EQ Journal Archive 2

         Why Businesses (Really) Fail        

       
   Posted on
       Saturday 30 March 2013  
     
   
       

And Why Even Mighty IBM Can’t Forget the Basics

Below are some data published by BusinessWeek on why businesses fail.
I’ll bet you that the top five reasons (too much debt, inadequate
leadership, poor planning, failure to change and inexperienced
management) are in fact related to number six on their list: not enough
revenue; i.e., business not generating enough income is probably by far
the biggest cause of business failure and they are not generating enough
revenue because of inadequate leadership, poor planning, failure to
change and inexperienced management, which also means they can’t meet
their debt obligations.

KEYS TO FAILURE
The top reasons most businesses fail, according to 1,900 professional who help troubled companies:

1. TOO MUCH DEBT 28%
2. INADEQUATE LEADERSHIP 17%
3. POOR PLANNING 14%
4. FAILURE TO CHANGE 11%
5. INEXPERIENCED MANAGEMENT 9%
6. NOT ENOUGH REVENUE 8%

Data: Buccino & Associates, Seton Hall University, Stillman School of Business (BusinessWeek, August 25, 2003)

If you have enough revenue, you will get financing today, not the
other way round. This is the lesson of the false boom of the late 1990s
and early 2000s when VCs and others financed startups with interesting
business models but no revenue or early prospect of revenues. This has
almost never worked, in any age.

If you have enough revenue, you can meet debt servicing cashflow
demands so a focus on revenue growth is vital. One needs to not only
generate revenue but collect it too. This seems self evident but a lot
of startups don’t do billing, invoicing and collections very well.

How long do you think mighty IBM would last if it didn’t collect its
receivables? IBM sells around $105 billion (in 2012) worth of goods and
services (one customer at a time, btw); their monthly revenues average
around $8.75 billion. Also in 2012, IBM had around $18 billion in free
cashflow which means, like everyone else, they have bills to pay—only
theirs are humongous. Their payables are approximately $87 billion per
year, an average of $7.25 billion per month. If they somehow ‘forget’ to
collect their receivables for three months, their AR (Accounts
Receivable) would balloon by $26.25 billion. Worse, their receivables
would be aging fast. Meanwhile their employees, contractors, suppliers,
Landlords and so forth would expect to be paid over the same period;
their AP (Accounts Payable) during that time would be around $21.75
billion which they would have to pay from existing bank lines, cash on
hand or via deferment. Even for IBM, this is untenable; they would be in
serious trouble in less than 90 days as bankers, analysts, shareholders
and other stakeholders become increasingly nervous. Their CEO would not
last out the quarter.

So we need to be cautious in how we interpret the Seton Hall
University Stillman School of Business data. In my experience, the
number one reason for failure is absence of buoyant revenues. I mean how
many businesses have you heard of folding if their revenue numbers are
ratcheting up every month?

@ProfBruce
@Quantum_Entity

Dr Bruce M Firestone, B Eng (Civil), M Eng-Sci, Phd. Founder, Ottawa
Senators; Author, Quantum Entity Trilogy, Entrepreneurs Handbook II;
Executive Director, Exploriem.org; Broker, Century 21 Explorer Realty
Inc; Entrepreneurship Ambassador, Telfer School of Management,
University of Ottawa. 613.566.3436 X 200. bruce.firestone @ century21.ca

Follow Prof Bruce on Twitter @ProfBruce and @Quantum_Entity and read his blogs at www.EQJournal.org and www.dramatispersonae.org.

You can find his works at www.brucemfirestone.com and also at LearnByDoing.ca.

You can engage with him on Facebook via https://www.facebook.com/QuantumEntityTrilogy and https://www.facebook.com/Exploriem as well as via LinkedIn at https://www.linkedin.com/in/profbruce.

His real estate interests are summarized at www.ottawarealestatenews.com and www.thelandstore.org.

YouTube channels include https://www.youtube.com/user/ProfBruce and https://www.youtube.com/user/quantumentitytrilogy.

You can also read the first four chapters of Quantum Entity Trilogy or send it to your friends for free from: https://www.old.dramatispersonae.org/images/QuantumONE_CS_Third_Edition_First_Four_Chapters.pdf

You can read the first two chapters of Entrepreneurs Handbook II or send it to your friends for free: https://www.brucemfirestone.com/wp-content/uploads/2013/03/entrepreneurs-handbook-2013-edited-first-two-chapters-withCovers.pdf

Prof Bruce’s current motto is: “Making Each Day Count”

       
       
       
     Prof Bruce @ 7:06 am

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         Justintime Trudeau Announces New Foreign Policy Initiative for Nation        

       
   Posted on
       Thursday 21 March 2013  
     
   
       

Canada to Annex Ecuador

MONTREAL (March 18, 2013)—Newly elected Liberal leader, Justintime
Trudeau, announced today that if elected Prime Minister he will
introduce a new foreign policy initiative—the annexation of Ecuador.

“It is my government’s view that Canada and Canadians must look south
to solve recurring weather-related economic issues. Today, I am setting
out a bold five step plan to mitigate this important challenge that all
Canadians face together—

“One. After each New Year’s Eve, all Canadians will henceforth travel
south for the months of January, February and March returning north
when better weather arrives in April of each year.

“Two. This is an opportunity that should be shared equally by all
Canadians whatever their income or housing status and, to that end, the
Government of Canada will be introducing the Fairness in Travel Act in
the next session of Parliament. This new Bill will provide each Canadian
with an annual taxable grant of $3,000 per month (total of $9,000) to
assist them with and offset some of their travel costs.

“Three. A skeleton crew of volunteers will be stay behind in Canada
to maintain vital infrastructure and the built environment of this
country so ordinary Canadians will not have to worry about returning to
homes and businesses destroyed by fire or other misadventure.

“Four. The after tax cost to Federal and Provincial Treasuries will
be approximately $116 billion annually. However, our Government intends
to enter into immediate negotiations with the Democratic Republic of
Ecuador with a view to having the great nation of Ecuador join our
Federation as its 11th Province. If these negotiations are not
successful, the Government of Canada will move to annexation.

“Five. After joining Canada, Ecuador’s GDP will jump from around $68
billion CAD to more than $184 billion and its population from 14.7
million to 49.1 million during winter months.”

Mr. Trudeau’s announcement today at the Bell Centre was widely
welcomed by a throng of well wishers. He passionately called upon his
followers in the audience and on Twitter to right an historic wrong that
Tories and Joe (Prime-Minister-for-a-day) Clark made when they timidly
refused to annex the Turks and Caicos in 1979 even after a non-binding
referendum there showed more than 60% of their population wished to join
Canada. Whipped into a frenzy, Bell Centre fans poured out of the home
of Les Glorieux to march along René Lévesque Boulevard whereupon a riot
broke out and windows in more than 30 stores and businesses were
shattered. Montreal riot police in full gear arrested more than 50
celebrants.

When asked, “Why Ecuador?” Mr. Trudeau answered this way, “Hola! It’s
a peaceful democracy like Canada with great cities, cultures and
history, amazing bio diversity, fantastic Pacific coastline plus
ownership and stewardship of the Galapagos Islands. It is close to the
equator with mild weather year-round and no hurricanes. Most
importantly, real estate in Ecuador is a fraction of the cost elsewhere
in Latin America or the Caribbean and Canadians will be able to live
there at Ecuador prices but with gringo dollars.”

Mr. Trudeau urged Canadians to go to https://canada.gc.ca/ and sign up right away for their free grant.

-30-
For more information, please contact:

Mr. Justintime Trudeau @justintimetru

If you would like to beat the crush, please come to our FREE
information seminar on Hola Ecuador, a project by Canadians for
Canadians. Sign up here—https://HolaEcuador.eventbrite.com

To find out more about lots at Hola Ecuador, please view https://www.ottawarealestatenews.com/c21-Mirador-san-jose-info-pack-18-March-2013.pdf

Yubarta homes available too:

Another day at the beach:

Media release as PDF, https://www.old.dramatispersonae.org/images/ecuador-media-release-18-march-2013.pdf

FOR MORE INFORMATION:

@ProfBruce
@Quantum_Entity

Dr Bruce M Firestone, B Eng (Civil), M Eng-Sci, Phd. Founder, Ottawa
Senators; Author, Quantum Entity Trilogy, Entrepreneurs Handbook II;
Executive Director, Exploriem.org; Broker, Century 21 Explorer Realty
Inc; Entrepreneurship Ambassador, Telfer School of Management,
University of Ottawa. 613.566.3436 X 200. bruce.firestone @ century21.ca

Follow Prof Bruce on Twitter @ProfBruce and @Quantum_Entity and read his blogs at www.EQJournal.org and www.dramatispersonae.org.

You can find his works at www.brucemfirestone.com and also at LearnByDoing.ca.

You can engage with him on Facebook via https://www.facebook.com/QuantumEntityTrilogy and https://www.facebook.com/Exploriem as well as via LinkedIn at https://www.linkedin.com/in/profbruce.

