Ahmed El Husseiny's Blog

What If

aelhusseiny — Wed, 29 Jul 2009 13:31:17 +0000

Hi,
Great to be with you again. It’s another friday and the weekend is coming up. Do you have big plans? What are you going to do for fun and adventure? It’s up to you!

This week I want to talk about “What If’ and missed opportunities.

What is your big “What if”? “If had only…”

I’m sure you have done that before. If you could just go back in time and do something differently, had some prior knowledge that would benefit you… like knowing that Microsoft would become a Giant in the software industry back in 1977. How about the Dot Com boom of the 1990s? Could you have invested time and money then and come out ahead?

Many people put a lot of effort at putting those enterprises together at the beginning. Built a foundation, and it blossomed into huge rewards.

Now it’s your turn. What is the next big thing? What ingredients did Microsoft have that made it successful?

• Innovative
• First to market
• High Value
• Strong Leadership
• Public Appeal

These are the things that you need to look for to find the Next Big Thing. Can you find it out there? See if you can find out what it is!

What if you find it? Then it’s just like traveling back in time! So 5 years from now you can say… I Found It, I invested my Time and Effort, and Look at Me Now!

5 Years will pass from today. Can you find the Next Big Thing? It’s out there, I assure you.

If you do find it, will you share it with me? Will you let me know about it and educate myself to see what you see?

I hope so!

