Wednesday, October 12, 2016

Startup Funding and Reg A+

The new-new in fundraising is crowdsourcing, and what makes crowdsourcing so powerful is a concept known as the long tail. Traditionally, the concept of the “long tail” was used to describe the declining part of the product life cycle (see below). It is usually called “end of life” or declining phase. It might have been used to describe the portion of product distribution that represents a period in time when sales for less common products return a profit due to reduced marketing and distribution costs. That would make a “tail” a period of time when sales are made for goods not commonly sold as standard products. The period could be short or long. This term was hijacked by Chris Anderson in 2004 when he coined the term “long tail” to describe a phenomena where products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, but only if the store or distribution channel is large enough. Today, that is what long tail is most often referred to.

The long tail is about the idea that something starts with some volume, may grow, but then fades. In most situations the product and specific market will disappear, on others the demand and fulfillment continue at a highly reduced level but the product doesn't change.

So the long tail comes into play when the cost to distribute 1 unit of a product drops to a point that you can profitably sell one unit for only a fraction more per unit that if you sold 10,000 units. Essentially, the economies of scale no longer come into play. This now applies to film, books, records, etc. Now, you can “ship” one song on the internet and it costs me under $0.01 to do so. Before, I needed someone to “make” my album. This would involve expensive studio time, pressing vinyl, marketing the album, stocking and distributing the “physical” products. The “ENTRY FEE” to do that made it prohibitive for “start ups” (i.e. bands) to make their own albums and as such the ecosystem for any band to generate awareness and become an “overnight success” involved the recording companies and radio.. And speaking of radio, the over the airwaves radio is losing out to on demand and streaming stations (again the long tail). The long tail also allows something called “mass customization” but that is another article.

As an example, incredibly AMAZON does NOT exploit the long tail for retail, but they do exploit the long tail tools of the internet to help with their marketing and distribution. That is why it took them over 10 years to make a profit. Actually ETSY started out using the long tail for its products, and as such, started making profits much quicker that AMAZON.

So, think of the long tail this way: millions of markets selling hundreds of “items” instead of hundreds of markets selling millions of a few items. Take the music industry. It is moving from the short tail: a handful of artists selling millions of records, which are heavily promoted by a handful of record companies that make millions of dollars; to the long tail: tens of thousands of independent artists doing what most successful small business Internet entrepreneurs do now – niche and localize their market. Most artists may not become multi-millionaires, but by marketing locally they will be able to establish a niche following. As search engines and content delivery methods become more and more individually tailored, localized and instantly delivered, services will be offering a massive inventory of unsigned independent artists. Music distribution has the potential to benefit from a long tail effect online. That’s a good thing for artists.

Here is a good example of how most people do NOT know how to exploit the long tail and explains why 97% of Excite’s business was in the long tail and why they did not understand the power of it.

In doing calculus, the area that is yellow is 33 times larger than the area in RED!!! You know the real reason Excite went out of business? They could not figure out how to make money from 97% of their traffic. The just could not understand that the long tail, all those queries that were as asked only once a day, was where ALL the money was hiding.

Overture figured it out, Google perfected it and we all know what happened from there. Those guys figured out something revolutionary -- the long tail of search was an advertising marketplace bonanza. But it was not a traditional advertising marketplace like television, where a handful of large advertisers reached out to a handful of very large markets. It was a special kind of marketplace where small advertisers could reach small markets efficiently. You know, where the cost to reach one person is so low, that economies of scale no longer apply. It was and is a revolution to the traditional economics of advertising (where the cost of producing and distributing advertising requires large markets to justify the expenditure). Online search is a classic “new” long tail business and that is the source of its power and profit.

Now, there is a new-new coming with fundraising that is using the power of the long tail to its advantage, Regulation A+ (Reg A+). Reg A+ allows a company to bypass the traditional investment bank / broker-dealer / VC / Money Manager ecosystem and efficiently and effectively deliver stock to non-accredited investors through the power of crowdsourcing. We have seen the success of crowdsourcing with crowdfunding in Kickstarter and Indiegogo. Now we will see this same principal be applied to deliver registered stock to the new investor class that heretofore has not been able to partake in the startup infrastructure of early stage investing until now.

