Four Failure Points that Undermine Biz Success: #1 is Dont Follow Your Passion

by Ed McLaughlin

Veteran entrepreneur and former Fortune 100 executive, Ed McLaughlin comments below about the reality that Americans can see failure as a stepping stone to success, “It’s difficult to celebrate failure as a stepping stone to startup success if entrepreneurs can’t pay their bills, provide for their families, meet payroll or realize their business visions.” Ed's own research tells us that 75% of new businesses fail within the first five years. Ed continues with this challenge for small business owners and entrepreneurs in some of the big ‘innovation-driven’ cities, “What if we could turn the tables on the startup failure rate by introducing a new set of business principles that increases the probability of startup success?” He also offers the four failure points things that undermine the success of a small business below, excerpted from his book, using his own company as an example. Ed has also highlighted the framework for sustainability and profitability in his new book, The Purpose Is Profit: The Truth about Starting and Building Your Own Business, by focusing entrepreneurs on these principles, including: Distinctive Competence, Dynamic Planning, and the Ten Commandments of Startup Profit.

Only nine months after starting USI, I launched a second business called Sigma Communications Inc., or Sigma for short. Starting Sigma had been the culmination of a long-term vision to create a vehicle that would more efficiently connect buyers and sellers of commercial real estate. After three years of bleeding red ink, I was forced to shut down Sigma.

Here are the 4 failure points that undermined the success of Sigma Communications.  

             Failure Point #1: Starting a business based on passion alone, rather than building a business based on distinctive competence.  

When I started Sigma, I believed that my passion for publishing the magazine would trump everything else. That proved to be a costly assumption. The hardest lesson I learned from the Sigma experience is that a venture filled with passion is not enough. You will substantially increase your probability of startup success if you build a business based on your distinctive competence.

Failure Point #2: Starting up without preorders to validate your business model. 

I made the fateful decision to launch the magazine without selling advertising and securing paying customers first. In the end analysis, I took a huge gamble on a concept business with an untested business model. Sigma spent millions before I shuttered the business in failure. Securing preorders is the single most important point of validation for a startup.

Failure Point #3: Launching your business without adequate time and funding to reach profitability. 

Unfortunately, I had not properly factored the size and scale of Sigma, nor how long it would take to ramp-up to profitability. Since I had never manufactured and shipped a product before, I underestimated the continuous cash drain from ongoing production and distribution. Rather than bootstrapping the business with the profits from USI, I should have lined-up outside funding with a more reasonable timeline to breakeven. Make sure to allocate the time and the funding needed to achieve profitability. 

Failure Point #4: Closing your ears to the advice of industry experts. 

Rather than listening to my advisors, I convinced myself that I could beat the normal ramp-up to profitability in the publishing industry. My unbridled passion for becoming a publisher, combined with my lack of distinctive competence put blinders on me. Cultivate relationships and heed the advice of industry experts.

Ed McLaughlin is the founder & CEO of Blue Sunsets LLC, a real estate and angel investment firm based in Darien, CT. Previously, McLaughlin founded and served as chairman & CEO of United Systems Integrators (USI) Corporation, a corporate real estate outsourcing firm, sold to Johnson Controls (JCI) in 2005. In 2001, he earned Entrepreneur of the Year honors from Ernst & Young, and USI was named to the Inc. 500 list of America’s fastest growing companies. His book,  The Purpose Is Profit: The Truth about Starting and Building Your Own Business, is available on Amazon.

Rob Hunt Interview - Largest Marijuana Private Equity Fund

Reprinted courtesy of Stockerblog.com

The following fascinating interview was provided by Rob Hunt, a partner and the Lead Industry Executive at Tuatara Capital, the largest private equity fund in the cannabis industry. He also has an extensive background in cannabis business in Colorado, Massachusetts, New Hampshire and Maine as well.

Rob  Hunt has more than 15 years of experience in the cannabis industry as an attorney, a consultant, and a serial entrepreneur. Rob is currently a Partner, and the Lead Industry Executive of Tuatara Capital.