Who Wants to Be an Entrepreneur? Part 2

aelhusseiny — Thu, 25 Jun 2009 15:15:51 +0000

Kristin S. Rhyne, MBA ’99, would have loved to have the problems of reconciling employee priorities and juggling financial plans. Late last May, a year after incorporating Polished, she was still struggling to open its first unit. The strain of working alone, mostly out of her apartment, and relying on $500,000 in financing provided by family members, friends, and “angel” investors, recurred in accounts of what she was trying to accomplish. “This is by far the most challenging thing I’ve ever done,” she said. “It’s emotionally challenging.”
Entrepreneurs have to pick something they like to do, work hard, and not worry about the rest—success will come.
—Todd Krasnow
Rhyne’s idea for meeting the “weekly beauty needs”—manicures, facials, massages—of time-pressed women made the semifinal round of the 1999 business-plan contest. In retrospect, the wave of enthusiasm for the Internet was just cresting. Rhyne’s old-economy idea was the only nontechnology concept to make the semifinals. Her teammates moved on to other things, but she decided to try to build a business.
And then began her harsh encounter with the entrepreneur’s basic dilemma, what Professor William A. Sahlman calls “the problem of simultaneity.” If, as the business school defines it, entrepreneurship is the pursuit of a business opportunity requiring resources beyond one’s control, Polished was all opportunity and no resources. Rhyne could see a large market for reliable, branded beauty services in office parks and hotels, but she focused first on the high-visibility airport market, where customers in transit needed the services she could provide—and might relish them as an alternative to waiting for delayed flights in crowded terminals. Prime locations in airports come at a premium, however; securing space depended on financing, a credible design for Polished’s stores, and leasing managers’ belief in Rhyne’s ability to hire people and satisfy customers—neither of which was possible, of course, without a site. “Without having the team in place, and not being able to put the team in place,” as she put it, Polished could not take root.
But by last December, Polished seemed closer to its initial destination. Rhyne had secured a lease at Boston’s Logan Airport, begun building the first Polished center, added an operations manager and a retailing expert to her team, and started hiring staff from nail salons and department-store cosmetics counters. “It feels really good to have something you worked so hard for come to reality,” she almost bubbled.
Still to come were the hurdles of seeing whether customers would materialize, and if so, whether she could attract the means to expand to Atlanta and Newark, where airport lease negotiations were again proceeding. Whatever external resources Rhyne would need to sustain her vision, her 18 months of mostly lonely, shoestring operations had equipped her with some essential inner ones. “I believe 120 percent in what I’m doing,” she said, well before the Boston site took shape. “If you didn’t have that, you wouldn’t have the energy to get up in the morning. You really enjoy the good days, because there are a lot of bad days right now. But I’d personally prefer to have those high days rather than a lot of middle days—that’s why I didn’t go back to corporate America.”
. . .
One of the most ambitious current experiments in “knowing” and “being known” has taken shape recently in the Brookline offices of UPromise Inc. Its idea, conceived in 1999 by chairman and CEO Michael Bronner, had all the scale anyone could ask for: to create a national customer-loyalty program (like airlines’ frequent-traveler mileage points) which would pay consumers rebates on their shopping—not in free flights or discounts, but in tax-advantaged savings for their children’s or relatives’ college educations.
The business would require a huge technology infrastructure, to capture millions of consumers’ purchases and to direct company rebates on their spending (for credit-card and telephone services, automobiles, clothing, even soft drinks) to the customers’ college-savings accounts. Firms like Salomon Smith Barney that manage these new so-called “529″ savings plans would invest the rebates and maintain records showing enrolled families how much they had earned toward future education expenses—one of the longest-running loyalty benefits a company could hope to offer any customer. Beyond the daunting technology, Bronner’s notion also depended on persuading national partners to direct their marketing budgets toward this kind of unproven customer reward. And meeting both those challenges meant the new venture would need dozens of skilled people and lots of money.
The opportunity seemed right for Bronner, who had founded Digitas, a marketing-services firm that created customer-loyalty programs for clients such as American Express and AT&T. It also seemed a good fit for Jeffrey J. Bussgang, MBA ’95, whom Bronner recruited late in 1999 to be UPromise’s president and chief operating officer. Last March, almost precisely when the NASDAQ Composite Index peaked above 5,000, the company—a few months old, with a business plan and a few employees as its only assets—received $34 million in venture funding, giving it among the richest initial valuations accorded such an early-stage enterprise. Cash and vision in hand, they courted senior managers from Lycos, Disney, Merrill Lynch, and elsewhere to launch the engineering, marketing, and branding that the company would need to operate, and began calling on prospective partners whose millions of customers could be lured by college savings.
A classic example of “simultaneity,” the work involved what Bussgang called “the dance of a dreamweaver”: selling venture capitalists on the potential size of the market (“This is going to be huge”) and promising them seasoned managers and top-tier business partners; recruiting people by assuring them of adequate financing and powerful partners; and securing partners by explaining the power of the customer reward, UPromise’s financial strength, and the depth of its management. Having set this “cycle of spiraling expectations in motion,” Bussgang said, “When you get back home, after flying coach and staying in the Holiday Inn, you sweat like hell” to make it all come true.
By mid-year, UPromise’s 70 employees sprawled across a floor of open spaces and clustered desks, their telephones sometimes resting on the carpet where furniture had not arrived. Things seemed to be moving fast even for the placid Bussgang, who said, “It’s a real challenge putting together a group of people who have never worked together, and getting them to work together like eight oarsmen in a crew who have practiced on the Charles for four years.” The company announced a strong board of directors and an all-star advisory board of business leaders, educators, and two former governors. It signed a letter of intent with Coca-Cola to be a lead partner offering customer rebates.
By July, however, half the initial financing had been spent, and UPromise was “burning” the rest at a rate that could exhaust it before year-end.
But even as the number of employees exceeded 100 and the launch date for UPromise services slipped from autumn into 2001, the alignment of opportunity, knowing and being known, and a group of credible employees garnered the company a second round of venture capital. That November infusion of $55 million bought 18-plus months of “runway,” Bussgang said, to get beyond the “hope and buzz” stage and into real operations.
In January, AT&T joined Coca-Cola as an announced partner, and live testing of UPromise’s service began. The company still confronted the formidable difficulties of putting an extremely complex business on line and enrolling consumers through its partners. But the fact that it had raised $90 million and assembled an experienced staff during a highly volatile period for such start-ups itself seemed a milestone, and a symbol of the enterprises that might be imagined and attempted in an American economy with deep reserves of risk capital and the people willing to pursue the potential rewards of using it.
. . .
Todd Krasnow, MBA ’83, typified the historic Harvard Business School mid-career entrepreneur when he celebrated the opening of the first Zoots store in October 1998. But how had he—self-described as “not a clothes person”—come by his newfound obsession with missing buttons and perfectly pressed pleats?
Krasnow worked at General Foods for two years, developing fast-food products for the home kitchen. Then he joined the Jewel Companies, a food retailer, first bagging groceries at a Star Market in Cambridge, and later managing an underperforming store in Attleboro, Massachusetts. He moved on to join the launch of Staples, managing that company’s West Coast operations and international joint ventures, and finally assuming responsibility for all sales and marketing. But by 1996, when an investor group asked him to run a new venture, Krasnow said, Staples “had kind of lost something for me.” [Staples' head Thomas G.] Stemberg agreed to back him in exploring new businesses. Each ultimately invested $250,000 in a partnership to fund research on dry cleaning, an industry Stemberg had monitored for several years, where they were attracted by customers’ very basic needs and a strong likelihood of repeat sales.
Krasnow learned that dry cleaning was an $8-billion business in the United States, divided among 34,000 owners who operated 45,000 stores. Customers chose the nearest outlet and entrusted it with their garments until poor service drove them to find another cleaner. The business, in other words, was highly fragmented and, because of repeat sales, “an annuity.” In combination, those traits held the promise of building what Krasnow called “a very big company in an industry that does not have big companies.”
His plan was to improve the service for “time-starved people” through such amenities as extended hours, drive-through windows, and 24-hour drop-off and pick-up using secure lockers. In the spring of 1998, Krasnow and Stemberg each invested another $1 million, and secured an additional $1.5 million from family members and friends. From the outset, Krasnow said, it was clear that the challenges would be operational, not technological or financial, and that dealing with professional investors such as venture-capital firms up front would bring about additional demands, but little in the way of immediately needed operating expertise.
From the October 1998 opening through the end of last year, Zoots mushroomed into six states, with 41 retail locations and 124 home-delivery routes served by purple Zoots vans. Krasnow and his management team oversaw nearly 1,000 employees who served 150,000 active customers. The company’s sales in 2000 approached $30 million, and it planned to double revenues this year.
Krasnow sounded confident about the business at the end of 2000. Zoots had deliberately slowed its growth to focus on resolving operational problems, reducing mistakes dramatically while still sustaining more than sufficient gains in sales to satisfy investors. The delivery routes proved a blessing in disguise, given still-tight real estate and labor markets, and more of the growth planned for 2001 focused on adding routes than on opening new retail stores. Cash flow was growing, and Krasnow was confident he could arrange another round of private financing, which should suffice to carry the company through to profitability in 2002. New market opportunities were arising, such as providing dry cleaning through grocery-store chains and contracting with insurers to restore clothes permeated by smoke and soot in fires.
When one of Myra Hart’s students asked Krasnow whether he would now counsel starting a business right out of school or gaining experience in a company, Krasnow said, “The laws of economics haven’t changed, and the laws of competition haven’t changed” just because of the Internet. “The more tools you have in your tool kit, the more chance you’ll have to succeed.”
“Whatever area they choose,” Krasnow said of would-be entrepreneurs, “they’ve got to pick something they like to do, and work hard, and not worry about the rest — success will come.” After a decade of learning what it takes to run a business, he said, “I’m very glad I’ve done this. It’s terribly exciting to be writing my own job description as I go along — I feel like it’s a fairy tale. It’s not for everybody, but I love it.”

