SustainableWork

As time allows, I'm going to continue posting about the six steps I think people need to take for launching their own slow startup enterprise.

This post is about the second of the six steps, gathering information in a way that adds value to your idea and sustainability to the platforms you will work from.

In other words, this is about business planning and slow startup enterprises.

A slow startup focuses on creating a new enterprise with limited time and funds. These enterprises are meant to bring increasing sustainability into people's lives and the communities they live in.

The common thread among all types of enterprise, rural or urban, is the need for a map of where you're headed. In the case of a slow startup that map doesn't represent a straight line to an unchangeable goal. A slow startup map, like all great tools, offers many alternate ways of getting somewhere valuable.

The subject of business planning and creating business plans can be presented as a daunting, jargon-laden realm where only experts dwell. There are certainly some kinds of business plans that require that kind of sophistication, but they represent a small slice of the business creation pie.

A slow startup would look at three main areas of focus when building their road map:

Learn what business planning is about and how it can be used for your own personal benefit.

Learn how to find resources for your business planning.

Learn how to create a business planning map, start, then learn from what happens next.

Business planning for slow startups is not an exercise in creating a document for outside investors or approaching banks and funding agencies for loans, though it can certainly be the basis for such efforts in the future. For now, it is a process of gathering information to help make you and your enterprise competent and sustainable.

From my Business Diligence and teaching work I developed a slow startup business plan I can put online. The entrepreneurs complete it as time allows and I can jump in as needed. I've begun using it in my rural economic development work.

Slow startup planning specifically can benefit small food enterprises (SFEs) such as those we hope to nurture at the new Innovation Kitchen and other slow startups that people grow from their kitchen tables.

This isn't the place to go into all the particulars, but a slow startup business plan is meant to work in service to the entrepreneur, not outside funders. It is meant to be a roadmap that includes your specific goals, acknowledging the specific assets and hurdles you face. Great business plans are not cookie-cutter templates. They are working, living documents that entrepreneurs can use to grow personally and to grow their enterprises.

Importantly, there is a strong, wonderful movement emerging of micro-lending investment platforms focusing on person-to-person business relationships in the Kiva style. Kiva has created a transparent, highly ethical model that empowers me and hundreds of thousands of micro investors to invest and loan small amounts to innovators worldwide.

New funding/micro-loan platforms are emerging that will focus on specific types of enterprise, such as eco-tech and sustainable foods. For new and emerging entrepreneurs to benefit from this opportunity, they won't necessarily need a fixed-in-stone business plan but they will need to be able to produce and demonstrate a competent planning map.

Dwight Eisenhower said, "Plans are nothing; planning is everything." If that approach was good enough for the largest military invasion in world history, then I would suggest it's a safe approach for your slow startup.

You need to plan, act, revise, repeat. That's the essence of a great slow startup business plan.

Don't let that process dissuade you from starting. Start and build. Search out the information you'll need to know to grow. Make it personal. Make it your own. Business planning is an iterative process. One foot in front of the other on a march planned to include alternate routes. If you don't start you'll never have a map. Without a map you'll just continue to wander, or worse, never start your journey.

This isn't hard. You can do it. If you start now you can build something valuable into your life and into the fabric of the communities you live in.

Slow startups are designed to fit into your life as it's lived now. Take advantage of the help, support and tools available and begin.

Entrepreneurship represents the core of the emerging economy of the 21st century. Join that revolution and see where it takes you.

Acknowledge the time needed. Plan your map. Map your plan. Start. You can do it.


Kiva

Northern Water Snake

Labels: bootstrapping, business plans, entrepreneurship, funding, slow money, slow startups, startups, The slow start up movement

Mark and I got to talk with a wonderful group at a meeting last week in Chicago. It was a gathering of the Good Food Network of the Upper Midwest.

I got to reconnect with friends and meet people I'd only known through email. There was a wide-ranging discussion about our local food processing proposals. People in the room included universities, foundations, research institutions, food sales and distribution firms, and funding collaboratives representing local governments and large public institutional food buyers.

It was flat-out invigorating to participate. The very best parts of the discussion were the ones that pushed us hardest to justify the concept and details of our local foods processing project.

The give and take was really great. Mark and I got to disagree with each other on new stuff right in front of them. It was like doing the most fun parts of a startup in front of a live audience. I love my job.

These good folks are in a national conversation sponsored by the National Good Food Network (NGFN). This arises from the Wallace Center and Winrock International, which are all linked below.

Here is a short introduction to the NGFN: "The National Good Food Network is bringing together people from all parts of the rapidly emerging good food system – producers, buyers, distributors, advocates, investors and funders – to create a community dedicated to scaling up good food sourcing and access."

"The challenge presented by the food system is our opportunity—to revolutionize business models, develop new market relationships, and add value to traditional supply chain infrastructure, so that the growing business of good food is sown in the values of good food – all the way from farm to fork."

This was very interesting to me to be included in this larger national conversation about revolutionizing business models to meet clear market challenges. These are significant players, all well connected into the agriculture and food industries, and they are nurturing and inspiring change, not running from it. My kind of meeting. My kind of people.

As we roll out the Dirftless Foods / Iowa County Initiative, we're down to a few key details as I see it. We have a choice of doing this with largely private money or focusing on government grants. A hybrid model is likely and the implications of that decision will keenly influence the legal structure the project adopts.

Seeing how the Good Food Network is reaching across many traditionally closed boundaries to create new conversations about change and effectiveness, I feel much more confident about helping build a hybrid business model for our local foods processing facilities. They are after results not more discussion. That's what I want for this project: long-lasting, high quality results that benefit all stakeholders.

Our ideas for community sponsored development fit well into this model of a hybrid organization. We are designing a model to attract the investment from local investors and local groups, regional governments, as well as regional and national enterprises both public and private.

