Wednesday, December 31, 2008

Advice for tough times

At year's end, we get to hear many versions of 'the year end roundup'.

Most of the reviews this year are just awful, no matter what perspective the assessment is being done from. Rightly so. I've lived through many recessions and run businesses through recessions since the mid 1970s. This one came on faster and more comprehensively than anything I have ever seen.

When I talk to peers in the small business world, the talk isn't about the usual stuff; it's about how much debt they are carrying. There are bad stories everywhere, but there are also some really cool owners who smile and say, 'We've got no debt'. Their ability to get out of bed in the morning is significantly better than those hauling debt uphill. Debt has its place. A big part of this recession will be to teach our economy (yet again) to define the proper role of debt in business creation and expansion.

Another set of great ideas came across my desk in a short, succinct piece from Tom Peters called 'Advice for tough times….', dated November 17, 2008.

If you've read any of these posts from the past you'll know I'm a huge fan of Tom Peters, the author of 'In Search of Excellence' and many other classics. One of my proudest accomplishments is to have this blog linked from Tom Peters' site.

Tom's 'Advice for tough times.…' included just 6 short points which I'll post below.

"1. Excellence. Get on with doing the business you have and see it through brilliantly. Keep it simple. The devil is always in the details.

2. Opportunism -- there may be a lot of room for it -- will pay off through speed off the mark and excellence in execution.

3. Visibility. March toward the sound of the guns. MBWA (manage by walking around) People have to see who they are working for (with) and who they are dealing with.

4. Transparency. Be absolutely straight with people, especially those at the front line. [My comment: Entrepreneurs - this means being straight with YOURSELF as well. You ARE the front line.]

5. Demeanor. Banish 'gloomy' from your persona, even if it kills you! But remember, 'sunny' is pretty stupid, too. Who do you think you are kidding?

6. Paradox. Have a Positive Mental Attitude AND be ready for the worst."

As a small business person and entrepreneur who has fought through these miserable spells in the past, I can honestly and enthusiastically agree with all of these points.

To run a small business through a recession requires that you act and execute professionally. Entrepreneurship is a profession and you need to treat it accordingly.

Excellence in execution, done with brilliance and passion. March toward the sound of the guns. Bring real solutions to real problems. Truth and transparency with all stakeholders. Keep moving forward but keep your powder dry.

2009 will be a challenge. It will also offer opportunities.

If you have a small business or want to become an entrepreneur, I can't offer any better advice than Tom Peters is sharing.

If you are realistic and honest with yourself and others, you can start your own business in this miserable economy. Not only 'you can' but 'you should'. Recessions typically last 1-2 years. The times between them vary but every 3-7 years is realistic. The right kind of sustainable enterprise can give you more security now (if only in peace of mind) and in the future when this kind of mess boils up again.

Happy New Year, friend! Go get it!

Tom Peters site.

Thursday, December 25, 2008

Intelligent optimists

Ode Magazine is one that can always surprise me. It bills itself as the magazine for intelligent optimists. Ode generally avoids the traps of the typical headlines and finds stuff that is working in the real world. Importantly, that stuff is making the world better.

Our copy of the Jan/Feb 2009 issue recently landed. The cover story is specifically devoted to the top '25 intelligent optimists who are creating a better tomorrow today'.

There are folks nominated by some of the world's great visionaries as being among the 'best and brightest' in important emerging fields worldwide.

This issue has so many worthy entries I can't even begin to summarize. However, one of the nominees that especially caught my eye was Rinaldo Brutoco, Founder of the World Business Academy. I have just learned of this gentleman and this organization. First impressions are great. I've ordered some of their materials to learn more. In short, what I know is that Mr. Brutoco is a solid business guy and a long time board member of The Men's Warehouse, which has created a sustainable, viable, multi-bullion dollar business model following high ethical standards.

So as a Christmas present, I'll post some of what Ode said about Mr. Brutoco and the World Business Academy: "The Academy encourages managers to see beyond short-term profits and look for sustainability in all areas of their businesses, from relationships with employees, to interactions with suppliers. Brutoco says this approach isn't just ethically sound, it's good for business. 'Current events show that we desperately need businesses to take responsibility for the whole of society,' he says. 'In the past business was encouraged to see itself as swashbuckling or raiding rather than contributing to and building an economically just society. When greed dominates, you get exactly the kind of crisis we now have.'"

Ode continues… "Still Brutoco sees business as the solution to the problems it helped create. 'The competencies of business, properly motivated and directed, can solve every problem in the world better than any other institution,' he says. The key is for business people to add values, not just value. 'What would it look like if you brought your compassion as well as your intellect to work? What would you do if you cared about how everyone in society fares?'"

Good stuff. I think this approach not only works with large businesses, it is a MUST for smaller enterprises of all types. The kind of economics that are emerging from this mess we are in will require that new and emerging enterprises provide value and values. This doesn't mean you have to cure cancer. It does mean you have to love what you are doing and put that sincerity into your offering. And you have to love and honor the process of doing enterprise.

And what does that get you? In this new emerging economy, a business model that can demonstrate its values in its products and services earns customers. Those enterprises that can live out their sustainable models with all stakeholders, in turn become increasingly sustainable themselves. That's what's required to be considered a professional going forward. Anything less marks you as just another vendor passing by unheeded and unneeded.

Remember, you have to be a professional at every level, even (especially!) if you are a one or two person enterprise just starting up.

I've seen sustainable enterprises work over and over at the small business level. This practice is now thankfully taking over big organizations. Put this into practice as you grow your own enterprise, and you'll find it works for you too.

My best to everyone! Merry Christmas 2008!

Ode Magazine

The World Business Academy

Friday, December 12, 2008

Oh what a place to grow your business!

You can't know how great it feels to say this:

Everything written in these blog posts solely reflects my own personal opinion. Nothing in these posts reflects the opinions of my past, current or future employers.

I have been looking for just the right way to use the ideas I discuss in these posts to make as valuable and widespread a contribution to entrepreneurs as I could manage.

I will forever be grateful to Waukesha County Technical College (WCTC) and their wonderful Small Business Center, led by Russ Roberts. Russ and the WCTC Small Business Center gave me the encouragement and platform to deploy my own set of courses in micro enterprise. We taught those online. The interactions with entrepreneurs in those courses was very positive and the feedback was really fun.

I've recently accepted the position as Executive Director of the newly created Iowa County Area Economic Development Corporation. I'm humbled and honored to have the chance to work with these great folks.

Iowa County is immediately West of Dane County (Madison area), Wisconsin. Iowa County is at the heart of what we call the driftless region of Wisconsin. The glaciers never reached this region leaving the spectacular beauty and outdoor excitement of these amazing landscapes to become sculpted by the environment for millennia. Throw in three spectacular state parks in our county alone. Throw in our own excellent portion and access to the Lower Wisconsin Scenic Riverway, about 95 miles of undammed, wild and scenic river, surrounded by 80,000 acres of protected, public land. Throw in the largest tall grass prairie East of the Mississippi

Wait a minute, I'm supposed to be talking about work. Yet I am.

The good people of Iowa County, Wisconsin have protected their resources and grown vibrant, livable communities within that context. It's a compelling vision and a wonderful place to grow your own business.

The area is situated exactly in the middle of a region of more than 25 million people. It has great shipping logistics (think Lands' End headquarters). It has an amazing ag sector and a growing, exciting arts and creative community that makes groundbreaking global contributions. Our manufacturers include one of the most innovative furniture designers in the world, Ulrich Sielaff, of The Sielaff Corporation, and Cummins Engine, a global manufacturing innovator, especially in our plant's contribution to environmental stewardship. Our world class health care systems have kept Iowa County rated among the healthiest and happiest people in Wisconsin. Do you like history? Ours is the oldest working courthouse in Wisconsin and a photographer's dream (as is the entire county). Like architecture and design? Iowa County is the home of Taliesen, Frank Lloyd Wright's home, studio and school. Like drama? We're home to the world renowned Shakespeare focused American Player's Theater and its magnificent outdoor stage. Wonderful tourism? You have to visit The House on the Rock and it's related golf amenities. At every turn of every beautiful road, I can find something new that amazes and delights. Log cabins, glass artists, potters, storytelling, dancing and strong cultural celebrations such as those found at our Folklore Village. Add in wonderful agricultural businesses of every variety, including our (delicious!) sustainable regional foods group. All of this beauty and dynamism is built around vibrant, liveable communities that create and support all this.

