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The conversation has shifted. We’re spending less time optimizing for clicks and more time trying to fix the AI ROI story. AI now sits at the center of discovery, shaping what gets seen, summarized, and cited. Here’s what’s working right now, what your peers are doing, and why SMX Advanced will feel different this year. The SparkToro wake-up call: Influence happens everywhere The foundation of any serious 2026 content strategy has to start with Rand Fishkin’s landmark March 2026 study, “Influence Happens Everywhere,” an analysis of the 5,000 most-visited sites on both mobile and desktop. The finding that rattled the industry: while Google still commands 73% of search traffic, search itself is merely a response to influence created elsewhere. People don’t wake up and search for a brand in a vacuum. They read, watch, and listen across a fragmented web of news, social media, and niche communities before they ever hit a search bar. AI tools, despite their rapid growth, still account for a fraction of total web visits compared to the “big incumbents.” But the trajectory is unmistakable. The fundamental problem with attribution in 2026 is that search gets over-credited because it captures demand at the finish line, while the fragmented channels — email, news, specialized content — get under-credited for creating that demand in the first place. When creating content, your job is to win the influence phase so thoroughly that when a user eventually turns to an AI assistant or a search bar, your brand is the only logical answer. That framing is the strategic backbone behind sessions at the upcoming SMX Advanced in Boston, June 3-5, and the lens through which your entire editorial calendar should be rewritten. Your customers search everywhere. Make sure your brand shows up. The SEO toolkit you know, plus the AI visibility data you need. Start Free Trial Get started with What your Search Engine Land colleagues are already doing Before we discuss tactics, it’s worth pausing to note that this publication’s own contributor base has been sounding the alarm in complementary ways. Read them together and a clear picture emerges. Dave Davies, principal SEO manager at Weights & Biases and a regular SMX Advanced speaker, published a rigorous piece in December 2025, “Mentions, citations, and clicks: Your 2026 content strategy.” Drawing on Siege Media’s two-year content performance study covering more than 7.2 million sessions, Grow and Convert’s conversion research, and Seer Interactive’s AI Overview findings, Davies made the case that the metrics we’ve lived by — impressions, sessions, CTR — “no longer tell the full story.” Mentions, citations, and structured visibility signals, he argued, are becoming the new levers of trust and the path to revenue. Carolyn Shelby, who appeared in a recent SMX Munich 2026 recap for her session “Inside Google’s Head,” crystallized what many of us have only half-articulated: AI doesn’t discover new brands — it selects from known entities. The implications are stark. If you haven’t built entity recognition across the web’s key reference points — Wikipedia, Reddit, LinkedIn, authoritative press coverage — you don’t get selected. My own October 2025 piece for this publication compared how ChatGPT, Perplexity, Gemini, Claude, and DeepSeek differ in their data sources, live web use, and citation rules. The conclusion I reached then is truer today: a single-platform AI strategy isn’t a strategy. Each model has different retrieval logic, different trust signals, and different recency weighting. Jordan Koene made the same point in January 2026, noting that different LLMs win different jobs. This heterogeneity is the fundamental reason why “write good content” is both correct and insufficient as advice. What ‘full-stack content’ actually means In 2024, we were impressed if an AI tool could write a decent 500-word blog post. Today, writing is the least interesting thing AI does. Jasper’s 2026 Enterprise Suite is a useful illustration. It doesn’t just draft text, it: Pulls real-time performance data from Google Search Console. Identifies content gaps where competitors are gaining ground. Generates a multimodal package: a 1,500-word deep dive, three vertical videos for YouTube Shorts, and custom infographics, all calibrated to a brand-voice model trained on your last five years of successful campaigns. We have moved from “Help me write this” to “Help me dominate this topic.” But tools don’t solve strategy problems. The harder question is “what should the content actually say?” AI can’t produce the original research, the proprietary case study, or the hard-won perspective that makes an LLM choose you over a dozen lookalike alternatives. This is why the most interesting SMX Advanced session on content this year may be the one by Purna Virji of LinkedIn, who opens the conference with a keynote on fixing the broken AI ROI story before budgets get cut. Her argument — that AI investment must generate measurable business outcomes “at the P&L level,” not just activity, efficiency, or content volume — is a direct challenge to teams that have been celebrating output metrics while their revenue dashboards flatline. Google Vids and the democratization of video: A genuine inflection point Perhaps the most significant platform shift for content creators in 2026 was Google moving Google Vids out of its Workspace-only silo. You can now create, edit, and share videos at no cost directly within the Google ecosystem, powered by the Veo 3 generative model. For years, video production was protected by a high barrier to entry: expensive tools, specialist skills, and days of editing time. Google Vids collapses that barrier. Drop a Google Doc or a URL into the “Help me create” prompt, and you get a full-motion storyboard with AI-generated voiceovers, licensed music, and transitions in minutes. The practical consequences are arriving fast: Small agencies are now producing video-first content calendars that previously required five-figure budgets. The “if only we had video” excuse has expired. Hyper-localization is becoming a baseline expectation. Using Vids’ automated dubbing and visual swapping, a single “hero” video can be localized for 20 different markets in an afternoon. AI-generated summaries are already threatening video metadata. YouTube recently tested swapping video titles for AI-generated summaries. Brands that have not invested in clear entity signals and structured descriptions may soon find their video content renamed by an algorithm — not a person. The strategic implication is the same as it was for text: AI tools lower the floor but raise the bar. Every competitor now has access to cheap video. But who has something worth saying in that video? GEO, AEO, and the language problem Depending on which Search Engine Land article you read in the past few weeks, the dominant framework for surviving this shift is either generative engine optimization (GEO) or answer engine optimization (AEO). A growing number of contributors argue these terms are marketing noise for what is, at bottom, just good search everywhere optimization plus structured data plus earned media. That debate is genuinely worth having, and it will be had at SMX Advanced. But for the practitioner who needs to make decisions next week, here’s what the evidence actually supports: eMarketer’s Nate Elliott put it plainly in a recent FAQ: “Almost every GEO response is different from every other GEO response.” Between 40% and 60% of cited sources change month-to-month across Google AI Mode and ChatGPT, making AI visibility far less stable than organic search rankings. That volatility is the real risk, not the terminology debate. Similarweb’s 2026 GenAI Brand Visibility Index, reported by Digiday, found that major publishers like Reuters and The Guardian receive less than 1% of referral traffic from AI platforms despite being frequently cited. Yet, The Washington Post found that visitors arriving from AI platforms convert to subscriptions at four to five times the rate of traditional search visitors. The volume-versus-value tension has never been more acute. The practical translation of all of this: In 2006, we optimized press releases for keyword density: In 2026, optimize for entity association: linking your brand to specific solutions in the AI’s knowledge graph. Long-form blogs become modular content: Snippets, FAQs, and data tables designed for “chunk-level” ingestion by fetcher bots. Gated white papers become open data: Making unique research crawlable so AI credits you as the source in an overview, not a competitor who summarized your findings. Your robots.txt file now has strategic consequences: Allowing OAI-SearchBot but blocking GPTBot is a choice — one that determines whether you show up in real-time AI search citations versus model training data. Get the newsletter search marketers rely on. See terms. The human premium isn’t a platitude As AI-generated content reaches its peak volume, the value of the human voice has skyrocketed — but not for the reasons most think-piece writers suggest. The standard argument runs like this: Audiences can smell AI slop. Authentic human writing wins. That’s partially true, but it understates the mechanism. The deeper reason human-authored content is winning in AI-mediated search is structural. Human authors who’ve built genuine reputations across years of bylined, cited, and cross-referenced work have, in effect, built entity graphs that AI systems can navigate. That isn’t something a prompt can replicate. The classic example: an AI-generated 2026 review of a new electric vehicle might be factually flawless, listing every spec and battery range. But it loses to a human-authored piece that says, “I drove this through a New England blizzard and the door handle froze shut.” AI can’t freeze. It can’t feel frustration. It can’t have a bad morning. Those human frictions are now genuinely valuable SEO assets — not because they’re charming, but because no language model can fabricate them with any credibility. Readers, trained by years of exposure to AI content, have developed a reliable instinct for the difference. The Siege Media data Davies cited adds a quantitative dimension: across 7.2 million sessions, the content that earned sustained citations and conversions shared a consistent profile — original data, expert voice, and clear structure that an AI system could extract and attribute. Volume without those properties is, as the headline puts it, just noise. What to watch at SMX Advanced 2026 — and what it tells us about where this is going The SMX Advanced agenda is the clearest available signal of where the practitioner community thinks the critical problems are right now. A few sessions deserve particular attention from anyone focused on content creation. Virji’s keynote, “Your AI ROI story is broken: How to fix it before budgets get cut,” opens Day 2. Virji isn’t arguing that AI investment is wrong. She’s arguing that almost every organization is measuring it incorrectly — and that the correction required is organizational, not tactical. Davies’ session, “Predicting and influencing AI citations with retrieval signals,” on June 4, is the direct technical counterpart to the strategic framing above. If Virji is asking “what does success mean,” Davies is asking “how do you engineer it.” SMX Master Classes ran in April, and SMX Next follows in November. If there’s a throughline across the entire 2026 SMX calendar, it’s this: the search marketing community has collectively decided that the era of isolated channel optimization is over. Content, paid, technical, and brand are now one discipline, or they are failing disciplines. What you need to actually do in the second half of 2026 Broad strategic advice is easy to nod at and ignore. Here is the specific and uncomfortable version: Audit your AI visibility before you touch your content: Query ChatGPT, Claude, Copilot, Gemini, and Perplexity with the prompts your customers actually use. Note which brands appear. Note which sources get cited. If you’re not among them, adding more content isn’t the first fix — fixing your entity signals is. Stop treating your unique research as a lead-generation gate: Crawlable, citable original data earns AI attribution. A PDF behind a form wall earns nothing except a diminishing number of direct downloads as discovery migrates to AI interfaces. Invest in community platforms as a first-party strategy, not an afterthought: LLMs pull heavily from Reddit, YouTube, and Wikipedia. eMarketer’s Max Willens has noted that Reddit alone has 100 million daily active users generating brand conversations. Your brand’s absence from those conversations isn’t neutral. It creates a vacuum that your competitors or your critics will fill. Optimize for citatability, not just rankability: The new KPI isn’t the visit — it’s the attribution. If an AI Overview uses your data but doesn’t name your brand, you’ve been mined, not cited. Use clear entity markup, structured FAQ sections, and “quotable” conclusions that make it easy for an LLM to attribute rather than anonymize. Diversify your robots.txt strategy intentionally: Different bots serve different purposes. Allowing OAI-SearchBot (real-time citation) while blocking GPTBot (model training) is a legitimate strategic choice. Most organizations have not made it deliberately. Make it deliberately. Measure differently: The eMarketer-recommended framework allocates 40% of your optimization budget to core SEO fundamentals, 25% to digital PR, 20% to data and reporting, 10% to training, and 5% to experimentation. If your current allocation looks nothing like that, the gap explains more about your AI visibility struggles than any content audit will. So, combining SEO and PR is even more important today than it was back in the old days when I started speaking and writing about search. See the complete picture of your search visibility. Track, optimize, and win in Google and AI search from one platform. Start Free Trial Get started with The bots are crawling: Are you worth citing? The age of the proxy is over. You can no longer hide behind a ghostwriter or a simple prompt and expect to build a brand. But the deeper truth — the one that doesn’t make it into most AI content trend pieces — is that this transformation benefits people who’ve been doing the hard work all along. If you’ve been building genuine expertise, publishing original data, earning bylines in authoritative publications, and cultivating real presence in the communities where your customers actually talk — then you already have most of what you need. The AI infrastructure of 2026 is, in many ways, a system that rewards exactly the things good content has always required. The difference is that the competition is now generating plausible-sounding content on a scale that would have been impossible to imagine four years ago. Being good isn’t enough to stand out. You have to be citable, structured, and present in all the right places at precisely the right time — which is a harder, more interesting, and ultimately more durable strategic problem than keyword density ever was. See you in Boston. View the full article