Identification with the leader: why the public want leaders, and why they are right

aelhusseiny — Thu, 25 Jun 2009 15:13:15 +0000

People want a face, a person, who they can connect to. Not merely an anonymous organisation or set of principles. We aren’t brought up on such anonymity. We aren’t used to it. Our social forms sit ill with it. That’s why we introduce ourselves at meetings. Indeed, at any social gatherings.

The need to connect, to identify, is rooted deep in our heritage as human animals who flourish best in relatively small-scale localised groups where trust is relatively easy because the people in the group are mostly known to us.

This is a Green ideal. Not anonymous mass society.

Leadership works for us humans cognitively – it gives us a name, a face, a person, who is recognisable, accountable, knowable. You can get to know a person; You can’t really get to know a principle or an organisation. You can get to know Jenny Jones or Caroline Lucas or Adrian Ramsay.

But, under the Green Party’s current rules, you aren’t allowed to really project one of them as a personality, as someone whose name is on the line, as someone who can embody what the Party stands for… The public want us to have a Leader because they want us to be successful; but, more than that, they want us to have a leader just so that they can get to know us. So that they can see who we are.

And I think that it would work really well for us to have one or two figures actually at our head, to go up directly against Brown or Campbell or Cameron (or (God forbid) Griffin…); because for instance while these grey politicians cannot point to living a seriously green lifestyle themselves, our leader(s) could.

You would never catch Caroline Lucas cycling along with a chauffeured Lexus driving along quietly behind her!

We are missing a huge opportunity to communicate our message effectively to the public, by not having a face that they can identify, a life that they can measure up to our ideals, a person embodying our Party that represents it to them. A leader.

10 Deadly Sins of Negative Thinking

aelhusseiny — Tue, 23 Jun 2009 14:21:12 +0000

The way to overcome negative thoughts and destructive emotions is to develop opposing, positive emotions that are stronger and more powerful. – Dalai Lama

Life could be so much better for many people, if they would just spot their negative thinking habits and replace them with positive ones.

Negative thinking, in all its many-splendored forms, has a way of creeping into conversations and our thinking without our noticing them. The key to success, in my humble opinion, is learning to spot these thoughts and squash them like little bugs. Then replace them with positive ones. You’ll notice a huge difference in everything you do.

