Happy New Years

I wanted to share the following song, as it is a favorite of mine as I find myself looking back at one year and looking forward to another.....



I want to wish all my readers a 2012 that is filled with opportunities to grow and move forward!

I also want to let you know that I will begin posting on a regular basis; that's a promise not a New Year's resolution!

Innovation - Commercializing Art

If you have been in tee shirts and apparel any length of time you naturally development relationships with artists and I have known some really awesome artists.

There was a time with screen printed tees could be sold wholesale at $9 to $10 each and the market could not get enough of these lines; it was the golden era for artists and lines of screenprinted tees.

From time to time I am contacted by artists with a line of tee shirt art and a contract for royalties, oh, and I think how 20th century!

Then you find an artist that is using the internet in new and exciting ways to promote and sell their art.  My favorite is TEKSTartist and here is a sample of his art:



A few years ago I stumbled upon a company called, I Wear Your Shirt, which was such a wacky idea that you just knew it would be a big hit, and what started as one guy promoting your product via wearing your tee shirts and promoting it on social media has now become a full fledged company.

Well, TEKSTartist has adopted the same business model for himself and his art:

Its great to see people allowing the opportunity that the internet and social media provides to lead them to embrace the opportunity in new ways.  It seems that we continue to want to have technology conform to our old ways of doing things rather than allowing it to create new ways of doing old things.

Paying With Cash for Online and Mobile Transactions

A start up in Des Moines, Iowa has found a way for online and mobile payments to be made from your bank account at a fee of only 25 cents per cash transfer; read about it here:  The 28-year old Out To Kill Credit Cards!

If anything represents a true "changing the world" technology, then this start up is a sure revolution.

For all retailers tired of paying 3 to 4% per transaction this represents an ideal opportunity.

Visit their website at DWOLLA.

Here is information on their mobile application:

And, finally, information on their location based mobile payment system:

Thinking About "Value"

More consumers opened accounts at Credit Unions since Bank of America announced its new debit card fee than were opened in all of 2010.

Credit Unions have added 4.5 Billion dollars in new savings accounts since September 27th:

"More than four in every five credit unions experiencing growth since Sept. 29 attributed the growth to consumer reaction to new fees imposed by banks, or a combination of consumer reactions to the new bank fees plus the social media-inspired Bank Transfer Day," the association said in a statement.


Christian said she did not intend to start a big movement when she shared her plans with her 500 Facebook friends. But as of Friday, 77,327 people have said via Facebook that they will "attend" the movement's Nov. 5 event.

The reality is that while we are viewing Occupy Wall Street and the various subsidiary protests as political movements we may, especially those in business, want to begin to accept these protests as a social movement.

Regardless of one's personal beliefs and or opinions, there is no denying that these recent protests are growing, have a worldwide focus, represent a broad spectrum of issues, encompass a broad demographic base, and are not going away anytime soon.

Successful businesses have to look toward the future and plan accordingly; and thus ask the question, "...what if these current protests represent the beginning of a fundamental shift in consumers?"

What if the concept of "value" is changing from low cost and mass consumption to something totally different?  

What if we are witnessing a fundamental shift from a "Wally World" economy to one where consumers demand a concept of value that does not involve only price?

What if the future belongs to "B Corporations?" Or, corporations that are founded on the following principles:

B Corps, unlike traditional businesses:


Meet comprehensive and transparent social and environmental performance standards;
Meet higher legal accountability standards;
Build business constituency for good business.

What if consumers begin to expect corporations to not only provide product and services but also engage in solving social and environmental problems?

Maybe, as Steve Jobs noted;

Jump To The Next Curve:

Big wins happen when you go beyond better sameness. The best daisy-wheel printer companies were introducing new fonts in more sizes. Apple introduced the next curve: laser printing. Think of ice harvesters, ice factories, and refrigerator companies. Ice 1.0, 2.0, and 3.0. Are you still harvesting ice during the winter from a frozen pond?

Which side of this new curve will you find yourself and your company on?

The reality is this new curve is here.  Patagonia has announced a new program that asks its customers to buy less by instituting a program to resell and or repair their existing Patagonia products.  Starbucks, which has been hugely successful by being ahead of the curve in a variety of areas has taken the lead in sponsoring a program of holding off on political contributions and now creating jobs in the United States.

Again, from Steve Jobs;

“Value” Is Different From "Price:"

Woe unto you if you decide everything based on price. Even more woe unto you if you compete solely on price. Price is not all that matters—what is important, at least to some people, is value. And value takes into account training, support, and the intrinsic joy of using the best tool that’s made. It’s pretty safe to say that no one buys Apple products because of their low price.

The concept of "brand" has always been about "lifestyle" and maybe now the concept of lifestyle is no longer about image but more about substance.  Maybe now the concept of "brand" has to be more a mission statement rather than a marketing tool?

"Pattern Making" And Success

What does it take to be an entrepreneur?  Or, should all venture capitalists actually have experience at starting a company? 

In a recent blog post, Want To Be A VC?  Start A Company, Fred Wilson, who in my humble opinion is truly an "outlier," which is a complement of the highest degree that I bestow on few people, wrote about how he agrees that successful VC's need to have start up experience.  He has also written, in another post, Program Or Be Programmed, that one needs programming experience.

If you calculated the years it would take to acquire all the skill sets necessary to be successful then you would realize that no one under 50 could ever dream of starting a company, being a VC, or being successful.  Its like teaching entrepreneurship in college; exactly what classes would you have to add to your curriculum to truly prepare students to be entrepreneurs?  If you ask successful entrepreneurs they would tell you that success is due to "passion," "vision," and "people skills."  Yet our colleges come up with required classes like this.

Not real sure, within that curriculum, where a student of entrepreneurship would learn how to be passionate, or visionary, or come to understand how to motivate and lead people, oh, and shouldn't a class on "Ethics And Critical Thought" be taught by the Philosophy department rather than the Management department?