The word “youtube” is the most searched thing on Google. It gets 1.38 billion global searches per month. View the full article

Google's Director of Software Engineering recommended using AI to boost providing value and said, "clearly, this is something we can advise." The post Google Advises Using AI In Best Possible Way For AI Search appeared first on Search Engine Journal. View the full article

To rebrand the Allen Institute, designers thought horizontally instead of vertically. The nonprofit bioscience research institute, founded by Microsoft cofounder Paul Allen to map the human brain, had a perfectly sufficient logo that designer Neville Brody says was “at the heart of everything.” But Brody, a legend in the industry who has designed for Coca-Cola, Nike, and Channel 4, reimagined the Allen Institute’s new identity so “the brand is a platform” for a company’s activities. Of the elements that comprise a brand, the logo traditionally comes first then the other components spin off of it. But for this project, Brody collapsed the hierarchy. He and his team developed a visual language that could be flexible yet consistent, and then let the logo develop naturally from there. His strategy? Articulate the right visual grammar and from there find out how to scale it so it “doesn’t break,” he says. What is the Allen Institute?The Allen Institute was founded in 2003 by the late Microsoft cofounder Paul Allen and his sister Jody Allen. Since then, it’s grown from a single lab studying the brain to a multi-lab operation with a much broader focus. Its research spans topics like addiction, cancer, long COVID, and disease. Last year, it released a first-of-its-kind database with data from more than 34 million brain cells. The institute’s research and tools are open source so it can share its findings widely. “They’re at the beginning of a chain, in a way, for new knowledge,” Brody says. That insight informed how Brody and his team conceived of the new identity. They spoke to lab leaders and employees at the institute and took note of shared values like boldness and taking risks that others would shy away from. The resulting brand identity is vivid and fluid. For the logo, Brody designed an icon that references the Allen Institute’s philosophy of openness and discovery. It is a circular lens featuring a cut out of a lowercase “a” (it’s friendlier and less corporate than a capital letter) followed by a slash meant to represent the institute’s interconnected teams. He also designed a wordmark, which reads “Allen Institute” in lowercase letters, to accompany the icon. On the color front, Brody went for a palette that symbolizes the company’s vitality and energy. There isn’t a single brand color; rather, there’s variety. It’s the opposite of the conservative blues and greens you typically see in bioscience. The brand’s base colors are black, white, and gray. Layered on top of that is a primary palette that included hues you might see in science or healthcare brands, but with more saturation and brightness: magenta, violet, and a teal that looks like scrubs. The accent colors—including a cheery yellow, electric green, and neon pink—serve as exclamation points. Brody, who served as the art director of the influential British punk magazine The Face, says print principles help with the brand’s flexibility. This includes using white space; commissioning editorial photography that puts the viewer in the scene instead (no stock photos here); distinctive typography; and creative applications of color. “The brand we’ve created with the Allen Institute is something that’s actually quite graphic and quite dynamic,” he says. “It’s not about being decorative. Everything has a function visually.” View the full article

Hello and welcome to Modern CEO! I’m Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it yourself every Monday morning. On any given workday, you might find Whatnot employees hawking trading cards, apparel, or other items on the digital live-shopping app. They’re not slacking on the job or trying to make rent—they’re actually evaluated on whether they’ve spent time selling and buying on the app. “We only exist to the extent that we provide our customers a lot of value,” says cofounder and CEO Grant LaFontaine. “If you want to build a customer-centered culture, you have to actually follow through on building one and inject it everywhere you possibly can in the organization.” At Whatnot, which launched in 2019, focus on the customer starts with the hiring process. “If you interview at Whatnot, somewhere along your interview pathway, someone’s going to ask you, ‘Have you used the app? What do you think about it? What could be improved?’” LaFontaine says. “We want to see that you actually use it, you understand it, and you can think through the lens of a customer.” Try before they buy Once hired, every one of the company’s more than 1,000 full-time employees is required to answer customer support tickets each quarter, plus sell and buy on the app. The company provides $150 in credits to make purchases and lets employees do their required buying and selling on company time. Many companies say they engage in “dogfooding,” a term derived from the phrase “eating our own dog food,” or testing one’s own products. Enterprise tech giants such as Microsoft and Cisco have frequently touted the way they used their own tools to drive productivity. But few companies mandate dogfooding the way Whatnot does. LaFontaine says no employee can “meet expectations” on their performance reviews if they fail to purchase and sell on the app and answer customer queries. LaFontaine has gone live and sold Pokémon cards and toys. Last quarter, he sold some Whatnot swag and donated the proceeds to charity. LaFontaine says that his own stints as a seller have helped him understand the pain points some customers may experience, such as the challenge of trying to remain composed on camera while also queuing up additional listings—a challenge he has encouraged his product teams to address. He notes that when product teams add new features for sellers, they can get immediate feedback to coworkers who are power sellers—some employees sell thousands of items a month. The customer service teams who talk to buyers and sellers are more fluent in solving problems because they have hands-on experience in the app. Culture-keeping in action Whatnot’s approach appears to be paying off. The company says 20 million new accounts were created last year; the app hosted more than 500,000 hours of live shows in December 2025, up 186% from a year earlier. LaFontaine says he has no plans to abandon the dogfooding requirement as the company scales. In fact, he says, “As you get bigger, you have to be more stringent. It becomes easier for people to hide, and it’s harder for the culture to cascade through so many layers.” Indeed, some employees have started to question the policy, saying that they’re too busy or that they should be rewarded for doing excellent work without engaging on the app. “We haven’t wavered,” he says. “And I hold myself to the same standard. In fact, I have to go live in the next couple of weeks or I’m going to miss my deadline.” I asked LaFontaine how he’d advise CEOs who might be trying to introduce or reintroduce a customer focus into their companies. He acknowledges that the task might be difficult for some organizations, but customer obsession is table stakes for any business that aspires to excellence. “If you’re going to build a great business, you have to [focus on customers],” he says. “I would advise people to do it sooner rather than later, build it everywhere, and take it seriously. And it starts with the CEO and the leadership team.” Programming note Please check out our first live-streamed event exclusively for Modern CEO subscribers: On Monday, May 18, at 1 p.m. ET, I’m hosting The CEO’s Guide to AI. Matt Fitzpatrick, CEO of Invisible Technologies, will help leaders understand where AI can have an impact—and what’s hype. You can RSVP here, and if you’re not already a subscriber, you can sign up here. And if you have questions for Matt, you can submit them to stephaniemehta@mansueto.com. Read more: the new way we shop The most innovative retail companies of 2026 This AI product is changing the way we buy clothes Tecovas has built a loyal fan base on customer service View the full article