Mr. Hunt was formerly the Chairman of the Coalition for Responsible Patient Care, based in MA, where he spearheaded the initiative to help develop and implement the fledgling medical cannabis market in the Commonwealth. He was the principal developer of cannabis.org, a website focused on changing the scheduling of cannabis away from being a schedule I drug on the Federal Government’s list of controlled substances, Rob still authors all of the written commentary on the cannabis.org Facebook page where he has an audience of close to 20,000 readers.

We cover a lot in this interview, including:

• The California marijuana proposition
• Why marijuana has remained illegal for so long
• The current credit card ban on dispensaries 
• Opinion on publicly traded cannabis stocks
• Crowdfunding for marijuana related companies
• Willie Nelson's brand of marijuana
• Advice for investors interested in allocating funds to the cannabis industry
• Advice for those who are interested in setting up a marijuana startup

The Interview

You will certainly enjoy all this great information that Rob Hunt provides.

To stream the interview, click:

HERE

You can download as an mp3 by right-clicking here and choosing "save as."

More information about Tuatara Capital can be found HERE.


Let us know what you think about this interview by entering your comments in the comment section below. You can also check out the stocks in the WallStreetNewsnetwork.com Marijuana Stock Index.

All opinions are those of Rob Hunt, and do not represent the opinions of Stockerblog.com or the interviewer. Neither Stockerblog nor the interviewer nor the interviewee are rendering tax, legal, or investment advice in this interview.

Travel Hacks for Trips to South Korea

Are you planning to take a trip to South Korea, for business or even for pleasure? I recently got back from Seoul and I have some hacks for you to be aware of.

Cheap Flights

First, in regards to flying there, I was able to get a round trip non-stop ticket from San Francisco to Seoul in Economy Class for only $998 plus taxes. And I was able to make this reservation just a couple days ahead of the flight. I found the flight through CheapoAir.com.

The airplane was a 747-8. The airline was Korean Air, a great airline with outstanding service. One thing you need to be aware of with Korean Air is that they base your carryon limits by weight. So if you have a carryon bag and a briefcase, they will weigh them together. If it exceeds that weight, they will require you to check your carryon bag. Check your particular airline to see what their requirements are.

Backup Underwear

My suggestion? I always carry spare underpants, undershirt, and socks in my briefcase/computercase. So if you are forced to check your carryon, and it gets temporarily lost, at least you will have a change of underwear.

Getting through Security

The security issue can always be a hassle. I use a fanny pack, also referred to as a waist pack, one with several pockets. All airports require that you take all metal out of your pockets, and many, including Seoul, require that you take everything out of your pockets. These packs are great for throwing in your keys, your coins, and your iPhone, plus anything else that might be in your pockets, like your passport. It’s nice to know that everything is in one place.

I never run my waist pack through the detector by itself; I always put it in one of those bins, along with my jacket and shoes (unless I’m leaving Korea – more about that later). Also, I always clip the strap together before running it through, so that a loose strap doesn’t get caught on anything in the X-ray machine. I actually had that happen to a pack once, a long time ago. The security guys kept running one of my shoes through the machine to knock it loose.

Language Barrier

You don’t have to worry about the language issue for Korean Air as all the flight attendants speak English. When you arrive at your seat, you will find a blanket wrapped in plastic, a pillow, a large bottle of water, slippers, and headphones.

Every passenger gets a huge television screen in front of them, not the little screen you seen on several other airlines, but large screens that take up the whole width of the seat in front of you. I watched three movies on the flight back and still had time to get some sleep. They were showing such movies as The Revenant, Spotlight, and Concussion.

Transportation From the Airport to Seoul

There are various busses and subway trains that you can take from Incheon to downtown Seoul. I didn’t want to take any chances with getting on the wrong bus or train, and dealing with money and tickets when I first arrived. And I wasn’t sure about taxis. So I used a service called FuntasticKorea, which provides an airport transfer shuttle into Seoul. I paid for it ahead of time, ordering the small van to Gangnam, for 80,000 won (approximately $68).

They said that the driver would meet me at Gate 8 at exactly 90 minutes after my plane lands. This was to allow for getting luggage and going through customs and immigration. Sure enough, we both show up at exactly 90 minutes after landing time.

The ride was great. I was the only one in the van, and got to see the enormous number of buildings on the drive in.