Can you see why I'm so enthusiastic? I get to help.

We'll be creating platforms for all our great communities and all our county enterprises to introduce themselves to you. We'll be rolling out a new Entrepreneurs and Inventors Club quickly. I love the empowerment these groups bring to emerging entrepreneurs. Through these clubs, we'll be launching as many smart, new, sustainable businesses as we can. We'll be sending out RFEs (Requests For Entrepreneurs) who would like to grow their business in beautiful Iowa County Wisconsin. Come join Iowa County. We're open for business!

The Nobel Prize winning economist Amartya Sen wrote a great book on economic development called Development As Freedom. I see my role in economic development in that light. Building stronger enterprise skills among individuals and greater economic strength for existing businesses delivers more freedom for people, communities and their governments. This has never been more true than in the turbulence we've lived through this year.

I'm humbled and honored by the opportunity to make a contribution to this great region. I truly believe this is the renaissance age of entrepreneurship and that it's just beginning.

Come on out and visit our exciting county and our diverse region. We're looking forward to introducing you to each other. Oh what a place to grow yourself and grow your business!

Welcome to Iowa County, Wisconsin.

Friday, November 21, 2008

There was an interesting piece on the NPR Radio program Marketplace on Tuesday 11/18/08.

The piece was titled "Starting a Business in a Bad Economy."

In a short space, it identified a number of things that, from my perspective, are critical for small-scale entrepreneurs and startups to understand. It also highlighted some of the most fundamental misunderstandings about entrepreneurship that are in common currency.

What I would like this post to highlight is that small-scale sustainable enterprises are absolutely possible in this economy if you are willing to put in the time and effort. However, the amount of time required for these kind of startups is typically more than you estimate.

If your financial life is such that you need immediate pay-the-rent type cash flows, starting your own business to dig out of this is a very poor option, with low odds of success.

Let's start with current news. There is no doubt this economy is a massive mess. Each time there's been a ray of hope, it's been snuffed out by something unexpected from left field. Then we restart and the process gets repeated. This has been an awful year for the economy and the near future looks very rough.

That doesn't mean you get under your desk however. It means you smarten up and start building some solutions for yourself.

I've run small businesses through the last bunch of recessions, including the whoppers. If you are overextended and have built your enterprise on a platform of unsupportable risk, then you've got real trouble. For the rest of us, the sun will continue coming up. Birds sing after storms.

The Marketplace radio piece was done by Mitchell Hartmann of Oregon Public Radio. Mr Hartmann is a very good reporter and focuses on sustainability issues for Marketplace.

This piece summarized a few of at the many difficulties and opportunities that startups face in this kind of economic environment.

Mr. Hartmann spoke with an advisor at the Small Business Development Center in Portland about people rushing into entrepreneurship out of immediate financial need.

The advisor, Jackie Babacky Peterson, sounded a bit shell shocked, referring to the newly unemployed launching new businesses on their credit cards. That indeed is a very bad path.

Here's a transcript from that section:

"Advisor Jackie Babicky-Peterson is seeing unemployment and entrepreneurship meet but not necessarily in a good way."

"Many people get laid off from companies so they are deciding this is a good time to launch a business even though it may be very difficult."

"Many people will rush into biz for themselves without sufficient planning and with little or no savings they'll use personal credit cards to get going. 'Just pure startup money is now - and always has been - pretty impossible.'"

"Credit cards will kill you."

She concludes: "I think we will have more failures."

I'd like to parse this for what slow, measured, startup types can take from this.

Ms Babacky-Perterson is spot on identifying the process of 'rushing into business' as a way of pre-scheduling the likely death of your enterprise and damage to your personal financial welfare.

One line in that quote is critical. It was about the difficulty in attracting outside money to small startups. Outside investment money for brand new startups has never been available. Not in this bad economy and not in the past when things were better. Appropriate small-scale startup money only comes from your pocket. Alternately, outside investment can come, with an increasing chance for trouble, from friends and family.

And yes, using credit cards to finance your rushed effort will likely kill your startup.

And yes, with more startups there will be more failures. However, the most vibrant regional economies in the US have high startup rates AND high failure rates. What's working here is that cultures of entrepreneurship and participatory commerce are celebrated. If something doesn't work, you try something else. There can't be successes if there aren't failures. The key is how we deal with those failures and learn from them, and how we support the culture of entrepreneurship that engenders all this activity.

And yes, if you drive a boatload of other people's money off a cliff (see current events), you've created dysfunction and hurt the system for those that follow. If you lose a small amount of your own capital (and probably a large amount of time), then you're smarter and ready for the next effort.

In the past, I have quoted Vivek Wadhwa whose common sense seems to show at key points in these national discussions of entrepreneurship. (Jan. 5, 2008)

Vivek Wadhwa founded two tech startups and now researches entrepreneurship at Duke and Harvard.

While Mr. Wadhwa's comments speak specifically to large firms, his ideas deliver critically important meaning to the discussion of small startups.

Mr. Wadhwa says the Fortune 500 is full of companies that were founded during bad times: Johnson & Johnson, Disney, Cisco, and Intel to name a few.

The Marketplace reporter Mitchell Hartmann then referred to a big entrepreneurship organization as saying startups will not increase due to these terrible market conditions.

Vivak Wadhwa says that's the wrong conclusion to draw from the current economic conditions.

Here is where I want to shine a bright light on the good words of Mr. Wadhwa.

"We'll be back on track in 2 - 3 years. By that time you will have gotten your business model working, you've got your products perfected, you know your customers, you know your market space, and now you can go to the angel investors, the venture capitalists and pitch a real company to them."

Mitchell Hartmann closed his piece this way:

"So, if you don't have funding from your own nest egg, or from friends and family, you can pretty much forget about going from 0 to startup during this downturn."

With no diss at all to Mr. Hartmann, I humbly submit a concluding summary that would promote some glass-is-half-full action steps.

Mine would run something like this….

If you can invest a small amount of money and a large amount of your time, you can create your own sustainable enterprise in these difficult economic times. With hard work that enterprise can become a commercial platform allowing you to go forward in life with more personal options and more financial security.

Thanks to Mitchell Hartmann for the great piece and thanks, as always, to Marketplace.

Now get out there ASAP and start something. Slowly.

Marketplace broadcast of this story

Sunday, November 09, 2008

A passion for problems

A good friend and mentor directed me to a wonderful book called Ripples From The Zambezi, by Ernesto Sirolli.

Mr Sirolli has been doing economic development work around the world and in the U.S. for more than 30 years. He is a 'bottom up' developer - nurturing small startups and then helping those entrepreneurs grow to the next level.

There are many great things to say about the book and the work. I want to focus on one aspect that I've always believed and taught to startup students and clients.

People often ask me what kind of business they should start. Often they're well along into researching business 'opportunities' being marketed to them.

I tell them that's the wrong question. The primary question is "What do you love?" Give me that answer, and I'll tell you what kind of business to start.

If you want to create your own small scale startup, focus on what you love. Build your enterprise around what you do beautifully or make with passion. The service or product will sell your enterprise in a way you couldn't duplicate with any other method, given small scale startup budgets.

Mr. Sirolli directs those that would help entrepreneurs first find the individuals who are passionate about their work and their ideas. Then he advocates getting the appropriate tools and structures in place to support that kind of enterprise.

He says this: "Success , we can therefore say, is to do beautifully whatever it is that you love doing…. And successful people come from every social stratum, race and sex. Some have been physically and psychologically abused; some couldn't see; some couldn't move and typed their books , letter by letter, with a stick held in their mouths. To be a genius in your own mind, however is meaningless; you have to dance it, build it, grow it, communicate it. Share it with the world."

The world gets made better by people solving problems. If you look around and can't see enough problems, I can't help.

Find a problem. Tell me why you know it passionately. Tell me what you love about your solutions, and I'll tell you what kind of startup you should organize. Your business will survive and grow only by continuing to solve problems with all the passion and skill that you can bring to your enterprise.

