The Entrepreneurial Mind

Having grown up in Wisconsin, one of the things I miss is Friday night fish fries (although my waistline does not miss the fried part).

One of my former students from the University of St. Thomas, Jesse Ness, has an Internet business that sells freshwater fish such as walleye (my personal favorite), perch, blue gill, etc.

Now we former northerners can satisfy our hunger for these freshwater delicacies without having to brave the long cold winters and summer mosquitoes the size of small sparrows.

Walleye Direct is the name of his website. You can get freshwater fish "shipped overnight to your doorstep" and cook it up with one of the many recipes available at the website.

This is a great example of a business that leverages the Internet to create a "virtual" niche in the market.

Posted by Jeff Cornwall at 05:35 AM | Permalink

We teach our students about the art of the pitch. Most entrepreneurs will have only moments to grab the attention of an investor or a customer, so they need to learn how to explain what they do and how it creates value in a very short few moments.

TechCrunch has an on-line site for elevator pitches. Visitors can vote "up" or "down" on the product ideas and offer their comments.

If a pitch is in your future go to this site and watch some of the pitches. It helps to see which pitches work and why. It really helps you to see what makes a pitch effective. I found my mind wandering during several of the pitches at the site within the first thirty seconds. Others grabbed my attention and explained the concept and the revenue model in a clear and engaging way.

Develop a clear and concise pitch. Then practice it over and over. Video your pitch to see how well you actually come across. Pitch to your friends. Pitch to strangers. Pitch to anyone who will listen. Watch their reactions. Listen to their concerns. Pay attention to subtle clues they offer into what is working in your pitch through their expressions and body language.

You need to develop a thick skin as an entrepreneur. You will face a lot of rejection. Get used to it. Rejection and criticism are powerful teachers if we pay attention to their lessons.

Even if you don't pitch for money, you will pitch to gain customers, attract employees, talk your spouse into your crazy idea, etc., etc. Learn how to pitch!

(Thanks to Andy Tabar for passing this along).

Posted by Jeff Cornwall at 07:13 AM | Permalink

The idea I picked to give advice to for ideablob.com Week at the Entrepreneurial Mind is one that offers an innovative product tied to wellness.

Individuals begin fitness programs each year, but set unrealistic goals or improperly structure their fitness programs and eventually lose interest. I'm developing a portable touch-screen device equipped with a heart rate monitor, acting as a personal trainer. The device uploads workouts from our website, where based off an individual’s fitness goals, they can build their own workout or use one of ours. The device displays progress charts, advice for future workouts, and can incorporate daily nutrition information. The website also functions as a social networking website centered around device results for exercise gurus, athletes, and anyone who enjoys living a healthy lifestyle.

While I think this is a cool idea, the entrepreneurs need to keep their eye on the big picture -- that is the future of healthcare policy in the US -- and not just their customers and competitors.

My advice:

Wellness might well become the "next big thing" in healthcare. The reason I say "might" is due to the uncertainty of the elective and what healthcare plan ends up being passed in the next president's term.

This is a great example of a good idea that may blossom or fade due to macro trends outside of the entrepreneur's control.

If healthcare stays a primarily private sector industry, products like yours has a bright future. Health plans will be trying to implement more programs and initiatives to help their population of covered lives get healthier. As a society we have become too sedentary and are eating too many calories. It is taking its toll on health care costs. Insurance plans are trying to find ways to incentivize people to get healthier and use fewer resources for healthcare. Your product would be a great tool for this.

If healthcare goes with a more public payment model in the next few years, we will likely have all attention focused on lobbying to keep coverage for certain illnesses. We will also see resources going to create healthcare entities that will be able to maximize their market share of federalized healthcare dollars (think economic rent seeking). Not as much money will be going to wellness.

When I was and entrepreneur in the healthcare industry we paid attention to the macro changes in the 1980s and 1990s. We saw a shift from insurance to managed care and positioned our business accordingly. We saw Medicaid being pushed down from the federal level to individual states -- again we shaped our strategy to meet this macro trend. We still paid attention to our customers and competition, but those really involved more short-term tactical decisions. Our strategy was shaped by the direction of those broader trends.

Don't just look at your competitive environment -- keep your eye on the macro trends that may shape your future. See which way the election takes our country as it will have a huge impact on healthcare and on the wellness sector you are operating in with your new product.

Posted by Jeff Cornwall at 09:06 AM | Permalink

As a professor, I could not let this idea at ideablob.com go by without offering some advice:

People would become members of the site, and sell the copy write of a term paper they have written. Not as to be copied as plagiarism but as a foundation for their own paper. The seller would provide a brief description of their paper including length, synopsis and assignment. Students would build a reputation depending on how good of an idea they had, as according to the purchasing student.

What will you do if you win $10,000 for this idea?

To establish the website, and promote it. I would make sure everyone knows it wouldn't be just a way for student to cheat out on writing a paper. Sometimes the hardest part of writing a paper is getting the ball rolling, by buying someones paper and using it as a foundation it would get the ball rolling and help students write more complete essays.

My advice:

As a college professor -- and one who has written on business ethics from time to time -- I could not let this opportunity pass me by.

One of the entrepreneurial virtues that my co-author Prof. Michael Naughton from the U of St. Thomas and I write about in our soon to be released book is prudence. To be a prudent entrepreneur one pursues good ends while being careful stewards of the limited resources that are available for the venture.

The entrepreneur who pursues morally good ends, but does not employ effective and efficient means given the resources they have is "well intentioned."

The entrepreneur who pursues "bad" ends, and does not employ effective and efficient means is "incompetent."

The entrepreneur who pursues "bad" ends, but is effective and efficient is "cunning."

Finally, the entrepreneur who pursues good ends with effective and efficient means is "prudent." That is the desirable state for those who strive to be morally good entrepreneurs.

Let's look at this idea using this framework.

It sounds like the people behind the idea have thought through many of the logistics. They are on their way to effective and efficient means.

However, I worry about the ends. While they do not encourage cheating or plagiarism, they sure will facilitate it. Rather than selling papers, could they not find a business model that creates a writing tool that helps students to "get the ball rolling" on writing without giving them an actual term paper?

If their ends are really to help students become better at writing papers, perhaps they should go back to the drawing board to find a new method that does not tempt their customers to be unethical and break all academic codes known to man.

Posted by Jeff Cornwall at 12:48 PM | Permalink | Comments (2)

Tune Your World = Music + Microfinance is the next idea I am offering advice as part of ideablob.com Week at the Entrepreneurial Mind. This one caught my attention as it addresses an issue that I hear about every day here in Nashville -- the radical changes happening in the music industry.

Here is their idea:

Every artist has the same problem of obtaining capital for their next recording. Tune Your World provides the solution of applying the principles of micro-financing to the music industry. Our groundbreaking approach is the creation of peer-to-peer micro-financing of new music projects - enabling fans to deliver start-up capital to aspiring musicians from developing countries around the world. Tune Your World operates on a people-to-people model. Musicians obtain funding for new recordings directly from their fans without giving up ownership or control. Our mission is to revitalize the music industry in places where the music industry has never worked very well. www.tuneyourworld.com

My advice:

I like this idea. It addresses a real need for struggling musicians in the digital age -- seed funding for recording.

The biggest challenge is going to be getting the musicians to repay their micro-investors. One of the things that makes the micro finance program Kiva.org so compelling is the high rate of repayment of the micro loans -- I believe it is about 97%. If you cannot achieve that kind of repayment, you are not likely to have repeat "investors." Without people coming back time and time again to reinvest in artists your Tune Your World will not be as likely to become a sustainable program. You need to help the musicians develop business models that will enable them to repay their micro investments.

Posted by Jeff Cornwall at 06:08 AM | Permalink | Comments (1)

In my third installment for ideablob.com Week at the Entrepreneurial Mind I chose to offer advice to the idea titled Helping Teachers PayOff Student Loans. Here is their idea:

I am currently working on starting a non-for-profit to help third-year teachers pay off student loans. Do you know that most teacher's loans are three times what they will make in one year as a first-year teacher? Do you know that teacher's annual increases do not even cover cost-of-living expenses? Do you know that most new teachers have to work a part-time job at night or on the weekends (and during the summer when they should be able to refresh and plan for the next year's class) just to make ends meet? That means many of them can't make the full commitment to the kids which is the reason they opted to get certified to and take a lower paying job to begin with.

Here is my advice:

You need to find start-up money from a foundation that supports education. Do some searches to see which foundations give money in that space. Foundations always have detailed information of specifically what they will and won't give to, and often include a list of previous grants that they have awarded. You can find all of this on their websites. I would suggest you use the $10,000 as seed money to develop a strong grant proposal that meets their criteria. Hire a grant writing specialist as a consultant to help attract the big money you will need for this program.

Also, think about setting up an endowment with the gifts you receive. Donors like a gift that keeps on giving. By setting up the donations in an endowment you only use the earnings from the gifts each year to pay out to teachers.

I would make a giving the awards to teachers a competitive process. Develop criteria, such as community service or their engagement with students beyond the classroom, as how you evaluate each teacher's application.

Posted by Jeff Cornwall at 05:45 AM | Permalink

The second idea that I am commenting on from ideablob.com is College Connection Website - One stop location for all college students to find entertainment, events, and employment in their region:

The proposed website would effectively connect college students in a particular region, in this first case the greater Harrisburg metro area, alerting them to the best entertainment, events, discounts, internships, job openings, things to do, and places to see in the region. Part of the initiative also includes a student comprised team in charge of facilitating monthly events that will allow students from all participating schools to interact, network, and get connected to the Harrisburg area. The initiative is specifically targeting the brain drain in the region, facilitating student engagement and personal connection to the area so that they'll be more inclined to stay after graduation.

My advice:

My question to you is this a simple one. Where is the revenue stream?

An opportunity needs not only a market need, which you have addressed, but the ability to generate cash flow to support the costs and earn a profit (or if it is a social venture, build a reserve fund).

I am not saying that there is no possible revenue stream. I just don't see that you have thought about that part of the idea.

The registration fees and money from student government suggested by the previous comment is possible, but I doubt that this would amount to much. Who would pay to support this site? Advertisers? Maybe, but they to see the likelihood of volume and the right people coming to the site.

Posted by Jeff Cornwall at 11:19 AM | Permalink

You might have thought this was Small Business Week -- however, it is really ideablob.com Week here at the Entrepreneurial Mind. They have asked me to be the guest advisor for the week. I will be posting some of the ideas from ideablob.com along with my advice.

Here is my first installment.

The idea:

My fiancee and I were in a national student organization event in Atlanta when we joined the Entrepreneurial Challenge. We came up with The Hummus House. Our slogan was 'Hummus where the heart is'. Essentially it would be a restaurant that produced and sold a large variety of hummus flavor, bread/pita, chips, and for non-hummus enthusiasts we could sell salsa, chips, sandwiches, and salads. We would also provide a list of wines or drinks that would compliment the flavors of the hummus. The restaurant would have graffiti on the walls, local artists paintings mounted on the walls, warm lighting and a welcoming atmosphere with local bands/musicians performing.

My Advice:

There is a reason that bankers run screaming from restaurants -- they have high failure rates.

That being said, it always amazes me how well certain niche restaurants can do in the market. Before launching this concept, make sure that the market is big enough and passionate enough to support this very specific niche.

You need to find a location that has enough people passionate enough about hummus -- sorry that ain't me -- so that you can sustain enough traffic to make this concept work.

Know that any niche restaurant may end up being a fad. Keep your debt low and your lease short-term so if the passion for hummus passes, you can ease out of the business with little residual financial burden.

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

Entrepreneur.com predicts ten businesses that will go the way of buggy whip manufacturers:

- Record stores: My students would agree, They have already transitioned our campus-based business that was a record store into a "dorm store"

- Camera film manufacturing: there goes my Instamatic

- Crop dusters

- Gay bars

- Newspapers:Can blogs be next??

- Pay phones: When was the last time you actually saw one?

- Used bookstores: Does that mean that students will also stop reselling my textbooks?

- Piggy banks

- Telemarketing: Yeah, right....

- Coin-operated arcades

Can you think of any you want to add?

Posted by Jeff Cornwall at 05:14 AM | Permalink | Comments (6)

Well I found her in a pawnshop
somewhere up in Ohio
where I guess some rounder came up short
and he had to let her go
It cost me ninety dollars
but it's worth much more by far
cause I never had a better friend
than that old beat up guitar
Jerry Jeff Walker

This old Jerry Jeff Walker song has always had a soft spot in my heart as it reminds me of my guitar. I have a 1961 Gibson J-45 acoustic guitar. Although I did not find her in a pawn shop, I did buy her used in the early 1970s from a used musical instrument store. (And it was not actually in Ohio, but Fond du Lac, Wisconsin). But, I digress...

It looks like this:

It is the only guitar I have ever owned. I have never wanted to replace her in large part because her sound has gotten richer and richer over the years. The older it gets, the better it sounds. A new product has been developed by a couple of entrepreneurs out of Florida that might change my thinking. I first heard about it when a colleague of mine attended a business plan competition in California with one of our students. The company is called ToneRite, and it rapidly speeds up the "aging" process of musical instruments to create an old sound out of relatively new instruments. Cool idea!

Posted by Jeff Cornwall at 09:30 AM | Permalink | Comments (1)

My son sent me a link to a golfing blog site that talks about new bio-degradable golf balls for use on cruises:

The original balls were made of rawhide, but the material's hardness was caving in people's expensive drivers. Now, the balls are made mostly of polyvinyl alcohol, or PVA (think Elmer's Glue), which has some elasticity. [Company founder Todd] Baker says the balls are pretty lifelike when hit with wedges and other lofted irons, but admits they only travel a little more than half the distance of a person's typical driver shot. Hey, you can't have everything.

More importantly, when submerged in water, the balls break down in three to five days into non-toxic elements, carbon dioxide and water.

The company is Eco Golf Balls, located in Indianapolis.

The company website has a page dedicated to their golf balls being used in the Antarctic.

Posted by Jeff Cornwall at 09:14 AM | Permalink

Yet another Belmont student has put his idea in the mix for ideablob. This month's entrant is Lee Turley and his new business called TheSilverStreets.com:

TheSilverStreets.com is a social networking site that is aimed at providing a central, national location for automotive enthusiasts to host a personal page, meet other enthusiasts, and network at no cost. It aims to solve the huge communication and organizational barriers in the automotive community. All the while using its position to make changes in communities through local involvement and high ethical standards. It's more than a website!

Please go to ideablob.com and vote for Lee!!

