Monthly Archives: April 2005

To budding entrepreneurs, I always

To budding entrepreneurs, I always give the same advice: No matter how badly you think you write, write your own business plan. At least get it started. Get something down on paper and read it back to yourself. Try to imagine yourself running an enterprise by following this plan.

Not a week goes by that somebody doesn�t ask me if I write business plans. They read my blog. They figure I�m a writer. They want to outsource this laborious, unfamiliar task to me.

�I do,� I always respond, �but only for myself.�

I don�t think it�s possible for somebody to write someone else�s business plan. To me, that�s almost like taking someone else�s marriage vows, or being on that reality show Trading Places: I mean, how can you vow to love, honor, and obey someone you have never met?

A business is like a lover at the beginning — elusive, attractive and distant. You are enamored by the almost illicit qualities of not �working for the man.� You see your startup as a road to freedom, as a way to lend meaning to your life. You are impulsive, euphoric, even arrogant. Your business idea is better than anyone else�s. It will make you rich. It will make you famous. It�s beautiful.

At that stage, you want to outsource the business plan so you can get started as soon as possible.

But, just as in relationships, the closer you get to a business, the more warts it has. If you have ever acquired a business, bought a franchise, or been part of a merger, you already know this. While your own business might be beautiful, everyone else�s has disfiguring qualities. As you get to know it, you can see all its quirks and characteristics. Some turn out to be pretty unattractive, like climbing around in people�s attics during the summer if you are in the air conditioning business. Or constant employee turnover, as in the fast food business. Or unprotectable intellectual property, as in many technology businesses.

There�s no way to get to know your business without writing a business plan. It�s the dating process. It�s the time when you find out whether you want to spend the rest of your life with this dude.

And there�s no point in hiring me, or anyone else, to date your business idea. When we find out what�s wrong with it, we will just pocket your money and go away. But you will be left with this stranger you have gotten in bed with for the long term � without getting to know. It�s like getting married in India. You might grow to love your wife, or you might not.

Now, I�m not saying write the plan without help. At the other end of the spectrum from the person who wants to outsource the entire process is the guy who gives me a business plan without financials, because he�s an engineer or a hairdresser and can�t create them. His business plan contains all the big ideas, and no way to make them work on a day to day basis.

There is a format for business plans. It�s well-known, and has been automated several times. The Kauffman Foundation includes the software for business planning in the entrepreneurial training programs we offer. Their format is called The Business Mentor. There is also a very popular software tool available on the web: Palo Alto Software�s Biz Plan Pro, which costs $99.99 (of course not $100) at http://www.paloalto.com/ps/. Most bankers and investors can recognize a plan constructed around BizPlan Pro.

The best thing to do is invest in some of this software, and sit down with it. It�s a fill-in-the-blanks exercise. Very soon you will see where you can fill in those blanks, and where you can�t.

That�s when to invite someone else, perhaps an accountant, a business consultant, a marketing consultant, or an attorney into the planning process. In our entrepreneurial training programs, we invite all of those in. Each has a little something to contribute to a good business plan, and if you are writing your plan while coming to these programs, you will inevitably end up with something you can take to the bank or the investors.

Problem is, we (and even the Kauffman Foundation) reach such a small number of would-be entrepreneurs and startup businesses with these programs. Perhaps it�s the entrepreneurial spirit (the misfit mentality that makes Deadwood such an interesting TV series), perhaps it�s poor communication, perhaps it�s just impatience, but most entrepreneurs jump in on their own.

Without a business plan.

Then they decide they need money. And the bank or the angel asks for a business plan. And that�s when they come to me, asking me to write one for them.

And that�s when I tell them I will edit, but not write. I will not jump into bed with your fianc�. It�s against my family values.

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The new food pyramid is

The new food pyramid is out — the first since the advent of the Internet. You can find it, I learned from the Wall Street Journal this morning, at http://www.mypyramid.gov. No longer does the food pyramid belong to the government; it belongs to me.

So now we don’t get a poster, we get an interactive site on which we can custom tailor our nutrition program. The site is overwhelmed with visitors today, probably all of them press trying to cover the story. A just plain folk like myself can hardly get on; it takes forever to load past the first screen, where you enter your age, sex, and the amount of exercise you exaggerate about doing daily.

The next screen is supposed to produce the MyPyramid plan, personally tailored to me. After several gateway timeouts, I finally found out I’m supposed to eat 1800 calories a day, composed of five ounces of meat or beans, 1.5 cups of fruit, 2.5 cups of vegetables, 6 cups of grains, of which 3 should be whole — well, you get it. Then I was supposed to drill down to find out about portion sizes (I can click on “what is an ounce?”)and menus (Vary your veggies).

