EQ Journal Archive 11

Livable Cities and Neo-Urbanism

Filed under:

Affordable Housing

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Asymmetric Information

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No Money Down Real Estate Investing

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Political Economy

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Property Taxes/Municipal Taxes and Fees

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Spreadsheet Use

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Thought Experiment

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Urban Design

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Why Invest in Real Estate

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Writing, Research and Experimentation

What is Your Email Address Book Worth?

Posted on
Saturday 22 October 2011

The short answer is: ‘I don’t know.’ But recently published
figures (Bloomberg Businessweek, Oct. 2, 2011) give us a clue.
LivingSocial recently offered $20 worth of goods (via their coupon
service) that can be redeemed at Whole Foods for $10. But wait, they’re
paying an estimated $18 to $20 for each coupon* so they’re taking a hit
on each one sold.

(* Margins in the food biz are so tiny that an $18 cost for $20 worth of goods is probably right.)

When you sell as many as 80 of these deals each second, that can add
up to a big cost. So why is LivingSocial doing it? To add email
addresses to their d-base.

If we assume that ½ of the people who bought these Whole Food coupons
are new to LivingSocial, it implies a value of about $16 to $20 per
email address voluntarily given to them and after agreeing to their TOS (Terms of Service) in order to buy the coupon.

Most advertising is valued at anywhere from $4 per CPM (thousand
pairs of eyeballs) for, say, bus board advertising to $20 for a high end
magazine to $40 or $60 for highly targeted (and trackable) Internet ads
on, say, Facebook pages* to as much as $120 for door-to-door delivery
of junk mail by CPC (Canada Post Corp) or USPS.

(* Recent Telfer School of Management graduate Reid Jones tells me
that his company, Playvalue Toys, a local Ottawa Institution that has
seen its Internet sales go from zero to 30% of sales in three years on
its way to half in the next two years, targets the Facebook pages of his
competitors. They advertise on those FB pages and track their results.
The CTR, Click Through Rate, of ads placed on their larger competitors’
pages is fantastic. When a competitor says they’re out of stock on an
item and PVT’s ad is appearing on the RHS of the page, you can imagine
what happens. This is a reminder that companies that set goals and track
their metrics grow much faster (7x according to a Silicon Valley study
published in May of 2011 called Startup Genome Report 01, Max Marmer,
Bjoern Lasse Herrmann, Ron Berman, 2011: https://t.co/xxcxvu0) than those that don’t.)

But if LivingSocial is willing to pay $16 per email address that
establishes a new record for CPMs in my experience. It implies a cost of
$16,000 per thousand pairs of eyeballs. Wow.

Even if BBW and its sources are wrong by a factor of 2, there is no
doubt that LivingSocial is willing to go to great lengths to add to its
d-base. Estimates are that the Whole Foods campaign added 100,000 new
clients for LivingSocial.

Another way to put the question is: What would someone have to pay
you for you to sell them your email address book? Mine has about 5,400
names in it and more than 8,500 email addresses. Ignoring for the moment
the question of the ethics of trading in email addresses, it seems
reasonable to assume that $10 per email address is about right. Remember
in this imaginary transaction, you are selling your book which means
you don’t get to use it anymore! Pretend it’s like your condo—a) you can
only sell it once and b) once you sell it to me, you can’t live there
anymore since I do.

Of course, email address book trades don’t actually happen outside
the murky world of spam and the value of those transactions would be
much, much lower since my email address book would be practically
useless to anyone else unless they wanted to talk to people who are
interested in business models, entrepreneurship, urban design, art,
architecture, teaching, research, novel writing, science fiction or
yoga; i.e., they were me.

So that makes the data in BBW that much more interesting—it provides a comparable without any trades actually taking place.

I also tried to put a commercial value on your Twitter account when I wrote ‘Twitter Nation’ (https://www.eqjournal.org/?p=2080) last year. Apart from being a how-to-use Twitter, I did some calculations that suggested a value of Twitter for three users:

Twitter User/No. Followers/Avg. Tweets per Day/Twitter Account Value (est.)

Prof Bruce 690/5.4/$1,793.41
Guy Kawasaki 256,188/60.4/$6,986,771.58
aplusk (Ashton Kutcher) 5,312,333/10.6/$8,635,196.29

You can see that the commercial value of my ProfBruce
twitter account at that time is pretty low—less than $2,000. But its
social value is very high—social norms* suggest that someone would have
to pay a person like me a LOT of money for me NOT to tweet, far more
than a measly $2,000. Same thing with my email account. For Facebook, I
suspect the value might be even higher since FB is far more (for me)
about family and friends than Twitter or my email address book are—the
latter two are more business-y and professional than FB is or maybe ever
will be for moi.

(* If you are interested in the role that social norms play, I wrote about that in Russian Dachnik Movement: https://www.eqjournal.org/?p=2527.
Were it not for social norms playing a role in Russian agriculture
during the Soviet interregnum, the people of that nation would have
starved under the communists.)

I have advised my students for years to keep a personal email address
book separate from their employers and even their own companies since
bad things can happen to companies—they can go down the tubes taking the
Founder’s IP with it. It is likely that tools like FB, Twitter, Email
Accounts, Blogs, Websites, Newsletters, Apps and other personal IP are
going to become much more important and valuable over the next two
generations as the Internet matures and eats EVERYTHING. So protect
yours—oh, and back it up too*!

Prof Bruce

* Data Backup and Storage—Paper Based Storage the Answer? Posted on Sunday 16 May 2010 Bokodes from MIT Media Labs Might Help, https://www.eqjournal.org/?p=892.

