Business | Life Putting - Dan Putt

Archive for the 'business' Category Page 4 of 9

Starbucks here, Starbucks there

Published on April 3, 2007 in business, nyc and stocks.

One of the very first things I noticed when I moved to New York City was the unbelievable amount of Starbucks. I can, right now, think of roughly 7 Starbucks that are within a reasonable walking distance of me, 4 that are within 5 minutes of walking. You know what? They are ALL busy most of the time.

In this morning’s WSJ, there’s an interesting article about why Starbucks are popping up everywhere, when it seems there isn’t room anymore (there are currently 13,000 and they plan on adding another 10,000 over the next 4 years). The reason for so many? It’s simple:

“Where a lot of our growth is, is driving that incremental cup that someone may not have planned to buy,” he said.

They know that, especially in a walking city like New York, the difference between you buying a Starbucks coffee and not is whether or not you have to cross the street. So the more corners they can get on, the more coffee buyers they’ll get, and the more they can grow. For Starbucks 1+1=3:

The new store might take some sales away from the original location, but it could lead to far more sales overall. Jim Donald, Starbucks’ CEO, said one Texas store manager complained that his store’s sales of $1 million a year had flattened because of a new store across the street. But the new store, which had a drive-through, was on track to bring in $3 million its first year. So in the same vicinity, Starbucks was now pulling in $4 million a year from two spots rather than $1 million or $3 million from a single store.

The article also gave a glimpse into what kind of return a Starbucks location can generate for the owner, with sales to investment ratio sitting in the 2.3 to 1 ratio. That’s sales 2.3 times the initial investment within year 1, and sales typically improve in the following years generating even better returns. It’s no wonder that Starbucks’ are popping up off highway exits, inside hotels, and part of gas stations…this name brand addictive beverage thing is one heck of a business.

It’s fascinating to get a behind the scenes glimpse of something you see all the time, everyday, once in awhile..or at least I think. Check out the article.

Mind Petals: Young Entrepreneur Network

Published on March 20, 2007 in business, nyc and personal.

I’m excited to announce today that I’ve been asked and accepted an opportunity to join the Advisory Board of Mind Petals, a thriving community for young entrepreneurs. I first heard about Mind Petals when their founder, David, wrote a little story about me after stumbling across my blog in a google search. I was flattered by the article, and ended up speaking with Dave on the phone for a little while a few days later. I had not yet moved to New York City (where Dave and Mind Petals are based), but we agreed we’d get together following my move and swap stories.

We ended up sitting down for lunch finally a few weeks ago and I immediately was impressed with Dave’s passion for the entrepreneurial spirit and his determination to make Mind Petals a successful community. To my surprise he asked if I would join the Advisory Board to offer occasional guidance, ideas, and introductions to continue the success of Mind Petals as well as republish some of my blog posts on to the site ( I guess I better get more serious about this blog writing stuff).
I think it’s a fantastic connection for both of us. I’m a young entrepreneur with limited experience but just starting to tap into my potential. Mind Petals is a young, but thriving community that sits on the verge exploding in terms of reach and impact on the world’s young entrepreneurial community. I think myself and Mind Petals are typical of the entrepreneurial generation of which I’m a part of. We’re set on creating our own path in a way that’s positive for everyone. I think MP is in the sweet spot of opportunity to embrace the needs of this entrepreneurial generation.

I see a great opportunity to grow and learn together.

Too much self-esteem?

Published on March 13, 2007 in business, goals, personal and uniqe ability.

“The Trump Blog,” (would you expect him to name it anything else?) has a post in which he asks whether too much self-esteem can be a bad thing:

Recently, a new study found that today’s college students are more narcissistic and self-centered than ever before. The psychologists who conducted the research blamed the trend, in part, to the fact that the current generation of American parents are constantly telling their children how wonderful they are the whole time they’re growing up.

I definitely feel like there’s a growing trend of “self optimism,” or the belief within that we are capable of really anything, especially among my younger friends / colleagues. I can see the danger of this belief, especially in college aged kids, because having people believe that they can do anything could distract them from activities in which they are better suited to work on. Trump adds:

People who say, “You can do anything you want,” are simply unrealistic. Some things are just not possible. For example, if I thought today I could become an Olympic gold medal swimmer, I’d need a shrink more than I’d need a swimming coach. No matter how many lessons I take, how hard I train, or how many steroids I consume, it’ll never happen.

