Entertainment Excellence From China

For your weekend entertainment... the fabulously talented People's Liberation Army Symphony and Choir...  if you ever sat through the real thing, these are hilarious...

http://www.youtube.com/watch?v=JBnfurKdT-Q&NR=1

http://www.youtube.com/watch?v=kfxTcD0x9BM&feature=related

Here is a French hit

http://www.youtube.com/watch?v=P8E2T6UQzBo&feature=related

Extra credit... this is catchy...

http://www.youtube.com/watch?v=JE2quKxZrnw&feature=related

Let's not Leave out the Soviet Red Army Choir... check out Igor on the balalaika:

http://www.youtube.com/watch?v=0lNFRLrP014

John

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More From Duncan

On Aug 21, 2010, at 12:13 PM, Duncan wrote:

^^^ Long ago I used to stress this, in the book I refer to the perturbability rate, meaning new design should be quite marginal... "it does not take much to achieve the necessary "new" in new design...  I need to emphasize this more... again....^^^

There are two issues that are bugging me... how big the change has to be, and how much of this comes from the designer.

Your glass candles, I suppose you asked retailers for candles made of glass, where the light shines through the glass and creates a nice effect. Oil table lamps already existed that cast a nice glow, so I guess the innovation was just to do it in the shape of a candle..?

***Essentially, yes...***

The rug in your video... I don't know enough about the sector to see what was new when you touted this to retailers. It's nice subjectively, but what was unique? Was it the pattern, or the way you combined wool of different color? Or was this a follow on product from a really unique product you had previously introduced? I'd have difficulty telling a retailer exactly what is new.. but maybe speciality carpet retailers would see something different in this rug.

***Right...***

Perhaps because I'm not knowledgeable enough about my industries, I have felt like I have to introduce large innovations to reach the 'good, doesn't exist' threshold. Is it simply enough to have something that people say 'that's nice'? For example, there is nothing new about a t-shirt with a new pattern or logo, but retailers might like it. We can't articulate the difference.. you just look at it and say 'ahh that's nice'. Similar to your rug? Kind of like an implied 'good idea, doesn't exist'?

*** I saw a T shirt  a year ago, with this statement printed:  "There are 10 kinds of people in the world, those who read binary and those who do not."  Now that is hilarious.  If you read binary.  The thing is selling like crazy.  But is is just another tshirt.  (10 in binary means 2 to the rest of us, but for some reason, in an ADD fit, i learned binary once long ago.  I can also reckon on an abacus.)

If this is true then it seems like you just need a desire to be in the industry. No great requirement to come up with anything innovative. Just simply something people look at and like. BUT any designer could come up with, say cutlery, which has a unique design that looks nice.

***You must have passion (suffer) and find joy solving the problem.  Then you can work with great designers.  It otherwise does not take much...  this is another reason why I find it so frustrating as to why more people do not get started.***

There's so many permutations of design that it's easy to come up with something slightly different that's 0.01% different from anything that's ever been on the market. But what work am I doing here? I'm just telling the designer to get to work.

***You seem to be running to the other extreme.  Not 100%, and not .01 %, more like 7 or 8 percent, if this can be quantified, although personally I think it is more of a qualification, not a quantification.***

John

Duncan

Here is the beginning of my post, delete this sentence. And here is the rest of it, delete this sentence.

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Duncan Jumps In Again

On Aug 21, 2010, at 11:03 AM, Duncan wrote:

John,

Read your recent blog post regarding the fact that a product that people want is more important than money. I'm coming to the firm opinion that it's not just about a product that could make people's lives better, but also one that is within your capability, and can be profitable. Capability is determined by your capitalization, level of authority in the industry and so on.

***You have to pay your dues, so yes, but see below, we've got an error based on a typo...***

Sure.. anyone will build up capital, experience and authority by being in business and bringing products to market. Question is, whether it is possible to come into an industry that you just have an interest but no employment or business experience in, decide on a product and get it developed. Seeing my and others difficulties in getting suppliers to play ball without paying money for r&d, I'm starting to think that the product has to be quite a modest change from an existing product... Something that doesn't require too much time and money to change, and certainly no in depth prototyping, reprototyping and testing. My super expanding case just asks too much of the supplier from a rookie importer who's asking them to front all the development. I'm not disappointed, just wish I'd focused on products that are easier to develop.

^^^ Exactly...  we learn, and it becomes cultural capital, that you will pass on.  You win!^^^

However... if you're making a small change you have to have your ear closer to the ground in whatever market you're entering. It's easy to see from outside the luggage industry that expanding bags are useful. But to see the small things that could be improved or developed you might have to already be working in luggage. Example, a company recently introduced suitcases with no piping structure around the edges... they knew a material that could keep the shape well enough not to need it. In my opinion, the value of this 'benefit' is highly marginal. Could a small company have been started with this innovation? A problem I have is understanding how big the change or innovation must be to support a new company.

^^^ Long ago I used to stress this, in the book I refer to the perturbability rate, meaning new design should be quite marginal... "it does not take much to achieve the necessary "new" in new design...  I need to emphasize this more... again....^^^

The reason for my questioning is because I'm trying to decide between two strategies, one where I take an easy part time job that pays the bills to concentrate on my own projects, and another where I fully invest in the job, gain experience as an importer/buyer for someone else in a particular industry, and gain reputation, capital and industry experience. Don't get me wrong.. i can muster $20k or even $100k to develop a product with a factory, but if I have to do that I'd rather go for a long term strategy of working for someone else and building my capital and experience more slowly.

***You are talking yourself out of starting a biz...***

Well, my situation is I work 20 hours a week, and work on my own stuff the rest of the time. I don't learn anything during those 20 hours, and I've been in the situation for some time so I'm thinking if I work as a buyer I will develop myself during those 20 hours. Of course, I will have less time to pursue my own stuff, but on the plus side I'll have more money to spend on

the business as well.

