Start Your Business Start-up Now

There are innovators, there are retailers, but the link between the two, the sales force in which the communication channels have resided, has atrophied. The economy needs to recover, and we have people innovating, and retailers groping out changing customer demand.

The missing link is the sales process, lost with the two generations that went in F I R E . Selling establishes the rationale for the buy, something necessary when money is scarce. When banks lend credit, not money, the delusion is there is no scarcity.  All can be afforded, no selling is necessary, just order-taking.  Salesmanship atrophied.

Integral to the sales process is the feedback mechanism, which communicates to the innovators what demand the retailers have discovered (or is at least worth testing with new offers.)

Sales is not my thing, but I think I am an excellent consumer of good salesmanship, and therefore qualified to teach just that.

Along the lines of renaissance sales reps have re-organized themselves in Seattle into a new rep association....  I've been watching them and the moves seem right.  I am seeing a resurgence of the boutique, the shopping preference for the high-maintenance.

With the fax machine anyone could order flowers from Colombia, and have them here in 24 hours....  but local flowers are competitive.  A retired flower shop owner told me there is a resurgence in the 4am flower auction, a small biz staple 40 years ago.

Business start-up based on customers is my unique approach.  If you wish to thrive in spite of the coming crash, don't hoard gold, stock up on guns 'n ammo, or bury food supplies.  No!  Start a business.

I've been teaching that for 35 years on the side, and I am highly rated by past participants for content, pace and humor, with (so far) unlimited follow-up.

There are several options, live or online classes, for you to consider here.  eMail me if you have any questions.

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Next New Concept Testing V Food Export Seminar

New Hope has trademarked (ungh!) the tern "Next" (really?!) They offer a "Concept Test" to tell you if your B2B initiative will be successful "before you invest."  This is not possible I think, but they are giving 20% off through October.  Maybe because it is not possible.

It's not possible for three reasons: 

A. A study can never predict the future.  Coca Cola spent one billion dollars circa 1985 introducing new Coke, only to have the most famous fail in marketing history.  Show me statistically significant proof of the "Concept Test" and "Success."  I say it cannot be there.

B. The study is invalid to begin with, since the population surveyed is consumers, and the customers for B2B are businesses.  What consumers say, and what they will do with their money, are two different things.  The businesses to whom they should address their surveys will say "Who knows? Gotta test it."  I am sure the reason they do not survey B2B customers is any such survey would be impertinent to the sales process.

C. To be successful, you must do the work.  This is so self-evident, in the thirty plus years I have been lecturing on the side I have never said "I will make you successful."  I say only, "here is what I learned, here are the steps."  The steps are valid and reliable. Whether or not someone takes the steps is not up to me. I can only offer email support to those who are taking the steps and may have questions or need more coaching.   

I have never made anyone successful, at best I can save entrepreneurs time and money getting to their goals.  Indeed, you can get to your goals with virtually no money and little time, if the steps are followed.   If anyone says they can do more, I'd like to see how.  (And if their claim is false, I can quickly see how too!)

I guess I have two advantages:  I don't teach for a living, so I don't need to oversell this; and my entire career is trade for a living, so I know what you actually have to do to get customers.

The only way to know what a market thinks is go to your customers, B2B, and ask for an order.  If no order, then you have practical feedback upon which you can act.  You spend your time and money on adjusting based on what professional buyers say, not consumer surveys.

At some point in the game you must face a customer, even if you have paid your Next Concept Test fees.  There is no reason why the first thing you do cannot be face a customer.  Indeed, there are easy tactics to get in front of buyers before you put a dime into your idea.

You have to turn over a lot of information before you find out what they charge for the New Hope Next Concept Test, so I have no idea.  I bet is more than the $89 I charge for a seminar to find customers, that goes to customers first.  And I just need an email and a billing address, email for the course, billing address to bill you after the course.

Yes, my seminar is about exporting food and beverage, either as a principal or an agent, but the tools tactics and attitudes work anywhere, anytime.  Even domestically.  Indeed, in one part of the seminar you will compare domestic to overseas potential.  Check out assessing domestic potential based on current sales.

My seminar is online and open to anyone on planet earth, and indeed, I get people from all over.  I lead the live, online seminar. Your next opportunity to attend is:

Tuesdays, 6-7pm Pacific Time, Oct 11-Nov 1, 2016.

And you can register now and I'll bill you later, after the course begins.

http://www.johnspiers.com/Export_Agriculture/Register%21.html

Get in front of customers first.  Then adjust as necessary.

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Esca Bona! Big Ag is Desperate, Good for You!

Heck of a way to start a sales pitch:

Change doesn't happen overnight.2015 marked Esca Bona's first groundbreaking year where renegades in the industry set a framework for ambitious change to a better food future. But, you might be asking yourself, "Will Esca Bona 2016 be better?"

I suspect this is a clever attempt at reaching those who were disappointed last year.  Who knows?  Markets take no prisoners, but they are all-merciful if you self-correct. But what is on tap now for 2016?

Together we will think wrong to acheive impact. A Blitz is an intense, fun, hands-on session, that produces a portfolio of small bets to address challenges that matter. Imagine an Ocean's 11 of the innovation elite meets TED meets Stanford d.School meets hackathon meets startup black belts. Imagine getting months of work done in three days. Imagine coming up with solutions together that we could not conceive of on our own. Imagine learning the frameworks, language, and tools that you'll need to conquer biology and culture to escape the status quo—everyday. You’ve just imagined a Think Wrong Blitz.

This is just strange copy.  But then Trump is a nominee this year.  Who knows what's going on?  Anyway, the "big offer" is a non-starter.    There is only one opinion in startup business that matters, and that is your target customers'.  Spending three days at misdirection can yield no more than a months worth of misdirection, if that is the leverage.

Well, who is behind it?



