg a few years ago. And, in New York, two new tech-focused schools launched this academic year supported by big business and local venture capitalists. The Academy for Software Engineering, for example, opened with the support of Union Square Venture’s Fred Wilson, as well as other local and industry leaders. And IBM jointly created the Pathways in Technology Early College High School (P-Tech), a six-year computer-science related high school that offers graduates the chance to apply for IBM jobs.

Corporate-sponsored education has its critics, who worry that students will get too steeped in the culture of business or won’t get pushed enough in critical thinking. Education observers also point out that past attempts haven’t always been successful — after launching in the early 1990s, New York’s Metropolitan Corporate Academy was eventually shut down after support from Goldman Sachs waned. But as the economy shifts and the demand for new skills rises, it’s important that business leaders step up to support the schools in their communities, as long as educators can keep their interests in check.

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Earlier this week Nielsen released a study that found just about a third of smartphone users turn to their device for shopping-related activities. The study, conducted during the third quarter of 2011, gives a good picture of how we’re using smartphones in stores. One thing the study highlights is that while not everyone is using their phone in this way, many more would like to.

Below I’ve combined Nielsen’s results with a primer on how you can get in on the trend of being a savvy shopper with your iPhone specifically using apps that are available in Apple’s Apple Store.

38 percent are comparison pricing aka “showrooming”

Nielsen found that 38 percent of survey respondents use their smartphone for comparison shopping while in a physical store. This is encouraged by online retailers, and last holiday season Amazon gave a 5 percent discount on certain products to users who scanned retail items using the Amazon app. Big box stores like Target are annoyed by this new trend, however — so much so that they are asking manufacturers to modify their product offerings to prevent comparison shopping.

As a consumer, I love the ability to find the best price for an item so long as I am willing to wait for it to ship. As a small business owner who works with other small businesses, I see this as driving revenue away from our local communities and hurting the local tax base. I try to shop local when possible, but to me, I see a big box “brick and mortar” and an online retailer as synonymous. When the bargain is good enough, it’s hard to resist.
If you want to get in the middle of this war between physical and online retailers, some of the top apps for comparison shopping are RedLaser, ShopSavvy, Google Shopper and Amazon’s Price Check. Both Red Laser and ShopSavvy also allow you to find an item locally, but ShopSavvy and Google Shopper provide reviews — which are the next most popular shopping-related activity we do with our phones. If you search online, you might want to stay away from the in-store Wi-Fi as it can show different prices since you could be redirected to an “internal” version of the website with slightly different pricing or be blocked entirely from a competitor. Use your 3G signal to play it safe and make sure your surfing isn’t being intercepted.

32 percent are reading online reviews of products

For more in-depth research, I found the Consumer Reports App lacking, and I prefer to access their website, which requires a separate paid subscription from the magazine (a discount is given to current print subscribers). Many of us like to know what the crowd thinks of a product rather than trusting a salesperson (after all, it’s in the job title to sell us something). Mobile phones are ideal for this, and 32 percent of us use our phones for product review research. Google Shopper and Amazon’s Mobile App make it easy to find what others have to say about millions of products. Amazon carries practically everything, so it’s the place I start for online reviews.

24 percent are searching for and using online coupons

We all want to save money, so why not use your iPhone? The king of coupons is Grocery iQ, owned by Coupons.com. If you regularly shop at a grocery store or other retailer, be sure to install their app as they often offer coupons or special sales directly via their app. Don’t assume coupons are just for the big retailers. Individual stores often have their own apps featuring coupons. Even groups like AAA offer discounts.

A hidden place for coupons and direct savings is check-ins via foursquare or Facebook. In particular, American Express has a program in which you check in via FourSquare to both small businesses and national chains to receive a discount. I use this quite often and can tell you it works. I get free cupcakes at my locally owned Cupcake Construction Company as well as national retailers like Whole Foods. If available in your area and where you shop, Shopkick is a great way to earn rewards and discounts.

22 percent are purchasing products

Whether it’s because the store is out of stock or the pricing is better online, shopping on your phone is fun and easy. It gives you instant gratification. A friend suggests a book to you at the coffee shop, you buy it right then and there. Your spouse tells you that the water filter needs replacing while you are waiting for a table at the restaurant. Bam. Problem solved. But considering this usefulness, this number is still rather low — 0nly 22 percent of the people who are using phones for shopping are actually making purchases.