According to a 2008 BusinessWeek study there are 5 million accredited investors in the US. On average they invest $10,000 to $50,000 in a startup. In the US, about 55% of the people own stock, but there is an estimate is that 70% would invest in a startup if they could. So that is 255 million people in the US who might put $1,000 into a startup if they were given a vehicle to do so cost effectively. The resultant figure is $178 Billion larger than what Venture Capitalists and Angels COMBINED invest ($77B in 2015). Are you getting my drift yet about the power of the long tail? Now, with Reg A+, any company can sell stock all day to the average Joe and Jane and these “new” investors can now reap the rewards of a startup returning 5X, 10x, 50x or 100x on their investment in a relatively short period of time. Something that in the past, only the most well heeled investors were allowed to partake in.

Of course, Reg A+ is not for everyone. It seems to be more geared towards consumer facing products and services (i.e.: think Virtual Reality devices, hoverboards, personal grooming, cosmetics, nutraceuticals, pet products, restaurants, distilled beverages, snacks, home gadgets, and video games, etc.). Still, as technology becomes more pervasive, and consumers become more aware of the power of technology to help their lives in general, you might see Reg A+ be used in startups focused on B2B concepts as well. This will all come about because of the power of Reg A+. It is in its infancy now, but in 10 years, Reg A+ may be the preferred way companies raise money, essentially bypassing the venture capital and angel networks entirely.

Sunday, October 2, 2016

Quotations By Rumi

Jalāl ad-Dīn Muhammad Balkhī (Persian: جلال‌الدین محمد بلخى‎), also known as Jalāl ad-Dīn Muhammad Rūmī (Persian: جلال‌الدین محمد رومی‎), Mawlānā or Molānā (Persian: مولانا‎, meaning Our Master), Mawlawī or Molavi (Persian: مولوی‎, meaning My Master), and more popularly in the English-speaking world simply as Rumi (30 September 1207 – 17 December 1273), was a 13th-century Persian poet, jurist, theologian, and Sufi mystic. Rumi's importance is considered to transcend national and ethnic borders. His poems have been widely translated into many of the world's languages and transposed into various formats. His best poems are listed below for your convenience.

“You have escaped the cage. Your wings are stretched out. Now fly.”

“I belong to no religion. My religion is love. Every heart is my temple.”

“Your body is away from me, but there is a window open from my heart to yours.”

“Your task is not to seek for love, but merely to seek and find all the barriers within yourself that you have built against it.”

“At the end of my life, with just one breath left, if you come, I’ll sit up and sing.”

“The minute I heard my first love story I started looking for you, not knowing how blind that was. Lovers don't finally meet somewhere. They're in each other all along.”

“When I am with you, we stay up all night.
When you're not here, I can't go to sleep.
Praise God for those two insomnias!
And the difference between them.”

“This is love: to fly toward a secret sky, to cause a hundred veils to fall each moment. First to let go of life. Finally, to take a step without feet.”

“Out beyond ideas of wrongdoing and rightdoing, there is a field. I will meet you there.”

“Oh soul,
you worry too much.
You have seen your own strength.
You have seen your own beauty.
You have seen your golden wings.
Of anything less,
why do you worry?
You are in truth
the soul, of the soul, of the soul.”

“Only from the heart Can you touch the sky.”

“Let the beauty of what you love be what you do.”

“Don't grieve. Anything you lose comes round in another form.”

“You were born with wings. Why prefer to crawl through life?”

“The way you make love is the way
God will be with you.”

“Everyone has been made for some particular work, and the desire for that work has been put in every heart.”

“Observe the wonders as they occur around you. Don't claim them. Feel the artistry moving through and be silent.”

“Let the lover be disgraceful, crazy, absent-minded. Someone sober will worry about events going badly. Let the lover be.”

“Every tree and plant in the meadow seemed to be dancing, those which average eyes would see as fixed and still.”

“We come spinning out of nothingness, scattering stars like dust.”

“All day I think about it, then at night I say it. Where did I come from, and what am I supposed to be doing? I have no idea. My soul is from elsewhere, I'm sure of that, and I intend to end up there.”

“He is like a man using a candle to look for the sun.”

“Something opens our wings. Something makes boredom and hurt disappear. Someone fills the cup in front of us: We taste only sacredness.”

“The lion is most handsome when looking for food.”