With that all being said, I think it really is imperative that we consistently instill belief in our kids and ourselves that nothing is outside the realm of possibility. When you believe you might be capable of doing well in something, it becomes a possiblity, and when it becomes a possibility you are more likely to try it. I always believe that trying something (of course assuming it’s fairly healthy and not deadly, unless you’re ok with that) is better than not trying something.

Would Trump have ever tried to Apprentice if he didn’t have a strong belief that he could make it succeed? Isn’t that strong belief it would succeed rooted in his personal self-esteem? Doesn’t he come across as one of the more confident and cocky people on TV today? Absolutely.

The key to living a full and successful life is a wealth of experiences, and the only time we open ourselves to new experiences is when we feel confident and optimistic about ourselves and the opportunity. I believe that having a strong self-esteem is absolutely necessary in order to have a willingness to try new things. After all, no one has ever learned a lesson or been successful in something they were afraid to try.

Dear Jetblue,

Published on March 9, 2007 in business, customer service and nyc.

I really want this to work…I really do. I love cheap fares, I love your plush leather seats, I love your fairly quick check in process, and I really LOVE your DirectTV in every seat, but you’re making this really hard. First you completely cancelled my trip to Columbus a few weeks ago after your meltdown. Now this..

About 10am this morning you sent me an email letting me know that due to some sort of scheduling conflict the plane scheduled to take me to Columbus tonight was no longer available, BUT you had arranged for another plane, which would not have plush leather seats or TV’s, but it would get me there. As a nice gesture you gave me a Jetblue credit of $25. Nice move.

So when I arrive to the airport for my 9:40 flight you treated me again…20 minute delay. Ok, so not the end of the world. Now it’s 10:20pm, and we’ve learned that the flight has been delayed due to “crew scheduling conflicts,” until AT LEAST 10:45 but we’ll have to wait for more updates. Annoying, and very troubling because it is a movie I’ve seen before. I have a feeling I may hear the words “cancelled” soon.

Now I realize that airlines screw up a lot. Hey, it’s a complicated business, but you’ve now slammed me on back to back trips. Who knows, you may successfully ruin 2 trips in a row. And it’s becoming clear that despite your great fares, your plush leather seats, your fantastic live TV service, and your potentially $100’s of dollars in credits, that I may very well have to say goodbye to you. Hopefully someday you can get your act together, and we can fly together again, but until then I need an airline that can consistently get me to my destination on the DAY they said they would.

Don’t obsess with finding the “great idea..”

Published on February 23, 2007 in business, future and goals.

There’s a great Q&A in this month’s fortune with management guru and accomplished author Jim Collins on entrepreneurship and leadership.

I was most interested in his answer to the first question of “If you were to offer advice to a beginning entrepreneur, what would it be?” He answered:

First, don’t obsess on finding the “great idea.” In fact, our research shows a somewhat negative correlation between pioneering a great idea and building a great company. Many of the greatest started with either no great idea or even failed ideas.

Sony (Charts) started with a failed rice cooker. Marriott (Charts) started as a single root beer stand. Bill Hewlett and Dave Packard’s great idea was simply to work together - two best friends who trusted
each other - while their first four products failed to get the company out of the garage.

They followed the “first who” approach to
entrepreneurship: First figure out your partners, then figure out what ideas to pursue. The most important thing isn’t the market you target, the product you develop or the financing, but the founding team.

Starting a company is like scaling an unclimbed face - you don’t know what the mountain will throw at you, so you must pick the right partners, who share your values, on whom you can depend, and who can adapt.

I’ll admit that I get stuck on finding the “great idea,” even though I’ve always believed what Jim said above. This idea really made sense to me after listening to a Venture Voice podcast last year about the founding of Paypal. While I think it is definitely important to have an idea or even more importantly a mission (such as Google’s “organizing the world’s information”) to bring together a team on, it is even more necessary to have a good founding team to begin with. I believe regardless of the idea, a good team will always be able to create success sooner or later.

I’m working on that team.

