https://www.eqjournal.org/?paged=20
Revenue Sources for Commercial Landlords
Posted on
Tuesday 20 July 2010
Rooftop Solar Takes Off in Ontario
Does this sound like a bad business? A business that hasn’t had a
significant new revenue stream since the 1980s? Well, that would be the
commercial real estate business.
Here is how it breaks down:
1. In the ‘olden days’, Commercial Landlords received rent, a gross rent.
2. From that they paid—their mortgage, property taxes, operating
costs, insurance, utilities, repairs, maintenance and administration
staff. And whatever was left, was profit.
3. Then inflation happened (in the 1970s and 1980s).
4. Interest rates went to 21%.
5. Landlords went out of business in a hurry as cities raised taxes, utilities raised rates, staff wanted more dough, …
6. The industry reacted—they went to net, net, net rents (triple net
rents). That means that tenants paid their basic rent (or minimum rent)
which went to the Landlord (from which they paid their mortgage).
Everything else was paid by the Tenant in the form of additional rent so
if costs went up, their additional rent went up.
7. Some Landlords ‘retailed’ their utility bills to their Tenants on
the basis of what the Tenant would have paid for their consumption if
they had been in a standalone relationship with the utility company and
not buying wholesale as many Landlords were doing.
8. Landlord’s also grossed up their Tenant’s space so that the
Tenants were also paying for common areas and even for vacant space.
9. Landlords would also charge a fee for their administration and
management as well as recovering their insurance costs and maintenance
and repair costs sometimes even collecting for structural and other
major repairs.
10. So the minimum rent was truly ‘net’ to the Landlord.
Over the years, Landlords tried lots of other things to add to their
bottom line. They tried charging for parking, introducing cable and
telecommunications services that they controlled and charging for
signage. For most locations, this did not amount to much and, in some
cases, the results were negative—it turned out that running a cable
system or telecom system was too complex for them and they were losers
both financially and operationally.
Then along came the Internet—every developer was going to have a
server farm in each of their buildings. That didn’t last long either.
Now in Ontario, here comes rooftop solar. Heavily subsidized by the
Province of Ontario, solar looks like it might add 40 to 50 cents per
square foot per year to the bottom line of commercial landlords with
suitable roofs. These revenues are triple net and derived from (mostly)
ballasted systems installed by third parties. The rooftop ‘gold rush’
might lead to the development of micro utilities with scale; some will
control dozens or hundreds of rooftop installations in the Province.
Or the Landlords can install the systems themselves and make more
money (cap rates are probably in the order of 10 to 11% p.a.). Of
course, they will then be on the hook for the capital costs and
operating costs of these systems. Big Landlords can borrow money a lot
cheaper than most entrepreneurs so a cap rate of 11% looks mighty tasty
to them when their borrowing costs could be less than 4%.
Risk averse or capital short Landlords may prefer the triple net,
money for nothing approach. 40 to 50 cents may not sound like much but,
at least for industrial buildings which yield around $8 per square foot
per annum, triple net in places like Ottawa, that’s a raise of 5% to
6.25%. And don’t forget, the IRR on that marginal revenue is infinite
since they are paying 0 dollars for the installations.
Prof Bruce
Postscript: there is another new revenue source on the horizon for
commercial landlords, at least the ones with superior locations and lots
of drive-by or pedestrian traffic. But that is a story for another day.
Postscript 2: the commercial real estate biz is today mostly reserved
for large scale enterprises. Regional malls and mega office towers are
almost exclusively the preserve of Banks, pen finds, insurance companies
and publicly traded REITs with very low COF (Cost of Funds).
Entrepreneurs have to find a different playground where returns are
higher and elephants stay out. Industrial condos, self storage, land
development, apartment hotels and resorts are some of the areas where
entrepreneurs can hope to find a piece of the action.
Prof Bruce @ 4:13 pm
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Entrepreneur Sayings and Quotations
Posted on
Tuesday 20 July 2010
Some Quotes from Prof Bruce and Fellow Travelers to Help Entrepreneurs Along their Way
1. “No one can really save their way to wealth but you can invest your way there,” Prof Bruce.
2. “Entrepreneurs would rather ask for forgiveness than beg for permission,” Anon.
3. “Fall down seven times, get up eight,” Japanese Proverb and part of the successful Entrepreneur’s Credo.
4. “Whether you believe you can, or whether you believe you can’t, you’re
absolutely right,” Henry Ford.
5. “Dump the losers and keep the winners,” Professor O. J. Firestone.
6. “People like to buy from people they like and trust,” Prof Bruce.
7. “An entrepreneur is a person who can create $2 of revenue for every $1 that any fool could generate,” Prof Bruce.
8. “Every business has a ‘magic marketing button’—something you do and
clients and revenues appear. If you don’t have one, your business will
disappear,” Prof Bruce.
9. “If you can’t market your business in a cost effective manner—if it
costs too much to acquire a customer, your enterprise is dead anyway,”
Prof Bruce.
10. “If you bootstrap your business, you end up owing it instead of the VCs,” Prof Bruce.
11. “The optimal number of partners to have in a business—zero,” Prof Bruce.
12. “There are still two chairs in Heaven waiting for the first two partners to get there and still like each other,” Anon.
13. “It’s OK to trade your way to success as long as you know when to
stop, build and hold—in other words, don’t flip until you flop,” Prof
Bruce.
14. “The difference between being rich and being wealthy is that Shaq is
rich but the man who signs Shaq’s paycheck is wealthy,” Chris Rock.
15. “Negative cost selling is a fancy way of saying: ‘I’ll pay you to hire me,’” Prof Bruce.
16. “ABC, Always be Closing,” Ben Affleck’s character in the Film, Boiler Room.
17. “The VCs Golden Rule: ‘He/she who has the gold, rules.’” Prof Bruce.
18. “Asymmetric information is another way of saying: ‘I know more than
you do and so I can profit more than you from this transaction.’” Prof
Bruce.
19. “If you’re not an expert in what you do, you’re a dilettante and just food for sharks,” Prof Bruce.
20. “Every successful business looks easier than yours … from the outside,” Prof Bruce.
21. “Guerilla Marketing is just another term for smart marketing,” Prof Bruce.
22. “Selling is telling,” Mark Gencher.
23. “Accretive selling happens when you buy an asset and you have more cash on hand after you buy it than before,” Prof Bruce.
24. “If you focus on getting real clients and customers and building
cashflow, you’ll get financed today not the other way round,” Prof
Bruce.
25. “Forget about all the studies on why businesses really fail. Have
you ever heard of one that failed from having too many sales?” Prof
Bruce.
26. “Guerrilla Marketing research happens when you fool people into
thinking they are buying the real thing—then you really know if your
product or service has any value in the marketplace,” Prof Bruce.
27. “The market is always right, even when it’s wrong,” Prof Bruce.
28. “You are not the market,” Prof Bruce.
29. Upon seeing his very first web page, Lou Gerstner, former CEO of IBM asked: “Where’s the ‘buy’ button?”.
30. “The harder you work, the luckier you get,” Anon.
31. “If you set, visualize, verbalize and monitor your goals, you will achieve them,” Prof Bruce.
32. “Under promise and over deliver,” Anon.
33. “Ideas are cheap, execution counts,” Prof Bruce.
34. “Deal with it,” Sigourney Weaver’s character, Ripley, in the film series, Aliens.
35. “Branding creates trust and trust creates the opportunity to actually make a sale,” Prof Bruce.
36. “If you see someone with a biz card that says: ‘VP of Marketing and
Sales’, you’ve just met a person who doesn’t know what he/she is doing,”
Prof Bruce.
37. “Buying low and selling high is actually quite hard to do—we are all
subject to herd instincts—there is enormous, systemic pressure to sell
whenever everyone else is selling and buy when everyone else is buying,”
Prof Bruce.
38. “Be more afraid of ‘Fear of Success’ than ‘Fear of Failure’.” Prof Bruce.
39. “Surround yourself with positive people—at home and at work,” Prof Bruce.
40. “Entrepreneurship is an exercise in positivist thinking. If your partner or employees are negative, dump them,” Prof Bruce.
41. “Never tolerate people who make the same mistake over and over again,” Prof Bruce.
42. “… with product innovation, it’s a certainty that your competition
is shortly going to copy what you have done. With business-model
innovation, though, if you can come up with a unique way of doing
things, it’s much tougher to react to,” Sam Palmisano, Chair of IBM.
43. “Success comes from, in part, just showing up. Business people can
learn a lot from show biz folks—who know that the show must go on,” Prof
Bruce.
44. “Never start a business with the idea that it is OK to lose money because it’s a tax write-off,” Prof Bruce.
45. “Track the amount and direction and velocity of cash—cash doesn’t lie/accounting statements sometimes do,” Prof Bruce.
46. “If you don’t learn to control your costs, you’re sunk. Costs always seek to rise until they exceed revenues,” Prof Bruce.
47. “Don’t forget to reverse sell—people you buy from should also buy from you,” Prof Bruce.
48. “Profit is not a dirty word—you make a profit not just to have a
nicer car and a fancier home but also so you can sustain your
enterprise, invest in it and in your employees too,” Prof Bruce.
49. “If you ever get into trouble, the first place to look for help is
from your existing clients and customers as well as your suppliers—they
want you to stick around,” Prof Bruce.
50. “Check, check, check… everything. There are no ‘fire and forget’ missiles in business,” Prof Bruce.
51. “Don’t take ‘no’ for an answer,” Prof Bruce’s Dad, Professor O. J. Firestone.
52. “Turn cost centres into profit centres or sell them,” Prof Bruce.
53. “You make money in real estate when you buy, not when you sell,” Barry Lett.
54. “If you are making a sales presentation and the client is saying
‘Yes’, stop, get the contract signed, thank them and leave. The only
things that can happen after you hear a ‘Yes’ if you keep going are
bad,” Prof Bruce.
55. “You are never too busy to return a sales call,” Prof Bruce.
56. “Entrepreneurship can be a lonely life. Just knowing that other
entrepreneurs are experiencing the same thing, helps,” Prof Bruce.
57. “There should be a 3 am network for entrepreneurs—they are all up
writing notes to themselves as ideas bubble up from their subconscious,”
Prof Bruce.
58. “Get the business model right so that the harder you work, the more money you make,” Prof Bruce.
59. “Twitter has legs, I think, as long as you are answering the
question: ‘What are you thinking?’ rather than ‘What are you doing?’”
Prof Bruce.
60. “Gizmos or gadgets almost never underpin a sustainable business,” Prof Bruce.
61. “The best trades you make are often the ones you don’t make,” Glen Sather, former GM of the 1980s Edmonton Oilers.
62. “Successful entrepreneurs know they have to do many things in parallel,” Prof Bruce.
63. “Your priorities should be: 1. take of your business so 2. it takes
care of your family and then 3. your family can take care of you,” Peter
Patafie.
64. “You want to know the real cause of most divorces in Canada? It’s financial stress,” Peter Patafie.
65. “I’ll tell you a secret about competition in business—I like it,” Prof Bruce.
66. “Maybe the reason no one has ever done this before is that (your new business model) is a bad idea,” Prof Bruce.
67. “Maybe the reason that you don’t have any competition is your idea
is a bad one. If it’s a good one, you will have competitors,” Prof
Bruce.
68. “Remember that the world is a tough competitive place and entrenched
business interests don’t want you to succeed,” Prof Bruce.
69. “Never fire people for making a mistake. Always fire them when they make the same mistake over and over again,” Prof Bruce.
70. “Why waste your time looking for a JOB? Start a company and create one for yourself,” Prof Bruce.
71. “If you want your media relations to be successful then you better understand smart truth and spin,” Prof Bruce.
72. “Pricing is an art,” Prof Bruce.
73. “The three most important things in business to remember are: sell sell sell,” Prof Bruce.
74. “The three most important things in business to remember are: check check check everything,” Professor O. J. Firestone.
75. “Entrepreneurs know that they deal with ambiguous situations almost daily… and they can cope with that,” Prof Bruce
76. “Customer Service is not a cost centre,” Prof Bruce.
77. “The easiest, best and least expensive place to look for new clients is old clients,” Prof Bruce
78. “Your AP is a great place to look for new people you can sell to,” Prof Bruce.
79. “If you knew just three things: your Bank balance at the beginning
and end of each month, your AP and your AR, you would know practically
everything you need to know about your enterprise because you would know
your cash position,” Prof Bruce.
80. “I pay everything COD because I hate owing anyone anything… plus
when I look at my Bank balance at the end of the month, I know whatever
is there is mine,” Jay Curry, owner of the Barley Mow chain of pubs.
81. “Cash is King,” Ken MacMillan.
82. “Litigate only as a last resort and not even then,” Prof Bruce.
83. “When negotiating, make the other party work hard for the deal, otherwise, it won’t stick,” Prof Bruce.
84. “If things go horribly wrong, I give you three days: one, to feel
sorry for yourself, one, to get some exercise and clear your head and
one more, to get on with your next startup,” Prof Bruce.
85. “Help your clients sell their products and services—find them customers and they will never forget you,” Prof Bruce.
86. “Turn selling into buying,” Trevor Wilkins.
87. “I am the world’s worst salesman, therefore, I must make it easy for people to buy,” Discount Retailer F. W. Woolworth.
88. “Always volunteer to write up the deal. He/she who holds the pen, wields the power,” Prof Bruce.
89. “Selling isn’t about taking advantage of people, it is about
communicating and informing them,” Mark Cuban, Owner, Dallas Mavericks.
90. “Follow the fastest (least effort) route to revenue,” Sir Terence Matthews.
91. “Get close to your customer, early and often,” Sir Terence Matthews.
92. “Focus on your core competencies, outsource all the rest,” Prof Bruce.
93. “Bundle complementary services provided by others (even your
competitors, it’s called co-opetition) into your business model: make
money for nothing,” Prof Bruce.
94. “If you have a choice between using OPM or your own, I vote for OPM,” Prof Bruce.
95. “Understand that there is bad debt and good debt. Bad is unsecured
and good is secured. The latter disappears when the underlying asset
disappears, the former lives on long enough to ruin you,” Prof Bruce.
96. “Debt is usually cheaper than equity but bootstrap capital is almost always cheaper than both,” Prof Bruce
97. “The reason you build a brand is to build trust. The reason you want
to build trust is to build sales which happens because, as it turns
out, people want to buy from people they trust,” Prof Bruce.
98. “You trust your clients to pay you and they trust you to produce on time and on budget,” Prof Bruce.
99. “What’s more important in life: love or trust? It’s trust all the
way. Think about it for a minute: what type of relationship would you
have if you couldn’t trust your spouse?” Prof Bruce.
100. “Your suppliers trust you to pay them and you trust them to produce on time and on budget,” Prof Bruce.
101. ” The road to success is lined with many tempting parking spaces,” Robin Chahal.
102. “Do the little things right, and the big things will take care of themselves,” Prof Bruce.
103. “Try to do things right the first time and you will be amazed at how your productivity will jump,” Prof Bruce.
104. ” If you TPO (touch paper once), your personal productivity will
double. Don’t procrastinate,” Joe Kowalski, Wilderness Tours.
105. “Never become an entrepreneur if the best you think you can do is
produce the same value as if you took a JOB. With all the stress
involved, stick with the JOB,” Prof Bruce.
106. “Get the Biz Model right so the harder you work, the more money you make,” Prof Bruce.
107. “Even Charities and Non-Profits need a biz model these days: people
like to give money to efficient and effective organizations not those
that burn up a ton of their money in admin and overhead,” Prof Bruce.
108. “We live in a cynical world and we work in a business of tough competitors,” Jerry Maguire.
109. “If your biz model is a good one, you will have competitors. If
it’s a bad one, you won’t but so what, it’s a bad biz model,” Prof
Bruce.
110. “Why do you think that petrol stations, hotels, restaurants,
outdoor equipment suppliers, dress shops, home builders co-locate? Is it
because they hate competition? No, it’s because they understand how to
use co-opetition to their advantage and so should you,” Prof Bruce.
111. “Never drink and think,” Prof Bruce.
112. “The moral underpinnings of entrepreneurship and business are based
on Adam Smith’s principal that your first duty to society is to ensure
that you and your family do not become a burden on your fellow humans,”
Prof Bruce.
113. “If your marketing plan says that all you need is a Super Bowl ad
to get a launch client, you’re dead on arrival,” Prof Bruce.
114. “Don’t push on a string: there is no substitute for ’shoe leather’,
face to face meetings and one-on-one phone calls to get your first
launch clients,” Prof Bruce.
115. “Make sure you don’t fear success,” Prof Bruce.
116. “The best decisions you will ever make occur when your head, your heart and your gut all agree,” Prof Bruce.
117. “You cannot let fear stand in the way of realizing your dreams; if
you do not believe a business will work for you – do not even bother
pursuing it. At the end of the day, it is all about believing that you
are the right person to launch the business and keep it running,” Kevin
O’Leary.
