Forget Governments; Here Is The One Thing Entrepreneurs Must Do To Save The World

Well folks, things are starting to look pretty bleak out there.  As an optimist I want to believe the future is brighter than the past, but I am having a hard time sleeping at night and imagining the days ahead won’t be filled with economic strife.

Shall we review some basic facts:

The U.S. debt ceiling has been raised by trillions – simply meaning we are sinking further down the quicksand without any help of getting out.

Do you realize one trillion dollars is a thousand BILLION dollars?  This is really getting out of hand.  It is pretty sad to realize our World Economic Powerhouse is actually just like the 24 year old post college grad who is taking out (and maxing) another credit card just to pay off the creditor calling them on the phone, while not even remembering when the specific credit line in question was taken out.

S&P has downgraded the U.S. credit rating from AAA to AA+, an unprecedented action initiating a period of economic uncertainty around the world with no clear ending in site.

What happens when the world loses total faith in the United States?

The tremors of volatility in the stock markets has recently increased in magnitude, with numerous daily slides of more the 4%, sending mini-shocks of fear and loathing through the psyche of any shareholder.

Go ahead, take a look at what happend in the years following the 1929 market crash…  sound familiar?

Here are some stats on the impending recession; it’s a great (but long) article but really places things in perspective.  Choice quote:

So, I guess I am going out on a limb, without any help from an inverted yield curve, and saying that we will be in recession within 12 months, if we are not already in one. This will be unlike any recession we have seen, as there is not much that can be done, other than to just get through it as best we can. Sit down and think about your own situation and prepare.

So after you sit down and think about your own situation, what should you do?  Well, if you are an entrepreneur I have a thought…

Understand How Your Business Adds Value To The World

Every entrepreneur need to take a tough look in the mirror and ask themselves what it really means to be in business.  The most basic tenets of business are profits, losses and margins.   As an owner, if you are not bringing in more money (adding value) than you are spending (extracting value), you will sink.   One would think the most important of those 3 is profits – and I do generally agree with that position – yet that may be precisely why we are now in this economic mess.  It turns out that profit above all else ends up creating more losses all around.  This, in my opinion, has led to our current toilet bowl effect where regardless of what happens we are circling further and further out of control.

A few questions worth considering when looking in the mirror:

Am I making a positive difference in the world?

Does my business add value to the world?  Or does it just extract value?

How can my business create an order of magnitude more value than the current solution?

Where is the government wasting money and how could I provide a better and cheaper solution?

Understanding how and where you add value to the world is just the first step; illustrating how you add value to the world is where you must focus your time and energy.  Having some sort of value quotient (if that is even possible) is where businesses worth can be easily quantified.  People need to know how you make the world a better place (socially, economically, environmentally) so they can start to make healthier world choices.

Specifically, I am referring to the question:  Is the world economically healthier because company “X” exists?  If there is not a resounding yes from the outside, I am afraid we will continue down this toilet.

Apple is now pretty much the most valuable corporation in the world, but do they really add value to the world?  Controversial statement, yes.  But of course a valid question, since people spend quite a bit of money on their consumer products.  How about the next company, Exon Mobile?  How much value are they adding to the world?  Arguably, they aren’t just extracting oil from the world…  And remember, these are the most VALUABLE companies in the world today.

The only way out from this mess is going to be through entrepreneurial fortitude.  Governments worldwide have only proven they are inept and cannot figure out how to spend less money.  It seems rather than actually ‘governing’ towards a solution, they are just ‘spending towards another problem’.   This does not work and we are now realizing how much we are in over our heads.   The world will be saved by entrepreneurial fortitude and finding a more efficient method to solving a societal problem.

The world is in desperate need right now of  smarter, more courageous, and innovative entrepreneurs who are not out to exploit current inequities but looking to reshape and save the world so their children will have something to actually live for.

@jnickhughes

Image courtesy of Flickr user Amagill.

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Consero Is Like The Cool Group In High School, You Secretly Want To Be Invited

Paul Mandell found he was going to quite a few conferences each year yet he was leaving most of them feeling like he was not getting much value.   He felt they lacked timely content, as well as a useful networking experience.   As he looked around, it occurred to him maybe more people felt the same way.  He started to think about how to do these events better, how could he re-create the events industry so more value could come out of each event.  And just as any great entrepreneur would do, he decided to do something about it.

Founded in 2010, Consero is a leader in creating industry-specific events for senior-level executives.

Consero Forums are best known for offering a sophisticated learning environment with high-level content, as well as invaluable networking opportunities driven by Consero’s interactive, invitation-only format.

