The Entrepreneurial Mind

Rob at BusinessPundit teases his readers with this post on opportunity recognition. He offers just a hint of some work that is being done at the University of Louisville.

It focuses on your unique skills and knowledge, and leads to ideas that are good for you as an individual. Remember all that talk about how ideas are worthless and execution is everything? Well this ties them together by giving you ideas that you are in the unique position to execute.

How true. That is why I always insist that our students and the entrepreneurs I work with take the time to engage in thoughtful and reflective self-assessment. I look forward to hearing more about this in the future.

Posted by Jeff Cornwall at 06:10 AM | Permalink

Entrepreneur magazine has its 2006 list of what they consider to be the "hot" opportunities. Food, security and kids are the business categories where they see the most opportunities. This type of list can be a great way to help brainstorm new business ideas.

The most common source of good business opportunities are products/services that have worked in another market. Look for businesses that have taken off in another city, but have not yet caught on where you live. Just because the business has not arrived in your town is not reason enough to start one up. Finding such an opportunity is just the first step.

You still need to do your homework. You need to understand your local market and the potential customers you want to attract. Here are some of the types of questions you need to research:

- What are the similarities and differences between your market and the market where the business has succeeded? Are they similar sizes? Do they have similar demographics? The business idea may require a certain sized city to make sense. It may also require a certain concentration of a specific group of customers to be feasible, for example a large population of retired citizens may make ideas like the retrofitting of seniors' homes make sense.

- Does your market have a similar or different customer base? Are there regional cultural differences that make an idea work in one location, but not in another? Certain foods are popular in once city, but attempts to market these same foods in another may be a flop. Even mass merchandisers like Target and Wal-Mart stock products based on regional preferences.

- Are there other folks with the same good idea as you? Keep your eye open for potential competitors. Competition may or may not be a problem. Some products are so specialized or the customer base so small that there is only room for one or two players. On the other hand, if the potential customer base is big enough for multiple entrants into the market it is sometimes best to be second or even third into the market. This is one of the many pieces of wisdom that the late Peter Drucker left us. Let the other guys educate the market about the product. Let them spend the money to build a buzz about the product before you jump in and take advantage of the customer awareness they have created. Educating customers about a new product can be quite expensive. Also, the first to offer a new product or service often makes mistakes in a new market that you can learn from. See what they have done wrong and then offer a better option to customers.

Once you get excited about an idea it is critical to quickly become a skeptic. Try to prove to yourself that the idea cannot work. Have others poke holes in your idea. Try to find all of the flaws in the business model. Make sure that your great idea is a real business opportunity.

Taking this approach will help increase your odds of success as an entrepreneur. It will help you throw away seemingly good ideas that just can't work. It will also make sure that you have planned ahead for many of the challenges that you will face during start-up and growth. You can never anticipate all of the things that can go wrong, but you should be able to identify and plan for enough of them to significantly increase your chances for success.

Posted by Jeff Cornwall at 05:22 AM | Permalink | TrackBacks (1)

There is an interesting rift emerging among US business leaders when it comes to how we deal with China.

Venture Capitalists view is as a land of opportunity. From StartupJournal:

Venture capitalists got a wake-up call this summer when China's version of Google -- Baidu.com Inc. -- went public and saw its stock price more than quadruple on opening day. Baidu made clear that despite considerable risk, an immature capital market and regulatory flux, start-up opportunities in China can't be ignored, especially as U.S.-trained entrepreneurs head back home to start businesses.

As a result, many venture-capital firms that usually only like to back start-ups close to home are developing China strategies.

Traditional manufactures want the Bush administration to get tough with China. From Inc.com:

In the wake of President Bush's recent trip to Asia, a coalition of U.S. business groups is assailing the administration for failing to press China to revalue its currency, which many say unfairly favors Chinese manufacturers and constitutes a violation of China's free-trade obligations.

More than 40 manufacturing trade groups, including the Steel Manufacturers Association, have formed the China Currency Coalition with the U.S. Business and Industry Council to oppose what they consider China's illegal manipulation of its currency.

Many entrepreneurs see China as a place to outsource manufacturing to keep their costs competitive. Their business models might not even work without outsourcing.

The debate over outsourcing to China has become complex and emotional. It touches on issues such as jobs, profits, free trade, free enterprise, government intervention, national security, and economic globalization.

It is time to step back and examine the underlying issues, rather than letting this degenerate into a shouting match about whose ox is getting gored. Corporate lobbyists are behind most of the mess we now find ourselves in regarding trade with China. For years they have been getting sweet deals for their specific industry or even company when it comes to trade with China. I am afraid that if we leave it to these same lobbyists to settle the current issues being raised, it will only make things much worse in the future.

Posted by Jeff Cornwall at 06:11 AM | Permalink | TrackBacks (1)

COTC is at Gill blog this week.

Posted by Jeff Cornwall at 09:25 AM | Permalink

The National Dialogue on Entrepreneurship reports on a plan introduced by Democrats called The Innovation Agenda: A Commitment to Competitiveness to Keep America No. 1. NDE calls the Democrat's plan "a bold statement of legislative priorities designed to build a skilled and talented workforce, to advance scientific research, and to nurture entrepreneurship."

