Success Tip: Taking the First Step

March 6, 2011

If you are like most entrepreneurs, you have BIG plans.  The success journey can be a long one and you are eager to take that first step.  The question is…which one should it be?  Like a toddler who is taking those first tentative steps, some will be met with words of encouragement and applause and others many have you landing on your backside with a thud.  Either way, if you don’t pull yourself up and step forward, you will never get anywhere. Read the rest of this entry »


Dear President Obama, since you asked…

November 10, 2010

In his recent remarks on the October Jobs Report, President Obama said…

“I am open to any idea, any proposal, any way we can get the economy growing faster…”

(If you can not see the video, you can find it here on YouTube.)

Thank you for asking Mr. President, here is my list:

First and foremost, focus on the sectors that are proven job creators.

Research from the Kauffman Foundation shows that newly created and young companies are the primary drivers of job creation in the United States. Added to this, data from the Edward Lowe Foundation and their research on Second Stage Companies that shows that establishments with 10 – 100 employees and $1 million to $100 million in revenue have created the vast majority of the net new jobs over time.  (Take a look at the data at www.youreconomy.org)

So if you are looking for job growth, focus on providing early stage and second stage companies what they need – and the American people will get what they need – more jobs.

These businesses need access to capital to grow and to create jobs.

The fuel that drives job growth in these growth sectors is capital.  When there is a steady supply of capital, there is a steady supply of new jobs.  It is capital that funds innovation, that purchases resources for manufacturing and supplies the catalyst for future growth.

Where does the money come from?

The capital that fuels growth in  early stage and second stage businesses comes from the following areas – the life savings of the business owner (including IRA’s and 401K’s with penalties), credit cards of the business owner (personal or business issue), F&F (Friends and Family), Angel Investors, Private Equity/Venture Capital, SBA Loans, Traditional Lending, Public Equity Markets and most important of all CUSTOMERS. 

In addition, the capital for growth often comes from operational cut backs and efficiencies inside the business, and more often than many would think, a business owner that is forgoing a paycheck while working 60 – 70 hours a week to keep things growing until the cash flow problem gets fixed.  

So if we need capital to grow these businesses and create jobs here are some suggestions:

Life Savings and 401K’s

Forgive penalties on withdrawals from IRA’s, 401K’s, and the like made by business owners for the business or to feed their families while they personally went without wages to keep the business alive AND allow them to put the money back in when things get better again.

Credit Cards

Extend the protections in the CONSUMER CREDIT PROTECTION ACT to include credit cards and charge cards that are issued to a business IF the card is personally guaranteed by the individual card holder.  These “business cards” are actively marketed to small business owners yet do not carry the same protections as those issued to “consumers”.

Friends, Family, and Angels

After the business owner, the most common form of early stage capital infusion comes from friends, family and Angel investors.  Interestingly these are the same people that will be adversely affected if the Bush Tax cuts are not renewed AND these are often the same people that are paying the lion’s share of taxes already.  It is critically important the that Bush Tax Cuts be made permanent.  The goal should not be to have a few people pay more – the goal needs to be stimulate job growth so that more people can pay something!

Private Equity and Venture Capital

Private Equity and Venture Capital have played major roles in the growth spurts of high growth and high potential companies.  These American businesses and private investors invest in American businesses and can be a supercharger on our growth engine.  Lynn Tilton, chairman  and founder of Patriarch Partners, traveled to Washington with a plan to help companies and spur job growth based on a proven model that she uses in her own companies.  This process is so unique that the US Patent Office issued a patent for it.  (Click to view Lynn Tilton’s patent.)

Administrator Karen Mills and her team at the SBA are making real progress with the expansion of the SBIC program but wouldn’t it be great to have more leaders and investors involved in this effort to create a lasting solution? Perhaps it time to take another look at her proposed SME Rescue Loan Plan or perhaps give her a call.

Tax breaks for small businesses

Mr. President, you often speak of your support of tax breaks for small business. Any tax break that allows businesses of any size to reinvest in the business and create more jobs is a good thing.  BUT, it is important to remember the tax breaks only benefit companies that are making profits to pay taxes on.  Many of the companies that will grow and create jobs now and in the future are investing ahead of the curve and are not yet profitable.  For these companies, a tax break is an empty promise. 

Instead perhaps a good idea would be tax breaks, tax credits, or other incentives for private equity and angel investors to motivate more of them to get out of the “parking lot” they are currently in and put their money to work in businesses that are creating jobs.  The American people have invested in Wall Street Bailouts, Cash for Clunkers, and credits for energy efficient appliances.  Perhaps its time we invested in American investors who are putting their hard earned money into American businesses.