“Everyone sees the unseen in proportion to the clarity of his heart, and that depends upon how much he has polished it. Whoever has polished it more sees more - more unseen forms become manifest to him.”

“We can’t help being thirsty, moving toward the voice of water.”

“It may be that the satisfaction I need depends on my going away, so that when I've gone and come back, I'll find it at home.”

“I died a mineral, and became a plant. I died a plant and rose an animal. I died an animal and I was man. Why should I fear? When was I less by dying?”

“Sell your cleverness and buy bewilderment.”

“Why do you stay in prison
when the door is so wide open?
Move outside the tangle of fear-thinking.
Live in silence.”

“You are quaffing drink from a hundred fountains: whenever any of these hundred yields less, your pleasure is diminished. But when the sublime fountain gushes from within you, no longer need you steal from the other fountains.”

“To praise the sun is to praise your own eyes.”

“Return from existence to nonexistence. You are seeking the Lord and you belong to him. Nonexistence is a place of income; flee it not. This existence of more and less is a place of expenditure.”

“Reason is like an officer when the king appears. The officer then loses his power and hides himself. Reason is the shadow cast by God; God is the sun.”

“The Eternal looked upon me for a moment with His eye of power, and annihilated me in His being, and become manifest to me in His essence. I saw I existed through Him.”

“Pilgrimage to the place of the wise is to find escape from the flame of separateness.”

“In your light I learn how to love.
In your beauty, how to make poems.
You dance inside my chest,
where no one sees you.”

“Silence is the language of God, all else is poor translation.”

“One day You will take my heart completely and make it more fiery than a dragon. Your eyelashes will write on my heart the poem that could never come from the pen of a poet.”

“Who could be so lucky? Who comes to a lake for water and sees the reflection of moon.”

“Knowest thou not the beauty of thine own face? Quit this temper that leads thee to war with thyself.”

“Now I am sober and there's only the hangover and the memory of love.”

“The ground submits to the sky and suffers whatever comes. Tell me, is the Earth worse for giving in like that?”

“Look at Love...
how it tangles
with the one fallen in love.”

“A shadow cannot ignore
the sun that all day creates and moves it.”

“Fear is the cheapest room in the house.”

“All that you think is rain is not. Behind the veil angels sometimes weep.”

“Liberated from suffering and search
I have tied myself to the skirt of God.
If I fly, I look at the summits I ascend.
If I go around in circle
I observe the axis on which I revolve.
If I am dragged by a burden,
I know where I go.
For I am the moon, and the sun is my guide.”

“Oh Sweet Bitterness!
I will soothe you and heal you
I will bring you roses
I too have been covered with thorns.”

“Silence within silence, no words within blank space, nothing on blank page, less within the void.”

“The hurt you embrace becomes joy.”

“You are so weak. Give up to grace.
The ocean takes care of each wave
till it gets to shore.”

“How will you know the difficulties of being human, if you are always flying off to blue perfection?”

“How do the birds make great sky circles... They fall and falling they are given wings.”

“Try and be a sheet of paper with nothing on it.
Be a spot of ground where nothing is growing,
where something might be planted,
a seed, possibly, from the Absolute.”

“Water in the boat is the ruin of the boat, but water under the boat is its support.”

“Joy lives concealed in grief.”

“Days of wanting.
Let them go by without worrying
that they do.
Stay where you are
inside such a pure, hollow note.”

“Look at your heart and tongue, one feels but deaf and dumb, the other speaks in words and signs.”

“The delight a friend feels when he hears a friend's voice bring all that matters. There are those who hear within a voice the essence being said, and there are those who can't.”

“Don't look at your form, however ugly or beautiful. Look at love and at the aim of your quest...O you whose lips are parched, keep looking for water. Those parched lips are proof that eventually you will reach the source.”

“Come out of the circle of time and into the Circle of Love.”

"You are searching the world for treasure, but the real treasure is yourself."

"Not the ones speaking the same language, but the ones sharing the same feeling understand each other." 

"Come into my eyes, and look at me through them,
for I have chosen a home far beyond what eyes can see."

"Raise your words, not your voice. It is rain which grows flowers, not thunder."

"There is hope after despair and many suns after darkness."

"The real beloved is that one who is unique, who is your beginning and your end."