^^^Wishful thinking , I think...^^^

***Now, deep experience is mere talent, you can hire that on royalty...  your job is to listen and respond to customers... but yes, work within your capabilities to start...

Perhaps I've underestimated how much I should rely on and exploit the talents of the designer. Maybe it is only really a case of convincing a good designer, whose products will usually sell, to work with me. All I provide is the spark of inspiration for something a little bit different. Could that be as simple as a theme or a feel for a collection of bags, I'm not sure.

^^^Man o man, you are getting there....^^^

John

Duncan

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Alan Checks in On a Post

 Alan is responding to this post...

Hi John,
  My first thought upon reading through this thread is if s/he built a 1/2M business why is there so much urgency to move to a small import/export business?  Did he lose the business or just wants a change or it isn't making him as much income as he needs?  Also, did his spousal arrangement change?

I can relate to what he's saying though.  You look at your bank statement/investments, see the balance steadily declining and every day that goes by the pressure mounts to do something, but you're paralyzed fearing that you'll make the wrong decision and be in an even worse situation than you were before.  You have daytime nightmares of ending up on welfare or in a shelter, you drive by the poor side of town and think that maybe you'll be there in another year and could you survive?  Worse yet, if you have dependents who look to you for their comfort and security, you fear letting them down.  What would happen to little Joanne if you couldn't afford her braces, tennis lessons and organic food and she had to live in an apartment on the wrong side of town and walk to school dodging winos passed out on the street?  I know it sounds extreme and it would probably never come to that, but the papers/news have stories just like that, albeit to a very, very small minority of people, but you think "that could be me".  It doesn't help when "everyone" knows that 4 out of 5 business fail within the first year (at least that's the adage).  

I found that there's a word for this, peniaphobia, fear of poverty and I think people like your correspondent (and myself) have it to one degree or another, not because we're born with it, but because we fear that poverty is just around the next corner if we make the wrong decision.  Fear of failure, lack of confidence, poor self-image all contribute to it and you find yourself paralyzed, unable to make a decision.  Under those circumstances, the cog in the machine job that you hate and is killing you with stress seems like the lesser risk.  So, you stay working for someone else, dreaming that there's a better way, knowing there's a better way and seeing people like you, John, who have successfully found it, but still being unwilling to take the risk ourselves.  I think your correspondent is right at that point or near it and that's why he wants a rock solid guarantee that he'll be successful before he makes a decision to try.

The need for a business loan is separate issue related to the urgency and expectations of income, I think.  I saw this in your class last Spring, students who were looking for the big score and wanted to go out and borrow $100,000 to start their business off.  As you noted then, they probably had little chance of getting an unsecured loan for that amount, there was a lot more risk involved and the profitability wouldn't necessarily be any greater than making repetitive smaller transactions.  I think those students had gotten ahead of themselves, they were already thinking of what they could buy with the profits rather than thinking of how they could start and grow a small business from scratch with the smallest amount of risk.

Your correspondent mentions that there is "no money" to start the business.  You talk about $5000 as a starting point.  My reaction is that $5000 does seem like a good starting point and if your correspondent doesn't have it then it makes sense to stay in that dead end job for another year and couple it with more frugal living until the $5000 can be saved.  It doesn't fit into your correspondents "urgency" timeframe perhaps, but there is a low point where all of the advice in the world isn't going to solve all of the obstacles within an urgent timeframe.

Let's suppose your correspondent is in a situation that a lot of people reportedly find themselves today; they've lived lived beyond their means for many years and now must pay the piper, but have so much debt they can't.  I don't know if this in anyway related to your correspondents situation, it's just a suppose scenario.  I don't have a lot of sympathy for them and perhaps that makes me a "bad" person, but while they were enjoying their fancy car, flat screen TV, expensive vacations, state of the art cell phones and dinners out, I was saving my money and paying off my condo and car loan.  To those people, including your correspondent if he is in this category, I say get on Craig's list or eBay and sell off the luxuries and then sell off the almost luxuries and then sell a little bit more.  Sure, they probably won't get near what they paid for them, but they can't be choosy in dire straits.

Just getting rid of cable and cell phone service for a year is probably, what, $1200 or so?  Sell off the plasma TV for $500, go to the library instead of buying books at Borders, go to Safeway instead of Whole Foods and make meals at home instead of going out.  Trade the expensive car in for an older less expensive model even if it isn't stylish and stop buying clothes unless it's because your kids are outgrowing them and even then check the Goodwill and all the sales and buy cheap, non-designer labels.  I bet that $5000 would come a lot faster than your correspondent thinks.  It's just that too many people can't imagine living without an expensive cell phone package, an XBox and cable.

You've said a lot of this in your responses to your correspondent, but he doesn't seem too convinced.  I do have some understanding of his plight because of my own fears and lack of confidence and I have them even though I do have $5000 I could risk.

Alan

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Wine Exports Disasters Loom

An article on Wine Exports, with my comments between the   ***   ***:

It's impossible to spot from Interstate 5, but one of the success stories in the Obama administration's ambitious effort to double U.S. exports by 2015 can be found in a carefully watched vat of pinot noir at Willamette Valley Vineyards. 

*** “Doubling US exports by 2015” is another move to rip off taxpayers and blame the black guy.  The only way to do this is with massive subsidies, which rip off the taxpayer and the domestic consumer.  We could do this 60 years ago, but we no longer can.  This will fail, except for those who get early cash, and the failuer will be pinned on Obama.***

The Turner-based operation is joining the first major wave of Northwest wineries moving to expand their sales in Hong Kong -- a fast-emerging world wine capital -- that is a gateway to an even larger market in mainland China. 