Promoting innovation

Innovation is my personal passion.  My definition of innovation is simple.  Innovation is doing something in a new way that makes life better.  Just as we as business owners, investors and innovators need to focus on changes that make things better – we need you to do the same in Washington.  This includes:

  • Reversing the provision in the Healthcare Bill that will require all businesses to file a 1099 for EVERY supplier over $600.   At a time when you need us to run faster, you are tying our ankles together with red tape.  I know that Congress is the team that needs to fix this problem – but could you whisper in their ear?
  • Cut down on the red tape in general.  From an ever growing list of regulations on how we get things done to a multitude of forms in triplicate or worse when we do business with government agencies, it is getting harder to do business when we need it to get easier. 
  • Work with Congress to fully support the SBIR program on an ongoing basis instead of continually placing Band-Aid on it to keep it going.  According to the NSBA,  “small R&D companies employ 38 percent of all scientists and engineers in America. This is more than all U.S. universities and more than all large businesses. Furthermore, these small companies produce five times as many patents per dollar as large companies and 20 times as many as universities—and more small-business innovations are commercialized. Yet small companies receive only 4.3 percent of the federal government’s R&D dollars. The SBIR program provides more than half of this amount.”  Here’s a suggested innovation – set a permanent requirement to allocate government innovation contacts and  SBIR awards to small business based on the proportionate share of innovators they employ.  If we generate results like these at just over 4%, just imagine what would happen if we had almost 40^% to work with. 
  • Create a fast track program for new technologies and innovations moving from Phase I to Phase II contracts with government agencies.   With today’s backlog, some very promising companies and the technologies they have created could disappear due to delays that in some cases have been more than a year.
  • Drive innovation within the US Patent Office to take the costs out of what we need to do to protect American innovation.  Many small businesses can not afford the cost, time and expense as it is.  And for many of them, a patent is a of little value since most small businesses can not afford the cost to defend it.  (Small business patents are being violated on a regular basis and the response from big business is “sue me” when they well know that the small business could never afford to go the distance or carry the burden hundreds of thousands if not millions of dollars in legal fees.)

So Mr. President, you asked for suggestions.  These are mine.  I don’t know if you will ever see them, but I truly hope that someone on your team is listening.  We’re all in this together after all.

Sincerely,

Joan Koerber-Walker

 

About the author:

Joan Koerber-Walker, MBA is a small business owner and an angel investor who makes her home in Phoenix, Arizona.  As a blogger she has personally interviewed Lynn Tilton on several occasions and has personally worked with Patriarch Partners and its portfolio companies and seen the results of what the Patriarch process can do first hand.  In addition she is a past CEO of the Arizona Small Business Association and  a past member of the board of trustees for the National Small Business Association. During that time she met with and shared ideas with hundreds of small businesses and second stage companies on key issues including health care, workforce development, regulation, taxation, and access to capital.  She currently serves the small business community as a volunteer ambassador for SCORE in Phoenix, Arizona, as chairman of the Opportunity Through Entrepreneurship Foundation and as co-chair of the Arizona Entrepreneurship Conferences (AZEC10) which will gather together over 300 entrepreneurs, small business owners and investors together to share ideas, connect, and hit the “reset” button on their businesses on November 17, 2010 in Phoenix, Arizona.

To contact Joan Koerber-Walker, click here.


Free – Isn’t

January 12, 2010

There is a lot of talk about all of the things that you can get for FREE these days.  Not surprising in an era where budgets are stretched and we are all looking to get more for less.

Last week, I had the pleasure of listening to Lon Safko, co-author of the Social Media Bible speak to a group of counselors from SCORE and the SBDC as a prelude to Greater Phoenix SCORE’s Social Media Event this January 14th and 15th.

During his presentation, Lon kept emphasizing the reasons, excellent ones BTW, that businesses need to pay attention to and utilize social media.  And repeatedly he punctuated his message with a continuing theme…Oh Yes!  It’s FREE!

But is it?

While access to these new social media platforms is free or in the case of some emerging premium products relatively inexpensive, let’s look at some of the costs.

FUNDING and Economic costs

Based on reports from Tech Crunch, the four most prominent platforms in their categories (Twitter, Facebook, LinkedIn, and Google) raised over $1 Billion in equity funding to get to where they are today.