Let’s take a look at 10 common ways that negative thinking emerges get good at spotting these patterns, and practice replacing them with positive thinking patterns. It has made all the difference in the world for me.
10 Deadly Sins of Negative Thinking

1. I will be happy once I have _____ (or once I earn X).

Problem: If you think you can’t be happy until you reach a certain point, or until you reach a certain income, or have a certain type of house or car or computer setup, you’ll never be happy. That elusive goal is always just out of reach. Once we reach those goals, we are not satisfied we want more.

Solution: Learn to be happy with what you have, where you are, and who you are, right at this moment. Happiness doesn’t have to be some state that we want to get to eventually it can be found right now. Learn to count your blessings, and see the positive in your situation. This might sound simplistic, but it works.

2. I wish I were as ____ as (a celebrity, friend, co-worker).

Problem: We’ll never be as pretty, as talented, as rich, as sculpted, as cool, as everyone else. There will always be someone better, if you look hard enough. Therefore, if we compare ourselves to others like this, we will always pale, and will always fail, and will always feel bad about ourselves. This is no way to be happy.

Solution: Stop comparing yourself to others, and look instead at yourself what are your strengths, your accomplishments, your successes, however small? What do you love about yourself? Learn to love who you are, right now, not who you want to become. There is good in each of us, love in each of us, and a wonderful human spirit in every one of us.

3. Seeing others becoming successful makes me jealous and resentful.

Problem: First, this assumes that only a small number of people can be successful.. In truth, many, many people can be successful in different ways.

Solution: Learn to admire the success of others, and learn from it, and be happy for them, by empathizing with them and understanding what it must be like to be them. And then turn away from them, and look at yourself you can be successful too, in whatever you choose to do. And even more, you already are successful. Look not at those above you in the social ladder, but those below you there are always millions of people worse off than you, people who couldn’t even read this article or afford a computer. In that light, you are a huge success.

4. I am a miserable failure I can’t seem to do anything right.

Problem: Everyone is a failure, if you look at it in certain ways. Everyone has failed, many times, at different things. I have certainly failed so many times I cannot count them and I continue to fail, daily. However, looking at your failures as failures only makes you feel bad about yourself. By thinking in this way, we will have a negative self-image and never move on from here.

Solution: See your successes and ignore your failures. Look back on your life, in the last month, or year, or 5 years. And try to remember your successes. If you have trouble with this, start documenting them keep a success journal, either in a notebook or online. Document your success each day, or each week. When you look back at what you’ve accomplished, over a year, you will be amazed. It’s an incredibly positive feeling.

5. I’m going to beat so-and-so no matter what I’m better than him. And there’s no way I’ll help him succeed he might beat me.

Problem: Competitiveness assumes that there is a small amount of gold to be had, and I need to get it before he does. It makes us into greedy, back-stabbing, hurtful people. We try to claw our way over people to get to success, because of our competitive feelings. For example, if a blogger wants to have more subscribers than another blogger, he may never link to or mention that other blogger. However, who is to say that my subscribers can’t also be yours? People can read and subscribe to more than one blog.

Solution: Learn to see success as something that can be shared, and learn that if we help each other out, we can each have a better chance to be successful. Two people working towards a common goal are better than two people trying to beat each other up to get to that goal. There is more than enough success to go around. Learn to think in terms of abundance rather than scarcity.

6. Dammit! Why do these bad things always happen to me?

Problem: Bad things happen to everybody. If we dwell on them, they will frustrate us and bring us down.

Solution: See bad things as a part of the ebb and flow of life. Suffering is a part of the human condition but it passes. All pain goes away, eventually. Meanwhile, don’t let it hold you back. Don’t dwell on bad things, but look forward towards something good in your future. And learn to take the bad things in stride, and learn from them. Bad things are actually opportunities to grow and learn and get stronger, in disguise.

7. You can’t do anything right! Why can’t you be like ____ ?

Problem: This can be said to your child or your subordinate or your sibling. The problem? Comparing two people, first of all, is always a fallacy. People are different, with different ways of doing things, different strengths and weaknesses, different human characteristics. If we were all the same, we’d be robots. Second, saying negative things like this to another person never helps the situation. It might make you feel better, and more powerful, but in truth, it hurts your relationship, it will actually make you feel negative, and it will certainly make the other person feel negative and more likely to continue negative behavior. Everyone loses.

Solution: Take the mistakes or bad behavior of others as an opportunity to teach. Show them how to do something. Second, praise them for their positive behavior, and encourage their success. Last, and most important, love them for who they are, and celebrate their differences.