118. “While there will always be projects and ventures that are best let
go, perseverance, even in the face of adversity, tends to distinguish
dreamers and managers from true entrepreneurs,” Rich Becker.
119. “Take advice from people who’ve done big things or what you’re
hoping to do; don’t take advice from armchair executives or older people
who just refer to ‘experience’ in vague terms,” Tim Ferris.
120. “Under promise and over deliver to your customers, investors, employees, and yourselves,” Guy Kawasaki.
121. “For startups, SM is now crucial: it has never been cheaper and
easier to reach one’s customers. Entrepreneurs should thank God for
Twitter, Facebook, and MySpace,” Guy Kawasaki.
122. “Don’t kid yourself. Entrepreneurship is an absolutely brutal
lifestyle that will demand everything you think you’ve got to give and
more,” Geoff Livingston.
123. “Think about the ultimate propose of your enterprise—at a minimum,
don’t you think you should treat your clients at least as well as you
would treat yourself?” Glenn Schmelzle.
124. “If your cash conversion cycle is negative (meaning you generate
more cash with each sale you make), your enterprise will almost
certainly be successful,” Prof Bruce.
125. “Opportunities are usually disguised as hard work, so most people don’t recognize them,” Anon.
126. “Make a decision! The only thing you get by sitting on the fence is a sore backside,” Pierre Azzi.
127. “Probably the number one thing a good mentor can do for an
entrepreneur is to: a) give them confidence in themselves and b)
reinforce and confirm for them that they are on the right track or wrong
one,” Prof Bruce.
128. “The right thing to do with dishonest, unreliable or incompetent
people is to disassociate yourself from them, the sooner the better,”
Prof Bruce.
129. “Once someone has shown you that they can’t be trusted, guess what? They can’t be trusted,” Prof Bruce.
130. “Your first business foray has to work. Otherwise, there won’t be a second,” Prof Bruce.
131. “One of the great things about getting older is that you develop a
more accurate picture or mental map of the way the world works. It
allows you to test your ideas against that model in what Einstein called
‘thought experiments’ which are fast and accurate. It will save you a
lot of heartache and you won’t waste your time pursuing a bad idea ,”
Prof Bruce.
132. “Make each day count,” Jack Dawson.
133. “When you meet a perfect person, you’ve just met a liar. So learn
to forgive yourself when you make errors of omission,” Prof Bruce.
134. “When I was younger, I was told by a senior executive that it was
OK if you got 51% right and 49% wrong. Bad advice. As an entrepreneur,
you have to get nearly everything right,” Prof Bruce.
135. “There is no easy business, they only look easy,” Prof Bruce.
136. “If you meet someone who has a business card that says ‘VP,
Marketing and Sales’, you’ve just met someone who doesn’t understand
either marketing or sales,” Prof Bruce.
137. “Marketing builds a brand and a brand builds trust. Trust allows
you to make sales through aseparate sales process,” Prof Bruce.
138. “New enterprises are so delicately balanced between success and
failure that you, as the Founder, have to be right almost all the time,”
Prof Bruce.
139. “It isn’t possible to get to six sigma levels of quality (an error
or defect rate of 1 – 99.99966%) in service businesses: there’s too much
variability in the work flow. But you should try for three instead;
basically, aim for one mistake in every 1,000 things you do,” Prof
Bruce.
140. “People today crave authenticity in products and people; they can always tell if you’re a phony,” Prof Bruce.
141. “When trying to make a sale, when you hear ‘yes’ stop talking, get
it signed and leave. The only things that can happen if you keep
chatting are all bad,” Prof Bruce.
142. “Sometimes you don’t have all the answers. If you just shut up for a
while, customers will often answer their own questions and you will get
the order,” Prof Bruce.
143. “Failure is overrated,” Anon.
144. “In war there is no substitute for victory,” General Douglas MacArthur.
145. “Just win, Baby,” Al Davis.
146. “I never understood the concept of buying a business to lose money
so you can take advantage of tax losses. What’s wrong with making a
profit?” Prof Bruce.
147. “Be proud to pay your taxes in a great country like Canada,” Professor O.J. Firestone.
148. “Pay your taxes but don’t pay any more than you have to,” Professor O.J. Firestone.
149. “Winning isn’t everything, it’s the only thing,” Vince Lombardi.
150. “You want to have a good meeting (just once per year) with your lender? Make a profit,” Prof Bruce.
151. “All people are entrepreneurs, but many don’t have the opportunity to find that out,” Muhammad Yunus.
152. “The greatest job security you can ever have comes from what you
have between your ears not your current job description,” Prof Bruce.
153. “Entrepreneur-years are at least 2 for 1, so you, Bruce, are actually 98,” Prof Bruce’s Mom when he was 49.
154. “For the first time since a trading economy first appeared on this
planet about 10,000 years ago, humans can create enterprises that,
thanks to the Internet, can produce custom products and services from
standard inputs,” Professor John Callahan.
155. “The Internet, circa 2010, is about where electrification was 20
years into that new era. Just imagine when the Internet is as old what
will be possible,” Prof Bruce.
156. “I wish the Internet was where it is now when I was 20,” Prof Bruce.
157. “When asked what was the most important invention during his many
years at the largest industrial products company on earth (GE), Jack
Welch said: ‘The Internet’,” Prof Bruce.
158. “Everything that can be invented has been invented,”
Commissioner, U.S. Office of Patents, 1899.
159. “Not every business idea has to be the equivalent of E = mc**2 or
Priceline.com’s novel idea of letting the customer name a price but, to
be a successful entrepreneur, you have to at least bring some
differentiated value and great execution to the table,” Prof Bruce.
160. “Great management and OK products will always beat great products and lousy management,” Prof Bruce.
161. “I always laugh when I hear that bad unions, crappy employees or
lousy financing cause a business to fail. Have you ever heard of a
business with mushrooming sales and buoyant revenues going out of
business?” Prof Bruce.
162. “Feeling unproductive because you’re hung over, strung out or
overweight. You’re never going to be a star if you can’t exert control
over yourself: become an impeccable warrior,” Prof Bruce (with
contribution from the books of Carlos Castaneda).
163. “Want to know what’s keeping you from success? Look in the mirror,” Prof Bruce.
164. “Want to become more creative? Get some exercise, get some sleep,
don’t drink or do drugs, eat properly, focus on the problem, then stop
focusing on it and let your subconscious work on it as well, be open to
opportunity and really see the world around you,” Prof Bruce.
165. “What’s the number one thing that helps people survive when lost in
the wilderness? A knife? A book of matches? A mirror? A blanket? None
of the above: it’s a positive attitude. Same thing in entrepreneurship,”
Prof Bruce.
166. “Guerrilla marketing is all about substituting brains for money in the marketing wars,” Prof Bruce.
167. “Grow your business by building a bigger, fatter pipeline then fill it with cashflow,” Prof Bruce.
168. “Entrepreneurs would rather ask for forgiveness than beg for permission,” Anon.
169. “You should always tell the truth, the smart truth,” Scott McLean.
170. “If you can visualize it, you can achieve it,” Prof Bruce.
171. “Write a to do list each day; finish that list before you go home,” Prof Bruce.
172. “He/she who loses his/her temper first, loses,” Rod Bryden.
173. “Your IQ drops at least 10 points when you lose your temper,” Matthew Firestone.
174. “Want to be more successful? Learn to resist the Seven Deadly Sins,” Prof Bruce.
175. “You can close a lot of deals with a bit of humour applied in the right measure and at the right times,” Prof Bruce.
176. “Keep an ‘iron reserve’ so if everything else fails, you won’t starve,” O. J. Firestone.
177. “Develop a PB4L (Personal Business for Life), something you own,
has no debt or partners and that you can fall back on if everything else
fails,” Prof Bruce.
178. “Being a celebrity counts; being a celebrity with talent, counts for a lot more,” Prof Bruce.
179. “The most important decision you make as an entrepreneur other than
the decision to actually start a business is who your first hire is.
Hire up,” Prof Bruce.
180. “It’s not assets that produce income for a business, it’s the people,” Prof Bruce.
181. “If I gave an unqualified person the best located, best tenanted
office building in Manhattan for free and with no mortgage on it, within
seven years, he or she would be bankrupt as unhappy clients leave the
premises and they can’t even pay their operating costs,” Prof Bruce.
182. “There is no substitute for talent. And when that person is also a
good hearted sort, the type that doesn’t quit when the going gets tough,
well, that is unbeatable,” Prof Bruce.
183. “I like to hire people from small towns: they understand what hard work is and are prepared to do it,” Prof Bruce.
184. “It takes at least 10,000 hours to master a craft, any craft,” Malcolm Gladwell.
185. “When 17-year old Alanis Morissette was an ‘overnight success’ with
her first album, people forgot that she had been playing since she was
six,” Prof Bruce.
186. “If you want to be successful, you have to pursue your goal with
the same passion and intensity as you do when asking a girl for a first
date,” Prof Bruce.
187. “If you want to be successful, you have to pursue your goal with
the same passion and intensity as you do when protecting your baby,”
Jennifer Clark.
188. “I am not the Founder of the Ottawa Senators. I’m the mother,” Prof Bruce.
189. “Most people want to be honest but it never hurts to verify,” Greg Graham.
190. “We are all subject to temptation: the little angel and the little
devil often dance on our shoulders. But we should not criticize people
because they have bad thoughts, only if they act on them,” Prof Bruce.
191. “If you don’t ask, you don’t get,” Mahatma Gandhi.
192. “Don’t be afraid to ask for the deal,” Prof Bruce.
193. “There are three answers you can get to any question: yes/no/maybe.
A ‘yes’ is better than a ‘no’ but a ‘no’ is better than a maybe’. I
tell my clients when I hear ‘maybe’ that I’ll take that as a ‘no’ and
not waste any more of their time. They’ll often say: ‘Wait I didn’t mean
to say no.’ Great, so say yes,” Prof Bruce.
194. “In North America, we want out leaders to be perfect but the only
perfect people are those without experience and who never do anything,
exactly the wrong sort to lead,” Prof Bruce.
195. “When you come to a fork in the road, take it,” Yogi Berra.
196. “Never panic. Even when you are panicking, don’t,” Prof Bruce.
197. “Play to the whistle…and a little beyond,” Anon.
198. “An extra day for you is one less for your enemy,” Anon.
199. “The strongest force in finance, almost unstoppable, is compound interest: it can work for you or against,” Matt Nesrallah.
200. “You have one mouth and two ears, use them in that proportion,” Anon.
201. “Once a senior lawyer told me that he had raised our bill by 50%
because the result was so good. But he didn’t forget, years later, to
reduce another one when the results were poor,” Prof Bruce.
202. “Leave something on the table for the other guy: he’ll just come back and spend it with you later anyway,” Cyril Leeder.
203. “I never understood why people can be so greedy and think they have
to take all the value from every deal. If there is no value for the
other person, why would anyone, ever make a deal?” Prof Bruce.
204. “Buy more land then we need, put one of our cool projects in the
middle, drive up the value of the surrounding land and then harvest that
by selling the surplus land,” Cyril Leeder.
205. “Buy more land than we need, put a NHL team and a NHL arena in the
middle of it, drive up the value of the surrounding land and then sell
the surplus land to pay for the Team,” Prof Bruce.
206. “Collect early, pay late,” Anon.
207. “I always pay COD. That way I know that whatever is left in my account at the end of the month belongs to me,” Jason Curry.
208. “A successful entrepreneur is one who can synthesize conflicting
signals and ideas using ‘fuzzy logic’ and isn’t bothered by ambiguity,”
Prof Bruce.
209. “Never confuse politeness for weakness,” Prof Bruce.
210. “People who are taller in NA generally make more money because they
have the ‘right look’. But don’t underestimate others who don’t,” Prof
Bruce.
211. “Everyone has a secret dream. When you can align a person’s inner
dream with the organization’s objectives, you have a powerful
combination that can achieve great things,” Prof Bruce.
212. “A little self knowledge can take you a long way,” Prof Bruce.
213. “After interviewing thousands of entrepreneurs, it appears that
female entrepreneurs want to nurture their new enterprises. Men? They
want to mate with it,” Prof Bruce.
214. “When something special happens, a shift occurs. These are called ‘future shaping days’. Recognize it,” Rod Bryden.
215. “The longest journey is the one where you never take the first step,” Prof Bruce.
216. “There are a lot of people who think they are entrepreneurs but
when they get to the runway, they decline takeoff,” Prof Bruce.
217. “Entrepreneurs are a funny breed: they have great self confidence
and at the same time they are consumed with self doubt,” Prof Bruce.
218. “Give a person a fishing rod not a fish,” Anon.
219. “Play the game,” Nepean High School Knights’ motto.
220. “Defy mediocrity,” Jennifer Clark.
221. “Sometimes you just have to do the cruddy stuff yourself,” Jennifer Clark.
222. “Follow your personal legend,” Paulo Coelho.
223. “The greatest gift you can give others is to show them what they can do for themselves,” Larry Bravar.
224. “You need to be able to recognize it when people who are working in
your business ecosystem are turning in little tiny circles and not
really getting anything done. It’s even better when you can see that in
yourself and fix it,” Prof Bruce.
225. “You should make sure that your business model has links not only
to your clients and suppliers but also to your clients’ clients and your
suppliers’ suppliers. It’s only when you see your enterprise as part of
an entire business ecosystem that you will have the opportunity to
create a sustainable business,” Prof Bruce.
226. “Your business model is the engine of your enterprise,” Professor Tony Bailetti.
227. “Nothing is sustainable unless it’s economically sustainable too,” Professor John Callahan.
228. “Always tell the truth; it’s easier to remember than your lies,” Larry Bravar.
229. “Some men see things as they are and say, Why? I dream things that never were and say, Why not?” Bobby Kennedy.
230. “There are no bridges to burn where none have been built,” Sean Murray.
231. “Any intelligent fool can make things bigger, more complex, and
more violent. It takes a touch of genius – and a lot of courage – to
move in the opposite direction,” Albert Einstein.
232. “An engineer is someone who can do for a dollar what any fool could do for two,” Anon.
233. “An entrepreneur is someone who can create two dollars of revenue where any fool could find one,” Prof Bruce.
234. “The best possible machine has no moving parts,” Anon.
235. “KISS, Keep it simple,” Anon.
236. “If you can’t explain your business plan or your value proposition
in two minutes or less, you’re not the expert you think you are,” Prof
Bruce.
237. “Do you know how naturals get that way? They practice, practice, practice,” Prof Bruce.
238. “When selling, don’t be afraid to name big numbers,” Mark McCormack.
239. “Remember that 80% of your business comes from 20% of your clients so don’t be afraid to fire a client,” Prof Bruce.
240. “It takes just as much effort to do a small deal as it does to do a big one, so do more big ones,” Prof Bruce.
241. “Never become an entrepreneur, with all the stress involved and
effort required, if the best you can do is create the same value as if
you just had a JOB,” Prof Bruce.
242. “Go big or go home,” Anon.
243. “If you’re going to be thinking anything, you might as well think big,” Donald Trump.
244. “Because it’s there,” George Mallory.
245. “We make insanely great products,” Steve Jobs.
246. “Innovation distinguishes between a leader and a follower,” Steve Jobs.
247. “Why join the navy if you can be a pirate?” Steve Jobs.
248. “Business, that’s easily defined – it’s other people’s money,” Peter Drucker.
249. “Provide WOW service,” Tony Hsieh.
250. “Customer service is a core competency,” Prof Bruce.
251. “Each customer represents more than the value of just one
transaction: he or she should be treated as a potential source of a
lifetime of revenue and…of referrals,” Prof Bruce.
252. “Obsess over customers,” Jeff Bezos.
253. “Invent on behalf of customers and clients,” Jeff Bezos.
254. “Think long term (in the order of five to seven years: as long as a
new initiative benefits customers, it’s OK if the payoff is somewhat
down the road for your enterprise),” Jeff Bezos.
255. “Develop a unique corporate culture,” Jeff Bezos.
256. “If something goes catastrophically wrong with your business, I
give you three days. The first to feel sorry for yourself; the second is
a day off and the third? Get on with the rest of your life,” Prof
Bruce.
257. “As an intrapreneur take the initiative: make 90% of the decisions
on your own and get input and direction for the other 10%. But be sure
to know which questions go into the 10% and which belong in the 90%,”
Prof Bruce.
258. “Management is doing things right; leadership is doing the right things,” Peter Drucker.
259. “If you need heroic efforts to find customers and clients, your business is doomed,” Prof Bruce.
260. “Rank does not confer privilege or give power. It imposes responsibility,” Peter Drucker.
261. “As you enter every negotiation, determine your BATNA (Best
Alternative to a Negotiated Agreement). That way, you’ll be OK if no
deal happens,” NLP (Neuro Linguistic Programming).
262. “Trying to predict the future is like trying to drive down a
country road at night with no lights while looking out the back window,”
Peter Drucker.