That then brings us to the concept of "Meritocracy" and the recent special by CNN:  Silicon Valley Is No Meritocracy For Minorities.  In the article the author states:

But I firmly believe, based on my 25 years in this industry, that market makers, both investors and the people who help you get ready to approach them, seek out entrepreneurs who appeal to them on some less than objective, visceral level, who feel "comfortable" to them. They don't need to actively filter out undesirable profiles. They just focus on what does appeal to them. They focus on the "patterns" they find appealing -- age is arguably a part of many investors' ideal pattern, but so are perhaps unacknowledged criteria like race, gender, cultural affinity, etc. On some level this should not be shocking, as it reflects socialization that all of us must work hard and consciously not to act on.

Patterns....

Yes, we all seek out "patterns" that reaffirm our own biases.  Of course a 20 something tech start up founder is going to believe that success is tied to being 20 something.  Just like an MBA is going to believe that success is tied to earning an MBA; and I have yet to meet a CPA who didn't believe they hung the moon!  The idea that taking up golf as a great way to move up in the world or the old saying, "...its not what you know but rather who you know that makes all the difference" is all socialization, its all bias', and its all about patterns.

The reality is that success may come from questioning ones own bias more than seeking out that which reinforces them; there may be safety in seeking reaffirmation but not necessarily success.  If skill set was all that was required then we could easily clone or program our way into success; but what if knowledge, experience, and success were more of an art than a science?

        

Niches

Kraft announced that it was splitting up; separating its groceries from its snacks, 18 months after acquiring the candy giant, Cadbury.  Or as this article puts it;

"The plan, which would create a $32 billion international snacks business, including Cadbury, Oreo and Trident brands, and a $16 billion North American grocery business, which will include Kraft Macaroni and Cheese, Oscar Mayer, Philadelphia, Maxwell House, Jell-O and other non-snack brands, seems to be a financial move, designed in part to please activist investors who have called for the company to separate its high-growth global snack brands from its slower-growing, more mature grocery brands. But it also holds lessons for multinational marketers, looking to drive value in fast-growing emerging countries."

Basically,  for small businesses this is a very interesting and hopeful trend among dominant players in particular industries.  It is an acknowledgement that sales growth in the future will occur in emerging countries and that the United States is a mature market.  It also acknowledges that globalization does not bode the end of local and or regional differences; most of what Kraft considers to be brands with international appeal are thus because they do not require refrigeration and or further preparation.

This  will create a tremendous amount of opportunities for small businesses as it will create niches; or segments of a market/industry that are under served.  No dominant player in a market and or industry can be everything to everyone, and that can create opportunities for small businesses.

Being small or specializing can be intimidating; its hard to fathom, in a world of Facebook, Walmart, and Wall Street, how one can be successful as a small, niche provider of a service and or a product.  But remember, in less than four weeks, the Occupy Wall Street protests have expanded from NYC to 951 protests in 82 different countries.

Serving a niche market in an era of "too big to fail," a term that applies to so many companies in a variety of industries today, has natural barriers of entry or moats.  Serving a niche market in an era of "too big to fail" is also a great way to establish and ensure consumer loyalty; there is only brand recognition when one is everything to everyone but their is product loyalty when one is special to a few.

Niches are nothing more than obvious communities; a term in vogue in the "changing the world" mentality of the innovation leaders of social media and the internet.  Niches, just like communities, can be defined by geography, demographics, or shared interests.

In a world where companies are accustomed to annual sales of hundred of millions of dollars a year, or billions a year, a niche market that can generate millions in sales is just something that they cannot exploit to their benefit.  Regardless of how obvious, how logical, and or how profitable.  Thus, "too big to fail" becomes a barrier of entry!

Thoughts On Steve Jobs And Being Different

With the passing of Steve Jobs its quite obvious that not too many people knew all that much about him; I can only wonder with the release of his official biography slated for October 24th if we will get any clearer picture of the man.

On one hand, we are told that he was a tyrant and a bully, but for a multitude, he was a genius, worthy of imitating.  Sadly, imitating and or learning from Steve Jobs will not benefit anyone, because he marched to his own "drummer," and to learn anything from Steve would require one to find their own "drummer" rather than attempting to duplicate someone else's.

As Steve said:

“Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition.”

The truth of the matter is most of us do not have our own "inner voice" nor do we, "...have the courage to follow your heart and intuition."  In Buddhism this is reflected as the lotus:

"The lotus (Sanskrit and Tibetan padma) is one of the Eight Auspicious Symbols and one of the most poignant representations of Buddhist teaching.

The roots of a lotus are in the mud, the stem grows up through the water, and the heavily scented flower lies pristinely above the water, basking in the sunlight. This pattern of growth signifies the progress of the soul from the primeval mud of materialism, through the waters of experience, and into the bright sunshine of enlightenment.

Though there are other water plants that bloom above the water, it is only the lotus which, owing to the strength of its stem, regularly rises eight to twelve inches above the surface.

According to the Lalitavistara, "the spirit of the best of men is spotless, like the lotus in the muddy water which does not adhere to it."

According to another scholar, 'in esoteric Buddhism, the heart of the beings is like an unopened lotus: when the virtues of the Buddha develop therein, the lotus blossoms; that is why the Buddha sits on a lotus bloom.' "

 In a world that is championing "consumer centric," "individualization and customization," and the need to "interact" with the consumer Steve Jobs stated very bluntly,

“You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.”

How many people can honestly say:

“I was worth over $1,000,000 when I was 23, and over $10,000,000 when I was 24, and over $100,000,000 when I was 25, and it wasn’t that important because I never did it for the money.”

Very few have any comprehension of what "...it wasn't that important because I never did it for the money..." feels like or even means.

