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I will be doing my third workshop of the year for the Pino Entrepreneurship Center on Dec 2. The 3-hour workshop focuses on how to develop the business concept and the business model. The workshop is based on my book, Billion Dollar Company: An Entrepreneurs Guide to Business Models for High Growth Companies.
Registration details are here. Proceeds go to the Pino Center where I am on the Board.
Two friends sent me a link to this article from Huffington Post, "It's Harder to run a Non-profit than a Company". The article is written by Aaron Hurst, the founder of the Taproot Foundation and a two-time startup entrepreneur. Mr. Hurst's bio describes him as "a globally recognized social innovator and leading architect of the growing pro bono services movement". The article has an interesting theme but I disagree with several points. Hurst's points are below in bold, followed by my commentary.
Mr. Hurst's article appears to assume that non-profits rely almost exclusively on donations. I would point out that many social entrepreneurship ventures are also non-profits. A social entrepreneurship model may avoid many of the legacy issues of non-profits, such as board seats linked to donations, "business" as a dirty word and "doing good" as opposed to a results orientation. Perhaps Mr. Hurst just needs to bring more of his entrepreneurial experience to his management philosophy in social services. More on social entrepreneurship here and here.
The views expressed here are my personal views and do not represent the views of any organization with whom I am affiliated.
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After a few days of foreign travel I had a chance to hear President Obama's recent speech on the proposed build up of U.S. military forces and resources in the Asia Pacific region. With the runup to the 2012 presidential elections, I could consider the speech merely politics. A strong defense policy and the related job creation from military spending always play well to the electorate. However, I think the speech was not for the benefit of the U.S. electorate.
The speech also reminded me of the Cold War days when the U.S. constantly rattled sabers at the Russians. In the nicest of terms and based on some set of policies related to the rule of law and democracy, the U.S. increased its military presence somewhere or entered into a new defense treaty with a partner country. Since the end of the Cold War the U.S. has had no unifying, large vision to bring the country together with a purpose. Maybe defending the Asia Pacific region is this new "vision", equivalent to the 1950-1980 period of "preventing the spread of communism". Of course, we no longer have a strong economy to finance such a plan given that the post-WWII economic boom is now long over.
One might also want to consider the U.S. record of military engagements in Asia since WWII. We have fought major conflicts in Korea, Vietnam and Afghanistan. While some, if not all, of these military engagements were justified, not a single one has ended well or advanced U.S. interests effectively. There has never been an armistice in Korea and North Korea now leads the list of the world's rogue nations. Vietnam tore apart the U.S. and did nothing to stop the spread of communism. Afghanistan is now ten years into a war that has no end in sight and only demeans the reputation of the U.S. as a world leader. One might also note the thousands of lives lost by U.S. servicemen in these conflicts. In summary, the U.S. has a poor record in Asia when it has exercised its military muscle.
It must be acknowledged that China is a growing economic and military force in Asia. With the possible exception of India or Japan, no Asian nation has the economic scale to build up a counter balancing force to the Chinese military. Neither of these countries has demonstrated any willingness to step up to face the Chinese, which might be a significant fact for the U.S. to note. Of course it could be that both of these Asian powers believe that a military build up is not the most effective way to deal with China. Another point for the U.S. to note. One could argue that neither of these countries has developed an effective military that can extend its military power beyond their own borders, but that again might be something for the U.S. to note in devising a strategy.
Lastly, I question whether the U.S. needs to be the world's policeman. Set aside that the U.S. can no longer afford such a role, how will Asia learn to resolve its conflicts peacefully if the default is the U.S. military presence. Perhaps we need to see how much military muscle China is willing to exercise before the U.S. expands its military commitments in Asia. Another alternative is for our "partner" countries in Asia to expand their own military resources. If they are not willing to do this in a meaningful way, then perhaps they should accept their fate or learn better to co-exist with the Chinese.
In closing, I think Obama's speech was reckless and only encourages the Chinese to accelerate their military buildup. More disappointing, the U.S. may be using the old U.S. "war fighting" strategy rather than look for new alternatives with China. Asia is too large geographically and the U.S. economy is at its weakest state since the 1930s. The U.S. cannot successfully execute a military strategy in Asia.
A previous post on U.S. military strategy is here.