Posted by Jeff Cornwall at 01:40 PM | Permalink

The cover article for Entrepreneur magazine this month looks at the "people, trends and events that matter most for your business." They call them "the influencers."

In the hustle and bustle of starting a growing a business we can lose sight of the big picture. The trends and changes that created the opportunity for the business in the first place can just as quickly take away our economic advantage.

While I am not sure I agree with all of their choices for the top 25, it is worth a read and some careful reflection. Opportunities in the dynamic world in which we live can be quite fleeting.

Posted by Jeff Cornwall at 12:49 PM | Permalink

Three of the eight finalists in this month's ideablob competition for the best idea are Belmont students offering up social ventures. The winner will receive $10,000 from Avanta to help develop their venture.

Here are Belmont's three finalists (in alphabetical order of the student's name):

Noah Curran's Turning Actions into Good (winner of "Sprint 1") is a web-based non-profit charity which revolves around the kindness of strangers. The concept allows anyone to participate in a charity, regardless of financial status. Here is how the process works: Become a free member. Print off pre-made TAG-cards. Commit an act of kindness. Give the person a TAG-card which asks the stranger to do another act of kindness and go to the website to report about the deed that was done to them. After submitted, viewers can vote for the most touching act of the month. The leading vote getter would receive a cash prize.

Janice Dotti (winner of "Sprint 1") wants to create a completely fair trade, completely organic coffeehouse that sponsors social justice causes while taking care with the environment. In addition to serving fair trade coffee, she will also only use fair trade sugar, tea, and cocoa as we educate our consumers on how their buying habits affect the working poor in developing countries. Every month, this coffeehouse would sponsor a social justice cause--promoting awareness to customers about worldwide issues of injustice. This coffeehouse will also have free wifi, live music, local art--all with a community emphasis.

Finally, Megan Lopez (winner of "Sprint 3") presents an idea to create an informational website about how to raise your child naturally. From recipes to exercise programs to do with your children. Childhood obesity is a growing epidemic in our country today. We need to instill habits in our children starting at birth, so they can maintain and carry them through for the rest of their lives. Organic Baby will be a tool for parents to use as a community blog, buy organic clothing and bedding merchandise, research the benefits of healthy organic foods, etc. She would later like to own her own baby organic clothing line.

Please go to ideablob and vote for our three finalists in this month's best idea contest! You can vote for more than one idea, but you can only vote for each idea one time.

Posted by Jeff Cornwall at 07:09 AM | Permalink

Bill Hobbs sent along a great story that illustrates one of the most important lessons an aspiring entrepreneur can learn. It is the importance of finding a business that satisfies both the entrepreneur's needs with a true market need that is backed up by hard data.

From Latina Lista:

Carrie Ferguson Weir spent all of her professional life asking the hard questions. As a daily newspaper journalist, this Cuban-American Latina was accustomed to asking the kinds of questions that force honest responses.

However, it wasn't until she had her own daughter and found herself wrestling with the age-old "working mother dilemma" of either returning to work after maternity leave or being a stay-at-home mom that Carrie found herself on the receiving end of her own interrogation.

What could she do that would give her the freedom to be a stay-at-home mom and a successful businesswoman?

..."The idea came as a lightening bolt out of nowhere," Carrie said. "I believe in those messages. The research that followed backed up the hunch."

What Carrie had noticed was a gap in the baby t-shirt business when it came to exhibiting proud Latino roots.

Posted by Jeff Cornwall at 09:36 AM | Permalink

Megan Lopez is the latest Belmont Social Entrepreneur to throw her hat in the ideablob ring.

An informational website about how to raise your child naturally. From recipes to exercise programs to do with your children. Childhood obesity is a growing epidemic in our country today. We need to instill habits in our children starting at birth, so they can maintain and carry them through for the rest of their lives. Organic Baby will be a tool for parents to use as a community blog, buy organic clothing and bedding merchandise, research the benefits of healthy organic foods, etc. I would later like to own my own baby organic clothing line.

Please go to ideablob and vote for Megan's idea! Even if you voted earlier this month this is a new heat and you can vote again! We hope to have three social entrepreneurs from Belmont in the finals this month!!

Posted by Jeff Cornwall at 10:29 AM | Permalink

Everyday Edisons, a PBS reality series chronicling modern inventors and the development of their inventions, announces its 2008 casting call schedule to be held in major cities throughout the nation in search of Season Three participants. The show considers all categories of invention, ranging from sketched ideas and simple concepts to detailed, patented designs and factory prototypes.

The Everyday Edisons panel of judges, including product development and patent law experts, will provide a forum for participants to present and demonstrate original ideas. The judges will select 10 to 12 inventors to be featured in the third season of Everyday Edisons, which chronicles the inventors as their concept is refined, produced, marketed and sold.

The remaining Everyday Edisons 2008 casting call schedule includes:
- SAN JOSE – February 16
- DALLAS – March 15
- CHICAGO – April 19
- NORTHEAST LOCATION TBA – May 17

Participants with factory prototypes or finished products will be reviewed by the judging panel, as well as representatives from major retailers, including Bed Bath & Beyond, Home Depot, QVC, PetSmart, Staples, The Sharper Image and buybuyBABY. Previous inventions featured on Everyday Edisons range from a convertible baby bag and kitchenware product to a family board game and construction tool.

Interested? Go to their web site here for more details.

Posted by Jeff Cornwall at 10:05 AM | Permalink

ideablob.com has narrowed the January contestants down to the final eight. If you have not heard of it before, think of ideablob.com as American Idol for entrepreneurs via the Internet. People post their ideas on the ideablob.com web site, and visitors vote for their favorite idea. The winner each month with the most votes gets $10,000 for their business.

As some of you know, one of our students here at Belmont, Andy Tabar, is a finalist this month. Andy is a junior, majoring in Entrepreneurship. He has been working on his web development company from his first day here at Belmont. Here is a link to his business web page.

There is now a new round of voting for the finals. Even iff you voted before, you cn now vote again in the finals. If you did not, please take a few minutes to go to their site, register, and VOTE FOR ANDY!!!! It is quick and easy.

Here is where you go to register and vote. If you have voted before, use your same user name and password. Andy’s business idea is titled “Expand my global tech company”.

If Andy wins the final round of voting, he will get $10,000 to help him grow his business!!

PLEASE help out Andy on this. Pass this along to friends and family. The more votes we can get, the better his chances to win. Every vote counts!!

Thanks!!!!!!!

Posted by Jeff Cornwall at 04:28 PM | Permalink

Each year Entrepreneur magazine lists its top 500 Franchises. Click here to see their listing for 2008.

Before you decide to get serious about starting a franchise, take a look at a post I wrote in 2004 about the pros and cons of buying a franchise.

Posted by Jeff Cornwall at 05:26 AM | Permalink

A social enterprise is the latest monthly $10,000 Ideablob winner.

Marci Bossow Schankweiler of North Wales, PA is President and founder of Crossing the Finish Line (CFL), a Blue Bell, PA-based non-profit organization that provides excursions for young adult cancer patients and their families. Schankweiler founded CFL after her first husband passed away from cancer at the age of 30. She plans to use the prize money to help fund a home for cancer patients near Orlando, FL.

Ideablob.com is an on-line community where small business owners and entrepreneurs are sharing business ideas in exchange for feedback, advice and votes from the community. The monthly prizes are sponsored by Advanta, one of the nation’s largest credit card issuers (through Advanta Bank Corp.) in the small business market.

"We are thrilled that the ideablob community picked a non-profit as this month’s winner," said Ami Kassar, Advanta's Chief Innovation Officer. "There are more than 1.5 million non-profit organizations in the United States, most of which are small and face the same daily struggles for survival as millions of small businesses."

"We've been talking about securing a home near Orlando for a while and when I heard about ideablob.com I thought I'd put the idea out there," explains Schankweiler. "There's such a demand to provide young patients a respite from the traumas associated with cancer. Thanks to the support of the ideablob community, we now have the money to provide additional assistance."

Go to ideablob.com to put your idea into the mix and to vote on this month's ideas.

Posted by Jeff Cornwall at 07:45 AM | Permalink

Whenever I talk with journalists about my blogging I feel uncomfortable. I do not at all consider what I do as being "journalism" as I have known it all of my life. But, many of them tell me that by blogging for as long and consistently as I have been I have become part of an entrepreneurial movement that is transforming the industry of journalism.

I have written about this type of phenomenon before as it relates to the music industry and retailing. I also experienced it being an entrepreneur in the health care industry during the early days of its transformation in the 1980s and 1990s. Entrepreneurial activity in an established industry that is dominated by giant corporations is often referred to as being like "little mammals dancing under the feet of dinosaurs."

Saulo Hansell at the New York Times blog (imagine that -- the New York Times now has a blog!!) reflects on the entrepreneurial undercurrents in journalism today at this post.

Every now and then, I meet someone idealistic and perhaps foolish enough to want to embark on a career in journalism. Until recently, my advice was largely the same as anyone had given for many decades: Find a gig where you can write -- a small town paper, freelancing for an alternative weekly, a business trade publication (my route). If you're good, the story went, you would find you way to bigger publications and forge a career.

Today, it's hard to give that advice, when the economic underpinnings of all those places you were supposed to be trying to work for are so shaky. Is there any good advice other than to learn how to trade mortgage-backed securities? I'm not sure that that opening an account on Blogger and hoping for the best will pay the rent.

Maybe not, but I don't think that taking an entry level job at a newspaper owned by a national holding company has a much brighter future....

(Thanks to Ben Cunningham for passing this idea along).

Posted by Jeff Cornwall at 09:37 AM | Permalink

There are eight ideas vying for this month's $10K prize at ideablob. Today is the last day to vote!

Kemper Barkhurst, Albuquerque, NM
Kemper is a 26-year-old multimedia designer and developer. His idea, Urban Harvesting, is to collect and distribute local foods to local markets, thereby eliminating wasted fruit that local homeowners cannot collect, store or distribute.

Nicole Brooks, Riverview, FL
21-year-old, Nicole is a single mom and student. Her idea is PeekYourBoo.com, a secure system that allows parents to log in and watch their children while they are at daycare.

Susan di Rende, Los Angeles, CA
Susan is an independent filmmaker. Her idea is to expand and grow the Broad Humor Film Festival, which celebrates comedies written and directed by women.

Sherrie Gossett, Fairfax Station, VA
Sherrie is the managing editor of a new politics and culture magazine. Her idea is to develop news webcasts that allow the audience to become active participants.

Collin LaHay, St. Louis Park, MN
Collin is an 18-year-old student, internet marketer and entrepreneur. His idea is to develop rssHugger.com, which helps bloggers promote their blogs and helps visitors discover new blogs about subjects they are interested in.

Geoffrey Ravenhill, Islesford, ME and Palos Verdes, CA
Geoffrey is a 30-year-old marine biologist and co-founder of a non-profit organization for kids. His idea is to develop an online community where people can post their dreams, develop a game plan for accomplishing them, and receive feedback from other dreamers.

Marci Schankweiler, North Wales, PA
Marci, 39, is the founder of a non-profit organization that provides excursions for young adult cancer patients. Her idea is to purchase a home near Orlando, FL that can be used by cancer patients and bring joy to families in turmoil.

Vaughan Woodruff, Bozeman, MT
Vaughan is a 32-year-old educator. His idea is to develop PLACE, a non-profit organization that will assist American Indians in gaining power over their lands.

Posted by Jeff Cornwall at 08:51 AM | Permalink

Entrepreneurs often miss market disruptions once they're in business, and today, disruptions are everywhere. "There is no safe industry," says Jeff Cornwall, director of the Center for Entrepreneurship at Belmont University. "We can't assume we're going to find a safe little niche to operate in."

This is from an article that Chris Penttila wrote for this month's Entrepreneur magazine about industry disruption.

Change creates most of the opportunities that drive the 50% of our economy in the hands of entrepreneurs. And that process of change doesn't stop once we open the doors to our new business. Change and industry disruption are a given in almost every corner of our economy. We live in an age that Peter Vaill once described as "permanent white water."

While change and disruption are the fuels that drive entrepreneurial opportunity, they can also sew the seeds of failure for entrepreneurs who do not recognize that they have to keep moving.

Entrepreneurs should think of themselves as sharks -- if they stop swimming forward, they will drown.

Posted by Jeff Cornwall at 07:27 AM | Permalink

I came across a site that if you have not visited, you need to. It is called Ideablob. One recent visitor called it a place for idea junkies. Each month people submit their ideas for new businesses. Visitors to the site then get to vote on the best idea for that month. Think of it as Survivor meets the elevator pitch. Each monthly winner gets a $10,000 check to help with their business idea.

The site is funded and sponsored by Avanta. They are being very low key about their connection, however. Marketing of the site has been solely through viral means to this point, such as Facebook, blogs, etc.

Posted by Jeff Cornwall at 02:01 PM | Permalink

There are millions of Americans running businesses from home. A recent SBA report estimated that 52% of all registered American businesses are home-based. Are you ready to end your commute and work from home? Need an idea or some inspiration on what kind of home-based business you might be able to start? StartupNation has posted their Home-based 100 ranking, which shows the creativity and innovation that is going on in kitchens, garages, basements, and bedrooms all across the US.

The list is broken into several categories, including the best financial performers, the most innovative, the yummiest, and "boomers back in business." One of my favorites is from the Wackiest category. OK, maybe it is because it is from right here in Nashville and it involves dogs, but it is certainly fun and creative. The business is called Nashville Lappy Hour:

The venue, more often than not, is a local Nashville watering hole. Clough provides a way for dog lovers to meet other dog lovers in an environment that’s more fun than a dog park or a training class. The variety of sizes and breeds that attend provide plenty of entertainment, along with plenty of comedy, kisses and drool. Call it Barktoberfest.

Thanks to fellow Nashville blogger Ben Cunningham for passing this one along!

Posted by Jeff Cornwall at 06:46 AM | Permalink | Comments (1)

Want to find your next opportunity? Look to the future and spot the next big change. After all, change creates disruptions and gaps in markets, and it is these gaps and disruptions that create some of the best opportunity. After that it is all a matter of timing and execution.

I love the fact that my father and his partners (octogenarians all) still keep their eyes off into the horizon. Dad sent along a copy of Futurists "Top 10 Forecasts for 2008 and Beyond." (You can order their full report as a pdf download here).

Here is a summary of their top ten:

1. The world will have a billion millionaires by 2025.

2. Fashion will go wired as technologies and tastes converge to revolutionize the textile industry.

3. The threat of another cold war with China, Russia, or both could replace terrorism as the chief foreign-policy concern of the United States.