Fitting in and going along is more apt to bring one success than having the courage to listen to your inner voice.  On one hand people will promote change, innovation, and talk about changing the world only to also want to promote political beliefs that are 235 years old.  Never quite understood why people who make a living in technology and its promise for a better future would be so willing to promote the promise of the past in their political beliefs.  If the horse and buggy is not a viable option for transportation today then why do we want to believe that the thoughts and ideas of our Founding Fathers are the answer for all that ails us politically.  If simpler, smaller, and traditional works as a solution in one part of your life then why does it not work in all parts of your life?

No, lets respect Steve Jobs and rather than attempt to imitate him, lets try to learn to recognize those among us who, "Don't let the noise of others' opinions drown out your own inner voice.  And most important, have the courage to follow your heart and intuition."  Let's seek them out and nurture them.  Lets have the strength to understand them rather than scorn them.  In closing, lets remember:

“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.” 

Steve Jobs

I encountered Steve Jobs for the first time in 1985 with the Macintosh 128K; this was the first and last encounter I have had with an Apple product.

Over the years I have watched Steve Jobs and admired his vision, his focus, and admired the sheer power of his personality.

For those of us who have grew up with the generation that included Steve Jobs and Bill Gates, we have seen numerous people heralded as innovators and visionaries but the reality is that Steve Jobs was a titan on any list of great tech visionaries.

A quote from a 2005 Stanford Commencement address was not only advice to the graduates but it also sums up Steve Jobs in his own words:

“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.”

Steve Jobs, a man who never settled.  Thank you, not only for the great products, but also for inspiring those of us who refuse to settle.

Fall....

Is Employee Morale Overrated?

I noticed that someone searched for my blog with, "Is employee morale overrated..."  I had to stop and think about it!  I mean that is an odd question, but yet you have to think about it.

Employee morale?  If the searcher meant a definition of morale that signified happiness or satisfaction, then yes, it could be overrated.  If the term morale was used in the classical sense of the word, as ‘espirit de corps,’ then by no means and at no time can employee morale be overrated.

The concept of morale has always been primarily a military term, but militaries are nothing more than organizations with a goal, and as such the concept of ‘espirit de corps’ applies equally to all organizations.  Of course the history of war is full of examples of armies suffering from low pay or no pay, poor rations, and horrendous working conditions, but still with high spirits achieved unbelievable results; the American Revolutionary War is a classic example.

In the workplace the key drivers of employee morale are:

• Job Security
• Management Style
• Staff feeling that their contribution is valued by their employer
• Realistic opportunities for merit-based promotion
• The perceived social or economic value of the work being done by the organization as a whole
• The perceived status of the work being done by the organization as a whole
• Team composition
• The work culture

One cannot buy morale or ‘espirt de corps’ with wages, benefits, and cafeterias with free food, or lattes at will; morale is instilled from within an organization and an individual employee.  Being a “cool” place to work is not morale, nor should weekly pizza parties be viewed as an example of team building.

 I spent three days at a printing facility recently where the plant employees work 12 hour shifts doing work that is hard physically and mentally tedious.  Were the employees ‘happy?” or were they “satisfied?”  One couldn’t really tell because there was very little communication among the employees, realistically the work was very unfulfilling and of low esteem.  But, the ‘espirit de corps’ was sky high!  They had jobs to do, tasks that had to be accomplished, and there was little to no floor management. 

Not one employee missed work or reported late.  Every employee gets a five minute break every hour, a ten minute break every two hours, and a twenty minute lunch, which are all paid and not once did anyone leave early or return late. 

Wives and husbands were actually hired together for the same shifts but not allowed to work the same lines, and that was a brilliant going against the grain in the traditional human resources management bible. 

Extraordinary effort on the part of average individuals is the true example of employee morale and it can never be overrated.

Technology, Retail, and Ecommence

Women account for roughly 75 cents of every dollar spent at retail and women are early adopters of the IPad tablet; in less than a year the IPad, or Tcommerce will revolutionize retail.

The IPad, or tablet, is not just an ebook reader, or something to surf the web with, it is;

If you're fortunate and hip enough to own an iPad -- or have otherwise experimented with one -- the preference for this shopping device will come as no surprise. The nearly 10-inch display offers a comfortable environment for web-surfing and product consideration, overcoming the size restraints that can frustrate shoppers on mobile phones. Compared to point-and-clicking from a laptop, the touch-screen functionality provides a more immediately satisfying and tactile shopping experience. Lightweight and compact, tablets with 3G/4G connectivity are also inherently free from the constraints of the desktop; they can be comfortably schlepped from commuter trains to airport lounges to kitchen counters, facilitating purchases at every venue.

Now, Mark Zuckerberg would have you believe that Fcommerce is the next thing to "blow up"  and Facebook even commissioned a study that showed that while Facebook showed a 92% increase in referrals in August 2011 over the same month a year earlier the reality is that Facebook only accounts for 1.2% of Ecommerce conversions.  Twitter only accounted for .5% but it did achieve the highest purchase average of $121.33.  Social Media conversions represent impulse purchases, not planned purchases; planned purchases are the domain of Google and search.  An explanation of an "impulse purchase" is:

Consumers on Facebook and Twitter don’t intend to make a purchase, but rather share information. A spontaneous shopper might see an ad and get pulled into the retailer’s Web site. The shopper’s personality, combined with impulse and influence from the ad, prompts the sale or conversion.

The IPad or tablet, will totally change retail from a radically different perspective; now a consumer, armed with an IPad, can shop at any brick and mortar establishment and use their IPad to scour the internet for the same product at a cheaper price.  Thus even impulse buys will become rational.

With the announcement of the new Amazon Tablet for $199 Amazon could have become the internet based "Walmart" if their new tablet had included 3G/4G rather than Wifi.

Then of course, you will have the experts going on about "the shopping experience" and multi-channel retail, but I always refer back to an article, Don't Compete On Price, from 2007 that made the same claims and then used Circuit City as a successful case in point!

The reality is that technology, especially the tablet but also mobile technology, have the ability to turn brick and mortar retail stores into nothing but browsing catalog showrooms, much like Service Merchandise, where the purchases are made online from ones cheaper competitor.