263. “Be sure you put your feet in the right place, then stand firm,” Abraham Lincoln.
264. “Be kind whenever possible. It is always possible,” Dalai Lama.
265. “All labor that uplifts humanity has dignity and importance and
should be undertaken with painstaking excellence,” Martin Luther King,
Jr.
266. “I like the dreams of the future better than the history of the past,” Thomas Jefferson.
267. “There are no great limits to growth because there are no limits of
human intelligence, imagination, and wonder,” Ronald Reagan.
268. “Property is surely a right of mankind as real as liberty,” John Adams.
269. “If you can’t convince a potential client that their either their
costs will decrease or their revenues will increase (or some combination
of both will happen) when they buy your product or service, you have
failed to understand either your customer’s business or, worse, your own
and you deserve to fail. Negative cost selling (’I’ll pay you to hire
me.’) is the most powerful sales technique around today,” Prof Bruce
(with input from students).
270. “The number one source of bootstrap capital on this planet is home equity, so buy a home,” Prof Bruce.
271. “Human rights and property rights are connected. If you want to
make someone powerless, make them homeless first,” Prof Bruce.
272. “Change is the law of life. And those who look only to the past or
present are certain to miss the future,” John F. Kennedy.
272. “I am extraordinarily patient, provided I get my own way in the end,” Margaret Thatcher.
273. “If you want something done, ask a busy person,” Anon.
274. “There can be no liberty unless there is economic liberty,” Margaret Thatcher.
275. “Politics, economics and media at the highest levels form an
identity in practically every nation; you can’t tell the humans from the
pigs,” Dawn MacMillan.
276. “There is an economic trough from which big corporations all feed
and, guess what? They don’t want to share it with your startup,” Prof
Bruce.
277. “Cowards die many times before their actual deaths,” Julius Caesar.
278. “Men in general are quick to believe that which they wish to be true,” Julius Caesar.
279. “You were not born a winner, and you were not born a loser. You are what you make yourself be,” Lou Holtz.
280. “The steeper the mountain the harder the climb the better the view from the finishing line,” Anon.
281. “Before you say anything ask yourself three things: is it an
improvement on silence, will it hurt anyone, will it help anyone?” Yoga
saying.
282. “If you want to keep a secret, don’t tell anyone anything,” Prof Bruce.
283. “He can talk the talk but can he walk the walk?” Full Metal Jacket.
284. “Many people know the path. Few walk it,” Morpheus From The Matrix.
285. “Be the change you want to see,” Gandhi.
286. “The most important thing to do if you find yourself in a hole is to stop digging,” Warren Buffett.
287. “If you’re lucky enough to do well, it is your responsibility to send the elevator back down,” Kevin Spacey.
288. “You have to be first, different or great. If you’re one of them, you just might make it,” Loretta Lynn.
289. “Always look on the bright side of life,” Monty Python.
290. “You can’t fail if you don’t give up,” Jennifer Clark.
291. “The greatest good you can do for another is not just to share your
riches but to reveal to him his own,” Benjamin Disraeli.
292. “Whoso would be a man, would be a non-conformist,” Ralph Waldo Emerson.
293. “No guts, no glory,” or “Nothing ventured, nothing gained,” Anon.
294. “I never perfected an invention that I did not think about in terms
of the service it might give others. I find out what the world needs,
then I proceed to invent,” Thomas Edison.
295. “The best trades you do are the ones you don’t do,” Glen Sather.
296. “Know when to held ‘em, know when to fold ‘em,” Kenny Rogers.
297. “Experience taught me a few things. One is to listen to your gut,
no matter how good something sounds on paper. The second is that you’re
generally better off sticking with what you know. And the third is that
sometimes your best investments are the ones you don’t make,” Donald
Trump.
298. “A professional is a person who gets up to practice the day after the greatest game of their lives,” Steve Nash.
299. “Early to bed, early to rise, work like h__l and advertise,” Ted Turner.
300. “Want to be more successful and have people respect you more? Then raise expectations of yourself first,” Dawn MacMillan.
301. “Be a finisher,” Prof Bruce.
302. “Make sure you bring home the bacon,” Randy Sexton.
303. “Never submit a matter to the courts since reasonable parties can
always adjudge matters better for themselves,” Rod Bryden.
304. “Don’t be afraid to name a price first,” Prof Bruce.
305. “I would rather do ten good deals than two perfect ones,” Prof Bruce.
306. “Example is not the main thing in influencing other people; it’s the only thing,” Abraham Lincoln.
307. “Keep away from people who try to belittle your ambitions. Small
people always do that, but the really great make you feel that you, too,
can become great,” Mark Twain.
308. “Let 99 deals go as they cross your path but when the right one appears, strike,” Professor OJ Firestone.
309. “Humans can not live without hope,” Prof Bruce.
310. “Set very high goals, and then be willing to take unexpected pathways to get there,” Mark Pincus.
311. “Chase the vision, not the money,” Tony Hsieh.
312. “A lot of the best stuff that we’ve done is tried not to take all the advice from other people,” Mark Zuckerberg.
313. “The function of entrepreneurs is to reform or revolutionize the
pattern of production… by exploiting an invention or, more generally, an
untried technological possibility for producing a new commodity or
producing an old one in a new way, by opening up a new source of supply
of materials or a new outlet for products, by reorganizing an industry…”
Joseph Schumpeter.
314. “I have not failed. I’ve just found 10,000 ways that won’t work,” Thomas Edison.
315. “The only place where success comes before work is in the dictionary,” Vidal Sassoon.
316. “Once you say you’re going to settle for second, that’s what happens to you in life,” John F. Kennedy.
317. “Never say: ‘I’ll try.’ That is the language of losers,” Prof Bruce.
318. “Set goals but don’t over plan. Remember that the moment you come
into contact with your market, everything changes,” Prof Bruce.
319. “Work expands so as to fill the time available for its completion,” Cyril Northcote Parkinson (Parkinson’s Law).
320. “Impose deadlines on everyone, including yourself,” Prof Bruce.
321. “In a hierarchy, every employee tends to rise to their level of
incompetence,” Laurence J. Peter and Raymond Hull (Peter Principle).
322. “The hurrier I go, the behinder I get,” Lewis Carroll.
323. “One of the greatest compliments you could ever be paid would be to
have it said about you that you are like Atticus Finch, ‘the same
person in the privacy of your own home as you are in the street,’” Prof
Bruce.
324. “Be who you are and say what you feel, because those who mind don’t matter, and those who matter don’t mind,” Dr. Seuss.
325. “There is nothing we are sure is infinite, not even the Universe, except ideas,” Prof Bruce.
326. “Nobody can make you feel inferior without your consent,” Eleanor Roosevelt.
327. “Insanity is doing the same thing, over and over again, but expecting different results,” Rita Mae Brown.
328. “You only live once, but if you do it right, once is enough,” Mae West.
329. “Let Death be your advisor,” Carlos Castaneda.
330. “If you tell the truth, you don’t have to remember anything,” Mark Twain.
331. “Be yourself; everyone else is already taken,” Oscar Wilde.
332. “Life is what happens to you while you’re busy making other plans,” John Lennon.
333. “If you don’t stand for something you will fall for anything,” Malcolm X.
334. “Whenever you find yourself on the side of the majority, it is time to pause and reflect,” Mark Twain.
335. “That which does not kill us makes us stronger,” Friedrich Nietzsche.
336. “If it is important, remember it,” Prof Bruce.
337. “To do great things, you need peace at home,” Prof Bruce.
338. “Close your eyes and imagine Mars, the Red Planet. There, you just
proved that some things are faster than light,” Prof Bruce.
339. “There should be a 3 am network for entrepreneurs. They are all up
anyway furiously scribbling notes from their subconscious,” Prof Bruce.
340. “Entrepreneurship by its very nature is a lonely life,” Prof Bruce.
341. “Successful people are held to a higher standard of behaviour; get used to it,” Prof Bruce.
342. “The question isn’t who is going to let me; it’s who is going to stop me,” Ayn Rand.
343. “When something great happens to a friend, rejoice as if it happened to you,” Prof Bruce.
344. “Never do anything to harm your own interests,” Prof Bruce.
345. “You can not right a wrong by committing a ‘crime’ yourself,” Prof Bruce.
346. “The first million words are the toughest,” Max Neutze, PhD Supervisor.
347. “A pessimist sees the difficulty in every opportunity; an optimist
sees the opportunity in every difficulty,” Winston Churchill.
348. “Do one thing everyday that scares you,” Eleanor Roosevelt.
349. “Great invention is obvious…after the fact,” Prof Bruce.
350. “Patents are worth what you are willing to pay to defend them,” Patent Lawyer.
351. “The cure for boredom is curiosity. There is no cure for curiosity,” Dorothy Parker.
352. “How wonderful it is that nobody need wait a single moment before starting to improve the world,” Anne Frank.
353. “Never be afraid to admit you don’t know the answer or to ask for it,” Prof Bruce.
354. “You can never be overdressed or overeducated,” Oscar Wilde.
355. “It’s actions, not words, that matter,” Nicholas Sparks.
356. “And, when you want something, all the universe conspires in helping you to achieve it,” Paulo Coelho.
357. “Have you ever noticed that when you learn a word for the first
time, you hear it everywhere in the next few weeks? Same thing with new
ideas,” Prof Bruce.
358. “The first time someone shows you who they are, believe them,” Maya Angelou.
359. “It never hurts to be charming but hard work and smarts help too,” Prof Bruce.
360. “The more you look, the more it isn’t there,” Winnie the Pooh.
361. “In the Internet age, more pie for me does not mean less for you,” Prof Bruce.
362. “And I think to myself, what a wonderful world,” Louis Armstrong.
363. “There are the Three Laws of Thermodynamics, Newton’s Laws of
Motion, Faraday’s Law of Induction but there is no Law of Fairness,”
Prof Bruce.
364. “We’re looking for people with vision, decisiveness, attention to
detail, refusal to accept defeat and situational awareness,” Robert
Thirsk.
365. “I’d rather die from an unavoidable accident than from my failure to properly perform my duties,” Robert Thirsk.
366. “The best way to predict the future is to invent it,” Alan Kay.
367. “You trust me to pay you and I trust you to work,” Prof Bruce.
368. “If you knew how hard it was going to be to start your business,
how long it was going to take to become successful and how much it was
going to cost in cash and personal hardship, no one would ever begin,”
Prof Bruce.
369. “Sir Terence Matthews once told me it takes 7 to 12 years to build a
great business. If it takes Terry that long, it’s probably going to
take you and me longer,” Prof Bruce.
370. “It’s OK to bankrupt a company if you are left with no other choice but never accept personal bankruptcy,” Prof Bruce.
371. “Protect your credit score as if it were one of your prized assets. Turns out, it is,” Prof Bruce.
372. “Litigation to collect your receivables is your last choice and, even then, don’t,” Prof Bruce.
373. “Whenever a Tenant got into trouble, rather than sue them or
distrain, we worked with them. We saved about half,” Prof Bruce.
374. “Litigation is a soul destroying, value destroying, negative
holocaust that can eat your life. Just ask Tom Wolfe,” Prof Bruce.
375. “Politicians don’t really understand the purpose of bankruptcy
laws: it’s to give entrepreneurs a chance to start again not to punish
them. What if the punishment for failure wasn’t bankruptcy, but hanging
instead? Wouldn’t have many startups, would we?” Prof Bruce.
376. “If you ain’t first, you’re last,” Ricky Bobby.
377. “Creditor proofing is not about hiding money in off shore accounts.
It’s about doing some prudent things like putting the matrimonial home
in the name of the spouse with the lower risk profile so that your
family won’t be homeless if the business fails,” Prof Bruce.
378. “I think that business modeling just might be the Rosetta Stone
which leads to unraveling the DNA of what actually makes a business
successful,” Prof Bruce
379. “Do unto others as you would have them do unto you,” Jesus of Nazareth.
380. “The day you decide to delegate the crucial aspects of your
business like marketing, sales and collecting receivables is the day you
should retire and let someone else take over,” Prof Bruce.
381. “If as CEO the best strategy you can come up with is to sell the
company or buy back your company’s stock from shareholders, it’s time to
retire and let someone with more imagination take over,” Prof Bruce.
382. “Sometimes help comes at the best possible time from the least expected source,” Prof Bruce.
383. “The media used to follow the principle that they would not publish
anything without confirmation by two independent sources. Now they
follow: comfort the afflicted and afflict the comfortable,” Prof Bruce.
384. “There is no news anymore; it’s all infotainment,” Prof Bruce.
385. “The best media profile to have is…none,” Prof Bruce.
386. “The more important you are, the smaller the sign on your front door,” Prof Bruce.
387. “First the media build you up followed by an inevitable tearing down,” Prof Bruce.
388. “You can never be a hero…in your own home town,” Prof Bruce.
389. “Never name a company after yourself; you might as well paint a bullseye on your back,” Prof Bruce.
390. “If everything is urgent, nothing is,” Anon.
391. “When someone tells you something in confidence, keep it,” Prof Bruce.
392. “Our continuing mission…to boldly go where no one has before,” Jean Luc Picard.
393. “You don’t think you have any enemies? Think again,” Prof Bruce.
394. “If you think you can con a con artist, you’re the greater fool,” Prof Bruce.
395. “If you are an asset flipper, you are going to flip til you flop,” Prof Bruce.
396. “It’s hard to capture lightning in a bottle twice. So build and hold,” Prof Bruce.
397. “You benefit financially from owning your own business by paying
yourself wages, receiving dividends, having a company car, what have
you. But owners often forget who actually owns the retained earnings in
their business? Why they do,” Prof Bruce.
398. “You start out life with a certain storehouse of luck but you use
it up over time so you need to be more careful later on,” Prof Bruce.
399. “When you’re 20, your personal discount rate is about 22% p.a. and
when you’re 60 it’s about 4.5%. If it isn’t, you have mucked up your
financial life,” Prof Bruce.
400. “It’s OK to be an asset flipper early in your professional life:
how else are you going to get your grub stake?” Prof Bruce.
401. “I have to laugh when an entrepreneur asks his or her Bank for a
loan. The Banker inevitably asks for collateral. ‘Well, I have my
student loan.’” Prof Bruce.
402. “Every entrepreneur needs a PBS, Personal Balance Sheet, to keep
track of things. And they inevitably forget to add the value of their
new startup even if it is only a notional amount,” Prof Bruce.
403. “A better way to manage business affairs than a LLC has yet to be
found; they don’t die, their governance is well understood, double entry
bookkeeping works, ownership rules are straightforward and, today, you
can self-incorporate for about $250,” Prof Bruce.
404. “There is always one fool who’ll buy your product, maybe two but
probably not three. So aim for at least three launch clients,” Prof
Bruce.
405. “The top dozen sources of capital for self-capitalized businesses
are: 1. home equity loans, 2. trade credit (supplier credit), 3. future
customers and clients, 4. soft loans from friends and family, 5.
partners, 6. consulting, 7. seller financing, 8. trading (asset flipping
and speculating), 9. credit cards, 10. sponsors, 11. savings and 12.
sweat equity,” Prof Bruce.
406. “Most Canadians if you offered them a JOB making $60k, paid every
two weeks versus a JOB that would pay them $90k or more but the pay was
contingent on performance, would take the $60k,” Prof Bruce.
407. “When I left a job where I was making minimum wage for one where I
could make three times as much in half the hours, my Mom and my
Grandmother tried to talk me out of it because the new job was a
commission position,” Matthew Firestone.
408. “Female headed businesses tend to have higher survival rates. Why?
Because they pay more attention to detail, are not afraid to get in the
trenches and actually do some work and have more realistic goals. The
guys all want to be the next Google. There is only one Google,” Prof
Bruce.
409. “I think being on-call 100% of the time is a drag. Most of us are
not paramedics or firefighters so how about some time off?” Prof Bruce.
410. “The most valuable commodity you own is your reputation, so protect it,” Kent Plumley.
411. “Scratch the surface and most people are motivated by two primal emotions: greed and fear,” Prof Bruce.
412. “Jane Jacobs said that all human progress came from the formation
of villages, towns and cities. Why? Because people living in close
proximity can learn from each other and trade based on Ricardo’s law of
comparative advantage,” Prof Bruce.
413. “Design can contribute as much as 94% of the value of a product. So how come so many artists are poor?” Prof Bruce.
414. “Artists, designers, architects, novelists, poets, musicians and
other creative people should learn more about business so death isn’t a
career move for them,” Prof Bruce.
415. “Entrepreneurs often feel that if their competition is offering the
product at $10 they have to offer it for $1. What’s wrong with $9.95?”
Prof Bruce.
416. “Sometimes when you put your prices up, volume goes up not down.
That’s because higher prices are associated with higher quality,” Prof
Bruce.
417. “A kid came up to me and asked me if I could get him a bike. Sure, I
said, I have one for $100. Naw, I was looking for one that’s around
$200. Hmm, I said, I have one of those too,” Young Entrepreneur.
