Book Launch: The Toilet Paper Entrepreneur By Mike Michalowicz

My friend and fellow entrepreneur and EO member Mike Michalowicz is launching his book today. It’s called The Toilet Paper Entrepreneur. Good luck to you Mike!

Here is a guest blog post from him about how to be a bootstrapping Toilet Paper Entrepreneur.

Are You a Toilet Paper Entrepreneur?
Guest Post By Mike Michalowicz

In garages, basements, spare rooms and even dorm rooms all across America, hard-working dreamers are launching businesses right this minute. The thought of this really gets me going.

I’m all about the underdog, the passionate entrepreneur with a small amount of cash and a huge heart. I refer to these people as Toilet Paper Entrepreneurs,  the resourceful men and women who can get by on three sheets. They find a way to make it happen, even if they are at the end of their roll.

The best ideas come from having precious few resources, and yet so often people see this as lack, an obstacle to their success. On the flip side, many businesses throw money at problems the very second the cash starts flowing in, thereby eliminating the magic of necessity.

Toilet Paper Entrepreneurs work miracles with just three sheets – or less – even when they have a warehouse full of stockpiled toilet paper. Here’s how you can too:

1. Cultivate a Powerful Foundation of Enabling Beliefs – Your most important assets are your beliefs. Firmly held beliefs that support your goal are more valuable than an Ivy League education, or even a pile of cash.
2. Work in Your Field of Passion – Building a company is not for wimps. You will need a boatload of passion for your business in order to stick with it long enough to succeed. Your competitors with a get-rich-quick agenda will give up when the going gets tough. Passionate entrepreneurs stick it out and achieve phenomenal success.
3. Slant Toward Premature Action – Do not wait for the perfect conditions to start or expand your business. Taking action early is better than taking action too late. And don’t be nervous about these lean times we are experiencing right now. This is the perfect time to start a business. With everyone waiting until the economy is ripe, the startup competition is almost non-existent.
4. Be Extremely Great at Extremely Little – Don’t fall in to the trap of the “do everything” entrepreneur. Exploit a select few of your top strengths, and outsource everything you dislike or can’t knock out of the park.
5. Use Ingenuity Over Money – Having enough money can be a hindrance, covering up potentially disastrous problems. Use ingenuity and a razor-sharp focus rather than money to create, launch, and troubleshoot. You will come up with a better idea every time.
6. Dominate a Niche – Rather than try to sell to everyone, identify a market in which you can provide better or different products or services, and then dominate it.
7. Marry Long-Term Focus with Short-Term Action – Know your destination, but don’t plan out every step of the journey beforehand. Instead, plan out the next quarter and then track your progress.
8. Be a Little Crazy – Whatever you do, don’t play by the rules. It’s the risk takers, the odd balls, who make opportunities and grasp achievement.

You don’t need angel financing, a college degree, or any experience to build the business you envision. Heck, you don’t even need a garage.

So many myths about launching and running companies hold people back from taking the next step. My goal in writing The Toilet Paper Entrepreneur was to bust through every last one of them, arming the underdogs with essential “three-sheeting” advice that will help them launch their business. And more importantly, grow that business into a multi-million dollar dream-come-true.

Mike Michalowicz is the author of The Toilet Paper Entrepreneur, available on Amazon.com and at www.TheToiletPaperEntrepreneur.com.

Here’s a video of Mike from The Big Idea.

Tom Friedman: Why We Need a Green Revolution, And How It Can Renew America

What is next after the Information Technology (IT) revolution of the last 30 years?

Well, according to Thomas Friedman, it’s the Energy Technology (ET) revolution.

Last Monday I had the chance to hear Mr. Friedman give an impassioned presentation at Duke’s Terry Sanford Institute for Public Policy. I made the following notes from Tom’s presentation about his new book, Hot, Flat, and Crowded. All of the below viewpoints are not necessarily mine, but I do very much share his stated urgency for encouraging investment in energy technology.

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The Emperor Has Lost Her Groove

Hot, Flat, and Crowded masquerades as a book about energy and the environment. In reality, it’s a book about American losing its way, losing its groove. American has lost her groove over the past 15 years due to:

1. Our reaction after 9/11–going into the Iraq War
2. The loss of a superpower competitor in the USSR
3. Our government not operating efficiently since Bush was elected

We have become the United States of Fighting Terrorism instead of the The United States of America. Our day should be July 4th not September 11th. The government in Washington D.C. simply has been unable to solve long-term multigenerational problems any longer. The U.S. is as innovative as ever, but the government is not maximizing this opportunity.

Energy Technology will have 10x the impact Information Technology had. We need a common vision. What ‘red’ was as a coordinating force in 1950, ‘green’ must be 2008. But instead of going from red to green we’ve gone from red to code red–to a politics of fear.

Meaning of the Title

The significance of the title is:

• HOT - Global warming, the climate system is sensitive. There is only 6 degrees celsius between the ice age and today.
• FLAT - The rise of the middle class all over the world
• CROWDED - Population growth. 2.6B people in 1953 when Friedman was born. 9.2B people in 2053 when he reaches 100 years old. Fuels that we are using today are expensive, exhaustible, and toxic.

The 5 Megaproblems Our World Has:

Key to the book are the five megaproblems our world has. They are:

1. Energy and Natural Resources Running Out
2. Petrodictatorship
3. Climate Change
4. Energy Poverty
5. Biodiversity Loss

1. Energy & Natural Resources Running Out When flat meets crowded, in an unsustainable world, watch out! There are skyscrapers blossoming from the desert floor in Doha, Qatar. In the 4 years since he was last there, Doha has sprouted a Manhattan. In another city you haven’t heard of, Dalian, China, they’ve also sprouted a Manhattan. That clean air initiative in Vermont was just wiped out by unsustainable growth in a place you probably haven’t heard of.

2. Petrodictatorship

This is the concept of oil revenues leading to great power for semi-elected or unelected leaders/dictators, leading to worse relations with the United States. As price of oil goes up, freedom for oil producing countries goes down. When oil was at it’s de minimus point in 1995 at $16 per barrel, the index of freedom was at its highest in countries like Nigeria, Venezuela, Russia, and Iran. As oil prices have gone up, freedom has declined.

