In January 1912, the United States emerged from a two-year recession. Nineteen more followed—along with a century of phenomenal economic growth. Americans in real terms are 700% wealthier today.

In hindsight it seems obvious that emerging technologies circa 1912—electrification, telephony, the dawn of the automobile age, the invention of stainless steel and the radio amplifier—would foster such growth. Yet even knowledgeable contemporary observers failed to grasp their transformational power.

In January 2012, we sit again on the cusp of three grand technological transformations with the potential to rival that of the past century. All find their epicenters in America: big data, smart manufacturing and the wireless revolution.

Information technology has entered a big-data era. Processing power and data storage are virtually free. A hand-held device, the iPhone, has computing power that shames the 1970s-era IBM mainframe. The Internet is evolving into the “cloud”—a network of thousands of data centers any one of which makes a 1990 supercomputer look antediluvian. From social media to medical revolutions anchored in metadata analyses, wherein astronomical feats of data crunching enable heretofore unimaginable services and businesses, we are on the cusp of unimaginable new markets.

The second transformation? Smart manufacturing. This is the first structural shift since Henry Ford launched the economic power of “mass production.” While we see evidence already in automation and information systems applied to supply-chain management, we are just entering an era where the very fabrication of physical things is revolutionized by emerging materials science. Engineers will soon design and build from the molecular level, optimizing features and even creating new materials, radically improving quality and reducing waste.

via Mark Mills and Julio Ottino: The Coming Tech-led Boom – WSJ.com.

The Start-up of You by Reid Hoffman and Ben Casnocha

Last week I received a signed copy of The Start-up of You by Reid Hoffman, the co-founder and chairman of LinkedIn, a site that just hit 150 million users! On its debut today, it hit #1 on Amazon, which is no surprise since Reid has built up an enormous and influential network over years of hard work and dedication. He co-authored the book with another Silicon Valley entrepreneur and blogger, Ben Casnocha.

Subscribe to my updates at Facebook.com/DanSchawbel.

The book explains how you have to treat your career as you would a start-up company. Even if you don’t want to start a company, the lessons you will learn throughout the book will help you advance in your career. You need to invest in yourself, build strong relationships and take risks if you want to make it in corporate America or start-up America. Here are ten quotes that stood out to me while reading this amazing book:

1. “All humans are entrepreneurs not because they should start companies but because the will to create is encoded in human DNA.”

2. “Entrepreneurship is a life idea, not a stricly business one; a global idea, not a strictly American one.”

3. “Before dreaming about the future or marking plans, you need to articulate what you already have going for you – as entrepreneurs do.”

4. “When you’re doing work you care about, you are able to work harder and better.”

5. “You remake yourself as you grow and as the world changes. Your identity doesn’t get found. It emerges.”

6. “Whatever the situation, actions, not plans, generate lessons that help you test your hypotheses against reality.”

7. “No matter how brilliant your mind or strategy, if you’re playing a solo game, you’ll always lose out to a team.”

8. “The fastest way to change yourself is to hang out with people who are already the way you want to be.”

9. “If you want to build a strong network that will help you move ahead in your career, it’s vital to first take stock of the connections you already have.”

10. “What will get you somewhere is being able to access the information you need, when you need it.”

Subscribe to my updates at Facebook.com/DanSchawbel.

Dan Schawbel, recognized as a “personal branding guru” by The New York Times, is the Managing Partner of Millennial Branding, a full-service personal branding agency. Dan is the author of Me 2.0: 4 Steps to Building Your Future, the founder of the Personal Branding Blog, and publisher of Personal Branding Magazine.

10 Memorable Quotes From The Start-up of YOU – Forbes.

PiedPatter (aka/ @DefenseGirl35 on Twitter) is one of the most brilliant bloggers on the planet.  That isn’t my opinion by the way – it just plain fact.

She has written a brilliant piece that she has allowed me to repost on PolitiJim.  It is about micro managing and the lessons we can learn from how Princess Leia. (You had me at “space bikini.”) 

Leadership Issues Plagued Rebel Alliance, Prolonged War

February 9, 2012 by piedpatter

Ron Ashkenas writes in his article Why People Micromanage, “Over the past few decades I’ve worked with hundreds of managers, and many complain that they work for micromanagers. But strangely I don’t recall anyone who ever admitted to being one.”  The problem with this approach is beautifully articulated in this Avoiding Micromanaging quote, “Micromanagers take perfectly positive attributes – an attention to detail and a hands-on attitude – to the extreme. Either because they’re control-obsessed, or because they feel driven to push everyone around them to success, micromanagers risk disempowering their colleagues. They ruin their colleagues’ confidence, hurt their performance, and frustrate them to the point where they quit.”  This was really what lay at the heart of the Rebel Alliance’s failure to secure victory for so long.  A micromanager whose management style eventually drove Han Solo to quit.  If you look at the organizational chart below (not comprehensive), you can see there was only one person in charge of like everyone, and it made no logical sense to have her in charge.

