The Looney Executive™

Blake Glenn

 

 

Do Emerging Growth Moguls Risk Too Much?

 

Self-financing, or bootstrapping, is the route that most emerging growth Moguls must take in order to launch their businesses.

Emerging Growth Moguls use retirement plans (I used my 401K), homes, bonds, and stocks (I did that too) for the seed money to launch their ideas.

And the glitz and glamour of the entrepreneur's lifestyle lures in thousands of naive busines adventurers each year, enticed by the sweet callings of the Siren's Song of the Business Mogul.

During my time in "the game", I've heard all sorts of terms to describe or justify the supposed risk that entrepreneur's "must take to be successful".

These include:

"It's a high-risk game baby"

"No risk ... no reward"

"You've got to be willing to risk it all"

"Big risk equals big returns"

Risk ... RisK ... RiSK ... RISK!!

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Beware The Siren's Song

In the tale of Ulysses, the sirens song enticed many ships to veer off course and crash into jagged rocks, ripping holes in their sides, causing them to plunge to the bottom of the cold, dark sea.

Even Ulysses nearly went insane listening to it!

A big problem is that, way too often, entrepreneurship is promoted as an intoxicating form of .... GAMBLING!

So, as you pursue your status as an Emerging Growth Mogul, here are some questions for you to ponder carefully:

1) How much is too much to give up in pursuit of your venture?

2) Will your venture be a pot-of-gold ... or will it be a siren's song that leads to jagged rocks?

 

For example, take a couple that was featured on the TV show Extreme Makeover in 2005.

The show was responsible for building these people a home at a reported value of $450,000.

The couple allegedly, in launching a business venture, offered the home as collateral for a loan.

The venture became their siren's song, as it sunk and took their home with it ... crashing into the jagged rocks of business catastrophe.

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Investing ... Not Gambling!

You should think of entrepreneurship in terms of investing, not gambling.

So, in evaluating a venture, you should ask:

• How much do I need to invest? 
• How much can I reasonably expect to make? 
•  What kind of return can I reasonably expect? 
•  Would my money and energy be better utilized in another investment, i.e., stocks, bonds, REITs, real estate, … etc.  
•   Would I be better off buying into the game via an existing venture rather than starting from scratch?

 

Of course, this more logical approach doesn't account for the unbridled enthusiasm that builds up inside and nearly consumes your senses!

I'm certainly not saying don't take a risk.

That's totally unavoidable.

All I'm saying is this,

Keep the enthisiasm, but approach your venture as an investment, because that's exactly what it is.

And that's how your investors will think of it too.

With any investment you must understand the risk and the potential rewards before jumping in.

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And we know one golden mantra of a great investor:

Don't Put All Of Your Eggs Into One Basket!

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Listen To our 1-on-1 Interviews With Emerging Growth Tech Players!

Blake Glenn is the Chief Looney Officer and Executive Producer of The Looney Executive brand. He's also the creator, host, and producer of The Looney Executive Emerging Growth interview series.

 

 

 

A Potential Financing Source For The Upstart Technology Tycoon

Blake Glenn 

 

 

Are you an emerging growth Tycoon leading a fast growth firm and a powerful desire to get development funding for a unique technology?

Or maybe you're a wannabe tycoon upstart that's still in the planning stage of venture launch. You think you have a great technology concept, but just need some start up financing to get rolling!

Well there's a not-so-well-known government program that might provide the start up financing you're seeking.

It's called the SBIR program.

SBIR = Small Business Innovative Research.

At least 11 federal government agencies participate in the program.

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And there's a sister program called STTR.

STTR = Small Business Technology Transfer.

Whereas SBIR facilitates the creation of technology by emerging growth technology firms on behalf of federal agencies, the STTR program facilitates the transfer of technology from non-profit research institutions to small technology businesses.

Both programs are administered by the U.S. Small Business Administration. And the SBA's mission is to help emerging tycoons take their rightful spot in Tycoon Paradise ... maybe someday displacing Bill Gates and Warren Buffett!

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The Criteria

The eligibility to participate in the SBIR programs includes the following:

• Be an independent American-owned company 
• Operate as a for-profit entity 
• The primary researcher responsible for the technology development must be an employee of your firm 
• You can't have more than 500 employees

 

STTR has very similar criteria.

How It Works

The SBIR program works in 3 phases.

• Phase I (Start Up). Your company can receive up to $100,000 for approximately 6 months support exploration of the technical merit or feasibility of an idea or technology.  

 

• Phase II (Research and Development). Your company can receive up to $750,000, for as many as 2 years. This is when you'll conduct the detailed research and development work. 