As the GFN says of themselves, "The National Good Food Network represents practitioners across the value chain building a new food system that rewards sustainable production, treats growers and workers fairly, improves the health of families and the wealth of communities, and meets the growing demand for healthy, green, fair, affordable food."

Sign me up. Let's get this done.

Many thanks to the Good Food Network of the Upper Midwest for a really illuminating introduction to their work and, best of all, a new way of looking at mine.



National Good Food Network

The Wallace Center

Short biography of Henry Wallace

Labels: business plans, Driftless Foods, entrepreneurship, funding, innovation, new product development, regional fair trade

I often find that some of the most important information I need finds me after I need it.

Much of the work I do in these posts is to find information that I know to be credible and useful and pass it along with the hope that it reaches you before you need it.

Here is a must-read addition to that discussion: "Rules of Thumb" by Alan Webber. Mr. Webber was the cofounder of Fast Company Magazine.

First a note about Fast Company. I was fortunate enough to be awarded a Fast Company Magazine 'Fast 50' award in 2004. It's one of the business honors I most cherish.

The Fast Company magazine that Mr. Webber cofounded was the coolest place on the planet to read about enterprise and entrepreneurship.

At the time, here is what they said about their Fast 50 winners: “The Fast 50 are the idea elite of business, individuals with the vision and personal commitment to propel their companies and industries into the future.”

What I will be forever proud of is that we won our Fast 50 award with a business of just 4 people. Highly dedicated friends, all of us passionate proponents of our cause. Dave, Mary, Dan and myself. From this core group we recycled many tens of millions of gallons of water and saved well over 10 million gallons of oil every year that used to be lost as wastewater. Dave and I were fortunate enough to be awarded 9 patents for our work. It was very heady, very fun times. However, we knew very little about promoting ourselves or telling the world about our work. Fast Company magazine found us. They understood what our little revolution was accomplishing and told the world about us.

Allen Webber's new book, "Rules of Thumb: 52 Truths for Winning at Business Without Losing Your Self" is a must-read for anyone approaching entrepreneurship or working in new and emerging enterprises. It will profoundly strengthen your will and resolve to persevere. It will shine a clear light on the pathways you need to navigate. Importantly, "Rules of Thumb" will bring you street-level wisdom about entrepreneurship that can only come from someone who has done it wisely themselves and learned the best and the worst from those of us who have worked in the field our entire lives.

"Rules of Thumb" is the best short course in entrepreneurship I have come across in decades of work as an entrepreneur.

I'll give you a few of the 'rules' in short form, then close out with one of my favorite quotes from the book.

- Learn to take "No" as a question.

- Failure isn't failing. Failure is failing to try.

- Simplicity is the new currency.

- Nothing happens until money changes hands.

- The difference between a crisis and an opportunity is when you learn about it.

All of these 'rules' and many more (52 in all) get discussed at length in "Rules of Thumb".

Among my favorite in the book is #38, 'If you want to think big, start small.' Mr. Webber is discussing Muhammad Yunus and the founding of the Grameen Bank, which has profoundly changed the world, and earned Mr. Yunus a Nobel Peace Prize along the way. Here's a quote from that section: "It started out, in other words, as a solution in a Petri dish, like so many other world-changing social projects. What it offers is an instructive model for crafting solutions that work, one that applies equally well to for-profit and not-for-profit entrepreneurs."

"Start small. Do what you can with something you care about so deeply that you simply can't not do it. Stay focused, close to the ground, rooted in everyday reality. Trust your instinct and your eyes: do what needs doing any way you can, whether the experts agree or not. Put practice ahead of theory, and results ahead of conventional wisdom."

"Start small. If it works, keep doing it. If it doesn't work, change what you're doing until you find something that does work. Start small, start with whatever is close at hand, start with something you care deeply about. But as Muhammad Yunnis [tells listeners], start."

Do you need any more permission than that? Are you waiting for more inspiration?

Among the pieces, some of the most valuable relate to raising money (#37 - 'All money is not created equal'). For anyone raising startup capital this piece is critically important.

When I read a business book, I call it a great success if I can take away one solid idea or truth I can put to work. In "Rules of Thumb", there is not a single weak piece in the entire book. Just remarkable.

Allan Webber has distilled a career working in entrepreneurship into a magnificent collection of hope and how-to.

I rarely recommend anything this enthusiastically, but "Rules of Thumb" is one of those rare gems in the world of entrepreneurship that you just need to read.



Allan Webber bio

Grameen Bank and Muhammad Yunus

Labels: boomers, bootstrapping, business plans, entrepreneurship, funding, startups, The slow start up movement

I greatly enjoy my participation in the Wisconsin Entrepreneur's Network (WEN). I'm a member, a WEN resource provider, and a big fan.

Among the cool things WEN provides in a lovely, concise digital newsletter (linked below).

A story in this week's WEN newsletter linked to a Milwaukee Journal Sentinel piece that resonated in very practical ways. It was an interview with Massachusetts Institute of Technology master mentor, Sherwin Greenblatt. Pretty cool job description.

MIT has the best track record of any academic R&D center for startups. I take that to be carefully measured, reality based, peer review results (as opposed to theory-of-the hour stuff that's in the wind right now). Granted these are mostly tech companies MIT is dealing with, but I posit that Mr. Greenblatt's results apply system-wide across all of entrepreneurship.

So what's the first thing Mr. Greenblatt wants to tell us about growing successful enterprises? Do we have to look for more grants? Do we have offer more incentives? No.

His answer is the core truth of how we can grow local, regional, national and ultimately global economies. "What's important is getting the whole community more entrepreneurial."

Here's how the article describes MIT's approach to this: "Entrepreneurs get better after they have failed once or twice. MIT doesn't give up on them if they stumble."