Hotels

There are plenty of great hotels to stay at in Seoul. I stayed at the Intercontinental Grand Seoul Parnas, one of two Intercontinental Hotels in Gangnam. There was a proximity advantage to staying at either of these hotels, which I will cover shortly.

Taxis

None of the taxi drivers spoke English, at least none that I rode with. Here is a trick I used to give them directions. Since I had my laptop with me, and the hotel provided free wifi, I would look up on the Internet where I wanted to go. I would then copy the name and address of the location, go to Google Translate, paste it in to the English side on the left, choose Korean on the right and click Translate. Now the final step. I took out my iPhone and took a picture of the Korean language on the screen.  I was then able to show the taxi drivers the picture on my phone with the address.

 Heading Home

A convenient way to return to Incheon Airport is using a CALT bus. CALT stands for City Airport, Logis & Travel. CALT is located between both the Intercontinental Hotels and above the huge COEX underground mall. The CALT bus is non-stop and it is sit anywhere on the bus, not assigned seating. You can buy a ticket with a credit card at one of the machines there. The price is just 16,000 won (about $14).

The Most Important Tip of All

One other advantage of using CALT is that they have an immigration office right there, which can expedite your navigation through the airport. There is literally no line at the CALT immigration office. They print out your boarding pass and stamp it with a green circular stamp. This is important.

The bus ride was comfortable and arrived at the far end of the airport in about an hour and a half. So I walked up to the long line for security, showed the agent my boarding pass with the green stamp, and the agent literally walked me over to the “express” security line with only two guys ahead of me. I did not have to take off my shoes.

I then headed over to the Korean immigration department, and stood in the back of a long line. But I immediately showed my boarding pass to an immigration agent directing the line of people, and she sent me way over to the left hand side, which was the immigration line for diplomats. There was no one at all in line. I showed my passport and boarding pass with the green stamp, and the officer waived me through.

Returning flight time was 9.5 hours (going there was 11 hours). Immigration in San Francisco was semi-automated. That form you fill out on the plane is basically duplicated on the kiosk machines that basically ask you all the same questions. The machines print out an immigration receipt. You then stand in line and show the officer the receipt who tells you “Welcome home.”

Two more Tips

1. Speaking of tips, do not tip anyone in South Korea. They consider it an insult. This includes restaurants, taxi drivers, and hotel workers.
2. Don’t buy Korean currency at a currency shop in a US airport. I was charged a 16% spread plus a $9.95 service charge. I recommend ordering currency through your bank. Make sure you order it with enough days ahead of time so that you can get it before you leave. For many banks, it can take two to five business days for the money to come in.

Hopefully, you will have a trip to the clean, safe, and friendly country of South Korea that will be as enjoyable as mine was. Happy travels!

Check Out the Latest Sedo Auction of 80 Domain Names

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The Latest Books on Startups

Are you looking to start a startup? Are you looking to improve your startup? Many books are hot off the presses that cover how to create your own business and entrepreneurship. One of them even covers 3D printing. Here are several worth checking out for your summer reading.

Effective DevOps: Building a Culture of Collaboration, Affinity, and Tooling at Scale by Jennifer Davis and Katherine Daniels

Some companies think that adopting devops means bringing in specialists or a host of new tools. With this practical guide, you’ll learn why devops is a professional and cultural movement that calls for change from inside your organization. Authors Katherine Daniels and Jennifer Davis provide several approaches for improving collaboration within teams, creating affinity among teams, promoting efficient tool usage in your company, and scaling up what works throughout your organization’s inflection points.

DevOps stresses iterative efforts to break down information silos, monitor relationships, and repair misunderstandings that arise between and within teams in your organization. By applying the actionable strategies in this book, you can make sustainable changes in your environment regardless of your level within your organization.

Before Disrupting Healthcare: What Innovators Need To Know by Pallav Sharda
Healthcare is an industry unlike any other — it’s a matter of life and death, and no field poses as much reward or as many challenges for tech entrepreneurs. 
Before Disrupting Healthcare is a must-read for anyone working on, or investing in, health information products. Health IT veteran Pallav Sharda draws on a dozen years of real-world experience to bring you to the leading edge of health software innovation. 
Before Disrupting Healthcare combines an introduction with the foundational ideas and products of today with a look into what emerging IT trends will rule the future. Outsiders can use this book to become insiders, and insiders can become experts. 
You’ll learn why Electronic Health Records, Health Information Exchanges, Accountable Care Organizations, and Meaningful Use regulation matter so much today―and what will matter even more tomorrow.