  • Twitter is free – $160M in funding to date according to this time line from TechCrunch
  • Facebook is free – $716M in in funding to date according to this time line from TechCrunch.  With over 350 MILLION active users worldwide (if you are a demographer an interesting side note is that if Facebook users were a nation, they would now have exceeded the population of the United States of America making the Facebook Nation the 3rd largest country in the world!) 
  • LinkedIn is free (although new premium features carry a price)  – $103M in funding to date according to this time line from Tech Crunch. With more than 45 million users representing 150 industries around the world, LinkedIn is a fast-growing professional networking site that allows members to create business contacts, search for jobs, and find potential clients.
  • Google Search and many applications are free.  The search engine activity has been estimated at over 2 Billion searches each day with a related estimate of 300 Million unique users daily.  Google received $25.1M in funding according to this time line from TechCrunch

And that does not take into account that these are simply mediums across which information is shared.  The platforms have no value without content creation – think people sharing information -  and that takes time.  If we estimate that a combined 1 Billion visitors spent just 1 hour on the platforms entering/sharing their content each year at MINIMUM wage of $7.25/hour – content creation across the platforms would cost $7.25 Billion dollars – and that is for only 1 hour per year at minimum wage!  Now think about what your time is worth?  How many hours have you actually spent?

There is no such thing as a free lunch.

We’ve all heard it.  Heaven knows who said first.  “There is no such thing as a free lunch.”  I’ll attribute this one to my Grandma, she may not have been the first to say it – but she was the first to say it to me.   Everything has a cost, whether in time, money, or the opportunity cost (what you could have gotten if you used your time and money in a different way.)   Until you truly understand costs, you can never calculate value since cost is a key component of the value equation.

Value = Benefit – Cost

The concept of a wanting a free lunch is pervasive today across our entrepreneurial and business communities – not to mention our society as a whole.  Whether the benefit is accurate information provided by media outlets, advice from thought leaders, time with business advisors, or creative content like books, films and movies – there is a growing perception that in the new information age, knowledge and content is free.  But if we continue along this line of thinking, we may begin to find it is just the opposite.

No need to buy the cow if you already have the milk.

This was another favorite “Grandma Quote.”  For those of you who are smirking, no this post is not going down THAT avenue.  This maxim took on an entirely new meaning when I moved from a salaried position in corporate America to the role of an entrepreneur whose livelihood and business was based on providing valuable information for a fee.

In the early years of my business, I was actively networking and sharing ideas.  Soon my calendar was filled with invitations for FREE coffee, FREE Lunches, FREE dinners where a new business friend wanted to ‘pick my brain’ or ‘share’ an idea.  But more often than not, all that came out of the exchange was a few more inches around my waistline.  Over those meet ups, I would answer their questions, offer contacts, help create solutions.  And more often that not, my potential new business evaporated.  They had gotten what they needed from me over lunch while all I got was a hamburger and a diet coke!

Then Grandpa, an attorney, came to my rescue with some simple advice.  “The first exploratory hour is FREE, after that you go on the clock. Your time and knowledge IS your business.  If you do not value it, no one else will either.”

I’ve gotten better over the years.  (Although, I have to admit that I still give away “gallons of milk” because I often share a lot of ideas in that first hour and enjoy connecting with new people or volunteering within organizations that help entrepreneurs.) But now, when someone asks to come back to the table for second, third or fourth helpings, I am a bit wiser about knowing when to graciously decline those invitations to just get together and ‘chat’ over lunch.

For as Grandpa helped me understand… if you can’t find a way to run a profitable business, the business won’t be around to help others profit.

Google has figured this out and is making money.  Eventually, the other social media giants will too.  Old media will need to learn to monetize their ventures in new ways and the new cadre of consultants emerging from the rolls of corporate layoffs will learn the same lessons I have.  There is no free lunch – especially when you are the one serving up all the free information.

Well enough of all this for now. I need to get to work.  Understanding how to use Google Apps for a new project is the next item on my To Do List today.  To quote my friend Lon… “and did I mention that – it’s free?”  Well except that it will probably take all my ‘free’ time for the rest of the week to figure it all out.

Thanks for stopping by.  Stay Tuned…

Joan Koerber-Walker


Talk of the Town – 2010 will be MY Year

January 9, 2010

j0426527[1]Each year in January, I try to plan my calendar to meet with friends in the first two weeks.  I have a diverse group of friends ranging from entrepreneurs to folks from corporate America, from local community volunteers to national leaders, and from neighbors to old school chums.

By reaching out, reconnecting, asking questions, and listening, I get a really good cross section of what is happening and what is on people’s minds.  It also gives me a pretty good feel for what to expect in the year to come.

It probably comes as no surprise that, when I did this is January of 2009, there were lots of rumblings of rough weather ahead.  People where battening down the hatches and preparing to hold on to investments, jobs, and businesses by sheer will.  Folks that I talked to did not know what to expect – but one thing was pretty consistent… they we not expecting it to be good.

Yet, this year, there is a different feeling in the conversations.  I don’t know  what it is  – the stars in alignment, something in the water, or just the impact of moving into a new decade, but once again a message is emerging from all of these conversations – a common statement and theme that  I am hearing from others…

2010 will be MY year!