3. Climate Change

The weather will get weirder. The droughts will get longer. The hurricanes will get bigger. There is so much CO2 being released into the atmosphere, we don’t know any more what is an act of God and what is an act of man. Did ‘we’ make Katrina or did ‘He’ make Katrina?

Al Gore should apologize to the world. He should apologize that he underestimated the problem of climate change. Due to China growing faster than initially projected, the original estimates from five years ago were too low. There’s one good thing about healthcare getting better over time–All the climate change deniers are going to live long enough to find out how wrong they were.

4. Energy Poverty

25% of the world is not yet on the electric grid. In China, every 2 weeks generates as much new electricity as sub-Saharan Africa in 1 year, excluding South Africa. Without energy you will fall behind as a society exponentially–in education, healthcare, technology. To be energy poor will be problematic–for us and for ‘them.’

5. Biodiversity Loss

We are the first generation of humans who are having to think like Noah–having to think about saving the last two pair of every species. We are losing thousands and thousands of species that will inhibit our ability to find new medicines.

Problems or Opportunities?

There are two ways to look at this list. Either they are A) Insoluble Problems or B) Incredible Opportunities.

The solution is simple: Abundant, Clean, Cheap, Reliable Electrons. The country that comes up with abundant, clean, cheap, reliable electrons will have the most global respect and the most financial success. America can be this country. We have to rethink green. We are positioned to lead this revolution. Green is the new Red, White, and Blue. Green is the new Patriotism.

The Green Revolution or The Green Party?

Some say we’re in a green revolution already. But no, we’re just having a green party. There’s never been a revolution without someone getting hurt. You’ll know the revolution is here when someone gets hurt. Not physically–but financially. Just like NCR and DataGeneral died when they did not evolve in the IT Revolution and ended up in the Great IT Heaven In The Sky. The world is flat, so change or die, adapt or die.

This is not yet a revolution. It’s a green party. I know–I’m invited to them all.

This revolution will not be easy. It will be the greatest industrial project mankind has ever undergone.

How Do We Stimulate the Revolution Before It is Too Late?

How do we go about finding solutions? We have to innovate our way out of the problem–through the American Marketplace, U.S. universities, and venture capital. We have to find the next ‘Green Google’ and ‘Green Microsoft.’

We need government stimulus however, and here’s why. In the IT Revolution, it was a greenfield opportunity. There were no microcomputers previously. There was no Internet previously. There was nothing to replace. In the ET revolution, there’s existing competition, existing competition from dirty fuels that today are slightly cheaper in the short term, but much more expensive in the long term.

In order to stimulate the start of the ET revolution the Government must force us to take into account the true full cost of dirty fuel. If we do this, we will reach the China Price–the price at which ET will scale in India and China. We need to pay the ‘fully burdened’ cost of the lights. Only the government can do this. This policy will drive immense investment in clean ET and ET will go down the price/volume curve and soon enough become cheaper than we currently pay today.

By putting in a price floor for a barrel oil, for example at $100, firms and investors will be able to make investments in ET without concern that the price will drop and in the short-term they’ll be uncompetitive and die.

By following the policy, the amount the consumer pays over the non-fully burdened cost (if it is less than $100/barrel) would go to the government in the short-term to allow them to invest in ET. This is much better than what happens currently, where the excess goes to petrodictatorships that often work against America’s interests.

Green Revolution Great for American Economy

With higher clean standards, government encouragement, and insurance that the fully burdened price will be charged, the price signals for ET will be right and investment will boom. There is only one thing more powerful than Mother Nature, and that is Father Profit.

As an example, Erie, PA has a export surplus. How does Erie, PA have an export surplus? They have a plan for GE that produces a hybrid locomotive called the EVO. It is in very high demand become it is very efficient with energy. ET is good for the American economy and our trade balance.

We must increase clean standards to force innovations. Standards and price signals matter. If we don’t have a floor under the price of oil, we can’t make investments in ET. In order to launch the Green Revolution and scale, we must do this.

Not About The Whales Anymore

All great change in history was made by optimists. The future is choice, not fate. When you put people together you put the planet together. This is not about the whales anymore. It’s about us. We are all sailing on the Mayflower again.

We must redefine green and rediscover America. $5B in VC went into ET in 2007. But $80B in VC went into IT in 2000. $5B is nothing. We need a game changer. We need standards and a fully-burdened price floor. Then investment will take off.

There’s Now Only One Green Candidate in the U.S. Election

We need the next U.S. President to be a real CEO–a Chief Energy Officer.

As President you have a big bully pulpit. We need him to use it to promote ET. This is the future for America.

I won’t say who I support for President, but let’s just say my wife supports Obama and I love my wife. There’s a guy with 13 cars and a guy with a Ford Escape Hybrid. There’s only one green candidate in this election. We had two, but McCain has changed for the worse under the influence of Drill Baby Drill. Don’t be fooled by windmills in advertisements.

We need to find abundant, cheap, clean, reliable electrons. We need to create green collar jobs–the new blue collar jobs.

How could some people be chanting, “Drill, Baby, Drill.” It’s just stupid. It’s like on the eve of the IT revolution in 1978 someone was chanting “Carbon Paper, Baby, Carbon Paper.” Our motto should be “Invent, Baby, Invent.”

How to Be a Credible Energy Activist

Utilities today are paid based on how much they use. They should be paid on how much they help you save. We need to rewrite the rules for utilities like California and Idaho have.

If you want to be an energy activist, learn what the rules are and how to change the rules. Don’t just protest.

Isn’t it BRICs Turn To Be Dirty?

Brazil, Russia, India, and China might have an argument that we’ve developed dirty for 150 years and now its their turn. I was in China speaking at a conference of auto-industry executives. I said to them, “Sure you can be dirty for the next 20 years if you want. That might save you some money. In the mean time, America’s innovation engine will revolution the world with clean electric cars that cost less and don’t require costly fuel and by the time you wake up we will eat your lunch economically. Sure, go ahead and be dirty.”

China is hiding behind us. If we move, they move.

An Earth Race

We had a Space Race. Now we need an Earth Race. An Earth Race so that man and woman can live sustainably. Without it, we’re dead.

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What Do You Think?