I beg to differ.

Much their plan proposes massive expansion of federal agencies to pick and choose economic winners. This plan will not work. Government bureaucrats are not the best at choosing economic winners and losers. That is what the market does best.

They throw a couple of political bones to try and make their attempt to expand the government's control of the economy palatable. They include proposals to simplify Sarbanes-Oxley for smaller companies (a good idea at face value) and tax credits for small businesses to offer health insurance. The tax credit idea is bad policy, as credits are not deductions for expenses incurred, but an actual redistribution of tax revenues paid by another source.

Let's not be fooled into accepting yet another plan to expand the federal government.

Posted by Jeff Cornwall at 06:21 AM | Permalink

Politicians love to swing for a home-run. We saw it recently here in Tennessee with the $197.6 million incentive package that helped to attract Nissan to move their headquarters from California to the Nashville suburb of Franklin. Now other large corporations are lining up to see if they can cut a deal with Tennessee.

But, does this type of corporate welfare work?

According a series run by the Lexington Herald-Leader such packages do not always deliver over the long-term.

Here are the highlights of the lessons they say have been learned in Kentucky:

- Companies that get incentives to create jobs commonly fail to meet their obligations.

- A tax-incentive program that targets high-unemployment counties has had little effect in many of the neediest places.

- Government money used for corporate subsidies is sometimes loosely monitored and invested in projects of questionable value.

- three-fourths of the state's economic development funds are used to provide financial subsidies to businesses, leaving little money to train the state's work force and spur entrepreneurship.

Since most of our economic growth and new job creation are a result of entrepreneurial development, spending so much trying to attract corporations to move their operations may be misguided. If there are enough slack resources in state funding to offer rich incentive packages, let's cut tax rates instead and let the market generate jobs and growth, as lower taxes and less government spur entrepreneurial activity.

(Thanks to Ben Cunningham for passing the Kentucky story along).

Posted by Jeff Cornwall at 05:58 AM | Permalink | TrackBacks (1)

Mobile food vendors have become a fixture here in Nashville, as they have in many cities across the country. They often sell specialized foods, such as Mexican, Indian or good old Southern cooking. But, the Nashville Scene reports that a bill has been introduced at the Nashville Metro that would shut down these entrepreneurial businesses. Why?

Three council members introduced the bill last week after what they describe as a convergence of factors--most notably complaints from restaurants, who, let's face it, compete with these vendors for business.

Although health concerns have been raised as an additional issue, the three mobile food vendors highlighted in the Nashville Scene story actually have a average health score that is only a couple of points different than the city wide average for all restaurants.

This is clearly a case of larger businesses teaming up with local politicians to shut down their smaller competitors. Shame on them!

(Thanks to Bill Hobbs for passing this story along).

Posted by Jeff Cornwall at 11:09 AM | Permalink

Here is the original Thanksgiving Proclamation. I am thankful that the ACLU was not around in those days, as this proclamation would never have gotten by them:

"Whereas it is the duty of all nations to acknowledge the providence of Almighty God, to obey His will, to be grateful for His benefits, and humbly to implore His protection and favor; and Whereas both Houses of Congress have, by their joint committee, requested me to recommend to the people of the United States a day of public thanksgiving and prayer, to be observed by acknowledging with grateful hearts the many and signal favors of Almighty God, especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness:

"Given under my hand, at the city of New York, the 3rd day of October, A.D. 1789."

George Washington

Posted by Jeff Cornwall at 07:10 AM | Permalink | TrackBacks (1)

This invention was a reaction to a possible national crisis. To avoid food poisoning, homemakers were over cooking turkeys to the point that they were dry and tasted like cardboard. The California Turkey Producers Advisory Board was concerned that Americans might change to another culinary theme for Thanksgiving if they did not find a solution.

Michael Taylor of the San Francisco Chronicle tells how one Eugene Beal led the effort to save our beloved national holiday:

Trying to solve the turkey cooking problem went on for days and days. Then one day...Goldy Kleaver looked at the ceiling sprinklers and realized they were triggered by flames melting something inside.

"Why can't we use that principle in the turkey?" Kleaver asked his fellow board members.

...It was Beals who ran with the idea, working with another board member to find and test the alloys that would "melt at a certain temperature,....'

The group spent almost a year testing what temperatures were best suited for the cooking of turkeys.

So how does the little red pop-up actually work? Well, the best place to find out how stuff work is to go to Howstuffworks.com:

A pop-up timer found in a turkey or chicken normally has four parts:

- The outer case (typically white or light blue) (a)
- The little stick that pops up (typically red) (b)
- A spring (c)
- A blob of soft metal similar to solder (d)

The soft metal (shown in gray in the diagram) is solid at room temperature and turns to a liquid (melts) at about 185 degrees Fahrenheit (85 degrees Celsius). When the metal turns to a liquid, it frees the end of the red stick that had been trapped in the metal. The spring pops the red stick up and you know the turkey is done!

