In response to my colleague's last post, I wonder if "reversing paradigms" (I am currently cringing at this business jargon) is what sets entrepreneurs apart. Standard Oil under Rockefeller developed market share by 1. redefining the market and 2. offering a much cheaper alternative to the current product. (substitution) His kerosene for lamps cost 1/3 the cost of whale oil and he even lowered his price by 80% (over a few years) which saved his customers a fortune.
I also wanted to note that Thomas Friedman's "world is flat" concept is seized upon by many to suggest that the world is now more competitive for Americans. This is the wrong way to look at it. While there is greater competition from abroad, there is an opportunity for much greater collaboration. (Might entrepreneurs take two lessons from sports - competition and team work?)
When Janus Friis and Niklas Zennström founded Kazaa and then Skype they collaborated in turning both file sharing and then voice communication on their head. This creative destruction might be seen by some ("dinosaurs") as endangering a comfortable status quo or destabilizing important industries, but more importantly it redefined markets. Their developments leveled the playing field (damn! another sports metaphor) for small business. Inexpensive communication has and will lead to significant improvements for the world just as inexpensive fuel brought us one of the most innovative centuries to date.
Wednesday, July 9, 2008
Sports and Business
A recent survey [citation needed] found a correlation between success on the playing field and success in the boardroom. What remains unclear is whether this is due to a competative streak among the participants or the learned behavior of teamwork.
This statistic is not particularly interesting or helpful to those of us who aspire to a career of entrepreneurship since boardroom dreams are in the distant future. This is the distant future far beyond growing a closely held business where we may act as shareholder, director and executive rolled up in one. It is even past rounds of pitching the business to venture capitalists. (Is "pitching" in this case a sports metaphor?)
What is interesting - is what we don't know. How are business executives and entrepreneurs different? What are the traits and hobbies that manifest themselves among entrepreneurs? (Is it writing out questions and then trying to find the answers?) Do entrepreneurs also play sports? (Sir Richard Branson likes flying solo. Hmm.)
Do entrepreneurs tend to compete or collaborate? Are these mutually exclusive traits?
What does seem to be a notable characteristic is deviation from the norm. Apparently Branson was quite a handful in school and David Neeleman the CEO of Jet Blue wears his ADD as a badge of honor.
I don't know the answer but I will keep looking. In the meantime, read this poem by Rudyard Kipling.
This statistic is not particularly interesting or helpful to those of us who aspire to a career of entrepreneurship since boardroom dreams are in the distant future. This is the distant future far beyond growing a closely held business where we may act as shareholder, director and executive rolled up in one. It is even past rounds of pitching the business to venture capitalists. (Is "pitching" in this case a sports metaphor?)
What is interesting - is what we don't know. How are business executives and entrepreneurs different? What are the traits and hobbies that manifest themselves among entrepreneurs? (Is it writing out questions and then trying to find the answers?) Do entrepreneurs also play sports? (Sir Richard Branson likes flying solo. Hmm.)
Do entrepreneurs tend to compete or collaborate? Are these mutually exclusive traits?
What does seem to be a notable characteristic is deviation from the norm. Apparently Branson was quite a handful in school and David Neeleman the CEO of Jet Blue wears his ADD as a badge of honor.
I don't know the answer but I will keep looking. In the meantime, read this poem by Rudyard Kipling.
Wednesday, July 2, 2008
Statistics to Support the Tax Post
The SBA released this nugget 3 years ago.
State of the Inner City Economies: Small Businesses in the Inner City reports that small businesses are the greatest source of net new employment in inner cities. They comprise more than 99 percent of inner city business establishments and they generate 80 percent of the total employment in those areas. In all, America’s inner city small businesses employ about nine million people, or eight percent of the U.S. private workforce.
This refers to just the inner city. I wonder what percentage of Americans are employed by small businesses. This just goes to show that cutting taxes for middle class will also result in the creation of jobs and allow them a chance at the same entrepreneurial dream of the wealthy.
Horatio Alger wrote stories of entrepreneurship which is the real American Dream. We are pioneers and with the lack of new land we are going to have to find somewhere to build our dreams. I imagine that will be in the land of business.
State of the Inner City Economies: Small Businesses in the Inner City reports that small businesses are the greatest source of net new employment in inner cities. They comprise more than 99 percent of inner city business establishments and they generate 80 percent of the total employment in those areas. In all, America’s inner city small businesses employ about nine million people, or eight percent of the U.S. private workforce.
This refers to just the inner city. I wonder what percentage of Americans are employed by small businesses. This just goes to show that cutting taxes for middle class will also result in the creation of jobs and allow them a chance at the same entrepreneurial dream of the wealthy.
Horatio Alger wrote stories of entrepreneurship which is the real American Dream. We are pioneers and with the lack of new land we are going to have to find somewhere to build our dreams. I imagine that will be in the land of business.
Shi Yuzhu - China's Entrepreneur
Today's Financial Times had an interesting profile piece on Shi Yuzhu. During the late 90's Asian financial crisis his company Giant neared collapse, partially due to cost overruns associated with the Zhuhai tower he was building. Two problems he experienced were 1. government revisions of his blueprints, 2. an inability to access capital or credit due to the financial crisis.