This is a vital to understanding the process of building entrepreneurial communities. Of course you will have failures if you enable people to take measured chances. The trick is measuring those risks carefully, and building community support for the risk takers.

The MIT program focuses on mentors as one key way to involve the community.

Mentors create paths to success that non-mentored enterprises often can't find. So a couple of quick bullet points culled from many excellent points in this article….

"The mentor approach works. Fifty companies have been launched in the MIT community; 40,000 hours of mentor time have been volunteered; 120 ventures are being actively mentored; and $550 million in capital has been raised for its mentored deals to date."

"A team of two to four mentors per deal works best because it brings in diversity of expertise and creates checks and balances on opinions rendered to the entrepreneur"

"Entrepreneurs are not kept in the mentoring program unless they are very serious, are making real progress on milestones and make a moral commitment to give back to the community if their deal flies."

"Mentors get involved because they like the social interaction with each other and take satisfaction from seeing entrepreneurs flourish. They like learning from other smart people."

"Finding the right mentors for each enterprise is a social matching exercise. The chemistry among people has to be right. If it isn't, changes are made in the mentor line-up."

(And, too often true) Some entrepreneurs are crazy; others don't listen. Neither can be helped."

The fact that the academic institution with the best track record for launching new enterprises would do it through carefully designed mentorships is wonderfully simple.

Mentors are a critical piece of the entrepreneurial equation. I've been gifted with the opportunity to work with great mentors and I know just how well great match-ups can be for all involved.

My takeaway from the MIT experience is the bigger point made by Mr. Greenblatt about what they have found works best for growing successful enterprises: What's most important is getting the whole community more entrepreneurial.

I could not agree more. This is the key to successful economic development.

What does this mean for startups and small businesses? It means you don't need permission, you need to make mistakes. You need to start, learn, and repeat.

What does this mean for communities? The most dynamic local economies have the highest startup birth rates, but they also have the highest startup death rates as well. More churn. Entrepreneurs in the local economy must be made to feel more comfortable and supported when taking appropriate, measured chances.

This leads to more economic diversity for communities. It creates more chances for citizens to create more economic independence for themselves and the regions where they live.

As the article says, don't focus on individual deals, focus on creating an entrepreneurial community.

That's a plan ALL of us can participate in.


Sign up for the Wisconsin Entrepreneur Network newsletter

Milwaukee Journal Sentinel, Mentors are key to start-ups. Posted: Mar. 21, 2009

Labels: entrepreneurship, funding, startups

I had a wonderful experience this week speaking with a group of energized citizens.

There is nothing that can focus your attention on the good in life better than hanging around with people working to make that happen.

We got to share some stories about the kinds of businesses people were starting; why people were starting them; and importantly, how energized citizens can participate and help.

I'd been thinking about a NY Times piece from this past week called "Weary of Looking for Work, Some Create Their Own".

Matt Richtel reported from San Francisco, and Jenna Wortham from New York.

It was decidedly downbeat about people being pushed into "forced entrepreneurship", as described by Mark V. Cannice, executive director of the entrepreneurship program at the University of San Francisco.

However, he also described reality as I see it, “If there is a silver lining, the large-scale downsizing from major companies will release a lot of new entrepreneurial talent and ideas — scientists, engineers, business folks now looking to do other things,” Mr. Cannice said. “It’s a Darwinian unleashing of talent into the entrepreneurial ecosystem.”

A Darwinian unleashing of talent. An unplanned opportunity to create real solutions to real problems.

I wouldn't restrict the new entrepreneurs to just those categories described above. I'd throw in all the rest of us. We all need to participate in the economy directly. We all need the opportunity to build more economic security into our lives.

So how do we help?

The NY Times article talks about the remarkable availability of resources and tools for entrepreneurship. Barriers to entry are falling away on many fronts: marketing, financing, accounting, vendors, etc.

The article also drilled down to the most pressing issue for new startups. It will seem obvious when you see it in print, but it is painfully lacking too often in the world of entrepreneurship. That is, for any enterprise to be sustainable, it has to solve real problems.

New enterprises that solve real problems must be nurtured. We need their solutions. They need our help.

That's what my new energizing friends did for me at the presentation this week. They gave me a chance to talk about nurturing the smart ones. The green ones. The problem solvers.

Most important of all, they listened and then took action steps.

Steps that will lead to a local, independent, micro-loan fund dedicated to helping new and existing enterprises nurture and grow their smart, sustainable solutions. My friends didn't just listen, they began taking concrete steps to help their local economy and in many small ways, change the world.

The economy needs and wants new smart startups and growing small businesses. There is no shortage of entrepreneurs though there are plenty of barriers to the unleashing of that talent. It's the job of all of us to break down those barriers.

It couldn't have been more exciting to be among good people taking steps to enable talent and enterprise to flourish. That's how we help.



NY Times article. "Weary of Looking for Work, Some Create Their Own", by Matt Richtel and Jenna Wortham Published March 13, 2009

Labels: entrepreneurship, funding, slow money, startups, The slow start up movement

The March 2009 Inc. magazine has a good piece by entrepreneur Joel Spolsky. I like Mr. Spolsky's work because he's a working entrepreneur and freely admits to the ups and downs and all the indecision in between.

His column is titled Start-up Static. "A new business is like a shortwave radio. You have to fiddle patiently with all the dials until you get the reception you want."

That advice has never been more true than in this rapidly changing economy. Small startups are not a rigid exercise in business planning. They are a dance of details. You need to continue to tweak, to adjust the dials, always searching for a way to make the signals stronger and your enterprise more sustainable. Anyone who tells you differently has never started up a small enterprise.

What's between the lines of this story is that you can do it too. There is no wisdom handed down from on high to those who start businesses. They are just people who have (hopefully) assessed their chances and continue to put one foot in front of the other in a way that's informed by the details of the path they are on.