Beal sold the invention to a company that was later sold to 3M. But as told in StartupJournal, the little invention that saved Thanksgiving did not always work right. So another company, Volk Enterprises, developed a similar product that would work better.

Tony Volk shifted to a pop-up timer of his own design, similar to the Dun-Rite/3M device. Oldest son Anthony crisscrossed the country pitching pop-ups to processors and supermarket chains. In Turlock, the clan donned sanitary hairnets and put together pop-ups around the kitchen table at night.

The Volk family business was sued by 3M for patent infringement in 1982. After several years of litigation, the two sides negotiated a settlement that permitted them to manufacture pop-ups under each other's patents. Thanks to Tony Volk's contacts in the turkey business, his own timer business took off and, a few months before his death from cancer in 1991, Volk Enterprises acquired 3M's pop-up business.

Sadly, the little red pop-up that Eugene Beal and Tony Volk made possible gets little respect. From StartupJournal:

Yet during holiday food shows and in cooking columns, the pop-up seldom comes in for praise. In her recipe for "Perfect Roast Turkey," Martha Stewart advises fans to toss the little timer. "An instant-read thermometer is a much more accurate indication of doneness," avows Ms. Stewart.

Rick Rodgers, author of "Thanksgiving 101," says he avoids pop-ups because he worries basting will prevent them from popping properly. Sgt. First Class David Russ, a U.S. Army chef from Fort Bragg, N.C., who won the National Military Culinary Chef award in 2004, can't stand the puncture a pop-up leaves behind. "If you get a piece of turkey on your plate with a hole in it," he says, "you wonder where it came from."

I intend, in my own small way, to honor the two entrepreneurs who saved Thanksgiving. In my Thanksgiving blessing I will give thanks to Eugene and Tony, and for the legacy of moist birds they left behind.

Posted by Jeff Cornwall at 06:13 AM | Permalink | TrackBacks (1)

Amidst the hand wringing of big government Democrats and Republicans (and the media) over the proposed budget cuts, SBA Administrator Hector Barreto says "no worry!" Each year that federal funding for the SBA has shrunk, the agency has actually become more efficient and more effective. "It's difficult to imagine strongly supporting a program without continually increasing its budget, but SBA has proven that it can be done," Barreto said.

The move the cut SBA lending was meant to de-politicize the funding process and to have the SBA focus on its mission.

Last year, in spite of considerable wailing and gnashing of teeth over budget cuts, the SBA managed to issue a record level of lending to small businesses.

The Big Government types want to measure success in government by the size of the budget. Let's follow Mr. Barreto's lead and measure success by effectiveness and efficiency. In fact, this should be what we do for all governmental agencies.

Posted by Jeff Cornwall at 07:15 AM | Permalink

A new report says the often elusive technological convergence that we have heard so much about may finally be here. From the National Dialogue on Entrepreneurship:

A new White Paper from the Information Technology Association of America (ITAA) says that convergence is finally here, and that it will have profound effects on business. The study focused on key technology trends such as the emergence of always-on multi-use devices, and the delegation of network control away from the center and toward a network's edges. The emergence of this next-generation internet protocol network means is going to trigger a revolutionary boom in new products, services, and technologies. This should trigger tremendous productivity gains, but it will also challenge incumbent industries, such as cable, telecommunications and information technology. These shifts will in turn create major public policy debates over privacy, spectrum use, and market competition.

There seems to be a lot of support for this opinion in industry. Cisco just announced their purchase of Scientific-Atlanta in a move that will move them out of the back room of business information systems and into our living rooms with hubs to run the next generation of integrated technologies. From CIO Today:

That convergence can already be seen in DVD players that also play CDs. Yet the holy grail is an easy-to-use gadget that handles everything from photos to TV. Cisco says the set-top box is that device.

"We will be the leader in...content, media and data in the home," says Vice President Ned Hooper.

This will be a world-wide economic race that will go beyond the battle for the box on the top of your television. India is not just looking at convergence within telecommunications, but also with bio-technology and nano-technology. Korea is also vying to be in the mix. Convergence will not just be about our homes, but will also include our mobile technologies.

And as we have seen with other technological breakthroughs, this one will spawn countless opportunities for small businesses that offer products and services that take advantage of these trends. A few start-ups will even become part of the breakthrough process.

There is one dark cloud on the horizon: the United Nations. The meetings that just closed in Tunis will not just determine who controls the Internet, but who will set the standards for all aspects of convergence and who will pay for new technologies around the world. The agreements reached are quite worrisome. It looks like we have taken one step closer to the UN controlling the Internet and mechanisms being put in place for world taxes that will redistribute money to assure the equal spread of digital technology around the globe.

If there is a wet blanket that could be thrown over the entrepreneurial economic boom that should follow the emergence of real convergence, it is the regulation and taxes that the UN is about to put in place.