Although not a technology company, their innovative approach on transforming an established industry has caught my attention.   By forming advisory boards of executives from major corporations, as well as featuring a team of event veterans, Consero is developing the highest level of quality, timely content for each one of its Forums.

Attendees can expect an invitation only environment, meaning anyone attending was asked to be there for a certain reason.  This benefits them by providing a more efficient way to connect with other influential attendees and vendors.

In addition to content, Consero Forums are built to feature a valuable networking environment designed to stimulate new business for its innovative sponsors.  “The networking is far more superior, productive and the events are very focused on solid content” says CEO Mandell.   For example, Consero focuses on ensuring that sponsors meet with the most qualified executives who have expressed a demand for services and solutions based on their current and future initiatives.

The event industry is a $12.5 billion market that, at this point, has seen little to no change in the last 20 or 30 years.  I would say that screams “HUGE POTENTIAL” louder than as any standing ovation I have ever heard.

In just over a year, the company has experienced positive growth, including a 400 percent increase in revenues. In 2011, Consero will be hosting seven events, and they plan to double that number in 2012.  They recently moved into an expanded headquarters and are also doubling their staff this year.

A Lesson In Finding A Need

Headquartered in Bethesda, Maryland, Consero’s new model for events answers all of the pressing needs. At a Consero Forum, every attendee is in the top tier of management with respect to his/her company, and the unique format of intimate conference sessions, one-on-one meetings, and roundtable discussions looks to raise the bar on senior-level networking, thought leadership exchange, and collaborative learning altogether.

They recruit speakers who are industry insiders—people who have first-hand knowledge of today’s most pressing business issues.  They place a lot of emphasis on finding the right people, “to identify the right individuals, we spend a lot of time researching industries, news, and service offerings. Our team also brings to the table in-depth relationships with a variety of high-level executives and solution providers built over years in business.”

Currently the event topics include the legal industry, state and local Gov IT and customer experience.  But, it’s only a matter of time before your industry gets the Invitation Only bug.

In fact, just today they are announcing the 2011 Legal Technology Forum, which is taking place September 18 – 20, 2011 in San Diego, California at the Loews Coronado Bay Hotel.  Jessica Druckman, Founder and Vice President for Program Development of Consero, says, “The program for the Legal Technology Forum will focus on educating legal professionals on today’s most pressing issues, including the most effective ways to protect confidential company information in the age of social media, as well as how to leverage new technologies and processes to ensure efficient legal department management.”

The long term vision is to bring Consero’s model to other vertical niches where it can help improve the experience for both executives and solution providers.  Examples include Consero’s recent Intellectual Property Management & Monetization Forum as well as our upcoming Customer Experience Forum.   Additional Forums for each niche will be announced shortly as well as plans for overseas events.

Going All In

“”I started Consero with about $1,000,000 of personal savings and a home equity loan” says Paul.  “I also brought in experienced event veterans William Card and Jessica Druckman, who have been invaluable assets in the company’s early success.”  Among the lessons Paul learned in the early going include:

  1. Focus on attracting the best employees at every level of the organization. This is essential in any start-up’s long-term success.
  2. Learn every aspect of the financial side of the business. This knowledge is critical in long-term planning and helps to avoid cash-flow issues – especially for entrepreneurs who do not have a strong business accounting background.
  3. Delegate. As the founder, I knew it was necessary to bring in the right support team so I can free myself from administrative tasks associated with launching a company.

Below is the Consero executive team:

Paul Mandell is a Founder and the Chief Executive Officer of Consero. In this role, Mr. Mandell provides strategic leadership for the company with a rigid focus on excellence mat every level of the business.

William Card is a Founder and the Vice President for Business Development of Consero. In this role, he is responsible for working with solution providers and partners who seek to benefit from Consero’s world-class Forums.

Jessica Druckman is a Founder and the Vice President for Program Development of Consero. Ms. Druckman is responsible for conducting market research, writing program agendas, and organizing the faculties for Consero Forums. Through carefully-planned programming, Ms. Druckman ensures that Consero delegates leave each Forum with
practical business skills that spur corporate growth.

@jnickhughes

If You Think Your Weird Startup Deserves $500,000 – Read This Now!

Lighter Capital, a recently re-branded funding option, describes themselves as Entrepreneurs Funding Entrepreneurs.  They just announced they have up to $500,000 available and are looking to seed a “weird and Explosive” company.