Oh.  The grand duke of BigAg.  And Campbells, Dole, General Mills...  and lots of "innovators" and branding strategists and venture capitalists, etc.  Didn't notice a traceability vendor though.  Odd.

What this means is those big companies badly need to find new market, and their millions in research says: small, better...  more Stilton, less Velveeta.

This is how it works: an innovator startup gets to a certain size at which point the conservator spots them, and decides the volume is worth having, as in acquire or copy.  This is about $50 million in sales, from a reliable and widely distributed customer base, and no looming competitive threats.  Anyone who has that profile will know that is also the IPO profile, so you choices are continue on your own as a privately held company, sell out to a ConAgra, or go the IPO route.  No doubt the "innovators" at this conference have their eyes on that prize.  Never judge how someone plays their hand.

So what is going on at his conference?   It is an attempt to bring innovation under the aegis of BigAg.  And again, it only signals how valuable the innovation in food market has actually become.

Why I keep getting invited back to food industry conferences, association events, and export marketing programs is I teach a way to grow a small business through export sales.  It gets you orders within weeks, or practical feedback on why a customer will not buy your present offer, providing you with a blueprint if you need to change.

You can attend that same seminar online.  It starts Aug 9, and I bill the registrations so you pay later.  Join us now.

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Robot Labor: Why This is Good for Small Business

If everyone loses their jobs to robots, then what can all these unemployed buy?  This is a subtext to Mish's emphasis on robotization.

Yesterday, Apple’s iPhone maker, Foxconn announced an immediate cut of 60,000 workers to be replaced by robots.
Today, Adidas announced the first ever 100% robot-made shoe.

Robots replaced the horses that once provided the drivetrain in transport.  We still use the terms horsepower and drivetrain when speaking of automobiles.  How will we refer to the number of people a robot replaces?  FTEs?  (Full Time Equivalent)

Did the elimination of millions of carthandlers due to locomotives bring poverty?  No, an increase in efficiency brought more leisure time at the same income level.  Did 99% of buggy whip makers going out of business bring on poverty?  No, those people got jobs building railroad cars.  Did containerization end longshoreman work?  No, wages went up and as costs of logistics dropped more could be traded.  Now the median longshore wage is over $100K per year.  Some make a quarter million.

iPhones will get cheaper as will shoes.  As will McD and Starbucks and Uber as they go to robots.  At the same time, human interaction will become premium.

Design will become premium.  Robots do the same thing over and over very well.  Robots cannot improve design, and there seems to be, in life, X amount of design talent.

Those people who once hand sewed shoes can still do it.  Unemployed, some who love making shoes will work with excellent designers and come up with super -premium shoes.  Lifestyle over accumulation.  They will need people who can market, find customers.  Lifestyle over accumulation.  I need only put on a hand tailored jacket with Levis (ok, and a tailored shirt too...) to get treated as though I am some royalty.  When a robot makes a million shoes, they better wear out fast to recover the cost of the robot and have a revenue stream to maintain the machine.  My shoes last thirty years, and look and fit better than anyone else's.   Of course the cost at least four times as much initially, but it is very economical.

I carry a flip-phone and endure derision from children, because people with smartphones miss too much in life.  There are no features on a smartphone that are net-advantageous.  I doubt there ever will be.  Pictures racing by on a screen does not mean you are going places. I am all Apple all the time because Apple's products are the least bad.  Apple charges too much for equipment that does waaaay too much.  If and when defunct Apple production lines start making things I design for myself, then I'll pay a lot more for a lot less tech.

It takes so little to live so much better.  It's mostly attitude, social conditioning.  Are you socially conditioned from the outside to be a consumer?  Or internally self-conditioned to work for lifestyle, not accumulation?

It's inevitable that among the unemployed some creative will start their own businesses.  They need to link up with the others in complementary businesses to thrive: small materials processors, small manufacturers, small designers, sales reps, retailers...  all people who tend toward lifestyle instead of accumulation.  Yes, countless others will elect to join the fight at the trough, screaming their claims of share allocation ...  but that is a choice.

Self-employment is also self-improvement, personal transformation.  I offer classes in business start-up, highly rated and unlike any others.  Check them out.

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New Portland Oregon Import Export Start Up Seminar

If you live in the Portland, Oregon area, on Saturday, April 23, 2016, I will offer an all-day intensive international trade start-up seminar at Portland Community College.  You will be taken through finding customers, suppliers, developing product, lining up the finance, logistics and legal structure all in a one day seminar highly rated by participants for content, pace and humor.  Enroll now!

Write down the CRN 24328 of your selected class to register.

CRN	Campus / Bldg / Rm	Time	Days	Dates
24328	CLIMB Ctr / CLIMB / 303	09:00 AM-04:50 PM	Sa	23-Apr-2016 thru 23-Apr-2016
	Instructor: John W Spiers  Notes: One hour lunch break.  Tuition: $79.00 Fees: $0.00

http://www.pcc.edu/enroll/registration/non-credit-registration.html

Please bring recorders or anything you like, I provide handouts and after-class follow-up by email.  I look forward to meeting with you personally!

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Traceability Vs Clean Label

We must never let a government make definitions, for they render them incomprehensible.

Market researchers tell us that consumers are seeking ‘natural’ products more than ever – and ingredient suppliers have responded by providing ways to ‘clean up’ product labels – but what do these terms really mean?

Since the word organic has become meaningless, and people care, now the idea is "clean labels" which work to be specifics to what the given food has gone through.  Well, take that desire to its apotheosis, traceabilty.  The QR code what takes the consumers smart phone to a page that not only has a quick video on the entire process of the food in question, but further affirms that particular unit that the customer scanned is legitimately from the source.

In all specialty products "provenance" is key.  With traceability you can build loyalty with provenance. Right now companies offering traceability systems are charging too much to do too much.  When someone comes up with the right offer, I will highlight them here.