The forces of innovation and technology always start out creating more choices and opportunities but they always end up favoring the bigger lower cost competition.  Whether one is talking about trains, automobiles, or the internet, the opportunities once created for many end up leaving only a few.

The only way a manufacturer or a retailer can compete is to focus on a niche, specialization, and  exclusivity.

From Niches To Communities To Tribes

Being a producer of a niche product to a niche market I am constantly seeking out new ways to capitalize on opportunities.  

Between "how can I gain an advantage?" to "there has to be a better way?" that pretty much encompasses the totality of my mind set.  

I realize that one of my current key problems is that while I am using terms such as "community," "social media," and or "consumer centric," the reality is that my concept of these terms is totally different than what is considered popular at the moment and I am missing the mark in the confusion.

I am gambling on the fact that the future belongs to those who go from creating a community to creating a tribe.  While a community is about sharing a tribe is about belonging and it involves participation and loyalty.

The reality is that the social network comes first and the sale of product is secondary.  Which involves totaling changing the way one thinks.  You create a platform that is attractive to your niche market, someplace where those that belong to the niche market feel comfortable and share; and you reward the sharing with discounts to products.

Tribes are about exclusion and exclusivity and brands that cater to niche markets have to create a sense of pride with their brand.  Ecommerce is becoming too much like traditional retail with endless promotions and advertising. The reality is that the internet has created an opportunity to create platforms where people congregate, socialize, hang out, and then you advertise and promote within the platform.      

Tribes are about belonging, and belonging should instill a sense of pride among the members of the tribe.  When your niche is big and tall and plus size then the pride has to come from exclusivity.  Thus, you promote the social, the music, the games, the interaction and you promote products that cater to the interests captured in the social and size availability becomes the gatekeeper.

Tribalism thus creates a pride of participation and belonging which in turn creates increased product sales.  Its not the brand that is promoted but rather the social that promotes the brand.

You have then created a sense of belonging with the statement "A Shirt For US!" A positive sentiment from a negative attribute; you have created a tribe from a shared physical attribute.  

The Wisdom Of Thinking Differently

I came across this article about Kevin Kelley, the head coach of Pulaski Academy in Little Rock, Arkansas.  

Since I am not a football fanatic I was not aware that Pulaski Academy is a small school of 350 students with an outstanding record in football.  But, they have an outstanding record and the coach is well respected in his field; as well respected as he is unorthodox in his coaching.

As the article states,

"Kelley has become a cult figure among both football coaches and the sports analytics community for his disregard -- contempt even -- for traditional football wisdom."

He forbids his teams from punting on 4th down and that is just the beginning!  The article continues with,

The funny thing about Kelley: He's not a mad scientist or an iconoclast, zigging where everyone else is zagging, for the hell of it. Rather, he's a relentlessly rational sort whose methods have backing in data.
The decision not to punt? According to Kelley's statistics, when a team punts from near its end zone, the opponent will take possession inside the 40-yard line and will then score a touchdown 77 percent of the time. If it recovers on downs inside the 10, it will score a touchdown 92 percent of the time. "So [forsaking] a punt, you give your offense a chance to stay on the field," he said. "And if you miss, the odds of the other team scoring only increase 15 percent. It's like someone said, '[Punting] is what you do on fourth down,' and everyone did it without asking why."

Yes, it surprises people that "thinking outside of the box" or drawing different conclusions can be very logical and rational.  If you think about it following the norm, or conventional wisdom, will achieve nothing more than mediocrity.  

Of course in business, there are benefits in mediocrity, or conventional wisdom, if you are a huge established company; you will not gain much but you won't lose anything either.  But the idea that unconventional ideas or 'thinking outside the box' is risky or only to be attempted as a last resort is wrong also.  

Sometimes the most unconventional, the most unorthodox ideas are actually the most rational and the most conservative. We spend an immense amount of time and effort trying to figure out what our competitors are doing without really grasping the logic of why we do what we do.

I have made enough presentations in my life, and offered proposals or solutions to problems that were met with, "That's Crazy!"  Then I would sit and take it step by step, documenting and proving the logic, and slowly but surely you would convince people, a step at a time, that what they initially thought was "crazy" was actually the most logical course of action.

Sometimes rules are just nothing more than outdated traditions that no one ever  bothered to question.

The Most Brilliant Ideas Are The Simplest

A true definition of entrepreneurship:  Creativity and the human spirit!

Business By Design

Change is constant and never linear;  and I can't help but get excited over all the opportunity I see today!

Watching the technology that being created and envisioning how that could benefit a consumer goods manufacturer/retailer I cannot help but see new opportunities on a regular basis.

The internet has exploded retail, opening opportunities for niches to be exploited and specialty brands to flourish.  But, change is transformative and dialectic; thus you have to think 'thesis,' 'anti thesis,' and 'synthesis.'

Yes, the internet (ecommerce and social media) has dramatically changed retail, but mobile and QR codes will be even more disruptive.

Macy's has already begun to push back by developing "incubation centers" for fashion designers.  Major department stores will begin to develop their own private label, or store brands of clothing.  Thus, to bemoan the death of the major department stores is too premature.

Even brands like Fruit of the Loom and Hanes, will eventually find themselves competing with "Value" brands that will be developed by the major discounters to increase their margins on the commodity products much like grocery stores have done.

Where as ecommerce and social media disrupted retail shopping channels smart phones and QR codes/bar codes can very easy restore the old dynamics of scale.  40% of all wireless phones are now smart phones and 20% of smart phone users acknowledge that they regularly scan codes in to seek out better prices. 

That will force retailers to develop their own exclusive brands and force manufacturers of major brands to either go exclusively B2C or work out exclusive deals with retailers, such as what HP and Dell do with their computers.