Prof Bruce @ 9:49 am

Filed under:

CPM

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Ethics

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Pre-selling, Finding New Clients, Keeping Existing Ones

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Goal Setting

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Marketing

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Pricing is an Art

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Social Media

Loose Button’s Business Model

Posted on
Thursday 20 October 2011

[The biz model discussed below was developed by Loose Button
Founders Ray Cao and Aditya Shah. What they are building based on it is
truly an amazing story. It’s a very well thought out model and
demonstrates a lot of the principles of GTBMR, Get the Biz Model Right.
After review, we added two new dimensions to it: first, the need to
overlay a social layer on top of their biz model to create a coherent
community around their enterprise and, second, to provide for a separate
way of giving back to society through a not-for-profit organization
bolted onto their model. This article first appeared in Ottawa Business
Journal: https://www.obj.ca/Opinion/Bruce-Firestone-5444. It also forms part of a broader discussion in The Complete Business Model: https://www.eqjournal.org/?p=692.]

Loose Button’s Business Model

Ray Cao and Aditya Shah are both engineers from the University of
Waterloo. Now what can they possibly know about beauty products for a
client base that is about 98% female and growing fast? It turns
out that Ray and Aditya and their small crew of hackers and marketing
mavens know a lot about the industry—they are reshaping the way it
delivers samples to consumers.

Previously, suppliers like L’Oreal, Moroccan Oil, Dermalogica and
dozens of others would employ agencies to go into malls and high end
stores to hand out samples to consumers picked out nearly randomly. How
much data did they collect? Pretty much nothing.

Ray and Aditya are highly analytical and believe in the value of
tracking metrics to help build an enterprise and make it smarter. So
they decided to do something about this part of the industry and, in
doing so, have created one of the most innovative biz models yet.

Their value proposition goes something like this: “We’re the Netflix
of the beauty products industry but with e-Harmony for brains,” says
Cao.

Every consumer who signs up is asked to complete a profile letting
LooseButton.com know what type of products they are interested in. Then
once a month, a Luxe Box is delivered to their door by CPC (Canada Post
Corporation) with travel-size samplers from suppliers they are
interested in. This is a form of mass customization—every Luxe Box can
contain different products matching individual consumer interests with
the right type of supplier products with a few surprises on the upside
thrown in.

Clients respond well to LB surveys and have independently started to
record YouTube videos of themselves receiving, using and experimenting
with Luxe Box products. Some of these videos are getting a phenomenal
number of views (over 10,000) spreading the word for LB for FREE. Tribes
of makeup evangelists are forming around the strongest influencers in
their ecosystem.

What’s also interesting is that clients are paying $12 per month ($10
if they sign up for a year) to receive their monthly try-before-you-buy
Luxe Box filled with samples that LB’s suppliers provide them for free.
But wait there’s more cleverness here. In addition to providing them
with free samplers, suppliers like L’Oreal and Moroccan Oil
pay to be included in the Luxe Box which means that LB is in the
enviable position of being paid not only by clients but suppliers too.

Ray and Aditya have also figured out negative cost
marketing—organizations are paying them to market Luxe Box for them… The
Globe and Mail, Chatelaine and other publications, desperately trying
to hold onto their readers, buy Luxe Box subscriptions (at around 80% of
retail price) to give to their most loyal customers vastly extending
LB’s reach and increasing its growth rate as well. The Founders won’t
say exactly how many clients they have but it’s around 10,000 now.

Based in Toronto on Bay Street in shared co-worker space, their
Ottawa tie-in was they wanted to use By-ward market-based Shopify’s
platform but instead had to move to Recurly.com because the former is
not (yet) set up for recurring payments (aka, subscription billing).
Shopify is set up for dozens or hundreds of SKUs, LB has only one.

This is a tough business to knock off in the sense that until the
Internet can download mini portions of makeup and beauty potions and as
long as Canada Post Corporation keeps going, they’re in great shape.

When asked why they named their company ‘Loose Button’, Ray says:
“Buttons are fasteners that connect two pieces of cloth. We
intelligently connect consumers and brands.”

They started LB right out of University and have an Advisory Board
with luminaries like Harry Rosen and Jagoda Pike (former publisher of
the Toronto Star) sitting on it. “Mentoring helped us a lot,” says
Aditya. “We decided not to go into the apparel space since it was
already saturated. We went into the market research and product
discovery side instead.” Their biz coach comes in once per week and
makes them set goals, track metrics and live up to their word.

They are also part of Impact.org which focuses on fast growing
enterprises. Started out of Waterloo, it is now a national organization.

Both Ray and Aditya were part of the coop program at Waterloo and
they each had six tries to figure out that they wanted to do during
their course of studies. What it taught them was that they didn’t like
working for other people (Ray at a Wall Street firm and Aditya at a
large accounting firm and then various tech companies).

The guys have plans for other Boxes—perhaps another line focused on
Men’s products, possibly a foodie version. They intentionally called
their first Box something different from their company name so they
could conquer other verticals later. It’s what RIM tried to do with
Blackberry and Playbook although maybe not too successfully.

There wasn’t much to change in their biz model other than suggesting
that they might consider adding a social layer over the whole thing—the
follow/follower model is a powerful one which knits the community more
closely together and makes it even tougher to knock off. Perhaps they
could integrate the Twitter API and allow customers and suppliers to
follow top influencers in their ecosystem on a more coherent basis than
just stumbling onto one of their YouTube videos.

Other changes might include adding a Qricket Code to each Luxe Box
(that’s a QR code where you can change the website it resolves to after
printing them) so that, like ET, each Box can call home. Maybe there
will also one day be a LooseButton.org to give back to their community
too.