The first time I heard it expressed by a friend with such confidence that I felt it too, I thought – ‘Wow, good for you.’  Then I heard it again – this time by a business owner – “This will be OUR year”.  And then again from an entrepreneur, then a scientist, then a developer, then a non profit leader, and so on.  The words were slightly different each time, but the theme kept repeating over and over again.  2010 was going to be the year when they made a break through, grew their business, did something new, made a difference.

So, will 2010 be YOUR year? 

We all have the chance to make 2010 our year.  Here are a few things you might want to put to work for you.

1.  Write down your goals and put them somewhere where you see them every day.  A series of small goals that build on one another are better that one great big one.  That way, as you achieve each small goal or milestone, the sense of accomplishment gives you more incentive and energy to tackle the next one.

2.  Gather Great People Around You.  Whether you call them a team, a posse, a workgroup or just friends, surround yourself  with people who share your values AND your goals. By working together – things happen faster.  The shared experiences of your team can also help you avoid pitfalls and mistakes that might shift you off course.

3.  Focus in on the things that will make the biggest impact.  It is too easy to be distracted by little things that can keep you from doing the important ones.  Take the time to understand how you are most productive and then work with others to delegate or off load non core activities.  Paying someone else to do the time consuming nuisance projects can save BIG money in the long run or free you up for more impactful or productive activities.

4. Use Processes and Systems to Your Advantage.  The best businesses, projects, and ideas are those you can replicate over and over again.  Figure out what works best, get it down on paper and integrate it into HOW you get things done.  By creating repeatable systems or processes, you save time, save money and often by analyzing the system – continue to improve it.

Never forget that “2010 will be MY year”. 

Stay positive and positive things happen.  Don’t let anyone tell you differently. 

Make 2010 your year.

Thanks for stopping by.  Stay Tuned.

Joan Koerber-Walker


Promise and Compromise

January 5, 2010

You’ve probably had the  experience where through the diverse objectives and perspectives of the people on your team, what you set out to create and what you got where not exactly the same.   As concessions are made to reach a point of consensus, a completely different animal begins to takes shape.

It has been said that “a camel is horse designed by a committee.”

Interestingly, having researched this much quoted maxim, there is no true consensus on  WHO actually said it first. 

As leaders, be it in our home, in our business, or  in our community, we are often in a position requiring a promise or commitment.  In many cases, to keep that promise or commitment will require the help of others, and often to get that help, you face a compromise.

When you look at the definition of the words as indicated in the links above, I found something interesting. They both come from the same Latin root – promissus which means to send forth and compromissus which means to send forth mutually  or together.

Over the last two years, watching national and world events, I have seen many examples of this, but no better examples than what we have all watched unfold in Washington D.C.

Throughout 2008, we heard a lot of promises from candidates ranging from local offices up to the highest office in the land.  But, then that is to be expected.  We as a people have come to elect people based on what they say they will do as opposed to what they have done or what they can actually do.  Seem confusing? Here is an example…

On January 11, 2009, the New York Times published a list of Candidate Obama’s Campaign Promises.  They made a truly impressive list.  Yet for the most part, the list was a list of objectives that acting alone, no U.S. President could keep.  (To be fair, if you go back to the ‘promises’ made by the other side, the list was equally impressive and if acting alone, equally unsupported.)   For the reality is, in the United States, we have a system of checks and balances between the Executive Branch, Congress, and The Judiciary.  The Legislative branch makes the law. The Executive branch executes the law. The Judicial branch interprets the law. Each branch has an effect on the other and for any campaign promise to be kept, all three must be in agreement.

To reach that agreement, there often must be concessions and compromises before we can move forward together.  It can be challenging to get TWO people to agree on a contentious issue.  Imagine how much harder it becomes when you are looking at creating consensus among one President, 100 Senators, 435 Congressional Representatives, and ultimately if needed 9 Supreme Court Justices.  Add to that truly monumental challenges like access to affordable healthcare, a less than popular war, a financial collapse, a national deficit so large that the numbers can not be conceived by the average person, and some of our largest states on the verge of financial insolvency. 

Looking at it from that perspective, does it come as a surprise that concessions and trade offs are being made to get ANYTHING accomplished? 

Over lunch with a friend last week, we were discussing what it takes to get things done.  Not just in Washington, but in our businesses and in our communities.  Often, no matter what you do, no one is completely happy with the final result.  In life, just as in Washington, there are trade offs and compromises that must often be made to that we can move forward.  In one way or another, progress comes at a price.

The true challenge, as individuals and leaders, is to have a clear understanding, BEFORE you make a promise, of what will be needed to gain consensus and to get all the support you need to make it happen.  Otherwise, instead of ending up with a sleek and agile Horse, you just may end up spending your days with a Camel!