What are your thoughts? Is Friedman right? Does he overestimate the problem or is he right on? What do you think about the oil price floor? Please feel free to comment below.

Project Polaroid: Giving A Child Their First Picture

How do you get the attention of a large global company (Polaroid) and convince them to reverse a key strategic decision? Hopefully, like this…

The Birth of Project Polaroid

Nine months ago, in early January, I was hanging out in Charlotte with a friend of mine named Carly. Carly is just 20 and a junior at UNC-Chapel Hill. She is an entrepreneur and a social entrepreneur who runs a photography business, Carly Brantmeyer Photography. We were brainstorming. She wanted to do more than be a student and photographer. She wanted to use her talents and abilities to give back.

Carly had just returned from a Christmas family trip to Costa Rica. There, she took lots of beautiful digital photos. The children were eager to see the picture she just took of them on the back LCD display. She wanted to be able to give the children a copy of their photo, but couldn’t. There was no easy way.

She thought, “If I had a Polaroid camera with me I could give them a copy of the picture right now.”

She returned and while brainstorming at her house in January she came up with Project Polaroid. She would bring hundreds of Polaroid instant film with her to developing countries and give children a picture of themselves–something most of them would never seen before, yet alone owned.

Project Polaroid in Colombia

Carly had the opportunity to visit Colombia over the summer to try out Project Polaroid for the first time. She borrowed my Polaroid camera that was given to me as a gift in 2007 and bought some film. Here are some of the inspiring pictures she took. Take a look especially of the one of the mother, holding a picture of her beautiful young daughter for likely the first time:

Project Polaroid in Uganda

In July, I went to Uganda for a week. Carly had returned from Colombia so I got my camera back the night before. Here are some of the pictures I took.

I was able to take about 60 pictures there while in Uganda while in 4 different locations. Each time I noticed an interesting phenomenon. In one of the locations, I found myself in a small village near the Mirembe Kawomera Peace Coffee Cooperative. This place was about 30 minutes down a dirt road from Mbale, Uganda. I took my first photo of a child and gave it to her. She was very confused as to what it was. I told her to shake the picture. She then ran away, nervous it seemed.

Exactly, on the dot, 3 minutes later, a group of at least eight kids came running around the corner jumping up and down with excitement. The picture had developed! Each time I began taking photos with just one or two children. They would go away, wondering what I had gave them (most Ugandan children in villages speak little English), then come back with their whole crew just 2-3 minutes later when they realized what had been given to them. This run away, see the photo develop, and bring back more children would happen every time. Sometimes, as Carly has experienced, you get surrounded by as many as 40 or 50 children within minutes.

In the village outside of Mbale I also gave away some of the soccer jerseys and shorts that had been donated by Sports Endeavors of Hillsborough, NC, the owners of Soccer.com and Eurosport, through the U.S. Soccer Foundation Passback Program. The children created such a commotion that the villages lone police office came over hurriedly, thinking the children were stealing from the van.

Project Polaroid in Ghana

This fall semester, Carly is living and studying in Legon, Ghana at the University of Ghana, with a study abroad program from UNC. She has received a number of donations to help expand the program and has brought dozens of packs of film. Here are some of the photos she’s taken so far in Ghana:

Polaroid Will Stop Selling Polaroids in Early 2009

For background information, back in 2001, Polaroid Corporation, the makers of the famous Polaroid Cameras and instant film filed for bankruptcy. It’s assets ended up being purchased by a private investment firm, Petters Group Worldwide, in 2005.

Very unfortunately for Project Polaroid, Polaroid announced back on February 8 that it will be phasing out production of its instant film and that it will be completely off the shelves by early 2009. We were of course a bit saddened by this announcement. Polaroid will no longer sell Polaroids. It’s a travesty of sorts and will certainly make the project difficult to scale. Polaroid has said that it will be willing to license its instant film technology to another firm should another firm be interested. Here’s hoping Polaroid somehow comes across this story and they realize the immense value that Polaroid film has to their brand.

Carly writes on her detailed travel blog.

“The idea is simple. $1=1 Polaroid photo, for 1 kid, that will last a lifetime. So many children around the world have never even owned a single photo of themselves. What could be more precious of a memory than a photo of you/your family?”

How You Can Help

When she left, Carly raised money from her family and community. She was able to take a few dozen packs of film with her. A month into the trip, Carly is now running out of film. If you would like to contribute, the best way would be to mail her a pack of two of Polaroid 600 film. She would very much appreciate any help. She will be at the following address until December:

Carly Brantmeyer
University of Ghana
c/o International Programs Office
International Student Housing II
Room #127
Legon, Accra, Ghana

Update: If you’d prefer you can send them to Charlotte where Carly’s mom Lisa has offered to collect them and mail them in one package to Ghana. The address is: 14803 Davis Trace Drive, Charlotte, NC, 28227.

Overall, I am excited to see Project Polaroid in Ghana and look forward to her getting back in January and brainstorming how to scale the project to many more developing countries. Being in Uganda myself in July and seeing the impact owning a simple picture can have in the life of a child and the parents of that child has made a lasting impact on me. One of the children was 3 and didn’t have pants–just a long shirt. He lived in a thatch hut near a school Roey and I were speaking at with his brother, sister, and mother. He didn’t have pants but he was overjoyed with happiness to have the picture. Hopefully we can convince Polaroid to sponsor the project in the future and keep producing instant film.

Financial Markets: 3 Predictions

I may be wrong, BUT…

1. This is the End of the Financial Crisis–

This is the end, not the beginning, not the middle. AIG will likely get a $85B-$90B bridge loan from the Fed backed by company assets in exchange for a majority stake in the company. The Dow will continue its rise in the morning with the news of AIGs stabilization. Based on March market capitalization, AIG It is five times bigger than Lehman. AIG is the 13th largest company in the world according to the Fortune 500 versus 37 for Lehman. It is an insurance and annuities company mainly and not a broker. It affects Main St. Americans much more than Lehman did. It can’t, and won’t be liquidated.

2. Oil Is At a Bottom–

Oil is at its bottom. Remember $88.90 per barrel, the bottom today before it started rising at 2:30pm. It is the lowest we will see a barrel of oil sell for in the next fifteen years until sustainable energy technology (“ET” as Friedman calls it, “ST” as Sachs calls it) creates green power at a price/KWH that is lower than fossil fuels can and transportation fully converts to electric ( reducing global demand for oil significantly and possibly reducing the price under today’s price). Oil will trend upwards, more slowly, toward $150/barrel by the end of the decade.