4. Counterfeiting of currency will proliferate, driving the move toward a cashless society.

5. The earth is on the verge of a significant extinction event.

6. Water will be in the twenty-first century what oil was in the twentieth century.

7. World population by 2050 may grow larger than previously expected, due in part to healthier, longer-living people.

8. The number of Africans imperiled by floods will grow 70-fold by 2080.

9. Rising prices for natural resources could lead to a full-scale rush to develop the Arctic.

10. More decisions will be made by nonhuman entities.

More wealth, more people, less water to drink, no cash, and a scarier world. All of these will be creating opportunities for traditional entrepreneurs. But, they will also call upon a greater role of social entrepreneurs as governments are increasingly showing their inability and even incompetence in dealing with many of our problems.

Posted by Jeff Cornwall at 08:05 AM | Permalink

For years the music industry made its money primarily through the creation of a physical product -- first the record and then the CD. But with the evolution of the digital age, the physical nature of music is fast becoming obsolete. Just at vinyl records hold nostalgic value, soon CDs will be a novel relic of a bygone era.

So is this the death of the music industry? Of course not. Music has been written, performed, and enjoyed for centuries. Music is part of culture. In many ways music as a business is thriving more than ever before. It is a period of fundamental change for this industry.

Those who have a vested interest in the current system of packaging and distribution (that is, the CD) are hurting in a big way. Like many large businesses in a rapidly changing environment, they are stuck. They are the proverbial super tanker that can't change course quickly enough to avert disaster. They are stuck due to their capital and intellectual investments.

So these big companies react to change like we often see in other industries under going fundamental change. Rather than adapt, they attack the change. They try to hold back the forces of change like the little Dutch boy with his finger in the dam trying to hold back the impending flood. How do they respond to the digital age of music? Do they shift their corporate strategy and change their business model to maintain their relevance and competitiveness? No. They sue 14 year old girls for downloading music.

So how will money be made in the new digital era of music? From a post at TechCrunch:

First, other revenue sources can and will be exploited, particularly live music, merchandise and limited edition physical copies of music. The signs are already there - the live music industry is booming this year, and Radiohead is releasing a special edition box set of their new album...simultaneous to the release of their "free" digital album.

Second, artists and labels will stop thinking of digital music as a source of revenue and start thinking about it as a way to market their real products. Users will be encouraged (even paid, as radio stations are today) to download, listen to and share music. Passionate users who download music from the Internet and share it with others will become the most important customers, not targets for ridiculous lawsuits.

Just as in an industry that is undergoing fundamental change, there are opportunities. It just takes open minds, creative thinking, and entrepreneurial nimbleness to find them.

(Thanks to Andy Tabar for passing this link along).

Posted by Jeff Cornwall at 05:58 AM | Permalink | Comments (3)

In this week's column at the Tennessean, I write about finding the right business to start.

The best business opportunities come from things people already know something about. They come from work experiences, hobbies and everyday lives. Find something from your experiences that is also a need for others. If you are lucky, it may be a niche that nobody has discovered. Or there may be competition, but existing businesses are not meeting the need of customers in that market. Either way, solving problems that you understand is the best path for a first business venture.

Don't overthink ideas. Just like Dorothy in The Wizard of Oz discovering how to get back to Kansas; the answer was right in front of her all along. And so are the best business ideas.

I also highlight the importance of passion, income and lifestyle in choosing the right business to start.

Posted by Jeff Cornwall at 05:48 AM | Permalink

Oregon politicians seem to have an ambitious agenda to expand socialized entrepreneurship (this is what I call government funded and government directed entrepreneurship initiatives for any new readers). From the National Dialogue on Entrepreneurship:

The new Oregon Innovation Plan focuses on supporting place-based innovation capacity. It proposes to spend roughly $38 million to support initiatives in three areas: enhancing the competitiveness of existing industry, improving technology commercialization, and increasing the state’s overall capacity for innovation. Among the Plan’s specific recommendations are the creation of new angel networks across Oregon; the opening of new research centers for wave energy technology, nanotechnology, and drug discovery; and extensive new efforts to support existing firms in the manufacturing, food production, and seafood industries.

This is bad policy. The best thing the state of Oregon could do to increase innovation and entrepreneurship is to simplify and reduce taxes, and cut any regulations that are getting in the way of small business formation and growth. Use the $38 million to cut taxes. Also, angel investment networks don't need the government's help in getting started. Freeing up the market will spur business creation, which in turn attracts investment money. Finally, the worst part of this new policy initiative is to have politicians and bureaucrats pick winning industries. That is what free markets do best.

Posted by Jeff Cornwall at 03:35 PM | Permalink | Comments (3)

I wrote a post in 2005 about the boom in the pet industry and the opportunities it was creating for entrepreneurs. It seems that our obsession with our furry companions has not slowed down a bit. Last week's cover story in Business Week offered this example:

If there's still any doubt whether the pampering of pets is getting out of hand, the debate should be settled once and for all by Neuticles, a patented testicular implant that sells for up to $919 a pair. The idea, says inventor Gregg A. Miller, is to "let people restore their pets to anatomical preciseness" after neutering, thereby allowing them to retain their natural look and self-esteem. "People thought I was crazy when I started 13 years ago," says the Oak Grove (Mo.) entrepreneur. But he has since sold more than 240,000 pairs (a few of which went on prairie dogs, water buffalo, and monkeys).

Sorry boys, but not for you....

Keb and Delbert

Posted by Jeff Cornwall at 05:00 PM | Permalink

As I have written many times, not every great idea is good business opportunity. That is why I believe that the single most important skill I can teach aspiring entrepreneurs is how to evaluate an idea and assess its promise as a viable business (most recently in a column I wrote for the Tennessean).

There is an article at Forbes by Wil Schroter that reinforces this point:

A while ago, you had an idea for a new company that would change the world. You stayed up all night feverishly sketching your plans for global domination.

Yet there you are, months later, still sitting in your cubicle, that brilliant flash a distant memory.

Wake up: Not every idea -- even a great one -- turns into a money machine. In fact, it's often just as useful to know when to dump a good idea as it is to pursue one -- if only so you can get to work on that next "great" idea.

He goes on to give advice that is consistent with my mantra on this: market, margin and me. All three have to work for an idea to really have a chance to make it as a business.

(Thanks to Matthew Nicholson for passing this along).

Posted by Jeff Cornwall at 07:50 AM | Permalink

My column this past Sunday in the Tennessean was on the best approach to evaluating ideas to see if they are true business opportunities.

A key skill that successful entrepreneurs learn is to assess possible opportunities more efficiently and quickly before they make an extensive commitment of time and money to launch the business or even to develop a full business plan.

This process allows entrepreneurs to weed out ideas that are doomed to fail before they even begin.

You can read the column here.

Posted by Jeff Cornwall at 09:56 AM | Permalink

A couple of new reports out give some insight into the hot regions for entrepreneurs and the hot markets that VCs are beginning to bet on for the future.

Knowledge@Wharton looks at some of the hot markets of the future. Energy, water, personalized healthcare, and biotech are all on the watch list.

For hot cities, check out the newest ranking of 2007 Entrepreneurial Boomtowns from Inc. St. George (UT), Yuma (AZ), Prescott (AZ), Fort Myers (FL), McAllen (TX), Naples (FL), Las Vegas (NV), Sarasota (FL), Morgantown (WV), and Bend (OR) top their list this year.

(from National Dialogue on Entrepreneurship).

Posted by Jeff Cornwall at 01:28 PM | Permalink

The best sources of ideas for businesses comes from your experiences and interests. Many great businesses have been built out of hobbies and other passions. Often these businesses start very small, as what some call "lifestyle" businesses that eventually create a little income. Over time, the entrepreneur is able to transition from a few evenings and weekends to a full-time business.

But now our friends at the IRS are throwing a kink in this cool way to become economically independent. From StartupJournal:

The Internal Revenue Service is stepping up efforts to prevent taxpayers from deducting losses on activities that aren't genuine businesses run to make a profit. The problem: It's not so easy to tell a budding business from a hobby.

Officials say new research shows taxpayer errors in this area are costing the government billions of dollars a year in unpaid taxes. Thus, auditors are "on the lookout" for people trying to deduct losses from hobbies, an IRS spokesman says. To underscore the agency's concern, the IRS recently issued a fact sheet the spokesman says is aimed at "making sure that taxpayers know and abide by the rules."

Sure.... We should all expect some poor person turning their craft or hobby into a business to know the over 60,000 pages of "rules" that are the IRS code.

The story goes on to illustrates this point:

But how are you supposed to figure out whether your activity qualifies as a genuine for-profit business? That can be exceptionally tricky. The IRS says you should consider several factors, such as: Does the time and effort put into the activity indicate you intend to make a profit? Do you and your advisers have the knowledge needed to carry on the activity as a successful business?

Another factor is whether you have made a profit in the past. The IRS says it "presumes" an activity is indeed carried on for profit if you have made a profit during at least three of the past five tax years, including the current year. (The rule is different -- at least two of the past seven years -- for activities that consist primarily of breeding, showing, training or racing horses.)

The IRS has some handy "tips" at their website and there is more information at WorldWideWeb Tax.

Since a part-time business rarely can afford strong outside tax advice, the key is to be cautions and realistic on how you approach your business and make sure to keep very good records. Don't mix expenses and revenues that may create red flags. And keep good records, including a separate checking account for your fledgling business venture.

Posted by Jeff Cornwall at 05:57 AM | Permalink | Comments (1)

We are just beginning to see what intriguing opportunities may be around the corner thanks to Web 2.0. I have seen many of them popping up at business plan competitions. A couple of new examples of collaborative services, which are a big part of Web 2.0 activity, have recently come across my desk.

One is called Huddle, which came to me thanks to Natalie Wozniak (an alumna from my University of St. Thomas days) via PSFK:

Huddle has been targeting freelancers, small marketing and creative agencies as well as law firms.

A really interesting fact is that they did not built the app inhouse but managed to bond with a partner and have it developed within four months which is quite unusual for a Web 2.0 startup. But we learned that it works rather well for them and they even managed to receive funding from an angel investor. Huddle now has around 1,500 users from 250 companies.

Huddle is an application that seems to fit perfectly into a business world were constantly changing teams and long-distance collaborations are getting more and more common.

The other is called PartnerUp, was just launched within the last few weeks. From Mike Anderson, Senior Information Architect:

PartnerUp is a free online service which helps entrepreneurs, small businesses, and people who have an idea or are interested in starting a business find business partners, advisors, board members, executives, and skilled professionals. And, the web site helps those who are interested in getting involved in businesses find opportunities to get involved in the above capacities.

Basically, our goal is to help people who have ideas but need people with certain skills or experience find the people they need to make their idea a success.

What excites me about start-ups in the Web 2.0 space is that many of them have the promise to have both good revenues and healthy cash flows. Plus, they require much less start-up capital than most of their Internet ancestors.

Posted by Jeff Cornwall at 06:30 AM | Permalink

Entrepreneurial success can be greatly enhanced through good research. Having strong data and other information is critical for sound business planning. Kauffman's eVenturing has just release their latest collection of articles, this one dealing with Market Research and Competitive Analysis.

However, good research should never stop with the business plan during start-up.

Entrepreneurs should keep up to date on industry trends. Most opportunities come from change. But the very change that got you into a market can just as easily make you obsolete if you do not keep up with the continuous change that seems to be the norm for most markets today (see this post for more on this topic).

You need to be aware of your competitors and how they are trying to get your customer's business. There is always competition (see earlier post on this here), and you need to assume they are trying to improve their business and take away your market share.

And the key to understanding trends in the industry and competitive environments comes from a clear and honest understanding about what customers want and how well you are meeting their needs. Listen to your market!

So think of the ideas and tools from this collection as not just for start-ups, but for any business in a dynamic and competitive business.

Posted by Jeff Cornwall at 12:17 PM | Permalink | Comments (1)

Entrepreneur magazine has released their annual ranking of franchises for 2007. You can find it here.

I wrote a post last year on the pros and cons of buying a franchise. You can find that post here.

Posted by Jeff Cornwall at 09:48 AM | Permalink

I had no intention of having a theme week dealing with "when lightening strikes" stories about small businesses, but just could not resist one more story in this vein.

The pet food scare has created a boom in business for small pet food companies that manufacture all natural products.

From TwinCites.com:

In the month since the recall, Pet Chef Express [in the Twin Cities] added 150 accounts, increasing its customer base to 1,100 pet owners. The small business's typical weekly sales of $2,000 to $3,000 almost doubled in the past few weeks.

Kukla can barely keep his warehouse stocked. The 1,300-square-foot room sat more than half-empty Tuesday. To meet the demand, Pet Chef Express broke ground this week on a 2,100-square-foot warehouse in Lakeville.

So let's recap some of the lessons from the posts this week on what happens to small companies that have a sudden boom in demand:

- Publicity is one of the most powerful forms of bootstrap marketing for a small business. Just ask the folks at SeeMore Putter and Bamboo Comfort.

- But if you don't meet demand, the benefits of the publicity soon vanish, and you run the risk of alienating even your most loyal customers. This includes those from before your "fifteen minutes of fame."

- While meeting your new-found demand, you have to balance opportunism with realistic caution. I hope that demand for the pet food in today's example will continue. But this can never be assumed. Pet Chef Express must work deliberately to build loyalty from new customers who certainly came to them in some cases out of desperation. Their marketing plan must now include tactics to lock in their newly expanded customer base, and build on the sudden windfall that the national news story has brought to businesses like theirs.

Posted by Jeff Cornwall at 07:01 AM | Permalink

Once in a while lightening strikes a small business. That may be the case for a small putter manufacturer located right here in Franklin, Tennessee. It seems that Zack Johnson, winner of the Masters on Sunday, used a putter made by SeeMore Putter Co.

From the Tennessean:

The four-person company based in Franklin received some major publicity thanks to Zach Johnson's winning the Masters golf championship on Sunday in Augusta, Ga.

Johnson used a SeeMore putter to stiff-arm Tiger Woods and win the green jacket. Television commentators Nick Faldo and Jim Nantz constantly referred to Johnson's superb putting, and CBS routinely showed close-ups of the putter.

"We probably got way more free publicity than we could ever pay in advertising," said Jim Grundberg, managing director of SeeMore.

Grundberg said he was jumping around his Brentwood home with family Sunday during the action. Johnson's playing partner and good friend, Vaughn Taylor, also was using a SeeMore putter, used by only a handful of PGA Tour players.

So an unlikely winner teams up with a small-time player in the golf equipment industry and both hit it big. Cool story!