Not long ago, I was speaking at an event when a recent college graduate approached me. He’d studied neuroscience and, like a lot of STEM generalists, had set his sights on consulting—firms, like Deloitte or Accenture, that have long hired armies of junior associates for data gathering and analysis. He’d earned top grades at a great school. But all of his outreach—his informational interviews, his applications and follow-ups—had come to nothing. His story is not unusual. If entry-level consulting or finance jobs have always been difficult to land, they’re even harder to get now. This generation grew up believing that developing key skills such as coding and data analysis, research and writing would get them a foot in the door for a fulfilling white-collar career. And now so many of those assumptions are wrong. Anthropic CEO Dario Amodei said AI could wipe out roughly 50% of all entry-level white-collar jobs within five years—absorbing the data entry, basic analysis, and research synthesis that used to be a new graduate’s first rung on the ladder. A global study by the British Standards Institution seemed to confirm his prediction: Polling 850 business leaders in Australia, China, France, Germany, Japan, the UK, and the US, it found that business leaders have been prioritizing AI automation over training junior employees, with 39% saying they’d already reduced or cut entry-level roles due to AI and 43% saying they expect to do so in 2026. The dominant narrative is doomsday: “AI is taking all the jobs!” And the data behind that narrative is real enough to generate legitimate concern. But the story is both more hopeful, and more complicated, than the data suggest. What we’re actually witnessing is a compression of the traditional career timeline that, navigated intentionally, can accelerate professional growth in ways no previous generation has experienced. For first-job seekers willing to adapt their approach, and rethink how they envision their early-career arc, success remains within reach. Here are some new strategies to keep in mind. Look For Companies That Are Bucking The Trend Over the recent weeks, there have been signals that some employers are recognizing the danger of choking off their talent pipelines entirely. Reddit CEO Steve Huffman said that the company will “go heavy” on hiring new college graduates, because they are “AI native.” IBM likewise announced plans to substantially increase entry-level hiring. And Dropbox, Cloudflare, and LinkedIn have all signaled significant expansion of internships, new graduate, and entry-level programs. PWC, which partially rolled back entry-level hiring last year, recommitted itself to it in about 20% of its office locations. The firm now advises clients and others to continue hiring early-career workers or risk setting “starving [their] organization of its future.” What’s happening in my view is this: companies that experimented aggressively with AI are realizing that young, adaptable people are critical to investing in growth and accelerating transformation. A generational age-out is coming. Succession and progression can’t happen if you’re only hiring into mid-career roles. And the mid-career people you might bring in don’t have the neuroplasticity or the openness—the unwritten chapters—that make early-career workers so valuable. Organizations are flattening, yes, but they still need humans who can both grow with the business and serve as more agile catalysts for organizational change. Work At The Skills That AI Cannot Replicate What should new-workforce hopefuls focus on? At the risk of stating the obvious, they should focus on the capabilities AI cannot replicate. This includes relationship-building and its many subsidiary skills: The ability to listen deeply and synthesize what you’ve heard in multiple different offline conversations into something actionable. The ability to negotiate, facilitate a difficult conversation, or tell a compelling story. The ability to exercise judgment when the data is ambiguous. The ability to read a room or tell an (appropriate) joke. For human jobs, human skills. Such capabilities have always mattered in leadership, but they typically didn’t develop until mid-career, because early-career professionals were too focused on the kind of work AI now handles. So this career-timeline compression is actually an opportunity. If the rote, lower-level work is being done by AI, new entrants can accelerate their development of these distinctly human skills, learning them much earlier than previous generations did. It’s about getting in the door and then, once you’re there, knowing that the first trimester of your career will not be consumed by the tactical as you’d always assumed it would. You must build the skills that create real leverage—storytelling, communication, intellectual and emotional agility, critical thinking, relationship building—from day one. Make a point of describing your search strategy and objectives in these terms to job recruiters. It will demonstrate the self-awareness that is often lacking in even much more experienced job seekers. Remember: This is Your Superhero Origin Story I spend a lot of time talking to people in their early twenties, many of whom range from neutral to deeply unhappy in their first jobs. They are lucky to have landed a role over the past year, before many doors began to close. Some are on Wall Street making good money. Some are in solid companies with real training programs. And the most common answer I’ve gotten from this important cohort of people about how they feel about their jobs is “meh.” When I reflect on my own early career, happiness was never part of the early equation. The goal was to satisfy basic needs: become financially independent, find an environment where I could learn and add value, meet some cool people. The idea of being happy at work would have struck me as secondary. I don’t say this to dismiss the concerns of today’s early-career workers. I say it because I believe the framing is wrong. Instead of asking “am I happy?” try a more useful question, like “am I growing?” Look for satisfaction in your increasing competence, in mastering something difficult, in developing abilities in dealing with a wide variety of people. Importantly, there will be great satisfaction in knowing that a year from now you’ll be able to see how far you’ve come, and where you want to go will become clearer. That’s not the same as happiness but can lead there. My best career moments have been more about learning, advancement, and fulfillment in uncomfortable struggle than about my initial personal feelings which did actually flourish once I accomplished what I set out to do. Keep An Ikigai Career Journal Scott Galloway, the entrepreneur turned NYU business-school professor, podcaster, and author, often says that “follow your passion” is the worst advice you can give a young person. I agree. Most people in their twenties don’t know what their passion is. But they can pay attention. They can notice what piques their curiosity. They can track which parts of a meeting make them lean forward and which make them zone out. They can become attuned to what types of people they find more engaging, and importantly, what type of leadership attributes are admirable, perhaps even aspirational. As you wade deeper into a new role, write down where you excel, where you struggle; what energizes you, what drains you. This goes for the content and type of work as well as the people with whom you spend your business days. That kind of deliberate self-observation, accumulated over time, is how you find the intersection of what you’re good at, what the business needs, and what you actually enjoy. The Japanese concept of ikigai describes this convergence, and you can’t find it without experimenting. Become a Great Mentee One of the most underrated career skills is learning how to be mentored well. Experienced professionals want to help. But the person being mentored has to bring something to the relationship: respect, curiosity, vulnerability, a genuine willingness to build a connection that goes beyond transactional advice-seeking. Bonus: always bring an observation about the business, even suggestions for improvement, whether in processes, policies, or even team culture. If someone takes the time to share their experience with you and you show up with gratitude, follow-through, and a willingness to be honest about what you’re experiencing, that person will go to bat for you. They’ll make introductions, advocate for your progression, and think of you when opportunities arise. Note also: Mentoring is one of the most human dynamics in a professional environment. And it’s one that AI will never replace. Chart The Multi-Lane, Mad Scientist Career The side gig was already a fixture of working life long before ChatGPT arrived. And technology, including AI, has continued to lower the barriers to entrepreneurship. You can build a website armed only with a two-paragraph description and an AI tool. Be a mad scientist. You can run a side business while holding a full-time job. You can operate in multiple lanes simultaneously. For early-career workers who can’t find the entry-level job they want, this is worth exploring. Start something. Experiment. You’re building your own entry-level position. If a hiring manager sees someone who launched a business—even a small one—they’re looking at a person who understands initiative, risk, and execution, not to mention the subject-matter knowledge you will have developed. Career paths are no longer a single-lane highways. You can pursue several directions at once, in ways that, paradoxically, AI and other technologies have made possible. Maintain AI Literacy As Table Stakes If you’re entering the workforce in 2026, you must be able to use AI effectively to the same degree you once needed to be fluent in the Microsoft and Google office suites. There will be a transition period in which you’ll need competency across both AI and the various legacy toolsets. But AI is not optional. It is a baseline skill, like knowing how to use a spreadsheet twenty years ago. The candidates who understand how to use these tools to solve business problems large and small will have an advantage over those who don’t. The good news for those just starting out is that they likely already use AI flexibly, in contrast to seasoned professionals who have approached it with a bit more bias and resistance, given our poor experiences with prior tech transformations. New capabilities have come online, like Claude Code and Cowork, OpenClaw and OpenAI’s Codex. Those who can integrate disparate systems in creative ways, those confident enough in their ideas to improvise and experiment, will be in demand. Dropbox’s chief people officer Melanie Rosenwasser told Bloomberg that, when it comes to early career workers using AI, “It’s like they’re biking in the Tour de France, and the rest of us still have training wheels.” But AI proficiency alone isn’t enough. The experienced professional who combines deep business acumen, strong relationships, and AI fluency is nearly uncatchable. What that means for new entrants and aspirants is that basic AI skills will be expected and your differentiator will be the human capabilities you develop alongside it. The Case for Optimism I’m optimistic about this generation. Gen Z is more socially aware, more globally connected, and more principled than perhaps any generation before them. They won’t sacrifice themselves for a broken system. There’s something powerful in that. The world they’re entering is turbulent. The rules are changing. But they have a chance to build careers that are more varied, more self-directed, and more human than anything my generation has experienced. What such a career asks of us, however, is a willingness to be curious, to invest in the skills that matter most, and to ride this wave rather than let it wash us away. The entry-level job you imagined may not exist anymore. But the opportunity has never been bigger. And this requires bigger thinking, bigger doing, and bigger leadership. View the full article

For a Superfund site, the Gowanus Canal is looking surprisingly nice these days. Long an industrial dumping site, the Brooklyn waterway has undergone decades of interventions to undo that damage. Now, after years of planning and community outreach, redevelopments along the polluted Gowanus Canal waterfront are giving the area a welcoming residential gloss. Two recently opened projects exemplify the transformation underway along the Gowanus Canal. Both designed by the landscape architecture firm Scape and in line with a master plan it helped release in 2019, the projects are a preview of what it will look like when the Gowanus completes one of the most dramatic urban turnarounds in recent times. The two projects are new public spaces that begin to reconnect people to the Gowanus Canal’s waterfront as it nears completion of its environmental cleanup. One is a waterfront plaza and esplanade wrapping a two-tower residential and office development. The other is a linear waterfront park with a playground, picnic area, and gardens. Both are rebuilding the ecology along the canal while significantly increasing access to a waterway that had spent decades off limits. “The Gowanus as an ecosystem and as a neighborhood is so interesting because it is being remade at a systemic level in so many different ways over a relatively short period of time for an urban area,” says Gena Wirth, design principal and partner at Scape. Much of the change along the canal has been spurred by a rezoning process launched in 2014 that enabled the former industrial land to be redeveloped into a mixed-use neighborhood. It was an official change for an area that had been slowly evolving through the grassroots efforts of community groups focused on environmental justice, ecological restoration, and public space. One group, the Gowanus Canal Conservancy, was founded in 2006 and has been working since then to clean up and restore the canal and its neighborhood, and has been a key part of the transformation now underway. “We have years of experience doing a lot of hands-on stewardship on street trees, rain gardens, and guerrilla gardens throughout the neighborhood and through that we have really developed a very fine-tuned understanding of what biodiversity has existed in the neighborhood, specifically before the cleanup, and what types of landscapes can really thrive here,” says Andrea Parker, executive director of the Gowanus Canal Conservancy. In 2017, the conservancy hired Scape to create a master plan for the area, which was published in 2019. “This Lowlands master plan was really about advocating for positive change and putting forward a vision for the future,” says Wirth. “It’s been a real estate speculative market for like 40 years. So it’s not under-considered, but it’s been kind of abandoned from a functional perspective for a while.” The plan set standards for how future development along the canal could contribute to its cleanup and restoration. It creates legal frameworks and requirements for how public and private development could occur there, while navigating the complexities of a federal cleanup, state and local oversight, and a large mix of landowners. Now, it is being used to help shape more than a dozen active development projects along the canal. Scape’s two recently opened park spaces, and a previously completed esplanade, are setting the standard for how the area will develop. The recently completed plaza and esplanade around 420 Carroll Street is what Wirth calls an “eco basin,” or a recessed garden running between two buildings and surrounded by walkways. The ground is designed to drain rainwater into the basin, where it is filtered by the garden before draining into the canal, much like rainwater would have drained through the area back when it was a tidal wetland. Multiple levels of walkway along the water allow different views while also serving as floodable spaces during king tides. “This lower landscape terrace is designed to flood, and it does flood,” Wirth says. “If you’re a user of landscape, it’s fine, you can just walk around the higher zone. But on a regular sunny day, you’re still able to get close and get down to the water.” The other new project, a linear park outside Sackett Place, creates even more connection to the water, which is still considered unsafe to touch. It features a stepped get-down that will function as an access point for kayakers once the canal’s water is cleared for recreational use. The picnic areas and playground on either side of this terracing also look directly over the water. The canal is still in the middle of remediation, with the goal of it being completed by mid-2030s. It’s also dealing with continued issues around combined sewer overflow, which dumps hundreds of millions of gallons of raw sewage into the canal during rainstorms. Scape has about 10 other projects in various stages of development along the Gowanus Canal waterfront, each filling a bit of a former wasteland with active and ecologically healthy landscapes. “The vision is coming together,” Parker says. “And I do think that as we actually start seeing these landscapes meet, that’s when we’re really going to start feeling it.” It’s been a long time coming for Parker, and for Wirth, who first got involved in Gowanus in 2010 after moving to New York, doing volunteer landscape work planting plugs of saltmarsh cordgrass at the water’s edge­—a species that now features heavily in Scape’s plantings on the canal. Back then it was largely unofficial work, involving some fence-hopping. Now, those same stretches of the canal are being reopened in ways few people could have foreseen 10 or 20 years ago. “I never thought I’d be picnicking along the Gowanus when I first moved to New York City,” says Wirth, “but now it’s quite a lovely space to be.” View the full article

Learn how to perform a thorough content audit with step-by-step instructions. Improve SEO and AI visibility. View the full article