Business models today are not just about making money—enterprises
that are all about the money seem to have none and those that are about
building insanely great products and services plus make a contribution
to society seem to have it all. This is a Gen Y (and Steve Jobs)
phenomenon. So bolting on to their existing model a standalone
not-for-profit dedicated to say health and fitness and with its own
sources of funding and marketing to their existing biz model would not
only help LB, it would help the wider community cope with issues like
obesity, diet, lifetime fitness, abuse of drugs or alcohol and smoking.

Their biz model as it exists today where they get paid by consumers
and suppliers plus other organizations pay them to market their product
for them while forming an intelligent community that is hard to knock
off is, frankly, amazing.

Prof Bruce

Hand drawn LB model:

Loose Button Biz Model circa 2011

Prof Bruce @ 6:34 am

Filed under:

Bootstrap Entrepreneurs– Case Studies

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Bootstrap Capital

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Internet– the Internet is Eating a Hole in the Global

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Gadgets and Gizmos

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GTBMR

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Guerrilla Marketing

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Leverage

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Marketing

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Negative Cost Value Proposition

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Personal Business for Life, PB4L

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Pixie Dust

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Pre-selling, Finding New Clients, Keeping Existing Ones

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Product Management

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Rules? There are no rules in entrepreneurship.

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Value Differentiation and ‘Pixie Dust’

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Value Proposition

Want Higher Density Communities?

Posted on
Friday 23 September 2011

Then First Build Out not Up

(This is an article I wrote in 2003 concerning the policy direction
of then Kanata Councillor, Peggy Feltmate who continued in a long line
of municipal politicians to oppose building the City outwards in the
mistaken belief that this would prevent building upwards. Her goal and
mine were the same: create a higher density city with more intensity and
variegation of uses; i.e., a more interesting place to live-work-play.
The means of achieving that are not well understood, Prof Bruce)

Ms. Feltmate has been elected Councilor for Ward 4 in Ottawa. Peggy
now represents the largest (by population) Ward in Ottawa (Kanata) and
the fastest growing.

What is happening in Kanata is nothing less than a phenomenon; a
phenomenon, by the way, recognized by people in not only the technology
industry but also the retail industry, the housing industry and other
industries as well. Folks in Toronto and in the US who control the
national retail industry and techies in Palo Alto and others all want a
piece of the action in Kanata—they want to be here; they want a Kanata
location.

Ms. Feltmate is to be congratulated on running an effective campaign
and on her overwhelming victory. There can be no doubt that Peggy has a
mandate to govern and her policies won widespread support. But that
doesn’t mean, at least in my view, that her policies are right.

Peggy has said ‘no’ to Minto’s expansion, ‘no’ to DEL and Brookfield too.

There is certainly a fear that expansion in Kanata is equivalent to
‘urban sprawl’ and that expansion means higher public costs too. There
is also a fear that more homes, more shops, more offices, more
industrial buildings will degrade our quality of life and reduce
property values. When you add it all up, Fear and Greed are very strong,
almost primal, emotions and they reverberate strongly in our
electorate. But basing decisions on fear and greed does not necessarily
make for great urban planning decisions.

Want to live in Riverdale? Then build out/then up

For many years, former Mayor Merle Nicolds worried that expansion in
Kanata North would undermine her very worthwhile efforts to get the
Kanata Town Centre plan off the ground. My argument was that these two
developments were in fact complementary not competitive—people who want
to live in a two storey single family home in Morgan’s Grant, Briarbrook
or approved lands further to the north do not want to live in an
apartment above a retail store in the Town Centre and vice versa. In
fact, more s.f. homes in Kanata North creates more demand for retail and
other services, more employment growth and more employees, some of whom
just might want to live in the Town Centre.

In fact, if you want to get more density at the city centre, then you
need more growth at the edges…otherwise Manhattan’s rent curve (and
skyline) would look the same as Kanata’s!

Rent Gradient

To say ‘no’ to Minto, DEL and Brookfield, who, at least in my mind,
are infilling the spaces around our established urban areas undermines
our ability to create a denser form of urban living at the core. Kanata
right now is just a long, ‘stringy’ thing—it kind of strings out on a
north-south axis along March Road and Eagleson. Now that is an
unsustainable and inefficient urban form.

And then there is the fear that more development might somehow reduce
property values or that by restricting the supply of new homes, we
might somehow create a windfall for sitting owners. I mean, normally, we
associate a shortage in supply with increasing prices. Since sitting
home owners tend to vote in Municipal elections, this is a pretty
powerful argument. But is it right?

I would argue that by saying ‘no’ to new development will dampen
demand faster than supply and, hence, house prices could go down or, at
least, not increase as fast as they otherwise would. So maybe Kanata
homeowners have just voted themselves a price decrease?

If more people locate in Kanata—more retail stores, more offices,
more industrial plants, more entrepreneurs, more managers, more owners,
then maybe some of the new employees will want to live here too. More
demand means higher prices for existing homes, not lower.

And I am not convinced by the argument that new development doesn’t pay for itself.

Certainly, the fiscal impact on City coffers of commercial and
industrial development is hugely positive. The City provides almost no
services to commercial property owners but it does tax them to the max.
Even new sub-divisions likely produce a fiscal bonus—development charges
are a significant part of the cost of new homes and what do they really
pay for? The new roads in a sub-division? No, these are paid for by the
developer.

The new sewers, water mains, cable, telephone, storm works? No, these too are paid for by the developer.

Well, what about hockey rinks, libraries and other public facilities?
Some of these are now being paid for by P3 (public/private
partnerships). And what, if we have more citizens living in the area,
isn’t that making better use of these types of facilities, more intense
use? More ice rentals and library members.

Proposed look and feel of streets in Kanata Town Centre

If we want more sustainable communities, then let’s let our
construction industry build them that way. The Kanata Town Centre shows
the way—instead of maximum densities, the KTC mandates minimum
densities, instead of height limits, the KTC encourages taller
structures. Instead of setbacks, the KTC requires build-to lines so we
get more friendly streetscapes.