What’s interesting to note is how this behavior changes when we’re talking about shopping on a tablet. Tablet shoppers are three times more likely to purchase an item compared to smartphone users, and they spend more, according to a recent study by Adobe.

A caution while shopping via a mobile device: because public Wi-Fi is unprotected, I use 3G while making purchases so nothing is intercepted. I’m also careful of prying eyes when pulling out my credit card. Read my article about how to keep your credit card number hidden in plain sight in your address book so you can cut and paste, keeping your card in the wallet.

To get an additional savings boost, use sites like dealnews.com and FatWallet to find discount codes and earn cash back for your online purchases.

18 percent are using location-based services to find a retail location

“Yes, we have no bananas” is a fun song, but a lousy thing for a clerk to say when you need bananas. Instead, by using Google Shopper or one of the other purchasing apps mentioned at the beginning of the article, you might be able to find the product locally or find other retailers that have it.

9 percent are paying via smartphone — but 71 percent are interested in paying via smartphone

Talk about a missed opportunity, in particular for the brick-and-mortars losing out to online retailers. NFC (near-field communications) has been discussed for a while for the iPhone, and Ryan Kim believes Apple could take the lead on this in the U.S. Meanwhile, Kevin Tofel is already using his Google Wallet and his Galaxy Nexus.

The closest thing we have currently to NFC on the iPhone is the Square Card Case, which merchants can use for seamless transactions via an app. I tried it out this weekend in St. Louis, and it really was a blast to say “put it on my tab!” The app uses your GPS location and the location of the merchant, and when you are close enough, it notifies the merchant of your presence. The only caveat is that the merchant must use Square’s popular credit card processing system.

So while we’re making progress in what kinds of activities we’ll do with our phones, we’re still a ways off from mainstream acceptance of the phone as a shopping tool and a payment tool. When you think about it, it’s odd that we fancy up our phones with fun cases and apps, but then we use our credit card the same way we always have since the 1950s. The Square experience comes close to modernizing this process — every merchant I know who uses Square, including myself, sees the giggles of glee and fascination when customers sign with their finger and have a receipt texted to them.

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The “Occupy 99Designs” design contest, which launched Wednesday and will run until February 8, has garnered nearly 400 entries in its first few hours online. The winner will get $1,000 and, most importantly, a ton of exposure. According to the contest page: “This logo will live on occupy.com and @occupy on twitter. It will go on billboards, on TV, in magazines, on sidewalks, street walls, T-shirts, hats, postcards, on everything you can imagine — all over the world.”

Here’s more about what Occupy is looking for:

“We are challenging designers to think beyond the iconic Clenched Fist and create a new iconic symbol for resistance, solidarity and empowerment in the 21st century. It should appeal to a broad base and reflect the diversity of the 99%, while encompassing the values of the Occupy Movement – among them, integrity, justice, freedom, equality, compassion, community and true democracy.”

The Occupy.com logo contest on 99Designs (click to enlarge)

It may seem a bit funny that a movement that seems to be against all things corporate is looking for branding of its own. But in a way, it actually makes a lot of sense: There’s something to be said for fighting fire with fire, and having a more polished image would be a big step toward legitimacy for a movement that has been criticized for not having a unified message. And turning to a crowdsourced design site like 99Designs is more in keeping with Occupy’s message of being by and for the people than, say, commissioning a fancy custom design firm.

It makes me think of how in the Autobiography of Malcolm X published in 1968, the iconic activist wrote about why he dressed in tailored suits and ties: “In order to get something, you had to look like you already had something.” It looks like nearly 50 years later, the Occupy movement is trying to do the same thing in a modern way — on the web.

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With Apple’s more than 15 million iPads shipped during the quarter, the worldwide PC market grew 16 percent year over year. Not counting tablets, of which the iPad is easily the most successful, the PC market actually shrank by 0.4 percent worldwide when compared to the same period a year ago, according to the Canalys data.

Apple’s success both with the iPad and its Mac computers allowed it to take top honors for the quarter, knocking HP to second place overall. Canalys says the lack of a valid HP tablet competitor, now that the TouchPad is shelved, will mean that HP will continue to struggle against Apple’s success.

The iPad wasn’t the only tablet to do well during the quarter, however. Canalys says that the Amazon Kindle Fire and Nook Tablet also helped contribute to the success of tablets in the U.S. Amazon ranked as the second strongest tablet manufacturer worldwide, while Barnes & Noble took the fourth place spot.