David Epstein, the #1 New York Times bestselling author of ​The Sports Gene​ and ​Range​, has a new book out called ​Inside the Box​. As with all of Epstein’s books, I really enjoyed it. He’s one of the best storytellers currently working in idea writing. There was one chapter in particular, however, that captured my attention as being uniquely well-suited to the themes we discuss here. It focused on the ideas of a somewhat eccentric physicist-turned-management guru named Eliyahu Goldratt, who in the 1980s popularized a framework for understanding industrial productivity that he dubbed the “theory of constraints.” Here’s how a non-profit established to promote Goldratt’s work summarizes it: “Every system has a limiting factor or constraint. Focusing improvement efforts to better utilize this constraint is normally the fastest and most effective way to improve profitability.” To borrow one of Goldratt’s examples, imagine you run a small assembly line that manufactures chicken coops following a step-by-step process – building the frame, attaching the roof, adding wire mesh, etc. Goldratt notes that the speed of this production is limited by whatever step is slowest; what he calls the “bottleneck.” Speeding up other steps of the process won’t increase the rate at which you produce chicken coops, as the bottleneck still determines the overall efficiency. If, for example, putting on the roof is the slowest step, then adding more workers or better tools to earlier steps will lead to more partially-constructed coops piling up at the roofing station. To speed up the line, you need to move more resources to the weakest link. Goldratt was primarily concerned with industrial production, but I think his theory of constraints provides insight into personal productivity, too. Something I’ve long written about is the reality that many digital productivity tools paradoxically make us busier, rather than better at our jobs. Goldratt’s theory helps explain why. When we deploy a digital tool like email to speed up communication, or generative AI to create (sloppy) slide presentations quickly, we don’t automatically become better at our jobs. If these steps don’t improve the bottleneck in our process – the key link where the real value is produced – then, as in the chicken coop example, they’re just as likely to create pile-ups and distraction, without actually boosting our true productivity. This helps explain why ​email ended up an accidental disaster​, and the early returns on ​AI office tools have been mixed​ at best. The theory of constraints implies a different way of thinking about getting better at our jobs. Don’t seek speed, or efficiency, or the avoidance of hard things. What ultimately matters more than anything else is how well we perform the deep steps that actually move the needle. The post On Bottlenecks and Productivity appeared first on Cal Newport. View the full article

The combination adds to a wave of broader merger and acquisition activity that includes an ongoing bidding war over RoundPoint Mortgage owner Two Harbors View the full article

More mortgage firms are suing their counterparties over buyback demands. View the full article

In a recent episode of the Big Technology Podcast, Mark Cuban shared what he would do if he was a soon-to-be college grad on the job hunt in the current turbulent market. Cuban said young professionals shouldn’t look to big companies—which have already put a pause on hiring entry-level roles, especially for software engineers and programmers. Instead, he said, they should shift their focus to outsourcing their AI skills to smaller-scale companies. “If I was graduating today, or if I was a 16-year-old looking for a job, I would learn everything there is to know about AI. And I would go to small and medium-size businesses and say, ‘Let me walk in the door,’” Cuban said. As these systems constantly develop, they require modifications and updates. Cuban said that managing a company’s AI systems—or being the “buffer” that understands how agents work—is “crucial,” and a sound way to generate recurring income. Cuban said he has preached the advice of becoming an AI expert to his daughter, who will graduate from college soon and work at a consulting company. “If you’re not the person who knows how to do vibe coding or do all these different things with agents and Claude—whoever does is going to take your place,” he said. Instead of buying into the AI hype, Cuban has been quite measured with his comments around artificial intelligence, as well as vocal about the technology’s potential pitfalls. In the past, he called AI agents the equivalent of a “hungover intern.” But the billionaire entrepreneur said AI has had a “major impact” and acts as a “great democratizer of knowledge, like we’ve never seen before.” Still, he casts a distinction between people who use AI to expand their skill set versus those who use AI tools to speedrun through tasks. “You will always have an edge over everybody around you if you’re using AI to learn,” Cuban said. “If you’re just using it just so you don’t have to do the work and it’s your drunk intern, I mean, you’re going to struggle.” As someone who has been around for the advent of major technologies, Cuban believes that those who are not using a large language model (LLM) or don’t have knowledge about AI agents will fall behind. Considering that many workers feel resentful and fearful of company AI policies, this is a real risk. “There was always a group of people that were first and always a group of people that were naysayers,” he said. “And the people that were first typically ended up getting further ahead, and I think it’s the same with AI today.” In the next three years, Cuban said that there will be two types of companies: those that are great with AI, and those that went out of business. In the process, he said, there is “no question” that job displacement will impact many people. But, Cuban said, “If you’re a critical thinker, there’s always going to be a need for you.” In Cuban’s eyes, whoever learns how to use automation tools the best will win in the AI era. Everyone else might get left behind. View the full article

Every few months, we find ourselves circling back to the same question. What skills will matter next? Every time, the answers feel urgent, confident, and somehow incomplete. A new technology dominates the conversation. Or there’s a new ‘essential’ capability. Organizations rush to respond, often without much confidence that the target will stay still long enough to hit. The reality is that the future of work is no longer unfolding in neat stages. It’s arriving in overlapping waves. Technological change, geopolitical instability, climate pressure, demographic shifts, and changing expectations about work are all happening at once. In this kind of environment, predicting specific jobs or technical skills five or ten years out is increasingly unrealistic. But that doesn’t mean leaders are flying blind. If we stop asking “what jobs are coming?” and instead ask “what helps people stay effective when things keep changing?”, a clearer and more useful picture emerges. Across industries and regions, what holds up is not a single skill set, but a handful of human capabilities that remain relevant, even as the context around them keeps shifting. Thinking clearly when the pressure is on One of the most valuable skills is the ability to think clearly under pressure. As automation accelerates and information becomes faster and cheaper, judgment becomes more important, not less. The World Economic Forum’s Future of Jobs research shows that analytical and creative thinking remain the most in‑demand core skills globally, even as technology adoption increases. The organizations that navigate uncertainty well are not the ones with the most data. It’s those with people who can interpret it, challenge assumptions, and make sound decisions when there isn’t an obvious answer. This kind of thinking is practical rather than theoretical. It shows up in people who can cut through noise, identify what matters, and explain complex issues in plain language. It also shows up in leaders who resist the pull of constant urgency and take just enough time to make the right decisions. Creativity beyond automation This kind of thinking is linked to creativity. And we’re not necessarily talking about the artistic sense here, but also the ability to see alternatives. When a specific approach no longer works, someone needs to imagine a different way forward. According to a McKinsey report, capabilities that allow people to add value beyond what automated systems can do—like higher‑order cognitive and judgment skills—are becoming more critical as AI scales across industries. Learning faster than the change around you Learning agility is another capability that stands out. The shelf life of knowledge is shrinking. What you mastered five years ago might still be relevant, but it won’t be enough. According to the World Economic Forum, employers expect roughly 40 to 45 per cent of workers’ core skills to change within a five‑year window. The OECD also emphasizes that resilience in both economies and organisations depends on the ability to continuously build and apply new skills. The workplace of the future will reward willingness and ability to keep learning. Curious people adapt faster. People who are comfortable being beginners cope better with change. Organisations that normalize learning as part of everyday work—rather than as a separate activity—move more easily with the market. Using AI with confidence and judgment This becomes particularly important as AI becomes embedded in more roles. Globally, there is strong demand from employees to build confidence in using AI tools. Linkedin’s 2024 Workplace Learning Report found that four in five people want to learn how to use AI in their job. But the real differentiator is not tool use alone. It is knowing when to rely on technology, when to question it, and when human judgment should override what the system produces. As technology takes on more routine and analytical tasks, the human side of work becomes more visible, not less. Skills like listening, collaboration, influence, and building trust grow in importance. In global organisations, this plays out across cultures, time zones, and lived experiences. The ability to work effectively with people who see the world differently is no longer a leadership nice‑to‑have. It is operationally essential. What this means for leaders Where does this leave leaders? It’s impossible to predict the future, so the most responsible strategy is investing in capabilities that travel well. Skills that help people think well, learn quickly, work constructively with others, and use technology with confidence and care are far more durable than any narrow technical credential. We may not know exactly what the world of work will look like in ten years’ time. But we do know this: complexity is not going away. And the organizations that thrive will be those that equip their people to stay effective even when the world of work keeps changing. View the full article

Consolidation is all the rage in the video game world these days. In the past year, Ubisoft created a new gaming subsidiary with Chinese tech giant Tencent, while Electronic Arts announced a $55 billion deal led by Saudi Arabia’s Public Investment Fund that will take the company private. An industry that, just a decade ago, included more than a dozen publicly traded game makers now has only a handful left. Take-Two Interactive Software has managed to remain independent while rivals, including Activision-Blizzard and EA, have been absorbed. And as it continues digesting its 2022 acquisition of Zynga, CEO Strauss Zelnick says the company is already eyeing its next acquisition target. However, he says, that could still be a couple of years away. “I think for the next couple of years, our story will be one of organic growth, but then if we do things right, we’d be in a position to [do] something inorganic as well,” he tells Fast Company. “But would we be interested in growing? Of course.” As expected, Zelnick declined to name specific targets, but acknowledged the company already has some in mind. “We have our eye on a couple opportunities, but . . . they may not be around at that time,” he says. “And there are no guarantees. But I think there still would be some opportunity, no matter what.” What he did concede is that whenever Take-Two next opens its checkbook, it will likely be focused on app shopping. Mobile gaming now accounts for half of the company’s revenue. “There are a couple—I’m not going to name names—but there are a couple in the mobile space we’re very impressed with. Less so on the console side,” he says. Organic growth Part of the reason for any acquisition delay may simply be that Take-Two will be fully occupied over the next year or two with the launch of Grand Theft Auto VI. The latest installment in one of entertainment’s most lucrative franchises is scheduled for release on Nov. 19. At the recent iicon conference, an invitation-only summit for video game industry leaders, Zelnick said marketing for the game would begin “soon,” suggesting further delays are unlikely. Expectations are ludicrously high. Its predecessor, released in 2013, has sold more than 225 million copies and generated nearly $10 billion in revenue for Take-Two. It was still the industry’s 11th best-selling game in March, according to Circana, an astonishing feat for a title more than a decade old. Most games are fortunate to remain on sales charts for a few months. Few last beyond a year. New challenges Of course, there is always the possibility that someone could attempt to buy Take-Two itself. Zelnick acknowledges that, but downplays the likelihood, pointing to the company’s dramatic growth since he took over 18 years ago. “We’ve always been at risk of someone wanting to own us because we’re public and not controlled,” he says. “We’re here for the shareholders. The best protection in terms of remaining independent is doing a great job. When we bought the company, the stock was $11. Today it’s $213. And if we continue to create value in the company, there would be no reason for someone to take it over and it would be hard for them to take it over.” Part of the challenge in sustaining those financials, even with GTA VI looming, is adapting to shifting player habits. Mobile continues to expand, while console gaming no longer dominates the way it once did. And amid speculation that GTA VI could carry a significantly higher price tag than most major releases, Take-Two will need to stay especially attuned to player behavior. “The truth is, for the console side of our business, it’s very clear that business is opening up,” Zelnick says. “PC is becoming a more and more important format for what were previously console releases, with a little PC on the side. And now it’s become like PC is becoming the main course. That’s not lost on us at all.” Despite that shift, there are still no plans to launch GTA VI on PC simultaneously with its console debut. It will eventually arrive on the platform, but there is still no timeline, nor much explanation for the staggered release. “All of our major titles ultimately make it to PC,” says Zelnick. “In the case of Grand Theft Auto VI, we’re obviously only launching on two consoles, so … there are clearly business reasons to do that.” View the full article