The future for small niche companies and or web based product lines is to use this same technology to their benefit; a SHOPBOX or a Pop Up Shop.  Every time I sit down and review my business plan I find more options, more opportunities, and cannot help but get excited at the sheer size of the opportunities being created on almost a daily basis!  I think every small retailer should read the books recommended in this post:  Whenever anyone claims "big trouble" that also translates into big opportunities!

Think of your consumers as "tribes" and follow them! We are so focused with connecting and having conversations with our consumers that we fail to realize that the future of retail, for brands is to now get out among your communities.  The future belongs to those brands that become part of their consumers lives.

Politics and Economics

I guess tonight is the night that Barack Obama makes his big speech about jobs!  Pretty much more of the same, tax credits, extended unemployment benefits, infrastructure investments, and funds for states and local governments so that they do not have to lay off teachers and first responders.

No need for me to tune into the speech, because the reality is none of these prescriptions will deal with the economic issues we are currently facing.

In a recent column Jeremy Siegel notes that the S&P 500, which "...represents nearly 80% of the market listed value of U.S. stocks, and U.S. economy..." derive almost 50% of their profits from overseas.

So, simply put 80% of our economy is focused internationally because that is where the growth is and where their futures lie; the days of these business entities creating jobs in the U.S. is over.  Since we do not tax foreign profits until the money is brought to the United States and as they are expanding overseas and have no need to repatriate these profits we will continue to see a reduction in corporate tax collections.

The other day I participated in a debate at a tech venture capital blog, A VC, and of course the sentiment was that technology could solve all of our problems and that government just needs to get out of their way.

The reality is that technology does not create as many jobs as the technology that it creates replaces.  

Then I came across this article this afternoon, What 10 small business owners would tell the President, and one comment in particular stuck out;

"I used to do a lot of the baking and now my partner and I have moved to other aspects of the business. We have stepped out of the kitchen. It is nice to see the business is growing. We started in 2005. We have 20 employees, pretty much full time at this point.


We have a cobranded line of mixes with Williams-Sonoma: brownie mixes, a Bundt cake coming out, and a whole line of breakfast treats. We had this urge to move on and away from the cupcake to prove that American baking is more than just about the cupcake.


We have been hiring more people. It has been a slow, steady climb. We will hire when the need arises. So far, we have never had to let anyone go ever since we opened, actually.


I would like to hear that President Obama is going to continue to back small business owners. There are ways to encourage growth. The number one thing is making credit easy to get. At the moment it is so difficult. It is almost comical. They need to figure out how to extend credit to small business without it being such a hassle.


We actually did go through the process in the very, very beginning of trying to secure startup money. The paperwork required a lawyer and an accountant. The SBA loans are beyond complicated: It is so much paperwork -- so much of a hassle that I could see a lot of people not applying because it is so labor intensive. It is not worth it in the end. It is almost worth it to go outside the SBA."

 I have worked in the world of small businesses, companies with 15 to over a 1,000 employees all my life, and never in my life have I seen a time when financing was as hard to get as it is today.  Its not hard to get, its impossible.

I see all the opportunity being created by technology and the internet for small businesses, for old economy start ups, and niche products, and I wonder how long we can continue to invest in technology when the natural consumer, the creators of advertising for social communities and such on the internet, of all that is being created, are disappearing.  Small businesses are the income stream for most of what today is called social media and without funding they cannot maximize the potential of what our cutting edge technology can create.

Our government cannot see past the lobbyists and special interests that represent the major firms to even notice that we could have a very vibrant job creating environment, if they could find the small innovative companies within the old economy.

I have all but given up on seeking funding, sometimes you just have to accept that you are trying to fit a square peg in a round hole; not enough tech for the folks looking for the next big thing and too much of a niche product to be of interest to old economy investors.

We are in a period of transformation and without small business we have no way to bridge the gap between today and our future economy.  So we will build roads and borrow money hoping that something changes while our major corporations continue to focus on the global economy and our innovation will be squandered with the burden of rising taxes and more entitlements.  

I Would Rather Be Lucky....

"I would rather be lucky than good..." is a claim I have made a few hundred time in my life!  It seems to grab people's attention and it always gets a response.

The reality is luck does not exist; its actually nothing more than a poor word choice for what we refer to when we finally achieve success through hard work and persistence.

There is no such thing as "...an overnight success."

Its kind of like the word 'persistence' which sometimes is used because it sounds better than what we really mean, which is "stubbornness."

Chance can only exist in a world where "success has many fathers while failure is an orphan."  If one does not own up to their failures then success can only be derived from chance and the key difference between persistence and stubbornness is actually nothing more than the ability to listen and learn.

My favorite quote is one that comes with every single mutual fund, "Past Performance is not indicative of future results."

Yes, I would rather be lucky than good, I would rather rely on hard work, persistence, listening, and learning than I would on skill, which is nothing more than the accumulation of the results of past performance.

Part 2: Success With Tees

When contemplating a tee shirt for a promotion, or as advertising, or for your line of art that you hope will make you a household name, you have to understand that the shirt its self says more about you than you realize.

With a 100% cotton shirt you have a variety of yarn processes, from carded cotton, which is rough, to ring spun, which will produce a much softer garment.  One is much more durable and the other is much more comfortable.  

Of course, now you also have tee shirt manufacturers that take a courser cotton and treat the fabric with silicon to give it a softer hand.  It also can lead to problems with screen printing.  

In regards to screen printing you will also find that the thicker and courser the yarn the better the ink holds, the smoother the ink sits on the shirt, and the longer the design will last.  The best shirts for screen printing are those from 18 singles yarn.  Once you start getting to 24 singles and above you are basically screen printing a "throw away" shirt.

If I was putting my company name on a shirt, or promoting a cause that I believed in I would want a shirt that was going to stand the test of time.

Remember, the graphics may dazzle but if the shirt is not comfortable it will not be worn.  If you are doing a promotion, then you need to realize that you get additional mileage from your promotion the more people wear the shirt.