I did find out that you’re supposed to have 3 cups of green leafy vegetables a week, 2 cups of orange vegetables (you knew them as yellow), 3 cups of dry beans and peas, 3 cups of starchy vegetables (corn, green peas, lima beans and potatoes), and 6.5 cups of other vegetables: .
artichokes
asparagus
bean sprouts
beets
Brussels sprouts
cabbage
cauliflower
celery
cucumbers
eggplant
green beans
green or red peppers
iceberg (head) lettuce
mushrooms
okra
onions
parsnips
tomatoes
tomato juice
vegetable juice
turnips
wax beans
zucchini
These other vegetables, I suspect, are the least nutritious. They are also among my favorites. I really wanted to know why they had been consigned to “other.”

However, I could never get back in to do the research to write this blog, so I tried to enter the site another way.

Sure enough, I went to the part called MyPyramid Tracker, and I was able to sign up and sign on. Of course, I had to enter my date of birth, height and weight, which elminates half the journalists who believe in privacy and most of the general public, which should be ashamed of its height and weight.

This part of the site is accessible, but still buggy. Example:
Age: 63 <span id=”Requiredfieldvalidator2″ controltovalidate=”Age” errormessage=”Please enter an age.” display=”Dynamic” evaluationfunct.

Now what do I do? That’s my age! Should I make up one that the form will like better?

My theory: the USDA spent a fortune for this site, which will be busy for one day. By next week, it will have about six visitors a day, all schoolkids who have been assigned to go there for a class. However, those kids will leave very frustrated, because when I tried to come back as a returning user, I got <LINK href=”Styles.css” type=”text/css” rel=”sty.

When I did a refresh on my browser (and yes, it was IE, I wouldn’t even try it with Firefox or Safari), this was the result. <form name=”f

Did anyone in the USDA ever try to log in before launch?

I admire the government for trying to incorporate the latest nutrition into the latest technology. However, the same small subgroup of food faddists, cancer survivors, and triathletes who followed a nutrition program yesterday will follow one today, with or without the pyramid. Haven’t you ever been in a restaurant with someone who ordered fries with his/her meal and then turned to you and said “I know they’re not good for me, but…” Haven’t you ever been at Costco, where obese bargain hunters throng the hot dog counter and the pizza stand outside the checkout line, unable to make it home with their purchases before having a bite? Do you think any of those people are headed home to their computers to enter data into their PyramidTrackers?

I once had a friend who told me that he thought everyone ought to be allowed to smoke, drink and eat as they pleased, because they would then perish early and not be a drain on the health care system. That’s all well and good, except that fries-fanatics don’t just die; they get sick first, and consume millions of dollars in resources while we try to transplant things, bypass things, and ream out parts of their bodies.

Unfortunately, even if this site worked well, wasn’t busy, and wasn’t complicated, mypyramid.gov would not be the answer to spiralling health care costs and morbid obesity. Only personal responsibility works, and you can’t get that on the Internet.

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Entrepreneurship is a roller coaster,

Entrepreneurship is a roller coaster, my own included. Just when you wonder whether you will ever succeed, you find out in some roundabout way that you already have.

In 1998, we started Stealthmode Partners, a fee-for-service accelerator for entrepreneurs. From the very first moment, we learned that fee for service wouldn’t cut it, because entrepreneurs had no money (even in those relatively loose money days) and could not pay up front. So we changed our model to include taking equity.

When the dot com market crashed, we consigned most of the equity to the lavatory. And we changed our model to include deferred compensation and pay for performance.

Our income stream was random, although always sufficient. Our efforts at projection were fruitless. When deals happened, they happened, but they couldn’t be predicted in any specific quarter. It was very difficult to measure our outcomes. Never mind the money. You can make money in real estate in Arizona and support yourself. That wasn�t the point. The real question: does a resource incubator really help?

By now, we were a recognized brand. We had more business than we could handle, and we wanted to help, help, help — whether or not people could pay, pay, pay. Fortunately we were self-funded, so as we ducked and wove (weaved?) to ride the market, we didn’t have to answer to anybody but our mortgage companies. (More fortunately, my children were grown).

When I discovered the Kauffman Foundation in 2003, we realized that we could make our services more affordable by using a group setting — in this case, the Foundation’s Fasttrac program. We could help more people at a lower price point by offering Fasttrac programs. We started them in the fall, and people paid $750 to enroll. The programs have been very well received. So we met with more people, but did we actually DO anything for them???

