Delvin R. Chatterson's Blog, page 14
March 16, 2016
The answer is still No
This is my true story and I’m sorry, it’s not very encouraging. In spite of everything I have just said about preparing a great Business Plan, you still may not get the financing you want.
In the early 2000’s during the infamous Dotcom bubble, my partner and I decided to launch an e-commerce venture that was essentially a virtual distribution business for computer products. We consolidated product information from various sources in a database and then developed an online catalogue application for computer retailers with all the products showing comparative pricing available from alternative sources. We also offered the retailers a customized storefront where they could present the same products to their customers at marked-up prices.
It may sound pretty boring now, but this was in the early days of e-commerce and online shopping. We got rave reviews from the computer distributors and retailers, “Wow! How did you do that?” Lots of users and sponsors signed up. But it was going to be costly to develop and support and we were not generating much revenue – so it was time to prepare a Business Plan and get the million dollar financing we needed to conquer the world.
We did the research and prepared the documents and financial projections to support a multi-million dollar valuation and started knocking on doors. Again we got rave reviews. “Great product, great Business Plan, etc., etc.”
Everything looked good for us: two experienced entrepreneurs with prior business success in the same industry; a proven business model with early customers in place; a realistic plan to build and grow the business; and reasonable projections to deliver a very high return on investment.
But the answer was still – “NO!”
Everyone had a different reason not to invest in us, but they all concluded with “Good luck and goodbye”. So we finally concluded ourselves that it was time to let it go and cut our losses. Like many other Dotcoms we went back to pursuing other career and business options.
It may happen to you. Don’t be discouraged.
It’s just time to listen to the lessons learned and come up with a new plan. You may not have to change your goals, just the route for getting there.
(Note: In all these Real life Stories, the names and business details have been changed to protect the actual subjects of each story.)
Your Uncle Ralph, Del Chatterson
Read more at: Learning Entrepreneurship Blogs.
Enlightened Entrepreneurship – Part 3: The Action Plan
Forget Forecasts
The Seven Biggest Mistakes and How to Avoid Them
Find the Exit before it’s an Emergency
When to Launch Your Business
The Four P’s of Salesmanship: “You wanna buy a book?”
Join our mailing list for more ideas, information and inspiration for entrepreneurs.
Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.
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Irrational decision making – Pipelines and Politics
I never studied Political Science but as an engineer and graduate in Applied Science, I am inclined to think that there is little science involved in political decision making. Lots of ideological fervour and applied psychology, but very little scientific analysis and rational decision making. Mom had it right when she told me once, “Don’t confuse them with the facts, they’ve already made up their minds.”
The issues regularly attracting the most irrational political decision-making appear to be any plans to build oil and gas pipelines. Mixing politics into the analysis and review process may make it more entertaining, but unfortunately does not enable decisions based on the facts and does not allow for compromise to arrive at practical solutions. Opponents with competing ideologies and political agendas use the process to beat each other up instead. KXL or Energy East or the Burnaby by-pass, choose your preferred battering ram and keep on pounding. Everybody attacking the character and apparent conflicts of interest of the other side. Nobody seems interested in listening and learning in order to find common ground and reasonable alternatives that could satisfy all parties. At least not while the media are paying attention.
“They’re just greedy oil executives who want to rip us off and destroy the planet for their immoral profits and obscene pay packages!”
And, “They’re just eco-activist hypocrites attacking evil capitalists and trying to kill the oil industry at any cost!”
The politicians are forced to choose sides and decide on the path that will be most popular with voters for the next election. Much like the business executive that makes bad decisions based on short-term results, rather than long-term sustainability.
In both arenas, there is a disappointing lack of real leadership and decision-making based on rational analysis and the likely long-term consequences for people and the planet.
(P.S. Please excuse this brief detour into politics, but give me credit for not mentioning the US Presidential candidate that everyone is talking about and that the spammers are using as “click-bait.” I am trying to resist giving him any more attention.)