***Well, somone has not done their homework.  Wine has been pouring in for about five years, at a bout $3 a litre.  Sounds like the plan is to hurry up and go out of business.***

And the pinot noir Erik McLaughlin is preparing to ship to burgeoning Asian markets, starting with Hong Kong, is nothing less than a liquid barometer for broader efforts to sell U.S. goods in foreign markets. 

"This is a significant venture for us," said McLaughlin, Willamette Valley Vineyards' national sales director. "It's truly the gateway to all of Asia." 

***Uh oh, I’ve seen this before, China fever.***

The wine McLaughlin wants to ship to Asia will help his bottom line, but in the larger scheme it is more significant for its symbolism than its raw, economic effect. His wine is literally a drop in the bucket of the larger effort to reboot the nation's stalled economy by selling more goods and services overseas. 

*** At $3 a litre?  Does he think he will get more?  Or is he hoping he can dump enough at $3 a litre to keep his domestic price high, and make it all even out?  To whom does he propose to sell?  How will he beat out all the other countries?  How will he beat Gallo, who has offices in Hong Kong and massive taxpayer subsidies?  Countless small wineries will shipwreck trading with China.***

"We need to export more of our goods," President Obama declared in January's State of the Union address. 

***How come?***

"Because the more products we make and sell to other countries, the more jobs we support right here in America. So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America." 

*** This is nonsensical, and as a practical matter subsidizing exports only harms taxpayers and consumers.  This plan will fail too, like all other Bush/Obama plans.***

In a divided nation, the export goal is a rare point of agreement. The U.S. Chamber of Commerce supports it as do politicians across the political spectrum. Sen. Ron Wyden, D-Ore., for example, has long called for a robust increase in exports. So too has House Minority Leader John Boehner. Wyden estimates that only 4 percent of U.S. companies currently export. 

***Because the other 96% are too smart to export.  Our top three exports are agriculture, which destroys other countries ability to feed themselves, machinery and equipment, which ends up in the hands of our enemies, and oil, to buy friends.  the political spectrum is hardly divided, the dem and repub political masters together no longer believe in America, and agree they should stay in power no matter what.  But to do so, they need someone to blame...***

Wyden, who chairs a Senate subcommittee on International Trade, says boosting wine exports to Hong Kong is a positive step even if in dollar terms the total is small. 

"Sen. Wyden has been pushing the administration toward an export promotion strategy because it really is the biggest untapped opportunity we have for creating jobs and growing our economy here at home," spokeswoman Jennifer Hoelzer said. "This is an excellent example of how helping American businesses navigate trade policy and find markets for their goods overseas can create new opportunities for all sorts of Oregon businesses." 

***The vast untapped market is USA.  Buying and selling outsife of usa is a result of bad government policy.  if the politicians wanted jobs, they would reduce regulations and interference.  Exporting one’s way out of ecnomic trooubles never works.  But they know that.  Small wineries will overextend, the cash will go to huge wineries, “get big or get out” policy will be advanced.***

The Republican view is much the same, though there are sharp difference over specific terms of trade deals with individual countries. 

"Opening the door to new customers for American employers as soon as possible, especially at a time when businesses are critically short on customers, will have a direct and positive impact on supporting and creating American jobs," Boehner said in a December letter to Obama. 

***The sharp disagreement is repubs want the money to go to repub donors, the dems want the money to go to dem donors..***

And while wine from Oregon is a tiny part of overall trade policy, the pact with Hong Kong drew the attention of Commerce Secretary Gary Locke. 

"This agreement will help bring more American wine from all 50 states to Hong Kong's consumers and we are very excited by this development," told the American Chamber of Commerce and Trade Development Council, Hong Kong in May. 

***Florida wine...? alaska wine...? yeccchh... One minor problem, becuase of previous USA export policy, USA wine has a terrible reputation in Hong Kong and China.  More policy efforts will make for more bad reputation. ***

While Hong Kong by itself may be a growing market, it's proximity to, and ties with China make it appealing. China's "emerging middle class is sucking up merchandise," said John G. Murphy, vice president of international affairs for the U.S. Chamber of Commerce. 

*** Yes, at $3 a litre, both bad and good wine is shipped in and treated as junk... the logistics are poor to keep the cost down, why pay $1 a bottle more to keep it in temp controlled carriers? So when a bottle of usa is opened, the chinese gasp, no matter how good it started out, it is bad when opened.  USA export support is the worst thing that could have happened to usa wine exports in asia.***

This is the world that wineries from Oregon and Washington joined in May when they signed an agreement with Hong Kong to trade -- and promote -- wines from the region. It was helped by Hong Kong's desire to increase its profile in not just wine, but the art world and other luxury goods. 

***Yes, people in Hong Kong signed agreements that say USA govt officials will give taxpayers money to people in Hong Kong to promote Washington and Oregon wines, with no obligation on their part.  The USA money will increase people’s desire to buy wines.  if and when the people of hong kong act on that desire, they will buy French wines, not USA wine.  IN advertising, the benefits inure to the leader.  When Royal Crown Cola advertises, people buy more Coke.  When taxpyers fork over money to Hong Kong wine dealers, hong Kong will buy more French wine.  Our trade officials likley know this, but who cares.  They get to visit Hong Kong on our money.***

It also didn't hurt that Hong Kong is a gateway to China's immense market and that the principality in 2008 scrapped an 80 percent import tax. Wine imports jumped to nearly $500 million, almost 10 percent of which came from the U.S. 

***At $3 a litre, why does not anyone mention this?***

Then, in June, Oregon and Washington became the first entities -- nudging aside wine powerhouses such as France and California -- to sign a memorandum of understanding with the Hong Kong Commerce and Economic Development Bureau. 