Proposed Kanata Town Centre circa 1999

You want a vibrant KTC, then you need a hinterland and yes, you need
Minto, DEL, Brookfield, Richcraft, Urbandale, Claridge and the others.
Want more density and intensity? Want to protect important environmental
zones? Then let builders build more compact communities. Stop whining
about open space ratios, stop demanding monocultured sub-divisions that
don’t allow townhomes or duplexes or corner stores or onstreet parking
in them. That is what you have to go after, changing your zoning codes,
not arbitrarily establishing a phony line (urban boundary) beyond which
life can not go.

Copyright. Dr. Bruce M. Firestone, Adjunct Research Professor, School
of Architecture, Carleton University, Ottawa, Canada. November, 2003

Prof Bruce @ 5:38 am

Filed under:

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Livable Cities and Neo-Urbanism

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NIMBY

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Political Economy

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Traffic and Transportation

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Posted on
Thursday 22 September 2011

(This article first appeared in Ottawa Business Journal: https://www.obj.ca/Opinion/Bruce-Firestone-5444)

BTI may be the fastest growing tech company in Ottawa you’ve never
heard of—led by California-based Steve Waszak, their head count is now
270 globally with 150 of those in Ottawa. Waszak is a former Deloitte
guy, former Cienna employee who is a tough competitor and highly
analytical. He also played High School football and looks like he could
still suit up and play linebacker somewhere. He can’t stay seated during
a 50 minute conversation—he needs to get up and sketch out his ideas on
the conference room whiteboard—just to make sure, he drives home his
point to his audience of one.

His family lives in Los Angeles (in Laguna Beach) but he’s in Ottawa
running the show. Waszak has done more than 650,000 air-kilometres over
the last two years visiting them plus more than 300 BTI customers not to
mention the other three BTI offices in Boston, Belfast and Shanghai.
His outlook is international—his 9-year old daughter, who he facetimes
with each day, studies Mandarin and Steve spent six months in China
developing their supplier relationships.

Waszak wants to integrate BTI into the entire China business
ecosystem—he feels it’s the only way to compete with the China price.

The company was in the ditch when Waszak joined BTI. Founded in 2000,
they pivoted their biz model in 2007—they went from being a subsystems
provider to being a full systems company—and became much more
globalized, starting in 2008. Waszak says Canada’s much too small a
marketplace—tech companies have to look beyond our borders for sales and
talent.

He believes in building a bigger pipeline, even during tough times
when they were hemorrhaging cash, then filling the larger pipeline with
sales. When Waszak talks ‘pipeline’, he’s referring to people. At every
new stage of development, he wants to add more people and replace
others—upgrading HR is a big priority (Waszak calls it ‘hiring up’) and
he has personally interviewed 100 people just in the last six months
alone. “Ottawa,” Waszak says, “has big brains with lots of brain cells
and a lot of them have seen the movie before, which helps.”

‘Ottawa’ is his codeword for ‘Nortel’ from whom they’ve got a lot of
talented optical engineers. Waszak calls it the NT ‘legacy’. Even though
they have the chops for it, BTI is NOT an optical play which Waszak
dismissively calls ‘a commodity.’

BTI is seeing demand for its products mushroom—they play in the metro
network space where video is placing an enormous burden on these
carriers: 30% of their traffic is coming from YouTube and 20% from
Netflix. What this means for metro is that demand is a two-headed
monster with traffic exploding on both sides—user generated content
(mostly YouTube) and broadcast video (Netflix and nearly everyone else
in media).

BTI’s proprietary algorithms help these carriers cache video locally
reducing bandwidth demand and data centre router costs by 20% to 40%.
Their customers include usual suspects like Verizon, Rogers, Bell and
Telus but also a lot of Tier 2 players such as Frontier. They are adding
more Tier 1 clients this year as they step up their efforts to
penetrate mobile web: Vodafone, Telefonica and others.

BTI also provides clients with a lot of analytics which is what they want—intelligent networks and smart content management.

Waszak is the first top executive I have interviewed in Ottawa who
not only gets that his supply chain is a complex ecosystem but also
understands that he has to worry about the other side of his biz
model—their demand-side ecosystem as well. He is looking at three
dimensions which he calls ‘win-win-win’, first for BTI, second for BTI
clients and third for clients of BTI clients.

For example, does any Verizon customer really enjoy watching Adele’s
Rolling in the Deep YouTube video on their smart phone, tablet, personal
computer or Internet-enabled TV with a latency of, say, 1.25 seconds
for every 12 seconds of viewing/listening time? Or how does s/he feel
when they get a bill from their service provider that says: ‘Sorry, you
exceeded your data cap this month so your bill is now $400 more than the
supposed $60 ‘all-you-can-eat’ plan you thought you signed up for’? It
doesn’t go over too well and upsets the customer which upsets the
service provider who then buys more BTI stuff to redress those types of
problems.

It’s all part of their differentiated value.

Sales this year will be around $75 million. Growth has been 50% per
year for the last two years so they have some real traction in the
marketplace. Waszak says that maybe 50 BTI clients are going to emerge
as next gen carriers and service providers—and Frontier and Amazon are
likely to be among those—they are driving a lot of video traffic and
more is coming, in fact, a tidal wave is arriving as the Internet eats
both television and film industries.

“We have extended BTI ownership opportunities to our leadership team
and employees through stock options,” Waszak adds. “We’ve re-established
option pricing to provide…value to them through return on these
options.” Which is Steve’s way of saying to his team: ‘stick around’ for
the ride.