SeeMore needs to carefully nurture this publicity. They need to leverage it to build momentum for their company. They cannot just rely on their fifteen minutes of fame. They have done a great first step at their website, which is already full of the big news for their little company.

On the flip side, they also need to be ready for a possible onslaught of demand. If they do not monitor and manage their growth carefully, their own success could sink them. They do not meet demand and have the systems in place to satisfy what can be a fickle market.

I hope Zack and SeeMore make the most of their success and that both are around for a long time!

Posted by Jeff Cornwall at 07:28 AM | Permalink

MIT's Technology Review offered its Top 10 Emerging Technologies Trends for 2007 in an article from last week. This year's emerging trends includes:

- optical antennas -- a basic technology with potentially broad applications

- metamaterials -- another basic technology with potentially broad applications

- peer-to-peer video -- help save us from a bogged down Internet from the growth in video on the web

- personalized medical monitors -- can help to "simplify and improve medical diagnoses"

- compressive sensing -- "revamp digital imaging systems in cameras and medical scanners"

- nanohealing -- nanotechnology application for medicine

- quantum-dot solar power -- nanotechnology application for solar power

- neuron control -- might "help physicians fine-tune treatments for brain disorders such as depression and Parkinson's disease"

- single-cell analysis -- could "lead directly to predictive tests that could help doctors treat cancers more effectively"

- mobile augmented reality -- combines "location sensors and advanced visual algorithms with cell phones...to help us figure our where we are"

(From the National Dialogue on Entrepreneurship).

Posted by Jeff Cornwall at 08:05 AM | Permalink | Comments (1)

There are a variety of tools readily available on the Internet that aspiring entrepreneurs can use in developing new business ideas. Here are a couple of ideas:

Want to find some cool technology gathering dust on a shelf at a university somewhere? Try out the iBridge site developed by the Kauffman Foundation.

University researchers, industry representatives, and entrepreneurs can use the iBridge website to search for innovations that, until now, have been lost and untapped behind university walls. With more than 700 research projects listed, the iBridge website is fast becoming a place for researchers and technology transfer officers to post research from their universities, as well as the place to go to find research occurring at other institutions. The website is designed to ease the transaction burden on university technology transfer offices, and encourage more open and efficient access to innovations of interest to entrepreneurs and industry representatives alike.

Have an idea for an Internet business, but finding it hard to know what your potential customer is thinking about? Try using one of the tools set up to optimize keyword searches. I heard about this creative use of a free tool on this morning's Wall Street Journal radio show. These tools are set up to help in Internet marketing by showing what key words are being used most often. (Here and here are a couple of examples).

Assume I was setting up an Internet golf equipment store. By typing in keywords like "putter" or "golf balls", I can find out what brands are getting the most searches on the Internet. Or assume I am thinking about selling laptop cases on the Internet. I see that in the month of December 1724 searched for laptop cases with the word "pink" in their search, while only 77 included the word purple. That gives me a clue on what color to carry in my inventory.

These tools can help me see the potential size of the market, what brands and related products are most popular in searches, and even what colors and features I should carry. It is a great tool to first get a feel for how much Internet traffic is possible and to learn more specifically what these potential customers are thinking about.

These tools are set up for web search optimization, but they can also be used to get the pulse of the market. For simple searches like this, most of these sites are free to use. While active web marketers are very familiar with these tools, they can be very helpful for any entrepreneur wanting to get more data about their potential market. If I can figure out how to use them with my limited technical skills and general fear of technology, anyone can!

Posted by Jeff Cornwall at 05:35 AM | Permalink | Comments (4)

There has been a lot written over the past month on Jeff Bezos' plans for Amazon. As Bezos explained to Business Week when he first unveiled his plan, he wants to transform Amazon the on line store into Amazon the engine of the entrepreneurial economy.

Bezos wants Amazon to run your business, at least the messy technical and logistical parts of it, using those same technologies and operations that power his $10 billion online store. In the process, Bezos aims to transform Amazon into a kind of 21st century digital utility. It's as if Wal-Mart Stores Inc. had decided to turn itself inside out, offering its industry-leading supply chain and logistics systems to any and all outsiders, even rival retailers. Except Amazon is starting to rent out just about everything it uses to run its own business, from rack space in its 10 million square feet of warehouses worldwide to spare computing capacity on its thousands of servers, data storage on its disk drives, and even some of the millions of lines of software code it has written to coordinate all that.

Here is how the Bezos plan was described in USA Today:

That's the future Amazon.com CEO Jeff Bezos hopes to set in motion with the company's new direction. If you tease out Bezos' plan, you get to a point where a high school cheerleader sitting at home with a laptop could theoretically harness computing power, design capabilities, manufacturing and distribution from around the world, and make and market a cute little pink hot rod that would compete against General Motors.

Now that the ink has dried on Bezos' plan, I'd like to offer my take on it. His assumptions show that he never learned one of the most important lessons of the dot.com disaster. He does not seem to understand that markets really matter. For example as Pets.com illustrated, just because you can sell dog food through the Internet it does not mean that there is a market for such a service.

Starting a successful business has two critical pieces. First you need a viable product or service that you can deliver. That is the part that Bezos is focusing on.

But second, you need a large enough market willing to spend enough to cover your costs and leave you a profit. The dot.com kids only worried about the first part and never paid much attention to generating sales and profits. Just because we can enable a "high school cheerleader sitting at home with a laptop could theoretically harness computing power, design capabilities, manufacturing and distribution from around the world, and make and market a cute little pink hot rod that would compete against General Motors" does not mean there are customers for her product.

I hope we are not setting people up for even bigger failures by making part of the process so much easier. My fear is that it will encourage more people to ignore the customer part of the equation and start businesses that are doomed to fail.

Posted by Jeff Cornwall at 05:07 AM | Permalink | Comments (3)

It seems that biotechnology has gone from the hottest growth sector to yesterday's news in a blink of an eye. Offshoring seems to be the culprit. From SignOnSanDiego.com:

Increasingly, the venture capitalists who fund new life-science companies are shopping for existing drugs to refine instead of backing scientists to make discoveries. When startups are created, they're often minimally staffed. More drug companies are farming out research work to scientists in China, India and Eastern Europe, where tasks are done more cheaply.

For California, the birthplace of biotechnology, the stakes are high. Of the estimated 260,000 Californians who work in the life-science industry, about 70 percent are employed in high-paying jobs in drug, medical-device or diagnostic-tool companies. In San Diego, an estimated 36,600 employees work at about 500 companies, according to BIOCOM, the local biotech trade association.

Many of the highly touted biotech start-ups of a few years ago just did not pan out. And many of these, just like the dot.com's before them, had over-hyped their potential. I remember more than one investor talking about this biotech or that biotech being the next "Microsoft" investment. So as investors began to experience the reality of the risks in this industry, venture capitalists tied to that industry shifted their strategies.

In an effort to revive Wall Street interest, venture capitalists shifted to creating companies that develop late-stage products or existing drugs that can be revamped to treat other diseases.

Such companies don't require the big staffs or laboratories lavished on San Diego's pioneer biotechs, which often took a decade or more and spent hundreds of millions of dollars to get a novel drug to market. Instead, drug companies are stretching dollars by farming out tasks to U.S. contract research organizations or cheaper offshore companies.

America seems to be re-living the story of the hare and the tortoise over and over, never seeming to learn its lesson. Most of our economic growth is not coming from venture capital backed high potential firms. Although those deals get the headlines, their true impact on the economy is marginal. Even in the best of times, venture capitalists only pick about one real winner out of ten investments, and most only make about three investments a year. High potential deals do have their place in our economy. They can bring us breakthroughs that can shape markets of even create new industries. But they are not at the heart of this entrepreneurial economy.

Our economic growth is coming from small businesses that are prudently growing their businesses one job at a time, toward the goal of creating a sustainable venture that will build wealth over the long-term.

(Thanks to Jim Stefansic for passing this along).

Posted by Jeff Cornwall at 05:51 AM | Permalink | Comments (1)

When I first got back into teaching at the University of St Thomas I met a young man named Dan, one of our students, who had mastered the art of balancing seasonal businesses. While still in college, he had set up two businesses that took advantage of Minnesota's two seasons -- winter and summer (spring and fall don't last long enough to really call them true seasons). Summer is short, but beautiful, and with its long summer days (remember it is really far north up there) people make the most of the outdoors. On the St. Croix River, the wealthy residents had beautiful boats and yachts that they would take out every weekend. Dan had a business providing cleaning, basic servicing, and general maintenance on these boats. The owners loved Dan's services because he took care of all of the hassles that go along with boat ownership. They could just show up and take off in their boats for a day of fun in the sun. Business was so successful that Dan had hired several part-time employees.

In the winter, which some years lasts about eight months, Dan took advantage of the inevitable snow and built a very successful commercial snow plowing business, using some of the same workers and working with some of the same people who owned the yachts he took care of in the summer.

There are countless examples of entrepreneurs who balance one seasonal business with another. For example, the summer camp owner who turns her facilities into a retreat center the rest of the year, or the home builder who becomes a home re-modeler in the winter months.

I heard a report on Wall Street Journal radio this morning about another example. It seems that many entrepreneurs with lawn service businesses are also getting into the professional Christmas decorating business. Those of you who live in America's suburbs have seen the proliferation of ever expanding outdoor Christmas lights and decorations displays. Many suburbanites want the decor, but do not have the time or inclination to climb up on the roof to install the annual extravaganza of lights. Thus is born a new industry: professional outdoor holiday decorators. There is even a franchise available for those who want help in setting up this type of business called Christmas Decor.

The best way to approach off-setting seasonal businesses is to set up a second business that takes advantage of the skills and/or resources you already have on hand. In some cases, you can even serve the same customer base with both businesses.

Posted by Jeff Cornwall at 05:43 AM | Permalink | Comments (2)

Self-employment is now a major part of our entrepreneurial economy, now approaching almost 20 million Americans. Many of the self-employed are choosing to work from home due to family considerations. For example, self-employment allows more flexibility for parents with young children.

Homestead Technologies commissioned a study on home-based businesses and found the following as their list of "hot" opportunities that can be run from home:

E-Learning: With advances in new web application tools such as podcasts and video blogs, development costs will decrease.

E-Bay Aftermarket: Helping companies conduct market research, pricing strategies, shipping, and competitive analysis is a great niche business.

Children Arts Education: There is a major market for teachers of right-brained education who are thought to help foster the development of future innovators.

Garage Organizers: Just as organizing closets was the next big thing in the 80's, the messy garage is the final space to clean up.

Background Checks: Small businesses with limited resources are turning to background check companies to handle investigation and due diligence.

Pet Sitting: An ideal home-based business where you get paid to walk and enjoy the companionship of pets.

Specialized Coaching: The coaching market has boomed in the recent years including specialized areas such as life, spiritual, corporate, relationship and business.

Home-based Debt Collection: Debt has become a way of life for many Americans. Operating a low overhead home-based collection service can serve the niche sections of this market.

Specialized Outsourcing: The small business market has limited resources and a focus on core competencies. Specialized outsourcing from home to small business will have a solid position market position for years to come.

Scrap Booking: In today's easy to save and store digital age, opportunities abound for the home-based scrapbook artist, workshop teacher, or a direct sales rep.

Will you get rich with any of these ideas? Probably not. But, that is not the point for most who choose to run a home-based business. It is to earn income while enjoying the flexibility and freedom of running a small business from home.

Posted by Jeff Cornwall at 05:43 AM | Permalink

Universities are giant R&D departments dreaming up the "next big thing." The problem is, they are not very good at making the transition from ideas to market applications.

Many academics have no experience in the business world. They do not understand the difference between an interesting new idea and a real market opportunity. But, don't try to tell them that. Rather than truly partnering with the private sector to mine the wealth of new product applications, they set up rules and stipulations that keep many good opportunities locked away in their labs, and push many applications that are not ready or not truly viable into the market. They do this through their technology transfer policies and tight control by administrative and faculty committees.

Alfred Mann, inventor of the first insulin pump, wants to give hundreds of millions of dollars to universities with one simple condition. He wanted to the right to pick which ideas get funding based on the experience that he and his staff has had in launching new medical devices, rather than allow a committee of faculty and administrators to decide which should get funding with the money he donates to the university. So far, he has found no takers.

From Forbes.com:

Mann is puzzled by the rejections. As he sees it, universities should welcome his guidance since they typically do a bad job in commercializing their professors' inventions. Professors, he says, don't know how to turn their ideas into products. University patent offices have trouble finding industrial partners. He cites statistics showing that $37 billion in government and industry sponsored university research each year leads to only $1 billion in commercial licensing revenue, a paltry 2.7% return.

But universities say Mann wants too much control for too little money. Experts in technology transfer tend to agree. Robert Lowe, a professor of entrepreneurship at Carnegie Mellon University, who studies the topic, says that universities don't want a single entity to have first-look rights to option its inventions because it can interfere with academic freedom and amount to a giveaway.

If technology transfer is to be part of the engine that drives our emerging entrepreneurial economy, universities need to stop being arrogant and understand that those with market experience can help the common good by accelerating new products coming out of their ivory towers.

(Thanks to Jim Stefansic for passing this along).

Posted by Jeff Cornwall at 07:29 AM | Permalink | Comments (1)

Sometimes the best opportunities can come from old concepts that we take out of the proverbial attic and dust off. Here is an example of an idea posted at AOLnews from five decades ago that has gotten new life:

Before there was McDonald's, there was the Automat....Three young entrepreneurs are hoping to revive the tradition - with a few modern twists - when they open Bamn! Automat in the East Village this week.

In fact, their business concept is to take Automat and marry it with modern fast and convenience foods that today's under 30 crowd love to eat.

I wonder if there is a market for my old love beads.....

(Thanks to Matt Sells for passing this along).

Posted by Jeff Cornwall at 05:59 AM | Permalink | Comments (1)

The most common entry strategy for entrepreneurs is the market niche. In a niche strategy, the entrepreneur finds a small part of a market that is not being served or is significantly under-served. A niche strategy gives the entrepreneur a safer market with less competition and a more dependent market.

Generally, a niche strategy is a good way to enter the market for a new business. It usually takes fewer resources for the start-up, due to lower marketing costs and the ability to start on a smaller scale. Success rates tend to be higher for niche businesses since they have less direct competition. Without much competition, niche businesses can charge higher prices, which allows for quicker positive cash flow during start-up and better margins once profitable.

A blog site, NicheGeek, was passed along that looks at nothing but interesting niche markets. Reading what others do to find an protect niches is helpful in finding your own niche. It requires a different style of starting and growing a business.