According to Randall Lucas, Finance + Product, ” We’re a “lighter” approach to capital than the marble and granite of the banks, plus we try to keep a “lighter” attitude.  We help growing small businesses accelerate with access to small but meaningful amounts of capital, typically $100-500k.”  

They have a revenue-based lending structure which allows us to fund companies more quickly than banks and the structure is more flexible for entrepreneurs.  “We don’t buy shares, and we don’t look for traditional loan structures — instead, we buy a small % of the company’s revenues, up until some cap, as our repayment stream.  So we share the risks with the entrepreneur, and we are 100% aligned with the company on juicing revenue growth.”

I love their approach to investing in startups.   The problem they are attacking is the limited access to capital problem most startups face.  First, banks aren’t lending and the traditional debt structure is too restrictive during economic uncertainty (ie: can’t commit to debt payments if you aren’t sure about sales outlook).

Also, the VC model really only works for the “home-runs” so this approach makes sense for great businesses that make money but aren’t swinging for the fences. “We think businesses that make $1-5m/ year in revenue are great businesses and our long term vision is to make it super fast and simple for those businesses to get capital.”  They believe a company that’s doing $1 or $2 or $3 M in revenue, with potential to go to $10 M or $20M, is still an awesome opportunity and deserves access to capital.

“Our ultimate vision is to hook up this market opportunity with our technology back-end — and to help make “Capital-as-a-Service” a reality for these companies”, says Andy Sack, CEO.  In other words — the “lighter” version of going to meet 30 different VCs in Silicon Valley, or or putting on a tie to go to meet a banker, is to be able to apply online, from your couch, in your boxers, and get funded on a Sunday afternoon.

The idea is starting to spread.  Press, social media, brokers, partners, and referral networks of friends and business contacts are starting to talk about Lighter Capital (formerly RevenueLoan) as leaders in the Revenue-based Finance market.

Lighter Capital is aggressively putting their capital to work.  They’ve already put $1.1 M out in a number of investments, so they are already generating revenue and actively investing the rest of our first $6 M in capital.

Currently we get most of our deals through word of mouth and organic traffic on our site, but with the rebrand we’re really pushing to fund companies completely online

The Team – it’s a really entrepreneur-based team, they’ve all worked for startups before so they’ve seen the funding process first-hand.We are a pretty wacky, fun bunch … and not just saying that” says Randall.

If you are a startup and think you deserve $500,000, go here right now!

Ice-cream Is Great, But Utilities Make The World Go Around

Lately I have had a recurring theme running through my head – “didn’t I see that startup idea before, only with a different name?  Aren’t there more than a few startups doing this same  little sharing thing? ”  I believe we are witnessing another “bubblish” period of time, with valuations of young startups skyrocketing and investment money flowing like wine from Napa Valley.  When money starts flying from every which pocket so do the various copy cats and so called “Groupon’s for X industry” and “Airbnb for Y category” startups.  Ironically, creative innovation declines as similar business ideas get most of the available investment funding; I am not sure this is the best thing for the future of our economy.

Twitter co-founder Biz Stone recently commented “Everybody said ‘Twitter’s useless.’ To which my co-founder Evan Williams said, ‘Well so’s Ice Cream, you want us to ban Ice Cream and all joy?’ We said, ‘Screw that. We’ll just keep working on it.’”

This ice cream statement is referring to some people thinking Twitter and other social sharing applications are just petty fun but don’t serve much purpose and are not very important to the development of our economy.  Others believe the future lies in developing new technologies around people and infusing social in everything we do.  So who is right?

Well, let me go on record saying I beleive the application of social technology is indeed impacting our world and will continue to transform our society.  Yet, I will add a caveat to Stone’s point of view – ice cream is great, but ultilties make the world go around.  Ironies aside as Twitter becomes a utility to web users around the world, it ended up solving a problem we didn’t know we had at the time, which happened to be discovering people and distributing information.  But how many social companies are actually created with a strong economic value proposition in mind?  I think the point is very clear – when evaluating business and startup ideas, entrepreneurs and investors would be wise to focus their attention on things that solve a very strong need and plug into society’s daily function if they want to increase their odds of success.

Take a look at the following list below and observe what they all have in common:

Natural gas

Electricity

Telephone

Water

Old Steam Companies

hydraulic power

public transit

postal services

Public Infrastructure

All those industries and the associated companies all have one major thing in common – they are a public utility.  Being a public utility implies they serve a very obvious consumer need and  are frequently used products and services (speaking generally from a consumer point of view).  As a business they should have no problem developing a customer base, since their product is a need all consumers inherently have.