Stay calm and rational and make better decisions,
Your Uncle Ralph, Del Chatterson
Read more Learning Entrepreneurship Blogs .
Enlightened Entrepreneurship – Part 3: The Action Plan
Forget Forecasts
The Seven Biggest Mistakes and How to Avoid Them
The Four P’s of Salesmanship: “You wanna buy a book?”
Join our mailing list for more ideas, information and inspiration for entrepreneurs.
Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.
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March 10, 2016
Don’t quit your day job, yet
This Real Life Story is an extract from Uncle Ralph’s, “The Complete Do-It-Yourself Guide to Business Plans”. Read the book.
Real Life Story: “Don’t quit your day job, yet”
Many young daydreamers, and older ones that should know better, see entrepreneurship as their escape from a day job that is not meeting their needs.
“Running my own business would be better than this!”
Well, maybe not. The same reasons that you are not succeeding on the job may also be big obstacles to your success in business. And entrepreneurship will test skills and capacities that you have not tested before.
Consider the old IBM sales executive that retired early and …, bought a hot dog franchise. He probably used none of his skills and experience from IBM and then discovered he did not have the patience or aptitude to manage low-budget customers and low-skill employees. Neither a good investment nor a good career decision.
Or consider the frustrated young computer technician who wanted to sell his skills directly to all those home office users that needed his expertise, instead of working so hard for a demanding network services manager and having to run around big corporate offices where nobody appreciated him. We chatted about it and he wanted me to help him write a business plan. He wanted it to get a bank loan so that he could pay himself, until he found some customers and signed some contracts.
Sounds reasonable, right?
Not a chance. No bank would ever finance that plan.
I had to persuade him to stop daydreaming; keep his money and keep his day job. A better plan was to upgrade his technical skills and get some experience in management and sales with his current employer. The he could launch his own business with confidence in the same attractive corporate services market that he already knew. Too many unhappy computer technicians are already under-employed and under-paid in the difficult home office market. He kept his day job and started on a new plan.
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Learn more at: Look before you leap.
(Note: In all these Real life Stories, the names and business details have been changed to protect the actual subjects of each story.)
Your Uncle Ralph, Del Chatterson
Read more at: Learning Entrepreneurship Blogs.
Enlightened Entrepreneurship – Part 3: The Action Plan
Forget Forecasts
The Seven Biggest Mistakes and How to Avoid Them
Find the Exit before it’s an Emergency
When to Launch Your Business
The Four P’s of Salesmanship: “You wanna buy a book?”
Join our mailing list for more ideas, information and inspiration for entrepreneurs.
Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.
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March 7, 2016
Stories behind the headlines
Stories behind the headlines
We all pay attention to the golf superstars and the winners of last weekend’s tournament. They get all the headlines. But sometimes better stories are buried deeper in the news. If they make the news at all.
Adam Scott is having a great year, in spite of the rule change that required him to give up the long putter that had served him so well the last few seasons. Another challenge for Scott this year was having to find a new caddy to replace Steve Williams. Williams had been Tiger Woods’ caddy for a very successful twelve year run, then had more big wins with Scott before retiring last year.
So who is Scott’s new caddy and how is he doing? The new guy, David Clark, had been a PGA Tour caddy for eight years, but had never won a tournament. He started two weeks ago and Adam Scott immediately won two tournaments in a row. It seems they found the magic of a good partnership. Especially when you realize that Scott had some terrible holes in both tournaments, but then recovered to play great golf and win. Interestingly, Scott is going back to Steve Williams for the four Majors this year. Easy to understand, even for David Clark. Williams was on the bag for 13 of the 14 majors that Tiger Woods has won and was with Adam Scott when he won the Masters in 2013.
The other story behind the scenes last week, was the worst World Golf Championship score ever recorded, 37 over par (Scott won at 12 under), by Steven Bowditch, another Australian. After four rounds in the 80’s, not bad for most of us except he is a world ranked PGA Tour professional, Bowditch commented, “Hey, it’s just golf.”