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Stop Worrying About Price

One of the big inhibitors to people pursuing a successful business is their discouragement when they see their prices will have to be relatively high.  Another big inhibitor is fear someone will steal their idea.  De minimus!

Yes, price is one of the Four P's, product price place promotion.  But just one, and not the most important.  At the specialty level, product, that is, its design, is most important.  Price is least.  Price only has a secondary issue or what volume at what price point.  iPhones would still sell profitably at $2000 or at $500, only the quantity sold would change.

Even when selling the exact same thing, price is not that big of a deal, then place and promotion matters.  For example, here is a famous crisp bread that sells for $4.49 as a stock item in an upscale grocery store.  Not two miles away, it sells for $3.89 as a stock item at Safeway, some 60 cents less.  but wait wait...  Safeway often puts it on sale.... another buck forty off, for a total of two bucks less.  And there is more, a manufacturers coupon is on the price ledge, for another buck off: total $1.49.  I save $3 off a $4.49 item by stopping by 2 miles away.

You know nothing, let your customers decide if the price you need charge is right.  All you need is enough customers at a profitable price to cover the supplier minimum, in a workable amount of time.  If so, you are on your way.

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The Free Market Treats Ebola

At a gown and tuxedo-studded Christmas event, I was speaking to a pancreatologist, an MD, who was explaining how when a liver quits he can get the pancreas to take over the functions.  He teaches at University of Washington, so he is no nut.  He and a colleague in the midwest have successfully performed the treatment on some 400 plus patients, and I asked how come it is not more widely used when the more common therapy (by far) is more expensive, less successful and more painful?

Essentially the problem is marginal and new has to overcome busy.

Getting cells from a liver to the pancreas done right takes a hot shot surgeon, so you need a team of an MD that goes to this diagnosis and cure, plus the hot shot surgeon.  There is no shortage of hot shot surgeons who would do it, and they love the challenge, but too few doctors who go to the diagnosis and cure.  How come?  Whole lotta medicine to learn, and core curriculum is "this class of disease is handled this way, and here is how." Medical school covers "best of" and then they have to practice within what they learned, of course, with no time for the marginal and new.

Next, doctors certainly can specialize in this and take continuing education seminars on the procedure (he teaches this often) but new and marginal has a problem in our litigious society: when 30% die under the standard therapy for which 100,000 people have been treated, it only takes one dead on a marginal therapy to make a lawsuit.  "Doctor, how come you treated "dearly beloved" with something unusual?"

I tell you know I know doctors who reserve cures for people they know won't bitch if it goes wrong.  There are no guarantees in life, but 98% cure odds are better than 12%.  Romney/Obamacare is built on the hopes and dreams of that minority of voters with the dreadful combination of entitlement and fear.  Medicine is going into lockdown in USA, bringing forth the worst fears of the ACA critics, but there is always medical tourism.  It was one thing to use travel to access nice clothes, but to have watched USA get to where another nice thing about travel is to get quality medicine is tough to bear.

So how do you overcome the problem of "original and new" overcoming "busy?"  A cardiologist took my seminar in San Diego (twice!) and I asked him about heart therapy out of Brazil in which a doctor was making a small cut, sewing it up, and curing a famous disease in USA at nearly none of the cost and much less pain.  The doctor said he knew the procedure well, was doing them all the time, the heart is just a muscle, the problem in essence just a hernia, and the cure like any other hernia, cut it and sew it up.  The problem was it was disapproved initially in USA, according to this cardiologist, because at about $100,000 worth of drugs for the USA alternative there was so much money in the USA way.  When the drugs went off patent, then it was allowed.

The cardiologist explained the heart of the problem of distributing marginal and new ideas to busy doctors.  Pointless compliance keeps them busy (romney/obamacare is pointless on steroids) but the big problem was referral fees are illegal in medicine.  He was quite cross that the lawyers who outlawed referral fees for doctors allow it for lawyers, in fact commonly sell cases to each other, adding incalculable cost to "justice and equity."

This is not to say that referral fees do not happen, of course they do, when a doctor prescribes pfizer drugs, he can expect all sorts of goodies from Pfizer.  Pfizer has a "how to" on their website in case anyone wants in.  And these are approved by the regulators.  And of course as we see time and again, even with it allowed, a fine of a couple billion is acceptable when the profits are in the tens of billions.  So here again, within the patterns and practices of capitalism, pain and suffering and death, killing customers for money, is commonplace.

The solution?  According to the cardiologist get rid of the non-referral laws.  If the cardiologist can kick back a grand to the family MD who refers a case to the cardiologist, then that family MD will far more prefer to take $1000 from the cardiologist than $1000 from Pfizer.  Simpler, easier.  Overall, the patient is out $15,000 (or insurance company) instead of society out $100,000.

But sadly, all practicing lawyers are government employees, without exception, and when it gets down to it, they will always defend the government program, which is currently the patterns and practices of capitalism.

Freedom to and freedom from is the essence of free markets.  To allow doctors the freedom to contract for fees and freedom from force and fraud when contracting for fees, is the free market answer to the system we now have.

(Kant spotted instantly and explained 250 years ago how the USA would fail given our legal system... in essence all lawyers being government workers and the conflict of interest... well, anyway, I've pointed this out before...)

Walmart will give you most  of your medicines at $4 a month if they are generics.  That is how cheap medicine is, but as long as we have patents, will have the FDA complimenting the lie that it takes billions to develop medicines, and BigPharm buying the politicians that keep the FDA in business and in BigPharm pockets.  "Affordable" "Care" Act is going to get you $1000 medicines at taxpayers expense for $500, when it is unlikely the best cure and 50% have no effect but 100% of the time the synthetics go through you and pollute the environment forever.  But that minority of fearful and entitled, mostly white progressives, directs what happens to the rest of us.