Why was Princess Leia briefing X-Wing fighters about the tactical assault on the Death Star? (h/t Family Guy for pointing out the absurdity).  Was she a pilot?  Did she pick off rat thingy’s in Beggars Canyon back home that weren’t much bigger than 2 meters? No. She was adopted by some Senator and handed the title of Princess, and it was never made clear why. (Don’t send emails explaining how this happened, I don’t really care)

Had the rebels had a better sense of who was in charge, they would have found the confidence they needed to succeed and push through to victory sooner.  One author said it this way, “Poor organization structure and work processes (in other words poor organization design) stop many organization’s from achieving high performance. Unfortunately many leaders think of organization design as something done by the H.R boffins.”  Perhaps Princess Leia felt the same way, she would just let the boffins take care of the rebel’s performance issues.  Or maybe she simply failed to see her role in the problem.  Whatever the reason, the question remains, why the hell was she in charge?

Let’s now take a look at the Empire.  You’ll recall they had some strategic victories against the rebels, Hoth not the least of which.  But why should it be that they had such marked successes?  They were after all evil.  Well, they had some distinct advantages, the Death Star for one.  But the also had an impressive organizational structure, where the chain of command was clearly defined.  See below:

Unless you were stupid or dead, no one could have been confused by this.  It was simple and straightforward.  The other advantage was the ability of the Emperor to delegate responsibility to Darth Vader.  He new the dark side of the Force was strong with Vader, this skill set allowed the Emperor to build the evil bond of trust which was so vital to the mission of crushing the rebels.  Finally, the Death Star was tidy.  Kyra Sheahan puts it’s this way, “Working in an office environment that is neat and tidy will reduce the amount of time you spend hunting files down, and increase your ability to get things done.”  The insistence of the leadership to keep the Death Star clean was evident on all levels, from the garbage dumping before jumping into hyperdrive, to cleaning up dead generals after Vader Force choked them.

In the end, the rebels were victorious.  Their righteous cause and huge assist from Wookies and teddy bears could not be thwarted no matter how illogical and token Princess Leia was as a leader.  She did unfreeze Han Solo and kill Jabba the Hut in a space bikini, to her credit, but her failure to step out of the way, only prolonged the war unnecessarily.  Had she done so, we may have all been spared the Ewoks. 

Why even have those things?

WHY?

Suffice it to say I’m a smart enough bird not to answer PiedPatter’s question with the obvious male perspective of women and instructions.  Yes. I am too smart to even mention that.

–Original article posted at PiedPatter’s blog. PLEASE SUBSCRIBE to her blog.

What to Do When You Underbid on a Project.

Congress is considering exemptions to decades-old securities regulations as a way to throw open the doors to entrepreneurs who want to legally sell equity stakes in their start-ups over the Internet.

But some, such as Jared Hardy, co-founder of a North Dakota beer start-up, aren’t waiting for Congress to act.

Mr. Hardy is among a small but growing number of small-business pioneers already cracking open those doors, by raising capital through the online social-networking process known as “equity-based crowd-funding.”

Nine months ago, Mr. Hardy and three co-founders raised $41,000 from 17 investors on a fledgling equity crowd-funding site called ProFounder to launch Fargo Beer Co. in Fargo, N.D.

The effort has turned out well for Mr. Hardy and his business, so far. “My only regret now is that we couldn’t go bigger,” he says.

“They were acting as a broker without being licensed as a broker dealer,” says Preston DuFauchard, the commissioner for the California Department of Corporations.

In August, the state agency issued a formal consent order to ProFounder to “desist and refrain” from engaging in securities transactions without registering as a broker dealer, he adds, forcing the site to regroup.

Read the full article here: Crowd-Funding Brings Unease

If the American tax payers had a firm like A Big Corporation to evaluate the potential risk and reward of guaranteeing a loan for Solyndra, federal income taxes on sixty-two thousand (62,000) families could have been saved for an entire year.  In full disclosure I suppose I should point out that this article is a self-serving pitch for investors to engage ABC to evaluate prospective or non-performing investments.  But even if you are Warren Buffett reincarnated (or Warren Buffett) and don’t feel you need advice, how an investor looks at an investment isn’t quite as clear as one might think.