"The very center of your heart is where life begins, the most beautiful place on earth."

"Light up the fire of love inside and blaze the thoughts away."

"If you wish to be a mine of jewels, open the deep ocean within your heart."

"Blessed is the poem that comes through me but not of me because the sound of my own music will drown the song of Love."

"Love is a mirror..You see nothing but your reflection..You see nothing but your real face."

“Words are a pretext. It is the inner bond that draws one person to another, not words.”

"I looked in temples, churches and mosques. But I found the Divine in my heart."

"All doubt, despair, and fear become insignificant once the intention of life becomes love."

"Everything in the universe is within you. Ask all from yourself."

"The cure for pain is in the pain."

"Gratitude is the wine for the soul. Go on. Get drunk."

If you wish for light, be ready to receive light.”

"Love is not written on paper, for paper can be erased. Nor it is etched on stone, for stone can be broken. But it is inscribed on a heart and there it shall remain forever." 

“We rarely hear the inward music, but we’re all dancing to it nevertheless.”

Live life as if everything is rigged in your favor.”

“When I run after what I think I want, my days are a furnace of distress and anxiety. If I sit in my own place of patience, what I need flows to me, and without any pain.”

“Yesterday I was clever, so I wanted to change the world. Today I am wise, so I am changing myself.”

“Go find yourself first so you can find me.”

--Jalal ad-Din Rumi

Wednesday, August 24, 2016

Book of Verses

Rubaiyat of Omar Khayyám (Persian: رباعیات عمر خیام‎‎) is the title that Edward FitzGerald gave to his translation of a selection of poems, originally written in Persian and numbering about a thousand, attributed to Omar Khayyám (1048–1131), a Persian poet, mathematician and astronomer. A ruba'i is a two-line stanza with two parts (or hemistichs) per line, hence the word rubAYOT (derived from the Japanese language leaves for “a million”), meaning "quatrains".

Here is one of my favorite verses of the Rubaiyat of Omar Khayyám from this translation:
“A Book of Verses underneath the Bough,
A Jug of Wine, a Loaf of Bread—and Thou
Beside me singing in the Wilderness—
Oh, Wilderness were Paradise enow!”

Saturday, July 30, 2016

Guns, Violence, and Statistics

Many people jump up and down whenever the topic of guns, gun violence, or gun control is brought up. Personally, I have to believe that our Founding Father’s believe that a well armed population is the best counter balance to a corrupt government. For as Thomas Jefferson once stated, “When the people fear their government, there is tyranny; when the government fears the people, there is liberty.” In actuality, when people think of the causes of the American War for Independence, they think of slogans like “no taxation without representation” or a cause célèbre like the Boston Tea Party. In reality, what finally forced the colonials into a shooting war with the British Army in April 1775 was not taxes or even warrant-less searches of homes and their occupation by soldiers, but one of many attempts by the British to disarm Americans as part of an overall gun control program, which included seizure of firearms and powered. So, for this very reason it is understandable why the Founding Fathers made the 2nd Amendment, the second most important in our Constitution. But aside from that, we have to take the emotion out of the discussion of guns and actually look at facts, and being an engineer, I like dissecting numbers and statistics, so this is what this article will do, bit by bit.

OK, here are the fact: There are 30,000 gun related deaths per year by firearms. That is not disputed as a fact of American life, sadly.

What is never shown or talked about though, is a breakdown of those deaths to put them in perspective; as compared to other causes of death.

• 65% of those deaths are by suicide which would never be prevented by gun laws
• 15% are by law enforcement in the line of duty and justified
• 17% are through criminal activity, gang and drug related or mentally ill persons
• 3% are accidental discharge deaths

So technically, "gun violence" is not 30,000 annually but drops to 5,100. Still too many!! So let’s see how are those deaths spanned across the nation?

• 480 homicides (9.4%) were in Chicago
• 344 homicides (6.7%) were in Baltimore
• 333 homicides (6.5%) were in Detroit
• 119 homicides (2.3%) were in Washington DC (a 54% increase over prior years)

So basically, 25% of all gun crime happens in just 4 cities. All 4 of those cities have strict gun laws so it is not the lack of the rule of law that is the root cause. Maybe it is gang violence and the lack of the historic family unit with a father and a mother, or poor schools, or lack of job opportunities? Whatever the root cause, we are left with 3,825 deaths caused by guns in the rest of the Nation, or about 75 deaths per State.