New York City is notoriously loud. Cabs honking everywhere, thousands of people flocking to the streets at all hours, and cars blasting music for all to hear. But while some of us hear only noise, others hear music. Joshua Wolk is one of those people. The designer is the creative mind behind Train Jazz, which turns the rhythm of NYC’s subway into an interactive musical website. Train Jazz started when Wolk came across New York City’s open repository of transit data. He first created a soundless live map of the city’s transit. “It felt unfinished. I soon realized that music was that missing piece,” he tells Fast Company. Train Jazz Wolk ended up assigning an instrument to every train line across the various boroughs. On the website, users see a simplified map of the Metropolitan Transportation Authority (MTA) subway lines, showing the active trains running in real time. Every note is played based on where a train is along its route, coming together as a sonic tapestry of the city’s movement. When playing around with the website, users can hover over a panel displaying the symbols for each line. The number of trains running for that specific line then appear, alongside more information regarding the line’s history and the instrument it’s been assigned. A sound for every train line The specific sounds and instrument associated with each line are influenced by Wolk’s research on each line. For instance, at the time of publishing, the F line had 51 trains running in the city. “The F is famously unreliable—its sound wobbles like a player who can’t hold a pitch.” Or take the Z train, which plays soft maracas only during rush hour, when the train runs. The Z’s sound has half the strength of its other brown line counterpart, the J, which routinely runs throughout the entire day. “The harmony moves through a slow chorus. A note is placed precisely where the train happens to be along its route. Rush hour fills the band with held tones; at 3 a.m. the silences grow longer,” the site reads. “Whatever is playing now has not played before and will not play again.” The map is updated every 15 seconds, with the website fetching every train’s coordinates from MTA’s API, Wolk explains. The project also reacts to location, with trains near the user growing louder than the rest. “You are listening to a portrait of where you stand, played by the city you are standing in,” the site adds. Though the sounds can be discordant depending on which trains are running, it’s free-form and beautiful in the way that only jazz is. “My rule was that Train Jazz wasn’t complete until it was something I could listen to for three hours straight,” he says. “That required putting a lot of care into how the notes float through the chord progressions.” Ultimately, Wolk wants to take his virtual project to the real world. “The internet is cool, but my dream is to give Train Jazz a physical home in New York: A wall, a bus stop, maybe even the MTA,” he says. View the full article

In the rolling hills near Reno, Nevada, in a field filled with solar panels, something unexpected is nestled into the landscape: a data center that isn’t blowing up its neighbors’ electric bills. In fact, the modular data center, built by Crusoe, essentially doesn’t rely on the electric grid at all. It runs on solar power and an unlikely source: hundreds of second-life EV batteries. At a time when data centers are driving up electricity demand—and facing intense political pushback over potential impacts on energy bills and the environment—the batteries offer a flexible way to add power without leaning harder on the grid. The astonishing setup is the handiwork of $6 billion startup Redwood Materials and its founder and CEO, JB Straubel, who’d seen a new opportunity in the flood of used EV batteries. His new vision for the electric grid was sparked by the sheer volume of electric vehicle batteries that still hold significant financial and functional value. This made a new and more lucrative business case feasible: Instead of manufacturing new batteries—an expensive process dependent on global supply chains—the team could use the energy left in secondhand EV batteries to make cheap, quickly deployed, cost-effective energy storage at a large enough scale that they could be used by electric utilities or in microgrids like the one in Nevada. “I have kind of an aversion to waste, personally. It pains the engineer in me to watch that happen, even though we certainly could recycle these packs, and we do every day,” Straubel continues. “That was the impetus for thinking that there must be a better way. There’s got to be some way we can take advantage of that and be one of the first to really scale it up.” The insight—presciently—came just as the energy storage market was poised to boom. In the U.S., a record 18.9 gigawatts of energy storage capacity were added last year, enough instantaneous power for roughly 15 million to 20 million homes. California recently set a record when 43% of the total power in the state was being supplied by batteries. And between now and early 2027, the U.S. Energy Information Administration expects battery storage to surge again by more than 50%, driven both by the need to store renewable energy and by surging demand for electricity due to the massive build-out of new data centers. As some data centers plan to rely on new gas plants that could collectively emit more pollution than some countries, Redwood’s low-cost batteries make renewable energy more viable. For data center developers, they offer a way to avoid long waits with utility companies—and to comply with the White House’s demand to bring their own power to new projects. For utilities, they’re a lower-cost method to store renewable energy. At factories, they can store grid power when it’s cheapest for later use.  Redwood, flush with the batteries Straubel saw were coming, is on pace to deploy hundreds of megawatt hours of its systems, equivalent to the capacity of some power plants; next year, it aims to deploy gigawatt hours of storage. In a moment defined by grid bottlenecks and soaring demand, Redwood is rethinking how energy infrastructure can be built—and reused. For Straubel, the former CTO at Tesla, it’s just the latest unconventional bet in a career built on them. And it might just save the electric grid before it’s too late.  Early adoption finds success Redwood’s strategy reflects Straubel’s history of pursuing ideas in energy and transportation that initially seemed early, but later became essential. As a student at Stanford University in the 1990s, where he designed his own major in energy systems engineering, he started building electric cars. Before his work at Tesla, he spent the early 2000s pitching investors on the idea of an electric sports car that used lithium-ion batteries to increase range. Most investors passed. Elon Musk, though, recognized the potential and brought Straubel into the company soon after he led the Series A investment in 2004. (A settlement from a lawsuit about Tesla’s early days allows five people, including Musk and Straubel, to call themselves “cofounders.”) As Tesla grew, Straubel was the internal champion for building the Supercharger network and the company’s own battery factories, not just the cars themselves. He later saw the opportunity to build energy storage for renewables using lithium-ion batteries, another idea that faced skepticism from the energy industry but soon became widely accepted. Cal Lankton, Redwood’s chief commercial officer, worked on charging infrastructure and energy sales at Tesla. At first, he says, utilities argued that grid-scale batteries wouldn’t work and that they wouldn’t use the technology. But over time, as solar and wind power created more need for energy storage, and the cost of batteries came down, they began deploying more. The technology proved itself on the grid and has now been widely adopted. In 2017, after Tesla reached the milestone of mass-producing the Model 3, Straubel began work on Redwood on the side, and officially left the automaker in 2019 to begin launching Redwood. (He was elected to Tesla’s board in 2023.) As with his electric car pitches, investors were initially skeptical about his new project. “[They were] maybe a little bit confused, in a way, like, ‘You’re starting a garbage company? Shouldn’t you be focused on one of these more obvious and trendy and sexy topics?’” Straubel says. Most investors thought the idea was too early: EVs were still in the early stages of acceptance, and most other automakers hadn’t yet scaled up production. So there was still a relatively small supply of batteries to recycle, and a relatively small demand for new materials to make more. But Straubel, after years immersed in battery technology at Tesla, had identified two major challenges. The critical materials used to make batteries were likely to become much harder to source in the future. And as the EV market expanded, there would eventually be a growing pile of battery waste. Recycling EV batteries could solve both problems, offering a new domestic supply of critical materials while keeping batteries out of landfills. He saw that there weren’t good solutions for recycling at the time; automakers didn’t have the bandwidth to focus on it. For the future he wanted to exist, he realized that he’d need to build it himself. Breakthrough Energy Ventures, the Bill Gates-backed VC fund, became one of the first investors, with $40 million in funding in 2020. Its team had already been thinking about future shortages of critical materials. A decade later, that scarcity has “played out the way we imagined,” says Carmichael Roberts, chief investment officer at the fund. The investors also saw that the company had the right leadership to take on the work. “Who would know more about where the future of battery materials was going than JB did at that moment?” Roberts says. Straubel also had the right qualities to be an entrepreneur. He was shrewd, with “that ability to assess a circumstance and then to be creative and capitalize,” Roberts says. “He wants to work on things that are unsolved, and when solved, are transformational. You can see it in him—he gravitates toward that. He’s a tremendous leader; his leadership style is literally by example. He’s the kind of person you would follow into the fire. He’s not a big ‘rah rah’ kind of guy. He’s still motivational and just [because of] his purpose, his intent and his depth.” Controlling the battery recycling market Nine years later, the company—now having raised $2.25 billion from investors ranging from Goldman Sachs to Nvidia’s NVentures—says that it is the largest recycler of lithium-ion batteries in the U.S. Some other startups in the young market have struggled, such as Li-Cycle, which filed for bankruptcy in 2025 as it dealt with higher-than-expected costs for building its recycling hub and slower-than-expected demand for materials for EVs, along with falling prices for battery materials that make recycling less profitable. Ascend Elements, another competitor, lost a Department of Energy grant shortly after The President took office and filed for bankruptcy last month. Some legacy players remain, like Cirba Solutions, a 35-year-old company that was the first to recycle lithium-ion batteries. But Redwood has taken over the market, and says that it now controls roughly 90% of lithium-ion battery recycling in the U.S. At a facility in Nevada and a new factory in South Carolina, Redwood produces as much lithium and cobalt from recycled batteries as the country’s largest mines extract from the ground. Most battery materials are still produced outside the U.S., but Redwood’s aim—to create a domestic supply of critical materials through “urban mining”—is beginning to take shape. The company receives EV batteries through agreements with automakers—from Tesla and Rivian to Ford and General Motors—some of whom also make batteries for energy storage. At its recycling plant, Redwood also takes in a wide variety of other lithium-ion batteries of all sizes—from laptops and other electronics, even electric toothbrushes. (In San Francisco, the company recently started testing new bins to make it easier to collect old batteries directly from consumers.) In 2024, Redwood generated $200 million in revenue (the company declined to share more recent numbers). Though EV sales have slowed—meaning demand for EV battery materials is still growing, but not as quickly as projected—the company’s move to grid storage has protected its bottom line as the broader battery market continues to strengthen. Grid storage has emerged as a much larger source of demand for battery materials, making overall demand even more robust—and reinforcing Straubel’s realization that putting batteries to work on the grid could be even more lucrative than simply recycling their material Other companies had piloted similar ideas, but Straubel realized that it could make the concept economically feasible by creating a system that could manage hundreds or thousands of EV batteries of any type, from any manufacturer, in the same shipping container. After weatherizing the batteries and placing them in a simple layout on a field next to the tech that controls them, the system can perform like other large-scale batteries at half the cost. At first, the innovation might not seem obvious. After a battery is too depleted to be used in a car, you might assume that it needs to be recycled. “When we first started this, there was a little more skepticism, [with people] saying, ‘Okay, aren’t there enough new batteries? Why would you want to do this?’” Straubel says. Though the approach is unconventional, the tech is already proven. “Effectively, it’s a field of cars plugged into a centralized control system,” Lankton says. “Just take the vehicle away, the part with the wheels, and that’s what you have.” While some news stories called the energy storage business a pivot when it was announced in 2025, both parts of the business are connected. When EV batteries used for energy storage are depleted, Redwood will recycle the materials at that point. “It actually helps our recycling business, because we have more visibility and more predictability of the flow of material into material recovery and remanufacturing materials,” Straubel says. In the meantime, those same batteries are already being deployed with customers, storing energy on the grid and proving their value in real-world use. Fast power for the data center surge Like other data center developers, Colorado-based Crusoe has a major energy challenge. To build a new data center, it usually has to get in line with a utility to get approval to connect to the grid—a process that takes years because of bureaucracy and backlogs, and that doesn’t guarantee the company will be able to access power in the end. That’s why Crusoe became the first to partner on Redwood’s new battery solution: It offered a new, affordable option to build off-grid power for data centers, which meant the company didn’t need to wait for approval from the utility. In 2025, Crusoe and Redwood pioneered the first solar- and EV-battery-powered data center at Redwood’s headquarters in Nevada, using Crusoe’s own modular design for small shipping-container-size units with the data center infrastructure. “The constraint of going 100% renewable off-grid has always been the cost of the batteries,” says Crusoe cofounder Cully Cavness. By cutting the cost of battery storage roughly in half, Redwood has made 24/7 renewable power “economic and scalable,” he adds. (Cavness and Straubel met, somewhat improbably, on LinkedIn. Straubel, who has an insatiable appetite for new technology, reached out early in Crusoe’s existence to learn about the startup, and the companies saw the chance to work together years later.) With the traditional process, “the timelines just continue to widen,” Cavness says. “You’re five-plus years, and not even with certainty that at the end of that timeline you’ll have availability of power or approval to connect. By contrast, here we have very high certainty of the ability to do the thing we want to do.” It also avoids the supply chain disruptions that can slow the manufacture (or raise the price) of newly made batteries. Closing the Strait of Hormuz, for example, has already affected battery material manufacturing. “In this case, it’s a stream of batteries that already exists that are coming back out of use on the roads,” Cavness says. Because most EV batteries still have life in them and don’t immediately need to be recycled, Redwood currently has nearly 3 gigawatt-hours of batteries in inventory that are ready to deploy. As with other grid-scale batteries, the system can be used with any power source. Some data centers plan to use them with gas turbines or connect to the grid. Because power demand from a data center can quickly spike and fall, and turbines or the grid can struggle to adapt, batteries can help buffer those swings. But solar has advantages, “and not even just from a sustainability point of view,” Straubel says. “Solar is the cheapest and fastest energy that you can deploy today. The data shows that in every way you look at it. The one challenge, of course, is how you make it stable and how you buffer through the variability. That’s what our systems are deploying into.” And while data centers and their power needs occupy much of the news, utilities are also eager for Redwood’s help. At the company’s Nevada campus, Lankton and Straubel take turns playing the part of tour guide, showing customers how the system powers the modular data center 24/7. The usual questions are not whether it will work, but about things like whether there will be a supply of batteries over time. That’s not a concern, Straubel says. “It’s so much bigger even than our current ability to process,” he notes. “That almost keeps me up at night, because I’m, like, geez, we have to scale by 10 times just to be able to do what’s in the market now even if [EV] sales stayed flat for the next 10 years.” Rivian, the EV manufacturer, recently announced that it’s working with Redwood to install the system—using Rivian’s own used batteries—in a field next to the automaker’s factory in Illinois. By using the batteries to store energy from the grid when it’s cheapest, along with excess power from Rivian’s own on-site wind turbine and solar panels, the company can save significantly on electric bills. The system does take space; Rivian will install it near its wind turbine, on land that it wouldn’t otherwise use. “It’s a perfect application in a factory setting where we have the land available,” says Andrew Peterman, director of advanced energy solutions at Rivian. “An engineer’s engineer” At Redwood, as the technology begins to roll out more widely, the team continues to look for new ways to expand it. That includes Straubel, who still finds time to dive into hands-on engineering work. It’s similar to how he worked at Tesla, says Mateo Jaramillo, now CEO of Form Energy, who worked with Straubel in Tesla’s energy division. (Form Energy now makes “iron-air” batteries that can store energy for long periods, and that will be used in projects such as a new Google data center in Minnesota.) Straubel’s ideas grow out of his intense curiosity and the way he thinks. “He spends his time immersed in details, and he’s an engineer’s engineer,” Jaramillo says. “And so in many ways, the visionary aspects of what he does are a natural output of who he is.” At Tesla, that leadership style was notably different from Elon Musk’s. “JB is very much in the weeds on the front lines of any technical project, and on a sustained basis as well,” Jaramillo continues. “Elon, of course, was famous for literally jetting in and jetting out. That’s not JB’s approach. He’s consistently pushing the technical details and through the complexities of a project.” In a 2022 Time article, Jaramillo shared the story of Musk learning about a battery project years after it had been underway; Musk wanted it to stop, but Straubel kept it going without the CEO’s permission. “There were enough gaps in the organization that we could go get that done,” Jaramillo says. “And it speaks to the fact that JB and I were there every day pushing that project.” In his own work at Form Energy now, Jaramillo says he has drawn from what he learned watching JB hold a team to high standards, set aggressive goals, and dive into the details to make sure the results came out right. “All those things I saw JB do day in and day out,” he says. Now, Redwood is racing to meet the demand from data centers, utilities, and other customers for energy storage. By 2030, the company estimates that it’s feasible for end-of-life batteries to supply more than half of the energy storage market. Redwood is not without its own challenges. The company, which currently employs around 1,000 people, had two recent rounds of layoffs, which Straubel has pinned on expanding too fast. But in a note to employees in April, when 135 employees were laid off, Straubel wrote that the company had “successfully adapted to changes in the market that have bankrupted many of our competitors,” and that the materials part of the business was “well on its way to profitability.” The work “is very much a team sport now,” Straubel says. But he’s still closely involved in hands-on engineering work—Redwood employees describe him as still trading notes on design and implementation and building new prototypes on his own—and that’s continuing to push new innovation forward in a way that should let him again see the next energy pivot before the rest of the industry. “I love the engineering work, personally,” he says. “I derive a lot of fun from that. So A, it’s fun. And B, I do think it’s actually really useful to stay close to things and be able to kind of see where technology is going—and have an intuition on how these projects work.” View the full article