There are many points to be made for the small to mid-range investor in this bedtime nightmare story.   But let’s focus on just one.  That being,  no matter what the reason, overriding good market and financial analysis can have  consequences.  And not always bad.  I will steer clear of the issue as to whether the American tax payer should be subsidizing private business.  There are plenty of opinions you can read on that including this one.   The Solyndra story is a cautionary tale how politicians overrode the Department of Energy’s recommendation to NOT guarantee a loan by merely analyzing existing financials and market projections.  What does this have to do with you, Mr. or Ms. Investor?  A lot.  Whether you have an investment partner who just has a “gut” feeling, or you yourself have been so compelled by the investment pitch you “feel” this is a good investment, Solyndra is a reminder that numbers matter.

In this case we had an existing business which actually made the analysis much easier than a start-up.  We had a client referred to us by our CPA firm who was going to invest in a movie.  (I know, right?)  The director was the son of a very well-known leader and some big name stars were already “attached” to the production.  Our investor was told they only needed another $3 million to complete the $20 million production budget and wanted to know what the chances were of seeing that money returned. Upon very quick investigation we learned that the film had no distribution partner and no funds to actually market the movie once it was made.  It’s not dissimilar to the biowaste technologies that pitch for $20 Million to “prove” the first plant and then, of course, customers will clog the driveway to buy the product and build these from Indiana to Iceland.   In this event the chances of the film actually being “good” was a complete toss-up, but at $20 Million, it would be near impossible to break even if they could find a buyer and international buyers prior to a US release.  AND THEY HAD NO MONEY FOR A US RELEASE.  Our advice?  Pledge the $3 million contingent upon a major distribution deal in place, or an additional $10 Million in marketing money.  Of course, he just “had” to be in the movie business so it is my guess that his Red Cross, Salvation Army and Keep My Wife Happy With New Jewelry all missed out a major contribution that year.

But in case you think I am only about the “X’s” and “O’s,” I will tell you another side of the two-edged tale.  Although they weren’t clients, I personally came to know two investing gentlemen who, when presented with two completely separate business opportunities,  did do their research and then some.  After careful analysis BOTH decided they were highly speculative ventures.  The first was an arrogant college kid showing a computer technology out of the trunk of a beat up Ford and the other was a small time restaurant owner who wanted to make a national franchise.  Neither had a compelling case for the markets they were entering, no real track record and a ton of unknowns that wouldn’t be evident until AFTER the money was spent.  It doesn’t hurt the point of our story at all that these two gentleman made the sound and wise decision to not invest passing up a ground floor opportunity on Apple and Starbucks.

The issue to us isn’t whether an investment is 100% totally guaranteed.  Nothing is.  Even an analysis of risk/return can be arbitrary since it is contingent on so many factors of execution.  But to some investors, understanding WHY they really want to invest, can be as important as the analysis of the business opportunity itself.  We all know people who would easily spend $3 Million just to “say” they “in showbiz” or to feel the thrill of being introduced as the “money man” to a Hollywood star.  Had they come to us, we could have given them the same or a bigger thrill and actually been a part of three movies.  But many of us don’t admit our REAL agenda until after the money is gone.

A Big Corporation Consulting has experts in many industries from energy to entertainment, technology to trash reclamation.  Whether you are an investor looking for the right opportunity for your needs, an investor evaluating an existing opportunity or an investor looking to package and obtain funding for a project you are attached to, give us a call.  We promise it will be at least entertaining – if not educational.

]]> http://abigcorporation.wordpress.com/2011/11/17/why-investors-need-due-diligence-consultants/feed/ 0 rightjb Solyndra-logo To End All Wars http://abigcorporation.wordpress.com/2011/10/13/angel-investing-rose-4-7-in-the-first-half-of-2011/ http://abigcorporation.wordpress.com/2011/10/13/angel-investing-rose-4-7-in-the-first-half-of-2011/#comments Fri, 14 Oct 2011 02:24:32 +0000 A Big Corporation http://abigcorporation.wordpress.com/?p=56 ]]> Angel Investing Rose 4.7% In The First Half Of Year

Angel investments rose 4.7% during the first half of the year to $8.9 billion as angels shifted their attention back to seed and startup deals.

A total of 26,300 companies and entrepreneurial initiatives received money, which was up 4.4% from the same period in 2010, according to a study by the Center for Venture Research at the University of New Hampshire.

The work found 124,900 active angels and an average deal size of $338,400. The number of angels was largely unchanged over the year while the deal size crept up from $337,300.

During the six-month period, angels shifted to earlier stage deals. More than a third of investments (39%) were in seed and start-up stage companies, an increase of 13%, the University of New Hampshire study found. There was a corresponding decrease in early and expansion stage fundings.

First sequence investments represented 49% of the total.