With other shareholders made up of VC funds like Vengrowth, BDC, EDC
and Growthworks, you can be sure there is lots of pressure on Waszak to
not only perform on a day-to-day basis (they are finally cashflow
positive so that eases things a bit) but also to provide an exit for
everyone. That could be an IPO or a sale of the company, no one is
saying just yet. But what Waszak does say is that he wants to create at
least $1 billion in capital value (from a company with $200 million in
sales and a five multiple) for all stakeholders to share.

Professor Bruce M. Firestone, Entrepreneur-in-Residence, Telfer
School of Management, University of Ottawa; Founder, Ottawa Senators;
Executive Director, Exploriem.org; Broker, Century 21 Explorer Realty.
Blog: www.eqjournal.org Twitter: www.Twitter.com/ProfBruce

Prof Bruce @ 1:54 am

Filed under:

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Posted on
Saturday 10 September 2011

What is the Level of Commitment Needed to Complete?

In one 5 and ½ week mad dash during the summer of 2011, I finished
the 1st draft of Book 1 (Quantum Entity) of a sci-fi trilogy I
storyboarded over the previous eight months. Book 1 is approximately 334
pages long (about 104,000 words).

Entrepreneurs and artpreneurs need to bring talent to what they do but talent by itself
is not useful. They need to be intensely passionate about what they do
in order to be successful at it; you’re either all-in or you’re nowhere.

Here is the SCHEDULE that a part time novelist needs to keep to
complete such an assignment as he does all the usual things he is
responsible for in his day job too, like being Entrepreneur-in-Residence
at Telfer School of Management, Executive Director of Exploriem.org,
Real Estate and Mortgage Broker at Century 21 Explorer and, of course, peerless husband and father of five great kids:

Go to bed at 10 pm on a weekday
Get up at 2 am
Write until 7 am
Do yoga and run on treadmill from 7 to 7:45 am
Go to at least 1 of his day jobs
Get home at 6 pm
Be with famdamily until bedtime

Repeat until weekend arrives

Get home 6 pm Friday
Be with famdamily until bedtime
Get up at 2 am Saturday
Start a hackathon session that will last until Monday at 7 am with sleep
periods lasting between 10 minutes and a maximum of 2 hrs

Wake up because new ideas are flooding your conscious mind from the subconscious

Repeat every weekend until after a 5.5 week sprint beginning to end, first draft of Quantum Entity is completed

Eat sparingly during this entire process, no more than twice a day

Occasional glass of red wine indicated to ward off heart attack* and turn mind off for brief periods

Crash for 10 hours

Get up and go to work

“A professional is a person who gets up to practice the day after the greatest game of their lives,” Steve Nash, Canada’s greatest roundball player and two time NBA MVP.

Prof Bruce

* My Uncle Freddie (MD from Long Island) recommended one 81 mg tablet
of ASA (basically, coated baby aspirin) per day for all the men in our
family from age 40. Heart attack runs in the male half of our family.
Freddie felt ASA could help us with that and other adverse health
considerations.

Nothing in this blog post should be considered advice on either
health matters or work schedule. It’s just a report on Prof Bruce’s
recent experience.

https://www.Twitter.com/ProfBruce
ARTPreneur: Get Rich While You’re Still Alive: https://www.eqjournal.org/?p=1931
Update: https://www.eqjournal.org/?p=2685

Prof Bruce @ 8:18 pm

Filed under:

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Art and Architecture

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‘Siberian Cedar Medallion’

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Posted on
Thursday 8 September 2011

(This is a story of how ‘Siberian Cedar Medallions’ first
came to Red Pine Camp as a craft in 2010. This story is written by Prof
Bruce and his daughter, Rachel Firestone, and first performed live at
Coffee House during Week 6 in the summer of 2011 (August). Prof Bruce
narrates the role of Senior Staff Member (and Family Programmer) Andrew.
Rachel narrates Camp Coordinator, Sarah. BOLD is spoken by Sarah.
ITALICS are spoken by BOTH. For a short 1-minute video about the Top Ten
Reasons Why You should Create and Wear a Medallion, please see: https://www.youtube.com/watch?v=vPnK3qlRNDo&feature=youtubegdata. To watch Prof Bruce and Rachel perform the story at Coffee House, please see our video at: https://www.youtube.com/watch?v=3Jb-KtlHybA. I also retell part of this story in my new novel due out next year called ‘Quantum Entity’.)

“Hi, my name is Andrew.”

“And my name is Sarah.”

“This is a Russian Fable with Red Pine Camp roots which we would like to dedicate to Barbara Lukas in Handicrafts. It’s called: Siberian Cedar Medallion.

“Once upon a time, a young man named Andrew, a member of Senior Staff
(Family Programming) at Red Pine Camp and a PhD in Physics from the
Perimeter Institute at Waterloo University, sat in a Muskoka chair on a
bluff overlooking Golden Lake talking with Camp Coordinator, Sarah.
Sarah asks Andrew to tell her a story about the Siberian Cedar Medallion
he always wears around his neck.”

“The reason why Sarah feels that this story could be
important is that Barbara, Handicraft god at RPC, wants to introduce a
new handicraft to the Camp and a new tradition too.

“This is the story Andrew told her.”

“Russian entrepreneur Vladimir Megre,” Andrew begins, “explored the
immense expanse of the Siberian Taiga, that’s like a BIG forest in
Russia. He had been told of the magical healing powers contained in
Siberian Cedar (which we would call Red Pine) and he wanted to see this
for himself.

“So he took his steamer up the River Ob in search of these cedars
which were also said to ring. In the middle of nowhere, Megre meets a
young woman named Anastasia. Of course, she is very beautiful and
mysterious.”

“Of course she’s very beautiful. How cliche, Andrew.”

“Don’t interrupt,” says Andrew.