On top of that you get to live and work with what you love. It's a pretty great two-fer.

In closing, these kinds of small scale startups have never been more needed by the wider economy. The opportunities for small scale startups have never been greater. We are entering the renaissance age of entrepreneurship.

However, you need to remember that it will take longer than you think. The kinds of startups I'm writing about here are the most sustainable and most likely to succeed . But they take a while. I've called it the slow startup movement for a good reason. It's true.

What do you really love? Ready, Fire, Aim. Repeat. Good luck my friend.

Enersto Sirolli and the Sirolli Institute

Thanks to Sue at the Vernon County Economic Development office for the introduction to this good work.

Saturday, October 25, 2008

The Slow Startup Movement. An introduction...

The Slow Startup Movement

A Field Guide to Organizing and Launching Your Own Small Enterprise on Your Terms, With Little Risk and Less Money.

An introduction….

Let's start with the economic crisis. My ideas are meant to offer a little self-defense and hope to those of us who would like to get more control over our financial lives, more security in our commercial lives, and more enjoyment in our personal lives.

There are any number of approaches that can work to help you launch your own enterprise. I want to talk about one of those paths that I think fits these times and people's aspirations perfectly. I've also seen them work over a lifetime of entrepreneurship.

This awful economic environment is changing the entrepreneurial landscape rapidly. I would suggest that what has happened to economies across the world will make it increasingly viable and even necessary to create your own small enterprise.

Running to the bank for a loan or raising money from outside investors will certainly continue for a few, but for the vast majority of startups, those tools are just not available.

Rather than give up on the thought, I suggest we get busy. Slowly. It helps me to think of it as the slow startup movement.

The TV and movies push images of entrepreneurs as manic speedy-commerce freaks. This has its roots, but those kind of enterprises often cause as many problems as they solve.

There was a good book out a few years ago called 'The Millionaire Next Door' by Thomas J. Stanley and William D. Danko. What was so eye-catching about their study is that people with significant (actual) personal resources and security were not those best skilled at surfing bubbles, but were average people, that started small and carefully grew their businesses slowly over time. They lived below their means. They accumulated real security over time.

A garden is an obvious metaphor. A garden we plant ourselves. A garden we learn to grow. A garden of things we love. A garden whose journey is every bit as valuable as its outcome. A garden that can positively change our self-worth and increase security for our families. A garden that makes our communities stronger.

What in the heck could planting a tiny economic plot of your own do to change things?

The idea of Victory Gardens come to mind.

Think of starting your own enterprise as starting your own small garden. You start carefully. You plan. You nurture the garden, and you grow stronger, wiser and more valuable personally during the process. The work in the garden and the fruits of the garden make you and your community more sustainable and secure.

Here's what Michael Pollin just wrote in a great piece in the Oct. 9 New York Times Magazine, entitled 'Farmer In Chief'. It's an open letter to the next President about our food policies seen as a national security issue, among many other valuable perspectives.

"When Eleanor Roosevelt did something similar in 1943, she helped start a Victory Garden movement that ended up making a substantial contribution to feeding the nation in wartime. (Less well known is the fact that Roosevelt planted this garden over the objections of the U.S.D.A., which feared home gardening would hurt the American food industry.) By the end of the war, more than 20 million home gardens were supplying 40 percent of the produce consumed in America." (My note - these are results achieved in 2 years as a result of contributions made by millions of tiny contributors.)

So what does this have to do with a slow startup movement?

I've borrowed the gist of the term from the slow foods movement. Do you know it? The premise is take control of your food life. Use local foods and high quality resources. Strive for creating value and improving your life. Strive for an enjoyment of the process for savoring the results. Strive to share those results with friends and your communities in ways that make all involved stronger and more viable.

Gardening and cooking are iterative steps. Things don't always go the way you want. It takes time to get started. To do it right, it takes flexibility and creativity and most of all patience.

This is also the recipe for starting small, sustainable enterprises.

You use simple, high quality ingredients. You add your creativity and skill, and most of all patience, and you slowly create nourishing results.

This is not to say that many of these slow startups will not become sprinters, or gazelles as they are referred to in economic development circles. For those with appropriate offerings in the right markets, this is something to encourage. But a recent US Small Business Administration analysis of the gazelles notes that these firms don't get to the place they can sprint until they have in the market for a number of years, and have made their mistakes, and have polished their model, and organized appropriately for the time in their life cycle that they can take off like gazelles.

You don't start as a gazelle. You start as a gardener, nurturing what's good, weeding out what works against success.

That's the essence of the slow startup movement idea. Put yourself in the game. Find something you love and nurture it. Find the help and the resources to grow your seedlings. Take your time. Observe. Test. Fail. Rejigger. Repeat.

You can do it my friend. Like the Victory Gardens of World War II, we need to do it given the state of things.

The slow startup movement is a kind of commerce that you can follow to increase your own security, engage your creativity, and build the communities you live in.

Dig in, my friend. You can do it. Now is the time to start.

New York Times 'Open Letter to the Next Farmer In Chief'.

Overview of the book, The Millionaire Next Door, at WIkipedia

Saturday, October 18, 2008

Next Generation Business Development

The Economic Development Director of Racine County, WI is Gordon Kacala. Gordon and I have not met, but I'm an admirer of his work and his writing.

I buy the Racine Journal Times whenever I'm in Racine, which is fairly often. I love newspapers, but my specific reason is to read Gordon Kacala's column in the Journal Times called 'Developing Racine'.

In a recent column I really liked, Gordon wrote about one of my favorite economic development subjects, manufacturing. Specifically his column talked about ways to define 'next generation' manufacturing.

The definitions Gordon pointed at have been proposed by our own Wisconsin Manufacturing Extension Partnership. I think these are a great first effort. I also think they are generally applicable to all kinds of economic development issues.

This evolving definition for 'next generation' enterprise has five main characteristics called out. I'm going to take each point and apply it to business development generally.

- Your enterprise embraces systemic, continuous improvement

ME: For startups and small businesses, this does not have to
mean biotech patents. It can mean sending invoices faster or storing phone numbers in the right place, or checking credit better. You do not need to be a rocket scientist to continuously improve your operations and the solutions you offer. However, you do need to do both all the time.

- Your enterprise is globally engaged

ME: There is micro-economic and a macro-economic comment to be made, given current circumstances.

The big global stuff is fun, and it's never been more available to small businesses. In both of my last enterprises, we had customers on 5 continents. I sold recycling equipment in Africa, Europe, Asia, and the Americas from my virtual office in Madison, Wisconsin. However going global is not the first step that most startups must learn to take. We took those global steps only after we learned to walk regionally and nationally.

I am not going to dismiss purely local commerce, but it can be very limiting and potentially lethal for most small enterprises.

For most enterprise their first markets need to be regional. It spreads the risk, it increases the universe of customers and it offers the potential for implementing your solutions at lower costs.

After that, when appropriate, you should then learn to market yourself nationally. Setting up a small enterprise that rejects the potential for selling across the United States is naive and wrong headed. When appropriate, marketing small businesses throughout the US has never been easier or less expensive.

After that, go global with my blessings. It can be rewarding and very profitable if you're ready.

- Your enterprise has active strategies to attract, develop and retain the talent necessary to win in a next-generation world.

ME: For the smallest businesses this means training yourself to learn the skills and tools needed to cowboy up commercially in the 21st century. This is not only the digital stuff, but the people skills needed to equitably do commerce going forward. Attracting and developing talent for small business can mean employees, but also increasingly means growing and retaining talented strategic market partners.

For existing small businesses, I would also suggest that the big picture needs adjusting. I mean that we all need to advocate for a system that takes health care out of the list of risks we face when starting and running enterprises. Without that, we can not compete for, or retain talent. The talent we need won't be available because those talented people can't risk their insurance status. The people who small businesses most need, (and I think the same people who most need small business), have to balance their family's risks with every decision as you do. We need to fix health care to fix economic development. Period.

- Your enterprise incorporates green ideas in its growth and operating strategies as a means to reduce waste and take advantage of the growing demand for sustainable products.