Life sciences investing received strong interest. Health care and medical devices accounted for the largest share of investments, or 25%. The industrial/energy category accounted for 17%, followed by biotech, 14%; software, 11%; media, 8%; and retail, 8%.

See article here.

Short video with some interesting points.

• Untested, product with insufficient demand.

• Faulty or inconsistent access to supply for product creation.

• Faulty or inconsistent access to the market for product.
• Insufficient Capital for reasonable errors & oversights and operation
• Inexperienced or unskilled managers and workers.
• Organization/Ownership structures which tend to create conflict through unclear lines of responsibility and authority.
• Inferior or inadequate infrastructure of accounting, legal and administrative services.

(just because your mom thinks it is brilliant doesn’t make it so.)

Like Petsmart, and Edsel, history is filled with the names of those who moved on faith in the absence of fact.  A great example of this is a vitamin/mineral product called Colloidal Minerals.  For years, many companies poured money to take advantage of the great benefits of this project to no effect.  No matter what great study was released proving its value, they just couldn’t get people to buy it.  Then a company called NEW VISION came along and added fruit juice to it, cutting the bitter taste.  The 1st year of full production the company made COMPANY of the Year from numerous organizations and grossed $50 million in sales.  There are 3 additional qualifications beyond customer acceptance which we will cover in another article.

Access to supply.
(One word – FIRESTONE.)

The management process and business model to GET the raw materials for your product is just as important as the material itself.  This includes the raw materials for service companies – PEOPLE!  If your plan says you are going to make $20 million in revenue your first year, you had better have experienced management to show the investors that have hired, built and managed such a fast growing environment from staffing to operations to publicity.

Access to the market.
(better ways to beat a path to your door.)

Distribution, sales and marketing don’t just happen.  If you have a software package for businesses – you’d better be prepared to explain why the CTO of a major corporation will take a meeting with you when he turns down 20 other appoints from people like ORACLE every day.  AOL has never had the best service, the best browser or the best product.  Yet they understood from the beginning how to buy, partner or joint venture with anyone and everyone that would feed their bigger engine.  Their target marketing is unsurpassed by any other ISP including MSN.  They not only HAD a market for their product – they knew how to get to it.

Insufficient capital.
(it takes money to make money.)

Many investors won’t even look at your project unless someone else has invested 5% of what they are considering.   Few will NOT want to have control, if they are the most significant money at risk.  However, equal to this, WISE investors also know that sh*t happens.  Having an insufficient budget to accomplish each phase of your build out is a tell tale sign that you do NOT know your business.  There are MANY ways to design investment agreements that satisfy BOTH entrepreneur and investor.

Inexperienced or unskilled management.
(management is THE deal maker.)

A PBS special recently interviewed Warren Buffet and Bill Gates. Buffet made a great comment.  He said he would invest in an average product in a mature market with great experienced management over a great product in an untapped market with inexperienced management any day of the week.  You cannot underestimate the cumulative analysis, judgment and intuition of each individual area of operation and management in your company that men and women have spent 20 or more years fighting through.  The dotcom debacle is an excellent example of this.  The rules still remain the same.

Bad organizational structure.
(leave enough of the pie for dinner.)

Someone HAS to have the vision for the company.  Rarely does a team of entrepreneurs or managers adequately guide a company past one or two stages without conflict.  The longer the person that has the vision remains in control – the better.  I know one guy who gave away 30% of his company to a potential CFO to get it going. When he learned that he needed a stronger, more experienced CTO, CMO, SEC coordinator and COO – he literally had to give up voting control of the company before the product ever came out of the door.  OTHERS make the opposite mistake and don’t offer enough incentive for key people and investors to stick with the game plan.  A strategic plan for ownership is key.

Lack of necessary infrastructure.
(just because your mom thinks it is brilliant doesn’t make it so.)

You never appreciate how important the bean counters are until you’ve had a bad one or have to try and do it yourself. (apologies to you geeks who actually ENJOY staring at number all day.  We love you.  Really).    Adequate & reasonable office space, systems, etc. must be planned for in advance.  One missed paycheck isn’t too bad.  Two and you might loose a work force.  It seems pretty basic but major generals throughout history have identified infrastructure as the foundation of any campaign.  (Why do you think taking out supply lines is such a big deal!)

Plan, strategize and even meditate on these each of these 7 areas.  As we say over and over: The planning process IS NOT to have a document or a presentation for an investor or lender.  It is for YOU to be sure of your own plan – the reasons for it -and the indicators/assumptions that you must monitor as your execute this plan going forward.

(Special thanks to Mr. Steve Rannells)

For more information contact: Jim Ballew

310-737-8585