Did you know….

Published on February 23, 2007 in Links, business, future and personal.

*China will soon become the number 1 english speaking country in the world
*The top 10 in demand jobs in 2010 didn’t exist in 2004
*If myspace were a country it would be the 11th largest in the world (as of Sept 2006)
* The number of text messages sent everyday exceeds the entire population of the planet

You have to watch this video, it will simply blow you away. Karl Fisch, the original creator of this video, is the Director of Technology at Arapahoe High School in Colorado. I think it’s an especially powerful message to our educators and education system. I agree with Ben, it’s system that is flawed in its focus and falling behind. This video is a pretty powerful wake up call. It just shows how we get so caught up in our traditions and procedures, that we forget the world is rapidly changing around us. Fascinating stuff.

[youtube]j7FP1kgtD8U[/youtube]

More links related to this video:
Dangerously Irrelevant

Via young entrepreneur Ryan Allis

Entrepreneurship: Nature vs Nurture

Published on February 22, 2007 in business, future, goals, personal and uniqe ability.

After reading this post (great blog by the way) from successful entrepreneur Wil Schroter, I had to wonder…Are entrepreneurs born or made? Wil lays seems to think successful entrepreneurs are born with the ability to take on great risks, and because of this they are able to really get out there and learn all they need to know to make their venture or quest successful. Business success lessons can be taught, and learned by anyone, but the key to being a successful entrepreneur in his mind, risk-taking, can’t be taught.

If we’re asking whether or not you can take someone who does not support risk and teach them to embrace risk, I think that’s a long shot. I’ve seen lots of people try to fake their tolerance for risk while trying to be entrepreneurial and it just doesn’t work. You can’t teach someone to be OK with not sleeping at night.

Therefore, if you’re born to take risks, you can learn how to apply that risk-taking desire into the business world of entrepreneurship. Born entrepreneurs can be taught how to become better businesspeople. But businesspeople cannot be taught how to become entrepreneurs.

His posting was inspired by this Fortune Small Business article, which goes back and forth on all the entrepreneurs who say that formal education had no help in their success and the academics (and a few entrepreneurs) who say the right education can create entrepreneurs.

What do I think? I believe that Wil is right on.

The inherent natural risk taking ability is really the trait I’ve seen in all the successful entrepreneurs I’ve known (including Wil). I believe that the key to building a successful business and thus being a successful entrepreneur is the natural ability to really just go out there and do whatever it takes to make things happen. It’s never the right time, never the right situation, and never the perfect place to start a business, so one of the hardest things about being an entrepreneur is just starting. A lot of people can’t take this leap because it will probably mean leveraging themselves financially, looking like a fool a lot of times to a lot of people, screwing up a lot, getting an ear full a lot, and being completely overwhelmed…a lot. Most really can’t stomach even the thought of going through all this. But with this complete immersion you are capable of learning and absorbing massive amounts of information that is relevant to the business. This rapid “expertification,” is what ultimately makes up your skill set in building your company and enables you to become a successful entrepreneur. If you can’t handle risk, you’ll never get that far.

So the short answer is (as Wil said)… A good education can take you a long way, but only risk tolerance can take you to the top. Whether that risk tolerance comes from a passion in your mission, hard work on your personal perspective, or is something your born with, it’s what you’ll need to be successful.

Jetblue responds

Published on February 20, 2007 in business, customer service and stocks.

After an absolutely painful 5 days for Jetblue, they apparently have their act together. They announced a customer bill of rights today, which I think is a good idea at heart but really doesn’t quite get it done. I will say it is a step in the right direction, and is certainly more than I’ve seen other airlines do, but they’ve ruined the whole list with a dirty phrase called “Controllable Irregularity,” which I assume means only events that are within Jetblue’s control. So if that is the case, than these whole new “Customer Bill of Rights,” would not be applicable to their most recent fiasco, the very event they were created in response to.

Some highlights:
The airline announced a new reimbursement program for delayed passengers, retroactive to last Thursday, February 15.