He didn’t mean that he didn’t care, he just meant that he accepted that no matter how much you love the game, it doesn’t always love you back. Or as your financial advisor keeps reminding you, “Past performance is no guarantee of future performance.”
The important thing is that he didn’t give up or get down on himself. Doral is called the Blue Monster for a reason (Unfortunately, it is now conspicuously re-branded as Trump Doral by its new ego-obsessed owner). It’s a course that punishes every errant shot. Bowditch still made $48,000 for the four days and was finished early, so he could head to the practice tee and work on preparing for the next event.
Lessons for entrepreneurs:
You may have to change tools, tactics and technologies, but talent and hard work can still make you a winner.
Choose good partners that complement what you do best, give you honest feedback and help you make better decisions.
Do not be discouraged by one bad week,
And keep hitting them long and straight,
Your Uncle Ralph, Del Chatterson
Read more articles like this one at : Business is Like Golf Blog
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Check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Available online or at your favourite bookstore in hard cover, paperback or e-book.
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March 4, 2016
Pricing your Business
Most business owners carry two numbers in their head – the monthly sales necessary for break-even and the selling price for their business. Both numbers may be wrong.
Break-even is more complicated than simply covering monthly operating costs and the selling price is not your ego-inflated idea of a selling price, but the value that a dispassionate investor or strategic buyer would put on it.
(Note: My approach to break-even and feasibility analysis is presented in “The Complete Do-It-Yourself Guide to Business Plans” and this article is extracted from “Don’t-Do-It the Hard Way”.)
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The principles of valuation are well known and the math is quite simple. But the real price is established only when a particular buyer and seller actually agree on a price and terms suitable to their current circumstances and their objectives. If you are managing as an owner-entrepreneur, then you should always be focused on maximizing the value of your business. That means understanding what determines the price.
In establishing the value of your business, some basic principles must be recognized:
The value to the owner is unique to that individual. Ego may artificially inflate the price, but more importantly the value is often very dependent on the current roles and relationships established by the owner and may change drastically with his or her departure, thereby reducing the price offered by a new prospective owner.
Value is always determined by an evaluation of the future income and the uncertainty or risk associated with achieving it.
Regardless of the valuation method, the forecast future income stream has to be credible and the potential risks have to be reduced to get the best possible valuation.
Current owners tolerate more risk, uncertainty and fuzzy circumstances than new owners or investors. You may be OK with the fact that you are dependent on one key supplier because he is an old buddy from high school; or that you have no signed lease because the landlord is your favourite uncle; or that your best sales rep is also your daughter and she wants to be president.
Prospective buyers will be much less enthusiastic about these issues, unless they are all resolved to their satisfaction in advance of any offer to purchase or invest.
Different buyers will accept different prices, terms and conditions.
Those usually range from the passive investor looking for a reasonable return with reasonable risk; to the active investor who sees the potential to do better than your forecast under his management; to the strategic investor who sees even greater opportunity in buying a competitor, supplier or customer and merging it with his existing business to increase revenues, reduce overhead and substantially increase profits.
The selling price will depend on the perceived value seen by each of these buyers.
Several valuation methodologies may be used and it is often a good idea to test different approaches to see what values they yield and then select a selling price that can be reasonably supported by any method of valuation.
P/E Multiple
The price-to-earnings multiple is a well-recognized valuation method and is widely reported for public companies. Current price per share divided by annual earnings per share is a simple concept and easily calculated. Unfortunately, it is not always very relevant, since the selling price today is more likely based on the expectation of future earnings, not last years’ earnings. The same may apply to a valuation of your business.
For example, Google’s share price on January 15th, 2014 was $1150 which yields a P/E multiple of 26X based on 2013 earnings of $44.19 per share. But, if we use the analysts’ consensus earnings estimate for 2016 of $71.74 per share then the P/E multiple is a more “reasonable” 16X. Still high compared to the less exciting Royal Bank of Canada priced at $70.90 per share with a P/E multiple of only 10.3X earnings estimated for 2016.