Thanks for stopping by…Stay Tuned.

Joan Koerber-Walker


Exploring The Entrepreneurial Myth – an interview with Michael Gerber

December 26, 2009

Gerber M 0020

I first met Michael Gerber in November of 2006 when he generously gave of his time and knowledge to come to Phoenix as a volunteer to speak at the First Annual Arizona Entrepreneurship Conference.  OTEF was a fledgling organization in those days – but we had a dream – to provide entrepreneurial education, mentoring, and support to at risk populations in finding economic sustainability through entrepreneurship.  To do that we needed the funds to offer programs and the conference was a way to share our message and raise the funds to pursue the dream.  Our project captured Michael’s imagination. 

Since that day, we’ve had the opportunity to get to know each other better.  During my years as CEO at the ASBA, Michael was a wonderful supporter, sharing his knowledge on teleconferences with our members, coming, with his wife Luz Delia, to share in the celebration of the 2007 Arizona Companies to Watch, sharing ideas with me and our small business community at the Enterprise Business Conference in 2008 to celebrate Small Business Week, and best of all inviting me to The Dreaming Room and plopping me down in the Hot Seat for a challenging one on one session.

Over the years he has had many titles – but my favorite – is Chief Dreamer.   When you get to know him, you see how important the dream is to him and to the tens of thousands of entrepreneurs he has worked with.

In the video below from the Cisco Innovators Forum, Michael shares some of his thoughts on how entrepreneurs can get it right from the beginning.  After the video – I have a few questions of my own to ask the one and only Michael Gerber.

“A life without a dream is a life without a purpose. A life without a purpose is a life without meaning.” Michael Gerber

JKW:  Michael, in your books, seminars, and programs, you share the secrets of entrepreneurial success.  You have spent decades sharing these secrets – WHY do you do it?

MG: What else would I do? Everywhere I look, people are suffering for a lack of direction. During my life I have worked with thousands of those people, and as they begin to see their lives through the entrepreneurial prism dramatic shifts occur. It’s a fantastic feeling to witness those shifts.

JKW:  You have made a career helping entrepreneurs succeed in achieving their dreams.  Have you always been successful or was there a time when something happened that others would term an entrepreneurial failure?  If so, how did you recover?

MG: I’ve had so many failures I can’t count them. In fact, I don’t even want to, the pain is too great. But, at the same time, my failures have always led to successes. Not necessarily connected, perhaps, but the one, the failure, taught the other, the success, that the deliberate straightforward path is not always the best path, that the success is most often realized as an epiphany that arises out of the failure in a completely unexpected fashion. So, I have come to look forward to the unexpected.

JKW:  You have written over 13 books for entrepreneurs and you have a new one being released in January 2010.  Can you give us a little sneak peak at what it’s all about?

clip_image002[3]MG: It’s name is The Most Successful Small Business In The World: The Ten Principles. It speaks to the essence of what I believe must exist in an enterprise, and an entrepreneur’s relationship with it, for it to truly flourish. You’ll have to read it to find out the secret.

 

 

 

 

 

 

 

JKW: When you are not writing, speaking, and inspiring others, I know that you like to read – a lot. Whose book inspires you – and why?

MG: I read fiction, not business. I rarely read anything to do with business. The reason is, I don’t learn from books, I learn from action. On the other hand, I highly recommend that all small business owners and entrepreneurs read my books. Because unlike all other business books, my books are born out of the actions I’ve taken, and the conclusions I’ve reached as a result of those actions. In short, they are less books, than they are cautionary tales.

JKW: You and I have talked about social media, blogs, Facebook, and Twitter as it has been evolving. So Michael, do you tweet?

MG: Not yet, but soon.

JKW: I’ve heard that this year, as a special gift, you are hosting a FREE con call on New Year’s Day with entrepreneurs to help them kick the year off right. How can our readers participate?

MG: Very easy. Just call in at +1 (866) 951-1151 (Conference Code Number: 1984938# ) 

It starts at 4 p.m. PST and will last 90 minutes. I do this every year, but this year is special, as my new book comes out on January 6th, and during my Teleconference I’ll be sharing The Ten Principles for creating the most successful small business in the world.

 

JKW: Thanks so much Michael for taking the time to answer a few questions. As you know, I always have more. I guess I’ll just write them down and heave them ready for when I see you in Phoenix for a Meet Up on January 25th. (Readers: Stay tuned to @joankw for more details in January.)  Who knows – maybe some of our readers will be there too and have new questions for both of us.

So readers, what do YOU think. Are you ready to kick off the new year right? I’ll be on the call – will you?