Posted by Jeff Cornwall at 05:39 AM | Permalink

Do you find yourself suddenly unemployed? Are you so tired of your cubicle that it is time to move on before you lose your mind? Did a once in a life-time opportunity to launch a start-up just get plopped in your lap? Not all entrepreneurs end up as entrepreneurs as part of some grand plan or life-long dream. It may just be the events of everyday life that put you in that position.

Information Week recently ran a profile of several "accidental" entrepreneurs who started their businesses after life dealt them a twist, as it often does. They looked to their personal interests, their techie hobbies, to find new paths for their careers.

Posted by Jeff Cornwall at 08:25 AM | Permalink | Comments (7)

The Tennessean has a profile of Alison Brown, who traded a career as an investment banker for one as a bluegrass music entrepreneur.

"I worked with the kind of people who just wake up in the morning thinking about structures for bond refundings," said Brown, a Harvard University alumna and UCLA business school grad. "I'd wake up and think about when I was going to get to play the banjo again. And the two things were just mutually exclusive."

Rather than take the traditional path of trying to make it with one of the big labels in town, she decided to make her own path.

"If you have the money and the clout of a major label, you're in a better position to shove things down people's throats," she said, speaking as someone who had worked briefly at a major pop label. "Our approach is to find art that we think is great and then try to draw people to it."

This niche approach to the industry is gaining traction. She is one of many who are quietly changing the music industry right under the feet of the big three companies that now dominate.

Posted by Jeff Cornwall at 07:59 AM | Permalink

Find something that irritates a lot of people, and you have found a source of opportunity. From dailynews.com:

An Associated Press poll has found an impatient nation. To get to the point without further ado, it's a nation that gets antsy after five minutes on hold on the phone and 15 minutes max in a line. So say people in the survey...."If you ask the typical person, do you feel more time-poor or money-poor, the answer almost always is time-poor," says Paco Underhill, an authority on what draws and drives away shoppers.

Find a way to reduce people's wait time, for example by a new process or a new technology, and you may be on to a booming new business.

(Source: newsalert).

Posted by Jeff Cornwall at 07:25 AM | Permalink

Find something that irritates a lot of people, and you have found a source of opportunity. From dailynews.com:

An Associated Press poll has found an impatient nation. To get to the point without further ado, it's a nation that gets antsy after five minutes on hold on the phone and 15 minutes max in a line. So say people in the survey...."If you ask the typical person, do you feel more time-poor or money-poor, the answer almost always is time-poor," says Paco Underhill, an authority on what draws and drives away shoppers.

Find a way to reduce people's wait time, for example by a new process or a new technology, and you may be on to a booming new business.

(Source: newsalert).

Posted by Jeff Cornwall at 07:25 AM | Permalink

In times of rapid change it is often small businesses that find ways to adapt. My partner used to say we were little mammals dancing under the feet of dinosaurs when we were doing this in health care.

This time it is small Mom and Pop record stores. Red Herring reports that they may be part of a major development in the digital revolution in music.

The music industry on Monday signaled its intention to move past its pricing impasse with Apple's iTunes as Warner Music Group announced that it has made a deal with three retail groups to challenge the computer company's position as the digital music retail market leader.

Warner Music, the bellwether of the music industry, said its retail marketing company WEA is working with the Coalition of Independent Music Stores (CIMS), the Association of Independent Media Stores (AIMS), and the Music Monitor Network (MMN) to bring independent, brick-and-mortar retailers into the digital age.

These stores were already considered road kill on the information super highway by many in the industry. But they will now have the chance to play a role in the new age of music distribution.

WEA will offer the retail stores digital bundles, which will include additional content such as videos, bonus tracks, and interactive digital booklets. The company will also offer downloads of in-store performances, downloads from local artists, and coupon-based download promotions.

Posted by Jeff Cornwall at 05:27 AM | Permalink

As a Professor at a small Division I school I can't help but cheer for George Mason this weekend. As proud as we all are at Belmont just making the tournament this year, I can only imagine what the students, alumni, faculty and staff of George Mason must be feeling right now.

But, my colleague Dr. Larry Hall, Dean of our College of Arts and Science, passed along an article from Slate.com that will make me cheer even louder on Saturday as GMU plays Florida. It seems that both in their basketball and academic programs they are behaving in many ways like a smart entrepreneur.

Opportunity Recognition

GMU has excelled on the court and in the classroom by daring to be different. Its basketball team and academic programs began with the (correct) assumption that they couldn't hope to compete against the top schools in their fields--say, Harvard Law School or the Duke Blue Devils--by directly imitating their methods. GMU lacks the resources and reputation to recruit McDonald's All-Americans or Alan Dershowitzes. So instead, GMU has hunted for inefficiencies in its markets.

Bootstrapping

Coach Jim Larranaga follows the Moneyball model of recruitment: hunting for the undervalued players--the ones who everyone else thought were too short, too thin, or too fat--and then building them into a team. In its astonishing defeat of UConn, GMU's players were giving away 4 inches at nearly every position.

Exploiting Under-served Market Niches

From the 1960s into the 1980s, a small university such as GMU could hire conservative and free-market thinkers of true genius for the same kinds of reasons that, in the mid-1960s, a middling school like Texas Western University could recruit some of the best basketball players in the nation, so long as they were black, and win the 1966 NCAA championship. Conservative and free-market economists were so undervalued that GMU could afford the best of them.

So this free-market, entrepreneurial-minded professor from a small Division I school will be cheering like a mad fool for George Mason. Go Patriots!!!

Posted by Jeff Cornwall at 06:46 AM | Permalink

Time after time governments look to the private sector to bail them out of financial and performance failures that are a result of their own incompetence.

The No Child Left Behind legislation established performance standards for public education. Many of those schools that cannot meet these standards are looking to privately owned educational businesses to improve their performance. In Memphis, privately owned tutoring businesses have become a growth industry with the public school system becoming their biggest customer.

One irony of such privatization efforts is that the same government agencies that cannot perform in the first place, often serve in an oversight function over the private businesses they hired to pull their bacon out of the fire.

Posted by Jeff Cornwall at 06:38 AM | Permalink

StartupJournal has put together a get collection of material for any of you interested in franchising.

They start with basic research tips:

- Look into franchisee litigation (almost inevitable these days, so look for troubling patterns)

- Know what you are getting into when buying a franchise. The SBA has a good overview in their consumer's guide.

- Talk to existing franchisees, including as many as you can who own the franchises you are considering.

- Pay attention to the legal details, as these are the rules that will govern any and all disputes once you sign on the dotted line. The UFOC (required by law) is the key document, so read it and make sure you understand what it says.

- Some franchises may be eligible for financing through the SBA.

StartupJournal has some other helpful articles that cover the benefits of buying a franchise versus going it alone, the general pros and cons of franchising, evaluating your personality fit for franchising, and what it takes to succeed as a franchisee.

Beyond the contractual issues that arise in franchising, there are some fundamental business and personal concerns that many franchisees experience after it is too late.

One of the biggest sources of frustration among franchisees is that they perceive that the value added they get from association with their franchisor diminishes over time. A franchise will charge a significant monthly percentage fee (this can average about 7% of sales) associated with all that they offer in terms of systems, marketing, purchasing power, and so forth. Over time, many franchisors realize that they can be just if not more effective on their own without paying the monthly percentage of sales to the franchisor. This on-going monthly fee is often glossed over by franchisees during start-up planning, as they tend to think only about the initial fees and capital expenditures in their planning.

Another concern expressed by franchisees is that with all of the rules and standardized procedures, they tend to feel more like an employee than a business owner. Those who try to break away from the predetermined model and processes can face the wrath of the franchisor. Larger franchisors have entire staff dedicated to franchisee compliance.

A financial risk to consider is that many first time entrepreneurs can only afford newer franchised concepts, since well established franchises can cost hundreds of thousands of dollars to buy in. These start-up franchisors can begin to experience their own growing pains. Some don't survive. In some cases they may take the franchisees down with them.

It is critical to understand all of the ins and outs of franchising as a general business strategy first. Then if the idea of a buying a franchise still makes sense, do your homework on the company and its concept. All franchise opportunities are not created equal.

Posted by Jeff Cornwall at 05:44 AM | Permalink

Scientists are envisioning a day in the not too distant future when the retirement age might have to move from 65 to 85. It seems that anti-aging drugs are a real possibility. From Red Herring:

But drugs that prevent aging itself are on the distant horizon, and with them could come dramatic social changes, such as much later ages for everything from puberty to retirement, and massive inequality in life expectancy between those who can afford the life-lengthening compounds, and those who can't. These changes, in turn, would have a significant impact on the global economy.

I guess they would! First, the idea generating part of my brain has kicked into high gear thinking about all of the new businesses that would come out of such a change. But then I started to think about all of the deadbeats who can't even manage to save for the longevity we now enjoy. Does that mean we have to fund social security to cover these people for 40, 50 or even 60 years???

Posted by Jeff Cornwall at 05:27 AM | Permalink

Anybody who buys roses for St. Valentine's Day tomorrow knows that it is one of the busiest days of the year for florists. If you have any doubt, you can observe the power of supply and demand on the price of a dozen roses. And candy stores and card shops are equally happy to see St. Valentine's Day arrive. But, private detectives???

According to this story at StartupJournal it appears to be the case:

Art League...had been trying for weeks to catch a client's husband cheating, but it wasn't until Feb. 14 that the evidence surfaced. After tailing the man to an office parking lot, Mr. League spied him placing a card on another car before driving away. Mr. League swiped the card -- which was festooned with hearts and professed true love -- and surreptitiously videotaped the woman who later showed up frantically looking for it. He presented the card and the video to his client, and the case was closed.

"It's a good holiday for business," Mr. League says. The Greensboro, N.C., gumshoe has already scheduled five infidelity investigations for Tuesday, and plans to add two part-time sleuths to his staff of four to handle the demand.

Posted by Jeff Cornwall at 07:11 AM | Permalink

Not all opportunities come from new industries. I have written quite often about how the music and banking industries, although quite mature, are full of new opportunities. Both industries are facing strong forces for change that the dominant businesses cannot, or sometimes simply choose not to, adapt to. Demographic and technological changes are at work in both of these industries.

From a post at News Alert (based on a story in the LA Times) it is clear that the same is becoming true for the real estate industry.

A decade ago, Richard Barton launched Expedia.com and helped transform the travel industry by handing consumers the same tools to book reservations that travel agents had long controlled.

Now, Barton is applying the same approach to real estate -- and is banking on equally dramatic results.

While Expedia.com killed the entrepreneurial sector of the travel booking industry, I believe that this venture and others like it, will actually open up the real estate industry. Barton's venture addresses only on piece of the real estate transaction. In many ways it is more analogous to e-Bay in how it should break open a mature industry to all forms of new innovation for start-up entrepreneurs to exploit.

(Thanks to Ben Cunningham for passing this story along).

Posted by Jeff Cornwall at 08:21 AM | Permalink

Got the itch to be an entrepreneur, but haven't found the right idea? Ben Cunningham passed along a great website that offers a huge list of creativity techniques that might help stir up some great ideas for you to assess as business opportunities.

Posted by Jeff Cornwall at 11:15 AM | Permalink

A group of VCs recently gave Red Herring their top tech trends for 2006. This is interesting to note as it shows where they are planning to invest their funds.

1. More investment in green startups

2. Voice becomes free within data networks

3. Electronic technology changes from a growth engine to a commodity

4. China to become low-cost world innovator

5. Microsoft, SAP, and Oracle will lose dominance in software

6. U.S. on path to following the third-world

7. Biological sciences become popular in colleges

8. Most compelling technologies will help save time

9. Wires will disappear from the home network

10. Design will count more than ever

Posted by Jeff Cornwall at 02:49 PM | Permalink

Podcasting, the audio version of blogging, may offer some opportunity for profits according to an interview with podcaster Chris Pirillo post at Red Herring.

Mr. Pirillo told beginning podcasters to pay the extra money for audio quality, focus on building a brand, and provide enough text to attract good search results but not be a substitute for actually listening to the audio.

"We've gotten to the point that everybody and their grandmother can produce a podcast and everybody and their grandmother is producing a podcast," he said. "Now it's about separating the wheat from the chaff."

As for a business model, Mr. Pirillo--who said he makes a fifth of his income from podcasting-- recommended sponsorships. He suggested there are legions of companies who will pay for relevant discussion of their products to an engaged audience, mentioning his own lucrative deals with Citrix, Nikon, and Microsoft.

And as for my podcasting career? I've been told that I have a face for radio and a voice for newspaper, so I guess I'll just stick with blogging for now.

Posted by Jeff Cornwall at 07:05 AM | Permalink

For all of you would be restaurateurs, DocuTicker has the latest trends in what America is eating. Remember, the key to success with any business is meeting market needs. Too many start restaurants with their own tastes in mind.

More take-out foods, a penchant for premium, and a very healthy attitude are redefining what Americans eat.

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 07:27 AM | Permalink

Entrepreneur.com presents their annual review of the "hot" franchising opportunities. Here is my take on the pros and cons of franchising as an entrepreneurial strategy should any of these oppotunities look tempting to you.

There are several very good reasons to pursue a franchise as a first time entrepreneur.

First, most franchises have a business model already in place that has been tested and refined. In most cases, the model must have already been proven to attract the financing that is necessary to launch most franchised concepts.

Second, the systems should be well established and ready to go. Much of the trial and error that first time entrepreneurs have to go through with their specific ventures is in the operating processes and procedures. The devil is most often found in the details, so having these systems in place at start-up can save time and money.

Third, a franchisor should be able to provide significant help in marketing. Not only can the franchisee benefit from any regional or national promotion supported by the franchisor, but well tested content and strategies for local advertising should also be available.

Fourth, many would-be entrepreneurs I meet with are struggling to find an idea to pursue. A franchise eliminates the need to come up with an original, creative business opportunity. If creativity is not your strong suit, a franchise may be a viable option to investigate. But, make sure to look at several options, as costs and quality can vary significantly between franchised businesses.

Finally, a franchise is a good option for someone who has an interest in a specific type of business, but who has little experience or knowledge about the industry. Although specific experience is not always necessary for success as an entrepreneur, it does create a major advantage in certain industries such as restaurants. Franchising allows you to "buy" that expertise.

With all of these advantages, there are several sobering disadvantages of franchising that should be carefully weighed by any aspiring entrepreneur. Lawsuits by franchisees against franchisors are actually a fairly common event. And almost every major franchise at some point in time establishes a franchisee relations committee to help deal with complaints and grievances from franchisees. In fact, both franchisees and franchisors both have their own national associations to deal with public relations and the mounting legal and regulatory issues facing this form of business. Beyond the contractual issues that arise in franchising, there are some fundamental business and personal concerns that many franchisees experience after it is too late.