USA in this 50 years before and 50 after today will go down in history as the most brutal medically in the history of mankind.  Unspeakable suffering, and completely preventable.  People committing suicide, and now physician assisted, rather than cure or offered palliative care.

Now comes the Ebola "crisis" and a couple of doctors who have to leave the USA to do what pioneers such as Jenner could do before regulation, and the capture thereof by BigPharm.

If direct intravenous oxygen turns out to be successful, we can expect the government of Sierra Leone to announce to the world that it has a treatment for Ebola, as Dr. Rowen and his team are going there at the invitation of its President. That will make international news very quickly. On the other hand, there are commercial interests that stand to make billions, maybe trillions of dollars, on Ebola treatment drugs and/or vaccines, whether such drugs are effective or not. So it would be naïve to think that they will not make a sincere effort to suppress inexpensive oxidation therapies for the treatment of Ebola and other potential pandemic diseases…
“Will it be suppressed? Probably yes,” Dr. Rowen says. “I’m not afraid to tell you that my biggest concern in this is that we will be in greater danger from those interests than we will be from the Ebola itself… But you know, it’s something that I have to do. All of us who are going, we’re being guided by something much higher. It’s something that I have to do no matter the risk, because the risk is far greater if we don’t do it.”

Note they will test a cure.  Note they fear for their lives from the capitalists.  And here is the problem, if they mysteriously contract ebola and die, there is no knowing what happened.  And it gets more complicated, because if their therapy does cure patients (technically there are no cures for viruses, your immune system just wins the fight), then that is just valid, in that case not yet proven reliable.  You need many doctors in many places replicating the therapy before you get validity and reliability, and thus science.

This is not a race against time, it is a race against capitalism, the patent regime, and its sycophants.

A country that runs many exposed medical crimes, such as the Tuskegee experiments, and then off-shores them to places such as Guatemala as well, and in which no one is ever prosecuted, is not going to stop.  Doctors know this.  Some are committed to medicine in the face of unspeakable evil.

Right wing Christians love to use the most tendentious of translation of Romans 13 to promote servitude to the state.  But here is what Daniel says, 4:17 -

Daniel 4:17King James Version (KJV)¹⁷ This matter is by the decree of the watchers, and the demand by the word of the holy ones: to the intent that the living may know that the most High ruleth in the kingdom of men, and giveth it to whomsoever he will, and setteth up over it the basest of men.

And Peter speaking to the hegemon, Acts 5, v 29 - 32 RSVCE,

²⁹ But Peter and the apostles answered, “We must obey God rather than men. ³⁰ The God of our fathers raised Jesus whom you killed by hanging him on a tree. ³¹ God exalted him at his right hand as Leader and Savior, to give repentance to Israel and forgiveness of sins. ³² And we are witnesses to these things, and so is the Holy Spirit whom God has given to those who obey him.”

Talk about speaking truth to power.

Apparently the USA does not have the internal mechanisms to investigate, charge and prosecute wrongdoing, if it is done any State workers.  Too bad.  But we can hope for the future.  There is an election coming up, and we can vote for change.  Our options are a Clinton and a Bush.  The Bible says there is a reason we are ruled over by the basest of men (which includes women.)

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Berkeley Food Export Seminar in San Francisco

If you would like to find new business overseas either as a start-up or an established concern, whether as a producer or an agent, an all day intensive boot camp at UCBerkeley Extension will get you launched.

Before the seminar starts you select your product so that you hit the ground running when we meet.

During the all-day seminar we go through the process of doing the research on export trends and prices, create the tool to offer the buyers overseas what they need, and leverage this information into the sales approach.  Next we identify actual buyers and create the contact offers based on the earlier research.

Next we cover how to process objections into sales, and then how to participate in trade shows, leveraging existing exhibitors into promoting our products worldwide.  You will leave with the actions steps and necessary tools in hand, and you will have the resource of the instructor and past participants to help you along the way.

The course is affordable, grants Berkeley extension CEUs, and usually conforms to employer-education benefit coverage.  Hey, if you are outside of California, make the boss pay for travel too.  Fly in Friday night, play Sat and Sun, study Monday and fly out Tuesday morning!  Unforgettable.

Sign up now.

Date/Time:	Mon 8:30AM - 5:00PM 17 Nov 2014
Building:	San Francisco Campus
Room:	Classroom 503
Location:	San Francisco

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Compete on Design Not Price: Do Better than eBay

Callum sends in an article which is fairly common experience, and aligns with what I teach, Plan A.  Everyone seems to thing importing is about Plan B, just buy something from overseas and sell it here. No, you have to design your own.  Here is an example...

But a lot of what McGrath sells is just what he thinks can be profitable — like remote-controlled boats, which he used to buy from an importer in Long Beach at around $14 and could resell on Amazon for $34.95.

So far, the usual start-up.  But then he finds two problems, there is always someone who will charge less than you, so you will always lose at the game.  next, taxpayer subsidize the freight rates to the advantage of the Chinese.

But as Chinese companies began logging on to Web marketplaces like eBay, Amazon, and Alibaba, they started taking advantage of the shipping deal to sell directly to American consumers. And so it’s never been easier to get something cheap and Chinese delivered to your door for a startlingly low price: $4.64 for a digital alarm clock; $2.50 for a folding knife; $1.88 for aniPhone cable — all with shipping included....All this should be a reminder that any trade deal has winners and losers and unintended consequences. 

Yes.  This is what governments do, pick winners and losers.  Simple solution, deregulation.  And corporatize the USPS.  Take away its monopolies.  But unintended consequences.  how can you know exactly what will happen then claim the result was unintended.  how can you say "I had no idea if I let go of the pencil it would drop.  I really thought it would rise up."  You get more of anything you subsidize.  Econ 101.  Sigh.