“Anastasia,” Andrew continues, “lives by herself in the Siberian
Taiga. Her home is the forest which provides everything she needs,
practically effortlessly.

“But Anastasia would like to have a child one day. She believes her
forest can not only produce food, clothing, shelter and medicines but
also impart knowledge. She is sure that the Ringing Cedars will educate
her kids, not only in the ways of the forest but also teach them
reading, writing, arithmetic, even advanced subjects like physics and
chemistry.”

“Oh come on! How is that even possible, Andrew? You have a PhD in physics. You didn’t learn that from a tree.”

“Well, these ringing cedars focus psychic energy and from that they
somehow extract knowledge. Hey, this is a Russian story. It’s a fable.
Suspend disbelief for a few minutes, alright?”

“Humph,” says Sarah. “I just can’t see how this actually works.”

“Megre obviously wants to have a baby with Anastasia too—it takes Russian men less than eight seconds to fall in love.”

“Not just Russian men, that’s all men,” says Sarah.

“Anywho, Anastasia waits until the time is right and then (hey, guys,
keep in mind that this is the RPC censored version), she comes to him
one night in his room in her forest home.

“The next day she tells Vladimir she’s going to have a baby.

“Megre is overjoyed and insists on taking her back to Moscow with
him. He is thinking what a delight it will be for him to have this young
beautiful blond creature in his life. He instantly decides to dump his
old wife and take a new one.”

“Typical guy thinking,” Sarah interjects.

“Anastasia accompanies him back to the River. At the river bank, she
tells Megre she will not be going with him but he is welcome to return
one day after the winter to visit with her and her new son.

“Megre goes back to Moscow a changed man, lurching about telling
anyone who will listen about his magical experiences in the Siberian
Forest. Of course, no one wants to listen to a crazy guy and he descends
to practically the level of a street person. Now the old wife won’t
have him in her home, he disgusts her.”

“Hah, serves him right,” Sarah adds forcefully.

“So Megre, although he has never written a book in his life, decides
to. His first five books all become best sellers in something like 20
languages. His mysterious and secretive organization (typical of crazy
Russians) sells these medallions like the one I’m wearing now.

“It is supposed to channel the power of Siberian Cedars to heal you, empower you and bring you knowledge.”

“Hey,” says Sarah, “the Japanese also have a term for this,
they call it ‘forest bathing’ and they make a point of taking their
people, young and old, into forests for this purpose. Apparently just
the sight of trees together with their smell, lowers your blood pressure
and boosts your immune system.

“Umm, do you think I could get a Siberian Cedar Medallion too?”

“Sure, Sarah, but we can get them right here from Red Pine Trees.”

“Oh no, will that damage RPC trees?”

“Not a chance that Campers would ever do that, Sarah. From a single
branch, we can get about 120 medallions with diameters ranging from
about two centimetres to eight. We can harvest what we need; the
trees’ll just keep on growing. So let’s channel RPC instead of Siberia,
OK?”

“Hey, I’ve got an idea. Maybe we could stock them at the Handicraft Hut. Hey Andrew, got any other stories?”

“I’ve got a million of them but right now let’s go to the Coffee House.”

“You know what, I heard the Firestones are performing tonight. Poor Rachel got roped in again.”

…

Prof Bruce @ 4:58 am

Jokes (General Audiences)

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Phoenix-like Rise of Woman-Owned Tech Business

Posted on
Tuesday 6 September 2011

(This article originally appeared in Ottawa Business Journal, September 2011)

Jennifer MacKinnon started Fenix Solutuions (now an Open Source
design shop) in 2001 after the Montreal-based tech company she was
working for decided to pull out of the Ottawa market. She asked herself:
“Why not do it on my own?” So she did.

Jennifer MacKinnon, Founder, Fenix Solutions

It was a tough time to start a tech biz but she got her first client
almost right away—a $20,000 web development contract for a
Colorado-based group. The only problem was—they filed for Chapter 11
after she did the work so Fenix never received a dime.

She thought: “Pack it in!” Her husband said: “Keep at it!” So she
did. In December of that year, she got another call from the same
Colorado guy she dealt with earlier; he promised it would go better this
time and it did—she got a $350,000 USD contract and was off to the
races.

Fenix has six employees today and competes against some tough local
competitors like Real Decoy and Non Linear Creations in a heavily
male-dominated industry.

Four years ago, Fenix pivoted their biz model—MacKinnon decided to
make a risky change and become an Open Source developer. Clients were
becoming more concerned, she thought, with being locked into proprietary
systems. What if your vendor tanks? Who will support your applications
then?

Fenix has an annual run rate now of about $1 million and MacKinnon
says she’s having a lot of fun running her shop. She’s also wisely
realized that there’s no going back. “I’m unemployable,” she says with a
laugh so she is ‘stuck’ as an entrepreneur, forever.

Like many women, she has to juggle the enormous demands
entrepreneurship places on her with a family life that includes two boys
ages four and five.

One of the keys to success that MacKinnon has identified is just
showing up every day and going to work. Biz dev for her today is more
about answering her phone calls and emails, not so much about cold
calling to look for contracts. It helps too that Fenix has become known
as an Ottawa-based OS shop—that’s her differentiated value. She even get
calls asking Fenix to audit work done by other developers in this
space.

For example, Fenix is working with Tek Systems (a tech staffing
company) to conduct audits of existing Drupal OS environments and make
recommendations for improvement.

In less than four weeks, Fenix will be launching ‘Agent App’, a
separate company with its own Board and its own marketing for a new SAAS
biz. She noticed that many of the more than 1.2 million REALTORS in
North America have sites that talk a lot about themselves but make it
hard to find and access their actual product—their listings. Agent App
will do it better for a monthly fee—listings will be ‘above the fold’
and accessible everywhere including the mobile web.