418. “Don’t fool yourself, tough zoning codes aren’t there just to
protect your property values. They are the greatest single boon to the
bottom line of large, established developers who know how to get around
those Byzantine rules and bureaucracy and they keep out entrepreneurs
who might otherwise change the game,” Prof Bruce.
419. “Politicians love money and power and, come to think of it, the two are interchangeable,” Prof Bruce.
420. “Want to get your municipal project approved? Then remember local
councillors can count. If more heads in Council Chambers are nodding
‘yes’, you win and vice versa,” Prof Bruce.
421. “A hotel I know kept cutting prices during the last recession but
bookings went down. They cut some more and bookings went down some more.
Turns out, their pricing was sending a signal that the hotel was a
scary, unsafe place to stay. Then they raised prices and, sure enough,
volume went up,” Prof Bruce.
422. “Canadian values of peace, order and good government are a
prerequisite to building any sort of private value; you can’t develop
any type of sustainable enterprise in their absence,” Prof Bruce.
423. “Who do you think creates better business models: undergrads from
Engineering & Business or grad students? Hands down, it’s the
undergrads, don’t ask me why,” Prof Bruce.
424. “What does Toronto have that Ottawa doesn’t?” Prof Bruce to himself
on what to do next (before founding the Ottawa Senators).
425. “Now, John, you give those boys from Ottawa a chance,” Frank Finnegan to John Ziegler then President of the NHL.
426. “You will never, ever get a (NHL) franchise for Ottawa,” NHL Board
of Governor Member to Prof Bruce the night before one is awarded.
427. “A park is not an environmental issue: there is no wildlife there,” Prof Bruce.
428. “Natural systems work a lot better than mechanical ones. Your heart
will beat > 2.3 billion times. Try that with a water pump,” Prof
Bruce.
429. “If we really wanted to solve environmental issues on this planet,
within 450 years, we could return earth population to 1.2 billion (about
what it was in 1850) plus make 85% of the land mass and 95% of the
oceans completely off limits to humans,” Prof Bruce.
430. “Nimby’ites are wrong. Adding density and mixed uses to an existing
urban area will increase property values, in the absence of an increase
in street crime, otherwise Ottawa would have the same rents as
Manhattan and Tokyo,” Prof Bruce.
431. “Did you notice how Tom Hank’s character in Castaway started to
make better decisions after he had a trusted advisor to verbalize his
thoughts to even if it was a volleyball named ‘Wilson’,” Prof Bruce.
432. “Modern society treats young people as if they were children way
too long. How would you like to be 17 and still need a Hall Pass to go
to the washroom?” Prof Bruce.
433. “For many adults, the best time of their lives was High School or
College. After that, it’s all downhill. How sad. But why is that? It’s
because they want to long to belong to something greater than
themselves,” Prof Bruce.
434. “Architects have left the field of urban planning to urban planners
and the result is that the built form of our cities is worse, much
worse than what we were capable of building circa 1930,” Prof Bruce.
435. “Repeat after me, ‘the Internet changes everything’,” Prof Bruce.
436. “Newspapers, in the Age of the Internet, forgot a hoary old
chestnut: ‘If you can’t beat ‘em, join’em,’ and they’re finished as a
result,” Prof Bruce.
437. “I tried to convince the home building industry in the year 2000 to
reverse out the work of ‘building’ homes online to their customers: let
them pick their lot, their model, their finishes, everything and to see
prices for all of it. No one would do it because that info was
‘proprietary’ and they didn’t want their competitors to know it. Guess
what, they already do. Ever hear of secret shoppers?” Prof Bruce.
438. “If you build something that is so complex that no one person, no
one controlling mind can run it, you are courting a catastrophe,” Prof
Bruce.
439. “If they could get a washing machine to fly, my Jimmy could land it,” Jim Lovell’s Mom, Blanche.
440. “Failure is not an option,” Gene Kranz.
441. “Let’s not make things worse by guessing,” Gene Kranz.
442. “I don’t care about what anything was DESIGNED to do, I care about what it CAN do,” Gene Kranz.
443. “When we were trying to bring back the Ottawa Senators, we did some
market research that suggested we could sell 100,000 season tickets
when the actual number turned out to be more like 10,000. That’s because
a market starved for NHL hockey will say they will pay ‘anything’ for
it, as long as the question is hypothetical,” Prof Bruce.
444. “The only way to do market research is to do guerrilla market
research: where people think they are actually making a real buying
decision,” Prof Bruce.
445. “Guerrilla marketing and guerrilla marketing research almost always
take you into a grey area where your ethics are tested. Make sure you
come out with your reputation in tact, otherwise you’ll find out what
reverse marketing is,” Prof Bruce.
446. “Reverse marketing happens when an organization’s planned marketing
campaign results in negative consequences for their brand. The reason a
brand is important is, in part, that it creates trust in that
organization, which, in a for-profit business, results in higher sales.
Reverse marketing works in the opposite direction,” Prof Bruce.
447. “A client when buying your product or service can experience a
negative cost if the benefits from using your product or service are
greater than its cost. A negative cost can also result from a reduction
in their costs from the use of your product or service that is greater
than the cost of buying the product or service from you or it may result
from some combination of higher benefits and lower costs,” Prof Bruce.
448. “There is truth and smart truth. In a media-saturated world where
each word is parsed by many looking for scandal, it is more important
than ever to tell the smart truth. Lawyers, especially criminal law
lawyers, understand the difference,” Prof Bruce.
449. “CEOs triangulate on employees and other sources of information to
be sure that they are getting accurate information which is mission
critical to any enterprise’s longevity and sustainability. CEOs know
that direct reports often tell them what they think the CEO wants to
hear instead of the unvarnished truth. That is a reason why many CEOs
like to speak directly to customers and suppliers—they disintermediate
everyone else,” Prof Bruce.
450. “Bootstrap capital, also known as self-capitalization, is how most
start-ups actually capitalize themselves. It allows the Founders to keep
control of their own enterprises and not lose it to VCs and other debt
or equity holders,” Prof Bruce.
451. “VCs should put capital into more mature businesses leaving
startups to fend for themselves. New businesses that have real customers
and real cashflow are hardier, more sustainable enterprises and, if and
when they do accept VC funding, it’s a much more even playing field,”
Prof Bruce.
452. “You know the song ‘money for nothing’? Well that’s what happens
when you bundle in other people’s products and services into your own
offering with a markup,” Prof Bruce.
453. “If you can not acquire customers and clients in a cost-effective
manner, your company is doomed so spend enough time developing effective
sales and distribution channels,” Prof Bruce.
454. “When you can’t take it anymore and you feel that it’s time to
delegate crucial tasks like sales and finance, it’s actually time to
resign and let someone else take over,” Prof Bruce.
455. “Three rules of work: out of clutter find simplicity; from discord
find harmony; in the middle of difficulty lies opportunity,” Albert
Einstein.
456. “A lifestyle business is an enterprise that provides its
Founders/Owners with an adequate personal lifestyle but that is all. In
other words, it does not represent a game changing, large-scale
opportunity that others such as Venture Capital funds can or would
participate in—there just isn’t a large enough market, growth is too low
or their market share is too small,” Prof Bruce.
457. “A prime consideration for every enterprise, even not-for-profits
and charities, is what their sales or distribution channels are or will
be. These are channels that you sell into and can take years to
develop,” Prof Bruce.
458. “If all economists were laid end to end, they would not reach a conclusion,” George Bernard Shaw.
459. “Economists have accurately predicted nine out of the past five
recessions,” paraphrasing a quip by Nobel economist Paul Samuelson about
the stock market.
460. “If you are feeling frustrated by a lack of precision from
economists, you can curse the profession by exclaiming: ‘Frigonomics’,”
Prof Bruce.
461. “…how can man control his own affairs when he is not only incapable
of compiling a plan for some laughably short term, such as, say, a
thousand years, but cannot even predict what will happen to him
tomorrow?” the Devil.
462. “If you help enough people get what they want, you can get everything you want,” Zig Ziglar.
463. “Don’t waste your time doing deals where you trade four quarters for a buck,” Anon.
464. “Put me anywhere on God’s Green Earth, and I’ll triple my worth,” Sean Carter.
465. “Where there is hope, there’s a way,” Prof Bruce.
466. “There are always alternatives,” Mr. Spock.
467. “Buy low/sell high. Easy to say/hard to do. Why? Because human
psychology is sheep-like & banks won’t lend during downturns. Come
to think of it, for the same reason,” Prof Bruce.
468. “I wish I didn’t know now what I didn’t know then,” Bob Seger.
469. “If entrepreneurs knew how long it would take, how much it would
cost and the personal toll on them and their families, no one would ever
start a new business: ignorance truly is bliss,” Prof Bruce.
470. “Ever hear that ‘no news is good news’ or ’silence is golden’?
Well, when you don’t hear from a potential client for awhile, that’s bad
news,” Prof Bruce.
471. “Morality is simply the attitude we adopt towards people we personally dislike,” Oscar Wilde.
472. “If you would know the value of money, go and try to borrow some,” Benjamin Franklin.
473. “Life is the art of drawing sufficient conclusions from insufficient premises,” Samuel Butler.
474. “Bad laws are the worst sort of tyranny,” Edmund Burke.
475. “A man may as well open an oyster without a knife, as a lawyer’s mouth without a fee,” Barten Holyday.
476. “The recipe for perpetual ignorance is: be satisfied with your opinions and content with your knowledge,” Elbert Hubbard.
477. “The only vice that cannot be forgiven is hypocrisy. The repentance of a hypocrite is itself hypocrisy,” William Hazlitt.
478. “Man is only truly great when he acts from the passions,” Benjamin Disraeli.
479. “He that would govern others, first should be the master of himself,” Phillip Massinger.
480. “Government is a contrivance of human wisdom to provide for human
wants. Men have a right that these wants should be provided for by this
wisdom,” Edmund Burke.
481. “Peace, order and good government,” Imperial Acts of the Parliaments of Canada, Australia and New Zealand.
482. “Genius is the capacity to act rightly without precedent- the power to do the right thing the first time,” Elbert Hubbard.
483. “Man is born free, and everywhere he is in chains,” Jean-Jacques Rousseau.
484. “Fear of danger is ten thousand times more terrifying than danger itself,” Daniel Defoe.
485. “Nothing ever becomes real till it is experienced- even a proverb
is no proverb to you till your life has illustrated it,” John Keats.
486. “The better part of valour is discretion,” William Shakespeare.
487. “Curiosity is one of the most permanent and certain characteristics of a vigorous intellect,” Samuel Johnson.
488. “You start to get old the day you figure you know everything and no
one can teach you anything. I know old 30-year olds,” Prof Bruce.
489. “Want to impress people with how smart you are? Then resist the
‘not invented here’ syndrome and learn best practices from everyone
around you,” Prof Bruce.
490. “A great part of courage is the courage of having done the thing before,” Ralph Waldo Emerson.
491. “Confidence placed in another often compels confidence in return,” Livy.
492. “A lean compromise is better than a fat lawsuit,” George Herbert.
493. “Common sense is not so common,” Voltaire.
494. “The true civilization is where every man gives to every other every right that he claims for himself,” R. G. Ingersoll.
495. “There is nothing permanent except change,” Heraclitus.
496. “New opinions are always suspected, and usually opposed, without
any other reason but because they are not already common,” John Locke.
497. “Precisely the opposite of what we now know to be true,” Dr. Aragon.
498. “No bird soars too high if he soars with his own Wings,” William Blake.
499. “Fine art is that in which the hand, the head, and the heart of man go together,” John Ruskin.
500. “The angry man always thinks he can do more than he can,” Albertano of Brescia.
501. “He who boasts of his descent, praises the deeds of another,” Seneca.
502. “Just because your parents are rich doesn’t mean you are,” Prof Bruce.
503. “If you have a good idea, you’ll have competition. If it is a bad
idea, you won’t but so what, it’s a bad idea,” Prof Bruce.
504. “You can never plan the future by the past,” Edmund Burke.
505. “Peace is liberty in tranquility,” Cicero.
506. “Freedom’s just another word for nothing left to lose,” Kris Kristofferson.
507. “If you have proven that a business doesn’t work, never go back and try again. That’s what a proof is,” Prof Bruce.
508. “The times they are a-changin’,” Bob Dylan.
509. “All that is human must retrograde if it does not advance,” Edward Gibbon.
510. “Give me a lever long enough, and a fulcrum strong enough, and single-handed I can move the world,” Archimedes of Syracuse.
511. “Young people underestimate the value they give to a new enterprise
by failing to recognize the qualities they bring forth- passion,
energy, focus, intensity, willingness to gamble all; in a word, ’sweat’
equity,” Prof Bruce.
512. “Self-knowledge is the start of a journey towards wisdom. Why?
Because if you know yourself, you can make changes for the better,” Prof
Bruce.
513. “Scientists who reject findings without proof have rejected the scientific method,” Prof Bruce.
514. “A cynic rarely achieves anything worthwhile in life,” prof Bruce.
515. “Than self-restraint there is nothing better,” Lao-Tsze.
516. “We are all guilty of sins of omission; make sure that you commit none of commission,” Prof Bruce.
517. “You want to know who is holding you back? Look in the mirror,” Prof Bruce.
518. “I disapprove of what you say, but I will defend to the death your right to say it,” Voltaire.
519. “Success is the child of Audacity,” Benjamin Disraeli.
520. “Either attempt it not, or succeed,” Ovid.
521. “Hidden talent counts for nothing,” Nero.
522. “But words once spoke can never be recall’d,” Wentworth Dillon, Earl of Roscommon.
523. “The empires of the future are empires of the mind,” Winston Churchill.
524. “The wise learn many things from their foes,” Aristophanes.
525. “Great innovations are transparent and obvious, after the fact,” Prof Bruce.
526. “A little rebellion now and then is a good thing,” Thomas Jefferson.
527. “If a house be divided against itself, that house cannot stand,” St. Mark.
528. “Follow your own bent no matter what people say,” Karl Marx.
529. “Seek knowledge from the cradle to the grave,” Prophet Muhammad.
530. “Since brevity is the soul of wit, and tediousness the limbs and outward flourishes, I will be brief,” William Shakespeare.
531. “An Environmentalist is someone who owns a cabin in the woods. A
Developer is someone who would like to own a cabin in the woods,” Dennis
Miller.
532. “Old money doesn’t work very hard. If someone who inherits a
property, sells it, he or she more than likely would loan the proceeds
to a Bank or a government. If an entrepreneur was involved instead, that
money would be recycled through the economy in any number of spinoff
projects resulting in a much higher volume and speed of money with much
higher rates of return as well,” Prof Bruce.
533. “In more than 50 years, I never had a difference of opinion with my
Bank. You know why? Because they always owed me money,” Harold
Shenkman.
534. “City-building is an exercise in optimism undertaken by optimistic people,” Prof Bruce.
535. “If more pie for me always meant less pie for you, we would still
be living in cold caves, old, ugly and dead by 40,” Prof Bruce.
536. “If you always end every sentence in a way that sounds like you’re
asking a question, you’ll never sell anything,” Prof Bruce.
537. “Don’t forget the contracts,” Fedex TV Commercial.
538. “We are salespeople. We sell. It’s not trust my handshake, it’s
make the sale! Get it signed,” Avery Bishop from the film Jerry Maguire.
539. “Never shake hands on a deal unless you mean it. A handshake deal
can be upheld by the courts in everything except real estate which (in
Ontario) has to be in writing,” Prof Bruce.
540. “I don’t know the key to success, but the key to failure is trying to please everybody,” Bill Cosby.
541. “There is no labor a person does that is undignified; if they do it right,” Bill Cosby.
542. “All anything takes, really, is confidence,” Rachel Ward.
543. “It is better to die on your feet than to live on your knees,” Emiliano Zapata.
544. “You should examine yourself daily. If you find faults, you should
correct them. When you find none, you should try even harder,” Xi Zhi.
545. “Apply yourself. Get all the education you can, but then, by God,
do something. Don’t just stand there, make it happen,” Lee Iacocca.
546. “Lots of people will tell you that they want to be entreprneurs but
when the time comes for a commitment, they’ll freeze up on you,” Prof
Bruce.
547. “If you wait for an engineer to give you the green light to ship, you’ll be waiting forever,” Prof Bruce.
548. “I’ve always found that the speed of the boss is the speed of the team,” Lee Iacocca.
549. “In our organization, I am the bottleneck,” Prof Bruce.
550. “When someone tells you that they can multi-task, you’ve just met someone who is going to screw up,” Prof Bruce.
551. “We are continually faced by great opportunities brilliantly disguised as insoluble problems,” Lee Iacocca.
552. “I’ve had a few arguments with people, but I never carry a grudge.
You know why? While you’re carrying a grudge, they’re out dancing,”
Buddy Hackett.
553. “You can’t achieve your goals if you don’t know what they are,” Prof Bruce.