Posted by Jeff Cornwall at 06:11 AM | Permalink

The Milken Institutute has released a report titled "The Best Markets for Entrepreneurial Finance." While this is an interesting study to consider, it is not the complete picture. The measure of access to capital that is used in this study to compare the financial climate around the globe really measures external financing and is too heavily weighted toward equity financing to accurately measure the real nature of entrepreneurial financing.

Almost four out of five start-ups in the US use some combination of self-financing and/or friends and family. The next largest source is debt financing. Less than one percent use equity financing. I do not know if this reflects entrepreneurial financing in the rest of the world, however. That would be an interesting study that might better explain why the US can lead the world in entrepreneurial activity, and yet ranks only fourth on this index.

Posted by Jeff Cornwall at 06:21 AM | Permalink | TrackBacks (1)

Gongol.com is this week's host of COTC.

Posted by Jeff Cornwall at 06:09 AM | Permalink

Is Inc.com joining those in the media who seem to be hoping that our entrepreneurial economic expansion will slow down? You may come to that conclusion when you read their story on the Democrats' Small Business Index (SBI):

With a perfect storm of rising interest rates, energy prices, and health care costs, the health of the nation's small-business climate is at an eight-year low, according to Congressional Democrats.

Combined with the impact of hurricanes Katrina, Rita, and Wilma, these conditions have "hindered the ability of entrepreneurs across the country to start and grow their businesses," Rep. Nydia Velazquez (D-N.Y.) said in statement.

The Democrats' SBI stands in stark contrast to other reports recently released, including one by the NFIB that shows a robust outlook for small business.

So why does the Democrats' SBI, once again, give a different picture than most other reports of its kind? The answer is in what they include in their index.

Many of the factors that they load into their index are macro economic variables that have never been shown to really have much a direct impact on small businesses, including balance of trade and federal deficits. While there may be legitimate reasons to be concerned about these types of measures, there is no evidence that they have any direct impact on small business start-ups or growth.

Other variables that they include are inconsequential or even meaningless for small business:

- They include the Russell 2000 index, which is a measure of stock prices of smaller public companies. The vast majority of small businesses employ fewer than 20 people and they are not publicly traded.

- They include venture capital activity. While this is an interesting factor for some discussions, VCs fund only a small fraction of one percent of businesses.

- They include a broad measure of commercial credit, rather than the more specific measure of small business credit reported by the SBA that most recently showed a 5.5% increase in bank funding of small business.

Probably the most important reason to be skeptical about the Democrats' SBI is what it does not measure. The cost/scope of regulation and tax rates have been proven in studies from around the world to be the two most important predictors of entrepreneurial activity. While the Democrats' SBI does include cost of regulations as one of their seventeen variables, they do not include a single measure related to taxes or tax rates.

Why don't the Democrats want to include tax rates in their index? Could it be that it does not fit their agenda? Who cares what really matters to small business and entrepreneurial economic development? This is politics!

Posted by Jeff Cornwall at 05:36 AM | Permalink | TrackBacks (2)

Our favorite coffee-shop-to-be continues to have challenges in their start-up. Jason offers the lessons he has learned thus far in this post. It seems that every developer dreams of having a Starbucks in their building, which makes getting a fair lease difficult, at best, for small businesses like Jason's.

The key virtue for a start-up entrepreneur is courage.

Courage to stick to your vision.

Courage to be true to your word and to your principles.

Courage to do the right thing, even if it takes you down a more difficult path.

Jason is showing us true courage in his start-up efforts. No matter what the end, he is already a success.

Posted by Jeff Cornwall at 07:19 AM | Permalink

There is a great post at LocalTechWire.com (via NDE) on the engine of entrepreneurship: Junk Food!!

It is my sincere belief that the rapidity with which an enterprise creates value is directly related to how well it stocks the company kitchen. And, the lower the nutritional value of the food choices, the greater the intellectual property produced.

I have spent time in a variety of industries: software, hardware, compression technology, storage technology, outsourced manufacturing and digital media. What do they have in common?

They all run on junk food.

My partners and I had a weekly ritual that centered around junk food. Every Friday we would have our partners' meeting over lunch. We always had the same meal; pizza with lots of meat toppings. Not very healthy, but it made some of our more difficult meetings a little more enjoyable. It was our comfort food after a long week.

When I was on the road visiting our various operations across the state, I started every morning with a Hardee's biscuit with egg and cheese.

What junk food is your entrepreneurial fuel?

Posted by Jeff Cornwall at 05:24 AM | Permalink | TrackBacks (1)

Ewing Marion Kauffman Foundation has introduced their new site called eVenturing. It will include original content created exclusively for the site by entrepreneurs based on their own experiences, as well as an aggregation of some of "the best of the best" existing articles and tools. Each month, a new content collection will be posted, rotating among subject areas of particular interest to entrepreneurs on the path to growth (e.g., finance, people and human resources, sales and marketing, products and services, operations and strategy, culture and leadership). The first of these collections is on pitching angel investors. The site also features a link-blog to identify the latest information on different aspects of entrepreneurship.

Posted by Jeff Cornwall at 08:58 AM | Permalink | TrackBacks (1)

The New York Times has finally discovered that there is a revolution in business education on America's college campuses.