She has figured out too that she can reduce the 1-to-many marketing
problem to a 1-to-a-few more manageable one by going to Brokerages with
an irresistible value proposition, basically saying: ‘We’ll pay you to
hire us!’ She’ll wholesale the app to them and they will resell it to
their Agents so the Brokerage’s cost to use Agent App will actually be
negative. We call that negative cost selling but you can call it smart
marketing if you want.

Professor Bruce M. Firestone, Entrepreneur-in-Residence, Telfer
School of Management, University of Ottawa; Founder, Ottawa Senators;
Executive Director, Exploriem.org; Broker, Century 21 Explorer Realty
Inc. Blog: www.eqjournal.org Twitter: www.Twitter.com/ProfBruce

Prof Bruce @ 12:17 pm

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Posted on
Saturday 6 August 2011

For readers of this blog who are used to seeing a more than
occasional article posted here, we apologize for the delay. Prof Bruce
is taking a sabbatical of sorts to write a novel (it’s a trilogy
actually) with a working title (that his editor doesn’t like at all)
called ‘Quantum Entity’.

Guest articles are WELCOME while he is away.

If you have any suggestions, let him know at bmfirestone @
exploriem.org or contact his assistant, Ms. Erika Godwin, egodwin @
exploriem.org.

Hope you are having a great summer of 2011 wherever you may be in the
northern hemisphere or a not too cold and dark winter south of the
Equator.

Prof Bruce

ps. if you would like to see what a novelist’s workstation looks like, here it is:

pps. if you would like to know what kinda softwear Prof Bruce is using to organize the trilogy, well, here it is too:

ppps. Lastly, here is the SCHEDULE of a part time
novelist as he does all the usual things he is responsible in his day
job, like being Entrepreneur-in-Residence at Telfer School of
Management, Executive Director of Exploriem.org, Real Estate and
Mortgage Broker at Century 21 Explorer and, of course, peerless husband
and father of five great kids:

Go to bed at 10 pm on a weekday
Get up at 2 am
Write until 7 am
Do yoga and run on treadmill from 7 to 7:45 am
Go to 1 of his day jobs
Get home at 6 pm
Be with famdamily until bedtime

Repeat until weekend arrives

Repeat every weekend until after a 5.5 week sprint beginning to end, first draft of Quantum Entity is completed

Crash for 12 hours

Get up and go to work

Prof Bruce @ 8:51 am

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Defining Leadership

Posted on
Tuesday 19 July 2011

Scott Adams, Dilbert creator, says leadership is about getting people to do things they know are not
in their best interests. WRONG. This is absolutely not what leaders do,
at least, not the successful ones I have known in RL (Real Life).

So for Adams and others, here is my attempt at defining what a leader is:

“A leader is a person who chooses from among many alternatives, some
of which s/he has generated and some of which either came from inside or
perhaps from outside their organization, the right path for his or her
tribe* getting buy-in from the whole organization as well as its entire
stakeholder group and making sure that all its resources are deployed
optimally to achieve their common objectives which serve not only to
sustain and augment the interests of its individual tribal members and
the organization itself but also a broader, ethical purpose for
humankind,” Prof Bruce, Ottawa, Canada July 2011.

(* I am using ‘tribe’ here in the same sense as Dave Logan et al in their 2008 book, Tribal Leadership: https://www.eqjournal.org/?p=1155. To learn more about how leaders are formed, please refer to: https://www.eqjournal.org/?p=1155. Note, I wrote this only to be read by people who are 22 years of age or older…)

Prof Bruce @ 8:16 am

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Posted on
Sunday 17 July 2011

Why a Stage 4 or 5 Corporate Culture is Essential to Startups and Established Enterprises Alike

Why is it that corporate culture is so important to the success of
startups and, in fact, all organizations? We know that Zappos.com’s
wacky corporate culture and resultant great customer service* were key
contributors to making it a billion dollar+ business which allowed Tony
Hsieh to sell it to Amazon for more than a billion. But how does that
actually happen?

(* For a review of Delivering Happiness by Tony Hsieh, please refer to: https://www.eqjournal.org/?p=973.)

It turns out that a big part of the valuation of Zappos.com arrived
at by Jeff Bezos, CEO of Amazon*, was attributable to Zappos’ corporate
culture so it isn’t just a nice thing to have—it brings in cash. But
exactly how does that process manifest itself?

(* Jeff has posted a fabulous 8 minute and 10 second video on YouTube about why he bought Zappos: https://www.youtube.com/watch?v=-hxX_Q5CnaA.
Jeff modestly tells you he only knows five things but these five things
are really worth knowing. Bezos is clearly immensely talented and
entrepreneurs should, IMHO, listen carefully to him…)

First, look at the chart below and see what type of corporate culture
you currently have (or what type of tribe you are as Dave Logan et al
in their 2008 book, Tribal Leadership, call it). If you are a Stage 1, 2
or 3 type of tribe, your corporate culture is almost certainly a net
negative in every way—it’s holding you back in terms of sales,
innovation, employee retention, corporate valuation, community
engagement and relevance to society as a whole.

Five Stages of Tribal Leadership/What Kind of Tribe are You?

But let’s assume for a moment that you are in Stage 4 or 5 or at
least trying to get there. For entrepreneurs and startups, many of the
things they actually do are made up as they go along and, in fact, are discovered* in the process of doing which means that they cannot be planned in advance. This is why you have to actually begin your startup and not just talk about it.

(* “Whatever you can do, or dream you can, begin it. Boldness has genius, power and magic in it. Begin it now,” Johann Wolfgang Von Goethe. Thanks to Eliot Burdett of https://eliotburdett.com/ for this quote.)