3. The Dow and S&P Have Reached Their Bottom–

The DJIA has reached it’s bottom. Remember 10,742.70, the bottom today at market open. It’s the lowest you’ll see the DJIA go in your lifetime. The underlying profits and productivity of American businesses are simply too strong to justify the S&P 500 the same level it was at in December 1998, nearly ten years ago when the U.S. GDP was 58% lower than it is today (8.7T vs. 13.8T).

This graph shows the S&P 500 at the same place it was in December 1998. Today’s bottom was 1174.

I may be wrong here, BUT… I sure hope I’m not.

The Influence of Hank Greenberg on the Fed

As an aside, Hank Greenberg, a WWII hero and the former CEO of AIG for 37 years, has had quite a bit of influence on the Fed policy vis-a-vis AIG it seems. I heard him on Bloomberg radio today sounding like Mikheil Saakashvili on CNN five weeks ago when Russia was “invading” Tskhinvali. Greenberg wrote earlier today in the Financial Times:

“AIG is not an ordinary company. It has opened markets all over the world and, for more than three decades, stood at the vanguard of the liberalisation of the global trade in services. Its stock is owned directly or indirectly by millions of Americans. And it has contributed significantly to US gross domestic product directly and indirectly over the four decades of its existence. But all that is not why it should be saved. AIG has a trillion dollars in assets. It can (and always has) serviced its debt. With the right leadership, it will continue to do so. Action is needed now: AIG needs immediate help, because the threat to our financial system is real. For that reason, if private capital cannot rescue AIG, a temporary federal bridge loan – not a federal bail-out – is in order.”

The Greatest U.S. and Emerging Markets Equities Buying Opportunity of Our Lifetime

Update 10/20/08 - Looks like I was at least a month early on calling a bottom. I could have never predicted a drop to 8400. I just didn’t understand the de-leveraging process prior to watching it happen over the past month. I did love Buffett’s Op-ed from last Thursday. I’m more bullish now than ever about U.S. equities over the next 10 years. It truly is the best buying opportunity of our lifetimes for long-term investors.

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As Warren Buffett says, “Be fearful when others are greedy, and be greedy when others are fearful.”

It was a busy Sunday for Wall Street. It’s about to be a fearful Monday. This may create one of the best buying opportunities of our lifetimes.

After recently adding U.S. Trust and CountryWide into its fold, Bank of America has agreed to purchase Merrill Lynch tonight for $44B or $29 per share.

Lehman Brothers will likely declare bankruptcy on Monday morning due to it’s exposure to Credit Default Swaps and its inability to close the deal on a buy-out by Barclays. It will likely liquidate its assets in the coming weeks.

American International Group, the 18th largest company in the world, is seeking $40B in short-term liquidity from the Fed and will be announcing a restructuring on Monday morning which may including the sale of its aircraft leasing company.

In a move reminiscent of the private Long Term Capital Management bailout in 1998, ten major banks have agreed to create a $70B to $100B emergency fund to protect themselves from the results of the Lehman failure.

At a Bottom

I thought Bear Stearns was the end–then last week I thought Fannie and Freddie was the end. But now, this seems to be the official end of the financial crisis–the end to the credit market and subprime mortgage market crisis.

Tomorrow’s going to be painful day on Wall St. But for the smart Buffett-trained value-oriented buyer I’d suggest waiting about 30 minutes for the market clearing price to be establised and then buy. It may be the greatest U.S. Equities buying opportunity in our lifetime. Two years ago the Dow was at 11,500. One year ago the DOW was at 14,000. Tomorrow, the Dow may go under 11,000–for the last time in our lives. We’re at a bottom.

Buying Opportunities

Buy what? That’s a good question. I’ve never before written about equity opportunities or the positions I hold, but I’ll give it a shot. For full disclosure I currently own long shares of QQQQ, DUG, and SPY. I’m not making any recommendations to buy or sell, but instead recommending research and for you to make your own decisions.

Well, to play it safe, take a look at exchange traded index funds like SPY (S&P 500), DIA (Dow), or QQQQ (NASDAQ). They’ll track the markets and if the general markets go up in the future the value of your shares will go up.

For Higher Beta

For more risky bets look at a long financials ETF like Ultra Financials Pro (AMEX: UYG). But wait until the price resets after the first couple hours. It’s going to reset much lower when the market opens. It’s risky as AIG and WAMU remain at risk and the extent of the Lehman damage may not be immediately known, but it may provide significant upside in the next six months.

A Commodities Play

Or you could look at DIG (Ultralong Oil). Now that oil is under $100/barrel again it may be time to get back into energy for the long-term. I used a small amount of ‘theory testing funds’ in my TD Ameritrade account back in June and bought DUG (Ultrashort Oil) when oil was $130 per barrel and will hopefully sell it tomorrow with oil at $99. DUG’s near-inverse, DIG is down 48% in 90 days. It will hit a bottom as oil prices bottom out in the coming weeks.

Emerging Markets

Of course, you can always look at international opportunities. There is likely to be much more annual GDP in developing nations than in the U.S. over the next fifty years as these countries are starting from a lower base. Take a look at ADRE, an index of 50 emerging markets or BIK, which tracks the markets of Brazil, India, Russia, and China. If you want to look at China, you can take a look at individual equities like the Hong Kong Exchange or China Petroleum. Or you buy the Shanghai Composite, which is down 60% this year in a country with 8% annual GDP growth.

Don’t Forget The Last 8 Years, America

Today for the first time since April 14th 2008, John McCain has taken the lead in the average of the past week of National Polls in the U.S. Presidential Election according to RealClearPolitics.

This fact concerns me greatly due to the many domestic and foreign policy similarities John McCain has with the current U.S. President George Bush. John McCain is in the same political party as the President and voted with the President’s position 95% of the time in 2007.