If there is one place where the idea of the ownership society is taking hold, it is America's colleges and universities. More than 1,600 colleges offer courses in entrepreneurship, up from 1,050 in the early 1990's and a mere 300 schools in the 80's.

Their slant on this story needs some correcting, however. The ownership society is taking hold everywhere, not just on college campuses.

Also, their headline reads: "Problem: Good Jobs Are Scarce. Solution: Become Your Own Boss." First, being an entrepreneur is a good job! Second, the students I work with do not view this as a back-up plan. In fact, they view getting a traditional job as their back-up plan. They understand that we are in an entrepreneurial economy and they are excited about it.

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 06:52 AM | Permalink | TrackBacks (1)

It is not uncommon for entrepreneurs to use creative, non-salary means to attract good talent. After all, cash is a precious resource in any start-up. One common way is to offer key employees some form of equity in lieu of salary.

Red Herring reports on a new twist to this strategy. More and more experienced executives, including middle managers, are actively seeking opportunities to work for less than market pay if they can get a "piece of the action." They are becoming known of as angel employees.

While this is a great way to save cash and lower the breakeven point, it does have the potential to make things complicated. All of these managers are now shareholders and have legal rights. The more partners in the deal, the more complex things can become. I would only recommend this strategy for businesses with a clear and relatively quick exit plan. I would not recommend this for entrepreneurs who plan to build and hold their business. It is a recipe for too many headaches with so many added equity holders.

Posted by Jeff Cornwall at 06:12 AM | Permalink | TrackBacks (1)

A new Harvard study finds that entrepreneurship education for low income children has an impact.

(A) multiyear Harvard study indicates that learning entrepreneurial skills may keep low-income students in school and on track for college. The program may be particularly effective for Hispanic students, who have the highest rates of dropping out of high school.

A study begun in 2001 by a Harvard researcher indicates that the National Federation for Teaching Entrepreneurship program and its focus on business-development skills improves reading scores among Hispanics. Like other students in the program, it also raises Hispanics' interest in attending college.

I hope to see some of these kids in my classroom in a few years!

(Thanks to Jose Gonzalez of Conexion Americas for passing this along).

Posted by Jeff Cornwall at 06:01 AM | Permalink

What makes this forum work is freedom. I am free to express my knowledge and my opinions about all things entrepreneurship.

There is a movement at work that could seriously erode the freedom of speech we now enjoy on the Internet. From Azcentral.com:

Since 1998, the basic plumbing of the Internet - administration of domain names, management of root servers and other duties - has been managed by an obscure California agency that reports to the U.S. Department of Commerce.

But in another sign of growing international distrust of the U.S. government and the ever-increasing reach and importance of the Internet, some international leaders say that needs to change.

Beginning Wednesday at a summit in the North African country of Tunisia, a raft of countries plans to propose that the United Nations or perhaps a new international body take control of Internet regulation from the Marina Del Rey, Calif.-based Internet Corporation for Assigned Names and Numbers.

The United Nations is trying to take control of the Internet. Such a move would not only take away much of the freedom we now enjoy in this medium, but would also make it no longer "free."

A big part of this movement hopes to capture tax revenues and/or fees from the Internet for the UN. It would be their first victory in the movement for a world tax (no, I am not kidding).

There is an interesting analysis of this issue at Foreign Policy.

OK, so video blogs may not cause the end of my blogging, but having to work in a medium controlled by the United Nations probably would.

Posted by Jeff Cornwall at 05:49 AM | Permalink | TrackBacks (1)

Small business loans outstanding by commercial banks increased by 5.5 percent between June 2003 and June 2004, according to a study released today by the Office of Advocacy of the U.S. Small Business Administration. A summary of the study can be found here, the introduction with links to specific state information can be found here, and the full 106 page report can be found here.

"Increased access to credit is essential for the survival and growth of American small business," said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. "The information contained in this report helps small business owners find banks providing that access, and it helps banks understand how they compare to their competitors in commitment to small business lending."

As one of my business partners used to remind me, "There is a bank on every corner." This type of data helps entrepreneurs get a road map of small business lending by banks.

The report, Small Business and Micro Business Lending in the United States, for Data Years 2003-2004, includes rankings of the top state lenders for loans under $1 million (small business) and $100,000 (micro business), based on the Reports of Condition and Income (Call Report) and Community Reinvestment Act (CRA) data. Four sets of tables rank large Bank Holding Companies (BHC) and commercial banks nationally and by state. Findings also include:

- Small business loans outstanding (loans under $1 million) totaled $522 billion as of June 2004, an increase of $27 billion or 5.5 percent between June 2003 and June 2004. This compared with an increase of 2.3 percent during the previous period, according to the Call Report data.

- Large multi-billion-dollar banks made 67 percent of micro business loans in the year ending June 30, 2004 compared to 64 percent in 2003. This increased share appears related to the increased promotion of small business credit cards.

Posted by Jeff Cornwall at 05:10 AM | Permalink

One of the classic myths about entrepreneurship is that entrepreneurs are born, not made. I had a post on this earlier this year, comparing this debate to the same debate that went on during the 1960s and 1970s about leadership.

