A Cash Cow Business

26 February 2012 | talking about Leadership

Venture capital investments are great. It allows people to focus on the business instead of day to day cash flow issues. For some businesses, venture capital is the way to go. There is no way Steve Jobs would have had a consulting practice on the side to help grow Apple. He needed all in complete focus to succeed. However, one mistake I think many entrepreneurs make is they think they need outside investment to grow their business. They get so focused on raising money they forget to look outside the box. One approach I have used for years to fund businesses is what I call a cash cow business. This is nothing more than one business funding the growth of another more important business.

Some businesses generate profits from day one - consulting business for example. Another example would be some sort of retail or service business. You mow someone’s lawn and they pay you. Profit on day one. Why not start one of these simple profit-at-day-one businesses to fund your dream business? I can illustrate this with two examples from my life.

 
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Why Amazon Is Amazing To Me

11 February 2012 | talking about Internet, Leadership, Stock Market

I love Amazon.com. I buy almost everything I can from them. Retail, hosting, media, and more. I even own stock in Amazon. I am a very happy consumer and investor. However, what I find so interesting about Amazon is not my consumer joy or my nice gains as a shareholder; it is their business model. In so many ways they have re-engineered traditional business models. The single most fascinating aspect of Amazon to me is their way of monetizing business bi-products.

As an Internet retailer Amazon has to make major investments in data centers. Trust me: Amazon runs on more than just a Linux computer under Jeff Bezos’ bed. They have built data centers all over the world. Normally, this would be a cost of doing business. In order to sell products online they have to build data centers. Using the bi-product of having to build data centers Amazon built a billion dollar hosting business, Amazon Web Services. Amazon leverages their infrastructure and rents the use of this space to web sites all over the world. This is like Best Buy starting a construction company because they are building big box retail locations. Amazon turned what traditionally would be a fixed expense into a most likely very profitable business unit.

 
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Why Don’t People Think In Terms Of ROI?

2 December 2011 | talking about Leadership, Small Business

Something that bugs me is entrepreneurs who are starting a company or making an investment but do not think in terms of return on investment, or ROI. Simply put, ROI is an estimate: if you invest a dollar how much will that dollar grow to? Typically you calculate your ROI as a percentage. Lets say I invest a dollar today and 5 years from now that dollar is worth $1.20. That means you got a 20% return over 5 years (or 3.71% per year).

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Also, for the record this rant is not in relationship to the Mark Zuckerbergs, Bill Gates, or Steve Jobs of the world. These guys all started companies when they had no financial worries. The only risk was failing and going back to college. I am speaking the commoners, those who already have jobs. Those who already have a family. Those who already have a mortgage and a car payment. I am speaking to the people who buy rental properties, start web companies at night, or quit their job to go all in on a ice cream shop -not kids in dorm rooms (many of us missed that boat)
 
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Stealing Is Ok! Might Even Make You Rich

2 March 2010 | talking about Internet, Leadership

Paul Wagner, (CEO of Forkfly), sent me this YouTube video today of Steve Jobs talking about how they build products. He outright says he looks around at what others are doing and shamelessly steals them. Apple then takes the stolen ideas and puts their own twist on the product often makes it much much better.





Through my past client work, and now through my work with startups I am constantly running into people that want to reinvent the wheel. They want to start from the ground up as if there are no great ideas out there to steal. In the web world I am very very confident that if you are trying to build something there is an idea you can steal and make better. I think every project should start with finding an example to build from. I don't believe in just trying to build something without a stolen idea as the foundation.
 
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Douche Bag Or Brillant, I Say Brillant

19 November 2009 | talking about Internet, Leadership

So I continue to not be sure if I am in Gary Vaynerchuk's camp or not yet. He is too new. Will he be a voice and a business leader in 2020? I don't know. I sure hope so. The problem and at the same time the driving force of Gary is the first thing everyone says is wow that guy is a "Dush-Bag", but yet they keep listening. We are so instilled not to like someone like that, but yet this new world is changing our social norms. Yeah he comes on strong. Yeah he has a bit of a know-it-all fashion to him. I feel the same way about Steve Jobs, Larry Ellison, and Donald Trump. Would you call anyone of those guys Dush-Bags now? All those guys have built empires. Gary has a long ways to go before he will be next to those guys, but the thing is he is very much like those guys. He gets it!!! He sees how the marketing world is changing. He see the power of content. He see the power of self branding. He also understands hard work. If you believe in him or not right now it does not matter, but if you do not realize this guy has a amazing view of business and one route you can travel with it, your a fool. Until I get to meet Gary, or until I can publicly trade his stock (that is when the truth comes out), I will continue to keep my Dush-Bag flag radar on, but will truly admire him as a business person.

I just watched the video below. This guy is dead on when it come to social media. Everyone that is interested in how the world is changing should watch this video.

 
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What I Admire In A Good CEO

18 November 2009 | talking about Leadership

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I Am A CEO Stalker

I have to admit, I am a CEO stalker. Not in the creepy sit outside their house kinda of way. However, I must admin I did drive by Warren Buffet's office and house a few time. When I say I am a stalker I am more of an admirer. I am someone that loves getting inside the mind of a great CEO (or CEO type person). I read as much as I can about them, I watch all the interviews, I track the performance of their companies and more. Some CEO's are very hard to follow and some are very easy to follow. Some are more out spoken and some value their privacy. Some of the CEO's I love to follow are Warren Buffet, Bill Gates, Jamie Dimon, Jason Fried, David Heinemeier Hansson, T Boone Pickens, Brad Feld, Jason Mendelson, Jim Cramer, Jack Welch, Tony Hsieh, Gary Vaynerchuk, George Soros, Jeff Bezos, Steve Jobs and many more. I mention all of these guys because they are all over the board. Not one of these guys are the same in any one way. Some are really successful and fame found them, some have become famous just telling you they are successful (and clearly they are but we might not have known had they not told us), some of these guys have been very successful using themselves as marketing objects to push their wares. Every one of these guys and many more are worth studying and understanding. They are wired in a very special way.

The Know-It-All CEO

Today, I found myself day dreaming about how do I personally filter these guys. When any person speaks you have to filter what they say. How can I tell who is pumping their wares and who is speaking from the heart? How can I tell who is really an expert on the topic or just had a few lucky turns in life? Nowadays everyone is some sort of expert, thanks to the Internet. One things keeps standing out when I watch, read, and listen to these guys talk. Some of these guys will outright tell you what you should be doing in sort of a know-it-all fashion. Sometimes when you are so entrenched in a topic you do become a know-it-all because you very likely might be. Years of experience does make you a know-it-all in certain topics. I do not mean that as a put down, but I feel so many CEO types just stop after they got their first break. I believe that is a mistake. If a CEO made a few correct choices, and was successful their no dummy but I would not add them to my list of truly great CEO's.

The Long Time Great CEO

I feel the truly great CEO's are not know-it-all's, they a great processors of information. They truly believe they can not know it all. There is always more information to process. The less know-it-all CEO's will not answer questions directly. They might give you some big picture guiding principal, but they will also explain the factors that contribute to the question you are asking. A great CEO in my view, might not know the correct answer but knows all the possible inputs and knows all the possible outputs. A great CEO is a sponge of knowledge. I believe a great CEO can take all the soaked up knowledge and process it in a case study type fashion and make a decision. So many CEO's got lucky and made a few great decisions that got them where they are today. The great ones just use that first few lucky decisions as another input stream and continue to seek out other input streams as well.
 
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