ME: I have seen the most egregious BS attached to the green movement, and I have also marketed hard right into it with great success. The test of sustainable green commerce is not a complicated one; it needs to fix real problems and it needs to make money.

There has been a sea change recently that will drive this movement forward. Green has become a national security issue.

As a sustainable path into the future, I have never seen so
much market wind at the back of green commerce

Need a definition of green commerce? I recently saw a great quote by Nobel Prize-wining physist Murray Gell-Mann defining sustainable as, "living off nature's income rather than it's principal".

Your community and the entire world want more sustainable products and services. There has never been more potential for ground-up, sustainable entrepreneurship in my lifetime.

- Your enterprise is skilled in strategic partner and supplier relationship management as a means to increase production flexibility, use partner competencies, and tap new markets.

For small businesses, this translates as setting up equitable, transparent, mutually beneficial food chains with your commercial partners and customers. This is the most profitable model in the long run, and also the easiest to operate. Simple is good.

What we've seen in the economic meltdown this summer is that complicated, opaque commercial systems are almost impossible to manage and master, and in most case lead to disaster.

Next Generation business development will require the positions suggested above: continuous innovation, a regional and national market focus, your approach to all people is one of equality, your approach to commerce sustainably fixes problems, and you develop the ability to work cooperatively and equitably with all your commercial stakeholders.

Sustainable = repeatable. This 'Next Generation' model highlights that approach. Anyone can do this. I believe everyone should start and grow their own enterprises along these principles.

There has never been a more important time to to do so for yourself and for our economy going forward.

Thanks to Gordon Kacala for his good work and good writing on behalf of Racine County. Visit the Racine County Economic Development site

Visit the Wisconsin Manufacturing Extension Partnership site discussing Next Generation Manufacturing

Tuesday, September 30, 2008

Successful economic gardening in bad economic times.

One of our major utilities recently brought in an unusual economic development specialist from Colorado named Chris Gibbons to give presentations in our area.

I wasn't able to attend, but I've been reading about Chris' work since he was here. His approach is one of 'Economic Gardening'. This approach emphasizes the creation of support programs that focus on growing local entrepreneurs in smart, low-cost ways. They do this by creating attractive, entrepreneurial communities. In essence, grow your own economic development from the inside out.

Here is how Chris summarizes it on the Littleton, CO, website where he is Director of their economic development activities: "We are more convinced than ever that our fundamental concept (entrepreneurs drive economies) is right and that healthy communities have a healthy base of entrepreneurs."

As a long time entrepreneur who has worked with business assistance programs of all kinds, I'm in a good place to highly recommend Chris Gibbons' work. As someone who has developed and taught my own curriculum for successfully launching micro-enterprises, I strongly agree with his conclusions.

This is a time of terrible economic news. The macro-economics of the world economy are under historic strains. There seems to be more difficulty with every new headline.

Yet we will come through this. Hurt and battered in many cases, but the cycle will continue on its way until we let another bubble get big enough to burst again.

What has changed permanently, I believe, is the sense of trust many of us felt leaving our economic security entirely in the hands of others.

The Economic Gardening approach to business development is to stop chasing any old big-is-better outside solution. The idea is to quit throwing money at businesses development, but rather, create communities in which creative new enterprises of all kinds can thrive. Help entire communities become more entrepreneurial. Help startups of ALL kinds. When some of those startups turn into 'gazelles', or faster growing organizations, help them plug into the next steps.

Chris calls this kind of sustainable development 'the edge of chaos': "This term describes the area between stability and chaos, where innovation and survival are most likely to take place. As a way to think about these regimes, consider what form H2O takes in each. In the frozen regime, it would be ice. In the stable regime, it would be water. In the chaotic regime, it would be steam."

Yes, yes, yes. Through the years I have seen peers vaporize wonderful companies because they could not control the chaos. I have seen other friends stay frozen in place because they did not have the constitution or the support to innovate.

What I teach in my micro enterprise courses is that you should launch your own startup as soon as possible. The idea is to invest in yourself to help gain some measure of financial control over your own life. This is especially true in times of economic trouble like we have with us now.

I teach my startup entrepreneurs and small businesses that running your own enterprise will be a giant lesson in making mistakes. If you haven't thrown a ton of money at your business, you can - and should - make as many mistakes as quickly as possible. They will be invaluable and inexpensive with this approach.

Here is what Chris Gibbons says on the subject:

"We came to equate the edge of chaos (success) with lots of changes and experimentation and lots of little mistakes. It seemed like the mistakes that accompanied the process of innovation were like earthquakes: if you don't have lots of little ones, you end up with a big one. We read a study out of Dallas that indicated the most vibrant economies (in terms of producing jobs and wealth) were highly unstable in the sense that they had the highest rate of business start ups and business deaths. This turbulence also looked like an economy operating at the edge of chaos."

The current state of Economic Gardening relies on 3 major approaches to creating successful economic development from the inside out. They are information, infrastructure, and connections. Notice they don't include throwing money at the issue. Those days are over.

Information refers to the capture and sharing of as much valuable data with entrepreneurs as is possible. Chris in Littleton, CO says he spends about three-quarters of his agencies time providing tactical and strategic information. Amazing.

Infrastructure refers to building sustainable, supportive communities that attract and retain entrepreneurs. It also refers to building intellectual infrastructure; that is, making world class ideas and resources available to local firms and the local community through local courses and training.

The emphasis on connections means that economic development and innovation are driven by the ability to connect with people and talent outside of your immediate area of knowledge. In my own region, this means the ability to plug into the University, the Technical College system, great regional and national economic development organizations, and my own favorite, our wonderful Inventor and Entrepreneur Clubs.

The economic headlines are awful lately. This is not a time to get into the fetal position and hide. It is a time to begin building more economic security into your own life and into the life of our regional communities.

Starting and growing your own sustainable business is a step you should take. In spite of the headlines, there has never been a better time to do it.

Chris Gibbons' story about economic gardening

Saturday, August 23, 2008

Community Development Venture Capital: A Strategy for Rural America

Anyone reading these pages over time will know that I am an advocate of creating jobs by starting new enterprises. This strategy makes our personal lives more enriching and engaged, and it also makes our communities more secure and sustainable.

I think this is especially true for rural areas.

I just found a piece released by the Federal Reserve Bank of San Francisco. It was written by Kerwin Tesdale, who teaches at New York University in the business and law departments and is President of the Community Development Venture Capital Alliance.

Community Development Venture Capital (CDVC) is a great idea. It utilizes existing private money networks to create investment capital for reasons that not only include market rate returns, but also to enhance community development goals. Some people call this double bottom line accounting. You measure the metrics by which you make the place better then you execute on those measurements as hard as you execute the numbers. Both will be required to go forward commercially in this century.

Mr. Tesdale's strategy for enhancing development in rural America is to utilize the emerging private money networks rather than rely strictly on direct investments by angel investors and government agencies.

These networks have the ability to get involved in a productive way that government and typical funding sources can't. The idea of investment capital arriving with technical and management help, delivered by people with only an agenda of your success is compelling. I would like to see it grow in my state and beyond.

Here is a nice summary of how they work…"CDVC funds focus on markets where other venture capitalists typically do not compete. Rather than participating in bidding wars for pieces of Silicon Valley high-tech firms, rural CDVC funds nurture long-term relationships with entrepreneurs in their regions. When an excellent investment opportunity arises, they have the relationship to capture the investment on attractive terms."

What I really like about all this is that there is a bunch of win-win checks and balances built into the process.

For instance, investing in CDVC funds, local banks can satisfy their obligations under the Community Reinvestment Act (CRA), but more importantly they can seed the field with a real contribution toward growing new customers within their markets.

We aren't chasing smokestacks here. That game is over. A better approach is to grow our communities by growing our own enterprises and creating our own new jobs.

As it says in Mr. Tesdell's article, "The term 'community development' evokes inner-city urban communities, where community development corporations develop low income housing and address other social needs. But the pioneers in community development venture capital are rural funds, and still many of the most experienced and accomplished CDVC funds focus on rural markets. Business development and job creation are at the heart of the rural agenda to promote economic well being."

This is an area many of us working on startups and small business development, especially in rural areas, can use to great benefit.

Many of us live well outside "the one plane rule" used by traditional venture capitalists to measure how far they would go to look at an investment.