What is the P/E multiple for your company?
Typically, small owner-managed businesses can support a P/E multiple ranging from 3X to 5X. It will be higher if future earnings are very secure and not dependent on the current owner and lower if future earnings are risky and very dependent on the current owner.
The buyer will usually look at operating income or EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) to determine profitability of the business, before considering financing, taxes and capital costs. For example, that will yield a price of $300,000 on your $100,000 per year operating income, if you can agree on a P/E multiple of 3X and a price of $500,000 if you can persuade the buyer that a multiple of 5X is appropriate.
Payback Period
Some buyers will insist on looking only at net cash flow and the payback period to arrive at a price. They will consider their net investment, after allowing for financing, taxes and payment terms to determine how long before they get their investment back and start earning positive cash flow. They will likely have a minimum payback period, depending on risk, ranging from 3 to 5 years (which yields essentially the same price as a 3X to 5X multiple of EBITDA).
Discounted Cash Flow
Other investors will take the financial analyst’s approach of calculating discounted Net Present Value (NPV) or the Return on Investment (ROI). Again the future net cash flows must be forecast to arrive at a valuation. The buyer will then discount future cash flow at the required rate of return on the investment, typically 15% to 20%, or calculate the expected ROI and then compare it to the required rate of return. For example, a $100,000 per year annual cash flow on a $500,000 investment provides a 20% annual Return on Investment. (And a 5X P/E multiple.)
Using these same methods will give you a range of valuations depending on various buyer/seller scenarios to establish your own best estimate of a fair selling price. Now you have a methodology for determining the value of your business over time. It will be useful for getting initial investors and will also help in any shareholder buy-sell agreement or future succession plan.
Knowing the value of your business is a key performance measure that you should be tracking regularly. The day you need to know it should not be the first time you calculate it. Don’t wait until your exit is an urgent necessity; always have a price and a plan.
As I concluded my presentation and watched the e2eForum members taking notes, I waited for the next question which usually followed. Stan was the first to look up and ask it.
“I just did a quick calculation and I don’t like the answer. So how do I improve on the price for my business?”
“You are all probably doing the first two things that enhance business value; growing sustainable, profitable revenue and reducing business risk. The next important priority is management transition. How do you evolve from employee to owner to exit? It is very hard to get a new owner to buy your business if that buyer cannot replace you and your value as manager in the business. If you can transition yourself from active manager to passive investor or ‘absentee owner’, it will then be much easier to transfer ownership.”
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Do you have the right price on your business? Are you working to improve on it? The sooner the better.
Your Uncle Ralph, Del Chatterson
Read more Learning Entrepreneurship Blogs.
Enlightened Entrepreneurship – Part 3: The Action Plan
Forget Forecasts
The Seven Biggest Mistakes and How to Avoid Them
Find the Exit before it’s an Emergency
When to Launch Your Business
The Four P’s of Salesmanship: “You wanna buy a book?”
Join our mailing list for more ideas, information and inspiration for entrepreneurs.
Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.
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March 2, 2016
Sold! You thought it would be easy?
If you’re thinking of selling your business someday, remember it’s a long, complicated process that you should start well in advance. The recent sale of a client’s manufacturing business, reminded me once again that a successful sale requires considerable time and effort – before, during and after the deal is made. Rigorous planning and preparing for the sale, working hard to get the price and terms you want, then closing the deal and managing the transition to new ownership.
This deal began about five years ago with the casual comment, “I’m thinking it’s time to sell. What do you think my business is worth?” Always a challenging question, loaded with high expectations and a lot of ego. I did the analysis and presented my estimated range of potential values based on standard valuation techniques. As usual, the owner was disappointed that the number, but was eventually persuaded that the rationale was reasonable.