David Epstein, the #1 New York Times bestselling author of ​The Sports Gene​ and ​Range​, has a new book out called ​Inside the Box​. As with all of Epstein’s books, I really enjoyed it. He’s one of the best storytellers currently working in idea writing. There was one chapter in particular, however, that captured my attention as being uniquely well-suited to the themes we discuss here. It focused on the ideas of a somewhat eccentric physicist-turned-management guru named Eliyahu Goldratt, who in the 1980s popularized a framework for understanding industrial productivity that he dubbed the “theory of constraints.” Here’s how a non-profit established to promote Goldratt’s work summarizes it: “Every system has a limiting factor or constraint. Focusing improvement efforts to better utilize this constraint is normally the fastest and most effective way to improve profitability.” To borrow one of Goldratt’s examples, imagine you run a small assembly line that manufactures chicken coops following a step-by-step process – building the frame, attaching the roof, adding wire mesh, etc. Goldratt notes that the speed of this production is limited by whatever step is slowest; what he calls the “bottleneck.” Speeding up other steps of the process won’t increase the rate at which you produce chicken coops, as the bottleneck still determines the overall efficiency. If, for example, putting on the roof is the slowest step, then adding more workers or better tools to earlier steps will lead to more partially-constructed coops piling up at the roofing station. To speed up the line, you need to move more resources to the weakest link. Goldratt was primarily concerned with industrial production, but I think his theory of constraints provides insight into personal productivity, too. Something I’ve long written about is the reality that many digital productivity tools paradoxically make us busier, rather than better at our jobs. Goldratt’s theory helps explain why. When we deploy a digital tool like email to speed up communication, or generative AI to create (sloppy) slide presentations quickly, we don’t automatically become better at our jobs. If these steps don’t improve the bottleneck in our process – the key link where the real value is produced – then, as in the chicken coop example, they’re just as likely to create pile-ups and distraction, without actually boosting our true productivity. This helps explain why ​email ended up an accidental disaster​, and the early returns on ​AI office tools have been mixed​ at best. The theory of constraints implies a different way of thinking about getting better at our jobs. Don’t seek speed, or efficiency, or the avoidance of hard things. What ultimately matters more than anything else is how well we perform the deep steps that actually move the needle. The post On Bottlenecks and Productivity appeared first on Cal Newport. View the full article