 

• Phase III (Commercialization). This is where the rubber really meets the road. It's time to market your technology and make some money!

Unfortuntaely, you'll not get SBIR funds in Phase III. But, on the upside, you can solicit private funds (e.g., angel financing, venture capital ... etc.) to make this phase successful.

The STTR program has similar phases.

 

So What's The Catch?

Catch you say?

Oh yea. Glad you asked.

It's quite simple really. You'll just have to compete with other hungreyTechnology Tycoons in order to win an award.

You see, participating federal government agencies (about 11 of them) periodically release solicitations for bids on technology projects that are important to them.

So you'll need to monitor these solicitations and decide which projects fit with your current technology or your change-the-world new concept.

Then you'll need to write a proposal explaning why you should get the deal ... and not some other upstart with a similar world-beating idea!

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But what the hell ... a little competition can only make you a better Technology Tycoon!

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By the way ... take a listen to my interviews with fast-growth technology players! 

 

Watch this short video about a NASA SBIR/STTR success!

 

 

 

 

 

 

 

Emerging Growth Mogul Defined!

Blake Glenn 

 

 

Do you remember what some old dude said way back when about pornography?

I think he was a poliitician or perhaps a Supreme Court justice.

Anyway, I'll paraphrase it here:

"I can't tell you what pornography is. But I'll know it when I see it"

 

That's almost the same way I feel about defining an emerging growth business.

In this blog I write about Moguls of all types, mostly business moguls of course. And many of them I refer to as "Emerging Growth Moguls".

I also interview business types of all stripes, especially in the tech arena. And many of them are certainly "emerging growth" entrepreneurs.

So this topic is close to my heart.

And I've had multiple conversations about this over the last year in particular. Some of them have become a little heated because a business operator might have seen his or her firm as "emerging growth", whereas I did not.

So basically, in these conversations/debates I attempted to lay out  a clear definition of what an emerging growth business is and who would be defined as an emerging growth mogul or entrepreneur.

 

So here's my awkward shot at a definition:

An emerging growth business is a firm that, at its core, wants to launch and grow a unique product or service in order to achieve any of the following goals:

 

• Be an early mover (perhaps first) that seeks a leading position in an emerging market or niche that's projected to grow rapidly 
• Quickly grab and grow a leading position in an existing market
• Create an emerging growth story that attracts "takeover sharks", usually much larger firms operating in the same industry
•  Raise significant angel, venture, or other outside equity financing to fund its fast growth  
•  Provide maximum liquidity for the firms' founders 

Cashin' Out!

Now the emerging growth business usually achieves this last objective via an initial public offering (IPO) or a sale to a larger firm.

And many times boys and girls, they're usually growing revenue as fast as humanly possible, lots of the time at the expense of profit.

Let me put that a different way.

Many times, though certainly not always, an emerging growth business will try to maximize revenue while having little concern for short-term profit. Again the objective is to hit the market fast and gain share rapidly. Sometimes that share is more mindshare than revenue.

Twitter is a great example of this! 

Holy IPO Batman!

Now is it possible for an operator to have rapid growth as her core objective ... and not be considered an emerging growth business?

That's an excellent question little Tammy.

Well the answer is yes, of course.

Say for instance, a woman wants to launch a typical tech integration business that focuses on government contracting.

In Washington, DC these are called "beltway bandits" and hundreds, maybe thousands, of them exist. And she sees a great opportunity for her service because the government is expanding outsourcing in certain areas. 

She has an excellent staff of tech types ready to do the integration work. They're at the top of their field. And they can grow fast.  

But Mrs. Entrepreneur and her team also are:

• Not creating and launching a really unique technology or service
• Not acquiring a unique technology that could be commercialized 
• Satisfied to reach a fairly low revenue plateau   (say $15,000,000)
• Not providing equity incentives for employees
• Not too concerned about an exit strategy

 

This isn't made up stuff. I've seen it many times with technology focused beltway bandits.

 

Sooo ... could this business be a real fast growing firm with rapid revenue growth and a leading market position?

Absolutely!

 

But is she an emerging growth mogul or entrepreneur?

I'd define her as a potentially wealthy small or mid-market operator ... definitely.

 

But an emerging growth entrepreneur?

I think not!

 

Listen To Looney Executive interviews with Emerging Growth entrepreneurs!

 

Here's an interview from World Business Review that discusses risk management as an emerging growth sector. 

 

 

 

 

 

The Resurrection And Sweet Revenge Of Technology Tycoon Eric Schmidt!

Blake Glenn

 

It's Alien verses Predator!

