Category: Entrepreneurship

19- Feb2014
Posted By: Brett Andrews

People don’t buy WHAT you do, they buy WHY you do it.


Simon Sinek: How great leaders inspire action: WHY?

Contrary to popular belief, if you build it does not mean they will come. There is a reason why companies like Dell can make a product like an MP3 and not be successful but other companies like Apple can. By focusing on ?why? you do something rather than ?what? you do can cause others to buy into your business. Watch Simon Sinek describe why this happens in the video above.

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06- Feb2014
Posted By: Brett Andrews

Seth Godin: Why I Want You to Steal my Ideas

Seth Godin: Why I want you to steal my?ideas

Godin's Ideas
By Seth Godin

Please don?t steal my car.If you drive away with it, I won?t have it any more, which is a real hassle.Please don?t steal my identity or my reputation either. Neither travels well, and all the time you?re using it, you?re degrading something that belongs to me.But my ideas? Sure, yes, please, by all means, take them.The scarcity underlying the industrial economy (what?s not yours is mine) has pushed us to make a mistake about ideas. If everyone in town comes to my plant and takes a free?sample of what I make, I?ll go bankrupt. But if everyone in the world takes a free sample of one of my ideas (or at least one of my good ones), we?ll all get richer.

I got an email from a reader last week. She was spitting angry at another blogger and wanted me to lower the hammer on him. According to my loyal reader, he had plagiarized?many of my ideas, writing one post after another that, while not using my words, clearly demonstrated to her that he was hunting on my land.

Not true, I assured her. He hadn?t plagiarized anything, he had built something new, by synthesizing ideas and experiences to invent the next step, a step available to all of us.

It?s not my land. It?s ours. And no one is hunting? If anything, we?re farming, and all the cross-pollination going on helps everyone.

How dare we criticize an inventor or an author or a leader for, ?stealing someone else?s ideas.? Ideas can?t be stolen, because ideas don?t get smaller when they?re shared, they?get bigger.

That?s one reason why the rise of patent trolling among otherwise upstanding innovators is so troubling. The patent troll uses the specter of long, drawn-out litigation to extort?money from completely innocent entrepreneurs. The patent troll is selfish, spinning out untruths for personal profit ? he belongs under a bridge somewhere, not on stage or on?our bookshelf. The chilling effect of this mistaken understanding of the moral and legal implications of idea theft is huge.

What patent trolls won?t talk about, because they have no standing and no proof, is the fact that an expensive, bureaucratic patent system does nothing at all to increase the?likelihood that new ideas will be created and most important, that new productivity will arise. Patents weren?t developed to protect ideas (ideas can?t be patented) but the?specific execution of useful innovations.

Trolls and their copyright-defending brethren would like to amplify a cultural shift, one that?s left over from the days of Henry Ford and Frank Sinatra. They?d like people to be?afraid to steal ideas. We don?t need to shun those that steal ideas. We need to chastise those that think that this is a problem.

Matt Ridley has famously pointed out that no one knows how to make a computer mouse. You need the assembled talents of a metallurgist, a plastics specialist,?someone in supply chain management, a software whiz, etc. The productivity of our generation isn?t the productivity of the efficient assembly line (that?s old school). No, our?productivity is the productivity of connection.

The connection economy steps in just as the glory days of the industrial age begin to fade. The connection economy rewards coordination, sharing and trust. All three of which?are built on our species? unique ability to steal ideas.

When two people meet on the dance floor, an exchange of ideas takes place. My move, your move. When two people play chess, they each get a little smarter. And when a chef?joins another in the kitchen, the unspoken exchange of ideas moves the state of the art forward.

Is it theft to put raw fish on seasoned rice? What about serving a pizza grilled on coals without crediting Al Forno in Rhode Island? At what point can we stop calling it stealing?and start calling it merely delicious?

There is, of course, a difference between stealing and passing off. When you pretend that those taken words are your words, you?re no longer taking an idea ? you?re taking an?implementation. When you pretend that you are the originator, the original source, and you?re not, you?ve corrupted your work by claiming authorship, when you are merely?contributing synthesis. This hurts your reputation as well as the person you stole from, because our society values authorship and origination.

The amazing thing about giving credit, though, is you never run out. Like ideas, the more credit is shared, the more it can be worth, to the giver and to the recipient.

Last thing: With the ability to steal comes responsibility. Not just the responsibility to synthesize something better than what you started with, but the obligation to relentlessly?seek out the next thing worth stealing. We?ve created a bucket line. Our economy is a long line of people handing ideas up and down the line, improving and customizing at?each step. When you stop seeking and merely consume, you let us all down.