***ROFL... we beat France and California onto an agreement to burn Washington and Oregon taxpayers, and raise our domestic prices.  Go team!***

While overall shipments remain relatively modest -- Washington exported more than $720,000 worth of wine to Hong Kong in 2009, while Oregon exported about $70,000, according to industry figures -- winery owners in both states say there's promise of much more to come. 

"The wine business there has just gone crazy," said Alex Sokol Blosser, co-president of Sokol Blosser Winery in Dundee. "Japan may still be the big kahuna in terms of Asian markets for us, but you really can't afford to overlook Hong Kong at this point." 

***I’ll bet Blosser is out of business in three years, based on nothing more than that statement.  If his domestic biz was sound, he would not be looking to export. Ther eis nothing crazy about cutting 80% taxes to zero and seeing an increase in business. if we want to see wine sales increase, then cut USA taxes to zero on wine, and watch USA sales of wine blossom.  Instead we’ll see small USA wineries fold, first those who try to export to China.***

An intriguing allure of Hong Kong and, beyond that, mainland China, lies in the fact that so many other export markets already are at capacity, said Ronni Lacroute, co-owner of WillaKenzie Estate Winery in Yamhill. 

"It will take years before we're at the same stage as we are in U.S. markets," she said. "But compared to those markets, Hong Kong and China have infinitely more potential for growth." 

***More crazy talk.  China market is at capacity right now. Outside of natural disaster, All markets are at capacity.  So it is just a matter of growing with a growing market.  This takes serving customers through passion and joy.  Export promotion has nothing to do with success.***

In Washington, new clusters of export brokers are popping up to help groups of seven to 10 wineries combine efforts to crack the Hong Kong market, said Lily Ferguson, the Washington Wine Commission's export manager. 

***Yes, preying on distressed winemakers and shipping out good stuff at $3 a litre, which is disrespected and handled poorly.  Fist step, get rid of the Wahington Wine Commission.***

In terms of sheer volume, export figures from Washington to Hong Kong weren't overwhelming when last reported, at the end of June 2009, Ferguson said. But she predicted much higher figures when new numbers come out later this month. Nationally, however, Hong Kong has become the fourth-largest importer of wine from the United States. 

***At $3 a litre, on average.***

Given the costs of shipping and marketing, larger producers are likely to pave the way for smaller operations, said Al Portney, vice president of international sales for Washington wine giant Ste. Michelle Wine Estates, which owns Erath Winery in Dundee. 

"We have the means to invest and develop markets like this," Portney said. "In the end, I think a lot of people will benefit from this." 

***Of course not in a free market.  Giant Ste. Michelle would not export an ounce if it were not for massive subsidies.  Ste. Michelle will be buying up the small wineries for pennies on the dollar as the small wineries go under as a part of the US Govt “get big or get out” policy.***

The White House and economists say exports by small businesses are helpful in that they also open markets for larger sales of goods and services from bigger companies. 

***Hmm... true, and it directly contradicts the previous paragraphs, but who cares?  Point is, if true, why not step back and let that happen?***

Right now, the White House will take any help it can get. The Commerce Department reported last week that June imports jumped while exports dropped, pushing the trade gap to its widest point in two years. 

***the Obama administration’s job is to take the blame for Bush/Clinton policy failures, so it cannot expect any help.***

More than 250,000 small businesses are currently exporting goods and services, according to the federal records. Yet in dollar terms, those firms account for about one-third of the total value of exports. 

That imbalance is why groups like the Chamber of Commerce and Republicans in Congress are pressing the administration to move forward with trade agreements. Agreements with Colombia, Panama are currently pending but disagreements on Capitol Hill have stalled progress. 

*** Healthy economoies export healthy amounts.  If we want to promote exports, then reduce burden of govt on domestic businesses. No one, but no one, is calling for that.***

Yet even if political and economic differences block those agreements, Hong Kong's door will remain open for Oregon wineries, which supporters and the White House hope will lead to bigger deals and a better economy. 

***the only differences is who gets the loot coming from the rip-off of taxpyers and consumers.  Dem or repub?***

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More On Start Up Concerns

Folks,

Here is an exchange I've edited regarding problems in starting up a business.  I am working on this aspect of start up motivation, so I'll let the argument speak for itself.

^^^^^^^^^^^

A. The part of your story that I am most interested in is the experience of urgency, the idea that times- a-wastin, and the sense that you are up against a wall.  I think that is a very common element in keeping people from thriving, and it is something for which I'd like to develop a counter argument.  

B. THOSE THINGS WILL - PERHAPS - KEEP SOME FROM THRIVING.  BUT THEY ALSO WILL - DEFINITELY - MOTIVATE OTHERS TO "CUT TO THE CHASE" AND FIGHT THEIR WAY OUT OF THEIR PREDICAMENT.  I'M NOT SURE SPEAKING IN THOSE TERMS (IMPLYING THAT THEIR URGENCY IS INVALID OR MISDIRECTED) TO THE SEGMENT THAT IS FIGHTING, IS VERY PRODUCTIVE.  IT COULD BE PERCEIVED AS CONDESCENDING AND INAPPROPRIATE, AND THEREFORE COUNTER-PRODUCTIVE.

A. I shouldn’t want that.  What I would like to get at is what if one felt the urgency you speak of, feel what you feel, but did not react the way you propose.  As the drill sargeants say, “your first reaction will get you killed.”

What if it turns out that “fighting your way out” is unproductive.  What if it does not work in general, and for you in particular.  How will being worse off in 2 years be an improvement over today?

As you probably know, you are hardly alone in your predicament.  The other element is the idea that there is a system that works, that you can follow, and get a reasonably guaranteed result.  Business is more interesting and important than that. 