If you have no clue as to what sizes you will need, then the safe bet is a 1-2-2-1, or 1 M, 2 L, 3 XL, and 1 XXL.

Oh, and always design your graphics with the color of the shirt defined!  Never design on white unless you are going to print on white!  One other key point, a design may really "pop" on your computer screen, but you need to realize that you need the design to "pop" when someone is standing 8 to 12 feet away from someone wearing your shirt!

One last point, if your market is teenagers then slim fit and 30 singles are great shirts but once your customer reaches 26 or 27 years old, slim fit and 30 singles yarn just isn't going to be all that attractive as a shirt any longer!

Here is a great article on T Shirts, Venture Capitalists, and Start Ups!

Turning Social Media Upside Down

I remember S&H Green Stamps!  As a child I remember wanting to go shopping with my mother so we could watch her earn stamps as her items were rung up on the cash register, then of course there was the fight to determine who got to carry the stamps home and the licking of the stamps and adding them to your books was actually a family event.  Kids even bragged about the number of books their family had completed and I am sure that housewives would discuss which retailer gave the most coupons and what was the best item to purchase with their books during their weekly coffee sessions around a neighbors kitchen table.

That was social media long before the advent of the internet as social media has become the "coffee klatches" of the 21st century.

For companies and brands the primary focus of their social media campaign is to advertise but the real success of social media is about conversations not the number of 'visits' or 'likes' one attains.

Everyone attempts to determine the success of their social media campaigns by the number of conversions that occur from social media sites but the reality is they may want to take a hint from S&H Green Stamps and think about how many conversations their product can create on social media.

Rather than viewing social media as nothing more than an advertising channel why not think of it as rather how many conversations can my product generate?

I think the ideal social media campaign would involve a game and that game would be involve some sort of token that would be gained via purchases of your product.  Zynga creates some awesome social media games, that create conversations and interaction.  All of their games involve earning points via playing the game but also involve the purchase of other, different points.  It would be logical to replace the PayPal based purchase of other points with tokens that are earned through the purchase of products.

You would benefit from the fact that individuals would be interacting and broadcasting that they purchase your product, at the same time you would be creating the potential for increases in the sales of your products  due to the desire of the game players to earn additional rewards and at the same time you would be creating an opportunity for consumers to earn rewards through their participation.

I have to admit that I am fascinated with the social psychology that is built into the games that Zynga has produced.  The way they build interaction and competition into their products and it just seems to me that they have created the ideal social media vehicle for products;  for the creation of the 21st century S&H Green Stamp program.

Grassroots Market Research

 

I spent this weekend helping a local university welcome its freshmen onto campus; I actually got stuck assisting with traffic control and getting cars unloaded and moved as quickly as possible from in front of one set of dorms.  

Nothing like some real grassroots market research to say the least!  

Out of over 1,000 freshmen there was only one PC off loaded; everyone else had laptops and about 900 of those were Apple.  I Phones were popular among the kids but for the most part their parents had old fashioned cell phones and these cellphones outnumbered the I Phones by a 3 to 1 margin. 

I think that Russell Athletic and Nike need to be really concerned about Under Armour, because everyone had apparel with the Under Armour logo, while Nike held the edge in screen printed t shirts and shoes Russell was no where to be found, outside the shirts worn by the University staff.

For every case of bottled water there seemed to be a 12 pack of Mountain Dew; didn't see any Coke products at all.  I am not real sure what the logic is with bottled water but if it is for a conscious health reason then the amount of poor snack choices really overwhelms whatever benefit one could derive from drinking water.

Not real sure what will happen when these freshmen realize that one flat panel television and one refrigerator per room is about all that will fit; I figure between now and when school starts in a week, everyone will realize that 90% of the rooms have one television and one refrigerator too many!  Walmart and Best Buy does a tremendous business in electronics during "back to school" and Target makes a killing on bedding.

35 years ago this fall I was an incoming freshman and the biggest difference is now it takes two vehicles full of stuff to get situated in the same size dorm room where back then it took only one.  No one seems to use boxes any longer to pack anything;  its either plastic cases or just haul stuff up in the bags that the goods were purchased in; if how people pack to go to college is any sign of the future, we really will have a shortage of engineers in the future!  

Self Doubt

From an article about the standardized testing scandal in Atlanta:

"Julie Rogers-Martin had started to doubt her teaching skills.  After 30 years in education, working mostly with underprivileged inner-city students, Rogers-Martin felt she had developed a level of competence and professionalism that can only be gained from hard work and experience.

Her superiors at East Lake Elementary School in the Atlanta Public Schools system where she taught for six years seemed to agree. Administrators held her up as a model, praising her classroom management skills and use of technology and showcasing her class to parents and administrators, she says.  But between 2007 and 2009 a strange thing started happening: Some of her colleagues' students began to outperform her students on the state's standardized test."

Yes, sometimes you look at the world around you and you cannot help but doubt your own knowledge, ability, and achievements; sometimes you cannot help but question your own ability to grasp the world around you.

Have you ever had a great idea?  An idea that others just do not seem to see or understand regardless of how much you try to explain it to them?

Doubt, is healthy, it is the quality of being able to review, rethink, and revamp.  Doubt, is the ability to grasp new information, new ideas, and adapt.  But self doubt is something totally different.  To be able to spot your own flaws requires confidence!  Staring at your own weaknesses and flaws in the face doesn't come from a place of self doubt, it comes from a place of strength.  You have to be a strong person in order to own up to your flaws and to shoulder the responsibility of making your idea better. 

Confidence is a lonely place; it is a quiet characteristic.  Arrogance and ego are public qualities, that demand acceptance and public acknowledgement.  Confidence is a world of hard work and long hours.  

We love to talk about "passion" and "enthusiasm" but without self doubt they are nothing more than hubris and should not be confused with confidence:  Confidence is factual, arrogance and ego are emotional.  Hitting home runs is exciting but base hits win games.