In the same article Mr. Spolsky quotes Jessica Graham of Y Combinator, one of my all time favorite startup stories. Y Combinator is an investment firm / training camp / startup mentoring and empowerment platform dedicated to very small tech startups. I won't do it justice here. See the link at the end to learn more.

When asked to do a presentation, it was suggested to Jessica Graham that she might talk about why startups fail, not the usual stuff about why they would succeed.

"That would be boring, " she said. "They all fail for the same reason. People just stop working on their business."

The article continues: "As she pointed out, it's usually a collapse of motivation - everyone wanders back to civilian life. And the startup ends, not with a bang, but a whimper."

The Grahams have seen a lot and do a great deal of good for startups. They focus their energies and help on companies they have skills in (tech startups). As investors, Y Combinator puts in tiny amounts of money (almost always less than $20,000), but they also provide financial support and stability for entrepreneurs training in their highly effective startup programs.

This is a great model that can be reproduced in other fields. New entrepreneurs need small-ball money; but more importantly, they need safe cultural and financial spaces to take cover in while they launch, under the careful eyes of folks who have a stake in their success.

Why not a reproduce the Y Combinator model for firms that focus on green entrepreneurship? What about food entrepreneurs or art entrepreneurs or social entrepreneurs, and on and on? Little bits of money and lots of training, love and attention from people skilled in those arts. That's what the world of startups needs most, and the Grahams have provided a robust, reproducible model that can work in most any area of commerce we would like to develop for our regions and entire societies.

We need new forms of partnerships in the world to support this launch stage among entrepreneurs.

Perhaps we should consider calling these bare-bones startup evangelists 'Launch Directors'. Wouldn't it be cool to have Launch Directors available regionally, so that good folks emerging from the many wonderful business training programs could actually get help taking the subsequent action steps.

This is the stage where Jessica Graham from Y Combinator says, "They all fail for the same reason… everyone wanders back to civilian life."

I think that some form of public-private alliance will emerge, perhaps with the public portion supplying the bare-bones walls and roofs of the traditional incubators plus the connectivity of virtual incubators.

I think the private part of that alliance will emerge to supply the money. Not the old style slash and burn venture style investing but a 'slow money' style of investing promoted by former venture investor Woody Tasch. As Mr. Tasch puts it: "This is a call to action, a call to design new capital markets built not around extraction and consumption, but around preservation and restoration. The vision: billions of dollars a year supporting tens of thousands of independent, local-first enterprises at the base of the restorative economy."

I get to make a presentation to the Wisconsin Assembly Committee on Rural Economic Development this week. Later in the month I am honored to be able to speak at several annual meetings of groups of local focused folks in my area, most of whom have been entrepreneurs and activists of some form or another in their lives.

I'm going to talk to all of these groups about the need for new types of incubators with public-private action steps built in.

Society needs entrepreneurs, and entrepreneurs need society's support. Our job in economic development is to arrange that marriage, teach them to dance, and to empower them to enjoy and learn from their honeymoon journey.

If entrepreneurs can break through that stage, the world that finances emerging companies can take over, and we, as economic developers, can circle back to create more seed stage, local opportunities.

The world needs better startups. You need a sustainable enterprise. Now is the time to create new ways to make this happen.



Inc. Magazine article How Hard Could It Be? Start-up Static by Joel Spolsky

Y Combinator home page

About Y Combinator

Link to the Slow Money Alliance

Announcement, this Tuesday's presentation to the Wisconsin Assembly Committee on Rural Economic Development

Labels: bootstrapping, business plans, entrepreneurship, funding, innovation, new product development, platforms, startups, The slow start up movement

Anyone reading these pages over time will know that I am an advocate of creating jobs by starting new enterprises. This strategy makes our personal lives more enriching and engaged, and it also makes our communities more secure and sustainable.

I think this is especially true for rural areas.

I just found a piece released by the Federal Reserve Bank of San Francisco. It was written by Kerwin Tesdale, who teaches at New York University in the business and law departments and is President of the Community Development Venture Capital Alliance.

Community Development Venture Capital (CDVC) is a great idea. It utilizes existing private money networks to create investment capital for reasons that not only include market rate returns, but also to enhance community development goals. Some people call this double bottom line accounting. You measure the metrics by which you make the place better then you execute on those measurements as hard as you execute the numbers. Both will be required to go forward commercially in this century.

Mr. Tesdale's strategy for enhancing development in rural America is to utilize the emerging private money networks rather than rely strictly on direct investments by angel investors and government agencies.

These networks have the ability to get involved in a productive way that government and typical funding sources can't. The idea of investment capital arriving with technical and management help, delivered by people with only an agenda of your success is compelling. I would like to see it grow in my state and beyond.

Here is a nice summary of how they work…"CDVC funds focus on markets where other venture capitalists typically do not compete. Rather than participating in bidding wars for pieces of Silicon Valley high-tech firms, rural CDVC funds nurture long-term relationships with entrepreneurs in their regions. When an excellent investment opportunity arises, they have the relationship to capture the investment on attractive terms."

What I really like about all this is that there is a bunch of win-win checks and balances built into the process.

For instance, investing in CDVC funds, local banks can satisfy their obligations under the Community Reinvestment Act (CRA), but more importantly they can seed the field with a real contribution toward growing new customers within their markets.

We aren't chasing smokestacks here. That game is over. A better approach is to grow our communities by growing our own enterprises and creating our own new jobs.

As it says in Mr. Tesdell's article, "The term 'community development' evokes inner-city urban communities, where community development corporations develop low income housing and address other social needs. But the pioneers in community development venture capital are rural funds, and still many of the most experienced and accomplished CDVC funds focus on rural markets. Business development and job creation are at the heart of the rural agenda to promote economic well being."

This is an area many of us working on startups and small business development, especially in rural areas, can use to great benefit.