It helps to ask, “How much would you pay to buy this business if you were not already the owner?” And it also helps to remember that every investment is justified on the expected rate of return and any sale, including the equity in your business, only happens when the buyer values it more than the seller. Never when it’s the opposite.
Pride and ego can persuade the owner to price the business much higher than any rationale buyer can see or be willing to pay. We could look for a crazy person with lots of money, but the two are not often found together.
So, once the decision is made, what are the three steps required to sell your business?
First Step: Packaging for Sale
If we have agreed that the current valuation is not sufficient, then we have to work on short-term action to improve on the value and make the business more presentable to prospective buyers.
The value is always increased if the business can improve on net income and reduce the risk associated with sustaining it. The immediate requirements to stabilize revenue, reduce costs and clean-up the balance sheet are usually obvious, if looked at from the perspective of an outside investor. But often the most difficult and important issue to be resolved in order to enhance the value of the business is to reduce its dependency on current ownership. That may mean introducing a stronger management team and removing the owners from an active role. You cannot sell and exit the business, if it will fail immediately after you leave. (Seems obvious, I know.)
Ideally, the business should already be managed to make it as valuable as possible by continually addressing the key issues of sustaining growth, reducing risk and building a strong management team. When those issues are all reasonably resolved and the tough questions can be answered, then you are ready to start presenting your business for sale.
Second Step: Presenting for Sale
Preparing for sale requires some strategic planning. We need to know how to present the business for sale and to which potential buyers.
Strategic buyers will always pay the best price because they will have access to synergies in reduced overhead or expanded sales that will add to their return on the investment and consequently to their perceived value. Who are they and where do we find them? Would you consider selling to a competitor? What if they plan to buy your business to close it?
Are you willing to consider passive investors who are seeking low risk returns and will probably offer the lowest price? Would a new owner-management team be a better scenario for continuity of the business and a smooth management transition?
What are your preferred terms to maximize the after-tax cash value and to accelerate the payout? What is negotiable and what is not?
When these strategic questions are answered you can prepare a marketing pitch and Offer for Sale to attract interested and qualified buyers. The package should have enough information to appeal to an investor without disclosing too much confidential or competitive information. You may even wish to remain anonymous and have the initial package presented by an agent or business broker. After the prospective interested buyer 
has been qualified and signed a non-disclosure agreement, then a more detailed package should be available to provide the company background and financial history and support the valuation and asking price.
As proposals are exchanged and alternatives are considered, negotiations can begin. There may be several prospects that do not lead to an accepted offer, but eventually a deal gets made. Unfortunately, you’re still not done.
Third Step: Closing the Sale
The third step is closing the sale, completing the transaction and making the business transition to new management.
This final step can be a grinding process with all the conflicting, complicated and costly input of your accountants, lawyers and bankers. (Of course, they should all have had some prior warning and the chance for input before the deal is signed, but now it gets more serious.) You need the professional expertise to properly document and process the negotiated Buy/Sell Agreement to avoid any subsequent liabilities, minimize the tax consequences and maximize the cash payout. You will get conflicting advice, especially from the buyers’ advisors, as the best terms and conditions for you may not be in their best interest. More negotiating and compromises will be required.
Then, once the deal is properly documented and the closing gets done as planned, the parties can all work together on the transition to new management and ensure that the business stays on track for continued profitable growth any balance of sale gets fully paid.
Now you can make your graceful exit and focus on managing, or spending, all that cash.
Have you decided to sell? Then it’s time for you to get started on the first step.
Your Uncle Ralph, Del Chatterson
Read more at: Learning Entrepreneurship Blogs.
Enlightened Entrepreneurship – Part 3: The Action Plan
Forget Forecasts
The Seven Biggest Mistakes and How to Avoid Them
Find the Exit before it’s an Emergency
When to Launch Your Business
The Four P’s of Salesmanship: “You wanna buy a book?”
Join our mailing list for more ideas, information and inspiration for entrepreneurs.
Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.
