Fall 2012 Business Concept Competition

Now that the World Series (thankfully, since I’m a lifelong Tiger fan) has ended and the Super Bowl won’t happen until February, it’s a great time to focus on the next enormous competitive battle – that’s right, the Fall 2012 Chico State Business Concept Competition. This year’s Final will be held Wednesday November 14 at 7:00 in Tehama 100. The public is more than welcome.

Past winners include Andrew Gazdecki with Bizness Apps (http://www.biznessapps.com/ ) and Jon Richardson, Hobie Jensen and Patrick Edelman of Upper Park Designs (http://upperparkdesigns.myshopify.com/password) whose first production run of awesome disc golf backpacks is on its way to America even as I write this post.

If you haven’t attended any prior events then I whole-heartedly urge you to come take this one in. The range and breadth of the ideas is always staggering. This year is no exception. Here’s a list of the finalists and their business ideas:

Aram Favala ...      Global U

Bernard Maushardt & Laurence Duterte...           Ronin Brewing Company  

Brett Conner, Kevin Crowe...     Impetus Calendar Management  

Jason Schroeder, Keith Rincon, & Ashley Croom ...    Northern California River Rafting  

Jeff Huckabay...   FoodEase

Joe Malinovsky et al ...     DUI Vanguard

Katharina Chiu ... MEETING PUNKT

Max Frederick ...  MusicSession

Nick Delucchi ... Greenware

Raette Meredith  ...         Artazine

Raette Meredith, Kami Rowedda, John Woolery ...               Puppicures

Ricky Owaki, Jasen Henderson, Jake Wade  ...     The Accordion Curtain

Ryan Robeson, Neoma Frary & Joe Malinovsky ... Textbooks to Cash

Sam Thomas, Nico Chesterton,  Andrew Paddock  ...      EcoRacks

Tyler Israel ...      EasyScrip

Don’t worry if you can’t quite understand what these businesses are supposed to do; neither do I. We'll find out together. That’s the beauty of Finals night. See you there!

Setting Goals --- Really, really big goals

In my business plan class this week we have been discussing how one can possibly put together pro forma business statements before the company has even opened its doors? The questions abound from the students. Should I be super-conservative? Should I shoot for the stars? How can I be realistic? And, best of all, what does being realistic mean?

There are of course no easy answers to any of these questions and yet it is absolutely crucial that we set goals and make sales projections that will convince or entice or excite investors – or, of course, all of the above. So where does one turn? One piece of advice that has always resonated with me is to set what Jerry Porras and Jim Collins called in their book Built to Last Big Hairy Audacious Goals or BHAGS for short. Here’s what they wrote: "A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines."

And yet, how does a startup know where to draw the line? When is that super goal just too fantastic; how does one do it? An entrepreneur ultimately must be very comfortable with the vast contradictions that are inherent in starting up business; setting BHAGs while paying extreme attention to making the next sale or the first sale. How does one walk that line?

Let’s listen to what Abraham Lincoln said about Charles Blondin. Likening himself to the French acrobat who was famed for being the first person to cross Niagara Falls on a tight rope, Lincoln asked: "Suppose all the property you were worth was in gold, and you had to put it in the hands of Blondin to carry across Niagara. Would you shake the cable, or-keep shouting at him, 'Blondin, stand up a little straighter — Blondin, stoop a little more — lean a little more to the north — lean a little more to the south'? No, you would hold your breath as well as your tongue and keep your hands off until he was safely over .”*

Clearly the course a startup must follow is: don’t listen to the mob – set your course and as Nike says, just do it. Blondin, by the way, never fell.

*From Time magazine, 1967
http://www.time.com/time/magazine/article/0,9171,837603,00.html#ixzz2Azz2Zq55

How Do You Start a Business?

It is conventional wisdom that the best way to start a business is to find a problem and then solve it. The bigger the problem, the bigger the potential solution and of course, the bigger the payoff. Simple, right? Uh, maybe not. Sometimes even though the problem is huge and staring us all right in the face it may not be that easy.

Take batteries for electric vehicles. We all know the chief issue holding back electric vehicles is range. The best can only go about two hundred miles before needing a charge. Plus, charging takes time. There are literally hundreds of companies working on this problem, with a wide variety of solutions or rather possible solutions. 

Case in point, according to today’s New York Times: “The troubled battery maker A123 Systems filed for bankruptcy on Tuesday, dealing a blow to the Obama administration’s program to jump-start a domestic battery industry and spur development of electric vehicles. 