If you catch yourself in a moment of doubt then you need to question whether this is the healthy confidence derived doubt or whether it is self doubt.  Passion, enthusiasm, arrogance and ego, all wilt under self examination; in fact they fear examination.  Confidence grows stronger with doubt.

Success is a long hard road and confidence comes from the realization of exactly what success takes and a confident person reserves their energy for that which matters.  Everyone cheers for the home run king, everyone congratulates the player that crosses home plate to win the game while the batter that hit the base hit that drove in the run walks quietly off the field.

Sometimes we confuse self examination with self doubt and we shouldn't.  Sometimes the world is focused on the wrong things, such as better test scores rather than teaching competency.  Or, fads rather than ideas that have stood the test of time.

Confidence sometimes leads to the realization that the world is nuts!

Strategies Of Value: Consumers and Community

Henry Ford once said: “Any customer can have a car painted any color that he wants, so long as it is black.”

In 1923 GM redesigned its manufacturing line with the flexibility to produce a multitude of models and colors without compromising the inherent economies-of-scale of Ford’s assembly line innovation.

In the 1970's we had Burger King and the concept of "Have it your way...." and now today we have something called, "consumer centric" which entails not only how a company relates to consumers but also revolutionizes the organization; just as the assembly line changed our society in the early 20th century the concept, consumer centric, will do the same for the 21st century.

Of course it might require that companies quit off shoring customer service!  Or if you are going to call a consumer on the weekend and leave a call back number then please ensure that all the features work on weekends!  

Then that brings up the concept of ‘customization’ which is another buzz word being bantered around today by various apparel start up companies.

Its easy to champion a concept such as customization when one is selling pants for hundreds of dollars a pair, like Bonobos, or dresses for hundreds of dollars like Mod Cloth, or even polo shirts for 80 dollars or more, but the reality is your "community" is very small; you community is limited by income.

The whole purpose of mass production is to produce goods in mass quantities at prices the masses can afford.  If you take screen printed tees for example, at one time department stores were willing to pay $7.50 for a four color process back print with left chest logo which they would then retail for $26.99.  Now they will pay on average $5.00 for a screen printed tee which they retail for $17.99 and thus you find that the days for full color process are over and has been replaced with spot color of no more than three colors.

All of the sudden, anyone and their brother could sell screen printed tees via the internet and ship out of their garage:  With the cost of the shirt, art, and screen printing you have about $6.00 in a shirt that you are retailing  direct to the consumer for $15 to $20!  So we see the birth of consumer centric business models and the advent of the concept of customization!

The reality is the shirts are blanks and purchased from a distributor on an as needed basis and thus their are no inventory carrying costs.  The reality is the basic product, the tee shirt, is not customized, but rather it is embellished to a customers wishes.

The 'value' is that tees are novelties, they allow for self expression, whim, and impulse buying and thus communities can develop and grow, such as Threadless, Cafe Press, and Zazzle to name a few.  You can add the individualization that is offered by companies such as Custom Ink and Blue Cotton to the list also.

To take the concept of customization to other apparel classes beyond tee shirts then the term that should be used is "individually tailored."  The market for individually tailored goods is limited to individuals who are either young and or higher income.  To the vast majority, lets say 90% of Americans and an even higher percentage of the rest of the world, the idea of having apparel tailored for fit is not financially viable.

Yes, even the trade magazine, Internet Retailer has jumped on the customization bandwagon, imploring the like of The Gap, Macy's, Nordstrom, and American Eagle Outfitters to get started with 'personalization.'  That would be for an interesting board or management meeting; brick and mortar retailers discussing how they change their whole supply chain and retail structure to adapt to this new innovation. 

The idea of a consumer centric business is one that imparts a value added proposition to existing business activity.  The concept of personalization or customization is one that completely changes existing business activity; its a niche market at best.  It will never achieve the acceptance of jeans and or tee shirts as basic apparel choices for a vast majority of consumers.

Mass production led to the extinction of the artisan, and the craftsman.  The consumer saw no value to individualization.  I remember in the early 90's when the concept of a tee shirt with a double ringer around the neck was considered innovative and this in turn led to allowing the retailer to pick the color of their second ringer which we would then attach after screen printing.  That was a great idea but a bad reality because of costs of maintaining inventory of the second ringer and returns; one persons design creation is another ones idea of trash.

Part I - The T Shirt

Americans are "consuming" tee shirts: 3.2 billion tees were sold in 2010 alone and this works out to an average of 10 tee shirts per person every year!  In 1990, Americans averaged 4 tee shirt purchases annually; so we have increased our annual consumption of tee shirts by an additional 1 shirt every three years on average.  Makes you wonder what people do with last year's tees?

There is not much that occurs in our lives that does not involve a tee shirt. There is not much that we do in our lives that we could not do in a tee shirt.  But can you name your favorite tee?  Can you remember the label of the last tee you purchased and or received?  Do you even notice where your tee was made?  Do you even realize that a blank, basic tee is a style option?

Tee shirts are the basic building block for individual self expression and for the establishment of a community. They can be the ultimate status symbol or the most utilitarian; the vanguard of the Web 2.0 movement, the whole idea of 'consumer centric' business models began with a basic tee shirt.  The reality is that even today, a couple of hundred of dollars spent on screen printed tees achieves a higher ROI to small businesses than does  a thousand dollars a month spent on social media, pay per click, and or SEO!

Even the Travel Channel diva, Samantha Brown, says you should never leave home without a few tee shirts in your luggage to use as gifts while you travel:

"So it's nice to have something to give -- one or two T-shirts from your own hometown is a great place to start. They don't take up a lot of room in your luggage or add on much weight."

That is a pretty lofty pedigree for something as mundane as a tee shirt!

When I talk about a tee shirt I am actually discussing a blank shirt or what most designers perceive as a blank canvas and most advertisers see as a blank billboard.  What is really interesting, besides how big the market is  is also how diverse it is.  When you are looking at screen print lines the names Gildan, Alstyle, Tultex, Anvil, American, and Alternative pop up and if you ask the general market, you would hear names such as Fruit Of The Loom, Delta and Hanes.  Then of course you have the specialty tee shirt lines such as Continental Clothing and Alta Gracia which offer tee shirts with a social conscious.