And yes, sure, please steal this idea. But make it better first, okay?


28- Jan2014
Posted By: Brett Andrews

Why EBITDA is Not Cash Flow

Why EBITDA is Not Cash Flow

on?January 28, 2014?by?Cody Boyte


There is often a misconception that EBITDA is synonymous with cash flow. While most seasoned deal professionals are careful to remember the distinction, some company owners (or entry-level analysts) can benefit from a friendly reminder.

The EBITDA metric gained prominence with the arrival of the?LBO?industry in the 1980?s, as buyout firms used it to estimate how much debt a company could take on, a key component of the LBO strategy. While EBITDA has become standard in company valuation ? purchase prices and loan covenants are often quoted as multiples of EBITDA ? the metric is not uniformly defined under GAAP standards and its calculation varies from company to company. This variation can lead to disparities and misunderstandings about the true cash-generative abilities of a business.

EBITDA does not take into account any capital expenditures, working capital requirements, current debt payments, taxes, or other fixed costs which analysts and buyers should not ignore. The cash needed to finance these obligations is a reality if the business wishes to grow, defend its position, and maintain its operating profitability.

Here are three costs that are not included in the EBITDA calculation, and their omission tends to overstate operating cash flows:

Capital Expenditures

Certain industries like heavy manufacturing, shipping, aviation, telecom, clean technology and oil and gas require heavy ongoing or up front investments in equipment. EBITDA does not take into account capex, the line item that represents these significant investments in plant and equipment.?Ignoring capital expenses to inflate EBITDA by $3.8B precipitated the bankruptcy of WorldCom. Essentially, the company capitalized operating expenses, allowing them to be depreciated over time, thus decreasing operating expenses and boosting EBITDA.


?The biggest problem I encounter is an over or underestimation of capital expenses for asset-heavy companies such as trucking. Adding back all depreciation for a company like this without leaving an allowance for capex can grossly overestimate the available cash flow. However, not adding back any depreciation can underestimate the cash flow, especially if the company uses accelerated depreciation,? advises Axial Member?Jaime Schell?of?Plethora Businesses. There have been more insidious cases of companies manipulating depreciation schedules to inflate EBITDA, such as?Waste Management in the mid-nineties extending the useful lives of its garbage trucks and overstating their salvage value.

Working Capital Adjustments

Businesses need to invest revenue back into the company to keep expanding. EBITDA does not account for changes in?working capital?and the cash required to run the daily operating activities. Ignoring working capital requirements assumes that a business gets paid before it sells its products. Very few companies operate this way. Most businesses provide a service and get paid in arrears. Ideally a business collects up front for its services and pays in as much time as possible to remain as liquid as possible and to quickly reinvest cash into profitable investments like inventory purchases. This relationship between sources and uses of cash speaks to a company?s ability to take on more projects such as higher debt payments in the case of an LBO.

While EBITDA is useful in that it allows for a back-of-the-envelope comparison of two companies with similar business models or in the same industry, a?2000 letter to Berkshire Hathaway shareholders written by Warren Buffet?put EBITDA in its place: ?References to EBITDA make us shudder?We?re very suspicious of accounting methodology that is vague or unclear, since too often that means management wishes to hide something.?

David Simmons at Forbes magazine once called EBITDA the ?device of choice to pep up earnings announcements.? It does not exist in a vacuum and is irrelevant on a standalone basis. It does help when comparing similar companies under time constraints, but is by no means a thorough valuation tool when making an important investment decision.


compliments of?



24- Jan2014
Posted By: Brett Andrews

5 Signs You?re A Wantrepreneur

Posted on??by??Jeetbanerjee

Wantrepreneur aspiring to be an entrepreneur


Wantrepreneurs are individuals that desire to be an entrepreneur, but aren?t one yet. Don?t be embarrassed if you are in the wantrepreneur stage because it?s a place where many individuals find themselves stuck at.

A terrible thing would be to a wantrepreneur without even knowing so. You must first figure out the problem before you can find the solution.

Here are 5 signs you?re a wantrepreneur instead of an entrepreneur:

1. You Talk, But Never Act

We all know that one person who tells us that they have the next million dollar idea, but they never do anything about it. Ideas are 1% while execution is 99% of the game. A billion dollar idea is worth?nothing?if it?s still an idea.

Work hard in silence and let success make the noise. Nobody will take you serious as an entrepreneur until you put your thoughts and ideas into action. If you?re going to talk the talk, you have to walk the walk.