Then the City of Phoenix took a big chance. Last year, they awarded us a Community Development Block Grant to make it possible for companies and individuals in certain industries (technology, construction) and certain categories (downtown, impacted by light rail, disadvantaged)to attend the program for only the cost of the materials.

We are now on our second grant, and our mandate is to generate a certain number of jobs per company we contact. It’s a very modest number — one or two — but we have to keep track of those jobs. We have to account for our outcomes.

What a wonderful way to measure whether our “help” really helps! This week, I ran into two of the graduates from the first City of Phoenix Fasttrac program. One of them has increased staff from a single person to eight employees. The other has increased from one to 4. The members of their particular Fasttrac class are doing business among themselves, and they even want to have a reunion. Everyone�s business seems to be alive and well. In other classes, people have gone from 25 to 50 employees, and no one seems to be laying off. But I only know this because the City of Phoenix grant encourages us to keep those records.

By Silicon Valley standards, this may sound like nothing. But it isn�t. In truth, small businesses like the ones we coach are the backbone of the culture of innovation. They are not externally funded, and they don�t grow quickly or without thought. But their continued survival provides a picture of the American economy as a whole � buttressed not by large corporations who do or do not outsource (I�m watching Lou Dobbs as I write this), but by scrappy entrepreneurs who survive by forming networks and collaborations that contribute to their success.

Why am I talking about this? Because we talk endlessly about what government does or does not do for us, and the talk is usually negative. We are so grateful to the City of Phoenix, which has put its money behind its talk about supporting innovation and entrepreneurship, and for granting us this resource. We know it�s your tax dollar, and we are doing out best to put it to work creating good jobs for our children.

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I heard a pretty fantastic

I heard a pretty fantastic (as in representing a fantasy) speech yesterday at the Arizona Wireless Expo. The speaker was Franz Fink, Vice President & General Manager, Wireless & Mobile Systems Group; Freescale Semiconductor. Freescale, you may remember, was recently spun off from Motorola. He was talking about getting to seamless mobility.

Seamless mobility is the vision of the newly reconstituted Motorola: it�s the interconnection of devices between operating systems, platforms, and media. According to the Motorola web site, seamless mobility was already living and breathing at the Motorola 2004 Analysts Meeting.

“People want to stay connected to the ones they love, the information they need and the gadgets that keep their lives humming — and we’re making it possible,” said Ed Zander, chairman and chief executive officer of Motorola. “People’s connections don’t end at a doorway; they need smooth transitions from home to car to office and everywhere in between.” Ok, so that�s seamless mobility. You walk out the door with your information trailing at your heels like your golden retriever.

You know how cable cars switch from one overhead electrical source to another while they are going around San Francisco? That�s also seamless mobility.

�Motorola has the technologies that are making seamless mobility real.� It says so at http://www.motorola.com/content/0,,2738,00.html. But this is the stuff companies say to analysts, who are trained to predict (and sell) the future.

But how real IS seamless mobility? Over at the Arizona Wireless Expo Fink, (an executive from a company that was part of Motorola until less than six months ago) was saying, with apologies to Guy Kawasaki, that it would take a revolution to bring about seamless mobility, although he admitted it would occur.

Taking his cue from Kawasaki�s classic �Rules for Revolutionaries,� Fink talked about breaking down obstacles, thinking different (ly), and thinking digitally while acting analog(ically).

He carefully left out �don�t worry, be crappy,� which was Kawasaki�s way to tell his audience new products should be brought to market quickly without waiting for their perfection. Thank God. Imagine a world of seamless mobility that doesn�t quite work the way it should. Losing your information in the middle of a crowded freeway could engender more road rage than we have now.

Brings back another one of Guy�s rules: don�t make people do anything you wouldn�t do. I�m still one of the only people of my immediate acquaintance (the other one is a former Intel engineer) willing to go through life with a Bluetooth wireless earpiece on my face, connecting me constantly to my smartphone. It ain�t pretty, but it�s portable. Bob Rosenberg calls it my �borg.� It�s my primitive version of seamless mobility.

According to Fink, true seamless mobility involves the unconscious transfer of your information from a home device to your car to your workplace. In order to make the promise of seamless mobility real, you have to be able to translate data as it moves from one kind of device and connection to another. This is called �reconfigurable data flow.� Reconfigurable data flow i provides the performance and flexibility required in future seamless mobility products.

