With Age Comes Perspective

In cleaning out the hundreds of e-mails that amassed during my recent vacation that took me off the grid I came across an interesting study.  (By the way, I highly recommend a complete break from email, voice mail, etc. at least once a year — you will be amazed at how calming it can be).

In the 2008 American Express OPEN Spring Monitor, they found a sharp contrast between business owners over sixty and the small business population at large as they manage their way through the current economic uncertainty.

The over sixty age group holds the most optimistic outlook among entrepreneurs surveyed, perhaps due to having endured downturns in the past.  For these business owners the biggest challenge to growth is not an uncertain economy, cited by nearly one third of small business owners overall (30%), but the rising costs of doing business cited by 27% of over sixty year olds.  Those of us over 50 (Let’s be clear — I am not yet in the over 60 crowd) have been through many economic ups and downs.  We also remember the frustration and challenges that come with prolonged inflation.  Younger entrepreneurs have no frame of reference for what inflation can do to small businesses.

Entrepreneurs over sixty are taking actions that show they learned from their past experiences with inflation.  Although they are generally more optimistic, they are nonetheless being more cautious in their business decisions:

–  27% of business owners over sixty report plans to hire over the next six
months vs. 38% of small business owners overall; 58% of business owners aged 18-34 report plans to hire

–  42% of business owners over sixty report plans to make capital investments over the next six months vs. 53% of entrepreneurs overall

–  43% of entrepreneurs over sixty are willing to take on a financial risk to grow their business vs. 51% of small business owners overall

Jeffry A. Timmons Memorial Service – June 20th, 2008

Babson College will host a memorial service celebrating the life of our dear friend, colleague, teacher, and mentor Professor Jeffry Timmons, who passed away on April 8th at the age of 66.
 
The service, which will take place at Babson on Friday, June 20 at 10:30 a.m., is intended to honor Prof. Timmons and commemorate his great impact and influence on Babson and the global entrepreneurial community as well as his legacy as a beloved husband, father and grandfather.

On Thursday, June 19th, the afternoon/evening before the services, Babson Collete will be holding a discussion devoted to “Envisioning Entrepreneurship in 2020”, a topic dear to Prof. Timmons.  
 
If you plan to attend either or both, please email timmonsmemorial@babson.edu for additional details.

Bootstrapping Legal Work

I have generally hesitated on relying on bootstrapping legal work when it comes to complex legal work.  However, I have run into more and more entrepreneurs who do just that.

During our recent vacation, we spent one night with our old friends Joe and Nancy Rankin in Cary, NC. 

Joe has successfully navigated the patent process on his own for several products he has developed.  His business, SECTION8 tactical Inc., offers products to assist competitive shooters, tactical officers, and military personnel with their daily operations.

He said that doing your own patent work takes a great deal of time, patience and attention to detail.  But, he insists, it can be done.  For simple products like the ones he offers, this strategy can make sense. 

Here is a link to his product website.

Unplugged!

This will be my last post for several days.  Mrs. C. and I are taking a trip to celebrate our 30th wedding anniversary — off to the beach, playing some golf, and visiting old friends along the way. 

I will be going “off the grid”, but I plan to plug back in and start writing again soon after Memorial Day. 

VC Activity Reflects Slowing Economy

According to the latest report from the National Venture Capital Association, venture capital investments were down 8.5% during the first quarter of 2008 when compared to the last quarter of 2007.  The report also found that deal flow was also down.

The decrease in new deals landing on the desk of VCs and the fewer deals being funded are both consistent with the slowdown in the economy. 

“Despite the current economic downturn in the United States, venture capitalists are still putting money to work across multiple industries and stages of development,” said Mark Heesen, president of the NVCA. “The continued interest in the life sciences and clean technology industries, as well as the traditional IT sectors, reflects the long term investment horizon buy topamax cheap that the venture industry has always embraced. We do not expect to see significant declines in investment levels in the coming year. However, the dollars going to later stage investments could increase if the IPO window remains closed for an extended period of time and venture capitalists have to sustain companies longer than expected.”

This part of the report actually concerns me more than the slowing flow of deals.  VCs had already become more cautious in 2007, pursuing more later stage deals.  With angels also pursing their investments into later stage deals, there is an alarming shortage of money for seed and early stage ventures.

The drag on these shifts might be felt on the economy for years to come. 

Entrepreneurs See Short Recession, But…

The NFIB Index of Small Business Optimism rose 1.9 points in April to 91.5 (1986=100). Half of the gain was due to an improved outlook for business conditions 6 months out, and a quarter was from improved earnings trends. Improved earnings during a slowdown seems to indicate that business owners saw this soft economy coming and took steps to cut costs. 

However, the net percent of owners reporting higher average selling prices rose again this month.  And the percent of owners citing inflation as their No. 1 problem was up to the highest reading since 1982. The number of those planning to raise prices also rose significantly. 

Inflation is starting to hit main street.

Students Start Microfinance Programs

From MyFox Chattanooga (via Ben Cunningham):

When Larry Thomas couldn’t get a bank loan for his struggling construction business, he turned to Yale University students less than half his age.

Elmseed Enterprise Program, which provides small loans and intensive technical support primarily to low income and other disadvantaged entrepreneurs, is the first micro-financing program in the country run by college students, organizers say. It sparked a similar initiative last year by Harvard University students, while Georgetown students are planning a program in Washington D.C., Rutgers in New Jersey and others such as the University of Rochester in New York are considering starting programs.

 

Be More than an Entrepreneur

In my Tennessean column this week I write about the importance of defining our lives by more than what we do for a living.

<blockquote>We seem to create folk heroes out of entrepreneurs who expend Herculean efforts to achieve success in their businesses.

And while this is good to a point, if entrepreneurial success comes at the expense of our marriages, our families, our faith, and our friendships, it is a hollow victory.</blockquote>