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Helping you launch and grow your business

See a need, fill a need

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Often entrepreneurs come up with their business idea because of their own personal experiences or that of someone in their circle of friends & family.  This is a great strategy but sometimes doesn’t tap into a market large enough.

In episode #850 of Planet Money, The Fake Review Hunter the hosts interview Tommy Noonan, creator of SupplementReviews.com.  SupplementReviews.com is a highly popular website that provides unbiased user reviews of health supplements.  However, Tommy soon found that there were reviews that were suspiciously positive.  Because Tommy’s entire website was based on authentic user reviews, fake reviews became an existential threat.  After a lot of research he found that some of these reviews were being written by the supplement companies themselves.  He uncovered so many fake reviews that he started noticing a pattern; almost like a modus operandi.  They were often single product/brand reviews, used fake pictures, lots of reviews in a short period of time, and/or only had one review.  Sometimes the “reviewer” would give positive reviews for one brand and negative ones to competing brands.

This is when Tommy had his a-ha moment.  If his website had fake reviews, others would also probably have them too.  So he created another business that aligned with one of the juggernauts of the internet, Amazon.  Tommy’s site which uncovers fake reviews is called ReviewMeta.com.

 

How to find a need

As mentioned at the top of the post, most rely only on their personal experiences or that within their network.  Sometimes the need is obvious.  For example, at a 7-Eleven in Shirley, New York one 7-Eleven sell more coffees than any other franchise in the US; all because of one store manager than knows virtually every customer’s name and greats them.  No special location mojo or customer flow algorithm, just old fashioned customer service. You can read more about it in my post Competitive Advantage and Coffee.

Other times it is not that obvious.  In that case you have to hustle in a different manner.   How do you do more “work” when you’re already working to the bone?  Find efficiencies:  know your customers, know your competitors, lower your expenses,  by working to learn more doing more research in episode #700 of Planet Money, Peanuts and Cracker Jack.  In Boston’s Fenway Park, Jose Magrass is the top seller.  One year, on opening day he sold 500 hot dogs, $2750 worth of hot dogs in a single game.  In fact, Jose has been the top seller for over 5 years.  Part of his secret?  He has a spreadsheet where he analyzes many factors beyond just the weather such as what his competing vendors are selling and what fans are likely to purchase depending on the price of their seats.  For example, behind home plate diet coke sold better because possibly that is where the “vain people” sit.  That kind of analysis is impressive.

It’s not too late

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According to data from the Census Bureau and IRS the average age of successful business founders is 42; so the 20 year old entrepreneur is a true rarity.

The team looked at data around the 2.7 million people who founded businesses between 2007-14 and went on to hire at least one employee. Along with average entrepreneur age, they also learned those new ventures with the highest growth had an average founder age of 45.

The researchers broke out the data into high-tech employment, VC-backed firms, and patenting firms. Across the entire United States, the average founder ages were 43, 42, and 45, respectively for those divisions.

Part of this reason is because experience, social capital, skill sets, etc. play a large factor in the success of a business.  So even if you’re over 40, roughly 50% of successful entrepreneurs are above that age.

Read the complete article here.

 

Another Happy Client

sans bar

Sans Bar is a one-of-a-kind sober bar in Austin, TX.  Their mission is to provide a safe, sober environment for adults to celebrate life while promoting personal and social wellness.

I had the pleasure of creating financial projections for founder, Chris Marshall.  With the help of this important document, entrepreneurs can see how much they need to make and save in order to meet their financial needs; in addition to many many other uses.  You can read more about the importance of a financial plan.

Another happy client

kiloniner

KiloNiner is a fantastic company that specializes in military inspired vests and harnesses for xxsmall to medium sized dogs in addition to other accessories.

I had the pleasure of creating a business plan which allowed them to secure funding to increase their inventory and expand their operations.