B.  IF THE NEED FOR PROFITABILITY IS URGENT AND FOLLOWING A SYSTEM THAT WORKS DOESN'T PROVIDE INCOME IN THE NEAR TERM, IT IN FACT DOESN'T WORK IN THAT SITUATION.  

A. That is axiomatic.  But what if one were to step back and ask a harder question:  Is profitability urgent, or is self-transformation urgent.    If your heretofore premises have not been reliable, then perhaps the need for change is internal, not external.

But what about the need for income for the near term?  As one gal said to me, “what is the worse that can happen?”  Rent doesn’t get paid, you sell something to feed the kids, life goes on.

At this point I would refer people to Dave Ramsay , since he has a game plan, kindly expressed, pedagogically sound, and rational.    But when Ramsey says “get a better job”  I’d say start your own business.  When he says when you have a cushion, invest in stocks and bonds I say buy gold (this week, who knows next week...) Once your attitude is: “another aspect to my enterprise is personal transformation,” then the urgency moves to the background, lifestyle moves to the fore.

Steve Jobs never thought he would end up selling telephones.  He has no idea what he will be doing ten years from now.  But Steve Jobs certainly considers Apple a venue for self-improvement and actualization.

B. STEVE JOBS ISN'T WORRYING - AND NEVER DID - ABOUT WHETHER THE NEXT MONTH'S RENT IS PAID OR HIS KIDS HAVE LUNCH MONEY.

A.  O sure he did.  he was once so hard up he famously burned his partner Woz by not sharing a few hundred bucks profit on a sale.  It is not possible to assess another’s experience of anxiety, but I think we can be pretty sure Jobs has experienced life in various extremes. Jobs has been busted a couple of times, and has come back.  He did not fight, he changed.

I do hear your specific request for business plan outline, and if I hear you correct, you want content.  What I do not understand is why you would want to plug in my info into your business plan.  You need to plug in your customer info into the biz plan.  No two businesses are alike.

I think this is the "tough question"  you have in mind, from the transcripts:

“B: realistically, how many products in the $40 retail range does it take to get a business onto relatively solid financial ground, in gifts and housewares, your field?”

The question does not have the word "customer" in it.  It seems to me that the question should be "B: realistically, how many customers in the $40 retail range does it take to get a business onto relatively solid financial ground?”

B. "CUSTOMER" WAS NOT LEFT OUT OF THE QUESTION; IT WAS IMPLIED INTO THE QUESTION.  AS IN, "HOW MANY PRODUCTS (THAT ARE ORDERED OR RE-ORDERED BY THE REQUISITE NUMBER OF CUSTOMERS AND DELIVERED ON TIME) ARE THERE IN A TYPICAL PRODUCT PORTFOLIO THAT IS REASONABLY PROFITABLE?  IN OTHER WORDS, HOW LONG IS IT GOING TO TAKE IN GIFTS AND HOUSEWARES BUSINESS, TO EXPECT THAT IT REACHES SOLID FINANCIAL GROUND?  THIS IS BASIC "BUSINESS 101".

A. If basic business 101 as you perceive it has not worked out so well before, perhaps it is time to change the stipulations, or change ones own philosophy to biz 101.

Also, I am sure you understand that all business plans are dead wrong and should be expected to be.  They are benchmarks so you can adjust as they go wrong.  As I understand it you want a biz plan with hard numbers so you can borrow money.  But I think the fundamental error is we need to borrow money to start a business.  

B. SOUNDS GREAT IN THEORY BUT EVEN YOU SAY THAT THERE ARE SOME COSTS ASSOCIATED WITH ANY STARTUP, EVEN THIS KIND.  IF THERE IS NO MONEY... LET ME REITERATE... NO MONEY... FOR ANYTHING OTHER THAN BASIC LIFE ESSENTIALS (FOOD, WATER, SHELTER), THEN PERHAPS A BUSINESS LOAN MAY BE IN ORDER?  TRUST ME, IF IT WASN'T NECESSARY - READ THAT "NOT OPTIONAL" - I WOULDN'T DO IT. 

A. If there is money for food, water, shelter, then there is money.  Reduce the costs of the above, and then you net extra money.  It may involve moving, changing diet, and getting free water, but it can be done.

You can come up with $5000 by working at anything and waiting on the launch of your biz.   $5000 rolled over and over as $10,000 in sales grows.  How does giving someone 7% or more help you get ahead?  Better to get some cash stashed and then move forward.

One risky aspect of using a business plan is that it may be abused to get a loan to finance a lifestyle, with a hope that maybe a business will take off. 

B.  I UNDERSTAND THIS MORE THAN MOST.  THE POINT OF TELLING YOU THAT I SUCCESSFULLY BUILT A $.5M BUSINESS FROM AN $8K INCOME TAX REFUND WAS TO ILLUSTRATE THAT VERY POINT.  I NEVER BORROWED A PENNY AND NEVER GAVE ANYONE EVEN 1% OF THE EQUITY IN THAT BUSINESS.  BUT THAT SITUATION WAS VERY DIFFERENT IN THAT I HAD A SPOUSE TO PROVIDE THE BASIC ESSENTIALS FOR OUR FAMILY, WHILE I WAS FREE TO DEDICATE 100% OF MY TIME AND ENERGY TO BUILDING THAT BUSINESS.  I ALSO UNDERSTAND THAT YOU'RE TALKING GENERALITIES, AS IT APPLIES TO TEACHING YOUR COURSE.  BUT I'M SPEAKING TO MY SPECIFIC SITUATION.  

A. Too many moral hazards with a business loan, not to mention that if your business works, why share 8% interest with someone else?  

When you get to it is a good idea and does not exist after visiting those six retailers "six times each" then you get the samples, get the facts on costs and logistics, and then go back and ask those very retailers  Now the tough questions come:  "May I have your order?" 