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March 1, 2016
Real Life Story: “Don’t take that to the Bank”
This Real Life Story is an extract from Uncle Ralph’s, “The Complete Do-It-Yourself Guide to Business Plans”. Read it.
Real Life Story: “Don’t take that to the Bank”
It started with a phone call, “Hi Del, we found you on the Internet”. A week later, I was sitting down with Peter, Paul and Mary to work with them on their start-up Business Plan.
Peter and Paul were two experienced executives in the computer hardware service business and Mary was Paul’s wife. They wanted to quit their current jobs and start their own computer services business that would succeed where their current employers were failing. They had the necessary knowledge, experience and contacts to quickly get up to speed and win business from competitors. (Those are the three pre-requisites I always ask the entrepreneur to check-off before starting.)
But there were two major flaws in their initial plan. First, they had an unnamed additional partner who was currently the Purchasing Agent with a customer of their current employer and he was promising to switch that large contract to their new business. Oops! That would probably be a firing offense as a conflict of interest for the Purchasing Agent and a breach of their own employment and non-compete agreements for Peter and Paul. So I persuaded them to leave the third partner out of the deal, at least until he also had left his current job.
The second major flaw in their plan to attract both suppliers and customers was to offer very generous payment terms. The exact opposite of the often recommended cash management policy of “collect fast and pay slow”, they intended to let their customers pay slow and pay their suppliers fast. They saw it as a key competitive advantage and it would certainly have been attractive for their customers and suppliers, but a disaster for their financing and profitability.
Also not something to take to the bank to generate confidence in their management capabilities and the likely success of their plan. So we reverted to normal industry payment terms and focused instead on leveraging their strengths of market knowledge and technical expertise to attract customers and suppliers. That not only made the plan more presentable, but also reduced their start-up financing requirement from over $100,000 to less than $40,000.
These were valuable changes to their Business Plan resulting from the all-important process of testing strategies and plans to see the real impact on operations and financial results. That is the real value of preparing a Business Plan: arriving at a workable strategy and operating plan for management. Not just a document to submit with a request for financing.
After the revisions, they did succeed in getting financed and two years later the business was growing fast.
(Note: In all these Real life Stories, the actual names and business details have been changed to protect the innocent subjects involved in each story. Their stories are told here only for the purpose of helping other entrepreneurs get better results from their Business Plans.)
Your Uncle Ralph, Del Chatterson
Read more at: Learning Entrepreneurship Blogs.
Enlightened Entrepreneurship – Part 3: The Action Plan
Forget Forecasts
The Seven Biggest Mistakes and How to Avoid Them
Find the Exit before it’s an Emergency
When to Launch Your Business
The Four P’s of Salesmanship: “You wanna buy a book?”
Join our mailing list for more ideas, information and inspiration for entrepreneurs.
Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.
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February 24, 2016
Earn the right to brag
Earn the right to brag
It worked for me running marathons. Long after my rational brain and aching body were telling me to quit, my ego kept reminding me that I would lose all bragging rights, if I didn’t finish. I knew it was much more satisfying to work into the conversation, “Yup, the full twenty-six miles, 42.2 kilometers, and I wasn’t last. In New York there were even nine thousand runners finished behind me!” (No need to mention there were twenty-five thousand ahead of me. Just a humble telling of the facts that put you in the best light. Getting too boastful can lead to distressing put downs, like “Did you win?”)
Pride is a great motivator.
No need to deny it; earn it and use it. Don’t exaggerate and don’t take credit where it is not your accomplishment, but if it’s true, let the world know. Sometimes it’s not clear why we’re so proud, but if the feeling is there, share it. And if you are proud of your team, your family, your staff, or your associates, it’s worth sharing. Being recognized and appreciated is a great motivator for everyone.
What about the things we do we’re not so proud of? The question then is “Would you do that if anybody knew?” The opposite of pride is shame and it’s a good deterrent to bad behaviour if you imagine it being exposed. If you anticipate embarrassment, humiliation or loss of respect, then don’t do it.