Google verses Microsoft pits the Big Behemoth of online search advertising (Google) against the Dark Emperor of the Desktop (Microsoft).

Microsoft entered the Google domain via its search advertising business.

Google is entering the Microsoft kingdom via its offering of online applications to compete with Microsoft's vaunted Office suite.

How exciting it is to watch this Battle of the Technology Bulge play out. And Microsoft's ad deal with Yahoo has upped the ante significantly!

But in this post, I'd like to focus on a key corporate Admiral in this fight.

His name is Eric Schmidt ... CEO of Google.

With a worth of over $4.4 Billion and a spot at No. 119 on the 2009 Forbes Billionaire List, Eric Schmidt is an Uber-Wealthy Technology Tycoon.

But it wasn't always that way ...

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The Corporate Wars of Eric Schmidt

One day long ago, Admiral Eric Schmidt washed up on the beach of a sleepy place called Google-town. The founders of Google-town, Larry Page and Sergey Brin, discovered Schmidt's battered body after the ocean waves dumped him onto the cold, sandy, winter beach of Google-town.

Admiral Schmidt had seen, and participated in, the ravages of corporate war, and had come out on the losing side ... beaten and bruised by a big competitor.

Off in the far distance, Page and Brin could see his corporate ship, ablaze and mangled by that big competitor's relentless assaults. It was adrift and rapidly taking on water, slowly sinking into the dark oblivion of the corporate ocean.

You see, Technology Tycoon Eric Schmidt had previously led a company called Novell.

Long ago, Novell was the dominant force in the market for local area networking software.

They had grown rapidly and the future was bright ...

Then one day, a giant enterprise that had for years ruled another land, glanced in Novell's direction.

It realized that Novell's kingdom offered big opportunities to make big really big bucks!

And, with a blitzkrieg-like strategy, this imperial foe launched a vicious assault upon the Land of Novell.

Corporate resources were aligned on both sides.

Intelligence officers were dispatched to gather key information.

Foot soldiers squared off to fight the marketing and PR skirmishes.

Money, and lots of it, was thrown into the clash.

Novell could not possibly compete on the money front.

And its market share was fast eroding.

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A New Day ... A New Kingdom

Eric Schmidt was hired in 1997 to lead Novell's forces in a last, desperate defense against their mighty enemy.

Unfortunately, it just was not to be. Novell's foe proved too powerful.

In a final fierce battle, Admiral Eric Schmidt's fleet was almost completely destroyed.

But Page and Brin of Google-town recognized Schmidt's talents and offered him the helm of Google.

Under his direction, Google became the ultimate powerhouse in the fast-growing Internet search engine market, with revenue of about $22,000,000,000!

And now Google-town has grown to become Google-Tropolis!

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Revenge Is Best Served With A Cold Search Ad!

In the process of building Google, Eric Schmidt opened up a can of whip-ass on the same company that had violently dislodged Novell from its former corporate kingdom ...

Microsoft!

 

Oh the irony of it all.

It's not that either Microsoft or Google are pristinely good or super evil.

It's just the Law of the Business Jungle.

Sometimes you and competitors spy the same opportunities.

And, in the ensuing melee, sometimes you win ... sometimes you get your ass kicked really bad ... It's survival of the fittest baby!

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Lessons ... Lessons ... Lessons!

The lesson is, as Technology Tycoon Eric Schmidt has learned,

Even if you get handed a can of supreme whip-ass by a foe,

If you hang around long enough, and persevere ...

Sometimes you get to return the favor!

 

Eric Schmidt's Carnegie Mellon Keynote Address

 

 

By Blake Glenn

 

 

The Cautionary Tale Of Jimmy The Mini-Mogul! 

 

In 2002 I was living the good life in LA. I was working as a business advisor with the Small Business Development Center (SBDC) network of Los Angeles County, CA.

 

SBDCs exist in every state to provide assistance with launching and growing a business. There is usually a statewide SBDC office, with regional offices scattered throughout the state.

 

Enter The Mini-Mogul

One of the SBDC offices I worked at was located in Van Nuys, CA, a stone's throw from Hollywood, and the boyhood home of Financial Mogul Michael Milken.

Because of my strong technology background, and a little experience with distressed businesses, I was unofficially designated as the "tech guy" and the "turnaround guy".

One particularly sunny day in the Spring of 2002, I was staring out of the window, California Dreamin', when a man walked into the SBDC office.

Let's call him Jimmy The Mini-Mogul.

Because Jimmy's business was in distress, and I was the "turnaround guy", he was shuttled to me for help.