His real estate interests are summarized at www.ottawarealestatenews.com and www.thelandstore.org.

YouTube channels include https://www.youtube.com/user/ProfBruce and https://www.youtube.com/user/quantumentitytrilogy.

You can also read the first four chapters of Quantum Entity Trilogy or send it to your friends for free from: https://www.old.dramatispersonae.org/images/QuantumONE_CS_Third_Edition_First_Four_Chapters.pdf

You can read the first two chapters of Entrepreneurs Handbook II or send it to your friends for free: https://www.brucemfirestone.com/wp-content/uploads/2013/03/entrepreneurs-handbook-2013-edited-first-two-chapters-withCovers.pdf

Prof Bruce’s current motto is: “Making Each Day Count”

       
       
       
     Prof Bruce @ 9:10 am

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         Things Every Tech Startup Needs to Know about Self-Capitalization        

       
   Posted on
       Sunday 3 February 2013  
     
   
       

By Bruce M Firestone, B Eng (Civil), M Eng-Sci, PhD

Abstract

In the five year period leading up to 2010, approximately 91.6% of
all tech startups in the US were self-funded or bootstrapped, 8.1% were
Angel-backed and just 0.3% were VC-funded. How to self-fund
(self-capitalize or bootstrap) new tech enterprises is the subject of
this paper.

Self-funding objectives are primarily fourfold—improve speed to
market, retain a higher percentage of ownership of new enterprises in
the hands of their founders, increase returns on equity and improve
survivorship rates. Furthermore, self-capitalization results in more
efficient use of a scarce resource—startup funding—crucial to national
economic development.

Self-capitalization is a different form of financial capital. Unlike
either debt or equity, self-capital is either ultra low cost or free
(ignoring opportunity costs). Sources are many and varied. It is an
underexploited form of capitalization. It is faster to raise than either
equity or debt sourced from conventional sources such as Angels, VCs,
commercial banks or Government programs.

Main sources of self-capitalization are trade credit (or supplier
credit), deposits/retainers/advances/progress payments from customers or
clients, rights fees from and/or investment by strategic
investors/sponsors/partners, founder sweat equity, script, soft capital,
home equity loans, micro capital loans, crowd funded capital sourced
via sites like Kickstarter.com or Indiegogo.com, IP licensing, financial
leasing, credit cards, receivable factoring, accretive buying,
accretive selling, seller take back financing, trading and asset
flipping, partner loans/contributions, consulting/moonlighting,
competitions, barter, borrowing physical assets like office
space/tools/furniture/personnel, co-branding and co-marketing. In
addition to speeding up the go-to-market process, self-capitalization
improves ROE, Return on Equity, as well as project IRR, Internal Rate of
Return, causes the cash conversion cycle to become negative and allows
entrepreneurs to control more of the equity of their own enterprises
over a longer period.

Introduction

Texts on financing new ventures tend to focus either on micro-finance
for tiny businesses mainly in Third World nations or VC-track
enterprises. Leach and Melicher (Entrepreneurial Finance, J Chris Leach
and Ronald W Melicher, South-Western College Publication, 2009) refer to
early stage financing as ‘seed funding’ whose ‘primary source of funds at the development stage is the entrepreneur’s own assets.’

Schumpeter said in 1934, ‘Entrepreneurs are innovators who use a
process of shattering the status quo of existing products and services,
to set up new products, new services.’ Entrepreneurs are persons
who efficiently use scarce resources, most of which are not their own,
to disrupt the status quo. Hence, discussions of business valuation,
first round financing, second round, mezzanine financing, bridge
financing and IPO are almost wholly irrelevant to a vast majority of
startups around the world today.

‘Empty pockets never held anyone back. Only empty heads and empty hearts can do that,’ Norman Vincent Peale.

The role of investment banking firms, venture law firms, commercial
banks, public financial markets and securities firms is limited in the
startup process.  In Fool’s Gold, The Truth Behind Angel Investing in America
(Oxford University Press, 2008), Scott Shane estimates that
approximately 600 (pre-revenue) tech startups were funded in the US by
VCs in 2004 while about 35.5% of all Angel-backed startups were
pre-revenue. This works out to approximately 16,000 startups funded by
Angels each year during this period (J Basil Peters, https://www.angelblog.net/Angels_Finance_27_Times_More_Start-ups_Than_VCs.html).

The US Census Bureau’s BDS data base suggests that an average of
198,000 tech startups (defined as those with 100 employees or less) were
created per year in the five year period leading up to 2010 in the
United States. Taken together, these figures imply that 91.6% of all
startups during this time were self-funded or bootstrapped, 8.1% were
Angel-backed and just 0.3% were VC-funded.

Self-Capitalization

If an entrepreneur is someone who efficiently use scarce resources,
most of which are not their own, to disrupt the status quo, where does
s/he get those resources from? Often they receive funding from future
customers/clients and suppliers. Sources such as commercial banks and
government support programs play a lesser role than they once did.
Commercial banks in Canada and most of the world tend to lend money to
people who already have significant collateral while governments may
take too long to make decisions and provide support.

Supplier Credit

In 2009, trade credit (or supplier credit) surpassed bank lending as a
source of finance for business in the US. TC amounted to $2.15 trillion
that year versus $1.5 trillion in bank lending (which was down more
than 6.5%, year over year) according to data from the US Federal
Reserve.

For startups, trade credit or supplier credit is a key source of
funding. For tech startups, supplier inputs may include—software and
hardware (both off the shelf and custom), consulting services, office
space, fabricators, designers and developers (GUI, packaging, website,
mobile app), product managers, HR, law firms (corporate/commercial and
IP advisors) and accountants as well as IT and telecommunications
infrastructure.

Some of these inputs may be contributed by suppliers on credit. Why would they do that?

• First of all, they do it because they trust the business they are providing credit to, to eventually pay them.
• Secondly, they want to expand the market and their market share—one of
their key weapons for doing this is to provide credit to firms that buy
from them.
• Thirdly, this tends to lock clients into their business ecosystem—once
a client has been approved for trade credit, they tend to buy from the
same source over and over again using their approved credit facility on a
revolving basis. They also tend to be less price sensitive than retail
buyers since they are using credit instead of their own cash and they
often have the ability to pass on higher costs to their clients.
• Fourthly, once they establish good credit, they may apply for a higher credit limit to expand their business further.
• Fifthly, suppliers expect to be paid not by their clients but by their
clients’ clients. So a supplier is actually funding (indirectly) credit
worthiness of their client’s clients.
• Sixthly, suppliers want their clients to survive for a long period.
They will often go out of their way to help out a loyal client who gets
into financial difficulties by giving them improved terms for their
financing, forgiving portions of their debt or trading debt for equity.
Commercial banks may call their loans if they learn a new business is
experiencing cashflow issues. Suppliers tend to remain supportive (to a
point).

Customer Financing—Case Study

Tech companies can also source startup capital from their clients.

Game Tech, GT*, is an advergaming startup about five years old. They
are a top notch Ontario-based advergaming firm. They have—i. significant
growth in their order book, ii. a client list that includes Fortune 50
and Fortune 500 companies and iii. excellent technology and creative
resources within their business ecosystem. With each new order, they
need to build a bigger ‘pipeline’ to deliver their products—i.e., hire
more highly paid tech developers on contract.

(* Company name and some of the data have been changed for this article.)

GT asks for and receives ten percent of order price upon execution of
each new sales contract. They do not ask for nor receive any progress
payments even when they hit important project milestones. They wait
until their complex projects, many of which are multi-year, are
completed plus 30 days to receive the balance of the order price.

As a result, they require substantial amounts of capital from their
Bank to fund their growth. At one point, they exceed their approved
$700,000 line of credit by $11,000 and, as a result, their Bank calls
their loan. Within ten days, they will not be able to meet payroll.

However, in crisis, there is opportunity. Businesses experiencing
financial difficulties can turn to four other sources for
assistance—their Board, their shareholders, their suppliers and their
clients. In GT’s case, their Board and shareholders are one and the
same—they are all entrepreneurs with some personal resources but at this
stage of their careers and development, they are fully committed.
Consequently, GT is forced to adopt a different, bi-directional
strategy—they ask their clients for advances on signed contracts and
they change their business model.

Their clients (all but one of them) come to their assistance and save
the firm. They do this because superb advergaming technology companies
are difficult to replace especially mid-contract.

Next, GT changes their model which now calls for 1/3 deposit/retainer
upfront with each new contract signed and then progress payments that
always put the firm ahead in terms of their cashflow. Only 10% is due
upon final delivery plus 30 days. Their Cash Conversion Cycle (CCC)
changes from +274 days to -61 days and the firm goes on to open offices
in New York, Toronto and LA. Total employment now exceeds 170.

CCC is an important tool for entrepreneurs to use—if it is 0 or
negative, then entrepreneurs can grow their businesses without need of
outside funding. Let’s examine GT’s current cashflow position using a
simplified model.

Assume they do only one transaction in their financial year in the
amount of $3,000,000, their cost of goods sold is $2,000,000, they pay
1/3 up front to their contract developers (i.e., $666,700) and they
receive a deposit of 50% from their client or $1,500,000.