You don't want those folks anyway. Not yet anyway. Their money is too big and the requirements placed on them by their investors will likely not match your agenda.

The deal flow through the CDVC Alliance shows a representative group of investments in the $150,000 to $250,000 range. That's a sweet spot that can be very hard to fill, especially in rural areas.

You know I'm an optimist by trade. I spent an hour on the phone with a gentleman from Milwaukee last week who was a farm kid that started his own small business in 1959. Life took many unexpected turns for him, but his enterprise gave him the platform to secure his own future and make many jobs for others. For almost 50 years now. His underlying message to me was that challenges always appear but solutions generally arrive for those willing to look for them.

I think these CDVC organizations can be a tool that grows solutions for rural and urban communities.

The world is begging for local and regional commerce. The cost of shipping alone is forcing the issue.

Wise funding sources will recognize that Community Development Venture Capital funds may be among the best tools for creating economic development in rural areas.

Let's put these CDVC tools to the test. Let's find ways as small businesses and entrepreneurs to provide them with market + returns. Your job is to show them how their funds can make money on your great ideas and your unmatched work ethic.

Of course this is hard work. But you need to know the metrics for developing your business anyway and working within private investment rules is a great way to make sure you have the data you need for them and for yourself.

Then, world, get out of the way.

Download the CDVC Strategy for Rural America article by Kerwin Tesdell. PDF

The Wisconsin Rural Enterprise Fund works statewide but primarily serves the Northwest counties in WI. Typical investments are fro $25,000 to $300,000. A nice model for the rest of the state.

The Community Development Venture Capital Alliance

Community Reinvestment Act (CRA), WIkipedia

Friday, June 27, 2008

Inventors panel discussion July 7

I was honored to be asked to lead a panel discussion about innovation and invention at the next meeting of the Green County WI Entrepreneurs and Inventors Club.

This is an especially vibrant E&I Club. The panelists work from a wide variety of interesting and creative parts of the economy.

The meeting is Monday July 7, 2008 from 6:30 to 8:30 PM. The location is the Monroe Clinic in their New Glarus Room. 515 22nd Av. Monroe, WI

Come early and have a Limburger sandwich at Baumgartners on the Monroe square. Monroe is one of my favorite WI cities and you just can't beat the environment and the economic potential of this great location.

If you have an interest in learning more, please send me an eMail

Wednesday, June 11, 2008

Nice recognition for this blog

I just received a nice note from the folks at HR World. Their web site is a resource for business people of all kinds, with a focus on HR work.

They have just chosen this Sustainable Work blog for a special honor. They have included us in a new article titled, "Top 100 Management and Leadership Blogs That All Managers Should Bookmark."

Here's what they included in their write up, "Novices can get tips for innovation, startups and emerging enterprises, while established leaders can get know-how on developing sustainable new products and services."

They included some of my favorites, such as Tom Peters, Chris Anderson (The Long Tail), and Seth Godin among many other notables.

Very nice. Thanks HR World!

Link to the HR World article

Saturday, June 07, 2008

Green return on investment is here

Here is a quick follow up to the previous post. I just came across a new article by Ray Unger, who writes an excellent financial column for my local paper. Ray is the Chairman of Forward Investment Advisors of Madison. I like his writing a lot. Ray has provided a long record of open, transparent service to his community through his writing over decades. Great in-the-trenches stuff from a no BS guy.

Ray talks about how the legislation behind the Clean Air Act of 1990 entered the world and changed environmental history. The Clean Air Act used a "cap and trade" system to allocate the burden of cleaning up the air.

You may or may not have strong feelings about cap and trade systems, but as Ray points out, the Economist Magazine in 2002 crowned this system, "probably the greatest green success story of the past decade."

The article continues, "Today, much the same thing is happening in the area of global warming and carbon dioxide emissions. And like after OSHA, winners and losers will emerge."

The rules that will emerge will likely be based on a cap and trade model. The difference between political parties will be on the timetable.

Either way, it's coming, and the numbers are big. One estimate is $3.32 trillion dollars in costs to non-sustainable practitioners between now and 2050.

Green ROI is here. Our society is about to create a measurable, marketable return on investment for enterprises greening their operations. Green is getting monetized. Big time. Those that can demonstrate continuous improvements in sustainability and stay below the cap get increasingly valuable credits to sell. And there will be a large market for buyers of these credits going forward as large commodity based commercial systems plod through their conversions. You get to sell them increasingly valuable credits for a long while. For getting greener. Green ROI.

A current cap and trade bill has been introduced in the Senate by people considered to be pro-business. The Lieberman-Warner Climate Security Act probably won't be the final version that passes, given the national elections, but I think it defines the debate going forward. The lobbyists will help all involved sort out the timetables.

As Ray Unger closes his piece, "… it's never too early to work out such details. One thing's for certain: It will raise the cost of virtually all goods and services that depend on energy. And that's just about everything."

Creating ever-tighter sustainability practices has become a security issue and a survival issue for our economy. It's also about to become a lot more profitable.

Will this act as a tax on enterprises that are bad environmental actors? Yes. Will they try to pass along the tax to consumers? Of course. Are we bound to do business with them? Only at your own risk. Greener substitutes will arise, and we'll leave the bad actors to drift off.

And oh, by the way, getting greener will make your own products and services more profitable.

Not to mention the marketing avalanche anyone can create by documenting their sustainability gains.

When you can fix up the place and measure the payback, life is good.

Ray Unger's article, Confessions of a Money Manager: Carbon dioxide cap will change investment playing field

I love still saying "my paper", but reading it online. My afternoon paper for decades moved to the web and is doing a great job. I read it several times a day... The Cap Times online

Friday, June 06, 2008

Green Management Storming Every Gate

Today we had the biggest one day jump in oil prices in history. A couple of big economists at major banks predicted $150 or $200 per barrel oil this year.

Is this the end of the world? Of course not. Some Europeans are coming here to take driving vacations because energy is so cheap.

Is it the end of the road for inefficient, wasteful, energy intensive commerce? Yes, thankfully.

In my last startup I skimmed & recycled industrial fluids. I saw millions of gallons of oil going to waste. The industries I worked in called that oil a contaminant or pollution. They were paying to have oil hauled away. Oil. Honestly. I'm talking this century.

Long ago Buckminster Fuller said pollution is resources in the wrong places. If he knew how dysfunctional the transition would be, I'm sure he would have been shocked.

I used to give talks around the country, mostly in industrial settings. I loved speaking at the yearly industry conventions and professional education seminars for our industries.

I had to travel on the night of Sept. 11, 2001. I was giving a talk in Cleveland the next day for some of the heaviest hitters in my business. It was an awful drive. My society was seizing up. There were people waving flags on almost every bridge across 4 states. There were reports of Indiana Troopers seizing gas stations in Gary, IN for hoarding fuel as I drove past wondering where I could find the next open gas station. Weird, scary times.

During the seminar the next day, we were all politically numb but a new economic reality was in the air. The focus of every discussion was the need to protect our exposures - as a nation, as states, as industries, and as individuals.

Every single day since 9/11 more and more people have equated the idea of increasing efficiencies and cutting energy use as a way of decreasing exposures of all kinds.

Today - especially today - you can't escape the tidal wave of public support/demand behind getting all areas of our culture greener and more sustainable.

My point for this post is as follows: Think of energy use as a 'sin tax'. Something that costs you dearly for your guilty little pleasures. You'll pay more because you just gotta have it…..

Sure the revenues may not be going directly to the government as true taxes, but the money is flying out of your world as lost, not as a productive investment. You've got exposure. You're going to pay. Fix the exposure and you become safer, more productive, and more sustainable.

The idea of 'we just gotta keep to our old ways' is NOT inevitable. Good design can reduce the 'gotta'. Thoughtful, sustainable practices reduce the 'gotta'. Day by day, you reduce the 'gotta'. Day by day you get stronger, more efficient, and less exposed as an organization.

If you are an entrepreneur, or if you are an entrepreneurial company, this is a time of great opportunity to help.

I know the industrial world the best. The way we manufacture things, the way manufacturing energy is expended, the way manufacturing fluids are spent, the way manufacturing affects air quality and the overall effects of manufacturing on carbon emission issue are all significant, immediate opportunities.