The Decentralized and Networked Future of Value Creation: 3D Printing and its Implications for Society, Industry, and Sustainable Development by Jan-Peter Ferdinand and Ulrich Petschow
This book identifies, analyzes and discusses the current trends of digitalized, decentralized, and networked physical value creation by focusing on the particular example of 3D printing. In addition to evaluating 3D printing’s disruptive potentials against a broader economic background, it also addresses the technology’s potential impacts on sustainability and emerging modes of bottom-up and community-based innovation.  Emphasizing these topics from economic, technical, social and environmental perspectives, the book offers a multifaceted overview that scrutinizes the scenario of a fundamental transition: from a centralized to a far more decentralized system of value creation.

Scaling Lean: Mastering the Key Metrics for Startup Growth by Ash Maurya
You’ve talked to customers. You’ve identified problems that need solving, and maybe even built a minimum viable product. But now there’s a second bridge to cross. How do you tell whether your idea represents a viable business? Do you really have to go through the whole cycle of development, failure, iteration, tweak, repeat? 
Scaling Lean offers an invaluable blueprint for mod­eling startup success. You’ll learn the essential metrics that measure the output of a working business model, give you the pulse of your company, communicate its health to investors, and enable you to make precise interventions when things go wrong. 

Spark: Take Your Business From Struggle to Significance by David A. Hilton
In this fast-paced allegorical non-fiction, our hero is about to learn all the lessons of business the hard way so that you do not have to. His story is a combination of a fast-paced novel with compelling, impactful and eminently executable business lessons. Join Jack’s journey and take your business from struggle to success, where you’ll find more time, more money and, more importantly, more freedom.

Start Your Business on a Ramen Noodle Budget: 12 Lessons on Becoming a Young Entrepreneur When You are Broke! by Felecia Hatcher
You don't need millions of dollars to get your business idea off the ground, but you do need to START, with what you have and where you probably are financially-on a Ramen Noodle budget! Think about it: Ramen Noodles are one of the cheapest meals on the planet, but when you get creative and add ingredients you have at your fingertips, you can transform it from an inexpensive meal from your college "glory days" into a "grown-up" gourmet meal. So, if you can get creative with Ramen Noodles, you can get creative with limited resources and overcome any roadblocks to starting your own business. You know you have what it takes to launch a startup. It's time to harness that gritty scrappiness, tap into your network to gather the resources you need to launch your business, and stand out-even with limited funds.

Combatting Disruptive Change: Beating Unruly Competition at Their Own Game by Ian I. Mitroff

This book is a critical examination of the main ideas regarding disruptive change and startups. It systematically lays out the full set of challenges and tasks one needs to master in order for existing organizations to weather severe change or make a startup successful. Ian Mitroff outlines the protective actions business leaders must take to ensure their continued existence, providing a clear demonstration of the key roles leaders must assume such as Applied Epistemologist, Applied Ethicist, Applied Systems Thinker, Applied Social Psychologist, and Applied Crisis Manager, and how to perform these roles competently.

Citing cases such as Facebook, Uber, and Airbnb, this book uniquely analyzes the disrupting agent in emerging industries, which is crucial for success in today’s complex and turbulent world. It will be of value to students, academics, and entrepreneurs looking to develop a new product or service.

The Following Book is a Best Seller

The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future by Kevin Kelly
Much of what will happen in the next thirty years is inevitable, driven by technological trends that are already in motion. In this fascinating, provocative new book, Kevin Kelly provides an optimistic road map for the future, showing how the coming changes in our lives—from virtual reality in the home to an on-demand economy to artificial intelligence embedded in everything we manufacture—can be understood as the result of a few long-term, accelerating forces. Kelly both describes these deep trends—interacting, cognifying, flowing, screening, accessing, sharing, filtering, remixing, tracking, and questioning—and demonstrates how they overlap and are codependent on one another. These larger forces will completely revolutionize the way we buy, work, learn, and communicate with each other. By understanding and embracing them, says Kelly, it will be easier for us to remain on top of the coming wave of changes and to arrange our day-to-day relationships with technology in ways that bring forth maximum benefits. Kelly’s bright, hopeful book will be indispensable to anyone who seeks guidance on where their business, industry, or life is heading—what to invent, where to work, in what to invest, how to better reach customers, and what to begin to put into place—as this new world emerges.