Their Cash Conversion Cycle is calculated as follows:

CCC = ART + INVT – APT,

Where:

ART is Accounts Receivable at Year End,
INVT is Inventory at Year End,
APT is Accounts Payable at Year End.

We can determine Game Tech’s CCC thusly—

Accounts Receivable at Year End (AR) $1,500,000
Days Per Year 365.25 Days
AR x Days Per year $540,787,500 Dollar-Days/Annum
Annual Sales $3,000,000 Dollars/Annum
AR x Days Per year/Annual Sales 182.625 Days ART

Inventory at Year End (INV) $0
Days Per Year 365.25 Days
INV x Days Per Year $0.00 Dollar-Days/Annum
Cost of Goods Sold (COGS) $2,000,000 Dollars/Annum
INV x Days Per Year/Annual Sales 0 Days INVT

Accounts Payable at Year End (AP) $ 1,333,300
Days Per Year 365.25 Days
AP x Days Per year $480,700,000 Dollar-Days/Annum
Cost of Goods Sold (COGS) $2,000,000 Dollars/Annum
AP x Days Per year/Annual Sales 243.5 Days APT

CCC -60.875 Days

Notes: Payables Down 0.333333333 0.666667 In 30 days One Sales Transaction

Game Tech’s Cash Conversion Cycle is now a healthy -61 days which
means that the faster GT grows, the more cash they have on hand.

This is a non-trivial advantage for them. If they had tried to
continue to rely on their Bank to fund their AR and inventory then they
are vulnerable to changes in Bank policy because of, say, appointment of
a new Account Manager or an overall downturn in the economy. GT is
relying instead on its customers and suppliers to provide them with
financing, a more stable form of capitalization.

What if GT, instead of asking for half down from clients with each
order, only receive payment when each order is delivered? What happens
to their CCC? It becomes a significantly worse +122 days. So even though
they are still only providing suppliers with 1/3 down, waiting this
long to be paid by customers means that they will have to find outside
financing for each new order they take.

Of course, if they don’t pay anything to suppliers until they get
paid, their CCC will be exactly 0 which is an improvement on +122.
However, clients are not then a source of capital for their growing
firm. Small changes in company policies produce big changes in CCC.

One of the keys to self-capitalization is to reduce the need for
startup capital in the first place. This can be done by looking for
financing in the deal flow itself. If capital is available from clients
and from suppliers, new enterprises should try to source as much as they
can (within reason) from both. It is often low cost or no-cost capital.

Strategic Investors

One of the most overlooked sources of self-capitalization for new
enterprises is the strategic investor. What is a strategic investor?
Someone who has a strategic interest in your success.

How do you find them? Look through your value chain.

Why go to strategic partners? They will generally make investment
decisions faster than Angels, VCs, banks or governments and they will
have more capital and better connections throughout your industry than
raising money from friends and family.

What will they ask for in return? Often much less than anyone
else—perhaps they will be satisfied with, say, an exclusive period
during which they can feature/market/use your products or services
thereby keeping your products or services away from their competition
and further differentiating themselves in the marketplace. The funding
they provide may also come with fewer strings attached.

When Apple launches a new product like the iPhone, iPad or iPad mini,
what is it worth to a third party app developer, say, to be included on
their home screens? Organizations pay significant rights fees simply to
be featured in product launches like these. What’s good for Apple is
good for your next startup as well.

Equity Investors

Why do equity investors fund startups? It’s to improve their returns.

How do you convince anyone to invest in your startup without giving
up too much equity? One thing entrepreneurs often underestimate is the
value of their sweat equity. They focus all their time and brainpower on
making a new enterprise successful. Investors are passive; alternative
investments such as GICs provide minuscule returns—typically 1.7% p.a.
or less. Entrepreneurs are expected to generate returns greatly in
excess of this and, consequently, they have leverage which they can use
to strengthen their negotiating position with either financial investors
or silent partners.

Value can be attributed to sweat equity in a number of ways—it can be
calculated as a product of number of hours worked times an hourly wage
or the difference between the cost of starting a new enterprise and its
fair market value. Entrepreneurs can use a financial model that provides
an acceptable return to outside investors and assume that the balance
of value created is (or should be) theirs.

An equity price is determined as most prices are—by what a willing,
knowledgeable buyer and seller agree to in a marketplace where no undue
pressure exists either to buy or to sell. The only rule that
entrepreneurs need know in this regard is that there are no rules.

Raising Capital by ‘Issuing’ Script

There’s nothing new about raising money by issuing script. The
Reynolds Brothers ran a sawmill (established in 1870 by Orson L
Reynolds) in the Adirondacks. In addition to logging and operating a
local mill, they also ran a company store and developed other sources of
income including catering to boarders as well as selling merchandise to
loggers in logging camps (Reynoldston, New York History of a Mill
Town).

When they needed to raise money, they issued script such as a $5
promissory note to pay their bills and to fund new ventures or additions
to existing ones. The script says it is, ‘Due to the Bearer… In Trade At…’
What this means is that the bearer of the script cannot redeem it for
cash, i.e., a sovereign banknote of the nation (the United States of
America). The fact that it is redeemable only ‘In Trade’ is key.

Reynolds had a margin on each trade so a $5 note with a GPM (Gross
Profit Margin of say 40%) only costs them $5/(1 + .4) or $3.57. It’s a
good deal for Reynolds but is it a good deal for a supplier, equipment
maker or labourer who accepts script instead of banknotes?

The answer is, it depends. If you can’t get any other work, $5 in
credit at a Reynolds Company Store, $5 in cigarettes or candy from a
Reynolds vendor (which could then be traded for other resources) or $5
in Reynolds products (milled lumber) might be better than watching your
family starve circa 1876 even if you know that it’s only really worth
$3.57.

Tech startups can learn from this. They can issue script to
employees, contractors, suppliers and clients redeemable in the form of
company products or services.  

Accretive Buying

If you think that bootstrap capital is something only startups use,
think again. Large firms including the Disney Company use Bootstrap
Capital,

They did this when then CEO Mike Eisner acquired the Mighty Ducks of
Anaheim expansion franchise from the National Hockey League in 1993/94.
The franchise fee of $50 million was paid as follows—$25 million to the
League and $25 million to the LA Kings (then owned by Bruce McNall). But
the Kings were paid $5 million per year for five years, a form of
Seller Take Back (STB) financing (or Vendor financing), a prime source
of capital for startups.

In addition, Disney got a $20 million leasing inducement from Ogden
Corp. (then owner of the Pond, now called the Honda Center where the
Ducks play) to sign a longterm building lease. Next, Disney put in place
a $30 million line of credit secured by their newest asset (i.e., the
franchise itself). Hence, Disney acquired the team for a negative $20 million in cash.

This demonstrates that Bootstrap Capital is often ‘free’ capital. The
$20 million dollar leasing inducement that Disney received from Ogden
did not require any interest payments and, in fact, there were no
principal repayments either. Vendor financing Disney got from the Kings
was also, in effect, an interest-free loan for five years.

Free or ultra low cost capital can radically change your IRR
(Internal Rate of Return) on a project and your ROE (Return on Equity)
too. The two most important influencers on a project’s rate of return
are—upfront costs and the passage of time. If you can reduce or even
turn your upfront costs negative, impacts are substantial.

This can really help an intrapreneur inside an established
organization stand out from her/his peers. Say you work at Cisco and you
are an intrapreneur who knows how to use these types of self-funding
techniques. Suppose you go to your supervisor and say, ‘I have a project
that will take two years of R&D at a cost of $10 million but I have
three launch clients each willing to pickup $2.5 million of that cost
and take the first six months of production.’ It is likely that your
idea will get an enthusiastic hearing. More enthusiastic than a
colleague who has a competing project that takes the same amount of time
to develop and costs as much to bring to market but they haven’t lined
up any launch clients or received any hard commitments not only to buy
the product once it’s ready for market but to contribute some (bootstrap
and free) capital to help develop it as well.

Accretive Selling

Whatever you are selling, you will almost always sell more of it if
you provide financing for your clients and customers. If you are selling
$10 per month software seat licenses, you are probably going to sell
more than if you sell one-time $1,000 software installs instead. Most
tech entrepreneurs are familiar with those ‘Don’t-Pay-A-Cent-Events’
(OAC) that furniture and appliance stores promote but may not be aware
that, before clients have even left the building, their sales contracts
have. As a result, those retailers have more cash on hand after selling
you a new home theater system than before because they sell these
contracts to third party financiers for cash.

Tech firms can also turn each monthly service contract or seat license into cash if they pledge them in much the same way.

Alternatively, they can provide financing to clients who buy
expensive installations—whether the contract price is $1,000 or
$100,000, they can often find third party funders so that their clients
pay a monthly fee instead of a one time upfront amount.