He was seen as the poster boy of capitalism's dark side. The evils of capitalism being "rampant excesses and reckless risk-taking." All of the apartments in the unfinished skyscraper had been pre-sold. Rather than resort to bankruptcy, he took on the debt himself and paid the investors back a total of Rmb 250m ($36.5m). This was achieved by starting a new venture from scratch and honorably making good on his promise.
In 2001, three years after losing everything, he had banks knocking on his door wanting to make him loans with no collateral. His word was all that was needed.
All too often we see deceptive business practices seem to succeed. We are presented with the dichotomy of being a "sheep or a shark." It is refreshing to see good business practices rewarded with success. (Buffet is another good example.)
While I am reticent to mix business with religion, there are a lot of good points made by various religious figures throughout history so I will mention one here anyway. In Matthew 10:16 Jesus said, "I am sending you out as sheep among wolves. Be as shrewd as serpents but as harmless as doves." There may be a lesson for entrepreneurs here.
He was seen as the poster boy of capitalism's dark side. The evils of capitalism being "rampant excesses and reckless risk-taking." All of the apartments in the unfinished skyscraper had been pre-sold. Rather than resort to bankruptcy, he took on the debt himself and paid the investors back a total of Rmb 250m ($36.5m). This was achieved by starting a new venture from scratch and honorably making good on his promise.
In 2001, three years after losing everything, he had banks knocking on his door wanting to make him loans with no collateral. His word was all that was needed.
All too often we see deceptive business practices seem to succeed. We are presented with the dichotomy of being a "sheep or a shark." It is refreshing to see good business practices rewarded with success. (Buffet is another good example.)
While I am reticent to mix business with religion, there are a lot of good points made by various religious figures throughout history so I will mention one here anyway. In Matthew 10:16 Jesus said, "I am sending you out as sheep among wolves. Be as shrewd as serpents but as harmless as doves." There may be a lesson for entrepreneurs here.
Sunday, June 29, 2008
More Authors Joining the Ranks
I was invited to join Between the Buyers ranks as a blogger earlier today. I thought I would begin by introducing myself.
I am a third year law student and I want to use my law degree to support small businesses in entrepreneurial pursuits. My background includes lobbying, sales, freelance journalism and archaeology. If I continue to have this much fun in life I won't end up working a day in my life.
My academic interests include tax policy, Roman history, and ancient law. My leisure interests include cooking, sailing and watching embarassingly bad TV.
My blogging interests will focus on whatever peaks my interest on any given day.
I am a third year law student and I want to use my law degree to support small businesses in entrepreneurial pursuits. My background includes lobbying, sales, freelance journalism and archaeology. If I continue to have this much fun in life I won't end up working a day in my life.
My academic interests include tax policy, Roman history, and ancient law. My leisure interests include cooking, sailing and watching embarassingly bad TV.
My blogging interests will focus on whatever peaks my interest on any given day.
Monday, June 23, 2008
Taxes and Entrepreneurship
As the campaign season heats up and the two major candidates issue talking points that obfuscate what they will do with the Bush tax cuts, let us ponder a tax policy that makes sense for entrepreneurs.
We were told that if America cuts taxes for the wealthiest American's then they will invest their money to create jobs for us. Isn't that benovolent of them to want to get a return on their capital and in the process give us a few jobs? The problem with this stimulus is that capital is global and wealthy Americans' investments may not directly create American jobs unless the tax cuts are contingent upon investing in American companies that operate entirely within our borders.
Now I don't believe that Americans are entitled to having jobs created for them anymore than I believe that we have an obligation to create jobs for others unless our enterprise needs labor. However, I do believe that we can make policy decisions that reflect our national goals and values.
It makes sense to cut taxes for the middle class (35K-160K?) to allow the middle class to invest in their own ventures or the ventures of of their friends and family members. Not only will this allow for individuals to create their own jobs but it will result in spending on business start up needs. (office space, computers, transportation, supplies, hiring, etc.) This will stimulate the economy and drive job creation.
Furthermore, small businesses will create demand for professional services such as tax planning, legal advice and accounting. Rather than revisit the failed trickle down policies of the 1980's let us invest in gushing upwards innovation of the twentieth century. Let individuals prosper and the country prospers.
We were told that if America cuts taxes for the wealthiest American's then they will invest their money to create jobs for us. Isn't that benovolent of them to want to get a return on their capital and in the process give us a few jobs? The problem with this stimulus is that capital is global and wealthy Americans' investments may not directly create American jobs unless the tax cuts are contingent upon investing in American companies that operate entirely within our borders.
Now I don't believe that Americans are entitled to having jobs created for them anymore than I believe that we have an obligation to create jobs for others unless our enterprise needs labor. However, I do believe that we can make policy decisions that reflect our national goals and values.
It makes sense to cut taxes for the middle class (35K-160K?) to allow the middle class to invest in their own ventures or the ventures of of their friends and family members. Not only will this allow for individuals to create their own jobs but it will result in spending on business start up needs. (office space, computers, transportation, supplies, hiring, etc.) This will stimulate the economy and drive job creation.
Furthermore, small businesses will create demand for professional services such as tax planning, legal advice and accounting. Rather than revisit the failed trickle down policies of the 1980's let us invest in gushing upwards innovation of the twentieth century. Let individuals prosper and the country prospers.
Sunday, June 22, 2008
The Art of War: America
In preparing for battle I have always found that plans are useless, but planning is indispensable - Dwight D. Eisenhower, U.S. President
Subscribe to:
Comments (Atom)