During George Bush’s eight year administration we saw:

1. U.S. Debt Go Up: The U.S. National Debt increase from $5.7 trillion to $9.6 trillion (from 58% to 66% of the annual GDP).
2. U.S. Annual Deficit Go Up: A change in the U.S. annual federal deficit from a $125 billion surplus in 1999 and a $236 billion surplus in 2000 to a $412 billion deficit in 2004, a $318 billion deficit in 2005, a $248 billion deficit in 2006, and a $162 billion deficit in 2007.
3. Hurricane Katrina: 1,836 Americans die due to Hurricane Katrina, many of whom died to FEMA mismanagement before and after the storm under Mike Brown formerly the Judges and Stewards Commissioner for the International Arabian Horse Administration, from which he also was forced to resign.
4. A War on False Pretense: The invasion of Iraq based on incorrect intelligence that Iraq had weapons of mass destruction including yellowcake uranium that was known to be suspect at the time and sought out and used by Vice President Dick Cheney and Donald Rumsfeld to sell the war to the media, American people, and global community, which Colin Powell indicated later was “deliberately misleading.”
5. U.S. Deaths from War: 4,155 Americans die in combat in Iraq.
6. U.S. Wounded from War: Over 30,000 Americans wounded in combat in Iraq
7. Iraqi Deaths from War: At least 600,000 and as many as 1,200,000 excess deaths of Iraqi civilians since the July 2003 invasion (Source 1, Source 2, Source 3)
8. Revealing a CIA Agent’s Identity: The purposelful revealing of CIA Agent Valerie Plame’s indentity to the press by Dick Cheney’s Chief of Staff Scooter Libby, and the subsequent Presidential commuting of Libby’s prison sentence to a fine.
9. Suspension of Habeas Corpus: The unconstitutional suspension of the rights of Habeas Corpus including prisoners seeking relief from detention without trial.
10. Breaking of the Geneva Convention: The breaking of the laws of the the Geneva Convention, which was ratified as U.S. law, and the U.S. War Crimes Act of 1996 regarding torture in Iraqi prisons and the detainment of enemy combatants at Guantanamo.
11. Greenhouse Emissions Increase: The Kyoto Protocol, to which the U.S. is a signatory, never submitted for ratification, in part leading to higher carbon dioxide PPM to continue to increase, leading to faster increase in global temperatures, which is leading to sea levels rising and more frequent droughts and hurricanes
12. Osama Never Found: Osama Bin Laden never to be found, who is the founder and leader of Al Qaeda and the major architect of the September 11 attacks in New York, Washington, and Pennsylvania which caused the deaths of 2,974 people, 2,646 of whom were Americans.
13. Energy Prices Increasing: Gas prices increasing from a low of $1.04 in December 2002 to a high of $4.05 in June 2008 (from $1.45 at the beginning of the term in January 2001 to $3.66 as of September 1, 2008).
14. Rumsfeld’s Resignation: The hiring Secretary of Defense Donald Rumsfeld in the first Bush Administration, who responded to a question from a soldier about not having the right equipment and armor by saying, “You go to war with the army you have, not the army you want.”
15. Torture by U.S. Soldiers: The torture at Abu Ghraib prison, which included sodomy with a baton, urinating on a detainee’s leg, smearing feces on a detainee, forced masturbation, applying electric shocks to detainees, and jumping on a gunshot wounded leg.
16. The Decline of Veteran Care: The decline of Veteran Care at Walter Reed Army Medical Center.
17. Withdrawal of Miers Nomination: The nomination of Harriet Miers to the Supreme Court, who had never before been a judge and had very little experience with Constitutional Law at the time of nomination.
18. Resignation of Gonzalez: The appointment of Alberto Gonzalez as U.S. Attorney-General, forced to resign in 2007 after politically motivated firings of U.S. Attorneys, who in 2002 wrote an opinion that the Geneva Conventions prescriptions on torture did not apply to Taliban and Al Qaeda prisoners and in 2005 lobbied for the continuation of an illegal NSA wiretapping program targeting U.S. citizens without proper warrants.
19. U.S. Inflation Increase: The annual U.S. Inflation Rate go from 3.37% in January 2001 to 4.43% so far in 2008.
20. Unemployment Increase: The U.S. Unemployment Rate go from 4.2% in January 2001 to 6.1% today.

I’ll be posting more about my current views on the policies and the candidates leading up to the election.

Where I Am Coming From

For the sake of sharing where I am coming from, I am registered as an Independent and am a businessperson and entrepreneur from North Carolina. My father was an Episcopalian priest and my mother was a social worker. I am a fiscal conservative who believes in efficient government and cares about equality of opportunity and helping others. Please feel free to comment. Facts and discussion of policy and issues is very welcomed.

Endeavor - Promoting Entrepreneurship in Middle-Income Nations

A Non-Profit Profile By Humanity Campaign Writer Ebs Sutton–

Recently, a non-profit organization by the name of Endeavor was profiled in the July issue of The Economist, in an article which gave rave reviews of the group’s commitment to providing not just access to opportunity, but access to the mentoring and investment which turns opportunity into actuality.

When it comes to promoting entrepreneurialism in developing nations, Endeavor believes that a significant part of the problem is not just a lack of access to entrepreneurial possibilities, but a lack of access to the modeling and mentorship which are available in places like the United States. Endeavor seeks to address this need by using successful high-impact entrepreneurs in developing nations to select and mentor budding entrepreneurs in developing nations.

The Purpose of Endeavor

Endeavor is a non-profit organization whose vision is to change communities and countries by promoting entrepreneurship where it is needed most. Using their internal Search and Selection teams as well as panels of successful entrepreneurs from across the globe, candidates for the Endeavor program undergo a rigorous selection process which can take up to 18 months. Endeavor uses six main criteria to evaluate candidates:

• Entrepreneurial Initiative
• Business innovation
• Value and Ethics
• Role Model Potential
• Development Impact
• Fit with Endeavor

Additionally, through the course of this process, each entrepreneur is given valuable feedback and advice, whether or not they are selected. Once entrepreneurs are selected according to the criteria, they are set up with mentors and access to support and advice. Endeavor matches the entrepreneur with selected mentors who can help him or her with specific challenges faced. Some Endeavor Entrepreneurs can have over a dozen mentors.