Crowd Funding

Bootstrapping is becoming more common for projects that are wholly
original or appear to be. Craft businesses are being funded in
increasing amounts on sites such as Kickstarter.com or Indiegogo.com.
Without giving up any equity, entrepreneurs and artpreneurs acquire
significant amounts of ‘free’ capital by pledging unusual experiences
including first-in-line-to-buy, customized/personalized products or
services, signed copies, dinner with the Founders, personal thank yous,
lower prices for products, event tickets, special memberships,
invitations to a house party, off-beat t-shirts and so forth.

It seems only a matter of time before crowd funding merges
with/begins to compete with the equity finance industry but only after
regulatory hurdles make this legal. Crowd funding sites are only
permitted to operate on a reward or donation basis but President Obama’s
JOBS Act of April 2012 may make it possible to trade equity for
investment on these sites (Inside The JOBS Act: Equity Crowdfunding,
Forbes, June 2012) after the SEC provides a set of rules for this
expected to occur sometime in 2013.

The Last Word

We keep adding to our list of sources of Bootstrap Capital. We hope
that it will continue to be helpful to entrepreneurs (and intrapreneurs)
as they build new services, products and enterprises of all types. Self
capitalization techniques are useful not only to for-profits businesses
but also non-profits, charities and NGOs. No list can be complete and
ours certainly is not. To view the entire list of self capitalization
techniques, please visit, https://www.eqjournal.org/?p=1171. Here are
some of the primary sources of bootstrap capital for tech startups—

1. Soft capital—money from family and friends
2. Home equity loans—ultra low cost debt secured by the value of your primary residence
3. Future customers—acquiring cash from launch clients in advance,
securing deposits/retainers/progress payments from customers earlier in
the deal flow
4. Future suppliers—getting credit from trade contractors, paying later in the deal flow
5. Strategic partners—organizations providing various forms of support
(cash, credit, office space, tools, personnel) because they stand to
benefit from your offering
6. Micro capital lending—programs that quickly provide small amounts of capital with few strings
7. Government support programs—such as the SBL (Small Business Loan)
program in Canada that only requires founders to personally guarantee a
small percentage of the loan or SR&ED Tax Credits and NRC-IRAP
grants
8. Rights fees—upfront payments to be included in a product launch
9. Product placement—fees paid to be featured in a product launch
10. Licensing fees—royalty payments on patents and other IP
11. Consulting services—moonlighting to support a startup
12. Partners—providing cash and valuable skills
13. Investors—seeking higher returns
14. Financial leasing—pledging fixed assets
15. Factoring—trading receivables for cash
16. ESOPs—Employee Stock Ownership Plans
17. Advertising—securing sponsors who want to be associated with your new product or service
18. Trading—buying low and selling high/asset flipping
19. Credit cards—multiple providers
20. Accretive buying—having more cash on hand after buying a company than before
21. Accretive selling—providing customers with 3rd party financing
22. Script—coupons redeemable in trade by suppliers, customers, employees
23. Crowd funding—non monetary compensation for supporters who supply cash
24. Seller Take Back financing—low cost financing provided by Vendors
25. Sweat equity—supplied by founders.

Conclusion

Financings have been done for a long time using two basic types of
capital—equity and debt. However, if we ask the question, ‘What is
cheaper—debt or equity?’ with a follow up question, ‘What is cheaper
than debt and equity?’ we may conclude that self capital is a new form
of funding. Debt is usually cheaper than equity and bootstrap capital is
usually cheaper than both because, essentially, it’s free.

Supplier credit is often extended to startups without cost (that is,
without interest or other fees usually associated with financings)
because, if the startup is successful, a supplier has helped to create a
new client for itself, often a very loyal new client.

Clients can also be induced to extend credit to a new enterprise (in
the form of deposits/retainers/progress payments) without cost because,
again, if the startup is successful, the client has helped to create a
new supplier for itself, often a very loyal new supplier.

Self-capitalization methods are tremendously varied. It subsumes
sweat equity which is, of course, a form of human capital—capital
contributed by startup founders in the form of free or low cost labour.

Financial capital can be broken down in business models and plans
into three categories—debt, equity and self capital. Other forms of
capital include social capital, intellectual capital, cultural capital
and environmental capital, all of which are beyond the scope of this
article.

The Internal Rate of Return on a project as a whole is made up of a
type of weighted average of the returns on equity, debt and self
capital. If the cost of bootstrap capital is small or zero (ignoring
opportunity costs), it improves overall returns on equity which explains
why many entrepreneurs see IRRs on their own investments much higher
than passive investors. It also explains why issuing equity to
employees, partners or other stakeholders as a form of payment can be
expensive. If a new enterprise is successful, this is likely the most
expensive way to source funding. Entrepreneurs must exercise caution in
this area if they are to retain longterm control over their new
enterprises—additional debt or bootstrap capital is an antidote to
losing control to partners, employees, VCs or Angels with one
proviso—the enterprise must be successful.

Internet tools are abundant and many are available for free or
practically no cost. These let you bootstrap a website, online store,
blog, social media presence, do basic accounting, make and receive
payments, process credit cards, backup your data, share data and
transfer data for no money or very little money. It is much easier to
start a business in the 21st Century than at any other time in recorded
history.

Bibliography

Accounts Receivable Factoring Guide, Curt Matsen, CPA, 2012.
Entrepreneurial Finance, J. Chris Leach, Ronald W. Melicher, South-Western College Pub, 2011.
Entrepreneurial Finance: A Casebook, Paul A. Gompers, William Sahlman, John Wiley & Sons, 2010.
Entrepreneurial Finance: Finance and Business Strategies for the Serious
Entrepreneur, Edition 2, Steven Rogers, Roza Makonnen, McGraw-Hill
Companies, 2009.
Equity Valuation for Analysts and Investors, James Kelleher, McGraw-Hill, 2010.
How to Get the Financing For Your New Small Business: Innovative
Solutions From the Experts Who Do It Every Day, Sharon Fullen, Atlantic
Publishing Group Inc, 2006.
Optimizing Company Cash: A Guide for Financial Professionals, Michele
Allman-Ward, American Institute of Certified Public Accounting,2007.
Strategic Trade Credit, Salima Yassia Paul, 2010.
The Kickstarter Handbook: Real-Life Success Stories of Artists,
Inventors, and Entrepreneurs, Don Steinberg, Quirk Books, Original
edition, 2012.
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to
Create Radically Successful Businesses, Eric Ries, Crown Business,
2011.

Author Biography

Bruce M Firestone, B Eng (Civil), M Eng-Sci, PhD

Bruce M Firestone is best known as a professor, entrepreneur and
founder of NHL hockey team, the Ottawa Senators and their home
Scotiabank Place as well as Author of Quantum Entity Trilogy,
Entrepreneurs Handbook II and Urban Nirvana (2014/15).

Firestone is Executive Director of Exploriem.org, a Canadian
registered Not-For-Profit corporation focused on educating and mentoring
entrepreneurs, intrapreneurs and artpreneurs in Canada and around the
world. He is also coaching, mentoring and teaching via Learn By Doing
School, an organization dedicated to providing student entrepreneurs
with access to research, education and a network of high achievers not
available elsewhere.

Firestone has launched or helped launch more than 172 startups in
fields including tech, real estate, design, art and services. He advises
clients on business modeling, self-financing, smart marketing, social
media, differentiated value, strategic selling and business development,
market channel development, harnessing the Internet, urban design, real
estate development, design economics, product management, sponsorship
and development economics as well as issues related to entrepreneurial
organizations including not-for-profits and charities.

In May of 2006, Dr Firestone joined the University of Ottawa’s Telfer
School of Management at as its first Entrepreneur-in-Residence. He has
previously taught or studied at McGill University (Bachelor of Civil
Engineering), Laval University, Harvard University, University of
Western Ontario, University of New South Wales (Master of
Engineering-Science, Traffic and Transportation), Australian National
University (PhD in Urban Economics) and Carleton University. Firestone
is now Entrepreneurship Ambassador for the Telfer School.

Dr Firestone has been an operations research engineer, real estate
developer, hockey executive, professor of architecture, engineering,
business and entrepreneurship, real estate broker (with Century 21
Explorer Realty Inc), writer, researcher, columnist and novelist. He is a
peerless husband and father of five great kids and one fine grandson.
You can follow him on Twitter @ProfBruce and @Quantum_Entity and read his blogs at www.eqjournal.org and www.dramatispersonae.org. You can find his works at www.brucemfirestone.com and www.learnbydoing.ca. You can engage with him on Facebook via https://www.facebook.com/QuantumEntityTrilogy and https://www.facebook.com/Exploriem as well as via LinkedIn at https://www.linkedin.com/in/profbruce. His real estate interests are at www.OttawaRealEstateNews.com and www.thelandstore.org. YouTube channels include https://www.youtube.com/user/ProfBruce and https://www.youtube.com/user/quantumentitytrilogy. You can also send the first four chapters of Quantum Entity Trilogy to your friends for free from: https://www.exploriem.org/quantum-entity-subscribe/

His current motto is, ‘Making Each Day Count‘.