But anyway, The fellow goes on, and what is his reaction?  To go to plan A...

To insulate his business from foreign competition, McGrath has tried different ways of making his products stand out. He likes to tell people to sell what you’re passionate about, and McGrath loves indoor pistol shooting. Recently he designed his own kind of mattress holster, which hangs a gun and a flashlight from the side of the bed for easy nighttime access. He contracted a company to manufacture the holsters, and they are shipped out in bulk from — where else? — China.

This is what I learned 40 years ago working while working ten years for others, and went on my own since then.  It is what I teach and write.  Last Saturday in at Cal Poly someone asked me if what I teach makes people successful.  No, they make themselves successful. what I teach saves time adn money.  Everyone does plan B and wastes times and money.  Eventually they get to Plan A.  I teach start there.

Coming up I have live seminars in Portland Oregon October 25 and in the San Francisco Bay Area November 1.  I also started online seminar last week, in which you can still enroll and get caught up.

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Welfare Queen Gets Tired

Here is a fair criticism of an ExIM bank critic... by an ExIm Bank client:

She and others like her pontificate from behind a desk, using theory and political rhetoric rather than considering how their words can impact American jobs. By contrast, employees with our U.S.-based company happen to work face-to-face with product distributors and with farmers in fields all around the world.  Our company is based in Gilbert and we began using the Ex-Im Bank nine years ago. Alan J. Merrill is executive vice president of Bio Huma Netics, a Gilbert-based company that manufactures fertilizer and wastewater solutions.

Yes, theory against experience pales.  So let me reply to Merrill who claims to have been on EXIM Bank life-support for nine years in business, from someone who already had ten years experience of dealing with buyers and sellers face-to-face around the world, before being self-employed for thirty years.  Ready?

Our competition includes some of the largest agriculture companies in the world. Many of them receive support from their home governments. The Ex-Im Bank helps level the playing field so that we, as a small business, can get our product overseas and compete on quality, not financing.

Well, which is it?  There is an internal contradiction to say you need financing, so you don't need financing.  How can you possibly control for the variable of EZ cheap credit when trying to assess whether quality is a factor in a sale?  You can't.  So here is what you have missed by being a welfare queen, instead of a entrepreneur:

One cannot compete on quality.  You would have learned this had you actually gone out and tried to build business without the ExIm boondoggle.   Quality and service are standard offer items.  The quality of your fertilizers are set to what the market wants, no more no less (as is service).  Within an extremely narrow band, all players offer the same quality and service.

What builds markets for small business is design, the only place where small business can and need to compete.  A fertilizer designed to produce a specific effect, solve a specific problem, as opposed to the standard fertilizer.  Now for a uniquely beneficial fertilizer one may charge a premium price and have no problem finding customers who are ready willing and able to pay.

Indeed, the fact you admit the people with whom you deal are not able to pay means legally they cannot be designated customers.  The legal definition of buyer is ready, willing and able to buy. You don't have a business, you are really a sort of government-funded NGO.

Why are your customers so weak that they need USA taxpayer loan guarantees before they can buy (or more to the point, before you will sell?)  Why are taxpayers running the risk of default, and not your company?  You say "look at the jobs" when we should look at your company.  (The ExIm Bank now forbids this, hiding the list of names they finance, in this way we can no longer know when ExIM Bank deals go bad.)

Google reports variously 700 fertilizer exporters in USA... why is Merrill's the only one that needs taxpayer bailouts to continue (aside from the Koch brothers of course, welfare queens extraordinaire)?  Why should you have an advantage over the some 658 others who sell and get prepaid for export sales, not USA taxpayer guaranteed funding?  What about the employees of well-run companies who lose their jobs because overseas buyers who are perfectly capable of paying the other company agree to save money by buying from a USA taxpayer wealth transfer scam that your company mediates?

And what of the domestic producers in your target market?  How are they to compete when you offer USA taxpayer subsidized product against the domestic product?  EXIM Bank support has ruined many an overseas producer, adding to the hatred of USA.

Businesses on running-bailout need not concerns themselves with competing in markets.  For all that ExIm bank is used by almost no one in business of international trade.

If a country is effectively subsidizing its exports, then trade in that country's subsidized product until that bad policy breaks them.  Get rich off their folly.  It is how Dow Chemical got started.

Without the bank, we would not have access to financing alternatives, and as a result, would not be able to export to many of our current customers. But opponents of the bank suggest that the private sector will step up to meet the needs of small businesses like ours should the bank's charter expire.

No, opponents say if your parroting of false EXIM claims of profitablity were true, then a bank would do the business.  But you can only get financed when a bank says you'll fail otherwise.  What does that say to the rest of the taxpayers funding you?

Small businesses here in Arizona and across the country can tell you that without Ex-Im there is no other option. The private sector can't step up to meet our needs because commercial banks are most often unable or unwilling to finance or insure the international deals we conduct. Without financing or insurance, these American businesses and jobs will be put at risk.

Well, yes.  The jobs at risk are all false economy jobs. Merrill parrots EXIm's well documented lies about turning a profit, a point that is prima facie nonsense because if so banks would do the loans.  Yes, these jobs exist because of misallocation and malinvestment, provided by ExIm Bank.  And the same  misallocation and malinvestment is crowding out real economy jobs.

It's not the cards you are dealt, it is how you play the hand.  There is no judging a man as to how he plays his hand, if he wants to pursue being on the dole, that is his choice.  Indeed, when I lecture I advise on a strategy of raiding the dole meant only for big business judiciously to advance a small business advantage. But when he wants me to believe his choices are a good thing for everyone, then that is insulting and abusive, expecting me to go along with his pretense.  In life, NEVER believe your own PR.

Merrill actually starts out with the best quote:

Be it President Barack Obama, lawmakers or D.C.-based think tanks, we tire of being told how to run our business.