Interview with Elmira Bayrasli

I had a chance to interview Elmira Bayrasli of Endeavor’s Outreach Team via email. She described the Endeavor process this way:

“Generally Endeavor looks for high-impact entrepreneurs who are leading companies that are generating between 500K to 20 million in revenues; and entrepreneurs who have role model potential – who will give back to their emerging market communities and not only inspire, but lead, mentor and support aspiring entrepreneurs. Endeavor Entrepreneurs generally are those who have a business that has great high-impact potential to go to scale – to create jobs, generate revenues and investment opportunities.”

The Process

Here is an image showing their selection process from their 2007 annual report:

Many selected entrepreneurs go on to become mentors themselves. Some serve as panelists or as members of local boards of directors.

Before this process even begins, Bayrasli says, Endeavor does its homework:

“Before Endeavor starts to identify and support high-impact entrepreneurs, we spend quite a bit of time building local operations. Endeavor will only launch its ‘mentor capitalist’ model for high-impact entrepreneurship in countries where there is actively backing and engagement from leading business talent and recognized leaders. These individuals form the basis for Endeavor’s local board of directors.”

Here is a graphic that shows the Endeavor “idea to impact” process:

Examples of Success

This year Wences Casares became the first Endeavor Entrepreneur to join Endeavor’s Global Board of Directors. An Argentinean entrepreneur, Casares founded Patagon, an Argentinean online brokerage; Wanako Games, a developer of video games fueled by Latin American creativity; and Lemon Bank, a Brazillian bank designed to help the poor.

Of the roughly ten Endeavor Entrepreneurs profiled on the Entrepreneur website, one in particular stood out to me. Natallie Killasy began a company called Stitch Wise which sews mine safety gear in the Gauteng Province of South Africa. After realizing how many miners were seriously and permanently injured in mining accidents, she customized sewing machines to provide work for disabled miners. The products started as protective rainwear and eventually moved into safety equipment to prevent underground collapses. According to the Endeavor website, “these products are now industry standard and are critical to the industry.”

Some Reader Criticisms

Five out of the eight responses to the article posted on The Economist expressed concern. One concern is that Endeavor is addressing the wrong issues when it comes to entrepreneurialism in developing nations. It is stated main challenges faced are not a lack of well thought out ideas or good business strategy but rather the bureaucracy, corruption, unreliable infrastructure and poor access to loans which plague most emerging economies. Another concern is the Endeavor selection process and its rigorous search for entrepreneurs already brimming with potential. The term “picking winners” appeared twice in reader feedback, seeming to imply that Endeavor has an ulterior selfish motive. If Endeavor strives to “picks winners”, one wonders, are they truly developing an entrepreneurial spirit or just helping an elite few gain their feet?

From my perspective, Endeavor appears to be effectively carrying out its mission and creating lasting positive change in developing nations. Certainly the concerns Economist readers raise regarding the “real” challenges facing entrepreneurs in developing nations are undeniable. I spent 13 years in one of the poorest, most corrupt countries in the world and witnessed the bureaucracy, unreliable infrastructure, and corruption firsthand. However, it takes one look at the Endeavor site to see the statistics supporting their success in countries such as Brazil, South Africa, Argentina, Chile, Uruguay and Mexico. Endeavor currently works in 11 countries and hopes to expand its reach to include even more.

Picking Winners

Although it may seem that Endeavor only helps an elite few, “picking winners” could be a necessary part of smart strategy. With all the possible Endeavor Entrepreneurs and limited Endeavor resources, Endeavor has to pick entrepreneurs showing the most likelihood of success. It’s about investing precious time and resources wisely it seems.

At a relatively young 11 years old, Endeavor is a welcome addition to the scene of international sustainable development.This noted, it has so far focused its work in middle-income countries like Argentina, Brazil, and Turkey and not in the most impoverished “developing countries” where arguably they could create more social value. Though certainly not the only organization addressing entrepreneurial needs in developing countries (Technoserve, for example, has a very similar purpose) Endeavor is energetic and effective in fulfilling its purpose.

A Place of Ideas: Renaissance Weekend Day One

I’m in Aspen, Colorado for an inspiring gathering over Labor Day Weekend. It’s Friday night at 10pm and the dance floor is calling–but I am driven to write first and dance later.

The gathering is called Renaissance Weekend, started by Ambassador Phillip Lader and Linda Lader in 1981. I first heard of the Weekend on my way to the Orlando airport in 2006 while serendipitiously sharing a taxi with former U.S. Congressman Martin Lancaster, the current President of the NC Community College System.

We were on our way back from the National Association of Community College Entrepreneurship (NACCE) conference. He told me how the weekend gatherings, originally in Charleston, SC over New Year’s and now in Aspen, Tuscon, and Monterey, brought together driven and accomplished people to discuss public policy, science, business, religion, and more.

I took a look at the site and saw past participants included Bill and Hillary Clinton, Alan Greenspan, Gerald Ford, Evan Bayh, Howard Dean, Bill Richardson, Janet Napolitano, Lawrence Summers, Ted Turner, Steve Case, Steve Jurvetson, Steven Colbert, and North Carolinians Terry Sanford and John Sall.

I wanted to go, but had no way in.

I heard nothing more of this gathering for two years, until this June when my friend Stever Robbins gave me a call. He nominated me to attend and wonderfully I’m now here.

Today was the first full day of Renaissance. I must say from the first day that it has been a wonderful experience so far. One of the ways the Weekends are different than any other conference is that every attendee is assigned to present briefly (for 2 minutes to everyone and then for about 10 minutes in numerous breakout panels) on either what they know most about or what they are most passionate about. This practice enables attendees to hear from experts in their field ranging from astronauts to cosmologists to entrepreneurs to neurosurgeons. At this Weekend, there are about 300 attendees.

Today I was assigned to present for 2 minutes to the group on “An Immodest Proposal - If I Could: Serious and humorous proposals on policy, work, religion, and marriage.” I then participated on a panel with six others called “Why Not Change the World? Examples and Visions of Social Entrepreneurship & Community Service.”

At noon, I experienced the most intellectually stimulating hour of my life since the panel on global peace at Fortune Brainstorm with Jeff Bezos last month. My friend and venture capitalist Nick Beim from Matrix Partners moderated a panel called “Putin’s Czarist Plan: Is His Russion a Neo-KGB State” that I hope to post about next.