Remediating these issues will only get more expensive over time, especially as inflation returns to the economy. Energy costs may dip now and then, but the upward trend is inexorable so long as we're exposed to energy insecurities.

The way to get the biggest bang for the buck is to remediate these exposures and build out new sustainable systems as fast as possible. Do the math. There's no other solution to that problem. Do it fast. Save the most. Decrease exposures and increase security immediately. Payback is forever. Duh.

There is a lot of low hanging sustainability fruit in many parts of our industrial and commercial worlds.

If you are an entrepreneur or work in an entrepreneurial enterprise, this economy is not the end of the world. You are living through a world-wide economic system change.

Thankfully there is a vast, public demand for measurable improvements in sustainable practices at every level of commerce. Thankfully you can be here to help.

We had a gentleman in town this week doing a seminar at the University for regional marketing execs. While not exactly talking about my world of commerce, his thoughts about branding any enterprise in this economy is an apt way to close.

The following quote is from Mr. Gary Hirschberg, one of the founders of the $300+ million revenue per year Stonyfield Yogurt and a well regarded business writer.

"The best brands are truly the most authentic ones. Brands that really set out to be solutions to environmental problems, water problems, energy problems, climate problems, are going to have an inherent competitive advantage, especially in a world where oil is heading for $200 a barrel."

Sustainable practices make money. Sustainable practices decrease exposures. Sustainable practices increase security.

Measurable, sustainable practices are also the greatest opportunity to build an authentic brand and to create a company that people want to do business with.

The world is changing. Change with it, my friends. Be diligent out there.

Saturday, May 31, 2008

Next talk - June 11

For any friends in southern WI who might like to attend one of my talks, the next one will be June 11th.

This one will be at the Connections meeting, a quarterly networking event held at Waukesha County Technical College in Pewaukee. Doors open at 6 PM. There will be an opening welcome from the Small Business Center Director Russ Roberts at 6:30 and my talk will begin at 6:45.

Here is the official description...

Invest in Yourself: How to Organize Your Small Business to Grow During Difficult Economic Times

What does it take to start and run a small business in difficult economic times? It takes an investment of time, and an investment in the skills and tools to organize yourself and your enterprise. Learn how smart entrepreneurs do more with less, while increasing financial security for themselves and their businesses.

There is open networking all evening following my talk, along with an opportunity to display some of your marketing materials. If you need additional information please send me an eMail.

The talk and Connections meeting will be in the Anderson Conference Center. I look forward to seeing you on June 11th at WCTC!

WCTC Connections meeting agenda

Register online for the Connections meeting

Map to WCTC

Wednesday, April 30, 2008

Credit and sustainability

This post won't be fun but it needs saying.

Many people are turning to self employment as corporations seize up and meta markets constrict.

In the past, many new entrepreneurs turned to their bankers to locate funding to start their enterprises. Often, the choice between acceptance or denial was the backup provided by the Small Business Administration (SBA). You may not have been able to convince your bankers of the worthiness of your idea, but if you could get that loan backed by the SBA, the loan went through.

There are a number of ways we could connect with the SBA, but over the years, it's influence has become greatly intertwined with the banking system and importantly, state Departments of Commerce. Entire programs to develop small businesses have grown up around this relationship.

In talking with friends in this world, I've learned that the SBA loan programs, in many cases, suffered from the same lax standards we are reading about in the general credit market. Often, diligence was not fully applied and as a result, the SBA default rate is up and standards are about to change.

Tomorrow, May 1, a new set of loan standards, called their standard operating procedures (SOP) will go into effect for all new SBA loans. These involve tighter standards and more oversight. In light of the wider credit crisis this is not really a surprise, but I am surprised by the lack of press this is receiving.

The new Small Business Administration SOPs are likely going to raise havoc in all existing programs you may know about at the state and local levels. Havoc in the sense that previously available programs will themselves begin constricting and possibly disappearing as regional governments fight their own fiscal battles.

Is this the end of small business? Of course not. Is this yet another sign that building a sustainable small business structure is your best bet to succeeding in turbulent times? Yes.

Going forward, startups and small businesses will need to control their enterprises carefully. They will need to manage for cash flow and profit, not debt repayment and outside funding.

This is indeed the renaissance age of entrepreneurship. There are problems galore that need fixing. Just don't make your new business one of the problems.

Friday, April 04, 2008

Doing increasingly more with increasingly less. Welcome to small business and difficult economies.

As an entrepreneur and small business owner there is one and only one constant that I've found, managing through in 35 years of widely changing economies.

We have to do increasingly more with increasingly less.

The chart in this piece was taken from financial analyst John Mauldin's great newsletter, which I highly recommend.

It shows all the official recessions we've had, charting from 1940 through 2010. Data is from the Federal Reserve Bank of St. Louis research.

You'll notice they haven't labeled the mess we're in as a recession yet. In one sense that sets up this piece. By the time recessions are finally labeled a recession, there is plenty of economic turmoil and badly wounded small businesses out there.

I think the reality of the graphic is that there should be a lighter gray fuzziness about 50% the width of each recession pasted on either side of the dark gray lines now showing. At a guess that might indicate about 1/3 of US economic history for my lifetime has been in difficult economic times.

I've lived through nine out of the last ten recessions. I've run small businesses through the last five; six if you count the current travails.

What I've learned is that under ALL circumstances, entrepreneurs and small businesses need to do increasingly more with increasingly less. Period.

This is not a call for beating your small business self up with more workload, more stress and less available time. It's just the opposite.

This is a message that the way you can get through this, and all the coming economic messes is to trust your gut and follow your smarts. You can do more with less. That's what our American economy does. It creates winners that produce better stuff using fewer resources.

This is a call for evaluating every small biz decision you make through the lens of physical and financial efficiency. Will this (any) decision help me to do more with what I have? Will this (any) decision help me to do more of what I do at a lower cost to me?

Proof of this is evident in the graph above. Yes, the remarkable march of predictable recessions is obvious and something to learn from.

But check out the rapidly rising curve in the background. That's gross domestic product. It's a big macroeconomic measure, and subject to all kinds of interpretation and parsing, but the fact of the matter is this GDP number shows our economy, you, me, all of us, producing increasingly more value with increasingly less input. This happens through good times and bad times and everything in between.

I have commercial self interest in this piece. I used the theme of doing increasingly more with increasingly less as the centerpiece of a seminar at my Technical College this week. The seminar was for an invited group in advance of an Entrepreneur Expo put on at the college that evening.

I used the seminar and the Expo to officially roll out the public beta of Diligence™, the small business workflow tool I've been building this past winter.

Spring is here. The days are brighter. There is yet another economic mess rolling through, and everybody needs to do more with less. Seems to me to be a great time to start another company.

I ran our last company, which was a manufacturing firm, through the deepest recession in manufacturing since the Great Depression. I didn't just run it, I grew it. When the US couldn't export anything I had customers on 6 continents. I hired a guy for a key new role in a month when there was only 1,000 new jobs added in the whole United States. I used my organizing approach to build a firm that was recognized by some of the most significant global small business awards available. I'm damn proud of all that. I loved attacking that situation with the only tool that will ever work. Then, or now. Efficiency.

Doing increasingly more with increasingly less. We did all that at my last startup with just 4 committed friends and the tools for doing more with less.

I'm really excited about making my new biz organizing tool available to others. I'll link to it below. More importantly, I'm excited for what it can do for folks looking to organize and grow their small businesses in this difficult environment.

It's a tool I've used myself to grow small enterprises through all the recent recessions and look forward to training others to use. Diligence™ is a tool that gives my small business peers the ability to do increasingly more with increasingly less. Sounds like a good idea whose time just keeps coming.

The rollout and introduction of Diligence™ my new tool for organizing small businesses.

Subscription page for John Mauldin's newsletter You can also search back archives by entering your eMail address. The newsletter the chart above was borrowed from is March 7, 2008, 'What's that hissing sound?''

Sunday, March 02, 2008

The new artisan economy

I've used QuickBooks to run the last several businesses and I'm using it for my current startup as well.