8. Your work sucks. It’s super lame. You are a moron and I hope you never reproduce.

Problem: I’ve actually gotten this comment before. It feels wonderful. However, let’s look at it not from the perspective of the person receiving this kind of comment but from the perspective of the person giving it. How does saying something negative like this help you? I guess it might feel good to vent if you feel like your time has been wasted. But really, how much of your time has been wasted? A few minutes? And whose fault is that? The bloggers or yours? In truth, making negative comments just keeps you in a negative mindset. It’s also not a good way to make friends.

Solution: Learn to offer constructive solutions, first of all. Instead of telling someone their blog sucks, or that a post is lame, offer some specific suggestions for improvement. Help them get better. If you are going to take the time to make a comment, make it worth your time. Second, learn to interact with people in a more positive way it makes others feel good and it makes you feel better about yourself. And you can make some great friends this way. That’s a good thing.

9. Insulting People Back

Problem: If someone insults you or angers you in some way, insulting them back and continuing your anger only transfers their problem to you. This person was probably having a bad day (or a bad year) and took it out on you for some reason. If you reciprocate, you are now having a bad day too. His problem has become yours. Not only that, but the cycle of insults can get worse and worse until it results in violence or other negative consequences for both of you.

Solution: Let the insults or negative comments of others slide off you like Teflon. Don’t let their problem become yours. In fact, try to understand their problem more why would someone say something like that? What problems are they going through? Having a little empathy for someone not only makes you understand that their comment is not about you, but it can make you feel and act in a positive manner towards them and make you feel better about yourself in the process.

10. I don’t think I can do this I don’t have enough discipline. Maybe some other time..

Problem: If you don’t think you can do something, you probably won’t. Especially for the big stuff. Discipline has nothing to do with it motivation and focus has everything to do with it. And if you put stuff off for “some other time”, you’ll never get it done. Negative thinking like this inhibits us from accomplishing anything.

Solution: Turn your thinking around: you can do this! You don’t need discipline. Find ways to make yourself a success at your goal. If you fail, learn from your mistakes, and try again. Instead of putting a goal off for later, start now. And focus on one goal at a time, putting all of your energy into it, and getting as much help from others as you can.. You can really move mountains if you start with positive thinking.

Goals and Leadership

aelhusseiny — Mon, 22 Jun 2009 22:31:15 +0000

One of my goals has always been that of Leadership. Some of us are born to lead, while others have to find it within themselves.

Goals play a role in becoming a leader. The more attempts you make at achieving your goals, the more experience you have. The more goals you score, the more confident you become. And with confidence comes leadership.

People need leaders around them. Although I may be thought of as a leader, I too, welcome other leaders around me. One place you can find leaders in your community is with TOASTMASTERS.

I recently joined a local chapter here in Florida. I was pleasantly surprised with what I found. People learning Leadership skills, Speaking Skills, and more. It’s a great training ground to learn, make mistakes, try again, and hone your skill set. You learn to walk with confidence. Speak clearly at a local meeting, social gathering, or other event. Carry yourself with respect to those around you.

If you are in any type of business where you need to be heard, you can get the training you need from your local group. If you are a Network Marketer, Sales Person, Teacher or have aspirations of being the next Oprah, Check it out.

Since Toastmasters is a club, you must be voted in by your peers. It’s a well organized group. And yes, I was voted in. Once they found out my background, they made me Public Relations Director – LOL

Set your Goals and Score!
Become a Leader.

It’s one of the best things you can do not only for yourself, but your family and friends around you!

Winning Or Losing

aelhusseiny — Sun, 21 Jun 2009 19:41:30 +0000

Hi, Great to be with you again.

Today’s topic is Win or Lose.

Have you ever felt like a winner? On top of the world? Everything is great! What an accomplishment?

Think about that for a moment.
How does your body, mind and spirit feel about winning?
You’re standing tall, big smile, confident and proud.

Awesome.

Now what about the other side?
Losing. Failure. Defeat.

Body is weak. Mind is confused. Spirit is broken.
You are holding your head down, sad, angry or upset.

Terrible.

If you had your choice, which would you pick?
Winner or Loser?

I’ll take winner. Every time.

Winner = Finisher
Loser = Quitter

Finish. Don’t Ever Quit.

Winner = Stand Tall, smile, powerful
Loser = Hunched over, sad, weak

Stand Up. Put your body at the position of winner. You’ll feel like it.

Winner = Give a gift of joy or happiness to others. Participate.
Loser = Selfish. I want, I need. Alone

Get out there and have fun. Laugh.

Winner = I Will Do It, I Am Doing It, I Have Done It.
Loser = I Will Not, I Am Not, I Have Not.

Easy. No “Not’s” and you’re a winner.

I told a friend if mine few weeks ago,“You see my friend, being a winner is a lot easier than you think. You can be a winner in everything you do. To win is to love, laugh, enjoy the moment you’re in. To participate with others and be nonjudgmental. To be the best you can be in the moment. Not tomorrow, not yesterday, but right now.