One of the biggest sources of frustration among franchisees is that they perceive that the value added they get from association with their franchisor diminishes over time. A franchise will charge a significant monthly percentage fee (this can average about 7% of sales) associated with all that they offer in terms of systems, marketing, purchasing power, and so forth. Over time, many franchisors realize that they can be just if not more effective on their own without paying the monthly percentage of sales to the franchisor. This on-going monthly fee is often glossed over by franchisees during start-up planning, as they tend to think only about the initial fees and capital expenditures in their planning. These on-going fees can eat away at profit margins if there is not real value added in what the franchisor provides.

Another concern expressed by franchisees is that with all of the rules and standardized procedures, they tend to feel more like an employee than a business owner. Those who try to break away from the predetermined model and processes can face the wrath of the franchisor. Larger franchisors have entire staff dedicated to franchisee compliance.

A financial risk to consider is that many first time entrepreneurs can only afford newer franchised concepts, since well established franchises can cost hundreds of thousands of dollars to buy in. These start-up franchisors can begin to experience their own growing pains. Some don't survive. In some cases they may take the franchisees down with them.

It is critical to understand all of the ins and outs of franchising as a general business strategy first. Then if the idea of a buying a franchise still makes sense, do your homework on the company and its concept. All franchise opportunities are not created equal.

Posted by Jeff Cornwall at 05:43 AM | Permalink | TrackBacks (1)

Change, uncertainly and chaos are an entrepreneurs best friends. There has been a lot of change and uncertainty in the music industry over the past few years. In spite of the industry giants' best efforts to stop the changes taking place in how we will be buying and listening to music, we are in the middle of a transition in the industry that will rival the impact that radio had on music in the 1900s. A new report from Nielson SoundScan reported in today's Tennessean shows the changes that are just beginning to take hold.

The good news was that overall sales of CDs, ringtones, albums and digital downloads passed the 1 billion mark in 2005, climbing 22% in terms of units sold thanks to the rapid expansion of digital offerings.

Sales of digital albums and tracks soared by triple-digit percentages last year, offering industry insiders a fresh plate of data on the impact of the paid download market.

Does it mean that the giants will go away? Probably not, but how they do business, who they do business with, and how much of the music business they will control in the future will change. There are lots of glum faces among the traditionalists on Music Row in Nashville. There world is changing forever and their business models are unraveling.

And there in lies the opportunities in this industry. A few home runs will be hit, but most the action will be in lots of singles and doubles hit by savvy entrepreneurs who will embrace the product and distribution changes that are taking place.

Right now the changes seem slow to the entrepreneurs I know. They are ready for the industry to embrace their new business models. Revolution in an industry takes time to get traction, but when it does, hand on because change and opportunity will explode.

I saw this as an entrepreneur in the health care industry in the 1980s. We knew managed care was coming and that it would completely change our industry. But of those of us who were early entrants into the new health care world, we felt like kids waiting for Christmas to arrive -- it seemed to take forever. But when the day arrives, it is a joyful and even chaotic time.

Music industry entrepreneurs get ready. The next five to ten years are going to be a wild ride!

Posted by Jeff Cornwall at 07:56 AM | Permalink

The recent, and temporary, spike in gasoline costs led to dire predictions from the American media and meaningless hearings from our politicians. As always, the free market took a different path. Entrepreneurs looked for new ideas created by the so-called crisis, for out of change and chaos comes new opportunity.

Red Herring reports that one sector that saw a lot of action in 2005 was solar power.

Within the U.S., orders are on the rise, however, leading to back orders and increased prices for solar panels. Some manufacturers report they have pre-sold their plant capacity.

Even with tight manufacturing capacity, analysts predict that sales of solar systems will triple by 2010.

Posted by Jeff Cornwall at 05:39 AM | Permalink

Entrepreneur magazine has published their annual "Hot List" for 2006. It is an interesting source of trends and ideas for new businesses. One important caution, however, is that sometimes you may already be a little late when things hit lists like this, so make sure to do your homework. Some markets may already have several competitors operating these businesses. Even these great ideas have to be evaluated as true business opportunities (here is a post from earlier this year on how to properly examine ideas for their feasibility).

You also have to be clear if the idea is a fad. Fads have a very short business life. It is not a reason to reject an idea, but fads need to be managed carefully. Do not over-invest in overhead, as the business may only last a year or two. If you choose to start a fad business, it means that you should be thinking about your next business even as you start the current one so you keep your income flowing from deal to deal.

Here is a summary of their list of specific business ideas:

Food Related Opportunities: Teas, on-line specialty foods, do-it-yourself meal preparation, one product restaurants, chocolate cafes

Security Businesses: shredding, ID theft prevention, Internet security, data backup, surveillance cameras,

Tech and Home: mobile add-ons, iPod accessories, home staging, senior retrofitting

Business to Business: tech consulting, staffing, tech recycling

Products and Services for Kids: party/activity centers, child care, teaching toys, education and tutoring, cooking for kids, kids' hair salons, e-tailing to kids, "tween" tech

They also highlight a few miscellaneous business ideas that are worth a look.

Two useful features they include are a broad look at emerging industries and consumer trends. These could be rich sources of your own "hot idea" for 2006.

Posted by Jeff Cornwall at 05:44 AM | Permalink

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)

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)

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

Americans have taken pet ownership to new heights in the past few years. And where there is money and there is a need, there is opportunity.

Entrepreneur.com highlights some of the businesses that are taking advantage of the current trend of Americans to spoil their pets. The pet products are now the seventh largest segment of retailing.

Just look at the numbers spurring this continuous growth. Pet spending has more than doubled in the past 11 years--from $17 billion in 1994 to a projected $35.9 billion by the end of this year, according to statistics from the APPMA. Fueling this trend are empty nesters lavishing attention and money on their pets, young adults who are having children later and currently put their time and energy into their animals, and a pet industry that has become more sophisticated at consumer marketing....

Just as a couple of examples, you can see local stories written about this trend in the Coloradoan, the Philadelphian Inquirer, and the Charlotte Business Journal.

I wrote a few months back about our search for a new kennel for our dog, Keb. I was amazed at how many options would have cost us more per night than we typically spend on a hotel when we travel!

This little guy is cute, but he is not worth over $100 a day for a private room with a raised bed and television, and special chilled doggie treats at bed time.

Posted by Jeff Cornwall at 05:52 AM | Permalink

There was a lot of hand wringing when the music industry consolidated, yet again, a few years ago to create three giant companies that seemed poised to dominate the market. It was 2003 and I had just moved to Nashville. Many of my friends wondered what an entrepreneurship professor was doing moving to a city dominated by such a mature industry and taking a job at a university that has one of the largest music business programs in the country.

Well, beneath the feet of the three dancing dinosaurs that dominate the current industry structure there is a whole new structure beginning to take form. The music industry has long been made up of lots of small businesses and independent contractors, as seen in this article from StartupJournal.

What has changed is that this grass roots level of music entrepreneurship is beginning to become more than self-employed artists (see the Future of Music for a discussion of these changes). Technology and consumer preferences are facilitating a restructuring of the music industry that will lead to an unprecedented shift of power. Both content and distribution have been firmly in the hands of the industry giants for the past few decades. However, the changes that are taking place in how music is made and how it is gotten into the ears of its customers are beginning to loosen the "big three's" grip.

It would be a mistake to assume that we are simply taking a small, controlled step forward to the "next thing," as when we moved from the 45 to albums and from albums to CDs, and that the industry giants will somehow grab control of digital distribution. Why? It is because this step in the evolution of the music industry is not being created by the market leaders as seen with the last few changes. This change is outside of their established system. It is revolution, not evolution.

I think that the iPod does not represent the "next thing" in the industry, as many are assuming, but really just one of several catalysts that will help propel entertainment into several years of entrepreneurial innovations and breakthroughs just as we witnessed in the information/computing industry in the 1980s and 1990s.

The music and entertainment industry is entering a period of new beginnings. This is spring time in the music business.

Posted by Jeff Cornwall at 05:38 AM | Permalink | TrackBacks (1)

Where there is customer pain there is opportunity.

A former student of mine from Minne-so-cold, Natalie, sent along a profile from seattlepi.com of a business that may deal with not only the pain of the customer, but a pain experienced by retailers who try to serve these customers. The common source of these pains? Teenage retail employees.

Experticity, which recently landed $1.2 million in angel financing, is testing a technology for in-store computer kiosks that would allow shoppers to touch a flat-panel screen and then get questions answered from a customer service agent -- one who may be located thousands of miles away. With a broadband connection transmitting data and voice, the customer service agent could advise a shopper on the benefits of certain products, pull up pricing information on eBay or show diagrams of how products work. The system also could be designed to allow shoppers to speak with agents in Spanish, Russian or other languages.

One of the questions I always ask those who are considering starting many types of retail operations is this: "Do you want your financial future left in the hands of a bunch of high school kids?!"

While this may solve part of that problem, the Luddite in me cringes at the thought of another computer to interact with. You see, I still get yelled at by the woman's voice in the computerized self check-out for messing something up every time I try to buy a few groceries at Publix .....

Posted by Jeff Cornwall at 06:28 AM | Permalink

Rob at BusinessPundit has a great post that proves the old entrepreneurial saying: "There is a pony in every pile of manure if you just dig deep enough."

Posted by Jeff Cornwall at 06:55 AM | Permalink

Very few entrepreneurs start their business out of true innovation and even fewer out of true invention. Most of us apply simple solutions to simple markets needs.

Randall Rothenberg, director of intellectual capital at Booz Allen Hamilton, offers his insights to this premise from a marketing perspective in an excerpt from a new book to be released soon The Big Moo: Stop Trying to Be Perfect and Start Being Remarkable (edited by Seth Godin).

- Imitation Across Industries Is More Efficient and Effective Than Blue-Sky Creativity and Innovation.

Take what has worked in a different market or for different customers and apply in a new place. Ride the wave of change that is already at work rather than trying to create a new wave.

- The Energy Isn't in the Idea; it's in the Execution.

Vince Lombardi would tell us that plays do not happen on the chalk board. It takes blocking and tackling to move the ball down the field. (Sorry, but after our first win -- finally -- I had to work the Packers in some how).

- You Must Create True Believers Before You Can Win New Converts.

Your best sales people are your own customers. Word of mouth is something that entrepreneurs want, but it takes "true believers" to make it happen. You have to create the "true believers" in how you execute your new business.

I got the link to this article from National Dialogue on Entrepreneurship. They seem to be disheartened by these arguments. They want to keep the focus on the high growth, high potential ventures that so enthrall most academics I know. Hey guys, get with the entrepreneurial economy, which is mostly made up of simple, yet powerful market solutions.

Posted by Jeff Cornwall at 06:15 AM | Permalink | TrackBacks (2)

"But, where do I find an idea?"

Many aspiring entrepreneurs may have the passion to strike off on their own, but they sometimes lack the business idea to make it happen. Most of the time they are trying too hard to find the "next Microsoft" or invent the "next iPod."

The best business opportunities I typically see come from things people know something about. It is like Dorothy in the Wizard of Oz discovering how to get back to Kansas; the answer was right in front of her all along.

StartupJournal provides a couple of good examples in recent articles posted at their site. The first is a woman who turned a grocery shopping annoyance into a business:

Missy Cohen-Fyffe's business began when other moms gave her unsolicited feedback as she strolled down grocery-store aisles with her son riding in blanket-like protection in the shopping cart.

"I just didn't want my son biting on the gross, grimy metal," she said of her Clean Shopper invention.

Seven years and four employees later, Cohen-Fyffe has turned her crafty idea into a full-time career: selling the Clean Shopper and other baby products from her New Hampshire home base.

The second example is of a woman who turned her hobby of tennis into a new business and a new career:

Ms. Parker targeted a tiny but lucrative market: the sticky "overgrips" that some tennis players wrap around their racket handles. Overgrips cost a few cents to make, yet they retail for about $2 each. Full of naive optimism about her prospects, Ms. Parker hoped to turn a drab-looking product into a fashion accessory that might catch the public's fancy.

Don't over think of ideas for new businesses. The best ideas come from our work experiences, our hobbies, or our everyday lives. Find something from your experiences that is also a need for others. There may be competition, but they just do not quite take care of the need. Or if you are lucky, it may be a niche that nobody has discovered. Either way, solving everyday problems that you understand is the best path to your first business venture.

Posted by Jeff Cornwall at 05:21 AM | Permalink | Comments (1)

We've all heard the claims for generations. Small towns and large cities become known for a particular product. For example, Sheboygan, Wisconsin (and for that matter Bucyrus, Ohio) claims to be the Bratwurst Capital of the World. (Growing up on Wisconsin bratwursts is probably what has made my cholesterol so high....).

There are claims of the World Capital of This and the World Capital of That all over America. Fortune Small Business profiles some of the current "World Capitals" in their September issue.

Most entrepreneurs look for a unique niche to start a business, as this is often considered the safest way to start a new venture. But, every rule has an exception.

In the business phenomenon known as a cluster, businesses find advantages in operating in close proximity to their competitors. Clusters are a bit of a paradox. They can help attract customers (Auto Dealer Row), make getting materials from suppliers more efficient, take advantage of a geographic anomaly, or tap into a specialized labor pool. This is particularly true with today's successful clusters.

Concentrations of specialized experts may result from a university producing patents on new technology and graduates who understand them, or a large corporation sloughing off workers who see entrepreneurial opportunities their less nimble employer didn't. Silicon Valley is a prime example of a brainpower-based capital, as is our lesser-known find, Orlando, where the University of Central Florida feeds the local virtual-reality industry.

What ever the reason, sometimes it pays to be in a crowded market.

Posted by Jeff Cornwall at 06:08 AM | Permalink

A quiet revolution being led by young consumers is underway. Both of my young adult children are a part of this revolution. Many of you may be a part of it, as well.

Red Herring reports on a study by the Yankee group that highlights this quiet, but major change:

"The landline is going the way of the glove-box cell phone," said Yankee Group's wireless global practice leader Keith Mallinson. "Plenty of people have them for safety or backup but they rarely get used."

More than 65 percent of the U.S. population owns a cell phone, the Yankee Group estimates. And the average number of cell phone minutes used by U.S. subscribers grew to 754 minutes per month-almost 13 hours-by the second quarter of 2005, Mr. Mallinson added. Much of that time used to be spent on home phones.

Young adults seem to be leading the trend, with more than 30 percent of 18- to 24-year-olds lacking landlines. In the U.S. population overall, the trend is less dramatic, with one in 10 cell phone users without landlines.