That is an average number because some States have much higher rates than others. For example, California had 1,169. Alabama had 1. Putting this in quantitative amounts, California alone accounts for 25% of the gun deaths alone. So, with the four cities and California you now have 50% of the gun deaths in the US.

Now, which State has the strictest gun laws by far? California of course but understand, it is not the tool (guns) driving this. It is a crime rate spawned by the number of criminal persons residing in those cities and States.

So if all cities and states are not created equal, then there must be something other than the tool causing the gun deaths.

Are 5,100 deaths per year horrific? Absolutely, but how do they compare with other known causes of death?

All death is sad and especially so when it is in the commission of a crime but that is the nature of crime. Robbery, death, rape, assault; all are done by criminals to victims and thinking that criminals will obey laws is ludicrous. We are not here to debate the reason why they are criminals, but just realize without some major intervention that criminals will behave as criminals do, and often violently. That is why they are criminals.

But what of other causes of death? Remember total gun deaths is 30,000/year, and it has been shown that it is really 5,100.

• 40,000+ die from a drug overdose – THERE IS NO EXCUSE FOR THAT!
• 36,000 people die per year from the flu, far exceeding the criminal gun deaths
• 34,000 people die per year in traffic fatalities (exceeding gun deaths even if you include suicide)

Now let us look at the really big numbers of deaths caused by preventable actions:

• 200,000+ people die each year (and growing) from preventable medical malpractice. So in actuality, you are safer statistically in Chicago than with dealing with a doctor!
• 710,000 people die per year from heart disease. Time to stop the cheeseburgers!

So what is the point of stating these statistical facts? It is simple. If the people who focus their attention on banning guns were to instead focus on heart disease, even a 10% decrease would save twice as many lives annually over of all gun related deaths (including suicide, law enforcement, etc.). In addition, a 10% reduction in malpractice from doctors would be 66% (20,000 lives) of the total gun deaths or 4 times the number of criminal homicides. It seems relatively easy to achieve a 10% reduction in these two preventable causes of deaths, so where is the outcry?

So you have to ask yourself, in the grand scheme of things, why is there such a focus on guns? Our Founding Fathers realized that freedom is a messy and risky endeavor. They also understood Government that governs least, governs best. Many aspects of life in a free society can lead to harm or misfortune or death for some people. Driving kills. Smoking kills. Bad diet kills. Drugs Kill. Sports and recreation kill. Travel kills. Living kills. Bottom line, living is a risk filled business.

The core element of any objective to “eliminate” ALL such bad outcomes is to increase control over many, most and eventually all aspects of life. Of course, this does not mean that measures should not be taken, largely in education, to make activities and elements of life pragmatically safe. Look at the wonderful success of the anti-smoking campaign that removed millions of people from even ever starting. But "common sense" approaches cannot be equated to the perspective of those who only seek to eliminate freedoms that are (1) widely accepted by large portions of the or (2) established as points of law.

It is pretty simple. Taking away freedoms under the excuse of taking care of people gives control to governments, which leads directly to tyranny. This is not conspiracy theory; this is a historical fact. Why have we not understood this for so long? Tell me again why is it impossible for any Government not to spill over into dictatorship? The Founders of this great Nation knew that regardless of the form of government, those in power may become corrupt and seek to rule as the British did. As Lord Acton said, “Power corrupts; absolute power corrupts absolutely.”

They colonial British tried to disarm the populace of the colonies because it is not difficult to understand; a disarmed populace is a controlled populace. Thus, the Second Amendment was proudly and boldly included in the Constitution, representing and protecting all the other freedoms. It must be preserved at all costs not because it is sacred, but because it is statistically sane. Again, our Forefathers, while not perfect, were incredibly prescient.

Thursday, July 7, 2016

Never Give Up

Chester Carlson? Whenever I think an idea or project will not make it, I think of Chester Carlson. Most people do not know who this person is, but he came up with the second greatest invention of the last 500 years (after the printing press); xerography; and he was not even a engineer. There should be a movie made of this guy: grew up dirt poor, lost his parents at a young age; worked his way through college, earning a degree in physics, and law school; invented xerography.