Many of us live well outside "the one plane rule" used by traditional venture capitalists to measure how far they would go to look at an investment.

You don't want those folks anyway. Not yet anyway. Their money is too big and the requirements placed on them by their investors will likely not match your agenda.

The deal flow through the CDVC Alliance shows a representative group of investments in the $150,000 to $250,000 range. That's a sweet spot that can be very hard to fill, especially in rural areas.

You know I'm an optimist by trade. I spent an hour on the phone with a gentleman from Milwaukee last week who was a farm kid that started his own small business in 1959. Life took many unexpected turns for him, but his enterprise gave him the platform to secure his own future and make many jobs for others. For almost 50 years now. His underlying message to me was that challenges always appear but solutions generally arrive for those willing to look for them.

I think these CDVC organizations can be a tool that grows solutions for rural and urban communities.

The world is begging for local and regional commerce. The cost of shipping alone is forcing the issue.

Wise funding sources will recognize that Community Development Venture Capital funds may be among the best tools for creating economic development in rural areas.

Let's put these CDVC tools to the test. Let's find ways as small businesses and entrepreneurs to provide them with market + returns. Your job is to show them how their funds can make money on your great ideas and your unmatched work ethic.

Of course this is hard work. But you need to know the metrics for developing your business anyway and working within private investment rules is a great way to make sure you have the data you need for them and for yourself.

Then, world, get out of the way.


Download the CDVC Strategy for Rural America article by Kerwin Tesdell. PDF

The Wisconsin Rural Enterprise Fund works statewide but primarily serves the Northwest counties in WI. Typical investments are fro $25,000 to $300,000. A nice model for the rest of the state.

The Community Development Venture Capital Alliance

Community Reinvestment Act (CRA), WIkipedia

Labels: business plans, entrepreneurship, funding, startups, The slow start up movement

I really love these photos (click to enlarge), and their stories below.

The top photo is Ms. Chantal Dolou from Togo.

The bottom photo is Mr. Allahverdy Kuliyev from Azerbaijan.

I met them through a Christmas gift I received last year. It was a gift certificate allowing me to invest the value of the gift in loans to small, independent entrepreneurs working with the organization, Kiva.

Kiva lets you lend to specific entrepreneurs in the developing world - empowering them to lift themselves out of poverty. If you like, you get to follow the stories of these entrepreneurs and track their repayment rates. When the loans are repaid, Kiva gives you the opportunity of investing that money in other entrepreneurs.

Loan requests are small by the standards of the developed world. You can sort through Kiva's introductions to aspiring entrepreneurs on their web site. After choosing one or more, you apply the amounts you wish to loan. Your loans are aggregated with those from other Kiva sponsors. When the requested loan amount is achieved, the loan is distributed to the entrepreneur.

I've posted the stories about the entrepreneurs I chose below. I especially like the photo of Ms. Chantal Dolou. I would take Ms. Dolou to any business meeting on any continent and feel confident she would succeed. I know that look. Mr. Allahverdy has a wonderful story that engaged me immediately.

The best part of that Christmas present is the news 1 year later, that both loans are nearly 100% repaid. I will soon get to look for more great stories and wonderful ideas to support. A gift of entrepreneurship that keeps on giving!

I believe Kiva is providing the world with a great service. Like all true entrepreneurs, they have found a problem and are helping fix it. In Kiva's case, the execution of that fix is very well done.

There are many other great organizations worldwide working on micro entrepreneurship and micro finance. I'm in contact with some and receive newsletters from many. I will put up posts about these in the future.

Let's also remember that there are many micro entrepreneurs among us here. In fact, they/we are everywhere.

When you make your choices for all manner of decisions, choose to support the innovators. Choose to support hard work, diligence, vigilance, and courage.

The renaissance age of entrepreneurship is here, and it's just beginning - around the world and, hopefully, around your kitchen table.


Kiva

Ms. Chantal Dolou. Ms. DOLOU, born in 1972 in Gbodjomé in the Prefecture des Lacs in southwest Togo, is single with two (02) children and one sister in her care. She comes from a very poor family and did not have the chance to pursue thorough studies. She became involved then, by her own means, in the trade of basic need food products. To strengthen her business, she benefitted from a loan of $350, which she managed well and repaid without incident. Today, this business continues to grow and necessitates increased loan capital which is unavailable.

Mr. Allahverdy Kuliyev. Allahverdy Kuliyev has been engaged in this business since 2003. Before he rented this tea-house. Having borrowed the loan amount of $400 he bought tea-pots, chairs, tables and this tea-house. He has a lot of clients. His tea-house is a small and he wants to expand the area of his place. All in Absheron region talk about the taste of his tea. Clients have rest over a traditional cup of refreshing Azerbaijani tea in his tea-house. His tea help to people to forget about their problems. He supports to his family with this business. He is 52, married, has 3 children,

Labels: entrepreneurship, funding, innovation

An interesting report was just released by an angel funding network in my home state of Wisconsin.

I focus on Micro Entrepreneurship where self funding and micro funding is the norm, but there's all kinds of early stage financing possible these days, and the game is getting more interesting by the day.

If you're in an enterprise that's considering an early stage investment round with outside investors, the news is hopeful. A rising financial tide seems to be lifting many small boats.

The two pieces of the report I find interesting are the comparisons of the overall volume of early stage investing with investments placed by the formal angel groups.

"Early-stage investing: Total early-stage investing tracked in Wisconsin rose to $102.9 million in 2006, an increase of 54 percent over 2005. The complete early-stage risk capital market includes angel networks, individual angels, informal angel groups and early-stage funds. Improvements in reporting could account for some of the increase in individual angel investments, which was a new reporting category in 2005."