Thanks for stopping by. Stay tuned…

Joan Koerber-Walker

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The Quest- In search of a transformational company

November 9, 2009

clip_image002In literature, as in legend, there have been many great quests. One in particular that has captured imaginations, for over two thousand years, is the search for a simple cup used in a great tale of transformation. Yes, The Quest for The Holy Grail.

This quest has been the inspiration that sparked great literature, epic poems, and motion pictures running the gamut from Monty Python to  Indiana Jones.

While my quest is not one of such mythical proportion, as I sat pondering how to share my plans with you, the legend of The Holy Grail leapt to mind. 

My Quest

I am, together with a valued group of friends, looking to acquire a controlling interest in a very particular company.  Our search and the legendary quest have more than a few things in common. In both cases they combine Innovation, Leadership, and Growth to create Lasting Value.  These are my personal passions. There is nothing like the feeling you get when you discover something with true potential and then do what it takes to Make It Great.

What’s been happening?

This year, I have been working with a small team of friends and advisors to search out really cool deals.  We’ve found some great ones, but not the right one. Not yet. 

Along the way, I have gotten much more active in connecting to friends old and new via a range of social media tools

However, it all came together when I was having lunch last week with Morris Callaman at a beautiful resort nestled against a mountain in Paradise Valley called Montelucia

Morris asked -

“Joan, what do you think about expanding this search and inviting your social media network to participate? You could literally ask for help crowd-sourcing this acquisition search.”

And that’s how it started.  So, here I am asking if you will help me locate the company I would like to lead next. If so, then what follows are some of the criteria we find necessary to successfully recognize our “grail” when we find it.  Ready? OK. Lets discuss a little detail around what this company is, and perhaps even more importantly, what it is not. An ideal company will be one where we can combine Innovation, Leadership, and Growth to create Lasting Value.

Innovation

Innovation in my book is doing something in a new way to make life better for the people who matter most to us – in this case employees, customers, investors, and strategic partners.  It is a company with a product or service that can transform an industry or niche.  For example, my friend Amilya Antonetti changed the way we look at soap in her quest to save the life of her son and now she is on a quest to help other entrepreneurs ask the right questions, get the right information and the things they need to succeed.

Criteria #1:  A product oriented company that will transform its market by creating new value through a better way of doing something(s). 

Unlikely Fits: Singing pop bottles, Presidential Pet Rocks, the corner store, or the next great social media tool.  While there may be lots of investors looking for these, I am not one of them.

Leadership

A great idea only gets you so far before it needs more.  In this case more is the ability to see the future direction of the company’s journey and to predict and obtain what it will need along the way.  Many a great new company has lost crucial momentum when the leader that led the way for the first stage of the journey is not ready for the next stage of that steep uphill path, which many entrepreneurs forecast and yet few would want to travel alone. 

The prize we seek on this quest will have a founder and a team that is looking for a new guide as they begin the climb to revenues and profitability so that everyone, employees, customers, investors and strategic partners alike, benefit from the next stage in the company’s growth.

Criteria #2: A dedicated team in search of experienced leadership and resources to help them successfully move along the growth path.

Unlikely Fits:

  • If ALL YOU NEED IS MONEY so that you can continue along the path you are already on.
  • If your goal is to maintain the status quo.
  • If, as the owner, you are not interested in passing the baton to the next runner in the growth relay.

 

Growth

The company must have solid growth potential and demonstrate how it could scale to provide a more than reasonable return to the investors.   

Growth curves come in all shapes and sizes.  There’s the steady incremental growth of a mature business, the graceful leaps of the Gazelles, and the inevitable ‘Hockey Stick” that appears over and over at every venture conference I have ever attended.  Yet, in the real world, it’s not the pretty charts and pictures that matter, it’s the foundational elements that make a transformational company stand out.  Some Gazelles grow to be great companies, while others rapidly run out of steam after the initial burst of growth.  Hockey Stick Growth Curves can be ‘the big pay day’ or they can simply be a sign of a business in danger of snapping under the pressure of too much, too fast.

Criteria #3:  The best true indicators of growth potential are not charts and graphs, but rather how does the company (or product) provide a solution that is usable by a large number of people and BETTER than substitutes (or lack thereof)?

Unlikely Fits:

  • One more “me too” solution in an already overcrowded market.
  • A terrific solution for a very small customer base (since these rarely can scale.)
  • Product or services that are not designed to fill a genuine customer need (since customers must ultimately be willing to pay and karma is important to me).
  • A ‘great idea’ that has not ever been built, tested, or sold to ANYONE (since I’d like it to already have at least one customer).

Lasting Value

And in the end, building a great company is more than just creating a widget, jobs, or shareholder value. 

Criteria #4:  It’s creating something to believe in, and be proud of, for the people who matter most to us (employees, customers, investors and strategic partners). 