That makes you a winner.

A loser? There is no need to discuss it. Drop it. Let it fall away from you. You were never one to begin with.

Have a fantastic day today. Do something different. Something enjoyable. Put a smile on someone’s face. “

and finally, always remember guys we all are winners!

Want to Be an Entrepreneur? [Part I]

aelhusseiny — Thu, 18 Jun 2009 07:06:49 +0000

What applications might they suggest, William A. Sahlman asked his students, for “electronic ink”—particles and dyes, embedded in a surface, that could be charged to form changing texts without the bother of paper and printing? The class snapped to attention, and a swarm of ideas buzzed down from the semicircular banks of seats in Aldrich 9. Price tags (retailers wouldn’t have to re-mark them for discounted sales). Billboards. Sheet music (self-turning scores). Eyeglasses with news headlines projected inside the lens (prompting Sahlman to interject, “So, as you’re purportedly watching me…”). Newspapers with built-in refreshable video. Menus (no more regrets from the waiter that the daily special is sold out). Maps. Camouflage clothing that changes in different lighting (Sahlman again: “So if you hadn’t read the case and wanted to disappear…”).
Clearly the students, enrolled last fall in one of three sessions of Harvard Business School’s elective “Entrepreneurial Finance” course, found the possibilities intriguing. They were having fun. But then Sahlman, who was having as much fun as anyone, had to rein it in. Asserting his pedagogical role (himself MBA ’75, PhD ’82, he is D’Arbeloff MBA Class of 1955 professor of business administration and cochair of the school’s entrepreneurship and service management unit), he pointed out that none of these ideas was a business. Indeed, technological euphoria and the seemingly limitless potential of new ideas could be inimical to operating a real business. All fall, the news had been sobering, as the dot-com bubble deflated, paring billions—ultimately trillions—of dollars of stock-market value from the “idea” companies that had been spawned, many by Harvard MBAs, and funded in a two-year orgy of enthusiasm for Internet enterprises. “At some boards of directors,” he said, driving the point home, “they institute a $50 fine for every new application you think of.”
That challenge faced E Ink Corporation, the subject of the class’s case discussion, every day. Founded in 1997 to revolutionize the mundane printing business with new display technology, the company had its eye on multibillion-dollar markets like electronic newspapers. But to realize that vision, its scientists had to get into harness with business people and apply themselves to routine tasks like perfecting their technology, learning how to manufacture it, and financing the needed investments in research, development, and marketing through a combination of product sales and venture funding.
And so emerged several lessons beyond the technicalities of finance. In 80 minutes of give-and-take among students, professor, and manager, the class touched on the tension between the romance of ideas and the reality of enterprises, the conflicting motivations of the participants in an immature business, and the staged growth and resource needs of a young enterprise. Financial acuity counts, to be sure, but as Wilcox explained and E Ink’s experience made clear, its prospects depend on a welter of fundamentally human choices.
Twenty minutes after Sahlman’s finance students finished dissecting E Ink and one floor up in Aldrich Hall, Myra Hart’s “Starting New Ventures” class prepared to talk by speaker phone with one of the computer era’s most successful “serial entrepreneurs.” After the students reviewed a case that involved setting the price for Handspring Inc.’s first public stock offering, cofounder and CEO Donna L. Dubinsky, MBA ’81, got on the telephone. Faced with accepting $20 million less than anticipated from the stock offering, she told the class, the company never hesitated. It had chosen to go public in mid-2000—after two years of existence and two quarters of selling its Visor handheld computers—to establish its staying power with customers and suppliers in its fast-growing market, and to facilitate possible acquisitions.
Prior to jointly founding IWA, the three had worked in management consulting and investment banking: each, however, did have substantial experience with beer.
HBS professor William Sahlman
With that, Hart guided the conversation to broader topics pertaining to venture formation. Her first-name rapport with Dubinsky reflected more than their experience as business-school classmates. Beyond serving as MBA Class of 1961 professor of management practice and co-head of the entrepreneurship and service management faculty, Hart, MBA ’81, DBA ’95, had direct knowledge of her course material: in 1985, she was one of the four founding officers of Staples Inc., the office-products retailer whose sales now exceed $10 billion per year.
Hart wanted her budding entrepreneurs to hear how Dubinsky’s early days at Handspring differed from the conditions she had encountered at Palm Inc., which she had joined in 1992 (following a decade in the computer and software industries), just after the company was founded to develop handheld computing devices. Like E Ink, Palm sought to create a new market based on seemingly promising technology—and its first designs didn’t work. She and her management colleagues were unknowns, and the product failures subtracted from their slight credibility. And at the time, she said, “the capital markets were totally different,” with venture financing rounds of $500,000 the norm for a company with Palm’s record and prospects.
Handspring’s birth, in July 1998, was huge news in the high-technology industry. Dubinsky and her colleagues had made an enormous success of PalmPilot and its operating system, and that core management team now promised newer and better things in a booming business. Their credibility translated into tangible benefits for the new entity: the ability to recruit personnel and to entice suppliers (vital for companies like Handspring, which outsources its manufacturing); favorable relationships with retailers; and access to capital, in a venture-financing market that had rebounded from a feeble state after the recession in the early 1990s (only $1 billion was committed in 1991) to unprecedented strength as the decade ended (with weekly commitments exceeding $1 billion). Given that context, Dubinsky said drily, Handspring was launched with “a whole lot less ambiguity.”
In the lessened “ambiguity” of the Palm-to-Handspring story lay many of the lessons Hart hoped her second-year students would hear as their teams raced toward end-of-semester classroom presentations of their own business plans—for firms ranging from child-care services to a buyout fund focused on media properties. She began a conversation in her office in South Hall, now home to the business school’s entrepreneurship and services faculty, by describing how “Starting New Ventures” evolved from an existing course on product development. “My response was that there’s a big difference between a really great product and a company,” she said. Given the constraints of costs and the problems of marketing, to cite only two factors, “Starting new businesses is a much more complicated task.”