After writting this post I found a very interesting article on the subject. "Hegemony with Chinese Characteristics" in The National Interest provides thoughtful insight into the history of clashes between dominant and emerging powers. Written by Aaron Friedberg, a professor at Princeton, Friedberg argues that a military confrontation is perhaps inevitable based on history and the different ideological beliefs of China and the U.S.
Note: Hegemony is defined in the Merriam-Webster dictionary as "the social, cultural, ideological, or economic influence exerted by a dominant group".
I will be doing my third workshop of the year for the Pino Entrepreneurship Center on Dec 2. The 3-hour workshop focuses on how to develop the business concept and the business model. The workshop is based on my book, Billion Dollar Company: An Entrepreneurs Guide to Business Models for High Growth Companies.
I have been doing this workshop for about five years and I actually think it works best in the current short form. You get the really important concepts without the distractions of too much detail. If you would like to see a sample of my style of presentation, this lecture on social entrepreneurship on Vimeo is representative. Some participant feedback on another lecture is here.
Registration details are here. Proceeds go to the Pino Center where I am on the Board.
The Logic and Emotion blog has an interesting slide deck in a recent post on design thinking in business. What caught my attention was slide 37, which provides a framework for the requirements of a social network. The framework is shown below.
What I thought was interesting is that the framework may also apply to other activities, such as education and religion. In the chart below I show examples for the five C's and how they apply to education and religion.
When you consider the recent decline in the active practice of religion one could conclude that the weakness in the framework is in connectivity, the high reliance on physical spaces for connectivity. This may also explain the increase in religious TV programming.
In education the same problem exists. Physical space as a means to achieve connectivity is no longer sufficient. The challenge in changing the "connectivity" to digital may explain the difficulties in adopting computers in education successfully. Perhaps we need to approach the problem as a stand alone issue--connectivity--and not get confused by issues in context or collaboration.
I like this 5 Cs framework and plan to come back to it in future posts. I do not think it applies to all major social activities, but it does provide a simple way to think about certain social issues.
A little finance never hurts and two articles on equities caught my attention. The first article comes from Bloomberg, where they cite some research by Wharton Professor Jeremy Siegel. The professor's research shows that for the first time since 1861, the thirty year return on bonds exceeds that of equity. You will remember from introductory finance class that equity returns should exceed bond returns given the higher risk in being an equityholder. A few possible explanations for this rare phenomena:
The other article cites some high level mathematical analysis from Cornell Professor Robert Jarrow and Columbia Professor Phillip Protter to identify bubbles, or overvaluation, in different asset classes including equities. For example, the methodology correctly identified the dot.com era and the price runup after the LinkedIn IPO as bubbles. Also interesting, the methodology shows that current gold prices are not a bubble. Of course trading on such math should correct for the bubble in a given stock. Question I have is whether the professors have applied their methodology to whole asset classes such as bonds or equities to see if they give us any insight into the current existence of bubbles. If bonds showed "bubble" behavior, that might explain Siegel's findings.
I found at least one of these articles on FinanceProfessor.com.
I spend a lot of time in Mexico. I have probably made ten trips there in the last two years. One of the things that always impresses me is the initiatives at the state level to correct social problems. Certain private sector companies also make significant contributions to social problems.
Friday I moderated a panel at the Latin American Business and Finance Conference in Miami. One of the panelist on the corporate social responsibility roundtable was an executive from Grupo Bimbo. Bimbo, headquartered in Mexico, is one of the largest consumer products companies in Latin America and well known for their breads, cookies and confections. Bimbo is completing a wind farm in the state of Oaxaca (wa-ja-ka) that will produce sufficient electricity to power all of the Bimbo plants (20+) in Mexico.
Maybe a reader can correct me, but I cannot think of a U.S. multinational that could claim that they use renewable energy to power all their plants in the U.S..
A little news from Mexico this morning.
Remittances from Mexican workers in the U.S. reached a five year high in September and totaled $2.08 billion, accorrding to a story from Mexico in Bloomberg. While a cheaper peso accounts for some of the increase, Mexican workers in the U.S. are also moving into better paying jobs in the service sector. The move to service sector jobs is due in part to a decline in traditional jobs in fields such as construction.
If Mexicans are moving into the service sector in the U.S., perhaps we should consider more outsourcing to Mexico.