I was pretty surprised to read this article and come to realize how shoddy most standards were for your basic tee shirt; personally, if I was involved in any of these companies I would get busy cleaning up our standards!

With the increase in the price of cotton recently we are seeing a variety of ways to replace cotton as a basic commodity in tee shirts; You have Tencel and Hemp as two examples.

Exactly how important is the basic blank tee shirt to the world at large?  Now that one can have their own label put on the neck of shirt, does where one gets their blank tee shirt really matter?  Does how and where a tee shirt is made really matter?  I can't help but wonder with the push toward "customization" in regards to apparel, exactly how much would the consumer be willing to pay for something 'more' than your basic tee shirt?

Can a basic tee shirt be anything more than an after thought to a world focused on customization and individualization?

Fail Often

I am haunted by an article that I read many years ago on a plane heading to the west coast; it was an article about a survey that the top 100 successful business people took and the key result was that they claimed that they failed at 70% of what they attempted.

Of course, it takes some time to grasp something that is mathematically at odds with our assumptions; success is based upon the fact that one does not give up but rather keeps learning, evolving, and trying.

Or as Thomas Edison has said, "I have not failed, I've just 10,000 ways that won't work."

That is why, when I read things like, "(b)efore changing careers, experts say, ask yourself some basic questions. For example, are your current skills obsolete, or will they soon be back in demand? "  I cannot help but wonder how anyone could have skills that are obsolete?  If you are continuously learning, evolving, and trying then exactly how can ones acquired knowledge, aka skills, become obsolete?

But then again, I never really grasped the concept of "career change" because I am a challenge seeker rather than a resume builder; I want to know what the challenges of a job are not the skills required to perform the tasks of a job.

It’s kind of like the question of, "...if you could do things over would you do things differently?"  Of course, all of us would!  But the reality is without continuously learning, evolving, and trying nothing would be different; the end results would be the same.

Wisdom is nothing more than trying, failing, learning, evolving, and trying again...over and over again!  Success is nothing more than learning to fail faster!

Every benefit has a cost and if you fear failure then you will never enjoy success.  I have been fired more than once and I need two hands to count the number of times I have been “…sent to the house” but in each and every case, each and every time I was back at work within two days.

Think about it, 100 of the top business leaders admit that they fail 70% of the time!  If you have a success rate higher than 30%, and lets be honest, most of us shoot for at least a 75% success rate, then obviously, based upon a poll of the highest achieving business leaders, most of us are not attempting to accomplish much.

When The Best Of Times and Worst Of Times Collide

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way..."

   --From Charles Dickens, A Tale of Two Cities


One of the benefits of years of experience in a basic commodity business like tee shirts is that you grow very accustomed to "...the worst of times...." because it becomes obvious after a while that your best years are those years when the general economy suffers.  When the overall economy is "frothy" then you will struggle and when there is a general recession your opportunities for success grow.

You develop a totally different perspective toward business and you are constantly looking at your return on your investment (ROI) for any new endeavor; the concept of 'lean manufacturing' is ingrained in you out of necessity not because you took some class or seminar on the subject.

You come to realize that employees are truly stakeholders in your organization because they sacrifice along with the company; you realize that stability, security, and being a stakeholder are just as important of a motivation for employees as is pay, fringe benefits, and advancement.

I participated in an online discussion last week where the topic was ecommerce, inventory, and efficiencies and I have to admit that I was shocked at how what I considered to be basic common sense was treated as expert knowledge.  Yes, you want to layout your inventory so that order fulfillment is efficient, logical, and error free.  You want to lay it out with a starting point then have the organization match exactly how the goods will be listed on the packing list, from left to right and top to bottom; that way you have a constant forward movement of product.

Can't wait till we get to the session on turning one's inventory!  Not too many folks have any idea how the carrying cost of inventory is such a killer to a company.  Of course, I have to remember that the term is "just in time....."

I can't help but wonder how many screen printers, how many of these new lines of embellished tee shirts, actually know how to price the cost of screen printing into their product?  That would involve time studies...

The hardest thing to get across to ones accounting, sales, or IT, is that while they are critical aspects of the company under no condition will their tasks ever impede and or stop production;  if the computer system has to be brought down then it will be done after hours, if a month end audit has to be performed it will be done after hours.  The reality is with plants in Los Angeles and in Germany you end up with about a 4 hour window in the early morning hours when the computer system can be shutdown or everything waits till the weekend.

I really have no concept of what it feels like to work for a company at "...the best of times..." or to be a wash in cash to where decision making not just involved making a good decision but rather necessitated making the best decision.  Every decision should be made as if the future of the company is on the line.

I spend quite a bit of time monitoring business trends and the world of technology/internet start ups fascinates me because I have no idea what it would be like to have someone invest $20 million dollars into an idea; I always operated on the assumption that a start up should be 6 to 8 months and then you better have a self sustaining income stream.  At which point your goal is to grow your business and increase your margins.

In my industry, your goal is to turn your inventory six times a year at a minimum and never have your cost of goods total more than 60% of your net sales.  Obviously, with B2C sales the goals change and your cost of goods should be dramatically lower than 60%; but you should be able to establish the ideal based upon what percentage of sales are B2C vs. B2B and adjust your ideal cost of goods accordingly.

Customers become real important because keeping an old customer is a lot cheaper than finding a new customer and with the ever increasing pressure of rising wages, fringe benefits, and other commodities, you have to control any costs that you can.  Keeping great employees is also cheaper than attracting and training new employees.

Yes, outside the technology/internet start up industry there does not seem to be much sense of excitement, which probably explains why my views are such at odds with the majority of my counterparts; hey, if it was easy then where would be the sense of accomplishment?