Small business accounting involves systematically tracking and analyzing financial transactions to maintain a company’s financial health. It covers vital activities like managing sales, expenses, and payroll, which are fundamental for compliance with tax regulations. Comprehending how to generate key financial statements can aid your decision-making and strategic planning. As you consider the implications of effective accounting practices, you’ll find that they not merely guarantee compliance but likewise provide a competitive edge in the marketplace. Key Takeaways Small business accounting involves tracking and analyzing financial transactions to assess a company’s fiscal health and profitability. It includes managing purchases, sales, expenses, payroll, and ensuring compliance with tax regulations. Key financial statements generated include income statements, balance sheets, and cash flow statements for performance evaluation. Accurate financial records provide insights for informed decision-making and enhance transparency for stakeholders. Utilizing accounting software can streamline processes, reduce errors, and support efficient financial management. Definition of Small Business Accounting Small business accounting is the process of carefully tracking, recording, and analyzing financial transactions that reflect a company’s fiscal health. Comprehending accounting is fundamental for small business owners, as it encompasses managing purchases, sales, expenses, payroll, and other financial activities necessary for evaluating profitability. In small business accounting 101, you’ll learn how to translate numerical data into financial statements that communicate your business’s performance to stakeholders and regulators. This basic accounting knowledge is significant for compliance with tax regulations and for documenting assets and liabilities. A robust accounting system allows you to monitor growth and identify areas for improvement, ensuring accurate reporting for tax obligations. By excelling in these principles, you can make informed decisions that positively impact your business. Investing time in small business accounting paves the way for financial clarity, helping you navigate your company’s financial environment with confidence. Importance of Small Business Accounting Though many entrepreneurs focus on product development and customer acquisition, grasping the importance of accounting in small businesses is equally crucial for long-term success. Small business accounting helps you track and analyze financial transactions, determining your profitability and overall financial health. By mastering accounting basics for beginners, you can maintain compliance with regulatory requirements, ensuring timely tax filings and minimizing penalties. Accurate financial records provide insights into business performance, enabling you to make informed decisions about expenses, pricing, and investments. Monitoring cash flow is another critical aspect; effective accounting practices support your operations and future growth planning. With around 33.2 million small businesses in the U.S., having strong accounting knowledge can give you a competitive edge. Key Components of Small Business Accounting In small business accounting, tracking financial transactions is crucial for comprehending your company’s performance. You’ll generate key profitability analysis statements, like income statements and balance sheets, to assess how well your business is doing financially. Financial Transaction Tracking Effective financial transaction tracking is a cornerstone of successful small business accounting, as it involves recording every purchase, sale, expense, and payroll entry with great care. Mastering these accounting basics for students is crucial, whether you’re taking an accounting 101 class or managing your own business. Accurate tracking guarantees compliance with tax regulations, aids in documenting assets and liabilities, and supports audits or financial reviews. Many businesses use accounting software for efficiency and to minimize manual errors. Below is a simple overview of tracking methods: Method Advantages Disadvantages Accounting Software Efficiency Cost Spreadsheets Accessibility Error-prone Traditional Ledgers Simplicity Time-consuming Regular transaction tracking is important for preparing tax returns and monitoring growth. Profitability Analysis Statements How can comprehension profitability analysis statements improve your small business’s financial strategy? These vital reports, like income statements, summarize your revenues and expenses, helping you determine net profit or loss over a specific period. Key components include gross profit, calculated by subtracting the cost of goods sold from total revenue, which offers insights into production efficiency. Moreover, operating profit, or earnings before interest and taxes (EBIT), reveals the profitability of your core operations, important for evaluating performance. The net profit margin, found by dividing net profit by total revenue, indicates the percentage of revenue that remains as profit after all expenses. Regularly generating these statements enables you to identify trends, make informed decisions, and communicate effectively with stakeholders. Tracking Financial Transactions Tracking financial transactions is a fundamental aspect of small business accounting that can’t be overlooked. You need to keep records of sales, purchases, expenses, and payroll to maintain accurate financial documentation. This organization is vital for complying with IRS requirements, which demand receipts and financial statements. By accurately tracking these transactions, you can monitor cash flow, assess profitability, and pinpoint areas needing improvement. Regularly reconciling financial records with bank statements is important for identifying discrepancies and ensuring accuracy. This process allows you to spot errors before they escalate into larger issues. Although manual tracking is possible, using accounting software can greatly streamline your efforts, automating data entry and providing real-time insights into your financial health. Benefits of Accounting Software While managing a small business can be overwhelming, utilizing accounting software offers significant benefits that simplify financial management. First, it automates financial tasks, reducing manual errors and saving you time, so you can focus on core operations. Generating financial reports becomes straightforward, allowing you to create income statements, balance sheets, and cash flow statements quickly and efficiently. Many accounting software options, like QuickBooks Online, come with integrated payroll features, ensuring accurate tax withholdings and employee payment management. Furthermore, using accounting software streamlines tax processes, helping you comply with IRS documentation requirements, which ultimately results in more accurate and timely tax filings. Moreover, it improves your financial decision-making by providing real-time insights and analytics, enabling you to track expenses, revenue, and cash flow effectively. Establishing a Bookkeeping System Establishing a bookkeeping system is vital for any small business aiming for financial clarity and stability. You’ll need to choose between single-entry and double-entry accounting methods, as each has its advantages for tracking transactions. Decide whether cash-basis or accrual-basis accounting fits your needs, since this choice affects when you recognize revenues and expenses, influencing your financial reports and tax obligations. Consider using accounting software like QuickBooks or FreshBooks to simplify your bookkeeping tasks, automate data entry, and provide integrated reporting tools. Regularly reconciling your bank statements with recorded transactions is important for maintaining accuracy and spotting discrepancies. Finally, categorize your income and expenses by creating a chart of accounts that organizes financial data into assets, liabilities, revenue, and expenses. This organization will facilitate better financial analysis and support informed decision-making for your business. Understanding Financial Reports Comprehending financial reports is vital for your business success, as they provide insights into your financial health. Key statements like the income statement, balance sheet, and cash flow statement summarize important data about revenues, expenses, and cash movements. Importance of Financial Reports Financial reports play a crucial role in the success of small businesses, as they provide insights into profitability, financial position, and liquidity through key documents like income statements, balance sheets, and cash flow statements. Regularly reviewing these reports helps you identify trends, make informed decisions, and adjust strategies for better financial performance. Accurate financial reporting guarantees compliance with regulations and transparency for stakeholders, including investors and creditors. Furthermore, financial reports track key performance indicators (KPIs) that highlight areas for improvement and guide resource allocation. Timely generation of these reports is essential for effective cash flow management and preparing accurate tax filings, avoiding penalties, and guaranteeing compliance. Financial Report Type Purpose Income Statement Assess profitability Balance Sheet Evaluate financial position Cash Flow Statement Analyze liquidity KPI Tracking Identify areas for improvement Compliance Ensure adherence to regulations Key Financial Statements Explained During the process of exploring the domain of small business finance, you’ll encounter three key financial statements that serve as vital tools for evaluating your business’s health. The balance sheet provides a snapshot of your assets, liabilities, and equity at a specific time, allowing you to assess financial stability. Next, the income statement, or profit and loss statement, summarizes your revenues, expenses, and net income over a period, helping you evaluate profitability. Finally, the cash flow statement tracks the inflow and outflow of cash categorized into operating, investing, and financing activities, fundamental for comprehending liquidity. Regularly reviewing these statements enables you to identify trends, make informed decisions, and maintain compliance with financial reporting regulations. Frequency of Report Generation Generating financial reports regularly is crucial for small businesses aiming to stay on top of their performance. You should prioritize generating reports at different intervals to maintain a clear financial picture. Consider the following frequency recommendations: Monthly Reports: Track cash flow and operational efficiency to make timely adjustments. Quarterly Reports: Prepare income statements and balance sheets to assess profitability and financial position over time. Annual Reports: Summarize your financial activities, including the cash flow statement, for tax preparation and compliance. Tax Preparation and Compliance During managing your small business’s finances, comprehension of tax preparation and compliance is fundamental for minimizing your tax liability and avoiding penalties. Accurate bookkeeping helps you track all financial transactions, guaranteeing you report income and expenses correctly as you identify deductible expenses. This can considerably reduce your tax liability. To file your tax returns accurately and comply with IRS regulations, you’ll need significant documents like profit and loss statements and balance sheets. Understanding your tax obligations—federal, state, and local—is essential. Utilizing accounting software can automate tax calculations and guarantee timely filings. Furthermore, keeping organized records of receipts, invoices, and financial statements is crucial, as the IRS requires documentation to substantiate deductions and credits. Finally, engaging a certified accountant can guide you through complex tax laws, help maximize allowable deductions, and guarantee compliance with evolving regulations, making your tax preparation process more manageable and efficient. Resources for Small Business Accounting Support How can small business owners find the right resources to manage their accounting needs effectively? There are several valuable options available to help you gain the necessary skills and support. Coursera: Platforms like Coursera offer a variety of accounting courses that can help you improve your financial management skills and grasp fundamental accounting principles. Moreover, consider subscribing to the Oregon SBDC newsletter for updates on resources, tips, and relevant news. Utilizing accounting software like QuickBooks can as well streamline your processes, integrating payroll, invoicing, and expense tracking into one platform. Frequently Asked Questions What Is a Small Business Accounting? Small business accounting involves tracking and managing your financial transactions, such as sales and expenses. It helps you understand your business’s financial health by providing insights into profits and losses. You can use various methods, like accounting software or spreadsheets, to maintain accurate records. This process is vital for tax compliance, preparing financial statements, and making informed decisions about resource allocation. In the end, effective accounting supports your business’s growth and sustainability. What Type of Accounting Do Small Businesses Use? Small businesses typically use cash basis or accrual basis accounting. With cash basis, you recognize revenues and expenses only when cash changes hands, making it simpler for businesses with revenues under $5 million. https://www.youtube.com/watch?v=DpbXWP8fLbc Conversely, accrual basis records transactions when they’re earned or incurred, providing a clearer financial picture. Many small businesses likewise rely on accounting software like QuickBooks, which supports both methods, helping you manage finances effectively according to your needs. How Much Would an Accountant Cost for a Small Business? Hiring an accountant for your small business can cost between $150 and $400 per hour, depending on their expertise and the complexity of services you need. Annually, you might pay between $1,000 and $5,000 for basic services like bookkeeping and tax preparation. Some accountants offer fixed monthly fees ranging from $200 to $1,000. If you’re looking to save, consider part-time bookkeepers or accounting software, which can lower your expenses considerably. Can You Do Your Own Small Business Accounting? Yes, you can manage your own small business accounting, especially if your finances are straightforward. By using accounting software like QuickBooks, you can automate tasks such as invoicing and expense tracking. Nonetheless, it’s crucial to stay organized and understand basic accounting principles. This approach can save you money, but it likewise requires a commitment to regularly record transactions and prepare financial reports. As your business grows, consider hiring a professional for complex needs. Conclusion In summary, small business accounting is essential for managing your company’s financial health. By tracking transactions and generating key reports, you gain insights that inform important decisions. Establishing a solid bookkeeping system and utilizing accounting software can streamline your processes, making compliance with tax regulations easier. Comprehending financial reports helps you assess performance and plan strategically. For ongoing support, various resources are available to assist you in mastering small business accounting and enhancing your competitive edge. Image via Google Gemini This article, "What Is Small Business Accounting?" was first published on Small Business Trends View the full article