Hart’s new-ventures course was designed to focus on those challenges “horizontally”—across all the functions managers need to address from the original business plan through the first eighteen months of an organization’s life. For companies that are “up and running,” she said, “we have 100 other courses already.” Such is the pace of business development that “Starting New Ventures” has spawned its own spin-off this year, a separate course focused on launching technology ventures. That has let Hart’s class focus more on retailing, services, and other “old economy” businesses, and has perhaps skewed its enrollment more toward international, minority, and women students, who perceive opportunities to start new businesses in underserved communities earlier in their careers than ever before.
Her course has evolved into a practicum, alternating cases with students’ business plans — the latter evolving with guidance from venture capitalists, attorneys, and business “incubators” who specialize in nurturing nascent firms for an ownership stake or fees. For those who listen, Hart and the participating managers from companies covered in case studies have leavened every technique with a broader perspective. That began early in the semester, when Hart challenged students to ask, “What is opportunity, how do I either discover it or create it, how do I evaluate it in the framework of others that might be available?” Their answers, she hoped, were not solely financial or technological, but “very personal — it depends on you and what you bring to the opportunity.”
The cases and exercises then marched through “the parameters of a well-designed, de novo business,” she said, from focus (“the difference between a good idea and a well-functioning business model”), through capability (what it takes to execute a plan and gain access to needed resources, owned or not, over time), to scalability (“These students are not small-time operators, aiming to run the best restaurant in town”) and adaptability. No one who has taken an entrepreneurship course at Harvard has evaded this last point—the problem, as Hart put it, of “how nothing ever proceeds according to plan, and how you adapt strategically and tactically.” Should a start-up survive, cases studied later in the course emphasized finance, human resources, and the processes on which “growth and scale depend” in the larger enterprise.
“My research,” said Hart, professor and entrepreneur, speaking from experience, “is all about the importance of experience. The subtle message is that here are people who did well the first time—and a lot better the second time.” For the people who established a company like Handspring, she said, the essential difference was the degree of knowledge—both “knowing,” on the part of entrepreneurs who can prepare themselves for what they face, and “being known,” by networks of other people who can supply the thousand things it takes to fuel a business.
Here is how William Sahlman, business educator and scholar, began a paper, “Some Thoughts on Business Plans,” much used—and cited — by the current crop of entrepreneurs:
[Sahlman] smiled as he was handed the business plan for Internet Wicket Ale Inc. (IWA), an interactive, on-line marketing company being formed to sell premium beers made by microbreweries over the Internet. According to the president of the company—a soon-to-graduate MBA candidate at a well-known eastern business school, a prototype Web site had already been developed…. [A]n early review had described the Web site as “way cool.” Participating in the meeting were two other MBA candidates. Prior to jointly founding IWA, the three had worked in management consulting and investment banking: each, however, did have substantial experience with beer.
For all its value as a (largely unheeded) cautionary note about the Internet investment bubble, from its first sentences the paper also captured Sahlman’s central approach to the phenomenon he studies and the way he teaches it. In a separate discussion, he said, “The core idea — an innovation in entrepreneurial finance—is to make prominent the role of people in making decisions.” Thus an early reading for the “Entrepreneurial Finance” course, on the nature of financial contracting (“deals”), highlighted immediately the “contractual impossibility theorem: there exists no perfect deal.” Even initially good deals, in other words, have collapsed as perceptions changed.
Early sessions of the course (taken by more than half the second-year MBA students since 1986) introduced the human factors underlying the seeming paradoxes of venture financing. Entrepreneurs have found, for instance, that venture capitalists provide cash only in stages, rather than in an initial lump sum (E Ink’s $200-million problem). In supporting inherently risky start-ups, they place a high value on the “option to abandon” funding—to terminate the experiment if it appears unpromising, and to cut their losses. This model—organizing a business so it is “scheduled to run out of capital periodically,” as Sahlman has written—has naturally proven effective in concentrating entrepreneurs’ energies. But they have benefited, too, because the planned plunges over the cliff have also given successful entrepreneurs opportunities to raise subsequent rounds of funding at ever-higher company valuations, preserving more ownership rewards for the founders and their fellow managers.
Applying these dynamics to all parties in deals (investors, employees, suppliers, and so on), Sahlman has concluded that the proper way to analyze any decision is to begin looking at what can go wrong, then at what can go right, and what decisions can maximize the reward-risk ratio. The answers have always had to be sought in human terms. Thus, he counseled, the way to read a business plan is from the back, where the venture’s principals describe their experiences. Thus also “one of the most important lessons of entrepreneurial finance: from whom capital is raised is often more important than the terms”—because involved investors help recruit key managers, establish sales contacts, and more.
As Sahlman guided the students through the term sheets for various financings, he gave equal weight to analytical tools and human risk factors. One deal demonstrated why entrepreneurs might offer costly guarantees up front for their investors—in return for greater payoffs for the founders if their company flourished. Another was fatally flawed because it gave the initial investor little incentive to supply more money, and also discouraged others from stepping forward to join a second round of financing.
Even as he provided formulas for valuing the likely returns from deals, Sahlman reminded the class, “The short answer to most questions I’m asking this morning is, ‘I have no idea.’” He explained later, “The tendency in business schools for the last 20 years has been to fall back on a false prophet of analysis”—that with sufficient industry knowledge, market data, and statistical wizardry, “The answer would somehow mysteriously pop out and the right decision would be made. That’s just not the way I think the world works.”
In his pedagogy, he said, “The big idea is people making decisions about the world with large amounts of uncertainty. And the second big idea has to do with making experiments.” In other words, he has defined the new venture as an experiment, fueled by increments of funding, the purpose of each of which is to buy the company time to collect more information on its product or services, skills, customers, and competition—and, if the results are encouraging, to proceed to the next stage of funding and operations. For a serial entrepreneur like Donna Dubinsky, much of that extra information already existed—limiting the “ambiguity.” “A good experiment,” Sahlman said, “is the right people with the right amount of resources doing the best they can.”