"Angel investing: Angel investing in Wisconsin rose dramatically in 2006. Data from several sources confirm that angel investing in the state rose much faster than the national average, estimated at 11 percent by the University of New Hampshire Center for Venture Research. The number of Wisconsin group angel investing deals and dollars invested increased substantially in 2006 when compared to 2005. The dollar amount of network investing increased 38 percent to $7,427,170 while the number of deals rose 50 percent from 18 deals in 2005 to 27 deals in 2006."

Obviously, when you take in all early stage investors, the total will be much larger than taking just the totals from the formal angel networks. $102.9 million VS 7.4 million is quite an eye opener though.

When you work the math the average deal done by the formal angel networks is about $275,000 per deal.

Having been through these wars, I know that the larger pool of seed stage investors includes investments that are much smaller than the network angel deals.

Conclusion? If you're an enterprise that needs outside funding in small amounts, avoid the formal angel networks. You're wasting your time. However, if you're looking for smaller amounts, it appears the world is turning your way.

There is some VERY interesting news about some of the bigger venture capital firms leapfrogging both of these financing levels into the world of micro finance, but I'm saving that for another post.

In the money world of small biz financing, it's a jungle out there friends, but you can do it. The world is looking for your creativity and your drive.

Go get 'em.


Download full text at WI Angel Network (WAN)

Labels: entrepreneurship, funding

Alan Kay said “The best way to predict the future is to invent it.”

And now, my enterprising friend, there are companies set up to do nothing but invest in innovation.

Nathan Myhrvold is an innovation pioneer. He started guiding this field to some pretty interesting ground back in 2000. His company, Intellectual Ventures, is a platform for creating invention, and specifically intellectual property. These folks work in high tech, but Mr. Myhrvold speaks from a really unique bully pulpit for many of us, I believe.

In a recent interview in IP-Investor.com, Mr. Myhrvold talked about wanting his company to become a model for creating and supporting new innovations in many fields worldwide. “I think that the great business innovation in the first part of the 21st century is going to be this: treating inventions – and patents, as the specific legal form – as a first class asset”

He goes on, “If we’re successful, and if the world follows us – and I hope the world follows us – and 10 years from now there’s 50 of these funds or 100 of these funds, that will channel billions of dollars into the hands of inventors and inventing organizations.”

The way Intellectual Ventures is proceeding is controversial and exciting. I come out mostly on the side of IV. Read more from the links below to make up your own mind.

What’s reassuring for me is that, on the topic of innovation and invention Mr. Myhrvold, who specializes in bleeding edge high tech stuff, also holds very pragmatic, old school views about business innovation and growth. This leads me to conclude both his feet and his ideas are well grounded and that there’s hope in this direction.

One break from tradition I liked is IV’s rejection of the ‘not invented here’ syndrome. They acknowledge that the minimum time from conception to patent is about 3 years. I’ve found this to be true. For folks without IV’s deep pockets it can be much longer.

Their own in-house solution is to grow through external partners. According to Mr. Myhrvold, “So, in building our business, we realized that we were not going to be able to address a lot of our potential opportunities for such a long period of time, that it made sense to do a combination of both - doing our own invention and investing in others’ ... the other ones (are) already done. It’s a way of buying yourself five or six or 10 years into the future.”

Innovation is in the air, my friend. Everybody wants it. The world needs it. Patents are part of the Intellectual Venture story, but they are not necessary for everyone’s story. Start ups and early stagers need great ideas, but for most of us, there will never be a need for patents. (Intellectual property, yes, but that’s for another post.)

What I find really hopeful is that the entrepreneurship behind the innovation is in equal demand. If you can develop reproducible solutions to real problems, your enterprise can find support from many directions, public and private. If the Intellectual Ventures model thrives, it will be copied and reproduced and morphed across many industries and sectors of life.

The future is inevitable. Getting there is never easy, but the process is as inevitable as gravity. You’re going to work with the future or against it, but the future is going to happen.

Countless generations of hard working people sacrificed to get you to this renaissance moment of economic opportunity.

You can do it. Invent, innovate and create your future. If you can partner with others to get there faster and smarter, all the better. Just don’t miss the opportunity to act.

I wish you well.


Intellectual Ventures web site

The Dec 5, 2006 IP-Investors.com interview with Nathan Myhrvold is available in PDF format from the IV link above.

Business Week article July 3, 2006: Inside Nathan Myhrvold's Mysterious New Idea Machine

Alan Kay info on Wikipedia

Labels: funding, innovation, startups

I was turning wrenches with my partner Dave recently as we worked to get a recycler out the door. Normally I’m on the road peddling these devices, and it was nice to have the face time with my friend and fellow warrior.

In reminiscing about our start, Dave reminded me that 8 years ago we’d each invested a grand total of $3,000 to start our business. We now have customers on 6 continents, meaningful international awards, and a rocking business model.

The current big push for starting up enterprises typically begins with business models that require you to search for outside capital through formal business funding channels right out of the gate.

This isn't necessarily the only path to follow. Many great enterprises were created around business models that didn’t start with formal investment funding. They were started with savings or with small investments from family or friends.

My recommendation to friends starting enterprises is that it's smart to start small if you can. Start part time if you need to. There’s no shame in this at all (I put up a post about starting part time dated 5/10/05). Try to do it with your own money first. If you can’t cover all of it and if the sums are modest, you can consider small investments from people who know you. This is not the time for you and your enterprise to be courting strangers. Your seed investor(s) should only come from people who know and like you. Many start ups need more formal funding avenues. But many more do not.

If you follow this route, I’m going to suggest a method for creating sustainable investment transactions for early stagers. I call it commission venture investing. The start up model offered by commission venturing begins the repayments to your investors immediately in the form of commissions from every transaction. This creates wonderful built in feedback loops for all involved.

Diving headlong into the outside funding game is very time consuming, full of dead ends, and you can easily end up with people in your shorts you may not want there.

