… nor am I a conservative. If you need to give me a label I prefer “Progressive”, but be certain you know what I mean when I say that. Continue reading “I am not a Liberal …”
An on-going ponder for me is the difference between managers and entrepreneurs as classified by The E-Myth Revisited. One way to distinguish between the two may be by observing their relationship to the investors in their companies. A manager behaves like an employee of the company. This is particularly true in established companies where the shareholders hire a board of directors, the board of directors hire a CEO and the CEO or his or her delegates hire everyone else.
In contrast an entrepreneur is focused on realizing a vision of generating value. The simple rule-of-thumb for accomplishing this is an idea, skills, and money. In other words, money is just a component of the system they’re creating to generate the hoped for value. As such, investors are a supplier. They are not employers.
In any supplier/consumer relationship the consumer trades an asset that the supplier wants for a an asset that a supplier has that a consumer wants. Unfortunately, the asset often traded during business creation is an equity stake in the company. When this occurs the investor becomes a co-owner of the enterprise. This is fine if they also share the vision for the value creation system that the entrepreneur is building. When they don’t then it becomes death by a thousand cuts and eventually the business dies due to incompatible interests. Institutional investors, by the way, are particularly inept at building and sustaining value generating systems.
It’s my opinion that when building a business you should spend as much attention to selecting your investors as you do to selecting your employees; particularly if you’re trading equity. This, of course, may call into question the value of going public. Yes, you’re likely to get a large injection of cash, but at what cost?
It’s time I wrote something about ACOILUSD. I have this conversation frequently with my colleagues in Brazil and elsewhere and I just had it again with a chef friend of mine over drinks at a local bar1. If you interact with any other human beings then you produce products and ACOILUSD matters to you. Continue reading “ACOILUSD”
I keep trying to wrap my head around what a complete business structure looks like. Continue reading “General Business Structure”
Pondering entrepreneuring it seems like there’s a difference in approach available to startups and established enterprises. Continue reading “Aspects of Entrepreneuring”
I’ve been grumpy with people who received their MBAs in the 1970s and 1980s for a very long time. Nice people but how long is it going to take before you realise that the short term profit focused approach just doesn’t work. At best it results in a race-to-the-bottom slow death. At worst businesses and economies become fragile to the point of not being able to withstand the changes in their circumstances which leads to catastrophic destruction.
To be fair though, a lot of what they’ve been trained in is based on what we’re finally discovering is pretty weak economic theory. Kahneman explores some of this in Thinking Fast and Slow when he compares “Econs” with “Humans”. The inadequate models based on ideal economic participants are poorly predictive and are likely at to root of why economists sometimes have a bad reputation.
Relief may be in sight though (i.e. we as a society may be getting a clue). There’s a wonderful writeup in the McKinsey Quarterly titled Redefining Capitalism that explores and adjusts our perceptions of capitalism and, among other things, the role that democracy plays as a regulator for capitalisms weaknesses. I’m still be skeptical about the efficacy of democracy (yes there are worse systems, but that doesn’t mean democracy is the best), but that can be saved for later. Read the article. It’s quite good.
“When I came to IBM I was a guy who believed in strategy and analysis. What I learned was that corporate culture is not part of the game: It is the game.”
– Louis V. Gerstner Jr., Who Says Elephants Can’t Dance?: Inside IBM’s Historic Turnaround, New York, NY: HarperBusiness, 2002.
Ironically Hawkspring Photography has the same initials as the rather larger company that I currently work for. Continue reading “HP: Admin”
For quite awhile now I’ve been wanting to assemble an internet business. Continue reading “Internet Business Venture”