Hilarious.  Typical republican. Barack Obama has put the ExIm bank on steroids, making your gig possible.  Like most welfare queens, he wants his EBT card but bristles when people suggest he get a job.  It is HARD being a welfare queen!  People want accountability for what you do with their money!  Soooo tiring!

I never get tired of criticism.  It is either not true, or where true, I readily admit it.    I get media rate, a huge subsidy, on the books I sell.  Why should taxpayers subsidize delivery to my customers?  Why, indeed?  I don't advocate it continue, I say get rid of the USPS.  Let private companies run it.  Until then, I rock the subsidy.  But if they get rid of the subsidy, I won't go away, because the subsidy is not critical to my success.  By defending ExIm bank, you are expressly stating you cannot survive without it.

Don't worry, the ExIM bank will not end until the USA ends (and the USA will end because such as  the ExIM bank cannot be ended).  But you can join the other 659 or so USA fertilizer exporters and offer a product people actually want to pay for.  But you have to compete on design, not taxpayer guaranteed low price.

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Pricing Strategies In Product Design

So you have experienced what makes you suffer, acknowledged it, found joy on working on the solution, you have taken your solution and tried to buy it (yes, of course, BUY) from those you'd expect to be your customers for your idea.  Those target customers told you it is a good idea, but does not exist.

So now you have to make a sample of your idea, to discover the costs and make a sample to test the idea and price.

Price is never the issue at the specialty level.  The new iPhone 6 averages say $400.  They'd sell more at $10, and less at $10,000.  But $400 is the optimum price point.  You are only designing enough into your product to get enough orders to cover the supplier's minimum order requirement,  profitably, in a workable amount of time.  Say something like this.

http://en.wikipedia.org/wiki/Apple_I

Add a monitor later.  Stick with a computer.  See from customer feedback what they think of the computer, and find out what people hook up as a monitor.  That will tell you much about what to do next.

A fundamental is to design what you are designing, a test of your hypothesis.  Age quod agis. Organic, gluten free bread mix is a test of organic gluten free bread mix.  You'll get reaction to the product based on what you are testing.  If you also make it "kosher" you've lost control of the variables, and no longer (in the measure you added "kosher") are testing the market for organic, gluten free bread mix.  Your results don't tell you much, one way or another.  Of course, if it is your intention to test orgainic, gluten free and kosher, then very good.  But people often add on goodies hoping for new market and in the process ruin their test.

Each iteration makes money or gives clear information of how to do better next time.  The result is a upward spiral, excelsior.  When you add on too much to test, too many variables, you've left money on the table, the version that would have sold.  You dissuade customers who may have bought more simple, and thus added to your knowledge base by their feedback, not to mention added to your customer base.

You foreclose too much customer feedback by overdesigning. Don't overdo the design and leave money on the table and miss out on feedback.  Just enough design to create a product that will generate enough orders to cover the suppliers minimum in a workable amount of time, profitably.  Along these lines, the one constant in criticism of me by people who have gone on and started businesses is that I should emphasize how little it actually takes to compete on design.

Sigh... I say this in my book, I say it in my classes, I don't know how much more I can emphasize it.  I think the problem is our books are full of stories of HUGE SUCCESSES so people are conditioned to believe their product must be huge design effort to be a huge success.  Nope.  Boeing started tiny.  Apple started tiny.  Most happy people got to a place and stayed where they want to be in business.  No one writes about happy people.

Having said that about design strategy, we get to a tactic - design to price points.

Part A ...

Your specialty product is more roundabout in production and distribution than a commodity item, therefore it costs more to produce.  Keep this in mind as we consider the fact that every industry has price points, collective wisdom as to what people are willing to fork over for what.

Say gift and housewares...

4.95  9.95  19.95   24.95  29.95  49.95  295.00  595.00, etc...

Clothes  20 50 100 250 500 1000

Beef Chow Yuk  2.95   4.95  7.95   12.95   29.95

These are simply price points people find acceptable, and thus do not slow down the thinking process about price.  A gift item at $17.50, people have to think about that.  Better $19.95.

Clothes are much more emotional, so rounder numbers can work, but the point it the price point.

Food can be the wildest.  Sure you've ordered that $2.95 beef chow yuk, and spent a week regretting it.  The $4.95 is not much better, but if it's take out window, you know where they are saving the money. You'll find it on a good restaurant at $7.95.  And at a fashionable restaurant at $29.95, all free range grass fed beef, house-made noodles, duck fat for cooking, and so on.

That $12.95 price point is the pop-up restaurant, the kids who are trying a new recipe, working out of a hole in the wall like the $2.95, card tables and folding chairs, but using the same ingredients as the $29.95.  And cleaning up.  I hope this makes sense..

So you build your item to price out at a standard price point...  Your item may normally be a $7.95, but your mess of beef chow yuk has free range beef, grass fed, hand foraged chanterelles, in-house made noodles, so it is price blind.  No one knows what the price should be.  But it meets the criteria: testing what you are testing, not leaving money or design on the table, designing to price points.

(As a side note, one reason the restaurant business is so alive and creative is there are no intellectual property rights in that field.  Monsanto is trying to sneak in with patents on ingredients, and being strictly NonGMO is a way to fight back.)

You are not gouging the customers, the price is fair.  The customers are getting a very good deal, for they get excellent food and are not paying for ambience (and you are not risking the cost on ambience to sell with your unproven dishes.)  Don't end up with expensive ambience and no customers to pay for it.

Part B ...

What is the mark-up in your industry, cost to wholesale?  What is it wholesale to retail?

Say cost to wholesale is keystone (roughly, depending on the definition, doubling.)  and say wholesale to retail is the same..

So if the price point at retail is $100, then your wholesale price is $50, and your costs are $25 landed.  Depending on freight duty, etc, you probably have abut $22 to play with in the cost of the item.