This is excellent accounting software from Intuit. We like it; our CPA likes it; it's easy to learn, bingo.

I don't normally expect big insights from big companies, but I have to say I've been reading and re-reading a new report sponsored by Intuit, produced by the Institute for the Future.

The good folks at Intuit have seen your future as an entrepreneur and, as anyone who has followed these posts know, I couldn't agree with them more.

I have been trumpeting the ascendance of the independent entrepreneur for all of my working life. I work in those trenches. Intuit has just released (Feb. 2008) a great report with a really nice description for the new world of entrepreneurship called, "The New Artisan Economy".

This is the third in a series from Intuit called, The Future of Small Business Series.

Beautiful, smart, direct stuff. This is a publicly available download so I'll attach a link to Intuit's download page for these reports.

If I copied everything I liked about their Phase 3 report into this post it would be too long. So, here are just a few nuggets…

"The next ten years will see a re-emergence of artisans as an economic force."

Yes, many of us have been in this movement for a long while, but there is a palpable tipping point being reached right now. This idea is going mainstream at the speed of light. It's in the air and the water, and it's emerging into the world economies like a welcome spring day.

"The coming decade will see continuing economic transformation and the emergence of the new artisan economy. Many of the new artisans will be small and personal businesses - merchant-craftspeople producing one of a kind or limited runs of specialty goods for an increasingly large pool of customers looking for unique, customized, or niche products. These businesses will attract and retain craftspeople, artists, and engineers looking for the opportunity to build and create new products and markets."

A short comment on the quote above: This is exactly what we were able to build at our first start up, Banner Graphics, right through our last startup, SmartSkim™. You develop systems to produce unique services and products under the aegis of mass customization. You're world-beating within a niche subject area and then you find a way to scale your output and your productivity effectively. The time for this is not coming. It's here.

"They'll be equipped with advanced technology, able to access global and local business partners and customers, and will be competing in any industry. Their firms will be agile, flexible, and will often partner with larger firms to accomplish their business goals. Most will be knowledge artisans, relying on human capital to solve complex problems and develop new ideas, products services, and business models."

In my startups, I always follow this path. The critical piece I don't want you to miss is the last thought about developing new business models. The access to tools and innovative business partnering is virtually limitless within the scale of small businesses right now. Business models - how you organize and go to market - are limited only by your imagination and adherence to applicable laws.

"The new artisan economy will see rapid growth in the formation of small and personal (one person) businesses. The artisans will create new organizational structures and provide greater opportunities for work-life balance. These small and personal businesses will be run by a diverse group of entrepreneurs with a wide range of business objectives, but many will choose to join the ranks of the new artisans to match their work with their values."

… matching work with their values. Sustainable work at its core.

"Small business has generated the majority of net new jobs in the United States over the last several decades, and the number of personal businesses has been growing much faster than the overall economy. This trend will continue over the next decade. We expect that the small and personal business growth will again outpace the growth of the overall economy, and the number of personal businesses will grow from 21 million today to more than 32 million by 2018."

This predicts 10 million new jobs over the next decade, just within the subcategory of 'personal (one person) businesses'. Those growing into the small business category will rise proportionately.

The report describes our economy evolving into a pattern of development across most industries that they call, "barbell economics". This is a term from McKinsey & Co. describing industries, "…with a few global giants at one end, a relatively small number of mid-sized firms in the middle, and a large number of small businesses at the other end."

It is inevitable that the exponential growth in small business formation will create this barbell structure. The economics are obvious. Getting yourself ready to participate in this movement seems obvious. The Kauffman Foundation refers to this movement into entrepreneurship as, 'developing your personal economic independence'.

"Lightweight infrastructures will expand and redefine the boundaries of the small business. They will provide greater agility and flexibility in collaborating, pooling resources, and outsourcing functions to other firms. These changes will reduce the risk of starting and operating a small business by lowering capital requirements and shifting fixed costs into variable costs. Lightweight infrastructures will also open new markets and create new opportunities for small and personal businesses."

Lightweight infrastructures. It's lovely to hear these terms coming into vogue. Lightweight infrastructures are an essential tenant of sustainable enterprise. Moving hard costs to variable costs so that the enterprise can rise and fall and breathe like the (economically) living entity it is. Yep. Dead on.

"The small and personal businesses of the future will build upon information technology to extend their capabilities. Decreasing IT costs, coupled with increasing computer power and the growing popularity of "software as a service" delivery, will provide small businesses access to rich and complex business applications. These new applications will require less time, money and technical skills than traditional business applications, and offer flexibility and ease of use of desktop software. They also provide small businesses with tools and capabilities once exclusively available to large corporations."

What makes me most enthusiastic about all this is that all this guidance is not coming from the usual feel-good suspects. This is coming from hard headed accounting folks. Intuit, no less.

I type this standing under a photo of Buckminster Fuller, who long ago predicted the ever increasing utility of the knowledge economy, resulting in ever increasing possibilities and pathways for all of us to make the world a better place. For me, this report documents that progress.

Intuit really got it right with this report. This is the time, and this is the place for the re-emergence of the artisan entrepreneur.

The idea ties perfectly into the slow startup movement I've been touting. Smart, creative enterprises launched in support of the greater good and designed to support the entrepreneur and their communities. And oh by the way, it ties into the clear realities of the emerging global economy.

This is a time of major transition in economies worldwide, and small business entrepreneurs all over the world are emerging to lead the way to a better life for everyone.

Artisan entrepreneur. A great job title, just waiting for you.

Intuit's PDF links to this study I've been quoting from the Phase 3 report in this post, but they are all great.

Institute for the Future Report authors

The Kauffman Foundation

Thursday, February 21, 2008

Next talk. Feb. 27th in Baraboo

I've been invited to give the next presentation to the Entrepreneurs and Inventors' Clubs of Columbia and Sauk Counties (WI). If you're in the area, please drop by. I'd like to meet you.

The title is Startups: What are the Minimum System Requirements? This will be a presentation exploring just what are the minimum number of things necessary to get in place to launch your own startup. It's a surprisingly short list, when you strip away all the hype and false expectations.

The date is next Wednesday, February 27th, '08. The location is The Sauk County West Square Building, 505 Broadway (B-30), Baraboo, WI 53913. The meeting will run from 6 to 9 PM. The meeting is open to the public and refreshments will be served.

I've used the picture above because I celebrated our New Year's Day in the Baraboo bluffs with great friends from China this year.

That's me on the right with my friend Yongchao from Jilin, China. Yongchao works in economic development in his home city. We were visiting Devil's Lake State Park near beautiful Baraboo, WI to celebrate our New Year's 2008.

Come to next week's talk early and take some time to look around beautiful Sauk and Columbia Counties, some of the most very beautiful in all of Wisconsin. Then you can start your own business and call the area your home!

Sauk County Development Corp.

Saturday, February 02, 2008

What gets measured gets managed

That headline is a quote from Medal of Freedom winner Dr. Peter Drucker.

I believe his statement is life-and-death true for startups and emerging enterprises, as well as the rest of the economy.

And it sounds so simple to execute. Measure the important stuff, then manage the important stuff.

However, for people I call independent entrepreneurs - venture capital folks often call them solo entrepreneurs - this can be painful to hear.

It's not so much as a 'Duh!' moment, as it is a Homer Simpson, 'Doh!' moment.

How can you measure anything when you can't find it? How can you ever trust your conclusions when you're not sure you've found it all? That's not management, that's sleepless nights stuff.

I have self-interest in this post.

I released the very first beta copy of Diligence™ last night. This is my new tool for organizing enterprise workflow I wrote about several posts back. Yikes, am I excited.

Here is the premise behind this tool…

Small enterprises of all kinds need to measure and manage their business accurately.

There is contact management software to add people to your digital rolodex.

There is accounting software to take care of your financials.

There are many, many details in between. All of it is critical to your being able to survive and grow as an enterprise.

And where do we, as startups and small businesses keep all of those details?

We all have our systems. This is good. But as we grow, we begin to patch our systems. Then we patch some more. Pretty soon our system is nothing but patches.

I've personally done this. To epic proportions. It's just what you do.

