Key to starting a social networking site

Dear Karen: I'm going to start a social networking site. What's my first step?

Answer: Successful social networks revolve around a compelling object or activity that is the basis for a real connection, said Aaron Levie, chief executive of, a website that combines social networking, content management and online file storage.

"Far too often, software and service providers think that the technology is what's most important. They forget how to design an environment that allows people to do what they need and want to do on their own," Levie said.

Make sure there's a compelling reason for people to return to your site. Will they share music, photos, videos or travel tips? "Pick something that resonates with the group of people that you want to engage, and make sure your social network makes that activity very, very easy to do," he said.


Legal trouble in your own photos

Dear Karen: I'm starting a greeting card business using my photos, some of which include clothing and accessories from toy companies. Do I face legal issues?

Answer: Yes, there may be issues concerning the items in your photos. "The design of some useful articles, including clothing, can in some instances be protected by copyright law. Such items often include graphical elements on them that are protected by copyright," said Mitchell Zimmerman, an intellectual property attorney with Fenwick & West in Mountain View, Calif.

Also, if using the clothing company's "trade dress" (labels, packaging or designs) might confuse customers about who is producing your cards, that could be considered an infringement. Consult with a lawyer who can determine whether the items are protected by copyright and whether you can depict them on your cards based on the "fair use" doctrine of copyright law.


Look at clients of recruitment firm

Dear Karen: I'm thinking of buying a recruitment process outsourcing company working with mid-size companies. Can recruiters succeed through a down economy?

Answer: Recruitment process outsourcing, which includes finding and screening qualified job candidates, is offered by many full-service staffing firms. The difficulty is that these projects are often one-time jobs rather than the ongoing contracts that provide staffing firms' bread and butter, said Chuck Miller, president and co-founder of People 2.0, a network of independent staffing agencies based in Boca Raton, Fla.

Examine the niche in which your potential acquisition operates and ask about the size and creditworthiness of the firm's clients. Make sure it has a good number of solid contracts. "A motivated seller should finance a portion of the purchase or make it an earn-out, with final payments based on how well the business does over some period of time," Miller said.


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