Anyway, the reason I mention Chester Carlson is that even though he thought up xerography and demonstrated it at the Astoria hotel in 1938, the first copy machine (made by the Haloid Corporation who changed it name to Xerox) was not made until 1958! Twenty years later. During that time, there were many set backs, but Mr. Carlson believed that being able to print without water would be a “disruptive” technology, so he never gave up. There were many nay-sayers.

Mr. Carlson got the kernel of an idea while at work as a patent attorney. He noted that there never seemed to be enough carbon copies of patent specifications, and there seemed to be no quick or practical way of getting more. The choices were limited to sending for expensive photo copies, or having the documents retyped and then reread for errors. A thought occurred to him: Offices might benefit from a device that would accept a document and make copies of it in seconds. For many months Carlson spent his evenings at the New York Public Library reading all he could about imaging processes. During that time, Carlson read an article about the little-known field of photoconductivity, specifically the findings of Hungarian physicist Paul Selenyi, who was experimenting with electrostatic images. He learned that when light strikes a photoconductive material, the electrical conductivity of that material is increased. Frustrated by a lack of time, and suffering from painful attacks of arthritis, Carlson decided to dip into his meager resources to pursue his research on his own, setting up a small lab in nearby Astoria and hiring an unemployed young physicist, a German refugee named Otto Kornei, to help with the lab work. It was here, in a rented second-floor room above a bar, where xerography was invented. Otto took a glass microscope slide and printed on it in India ink the notation '10-22-38 ASTORIA.'

Incredibly, Carlson was quite alone in his work, and in his belief that xerography was of practical value to anyone. Following this first demonstration of xerography, Mr. Carlson searched for years in a fruitless quest for a company that would develop his invention into a useful product, and was turned down by over twenty companies, including IBM, GE, and Honeywell, during that time.

Incredibly, no one could believe that a tiny glass plate and rough image held the key to a tremendous new industry. During these painfully long years, Mr. Carlson became discouraged and several times decided to drop the idea completely. Still, he could not abandon this disruptive technology and he stayed thoroughly convinced that the invention was too promising to be left on the scrap heap of history.

Finally, in 1944, Battelle Memorial Institute, a non-profit research organization signed a royalty-sharing contract with Carlson. In 1947, Battelle teamed with a small photo-paper company called Haloid (later to be known as Xerox) to develop a xerographic machine.

It was not until 1959, twenty-one years after Carlson invented xerography, that the first convenient office copier using xerography was unveiled. The 914 copier could make copies quickly at the touch of a button on plain paper. It was a phenomenal success. Today, xerography is a foundation stone of a gigantic worldwide copying industry, including Xerox and other corporations which make and market copiers and duplicators producing billions and billions of copies a year.

So, bottom line: It may take a long time, but if you KNOW something is worth pursuing, NEVER give up! Chester Carlson never did. As a footnote, Mr. Carlson made 1/1000th a cent per copy as a royalty, and when he died, he was estimated to be worth $266 million.

Thursday, May 12, 2016

A Reason, Season or a Lifetime

It is funny, but recently I have had some friends lament about people who have come and left their lives and they do not quite understand why.  It seemed like everything was going great, they were becoming fast friends, and then poof..they are gone.  That made me remember a story about how people can come into your life for a reason, a season, or a lifetime. 

When someone is in your life for a reason, it is usually to meet a need you have expressed or just felt. They have come to assist you through a hard time, to provide you with guidance and support, to aid you physically, emotionally or spiritually. Then, suddenly, the person disappears from your life. Your need has been met; their work is done. It is hard to explain, but they now are off somewhere else.

Some people come into your life for a season, because your turn has come to share or grow or give back. They bring you an experience of peace or make you laugh. They give you great joy. Believe it; it is real. But only for a season, and like the seasons, they change and move one.

Lifetime relationships often are harder but teach you lessons that you will use all your life. Things you must build upon to have a solid emotional foundation. Often it is hard to accept the lesson, love the person and put what you have learned to use in all your other relationships. But to have these people in your life, it is something you must strive to do.

Think about the people in your life over the years. Whether they were there for a reason, a season or a lifetime, accept them and treasure them for however long they were meant to be part of your life. And when they are gone, do not be sad for their departure, but be thankful for the gifts you received from them when they were here—for a reason, a season or a lifetime.