So them within the contraints of

1. testing what you are testing

2. not leaving money or design on the table

3. designing to price points

You decide what you can put into the product.

Now, that mess of beef chow yuk may be normally $8 a plate, but since you are using free range, hand foraged chanterelles, in-house made noodles, yours may be at the $24 price point.  But it meets the criteria: testing what you are teesting, not leaving money or design on the table, dsigning to price points.

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Passion and Joy In Start-up

I argue your "right product (or service)" is discovered by approaching what problem causes you to suffer (passion) and what gives you joy in working on the solution to that problem.  Happiness is around family, and not vocation.  But joy is around vocation, what you "do."  And you cannot get to joy directly, it is only through passion (suffering).

Happiness is tough, because it is tied up with family.  But joy is completely up to you.

For a working example of all this, suffering and solving problems and joy, here is a working example, in action:


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China Uber Alles

So while Seattle government works as hard as it can to crush small business innovation, The Chinese plow ahead in USA.  Today they announced they will enter the USA market for crowdsourced rider-sharing.

China's version of Uber, the web-based minicab service, is planning to go after Chinese customers, especially travelers, in New York and San Francisco with Mandarin-speaking drivers.
Yongche.com — China's largest mobile-phone car-sharing service with a fleet of close to 50,000 vehicles and more than 2 million active users — plans to expand service from 57 cities to 150 by 2015, Zhou Hang, CEO and founder, told Bloomberg News. And New York City and San Francisco will be part of that expansion, he said.

Ridesharing is huge in China due to the relative freedom people have in China.  And entrepreneurs worldwide flee the chaos of the democracies to thrive in the relative anarchy of China.  Far more western innovation and small business development is happening in China than anywhere in the West, easily perceived by the progress China has made over the last two decades.  And then throw in Hong Kong, and wow.

Here in the USA it is a double challenge: the official, stated policy of "get big or get out" which leads to active acts of destruction of small business by government agencies. It is chaos for Seattle rideshare companies to be first face new laws designed to destroy them, and then later to find laws that they can live with.  What intervened?  Most likely, payola.    Seattle is particularly bad, and a great candidate for truth commissions.

Or just create a Hong Kong here in USA for those of us who can be free.

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Natural Fibre Ski Sweaters

Makkai & Spiers received the prototype of our ski sweater, we think the ultimate ski sweater.  We were at the right place at the right time when some naturally colored merino showed up in New Zealand, and we were talking to a manufacturer who knew the prize winning sorter, who knew this shepherd who had these sheep... etc... we are working with the prototype now.

The ultimate green garment;  no dye, and no sheep died.  The sheep grow wool by eating grass, fertilizing the fields, and moving on, coming back to that grass in a year, but not before giving up a coat of wool.  Then the wool goes straight to a great balance of machinery and talent that cannot be found anywhere else.  Obviously I have no problem going to China, but China cannot do this.

This will be an all New Zealand product.  Here our supplier is showing the raw material.  Check out the silver.  A silver ski sweater...  this is going to be very cool.  I mean hot, well, a lot warmer with maybe 1/3rd the weight.  Well, that is what we are measuring in the prototype, performance.



Another past participant emailed me with a concern regarding a inquiry for a very large but manageable deal from a top buyer.  The past participant was surprised.  When you are in business, things will happen.  If you do not start, they cannot happen.  You have to get started.

I teach on the side, and on the upper right of this blog are three links to classes available world wide.  Get going now!

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RN Numbers and Clothing Trade

Ever see those odd RN numbers on tags on clothes?  They can tell you who actually is behind the garment, as opposed to what a label might say.  Write down the number, then look it up here, see what you learn, if you are in the rag trade.

https://rn.ftc.gov/pls/textilern/wrnquery$.startup

Information in this RN data system is based on data submitted by private companies. The information is accurate and current only if it has been kept up-to-date by the registered company. We encourage businesses to review their records and update their information as necessary.

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Colloquium on Finding Market

On Feb 23, 2014, at 6:59 PM, A F wrote:

I have knowledge of wellness products. Must these products be very unique? …and how do you determine uniqueness?

***If and when a critical mass of customers, defined as enough to warrant developing samples, have said your idea is good and does not otherwise exist.***

A friend of mine is a naturopath and has his own company with access to make a special branding for me. This product is for people with high cortisol which is literally everybody in the country due to stress. There are also products with digestive enzymes and probiotics. 

***OK, you hear your motivation..? "everyone needs this, I can make a killing..."  that is what they teach in schools and does not work... in the real world what works is finding joy in working on a solution to a problem that causes you pain.  If you do not have all parts, then it will not work... this is about lifestyle not about making money.  The money will follow, but it is not important.***

I also have knowledge with gluten-free and grain free types of products and would eventually like to develop grain free flours, if there seems to be a demand.

My interest would be to export these types of products.

***A knowledge thereof, or a suffering which is alleviated by the joy of working on the problem?*** 

Probably the first step is to look into these nutritional products and see what kind of demand there is which would likely be East Asia and ???

*** There it is again... he orientation to making money and not solving a problem... being in business is about being happy, not about making money, the joy in working on a solution to a problem that causes you (and others) to suffer.  I know the bankers have had 100 years to tell people otherwise, and control school textbooks on business, but time to shift to what works...***

I also have identified some vinegar blends that really are quite tasty and I think would have great appeal.

*** Our opinions never matter...   only customer opinions matter...***

Questions:

What would be the next step?

***Experience a problem that causes you to suffer for which working on the solution gives you joy.***

I should see what kind of demand has been reported on these products?

***Never!  Research of that kind tells you only what is happening now, new business needs new customers.  You should talk to people who buy such items, and find out if what you have is new and needed.***

Are nutrients, enzymes, targeted organ/problem nutritionals a desirable item to export?