       
       
       
     Prof Bruce @ 12:06 pm

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        Filed under:

Bootstrap Capital

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Bootstrap Entrepreneurs– Case Studies

and

Cash Conversion Cycle

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         Exploriem Announces NEW Startup Membership Program for 2013        

       
   Posted on
       Thursday 3 January 2013  
     
   
       

Why Getting a Mentor is Key and How to Find One

OTTAWA (January 3, 2013) – Exploriem announces today, a new
membership program for startup entrepreneurs, intrapreneurs and
artpreneurs for the Greater Ottawa Area. For a small annual fee,
entrepreneurs gain access to essential resources and services. Exploriem
will be offering different levels of membership that have a different
set of benefits.
Starting at $95.00+HST/year, a startup company will have access to
Exploriem’s meeting room, equipped with a Samsung SmartTV and also our
large boardroom, equipped with a SMARTboard and lounge area. This gives
the startups a professional location with the essential tools to host
important meetings.

The program also offers startup companies free and discounted tickets
to Exploriem events throughout the year. Members will receive two (2)
free tickets to our summer event, EVENT-AID. Members will also receive
discounts on tickets to both the Bootstrap Awards and Adawe Trade-Show
as well as TechLinks. Members also receive a preferred rate when
purchasing exhibitor space at the Adawe Trade-Show and EVENT-AID.

Having a mentor is extremely important when you are starting a new
enterprise and so we have added a mentoring aspect to the membership.
Startups receive all the above benefits of membership plus they are
strategically assigned a mentor for just $195.00 per year.

“A 2011 Silicon Valley study showed that startups that set goals
and track their metrics are growing 7x faster than those who don’t.
Mentors that help startups set the right goals and then hold them
accountable, play a crucial role in their successful development. That
is why Exploriem.org has recruited some of the best mentors anywhere to
help member startups get on the right track,” Bruce M Firestone,
Executive Director, Exploriem.org; Founder, Ottawa Senators; Author,
Quantum Entity Trilogy, Entrepreneurs Handbook II; Entrepreneurship
Ambassador, Telfer School of Management; Real Estate Broker, Century 21
Explorer Realty, Ottawa, Canada, Janaury 2013 (Startup Genome Report 01, Max Marmer, Bjoern Lasse Herrmann, Ron Berman, May 2011).

Other features include: an Exploriem Member badge for your corporate,
personal websites and mobile apps, VIP invitations to Thirsty Thursday
Networking events, Corporate Profile in Member Directory, opportunity to
submit content and news updates for the Exploriem Newsletter and access
to our Partner Services Discounts. More benefits will be added in the
future.

Notes to Editors

About Exploriem
Exploriem is a registered Canadian not-for-profit organization. It
provides mentorship, conducts events, creates networking opportunities
and provides advice, early stage funding, market channel management and
office incubator space to assist young entrepreneurs in Eastern Ontario
and West Quebec.

Today, Exploriem is led by its Executive Director, Professor Bruce M.
Firestone who is best known as the Founder of the Ottawa Senators. He
is also Entrepreneurship Ambassador at the Telfer School of Management,
University of Ottawa, Author of Quantum Entity Trilogy and Real Estate
Broker with Century 21 Explorer Realty Inc. Assistant Director, Ms.
Erika Godwin runs the programming for Exploriem and manages the new
business incubator as well. Erika holds a B.Sc Business Administration
with a concentration in Marketing and Management from Upstate New York
private university, Elmira College.

A list of Exploriem.org mentors is available at, https://www.exploriem.org/entrepreneurial-services/mentoring.

Program Options

Membership $95.00+HST/year
• Use of Exploriem Meeting Rooms and Lounge
• Main Boardroom – 2 hours per year (valued at $150.00+HST)
• Small Boardroom – 3 hours per year (valued at $90.00+HST)
• Use of Exploriem Member Logo on corporate and personal website(s).
• Two free ticket to Exploriem’s EVENT-AID (Valued at $40.00+HST)
• Member Ticket prices to Bootstrap Awards and TechLinks Events.
(Bootstrap Awards value: $80.00 for $50.00 – TechLinks value $35.00 for
$20.00)
• Corporate Name, Logo and up to 100 word write-up in on-line directory
• Invitation as VIP to monthly Thirsty Thursday’s Networking Event
• Access to Partner Service Discounts
Total Value: $325.00+HST

Membership with Mentorship $195.00+HST/year
• Assigned a mentor – under the Exploriem mentor-mentee agreement. (value:priceless)
• Use of Exploriem Meeting Rooms and Lounge
• Main Boardroom – 2 hours per year (valued at $150.00+HST)
• Small Boardroom – 3 hours per year (valued at $90.00+HST)
• Use of Exploriem Member Logo on corporate and personal website(s).
• Two free ticket to Exploriem’s EVENT-AID (Valued at $40.00+HST)
• Member Ticket prices to Bootstrap Awards and TechLinks Events.
(Bootstrap Awards value: $80.00 for $50.00 – TechLinks value $35.00 for
$20.00)
• Corporate Name, Logo and up to 100 word write-up in on-line directory
• Invitation as VIP to monthly Thirsty Thursday’s Networking Event
• Access to Partner Service Discounts
Total Value: PRICELESS

Corporate Membership $295.00+HST/year
• Use of Exploriem Meeting Rooms and Lounge
• Main Boardroom | 3 hours per year per organization (valued at $225.00+HST)
• Small Boardroom | 5 hours per year per organization (valued at $150.00+HST)
• Use of Exploriem Member Logo on corporate and personal website(s).
• Four (4) free ticket to Exploriem’s EVENT-AID (Valued at $80.00+HST)
• Member Ticket prices to Bootstrap Awards and TechLinks Events for up
to four (4) individuals in the organization. (Bootstrap Awards value:
$320.00 for $200.00 – TechLinks value $140.00 for $80.00)
• Corporate Name, Logo and up to 100 word write-up in on-line directory
• Invitation as VIP to monthly Thirsty Thursday’s Networking Event
Total Value: $635.00+HST

For more information contact:
Erika Godwin, Assistant Director +1.613.566.3436 x 214
@Exploriem
egodwin @ exploriem.org

       
       
       
     Prof Bruce @ 10:15 am

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Artpreneur

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         Ten Key Lessons from Business Owners This Year        

       
   Posted on
       Wednesday 12 December 2012  
     
   
       

[Guest Post by Kingsford Consulting. Follow Kingsford on Twitter @KingsfordConsul]

After talking to and working with hundreds of business owners – each
with their own success stories and challenges – this compilation
highlights the top 10 strategic lessons we’ve learned and passed on time
and time again.

1. Simple is good

The more complex a solution, service offering, model etc is, the more
expensive it will be to implement, the harder to sell, the more
difficult to manage and so on – Think Google Search page.

2. It is equally important to know what you should STOP doing as it is to know what you should be doing

No one has an extra 8 or 10 hours a week to implement a new strategic direction. Something has to go.

3. The role of a business coach is not just someone telling you what to do

S/he has to give you a reality check, hold you accountable, someone
to bounce your own good ideas off etc, and to give you some deep insight
and other perspective when you need it.

4. Think global now

Design your business with the whole world’s customers and competitors in mind.

5. It is easy to jump straight to tactics to try to build a business

But if you do, your organization will always be reactive to the
market. Take the time to plan out your strategy and you will be better
prepared for the year to come. It could also make you the market leader.

6. An 80/20 analysis on your customer base can be very enlightening

Particularly if you find that 80% of your revenue comes from just three customers.

7. You don’t need a large corporate budget to market your business

Focus your marketing activities on only the customers you want to reach and utilize all the free tools that are out there.

8. Keep your brand top of mind in everything you do

Your brand is the perception the market has about your organization.
It is impacted by everything from the actual product or service to how
the phone is answered. Set some rigor and guidelines around your brand
image to ensure a consistent and positive outlook.

9. Streamline your business with process

Draw out all the steps from lead to happy client and highlight areas
that are repeatable. This is where you can put processes into place to
shorten up your sales cycle without losing quality. The areas that are
not consistently repeatable are areas of practice where individuals can
add their own value and expertise. Having the right people in the right
positions for their expertise will maximize the value added to your
organization.

10. The best way to win is to change the game

Disruption is not just about technology – it’s even better when you
change the way a market does business – it’s a lot more fun and so hard
to compete against!

Kingsford Consulting
@KingsfordConsul
1.877.888.0598

       
       
       
     Prof Bruce @ 12:15 pm

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25 Steps to Business Success

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Rules? There are no rules in entrepreneurship.

and

Value Differentiation and ‘Pixie Dust’

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         How New Legislation Affects Federal Not-for-Profit Corporations        

       
   Posted on
       Saturday 8 December 2012  
     
   
       

Top Ten Things You Should Know About the New Federal Law
Guest Article by Joel Secter

For the first time since 1917, there is new legislation governing
federal not-for-profit corporations, including those that are registered
charities. The much anticipated Canada Not-for-Profit Corporations Act
(“NFP Act”) finally came into force on October 17, 2011 after receiving
Royal Assent on June 23, 2009. To mark the occasion, here are the top
ten things you should know about creating and maintaining a
not-for-profit corporation under the new federal law.