You’re not a bad entrepreneur if you think you can start without jumping right into the formal funding rounds. Don't accept the premise that you have to go after outside angel investors, venture capital, or state and federal grants to start an enterprise. Go try out your ideas. Test your solutions in the real world first. Learn your story. Learn to tell your story.

Get out there and make the many mistakes awaiting you. Celebrate the small victories. These will help craft the destiny of your new enterprise. Time and small scale failures are immeasurably wonderful gifts to give yourself and your start up. The creative serendipity arising from mistakes can be the most productive moments of your enterprise life. More valuable information can be learned from the gleanings of what went wrong than can ever come from happy-dancing around what went right.

However, it’s MUCH harder to work through these valuable mistakes and small victories after you’ve entered the formal business funding rounds.

If you don't have enough funds available to start, family and friends can be considered as seed funders, but only if you approach this process very carefully. The end result should be first and foremost, that after the transaction has run its course, you're still family and friends. Full transparency and full disclosure with your seed stage funders. If you can’t operate this way, stay away from your family and friends, because you don't deserve them.

Creating new enterprises with family or friends involved is an opportunity that requires strict discipline to work. Commission venture investing, with its built in immediate feedback loops, offers a scalable model that can benefit all involved.

Rather than promising repayment of the funding from profits to be earned at some future point (if your model pans out), start the payback from the first sale. By this I mean paying out an agreed upon percent of monthly revenue, not profit. Repay your funder(s) with a percent every month’s sales until everyone is made whole.

Your funder(s) see immediate results, even if small. It’s also good for your start up. Commission venture investing requires that you have a firm understanding of all your costs. If the investment payback requires that you charge more, good. At the start of your enterprise, you should be charging more anyway, I promise. Might as well include their repayment portion and get it over with. Even if your enterprise achieves toasthood, your funder(s) will have been repaid in some measure. If you make it through this investment round and everyone is paid back, you’ll be operating at a higher profitability level.

Your accounting responsibilities will require that you operate in full transparency with your funder(s). Your books will be managed by a Certified Public Accountant who is also your in house ethics committee and the core of your financial marketing program. Any intelligent investor will want the authentifications provided by a CPA.

There is also an important side benefit for the larger economy as well. Many people want to invest in entrepreneurship and innovation, but don’t feel they can for various reasons. Commission venturing allows all of us to participate down to the micro level. Funder side, enterprise side. All of it at the appropriate scale for everyone involved.

Nobel Laureate Mohammad Yunas of the Grameen Bank has shown that the micro loans his organization makes creates many wonderful sustainable enterprises. Most important, those loans are paid back at rates far better than typical bank loans.

One of the main reasons is the feedback loops Mr. Yunas and The Grameen Bank build into their loan process. Often the recipients have no experience with economics at any level, so peer involvement becomes important for all involved.

In commission venturing, I see a similar feedback loop, except appropriate for the scale of the economics involved. The funder(s) have full access to your transparent books. They get regular feedback (payments) on the progress of their investment. They want you to succeed, and you’ll be working hard and smart to do so. You will also come out of your seed stage rounds with a far less complicated ownership structure that traditional venture investment models would have created.

This is not a Luddite screed against the more formal venture capital routes. On the contrary. As your enterprise grows into the 21st century, you’ll most likely need the outside resources of angels, venture folks, development orgs, etc. When you get to that level you’ll need to have documented that you have the discipline and the track record needed to execute at the next tier. By demonstrating that you’ve ventured through the seed stage with documented, successful results, you’re earning your eBay stars, and are capable of taking the next steps.

The start up game is changing fundamentally, with over the top positive news for entrepreneurs and the economies we operate in. Many terrific new support programs are now available with more appearing daily it seems.

However, don’t consider that you are shut out of the game if you can’t muster the personal or professional resources needed to start your enterprise with institutional investors. That path is important but over-hyped for many of us.

Commission venture investing can offer a more valuable scale and a more manageable model for seed stage start ups. It creates trust, and it creates returns for your funder(s) from the first transactions. It’s exciting and helpful for all involved. It invigorates the process with a sense of ownership and pride in the enterprise that makes for a great feedback loop. It also requires good discipline from you and all your business processes, especially accounting. I think commission venture investing can evolve into a new form of early stage seed funding that will benefit everyone, from the smallest ventures and the smallest investors right up through global economies.

Don’t be intimidated by the jargon of professionals talking about entrepreneurship. Their approach can quickly intimidate anyone new to the game.

Fire up your dream. Find a problem to fix and build your enterprise around your solutions.

With good planning, you can start your enterprise your way. Kitchen tables, notebooks, pencils (with LOTS of erasers) and all the low tech, small money solutions you can muster are perfectly valid tools for launching your enterprise.

Commission venture investing can work for start ups and small investors alike, especially at the early seed stages.

Go get ‘em, friend.


Mohammed Yunas, 2006 Nobel Peace Prize winner and the wonderful Grameen Bank. You can check threir loan and payback info right from their home page. My kind of transparency. My kind of heroes.

Labels: funding, innovation

There is a lot of hype in the enterprise biz.

Everybody wants to promote new business creation and talk about the importance of emerging enterprises.

The talk is typically just that. Talk.

The intention to support new biz and emerging enterprises is honorable. Creating false hopes when there is no plan for helping is bitter.

When the sun sets and you're fighting cash flow in the dark by yourself, honorable intentions are hard to deposit in the bank.

Women entrepreneurs face start up hurdles that can be especially formidable.

I came across a nice site aimed at helping women entrepreneurs that I've linked below. The organization is called Count Me In. I don't know anyone who has used this group, but their approach looks quite good.

Count Me In specializes in making the first loans to women entrepreneurs. From $500 up to $10,000 for the second loan. The loan scoring procedure is geared toward women, which is not at all typical.