554. “When I was an Army Captain, I worked hard for my soldiers and, as a result, they worked hard for me,” Trevor Wilkins.
555. “Serve to lead,” Royal Military Academy Sandhurst Motto.
556. “When thinking about how to protect your IP, many lawyers advise
you to apply for a patent. But there are cheaper, faster and maybe
better alternatives such as copyright, trademark and trade secret. After
all, Coca Cola, Colonel Sanders and Google did not too badly keeping
their ’secret sauce’ a secret,” Prof Bruce.
557. “Want to know why Americans put legals first and business second
while Canuks do the opposite? The US has 5% of world population but 66%
of all the lawyers,” Prof Bruce.
558. “When people say it’s not about the money, it’s about the money,” Anon.
559. “If you have trouble asking for the deal, naming a price or
collecting your receivables, maybe it’s because there’s a little voice
inside your head that is saying ‘you’re not worth it.’ You are,” Prof
Bruce.
560. “Everyone, even charities, need money. Without it, you can’t do good works. So don’t be afraid to go after it,” Prof Bruce.
561. “If you find yourself becoming more ‘other directed’ when you are
in a business, it’s time to retire and find something else to do,” Prof
Bruce.
562. “Never retire just change what you do,” Professor O. J. Firestone.
563. “Face it, you are going to have five or six quite different careers
in your 21st Century lifetime so your most important skill is
adaptability,” Prof Bruce.
564. “Your life as an entrepreneur is a day to day experiment,” Prof Bruce.
565. “In your darkest hours, help will come from the least expected
source and direction and never from where you thought help might be
found,” Prof Bruce.
566. “If you have to resort to calculating the probability of a series
of deals coming through for you to keep your business going, you are, in
fact, back to ‘counting your chickens before they hatch’,” Prof Bruce.
567. “When you tackle a new field, first, you think it’s easier that it
really is, then, when you know a bit more, you think it is harder than
it actually is and, finally, when you become adept at it, you know it’s
like everything else, trickier than you thought it was,” Prof Bruce.
568. “It could be that people who say that money is the root of all evil
are using that as an excuse. Money, per se, is not evil; but living
without it sure is,” Prof Bruce.
569. “I been rich and I been poor and rich is better,” Joe Louis.
570. “When I was young I used to think that money was the most important
thing in life and now that I am old, I know it is,” Oscar Wilde.
571. “It isn’t necessary to be rich and famous to be happy, it’s only necessary to be rich,” Alan Alda.
572. “If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem,” J.P. Getty.
573. “In marketing, you get to wear nice suits/dresses, make dirt, get
laid off and face plenty of competition. In sales, there are two jobs
for every applicant plus you should make six figures within three years.
So why is everyone afraid of sales?” Prof Bruce.
574. “Sales is the teeth end of each enterprise. Everything else is tail,” Prof Bruce.
575. “The real reason businesses fail is a lack of sales. Ever heard of a
company with booming sales going out of business?” Prof Bruce.
576. “If your tooth to tail ratio is right, you can do anything. That’s
why the Vietnamese beat a superpower like the US and why you too can win
against established, elephant-sized competitors,” Prof Bruce.
577. “Entrepreneurs can turn on a dime,” Prof Bruce.
578. “Mortals can keep no secret. If their lips are silent, they gossip
with their fingertips; betrayal forces its way through every pore,”
Sigmund Freud.
579. “Sensing what others feel without their saying so captures the essence of empathy,” Daniel Goleman.
580. “If you aren’t empathetic, you can’t sell,” Prof Bruce.
581. “If you are planning on expanding your offerings, make sure, at a
minimum, you are talking apples and oranges not apples and sheep. At
least the former are all fruit,” Prof Bruce.
582. “You can’t get your second customer until you’ve got your first,” Prof Bruce.
583. “Good things come to those who work their backsides off,” Casey Canning.
584. “When something is proven not to work, the person who said ‘try,
try, try again’, never understood that, in business, you can never go
home again,” Prof Bruce.
585. “At a minimum, entrepreneurs should: own a home (in the name of the
spouse with the lowest risk profile), own their operating business
(without partners, if possible), have some personal financial assets
(that are creditor proof) and own their own building (in a company
separate from their operating company and leased to it) and a personal
holding company to control it all,” Prof Bruce.
586. “The hours you sleep before midnight are worth double the hours after,” Anon.
587. “Successful entrepreneurs make written lists of what they and
everyone around them need to do and then make sure that, before they go
home, it’s all done,” Prof Bruce.
588. “It’s true, the ‘early bird gets the worm’: you can’t just rely on
your smarts to outwit and out-hustle your competitors, you need to
outwork them too,” Prof Bruce.
589. “First mover advantage can be overrated: the second mouse gets the cheese,” Anon.
590. “Ever heard that waiting to be hung in the morning, concentrates
the mind? That’s why entrepreneurs can wriggle out of almost any kind of
bind,” Prof Bruce.
591. “Go confidently in the direction of your dreams. Live the life you have imagined,” Henry David Thoreau.
592. “If you want to see the true measure of a man, watch how he treats his inferiors, not his equals, ” J. K. Rowling.
593. “I’ve learned that you can’t have everything and do everything at the same time,” Oprah Winfrey.
594. “Designing your product for monetization first, and people second will probably leave you with neither,” Tara Hunt.
595. “Whenever I see a brilliant kid decide to join Goldman Sachs,
McKinsey, or Google, I think to myself: a start-up just died, and as a
result our world is a little less wealthy, innovative, and interesting,”
Chris Dixon.
595. “Here’s my theory about meetings and life; the three things you
can’t fake are erections, competence and creativity. That’s why meetings
become toxic when they put uncreative people in a situation in which
they have to be something they can never be. And the more effort they
put into concealing their inabilities, the more toxic the meeting
becomes. One of the most common creativity-faking tactics is when
someone puts their hands in prayer position and conceals their mouth
while they nod at you and say, ‘Mmmmmm. Interesting.’ If pressed,
they’ll add, ‘I’ll have to get back to you on that.’ Then they don’t say
anything else,” Douglas Coupland.
596. “Every year in an entrepreneur’s life is worth two of everyone else’s and you’ll look like it too,” Prof Bruce.
597. “You want real job security? Then every person on this planet needs to get a Personal Business for Life,” Prof Bruce.
598. “It wasn’t government sponsored 5-year plans or ‘great leaps
forward’ that made China and India the tigers they are today. It was the
unleashing of their marvelous entrepreneurs from the chains of
bureaucratic bondage,” Prof Bruce.
599. “A planned life is a dead life,” Lauren Bacall.
600. “Computers are useless. They can only give you answers,” Pablo Picasso.
For quotes 601 to 1000, please see: https://www.eqjournal.org/?p=2343.
Prof Bruce
Prof Bruce @ 7:39 am
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Development Economics and Entrepreneurship
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Internet– the Internet is Eating a Hole in the Global
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Personal Business for Life, PB4L
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Rules? There are no rules in entrepreneurship.
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Value Differentiation and ‘Pixie Dust’
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Writing, Research and Experimentation
10 Things that Entrepreneurs can Learn from JJ Abrams’
Posted on
Saturday 17 July 2010
Reboot of the Star Trek Franchise
And Why E Myth Author, Michael E. Gerber is Wrong about Delegating
JJ Abrams (Director) re-launched Paramount’s Star Trek franchise in
2009 resulting in the highest grossing film in the series. How did he do
that and what can entrepreneurs learn from his example?
Here are ten things entrepreneurs can learn from him:
1. One controlling mind is needed. (If you have a
partnership, make sure you agree, in advance, that one of you will have
the final call on big decisions. There was no doubt– the controlling
mind for everything to do with this film was JJ’s.)
2. Leadership counts. (JJ understands both big
action scenes and small intimate moments, rare in film Directors.
Demonstrated competence is key. Abrams is no dilettante– he knows the
nitty gritty of every job that goes into making a film. He can lead by
example.)
3. Inspiration is important—high EQ counts at least as much as high IQ.
(Can’t get along with colleagues, suppliers, peers, sub-ordinates,
clients, direct reports, superiors, investors? You won’t get far in
life. Abrams insisted on shooting the film using widescreen anamorphic
lenses and hellated lighting—despite pressure to use digital cameras.
Anamorphic lenses gave the film imperfections and a grittiness you
cannot get from digital cameras. He persuaded the studio to back him on
this and many other controversial steps he took to rescue the franchise.
I know and have met some of those film studio bosses– they are tough
hombres. JJ got his way on things because of his high EQ.)
4. Keeping your cool under pressure matters. (Mastery of the Seven Deadly Sins (see: https://www.eqjournalblog.com/?p=32)
including anger is important. If you can’t master yourself, you won’t
others. Despite the pressures of a big budget film, a large cast and a
huge audience of potential critics, Abrams kept his cool throughout
production, another rarity amongst Directors.)
5. Putting round pegs in round holes… getting the most out of your team is paramount (so to speak).
(Don’t ask your team members to go to Mars without providing them with a
rocket ship. Abrams wanted to add more life to the film using light
flares. These were produced using a simple device—manually shining
flashlights into the lens at key intervals. JJ did a lot of that himself
during the shooting of the film; then he taught others how to do it and
complimented them when they did it right; he got in the trenches with
his team and made things happen.)
6. Innovation is vital—magic is regularly pulled from a hat.
(JJ used an old technique—he shot the space jump and the Kirk/Sulu fall
from the Romulan platform with the actors standing on mirrors on a
sunny day. The result—a realistic sense of the actors falling head first
from the sky: cheap and effective. This is an important skill for
successful entrepreneurs who are regularly called on to innovate in the
face of ‘certain’ death of their enterprise.)
7. Doing things in the real world gives authenticity which people crave today.
(Whenever possible, JJ shot the film on location instead of on a sound
stage—initially thought to be 20/80, the released version of the film
was shot 40% on location. This opened up the film and gave it an
expansive, realistic feeling. He also used sets and puppets whenever
possible instead of green screen. Zappos.com never requires their call
centre staff to use scripts or hurry a customer off a call because of
time constraints. Clients know, understand and appreciate the fact that
they are talking to a real person who has real authority to deal with
any issues that come up during or after a transaction. For a deeper
sense of what the search for authenticity means in today’s world, read
‘Shop Class as Soulcraft: An Inquiry Into the Value of Work’ by Matthew
B. Crawford whose journey from motorcycle mechanic to PhD to head of a
high profile Think Tank and then back to motorcycle mechanic provides an
interesting perspective on this.)
8. Youth and energy count for a lot. (JJ’s joy in the doing of the thing was contagious.)
9. Pursuit of excellence is widely recognized.
(There is a market for things done very well. Design matters. Insanely
great design matters even more. Audiences loved the new film because
they recognized excellence in the script, screen writing,
cinematography, pacing, editing, acting, directing and musical score.)
10. Human spirit and life force shine through.
(Abrams shook the camera manually to give scenes a sense of random
motion and extra drama. The strange frequency of his shaking came from
inside him and produced an effect that could not be replicated by
computer or, for that matter, by anyone else on the set. People like to
deal with empathetic people. JJ’s spirit shines through the finished
product from beginning to end. In fact, at the heart of every successful
enterprise is one controlling mind, one soul pumping out instructions,
radiating feelings and providing an aura of over-arching purpose for the
team. Remove a brilliant CEO like Steve Jobs from Apple and the entire
enterprise is shaken to its foundation.)
The thought that every Founder of an enterprise should actually know
something about his or her chosen industry is not accepted everywhere.
There is one school of thought that one business is pretty much like
every other so that a successful executive in one can be successfully
transplanted to a completely different type of industry. But for every
Tony Hsieh, who knew nothing about selling shoes but made Zappos.com a
huge success, or every Lou Gerstner, who went from Soup to Tech
(Campbell’s to IBM) and did well at both, you have hundreds of Mike
Zafirovskis who went from Cell Phones to Switches (Motorola to Nortel)
and flopped horribly.
It is my view that you do, in fact, have to know something about
making films before you can make a great one and this is just as true in
the grocery business, the transport sector or any part of the tech
industry. It’s no fluke that Facebook is humongous and Harvard Connect
is just a lawsuit. Mark Zuckerberg knew something about coding while the
Winklevoss twins knew zip*.
Closer to home, Tobi Lutke is a top Ruby on Rails developer and it is
no fluke that he is co-founder of the fastest growing e-commerce
platform anywhere on the web (Shopify.com**).
Michael E. Gerber in his classic book, The E-Myth Revisited: Why Most
Small Businesses Don’t Work and What to Do About It (HarperCollins, NY,
1995) apparently argues that you should work on your business not in
your business. He puts it this way: “… small businesses in the United
States simply do not work; the people who own them do.”
I have found that when the Founder stops getting in the trenches with
his or her team, the enterprise will inevitably hit some rough weather.
Gerber says that every enterprise needs some combination of
entrepreneur (providing vision and an agent for change), manager
(bringing order to the business and cleaning up messes made by the
entrepreneur) and technician (the one who actually performs the work).
Gerber is right about this but where I find fault is with the idea
that the Founder can delegate any two of these. If the Founder is an
entrepreneur at heart, he or she must have some technical expertise and
some management chops as well. That doesn’t mean that they can’t ‘hire
up’– bring in people who are better managers or better technically than
they are. It just means they can never absent themselves from any of
these crucial components because, when well executed, these together
create an opportunity for any organisation to have some success.
You can be sure that Lou Gerstner at IBM immersed himself in their
technology and understood it well enough to: a) approve innovative
projects and stop bad ones and b) come up with his own thoughts on new
directions including new technological directions for the company.
In my career, I have almost always made money in real estate,
something I know a bit about. I have a PhD in Urban Economics and 28
years of on-the-job experience. In everything else (hockey, newspaper
publishing, finance company, sign company, toy and game firm and more), I
lost money. You have to wonder why it took me so long but now I carry a
piece of paper in my briefcase that says:
“It’s Real Estate, Stupid.”
“It’s Real Estate, Stupid.”
“It’s Real Estate, Stupid.”
“It’s Real Estate, Stupid.”
Really.
Prof Bruce
(* To read more about this, please see: https://www.eqjournalblog.com/?p=1884.)
(** The story of Shopify.com is written up at: https://www.eqjournalblog.com/?p=2171.)
Prof Bruce @ 8:11 am
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Value Differentiation and ‘Pixie Dust’
Posted on
Sunday 11 July 2010
A Case Study of the Perceived Value of An Architecture Degree, Carleton University, Ottawa, Canada
I wrote the following article more than ten years ago. At that time,
we made an effort to determine the rate of return on tertiary education,
namely, the value of an architecture degree from Carleton University.
Depending on our assumptions, we found that the IRR (Internal Rate of
Return) was in the range of 9.2% to 14.4% p.a.
More recently, a Seattle-based company (PayScale) estimated that the
30-year return on investment for students graduating from US Colleges
(they included more than 550 institutions in their sample) was 9% p.a.,
obviously similar in scale to the study we did from 1997 to 1998.
At the time, we were surprised to find that the IRR of education was
significantly below student personal discount rates (typically more than
20% as students predictably value ‘a dollar today much more highly than
a dollar received tomorrow’.) This finding would still appear to be as
valid today as it was in 1999.
This has some important policy implications for governments, higher
education institutions and parents: young people want to enroll in
Colleges and Universities, at least in part, for non-financial reasons.
After all, if their motivations were solely financial, they would follow
their own imperatives and just get a paying JOB as soon as possible and
not forgo significant wages for four or five years while attending
University. For Carleton’s SOA, that wait in 1999 was even longer: five
years for a B. Arch. and two years for a M. Arch. (Today, students can
do it one year faster: four at the Undergrad level and two at the
Master’s level.)
It is possible that students everywhere are deciding to attend
university to obtain professional degrees in greater numbers, despite
the disparity between their personal discount rates and the rate of
return on tertiary education, because they fear that, without a higher
degree, they will be left further behind as the divergence in incomes
between those with university-level education and those with High School
becomes more pronounced. They may also fear disruption in income in
future years since joblessness in lower skilled occupations is generally
higher and they are more subject to layoffs and other market changes
such as increased competition from China and other developing nations in
a more closely interconnected global economy. Of course, there are also
the intangible returns from exercising one’s mind and talents to the
greatest degree possible.
In any event, there appears to be no better predictive measure of the
performance of a nation state’s economy than the proportion of the
population with tertiary education. More persons with university-level
education and more knowledge workers are important determinants of
future prosperity, more so than, say, ownership of natural resources.
Here is the work we did and published in 1999:
Why Try to Measure the Value to an Individual of their Education?
To some observers, the value of tertiary education and, indeed, all
levels of education cannot be truly measured. Education serves a wider
social purpose and so the measure of its costs and benefits may be less
important than the belief that education is a good thing. Thus,
individual and social investment in education is, ultimately, an act of
faith.