Small business accounting involves systematically tracking and analyzing financial transactions to maintain a company’s financial health. It covers vital activities like managing sales, expenses, and payroll, which are fundamental for compliance with tax regulations. Comprehending how to generate key financial statements can aid your decision-making and strategic planning. As you consider the implications of effective accounting practices, you’ll find that they not merely guarantee compliance but likewise provide a competitive edge in the marketplace. Key Takeaways Small business accounting involves tracking and analyzing financial transactions to assess a company’s fiscal health and profitability. It includes managing purchases, sales, expenses, payroll, and ensuring compliance with tax regulations. Key financial statements generated include income statements, balance sheets, and cash flow statements for performance evaluation. Accurate financial records provide insights for informed decision-making and enhance transparency for stakeholders. Utilizing accounting software can streamline processes, reduce errors, and support efficient financial management. Definition of Small Business Accounting Small business accounting is the process of carefully tracking, recording, and analyzing financial transactions that reflect a company’s fiscal health. Comprehending accounting is fundamental for small business owners, as it encompasses managing purchases, sales, expenses, payroll, and other financial activities necessary for evaluating profitability. In small business accounting 101, you’ll learn how to translate numerical data into financial statements that communicate your business’s performance to stakeholders and regulators. This basic accounting knowledge is significant for compliance with tax regulations and for documenting assets and liabilities. A robust accounting system allows you to monitor growth and identify areas for improvement, ensuring accurate reporting for tax obligations. By excelling in these principles, you can make informed decisions that positively impact your business. Investing time in small business accounting paves the way for financial clarity, helping you navigate your company’s financial environment with confidence. Importance of Small Business Accounting Though many entrepreneurs focus on product development and customer acquisition, grasping the importance of accounting in small businesses is equally crucial for long-term success. Small business accounting helps you track and analyze financial transactions, determining your profitability and overall financial health. By mastering accounting basics for beginners, you can maintain compliance with regulatory requirements, ensuring timely tax filings and minimizing penalties. Accurate financial records provide insights into business performance, enabling you to make informed decisions about expenses, pricing, and investments. Monitoring cash flow is another critical aspect; effective accounting practices support your operations and future growth planning. With around 33.2 million small businesses in the U.S., having strong accounting knowledge can give you a competitive edge. Key Components of Small Business Accounting In small business accounting, tracking financial transactions is crucial for comprehending your company’s performance. You’ll generate key profitability analysis statements, like income statements and balance sheets, to assess how well your business is doing financially. Financial Transaction Tracking Effective financial transaction tracking is a cornerstone of successful small business accounting, as it involves recording every purchase, sale, expense, and payroll entry with great care. Mastering these accounting basics for students is crucial, whether you’re taking an accounting 101 class or managing your own business. Accurate tracking guarantees compliance with tax regulations, aids in documenting assets and liabilities, and supports audits or financial reviews. Many businesses use accounting software for efficiency and to minimize manual errors. Below is a simple overview of tracking methods: Method Advantages Disadvantages Accounting Software Efficiency Cost Spreadsheets Accessibility Error-prone Traditional Ledgers Simplicity Time-consuming Regular transaction tracking is important for preparing tax returns and monitoring growth. Profitability Analysis Statements How can comprehension profitability analysis statements improve your small business’s financial strategy? These vital reports, like income statements, summarize your revenues and expenses, helping you determine net profit or loss over a specific period. Key components include gross profit, calculated by subtracting the cost of goods sold from total revenue, which offers insights into production efficiency. Moreover, operating profit, or earnings before interest and taxes (EBIT), reveals the profitability of your core operations, important for evaluating performance. The net profit margin, found by dividing net profit by total revenue, indicates the percentage of revenue that remains as profit after all expenses. Regularly generating these statements enables you to identify trends, make informed decisions, and communicate effectively with stakeholders. Tracking Financial Transactions Tracking financial transactions is a fundamental aspect of small business accounting that can’t be overlooked. You need to keep records of sales, purchases, expenses, and payroll to maintain accurate financial documentation. This organization is vital for complying with IRS requirements, which demand receipts and financial statements. By accurately tracking these transactions, you can monitor cash flow, assess profitability, and pinpoint areas needing improvement. Regularly reconciling financial records with bank statements is important for identifying discrepancies and ensuring accuracy. This process allows you to spot errors before they escalate into larger issues. Although manual tracking is possible, using accounting software can greatly streamline your efforts, automating data entry and providing real-time insights into your financial health. Benefits of Accounting Software While managing a small business can be overwhelming, utilizing accounting software offers significant benefits that simplify financial management. First, it automates financial tasks, reducing manual errors and saving you time, so you can focus on core operations. Generating financial reports becomes straightforward, allowing you to create income statements, balance sheets, and cash flow statements quickly and efficiently. Many accounting software options, like QuickBooks Online, come with integrated payroll features, ensuring accurate tax withholdings and employee payment management. Furthermore, using accounting software streamlines tax processes, helping you comply with IRS documentation requirements, which ultimately results in more accurate and timely tax filings. Moreover, it improves your financial decision-making by providing real-time insights and analytics, enabling you to track expenses, revenue, and cash flow effectively. Establishing a Bookkeeping System Establishing a bookkeeping system is vital for any small business aiming for financial clarity and stability. You’ll need to choose between single-entry and double-entry accounting methods, as each has its advantages for tracking transactions. Decide whether cash-basis or accrual-basis accounting fits your needs, since this choice affects when you recognize revenues and expenses, influencing your financial reports and tax obligations. Consider using accounting software like QuickBooks or FreshBooks to simplify your bookkeeping tasks, automate data entry, and provide integrated reporting tools. Regularly reconciling your bank statements with recorded transactions is important for maintaining accuracy and spotting discrepancies. Finally, categorize your income and expenses by creating a chart of accounts that organizes financial data into assets, liabilities, revenue, and expenses. This organization will facilitate better financial analysis and support informed decision-making for your business. Understanding Financial Reports Comprehending financial reports is vital for your business success, as they provide insights into your financial health. Key statements like the income statement, balance sheet, and cash flow statement summarize important data about revenues, expenses, and cash movements. Importance of Financial Reports Financial reports play a crucial role in the success of small businesses, as they provide insights into profitability, financial position, and liquidity through key documents like income statements, balance sheets, and cash flow statements. Regularly reviewing these reports helps you identify trends, make informed decisions, and adjust strategies for better financial performance. Accurate financial reporting guarantees compliance with regulations and transparency for stakeholders, including investors and creditors. Furthermore, financial reports track key performance indicators (KPIs) that highlight areas for improvement and guide resource allocation. Timely generation of these reports is essential for effective cash flow management and preparing accurate tax filings, avoiding penalties, and guaranteeing compliance. Financial Report Type Purpose Income Statement Assess profitability Balance Sheet Evaluate financial position Cash Flow Statement Analyze liquidity KPI Tracking Identify areas for improvement Compliance Ensure adherence to regulations Key Financial Statements Explained During the process of exploring the domain of small business finance, you’ll encounter three key financial statements that serve as vital tools for evaluating your business’s health. The balance sheet provides a snapshot of your assets, liabilities, and equity at a specific time, allowing you to assess financial stability. Next, the income statement, or profit and loss statement, summarizes your revenues, expenses, and net income over a period, helping you evaluate profitability. Finally, the cash flow statement tracks the inflow and outflow of cash categorized into operating, investing, and financing activities, fundamental for comprehending liquidity. Regularly reviewing these statements enables you to identify trends, make informed decisions, and maintain compliance with financial reporting regulations. Frequency of Report Generation Generating financial reports regularly is crucial for small businesses aiming to stay on top of their performance. You should prioritize generating reports at different intervals to maintain a clear financial picture. Consider the following frequency recommendations: Monthly Reports: Track cash flow and operational efficiency to make timely adjustments. Quarterly Reports: Prepare income statements and balance sheets to assess profitability and financial position over time. Annual Reports: Summarize your financial activities, including the cash flow statement, for tax preparation and compliance. Tax Preparation and Compliance During managing your small business’s finances, comprehension of tax preparation and compliance is fundamental for minimizing your tax liability and avoiding penalties. Accurate bookkeeping helps you track all financial transactions, guaranteeing you report income and expenses correctly as you identify deductible expenses. This can considerably reduce your tax liability. To file your tax returns accurately and comply with IRS regulations, you’ll need significant documents like profit and loss statements and balance sheets. Understanding your tax obligations—federal, state, and local—is essential. Utilizing accounting software can automate tax calculations and guarantee timely filings. Furthermore, keeping organized records of receipts, invoices, and financial statements is crucial, as the IRS requires documentation to substantiate deductions and credits. Finally, engaging a certified accountant can guide you through complex tax laws, help maximize allowable deductions, and guarantee compliance with evolving regulations, making your tax preparation process more manageable and efficient. Resources for Small Business Accounting Support How can small business owners find the right resources to manage their accounting needs effectively? There are several valuable options available to help you gain the necessary skills and support. Coursera: Platforms like Coursera offer a variety of accounting courses that can help you improve your financial management skills and grasp fundamental accounting principles. Moreover, consider subscribing to the Oregon SBDC newsletter for updates on resources, tips, and relevant news. Utilizing accounting software like QuickBooks can as well streamline your processes, integrating payroll, invoicing, and expense tracking into one platform. Frequently Asked Questions What Is a Small Business Accounting? Small business accounting involves tracking and managing your financial transactions, such as sales and expenses. It helps you understand your business’s financial health by providing insights into profits and losses. You can use various methods, like accounting software or spreadsheets, to maintain accurate records. This process is vital for tax compliance, preparing financial statements, and making informed decisions about resource allocation. In the end, effective accounting supports your business’s growth and sustainability. What Type of Accounting Do Small Businesses Use? Small businesses typically use cash basis or accrual basis accounting. With cash basis, you recognize revenues and expenses only when cash changes hands, making it simpler for businesses with revenues under $5 million. https://www.youtube.com/watch?v=DpbXWP8fLbc Conversely, accrual basis records transactions when they’re earned or incurred, providing a clearer financial picture. Many small businesses likewise rely on accounting software like QuickBooks, which supports both methods, helping you manage finances effectively according to your needs. How Much Would an Accountant Cost for a Small Business? Hiring an accountant for your small business can cost between $150 and $400 per hour, depending on their expertise and the complexity of services you need. Annually, you might pay between $1,000 and $5,000 for basic services like bookkeeping and tax preparation. Some accountants offer fixed monthly fees ranging from $200 to $1,000. If you’re looking to save, consider part-time bookkeepers or accounting software, which can lower your expenses considerably. Can You Do Your Own Small Business Accounting? Yes, you can manage your own small business accounting, especially if your finances are straightforward. By using accounting software like QuickBooks, you can automate tasks such as invoicing and expense tracking. Nonetheless, it’s crucial to stay organized and understand basic accounting principles. This approach can save you money, but it likewise requires a commitment to regularly record transactions and prepare financial reports. As your business grows, consider hiring a professional for complex needs. Conclusion In summary, small business accounting is essential for managing your company’s financial health. By tracking transactions and generating key reports, you gain insights that inform important decisions. Establishing a solid bookkeeping system and utilizing accounting software can streamline your processes, making compliance with tax regulations easier. Comprehending financial reports helps you assess performance and plan strategically. For ongoing support, various resources are available to assist you in mastering small business accounting and enhancing your competitive edge. Image via Google Gemini This article, "What Is Small Business Accounting?" was first published on Small Business Trends View the full article

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