Unlikely Fits:

  • Products or services you would be embarrassed to discuss with your parents.
  • Products or services that add no value to or potentially even harm the community, the environment, or others (since that just isn’t who I am). 
  • Any product or service that makes promises it cannot keep (since that certainly isn’t me either).

So that’s my list.  Have YOU seen this company?

Of course, there are at least two BIG differences between my quest and the search for The Grail of legend.  One, I know that I’m going to find what I am seeking, and Two, this is more than a personal journey, it is also an experiment in the power of social media.  So, if you’ve seen this company please let me know.   You can always leave me a note here, on my blog or, if you want to keep it confidential, you can also contact me by clicking here.

As long as we are on the subject, if you happen to be looking for a company too, just let me know what YOU are searching for and I’ll be happy to pass along what I may find for you along the way. Unlike the fabled Holy Grail, there is more than just one great opportunity out there.

Thanks for stopping by.  Stay Tuned…

Joan Koerber-Walker

clip_image003P.S.  One of the best parts of this journey is connecting, engaging, and being inspired by fellow entrepreneurs.  On Thursday, November 12th in Phoenix Arizona I will be doing just that at AZEC09.  Who knows maybe I will see YOU there and we can chat.


Looking out towards 2010

November 1, 2009

AZ Ent logoHow did it get to be NOVEMBER already!  It seems like just the other day I was writing articles about Embracing Change in 2009 and now, in just two short months, 2009 will be one for the record books. 

It’s still to be written what the final outcome of the health care debates in Congress will be, or how the year will wrap up from an economic perspective, but many will tell you they can’t wait for 2010 to make its arrival.

But there have been some bright spots in this recession that we have all struggled through.  Companies that are making great things happen in the world of social media, women’s health, green materials, and a host of other industries.  That’s why, as I prepare for the exciting things that I know will happen in 2010, I am getting ready today by attending the 4th Annual Arizona Entrepreneurship Conference on November 12th. 

As chairman of the board of OTEF, the Opportunity Through Entrepreneurship Foundation, November is always a busy time as we prepare for the conference.  Each year’s conference is vitally important since all of the proceeds go to fund OTEF’s efforts to provide entrepreneurial training and support to at-risk populations – giving them a better chance for future financial sustainability.

But, as an entrepreneur, I look forward to the conference for the many great ideas I know I will receive there each year.  This is the only place I know where, in one day, I can gain insights from national thought leaders like Tara Hunt and Michelle Robson (EmpowHer) , connect with fellow CEOs from TiE and EO to learn what’s working for them, and get the latest updates in technology and business trends from CEOs and thought leaders who are on the front lines.

I’m also excited this year that we have friends coming from far and near to share ideas.  Patti Dragland (@StrategicSense) is coming in from Calgary, Tara Hunt (@MissRogue), author of The Whuffie Factor,  from Montreal, Howard Lindzon (founder of StockTwits), Kevin Surace, of Serious Materials, is flying in from Sunnyvale, and my favorite entrepreneurial blogger, Marty Willing (@StartUpPro), will be there not to mention fellow conference team members and great friends like  Francine Hardaway (@Hardaway), Steven Groves (@StevenGroves), Ed Nusbaum (@EdAZ), Merlin Ward (@MerlinWard) and many more!

November 12th is an important day for gathering new ideas, making connections, and to just get that extra dose of inspiration that will come in real handy in 2010.  I know where I will be on November 12th.  How about you?

Thanks for stopping by.  Stay Tuned…

Joan Koerber-Walker


Drawing a Crowd in the Cabbage Patch

October 27, 2009

I was scanning some articles online this morning when I cam across a fun one at How Stuff Works titled 23 Must-Have Toys from the 1950s and Beyond.  So I decided to check it out.  Of the 23 ‘must haves’, only Strawberry Shortcake never made it into either my or my children’s toy collection.  But it was the Cabbage Patch Kids that brought back the memory of how one innovative toy really drew a crowd.

imageXavier Roberts was a teenager when he launched his Babyland General Hospital during the 1970s in Cleveland, Georgia, allowing children to adopt a “baby.” In 1983, the Coleco toy company started mass-producing these dolls as Cabbage Patch Kids. Each “kid” came with a unique name and a set of adoption papers, and stores couldn’t keep them on the shelves, selling more than three million of the dolls in the first year.

 It was just before the Christmas holidays in 1983, and my fiance Chris worked at Coleco, home of the Cabbage Patch.  EVERYONE was trying to get their hands on the little darlings – even employees.  The company had to even hold a lottery for employees to be able to purchase them.  So after months of lotteries, we had a small collection of six Cabbage Patch Kids ready for adoption. 