This is a view that the author subscribes to. The purpose of this
paper, however, is to measure from a student’s point of view their
perception of the value of their education. This is a factor in
determining their participation in university programs. Education is an
important national objective for almost all societies and it is
generally agreed that there are significant externalities for society as
a whole generated by increasing levels of participation in university
programs. Therefore, it is important to determine the perception by
students (and, by extension, their families) of the value of their
education since this will, in part, determine enrollment levels.
Perception of Value
Students do have a sense of the value of their education. They have a
sense of what they are gaining and losing during their university
years.
Students in the Carleton School of Architecture come from all parts
of Canada and they are joined by foreign students from overseas who make
up a significant part of undergraduate enrollment (around 15%).
Students, in this non-scientific poll we conducted, are in their
second, third and fourth years and typically range from 21 to 30 years
of age. They are mature persons with firmly held beliefs. They are
highly motivated individuals. Their sense of the value of their
education is partly based on their perception of what they expect to
earn as architects versus what they would have earned without their
degrees. It is most often based on the difference between what they
would have earned as an architect as compared to a technical position;
they are, in most cases, not comparing their futures as architects with,
say, a future as burger flippers.
Students generally have a quite accurate picture of their costs:
tuition, extra travel, books and supplies. These are costs that they
would not otherwise incur if they were in the work-a-day world instead
of studying. They also have an understanding of how much they would earn
if they were in a job instead of at school.
Further, the author has found that his students have a sense of their
own personal discount rates. The author has measured this by
administering a brief test. The students are asked to loan their
professor (in theory only) a meaningful amount of money ($1,000) for a
year. No interest payments are made. After 12 months, the students get
their principal back with an interest kicker. How much does this
‘kicker’ have to be before the students will part with their money? The
‘kicker’ is raised in increments of $50. When students feel that the
amount is high enough, they so indicate.
The results in our non-scientific poll suggest a student discount
rate of about 23% per annum. Prima facie, this tends to make sense-
students are not inclined to part with their money without the promise
of a substantial return. Students and young people generally place a
high value on cash in their jeans as opposed to a promise of future
returns. One may assume that as they grow older, their personal discount
rates may decrease somewhat but one can usefully conclude from this
data that immediate gratification plays a significant role in the
decisions taken by young people.
If the perceived rate of return on their education is found to be
less than their personal discount rates, how do they justify their
investment in their education? There is evidence in our data that a high
percentage of students also place a non-monetary value on their
education: just under 84% of the respondents indicated thusly. They feel
that continuing their education provides them with other benefits such
as expanded consciousness, quality of life improvements or less
likelihood of periods of unemployment.
Also, we found that a greater use by students of OPM (other people’s
money) in the form of student loans and parents’ funds leads to a
greater willingness to enroll in the program. Student loans are interest
free and require no principal payments while the student attends
university. With a personal discount rate of 23%, the typical student
looks at student loans as near to ‘free’ money. A student with a
personal discount rate of 23% pa., who obtains $35,000 of student loans
during a five year architecture program and begins repayment after
graduation, places a present value on the student loans of just $12,432.
The results of the survey suggest that few of the Carleton students
surveyed would place a lifetime value on their degree of less than
$12,500.
The Survey
The survey took place in calendar years 1997 and 1998. Eighty-five
questionnaires were distributed to students by students in the Real
Estate Development class. We received 58 responses.
The sample size of 58 is a significant proportion of the total number
of undergraduate students enrolled in the program (292 in 1997/98). The
16 question survey was designed to measure the perceived value (from a
student’s point of view) of an undergraduate degree in architecture for
students enrolled in the Carleton University program.
Students were told that to help us in our research into the value of
education, we needed to obtain a comparison between the ‘earnings of
Architecture Graduates, with what they would otherwise earn…’. They were
also told that we need to ‘ascertain what typical student costs are
while at the University’. Students were assured of complete
confidentiality.
Question 1 asked each student what they would be doing if they were
not studying in the School of Architecture. Included in the multiple
choice answers was ‘a) lying on a beach’. The purpose of this was to
determine if respondents were expecting to engage in non-commercial
activities during these years of their lives if they were not studying
(only one respondent was in this category).
We also included a veracity test in the questionnaire. This test
demonstrated that there was internal consistency in the survey results.
The survey did not include a question as to how much ‘free’ financial
support was obtained by the students from parents or family or other
sources. The survey attempted to measure only the amount of student
loans. The thinking behind this was to treat money from parents or other
family members as if it were the students’ own. In the event that they
did not obtain this support for their studies, the assumption was that
they would benefit from these funds in some other way (for example, by
way of assistance in purchasing a first car or home). So the money
expended was, in fact, theirs. Other researchers may wish to extend this
work by taking the opposite view.
Q12 measured the amount of student loans each student has obtained or
expected to obtain. 36 students out of 58 respondents obtained or
expected to obtain a total of $33,143 in student loans by the time of
graduation. The other 22 students either expected to have no student
loans or did not respond. For the purposes of this calculation, we did
not average down the results.
We first looked at the rate of return on investment in education on
the basis of a student with no student loans (Case A). Each dollar
invested in education was treated as equity, either cash in or money not
received from employment. In Case B, we looked at a student profile
based on binary decision tool- if students did receive student loans,
the average amount was approximately $33,000 (or $6,629 per year on
average for five years). This all or nothing (0 or 1) treatment of
student loans means that, where student loans are incurred, the equity
invested in education is reduced by $6,629 annually for each of the five
years of the program. As we will see, the favorable financial terms of
the Canadian student loan program increases the internal rate of return
on equity of a university education when compared to students who do not
participate in this government supported program. From the point of
view of the student group, the rate of return is actually somewhere in
between.
If family support was equivalent to student loans for the other non
reporting students, then the Internal Rate of Return (IRR) of education
is further boosted (see Case C). However, this could be construed as a
bogus calculation since the ‘free’ money provided by family has an
opportunity cost associated with it (at least, as far as the parents are
concerned) and, indeed, may have an opportunity cost to the student as
well if these are funds that they would otherwise obtain from their
families for other purposes.
Methodology
We used the internal rate of return to measure the value of
education. The IRR is the interest rate at which future earnings (the
difference between earnings as an architect and earnings in alternative
employment sans degree minus student loan repayments, if any) can be
discounted to today’s value such that they are exactly equal to the
investment in education discounted using the same interest rate.
Investment in education was measured by adding tuition, travel, books
and supplies costs to expected earnings lost from not being in full time
alternative employment and deducting actual earnings from part time
work.
Private sector firms target return on equity in the 14% to 22% range
with most looking for 18% to 22% p.a. With discount rates this high,
events that occur after 20 years tend to have a small impact on rates of
return. In this example, we have used a rate of 12% p.a. to discount
net benefits over the 20 to 39 year time period. The discounted value of
additional earnings (in the amount of $474,400) was added to the net
benefits of year 19. We used a 12% personal discount rate because we
felt that it was compatible with the lowering of personal discount rates
as people age.
Including earnings from the latter stages of a career had a
significant impact on the rate of return on investment in education, as
we will see in one of our sensitivity tests. Our model shows an
increasing net benefit is derived from education as time passes; so
despite substantial discounting, the later years have a significant
impact on estimates of the value of education. It truly is a lifetime
investment in human capital.
The Data
Tabulating our data from the survey yields average results as shown
below for the costs (including opportunity costs) of attending the
University in the Architecture Program.
Year Tuition Books, Supplies Travel Alternative Employment
1 $3230 $1740 $2221 $22217
2 $3424 $1482 $2283 $24400
3 $4061 $1472 $2018 $25712
4 $3994 $2105 $4530 $28584
5 $4325 $1981 $2409 $31271
6-20 nil nil nil $31271*
* We have assumed that lower skilled employment remains flat in constant dollars.
The average offsetting revenues (from part time work while attending
university) and average salary expectations after graduation are shown
below.
Year Part Time Salary Expectations Year Part Time Salary Expectations
Employment After Graduation*# Employment After Graduation*#
1 $5800 na 11 na $48402
2 $6374 na 12 na $52482
3 $6729 na 13 na $56562
4 $7004 na 14 na $60642
5 $8013 na 15 na $64722
6 na $29669 16 na $69334
7 na $33332 17 na $73947
8 na $36995 18 na $78559
9 na $40658 19 na $83172
10 na $44322 20 na $87784**
* The questionnaire asks for salary expectations upon graduation, after
five years, ten years, 20 years and just before retirement.
Interpolation is used for intervening years.
** An additional amount of $474,400 must be added; this represents the
present value (discounted at 12% p.a.) of the difference between
expected earnings as an architect and expected earnings in alternative
employment in the ensuing 20 years.
# It should be emphasized that these figures are based on the students’
expectations of future salaries. Student expectations are based on what
they expect to earn after graduation practicing not only in Canada but
also in the USA and overseas where salaries are often higher. As we will
see in the Results section below, rates of return based on these salary
expectations are in the 13% range. To the extent that Canadian
architects actually earn less, their rates of return on their investment
in their education will be lower as well.
The Results
From the above data, it is possible to calculate the rate of return
on a student’s investment in a degree in Architecture from Carleton
University over their career.
For students with no student loans and with the above profile, their IRR is 13.4% per annum (Case A).
For students who have student loans at Carleton in the School of
Architecture, their average amount of student loans (a mix of actual and
expected numbers) is $33,143 upon graduation or an average of $6,629
per year of debt. Thus, we reduce their equity investment by this amount
in years one to five and add principal and interest repayments after
graduation. The average expected interest rate on these loans is 7.4%
and the average time of repayment is nine years (this works out to
annual payments of $5,002 for nine years).
The use of student loans increases student rates of return on their education to 14.4% (Case B).
If parents give students the money equal to student loans with no
repayment expectations, the student’s IRR increases yet again to 16%
(Case C).
If we restrict our analysis to 20 years and ignore the balance of their careers, IRR drops to just 9.2%.
If parents pay all tuition, books, supplies and travel costs, the
student’s IRR is 16.1%. Our survey shows that there is a very close
correlation between these hard costs (books, supplies, extra travel and
tuition costs) and the total average amount of student loans. This
raises the confidence we have in the survey results.
The author was somewhat surprised to find the IRR of education to be
significantly below student personal discount rates. This finding has
some important policy implications for governments, higher education
institutions and parents.
There appears to be no better predictive measure of the performance
of a nation state’s economy than the proportion of the population with
tertiary education. More persons with university level education and
more knowledge workers are important determinants of future prosperity,
more so than, say, ownership of natural resources.
These facts are supported by the increasing divergence between the
earnings of university educated persons and those without a college
degree. The value of a degree is known by young people- the percentage
of high school graduates enrolling in college has increased in the USA
from 52% in 1970 to 66% today. We can hope that similar trends are
occurring in Canada as well.
Has the increase in enrollment experienced in the USA occurred in the
face of an IRR of education below personal discount rates there? One
would suppose that the IRR of architecture education in the United
States might be lower since tuition and other costs associated with
attending university there are substantially higher than comparable
Canadian universities. However, salaries for professionals also tend to
be higher in the USA so we are unable to come to any kind of informed
speculation about rates of return there.
It is also possible that students everywhere are deciding to attend
university to obtain professional degrees in greater numbers because
they fear that, without a higher degree, they will be left further
behind as the divergence in incomes become more pronounced. They may
also fear disruption in income in future years since joblessness in
lower skilled occupations is generally higher
Certain countries appear to recognize the fact that students need
encouragement to attend university. Australia and France make tertiary
education available to qualified students who are citizens for free.
Young people have very high personal discount rates- certainly higher
than the IRRs shown here. They place a very high value on immediate
gratification. They enjoy the benefits of immediate employment such as
owning a car, living independently from parents and so forth.
Anecdotally, males appear to have even higher personal discount rates
and even less tolerance for a four or five year wait for a ‘real’ pay
check. Perhaps that is, in part, why relatively fewer males and
relatively more females are enrolling at universities.
In any event, there can be no doubt that investment in human capital
has both individual benefits and significant externalities for society
as a whole. The numbers suggest that parental and family financial
support for university bound high school students is crucial to the
decision making process of young people. Parents and governments have
their responsibilities to extend support whether it is ‘free’ money,
student loans, reasonable or zero cost tuition, bursaries and
scholarships. By extending these initiatives, they are increasing the
personal rate of return on education to something closer to the
student’s personal discount rate. However, even with ‘free’ education,
only those young people who are highly motivated and willing to defer
gratification for a number of years will attend university- the
determination to succeed still must come from within.
Letter to the Editor- Do the Data Sometimes Hide the Truth?
In an article I wrote last year for ORSA, I concluded that the rate
of return on the investment students make in their degrees at Carleton’s
School of Architecture was in the order of 14% p.a. What I found
remarkable was that this was considerably less than their personal
discount rates, which we estimated were in the vicinity of 24% p.a. This
meant that students were enrolling because they were “other” directed
and motivated.
This year, my students and I considered another possible explanation
for this discrepancy. The scenario runs something like this- although
only one student polled said that he/she would, if not enrolled at the
School, spend their five years ‘lying on a beach’, it is possible that
more of these young people would, in fact, while away this time in not
very fruitful pursuits.
Students, when considering alternative employment, factor in,
subconsciously, their education. Thus, their estimates of their earning
power in alternative employment, as, for example, design/build
contractors or renovators, are higher than what would actually have
eventuated had they never attended the School. That is, they may have
spent their late teen years and early adulthood (from 19 to 23) as, say,
lift operators at Whistler, earning just enough to live and play.
If we change the model to conform with this view (i.e., their income
earned in alternative employment would be equal to their actual part
time student earnings) then, voila, the internal rate of return on their
architecture degrees becomes 23% p.a., matching their personal discount
rates to a fare-thee-well.
This might mean that the students have a better intuitive grasp of
the economic fundamentals than the model, which we originally
constructed.
Dr. Bruce M. Firestone, Adjunct Research Professor, School of Architecture, Carleton University, Ottawa, Canada. 1999.
Prof Bruce @ 7:58 am
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Sunday 4 July 2010
Recently, I spoke with a young employee of ours who was
having a hard time identifying with our mission. She felt alienated in
her job.
On the for-profit side, we run real estate and mortgage brokerages
and, on the not-for-profit side, we run an organization dedicated to
furthering education, research, mentoring, early stage funding and
incubating of startup enterprises. Most of what we do does not directly
contribute to ‘saving orphans in Africa’. I get this.
But I told her that when, say, a new pub opens that we helped with or
a new tech venture gets off the ground that hatched out of our
incubator, I do get a great feeling of pride; I am pleased that people
who might not otherwise be working, now have a job. And indirectly, we
are helping to save children since taxes paid by employees and owners
and investors help Canada do its share of good works around the Globe.
And it also warms my heart when I get a note from a former student of
mine like I did recently from Kanika Gupta who is directly working to
make the world a better place for kids.
Here is Kanika’s report on her two-year old, not-for-profit organization, Nukoko:
“Hello Prof Bruce,
It was nice to see you at CASCO on Monday night.
Below is a short description of Nukoko and why our work is important.
To break the systemic cycle of poverty and inequality, Nukoko (a
Canadian registered not-for-profit organization) works in west African
villages (which have some of the lowest female school enrollment rates)
to make primary education more accessible to girls. Through paying
school fees, purchasing books and supplies, providing teachers with
better resources, girls are now able to attend school, a fundamental
right that their families could not otherwise afford.
A large part of the program is also conducted through outreach and
awareness initiatives to educate parents and members of the villages
about the importance of girls’ schooling.
Through the efforts of Nukoko and their partnering organization
overseas, primary education is now accessible to over 500 girls in eight
different villages in Togo, thus ensuring better future livelihoods for
these girls and their families.
“If we fail to invest in girls, we not only harm them and their
future children, we also squander a golden opportunity to reduce
poverty, raise productivity, improve governance and advance global
economic progress,” Plan International.
Nukoko, which means smile in a Togolese dialect, was founded by
University of Ottawa Telfer School of Management graduate, Kanika Gupta,
and has been in existence for two years. Being an entirely youth-run
initiative with corporate supporters, Nukoko prides itself on ensuring
that 100% of all individual donations go directly towards its projects
overseas.
For more information, visit www.nukoko.org.
Kanika Gupta
Director, Nukoko
Tel: 613.983.3474 | kanika@nukoko.org | www.nukoko.org
Nukoko means smile in Togolese, and smiles are what we strive to bring to girls in Africa.
Celebrate the success of Nukoko and seek the opportunity to be the reason of a child’s educational accomplishments.”
Prof Bruce
ps. Trying to get your crew to buy in to the mission of your
organization is very important. Most people want to belong to something
bigger than themselves; when they have a feeling like that, it empowers
everyone inside the enterprise, in the supply chain, in the customer
base, even in the media and results can be astounding. Humans when they
put their mind, body and soul into a thing can achieve greatness, alone
and together*.
I am not sure if I was able to convince our young employee on this
score and, to a degree, I think that comes from the general cynicism of
our age. The modern sense of humor is based on put-downs, sarcasm,
scorn, jaded negativity and general distrust.