Jimmy was maybe 5'10", slender build, thinning hairline.

But the most noticeable thing about Jimmy was his face.

It was deeply reddened, and spoke of deep anguish, the kind that keeps you up at night worrying and bolts your blood pressure to dangerous heights.

In fact, Jimmy looked so stressed that I kept a hand by the phone, ready to call 911!

 

I'm A Business Advisor ... And I'm Here To Help

Jimmy "The Mini-Mogul" told me all about his problems.

He owned a nuts and bolts supplier business (also called fasteners). It was truly a commodity business.

In the 3 to 4 years leading up to 2001, his firm had consistently been in the $1,000,000 to $1,200,000 revenue range.

But this was post-911. And his customers had severely cut back purchases.

Sales were down to $700,000 ... and he was in a panic!

In the ensuing weeks, here's what we did:

• Set up a spreadsheet to forecast and monitor cash flow 
• Identified all expenses that could be cut  
• Evaluated all assets that could be sold or leveraged to raise short-term capital  
• Established an aggressive marketing plan   
• Planned new services to package with his commodities 

 

The Moral Of The Story

The big relief for Jimmy "The Mini-Mogul" was seeing his true cash flow.

Yea, it had taken a big hit. But it wasn't as bad as he thought.

But Jimmy's biggest problem was not the post-911 reality.

 

It was a lack of pre-911 differentiation!

 

To customers, he looked just like his competitors. All the trees in the forest looked the same.

Since purchasing was based on nothing but price, customers could go to any competitor.

My advice to Jimmy, short of selectively buying out his competitors (which I did suggest), was :

Create a "compelling" product/service combo that separates him from the other little trees in the forest ... and target a higher margin but lower competition specialty. You'll still get hit in a downturn, but perhaps not as bad as all those un-differentiated competitors.  

About a year later I heard that Jimmy "The Mini-Mogul" was still surviving ... but hopefullly not still just another tree in the forest!

 

 

Can A Great Business Mogul Ever Really Fail 

By Blake Glenn

 

For The True Mogul Failure Is Always An Option ... Well Usually Anyway!

 

"I have not failed. I've just found 10,000 ways that won't work."

What well-known technology mogul do you think that quote is attributed to?

I'm not gonna give you the answer right now. But keep it in mind as you read this post.

A few weeks ago I was conversing with a good friend and business associate. His business was in a bit of a cash flow crisis because of, among other things, slow payments from customers.

This would-be technology business mogul was a bit anxious about the firm's short-term prospects as he had to cut back on staff ... and squeeze every penny until it cried for mercy, as bronze penny blood oozed from it's, uh, copper pores.

So as we discussed the situation, at one point my friend looked at me sternly and blurted out emphatically,

"Failure is not an damned option!"

Now I understood what he meant. This business was his lifeblood and he wouldn't let it fail.

But, as someone who's gone down in spectacular flames twice, I look at it a little differently.

Yes I crashed and burned. But I also walked away from those roaring white-hot flames each time, mostly intact. And I lived to fight, or crash yet again, another day.

And I learned a lot!

Then I started thinking about other business failures.

Here's a short list:

Michael Eisner

Pre-failure Success: 20-year stint as CEO/President of Disney.

Failure: Booted out by powerful shareholders and the Board of Directors after alleged mis-management and failure to move quickly on Internet opportunities

Revival: Reinvented as an Internet investor and web technology mogul

 

Steve Jobs

Pre-failure Success: Co-Founder of Apple Computer

Failure: Forced out of Apple after clashes with top management

Revival: Founded NeXT Computer - Sold to Apple for over $400,000,000; Took over animation studio Pixar - sold to Disney for over $7,000,000,000; Went back to Apple and led iPod launch

 

Donald Trump

Pre-failure Success: Real estate business mogul in NY city and Atlantic City

Failure: Three properties went into bankruptcy

Revival: Retains several prime properties; Reinvented as reality TV star on "The Apprentice"

I know what you're thinking.

It's easy for rich people to rebound from a failure. They already have the money and the contacts.

Can't disagree with that.

But failure is failure ... rich or not-so-rich.

In an upcoming post, I promise to I'll take a look at not-so-wealthy or famous people that failed and then revived.

In the meantime, remember the quote at the beginning of this post?

The person that spoke it was the inventor Thomas Edison.

By nature, inventors must fail in order to succeed!

So here are some of my thoughts about failure:

1) Always fail forward, i.e, learn from your mistakes and use them to take the next step. You might fail again ... but so the hell what!

2) The greatest failure of all ... is to not try in the first place!

3) Think like an inventor!