***Only people who buy such things can answer that question.***

I would imagine country labeling/language would be an issue? Or is it an issue?

***Not for you.  If a country demands labelling requirements for its imports, too bad for the citizens of that country.  It is no skin off your back that their importers have to add that cost onto imported products and jack up the price to their customers.  Such requirements will be the customers problem, not yours.

John

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Duncan Checks in On Geox

Here is a good example of passion and joy in the development of a new business -

It has made him a billionaire.
To begin with he hired five young people from his home village of Biadene di Montebelluna, none of whom he knew, and none of whom had worked before, let alone had any experience of how to run a business.
Today Geox is a global company with 30,000 employees (including the original five), and 1,300 stores all over the world.

I don't like the part where he started with a bank loan, for that is not a good idea.  And then it gets worse!

Mr Polegato is such a firm believer in the need for companies to protect their inventions that he is now a member of the European Patent Office, and helps to judge nominations for its European Inventor Award.
He also lectures on the subject of intellectual property - it's a topic he feels strongly about.
"Let me tell you a story," he says, "Many years ago someone in Naples created espresso and someone created pizza, but nobody knows who. Now it's the American company Starbucks that everyone knows for coffee, and the American firm Pizza Hut that has thousands of pizzerias."

Quite the nonsequitor.  No one knows who invented the wheel either, and in all these cases any IPR rights would be over anyway.  The reason those names are known is because Starbuck's and Pizza Hut marketed the idea, and got rich.  So have countless others supported themselves on espresso and pizza.  And Polegato would deny people the freedom to invest their own resources and provide their own labor to make a living because someone else had an idea for concentrated coffee or leftovers baked on dough?  Obviously IPR is not needed for a robust economy.

The problem with bank loans is usury is precisely the means that the powers that be aggregate the money to literally call the shots, that is start wars.  And anything bank loans can do participatory investment can do.  So usury is not necessary to an economy.

IPR is state-backed, and states are defined as a monopoly on violence within a territory.  Enforcement of IPR indeed gets violent.    IPR is neither necessary nor sufficient to foster innovation, or make money, so it is another example of fun-time opportunity to exercise violence of people.

Even billionaires, like the rest of us, never have the whole picture.

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Shifting from State to Customer Employment

On Jan 27, 2014, at 7:19 AM, riv  wrote:

In my opinion, the versatility and potential of this ... is too great to ignore that when applied to the increased public “green-health’ awareness and demand, I see an import/export opportunity here…

***  OPINION, good...  so this opinion must be formed as a hypothesis and tested.

Along with the rationale in demand, there is your feeling (I suspect)  that you have some esoteric info: demand info and applications info.

Again, you asked, so here goes:

Check the trends and control for hype, rarely if ever does hype affect at the transaction level.  For example, in spite of the hundreds of millions spent on "BUY USA" and relabelling in the 1980s and countless surveys proving the americans prefer USA made, it does not show up at the transaction level.    Same with recycled etc...  people vote with their pocketbook when they buy.

If you see money going into green, well, when a good part of that is Solyndra and Shell Oil claiming to be investing in green strip mining, well, ok...but not really... it's just pork labelled beef.

As to healthy, people have always wanted that.  Oleomargarine and no salt nor fat were sold as healthy for the 8 decades the food pyramid was king...  now that people have figured out they were scammed by big govt/big food, they still want healthy, but they are back to what was once good food.  

Aside from being skeptical of demand, the question is how will demand at the macroeconomic level translate into sales of your item necessarily at the microeconomic level?  You're entering a jungle hoping to land on a dime.  My point is, this needs to be turned around: how to get from being on the dime to wading into the jungle (because who knows what happens in biz after you get started.)

If there is implicit advantage assumed in esoteric knowledge, check that since the fact the info is researchable means it is in fact out there.   Your premise is betting that there are not enough people with knowledge and marketing and product development acumen to meet the needs if and when new avenues open up.

Look at microbreweries and iPhones.  Beer was a well known industry when my favorite president ever, Jimmy Carter, deregulated beer.  Lots of people jumped in, but by the time the trade stats revealed that specialty beer imports were growing,  those with skill and expertise and acumen already won the race.  iPhone could not be contemplated when Jimmy Carter deregulated telecommunications, and again, it was the Steve Jobs of the world who pulled that one off.

So here is my critique.  You do not have a product to sell today, so you are in no position to start up a business.  (this class is about starting up a business now.) Your rationale regarding demand and implied esoteric knowledge may be spot-on, but what does it have to do with you?  And in any event, the series of steps that must go right for you to get where somehow there will be a business is a task Herculean that Odysseus would decline.

The "aha" above relates to my prejudice that processes that succeed in government work are the antithesis of what works in entrepreneurship (the thesis, and there may very well be a synthesis between the two, but I have not seen it.) No doubt your goals working in the commerce department were met by following whatever process leads to that result, but it is antithetical to what works in small biz.   I am keen on this topic because no matter who wins the elections over the next decades, either party will cut back on government service and repudiate pensions.    The process is well underway, and to me this means a whole lot of productive contributors will be entering the market to the benefit of all.  I want to save them time and money getting to "thriving..."  the more people producing the better for all...

Sure, you could pick any known product as a biz now, but I suspect you intuit that all demand for that product is adequately met.  So what would be your competitive advantage?  Lower price?  You can test it, but that won't work.

I've wandered a bit because your circumstances are very interesting to me, inasmuch as I want to get the process right for people to shift from govt to private work.  You seem willing to attend to the challenge.

So back to the question...  if you could trade absolutely any good or service you wanted to, what would it be?    Still your original products?  Of all the things you can imagine and reflect on, that is the one?  Think on this more, and we open with this question Wednesday night...  I'll offer a paradigm shift...

John

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