1. Incorporation as of right

Non-share capital corporations will no longer be created by Letters
Patent, which involved the Crown granting corporations the power to
operate. Under the NFP Act, instead of drafting objects, applicants are
required to complete a form, known as Articles of Incorporation, which
includes an area to describe the main purpose of the corporation. As
long as applications are complete and include the prescribed fee of
$250, Corporations Canada will issue a Certificate of Incorporation in
approximately five business days.

2. Three years to obtain Articles of Continuance

The new rules do not automatically apply to existing federal
not-for-profit corporations. Corporations incorporated under Part II of
the Canada Corporations Act (“CCA”) have until October 17, 2014 to
“continue” under the NFP Act. Applying for Articles of Continuance
entails submitting Form 4031 – Articles of Continuance and Form 4002 –
Initial Registered Office Address and First Board of Directors. While it
is no longer possible to incorporate under the CCA, the old legislation
will apply to existing non-share corporations until Articles of
Continuance are issued. Therefore, a corporation that has not yet made
the transition to the NFP Act can still apply for Supplementary Letters
Patent and seek Ministerial approval for by-law amendments.

3. Members have rights and responsibilities

Because the new federal legislation is modeled after modern corporate
laws, members have rights that resemble those of shareholders. For
example, unless varied by the by-laws, members are entitled to receive a
copy of the corporation’s annual financial statements. In addition, the
new federal law provides statutory remedies, including the derivative
action and oppression remedy. A derivative action occurs when a member,
with permission of the court, brings a lawsuit on behalf of the
corporation. The oppression remedy permits a court to make an order to
rectify an act or omission that is oppressive to the interests of a
complainant (usually a member in the minority). While making these
corporate law remedies available to members of not-for-profit
corporations may have the positive effect of increasing accountability,
it may also have the unforeseen consequence of exposing organizations to
frivolous lawsuits and fracturing memberships.

4. There are two types of corporations soliciting and non-soliciting

Soliciting corporations are those that receive more than $10,000 in
revenues in a financial year from public sources, including donations
from non-members, government sources and other soliciting corporations.
The five ways that soliciting corporations will be treated differently
compared with non-soliciting corporations are as follows:  

i. Soliciting corporations must have a minimum of three directors, two of whom are not officers or employees of the corporation;
ii. On dissolution, soliciting corporations must ensure that the assets
of the corporation go to a “qualified donee” as defined by the Income
Tax Act;
iii. Soliciting corporations may not have a unanimous member agreement;
iv. Soliciting corporations must conduct a review of their financial
statements and these must in turn be reviewed by a public accountant;
and
v. Soliciting corporations must send a copy of the corporation’s
financial statements and public accountant’s report, if any, to
Corporations Canada.
The determination whether a corporation is a soliciting corporation is
based on an examination of the corporation’s sources of revenue as
presented in the annual financial statements and so the status can
change from one year to the next.

5. Non-soliciting corporations can have only 1 director  

That being said, it would be prudent to allow for a minimum of 1 and a
maximum of 3 directors considering soliciting corporations require a
minimum of 3 directors. That way, if you happen to become a soliciting
corporation in a given financial year, you will not need to amend your
articles to allow for additional directors.

6. Even non-voting members get to vote where there are changes that affect their rights

The articles must set out the classes of membership and the rights
which attach to each. If you have more than one class of members, keep
in mind that even non-voting members get to vote where there are changes
that affect their rights. This means that the corporation will not be
able to alter the rights or conditions of any class of membership
without the support of a two-thirds majority of that class. Under the
new regime, the more classes of members there are, the more groups there
will be who have an effective veto over fundamental changes.

7. The Act speaks where your by-laws are silent

By-laws set out the day-to-day rules for governing and operating a
corporation. There are many default rules that apply if they are not
overridden by provisions in the by-laws. So, if the corporation wants to
exert control over its own internal processes it must have bylaws which
speak to those issues.

8. Written resolutions in lieu of meetings are allowed

The directors and members of not-for-profit corporations will be able
to pass resolutions in lieu of holding meetings (if they are signed by
all the directors or members entitled to vote on the resolution at the
meeting). This practice has not been acceptable since the late 1990s
when Corporations Canada determined that written resolutions in lieu of
meetings are not permitted under the CCA. Although there are inherent
benefits to transacting business at meetings, the change will
undoubtedly be welcome news to organizations for which the requirements
to have the directors or members in the same place at one time is
cumbersome.

9. Ex-officio directors are not allowed

The NFP Act stipulates that directors must be elected by the members –
and only by the members. The implication is that federally incorporated
not-for-profits can no longer have ex-officio directors. These are
directors who sit on the board by virtue of their office or position in
another organization. Not-for-profit corporations with ex-officio
directors on their board will have to change their board governance
structure and recognize these stakeholders in others ways.

10. For some corporations, an audit is optional

Under the CCA, the members were obligated to appoint an auditor to
audit the annual financial statements of the corporation for report to
the members. Under the NFP Act depending on the status of the
corporation as either a soliciting or non-soliciting corporation and the
gross revenue of the corporation, the members may have some latitude in
deciding whether to simply have an audit engagement, a review
engagement or a full audit engagement.

Joel Secter, formerly of Drache Aptowitzer LLP, provides legal
counsel to charities and not-for-profit organizations across Canada. His
articles have been published in periodicals such as The Canadian
Taxpayer, Canadian Not-For-Profit News and Canadian Fundraising &
Philanthropy. He can be reached at joel @ secterlaw.com.

       
       
       
     Prof Bruce @ 9:25 am

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         County of Renfrew Reborn        

       
   Posted on
       Saturday 15 September 2012  
     
   
       

Here are the slides from a talk on economic renewal that I
am giving for the County of Renfrew on Monday September 17, 2012 at 10
am at the Best Western Renfrew Inn and Conference Centre. The challenges
facing the county are not unlike small towns elsewhere in rural Ontario
and, for that matter, in other Provinces of Canada and in the US as
well.

I draw on work by Erik Kuhne of CivicArts.com, small villages in
Crete and noted development economists like Hernando de Soto and Walt
Rostow. Neo-urbanist planning principles also form part of proposed
solutions– Jane Jacobs and more recently Richard Florida have done
extensive work in this area.

When architects gave over (circa the immediate post WWII era) the
design of cities, towns and villages to urban planners with their
moronic monoculture zoning maps (big box stores here, office buildings
there, ridiculously named ‘industrial parks’ here, single family homes
there and, oh, we forgot to set aside some land for civic buildings like
schools and our budgets are tight so let’s build schools on cheap crap
land no one else wants like under high tension power lines so we can
irradiate our kids when they are most vulnerable (i.e., experiencing the
fastest cell division of their lives)), we started to produce the worst
urban blight, maybe ever. Right. Heck of a plan. I blame the profession
of architecture.

Architects actually know something about design, delight, light,
space, negative space, art, beauty, utility, form and function. Urban
planners have zoning codes that they think are the equivalent of the Ten
(Million) Commandments. Cities are being planned by Vogon bureaucrats?
Are you kidding me? No wonder almost everything built in the last 60
years is a piece of crap.

The County of Renfrew cannot revive its regional or local economies
without reviving its urban fabric. The good news is that the county has
some main streets (in Renfrew, Pembroke, Petawawa, Eganville and
elsewhere) that have ‘good bones’.

They have strength in outdoor adventure (snowmobiling, skiing,
whitewater rafting, kayaking, fishing, canoeing, motor boating, sailing,
camping, RVing and resort stays) that they can build on and there are
lots of inexpensive initiatives that take more guts than money to start
and carry through to completion…

[If you would like to view the slides as a PDF, please click on the following link: https://www.old.dramatispersonae.org/renfrew-reborn.pdf. To download a copy in PPT format, please click on: https://www.old.dramatispersonae.org/renfrew-reborn.ppt.]

@ProfBruce

Follow Prof Bruce on Twitter @ProfBruce and @Quantum_Entity and read his blogs at www.EQJournal.org and www.dramatispersonae.org.

You can find his novels at www.brucemfirestone.com.

You can engage with him on Facebook via https://www.facebook.com/QuantumEntityTrilogy and https://www.facebook.com/Exploriem as well as via LinkedIn at https://www.linkedin.com/in/profbruce.

His real estate interests are summarized at www.ottawarealestatenews.com and www.thelandstore.org.

YouTube channels include https://www.youtube.com/user/ProfBruce and https://www.youtube.com/user/quantumentitytrilogy.

You can also send the first four chapters of Quantum Entity Trilogy to your friends for free from: https://www.exploriem.org/quantum-entity-subscribe/

Prof Bruce’s current motto is: “Making Each Day Count”

       
       
       
     Prof Bruce @ 7:03 pm

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         Prologue to Book 2, Quantum Entity Trilogy        

       
   Posted on
       Friday 7 September 2012  
     
   
       

Quantum Entity | American Spring

“Dr.?”
“Yes.”
“Sorry to disturb you but there’s a young woman here to see you.”
“Does she have an appointment?”
“Umm, no.”
“Is she a student?”
“I don’t think so.”
“Well tell her to make an appointment and have security check her out,”
the physicist says to his EA. His EA is a young man, Alex, 21, who is
going places, he thinks.