How To Overcome: Stop talking about your ideas with people and start showing them. You?ll never know how great your ideas and thoughts are until you put them into action.?

2. You Make Excuses

I?ve got a bunch of friends that have big entrepreneurial dreams, but they never get started. I ask them why and they shoot out a variety of different excuses. It seems like they put more thought behind their excuses than they do their business ideas.

School, money, time, responsibilities, family, activities, and all other excuses are just obstacles. You can?t expect to find time, you have to make time if you really want to become an entrepreneur.

How To Overcome: Instead of making excuses, take action. You can prolong your business ideas as much as you want, but tomorrow will?still have similar barriers.?


3. You Keep Asking People To Read Over Your Business Plan

I?m going to say this publicly, business plans don?t mean shit. They?re an overrated document hyped up by colleges so that they have something to teach you about at business school. I?ve never written a formal business plan in the last 4 years.

If you?re putting your ideas into writing hoping for someone to read over it, you?re a wantrepreneur. Your business plan just like your idea doesn?t mean shit until it?s put into action. See the common theme? You have to take action to be an entrepreneur.

How To Overcome:?Stop pestering people about your business plan because it?s just a waste of paper. Certain parts of a business plan are good for organizing your thoughts, but they should be for your use only.


4. Your Goal List Has Nothing Crossed Off

New Years resolutions are the funniest things. Most people make an amazing list of goals and resolutions only to forget about them by the middle of January. Just because you set goals doesn?t mean you?re an entrepreneur.

If you have a large list of goals that aren?t getting done, you aren?t progressing forward. You must be getting ahead in order to progress in life. Entrepreneurs make goals and crush them!

How To Overcome: Don?t set goals unless you plan to actually get them done. Get friends and family to hold you accountable with consequences?if you don?t accomplish your goals.

5. You?ll Do Anything But Sell?

There is another type of wantrepreneur that actually innovates and builds things out, but refuses to get sales. We call this person the wantrepreneur because they?re purely an innovator and not an entrepreneur.

Entrepreneur?s make business decisions to fuel their innovations. Sales is tough, but it?s the foundation of your companies success. You cannot avoid doing sales if you truly want to become an entrepreneur.

How To Overcome: There is nothing wrong with not enjoying sales. If you don?t like it, you can find other smart people to take over the?business side of your company and generate the sales that you need.?


This article isn?t about putting people down, but rather about to help them discover that they?re a wantrepreneur. You must know what?s holding you back before you can propel yourself forward.?


photo credit:?pierofix


22- Jan2014
Posted By: Brett Andrews

Investing in Startups has Increased Significantly Over Recent Years

RockThePost?s 2013 Investor Trends Survey reveals interesting insights into the changing investment landscape and investment
attitudes among private investors today compared to 10 years ago. Upcoming regulatory changes with the JOBS Act will further
shape the investment world, allowing investors to invest in private companies for the first time in 80 years regardless of income
or net worth. The Investor Trends Survey also identifies some key characteristics of experienced angel investors ? those who
have experience investing in startups ? compared to non-angel or novice angel investors.
This special report contains a selection of the insights from RockThePost?s 2013 Investor Trends Survey, including:
? Investor portfolios consist of 15% more alternative investments now than 10 years ago
? Experienced angel investors have a lower percentage of mutual funds in their portfolios than novice and non-angel investors
? Investors are relying less on intermediaries to carry out their investments and more on direct investing methods
? The availability of investment tools, such as online trading platforms, and investors? experience with direct investing are the
main reasons they are encouraged to manage their portfolios.

12- Dec2013
Posted By: Brett Andrews

Persistence – Over 30% of leads are never contacted at all




Over 30% of leads are never contacted at all.
By just making a few more calls attempts, sales reps can experience up to a 70% increase in contact rates.

26- Nov2013
Posted By: Brett Andrews

Where Startup Capital Comes From

where start-up captial comes fromStartup Capital Sources

  • Friends and Family  $60BB
  • Venture Capital $22BB
  • Angel Investors  — $20BB
  • Banks $14BB
  • Crowd funding  $5.1BB


Where Startup Capital Comes From:

Friends and family, venture capital, Angel investors, banks, crowdfunding.



21- Nov2013
Posted By: Brett Andrews

Get on the roller-coaster ride of an Entrepreneur – Rider

Entrepreneur – Rider beware!

All Entrepreneurs suffer from wild emotional rides building their dream.

This particular piece happens to be ?a very cool video depicting the highs and LOWS of an entrepreneur.

As they say, a picture is worth a thousand words:

Entrepreneur Rollercoaster