Friday, February 12, 2016

Adversity's Test

During these uncertain times, I like to go back to some of the stories friends, colleagues, and mentors gave me. This particular one deals with how a person reacts when things get tough, or as some like to say, when we are in hot water. I hope you find it as insightful as I did.

Adversity's Test

A daughter complained to her father about her life and how things were so hard for her. She did not know how she was going to make it and wanted to give up. She was tired of fighting and struggling. It seemed as one problem was solved, a new one arose.

Her father, a chef, took her to the kitchen. He filled three pots with water and placed each on a high fire. Soon the pots came to a boil.

In one, he placed carrots; in the second, he placed eggs; and the last, he placed ground coffee beans. He let them sit and boil, without saying a word.

The daughter sucked her teeth and impatiently waited, wondering what he was doing. In about twenty minutes, he turned off the burners. He fished the carrots out and placed them in a bowl. He pulled the eggs out and placed them a bowl. Then he ladled the coffee out and placed it in a bowl.

Turning to her he asked. "Darling, what do you see?"…."Carrots, eggs, and coffee," she replied.

He brought her closer and asked her to feel the carrots. She did and noted that they were soft. He then asked her to take an egg and break it. After pulling off the shell, she observed the hard-boiled egg. Finally, he asked her to sip the coffee. She smiled as she tasted its rich aroma.

She humbly asked. "What does it mean Father?" He explained that each of them had faced the same adversity, boiling water, but each reacted differently. The carrot went in strong, hard, and unrelenting. But after being subjected to the boiling water, it softened and became weak. The egg had been fragile. Its thin outer shell had protected its liquid interior. But after sitting through the boiling water, its inside became hardened. The ground coffee beans were unique, however. After they were in the boiling water, they had changed the water.

"Which are you?" he asked his daughter. "When adversity knocks on your door, how do you respond? Are you a carrot, an egg, or a coffee bean?"

How about you?

Are you the carrot that seems hard, but with pain and adversity do you wilt and become soft and lose your strength?

Or are you the egg, which starts off with a malleable heart? Were you a fluid spirit, but after a death, a breakup, a divorce, or a layoff have you become hardened and stiff?. Your shell looks the same, but are you bitter and tough with a stiff spirit and heart?

Or are you like the coffee bean? The bean changes the hot water, the thing that is bringing the pain, till its peak flavor reaches 212 degrees Fahrenheit. When the water gets the hottest, it just tastes better. If you are like the coffee bean, when things are at their worst, you get better and make things better around you. Essentially, adversity does not change you, you change the adversity to opportunity.

Monday, January 18, 2016

The Man In The Glass

In these tough times, it is easy to get down on yourself and become demotivated by what others have told you or have intimated about your abilities, ideas or success. Just remember, that those who create (either businesses or ideas or art or designs or music or athletic performance) are closest to being god-like. It is during the creation process that we most mimic the Creator and pay it homage. Also, just because you might have outward success, does not necessarily mean you have concurred that monster from within. I came across the following some time ago, and feel it would be appropriate for all those who are experiencing a little self doubt. It might be called "The Man in the Glass" but is appropriate for both genders..
The Man in the Glass (author unknown - circa 1900)
When you get what you want in your struggle for self
And the world makes you king for a day,
Just go to a mirror and look at yourself,
And see what that man has to say.

For it isn't your father or mother or wife,
Whose judgment upon you must pass;
The fellow whose verdict counts most in your life
Is the one starring back from the glass.

He's the fellow to please, never mind all the rest.
For he's with you clear up to the end,
And you've passed the most dangerous, difficult test
If the man in the glass is your friend.

You may fool the whole world down the pathway of years.
And get pats on the back as you pass,
But your final reward will be the heartaches and tears
If you've cheated the man in the glass.

Saturday, December 19, 2015

Why We Hate Change

Over the 100,000 plus years we and our brains have been evolving. During that time, our minds have grown past our primitive lizard brains and as such have brought us intelligence; which in turn has allowed humans to accomplish some fantastic things. Even with all that time and evolution, we and our brains are still guided by these four most important motivators: avoiding threats, minimizing energy, seeking certainty (reducing risk) and obtaining rewards (increasing pleasure).