All told, iPads accounted for 22 percent of all worldwide PC shipments in the fourth quarter of 2011, as measured by Canalys. It’ll be interesting to see what effect a new iPad launch in the coming months might have on the worldwide momentum of tablets, and the larger PC industry.

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But who has time for that? This is a social media world. We’re live in 140-character sound bites. So I decided to ping my favorite CEOs via Twitter to see what kind of wisdom they could drop on me. Here’s the great advice they shared.

Daniel Ek, CEO, Spotify

Figure out what the top five most important stuff is, focus relentlessly on that and keep iterating. Less is more.

Dennis Crowley, CEO, FourSquare

Don’t let people tell you your ideas won’t work. If you have a hunch that something will work, go build it. Ignore the haters.

Sarah Prevette, Founder, Sprouter

Just do it. Get it out there, absorb the feedback, adjust accordingly, hustle like hell, persevere and never lose your swagger.

Sarah Lacy, CEO, PandoDaily

Follow your gut. it may be wrong, but you won’t regret it if you fail. You’ll regret it if you ignore your gut and fail.

Craig Newmark, Founder, Craigslist

Treat people like you want to be treated. Apply to customer service.

Gary Vaynerchuk, CEO, VaynerMedia

Do work for your customers, not for press or VCs. The end user is what matters long term.

Matt Mullenweg, CEO, Automattic

Only reinvent the wheels you need to get rolling.

Jason Goldberg, CEO, Fab.com

Pick one thing and do that one thing — and only that one thing — better than anyone else ever could.

 Alexis Ohanian, CEO, Reddit

Make something people want. Then give more damns than anyone else about it and you’ll make something they love.

Chris Brogan, President, Human Business Works

Buy @ericries’s book. Beyond that? Build a platform. This is the big year.

Matt Howard, CEO, ZoomSafer

Startup wisdom: The number one job of a CEO is to not run out of money.

Brian Wong, CEO, Kiip

Always be learning from others. Whenever you meet someone, you don’t want something from them, you want to learn from them.

Seth Priebatsch, Chief Ninja, SCVNGR and LevelUp

Something my dad taught me: Ask forgiveness, not permission!

Hooman Radfar, Founder, Clearspring

Give away the wins, own the loses. Your job is to curate greatness.

Alexa Hirschfeld, CEO, Paperless Post

Users and employees are key predictive indicators of a company’s success; press and investors generally months behind.

Got some other great wisdom for your fellow CEOs? Leave me a comment!

Peter Corbett (@corbett3000) is the CEO of the creative agency iStrategyLabs, and is the founding organizer of DC Tech Meetup.

Image courtesy of Flickr user Search Engine People Blog.

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Screenshot of Causecast for Employees (click to enlarge)

That’s where a new software platform built by Los Angeles-based startup Causecastcomes in. This week Causecast debuted its Employee Impact Platform, a web-based program that connects companies and their employees with non-profits and charitable causes. With Causecast, employers can select a group of causes to which they’ll provide matching donations to whatever employees give. The platform can also be used to organize company-wide volunteering events. Non-profits plug into Causecast for free, and companies are generally charged a flat rate of around $5 per user per month.

Causecast founder Ryan Scott walked me through a demo of the new platform. To me, the best part to me is how easy Causecast makes it to spend extra-curricular time with your co-workers doing something other than going out for happy hour drinks. Non-profits of course will benefit from more companies donating time and money to their causes — but according to Scott, companies benefit a lot as well. He put it like this:

“Employees who aren’t engaged with their jobs aren’t as productive. And it sounds counter-intuitive, but you often have to leave the office to become more engaged with your work, and with your co-workers. Volunteering is a really great way to get everyone together outside of the office to do something bigger than themselves.”

Causecast, which was founded in 2007, currently has 30 employees. Thus far, Causecast has been self-funded by Scott, who first became known in the late 1990s for co-founding NetCreations, where he created and patented the “double opt-in” process that propelled the email marketing industry. After selling NetCreations in an all-cash deal in 2001, Scott said, he decided to find a way to merge his desire to do some good in the world while still staying active in business.

When Causecast first launched, it was an online platform to let all people contribute to charitable causes touted by celebrities and brands. The shift into the enterprise space is a smart one, as small businesses are becoming increasingly important parts of the employment landscape and the general public is calling more and more for corporations to behave responsibly. With Causecast, small businesses can compete with larger, more established companies when it comes to offering their employees ways to give back. It’ll be interesting to see how the new iteration of Causecast takes off in the months ahead.

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