Tomorrow, Saturday morning, I’m presenting for 2 minutes at 9am on “When I’m 65 - A Red Bull Generation Envisions Their Professional, Personal, & Nation’s Future,” taking the afternoon off to go white water rafting for the first time in my life on the Colorado River, then returning for a 6pm discussion, “Must There Always Be a Bottom Billion: Promise & Pitfalls of Reducing Poverty, Supporting Social Entrepreneurs, and Assisting the World’s Less Developed Nations.”

As a short aside I’ll share a fun story. This visit is my first time in Aspen and the Aspen Institute since July 2006 for Fortune Brainstorm 2006. I recall then sitting next to John McCain for 10 minutes while watching the Germany-Italy World Cup game in the lobby of Aspen Meadows and then seeing him go to the back of the lounge to speak with Vinod Khosla, ostensibly about alternative energy. Thinking she was a passerby and not knowing then who she was, I asked Cindy McCain to take a picture of Senator McCain and I. She somewhat unwillingly oblidged, but alas, the camara battery was dead and no proof exists.

This is a place of ideas and action–action that leads to making a difference in the world. I’m fortunate to be here and look forward to sharing tomorrow night how the day goes.

From their site:

“With equally distinguished participants, all Renaissance Weekends foster lively exchanges which transcend ideological, political, economic and religious differences. This eclectic, non-partisan group - CEOs, venture capitalists and entrepreneurs, Nobel Laureates and Pulitzer Prize-winning authors, artists and scientists, admirals, astronauts and Olympic athletes, judges and journalists, volunteers, diplomats and work-at-home parents, Presidents, Prime Ministers, professors and priests, Republicans, Democrats and lots of Independents, innovators from across America and several nations - has become for many an extended family.”

The dance floor is calling my name…

How to Be a Public Company CEO

I’m out here at the Pacific Crest Technology Leadership Forum in Vail, Colorado this week. The 600 attendees here are a mix of public institutional investors, hedge fund managers, investment bankers, public company analysts, venture capitalists, public company CEOs and CFOs, and private company CEOs and CFOs.

The investors are here to meet the management of the public and soon-to-be public companies and to build relationships with the people that feed them data about these companies–the analysts. The analysts are here so they can publish research on these companies to sell to the investors. The investment bankers are here to build relationships with the management of companies they hope to sell, advise on acquisitions for, take public, or do follow-on offerings for. The CEOs and CFOs are here so they can raise money from the investors and get covered by the analysts. It’s a fascinating dynamic.

I’m learning how to be public company CEO. Here are some of the things I’ve learned.

The Process of Going Public

The general process of taking your company public in the United States is:

1. Build your company to at least $40M in annual sales (the sort-of-hard ‘takes 7 years’ part).
2. Reach breakeven or profitability and have solid positive EBITDA in sight.
3. Invite investment bankers to pitch you in what’s called a ‘bake-off’
4. Buy labels and write on them the price of your cakes and cookies
5. Select two of the following ‘bulge-bracket’ investment bankers to ‘bookrun’ your initial offering of shares: Goldman Sachs, Morgan Stanley, Credit Suisse, Deutsche Bank, Merrill Lynch, Lehman Brothers, UBS, Citigroup, and JP Morgan
6. Select two to three ’boutique’ investment bankers to ‘co-lead’ your initial offering of shares such as Pacific Crest, Jeffries, Piper Jaffray, William Blair, Cowan, Needham (there are dozens and dozens)
7. These four or five banks form your ‘underwriting syndicate’ (the people who help you ‘make a market’ for the percentage of your company that you are selling to the public by taking initial orders from institutional investors).
8. Meet with your bankers to write your ‘Form S-1‘ which is a couple hundred page document detailing every part of your business, every product, every management team member, every metric, every material agreement, every options plan, every differentiation, every risk etc.
9. Determine which exchange you wish to list on. The NYSE has higher revenue requirements than the NASDAQ. The NASDAQ is weighted toward technology companies. NYSE ARCA and NYSE Euronext are also options for smaller offerings, as is the AMEX. The London Stock Exchange (AIM) is also sometimes an option, though it requires different filing steps and doesn’t presently provide the branding imprimatur or liquidity that a New York exchange does.
10. Presuming you are going public on an American exchange, file your S-1 with the Securities and Exchange Commission.
11. Publicly announce your registration and your intent to go public.
12. Respond back to the comments and questions that the SEC provides until they tell you you are good to go.
13. Determine with your bankers which metrics and the definition of each metric you will report to ‘the Street’ (the institutional investors that will buy/sell your shares and analysts which will cover your company once it’s public). You will have to report all financials (bookings, revenue, GM, COGS, Cap Ex, R&D, Sales & Marketing, General & Admin, OpEx, Net Profit, EBITDA, assets, liabilities, ARs, APs) and numbers such as customers, growth rate, ARPU, retention/churn, LTV, and CAC.
14. Work with your bankers to craft your story and prepare your slidedeck for the roadshow, emphasizing your strengths, metrics, and opportunity.
15. If the market timing is good then prepare for your roadshow. The market is rather bad right now (August 2008) for IPOs. There have been no venture-backed IPOs to date in 2008, although there will likely be a few in Q4 and many in 2009.
16. Determine your initial price per share target and how much money you wish to raise, and the percentage of the company you wish to sell to the public market.
17. Hold an ‘IPO roadshow’ in which you and your CFO visit the major U.S. cities to present to the institutional investors and mutual fund managers who may wish to purchase your shares.
18. At this point your ‘bookrunners’ will take orders for shares and help build interest among firms that they know have demand for businesses like yours.
19. Based on demand (# of orders) you and your investment bankers make a final determination on price per share, amount of shares to sell, and who to sell shares to (ideally stable investors that won’t trade out of your stock right away) the night before or the morning of the listing.
20. Ring the bell the morning of your offering and celebrate. Watch the wire of funds go into your corporate bank account. Now the work begins to properly manage expectations, overperform, and gain trust with your investors.

The Advantages to Being Public

The advantages to going public are generally greater access to capital to help grow the business, liquidity for pre-IPO shareholders (though not for at least 6 months after the offering), an ability to command a higher revenue multiple than most private companies can, and a greater level of trust and respect among larger customers or vendors.