The Cryptocurrency Conundrum

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Cryptocurrencies took quite a hit in 2018 has not been a good year for the market so far. Having reached a valuation of $834 billion as of January 7, 2018, CoinMarketCap reported that the market witnessed a drastic plunge of about 66%, losing over $553 billion. Bitcoin recorded a huge loss of over 50% in February, with valuation dropping below $7,000. Ethereum and Ripple also suffered similar drops, both recording losses of over 40% during the same month.  Even as of late March, the leading currencies have not bounced back as of March 21, 2018.

bitcoin price


crypto prices

 

Most signs point to a bubble.  Market speculation that drove prices to an untenable price for the time being.  This bubble was exacerbated by the unregulated nature of cryptocurrency.  For example, banks are required to physically hold a certain amount of cash in reserve, also known as Regulation D, which allows for an amount of liquidity in the market in case of lean times.  Given the unregulated nature of cryptocurrencies it is possible that market manipulation was also behind the plunge. In 2013, Bitcoin rose from $150 to $1,000 within a period of 2 months. A rise that researchers have found was caused by one person. Last month, one anonymous investor bought $400 million in Bitcoin.  For securities transactions such as stocks and bonds, the identities of the buyers and sellers are known and recorded.  In cryptocurrency transactions, the transaction is known but not the entities.

However, to understand a little about what is happening, it helps to understand what cryptocurrency is.

 

What is Cryptocurrency?

According to Wikipedia:

A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.[1][2][3]Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies. Cryptocurrencies use decentralized control[4] as opposed to centralized electronic money and central banking systems.[5] The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger.[6]

Bitcoin, created in 2009, was the first decentralized cryptocurrency.[7] Since then, numerous other cryptocurrencies have been created.[8] These are frequently called altcoins, as a blend of alternative coin.[9][10][11]

That is a lot to digest so to summarize and generalize:  cryptocurrency is an electronic asset that is created through among other methods, “mining” (the details of digital asset creation go beyond this post). Once this digital asset is created, a record of its created is added to a decentralized ledger.  This ledger is known as a blockchain.  Blockchain is like a title chain in real estate; everyone knows who owned it in the past and who owns it now.  Furthermore, transactions using cryptocurrency is also recorded in the blockchain.

The blockchain is starting to look more useful than the actual cryptocurrencies, but more on that in a future post.

 

Differences from other currencies

Crypto isn’t going away but probably won’t replace sovereign currency because it doesn’t have that backing of an entire nation. There’s more power when you have a nation that promises the worth of something vs many individuals that aren’t a cohesive entity

A nation has natural resources, a military, existing contracts, labor forces, etc. that can be used to back the value of their currency. Crypto does not. They are kinda like fidget spinners. Some people highly value it and trade it but not likely to replace dollars.

 

Similarities to commodities

More than a “currency” cryptocurrency seems to have properties similar to commodities such as silver in that people can “mine” it too.  That said no government uses, say rubies, as their official currency.

Cryptocurrencies are also relatively unregulated like commodities.  Beyond futures contracts and derivative markets the industry did not see much action beyond the Commodity Exchange Act of 1936.  Other than a few laws, regulatory bodies such as the Commodity Futures Trading Commission did not see much action until Dodd–Frank was enacted in response to the 2008 financial crisis.

For the reasons mentioned, it seems like a judge also agrees that cryptocurrencies are commodities.  Maybe it is time to call them cryptocommodities.

 

Are Cryptocurrencies here to stay?

Probably not going away but many hurdles block mainstream adoption. of course if a government officially recognizes it then it’s all systems go.  For now China says no and S. Korea is hesitant.  Furthermore, Warren Buffett considers cryptocurrencies speculative.

Cryptocurrency will probably end up like precious gems and metals; worth something but will not upend sovereign currency. Buying a car in wheat is possible but not as convenient as with traditional currencies.  Although some dealerships accept some cryptocurrencies.

A pleasant surprise

I’m sure they send these invites to everyone but nonetheless kind of cool.  Maybe in the next couple of years I’ll apply.  Nonetheless, thank you to my clients that made this possible.

On top of his normal busy schedule

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