To launch your business, it is good to check your focus: forget about how much money you can make, concentrate on getting enough orders from your customers to cover your supplier's minimum production run requirement, in a workable amount of time, profitably.
If you worry about any picture bigger than that, you may freeze from fear or indecision. Keep it simple, focussed and direct.
When Steve Jobs started Apple computer, the idea of a micro-computer was a kids toy, silly. He did it because he loved it. Mircocomputing was a passion, caused him pain, and working on the problems gave him joy.
Today Steve Jobs is a telephone salesman, a profession that did not exist in 1976, so he could have never possibly imagined that in his future.
Don't worry about the future, just get to milestone #3 (enough orders from your customers to cover you supplier's minimum production run requirement, in a workable amount of time, profitably) and then repeat as necessary, ever improving your offering. After 30 years, like Steve Jobs, you look back and say "I had a career!"
Friday, February 5, 2010
Focus and Win
Thursday, February 4, 2010
Interesting Problem
Education is in a crisis, because its model is unsustainable. I deliver a course over the internet to community colleges (CC), and California in particular has problems, so let's take them as an example.
Anyone who enrolls in a CC in California is automatically admitted. The Student pays about $500 per quarter, and the taxpayers kick in about $4500.
Way back when Gov Jerry Brown declared taxpayers should not subsidize leisure education (or continuing ed, definitions are a problem in this field), so that part of the CC has always been self-supporting. This means the admin in these departments (we'll call them CE) know how to budget and at least break even, if not turn a profit.
Over the last 30 years, when a program is going bust, it has been the practice to turn it over to CE, who could make it work.
With the economic downturn, plus a program to give even more subsidies to people on unemployment who enroll in CCs, the increases have been huge. But the physical plant, the buildings and rooms, are designed to hold only so many people, say 30 per class. So what does one do when you have 300 people who want english 101, but room for only 90? You tell people admitted to the CC they have to wait until next quarter. Or longer. It is taking 3 or 4 years to get the right credits to graduate from a CC.
Plus, since the more classes that are taken the more the taxpayers must subsidize, the faster the state of California goes bust. Santa Rosa California has a population of 160,000 people, with 35,000 enrolled in school in some form. On average one person from every home. Some from wealthy homes, enjoying a subsidy. Can you charge the rich more? Nope, that is "means testing." Unfair. It is an unsustainable model.
One idea was have continuing education provide classes at a higher cost to break even, and add credit. The State said no.
The solution is of course the free market. 30 students paying $750 per quarter or 250 per class yields $7500 per class let's say the overhead for the school and physical plant is $2500, netting $5000 per class to pay the instructor. Time three classes is $15,000 a quarter or 60,000 per year.
Yes, 60K is not a lot of money for teaching, but at only 3 class hours 40 weeks a year it leaves a lot of time to pursue other interests. Yes, the cost would be 50% higher then CC for a student, but it would cost the taxpayers nothing.
Why would people pay $750 at another school when the can pay $500 at a state school? First, to get into classes. And this is not speculation.
University of Phoenix was started when a San Jose State University CE instructor noted all of the 25-35 years olds taking night classes, and started a school to cream them off the state schools. He is now a billionaire.
University of San Francisco has a branch in Santa Rosa, and they are enjoying their biggest enrollment ever, even thought their fees are private school grade, 5 times as much.
There is a solution to the crisis.
Tuesday, February 2, 2010
Duncan Signals From The Trenches
But seriously, John, you said something really important- 'I personally would have this as an add on sale... it's interesting to talk about a lot in theory, but I would de-emphasize it in practice...'
Doesn't what you say underline the idea that it's really difficult to come up with a product, and one that passes the 'good idea, doesn't exist' test?
If i speak to people about coming up with a product, they say 'oh you're trying to invent something' and then they may go on to say 'all the ideas like that have already been done, it's impossible to invent a new product nowadays'. I think it's true, the marketplace is more competitive than before. It may have been harder to bring long matches to market in the 50's, but now it's difficult to come up with an idea nobody has done. Teams of R&D people are looking at industries and allied industries checking for opportunities.
What I really like about all your courses, books and so on is the attitude that it's possible, even easy, to come up with a new idea and import and sell it. I have a nagging doubt that it requires being deep into an industry or a craft in order to see the opportunities. I'm sure you see the world full of opportunities people aren't acting on; I'd love to have that view. On the other hand, some of the ideas you mention such as the suitcase aren't in industries you're working in,and as you say shouldn't be acted on, so perhaps it requires having a background in a particular industry to come up with an idea
I think that instead of utilitarian products... e.g. a suitcase that doesn't get stolen, that instead aesthetic products present the most opportunities.. picture frames done a little differently, ornaments... things a retailer can say... hmmm! that's different, I like that. Any new invention or gadget is usually already done. Everyone I speak to says it's impossible to invent nowadays.
On the positive side I've got dozens of ideas to test.
Another point... I've found it difficult to get a manufacturer to invest in a product that requires a lot of R&D, even if the design is good.
I get your point about William McGowan and devoting your life to some idea, but as you say let's make money right now. Shouldn't we pursue markets and ideas that are easily realizable?
Safeway Drops FF Miles
Although I love my Alaska Airlines FF mile membership, which generally get me first class seats at lowest fares, it bothered me when Safeway got in the act, as well as other 3rd party vendors. Of course the cost of FF miles would be in the price of the food i bought, so it was not really a deal. It was an obligation to take miles, when all I really want from SAfeway is lowest prices.
Monday, February 1, 2010
Rather Rule Over Ruins
Mish Shedlock is covering the financial meltdown coming to government workers everywhere and their pensions. The solution of course is self-employment, and it might even be condign punishment as govet workers enter self-employment and find out just how unnecessarily hard they made life for the self-employed, when they try it themselves.
But Mish has also read the govt investigations of the tarps and bailouts, and shows, graphically, the Geithner is lying. The acts are criminal, but the powers that be would rather rule over ruins than be laborers in the reconstruction of our country.
Tim Checks in With Advice
Past seminar participant Tim Howes sends me his newsletter every month, and I extract this quote from his missive, and add a comment:
Unless you’re starving, don’t have a roof over your head or are facing a serious illness, times aren’t that bad. Go work in a soup kitchen or travel to some destitute 3rd world country (like Haiti). Even if you are broke, you still have much to be thankful for in comparison.
Yes, the antidote to the bad feelings from failure is gratitude... the innocultion is charity. While flush, spread it around, and you won't care when you are busted. Show gratitude when flush, the busted is merely another adventure...