It takes a lot of maturity to get past this and, until a person does, I can’t see how he or she can be a useful part of society.
I understand that bad things happen to good people and that there are
bad people out there, maybe even a lot of them. But I have a theory
that no society can have a ratio of bad people to good people much
higher that 1:19 or civil society would be impossible.
If much more than 5% of the population decides that the laws of the
nation don’t apply to them, civil society can not work. Most people obey
the law, not because they are afraid not to, but because they have
chosen to do so.
If someone decides to abrogate a contract, there isn’t much that most
people can do about that since a lawyer and lawsuit are out of the
price range for the vast majority of Canadians. So we enter into
agreements on the basis of trust in each other.
If you are disappointed in business, life or love because 1 out of
every 20 people you meet are scoundrels, that is not a reason to take up
the mantel of the cynic. Just be more discriminatory: find the 19 good
folks out there and just associate with them.
(*When I worked for the Senators, I would try to be in on the last
interview for each prospective hire. Among other things, I would try to
impress on them that working for a NHL team was not unlike work pretty
much anywhere: 97% hard work, 3% glory. Maybe working with the Sens
provided a bit more glory than, say, working for a life insurance
company but still, putting on 42 events per year (home games) plus
(hopefully) some playoff games, takes a lot of work. Malcolm Gladwell
says it takes at least 10,000 hours to master a craft and, in my
experience, it takes at least that long to build a great enterprise.
Fitting in and contributing to the greater good of the organization
where you work takes time too… and commitment.)
Prof Bruce @ 4:53 pm
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Sunday 27 June 2010
Can We Predict How Many Star Trek Films Will Be Released by 2050?
And How many Bond Films Will There Be by 2050?
Learning How to Use Regression Analysis to Make Predictions
Well, we have a good Star Trek data set available to us which should permit some reasonable predictions to be made.
The first film, the pilot The Cage, was produced in 1966
(which we’ll call Year 1). Trekkers had to wait until 1979 for the next
feature film, Star Trek, The Motion Picture. Thereafter, films were
released quite regularly until a hiatus began in 2003.
In 2010, in what is now known as the franchise reboot, another film
was released (the most commercially successful of them all). The next
planned sequel release date is 2012.
So in all, we have a (nearly) 47 year history to draw on for our Star Trek Film Predictor.
A regression analysis of the data yields this equation:
No. of Star Trek Films Released = -1.2645 + 0.2941 x (Year – 1966 + 1).
This gives us the following predictions:
• By Star Date 2030: 18 films,
• By Star Date 2050: 24 films,
• By Star Date 2100: 38 films.
In graphical form, we have:
This type of analysis, apart from being fun for Trek fans, might also
serve some useful commercial purpose by informing a studio about when
it might release new films–at what intervals does it make sense to do
that.
Obviously, they would have more sophisticated tools at their disposal
such as revenue maximization and optimization programs that they can
run. But given Hollywood’s terrible record of performance, I am not sure
that anything more sophisticated actually works.
There are a lot of very smart people at work in the film industry and
yet the bulk of their movies fail miserably. So some simple regressions
and decisions that meet the three tests I have put forward for sound
decision making (that your heart, gut and head must all agree) might be
all you need.
Prof Bruce
Postscript: Oops, there is an error in the above analysis. I
originally had the next sequel’s release date in the data stream as 2013
(instead of the expected 2012). But given that anything can happen in
life, I did not correct for this discrepancy (which may not turn out to
be a discrepancy at all). So there is an inconsistency between the
graphical form shown above and the spreadsheet with the data and
analysis in it plus an inconsistency in the spreadsheet itself. I posted
the spreadsheet at: https://www.old.dramatispersonae.org/images/StarTrekFilmPredictor.xls
Anyone keen enough can correct for this error.
It could be argued as well that 2012 should not be included in the data sample at all since it has not yet happened.
In any event, the error is small and unlikely to have much impact on the predictions made here.
Postscript 2: Here are the films released (or soon to be) so far:
Star Date Year # of Films Title
1966 1 1 The Cage
1979 14 2 The Motion Picture
1981 17 3 The Wrath of Khan
1984 19 4 The Search for Spock
1986 21 5 The Voyage Home
1990 25 6 The Final Frontier
1992 27 7 The Undiscovered Country
1995 30 8 Generations
1997 32 9 First Contact
1999 34 10 Insurrection
2003 38 11 Nemesis
2010 45 12 Star Trek (Reboot)
2012 47 13 (Sequel)
Postscript 3: How about a prediction for James Bond films, another open-ended series? Well here it is:
As you can see, according to these calculations, there should be 35
films (up from 24 as of 2010) by 2030 and a whopping 66 by 2100!
The data and regression analysis are posted at: https://www.old.dramatispersonae.org/images/JamesBond2.xls.
Prof Bruce @ 4:34 pm
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Sunday 27 June 2010
More Complicated that It Looks
As a response to the toughening of mortgage rules in North America
and the collapse of individual credit ratings, more people, who want to
fully participate in their national economies as homeowners, are going
to turn to Lease-to-Own opportunities. On the surface this looks
attractive to both investors and to renters.
For investors, they:
a. acquire properties at advantageous prices in this housing downturn;
b. land great, long term tenants who are just as committed (or more so)
to maintaining and upgrading the properties they inhabit;
c. have locked in, guaranteed returns because they know the price at which they are going to sell and to whom;
d. benefit from real estate inflation, forced savings (paydown of the
mortgage by their Tenants) and superior cash on cash returns as renters
pay all costs associated with the properties (mortgage payments, realty
taxes, maintenance, utilities, insurance and condo fees (if any);
e. have even higher cashflow because Tenants also pay a monthly amount
over and above their rent which goes toward their downpayment when they
complete their purchase and sale agreement;
f. may receive a downpayment when they sign a Lease-to-Own agreement
with their Tenant which in turn may lower the equity they need to put
into the transaction in the first place.
For Tenants, they:
a. have security of tenure;
b. have time to rehabilitate their credit ratings;
c. are making monthly payments, some of which will eventually be used as their downpayment;
d. have a locked in price for the purchase of their home—so that real
estate values don’t run away from their ability to buy at some future
point in time.
But for a Canadian like me with Canadian sensibilities about fairness
and equity, all is not rosy for would-be home owners in a Lease-to-Own
program. When I looked at typical agreements of this type, I found them
to be heavily weighted in favour of the investor.
In a typical residential lease, the Landlord will pay property taxes,
most maintenance, insurance, condo fees and even some utilities. In a
Lease-To-Own scenario, the Tenant will probably be paying all of these
costs.
In addition, the monthly payment that the Tenant makes over and above
this which will eventually go towards their downpayment may be
non-refundable and bear no interest. That means that if the Tenant can
not complete the transaction (say, perhaps because they have to move to
another city due to a job-related move or their credit rating has not
bounced back enough) then they could lose their option fee.
So would a renter be better off paying lower costs on a monthly basis
and simply putting away the difference in his or her own savings
account, to be held for a future home purchase? The answer is maybe; it
depends on the Tenant’s discipline. The problem I see is that most
people, when they look at a juicy savings account, can almost always
find another use for those funds: their car/PC/music player is getting
old and my, doesn’t that Caribbean resort look nice.
In a typical commercial transaction, if you option a property at a
fixed price to be paid at some point in the future, you know you won’t
get your money back if you don’t close. You are paying for the privilege
of buying at a price determined in advance. (If you do close, most
option fees are credited to the purchase price on completion. Remember,
in entrepreneurship, there are no rules—you get what you negotiate not
what you deserve.)
But we are assuming that there is some equality in negotiating
positions between the parties, hardly the case in most residential
Lease-To-Own discussions. (The latest one I am working on involves a
woman who is a single mom with six kids.)
So when I looked more closely at these things, what I found is that
the investors benefit from most of the real estate inflation during the
Lease-to-Own period, all the cashflow and all the mortgage paydown. This
doesn’t seem fair.
So I redesigned the program and did a new spreadsheet that I think addresses these equity issues.
You can download it in .xls format from: https://www.eqjournalblog.com/LeaseToOwnSample.xls.
The property is located at: 124A Main Street, Anywhere. It was
originally bought by the investors for $275,000. They are now in the
process of selling it to their Tenant for $325,000. They estimate it
will take six years for the Tenant to put together enough money for the
downpayment by way of their monthly option fee paid to the investors as a
form of forced savings. It will also take that long for the Tenant’s
credit rating to rise to the estimated minimum 630 Beacon Score they
will need to qualify for a conventional mortgage.
In this example, the Tenant is not able to put a downpayment on
execution of their Lease-to-Own Agreement—which is usually standard in
these sorts of deals.
What my model does is:
• Buyer gets all increase in value of property (over and above agreed purchase price).
• Buyer gets credit for portion of principal paydown.
• Seller gets option fee, increased cashflow.
• Seller gets option fee exactly equal to estimated increase in property value per year.
• Buyer gets no interest on option fee paid to Seller.
• Buyer has the option to assign the Agreement.
• Agreement is registered on title to protect the interests of the Buyer.
• Buyer also has option to convert this to a share of the equity on maturity: 35.3%.
The equities I addressed above include—the Tenant (aka the Buyer) can
assign his or her Agreement. So if they get in trouble during the term
of this Agreement, they can bail and hopefully recover their monies
(deposit, if any, and option fees). Alternatively, I provided for
another exit—they can turn their deposit and option fees into a piece of
the equity at any time.
This has some salutary effects for the Tenant and the investors. The
investors never have to cut a cheque back to the Tenant—they simply
agree (at the outset and in the contract) to allow this conversion to
take effect. My calculations for this example show the Tenant is
eligible for just over a third of the equity after six years. But
remember, everything is a negotiation—it could be higher or lower,
depending on how good a negotiator you are.
For the Tenants, if life happens and they can’t close, at least they
have a stake in real property which will yield value for them when the
investor group (now including themselves) sells the home.
In my model, the Tenants (who by way of their monthly payments are
contributing to the mortgage paydown) also benefit from that. I simply
averaged their ‘ownership’ position over the six year agreement and made
a determination based on that. (Their ownership position is somewhat
overstated because I didn’t add their annual contributions in terms of
their option fees paid to the original capital base of the investors so
there is some bias in this model towards the Tenants. I leave it to the
reader to make their own judgments and ‘fix’ this if they are so
inclined. I calculated the actual conversion to equity on maturity
exactly at 35.3%.)
I also added that their Lease-to-Own Agreement could be registered on
title; this serves to protect Tenant interests. Unscrupulous investors
will not (easily) be able to sell the property out from under the
Tenant. In Ontario, leaseholders have a right to title superior to fee
simple ownership. So, as long as they meet their obligations, Tenants
can expect quiet enjoyment of their property and to benefit according to
the provisions of their Lease-to-Own Agreement.
These things are much trickier to do than one might have thought and, since there is no regulation at all in this field, it is caveat emptor.
Having said this, perhaps this post will help others explore the issues
in a more thoughtful manner and arrive at an arrangement that is fairer
to all parties. At least, that’s my hope.
Prof Bruce
Prof Bruce @ 8:54 am
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Rules? There are no rules in entrepreneurship.
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Posted on
Saturday 26 June 2010
I was thinking the other day about how fiendishly complex
the ecology of this planet is. It reminded me again of why it is
important for humans to be a bit humble in the face of many unknowns.
Just when we think experts have a thing figured out, new evidence appears that upsets accepted wisdom.
Here is my Venn Diagram on the subject:
A true expert recognizes that application of the scientific method
requires that he or she be ready to change conclusions as new evidence
becomes available.
Business ecology is nearly as complex and every startup is an
experiment until proven otherwise. That is why most market research can
not predict success or failure; products must be tested in the real
world.
Prof Bruce
Postscript: GMR (Guerrilla Market Research) has some hope of
duplicating RL (Real Life). GM Research means that you basically
convince subjects that they are making real world decisions.
For example, the software industry will sometimes announce release of
a product that does not yet exist (vaporware) to make ‘the phone ring’
and gauge a market’s size and determine the price elasticity of demand
for it.
We used this technique years ago: before we launched TCCL (Terrace
Corporate Centres Ltd., a mini office provider) we ran ads in a local
newspaper. People who called the number we provided were leaving
messages (literally) on an answering machine stashed in a cupboard. We
got a lot of calls and this helped us determine: a) that a market was
there for this type of service, b) what price point people were prepared
to accept and c) how to effectively reach our audience.
Unless you uncover a ‘magic marketing button’ that cost effectively
connects your enterprise with potential customers, your business is
dead. Using GMR, we solved all three problems including, perhaps most
importantly, the latter.
The ethics of using GMR, like GM itself, is something that each entrepreneur must wrestle with himself or herself.
Prof Bruce @ 11:15 am
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Writing, Research and Experimentation
Posted on
Sunday 20 June 2010
With Just $4,500
It can still be done. That is, young people can still buy a home with
little money down, pay less than they did when they were renting,
participate in real estate returns (inflation, forced savings and
imputed rents) and get a stake in their society through home ownership.
Here is the story of one of my students as written by her on her recently completed transaction. We have changed the names.
“What went right:
• Using a mortgage broker was a great decision. Not only did we save
our credit scores from being pinged countless times, it was also a
painless way to get the job done. We didn’t have to concern ourselves
over what was needed because the broker always kept us up to date on
what to have and when. This is especially nice since buying a house can
involve many time-consuming steps. Eliminating this one was a godsend.
• Another thing that went right was our choice of lawyer. We chose my
family lawyer (I’ll call him Ben), and although we did end up paying
more than if I had shopped around, I found that trust was much more
important than saving a few dollars. My parents have been using the same
lawyer since I was born and they have complete faith in his abilities,
which was more than enough for me.
For example, while doing the home inspection, we found that the
building had no central air conditioning, whereas the feature sheet had
said that it did. This had been a big selling point for us and we were
very disappointed. Ben had found this out the day of the inspection
through a third party and called us within an hour with legal advice as
to how to proceed. He had done some research on how much an A/C unit
costs, determined how old it would have been (had it existed) and gave
us an opinion on how the sellers could address this issue. (They ended
up giving us a $1,500 discount on the price.) He was not obliged to do
this for us but you get what you pay for! Those few extra dollars really
paid off.
What went wrong:
• It was beyond our control but the whole process was thrown off
because our sellers were being represented by a, dare I say it,
incompetent REALTOR. I will call him Joe. Joe was never available for
communications, he had knowingly misled us on the feature sheet and he
was rude and hot-headed. This not only inconvenienced us but the sellers
were also hurt when they were required to lower their price because of
the A/C issue. (Joe couldn’t even give our agent the right lock box
code. We stood outside the place for ten minutes trying variations to no
avail. Naturally, Joe didn’t answer his phone either. Lucky for us (and
the sellers), they were across the street watching us trying to get in.
They came across the road and let us in with their house key! If it
weren’t for this bit of luck, they wouldn’t have sold their home and we
wouldn’t have bought it.)
From my experience and from what I have heard, it is not that
difficult to find a good agent. The sellers found Joe while at an open
house and signed on with him immediately. I admit that is how I found my
agent as well but I did some due diligence: I researched her a little
more before signing on. It is crucial that you have a good agent or
everything can spin out of control, so do your homework!
All in all, I would recommend buying over renting to any of my
friends, almost no matter what their financial situation is. My
boyfriend once said that all you need to buy a home is: “lots of money
and patience” but I would say that the only thing you actually need is
patience. It is a lengthy process but you don’t need to be rich to go
through with it.
How we did it (and hopefully my mortgage company doesn’t get wind of
this) is through “creative accounting” … and don’t worry, it’s not
Enron’s version of creative.
I had been able to finish University without any debt, meaning I had
the majority of my $10,000 student line of credit still available to me.
The interest rate on it is quite low so I wanted to make use of it. For
the house we wanted, our down payment came to $9,000 between the two of
us, making it only $4,500 each. This is more than reasonable
considering what we’ll get from it! But unfortunately you are not
allowed to use borrowed money to make your down payment. Therefore, we
used our trusty parents to make the down payment with the promise that,
in time, the money from my line of credit will [somehow] make it into
their bank accounts. This way the mortgage company gets their money, the
bank gets their money, my parents get their money and everyone is
happy! In my eyes, $4,500 is inexpensive for such a large investment and
now we are paying less every month in mortgage payments than we ever
did on rent.
Lenore Hightower (Name changed, Ed.)”
Prof Bruce
Prof Bruce @ 5:13 pm
Filed under:
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Tips on How to Negotiate and Sell
Posted on
Sunday 13 June 2010
Plus a few Lessons from Neuro Linguistic Programming, NLP
I am not sure which is the single most important thing for an entrepreneur to do but probably the two most important are:
1. SELL, SELL, SELL.
2. CHECK, CHECK, CHECK.
You cannot really be a successful entrepreneur unless you can sell and negotiate effectively.