I suggest entrepreneurs think in absolute terms when developing their products or services.  Using an understanding of where technology is going, founders can anticipate aspects of everyday life which can be turned into utilities.  Here are a few things to consider:

  • What types of problems and challenges are consumers facing each day?
  • What problems are still served with older technological paradigms and are in need of more efficient solutions?
  • What types of industries have become ‘utilities’ and why?
  • What consumer activities seem to be more common place and will become utilities tomorrow?
Below are just a few examples of entrepreneurs viewing business as a utility.  Not an exhaustive list by any means, but they can serve as examples of clever business strategy and positioning.

 Schwab  and Wharton –  Steel

Steel was foundational utility as our country expanded from a small “startup” into the economic powerhouse of the 20th century.  Due to the expansion of the steel industry, railways, buildings, cars and other major industries advanced.  From wikipedia:

The Bethlehem Steel Corporation ascended to great prominence in American industry, installing the revolutionary grey rolling mill and producing the first wide-flange structural shapes to be made in America. These shapes were largely responsible for ushering in the age of the skyscraper and establishing Bethlehem Steel as the leading supplier of steel to the construction industry.

Edison – Electricity

Electricity, ala Thomas Edison, brought light to our night as well as power to our life.  Imagine a world without electricity… it is almost impossible to live in the 21st centuty (at least in the developed world) without this incredible utility.  Think about all the other multi-billion dollar industries that have been born and brought forth because electricity became widespread technology everyone could use.

Ford – Automobile

Although Henry Ford did not invent the automobile, he brought it (and mass manufacturing) to the general population.  With the introduction of the affordable car, consumers were able to travel more than a couple miles to spend their hard earned money, a transforming affect on the young US economy.  Commercial malls, retail centers, Supermarkets and many other industries were born from the advent of the automobile.  From the book American Entrepreneur:

Autos fundamentally changed transportation from a collective undertaking, whether in boats or railcars, to a principally individual experience.  Cars represented independence, not only freeing people from the confines of the city but from restrictions imposed by a particular geographic region. 

Gates – Software

Bill Gates had a vision – a computer on every desk!  Unofficially, he has achieved his vision and then some.  Shouldn’t it now be referred to as ‘a computer in every hand/pocket’?  But, who is keeping score…  Gates and Microsoft built the software found in almost all computers available, bringing to life the PC  revolution and birthing the connected world we live in today.  Productivity of Private, Public as well as Personal lives has greatly increased because of the software industry Gates created.

Zuckerberg – Social networks

As web connected devices continue to drive our daily activities, no one company has a better position to lead the charge in our new world as does Facebook.  Mark Zuckerberg, at a ripe young age of 19, saw we would interact with devices, the web and people around the world in a whole new way.  In creating and growing Facebook, he established a platform users now consider a daily communications tool.  What can be built off it still mostly remains a mystery, but his vision of a utility is quite clear.

As a brieft list, these visionary individuals are amongst many others who transformed our world through groundbreaking businesses.  Importantly, all of them viewed their concepts through a utilitarian eye, observing where human life currently had a problem and how their company could offer a solution.  Find a need and fill it.  Serve a strong purpose in consumers’ everyday life.  Have a vision of a wide-spread platform, or a unique position where a multitude of new industries can be spawned from your one idea.  I believe that is the best position to start with when evaluating a new business venture.

@jnickhughes

Image courtesy of Flickr user Daniele Sartori.

Branding – Most Important But Usually Overlooked

Branding is one of the most important aspects of building a company (or persona) but it is so often overlooked.  Consider what Larry Popelka recently wrote:

Most consumers no longer shop for products. They shop for a company. With a plethora of product choices, it has become far too difficult and time-consuming to attempt to evaluate each offering. It is much easier to determine if the company you’re buying from shares your values and is likely to provide a good experience.

As a consumer, I most definitely agree with Larry.  How can you take the time to evaluate each product choice to determine the best quality, best price and most environmentally friendly?  You can’t, it’s impossible.   This is why Branding has become so important, it’s basically a short cut and a time saver to help us make buying decisions.

I touched on this in an earlier post positioning Apple vs Microsoft.  I focused mostly on how the leadership differences between Steve Jobs and Steve Ballmer is determining the direction of each company.  Yet, included in that equation is the respective brands they have built.

Apple – sleek, stylish, different, consumer friendly, trendy.

Microsoft – Techy, corporate, windows, software, stiff.