The National Dialogue on Entrepreneurship has a link to a new article in Region Focus, a journal produced by the Federal Reserve Bank of Richmond, "Nature vs. Nurture," by Charles Gerena.

What a waste of our tax money! We already know from several studies that entrepreneurial success rates increase dramatically with proper training.

I wonder if government bureaucrats are born, or made.....hmmmm.....

Posted by Jeff Cornwall at 06:19 AM | Permalink | TrackBacks (1)

The Inc 500 list of fastest growing private companies is now available. While an interesting read, keep in mind that this list is made up of self-nominated companies. Most entrepreneurs I have worked with tend to shy away from this list unless they need it to help them with publicity for raising capital.

Posted by Jeff Cornwall at 06:14 AM | Permalink

Before we get into our usual Carnival of the Capitalists rants, we wanted to take a few moments to remember one of the greatest management thinkers and visionaries of all time, Peter Drucker, who passed away this past week.

I was first inspired by Drucker's writings about thirty years ago when I was walking the halls of academia as a young college student. In graduate school, Drucker inspired me to think more seriously about entrepreneurship. He was writing about the importance of entrepreneurship in our economy long before it was cool. In the early 1980s his writings helped me to form my early thinking about entrepreneurship as an academic discipline. In the late 1980s and into the 1990s his teachings often helped us as we first began, and then grew our health care ventures. In the late 1990s, I had the honor of hearing his words in person for the first time after we had sold our business and I had returned to teaching. Throughout every stage of my career, Peter Drucker's words have been there to challenge and inspire me.

His journey is now completed. May God bless you, Professor Drucker.

Here are some other tributes to Professor Drucker:

Ronny Max
Evolving Excellence
AdamSmithEsq.com
Phonton Courier
blog.websolvers
Phil Gerbyshak Challenges You to Make it Great!
EGO
Businesspundit

COTC will offer more tributes to Peter Drucker over the next two weeks.

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Today COTC comes to you from the beautiful campus of Belmont University, where I teach Entrepreneurship. So grab your book bag, put your cap on backwards, fire-up your iPod, slip on your flip-flops, and get ready to go back to college. It is time to head to our classes....

ECO 2210. Principles of Macroeconomics (3). Prerequisite: MTH 1020 or MTH 1080 or CSC 1020. An introductory course in macroeconomic theory. Primary emphasis is placed upon the study of economic aggregates. Topics to be studied include: the basic operation of a market economy; national income accounting, the determination of employment, output, and the price level; the banking system, fiscal, monetary, and supply-side economic policies.

Course Outline

The Prudent Investor argues that the Federal Reserve has taken a highly worrisome way to counter the exploding money supply. It will discontinue the publication of the most important set of data for economists and analysts that gives an indication at what speed the money printing press for the premier reserve currency of the world is running.

Financial Methods states that the Federal Reserve Bank of San Francisco (FRBSF) is hoping that rents will climb in the Golden State. This will allow housing fundamentals to return to a more normal level without a severe decline in real estate prices.

ECO 2220. Principles of Microeconomics (3). Prerequisite: MTH 1020 or MTH 1080 or CSC 1020. An introductory course in microeconomic theory. Primary emphasis is placed upon the study of the behavior of individual decision-making units. Topics to be studied include: demand and supply analysis, the theory of consumer behavior, the theory of the firm, market structures and resource allocation, and resource price-employment determination.

Course Outline

Gongol.com offers questions to ask before a community gets into the business of supplying utilities like electricity or broadband Internet.

ECO 3130. Topics in Economics and Public Policy (3). Prerequisites: ECO 1110 or ECO 2210. A detailed study in a topic of special interest in economics.

Course Outline

voluntaryXchange examines the following hypothesis: The root causes view - that privation is the cause of crime - has been an effective cudgel with which liberals beat up capitalists. The post-Katrina experience is a natural experiment which strongly rejects this argument.

Triple Pundit suggests that contrary to popular belief, 100% recycled means practically nothing. So what do companies mean when they claim it? And what are the marketing implications? This lecture suggests that this is one of those cases where legislative changes are needed to protect the consumer and to prevent false claims from blowing up in the face of honest businesses.

The Business of America is Business explores the results presented at a recent seminar on "The Economic Impact of Wal-Mart" hosted by the economic forecaster, Global Insight.

Econbrowser reports on a little known exchange during the recent Senate hearings on Big Oil.....

Catallarchy poses the question: What is wrong with child labor?

ECO 4400. International Economics (3). Prerequisites: ECO 1110 or ECO 2210. An examination of the special problems and issues surrounding the economic interaction of sovereign nations. Topics include gains from trade, patterns of trade, balance of payments, determination of exchange rates, free trade and protectionism, international capital markets, and issues in international policy coordination.

Course Outline

interim thoughts... tracks the innovations of India's mobile operators using micro recharges for their pre paid phones and wonders why banks have rarely tried to extend their services to the lower income groups.