This trend away from the old land line phone is amazing to someone who remembers party lines, Ma Bell, and rotary phones. The big telecom companies have been preparing for this trend for years. And as it continues, this trend will create more and more new opportunities for entrepreneurs to exploit. Just look at all of the consumer behaviors tied to land line phone use and find ways to replicate or improve on them for the new mobile phone world.

Posted by Jeff Cornwall at 05:31 PM | Permalink

From the StartupJournwal:

Matthew Younkle was a senior at the University of Wisconsin in Madison when inspiration struck. What the world really needs, he decided, is a three-second beer.

He was not the first college student to dream of ways to get to his alcohol more quickly. What set Mr. Younkle apart is that he chose, soberly, to follow through.

Ten years later, Mr. Younkle, 31 years old, is president and chief technology officer of TurboTap, a company marketing a finger-sized nozzle that attaches to standard beer faucets and pours draft beer at least twice as fast as traditional systems do, and with less spillage.

From one Cheesehead to another I say, "Good job der hey!"

Posted by Jeff Cornwall at 06:28 AM | Permalink | TrackBacks (1)

The 2005 Presidential Green Chemistry Challenge Award for small business was presented this week to Metabolix, Inc by the SBA's Chief Counsel for Advocacy, Thomas M. Sullivan. Metabolix is a small business that is turning plant materials into usable plastics for a variety of applications.

The Metabolix web site describes their core technology as applying "the cutting edge tools of biotechnology to create a new generation of highly versatile, sustainable, biobased, biodegradable, natural plastics and chemicals."

The Presidential Green Chemistry Challenge Awards provide national recognition of outstanding chemical technologies that incorporate the principles of green chemistry into chemical design, manufacture, and use, and that have been or can be utilized by industry in achieving their pollution prevention goals.

Hat's off to Metabolix for being a pioneer in what may become a major new industry over the coming years. Could they have done it without this award? Certainly, since the company has been working on this technology since 1992 and has entered into strategic alliances with companies such as BP and ADM to apply their technology to different markets.

Seems like the EPA is simply after a little positive p.r. with this one. Maybe we should just keep the overhead that it takes to run an award program like this in the private sector.

Posted by Jeff Cornwall at 07:41 AM | Permalink | TrackBacks (1)

Great advice for any golfer is to swing easy. The harder you try to swing the worse your shots become. The easier you swing, the longer the ball seems to go. It seems like a contradiction, but it is true. The same holds for finding a business idea. Swing easy.

Don't go for "the next Microsoft" or for a quick "home-run" idea. Find a need, find a niche, and keep it simple.

I have offered many examples and ideas that fit this advice and USA Today has yet another example this week -- Brian Scudamore who founded 1-800-GOT-JUNK? is a great story of a drop-out who was not afraid fill a need in a less than glamorous business.

"As an 18-year-old, Scudamore was having a difficult time finding a summer job. While at a McDonald's drive-through in 1989, he noticed a beat-up truck of a local hauling company.

"He bought a truck for $700, placed a newspaper ad that said, 'The Rubbish Boys will stash your trash in a flash,' and charged $80 per truckload."

He grew the business with what he had to work with. His advice to entrepreneurs is to "start your business with your own money."

Another tip for the average golfer is to keep your head down and your eye on the ball. In a word -- focus.

Scudamore created a simple business with a clear plan. He never strayed from his original idea. It worked well so he grew it and continued to make the basic idea a little better. His warning to entrepreneurs is, "Don't ever try to build a business without a crystal-clear vision."

A simple idea with a clear vision that he has turned into a franchised business with over 1,000 employees and $72 million in revenues.

Swing easy. Focus.

Posted by Jeff Cornwall at 06:04 AM | Permalink | TrackBacks (1)

Having been in the mental health industry for many years (and in business with two trained psychoanalysts), I was intrigued by this example at StartupJournal of a furniture maker finding a niche within the market of traditional psychoanalysis, which has seen significant decline since the advent of managed care. It seems that even though there are not as many analysts as there used to be, they still need couches. Entrepreneurs seem to find opportunity everywhere and anywhere!

As the old joke goes:

When the entrepreneur was a young lad growing up on the family farm, he had asked Santa for a pony one Christmas. After all the presents were opened that Christmas morning--no pony! I little while later his parents spotted him in the back yard digging in a large pile of manure.

His parents shouted, "What are you doing out there??!!"

The future entrepreneur looked up, smiled, and replied, "I just know if I dig deep enough there is a pony in here somewhere!!"

Posted by Jeff Cornwall at 06:33 AM | Permalink | TrackBacks (1)

I have written before about the risk of jumping too quickly into writing a full-blown business plan or even impulsively launching a business. A key skill that successful entrepreneurs learn is to more efficiently and quickly assess possible opportunities before they make extensive commitment of time and money. It allows them to weed out ideas that don't have a good chance or working. In effect, it gives the entrepreneur a chance to fail on paper.

I have entrepreneurs examine three basic questions to assess opportunities:

1. Is there a MARKET? Examine the size of the market to make certain that you only need a small portion of the market as customers to make your business work. Make sure that they are interested in, and more importantly want and need your product or service. You don't have time or money as an entrepreneur to educate them. Begin to get an idea of how much they will be willing to pay. Too many times this becomes a last minute guess by the entrepreneur.

2. Is there a MARGIN? Figure out the basic economics of the business. How much will the product or service sell for and how much will it cost to produce the product or offer the service? At this stage you should really look for opportunities that offer at least a 50% margin. Generally, when all is said and done this will typically result in actual profits of about 15-20% once the business plan is developed and all of the true costs are determined.

3. Is this for ME? There are many periods during the growth of the business when the entrepreneur needs a true passion to carry them through. This is not just a simple financial investment. It becomes much more personal and emotional than that. Many entrepreneurs tell us that the profit part of the business opportunity is only one of many reasons for launching their businesses. It also helps to build a business that takes advantage of your experiences, knowledge and skills.

These three basic questions should become the first thing you do when you look at an idea for a new business. If the idea passes this test, it offers real potential as a true business opportunity and should be pursued further toward a possible launch. Using opportunity assessment will help increase your success rates with business start-ups. It will also help you deal with an idea and move on if it does not seem to offer a good chance of success. That is, it helps you clean up the mental clutter of too many business ideas floating around in your head.

Posted by Jeff Cornwall at 09:35 AM | Permalink | TrackBacks (2)

Red Herring has an interesting interview with Randy Haykin, who heads up Outlook Ventures, an early-stage venture capital firm. Haykin identifies what he considers to be the "hot" market spaces in technology these days. On his list:

-Digital Security (although it may be peaking right now)

-Virtual Patches for Microsoft systems (temporary fixes until Microsoft sends out the offical patch)

-Products that help manage permission and access control for IT systems in larger companies

-Software

He is not very excited about offshoring firms, however, which used to be a hot sector in technology. It does not seem to deliver the cost savings that everyone thought it would when it first became the rage.

VC activity in technology firms should continue to increase as valuations are up significantly over the past three years. What is interesting is that it is attributed in large part to better bootstrapping. Seems that VCs like to see their money spent on producing and selling rather than administrative overhead.

Posted by Jeff Cornwall at 05:41 AM | Permalink

Like many of us, the only time I read the USA Today is when I travel. We just got back from a trip to pick up our daughter from college. While in the hotel in Gaffney, SC I came across a feature that USA Today ran on the state of the entertainment industry. While much of it has been said elsewhere, it really provides a fascinating looking at where music and the rest of the entertainment industry may be headed. USA Today put together a diverse group of people who are helping to shape the industry's future. As I read through the comments of the assembled panelists, I was struck by all of the immediate and longer term opportunities in the entertainment industry. Here are a few of the impressions I took away from their comments:

- What I am doing here this morning will soon be out of date. Blogs are just the early, archaic form of new ways to share ideas and communicate. The sprit of blogging will continue on, but its form will most certainly evolve and morph into other media.

- The market will no longer be such a "mass market", but one that is full of product and market segmentation. The "long tail" of the market will become the focus of business development. The "long tail" refers to that part of the market that does not favor the popular choices in music and entertainment. They are made up of countless little market niches out there hungry for their specific interests to be satisfied. About half of the culture is in the very tall popular culture part of the curve, but there is an incredibly long tail of that curve that continues off to the right that contains all of the various sub-markets for entertainment. With this diverse group of consumers and new means to reach highly specialized market niches, the opportunities are limitless.

For example, there are bands making a nice living off of a very small, but loyal group of followers. They can reach them through the Internet in ways that build loyalty and intimacy that most marketers would kill for. Thousands of blogs have hundreds or even thousands of very loyal readers, who share a strong and passionate commitment to a common interest.

- New forms to catalogue, store and search through all of this media that will be at our fingertips in the soon to be wide open market will need to be developed. Think of it this way; right now I have all of my favorite CDs in a 200 disc player. I have little booklets that hold the covers of these CDs for me to look through and I have the CDs grouped in blocks by musical genres (classic rock, blues, country, folk, old jazz, new jazz, classical, and so forth). While this allows me to do some rudimentary searches for a specific song, artist or musical style, it takes time and effort for me to search through all of that. iPods have a more powerful search feature that allows you to search by title, artist, etc. Both of these are limited in space by the storage capacity and neither search feature is really satisfactory, especially when applied to an open market of music that will not be limited by or defined by any hardware that I happen to own. But how to we find and organize all of that? Certainly Google is not the answer. In fact, if the now corporate Google does not reinvent itself ten times over in the next few years it, too, will become irrelevant.

Soon you will be able to communicate your mood or the setting and artificial intelligence that has learned from your past decisions and information combined with an almost limitless database of entertainment will be able to, well, entertain you beyond anything you can now imagine.

- Advertising will need to reinvent itself as an industry, as well. Again, think of that long tail of little market niches that stretches on and on. Mass marketing techniques to a captured audience will not work in this space.

- The devices we use for music, video and other forms of entertainment in 2015 may not have even been dreamed of today in 2005. Convergence of our current devices is just an attempt to fit a bunch of round pegs into square holes. Eventually there will be a breakthrough or a series of breakthroughs. There will be another group of entrepreneurs like Steve Jobs and Bill Gates who will bring this new world of media technology to us.

- Even what forms media takes will change. Video, audio, the Internet, as we now know all them, will all seem like quaint antiques within a decade or two.

Posted by Jeff Cornwall at 06:16 AM | Permalink

Market? Margin? Me?

Those are the three questions that my students hear over and over when they come to me with new ideas. One of the most important keys to becoming a successful entrepreneur is learning how to ask and assess these three questions. This is not the stuff of some full blown business plan. It begins, instead, with a simple, common sense look at the market.

StartupJounral explores the "Market?" question recommending that potential entrepreneurs use easy to gather data, that often is right at their finder, tips to validate their ideas. Talk to people in the industry. If you don't come across as selling they are usually happy to give you their opinions. Use the Web to gather information on major trends that may help or hurt your idea over the coming years. And get to know how your potential customers think and what is really important to them in making purchasing decisions.

Find out if the idea is a non-starter before you invest your time and other people's money in the deal. Learn to fail on paper.

Posted by Jeff Cornwall at 05:46 AM | Permalink | TrackBacks (2)

Disabled Americans have more freedom of movement, more access, and more opportunities than ever before. Fortune Small Business examines this growing market.

"After he had driven four hours to buy a wheel-chair that would allow him to play tennis-and was ignored by the salespeople at the company that made it-John Box was so angry that he decided to do something about it. When Box returned home, he and a brother, both engineers, teamed up to invent their own athletic-oriented chair. Box was soon marketing it at the wheelchair tennis matches in which he competed around the country."

As we baby-boomers are now old (no longer getting older--just old according to my students), this market may become even larger over the next 20-30 years. Even today this market includes about 50 million Americans.

Posted by Jeff Cornwall at 05:39 AM | Permalink | TrackBacks (2)

We Americans have been quite smug about our health care, and for a long time with good reason. Everyone in the world comes here when they really need the best care and can afford it. There has even been significant movement by several American health care companies to develop international markets. Well, according to this story from CBS News (via Ben Cunningham) global competition is here in health care.

"A growing number of tourists are...combining holidays with health care. And that's because a growing number of countries are offering first-rate medical care at third-world prices.

"Many of these medical tourists can't afford health care at home; the 40 million uninsured Americans, for example. Others are going for procedures not covered by their insurance: cosmetic surgery, infertility treatment."

Countries such as India and Thailand are leading the way. For example, in these countries heart by-pass surgery costs $12,000 rather than the $100,000 one would pay in the US. These procedures are being done in foreign hospitals that often rate as high as most US facilities. Even with airfare and hotels it can be a huge savings.

Such alternatives may add an interesting twist to the growing trend toward consumer driven health care plans among US small businesses. Watch for active marketing of health care tourism as these plans sweep the nation.

Posted by Jeff Cornwall at 05:10 AM | Permalink

Entrepreneurs ride the waves of change. Over the past 100 years we have seen transportation (automobile, trains and planes) and information (hardware and software) support the economic expansion in America.

What will be the next major wave? That is the sixty four trillion dollar question.

There are some signs that transportation may again shape our economic future. That may sound a bit crazy given that we are now paying $2 - $3 a gallon for gas and the airlines and railroad industries are in disarray. But, we have come to rely both culturally and socially on physical connectedness in this increasing global economy. There in lies the source for possible opportunities. It may be time for transportation to go through another technological revolution that could support the world economy for decades to come.

What shape it may take is not clear. It never really is clear anytime we are in a time of revolutionary change. In the beginning of the information age we had no idea which companies or even which technologies would prevail in the market. Who would have guessed twenty years ago that I would be sitting today on my back porch typing into a machine on my lap that through a wireless connection can broadcast my words all over the globe?

The information age is still an exciting part of our world and will be for some time to come. But, it is inevitable that the breakthroughs will begin to slow down enough so that this segment of the economy will no longer be the main engine of growth.

So where might a new transportation age take us? Could it be some variation of the hydrogen cars now being developed by General Motors? Could is be travel in the sky as envisioned by NASA's Small Aircraft Transportation System (SATS)? Could it come out of the work of Burt Rutan and his group? Or could it be some breakthrough that an unknown group in North Dakota is working on in a garage in Fargo?

I am not sure what the next transportation age will look like, but I am beginning to feel more and more strongly that it will come. Change and chaos creates entrepreneurial opportunity. The potential crisis of supply of fossil fuels and the complete inefficiency of our current transportation systems just oozes opportunity.