Although both are great (and hugely profitable) companies, the brands could not be any more different.  In the previous post I go to great lengths and in detail as to who is the better bet for the future.  It’s all about the Brand.

This can also apply when building a personal brand.  There are millions and millions of people in the work force, and quite frankly, they are all your competition.   When 100 people apply for a position or a board of directors is evaluating 5 executives looking for one to become the new CEO, personal branding and what each person is known for will be a huge influence and make the difference between receiving an offer or not.  This is one of the main reasons I have started to write and reach out to so many different people in the technology and startup communities.  I understand I must work just as hard to build my personal brand – what other people believe I am to be – as I am working to build a company brand.  I know it will be a difference maker sometime in the near future.

Lessons for founders and entrepreneurs:

  • Define your Brand; determine what you are and what you stand for as an executive and as a company
  • Describe it in detail but simplify the meaning for people so they will remember you
  • Align your Brand and your market positioning to connect with your target market
  • Connect your Brand with a deeper consumer purpose

Image courtesy of Flickr user NiallKennedy.

Are You Protecting The Past or Creating The Future?

It’s a simple question but has huge ramifications.

Protecting the past means you are holding onto the past, looking backward worrying about how to preserve what you have.  The is reactive and will not give you the edge needed to be successful.

  • Newspapers are protecting their old antiquated ways to distribute information
  • The music labels are protecting their rights to music distribution, sinking the industry
  • Traditional book stores tried to preserve their old ways of distributing books, and lost to Amazon

Creating the future means you are always forward thinking; searching and thinking for new ways to compete and produce in your industry.  This is proactive and will lead to breakthroughs.

  • Information networks like Twitter looked forward and figured out how to serve people real-time news and information
  • Apple understood people wanted to purchase on track at a time and integrate the entire experience into itunes
  • Amazon looked ahead to find out people want a more simple reading experience, and created the Kindle.

The direction your neck is pointed will determine your direction in life.  Choose wisely.

A Response To ‘Being The United States of Idiocracy’

I recently wrote an article titled Did We Just Become The United States of Idiocracy?, which was published both on this site as well as Business Insider.  It is a poignant piece, treading lightly but on a topic that should be worrisome to Americans- the private investment sector giving more attention and money to trivial products and companies while education and healthcare continue to wither on the vine.  Here is thought provoking comment from a Business Insider reader I felt would be great to share.

Interesting article. I also have marveled at the amount of talent and energy being thrown at really trivial things involving the Internet or mobile phones or other toys. I attribute this to the precarious imbalance between investors and producers. The investors have never held so much power and been so dominant in determining the economy. Yet, that is an unstable position, since it is producers that are the real source of power and activity. For example, young working people are producers – they don’t have money to invest. People on pensions are investors; they don’t produce anything but live off of the production of others. The people in the streets in the Arab countries and Greece are the producers of those countries, and the power they are fighting is the investors.

Investors add value to a capitalist economy by directing productive activity in an efficient manner. The current world imbalance consists of a very large amount of investment capital, which is remarkable already, but even more remarkable for the stupidity of that capital. Capital is managed for the good of society not by a dictator but by the risks of investment. But our Fed in its infinite corruption has decided on a new mandate that no investor should ever lose money, no matter how stupid or inappropriate their investment.

Thus the fools who lent Greece money, which is a purely absurd loan that deserves to lead to poverty for whoever approved that loan, these fools will be bailed out. This makes today’s investor class the stupidest of such that have existed in recent history. There is no possible penalty to risk; the Fed has stated a world-wide policy of Too Big To Fail which seems to include all investors and all investments in its complicated web. Thus the traditional positive contribution of the investor class has flown out the window. Rather than rational distribution of production, they now produce irrational and foolish distribution of production. There is no down-side to risk, all risk is good risk, all investors big enough always win as the Fed bails out the stock market, the sovereign debt, the big corporations that have failed such as GM.

Net result is an entire generation creates silly toys for mobile phones or new Facebook games rather than productive work that could be of benefit to the general public or mankind. The interesting byplay is that the producers of the world are going to war with the bloated investment system, and that is World War III. It is not between countries, but between the controllers and the controlled.

The world of VC and startup is sort of a place where producers are lulled into collaborating with the world’s enemy, or at least their own natural enemy. VC is evil. It isn’t shades of gray. There isn’t a compromise. There isn’t a way you can enjoy being productive and the fruits of your labor and still get along with an investment system gone pyscho. That’s what this generation will need to work out. There is no compromise with evil, one must oppose it.