Regular readers of my blog will know that I quite enjoy the process of growing food. That there is much to learn from the process, and it often brings up unexpected results and analogies. Here’s another.
Last year I planted a great deal of herbs. These included basil, mint and oregano. But I had a very frustrating year. In fact, I lost more than 90% of my plants due to the heavy rain and relative increase in insects who seemed to gobble them up as soon as they sprouted. Which I would rather have happen, than use pesticides. But it did annoy me. It annoyed me to the point, where this year I didn’t bother. I didn’t plant any seeds for my summer herbs. I was cranky and decided it wasn’t worth the effort. Until yesterday, when I noticed that nature has been far more generous this year.
Without any attention, effort or otherwise, 3 little basil plants popped up, in good health.
I was pretty stoked for getting something for nothing, until I realised it was simply a delayed reaction. In fact, last year I put in a lot of effort for very little return, and this year I quit. Turns out I quit too early. Imagine the yield I would have received with just a little more effort than none at all? It would have been a bumper crop (as far as you can have a bumper crop in four pots on a decking).
There are a couple of clear take outs for me:
- Nature doesn’t work to our timeline, it has its own.
- Yield is not always seasonal.
- We eventually reap all that we sow.
- The birds will always get some…
- Stay the course, it is usually longer than we estimate.
- When flower blossom, it’s not too late to start working the field again.
All startup entrepreneurs should learn through the art of growing food.
There is no point being a successful entrepreneur, or selling a startup if we have no idea how to handle the money we get. So here is my top 10 financial life hacks.
- Spend less than you earn, no matter what that amount is. The net result is happiness.
- Allocate cash to savings & investments before anything the day you get your profits, pay or dividends.
- Never go into debt for anything which does not appreciate in value.
- The real definition of an Asset: Anything that puts money in your pocket. The accounting definition of an asset is flawed.
- Do not trade stocks. Trading makes the broker and tax man rich and you poor.
- The greatest financial instrument is ‘compounding’. It only happens when we hold assets, not by trading them.
- If you can’t afford a consumer product in cash, you can’t afford it.
- There is no such thing as ‘financial engineering’. It was invented by Wall street to trick you.
- The best type of share investment is an Index Fund. They are investments in civilization. If that fails, we have bigger worries than our money.
- Invest more in education than entertainment & ‘things’ and you will outdo society financially.
I read a great quote today which I thought was worth sharing:
“There is a recognition dawning that the repetitive linear system which controls work and the worker is no longer profitable. Consequently, the presence of the soul is now welcome in the workplace. The soul is welcome because it is the place where the imagination lives.”
What I like about this is the reference to profit, and that linear systematic work isn’t profitable. If I think about every startup I’ve ever been involved with the real profit has come from the excitement and variety of the work. Internal profit rather than financial. And so my soul has been enriched.
We live in a wordy world. It seems there’s a new acronym, piece of business jargon, or self defining adjective emerging every minute of the day. It’s easy to get caught up in the language, the jargon and forget what business and startups are all about:
Building stuff. Buying something for $1 and selling it for $2. Having a laugh along the way.
Keep it simple. Don’t try and be everything to everyone.
With all this in mind I’ll hand over to George Carlin – and yes, this video is worth every second of the 3.56 minutes it takes to watch.
It costs the soft drink Industry over $100 million a year for thefts committed involving vending machines.
*actual Coke vending robots!
Yet vending machines still exist for one simple reason. This is still a profitable business regardless of the theft.
So often in startup land we here people pointing out the gaps and potential issues in any business model we propose. The fact is no business model is perfect. Every business has gaps and potential issues which will impact profitability. There is always leakage, there is always some evaporation. What we need to focus on is the net result and understand if we can still make a profit regardless of the model imperfections.
Industrial Tourism is big business. It’s a little know fact the Boeing factory in Seattle has over 180,000 visitors a year. At $15 a ticket that is approx $2.7 million in high margin revenue.
Local Australia firm fosters brewing has a popular brewery tour at their Melbourne plant (you get a free beer at the end of it) as does Media conglomerate NBC in the Rockerfella Centre in New York. None of this is free, and they are all fully booked pretty much every day. The thing that is almost as powerful as the cash such Industrial Tourism generates, is the relationship it builds with the brand.
It is pretty cool to be taken into the ‘secret back room’, even though we can all be pretty sure that Boeing or any large conglomerate are not about to give away any secrets on said tours. But this is where startups and SME’s can do it even better. We can let our early adopters into our Factory, Alpha testing, Retail back room, Warehouse, New Product Development session. We can let them expose our secret goodness to the market for us. Especially if we do something awesome like make great software, use recycled materials or anything creative.
So the question for startups is this: How can we let our early adopters and brand evangalists into our secret world to spread our world?
Unless you are from the US – you have never even heard of any of the 10 oldest businesses in the USA. Nope, not one. There’s not a sexy brand among them. They include boring industries like, banking, ingredients, manufacturing inputs and insurance.
You can check it out by clicking here.
The important insight for Start Ups and investors is this:
The boring stuff is almost always more profitable than the sexy.
Why: Because exciting, sexy stuff attracts lot’s of competitors and people want to play there. They want to play there because it’s fun, it’s in the papers, it’s featured in business forums and leverages over-riding social trends. Then it gets busy and the cream disappears – (read here abnormal economic profits) . It’s no different to the house prices rising in popular suburbs and the yield declining. Simple economics discovered centuries ago.
So what? It’s vital we know the difference between sustainable & exciting. The most important factor for survivial is profit – end of story. Sure, profits can be made in any industry, but chances are there’s more profit in the areas everyone else forgot about.