Some of our information is in text files, some is in eMail, some in spreadsheets, some in piles on the desk, some in file drawers, some in our notebooks, some in our contacts files, and on and on. As our businesses grow, the real number of storage locations is typically many more than these. It just happens over time.

Pretty soon, nothing is connecting to anything, and what is connecting is wrong and giving you fits.

That's why I'm calling this new tool 'enterprise workflow software'.

I've carried a story around with me about a certain class of very successful retail businesses that would first buy their software, then build the business around that. The idea was that you put the tools in place as soon as possible so that your enterprise has the capability of growing without crashing. You want to avoid dieing in the details of a patched up mess. Yet, that's an all-to-common path.

Doing your own business should be a lot easier.

That's why I've written this new tool I'm calling Diligence™

Whenever you're ready you can put your enterprise into this tool. Then, as Peter Drucker sorta says, you measure and you manage. Then repeat.

Diligence™ lets you capture all that random workflow data and organize it easily. The purpose of the tool is to make it efficient to store, search, use and measure your business information on demand.

This is intentionally NOT accounting software. There are many good options we all use for that.

I've built this tool for everything that comes before the accounting software kicks in.

Diligence™ is a powerful contacts manager (that's not nearly enough). It can also create and track orders and all the many associated details. Create quotes and bids and efficiently store critical business details. It manages your vendors and all their specific information. It gives you a place to efficiently organize all those small details that always end up being critical when you can't find them.

Most important of all, with a bow to Peter Drucker, the new tool lets you measure this stuff.

Organize. Measure. Learn. Manage better. Repeat.

I've had my biz running in this new tool for about 2 months now. Shaving off burrs, looking for breaks, making it simple, etc. It's certainly an early iteration, but I'm really loving it. This is the first embodiment of what I've learned building new businesses over the last 35 years.

It's in a tool that's as simple and easy-to-use as a big-button calculator.

So, I've been the alpha test and I'm a tough judge. The beta test started last night Feb. 1, '08.

I chose my beta very specifically because (1) she is doing her own independent entrepreneur startup and (2) she is an expert in business database software.

I'd love to tell you some early results, but this post would be too long. It's a great story. My favorite piece of the tool wasn't working, of course. But we didn't care because we were both so happy with the first results. I fixed my favorite part and got some great feedback.

I don't think I'm going to write much about this new tool any longer on this blog. I'd like to keep SustainableWork as focused on entrepreneurship support as much as possible.

I'm going to start writing specifically about Diligence™ on a blog linked to my day job, Business Diligence. I'll link below, and put a permanent link into the settings on the top right.

Whew. The beta is underway.

Wikipedia for Dr. Peter Drucker

Friday, January 25, 2008

Get muddy. Get smart.

There was a great article in the Jan 7, '08 issue of Business Week by Vivek Wadhwa. Mr. Wadhwa is a tech startup guy and is executive in residence at Duke University and is a Fellow at Harvard Law.

From things I've learned in my own experience with startups and from helping entrepreneurs as students and clients, I will agree with his opening paragraph.

"Before I launched my last startup, I prepared a business plan exactly as I had been taught in business school. I was determined to lure professional investors, and I thought the key lay in creating lofty financial projections and carefully documenting the details. If all went according to my 40-page plan, my software company would be worth billions in five years by capturing just 1% of the market. My CEO friends told me this was one of the most professional business plans they had seen. Yet it didn't take me long to realize that it wasn't worth the paper it was printed on. It bore no resemblance to the company I finally built. I don't think that any of the 100 people I sent in to read more than the executive summary."

Mr. Wadhwa finds some merit in his research, but concludes, "But the two to three months I spent creating the plan would have been better spent if I had instead focused on building my product and speaking to potential customers to understand their needs."

There is much truth here, my startup friends.

It's my experience that the enterprise world is awash in people with ideas looking for money. The world is also awash in money looking for great ideas.

So what's the problem? The muddy middle.

For most of us the money can't see ideas. The money needs to see results and customers and buzz.

The money isn't going to pay you to do that. That's your job as a startup.

Mr. Wadhwa is exactly 100% dead on right. He encourages building prototypes and letting potential customers break them. Based on that knowledge he then offers up the 7 key points your biz plan should address with your newfound, reality-based knowledge: (summarized)

1. How are you going to find customers?

2. How are you going to set yourself apart?

3. What can you charge that's profitable for you and valuable for your customer?

4. How do you close your sales?

5. What are your sales channels to sell and service your customers?

6. How do you support customers with problems and product/service failures?

7. How do you be so good that your customers sell for you?

Yikes. If you answer those questions after you've skinned your knees on your beta tests, you've got yourself a business plan that will be the easiest pitch you'll ever make.

I personally gave the absolute worst presentation of my life to a room full of bankers. Technically the thing was a disaster. On the social stuff, I was worse than inept. I cringe as I type this.

But I was coming in from the field with a battle report. All I wanted to do was deliver that report, resupply, and get back out into the fight. It didn't matter to those good folks that I acted a bit shell shocked.

I addressed the points that Mr. Wadhwa so clearly identifies and the group signed the check.

If I'd been in there talking about what I was going to do, I am 100% certain that not a single person in the room would have approved that deal. However, I would never have been able to talk to them with just an idea in my pocket, so it's a moot point.

Here’s how Mr. Wadhwa closes, "The good news is that once you've perfected your business model, professional investors are likely to be much more interested in you. And you will have all the information you need to create a credible business plan they will take seriously."

Yep. Don't think your ideas will get you money. Lightening strikes but it's a risky bet. And if you're selling off an idea just to get money, you're not selling it for what it's worth. You'll be sorry about that later.

Do it the smarter, harder way. Get in the game. Get muddy. Get smart. Get going.

Business Week article by Vivek Wadhwa

Thanks to the Wisconsin Entrepreneur's Network, WEN, for pointing out this article.

Friday, January 18, 2008

Stalin on entrepreneurship

I had a chance to do a private seminar this week at a CPA firm in the Madison area I really like. The topic was 'How to control your enterprise life'.

It was for new and small business owners and the goal was to get some 'rubber meets the road' tools into their hands.

In listening to their stories, and concerns, it's just painfully obvious that many of them are frozen out of the help systems because they are too small.

Don't get me wrong. There are many wonderful, dedicated people working the system of helping entrepreneurs. In my home state of Wisconsin, I would specifically point to the county economic development directors I've worked with. These folks strike me as tireless advocates for entrepreneurs at all levels of development.

But then you step back and you look at the environment they work in. Funding for all government programs is tight and there is a great deal of competition for those resources. The higher up the food chain you go, the more decision makers have to focus on what keeps headline writers happy.

That's code for government and investor funded companies.

If you are a new or existing independent entrepreneur, my recommendation is that you look for help as close to your operation as you can. There is plenty of support at the local and regional level, but unless you seek it out, in many cases you probably won't know about it.

Don't expect state and federal programs to help you directly. Sure, lightening can strike, but their benefit to independent entrepreneurs is indirect through larger policy actions.

The wider world sees your plight much the same way Joseph Stalin saw his world. It's a brutal, dangerous, and frightening world out there. We wish you well with your enterprise, and good luck against those odds.

Sure there will be individual tragedies, but those are the odds you picked.

Uncle Joe said it this way, "One death is a tragedy. A million deaths is a statistic."

The folks at the seminar this week were a diverse group of small businesses, all independent entrepreneurs. Their stories are just amazing. The potential to grow many of these stories into great enterprises is obvious to me.

But where are they looking? Too often to the feds, or at the state level.

I counsel them to skip all that and look for tools and resources close to home that they can have some control over, that they can have ready access to, that can maximize their chances for survival and growth.

Certainly helping introduce entrepreneurs to professional accounting and financial managers is as valuable as anything I can do to keep them alive and growing. I insist my advisor clients use CPA firms, and it's in every course I teach. I've done accounting every way you can imagine and I will never do it again without using a CPA firm. When my kids were very little, we worked from home. The first two 'outsider' names they learned were those of our CPA and our UPS driver.

Another great joy I get from doing these talks and seminars is being able to convey the idea that an inverse of Stalin's approach is not just possible. It's happening all around us.

One sustainable enterprise is of great value. A million sustainable enterprises is a culture.

And from me, good luck with those odds.