It is easy to see why these four conditions motivate us not to change, because change usually involved reducing certainty while simultaneously increasing risk and expending energy, often without any guarantee of obtaining a reward. Essentially, due to in a large part to our primordial past, when we find ourselves confronted with change, either on a personal level or say at your company, all the fears from our lizard brain are triggered.

So, how can we get past those fears and anxieties that our genetic makeup makes it so hard to accept change on a personal and group level? Well, lucky for us, intelligence again offers seven (7) ways to make change more readily acceptable and addressable to our ‘fear factors.’

1.) The first is to normalize resistance to change. We have to explain to ourselves and others in our group, that although our brains are naturally wired to resist change, we can take steps to help our brains make changes more easily. We are NOT slaves to our genetics, instead we, each of us, have the power to fight that resistance if we chose to.

2.) Next, believe it or not our brains are motivated and take action when perceived rewards are greater than perceived threats. Not only do we have to see that the risk-to-reward-ratio is tipped on the reward side, but when we are trying to get others to see so too, we need to Invite everyone affected to explore the benefits of the proposed change, and make sure their perceived fears are mitigated and their possible rewards are maximized.

3.) While change always has a certain amount of uncertainty associated with it, as best is possible, you need to meet yours and others brains’ need for certainly throughout the change process. The best way to do this is to break change down into manageable, small-step milestones, time-lines and action items that can be checked off as they are accomplished. These “small victories” can appreciably reduce the risk associated with any change and add certainty as you measure the progress of change.

4.) Attitude is everything and emotions are contagious. You must first believe in and be enthusiastic about your own change if you ever expect to be able to change the hearts and minds of others. When you lead change, do it with as much passion, excitement and enthusiasm as you can muster.

5.) While some of us are more reward-focused, there are others who actually will only be motivated in knowing that not changing is actually riskier than the change itself. To change these minds, including your own, you will need to clearly explain the risks of NOT changing to those who are more threat-oriented or who appreciate threat avoidance as a priority.

6.) No matter how much we fear a thing, or want to avoid risk and pain, or desire rewards and accolades, our brains are conditioned and wired to celebrate and be rewarded with accomplishment. These rewards have to be both on a psychological and physical level. To institute and secure a long-lasting change, it is imperative to recognize progress and wins as the change is underway and completed, not only on an individual level, but also as a team.

7.) Finally, this might sound a little be pat, but the actual experience of the change is its own reward. These rewards come as we grow through a challenge, bond as a team, discover our unknown strengths and abilities, and begin to see our world in a different light. Yes, change is hard, if it were easy, everyone would do it without trepidation. Sadly, it is those lonely few of us who have the ability to seemingly easily and effortlessly implement change. But even with them, it took practice to make accepting change readily.

Sunday, December 6, 2015

So, What About Europe?

Often we wonder how countries get into bad financial difficulties, and sometimes we need an allegory to explain it.  Hopefully the one below can explain how some of the European countries have gotten into their financial mess?

Helga is the proprietor of a bar.  She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.  To solve this problem she comes up with a new marketing plan that allows her customers to drink now, but pay later.

Helga keeps track of the drinks consumed on a ledger (thereby granting the customers' loans).

Word gets around about Helga's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Helga's bar. Soon she has the largest sales volume for any bar in town.

By providing her customers freedom from immediate payment demands Helga gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer - the most consumed beverages.

Consequently, Helga's gross sales volumes and paper profits increase massively.  A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Helga's borrowing limit.  He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

He is rewarded with a six figure bonus.

At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS. These "securities"  are then bundled and traded on international securities markets.

Naive investors don't really understand that the securities being sold to them as "AA Secured Bonds" are really debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.

The traders all receive a six figure bonus.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Helga's bar. He so informs Helga. Helga then demands payment from her alcoholic patrons but, being unemployed alcoholics, they cannot pay back their drinking debts. Since Helga cannot fulfil her loan obligations she is forced into bankruptcy. The bar closes and Helga's 11 employees lose their jobs.

Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank's liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Helga's bar had granted her generous payment extensions and had invested their firms' pension funds in the BOND securities.  They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.   Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations; her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.

They all receive a six figure bonus.

The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who've never been in Helga's bar.

Now do you understand?