The company’s bankruptcy filing was unexpected, since it struck a deal in August to sell a majority stake to a Chinese auto parts manufacturer. That agreement, with the Wanxiang Group, provided an apparent lifeline to the company. But A123, which has received federal grant money, said the Wanxiang deal was never completed, and on Monday, it failed to make a debt payment due on $75 million it had borrowed from Wanxiang.” Oops.

 

A three year old startup, Better Place (http://www.betterplace.com/) decided to make an end run around the problem. Rather than inventing a long range battery, they mitigate the predicament by putting up a network of battery exchange stations. No problem, just drive in and your batteries will be swapped in less than two minutes. Great idea; they have even starting building their first set – in Israel, a small, small country that obviously has issues when it comes to getting oil. Will Better Place ever even come to America?

So, it is quite a challenge to place bets on winning technologies. After all, the best venture capital firms on Sand Hill Road are shooting for a one out of ten success rate. I would wager that the success rate on batteries to solve the range issue will end up at one out of a hundred, if that. Yet, we all keep trying, because when that special someone hits it; it will be a home run that will change the world.

And that folks is one of the key reasons why entrepreneurship is so cool.

Full article: http://www.nytimes.com/2012/10/17/business/battery-maker-a123-systems-files-for-bankruptcy.html?hpw

How to Make it in the Modern World

Those of you who have paid attention in class (there are a few of you) know that I often cite the work of New York Times columnist, Thomas Friedman who has written a number of marvelous books about globalization and how it governs the world economy. Just the other day he was writing about the presidential campaign and made the following statement:

All of this made me think Obama should stop using the phrase — first minted by Bill Clinton in 1992 — that if you just “work hard and play by the rules” you should expect that the American system will deliver you a decent life and a chance for your children to have a better one. That mantra really resonates with me and, I am sure, with many voters. There is just one problem: It’s out of date. 

 

Friedman argues that although it sounds good, it’s wrong. Why? Because when Clinton was talking – in the early 90’s – there was only a fledgling Internet, almost no email; let alone smartphones, tablets, Skype and all the other technological breakthroughs that we take for granted. According to Friedman:

That world is gone. It is now a more open system. Technology and globalization are wiping out lower-skilled jobs faster, while steadily raising the skill level required for new jobs. More than ever now, lifelong learning is the key to getting into, and staying in, the middle class.

To my mind, it’s not just about staying in the middle class. Lifelong learning is essential to anyone who wants to be a successful entrepreneur. The next time you get a chance to speak with someone who has “made it” ask them how much reading they do. I'll bet you find they are up on any number of web sites, newspapers (online to be sure) and other sources.

Friedman, by the way, also cited the following, which I think pretty much sums it up. 

There is a quote attributed to the futurist Alvin Toffler that captures this new reality: In the future “illiteracy will not be defined by those who cannot read and write, but by those who cannot learn and relearn.” Any form of standing still is deadly.

 

So, it’s not just about reading, but thinking about and learning what you have read as well.

Source for the above quotes: http://www.nytimes.com/2012/09/09/opinion/sunday/friedman-new-rules.html?_r=1&ref=opinion

California?

Many of you know I’m a proud (almost-native) Detroiter. I talk about my hometown all the time, especially my love for the Tigers and Wolverines football. But I have lived in California since 1974 and moved to Butte County in 1976. I’ve been here ever since. I think Chico is a fantastic place; a great place to raise a family and a marvelous place to grow a business. 

Yet, some of my friends think California’s best days are behind us. My good buddy, Professor Bill McGowan has insisted for years that our entrepreneurship students should consider Texas. Texas! It killed me and yet Bill has argued a good case. After all Texas has led the nation in job creation throughout much of the past decade. Until now! 

I was very pleased to read in a recent article in Bloomberg Businessweek that over the past twelve months California has led the nation in job creation. According to the article:

California added 365,100 nonfarm jobs in the year ending in July, a 2.6 percent increase and the state’s largest 12-month gain since 2000. That beats every other state, including Texas, which added 222,500 jobs over the past year.

Take that McGowan! Seriously, although these are challenging times for our state, we still have an unemployment rate of 10.7% (Texas, by the way, is at 7.2%) so we have a lot of work to do -- especially when it comes to creating new ventures. But I’m convinced California and Chico in particular are prime locales to start a business. 

In the coming months, keep your eyes on this blog, I think you’ll be impressed with what we’re doing in Chico to help promote new business.

http://www.businessweek.com/articles/2012-09-06/californias-job-growth-outpaces-texass