B.  YOU'RE DEAD WRONG, IN MY OPINION.  YOU'VE CLEARLY NEVER BEEN IN THE SITUATION I'VE SPELLED OUT.  I DON'T HAVE THE LUXURY OF TAKING WEEKS AND PERHAPS MONTHS TO FIGURE OUT WHETHER IT WORKS.  I'M MORE INTERERSTED IN A QUICK-AND-DIRTY FEASIBILITY STUDY (BUSINESS PLAN FINANCIALS - "BUSINESS 101") TO SEE IF THIS IS A WORTHWHILE USE OF MY LIMITED TIME AND RESOURCES. 

A. Well, you do not know that, but what if I have, and my argument is from being in the same position, but taking a different path out.  

When you say you have a minor disappointment that you expected fundamental start-up information, I am not sure how one can get more fundamental than "get your customers first."    So your comment is a bit mysterious to me.  

B. JOHN, YOU SEEM LIKE A VERY NICE GUY AND YOU'VE CLEARLY HAD THIS DISCUSSION MANY TIMES.  HOWEVER... I SUSPECT YOU'VE NEVER BEEN IN THE SITUATION OF HAVING TO START A BUSINESS WITHIN THE LIMITATIONS THAT I'M CURRENTLY FACING.  AND I HOPE YOU NEVER DO, MY FRIEND.  

A. Again, are you assuming the only reaction to the given circumstances is the reaction you have?  What if I have in fact been in such circumstances, and found a way out other than you presume is the best way out? But let me ask you, exactly what do you consider fundamental start-up information?  My business plan?  That's already in the book.  And I can give you others.  But those would be a waste of time.  

My providing you with market data for your business plan?  That you can and should do yourself, as I lay out in the book.  

B. I AM VERY AWARE OF THE "GIVE A MAN A FISH AND HE'LL EAT FOR A DAY; TEACH HIM TO FISH AND HE'LL EAT FOR A LIFETIME" THEORY.  BUT AGAIN, IF IT TAKES A LONG TIME TO TEACH HIM AND HE'S NOT EATING IN THE MEANTIME, HE'LL STARVE!

A.  But you are not in any risk of starving.  You are not in extremis.  You have plenty of options.  

Anyway, I thrown out various thoughts to see if any of them help, and I am keen on this discussion, for as I said, I think very many people are in the same boat as you.  Maybe even me, but that is irrelevant. Most people think if they play the game as laid out by those in the commanding heights, they can expect certain results.  This mindset is doubly deleterious: its not true, never was, plus those who fail at it think there is something wrong with themselves.  It just aint so.  Your success depends on your customers, and you ever more better serving them.  The only hard part is getting the product right.  

Anyway, tell me exactly what you want in terms of fundamental info.  I'll see if I can help. 

B.  I APPRECIATE THE OFFER BUT AT THIS POINT I CANNOT AFFORD TO DEVOTE THE MAJORITY OF MY TIME AND ENERGY TO THIS PROJECT.  I MUST PURSUE MY OTHER BUSINESSES VIGOROUSLY TO PAY THE BILLS, AND WILL ALLOCATE ANY LEFTOVER TIME TO THIS.  IT IS INDEED "HARD TO REMIND YOURSELF, WHEN YOU'RE UP TO YOUR BUTT IN ALLIGATORS, THAT THE INITIAL OBJECTIVE WAS TO DRAIN THE SWAMP!"  I'M DEALING WITH ALLIGATORS.

A. But I am most interested in fleshing out and countering what I see as erroneous premises, the ones I think that are common in USA circa 2010, and keep people from thriving in business.  

B. A WORTHWHILE ACADEMIC PURSUIT FOR YOUR PROGRAM, I'M SURE. 

A.  I'd like to ask you some "tough questions" too in relation to this topic, that I think, if you were to answer, may yield some useful observations.  For example, how come you told me about your background?  

B. MY ONLY PURPOSE FOR TELLING YOU MY BACKGROUND WAS TO GIVE YOU THE SENSE THAT I'M NOT SOME SNOTTY NOSE KID WHO DON'T KNOW SH*T FROM SHINOLA, THAT I PROBABLY HAVE MORE EXPERIENCE AND KNOWLEDGE IN STARTING SMALL BUSINESSES THAN YOU, JUST NOT IMPORT/EXPORT BUSINESSES.  THAT I ADMIRE WHAT YOU'VE DONE, RESPECT YOU FOR YOUR KNOWLEDGE AND EXPERIENCE IN IMEX, AND TO GIVE YOU A SENSE THAT IF I ASK QUESTIONS,  I'M NOT DOING IT TO HEAR MYSELF TALK.  AND THE FINANCIAL STUFF WAS TO GIVE YOU AN APPRECIATION FOR THE URGENCY. 

A.  Let me dissect this:

 MY ONLY PURPOSE FOR TELLING YOU MY BACKGROUND WAS TO GIVE YOU THE SENSE THAT I'M NOT SOME SNOTTY NOSE KID WHO DON'T KNOW SH*T FROM SHINOLA,

*** Surely I would not base fundamental advice, true in all circumstances, time and place on one’s background!***

THAT I PROBABLY HAVE MORE EXPERIENCE AND KNOWLEDGE IN STARTING SMALL BUSINESSES THAN YOU,

***This you cannot know, since I have carefully said nothing about my work...and what does it matter, I learn form people with less experience all the time.... “out of the mouths of babes” and all that...*** 

JUST NOT IMPORT/EXPORT BUSINESSES.  THAT I ADMIRE WHAT YOU'VE DONE, RESPECT YOU FOR YOUR KNOWLEDGE AND EXPERIENCE IN IMEX, 

***impertinent, since I do what I do for me, not to impress others...  and I only pass on what I learned, since people ask... I do not have a ego investment in what I teach, I only teach because people keep signing up for my courses.***

AND TO GIVE YOU A SENSE THAT IF I ASK QUESTIONS,  I'M NOT DOING IT TO HEAR MYSELF TALK.  AND THE FINANCIAL STUFF WAS TO GIVE YOU AN APPRECIATION FOR THE URGENCY. 