Their lab at the Department has grown fantastically using the
resources of the Commonwealth. It’s grown not only in terms of personnel
(from 2 to more than 700) but spills over into a network of trailers
that are parked everywhere. Farrar wants them to work at Livermore
(Lawrence Livermore National Lab near SFA, San Francisco Aerodrome) but
they decline, politely but firmly.

The General says security and confidentiality will work better there
but the scientists don’t care SFA (sweet fuckall) about the General’s
concerns. Still they agree to a joint CSIS (plainclothes group of
agents) and Commonwealth Military presence here. The Cartesian Powers
are no joke and they understand this. They detest 24/7 security but put
up with it.

The physicist is still living in the President of UBC’s basement but
now they have a full time RCMP hut at the gate (one of those horrible
nanosite extruded/grown brownish nest-looking structures) pretending to
provide security for Dr. Woo. But it’s the physicist they’re actually
looking out for. When he’s over at Euph’s place, they sit in a couple of
squad cars that look ridiculously out of place on Granville Island.
Euphony brings them coffee and hot chocolate.

She’s offered them some of her illegal Wrecked Brew too which they
regretfully decline. He reminds her that the ‘P’ in RCMP stands for
police but she just shrugs. “I’ll cast an evil spell on them if they try
anything.” The RCMPs (all men) have no interest in busting a small time
bootlegger especially one who looks as yummy as Euphony does. As his
economic prospects have recently improved so have hers so she can afford
nicer things now—she’s been shopping at Bolts in downtown Vancity and
it shows. What she likes especially is the effect it has on him—it’s
really, really good.

…

“Dr., my name is Arcadia Valenzuela.”
“Hello, Ms. Valenzuela.”

She’s been waiting in their ante room for two days. She refuses to
leave the premises while security checks her out. They think she can’t
afford a hotel or something—she’s a waitress from Texas after all.
They’ve scanned her and made sure she has no weapons or viruses or other
surprises for them but she won’t tell them what it’s about. She seems
very determined. Maybe she’s some kind of groupie who likes physicists
but she doesn’t look like that. She’s attractive enough but not showy in
the way you would expect a groupie to dress or act. She sure is set on
seeing the Dr. though.

The only thing she has with her is an old Thermalite Quadcore
SYS505HS Tower which must be a bitch to lug around. She lets them boot
it up but it has zero/zip on it. She has a data cube too (just under a
centimetre per side) which they find of course but she won’t let them
touch it. It’s for the Dr., she tells them. This makes them
uncomfortable and leads to a standoff until Alex tells the physicist
that he has a hunch that she is legit.

Alex has gotten to know her a bit in the 48 hours she’s been sitting two metres from his workstation.

…

“He said to tell you everything,” she continues, “but is it OK if I boot up my PC?”
“Please.”
She inserts her data cube and a video of Jag Durai and G4nesha starts playing.
“Freeze frame,” the physicist says right away to her computer but the
video dumbly keeps playing. He realizes instantly the thing is an
antique so he reaches for the screen but it doesn’t respond to touch
either.
“Here,” she says showing him how to move a mouse awkwardly on a teensy
touchpad on a keyboard that just as awkwardly folds out from the base of
the tower. He freezes the video and then enlarges it. He can plainly
see that G4nesha has the same freckled complexion as Ash3r does. What
the fuck?
“Do you know why this Quantum Entity looks the way she does?”
“Yeah. I think it’s because Nesha and Jag are bonded and linked. She’s evolved or something.”
“Nesha?”
“G4nesha, she’s Jag’s QE—they can read each other’s minds—they’re, they’re linked.”
“Ah, Miss Valenzuela, do you mind telling me where, umm, Jag and G4nesha are?”
“Sure. They’re in a prison camp in Shenyang, that’s near the—”
“I know where it is,” the physicist interrupts.
“They were taken there by a guy named Yao Allitt when I was 15 and—”
“Can you hold up a minute, Ms. Valenzuela please?” the physicist says.
Then via intercom he says, “Alex, can you ask Dr. Wong to join us
immediately? And please cancel my appointments for the next two hours.”

…

They get the story out of her in about 90 minutes—the quantum
scanning that Mr. Durai has perfected, the link that can be formed
between human and quantum counterpart that has been hinted at in their
equations but never (scientifically) demonstrated let alone verified,
the evolutionary step that QEs take after mindlink is established, their
subsequent release from the three laws, the quantum tunnel that Mr.
Durai initially uses to drop his data cube on Arcadia’s floor, even
their visits using hacked Sinofighter consoles are disclosed. But still
he feels he is missing something, something important.

“Ms. Valenzuela, is there anything more about these visits that you can tell me?” he asks.
“Not really.” But she doesn’t make eye contact with him when she says
this so he goes over to where she is sitting. She is hunched over in her
chair, shoulders rounded, like she’s been beaten down, maybe by life.
He kneels down so his eyes are on the same level as hers, he takes both
of her hands in his and says, “Arcadia, I don’t mean to pry. Neither Dr.
Wong nor I will ever tell a soul what you have said here unless you
give us permission. But we have to know everything, everything. We can’t
help you otherwise. Are you sure there isn’t anything else?”
“Well maybe one more thing.”
“Uh, huh?”
“Well, you see, like, those consoles, Jag used them, I mean we used them to be with each other, I mean like intimate sort of.”
“Sort of?”
“Well, ah, really all the way.”
“I assume they worked?”
“Yeah. Really, really well.”
“Is there something else?”
“Yeah, we are going to try like maybe next week to have a baby.”
“A baby?”
“Yeah, it was my idea. You see,” she says in a rush to get it over with,
“I thought he could use that little quantum tunnel of his to send
something else through.”
“Would that be sperm, Ms. Valenzuela?” Dr. Wong asks as clinically as
possible to save the young woman any further embarrassment.
“Yeah. But Jag wasn’t sure he could transport something live so we were going to try something else first.”
The physicist reaches down to pick up Popeye who is back for some more attention. Cady just looks at the enormous cat.
He says, “Well we won’t be sending you through, Pops. You’re way too
big. Maybe we should try a lab rat first.” As soon as he gets this out
of his mouth another thought occurs to him. He looks at Chuck who
immediately sees it too.
“Ms. Valenzuela, is there anything else? I think I might have something
that can help you and Jag but I want to make sure I have all the facts.”
“That’s pretty much it except Jag said, well he isn’t too sure, but he
thinks maybe Imperial China is working on some kind of super weapon
based on his work, some new way to attack the Commonwealth.”
“No surprise there. OK, Arcadia, how big is Jag?”
“About 6’3”.”
“No, how wide is he—how broad in the shoulders?” the physicist asks.
She holds out her hands indicating a big man about 55 centimetres.
“What are you thinking, Dr.?”
“I think Arcadia we can do better than bring a vial of sperm out of
Shenyang. Let’s see if we can widen that quantum tunnel, stabilize it
and test it. Afterwards, let’s go get Jag out of that shithole they have
him in. Let’s bust him out, Ms. Valenzuela.”

When he says this, Cady jumps up like she is 15 again and gives him
the biggest hug. Her face only comes up to his chest. “Oh, oh, oh, Dr.
that would be the best thing evverr. Can you do it?”
“I don’t know for sure, Arcadia, but I think the answer is yes.” When he
says this she bursts into tears. He puts his arm around her and strokes
her hair. She’s had a rough go, no doubt about it.

…

@ProfBruce

Follow Prof Bruce on Twitter @ProfBruce and @Quantum_Entity and read his blogs at www.EQJournal.org and www.dramatispersonae.org.

You can find his novels at www.brucemfirestone.com.

You can engage with him on Facebook via https://www.facebook.com/QuantumEntityTrilogy and https://www.facebook.com/Exploriem as well as via LinkedIn at https://www.linkedin.com/in/profbruce.

His real estate interests are summarized at www.ottawarealestatenews.com and www.thelandstore.org.

YouTube channels include https://www.youtube.com/user/ProfBruce and https://www.youtube.com/user/quantumentitytrilogy.

You can also send the first four chapters of Quantum Entity Trilogy to your friends for free from: https://www.exploriem.org/quantum-entity-subscribe/

Prof Bruce’s current motto is: “Making Each Day Count”

       
       
       
     Prof Bruce @ 2:13 pm

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         Read First Four Chapters Quantum Entity | we are all ONE, Free        

       
   Posted on
       Thursday 28 June 2012  
     
   
       

You can download the first four chapters of Book 1 of Quantum Entity Trilogy free by clicking on: https://www.old.dramatispersonae.org/images/QuantumONE_CS_Third_Edition_First_Four_Chapters.pdf.

If you believe in Ellen’s message that ‘We Are All ONE’, can you help
us spread the word? Let your friends know that they too can get the
first four chapters of Quantum Entity | we are all ONE free by emailing
them this link, https://www.old.dramatispersonae.org/images/QuantumONE_CS_Third_Edition_First_Four_Chapters.pdf.