Obviously, you have to be able to sell to get launch clients, clients
and customers. But you also need to be able to sell your ideas to:
suppliers (to give you supplier credit, for example), above average
employees (to come to work with you), bankers (to lend you money or even
these days just to let you open an account), shareholders (who
co-invest with you), partners (who are also co-investing with you often
in the form of sweat equity), media (to get earned media exposure for
your new enterprise), directors (for sound corporate governance),
government approval agencies (licensing requirements) and just about
everyone else you come into contact with.
My late father, Professor of Economics at the University of Ottawa,
Dr. O. J. Firestone also told me that you have to check, check and check
again. There are no ‘fire and forget’ missiles in business; you have to make sure that stuff gets done.
But whether SELL, SELL, SELL is number one or CHECK, CHECK, CHECK is
number one does not really matter: successful entrepreneurs and
intrapreneurs do both, all the time.
Now one effective way to improve your sales skills is to do more of
it. Like just about everything else humans do, they get better, a lot
better, with practice. As Ben Affleck in the film, Boiler Room, said:
“ABC!” Always be Closing.
One of the salespeople at the Ottawa Senators Hockey Club when I was
there was Darren McCarthy. He came from selling at the Brick and, let me
tell you, you have to be able to sell to survive at the Brick. He was
one of the most determined salespeople I have ever met: if he ever ran
out of leads, he would open the Yellow Pages and ‘dial for dollars’. If
he went to visit a business, he might try to sell them a $100,000 (per
year) suite and a $250,000 in-ice ad but if he could not get that, he
would come out of there with something, even a 12-pack of tickets for
$600! ABC.
Now I like selling, I enjoy it. Darren did too. You are usually
better at something if you like it. Also, it helps to sell what you
love.
There are three possible answers to a question: YES, NO or MAYBE. A
‘YES’ is better than a ‘NO’ but a ‘NO’ is way better than a ‘MAYBE’.
MAYBES waste your time and your clients’ time too. If someone gives me a
‘MAYBE’, I tell them I will treat that as a ‘NO’. Sometimes (actually
quite often) they say, well, “I don’t want to say NO.” So say ‘YES!’
When you hear a ‘YES’, whip out the contract (always bring that with
you) and ask them to sign it (never be afraid to ask for the deal!).
Then thank them and get out of there. After you hear a ‘YES’, the only
thing you can do by sticking around for more talk is muck up the deal.
So get their signature on the order and make like a tree and leave.
“Selling is telling,” Mark Gencher from Brymark told me once. He is
right: selling is about providing timely information to the right person
at the right time. Remember, selling is where the money is (sales
people get paid multiples of what most marketing people get paid) and
they almost never get laid off.
If you get a ‘NO’, so what? Don’t worry about it: you will just have more time for your next client.
What are some of the things you can do to get ready to sell?
Well, for one, be prepared. I never make a cold call. I always know
something about the organization I am about to approach. The Internet
makes that pretty easy these days.
Practice too. Do not wing it.
I also use some of the skills taught by neuro linguistic programmers.
Now these techniques are quite powerful and you should never use them
inappropriately: like trying to get someone to go on a date with you who
does not want to or forcing someone into buying something they cannot
really afford. So always be ethical and protect your reputation.
But here are a few tips (some of them are somewhat contradictory: do
not worry about that. Entrepreneurs constantly deal in an environment
where they have incomplete information and ambiguity is abundant):
1. Develop your BATNA: your Best Alternative to a negotiated
Agreement. If you figure you can live without this deal, you are right
away in a better position to negotiate successfully.
2. We negotiated a long term office lease with a Toronto-based developer
and he said: “Give me a nickel!” We thought nothing of it but it turned
out that a nickel was worth more than $50,000 over the term of the
lease, so pay attention to detail.
3. Always volunteer to write up the deal: he or she who holds the pen, wields a lot of power.
4. Calibrate the other party (that is how the top Texas Hold’em Poker players almost always come out on top).
5. Read lateral eye movements (see the chart below for more on how to do this.)
6. Read body language.
7. Synchronize your breathing with the other party.
8. Mirror them and their body movements.
9. Get on the same side of the table as they are on (sometimes literally). (For more on this, see: https://www.eqjournalblog.com/?p=554.)
If, for example, you are trying to sell computer equipment, talk about
different solutions and different vendors as if they were on the other
side of the table and you are in effect providing them with consulting
services. Tell them if they do not like any of the alternatives, you
will work with them to find one that works for them.
“I hate selling,” says Serence CEO Allan Wille, “but I love helping people buy.”
10. Listen to tonality.
11. Empathize with them.
12. Ask them questions, do not tell them stuff, ask first.
13. Make the first move: do not be afraid to put your position out there
first; show confidence that you know what you are talking about. I am
never afraid to name my price first.
14. Leave something on the table for them; they will come back later and
spend it with you anyway because you treated them fairly.
15. Do not bet against yourself; if you have made a proposal that is
greeted with silence, do not lower your asking price (say). Smile and
wait for their response.
16. Try to agree on simple terms first: build some positive momentum.
17. Provide evidence to support your position.
18. KISS: Keep It Simple.
19. Tell the truth but make it the smart truth (https://www.eqjournalblog.com/?p=51). Smart truth is what lawyers call artfully ambiguous https://www.old.dramatispersonae.org/SmartTruth.htm).
20. Remember that body language is more than half of what people are
really trying to say, voice tonality is about a third and words are only
about ten percent so make your body language and tone work for you!
21. Sometimes silence is best: they will often use your silence to answer their own questions and talk themselves into a deal.
22. Smile. Be positive. Remember the ‘Law of Attraction’ is a ‘secret’
and a key to successful selling. What you think and do counts. If you
think positively you are far more likely to achieve your goals. Think
only about what you want, not what you do not want. The latter invites a
negative result.
23. Be patient. If you lose your temper, do it on purpose/never because you have really lost your patience.
24. Knowledge is power.
25. Do not agree or give in on a point too quickly or they will think
they did not get a good enough deal. This will result in either Buyer’s
remorse or Seller’s remorse and your deal probably won’t close.
26. Really know your product or service.
27. Use negative cost selling (https://www.eqjournalblog.com/?p=24):
tell them how they will make money by buying your product or service.
Do a spreadsheet from their POV not yours. Understand their business
model as well as you do your own.
28. Make sure you can demonstrate your value proposition (https://www.eqjournalblog.com/?p=24) in a compelling way using simple language and in less than two minutes.
29. Remember, you are selling them a solution to their problems: this is called, naturally enough, solution selling (https://www.eqjournalblog.com/?p=24).
30. Never take ‘No’ for an answer.
31. Make sure you do not talk all the time: listen carefully and pay
attention to their body language and tonality. You have two eyes and one
mouth, use them in that proportion.
32. Set weekly or monthly goals: do not think you can reach your sales
goals for the year in the last month or even quarter of the year.
33. Face your fears: do the tough stuff. Never take a ‘No’ personally.
You have 15 minutes to get over your disappointment about a deal you
lost.
34. You can learn something from Yoga practitioners. Before you say something, ask:
a) Is it true?
b) Is it an improvement on silence?
c) Are you going to hurt someone by saying it?
If you answered ‘no’ to any of these three questions, say nothing.
35. Never tear down a competitor, let your clients do that if they want to.
36. If you are less successful than you would like to be and want to
know who is preventing you from being a success: first look in the
mirror.
“I claim my own power and accept responsibility for my own life,” a quote from the book Chakra Meditation by Swami Saradananda, Duncan Baird Publishers, London, 2008.
Bad things happen to good people and it is easy to blame others. No
doubt others contributed to the situation in some way. But mostly, if
you are really honest with yourself, you almost certainly had a hand in
it. Stop feeling sorry for yourself and get out there and make things
happen. There is a better person inside you and, when you listen to him
or her, good things tend to happen. It is when you substitute the
judgment of others for your own, bad things may happen. Not selling
enough? Do not blame the market or lousy clients, find new, better
clients, change your niche, improve your selling skills, get more
education, add more differentiated value, change industries, whatever it
takes.
Bad things happen to good people and it is easy to blame others. No
doubt others contributed to the situation in some way. But mostly, if
you are really honest with yourself, you almost certainly had a hand in
it. Stop feeling sorry for yourself and get out there and make things
happen. There is a better person inside you and, when you listen to him
or her, good things tend to happen. It is when you substitute the
judgment of others for your own, bad things may happen. Not selling
enough? Do not blame the market or lousy clients, find new, better
clients, change your niche, improve your selling skills, get more
education, add more differentiated value, change industries, whatever it
takes.
37. Everyone in your organization is in sales.
38. Nothing is worse than when a potential client contacts your
organization and your own people don’t know much about your products and
services, especially your new products and services. Example: A
Computer Company sometimes sells vaporware like their PCs that double as
telephones.
39. Take every opportunity to sell.
40. Don’t leave without making a sale. Example: If a salesperson for the
Sens can’t sell a suite, they’ll sell four season tickets and a sign or
maybe just a couple of mini paks.
41. The best answer is ‘yes’; the second best answer is ‘no’; that last best answer is ‘maybe’.
42. Tell the potential client that you’ll take a ‘maybe’ as a
‘no’-precipitate a conclusion. Don’t get into the ‘hoop’ treatment
cycle.
43. Don’t be afraid of a ‘no’.
44. A sale is about providing timely information to the right client;
not about selling to people who don’t need your service or product.
45. A sale is not marketing.
46. When you hear a ‘yes’, stop talking, get the order book out, book
the order, thank the client and leave. You can talk your way out of deal
by talking too much.
47. Often clients will answer their own questions; so you just listen.
48. Use very opportunity to reverse sell-your Accounts Payable is a good
source of potential clients-even your accountants are in sales for you.
Example: if a plumber isn’t a Sens season ticker holder why is he or
she your plumber?
49. Protect your margins, every dime counts.
50. Sales is all about action—don’t push on a string.
51. Use the six degrees of separation to make contact with those you
need to get in touch with but don’t be afraid of just calling or showing
up. Example: ASAP Copy owner gets more orders than he delivers, because
he delivers the orders.
52. Use a bottom up not a top down sales method. Nothing is worse than
asking your President/Coach/Mentor to call the other President to make a
sale-then the line employee/manager will do everything he or she can to
torpedo it. Instead, contact the line manager and when the time is
right, your President/Coach/Mentor to make a call or send an email to
the other President raising the profile of the opportunity and
confirming the line manager’s wise choice.
53. Remember that you are not in the selling business at all—you are in
the helping-to-buy business. You are providing a solution to a client’s
problem. Example: TnT.com sells promotional products to a car dealer.
Not so. TnT.com is buying promotional products on behalf of the car
dealer to solve the dealer’s problem-how to get more people to buy their
vehicles. TnT.com buys 1000s of car fresheners and arranges for
students to give them away to owners of car repair shops, auto body
shops, car detailing places, anywhere that there will be a lot of old
clunkers. Every car that leaves gets a car freshener advertising the
dealer and the next time their car breaks down; they only have to look
at their mirror to see where they should go to buy their next new
vehicle.
54. Creativity counts.
55. People like to buy from people they like and trust.
56. Remember that pricing is an art (https://www.old.dramatispersonae.org/Pricing.htm)
not a science. Jean-Baptiste Colbert, Minister of Finance to Louis XIV
once said: “The art of taxation(a tax is a price, ed.) consists in so
plucking the goose as to obtain the largest possible amount of feathers
with the smallest possible amount of hissing.” The quote may also have
involved: “obtaining the maximum number of quills (a valuable writing
tool at the time, ed.)with the minimum amount of hissing.” Either way,
you get the point.
Here is my cheat sheet on NLP that will give you the basics for
interpreting eye movements. Top poker players do this all the time: they
calibrate their opponents (James Bond played by Daniel Craig in the
2006 film release of Casino Royale does this to Le Chiffre); they do not
play their cards, per se, they play their opponents.
When people make rational decisions, they use their prefrontal cortex
to do so. But if people think they are being treated unfairly, the
primitive part of the brain (the anterior insula) lights up similar to
when they smell a skunk or see a horrific sight. So if someone does not
like you or trust you or feels abused by you, they will not make
rational decisions. Their raw emotions overwhelm their rational
faculties. So if you do not establish rapport, you cannot sell. People
will act against their own best interests if the primordial brain is
activated so trust is a key component of selling.
Also, people make decisions more based on their fear of losses than
their perception of gains. That is why, in the prisoners dilemma, the
police always separate the co-accused. If neither confesses, they will
both spend four years in jail: total jail time for the two prisoners is
therefore eight years. If one confesses and the other does not, the
confessed criminal spends two years less a day and the holdout spends
ten years in jail: total jail time 12 years. If they both confess, they
each get six years: total jail time is again 12 years. Obviously, the
optimal solution is for neither to confess but remember, the fear of
loss (lost freedom) is weightier than their perception of gain (optimal
jail time), so there is rush to see who can confess first and get the
two year less a day sentence.
So in terms of selling, you need to not only address the upside of
any deal, but show how your client’s downside is covered. What is the
worst that can happen? I do this all the time in getting people to make
Offers to buy land or office buildings or what have you. In the real
estate industry, we almost always put in a series of conditions that
allow the Buyer to opt out if he or she finds something that is not what
they expected during their due diligence process. I tell them that all
they will have lost is some time and whatever the cost is for the due
diligence they have just completed.
“People like to buy from people they like and trust,” Dr. Bruce M. Firestone, Ottawa Canada.
Prof Bruce
Prof Bruce @ 11:57 am
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Posted on
Saturday 12 June 2010
What does it take to create a successful, large-scale
entrepreneurial organization? Can you stock it exclusively with rebels
who bring a great deal of creative energy to it? What if, instead, you
have top-down military style leadership? People who are real doers. Will
that work? Or how about having a lot of order takers on hand. Will that
help?
Here’s my Venn Diagram that explains all:
Turns out that you need a bit of all three to really build a great organization.
Prof Bruce
ps. this was inspired by friend and advisor Dave Ready, former
President of the Ottawa Senators Foundation, who told me: ‘You have good
students & good student entrepreneurs but not necessarily in the
same person.’
Prof Bruce @ 8:07 am
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What You Need to Think about Before You Purchase a Home
Posted on
Saturday 12 June 2010
A young couple recently asked me what they need to think
about before they purchase their first property. In their case, they are
posted overseas and are thinking of buying a townhome in Ottawa, partly
as an investment and partly as a backup plan for when they do return to
Ottawa.
Here is what I told them:
“Hi Sarah:
I am going to ask one of our mortgage agents to send you a list of
information she will need so that she can arrange mortgage financing for
you and Robert. So you and Robert understand, a mortgage broker gets
paid by the Lender, so her services are free to you.
I wrote a blog article ‘WHY USE A MORTGAGE BROKER’: https://www.eqjournalblog.com/?p=34.
It’s not too long and worth reading. It will explain why more than one
third of all Canadians (and more than two thirds of Americans) are using
Mortgage Agents now instead of their Banks.
Turning to real estate now, there are a number of reasons why you
might invest in real estate and a few reasons not to. At the end of the
day, it is your decision.
Basically, the reasons why you might invest in real estate include:
diversification of your asset mix, inflation protection, forced savings,
the wealth effect, cashflow and to provide yourself and your family
with a backup plan.
Some of the negatives are: your investment is illiquid, you could
have a vacancy, you could have a bad tenant, there could be surprise
maintenance required, etc. I also wrote up the arguments for and against
real estate investing on my blog at: https://www.eqjournalblog.com/?p=434.
I think to manage your downside risks, I would strongly advise you to
hire a competent property manager to manage your unit for you,
especially as you are living overseas. Most property managers don’t cost
much (~6% of your rents will go to them) but they screen tenants for
you, collect your rents for you, provide maintenance services and
generally protect the value of your investment.
Lastly, I attach a spreadsheet for you and Robert to look at: https://www.eqjournalblog.com/ResidentialSellersSpreadsheetCapRateIRR.xls.
It analyzes what you could expect from purchasing a townhouse in
Ottawa, renting it out for, say, four years and then selling it (or
moving into it if you return to Ottawa at that time). This is an
arbitrary period but you’ll get the gist of it…
(You can download it in .xls format from the above link and change
variables such as the Purchase Price, rent, closing costs, equity,
vacancy rate or Mortgage interest rate and term, and the spreadsheet
will recalculate your returns.)
This is pretty typical of Ottawa: we call it a ‘get-rich-slow’
market. We don’t get the huge increases in value like, say, Vancouver or
Toronto but we also don’t usually get huge drops either. Ottawa’s
economy is quite stable with 26,000 new jobs created this year and
employment in Ottawa-Gatineau reaching a new record of > 670,000
people employed here. (There are nearly three times as many people at
work here as live on all of your island!)
Best regards,
Prof Bruce
ps. Real Estate Brokers are also free for you since they are usually
paid by Sellers not the Buyers. You can read more about this too at: https://www.eqjournalblog.com/?p=257 and https://www.eqjournalblog.com/?p=73.”
Prof Bruce @ 7:01 am
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