***  Here are two themes I keep hearing, not unique to you, which I need to explore more... entitlement and urgency.  “My background is unique, therefore I should be handled uniquely”:   “my circumstances are urgent.”  Joe Girard says what can you offer each customer that no one else can have, so I am vilating his rule inasmuch as I give everyone the same thing.  But there you have it.***

A. Do let me know if I can address your questions more directly, and do let me know if you are willing to pursue this other thread as well...

 I UNDERSTAND THAT YOU PURSUE THIS LINE OF ARGUMENT FOR ACADEMIC PURPOSES, AND I HOPE IT'S BEEN PRODUCTIVE.  I DON'T BELIEVE THAT I FIT THE TYPICAL PSYCHOGRAPHIC FOR YOUR COURSE, SO IT'S PROBABLY OF LIMITED USE FOR THOSE WHO ARE MORE TYPICAL.

*** But the reason I’ve taken time on this is that this is a very common scenario.***

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The Gift Of ADD/ADHD

Sounds like he had the gift:

The best way to have a good idea is to have lots of ideas.

- Linus Pauling

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Getting Ready For War - AgitProp

We are being treated to a steady stream of anti-Moslem propaganda, such as the story of the woman who had her nose cut off as some punishment.  Today we hear of a Saudi judge studying whether a hospital can  paralyze a man as punishment for the perpetrator who paralyzed a man in an attack, under the Judeo-Islamic rule of "an eye for an eye."

Comparative law is a fascinating field, and scholars wonder what the fuss is about this legal system.  In USA law, we have people uninterested in the case decide the sanction.  In Mosaic law, upon which Sharia is based,  the victim decides the sanction, up to an eye for an eye.  One really should study and understand a law given to His people by God himself before one condemns it.

The genius of this system is it is a great leveller.  A rich man injures a poor man, takes out an eye, the the sanction is the rich man must give up an eye.  Now, the rich man does not want to give up an eye, so he pays whatever the poor man demands for the poor mans eye.  No judge or disinterested party decides what the price is.  The victim decides.

If a poor man inflicts a loss of eye to another poor man, the perpetrator poor man will agree to work the victim's field one day a week for life, or some such sanction.  Again, no third party decides, the two involved decide.  It is a sort of free-market justice.

Should a poor man injure a rich man, the poor man can offer little in return for his eye.  Allah, the all-merciful, favors the compassionate.  A rich man who forgives an injury done by a poor man can gain great blessings from He who metes out Ultimate Justice.

The article cited above says thieves commonly have their hands cut off.  This is nonsense.  If so you would commonly see one-handed Moslems in Saudi Arabia.  What you see is people quickly settling up in Saudi Arabia, because the executioner is third generation and enjoys his work.

It would be sad if people believed the government press and were persuaded to attack Iran.

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Start Up Concerns

K,

Last week you pressed a line of inquiry, and I want to make sure you got my point, especially since it relates to something I was discussing with a  colleague in Hong Kong. My colleague in Hong Kong offers seminars to lucky folks who had a million dollars given to them, and are charged with starting a business.  The attitude on the part of those with the million dollars is, “I’ve done the hard part, the money, now you do the easy part... show me a business at which I can be successful...”

The problem with this attitude is the money makes no difference whatsoever.  We need customers, not money.  Customers are the most important thing in business, and getting the product (or service) right is the hardest thing.  These two aspects take “you,” not money.

If you get the product right, you’ll get the customers.  The money will follow.

If you have no money, you can join the billions of people since the beginning of time who started business with no money.

If you have money, you still must go through the process, the same as people with no money, to get your business going.

Coca-Cola put one billion dollars into launching a re-formulated Coke.  Total bust, one billion dollars gone.  The dot-com boom saw new companies financed with billions, the vast majority of which failed.  The fellow who started Kinko’s with no money but a few rented photocopy machines is now a billionaire.

Products and services are solutions to problems.  Companies are formed to solve problems for others.  Your company starts because you experienced a problem, and you came up with a solution.  In English we use the Greek word “passion,” which means to suffer, for those who start a business.  We suffer a problem.  You’ll hear people talk about the need for passion to be in business, but there is one more part as well, and with the passion is the joy of working on the problem, the solution.  For the business person, suffering and joy are operating at the same time.  The suffering gives us the impetus to start the work, the joy gives us the delight to continue it.  But a key point to realise is all this suffering and joy is extremely personal, this is based on you, who you are.  

This may seem strange, how can suffering and joy happen at the same time?  We usually think it is one or the other.  Well, women will tell you childbirth is suffering and joy.  The closest men ever come to childbirth is starting a business.  Be ready to take the pain, to suffer.  But there will be joy in equal measure at first; then the pain ends, the joy continues.

As the product is developed, you offer it to customers.  Now “you” are critical here too.  You interact with customers, who in turn give feedback and criticism that helps you grow.  Again, who you are as a person will determine how well you work wth customers.  And as you meet and learn more about your customers, you will be given the opportunity to grow in character and skill. You first success is getting to a point where your offer is good enough to get enough customers to cover a suppliers minimum production requirement.  After that, self-employment is a pas-de-deux in which you ever improve your offerings to customers who ever advise you on improvements, an upward sprial that takes you somewhere between where you are now and sitting to the left of Li Ka Shing.  (Or who knows?  To his right!)  For everyone, rich or poor, this all starts in the same place, a solution good enough to cause others to want to buy your solution.  But that starts with you, not money.  This is true in all places and all times.