You will be introducing them to a future that is both marvelous and
frightening—filled with abundant opportunity and many challenges and
populated by characters who seize their days on this planet, every day,
making each day count.

If you would like to get a copy of the book, please visit: https://www.brucemfirestone.com/.

Here’s a short film based on Book 1 by prototypD.org. It is called
Generation Q and takes six scenes from the book and brings them to life.

You can also view a pictorial introduction to Book 1 (we are all ONE)
of the Quantum Entity Trilogy set to the immortal music of Canadian
composer Carl Bray (Talk of Hands) who plays an important role (he makes
a cameo appearance, twice actually) in Book 2 (American Spring):

You can find us on Facebook at: https://www.facebook.com/QuantumEntityTrilogy and on Twitter at: https://twitter.com/Quantum_Entity as well as at: https://twitter.com/ProfBruce

@ProfBruce
@Quantum_Entity

       
       
       
     Prof Bruce @ 5:13 am

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         Big Video Shout Out to Brevis Gallery Artists & Artifex Sponsors        

       
   Posted on
       Saturday 23 June 2012  
     
   
       

Plus Introduction to Generation Q, Film by prototypeD.org
Plus Introduction to Quantum Entity Trilogy

How diverse, sustainable, interesting and vibrant a place would Ottawa be or any city if every one of our artists went on an Atlas Shrugged-inspired strike forever?

We want to thank each of our Brevis Gallery Artists and our sponsors
for coming to Artifex 2012. It is marvelous that you came to support
Artifex which could not have happened without you.

Not everyone believes that artpreneurs are important but everyone at Artifex believed it just by being there, you showed that.

Here is a short intro to Quantum Entity Trilogy and Generation Q
movie followed by a  video tribute to all Brevis Gallery Artists and all
sponsors.

Bravo, Brevis Gallery Artists

Here are the 2012 Artifex Brevis Gallery Artists:

– Hilde Lambrechts, who does drawings and sculpture plus Hilde is the
founder of Figureworks.org, a non-profit organization promoting visual
art of the human form.
– Sandra Hawkins is a dynamic contemporary visual and media artist
– Robin Andrew runs unposed photography
– Jean Smith is a visual artist extraordinaire—focused on abstract expressionism
– Sue Perley-Robertson is an international award winning abstract artist
– Chris Manning is a master jeweller at Silver Hand Studios
– Victoria Van Eyk is the tough, hard-driving boss at MAFIA Jewellery, an international jewellery company
– Sue Shuker is a mixed media artist and an inaugural member of Ottawa Mixed Media Artists Association
– Pamela Ravek produces exquisite glass art
– The charming, ever-smiling Carlo Lombard runs shotgun video. He uses a
shotgun to entice people into his car where they ride shotgun and
record a video while driving around. Only half of that statement is true
– Ryan Conrad is an emerging filmmaker who runs smiling pig productions
– Claudia Salguero is a visual artist who uses a combination between photography, digital art and traditional art
– Bruce Spurr represents a meeting place called AtTheSpace where they transform meetings into meaningful encounters
– Jana Fox is acrylic artist who loves to paint movement
– Joanne Savoie, a voyage from graphic art to full-time painter

Artifex Sponsors

Extra special thanks also goes out to:

Fortress Real Capital, Devries Financial Group, Eagle Professional
Resources Inc, Alterna Savings and Credit Union, BTI Systems Networking
Company, Claridge Homes, Connelly Group of Companies, Desjardins
Financial Security Independent Network, FaveQuest, Footeworks Inc, GGFL
Chartered Accountants, Granite Networks, Investors Group Financial
Services, KPMG, Let It Shine Cleaning Services, Mold Busters, Nelligan
O’brien Payne LLP, Nitro IT Business Solutions, North Innovation Fund,
Ontario Centres of Excellence, University of Ottawa – Faculty of
Engineering, PCL Construction Leaders, PODS Moving & Storage, The
Regional Group, Renaissance Repair and Supply Ltd, Richard Chmiel
Architect & Associates, Ross Video, Rumidifier Home Comforts Inc,
Tindr Software Outsourcing, Vittorio Motors, Embrylin Estates
Limited/Terlin Construction Ltd, Pirate Adventures, HLD.ca,
StumpsBeGone.ca, Magenta Mortgage Corporation, David St-Jean &
Associates Inc, Westin Health Club/Fairmont Chateau Laurier Health Club,
Chide.it, Glenview, Century 21 Explorer Realty, Empire Deck and Fence,
Royal Bank of Canada, the Properties Group, KWC Architects Inc,
VerTerra, PwC, prototypeD.org, qrankcase.com, Mixed Media Group, Digital
Folios, EyeVero, Cyberwitch Press, Kettleman’s Orleans, Grype
Solutions, Ottawa General Contractors, Broccolini Construction,
UNTETHER.tv, Grandor Group, Tripp Photography, Signs To Go, Deserts
First, Fudge Face, McNian Management, Shotgun Show, Ottawa BuzzTV,
Ottawa Food Bank, Founder (Ottawa Senators), Institute of Entrepreneurs,
Claudia Salguero, Diane White, Developpement DRB, Back Lane Cafe

More Background

The radio plays are based on the book of the same name by Bruce M Firestone and available at https://www.brucemfirestone.com/.

For more on why Prof Bruce wrote Quantum Entity, please see: https://www.eqjournal.org/?p=3426

You can find us on Facebook at: https://www.facebook.com/QuantumEntityTrilogy. You may also engage with the author via https://twitter.com/#!/ProfBruce and https://twitter.com/#!/Quantum_Entity

Images and animation by prototypeD.org available from: https://qrankcase.com/.

If you or your friends would like to get your FREE copy of the first
four chapters of Bruce M Firestone’s fabulous new trilogy, Quantum
Entity, We Are All ONE, please visit: https://www.exploriem.org/quantum-entity-subscribe. We’re sure you’ll be hooked!

Here’s a short review of Book 1: “After reading Part I, Discovery, I
was totally hooked. It’s better than ‘The Goal’ and more entertaining
even than ‘Dune’!” David Perry, Partner, Perry-Martel International,
co-author, Guerrilla Marketing for Job Hunters 3.0.

@ProfBruce

       
       
       
     Prof Bruce @ 6:03 am

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         Quantum Entity | We Are All ONE: Playlist        

       
   Posted on
       Saturday 23 June 2012  
     
   
       

Here is the Quantum Entity | We Are All ONE playlist made up of 12 videos, duration is 1:23:19.

1. Generation Q Film, 2. Intro To Book, Film, Brevis Gallery Artists,
Artifex Sponsors, 3. Talk of Hands, 4. Pet3r, the First Quantum Entity,
5. Radio Plays, 6. Damien’s Theme, 7. The Successors– Nell’s Folly, 8.
Theresia Scholtes & Alex Wolfe, 9. Shotgun Show, 10, Rebecca Happy
Interview, 11. QE Birth, 12. Pet3r whose quantum number is 1:

Background

The radio plays are based on the book of the same name by Bruce M Firestone and available at https://www.brucemfirestone.com/.

For more on why Prof Bruce wrote Quantum Entity, please see: https://www.eqjournal.org/?p=3426

You can find us on Facebook at: https://www.facebook.com/QuantumEntityTrilogy. You may also engage with the author via https://twitter.com/#!/ProfBruce and https://twitter.com/#!/Quantum_Entity

Images and animation by prototypeD.org available from: https://qrankcase.com/.

If you or your friends would like to get your FREE copy of the first
four chapters of Bruce M Firestone’s fabulous new trilogy, Quantum
Entity, We Are All ONE, please visit: https://www.exploriem.org/quantum-entity-subscribe. We’re sure you’ll be hooked!

Here’s a short review of Book 1: “After reading Part I, Discovery, I
was totally hooked. It’s better than ‘The Goal’ and more entertaining
even than ‘Dune’!” David Perry, Partner, Perry-Martel International,
co-author, Guerrilla Marketing for Job Hunters 3.0.

@ProfBruce

       
       
       
     Prof Bruce @ 5:43 am

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         Program        

       
   Posted on
       Friday 22 June 2012  
     
   
       

Artifex Program, National Gallery of Canada, June 20, 2012

We have put a number of elements on this blog which will help persons preparing for events including:

a) how to build a schedule and a script for a major show: https://www.eqjournal.org/?p=3942

b) the welcome speech by Mayor Jim Watson: https://www.eqjournal.org/?p=3958

c) radio plays: https://www.eqjournal.org/?p=3952

d) the blessing by Padre Chris Brydges: https://www.eqjournal.org/?p=3948

e) Generation Q movie: https://www.eqjournal.org/?p=3921

f) introduction to the world of Quantum Entity: https://www.eqjournal.org/?p=3908

and many more.

The idea is to give event organizers and not-for-profits a model to
work from. Not a perfect model by any means but one you can start with
and improve on. Here is the program we used for the evening:

@ProfBruce

       
       
       
     Prof Bruce @ 8:40 pm

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