Business and Technology Reinvention presents an overview of the Open Skies Agreement signed this week by the Canadian and United States Governments.

Combs Spouts Off examines Kurdistan's economic recovery and the role played by the US.

ETP 3000. Foundations in Entrepreneurship (3). This course will provide a basic understanding of the entrepreneurial process. Students will examine entrepreneurship as a career. A comprehensive self-assessment will help the students to better understand their own personal aspirations, and assess their unique skills and competencies. Students will learn about opportunity assessment for new venture ideas. An overview of business plans will be presented.

Course Outline

Ironman at Political Calculations highlights a bricklayers labor union that operates more like an entrepreneurial business and shows how it is successfully using its competitive advantages to grow.

Philobiblion suggests a new business model that's evolved over nearly three decades - you could call it the anti-Wal-Mart model.

CASE STUDY: Search Engine Guide (sent by Anita of Small Business Trends) is writing a series on setting up an online business to become profitable within 30 days, with zero cash outlay.

ProHipHop offers his thoughts on the business opportunities related to mobile content with an emphasis on small business.

ETP 3700. Entrepreneurial Financial Management (3). Prerequisite: ETP 3000. This course examines the process of financial forecasting for a new venture, effective financial management of an emerging business, sources of financing, bootstrapping, and exit planning.

Course Outline

View From a Height examines current trends in VC investing and possible causes.

Drakeview also summarizes venture capital trends, but says that VC interest in early stage companies may be hidden from view.

FIN 3460. Investment Portfolio Management (3). Prerequisite or Co requisites: ACC 2410, ECO 2220, MTH 1150. This course provides students with a practical, "hands-on" learning opportunity in managing an investment portfolio. Utilizing a quantitative and qualitative discipline of equity analysis, students are able to learn and understand some of the criteria that Wall Street professionals use to derive intrinsic values and earnings growth rates of common stocks. In addition, this course offers an overview of the financial markets and the techniques in valuing and managing a variety of securities and investment products.

Course Outline

The Big Picture examines myth of the hedge fund from a European perspective.

The Internet Stock Blog offer transcripts of companies' conference calls.

Abnormal Returns explores two new investment books from wildly successful institutional investors. They beg the question: How can they come to such different recommendations for individual investors?

The Real Returns asserts that socially responsible investments may let you stay away from the tobacco, alcohol, weapon manufacturers, and nuclear power stocks, but socially responsible investments may be very risky for your investment portfolio.

The Japan Stock Blog explores changes in the Japanese economy over the past year, particularly the increase in M&A activity.

Fat Pitch Financials discusses some of the basics on how to use EDGAR to research companies.

Mover Mike explains that the SEC, wanting to avoid short-squeezes in dozens of stocks caused by the closing out of naked short positions, opted to 'grandfather in' any failed deliveries before Jan. 3.

FIN 3510. Personal Money Management (3). Prerequisite MTH 1000 level or higher. This course includes the relationship of the consumer to the economy, markets and prices, money management, home mortgages, family transportation, estate planning, insurance, investments, savings and taxes.

Course Outline

Free Money Finance wants us to learn more from the "Millionaire Next Door."

Multiple Mentality offers some bootstrapping tips for using e-mail and e-paying bills.

Searchlight Crusade delves into the pitfalls of various home mortgage instruments.

Pacesetter Mortgage looks at how one asset, your home equity, can get stuck in another asset, your home.

ISM 4310. Information Technology Management (3). Prerequisites: ISM 3300 and a programming language. This is a case-oriented course that deals with the researching and management of IT trends, both national and international. The course will cover such topics as: organizational issues, IT development issues, strategic planning, project planning, control and development, and the IT role in corporate strategic positioning.

Course Outline

Random Thoughts from a CTO answers the question, "How long can they manage without you?"

Gaurav highlights the growing issues with quality in Indian IT workforce.

MDS 1180. Introduction to Public Relations (3). A study of the profession of public relations, including the historical and theoretical underpinnings of the field and an examination of the range of career opportunities available to PR practitioners. This course will introduce students to what public relations is and how they can have a career in the field.

Course Outline

Scatterbox cautions against the claims of hyperventilating PR and tech business types who promote blogging to CEOs as the path to real corporate transparency.

JSLogan's thesis is that innovators and risk takers read blogs. They don't want safe, stale, and repetitive information. Blog readers want bold, innovative, and challenging thoughts and ideas.

MDS 3200. New Media and Culture (3). Prerequisite: MDS 2900. This course addresses the impact of new media -- Internet communication, wireless media, and combinations of traditional and new media -- on current and future cultures. Attention will be given to how new media may change ways we communicate, distribute and process information, and the social impact of these changes.

Course Outline

The blog Synergy asserts that it is such a sorry state of affairs that most media must resort to sensationalism to sell their news. I am holding out the hope that the business blog will be a leader in demonstrating that truthfulness is good enough, and far more responsible.

The Clog Almanac asks the question: How might society change if everything anyone thought and said followed them around in a cloud of blog tags swirling around their heads?