• Delays 1-2 hours: $25 off a future flight
• Delays 2-4 hours: $50 off a future flight
• Delays 6+ hours: Free round-trip ticket
Also:
• Increasing number phone lines open for changing reservations (key for me)
(via consumerist)

I will say I’m a big fan of David Neeleman’s (founder / ceo) move to make this video apology and post it to both youtube and jetblue.com. It’s not the most eloquent presentation, but it’s gutsy and personable, and more direct than the typical CEO speak you see out there. This was a good move.

[youtube]-r_PIg7EAUw[/youtube]

Despite being somewhat uncomfortable with the “uncontrollable irregularity,” I will say I’m pleased with Jetblue’s response and I will continue to fly them. They’re cheap with free live tv, can’t beat that!

My final Jetblue thought has to do with their stock price. I told a good friend after leaving the airport on Thursday to short JBLU. The stock actually traded up on Thursday (after an upgrade) only to come down Friday, and way down today (about 5% off of it’s Thursday highs, but only 1% off Weds close). All in all the stock has performed fairly well (most likely a result of Jetblue’s recent quarter), and I think that it will bounce back. That is why I bought some March 12.50 (in the money) calls this afternoon at the bottom of its fall. I’ve already made a nice return, and plan on catching this thing as it rebounds a little. I think Jetblue is a good company and most likely will come out of this thing better, so if you’re long I’d buy now.

Ok NO more Jetblue posts.

Prosper Arbitrage

Published on February 4, 2007 in business and stocks.

I remember first reading about the peer to peer lending site, prosper.com a year or so ago and was immediately impressed. I really believe that peer to peer lending will be huge made. For the first time in history people can loan money directly to others (instead of basically doing it through a bank) without ever seeing or speaking to them. Anyone can ask for a loan by pleading their case, and submitting to a credit check. And on the other side, anyone can lend money by creating an account and choosing who to lend to based on their profile, story, and credit score. Prosper takes a little off the top, and manages the loan payments. It’s really an amazing system, you can read more about it here.

But being the true aribtrageur I am, I had an immediate thought about this site the second I heard about it. Because there’s an opportunity for people with better credit to get loans from banks or elsewhere for most likely under 10% and there are some higher risk borrowers on prosper willing to pay upwards of 30% APR, there’s an opportunity to do some lending arbitrage. Of course lending to all the high risk, high apr borrowers is definitely risky, but the nature of prosper allows you to spread your risk just like banks do. So you could borrow say $100k at 7-8% APR with good credit, then lend it out at no more than $1k per borrower. By choosing the right situations to lend with good APR’s it could be possible to generate a risk adjusted ROI of 18% or more. After you pay off your loan the rest goes into your pocket (of course there are taxes to deal with as well), but it seems to be an opportunity to generate some nice fairly low risk returns.

It appears that some people may already be doing this. Take a look at the top lenders on the site:

Rank	Screen Name	$ Invested	Est ROI
1	pensioner (details)	$794941.10	18.76%
3	L5 (details)	$547230.73	14.26%
5	MuleShoes (details)	$367585.44	3.13%
7	Sneezie (details)	$190234.69	10.49%
9	reguyncali (details)	$161437.06	9.34%

(via Eric’s Credit Community)

If you have good credit, it may be something interesting to investigate further. I would definitely recommend checking out Eric’s Credit Community for more info on Prosper lenders.

Video Post…

Published on February 2, 2007 in business, stocks and tech.

Today I came across a few interesting videos in my normal blog reading that I thought were interesting…

One of my favorite bloggers, Fred Wilson, gave a keynote speech at the Software and Information Industry Association Summit where he talked about the future of information services. I really agree with Fred’s points about information becoming free, while attention is becoming scarce. The real future of information services will create value by capturing, filtering and delivering information at the most relevant time and place. The sea of data has become so vast, that there is no way for us all to stay up to date. There’s a tremedous opportunity in building out a service that can consantly monitor the data from all corners of the web, and alert customers when new, extremely relevant infromation become available. That’s what services like Monitor110 do for companies on Wall St, and I would imagine we’ll see more like them popping up over the next few yaers.

The speech and the Q&A session are worth watching.
Fred Wilson’s keynote
(via Darren Herman)

Get a glimpse at life inside Google from the work environment to the food. I’m really curious about Sergey’s shoes at the end called zcoils, they look comfortable but man are they dorky.
Google Recruiting video