Then there must be an unbelievable amount of integration � not only among devices, but also among forms of wireless connectivity — from cellular to ultra wideband, to RF. At present, those don�t really talk to each other. So you have to expand your idea of connectivity to effortless transfer among carriers, be they digital or analog.

And there must be power without cables. So in order to make this truly useful, you have low power devices that permit you to have hundreds of hours of battery life on the mobile device, so it doesn�t have to spend the day or the night in the cradle.

If you stop to take this vision apart, it�s exceedingly complex.

What�s really cool is that, in my experience with technology, once something is imagined, as �seamless mobility� has been, it will happen. That was the big lesson I learned at Intel: if you can imagine it, you can create it and engineer it. By the year 2008, seamless mobility will not be a tagline at an analyst presentation, it will be an expectation we all have in our lives.

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It should be very hard

It should be very hard to think about greed in this week of death and dying, but in between vigils, greed continues to rear its ugly head repeatedly in the Arizona real estate market, reminding us how little we learn from our mortality or anyone else’s. Can you take it with you? Real estate investors apparently think so. They are willing to do anything to get their hands on homes in Phoenix.

Although I’ve had a real estate license for many years, I’ve never used it as a fiduciary for other people until recently. And now I see why I haven’t. I’ve been helping a few friends try to buy and sell homes (notice I don’t say houses, because these are places friends of mine actually either live or want to live) over the past few months — in the craziest real estate market Phoenix has ever known.

Apparently, what’s going on here now has spread like an epidemic from California. People figured out that Arizona had affordable housing, and they rushed in to buy some and jack up the prices. Although you can read in the media about investors who buy up dozens of as yet uncompleted homes, I’m personally experienced with resale housing, and with real people like my buddy Rafael.

Rafael bought a house in 1997 for $77,000. It was forty years old when he bought it. Over time, he has fixed up the kitchen and added a master suite. He did all the work himself; he owns a lawn care business and he has lots of friends who are laborers. The layout of the home is, shall we say, eclectic, as is the decor. It does not look like a model home.

Rafael has a wife, three children, and a mother who occasionally visits from Guatemala, where he grew up. He also employs his brother, who just got back from Guatemala where he had hip surgery he couldn’t afford in the US. Rafael arranged it for him, and while the brother was gone, Rafael took in the brother’s two children. Rafael, as you can tell, is a wonderful man — a hard working husband and father.

In Rafael’s back yard, there are two roosters, five chickens who sit on their eggs in an abandoned dog house, a puppy, and a trampoline. There’s no room for a pool. Rafael’s youngest child, Vanessa, wants a pool. So Rafael put his home on the market and began looking for one with a pool. He asked me to help, so I listed his home and started looking for homes in the same price range with pools.

On the first day his home appeared in the multiple listing service, for the (to him)astronomical price of $190,000, he had crowds of people trying to look at it. My phone rang every five minutes with desperate realtors wanting to show the home, interrupting my “real” life. A realtor made an offer of $193,000 and we accepted it.

What we didn’t know was that the realtor had not even seen the house. When he finally went by to see it, three days later, he decided he didn’t want it. By this time, Rafael had bid on about three homes that he didn’t get, and finally “won” a house by bidding over the asking price and sending a letter from Vanessa, who is four, telling how much she wanted a pool and including a crayon drawing. We were, in our own little way, learning to game the system.

Rafael had gone into escrow with the new home, putting up his earnest money. He asked me if he could change his mind. Not unless the appraisal was lower than the asking price (which happens all the time in fast moving markets), I told him. So we wait for the appraisal–appraisers are way behind the market.

In the mean time, we put Rafael’s home back on the market. Again, troops of realtors and clients pass through it, disturbing the family. Three more offers appear in the next week: $5000 below the asking price, but no appraisal required; $5000 over the asking price, with all kinds of caveats; the asking price, but a need to move in a week.
All these offers are from investors, and all of them want Rafael to reply within four hours to twelve hours.

Rafael works outside all day long. When he comes home at night, he is tired. He doesn’t want to make financial decisions that will affect the rest of his life over dinner with five kids running around in the room. But if he doesn’t accept something, and keep going through the process, he may lose the chance to sell his home and get Vanessa her pool. Rafael falls asleep worried.

On the other end of this transaction, three investor groups are crunching numbers, trying to beat each other to this house, which they see as a “fix and flip” in a desirable neighborhood. If they don’t get this house, they will write another offer tomorrow.

And the Pope continues to struggle between life and death.

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