Imagining an audience works both ways. Keep in mind that you may not be just imagining it. In today’s over-exposed world somebody will notice, whatever you do.
Your Uncle Ralph, Del Chatterson
Read more at: Learning Entrepreneurship Blogs.
Enlightened Entrepreneurship – Part 3: The Action Plan
Forget Forecasts
The Seven Biggest Mistakes and How to Avoid Them
Find the Exit before it’s an Emergency
When to Launch Your Business
The Four P’s of Salesmanship: “You wanna buy a book?”
Join our mailing list for more ideas, information and inspiration for entrepreneurs. Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.
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February 18, 2016
The weird WWW continues
Back when we were first introduced, about twenty years ago, it was called the World Wide Web. Now it would be better described as the Weird Wonderful World that we live in.
It is a continuously and rapidly changing world that affects us all every day. From the time we wake up to check e-mail and the weather on our smart phones, staying connected all day for work and play, until watching old movies or TV series on Netflix before bed. The internet has become as much a part of the infrastructure we take for granted as traffic lights and coffee shops.
But taking it entirely for granted is not a good idea, since it is a continuously changing infrastructure. Suddenly, the most popular app is not available on your Blackberry and the old accounting software is not compatible with Windows 10. You’re in danger of going obsolete yourself if you don’t continually replace or upgrade devices and software. Suppliers are constantly developing products and services to win new customers and build attraction to their brand. Marketing gurus find ways to make them irresistible and impossible to ignore.
But the suppliers also live in this challenging world without control over events. In the news again today, we learn that Yahoo continues to search for a strategy that will allow them to survive. Remember them? The original Web portal that asked “Do you Yahoo?” Now we are all Googling and Facebooking instead of Yahooing. What was once creative and exciting, now seems old-fashioned and obsolete.
Even more recent successes, the so-called unicorns that grew rapidly from zero to billion dollar valuations, are not guaranteed longevity. Consider Twitter. Another weird concept launched in 2006 that caught on and has grown to 320 million active users. The company went public just over two years ago before it was even generating any significant revenue. Enthusiastic fans drove the first day share price to $44.00 for a valuation of $31 billion and it rose as high as $69.00 in early 2014. That little bluebird is now fluttering under $18.00 and management is saying “We have a ton of work to do in crafting the message to the world what Twitter really is and how you can use it” (FP, 18-02-2016).
This weird and wonderful world continues and we still cannot understand or explain it.
Your Uncle Ralph, Del Chatterson
Read more at: Learning Entrepreneurship Blogs.
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The Seven Biggest Mistakes and How to Avoid Them
Find the Exit before it’s an Emergency
Deciding When to Launch Your Business
The Four P’s of Salesmanship: “You wanna buy a book?”
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February 17, 2016
It’s a New Season. Time for a Repeat Performance?
Last year Jordan Spieth made history with five PGA wins, including two Majors and the FedEx Cup, for over $20 million in earnings as a 22-year old.
Can he repeat that performance this season? Well, against the other Tour winners in a high profile tournament in Hawaii last month he won by eight strokes. That’s pretty convincing.
A few more tournaments around the world and he has only finished occasionally in the Top Five. So he doesn’t win them all, but he is still No. 1 in the World Golf Rankings in spite of pressure from Rory McIlroy, Jason Day and Ricky Fowler.
Spieth is a year older and wiser with lessons learned from winning under pressure last year. He will be tough to beat. We will be watching at the Masters in April.
How is that like business?
One year is not enough. Each year you start again from zero and try to repeat your best performance. No one is very impressed unless you can sustain it.
Consider Phil Mickelson – challenging himself and the competition for twenty-five years with forty-two wins including five Majors and still in the mix to win again until the last putt on the 18th green at Pebble Beach last Sunday. He has already won the Masters three times (2004, 2006, 2010), so maybe the 45-year old will be duelling with Spieth in April. It will be fun to watch.
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