I'd recommend that my women friends who are poking at the enterprise path check out Count Me In. There is a nice set of free resources on line as well as access to information about their support and financial services.

Interestingly, their program has tapped into a free market solution for building national resources in this field by teaming with American Express and others to create a program called Make Mine A $Million (M3) which is designed to create a network of one million women-owned businesses earning $1 million in revenue by the year 2010.

This looks like the kind of help women owned start ups and emerging enterprises can turn to for real resources, not just good intentions.

I wish you and Count Me In all the best.

Count Me In

Labels: funding, startups, women entrepreneurs

I guarantee you will remember the first time you see colored bubbles.

Bubbles that kids blow, except well, blown into spectacular colors. Technicolor bubbles. A zillion pixels per inch colored bubbles. Hot pink bubbles. Neon green bubbles. Yellow and orange bubbles. And when they pop, the color and the magic disappear until you do it again. And again. And again.

Colored bubbles will be on the market early next year. And you doubted that the world is getting better...

My report from the world of invention and innovation this week leaves me slack jawed and thunderstruck with admiration.

I'd never thought of a SustainableWork Hall of Fame, but I've decided to invent one just for Tim Kehoe. I'm making Tim the first endowed chair of kitchen sink innovation. Emeritus Professor.

I bring you an enterprise story that I hope will be long told and widely celebrated.

The December '05 issue of Popular Science has a wonderful, compelling story that is important for all of us.

"Tim Kehoe has stained the whites of his eyes deep blue. He's also stained his face, his car, several bathtubs and a few dozen children. He's had to evacuate his family because he filled the house with noxious fumes. He's ruined every kitchen he's ever had. Kehoe, a 35-year-old toy inventor from St. Paul, Minnesota, has done all this in an effort to make real an idea he had more than 10 years ago, one he's been told repeatedly cannot be realized: a colored bubble."

Well, Tim did it. The first cool result is that you'll soon be able to blow brightly colored bubbles. The more important lesson from the story is that persistence, hard work, and a respect for capturing details is critical. The you-better-get-this part of the story is that we all should celebrate and support great science and engineering.

First the upside stuff. Popular Science senior associate editor Mike Haney writes, "According to one industry estimate, retailers sell around 200 million bottles annually—perhaps more than any other toy."

"If an inventor could somehow add color, though, suddenly adults might have reason to start blowing again. Picture bubbles in NFL team colors, or bubbles that match charity ribbons. The potential market would grow to include every man, woman and child. So why don't they exist?"

This is a big commercial deal. Schools, fundraising, unlimited commercial PR potential. Close your eyes and imagine bubbles to match the wedding colors. Need I say more? 200 million units of anything is a monster number. Tim and friends have the potential to lay siege to that entire number and probably sell more than that by themselves, directly and through licensing.

Meet Mr. Tim Kehoe from St. Paul, Minnesota. 10 years ago Tim conjured up colored bubbles out of thin air. Magic idea, if only you could make it work.

Tim Kehoe, wife and family have lived the life of citizen innovators ever since. Cool stuff. Scary stuff. Tedious stuff. Their stuff.

Experiments went on for years. Great stories of innovation all-nighters. Hope led to painful rejections. Products rolled out before their time rolled straight into disaster. Job life, family life, and enterprise life all swirled about like Toto in the Kansas wind for over a decade.

Tim Kehoe chased his idea in and out of self employment for over a decade. If you think there's a direct line to enterprise success like you see on TV, meet Mr. Kehoe, the real deal. His story is a truthful representation of what much of innovation and enterprise success looks like. It's a story that should be richly celebrated by all of us.

Tim's enterprise funding has gone from home-made to angel-based, and it's making his dream work. Earlier outside funding might have helped, but it also could have screwed up the end result. I think the most important part about outside funding is not about how you get the money, but when. Tim's timing here looks dead on.

Another critical part of outside funding is what the entrepreneur brings to the money. Tim brought years of struggle and determination to the table. He brought his fire which couldn't be quenched by the repeated cold showers of start up roadblocks. Importantly, Tim brought years of knowledge of what didn't work. Those failures weren't defeats. Tim used them as refinements to a great story. He kept putting one foot in front of another, always improving the idea. Whatever it took.

Passion is a biz buzz word now. Unfortunately, passion typically gets translated as smiling people talking loudly.

But Tim's case is the real thing. Passion for the idea. Passion for the story.

With that in mind, Tim brought in money and brains.

Fortunately, not just any brains. Tim connected with the wonderfully determined brain of Mr. Ram Sabnis.

Great timing for all involved. Mr. Sabnis is a PhD dye chemist with dozens of patents.

His scientific specialty, among the most specialized in the world, led him to develop an entirely new dye chemistry. Something from nothing stuff, bless him. "Nobody has made this chemistry before," Sabnis says. "All these molecules - we will make 200 or 300 to cover the spectrum — they don't exist. We have synthesized a whole new class of dyes", says Mr. Sabnis.

Ram Sabnis’ story of 60 to 100 experiments per weeks for many months is well told in this article. Great science with a wonderfully colorful, magical ending.

Will Tim and Ram ride this story straight into sure-fire success? God I hope so.

What you need to remember friend, is that it started at a kitchen sink. It's taken longer than anyone involved expected, I'd bet. I'd also bet that, looking back, they wouldn't trade any of it.

Neither would you.

In the future, whenever you see a colored bubble float by (and you WILL see a lot of them float by) remember the story of Ram Sabnis and Kitchen Sink Emeritus Professor Tim Kehoe, our first SustainableWork Hall of Fame inductee.

A really wonderful enterprise story.

Now, friend, go find your own kitchen sink.


Popular Science article by Mike Haney

Photo for this post borrowed from Popular Science Magazine article.

Labels: entrepreneurship, funding, innovation, startups