And here is another key point: the very act of being self-employed engenders a personal transformation. Whereas an employer will gladly overpay you for one specific repetitive skill, self-employment urges you to develop every talent you have, and learn your hopeless weaknesses too.  And then you find yourself farming out the impossible, and weighing cost/benefit analyses on your possibilities, within the contraints of mortal time.

Another problem is we see someone else apparently successful, so we decide we want to copy his success.

Since these businesses are built on an individuals unique array of skills, experiences and psychological make-up, (especially as to how the entrepreneur relates to his customers) no one can copy anyone else's specific business.  Each business is utterly unique, so any one business is useless as an example.  There are countless coffee shops in USA, and countless noodle shops in Hong Kong.  Nonethelss, we have one we prefer, because even a coffee or noodle shop will be in some way unique.   I make the example of Martha Stewart, whose offer seems simple enough, as illustrative of how no one can copy an original.  Every newspaper in USA weekly ofers for free what Martha Stewart sells. But there is only one Marth Stewart. People believe Martha Stewart is a billionaire making the dining table more attractive.  Wrong.  Martha Stewart is a billionaire teachng how to make an attractive table easy. You’ll probably have to reread that sentnence to catch the subtle difference, but the difference is worth a billion dollars.(Also, small businesses tend to die with the owner... and I would never recommend buying a small business.)

Martha Stewart, Calvin Klein, Li Ka Shing are not rich because they are smart, they are rich because they can listen, especially to customers.

My business activities are ordered to accomplishing my goals.  There is no possible way my goals and yours match, so even if one might copy my business activity, and even if following me specifically might yield the same results, you would likely be miserable as can be living my life, since it is ordered to me, not to you.

Take one small point: take home pay.  Some judge success by take home pay.  Self-employed people generally want as little take home pay as possible, for a couple of reasons.  First, there is no rationale for paying taxes (Senate Majority leader Harry Reid says in a taped interview taxes in USA are voluntary, and he is right), so they are to be avoided as much as possible.  Take home pay is taxed at the highest rates.  Second, there is little outside of business that the self-employed, properly oriented, are interested in.  Or, stated another way, there is little that cannot be attributed to business activity. Therefore, almost all time and money is spent within the business, pre-tax.  If your goal is to make a lot of money, you will be working with the Feds against yourself.  If your goal is a certain lifestyle, then self-employment is the mostly likely means.  Given the descent of the USA into kleptocracy, this is more true than ever.

Another aspect of entrepreneurship is, as a process, whether it is up to you to "succeed" on your terms.  There is a seminal book out there by Thomas Sowell called the Politics of Economics of Race.  He may have coined "cultural capital" but certainly uses it, in this context to mean people who build up the know-how in certain areas.  It occurs over time, if not centuries.  Families store up cultural capital generation to generation.  It may not fall to you to be "successful" on your terms, it may be that your role is to accumulate "cultural capital" that is passed on to heirs who exploit it to do remarkable things in business.  If your goal is money and that is just not in the cards, then you'll be miserable indeed.  If the goal is solving problems and living a certain lifestyle, then it does not matter what the money is.

Very often I hear people are afraid to start their own business since they will not have employer-provided health care.  A perceived imperative to have health care is a conditioned reflex.   We are trained to believe we need this. Once we believe it, then we get caught in a false dilemma: Unless I am an employee, I will not have health care.

First, employer provided health care must be what the government defines as health care. Since these definitions are political, what an employer offers in the way of health care is not really healthy, and care is no part of it.  

No where are injured people dumped on the street for lack of money.  If it were true, the first thing you would do is start a business so you never lack the means to pay for health care.  If you have no health care, you will still be attended.

Health care is diet and exercise, and completely up to you.  Broken arms, pneumonia, and a bad rash require medical intervention, and these might cost a few hundred dollars, if you have to pay cash,  if you should be so unlucky.   Such is life.  Some catastrophic injury could costs hundreds of thousands of dollars, but catastrophic insurance is cheap, since such catastrophes are rare.  It is hard to overcome a conditioned reflex, a belief you need something.  You can live without health care.  Even with health care, you can die.  Don’t let this false dilemma trap you.

If not health care concerns, you may have others.  Hard times bring up tough questions.  What make times hard is the anxiety of not knowing.    “Where will the rent come from?”  “My kid needs to see the dentist.”  The employed go to the boss and get an advance on wages when such problems arise.  The self-employed move out of their home into their warehouse, cut a deal with a dentist.  It’s just business.

But what money there is all depends to what extent you serve customers.  That starts with you, and you know the drill:  experience "why dont they just, 2. good idea does not exist, 3. enough orders to cover a suppliers minimum order requirement, in a workable amount of time, profitably.  The part that is true in all times and all places is that process.  The content is you.

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Shoot. Move. Communicate.

A marine once told me the entire battle manual can be reduced to Shoot.  Move.  Communicate.  This resonated with me, since it can be adapted to a business start up, especially when in a jam or busted.

Shoot:  When a marine is on the job he is shooting.  A businessperson on the job is developing customers.  Everyday you should be doing your primary task of developing customers.  If not, you will lose the battle.

Move:  This is literal.  Especially if you are busted, winning most likely means moving.  Where you live now supported a lifestyle that led you to being busted.  So expect the move, embrace it, and figure out from where you would like to work, and pursue that.  Good news: space is cheap and plentiful right now.

This also tracks well with the principle that we solve problems on planes other than we experience them.  Busted is a financial status, with likley psychological ramifications.  A physical move eases the psychological problem.

Communicate.  This presumes you will be concise, germaine and cogent.  Tell anyone and everyone exactly what you are doing.  Secrecy is defeat.  Communication will get you the intelligence you need to make you next shot, your next move.

And so it goes, and upward spiral, out of your jam.

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