Summary of the 2016 Twitter Annual Meeting

Article reprinted courtesy of Stockerblog.com 

Jack Dorsey, CEO,
Anthony Noto, CFO,
Vijaya Gadde, General Counsel
Twitter (TWTR)

On May 25, 2016, the Twitter Annual Meeting was held at the Yerba Buena Center in San Francisco, California. There was a turnout of about 60 shareholders. At last year's meeting, Jesse Jackson showed up, but he wasn't there for the meeting this year. On the stage were Jack Dorsey, CEO, Anthony Noto, CFO, and Vijaya Gadde, General Counsel & Corporate Secretary.

Jack Dorsey lead off the meeting showing a presentation of various tweets and videos. He also went over the five priorities for the company, including refining core services and safety. He mentioned the live streaming deal with the NFL.

Then Noto went over the financials. The business part of the meeting, run by Gadde,  took about 15 minutes, where Jack Dorsey and Hugh Johnston were elected to the Board of Directors to serve until the 2019 annual meeting. Also, the Name Executive Officer Compensation passed, the appointment of PriceWaterhouseCoopers as the accounting firm passed, and and the approval of the 2016 Equity Incentive Plan passed.

Then the fun part began: the question and answer period. The first shareholder asked how the expense for software engineers is shown on the financial statements (mostly R&D), and how the stock based compensation is shown (R&D).  Noto explained that the company currently doesn't use stock options; it only issues restricted stock.

Twitter Annual Shareholders Meeting

The same shareholder also asked what types of software the programmers use. Dorsey took that question and said that it has been a transition, starting with Ruby, then Java, Objective-C, then Swift. He said that several programming languages are used, and the programmers use whatever they need to get the job done.

The next shareholder came up with three new verified statuses. He had previously recommended three last year, two of which have been verified.

One young woman came up with a couple suggestions. One was having the ability to send money through Twitter. The other was having the ability to buy Twitter stock through Twitter. Dorsey said that they are looking into a money transfer system.

A shareholder asked about what the catalyst is for an increase in the stock price and both Dorsey and Noto emphasized the push for more live streaming in the areas of sports, entertainment, and news and politics.

When asked if they were open to a takeover offer or a partnership, the answer was essentially no.

Finally, the $3.6 billion in cash that the company has, came up in the Q&A. Noto said that they have a couple of options: share buybacks and acquisitions. Management is regularly evaluation how the money should be spent.

Disclosure: Author owns TWTR.

Article reprinted courtesy of Stockerblog.com 

It is Now Legal

Monday, May 16, 2016, was a significant day for investors, especially non-accredited investors. First, let me give you some background.

Up until that day, if you wanted to invest in private equity, venture capital, or startups, you basically had to be an accredited investor. An accredited investor is anyone who earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

With these very high thresholds, most investors were excluded from participating hot private deals, especially pre-IPO investments. However, with the implementation of Title III of the JOBS Act (Jumpstart Our Business Startups Act), the rules have changed giving all investors more of a level playing field for investing in private equity offerings.

As an example, if you have a net worth or income less than $100,000, you can invest the lower of either $2,000 or 5% of your annual income or net worth. Yet, there is a $2,000 floor, so you can invest a minimum of $2,000 per year without regard to your annual income or net worth.

This is similar to crowdfunding, yet instead of the contributor getting a product or being invited to a launch party, they receive equity in the company.

It is not just the small and medium size investors who benefit, the small startups will now have a lot of advantages. such as simplified financial disclosures and streamlined filings, as long as the amount raised  is less than $1 million.

If you feel so inclined to read the actual Securities and Exchange Commission Summary of Title III, you can read it here.

Some of the top equity crowdfunding platforms include CircleUp, RockThePost, MicroVentures, AngelList, and FoundersClub.