The Disadvantages of Being Public

The disadvantages of being a publicly traded company include the 3 months of time you as CEO will have to be fully focused on going public and the 6 months your CFO will have to be fully focused on the process of going public–causing you to lose some focus on operations, having to report many of your key metrics and strategies to the public–including your competitors, having to ‘manage to the Street’ or in other words manage your results and report every quarter which sometimes causes short-term thinking, an inability to be fully flexible, the legal reporting requirements of Sarbanes-Oxley that cost around $2 million per year in compliance costs, and a requirement to be profitable or within clear visibility of profitability that sometimes can limit ability to pursue growth.

Some Tips for the Public Company CEO To Be

Here’s a few tips I’ve picked up here at the conference on being a public company CEO.

1. Manage Expectations Well: Become very good at managing expectations. As a public company CEO your job is to consistently hit or outperform your revenues and earnings per share (EPS) guidance every quarter. It takes time to develop trust with institutional investors. And if you go out saying one thing and end up not hitting that plan and doing another, it will cause turnover among your shareholder base, which will cause your share price to go down (bad). To become very good at managing expectations, make sure you have a solid financial model in place that can very accurately model future revenues, bookings, gross margins, and earnings projections. Don’t go out indicating you’ll have 10% net profits and then decide that you’re going to have 3% net profits so you can grow faster.
2. Build Relationships Before You Need Them: Just as with raising venture capital, build the relationships before you need them. Start going to the analyst and investment banker conferences at least 18 months prior to your offering and build relationships with both the ibankers and public investors. Make sure they know who you are and like you and the company story many months prior to the roadshow.
3. Pick Sticky Investors: When you are going out, you’ll decide which institutional investors get to purchase your stock and which do not. Ask in your contract with your investment bank that you significant input if not have final say as CEO. Get to know in advance which firms are long-term investors and which are not. You can use a service like the ‘Business Intelligence’ offering from Thompson Reuters to determine which institutions are looking at your deck and materials. Pick the firms that are going to hold your stock and not have high share turnover. Be wary of hedge funds who have high portfolio turnover.

Hope you enjoyed the post! I’ve still got a lot to learn so please let me know in the comments what I’ve mis-stated or altogether missed. Man I love this stuff.

Seeking Part-Time Writer for The Humanity Campaign

The Humanity Campaign is a start-up non-profit organization based in Durham, North Carolina. Its mission is to reduce poverty and hunger in developing countries by working to increase access to education, healthcare, nutrition, technology, and entrepreneurial opportunity in North Carolina and in developing countries.

The organization wishes to begin to publish content in its web site in order to raise its profile as a contributor within the field of sustainable development. To accomplish this goal, The Humanity Campaign is seeking an individual to research and write content for its web site at www.humanitycampaign.org and build a network of sources and writers in developing countries.

Topics that can be written about include, but are not limited to:

Philosophy

The organization has a philosophy that all humans have equal worth and that equality of opportunity should be encouraged. It believes that economic development does not always lead to greater happiness or prosperity if it causes environmental destruction, dependency, or materialism. It tends to favor development work that is done through local stakeholders and is sustainable. It tends to favor transparency.

The organization chooses to focus partly on North Carolina as one can often make the largest impact locally. It chooses to focus partly on the developing world as there the need is often greatest. While it is interested in writing about any country or group in the developing world, it’s area of greatest focus is Africa.

The organization believes that we have the ability to end extreme poverty in our lifetimes while ensuring we leave a world that is environmentally sound and ecologically rich.

Through the writing, the organization wishes to explore the overarching question of “what are the factors that contribute to a happier, more prosperous society” and start to build a global network of individuals who are working toward creating better and stronger communities and societies.

The eight core beliefs of the organization are:

1. All humans are created equal and have equal value
2. We should strive to create a society in which there is equal access to opportunity for all humans
3. We should strive to live in a sustainable world
4. We should respect each other and treat others as we would treat ourselves
5. There is value in education
6. We should love, not kill each other
7. We should work to eliminate extreme poverty
8. There is great power in entrepreneurship and social entrepreneurship to address the critical challenges of our time

Responsibilities

The individual hired for this position is responsible for:

Researching, writing, editing, fact-checking, and publishing content to the web site.

Working to build a network of sources in developing countries who can provide quality story ideas, photo and video content, and primary research data. We wish for the site to be a source of primary news and reporting whenever possible and over time be cited by others as a trusted source.

Working to build a network of writers in developing countries who are willing to contribute topically-relevant quality content that can be posted to the site.

Style Guidelines

Content should be written in a conversational style that engages the reader.

All facts and data should be fact checked and footnoted.

Sources should be listed unless information was provided on the condition on anonymity.

Biases or conflicts should be disclosed. Ownership of stock in any publicly traded company that is discussed should be disclosed.

All articles should have at least one picture within them.

Use of videos within posts is encouraged when possible.

Individual posts should be between 200 and 750 words.

Draft posts for story ideas can be written as drafts and saved until completed

The author of each post should be disclosed

The language that the posts should be in is English

We would like for a number of the posts to highlight people, programs, or companies that are doing exceptionally positive work in developing countries, especially those in the start-up, technology, or entrepreneurial sectors.

Examples of posts that generally fit the topical, style, and guidelines to be used on the site include:

http://www.ryanallis.com/the-opportunity-of-our-lifetimes/

http://www.ryanallis.com/1m-prize-for-best-developing-country-technology-innovation/

http://www.ryanallis.com/sustainable-capitalism/

http://www.ryanallis.com/the-superficial-luxurious-degeneration-of-america/

Requirements include

• B.S or B.A. degree from a four year accredited university
• Significant experience traveling or living in a developing country
• General alignment with the beliefs of the organization
• Excellent writing skills
• A high level of character and personal integrity
• A passion for helping others and making a difference in the world

Remuneration

Work can be paid hourly or by approved post. Compensation is market-based, negotiable, and based on experience. Hours and work is negotiable. Schedule is flexible.

For More Information

If you are interested and/or would like more information, please send resume, cover letter, writing sample, and work history to ryan[at]icontact.com. Additional information on The Humanity Campaign, Inc. can be found at www.humanitycampaign.org.

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