Putting Goals in Perspective

aelhusseiny — Thu, 18 Jun 2009 07:06:03 +0000

Hi,
How are you? I hope the answer is “Great”!

For this weekend, I have another task for you and your goals.

PUTTING YOUR GOALS IN PERSPECTIVE
The old saying is “Don’t make a mountain out of a mole hill”

Thats what most people do when thinking about their goals. They don’t achieve them because they make them so much larger than they really are. And most of that thought is that it will take a long time to accomplish.

Is that really true?

Here’s what I want you to do:
Write down your specific goal on the left side of the page, and then write down how long it will take, in Hours and minutes.

For Example:
Let’s say that you have to clean out that old closet. You’ve been putting it off for years. Every time you look in there it just seems like a mess. You think to yourself, “Someday I’ll get around to it. But its going to take forever”.

If it really would take “forever” you’ll never get around to it.

In reality, it would probably take you about 60-90 minutes.

That’s it. 60-90 minutes.

It’s certainly a lot more attainable than “forever” right?
60-90 minutes is EASY.

Now let’s make it fun -
1. get some old clothes on, so if you get dirty, it doesn’t matter.
2. Make a pitcher of your favorite beverage: Iced Tea, Ice Water, Fruit Juice, etc.
3. Put on your favorite music (not TV – that will distract you from your job!)
4. And Clean that Closet!

In 60-90 minutes, you will have accomplished a great goal, enjoyed a cool drink, and listened to some great music.

It doesn’t get easier than that. And you will feel great for your accomplishment!

——————————-
So take time this weekend, write down the actual time it takes to achieve a specific goal. Get into your fun suit, and go for it.

Let me know how it works for you!

Hello world!

aelhusseiny — Tue, 16 Jun 2009 15:25:45 +0000

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