Blog Business World offers suggestions to bloggers who are having trouble coming up with content for their blogs.

Travel Blog Roundup reports on the start of a new blog carnival - about the travel industry and travel adventures.

MGT 3010. Health Care Systems: Issues and the Changing Environment (3). This course provides a comprehensive study of the various components of the American health care delivery system. This includes an overview of organizations that participate in delivery of health care services and an analysis of current health care issues.

Course Outline

InsureBlog suggests we look into a new healthcare delivery model - "drop in" medical services with prices posted upfront.

MGT 3110. Principles of Management (3). Prerequisites: ECO 2220, ACC 2420. A study of the generally accepted management principles which have contributed to contemporary practices found in successful business planning, organizing, directing, and controlling.

Course Outline

The Coyote Within explores the Work Ethic thought police.

Businesspundit takes a look at how cognitive biases and our desire to believe what we want to believe can lead us to make bad business decisions.

MGT 4960. Strategic Management (3). Prerequisites: MGT 3110, MKT 3210, FIN 3210; and senior standing. A study of strategy development and implementation by managers and executives. Integrates the individual functional courses from the viewpoint of the executive.

Course Outline

Polymath argues that GE should divest itself of NBC as that unit has very little in common with the other GE divisions.

Jack Yoest asserts that the one best way to judge a business is by its management team.

MKT 3210. Principles of Marketing (3). Prerequisite: Junior standing. An introductory marketing course designed to give a basic understanding of marketing principles used by businesses, and the operation of our marketing system. The marketing mix, marketing environment, strategic marketing planning, marketing of services, and international marketing are some of the topics discussed.

Course Outline

From The Social Customer Manifesto: The Cluetrain Manifesto starts with "Markets are conversations." If that's true, what are the things that companies need to do in order to embrace this idea? Should there be a "Customer Conversations Department?" And if so, what do we do with all the out-of-work marketroids?

Big Picture, Small Office questions the wisdom of having finance involved in the design of customer rebate programs.

Lip-sticking asks readers their thoughts on 'branding'. What is it? How important is it? Who cares?

Crossroads Dispatches advocates jargon-free language so that we each can be ambassadors to other disciplines and cultures encouraging innovation and cross-pollination of ideas.

MKT 3320. Consumer Behavior (3). Prerequisites: MKT 3210, PSY 1200. An analysis of consumer motivation, consumer motivation, consumer purchase decisions, and factors that influence the decision process. Psychological, cultural, and media influences on decision-making are discussed.

Course Outline

Okdork.com examines the craze of the iPod, and how it has conquered college campuses.

*Star In The Margin explains why being big, fancy or cheap isn't good enough anymore.

MKT 4020. Advertising Principles (3). Prerequisite: MKT 3210. This course gives students a broad perspective of advertising. Topics include developing advertising objectives and strategy, planning, buying, and scheduling media, creating and producing advertisements, industry regulation, and ethical issues in advertising.

Course Outline

Anyletter takes a serious look at some of the big text ad programs.

MKT 4320. Retail Management (3). Prerequisite: MGT 3300, MKT 3210. A study of strategic retail management. Attention is devoted to the retail strategy process, retail site selection, retail organization structure, and human resource management. In-depth analyses of merchandising planning and management, pricing, promotion, store design and layout, and customer service are covered.

Course Outline

Interested-Participant tells how Black Friday, the day after Thanksgiving and the year's busiest shopping day, is changing due to website sales.

Classes are finished for today. It is time to head to the cafeteria and then off to the library to study. We have some big tests tomorrow.....

Posted by Jeff Cornwall at 05:39 AM | Permalink | TrackBacks (14)

The StartupJournal offers some additional insight into a trend that I have been documenting here for some time: venture capitalists are more than ever shifting to later stage, more mature companies for their investments.

Such trends are a sign that many venture-funded companies, particularly those in industries like wireless and pharmaceuticals, still need significant cash to ramp up operations. But it also indicates a problem for venture firms: Their funds, which raised tens of billions of dollars during the dot-com boom and never spent it all, are now scrambling to find places to put their remaining cash before the fund's life, usually 10 years, runs out.

As a result, venture capitalists are opting for bigger investments in more mature companies, since those firms might go public or get bought more quickly than newer firms. The goal of any venture-capital investment is an "exit," usually in the form of an IPO or an acquisition.

They highlight the trend using this graphic from the National Venture Capital Association:

An additional factor in all of this is the unintended consequences of Sarbanes-Oxley. Very few smaller companies are able to use an IPO as a liquidation event due to the costs of compliance with Sarbanes-Oxley. Start-ups have to find funding with more "patient money," typically from angel investors.

Posted by Jeff Cornwall at 05:52 AM | Permalink

The latest survey of small businesses is out from the NFIB, and it continues to show a bullish and optimistic attitude. Not surprising given the fact that a whopping 77% reported higher profits. So what are they spending all of their new found gains on? Growth!

Small businesses are hiring more employees. One in five small businesses expanded their employment in October. In fact, business is so good for small businesses that they are beginning to experience difficulty in hiring. Eight ou