Posted by Jeff Cornwall at 06:22 AM | Permalink | TrackBacks (2)

There was much discussion recently on how eBay's new higher fees would be the death of all of the businesses that built their models around the on-line auctioneer. Well, once again, entrepreneurs prove how resourceful and adaptive they can be when things change. Inc.com has a story of how "eBay entrepreneurs" have found alternatives, including moving to other auction sites or ramping up their own web sites, to keep their businesses alive and in some cases doing better than ever.

Posted by Jeff Cornwall at 05:57 AM | Permalink

Could music row be moving out of the 1950s and into the digital age? Music Row (the heart of the music industry here in Nashville) congregated here at Belmont University yesterday to here about the this month's version of the future of the music industry. There are some facinating developments in the wings, such as rent-a-tune subscription services. But, change in the entertainment industry is a likely to increase and some of the incremental adaptations tried so far just don't seem to be making it witht customers. Most of the giants in the industry are looking for a static, one-time fix to make all of the change go away. These are fast times in music, best suited for entrepreneurial thinking and action.

This article from today's Tennessean has a detailed overview of what Music Row executives heard. Are they listening?

Posted by Jeff Cornwall at 05:59 AM | Permalink

My years in the health care industry taught me many lessons. One that I often stress to new entrepreneurs is to remember that the same changes in the market that give you an opportunity can just as quickly take it away.

Our early growth in the mental health market came from the emergence of managed care in the 1980s. We offered a much lower cost and more effective outcomes than the traditional treatment that involved long-term hospitalization. But the same HMOs that once loved us, had to keep delivering lower health care costs to employers. Eventually, they were able to find cheaper, but this time less effective, alternatives.

Fortunately, we saw this trend coming and had already begun to shift our business away from private managed care companies to working with state and county agencies eager to privatize mental health treatment. While this was a fundamental change in our business model, it was necessary for us to survive.

BizJournals.com offers another entrepreneur's story of having to make a drastic shift in target markets. Veicon, Inc. had provided Internet access to hotel guests until 9/11 all but ended that market. So they quickly shifted to public access terminals in libraries and hospitals.

Entrepreneurs, by definition, operate in what my former colleague Peter Vaill calls permanent white water. That often requires quick and decisive changes in direction to avoid complete disaster. Someone once told me these words of wisdom; "Never get 'married' to your customers."

Posted by Jeff Cornwall at 05:25 AM | Permalink | TrackBacks (1)

eBay has thrown a speed bump on the road to riches that many entrepreneurs are trying to navigate according to StartupJournal.

"Entrepreneurs on auction giant eBay are still struggling to deal with their latest loop on the business rollercoaster after the Web site increased fees Feb. 18. An estimated 430,000 Americans make a full- or part-time living from running a business on eBay.

"'I'm going to pull everything,' says TJ Wilson, of Ketchikan, Alaska, who sold Celtic and Gothic jewelry at her eBay store. She closed her store, Reef Media, Feb. 18. 'One item I listed last week at 60 cents (in fees) will now cost me a buck and a half -- and I had dropped the price of the item!'"

Over reliance on a single customer, a single supplier, or in this case a single source of distribution puts any small business at risk.

Posted by Jeff Cornwall at 05:03 AM | Permalink | TrackBacks (2)

Convergence in the technology world seems to be continuing to gain steam, and that means new opportunity for entrepreneurs who can take advantage of the changes that convergence creates.

That latest example is reported today at Red Herring.

"Handset makers at this week's annual 3GSM mobile industry gathering are emphasizing strategies to turn mobile phones into digital music players, technology one analyst predicts could be an 'iPod killer.'

"On Monday, Nokia took the industry by surprise when it announced that it had inked a deal to use longtime rival Microsoft's music formats in its handsets, with the aim of allowing cell phone users to easily transfer music from personal computers equipped with Windows XP software. The Finnish handset giant said it would release a music-centric cell phone using an open mobile music platform from Loudeye, which will let users browse, download, and listen to songs, with charges appearing on their monthly bill. Users would also be able to transfer songs between their cell phones, digital music players, and computers."

Such times are not for the faint of heart. While opportunities abound, today's star can become a dog in a few short months.

Posted by Jeff Cornwall at 06:09 AM | Permalink

It is getting really competitive and really active in the industry that serves bloggers, and it appears that the blogging phenomenon is seen as having legs. Blogs have moved out from the fringes of news reporting into special interest blogs like this one. And while some aspects of blogging may be seen by some as a fad, corporations are now experimenting with how to use blogging effectively for internal and external communications. Blogging as soft marketing is now well entrenched.

Blogging software was front and center at the DEMO@15 conference. Red Herring, Yahoo Financial News, and the New Mexican all offer good overviews of this conference and the prominence of blogging products at this year's techie conference.

But as venture capital money and entrepreneurs flow into what was a cottage industry, what will follow?

I tend to agree with David Geller, an Internet company executive, who sees convergence between blogs and web sites in an interview published this morning at seattlepi.com. "Blogging is nothing but really easy-to-use Web publishing."

Creative minds and lots of money will lead to an explosion of ideas and innovations, and many of them will be looking for ways to bring together web pages, blogs, search engines, e-mail, and who knows what else. We will also see more video and audio being integrated into the mix as the entertainment industry goes kicking and screaming into this brave new world.

For example, imagine the convergence of radio, the Internet and blogging into a new generation of opinion sharing technology that brings talk radio into the new century. Bring this together with the amazing breakthroughs happening in devices that can serve these new markets and who knows what we will happen in the next few years...

Posted by Jeff Cornwall at 05:34 AM | Permalink | Comments (1) | TrackBacks (2)

This weekend the conference called DEMO@15, which has become the launching pad for many a successful technology gadget, will be held in Scottsdale, AZ. Most of the new technologies are kept top secret leading up to this event, but Red Herring gives a sneak preview.

"Menlo Park, California-based Xfire is working with the next generation of networked multiplayer online games. British company Sonaptic creates 3D surround-sound audio for cell phones, and Palo Alto, California, company Avvenu has a service that enables users to access home-based media content, like music, photos, and video, from a mobile....If you thought liquid crystal displays (LCDs) and plasma display panels (PDPs) were the upcoming display technology, Irish company Ntera makes nanochromatic displays (NCDs), which are low power and flexible. Israeli company VKB makes an optical-based virtual keyboard....Australian company Digital Monkey has a software system, 'In the Chair,' which enables a musician to immerse in an audio orchestra setting."

It all makes a Luddite like me want to curl up in a corner....but, progress marches on. After all, I don't write this blog with a typewriter.

Posted by Jeff Cornwall at 05:10 AM | Permalink

Fortune Small Business reports how an entrepreneur named Howard Berke and his company Konarka is using nanotechnology to potentially revolutionize solar power.

"Berke's vision is to use nanotechnology to make photovoltaics—the process of turning sunlight directly into electricity-cheap, lightweight, and widely available. Imagine molecules embedded on material as thin and flexible as plastic wrap, converting indoor and outdoor light into power-and doing it all without noise, moving parts, fuel, or pollution."

Berke is breaking away from traditional silicon technology and using organic chemicals placed onto a thin film. His approach is already finding application in the market.

"Konarka recently landed multimillion-dollar contracts with the Pentagon to deliver, among other things, a tent made of material that generates electricity from the sun, and a thin piece of film that soldiers can carry on the field to recharge the batteries in their cellphones, night scopes, and GPS systems."

This venture could be a breakthrough for both nanotechnology and energy production.

Posted by Jeff Cornwall at 05:06 AM | Permalink

I have known a couple of folks who started businesses offering their services as professional organizers. This article at StartupJournal shows how much financial opportunity and satisfaction that there may be for this type of business.

"'I keep doing it because I love it; it's instant gratification,' says Sally Allen, owner of A Place For Everything LLC in Golden, Colo. Maria Gracia, founder of Get Organized Now! in Watertown, Wis., says, 'It's a very rewarding field emotionally, and it can also be financially rewarding.' And Barry Izsak, president of Arranging It All in Austin, Texas, concludes, 'My life is so good. I never dreamed I'd be doing something that is so easy for me, and making so much money.'"

For many of these organizers, their businesses are growing much larger than they at first imagined. Many report that they are adding subcontractors and offering products to go along with their organizing (storage systems, books they have developed on how to keep organized, etc.).

As Barry Moltz likes to say, the best business opportunities are those that solve other people's pain. I guess too much stuff is quite painful to a lot of people these days!

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

Even though from the outside the music industry seems like a wounded giant, it is proving to be fertile ground for entrepreneurs willing to think about new and creative ways of getting music from artists to listeners.

The latest of these new ideas just got venture capital funding, as reported by Red Herring.

"Mercora, of Santa Clara, California received $5 million in Series A funding Monday from Silicon Valley's Norwest Venture Partners, to finance its Internet radio network. Mercora IM (Individual Modulation) Radio, which uses streaming audio, lets users listen to music from other users' computers.

"'It is a network of radio stations that is basically converting your PC into a webcasting station in compliance with copyright laws,' said Srivats Sampath, co-founder and CEO. With Mercora, every user becomes a broadcaster and their playlist becomes a channel, he said."

Not only is Mercora rethinking music distribution, but they are even rethinking broadcast radio. This may not be the answer for this industry, but it is definitely the kind of innovation that may help reinvent how music gets from performers to their fans.

Posted by Jeff Cornwall at 05:47 AM | Permalink

Small Business Trends offers a few more interesting trends to consider this time related to health and family.

"Food and pets figure in greatly in the top 10 trends for family and health in the United States, as predicted by Better Homes and Gardens magazine. If you are a small business owner, consultant, solo entrepreneur, author, home-based business or franchise owner, you may just find a promising new business opportunity among these trends -- not to mention improving your health and well-being."

Anita also has links to all of the 2005 trends she has written about this year in this post. Several great posts in this list as well.

Posted by Jeff Cornwall at 06:19 AM | Permalink

A question sent to me via e-mail from I.E.:

Most successful businesses, are not based around a revolutionary product or service. Many entrepreneurs that I've read about, simply enter a field where a number of competitors are already doing well, but the market demand is growing, and a segment of the market is partially underserved. Can you suggest any way to identify such opportunities? This seems especially hard because most competitors are private, so there is no way to know the level of demand in a particular market.

Someone I know is always trying to figure out the next great product to sell on QVC. But try and try as she may, she probably will never succeed with this strategy. Why? She has never had any experience with developing, manufacturing or selling consumer products.

Most successful entrepreneurs don't simply "enter a market." They build off of their experience, their knowledge, their education, and their skills. Successful entrepreneurs find some need in the market that is not being met that they have the knowledge, skills, and experience to satisfy for their customers. Maybe it is an area they gained expertise in from their education, maybe they've worked in the industry, or sometimes it can even come from a hobby or special interest. But even with a strong base of knowledge, more learning and more research is almost always needed.

Also, it takes people beyond the entrepreneur him/herself to successfully start and build a business. For example, my last entrepreneurial phase in life was in the health care industry. We had identified a niche in the market what was fairly new, was not being exploited by any other companies, and showed potential for significant growth. My partners had extensive experience in the health care, which I lacked. But, they needed me as a third partner to bring knowledge and skills on how to build and grow a business. Between the three of us, we had what it took to build a successful health care business. Any one of us trying to pursue this opportunity alone most likely would have failed.

Success requires first the ability to identify an opportunity for which there is a market. This usually takes some knowledge of that industry. Second, you must be certain that it can generate adequate profits to meet the cash needs of the business and the entrepreneurs. Finally, you (or more likely your team) must have the ability to successfully implement the plan and manage the business as it grows. Having the skills to manage the business as it grows is critical. However, many entrepreneurs are able to learn new business skills as they grow their businesses, and they can add new team members to fill any gaps in key business skills that arise over time.

Success does not simply come from a "good idea." It comes from some basic knowledge about the product or service, good information about the market, and having the right business skills represented in the members of your team.

Posted by Jeff Cornwall at 06:47 AM | Permalink | TrackBacks (2)

Inc.com has an amazing story told by a young entrepreneur, Bo Peabody, who started a business during the dot.com craze, sold it for $58 million in stock to Lycos at a point where he still had generated almost no revenue, saw Lycos stock go up tenfold, and then sold it all before the dot.bomb crash. Smart? Maybe a little. Lucky? You bet! Here are Mr. Peabody's reflections on his own success.

"Luck is a part of life, and everyone, at one point or another, gets lucky. Luck is also a big part of business life and perhaps the biggest part of entrepreneurial life. At the very least, entrepreneurs must believe in luck. Ideally, they can recognize it when they see it. And over time, the best entrepreneurs can actually learn to create luck.

"Luck in business is different from regular old luck, like when you find $20 on the sidewalk. First of all, being lucky in business has an intoxicating underbelly called believing you're smart. No one actually believes that he should take credit for finding $20 on the sidewalk. But when people get lucky in business, they are often convinced that it is not luck at all that brought them good fortune. They believe instead that their business venture succeeded thanks to their own blinding brilliance."

It is good to be smart. It is even better to be lucky. But, it is critical to know the difference. I have seen too many entrepreneurs confuse luck with brilliance only to come crashing down to earth when their luck runs out.

Thanks to Peyman Motlagh, one of my former graduate students, for passing this story along.

Posted by Jeff Cornwall at 05:52 AM | Permalink | TrackBacks (4)

With the exception of those who listen to late night radio, predictions for 2005 see a good year ahead. Here is a sample:

Red Herring sees a big year for gene therapies and electronic convergence, both of which offer significant opportunities for entrepreneurial business development.

Inc.com sees 2005 as a strong year for mid-level companies.

Fortune Small Business offers an array of hot business opportunities, including designer fruit, DNA markers to prevent counterfeit products, under water hotels, and high-tech drive-throughs for fast food restaurants.

Small Business Trends blog interviewed Watts Wacker, a futurist, to find out his predictions of the major trends for 2005. One includes a 1400 calories burger. Yikes! Just what I need after the Holidays!

The Seattle Times offers predictions of a growth in VoIP (a prediction echoed by VoIP Blog) and a slow down in growth for bio-tech and pharmaceuticals due to the growing regulatory mess.

Clickz (a marketing industry web site) predicts that companies will begin to offer free Wi-Fi hotspots as a means of advertising. Right now you are charged a fee to tap into many hotspots in hotels lobbies and airports. With this new model, hotspots will become an advertising medium (first urinals, now this...).

And finally, I could not resist these predictions from Art Bell's late night listeners:

-Canada will rally to become part of the U.S.

-A disease will cause red armpits over America.

Happy New Year!

Posted by Jeff Cornwall at 09:09 AM | Permalink | TrackBacks (1)