In fact, entrepreneurs are like scientists in a lab– constantly
experimenting to see what works because there is no mathematical model
that can actually predict the real world. As Ralph Waldo Emerson said: “All life is an experiment. The more experiments you make the better.”

But you also have to be open to opportunity and, for that,
you can’t be a Stage 1, 2 or 3 company. If you are a Stage 4 or 5 group
from the get-go, then you will be open to new ideas and discoveries. You
will see them everywhere, every day.

However, if your corporate culture sucks (i.e., you have a Stage 3 or
lower corporate culture), innovation will be largely absent because you
basically are blind to opportunity. For example, Stage 3 companies,
which are run by stars who already know everything and to whom no one
can teach anything, are very unlikely to be hotbeds of new products or
services. In Stage 3 enterprises, individual stars hoard information and
fail to verbalize their new ideas.

Innovation requires sunlight—excited discussion and shared passion
create an environment that is creative, fun, forward-looking and
empowering. It also gives people the courage to come forward with ‘dumb’
ideas that folks won’t dump on. Some of them turn out to be, say, 3M
Post-It notes…

Stage 2 companies (where everyone feels that their lives suck) or
Stage 1 groups (where all of life sucks) are just going to be worse. If
so, your competitors will eat your enterprise, one of your customers at a
time since they will, because they are highly innovative, provide higher levels of service and better products that deliver greater value.

In a Stage 2 company, people pour cold water on everything and, in
Stage 1, they actively, purposefully steal your ideas. So you pretty
much have to be a Stage 4 enterprise before you can really see any
benefit from innovation.

So here is how I think the process really works:

How Corporate Culture Actually Leads to Higher Valuation

Q.E.D.

Prof Bruce

Prof Bruce @ 9:44 am

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The Parallels between Product Manager and Entrepreneur

Posted on
Saturday 16 July 2011

Guest Post by Alan McNaughton, Associate Director – Internet Product Development – Bell Internet

Prof Bruce:

I’ve had the opportunity to review your course outline*, support
material and entrepreneurial tools that you make available to your
students. My initial reaction is that students who register for 6298
will have every opportunity to succeed academically especially if they
come to the course with a great idea, the foundation to kick-start a new
business venture immediately.

(*MBA Course 6298: Advanced Business Models for Entrepreneurs and Intrapreneurs, https://dramatispersonae.org/StartupDNA/StartupDNAFrontPage.htm.)

The parallels between the skill set required to be a successful
entrepreneur and a successful product manager are clear. Your course
outline suggests that product managers who know how to deploy an
entrepreneur’s skill set are more likely to have their projects and
products green-lighted and more likely to be promoted. I couldn’t agree
more with this statement and after reading through the material, it is
clear to me why you were interested in having me review it.

For the most part, the Outputs required in the course are also fundamental to my role as a product manager.

1. Business Model Flow Chart:
a. This is the E2E view of the business concept clearly broken down into
its core components to effectively rank the idea/concept.
b. My role is in a very large established organization which means there
is less ground work here for a Product Manager to do although the
‘Pixie Dust’ in any product is critical. In Telecom service development,
most competitive advantages cannot be sustained long term so success is
often the function of speed x accuracy: a concept must improve Brand
perception overall.
2. Value Prop/Single Sub economic model:
a. Product Managers must be able to describe both qualitatively and
quantitatively the Value proposition of a new product or service for a
single subscriber. For example, preliminary business cases often take
the shape that your Value proposition spreadsheet did for Agency vs.
FSBO (see: https://www.ottawarealestatenews.com/ValuePropositionFSBOVersusAgency.xls).
My desktop is literally littered with such spreadsheets and leads into
more detailed financial models if successfully pitched at various
strategy gates.
3. Financial Model:
a. The financial model and single subscriber economic point of view are
critical to showing profitability and long term sustainability. This
requires some in-depth knowledge of cost drivers and, in an organization
the size of Bell, requires partnerships with Finance and BDS (Business
Decision Systems).
4. Cash Conversion Cycle – demonstrates the ability to remain cash flow
positive. However, significant capital outlays in our industry make this
difficult in Yr 1. So being EBITDA (Earnings Before Interest Taxes
Depreciation and Amortization) positive is often a better litmus test
for a new service within a 3-5 year period.
5. Marketing pitch:
a. This is an underestimated part of a product manager’s role in a big
organization. The first client is often the marketing department
themselves (!) – you have to be able to convince marketing leadership
and colleagues unequivocally that it makes sense to do this now… It will
ultimately become the foundation of a mass or targeted campaign that
Marketing will run with.
6. Summary of Business model:
a. It is critical to be able to pull elements of a biz model into a
concise value proposition with a financial review so you can get it
approved and funded. The better this is done, the more effective Product
Manager you will be, the less time you will spend spinning your wheels,
and the faster you can get your next initiative green-lighted.

Students might also focus on the competitive environment as part of a
detailed business model flow-chart/ecosystem. Obviously tools like
Porter’s 5 forces and a SWOT analysis are business school/MBA
fundamentals but they are closely related to the concept of ‘Pixie Dust’
i.e., how will this new business leverage core competencies and
competitive advantages to successfully differentiate itself from the
competition and be able to generate value on a sustainable basis? At
Bell, I find it critical to baseline a concept relative to where the
industry is going or what are competitors are/are not currently doing.

I am intrigued by bootstrap/self-capitalization. At Bell, we have a
specific annual budget. Projects are ranked in terms of high level
benefits and those that meet specific criteria will have reserved
preliminary budgets in the following fiscal year. Bootstrapping is not
something that I have much knowledge of and am interested in learning
more about this as I evaluate potential future business ideas. If there
was a 6-day seminar course on this in 2012, it is something that I would
consider taking.

Cheers, Al

Prof Bruce @ 2:53 pm

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