I really did not give it too much thought when I lined up the ‘Kids’ on the back seat of my car and left my home in South Windsor, Connecticut on a Saturday afternoon to drive down to see our families in Danbury, Connecticut.  But I got a real lesson on what it is like for an innovation to draw a crowd when I stopped at a McDonald’s along the way to get a Diet Coke.  The young girl at the drive thru window saw into my back seat, and exclaimed!

WOW!  Where did you get all those Cabbage Patch Dolls!

That’s all it took.  Before I had even been given my cup, my car was surrounded by Moms, wallets and checkbooks in hand, asking me what it would take to sell them “Just One.”  I explained that they were gifts and that they were not for sale, but finally the manager had to come out and move the eager Mommies away – before I could put my car in gear and make my escape from the drive thru.  I learned a lesson that day…

When an innovation capture’s the public’s imagination – it draws a crowd.

Over twenty-five years have passed and I have seen many innovative new products come and go.  Some are just a passing fad, but others have real staying power.  As an investor, I look for those companies with inventions or solutions that can make life better in one way or another.  Products or services that capture the imagination and can, with the right resources, literally draw a crowd in their chosen marketplace. 

Some of these companies have been in technology – like when Bernie Vonderschmidt, the first Chairman and CEO  of Xilinx, shared his vision of the next generation in silicon technology,the FGPGA, or when Dr. Michelle Hanna of RiboMed helped me to imagine a day when we could detect and treat diseases like cancer BEFORE it was too late and our loved ones were suffering.  Others have not.  But none of the innovations I have invested in have been toys.  Perhaps because I never got over the experience of being ‘mobbed by Mommies’ at McDonalds.

Thanks for stopping by.  Stay tuned…

Joan Koerber-Walker

 


Valuing a Company

October 18, 2009

From time to time, I get involved in answering a tricky question.  “What is this company worth?”  Sometimes the question comes up when speaking to a business owner or executive who is truly trying to increase the value of their organization.  At other times the question is raised from someone looking for investors or buyers.  And then most importantly – I ask it myself when the buyer or investor might be me.

Years ago, in business school, I had great professors at the W.P. Carey School of Business.  They taught me the science of financial valuation and how to look at the opportunities  and systematic business risks that lie buried behind the balance sheet.  There where times in the learning process when I might have cursed my teachers for being so exacting, but the lessons they taught combined with the insights I gained from my fellow students were worth more than a pot of gold.

Measuring a company’s value falls into 3 categories

What it has – it’s assets

Assets can be real and tangible.  We all know about these: property, plants, and equipment plus firm contracts and money in the bank.  We can see it, touch it, count it up.  Other assets are intangible.  We know that there is some level of value, but measurement is often subtle, involving an estimation of the worth.  This can be a patent, a trademark, or a customer or prospect list that in and of it self has no hard value, but when put to good use can be converted to tangible assets in the future, 

What it lacks or  owes – It’s liabilities

On the other side of the equation are the liabilities.  Some are easy to measure and take the form of debt, contractual obligations, or other factors that reduce the company’s assets.  But there are other more intangible liabilities to factor in like adverse economic conditions, holes in the team, or a lack in organizational bandwidth – you know – too much to do and not enough resources to do it with.

What It promises – Its brand as an organization

And most important of all, I look at what the company promises to its people, its customers, its partners and its investors through its brand as an organization, PLUS  its ABILITY to keep those promises.

We all make promises, and most up us do everything in our power to keep them.  The question I focus on most closely is can the company turn promise into reality with its unique combination of assets and liabilities. 

  • Does it have a clear and simple plan that the team can follow to keep the promises it makes? Are there clearly defined goals, strategies, tactics? Are there clear measurement milestones along the way?
  • Does it have a culture that supports its team in achieving shared objectives.  It’s sad but true.  Objectives and goals that are not shared by the team are rarely achieved.
  • Does it have the resources to give to that team so that they can execute on the plan? And if not – does it have the ability to get them?
  • Does it use its assets wisely?  Is it investing in its people and its product to take and hold a leadership position in its markets  in the future?
  • Does it look at its customers, supply chain, and investors as collaborative partners and treat them accordingly?
  • Is leadership committed to keeping the promises it makes to the team, the partners, the customers, and the investors.
  • Does every member of the team share that commitment?

The Value of the COMPANY

When I am done with the measuring, I add it all up.  What I then have is a valuation of the company in a form that they rarely teach in business school.  A clearer picture of whether the company can keep its organizational promise and create value as well as what it may to make that happen, and what I can do to help along the way.

Because, at the end of the day, the true value of any company is in the promises it makes, and its ability to keep them.

Thanks for stopping by.  Stay Tuned…

Joan Koerber-Walker


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